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House of Representativess


1 3 , 1830.

M r , M ' D U F F I K from the Committee of W a y s and Means, to which the subject
h a d been referred, made the following
The Committee
of Ways and Means, fotvhoni was referred so much
af the Message of the President
as relates to the Sank of the
States j beg leave to report:
T h a t they have bestowed upon the subject all the attention demanded by its
i n t r i n s i c importance, and now respectfully submit the result of their deliberat i o n s t o the consideration of the House. T h e r s ^ v faw subjects, having refere n c e t o the policy of an established goven*tfieyit,,si*vitally connected
with the
h e a l t h of the body politic, or in wj^civthf pecuniary interests x 0 r society are so
e x t e n s i v e l y and deeply invt\i>£d- ' !No one of the attributes of ^sovereignty
c a r r i e s with it a more solemn l^sponsibility, or calls in requisition ajrl^ber deg r e e of wisdom, than the.p/nv^r of regula'tiu&, tin-, cornmpft; v^rrency, $nd*thus
fixing t h e general standard, )f value for %a^$-e*it i^o <muerc ai community,-Comp o s e d of confederated States.
ity a s s i g n ^ tc .them- with u cuiTespdirdii
its magnitude and difficulty.
T h e most simple and obvious analysis of the subject, as it is presented by
the message of the President, exhibits the following questions for the decision
of t h e National Legislature,
1. H a s Congress the constitutional power to incorporate a bank, such as
that of the United States?
2- I s it expedient to establish and maintain such an institution?
3, I s it expedient to establish " a National Bank, founded upon the credit
of the Government and its revenues?"
I . If the concurrence of all the departments of the Government, at different
periods of our history, under every administration, and during the ascendency
of both the great political parties, into which the country was divided, soon
after the adoption of the present Constitution, shall be regarded as having the
authority ascribed to such sanctions by the common consent of all well r e f lated communities, the constitutional power of Congress to incorporate a bank,
may be assumed as a postulate no longer open to controversy. I n a little more
than two years after the Government went into operation, and at a period when

most of the distinguished members of the Federal Convention were either in
the Executive or Legislative councils, the act, incorporating the first bank of
the United States, passed both branches of Congress bv large majorities and
received the deliberate sanction of President Washington, Mho had then recently presided over the deliberations of the Convention. The constitutional
power of Congress to pass the act of incorporation, was thoroughly investigated, both in the Executive Cabinet and in Congress, under circumstances, in'all
respects, propitious to a dispassionate decision. There was as that t i m e n o
organization of political parties, and the question was, therefore, decided by
those, who, from their knowledge and experience, were peculiarly qualified to
decide correctly; and who were entirely free from the influence of that r»artv
excitement and prejudice which would justly impair, in the estimation of posterity, the authority of a legislative interpretation of the constitutional charter
No persons can be more competent to give a just construction to the Constitution, than those who had a principal agency in framing it j and no administration can claim a more perfect exemption from all those influences which
sometimes,J>ervert the judgments, even of the most wise and patriotic, than
that of the Father of his Country, du ring the first term of his service.
touch were the circumstances, under which all the branches of the National
legislature solemnly determined that the power of creating a National Bank
was vested m Congress by the Constitution. The bank thus created, contin„™* i °Pf ra . t,ons f«r twenty years—the period for which its charter was
£S?+ * * U n n g W h l c h t i m e » P u b I i c a n d private credit were raised, from a
Ji. X
?, V e r y e l e v *ted condition, and the finances of the nation were
placed upon the most solid foundation.
r^ut *,?• the c h * r t e r expired, in 1811, Congress refused to renew it. princitotlSs
5 ^
!&"*** ^ W ^ ^ 1 ^ '
l i s t i n g state of political
sinceaWd°Trt~ ^
^ .WrJiartared, the two great parties that have
£ S n I S ? M ^ A f S r B t r 7 ' J ? e f m t 0 a S 6 a " a a n organized existence. Mr. left
i n T o ^ M
the latter

municated to the^ Bank b?S.?
n ^ , M ^ ' ? * * S c d i t i o » laws was, in, part, cornh e
sanction to a n a r t l , ?
United States'? ar.d, although he gave his officiar
andtoAnother to^» u f t a h e w * ™ ! c * of that institution, at New Orleans,
<iue*tion And A n , . J T «
Congress, it was discussed as a party
of the most
Sir Gallatin t h S £ \ T*
distinguished republicans, including
member of^ J ^ S Z ^ ^ ^ S* • ^ T r * a m r £ and Mr" Crawford, then I
the^neLuL h t ! ^
' w e r e 4 d e c , l d e d ^ in favour of the renewal, sustaining
a l G ar um
d i t »^l
T ?
S «nts, the votes in both branches of Congress were
a9 Part
4hl T^L
f ,
^ V ° t 6 S % A t n o t i m e > since the commencement of
Tne government, has there existed a more violent partv excitement, than that
wmen marked the period under review. It was the period of the embargo,
non-intercourse, and other commercial restrictions; when the undiscriminating
opposition ot the leaders of the federal party to the measures adopted by the
administration, to vindicate our rights against British aggression, had caused
the great majority of the American people to view these leaders as the apologists ot a nation, already regarded in the light of a public enemy. "When to
these circumstances we add. that the stock of the bank was principally held

b y B r i t i s h subjects, and Americans of the unpopular party, the House will
r e a d i l y perceive how great were the national and party prejudices, which
m u s t nave been arrayed against the proposition to renew its charter. I t was
s t a t e d by Mr* Clay, in a speech delivered in the Senate, that seven-tenths of
t h e s t o c k belonged to British subjects, and that certain English noblemen, and
a l a t e L o r d Chancellor, were among the \ery largest of the stockholders.—
^IVith all these difficulties to encounter, the proposition for renewing the
c h a r t e r was lost onlv by the casting vote of the President of the Senate, and
b y a majority of a single vote in the House of Representatives*
I n l e s s than three years after the expiration of the charter—the war with
G r e a t Britain having "taken place in the mean time—the circulating medium
b e c a m e so disordered, the public finances so deranged, and the public credit
s o i m p a i r e d , that the enlightened patriot, Mr* Dallas, who then presided over
t h e T r e a s u r y Department, with the sanction of Mr- Madison, and, as it is
b e l i e v e d , every member of the cabinet, recommended to Congress the establ i s h m e n t of a National Bank, as the only measure by which the public credit
c o u l d b e revived, and the fiscal resources of the Government redeemed from
a r u i n o u s , and otherwise incurable embarrassment: and, such had been the
i m p r e s s i v e lesson taught by a very brief, but fatal experience, that the very
i n s t i t u t i o n , which had bcen\so recently denounced, and rejected by the repub*
Heart p a r t y , being now recommended by a republican administration, was
c a r r i e d through both branches of Congress, as a republican measure, by an
o v e r w h e l m i n g majority of the republican party. I t is true that M r . Madison
d i d n o t approve and sign the bill which passed the two Houses, because it was
n o t s u c h a bill has had been recommended by the Secretary of the T r e a s u r y ,
a n d b e c a u s e the bank it proposed to create, was not calculated, in the opinion
o f t h e President, to relieve the necessities of the country. B u t he premised
h i s objections to the measure, by *6 waiving the question of the constitutional
a u t h o r i t y of the Legislature to establish an incorporated bank, as being prec l u d e d , in his opinion, by repeated recognitions, u n d e r varied circumstances,
of t h e validity of such an institution in acts of the Legislative, Executive* a n d
J u d i c i a l branches of the government, accompanied by"indications, in different
m o d e s , of a concurrence of the general will of the n a t i o n . " Another bill was
i m m e d i a t e l y introduced, and would, in all probability, have become a law,
h a d n o t the news of peace, by doing away the pressure of the emergency, ind u c e d Congress to suspend further proceedings on the subject, until the ens u i n g session. A t the commencement of that session, M r . Madison invited
t h e a t t e n t i o n of Congress to the subject, and M r . Dallas again urged the nec e s s i t y of establishing a bank to restore the currency, and facilitate the collection arid disbursement of the public r e v e n u e ; and so deep and solemn was the
conviction upon the minds of the public functionaries, that such an institution
w a s t h e only practicable means of restoring the circulating medium to a state
of s o u n d n e s s , that, notwithstanding the decided opposition of all the state
b a n k s a n d their debtors, and, indeed, the whole debtor class of the commun i t y , t h e act, incorporating the present B a n k of the United States, was passed
by considerable majorities in both branches of Congress, and approved by M r .
T h i s brief history of the former and present bank, forcibly suggests a few
practical reflections. I t is to be r e m a r k e d , in the first place, t h a t , since the
adoption of the Constitution, a bank has existed u n d e r t h e authority of the
F e d e r a l Government, for thirty-three out of forty y e a r s ; d u r i n g which time,
public and private credit have been, tfntintained a*t ftn elevation fully equal to
what has existed in any nation jri theUtS^Ws^PhNfeas, in the t w o short inter-

v a l s , d u r i n g which no national bank e x i s t e d , public and private c r e d i t w e r e
g r e a t l y impaired, and in the latter i n s t a n c e , the fiscal o p e r a t i o n s o f t h e G o v e r n m e n t w e r e almost, e n t i r e l y arrested. In the s e c o n d p l a c e , it i s w o r t h y o f
s p e c i a l n o t i c e , that, i n both the i n s t a n c e s in w h i c h C o n g r e s s has c r e a t e d a
b a n k , i t has been d o n e u n d e r c i r c u m s t a n c e s calculated to g i v e t h e h i g h e s t a u t h o r i t y to the d e c i s i o n .
T h e first i n s t a n c e , a s has b e e n a l r e a d y r e m a r k e d ,
w a s m the primitive d a y s of the republic, when the patriots of the R e v o l u t i o n ,
ami the sages o f t h e F e d e r a l C o n v e n t i o n , were the l e a d i n g m e m b e r s b o t h o f
the Executive and Legislative councils,-and when General W a s h i n g t o n , w h o ,
at the head ot her a r m i e s , hail c o n d u c t e d his c o u n t r y to i n d e p e n d e n c e , a n d , a s
the head of the C o n v e n t i o n , had presided over those d e l i b e r a t i o n s w h i c h r e sulted in t h e e s t a b l i s h m e n t of the p r e s e n t C o n s t i t u t i o n , w a s t h e a c k n o w l e d g e d
1 r e s i d e n t of a p e o p l e , u n d i s t r a c t e d by party d i v i s i o n s .
The second i n s t a n c e
w a s u n d e r c i r c u m s t a n c e s of a v e r y ditterent, but e q u a l l y d e c i s i v e c h a r a c t e r .
W e find t h e v e r y party which had so r e c e n t l y defeated the p r o p o s i t i o n t o r e n e w t h e charter ot the old bank, s e v e r e l y schooled both b y a d v e r s i t y a n d e x KLT\ C f C : m J S » a n i i n o u s l y sacrificing the pride of c o n s i s t e n c y , a n d t h e p r e j u th
* *hnn* -ot, I»tri U ti«ni. 1 I t m a y be said w i t h o u t d i s p a r a S L
d a v , of T I f
" ^ t a , e n t a m l P«rer patriotism has n e v e r e x i s t e d
w n r i n c o r n o S f , I JV
° " ' than the C o n g r e s s by which the p r e s e n t b a n k
« h l S P ° ,1 • * l f C i V W ; a P 0 , i < i c a l P a r t y c x i s t e d ' «*' w , d c h U ™ 8 h t b e t r u l y
publican J r t l t h - e + 1 o n d V h e * f » « « » at Were their c o u n t r y ' s , " i t w a s t h e rZ
f h e n l P n } °* t h a t d a *
*y h a d J " s t c o n d u c t e d t h e c o u n t r y t h r o u g h
Wa r W g d m d e f e u c e
t h c i J ^ J w , f*
. ' " ,'
»*" »er rights and honour, and,~ e l e v a t i n g
tt >OV
the n a , , m v
o n l v fn ^ ,
i *
«"<* miserable e n d s o f p a r t y strife, s o u g h t

t ^ t ^ S ^ ^™ t ™^c t i v e*°
^ ^ ™ * ^ «**
thi"^.^^^^^}" nf °
t h n n curious, to n o t i c e s o m e o f


l e M


of experience
M r M ^ " " i o f P r o n » » « n t m e n , y i e l d i n g to t h e a n t h o r i t y
a t e d \n i r S t ; r e c w n m e ^ S S 3 ^ 1 ! 0 W a S - ^ f a d i n g o p p o n e n t o f t h e bank c r / M r . C l a y / w h o " r e m ™ « W c a n d T n + f l o n e d the bank c r e a t e d in 1 8 1 6 ; a n d
s t r e n u o u s l y sup.,„ P Ve3 J h ^ n ° P P » « c d the renewal o f the charter i n 1 8 1 1 , a s
T h a t m j y h i s! id f Jhe^r, P i > S 1 l ° n . t 0 S , a n t t h e ^ r t e r in 1 8 1 6 .
q u e s t i o n s of constitutional law
w T i *i' w M c h c a n b e s a i d o f f e w c o n t e s t e d
l o n g d i v i d e d the c o u n t r y W n Ji
i &eat P o l i t»cal parties that h a v e s o
e i1 , n y
a n d there are but v e r y few „r 5 *
. P l o n o « » c e d it to be c o n s t i t u t i o n a l
s t a n d c o m m i t t e d in its favour
^ T T ^
^ n o f « i t h e r party, w h o d o n o t
thls im
the committee add the solemn ami « •
, P°sinS array of authorities,
in a case which fully uZdZtSSly™^^?!™*
«f.^e Supreme Court,'
their cognizance, may they not ask " f t ^ £ t l l i q % be
^ i a I b i U 1 \? a I l l U ( ' 9 t l o n l°™*r
w t t l e d and at r e s t ? "
cl-iimi* ?.' • \ W c , ! m n i , U , t ' . e beZ fo b , e d , s *tinctly u n d e r s t o o d , a s u t t e r l y d i s «f tul £
° f a s c r , b l l , S U> t ! i e descision of any or of all the d e p a r t m e n t s
me lt U
t v wl - | ? [ ™ »
P « " II K»'«-^t constitutional q u e s t i o n , t h e b i n d i n g a u t h o r i beJo,
nen l"
} g s to judicial p r e c e d e n t s , in c a s e s of mere private f i g h t , d e a f w l ? " P ? n * c , m s t r u c t i o n of the ordinary a c t s of the L e g i s l a t u r e . N o l e n g t h
Tinw.»ii Cll l ° n ' ° r c o n c u r r e n c e of authority, can consecrate the u s u r p a t i o n o f
P r ™ . J u b v e r « v e of public liberty, and d e s t r u c t i v e of public happiness. B u t ,
w litre t h e p o w e r e x e r c i s e d is c l e a r l y conducive, t o t h e public w e l f a r e , a n d i t s
c t m a i m m o i u u i t v i s m e r e l y doubtful, i t w o u l d s e e m to b e o n e of t h e m o s t o b v i o u s d i c t a t e s of practical w i s d o m , t o regard t h e d e c i s i o n of t h o s e w h o b a d
t h e b e s t m e a n s ot a s c e r t a i n i n g t h e i n t e n t i o n of the C o n s t i t u t i o n , and w h o

w e r e a c t u a t e d by the most undoubted purity and disinterestedness of motive^
a s o f sufficient authority at least to overrule theoretical objections and silenee
i n d i v i d u a l scruples.
T h e committee will now submit a few r e m a r k s , with the design of showings
t h a t , v i e w i n g the constitutionality of the bank as an original question, t h e arg u m e n t s in its favour a r e at least as strong as those against it.
T h e earliest, and the principal objection urged against the constitutionalit y o f a national bank, was, that Congress had not the power to c r e a t e corpor a t i o n s . T h a t Congress has a distinct and substantive power to c r e a t e corpor a t i o n s , without reference to the objects entrusted to its jurisdiction, is a prop o s i t i o n which never lias been maintained, within the knowledge of the Comm i t t e e ; but, t h a t any one of the powers expressly conferred upon Congress,
i s s u b j e c t to the limitation, that it shall n o t be carried into effect by t h e
a g e n c y of a corporation, is a proposition which cannot be maintained, in the
o p i n i o n of the committee.
I f c o n g r e s s , u n d e r the authority to pass all laws, necessary and proper for
c a r r y i n g into effect the powers vested in all or any of the d e p a r t m e n t s of the
g o v e r n m e n t , m a y rightfully pass a law inflicting the p u n i s h m e n t of death,
any other authority, it is difficult t o conceive why it m a y not pass a
l a w , u n d e r t h e same authority, for the more humble purpose of creating a corp o r a t i o n . T h e power of creating a corporation is one of the lowest a t t r i b u t e s ,
o r , m o r e properly speaking, incidents of sovereign power. T h e c h a r t e r i n g of
a b a n k , tor example, does not authorize the corporation to do a n y t h i n g
w h i c h the individuals composing it might not do without the charter. I t is
t h e r i g h t of every individual of the union to give credit to whom lie chooses,
a n d t o obtain credit where he can get it. I t is not the policy of a n y commerc i a l c o u n t r y to r e s t r i c t the free circulation of credit, whether in t h e form of
p r o m i s s o r y notes, bills of exchange, or b a n k notes. T h e charter of t h e B a n k
o f t h e U n i t e d States, therefore, merely enables the corporation to do, in an
a r t i f i c i a l capacity, and with more convenience, w h a t it would be lawful for
"the i n d i v i d u a l corporators to do without incorporation. M r , G i r a r d establishe d a b a n k in Philadelphia without a charter, which was in v e r y high credit
w i t h i n the sphere of its circulation; and it cannot be doubted, that he might
h a v e formed a b a n k i n g co-partnership with the principal capital its in the other
c o m m e r c i a l cities of t h e Tjnion, of which the bills would have had a general
c r e d i t in every p a r t of t h e country, particularly if the F e d e r a l G o v e r n m e n t
h a d provided that these bills should be received in discharge of its d u e s . T h e
o n l y material particular in which the charter of the B a n k of the United States
c o n f e r s a privilege upon the corporation, a p p a r e n t l y inconsistent with t h e
s t a t e laws, is, the exemption of the individual property of the corporators
f r o m responsibility for the debts of the corporation. B u t , if the c o m m u n i t y
d e a l w i t h the bank, k n o w i n g that the capital subscribed is alone liable for its
d e b t s , no one can complain either of imposition or injury5 and, in point of
f a c t , no one ever has complained on that score, or ever will. T h e real comd u i n t against the bank, is not that it has not a sufficient basis for its c r e d i t ,
t h a t its credit is too extensive. T h e objection lies, therefore, n o t against
t h e artificial character communicated t o the stockholders by the charter, b u t
a g a i n s t the pecuniary operations of the bank itself- N o w , these operations
c o n s i s t in the use o f its own capital—a faculty not surely derived from t h e
pjovernrnent, but, in the exercise of which, the g o v e r n m e n t imposes m a n y u s e ful r e s t r i c t i o n s for the benefit of itself and of the c o m m u n i t y .
T h e committee have p r e s e n t e d this brief analysis of a bank corporation,
w i t h the view of showing t h a t there is nothing in the n a t u r e of the t h i m ^
w i n c h r e n d e r s it unfit to be an i n s t r u m e n t in the h a n d s of a Government a S -

mitted to be sovereign in its appropriate sphere, for carrying into effect p o w ers expressly delegated.
I t now remains for the committee to show that the B a n k of the U n i t e d
States is a « necessary and p r o p e r , " or in other words, a natural a n d a p p r o priate means of executing the powers vested in the Federal Government. I n
the discussion of 1791, and also in that before the Supreme Court, the p o w e r s
of raising, collecting, and disbursing the public revenue, of borrowing m o n e y
on the credit of the United States, and paying the public debt, were t h o s e
which were supposed most clearly to carry with them the incidental right of
incorporating a bank, to facilitate these operations. T h e r e can be no d o u b t ,
that these fiscal operations are greatly facilitated by a bank, and it is confidently believed that no person has presided twelve months over the t r e a s u r y ,
from its first organisation to the present time, without coming to the c o n c l u sion, that such an institution is exceedingly useful to the public finances i n
time of peace, but indispensable in time of war, B u t as this view of the q u e s tion has been fully unfolded in former discussions, familiar to the house, t h e
committee will proceed to examine the relation which the Bank of the U n i t e d
States bears to another of the powers of the Federal Government, but slightly
adverted to in former
discussions of the subject.
T h e power to ci coin money and tix the value thereof," is expressly a n d e x clusively vested in Congress. This grant was evidently intended to i n v e s t
Congress with the power of regulating the circulating medium, ** C o i n "
was regarded,
at the period of framing the constitution, as synonymous w i t h
" currency; ? ? as it was then generally believed that bank notes could only b e
maintained in circulation by being the true representative of the precious
metals. T h e word *< c o i n , " therefore, must be regarded as a particular t e r m ,
standing as the representative of a general idea. No principle of sound c o n struction will justify a rigid adherence to the letter, in opposition to the p l a i n
intention of the clause- If, for example, the gold bars of Ricardo should b e
substituted for our present coins, by the general consent of the commercial
world, could it be maintained that Congress would not have the power to wake
sucli money, and fix its value, because it is not « coined?" T h i s would be s a c r i ficing sense to sound, and substance to mere form. This clause of the C o n stitution is analagous to that which gives Congress the power " to establish
post roads.
Giving to the word " e s t a b l i s h " its restricted interpretation, a s
being equivalent to " f i x , " or « p r e s c r i b e , " can it be doubted that C o n g r e s s
has the power to establish a canal, or a river, as a post route, as well as a
road? lloads were the ordinary channels of conveyance, and the term w a s ,
therefore, used as synonymous with " r o u t e s , " whatever might be the channel of transportation, and, in like manner, " c o i n , " being the ordinary a n d
most known form of a circulating medium, that term was used as synonymous with currency.
An argument in favour of the view j u s t taken, may be fairly deduced from
the fact,"that the states are expressly prohibited from " coining money, o r
emitting bills of c r e d i t , " and from making any thing but gold and silver a
lawful tender in payment of d e b t s . " This strongly confirms the idea, that t h e
subject of regulating the circulating medium, whether consisting of coin or
paper, was, at the same time that it was taken from the control of the States*
vested in the only depository in which it could be placed, consistently w i t h
the obvious design of having a common measure of value throughout the union.
But, even if it should be conceded, that the grant of power to " coin money
and fix the value thereof," does not- in its terms, give Congress the power of
regulating any other than the " coined" currency of the Union, may not the
power of regulating anv substituted currency, and especially one which is the

p r e f e e s e d representative of coin, be fairly claimed as an incidental power—as
a n e s s e n t i a l means of carrying into effect the plain intention of the Constitut i o n , i n clothing Congress with the principal power? This power was granted
m t h e same clause with that to regulate weights and measures, and for similar
r e a s o n s . T h e one was designed to insure a uniform measure of value, as the
o t h e r w a s designed to ensure a uniform measure of quantity- T h e former is
d e c i d e d l y the more important, and belongs essentially to the General Governm e n t ? according to every just conception of our system. A currency of unif o r m v a l u e is essential to what every one will admit to be of cardinal import a n c e : t h e equal action of our revenue system, upon the different parts of the
U n i o n * T h e state of things which existed when the bank was incorporated,
f u r n i s h e d a most pregnant commentary on this clause of the constitution.
T h e c u r r e n c y of the country consisted of the paper of local banks, variously
d e p r e c i a t e d . A t one of the principal sea-ports the local currency was 20 per
c e n t * below par, N o w it was in vain for Congress to regulate the value of
c o i n , w h e n the actual currency, professing to be its equivalent, bore no fixed
r e l a t i o n to it. This great and essential power of fixing the standard of value,
w a s , i n point of fact, taken from Congress, and exercised by some hundreds
o f irresponsible banking corporations, with the strongest human motives to
a b u s e it, because their enormous profits resulted from the abuse. T h e power
o f l a y i n g and collecting imposts and excises, is expressly subject to the cond i t i o n t h a t they " shall
be uniform throughout the United S t a t e s ; " and it is
a l s o provided, that 4 t no preference shall be given, by any regulation 5 of comm e r c e , or revenue, to the ports of one state over those of another.'
w h e n i t is known that the circulating medium of Baltimore was 20 per cent.
b e l o w t h e value of the circulating medium of Boston, is it not apparent that
a n i m p o s t duty, though nominally uniform, would in effect, make a discrimina t i o n in favour of Baltimore, proportioned to the depreciation of the local curr e n c y ? Congress, therefore, not only had the power, but as it seems to the
c o m m i t t e e , were under the most solemn constitutional obligations to restore
t h e d i s o r d e r e d currency; and the bank of the United States was not only an
a p p r o p r i a t e means for the accomplishment of that end, but in the opinion of
t h e committee, the only safe and effectual means that could have been used.
T h i s view of the subject is in full accordance with the opinion of Mr* Madis o n , a s expressed in his Message of December, J 81G. " B u t , " says he, « for
t h e i n t e r e s t of the community at large, as well as for the purposes of the
T r e a s u r y , it is essential that the nation should possess a currency of equal
v a l u e , credit, and use, wherever it may circulate. T h e Constitution has ent r u s t e d Congress, exclusively, with the power of creating and regulating a
c u r r e n c y of that description, and the measures which were taken, during the
l a s t session, in execution of the power, give GYGry promise of success. T h e
h a n k of the United States, under auspices the most favourable, cannot fail to
b e a n important auxiliary."
S u c h are the authorities and such the arguments which have brought the
c o m m i t t e e to the conclusion, that the power to incorporate a bank is inc i d e n t a l to the powers of collecting and disbursing the public r e v e n u e ; of
borrowing money on the credit of the United States; of paying the public
d e b t ; and, above all, of fixing and regulating the standard of value, and
t h e r e b y insuring, at least so far as the medium of payment is concerned, the
uniformity and equality of taxation.
I I . T h e next question proposed for consideration, is the expediency of
establishing an incorporated bank, with a view to promote the great ends alr e a d y indicated. In discussing the constitutionality of such a measure, some

oF the considerations which render it expedient have been slightly unfolded*
B u t these require a more full and complete development, while others r e m a i n
to be presented.
I t must be assumed as the basis of all sound reasoning on this subject, t h a t
the existence of a paper currency, issued by banks deriving their c h a r t e r s
from the state governments, cannot be prohibited by Congress.
bank credit and bank paper are so extensively interwoven with the c o m m e r cial operations of society, that even if Congress had the constitutional p o w e r ,
it would be utterly impossible to produce so entire a change in the m o n e t a r y
system of the country, as to abolish the agency of banks of discount, w i t h out involving the community in all the distressing embarrassments u s u a l l y
attendant on great political revolutions, subverting the titles to private p r o perty. T h e sudden withdrawal of some hundred millions of bank c r e d i t ,
would be equivalent, in its effects, to the arbitrary and despotic transfer of
the property of one portion of the community to another, to the extent, p r o b a bly, of halt that amount. Whatever, therefore, may be the advantages of a
purely metallic currency, and whatever the objections to a circulating m e d i um partly composed of bank paper, the committee consider that t h e y a r e
precluded, by the existing state of things from instituting a comparison be*
iween them, with a view to any practical result.
If they were not thus precluded, and it were submitted to them as an o r i ginal question, whether the acknowledged and manifest facilities of b a n k
credit and bank paper, are more than counterbalanced by the distressing v i cissitudes in trade incident to their use, they are by no means prepared t o
say, that they would not give a decided preference to the more costly a n d
cumbersome medium.
B u t the question really presented for their determination, is not b e t w e e n
a metallic and a paper currency, but between a paper currency of uniform
value, and subject to the control of the only power competent to its r e g u l a tion, and a paper currency of varying and fluctuating value, and subject t o
no common or adequate control whatever. On this question it would s e e m
that there could scarcely exist a difference of opinion; and that this is s u b stantially the question involved in considering the expediency of a n a t i o n a l
bank, will satisfactorily appear by the comparison of a state of the c u r r e n c y
previous to the establishment ot the present bank, and its condition for t h e
last ten years.
Soon after the expiration of the charter of the first bank of the U n i t e d
States, an immense number of local banks sprung up under the pecuniary e x igencies produced by the withdrawal of so large an amount of bank credit, a s
necessarily resulted from the winding up of its concerns—au amount falling
very little short of fifteen millions "of dollars. These banks being e n t i r e l y
free from the salutary control which the bank of the United States had r e cently exercised over the local institutions, commenced that system of i m p r u dent trading and excessive issues, which speedily involved the country in all
the embarrassments of a disordered currency. "The extraordinary stimulus
of a heavy war expenditure, derived principally from loans, and a corresponding multiplication of local banks, chartered by the double score in some
of the States, hastened the catastrophe which must have occurred, at no d i s tant period, without these extraordinary causes. T h e last year of the w a r
presented the singular and melancholy spectacle of a nation abounding in
resources, a people abounding in self-devoting patriotism, and a government
reduced to the very brink of avowed bankruptcy, solely for the w a n t of a national institution, which at the same time t h a t ' i t would have facilitated t h e
government loans and other treasury operations, would have furnished a cir-


^culating medium of general credit in every part of the Union* In thi9 veiw
of t h e subject, the committee are fully sustained by the opinion of M r . Dail a s , then Secretary of the treasury, and by the concurring and almost unanim o u s opinion of all parties in Congress: for, whatever diversity of opinion
p r e v a i l e d , as to the proper basis and organization of a bank, almost every one
a g r e e d that a national bank, of some sort was indispensably necessary to resc u e t h e country from the greatest of financial calamities*
T h e committee will now present a brief exposition of the state of the cur*
r e n c y at the close of the war, of the injury which resulted from it, as well to
t h e government as to the community, and their reasons for believing that it
c o u l d not have been restored to a sound condition, and cannot now be pres e r v e d in that condition, without the agency of such an institution as the
B a n k of the United States,
T h e price current appended to this report will exhibit a scale of depreciat i o n in the local currency, ranging through various degrees to 20, and even
t o 2 5 per cent. Among the principal eastern cities, Washington and Balt i m o r e were the points at which the depreciation was greatest. T h e paper
t>f the banks in these places, was from 20 to 22 per cent, below par. At
Philadelphia, the depreciation was considerably less, though even there it
w a s 17 to 18 per cent* In New York and Charleston, it was from 7 to 10
p e r cent. But in the interior of the country, where banks were established,
t h e depreciation was even greater than at Washington and Baltimore* In
t h e w e s t e r n p a r t of Pennsylvania, and particularly at Pittsburg, it was 25
p e r cent. These statements, however, of the relative depreciation of bank
p a p e r at various places, as compared with specie, give a very inadequate idea
of t h e enormous evils inflicted upon the community, by the excessive issues of
b a n k paper. No proposition is better established than that the value of mon e y , whether it consists of specie or paper, is depreciated in exact proport i o n to the increase of its quantity, in any given state of the demand for it.
If, for example, the banks, in 1816, doubled the quantity of the circulating
m e d i u m by their excessive issues, they produced a general degradation of the
e n t i r e mass of the currency, including gold and silver, proportioned to the
redundancy of the issues, and wholly independent of the relative depreciat i o n of bank paper at different places, as compared with specie- T h e nomin a l money price of every article >vas of course one hundred per cent, higher
t h a n it would have been, but for the duplication of the quantity of the circul a t i n g medium. Money is nothing more nor le33 than the measure by which
the relative value of all articles of merchandise is ascertained. If, when the
circulating medium is fifty millions, an article should cost one dollar, it
would certainly cost two, if, without any increase of the uses of a circulating
medium, its quantity should be increased to one hundred millions. This rise
in the price of commodities, or depreciation in the value of money, as compar e d with them, would not be owing to the want of credit in the bank bills, of
which the currency happened to be composed. I t would exist, though these
bills were of undoubted credit, and convertible into specie at the pleasure of
the holder, and would result simply from the redundancy of their quantity. I t
i s important to a just understanding of the subject, that the relative depreciation of bank paper at different places, as compared with specie, should not be
confoiinded with this general depreciation of the entire mass of the circulating medium, including specie. Though closely allied, both in their causes
a&d effects, they deserve to be separately consideredT h e evils resulting from the relative depreciation of bank paper at different
places, are more easily traced to their causes, more palpable in their nature*
a n d consequently more generally understood by the community. Though

much less ruinous than the evils resulting from the general depreciation o f
S e whole currency, they are yet of sufficient magnitude to demand a full e x serious eviU already hinted at, which grew out* of the relative d e preciation of bank paper, at the different pointsof importation, was ita inevitable tendency to draw all the importations of foreign merchandise to the citie*
where the depreciation was greatest, and divert diem from those where t h e
currency was comparatively sound. If the bank of the United States had n o t
been established, and the government had been left without any alternative
but to receive the depreciated local currency, it is difficult to imagine the v e x tent to which the evasion of the revenue laws would have been carried- *- ery
state would have had an interest to encourage the excessive issues of its b a n k s
and increase the degradation of its currency, with a-view to attract foreign
commerce. Even in the condition which the currency had reached in 1816*
Boston, and New York, and Charleston, would have"found it advantageous
to derive their supplies of foreign merchandise through Baltimore; and commerce would undoubtedly have taken that direction had not the currency
been corrected. T o avoicl this injurious diversion of foreign imports, Massachusetts, and New York, and South Carolina, would have been driven, b y
all motives of self-defence and self-interest, to degrade their respective currencies at least to a par with the currency of Baltimore; and thus a rivalry
in the career of depreciation would have sprung up, to which no limit can b e
assigned* As the tendency of this state of things would have been to cause
the largest portion of the revenue to be collected at a few places, and m t h e
most depreciated of the local currency, it would have followed that a v e r y
small part of that revenue would have been disbursed at the points where i t
was collected. The government would consequently have been compelled t o
sustain a heavy loss upon the transfer of its funds to the points of expendi*
ture. The annual loss which would have resulted from these causes alone,
cannot be estimated at a less sum than two millions of dollars.
But the principal loss which resulted from the relative depreciation of b a d
paper at different places, and its want of general credit, was that sustained b y
the community in the great operations of commercial exchange. The e x t e n t
ot these operations annually, may be safely estimated at sixty millions of dollars. Upon this sum, the" loss sustained by the merchants, and planters a n d
farmers, and manufacturers, was not probably less than an average of 10 p e r
cent, being the excess of the rate of exchange beyond its natural rate in a sound
state of the currency, and beyond the rate to which it has been actually reduced
by the operations of the Bank of the United States. It will be thus perceived that
an annual tax of six millions of dollars was levied from the industrious and
productive classes, by the large monied capitalists in our commercial cities,
who were engaged in the business of brokerage. A variously depreciated
currency, and a fluctuating state of the exchanges, open a wide and abundant harvest to the money broker*; and it is not, therefore, surprising, that
they should be opposed to an institution, which, at the same time that it has
relieved the community from the enormous tax just stated, has deprived
them of the enormous profits which they derived from speculating in the business of exchange. In addition to the losses sustained by the community, in
the great operations of exchange, extensive losses were suffered throughout the
interior of the country, in all the smaller operations of trade, as well as by
the failure of the numerous paper banks, puffed into a factitious credit b y .
fraudulent artifices, and having no substantial basis of capital to insure the
redemption of their bills.
^ _
. . ,
But no adequate conception can be formed of the evils of a depreciated


c u r r e n c y , without looking beyond the relative depreciation, at different places,
to t h e ^general depreciation of the entire mass. It appears from the report
Of M r . Crawford, the Secretary of the Treasury in 1850, that during the gen e r a l suspension of specie payments, by the local banks, in the years 1815
a n d 1816, the circulating medium of the United States had reached the agg r e g a t e amount of one hundred and ten millions of dollars, and that, in the
y e a r 1819, it had been reduced to forty-five millions of dollars, being a red u c t i o n of fifty-nine per cent, in the short period of four years. T h e comm i t t e e are inclined to the opinion, that the severe and distressing operation of
r e s t o r i n g a vicious currency to a sound state, by the calling in of bank paper,
-and t h e curtailment of bank discounts, had carried the reduction of the curr e n c y , in 1819, to a point somewhat lower than was consistent with the just
r e q u i r e m e n t s of the community for a circulating medium, and that the bank
d i s c o u n t s have been gradually enlarged since that time, so as to satisfy those
requirements. It will be assumed, therefore, that the circulating medium of
t h e United States has been fifty-five millions of dollars for the last ten years,
t a k i n g the average.
E v e n upon this assumption it will follow, that the national currency has
b e e n one hundred per cent, more valuable for the last ten years, than it was
in 1816. In other words, two dollars would purchase no more of any comm o d i t y in 1816, than one dollar has been capable of purchasing at any time
s i n c e 1819. I t is obvious, therefore, that the depreciation of the paper of
p a r t i c u l a r banks, at any particular time, as compared with specie, furnishes
no criterion by which to ascertain the general depreciation ot the whole curr e n c y , including specie, as compared with the value of that currency at a diff e r e n t period, A specie dollar in 1816, would purchase no more than half
as m u c h as a paper dollar will purchase at present.
H a v i n g endeavoured to explain, thus briefly, the general depreciation resulti n g from a redundant currency, the committee will now proceed to point out
s o m e of the injurious consequences which have resulted from those great
changes in the standard of value, which have been unavoidably produced by
the correction of the redundancy.
A n individual who borrowed a sum of money in 1816, and paid it in 1820,
evidently returned to the lender double the value received from himj and one
who paid a debt in 1820, which he had contracted in 1816, as evidently paid
d o u b l e the value he had stipulated to pay, though nominally the same amount
in money- I t is in this way that fluctuations in the quantity and value of
t h e currency interfere, in the most unjust and injurious manner, between
debtor and creditor.
A n d when banks have the power of suspending specie payments, and of arbitrarily contracting and expanding their issues, without any general control,
they exercise a more dangerous and despotic power over the property of the
community, than was ever exercised by the most absolute government. In
such a state of things, every man in the community holds his property at the
m e r c y of money making corporations, which have a decided interest to abuse
their power*
B y a course of liberal discounts and excessive issues for a few years, followed by a sudden calling in of their debts and contraction of their issues, they
would have the power of transferring the property of their debtors to themselves, almost without limit. Debts contracted when their discounts were liberal, and the currency of course depreciated, would be collected when their
discounts were almost suspended, and the currency of course unnaturally appreciatcdj and in this way the property of the community might pass under

the hammer, from its rightful o w n e r s to the banks, for less than o n e h a l f i t *
intrinsic valueIf the committee have not greatly mistaken the m a t t e r ^ t h e r e
is more of history than of speculation in what they have here p r e s e n t e d t o t h e
consideration of the H o u s e .
I t is impossible to form a n y thing like an accurate estimate of t h e i n j u r i e s
and losses sustainetl by the community, in various w a y s , b y the d i s o r d e r s a n d
fluctuations of the currency, in the period which intervened b e t w e e n t h e e x piration of the old bank charter, and the establishment of the p r e s e n t bs^nk.
B u t some tolerable notion may be formed of the losses sustained b y t h e g o v e r n m e n t , in its fiscal operations, during the war.
T h e c o m m i t t e e have given this part of the subject an attentive a n d c a r e f u L
examination, and they cannot estimate the pecuniary losses of the g o v e r n m e n t *
Sustained e x c l u s i v e l y for the want of a sound currency, and an efficient s y s t e m
of finance, at a sum less than forty-six millions of dollars* I f they s h a l l m a k e
this apparent, the H o u s e will have something like a standard for e s t i m a t i n g
the individual losses of the community.
T h e government borrowed, during the short period of the war, e i g h t y m i l .
lions of dollars, at an average discount of fifteen per cent, giving c e r t i f i c a t e s
o f stock, amounting to eighty millions of dollars, in exchange for s i x t y - e i f f h t
millions of dollars, m such bank paperas could be obtained. I n this s t a t e m e n t ,
treasury notes are considered as stock, at t w e n t y per cent, discount. U p o n t h e
very lace ot the transaction, therefore, there was a loss of t w e l v e m i l l i o n s o f
dollars, which w o u l d , in all probability, have been s a v e d , if the T r e a s u r y had
b e e n aided by such an institution as the B a n k of the U n i t e d States. B u t t h e s u m
• f 1 * 1 ^- 6 ^ 1 millions of dollars, received b y the government, w a s i n a d e p r e ciated currency, not more than half as valuable as that in which the s t o c k e r v e n
i!r ? £ c h a n £ e f o r ?*;. h a s b e e n a n d w i U be redeemed. H e r e , then, is a n o t h e r l o s s
ot thirty-four millions, resulting, incontestibly and e x c l u s i v e l y , from t h e d e E T ^ V l ? « « « 5 e i C n r r e n < £ ^ d m a k i n S * w i t h the sum lost b y the d i s c o u n t , f o r t y S r ? w E 1 dollar*. W h i l e , ^ e n , the government sustained this g r e a t p e c u ™ S n t e ™ « S ; M T h i e e y e a r S ° W a r ' a m « « " t i n g annually to m o r e t h a n t h e
,n 1
X T e r T t C nor.l
J .™ ° f P « W \ t ™ worth while t o i n q u i r e ,
of t h e T u r r t J £ ^ win K P f
f d to this enormous amount by the d e r a n g e m e n t
the n e c L s ^ s y ; , f f l T
&»««"! that the whole benefit of this s p e c u l a t i o n u p o n
• k e i i T e ^ e r v « m ^ f ° v e r ? m e n t w a s ™ K z e d by stockjobbers and m o n e y DVOa
have the same i n t e ^
»d wh°
uricnce ot
lift cm+;™i ^ ^u™;,*;
• Vt V those disorders as l a w y e r s h a v e in
i £ S ^nV«l ? *i
M » ? « »C X , s the
human frame. H a v i n g p r e s e n t e d
Lt a Tt CU %lt-1UCH
Previous to the e s t a b l i s h m e n t of
e ? ?n i%
f , w v ' 'J* !- \
«? . f'
™ ™ f«r the committee to i n q u i r e how
tar this institution has eflected a r e m e d y of those e v i l s .
- i 7 ? i e f i r S t s r C i a t f l u e f t i o n w h i c h a i i s o s under this branch of the i n q u i r y is,
wnether or no the bank has corrected the disorders of the c i r c u l a t i n g m e d i u m ,
o y providing a paper currency, convertible into specie at the p l e a s u r e o f the
T h r ' i ^ r d ° f e q " f t l v a l u c v v i t h 9P ec ^c at all points of the U n i o n ?
Xhe Chief Magistrate, in that part of his first message which r e l a t e s t o the
+ ot the U n i t e d States, expresses the opinion, that " i t has f a i l e d i n the
great end of establishing a uniform and sound c u r r e n c y . " After g i v i n g t o thU
opinion all the consideration to which it is so j u s t l y entitled, from t h e e m i n e n t
station and high character of the c i t i x e n b y whom it is entertained, t h e committee are constrained to express their respectful b u t d e c i d e d d i s s e n t f r o m it.
I t i s true, that the bank d o e s not, in all c a s e s , redeem the billa i s s u e d b y any

o n e of* i t s branches, indiscriminately at all the other branches; and it is in ref e r e n c e t o this fact, as the committee presume, that the President expresses the
o p i n i o n that the institutition has failed to establish " a uniform and sound
I t i s confidently believed, that no one of the persons who were principally
i n s t r u m e n t a l in establishing the bank, ever entertained an idea that it woula
a t t e m p t to redeem its bills at any of its offices, other than those by which they
s h o u l d b e respectively issued. The charter certainly contains no such req u i r e m e n t , and it would have been highly inexpedient if it had, to say nothing
of i t s obvious injustice. T h e inevitable effect of such a requirement, woula
h a v e b e e n to compel the bank to perform the whole of the commercial exchang e s of t h e country, without any compensation- I t would not be more unjust
t o r e q u i r e a Rail^Road Company to transport all the productions of the count r y w i t h o u t compensation. No institution could stand such an operation; and
i t w a s t h e injudicious attempt of the first direction of the bank to do it, that
p r i n c i p a l l y contributed to the embarrassments of 1819. A committee was
a p p o i n t e d by the House of Representatives, in that year, to investigate the
m a n a g e m e n t of the bank; and in the report of that committee, as well as in
t h e discussions to which it gave rise in the House, this attempt of the direct i o n t o redeem the bills of the institution, indiscriminately, at all its branches,
w a s indicated as one of the causes of the existing embarrassment. N o
€Hi& w h o participated in the debate, pretended to allege that the bank was
b o u n d to redeem its bills indiscriminately, or that it was expedient that it
s h o u l d d o so. The most that any one did, was to apologise for the unwise


B u t i t ^ e t remains for the committee to show that this indiscriminate red e e m a b i h t y of the bills of all the branches of the bank, is not necessary to
** t h e establishment of a uniform and sound c u r r e n c y . "
H u m a n wisdom has never effected, in any other country, a nearer approach
to uniformity in the currency, than that which is made by the use of the
p r e c i o u s metals. If, therefore, it can be shown that the bills of the United
S t a t e s Bank, are of equal value with silver at all points of the Union, it would
s e e m t h a t the proposition is clearly made out, that the bank has accomplished
" t h e g r e a t end of establishing a uniform and sound currency." It is not denied t h a t the bills of the mother bank, and of all its branches, are invariably
a n d promptly redeemed in specie, whenever presented at the offices by which
t h e y have been respectively issued, and at which, upon their face, they purport t o be payable. Nor is it denied that the bills of the bank, and of all the
Branches, are equal to specie in their respective spheres of circulation. Bills,
for example, issued by the mother bank, are admitted to be equal to silver in
Pennsylvania, and all those parts of the adjacent states of which Philadelphia
is the market. B u t it is contended that these hills, not being redeemable at
Charleston and New Orleans, are not of equal value with silver to the merc h a n t who wishes to purchase cotton with them, in those cities. Now, if the
Philadelphia merchant had silver, instead of bank bills, he certainly could not
effect his purchases with it in Charleston or N e w Orleans, without having the
silver conveyed to those places; and it is equally certain that he could not
have it conveyed there, without paying for its transportation and insurance- —
T h e s e expenses constitute the natural rate of exchange between those cities,
and indicate the exact sum which the merchant would give as a premium for a
bill of exchange, to avoid the trouble and delay of transporting his specie- I t
is obvious, therefore, that, even for these distant operations of commerce, silver would be no more valuable than the bills of the bank: for these would


purchase a bill of exchange on either of the cities mentioned, p r e c i s e l y a s well
as silver. IF the operation should be reversed, and the planter of L o u i s i a n a
or South Carolina should desire to place his funds in Philadelphia w i t h a view
to purchase merchandise, he would find the bills of thg branch b a n k in either
of those States, entirely equivalent to silver in effecting his object.
therefore, if the bank had not reduced the rate of the exchanges, i t m i g h t be
safely asserted, that its bills would be of equal value with silver a t every
point in the Union, and for every purpose, whether local or general.
But it is impossible to exhibit any thing like a j u s t view of the beneficial
operations of the bank, without adverting to the great reduction i t h a s effected, and the steadiness it has superinduced, in the rate of the c o m m e r c i a l exchanges of the country. Though this branch of the business of t h e b a n k has
been the subject of more complaint, perhaps, than a n j other, the C o m m i t t e d
have no hesitation in saying, it has been productive of the most signal benefits
to the community, and deserves the highest commendation. I t has b e e n already stated that it has saved the community from the immense losses r e s u l t i n g
from a high and fluctuating state of the exchanges- I t now r e m a i n s t o show
its effect in equalizing the currency. In this respect, it has been p r o d u c t i v e
of results more salutary than were anticipated by the most sanguine advocate*
of the policy of establishing the bank. It has actually furnished a
medium more uniform than specie. This proposition is susceptible o f the
clearest demonstration. If the whole circulating medium were specie, a p l a n t s
ol Louisiana, who should desire to purchase merchandise in Philadelphia*
would be obliged to pay one per cent, either for a bill of exchange o n this
latter place, or for the transportation and insurance of his specie. H i s specie
at N e w Orleans, where he had no present use for it, would be w o r t h o n e per
cent, less to him than it would be in Philadelphia, where he had a d e m a n d
for it. But, by the aid of the bank of the United States, one half of t h e expense of transporting specie is now saved to him. T h e bank, for o n e half
of one per cent, will give him a draft upon the mother bank of P h i l a d e l p h i a ,
with which he can draw either the bills of that bank, or specie, a t his pleasure. I n h k e manner, the bank and its branches will give draughts from any
point of the Union to any other where offices exist, at a per centage g r e a t l y
less than it would cost to transport specie, and in many instances a t p a r .
the merchant or planter, however, does not choose to purchase a d r a u g h t from
the bank, but prefers transmitting the bills of the office where he r e s i d e s to
any distant point, for commercial purposes, although these bills a r e not
strictly redeemable at the point to which they are transmitted, y e t , a s they
are receivable in payment of all dues to the government, persons will b e generally found willing to t a k e them at par; and if they should not, the b a n k will
receive them frequently at par, and always at a discount much less t h a n would
pay the expense of transporting specie. T h e fact that the bills of t h e bank
and its branches are indiscriminately receivable at the custom-houses a n d land
offices, in payment of duties, and for the public lands, has an effect in giving
Uniformity to the value of these bills, which merits a more full a n d d i s t i n c t
For all the purposes of the revenue, it gives to the national c u r r e n c y that
perfect uniformity, that ideal perfection, to which a currency of gold a n d sil~
ver, in so extensive a country, could have no pretentions* A bill i s s u e d at
Missouri is of equal value with specie at Boston, in payment of d u t i e s ; and
the same is true of all other places, however distant, where the b a n k issue*
bills, and the government collects its revenue- W h e n it is, moreover, considered, that the bank perforins with the most scrupulous p u n c t u a l i t y , the


stipulation to transfer the funds of the government to any point where they
tray b e wanted, free of expense, it must be apparent that the committee are
c o r r e c t ,16111
to the
very letter, in stating that the bank has furnished, both to the
a n d to
the*people, a currency of absolutely uniform value in all
places- for all thepurposes of paying the public contributions, and disbursing
the public revenue. And when it is recollected that the government annually
c o l l e c t s and disburses more than twenty-three millions of dollars, those who
are a t all familiar with the subject will at once perceive that bills which are of
absolutely uniform value for this vast operation, must be very nearly so for all
the purposes of general commerce.
U p o n the whole, then, it may be confidently asserted, that no country in
the w o r l d has a circulating medium of greater uniformity than the United
S t a t e s ; and that no countrv of any thing like the same geographical extent
ha» a currency at all comparable to that of the United States on the score ot
uniformity. The committee have seen the statement of an intelligent traveller,
who h a s visited almost every part of Europe, exhibiting the great variations
of the currency in different parts of the same empire or kingdom. In Russia,
the bills1 of the bank of St. Petersburg!! have a very limited circulation. At
Riga, a* " throughout Courland, Livonia, and all the Southern parts of the
empire, the currency is exclusively of silver coins. In Denmark, the notes
of the bank of Copenhagen are current only in Zealand, the other islands, and
Jutland, but will not pass at all in Sleswick and Holstein, which constitute
the best portion of the kingdom. Since the Congress of Vienna, Germany is
divided into thirty-nine separate States, each having a distinct currency,
though represented in the Diet at Frankfort. Out of the territory m which
these several currencies are issued, they are mere articles of merchandise; which circumstance has given rise in every town to a numerous
and distinct class of tradesmen, called money changers. How far those
separate and unconnected currencies have a tendency to embarrass comm e r c e , may be inferred from the fact, that a traveller going from St. Petersburgh to Calais Avill lose upon the unavoidable changes of money an everage of six per cent. In France, the bills of the bank are of such large denominations as to be adapted only to the greater operations of commerce, anil
are principally confined to the Bankers and extensive traders in-Parts. The
general currency is silver? and to avoid the trouble of carrying this to distant
parts of the kingdom, gold pieces, or bills of exchange, which are preferable,
are purchased at a premium of from one and a half to four per cent. After
this brief review of the currencies of Europe, the committee will barely state,
as a conclusive vindication of our currency from the imputation of unsoundness, t h a t there is no point in the Union, at which a bill of the United States
Bank, issued at the opposite extremity of the country, is at a discount of more
than one-fourth of one per cent.
I n confirmation of the views here presented, as to the comparative uniformity of the currency furnished by the bank, and, also, as to the obligation of
the bank to redeem its bills, indiscriminately, at all the offices, the committee
will present a few brief extracts from the speech of a statesman, whose opinions
have every title- to authority on these important subjects. M r . Lowndes,
in discussing the question, how far the bank had performed the great duty for
wh'tch it was created, used the following decided language in 1819, when the
currency had not reached the point of uniformity it has now attained by one
of one per cent.
T h e great object of the government, in chartering the bank, was to provide
a currency which should have that degree of stability and uniformity in its

value whifch is required by the interests both of our commerce and r e v e n u e . —
A currency, equall y valuable at every place and every time, cannot be provided by human wisdom. T h e nearest approach to this object has been generally supposed to be afforded by the employment of gold and silver as the measures of value. The 14th Congress did not aim at ideal perfection; t h e y
wished to combine with the conveniences of bank circulation an uniformity
of value equal to that which was possessed bv the precious metals; and t h e
means which they employed to secure this uniformity were simple and effectual, by enjoining, under a heavy penalty, the payment of all its notes in coin
upon demand* In the report, indeed, the notes of the national bank are said
to be now ' on the same footing with those of local banks.' Of the footing b n
which local bank notes stood, he should speak hereafter; but the price c u r r e n t
upon his table informed him, that the greatest discount on branch notes of
the United States, was three-fourths of one per cent. This was a value much
more uniform than that which coin could be expected to have in so extensive
a country- H e had been lately looking into a book on political economy,
which had been published here, with high, and, in respect to its clearness a n d
precision, with just commendations—the work of Mr, T r a c y . H e inferred
from one of his chapters, that the difference of exchange between Marseilles
and Paris was often from two to three per cent. If, with all the facilities
afforded by the internal improvements in which France is so rich, with a currency consisting almost exclusively of gold and silver, the variation in the value
of money is three times greater in her territory than on our continent^ can it
be said, that, in this respect, the bank has not fulfilled the objects of its institution? Before its establishment, the value of bank notes, even in the commercial
States, had varied twenty per cent, from each other; and, as none of
^ m t > ° r e a .** xe<1 proportion to the precious metals, or to any natural standard, it was impossible to assign any limit to their depreciation. You have
reauired that the currency furnished by the national bank should be every
into silver, and it is so. You have expected that it should
? e ar e3 u ]l V
and it is more so. He would not detain the committee
°y % i n S a paper, which he had prepared with that intention, containing the
state ot exchange, since the establishment of the bank, with England, F r a n c e ,
ana Holland, for he found himself occupving much more of their time than he
naa expected. But he believed that any member, who should turn his attention to the subject, would remark its "steadiness during that period. H e
thought himset justified in drawing from this fact a conclusion highly favourable to the b a n k . "
In reference to the great depreciation of the paper of the local banks, previous to the estabhsment of that of the United States, he said;
" Did the interests or duty of the government of the United States permit
that this currency should be received by it? Some dissatisfaction was expressed because the branch notes of the United States Bank were at a discount
of three-fourths of one per cent. H e read from a price current the state of
the market for bank notes, by which it appeared that notes, which were insisted to be in very good credit, varied from a discount of two and a half to
one of seven, fifteen, twenty-five, and even thirty per cent. W a s our revenue to be received in these notes? How were they to be employed? T h e y
might be expended in the district in which they were issued. But was the
expenditure of every district to be exactly limited to its revenue? W h a t became of the Union if it were so? He spoke of the thing, and not the name.
Our Union might dissolve in imbecility as well as be destroyed by violence*—
Did not union imply, that the resources of one state, its money as well as its
men, might be employed for the defence of another?

* * B u t , if the g o v e r n m e n t w e r e willing to bear t h e loss of a d e p r e c i a t e d a n d
u n e q u a l c u r r e n c y , it m u s t n e g l e c t t h e plainest p r i n c i p l e of t h e Constitution
in d o i n g s o — e q u a l i t y of t a x a t i o n . T h e c o m m i t t e e m u s t *well r e m e m b e r ,
t h a t , before t h e establisliment of the national b a n k , such w a s t h e u n e q u a l
v a l u e of c u r r e n c y in the different s t a t e s , t h a t the m e r c h a n t s paid d u t i e s ,
v a r y i n g fifteen p e r c e n t , from each other on t h e same a r t i c l e s . ' V
O n the question, w h e t h e r the b a n k was b o u n d to r e d e e m , i n d i s c r i m i n a t e l y ,
t h e b i l l s of all its b r a n c h e s , he said:
« H e should not argue t h a t the bank w a s n o t bound to pay its n o t e s , i n d i s c r i m i n a t e l y , a t all its offices. H e believed t h a t nobody now c o n t e n d e d t h a t it
I t was no unfair a c c o u n t of t h e p r a c t i c a l opera*
t i o r r of the system of which he was s p e a k i n g , to say t h a t it gave to the b r a n c h e s
w h e r e t h e exchange was unfavourable, t h e e n t i r e disposition of t h e specie
o f t h o s e b r a n c h e s w h e r e t h e exchange w a s favourable. U p w a r d s of
s i x millions of specie have been s e n t to t h e b r a n c h of N e w Y o r k , besides
t h e a m o u n t which has been paid by the s u b s c r i b e r s of the b a n k t h e r e ; but, in
i s s u i n g notes which the bank of N e w York has been obliged to r e d e e m , e v e r y
b r a n c h t h r o u g h o u t t h e c o u n t r y has d r a w n upon a fund, with whose condition
a t t h e t i m e it could not be a c q u a i n t e d . "
** S u c h a system might be e x p e c t e d to p r o d u c e i n c o n v e n i e n t c h a n g e s in t h e
d i s t r i b u t i o n of b a n k capital, an e x t r e m e facility of o b t a i n i n g loans a t one
t i m e , a n d expected c o n t r a c t i o n s of d i s c o u n t a t a n o t h e r . "
** W h e n e v e r the s t a t e of exchange is unfavourable, w h e n e v e r the j u s t p r i n c i p l e s of b a n k i n g r e q u i r e a r e d u c t i o n of d i s c o u n t s , t h e n , u n d e r this s y s t e m of
i n d i s c r i m i n a t e p a y m e n t of its n o t e s , t h e b a n k has n o t h i n g to fear from a
d r a u g h t of specie, and is encouraged to l e n d to every a p p l i c a n t .
t h e exchange is favourable, and on the sound p r i n c i p l e s of b a n k i n g , a n enlarged
a c c o m m o d a t i o n might be given to t h e c o m m u n i t y — t h e r e t h e flow of notes
f r o m every state whose exchange is u n f a v o u r a b l e , c o n t r a c t s or s u s p e n d s all
t h e operations of t h e bank. T h u s , w h e r e v e r d i s c o u n t s should b e e n l a r g e d ,
t h e t e n d e n c y of this s y s t e m is to r e d u c e t h e m , a n d to e n l a r g e t h e m w h e r e v e r
t h e y should be r e d u c e d / 5
I n d e p e n d e n t l y of t h e gross injustice of r e q u i r i n g t h e b a n k t o perform all
t h e e x c h a n g e s of this extensive confederacy w i t h o u t a n y c o m p e n s a t i o n , these
e n l i g h t e n e d views show most conclusively its i n e x p e d i e n c y a n d injustice, as
i t r e g a r d s t h e different sections of t h e U n i o n . I t w o u l d inevitably r e n d e r
t h o s e p a r t s of the U n i o n w h e r e the bank issues w e r e p r u d e n t and m o d e r a t e ,
t r i b u t a r y to those w h e r e the issues w e r e injudicious a n d excessive. I n this
w a y , t h e v e r y i n e q u a l i t y in t h e c u r r e n c y , w h i c h t h e b a n k w a s d e s i g n e d t o
c o r r e c t , would be p e r p e t u a t e d by t h e vain a t t e m p t to m a k e it perform impossib i l i t i e s . T h e power of a n n i h i l a t i n g space, of t r a n s p o r t i n g m o n e y or a n y
o t h e r a r t i c l e to the most d i s t a n t points, w i t h o u t the loss of t i m e or t h e a p p l i c a t i o n of labour, belongs to no human institution*
B u t t h e s a l u t a r y a g e n c y of the b a n k of t h e U n i t e d S t a t e s , in f u r n i s h i n g a
s o u n d a n d uniform c u r r e n c y , is n o t confined to t h a t portion of t h e c u r r e n c y
w h i c h consists of its own bills. One of t h e most i m p o r t a n t p u r p o s e s w h i c h
t h e b a n k w a s designed to accomplish, a n d which? i t is confidently b e l i e v e d ,
n o o t h e r h u m a n a g e n c y could have effected, u n d e r o u r f e d e r a t i v e s y s t e m of
g o v e r n m e n t , w a s the e n f o r c e m e n t of specie p a y m e n t s on t h e p a r t of n u m e r o u s
l o c a l b a n k s , d e r i v i n g their c h a r t e r s from t h e several s t a t e s , a n d w h o s e p a p e r
i r r e d e e m a b l e in specie, and illimitable in its q u a n t i t y , c o n s t i t u t e d t h e a l m o s t
e n t i r e c u r r e n c y of the c o u n t r y . A m i d s t a c o m b i n a t i o n of t h e g r e a t e s t diffic u l t i e s , t h e bank has almost c o m p l e t e l y s u c c e e d e d i n t h e performance of t h i s


arduous, delicate, and painful dutv. W i t h exceptions, too i n c o n s i d e r a b l e - t o
merit notice, all the state banks in~the Union have resumed specie p a y m e n t s .
T h e i r bills, in the respective spheres of their circulation, are of e q u a l v a l u e
with gold and silver; while, for all the operations of commerce, b e y o n d t h a t
sphere, the bills or the checks of the hank of the United States ai-e e v e n m o r e
valuable than specie. And even in the very few instances in which t h e p a p e r
of state banks is depreciated, those banks are winding up their c o n c e r n s ; a n d
it may be safely said, that no citr/.en of the Union is under the n e c e s s i t y of
taking depreciated paper, because a sound currency cannot be obtained. . N o r t h
Carolina is believed to be the only state where paper of the local b a n k s i s i r r e deemable in specie, and consequently depreciated- Even there, the d e p r e c i a t i o n
is only one or two per cent*, and what is more important, the p a p e r of the
Bank of the United States can be obtained by all those who desire i t , a n d have
an equivalent to give for it* T h e committee are aware, that the o p i n i o n is
entertained by some, that the local banks would, at some time or o t h e r , e i t h e r
voluntarily, or by the coercion of the state legislatures, have r e s u m e d s p e c i e
payments. In the very nature of things this would seem to be an i m p o s s i b i l i ty. I t must be remembered that no banks ever made such larjre d i v i d e n d s
as were realised by the local institutions, during the suspension of spetrie p a y m e n t s . A rich and abundant harvest of profit was t h e m , w h i c h
the resumption of specie payments must inevitably blast- W h i l e p e r m i t ted to give their own notes, bearing no interest, and not redeemable i n s p e c i e ,
ih exchange for better notes beariiig interest, it is obvious, that the m o r e p a p e r
they issued, the higher would be their profits. T h e most powerful m o t i v e
that can operate upon inonied corporations, would have existed, t o p r e v e n t
the state banks from putting an end to the very state of things, from w h i c h
their excessive profits proceeded. Their very nature mustbave been c h a n g e d ,
therefore, before they could have been induced to co-operate, voluntarily* in
the restoration of the currency. I t is quite as improbable that the s t a t e legislatures would have compelled the banks to do their duty. I t has a l r e a d y
been stated that the tendency of a depreciated currency to a t t r a c t i m p o r t a tions to the points of greatest depreciation, and to lighten the relative burthens of federal taxation, would naturally produce, amonu; the states, a r i v a l r y
in the business of excessive bank issues. But there remains to be s t a t e d a
cause, of more general operation, which would have prevented the interposition of the state legislatures to correct those issues.
T h e banks were, directly and indirectly, the creditors of the whole community, and the resumption of specie payments necessarily involved a general
curtailment of discounts, and withdrawal of credit, which would p r o d u c e a
general and distressing pressure upon the entire class of debtors. T h e s e constituted the largest portion of the population of all the states where specie
payments were suspended, and bank issues excessive. Those, therefore,
who controlled public opinion in the states, where the depreciation of the local
paper was greatest, were interested in the perpetuation of the evil. Deep
and deleterious, therefore, as the disease evidently was. in many of t h e s t a t e s
their Legislatures could not have been expected to apply a remedy, so i>ainfui as the compulsion of specie payments would have been, without the aid of
the Bank of the United States. And here it is worthy of special r e m a r k , that,
while that bank has compelled the local banks to resume snecie p a y m e n t s , it
has most materially contributed, by its direct aid and liberal a r r a n g e m e n t s , to
enable them to do so, and that with the least possible embarrassment to theimselves, and distress to the community. If the State Legislatures had been
ever so anxious to compel the banks to resume specie payments, a n d the
banks ever so willing to make the effort, the committee are decidedly ot the


o p i n i o n that thev could not have done it, unaided by the Bank of the United
S t a t e s , without "producing a degree of distress incomparably greater than has
b e e n actually experienced. They will conclude their remarks on this branch
o f t h e subject by the obvious reflection, that, if Congress, at the close of the
w a r , h a d left it to the states to restore the disordered currency, this import a n t function of sovereignty would have been left with those from whom the
C o n s t i t u t i o n has expressly taken it, and by whom it could not be beneficially or
effectually exercised. But another idea, of considerable plausibility, is not witho u t i t s advocates. I t is said that this government, by making the resumption and
c o n t i n u a n c e of specie payments the condition upon which the state banks
s h o u l d receive the government deposites, might have restored the currency
t o a s t a t e of uniformity. Without stopping to give their reasons for believing
t h a t specie payments could not have been restored in this way, and that, even
if t h e y could, a uniform currency of general credit, throughout the Union,
w o u l d not have been provided, the committee will proceed to give their reas o n s for thinking that such a connexion between the Federal Government
a n d t h e State banks would be exceedingly dangerous to the purity of both.—W h i l e there is a National Bank, bound by its charter to perform certain stip u l a t e d duties, and entitled to receive the government deposities as a comp e n s a t i o n , fixed by the law creating the charter, and only to be forfeited by
t h e failure to perform those duties, there is nothing in the connexion at all
inconsistent with the independence of the bank, and the purity of the government.
T h e country has a deep interest that the bank should maintain specie paym e n t s ; and the government an additional interest that it should keep the public f u n d s safely, and transfer them, free of expense, wherever they may be
w a n t e d . T h e government, therefore, has no power over the bank, but the
s a l u t a r y power of enforcing a compliance with the terms of its charter. Every
t h i n g is fixed by the law, and nothing left to arbitrary discretion. I t is true
t h a t t h e Secretary of the Treasury, with the sanction of Congress, would
h a v e t h e power to prevent the bank from using its power unjustly and oppress i v e l y , and to punish any attempt, on the part of the Directors, to bring the
e c u n i a r y influence of the institution to bear upon the politics of the country,
y withdrawing the government deposites from the offending branches. B u t
this power would not be lightly exercised by the treasury, as its exercise
w o u l d necessarily be subject to be reviewed by Congress.
I t is, in its
n a t u r e , a salutary corrective, creating no undue dependence on the part of
t h e bank.
B u t the state of things would be widely different, if there was no JVational
b a n k , and it was left to the discretion of the Secretary of the Treasury to
select the local banks in which the government deposites should be m a d e All the State banks would, in that case, be competitors for the favour of the
t r e a s u r y ; and no one, who will duly consider the nature of this sort of patrona g e , can, fail to perceive, that, in the hands of an ambitious man, not possessed of perfect purity and unbending integrity, it would be imminently dangerous to the public liberty. T h e State banks would enter the lists of political controversy, with a view to obtain this patronage; and very little sagacity
is required to foresee, that, if there should ever happen to be an administration disposed to use its patronage to perpetuate its power, the public funds
would be put in jeopardy by being deposited in banks unworthy of confidence, and the most extensive corruption brought to bear upon the elections
throughout the Union. A state of things more adverse, to the purity of the
government—a power more liable to be abused—can scarcely be imagined.—
If five millions of dollars were annually placed in the hands of the Secretary
of the Treasury, to be distributed at his discretion, for the purpose of inter-


nal improvement, it would not invest him with a more dangerous a n d c o r r u p t ing power, ^
In connexion with this branch of the subject, the committee w i l l briefly
examine the grounds of a complaint, sometimes made against the b a n k o f the
United States. It is alleged that this bank, availing itself of the g o v e r n m e n t
deposites, consisting in some places principally of local paper, m a k e s heavy
and oppressive draughts on the local banks for specif, and thus c o m p e l s them
to curtail their discounts, to the great injury of the community* I n t h e first
place, it is to be remarked, that one of the highest duties of the b a n k - the
great object for which it was established—was to prevent the excessive issues
of local paper; and this duty can only be performed, by enforcing u p o n the
State banks the payment of specie for any excess in their issues.
B u t the
committee are induced to believe, that this complaint is principally owing,* so
far as it now exists, to the fact, that the operations of the Federal T r e a s u r y
are mistaken for the operations of the bank, because the bank is the a g e n t by
whom those operations are performed. This institution receives the government deposites in the paper of the local banks, certainly in no spirit o f hostility to those banks. On the contrary, it tends to give them credit, a n d is
designed to have that effect- But the bank of the United States is n o t only
bound to pay in specie, or its own bills, what it receives for the g o v e r n m e n t
in local paper, but to transfer the funds to any part of the Union, w h e r e they
may be required for disbursement* Let it be assumed, that the g o v e r n m e n t
collects annually, at the customhouse in Charleston, one million of dollars
in local bank notes, and disburses in South Carolina only one hundred thousand, it would result from this, that the government would have n i n e hundred th
ousand dollars of local bank paper deposited in the Charleston, branch,
which the bank would be bound by its charter, and for the national benefit, to
transfer perhaps to Washington or Norfolk. As this paper w o u l d not
answer the purposes of the government at those places, the bank would b e , of
course, compelled to provide specie, or bills that will command specie at those
It is obvious, then, that it is the inequality in the collection a n d dts^?, e „ molle l ?i "} f - e £ : v e n u e ' t h » t produces the evil in question. If all t h e re- '
l ^ Uf ecte
d i n Charleston were disbursed in the State, no draughts would
f a r ^ , ^ ™, n s ^ e u ,sot lc a lo, bb annok . s, o fuor
specie. The Bank of the United S t a t e s , so
J. 70 l 1 e T? i e a ss ut or any complaint on this score, has greatly
". ^
y "Pon the local banks, by means of t h i
libeial arrangements which its large capital and numerous 'branches have
enabled it to make with them. The decree in which that institution has reduced the rate of exchange, may be fairly assumed as that in which it has
mitigated the action of the Treasury upon "the State banks. If, for example,
there existed no national bank, and the deposites of the revenue collected in
Charleston were made in one of the local banks, what would be the eftect of
transferring, annually, nine hundred thousand dollars to Washington or N o r folk? The local banks, havi ng no branches at either of those places, instead
of transmitting draughts, as is now generally done, would he compelled to
specie. The bank in which the government depositee were made,
? u ^ c o n s e <Juently be under the necessity of demanding specie from all the
other banks, m a manner, and to an extent, much more oppressive than any
thing that can be imputed to the Bank of the United States- If, to avoid
these specie draughts, the local banks should purchase bills on Washington
or Norfolk, they would probably cost five or six per cent, even in a tolerable
state of the currency, which would be a loss to the banks almost to the full
extent of the premium.
Although the expediency of renewing the charter of the present bank ia

n o t a question now submitted for the decision of Congress, the Committee
c o n s i d e r it so far involved in the matter referred to them, as to render it their
d u t y t o present some considerations bearing on that question, in addition to
w h a t t h e y have said on the general expediency of maintaining such an institut i o n . I t a national bank, similar to the present, be a necessary and proper
a g e n t for the accomplishment of the great purposes heretofore indicated,
t n e o n l y remaining question would seem to be, whether the charter of the
- p r e s e n t stockholders should be renewed, or a new set of stockholders incorporated.
I n considering this question, Congress will, of course, be governed in some
d e g r e e , by the terms on which the present stockholders will agree to accept a
r e n e w a l of their charter. But, as the committee have satisfactory reasons for
b e l i e v i n g that terms eminently advantageous to the government can be obtaine d , t h e y will proceed to some other inquiries. W h a t then would be the eff e c t o f refusing to renew the present charter? And, in the first place, what
a r e t h e inducements for pursuing that coarse?
I t i s sometimes alleged that the present stockholders are large capitalists,
a n d , a s the stock of the bank is some 20 per cent- above par, that a renewal
o f t h e charter would be equivalent to a grant to them of 20 per cent, upon
t h e i r capital. I t is true that a small proportion of the capital of the company
b e l o n g s to very wealthy men. Something more than two millions of that owne d i n t h e United States belongs to persons holding upwards of one hundred
t h o u s a n d dollars each. I t is also true that foreigners own seven millions, or
o n e fifth of the capital. B u t , on the other hand, it is to be remarked, that the
g o v e r n m e n t , in trust for the people of the United States, holds seven millions;
a n d t h a t persons owning less than five thousand dollars each, hold four mili i o n s six hundred and eighty-two thousand; and that persons owning between
five a n d ten thousand dollars each, hold upwards of three millions. I t is also
w o r t h y of remark, that a very considerable portion of the stock'—very nearly
s i x millions—is held by females, by trustees and guardians for the use of fej t n a l e s ami orphan children, and by charitable and other institutions. Of the
t w e n t y - e i g h t millions of the stock which is owned by individuals, only three
^ j n i l l i o n s four hundred and fifty-three thousand is now held by the original subs c r i b e r s . All the rest has been purchased at the market prices—a large port i o n of it, probably, when those prices were higher than a t present. Most of
r i h e investments made by wills, and deeds, and decrees in equity, for the use
J^yf females and minors, are believed to have been made when the stock was
g r e a t l y above par. From this brief analysis, it will appear that there is nothing
r a n t h e character or situation of the stockholders, which should make it desira^<t>le t o deprive them of the advantage which they have fairly gained, by an app l i c a t i o n of their capital to purposes highly beneficial, as the committee have
sSattempted to show, to the government and people of the United States. If
,Mforeigners own seven millions of the stock of the bank, our own government
£5owns as much; if wealthy men own more than two millions, men in moderate
j^circumstances own between seven and eight millions; and females, orphans,
3 a n d institutions, devoted to charitable and other purposes, own nearly six millions.
B u t the objection that the stock is owned by men of large capital would ap-

m e r c h a n t s and manufacturers, having an active employment for their capitals,
do not choose to be the first adventurers in a bank project. Accordingly,
w h e n the present bank went into operation, it is believed t h a t moat of thecapil

t a l w a s o w n e d b y l a r g e c a p i t a l i s t s , a n d u n d e r a m u c h more u n e q u a l d i s t i i *
b u t t o n t h a n e x i s t s a t p r e s e n t . T h e l a r g e a m o u n t of s t o c k n o w h e l d m t r u s t far
f e m a l e s a n d m i n o r s , has b e e n p r i n c i p a l l y , if n o t e n t i r e l y , p u r c h a s e d s i n c e the
b a n k w e n t i n t o o p e r a t i o n ; a n d t h e s a m e r e m a r k is g e n e r a l l y a p p l i c a b l e t o the
s t o c k in t h e h a n d s of small h o l d e r s .
I t is o n l y w h e n t h e c h a r a c t e r o f a bank
is fully e s t a b l i s h e d , a n d w h e n its s t o c k a s s u m e s a s t e a d y v a l u e , t h a t t h e s e des c r i p t i o n s of p e r s o n s m a k e i n v e s t m e n t s in it.
I t is m o r a l l y c e r t a i n , t h e r e f o r e , t h a t , if a n o t h e r d i s t i n c t i n s t i t u t i o n w e r e
c r e a t e d , on t h e e x p i r a t i o u of the p r e s e n t c h a r t e r , t h e r e w o u l d be a m u c h great*
e r portion of i t s c a p i t a l s u b s c r i b e d by m e n of l a r g e f o r t u n e s , t h a n i s n o w o w n *
e d b y p e r s o n s of this d e s c r i p t i o n , of t h e s t o c k of t h e U n i t e d S t a t e s B a n k f - n
I n d e e d , i t m i g h t b e c o n f i d e n t l y p r e d i c t e d , t h a t t h e l a r g e c a p i t a l i s t s w h o now
hold s t o c k in t h a t b a n k , w o u l d , from t h e i r local position a n d o t h e r a d v a n t a g e s ,
be t h e first t o forestall t h e s u b s c r i p t i o n s to t h e n e w b a n k , w h i l e t h e s m a l l
s t o c k h o l d e r s , s c a t t e r e d over t h e c o u n t r y , w o u l d b e p r o b a b l y e x c l u d e d , a n d the
females a n d m i n o r s , a n d o t h e r s i n t e r e s t e d in t r u s t i n v e s t m e n t s m a d e b y d e c r e e s
in e q u i t y , w o u l d b e a l m o s t n e c e s s a r i l y e x c l u d e d , as t h e s a n c t i o n o f a c o u r t
c o u l d s c a r c e l y b e o b t a i n e d , after t h e p a s s a g e of t h e n e w a c t of i n c o r p o r a t i o n ,
i n t i m e to a u t h o r i s e a s u b s c r i p t i o n .
T o d e s t r o y t h e e x i s t i n g b a n k , t h e r e f o r e , after i t h a s r e n d e r e d s u c h sijmfci
s e r v i c e s to t h e c o u n t r y , m e r e l y with a v i e w to i n c o r p o r a t e a n o t h e r , w o u l d be
a n a c t r a t h e r of c r u e l t y a n d c a p r i c e , t h a n of j u s t i c e a n d w i s d o m , a s i t r e g a r d s
t h e p r e s e n t s t o c k h o l d e r s . I t is n o l i g h t m a t t e r to d e p r e c i a t e t h e p r o p e r t y of
i n d i v i d u a l s , h o n e s t l y o b t a i n e d , a n d usefully e m p l o y e d , to t h e e x t e n t o f five
millions six h u n d r e d t h o u s a n d d o l l a r s , a n d t h e p r o p e r t y of t h e g o v e r n m e n t ,
to t h e e x t e n t of one million four h u n d r e d t h o u s a n d d o l l a r s , p u r e l y f o r t h e s a k e
o t c h a n g e . I t w o u l d i n d i c a t e a f o n d n e s s for e x p e r i m e n t , w h i c h a w i s e g o v e r n m e n t will n o t i n d u l g e upon slight c o n s i d e r a t i o n s .
l i u t t h e g r e a t i n j u r y w h i c h w o u l d r e s u l t from t h e refusal of C o n g r e s s t o r e n e w t h e c h a r t e r oi t h e p r e s e n t b a n k , w o u l d , b e v o n d all q u e s t o n , b e t h a t w h i c h
7??2»* T i V
i° ^ c o m ! » u t n t t y *t l a r g e . I t w o u l d b e difficult t o e s t i m a t e the
s u d d ^
n a t u r a l l y a n d n e c e s s a r i l y r e s u l t f r o m the '
•Jv » J r W 1 t h d r * w a l o* m o r e t h a n forty m i l l i o n s of c r e d i t , which t h e c o m m u n i s
•X? *!
-n i e
. k 0 t t h e X j m t e d S t a t e s , in w i n d i n g u p i t s c o n c e r n s , w o u l d
n o t o n l y w i t h d r a w its o w n p a p e r from c i r c u l a t i o n , a n d call in i t s d e b t s , but
w o u l d u n a v o i d a b l y m a k e s u c h h e a v y d r a u g h t s on t h e local i n s t i t u t i o n s for
s p e c i e , as v e r y g r e a t l y t o c u r t a i l their d i s c o u n t s .
T h e pressure upon t h e act i v e , i n d u s t r i o u s , a n d e n t e r p r i s i n g classes, w h o d e p e n d m o s t u p o n t h e f a c i l i t i e s of b a n k c r e d i t , w o u l d be t r e m e n d o u s . A v a s t a m o u n t of p r o p e r t y w o u l d
c h a n g e h a n d s a t half its v a l u e , p a s s i n g u n d e r the h a m m e r , from t h e m e r c h a n t s ,
m a n u f a c t u r e r s , a n d f a r m e r s , to t h e large monied c a p i t a l i s t s , w h o a l w a y s s t a n d
*-eady t o avail t h e m s e l v e s of t h e p e c u n i a r y e m b a r r a s s m e n t s of t h e c o m m u n i t y ;
T h e l a r g e s t s t o c k h o l d e r s of t h e p r e s e n t b a n k , t h e v e r y p e r s o n s w h o s e p r e s e n t
l a w f u l g a i n s it w o u l d be t h e o b j e c t of s o m e t o c u t oft", h a v i n g a l a r g e s u r p l u s
m o n e y c a p i t a l t h r o w n u p o n t h e i r h a n d s , w o u l d b e t h e v e r y first t o s p e c u l a t e
u p o n t h e d i s t r e s s e s of t h e c o m m u n i t y , a n d b u i l d u p p r i n c e l y f o r t u n e s u p o n t h e
r u i n s of t h e i n d u s t r i o u s a n d a c t i v e c l a s s e s . O n t h e o t h e r h a n d , t h e f e m a l e s
a n d m i n o r s , a n d p e r s o n s in m o d e r a t e c i r c u m s t a n c e s , w h o h o l d s t o c k i n t h e
i n s t i t u t i o n , w o u l d s u s t a i n a n i n j u r v , in n o d e g r e e m i t i g a t e d b y t h e g e n e r a l dis*
t r e s s of t h e c o m m u n i t y .
A v e r y g r a v e a n d S o l e m n q u e s t i o n will b e p r e s e n t e d to C o n g r e s s , w h ^ n
t h e y c o m e to d e c i d e u p o n t h e e x p e d i e n c y of r e n e w i n g t h e c h a r t e r of t h e P 1 ^
sent bankT h a t i n s t i t u t i o n h a s s u c c e e d e d in c a r r y i n g t h e c o u n t r y t h r o u g h

t h e paiftful process necessary to cure a deep seated disease in the national curr e o c y . T h e nation, after having suffered the almost convulsive agonies of this
n e c e s s a r y remedy, is now restored to perfect health. In this state of things
i t w i l l be for Congress to decide, whether it is the part of wisdom to expose
t h e c o u n t r y to a degree of suffering almost equal to that which it has already
suffered, for the purpose of bringing back that very derangement of the curr e n c y * which has been remedied by a process, as necessary as it was distressing.
I f the bank of the United States were destroyed, and the local institutions
l e f t without its restraining influence^ the currency would almost certainly rel a p s e into a state of unsoundness- The very pressure which the present bank,
in w i n d i n g up its concerns, would make upon the local institutions, would comp e l them either to curtail their discounts when most needed, or to suspend
s p e c i e payments- It is not difficult to predict which of these alternatives
t n e y would adopt, under the circumstances in which they would be placed*-—
T h e imperious wants of a suffering community would call for discounts, in
language which could not be disregarded. T h e public necessities would dem a n d , and public opinion would sanction, the suspension, or at least an evas i o n , of specie payments.
B u t , even if this desperate resort could be avoided in a period of peace and
general prosperity, neither reason nor experience will permit us to doubt, that
a s t a t e of war would speedily bring about all the evils which so fatally affected
the credit of the government and the national currency, during the late war
w i t h Great Britain. W e should be again driven to the same miserable round
of financial expedients, which, in little more than two years, brought a wealt h y community almost to the very brink of a declared national bankruptcy,
and placed the government completely at the mercy of speculating stockjobbers.
T h e committee feel warranted, by the past experience of the country, in exp r e s s i n g it as their deliberate opinion, that, in a period of war, the financial res o u r c e s of the country could not be drawn into efficient operation without the
aid of a national bank, and that the local banks would certainly resort to a suspension of specie payments. T h e maxim is eminently true in modern times
that money is the sinew of military power. In this view of the subject, it does
appear to the committee, that no one of the institutions of the country, not exc e p t i n g the army or navy, is of more vital importance than a national*bank. I t
has this decided advantage over the army and navy: while they are of scarcely
any value except in war, the bank is not less useful than cither of them in war,
and is also eminently useful in peace. I t has another advantage, still greater.
If, like the army or navy, it should cost the nation millions annually to sustain
it, the expediency of the expenditure mi^ht be doubted. But, when it actually
saves to the government and to the country, as the committee have heretofore
attempted to show, more millions annually than are expended in supporting both
the army and navy, it would seem that, if there was one measure of national policy, upon which all the political parties of the country should be brought to
unite, by the impressive lessons of experience, it is that of maintaining a national bank*
I t is due to the persons, who for the last ten years, have been concerned in
the administration of the bank, to state, that they have performed the delicate
and difficult trust committed to them, in such a manner as,at the same time to
accomplish the great national ends for which it was established, and promote
the permanent interest of the stockholders, with the least practicable pressure
upon the local banks. As far as the committee are enabled to form an opinion, from careful inquiry, the bank has been liberal and i n d i g e n t in its d e a l i n g

•with these institutions, and, with scarcely an exception, now stands in t h e l n o ^ i
amicable relation to them. Some of those institutions have borne t h e most*
disinterested and unequivocal testimony in favor of the bank.
It is but strict justice also to remark, that the direction of the m o t h e r bask
appears to have abstained, with scrupulous care, from bringing the p o w e r and
influence of the bank to bear upon political questions, and to have s e l e c t e d
for the direction of the various branches, businessmen in no w a y c o n n e c t e d
with party politics. The Committee advert to this part of the conduct o f t h e directors, not only with a view to its commendation, but for the purpose o f expressing their strong and decided conviction that the usefulness and s t a b i l i t y of
such an institution will materially depend upon a steady and undeviatinff*" adherence to the policy of excluding party politics and political partisans f r o m all
participation in its management. It is gratifying to conclude this b r a n c h of
the subject by stating, that the affairs of the present bank, under t h e a b l e , efficient, and faithful guidance of its two last presidents and their a s s o c i a t e s ,
have been brought from a state of great embarrassment into a condition o f the
highest prosperity. Having succeeded in restoring the paper o f t h e local
banks to a sound state, its resources are now such as to justify the d i r e c t o r s in
extending the issue and circulation of this paper so as to satisfy the w a n t s o f the
both as it regards bank accommodations and a circulating medi^l!"*- 7-P°™ t , i e s o u n d e s t principles of banking, the very ample r e s o u r c e s of
the institution would justify the directors in granting accommodations to a
much greaterextent than they have vet done; and though thev have i n c r e a s e d
the circulation of their paper from four and a half to fourteen millions, since
January, 1823, they are ready and willing to increase it still further, b y discounting bills ot exchange and other business paper. It is believed t h a t the
discounts and issues of the institution are now actually limited by t h e w a n t of
applications resting upon these, the only substantial' and safe foundations of
bank credit and circulation.
1 thu
i n J i L ^ f ^ i l 8 ? - " 011
^ m . u c h o n t h e constitutionality and expediency o f an
b V S K ^ i n
- * Bank the only question which remains to be examined
u L n theTr^. l ? r ? r ^ e x P e d l e n c 7 o€ establishing « a National Bank founded
upon the credit of the Government and its revenues "
auirV P « t n ? S ! *£ f ttVC?!?n t h e i n t e n t i o » o f the President, in suggesting the*
of the I mon, similar to those now established by the Rank of the United Statea,
and co-extensive with them. The great object of furnishing a national currency
could not be accomplished, with an approach to uniformity, without the agency
of such branches; and another object, second only in importance to the one just
stated, the extension of the commercial facilities of bank accommodations to the
different parts of the Union, could not be at all effected without such agency.
If there should be simply a great central bank established at the seat of Government, without branches to connect its operations with the various points of the
commerce of the Union, the promise to pay specie for its notes, whenever pre*
sented, would be almost pure! v nominal. Of what consequence would it be to
a merchant or planter of Louisiana, or a manufacturer or farmer of Maine, that
he could obtain specie for bills of the National Bank, on presenting them at the
City of Washington—a place wholly unconnected either with Louisiana or
Maine by any sort of commercial intercourse, and where, consequently, these
bills would never come in the regular course of trade? A promise to pay
specie at a place so remote from the place of circulation, and where the bills
would never come but at a great expense, and for the sole purpose o f being

p r e s e n t e d for payment, would neither give credit to the notes, nor operate as
a n effective check upon excessive issues. Whatever credit such notes might
h a v e , at a distance from the place of issue, would not be because they were red e e m a b l e at the pleasure of the holder—for such would not be the fact; but
principally because of the ultimate responsibility of the Government, and of
t h e i r being receivable in payment of all dues to the Treasury. T h e y would
r e s t , therefore, upon almost precisely the same basis of credit as the paper
m o n e y of our Revolution, the assignats of Revolutionary France, and the
T r e a s u r y notes of the late war. These were receivable in discharge of debts
d u e t o the Treasury, and Government was of course ultimately responsible
for their payment; yet the two former depreciated almost to nothing, and
t h e latter, though bearing interest, sunk to twenty per cent, below par. But
t h e n o t e s of a central Government Bank, without branches, would be subject
t o depreciation from a cause which constitutes a conclusive objection to
s u c h an institution.
There tvould be nothing
to limit excessive
but the discretion and prudence of the Government
or of the
H u m a n wisdom has never devised any adequate security against the excessive
i s s u e s , and, consequently, the depreciation of bank paper, but its actual, and
e a s y , and prompt convertibility into specie at the pleasure of the holder•—
E x p e r i e n c e has shown that, where the paper of a bank is, by any means,
habitually circulated at places remote from the point where it is issued, and
not connected with it by a regular commercial intercourse, there will not
e x i s t that easy and prompt convertibility which is so essential to the credit of
bank paper. When bank bills are confined to their appropriate sphere of circulation, a redundant issue*is certainly and immediately followed by a run
upon the bank for specie. This timely admonition is as useful to the bank
as i t is to the community: for it enables the directors to avoid, with unfailing
c e r t a i n t y , an excess equally injurious to both, and which no human sagacity
could anticipate or prevent, by calculation merely. Whatever, therefore, in
a s y s t e m of bank circulation, prevents the reflux of redundant issues, necessarily destroys the only adequate security against these injurious and ruinous
B u t a Government Bank, without branches would be obnoxious to another
objection which could not be obviated. Its loans would be confined to the
D i s t r i c t of Columbia; or, if extended to the various parts of the U n i o n ^ t o
say nothing of the inconvenience to which it would expose those at a distance
who obtained accommodations—they would be unavoidably granted without
a n y knowledge of the circumstances of the persons upon whose credit the
Government would depend for re-payment. It would, in fact, be, for all
useful purposes, a mere District Bank.
T h e s e views of the subject have brought the committee to the conclusion,
that, if a Government Bank should be established, it would have at least as
m a n y branches as the Bank of the United States, and probably a much greater number. Few administrations would have the firmness to resist an application to establish a branch, coming from any quarter of the Union, however injudicious the location might be, upon correct principles of commerce
and banking.
T h e Bank of the United States now employs five hundred agents; in the
various parts of the Union where its offices are established. From this fact
some idea may be formed of the very great addition which would be made to
the patronage of the Executive Government by the establishment of such a
bank as the one under consideration.
B u t the patronage resulting from the appointment—the annual appointment
— o f these agents, great as it would doubtless be, would be insignificant and

harmleeft, when compared with that which would result from the d i s p e n s a tion of bank accommodations to the standing amount of at least fifty m i l l i o n s of
dollars! The mind almost instinctively shrinks from the contemplation c> f a n
idea eo ominous to the purity of the Government and the liberties of t h e people.
N o government of which the committee have any knowledge, e x c e p t perhapi*
the despotism of Russia, was ever invested with a patronage at o n c e s o prodigious in its influence and so dangerous in its character* In the m o s t desperate financial extremities, no other European Government has e v e r ventured upon an experiment so perilous. If the whole patronage of the E n g l i s h
monarchy were concentrated in the hands of the American E x e c u t i v e , i t mar
be well doubted whether the public liberty would be so much e n d a n g e r e d by
it as it would by this vast pecuniary machine, which would place i n t h e hands
of every administration fifty millions of dollars, as a fund for r e w a r d i n g political partisans.
Without assuming that a corrupt use would be made of this new s p e c i e s of
government patronage, a very slight acquaintance with the practice o f all
political parties, vvhatever may be their professions, will be sufficient t o satisfy
any reflecting mind, that all the evil consequences of corruption w o u l d flow
from its exercise. Have not our political contests too frequently degenerated
into a selfish scramble for the offices of the country? Are there n o t those
who sincerely and honestly believe that these offices are legitimate o b j e c t s of
political welfare, and the rightful reward of the victorious party? A n d disinterested and patriotic as the great body of every political party i s admitted
to be, the fact is no less true than it is lamentable, that the most d e v o t e d and
active partisans are vwy often mere soldiers of fortune, who watch t h e political signs, and enlist, at the eleventh hour, under the banners of t h e party
most likely to prove successful. Such being, more or less, the cv>mposition
all political parties, what would be the probable use made of fifty mill10i"iS J? j ? • P a t , ; o n a S ^ by a political party which conscientiously
g e l d the doctrine that all the offices ir the gift of the executive should
He divided among the partisans of a successful political leader?
not the same principle be even more applicable to bank loans? A n d would
not the Treasury
of the
United States, under the sanctifying influence of
^ X l
. ? a r ^ mfctuation, be literally plundered, by mercenary
retainer^ bankrupts m fortune, and adventurers in politics?
*hn«^e«P*w P aadministration
should be ever so muck disposed to restrain the
! £ ! ? ™ \ i Vt er ro tt l l?C ^ rlte a ^ould
be utterly impracticable to exercise a n y effit numbe
S S i \ u Z Tr- °
] ?
* * of bank directors who would be scattered
over the Union, and who, upon all the known principles of human nature, it
may be confidently predicted, would principally
consist of busy
and officious
political partisans.
Such would be the depositaries—acting, not under the public e y e , but under the protecting mystery of a sort of concealment and secrecy d e e m e d indispensable in banking operations—to whom not only the whole Treasury of
the Union would be confided, to be squandered, perhaps, in profligate favouritism, Jjut the tremendous power of putting the whole property of the nation
under mortgage, for the redemption of the bills issued at tlieir discretion. To
say nothing of the utter insecurity of the public revenues under such a system*
a new species of legislative power, unknown to the Constitution, would be
committed to these irresponsible bank directors, of which no human sagacity
can predict the consequences,
A just analysis of the operation of granting loans by this government bank,
in exchange for the notes of private individuals, will show, that it involve*
£h« exercise, on the part of the directors, of the two fold power of appropria-

t i n g the public revenue in the most dangerous of all forms—discretionary
loans-—and of pledging the responsibility of the Government to an unlimited
e x t e n t , for the payment of the debts at the same time created against it.—
T h e s e are among the highest functions of legislative power, ana have been
expressly and exclusively vested in Congress. Unless, therefore, it be
a s s u m e d , that Congress may rightfully transfer the powers with which it is inv e s t e d to these bank directors, it will be difficult to find any warrant, either
i n t h e letter or spirit of the Constitution, for the creation of this tremendous
e n g i n e of pecuniary influence. It may, indeed, be doubted, whether all
t h e branches of the legislative authority united, have any constitutional
p o w e r to lend the public revenue, either to individuals, corporations or
s t a t e s , without reference to the objects to which it shall be applied. But,
whatever may be the power of Congress on this subject, it appears to the
Committee to be inexpedient, in every view of the question, that the
Government should be converted into a great money lender. There is no
species of trade in which it would be wise for the Government to embark;
b u t of all the variety of pursuits known to human enterprise, that of lendiug
m o n e y by the Government to the citizens of the country, would be fraught
w i t h the most pernicious consequences.
I n the first place, it is a business to which, in the very nature of things, no
Government is adapted, and, least of all, a popular Government, There is
n o employment of capital that requires a more vigilant and skilful superint e n d e n c e . Nothing but the ever active motive of individual interest can supp l y the watchfulness necessary to secure a banking institution against the
grossest frauds and impositions. In pecuniary transactions, few men are to
e found who will serve others, in cases involving the exercise of discretionar y power, with the same fidelity that they would serve themselves; and, when
we consider the strong motives, both of private friendship and political attachm e n t , which would operate on the directors of a Government bank, to bestow
its favours without impartiality or prudence, it requires but little sagacity to
foresee that enormous losses would be annually sustained by the insolvency of
t h e Government debtors.
A l l Governments have found it expedient to place the public Treasury und e r the guardianship of a high and confidential officer, aided, in the enforcem e n t of a rigid responsibility, by a system of checks and counterchecks,
operating upon all the subordinate officers concerned in collecting and disbursing the public revenue. Such is our own system. No discretion is
r e s t e d in the chief officer of the 'Treasury, much less in those that are subord i n a t e , in the appropriation of a single dollar of the public money.
money can be drawn from the Treasury but in consequence of appropriations
m a d e by l a w . " How far these wise and provident safeguards, and this constitutional barrier, would be prostrated by placing not only the public revenue,
b u t the public credit, at the disposal of some hundreds of bank directors in various
p a r t s of the Union, is a very grave question for the consideration of the House,
Our own experience has demonstrated the great danger of having large
masses of the community indebted to the Government, It was a deep conviction of this danger that induced Congress to abolish the system of credit
sales in the disposition of public lands. Congress has been compelled to
yield to the pressing importunities of the purchasers of these lands, by granting them not only repeated indulgences, but by remitting some millions of
the debt. W h a t , then, would be the situation of the Government, with a
debt of fifty millions diffused throughout the country, and due to it from the
most active, enterprising, ami influential classes of the community? N o thing that has not happened can be more certain, than that the very unfavourable

*ici»*itude in trade, every period of commercial distress and e m b a r r a s s m e n t ,
would give rise to importunate and clamorous calls for i n d u l g e n c e , a n d For
an injudicious extension of discounts, which no administration w o u l d h a v e
the firmness to resist. E v e r y o n e who has witnessed the urgency and u n a n i m i t y with which the representatives of the states, indebted for public l a n d s ,
have pressed the claims of their citizens for indulgence and remission, m u s t
be satisfied, that, if the citizens of all the states should b e c o m e i n d e b t e d
much more largely for bank loans, the government would have s c a r c e l y a n y
faculty of resistance, when appeals for indulgence should c o m e from a i l
quarters of the U n i o n , sustained by the strong plea of public distress and e m bar rass me ntT h e policy of extending indulgence to the public debtors, and o f g r a n t i n g
more liberal loans to the community, would, in the natural course of t h i n g s ,
become the favourite theme of those who aspire to popular favour. P o l i t i c a l
parties would come to be divided upon the question of observing t o w a r d s t h e
public debtors a strict banking policy, indispensable to the m a i n t e n a n c e o f
specie payments, on the one hand, or"a liberal government policy, n e c e s s a r i l y
involving a suspension of specie payments, on the other. A n d \vhen it i s c o n sidered that the whole class of debtors, always the most numerous and a c t i v e
portion of the community, would be naturally in favour of increasing b a n k
issues, and extending bank indulgences, it can scarcely be doubted that s p e c i e
payments would be suspended in the first great pecuniary e x i g e n c y , g r o w i n g
out of the embarrassments in our commerce, or deficiencies in our r e v e n u e .
T h e Government, therefore, which is under the most sacred obligations t o
constrain all the banks to maintain specie payments, with a view to the u n i formity and soundness of the currency, would, by its own e x a m p l e , perpetuate the great national evil of a fluctuating and depreciated c i r c u l a t i n g
T h e s e evils, which would be so highly probable in time of peace, w o u l d
be almost certain in the event of war. T h e temptation to supply the F e d e r a l
l r e a s u r y by the easy process of bank issues, rather than resort^to the u n p o pular process of internal taxation, would be too fascinating to be r e s i s t e d , —
W e should thus experience, what every nation has experienced in l i k e circumstances, the manifold evils of a mere paper currency, having no relation
to any standard of intrinsic value. In these views the committee are fully
sustained b^y the opinion of Mr, L o w n d e s , expressed in 1S19. T h e s e are his
w o r d s : <• 'I hat the destruction of the (United States) Bank would be followed
by the establishment of paper money, he firmly believed; he might almost
say, he knew.
It ua« an extremity from which the house would recoil, if now
roposed; but if the resolutions on'the table were passed, it would very soon
e proposed- T h e subject was too large for an incidental discussion*
Gentlemen thought the amount of government paper might be limited, and depreciation prevented, by the rate of interest which should be exacted.
Inadequate every where, the security was particularly ineffectual in the U n i t e d


B u t the inevitable t e n d e n c y of a government bank to involve the country
in a paper system, is not, in tlie opinion of the committee, the greatest objection to it. T h e powerful, and in the hands of a bad administration, the irresistible and corrupting influence which it would exercise over the elections of
the country, constitutes an objection more imposing than all others united. N o
matter by what means an administration might get into power, with s u c h a
tremendous engine in their hands, it would be almost impossible to dispiaca
them without some miraculous interposition of Providence,
D e e p l y impressed with the conviction, that the weak point of a free govar&r

m e n t is the absorbing tendency of executive patronage, and sincerely believing
t h a t the proposed bank would invest that branch of the government with a
w e i g h t of monied influence more dangerous in its character, and more powe r f u l in its operation, than the entire mass of its present patronage, the Com*
m i t t e e have felt that they were imperiously called upon, by the highest cons i d e r a t i o n s of public duty, to express the views they have presented, with a
f r a n k n e s s and freedom demanded by the occasion. It is, at the same time
d u e to their own feelings, that they should state unequivocally their convict i o n , that the suggestion of the Chief Magistrate, which they have thus freely
e x a m i n e d , proceeded from motives of the most disinterested patriotism, and
w a s exclusively designed to promote the welfare of the country. This is not
t h e mere formal and heartless homage, sometimes offered up to official station,
e i t h e r from courtesy or interest, but a tribute which is eminently due, and
cheerfully rendered, to the exalted character of the distinguished individual
o n whom it is bestowed.

of a letter from an intelligent
merchant in Charleston,
to the Chairman of the Committee of fVays and
the exchange operations
of the Bank of the


«* This effect of diminishing the vast difference of exchange between the
v a r i o u s points of the country, was evidently produced by the bank* T h e adv a n t a g e s produced by this institution, in the intercourse between the Western
a n d Atlantic States, can be duly appreciated only by one who sees, passing
before him, the actual operation of the system of exchange it has created.—
F o r example: Lexington, in Kentucky, annually accumulates a large surplus
of funds to her credit in Charleston, derived from the sale of horses, hogs,
a n d other live stock, driven to that as well as to other Southern markets by
h e r citizens. Philadelphia is indebted to Charleston for exchange remittee!,
dividends on bank stock, &c. and Lexington is indebted to Philadelphia, for
merchandise. Without the transportation of a single piece of coin, Lexingt o n draws on Charleston, and remits the check to Philadelphia in payment of
h e r debt there; which operation adjusts the balance between the three points
of the triangle almost without expense or trouble. Could such facilities be
obtained from any other than an institution having branches in different parts
of the Union, acting as co-partners in one concern? Local banks, whatever
m i g h t be their willingness, could not accommodate in the same manner and to
a like e x t e n t , "
" T h e discounting of bills on the low terms established by the Branch Bank
a t this place, is a great benefit to the agricultural interest, particularly in enhancing the price of cotton and rice; and were the bank to stop its operations,
t h e r e is no saying how far these staples would be depressed. T h e private
dealers in exchange would take the place of the bank in that business, and
their profits on bills would be taken out of the pockets of the planters, as the
merchants would always regulate the price they would give for an agricultural
production, by the high or low rate at which they could negotiate their bills*
On account of its connexion with ail parts of the Union, the bank affords thift
important advantage to the public: it is always a purchaser and always a seller of exchange at fixed and low rates, and thus prevents extortion by private
d e a l e r s " * * * * * * "Before this bank went into operation, ex-

c h a n g e w a s from 8 to 10 p e r c e n t , e i t h e r for or against C h a r l e s t o n , w h i c h vm
a loss to t h e p l a n t e r to that a m o u n t on all t h e produce of G e o r g i a a n d South
C a r o l i n a , and indeed vou might sav, all t h e Fp r o d u c e of the South***-.,
e r n
Western States." * % * £ • - *
" I f t h e Bank of t h e U n i t e d S t a t e s w e r e d e s t r o y e d , t h e local b a n k s would
again issue their paper to an excessive a m o u n t ; a n d while a few a d v e n t u r o u s
s p e c u l a t o r s would be m u c h benefitted by such an issue, t h e h o n e s t a n d uns u s p e c t i n g c i t i z e n s of o u r c o u n t r y would, finallv b e the losers. I f W e
» J
back to w h a t took p l a c e in N e w Y o r k , P e n n s y l v a n i a , the W e s t e r n S t a t e s ,
and even in our own S t a t e , we shall see t h e grossest impositions c o m m i t t e d
by b a n k s , c o m m e n c i n g with a few thousand dollars in specie, b u y i n g - ui>
n e w s p a p e r s to puff them as specie-paving b a n k s , in o r d e r to d e l u d e t h e public
a n d , after g e t t i n g their bills in circulation, blowing u p , and l e a v i n g t h e u n a u s !
p e c t i n g p l a n t e r and farmer victims of a fraud, by which they w e r e d e n r i v « t
of t h e h a r d e a r n i n g s of y e a r s of honest i n d u s t r y . B u t , sir, I b e l i e v e t h e b a S
owes a g r e a t deal of the opposition which exists, a n d has e x i s t e d , t o t h e feet
t h a t it has p u t down these fraudulent institutions, got u p bv c o m b i n a t i o n s ami
conspiracies ot speculators,- and who, after receiving large d i v i d e n d s , m a i u u m i
t o d e s t r o y the credit ot their own paper, a n d , by t h e ' a g e n c y of b r o k e r s , b w K
it u p a t half its nominal v a l u e .
« i " ? L n C ? l l a S t oMf 7 °t?h ee :>*oun- il e hd a ,dn ea n conversation
with a g e n t l e m a n i n t h e conof the
2 ™ 1 *] h " T
N « r t h . a " d »»? says t h e v a r e d e t e £
mined to break up the United S t a t e s B a n k , to enable t h e m to use t h e i r m o n e y
to a d v a n t a g e , as t h a t institution gives so m a n y facilities to t h e c o m m u n i t y ^
to d e p r i v e them of their former profits." *
r e IS a n o t h e r : n s i d
«.r«ii T
, l f «
e r a t i o n : the distress would be i m m e n s e , w h i c h a
Would p r o d u e e a m o
to?£l£u«»ZV VS*?% l
» S t h o s e w h o a r e indebted ll
findtl at
mUHon n? . "n
this branch, the^planters owe u p w a r d s of a
r w i gn W ^ L j K
l ; a n tl h e! ,Vnmn
M v « n » nesitatioA in L y i n g as safe a d e b t a s is
r e s e nPl a n t e V s ^n. 1 J" n g e t -C d i t B
u t if the b a n k should wind u p i t s affafr^
from other
h p v
, S . , ^
i n s t i t u t i o n s ; and a s t h e b a S
once n r l t v * M Ke
V ' r d
j » d g m e n t is obtained a l m o s t at
HV d e
f o r h a b i t s Z«? U l d TK
monied m e n w o u l d b u y i t »
1 o s o " w h o \ h « u M * h „ n h r o u fP u thho e- u t t h e ^ n i o n all classes would suffer, excep?
• «"
" : «">ney to go into t h e b r o k e r a g e b u s i n e s s , E
sac fi
P , 7 P w f, i f
" «^ I were sure the b a n k would not b e r e c h a r t e r 3 L L
I i n v e r t my property into money, with a view to d e a l i n g i n exchange.
I could m a k e a vast fortune by i t . " '



of the Bank of the United States, Jlpril

N o t e s discounted,
D o m e s t i c bills discounted,
F u n d e d debt held by the bank,
R e a l estate,
F u n d s in Europe, equal to specie,
P u b l i c deposits,
P r i v a t e deposits,






1, 1 8 3 0 .
* 16,083,894


• T h i s is the circulation from the office returns. W e know, however, that a part o f it
is r e c e i v e d at other offices, and is in passage from one to the otlier. So that the uett circul a t i o n U $14,176,927.


A P P E N D I X , N o . 1.
of Transfers
directed by the Secretary of the Treasury from
United States and Offices, from 6th June to 14th December

W h e r e from
N e w York
Bank U n i t e d States
N e w York
N e w Orleans
Cin cinnati
Bank U n i t e d States
N e w York
N e w York
33 [July 8 , C ( N e w York
32! Aug. 3 ,
N e w York
Sept. 1.
Bank U n i t e d States
N e w York
< * Louisville
N e w York
4 «
4 <
C t
N e w York
51 N o v , 2 , < « Bank U n i t e d S t a t e s
4 *
N e w York
Bank U n i t e d States
N e w York
Bank U n i t e d S t a t e s
Boston •
6 9 * > « . 1 4 , 1829|
w York
t •
w Orleans ••••••*
United States
4 <
4 4

W h e r e to
Bank U n i t e d States
Boston •
• .»••-.
N e w York
W a s h i ntrton
Ditto •
Bank United States

and .,










5 0>,QO0
! From the above statement, the annual amount of the transfers made for the Government,]
frr.c of expense, may be inferred.

PRICES CURRENT, Exhibiting a Comparative View of the relative value ofBank Notes in 1816 and in 1829, at various places.




Spanish Dollars ,
; American *' ,
New York "
Philadelphia "
Pennsylvania **
Baltimore "
N.Xarolina *'
8. Carolina "
f Georgia



New 7 k

lftC , o
Dec 5

1Dn _




1W ^

18| adv. para
17 "
17 "
17 «

7 adv.

dis. a par


17 dis.


Dec 5-

• > * • * • » •

I dis. a par 20 a 21 disc $ disc* a par
13 disc.
21 a 22 disc- \
13 disc.
10 a 12 disc

1 discdisc, a par
1 disc.
I disc.
1 disc.

11 disc
41 "
10 "
4 adv.
7 disc*
4 adv.

| disc,
a i disc.

6£ •«


^ ^


^ ' ^

Jul L

20 a 22 adv,


20 a 22 adv,
15 c 16 adv.
6 a 7 adv.
6 a 7 adv.
2 adv.

12 a 14 adv.
8$ a 9 adv.
2£ adv.




' '


Dec 5





- July 1-


5 disc

July 1.

Dec 5.

9 a 10 adv.




8 adv.
5 adv.
4 dis.


8 adv*
2 adv.
5 a 65 disc*


8 a 9 disc.


9 a 101 dis.
1 disc.
5 dis.
l a U disc.
2 a 2 | dis.

par a 3 disc par 21 disc,

7 a 8 | adv.

Dec. 5.

7 a9




New Orleans.

Dec. 5.

July 1-

Dec. 1.

12 a 15 adv.





5 a 9 disc,


Dec 5.

10 adv.


4 jidv.


3 adv.

July 1.

2 adv*
2 adv.
2 adv.


Dec. 5.



Ja!y I.




4 adv.

July t.

Dec. 5.

18 a 25 adv.


* * * •*•» *

10 adv.

14 disc,
i disc.



9 adv.


1 disc.

4 adv.

H disc*
par a I adv.

BA TES OF EXCHANGE at which Draughts are sold, and Domestic Bills purchased or collected, by the Bank of the United States audits Offices of Discount and Deposit.
1 Bank K States, fl Fotthnd.

At Bank of tkelL States
Office Portland
Portsmouth Boston
New York Baltimore
Washington •
Fayetteville ~
New Orleans *
St. Louis













New York . j


















New Orleans. '


St. Louis*









1 Cincinnati.






DISTRIBUTION of domestic Bills of Exchange, according to the latest statements, up to the 15//i March, J&JO.

Have now runI The following ning1 to maturity
] branches: the following amount of bills: Philadelphia. Portland.
New York
New Orleans
list. Louis







4,936 53
94,182 16
C0,U0 01
1,080 OfJ
95,953 68
66,026 11
7,182 00
13,535 07
25.041 05
30,750 00
14,327 32
18,762 99
6,610 15
55,775 84
400 00
6,000 00
13,104 94
12,572 56
14,261 09
39,934 36
358 33

5,509 01
1,268 73
4,045 73

6,163 19
5,454 69












7,500 00 43,729
600 00 16,343
3,196 66
2,791 09 50,747
2,000 00 2,550
657 56 5,790
1,251 68 86,273



62 15,877
00 2,851
63 23,739
00 6,400
52 5,197
96 15,721
35 29,800
69 25,799
53 24,690
t * *

• • • •



881 40

10,000 00

1900 00
3,740 00

100 00


157 00

New York.

Baltimore. Washinjrto]]. Richmond.

83 103,731 52^ 37,652 01
5,000 00
15 81,719 97 3,666 37
400 00
79 34,527 26
1,000 00
51,552 48 5,160 41
25,496 56
12 35,154 86
54 12,715 88 6,944 46
34 5,066 80 7,000 00
3,000 00
52 33,469 87 3,034 63
72 1,124 50 3,399 6R
99 26,323 11
500 00
45 60,339 21 1 %77l 25
06 4,080 00
250 00
1,050 00
3,220 00 8,550 00 9,617* 13
28,200 00 5,500 00 8,838 33
40,227 64 47,700 00
180 00
2,470 00 10,052 73 4,837 50
! 115,561 75

8,956 09 283,242
10,373 44 342,424
3,382 S3 74,552
6,238 32 31,867
15,826 58
432 76 14,163
1,964 00 202,262
2,000 00 153,255


33,685 55\ ' 2,873 68
3,286 61
3,718 71

997 78

Fayetteville. Charleston.
211 78 15,055 31

4,507 19

2,923 27
• •• 4 »

46,577 45 16,152 29
375 00 13,042 27 7,404 02

New Orleans.




7,142 17
400 00

1,173 90
6,420 98

53,409 18

14,957 84

6,300 00


700 00 9,745
23,202 50 14,200 00
2,768 00 13,628






42,474 22
2,895 03

27,131 98

19,524 90

105,074 56

13,550 93
100 00
843 Ijfl
2,414 77

571 87

203 00
98 1,684
73 18,454


4,157 77 18,784


6,279 21
58,821 75

85 9,436 90
00 2,671 99
1,945 42
35 36,738 16
800 00
26,544 53

10,116,388 51 560,904 19 23,422 75 27,996 99 815,474 45 161,139 37 49,173 52 12,228,445 89 521,608 19 1125,798 33
139,582 24 82,323 82 20,240 11 184,749 70 121,160 05 261,955 87 5,008,382 7S 75,054 09 340,683 61 537,452 52 37,691 16 305,418 54 125,151 09

Various olherii
places. |


34,744 99 15,773 S3 50,726 05 122,201 23 15,172 05 74,397 22 25,006 52
1,300 00

288 00
402 12 30,451
2,041 41 29,209 24 10,855 1]
13,221 59 7,235 05 6,199 34
5,550 00 1,600 00
950 00
14,405 46
963 88 30,794
26,575 00 4,810 76 13,645 37 4,056 61
2,000 <J0!
3,200 00
24,150 20
500 00
173,157 34
4,486 47 62,886 56 125,425 22 8,815 50 12,605
8,775 00
19,417 99
50 11,748,937 81
2,950 SO
13,948 14 18,728
72 416,939 93 14,331 79 79,179 65
00 297.390 45
101,652 81
74 97,755 92 11,648 57 24,027 83 66,814 24 1 596 71
467 38 65,986
8,106 82 7,452 12 31,277 67 49,149 70

1,661 18 16,268 04 21,209 50
26,210 21
365 96 3,012 38
1.000 Of)
39,737 88 16,119 S9 58,833 27 43,765 01
56,445 25
19,573 65 26,649 08 1,872 76 2,144 90 1,762 06
455 00
1,465 26 3,165 52
5,679 60
850 00
1.9G0 00
2,785 71
6,699 73

St. Louis.

i 44,521
; 44,251


4,157 77 338,421 53
, *