1841:  An attempt to incorporate a 3rd version of a central bank, this time called: Fiscal Bank of the United States
What was future President H.A. Lincoln doing in those halcyon days ?
In 1839 he already gave a speech against the Sub-Treasury;  because, as Mr. Clay stated (in 1841), the rubbish had to be cleared away before the central Fiscal Bank could be established.

How about future Secretary of the Treasury, Portland Chase ?
Since 1832 he had been attorney for the Bank of the United States;  where he learned everything he knew about banking, central banking, national banking, and national currency.

What of future Police Minister William Seward ?
In 1840, during the election campaign, Mr. Seward busied himself as professional liar for the Whig Party.
As a New York State Senator, on January 31, 1832, he made an elaborate defense of the Bank of the United States.
Seward was counsel for Erastus Corning, a large capitalist of Albany who was the head of the projectors of the Minnesota and Northwestern Railroad Company which, in 1854, by fraud and corruption obtained from Congress an extensive land grant of 900,000 acres.
In 1862 Erastus Corning --as Democrat!-- was Representative from New York, and member of the Sub-Committe of the Committee of Ways and Means, entrusted with producing a National Currency bank bill, making of loans, issue of Treasury notes (H.R. 240), bonds, and the mode of raising the means to carry on the war.

Where was future Chairman of the Committee of Finance, Pitt Fessenden ?
In 1841 he was sitting as a Whig member of the House of Representatives

Extra Globe, Washington, Wednesday, May 19, 1841:

The Zanesville (O) Aurora, published near Mr. Ewing's residence, and likely to be well informed as to his "fair business transactions," says:
Thomas Ewing, Secretary of the Treasury, owes the British Bank of the Uniled States the enormous sum of $200,000 ! Is it any wonder that he traversed the State of Ohio last summer, delivering stump lectures upon the 'corruptions' of the past Administration ? He is a slave to the British money mongers --sold to them body and soul-- and is as corrupt as the dust of filthy lucre could make a naturally depraved man.



27th Congress, 1st Session.
May 31st — September 13th, 1841

In the Senate of the United States

Monday, June 7th, 1841.

Mr. Clay of Kentucky said, in compliance with suggestions thrown out at the last sitting of the Senate, he had framed some resolutions which he would submit for their consideration.  The resolutions were sent to the table, and were read as follows:

Resolved, As the opinion of the Senate, that at the present session of Congress no business ought to be transacted but such as, being of an important or urgent nature, may be supposed to have influenced the extraordinary convention of Congress, or such as that the postponement of it might be materially detrimental to the public interests.

Resolved, therefore, As the opinion of the Senate, That the following subjects ought first, if not exclusively, to engage the deliberations of Congress at the present session, viz:

1.  The repeal of the Sub-Treasury;

2.  The incorporation of a bank adapted to the wants of the people, and of the Government;

3.  The provision of an adequate revenue for the Government by the imposition of duties, and including an authority to contract a temporary loan to cover the public debt created by the last Administration;

4.  The prospective distribution of the proceeds of the public lands;

5.  The passage of necessary appropriation bills;  and

6.  Some modification of the banking system of the District of Columbia for the benefit of the people of the District.

Resolved, That it is expedient to distribute the business proper to be done at this session, between the Senate and House of Representatives, so as to avoid both Houses acting on the same subject at the same time.

* * * * * * *

Mr. Clay of Kentucky asked if there was any thing before the Chair, and being answered, said he wished to call the attention of the Senate to a resolution growing out of some suggestions made in the report of the Secretary of the Treasury.  That report contained an explicit expression of the Secretary's opinion in favor of a United States Bank.  He hoped to be able to submit a plan which will effect the desirable object of reconciling all parties.  With a view of obtaining this plan, he [Mr. Clay] had prepared a resolution, which he wished might now be read.

The resolution was then read, as follows:

Resolved, That the Secretary of the Treasury be directed to communicate to the Senate, with as little delay as practicable, a plan of such a bank to be incorporated by Congress, as, in his opinion, is best adapted to the public service.

He [Mr. Clay] would make a single remark with regard to the relation which he conceived existed between the public officers of the Government and Congress.  The Secretary of the Treasury stands in a peculiar relation with regard to Congress.  He is the servant of Congress;  and by the act of 1789, he is required to report to Congress any plan he may think conducive to the public interest.  His [Mr. Clay's] object in submitting the present resolution, was to obtain for the consideration of Congress the Secretary of the Treasury's plan of a United States Bank.



United States Senate


Saturday, June 12, 1841.

Plan of a Fiscal Bank of the United States.


The CHAIR then submitted the following communication from the Secretary of the Treasury:

Treasury Department,
June 12, 1841.
To the President of the Senate of the United States:

SIR:  In obedience to the directions of the Senate, contained in their resolution of the 7th instant, the Secretary of the Treasury has prepared, and herewith submits, a plan of a Bank and Fiscal Agent.

In the general plan and frame of said institution, he has endeavored to free it from the constitutional objections which have been urged against those heretofore created by Congress, and as far as practicable, without impairing its usefulness, to guard it in its details against the abuses to which such institutions are liable.  And he now respectfully submits it the Senate with the hope that, in the process of consideration and enactment, it may be come, what he did not presume to promise, but which he earnestly desires to see in the possession of the nation, a Bank and Fiscal Agent, free from constitutional objections, and adapted to the wants of the country and convenience of the Government.

It is proposed to incorporate a Bank in the District of Columbia by the name of the Fiscal Bank of the United States, having a capital of thirty million dollars, with power to establish branches or offices of discount and deposite in the several States, with the assent of the States;  that the Government subscribe one-fifth part of the capital;  and on the supposition that it is the purpose of Congress hereafter to direct that the fourth instalment, appropriated by the deposite act of June 23d, 1836, shall be paid into the treasuries of the several States, it is also proposed that a subscription to that amount be made in the name of the United States, for the use of the States respectively;  the stock to be assigned to, and become the property of, such States as shall accept the same, in the manner and in the proportions, and subject to all the conditions provided and imposed by that act.

And for the amount of the six millions to be subscribed by the United States on their own account, and also for the amount to be subscribed for the use of the several States, it is proposed that a stock be created, bearing an interest of five per cent. per annum, redeemable at the pleasure of the Government at any time after fifteen years.

In case Congress should not see fit to make such a provision as is proposed for paying to the States the fourth instalment under the deposite act, it may be well worth while to consider whether the States might not be permitted to take the stock of the Bank according to their respective amount of population, to the extent of ten millions in all, issuing therefor stock of their own, bearing such interest, and reimbursable at such periods, as might be prescribed;  the dividends on the shares thus held by the States, respectively, to be applied, in the first place, to the payment of the interest on their stocks;  with a further provision, if thought necessary, that, in case the proceeds of the public lands should be assigned to the States, those proceeds should be applied to the reimbursement of the principal of their debts, or stocks, created or issued for the purposes aforesaid.

In the opinion of the Secretary, it is desirable that the States should be permitted to take an interest in one of the foregoing modes, or some other mode, in the new institution;  but, if Congress should think otherwise, then it is recommended that the Government of the United States subscribe for ten millions of stock, leaving twenty to be subscribed by individuals.

It is proposed that the affairs of the Bank be managed by seven directors, two of them to be appointed by the President, by and with the advice and consent of the Senate, and five to be elected by the stockholders, at their annual meeting.  A president to be chosen by the directors out of their own body.

That the branches be managed by not more than seven, nor less than five directors, two of them to be appointed by the States in which the branches may be situated, if such State be a stockholder, and the rest to be appointed by the directors of the Bank.

It is proposed that the Bank be the fiscal agent of the Government.  That the public moneys be deposited in it;  and when there, that they be deemed and taken to be in the Treasury of the United States, and that the deposites be not removed except by law, and that the notes of the said Bank be receivable in the payment of public dues, and that payments made by the Treasurer of the United States may be by checks on said Bank.

That the said Bank receive the funds of the United States;  that it transmit them from one part of the Union to another, and distribute them for the payment of public creditors, and perform the duty of pension agent free of charge.

The ordinary powers and privileges of banking institutions being conferred upon it, and the ordinary liabilities and duties imposed in order to prevent over-banking, excessive issues, fluctuations in the price of stocks, and consequent speculations therein, and to secure the bill holders and other creditors of the Bank from danger of loss, it is proposed—

To limit the dividends to six per cent. per annum, but if they fall short in any year, the deficiency, with interest thereon, to be afterwards made good — and when a surplus accumulates, exceeding two millions, the excess to be passed to the credit of the Treasurer of the United States.

That the amount of debts which it may at any time owe, shall not exceed twenty millions over and above its deposites.  That the debts at any time due to the bank shall not exceed the amount of its capital and seventy-five per cent. thereon;  and that when the amount of its bills in circulation shall exceed three times the amount of specie in its vaults, no new loan shall be made.

That it shall not deal in any thing except coin, bullion, promissory notes, and inland bills of exchange.

That it shall take no more than six per cent. upon loans.

That it shall discount no promissory note and purchase no bill of exchange which has more than one hundred and eighty days to run, or make any loan for a longer time.

That no debt shall be renewed.

That it shall not at any time loan the United States more than three millions of dollars, nor any State more than 100,000 dollars, nor either for a longer time than one hundred days, unless authorized by law.

That it shall contract no debt for a longer time than one year.

That it shall issue no note of a less denomination than ten dollars.

That the officers of the institution shall not be permitted to borrow money from, or contract any debt therein, in any manner whatever;  a note or bill of which such officer, as maker, drawer, endorser, or acceptor, is forbidden to be discounted.  The directors of the branches not to be considered officers within the meaning of this provision.

To prevent or expose any fraud or indirection in the management of the institution;  to prevent, also, large and improper loans to individuals, to the injury of the stockholders and the public, and to prevent, likewise, false imputations when such irregularities do not exist, it is proposed that the books of the institution, including the accounts of all individuals therein, be at all times open to the inspection of the Secretary of the Treasury of the United States;  to a committee of either House of Congress;  to each of the directors of the Bank, and to a committee of the stockholders, with power to make public whatsoever they think fit.

It is proposed to provide that the branches shall not issue notes or bills adapted to, and intended for, circulation;  but may sell drafts, not less in amount than fifty dollars, for the purpose of transmission and exchange.

That the Bank shall not suspend specie-payment — that it shall not pay out any thing but coin or bullion or its own notes.  That its existence as a corporation continue for twenty years — but that it be allowed to use its corporate name for two years longer in settling up its affairs.

That no other bank be established by Congress during the existence of the charter.

And providing that it shall not be deemed an infringement of the privileges granted by the charter, if Congress shall order the said corporation to place offices of discount and deposite wherever the same may be necessary for the collection, safe-keeping, and disbursement or the public revenue.

All which is respectfully submitted.

Thomas Ewing,
Secretary of the Treasury.

On motion by Mr. Clay of Kentucky, the report and accompanying bill were referred to the Select Committee on the subject, and 1,500 additional copies ordered to be printed.


[on the same day]

Plan of a Fiscal Agent.


Mr. Walker then sent to the Chair the following resolution:

Resolved, That the Select Committee, to whom was referred the question of reporting to the Senate on the subject of a fiscal agent for the Government of the United States, be directed to inquire into the expediency of vesting the control of said agency in a board of six directors, located at the city of Washington, to be chosen by a joint vote of both Houses of Congress, two of said directors to be elected at each successive vote, each member being permitted to vote only on each occasion for one director, so as to prevent said board being placed under the control of the Executive or of any party.

Resolved, That said committee be also instructed to inquire into the expediency of tendering to the States branches of said fiscal agency, on the condition precedent, that said States have first entered into an agreement with each other for the gradual and prospective limitation or abandonment of the banking power of the States.

Resolved, That said committee be also instructed to inquire into the expediency of confining said agency to the use of gold and silver, and of bills receivable of the Government of the United Slates of large denominations, excluding all the paper of the State banks, and so as to retain an adequate supply and circulation of gold as well as silver at all times in the United Slates.

Resolved, That said committee be also instructed to inquire into the expediency of applying prospectively the bankrupt power the of this Government to the State banks.

The resolution was agreed to.




An Act
To incorporate the subscribers to the Fiscal Bank of the United States.

Be it enacted by the Senate and House of Representatives of the United States of America, in Congress assembled, That a Fiscal Bank of the United States shall be established in the District of Columbia, with a capital of thirty millions of dollars, divided into three hundred thousand shares, of one hundred dollars each share. One hundred thousand shares shall be subscribed for by the United States, and the residue of the said capital may be subscribed and paid for by individuals, companies, corporations, or States, the said individuals being citizens of the United States, and the said companies and corporations being of the several States, or of these United States, or Territories thereof, in the manner hereinafter specified. But Congress reserves to itself the power of augmenting the capital of the said bank, at any time after the first of January, 1851, by authorizing the addition thereto of a sum not exceeding twenty millions of dollars, divided into shares as aforesaid, which may be subscribed for, at not less than their par value, by the United States, or by any State, corporation, company, or individuals, in the manner directed by law: Provided, That the United States shall not subscribe for more than one-third of the said additional capital.

---passed by both Houses of Congress, on July 28th and August 6th, vetoed by President Tyler, on August 16th, 1841.


In the Senate.
Monday, June 21, 1841.

Fiscal Bank of the United States.

Support independent publishing: Buy this book on Lulu.

Mr. CLAY of Kentucky, from the Select Committee on the Currency, repeated [reported ?] a bill to incorporate the subscribers to the Fiscal Bank of the United States, and said he was instructed to make a written report.  He moved that the bill have its first reading by its title, that it made the order of the day for Wednesday next, and that the bill and report be printed, with fifteen hundred extra copies, for the use of the Senate.

Several Senators having desired that the report might be read—

Mr. Clay said as it was principally in his hand writing, with the leave of the Senate, he would read it himself.

The report was as follows:

Senator Henry Clay The committee to which was referred so much of the President's Message as relates to a uniform currency, and a suitable fiscal agent capable of adding increased facilities in the collection, and disbursement, and security of the public revenue, have had the same under consideration, and beg leave to report:

That, after the most attentive and anxious consideration of the state of the currency, and the finances of the Government, in all their interesting and important bearings, the committee have arrived at the same conclusion with the Secretary of the Treasury, that a sound and just policy requires the establishment of a Bank of the United States with as little delay as practicable.

The committee have neither time nor inclination to enter into a discussion of the question of the power of Congress under the Constitution of the United States, to establish a National Bank.  After all that has been said and written on that question during the long period of half a century, nothing remains to be added that would be likely to shed much new light upon it.  It ought, in the opinion of the committee, to be regarded as a settled question — settled by the approbation and judgment of the people, by the authority of the Legislature, by the sanction of the Executive Department of the Government, and by the solemn adjudication of the Judiciary.  If it be not regarded as a decided question, when, in the collisions and conflicts among men, arising out of diversity of opinion and judgment, is a controverted matter to be considered as terminated and quieted ?

Nor do the committee deem it necessary to discuss the question of the expediency of establishing such an institution as a Bank of the United States.  On this there is even less contrariety of opinion than on the former question.  On both, it is the deliberate conviction of the committee that a vast majority of the people of the United States concur;  and that they are now looking, with anxious solicitude, to the deliberations of Congress, under the confident hope that a Bank of the United States will be established at the present extraordinary session of Congress.

Passing by, therefore, those two questions as being unnecessary to be further argued, and assuming, what the committee verily believe, that a National Bank is indispensably necessary, they will proceed, at once, to the particular form, powers, and faculties with which it may be expedient to invest such an institution.  And here the committee have no hesitation in saying that, confiding in the experience of forty years, during which the nation has enjoyed the benefit of a National Bank, and during the greater part of which it has realized every reasonable hope and expectation in the operations of such an institution, they came to the conclusion that it would be wisest to dismiss all experiments, and to cling to experience, and assume the last charter granted by Congress as the basis of a new Bank, engrafting upon it such restrictions, guarantees, amendments, and conditions, as have been found necessary by actual experience.

The Secretary of the Treasury came to a similar conclusion;  and in his report, and the draught of a bill which accompanies it, he has taken as his model the charter granted by Congress in 1816.  On that he has suggested a great many valuable improvements, most of which the committee have incorporated in the draught of a bill which they now report to the Senate.  On this draught they wish to offer to the Senate some brief explanations and observations.

The committee have adopted Washington city, proposed by the Secretary of the Treasury, as the place of location of the principal Bank.  They believe the place of its location is a subordinate question;  but there are many advantages from the proximity of the Bank to the Government.  The distribution of the capital of the Bank among the several commercial cities, in proportion to their respective wants and magnitude, is what they naturally desire, and what will doubtless be done.  But to guard against the exercise of any undue Government or official influence, or the imputation of any unworthy transactions, the committee have thought it expedient to deprive the parent Bank of all power to make any discounts or loans whatever, except loans to Government, authorized by express law.  In order to ensure the command of the best financial abilities of the country, the bill provides that the directors of the parent board, which is to consist of nine members, shall be paid for their services by the corporation, and all compensation to the Directors, in the usual form of bank accommodations, is utterly prohibited.

Thus, the Directors of the Bank at Washington will become a Board of Control, superintending the branches, supplying them with a currency, and banking, exclusively through the agency of their offices of discount and deposite.

The capital of the Bank, proposed by the Secretary, is retained;  but a power is reserved to Congress to augment it by the addition of twenty millions, making the aggregate amount ultimately fifty millions of dollars, if that should be found to be necessary.

To guard against undue expansion of the currency by the operations of the Bank, various restrictions and securities are introduced.

1.  The dividends are limited to seven per cent. per annum;  and, after accumulating a reserved fund of two millions of dollars, to cover losses and contingencies, the excess beyond that seven per cent. is to be paid into the public Treasury.  And, whatever excess remains at the end of the charter, beyond the reimbursement to the stockholders of the capital stock, is also to be paid into the Treasury.  If the dividends fell below seven per cent. during any year of the charter, the deficiency is to be made good out of the surpluses previously paid into the Treasury.  The effect of this provision is, to make a permanent and invariable seven per cent. bank stock, assuming that the administration of the Bank is conducted with integrity and ability.

2.  The debts due to the Bank are required not to exceed the amount of the capital stock actually paid in, and 75 per cent. thereon, which is a greater restriction than usual.  The total amount of debts which the Bank is authorized to contract, over and above the deposites, is not to exceed twenty-five millions of dollars, which is also a greater restriction than was placed upon the late Bank of the United States.

3.  The publicity which is required of the general condition of the Bank, and the full and complete exposure to committees of Congress, and to the Secretary of the Treasury, which is amply secured, of all the books and transactions of the Bank, including private accounts.

4.  The prohibition of the renewal of any loan;  thus putting an end to all mere accommodation paper, as far as practicable, and confining the Bank to fair business transactions.

And 5.  The Bank is prohibited from making any further discounts or loans whenever its notes in circulation exceed three times the amount of specie in its vaults.

To protect the community and the stockholders against mismanagement of the Bank, several provisions have been inserted, which it is hoped may be effectual.

1.  No paid officer of the Bank is to receive loans or accommodations in any form whatever.

2.  Securities are provided against abusive use of proxies, such as that no officer of the Bank can be a proxy;  no proxy can give more than 300 votes;  no proxy to be good which is of longer standing than ninety days, &c.

3.  A prohibition against the corporation's transacting any other than legitimate banking business; excluding all dealing in stocks, and all commercial operations.

4.  A requisition that a majority of the whole number of the board of directors shall be necessary to transact the business of the corporation.

5.  Ample power to make the most thorough examination into the condition and proceedings of the Bank, down to the accounts of individuals, by totally removing from the Secretary of the Treasury and committees of Congress the veil of secrecy.

And 6.  By denouncing and punishing as felony the crime of embezzlement of the funds of the Bank when perpetrated by any of its officers, agents, or servants.

Concurring entirely in the sentiment expressed by the Secretary of the Treasury, that many wise and patriotic statesmen, whose opinions are entitled to consideration and respect, have questioned the power of Congress to establish a National Bank;  and that it is desirable, as far as possible, to obviate objections and reconcile opinions, the committee have attentively and earnestly examined the provisions incorporated in the draught of the bill of the Secretary, in regard to the branching power of the Bank, and they would have been happy if they could have reconciled it to their sense of duty to adopt it.  But, after the fullest consideration, they have been unable to arrive at that result.

It was not without some hesitation that the committee agreed to the location of the Bank in the District of Columbia.  This they did, because they believed that the utility of the Bank did not so much depend upon the place of its location as upon the capital, faculties, and powers, which should be given to it.  But to isolate it in this District, without giving it any other branching power than such as it might derive from the consent of particular States, would be to create an enormous District bank, devoid of effective national character.  Such a bank would be a bank only of the District of Columbia, and its offices of discount and deposite would be nothing more than banks of the States which might allow them to be planted within their respective limits.  For all national purposes Congress might as well recharter one of the existing District banks, enlarge its capital, and give it authority to establish offices of discount and deposite in any State that would permit it to be done.

The committee believe that the capital of a Bank so constituted would never be taken;  and that, if taken, the institution would be wholly unable to accomplish the great and salutary purposes for which it is desired and should be designed.

But the question of establishing a Bank thus to be restricted and circumscribed involves higher and graver considerations than those of mere expediency.  The General Government has or has not the power to establish a National Bank.  If it has the power it derives from it the existing grants in the Constitution of the United States.  The committee believe it has the power, and ought to exercise it.  But after a contest during the last ten or twelve years in respect to the constitutional power of Congress, which has been marked by so much animosity and bitterness, a forbearance to exercise the power would be a virtual surrender of the power.  If a Bank were to be created, whose operations within the limits of the States were dependent not upon the will of Congress, but upon the will of each State, separately announced, the creation of such a Bank would add another to the list of disastrous experiments, and would be tantamount to a relinquishment of the national power, and it could never be resumed.

The power of a Federal Government is only to be found in the grants of the Constitution.  If they are inadequate to the fulfilment of the great purposes of its establishment, they can only be increased in the mode of amendment which the instrument itself has prescribed.  They cannot be augmented by the grants or consent of any state or States short of the number of two-thirds, whose concurrence is necessary to give validity to an amendment.  A derivation of power to the General Government from the consent of particular States would be unsound in principle, and the committee apprehend dangerous in practice.  Admit such consent to be a legitimate source of power, the Government would not operate equally in all the States, and the Constitution, losing its uniform character, would exhibit an irregular and incongruous action.

Entertaining these deliberate views, the committee are decidedly of opinion that no bill for the establishment of a Bank in the District of Columbia will be effectual which does not contain a clear recognition of the constitutional power of Congress to establish branches wherever, in the United States, the public wants, in its judgment, require them.  They cannot consent that a Bank, emanating from the will of the nation, and imperatively demanded by the necessities of the Government and of the nation shall be wholly dependent for its useful operation upon the will of each and every State, distinctly expressed.

Accordingly, in the draught of a bill now reported, the right is asserted to exercise the branching power of the Bank independent of the assent of the States.  The committee dare not allow themselves to believe that the bill is free from all defects, but they do hope that these, in a spirit of liberality, will be corrected by the superior wisdom of the Senate and of the House, and that the present session will be signalized by the establishment of a national institution, which has become a desideratum to the general prosperity.

The advantages which will flow from such an institution, in both our domestic and foreign relations, are manifest and incontestable.

It will give the people a sound currency of uniform value throughout the Union, which is just as necessary to the successful operation of all branches of business as pure air or water is to the preservation of human life or health.

It will revive and extend commercial intercourse, which, for the want of a common medium, has been almost suspended between different parts of the Union.

It will reduce domestic exchange from the enormous premiums and discounts now frequently paid, to the moderate standard growing out of the mere cost and insurance on the risk of transporting specie from one to another part of the Union.

It will, consequently, save hundreds of thousands of dollars now annually lost in transactions of exchange.

It will essentially benefit the manufacturing interest by enabling it to realize sales and the proceeds of sales.

It will powerfully contribute to the resumption of specie payments by the banks, whose existing delinquency is the greatest source of all prevailing pecuniary and financial embarrassments.

It will greatly tend to prevent and correct the excesses and abuses of the local banks.

It will furnish a medium common to all parts of the Union for the payment of debts and dues to the Government;  thus rendering duties and taxes uniform in fact as well as in name.

It is indispensable to the convenient and successful financial operations of the Government in all the departments of collection, safe-keeping, and disbursements of the public revenue.

Such are some of the domestic benefits which the committee fully believe will be secured by a National Bank.  Those which appertain to our foreign relations are also worthy of serious consideration.

If it be true that money is power, its concentration under the direction of one will, sole or collective, must augment the power.  A nation, without such a concentration of power, maintaining extensive commercial intercourse with another nation possessing it, must conduct that intercourse on a condition of inequality and disadvantage.  National Banks, in other countries, beget the necessity, therefore, of a National Bank in this country, in like manner as National Governments in foreign nations must be met by a National Government in ours.

Accordingly, we have seen the influence exerted by the Bank of England upon American interests, when those interests were exposed to the action of that Bank, and were left without the protection of a Bank of the United States.  The committee do not wish to be understood as intending to express any approbation of the commercial operations in which the Pennsylvania Bank, assuming the name of the Bank of the United States, engaged, when that state of things arose.

But they do mean to say that the interests and dignity of the United States demand that they should not be exposed, beyond the necessary and legitimate influence of monetary and commercial operations, to the action of a foreign banking institution.  They believe that, without a competent Bank of the United States, foreign National Banks may and probably will exercise an undue and possibly pernicious influence upon our interests.

In this view of the case, the question is, whether it is better that we should be left liable to be materially affected by a foreign institution, in which we have no interest, over which we can exert no control, which is administered solely in reference to foreign interests, or we shall have an American Bank, the creature of our will, subject to American authority, and animated by American interests, feelings, and sympathies ?

The committee could not entertain a doubt in such an alternative.  And, in reference to the foreign aspect of the Bank, the committee thought it expedient to allow it to deal in foreign bills of exchange, which are the barometer of the state of our foreign trade.

In conclusion, the committee think it proper to say that they have given due consideration to the various memorials referred to them, and to the instructions moved by a Senator from Mississippi.

They subjoin that wherever, in this report, the committee is mentioned, a majority of the committee is to be understood.

All which is respectfully submitted.


---[The national government is not (or should not be) a private corporation, for private profit.
2)  All these benefits, listed, could be derived from a fully Government-owned, truly national bank.  (no need for private investors; and since the majority in this proposed Fiscal Bank are private investors, we revert back to Mr. Calhoun's years old question:  what need do we have for them, what reason do we have for lending/granting the government's credit to private bankers ?;  so the principal motivator behind this bank is NOT national necessity, NOT national benefit —these are only the cover, the excuse— the real motive is private control, private gain !!
3)  It is a waste of time and space to discuss whether it is constitutional or not;  the point is:  is there any need for a private fiscal bank ?  could the government not do for itself what a bank can ?  the Navy department is not farmed out to private mariners,  why should the Finance department be ?!?]




Speech of Senator James Buchanan,
of Pennsylvania.


In Senate,
Wednesday
, July 7, 1841.
— On the bill to incoporate the subscribers to the Fiscal Bank of the United States.

Mr. Buchanan rose and addressed the Senate as follows:

Mr. President: It was originally my intention, in opening this debate on our side of the question, to confine myself to some observations in reply to the report of the Select Committee on the Currency, and to the remarks of the Senator from Kentucky, [Mr. Clay] which I consider as a mere supplement to that report.  I intend still to pursue this course, although the occasion is very tempting to depart from it, and go more at large into the discussion.  I think it could be demonstrated that this bill, considered in itself as a mere Bank bill, is a production of the dark ages of the world, and does not come down beyond the tenth century of the Christian era;  and that, in its preparation, all the lights of knowledge, and all the lessons of experience on the subject of banking, have been utterly disregarded.  But I waive all this for the present, and proceed to my reply.

And, in the first place, the committee declare as "their deliberate conviction, that a vast majority of the people of the United States concur in the expediency of establishing such an institution as a Bank of the United States, and that they are now looking with anxious solicitude to the deliberations of Congress, under the confident hope that a Bank of the United States will be established at the present extraordinary session of Congress."

It is their "deliberate conviction" that a vast majority of the people of the United States anxiously desire the establishment of a National Bank.  Whence is this "deliberate conviction" derived ?  From what source does it proceed ?  I am entirely at a loss even to conjecture.  Was the question of a National Bank discussed any where before the people by the great Whig party previous to the late Presidential election ?  Was the establishment of such a Bank then made a turning point of Whig policy any where ?  No, sir, no;  the Whigs every where shrunk from the question.  They concealed their opinions on the subject —nay, more— in some States of the Union they professed, that hostility to a Bank of the United States was one of the cardinal principles of their party.  The Whig convention of Virginia, in their address to the people, expressly declare that General Harrison was opposed to a National Bank;  that be was against it on constitutional grounds;  and unless I am greatly misinformed, a distinguished gentleman of North Carolina, [Mr. Badger,] now a member of the Cabinet, in an address before the Whig convention of that State, indignantly pronounced the assertion that General Harrison was in favor of such a Bank, to be a falsehood.  This speech was, I understand, printed and circulated all over North Carolina.  I have not seen it myself;  but have received my in formation from an undoubted source.

Mr. Graham said the speech was not made before the Whig convention, but at a public meeting in that State.

Mr. Buchanan.  Then the gentleman admits that the speech was made.  Where it was made is of little consequence.

Mr. Calhoun.  I have the speech of Mr. Badger in my band, and shall read the following extract from it:

"Next it is said that General Harrison favors a Bank of the United States.  The charge is false.  His opinions, on the contrary, are against a Bank."

Mr. Graham.  The speech was not made before the Whig State Convention on the 5th of October, 1840.

Mr. Calhoun.  It will show for itself.  It appears to have been made on the 2d of March, 1840.

Mr. Graham.  At a meeting of the citizens at Granville.

Mr. Calhoun assented to this, and said that a hundred thousand copies of the speech had been printed and circulated.

Mr. Buchanan continued.  The misunderstanding relates not to what Mr. Badger said, but merely as to when and where he said it.  The important fact is established beyond all doubt, that this distinguished gentleman, who was selected by the late President as a member of the Cabinet, on account of his eminent talents, and his avowed political principles, did come out, at a great convention in March last, and, in the strongest term, did pronounce the charge to be false that Harrison favored a Bank of the United States.  This is all I desire to know;  and whether one hundred thousand or one thousand copies of this address were circulated, is a matter of small importance.

We then have the solemn declaration of a man of high character, at the head of the Whig party in North Carolina, branding as a falsehood the charge that the late President even favored a National Bank.  And yet it is gravely asserted that the people at the late election have determined in favor of such a Bank !

To the best of my knowledge the question war never publicly discussed anywhere in my own State by the Whig party throughout the late canvass.  They would have committed political suicide had they made it a turning point of the election.  Their intention to establish a National Bank was carefully concealed from the people.

The late Legislature of Pennsylvania was Whig, decidedly Whig, in both its branches.  They, accordingly, instructed their Senators to vote for the repeal of the Independent Treasury, and the distribution of the proceeds of the public lands among the several States;  but they did not even attempt to instruct us in favor of a National Bank.  They were asked by our friends in the Legislature "why do you not instruct your Senators on this great question?"  They were urged to come up to this point by the strongest appeals;  but all in vain.  They shrunk from the responsibility, knowing that the people would have condemned the act.

Three Congressional elections have since been held in Pennsylvania.  Two of them were not contested;  but in the third, there was an animated struggle.  This was in the south-western district of the State, composed of the counties of Fayette and Greene.  I am informed by his successful competitor that the Whig candidate in that district publicly and repeatedly declared himself, throughout the contest, to be the friend of the Independent Treasury, and the enemy of a Bank of the United States.  How strong must have been the current of public opinion which could drive this candidate into an avowal of friendship for the Independent Treasury, and hostility to a National Bank !

---[This is, also, the same (same old) tactic:  In the 1868 campaign, too, the whig-republicans lied like dogs, as to how the 5/20s should be redeemed]

But this "deliberate conviction" of the Committee on the Currency is in direct opposition to the deliberate opinion of the President of the United States;  and I shall appeal from the judgment of the committee to that of the head, at least the official head, of the party.  He has in substance declared, in his late message, what the history of the country has demonstrated to be true, that the question of establishing a National Bank has never yet been presented distinctly before the people of the United States, without receiving their condemnation.  I shall not read this portion of the message, because every Senator is already familiar with it.  In the President's opinion, the late contest was decided on well-known principles;  but the creation of a National Bank was not among the number: and most assuredly he is correct in this latter opinion.

In the face, then, of all these facts, and many more which might be adduced, what becomes of the "deliberate conviction" of the committee that a vast majority of the American people are anxiously solicitous for the establishment of a National Bank.

It would be well for gentlemen who are really the friends of such a Bank, to consider seriously the consequences which may flow from the passage of the bill at the present extra session.  No notice of such a measure was given in the proclamation of the President convening Congress.  The people did not expect it, and have never demanded it at your hands.  Public opinion is wholly unprepared for it.  And yet, at this hot season of the year, when we ought to be all at home, here we are confined in the Capitol, whilst the friends of the Bank are straining every nerve to "rush" it, prematurely, through the forms of legislation, and fasten it upon a reluctant people.

What will be the consequences should the bill become a law before our adjournment ?  Why, sir, from every hill and and valley throughout the land — from Georgia to Maine, and from the Atlantic to the Rocky Mountains — the cry of "repeal" will be sounded.  "The repeal of the Bank," will electrify the people of this country to as high a point as the "repeal of the Union" has electrified the Irish people, Sir, your success will prove fatal to your Bank.  All that the American people demand is fair play.  This they must have: and they will never quietly submit to this snap judgment which would rivet upon them and their children such an odious institution.  No, sir, death is not more inevitable, than that the sudden and premature adoption of this bill by Congress will be the source of innumerable evils to the country.  We shall witness new agitations of public opinion, and a new Bank war, compared with which our history has yet presented no parallel.  I entreat you, gentlemen, to pause.  Wait at least for the fall elections — wait for the expression of public opinion— and if it should demand a Bank, why let a Bank be established.  It may then hope to exist in peace.  But if it should now be forced upon us, it will give birth to such political convulsions in the country as we have never yet witnessed.

A Bank established in obedience to the public will, clearly expressed, may become a good investment for its stockholders;  but this political Bank, should it be now established, will linger out a sickly existence, and at length fall beneath the strong aim of public opinion.

Now, sir, whatever may be said in regard to the propriety of repealing the charter — and for one I should never adopt this measure unless driven to it in defence of the people against the hasty and violent conduct of the friends of a Bank — I presume there can be but little doubt of the power, even if Congress, like the States, had been expressly prohibited by the Constitution, from passing any law impairing the obligation of contracts.  In the celebrated case of Dartmouth College, the late Chief Justice Marshall, in delivering the opinion of the Court, plainly and broadly draws the line of distinction between public and private corporations.  Whilst those of a public character may be repealed, those of a private nature are inviolable.  Hear his own words: "If the act of incorporation (of Dartmouth College) be a grant of political power;  if it create a civil institution to be employed in the administration of the Government;  or if the funds of the College be public property;  or if the State of New Hampshire, as a Government, be alone interested in its transactions, the subject is one in which the Legislature of the State may act according to its own judgment, unrestrained by any limitation of its power imposed by the Constitution of the United States."

But it required no judicial decision to teach a freeman this doctrine.  It never could be imagined for a single moment, that the Constitution of the United States intended to enable Congress or a State Legislature to transfer forever either to corporations or to individuals those great and general powers of Government with which they have been entrusted by the people.  If Congress can deprive itself by contract of any one of these powers, it may dispose of them all, and that irrevocably;  and the National Legislature might thus destroy itself, and transfer all its most important functions to corporations.  Such an idea cannot be tolerated for a moment.

The only question, then, would be, is this fiscal agent, in the language of the late Chief Justice, "a civil institution, to be employed in the administration of the Government ?"  Who can doubt it ?  Its friends avow that it is an institution necessary for the collection, safe keeping, transfer, and disbursement of the public money;  and that it alone can furnish a sound and uniform currency, and regulate the foreign and domestic exchanges of the country.  Nay, more;  its advocates admit that this corporation is constitutional, only because it can exercise these great and important financial powers of Government.  It will be as much a branch of the Treasury Department as ever the Independent Treasury was;  and, like it, and all other acts of Congress which relate to the great public interests of the country, will be liable to repeal.  If the Government should think proper to call in the aid of private individuals to establish this public fiscal corporation, their private interest can never paralyze the arm of Congress or prevent it from exercising its high legislative discretion in repealing this law and substituting any other fiscal agent which might, in its opinion, conduce more to the interest of the country.

I speak solely of the question of power, under judicial decision;  and I merely glance at the subject for the present.  In the event of repeal, the private stockholders in such a Bank may have an equitable claim for indemnity on Congress;  but nothing more.  It is wholly unlike the case of a State bank charter granted to individuals, which has been declared by the judiciary to be a private corporation.

Yes, sir, "repeal," "repeal," will be the cry every where, should the bill now pass;  and the struggle will never cease untill the law shall be expunged from your statute book, or until the power of money shall have subdued the free and manly spirit of the American people.

The Committee express a decided opinion that the power of Congress to establish a National Bank "ought to be regarded as a settled question."  "It is settled," "it must be considered as settled," say all the friends of the Bank;  and their arguments upon this subject have been urged for the purpose of proving, not that this question ought to be, but that it is settled in their favor.  Now if it were not unparliamentary language, and if I did not desire to treat all my friends on this side of the House with the respect which I feel for them, I would say, that the idea of this question having been settled so as to bind the consciences of members of Congress when voting on the present bill, is ridiculous and absurd.

Before a court of law, in a case involving private rights under either of the old charters, it may be considered as settled;  but the proposition now before Congress is to create a new Bank, the two old Bank, having lived out the allotted period of their existence.  The question is now put to the conscience of each Senator, and he is asked, "do you posses the power under the Constitution to create this Bank?"  If all the judges and all the lawyers in Christendom had decided in the affirmative, when the question is thus brought home to me as a legislator, bound to vote for or against a new charter, upon my oath to support the Constitution, I must exercise my own judgment.  I would treat with profound respect the arguments and opinions of judges and constitutional lawyers;  but if, after all, they failed to convince me that the law was constitutional, I should be guilty of perjury before high Heaven if I voted in its favor.

I respect judicial decisions, within their appropriate sphere, as much as any Senator on this floor.  They put at rest forever the controversy immediately before the court;  and as a general rule, they govern all future cases of the same character, but even these decisions, like all other human things, are modified and changed by the experience of time, and the lights of knowledge.  The law is not now what it was fifty years ago;  nor what it will be fifty years hereafter.

But how does the constitutional question stand at the present moment, even upon the authority of judicial precedent ?  Have the Supreme Court decided that any independent power exists in the Constitution authorizing Congress to establish a National Bank ?  No, sir;  no such thing;  because this would have been in direct opposition to the well known vote of the Convention itself, refusing to Congress the power of granting charters of incorporation.  There is no judicial precedent in existence which can restrain, or ever intended to restrain the freedom of members of Congress, in voting on the question of a new bank.  Directly the reverse is the truth.  The opinion of the Supreme Court, in the case of M'Cullough against the State of Maryland, decides no such principle.  On the contrary, it expressly refers the constitutional question back to Congress upon every new attempt to pass a new bank charter.  This decision is founded upon two clauses of the Constitution;  the one conferring on Congress the power "to lay and collect taxes, duties, imposts and excises" for the purpose of paying the debts and providing for the common defence and general welfare of the United States;  and the other, "to make all laws which shall be necessary and proper for carrying into execution" the enumerated powers.  The only point decided is, that after Congress have determined that the establishment of a bank is a means necessary and proper for the collection and disbursement of the public revenue;  the Supreme Court will not rejudge their justice and declare that it is not a necessary agent to accomplish these purposes.  They say that it must be an extreme case indeed which would induce them to declare that the means selected by Congress to carry into effect any express power, were not necessary and proper to accomplish the purpose.  They thus expressly refer the question back to each Senator and Representative called to act upon the subject, and cast upon him the responsibility of deciding whether a bank of the United States be necessary to carry into effect the power of taxation.

This is the very point of the decision.  But strange as it may seem, whilst the Supreme Court have thus expressly devolved upon Congress the decision in the first instance of the question, whether a bank be constitutional or not, keen-scented gentlemen rise in their places here and gravely contend that this very question has been so conclusively settled by the Court as to fetter our judgments and consciences, and compel us to abandon the use of our reason when legislating upon the subject.  So long as the late bank was in existence, the judgment of the Court declaring it to be constitutional, was the law of the land in relation to that institution.  But it has passed away, and now when it is proposed to establish a new bank, it becomes the imperative duty of one and all of us, even in the opinion of the Court to decide for himself whether this is a necessary agent to carry into effect the taxing power.

For my own part, I do not think it is.  I believe that the Independent Treasury is an infinitely better agent for the purpose of collecting and disbursing the public revenue.  I should greatly prefer, to a United States Bank, even a system of special deposites of the public money in State banks, prohibiting them under severe penalties from using it for banking purposes;  although in comparison with the Independent Treasury, I should disapprove and condemn such a plan.  But any agent for me, rather than a National Bank.  The Judiciary, then, most clearly have not settled this question.

But even if the Judiciary had settled the question, I should never hold myself bound, by their decision, whilst acting in a legislative character.  Unlike the Senator from Massachusetts [Mr. Bates] I shall never consent to place the political rights and liberties of this people in the hands of any judicial tribunal.  It was, therefore, with the utmost astonishment I heard the Senator declare, that he considered the expositions of the Constitution by the judiciary to be equally binding upon us, as the expositions of the moral law by the Saviour of mankind, contained in the Gospel, were upon Christians;  and that these judicial expositions were of equal authority with the text of the Constitution.  This, sir, is an infallibility which was never before claimed for any human tribunal;  an infallibility which would convert freemen into abject slaves;  an infallibility which would have rendered the infamous sedition law as sacred as the Constitution itself, the judiciary having decided this law to be constitutional;  and which would thus have annihilated throughout the whole extent of this Union, the liberty of the press and the freedom of speech.

No, sir, no: it is not the genius of our institutions to consider mortal men as infallible.  No man holds in higher estimation than I do, the memory of Chief Justice Marshall;  but I should never have consented to make even him the final arbiter between the Government and people of this country on questions of constitutional liberty.

The experience of all ages and countries has demonstrated that judges instinctively lean towards the prerogatives of Government;  and it is notorious that the court, during the whole period which he presided over it, embracing so many years of its existence, has inclined towards the highest assertion of Federal power.  That this has been done honestly and conscientiously, I entertain not a doubt.

The principle of constitutional construction which would deduce the power to establish a Bank of the United States from the source where it is said to exist, would break down all the barriers erected by our fathers between Federal and State authority.  If you can infer this power from the simple power of taxation in the Constitution, I ask what other power which you may desire to exercise may not be inferred from that or some other clause ?  An ingenious man might thus fasten any power which Congress or the President may desire to exercise, on some one of the express grants contained in the constitution.  But the incident cannot transcend its principal — the stream cannot ascend higher than its fountain, and upon the mere power of levying the taxes necessary to support an economical Government, you can never erect a vast corporation to overshadow the whole land, and, if not in form, yet in substance, to change the character of all our institutions.

Never, never, can you fairly infer the existence of the power to create a Bank from that of the power "to lay and collect taxes."  But it neither was nor is my purpose to enter upon the constitutional argument further than to show that the question has not been settled.

If the question has not been settled by the Judiciary, has it been settled by Congress ?  Certainly not.  If two National Banks have been chartered, they have both been suffered to expire at the termination of their charters, because their existence was believed to be a violation of the Constitution.  To say the least, then, the legislative precedents are equal on each side.  But if we take into consideration the repeated attempts to establish a Bank which have failed, Congress have much oftener decided against the power than in its favor.

The people have never failed to decide against this power, when the question has been distinctly presented to them, as it was at the Presidential election of 1832, after General Jackson had vetoed the Bank charter.  In short, the question has neither been settled by the Judiciary, nor by Congress, nor by the people, nor by the Executive, it may have been against the existence of this dangerous power, and against the policy of its exercise.

The committee say that "they have adopted Washington city, proposed by the Secretary of the Treasury, as the place of location of the principal Bank."  The Senator from Kentucky [Mr. Clay] has informed us that he felt a slight preference for other places;  but he agrees with the committee in believing that this is "a subordinate question."  He has, therefore, I suppose, kindly, yielded the point to his companions on the committee, for the sake of harmony.  Now, sir, I consider this point which he has thus surrendered to be of the very last importance.

Washington city, then —a place destitute of commerce, either foreign or domestic— is the chosen home of this great central money power.  If you desire a bank for the purpose of facilitating the commerce, encouraging the manufactures, and promoting the agriculture of the country, Washington city is the very worst spot for its location which could be selected within the broad limits of the Union.  But, sir, if you wish to establish a great Treasury Bank, which shall be under the direct influence and control of the Government, this, above all places in the universe, is the very place for its location.  The reason is palpable.  Here the money power of the Union will be brought into conjunction with the political power;  and here they will act together in perfect concert and harmony.  Henceforward there will be no jarring between these two high powers.

Now, sir, whatever may have been the design of its projectors, this Fiscal Agent, should it ever be established, will be, both in fact and in form, nothing more nor less than a Government Bank.  If I were asked for a definition of a Government Bank, could I give a better one than to say: it is a bank over whose directors the Government will possess, from the very nature of its organization, a controlling influence, —whose stock will be chiefly owned by the Government, —whose surplus profits, beyond a limited dividend to private stockholders, will all belong to the Government, —and whose chief source of profit will be to loan out to individuals, and use, according to its own discretion, the money of the Government ?  I think I could not give a more perfect definition of such a Bank than is embraced in the particulars which I have just enumerated.  If this be true, and who can doubt it, then this Fiscal Bank of the United States will be a Government Bank.

[Dear, oh dear;  blinded by your religion.  If the proposed bank had been truly —100%— owned by the Federal government, in majority, and by the State governments, in minority, what objections could you have against it ?  it would be the same as the Sub-Treasury with branches all over the Union.  But the proposal is that the Federal government will be a 1-third minority owner, and the 2-third majority will be held by private bankers.  2 of the directors will be government-appointed, 5 of them share-holder appointed.]

And, in the first place, the Government will have a controlling influence over the directors of its own Fiscal Agent.  Who will these directors be ?  Not merchants;  not manufacturers;  not men actually engaged in business.  Such men will never leave their home and their employment, to reside in this city, and to become come directors of this Bank.  They will remain in Boston, in New York, in Philadelphia, in Baltimore, in Richmond, and every where else except in this city, attending to their business.  Here no such practical men can be found;  and the Senator from Kentucky is, therefore, of opinion that the directors ought to be selected beyond the limits of the District.  Who, then, will these directors be ?  Does it not result, from the very nature of things, that they must be politicians ?  Who would come to this city, and spend the whole, or the greater part of the year here, as a director of this Bank, unless it were some political cormorant, desirous of obtaining influence for himself and office for his family and friends ?

---[Man, oh man;  here is the root-cause of the problem, and reason why no one even attempted to solve the problem.
Who are the employees of the Treasury Department ?  Who is the Secretary of the Treasury ?  Are you some "political cormorant" ?  15 years from now you will be President, did you do it just to obtain influence, to make war on the Mormons ?  In 1857 you complained about the State-chartered banks and threatened them.  So what exactly do you want ?  Do you just want to twaddle —to bullshit the audience;  to talk of regulating banks;  to talk of solving the question of national finances ?
The Federal Government of the United States, and the people of the United States, need a nation-wide fiscal agent and a nation-wide uniform in value currency.  Who should be this fiscal agent ?  Who should issue and circulate this currency ?  And what should this currency be based on ?  On the nation's credit ?  on the nation's assets ?  on the nation's silver and gold ?  on non-existent reserves of private banks ?  on a permanent national debt (at 6% interest) ?  Perhaps you should make up your mind.
So long as banks exist, they will regulate every thing around them !  This recent election was paid for by bankers;  future President Harrison was paid for, the Whig members of Congress were paid for, even some Democrat members were paid for by bankers.  Why ?  Why would bankers give money to candidates ?  Because they want something, in this particular case, they wanted a grand central bank which issues and circulates its notes as the nation's currency, and they wanted to base this currency on permanent (funded) bonded national debt (at interest).]


Now, sir, if you desire to preserve this Bank of the United States free from the influence and control of the Government, you ought to remove it to as great a distance as possible from this city.  Instead of placing it under the control of politicians, which must be the case, should you locate the bank here, you ought to plant it in some commercial city, where merchants and men of business, having a greater interest in commerce than in politics, would become its directors.  This District is redolent with politics.  Here, "we live, move, and have our being" in an atmosphere of politics: and during the walks of these directors beneath the groves of the Capitol, (to use the language of the Senator from Kentucky,) politics and not philosophy will be the theme of their conversation, and politicians, not philosophers will be their companions.

Of all men in the world, the moneyed aristocracy are the most anxious to propitiate the Executive power and acquire political influence.  There are no persons before whom stars and garters and foreign missions shine with such dazzling splendor.  They have already acquired wealth;  and what they most desire afterwards are political rank and standing in society for themselves and their families.  Truly Washington is the very spot in which to establish a great political Treasury Bank, and here it will flourish in the utmost perfection.

But let us proceed one step further.  As if for the very purpose of placing these Directors more effectually under the control of the President, their number has been reduced to nine.  Nine, sir, only nine is the number.  The first Bank of the United States had twenty five directors, and the Executive appointed none of them.  It was said, and truly said, that the Government, notwithstanding, exercised an undue influence over this Bank;  but before they could obtain it, they were obliged to propitiate at least thirteen of these twenty-five directors.  The number afforded some security against Executive influence.  The second Bank of the United States had also twenty-five directors, one-fifth of whom were appointed by the President;  but still eight of those elected by the stockholders must be gained over to the Government in order to obtain a majority.

As if for the very purpose of rendering this Bank a mere Government machine which will work easily, the number of Directors has been reduced to nine.  I do not say that this was the intention;  but such must be the inevitable effect.  When we consider that these nine directors are to be permanently established here, under the very eye of the Executive, it must be admitted by all, that there never was a better contrivance for making this a mere rotten borough political Bank, to be used for his benefit and at his pleasure throughout the Union, whenever occasion may require.  But nine solitary directors !  And what else ? One-third of these, —instead of one fifth as formerly, are to be appointed by the President.  They will be his own dependent creatures and directly under his own control.  In our former Banks, the directors received no salary.  It was supposed they would be men of business, owning stock in the institution, who would give their time and services to promote its interest and thus to benefit themselves, as well as the community of which they were members.  But in this Bank the directors will be salaried officers, and three of them may be dependent for the bread which feeds their wives and their children, on the will of the President of the United States.  If he can obtain but two of the directors elected by the stockholders, he will then have a majority of the board.  In this he will encounter no difficulty.  Wealth and power are ever ready to rush into each other's arms;  and the Bank and the President will act in harmonious unison.

For these reasons, I most solemnly declare that I believe the project of a Fiscal Sank, reported to the Senate by the Secretary of the Treasury;  to be the very worst and most dangerous exercise of the power claimed to create a Bank which has ever been attempted under this Government.  I do not say that it is the most unconstitutional;  but this is only because there can be no degrees of unconstitutionality.  Viewing the practical evils which would flow from such a Treasury Bank, should it be called into existence, it defies all comparison with any former Bank.  I am sorry the Senator from Kentucky ever yielded his consent to it so far as he has done.  Let this city be the place of its location, and you make it from necessity the Bank of politicians, and not of business men.

In the days of Jackson we have witnessed the exception, not the rule.  Then the money power arrayed itself against the political power, and the struggle was tremendous.  Nothing but the unexampled personal popularity of this great man decided the contest in his favor.  But these two powers will never again assume a hostile attitude towards each other.  It is their mutual interest to cultivate the closest alliance.  Henceforward, the money power may play the part of Warwick in setting up kings;  but it will never attempt to pull them down.  It will always be the fast friend of the existing dynasty.

Why, sir, the very power which the Senator from Kentucky has conferred upon the Secretary of the Treasury to examine the accounts of private individuals with the Bank, so far from being a restriction upon it beneficial to the public, will only prove to be a new source of Executive influence.  This examination is virtually confined to the Secretary or his agent;  because the occasions will be extraordinary and will scarcely ever occur until the mischief has been actually done, when either House of Congress or a meeting of the stockholders will appoint a committee for the purpose of making such an examination.  The Secretary, and he alone, will thus have it in his power to examine or not to examine, to conceal or to disclose the condition of the Bank according to his pleasure.  Should there be any thing wrong in its management, as from its very nature there must and will be, what an influence over the Bank this power will confer upon him !

Whilst the power of examining private accounts is virtually given to the Secretary alone;  the stock holder who is a partner in the concern, and perhaps interested to the whole amount of his fortune, has been excluded from the exercise of this right, privilege I will not call it, by a solemn vote of the Senate.

When I first read the Senator's report, and before I had examined his bill, I was disposed to admit that he had at least introduced one excellent restriction, that of publicity, into his charter;  but when I discovered that this publicity was in fact confined to the Secretary of the Treasury, whose daily associates "in the groves of the Capitol" will be the nine Bank Directors stationed in this city, I was compelled to change my opinion.  I then at once decided that this restriction, like all the rest, was one in name and in name only.

If you will afford real publicity —if you will make known to those interested, who are the borrowers from the Bank, and the amount borrowed by each;  whilst you thus inflict no real injury up on it or upon any of its honest and solvent customers, you will impose a most salutary restriction upon its operations.  The true condition of a Bank can never be ascertained except from the character and circumstances or the men who have borrowed its money.  To exclude the note holders and the stockholders from this knowledge, and to constitute the Secretary of the Treasury, who may have no interest in the pecuniary condition of the Bank, its sole examiner, will in practice prove to be no efficient restriction whatever.  Had real publicity been required under the charter of the late Bank, thousands of widows and orphans would have been saved from ruin by its mismanagement.

Now, sir, what power will these nine directors, one-third of whom will be the dependent creatures of the President, exercise ?  Within the broad limits of the charter, their will is law.  They can establish branches where they please, and remove them when they think proper.  On them is conferred the patronage of appointing all the directors and all the other officers of all the branches throughout the whole extent of the Union.  But all this vast patronage will amount to nothing compared with the power which is claimed for the Bank by its friends.  If this exist, these nine Washington city directors will possess the power to make money plenty, or make money scarce, over the whole land;  the power to make men rich today and poor to-morrow;  and the power, by expanding or contracting their issues, to raise or to depress the price of real and personal estate throughout the Union.

These are powers which cannot safely be entrusted to any directory of mortal men;  especially to men who must, from the nature of their condition, be partisan politicians.  Sir, if you desire that these vast powers shall be exercised with any regard to the safety of the people, you will act as your fathers have done before you; you will place this Bank at Philadelphia or New York;  and put it under the control of practical merchants, and men of business, and not in this city, under the control of these nine pensioned directors.

---[Are you imagining that speculators would be better managers than Treasury employees ?  Are you trying to make us believe that the first two Banks were well managed institutions ?  Nicholas Biddle was better manager than William Gouge ?  The reason President Jackson went against the bank is because your fathers were wrong giving the national bank to bankers.]

If this be the seat of Bank power, whenever a panic in the money market may become necessary to accomplish a political object, a panic will be created.  Whenever, in order to effect any purpose, it may become necessary to convince us, that we are the most miserable and oppressed people upon the face of the earth, these nine directors will be at hand to turn the screw to the proper point of agony.  On the other hand, when the President may desire to satisfy the people, before an election, of the benevolence and wisdom of his Administration —a case which may ere long occur;  the screws will then be removed from the patient — paper money will then be issued in floods — a fictitious prosperity will pervade the whole land, and from the groves of the Capitol the exclamation will spread over the Union:  "Lo! how, prosperous and happy our Government makes us."  I think, then, I have established the position that this will be a Government Bank to all intents and purposes, in regard to the controlling influence which the Executive will exercise over its directors.

What strange mutations do we witness in the conduct of public men, even within the brief space of one or two years.  I very well remember that the distinguished Senator from Kentucky delivered a speech here, of two or three hours in length, and it was one of his most able and eloquent efforts, to prove that the Independent Treasury would be no thing more nor less than a Government Bank.  I shall never forget the title page of this speech.  Up on it the heads of his argument, in large letters, were presented in advance to the reader, all uniting in the conclusion that the Independent Treasury would be a Government Bank.  If he had succeeded in demonstrating this fact, it would have been a conclusive argument against the measure, and it ought to have been condemned and denounced by all mankind;  because, under a free Government, the money power and the political power can never be safely united.  The Senator was then hard pushed to find any thing in the bill on which to base his argument.  To what provision of it, think ye, he resorted for this purpose ?  Why, "forsooth," (as the Senator from New Hampshire [Mr. Woodbury] would say,) to that which authorized the Treasurer of the United States to draw drafts upon the depositories of the public money in payment of debts due to individuals.

Although this practice had existed ever since the origin of the Government, and must necessarily continue to exist until its end;  yet this was the provision which the Senator seized upon as the charter of his Government Bank.  He said the Treasurer might abuse his trust, and, under the direction of the Secretary of the Treasury, might prepare such drafts at Washington in the form of bank notes of different denominations, and pay them out to the public creditors: and they would then go into the circulation of the country.  Although this abuse was rendered impossible by the express provisions of the bill itself;  yet the Senator was compelled to adhere to it as the only provision which offered him the slightest pretext for his argument.

But does he not perceive that even if his argument were admitted to be correct this would have been a Government Bank merely for the purpose of affording a circulation: and yet strange as it may seem, the Senator himself is now the great advocate of a Government Bank, not only of circulation, but of discount and deposite, and of every other attribute which can connect it with the Executive power.  It is even declared by the bill that the public money in its "vaults shall be taken and deemed to be in the Treasury of the United States." The mere name had terror for him two years ago, which the thing itself, in all its odious deformity, now fails to inspire.

According to my definition of a Government Bank, I proceed in the second place, to ,:how that the stock of this Bank will be chiefly owned by the Government, and that its surplus profits, beyond a limited dividend to private stockholders, will all belong to the Government.  The banks of England and of France, to which we have been referred, are exclusively the property of private stockholders.  These monarchical Governments do not hold a dollar's worth of stock in their own banks.  They leave the management and control of them to the private stockholders.  Not so with our Republican Government.  We are unwilling to confide this trust to the people who may desire to invest their money in this stock;  and, therefore, according to the terms of the charter, the Government must subscribe ten millions of dollars, or one third of the capital.  The Senator from Kentucky fearing, and justly fearing, that the whole of the remaining twenty millions might not all be taken by individuals, has inserted a provision in the charter that "if the deficiency do not exceed one third," "the residue shall be subscribed for by the Secretary of the Treasury, on behalf of the United States."  This residue may, therefore, amount to $6,666,666.  In all human probability, as I shall show hereafter, the Government will not only own the one third, but more than the one half of the whole capital of the Bank.

But how shall we obtain the money to make the investment ?  At this age of the world we are actually to go in debt to buy Bank stock !  We are to borrow sixteen millions and an half of dollars, and the greater part of it from Europe, not redeemable until after fifteen years;  we are to create this debt, and fasten it as a lien on the trade and industry of the people of this country, to buy Bank stock !  Excellent investment !  Most wise financiering !  I do not believe that the Senator from Kentucky will ever invest his own money, much less borrow money to invest in the stock of this Bank.  I would be very sorry, for his sake, if he should do either the one or the other.

When Gen. Jackson's administration had by its wise economy discharged the last dollar of our national debt, there was a general jubilee throughout the country.  Every American citizen, no matter how humble might have been his condition, felt more proud of his native land.  And why ?  Because it was free from debt, and in this respect presented a striking contrast with all other Governments on the face of the earth.  Now this proud, elevated and ennobling distinction is to be abandoned, and that forever, for the sake of buying bank stock ! It would be bad enough in all conscience to make this purchase if we had the money in the Treasury to pay for it;  but to run in debt sixteen millions and a half for such a purpose does appear to me to be the most supremely ridiculous policy which was ever pursued by any people.

This is financiering worthy of the head of the Treasury Department whose annual report no Senator has yet ever attempted to justify except the gallant and able Senator from Maine, [Mr. Evans].  In this attempt he stood alone unaided by any of his political friends.  [Mr. Benton.  And was exhausted from the effort.]  No sir, [continued Mr. Buchanan] he is not exhausted;  but will again, I trust, undertake to defend the report.  His abilities will be severely taxed for this purpose when the twelve million loan bill shall reach us from the other House.

Yes, sir, we shall be compelled to take, not only ten, but sixteen millions and a half of this stock.  I admit it is possible that men may be found to subscribe the remaining thirteen millions and a half, and become the partners of the United States to that amount;  but if they should, they will not be the strong and prudent capitalists of the country, but speculators and individuals who want to borrow and not to lend, and who will enter the concern for the purpose of enriching themselves, by obtaining the use of the people's money deposited with the Bank.

Why, sir, bank stock has gone down every where.  The age of safe or profitable investment in such stock has passed away.  The days when banks were managed for the benefit of their stockholders are with the years beyond the flood.  The dividends are now small, when any are made.  And why ?  Because the stockholders are plundered by the directors and officers of the Bank, and their money is squandered upon speculators and favorites.  No prudent capitalist now buys bank stock;  and above all, he will keep clear of stock in this great political machine which we are about to create.

---[You know very well how much money Biddle spent in Pennsylvania and federally to buy congressmen and senators.  Why would he do that if a national bank is such a loosing proposition ?]

We are to charter this new Bank without receiving any bonus.  The late Bank gave us a million and a half of dollars for the privileges conferred by its twenty years' charter.  This was a cheap purchase on the part of the Bank.  One and a half millions was a small bonus, whether we consider the value of the privileges which the people surrendered, or the advantages which the charter conferred upon those, I do not, of course, mean the stockholders, for whose benefit the Bank was conducted.  This sum would now go far in erecting fortifications, and placing our country in a proper attitude of defence.  But the committee have determined not to accept any bonus from the new Bank;  and the Senator from Kentucky has given as the reasons for this determination.  And in the first place, he says, that bonus sounds like another word beginning with a B, meaning bribery, I suppose, and therefore because the words bonus and bribery begin with the same letter of the alphabet, the people are to be deprived of one and a half millions of dollars.  This fancy of the Senator will cost them dear.

But the Senator gives us another reason for demanding no bonus.  He says we shall borrow the money to buy our Bank stock at five per cent.;  whilst the dividend we shall receive upon it will be seven per cent.  Here, then, is a difference in our favor of two per cent. and this will be bonus enough.

The first Bank of the United States went into operation with great advantages.  There were then but three banks in existence throughout the Union.  Although it did interfere in the politics of the country, it was governed by prudent and wise men, who had a view to the interest of the stockholders.  The Senator from Kentucky says that this Bank divided, on an average, more than eight per cent during the whole period of its charter.  Although such dividends were made, yet the real profits received by the stockholders on their investment but little exceeded seven per cent.  This reduction was occasioned by the loss of interest sustained in winding up the concern.  I have the documents before me to establish this fact.  I shall not read them;  but will most cheerfully submit them to the examination of any Senator.

But I marvel, sir, whilst the Senator from Kentucky told us what the first Bank of the United States divided, that he had not given us some information in regard to the dividends of the second or late Bank.  I shall supply this deficiency.  This Bank, during the period of its existence under the charter from Congress, was, in the opinion of the Senator, the beau ideal of a National Bank.  Wisdom and prudence presided in its counsels, and it was managed to perfection.  It furnished the best currency which the world ever saw, and, in the opinion of Senators on this side of the House, was a great blessing to the whole people of the Union.

What did it divide ?  I answer, on on average, but a very small fraction over five per cent. and one quarter.  I do not speak of the period since it be came a State institution, but confine myself to the time during which it was a National Bank.  I have also the documents before me to verify the truth of this statement, and they are subject to the inspection of the Senator from Kentucky.  And I speak not now of the large portion of the capital of this Bank which was squandered whilst it was acting under its charter from Congress.

And yet the people of the United States are to grant exclusive privileges to this new Bank during a period of twenty years without any bonus, on account of the two per cent. which we are to receive in Bank dividends above the the five per cent. interest which we must pay to foreign and domestic capitalists, for the money which we shall borrow to enable us to make this very wise investment.

---[So, all these behind the scene bankers spend money and effort, corrupt politicians, to set up a money-losing enterprise !!!  Are you out of your mind ?  The whole whig crew went through all this trouble to charter a bank which returns less on the investment then vacant land in future Utah ? ]

Mr. CLAY.  Will the Senator allow me one moment ?  What I said was that I disliked a bonus: but that we got bonus or compensation in the excess of the dividend beyond the seven per cent. which we were to put into the Treasury of the United States.  I never said that the difference between the five and the seven per cent. was to be the bonus;  but I urged this to prove that it was no bad bargain on the part of the Government, and in regard to the bonus, that we got that in payment of it which was beyond the dividend of seven per cent.

Mr. Buchanan resumed.  I should be sorry to misunderstand the Senator;  and even from his own explanation, I have misunderstood him in terms rather than in substance.  In that portion of his argument relating to a bonus he spoke of the profit which we should derive from borrowing money at five per cent. and receiving dividends at the rate of seven per cent.  It now seems that, the equivalent for a bonus is to be, not this difference of two per cent. but the surplus profits beyond a dividend of seven per cent. which the Bank is to pay into the Treasury.  This is even a still more forlorn hope for a bonus than I had imagined.  The poor girl in the fable, with the basket of eggs upon her head, never, in my judgment, made a more extravagant calculation.

I shall arrive at the point which relates to these surplus profits presently;  but will in the mean time proceed with my argument.  Before I leave this branch of the subject, however, let me ask the Senator, even if this new bank should be conducted with the same ability as that of the old, which doubtless, in his opinion, would be a difficult task, what becomes of the two per cent. fund on which he calculates ?  It is gone —gone: and the surplus beyond it, which is to be his bonus, is in a still more desperate condition.

The Senator informs us that this bank stock will be readily taken;  and why ?  He says there is a great deal of unemployed capital in the country which is now seeking a safe and profitable investment;  and this is doubtless the fact.  But why has this capital remained unemployed ?  It is solely on account of this special session of Congress.  Had business been permitted to flow in its regular channels;  had the agitation of a Bank of the United States been suspended;  and had the country been blest with a short season of repose, capitalists would ere this have invested their money in such a manner as to benefit themselves and promote the prosperity of the whole people.  It is this eternal political agitation — this never-ceasing party struggle to which the called session has imparted new vigor — that has locked up capital everywhere and has prevented it from being usefully and profitably employed.  Men of business can now make no calculations in advance.  Every thing in the future is shrouded in uncertainty and gloom.

But will the real capital of the country seek an investment in this Bank ?  No, sir, never.  I will tell you the investment which it will seek.  The Senator, if he had intended to force this unemployed capital into the Bank, ought not to have created a Government loan to come in competition with his Bank stock.  This five per cent, loan of sixteen millions and a half, will be preferred by capitalists.  He himself has thus furnished a much better and infinitely more secure investment than the stock of his Fiscal Bank.  If, in addition to this loan, and for the purpose of carrying out the farce that the late Administration has left the country in debt sixteen millions of dollars, we should borrow twelve millions more in order to pay this imaginary debt, the whole would then amount to nearly twenty-nine millions of dollars.  This sum will be more than sufficient to absorb all the dormant capital in the country;  and it will be the very best and safest investment which any man can make.

I declare most solemnly that I would rather be the owner of one hundred thousand dollars of this United States five per cent. loan, than to hold two hundred thousand dollars of stock in the Bank if I were obliged to keep it for fifteen years.  I should not hesitate a single moment in making the choice.  I know the stock will become a subject of gambling speculation, and that it may be raised above par in the market;  but in the end it will probably sink as low as the stock of the late Bank has already done, to the destruction of the credulous and unsuspecting.

Whilst speculators may enrich themselves by its purchase and sale, at the last the Bank will fall, as the late Bank has already fallen, and as every Bank must fall which abandons its own proper business for the purpose of engaging in the politics of the country.  This Bank, from the necessity imposed upon it by the law of its existence, must be a political Bank from the very beginning.

The Senator has presented us with a list of restrictions in the charter of this Bank which he thinks will work wonders in restraining it within proper limits.  Restrictions ! you might as well attempt "to tether flame with flaxen brand," as to bind a Bank of the United States by paper restrictions.  To what restrictions did the late Bank ever submit from its origin until its end, when any strong interest impelled it to violate them ?  I shall not now trouble the Senate with a list of such violations of its charter.  The truth is, that the directors of such a Bank well know, that after it has got fairly into operation, its sudden destruction would inflict so many evils upon the country, that they will always calculate upon impunity for their misconduct.  I should, therefore, esteem the restrictions imposed upon this Bank as of but little importance, even if they were wise and salutary in themselves.  There is but one of them, however, of the least value, even if they should be regarded by the Bank, and that has been derived from what the Senator would call the odious Sub-Treasury law.  Under that law, for the first time in our history, public defaulters were subjected to criminal punishment.  Their offence was declared to be a felony, and they were punishable by fine and imprisonment.  I declare that I can see no restriction in the bill, calculated to have the slightest practical or beneficial effect in favor either of the Government or the public, except the a application of this penal principle, borrowed from the Independent Treasury law, to the officers of the Bank.  I admit that this is very good so far as it goes, and therefore;  thus far, I recall the declaration which I have made, that this bill does not contain a single practical restriction.

As to the limitation of the dividends to seven per cent. per annum;  I think I have conclusively shown from the experience of the two Banks which have already existed, that they will never reach this amount.  The last Bank divided but little more than five per cent.  And a quarter, and the first Bank, with all its peculiar advantages, which no Bank at the present day can enjoy, divided in fact but a small fraction over seven and a quarter per cent.

[Mr. Clay.  Eight per cent.]

Mr. Buchanan.  I have already admitted that the dividends declared, during the twenty years which the old Bank existed, amounted on an average to eight per cent.;  but I have shown that it occupied more than thirteen years in winding up, and after deducting the interest which the stockholders lost upon their capital during this period, their average profits were reduced to a very small fraction more than seven and a quarter per cent.  I repeat that the document from which I extract this information is before me for the use of the Senator.

Now whilst it is my belief that the Bank never can and never will divide any thing like seven per cent. on an average, and that, therefore, this will be no restriction, yet if I should even prove to be mistaken, I would not consider this restriction as any real limitation upon its business.  If the Senator, by his bill, had confined the business of the Bank in such a manner that it could not possibly make greater or much greater profits than seven per cent. this might have operated as a restriction to that extent.  But merely to restrict its dividends, without any corresponding restriction of its business, will produce little or no practical effect.  It will expand its loans and its issues as far as it can within the limits of its charter, upon the pretence of creating a surplus to be paid into the Treasury of the United States.  But when have banks ever paid such a surplus to any Government ?  This surplus, should any such ever exist, instead of reaching the Treasury, will be a most desirable contingent fund for politicians.  It will be inscribed upon what is technically called the line of suspended debt, in a similar manner with the ten millions of suspended debt due the present Bank of the United States of Pennsylvania.  That list of favored borrowers has never yet seen the light;  neither will any similar list of borrowers from this new Bank, if you shall adopt no other provisions in regard to publicity, except those now contained in the bill.

The Senator from Kentucky authorizes the Bank to contract debts to the amount of twenty-five millions of dollars over and above its deposites, and calls this a restriction.  Nay more, deeming this too severe, he moved to strike out twenty-five, and insert thirty millions;  but wonderful as it may seem, he failed in the motion.

Now, is there any man in the country at all acquainted with the business of banking, who believes this to be any practical restriction.  The late Bank of the United States whose capital was thirty-five millions of dollars, even with all its extravagance, never had a circulation at any one time, of more than twenty millions;  and it rose to that amount but for a single year.  Its average circulation during the whole period of its existence, amounted to about eleven or between eleven and twelve millions.  And yet Senators talk of confining their new Bank, with a capital of thirty millions, to twenty five millions of circulation, as if this would prove to be a most efficient restriction on its business.  That is, by way of restriction, the new Bank, with a capital five millions less, is permitted to issue paper to more than double the average amount of the circulation of the old Bank.

In this statement, I take it for granted that the amount of debts contracted by the Bank over and above its deposites, will be almost exclusively for bank notes in circulation.  A Bank ought always to be a lender, never a borrower of money.  It was borrowing money abroad, as much as any other cause, which first crippled, and afterwards destroyed the Bank of the United States.  Had the Senator from Kentucky examined carefully the history of this Bank, and investigated the causes of its ruin, he never would have conferred upon his new Bank the very same power to borrow money which existed under the old charter.  I hope this power may yet be stricken out of the present bill.

But again: there is another restriction on this Bank which the Senator deems important.  It is prohibited from loaning more than seventy-five per cent. beyond the amount of its capital, or, in other words, the debts due to it at any one time shall never exceed that amount.  Thus, with a capital of thirty millions, it is permitted to loan fifty-two millions and a half of dollars.  And this is deemed a wise and salutary restriction !  Why, sir, the banking system of the United States, in the aggregate, consisting of more than nine hundred banks, scattered over the country, has scarcely ever, even in the days of its greatest extravagance, made loans to the amount of seventy-five per cent. more than its capital.  In the two extravagant years of 1836 and 1837, the Bank loans a little exceeded this proportion;  but, with that exception, they have greatly fallen short of it, ever since the year 1830.

Thus it appears that the restriction which the Senator from Kentucky would impose on the loans of his Bank, will indulge it to a point which has scarcely ever been attained by our banking system as a whole, even in the days of the wildest speculation.  To find such an example, we must look to the two worst years of extravagant Bank expansion which we have witnessed in our time.  And yet this new Bank is to be the prudent and powerful regulator which will confine the business of our whole State banking system within proper limits.

You will thus perceive that this Bank, within the limits of its charter, may realize ten and one-half per cent. upon its capital merely by discounting notes.  For example: it may loan fifty-two millions and one-half at six per cent, which is equal to ten and a half per cent. on thirty millions, the amount of its capital.  But this is not all.  It will deal extensively in foreign and domestic bills of exchange, on which the premium is not, and probably cannot, be fixed by law.  On the money invested in this portion of its business it will receive a much greater interest than six per cent.  It would not, therefore, be too much to say that, within the restrictions of its charter, it may make twelve instead of seven per cent, per annum on the amount of its capital.  But will this surplus ever reach the Treasury ?  No, sir, it never will.  On the contrary, it will scarcely be sufficient to cover the losses which must be sustained by this political Bank in loaning money to trading politicians and speculators, without estimating the amount of plunder which the Bank officers may appropriate to themselves.  This surplus will never reach the Treasury, but will become the fund for these very purposes;  and it will probably prove by no means sufficient.  If, therefore, you intend to impose any practical restriction, which will be useful to the public, by limiting the dividends to seven per cent. you ought to limit the business of the Bank in something like the same proportion.  Considering the losses to which it must be exposed, I venture to predict that, let it expand as much as it can, and yet it will never divide six per cent. on an average.

But there is still another restriction on which I desire to say a few words.  I mean that which prohibits the Bank from making new discounts or loans, "when the notes in circulation exceed three times the amount of specie in its vaults."

The chief consideration which could induce any wise Government to grant banking privileges, is that the public may enjoy a paper circulation at all times convertible into specie.  This is the only direct interest which a vast majority of the people have in banks.  That restriction, then, which would first strike every mind as necessary to secure this advantage, is that each bank should be compelled by its charter always to keep such a fair proportion of gold and silver in its vaults in proportion to its immediate liabilities, or in other words, to its circulation and deposites, as experience has shown to be necessary to enable it to continue the payment of specie in the worst of limes.  But this is the very restriction to which no bank will submit if it can possibly avoid it.  They will agree to all other restrictions in preference, and will continue to resist this to the very last.  And yet this is the touchstone which separates the alloy from the pure gold.  Without a certain, reasonable and fixed proportion of gold and silver in the vaults of a bank compared with its circulation and, deposites, the public have no security against the suspension of specie payments.

A bank may be perfectly sound and able eventually to pay all its debts;  and yet not have one dollar of gold and silver in its vaults.  Its eventual ability to meet its engagements depends upon the eventual solvency of those who have borrowed its money.  But the ability of a Bank at all times to redeem its notes and deposites in specie, depends upon the amount of specie at all times in its vaults.  The experience of banks in this and in all other countries, has demonstrated the necessity of such a restriction.  Has the Senator from Kentucky acted upon this principle in preparing his bill ?  The bill requires the Bank to keep on hand one dollar in specie for three of its circulation, leaving out the deposites altogether;  and fearing lest even this might prove to be too severe a restriction, he has actually moved to strike it out.  Now, sir, I would not give a button for that restriction.

The circulation of the Bank of the United States will be nothing when compared with its deposits.  The great commercial business of the country is transacted almost exclusively without the use of Bank notes.  When a merchant borrows one hundred thousand dollars from a bank in the city of New York, he has it placed to his credit on the books of the bank.  He pays his debts with this bank credit, without the use of any bank notes whatever, by giving checks to each of his creditors.  These bank checks, founded upon bank deposites, and not bank notes, constitute, in a great degree, the commercial circulation of the country.  Why then did the Senator from Kentucky, in preparing his bill, require the Bank to keep no proportion of specie whatever to meet these deposites ?  They are immediate liabilities of the Bank as much as bank notes;  and payment of them in gold and silver may be demanded in large masses, equal to two, three, or four times the whole amount of the circulation.  And yet the Senator, by his bill, has excluded these deposites altogether;  and he now desires to get clear even of the restriction requiring the Bank to keep one dollar in specie for three of its circulation.

According to the testimony of Mr. Horsley Palmer, the late Governor of the Bank of England, before a committee of the House of Commons, "The average proportion of the coin and bullion, which the Bank thinks it prudent to keep on hand, is at the rate of a third of the total amount of all her liabilities, including deposites as well as issues;"  and we ought to require our new Bank always to keep on hand, at the very least, this proportion of specie, if we intend that it shall always remain a specie paying Bank.

Another restriction has been imposed upon the parent Bank in this city.  This Bank is to be prohibited from discounting altogether;  because, says the Senator, if it were permitted to make loans here, it would afford too great a facility to members of Congress and officers of the Government in borrowing money.  If this were the object, why did not the bill declare, in express terms, that members of Congress and officers of the Government should never receive a loan from the Bank, or any of its branches.  This would have been the only preventive capable of producing the slightest effect.  Does any person really suppose that the distance between this city and Philadelphia will prevent any member of Congress from making such a loan ?  But there will be a still more convenient branch at Baltimore, within two hours of us, to which we can resort.

My life upon the issue, that if ever the secrets of the charnel house at Philadelphia should meet the light of day, it will be found that thousands and hundreds of thousands, and even millions of money of the Bank have found there way into the pockets of your public men and members of Congress, notwithstanding the distance.  I have received information on the subject, which I do not feel myself at liberty to disclose;  but what the present President of the United States has published in his report, in regard to the indebtedness of members of Congress to the late Bank, is known to the world.  And here permit me to say that I was rejoiced to learn from such high authority as the Senator from Virginia [Mr. Rives] that if there was any one man in the country more committed against a Bank of the United States, than any other man, it was our present President.  This declaration has inspired me with hope in the future.  No, sir, instead of the distance to Philadelphia or Baltimore presenting any obstacle in the way of members of Congress and officers of the Government, the present bill will greatly facilitate their accommodation by bringing home to this city the nine all-powerful directors of the parent bank.  Private friendship and political sympathy between our public men and these directors will produce many such epistles as the following to the directors of the branches in Baltimore and Philadelphia: "Please to make a loan of fifty or a hundred thousand dollars to the bearer."

The romantic walks in the groves of the Capitol, with bank directors, will be admirably calculated to produce this effect;  and in a few years we may find as long a list of suspended debts of politicians in the new Bank, as already exists in the old.  So much for this restriction.

I had intended to make some remarks against granting to this bank the power of dealing in foreign exchange.  The exercise of this power contributed much to the ruin of the late Bank.  But I forbear for the present.  The Secretary of the Treasury, in his project, deprives the Bank of this power;  and the removal of this restriction, is, in my opinion, he only particular in which that project has not been improved by the Committee on the Currency.

Am I then right, Mr. President, in declaring, and I appeal to you as a gentleman well acquainted with banking, [Mr. Bayard of Delaware then occupied the chair,] that this bill throughout contains not a single efficient practical restriction upon the business of the bank, or one which would be regarded as such by any man who understands the subject ?  No surplus will ever reach the Treasury —never.

I need not dwell upon the remaining particular constituting this a Government Bank: which is that it will receive upon deposite all the public money of the people of the United States, to be loaned out at pleasure for its benefit, without any restriction whatever on this privilege.

Then, sir, this is the real Government Bank the directors controlled by the Government;  the greater portion of the stock held by the Government;  the surplus profits, if any, given to the Government;  and the most profitable business of the Bank founded upon the use of the money of the Government.  And why should such a charter have been offered to congress by the Treasury Department ?  I shall not say that it was concocted there for the express purpose of creating a mere engine or instrument of political power;  but if Talleyrand himself had been as great a financier, as he was a diplomatist, he could not have devised a charter more completely adapted to effect this purpose than the bill now before us presents.  The influence of this machine, located at Washington, under the eye of the Government, will be felt every where throughout the Union.

I may be asked, as I have spoken so strongly against this city as the location of the Bank, where I should desire to have it established.  I answer at once; either in Philadelphia or New York; and I should prefer Philadelphia.

It is very cruel for gentlemen to sneer at Philadelphia in its misfortunes.  I honestly believe that much of the extravagance and folly of the late President of the Bank, in conducting its affairs, may be fairly set down to the incense offered to his vanity in this very chamber.  What was said of him by Senators here was sufficient to turn the head of almost any man.  He was induced to believe that he was the Atlas on whose shoulders the financial Government of the world rested.  Such was his ability and power, in the opinion of a distinguished Senator, that had he been appointed Secretary of the Treasury in 1837, whilst we were suffering in common with all civilized nations, from the revulsion in business which was felt over the whole globe, he would have relieved us from our embarrassments, and produced a revival of business and a resumption of specie payments within the short space of sixty days.

I never flattered him in his prosperity, and I shall not attack him in his adversity.  I think he is as good in every particular as the two or three directors who have been holding him up to public execration.  I believe that by far the greater part, if not all, that they have said of each other, is true.  I give equal credit to all their statements, and, in my estimation, these gentlemen all deserve to be placed on the same level.  And let me say, that there are men in Philadelphia now passing for saints, who were directors in this Bank some time before its explosion; — who knew its condition perfectly, and yet not only concealed their knowledge from the world, but sold out their stock at high prices, which were maintained upon the faith reposed by the public in their integrity and judgment; — such men, in my opinion, are just as bad as the worst of those who continued to be directors until the end.  Their consciences will never be disturbed by the tears and groans of the widows and orphans whom they have ruined.

But I say Philadelphia or New York is the proper place for the Bank;  and it is very hard that Philadelphia should be denounced here in such terms.  Why, sir, the Almighty would have spared Sodom if five righteous men could have been found there:  and shall man be more terrible in his judgments than infinite purity ?  I believe, if from a knowledge of the character of the people, that there is no city on the seaboard of the United States which contains a greater number of intelligent, respectable, incorruptible, and faithful merchants, fit in every respect to be the directors of such an institution, than the city of Philadelphia.  No, sir;  I shall never sit silent under sneers and attacks against that city, although it has ever been hostile to me since I entered into public life.  But if you will not establish the Bank there, then let it be located in New York.

The idea of establishing a National Bank in the city of Washington, with a view of regulating the currency and business of the country, seems to be truly absurd.  The location of such a Bank ought to be in a commercial city, where its directors would have the opportunity of observing carefully the state both of our foreign and domestic trade.  After long experience, sound practical men in England have arrived at the conclusion that the issues of a National Bank ought to be regulated by the state of the foreign exchanges.  When the directors find that these exchanges either are or probably soon will be against the country, in consequence of a redundancy in the circulating medium, then the issues of bank paper ought to be contracted to such a degree as to arrest or correct the evil, and to prevent the exportation of specie.  This important duty can alone be safely devolved upon men of ability and skill who are practically acquainted with our foreign trade, who are able to anticipate its fluctuations, and who are placed on a suitable theatre of observation, such as Philadelphia or New York.

Your nine salaried directors in this city will be politicians and not merchants, bankers, or other practical men;  and even if they were, this is not a spot from whence they could watch the current of foreign trade, or where they could obtain the necessary information.  In regard to the cliques of speculators in Wall street and Chestnut street, of which we have heard, bad as they are, I think that a clique of trading politicians in Washington city would make still worse directors of a National Bank.

[Mr. Benton.  We will have both.]

I now come to speak very briefly of some of the advantages which the committee believe that this Bank will yield to the people of the country.  And first, they say, "it will give the people a sound currency of uniform value throughout the Union."  If by this the Senator merely means that a man can put its paper in his pocket in Georgia, and use it anywhere on the road in travelling to Maine, I have no doubt that such will be the fact.  And why ?  Because the Government of the United States, by agreeing everywhere to accept the Bank paper in payment of its dues, gives it every where circulation and credit.  They could thus give to painted pasteboard the same currency.  It is not the credit of the Bank, but that of the Government, which will produce this effect.  The drafts of the Treasury Bank, which the Senator formerly so much dreaded, would have answered the same purpose still better, and would have been of much greater intrinsic value, because they would have represented gold and silver, dollar for dollar.

Be sides, the bank which the Senator's fancy created out of the Independent Treasury law, would have been only a bank of issue, and not one of discount and deposite also, such as he now advocates.

But the committee further allege, that this Bank "will reduce domestic exchanges from the enormous premiums and discounts now frequently paid, to the moderate standard growing out of the mere cost and insurance on the risk of transporting specie from one to another part of the Union."

This argument has been everywhere urged, and often successfully, in favor of creating a Bank of the United States;  and yet to use the word of the Senator from Missouri, [Mr. Benton] it is the most "bamboozling" argument that ever was resorted to.  On 'Change, in Philadelphia or New York, there is nobody so soft as not to smile at its absurdity.  Why, sir, the rates of exchange between money and money, in the different cities of the Union, are at this very moment just as the Senator desires they should be.  In New Orleans, gold and silver will, at this very day, buy a bill on New York at a premium of from one-half to one per cent.  Who does not perceive that it is the depreciation on suspended bank paper, and not the real difference of exchange, which you see quoted in all the papers and blazoned forth to the world as if intended for the express purpose of imposing on the public ?  In Philadelphia, the notes, for example, of the Bank of Pennsylvania, are worth about three and a half per cent. less than specie;  therefore, at New York the exchange on Philadelphia is quoted at three and a half per cent. discount;  but is it not self-evident that this is the rate of exchange, not between money and money, but between gold and silver in New York, and depreciated bank paper in Philadelphia ?

From the nature of trade, unless under very extraordinary circumstances, the difference of exchange between two places in the same country, can never vary much from the cost of transporting specie from the one to the other.  Some years ago, the bills of the Commonwealth's Bank of Kentucky were at a discount of fifty per cent. below specie: and, doubtless, exchange on Kentucky was then quoted at fifty per cent. below par.  But this was the depreciation of the bank paper, and not the difference in value between money in New York and money at Lexington, which can never be much greater than the expense of transporting it from the one place to the other.

If banks were everywhere in good credit, and were redeeming their notes in specie, then these notes would be equal to gold and silver at the place where they were issued;  and the great apparent inequality in the rates of exchange would immediately disappear.  The quotations would no longer consist of the contrast between the value of specie in New York and depreciated bank paper at home;  but would be the difference between the value of specie and specie at different places.  This inequality in the nominal rates of exchange, would at once disappear, if you could restore specie payments throughout the Union.

But if the banks should all pay specie to-morrow, we have no security whatever that they would not, organized as they are at present, soon again suspend.  There are two restrictions, which, if imposed upon them, would always insure a sound bank note currency to the people of the United States, and prevent future suspensions.  First, if you would render them able at all times to pay specie, you must require that they shall at all times keep on hand at least one dollar of gold and silver for every three dollars of their deposites and circulation combined.  But this alone might not prove sufficient.  They might possess the ability to pay, without the will.  To secure this, you must impose another restriction, which will prove to be an infallible preventive of suspension.  Declare in the charter of each Bank, by a self-executing provision, which nothing can arrest, that the moment it suspends specie payments it shall "die the death."  "In the day that thou eatest thereof thou shalt surely die."

Render it the irreversible, organic law, of each bank's existence, that a suspension of specie payments shall produce its civil death;  and the instinct of self-preservation will then compel it to perform its duties in such a manner as to preserve its life.  Upon this principle, a bankrupt law applied to banks would do more in securing a sound currency for the people of the United States, than twenty National Banks scattered over the whole country could accomplish, even if they were disposed to exert all their power.

---[Twaddle, sir, twaddle;  as the Anti-Bank Democrat quoted —you can never regulate banks, they will regulate you, always !  If we need currency at all — and why is there a need for currency (a substitute for money)? what would happen if only coin circulated ?  And if we need currency, why should that currency be furnished by private bankers ?]

When it was first proposed to apply a bankrupt law to banks, I felt strongly inclined to oppose it.  But I am not one of those who pride themselves in their uniform consistency throughout life.  Live and learn is my maxim.  I trust I am wiser this year than I was the last;  and that, if I live, I shall be wiser next year, or twenty years hence, than I am at present.  The man who prides himself upon never having changed an opinion, proclaims himself to have been infallible from the beginning, and thus announces himself a blockhead.  Any Senator, there fore, has my entire permission to ransack the old journals and prove that I voted many years ago on any subject differently from what I should do at present.  I have changed my opinion in regard to a bankrupt law as applied to banks;  and this because I most solemnly believe that it is the only remedy which can reach the root of the evil and secure to the people, at all times and in all places, a paper currency convertible into gold and silver.

But the committee say that this bank "will powerfully contribute to the resumption of specie payments."  How will it produce such an effect ?  It is not sufficient that a declaration of this kind shall be made ex cathedra in order to command our faith.  Will it be by producing a new and greatly increased demand for specie in order to furnish a capital for the bank.  Ask Mr. Cheves, who is I believe the avowed author of those able numbers which have appeared in the Charleston Mercury, above the signature of "Jay," whether the late Bank of the United States contributed essentially to the resumption of specie payments, when it first went into operation, and he will answer decidedly in the negative.  He ought to know this fact if it existed, because he saved the Bank from ruin at an early period of its career.

The seven millions of gold and silver which the charter requires to be paid by the private stock holders before the Bank can go into operation, must be chiefly drawn from the vaults of specie-paying banks.  In addition to this, the large amount which will be taken by our own citizens of the sixteen millions and a half of the bank stock loan, to say no thing of the twelve million loan, must be principally derived from the same source.  The probability is, that the run which this must occasion on the specie paying banks, will compel them to suspend.  The banks already suspended will hold fast what specie they have got.  Self-preservation will compel them to pursue this course.  In this manner, then, the establishment of the Bank, so far from promoting a resumption of specie payments, will prolong the suspension, and may, in all human probability, render it universal.  If the existing solvent banks should be able to meet the demand for specie which will thus be made upon them, it will be by such a sudden curtailment of their loans and issues as will produce ruin and distress throughout the land.  Never, never, was there a more inauspicious moment than the present for establishing a Bank of the United States;  and I trust that its friends will take this view of the subject into their deliberate consideration, and postpone the question at least until December.

Let the general business of the country be restored;  and then, and not till then, let them begin to think seriously on the subject of establishing a Bank of the United States.

But even if specie payments had been universally restored, and business were again prosperous, I deny that this Bank will ever regulate the States banks in such a manner as to prevent the ruinous expansions and contractions in our currency, which have afflicted the country throughout its history, or secure us against future suspensions.  This Bank would not thus restrain the State Banks if it could: —it could not if it would.  On this point I shall be as brief as possible, having already occupied more of your time than I had intended.

And in the first place, this Bank will feel no disposition whatever to restrain the issues and loans of the local banks within reasonable limits.  And why ?  Because its duty as a regulator of the currency is in direct opposition to the interest of its stockholders.  If you desire to create one power for the purpose of restraining another, you must make them "antagonistical" either in point of interest or of inclination, or of both.  But will you change the nature of these nine directors and make them better than other men, by placing them at the head of a National Bank ?  If you cannot work this miracle, they will then feel the same interest, and the same inclination with the Directors of the State Banks to expand the currency — to accommodate their favorites and friends — to make money plenty, and to increase the profits of the stockholders.

No, sir, no;  in the honest opinion of my soul, so far from making these directors better, you will make them worse than other men.  Stationed here at the Capitol, and under the baneful influence of highly excited political feeling, I believe they will be even less inclined to act as a restraining power than the directors of many other Banks of the country.  Their first impulse will be to promote their own interest, and to accommodate their friends;  as far as possible.  And yet this is the power which you intend to establish for the purpose of controlling the Government of the State banks, and preventing them from being guilty of excess.  They would not do this if they could;  because they will act upon the same universal law which governs all bankers and directors of banks, and impels them to extend their business and increase their profits as far as practicable.

But I say that this Bank could not restrain the State banks, even if it would;  and this want of power has been recently demonstrated in England.  It would be easy for me to maintain this position by arguments, a priori, and to prove that this bank, with a capital of thirty millions, could not control the issues of a thousand State banks whose combined capital is more than ten times that amount;  but, reasoning would be only a waste of time, when this conclusion has been established by well known facts.

In 1836, the Bank of England clearly foresaw the approach of the storm which afterwards spread ruin over that country as well as this.  The foreign exchanges were against England, and specie was exported.  The paper currency had become so expanded, that the prices of all domestic productions were high, and consequently it was the interest of foreigners to sell every thing they could in that country, and buy as little there as possible.  Under these circumstances, the Bank of England determined to put forth all its power, in order to reduce prices and restore the equilibrium of the foreign exchanges.  It accordingly commenced a system of rapid curtailment of its loans and issues in the vain hope that the joint stock banks of the kingdom would be compelled to follow its example.  Much to its astonishment, it found that as it contracted, they expanded;  and at the end of the process there was more paper money in circulation than at its commencement.  So entirely satisfied are well informed men in England that their National Bank, even with a capital of seventy millions of dollars, cannot control these expansions and contractions of the currency, that they now seriously think of confining the issues of paper money to one Bank to be under the control of the Government, and of excluding all the other banks of the kingdom from the enjoyment of this privilege.

And yet, in the face of this well known fact, it is seriously contended here that this Bank of thirty millions will possess the power to control the loans and issues of of the thousand banks scattered over our vast country.  It will do no good in this respect;  but much evil.

During the period of the late Bank's existence, it was the primary and efficient cause of all the very great expansions which afflicted the country.  I shall mention but one of these, though I might refer to those of 1823, 1831, and 1834.  In the years 1816, 1817, and 1818, the first three years after the date of its charter, what was its course ?  It was a mere speculating machine.  It expanded the currency to such an extent and made money so plenty that every thing rose to an enormous price.  In the county where I reside, land commanded from two to four hundred dollars per acre;  and in one instance I know a tract to have been sold for $1,500 per acre.

The expansion of the Bank of the United States encouraged all the country banks to to follow its example, and bank notes became so cheap that it required a large amount of them to purchase any article of value.  The Bank thus literally stimulated the spirit of speculation to such a high degree as almost to produce a general derangement of the public mind.  Such extravagance was never witnessed before.  The revulsion came, as come it always must, and the Bank, to all appearance, was in the last agony.  It was then that Mr. Cheves was called to preside over it.  In order to save it from destruction, he was compelled to reduce its loans and curtail its issues with unexampled rapidity;  and in consequence, the years 1819, 1820, and 1821, were the most disastrous that this country has ever experienced since the Revolutionary war.  There was more individual ruin — more property changed hands by forced sales — during those three years than we have witnessed in a similar period before or since;  and all attributable directly to the influence and example of this great regular of the currency.

In 1821, the price of flour sunk to $3.75 per barrel in Philadelphia;  and as far west as the State of Ohio it scarcely commanded any price.  There is no new thing under the sun, and should this Bank ever get into successful operation, from the very law of its nature, it will follow in the footsteps of its illustrious predecessor.  It will be powerful to do evil, but feeble to produce good.

The last reason which has been given by the Senator from Kentucky why we should establish a Bank of the United States, is that other nations have National Banks, and therefore that we also ought to have such an institution.  Let me say, in the first place, that other nations have no such Bank as the one which we propose to establish.  The Banks of France and England belong to individuals, and no part of the stock of either is held by the Government.  But, under this charter, our Republican Government is to ally its interests with those of the money power, by becoming the proprietor of more than half of the whole capital of this Bank.  Does the Senator suppose that if the Bank of the United States had continued to exist under its charter from Congress until May, 1837, that it would then have weathered the storm ?  Far different would have been its fate.  It would have been the first to fall under the revulsion of that fearful crisis: and for this very reason, that being a National Bank, its connection with England would have been more intimate and direct than that of State banks.  The blow which then prostrated our banking institutions came from that country, and it would have fallen with redoubled force on a National Bank as it did on the Pennsylvania Bank of the United States, which then, occupied a similar position.

Sir, other nations have emperors and kings, and titles of nobility, and established churches, as well as national banks;  but is that any reason why the people of the United States should abandon their Republican principles, and imitate these foreign forms of Government ?  Although the Senator from Kentucky may not, and I believe does not desire such a change, yet he may virtually accomplish it sooner than he anticipates.  If he can create this great National Bank, and can ally it with the Government in Washington city on terms of the closest intimacy;  if he can thus concentrate the money power here, and render its interest identical with that of the political power, he may succeed in establishing for this country not a monarchy, but the very worst form of Government with which mankind has ever been cursed.  A hereditary aristocracy has acquired this infamous pre-eminence;  but the Government of a moneyed aristocracy would, if possible, be still worse.  From interest and from habit, a landed aristocracy has always cherished some feelings of kindness for the people;  but an upstart moneyed aristocracy has no heart to feel for them, no desire to promote their welfare.  It looks upon mankind as mere laboring machines for its own benefit.  It never indulges in those kindly and Christian sympathies which make us feel that all men are alike created in the image of their Maker, and are brethren.  This is the kind of Government which may be established by an intimate union of the political with the money power.  We may approach nearer to the Governments of the old world, by establishing this Bank, than the Senator or any of his friends imagine.  If this should be the case, corruption will insinuate itself into the sinews and nerves and very vitals of the body politic.  The people would still attend the elections and be flattered with the idea that they still enjoyed all their liberties, whilst a secret, controlling, all-pervading influence, would direct their conduct.  The corpse of a free Government would then only remain, whilst the animating spirit had fled forever.

But I do not permit myself to indulge in these gloomy forebodings.  I am not afraid that this Bank will ever be established;  and if it even should, the people of this country will pursue it with a steady vigilance, which will never tire until they accomplish its destruction.


Senator Morehead replies to Buchanan
—a short history of central bank legislations;  a spanking of Calhoun


The Bank Bill that passed both Houses of Congress and received the Presidential Veto.

An Act
To incorporate the subscribers to the Fiscal Bank of the United States.


Be it enacted by the Senate and House of Representatives of the United States of America, in Congress assembled, That a Fiscal Bank of the United States shall be established in the District of Columbia, with a capital of thirty millions of dollars, divided into three hundred thousand shares, of one hundred dollars each share.  One hundred thousand shares shall be subscribed for by the United States, and the residue of the said capital may be subscribed and paid for by individuals, companies, corporations, or States, the said individuals being citizens of the United States, and the said companies and corporations being of the several States, or of these United States, or Territories thereof, in the manner hereinafter specified.  But Congress reserves to itself the power of augmenting the capital of the said bank, at any time after the first of January, 1851, by authorizing the addition thereto of a sum not exceeding twenty millions of dollars, divided into shares as aforesaid, which may be subscribed for, at not less than their par value, by the United States, or by any State, corporation, company, or individuals, in the manner directed by law:  Provided, That the United States shall not subscribe for more than one-third of the said additional capital.

Sec. 2.  And be it further enacted, That subscriptions for the sum of twenty millions of dollars, towards constituting the capital of the said bank, shall be opened on the first Monday of September next, at the following places, that is to say:
at Washington, in the District of Columbia;
at Portland, in the State of Maine;
at Portsmouth, in the State of New Hampshire;
at Boston, in the State of Massachusetts;
at Providence, in the State of Rhode Island;
at Hartford, in the State of Connecticut;
at Burlington, in the State of Vermont;
at New York, in the State of New York;
at New Brunswick, in the State of New Jersey;
at Philadelphia, in the State of Pennsylvania;
at Wilmington, in the State of Delaware;
at Baltimore, in the State of Maryland;
at Richmond, in the State of Virginia;
at Lexington, in the State of Kentucky;
at Cincinnati, in the State of Ohio;
at Raleigh, in the State of North Carolina;
at Nashville, in the State of Tennessee;
at Charleston, in the State of South Carolina;
at Savannah, in the State of Georgia;
at New Orleans, in the state of Louisiana;
at Indianapolis, in the State of Indiana;
at Mobile, in the State of Alabama;
at St Louis, in the State or Missouri;
at Springfield, in the State of Illinois;
at Detroit, in the State of Michigan;
at Natchez, in the State of Mississippi;
and at Little Rock, in the State of Arkansas.  And the said subscription shall be opened under the superintendence of five commissioners at Washington city, and of three commissioners at each of the other places aforesaid, to be appointed by the Secretary of the Treasury, who is hereby authorized to make such appointments, and shall continue open every day, from the time of opening the same, between the hours of ten o'clock in the forenoon and four o'clock in the afternoon, for the term of twenty days, exclusive of Sundays, when the same shall be closed;  and immediately thereafter, the commissioners, or any two of them, at the respective places aforesaid, shall cause two transcripts or copies of such subscriptions to be made, one of which they shall send to the Secretary of the Treasury, one they shall retain, and the original they shall transmit, within seven days from the closing of the subscriptions as aforesaid, to the commissioners at Washington city.  And on the receipt of the said, original subscriptions, or either of the said copies thereof, if the original be lost, mislaid, or detained, the commissioners at Washington aforesaid, or a majority of them, shall immediately thereafter convene, and proceed to take an account of the said subscriptions;  and if more then the amount of twenty millions of dollars shall have been subscribed, then the said last mentioned commissioners shall deduct the amount of such excess from the largest subscriptions, in such manner as that no subscription shall be reduced in amount while any one remains larger:  Provided, That if the subscription taken at either of the places aforesaid, shall not exceed two thousand shares, there shall be no reduction of such subscriptions, nor shall, in any case, the subscriptions taken at either of the places aforesaid, be reduced below that amount.  And, in case the aggregate amount of the said subscriptions shall exceed twenty millions of dollars, the said last mentioned commissioners, after having apportioned the same, as aforesaid, shall cause lists of the said apportioned subscriptions to be made out, including in each list the appointed subscription for the place where the original subscription was made, one of which lists they shall transmit to the commissioners, or one of them, under whose superintendence such subscriptions were originally made, that the subscribers may thereby ascertain the number of shares to them respectively apportioned as aforesaid;  and in case the aggregate amount of the said subscriptions made during the period aforesaid, at all places aforesaid, shall not amount to twenty millions of dollars, the subscriptions to complete the said sum shall be and remain open at Washington city, aforesaid, under the superintendence of the commissioners appointed for that place;  and the subscriptions may be then made by any individual, company, corporation, or State, for any number of shares, not exceeding in the whole the amount required to complete the said sum of twenty millions of dollars.

Sec. 3.  And be it further enacted, That it shall be lawful for any individual, company, corporation, or State, when the subscriptions shall be opened as heretofore directed, to subscribe for any number of shares of the capital of the said bank, not exceeding two thousand five hundred shares;  and that the sums so subscribed shall be payable and paid in bullion, in gold or silver coin of the United States, or in foreign coins, made and declared current in the United States, by the act of Congress of the 25th of June, 1834, entitled "An act regulating the value of certain foreign silver coins in the United States," and by the act of the 28th of June, 1834, entitled "An act regulating the value of certain gold coins within the United States," at the following rates, to wit:
the sovereign of Great Britain at ninety-four cents and sixty-two hundredths of a cent for each pennyweight;
the pieces of forty and twenty francs of France, at ninety-two cents and ninety-two hundredths of a cent for each pennyweight;
the doubloon and parts of Spain, at eighty-nine cents, and fifty one hundredths of a cent for each pennyweight;
the doubloon and parts of Mexico, at eighty-nine cents and fifty one hundredths of a cent for each pennyweight;
the doubloon and parts of Peru, at eighty-nine cents and seventy-one hundredths of a cent for each pennyweight;
the doubloon and parts of Chili, at eighty-nine cents and seventy-one hundredths of a cent for each pennyweight;
the doubloons of Bogota, Columbia, at eighty-nine cents and ninety-two hundredths of a cent for each pennyweight;
the doubloons of Popayan, Columbia, at eighty-eight cents and sixty-eight hundredths of a cent for each pennyweight;
the doubloons of 1837 and 1838 of New Grenada, at ninety cents and two hundredths of a cent for each pennyweight;
the doubloons of Bolivia, at eighty-nine cents and ninety-two hundredths of a cent for each pennyweight;
the doubloons of Central America, at eighty-five cents and seventy-nine hundredths of a cent for each pennyweight;
the doubloons of La Plata, at eighty-four cents and twenty-four hundredths of a cent for each pennyweight;
the johannes and half of Portugal, at ninety four cents and forty-six hundredths of a cent for each pennyweight;
the crown (of 5,000 reis) and a half since 1838, of Portugal, at ninety-four cents and forty-six hundredths of a cent for each pennyweight;
the price (of 5,400 reis) of 1838 of Brazil, at ninety-four cents and forty-six hundredths of a cent for each pennyweight;
and in foreign silver coins at the value fixed upon them severally in the act first above named, or in Treasury notes of the United States, or in certificates of stock issued under the act entitled "An act authorizing a loan not exceeding the sum of twelve millions of dollars," approved July 21st, 1841.  And the payments made in treasury notes or in the said certificates of stock shall be paid and received at the par value thereof, including all interest which shall have accrued thereon on the day of such payment.  And the payments of the said subscriptions shall be made and completed by the subscribers respectfully at the time and in the manner following, that is to say:  at the time of subscribing there shall be paid ten dollars on each share in bullion, in gold or silver coin, in the Treasury notes of the United States, or in the said certificates of stock, and twenty-five dollars more in bullion, in coin, Treasury notes, or certificates of stock, as aforesaid, at the expiration of three calendar months from the first Monday in September, 1841;  and there shall be paid the further sum of twenty-five dollars on each share in bullion, in gold or silver coin, Treasury notes, or certificates of stock, as aforesaid, in eight calendar months from the first Monday in September, 1841;  and forty dollars more in bullion, in coin, Treasury notes, or certificates of stock, as aforesaid, at the expiration of twelve calendar months from the said first Monday.

Sec. 4.  And be it further enacted, That if, in consequence of the apportionment of the shares in the capital of the said bank among the subscribers, in the case and in the manner hereinbefore provided, any subscriber shall have delivered to the commissioners, at the time of subscribing, a greater amount of bullion, or gold or silver coin, Treasury notes, or certificates of stock than shall be necessary to complete the payments for the share or shares of such subscribers, apportioned as aforesaid, the commissioners shall only retain so much of the said bullion, or gold or silver coin, Treasury notes, or certificates of stock, as shall be necessary to complete such payments;  and shall forthwith, return the surplus thereof, on application for the same, to the subscribers lawfully entitled thereto.  And the commissioners, respectively, shall deposit the bullion, or gold and silver coin, Treasury notes, and certificates of stock, by them respectively received as aforesaid, from the subscribers to the capital of said bank, in some place of secure and safe keeping, so that the same may and shall be specifically delivered and transferred, as the same were by them respectively received, to the Fiscal Bank of the United States, or to their order, as soon as shall be required after the organization of the said bank.  And the said commissioners appointed to superintend the subscriptions to the capital of the said bank, as aforesaid, shall receive a reasonable compensation for their services, respectively, and shall be allowed all reasonable charges and expenses incurred in the execution of their trust, to be paid by the bank out of the funds thereof.

Sec. 5.  And be it further enacted, That no certificate of stock, or any subscription, or any right thereto, shall be transferred except by operation of law, until after the whole amount of the second instalment shall have been fully paid, and every contract or agreement made or entered into for the transfer of such stock, or for the holding the same in trust for the use of any other person, except the person in whose name it is subscribed in the books, or for whose use it is therein expressed, shall be wholly and absolutely null and void in law.  That it shall be lawful for the president, directors, and company of the said bank, to sell and transfer, for gold and silver coin, or bullion, Treasury notes and certificates of stock subscribed to the capital of the said bank, as aforesaid.

Sec. 6.  And be it further enacted, That at the opening of the subscription to the capital stock of the said bank, the Secretary of the Treasury shall subscribe, or cause to be subscribed, on behalf of the United States, the said number of one hundred thousand shares, amounting to ten millions of dollars, as aforesaid;  which said subscriptions, so made by the Secretary of the Treasury, as aforesaid, shall be paid in bullion, in gold or silver coin, or in stock of the United States, bearing interest at the rate of five per centum per annum;  and if payment thereof, or of any part thereof, be made in public stock, bearing interest as aforesaid, the said interest shall be payable half yearly, to commence from the time of making such payments on account of the said subscription;  and the principal of the said stock shall be redeemable in any sums, and at any periods, which the Government shall deem fit, after the expiration of fifteen years.  And the Secretary of the Treasury shall cause certificates of public stock to the amount of ten millions of dollars, to be prepared and made in the usual form, and shall at his discretion, and whensoever he shall think fit, sell the same for gold or silver coin, or bullion, at not less than the par value thereof, or he shall pay over and deliver three millions five hundred thousand dollars of the same to the said bank, on the first day of January, eighteen hundred and forty-two, and two millions five hundred thousand dollars on the first day of May, and four millions of dollars of the same on the first day of September, in the same year;  which said stock it shall be lawful for the said bank to sell and transfer for gold and silver coin, or bullion, at their discretion.  And if the Secretary of the Treasury shall sell the whole, or any part of the stock, he shall pay to the said bank gold and silver coin, or bullion, to the nominal amount of stock so sold in like instalments;  Provided, nevertheless, That if the amount of stock which may be offered for the subscription of individuals, or corporations, shall not be fully taken prior to the twentieth of December next, and the deficiency do not exceed one-third, the residue shall be subscribed for by the Secretary of the Treasury on behalf of the United States, and shall be sold by him as soon thereafter as he can obtain its par value;  and for which the Secretary of the Treasury is hereby authorized to issue stocks of the United States, in manner as before provided.

Sec. 7.  And be it further enacted, That the subscribers to the said bank, their successors and assigns, shall be, and they are hereby, created a corporation and body politic, by the name and style of "the Fiscal Bank of the United States," and shall so continue until the first day of June, in the year one thousand eight hundred and sixty-two;  and by that name shall be, and are hereby made able and capable in law, to have, purchase, receive, possess, enjoy, and retain to them and their successors, lands, rents, tenements, hereditaments, goods, chattels, and effects, of whatsoever kind, nature, and quality;  and the same to sell, grant, demise, alien, or dispose of;  to sue and be sued, plead and be impleaded, answer and be answered, defend and be defended, in all State courts having competent jurisdiction, and in any circuit court of the United States;  and also to make, have, and use a common seal, and the same to break, alter and renew at their pleasure;  and also to ordain, establish and put in execution, such by-laws and ordinances and regulations as they shall deem necessary and convenient for the government of the said corporation, not being contrary to the constitution thereof, or to the laws of the United States;  and generally to do and execute all and singular the acts, matters, and things which to them it shall or may appertain to do;  subject, nevertheless, to the rules, regulations, restrictions, limitations and provisions hereinafter prescribed and declared

Sec. 8.  And be it further enacted, That, for the management of the affairs of the said corporation, there shall be nine directors, three of whom shall be annually appointed by the President of the United States, by and with the advice and consent of the Senate, and six of whom shall be annually elected at the banking house in the city of Washington, on the first Monday of January in each year, by the qualified stockholders of the capital of said bank, other than the United States, and by a plurality of votes then and there actually given, according to the scale of voting hereinafter prescribed:  Provided always, That no member of Congress, or of the respective State Legislatures, and no officer or contractor of the Federal or State Governments, shall be a director in said bank or branches, and that no person being a director in the Fiscal Bank of the United States, or any of its branches, shall be a director of any other bank;  and should any such director act as a director in any other bank, it shall forthwith vacate his appointment in the direction of the Fiscal Bank of the United States;  and the directors so duly appointed and elected shall be capable of serving, by virtue of such appointment and choice, from the first Monday in the month of January of each year, until the end and expiration of the first Monday in the month of January of the year next ensuing the time of each annual election, to be held by the Stockholders as aforesaid.  And the board of directors annually, at the first meeting after their election, in each and every year, shall proceed to elect one of the directors to be president of the corporation, who shall hold the said office during the same period for which the directors are appointed and elected as aforesaid:  Provided, also, That the first appointment and election of the directors and president of the said bank shall be at the time and for the period hereinafter declared:  And provided also, That, in case it should at any time happen that an appointment or election of directors, or an election of the president of the said bank, should not be so made as to take effect on any day when, in pursuance of this act, they ought to take effect, the said corporation shall not for that cause be deemed to be dissolved;  but it shall be lawful at any other time to make such appointments, and to hold such elections, (as the case may be,) and the manner of holding the elections shall be regulated by the by-laws and ordinances of the said corporation;  and until such appointments or elections be made, the directors and president of said bank for the time being shall continue in office:  And provided, also, That in case of the death, resignation or removal of the president of the said corporation, the directors shall proceed to elect another president from the directors as aforesaid;  and in case of the death, resignation, or absence from the United States, or removal of a director from office, the vacancy shall be supplied by the President of the United States, or by the surviving directors, as the case may be;  but the President of the United States alone shall have power to remove either of the directors appointed by him as aforesaid.

Sec. 9.  And be it further enacted, That as soon an the sum of ten dollars on each share, in bullion, gold, or silver coin, Treasury notes, or certificates of stock, shall have been actually received on account of the subscriptions to the capital of the said bank, (exclusively of the subscriptions of aforesaid on the part of the United States,) notice thereof shall be given, by the persons under whose superintendence the subscriptions shall have been made at the city of Washington, in at least two newspapers printed in each of the places (if so many be printed in such places respectively) where subscriptions shall have been made;  and the said persons shall, at the same time, and in the like manner notify a time and place, within the said city of Washington, at the distance of at least thirty days from the time of such notification, for proceeding to the election of six directors, as aforesaid;  and it shall be lawful for such election to be then and there made.  And the President of the United States is hereby authorized, during the next session of Congress hereafter, to nominate, and, by and with the advice and consent of the Senate, to appoint three directors of the said bank, whether they be stockholders or not, anything in the provisions of this act to the contrary notwithstanding;  and the persons who shall be elected and appointed, as aforesaid, shall be the first directors of the said bank, and shall proceed to elect one of the directors to be president of the said bank;  and the directors and president of the said bank so appointed and elected, as aforesaid, shall be capable of serving in their respective offices, by virtue thereof, until the end and expiration of the first Monday of the month of January next ensuing the said appointments and elections;  Provided, That it shall and may be lawful for the President of the United States, as soon as ten dollars on each share are paid, in manner herein provided, to appoint three directors, who shall serve until they are superseded by appointments made by the President of the United States, by and with the advice and consent of the Senate, as hereinbefore provided:  And provided further, That as soon as the sum of six millions five hundred thousand dollars, in bullion, gold or silver coin, or in Treasury notes, or certificates of stock, shall have been actually received on account of the subscriptions to the capital of the said bank, (exclusively of the subscription of ten millions aforesaid on the part of the United States,) the operations of the same shall thenceforth commence and continue at the city of Washington.

Sec. 10.  And be it further enacted, That the directors, for the time being, shall have power to appoint such officers, clerks and servants, under them as shall be necessary for executing the business of the said corporation, and to allow them such compensation, for their services, respectively, as shall be reasonable, and shall be capable of exercising such other powers and authorities for the well governing and ordering of the affairs of the said corporation, as shall be prescribed, fixed, and determined by the by-laws, regulations, and ordinances of the same.

Sec. 11.  And be it further enacted, That the following rules, restrictions, limitations, and provisions, shall form and be fundamental articles of the constitution of said corporation, to wit:--

1st.  The number of votes to which the stockholders shall be entitled, in voting for directors, shall be according to the number of shares he, she, or they, respectively, shall hold, in the proportions following, that is to say: for one share, and not more than two shares, one vote;  for every two shares above two, and not exceeding ten, one vote, for every four shares above ten, and not exceeding thirty, one vote;  for every six shares above thirty, and not exceeding sixty, one vote;  for every eight shares above sixty, and not exceeding one hundred, one vote;  for every ten shares above one hundred, one vote;  but no person, co-partnership, or body politic shall be entitled to a greater number than sixty votes: and, after the first election, no share or shares shall confer a right of voting, which shall not have been holden three calendar months previous to the day of election;  no proxy to any officer of the bank, or of more than ninety days' standing, shall be valid;  no proxy shall have a right to give more than three hundred votes;  and stockholders actually resident citizens of the United States, and none others may vote in elections by proxy or otherwise;  and any person holding a proxy may be required by any stockholder, at the time of voting, to make oath that he believes his principal, in whose behalf he votes, to be the bona fide holder of the share or shares and that no sale or transfer has been made for the purpose of evading the scale of voting established by this act.

2d.  Not more than five-sixths of the directors elected by the stockholders, who shall be in office at the time of an annual election, shall be elected for the succeeding year;  and no director shall hold his office for more than five years out of six in succession;  but the director who shall be president at the time of an election, may always be re-appointed, or selected as the case may be.

3d.  None but a stockholder, resident citizen, shall be a director.  Not more then two directors shall be elected and not more than one appointed out of any one State: and they shall be paid by said bank such reasonable compensation for their services as the stockholders, at their annual meeting shall direct;  but the salary of the president shall be fixed by the directors.

4th.  Not less then five directors shall constitute a board for the transaction of business, of whom the president shall always be one;  and at least three of the five shall be of the directors elected by the stockholders;  and in case of sickness or necessary absence of the president, his place shall be supplied by any other director whom he, by writing, under his hand, shall depute for that purpose;  and the director so deputed may do and transact all the necessary business belonging to the office of the president of the said corporation, during the continuance of the sickness or necessary absence of the president.

5th.  A number of stockholders, not less than sixty, who, together, shall be proprietors of one thousand shares, or upwards, shall have power at any time to call a general meeting of the stockholders, for purposes relative to the giving at least four weeks' notice in the public newspapers of the place where the bank is seated, and specifying in such notice the object or objects of such meeting.

6th.  Each cashier or treasurer, before he enters upon the duties of his office, shall be required to give bond, with two or more sureties, to the satisfaction of the directors, in a sum not less than fifty thousand dollars, with a condition for his good behaviour, and the faithful performance of his duties to the corporation.

7th.  The lands, tenements, and hereditaments, which it shall be lawful for the said corporation to hold, shall be only such as shall be requisite for its immediate accommodation, in relation to the convenient transaction of its business, and such as shall have been purchased at sales upon judgments or decrees, or shall have been assigned or set off to said bank in satisfaction of said judgments or decrees, which shall have been obtained for debts due, or as have been bona fide mortgaged to it by way of security:  Provided, That no loan shall be made on the security of real estate;  nor shall the said corporation hold any one parcel of such lands or tenements, not necessary for the convenient transaction of its business, for a longer period than five years.

8th.  The total amount of debts which the said corporation shall at anytime owe, whether by bond, bill, note, or other contract, over and above the debt or debts due for money deposited in the bank, shall not exceed the sum of twenty-five millions of dollars, unless the contracting of any greater debt shall have been previously authorized by law.  In case of excess, the directors under whose administration it shall happen, shall be liable for the same in their natural and private capacities;  and an action of debt may, in such case, be brought against them, or any of them, their, or any of their heirs, executors, or administrators, in any court of record of the United States, by any creditor or creditors of the said corporation, and may be prosecuted to judgment and execution, any condition, covenant, or agreement, to the contrary notwithstanding;  but this provision shall not be construed to exempt the said corporation, or the lands, tenements, goods, or chattels of the same, from being also liable for, and chargeable with, the said excess.  Such of the said directors as may have been absent when the said excess was contracted or created, or who may have dissented from the resolution or act whereby the same was so contracted or created, may respectively exonerate themselves from being so liable by forthwith giving notice of the fact, and of their absence or dissent, to the President of the United States, and to the stockholders, at a general meeting, which they shall have power to call for that purpose.

9th.  The said corporation shall not directly or indirectly deal or trade in any thing except bills of exchange, gold or silver coin, or bullion, or goods, or lands purchased on execution, sued out on judgments, or decrees obtained for the benefit of said bank, or taken bona fide in the payment of debts due to it, or goods which shall be the proceeds of its lands.  It shall not be at liberty to purchase any public debt whatever, nor make any loan upon the pledge thereof, nor shall it take more than at the rate of six per centum per annum, for or upon its loans or discounts, nor shall the board of directors of the said corporation make donations or presents of its funds to any officer or director for any purpose whatever.

10th.  No loan shall be made by the said corporation, for the use or on account of the Government of the United States, to an amount exceeding one million of dollars, nor for any period exceeding one hundred and eighty days, or on account of any particular State, to an amount exceeding one hundred thousand dollars, or for any period exceeding one hundred and eighty days, unless previously authorized by a law of the United States.

11th.  The stock of the said corporation shall be assignable and transferable, according to such rules as shall be instituted in that behalf, by the by-laws and ordinances of the same.  Provided, No assignment or transfer of stock shall at any time be made to others than citizens of the United States, or corporations and companies of the several States, or of the United States, or Territories thereof;  and if otherwise made, the same shall be void, and the stock so unlawfully transferred shall be forfeited and accrue to the surplus fund of the bank.

12th.  The bills obligatory and of credit under the seal of the said corporation, which shall be made to any person or persons, shall be assignable by endorsement thereupon, under the hands of such person or persons, and his, her, or their executors, or administrators, and of his, her, or their assignee or assignees, and so as absolutely to transfer and vest the property thereof in each and every assignee or assignees successively;  and to enable such assignee or assignees, and his, her, or their executors, or administrators, to maintain an action thereupon, in his, her, or their own name or names:  Provided, That said corporation shall not make any bill obligatory, or of credit, or other obligation under its seal, for the payment of a sum less than five thousand dollars, or for a longer period than one year.

13th.  All bills or notes issued by order of the said corporation, signed by the president and countersigned by the principal cashier or treasurer thereof, promising the payment of money to any person or persons, his, her, or their order, or to bearer, although not under the seal of the said corporation, shall be binding and obligatory upon the same, in like manner, and with like force and effect as upon any natural person or persons, if issued by him, her, or them, in his, her, or their private or natural capacity or capacities, and shall be assignable and negotiable in like manner as if they were so issued by such natural person or persons;  that is to say: those which shall be payable to any person or persons, his, her, or their order, shall be assignable by endorsement, in like manner and with the like effect as foreign bills of exchange now are;  and those which are payable to bearer shall be assignable and negotiable by delivery only:  Provided, That all bills or notes so to be issued by said corporation shall be made payable on demand.

14th.  Half-yearly dividends may be made of so much of the profits of the bank as shall appear to the directors advisable, not exceeding three and a half per cent. for any one half year.  When a surplus beyond that limit shall have accumulated in the said bank to an amount exceeding two millions of dollars, the excess beyond that sum and beyond the annual dividends, as such excess accrues, shall be annually transferred and paid over to the Treasurer of the United States;  and, upon the expiration of this charter, any surplus which may be in the said bank, after the payment of dividends as aforesaid, and after reimbursing the capital of the stockholders, shall in like manner be paid into the Treasury of the United States.  If the dividends shall in any half year fall below the above limitation of three and a half per cent., the Secretary of the Treasury shall, out of the surpluses which shall have been previously paid over to the Treasurer, but out of no other funds or money in the Treasury of the United States, pay a sum sufficient to make up the deficiency.  The directors shall make no dividends except from the nett profits arising from the business of the corporation, and shall not at any time, or in any manner, pay to the stockholders, or any of them, any part of the capital stock of the said corporation;  nor shall they at any time, or in any way or manner, reduce the capital stock of the said corporation without the consent of Congress;  nor shall the said directors, either of the said principal bank or of any branch or office of discount and deposit, or any agency, discount or suffer to be discounted, or received in payment, or suffer to be received in payment, any note or other evidence of debt as a payment of or upon any instalment of the said capital stock actually called for and required to be paid, or with the intent of providing the means of making such payment;  nor shall any of the said directors receive or discount, or suffer to be received or discounted, any note or other evidence of debt, with intent of enabling any stockholder to withdraw any part of the money paid in by him on his stock;  nor shall the said directors apply, or suffer to be applied, any portion of the funds of the said corporation, directly or indirectly, to the purchase of shares of its own stock;  nor shall the said directors, or any of them, receive as a security for any loan or discount, or in payment or satisfaction of any debt due to the said corporation, except in the necessary course of collection of debts previously contracted in a bona fide manner in the ordinary course of its banking operations, and actually due and unpaid, any shares of the capital stock of the said corporation;  and any shares of the said capital stock so received in payment of any such debts shall be, in good faith, sold and transferred from the hands and ownership of the said corporation within ten months from the time of its transfer to and reception by the same, in the manner and for the purposes aforesaid;  nor shall the said directors, or any of them, receive from any other banking or other stock corporation shares of the stock of any such banking or other stock corporation, or any notes, bonds, or other evidences of debt issued by or upon the credit of such corporation, in exchange for the shares of stock, notes, bonds, or other evidences of debt of the corporation created by this act.

And the said directors, in determining what are "nett profits" of the said corporation, from which the dividends allowed by this article may be made, shall first deduct from the profits of the business of the said corporation all expenses paid or incurred, both ordinary and extraordinary, attending the management of the affairs, and the transaction of the business of the said corporation;  all interest paid, or then accrued, due and unpaid, on debts owing by the said corporation;  and all losses sustained by the said corporation;  and in the computation of such losses, all debts owing to the corporation shall be included which shall have remained due, without prosecution, and no interest shall have been paid thereon for more than one year, or on which judgments shall have been recovered that shall have remained for more than two years unsatisfied, and on which no interest shall have been paid during that period.  If there shall be a failure in the payment of any part of any sum subscribed to the capital of the said bank, the stockholder so delinquent shall lose the benefit of any dividend which may have accrued prior to the time for making such payment, and during the delay of the same.

15th.  Once in every year the directors shah lay before the stockholders, at a general meeting, or publish for their information, an exact and particular statement of the debts which shall remain unpaid after the expiration of the original credit, and of the surplus of the profits, if any, after deducting losses and dividends.

16th.  The directors of the said corporation shall establish one competent office of discount and deposit in any State in which two thousand shares shall have been subscribed, or may be held, whenever, upon application of the Legislature of such State, Congress may by law require the same.  And the said directors may also establish one or more competent offices of discount and deposit in any Territory or District of the United States, and in any State, with the assent of such State;  and when established, the said office or offices shall be only withdrawn or removed by the said directors prior to the expiration of this charter, with the previous assent of Congress:  Provided, in respect to any State which shall not, at the first session of the Legislature thereof held after the passage of this act, by resolution or other usual legislative proceeding, unconditionally assent or dissent to the establishment of such office or offices within it, such assent of the said State shall be thereafter presumed:  And provided, nevertheless, That whenever it shall become necessary and proper for carrying into execution any of the powers granted by the Constitution, to establish an office or offices in any of tge States whatever, and the establishment thereof shall be directed by law, it shall be the duty of the said directors to establish such office or offices accordingly.  And the said directors shall have power to commit the management of the said offices, and the business thereof, respectively, to such persons, and under such regulations as they may deem proper, not being contrary to law or to this charter.  Or, instead of establishing such offices, it shall be lawful for the directors of the said corporation, from time to time, to employ any agent or agents, or any other bank or banks, to be approved by the Secretary of the Treasury, at any place or places that the said directors may deem safe and proper, to manage and transact the business proposed as aforesaid, other than for the purposes of discount, and to perform the duties hereinafter required of the said corporation, to be managed and transacted by such officers, under such agreements, and subject to such regulations as they shall deem just and proper.  Not more than nine, nor less than five managers or directors of every office, established as aforesaid, shall be annually appointed by the directors of the said corporation, to serve one year.  The said managers or directors shall choose a president from their own number;  they shall be citizens of the United States, and residents of the State, Territory, or District wherein such office is established;  and at least one of the said managers or directors shall be ineligible to reappointment at the end of every first and each succeeding year;  but the president may be always reappointed.

17th.  The officer at the head of the Treasury Department of the United States shall be furnished, from time to time, as often as he may require, not exceeding once a week, with such statements of the condition and business of said corporation as he may specially direct;  and he shall also have a right to inspect, or cause to be inspected by some one by him duly authorized, all the books, papers, and accounts of the said corporation, of every kind, including the accounts of individuals, and to make, or cause to be made, an examination into the affairs, transactions, and condition of the corporation;  and the condition of the bank shall be published monthly, in such manner, and with such particularity as the Secretary of the Treasury shall direct.  And the said bank, and its offices of discount and deposit, shall be open at all times to the full and unrestricted inspection and examination of a committee of either House of Congress, a committee of the stockholders, and to each and all of the directors of the bank.  And, for the purpose of securing a full and unrestricted inspection and examination as aforesaid, the Secretary of the Treasury, or any one by him duly authorized, or a committee of either House of Congress, may respectively summon and examine, under oath, all the directors, officers, or agents of the said corporation, and of any branch or agency thereof, and such other witnesses as they may think proper, in relation to the affairs, transactions, and condition of the corporation;  and any such director, officer, agent, or other person, who shall refuse, without justifiable cause, to appear and testify when thereto required, as aforesaid, shall, on conviction, be subject to a fine not exceeding one thousand dollars, and imprisonment for a term not exceeding one year.  And upon the question of any loan or discount exceeding one thousand dollars, where the same is granted, if any member shall dissent, the vote shall be taken by ayes and noes, and shall be entered on the books of the bank, and be subject to the same inspection as the other proceedings of said bank;  and no part of the proceedings of the bank, nor any loans, discounts, or payments made by it, nor any order given by it, shall be concealed or kept secret from the Government directors, nor shall said directors be excluded from the free and full participation in all the transactions and business of the institution.

18th.  No note shall be issued of a less denomination than five dollars;  but Congress may hereafter, if it shall think fit, restrain the lowest denomination of notes to ten dollars;  nor shall the said bank knowingly increase the amount of the debts due to it, when the notes in circulation exceed three times the amount of specie in its vaults;  and whenever such excess takes place, it shall be the duty of the said corporation to return to such proportion as soon as shall be safe and practicable.

19th.  The debts due and becoming due to said bank shall never, at any one time, exceed the amount of the capital stock actually paid in, and seventy-five per cent. advance thereon.

20th.  No paper shall be discounted, or any loan made by said bank for a longer period than one hundred and eighty days;  nor shall any note, or bill, or other debt, or evidence of debt, be renewed or extended by any engagement or contract of said bank, after the time for which it was negotiated shall have expired.

21st.  The said bank shall not hold any public debt or stocks, or the stocks of any incorporated institution, unless taken for the security or in satisfaction of debts previously contracted.

22d.  The said bank shall not pay out the notes of any other bank, or anything except legal coin, or its own notes.

23d.  The directors of the said bank shall not, within the Ditrict of Columbia, discount any promissory note or bill of exchange, or make any loan whatever, except it be a loan to the Government of the United States according to the provisions of law.

24th.  All notes or bills, adopted and intended to circulate as money, shall be prepared under the direction of the parent institution at Washington, shall be signed as hereinbefore provided for, and shall be made payable at the banking-house in Washington, or at some one of the offices of discount and deposit, to be specified on the face of the note or bill, except notes of a denomination not exceeding ten dollars, which may be signed by the President and Cashier of any office of discount and deposit at which they may be issued and made payable, but shall nevertheless, be prepared at and authorized by the parent institution at Washington.  And no notes or bills but such as are prepared and signed, as aforesaid, shall be issued by any of the said offices of discount and deposit:  Provided, That nothing herein contained shall be so construed as to prohibit the said offices from selling drafts for fifty dollars and upwards, each, drawn and intended for the purpose of remittance.

The notes or bills of said corporation, although the same be upon their face, respectively, made payable at a particular place only, shall, nevertheless, be received by the said corporation, or at any of its offices of discount and deposit, when tendered in liquidation or payment of any debt or balance due to said corporation.

25th.  The officers of the corporation shall not be permitted to borrow money from the said corporation or contract any debt therewith in any manner whatever;  and no note or bill, of which such officer is maker, drawer, endorser, acceptor, or otherwise a party, shall be discounted:  Provided, That the entire liability of any one director of any of said offices to said corporation may exist to an amount not exceeding ten thousand dollars:  And provided also, That no note or bill shall be discounted for any member of either House of Congress of the United States.

Sec. 12.  And be it further enacted, That if the said corporation, or any person or persons for or to the use of the same, shall deal or trade in buying or selling any goods, wares, merchandise, or commodities whatsoever, contrary to the provisions of this act, all and every person or persons, by whom any order or direction for so dealing or trading shall have been given, and all and every person or persons, who shall have been concerned as parties or agents therein, shall forfeit and lose treble the value of the goods, wares, merchandise and commodities, in which such dealing and trade shall have been;  one-half thereof to the use of the informer, and the other half thereof to the use of the United States, to be recovered in any action of law, with costs of suit.

Sec. 13.  And be if further enacted, That if the said corporation shall advance or lend any sum of money for the use, or on account of the Government of the United States, to an amount exceeding one million of dollars, or for the use or on account of any particular State, to an amount exceeding one hundred thousand dollars, (unless specially authorized by law) all and every person or persons, by and with whose order, agreement, consent, approbation and connivance, such unlawful advance or loan shall have been made, upon conviction thereof, shall forfeit and pay for every such offence treble the value or amount of the sum or sums which have been so unlawfully advanced or lent;  one-fifth thereof to the use of the informer, and the residue thereof to the use of the United States.

Sec. 14.  And be it further enacted, That the bills or notes of the said corporation originally made payable, or which shall have become payable on demand, shall be receivable in all payments to the United States, unless otherwise directed by act of Congress:  Provided, however, That if the said bank, or any of its branches, shall at any time suspend specie payments, or shall neglect or refuse to discharge, on demand, any and all of its liabilities in specie, then its bills or notes shall not, during such suspension, be received in payment of any debt or demand of the United States;  and such, suspension of specie payments shall be held and adjudged a cause of forfeiture of the charter hereby granted.

Sec. 15.  And be it further enacted, That during the continuance of this act, and whenever required by the Secretary of the Treasury, the said corporation shall give the necessary facilities for transferring the public funds from place to place within the United States, or the Territories thereof, and for distributing the same in payment of the public creditors, and shall also do and perform the several respective duties formerly required of the pension agents and commissioners of loans for the several States, or any one or more of them, without charging commissions, or claiming allowances on account of difference of exchange.

Sec. 16.  And be it further enacted, That the deposits of the money of the United States in places in which the said bank and branches thereof may be established, shall be made in said bank or branches thereof, unless Congress shall otherwise direct by law, and that all public moneys in deposit in said bank or standing on its books to the credit of the Treasurer, shall be taken and deemed to be in the Treasury of the United States, and all payments made by the Treasurer shall be in checks drawn on said bank:  Provided, That if the said bank shall suspend specie payments during the recess of Congress, it shall be the duty of the Secretary of the Treasury to provide for the safe-keeping of the public moneys until the action of Congress can be had thereon, and he shall report the same to Congress on the first day of the session next after such suspension.

Sec. 17.  And be it further enacted, That the said corporation shall not at any time suspend or refuse payment in gold and silver coin of any of its notes, bills, or obligations, nor of any moneys received upon deposit in said bank, or any of its offices of discount and deposit;  and if the said corporation shall at any time refuse or neglect to pay, on demand, any bill, note, or obligation, issued by the corporation according to the contract, promise or undertaking therein expressed, or shall neglect or refuse to pay, on demand, any moneys received in said bank, or in any of its offices aforesaid, on deposit, to the person or persons entitled to receive the same, then, and in every such case, the holder of any such note, bill, or obligation, or the person or persons entitled to receive and demand such moneys as aforesaid, shall respectively be entitled to receive and recover interest on the said bills, notes, obligations, or moneys, until the same shall be fully paid and satisfied, at the rate of twelve per cent. per annum, from the time of such demand aforesaid:  Provided, That Congress may, at any time hereafter, enact laws enforcing and regulating the recovery of the amount of the notes, bills, obligations, or other debts, of which payment shall have been refused as aforesaid, with the rate of interest above-mentioned, vesting jurisdiction for that purpose in any Courts of the United States, or Territories thereof, as they may deem expedient.

Sec. 18.  And be it further enacted, That if any person shall falsely make, forge, or counterfeit, or cause or procure to be falsely made, forged, or counterfeited, or willingly aid or assist in falsely making, forging or counterfeiting, any bill or note in imitation of, or purporting to be, a bill or note issued by order of said bank, or any order or check on the said bank or corporation, or any cashier thereof;  or shall falsely alter, or cause or procure to be falsely altered, or willingly aid or assist in falsely altering, any bill or note issued by order of the said bank, or any order or check on the said bank or corporation, or any cashier thereof;  or shall pass, utter, or publish, as true, any false, forged or counterfeit bill or note, purporting to be a bill or note issued by order of the said bank, or any false, forged, or counterfeited order or check upon the said bank or corporation, or any cashier thereof, knowing the same to be falsely forged or counterfeited;  or shall pass, utter, or publish, or attempt to pass, utter, or publish, as true, any falsely altered bill or note issued by order of the said bank, or any falsely altered order or check on the said bank or corporation, or any cashier thereof, knowing the same to be falsely altered, with intention to defraud the said corporation, or any other body politic or person;  or shall sell, utter, or deliver, or cause to be sold, uttered, or delivered, any forged or counterfeit note or bill in imitation of, or purporting to be, a bill or note issued by order of the said bank, knowing the same to be false, forged, or counterfeited, every such person shall be deemed and adjudged guilty of felony;  and being thereof convicted by due course of law, shall be sentenced to be imprisoned and kept to hard labor, for not less than three years, nor more than ten years;  or shall be imprisoned not exceeding ten years, and fined not exceeding five thousand dollars:  Provided, That nothing herein contained shall be construed to deprive the Courts of the individual States of a jurisdiction under the laws of the several States, over any offence declared punishable by this act.

Sec. 19.  And be it further enacted, That if any person shall make or engrave, or cause or procure to be made or engraved, or shall have in his custody or possession any plate, engraved after the similitude of any plate from which any notes or bills issued by the said corporation shall have been printed, with intent to use such plate, or cause or suffer the same to be used, in forging or counterfeiting any of the notes or bills issued by the said corporation;  or shall have in his custody or possession any blank note or notes, bill or bills, engraved and printed after the similitude of any notes or bills issued by said corporation, with intent to use such blanks, or cause or suffer the same to be used in forging or counterfeiting any of the notes or bills issued by the said corporation;  or shall have in his custody or possession any paper adapted to the making of bank notes or bills and similar to the paper upon which any notes or bills of the said corporation shall have been issued, with intent to use such paper, or cause or suffer the same to be used in forging or counterfeiting any of the notes or bills issued by the said corporation, every such person, being thereof convicted by due course of law, shall be sentenced to be imprisoned for a term not exceeding five years, and fined in a sum not exceeding one thousand dollars.

Sec. 20.  And be it further enacted, That if any officer, agent, or servant of the said bank, shall embezzle or appropriate to his own use any moneys, goods, effects, or funds of the said bank, with intent to cheat or defraud the said corporation, or shall make false entries upon the books of the said bank with intent to defraud the said corporation, or any other person whatsoever, such officer, agent, or servant, shall be fined at the discretion of the court, and imprisoned, not exceeding six years.

Sec. 21.  And be it further enacted, That no other bank shall be established by any further law of the United States during the continuance of the corporation hereby created:  Provided, That Congress may renew or modify the charters of the banks heretofore established within the District of Columbia, or establish other banks within and for the use of the said District, so that the aggregate capital of all the banks chartered for the said District shall not exceed the sum of five millions of dollars.  And, notwithstanding the expiration of the term for which the said corporation is created, it shall be lawful to use the corporate name, style and capacity, for the purpose of suits, and for the final settlement and liquidation of the affairs and accounts of the corporation, and for the sale and disposition of their estate, real, personal, and mixed;  but not for any other purpose or any other manner whatever, for a period exceeding two years after the expiration of the said term of incorporation.

Sec. 22.  And be it further enacted, That if the subscriptions and payments to said bank shall not be made and completed, so as to enable the same to commence its operations;  or, if the said bank shall not commence its operations on or before the first Monday in April next, then, and in that case, Congress may, at any time within twelve months thereafter, declare, by law, this act null and void.

Sec. 23.  And be it further enacted, That whenever a committee of either House of Congress, appointed to inspect the books and to examine into the proceedings of the corporation hereby created, shall report that the provisions of this charter have been by the same violated, or the President of the United States shall have reason to believe that the charter has been violated, it may be lawful for Congress to direct, or the President to order a scire facias to be sued out of the Circuit Court of the United States for the District of Columbia, in the name of the United States, (which shall be served upon the President of the corporation for the time being, at least fifteen days before the commencement of the term of said court,) calling upon the said corporation to show cause wherefore the charter hereby granted shall not be declared forfeited;  and it shall be lawful for the said court, upon the return of the said scire facias, to examine into the truth of the alleged violation;  and if such violation be made to appear, then to pronounce and adjudge that the said charter is forfeited and annulled;  Provided however, That every issue of fact which may be joined between the United States and the corporation aforesaid shall be tried by a jury.  And it shall be lawful for the court aforesaid to require the production of such of the books or papers of the corporation as it may deem necessary for the ascertainment of the controverted facts: and the final judgment of the court aforesaid shall be examinable in the Supreme Court of the United States by writ of error, and be there reversed or affirmed according to the usages of the law.

Sec. 24.  And be it further enacted, That if the said corporation shall assume or exercise any franchise or privilege, or attempt to carry on any business not allowed by this act, it shall be lawful for the Attorney General of the United States, under the direction of Congress, or of the President of the United States, to file an information in the nature of a bill in equity, in the Circuit Court of the United States for the District of Columbia, to restrain by injunction the said bank from assuming or exercising such franchise or privilege, or transacting such business.  And the said court may issue temporary or perpetual writs of injunction, direct such course of proceeding, and make all such orders and decrees, on such information as may be consonant with the course of such court in cases in equity;  Provided, That no final decree shall be made in any such case, unless the issues of fact joined therein shall be first found by a jury.  And that from such final decree, an appeal may be taken to the Supreme Court of the United States.


Passed the Senate, July 28, 1841.
Passed the House of Representatives, August 6th, 1841.
Vetoed by the President, August 16, 1841.

On August 19, 1841,
the Senate attempted to over-ride the Presidential rejection, but it failed even to come close to the required two-third majority (yeas, 25; nays, 24.)
Yeas:-- Messrs. Barrow, Bates, Bayard, Berrien, Choate, Clay of Kentucky, Dixon, Evans, Graham, Henderson, Huntington, Kerr, Magnum, Merrick, Miller, Morehead, Porter, Prentiss, Preston, Simmons, Smith of Indiana, Southard, Tallmadge, White, Woodbridge.
Nays:-- Messrs. Allen, Archer, Benton, Buchanan, Calhoun, Clay of Alabama, Clayton, Cuthbert, Fulton, King, Linn, McRoberts, Mouton, Nicholson, Pierce, Rives, Sevier, Sturgeon, Tappan, Walker, Williams, Woodbury, Wright, Young.