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AND

DOCUMENTARY. HISTORY

BASfK OF THE UNITED STATES:
j , . , i \ •'•Ht
ISCLUDI.NO THE ORIOINAA

BANK OF NORTH AMERICA.

COMPILED

BY M. ST. CLAIR CLARKE & D. A. HALL.

WASHINGTON:
PRINTED BY GALES AND 9EAT0N.

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PREFACE.

T h e Editors present to the public the following pages,
with the hope that they may impart useful lcnowledge in
regard to the past legislation of Congress, upon the highly
important'subject o? which they treat. It has been their
design to collect and embody, in as brief compass as pos
sible, the entire proceedings, debates, and resolutions, of
Congress, upon the various bills and projects for a National
Bank, which, at any time during the existence of the F e
deral Government, have been brought forward or discussed.
In their proper connexion, they have also embraced such
reports of committees and public officers, as had relation
to the establishment, constitutionality, or public uses of a
bank. The Debates, which form the great body of the
collection, will be found to contain the opinions and ela
borate arguments of the most distinguished men of our
country, both for, and against, the establishment o f such
an institution. For current reference, or preservation of
speeches, in convenient form, this part o f the work is cal
culated to be permanently useful. In the statement of the
decision o f important questions, the journals of Congress
have, as far as possible, been relied on; it will occur, how
ever, to those familiar with the proceedings of Congress,
that very much of the action o f that body, on all bills of
public interest, finds no place in their daily record. All
proceedings in Committee o f the Whole are excluded from
the journals o f the House; and, if they become matter of
record at all, it is in the pages o f the gazettes of the day.

I TO

O
0 5i

r~ f

o
o

752 ?

PR EFA C E.

For the history of the proceedings and the debates in Com
mittee of the W hole, the files o f the National Intelligencer
have been consulted: these furnish, during a considerable
period of our legislative history, the most correct sources
of information. It has been a leading object with the
editors, to collect with accuracy, and state with fidelity,
the acts that have been done, and the opinions which have
been uttered in Congress, and the Executive Departments,
on the establishment and perpetuation o f a National Bank.
Errors and unimportant omissions may, perhaps, be de
tected; but none, it is hoped, which can detract from the
merit, which the editors claim, o f general accuracy.

C O N TE N T S.

C H A P T E R I.

The

i n s t i t u t i o n o f t h e B a n k o f N o r t h A m e r i c a , p a g e 9:

P r o p o s itio n in th e

o ld C o n g r e s s , f o r a b a n k , 10: R e s o l u t i o n i n f a v o r o f e s t a b lis h i n g a b a n k , ib id:
A y e s a n d n o e s o n r e s o l u t i o n , 1 1 : P l a n o f t h e b a n k , ibid: O r d i n a n c e in c o r p o
r a t i n g B a n k o f N o r t h A m e r i c a , 12.
C H A P T E R II.
B a n k o f t h e U n i t e d S t a t e s p r o j e c t e d — H a m i l t o n ’s r e p o r t , 15:
p la n o f b a n k , 31:

H a m i l t o n ’s

B i l l i n t r o d u c e d i n t o S e n a t e — p r o c e e d in g s t h e r e o n , 3 5 : D e

b a t e s i n t h e H o u s e , o n t h e b i l l , 37— 8 4 :
O p in io n o f E d m u n d

V o t e o n t h e p a s s a g e o f t h e b il l, 8 5 :

R a n d o l p h , a t t o r n e y g e n e r a l , g iv e n t o t h e P r e s i d e n t ,

a g a i n s t t h e c o n s t i t u t i o n a l i t y o f t h e b i l l , 86— 8 9 :
ta r y o f S ta te , on th e sa m e s u b je c t, 91:

O f T h o m a s Je ffe rso n , S e c r e

O f A le x a n d e r H a m ilto n , S e c r e ta r y o f

t h e T r e a s u r y , in f a v o r o f t h e b i l l , 9 5 : S u p p l e m e n t a r y a c t s , 114.

CHAPTER

III.

M e m o r i a l s p r e s e n t e d f o r t h e r e n e w a l o f t h e c h a r t e r o f b a n k , 115: G a l l a t i n ’s
r e p o r t , o f M a r c h 2 , 1 8 0 9 , 116: D i v id e n d s o f o ld b a n k , 120: B i ll to e s t a b lis h a
N a t i o n a l B a n k , r e p o r t e d b y M r . L o v e , f ro m s e l e c t c o m m i t t e e , 1 3 2 : B i l l to r e
n e w t h e o ld c h a r t e r , r e p o r t e d b y M r . T a y l o r , o f S . C . , 1 3 3 : B i l l f o r t h e s a m e
p u r p o s e , r e p o r t e d 4 th o f J a n u a r y , 1 8 1 1 , b y M r . B u r w e l l , 1 3 7 : D e b a te s i n th e
H o u s e , o n t h i s b i l l , 139— 2 9 9 :

A y e s a n d n o e s o n p o s tp o n e m e n t o f b i l l , 2 7 4 :

M e m o r i a l i n S e n a t e fo r r e n e w a l — b ill r e p o r t e d — l e t t e r o f M r . G a l l a t i n , 300;
D e b a t e s i n S e n a t e o n b ill to r e n e w c h a r t e r , 30 2 — 446:
c a s t i n g v o te o f V i c e P r e s i d e n t , 4 4 6 :

B i l l r e j e c t e d , b y th e

D e b a t e i n H o u s e , o n M r . T a y l o r ’s b ill,

449— 4 71.

CHAPTER IV.
V a r i o u s p r o p o s i d o n s f o r t h e e s t a b l is h m e n t o f a N a t i o n a l B a n k , a n d p r o
c e e d i n g s t h e r e o n , 4 72— 480:

L e t t e r o f S e c r e t a r y D a l l a s , to C o m m i tt e e o f

W a y s a n d M e a n s , o n a b a n k 4 8 1 : M r . F i s k , o f N . Y . r e p o r t s a b ill, 487:
P r o c e e d i n g s a n d d e b a t e s t h e r e o n , 4 8 8 — 5 1 8 : S a m e b ill, a s a m e n d e d , 5 1 9 :
B ill r e je c te d — a y e s a n d n o e s, 534:

S e c r e t a r y D a lla s to M r . L o w n d e s , 535:

B i l l r e p o r t e d in S e n a t e , b y M r . K in g , 5 3 9 :

P a ss e d , a y e s a n d n o es, 549: R e

p o r t e d to t h e H o u s e , w i t h a m e n d m e n t s , a n d d e b a t e d , 5 4 9 — 5 5 9 :
a th ir d re a d in g , 560:

R e c o m m itte d , 561:

O r d e r e d to

A g a in o r d e r e d t o a t h i r d r e a d in g ,

5 6 2 : M r . W e b s t e r ’s m o tio n t o r e c o m m it, a n d s p e e c h , 5 6 2 - 3 : B i l l r e je c te d ,
b y c a s t i n g v o te o f S p e a k e r , 5 7 1 : V o t e r e c o n s i d e r e d , 5 7 4 : P a s s e d th e H o u s e ,
579:

A m e n d m e n t s i n H o u s e a n d S e n a t e , 580— 585:

B ill a s i t p a s s e d b o th

C O N T E N T S.

Houses, 585: P resident’s veto, 594: Bill reported in Senate, by M r. Barbour,
596: Passed the Senate, 605: Indefinitely postponed in the H ouse, 13th F eb
ruary, 1815, 608.
C H A P T E R V.
On the grant of the charier o f 1816—M r. M adison, on the defects of the
currency, 609: M r. Dallas proposes a bank to rem edy these defects, 612:
H is letter on currency, and a bank, 613—619: Bill reported by M r. Calhoun,
621: M r. Calhoun’s speech on bill, 630: M r. Sergeant moves to reduce capi
tal of bank, 635: M r. Sm ith’s speech on said motion, 636: M essrs. Sergeant,
Randolph, W a rd , and T u c k e r, of Virginia, speak on the motion, 640—646:
F u rth er debates on motion, by M r. W e b ste r, M r. C uthbert, M r. Hopkinson,
M r. Sharp, and M r. Calhoun, 646—653: M otion overruled, 653: M otion to
dispense with Government subscription o f seven millions, and debate on said
motion, 663—658: On the appointm ent of five directors by the G overnm ent—
debate in committee thereon, 661— 666: Same in the H ouse, w ith vote, 6W—
679: Speech of M r. Clay, 669: Various am endm ents proposed, 672—676:
Motion to locate bank at N ew Y ork, carried, 676: T h is vote reversed, 677:
Bill ordered to be engrossed, 680: Passed the H ouse, 681: Considered and
debated in the Senate, 683—692: Speech of M r. W e lls, 694: Passed th e S e
nate, with am endm ents, 706: A m endm ents considered in the H ouse, 707—
712: A greed to, 713: Bill approved by the P resid en t, 713.
C H A P T E R V I.
C ertain proceedings after the bank w ent into operation—M r. Spencer’s re
solution for appointing a com mittee to inspect bank books, &c., 714: C om
m ittee appointed—their report, 714— 732: M r. T rim ble’s motion for a scire
facia s, 732: M r. Spencer’s resolutions for w ithdraw ing G overnm ent de.posites, for scire fa c ia s, &c. 732: M r. Johnson’s resolution for a repeal of the
charter, 734: President Jackson’s suggestions in regard to th e bank, 734:
M r. McDuffie’s report in 1830, 735: M r. S m ith’s report in Senate, 772: L e t
ters of M r. M adison, in 1831, to C . J- Ingersoll, 778: Judicial decisions on
bank charter, 781: Justice M arshall’s opinion, 782.

LEGISLATIVE
A3TD

DOCUMENTARY

HISTORY

O P THE

U N IT E D S T A T E S

CHAPTER

BANK.

BANK O F N O R TH A M ER IC A :
P R O C E E D IN G S IN CONGRESS O N IT S O R IG IN A L IN ST IT U T IO N .

I n tracing the history of the B ank of the U nited S tates, it seems proper
to give some account of that moneyed institution, which, deriving its incipient
powers from the G eneral Government, may be considered as the prototype
o f the corporations which have more recently borne that nam e. T h e B ank of
N orth A m erica, which was the precursor of th a t of the U nited S tates, was
first incorporated in 1 7 8 1 , b y an ordinance of the A m erican Congress. Its
dependence, however, upon this creating pow er, was of short continuance:
for, in the next year, it accepted of a charter from the S tate of Pennsylvania,
and lias since been content to derive its powers from that source. A ll th at is
attem pted here, in relation to it, is to give the proceedings of Congress, on its
original institution, from the first introduction o f the plan of the bank, to its
final consummation, in the grant of the ordinance; and these are given in the
order ot their dates, and chiefly in the w ords of the Journals ot Congress,
from which they are taken.
_T h e proceedings on the enactm ent of this ordinance, together with those
given in the subsequent chapters, will place the reader in possession of the e n
tire legislation of Congress, both before and since the adoption of the consti
tution, upon the subject of a bank.

Proposition f o r the establishment o f a B a n k .
I n C o n g r e s s , June 2 1 , 1780.
A letter of this day, from the Board of W a r , was read, informing “ that a
num ber of patriotic persons, having formed a plan for the establishm ent of a
bank, whose object is th e public service; that th e directors have applied to
th a t B oard, to represent to Congress th e desire of the company th at a coinm itttee of this body may be appointed to confer w ith the inspectors and d irec
tors on the subject, to-morrow morning:” W hereupon,
Ordered, T h a t a committee of three be appointed, for the purpose above
mentioned. T he members chosen were, M r. Ellsw orth, M r. D uane, and M r.
Scott.
o

BANK

OF NORTH

AM ERICA.
J u n e 2 2 , 1 7 80.

T he com mittee appointed to confer w ith the inspectors and directors of the
proposed bank,brought in a report, which was read.
'l'lie committee also laid before Congress, the plan of the bank, com muni
cated to them a t the said conference, which being read, Congress, thereupon,
came to the following resolutions:
W hereas a num ber of the patriotic citizens o f P ennsylvania have com
m unicated to Congress a liberal offer, on their own cred it, and by th eir own
exertions, to supply and transport three millions of rations, an d 300 hogsheads
of rum , for the use of the arm y, anil have established a b an k , lor the sole p u r
pose ot obtaining and transporting the said supplies, with the greater facility
and despatch: And w hereas, on the one hand, the associators? anim ated to
this laudable exertion by a desire to relieve the public necessities, m ean not
to derive from it the least pecuniary advantage; so, on the other, it is ju s t and
reasonable, that they should be fully reim bursed and indem nified: T herefore,
Resolved unanim ously, T h a t Congress entertain a high sense of the liberal
offer of the said associators to raise and transport the beforem entioned su p
plies for the arm y, and do accept the same as a distinguished proof of their
patriotism .
Resolved, T h a t the faith of the U nited S tates be, and the same hereby is,
pledged, to the subscribers to the said bank, for their effectual reim burse
m ent in the premises.
Resolved, T h a t the Board of T reasu ry be directed to deposite, in the said
bank, bills of exchange in favor o f the directors thereof, on the m inisters of
these U nited States in E urope, or any of them , and in such sums as shall be
thought convenient, but not to exceed, in the whole, £150,000 sterling; th at
the said bills are to be considered, not only as a support of the cred it of the said
bank, but as an indem nity to the subscribers for all deficiences of losses and ex
penses which they may sustain, on account of their said engagem ents, and which
shall not, within six months from the date hereof, be m ade good to them out of
the public treasury; and, in case of failure, such a proportion of said bills as
shall be requisite to make good the deficiency, shall be negotiated for th a t p u r
pose, by the said directors, and the residue return ed into the treasury.
Resolved, T h at, upon representation m ade, th a t the bank stands in need of
occasional assistance, Congress will advance as much of their cu rren t money
as can be spared from other services.
Resolved, T h a t a standing com mittee of Congress be appointed, to confer
with the officers of the said bank, as occasion may require. T h e members
chosen are M r. E llsw orth, M r. D uane, and M r. Scott.

J u n e 2 3 , 1780.

Ordered, T h at tw o members be added to the com m ittee appointed to con
fer w ith the directors and inspectors of th e proposed bank, in the room of
M r. D uane and M r. E llsw orth, w hoare absent. T h e members chosen are
M r. Livingston and M r. Adam s.
W h e th e r the preceding proposition and resolutions had any im m ediate
connexion w'ith the plan th a t was subsequently subm itted, as hereafter exhi
bited, by Robert M orris, and adopted by Congress, does not appear.
Proceedings on the incorporation o f the B a n k o f N o rth A m erica.
M

2 6 , 1 781.

On the report of a com m ittee, consisting o f M essrs. W itherspoon, S u lli
van, M. Sm ith, and C lym er, to whom was referred a le tte r from M r. R . M o r
ris, with the plan of a bank:
Resolved, l hat Congress do approve of the plan for establishing a national
bank, in these U nited S tates, subm itted to their consideration by R . M orris,
oil the 17th M ay, 1 7 8 1 , and that they will prom ote and support the sam e, by

CHA.KTfc.RED

BY CON GRESS.

such ways and means, from tim e to tim e, as may appear necessary for the in
stitution, and consistent with the public good. .
—roonhlv tn ihp
T h a t the subscribers to the said bank shall be incorporated .agreeably- to the
principles and term s of the plan, under the name of the I resid en t,D » ectois,
an d Company of the Bank ol N orth America,” so soon j h e ^utecnp on
shall be filled, the directors and president chosen, and application tor that
purpose made to Congress, by the president and directors elected.
On the question to agree to this paragraph, the yeas and nays being le
quired by M r. T . Sm ith, were as follows:

NewHampshire,
Massachusetts,

M o d e Island,
Connecticut,
N ew Jersey,

.
.
.

Pennsylvania ,

Maryland ,
Virginia,

North Carolina,
South Carolina,
Georgia,

.
.

Mr- Sullivan,
Liverm ore,
Mr. L ovell,
W ard,
Mr. Varnum ,
Mr. H untington,
Mr. W i t h e r s p o o n ,
H ouston,
Mr. Clymer,
T . Sm ith,
Mr. Jenifer,
Carroll,
Mr. Jones,
Madison,
Bland,
M. Sm ith,
Mr. Sharp,
Johnson,
Mr. Matthews,
Bee,
M otte,
Mr. W alton,
Few ,
Ilow ly,

ay. ? av
ay. i '
no. ? no
no. J
ay.
ay.
ay. ? ay.
ay. 3
ay. \ divided.
no. >
ay. ay.
ay. t
ay.-.
no. ) av
ay. r
a y ■J
ay. 7 a
ay. k
ay.")
ay. Cay.
ay. j
a y .}
ay. Cay.
ay. J

S o it was resolved in the affirmative.
Resolved, T h a t it be recommended to the several S tates, by proper laws
for that purpose, to provide that no other bank or bankers sliall be established
or perm itted within the said States, respectively, during the wTar.
Resolved, T h a t the notes hereafter to be issued by the said bank, payable
on dem and, shall be receivable in paym ent of all taxes, duties, and debts, due,
or th at may become due or payable to the U nited States.
Resolved, T h at Congress will recommend to the several Legislatures to
pass laws, making it felony, without benefit of clergy, for any person to
counterfeit bank notes, or to pass such notes, knowing them to be counter
feit; also, making it felony, without benefit of clergy, for any president, in
spector, director, officer, or servant of the bank, to convert any of the pro
perty, money, or credit, of the said bank, to his own use, or in any other way
to be guilty of fraud or em bezzlem ent, as an officer or servant of the said
bank.
T h e plan of the bank above referred to is as follows:
1st. T h a t a subscription be opened for 400,000 dollars, in shares of 400 dol
lars each, to be paid in gold or silver.
2d. T h a t the subscription be paid into the hands of George Clym er and
John N ixon, Esquires, or their agents.
3d. T h a t every subscriber of less than five shares shall pay the whole sum
on the day of his subscription.
4th. T h a t every subscriber of five shares or upwards pay one half of the
sum on the day of his subscription, and the other half within three months of
th a t day.
5th. That every holder of a share shall be entitled to vote by himself, his
ilgent, or proxy, properly appointed, a t all elections of directors, and that he

f 'j

HANK O F

NORTH

AM ERICA.

have as many votes as lie holds shares; and that every subscriber rtiay sell o f
transfer his share or shares at pleasure, the transfer being made in the bank
hooks, in presence and with the approbation of the proprietor, or his lawful
attorney, the purchaser then to become entitled to th e right of voting, &c.
6 th. T h a t there be tw elve directors chosen from among those entitled to
vote, who, at their first meeting,-shall choose one as president.
7th. T h a t there be a m eeting of directors quarterly , for the.purpose of regu
lating the aftairs of the bank, and seven of the directors to m ake a B oard, an d
that the Board have power to adjourn from time to tim e.
8 th. T h a t the Board of Directors determ ine the m anner of doing business,,
and the rules aird forms to be pursuedT appoint the various officers which they
may find necessary, and dispose o f the money and credit of the bank, lor the
interest and benefit of the proprietors, and m ake, from tiuie to tim e,su ch divi
dends out of the profits, as they may think proper.
9th. T h a t the Board be em powered, from tim e to tim e, to open new subscrip
tions for the purose of increasing the capital of the ban k , on such term s an d
conditions as they shall think proper.
1 0 th. T h a t the Board, at every quarterly m eeting, shall choose two d irecto rs
to inspect and control the business of the bank for the ensuing three months..
11 tn. T h a t the inspectors, so chosen, shall, on the evening of every day,_S u n
days excepted, deliver to the superintendent of the finances of A m erica, a
state of the cash account, and of tn e notes issued and received.
12th. T h a tth e bank notes,'payable on dem and, sh all,b y law ,be m ade receiv
able in the duties and taxes of every State in the Union, and from the respec
tive States, by the treasury of the U nited S tates, as specie.
13th. T h a t the superintendent of the finances of A m erica shall have a rig h t,
a t all tim es, to examine into the affairs of th e bank, and for th at purpose
shall have access to all the books and papers.
14th. T h a t any director orofficer ot the bank, who shall convert any o f th e
properly, moneys, or credits thereof, to his own use, or shall, any other w ay,
be guilty of fraud, or em bezzlem ent, shall forleit all his share or stock to the
company.
15th. T h a t laws shall be passed, making it felony, without benefit of clerg y ,
to commit such fraud or em bezzlem ent.
16th. T h a t the subscribers shall be incorporated un d erth e name of the P re
sident, D irectors, and Com pany, of the Bank of N orth A m erica.”
17th. T h a t none of the directors shall be entitled to any pecuniary advantage
for his attendance on the duties of his offiee as director, or as president o r
inspector, unless an alteration, in this respect, shall hereafter be made, by the
consent of a m ajority of the stockholders, a t a general election.
18th. T h at, as soon as the subscription shall be filled, George C lym er an d
John N ixon, Esquires, shall publish a list of the nam es and sums respec
tively subscribed, w ith the place of abode of the subscribers, and appoint a
day tor the choice of directors, to whom, when chosen, they shall deliver over
the money by them received.
D

ecem ber

2 9 , 1781.

A n ordinance for incorporating the subscribers to the national bank w as
read a first tim e.
Ordered, T h a t M onday next be assigned for a second reading.
M o n d a y , December 3 1 s /.
T h e said ordinance was read a second and third tim e, and agreed to , as fol
lows:

A n Ordinance to incorporate the subscribers to the B a n k q f N o rth A m erica.
W hereas Congress, on the 26th day of M ay last, d id , from a conviction o f
the support which the finances of the U nited States would receive from the
establishm ent of a N ational B ank, approve a plan for such an institution, su b
m itted to their consideration by R obert M o m s , Esq. and now lodged among

CHARTERED

BY CONGRESS.

the archives of Congress, and" did engage to promote the same by the most
effectual means: And whereas the subscription thereto is now tilled, from an
expectation of a charter of incorporation from Congress, the directors and
president are chosen, and application hath been made to Congress, by the
said president and directors, for an act of incorporation: And whereas the
exigencies of the United States render it indispensably necessary that such
an act be immediately passed:

He it therefore ordained and it is hereby ordained by the United Stales
in Congress assembled, That those who are, and those who shall become, sub

scribers to the said bank, be, and forever after shall be, a corporation and body
politic, to all intents and purposes, by the name and style of “ H ie President,
Directors, and Company, o f the B a n k o f N orth A m erica.’’’
A n d be it fu rth e r ordained , That the said corporation are hereby declared

and made able and capable, in law, to have, purchase, receive, possess, enjoy,
and retain, lands, rents, tenements, hereditaments,goods, chattejs, and effects,
of what kind, nature, or quality, soever, to the amount of ten mil (ions of Spa
nish silver milled dollars, and no more; and, also, to sell, grant, demise, alien,
or dispose of, the same lands, rents, tenements, hereditaments"/goods, chattels,
and effects.
A n d be it fu rth e r ordained , That the said coporation be, aud shall be, for
ever, hereafter, able and capable, in law, to sue and be sued, plead and be im
pleaded, answer and be answered unto, defend and be defended, in courts
of record, or any other place whatsoever, arid to do and execute all and singu
lar other matters and things that to them shall or may appertain to do.
A n d be it fu rth e r ordained , That, for the well governing of the said cor
poration and the ordering of their affairs, they shall have such officers as they
shall hereafter direct orappoint. Provided, nevertheless, That twelve direc
tors, one of whom shall be the president of the corporation, be of the number
of their officers.
A n d be it fu rth e r ordained , That Thomas Willing be the present president,
and that the said Thomas Willing and Thomas Fitzsimmons, John Maxwell
Nesbit, James Wilson, Henry Hill, Samuel Osgood, Cadwallader Morris,
Andrew Caldwell, Samuel Inglis, Samuel Meredith, William Bingham,
Timothy Matlack, be the present directors of the said corporation; and shall
so continue until another president and other directors shall be chosen, ac
cording to the laws and regulations of the said corporation.
A n d be it fu rth e r ordained, That the president and directors of the said
corporation shall be capable of exercising such power for the well governing
and ordering of the affairs of the said corporation, and of holding such occa
sional meetings for that purpose, as shall be described, fixed, and determined,
by the laws, regulations, and ordinances, of the said corporation.
A n d be it fu rth e r ordained ? That the said corporation may make, ordain,
establish, and put in execution, such laws, ordinances, and regulations, as
shall seem necessary and convenient to the government of the said corpora
tion.
P rovided, always, That nothing herein before contained shall be construed
to authorize the said corporation to exercise any powers, in any of the United
States, repugnant to the la,ws or constitution of such State.
A n d be. it fu rth e r ordained, That the said corporation shall have full power
and authority to make, have, and use, a common seal, with such device and
inscription as they shall think proper, and the same to break, alter, and renew,
at their pleasure.
A n d be it fu rth er ordained, That this ordinance shall be construed and
taken most favorably and beneficially for the said corporation.
Done by the United States in Congress assembled, &c.
Resolved, That it be recommended to the Legislature of each State to pass
such laws as they may judge necessary, for giving the foregoing ordinance its
full operation, agreeably to the true intent and meaning thereof, and accord-

BA N K

NO RTH

AM ERICA

itig to the recom m endations contained in th ^ resolutions of the 26th day ol
M a y l a s t.
N o t e . — By th e kindness o f th e author, the editors iire enabled to lay before th eir
readers the following1interesting' e x tra ct in relation to this b ank, from th e life o f Gov ern eu r M om s, recently published.
“ One o f the first acts o f th e S up erin ten d en t o f Finance was to propose th e plan of
a bank, w hich was incorporated by Congress, u n d e r the nam e o f the B a n k o f North
America. Mr. G overneur Morris says, in a le tte r to a friend, w ritte n not long before his
death, * the first bank in this country was planned by yo u r hum ble servant.’ By this,
h e probably m eant, th at he drew u p th e plan o f th e bank, and th e observations accom
panying it, which were presented to Congress, and not, th a t he, individually, origi
nated the schem e. T his was doubtless m atured in conjunction w ith th e superintendent.
A warm friendship had subsisted b etw een them for some tim e, w hich, it m ay be p re
sum ed, was increased by a similarity in th e ir turn o f m ind for financial pursuits. T o
Ham ilton, also, may p roperly be ascribed a portion o f th e m erit in form ing this bank.
A bout tw o w eeks before th e plan was sen t to C ongress, H am ilton w rote a le tte r to
R obert Morris, enclosing an elaborate p ro jec t for a bank. In a le tte r acknow ledging
the reception o f this paper, the financier speaks o f it w ith com m endation. H e says,
‘I have read your perform ance w ith th a t attention w hich it ju stly deserves, and finding
m any parts o f it to coincide w ith my ow n opinions on the subject, it naturally stre n g th
ened th at confidence, w hich every m an ought to possess, to a certain d e g ree , in his
own judgm ent.* H e th en tells him th a t h e shall com m unicate it to th e d irectors o f
the bank, to aid them in th e ir deliberation on certain points, w hich it was not th o u g h t
e xpedient to cm brace in the plan itself, particularly th a t o f interw eaving a security
w ith th e capital.
“ T his bank had an extraordinary effect in re storing public and private c red it in th e
country, and was o f immense utility in aiding th e future operations o f th e financier,
although it was begun w ith the small capital o f $400,000. H am ilton’s p ro je c t contem
plated a vastly larg er sum, in w hich Mr. Mon-is ag reed w ith him, b u t its im m ediate
success, on so large a scale, was doubtful, and i f it failed in th e outset, it could n o t b e
revived; w hereas, by beginning w ith a small capital, and establishing a c red it w ith
the public, gradually, it w ould be easy afterw ards to increase th e am ount, and, in the
end, all needful advantages w ould be derived, to the utm ost e x te n t o f banking facilities.”
— See Sparks’ L ife o f Governeur Morris, vol. 1, p a g e 235.
In the same valuable w ork will b e found, also, an address o f Mr. M orris to th e G en
eral Assembly o f Pennsylvania, in b e h alf o f th e said bank, in 1785, on an occasion
w hen a proposition had been m ade to abolish its charter. I t is w ritten w ith uncom
mon ability and know ledge o f the su b je ct, considering th e infancy, at th a t period, o f
banking operations in this country.— See vol. I I I . page 437.

CHAPTER

IT.

BANK OF T H E U N IT E D ST A T E S.
PROCEEDINGS ON T H E GRANT OF T H E FIRST C H A R TER , IN 1 7 9 1 .
H o u s f. o r KEpnESENTATiVES,

First Congress, T h ird Session. >
O n (lie 14th December, 1790, as appears by the Journals of the House of
Representatives of that date, (see vol. 1, page 336) the Secretary ot the
Treasury, A lexander Hamilton, transm itted to the House a letter, accom
panying his Report, No. 2 , of a plan for the institution of a N ational B ank;
which was read and ordered to be referred to a Committee of the W hole
House, on that day se’nnight.
On the 23d of December, it was
Ordered, T h at the C lerk of the House do communicate to the Senate that
this House has received a report from the Secretary of the T reasury, contain
ing a plan for a National Bank, and that he carry an attested copy of the said
report to the Senate. T he report was as follows:

In obedience to the order of the House of Representatives, of the ninth day
of August last, requiring the-Secretary of the T reasury to prepare and re
port, on this dayj such f u rth * provision as may, in his opinion, be neces
sary for establishing the public credit, the said Secretary further respect
fully reports:
•
T h at, from a conviction that a N ational Bank is an institution of primary
importance to the prosperous administration of the finances, and would be of
the greatest utility in the operations connected with the support of the public
credit, his attention has been drawn to devising the plan of such an institu
tion. upon a scale which will entitle it to the confidence, and be likely to
render it eoual to the exigencies of the public.
Previously to entering upon the detail of this plan, he intreats the in d u l
gence of the House towards some preliminary reflections naturally arising out
of the subject, which he hopes wilt be deemed neither useless nor out of place.
Public opinion being the ultim ate arbiter of every measure of government, it
can scarcely appear improper, in deference to that, to accompany the origi
nation of any new proposition with explanations, which the superior informa
tion of those to whom it is immediately addressed, would render superfluous.
I t is a fact, well understood, that public banks have found admission and
patronage among the principal and most enlightened commercial nations.
T hey have successively obtained in Italy, G erm any, H olland, E ngland, and
France, as well as in the United States. And it is a circum stance which
cannot hut have considerable weight, in a candid estim ate of their tendency,
th at, after an experience o f centuries, there exists not a question about their
utility, in the countries in which they have been so long established. T heo
rists and men of business unite in the acknowledgm ent of it.
T rad e and industry, wherever they have been tried, have been indebted to
them for im portant aid. And government has been repeatedly under Ihe
greatest obligations to them in dangerous and distressing emergencies. T hat

BANK OF T H E U N ITE D ST A T E S.

of the U nited States, as well in some of the most critical conjunctures of the
late w ar, as since the peace, lias received assistance from those established
among us, with which it could not have dispensed.
W ith this twofold evidence before us, it might be expected that there would
be a perfect union of opinions in their favor. Y et doubts have been en ter
tained; jealousies and prejudices have circulated; and? though the experi
m ent is every day dissipating them, within the spheres in which effects are
best known, yet there are still persons by whom they have not been entirely
renounced. T o rive a full and accurate view of the subject, would be to
m ake a treatise of a report; but there are certain aspects in which it may be
cursorily exhibited, which may perhaps conduce to a ju st impression ot its
merits. These will involve a comparison of the advantages with the disad
vantages, real or supposed, of such institutions.
T h e following are among the principal advantages of a bank:
F irst. The augmentation of the active or productive capital of a country.
Gold and silver, when they are employed merely as the instrum ents of e x
change and alienation, have been, not improperly, denominated dead stock;
but when deposited in banks, to become the basis of a paper circulation, which
tik e s their character and place, as the signs or representatives ol value, they
then acquire life, or, in other words, an active and productive quality. T his
idea, which appears rather subtile and abstract, in a general form, may be
made obvious and palpable, by entering into a few particulars. I t is evident,
for instance, that the money which a merchant keeps in his chest, waiting
for a favorable opportunity to employ it, produces nothing till that opportu
nity arrives. B ut if, instead of locking it up in this manner, he either deposites it in a bank, or invests it in the stock of a bank, it yields a profit
d u r i n g the interval, in which he partakes, op»not, according to the choice he
may itave made of being a depositor or a proprietor; and when any advanta
geous speculation offers, in order to be able to embrace it, he has only to
withdraw his money, if a depositor, or, if a proprietor, to obtain a loan from
the bank, or to dispose
his stock—an alternative seldom or never attended
with difficulty, when tffc'affairs of the institution are in a prosperous train.
His money, thus deposited or invested,'''is^i fund upon which himself and
others can borrow to a much 'larger amount. It is a well established fact,
that banks in good credit can Circulate a far greater sum than the actual
quantum of their capital in gold and silver. T he extent of the possible ex
cess seems indeterm inate; though it has been conjecturally stated at the pro
portions of two and three to one. This faculty is produced in various ways.
Is/. A great proportion of the notes which are issued, and pass current as
cash, are indefinitely suspended in circulation, from the confidence which
each holder has, that he can, at any moment, turn them into gold and silver.
iidly. Every loan which a bank makes, is, in its first shape, a credit given to
the borrower on its books, the amount of which it stands ready to pay, either
in its own notes, or in gold or silver, at his option. B ut, in a great number of
cases, no actual payment is made in either. T he borrower frequently, by a
check or order, transfers his credit to some other person, to whom he has a
paym ent to make; who, in his turn, is as often content with a similar credit,
because he is satisfied that he can, whenever he pleases, either convert it
into cash, or pass it to some other hand, as an equivalent for it. And in this
manner the credit keeps circulating, performing in every stage the office of
money, till it is extinguished by a discount with some person who has a pay
ment to make to the bank, to an equal or greater amount. T hus large sums
are lent and paid, frequently through a variety of hands, without the in ter
vention of a single piece of coin. 3dly. T here is always a large quantity of
gold and silver in the repositories of the bank, besides its own stock, which
is placed there, with a view partly to its sate keeping, and partly to the ac
commodation of an institution, w'hich is itself a source of general accommoda
tion. These deposites are of immense consequence in the operations of a
bank. Though liable to be redrawn at any moment, experience proves that

C H A R T E R OF 1791.

the money so much oftener changes proprietors than place, and that what is
draw n out is generally so speedily replaced, as to authorize the counting
upon the sums deposited, as an effective fu n d , which, concurring with the
stock of the bank, enables it to extend its loans, and to answer all the d e
mands for coin, whether in consequence of those loans, or arising from the
occasional return of its notes.
These different circumstances explain the manner in which the ability of a
bank to circulate a greater sum than its actual capital in coin^ is acquired.
T h is, however, m ust be gradual, and m ust be preceded by a firm establish
m ent of confidence—a confidence which may be bestowed on the most rational
grounds, since the excess in question will always be bottomed on good secu
rity of one kind or another. T his, every well conducted bank carefully re
quires, before it will consent to advance either its money or its credit, and
where there is an auxiliary capital, (as will be the case m the plan hereafter
subm itted) which, together with the capital in coin, define the boundary that
shall not be exceeded by the engagements of the bank, the security may, con
sistently with all the maxims of a reasonable circumspection, be regarded as
complete.
T h e same circumstances illustrate the tru th of the position, that it is one
o f the properties of banks to increase the active capital of a country. This,
in other words, is the sum of them: the money of one individual, while he is
waiting for an opportunity to employ it, by being either deposited in the bank
for safe keeping, or invested in its stock, is in a condition to adm inister to
the wants of others, without being put out of his own reach when occasion
presents. T his yields an extra profit, arising from w hat is paid for the use of
nis money by others, when he could not himself m ake use of it, and keeps
the money itself in a state of incessant activity. In the almost infinite vicis
situdes and competitions of mercantile enterprise, there never can be danger
o f an intermission of dem and, or that the money will remain for a moment
idle in the vaults of the bank. T his additional employment given to money,
and the faculty of a bank to lend and circulate a greater sum than the amount
of its stock in coin, are, to all the purposes of trade and industry, an absolute
increase of capital. Purchases and undertakings, in general, can be carried
on by any given sum of bank paper or credit, as effectually as by an equal
sum o f gold and silver. A nd thus, by contributing to enlarge tne mass of
industrious and commercial enterprise, banks become nurseries of national
wealth—a consequence as satisfactorily verified by experience, as itis clearly
deducible in theory.
Secondly. G reater facility to the government, in obtaining pecuniary aids,
especially in sudden emergencies. T his is another, and an undisputed advan
tage of public banks—one which, as already rem arked, has been realized in
signal instances among ourselves. T he reason is obvious; the capitals of a
great number of individuals are, by this operation, collected to a point, and
placed under one direction. T he mass formed by this union, is, in a certain
sense, magnified by the credit attached to it; and while this mass is always
ready, and can at once be put in motion, in aid of the government, the in te r
est of the bank to afford that aid, independent of regard to the public safety
and welfare, is a sure pledge for its disposition to go as far in its compliances
as can in prudence be desired. T here is, in the nature of things, as will be
more particularly noticed in another place, an intim ate connexion of interest
between the government and the bank of a nation.
T hirdly. T he facilitating of the paym ent of taxes. T his advantage is pro
duced in two ways. Those who are in a situation to have access to the bank,
can have the assistance of loans, to answ er, with punctuality, the public calls
upon them. T his accommodation has been sensibly felt in tne paym ent of the
duties heretofore laid by those who reside where establishments of this nature
exist. T his, however, though an extensive, is not an universal benefit. T he
other way in which tne effect here contemplated is produced, and in which
the benefit is general, is the increasing of the quantity of circulating m edium ,
and.the quickening of circulation. T he m anner in which the first happens,
3

BANK OF T H E UN ITED STA TES.

has already been traced. The last may require some illustration. When
payments are to be made between different places, having an intercourse ot
business with each other, if there happen to be no private bills at market, and
there are no bank notes which have a currency in both, the consequence is,
that coin must be remitted. This is attended with trouble, delay, expense,
and risk. If, on the contrary, there are bank notes current in both places,
the transmission of these by the post, or any other speedy or convenient con
veyance, answers the purpose; and these again, in the alternations of de
mand, are frequently returned, very soon alter, to the place from whence
they were first sent: whence the transportation and re-transportation of the
metals are obviated, and a more convenient and more expeditious medium ot
payment is substituted. Nor is this all: the metals, instead of being sus
pended from their usual functions during this process of vibration from place
to place, continue in activity, and administer still to the ordinary circulation,
which, of course, is prevented from suffering either diminution or stagnation.
These circumstances are additional causes of what, in a practical sense, or
to the purposes of business, may be called greater plenty of money. And
it is evident, that whatever enhances the quantity of circulating money, adds
to the ease with which every industrious member of the community may ac
quire that portion of it of which he stands in need, and enables him the better
to pay his taxes, as well as to supply his other wants. Even where the cir
culation of the bank paper is not general, it must still have the same effect,
though in a less degree: for, whatever furnishes additional supplies to the
channels of circulation, in one quarter, naturally contributes to keep the
streams fuller elsewhere. This last view of the subject serves both to illus
trate the position that banks tend to facilitate the payment of taxes, and to
exemplify their utility to business of every kind in which money is an agent.
It would be to intrude too much on the patience of the House, to prolong
the details of the advantages of banks; especially, as all those which might
still be particularized, are readily to be interred as consequences from those
which nave been enumerated. Their disadvantages, real or supposed, are
now to be reviewed. The most serious of the charges which have been brought
against them, are,
That they serve to increase usury;
That they tend to prevent other kinds of lending;
That they furnish temptations to overtrading;
That they afford aid to ignorant adventurers, who disturb the natural and
beneficial course of trade;
That they give to bankrupt and fraudulent traders a fictitious credit, which
enables them to maintain false appearances, and to extend their impositions:
and, lastly,
That they have a tendency to banish gold and silver from the country.
There is great reason to believe that, on a close and candid survey, it will
be discovered that these charges are either destitute of foundation, or that, as
far as the evils they suggest have been found to exist, they have proceeded
from other, or partial, or temporary causes; are not inherent in tlie nature
and permanent tendency ot such institutions; or are more than counterba
lanced by opposite advantages. This survey shall be had, in the order in which
the charges have been stated. The first of them is—
That banks serve to increase usury.
It is a truth, which ought not to be denied, that the method of conducting
business, which is essential to bank operations, has, among us, in particular
instances, given occasion to usurious transactions. The punctuality in pay
ments, which they necessarily exact, has sometimes obliged those who have
adventured beyond both their capital and their credit, to procure money at
any price, and, consequently, to resort to usurers for aid.
But experience and practice gradually bring a cure to this evil. A general
habit ot punctuality among traders is the natural consequence of the neces

C H A R T E R OF 1791.

sity or observing it with the bank; a circumstance which, itself, more than
compensates for any occasional ill which may have sprung from that necessi
ty, in the particular under consideration. A s far, therefore, as traders depend
on each other for pecuniary supplies, they can calculate their expectations
with greater certainty; and are in proportionally less danger of disappoint
m ents, which might compel them to have recourse to so pernicious an expe
dient as that of borrowing at usury; the mischiefs of which, after a few ex
amples, naturally inspire great care in all but men of desperate circum stan
ces, to avoid the possibility of being subjected to them. One, and not the
least of these evils incident to the use of that expedient, if the fact be known,
or even strongly suspected, is loss of credit with the bank itself.
'Hie directors o f a bank, too, though, in order to extend its business and its
popularity, in the infancy of an institution, they may be tempted to go fur
ther in accommodation than the strict rules of prudence will w arrant, grow
more circumspect, of course, as its affairs become better established, and
as evils of too great facility are experimentally dem onstrated. T hey be
come more attentive to the situation and conduct of those with whom they
■deal; they observe more narrowly their operations and pursuits; they econo
mize the credit they give to those of suspicious solidityj they refuse it to those
whose career is more manifestly hazardous. In a word, in the course of
practice, from the very nature of things, the interest will make it the policy
o f a bank to succor the w ary and industrious; to discredit the rash and un
thrifty; to discountenance both usurious lenders and usurious borrowers.
T here is a leading view, in which the tendency of banks will be seen to be,
to abridge rather than to promote usury. T his relates to their property of in
creasing the quantity and quickening the circulation o f money. I f it be evi
d en t that usury will prevail or diminish, according to the proportion which
the demand for borrowing bears to the quantity of money a t m arket to be
len t; whatever has the property ju st mentioned, whether it be in the shape
-of paper or coin, by contributing to render the supply more equal to the de
m and, m ust tend to counteract tne progress of usury.
B u t bank lending, itis pretended, is an impediment to other kinds of lend
ing; which, by conlining the resource of borrowing to a particular class, leaves
the rest of the community more destitute, and, therefore, more exposed to
the extortions of usurers. A s the profits o f bank stock exceed tne legal
rate o f interest, the possessors of money, it is urged, prefer investing it iu
th at article to lending it a t this rate; to which there are the additional mo
tives of a more prom pt command of the capital, and of more frequent and
exact returns, without trouble or perplexity in the collection. This consti
tutes the second charge which has been enum erated.
T he fact on which this charge rests is not to be adm itted without several
Qualifications; particularly in reference to the state of things in this country.
F irst. T he great bulk o f the stock of a bank will consist of the funds of men
in trade, among ourselves, and moneyed foreigners; the former of whom could
not spare their capitals out of their reach, to be invested in loans for long
periods, on mortgages or personal security; and the latter of whom would
n o t be willing to be subjected to the casualties,^delays, and em barrasments,
of such a disposition of their money, in a distant country. Secondly. T here
■will always be a considerable proportion of these who are properly the money
lenders of a country, who, from that spirit of caution which usually character
izes this description of men, will incline rather to vest their funds in m ort
gages on real estate, than in the stock of a bank, which they are apt to consi
d e r as a more precarious security.
These considerations serve, in a material degree, to narrow the foundation
o f the objection, as to the point of fact. B ut there is a more satisfactory an
sw er to i t T he effect supposed, as far as it has existence, is temporary. T he
reverse of it takes place in the general and perm anent operation of the thing.
T h e capital of every public bank will, of course, be restricted within a cer
tain defined limit. It is the province o{ legislative prudence so to adjust this
dimit, that- while it will not be too contracted for the demand which the course

2 (j

BANK OF T H E UN ITED ST A T E S.

of business may create, and for the security which the public ought to have
for the solidity of the paper which may be issued by the bank, it will still be
within the compass of the pecuniary resources of the community; so that there
may be an easy practicability of completing the subscriptions to it. W hen
this is once done, the supposed effect of necessity ceases. T here is then no
longer room for the investment of any additional capital. Stock may indeed
change hands by one person selling and another buying; but the money which
the buyer takes out of the common mass to purchase the stock, the seller r e
ceives and restores to it. Hence, the future surplusses which may accumulate
m ust take their natural course, and lending at interest must go on as if there
were no such institution.
I t must, indeed, flow in a more copious stream. T he bank furnishes an
extraordinary supply for borrowers, within its immediate sphere. A larger
supply consequently remains for borrowers elsewhere. In proportion as the
circulation of the bank is extended, there is an augmentation of the aggre
gate mass of money for answering the aggregate mass of demand, lie n ee ,
greater facility in obtaining it for every purpose.
I t ought not to escape without a rem ark, that, as far as the citizens of other
countries become adventurers in the bank, there is a positive increase of the
gold and silver of the country. It is true. that, from this, a half yearly rent
is draw n back, accruing from the dividends upon the stock. B ut as this
rent arises from the employment of the capital by our own citizens, it is pro
bable that it is more than replaced by the profits of that employment. I t is
also likely that a part of it is, in the course of trade, converted into the pro
ducts of our country; and it may even prove an incentive, in some cases, to
emigration to a country, in which the character of citizen is as easy to be a c
quired as it is estimable and important. This view of the subject furnishes
an answer to an objection which has heen deduced from the circumstance
here taken notice of, namely, the income resulting to foreigners from the p art
of the stock owned by them, which has been represented as tending to drain
the country of its specie. Ii> this objection, the original investm ent of the
capital, and the constant use of it afterw ards, seem both to have been over
looked.
T hat banks furnish temptations to overtrading, is the third of the enum erated
objections. T his must mean, that, by affording additional aids to m ercantile
enterprise, they induce the merchant sometimes to adventure beyond th e
prudent o r salutary point B ut the venr statem ent of the thing shows that the
subject of the charge is an occasional ill, incident to a general good. C redit
of every kind, Cas a species of which only, can bank lending have the effect
supposed) must be, in different degrees, chargeable with the same inconve
nience. I t is even applicable to gold and silver, when they abound in circula
tion. B ut would it be wise, on this account, to decry the precious m atais, to
root out credit, or to proscribe the means of that enterprise which is the m ain
spring of trade, and a principal source of national w ealth, because it now and
then runs into excesses, of which overtrading is one?
I f the abuses of a beneficial thing are to determ ine its condemnation, th ere
is scarcely a source of public prosperity which will not speedily be closed.
In every case the evil is to be compared w ith the good; and in the present
case, such a comparison will issue in this, that the new and increased energies
derived to commercial enterprise, from the aid of banks, are a source of gen
eral profit and advantage, which greatly outweigh the partial ills, the over
trading of a few individuals a t particular tim es, or of numbers in particular
conjunctures.
T he fourth and fifth charges may be considered together. These relate to.
the aid which is sometimes afforded by banks to unskilful adventurers an d
fraudulent traders* These charges also have some degree of foundation,
though far less than has been pretended; and they add to the instances of
Pa''tial ills, connected with more extensive and overbalancing benefits.
T he practice of giving fictitious credit taim proper persons, is one of those
evils which experience, guided by interest, speedily corrects. T he bank itse lf

C H A R TE R OF 1791.

is in so much jeopardy of being a sufferer by it, that it has the strongest of all
inducements to be on its guard. I t may not only be injured immediately by
the delinquencies of the persons to whom such credit is given, b ut eventually
by the incapacities of others, whom their impositions or failures may have
ruined.
.
. . . .
N o r is there much danger of a bank’s being betrayed into this error from
w ant of information. T he directors themselves being, for the most part, se
lected from the class of traders, are to be expected to possess individually an
accurate knowledge of the characters and situations of those who come within
that description. A nd they have, in addition to this, the course of dealing
of the persons themselves with the bank, to assist their judgm ent, which is
in most cases a good index of the state in which those persons are- T h e a rti
fices and shifts which those in desperate or declining circumstances are obli
ged to employ, to keep up the countenance which the rules of the bank r e
quire, and the train of their connexions, are so many prognostics, not difficult
to be interpreted, of the fate which awaits them. H ence, it not unfrequently
happens, that banks are the first to discover the unsoundness ot such charac
ters, and, by withholding credit, to announce to the public that they are not
entitled to it.
I f banks, in spite of every precaution, are sometimes befrayed into giving
a false credit to the persons described, they more frequently enable honest
and industrious men, of small, or, perhaps, of no capital, to undertake and pro
secute busiuess with advantage to themselves and to the com munity; and as
sist merchants, of both capital and credit, who meet with fortuitous and u n
foreseen shocks, which might, without such helps, prove fatal to them and to
others, to make head against their misfortunes, and finally to retrieve their
affairs— circumstances which form no inconsiderable encomium on the utility
of banks.
B u t the last and heaviest charge is still to be examined: this is, that banks
tend to banish the gold and silver of the country ,
T h e force of this objection rests upon their being an engine of paper credit,
which, by furnishing a substitute for the m etals, is supposed to promote their
exportation. I tis an objection, which, if it has any foundation, lies not against
banks peculiarly, but against every species of paper credit.
T h e most common answer given to it is, that the thing supposed is of little
or uo consequence; that it is immaterial w hat serves the purpose of money,
whether paper or gold and silver; that the effect of both upon industry is the
same; aud that the intrinsic wealth of a nation is to be measured, not by the
abundance of the precious metals contained in it, but by the quantity of the
productions of its labor and industry.
T his answer is not destitute of solidity, though not entirely satisfactory. It
is certain, that the vivitication of industry, by a full circulation, with the aid of
a proper and well regulated paper credit, may more than compensate for the
loss of a part of the gold and silver of a nation, if the consequence of avoiding
th at loss should be a scanty or defective circulation.
B u t the positive and perm anent increase or decrease of the precious metals
in a country can hardly ever be a m atter of indifference. As the commodity
taken in lieu of every other, it is a species of the most effective w ealth; and
as the money of the world, it is of great concern to the S tate, that it possess
a sufficiency of it to face any dem ands which the protection of its external
interests may create.
T h e objection seems to adm it of another and more conclusive answ er, which
controverts the fact itself. A nation that has no mines of its own, m ust derive
the precious metals from others; generally speaking, in exchange for the
products of its labor and industry . T he quantity it will possess, will, there
fore, in the ordinary course of things, be regulated by the favorable or unfa
vorable balance of its trade; th a t is, by the proportion between its abilities to
supply foreigners, and its w ants of them ; between the amount of its exporta
tions and that of its importations, lien ee, the state of its agriculture and
m anufactures, the quantity anil quality of its labor and industry, m ust, in the

BANK OF T H E UN ITED ST A T E S.

main, influence and determine the increase or decrease of its gold and silver.
I f this be true, the inference seems to be, that well constituted banks favor
the increase of the precious metals. It has been shown that they augment, in
different ways, the active capital of a country.' T his it is which generates
employment; which animates and expands labor and industry. Every addi
tion which is made to it, by contributing to put in motion a greater quantity
of both, tends to create a greater quantity of the products of both; and, by
furnishing more materials for exportation, conduces to a favorable balance of
trade, and, consequently, to the introduction and increase of gold and silver.
T his conclusion appears to be drawn from solid premises. T here are, how
ever, objections to be made to it.
I t may be said that, as bank paper affords a substitute for specie, it serves
to counteract that rigorous necessity for the metals, as a medium of circulation,
which, in the case of a wrong balance, might restrain, in some degree, their
exportation; and it may be added, that, from the same cause, in the same
case, it would retard those economical and parsimonious reforms in the manner
of living, which the scarcity of money is calculated to produce, and which
might be necessary to rectify such wrong balance.
There is, perhaps, some truth in both these observations; but they appear
to be of a nature rather to form exceptions to the generality of the conclusion,
than to overthrow it. The state of tilings in which the absolute exigencies of
circulation can be supposed to resist, with any effect, the urgent demands for
specie which a wrong balance of trade may occasion, presents an extreme case.
A nd a situation in which a too expensive manner of living of a community,
compared with its means, can stand in need of a corrective, from distress or
necessity, is one which, perhaps, rarely results but from extraordinary and
adventitious causes: such, for example, as a national revolution; which unset
tles all the established habits of thepeople, and inflames the appetite for extra
vagance, by the illusions of an ideal wealth, engendered by the continual
multiplication of a depreciating currency, or some similar cause. T here is a
good reason to believe, that, vwiere the laws are wise and well executed, and
tne inviolability of property and contracts maintained, the economy of a people
will, in the general course of things, correspond with its means.
The support of industry is, probably, in every case, of more consequence
towards correcting a wrong balance of trade, than any practicable retrench
ments in the expenses of families or individuals; and the stagnatiou of it would
be likely to have more effect in prolonging, than any such savings in shorten
ing, its continuance. T hat stagnation is a natural consequence of an inade
quate medium, which, without the aid of bank circulation, would, in the cases
supposed, be severely felt.
I t also deserves notice, that, as the circulation is always in a compound
ratio to the fund upon which it depends, and to the demand for it, and as that
fund is itself affected by the exportation of the metals, there is no danger of
its being overstocked, as in the case of paper issued at the pleasure of the
government, or of its preventing the consequences of any unfavorable balance
from being sufficiently felt to produce the reforms alluded to, as far as circumstanccs may require and admit.
Nothing can be more fallible than the comparisons which have been made
between different countries, to illustrate the truth of the position under con
sideration. The comparative quantity of gold and silver, in different countries
depends upon an infinite variety of facts and combinations, all of which ought
lo b e known in order to judge whether the existence or non-existence of paper
currencies has any share in the relative proportions they contain: the mass
anil value of the productions of the labor and industry of each, compared with
its w ants; the nature of its establishments abroad; the kind of wars in which
it is usually engaged; the relations it bears to the countries which are the
original possesors of those metals; the privileges it enjoys in their trade;_these
and a number of other circumstances, are all to be taken into the account 5
and render the investigation too complex to justify any reliance on the vague
and general surmises which have been hitherto hazarded on the point.

C H A R T E R OF 1791.

In the foregoing discussion, the objection has been considered as applying to
the perm anent expulsion and diminution of the metals. T h eir tem porary ex
p o r t a t i o n , for particular purposes, has not been contemplated. T his, i t must
be confessed, is facilitated by banks, from the faculty they possess of sup
plying their place. B u t their utility is in nothing more conspicuous than in
these very cases. T hey enable the government to pay its foreign debts, and
to answer any exigencies which the external concerns of the community may
have produced. T hey enable the merchant to support his credit, (on which
the prosperity of trade depends) when special circumstances prevent rem it
tances in other modes. They enable him also to prosecute enterprises which
ultimately tend to an augmentation of the species of wealth in question. I t is
evident that gold and silver may often be employed in procuring commodities
abroad, which, in a circuitous commerce, replace the original fund, with con
siderable addition. But it is not to be interred, from this facility given to tem
porary exportation, that banks, which are so friendly to trade and industry,
are, in their general tendency, inimical to the increase of the precious metals.
T hese several views of the subject appear sufficient to impress a full con
viction of the utility of banks, and to dem onstrate that they are of great im
portance, not only in relation to the administration of the finances, but in the
general system of the political economy.
T he judgm ent of many concerning them has, no doubt, been perplexed, by
the m isinterpretation of appearances which were to be ascribed to other causes.
T he general devastation or personal property, occasioned by the late w ar, n a
turally produced, 011 the one hand, a great dem and for money, and, on the
other, a great deficiency of it to answer the demand. Some injudicious laws,
which grew out of the public distresses, by impairing confidence, and causing
a part of the inadequate sum in the country to be locked up, aggravated the
evil. T he dissipated habits contracted by many individuals, during the war,
which, after the peace, plunged them into expenses beyond their incomes; the
number of adventurers without capital, and, in many instances, without in
formation, who at that epoch rushed into trade, and were obliged to make any
sacrifices to support a transient credit; the employment of considerable sums
in speculations upon the public debt, which, from its unsettled state, was in
capable of becoming itself a substitute: all these circum stances concurring,
necessarily led to usurious borrowing, produced most of the inconveniences,
and were the true causes of most of the appearances, which, where banks were
established, have been by some erroneously placed to their account—a mistake
which they might easily have avoided by turning their eyes towards places
where there were none, and where, nevertheless, the same evils would have
been perceived to exist, even in a greater degree than where those institutions
had obtainedT hese evils have either ccaseil or been greatly mitigated. T h eir more com
plete extinction may be looked for from that additional security to property
which the constitution of the United States happily gives; (a circumstance of
prodigious moment in the scale, both of public and private prosperity) from the
attraction of foreign capital, under the auspices of that security, to be employ
ed upon objects, and in enterprises, for which the state of this country opens a
wide and inviting field; from the consistency and stability which the public
debt is fast acquiring, as well in the public opinion at home and abroad, as, in
fact, from the augmentation of capital which that circum stance and the quarteryearly payment of interest will afford; and from the more copious circulation
which will be likely to be created by a well constituted national bank.
T he establishment of banks in this country seems to be recommended by
reasons of a peculiar nature. Previously to the Revolution, circulation was in
a great measure carried on by paper em itted by the several local governments.
In Pennsylvania alone, the quantity of it was near a million and a half of dol
lars. T his auxiliary may be said to be now at an end. And it is generally
supposed' that there has been, for some time past, a deficiency of circulating
medium. IIow far that deficiency is to be considered as real or imaginary, is
not susceptible of dem onstration; but there are circumstances and appear-

BANK OP T H E U N ITED ST A T E S.

ances, which, in relation to the country at large, countenance the supposition of
its reality.
.
.
.
.
i____ T he circumstances are, besides the fact just mentioned respecting paper
emissions, the vast tracts of waste land, and the little advanced state o f m anu
factures. The progressive settlement of the former, while it promises ample
retribution, in tne generation of future resources, diminishes or obstructs, in the
mean tim e, the active wealth of the country. I t not only draw s off a part ot
the circulating money, and places it in a more passive state, but it diverts, into
its own channels, a portion of that species of labor and industry which would
otherwise be employed in furnishing materials for foreign trade, and w hich,by
contributing to a favorable balance, would assist the introduction of specie.
In the early periods of new settlements, the settlers not only furnish no su r
plus for exportation, but they consume a p a rt of that which is produced by the
labor of others. The same thing is a cause that manufactures do not advance,
or advance slowlv. A nd, notwithstanding some hypotheses to the contrary,
there are many things to induce a suspicion, that the precious metals will not
abound in any c o u n trj which has not mines, or variety of manufactures.
They have been sometimes acquired by the sword; but the modern system ot
war has expelled this resource, and it is one upon which it is to be hoped the
United States will never be inclined to rely.
T h e appearances alluded to are, greater prevalency of direct barter in the
more interior districts of the country which, however, has been for some
time past gradually lessening, and greater difficulty,generally, in the advanta
geous alienation of improved real estate, which, also, has of late diminished, but
is still seriously felt in different parts of the Union. The difficulty of getting
money, which has been a general complaint, is not added to the number, be
cause it is the complaint of all times, and one in which imagination must ever
have too great scope to permit an appeal to it.
If the supposition of such a deficiency be in any degree founded, and some aid
to circulation be desirable, it remains to inquire wnat ought to be the nature
of that aid.
T he emitting of paper money by the authority of Government is wisely pro
hibited to the individual States by the national constitution, and the spirit of
that prohibition ought not to be disregarded by the Government of the U nited
States. Though paper emissions, under a general authority, might have some
advantages not applicable, and be free from some disadvantages which are ap
plicable to the like emissions by the States, separately, yet they are of a n a
ture so liable to abuse—and, it may even be affirmed, so certain of being abus
ed—that the wisdom of the Government will be shown, in never trusting itself
with the use of so seducing and dangerous an expedient. In times of tranquil
lity, it might have no ill consequence; it might even perhaps be managed in a
way to be productive of good; but, in great and trying emergencies, there is a l
most a moral certainty of its becoming mischievous. T he stamping of paper is
an operation so much easier than the laying of taxes, that a government in the
practice of paper emissions, would rarely fail, in any such emergency, to indulge
itself too far in the employment of that resource, to avoid as much as possible
one less auspicious to present popularity. I f it should not even be carried so
far as to be rendered an absolute bubble, it would at least be likely to be ex
tended to a degree which would occasion an inflated and artificial state of
things, incompatible with the regular and prosperous course of the political
economy.
Among other material differences between a paper currency, issued 6y the
mere authority of government, and one issued by a bank, payable in coin, is
this: that, in the first case, there is no standard to which an appeal can be
made, as to the quantity which will only satisfy, or which will surcharge the
circulation; in the last, that standard results from the demand. I f more should
be issued than is necessary, it will return upon the bank. Its emissions, as
elsewhere intimated, must always be in a compound ratio to the fund and the
dem and; whence it is evident, that there is a limitation in the nature of the

C H A R TE R OF 1791.

thing; while the discretion of the government is the only measure of the extent
of the emissions, by its own authority.
This consideration further illustrates the danger of emissions of that sort,
and the preference which is due to bank paper.
T h e payment of the interest of the public debt, at thirteen different places, is
a weighty reason, peculiar to our immediate situation, for desiring a bank cir
culation. W ithout a paper in general currency, equivalent to gold and sil
ver, a considerable proportion of the specie of tire country m ust always be sus
pended from circulation, and left to accum ulate, preparatory to each day of
payment; and as often as one approaches, there must in several cases be an ac
tual transportation of the metals, at both expense and risk, from their natural
and proper reservoirs, to distant places. T his necessity will be felt very in
juriously to the trade of some of the States; and will embarrass, not a little,
the operations of the treasury in those States It will also obstruct those n e
gotiations, between different parts of the Union, by the instrum entality of trea
sury bills, which have already afforded valuable accommodations to trade in
general.
*
Assuming it, then, as a consequence, from what has been said, that a na
tional bank is a desirable institution, two inquiries emerge: Is there no such in
stitution, already in being, which has a claim to that character, and which su
persedes the propriety or necessity of another? I f there be none, w hat are the
principles upon which one ought to be established?
T here are at present three ;banks in the United States: that of N orth Ame
rica, established in the city of Philadelphia; that of New York,'established in
the city ol N ew Y ork; that of M assachusetts, established in the town of Bos
ton. Of these three, the first is the only one which has at any time had a
direct relation to the Government of the United States.^
T he Bank of N orth America originated in a resolution of Congress of the
26th of M ay, 1781, founded upon a proposition of the Superintendent of F i
nance, which was afterw ards carried into execution by an ordinance of the 31st
of December following, entitled “ An ordinance to incorporate the subscribers
to the Bank of N orth America.”
T h e aid afforded to the United States by this institution, during the re
maining period of the w ar, was of essential consequence; and its conduct
towards them since the peace, has not weakened its title to their patronage
and favor. So far, its pretensions to the character in question are respecta
ble; but there are circumstances which militate against them, and considera
tions which indicate the propriety of an establishment on different principles.
T he directors of this bank, on behalf of their constituents, nave since
accepted and acted under a new charter from the State of Pennsylvania, m a
terially variant from their original one, and which so narrows the foundation
of the institution, as to render it an incompetent basis for the extensive p u r
poses of a national bank.
T he limit assigned by the ordinance of Congress to the stock of the bank,
is ten millions of dollars. T he last charter of Pennsylvania confines it to
two millions. Questions naturally arise, w hether there be not a direct re
pugnancy between two charters so differently circumstanced? and whether
the acceptance of the one is not to be deemed a virtual surrender of the
other? But, perhaps it is neither advisable nor necessary to attem pt a solu
tion of them.
T here is nothing in the acts of Congress which imply an exclusive right,
in the institution to which they relate? except during the term of the w'ar.
T here is, therefore, nothing, if the public good require it, which prevents the
establishment of another. I t may, however, be incidentally rem arked, that,
in the general opinion of the citizens of the U nited States, the Bank of N orth
America has taken the station of a bank of Pennsylvania only. T his is a
strong argument for a ne\v institution, or for a renovation of the old, to re
store it to the situation in which it originally stood in the view of tly> United
States.
4

BANK OF T H E U N ITED ST A T E S.

B u t, though the ordinance of Congress contains no grant of exclusive p ri
vileges, there may be room to allege that the Government of the U nited
States ought not, in point of candor and equity, to establish any rival or in
terfering institution, in prejudice of the one already established; especially
as this has, from services rendered, well founded claims to protection and
T he justice of such an observation, ought, within proper bounds, to be ad
m itted. A new establishment of the sort, ought not to be made without co
gent and sincere reasons of public good. And in the manner of doing it,
every facility should be given to a consolidation of the old with the new ,
upon terms not injurious to the parties concerned. B ut there is no ground
to maintain, that, in a case in which the Government has made no condition
restricting its authority, it ought voluntarily to restrict it, through regard to
the interests of a particular institution, when those of the State dictate a dif
ferent course: especially, too, after such circumstances have intervened, as
characterise tne actual situation of the Bank of North America.
T he inducements to a new disposition of the thing are now to be consider
ed. T he first of them which occurs is, the at least ambiguous situation in
which the Bank of North America has placed itself, by the acceptance of its
last charter. I f this has rendered it the mere bank of a particular State, lia
ble to dissolution at the expiration of fourteen years, to which term the act of
that State has restricted its duration, it would be neither fit nor expedient to
accept it as an equivalent for a bank of the United States.
T he restriction of its capital, also, which, according to the same supposition,
cannot be extended beyond two millions of dollars, is a conclusive reason for
a different establishment. So small a capital promises neither the requisite
aid to Government, nor the requisite security to the community. It may an
swer very well the purposes of local accommodation, but is an inadequate
foundation for a circulation co-extensive with the United States, embracing
the whole of their revenues, and effecting every individual into whose hands
the paper may come.
An.», inadequate as such a capital would be to the essential ends of a n a
tional bank, it is liable to be rendered still more so, by that principle of the
constitution of the Bank of N orth America, contained equally in its old and in
its new charter, which leaves the increase of the actual capital at any time
(now far short of the allowed extent) to the discretion of the directors or
stockholders. I t is naturally to be expected, that the allurements of an ad
vanced price of stock, and of large dividends, may disincline those who are
interested to an extension of capital, from which they will be apt to fear a
diminution of profits. And from this circumstance, tne interest and accom
modation of tne public, (as well individually as collectively) are made more
subordinate to the interest, real or imagined, of the stockholders, than they
ought t 9 be. I t is true, that, unless the latter be consulted, there can be no
bank, (in the sense at least in which institutions of this kind, worthy of con
fidence, can be established in this country.) B ut, it does not follow that this
is alone to be consulted, or that it even ought to be paramount. Public utility
is more truly the object of public banks than private profit. And it is the
business of Government to constitute them on such principles, that, while the
latter will result in a sufficient degree to afford competent motives to engage
in diem, the former be not made subservient to it. To effect this, a principal
object of attention ought to be to give free scope to the creation of an ample
capital, and with this view, fixing the bounds which are deemed safe and con
venient, to leave no discretion either to stop short of them , or to overpass
them. T he want of this precaution, in the establishment of the Bank of N orth
America, is a further and an important reason for desiring one differently
constituted.
There may be room at first sight for a supposition, that, as the profits of a
bank will bear a proportion to the extent of its operations, and as. for this rea
son, the interest of the stockholders will not be disadvantageously affected by
any necessary augmentations of capital, there is no cause to apprehend that

'CHA RTER OF 1791.

they will be indisposed (o such augmentations. B ut most m en. in m atters of
this nature, prefer the certainties they enjoy, to probabilities depending on
untried experiments, especially when these promise rather that they will not
be injured than that they will be benefitted.
From the influence of this principle, and a desire of enhancing its profits,
the directors of a bank will be more apt to overstrain its faculties, in an a t
tem pt to face the additional demands w hich the course of business may create,
than to set on foot new subscriptions, which may hazard a diminution of the
profits, and even a temporary reduction of the price of stock.
Banks are among the best expedients for lowering the rate of interest in a
country; but, to have this effect, their capitals m ust be completely equal to
all the demands of business, and such as will tend to remove the idea, that
the accommodations they afford are in any degree favors— an idea very apt to
accompany the parsimonious dispensation of contracted funds. In this, as in
every other case, the plenty of tne commodity ought to beget a moderation of
theprice.
'I he want of a principle of rotation in the constitution of the Bank of N orth
America is another argument for a variation of the establishment. Scarcely
one of the reasons which m ilitate against this principle in the constitution of a
country, is applicable to that of a bank: while there are strong reasons in
favor o f it, in relation to the one, which do not apply to the other. T he know
ledge to be derived from experience is the only circumstance common to both,
which pleads against rotation in the directing officers of a bank.
B ut the objects of the government of a nation, and those of the government
of a bank, are so widely different, as greatly to weaken the force of th at con
sideration in reference to the latter. Almost every im portant case of legisla
tion requires, towards a right decision, a general and accurate acquaintance
with the affairs of the State, and habits of thinking, seldom acquired but from
a familiarity w’ith public concerns. T he administration of a bank, on the con
trary, is regulated by a few simple fixed maxims, the application of which is
not difficult to any man of judgm ent, especially if instructed in the principles |
« f trade. I t is, in general, a constant succession of the same details.
B ut, though this be the case, the idea of the advantages of experience is not
to be slighted. Room ought to be left for the regular transmission of official
information; and, for this purpose, the head of the direction ought to be ex
cepted from the principle of rotation. W ith this exception, and with the aid
o f the information of the subordinate officers, there can be 110 danger of any ill
effects, from w ant of experience or knowledge; especially as the periodical
exclusion ought not to reach the whole of the directors at one time.
The argument in favor of the principle of rotation is this: that, by lessening
the danger of combinations among the directors, to make the institution sub
servient to party views, or to the accommodation, preferably, of any particu
lar set of men, it will render the public confidence more firm, stable, and un
qualified.
W hen it is considered that the directors of a bank are not elected by the
great body of the community, in which a diversity of views will naturally
prevail at differeut conjunctures, but by a small and select class of men,
among whom it is far more easy to cultivate a steady adherence to the same
persons and objects, and that those directors have it in their power so imm e
diately to conciliate, by obliging the most influential of this class, it is easy to
perceive that, without the principle of rotation, changes in that body can
rarely happen, but as a concession which they may themselves think it expe
d ien t to make to public opinion.
T he continual administration of an institution of this kind, by the same
persons, will never fail, with or without cause, from their conduct, to excite
d istru st and discontent. The necessary secrecy of their transactions gives
unlim ited scope to imagination to infer that something is or may be wrong.
A nd this inevitable mystery is a solid reason for inserting in the constitution
o f a bank the necessity of a change of men. As neither the mass of the p ar
ties interested, nor the public in general, can be perm itted to be witnesses of

BANK OF T H E UN ITED ST A T E S.

the interior management of the directors, it is reasonable that both should have
that check upon their conduct, and that security against the prevalency ot a
partial or pernicious system, which will be produced by the certainty ot peri
odical changes. Such, too, is the delicacy of the credit of a bank, that every
thing which can fortify confidence and repel suspicion, without injuring its
operations, ought carefully to be sought after in its formation.
A further consideration in favor of a change, is the improper rule by which
the right of voting for directors is regulated in the plan upon which the Bank
of N orth America was originally constituted, namely, a vote for each share,
and the want of a rule in the last charter; unless the silence of it, on that
point, may signify that every stockholder is to have an equal and a single vote;
which would be a rule in a different extreme, not less erroneous. I t is of im
portance that a rule should be established on this head, as it is one ot those
things which ought not to be left to discretion; and it is, consequently, ot
equal importance that the rule should be a proper one.
A vote for each share renders a combination between a few principal stock
holders, to monopolize the power and benefits of the ta n k , too easy. A n
equal vote to each stockholder, however great or small his interest in the in
stitution, allows not that degree of weight to large stockholders which it is
reasonable they should have, and which, perhaps, their security, and that of
the bank, require. A prudent mean is to be preferred. A conviction of this
has produced a by-law of the corporation of the Bank of N orth America,
which evidently aims at such a mean. B ut a reflection arises here, that a
like majority with that which enacted this law, may, at any moment, repeal it.
T he last inducement which shall be mentioned, is the want of precautions
to guard against a foreign influence insinuating itself into the direction of the
bank. I t seems scarcely reconcileable with a due caution, to permit that any
but citizens should be eligible, as directors of a national bank, or that n o n
resident foreigners should be able to influence the appointment of directors
by the votes of their proxies. In the event, however, of an incorporation of
tne Bank of North America, in the plan it may be necessary to qualify this
principle, so as to leave the right of foreigners, who now hold shares of its
stock, unimpaired; but without the power of transmitting the privilege in
question to foreign alienees.
I''' I t is to be considered that such a bank is not a mere m atter of private pro
perty, but a political machine of the greatest importance to the State.
' T here are other variations from the constitution of the Bank of N orth
America, not of inconsiderable moment, which appear desirable, but which
are not of magnitude enough to claim a preliminary discussion. These will
be seen in the plan which will be submitted in the sequel.
I f the objections which have been stated, to the constitution of the Bank of
N orth America, are admitted to be well founded, they will, nevertheless,
not derogate from the merit of the main design, or of the services which that
bank has rendered, or of the benefits which it has produced. T he creation
of such an institution, at the time it took place, was a measure dictated by
wisdom. Its utility has been amply evinced by its fruits—American in d e
pendence owes much to it; and it is very conceivable, that reasons of the
moment may have rendered those features in it inexpedient, which a revision,
with a permanent view, suggests as desirable.
T he order of the subject leads next to an inquiry into the principles upon
which a national bank ought to be organized.
The situation of the United States naturally inspires a wish that the form
of the institution could admit ol a plurality of branches. B u t various con
siderations discourage from pursuing this idea. T he complexity of such a
plan would be apt to inspire doubts, which might deter from adventuring in
it. And the practicability of a safe and orderly administration, though not
to be abandoned a 3 desperate, cannot be made so manifest in perspective, as
to promise the removal of those doubts, or to justify the Government in adopt
ing the idea as an original experiment. T he most that would seem advisa
ble, on this point, is to insert a provision which may lead to it hereafter, if

C H A R TE R OF 1791,

experience shall more clearly demonstrate its utility, and satisfy those who
m a y have the direction, that it may be adopted with safety.
I t is certain
that it would have some advantages, both peculiar and important. Besides
more general accommodation, it would lessen the danger of a run upon the
bank.
.
T h e argument against it is, that each branch m ust be under a distinct,
though subordinate direction, to which a considerable latitude ot discretion
m ust of necessity be entrusted. And as the property of the whole institution
would be liable for the engagements of each part, that and its credit would
be at stake, upon the prudence of the directors of every part. T he m ism a
nagement of either branch might hazard serious disorder in the w hole.
-Another wish, dictated by the particular situation of the country, is, that
the bank could be so constituted as to be made an immediate instrum ent of loans
to the proprietors of land; but this wish also yields to the difficulty ot accom
plishing it. L and is alone an unfit fund for a bank circulation. If the notes
issued upon it were not to be payable in coin, on dem and, or at a short date,
this would amount to nothing more than a repetition of tne paper emissions,
which are now exploded by the general voice. I f the notes are to be payable
in coin, the land must first be converted into it by sale, or mortgage. T he
difficulty of effecting the latter, is the very thing which begets the desire of
finding another resource, and the former would not be practicable on a sudden
emergency, but with sacrifices which would make the cure worse than the
disease. N either is the idea of constituting the fund partly of coin and p art
ly of land, free from impediments. These two species of property do not,
for the most part, unite in the same hands. W ill tne moneyed man consent to
enter into a partnership with the land holder, by which the latter will share in
the profits ivhich will be made by the m oney o f the former? T he money, it
is evident, will be the agent or efficient cause of the profits— the land can
only be regarded as an additional security. I t is not difficult to foresee, that
an union, 011 such term s, will not readily be formed. I f the landholders are
to procure the money by sale or mortgage of a part of their lauds, this they
can as well do when the stock consists wholly of money, as if it were to be
compounded of money and land.
T o procure for the landholders the assistance of loans, is the great desi
deratum . Supposing other difficulties surm ounted,and a fund created, com
posed partly of coin and partly of land, yet the benefit contemplated could
only then be obtained, by the bank’s advancing them its notes for the whole,
or part, of the value of the lands they had subscribed to the stock. I f this
advance was small, the relief aimed at would not be given; if it was large,
the quantity of notes issued would be a cause of distrust; and, if receiver a t
all, they would be likely to return speedily upon the bank for paym ent;
which, after exhausting its coin, might be under a necessity of turning its
lands into money, at any price that could be obtained for them, to the irre
parable prejudice of the proprietors.
Considerations of public advantage suggest a further wish, which is, that
the bank could be established upon principles that would cause the profits of
it to redound to the immediate benefit of the State. T his is contemplated
by many who speak of a national bank, but the idea seems liable to insupera
ble objections. Y To attach full confidence to an institution o f this nature, it
appears fo be an essential ingredient in its structure, that it shall be under a
private not a public direction—under the guidance of individual interest, not
of public policy; which would besupposedto be, and, in certain emergencies,
u nder a feeble or too sanguine administration, would really be, liable to being
too much influenced by public necessity. T he suspicion of this would most
probably be a canker that would continually corrode the vitals of the credit
of the bank, and would be most likely to prove fatal in those situations in
which the public good would require that they should be most •sound and
vigorous. I t would, indeed, be little less than a miracle, should the credit
o f the bank be at the disposal o f the Government, if, in a long series of time,
there was not experienced a calamitous abuse of it. It is tru e, that it would

BANK OF T H E UNITED STATES.

be (lie real interest of the Government not to abuse it; its genuine policy, to
husband and cherish it with the most guarded circumspection, as an inesti
mable treasure. Hut what government ever uniformly consulted its true in
terests in opposition to the temptations of momentary exigencies? W h at
nation was ever blessed with a constant succession of upright and wise adiuinistrators_L3
The keen, steady, and, as it were, magnetic sense of their own interest, as
proprietors, in the directors of a bank, pointing invariably to its true pole,
the prosperity of the institution, is the only security that can alvvays be relied
upon for a careful and prudent administration. It is, therefore, the only
basis 011 which an enlightened, unqualified, and permanent confidence can be
expected to be erected and maintained.
T he precedents of the banks established in several cities of Europe, A m
sterdam, Hamburgh, and others, may seem to militate against this position.
W ithout a precise knowledge of all the peculiarities of their respective con
stitutions, it is difficult to pronounce how far this may be the case. T h at of
Amsterdam, however, which we best know, is rather under a municipal than
a governmental direction. Particular magistrates of the city, not officers of
the republic, have the management of it. I t is also a bank of deposite, not
of loan, or circulation; consequently less liable to abuse, as well as less use
ful. Its general business consists in receiving money for safe keeping, which,
if not called for within a certain time, becomes a part of its stock, and irre} claimable. But a credit is given for it on the books of the bank, which, being
transferable, answers all the purposes of money.
The directors being magistrates of the city, and the stockholders in general
its most influential citizens, it is evident that the principle of private interest
must be prevalent in the management of the bank. A nd it is equally evi
dent, that, from the nature of its operations, that principle is less essential to
it than to an institution constituted with a view to the accommodation of the
public and individuals, by direct loans and a paper circulation.
As far as may concern the aid of the bank, within the proper limits, a
good government has nothing more to wish for than it will always possess,
though the management be in the hands of private individuals. As the in
stitution, if rightly constituted, must depend for its renovation, from time to
time, 011 the pleasure of the government, it will not be likely to feel a dis
position to render itself, by its conduct, unworthy of public patronage. T he
government, too, in the administration of its finances, has it in its power to
reciprocate benefits to the bank, of not less importance than those which the
bank affords to the government, and which, besides, are never unattended
with an immediate and adequate compensation. Independent of these more
particular considerations, the natural weight and influence of a good govern
ment will always go far towards procuring a compliance with its desires; and,
as the directors will usually be composed of some of the most discreet,Jrespectable, and well informed citizens, it can hardly ever be difficult to make them
sensible of the force of the inducements whichoughtto stimulate their exertions.
It will not follow, from what has been said, that the State may not be the
holder of a part ot the stock of a bank, and consequently a sharer in the pro
fits of it. It will only follow that it ought not to desire any participation in
the direction of it, and therefore ought not to own the whole or a principal
part of the stock: for, if the mass of the property should belong to the public,
and if the direction of it should be in private hands, this would be to commit
the interests of the State to persons not interested, or not enough interested
ip their proper management.
There is one thing, however, which the Government owes to itself and to
the community, at least to all that part of it who are not stockholders, which
is, to reserve to itself a right of ascertaining, as often as may be necessary,
the state of the bank—excluding, however, all pretension to control. T his
right forms an article in the primitive constitution of the Bank of N orth
America, and its propriety stands upon the clearest reasons. I f the paper
of a bank is to be permitted to insinuate itself into all the revenues and re -

C H A R TE R OF 1791.

ceipts of a country; if it is even to be tolerated as the substitute for gold and
silver, in all thetransactions of business; it becomes, in either view, a national
concern of the first magnitude. As such, the ordinary rules of prudence re
quire that the government should possess the means of ascertaining, when
ever it thinks ht, that so delicate a tru st is executed with fidelity and care.
A right of this nature is not only desirable, as it respects the government,
but it ought to be equally so to all those concerned in the institution, as an
additional title to public and private confidence, and as a thing which can
only be formidable to practices that imply mismanagement. T he presump
tion must always be, that the characters who would be entrusted with tne
exercise of this right, on behalt of the government, will not be deficient in the
discretion which it may require; at least, the adm itting c f this presumption
cannot be deemed too great a return of confidence for tnat very large portion
of it which the government is required to place in the bank.
—
Abandoning, therefore, ideas which, however agreeable or desirable, are
neither practicable nor safe, the following plan, for the constitution of a n a
tional bank, is respectfully submitted to the consideration of the House. ,
1. T he capital stock of the bank shall not exceed ten millions of dollars,
divided into twenty-five thousand shares, each share being four hundred dol
lars; to raise which sum, subscriptions shall be opened on the first M onday of
A pril next, and shall continue open until the whole shall be subscribed.
Bodies politic as well as individuals may subscribe.
2. T he am ount of each share shall be payable, one-fourth in gold and sil
ver coin, and three-fourths in that part ol tne public debt which, according
to the loan proposed by the act making provision for the debt of the United
States, shall bear an accruing interest, at the time of paym ent, of six per cent,
per annum.
3. T he respective sums subscribed shall be payable in four equal parts, as
well specie as debt, in succession, and at the distance of six calendar months
from each other; the first paym ent to be made at the time of subscription.
If there shall be a failure in any subsequent payment, the p arty failing shall
lose the benefit of any dividend which may have accrued prior to the time for
making such payment, and during the delay of the same.
4. 'lh e subscribers to the bank, and their successors, shall be incorporated,
and shall so continue, until the final redemption of that p art of its stock which
shall consist of the public debt.
5. The capacity of the corporation to hold real and personal estate, shall be
limited to fifteen millions of dollars, including the amount of its capital or
original stock. T he lands and tenem ents which it shall be perm itted to hold,
shall be only such as shall be requisite for the immediate accommodation of the
institution; and such as shall have been bona fide mortgaged to it by way of
security, or conveyed to it in satisfaction of debts previously contracted, in
the usual course ot its dealings, or purchased at sales upon judgm ents which
shall have been obtained for such debts.
6 . T he totality of the debts of the company, whether by bond, bill, note,
or other contract,_ (credits for deposites excepted) shall never exceed the
amount of its capital stock. In case of excess, the directors, under whose
administration it shall happen, shall be liable for it in their private or separate
capacities. T h o se who may have dissented, may excuse themselves from this
responsibility, by immediately giving notice of the fact, and their dissent, to
the President of the United States, and to the stockholders, at a general m eet
ing, to be called by the President of the B ank, at their request.
7. The company may sell or demise it 3 lands and tenem ents, or may sell
the whole or any- part of the public debt, whereof its stock shall consist; but
shall trade in nothing except oills of exchange, gold and silver bullion, or in
the sale of goods pledged for money lent; nor shall take more than at the
rate of six per centum per annum , upon its loans or discounts.
8 . No loan shall be made by the bank for the use, or on account of, the
Government of the United S tates.o r o f either of them, to an amount exceed

BANK OF T H E U N ITED ST A T E S.

ing fifty thousand dollars, or of any foreign Prince or State, unless previously
authorized by a law of the United States.
9. T he stock, of the bank shall be transferable, according to such rules as
shall be instituted by the company in that behalf.
10. T he affairs of the bank shall be under the management of twenty-five
directors, one of whom shall be the president; and there shall be, on the first
Monday of January, in each year, a choice of directors, by a plurality of suf
frages of the stockholders, to serve for a year. The directors, at their first
meeting after each election, shall choose one of their number as president.
11. T he number of votes to which each stockholder shall be entitled, shall
be according to the number of shares he shall hold, in the proportions follow
ing, that is to say: For one share, and not more than two snares, one vote;
for every two shares above two, and not exceeding ten, one vote; for every
lour shares above ten, and not exceeding thirty, one vote; for every six shares
above thirty, and not exceeding sixty, one vote; for every eight shares above
sixty, and not exceeding one nundred, one vote; and for every ten shares
above one hundred, one vote; but no person, co-partnership, or body politic,
shall be entitled to a greater number than thirty votes. A nd, after the first
election, no share or shares shall confer a right of suffrage, which shall not
have been holden three calendar months previous to the day of election.
Stockholders actually resident within the United States, and none other, may
vote in the elections by proxy.
1 2 . N ot more than three-fourths of the directors in office, exclusive of the
president, shall be eligible for the next succeeding year. B ut the director
who shall be president at the time of an election, may always be re-elected.
13. None but a stockholder, being a citizen of the United States, shall be
eligible as a director.
14. Any number of stockholders, not less than sixty, who, together, shall
be proprietors of two hundred shares or upwards, shall have power, at any
time, to call a general meeting of the stockholders, for purposes relative to
the institution; giving at least six weeks’ notice, in two public gazettes, of the
place where the bank is kept, and specifying in such notice the object of the
meeting.
15. In case of the death, resignation, absence from the United States, or
removal of a director by the stockholders, his place may be filled by a new
choice for the remainder of the year.
16. No director shall be entitled to any emolument, unless the same shall
have been allowed by the stockholders at a general meeting. T he stock
holders shall make such compensation to the president, for his extraordinary
attendance at the bank, as shall appear to them reasonable.
17. N ot less than seven directors shall constitute a board for the transac
tion of business.
18. Every cashier or treasurer, before he enters on the duties of his office,
shall be required to give bond, with two or more sureties, to the satisfaction
of the directors, in a sum not less than twenty thousand dollars, with condidition for his good behavior.
19. Half-yearly dividends shall be made of so much of the profits of the
bank as shall appear to the directors advisable; and, once in every three
years, the djrectors shall lay before the stockholders, at a general meeting,
for their information, an exact and particular statement ot the debts which
shall have remained unpaid, after the expiration of the original credit, for a
period of treble the term of that credit, and of the surplus of profit, if any,
after deducting losses and dividends.
2 0 . The bills and notes of the bank originally made payable, or which shall
have become payable, on demand, in gold and silver coin, shall be receivable
in all payments to the United States.
2 1 . The officer at the head of the T reasury D epartment of the United
states shall be furnished, from time to time, as often as he may require, not
exceeding once a week, with statements of -the amount of the capital stock of
the bank, and of the debts due to the same, of the moneys deposited therein,

C H A R TER OF

1791.

o f the notes in circulation, and of the cash in hand; and shall have a right to
inspect such general accounts in the books of the bank, as shall relate to the
said statem ents; provided that this shall not be construed to imply a right of
inspecting the account of any private individual or individuals with the bank.
22.
No similar institution shall be established by any future act of the
United States, during the continuance of the one hereby proposed to be es
tablished.
• 23. It shall be lawful for the directors of the bank to establish offices
wheresoever they shall think fit, within the United States, for the purposes
of discount and deposite, only, and upon the same term s, and in the same
manner, as shall be practised at the bank, and to commit the management of
the said offices, and the making of the said discounts, either to agents spe
cially appointed by them, or to such persons as may be chosen by the stock
holders residing a t the place where any such office snail be, under such agree
ments, and subject to such regulations, as they shall deem proper, not being
contrary to law, or to the constitution of the bank.
24. And lastly, the P resident of the U nited States shall be authorized to
cause a subscription to be made to the stock of the said company, on behalf
of the United States, to an amount not exceeding two millions of dollars, to
be paid out of the moneys which shall be borrowed by virtue of either of the
acts, the one, entitled “ A n act making provision for the debt of the United
S trtes,” and the other, entitled “ An act making provision for the reduction
of the public d ebt;” borrowing of the bank an equal sum, to be applied to the
purposes for which the saiil moneys shall have been procured, reimbursable
in ten years, by equal annual instalm ents; or at any time sooner, or in any
greater proportions, that the Government may think fit.
T he reasons for the several provisions contained in the foregoing plan, have
been so far anticipated, and will, for the most part, be so readily suggested by
the nature of those provisions, that any comments which need further be
made, will be both few and concise.
T h e combination of a portion of the public debt, in the formation of the
capital, is the principal thing of which an explanation is requisite. T he chief
object of this is to enable the creation of a capital sufficiently large to be
the basis of an extensive circulation, and an adequate security for it. As has
been elsewhere rem arked, the original plan of the Bank of North America
contemplated a capital of ten millions of dollars, which is certainly not too
broad a foundation for the extensive operations to which a national bank is
destined. B ut, to collect such a sum in this country, in gold and silver, into !
one depository, may, without hesitation, be pronounced impracticable. Hence
the necessity of an auxiliary, which the public debt at once presents.
T his part of the fund will be always ready to come in aid of the specie; it
will more and more command a ready sale; and can therefore expeditiously
be turned into coin, if an exigency of the bank should a t any tim e require it.
This quality of prompt convertibility into coin, renders it an equivalent for
that necessary agent of bank circulation, and distinguishes it from a fund in
land, of which the sale would generally be far less compendious, and a t great
disadvantage. T he quarter yearly receipts of interest will also be an actual
addition to the specie fund, during the intervals between them, and the half
yearly dividends of profits. T he objection to combining land with specie,
resulting from their not being generally in possession of the same persons,
does not apply to the debt, which will always be found in considerable quan
tity among the moneyed and trading people.
T h e debt composing part of the capital, besides its collateral effect in ena
bling the hank to extend its operations, and consequently to enlarge its pro
fit*, will produce a direct annual revenue of six per centum from the Go
vernm ent, which will enter into the half yearly dividends received by the
stockholders.
W hen the present price of the public debt is considered, and the effect
which its conversion into bank stock, incorporated with a specie fund, would,
in all probability, have to accelerate its rise to the proper point, it will easily

BANK OF THF, U N ITED ST A T E S.

be discovered that the operation presents, in its outset, a very considerable
advantage to those who may become subscribers; and from the influence
which that rise would have on the general mass of the debt, a proportional
benefit to all the public creditors, and, in a sense which has been more than
once adverted to, to the community at large.
T here is an important fact which exemplifies the fitness of the public debt
for a bank fund, and which may serve to remove doubts in some minds on
this point: it is this, that the Bank of England, in its first erection, rested
wholly on that foundation. The subscribers to a loan to Government of one
million two hundred thousand pounds sterling, were incorporated as a bank,
of which the debt created by the loan, and the interest upon it, were the sole
fund. The subsequent augmentations of its capital, which now amounts to
between eleven and twelve millions of pounds sterling, have been of the same
nature.
The confining of the right of the bank to contract debts to the amount of
its capital, is an important precaution, which is not to be found in the consti
tution of the Bank of North America, and which, while the fund consists
wholly of coin, would be a restriction attended with inconveniences, but would
be free from any, if the composition of it should be such as is now proposed.
T he restriction exists in the establishment of the Bank of England, and, as a
source of security, is worthy of imitation. The consequence of exceeding the
limit, there, is, that each stockholder is liable for the excess, in proportion to
his interest in the bank. W hen it is considered that the directors owe their
appointments to the choice of the stockholders, a responsibility of this kind,
on the part of the latter, does not appear unreasonable; but, on the other hand,
it may be deemed a hardship upon those who may have dissented from the
choice. And there are many among us whom it might perhaps discourage
from becoming concerned in the institution. These reasons have induced tne
placing of the responsibility upon the directors by whom the limit prescribed
should be transgressed.
The interdiction of loans on account of the United States, or of any parti
cular State, beyond the moderate sum specified, or of any foreign Power, will
serve as a barrier to Executive encroachments, and to combinations inauspi
cious to the safety, or contrary to the policy of the Union.
The limitation of the rate of interest is dictated by the consideration, that
different rates prevail in different parts of the Union; and as the operations
of the bank may extend through the whole, some rule seems to be necessary.
T here is room for a question, whether the limitation ought not rather to be to
five than to six per cent., as proposed. I t may, with safety, be taken for
granted, that the former rate would yield an ample dividend, perhaps as much
as the latter, by the extension which it would give to business. The natural
effect of low interest is to increase trade and industry; because undertakings
o fe v e rv kind can be prosecuted with greater advantage. This is a tru tn
generally adm itted; but it is requisite to liave analyzed the subject in all its
relations, to be able to form a just conception of the extent of that effect. Such
an analysis cannot but satisfy an intelligent mind, that the difference of one
per cent, in the rate at which money may be had, is often capable of making
an essential change for the better in the situation of any country or place.
Every thing, therefore, which tends to lower the rate of interest, is peculi
arly worthy of the cares of legislators. And though laws, which violently sink
the legal rate of interest greatly below the market level are not to be com
mended, because they are not calculated to answer their aim, yet, whatever
has a tendency to effect a reduction, without violence to the natural course
of things, ought to be attended to and pursued. Banks are among the means
most proper to accomplish this end; and the moderation of the rate at which
their discounts are made, is a material ingredient towards it; with which their
own interest, viewed on an enlarged and permanent scale, does not appear to
clash.
B ut, as the most obvious ideas are apt to have greater force than those
which depend on complex and remote combinations, there would be danger

CH A R T E R OF 1791.

that the persons, whose funds’m ust constitute the stock of the bank, would be
diffident of the sufficiency of the profits to be expected, if the rate ot loans
and discounts were to be placed below the point to which they have been ac
customed; and might, on this account, be indisposed to embarking in the plan.
T here is, it is true, one reflection, which, in regard to men actively engaged
in trade, ought to be a security against this danger; it is this: that the ac
commodations which they might derive in the way of their business, at a low
rate, would more than indemnify them for any difference in the dividend,
supposing even that some diminution of it w ere to be the consequence. Hut,
upon the whole, the hazard of contrary reasoning among the mass of moneyed
men, is a powerful argument against the experiment. T he institutions of the
kind already existing add to the difficulty of making it. M ature reflection,
and a large capital, may, of themselves, lead to the desired end.
T h e last thing which requires any explanatory rem ark is the authority pro
posed to be given to the President to subscribe_ the amount of two millions
o f dollars 011 account of the public. The main design of this is to enlarge
the specie fund of the bank, and to enable it to give a more early extension
to its operations. Though it is proposed to borrow with one hand w hat is
lent with the other, yet the disbursement of what is borrowed will be pro
gressive, and bank notes may be thrown into circulation instead of the gold
and silver. Besides, there is to be an annual reimbursement of a p art ot the
sum borrowed, which will finally operate as an actual investm ent of so much
specie. In addition to the inducements to this measure, which result from
the general interest of the Government to enlarge the sphere of the utility of
the D ank, there is this more particular consideration, to wit: that, a s far a s
the dividend on the stock shall exceed the interest paid on the loan, there is
a positive profit.
T he Secretary begs leave to conclude with this general observation: T hat,
if the Bank of N orth America shall come forward with any propositions which
have for their object the engrafting upon that institution, the characteristics
which shall appear to the Legislature necessary to the due extent and safety
of a national D ank, there are, in his judgm ent, weighty inducem ents to giving
every reasonable facility to the measure. N ot only the pretensions of that
institution, from its original relation to the Government of the U nited States,
and from the services it has rendered, are such as to claim a disposition favora
ble to it, if those who are interested in it are willing, on their part, to place
it on a footing satisfactory to the Government, and equal to the purposes of a
Bank of the U nited States, but its co-operation would m aterially accelerate
the accomplishment of the great object; and the collision, which might other
wise arise, might, in a variety of ways, prove equally disagreeable and inju
rious. T he incorporation or union here contemplated, may be effected in
different modes, under the auspices of an act of the U nited States, if it shall
be desired by the Bank of N orth America, upon term s which shall appear
expedient to the Government.
A ll which is humbly submitted.
A L E X A N D E R H A M IL T O N ,

Secretary o f the Treasury.
T r e a s u r y D e p a r t m e n t , December 13, 1790.
I n S e n a t e , December 23, 1790.
On the reception of the copy of the said report, in the Senate, it was, on
motion,
Ordered, T hat M essrs. Strong, of M assachusetts, M orris, of Pennsylvania,
Schuyler, of N ew York, B utler, of South Carolina, and Ellsworth, of Con
necticut, be a committee to take into consideration the report of the Secre
tary of the T reasury, upon the plan of a national bank, and to prepare a bill
upon that subject.
On the 3d of January, 1791, M r. Strong, from the said committee, reported
a bill “ to incorporate the subscribers to the bank o f ----------.”

3 (J

bank

of th e

u n it e d

states.

T he history of this bill, on its passage through the Senate, is to be learnf
from one source only—the journals of that body. Its debates and proceed
ings were not then, as now, open to the public.
From the journals, however, we learn that, on the 6th, 10th, 11th, and 13th
days of January, 1791, the bill was under consideration, and on the 13th of
January it was agreed to fill the blank in the title with these words: “ the
United States of America.”
A motion was made to limit the term of incorporation to seven years, and
another to extend it to March 4th, 1815. On this latter motion, the yeas and
nays were:
Y e a s —Messrs. Bassett, Dickinson, Ellsworth, Elm er, Johnson, King, Langdon,
Morris, Read, Schuyler, and Strong— 11.
Nats— Messrs. Butler, Few, Foster, Hawkins, Henry, Johnston, Izard, Maclav,
Monroe, and W ingate— 10.

So it passed in the affirmative.
A motion was made to subjoin to the last clause agreed to, as follows:
“ Provided, nevertheless, that nothing herein contained shall be construed
to exclude the right of amending the same, on giving twelve months’ notice,
from and after the first of January, 1800.”
On the 14th of January, the question being taken on this amendment, it
passed in the negative.
On motion, it was agreed to reconsider the term of incorporation agreed to
yesterday, and to limit it to the 4th of March, 1811.
On the 18th of January, the bill being under consideration, it was ordered
that it be recommitted lor further amendments; and Mr. Strong, from the
committee to whom it was referred, reported sundry amendments; which
were agreed to.
On the 19th, a motion being made to expunge the 12th section, to w it:
“ A n d be it fu rth er enacted, T hat no other bank shall be established, by any
future law of the United States, during the continuance of the corporation
hereby created, for which the faith of the United States is hereby pledged,”
it passed in the negative.
20th January, 1791. “ Oil motion to reconsider the term of incorporation-,
and limit it to the year 1801, instead of 1811,” the vote was as follows:
Yeas— Messrs. B utler, Few, Gunn, Hawkins, Izard, and Monroe— 6.
Nays— Messrs. Bassett, Dalton, Dickinson, Ellsworth, Elm er, Foster, Johnson,
King, Langdon, Maclay, Morris, Read, Schuyler, Stanton, Strong, and W ingate— 16.

On motion to expunge the twelfth section, quoted above, it passed in the
negative.
W hereupon,
Resolved, That this bill do pass; that the title of it be, “ An act to in co r
porate the subscribers to the Bank of the United States.”
The bill was then transm itted to the House of Representatives for concur
rence.
H

o u se o f

e p r e s e n t a t iv e s .

The bill to incorporate the subscribers to the Bank of the United States
was, on the 21st of January, read a first and second time, and committed to
a Committee of the W hole House.
On the 31st, the House resolved itself into a Committee of the W hole,
(M r. Boudinot in the chairl and the bill was read by paragraphs; and no
amendments being offered, tne chairman reported it to the House, which voted
that it should be read the third time on the succeeding day.
F e b ru a ry

1791.

After the bill was read the third time, M r. Smith, of South Carolina, hav
ing moved that the bill be recommitted to a Committee of the W hole House,
it was determined by ayes and noes, in the negative, and it was
Ordered, T hat the bdl do lie on the table.

C H A R TE R OF 1791.

D E B A T E ON T H E MOTION O F MR. SM ITH, OF SO U TH CAROLINA, TO
RECOMM IT T H E BILL.
F eb ru a r y 1, 1791.
M r. S m it h , of South Carolina, observed, that the bill being taken up rather
unexpectedly yesterday, gentlemen did not appear prepared to discuss the
subject; it, therefore, was suffered to be read in Committee of the W hole, and
passed to the third reading, in his opinion rather informally, as the mem
bers were, thereby, deprived of giving their sentiments in the usual manner,
on a bill of the greatest importance.
He thought it susceptible of various am endments. [T he S p e a k e r having
observed that the bill, agreeable to the rules o f the House, could not be am end
ed without being recom m itted,] M r. Smith moved that the bill should be re
committed for the purpose of making sundry alterations and removing objec
tions which he thought the bill liable to. He then enumerated several objec
tions. Those who are to receive the subscriptions, he said, are not obliged
to give any bonds for their fidelity. H e thought the clause which excluded
foreigners from voting by proxy exceptionable. A nd the time in which sub
scriptions are to be received, he thought too contracted.

M r. J a c k s o n said lie was in favor of the motion for a recommitment, but
not for the reasons offered by the gentleman from South Carolina. H e was,
he said, opposed to the principles of the bill altogether. H e then adverted to
the situation of the United States, and observed that it was so different from
that of G reat Britain, at the time the bank was established in that country,
that no reason in favor of the institution could be deduced from thence. H e
adverted to the argum ent arising from the facility which banks afford, of an
ticipating the public resources in cases of emergency. T his idea of anticipa
tions he reprobated, as tending to involve the country in debt, and an end
less labyrinth of perplexities. T his plan of a National Bank, said he, is cal
culated to benefit a small part of the U nited States— the mercantile interest
only; the farmers, the yeomanry of the country, will derive no advantage
from it, as the bank bills will not circulate to the extremities of the Union.
H e said he had never seen a bank bill in the State of Georgia; nor will they
ever benefit the farmers of that State, or of N ew Hampshire. H e urged that
there was no necessity for instituting a new bank; there is one already esta
blished in this city, under the style of the Bank of N orth America. T his pro
posed institution is an infringement of the charter of that bank, which cannot
be justified. H e urged the unconstitutionality of the plan; called it a mo
nopoly, such an one as contravenes the spirit of the constitution—a monopoly
of a very extraordinary nature—a monopoly of the public moneys for the bene
fit of the corporations to be created. He then read several passages from the
Federalist, which, he said, were directly contrary to the assumptions of the
power proposed by the bill. H e hoped, therefore, it would be recom m itted,
and he could not help hoping, also, that it would be deferred to the next
session.
M r. L a w r e n c e observed, that the friends of the institution proposed, had
been unjustly charged with precipitating the bill; but, he said, it had long
been in the hands of the members; they have had time to consider it; the
usual forms have been observed in its progress, thus far, and if those who are
opposed to the bill did not see proper to come forward with their objections, it
surely is (heir own fault, and the advocates of the bill are not ju stly chargea
ble with precipitancy. H e then particularly replied to the objections offered
by M r. Smith, of South Carolina, and after considering them, said that those
objections did not, in his opinion, constitute sufficient reasons to induce a
recommitm ent of the bill. H e then noticed the constitutional objections of
Mr. Jackson, and said the Governm ent of the U nited States is vested, by the
constitution, with the power of borrowing money, and, in pursuance of this

BANK OF T H E UN ITED STATES.

idea, they have a right to create a capital by which they may, with greater
facility, carry the powers of borrowing, on any emergency, into effect. U nder
the late confederation, the Pennsylvania bank, called the Bank of N orth
America, was instituted. He presumed that it would not be controverted,
that the present Government is vested with powers equal to those of the late
confederation. H e said that he had no doubt its operations would benefit,
not only the centre, but the extremities also, of the Union. T he commer
cial, mechanical, and agricultural interests of the United States, are so com
bined, that one cannot be benefitted without benefiting the other. H e con
cluded by observing that he thought the Legislature of the United States could
not better answer tne purposes ol their appointment, than by passing this bill.
H e hoped, therefore, it would not be recommitted, but that it would now
pass.
M r. L e e observed, that, having been confined by sickness, he w a s preclud
ed from attending the House yesterday; but, sick as he was, had he supposed
there was a prospect of a bill of such magnitude and importance passing, with
out a discussion of its principles, he certainly would have attended, ancfoffered
his objections to various parts of it, which he thought very exceptionable. lie
hoped, therefore, it would now be recommitted, that a bill which is so une
qual and so partial may undergo a thorough discussion.
M r. T u c k e r was in favor of recommitment. _ He acknowledged that those
who had their objections to the bill were certainly blameable for not coming
forward with them yesterday. H e then stated sundry objections to the bill.
T he time allowed to receive the subscriptions, he said, is too short, and will
benefit those only in the vicinity of the bank. The clause which authorizes
the loaning $ 100,000 to the Government, without express provision by law,
he thought exceptionable, as the Executive will be able, by this means, to
borrow, at any time, without being authorized, to almost any amount, of the
bank. T he loan of $ 2 , 0 0 0 , 0 0 0 . by the United States, to the bank, he objected
to, as diverting that sum from the particular object for which it was borrowed.
There is no appropriation, said he, of the half yearly dividend of profits ac
cruing to the United States, which, he observed, was a very essential defect.
Mr. Tucker stated other objections as reasons fo ra recommitment.
M r. W il l ia m s o n was in favor of the recommitment, to give those who say
they have not had an opportunity of offering their objections, time to do it;
ana if the motion is not agreed to, he should not give his vote for the bill.
He then adverted to the objections deduced from the constitution, and ex
plained the clause respecting monopolies, as referring altogether to commer
cial monopolies.
M r. S h e r m a n objected to the recommitment. lie said, that, though the
bill could not be amended without its being recommitted, yet it was open to
discussion and objection, previous to taking a vote on its passing. H e did not
think the objections offered, afforded sufficient reasons for a recommitment.
He replied to the observations offered by several gentlemen who had spoken
in favor of the motion.
Mr. G e r r y expressed his surprise at the observations of the gentlemen who
had neglected to offer their objections to the bill before, and said it could only
be imputed to their own neglect, and not to any precipitancy on the part of
the friends of the bill. M r. G erry noticed the several objections which had
been oftered, and said, if nothing more important could be ottered, he thought
it unjustifiable in the House to go into a committee.
Mr. M a d is o n observed, that at this moment it was not of importance to
determine how it has happened that the objections which several gentlemen
now say they have to offer, against the bill, were not made at the proper
time; it is sufficient for them, if the candor of the House should lead them
now to recommit the bill, that, in a Committee of the W hole, they may have
an opportunity to offer their objections.

C H A R TE R OF 1791.

M r. A m e s replied to M r. Madison. He said he did not conceive that the
appeal now made to the candor of the House was in point. T he gentlemen
who object to the bill had an opportunity to offer their objections; the cus
tomary forms have been attended to, and the whole question for recommit
ment turns on the force of the objections which are now offered to the gene
ral principles of the bill, altogether; the candor of the House, he conceived,
was entirely out 9 f the question, and therefore not to be appealed to; but the
justice due to their constituents in the proper discharge of the duty reposed in
them. He said it appeared to him absurd togo into a Committee of the W hole,
to determine whether the bill is constitutional or not; if it is unconstitutional,
that amounts to a rejection of it altogether.
M r. M a d i s o n thought there was the greatest propriety in discussing a con
stitutional question in the Committee of the W hole.
M r. S tone and M r. G iles were in favor of recommitment; they objected
to the unconstitutionality of the bill, and to several of its particular clauses.
M r. V i n i n g said he thought it was a subject of congratulation that the bill
was in its present situation; it had happily passed to the third reading with
out that tedious discussion which bills usually receive. T he subject has
been a considerable time before the House, and the gentlemen have had time
to contemplate it. T he bill is now in the stage to which gentlemen very usu
ally reserve themselves to state their objections at large; he hoped they would
now do it. H e was not perfectly satisfied as to the constitutional point; he
therefore hoped gentlemen would state their objections, that those who are
satisfied on that point, may offer their reasons.
M r. B o u d i n o t stated the process of the business yesterday. H e observed
he had then the honor to be in the chair; he had read the bill very distinctly
and deliberately, with proper pauses; he thought that the fullest opportunity
had been offered for gentlemen to come forward with their objections; he was
opposed to the recommitment, as it would, he feared, issue in a defeat of the
bill, this session. He had one difficulty, however, respecting the unconstitu
tionality of the bill; this he hoped to have removed, and he noped that a full
discussion of its general principles would take place.
F ebruary 2, 1791.

On the question, “ Shall the bill pass ?” the following debate took place.
M r. M a d i s o n began with a general review of the advantages and disadvan
tages of banks. T he former he stated to consist in, F irst. T h e aids they
afford to merchants, who can thereby push their m ercantile operations far
ther, with the same capital. Second. T he aids to merchants in paying punc
tually, the customs. T h ird . Aids to the Government, in complying punctu- 11 ^
ally with its engagements, when deficiencies and delays happen in the reve- I
nue. Fourth. In diminishing usury. F ifth . In saving the wear of gold and
silver, kept in the vaults, and represented by notes. S ix th . In facilitating '
occasional rem ittances from different places where notes happen to circulate.
T he effect of the proposed bank in raising the value of stock, he thought, had
been greatly overrated. I t no doubt would raise that of the stock subscribed
into the bank, but could have little effect on stock in general, as the interest
on it would remain the same, and the quantity taken out of the m arket would
be replaced by the bank stock.
T h e principal disadvantage consisted in, F irst. Banishing the precious
m etals, by substituting another medium to perform their office. T his effect
was inevitable. I t was adm itted by the most enlightened patrons of banks,
particularly by Smith on the W ealth of N ations. T he common answer to the
objection was, that the money banished was only an exchange for something
equally valuable, that would be imported in return. H e adm itted the weight
of this observation, in general, but doubted w hether, in the present habits of
this country, the return would not be in articles of no permanent use to it.

BANK OF T H E UN ITED STA TES.

Second. Exposing the public and individuals to all the evils of a run on the
bank, which would be particularly calamitous in so great a country as this,
and might happen from various causes, as false rumors, bad management of
the institution, an unfavorable balance of trade, from short crops, &c. I t was
proper to be considered, also, that the most important of the advantages would
be better obtained by several banks, properly distributed, than by a single one.
T he aids to commerce could only be afforded at, or very near, the seat of the
bank. The same was true of aids to merchants in the payment of customs.
Anticipations of the Government would, also, be most convenient at the
different places where the interest of the debt was to be paid. T he case in
America was different from that in England; the interest there was all due
a t one place, and the genius of the monarchy favored the concentration of
wealth and influence at the metropolis.
H e thought the plan liable to other objections; it did not make so good a
bargain for the public as was due to its interests. The charter to the Bank
of England had been granted only for eleven years, and was paid for by a
loan to the Government, on term s better than could be elsewhere got. Every
renewal of the charter had, in like manner, been purchased; in some in
stances at a very high price. The same had been done by the banks of Genoa,
N aples, and other like banks of circulation- T he plan was unequal to the
public creditors; it gave an undue preference to the holders of a particular
demonination of the public debt; and to those at, and within reacn of, the
seat of Government. If the subscriptions should be rapid, the distant holders
of paper would be excluded altogether,
in making these remarks on the merits of the bill, he had reserved to himV
self, he said, the right to deny the authority of Congress to pass it. He had
entertained this opinion from the date of the constitution. His impressions
might, perhaps, be the stronger, because he well recollected that a power to
i grant charters of incorporation had been proposed in the general convention,
and rejected. Is the power of establishing an incorporated bank among the
powers vested by the constitution, in the Legislature of the United States?
This is the question to be examined.
After some general remarks on the limitations of all political power, he took
notice of the peculiar manner in which the Federal Government is limited.
I t is not only a general grant out of which particular powers are excepted; it
is a grant of particular powers, |eaving the general mass in other hands. So
it had been understood by its friends and its foes; and j?o it was to be in ter
preted.
As preliminaries to a right interpretation, he laid down the following rules:
An interpretation that destroys the very characteristic of the Government,
cannot be just.
W here a meaning is clear, the consequences, whatever they may be, are
to be adm itted; where doubtful, it is fairly triable by its consequences.
In controverted cases, the meaning of the parties to the instrum ent, if to be
collected by reasonable evidence, is a proper guide.
Contemporary and concurrent expositions are a reasonable evidence of the
meaning of the parties.
In admitting or rejecting a constructive authority, not only the degree of its
incidentally to an express authority is to be regarded, but the degree of its
importance also; since on this will depend the probability or improbability of
its being left to construction.
: Reviewing the constitution with an eye to these positions, it was not possi
ble to discover in it the power to incorporate a bank. T he only clauses under
which such power could be pretended, was, either,
l i n t . The power to lay and collect taxes to pay the debts and provide
tor the common defence and general welfare; or,
'rhe power to borrow money on the credit of the United S tates; or,
J/urd. The powers to pass all laws necessary and proper to carry into
■' execution those powers.

CH A RTER OF 1791.

T h e bill did not come within the first power. I t laid no tax to pay the
debts, or provide for the general welfare. I t laid no tax whatever. I t was
altogether foreign to the subject.
No argument could be draw n from the term s “ common defence and general
w elfare.” The power as to these general purposes was limited to acts laying
taxes for them; and the general purposes themselves were limited and ex
plained by the particular enumerationssubjoined. T o u n d erstan d these terms
in any sense that would justify the power in question, would give to Congress
an unlimited power; would render nugatory the enumeration of particular
powers; would supersede all the powers reserved 1o the State Governments.
These terms are copied from the articles of confederation; had it ever been
retended that they were to be understood otherwise than as here explained?
t had been said, that “ general welfare” m eant cases in which a general
power might be exercised by Congress, without interfering with the pow'er of
the States; and th a t the establishment of a National Bank was of this sort.
T here were, he said, several answers to this novel doctrine.
First. T he proposed bank would interfere, so as indirectly to defeat a State
bank a t the same place.
Second. I t would directly interfere with the rights of States to prohibit, as
well as to establish, banks, a n d the circulation of D a n k notes. H e mentioned
a Jaw of Virginia, actually prohibiting the circulation of notes payable to
bearer.
T h ird . Interference with the powers of the States was no constitutional
criterion of the power of Congress. I f the power was not given, Congress
could not exercise it; if given, they might exercise it, although it should inter
fere with the laws, or even the constitution, of the States.
Fourth. If Congress could incorporate a bank, merely because the act would
leave the States free to establish banks also, any other incorporation might be
made by Congress. They could not incorporate companies of manufacturers,
or companies for cutting canals, or even religious societies, leaving similar in
corporations by the States, like State banks, to themselves; Congress might
even establish religious teachers in every parish, and pay them out of the
treasury of the United States, leaving other teachers unmolested in their
functions. These inadmissible consequences condemned the controverted
principle.
T he case of the bank, established by the former Congress, had been cited
as a precedent. T his was known, he said, to have been the child of neces
sity. It never could be justified by the regular powers of the articles of con
federation. Congress betrayed a consciousness of this, in recommending to
the States to incorporate the bank also. T hey did not attem pt to protect the
bank notes, by penalties against counterfeiters. These were reserved wholly
to the authority of the States.
T he second clause to be examined is that which empowers Congress to
borrow money.
Is this a bifl to borrow money? It does not borrow a shilling. Is there any
fair construction by which the bill can be deemed an exercise of the power to
borrow money? T he obvious meaning of the power to borrow money, is? that
accepting from, and stipulating payments to, those who are able and m illing
to lend.
T o say that the power to borrow involves the power of creating the ability,
where there may be the will to lend, is not only establishing a dangerous prin
ciple, as will be immediately shown, but is as forced a construction, as to say,
that it involves the power of compelling [the will, where there may be the
ability to lend.
T h e third clause is that which gives the power to pass all laws necessary
and proper to execute the specified powers.
W hatever meaning this clause may have, none can be adm itted that would
give an unlimited discretion to Congress.

BANK OF T H E U N ITED ST A T E S.

Its m eaning must, according to the natural and obvious force of the term s
and the context, be limited to means necessary to the end, and incident to the
nature, of the specified powers.
T he clause is, in fact, merely declaratory of what would have resulted, by
unavoidable implication, as the appropriate, as it were, technical means of
executing those powers. In this sense it had been explained, by the friends
of the constitution,’and ratified by the State conventions.
T he essential characteristic of the Government, as composed of limited and
enumerated powers, would be destroyed, if, instead of direct and 'incidental
means, any means could be used, which, in the language of the preamble to
the bill, might be conceived to be conducive to the successful conducting of
the finances, or might be conceived to tend to give fa cility to the obtaining of
loans. He urged an attention to the diffuse and ductile terms which had been
found requisite to cover the stretch of power contained in the bill. H e com
pared them with the terms necessary and proper, used in the constitution, and
asked whether it was possible to view the two descriptions as synonymous, or
the one as a fair and safe commentary on the other.
If, proceeded he. Congress, by virtue of the power to borrow, can create
the means of lending, and, in pursuance of these means, can incorporate a
bank, they may do any thing whatever creative of like means.
T he E ast India CompanyTias been a lender to the British Government, as
well as the Bank, and the South Sea Company is a greater creditor than
either. Congress may then incorporate similar companies in the United
States, and that, too, not under the idea of regulating trade, but under that
of borrowing money.
Private capitals are the chief resources for loans to the British Government.
W hatever these may be conceived to favor the accumulation of capital, may
be done by Congress. They may incorporate manufacturers. They may give
monopolies in every branch of domestic industry.
If, again, Congress, by virtue of the power to borrow money, can create the
ability to lend, they may, by virtue of the power to levy money, create the
ability to pay it. The ability to pay taxes depends on the general wealth of
the society, and this, on the general prosperity of agriculture, manufactures,
and commerce. Congress may then give bounties, and make regulations on
all these objects.
The States havej it is allowed on all hands, a concurrent right to lay and
collect taxes. T his power is secured to them, not by its being expressly re
served, but by its not being ceded by the constitution. T he reasons for the
bill cannot be admitted, because they would invalidate that right; why may
it not be conceived by Congress, that a uniform and exclusive imposition of
taxes would not, less than the proposed bank, be conducive to the successful
conducting of the national finances, and tend to give fa cility to the obtaining
ol a revenue for the use of the Government?
1 lie doctrine ot implication is always a tender one. The danger of it has
been telt in other Governments. T ne delicacy was felt in the adoption of
our on n; the danger may also be felt, if we do not keep close to our chartered
authorities.
M ark the reasoning on which the validity of the bill depends. T o borrow
money is made the end, and the accumulation of capital implied as the means.
1 e accumulation ot capital is, then, the end, and a bank implied as the
means. I lie bank is then the end, and a charter of incorporation, a monopoly,
capital punishments, &c. implied as the means.
I{ implications, thus remote, and thus multiplied, can be linked together, a
chain may be formed, that will reach every object of legislation, every object
w u n n the whole compass ot political economy.
J he latitude of interpretation required by the bill is condemned by the rule
lurmshed by the constitution itself.
a, . ^ §l 9f ,hr t PT ei: V * rfSli,ate tlle va,ue of money,” yet it is expressly
added, not left to be implied, that counterteiters may be punished. They
have the power “ to declare w ar,” to which armies ir e more in d d en t than

C H A R T E R OF 1V91.

incorporated banks to borrowing, yet it is expressly added, the power “ to
raise and support arm ies;’' and to this again, the express power, “ to make
rules and regulations for the government of armies” —a like rem ark is appli
cable to the powers as to ;t navy.
T h e regulation and calling out of the militia are more appurtenant to war,
than the proposed bank to borrowing; yet the former is not left to construction.
T h e veiy power t<r borrow money is a less remote implication from the
power of war, than an incorporated monopoly bank from the power of bor
rowing—yet the power to borrow is not left to implication.
It is not pretended, that every insertion or omission in the constitution is
the effect of systematic attention. T his is not the character of any human
work, particularly the work of a body of men. T he example cited, with others
that might be added, sufficiently inculcate, nevertheless, a rule of interpre
tation very different from that on which the bill rests. They condemn the
exercise of any power, particularly a great and im portant power, which is not
evidently and necessanly involved in an express power.
I t cannot be denied that the power proposed to bo exercised, is an im port
a n t power.
As a charter of incorporation, the bill creates an artificial person, previously
not existing in law% It confers important civil rights and attributes, which
could not otherwise be claimed. I t is, although not precisely similar, a t least
equivalent to the naturalization of an alien, by which certain new civil char
acters are acquired by him. W ould Congress have had the power to n atu ral
ize, if it had not been expressly given?
In the power to make by-laws, the bill delegated a sort of legislative
power, which is unquestionably an act of a high and important nature. H e
took notice of the only restraint on the by-laws, that they were not to be
contrary to the law ana the constitution of the bank, and asked, what law was
intended? I f the law of the U nited States, the scantiness of their code would
give a power, never before given to a corporation, and obnoxious to the States,
whose laws would then be superseded, not only by the laws of Congress, but
by the by-laws of a corporation within their own jurisdiction- If the law in
tended was the law of the S tate, then the State might make laws that would
destroy an institution of the United States.
T h e bill gives a power to purchase and hold lands: Congress could not
purchase lands within a State, “ without theconsentof its Legislature.” How
could they delegate a power to others which they did not possess themselves?
I t takes from our successors, who have equal rights with ourselves, and
with the aid of experience will be more capable of deciding on the subject,
an opportunity of exercising that right for an immoderate term.
I t takes from our constituents the opportunity of deliberating on the untried
measure, although their hands are also to be tied by it, for the same term.
I t involves a monopoly which effects the equal rights of every citizen.
I t leads to a penal regulation, perhaps capital punishm ent—one of the most
solemn acts of sovereign authority.
From this view of the power o f incorporation exercised in the bill, it never
could be deemed an accessory or subaltern power, to be deduced by implica
tion, as a means o f executing another power. I t w'as in its nature a distinct,
and independent, and substantive prerogative, which, not being enum erated in
the constitution, could never have been m eant to be included in it, and, not
being included, could never be rightfully exercised.
He had adverted to a distinction, which he said had not been sufficiently
kept in view, between a power necessary and proper for the Government or
U nion, and a power necessary for executing the enum erated powers in the
latter case; the powers included in each of the enum erated powers were not
expressed, but to be draw n from the nature of each. In the former, the pow
ers composing the Government were expressly enum erated. T his constituted
the peculiar nature of the Governm ent; no power, therefore, not enum erated,
could be inferred from the general nature of G overnm ent. Had the power e f

BANK O f T H E UNITED STA TES.

making treaties, for example, been omitted, however necessary it might have
been, the delect could only have been lamented, or supplied by an amend
ment of the constitution.
B ut the proposed bank could not even be called necessary to the Govern
ment; at most, it could be but convenient. Its uses to the Government could
be supplied by keeping the taxes a little in advance; by loans from indivi
duals; by the other banks over which the Government would have equal com
mand, nay, greater, as it may g ran to r refuse to these the privilege, made a
free and irrevocable gift to the proposed bank, of using their notes 111 the fede
ral revenue.
He proceeded next to the contemporary expositions given to the constitution.
The defence against the charge founded on the want of a bill of rights, pre
supposed, he said, that the powers not given, were retained; and that those
given were not to be extended by remote implication. On any other suppo
sition, the power of Congress to abridge the freedom of the press or the rights
of conscience, &c. could not have been disproved.
T he explanations in the State conventions all turned on the same funda
mental principle, and on the principle, that the terms necessary and proper,
gave no additional powers to those enumerated. [H ere he read sundry pas
sages, from the debates of the Pennsylvania, Virginia, and North Carolina
conventions, showing the ground on which the constitution had been vindi
cated by its principal advocates against a dangerous latitude of its powers,
charged on it Dy its opponents.] He did not undertake to vouch for the accu
racy or authenticity of the publications which he quoted. H e thought it proba
ble that the sentiments delivered might, in many instances, have been mis
taken. or imperfectly noted; but the complexion of the whole, with what he
himself, and many otlvers must recollect, fully justified the use he had made
of them.
T he explanatory declarations and amendments accompanying tlie ratifica
tions of tne several States, formed a striking evidence, wearing trie same com
plexion. He referred those who might doubt, to the several acts of ratifica
tion.
The explanatory amendments, proposed by Congress themselves,.at least,
would be gooil authority with them; all these annunciations of power pro
ceeded on a rule of construction excluding the latitude now contended for.
These explanations were the more to be respected, as they had not only been
proposed by Congress, but ratified by nearly three-fourths of the States. He
read several of the articles proposed, remarking particularly on the 11th and
12th; the former, as guarding against a latitude of interpretation—the latter
as excluding every source of power not within the constitution itself.
W ith all this evidence of the sense in which the constitution was under
stood and adopted, will it not be said, if the bill should pass, that its adoption
was brought about by one set of arguments, and that it is now administered un
der the influence ot another set? And this reproach will have the keener sting,
because it is applicable to so many individuals concerned in both the adoption
and administration.
In fine, if the power were in the constitution, the immediate exercise of it
cannot be essential; if not there, the exercise of it involves the guilt of usurpa
tion, and establishes a precedent of interpretation, levelling all the barriers
which limit the powers ot the General Government and protect those of the
State governments. If the point be doubtful only, respect for ourselves,
who ought to shun the appearance of precipitancy and ambition; respect for
our successors, who ought not lightly to be deprived of the opportunity of
exercising the rights ot legislation; respect for our constituents, who have
had no opportunity ot making known their sentiments, and who are themselves
to be bound down to the measure for so long a period; all these considerations
require that the irrevocable decision should at least be suspended until another
session I t appeared, on the whole, he concluded, that the power exercised by the
bdl was condemned by the silence of the constitution; was condemned by the

CH A RTER OF 1791,

rule of interpretation, arising out of the constitution; "was condemned by its
tendency to destroy the main characteristic of the constitution; was con
demned by the expositions of the friends of the constitution, whilst depending
before the public; was condemned by the apparent intentions of the parties,
which ratified the constitution; was condemned by the explanatory am end
ments proposed by Congress themselves to the constitution; and he hoped it
would receive its final condemnation by the vote of this House.
F

ebruary

3, 1791.

A motion was made by Mr. W i l l i a m s o n , and seconded, that the first sec
tion of the said bill be recommitted to a Committee of the W hole House, “ for
the purpose of altering the time or m anner of subscribing; so that the holders
of State securities, assumed to be paid by the United States, may be on a foot
ing with the holders of other securities, formerly called national securities.”
I t passed in the negative. Ayes 21, noes 38.
__
F urther debate arising on the main question,
M r . A mes said, little doubt remains with respect to the utility of banks. It
seems to be conceded, within doors and without, that a public bank woukl'be
useful to trade, that it is almost essential to revenue, and that it is little short
of indispensable necessity in time of public emergency. In countries whose
forms of government left them free to choose, this institution has been adopted
o f choice; and in times of national danger and calamity, it has afforded such
aid to Government as to make it appear, in the eyes c f the People, a neces
sary means of self preservation. The subject, however intricate in its nature,
is at least cleared from obscurity. I t would not be difficult to establish its
principles,and to deduce from its theory, such consequences, as would vindi
cate the policy of the measure. B ut why should we lose time to examine the
theory, when it is in our power to resort to experience? A fter being tried by
that test, the world has agreed in pronouncing the institution excellent. This
new capital will invigorate trade and manufactures with new energy. It
will furnish a medium for the collection of the revenues; and if Government
should be pressed by a sudden necessity, it will afford seasonable and effec
tual aid. W ith all these, and many other pretensions, if it was now a ques
tion whether Congress should be vested with the power of establishing a
bank, I trust that this H ouse,and all America, would assent to the affirmative.,
This, however, is not a question of expediency, but of duty. W e are not at
liberty to examine which of several modes of acting is entitled to the prefer
ence. But we are solemnly warned against acting at all. W e arc told, that
the constitution will not authorize Congress to incorporate the subscribers to
the bank. L e t us examine the constitution: and if that forbids our proceed
ing, we m ust reject the bill; though we shall do it with deep regret, that such
an opportunity to serve our country must be suffered to escape, for the w ant
of a constitutional power to improve it.
T he gentleman from Virginia considers the opposers of the bill as suffer
ing disadvantage, because it was not debated as bills usually are, in com mit
tee of the whole house. He has prepared us to pronounce an eulogiuin upon
his consistency,by informing us that he voted, in the old Congress, against the
Bank of N orth America, on the ground of his present objection to the consti
tutionality. He has told us, that the meaning of the constitution is to be in
terpreted by contemporaneous testimony. He was a member of the conven
tion which formed it, and of course, his opinion is entitled to peculiar weight.
W hile we respect his former conduct, and admire the felicity of his situation,
we cannot think he sustains disadvantage in the debate. Besides, he m ust
have been prepared with objections to the constitutionality, because he tells
us they are of long standing, and had grown into a settled habit of thinking.
W h y then did he suffer the bill to pass the committee in silence? T he friends
of the bill have more cause to complain of disadvantage: for, while he has had
time to prepare his objections, they are obliged to reply to them without p re
meditation.

BANK OF T H E UN ITED ST A T E S.

In making this reply, I am to perform a task for which my own mind had
not admonished me to prepare. 1 never suspected that the objections 1 have
heard stated, had existence. I consider them as discoveries; and had not the
acute penetration of that gentleman brought them to light, I am sure that my
own understanding would never have suggested them.
It seems strange, too, that, in our enlightened country, thepublic should have
been involved in equal blindness. W hile the exercise of even the lawful
powers of Government is disputed, and a jealous eye is fixed on its proceed
ings, not a whisper has been heard against its authority to establish a bank.
Still, however unseasonably, the old alarm of public discontent is sounded in
our cars.
Two questions occur: May Congress exercise any powers, which are not
expressly given in the constitution, but may be deduced by a reasonable con
struction of that instrument? A nd, secondly, will such a construction war
rant the establishment of the bank?
The doctrine, that powers m jy be implied which are not expressly vested
in Congress, has long been a bugbear to many worthy persons. They appre
hend m at Congress, by putting constructions upon the constitution, will
govern by its own arbitrary discretion; and therefore, that it ought to be bound
to exercise the powers expressly given, and those only.
If Congress may not make laws conformably to the powers implied, though
not expressed in the frame of government, it is rather late in the day to adopt
it as a principle of conduct. A great part of our two years’ labor is lost,
and worse than lost to the public: lor we have scarcely made a law, in which
we have not exercised our discretion, with regard to the true intent of the
constitution. Any words but those used in that instrument will be liable to
a different interpretation. W e may regulate trade—therefore we have taxed
ships; erected light houses; made laws to govern seamen, &c.; because we say
they are the incidents to that power. T he most familiar and undisputed acts
of legislation will shew, that we have adopted it as a safe rule of action, to
legislate beyond the letter of the constitution.
He proceeded to enforce this idea by several considerations, and illustrated
it by various examples. He said that the ingenuity of man was unequal to
providing, especially', before hand, for all the contingencies that would hap
pen. The constitution contains the principles which are to govern in making
laws; but every law requires the application of the rule to the case in question.
W e may err m applying it; but we are to exercise our judgments, and, on
every occasion, to decide according to an honest conviction of its true
meaning.
T he danger of implied powers does not arise from its assuming a new prin
ciple. W e have not only practised it often, but we can scarcely proceed
without it. N or does the danger proceed so much from the extent of the
power, as from its uncertainty. W hile the opposers of the bank exclaim
against the exercise of this power by Congress, do they mark out the lim its
<»f the power which they will leave to us with more certainty than is done by
the advocates of the bank? Their rules, by interpretation, by ex-temporaneous testimony, the debates ol conventions, and the doctrine of substantive
and auxiliary powers, will be found as obscure, and, of course, as formidable,
as that which they condemn. T hey oi\ly set-up one construction against
another.
1 he powers of Congress are dissected. W e are obliged to decide the ques
tion according to truth. The negative, if false, is less safe than the a ffirm
tive, it true. W hy, then, shall we be told that the negative is the safe side?
-Not exercising the powers we have, may be as pernicious as usurping those
we have not. If the power to raise armies had not been expressed in the
enumeration of the powers of Congress, it would be implied from other parts
•
iC constitution. Suppose, however, it were omitted, and our country
invaded—would a decision in Congress, against raising armies, be safer than
the affirmative? T he blood of our citizens would be shed, and shed una
venged. He thought, therefore, that there was too much prepossession with

CH'AHTEIt O F 1791.

some against the bank, and the debate ought to be considered more impar
tially; as the negative was neither more safe, certain, nor conformable to our
duty, than the other side of the question. A fter all, the proof of the affirma
tive imposed a sufficient burden, as it is easier to raise objections than to
remove them. W ould an y o n e doubt that Congress may lend money, that
they may buy their debt in the market, or redeem their captives from Algiers?
Y et no such power is expressly given, though it is irresistibly implied.
If, therefore, some interpretation of the constitution m ust be indulged, by
what rules is it to be governed? T he great end of every association of p e r
sons or States, is to effect the end of its institution. T ne m atter in debate
affords a good dlustration. A corporation, as soon as it is created, has cer
tain powers or qualities tacitly annexed to it, which tend to promote the end
for which it was formed; such as, for example, its individuality, its powers to
sue and be sued, and the perpetual succession of persons. Government is,
itself, the highest kind of corporation; and, from the instant of its formation,
it has, tacitly annexed to its being, various powers, which the individuals
who framed it did not separately possess, but which are essential to its effect
ing the purposes for which it was framed; to declare, in detail, every thing
that Government may do, could not be performed, and has never been a t
tem pted. I t would be endless, useless, and dangerous; exceptions of what it
may not do, are shorter and safer.
Congress may do what is necessary to the end for which the constitution
was adopted, provided it is not repugnant to the natural rights of man, or to
those which they have expressly reserved to themselves, or to the powers
which are assigned to the States. T his rule of interpretation seems to be
safe, and not a very uncertain one, independently of the constitution itself.
By that instrum ent certain powers are specially delegated, together with all
powers necessary and proper to carry them into execution. T h at construc
tion may be maintained to be a safe one, which promotes the good of the society
and the ends for which the Government was adopted, without impairing the
rights of any man, or the powers of any State.
T h is, he said, was remarkably true of the bank; no man could have cause
to complain of it; the bills would not be forced upon any one. I t is of the
first utdity to trade. Indeed, the intercourse, from State to State, can never
be on a good footing without a bank, whose paper will circulate more exten
sively than that of any S tate bank. W hether the power to regulate trade,
from State to State, will involve that of regulating inland bills of exchange
and bank paper, as the instrum ents of the trade incident to the power, he
would not pause to examine. T h at is an injury and wrong which violates the
right of another. As the bank is founded on the free cTioice of those who
make use of it, and is highly useful to the People and to G overnm ent, a libe
ral construction is natural and safe. This circumstance creates a presum p
tion in favor of its conformity to the constitution. T his presumption is
enforced by the necessity of a bank to other Governments. T he most orderly
governments in Europe have banks. T hey are considered as indispensably
necessary; these examples are not to be supposed to have been unnoticed.
W e are to pay the interest of our debt in thirteen places. Is it possible to
transport the revenue from one end of the continent to the other? N ay, a
week before the quarter’s interest becomes due, transfers may be m ade which
may require double the sum in Boston which was expected. T o guard
against this danger, an extra sum must be deposited at the different loan offices.
This extra sum is not to be had; our revenue is barely equal to the interest
due. This imposes an absolute necessity upon the Government to make use
of a bank. T he answ er is, that the State banks will supply this aid. This
is risking a good deal to the argum ent against the bank: tor, will they admit
the necessity and yet deny to the Government the lawful and only adequate
means of providing for it? T en of the States have no banks; those who have,
may abolish theirs, or suffer their charters to expire. B ut the State banks are
insufficient to the purpose; their paper has not a sufficient circulation; of
course their capitals are small. Congress is allowed a complete legislative

BANK OF T H E U N ITED ST A T E S.

power over its own finances, and yet, without the courtesy of the States, it
cannot be exercised. This seems to be inconsistent.
I f a war should suddenly break out, How is Congress to provide for it?
perhaps Congress would not be sitting; great expenses would be incurred, and
they must be instantly provided for. How is this to be uone? By taxes? And
will the enemy wait till they can be collected? By loans at homer Our citi
zens would employ their money in war speculations, and they are not, indivi
dually, in a condition to lend a sufficient sum in specie, or shall we send
across the sea for loans? T he disputes between England and Spain furnish
an example; the aid of their banks, for several millions, was prompt and effec
tual. Or will vou say that Congress might issue paper money? T h at power,
ruinous and fallacious as it is, is deduced from implication: for it is not ex
pressly given. A bank only can afford the necessary aid, in time of sudden
emergency. I f we have not the power to establish it, our social compact is
incomplete; we want the means of self preservation.
I shall, perhaps, be told, that necessity is the tyrant’s plea. I answer
that it is a miserable one, when it is urged to palliate the violations of private
right. W ho suffers by this use of our authority? Not_ the States: for they
are not warranted to establish a national bank. N ot individuals: for they
will be assisted in trade, and defended from danger by it.
Having endeavored to enforce his argument by noticing the uses of banks to
trade, to revenue, to credit, and, in cases of exigency, he adverted to the au
thority of our own precedents. Our right to govern the W estern territory is
not disputed. I t is a power which no State can exercise. I t must be exercis
ed, ana, therefore, it resides in Congress. B ut how does Congress get this
power? It is not expressly given in the constitution, but is derived from the
nature of the case, or by implication from the power to regulate the property
of the United States. I f the power flows from the nature and necessity of
the case, it may be demanded, is there not equal authority for the bank? I f
it is derived from the power of Congress to regulate the territory and other
property of the United States, and to make all needful rules and regulations
concerning it, and for the disposal of it, a strict construction woula restrain
Congress merely to the management and disposal of property, and of its own
property; yet it is plain that more is intended. Congress has, accordingly,
made rules, not only for governing its own property, but the property of the
persons residing there. It has made rules which have no relation to property, at
all, for punishing crimes. In short, it exercises all power in that territory.
N ay, it has exercised the very power of creating a corporation. T he Govern
ment of that territory is a corporation; and who will deny that Congress may
lawfully establish a bank beyond the Ohio? I t is fair to reason by analogy
from a power which is unquestionable, to one which is the subject of debate.
He then asked whether it appeared, on this view of the subject, that the
estabjishment of a national bank would be a violent misinterpretation of the
constitution? H e did not contend for an arbitrary, unlimited discretion in
the Government to do every thing. He took occasion to protest against such
a misconception of his argument. H e had noticed the great marks by which
the construction of the constitution, he conceived, must be guided and lim it
ed, and these, if not absolutely certain, were very far from being arbitrary or
unsafe. It is for the House to judge whether the construction, which denies
the power of Congress, is more definite and safe.
In proving that Congress may exercise powers, which are not expressly
granted by the constitution, he had endeavored to establish such rules of interpretation, and had illustrated his ideas by such observations as would anti
cipate, m a considerable degree, the application of his principles to the point
m question. Before he proceeded to the construction of the clauses of the
constitution which apply to the argument, he observed that it would be pro
per to notice the qualities of a corporation, in order to take a more exact view
of the controversy.
He adverted to the individuality and the perpetuity of a corporation, and
that the property of the individual should not be liable for the debts of the

CH A R TE R OF 1791.

bank or company. These qualities are not more useful to the corporation
than conformable to reason: but Government, it is said, cannot create these
qualities. This is the marrow of the argument: for Congress may set up a
bank of its own to be managed as public property, to issue notes wnich shall
be received in all payments at the treasury, which shall be exchangeable into
specie on demand, and which it shall be death to counterfeit. Such a bank
would be less safe and less useful than one under the direction of private
persons; yet the power to establish it is indisputable. I f Congress has the
authority to do this business illy, the question returns whether the pow ers of
a corporation, which are essential to its being well done, may be annexed as
incident to it. T he bank of N ew York is not a corporation, yet its notes
have credit. Congress may agree with that bank, or with a company of m er
chants, to take their notes, and to cause all payments to pass through their
coffers. Every thing that the Government requires of, and will perform to
the bank, may be lawfully done without giving them corporate powers; but
to do it well, safely, and extensively, those powers are indispensable. This
seems to bring the debate w ithin a narrow compass.
T his led him to consider whether the corporate powers are incidental to
those which Congress may exercise by the constitution.
H e entered into a discussion of the construction of that clause, which em
powers Congress to regulate the territory and other property of the United
States. T he United States may hold property; may dispose of it; they may
hold it in partnership; they may regulate tne term s of the partnership. One
condition may be that the common stock only, shall be liable for the debts of
the partnership, and that any purchaser of a share shall become a partner.
T hese are the chief qualities of a corporation. It seems that Congress, having
the power to make all needful rules and regulations for the property of the
U nited States, may establish a corporation to manage it; w ithout which we
have seen that the regulation cannot be either safe or useful. T he United
States will be the proprietor of one-tenth of the bank stock.
Congress may exercise exclusive legislation, in all cases whatsover, over
the ten miles square, and the places ceded by the States for arsenals, light
houses, docks, &c.;_of course, it may establish a bank in those places, with
corporate powers. T he bill has not restrained the bank to this city, and if it
had, this dispute would lose a part of its solemity. If, instead of principles, it
concerns only places, what objection is there to the constitutional authority of
Congress to fix the bank at Sandy Hook or Reedy Island, where we have light
houses, and a right of exclusive legislation? A bank established there, or in
the district located by law on the Potomac for the seat of government, could
send its paper all over the Union. I t is true that the places are not the most
proper for a bank, but the authority to establish it in them, overthrows the
argument which is deduced from the definite nature of the powers vested in
Congress, and the dangerous tendency of the proposed construction of them.
T he preamble of the constitution w arrants this rem ark, that a bank is not
repugnant to the spirit and essential objects of that instrum ent.
H e then considered the power to borrow money. H e said it was natural
to understand that authority as it was actually exercised in Europe, which is
to borrow of the bank. H e observed, the power to borrow was o f narrow use
without the institution of a bank, and, in tne most dangerous crisis of affairs,
would be a dead letter.
A fter noticing the powers to lay and collect taxes, he adverted to the sweep
ing clause, as it is usually called, which empowers Congress to exercise all
ower necessary and proper to carry the enum erated powers into execution,
[e did not pretend that it gives any new power, but it established the doc
trine o f implied powers. H e then demanded whether the power to incorpo
rate a bank is not fairly relative, and a necessary incident to the entire power
to regulate trade ana revenue, and to provide for the public credit and
defence?
H e entered into a particular answ er to several objections, and after recapi
tulating his argument, he concluded with observing, that we nad felt the disad

BANK OF T H E UN ITED ST A T E S.

vantages of the confederation. W e adopted the constitution, expecting to
place the national affairs under a federal head. T his is a power which Congress
can only exercise. W e may reason away the whole constitution. A ll nations
have their times of adversity and danger. T he neglect of providing against
them in season, may be the cause of ruining the country.
F e b r u a r y 4.

M r. S e d g w i c k said he would endeavor not to fatigue the patience of the
House in the observations he should make on the important subject now under
consideration. W ithout entering into a discussion on a scale so extensive as
had been indulged by some gentlemen, he would dwell only on a few impor
tant principles, and such eonsequencees as were conclusively deducible from
them, which had made a strong impression on his mind.
T he opposition to the bill hacl called into question the constitutional powers
of Congress to establish the proposed corporation, and the utility of banks,
neither of which, till within a few days, did he suppose was doubted by any
intelligent person in America; and had charged the present system with hojding out unequal term s against the Government, to. those who should subscribe
to the proposed stock.
W ith regard to the question of constitutionality, much had been said, which,
in his opinion, had not an intimate relation to the subject now before the House.
W e have witn great earnestness been warned of the danger of grasping power
by construction and implication—and this warning has been given in very
animated language by the gentleman from Virginia (M r. M .) I do not wish to
deprive that member of the honor of consistency: but I well remember the
time when the energy of his reasoning impressed on the minds of a majority
of this House, a conviction that the power of removal from offices holden at
will, was, by construction and implication, vested by the constitution in the
President—so there could be no pretence, that it was expressly granted tohim.
H e said he would observe, in answer to every thing that had been said o f
the danger of extending construction and implication, that the whole busi
ness of legislation was a practical construction of the powers of the Legisla
ture, and that probably no instrument for the delegation of power could be
drawn up with such precision and accuracy, as to leave nothing to necessary
implication. T hat all the different Legislatures in the United States h».d, and
this, in his opinion, indispensably must, construe the powers which had been
granted to them; and they must assume such auxiliary powers as are necessarily
implied in those which are expressly granted. Ill doing which it was no doubt
th e ird u ty to be careful not to exceed those limits within which it was intend
ed they should be restricted. By any other limitation, said he, the Govern
m ent would be so shackled that it would be incapable of operating any of the
effects which were intended by its institution.
He observed that, on almost all the great and important measures which
come under the deliberation of Congress, there were immense difficulties to
be surmounted. I f we attem pt, said he, to proceed in one direction, our ears
are assailed with the exclamation of the constitution is in danger; if we a t
tempt to attain our objects, by pursuing a different course, we are told the
pass is guarded by the stem spirit o f democracy. Did I concur with gen
tlemen in opinion on this subject, I should think it my duty to go home to my
constituents, and honestly declare to them, that, by their jealousy of power,
they had so restrained the operations of the Government, that we have not
the mean 3 of effecting any of the great purposes for which the constitution was
designed, without attempting what, perhaps, would be found impracticable to
fix the general rules, the nice point within which Congress would be autho
rized to assume powers by construction and implication, and beyond which
they may be justly considered usurpers.
He wished gentlemen to reflect, what effect a single principle, universally
acknowledged, wruld have, in determining the question now under consider
ation. I t is universally agreed, that wherever a power is delegated fo r ex
press purposes, all the known and usval means fo r the attainment o f the ob-

C H A R TE R OF 1791.

jecta expressed, are conceded also. That, to decide what influence this ac
knowledged principle would have on the subject before the House, it would
be necessary to reflect on the puwers with which Congress are expressly in
vested. He then repeated, that Congress was authorized to lay and collect
taxes, to borrow money on the credit of the United States, to raise and sup
port armies, provide and maintain navies, to regulate foreign and domestic
trade, to make all laws necessary anil proper to carry these, and the other
enumerated powers, into effect; they were, in tine, entrusted with the exercise
o f all those powers, which the People of America thought necessary to secure
their fame and happiness against the attacks of internal violence and external
invasion. A nd, in the exercise of these powers, the Legislature was authoriz
ed, agreeably to the principles which he had mentioned, to exercise all the
know n and usual m eans, necessary and proper, to effectuate the ends which
are expressed. It might be of use to determ ine, with precision, w hat will
be the meaning of the words necessary and proper. T hey do not restrict the
power of the Legislature to enacting such laws only as are indispensable.
Such a construction would be infinitely too narrow and lim ited; and to apply
the meaning strictly, it would prove, perhaps, that all the laws which had
been passed, were unconstitutional; for few', if any, of them, could be proved
indispensable to the existence of the Government. T he conduct of Congress
had a construction 011 those words more rational and consistent with common
sense, and the purposes for which the Government was instituted; which he
conceived to be, that the laws should be established on such principles, and
such an agency in the known and usual means employed in tne execution of
them, as to effect the ends expressed in the constitution, with the greatest pos-j
sible degree of utility. If banks were among the known and usual means to
effectuate or facilitate the ends which had been mentioned, to enable the Go
vernm ent, with the greatest ease and least burden to the People, to collect
taxes, to borrow money, regulate commerce, raise and support armies, pro
vide and maintain fleets; he thought the argument irrefragable and conclusive,
to prove the constitutionality of the bill. Pursuing, further, the same idea,
lie asked, for what purpose were banks instituted and patronised by govern
ments which were unrestricted by constitutional limits? W ere they not
employed as the means, and the most useful engines, to facilitate the collec
tion of taxes, borrowing of money, and the other enumerated powers? B e
sides, he said, it was to be observed, that the constitution had expressly d e
clared the ends o f legislation; but, in almost every instance, had left the
means to the honest and sober discretion of the Legislature. From the n a tu re "
o f things, this must ever be the case; for, otherwise, the constitution must
•contain, not only all the necessary laws under the existing circumstances of
the community, but also a code so extensive, as to adapt itself to all future
possible contingencies. By our constitution, Congress has power to lay and
collect taxes; but every thing subordinate to that end, such as the objects, the
means, the instrum ents, and the purposes, are left to the honest and sober
discretion o f the Legislature. The power o f borrowing money was expressly
granted; b u t all the known and usual means to that end, were left in silence.
T h e same observations might, in truth, be made, respecting the other dele
gated powers. The great ends to be obtained, as means to effectuate the u lti
m ate end—the public good and general welfare—are capable, under general
term s of constitutional specification; but the subordinate means are so n u
merous, and capable of such infinite variation, as to render an enumeration
impracticable, and must, therefore, be left to construction and necessary im
plication. H e said, on this ground he was willing to leave the general argu
m ent— it was sim ple, intelligible, and he hoped would be thought conclusive.
H e said, the constitutionality had been attacked from another quarter. I t
was said, we could not give commercial advantages to one port above another.
T h e constitutional provision which had been quoted, was undoubtedly in ten d
ed to prevent a partial regulation of commerce; if extended to the case under
consideration, it would much more strongly prove, that Congress ought not to
reside in any commercial city; for he verily believed, that the commercial

BANK OF T H E UNITED ST A T E S.

advantages of Philadelphia were incom parably greater, from the residence,
than they could be supposed from the institution of a national bank. Indeed,
it was his opinion, that, considering that this city had a bank, the capital of
which was adequate to all her commercial exigencies, that she could enlarge
that capital as her necessity should require, and that her bank will, if this but
shall be rejected, receive the benefit of national operation, that the measure
will not advance her individual interest.
W ith regard to the utility of banks, he observed, that he would not attem pt
to display a knowledge of the subject, by repeating all he had read and heard
in relation to it, nor fatigue the House by a detail of his own reflections and
reasoning upon it; the causcs were unnecessary to be explained; the effects
had been such in all countries where banks had been instituted, as to produce
an universal opinion, that they were alike useful to all the great purposes of
government, and to promote the general happiness of the people. N or was
our own experience wanting to the same purpose. At a time wlien our public
resources were almost annihilated, our credit prostrate, our Government im
becile, and its patronage inconsiderable, a bank, of small capital, was among
the most operative causes which produced that first dawn that ultimately te r
minated in meridian splendor, by the establishment of peace, independence,
and freedom. T here were two circumstances which he would take th e liberty
to mention, which would render the banks of more importance in this coun
try than in any where they are at present in use. T he first, the com
mercial enterprise of our merchants, compared with the smallness of their
capitals, whicn, as we had no large manufacturing capitals, whereby the p re
cious metals would be retained in circulation, would frequently, by their ex
portation, greatly distress the people; the other, originated from a measure of
the Government. Congress, from a laudable intention of accommodating
their constituents, instituted treasuries in all the States: in some of these
there would beTin the ordinary course of events, a deficiency, and in others,
a redundancy. To keep them in equilibrio, by the transportation of the pre
cious metals, or by the purchase of bills in the m arket, would not be only in
convenient and expensive, but would keep out of circulation a considerable
part of the medium of the country.
Gentlemen, he said, had been pleased to consider the proposed terms as
giving an undue advantage to the stockholders. He would leave this part o f
the subject to gentlemen who better understood it, only observing that, as
Government must rely principally on merchants to obtain the proposed stock,
it would be necessary to afford to them sufficient motives to withdraw from
their commercial pursuits a part of their capitals.
He said he would attempt to answer some of those desultory objections
which had been made; and, in doing this, he would omit to answer such as had
been, in his opinion, already refuted. He observed that it had been said
that granting charters of incorporation was a high prerogative of Government.
He supposed it was not intended that it was, in the nature of things, too
transcendent a power to be exercised by a national government; but that the
exercise of it should only be in consequence of express delegation. L et this
objection be compared with the conduct of Congress on another subject, in all
respects, at least, as important. There is not, by the constitution, any poTver
expressly delegated to mortgage our revenues; and y et, without any question
being made on the constitutionality of the measure, we liave mortgaged them
to an immense amount. Prom whence, he asked, do we acquire the autho
rity to exercise this power? Not from express grants, but being empowered
to borrow money on the credit of the United States. W e have very properly
considered the pledged funds as among the know n and usual means necessary
and proper to be employed for the attainm ent of the end expressly delegatecf.
ft had been said that the bill authorized the stockholders to purchase real
estate. He considered the provision in the bill, in that regard, not a grant,
but a limitation of power. Any m an, or body of men, might, by the existing
laws, purchase, in their private capacities, real estate to any am ount. T h is
right was limited as respects the proposed corporation.

C H A R TE R OF 1791.

I t is said there are banks already, and, therefore, the proposed incorpora
tion is unnecessary. T o this he answered, that, if the Government should
agree to receive all its demands in the paper of the existing banks, it would
give to them every advantage which, in the opinion of gentlemen, renders the
present system objectionable, without stipulating for any equivalent to the
Government. B ut are, he asked, gentlemen serious in these observations?
Bo they believe the capitals of the present banks adequate to the exigencies
of the nation? Do they believe that those banks possess any powers by which
they can give a projectile force to their paper, so as to extend its circulation
throughout the United States? Or, do they really wish to have the Govern
m ent repose itself on institutions with which they have no intim ate connex
ion, and over which they have no control?
M r. Sedgwick concluded by observing, he was very confident a majority
in that House could never be induced to believe that it was the intention of
the constitution to deprive the Legislature of one of the most important and
necessary means of executing the powers expressly delegated.
M r. L a w r e n c e said, the advocates of this measure stand in an unfor
tunate situation; for, being those who, in general, advocate national measures,
they are charged with designs to extend the powers of the Government u n
duly. H e, however, consoled himself with a conscious attachm ent to the
constitution, and with the reflection that their conduct received the approba
tion of their constituents. If the present is contrasted with the former cir
cumstances of this country, he said he doubted not the measures of this G o
vernm ent would continue to receive the approbation of the People of the U n it
ed StatesT he silence of the People on the subject now before the H ouse, is strongly
presumptive that the measure o f a bank is not considered by them as uncon
stitutional. H e then endeavored to show the constitutionality of the bank
system. It m ust be conceded that there is nothing in the constitution ex
pressly against it, and, therefore, we ought not to deduce a prohibition by con
struction. H e adverted to the amendment proposed by Congress to the con
stitution, which says, “ powers not delegated are retained.” H ere, he said,
to prove that the bank is constitutional, the constructive interpretation, so
much objected against, is recurred to.
T he great objects ot this Government are contained in the context of the
constitution. He recapitulated those objects, and inferred that every power
necessary to secure these, m ust necessarily follow: for, as to the great objects
for which this Government was instituted, it is as full and complete, in all its
parts, as any system that could be devised. A full, uncontrollable power to
regulate the fiscal concerns of this Union, is a primary consideration in this
Governm ent; and, from hence, it clearly follows, that it must possess the
power to make every possible arrangem ent conducive to that great object.
H e then adverted to the late confederation, and pointed out its defects and
incompetency; and hence, the old Congress called on the States to enact cer
tain laws, which they had not power to enact. From hence he in ferred ,th at,
as the late confederation could not pass those laws, and to capacitate the
Government o f the U nited States, ana form a more perfect union, the constition under which we now' act was formed. T o suppose that this Government
does not possess the powers for which the constitution was adopted, involves
the grossest absurdity.
T he deviations from charters, and the infringement of parchm ent rights,
which had been justified on the principle of necessity, by the gentleman from
Virginia, ( M r . M a d is o n ) he said, had been on different principles from those
now mentioned; the necessity, he contended, did not, at the tim e, exist; and
the old Congress exercised the power, as they thought, by a fair construction
of the confederation.
On constructions, he observed, it was to be lamented that they should ever
be necessary; but they had been made; he instanced the power of remova

BANK OF T H E U N ITED 8 TA T ES.

bility, which had been an act of the three branches, and has not been com
plained of. I t was, at least, as important a one as the present.
B ut the construction now proposed, he contended, was an easy and natural
construction. Recurring to tne collection law, he observed, that it was by con
struction that the receipts are ordered to be made in gold and silver.
W ith respect to creating a mass of capital, he supposed ju st and upright
national measures would create a will to form this capital.
Adverting to the idea that Congress has not the power to establish compa
nies with exclusive privileges, he observed that, by the amendments proposed
by N ew Hampshire, M sssachusetts, and New York, it plainly appears that
these States considered that Congress does possess the power to establish
such companies.
T he constitution vests Congress with power to dispose of certain property
in lands, and to make all useful rules and regulations for that purpose. Can
its power be less over one species of its own property than over another?
W ith respect to giving preference to one State over another, he observed that,
ten years hence, tne seat of Government is to be on the Potomac, and, whereever the Government is finally settled, the place will enjoy superioradvantages;
but still the Government must go there, and the places not enjoying those ad
vantages must be satisfied.
I t is said we must not pass a problematical bill, which is liable to a super
vision by the judges of the supreme court} but, he conceived there was no
force in this, as those judges are invested, by the constitution, with a power to
pass their judgm ent on all laws that may be passed.
I t is said that this law may interfere with the State Governments; but this
may or may not be the case; and in all interferences of the kind, the particu
lar interest of a State must give way to the general interest.
W ith respect to the corporation possessing the power of passing laws, this,
"ue observed, is a power incidental to all corporations, and, in the instance of
the W estern territory, Congress have exercised the powers of instituting cor
porations, or bodies politic, to the greatest possible extent.
He defended the right of Congress to purchase and possess property, and
quoted a passage in the constitution to show that they possess this right.
He then touched upon the expediency of banks, and of that proposed, in
particular. The advantages generally derived from these institutions, he be
lieved, applied peculiarly to this country. He noticed the objections, from
banks banishing the specie; he said, the surplus only would be sent out of the
country. But, is itgiven away? No, Sir, it is sent off for articles which arc
wanted, and which will enrich the country.
W ith respect to a run on the bank, he mentioned the circumstances under
which those runs on the British banks, which had been noticed, took place,
and showed there was no parallel that would ever take place in this country.
From several particulars, he showed that the objection which arose, from
the United States not having made a good bargain by the system, was not
well founded. H e then mentioned the peculiar advantages which the U nit
ed States will enjoy over common subscribers.
T he objections from banks being already established in the several States,
he obviated, by stating the mischiefs which might arise from an ignorance of
the situation of those banks; and concluded by some remarks on the inexpe
diency of the General Government’s having recourse to institutions of mere
ly a local nature.
M r. J a c k s o n said that, having been the person who brought forward the
constitutional objections against the bill, he thought himself bound to notice
uie answers which had been offered to that objection. Newspaper authorities,
lie said, have been alluded to, and their silence on the subject considered as
indicating the approbation of the People. H e would meet the gentlemen on
that ground, and, though he did not consider newspapers as an authority to
be depended on, yet, it opinions, thro’ that channel, were to be regarded, he

CH A R T E R OF 1791.

would refer gentlemen to those of this city. T he expediency'and constitution
ality of the bill has been called in question by the newspapers of this city.
T h e latitude contended for in construing the constitution on this occasion,
he reprobated very fully. I f the sweeping clause, as it is called, extends to
vesting Congress with such powers, and necessary and proper means are an
indispensable implication, in the sense advanced by the advocates of the bill,
we shall soon be in possession of all possible powers, and the charter under
which we sit will be nbthing but a name.
T his bill will essentially interfere with the rights of the separate States,
for it is not denied that they possess the power ot instituting banks; b u t the
proposed corporation will eclipse the Bank of N orth America, and contravene
the interests of individuals concerned in it.
He then noticed the several arguments draw n from the doctrine of impli
cation; the right to incorporate a national bank has been deduced from the
power to raise armies; but he presumed it would not be contended th a t this
is a bill to provide for the national defence. N or could such a power, in his opi
nion, be derived from the right to borrow money. It has been asked what
the U nited States could do with the surplus of their revenue, without the
convenience of a bank, in which to deposite it with advantage? For his part,
though he wished to anticipate pleasing occurrences, he did not look forward
to the time when the General Government would have this superabundance
at its disposal.
T he right of Congress to purchase and hold lands has been urged, to prove
that they can transfer this power; but the G eneral Government is expressly
restricted in the exercise of this power; the consent of the particular State to
the purchase, for particular purposes only, is required; these purposes are d e
signated, such as building light houses, erecting arsenals, &c.
_ -— ,
I t has been said that banks may exist without a charter, but that this in
corporation is necessary', in order that it may have a hold on the Government.
M r. Jackson strongly reprobated this idea; he was, he said, astonished to
hear such a declaration, and hoped that such ideas would prevent a majority
of the House from passing a bill that would thus establish a perpetual mono
poly. W e have, saidf he, I believe, a perpetual d eb t; I hope we shallnot make
a perpetual corporation. W hat was it drove our forefathers to this country?
Wras it not the ecclesiastical corporations, and perpetual monopolies of E ng
land and Scotland? Shall we suffer the same evils to exist in this country, in
stead of taking every possible method to encourage the increase of emigrants
to settle among us? For, if we establish the precedent now before us, there
is no saying where it shall stop.
T h e power to regulate trade is said to involve this, as a necessary means;
but the powers consequent on this express power, are specified: such as reulating light houses, ships, harbors, &c. It has been said, that Congress has
orrowed money; this shews that there is no necessity of instituting any new
bank, those already established having been found sufficient for the purpose.
He denied the right of Congress to establish banks at the permanent seat ot
Government, or on those sand heaps mentioned yesterday: for, if they should,
they could not force the circulation of their paper one inch beyond the limits
of those places. B ut, it is said, if Congress can establish banks in those si
tuations, the question becomes a question of place, and not of principle; from
hence, it is inferred that the power may be exercised in any other p art of the
U nited States; this appeared to him to form a very dangerous construction of
the powers vested in the General Government.
A dverting to the powers in Congress, in respect to the finances of the Union,
he observeu that those powers did not w arrant the adoption of whatever mea
sures they thought proper; the constitution has restricted the exercise o f those
fiscal powers; Congress cannot lay a poll-tax, nor impose duties on exports,
and y et these undoubtedly relate to the finances.
T n e powers exercised in respect to the W estern territory, he observed,
had reference to property already belonging to the United States; it does not
refer to property to be purchased, nor does it authorize the purchase of any

BANK OF T H E UN ITED ST A T E S.

additional property; besides, the powers are express and definite, and the
exercise of them, in making needful rules and regulations in the government
of that territory, does not interfere with the rights of the respective States.
M r. Jackson then denied the necessity of the proposed institution, and,
noticing the observation of Mr. Ames, that it was dangerous, on m atters ot
importance, not to give an opinion, observed, that he could conceive of no
danger that would result from postponing that construction of the constitution
now contended for, to some future Congress, who, when the necessity ot a
bank institution shall be apparent, will be as competent to the decision as
the present House. Alluding to the freauent representations of the flourish
ing situation of the country, he inferred that this shows th at the necessity
of the proposed institution does not exist at the present tim e; why should
we then be anticipating for future generations? State banks he considered
preferable to a national bank, as counterfeits can be detected in the States;
but, if you establish a national bank, the checks will be found only in the city
of Philadelphia or Conogocheague. He then passed an eulogium on the Bank
of Pennsylvania; the stockholders, said he, are not speculators; they have the
solid coin deposited in their vaults.
He adverted to the preamble and context of the constitution, and asserted
that this context is to be interpreted by the general powers contained in the
instrument. Noticing the advantages it had been said would accrue to the
United States from the bank, he aA ed, is the U nited States going to com
mence stockjobbers? The “ general welfare” are the two words which are
to involve and justify the assumption of every power. B ut what is this gene
ral welfare? I t is the welfare of Philadelphia, N ew York, and Boston: for, as
1 to the States of Georgia and N ew Hampshire, they may as well be out of the
Union, as to any advantages they will receive from the institution. H e re
probated the idea of the United States deriving any emolument from the bank,
and, more especially, he reprobated the influence which it was designed ithe
Government should enjoy by it. He said, the banks of Venice and Amsterdam
were founded upon different principles. In the famous bank of Venice, the
Government holds no shares, and yet has at command 5,000,000 ducats; but
the United States were to be immediately concerned in theirs, and to become
stockjobbers. The Bank of Amsterdam was under the entire direction of
the burgomasters, who had alone the power of making by-laws for its regu
lation; this power, by the bill, was given up by Government, very improper
ly he thought, and was to be exercised by tne stockholders. T he French
bank, he added, was first established on proper principles, and flourished; but
afterwards became a royal bank; much paper was introduced, which destroythe establishment, and was near oversetting the Government.
The facility of borrowing, he deprecated; it will, said he, involve the Union
in irretrievable debts; the facility of borrowing is but another name for antici
pation, which^will, in its effects, deprive the Government of the power to con
trol its revenues—they will be mortgaged to the creditors of the Government.
L et us beware of following the example of Great Britain in this respect. He
said, undue advantages had been taken in precipitating the measure, and the
reasonable proposition respecting the State debts is not admitted; this, I con
sider, as partial and unjust. A gentleman from Virginia has well observed,
that we appear to be divided by a geographical line—not a gentleman, scarcely,
to the eastward of a certain line, is opposed to the bank, and where is the gen
tleman to the southward, that is for itr This ideal line will have a tendency
to establish a real difference. He added a few more observations, and conclud
ed by urging a postponement, if any regard was to be had to the tra n
quillity of the Union.
M r. B oudinot said he meant to confine himself to two or three great points,
on which the whole argument appeared to him to rest. H e considered the
objections to the bill as pointed against its constitutionality and expediency.
I t was essential, he observed, that every member should be satisfied, as far
as possible, of the first: for, however expedient it might be, if it was clearly

C H A R TE R OF 1731.

unconstitutional, the bill should never receive the sanction of the R epresenta
tives of the People. He would, in a great measure, refer for its expediency,
if constitutional, to the experience of every gentleman of the House, as the
most satisfactory proof on that head, and he conceived there was no need of
much argument in support of its decision. T he first question, then, was, is
Congress vested with a power to grant the privileges contained in the bill?
T his is denied, and ou^ht to be proved. In order to show in what manner
this subject had struck his mind, he first laid down these principles:
W hatever power is exercised by Congress must be draw n from the consti
tution; either from the express words or apparent meaning, or from a neces
sary implication, arising from the obvious intent of the framers.
T h at whatever powers, (vested heretofore in any individual State) not
granted by this instrum ent, are still in the people of such State, and cannot
oe exercised by Congress; that whatever implication destroys the principle of
the_constitution, ought to be rejected; that, in construing an instrum ent, the
different parts ought to be so expounded as to give meaning to every part
which will adm it of it.
Having stated these preliminaries, M r. Boudinot proceeded to inquire what
were the powers attem pted to be exercised by this bill: for, until the powers
were known, the question of constitutionality could not be determined.
By it, Congress was about to exercise the power of incorporating certain
individuals, thereby establishing a banking company “ fo r successfully con
ducting the finances of the country. ”
T he next inquiry is, W h a t rights will this company enjoy in this new cha
racter, that they do not enjoy independent o f it? Every individual citizen
had an undoubted right to purchase and hold property, both real and personal,
to any amount whatever; to dispose of this property to whom, and on what
term s, he pleased; to lend his money, on legal interest, to any person willing
to take the same; and, indeed, to exercise the power over his property, that
was contained in the bill. Individual citizens, then, having these powers,
might also associate together in company of co-partnership, and, jointly, exer
cising the same rights, might hold lands in joint-tenancy, or as tenants in
common, to any amount whatever; might put any gum of money into joint
stock; might issue their notes to any am ount; might make by laws, or arti
cles ot co partnership for their own government; and, finally, might set up a
bank to any amount, however great, and no authority in the Government could
legally interfere with the exercise of these rights. T he great difference be
tween this private association o f citizens, in their individual capacities, and
the company to be created in this bill, and which is held up in so dangerous a
light, is, that the one exposes the company to the necessity of using each in d i
vidual’s name in all their transactions; suits m ust be brought in all their
nam es; deeds must be taken and given in like m anner; each one, in his private
estate, is liable for the default of the rest; the death of a member dissolved the
partnership, as to him; and, for want of a political existence, the union may
be dissolved by any part of its members, and, of course, many obvious incon
veniences m ust be suffered, merely of an official kind. By the bill, these
difficulties are to be removed, by conveying three qualities to them:
•r ■r\ t ' Individua|ity, or constituting a number of citizens into one legal a r
tificial body, capable, by a fictitious name, of exercising the rights of an
individual.
Second. Irresponsibility in their individual capacity, not being answerable
beyond their joint capital.
T hird. Durability, or a political existence for a certain tim e, not to be
effected by the natural death of its members.
T hese are the whole of the powers exercised and the rights conveyed. I t
is true these are convenient and advantageous to the company, but ot trifling
importance when considered as a right or power exercised by a national legis
lature, for the benefit of the government- Can it be of any importance to the
State, whether the number ot its citizens are considered, in legal contem pla
tion, as united in an individual capacity, or separately, as so many individuals,

BANK O F T H E UN ITED ST A T E S.

especially if the public weal is thereby promoted? By their irresponsibility
being known, every person dealing with them gives his tacit consent to the
principle, and it becomes part of the contract; and, by political duration, their
powers and abilities are limited, and their rights restricted, so as to prevent
any danger that might arise from the exercise of their joint natural right, not
only as to the amount of their capital, but as to the by-laws they may make
for their government.
A private bank could make contracts with the Government, and the Govern
ment with them, to all intents and purposes as great and important as a public
bank, would their capital admit of it; though they would not possess such
qualities as to justify the confidence of Government,by depending on them in
a time of danger and necessity. This might put it in the power o f any indi
vidual to injure the community in its essential interests, by withdrawing the
capital when most needed. 'Io prevent this, and many other inconveniences,
it is necessary that a bank, for the purposes of Government, should be a legally
artificial body, possessing the three qualities above mentioned.
M r. Boudinot then took up the constitution, to see if this simple powerwas not fairly to be draw n, by necessary implication, from those vested by
this instrum ent in the legislative authority of the United States. It sets out, said
he, in the preamble, by declaring the general purposes for which it was formed:
“ The ensurance o f domestic tranquillity, provision fo r the common de
fence, and prom otion o f the general welfare.” These are the prominent fea
tures of this instrument, and are confirmed and enlarged by the specific grants
in the body of it, where the principles on which the'Legislature should rest
their after proceedings are more fully laid down, and the division of power
to be exercised by the general and particular governments distinctly marked
out. By the eighth section. Congress has power “ to levy taxes, p ay debts,
provide fo r the common defence and general welfare, declarc war, raise and
support armies, provide fo r and m aintain a n a v y and, as a means to accom
plish these important ends, “ to borroiv money;’’'’ and, finally, “ to make all
laws necessary and proper for the carrying into execution the foregoing
powers.” L et us therynquire, is the constituting a public bank necessary to
these important and essential ends of government: I f so, the right to exercise
the power must be in the supreme Legislature.
He argued, the power was not contained in express words, but it was neces
sarily deduced, by the strongest and most decisive implication, because, he
contended, it was a necessary means to attain a necessary end. Necessary
implication had led Congress, under the power to lay and collect imposts and
taxes, to establish officers for the collection, to inflict penalties against those
who should defraud the revenue, to oblige vessels to enter one port and deli
ver at another, subjected them to various ceremonies in their proceedings, for
which the owners were made to pay; and he conceived it was not so great an
exertion of power, by implication, to incorporate a company for the purpose of
a bank. He also deduced the right from the power of paying debts, raising
armies, providing for the general welfare and common defence, for which they
were to borrow money. All these necessarily include the right of using every
proper and necessary means to accomplish these necessary ends. I t was cer
tain, he said, that money m ust be raised from the People. This could not be
done in sums sufficient for the exigencies of Government in a country where
the precious metals were so scarce as in this. T he people, in general, are poor,
when compared with European nations; they have a wilderness to subdue and
cultivate; taxes m ust be laid with prudence, and collected with discretion.
The anticipation of the revenues, therefore, by_ borrowing money, becomes
absolutely necessary. If so, then, as the constitution had not specified the
manner of borrowing, or from whom the loan was to be obtained, the Supreme
Legislature of the Union were at liberty, it was their duty, to fix upon the
best mode of effecting the purposes of their appointment. For it was a sound
principle, that, when a general power is granted, and the means are not speci
fied, they are left to the discretion of those in whom the trust is reposed, pro
vided they do not adopt means expressly forbidden. T he public defence or

CH A R TE R OF 1791.

general welfare, rested on the annual supplies from uncertain revenues, would
expose the very existence of the community. I t is the duty, then, of those to
whom the people have committed this power, to prepare, in time of peace, for
the necessary defence in a tim e of war. T he United States are now, happily,
in a state of peace; but it was impossible for anyone to say how long it would
continue. By prudent management, it might long be preserved; but this p ru
dence consisted in being always in a state ot preparation to defend our
country.
T he constitution contemplates this very duty, by authorizing Congress to
provide for the common defence, by borrowing money. W hy borrow money?
A re not the annual revenues sufficient? I t might be so. if nothing was atten d
ed to but internal wants; but the common defence and general welfare loudly
call for that provision which will produce a constant guard on external ene
mies and internal insurrections. Fo this nccessary end, it becomes Congress
to provide that the necessary means may be always at hand, by being able to
arm their citizens, and provide for their support while engaged in the defence
of their common country. T his can be done only by borrowing money, which
is usually of citizens or foreigners; if of the first, it must be from individuals
or from private banks. W ill it be prudent to trust to either? Loans from
individuals were attem pted during the war, when patriotism produced a will
in some lenders, and others were glad to get rid of a depreciating paper cu r
rency, almost on any term s whatever.
B ut, even these loans, arising from this paper medium, with which the m ar
ket was glutted, were altogether insufficient; and, by one change of circum
stances, every hope was precluded of being any ways successful in procuring
money from that source. T he circumstances of individuals, too, in this coun
try , are such, when compared with the wants of a nation, as rentier the source
too vague and uncertain to rely upon, and it would be a most improvident
execution of the powers granted for the express purpose of the common d e
fence and general welfare. Private banks were almost as inadequate to the
object, and, for reasons already given, were neither to be depended on, for
will or capital, as to the supply for the principal w ants of Government.
T hey are generally established for commercial purposes, and on capitals not
always sufficient for them. I f they should be prevailed upon, at any time, to
attem pt to supply the dem ands of a nation at war, it m ust be from a general
combination of their whole stocks, to the destruction of the original designs
of their several institutions. This ought not to be expected: for, as far as it
goes to the depression of the mercantile interest, so far it is injurious to the
Governm ent; besides, a dependence upon such a combination would be impo
litic, both from its slowness and uncertainty. T he votes of a few individuals,
afi'ected by local, selfish, or adverse politics, might endanger the whole people.
Such a dependence ought not to be attributed to the wise framers of the con
stitution, neither does the language w arrant it. B ut, foreign loans have been
mentioned as a proper source tor this purpose. T h e imprudence of placing
the common defence of a nation on the will of those who have no interest in
its welfare, is a good answer to this observation. W ould it be prudent to
tru st a foreigner, perhaps a rival, if not an enemy, w ith your supply of what
has emphatically been called the sinews of war? W ould it not expose us
to exorbitant dem ands, and often a refusal? M any adventitious circum stan
ces of a w ar, increasing dem ands from other quarters, scarcity of coin, and
difficulty of communication, as well as the intrigues of courts, all loudly op
pose the measure, as contrary to the spirit and meaning of a provision for tne
common defence and general welfare. T he only resort, then, he conceived,
was a tim ely provision to secure institutions at home, from which loans might
be obtained at all times, on moderate term s, and to such amount as the neces
sity of ti e State might require. B ut, gentlemen say that the constitution
does not expressly w arrant tne establishment of such a corporation. I f by ex
pressly, express words are meant, it is agreed that there are no express words;
and this is the case with most of the powers exercised by Congress: for, if the
doctrine of necessary implication is rejected, he did not see what the supreme

BANK OF T H E UN ITED ST A T E S.

Legislature of the Union could do in that character. I f this power is not
clearly given in the constitution, by necessary implication, there is a necessary
end proposed and directed, whde the common and usual necessaiy means to
attain that end are refused, or, at least, not granted.
M r. Boudinot was firmly of opinion that a National Bank was necessary;
the means, without which the end could not be obtained. Theory proved it
so in his opinion, and the experience of the Union, in a day of distress, had
fully confirmed the theory. The struggles of the friends of freedom, during
the late contest, had nearly been rendered abortive, for want of this aid. T hat
danger which was then so hardly avoided, became a solemn memento to this
House, to provide against a similar case of necessity. T his was the time to
do it with advantage, being in such profound peace. H e had not heard any
argument by which it was proved that either individuals, private banks, or
foreigners, could with safety and propriety be depended on as the efficient
and necessary means for so important a purpose. Al though money was at
present plenty in Europe, and might be borrowed on easy term s, it might not
be so to-morrow, in case a war should break out and our necessities become
pressing. He again enumerated the harmless qualities with which it was pro
posed to vest the bank corporation, by the bill on the table, for the im portant
purposes of the common defence and general welfare. Gentlemen had not
y et pointed out any danger arising to the community, neither did he think it
was possible that any could ever be mentioned, equal to those of suffering the
Government to depend upon individuals or private banks for loans, in a day
of distress.
B ut it was said that this bill gave the corporation a right to hold real pro
perty in a State, which Congress had 110 power to do. T ne term s of the bill
are misapprehended; this is a right which, it has been shown, attaches to the
citizens individually, or in their associated capacity; the bill therefore does
no more than to vest a number with an artificial single capacity, under a ficti
tious name, and by that name to hold lands, make by-laws, &c. &c. all
which they might have done before, as citizens, in a collective capacity. So
far from giving a new power, their original individual rights are limited for
the public safety, as to the amount ot their stock and tne duration of their
existence.
Mr. Boudinot then proceeded to cite numerous instances of powers exer
cised by Congress during the last two years, deduced under the constitution
by necessary implication, to show the u tter impossibility of carrying any one
provision of that authority into execution, for the benefit of the people, w ith
out this reasonable latitude of construction. He also adverted to some instan
ces of the like conduct, under the former confederation. I t had been urged,
that the new Congress had no rights or powers but what had been vested in,
and given to them by, the individual States, and therefore they could not a c
cept a cession from Great Britain, by the treaty of peace, of the lands ex
tending to the L ake of the W oods, because not before included in any indi
vidual State. Every member was soon convinced of the absurdity of this
argument, and by a necessary implication established the power of the con
federated Legislature. During the war. the commander-in-chief gave a
assport to a British officer, to transm it clothing to the British prisoners at
iancaster. H e accordingly conveyed a very large quantity of British goods
into Pennsylvania, for that purpose, which, being directly against an express
law of that State, they were seizetl and condemned by the proper magistrate.
On a complaint to the Legislature of the State, they referred the same to their
judicial officers, upon whose report, (that Congress being vested with the
power of declaring war, the right of giving safe passports to an enemy, was
necessarily implied, which therefore was duly exercised by their commanderin-chief, though no express power was given to him for that purpose,) the
Legislature declared their law, directing the condemnation of the goods, void,
ab-initio, and the judgm ent of condemnation had no effect.
This was also the rule that governed this House, with regard to the re
movability of officers by the President, and the authority given to a council

CH A RTER OF 1791.

to legislate for the W estern territory. In fine, he concluded that it was
uraversally understood, that, whenever a general power was given, especially
to a supreme Legislature, every necessary means to carry it into execution
w ere necessarily included. This was the common sense of m ankind, without
which it would require a m ultitude of volumes to contain the original powers
o f an increasing G overnm ent, that must necessarily be changing its relative
situation every year or two.
I f power was given to raise an arm y, the making provision for all the neces
sary supplies and incident charges were included. I f a navy was to be
formed, the manning and supplying the war-like stores are necessarily u nder
stood. I f a power is given to borrow money, a right to mortgage or pledge
the public property to secure the re-paym ent, is understood to be vested in
the borrower. T ake up the present statute book, and every page will afford
evidence of this doctrine. Examine the law, with regard to crimes and pun
ishments: under the power of establishing counts, we have implied the power of
punishing the stealing and falsifying the records, and ascertained the punish
m ent of perjury, bribery, and extortion. U nder the power of regulating trade,
we have accepted cessions of real estate, and built light houses, piers, &c.
A ll this is under the doctrine of necessary implication for the public good, and
in cases not so strong as the present; and on the exercise of which no gentle
man thought proper to start this objection.
This construction appears so natural and necessary, that the good sense of
every gentleman on the floor has hitherto led him to proceed on this principle,
ever since we began to legislate. W hat principle of the constitution does it
destroy?^ It gives nothing that can affect the right of any State or citizen.
Indeed, it has been said, that it is exercising a high act of power. H e thought
it had been shown to be rather of the inferior kind. B ut allow the position,
and who so proper, as the Legislature of the whole Union, to exercise such a
power, for the general welfare? It has also been said, that this power is a
m ere conveniency, tor the purpose of fiscal transactions, but not necessary to
attain the ends proposed in the constitution. T his is denied, and at best is a
m ere m atter of opinion, and must be left to the discretion of the Legislature to
determ ine.
M r. Boudinot said, he should now conclude w hat he had to say, had not
an honorable gentleman (M r. Jackson) brought forward the observations of
the author of the federalist, 2d volume, pages 72,73, and 74, to show a different
contemporaneous exposition of the constitution, and charge the author, who, he
alleged, was said to be also the author of the present plan before the House,
with a change of sentim ent. As this gentleman is not here to speak for him
self, he ought to have the next best chance, by having w hat he then wrote
candidly attended to, especially as gentlemen allow him to be good authority.
M r. Boudinot read only part of tne 73d page referred to by M r. Jackson, in these
words: H ad the convention attem pted a positive enumeration of the powers
“ necessary and proper for carrying their other powers into effect, the attem pt
“ would have involved a complete digest of laws on every subject to which
“ the constitution relates: accommodated, too, not only to the existing state of
“ things, but to all the possible changes which futurity may produce: for, in
“ every new application of general power, the particular powers which are the
“ means of attaining the general power, m ust always necessarily vary with
“ that object, and be often properly varied, whilst the object remains the
ik same.” How these sentiments can be said to be a different contemporaneous
exposition, m ust be left to the House to determ ine. M r. Boudinot then beg
ged the indulgence of the House to hear the same gentlem an, when arguing
expressly on that part of the constitution now under consideration; and then
read the pages 144,5, and 6 , of the first volume of the Federalist, which were too
long to be inserted. H e declared that, in his opinion, it was impracticable to
p ut together language in the same length, that could more forcibly and point
edly elucidate and prove the construction contended for, in support ot the
bill on the table. There remained yet but two objections, to which M r. Bou
dinot would detain the House any longer.

BANK OF T H E U N ITED ST A T E S .

T h e Gentleman from Georgia (M r. Jackson) had charged the measure with
establishing the commercial interest, to the great injury of the agricultural.
If this was true, he never would agree to it, for he considered the agricultural
interest, in America, as its great and sure dependence. M r. Boudinot con
fessed that, so far from seeing these measures in this point of light, he could
not bring his mind to comprehend how the commercial interests of a country
could be promoted without greatly advancing the interests of agriculture.
W ill the fanner have any temptation to labor, if the surplus of what he raises,
beyond his domestic consumption, is to perish in his barn, f.>r w ant of a m ar
ket? C a n a market be obtained without the merchants? If commerce flour
ishes, the merchants increase, and, of course, the demand for the produce or
the land; but, if the mercantile interests fail, there is none to export the sur
plus produced by agriculture. I f the farmer should undertake to export his
own produce, he could not give his whole attention to his affairs; or, if the
merchant should attem pt to raise the grain he wanted, he could not carry on
his merchandise; the one interest depends on the other; a separation destroys
both.
B ut the incapacity of the bank to extend its influence to the extremes of
the Union, has been argued, from the gentleman never haying seen a note o f
the present Bank of North America in Georgia: he therefore concludes that
bank lias never been of any service to her agricultural interests. Mr. Boudi
not said that he drew very different conclusions from this fact; he supposed
that, by means of the bank, the traders with Georgia had been enabled to send
her the precious metals, while the bank paper had answered their purposes
nearer home, where they circulated with undoubted credit. H e instanced a
case of a Philadelphia merchant, who was possessed of £ 1 0 0 in gold, and
£ 1 0 0 in credit, at the bank; the merchant wanted £ 1 0 0 worth of rice, of a
Georgia planter, and the like value of flour, of a Pennsylvania farmer. W hen
he purchased the one of the Georgian, he could safely pay him the whole in
gold, while he found the Pennsylvanian would as readily receive the bank
paper for his flour. B ut had there been no bank, he could have purchased but
£50 worth of each, and the Georgian and Pennsylvanian both have gone
without a market for the residue, in short, the whole Union might be liken
ed to the body and limbs; you cannot aid and comfort one, but the other must
be likewise benefitted.
H e said it was, however, difficult and impracticable to show, that every
measure adopted by the Government should have an effect perfectly equal,
over so extensive a territory as that of the United States; it was sufficient,
if, upon the whole, the measures of Government, taken altogether, produced
the desired equality.
T he last objection was, lhaf, by adopting this bill, we exposed the measure
to be considered and defeated by the judiciary of the United States, who might
adjudge it to be contrary to the constitution, and thereby void, and not lend
their .m 1 to carry it into execution. This, he alleged, gave him no uneasiness.
H e was so far from controverting this right in the judiciary, that it was his
boast and his confidence. It led him, he said, to greater decision on all sub
jects of a constitutional nature, wherrhe reflected that, if from inattention,
want of precision, or any other defect, he should do wrong, there w'as a
power in the Government which could constitutionally prevent the operation
of such wrong measure from affecting his constituents. H e was legislating for
a nation, anti for thousands unborn, and it was the glory of the constitution
that there was a remedy, even for the failures of the supreme legislature
itself.
Upon the whole, then, he said, that, on taking the power in question in any
point of view, and giving the constitution the fullest consideration, under the
advantages of having the objections placed in the strongest point of light by
the great abilities of the gentlemen in the opposition, he was clearly in favor
of the bill; as to its expediency, there could be little doubt on the m inds o f
any gentleman, and unless more conclusive arguments could be adduced to
show us unconstitutionality, he should, in the end, vote for the passing o f the

CH A RTER OF 1791.

63
F e b r u a r y 5.

M r. S m it h , of South Carolina, observed, that he considered it his duty to
offer the reasons which should influence him in giving his vote on this occa
sion. He had wished am endm ents to the bill, as some parts of it, he confess
ed, did not perfectly please him, but his wishes having been overruled, the
question now is, whether the bill shall pass ? Though he came from the
Southward of the Potomac, the principle of the bill met his approbation. It
would be a deplorable thing, said he, if this Government should enact a law
subversive of the constitution, or that so enlightened a body as the Senate of
the United States should, by so great a majority as were in favor of this bill,
pass a law so hostile to the liberties of this country, as the opposition to this
measure have suggested the bank system to be; and it would be very extraor
dinary if an officer of this Government, who has produced a performance
explanatory of the constitution, of such celebrity as to be resorted to as an
authority, should be so inconsistent with himself, as to propose a law entirely
subversive of the principles laid down in his able defence of the constitution.
H e then adverted to the objections draw n from that article of the constitu
tion, that no preference shall be given to one port over another; he showed
th at the clause was inferred fo ra particular purpose, and could not be. cited
as a rule not to be deviated from, as a preference was, and m ust be, necessa
rily, given to one port over another. He produced numerous instances in
point: in consequence of various clauses in the revenue laws, general regula
tions sometimes operate partially; and commercial arrangem ents, apparently
unequal, produce the good of the community a t large.
In reference to construing the constitution, he observed that the present
moment, when the powers of the Government were assailed from various
quarters, he conceived the most improper to contract those powers.
T he right to construe the constitution, he argued from the principles a d
vanced by M r. Madison, in the debate on the power of removability, and
read sundry observations from Lloyd’s Register, made by that gentleman,
corroborative of this sentim ent. Those arguments, he conceived, applied
very aptly to the present subject
M atters of a fiscal nature necessarily devolve on the General Government,
and he urged, that every power resulting from the acknowledged right of Con
gress to control the finances of this country, m ust be as necessarily implied,
as in the case of the power of removability.
H e then alluded to the expediency o f a national bank. T h e Secretary gave
notice, in his first report, that this plan was in contemplation. N othing was
ever read with greater avidity, and, though it is now more than a year since
this intimation was given, yet, no objections have been offered against it, either
by the States, or by individuals; even the State of N orth Carolina has not
mentioned it. [H ere M r. B l o o d w o r t h (if he was not misunderstood)
informed M r. Smith that the report had not been seen by the Legisla
ture of N orth Carolina.] M r. Smith said he was sorry for it; and then pro
ceeded to notice some partial quotations made by M r. Jackson, from Dr.
Smith’s W ealth of Nations, against bank systems. H e said he could have
wished the gentleman had been more copious in his quotations from that au
thor; if he had, he would have found that that author has fully dem onstrated
their utility.
H e noticed the division of opinions on the subject of a national bank, in the
city of Philadelphia; he supposed ideas of personal advantage induced these
opposing sentim ents; he, however, thought this subject should be taken up
altogether on general principles, and, even if its immediate influence should
not extend to the extremes of the Union, i f the establishment promises a gene
ral preponderating advantage, local considerations m ust be considered in a
secondary point of view. T he principal inquiry is, will the institution facili
tate the management of the finances? T his, he thought, had been made appa
rent. This is the opinion of the Secretary of the T reasury, afterd u ean d m a
tu re consideration of the subject. H e certainly enjoys the best means for

BANK OF T H E UN ITED ST A T E S.

forming an opinion; he is at the head of the fiscal department, and deservedly
enjoys the public confidence; very little has been offered to disprove his sen
tim ents on this part of the question, and the inexpediency of the measure
should be clearly proved before the plan is rejected: for an officer who deser
vedly enjoys the public confidence, is entitled to the support of the L egisla
ture, in those plans which are expedient and constitutional.
M r. Smith mentioned instances in which Congress exercised power by im
plication, and observed that this was necessary to the execution of the duties
which devolve on the Government by the constitution. T he power to esta
blish a national bank must reside in Congress, for no individual State can ex
ercise any such power; the right of no particular State, therefore, is infringed
by the institution. I t had repeatedly been said that Philadelphia would d e
rive peculiar advantages from the Bank of the United States; but, he observ
ed, if the present plan should fail, it is a question whether the stockholders
of the Bank of North America would not derive greater advantages from the
necessity, which, in that case, Government would be under, of resorting to
them for loans. The institution, as before observed, is founded on general
principles, and will, undoubtedly, in its operation, prove of general utility.
M r. S t o n e said, if. upon questions like the present, he had given pain to
members he regarded, they might be assured the pain was reciprocal. L e t
us cherish mutual toleration. W e might conceive that each pursued improper
systems from the purest motives. W e differ in our ideas of Government, and
our sense of the sacredness of the written compact. W e varied widely in our
opinions of the direction of this Government. The great lesson of experi
ment would show who was right; but we are influenced in our habits of think
ing by our local situations, and, perhaps, the distinct interests of the States
we represent. H e observed, that, upon the present occasion, the opinions
respecting the constitution seem to be divided by a geographical line, dividing
the continent. Hence, it might be inferred that other considerations mixed
with the question; and it had been insinuated that it was warped by the future
seat of Government. But other causes may be assigned for the diversity of
sentiment: the people to the Eastward began earliest in favor of liberty; they
pursued freedom into anarchy; starting at the precipice ot confusion, they are
now vibrating far the other way. He said that all our taxes are paid by the
consumers and manufacturers; those taxes are all bounties upon home manu
factures. The people to the Eastward are the manufacturers of this country;
it was no wonder that they should endeavor to strengthen the hands of a Go
vernment by which they are so peculiarly benefitted.
I t is a fact, that the greatest part of the continental debt has travelled east
ward of the Potomac. This law is to raise the value of the continental paper.
H ere, then, said he, is the strong impulse of immediate interest in favor of the
bank. He took notice of the distinction made by the plan of the bill, between
continental and State paper. T he State paper, on account of partial payments
of interest, stilt remained in the respective States. B ut this could not, by
the present system, be subscribed; so that the Southern States were deprived
of the advantage that might have been given to the only paper they have. B u t,
he said, if gentlemen charge us with defending the seat of Government, let
them remember that this betrays consciousness of an attack. I f they believe
that this scheme tends to break the faith of the Union, pledged to the P oto
mac, it is no wonder they suppose we oppose it upon that ground. H e would
not have mentioned this subject, had it not been hinted at. B ut let the whole
of it come forth; let gentlemen consult their own bosoms; le t the public d e
cide the truth of his observations. He hoped he should not be suspected of
any bias; that, so uniform had been his conduct upon all questions turning upon
principles similar to the present, that every member in the House, he believ
ed, had conjectured rightly of the-side he would take, before he had uttered
a word upon the subject. W hen implication first raised its head in this
House, he started from it, as a serpent which was to sting and poison the
constitution. H e felt in unison with his country. T he fears, the opinions,

C H A R TE R OF 1/01.

the jealousies of individuals and of States, had been explained by a eentlelnan from Virginia; [M r. Madison] he should only rem ark, th at all those
who opposed the Government dreaded this doctrine; those who advocated it
declared that it could not be resorted to, and all combined in opinion that it
ought not to be tolerated. N ever did any country more completely unite in
any sentiment, than America in this: “ T hat Congress ought not to exercise,
by implication, powers not granted by the constitution.” _ A nd it is not
.strange: for the admission of this doctrine destroys the principle of your Go
vernment at a blow; it at once breaks down every barrier which the federal
constitution had raised against unlimited legislation. H e said that necessity
was the most plausible pretext for breaking the spirit of the social compact;
but the people of this counti-y have anticipated that pretext; they have said to
the ministers of this country, “ we have given you w hat we think competent
powers, but, if experience proves them inadequate, we will enlarge them; but,
in the mean tim e, dare not usurp those which we have reserved. ’
I t is agreed, on all hands, that the power to incorporate the subscribers to
a bank is not expressly granted; and although gentlemen have agreed that
it is implied; that it is an incident; that it is a means for effectuating pow
e rs expressly granted, yet thev are not agreed as to the particular power
to which this is an incident. They adm it that the sweeping clause m the
constitution confers no additional power. B ut, if he understood the gen
tlem en, several of them were of opinion that all governments, instituted for
•certain ends, draw to them the means of execution as of common right. T he
d octrine would make ours but a short constitution. [H ere he read the pre
am ble] and then said, here is your constitution! H ere is your bill of rights!
Do these gentlemen require any thing more respecting the power of Congress,
than a description of the ends of Government? A nd if, of right, they can
carry these into effect, will they regard the means, though they be expressly
pointed out? But, I would ask, is there any power under heaven which
could not be exercised within the extensive limits of this preamble?
T he convention might have stopped here, and there was no need, accord
ing to the doctrine of the gentlemen, to point out any of the means for the
e n d s mentioned in the preamble. T h a t portion of the constitution wlvch, by
a ll America, has been thought so important, according to their logic, would
become a dead letter; but the preamble, in fair construction, is a solemn
com pact that the powers granted shall be made use of to the ends thereby
specified. He then reprobated in pointed term s the latitude of the principles
premised. H e said, that the end of all government is the public good, and
if the means were left to legislation, all w ritten compacts were nugatory. H e
observed, that the sober discretion of the Legislature, which in the opinions
, o f gentlemen ought to be perm anent, was the very thing intended to be curbed
an d restrained by our constitution.
He then declared that our form of government not only pointed out the
ends of governm ent, but specified the means o f execution. H e said, we may
make war— this would draw to it the power of raising an army and navy,
laying taxes, establishing a judiciary, &c. B ut the spirit o f the constitution,
in this respect, had been well explained by M r Madison, and lie should not
recapitulate.
He said, a gentleman from South Carolina, [M r. S m it h ] had rem arked,
th at all our law's proceeded upon the principle of expediency—that we were
jud g es of that expediency; as soon as we gave it as our opinion that a thing
was expedient, it became constitutional. W h a t, then, said he, remains of your
constitution, except its mode of organization? W e may look into it to refresh
our memories, respecting the times, places, and m anner, of composing the Go
vernm ent; that, as to the powers of Congress, were he of that gentlem an’s
opinion, lie would never look into it again. G entlem en see the difficulties
o f their theories, and are obliged to confess that these incidental powers are
not easily delined. T hey rest in the sober discretion of the Legislature.
One gentleman [M r. A m e s ] has said, no implication ought to be made
against the law of nature, against rights acquired, or against powers pre-occu9

BANK OF T H E L M T f.D ST A T E S:

pied by the States; that it is easier to restrain than to give competent powers
of execution. Now, these notions are hostile to the principle ot our Govern
ment, which is only a grant of particular portions ot power, implying a nega
tive to all others. It has been shown that the ends of government will in
clude every thing. I f gentlemen are allowed to range, in their sober discre
tion, for the means, it is plain they have no limits. By the cabalistical word,
incident, your constitution is turned upside down; and instead of being «
grant o f particular powers, guarded by an implied negative to all others, it
is made to im ply all powers. But, strange to tell, America forgot to guard
it, by express negative provisions. Is there any difference, in effect, between
lodging general powers in a government, and permitting the exercise of them
by subtle constructions? lie said there was a difference; in the one case the
the people fairly gave up their liberty and stood prepared; in the other, they
were unexpectedly tricked out of their constitution.
The preceding remarks, (he observed) showed how dangerous is the d o c
trine o f implication, and upon what small data ingenuity can raise the most
dangerous superstructure. He said he should now take a view of those pre
cedents in the former and present Congress, which are relied on to justify the
present measure.
1st. T he Bank of North America. Here he stated the distressful and criti
cal situation of America at that period; he remarked that it was at the declen
sion of the continental money. He showed that there were no powers in
the confederation, to which even (according to the reasoning of the other side)
this power could be incidental, but what required the vote ot nine States; that
the ordinance passed by a vote of seven States, which showed that necessity
alone gave birtn to that measure. H e showed the dissimilarity of the situaation of the former and this Congress, and the difference in their powers, and
consequently in the dangers to be apprehended from the encroachment of
either.
2 d. T he redemption of our prisoners at Algiers. This comes within the
power to regulate trade. If, said he, vve are not capable of redeeming, by
the best means in our power, our citizens, our trade may be entirely ruined,
and hence the law which shall be made for their redemption would be necessary
and proper. But, by the constitution, the Executive may make treaties, these
may be general, or for a particular object; and the Legislature may effectuate
them by grants of money.
3d. W e have bought certificates and not destroyed them. This they say
is implied from the power of paying the debts.
H e asked if. before the purchase, the certificates were debts due from the
United States? And demanded, if, by the purchase, they were divested of
that quality? Now (said he) in my judgm ent, when a debt is fa ir ly cancel
ed, it is as much like a payment as need be.
4th. W e had no rirfit, except by implication, to give a salary to the Vice
President. H e said he had voted against the salary, and had been for a per
diem allowance, because he thought the Vice President was viewed by the
constitution only as President of the Senate. But this example fails most
palpably, as Congress, in the compensations, arc not confined, by the constitu
tion. either to a particular sum or mode of payment.
5th. Congress have made corporations, anti exercise complete legislation
in the W estern territory. H e said, to answer this case nothing more was
necessary than to read the clause in the constitution which gave to Congress,
expressly, the power to make all rules and regulations for them . I t seemed
to him as if gentlemen were inverting the order of things, by making powers
where there were none, and attempting to prove express grants to be im pli
cations.
6 th. Our regulations respecting freighters and owners, and between cap
tains and seamen. H e had not those regulations correctly in his memory, but
he believed them proper and necessary regulations of commerce.
7th. I t has been said, we have exclusive jurisdiction in pfaces belonging
to Congress and within the ten miles square. W e could erect a bank in either

C H A R T E R OF 1791.

of these places; its influence would extend over the continent; the principle
on which we founded this power could not be confined to a particular time
or spot of land. G entlem en ridicule the idea that the exercise of a pervading
influence and a general principle should be limited by any particular number
of years, or be confined within a fort. H e said the power o f exclusive
legislation in those places was expressly granted, and, under its influence,
the Congress might exercise complete and exclusive legislation, within those
lim its; that the power was confined to places. But, if the general powers of
this constitution are to be governed by the same rules of construction, and
we have no regard to place, it follows that Congress can exercise exclusive
legislation over this continent. H e was astonsined at the doctrine. I t would
be equally reasonable to say (hat France, because, within her own dominions,
and over her own property, she exercised exclusive legislation, that hence she
had a right to legislate for the world.
8th . T h e power of removal of officers by the President alone. H e said it
was known he had opposed th at doctrine. H e left it to be defended by those
who had voted for it. B ut he hoped the gentleman from South Carolina,
[M r. S m it h ] and some other gentlemen w h o h ad opposed it, would review
the arguments they had used upon that occasion.
H e observed, after taking a view of those precedents, on the danger of lay
ing down improper principles in legislation. How eagerly men grasped at
the slightest pretexts for the exercise of power. H e shuddered to think what
a broad and commanding position this bank will form for farther encroach
ments.
A gentleman from M assachusetts, [M r. S e d g w ic k ] has said, th at, when
ever a power is granted, all the known and usual means of execution are
alw;ays im plied; the idea (he said) had been properly examined by [M r.
G i l e s , ] but he would ask if incorporating the subscribers to a bank was the
known and usual means of borrowing money, especially when the subscribed
were not obliged to loan, or of collecting taxes when no taxes were levied on
the bank?
B ut gentlem en tell us, if we tie up the constitution too tight, it will break;
if we hamper it, we cannot stir; if we do not adm it the doctrine, we cannot
legislate at all. And with a kind of triumph, they say, that implication is
recognised by the constitution itselfj in the clause wherein we have power to
make all laws to carry, &c. He said he was ready to m eet the gentlem en
upon this ground. T his clause, he said, was intended to defeat those loose
and proud principles of legislation whicn had been contended for. I t was
meant to reduce legislation to some rule. In fine, it confined the Legislature
to those means that were necessary and proper.
H e said, it would not be pretended that it was necessary and proper for the
collection of taxes. Indeed, one gentlem an [M r. A m e s ] had attem pted to
show that the paym ents in specie could not be made, if, by chance, a great
quantity of debt suddenly accum ulated in a particular place. B u t it might
be remembered that this necessity, if it arrived, was created by the L egisla
tu re, and that would be strange reasoning which broke a good constitution, to
mend a bad law. No taxes are collected by this bill.
I t would not be necessary and proper, as a mean of borrowing money,
because, first, we do not w ant to borrow money; and if we did, this law,
though it may be the probable, it is not the necessary mean: for, if it was the in
terest of the stockholders, they might, and he believed would, refuse to loan. H e
said th at the institution might be defended upon more plausible grounds, if
the bank had been taxed, or if a condition to loan money to the public had
been made part of the plan. Upon what ground, then, do gentlem en stand?
T h ey can only say that they have implied a great and substantive power in
Congress, which gives to the Government or to individuals the influence of
15,000,000 dollars, irrevocably, for tw enty years, with a power of making by
laws, &c. because there is a probability that this institution may be convenient
and agreeable to the operations of Government. H e asked, upon parallel p rin
ciples, what might Congress not do? H e said that the gentleman from V ir
ginia, [M r. M a d is o n ] pursuing the doctrine in all the forms in which it might
appear, had struck upon several cases which were very pointed; an incorpora

BANK OF T IIE UNITED ST A T E S.

tion of manufacturers with exclusive privileges; merchants with the same; a
n a tio n a l r e lig io n . T h is , a g e n tle m a n [Mr# A m e s ] h ad sa id w a s u n fa ir a n d
extravagant reasoning; and yet, in five m inutes,the gentleman s own reasoning
led him to ask, with warmth, if Congress could not join stocks with a company
to trade to Nootka! and he condescended to doubt it the privileges given to
s u c h a company might not be exclusive.
He saw clearly, himself, that his
theory led to the latter conclusion: for, if expediency, if convenience, facility,
if fears of war, if preparations for events which might never happen, can ju sti
fy an incorporation upon the present plan, the same suggestions, the same
logic, will legalize incorporations, with exclusive privileges. T he deductions
of the gentleman from Virginia are sound and right, and cannot be fairly con
troverted. Congress may then do any thing. N ay, if the principles now
advocated are right, it is the duty of the Legislature of the Union to make all
laws, not only those that are necessary and proper to carry the powers of the
Government into effect, but all laws that are convenient, expedient, and bene
ficial to the United States. Then, where is your constitution? A re we not
now sitting, in our sober discretion, a General Government, without the sem
blance of restraint? Yes! said he; we have yet a constitution; but where is
it to be found? Is it written? No. Is it among the archives? No. W here
is it? It is found in the sober discretion of the Legislature; it is registered in
the brains of the majority.
He proceeded: I say there is no necessity, there is no occasion, for this
bank. The States will institute banks, which will answer every purpose. B ut
a distrust of the States is shown in every movement of Congress. W ill not this
plant distrusts in the States? W ill you gain by Jiis contest? This scheme
may give, and I am convinced will give, partial advantages to the States. In
the lair administration of our Government, no partial advantages can be
given! But, by this bill, a few stockholders may institute banks in particular
States, to their aggrandizement, and the oppression of the others. I t will swal
low up the State banks; it will raise in this country a moneyed interest, at the
devotion of Government; it may bribe States and individuals. He said,
entlemen asked, who would bie offended or hurt by this plan? Have we
eard any complaint against it? Have the newspapers reprobated it? These
questions had no influence on his mind. He said, it was one of those sly and
subtle movements, which marched silently to its object; the vices of it were
at first not palpable or obvious; but, when the people saw a distinction of
banks created: when they viewed, with astonishment, the train of wealth
which followed individuals, whose sudden exaltation surprised even the pos
sessors, they would inquire how this all came about- They will then examine
into the powers by which these phenomena have arisen, and they will find,
they will reprobate the falsehood of the theories of the present day.
He said that gentlemen had told us of the sudden irruptions of enemies.
W hen those necessities arrive, it is time enough to make use of them to break
your constitution. B ut gentlemen say, upon emergencies, the bank will loan
money. W e differ in opinion. I think when we want it most, the bank will
be most unable and unwilling to lend. I f we are in prosperity, we can borrow
money almost any where; but, in adversity, stockholders will avoid us with as
much caution as any other capitalists.
But a gentleman [M r. A m e s ] tells us not to be alarmed; the bank will not
eat up liberty. He said he was not afraid; he was not under any apprehension
that all the little influence that Congress possessed, would destroy the great
spirit of American liberty. The body of the People would laugh and ridi
cule any attem pt to enslave them; but a conduct which had that tendency
might arouse alarming passions. He said there existed at this moment ill
blood in the United States, which, to quiet, he would readily agree to enter
into a foreign war. America with us, we might defy the world. ' T here was,
he said, but one people he was afraid of offending: this was America
He
was not alraid ot foreign enemies; but the resentm ent of our own country is
always a subject ol serious apprehension. He observed, there were other
parts of this important and diffusive subject which he might have touched,
but he had fatigued himself and the House.

C H A R TE R OF 1791.

Mr. S mith , o f S. C . (in explanation) said, as he had been greatly m isunder
stood by the gentleman last up, he wished to explain the position he had laid
down.

H e had never been so absurd as to contend, as the gentleman had stated,
th at whatever the L egislature thought expedient, was therefore constitutional;
b ut he had only argued, that, in cases where the question was, whether a law
was necessary and proper to carry a given power into effect, the members ol
the Legislature had 110 other guide but their own judgm ents, irom which alone
they were to determ ine w hether the measure proposed was necessary and
proper to carry the powers vested in Congress into full effect. If, in such
cases, it appeared to them, on solemn deliberation, that the measure was not
prohibited by any part of the constitution, was not a violation ol the rights ol
any State or individual, and was peculiarly necessary anil proper to carry into
operation certain essential powers of the Government, it was, then, not onlv
justifiable, on the part of Congress, but it was even their duty to adopt such
measure: that, nevertheless, it was still in the province of the judiciary to annul
the law, if it should be by them deemed not to result by fair construction lrom
the powers vested by the Constitution.
F ebruary 7 .

M r. G il f . s . In the course of discussing the present important question, it
has been several times insinuated that local motives, and not a candid and
patriotic investigation of the subject, upon its merits, have given rise to the
difference of opinion which has been heretofore manifested in this House. I
shall not examine the tru th of this observation, but merely rem ark, that the
causes which may have produced the argum ents against the proposed measure,
w hatever they be, can neither add to, or take from, their m erit and influence;
an d , of course, the insinuations might have been spared, without injury to the
subject; but, so lar as the observation may have been intended to myself, I can
tru ly say, that, if a bias were to influence my conduct, it would rather direct
it to favor, than to oppose the proposed measure. T his bias would arise from
two causes: the one, from the respect which I entertain for the judgm ents of
the majority who advocated the m easure; the other, of a more serious nature.
I have observed, with regret, a radical difference of opinion between gentlemen
from the E astern and Southern States, upon great governmental questions, and
have been led to conclude that the operation of the cause alone might cast
ominous conjecture on the promised success of this much valued Government.
M utual concessions appear to be necessary to obviate this effect; and I have
always been pleased in manifesting my disposition to make advances; but, from
the most careful view of the arguments in favor of the proposed measure, con
sidered under this impression, they do not seem to me sufficient to establish
the propriety of its adoption, and 1 am therefore impelled, by the joint in
fluence of duty and opinion, to be one in the opposition.
A gentleman from M assachusetts (M r. A m e s ) prefaced his observations with
this rem ark: that it was easier to point out defects, and raise objections, to any
proposed system, than to defend it from objections, and prove an affirmative
propriety; and warned the House against the effects of argum ents of this na
ture, urged in opposition to the measure now under consideration. I agree
with the gentleman in this idea generally, but we should reflect, that, in the
present case, the address of the arguments in favor of the measure is made
to one of the strongest affections in the human mind—the love of dominion;
and hence we may justly conclude that they will be received and relished with
their full and unabated influence. T his reflection appears to me to be at least
a counterpoise to that rem ark.
T he advocates of this bill have been called on. and I conceive with propri
ety, to show its constitutionality and expediency, both of which have been
doubted by those of the opposition. In support of the first position a m ultitude
o f arguments have been adduced, all of which m aybe reducible to the follow
ing heads, such as are draw n from the constitution itself: From the incident
a l l y of this authority to the mere creation and existence of G overnm ent;

-Q

BANK OF T H E U N ITED ST A T E S.

from the expediency of the measure itself; and from the precedents of Con
gress; to which may be added a similar exercise of authority by Congress,
under the former confederation.
.
Observations arising from the constitution itself, were ot two kinds: 1 lie
right of exercising this authority is either expressed in the constitution, or deducible from it by necessary implication. One gentleman only, from Massa
chusetts,(M r. Sf.dgwick) has ventured to assert, that, discarding the doctrine
of implication, he could shew that the light to exercise the authority contend
ed for was expressly contained in the constitution. T his, I presume, must
have been a mistake in language: because the difference between an express
and an implied authority appears to consist in this: in the one case, the natu
ral import of the words used, in granting the authority, would, in themselves,
convey a complete idea to the mind, of the authority granted, without the aid
of argument or deduction: in the other, to convey a complete idea to the mind,
the aid of argument and deduction is found necessary to the usual import ot
the words used; and that gentleman proceeded with a labored argument to
prove, that the authority was expressly granted, which would have been totally
useless if his assertion had been just.
[M r. S f.d g w ic k ro se to explain. He n e v e r c o n c e iv e d the a u th o rity gra n ted
b y th e e x p r e s s w o r d s o f the co n stitu tio n ; but a b so lu te ly b y n e c e s sa r y im p lic a
tio n from d ifferen t p arts o f i t . ]
M r. G i i .es resumed. I shall not contend as to the assertion, but shall pro

ceed to consider the arguments in favor of the measure, on the doctrine o f
implication, which, indeed, are those only which deserve consideration.
In doing this, I shall consider the authority contended for, to apply to that
of granting charters of incorporation in general: for I do not recollect any
circumstance, and I believe none has been pretended, which could vary this
case from the general exercise of that authority. To establish the affirmative
of this proposition, arguments have been drawn from several parts of the con
stitution; the context has been resorted to: W e, the people o f the United
States, in order to fo r m u more perfect union, establish ju stice, ensure domes
tic tranquillity, provide fo r the common defence,promote the general welfare,
and secure the blessings o f liberty to ourselves and our posterity, §-c. It
has been remarked, that here the ends for which the Government was created
are clearly pointed out. T he means to produce the ends are left to the choice
of the Legislature, and the incorporation of a bank is one necessary means to
produce these general ends. It may be observed, in reply, that the context
contemplates every general object of Government whatever; and, if this rea
soning were to be conclusive, every object of Government would be .within
the authority of Congress, and the detail of the constitution would have been
wholly unnecessary, farther than to designate the several branches of the G o
vernment which were to be entrusted with this unlimited, discretionary
choice of means, to produce these specified ends. T he same reasoning would
apply as forcibly to every clause in the constitution, restraining the authority
of Congress, as to the present case, or to any other one in which the constitu
tion is silent. T he only candid construction, arising from the context, a p
pears to me to be this: it is designed, and it is the known office of every mem
ber to point out the great objects proposed to be answered by the subsequent
regulations, of which the constitution is composed. These regulations contain
the means by which these objects are presumed to be best answered. These
means consist in a proper distribution of all governmental rights between the
Government of the United States and the several State Governments, and in
fixing limits to the exercise of all authorities granted to the Government of the
United States. T he context, therefore, gives no authority whatever, but only
contemplates the ends for which certain authorities are subsequently given.
Arguments drawn from this source appear to be ineffectual in themselves, and
the reliance of gentlemen upon them indicates a suspicion and distrust of such
as may be drawn from other parts of the constitution. The advocates of the
bill have turned away from this context, and have applied to the body of the
constitution in search of arguments. They have fixed upon the following

CH A R TE R OF 1791.

7 |

clauses, to all or some one o f which, they assert, the authority contended for
is clearly incidental: T he right to lay and collect taxes, &.c. &lc.; to provide
for the common defence and general welfare, & c.; to borrow money, & c.; to
regulate commerce with foreign nations, &c. T he bill contemplates neither
the laying nor collecting taxes; and, of course, it cannot be included in that
clause. Indeed, it is not pretended, by the bill itself, to be a t all necessary to
produce either of those-ends; the farthest the idea is carried in the bill, is,
that it will tend to give a fa c ility to the collection. T he term s common defence
and general welfare contain no grant of any specific authority, and can relate
to such only as are particularly enumerated and specified. 7 o borrow money.
Gentlemen have relied much upon this clause. T heir reasoning is, that a rig h t
to incorporate a bank is incidental to that of borrowing money, because it cre
ates the ability to lend, which is necessary to eft'ectuate the right to borrow.
I am at a loss to discover one single relation between the right to borrow and
the right to create the ability to lend, which is necessary to exist between
principal and incident. I t appears to me that the incidental authority is para
mount to the principal; for the light of creating the ability to lend is greater
than that of borrowing from a previously existing ability. I should therefore
rather conclude, that the right to borrow, if there be a connexion at all, would
be incidental to the right to grant charters ot incorporation, than the reverse of
that proposition, which is the doctrine contended for by the advocates of this
measure. T he same reasoning which would establish a right to create the
ability to lend, would apply more strongly to enforce the will, after the ability
be created; because the creator would have a claim of gratitude, at least, upon
the created ability, which, if withheld, perhaps with justice, might be insist
ed on.
To regulate commerce ivith fo re ig n nations. T his is, by no means, a satisfactoiy ground for the assumption of this authority: for, if it be deemed a
commercial regulation, there is a clause in the constitution which would abso
lutely inhibit its exercise. I allude to that clause which provides that no p re
ference shall be given by any regulation of commerce or revenue, to the ports
o f one State over those of another; and it seems to be adm itted that one p rin
cipal effect to be produced by the operation of this measure will be, to give a
decided commercial preference to this port [Philadelphia] over every other
in the United States.
Gentlemen, finding it difficult to show that necessary relation and intimate
connexion between the authority contended for, and any one of the specified
authorities before mentioned, which would be essential to the establishment
of their doctrine, have referred to what has been generally called the sweep
ing clause, and have made deductions from the terms necessary and proper.
T hey have observed, that certain specified authorities being granted, all others
necessary to their execution follow, without any particular specification. T his
observation may, in general, be true; but its fallacy here consists in its appli
cation to this particular case. I t cannot be applied until the exercise ot this
authority be proved to be necessarily connected with some one of the pre
viously enum erated authorities; and here the argument, .is well as the fact,
fails. T h e authority contended for seems to me to be a distinct substantive
branch of legislation, and perhaps paramount to any one o f the previously
enum erated authorities, and should therefore not be usurped as an incidental
subaltern authority.
I am confirmed in this opinion from the indistinct, confused conceptions
of gentlemen who advocate the measure. T hey rely upon the incidentality of
this authority, to some one of those particularly specified, and yet have applied
it as an inciaent to several distinct, unconnected subjects of legislation; and
thus, distrusting their own conclusions, or as if the inquiry would be too trou
blesome or m inute, they leave this ground, and assert that it is incidental to
the result of the whole combined specified authorities. G entlemen must,
therefore, view this right through different optics, at different tim es; or, w hat
I ratherbelieve to be the fact, they have no distinct view of it at all— the right
having 110 existence.

BANK OF T H E UN ITED ST A T E S.
A gentleman from M assachusetts,('M r. S e d g w i c k ) finding the usual import
of the term s used in the constitution to be rather unfavorable to the doctnnes
advanced by him, has favored us with a new exposition ot the word necessary.
Me says that necessary, as applicable to a mean to produce an end, should be
construed so as to produce the greatest possible quantum of public utility. I
have been taught to conceive that the true exposition of a necessary mean to
produce a given end, was that mean without which the end could not be pro
duced.
The gentlemaivsreasoning, however, if pursued, will be found to teem with
dangerous effects, and would justify the assumption of any given authority
whatever. T erm s arc to be so construed as to produce the greatest degree of
public utility. Congress are to be the judges of this degree of utility: this
utility, when decided on, will be the ground of constitutionality; hence, any
measure may be proved constitutional which Congress may judge to be useful.
T hese deductions would suborn the constitution itself, and blot out the great
distinguishing characteristic of the free constitution of America, as compared
with the despotic Governments of Europe, which consists in having the boun
daries of Governmental authority clearly marked out and ascertained. The
exclusive jurisdiction over ten miles square has been adverted to, by one gen
tleman, (M r. A m e s ) as a specified authority, to which the one contended for
is suggested to be incidental. He has reasoned in this manner: Congress pos
sesses jurisdiction over ten miles square, &c. Congress may, therefore, estab
lish a bank within the ten miles square; and, as principle is not applicable to
place, Congress may exercise the same authority any where else. This seems
to me to be an ingenious improvement upon sophistical deduction. T he gentlem an, however, should have reflected, that the ground upon which he built
the right to exercise this authority, was that of exclusive jurisdiction, and, to
extend the principle, it is necessary to extend the right of exclusive jurisdic
tion: without this, the basis of his argument fails, and the superstructure,
however beautified, must follow, for the principle, if at all deducible_ from
that source, is expresely confined to place, and cannot operate beyond it.
I shall now consider the second resource whence the constitutional right
of exercising the proposed authority is derived; its in cid en tally to the mere
creation anil existence of Government. It has been observed that, in all
governments, there are certain rights tacitly granted, and certain other rights
retained; thatitisim possible,infram inga constitution, to enumerate every mi
nute governmental right, and that such an attem pt would be chimerical and
vain; and, hence, the incidentally of this authority to the mere existence of
government is inferred. These observations seem to me to apply to a govern
ment grow ing out of a state of society, anti not in a government composed of
chartered rights from previously existing governments, or the people of those
governments. 1 have been taught to consider this as a federal, not as a con
solidated government, and am not prepared or disposed, at present, to relin
quish that idea. A gentleman from New York, (M r. L a w r e n c e ) has r e
marked that the government is consolidated quo ad the powers granted, and,
of course, quoad their incidents; but he should first have shown that the au
thority contended for is one of those granted, or incidental to some of them,
before the application can be made; the observation can have no tendency
to establish either of those positions. W hat effect would this doctrine, if a d
mitted, have upon the State governments? A nd how' would it be relished by
them? Their dignity and consequence will not only be prostrated by it, but
their very existence radically subverted. A third resource of deducing this
constitutional authority has been resorted to— the expediency o f the proposed
measure itself. I presume the great object of the constitution was to distri
bute all governmental rights between the several State governments and the
Government o f the United States: the expediency, therefore, of the e x e r c is e
of all the constitutional rights, as they relate to State or General Government,
is properly contemplated and decided by the constitution, and not by the
governments amongst which the distribution is made. A gentleman from
South Carolina (M r, S m i t h ) has said, that the expediency anti constitution-

CH A RTER O P 1791.

ulity of the proposed measure cannot be considered separately, because the
constitutionality grows out off the expediency? this is but candidly unveiling
the subject of that sophistical mask which has been ingeniously thrown over
it by some gentlemen: for all the arguments adduced in favor of the measure,
from whatever 6 ource they arise, it pursued, will be found to rush into the
great one of expediency, to bear down all constitutional provisions, and to
en d themselves in the unlim ited ocean of despotism.
Several gentlemen have said, that this authority may be safely exercised,
since it does not interfere with the rights of States or individuals. I think
this assertion not very correct; if the States be constitutionally entitled to
the exercise of this authority, it is an intrusion on their rights to do an act
which would eventually destroy or impede the freest exercise of that autho
rity: for it is totally imm aterial whether the effect be produced by the opera
tion of this or by an inhibition in express term s—the States may not only in
corporate banks, but may, of right, prohibit the circulation of bank paper
within their respective lim its; the act, therefore, if it be intended to have an
effectual operation, will certainly infringe this right, or exist at the mercy of the
S tate Governments. T his reasoning, however, places the subject in another
point of view, a little singular; it contemplates the authority contended for as
vacant ground, and justifies the tenure by the mere title of occupancy. In
almost all the remarks in favor of the measure, gentlemen seem to have for
gotten the peculiar nature of this Government: it being composed of mere
chartered authorities, all authority not contained within the charter, would,
from the nature of the grant, have been retained to the granting party, and I
will venture to assert that this opinion was a sine qua non of the adoption and
existence of this G overnm ent; but, it this opinion had been doubtful, Congress
themselves have made an express declarationinfavorof this construction, in the
proposed am endments to the constitution. Gentlemen have inferred a consti
tutional right to exercise the authority contended for, from a fourth resource—
the fo rm e r usages and habits o f Congress; in affirmance of this argument,
several acts of Congress have been referred to, the power of removal from
office, the government of the W estern territory, the cession from N orth Caro
lina, the purchase of W e st Point, &c. &c. I shall not examine into the pro
propriety of those several acts, though I conceive it would not be difficult to
show that they differ m aterially, upon constitutional grounds, from the one
now proposed; I shall only rem ark, that, if Congress have heretofore been in
the usage and habit of disregarding and violating the constitution, it is high
tim e that that habit and.usage were corrected: I hope and trust that the People
of the United States will not tamely see the only security of their rights and
liberties invaded and violated, but also see one violation of it, with impunity,
boldly urged as an argument to justify another.
A n instance of a similar exercise of authority by the Congress which e x
isted under the former confederation, has been mentioned in favor of its ex
ercise by the present Congress. The argument has been, that, as the powers
of the present Congress are greater than those of the former Congress, and
the former were competent to the exercise of this right, the present must be
more so. It is to be rem arked that that act was the child ot necessity, and
Congress doubted its legitimacy, and the act itself was never confirmed by a
judicial decision; and, it should be also rem arked, that the same Congress
did not pretend to profess the right to punish those who should counterfeit the
paper ot the bank, and recommended it to the States to confirm the act which
they had done, and to pass laws for the purpose of punishing those who should
counterfeit the paper; and it is a little remarkable that this circumstance, which
is one of the most essential to the existence and operation of this act, is w ith
held from our view. B ut, as I think arguments from this source wholly foreign
to the subject, I shall make no other remark upon them. I shall now sug
gest a few observations respecting the expediency ot the proposed measure.
In doing this, I shall not say any thing as to the utility of banks in general,
nor as to the effects of the banks of England,[Scotland, H olland, &c. &c. I pos
sess not sufficient practical or theoretical knowledge to justify the inquiry. I
10

BANK OF T H E UN ITED ST A T E S.

shall only point out a few circumstances, which are peculiarly attached to the
Government we are now administering, which might vary the application oi
general rules drawn from the governments of a different nature, and which pos
sess the unquestioned right of granting charters of incorporation.
In the first place, the right of exercising that authority, by this Government,
is at least problematical; it is no where granted in express term s: the Legisla
ture, therefore, can have no competent security against the judicial decision,
but a dependent or a corrupt court. I presume that a law to punish with
death those who counterfeit the paper emitted by the bank, will be consequent,
upon the existence of this act; hence a judicial decision will probably be had
of the most serious and awful nature. The life of an individual at stake on
one hand: an improvident act of the Government on the other. A distrust,
arising from this cause, will forever keep the bank in jeopardy; and the very
first trial of this nature will probably subject the bank to a run which it will
be unable to stand; for all stockholders will require the greatest possible secu
rity for their money, and distrust of such an institution will be destruction.
T his observation seems to me to have a peculiar force, from the great propor
tion of paper to that of gold and silver, upon which the bank is proposed to be
founded. T he peculiar relation between the General and State Governments
will naturally produce a contest for governmental rights, until long experience
shall settle the present boundaries between them. T he present measure ap
pears to me to be an unprovoked advance in this scramble for authority, and
a mere experiment how far we may proceed without involving the opposition
of the State Governments. It should be rem arked, that this Government is in
its childhood; it is therefore unfitted for such bold and manly enterprises, and
policy would dictate that it should wait at least, until it may have become
more matured or invigorated- Two modes of administering this Government
present themselves: the one, with mildness and moderation, by keeping within
the known boundaries of the constitution; the other, by the creation and opera
tion of fiscal mechanism. The first will ensure us the affections of the People,
the only natural and substantial basis of republican government; the other
will arise and exist in oppression and injustice—will increase the previously ex
isting jealousies of the People, and must be ultimately discarded, or bring about
a radical change in the nature of our Government, Having suggested these ob
servations upon the measure in general, I shall now proceed to point out a
few objections to the detail of the Dill. I think the authority given to the bank,
to purchase and hold lands, objectionable. In the first place. 1 doubted the con
stitutional right of Congress to invest such an authority: tne lands within the
United States are holden of the individual States, and not of the United States,
and that tenure appears to me to be the true ground upon which the right to
exercise that authority grows. I believe it is adm itted, that, although Congress
may naturalize a foreigner, that they cannot authorize him to purchase lands.
And I think the case at least as strong, when they first create an artificial
person, and then invest the authority; besides, if we have reference to the ex
perience of other countries, we shall find it dangerous to allow incorporated
bodies to hold lands at all. T he exercise of that right produced great op
pression in E ngland; and nothing but the masterly activity of an absolute
prince could apply a competent remedy. A gentleman from Massachusetts
-[M r. S e d g w i c k ] has denied that the bank is invested with this right. It is
true, it is confined to the mode of purchasing by mortgage, but that is the
most effectual mode of purchasing, and the most ruinous to the landholder.
I will merely mention one other objection without a comment. T he au
thority given to make laws not contrary to law or its own constitution; but
the most objectionable clause, is that which limits its duration, and pledges
the faith of the United States that no other bank shall be established in the
meantime. However dangerous and offensive the present measure might
prove in its operation, and whatever may be the utility and advantage in any
other scheme o f banking, which experience may suggest, such a stipulation can
not be justified but from the most pointed necessity, and from the maturest
deliberation. W hen I search for the necessity of this measure, it escapes

C H A R T E R O F 179L.

We; it is not pretended in the bill itself: the chief stimulus which I can dis
cover to the existence of this measure, is, to give artificial impulse to the value
of stock. T his is not a sufficient justification. T he subject has not been
sufficiently considered, and I therefore hope it may be postponed to some fu
tu re session of Congress. M any evils may be avoided by such a conduct; none
can result from it.
Mr. G e r r y said he should principally confine himself to the objections of
the gentleman first up, from Virginia, [M r. M a d i s o n ] not from a disrespect
to the observations of other gentlemen in the opposition, but because he con
sidered their arguments as grafts on the original stock of those urged by the
gentleman alluded to; and, if the trunk fall, its appendages m ust fall also.
The objects of the bill, he said, were to render the fiscal administration
successful; to give facility to loans, on sudden emergencies; and to benefit
trade and industry generally: and that these were objects of high importance,
had not been denied, neither had it been asserted that they ought not, if possi
ble, to be attained.
It is objected, however, that the mode proposed by the bill is unconstitu
tional, and the bill itself defective.
T he mode proposed is a national bank; to establish which, he thought C on
gress were as competent as either House were to adjourn from day to day.
I t is said that Congress have no power relating to this subject, except w hat
is contained in the clauses for laying and collecting taxes, imposts, excises,
& c.; for borrowing money, and for making all laws necessary and proper for
carrying these powers into effect; and that these do not authorize the e sta
blishment of a national bank.
To ascertain this, the gentleman from Virginia proposes a candid interpre
tation of the constitution, which we shall agree to, and he offers to assist us
with his rules of interpretation: for his good intentions in doing which, we
give him full credit; but, as he acknowledges that he. has been long decided
against the authority of Congress to establish a bank, and is therefore preju
diced against the measure; as his rules, being made for the occasion, are the
result of his interpretation, and not his interpretation of the rules; as they
are not sanctioned by law exposition, or approved by experienced judges of
the law: they cannot be considered as a criterion for regulating the judgm ent
o f the House, but may, if adm itted, prove an ig n is fa tu tts, th at may lead to
destruction.
W e wish not, however, by establishing our own rules of interpretation, to
enjoy the privilege which is denied to the gentlem an, but will meet him on
fair ground, by applying rules, which have the sanction mentioned; and as the
learned Judge Blackstone has laid down such, it is presumed the gentleman
from Virginia will not contend for a preference, or refuse to be tried by this
standard.
Tlio Judge observes, “ that the fairest and most rational method to inter“ pret the will of the legislator, is, by exploring his intention at the time when
“ the law was made, by sig n s the most natural and probable; and these signs
“ are either die words, the context, the subject m atter, the effect and conse“ quences, or the spirit and reason of the law.” W ith respect to words, the
Judge observes, that “ they are generally understood in their usual and most
“ ordinary signification, not so much regarding the grammar, as their general
“ and popular use.”
T h e gentlem en on different sides of the question do not disagree with respect
to the meaning of the term s taxes, duties, imposts, excises, &c. or of borrow
in g money, but of the word necessity. A nd the question is, what is the gen
eral and popular meaning of this term? Perhaps the answer to the question
will be truly this, that, in a general and popular one, the word does not adm it
of a definite meaning, but that this varies according to the subject and circum
stances. W ith respect to the subject: for instance, if the people, speaking ot
a garrison besieged by a superior force, and without provisions, or a prospect
of relief, should say, it was under the necessity of surrendering, they would

BANK OF T H E U N ITED STA TES.

mean a physical necessity, for troops cannot subsist long without provisions.
But, if speaking of a debtor, the people should say he was frightened by his
creditor, and thus was reduced to the necessity of paying his debts, they would
mean a legal, which is very different from a physical necessity: for, although
the debtor, by refusing payment, might be confined, he would be allowed sub
sistence. and the necessity he was under to pay his debts would not extend
beyond his confinement. Again, if it should be said that a client is u n d er
the necessity of giving to hislaw yer more than legal fees, the general popular
meaning of necessity would, in this instance, be very different from that in the
other— the necessity would neither be physical nor legal, but artificial; or, if
I may be allowed the expression, a long robe necessity.
T he meaning of the word “ necessary’’'’ varies also, according to circum
stances: for, although Congress has power to levy and collect taxes* duties,
&c. to borrow money, and to determine the time, quantum, mode, and every
other regulation “ necessary” and proper for supplying the treasury, yet the
people would apply a different meaning to the word necessary, under differ
ent circumstances. For instance, without a sufficiency of precious metals
for a medium, laws regulating an artificial medium would be generally thought
necessary for carrying into effect the power to levy and collect taxes; but if
there was a sufficiency of such metals, those laws would not, generally, be
thought necessary. Again, if specie was scarce, and the credit of the Go
vernment low, collateral measures would be, by the People, thought neces
sary for obtaining public loans; but not so, if the case was reversed. Or, if
part of the States should be invaded and over-run by an enemy, it would be
thought necessary to levy on the rest heavy taxes, arid collect them in a short
period, and to take stock, grain, and other articles, from the citizens, without
their consent, for common defence; but in a time of peace and safety, such
measures would be supposed unnecessary. Instances may be multiplied in
other respects, but it is conceived that these are sufficient to show that the
popular and general meaning of the word “ necessary,” varies according to
the subject and circumstances.
The second rule of interpretation relates to the context, and the Judge con
ceives, that, “ if words are still dubious, we may establish their meaning by
“ the context: thus, the preamble is often called in to help the construction o f
“ an act of Parliam ent.” The constitution, in the present case, is the great law
of the People, who are themselves the sovereign legislature; and the preamble
is in these words: “ W e, the People of the United States, in order to form
“ a more perfect union, establish justice, ensure domestic tranquillity, pro‘ ‘ vide for the common defence, promote the general welfare, and secure the
“ blessings of liberty to ourselves and our posterity, do ordain and establish
“ this constitution for the United States ot A m erica.”
These are the great objects for which the constitution was established, and,
in administering it, we should always keep them in view. And here it is re
markable, that, although “ common defence and general welfare” are held up
in the preamble, amongst the primary objects of attention, they are again
mentioned in the eighth section ot the first article, whereby we are enjoined,
in levying taxes, duties, &c. particularly to regard “ the common defence and
general welfare.” Indeed, common sense dictates the measure: for, the se
curity of our property, families, and liberty, of everything dear to us, depends
on our ability to defend them. T he means, therefore, for attaining this ob
ject, we ought not to omit, a year, a month, or even a day. if we could avoid
it; and we are never provided for defence, unless prepared for sudden em er
gencies. Should Government be surprised in this case, it would be as dis
honorable as for a general to be surprised in a state of warfare, and the event
to the community may be much more fatal. I f provision, then, for sudden
emergencies, is indispensable, it must be evident that it will depend, in a
great measure, on the ability of Government to command, at all tim es, for
this purpose, a sufficient sum of money, which is justly denominated the
sinews of war; and how is this to be effected? By emissions of bills of credit?
D unng the Revolution, bills of credit, it must ue acknowledged, have done

CHAKTEH OF 1791.

wonders. They have, in conflict with the banks, treasury, and public credit
of G reat Britain, risen superior to them all, and have died a natural death.
W e have honored them with a funeral pile; we now bid peace to their manes,
and devoutly hope that bills of credit will for ever be extinct in the United
States. Are we to depend, then, on taxes, for commanding money in cases
o f urgent necessity? These, as has been shown by other gentlem en, will be
too slow in their operation; unless, indeed, we should levy a tax for drawing
into, or locking up, in the treasury, three or four millions ot dollars—a law
which would be universally considered as unnecessary and improper.
By loans, and loans only, can provision be made for sudden emergencies.
But if loans should be made previously to an emergency, the People would be
unnecessarily burdened by the interest thereof, and most of the other evils
would ensue, that would arise from previous taxes; and if they were to be
made as an emergency, without previous arrangem ents, of whom are we to
borrow? O f individualsP T hese cannot be depended on, as has been fully
proved by our own experience at the commencement of the Revolution. A re
we to apply to the banks already established in the States, for loans? These
can 110 more be depended on than individuals: for stockholders, having no
more attachm ent to Government than other citizens, would, in cases of pub
lic danger, attend to the preservation of their property, by other means than
loaning it to Government. A nd, moreover, the united capitals of all the
banks existing in the Union, would be insufficient for Government: for they
do not amount to a million and a half of dollars; and only a part of this could,
in any case, be reasonably expected on loan.
A re we to apply to foreign banks or individuals? These, as has been shown,
are too remote; and, if not, we have not been able, without the assistance of
an ally, to obtain foreign loans during the war; and, perhaps, the Power, on
whose assistance we may rely, would be hostile to us. Such dependence,
then, as has been stated, would necessarily leave us in a deplorable state.
A nd it m ust be evident, that a previous arrangement to aid loans, in cases
of sudden emergency, is necessary and proper, in the general and popular use
of the term, inasmuch as any other measure, that Congress can adopt, would
be inadequate to the purpose of common defence; and what prevfous arrange
m ent can we make so proper as that of a national bank? I f gentlem en in the
opposition know of any, let them produce it, and let the merits of it be inves
tigated, for it is unreasonable to propose a rejection of this plan, without pro
ducing a better. T he plan proposed by the Secretary of the T reasury, which
is now the subject of discussion, does honor, like all his other measures, both
to his head and heart. It will be m utually beneficial to the stockholders and
to the Government, and, consequently, to the People. T he stockholders, by
this plan, will be deeply interested in supporting Government, because threequarters of their capital, consisting of funded certificates, depend on the ex
istence of the Government, which, therefore, is the prop ol their capital—the
main pillar that supports the bank. Again, the credit of G overnm ent, which
is immaterial to other banks, is essential to the national bank: for the annual
interest of three-quarters of its capital, which must form a great share of its
profits, will depend altogether on the credit of Government, and produce, on
the part of the stockholders, the strongest attachm ent to it. On the other
hand, it will be for the interest of Government to support the bank, as well
on account of the benefits which the public will generally derive from the in
stitution, and the profits arising from the shares of Government in the stock,
■which will be hereafter noticed, as of the supplies of money, which it will be
for the interest of the bank to furnish, in cases of urgent necessity. W h en
ever these exist, Congress may lay a tax for supplying the treasury, and anti
cipate it with certainty, by means of the national bank. I t being then our
d uty to provide for the common defence, in cases of emergency, the provision
m ust evidently be by taxes, loans, or by arrangements for obtaining the latter
on the earliest notice; and previous taxes and loans being oppressive, impro
per and unnecessary, the arrangem ent for aiding loans becomes indispensable,
and a bank, of consequence, necessary and constitutional.

BANK OF T H E UN ITED ST A T E S

T he third rule of the Judge, relative to the“ subject m atter” of a law, it is
unnecessary to apply, because the members agree in their ideas relative to the
meaning of the term s taxes, duties, loans, &c.
. .
T he fourth rule, which relates to “ effects and consequences, ’ is important,
and here the learned Judge observes, that, “ as to effects and consequences,
“ the rule is, where the words bear none, or a very absurd signification, if
“ literally understood, we must a little deviate from the received sense of
“ them.” In the present case, the gentleman first up, from Virginia, gave the
whole clause, by which Congress are authorized to “ make all laws neces“ sary and proper,” &c. no meaning whatever; for, they say, the former Con
gress had the same power, under the confederation, without this clause, as the
present Congress have with it. T he Federalist is quoted on this occasion, but
although the author of it discovers great ingenuity, this part of his performance
I consider as a political heresy. His doctrine, indeed, was calculated to lull
the consciences of those who differed in opinion with him at that time, and
having accomplished his object, he is probably desirous that it may die with
the opposition itself. The rule in this case, says, that where the words bear
no signification, we must deviate a little; and as this deviation cannot be made
by giving the words less than no meaning, it must be made by a more liberal
construction than is given by gentlemen in the opposition. T hus, their ar
tillery is turned 011 themselves: for their own interpretation is an argument
against itself.
The last rule mentioned relates to the spirit and reason of the law, and the
Judge is of opinion, “ that the most universal and effectual way of discover“ ing the true meaning of a law, where the words are dubious, is, by^ consider*• in g he reason and spirit of it, or the cause which moved the Legislature to
“ enact it.” T he causes which produced the constitution, were, an imper
fect union, want of public and private justice, internal commotions, a defence
less community, neglect of the public welfare, and danger to our liberties.
These are known to be the causes, not only by the preamble of the constitu
tion, but also from our own knowledge of the history of the times that preced
ed the establishment of it. I f these weighty causes produced the constitution,
and it not only gives power for removing them, but also authorizes Congress
to make all laws necessary and proper for carrying these powers into effect,
shall we listen to assertions, that these words have no meaning, and that this
constitution has not more energy than the old! Shall we thus unnerve the
Government, leave the Union as it was under the confederation, defenceless
against a banditti of Creek Indians, and thus relinquish the protection of its
citizens? Or shall we, by a candid and liberal construction of the powers ex
pressed in the constitution, promote the great and important objects thereof?
Fiach member must determine for himself. I shall, without hesitation, choose
the latter, and leave the People and States to determine whether or not I am
pursuing their true interest. If it is inquired where we are to draw the line
of a liberal construction, I would also inquire where the line of restriction is
to be drawn? T he interpretation of the constitution, like the prerogative of a
sovereign, may be abused, but from hence the disuse of either cannot be in
ferred. In the exercise of prerogative, the minister is responsible for his ad
vice to his sovereign, and tne members of either House are responsible to their
constituents for their conduct in construing the constitution. W e act a t our
peril: if our conduct is directed to the attainment of the great objects of Go
vernment, it will te approved, and not otherwise; but this cannot operate as
a reason to prevent our discharging the trust reposed in us.
L et us now compare the different modes of reasoning on this subject, and
determine which is right, for both cannot be.
The gentleman from Virginia, [ M r . M a d is o n ] has urged the dangerous
tendency of a liberal construction. But which is most dangerous, a liberal or a
destntcliye interpretation? T he liberty we have taken in interpreting the
constitution, we conceive to be necessary, and, it cannot be denied to be
useful in attaining the objects of it; but, w hilst he denies us this liberty, he
grants to himself a right to annul part, and a very important part, of the con

X 'H A R TER OF 1791. '

-g

stitution. T he same principle that will authorize a destruction of part, will
authorize the destruction of the whole of the constitution; and if gentlem en
have a right to make such rules, they have an equal right to make others for
enlarging the powers of the constitution, and, indeed, of forming a despotism.
T hus, if we take the gentleman for our pilot, we shall be wrecked on the reef
which he cautions us to avoid.
T he gentleman has referred us to the last article of the am endment, pro
posed to the constitution by Congress, which provides that the powers not
delegated to Congress, or prohibited to the States, shall rest in them or the
People. A nd the question is, what powers are delegatedP Does the gentle
man conceive that such only are delegated as are expressed.? I f s o ,h e m u s t
adm it that our whole code of laws is unconstitutional. This he disavows,
and yields to the necessity of interpretation, which, by a fair and candid ap
plication of established rules of construction to tne constitution, authorizes, as
has been shown, the measure under consideration.
T h e usage of Congress has also been referred to; and if we look at their
acts, under the existing constitution, we shall find that they are, generajly,
the result of a liberal construction. I will mention but two. T h e first
relates to the establishment of the Executive department, and §ives to the
P resident the power of removing officers. A s tne constitution is silent on
this subject, the power mentioned, by the gentlem an’s own reasoning, is vested
in the States or the People: he, however, contended for an assum ption c f
the power, and when assumed, urged that it should be vested in the President,
although, like the power of appointment, it w as, by a respectable minority in
both Houses, conceived that it should have been vested in the President and
Senate. H is rule of interpretation, then, was, therefore, more liberal than it
is now. In the other case, Congress determined by law, with the sanction of
the President, when and where they should hold their next session, although
the constitution provides that this power shall rest solely in the two Houses.
T he gentleman also advocated this m easure, arid yet appears to be apprehen
sive ot the consequences that m ay result from a construction of the constitu
tion which admits of a national bank. B ut, from which of these measures is
danger to be apprehended? T he only danger, from our interpretation, would
be the exercise by Congress of a general pow er to form corporations. B ut
the dangers resulting from the gentlem an’s interpretations, in the cases alluded
to, are very different: for what m ay we not apprehend from the precedent of
having assumed a power on which the constitution was silent, and from hav
ing annexed it to the supreme Executive? I f we have this right in one in
stance, we may extend it to others, and make him a despot. A nd here I think
it necessary to declare, that such is my confidence in the wisdom, integrity,
and justice of the C hief M agistrate, as that I should be at ease, if my life,
liberty, and property, were at his disposal; but this is a tru st which I am not
authorized to make for my constituents, and as his successor in office will
possess equal powers, but may not possess equal virtues, caution with respect
to them is necessary. Again, what may be the result of the precedent relating
to the session of Congress? I f we had a right, by law , to determ ine where
the next Congress should hold their sessions, one Congress may oblige another
to sit at K entucky, or in the intended Yazoo State, under the protection of a
Choctaw chief, or his excellency Governor T allan. I t m ust, therefore, be
evident that the usage of Congress, in both instances, is against the gentle
man, and that the dangers, from the precedent of establishing a bank, are,
com paratively, sm all, to those resulting from the other measures referred to.
T n e gentleman from Virginia has endeavored to support his interpretation
of the constitution by the sense of the federal convention. B u t how is this to
be obtained? By applying proper rules of interpretation. I f so, the sense of
the convention is in favor of the bill; or, are we to depend on the memory of
the gentlem an for an history of their debates, and from thence to collect their
sense? T his would be improper, because the memories of different gentle
men would probably vary, as they have already done, with respect to those
facts; and, if not, the opinions of tho individual members, who debated, are
not to be considered as the opinions of the convention. Indeed, if they were,

BANK OF T H E UN ITED ST A T E S.

no motion was made in that convention, and, therefore, none could be reject
ed for establishing a national bank. And the measure which the gentleman
has referred to was a proposition merely to enable Congress to erect commer
cial corporations, which was, and always ought to be, negatived.
The gentleman’s arguments, respecting the sense of the State conventions,
have as little force as those relating to the federal convention. T he debates
of the State conventions, as published by short hand writers, were, generally,
partial and mutilated; in this, if the publications are to be relied on, the argu
ments were all on one side of the question: for there is not in the record,
which is said to contajn the Pennsylvania debates, a word against the ratifi
cation of the constitution; although we all know that arguments were warmly
urged on both sides. The gentleman has quoted the opinions as recorded in
the debates of this State and N orth Carolina of two of our learned judges.
B ut the speech of one member is not to be considered as expressing the sense
of a convention; and, if it was, we have no record, which can be depended on,
of such speeches. Indeed, had even this been the case, the Union was, at that
tim e, divided into two great parties, one of which feared the loss of the Union
if the constitution was not ratified unconditionally, and the other, the loss of
our liberties, if it was. T he object, on either side, was so important, as, per
haps, to induce the parties to depart from candor, and to call in the aid of
art, flattery, professions of friendship; promises of office, and even o f good
cheer, were recurred to; and when these failed, the federal bull was published,
denouncing political death and destruction to anti-federal infidels. U nder
such circumstances, the opinions of great men ought not to be considered as
authorities, and, in many instances, could not be recognised by themselves.
M r. Gerry then observing that the sense of the States, respecting a bank,
would be best ascertained by their legislative acts, showed, from the journals
of Congress, that, when restrained by the confederation from exercising any
powers but what were expressly delegated, Congress had, without any a u
thority, established a bank, whose capital might extend to ten millions of
dollars, and had not only pledged the faith o f the Union not to erect any
other, but had recommended it to the States to prohibit any State establish
ment of the kind, and had, also, determined that the bank bills should be
receivable in the taxes and duties of every State. T h at the States did not
remonstrate against, .or tacitly acquiesce in, but actually supported the m ea
sures of Congress relative to the bank, whilst the war continued, and after the
peace. T h at this was the strongest evidence the States could give, that they
thought the measure salutary, and had no objection to it on the ground of its
being constitutional. He then argued that, if the States, and the People at
large, had no objections to a bank, in that case, they certainly could not in
this; and inquired whether there was any evidence ot their disapprobation of
such an institution in the debates of their conventions or propositions for
amendments? To this he answered in the negative, and urged that, whilst
the conventions were silent on this subject, and had no objections to such a
measure, several of them had proposed amendments to the constitution, for
restraining Congress from establishing commercial corporations, which evinc
ed their approbation of such institutions, and adm itted, at the same time, in
some degree, the power of Congress, under the existing constitution, to form
them.
M r. G erry then showed that, as a monopoly has been urged as an objection
to the bill, no such consequence could result from it: for the bill does not
restrain State or private banks, or even individuals, from negotiations of a
similar nature with those permitted to the stockholders; nor does it restrain
the States from forming similar corporations. T his plan has not a feature of
monopoly, and the gentlemen who oppose it contend for a bank, which, ac
cording to its original institution, was founded in monopoly.
He then answered the arguments, urged against the authority of Congress,
to enable corporations to hold lands, when they had no power themselves of
purchasing and holding land; and showed that, although Congress are restrain
ed from purchasing lands, (except in certain cases) and from exercising over

C H A R T E R OF 1791.

the same exclusive legislation: yet, that they may hold lands obtained by
execution, conquest, and by other means, as well as by those clauses ot the
constitution which relate to lands now belonging to the Union; and that
Congress had often invested others with powers which they, themselves, could
not exercise.
H e then noticed the argum ent, that, by a law of Virginia, notes payable to
the bearer, or order, could not circulate in that S tate; and observed that this
law could not be supposed to extend to bank notes; and, if it did, it would be
null and void, because the constitution of the Union, and laws made in pur
suance thereof, were paramount to the laws and constitutions of the several
States. Having considered the arguments against the constitutionality of the
bill, he entered into the policy and utility o f the m easure, in his rem arks on
which head, the reporter did not follow him.
M r. V i n i n g apologized for rising to offer his sentiments on this subject,
which had already been so ably discussed; but, considering the nature of the
objections, as arising from constitutional principles, it had acquired an impor
tance which would justify his troubling the House with some remarks.
H e began by noticing tne leading argum ent of M r. Madison respecting the
•sense of the continental convention, on the power proposed to be exercised by
Congress in this bill. H e showed that the opinion of the gentleman, in this
instance, was, if not singular, different from that of his contemporaries; a t
least, a similar objection had not been started by those gentlem en of the Se
nate who had been members of the convention; but, granting that the opinion
o f the gentleman from Virginia had been the full sense ot the members of
convention, their opinions, at that day, he observed, are not a sufficient autho
rity for Congress, at the present tim e, to construe the constitution by.
M r. V ., in explaining the powers proposed by the bill to be given to the
corporation of the bank, adverted to the particular power of “ making rules
an a regulations not contrary to law .”
He snowed that this term taw means the common law, and, alluding to the
inquiry of M r. Madison, what law was intended by this clause? who, in an
swering his own question, had said, that, i f the laws o f the United States were
intended, the power contemplated was dangerous and unconstitutional , as
those laws were very fe w in number, M r. V in in g observed, that the restric
tion contended for by the gentleman, as the result of his objection, would
annihilate the most essential rights and privileges o f the citizens of the U n it
ed States. H e then observed, a corporation is nothing more than constituting
a body with powers to effect certain objects in a combined capacity, which
an individual may do in his individual capacity, agreeably to the usage and
custom of common law.
Adverting to tire act by which the U nited States became a free and inde
pendent nation, he said, from that declaration, solemnly recognised a t home
and abroad, they derive all the powers appertaining to a nation thus circum
stanced, and consequently the power under consideration. H e traced the
origin of corporations to the time of N um a; the first of which was for agricul
tural purposes; they were afterwards extended to other objects; and, from
that d ay to this, said h e, all civilized and independent nations have been in
th e practice of creating them ; and w hat do they am ount to but this, enabling
a number of persons, in a combined capacity, to do that to a more certain
effect than an individual may do, but subject to the control of common law
ju all its regulations and transactions.
On the doctrine of constructions, as applied to the constitution, he observed,
that, on some occasions, the constitution is like the sensitive plant, which
shrinks from the sm allest touch; on others, it is like the sturdy oak, which
braves the force of thunder. H e referred to the act containing the power of
removability, in which the utmost latitude of construing the constitution
was contended for and adopted; and, said he, the funding system cannot be
defended 011 any other principle than th at of implication.
11

BANK OF T H E UNITED ST A T E S.

He then inquired, of what right does this incorporation deprive a single citi
zen? A n d e a n an act possibly meet the disapprobation of a single person
which does not infringe nis rights, and which puts money into his pocket? I
think not. H e insisted that the power of Congress alone, was equal to esta
blishing a bank, competent of creating a currency which shall pervade all parts
of the Union; the paper of the State banks cannot circulate beyond the bounds
of the particular States.
From the restrictions to the Government, contended for by the opposers of
the bill, he similized the constitution to a horse, finely proportioned in every
respect to the eye, and elegantly caparisoned, but deficient in one, and the
most essential requisite, that of ability to c a n y the owner to his journey’s
end; he had rather, he said, mount the old confederation, and drag on in the
old way, than be amused with the appearance of a Government so essentially
defective.
M r . M a d is o n o b se r v e d , that th e p resen t is a q u estio n w h ich ou gh t to be
c o n d u c te d w ith m o d era tio n an d c a n d o r , a n d , th e refo re, th e re is no o c ca sio n to
h a v e rec o u r se to th o se tragic r ep resen ta tio n s w h ich h ave b e e n a d d u c e d —
w arm th and p a ssio n sh o u ld be e x c lu d e d from th e d isc u s sio n o f a subject
w h ic h o u g h t to d ep en d on th e co o l d ic ta te s o f rea so n for it s d e c is io n .

Adverting to tne observations of M r. Smith, of South Carolina, “ that it
would be a deplorable thing for the Senate of the United States to have
fallen on a decision which violates the constitution,” he inquired, what does
the reasoning of the gentleman teud to show, but this, that, from respect to the
Senate, this House ought to sanction their decision? And from hence it will
follow, that the President of the United States ought, out of respect to both,
to sanction their joint proceedings; but he could, he said, remind the gentle
man of his holding different sentiments on another occasion.
M r. M. then enlarged on the exact balance ot equipoise, contemplat
ed by the constitution, to be observed and maintained between the several
branches of Government; and showed that, except this idea was preserved, the
advantages of different independent branches would be lost, and their separate
deliberations and determinations were entirely useless.
In describing a corporation, he observed, that the powers proposed to be
given, are such as do not exist antecedent to the existence of the corporation;
these powers are very extensive in their nature, and to which a principle of
perpetuity may be annexed.
He waived a reply to M r. Vining’s observations 011 the common law, (in
which that gentleman had been lengthy and minute, in order to invalidate
M r. Madison’s objection to the power proposed to be given to the bank, to
make rules and regulations, not contrary to law .) M r. Madison said the ques
tion would involve a very lengthy discussion; and other objects, more inti
mately connected with the subject, remained to be considered.
The power of granting charters, he observed, is a great and important power,
and ought not to be exercised without we find ourselves expressly authorized
to g r a n t them. H ere he dilated on the great and extensive influence that
incorporated societies had on public affairs in Europe. They are a powerful
machine, which have always been found competent to effect objects on princi
ples in a great measure independent o f the People.
He argued against the influence of the precedent to be established by the
bill; for, though it has been said that the charter is to be granted only for a
term of years, yet, he contended that granting the powers,on any principle, is
granting them inperpeluum —and assuming tnis right on the part of the Go
vernment, involves tne assumption of every power whatever.
N o tic in g the a rg u m en ts in favor o f th e b ill, h e sa id , it had b e e n observed
that th e “ G o v e r n m e n t n e c e s s a r ily p o ss e ss e s e v e r y p o w e r .” However true this
idea may b e in th e o r y , h e d e n ie d th at it a p p lied to the Government of the
United States.
Here he read the restrictive clause in the constitution, and then observed
that he saw no pass over this limit.

C H A R T E R OF 1791.

T he preamble to the constitution, said he, has produced a new mine ot
power; but this is the first instance he had heard of, in which the preamble has
been adduced, for such a purpose. In his opinion, the preamble only states
the objects of the confederation; and the subsequent clauses designate the ex
press powers by which those objects are to be obtained; and a mean is pro
posed through which to acquire those that may be found still requisite, more
fully to effect the purposes of the confederation.
I t is said, “ there is a field of legislation yet unexplored.” H e had often
heard this language, but, he confessed, he did not understand it. Is there,
said he, a single blade of grass—is there any property in existence in the
United States, which is not subject to legislation, either of the particular
States or ot the U nited States? H e contended that the exercise of this power,
on the part of the U nited States, involves, to all intents and purposes, every
power which an individual State may exercise. On this principle, he denied
the right of Congress to make use of a bank to facilitate the collection of taxes.
H e did not, however, adm it the idea, that the institution would conduce to
that object. The bank notes are to be equal to gold and silver, and conse
quently will be as difficult to obtain as the specie. By means of the objects
of trade on which gold and silver are employed, there will be an influx of
those articles; but paper being substituted, will fill^ those channels, which
would otherwise be occupied by the precious metals. T his, experience shows,
is the uniform effect of such a substitution.
The right of Congress to regulate trade, is adduced as an argument in favor
of this o f creating a corporation; but what has this bill to do with trade?
W ould any plain man suppose that this bill had any thing to do with trade?
H e noticed the observation respecting the utility ofbanks to aid the G overn
ment with loans. H e denied the necessity of the institution to aid the Go
vernm ent in this respect. G reat B ritain, he observed, did not depend on such
institutions—she borrows from various sources.
“ Banks, it is said, are necessary to pay the interest of the public debt;”
then they ought to be established in the places where that interest is paid; but
can any man say, that the bank notes will circulate a t par in Georgia? From
the example of Scotland, we know that they cannot be made equal to specie
remote from the place where they can be immediately converted into coin:
they must depreciate in case of a demand for specie; and if there is no moral
certainty that the interest can be paid by these bank bills, will the G overn
m ent be justified in depriving itself of the power of establishing banks in dif
ferent parts of the Union?
W e reason, said he, and often with advantage, from British models; but in
the present instance, there is a great dissimilarity of circumstances. T he
bank notes of G reat Britain do not circulate universally; to make the circum
stances parallel, it ought to have been assum ed, as a fact, that banks are es
tablished in various parts of G reat B ritain, a t which the interest o f the national
debt is paid; but the fact is, it is only paid in one place.
T h e clause of the constitution, which has been so often recurred to, and
which empowers Congress to dispose of its property, he supposed, referred
only to property left at the conclusion of the w ar, and has no reference to the
moneyed property of the U nited States.
T he clause which empowers Congress to pass all laws necessary, &c. ha8
been brotfght forward repeatedly by the advocates of the bill; he noticed the
several constructions ot this clause which had been offered. T h e conclusion
which he drew from the commentary of the gentlem an from M assachusetts,
[M r. G e r r y ] w a s, th a t Congress may do w hat they please; and recurring to
t h e opinion of th a t gentlem an, in 1787, he said, the powers ot the constitution
were then dark, inexplicable, and dangerous; but now, perhaps, as the result
ot experience, they are clear and luminous.
T h e constructions of the constitution, he asserted, which have been m ain-,
tained on this occasion, go to the subversion of every power whatever in the
several States; but we are told, for our comfort, that tne judges will rectify our

BANK OF T H E UN ITED ST A T E S.

mistakes- How are the judges to determine in the case? A re they to be guided
in their decisions by the rules of expediency?
.
I t has been asked, if those minute powers of the constitution were
thought to be necessary, is it supposable that the great and important power
on the table was not intended to be given? M r. Madison interpreted this cir
cumstance in a quite different way, viz:—I f it was thought necessary to spe
cify, in the constitution, those minute powers, it would follow that more im
portant powers would nave been explicitly granted, had they been contem
plated.
,
The W estern territory business, he observed, was a case aui g enens, ana
therefore cannot be cited with propriety. W e st Point, so often mentioned, he
said, was purchased by the United States pursuant to law, and the consent ot
the State of'New York is supposed, if it has not been expressly granted; but, on
any occasion, does it follow that one violation of the constitution is to be ju sti
fied by another?
T he permanent residence bill, he conceived, was entirely irrevalent to the
subject; but he conceived it might be justified on truly constitutional princi
ples. The act vesting in the President of the United States the power of re
movability has been quoted; he recapitulated, in a few words, his reasons for
being in favor of that bill.
T ne Bank of North America, he said, he had opposed, as he considered the
institution as a violation of the confederation. I he State of M assachusetts,
he recollected, voted with him on that occasion. T he Bank of N orth America
was, however, the child of necessity; as soon as the w ar was over, it ceased to
operate as to continental purposes. B ut, asked he, are precedents in war to
justify violations of private and State rights, in a time of peace? A nd did the
United States pass laws to punish the counterfeiting the notes of that bank?
They did not, being convinced of the invalidity of such a law; the bank th e re
fore took shelter under the authority of the State.
The energetic administration of this Government is said to be connected
with this institution. M r. Madison here stated the principles on which he
conceived this Government ought to be adm inistered, and added, other gen
tlemen may have had other ideas on the subject, and may have consented to
the ratification of the constitution, on different principles and expectations;
but he considered the enlightened opinion and affections of the People, the
only solid basis for the support of this Government.
M r. Madison then stated his objections to the several parts of the bill. T he
Jirst article he objected to, was the duration. A period of tw enty years, he
observed, was, to this country, as a period of a century in the history of other
countries—there was no calculating for the events which might take place.
He urged the ill policy of granting so long a term , from the experience of the
Government in respect to some treaties, which, though found inconvenient,
could not now be altered.
The different classes of the public creditors, he observed, were not all put
on an equal footing by this bill; but, in the bill for the disposal of the W estern
territory, this had been thoughtessential. T he holders of six per cent, securi
ties will derive undue advantages. Creditors at a distance, and the holders of
three per cent, securities, ought to be considered; as the public good is most
essentially promoted by an equal attention to the interest of all.
1 adm it, said he, that the Government ought to consider itself as the trustee
of the public on this occasion; and, therefore, should avail itself of the best dis
position of the public property.
In this vie w of the subject, he objected to the bill, as the public, he thought,
ought to derive greater advantages from the institution than those proposed.
In case of a universal circulation of the notes of the proposed bank, the profits
will be so great, that the Government ought to receive a very considerable
sum for granting the charter.
There are other defects in the bill, which render it proper and necessary, in
my opinion, that it should undergo a revision and amendment before it passes
into a law. T he power vested by the bill in the Executive, to borrow of the

C H A R T E R OF 1791.

bank, he thought was objectionable; and the right to establish subordinate
banks, he said, ought not to be delegated to any set of men under heaven.
T he public opinion has been mentioned; i f the appeal to the public opinion
is suggested with sincerity, we ought to let our constituents have an opportu
nity to form an opinion of the subject.
H e concluded by saying, he should move for the previous question.
M r. G e r r y rose to r e p l y to M r. M adison; b u t th e H ouse discovering a n
im patience to have the main question p u t, a fte r a few rem ark s, he w aived a n y
fu rth er observations.
M r. M a d i s o n having, in the conclusion of his speech, moved the previous
question, to wit: “ Shall the m ain question now be p u t? ” it was resolved i n
tne affirmative by a vote of 38 to 20.
And the main question being put, to wit: “ Shall the bill pass?” it was re
solved in the affirmative. Ayes 39, noes 20.
T hose who voted in the affirmative, are,
Messrs. Fisher Ames, o f Mass.
E g b ert Benson, N . Y.
Elias Boudinot, N . J
Benjam in Bourn, It. I.
L am bert Cadwallader, N . J.
George Clymer, P a.
Thom as Fitzsimmons, Pa.
W illiam Floyd, N . Y.
Abiel Foster, A . / / .
E lbridge Gerry, Mass.
Nicholas Gilman, N. H.
Benjam in Goodhue, Mass.
Thom as Hartley, Pa.
John Hathorn, N- Y.
Daniel Heister, P a .
Benjamin H untington, Conn.
John Law rence, N. Y.
George L eonard, Mass.
Sam uel Liverm ore, N . II.
P e te r M uhlenburg, Pa.

Messrs. George Partridge, Mass.
Jerem iah Van Rensselaer, N . Y.
Jam es Schureman, iV. J.
Thomas Scott, Pa.
Theodore Sedgw ick, Mass.
Joshua Seney, Md.
John Sevier, N. C.
R oger Sherm an, Conn.
P e ter Sylvester, N. Y.
Thom as Sinnickson, N , J.
W illiam Smith, Md.
William Smith, S. C.
John Steele, N. C.
Jonathan Sturges, Conn.
George T hatcher, Mass.
Jonathan Trum bull, Conn.
John Vining, Del.
Jerem iah W adsw orth, Conn.
H enry W yncoop, Pa.

Those who voted in the negative, are,
Messrs. John B aptist Ashe, N . C.
Abraham Baldwin, Geo.
Tim othy Bloodgood, iV. C.
John Brown, Va.
Edanus B urke, S. C.
Daniel Carroll, Md.
Benjamin Contee, Md.
Jonathan Grout, Mass.
W illiam B. Giles, Fa.
Jam es Jackson, Geo.

Messrs. R ichard Bland L ee, Fa.
Jam es Madison, Ju n . Fa.
G eorge Matthews, Geo.
A ndrew Moore, Fa.
Josiah P ark er, Fa.
Michael Jen ifer Stone,
T hom as T udor T u ck er, S. C.
A lexander W hite, Fa.
H ugh Williamson, JV. CA
^* Gj
^

Md.

So the bill w as passed, and it was
Ordered, T hat the C lerk of the.H ouse do acquaint the Senate therewith.

On the 14th of February, 1791, the bill was presented to the President for
his approbation; on the 25th, it received his signature, and became a law. T he
interval between these two dates was occupied by him in anxious and dili
gent inquiries into the constitutionality of the bill, and in the consideration
of his duty in relation to it. In these investigations, he called to his aid his
cabinet advisers, and received from some of them their w ritten opinions on
the subject. _ These have been obtained, and are here inserted, as well on ac
count of their own intrinsic importance, as of the illustration they afford of

BANK OF T H E UN ITED ST A T E S.

the caution and circumspection in the discharge of official duties of the truly
great man to whom they were addressed.
T h e opinions ot Edmund Randolph, Attorney General, and o f M r. Jeffer

son, Secretary of State, were, that the bill was unconstitutional, while that of
Alexander Hamilton, Secretary of the Treasury, was given on the opposite
side, and in support o f the bill.

OPINION OF EDMUND RANDOLPH,
Attorney General o f the United States, to President Washington.

T he Attorney General o f the United States, in obedience to the order of
the President ot the United States, has had under consideration the bill, en
titled *fcAn act to incorporate the subscribers to the Bank of the United
States,” and reports on it, in point o f constitutionality, as follows:

I t must be acknowledged, that, if any part of the bill does either encounter
the constitution, or is not warranted by it, the clause of incorporation is the
only one.
The legal properties of this corporation would be,
1st. T o have succession until the 4th ot M arch, 1811;
2d. T o purchase, receive, and retain, real and personal property, to an
amount not exceeding fifteen millions of dollars, including the capital stock;
3d. T o sell and dispose o f the property;
4th. T o sue, and be sued;
5th. To have a common seal; and
6th. To make by-laws, and do all acts appertaining to the corporation, u n
der certain restrictions prescribed in the act.
These properties, with different modifications in some instances, belong to
all corporations. Their importance strikes the eye.
T hat the power of creating corporations is not expressly given to Congress,
is obvious.
I f it can be exercised by them, it must be,
1st. Because the nature of the Federal Government implies it; or,
2d. Because it is involved in some of the specified powers of legislation; or,
3d. Because it is necessary and proper to carry into execution some of the
specified powers:
1st. T o be implied in the nature of the Federal Government, would beget
a doctrine so indefinite as to grasp every power.
Governments having no written constitution may, perhaps, claim a lati
tude of power not always easy to be determined. Those which have written
constitutions are circumscribed by a ju st interpretation of the words contain
ed in them. N ay, farther; a legislature, instituted even by a w ritten consti
tution, but without a special demarcation of powers, may, perhaps, be pre
sumed to be left at large, as to all authority which is communicable by the
people, and does not affect any of those paramount rights, which a free people
cannot be supposed to confide even to their representatives. Essentially
otherwise is the condition of a legislature whose powers are described. An
example of the former, is in the State Legislatures; of the latter, in the Legis
lature of the Federal Government, the characteristic of which has been con
fessed by Congress, in the twelfth amendment, to be, that it claims no pow
ers which are not delegated to it.
This last observation straitens the federal powers, and opposes an opin
ion, not unpatronised, that Congress may exercise all authority to which.the
States are individually incompetent.
If any subject of government, from which the States are not excluded by
the constitution, be beyond their jurisdiction within their own limits, let it be
shown: it cannot be easily conceived.
But what if a subject should really exist? Is the argument less conclusive
to say, that the States must retain it, because it is not given to the Federal

C H A R TE R OF 1791.

Government, than that the latter, although lim ited in itself, possesses it, be
cause it is not within the verge of a State constitution? W h ile , on the other
hand, it ought not to be denied that the Federal G overnm ent superintend stlie
general welfare of the S tates, it ought not to be forgotten, on th e other, that
it superintends it according to the dictates of the constitution.
T ne opinion above alluded to can have only one other object, nam ely, th at
every institution to which a single State can give efficacy only within its own
boundaries, devolves on Congress. B u t the extravagance of such a position, is
manifested by a single circumstance, that the cutting of canals through two
or more States, at tne will of Congress, is one of its least consequences.
2 d. W e ask, then, in the second place, whether, upon any principle of fair
construction, the specified powers of legislation involve the power of grant
ing charters of incorporation? W e say charters of incorporation, without con
fining the question to the bank; because the admission of it in that instance,
is an admission of it in every other, in which Congress may think the useof it
equally expedient.
T here is a real difference between the rule of interpretation, applied to a
law and a constitution. T he one comprises a summary of m atter, for the
detail of which numberless laws will be necessary; the other is the very d e
tail. The one is, therefore, to be construed with a discreet liberality, the
other, with a closer adherence to the literal meaning.
But, when we compare the modes of construing a State and the Federal
constitution, we are admonished to be stricter with regard to the latter, be
cause there is a greater danger of error in defining partial, than general
powers.
T he rule, therefore, for interpreting the specified powers, seems to be, that,
as each of them includes those details, which properly constitute the whole
of the subject to w'hich the power relates, the details themselves must be
fixed by reasoning. And the appeal may, on this occasion, be made to com
mon sense and common language.
Those powers, then, which bear any analogy to that of incorporation, shall
be examined separately in their constituent parts; and afterw ards, in those
traits which are urged to have the strongest resemblance to the favorite power.
F irst. Congress have power to lay and collect taxes, &c. T he heads of this
power are,
1st. To ascertain the subjects of taxation, &c.
2 d. T o declare the quantum of taxation, &c.
3d. T o prescribe the mode of collection; and
4th. T o ordain the m anner of accounting for the taxes, &c.
Second. Congress have also power to borrow money on the credit of the
United States.
T he heads of this power, are,
1st. T o stipulate a sum to be lent;
2 d. T o stipulate an interest, or no interest, to be paid; and
3d. T o stipulate the tim e and manner of repaym ent, unless the loan be
placed on an irredeemable fund.
T hird. Congress have also power to regulate commerce with foreign nations,
among the several States, and with the Indian tribes.
T he heads of this power, with respect to foreign nations, are,
1 st. _T o prohibit them or their commodities from our ports;
2 d. T o impose duties on them, where none existed before, or to increase
existing duties on them;
3d. T o subject them to any species of custom house regulations; or,
4th. T o grantthem any exemptions or privileges which policy may suggest.
T h e heads of this power, with respect to the several States, are little more
than to establish the fo r m s of commercial intercourse between them, and to
keep the prohibitions which the constitution imposes on that intercourse, u n
diminished in their operation; that is, to prevent taxes on imports or exports;
preferences to one port over another, by any regulation of commerce or reve

BANK OF T H E U N ITED ST A T E S.

nue; and duties upon the entering or clearing of the vessels of one State in
the ports of another.
T h e heads of this power, with respect to Indian tribes, are,

1st. T o prohibit the Indians from coming into, or trading within, the United
States;
2 d. T o adm it them with, or without, restrictions;
3d. T o prohibit citizens of the United States from trading with them; or,
4th. To permit with, or without, restrictions.
Fourth. Congress have also power to dispose ot, and make all needtul rules
and regulations respecting, the territory, or other property belonging to the
U nited States.
T he heads of this power, are,
_
.
1st. T o exert an ownership over the territory ot the U nited States, which
may be properly called the property of the United States, as is the W estern
territory, and to institute a Government therein; or,
2d, T o exert an ownership over the other property of the United States.
This property may signify.
1st. Personal property of the United States, howsoever acquired; or,
2 d.

Real property, not aptly denominated territory, acquired by cession or
otherwise.
It cannot signify,
1st.
2 d.

Debts due from th eU n ited States;
N or money arising from the sources of revenue pointed o u tm the con
stitution. T he disposal and regulation of money, is the final cause for raising
it by taxes, &c.
F ifth. T he preamble to the constitution has also been relied on as a source
of power.
To this, it will be here rem arked, once for all, that the preamble, if it be
operative, is a full constitution of itself, and the body of the constitution is
useless; but that it is declarative only of the views of the convention, which
they supposed would be best fulfilled by the powers delineated; and that such
is the legitimate nature of preambles.
_
W ith this analysis of the foregoing specified powers, compare each of the
corporate powers, and where is tne similitude? I t lies, say the advocates of
the bill, in the power to lay and collect taxes, &c.; because it facilitates the
payment of them: in that of borrowing money, because it creates an ability to
lend; in that of regulating commerce, because it increases the medium of cir
culation, and thus encourages activity and industry. In that of disposing and
regulating property, because the contributions and the interest of the United
States in the bank, are property of the United States. Of each of these rea
sons, something will be said in their order.
T he incorporation of a bank can facilitate the payment of taxes, only by
creating a faculty to pay, or by supplying a deficient medium, or by rendering
the transportation of money to the seat of government more convenient. But,
to lay and collect taxes, is, in fact, to demand and receive a public debt,
resting the mode of procuring the money on the resources of the debtors; and,
as to its transportation, surely there are many other vehicles besides bank
bills.
To borrow money, presupposes the accumulation of a fund to be len t; and
is secondary to the creation of an ability to lend.
By regulating commerce, in order to increase the medium of circulation,
cannot be intended any of the commercial powers designated above; these
being very remote from the incorporation of a bank. N or can it be imagined,
that it is intended to reach the emission of paper money. WThat construction
remains, by which to regulate commerce, can increase the medium? Only the
emission of coin, which is licensed in terms by another clause.
To dispose of, or to regulate, property, even bank stock itself, is utterly
distinct from the incorporation of a bank: for the contributions on w h i c h the
bank stock arises, go upon the principle, that a bank already exists; how else
can contributions be made to itr

C H A P T E R OF 1791.

B a t, in truth, the serious alarm is in the concentered force of these senti
m ents. I f the laying and collecting of taxes brings with it every thing which,
in the opinion of Congress, may facilitate the paym ent of taxes; if to borrow
money sets political speculation loose, to conceive what may create an ability
to lend; if to regulate commerce is to range in the boundless mazes of pro
je c ts for the apparently best scheme to invite from abroad, or to diffuse at
home, the precious m etals; if to dispose of, or to regulate, property of the
United States, is to incorporate a bank, that stock may be_ subscribed to it by
them, it may, without exaggeration, be affirmed, that a similar construction on
every specified federal power, will stretch the arm of Congress into the whole
circle of State legislation.
The general qualities of the Federal Government, independent of the con
stitution and the specified powers, being thus insufficient to uphold the incor
poration of a bank, we come to the last inquiry, which has been already anti
cipated, w hetherit be sanctified by the power to make all laws, which snail be
necessary and proper lor carrying into execution the_ powers vested by the
constitution. T o be necessary is to be incidental, or, in other words, may be
denom inated the natural means of executing a power.
T he phrase “ and proper,” if it has any meaning, does not enlarge the powers
o f Congress, but ratlier restricts them. For no power is to be assumed under
the general clause, but such as is not only necessary, but proper, or perhaps
expedient also. But as the friends to the bill ought not to claim any advantage
from this clause, so ought not the enemies to it, to quote the clause as having
a restrictive effect. Both ought to consider it as among the surplusage which as
often proceeds from inattention as caution.
However, let it be propounded as an eternal question to those who build new
powers on this clause, whether the latitude of construction, which they arrogate
will not term inate in an unlimited power in Congress.
In every respect, therefore, under which the A ttorney General can view
the act, so far as it incorporates the bank, he is bound to declare his opinion
to be against its constitutionality.
EDM UND RAN D OLPH .
February 12/A, 1791.
ATTORNEY GENERAL’S OPINION.
No. 2.
T h e A ttorney General holding it to be his duty to address to the P resident
o f the United States, as the grounds of an official opinion, no arguments, the
tru th of which he does not acknowledge, has reserved for this purpose several,
topics, which have more or less influenced the friends and enemies of the bank
bill; and which ought, therefore, to be communicated to the President.
1st. T he enemies of the bill nave contended that a rule of construction,
adverse to the power of incorporation, springs out of the constitution itself;
that, after the grant of certain powers to Congress, the constitution, as if cau
tious against usurpation, specially grants several other powers, more akin to
those before given, than the incorporation of a bank is to any of those from
which it is deduced. T his position, they say, has been exemplified in four
instances:
J. A power is given to regulate commerce; and yet is added a power to es
tablish uniform laws on the subject of bankruptcies throughout the United
S tates; to fix the standard of weights and measures; and to establish post
offices and post roads.
2. A power is given to coin money; and y et is added a power to regulate
the value thereof, and of foreign coin; and to provide for the punishm ent of
counterfeiting the current coin of the U nited States.
3. A power is given to declare war; and yet is added a power to grant le t
ters of marque and reprisal; to make rules concerning captures on land and
12

BANK OF T H E U N ITED ST A T E S.

w ater; to raise and support armies; to provide and maintain a navy; and' to
make rules for the government and regulation of the land and naval forces.
4.
A power is given to provide for calling forth the militia, to execute the
laws of the Union; and yet is added a power to call them forth to suppress
insurrections.
W hosoever will attentively inspect the constitution will readily preceive
the force of what is expressed in the letter of the convention, “ T h at the con
stitution was the result of a spirit of amity and mutual deference and conces
sion.” T o argue, then, from its style or arrangement, as being logically exact,
is, perhaps, a scheme of reasoning not absolutely precise.
But. if the constitution were ever so perfect, considered even as a composi
tion, tne difficulties which the above doctrine has stated maybe solved by the
following remarks:
These similar powers, on which stress is laid, are either incidental, or sub
stantive, that isj independent powers.
If they be incidental powers, and the conclusion be, that, because some in
cidental powers are expressed, no others are admissible, it would not only be
contrary to the common fonns of construction, but would reduce the present
Congress to the feebleness of the old one, which could exercise no powers not
expressly delegated. So that the advocates for the power of incorporation, on
the principle ol incidentality to some specified power, would, notwithstanding
this supposed rule of interpretation, be as much at liberty to insist on its being
an incidental power as ever.
I f these similar powers be substantive and independent, (as on many occa
sions they are, that is, as they can be conceived to be capable of being used,
independently of what is called the principal power,) it ought not to be inferred
that they were inserted for any other purpose, than to bestow an independent
power, where it would not otherwise have existed.
T he only remaining signification, which the doctrine now controverted can
have, is, that the incorporation of a bank, being more wide from a connexion
with the specified powers of legislation than the additional ones were from
the principal powers, to which they were supposed to belong, the power of in
corporation being omitted, or rather not specially mentioned;, cannot be assum
ed. Even this answer is not adequate to those, who derive the power of incor
poration from the nature of the Federal Government.
Hence the rule contended for by the enemies of the bill is defective every
way. I t would be still more so with respect to those (if any such there be)
who construe the words, “necessary and proper,” so as to embrace every ex
pedient power.
2d. An appeal has been also made by the enemies of the bill to what passed
in the federal convention on the subject. B ut ought not the constitution to be
decided on by the import of its own expressions? W hat may not be the conse
quence if an almost unknown history should govern tlie construction?
3d. The opinions too of several respcetable characters have been cited, as de
livered in the state conventions. As these have no authoritative influence, so
ought it to be remembered* that observations were uttered by the advocates
of the constitution, before its adoption, to which they will not, and, in many
eases, ought not to adhere.
4th. On the other hand, the friends to the bill have relied on the congressional
actsas to W e st P oint, the goyernment of the W estern T e rrito ry , and the
power of removal from office given to the PresidentT he two first are within express powers, as will occur, by adverting to the
power to exercise authority over places purchased for forts, &c. and to the
power to dispose of, and make needful rules and regulations respecting the
property of the United States. T he last is a point with a great weight of rea
son on each side. I f it be founded on the general nature ol executive authoity,
the power is probably not tenable, without resorting to the doctrines of the
friends to the bill. But it appears to be a power not specifically given to any
person, (except on an impeachment,) and may, therefore, incidentally belong
to Congress to confer on the President. However, if this step be an error, it
is never too late to correct it.

C H A R TE R OF 1791.

5th. I t has been also pretended, that even the infirm old Congress incorpo
rated a bank; and can a less power be presumed to be vested in the Federal
G overnm ent, which has been formed to remedy their weakness? T his argu
ment is so indefinite, the tim e of the incorporation was so pressing, and the
States had such an unlimited command over Congress and their acts, that
tha public acquiescence ought not to be the basis of such a power under the
present circumstances.
6th. Congress, it is ftirther said, may provide for the general welfare, and this
includes the power o f incorporation: but they are to provide for the general
welfare in laying and collecting taxes. Is the incorporation of a banlt a tax
bill? T he meaning of the power, taken together, seems to be, that Congress
may lay taxes for the purpose of expending money for the public weKare, even
to subscribe it to a bank. B ut is this like the creation of a bank? It implies
that a bank has been already created.
7th. It has been also asserted, that Congress have an exclusive legislation at
the Seat of G overnm ent This will not be true, until they go to the place of the
perm anent residenceT he A ttorney General has not collected any other informatioun pon this sub
je c t, although more may, perhaps, have been said by the partisans for and
against the bank, than is here noticed
ED M U ND R A N D O LPH .
February 12/ A, 1791.

OPIN IO N OF TIIOM AS JE F F E R S O N , SE C R E TA R Y OF S T A T E , ON T H E
SAME SU B JE C T .

T he bill for establishing a national bank undertakes, among other things,
1. T o form the subscribers into a corporation.
2. T o enable them, in their corporate capacities, to receive grants of land;
and so far is against the laws of m ortm ain. *
3. T o make alien subscribers capable of holding lands; and so far is
against the laws of alienage.
4. T o transm it these lands, on the death of a proprietor, to a certain line
of successors; and so far changes the course of descents,
5. T o put the lands out o f the reach of forfeiture or escheat; an d so far is
against the laws of forfeiture and escheat.
6. T o transm it personal chattels to successors, in a certain line; and so far
is against the laws of distribution.
7. T o give them the sole and exclusive right of banking under the national
authority; and so far is against the laws of monopoly.
8. T o communicate to them a power to make laws paramount to the laws
of the S tates; for so they m ust be construed, to protect the institution from
the control of the S tate Legislatures; and so, probably, they will be con
strued.
I consider the foundation of the constitution as laid on this ground, that,
“ all powers not delegated to the U nited States by the constitution, nor
prohibited by it to the States, are reserved to the States, or to the people.”
(12th am endm ent.) T o take a single step beyond the boundaries thus
specially draw n around the powers of Congress, is to take possession of a
boundless field of power, no longer susceptible of any definition.
T he incorporation of a bank, and other powers assumed by this bill, have
not, in m y opinion, been delegated to the U nited States by the constitution:
•T h o u g h the constitution controls th e laws o f mortmain, so far as to perm it Congress
itself to hold lands for certain purposes, y e t not so far as to perm it them to com m uni
cate a similar rig h t to other corporate bodies.

BANK OF T H E U N ITED ST A T E S .

I. T hey are not among the powers specially enum erated; for these arer
1. A power to lay taxes for the purpose of paying tire debts of the United
S tates; b u t no debt is paid by this bill, nor any tax laid. W ere it a bill to
raise money, its origination in the Senate would condemn it by the constitution.
2 . “ To borrow money.” B ut this bill neither borrows money, nor insures
the borrowing it. T he proprietors of the bank will be just as free, as any other
money holders, to lend, or not to lend, their money to the public: the operation
proposed in the hill, first to lend them two millions, and then borrow them
back again, cannot change the nature of the latter act, which will still be a
paym ent, and not a loan, call it by whatever name you please.
3. “ T o regulate commerce with foreign nations, and among the States,
and with the Indian tribes.” T o erect a bank, and to regulate commerce,
are very different acts. H e who erects a bank, creates a subject of commerce
in its bills; so does he, who makes a bushel of wheat, or digs a dollar out of
the mines; yet neither of these persons regulates commerce thereby. T o
make a thing which may he bought and sold, is not to prescribe regulations for
buying and selling. Besides, il this was an exercise of the power of regulating
commerce, it would be void, as extending as much to the internal commerce of
every State, as to its external; for the power given to Congress by the constitu
tion does not extend to the internal regulation of the commerce ot a S tate, (that
is to say, of ihe commerce between citizen and citizen,) which remains exclu
sively with its own legislature; but to its external commerce only. T h at is to
say, its commerce with another State, or with foreign nations, or with the Indian
tribes: accordingly the bill does not propose this measure as a “ regulation of
trade,” but, as “productive of considerable advantage to trad e ;” still less are
these powers covered by any other of the special enumerations.
II.
Nor are they within either of the general phrases, which are the two
following:
1 . ‘‘T o lay taxes to provide for the general welfare of the United S tates;” '
that is to say, to lay taxes/or the purpose of providing for the general welfare:
for the laying of taxes is the pou-er, and the general welfare the purpose for
which the power is to be exercised. They are not to lay taxes ad libitum ,
fo r any purpose they please, but only to pay the debts, or provide fo r the
welfare i f the Union. In like m anner, they are not to do an y thing- they
please to provide for the general welfare, but only to lay taxes for that pur
pose. T o consider the latter phrase,not as describing the purpose of the first,
but as giving a distinct and independent power to do any act they please,
which might be for the good of the Union, would render all the preceding
and subsequent enumerations of power completely useless: it would reduce
the whole instrum ent to a single phrase, that of instituting a Congress with
power to do whatever would be for the good of the United S tates; and, as
they would be the sole judges of the good or evil, it would be also a power to
do whatever evil they pleased. It is an established ru fe o f construction,
where a phrase will bear either of two meanings, to give it that which will
allow some meaning to the other parts of the instrum ent, and not that which
would render all the others useless. Certainly t o such universal power was
meant to be given to them. I t was intended to lace them up straitly within
the enumerated pow;ers; and those without which, as means, those powers
could r o t be carried into effect. I t is known that the very power now propos
ed as a means, was rejected as an end by the convention which formed the
constitution : a proposition was made to them to authorize Congress to open
canals, and an amendatory one to empower them to incorporate; but the
whole was rejected, and one of the reasons of rejection urged in the debate
was, that then they would have power to erect a bank, which would render
the great cities, where there were prejudices or jealousies on this subject, ad
verse to the reception of the constitution.
2 . T he second general phrase is, “ to make all laws necessary and proper
for carrying into execution the enumerated powers.” But they can all be
carried into execution without a bank. A bank, therefore, is not necessary,
and* consequently, not authorised by this phrase.

C H A R T E R OF 1791.

It has been much urged, that a bank will give great facility, or convenience,
in the collection of taxes. Suppose this were true, yet the constitution allows
only the means which are “ necessary,” not those which are merely con
venient for effecting the enum erated powers. I f such a latitude of construc
tion be allowed to this phrase, as to give any non enum erated power, it will
go to every one; for there is no one, which ingenuity may not torture into a
convenience, in some w ay or other, to some one of so long a list of enum erated
powers: it would swallow up all the delegated powers, and reduce the whole
to one phrase, as before observed. Therefore it was that the constitution re
strained them to the necessary means; that is to say, to those means, without
which the grant of the power would be nugatory.
But let us examine this convenience, and see what it is. T he report on the
subject (page 3) states the only general convenience to be the preventing the
transportation and re-transportation of money between the States a n d the
treasury, (for I pass over the increase of circulating medium, ascribed to it as
a m erit, and which, according to my ideas of paper money, is clearly a de
merit.) Every State will have to pay a sum ot tax money into the treasury;
and the treasury will have to pay, in every State, a part of the interest on the
ublic debt, and salaries to the officers of Government resident in that State,
n most of the States there will still be a surplus of tax-money to come up to
the Seat of Government for the officers residing there. T he payment ot in
terest and salary in each State, may be made by treasury orders on the State
collector. This will take up the greater part of the money he has collected
for his State, and, consequently, prevent the great mass of it from being
drawn out of the State. I f there be a balance of commerce in favor of th at
State against the one in which the Government resides, the surplus of taxes
will be rem itted by the bills of exchange drawn for th at commercial balance;
and so it m ust be if there was a bank. B ut if there be no balance of com
merce, either direct or circuitous, all the banks in the world could not bring
up th e surplus of taxes, but in the form of money. T reasury orders, then, and
bills of exchange, may prevent the displacement of the main mass of the money
collected, without the aid of any bank; and where these fail, it cannot be
prevented, even with that aid.
Perhaps, indeed, bank bills may be a more convenient _vehicle than trea
sury orders; but a little difference in the degree of convenience cannot consti
tu te the necessity, which the constitution makes the ground for assuming any
non enum erated power.
Besides, the existing banks will, without a doubt, enter into arrangements
for lending their agency; and the more favorably, as there will be a competi
tion among them tor it; whereas the bill delivers us up bound to the national
bank, who are free to refuse all arrangem ent, but on their own term s, and
the public not free, on such refusal, to employ any other bank. T h at of
Philadelphia, I believe, now does this business by their post notes, which by
an arrangement with the treasury are paid by any State collector to whom
they are presented. This expedient alone suffices to prevent the existence of
that necessity, which may justify the assumption of a non enum erated power
as a means for carrying into effect an enum erated one. T he thing may be
done, and has been done, and well done, without this assumption: therefore,
it does not stand in that degree of necessity, which can honestly justify it.
It m aybe said that a bank, whose bills would have currency all over the
States, would be more convenient, than one, whose currency i» limited to a
single State. So it would be still more convenient that there should be a
bank, whose bills should have a currency all over the world; but it does not
follow, from this superior conveniency, that there exists any where a power
to establish such a bank, or that the world may not go on very well without it.
Can it be thought that the constitution intended, that, for a shade or two of
convenience, more or less, Congress should be authorized to break down the
most ancient and fundamental laws of the several States, such as those against
mortmain, the laws of alienage, the rules of descent, the acts of distribution,
the laws of escheat and forfeiture, the laws of monopoly? Nothing, but a n e

BANK OF T H E U N ITED ST A T E S .

cessity invincible by any other means, can justify such a prostration of laws,
which constitute the pillars of our whole system of jurisprudence. W ill
Congress be too strait-laced to carry the constitution into honest effect, unless
they may pass over the foundation laws of the State Governments, for the
slightest convenience to theirs?
T he negative of the President is the shield provided by the constitution,
to protect against the invasions of the Legislature: 1st. T he rights of the E x
ecutive. 2d. O f the Judiciary. 3d. Of the States and State Legislatures.
T he present is the case of a right remaining exclusively with the States, and
is consequently, one of those intended by tne constitution to be placed under
his protection.
.'
.
I t must be added? however, that, unless the President’s mind, on a view of
every thing, which is urged for and against this bill, is tolerably clear that it
is unauthorized by the constitution; it the pro and the con hang so even as to
balance his judgment, a just respect for the wisdom of the Legislature, would
naturally decide the balance in favor of their opinion: it is chiefly for cases,
where they are clearly misled by error, ambition, or interest, that the consti
tution has placed a check in the negative of the President.
T IIO M A S JE F F E R S O N .

February 15, 1791.

From President Wushington to Alexander Hamilton, Secretary o f the Treasury.
P

h il a d e lph ia ,

February 16, 1791.

“ An act to incorporate the subscribers to the Bank of the United
States” is now before me for consideration.
The constitutionality of it is objected to. It, therefore, becomes more p ar
ticularly my duty to examine the ground on which the objection is built. A s
a mean of investigation, I have called upon the A ttorney General of the United
States, in whose Tine it seemed more particularly to be, for his official exami
nation and opinion. His report is, that the constitution does not w arrant the
act. I then applied to the Secretary of State for his sentiments on this sub
ject. These coincide with the Attorney G eneral’s; and the reasons for their
opinions having been submitted in writing, I now require, in like manner,
yours, on the validity and propriety of the above recited act: and that you
may know the points, on which the Secretary of State and the Attorney
General dispute the constitutionality of the act, and that I may be fully
possessed ot the arguments fo r and against the measure, before I express
any opinion of my own, I give you an opportunity of examining and answ er
ing the objections contained in the enclosed papers. I require the return of
them, when your own sentiments are handed to me, (which I wish may be as
soon as is convenient;) and, further, that no copies of them be taken, as it is
for my own satisfaction they have been called for.
Sir :

To the Secretary o f the Treasury.

G. W A S H IN G T O N .

onday.

The Secretary of the Treasury presents his respects to the President of the
U nited States, to request his indulgence for not having yet furnished his rea
sons on a certain point. He has been ever since sedulously engaged in it, but
finds it will be. impossible to complete before Tuesday evening, or W ednes
day m orning early. H e is anxious to give the point a thorough examination.

CHA RTER OF 1791.
P h il a d e l p h ia , 23d

February,

1794.

The Secretary of the Treasury presents his respects to the President, and
sends him the opinion required, which occupied him the greatest part of last
night.
The bill for extending the time of opening subscriptions passed yesterday,
unanimously, to an order for engrossing.

OPINION O F A LE X A N D E R HA M ILTO N, ON T H E CO N STITU TIO N A LITY
O F A N A TIO N A L BANK.

The Secretary of the Treasury having perused, with attention, the papers
containing the opinions of the Secretary of State and Attorney General, con
cerning the constitutionality of the bill for establishing a national bank, pro
ceeds, according to the order of the President, to submit the reasons which
have induced him to entertain a different opinion.
It will naturally have been anticipated that, in performing this task, he
would feel uncommon solicitude. Personal considerations alone, arising
from the reflection that the measure originated with him, would be sufficient
to produce it; the sense which he has manifested of the great importance o f
such an institution, to the successful administration of the department under
his particular care, and an expectation of serious ill consequences to result
from a failure of the measure, do not permit him to be jvithout anxiety on
public accounts. But the chief solicitude arises from a firm persuasion, that
principles of construction, like those espoused by the Secretary o f State and
Attorney General, would be fatal to the just and indispensable authority of
the United States.
In entering upon the argument, it ought to be premised, that the objections
of the Secretary of State and Attorney General, are founded on a general de
nial of the authority of the United States to erect corporations. The latter,
indeed, expressly admits, that, if there be any thing in the bill which is not
warranted by the constitution, it is the clause of incorporation.
Now, it appears to the Secretary of the Treasury, that this general p rin ci
ple is inherent in the very definition of government, and essential to every
step of the progress to be made by that of the United States; namely, that
every power vested in a government, is, in its nature, s o v e r e i g n , and ineludes, byforce ofthe term , a right to employ all the means requisite, and
fairly applicable, to the attainment of the ends of such powec, and which are
not precluded by restrictions and exceptions specified in the constitution, or
not immoral, or not contrary to the essential ends of political society.
This principle, in its application to government in general, would be ad
mitted as an axiom; and it will be incumbent upon those who may incline to
deny it, to prove a distinction, and to show, that a rule which, in the general
system of things, is essential to the preservation of the social order, is inap
plicable to the United States.
The circumstance, that the powers o f sovereignty are, in this counti-y, d i
vided between the N ational and State Governments, does not afford the d is
tinction required. It does not follow from this, that each o f the portions o f
power delegated to the one or to the other, is not sovereign with regard to its
proper objects. It will only follow from it, that each has sovereign power as
to certain things, and not as to other things. To deny that the Government
of the United States has sovereign power as to its declared purposes and trusts,
because its power does not extend to all laws, would be equally to deny that
the State Governments have sovereign power in any case, because their power
does not extend to every case. The tenth section of the first article o f the
constitution, exhibits a long list of very important things which they may
not do; and thus the United States would furnish the singular spectacle o f

BANK OF T H E U N ITED ST A T E S.

a political society without sovereignty; or of a people governed without
government.
If it would be necessary to bring proof to a proposition so clear, as that
which affirms that the powers of the Federal Government, as to its ob
jects, are sovereign, there is a clause of its constitution which would be deci
sive: it is that which declares, that the constitution, and the laws of the Unit
ed States made in pursuance of it, and all treaties made, or which shall be
made, under their authority, shall be the supremelaw of the land. Thepower
which can create the supreme law of the land, in any case, is doubtless sove
reign as to such case.
This general and indisputable principle puts at once an end to the abstract
question, whether the United States have power to erect a corporation; that
is to say, to give a legal or artificial capacity io one or more persons, distinct
from the natural? For it is unquestionably incident to sovereign power, to
erect corporations; and, consequently, to that of the United States, in rela
tion to the objects intrusted to the management of the Government.
The difference is this: where the authority of the Government is general, it
can create corporations in all cases; where it is confined to certain branches
of legislature, it can create corporations only in those cases.
Here, then, as far as concerns the reasonings of the Secretary of State and
the Attorney General, the affirmative of the constitutionality ot the bill might
be permitted to rest. It will occur to the President, that uie principle here
advanced has been untouched by either of them.
Nevertheless, for a more complete elucidation of the point, the arguments
which they had used against the power of the Government to erect corpora
tions, however foreign they are to the great fundamental rule which has been
stated, shall be particularly examined. And after showing that they do not
tend to impair its force, it shall also be shown, that the power of incorpora
tion, incident to the Government in certain cases, does fairly extend to the
particular case which is the object of the bill.
The first of these arguments is, that the foundation of the constitution is
laid on this ground, “ that all powers, not delegated to the United States by
the constitution, nor prohibited to it by the States, are reserved for the States
or to the People;” whence, it is nieant to be inferred, that Congress can, in
no case, exercise any power not included in those, nor not enumerated in the
constitution. And it is affirmed, that the power of erecting a corporation is
not included in any of the enumerated powers.
The main proposition here laid down, in its true signification, is] not to be
uestioned. It is nothing more than a consequence of this republican maxim,
lat all government is a delegation of power; but how much is delegated in
each case, is a question of fact, to be made out by fair reasoning and con
struction, upon the particular provisions of the constitution—taking as guides,
the general principles and general ends of government
It is not denied that there are implied, as well as express powers; and that
the former are as effectually delegated as the latter: and, for the sake of ac
curacy, it shall be mentioned, that there is another class of powers, which
may be properly denominated resulting powers. It will not be doubted, that,
if the United States should make a conquest of any of the territories of its
neighbors. they would possess sovereign jurisdiction over the conquered ter
ritory- This would rather be a result from the whole mass of the powers of
the Government, and from the nature of political society, than a consequence
of either of the powers specially enumerated.
But, be this as it may, it furnishes a striking illustration of the general doc
trine contended for. It shows an extensive case, in which a power of erect
ing corporations is either implied in, or would result from, some, or all of the
powers, vested in the National Government. The jurisdiction acquired over
such conquered territory, would certainly be competent to every species of
legislation.
To return: It is conceded, that implied powers are to be considered as de
legated equally with express ones.

C H A R TE R OF 1791.

Then it follows, that? as a power of erecting a corporation may as well be
implied as any other thing, it may as well be employed as an instrum ent or
mean of carrying into execution any of the specified powers, as any other in
strum ent or mean whatever. T he only question m ust be, in this, as in every
other case, whether the mean to be employed, or, in this instance, the corpo
ration to be erected, has a natural relation to any of the acknowledged objects
or lawful ends of the Government? T hus, a corporation may not be erected
by Congress for superintending the police of the city of Philadelphia, because
they are not authorized to regulate the police of that city. B ut one may be
erected in relation to the collection of taxes, or to the trade with foreign coun
tries, or to the trade between the States, or with the Indian tribes; because it
is the provjnce of the Federal Government to regulate those objects; and be
cause it is incident to a general sovereign or legislative power to regulate a
thing, to employ all the means which relate to its regulation, to the best and
greatest advantage.
A strange fallacy seems to have crept into the manner of thinking and rea
soning upon the subject. Imagination appears to have been unusually busy
concerning it. A 11 incorporation seems to have been regarded as some great
independent substantive thing; as a political engine, and of peculiar magni
tude and moment: whereas it is truly to be considered as a quality, capacity,
o r mean to an end. T hus, a mercantile company is formed with a certain
capital, for the purpose of carrying on a particular branch of business. H ere
the business to be prosecuted is the end. T he association, in order to form
the requisite capital, is the primary mean. Suppose that an incorporation
were added to this; it would only be to add a new quality to that association;
to give it an artificial capacity, by which it would be enabled to prosecute the
business with more safety and convenience.
T hat the importance of the power of incorporation has been exaggerated,
leading to erroneous conclusions, will further appear, from tracing it to its
origin. T he Roman law is the source of it: according to which, a voluntary
association of individuals, at any tim e, or for any purpose, was capable of
producing it. In England, whence our notions ot it are immediately borrow
ed , it seems part of the executive authority; and the exercise of it has been
often delegated by that authority; whence, therefore, the ground of the sup
position, that it lies beyond the reach of all those very im portant portions of
sovereign power, legislative as well as executive, which belong to tne Govern
m ent of the United States.
T o this mode of reasoning, respecting the right of employing all the means
requisite to the execution of the specified powers of the G overnm ent, it is ob
jected, that none but necessary and proper means are to be employed; and the
Secretary of State m aintains, that no means are to be considered as neces
sary but those without which the grant of the power would be nugatory.
N ay, so far does he go in his restrictive interpretation of the word, as even to
make the case of necessity, which shall w arrant the constitutional exercise of
the power, to depend on casual and temporary circum stances; an idea which
alone refutes the construction. T he expediency of exercising a particular
power, at a particular tim e, m ust, indeed, depend on circum stances; b ut the
constitutional right of exercising it m ust be uniform and invariable, the same
to-day as to-morrow.
A ll the argum ents, therefore, against the constitutionality of the bill, derived
from the accidental existence of certain State banks, institutions which hap
pen to exist to-day, and, for aught that concerns the Government of the U n it
ed States, may disappear to-morrow, m ust not only be rejected as fallacious,
but must be viewed as dem onstrative that there is a radical source of error in
the reasoning.
I t is essential to the being of the National G overnm ent, that so erroneous a
conception of the meaning of the word necessary should be exploded.
I t is certain, that neither the grammatical, nor popular sense of the term ,
requires that construction. According to both, necessary often means no
more than needful, requisite, incidental, useful, or conducive to. Itis a c o m 13

BANK OF T H E U N ITED ST A T E S.

mon mode of expression to say, that it is necessary for a government or a
person to do this or that thing, when nothing more is intended or under
stood than that the interest ot the Government or person require, or will
be promoted by, the doing of this or that thing. The imagination can be at no
loss for exemplification of the use of the word in this sense.
And it is the true one in which it is to be understood, as used in the con
stitution. T he whole turn of the clause containing it, indicates that it wasthe intent of the convention, by that clause, to give a liberal latitude to the
exercise of the specified powers. T he expressions have a peculiar compre
hensiveness. They are, to make all laws necessary and proper for carrying
into execution the foregoing power*, and all other powers vested by the con
stitution in the Government of the United States, or in any department or
office thereof. T o understand the word as the Secretary of State does, would
be to depart from its obvious and popular sense, and to give it a restrictive
operation; an idea never before entertained. It would be to give it the same
force as if the word absolutely, or indispensably, had been prefixed to it.
Such a construction would beget endless uncertainty ana embarrassment.
The cases must be palpable and extreme, in which it could be pronounced
with certainty, that a measure was absolutely necessary; or one, without
which the exercise of a given power would be nugatory. There are few mea
sures of any government which would stand so severe a test. T o insist upon
it, would be to make the criterion of the exercise of any implied power, a case
i f extreme necessity; which is rather a rule to justify the overleaping of the
bounds of constitutional authority, than to govern the ordinary exercise of it.
It may be truly said of every Government, as well as that of the United
States, that it has only a right to pass such laws as are necessary anil proper to
accomplish the objects intrusted to it: for no government has a right to do
merely what it pleases. Hence, by a process ot reasoning similar to that of
the Secretary of S tate, it might be proved that neither of the State Govern
ments has a right to incorporate a bank. I t might be shown, that all the pub
lic business of the State could be performed without a bank; and, inferring
thence that it was unnecessary, it might be argued, that it could not be done,
because it is against the rule which has been ju st mentioned.
A like mode of reasoning would prove, that there was 110 power to incorpo
rate the inhabitants of a town with a view to a more perfect police: for it is
certain, that an incorporation may be dispensed w'itn, though it is better to
have one. I t is to be remembered, that there is no express power in any
State constitution to erect corporations.
T he degree in which a measure is necessary, can never be a test of the legal
right to adopt it. T hat must be a m atter of opinion, and can only be a test
ot expediency. T he relation between the measure and the end; between the
nature of the mean employed towards the execution ot a power, and the ob
je c t of that power; must be the criterion of constitutionality; not the more or
less o f necessity or utility.
The practice of the Government is against the rule of construction advocat
ed by the Secretary of State. O f this, the act concerning light houses, bea
cons, buoys, and public piers, is a decisive example. T his, doubtless, must
be referred to the power of regulating trade, and is fairly relative to it. But
it cannot be affirmed, that tne exercise of that power, in this instance, was
strictly necessary; or, that the power itself would be nugatory without that
of regulating establishments of this nature.
This restrictive interpretation of the word necessary, is also contrary to this
sound maxim of construction; namely, that the powers contained in a consti
tution of government, especially those which concern the general adm inistra
tion of the affairs of a country, its finances, trade, defence, &c. ought to be
construed liberally in advancement of the public good. T his rule does not
depend on the particular form of a government, or on the particular demarca
tion of the boundaries of its powers, but on the nature and objects of govern
ment itself. The means by which national exigencies are to be provided for;
national inconveniencies obviated; national prosperity promoted: are of such

C H A R T E R OF 1791.

infinite variety, extent, and complexity, that there must, of necessity, be great
latitude of discretion in the selection and application of those means. H ence,
consequently, the necessity and propriety of exercising the authorities in tru st
ed to a government, on principles of liberal construction.
The Attorney General admits the rule, but takes a distinction between a
State and the te d e ra l constitution. T he latter, he thinks, ought to be constrned with greater strictness, because there is more danger ot error in defin
ing partial than general powers.
But the reason of the rule forbids such a distinction. T his reason is, the
variety and extent of public exigencies, a far greater proportion of which, and
o f a far more critical kind, are objects of national, than of S tate adm inistra
tion. The greater danger of error, as far as it is supposeable, may be a p ru
dential reason for caution in practice, but it cannot be a rule of restrictive in
terpretation.
In regard to the clause of the constitution immediately under consideration,
it is adm itted by the Attorney G eneral, that no restrictive effect can be as
cribed to it. H e defines the word necessary, thus: “ T o be necessary, is to
“ be incidental, and may be denominated the natural means of executing a
power. ”
B ut while, on the one hand, the construction of the Secretary of State
is deemed admissible, it will not be contended, 011 the other, that the clause
in question gives any new or independent power. B ut it gives an explicit
sanction to the doctrine of implied powers, and is equivalent to an admission
o f the proposition, that the Government, as to its specified powers and ob
je c ts , has plenary and sovereign authority; in some cases, paramount to that
of the S tates; in others, co-ordinate with it. For such is the plain import
of the declaration, that it may pass all l a w s necessary and proper to carry
into execution those powers.
It is no valid objection to the doctrine, to say, that it is calculated to ex
tend the powers of the General Government throughout the entire sphere of
S tate legislation. T he same thing has been said, and may be said, with re
gard to every exercise of power, by implication or construction. T he mo
m ent the literal meaning is departed from, there is a chance of error and
abuse: and y et an adherence to the letter of its powers would at once arrest the
motion of Government. I t is not only agreed, on all hands, that the exercise
o f constructive powers is indispensable, but every act which has been passed,
is more or less an exemplification of it. One has already been mentioued;
that relating to light houses, &c. T hat which declares the power of the P re
sident to remove officers a t pleasure, acknowledges the same truth in another,
and a signal instance.
The truth is, that difficulties on this point are inherent in the nature of the
federal constitution. T hey result inevitably from a division of legislative
power. The consequence of this division is, that there will be cases clearly
within the power ot the N ational G overnm ent, others, clearly without its
power; ana a third class, which will leave room for controversy and difference
of opinion, and concerning which a reasonable latitude of judgm ent m ust be
allowed.
B ut the doctrine which is contended for, is not chargeable with the conse
quences imputed to i t It does not affirm that the N ational Government is
sovereign in all respects, but that it is sovereign to a certain extent; that is, to
the extent of the objects of its specified powers.
I t leaves, therefore, a criterion of what is constitutional, and of what is not
so. T his criterion is the end to which the measure relates as a mean. I f the
end be clearly comprehended within any of the specified powers, and if the
m easure have an obvious relation to that end, and is not forbidden by any par
ticular provision of the constitution, it may safely be deemed to come within
the compass of the national authority. T here is, also, this further criterion,
which may materially assist the decision. Does the proposed measure abridge
a pre-existing right of any State, or of any individual? I f it does not, there
is a strong presumption in favor of its constitutionality; and slighter re-

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BANK OF T H E U N ITED ST A T E S.

tations to any declared object of the constitution, may be permitted to turn
the scale.
.
. ,
T he general objections which are to be inferred from the reasonings of the
Secretary of State and Attorney General, to the doctrine which has Deen a d
vanced, nave been stated; and, it is hoped, satisfactorily answered. Those of
a more particular nature shall now be examined.
T he Secretary of State introduces his opinion with an observation, that
the proposed incorporation undertakes to create certain capacities, properties,
or attributes, which are against the laws of alienage, descents, escheat and
forfeiture, distribution and monopoly; and to confer a power to make laws
paramount to those of the States. And nothing, says he, m another place, but
a necessity, invincible by other means, can justify such a prostration of law s,
which constitute the pillars of our whole system of jurisprudence, and are the
foundation laws of the State Governments,
If these are truly the foundation laws of the several States, then have most
of them subverted their own foundations: for there is scarcely one of them
which has not, since the establishment of its particular constitution,m ade ma
terial alterations in some of those branches of its jurisprudence, especially the
law of descents. B ut it is not conceived how any thing can be called the
fundamental law o f a State government, which is not established in its con
stitution, unalterable by the ordinary legislature. A nd, with regard to the
question of necessity, it has been shown, that this can only constitute a ques
tion of expediency, not of right.
T o erect a corporation, is to substitute a Tegal or artificial, fo ra natural
person; and, w here a number are concerned, to give them individuality. T o
that legal or artificial person, once created, the common law of every State,
of itself, annexes all those incidents and attributes which are represented as
a prostration of the main pillars of their jurisprudence. It is certainly not ac
curate to say, that the erection of a corporation is against those different heads
of the State laws; because, it is rather to create a kind of person, or en tity ,
to which they are inapplicable, and' to which the general rule of those laws
assigns a different regimen. The laws of alienage cannot apply to an artificial
person, because it can have no country. Those of descent cannot apply to
it, because it can have no heirs. Those of escheat are foreign from it, for the
same reason. Those of forfeiture, because it cannot commit a crime. Those
of distribution, because, though it may be dissolved, it cannot die. As truly
might it be said, that the exercise ot the power of prescribing the rule by
which foreigners shall be naturalized, is against the law of alienage, while it
is, in fact, only to put them into a situation- to cease to be the subjects of that
law. T o do a thing which is against the law , is to do something which it for*
bids, and which is a violation of it.
B ut, if it were even to be adm itted that the erection of a corporation is a
direct alteration of the State laws, in the enumerated particulars, it would do
nothing towards proving that the measure was unconstitutional. I f the Go
vernment of the United State can do no act which amounts to an alteration of
a State law, all its powers are nugatory: for almost every new law is an alter
ation, in some way or other, of an old law , either common or statute.
T here are laws concerning bankruptcy in some States. Some States have
laws regulating the value of foreign coins. Congress are empowered to esta
blish uniform laws concerning bankruptcy throughout the United States, and
to regulate the value of foreign coins. The exercise of either of these power*
by Congress, necessarily involves an alteration of the laws of those States.
Again: every person, by the common law of each S tate, may export his
property to foreign countries at pleasure; but Congress, in pursuance of the
power of regulating trade, may prohibit the exportation of commodities; in
doing which, they would alter the common law of each S tate, in abridgment
of individual right.
It can, therefore, never be good reasoning to say, this or that act is uncon
stitutional, because it alters this or that law of a S tate; it m ust be shown that
the act, which makes the alteration, is unconstitutional on other accounts; not
because it makes the alteration.

CH A RTER OF 1791.

JQ J

There are two points in the suggestions of the Secretary of State, which
have been noted, that are peculiarly incorrect. One is, that the proposed in

corporation is against the laws of monopoly, because it stipulates an exclusive
right of banking under the national authority: the other, that it gives power to
the institution to make laws paramount to those of the States.
B ut with regard to the first point, the bill neither prohibits any State from
erecting as many banks as it pleases, nor any number of individuals from as
sociating to carry on the business; and, consequently, is free from the charge
of establishing a monopoly: for monopoly implies a legal impediment to tne
carrying on the trade by others than those to whom it is granted.
A nd, with regard to the second point, there is still less foundation. T he
by-laws of such an institution as a bank, can operate only upon its own mem
bers; can only concern the disposition of its own property; and must essen
tially resemble the rules of a private m ercantile partnership. T hey are, ex
pressly, not to be contrary to lawj and law must here mean the law of a State,
as well as of the United States. T here can never be a doubt, th at a law of a
corporation, if contrary to a law of a State, m ust be overruled as void, unless
the law of the State is contrary to that of the United States; and then the
question will not be between the law of the State and that of the corporation,
but between the law of the State and that of the United States.
A nother argument made use of by the Secretary of State is, the rejection, by
the convention, of a proposition to empower Congress to make corporations,
either generally, or for some special purpose. W hat was the precise nature
or extent of this proposition, or what the reasons for refusing it, is not ascer
tained by any authentic document, or even by accurate recollection. As far
as any such docum ent exists, it specifies only canals. I f this was the amount
o f it, it would, at most, only prove, that it was thought inexpedient to give a
power to incorporate for tne purpose of opening canals; for which purpose a
special power would have been necessary, except with regard to the W estern
territory; there being nothing in any part of the constitution respecting the
regulation of canals. It m ust be confessed, however, that very different ac
counts are given of the import of the proposition, and of the motives for re
jecting it. Some affirm that it was confined to the opening of canals and ob
structions in rivers; others, that it embraced banks; and others, that it ex
tended to the power of incorporating generally. Some again allege, that it
was disagreed to, because it was thought improper to vest in Congress a power
of erecting corporations; others, because it was thought unnecessaey to spe
cify the power, and inexpedient to furnish an additional topic of objection to
the constitution. In this state of the m atter, no inference whatever can be
drawn from it.
But, whatever may have been the nature of the proposition, or the reasons
for rejecting it, nothing is included by it; that is, the proposition, in respect
to the real merits of the question. T he Secretary of State will not deny, that,
whatever may have been the intentions of the framers of a constitution, or of
a law, that intention is t.o be sought for in the instrum ent itself, according to
the usual and established rules of construction. Nothing is more common
than for laws to express and effect more or less than was intended. If, then,
a power to erect a corporation, in any case, be deducible by fair inference
from the whole, or any part, of the numerous provisions of the constitution of
the U nited States, argum ents, drawrn from extrinsic circum stances regarding
the intention of the convention, m ust be rejected.
Most of the arguments of the Sec re tn 17 of State, which have not been con
sidered in the foregoing rem arks, are of a nature rather to apply to the expe
diency, than to the constitutionality of the bill. T hey will, however, be no
ticed m the discussion which will be necessary in reference to the particular
heads of the powers o f the Government, which are involved in the question.
Those of the A ttorney General will now properly come under viewH is first observation is, that the power of incorporation is not expressly
given to Congress. T his shall be conceded, but in this sense only—that it is
not declared in express terms that Congress may erect a corporation. But

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BANK OF T H E U N ITED ST A T E S.

this cannot mean that there are not certain express powers, which necessarily
include it.
. . . . . .
For instance, Congress have express power to exercise exclusive legislation
in all cases whatsoever, over such district (not exceeding ten miles square)
as may, by cession of particular States, and the acceptance of Congress, be
come the seat of the Government of the United States; and to exercise like
authority over all places purchased by consent of the legislature of the State
in which the same shall be, for the erection of forts, arsenals, dock yards, and
other needful buildings.
H ere, then, is express power to exercise exclusive legislation, in all cases
whatsoever, over certain places; that is, to do, in respect to those places, all
that any government whatever may do: for language does not afford a more
complete designation of sovereign power, than in those comprehensive terms.
It is, in other words, a power to pass all laws whatsoever, and, consequently,
to pass all laws for erecting corporations, as well as for any other purpose,
which is the proper object of law in a free government. Surely, it can never
be believed, that Congress, with exclusive power o f legislation, in all cases
whatsoever, cannot erect a corporation within the district which shall become
the seat of Government, for the better regulation of its police; and yet there
is an unqualified denial of the power to erect corporations, in every case, on
the part both of the Secretary of State and of the Attorney General. The
former, indeed, speaks of that power in these emphatical term s: that it is a
right remaining exclusively w ith the States.
As far, then, as there is an express power to do any particular act of legisla
tion, there is an express one to erect corporations in tne case above described.
But, accurately speaking, no particular power, is more than implied in a gen
eral one. Thus, the power to lay a duty on a gallon o f rum , is only a particu
lar, implied in the general power to lay and collect taxes, duties, imposts, and
excises. This serves to explain in what sense it may be said, that Congress
have not an express power to make corporations.
This may not be an improper place to take notice of an argument which was
used in debate in the House of Representatives. It was there urged, that if
the constitution intended to confer so important a power as that of erecting
corporations, it would have been expressly mentioned. B ut the case which
has been noticed, rs clearly one in which such power exists, and yet without
any specification or express grant of it, further than as every particular, im
plied in a general power, can be said to be so granted.
B ut the argument itself is founded upon an exaggerated and erroneous con
ception of the nature of the power. I t has been shown, that it is not of so
transcendent a kind as the reasoning supposes; and that, viewed in a ju st
light, it is a mean which ought to have been left to implication, rather than
an end which ought to have been expressly granted.
Having observed, that the power of erecting corporations is not expressly
granted to Congress, the Attorney General proceeds thus:
If it can be exercised by them, it must be,
1. Because the nature of Federal Government implies it.
2. Because it is involved in some of the specified powers of legislation.
3. Because it is necessary and proper, to carry into execution some of the
specified powers.
T o be implied in the nature of the Federal Government, says he, would
beget a doctrine so indefinite as to grasp at every power.
This proposition, it ought to be remarked, is not precisely or even substan
tially, that which has been relied upon. T he proposition relied upon is, that
the specified powers o f Congress are, in their nature, sovereign; (hat itis inci
dent to sovereign power to erect corporations; and that, therefore, Congress
have a right, within the sphere, and in relation to the objects q f their power,
to erect corporations.
It shall, however, be supposed, that the Attorney General would consider
the two propositions in the same light, and that the objection made to the one
would be made to the other.

CH A R TE R O F 1791.

103

To this objection an answer has been already given. I t _is this: that the
doctrine is stated with this express qualification, that the right to erect cor
porations does only extend to cases and objects within the sphere of the speci
fied powers of the Government. A general legislative authority, implies a
power to erect corporations in all cases; a particular legislative power, im
plies authority to erect corporations in relation to cases arising under that
power only. Hence the affirming, that,* as incident to sovereign power, C on
gress may erect a corporation in relation to the collection of their taxes, is no
more to affirm that tliey may do whatever else they please, than the saying
they have a power to regulate trade, would be to affirm, that they have a
power to regulate religion; or than the maintaining, that they have sovereign
potver as to taxation, would be to maintain, that they have sovereign power as
to every thing else.
The A ttorney General undertakes, in the next place, to show, that the
power of erecting corporations is not involved in any of the specified powers
of legislation confided to the National Government.
In order to do this, he has attem pted an enumeration of the particulars which
he supposes to be comprehended under the several heads of the p o w e r s to lay
and collect taxes, &c. to borrow money on the credit of the U nited States; to
regulate commerce with foreign nations, between the States, and with the In
dian tribes; to dispose of, ana make all needful rules and regulations respect
ing the territory, or other property belonging to the United States: the d e
sign of which enumeration is to show, w hat is included under those different
heads of power; and negatively, that the power of erecting corporations is
not included.
The truth of this inference, or conclusion, must depend on the accuracy of
the enumeration. I f it can be shown that the enumeration is defective, the
inference is destroyed. T o do this, will be attended with no difficulty.
T he heads of the power to lay and collect taxes, he states to be—
1. T o ascertain tne subject of taxation, &c.
2 . T o declare the quantum of taxation, &c.
3. T o prescribe the mode of collection.
4. T o oidain the manner of accounting for the taxes, &c.
The defectiveness of this enumeration consists in the generality of the third
division, “ to prescribe the mode o f collection,” which is in itself an immense
chapter. I t will be shown hereafter, that, among a vast variety of particulars,
it comprises the very power in question, namely, to erect corporations.
The heads of the power to borrow money, are stated to be—
I. T o stipulate the sum to be lent.
I I . An interest or no interest to be paid.
III. T he tim e and manner of repaying, unless the loan be placed on an
irredeemable fund.
This enumeration is liable to a variety of objections. I t omits, in the first
ilace, the pledging or m ortgaging of a fund for the security of the money
ent: an usual, and, in most cases, an essential ingredient.
The idea of a stipulation of an interest or no interest, is too confined. It
should rather have been said, to stipulate the consideration of the loan. In d i
viduals often borrow upon considerations other than the payment of interest.
So may Government; and so they often find it necessary to do. Every one
recollects the lottery tickets and other douceurs, often given in G reat Britain
as collateral inducem ents to the lending of money to the Government.
T here are, also, frequently collateral conditions, which the enumeration
does not contemplate. Every contract which has been made for moneys b o r
rowed in H olland, includes stipulations, that the sum due, shall be fre e fr o m
taxes, and from sequestration in time ot war; and mortgages all the land and
property of the United States for the reimbursement.
I t is also known, that a lottery is a common expedient for borrowing money,
which certainly does not fall under either of the enum erated heads.
T he heads of the power to regulate commerce with foreign nations, are
stated to be—

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BANK OF T H E U N ITED ST A T E S.

1 . T o prohibit them or their commodities from our ports.
2 . T o impose duties on them where none existed betore, or to increase exist
ing duties on them.

3. To subject them to any species of custom house regulation.
4.

To grant them any exemptions or privileges which policy may suggest.
T his enumeration is far more exceptionable than either of the former: it
omits every thing that relates to the Citizens, vessels, or commodities, of the
United States.
T he following palpable omissions occur at once:
I. Of the power to prohibit the exportation of commodities, which not only
exists at all times, but which, in time of war, it would be necessary to e x er
cise, particularly with relation to naval and warlike stores.
I I. Of the power to prescribe rules concerning the charactistics and privi
leges of an American bottom; how she shall be navigated; as, whether by
citizens or foreigners, or by a proportion of each.
III. Of the power of regulating the manner of contracting with seamen, the
policies of ships on their voyages, &c. of which the act for the government
and regulation of seamen in the merchant service is a specimen.
T h at the three preceding articles are omissions, will not be doubted. T here
is a long list of items in addition, which admit of little, if any, question, of
which a few samples shall be given.
I. The granting of bounties to certain kinds of vessels and certain species
of merchandise; of this nature is the allowance on dried and pickled fish and
salted provisions.
II. The prescribing of rules concerning the inspection of commodities to be
exported. Though tne States, individually, are competent to this regulation,
yet there is no reason, in point of authority at least, why a general system
might not be adopted by the United States.
I II . The regulation of policies of insurance; of salvage upon goods found
at sea; and the disposition of such goods.
IV . The regulation of pilots.
V. The regulation of bills of exchange, draw n by a merchant of one State
upon a merchant of another State. T his last rather belongs to the regulation
of trade between the State 9 , but is equally omitted in the specification under
that head.
T he last enumeration relates to the power to dispose of, and make all need
f u l rules and regulations respecting the territory or other property belonging
to the United States.
T he heads of this power are said to be,
I. T o exert an ownership over the territory of the United States which may
be properly called the property of the United States, as in the W estern ter
ritory, ana to institute a government therein; or,
II. To exert an ownership over the other property of the United States.
T his idea of exerting an ownership over the territory or other property of
the United States, is particularly indefinite and vague. I t does not at all sa
tisfy the conception ot what must have been intended by a power to make all
needful rules and regulations; nor would there have been any use for a spe
cial clause, which authorized nothing more: for the right of exerting an own
ership, is implied in the very definition of property.
It is admitted, that, in regard to the W estern territory, something more is
intended: even the institution of a government, that is, the creation of a body
politic, or corporation of the highest nature; one which, in its m aturity, will
be able itself to create other corporations. W h y , then, does not the same
clause authorize the erection of a corporation in respect to the regulation or
disposal of any other of the property of the United States?
This idea will be enlarged upon in another place.

CH A RTER OF 1791.

105

Hence, it appears that the enumerations which have been attempted by the
Attorney General, are so imperfect as to authorize no conclusion whatever.
They, therefore, have no tendency to disprove, that each and every of the
powers to which they relate, includes that of erecting corporations, which
they certainly do, as the subsequent illustrations will more and more evince.
It is presumed to have been satisfactorily shown, in the course of the preced
ing observations:
I. That the power of the Government, as to the objects intrusted to its man
agement, is, in its nature, sovereign.
II. That the right of erecting corporations, is one inherent in, and insepa
rable from, the idea of sovereign powerill. That the position, that the Government of the United States can exer
cise no power but such as is delegated to it by its constitution, does not
militate against this principle.
IV. That the word necessary, in the general clause, can have no restrictive
operation, derogating from the force of this principle; indeed, that the degree
in which a measure is, or is not, necessary, cannot be a test of constitutional
right, but of expediency only.
V. That the power to erect corporations, is not to be considered as an
independent and substantive power, but as an incidental and auxiliary one;
and was, therefore, more properly left to implication, than expressly granted.
VI. That the principle in question does not extend the power of the Govern
ment beyond the prescribed limits, because it only affirms a power to incor
porate for purposes w ithin the sphere o f the specified powers.
And, lastly, that the right to exercise such a power, in certain cases, is une
quivocally granted in the most positive and comprehensive terms.
To all which it only remains to be added, that such a power has actually
been exercised in two very eminent instances, namely, in the erection of two
overnments; one northwest of the river Ohio, and the other southwest; the
ast independent of any antecedent compact.
And there results a full and complete demonstration, that the Secretary of
State and Attorney General are mistaken, when they deny, generally, the
power of the National Government to erect corporations.
It shall now be endeavored to be shown, that there is a power to erect one
of the kind proposed by the bill. This will be done by tracing a natural and
obvious relation between the institution of a bank, and the objects of several
of the enumerated powers of the Government; and by showing, that, political
ly speaking, it is necessary to the effectual execution of one or more of those
powers. In the course of this investigation, various instances will be stated,
by way of illustration, of a right to erect corporations under those powers.
Some preliminary observations may be proper.
The proposed bank is to consist of an association of persons, for the purpose
of creating a joint capital, to be employed, chiefly anil essentially, in ioans.
So far, the object is not only lawful, but it is the mere exercise of aright
which the law allows to every individual. The Bank of New York, which is
not incorporated, is an example of such an association. The bill proposes, in
addition, that the Government shall become a joint proprietor in this under
taking; and that it shall permit the bills of the company, payable on demand,
to be receivable in its revenues; and stipulates that it shall not grant privileges,
similar to those which are to be allowed to this company, to any others. All
this is incontrovertibly within the compass of the discretion ot the Govern
ment. The only question is, whether it has a right to incorporate this com
pany, in order to enable it the more effectually to accomplish ends which are
in themselves lawful.
To establish such a right, it remains to show the relation of such an institu
tion, to one or more of the specified powers of the Government.
Accordingly, it is affirmed, that it has a relation, more or less direct, to the
power of collecting taxes; to that of borrowing money; to that of regulating

1 0 (J

BANK OP T H E U N ITED ST A T E S.

trade between the States? and to those of raising and maintaining fleets and
armies. T o the two former, the relation may be said to be immediate.
A nd, in the last place, it will be argued, that it is clearly within the provi
sion which authorizes the making of all needful rules an a regulations con
cerning the property of the United States, as the same has been practised
upon by the Government.
A bank relates to the collection of taxes in two ways. Indirectly, by
increasing the quantity of circulating medium and quickening circulation,
which facilitates the means of paying; directly, by creating a convenient
species of medium in which they are to be paid.
T o designate or appoint the money or thing in which taxes are to be paid, is
not only a proper, but a necessary exercise of the power of collecting themAccordingly, Congress, in the law concerning the collection cf the duties oil
imposts anil tonnage, have provided that tlrey shall be payable in gold and
silver. But, while it was an indispensable part, of the work to say in what
they should be paid, the choice of the specific thing was mere m atter of dis
cretion. The payment might have been required in the commodities them
selves. Taxes, in kind however ill judged, are not without precedents even
in the United States; or it might have been in the paper money of the several
States, or in the bills of the Batik of North America, New Y ork,and Massa
chusetts, all or either of them; or it might have heen in bills issued under the
authority of the United States,
|
N o part of this can, it is presumed, be disputed. T he appointment, then,
of the money or thing in which the taxes are to be paid, is an incident to the
power of collection. And among the expedients which may be adopted, is
that of bills issued under the authority of the United States.
Now, the manner of issuing these bills, is again m atter of discretion. T he
Government might, doubtless, proceed in the following manner: it might pro
vide that they should be issued under the direction of certain officers, paya
ble on demand; and in order to support their credit, and give them a ready
circulation, it might, besides giving them a currency in its taxes, set apart,
out of any moneys in its treasury, a given sum, and appropriate it, under the
direction of those officers, as a fund for answering the bills, as presented for
payment.
The constitutionality of all this would not admit of a question, and yet it
would amount to the institution of a bank, with a view to the more conve •
nient collection of taxes. For the simplest and most precise idea of a bank,
is, a deposite of coin or other property, as a fund for circulating a credit upon
it, which is ter answer the purpose of money. T h at such an arrangement
would be equivalent to the establishment of a bank, would become obvious, if
the place where the fund to be set apart was kept, should be made a recepta
cle of the moneys of all other persons who should incline to deposite them
there for safe keeping; and would become still more so, if the officers, charg
ed with the direction of the fund, were authorized to make discounts at the
usual rate of interest, upon good security. T o deny the power of the Govern
ment to add this ingredient to the plan, would be to refine away all govern
ment.
A further process will still more clearly illustrate the point. Suppose, when
the species of bank which has been described, was about to be instituted, it
were to be^urged, that, in order to secure to it a due degree of confidence, the
fund ought not only to be set apart and appropriated generally, but ought to
be specifically vested in the officers who were to have the direction of it, and
in their successors in office, to the end that it might acquire the character of
private property, incapable of being resumed without a violation of the sanc
tion by which the rights of property are protected, and occasioning more se
rious and general alarm, the apprehension of which might operate as a check
upon the Government. Such a proposition might be opposed by arguments
against the expediency of it, or the solidity of the reason assigned for it; but it
is not conceivable what could be urged against its constitutionality.

C H A R TE R OF 1791.

107

And yet such a disposition of the thing would amount to the erection ot a
corporation; for the true definition of a corporation seems to be this: it is a
legal person, or a person created by act of law; consisting of one or more na
tural persons, authorized to hold property, or a franchise in succession, in a
legal, as contradistinguished from a natural, capacity.
L etth o illustration proceed a step further. * Suppose a bank, of the nature
which has been described, without or with incorporation, had been instituted,
and that experience had evinced, as it probably would, that, being wholly
under a public direction, it possessed not the consequence requisite to the
credit of its bills. Suppose, also, that, by some of those adverse conjunctures
which occasionally attend nations, there had been a very great drain of the
specie of the country, so as not only to cause general distress, for want of an
adequate medium of circulation, but to produce, in consequence of that cir
cumstance, considerable defalcations in the public revenues. Suppose, also,
that there was no bank instituted in any State. In such a posture of things
would it not be most manifest, that the incorporation of a bank like that pro
posed by the bill, would be a measure immediately relative to the effectual
collection of the taxes, and completely within the province of a sovereign
power of providing, by all laws necessary and proper, for that collection?
If it be said, that such a state of things would render that necessary, and,
therefore, constitutional, which is not so now; the answer to this (and a solid
one it doubtless is) must still be, that which has been already stated. Circum
stances may affect the expediency of the measure, but can neither add to nor
diminish its constitutionality.
A bank has a direct relation to the power of borrowing money, because it is
an usual, and, in sudden emergencies, an essential instrum ent, in the obtaining
o f loans to Government.
A nation is threatened with a war; large sums are wanted on a sudden to
make the requisite preparations; taxes are laid for the purpose; but it requires
time to obtain the benefit of them; anticipation is indispensable. I f there be
a bank, the supply can at once be had; if there be none, loans from individu
als must be sought. The progress of these is often too slow for the exigency:
in some situations they are not practicable at all. Frequently when they are,
it is of great consequence to be able to anticipate the product of them by
advances from a bank.
The essentiality of such an institution, as an instrum ent of loans, is exem
plified at this very moment. An Indian expedition is to be prosecuted. T he
only fund out of which the money can arise consistently with the public
engagements, is a tax, which only begins to be collected in July next. T he
preparations, however, are instantly to be made. T he money must, therefore,
tie borrowed; and of whom could it be borrowed, if there were no public
banks?
It happens that there are institutions of this kind; but if there were none,
it would be indispensable to create one.
L et it then be supposed, that the necessity existed, (as but for a casualty
would be the case,) that proposals were made for obtaining a loan; that a
number of individuals came forward and said, we are willing to accommodate
the Government with this money; with what we have in hand, and the credit
we can raise upon it. we doubt not of being able to furnish the sum required.
But, in order to do this, it is indispensable that we should be incoporated as a
bank. T his is essential towards putting it in our power to do what is desired,
and we are obliged on that account to make it the consideration or condition
of the loan.
Can it be believed that a compliance with this proposition would be uncon
stitutional? Does not this alone evince the contrary? I t is a necessary part
of a n s w e r to borrow, to be able to stipulate the considerations or conditions
of a loan. It is evident, as has been rem arked elsewhere, that this is not con
fined to the mere stipulation of a franchise. If it may, (and it is not perceiv
ed why it may not,) then the grant of a corporate capacity may be stipulated
as a consideration of the loan. T here seems to be nothing unfit, or foreign
from the nature of the thing, in giving individuality, or a corporate capacity,

JO S

BANK OF T H E U N ITED ST A T E S.

to a number of persons who are willing to lend a sum of money to the Govern
ment, the better to enable them to do it, and make them an ordinary instru
m ent of loans in future emergencies of state.
B ut the m o r e general view of the subject is still more satisfactory. I he
legislative power of borrowing money, and of making all laws necessary and
proper for carrying into execution that power, seems obviously competent to
the appointment of the organ through which tne abilities and wills ot individ
uals may be most efficaciously exerted, for the accommodation ot the Govern
ment, by loans.
T he Attorney General opposes to this reasoning the following observation:
Borrowing money presupposes the accumulation ot a tund to be lent, and is
secondary to the creation of an ability to lend. This is plausible in theory, but
it is not true in fact. In a great number of cases, a previous accumulation of
a fund equal to the whole sum required, does not exist, and nothing more can
be actually presupposed, than that there exist resources, which, put into ac
tivity to tne greatest advantage, by the nature of the operation with the Go
vernment, will be equal to the effect desired to be produced. All ihe provi
sions and operations of Government, must be presumed to contemplate things
as they really are.
T he institution of a bank has, also, a natural relation to the regulation of
trade between the States, in so far as it is conducive to the creation of a con
venient medium of exchange between them, and to the keeping up a full cir
culation, by preventing the frequent displacement of the metals in reciprocal
remittances. Money is the very hinge on which commerce turns. A nd this
does not mean, merely gold and silver; many other things have served the pur
pose, with different degrees of utility. Paper has been extensively employed.
I t cannot, therefore, be adm itted, with the Attorney General, that the re
gulation of trade between the States, as it concerns the medium of circula
tion and exchange, ought to be considered as confined to coin. It is even
supposeable that the whole, or the greatest part of the coin of the country,
might be carried out of it.
T he Secretary of State objects to the relation here insisted upon, by the fol
lowing mode of reasoning: T o erect a bank, says he, and to regulate com
merce, are very different acts. H e who erects a bank, creates a subject of
commerce. So does he who raises a bushel of wheat, or digs a dollar out of
the mines; yet, neither of these persons regulates commerce thereby. To
make a thing which may be bought and sold, is not to prescribe regulations
for buying and selling. This is making the regulation of commerce to con
sist in prescribing rules for buying and selling.
T his, indeed, is a species of regulation of trade; but it is one which falls more
aptly within the province of the local jurisdictions, than within that of the
General Government, whose care they m ust have presumed to have been in
tended to be directed to those general political arrangements concerning trade,
on which its aggregate interests depend, rather than to the details ot buying
and selling.
Accordingly, such only are the regulations to be found in the laws of the
United States, whose objects are to give encouragement to the enterprise ot
our own merchants, and to advance our navigation and manufactures.
And it is in reference to these general relations of commerce, that an esta
blishment which furnishes facilities to circulation, and a convenient medium
of ^exchange and alienation, is to be regarded as a regulation of tradeThe Secretary of State further urges, that, if this was a regulation of com
merce, it would be void, as extending as much to the internal p art of every
State, as to its external. B ut w hat regulation of commerce does not extend
to the internal commerce of every State ? W h a t are all the duties upon im
ported articles, amounting, in some cases, to prohibitions, but so many boun
ties upon domestic manufactures, affecting the interest of different classes of
citizens, in different ways ? W hat are all the provisions in the coasting act,
which relate to the trade between district and district, of the same State ? In
9hort, what regulation of trade between the States, but m ust affect the inter

CH A RTER O F 1791.

JQ g

nal trade of each State ? W hat can operate upon the wliole, but must extend
to every part?
The relation of a bank to the execution of the powers that concern the com
mon defence, has been anticipated. I t has been noted, that, at this very mo
m ent, the aid of such an instituiion is essential to the measure to be pursued
for the protection of our frontiers.
I t now remains to show, that the incorporation of a bank, is within the ope
ration of the provision which authorizes Congress to make all needful rules
and regulations concerning the property of the U nited States. B ut, it is pre
viously necessary to advert to a distinction which has been taken up by the
A ttorney General.
He admits, that the word property, may signify personal property, however
acquired, and yet asserts that it cannot signify money arising from the sources
o f revenue pointed out in the constitution, “ because,” says he, “ the d is
posal and regulation of money, is the final cause for raising it by taxes.”
But it would be more accurate to say, that the object to whicn money is in
tended to be applied, is the Jinal cause for raising it, than that the disposal
and regulation of it, is such. The support of a government; the support of
troops for the common defence; the payment of the public debt, are the true
finaf causes for raising money. T he disposition ana regulation of it, when
raised, are the steps by which it is applied to the ends for which it was raised,
not the ends themselves. H ence, therefore, the money to be raised by taxes,
as well as any other personal property, must be supposed to come within the
meaning, as they certainly do within the letter, of authority to make all need
ful rules and regulations concerning the property of the United States.
A case will make this plainer. Suppose the public debt discharged, and
the funds, now pledged for it, liberated; in some instances it would be found
expedient to repeal the taxes; in others, the repeal might injure our own in
dustry, our agriculture, and manufactures. In these cases, they would, of
course, be retained. Here then, would be moneys arising from the authorized
sources of revenue, which would not fall within the rule by which the A ttor
ney General endeavors to except them from other personal property, and
from the operation of the clause in question.
T he moneys being in the coffers of Government, what is to hinder such a
disposition to be made of them as is contemplated in the bill; or what an in
corporation of the parties concerned, under the clause which has been cited?
I t is adm itted, that, with regard to the W estern territory, they give a pow
er to erect a corporation; that is, to constitute a government. And by what
rule of construction can it be maintained, that the same words, in a constitu
tion of government, will not have the same effect, when applied to one spe
cies ()f property, as to another, as far as the subject is capable of it ? Or, that
a legislative power, to make all needful rules and regulations; or to pass all
laws necessary and proper, concerning the public property, which is admitted
to authorize an incorporation in one case, will not authorize it in another?
W ill justify the institution of a government over the W estern territory, and
will not justify the incorporation of a bank for the more useful management
o f the money of the nation ? I f it will do the last, as well as the first, then,
under this provision alone, the bill is constitutional, because it contemplates
that the United States shall be joint proprietors of the stock of the bank.
T here is an observation of the Secretary of S tate, to this effect, which may
require notice in this place: Congress, says he, are not to lay taxes, ad libi
tum , f o r any purpose they please, but only to pay the debts, or provide for the
welfare of the Union. Certainly no inference can be drawn from this, against
the power of applying their money for the institution of a bank. I tis tru e,th at
they cannot, without breach of trust, lay taxes for any other purpose than the
general welfare; but, so neither can any other government. T he welfare of
the community is the only legitimate end for which money can be raised on the
community. Congress can be considered as only under one restriction, which
does not apply to other governments. T hey cannot rightfully apply the mo
ney they raise to any purpose merely or purely local B ut, with this excep

H Q

BANK OF T H E U N ITE D ST A T E S .

tion, they have as large a discretion, in relation to the application of money,
as any legislature whatever.
T he constitutional lest of a right application, m ust always be— whether it
be for a purpose of general, or local nature. It the former, there can be no
w ant of constitutional power. The quality ot the object, as how far it will
really promote, or not, the welfare of the Union, must be m atter of conscien
tious discretion; and the arguments for or against a measure, in this light,
must be arguments concerning expediency or inexpediency, not constitutional
right. W hatever relates to the general order of the finances, to the general in
terests of trade, &c. being general objects, .-.re constitutional ones for the ap
plication o f money.
A bank, then, whose bills are to circulate in all the revenues of the coun
try, is evidently a general object, and, for that very reason, a constitutional
one, a s far a s r e g a r d s the appropriation of money to it. W hether it will really
be a beneficial one or not, is worthy of careful examination, but is no more a
constitutional point, in the particular referred to, than the question whether
the W estern lands shall be sold for twenty or thirty cents per acre.
A hope is entertained, that, by this tim e.it has been made to appear to the
satisfaction of the President, that the bank has a natural relation to the power
of collecting taxes; to that of regulating trade; to that of providing for the com
mon defence; and, that, as the bill under consideration contemplates the Go
vernment in the light of a joint proprietor of the stock of the bank, it brings
the case within the provision of the clause of the constitution which immedi
ately respects the property of the United States.
U nder a conviction that such a relation subsists, the Secretary of the T re a
sury, with all deference, conceives that it will result, as a necessary conse
quence, from the position, that all the specified powers of Government are
sovereign, as to the proper objects, that the incorporation of a bank is a con
stitutional measure, and that the objections taken to the bill, in this respect,
are ill founded.
B ut, from an earnest desire to give the utmost possible satisfaction to the
mind of the President, on so delicate and important a subject, the Secretary
of the Treasury will ask his indulgence, w hile he gives some additional illus
trations of cases in which a power of erecting corporations may be exercised,
under some of those heads of the specified powers of the Government, which
are alleged to include the right of incorporating a bank.
I. I t does not appear susceptible of a doubt, that if Congress had thought
proper to provide, in the collection law, that the bonds to be given for the du
ties, should be given to the collector of the district A , or B, as the case might
require, to inure to him and his successors in office, in trust for the United
States, that it would have been consistent with the constitution to make such
an arrangement; and yet, this, it is conceived, would amount to an incorpo
ration.
II. It is not an unusual expedient of taxation to farm particular branches of
revenue, that is, to sell 91- mortgage the product of them for certain definite
sums, leaving the collection to the parties to whom they are mortgaged or sold.
T here are even examples of this in the United States. Suppose that there was
any particular branch of revenue which it was manifestly expedient to place
on this footing, and there were a number of persons willing to engage w itlithe
G overnment, upon condition that they should be incorporated, and the funds
vested in them , as well for their greater safely, as for the more convenient re
covery and management of the taxes, is it supposeable that there could be any
constitutional obstacle to the measure ? I t is presumed that there could be
none; it is certainly a mode ot collection which it w'ould be in the discretion
of the Government to adopt, though the circumstances must be very extraor
dinary that would induce the Secretary to think it expedient.
I I I . Suppose a new and unexplored branch of trade should present itself
with some foreign country; suppose it was manifest that, to undertake it with
advantage, required a union o f the capitals of a number of individuals, and that
those individuals would not be disposed to embark without an incorporation#

•CHARTER OF 1701.

H I

as well to obviate the consequences of a private partnership, which makes
every individual liable, in his whole estate, for the debts of the company, to
their utmost extent, as for the more convenient management of the business;
what reason can there be to doubt, that the national Government would have
a constitutional right to institute and incorporate such a company ? None.
They possess a general authority to regulate trade with foreign countries.
T his is a mean which has been practised, to that end, by all the principal com •
inercial nations, who have trading companies, to this day, which have subsist
ed for centuries. W hy may not the United States constitutionally employ
the means usual in other countries, for attaining the ends intrusted to them ?
A power to make all needful rules and regulations concerning territory, has
been construed to mean a power to erect a government. A power to regulate
trade, is a power to make all needful rules and regulations concerning trade.
W hy may it not, then, include that of erecting a trading cotnpiny, as well as,
in other cases, to erect a governm ent?
It is remarkable that the State conventions who had proposed am endments
in relation to this point, have, most, if not all of them, expressed themselves
nearly thus: Congress shall not grant monopolies, nor erect any company with
exclusive advantages of commerce 1 T hus, at the same time expressing their
sense, that the power to erect trading companies, or corporations, was inhe
ren t in Congress,and objecting to it no further than as to the g ran to f exclusive
privileges.
The Secretary entertains all the doubts which prevail concerning the utility
of such companies; but he cannot fashion to his own mind a reason to induce
a doubt that there is a constitutional authority in the United States to establish
them. If such a reason were dem anded, none could be given, unless it were
this, that Congress cannot erect a corporation; which would be no better than
to say they cannot do it, because they cannot do it; first presuming an ina
bility without reason, and then assigning that inability as the cause ot itself.
Illustrations of this kind might be multiplied without end. They shall, how
ever, be pursued no further.
T here is a sort of evidence on this point, arising from an aggregate view of
the constitution, which is of no inconsiderable weight. T he very general
power of laying and collecting taxes, and appropriating their proceeds; that
of borrowing money indefinitely: that of coining money, and regulating foreign
coins; that of making all needful rules and regulations respecting the property
of the United States. These powers combined, as well as the reason and na
ture of the thing, speak strongly this language: that it is the manifest design
and scope of the constitution, to vest in Congress all the powers requisite to
the effectual adm inistration of the finances of the U nited States. As far as
concerns this object, there appears to be no parsimony of power.
T o suppose, then, that the Government is precluded from the employment
of so usual and so im portant an instrum ent for the administration of its finan
ces, as that of a bank, is to suppose what does not coincide with the general
tenor and complexion of the constitution, and w hat is not agreeable to impres
sions that any mere spectator would entertain concerning it. L ittle less than
a prohibiting clause can destroy the strong presumptions which result from the
general aspect of the Government. Nothing but demonstration should exclude
the idea that the power exists.
T o all questions of this nature, the practice of m ankind ought to have great
weight against the theories of individuals.
T he fact, for instance, that all the principal commercial nations have made
use of trading corporations or companies, for the purpose of external com
merce; is a satisfactory proof that the establishment of them, is an incident to
the regulation of commerce.
T his other fact, that banks are an usual engine in the .administration of na
tional finances, and an ordinary, and the most effectual, instrum ent of loans,
and one which, in this country, has been found essential, pleads strongly
against the supposition, that a government clothed with most of the important
prerogatives of sovereignty, in relation to its revenues, its debt, its credit, its

BANK OF T H E U N ITED ST A T E S.

defence, its trade, its intercourse with foreign nations, is forbidden to make
use of that instrum ent as an appendage to its own authority.
I t has been stated, as an auxiliary test of constitutional authority, to try
whether it abridges any pre-existing right of any State or any individual. The
proposed measure will stand the most severe examination on this point. Each
State may still erect as many banks as it pleases: every individual may still
carry on the banking business to any extent he pleases.
Another criterion may be this; whether the institution or thing has a more
direct relation, as to its uses, to tne objects of the reserved powers of the State
Government, than to those of the powers delegated by the United States?
T his rule, indeed, is less precise than the former; but it may still serve as
some guide. Surely, a bank has more reference to the objects intrusted to the
national Government than to those left to the care of the State Government.
The common defence is decisive in this comparison.
It is presumed, that nothing of consequence in the observations of the Se
cretary of State and Attorney General, nas been left unnoticed.
T here are, indeed, a variety of observations of the Secretary of State, de
signed to show, that the utilities ascribed to a bank, in relation to the collec
tion of taxes and to trade, could be obtained without it. To analyze which,
would prolong the discussion beyond all bounds. It shall be forborne for two
reasons: first, because the report concerning the bank, may speak for itself in
this respect; and, secondly, because all those observations are grounded on
the erroneous idea, that the quantum of necessity or utility is the test of a
constitutional exercise of power.
One or two remarks only shall be made; one is, that he has taken no notice
of a very essential advantage to trade in general, which is mentioned in the
report as peculiar to the existence of a bank circulation, equal, in the public
estimation, to gold and silver. It is this that renders it unnecessary to lock
up the money ot the country to accumulate for months successively, in order
to the periodical payment of interest. The oMier is this: that his arguments
to show that treasury orders and bills of exchange, from the course of trade,
will prevent any considerable displacement of the metals, arc founded on a
particular view of the subject. A case will prove this. T he sums collected
in a State, may be small in comparison with the debt due to it. T he balance
o f its trade, direct and circuitous with the Seat of Government, may be even,
ornearlyso. H ere, then,without bank bills,which, in that State, answer the pur
pose of coin, there must be a displacement of the coin, in proportion to the dif
ference between the sum collected in the State, and that to be paid in it. W ith
bank bills no such displacement would take place; or, as far as it did, it would
be gradual and insensible. In many other ways, also, would there be at least
a temporary and inconvenient displacement o f tne coin, even where the course
of trade would eventually return it to its proper channels.
The difference of the two situations, in point of convenience to the treasury,
can only be appreciated by one who experiences the embarrassments of m a t
ing provision for the payment of the interest on a stock, continually changing
place in thirteen different places.
One thing which has been omitted, ju st occurs, although it is not very ma
terial to the main argument. The Secretary of State affirms, that the bill
only contemplates repayment, not a loan to the Government. But here he is
certainly mistaken. It is true, the Government invests in the stock of the
bank, a sum equal to that which it receives on loans. B ut let it be remem
bered. that it does not, therefore, cease to be a proprietor of the stock, which
would be the case, if the money received back were in the nature of a pay
ment. It remains a proprietor still, and will share in the profit or loss of the
institution, according as the dividend is more or less than the interest it is to
pay on the sum borrowed- H ence that sum is manifestly, and in the strict
est sense,a loan.
A L E X A N D E R H A M IL T O N .
Philadelphia, February 23, 1791.

C H A R TE R OF 1791.
W

H $

ed n esd a y noon,

23d February, 1791.

S ir : I have this moment received your sentiments with respect to the con
stitutionality ot’ the bill “ to incorporate the subscribers to the Hank of the
United States.”
T his bHl was presented to me by the the joint committee of Congress,
a t 12 o’clock on Monday, the 14th instant. T o w hat precise period, by legal
interpretation of the constitution, can the President retain it in his possession,
before it becomes a law by the lapse of ten days?
GEO . A V A S H IN G T O N .

To the Secretary q f the Treasury.
F fb Ruary, 23, 1791.
S i r : In answer to your note of this morning just delivered to m e, I give it

as my opinion, that you have ten days, exclusive o f that on which the bill was
delivered to you, and Sundays; hence, in the present case, if it is returned
on Fritlay, at any time while Congress are sitting, it w ill be in time.
It might be a question, i f returned after their adjournment on Friday.
I have the honor to be, with perfect respect, sir,
Your most obedient servant,
A . H A M IL T O N .

T o the President q f the United States.

P h ila d e lp h ia ,

February 24, 1791.

S i r : I have just heard from the Senate, that the bill supplementary to that

For incorporating the bank w ent through a second reading, and a question
was taken upon it, and only three or four dissentients; among these were Mr.
Carroll and Mr. Monroe.
It would Rave been passed this day without doubt, but the opponents in
sisted on the rule o f the H ouse, which made it impossible. It w ill be passed
the first thing to-morrow.
The yeas and nays were taken, in order to please the members.
I have the honor to be.
M ost respectfully and affectionately, sir, &c.
A. H A M IL T O N .

T o the. President q f the United States.

hursday,

February 25, 1791.

S ir : T he bill supplementary to the Bank b ill, passed the House of Repre
sentatives yesterday. General Schuyler informs me, that the friends of the
bank proposed that it should pass to a second reading im m ediately, and that
Mr. Carroll opposed itj and moved that it should be printed—that, by a rule
ot the H ouse, it was ot necessity to comply with M r. Carroll’s objection, a
departure requiring unanimous consent. That, accordingly, the bill was
deferred till to-day, and in the mean tim e, ordered to be printed.
It w ill, doubtless, pass, if there are not studied delays on the part o f the

opposers o f the bank.
I have the honor to be, with perfect respect, &c.

The President qf the United States.
15

A . H A M IL T O N .

114

BANK OF THE UNITED STATES
SU PPLEM EN TA RY BILL.
H ouse o f R e p r e s e n t a t iv e s ,

February 9, 1791.

Ordered, T hat a committee be appointed to prepare and bring in a bill or
bills supplementary to the foregoing act, and that M r. Smith, of S. C . M r.
W illiam son, and Mr. Yining, be the said committeeOn the 10th, M r. S m i t h , from the said committee, presented a bill, which,
on the 23d of February, passed the House^ and afterwards the Senate, and
was approved by the President on the 2d of M arch, 1791.
I t regulated the time of subscription to the stock of the bank, the amount
of specie to be paid, &c.
[See the act in 1st vol. U . S. L aw s, p. 177, Story’s edition.}

SU PPLE M E N T S TO T H E A C T OF 1791, INCORPORATING T H E U N IT E D
ST A T E S BANK-

T h e first supplementary act upon this subject which was passed, was that
of the 2d of M arch, 1791, heretofore referred to, varying the time of sub
scriptions, and the amount of specie paym ents, &c.
On the 27th of June, 1798, an act was passed wto punish frauds committed
on the Bank of the United States,” by which the forging or uttering of coun
terfeit bills, notes, orders, or checks, by or upon the bank, subjected th e
offender to imprisonment at hard labor, for a period not less than three, nor
more than ten years. [See Law s of U. S. of 1798, chap. 78.]
By an act passed the 23d of March, 1804, power \vas_ given to the Presisident and Directors of the Bank, to establish offices of discount and deposite
w in any part of the territories or dependencies of the United States,” m the
manner and on the term s prescribed by the original act. [See U . S . laws,
1804, chap. 32.]
A n additional act, “ to punish frauds committed on the bank,” was passed
on the 24th of February, 1807. [See chap. 75,in Story’s edition, of U . S . la-*»»
vol. 2d, p. 1048.]

C H A PT E R

III.

P R O C E E D IN G S O N T H E MEMORIAL OF T H E STO C K H O LD ER S O F T H E BANK F O R A
R EN EW A L OF T H E CHARTER OF 1 7 9 1 .

Bv the lim it fixed in the original act of incorporation, the legal existence
o f the bank, as a corporate body, was to cease on the 4th of M arch, 1811.
In anticipation of that event, its directors thought it advisable, at an early
period, to apply to Congress for a renewal of their powers. T h e circum
stances connected with its origin, and its relation to the political parties, by
whom the Government, at different periods of its existence, had been adm in
istered, might have suggested a doubt whether an extension of the charter
would be granted. In its enactment, a large majority of Congress had, in
deed, concurred, and it had enjoyed, in the outset, the entire confidence of
the Executive Government of the Union; but a political revolution had been
effected, and those who had given it being, were themselves, by the will of
the People, divested of a controlling power. Two, among the early opposers
o f the Dank, had successively filled the Executive chair. H ow far these
changes in the aspect and relative condition of parties, affected the destinies
o f this institution, it is not for the editors to determ ine; but, doubtless, they
were not without their influence.
T he following proceedings and debates, which took place, both in the
House and the Senate, on the bill to renew the charter, are of a highly inter
esting and instructive character, and may enable the reader to decide ques
tions upon which the editors will not presume to speculate.
l a ^s< S a ^ o n * 8’ |

o u se of

R e p r e s e n t a t iv e s ,

M arch 2 6 , 1808.

A memorial of the stockholders of the Bank of the United States, praying
a renewal of their charter, was presented and read : whereupon,
A motion was made, by M r. J o s e p h C l a y , “ that it be referred to the S e
cretary of the T reasury, with instruction to him to examine the m atter thereof,
and report his opinion thereupon to the House.”
M r. R a n d o l p h moved to postpone the consideration of the reference of the
memorial, till Monday following, which motion the S p e a k e r decided, was
not in order.
A motion was then made by M r. D a vid R . W il l ia m s , th at the memorial
be referred to a Committee of the W hole House, which, superseding the mo
tion for a reference to the Secretary of the Treasury, the question was taken
thereon, and decided in the affirmative.
Jlesolved, T h a t the said memorial be the order of the day for M onday next.
T he subject, however, was not further acted on in this House during the
session.
I n S e n a t e , A p ril 2 0 , 1808.

M r. G r e g g presented the memorial of the stockholders of the Bank of the
U nited States, praying a renewal of their charter, for reasons stated at large
in their memorial, which was read.
Ordered, T h at it be referred to the Secretary of the T reasury, to consider
and report thereon at the next session of Congress.
IOt ii C ongress ,

2d Session.

arch

1809

MARCH o, laO J.

T he President of the Senate communicated the report of the Secretary of
the T reasury, on the memorial of the stockholders of the Bank of the United
States, referred to him on the 20th of April last, which is as follows:

116

BANK OF T H E UN ITED ST A T E S.

Report o f the Secretary o f the Treasury on the subject o f a N ational B a n k ,
made to the Senate, March 2 , 1809.
T he Secretary of the Treasury, to whom was referred the memorial of the
stockholders of the Bank ot the United States, praying for a renewal of
their charter, which will expire on the 4th day of M arch, 1811, respectfully
submits the following report:—
T he Bank of the United States was incorporated by act of M arch 2 d,
1791, with a capital of ten millions of dollars, divided into ‘25,000 shares, of 400
dollars each. Two millions of dollars were subscribed by the United States,
and paid in ten equal annual instalments. O f the eight millions of dol lars
subscribed by individuals, two millions w erepaid in specie, and six millions
in six per cent, stock of the United States. T w o thousand four hundred and
ninety-three of the shares belonging to Government, were sold in the years
1796 and 1797, at an advance of 25 per cent.; two hundred and eightv-seven
were sold in the year 1797, at an advance of 20 per cent.; and the other two
thousand two hundred and twenty shares, in the year 1802, at an advance of
45 per cent.; making, together, exclusively of the dividends, a profit of
671,860 dollars to the United States. T he greater part of the six per cent,
stock originally paid by the stockholders, has since been sold by tne bank:
a portion has been redeemed by Government, by the operation of the annual
reimbursement, and the bank retains at present only a sum of $2,231,598 in
six per cent, stock.

About eighteen thousand shares of the bank stock, are held by persons
residing abroad, who are, by the charter, excluded from the right of voting.
The stockholders resident within the United States, and who have the exclu
sive control over the institution, hold only seven thousand shares, or little
more than one-fourth part of its capital. 'I hey appoint, annually, twenty-five
directors of the bank itself, which is established at Philadelphia; and those
directors have the entire management of the discounts and other transactions
of the institution in that city, and the general superintendence and appoint
ment of the directors and cashiers of the offices of discount and deposite, esta
blished in other places. There are at present eight of those offices, viz: at
Boston, New York, Baltimore, Norfolk, Charleston, Savannah, the City of
Washington, and New Orleans. The two last were established at the request
of the Secretary of the Treasury.
The profits of a bank arise from the interest received on the loans made
either to Government or to individuals; and they exceed six per cent, or the
rate of interest at which the loans are made, because every bank lends not
only the whole of its capital, but also a portion of the moneys deposited for
safe keeping in its vaults, either by Government or by individuals. For every
sum of money thus deposited, the party making that deposite, either receives
the amount in bank notes, or obtains a credit on the books of the bank. In
either case, he has the same right at any time to withdraw his deposite; in the
first case, on presentation ana surrender of the bank notes; in the other case,
i by drawing on the bank for the amount. Bank notes and credits on the
books of the bank, arise, therefore, equally from deposites, although the credits
alone are, in common parlance, called deposites; and the aggregate of those
I credits, and of the banlc notes issued, constitutes the circulating medium ;
I substituted by the banking operations to money; for payments from one indi- •
vidual to another are equally made by drafts on the bank, or by the delivery
of bank notes. Experience has taught the directors what portion of the mo
ney thus deposited, they may lend; or, in other words, how far they may, with
safety, extend their discounts beyond the capital of the bank, and what amount
of specie it is necessary they should keep in their vaults. The profits, and,
therefore, the dividends of a bank, will increase in proportion as the directors
will increase loans of the moneys deposited, and suffer the amount of specie
on hand to diminish. Moderate dividends, when not produced by some par
ticular cause, which checks the circulation of bank paper, are tne best evi
dence of the.safety of the institution, and of the wisdom of its direction.

ON T H E BILL TO RENEW T H E C H A R TE R OF 1791.

The annexed table of all the dividends made by the Bank o f the United
States since its establishment, shows that they have, on an average, been at
the rate of 8 | (precisely 8 jf ) per cent, a year, and proves that the bank has
not, in any considerable degree, used the public deposites for the purpose of
extending its discounts.

From what has been premised, it appears that the property of a bank in full
operation, consists of three general item s, viz: 1st, outstanding debts, con
sisting principally of the notes payable at sixty days, which have been dis
counted at the bank: 2dly, specie in the vaults: 3dly, buildings necessary for
the institution. On the other hand, the bank owes, 1st, to the stockholders,
the amount of the capital stock originally subscribed, payable only in case of
the dissolution of the institution: 2dly, to Government or individuals, the
whole amount of moneys deposited, payable on demand, and including both
the credits on the bankbooks, commonly called deposites, and the bank notes
in circulation. The account is balanced by the amount of undivided profits
and accruing discounts, which constitute the fund for defraying current ex
penses, for paying subsequent dividends, and for covering contingent losses.
T he following statement of the situation of the Bank of the United States,
including its branches, exhibits the true amount o f public stock which is still
held by the institution, o f the cost o f its buildings and lots o f ground, and o f
the undivided surplus or contingent fund subsequent to the dividend made in
January last. But the amount of loans to individuals or discounts, of specie
in the vaults, and of moneys deposited, including both the credits on the bank
books, commonly called deposites, and the bank notes in circulation, is taken
on a medium; and, so far as relates, on the credit side of the account, to specie
on hand, and, on the debit side, to deposites, is several millions of dollars less
than it happens to be at this moment; both having been sw elled much beyond
the average by the embargo, and by the unusually large balance in the trea
sury, which is principally deposited in the bank. Some minor item s, arising
from accidental circumstances, are omitted for the sake of perspicuity.

C r.
I. Debts due to the bank, viz:
1. Six per cent, stock o f the United States, being the
residue o f that part of the original subscription
paid in public stocks, which is still held by the

bank,

- $2,230,000

2. Loans to individuals, consisting chiefly o f d is
counted notes, payable at sixty days, and, in some
instances, of bonds and mortgages taken, in order

to secure doubtful debts,
.
.
.
3. Due by banks incorporated by the States,
II. Specie in the vaults,
III • Cost o f lots of ground, and buildings erected,
Total C r.
D

15,000,000
800,000
--------------- 18,030,000
5,000,000
480,000
-

823,510,000

I. Capital stock of the bank, payable to the stockhold
ers whenever the institution may be dissolved, $10,000,000

I I. Moneys deposited, viz:
1. Credits on the bank books, commonly
called deposites, including the deposites
both by Government and by indivi
duals,
. • 8,500,000

2. Bank notes in circulation,

- 4,500,000
------------- 13,000,000
Total Dr.

• ^823^000,000

118

BANK OF T H E U N ITE D ST A T E S.

Balance, being the amount of undivided profits, commonly called
the “ contingent fund,” and applicable to cover losses which
may arise from bad debts or other contingencies, and to extra
dividends,
-

$510,000

I t sufficiently appears from that general view, that the affairs of the Bank
of the United States, considered as a moneyed institution, have been wisely
and skilfully managed.
T he advantages derived by Government from the bank, are nearly of the
same nature witn those obtained by individuals, who transact business with
similar institutions, and may be reduced to the following heads:
1. Safe keeping o f the public moneys. This applies not only to moneys al
ready in the treasury, but also to those in the hands of theprincipal collectors, of
the commissioners of the loans, and of several other officers, and affords one
of the best securities against delinquencies.
2. Transm ission o f public moneys. As the collections will always, in
various quarters of the extensive territory of the Union, either exceed or fall
short of the expenditures in the same places, a perpetual transmission of mo
ney, or purchase of remittances at the risk and expense of the United States,
would become necessary, in order to meet those demands; but this is done by
the bank at its own risk and expense, for every place where one of its branches
is established, which embraces all payments of any importance.
3. Collection o f the revenue. The punctuality of payments introduced by
the banking system, and the facilities afforded by the bank to the importers
indebted for revenue bonds, are amongst the causes which have enabled the
United States to collect with so great facility, and with so few losses, the
large revenue derived from the impost.
4. Loans. Although the prosperity of past years has'enabled Government,
during the present administration, to meet all the public demands, without
recurring to loans, the bank had, heretofore, been eminently useful in making
the advances, which, under different circumstances, were necessary. There
was a time when, exclusively of the six per cent, stock held by the institution
as part of the original subscription, the loans obtained by Government from
the bank, amounted to 6,200,000 dollars. A nd a similar disposition has been
repeatedly evinced, whenever the aspect of public affairs has rendered it proper
to ascertain whether new loans might, if wanted, be obtained.
T he numerous banks now established, under the authority of the several
States, might, it is true, afford considerable assistance to Government in its
fiscal operations. There is none, however, which could effect the transm is
sion of public moneys with the same facility, and to the same extent, as the
Bank of the United States is enabled to do, through its several branches.
T he superior capital of that institution offers, also, a greater security against
any possible losses, and greater resources in relation to loans. N or is it eligi
ble, that the General Government should, in respect to its own operations,
be entirely dependent on institutions over which it has no control whatever.
A national bank, deriving its charter from the National Legislature, will,
at all times, and under every emergency, feel stronger inducements, both from
interest and from a sense ot duty, to afford to the Union every assistance
within its power.
T he strongest objection against the renewal of the charter seems to arise
from the great portion of the bank stock held by foreigners— not on account of
any influence it gives them over the institution, since they have no vote—but
of the high rate of interest payable by America to foreign countries, on the
portion thus held. I f the charter is not renewed, the principal of that portion,
amounting to about 7,200,000 dollars, m ust, at once, be remitted abroad; but,
if the charter is renewed, dividends, equal to an interest of about 81 per cent,
a year, must be annually rem itted in the same manner. T he renewal of the
charter will, in that respect, operate, in a national point of view, as a foreign
loan, bearing an interest of 8] per cent, a year.

ON T H E BILL TO RE N E W T H E C H A R TE R OF 1791.

JJQ

T hat inconvenience might, perhaps, be removed, by a modification in the
charter, providing for the repayment of that portion of the principal by a new
subscription to the same am ount, in favor of citizens; but it does not, at all
events, appear sufficient to outweigh the manifest public advantages derived
from the renewal of a charter.
.
T h e conditions in favor of the public, on which this should be granted, are
the next subject of consideration.
T he nett profit annually derived by the stockholders, from a renewal of the
charter, is equal to the difference between the annual dividends and the m ar
ket rate of interest. Supposing this to continue at six per cent, during the
period granted by the extension of the charter, and the dividends to be on an
average at the rate of 8 j per cent., that profit will be 2 j per cent, a year.
If the charter be extended twenty years, the value of the privilege will be
equal to an annuity of 2£ per cent, on the capital, that is to say, of 250,000 dol
lars, for tw enty years; and such annuity being payable semi-annually, is
worth almost 2.890,000 dollars. T his, however, would be much more than
any bank would give for a charter, as it would leave it nothing but the right
of dividing a t the rate of six per cent, a year, which the stockholders have
without a charter. I t is believed, that they would not be willing to give even
h alf th at sum for the extension: and that about 1,250,000 dollars may be con
sidered as the maximum, which could be obtained, if it was thought eligible
to sell the renewal of the charter for a fixed sum of money.
I t is, however, presumed, that the decision on the conditions, which may
be annexed to an extension of the charter, will be directed by considerations
of a much greater importance than the paym ent of such sum into the treasury.
The object will, undoubtedly, be to give to the institution all the public
utility of which it is susceptible, and to derive from it permanent and solid
advantages, rather than mere temporary aid. U nder these impressions, the
following suggestions are respectfully submitted:
I. T h at the bank should pay interest to the United States, on the public

deposites, whenever they shall exceed a certain sum, which might perhaps
be fixed at about three millions of dollars.

II.

That the bank should be bound, whenever required, to lend to the United
States a sum not exceeding three-fifths of its capital, at a rate of interest
not exceeding six per cent.; the amount of such loan or loans to be paid
by the bank in instalments, not exceeding a certain sum, monthly, and
to be reimbursed at the pleasure of Government.
III. That the capital stock of the bank should be increased to thirty millions
of dollars, in the following manner, viz:
1. Five millions of dollars to be subscribed by citizens of the United States,
under such regulations as would make an equitable apportionment amongst
the several States and Territories.
2 . Fifteen millions to be subscribed by such States as may desire it, and
under such equitable apportionment amongst the several States as may be
provided by law; and a branch to be established in each subscribing State, if
applied for by the State.
3. T he payments, either by individuals or States, to be either in specie or
in public stock of the United States, at such rates as may be provided by law.
4. T he subscribing States to pay their subscription in ten annual instalments,
or sooner if it suits their convenience, but to receive dividends in proportion
only to the amount of subscription actually paid; and their shares of bank
stock not to be transferable.

IV. That some share should be given in the direction to the General and
State Governments, the General Government appointing a few directors
in the general direction, and the Government of each subscribing State
appointing a few directors in the direction of the branch established in
such State.

]2 0

BANK OF T H E U N ITE D ST A T E S.

T he result of that plan would be, 1st., that the United States, receiving an
interest on the public deposites, might, without inconvenience, accumulate
during years of peace and prosperity, a treasure sufficient to meet periods of
w ar and calamity, and thereby avoid the. necessity of adding, by increased
taxes, to the distresses of such periods. Secondly, that they might rely on a
loan of eighteen millions of dollars, on any sudden emergency. Thirdly,
that the payment of the greater part of the proposed increase of capital, being
made in ten annual instalments, that increase would be gradual, and not more
rapid than may be required by the progressive state of the country. Fourth
ly, that the bank itself would form an additional bond of common interest and
union amongst the several States.
All which is respectfully submitted.
A L B E R T G A L L A T IN .
T r e a s u r y D e p a r t m e n t , March 2 d, 1809.
D ividends on United States’ B a n k Stock.

Kate p e r
c e n t.

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

July,
1792
January, 1793
July,
“
January, 1794
July,
“
January, 1795
July,
“
January, 1796
July,
“
January, 1797
July,
“
January, 1798
July,
“
January, 1799
July,
“
January, 1800
July,
“

4
4
3j|
3}
4
4
4
4
4
4
4
5
4
4
4
4
4

H o u se

No.

18
19
| 20
21
22
23
24
25
26
27
28
29
30
31
32
33
34

Rate Per
c e n t.

January,
July,
January,
July,
January,
July, *
January,
July,
January,
Ju ly ,
January,
July,
January,
July,
January,
July,
January,

R e p r e s e n t a t iv e s ,

1801
“
1802
“
1803
“
1804
“
1805
“
1806
“
1807
“
1808
“
1809

6
4
4j
44
4|
4
4-£
4
4
4
4
4
6
4
4
4
4

December 4 , 1809.

M r. N i c h o l a s m oved the follow ing resolution:
Resolved, T h at provision be made by law for a general national establish
m ent of banks throughout the United States, and that the protits arising from
the same, together with such surplusses of revenue as may accrue, be appro
priated tor the “ general welfare,” in the construction of public roads and
canals, and the establishment of seminaries for education, throughout the
United States.
T he resolution was read, and ordered to lie on the the table.
J a n u a r y 2 9 , 1810.

On motion of M r. S e y b e r t ,
Ordered, That t h e memorial o f t h e stockholders o f t h e Bank of the United
States, presented on the 2 6 t h March, 1 8 0 8 , b e referred to Mr. Montgomery,

ON T H E BILL TO RENEW T H E C H A R TE R OP 1701.

J2 1

Mr. Dana, M r. Bassett, M r. Seaver, M r. Seybert, Mr. Gold, and M r. Tay
lor, to consider and report thereon to the House.
F e b r u a r y 6 , 1810.

T he House proceeded to consider the resolution o t M r . N i c h o l s o n , * of the
4 th December last, for the establishment of banks, and the application of their
profits; whereupon, a division of the question on the said resolution was call
ed for by M r. S a w y e r , to the word “ States,” inclusive, in the second line
o f the resolution.
.
A motion was made by M r. Ross, that the first member contained within
the same, to the word “ States,” inclusive, in the second line, be referred to
a Committee of the W bole House;
W h ic h w a s d e te r m in e d in th e n e g a tiv e .
A m o tio n w a s th e n m a d e b y M r . S a w y e r , th at th e said first m em b er b e r e
fe r r e d to a s e l e c t c o m m itte e ;
W h ic h w a s a lso d e te r m in e d in th e n e g a tiv e .
F e b r u a r y 19, 1810.

Mr. M o n t g o m e r y , from the committee appointed on the 29th ultimo, on
the memorial of the stockholders of the Bank of the United States, made the
following report thereon; which was read and referred to a Committee of the
W hole House to-morrow.
R E PO R T OF T H E COM M ITTEE.

T h e committee to whom was referred the petition of the stockholders of the
Bank of the United States, beg leave to submit the following report:
T h at, in proceeding to the consideration of the said petition, your com
mittee instructed their chairman to address a letter to the Secretary of the
T reasury, requesting him to furnish such information or observations as he
might think proper, in relation to the subject m atter thereof, as connected
with the financial and commercial interests of the United States. In reply
to which, the Secretary, by his letter to the chairman, referred your commit
tee to his former report on the said subject, made to the Senate of the United
States, in obedience to the order of that House.
_
Your committee have been attended by agents of the petitioners, who, in
addition to the m atters contained in the petition, have suggested to your com
mittee, that the object of the petitioners was to obtain the renewal of the char
te r in its present form; that, for this renewal, the bank was willing to make
compensation, either by loans, at a rate of interest, or by a sum of money to
be agreed upon, or by an increase of the capital stock, by a number of shju-es
to be taken and subscribed for by the U nited States, to an amount adequate
to the compensation to be agreed upon for such renewal.
. _
These agents also suggested that they were fully authorized and empow
ered to offer and conclude the term s specifically connected with these propo
sitions.
Your committee, not feeling themselves authorized to enter into such terms,
and judging that the extent of those propositions would better apply to the
details of a bill, than to the adoption of a principle to be first settled by the
House, have, therefore, forborne to inquire into tne extent of the propositions,
an d , without expressing an approbation or rejection of those offers, or giving
an opinion as to the plan and reasoning of the Secretary of the T reasury, your
committee, in order that th e opinion of the House on this great national ques
tion, may be declared, previous to entering into the details connected with
the subject, recommend the following resolution:
•
In the Journal o f the H ouse for the day on which thi» resolution was first offered,
it if attributed to Mr. N icholas, w ho w aj a m em ber from Virgnniai it is here inputetl
to Mr. N icholson, who was from N ew York.

122

BANK OF T H E U N ITE D STATES-

Resolved, T hat it is proper to make provision for continuing the establish
ment of the Bank o f the United States, with offices o f discount ami deposite,
under the regulations necessary for the beneficial administration o f the na
tional finances, during such time and on such conditions, as may be defined
by law.
F

ebruary

2 2 , 1810.

M r. L o v e moved the following resolution:
Resolved, That it is expedient to inquire into the propriety o f establishing
a national bank.
T he said resolution being read, was referred to the Committee of the W hole
H ouse, to whom is committed the report of a select committee on the memo
rial o f the stockholders of the Bank o f the United States.
M
O n m o tio n o f Mr. L

arch

2 2 , 1810.

o v e,

Ordered, T hat the Committee o f the W hole House to which is committed
a resolution submitted by him, on the 22d ultimo, for the establishment of a
national bank, be discharged from the further consideration thereof, and that
the same be referred to M r. L ove, Mr. Montgomery, Mr. Sm ilie, M r. Quin
cy, M r. Desha, M r. Root, and M r. Marion.
M

ar ch

2 9 , 1810.

On motion o f M r. T a y l o r ,
Ordered, That the Committee o f the W hole House to which is committed
the report of a select comm ittee, on the memorial o f the stockholders o f the
Bank o f the U nited States, be discharged from the consideration thereof, and
that the said report be referred to Mr. Taylor, Mr. M um ford,M r. P itk in , M r.
J. Porter, M r. G ray, Mr. Howard, and M r. Cook, with instruction to re
port by bill.
A

p r il

2 , 1810.

Mr. L o v e , from the committee appointed on the 22d ultim o, presented a
bill to establish a national bank, which was read the first time.
On motUm, the said bill was read the second time, and committed to Ccomm ittee o f the W hole House on Thursday next.
M r. L o v e a ls o m a d e a w r i t te n r e p o r t i n r e la tio n to th e p r i n c i p le s o f th e sa id
b i l l , w h ic h w a s r e a d , a s fo llo w s :

T h e committee to whom was referred on the 22d o f March last, a resolution re
lative to the establishment o f a national bank, beg leave further to report:
T hat they have had the subject thereof under consideration, and in every
view they have been able to take o f it, perceive great difficulties to occur:
nor is a majority o f them by any means satisfied, that the bill they have agreed
should be reported to the H ouse, presents the best mode for the establish
ment o f a national bank. T hey have been induced, however, to direct their
chairman to report the same for the consideration of the H ouse, without there
by intending to pledge their opinions in support o f it, in preference to any
other system or project which may be devised, on this very important subject.
T he said bill is as follows:
A B IL L TO E ST A B L ISH A N A TIO N A L BANK.

B e it enacted by the Senate and House o f Representatives o f the United
States o f America in Congress assembled, T hat a bank shall be established
in the city of W ashington, in the D istrict o f Columbia, with branches thereof
in the territories o f the U nited States, and in the States, respectively, on
application o f the Legislatures thereof, in manner hereinafter mentioned, the
capital of which shall not exceed fifteen millions o f dollars, to be divided into

ON T H E B IL L TO RE N E W T H E C H A R TE R O F 1791.

Jg S

shares ot four hundred dollars each; and that, for the purpose of constituting
three millions of the capital stock of said bank, the Secretary of the Treasury
be, and he hereby is, authorised, to cause to be created certificates of stock,
signed by the Register of the Treasury, in favor of any citizen of the United
S tates, or the territories thereof, for the sum of three millions of dollars, or
any less sum, to bear an interest of six per centum per annum , from the time
o f delivery to the purchasers; which debt shall be reimbursable at the plea
sure of the U nited States, at any time after ten years, and not sooner; no
certificate for which shall be issued for a less sum than four hundred dollars,
and when for a larger sum, shall be to an amount, the principal of which shall
be capable of simple divisions into sums of four hundred dollars; the same
shall be receivable in subscriptions to the capital stock of the national bank
aforesaid; and, for every four hundred dollars of the principal thereof, the
subscriber, being a citizen of the U nited States or territories, shall be entitled
to one share of die capital stock of the said bank, and may subscribe accord
ingly, in books to be opened for that purpose in the city of W ashington,
aforesaid, on the first day of January, in the year one thousand eight hundred
and eleven, under the superintendence of three persons, who shall be ap
pointed, by the President of the United States, commissioners for receiving
subscriptions to the said bank, any two of whom may act, and receive subcriptions as aforesaid, until the fourth day of M arch, in the year one thousand
eight hundred and eleven. The sale of the stock aforesaid, shall be made by
the Secretary of the T reasury, in such portions, and at such times, as he shall
find necessary or expedient, for the best price he can obtain, either for money
or the six per cent, funded debt of the United States, as the exigencies of the
Government may render proper; and a credit or credits, for such newly
created stock, snail be given to the purchaser thereof, on the books of the
treasury, in like manner as for the present domestic funded debt, which said
credits or stock shall thereafter be transferable, except as herein before
mentioned, only on the books of the treasury of the United States, by the
roprietor or proprietors of such stock, his, her, or their attorney, and may
e so disposed o f by the national bank company, their agent or attorney, to
any person, or persons, whatsoever, or his, her. or their assigns, in manner
aforesaid; and, for the reimbursement of the principal of the said stock and
payment of the interest thereon quarter yearly at the treasury, the faith of the
G overnment of the United States is hereby pledged. So much of the pro
ceeds of the sales of the said stock as shall be received in money, shall be,
and hereby is, appropriated towards the discharge of any of the current ex
penses of the Government, which the Secretary of the Treasury may deem
most proper.
S e c . 2. A n d be it fu rth e r enacted, T hat if the whole of the said sum of
three millons of dollars^shall not have been issued in stock, in manner afore
said, on or before the first day of January, in the year one thousand eight
hundred and eleven, and, also, in case none of the same shall have been then
issued, then, for the whole, or any part thereof, (as the case may be,) sub
scriptions shall be opened, within sixty days thereafter, in such ot the princi
pal towns in the United States as the President o f the United States shall
direct, under the superintendence of such persons as he shall appoint, not less
than three; and a majority of the said persons at the said places, respectively,
shall be sufficient to perform the duties of their appointment. It shall be tne
duty of the said commissioners to advertise the tim e and place for receiving
such subscriptions within the said towns, respectively, in some newspaper
printed therein, for the space of tw enty days, at least, before they shall open
books to receive subscriptions as aforesaid; they shall keep the subscription
open for the term of three days, and no longer, if the subscriptions for the
amount of stock, directed by the President of the United States to be taken
at such places, respectively, are completed in that time, but if they shall not
be completed at the expiration of that tim e, they shall keep them open for the
term of sixty days, unless the subscription is sooner completed; but if the
subscription is completed before the expiration of three days from the time it

124

BANK OF T H E U N ITE D ST A T E S.

is opened, then, and immediately after the same shall be so filled, no person',
copartnership, or body politic, shall, during the remainder of the term afore
said, be permitted to subscribe for more than five shares; and it shall be law
ful for any citizen of the United States, copartnership, or body politic, within
the United States, in person, or by attorney, to subscribe for any number of
shares, not exceeding one hundred in one day, and all the subscriptions made,
and shares obtained in consequence thereof, shall be deemed and held to be
for the sole use and benefit ot the person or persons, copartnership, or body
politic, subscribing, or in whose behalf the subscriptions, respectively, shall
be declared to be made at the time of making the same, any bargain, con
tract, promise, or agreement, to the contrary notwithstanding. And in case
the amount of subscriptions, at any of the said places, shall exceed the num
ber of shares appointed to be taken at such place, in the first three days, the
excess, thus created, shall be reduced within the number of shares authorised
to be subscribed at such place, or places, respectively, in manner following,
that is to say: from (he subscription, and subscriptions highest in amount, the
commissioners shall subtract a share, or shares, until the same shall be made
equal to the subscription, or subscriptions, next highest in amount; and, as
often as the case shall require, they shall proceed to subtract a share, or
shares, from the subscription, or subscriptions, remaining, from time to tim e,
highest in amount, until the aggregate or all the subscriptions be reduced to
the number of shares authorised to be subscribed at the places which shall be
appointed respectively; and if by and after the operation of the said subtrac
tion, as often as the same shall be necessarily made, a greater number of
shares may be allowed to one or more of the subscribers than to the rest, or if
the number of shares shall eventually be greater than the number of shares
authorised at such places, respectively, so that, at least one share cannot be
allowed to each subscriber, then, and in either of the before mentioned cases,
the commissioners for such place shall ascertain by lot, in whom the greater
number of shares, or the rignt of subscribing for and retaining one share, (as
the case may be) shall be vested, and the subscriber, in whose favor the lot
may thereupon fall, shall be deemed, to all intents and purposes, the lawful
subscriber, and subscribers, for such share, or shares, respectively; and the
amount of the share, or shares, subscribed for, in manner afm-esaid, shall be
paid by the several and respective subscribers, in gold or silver coin, at its
lawful value, one-fourth thereof at the time of subscribing, one-fourth in sixty
days thereafter, one-fourth in one hundred and tw enty days thereafter, and
one-fourth in one hundred and eighty days from the time of the first election
of directors, or at any time sooner, that such subscriber, or subscribers, may
choose; the sums so received, respectively, shall be paid over by the said
commissioners to the order of the Secretary of the T reasury. And in case
any subscriber, as aforesaid, shall fail to pay any of the sums due from him.
her, or them, according to the terms of subscription, he, she, or they, shall
not be entitled to any dividend or dividends, or to vote on any such share,
until the payment of the sum due thereon, with interest from the time such
payment became due, shall be fully paid up and satisfied; a n d in case such
failure shall continue for the space of six months, such share, or shares, and
the sums which shall have been paid thereon, shall be wholly forfeited to the
use of the said bank, and the same shall be sold under such regulations as the
directors may establish. And the commissioners, aforesaid, shall, at the ex
piration of the three first days, and once in every ten days thereafter, as long
as the subscription continues open, transm it to tne Secretary of the Treasury
a fair list of all the subscriptions, and the names of the subscribers making
them.
S e c . 3. A n d be it fu rth er enacted. T h at, for the purpose o f constituting
five millions more of the capital stock of the said bank, the President of the
United States shall, immediately after the passage of this act, notify the Gov
ernors of each State thereof, and the Legislatures of the States which shall
enact laws authorising a subscription, in conformity to the provisions of this
act, may at a time to be appointed by the President of the United States, (not

ON T H E B IL L T O REN EW T H E C H A R TE R OF "1791.

J25

exceeding six, or less than three months, from the time of such legislative act
being notified to him,) cause to be subscribed at such place as such legislature
shall direct within such State, and on behalt of such State, or any citizen of the
U nited States or the territories thereof, to whom such State may assign or dis
pose of the right of subscribing, the following number of shares, to consist of
lour hundred dollars each, to wit: the State ot New Hampshire, four hun
dred shares; the State of Massachusetts, fifteen hundred shares; the
State of Connecticut, six hundred shares; Rhode Island, one hundred and fifty
shares ; Vermont, two hundred and fifty shares; the State of N ew York, fif
teen hundred shares ; N ew Jersey, six hundred shares ; Pennsylvania, sixteen
hundred shares; Delaware, one hundred and fifty sh a re s; M aryland, eight
hundred sh ares; Virginia, eighteen hundred shares; North Carolina, one
thousand shares ; South Carolina, six hundred shares; Georgia, five hundred
shares; K entucky, six hundred shares; Tennessee, three hundred shares; and
Ohio, one hundred aud fifty shares—and the amount payable on the shares so
respectively subscribed by the States, or any of them, or any of their assignees,
being citizens of the United States, shall be paid in gold or silver coin, at their
current value ; the first payment on each of which shares, shall be made at
the time of subscribing, to the amount of forty dollars, into the hands of such
persons, not less than three at each place of subscription, whom the States
shall respectively authorize to recieve the subscription, to the said capital stock,
of the appointment of which commissioners, as soon as made, the proper au
thority of the States shall notify the Secretary of the T reasury, who shall im
mediately direct the said commissioners to place the same to the credit of the
national bank company, in such bank or place of safe deposite as the Secretary
of the T reasury shall appoint, which deposite shall be subject to his order for
the use of said bank company, until the first election of directors of the said
bank to be thereafter made at the Seat of Government of the United States,
and the balance o f the sum due on each share as aforesaid, shall be paid into
the national bank at Washington, or any of the branches thereof, in gold or
silver coin, at their value, at such times, and in such portions as the stockhold
ers so subscribing shall choose: Provided, T hat the subscribers or stock
holders aforesaid, shall not be permitted to pay at any one time less than forty
dollars on each share, and shall not be entitled to any greater portion of the
dividends made by the said bank, than according, and in proportion to the
sum actually paid on the shares upon which such dividend is claimed, but
shall be entitled to such dividend, according to the portion paid on such share,
when any dividend shall be declared after the expiration of s4x months from
the time of any payment made, and not sooner. T he mode of opening such
subscriptions in the States, respectively, and carrying them into effect, except
as is by this act otherwise directed, shall be according to the rules and p ro
visions which such State so subscribing shall direct and establish : Provided,
T h at any forfeitures which accrue of the rights of subscribers to such stock,
shall be and enure to the use of the national bank company only.
S e c . 4. A n d be it fu rth er enacted, T h at such States as shall assent to the
provisions of this act, and choose to avail themselves thereof, shall, on or be
fore the first day of January, in the year one thousand eight hundred and
tw elve, notify by the proper authority, the P resident of the United States
thereof, and shall also by any law passed authorising the subscriptions afore
said, express the assent of the legislature thereof to the establishment of a
branch of the national bank within such State, and at such place as the direc
tors of the said bank at the Seat of the Government of the U nited States shall
appoint: Provided, T he capital assigned to such branch by the directors
aforesaid, shall not exceed the amount of capital subscribed for within such
State respectively : A n d provided, also, T hat, incase any of the States of the
Union shall fail to comply with the term s of this act, or to notify the President
o f the United States, on or before the first day of January, one thousand eight
hundred and twelve, of their assent to them, it shall be lawful for Congress to
extend the time for such assent to be given, until the first day of January, in
the year one thousand eight hundred and thirteen, and no longer; and in cage

126

BANK OF T H E U N ITED ST A T E S.

the States of the Union, or any of them, do not assent to the terms of this act,
a t or before the last mentioned period, for the whole amount of the sum here by proposed to be subscribed by the States, or for any part thereof, then sub
scriptions may be opened for a part, or the whole, (as the case may be,) by
order of a general meeting of the stockholders of tne said bank, in such man
n er, at such place, and at such time thereafter, as shall by the company of the
said bank, or the president and directors thereof, at the Seat of Government,
be appointed.
S e c . 5. A n d be it fu rth e r enacted, T hat, for the purpose of constituting
four millions more of the capital stock of the said banlc, it shall be lawful for
the P resident of the United States, and he is hereby authorised, at any time
within two years after the passing of this act, to cause a subscription to be
made on behalf of the United States, to an amount not exceeding four millions
of dollars, to be borrowed from the bank aforesaid, at any time after it goes
into operation, or sooner, from any person or body coporate, at a rate of in
terest not exceeding----- percent, and reimbursable in ten years,by equal an
nual instalm ents, or at any time sooner, or in any greater proportions that the
Government may thjnk t i t ; the first instalm ent to become due in one year
from the time the said bank goes into operation, at which time the first pay
m ent borrowed as aforesaid, shall be made to the said bank, or such other per
son or body corporate from whom the same may be borrowed by the United
S ta te s; and the sum so borrowed, with the interest quarter yearly thereon,
shall be reimbursable and paid out of any moneys in the treasury, not other
wise appropriated.
S e c . G. A n d be it fu rth er enacted, T h at, for the purpose of constituting
three millions more of the capital stock of the national bank, it shall be law
ful for the bank companies, or associations, which have been organized within
the D istrict of Colombia, or such of them as may choose, on or before the
fourth day of M arch, in the year one thousand eight hundred and eleven, in
pursuance of an order of the stockholders of the said banks, or either of said
banks; at a general meeting, to notify the Secretary of the Treasury of their
intention to subscribe their capital stock to the national bank, and if such
company or their agent or agents shall, in sixty days thereafter, pay into the
national bank, if it shall have commenced its operations, and if not, shall, in
sixty days after the first election of directors at W ashington, pay one-third of
the amount of the stock subscribed, in specie, and the remaining two- thirds in
good notesdue in ninety days, or a shorter period, which notes shall be endorsed
and guaranteed by the president of such bank on behalf of the company, then
such sums so paid in, shall entitle those for whose use the same may be paid, toa
share in the said bank for every four hundred dollars so paid; and it shall be
lawful for the Secretary of the Treasury to make any further arrangement with
the said companies, or associations, which, to him, shall seem right, and shall be
agreed on between them, in order effectually to incorporate the funds of such
bank company, or association,into the capital of the national bank, in the man
ner most convenient and profitable to the said companies and the national
bank; and, in case the said sum of three millions of dollars, or any part there
of, shall not be subscribed by the said bank companies, or associations, in man
ner herein provided, and at the times herein mentioned, or, if no notice of an
intention to do so is given by the time aforesaid, it shall be lawful for the
President of the U nited States, at any time after the fourth of M arch, in the
year one thousand eight hundred and twelve, with the assent of the stockhold
ers of the national bank, previously expressed at a general meeting, to cause
to be constituted the said three millions of dollars of the said stock, or so
much thereof as shall not have been so subscribed by the said banks, or asso
ciations, on the same terms and conditions, (with such alterations only as
m aybe necessary in point of form 'j as by the first and second sections of
this act, subscriptions of stock to the national bank are provided and direct
ed to be received.
S e c - 7. A n d be it fu rth e r enacted, T h a t the subscribers, t h e i r successors
and assigns, being bodies corporate and politic, within the United States, or

ON T H E BILL TO REN EW T H E C H A R TE R

1791.

the territories thereof, or being citizens of the United States, or the territories
thereof, shall be, and are hereby, erected and made a corporation and body po
litic, by the name and style of the president, directors and company of the na
tional bank, and by that name shall be, and are hereby, made able and capable
in law, to have, purchase, receive, possess, enjoy, and retain, to them and their
successors, land, rents, tenem ents, hereditaments, goods, chattels, and effects
o f what kind soever, to an amount not exceeding, in the whole, ten millions of
dollars, exclusive of the amount of the capital stock aforesaid, and the same to
sell, grant, alien, demise, or dispose of; to sue and be sued, implead and be im
pleaded, answer and be answered, defend and be defended, in courts of re
cord, or any other place whatsoever; and also to make, have, and use a com
mon seal, and the same to break, alter, and renew at (heir pleasure, and also to
ordain, establish, and put in execution such by-laws and ordinances, as shall
seem necessary and convenient for the government of the said corporation,
not being contrary to law or to this charter; and for the making whereof,
general meetings may be called by the directors, in the manner hereinafter
specified; and generally to do and execute all and singular the acts, matters,
and things which to them it shall or may appertain to do, subject, nevertheless,
to the rules, regulations, restrictions, limitations, and provisions in this act
prescribed and declared.
S e c . 8. A nd be it further enacted, T hat, for the well ordering the affairs of
the said bank, there shall be elected, annually, on the first M onday in January,
at the Seat of Government, directors, who shall be citizens or the United
States at the time of election, and shall be stockholders in the said bank, all
of whom shall be elected by the stockholders of said bank; and, at the same
time, the President of the United States shall appoint-------- other persons,
on behalf of the Government, as directors of said bank at W ashington; and
the Secretary of the T reasury, for the time being, shall be a director of said
bank, ex-officio. A t the same time, there shall be chosen, annually, in the
different States, or such of them in which branches of the national bank
shall be established, at the places where such branches are respectively es
tablished, by the stockholders,---------directors: and there shall be appointed,
under the authority of such S ta te ,-------- other directors, and by the Secretary
of the T reasury, on behalf of the United S ta te s ,-------- other directors, and
the said directors, so chosen and appointed, for the said bank and branches,
respectivejy, shall, at the first meeting held by them, respectively, choose
one of their number as a president of such bank, or branch bank; and the
president and directors so chosen and appointed, shall serve by virtue thereof,
from the time they shall be notified of their election, till the expiration of the
succeeding first Monday in January, and from thence, until they shall be no
tified of a subsequent election havrng been made, and no longer. T he first
elections shall be held at the time and in the manner herein after directed:
Provided, T h at in case it should at any time happen that an election of d i
rectors shall not be made, on any day when, pursuant to this act, it ought to
have been made, the said corporation shall not, therefore, be deemed to be
dissolved, but it shall be lawful on any other day, within one hundred days
thereafter, to hold and make an election of directors, by order of the Secre
tary of the Treasury, who shall advertise the same in a public manner, at the
place where such election is to take place, at least ten days before such elec
tion, at which election the same rules shall be observed as at other elections,
and such further rules as the said corporation shall d ire c t And in case of
the death, resignation, or absence from the United States, of a director in
the bank aforesaid, or any of the branches thereof, his place shall be filled by
a new choice, for the remainder of the term for which he was elected, by the
vote of a majority of the directors at the place where such vacancy shall h a p
pen. Every person voting at any election of directors, shall, previous to
giving his or her vote, make oath, or solemnly affirm, that he, or she, is a citi
zen of the U nited States; that the share or shares on which he or she offers
to vote, is, or are, really and bona fid e his or her own property, and not held
in trust, or for the use, benefit, or emolument, of any other person or persons

128

BANK OF T H E U N ITE D ST A T E S.

whatsoever; and when any person offers to vote as a proxy, an affidavit to
the same effect, of the person whom he represents, shall be sufficient, if made
before a proper authority; and to take any such oath falsely, shall be perjury,
and punishable as such on prosecution.by indictment or information.
S e c . 9 . A n d be it fu rth e r enacted, T hat, incase the certificates of stock
authorized by the first section of this act to be created, shall have been sold,
either in whole, or in part, at the time herein limited for the sale thereof, im
mediately thereafter, or as soon as the whole of said stock is sold (as the case
may be) books shall be opened, under the direction of the Secretary of the
T reasury, for the purpose of receiving subscriptions to the capital of the said
bank, in the stock so sold, if any, and certificates of a share in the national
bank, for each four hundred dollars of the principal of said public stock,
shall be granted to the holder or holders thereof, who shall present the same
for subscription, on or before the fourth day of M arch, in the year one thou
sand eight hundred and eleven; which public stock, so paid in, and constitut
ing a p art of the funds of the said bank, may, to the amount of one million
of dollars thereof, if the Secretary of the Treasury shall deem it necessarv,
in order to expedite the commencement of the operations of the said bank,
be sold for specie for the use of the said bank; and, as soon as the sum of one
million of dollars shall be received by the Secretary of the Treasury, for the
use of the said bank, in that, or in any of the ways directed by this act, for
obtaining subscriptions thereto, notice thereof shall be given by the Secretary
of the Treasury, in some newspaper printed in the city of W ashington, ana
also in some newspaper printed at the Seat of Government of each State, that
such sum has been received, and shall also notify a time, not less than fifty
days from the time of such publication, for making the first election and ap
pointment of directors for the said bank at W ashington: Provided, T hat it
shall not be at an earlier period than the fourth day ot M arch, in the year one.
thousand eight hundred and eleven, and an election for the directors for the said
Bank of W ashington shall accordingly be made. And the directors so appoint
ed and elected at W ashington, in pursuance of the directions of this act, shall be
capable of serving as sucn, until the next election shall be made under the
provisions of this act; and the said directors shall forthwith commence the
operations of the said bank, and provide for the establishment of such branches
thereof, as shall be authorized by any of the States of the Union, in pursuance
of the provisions of this act: and incase the bank companies, or associations,
in the D istrict of Columbia, shall subscribe according to the term s of this act,
shall establish a branch of the national bank in the town of A lexandria, and
another in Georgetown, and shall appoint, within tw enty days from the time
o f the terms of subscription being complied with by the said bank companies,
or either of them, the time and place when an election shall be held by the
stockholders f o r -------- directors of such branch banks, respectively, within
the D istrict of Columbia, as shall be established by th e m ,-------- in addition,
to whom shall be appointed by the Secretary of the T reasury, who, imme
diately after the first election, and at every election and appointment there
after, shall choose one of their own body as president; and successive elec
tions and appointments shall be held and made in the same manner, and under
the same regulations, as near as may be, for the said branches, as in the State
branches they are directed to be held, the Secretary of the Treasury performingall the duties, which the States respectively may perform in such elections,
and regulating all other m atters and things respecting the said branches, as
may be agreed on by him with the said companies or associations: Provided,
T h at the bank company, or association, organized in the city of Washington,
if they shall choose to incorporate themselves with the national bank, shall
be incorporated into the principal bank to be established there; and the S e
cretary of the treasury may, moreover, provide for the continuance of the
operation of the said banks, according to their present establishments, until
their funds shall, under the provisions of this act, be actually transferred to
the national bank, after whicn tim e, such associations and companies shall
b e c o n sid e r e d as clisaolvecL

ON T H E B IL L TO REN EW T H E C H A R TE R OF 1791.

J2 9

S e c . 10 . A n d b e it fu rth e r enacted, T hat the directors of the bank at W ashing
ton, shall allot to the said bank and the branches thereof, the portion of capital
which each shall, from time to time, be justly entitled to, subject to the re
strictions in this act provided, and may establish offices of discount and deposite,
as branches of the national bank, in any of the territories of the United States,
(except the D istrict of Columbia, in which branches s h a l l o n l y be established in
manner aforesaid,) and shall regulate the amount of capital to be placed in any
of the said branches; and in the said territories, (except that of Columbia,)
where branches are by them established, shall appoint nine directors for each
annually, and regulate the time and other things relative to their service, and
shall appoint a cashier and principal clerk of said territorial branches, when
by them established; but the directors of the said branch, or branches, of dis
count and deposite, respectively, shall appoint all other officers and servants,
of such branch bank, or banks. The directors of the said bank, at W ashing
ton, shall appoint such officers, clerks, and servants, as shall be necessary to
execute the business of the said bank, and the branches of the said bank, in the
several States, and in the D istrict of Columbia, shall appoint their officers,
clerks, and servants, under them, for the purposes of executing the necessary
business of their banks respectively; but tne salaries of such officers, clerks,
and servants, and of the compensation to be allowed to the presidents of the
different banks, shall be fixed on, and increased, or diminished, by the presisident and directors of the principal bank: Provided, Such salaries and
compensations, shall not be determined on, except when the Secretary of the
Treasury shall be present, and shall give his vote on the subject; and the di
rectors of the bank at W ashington, shall do every other m atter and thing,
not contrary to law, or the provisions of this act, which may be necessary for
the establishment and regulation of the said banks of discount and deposite,
in the said Territories, or States.
S e c . 1 1 . A n d be it fu rth e r enacted, T hat the following rules, restrictions,
limitations, and provisions, shall form, and be fundamental articles of the
constitution of said corporation, viz:
1 . T he number of votes to which each stockholder shall be entitled, except
the United States, and the States respectively, shall be according to the
number of shares he shall hold, in the proportions following, that is to say:
For one share, and not more than two shares, one vote: for every two shares
above two, and not exceeding ten, one vote: for every four share above ten,
and not exceeding thirty, one vote: for every six shares above thirty, and not
exceeding sixty, one vote: for every eight shares above sixty, and not exceed
ing one hundred, one vote: and for every ten shares above one hundred, one
vote. But no person, co-partnership, or body politic, shall be entitled to a
greater number than thirty votes. And after the first election, no share, or
shares, shall confer a rightof suffrage, which shall not have been holden three
calendar months previous to the day of election. None but citizens of the
United States, shall vote at any election, by proxy, or in person, nor shall be
a director of the national bank, or any of its branches.

2. N o t m o re th a n th r e e -fo u r th s o f th e d ir e c to r s in o ffic e , c h o se n b y th e
s to c k h o ld e r s , th e p r e s id e n t e x c e p t e d , sh a ll b e e lig ib le , or ca p a b le o f a p p o in t
m e n t for th e n e x t s u c c e e d in g y e a r . B u t , th e d ir e c to r w h o sh a ll b e p r e s id e n t
a t th e tim e o f a n e le c t io n , m a y a lw a y s b e r e - e le c t e d , or r e -a p p o in te d , as th e
c a se m ay b e.

3. None but a stockholder, being the owner of two shares, and being a citi
zen of the U nited States, and resident therein, shall be capable of being chosen
or appointed as a director.
4. No director shall be entitled to any emolument, unless the same shall
have been allowed by the stockholders, at a general meeting. T he stockhold
ers shall make such compensation to the president of the principal bank at
W ashington, for his extraordinary attendance at the bank, as shall appear to
them reasonable.
5. N o t le s s th a n a m a jo r ity o f d ir e c to r s sh a ll c o n s titu te a board for the
tr a n sa c tio n o f b u sin e s s, o f w h o m th e p r e s id e n t sh a ll a lw a y s b e o n e , e x c e p t in
17

130

BANK OF T H E U N ITE D ST A T E S.

case of sickness, or necessary absence; in which case, his place may be supplied
by any other director, whom he, by writing, under his hand, shall nominate
for the purpose.
6 . A number of stockholders, not less than fifty, who, together, shall be
proprietors of two hundred shares, or upwards, shall have pow er, at any time,
to call a general meeting of the stockholders, for purposes relative to the insti
tution, giving at least, ten weeks’ notice, in two public gazettes, of the place
where the bank is kept, and specifying, in such notice, the object, or objects,
of such meeting.
7. Every cashier, or treasurer, before he enters upon the duties o f his office,
shall be required to give bond, with two or more sureties, to the satisfaction
of the directors, in a sum not less than fifty thousand dollars, with condition
for his good behavior.
8 . T ne lands, tenements, and hereditam ents, which it shall be lawful for
the said corporation to hold, shall be only such as shall be requisite for its im
mediate accommodation, in relation to the convenient transaction of its busi
ness, and such as shall have been bona fide mortgaged to it by way of securi
ty, or conveyed to it in satisfaction of debts previously contracted, in the
course of its dealings, or purchased, at sales upon judgm ents, which shall
have been obtained for such debts.
9. T he total amount of the debts, which the said corporation shall at any time
owe, whether by bond, bill, note, or other contract, shall not exceed the sum
of fifteen million of dollars, over and above the moneys then actually deposited
in the bank, for safe keeping, unless the contracting; of any greater debt, shall
have been previously authorised by a law of the United States. A nd it is
hereby enacted, that it shall not be lawful for the said bank to contract any
debt with the U nited States, to a greater amount than thirty millions of dol
lars, or with any S tate, than twice the amount of capital subscribed, in such
S tate: and, in case of excess, the directors, under whose administration it
shall happen, shall be liable for the same, in their natural and private capaci
ties, ana an action of debt may, in such case, be brought against thc*m, or any
of them, their, or any of their heirs, executors, or adm inistrators, in any court
of record of the United States,or either of them , by any creditor,or creditors,
of the said corporation, and may be prosecuted to judgm ent, and execution,
any condition, covenant, or agreement, to the contrary notwithstanding. But,
this shall not be construed to exempt the said corporation, or the lands, tene
ments, goods or chattels of the same, from being also liable for, and chargea
ble with, the said excess. Such of the said directors, who may have been ab
sent, when the said excess was contractetf, or created, or who may have dissented
from the resolution, or act, whereby the same was so contracted, or created,
may respectively exonerate themselves from being so liable, by forthwith giv
ing notice of the fact, and of their absence or dissent^ to the President of the
U nited States, and to the stockholders, at a general meeting, which they shall
have power to call for that purpose.
1 0 . T he said corporation, shall not. directly or indirectly, deal, or trade, in
any thing except bills of exchange, gold or silver bullion, or in the sale of
good9 , really and truly pledged for m oneylent, and not redeemed in d u e time,
or of goods which shall be the produce of its lands N either shall the said cor
poration take more than at the rate of six per centum per annum, for, or upon
its loans, or discounts.
11 . N o loan shall be made by the said corporation, for the use or on account
of the Government of the United States, to an amount exceeding one hun
dred thousand dollars, or of any particular State, to an amount exceeding
fifty thousand dollars, or of any foreign prince or S tate, unless previously au
thorized by a law of the U nited States.
1 2 . The 3 tock of the said corporation shall be assignable and transferable
according to such rules as shall be instituted in that behalf, by the laws and
ordinances of the same; except that no stock shall be assignable or transfer
able either in law or equity, to any person or persons who are not citizens of
the U nited States, or a body politic or corporate within the 9ame.

ON T H E B IL L TO RENEW T H E C H A R T E R OP 1791.

jg j

13. The bills obligatory and of credit, under (he seal of the said corpora
tion, which shall be made to any person or persons, shall be assignable by en
dorsement thereupon, under the hand or hands of such person or persons, and
of his. her, or their assignee or assignees, and so as absolutely to transfer and
vest the property thereof in each and every assignee orassignees successively,
and to enable such assignee or assignees to bring and maintain an action there
upon, in his, her, or their own name or names. And bills or notes, which
may be issued by order of the said corporation, signed by the president and
countersigned by the principal cashier or treasurer thereof, promising the pay
ment of money to any person or persons, his, her, or their order, or to bearer,
though not under the seal of the said corporation, shall be binding and obliga
tory upon the same, in the like manner, and with the like force and effect, as
upon any private person or persons, if issued by him or them, in his, her, or
their private or natural capacity or capacities; and shall be assignable and ne
gotiable, in like manner, as if they were so issued by such private person or
persons: That is to say, those which shall be payable to any person or per
sons, his, her, or their order, shall be assignable by endorsement, in like man
ner, and with the like effect, as foreign bills of exchange now are; and those
which are payable to bearer shall be negotiable and assignable by delivery
only.
14. Half yearly dividends shall be made of so much of the profits of the
bank, as shall appear to the directors advisable; and once in every three
years, the directors shall lay before tbe_ stockholders, at a general meeting,
for their information, an exact and particular statement of the debts which
shajl have remained unpaid after the expiration of the original credit, for a
period of treble the term of that credit, ami of the surplus of profit, if any,
after deducting losses and dividends.
The directors of the bank, and its several branches, shall keep fair and
regular entries of all their proceedings, in a book to be provided for that pur
pose, and on any question, where two directors shall require it, the yeas and nays
of the directors voting, shall be duly inserted on their minutes, and be sub
ject to inspection at a general meeting of the stockholders. No cashier of
any of the said banks shall be allowed to carry on any other business, or to
deal in any manner, in any of the public stock or funds, under the penalty of
ten thousand dollars for every such offence, to be recovered in any court of
the United States, within whose jurisdiction it shall happen, by indictment or
information, one half to the use of the informer, and the other half to the use
of the United States, and shall, on proofj to the satisfaction of the directors,
of any such offence, be immediately dismissed from office.
Sec. 12. A n d be it further enacted, That there shall be appointed, as soon
as the said bank commences its operations, by the President of the United
States, a superintendent of the said bank and its branches, whose duty it shall
be, to require and receive from the directors of the said bank, a statement, at
least once a month, of the amount and nature of the capital stock of said c o r
poration; a list of all the stockholders of the said bank; a statement o f the
debts due to the same, and of the moneys deposited therein; of the notes in
circulation and of the cash on hand, and shall have a right to inspect su c h
general accounts, or require copies thereof from the books of the said c o r p o
ration, as shall relate to such statements, b u t shall not have t h e righ t to in
spect the account of any private person with the bank. And the said super
intendent shall, at all times, when required, furnish to Congress or to the Se
cretary of the Treasury, any information in his power or possession, relative
to the said bank or its brancnes. He shall, moreover, when he deems it pro
per, furnish any information to the Secretary of the Treasury on the subject
of said banks, and shall give his opinion in writing or in person, at a meeting of
the directors of any of the said banks, on any subject touching the affairs thereof,
which he may deem proper, but shall not, in any case whatever, have a right to
vote. He shall keep an office and reside at the Seat of Government, and be
entitled to such compensation for his services as the president and directors

132

BANK O F T H E U N ITED ST A T E S.

of the bank at Washington shall think proper to allow, and shall hold his
office during the pleasure of the President of the United States.
S e c . 13. A n d oe it further enacted, That the bills or notes of the said cor
poration, originally made payable, or which shall have become payable on de
mand, shall be demandable during the continuance of this act, in gold or silver
coin, at their current value, ana shall be receivable in all payments to the
United States.
S e c . 14. A n d be it further enacted, That this charter, and the corporation
hereby created, shall continue until the year one thousand eight hundred and
forty, unless by the consent of the stockholders, at a general meeting, and a
future law of Congress, the capital stock of the said bank should be increased
to thirty millions of dollars, giving to the States respectively, and to the Unit
ed States, the same proportions, and providing, in every respect, similar re
gulations, so far as circumstances may admit, for the increase aforesaid, as
are provided by this act for the 'establishment of the national bank; and, in
like manner, it the capital should be so increased, the term of continuance of
the charter of the said corporation may be extended to the year one thousand
eight hundred and fifty.
A

p r il

4, 1810.

A motion was made by Mr-L o v e , that the House do come to the following
resolutions:
“ Resolved , That the Secretary of the Treasury be requested to furnish this
House with the names and titles of the sockholders of the Bank of the United
States, if any document in his office will afford that information, and if not,
to endeavor to obtain that information from the bank aforesaid, and lay it be
fore this House as soon as possible.
“ That the Secretary of the Treasury be requested to- ftirnish this House,
with the number of shares voted on at the last election of directors, and the
names of those voting, if to be obtained.
“ That he be requested to state to this House, by what information he was
enabled, in his report of March, 1809, made to the Senate of the United
States, to fix the average of dividends of said bank, at eight three-eighths, pre
cisely eight thirteen-thirty-fourths per cent- per annum, and also state the
amount of public stock or other public debt,, held by the said bank company
on each first day of January, since its operations commenced.
“ Resolved, That the Secretary of the Treasury be reqested to inform this
House what is the amount of capital retained in Philadelphia by the Bank of
the United States, and what amount thereof, distributed to the branches of
that bank, respectively; what have been the average amounts of deposites of
public money, in each of those banks, in any preceding year, or for the year
1 8 0 8 , if as practicable to obtain it as any other; and whether the sum of 8 0 0 ,0 0 0
dollars, stated in his said report, to be due from the State banks to the United
States Bank Company, was due on account of deposites of public money, or
not.”
A motion was made by Mr. Q u i n c y , to amend the first resolution thereof,
by inserting the word “ foreign” before the word “ stockholders.”
The said resolutions were read and ordered to lie on the table.
A

p r il

7 , 1810.

Mr. T a y l o r , from the committee to whom was referred on the 2 9 th ultimo,
the report of a select committee on the memorial of the stockholders of the
Bank of the United States, presented a bill continuing in force for a term of
twenty years, the act entitled “ An act to incorporate the subscribers to the
Bank of the United States,” on the terms and conditions therein named,
■which was received and read the first time.
On motion, the said bill was read the second time, and committed to a Com
mittee of the Whole House on Monday next.
The said bill is as follows:

ON T H E B IL L T O RENEW T H E C H A R T E R OF 1791.

jg g

A bill continuing in force, for a term o f tw enty years, the act, entitled “ A n
act to incorporate the subscribers to the B a n k o f the United Slates ,” on the
terms and conditions therein mentioned.
B e it enacted by the Senate and House o f Representatives o f the United
States o f America, in Congress assembled. That the act, entitled “ An act

to incorporate the subscribers to the Bank of the United States,” passed.the
twenty-fifth day of February, in the year of our Lord seventeen hundred and
ninety-one, subject to the provisions and conditions in this act to be made,
be, and the same is hereby continued in force, for and during the further term
of twenty years, from and after the fourth day of March next: Provided,
That the President and Directors of the said Bank of the United States, shall,
on or before the thirty-first day of December next, pay into the treasury of
the United States one million two hundred and fifty thousand dollars, as the
price and equivalent for the renewal and continuance of their charter as afore
said; and the better to enable the said President and Directors of the said
bank to pay the said sum of money, the said President and Directors of the
Bank of the United States shall be, and they are hereby authorised to add to
the capital stock of said bank two thousand five hundred shares, and to sell
and dispose of the same, at such time, and in such manner, and at such price
as they may think proper, and for the most advantage for the interest of their
said company: Provided, also, That the said President and Directors of the
said bank shall, at all times, from and after the passage of this act, and during
the continuance of the same, be bound and obliged to make a loan or loans to
the United States, if required and authorised by law, of any sum or sums of
money, not exceeding in the whole, at any one time, five millions of dollars,
and at a rate of interest not exceeding six per centum per year: Provided,
That it shall be the duty of the Secretary of the Treasury of the United States
to make his application in writing, to the President and Directors.of said
bank, for such loan or loans, at least three calendar months previous to the
time when such loan or loans shall be required; and that the said President
and Directors of the said bank, shall not be required to make a loan of more
than two million five hundred thousand dollars during the present year, nor
more than the last mentioned sum during any other year: Provided, also , That
the President and Director s of the said bank, shall, from and after the fourth
day of March, eighteen hundred and eleven, pay to the United States an in
terest at the rate of three per centum per year on all sums of money above the
sum of three millions of dollars, which shall accumulate to the credit of the
Treasurer of the United States in the said bank, or in any of the branches of
said bank, and which shall remain there for one whole year: Provided, That
it shall be the duty of the Secretary of the Treasury of the United States,
from time to time, to give notice in writing to the President and Directors of
the said bank, at least sixty days before the term or time at which said in
terest, to be paid as aforesaid, snail be considered to commence and begin to
accrue; which notice in writing, shall specify the precise amount of the de
posite, so to remain for one whole year as aforesaid: Provided, also, That the
United States shall be authorised, at any time during the continuance of this
act, to increase the capital stock of said bank in such manner as may here
after be prescribed by law, and for which the United States shall become the
subscriber and owner, to an amount not exceeding in the whole--------shares,
and not exceeding in any one year------- shares: Provided, That the shares
thus to be added and subscribed for, on behalf of the United States, shall not
be sold by the United States at a price less than-------- for each share: A n d
provided, also, That nothing in this act contained, nor in the act intended to
be continued in force by this act, shall be construed to restrict or prevent the
United States from incorporating any bank or banks in the District of Colum ■
bia: Provided, That any bank to be incorporated by the United States in the
District of Columbia, shall be restricted from extending any branch thereof
beyond and without tne limits of the said territory.
S e c . 2. A n d be it fu rth e r enacted by the authority aforesaid, That it shall
be the duty of the President and Directors of the said bank, on or before the

134

BANK OF T H E U N ITE D ST A T E S.

------day o f ----------next, to signify to the President of the United States, their
acceptance on behalf o f the Bank of the United States, of the terms and con-

ditions in this act contained, and if they shall fail to do so, on or before the
day above mentioned, that then this act shall cease to be in force.
A

p r il

13, 1810.

T he House resolved itself into a Committee of the W hole on the said bill;
and after some time spent therein, M r. Speaker resumed the chair, and Mr.
M a c o n reported, that the committee had, according to order, had the said bill
u nder consideration, made some progress therein, and directed him to ask
leave to sit again.
And on the question, Shall the Committee have leave to sit again on the
said bill? It was determined in the negative.
A

pr il

2 0 , 1810.

T he House proceeded to consider the said bill.
A motion was made by M r. S w o o pe , to amend the said bill, by striking out.
in the ninth line and first section, from the word “ next” to the word “ share,
in the sixty-second line, for the purpose of inserting the following:
Provided. T h at on the 4th day of M arch, 1811, the President and Directors
o f the said Bank of the U nited States, shall be, and they are hereby, autho
rized to add to the capital stock of the said bank, twelve thousand five hun
dred shares, and for which the United States shall become the subscriber and
owner: Provided, also, T h at the President and Directors of the said bank
shall receive in paym ent therefor, the sum of five millions of dollars in stock
of the United States, bearing an interest of three per cent, per annum, payable
quarter yearly, and redeemable at the pleasure of the Government, which
stock as aforesaid, the Secretary of the T reasury is hereby authorized to issue
and pay over to the P resident and D irectors, on receiving from them a trans
fer, in behalf of the United States, of the twelve thousand five hundred shares
as aforesaid: Provided, a!so, T h at the United States shall beauthorized at any
tim e after the 4th of M arch, 1821, to increase the capital stock of the said
bank in such manner as may be hereafter prescribed by law, and for which
the United States shall become the subscriber and owner, to an amount not
exceeding twelve thousand five hundred shares: Provided, nevertheless, That
such addition to the capital shall not be made at the time aforesaid, unless
the average dividends for the three years preceding that period, shall have
amounted to eight per centum, on the capital stock oT said bank; and after the
said fourth day of M arch, 1811, the Secretary of the T reasury shall be a di
rector of the said bank ex officio.
A nd, after debate thereon, the House adjourned.
A

p r il

2 1 , 1810-

T he House resumed the consideration o f the motion made by Mr. S w o o p b
yesterday.

A division of the qustion on the said am endment was called for, when a
motion was made by Mr. L o v e , that the said bill be postponed indefinitely,
which was determ ined in the negative. Yeas 46, nays 67T h e question was then taken on the first member of the motion of Mr.
S w o o p e . to wit: to strike out, in the 9th line, first section, from the word
“ next” to the word “ share,” in the 62d line, and determined in the negative.
T h e second member of the said motion failed, of course. ^
A motion was then made by M r. L o v e , to amend the saiu bill, by striking
out the following words contained in the first section thereof, beginning with
the following words: “ T h at the act, entitled ‘ An act to incorporate the sub
scribers to the Bank of the United States,’ passed the 25th day ot February,
in the year of our L ord 1791, subject to the provisions and conditions in this
act to be made, be, and the same is hereby, continued in force,” &c. and ter
minating with the following: “ Provided, T h at any bank to be incorporated
by the United States in the D istrict of Columbia, shall be restricted from

ON T H E BILL TO REN EW T H E C H A R TE R OF 1791.

135

extending any branch thereof beyond and without the limits of the said te rri
tory,” for the purpose of inserting the following:
“ In case no law shall been acted by Congress before the fourth day of March,
one thousand eight hundred and eleven, authorizing the further continuation
of the charter of the company of the United States Bank, the said company
shall, notwithstanding, be authorized, and they hereby, are au thorized, to con
tinue for the space of two years from that date, their loans which shall, on that
day be in existance, by renewing the same or otherwise, in the manner now
practised in the said bank and the branches thereof; to sue and be sued, and
do all other m atters and things which the said company is now able to do.
Provided, T hat the said company shall not issue or alter any bank note
signed by the President of the said bank, or in any other manner create
or alter, after the said fourth day of March, any note or other currency under
the authority of the said company or directors, or any of them; and that, after
that date, the notes which may be in circulation shall not be receivable in pay
ments due to the United States, unless made so by a law hereafter enacted.”
A division of the question on the said amendment was called for. and on
the question so to strike out, it was determined in the negative. Yeas 3 4 ,
nays 73.
The second member of the said motion failed of course.
The bill was amended on motion of Mr. T a y l o r , at the C lerk’s table.
A motion was then made by Mr. T r o u p , to amend the bill, by striking out
the first proviso in the first section o f the bill, wiiich was determined in the
negative. Yeas 35, nays 75.
A motion was then made b y Mr. T a y l o r , to extend the term to twenty-five
years, and debate arising thereon, the House adjourned.
A

p r il

2 3 , 1810.

M r. T a y l o r called for the consideration of the aforesaid bill, when, on mo
tion of Mr. R h e a ,
Ordered, T hat the consideration of the said bill be postponed till to-mor
row.
N o t e . —N o further proceedings were had upon this bill.
11th COXGRF.SS. )
2d Session.
5

D e c e m b e r 18, 1810.

Mr. F i n d l e y presented a petition o f the stockholders o f the Bank o f the
United States, praying the renewal o f their charter o f incorporation, which
was read and ordered to be referred to a select committee; and Mr. Burwell,
Mr. F indley, M r. Southard, Mr. M itchel, Mr. Franklin, Mr. Butler, Mr.
J. C. Chamberlain, Mr. W . Chamberlain, Mr. M osely, Mr. N . R. Moore,
Mr. M iller, Mr. Sm elt, Mr. Johnson, M r. Morrow, M r. Jackson, Mr. Gar
nett, and Mr. Poindexter, were appointed the said committee.
D

ecem ber

19, 1810.

M r. L ove offered the following resolution:
Resolved, T h at the Secretary of the T reasury be directed to lay before this
House, information, first, of the amount of debts due from individuals and
bodies corporate to the Bank of the United States, distinguishing the amount
due by bond, mortgage, or other specialty, from that payable by notes, bills
of exchange, or other security not under seal, to the said bank and its branches,
and what portion of said debts are considered as standing accommodation to
the customers of said bank and its branches : Second, of the amount of notes of
said bank and its branches, now in circulation: T hirdly, whether the revenue
of the United States, or what portions of it are ordered to be deposited in the
said bank and its branches; whether any portion of it is ordered to be depo
sited in other, and if so, what other banks; and what will be the probable
am ount of deposites in favor of the U nited States in any of the said banks or
their branches, and which of them on the first day of M arch, in the year 1811.
T he 9aid resolution was read and ordered to lie on the table.

136

BANK OF T H E U N IT E D ST A T E S.
J a n u a r y 3 , 1811.

The House, on motion o f M r. L o v e , proceeded to consider the preceding
resolution, wluch, being read, was agreed to b y the House.
A nd on the 10 th January, the Secretary of the T reasury communicated to
the House, the following answer to this call:
T he Secretary of the T reasury, in obedience to a resolution of the House of
Representatives, of the 3d instant, respectfully reports:]
T h at the annexed statements, marked A , B, and C ,* contain all the infor
mation which the returns made to the treasury afford, on the subjects em
braced by the resolution aforesaid.
I t appears by the statem ent A , that the debts due from individuals and bo
dies corporate, to the Bank of the United States, consisted, at the respective
dates of the several returns, of the following items, viz:
Bills and notes discounted, and bonds due by individuals, $15,126,187 04
Balance due by other banks in account, after deducting the
sums due by the Bank of the United States and its branches,
to several other banks, 1,318,024 29
B ank notes of other banks, on hand,
511,909 06
T reasury drafts not yet collected,
31,466 01
O verdraw n,
.
.
.
.
.
.
32,579 07
Converted six per cent, stock,
.
.
.
.
23,066 23
T o which, adding the loan to the U nited States,
M akes, for the aggregate of debts due to the bank,

17,043,231 70
2,750,000 00

- $19,793,231 70

In a few instances, which are noted in the statem ent A, the amount due on
bonds, and also that of notes discounted, which have been put in suit, is dis
tinctly stated in the returns made to the treasury; but the aggregate alone is
given in most of them , and they do not, in any instance, distinguish the amount
considered as standing accommodation to the customers of the bank and its
branches.” A recurrence to the 16th regulation of the 7th section of the act
incorporating the bank, will show, that the only statem ents that can be re
quired by the officer at the head of the treasury, are those of the amount of
tne capital stock of the corporation, of the debts due to the same, of the moneys
deposited therein, of the notes in circulation, and o f the cash in hand; and
that he has no right to ask for the account of any private individuals, or for
any other than the above mentioned general statem ents. N or has the Secre
tary of the T reasury any knowledge whatever of the accounts and operations
of the bank, but what is derived from the official statements transm itted to
him in conformity with the above mentioned provision in the charter.
T he statem ent B shows the amount of notes of the said bank and its branches,
in circulation at the date of the latest returns, to have been $5,157,378 83.
T he T reasurer’s accounts, annually laid before Congress, show correctly
the am ount of public moneys deposited in the various banks, on the last day of
each quarter. B ut that amount is daily fluctuating, and connot be stated with
perfect precision, except on the quarterly statements of those accounts. The
T reasurer furnishes, however, the Secretary of the T reasury with a weekly
estim ate of the cash on hand, and where deposited, as taken from the latest
received returns. A copy of that furnished on the 7th instant, marked C, is
herewith transm itted, together with remarks, showing what portions of the
revenue are generally deposited in the Bank of the United States and its
branches, and w hat portions are deposited in other banks.
* F or th e said statem ents, see Am erican State Papers, published by Gales Sc Seaton,
vol. 2 o f Finance, pages 462 and 463-

ON T H E B IL L TO RE N E W T H E C H A R TE R OF 1791.

jg y

It is probable that the amount of specie in the treasury will, on the first day
of March next, exceed 2 ,5 0 0 ,0 0 0 dollars, and that the proportion deposited in
the banks, other than that ot the United States and its branches, will not
materially vary from what it is at present. But it is impracticable to form
any correct estimate of the probable amount at that time in each place, re
spectively, since that is always regulated by the want of funds in each place,
for the current service, according to which the public moneys are daily trans
ferred by drafts, from place to place, as the occasion may require.
All which is respectfully submitted,
A L B E R T G A L L A T IN .

reasury

epartment,

January 9 , 181L
J a n u a r y 4 ,1 8 1 1 .

M r. B i i r w e t . l , from the committee appointed on the 18th ultimo, presented
a bill continuing, for a further time, the charter of the Bank of tne United
S tates, which was read a first and second time, and committed to a Committee
of the W hole House, on Monday next, as follows^
A bill continuing in force fo r the term, q f --------- the act, entitled “ A n act
to incorporate the subscribers to the B a n k q f the United States , ” on tlut
terms and conditions therein mentioned.
B e it enacted by the Senate and House o f Representatives o f the United
States o f America in Congress assembled, T hat the act, entitled “ An act to
incorporate the subscribers to the Bank of the United States,” passed the
25th day of February, in the year of our Lord 1791, be, and the same is here
by, continued in force, subject to the provisions and conditions in this act

specified, for, and during, the further term o f ---------- years, from and after

tne 4th day of March, next.
S e c . 2. Provided, however, and be it fu rth er enacted, That the president

and directors of the said Bank of the United States, shall, on or before the
------- .day o f------- next, pay into the Treasury of the United States, forthe
use thereof, one million two hundred and fifty thousand dollars.
S e c . 3. A n d be it fu rth e r enacted, That the president and directors of
the said bank, shall, at all times, from and after tne passing of this act, and
during the continuance i>f the same, be holden and bound to make a loan or
loans to the United States, if required and authorized by law, of any sum or
sums of money, not exceeding in tne whole, at any one time, five millions of dol
lars, reimbursable at the pleasure of the United States, and at a rate of inter
est not exceeding six per centum per year: Provided, That it shall be th e
duty of the Secretary of the Treasury to make his application in writing to
the president and directors of the said bank, for such loan or loans, at least
three calendar months prior to the time when such loan or loans shall b e
required: Provided , also, That the sum of two millions and seven hundred
and fifty thousand dollars, borrowed during the year 1810, shall b e considered
part thereof, and that no greater amount shall b e required, in any quarter o f
a year, than one million! of dollars. A n d provided, fu rth er, That all su ch
loans shall be reimbursable at or before the expiration o f tne said term o f
---------- y e a r s , u n le s s it sh a ll b e o th e r w ise a g reed b e tw e e n th e sa id corp oration

and the United States.

S e c . 4 . A n d beit fu rth er enacted, That i f the sa id president and d ir e c to r s
shall, on any occasion, fail to furnish any loan or loans, to b e req u ired by the
United States, in the manner herein before enacted, their corporation shall
forthwith be dissolved, and the powers thereof shall cease and determine, any
thing in this act, or in the act hereby continued in force, to the contrary there
of, in anywise notwithstanding.
S e c . 5 . A n d be it fu rth e r enacted, That the directors, chosen by the stock
holders of the said corporation, on the first Monday of January, in the present
year, and the president, chosen by the directors at the first meeting after
18

138

BANK OF T H E U N ITE D ST A T E S.

such election, shall be capable of serving, by virtue of such elections, until the
first Monday in January, 1812.
S e c . 6. A n d be it fu rth er enacted, That the act, entitled ** An act to punish
frauds committed on the Bank of the United States,” passed the 24th day of
February, 1807, be, and the same is hereby, continued in force, during the
continuance of the said corporation; and the same shall at alf times hereafter,
and in all respects, be deemed and taken to apply to the said corporation, in
the same manner tnat it lias been deemed and taken to apply to the same here
tofore.
S e c . 7. A n d be it fu rth e r enacted , That the president and directors of
the said bank, shall, after the 4th day of M arch next, pay to the United States
an interest, at the rate of three per cent, per year, on all sums of money above
the sum o f ---------millions of dollars, which shall accumulate to the credit of

the Treasurer of the United States in said bank, or the branches of the same,
and which shall remain there for-------- : Provided, It shall be the duty of the
Secretary of the Treasury, from time to time, to give notice, in writing, to

the president and directors, at le a s t-------- days before the term, or time at
which the said interest shall begin to accrue and be computed? which notice
in writing, shall specify the exact amount of the deposite so to remain for the
whole year as aforesaid.
S e c . 8 . A n d be it fu rth er enacted, T hat the United States shall be author
ized, at any time during the continuance of this act, to increase the capital
stock of the said corporation, in manner as may be hereafter prescribed by
law, and for wldch the United States shall be the subscriber and owner, to

an amount not exceeding in the whole-------- shares, and not exceeding in
any one year-------- shares: Provided, Tha.t during the time the United
States shall so hold stock in the said corporation, they shall have a right to
appoint, in such m anner as shall be hereafter declared by law, a number not
ex ceed in g ----------of the directors: A n d provided, also, T h at the shares thus

to be subscribed and added, by and on behalf of the United States, shall not
be sold at a price less than----- per centum advance on each share.
S e c . 9. A n d be it fu rth er enacted, T hat the tw elfth section of the before
mentioned act, entitled “ A n act to incorporate the subscribers to the Bank
of the United S tates,” passed M arch 2 d, 1791, be, and the same is hereby re
pealed.
S e c . 10. A n d be it fu rth e r enacted, T h a t it sh a ll b e th e d u ty o f th e p resi

d e n t a n d d ir e c to r s o f th e said b a n k , on or b efore th e ----------- d a y o f --------- -

next, to signify to the President of the United States, in writing, their accept
ance on behalf of the said corporation, of the terms and conditions in this act
contained; and if they shall fail to do so, on or before the day above mention
ed, then tnis act shall cease to be in force.
J anuary

Mr.

16, 1811.

offered the f o llo w in g r e s o lu ti o n :
Resolved, That the Secretary of the Treasury be directed to lay before
Congress, a list of the directors of the Bank of tne United States, and ot the
several branches: and a statement of the stock held by foreigners, and in what
countries; and of the stock held by citizens, and in what Statesand Terrtiories.
On suggestion of Mr. E p p e s , the resolution was modified by adding to the
information required, a statement of the specie deposited in the Bank of the
United States and its branches, in the States and Territories, distinguishing
between the deposites of the United States, and those of individuals.
As amended, the resolution was agreed to.
The House then resolved itself into a Committee of the Whole, on the bill
t o renew the charter of the Bank of the United States, Mr. W. A l s t o n in the
chair.
Mr. B u r w e l l moved to strike out the first section of the b i l l .
He supported his motion in a speech of great length, in which he denied
the constitutionality and expediency of the bill, as follows:
W rig h t

ON THE B IL L TO RENEW T H E C H A R TE R OF 1791.

jg g

M r. B u r w e l l . I have made you this motion, sir, because it allows the
greatest latitude of discussion upon the important points which are prelimina
ry to the examination of the details. It tries the principle of the bill, and may
save much tedious and useless labor. Should a majority decide in favor of the
Bank of the United States, as an honest man, I will aid in forming a system
best adapted to the state of the country, and most subservient to the purposes
o f such an institution. T h e gentleman from Connecticut (M r. M o s e l y )
has done justice to my conduct, and the fairness with which the subject has
been treated. I have been anxious to present the question fairly, not from
any doubt or indecision as to the course I should pursue, but from its magni
tude, and tlie sensibility it has excited. I t will be recollected by the com m it
tee, when the gentleman from Philadelphia presented the memorial, upon
which the Secretary of the Treasury founded his report, on that, as on
all subsequent occasions, my opposition was manifested; and I will add, that
the particular intention which my duty has compelled me to bestow on the
bank, has confirmed most stongly former impressions.
T he remarks I shall make, are intended to show that Congress possesses no
power to incorporate a bank; to show its effect on the Government; and to
satisfy the committee that the exercise of the power, even if possessed, is in
expedient. W hile, sir, I feel the most ardent desire to consult the conveni
ence of the Government, and promote, the prosperity of the community in
general, I have not lost sight of the limits within which I am restrained by the
constitution of the U nited States, and considerations of sound policy. I t is
my most deliberate conviction the constitution of the country gives no autho
rity to Congress to incorporate a bank, and endow the stockholders with char
tered immunities, and, even if its dissolution should produce ruin to the m er
chants, and, what is of equal importance, embarrassment to the Government,
they would not be paramount to the sacred obligation of supporting the consti
tution, though 1 am persuaded the dreadful evils which have been predicted
from the annihilation of the bank, will soon vanish, and that no material shock
will be produced by that cause. The construction which the constitution has
received by the various persons who have, at different times, administered it,
has been rigid or liberal, according to their confidence in the General or State
Governments. The unqualified extent given to its general powers, and the
inclusion of incidental powers, as flowing from, and belonging to, particular
enumerated grants, have constituted the essential points ol difference among
those who have divided upon the principles 9 f the constitution: this has been
the case, not only in the exercise of authority when the right was question
able, but in cases where the right was undeniable, tending, by its operation,
to increase the weight of the General Government. In giving to the constitu
tion that rigid construction which sound policy requires, a ju st regard to the
harmony ot the States, and the perpetuation of their Union dictates, I cannot
find any part of it authorising the exercise of a power, which, from its nature,
is obnoxious, its tendency alarming, and its influence in the hands of those
who manage its concerns, irresistible. T h e power to establish a bank, cannot
be deduced from the general phrases “ to provide for the common defence and
general welfare,” because they merely announce the object for which the G e
neral Government was instituted; the only means by which this object is to
be attained, are specifically enumerated in the constitution, and if they are
not ample, it is a defect which Congress are incompetent to supply. I think
this inlerence the stronger, inasmuch as those means were granted to us by
those who hail acted under the confederation, and experienced its defects, a n a
knew precisely to what extent power was requisite to provide for the com
mon defence and general welfare. In rejation to this particular subject, the
proceedings of the convention itself, furnish the plainest evidence, by reject
ing the proposition to vest in Congress the right to grant incorporations. I
readily adm it the motive of deliberative bodies cannot always be known; v a
rious considerations might have operated; they might have supposed the power
already vested; but it is incumbent on those who can place faith in an inter

140

bank

the

u n it e d

sta tes.

pretation so repugnant to the cautious and guarded phraseology of the instru
m ent, to dem onstrate it. If the right to incorporate exists, it is a general grant
of power, equally applicable to all the objects of incorporations, and cannot
be assumed as a meati9 to carry into effect any particular grant of authority.
T o my mind it is much more natural to suppose a power to create monopolies
had been surrendered to quiet the fears of those who saw in the constitution
the germ which would, sooner or later, palsy the vitals of the State authority.
I f the general phrases are not explained in the manner ju st mentioned, and
powers so extensive and important are derived from them, it would be ridicu
lous to consider the jurisdiction of Congress restricted; they would confer
equal authority to establish monopolies in all the various branches of indi
vidual industry and commercial enterprise. Sir, I will conclude this part of
the subject by reminding you how essential it is, when we are giving an in ter
pretation to the constitution to which the States are parties, to assume onlv
w hat clearly belongs to us; moderation will inspire confidence, selfishness will
excite disgust and suspicion.

The parts of the constitution which bear any analogy to this subject, areT

1 st.

Congress shall have power to lay and collect taxes, duties, im posts,and
excises; to pay the debts, and provide for the common defence and general
welfare, &c.
2 d. T o borrow money on the credit of the United States.
3d. T o regulate commerce with foreign nations, and among the several
States, and with Indian tribes. A nd, 4tn. T o make all laws which shall be
necessary and proper to carry the foregoing powers, and all other powers vest
ed by the constitution in the General Government, into effect. I t will not be
denied, that, if the establishment of a bank comes within the meaning of the
power to lay and collect taxes, to pay the debts of the United States, and to
regulate commerce, or is necessary and proper to carry the foregoing powers
into effect, it would be a fair subject for legislation by Congress. B ut can any
one pretend, that a bank would be a mode, contemplated by the constitution,
to lay and collect taxes on the people, for the purpose ol raising revenue ?
W ould it comport with that wise principle of uniformjty, and those guarded
restrictions against unequal burthens on the people, which constitute tne most
valuable safeguard to the citizen ? T o understand these term s, we m ust give
them a meaning which has been affixed by their usual import. W hen we
speak of the power to lay taxes, we understand by it, a demand of money from
the community? regulated by fixed and equitable principles, indiscriminate as
to persons, and the species of property taxed. To suppose that every law
which imposed burthens, or brought money into the treasury, was constitu
tional, would destroy our equal system of Government, ana substitute a ca
pricious despotism. It would revive the exploded doctrine of free gifts, be
nevolences, and that shameful train of extortions practised by the old govern
m ents of Europe. Does it fall within the power to pay the debts of the U nit
ed States ? T his clause relates entirely to the application of the funds, after
they have been accum ulated; it is in conformity with that article which pledges
the public faith for debts which had been contracted, as well as those which
might be created in pursuance of the authority to borrow money upon the faith
of the U nited States. If the power to incorporate a bank, grew out of the ob
ligation to pay the debts of the United States, its charter should be so worded
as to cease whenever they were extinguished; and it would be no longer for
Congress to fix a definite period for its expiration. I f the right of incorpora
tion was ever m eant to be given, it would most naturally follow from the regu
lation of commerce; yet no one has contended Congress could create insu
rance companies within the States. Those who contend the bank is constitu
tional, consider it as necessary and proper in collecting the revenue. T hat it
may be an useful instrum ent, I do not deny; it forms depositories convenient
to the G overnm ent; but you should recollect, depositories, equally safe and
convenient, can be procured without being purchased at the expense of exor
bitant and invidious privileges, to a particular class in the community. I ap
prehend the constitution means something extremely different. W hen it em-

ON T H E BILL TO RENEW T H E C H A R TE R OF 1791.

| 4]

powers the General Government to colled taxes, it relates exclusively to the
authority thus given to Congress, of employing compulsory process, in coerc
ing the payment of taxes; it enables Congress to create, within the jurisdic
tion of the States, officers of the revenue, and through them, to exercise oyer
the persons and property of the citizens, a concurrent jurisdiction, from which
they otherwise would be precluded, and from which they had been precluded
before the adoption of the constitution; it enables them to impose penalties
and forfeitures, and to inflict punishment for resistance to their authority.
B ut, sir, admit fo ra moment the bank may be formed to collect the revenue;
ought it not to be exclusively used for that object? W hence the power to make
it an instrument of commerce ? W hy invest it with a capital, immense in
amount, and sovereign in its control over the external and internal commerce
of the country ? Sir, I m ust again call your attention to the limited nature of
our Government; we must administer it as we find it, and not as we think it
ought to be. U nder this view of the subject, so long as I understand the right
to lay taxes,” to consist in drawing supplies from the people for public
purposes, and not to tax one portion for the benefit of another; and “ to col
lect” them, the right to enforce payment; I cannot construe them to authorize
the establishment of a bank. Sir, a bank has been improperly considered a
means of executing some power expressly given to Congress. T he nature ot
incorporations is so clearly a distinct class of political power, that, before they
can be converted into means incidental to an object, without the jurisdiction
of the General Government, they m ust be shown to be absolutely necessary.
Perm it me to ask how has it been ascertained that a bank is necessary to the
operations of the Goverement? Has the experiment been tried? Upon a
question involving a breach of the constitution, it would be safer to be guided
by experience than conjecture.
Sir, I am well aware that I can add nothing new upon the constitutional
points. T his subject was more thoroughly examined in 1791, and more ably
elucidated than any other since the adoption of the Government. T he cele
brated speech of M r. Madison, to which 1 ascribe my conviction, has been r e
cently presented to us in the newspapers, and gentlemen m ust be familiar
with it. I cannot give additional weight to the arguments,' but I thought it
proper to call the attention of the committee to that part of the subject, by the
__
remarks I have made.
I said, sir, it must be shown that the bank is necessary to the operations of
the Government; without its aid our fiscal concerns cannot be managed. So
far from subscribing to the necessity of the bank, I believe the revenue would
be equally safe in tne State banks, and could be distributed with inconsider
able difficulty; the revenue received in most of the States is nearly equal to
the expenditure within them, and when a deficiency occurred in any one, it
could be supplied by arrangements with the different banks, by transportation
or inland bills of exchange, in the same manner that the public engagements
are fulfilled abroad. I will venture to assert, the Secretary of the Treasury
will find no difficulty in contracting with individuals and corporate institu
tions, upon the most ample security, to transfer the public revenue, upon
term s equally advantageous to the United States. Among the several States
commercial intercourse is great, and daily increasing; the constant traffic
which the different portions of the country maintain with one another, will
give facility to the operations of the Government; and obviate the obstacles
which are anticipated. T he very commerce which enables the treasury to
rem it, with ease, immense sums to every part of Europe, is the result of this
interchange among the States, and insures equal facility at home: where, then,
is the necessity for this bank? T he accommodation of the bank to the Govern
m ent, in times of emergency, and the use of its resources to support public
credit, have been urged as motives for its establishment: how far such con
siderations weaken constitutional objections, it is needless to state. If, sir,
the bank becomes a source of supply to the Governmonf, to an adequate ex
te n t, it ceases to be one to the merchants. It, therefore, cannot answer in
both capacities. The same necessity which throws the Government upon the

142

BANK OF T H E U N ITED ST A T E S.

charily of the banks, renders it incapable of discharging the obligation, and
while the funds of the institution are locked up in the Government, its com
mercial functions must cease. The relief which sudden and temporary em
barrassments require, can, at all times, be administered by the State banks,
and, therefore, supersedes the necessity of aid from this bank. Whenever,
by disasters, the ordinaiy sources of supply are exhausted, or the unavoidable
objects ot expenditure exceed the revenue, a more copious and permanent
aliment will be found in the wealth and capital of the citizens than by loans
from banks. Instead of diverting the active and productive capital from use
ful channels, the sluggish and inert mass will be drawn forth, in its aid, to
support public credit, and cherish private enterprize. But, sir. is it prudent
to rely upon an institution that may refuse you assistance? Wnat will be the
influence of such an institution on the Government and the country at large?
It cannot escape your recollection, that the establishment of the Bank of the
United States was the origin of a system which assumed, as its basis, the en
largement of the national jurisdiction. Whether the principles of expediency
to which it owes its birth be regarded, or the overweening influence it esta
blished over the moneyed institutions and merchants of the States, the charge,
to say the least, is plausible. The close and intimate connexion between tlie
Government and the bank; the dependence of the former for loans, and the
latter for public deposites, have given the Executive branch its full share of
influence and odium, shows incontestibly it was created to augment the power
of the General Government, and the Executive in particular. Yes, sir, it was
the commencement of those political animosities which have poisoned the
sources of social intercourse; it was the origin of that doctrine of constructive
power which abrogates the constitution, and nullifies the restrictions imposed
upon Congress. So long as it exists, the body politic will experience the agita
tions and convulsive throes of well grounded jealousy in the States.
Sir, in the administration of this Government, two things alone are neces
sary to ensure its durability. You must, 1st, avoid every measure which will
produce uneasiness among the States; or, 2d, that will extend the jurisdiction
of the United States Government to subjects purely local. I do not mean that
the rightful authority of Congress is to be abandoned for fear of giving offence;
but whenever called on to take a step which will produce uneasiness, you
should be perfectly satisfied the letter and spirit of the constitution bear you
out. Do not gentlemen perceive the tendency of this measure to involve us
with the States upon delicate points? Has not the United States Bank pro
duced serious alarm? Will not the alarm be increased by its continuance at
this time? Yes, sir, some of the States have already taxed this institution,
others have waited under the expectation we shall render a collision unneces
sary. Suppose the charter renewed, and the stockholders should be taxed in
such a manner as to destroy, virtually, the privileges you have guaranteed to
them? Are you to leave them unprotected, or will you draw the sword in
their behalf? While you have time, avoid a situation not less perilous than
the most serious foreign war. Since the establishment of the bank, the States
have created banks; tneir people have accumulated capital, and they will not
tamely witness the perpetuation of an institution whose strength can, at any
moment, overthrow whatever State bank they may mark for destruction.
However paradoxical it may appear, I consider the General Government
strengthened by narrowing its jurisdiction: it will produce disunion whenever
they interfere with local concerns. The habits, local interests, and passions
of this country vary, and no one is a competent judge of what will suit the
feelings of the State out of which he lives. B u t. sir, there are general princi
ples in which our feelings and interests are identified. These are subjects
upon which we may safely act, and trust to the co-operation of every man
and State in the Union. Does the bank affect the people locally? The an
swer is obvious: itnot only undertakes to fix the amount of capital, but inter
feres with the rishts of property most essentially. It may change the funda
mental principles of State law as to the liability of property for d e b t s , and
the mode of recovering them. Let me caution you against the renewal ot the

ON T H E BILE TO RENEW T H E C H A R TE R OF 1791.

143

charter; it is pregnant with the most baneful consequences to the tranquility of
the country. Is it not better to sacrifice this golden calf upon the altar of con
cord, restore confidence and harmony among individuals as well as States,
and to reunite the lovers of the constitution.
In the report of the Secretary of the T reasury, the convenience of obtaining
loans from the bank is mentioned as an inducement to establish a national
bank. To me, the abuse of this convenience is more dreaded than any other
evil which will follow from the measure. W here have you seen a national
bank, connected with the government, which has not ultimately ruined the
circulating medium of the nation? It is a notorious fact, that money has d e
preciated seriously from the unlimited circulation of paper, anti, if the Govern
ment should be compelled, by necessity, to use the funds of the bank, they
must permit the increased circulation of its paper, although its money capital
remains stationary. In this situation, the Government must tolerate an oper
ation which will increase the evil of which we complain. T he example of
England is a salutary monition to us, and we ought to profit from it. In that
country, there was a time when the stability of the bank was a national phrase,
“ as good as the Bank of England.” How is it now? T he funds of the bank
have been borrowed by the Government, its paper circulation increased, and
Parliam ent has been compelled to make it a tender for the payment of all con
tracts. W ho, sir, can estimate the complicated mischiefs of a depreciated
paper currency, without specie for its redemption? Should we be involved
in war, or our property seized abroad, nothing can prevent universal bank
ruptcy; one wide spread ruin will pervade the continent. A t this time the
country is inundated with paper, bottomed upon the whole floating and real
property of the community: should an alarm exist, can these funds be con
verted into money to redeem its credit? Certainly not. W ill it not be pru
dent t 9 diminish the extent of this evil by putting down this bank, which is the
fountain from which the whole system How's? I t is of little importance, as it
regards the internal trade of a country, what constitutes the representation of
property. Paper, iron, or any thing else which passes current, will answer
every purpose of barter and trade: but, in its commerce abroad, itis indispen
sable that the circulating medium should be equally valuable, and readily ac
knowledged among all commercial nations; otherwise, all the operations of
commerce, carried on with money, will be abandoned, or prosecuted under
disadvantages equal to the difference in the value of the currency at home and
abroad. In countries actively engaged in business, this branch of trade is not
only great in amount, but by far the most profitable. How unwise, therefore,
not only to substitute for the precious metals paper currency, whose value is
confined to the United States, but to augment tne quantity until it depreciates
even among ourselves.
I cannot sufficiently express my apprehension at a state of things which ex
poses us to irreparable injury, whenever a foreign nation shall interrupt our'
commerce, or my regret at the daily ascendency of this fatal policy. In my
opinion, sir, the true corrective will be applied, if the Government, instead of
receiving the paper of a particular bank in payment for the revenue, shall re
quire specie as the only tender. Such an operation w'ould secure to the coun
try its due proportion 9 !’ the precious metals, would restrain within rational
and useful limits, the circulation of paper, would insure stability to the mo
neyed institutions, save the people from the dreadful scene of bank swind
ling which is exhibited, and restore that equality of trade with foreign nations,
which depends upon the fixed value of the circulating medium. I am far
from intimating that banks are useless, when established^ with a due regard to
the actual wants of the country. M easured by that standard, they form the
chief resource of industry, lubricate the wheels of commerce, and accelerate
their motion—but the constitution has wisely entrusted this measurement to
the States; they are the most competent judges. I f the Bank of the U n ite d ]
States tended to restrain the multiplication of banks, and the ruinous emis- :
sion of paper, I acknowledge it would be a powerful argument in its favor—
it would go far to satisfy me of its expediency. But, instead of producing

144

BANK OF T H E U N ITE D ST A T E S.

this effect, we have seen them, like mushrooms in a genial soil, spring up un
der its fostering protection. T he Bank of the U nited States has an interest
in the multiplication of similar institutions, because they all tend to secure it
' from danger, and enable it to increase the discounts to the greatest amount.
Before the United States Bank can be affected, all the other banks m ust be
ruined; because the advantage of public deposites and the great extent of ca
pital, will afford the means of averting the storm. W h at has been the fact
upon this subject? H ave not the most shameful systems of bank swindling
been practised? T he Slate of M assachusetts found it necessary either to sup
press her banks or limit their discounts. T hey found, upon examining the
vaults of the banks, the whole of them did not contain specie equal to the
paper issued by a single one. Yes, sir, instead of finding a sound body, they
found a corpse rotten and decayed; the specie had fled, and the public were
left without the prospect of remuneration. Have you forgotten the Bank of
Rhode Island? T his bank had issued notes to the amount of $800,000 upon a
capital of $45. W ill gentlemen tell me, the Bank of the United States has
checked, or will keep down in future, similar impositions? I am justified in
considering this bank instrum ental in depreciating the currency of the coun
try , and banishing its substantial capital.
T here is no branch of industry more materially injured by the artificial
state of credit, and the depreciated currency of the country, than manufac
tures. T he precarious condition of commerce has naturally turned the public
attention to this subject; and we may hope the time is not distant, when the
U nited States will furnish the articles of substantial utility for themselves.
T he w ar in Europe, by deranging the operations of the manufacturer, and the
taxes with which h is industry has been burthened, have conspired to give a
vigorous impulse to them here. B ut, sir, we shall probably witness their de
struction, by the rapid depreciation of paper, which arises from the price of
labor, and impedes the accomplishment ot this most desirable object. The
exchange of labor between the inhabitants of America and the old world, has
always been disadvantageous. W e have not only paid full profits upon the
capital and labor employed in the production of what is consumed, but we
have paid the taxes which the prodigal Governments of Europe have laid upon
them.
Upon this subject a strong appeal has been made to our feelings; it has been
said the dissolution of the bank will produce the most serious pressure in the
community, and will devote numbers to ruin. I am confident no man would
be more gratified than myself, to afford relief to those who may suffer, if I was
not precluded by constitutional difficulties. W hile I adm it the sufferings of
individuals will be great, I am equally convinced the picture is highly color
ed, and the facts exaggerated.
T he time when the charter expires has been known to every person; the
presumption against its renewal, strong. How can you, therefore, believe the
creditors of the bank have made no provision to meet the event? I tis scarcely
possible to conceive that funds have not been provided to extricate themselves.
W hen I say the presumption against the renewal of the charter has been
strong, I do not allude so much to the sentim ent in this House, as to the so
lemn declaration of the P resident of its unconstitutionality.
[Mr. Macon called Mr. Burwell to order, for using th e name o f the P resident in
debate. ]

Sir, the violation of order has been inadvertently com mitted; his name was
not used to produce any effect here, because I really am unacquainted with
his present opinions, except as I infer them from his speech in ’91. I cannot
suppose he would use one set of arguments then, and act upon another now.

Under such circumstances, it would be criminal in this House to yield con
stitutional objections, and surrender important considerations of policy, to
shelter those who have shut their eyes to the law. The Legislature cannot
resist with too much firmness such an appeal; it is placing them at the mercy
o f a few, and sacrificing the general good to the clamors or follies of the im •
provident.

ON T H E BILL TO RENEW T H E C H A R TE R OF 1791.

J45

It lias been said that $8,000,000 in specie will be required from circula
tion, to meet the demands of the bank, and that the amount cannot be
procured in the United States. I venture to assert, upon the statement
furnished by the bank agents, the sum will not exceed $2,500,000 oyer
and above the specie in the vaults of the bank. After paying and settling
with the community, the bank will owe to the stockholders $10,400,000.
If they retain (he specie now in the vaults, amounting to 65,000,000, the de
mand upon the community will be lessened to that extent.: if it is paid out to
meet the return of their notes in circulation, it passes into other banks and
will return to them; so that in either case it will constitute a fund to pay the
stockholders, and reducc their demand to $5,100,000; from this sum must be
deducted $500,000, the amount of real estate belonging to the corporation,
$2,750,000 loaned to the Government, and about $300,000 in suit; leaving a
balance not exceeding $2,500,000. Will it be said that this sum cannot be
raised in a country whose export o f specie for the last year amounted to
$8,000,000? Will it be said the system of banks lias reduced us to this low
ebb, and yet we are called upon to perpetuate the evij? From this view of the
subject, it appears that the creditors of the bank will ba compelled to raise
§7,500,000.

Can gentlemen seriously believe, that this sum will ruin the country? If,
sir, we judge from the numberof banks springing into existence, in the differ
ent States, the conclusion is irresistible, that their is a redundancy of capital,
more than ample to accommodate all the debtors of the bank. Scarcely a
single legislature has separated, without granting charters. You have this
morning, deposited in Committee of the Whole, the cemetry for the District,
five banks, with an aggregate capital of three and an half millions. This
thing must be downright cheatery, or their is a redundancy of capital. If it is |
fraudulent, the sooner the delusion is dissipated, the better.
I shall, for the present, admit these applications are evidences of capital, and
contend they will operate effectually to relieve the community. But, sir, it
will be found, from tne statement of the bank agents, the directors have con
tracted debts, nearly, or quite equal to the amount oue them, and that they
will find difficulty in meeting the claims against them. These claims will na
turally be transferred to those who are indebted, or deposited inState banks,
where they will constitute funds, upon which accommodation can be extended.
The moment you destroy the bank, the notes it has issued, to the amount of
$5,000,000, will return: the deposites, amounting to nearly eight millions and
an half, will come into the market; these, added to the private capital which
can be spared, will supply the means of sustaining the shock.
I feel confident the removal of public deposites will go far to remedy the
evil- The loan obtained from the bank, and payable the 1st of January, will
add to the facility of satisfying the claims of the bank. Even the funds of the
institution itself, will rapidly glide into channels of profit, and contribute to
the object. Thus, sir, this omnipotent association, whose influence pervades
the continent; whose nod dispenses protection, or ruin, like an angry cloud,
will be disarmed by the conducting powers of the State banks; there will be no
explosion. Its substance will be secreted, mixed with their juices and strength
en the general system.
In the public discussions upon this subject, we have been told, the quantity
ol specie has been reduced below the actual wants of trade; and that the por
tion of stock held by foreigners, will be carried abroad in money. Those who
endeavor to alarm us in this way, are either ignorant themselves, or they cal
culate largely upon our credulity. It is, sir, a melancholy fact, that specie has
been almost banished from circulation, by paper, and from the vaults of the
Links by exportations abroad, in a commerce which does not replace it. It is
equally true, that this bank has contributed, more than any other, to produce
this deplorable result. But it is evident, the exportation must be limited in
amount, or the import of specie commensurate, if we do not continue the pre
sent system, which threatens us with a currency exclusively paper.
19

]4 6

BANK OF TIIF. U N ITE D ST A T E S.

As to the exportation of specie, by the foreign stockholders, nothing can be

more absurd. Have not the motives which induced them to invest their
property in the United States, been strengthened? Yes, sir, funds in every
part of Europe, are fluctuating and insecure; the gripe of taxation has embrac

ed them, and you must think worse of the judgment of these proprietors
than I do, if you suppose they will quit a country wnose institutions are safe,
and whose property is advancing rapidly in value. But, laying aside conside
rations which, of themselves, are sufficient pledges, the rate ot exchange ren
ders the remittance of specie, particularly silver, altogether improbable.
VVould any man in his senses ship specie to England, when he can purchase
bills of exchange, eight or ten per cent, below par? Will he lose four per
cent, insurance, freight, and commissions, when be can make eight or ten by
remittances in bills ofexchange? These questions carry conviction to every
man, unless he supposes money is worth more than this difference over the
paper currency of the country. Although the exchange is in favor of Holland,
four per cent, it would be cheaper to lose that amount, than pay fifteen or
twenty per cent, insurance, &c. for the transportation of specie, subject to
risk from British cruisers, and seizure from French rujers in port. No
one will say that the Dutch have any motives to draw their funds from the
United States.
After showing, I hope to your satisfaction, that specie cannot be remitted
in the actual state of things, I will suppose foreign stockholders should trans
fer their capital; how would that operation affect this country? From what
I have said, it appears that the one million held in Holland, and six millions in
England, if withdrawn from the United States, would only be an exchage ot
funds with the American merchant, and would not affect the money in circu
lation. I confidently believe, the present embarrassments of merchants arise
from the spoliations of the belligerents, and principally from the accumulation
of funds in England, which they cannot withdraw but at a great loss. For
some time past shipments have been almost confined to England; the prices
have been good, and the proceeds far above the demand for English merchan
dise; added to this, whenever shipments have been made elsewhere, the
profitable purchases of bills have increased their funds in Great Britain.
The fact is clearly demonstrated from the state of exchange, which, for
the first time, is greatly in our favor. If, then, the stockholders should remit
their funds by bills of exchange, it would bring six millions into the market,
and not only relieve the American merchant from the unfavorable state of ex
change, but would at once furnish the means of meeting his engagements and
relieving his embarrassments: it would be a loss of that much capital to the
United States; but, we can bear the loss, as is evident from the rapidity with
which new capital is supplied to form new banks. Should they give a prefer
ence to moneyed institutions here, the community would be equally relieved.
It may be asked, if foreign capital remains, shall we not be exposed to its
influence? I do not, sir, object to the use of foreign capital by individuals, but
I never will consent to organize it under the patronage of the Government. In
the hands of an individual, its influence is comparatively insignificant. Com
bined in the form of a national bank, it becomes truly formidable to the best
interests of the nation; besides, 1 well know that individuals, who can obtain
money at an interest less than the profit it yields, cannot be prevented by
law from borrowing. In this form, it may subserve the purposes of industry,
but cannot control public opinion, or obstruct public_measures. If, sir, the
pressure upon the community should not be removed in the mode I have sug
gested, the bank will naturally proceed in the collection of its debts, in a man
ner best calculated to secure itself. I cannot imagine,measures will be adopt
ed which will force the merchants, either to fail, or to refuse payment. Such
conduct on the part of the bank, would be wantonly cruel and unjust, and
would probably terminate in the greatest losses. In the event of such a pro
cedure, the merchants would compel the bank to resort to the ordinary course
for the recovery of debts, and, under such circumstances, I do not apprehend
their credit would be affected with other banks. The alarming scarcity ot

ON T H E BILE TO RENEW T H E C H A R TE R OF 1791.

specie, produced by the facility which the bank has furnished* to procure it
for exportation, and speculations in bills sold by the agents of the British for
the use of their troops in Canada, and the West Indies, cannot be too strong
ly impressed on the mind of the committee, or too soon stopped by the Govern
ment. It is true, that a temporary inconvenience results from the latter mode
ot exportation, because it is soon brought back in return for provisions, suppli
ed by the Middle States. It must be known, sir, to you, why the import of
specie, which nurtured the East India trade, has ceased, since the revolution
in Spanish America, which opened the direct trade to the English for supplies
of British and East India manufactures, and the facility of shipping specie
■direct t©Spain, without the intervention of bills of exchange obtained in this
country, on Europe, the supply of American produce to the Spanish colonies,
has never been more than sufficient to keep up the necessary quantity for our
own use, and for the India trade, to an extent limited by our own wants;
hence, the disadvantages of the paper system, which furnishes the means of
prosecuting this trade after its utility is done away. Gentlemen will tell me
this evil will correct itself, and that the merchants will not persist in a branch
of business, unprofitable for want of markets. I readily admit this position
to be correct; but, before all those sanguine adventurers will be convinced,
who are tempted by the accommodation of the bank, we shall be so far drained
of our real capital, as to be incapable of sustaining public confidence, in the
stability of our money institutions. There is one etfect, from the extent
to which the banking system has been pushed in this country, which deserves
serious attention. I think the capital of the banks should rather fall short,
than exceed the demand of those engaged in trade; whenever there is an excess
of capital, the competition will be among the banks to lend, and they will ad
vance funds to those who are not entitled to credit. This fictitious credit,
given to individuals without property, will expose the farmers and planters to the
most serious injury; because, whenever they tail, their property will go entire
ly into the coffers of the bank, or the hands of their endorsers. In Baltimore,
where the bank capital has always exceeded the demand, by solvent custom
ers, and where, to give full employment to their funds, the banks have been
induced to accommodate mere speculators; failures have happened to the
amount of a million, without property to pay the creditors twenty cents in the
dollar. This has been the effect of excessive bank capital. [A gentleman
from Maryland corrected Mr. Burwell, by stating that the failures had ex
ceeded, in the aggregate, the sum he had mentioned, but in no single instance
had the loss to creditors exceeded 6 0 0 ,0 0 0 dollars.] I stand corrected; only
6 0 0 ,0 0 0 dollars; why, sir, this moderate sum would ruin a whole country, if
it had fallen upon the farmers. If the apprehensions of the public should co
erce you to renew the charter at this time, I shall consider it perpetual. The
same means which secured it now, will not be forgotten, or neglected, hereaf
ter. You may rest assured, the magic terror of bankruptcy will be reviv
ed, when there is occasion. Perhaps the growing wealth of the people, may
hereafter raise them above the control of the bank, with ten millions capital,
but if you should unfortunately adopt the favorite project of some, to establish
a grand national bank, with a capital stock equal to 3 0 ,0 0 0 ,0 0 0 dollars; if,
afterwards, you keep pace with tne growth of the nation, you may indeed de
spair of all control over it in future. It will become so interwoven with the
fiscal transactions of society, and so intimately blended with the existence of
the Government, that their duration will be co-equal; the dangerous power of
a bank, extended over the continent, with a capital which would necessarily
embrace in its funds, all the individuals of wealth and influence, would pro
duce the same effect with a national debt, to that amount; and when you re
collect, that this machine will be controlled and managed by the executive
branch of the Government, you cannot but feel the most serious apprehension
of the consequences. Sir, I do not discuss this question with party feelings;
I look forward to the time when the bank and Government, will feel in unison,
and act in concert; the opposition of the bank is temporary, and will soon
yield ti its obvious interest. It is that period to which my fears are directed.

148

BANK OF T H E U N ITE D ST A T E S.

Who can doubt that the present misunderstanding is the result of momentary
csuses? Yes, sir, the quarrel is an unnatural one, explanations will take
place, reconciliation will ensue, and then we may deplore their intimate friend
ship, infinitely more than their hostility now.
Banks are commercial institutions; the first impulse of their nature is to
make money, and support the power which can promote their profits; the
individuals concerned in them will feel political passions, and may indulge
them, but they will learn, from experience, the wisdom of suppressing their
passions when they hazard the loss of profit and patronage. I have, there
fore, felt no disposition to know any thing about the directors, or to hear the
instances of political Intolerance and individual favoritism. It would be silly
to found our views of the tendency of such an institution upon its conduct
during a particular period. I am against giving any set of men such exorbi
tant power over the persons and property of the community; I am opposed to
a moneyed aristocracy which can hunt down whoever may be offensive to them,
and not from hostility to the particular persons who now compose the bank.
S:r, the time may arrive when the Government may fall into the hands of
men whose policy may, in my estimation, lead to the destruction of the con
stitution, and the corruption of public virtue. Would you wish to see such
men bolstered up by live influence of a national bank? W ould you be satis
fied to see the good sense of the country hood-winked by money influence?
A corporation, possessed of such ample funds, could control presses or esta
blish them to support the most iniquitous men, and advocate the most detesta
ble principles. You should bear in mind that this influence cuts both ways;
and it is better to leave public opinion unfettered, trusting to the sound sense
and discretion of the People, free from the operation of all extraneous power.
What would the world say if you should demolish this bank to create ano
ther? Is there a man in the community who would not condemn you, and
justly reprobate a policy so short sighted and selfish? Such conduct would
give full scope to swindling and speculation; and scenes which stain with
shame the history of this Republic, would be renewed. Sir, the system of
paper credit, against which 1 have entered my protest, and to which 1 attri
bute the artificial and insecure state of this country, deserves nothing from
you. You need not violate the constitution to preserve and extend it; with
out your fostering care, enough will remain to alarm those who prefer solid
wealth to the mere appearance of it; although those who think the wealth of
a nation can be augmented by printing a few reams of paper will be dissatis
fied, they exult in the deception and premature prosperity which flows from
public delusion, and will be overthrown the first moment your real condition
maybe tested by difficulties. I, sir, have been accustomed to think the
wealth of a nation consisted in its productive labor, and its capital could be
safely augmented only in the ratio of the difference between its consumption
and productive labor. This is the true mode of acquiring capital: the process
will be slow, but the advance will be permanent. It will depend upon prin
ciples of economy, industry, and steady exertions; it is incompatible with
prodigality, speculation, and profligate acquisition of wealth. Virtue is the
basis of one, delusion and imposture of the other; a people thus situated,
steadily exerting its powers, will furnish ample means to procure circulating
medium, and prudent habits will add to it with sufficient rapidity; I have
always preferred being a happy to a splendid nation. Sir, I have now closed
my remarks; the particular situation assigned to me, by the House, in rela
tion to this subject, has compelled me to state the extent of my objections to
the bill. I have carefully refrained from expressions which could wound the
feelings, or impeach the motives of those who differ from me in opinion. I
have no disposition to say any thing about the transactions of the bank; they
are all unknown to me, and I care nothing about them. My conscientious
belief is, that the law was unconstitutional, and I sincerely trust we shall
destroy what has so long defaced its original purity—close up the breach
which has been made, and cement it by a vote upon principle. I confess the

ON T H E BILL TO REN EW T H E C H A R TE R OF 1701.

J 49

consolation I shall feel, in the success of my motion, will be greatly diminish
ed if it obtains by the intervention of other motives.
When he concluded, the committee rose and reported progress, and the
House adjourned.
J a n u a r y 1 7 ,1 8 1 1 .

Same question depending:
Mr. Fi s k . Mr. Chairman: 1 regret that we arc called upon <0 vote for or
against striking out the first section of this bill, at this time. I could have
wished that, upon a bill of so much interest and importance, we could have
proceeded to have filled the blanks, and made such amendments, as would
nave obviated many objections which may be urged against it in its present
form. I ain not prepared to give my vote in favor of a renewal of the charter of
the Bank of the United States, either upon the terms upon which it was ori
ginally granted, or in the manner contemplated by this bill; yet, upon condi
tions less objectionable, I should feel myself bound to vote in favor of a re
newal. But the question presented upon this motion is not upon what terms
this charter shall be renewed; hut whether it shall be renewed upon any
terms, subject to any conditions Congress may impose.
In this view, I consider it the most important- subject upon which this Con
gress will be required to act. It is determining a question, which is connected
with our finances, with the circulating medium of the country, and with our
agricultural, commercial, and manufacturing interests; and, as such, it cannot
but be interesting to every class of our citizens.
The interests and prosperity of the United States, are not only intimately,
but inseparably, connected with trade. The market of the farmer depends
greatly upon the merchant and the shipper. And the price and demand of
every article of produce is in a great degree, regulated by the difficulties or fa
cilities of payment. Let the difficulty of paying be increased, and the price,
of produce immediately falls; for the demand for exportation becomes very
limited, the markets are overstocked, and prices reduced. Any sudden
check to our commerce, whether produced by our own municipal regulations,
or the outrages of foreign powers, checks the market and the price of produce,
so that not only the merchants, but the farmers, feel its effects. I scarcely
need recur to the history of the times, when trade was principally suspended
in this country, to show how severely the suspension operated upon every
class of our citizens, and in every part of the country. This period in our
political annals will be long remembered. So great was the distress in some
States, and agricultural States too, that their legislatures deemed it necessa
ry, for the protection of the debtorfrom the power of his creditor, to stay the
administration of justice, and prohibit by statute the issuing of an execution
for the collection of any debt.
This proves the connexion which subsists between the two great agricultu
ral and commercial interests of this country.
Agriculture, commerce, and manufactures, constitute the source of our
wealth, revenue, and prosperity. To foster and cherish the principles upon
which rests our existing hopes and future prospects, can never be a question
of doubtful policy with a wise and patriotic legislature.
We have seen that commerce is essential to our interests; but commerce
will not flourish without credit. It never has prospered independent of cre
dit. As credit is essential to trade: so is punctuality to support credit.
Look at the business of anv commercial people and see the integrity and
fidelity with which punctuality is maintained in order to support their credit.
For several centuries past, banks have been the successful medium through
which credit has not only been preserved, but great wealth acquired. This
assertion is warranted by the history of these institutions, and of the countries
where they have been patronized. The first bank established in Europe, was
at Genoa, in 1-107, 404 years ago; this was soon followed by one at Venice.
The Bank of Amsterdam was established in 1609; and shortly after, those of
Hamburg and Rotterdam; and the Bank of England in 1694. The Royal

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BANK OF T H E U N ITE D ST A T E S.

Bankat Paris in 1718. The Bank of North America in 1784, a memorable
period in our history, and the Bank of the United States in 1791.
All these different institutions show, that enlightened legislators have enter
tained but one opinion upon this subject both in Europe and America, for the
last four hundred years. They have seen and acknowledged their utility.
Banks have long since been considered not only essentially useful in the trans
action of commercial concerns, but as highly necessary to aid the fiscal opera
tions of Government- And a more unanswerable argument cannot be urged
in favor of their general utility, than their uniform success; to this may be
added the prosperity of the people, and the countries, where banks have been
supported. Tlieir immediate advantages are, a convenient circulating medi
um; the safe depository they afford for cash and funds. And they serve to
keep the standard of money steady and correct; to insure punctuality; to pre
serve credit; to inspire confidence, and to promote a spirit ofindustry and
enterprize. They are not, as many have supposed, in their nature hostile to
government and dangerous to liberty. They rather form a barrier to tyranny
and oppression. Their principal business is to lend money at the common
rate of interest, and thus prevent usury. The owners of banks are generally
rich men, who have not only their personal liberty, but a large property to
risk, by sedition, treason, and rebellion. It is their interest to resist oppres
sion. We need scarcely point to the continent of Europe for proof of the fact,
when we assert, that trade and banks cannot flourish where despotism prevails.
Despotic power generally ruins trade and banks, but no instance occurs in
history, wnere banks, notunderthecontrol of government, have ruined a State.
A bank owned by government, and under its command, would be an engine
dangerous to the people. But when owned by individuals? neither the peo
ple nor the government have any thing to fear from it. It is, then, depend
ent on both for its business, prosperity, and usefulness.
With the evidence which botn history and experience offers to our reflec
tion, we cannot doubt the utility of banks, nor deny but that they have been
beneficial to us. And we are justified in the conclusion, that, under proper
regulations, they may subserve the best interests of the people of the United
States. They are now in successful operation in almost every State in the
Union, and that they have been useful, the present prosperous state of the
country abundantly proves. We enjoy as perfect security for life, liberty, and
property, as any people under any government ever did. These are the great
objects of a good government. And we may triumphantly ask, where is the
nation or people that enjoy these with more freedom and safety than the Ameri
can people ? A parallel for our liberty and prosperity, for the last twenty
years, is not to be found in the history of man. Our wealth, population ana
resources, have increased beyond what any one would have calculated, or
imagined; and beyond what strangers and foreigners now believe. Industry,
wealth, and contentment pervade every quarter of our country, and poverty
and oppression are unknown to our citizens.
In 1791, the year this bank was incorporated, our exports amounted to about
eighteen millions of dollars, and in 1804, they had increased to about seventy six millions, gaining in thirteen years, fifty-eight millions; and our tonnage in
about the same proportion.
Much of this prosperity is to be attributed to the activc capital, which has
excited industry and a spirit of enterprize among us; and the activity of this
capital has been, in a great degree, created and promoted by the Bank of the
United States. Its operations have been extensive in all our trading towns.
It has aided in loans and discounts, and assisted in the collection, saTe-keeping, and transmission of our revenues. It has been the depository of our
treasury, and is now become incorporated with the administration of the fis
cal department of our Government. The connexion which it has formed with
almost every branch of business in the country, is not slight and trifling, and
so easily to be severed as some seem to believe. Its operation are deeply in
terwoven with the dealings and concerns of all the men ot business in the
United States.

ON T H E BILL TO RENEW T H E C H A R TE R OF 1791.

J5 1

W ith a capital of ten millions, it has furnished accommodations of fifteen
millions a year. This has been employed principally in trade, in making
prompt and cash payments to our farmers for their produce. T his again has
furnished to our citizens a ready and profitable m arket for every article of pro
duce. These high profits of a good market have gone into the hands of the
fanner, to cultivate, improve, and enrich the country. And travel through any
State in the Union, and their effects may be readily seen, affording a prospect,
consoling and elevating to the philanthropist and the patriot. The land is
highly cultivated, good buildings, turnpike roads, bridges, and other expensive
improvements indicate the wealth of our citizens, and the prosperity of the
country. Money has been freely circulated; trade has been active; produce
high, and our country has been improved by these unexampled advantages to a
degree far beyond wnat the most sanguine calculations tw enty years ago could
have anticipated. And yet, sir, we are gravely told, that this bank has nearly
mined the country; that itis threatening our best interests with destruction!
As well might gentlemen tell us, that total darkness prevails at noon day; or
that the sun in his meridian splendor affords neither light nor heat to any part
of this globe.
The principal portion of the trade and business of the United States has
been conducted by a paper medium, metallic has scarcely been seen. The
amount of this circulating medium is, say fifty millions. Now, what is pro
posed by denying a renewal of the United States Bank charter? T hat tins
bank shall close its concerns, and of course stop alj its accomodations. This
must necessarily check and change at least one-third of the circulating me
dium of the country. It will undeniably require $-24,000,000 to be directed to
one operation, and, for a time, to one point: for the capital is $ 10 , 0 0 0 , 000 .
T his is to be collected to divide among the stockholders. T here are $19,000,000
due to the b an k ; this must be collected. This will occasion a demand for
this amount from other sources ; it must be paid. And the $5,000,000 in the
bank, makes the sum $24,000,000 which must be suddenly called in. T he
effect this will have upen the various interests in the country, can neither be
described, or conceived. It must inevitably give a general and heavy shock to
all paper credit—this credit so much and profitably in operation must receive a
severe if not a mortal wound. And what substitute have we for this, when it
shall be destroyed? Silver and gold coin cannot be relied 011. T here is not,
from the best estimate, an amount to exceed $ 10 , 0 0 0 ,0 0 0 specie in all our cities
and trading towns, and this will be collected by this bank. T he price of all
stocks and every kind of produce and species of property must suffer a great
depression: for a scarcity of money enhances its value, and, consequently, d e
presses the value of every other species of property. T hat this sudden, if not
total change in our system, must occasion great embarrassment, produce fail
ures, dissapointments, and distress among our citizens, is certain.
T o say the least of such a measure, is to term it an experiment which no
well regulated State has ever dared to m ake, from the first institution of civil
ized society to the present time. Stronger governments than ours, in risking
such an experiment, would ensure their overthrow and ruin. Perhaps the
good fortune of the American people is a sufficient guarantee against all the dis
astrous consequences which any other people might experience from such a
measure. B ut I own, sir, I dare not incur by my vote the awful responsibility
of this bold and untried experiment, unless compelled by the constitution.
T his, in my most deliberate opinion, the constitution does not require.
B ut the question of constitutionality I shall not at this time discuss. If it is
a question which Congress may discuss and decide, it was discussed and d e
liberately decided at the time this charter was granted. T he decision it then
received has met with the general approbation of the States and of the people.
Branches have been established in a number of the States, and the bills have
circulated without opposition or difficulty in all. And counterfeiters of this
paper are punishable for forgery, by the statutes of the different States. For
tw enty years, this institution has received the countenance and patronage of
the Government. In this patronage there has been no difference in the several

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BANK OF T H E U N ITE D ST A T E S.

administrations, unless that o f the republican administration lias been the
most extensive. T h is bank has been employed by the Government to keep its
treasure, to collect and transmit the revenue—and the Government, it will be
recollected, originally owned two-fifths of the capital, which has been sold at
a great advance. T he United Slates owned $-2,000,000, equal to 5,000 shares.

2493 shares were sold in 179G—7, at an advance of 25 per cent.
25 per cent, gain,
First sale amounted to -

287 shares sold in 1797, A t 20 per cent, advance, gain,

$997,200
298,600

$1,295,800

$114,800
22,960

$137.760
B y the republican administration in 1802, 2,220 shares,
A t 45 per cent, advance, gain, -

888,000
399,600
$1,287,600
137,760
1,295,800
$2,721,160

So that the United States gained $721,000; and of this, $399,600 has been
received by the adm inistration under M r. Jefferson. T his sale was sanction
ed by a vote ofthe House of Representatives, although it was to a foreigner, an
Englishman, M r. Baring; and our Government gained on this sale $399,600.
T his conduct of the Government, and of the then republican m ajority of the
House of Representatives, did not evince any scruples about the constitution
ality of the charter. I f it was deemed unconstitutional and dangerous to the
liberties and best interests of the people it was not for those who entertained
this opinion togive it countenance and support. They ought rather to have taken
measures to have checked and stopped its operations. And there is nothing in
the argument that the faith of Government was pledged for tw enty years, and
the law, although unconstitutional, could not have been repealed: for Con
gress cannot pledge the faith of Government by an unconstitutional law. If
Congress should establish a monarchical Government in any State or T erri
tory, and by law'guarantee it to the people for twenty years, would any one
dare to contend that the faith of Government was pledged for tw enty years,
and this law could not be repealed? Certainly not. And why? Because such
a law would be unconstitutional. I t would be the duty of the legislature to
repeal it, because the members are sworn to support the constitution. And
how will gentlemen who have been members of this House many years, and
entertaining the opinion that this charter was a violation of the constitution,
and voting to approbate the sale of the bank stock, and for other measures to
countenance its operation, and never attem pting to rid the country of this
monster, reconcile their conduct with their duty? I t can only be reconciled
by the conclusion that they did not question the constitutionality of the charter.
T his conclusion is w arranted by the act of Congress, passed 16th February,
1§04, [L aw s U . S . vol. 7, page 87,1 in these words, entitled “ an act, supple
mentary to the act to incorporate tne subscribers to the Bank of the United
States.”
“ B e it enacted by the Senate and House o f Representatives o f the United
States q f Am erica, in Congress assembled. T hat the president and directors
o f the Bank o f the United States shall be, and they are hereby, authorised to
establish offices of discount and deposite in any part o f the territories or depen
dencies, of the United States in the manner and on the terms prescribed in the
act to which this is a supplem ent.’'

ON T H E B IL L TO RENEW T H E C H A R TE R OF 1791.

J53

If the original law was unconstitutional, this act extending the powers of
the corporation was equally unconstitutional. T h is act was passed by a
republican Congress, who did not believe that the original charter was uncon
stitutional. It is but lately, very lately, that constitutional difficulties have
suggested themselves to some gentlemen. Even at this time, the administra
tion has no objection to the constitutionality o f the measure. T he report of
the Secretary o f the Treasury, the proper officer to speak the opinion of the
E xecutive upon this question, is my authority for the assertion, that the E x e
cutive w ill nave no constitutional difficulties to encounter in passing a bill
for the renewal o f this charter. That report was made pursuant to a resolu
tion of this H ouse, and has been laid upon our tables. It states no objections
to the renewal of the charter, but points out the advantages the Government
have derived from this bank, and hereafter may derive, if it shall be continued.
How is it that this report of the chancellor ol the exchequer, upon aquestion
of financial economy, is not respected, as were his reports in former times?
H as he lost his talents at calculation? D oes he tell unwelcome truths, or
is there “ something rotten in Denmark?'1'’ Great exertions have been made
to excite sensibilities, and clamor against the renewal o f this charter. T he
money changers, stockbrokers, and speculators, vultures that prey upon the
vitals of the community, have been flying through the country, denouncing
all who should express or entertain an opinion in favor of the measure. But,
I trust, we are not yet arrived to that period in the history o f our Govern
m ent, when Congress must legislate under the hissings o f the gallery, or the
denunciations of prostituted or misguided presses. I f we are, sir, w e may
bid adieu to our liberties. Unawed by these vaticinations, it becomes us to
examine patiently, and decide deliberately this great question presented to
our consideration for decision.
In examining this question, we are naturally led to inquire, is an institu
tion of this nature, in the present state of our country, necessary— is it proper ?
and in pursuing this inquiry, let me recur to the report of the Secretary of
the Treasury; and see if the aid of this institution is required in the administra
tion of the financial department of the Government. W ill not his experience
enable him to answer tne question correctly ? T o what better authority shall
we resort ? W hat are the principal duties of the Treasury Department? T he
collection, safe keeping, transmission and disbursement o f public moneys.
For performing all these duties, this bank has been the efficient and faithful
agent. In tw enty years past, it has collected and disbursed, at it own risk,
not less than 100,000,000 dollars public moneys. I f you allow the revenue to
have averaged $5,000,000 a year, it would amount to this sum received in,
and the same amount transmitted and disbursed, amounts to $200,000,000 in
tw enty years. Having a greater capital than any other company in the coun
try, the public money is more secure with this company than any other. It
then assists essentially in the safe keeping of the m oney, and this the report
tells us is one o f its advantages to the Government. B ut its more essential
assistance to the Government is in the collection and transmission of the
revenue at its own risk. Our revenues are secured by bonds, and these bonds
are payable at this bank and its branches, in the different ports of collection.
T h ey are, accordingly, lodged in the bank for payment, and when due, they
must be punctually paid, or the debtor loses his credit at the bank, and o f course
in the commercial world. H ence every exertion is made to pay at the tima
the bond becomes d u e ; and hence our revenue has been paid with such
scrupulous punctuality and with so few losses. A nd is it not an object of
magnitude, that we provide for the safe and sure collection o f our revenues,
which in prosperous years, may amount to eighteen or tw enty millions o f
dollars?
P ut down this bank, and how are your revenues to be collected? Through
the medium of the State banks? You do what no prudent man in his individual
concerns, would think o f doing. You discard a faithful, honest, responsible
agent, whose integrity and fidelity you have known for tw enty years, and you
place your estate in the hands, and at the disposal of, tw enty or thirty entire
20

154

BANK OF T H E U N ITE D ST A T E S .

strangers, o f whose character and responsibility you know nothing, nor have
the means of acquiring any knowledge, and over whose conduct you have no
control. Should an individual act thus with his property, he would be deemed
to have lost all regard for it, if not considered a madman. In resorting to
the State banks, we are offering the amount of our revenue as a bounty for
intrigues, cabals, and faction, through the country. In almost every State there
are a number of banks, and each will endeavor to get the revenue collected
in that State, to keep and trade with. It must be given to one or divided
among them all. I f one is selected as the fovorite, all the rest become jealous,
dissatisfied, and exert their capital and influetice against the favorite bank, and
its patron, the Government. T his w ill awaken a spirit of faction in every
State, yet unknown in this country. I f all are to be gratified in their request
for the deposites, the Government must open separate accounts with all the
different banks in the country, to the amount o f fifty or sixty, and new com
panies w ill be formed, and new applicants request to divide the business and
share the profits. Indeed, there w ill be no end to the scenes of speculation
and intrigue which w ill soon appear, if this course is adopted by the Govern
m ent.
Again: the Government have no means o f ascertaining the system or princi
ples upon which these different banks conduct their business; they are creatures
o f the States, and in no way answerable to the General Government. T he
treasury cannot inspect their books, nor ascertain their funds; of course we
must be ignorant o f their responsibility. And yet we are to deposite moneys^
in their hands, to five or ten times tne amount o f their capital. But few of
the State banks have a capital beyond a million. In N ew York and Boston
the revenue deposites may amount to five or six millions a year; and are we to
intrust this with a corporation, which, if it failed, would not pay more than a
filth part o f it? Besides you may not be able to command these moneys when
required, if left with those over whom you have no power. It is possible
some o f these State institutions may be hostile to your Government; they may
refuse payment, and this refusal be supported by the State. Shall we place
our public treasure under the control o f States which can order out their
militia to oppose and resist the execution o f our law s, or refuse their aid
to enforce them?
B ut, suppose the revenue collected, and safely kept by these different banks,
how is it to be safely and speedily transmitted to different parts of the Union,
to answer the demands of Government, and at whose risk and expense? Can
the opponents of this bill obviate this difficulty? It is a difficulty o f a two
fold nature, first, in finding a safe mode of conveyance, and secondly, a con
venient medium to transmit. Specie cannot be procured; and what State
bank bills, i f sent, would pass current in every part of the United States, as
the bills of this bank do? Carolina and K entucky bills are unknown, and
would not pass in N ew York and Boston; and N ew York bills would not
pass in K entucky or Carolina. N ew England bills do not pass in N e w York,
but at a considerable discount. B ut, under the present system , if Govern
ment have five millions deposited in B oston, and it is required to be paid at
N ew Orleans, a draft is given by the branch in Boston upon that in N ew Or
leans, and the money is paid at the latter places as soon as the mail can travel
L there.
Again: i f the Government is to take the risk o f collecting and distributing
the revenue, let us inquire what this can be done for. T he revenue amounts
to, say ten millions o f dollars, collected and paid out annually, and allow
one and a half percen t, for collecting, and one and a half per cent, for trans
mitting, as low a rate as it would be done for, and this, on tw enty millions,
amounts to 000,000 dollars a year, a sum equal to our civil list.
B ut, another serious evil is to be encountered in putting down this bank;
you deprive the country at once of a circulating medium. Silver and gold
cannot be had; and what paper, but that o f the U nited States B ank, will pass
current in every part o f the Union? N on e. You can outride, in twenty-four
hours, the credit o f any other bank in the country. T his evil will be most

ON T H E BILL TO RENEW T H E C H A R TE R OF 1791.

155

seriously felt in the interior. I t will at once check emigration from the North
and E ast to the W est. For those who wish to remove, will not be able to
sell their property; it will fall essentially in value; and if they should sell,
coin not being in circulation, they could not procure any paper money which
would pass current to pay the expenses of travelling from Massachusetts to
Ohio and Tennessee; and if they should arrive there, they would have noth
ing to purchase land with. The sales of our land must stop for a time, at
least till specie can be brought into circulation, for specie only is taken in
payment; this comes now through banks; but the banks will require it all for
their own support.
And will not the people inquire why all this pressure and embarrassment?
T hey certainly will. A nd will they be satisfied with the answer, that the
bank was unconstitutional, and could not therefore be continued? No, they
will not believe it. T hey will justly reply, that this state of things ought to
have been foreseen and provided for by tneir rulers, as it might have been.
In the ten past years of peace, plenty, and prosperity, which we have expe
rienced, instead of devising a system to take the place of the present bank, on
the 4th of March, what have the rulers done? T hey seem never to have once
thought of the event that is now about to happen? By the acts of Govern
m ent, the country has, in a degree, been deprived of the capital which might
have been here to meet the crisis. Above $30,000,000 have been sent out of
the country, and much of it in specie, to pay the public debt, when payment
was not demanded. All internal taxes have been repealed, and reliance for
revenue has been made on imposts and tonnage, which are now about to fail
us, and that, too, when the treasury is nearly exhausted. F or, after paying
the $2,750,000 to this bank, there will not remain much more than this amount
in tne treasury. T he revenue bonds outstanding, to the amount of about
$10,000,000, will not, cannot be paid, if bank accommodations are to stop.
Recourse must be had to loans, tne last resort of empty purses and empty
heads, and a press for money, and its high price, will render loans difficult
to be effected, and subject the Government to a high rate of interest.
These considerations suggest to us the imperious necessity of continuing
the operations of this bank, under such restrictions as may be deemed most
advisable, and thus to keep in motion the present system of credit, and sup
port the existing principles of doing business throughout the country.
A nd what are the reasons for refusing a renewal of this charter? L e t them
be examined, and, unless they are so liaan d substantial, let them not prevail.
One reason assigned is, that it employs a foreign capital, which is injurious to
our country.
This is not an objection of any weight; and if it were, have Congress the
power to prohibit the employment of foreign capital in the United States? I f
we prevent it from being employed in this bank, it may go into the State banks,
or take any other direction, not prohibited by the constitution or laws of the
country. B ut it has ever been tne liberal policy of this Government, to invite
foreign capital, and foreigners, to come among us.
Gentlemen seem to consider that portion of this stock, held by foreigners,
a s haying no other connexion with our own citizens, than compelling them to
pay eight per cent, per annum interest for it.
L e t us for a moment see how this money, to the amount of $7,200,000,
owned by foreigners, is employed, and the objection urged on this ground must
vanish. I t will not be denied, but that it is used in trade. And it is wanted
here, to make cash payments for shipments made to Europe. T his enables
the American merchant to make prompt payment for the goods he imports
from Europe, by which he obtains them, say eight per cent, below the credit
price, while he, instead of obtaining this credit in Europe, obtains it at the
bank for six per cent. H ere, then, is a difference of two per cent, in favor of
the American merchant. T his, on $7,200,000, amounts to $144,000 a year—
in tw enty years, to $2,880,000. This is one item saved in retaining this capi
tal, in this institution—and $ 1, 2 0 0 , 0 0 0 , the sum to be paid by those stock
holders for the privilege of continuing their capital in this bank, is another

156

BANK OF T H E U N ITE D ST A T E S.

item —and another, larger than either of these, is the advance upon the stock
proposed to be subscribed by the United States, which may be estimated at
$2,000,000. T hese, together, amounted to $6,080,000, which the Govern
m ent and citizens of this country will receive by passing this bill. So far,
this would be raising a revenue, and not liable to any constitutional objection.
B ut, it is said, this capital has an influence upon elections, unfriendly to
liberty. W hatever may have formerly been the political influence of this in
stitution, the competition of banking business has long since rendered it harm
less as a political engine. B ut, while gentlemen complain of its accommoda
tions being partial, they propose the singular remedy of destroying them en
tirely; because it has committed the fault of not accommodating every body,
it m ust now cease to accommodate any body.
I f we have not too much capital, our citizens will find a profitable use for
this. T hat this is w anted, and engaged in business, is incontestibly proved by
the dividends which this bank has made of eight and nine per cent, profit. I f
the charter shall expire on the 4th of M arch, this $10,000,000 capital, which
may, and probably will be collected in specie, will be again thrown into circu
lation here, or sent out of the country.
Suppose it retained here, what are we to gain or lose by the experiment?
T he scarcity of specie consequent to this operation, will appreciate its va
lue, and, in like proportion, depreciate the price of every other kind of proper
ty, say thirty per cent. These foreign stockholders, having $ 7 , 2 0 0 ,0 0 0 in
specie, will be able to speculate on the distresses of your own citizens. They
will be the gainers, we the losers. I f they can make by the bargain, as they
undoubtedly may. 30 per cent, this on $7,200,000 would amount to $2,160,000;
which, added to then-present capital, would be $9,360,000. T his amount,
vested in any other bank stock, or valuable property, would continue to yield
them eight per cent, profit annually. T his, on $9,360,000 amounts to $744,800
a year, $168,800 more in a year than they would receive by continuing their
capital in this bank. It is evident that a refusal to renew the charter of the
Bank of the U nited States will not prevent the use of foreign capital among
us, as has been urged by gentlemen opposed to a renewal. I do not allude to
the gentleman from Virginia, [M r. B u r w e ll] he does not consider it an
objection that so much ot this stock is owned by foreigners.
B ut let us, for a moment, suppose, that, on a dissolution of this bank, this
capital goes out of the country; it is owned by proprietors who reside in Eng
land, where bullion is 15 per cent, above tneir paper currency, and if this
$7,200,000 should be sent to Europe it would drain nearly all the specie Irom
the country. Unless it can be employed here to more advantage, it will, as
an article of merchandise, leave the country for a better market. B ut it will,
at any rate, be in the hands ol those who may not, after the refusal to renew
this charter, feel very solicitous to aid the operations of your Government, or
relieve the distresses of the people, by sending this specie into circulation
among us. W e should require strong arguments, indeed, to induce us to
adopt a measure which may a t once drive out of the country, or lock up so
large a portion of the specie capital. W hether it goes out of the country, or
remains for a year inactive here, the effect upon the community will be the
same. T he great demand, and high price of specie, will depress the price of
every kind ot stock and every species of property; our wheat, cotton, hemp,
tobacco, and every article of produce, m ust suffer a depression of at least 10
per cent.—perhaps not find a market at any price. T ne nation will be sub
jected at once to the loss of a sum at least equal to the amount of the whole
capital of this bank. For the amount of produce and merchandise in the
country may be estimated at $100,000,000; a loss of 10 per cent, would be
$10,000,000, a sum equal to our revenues for one year. By whom is this loss
to be sustained? By the merchants? N o, it will fall upon the farmers, the
manufacturers, and mechanics; your rich moneyed capitalists are safe, nay,
they are the only men v ho will profit by such a state of confusion and
distress.

ON T H E B IL L TO R E N E W T H E C H A R T E R OF 1701.

157

W hen I advocate a continuance of the present system, I advocate the in
terest of the farmer, the mechanic, and even the laborer? who, alone, must
suffer most severely by the experiment of breaking up this bank and your
iresent system of paper credit. Of this we may all be convinced when too
ate to remedy the evil. T he effect it may produce may be entirely different
from what the opponents to this bill now believe. Instead of a blessing, it
may prove a scourge and a curse to the country. Politicians, we all know ,
are liable to err in their calculations, and often mistake the real bearing and
effect of their measures upon the community. T he Turkish Government
once devised and adopted an infallible expedient, as the rulers believed, to
prevent a scarcity of corn, by prohibiting the exportation of this article. B u t
the consequence of this favorite measure was a famine, w ant, and calamity,
instead of plenty and happiness.
And are gentlemen, wno are opposed to the renewal of this charter, quite
sure what will be the consequence of stopping at once the operations of this
bank? I apprehend not. 'lh e y all admit it will, for a tim e, occasion some
embarrassment to our citizens and our treasury; but they differ as to the ex
ten t of the evil, and tell us that all the calamity is to be far outweighed by the
blessings which are to follow; and, among other blessings which are to result,
is the cneck which is to be given to trade. W e are told that there is too
much credit, and too much trade; that failures are continually occurring, and
that, although the merchant fail, the farmer bears the loss. A single glance
at the manner of transacting business in our commercial towns must convince
any gentleman that, when a merchant stops payment he is seldom indebted to
the farmer. H is credit contracts are with the banks and merchants in town;
instead of purchasing produce from the farmer upon credit, the merchant
obtains a credit at tne bank, procures bills, and is, in this way, able to pur
chase from the farmer for ready money, and if the merchant fails, his credi
tors in town, not in the country, are generally the sufferers. By lessening or
destroying bank accommodation, you transfer the credit from the city to the
country. Then, if a merchant should fail, his creditors in the country, the
farmerSj would suffer; should this be the effect of putting down this bank,
the agriculturist, who now sells his wheat, hemp, cotton, and tobacco, for
cash, will be compelled to sell upon credit, and take the risk of failure from
the banks and merchants to himself. Is this the manner in which trade is to
be lessened by stopping bank credit?
B ut it has been urged that we have too much paper in circulation. Admit
it. T he destruction of this bank will increase, not diminish, the quantity of
circulating bank paper; and 1 consider the embarrassment which must im
mediately follow the closing of the concerns of this institution as the least of
the evils the community will experience from a refusal to renew the charter.
Congress may, indeed, prevent the operation of this bank after the 4th of
M arch, but Congress can neither prevent a spirit of trade, nor subdue the
passion for speculation. For, while we are debating the expediency of d e
stroying this bank, in order to free the country from the mischiefs of an
extended bank credit, we find new banks springing into existence in every
direction. W e have no less than live bills now on our table for incorporating
this number of banks in this ten mile square district. And the gentleman
from Virginia [M r. B u r w e l l ] has told us, that these applications are an evi
dence of capital or of corruption; but I consider them rather as evidence of
the destroying spirit of speculation, which threatens to stand upon the ruins
of the United States Bank, till the country shall be overwhelmed with new
emissions of paper from these new manufactories. T he banks established by
the State Legislatures will scramble for the privilege of filling the chasm to
be made by the destruction of the Bank of the U nited States. Already arc
they preparing for the patriotic endeavor. Our State legislatures are to be
importuned to become bank-jobbers, and joint undertakers and copartners
in the enterprize. T he profits are to furnish revenues sufficient to satisfy
both avarice and ambition. Notwithstanding the provision in the constitu
tion that no State shall “ trait bills o f c r e d i t we find almost every State in

J5 8

BANK OF T H E U N ITE D ST A T E S.

the Union interested in banks, authorising corporations to issue bank bills,
which, so far as they exceed the capital upon which they are issued, are in the
nature of bills of credit. Several States own stock in these banks, and, a 9
such stockholdersjare responsible for the payment of these bills; Pennsylva
nia, Virginia, and Vermont, are large stockholders in their State banks;
N ew York and N orth Carolina have also an interest in some of their banks.
T h e States cannot be restrained, nor is it to be wished that they should be
prohibited altogether from incorporating banks. B ut what difficulties are we
to experience in resorting to these numerous and conflicting institutions for
the collection, safe-keeping, and transmission of our revenues. T h e deposites of the Government will render banking profitable to the favorite bank
that receives them. T he aid of the Government will make this bank supe
rior in funds and credit to any of the others which do not share this solid
patronage. This will produce jealousies and collisions of interests between
Banks in the same State, and thus form cabals against the State and General
Governments. I t will not stop here, but will extend from State to State. I f
the States and State banks are to regulate trade in the article of paper money,
they may prescribe the term s. T o give the preference to their own paper,
they may exclude that of any other State from circulation among them in the
same way that the paper of unincorporated banks is excluded by some States,
and bills of a certain amount from others.
T he great commercial States will have in their power the paper of the small
and agricultural States: for where there is most trade, there the most cu rren t
bills will be the most valuable. T he bills of N ew York and Pennsylvania,
from the great trade and frequent intercourse between their capital cities,
would be in greater demand than any other; the bills of either State would
pass current in the other, and this would give them a credit and currency
superior to all other bills. T hey would of course drive the others out of
the m arket. A nd, sir. it is possible that other banks may attem pt to make
up, in the quantity of their paper, the deficiency in its quality and credit, and
all may overtrade their capital, discount far beyond their funds, until a gene
ral depreciation of their paper shall produce general failure, and universal
distrust in all paper credit. I t is the duty ot the Government, if in their
power, to avert such a state of confusion, to protect and preserve the country
From such complicated ruin. B ut we are about to invite and precipitate this
destruction by throwing away the only means we possess to prevent it. Stop
this bank, and what check is there then to lim it the discounts of all other
banks? T hey may issue paper to any amount and without funds to redeem
it. T here may, and very probably will be, a common interest and feejing
among them to uphold each other, until all shall deem it advisable to fall.
H itherto the Bank of the United States, by its large capital, anti the amount
of its specie always on hand, has confined the discounts of other banks to cer
tain limits, and compelled them to observe some proportion between their
loans and actual funds. And, in this way, it has served as a barometer to
ascertain the credit of other banks; as a regulator to keep them within such
bounds as might be safe to the community. B ut take a w a y this regulator,
and the other banks may go on without fear or restraint to loan millions, w ith
out having a dollar in their vaults, until all will be reduced to bankruptcy, as
we have already witnessed, in some parts of N ew England. W e have been
told, by gentlem en, that this bank has been the cause of the excess of bank
paper, which has prevailed in some of the Eastern States. This I deny.
vVhat has been the conduct of banks in that quarter? A considerable num
ber of banks were established in the interior of M assachusetts and N ew Hamp
shire, and they went o n to issue their bills to a great am ount, without re
gard to their actual funds, and without any specie to redeem them- And had
th e s e bills circulated only in places where banks were conducted in a man
ner equally loose and unprincipled, the imposition would not have been readily
detected; but when these bills appeared at the Branch Bank of the United
S t a t e s , their real value w a s tested; they were returned, and the system of
banking without specie or capital was broken up and destroyed. It will

ON T H E B IL L TO REN EW T H E C H A R TE R OF 1791.

J5 g

hardly be contended that our revenues would have been perfectly secure in
these banks. And what assurance have we that they will be more safe in the
others? T he Government of the United States cannot lim it their discounts,
inspect their books, or ascertain the state of their funds, or the principles upon
which they act. It never can be seriously insisted, that it would be advisable
to deposite the public moneys in this manner. I t would be offering the reve
nues of the Government as a bounty for bank factions, and bank frauds. And
why shall we be driven to make these dangerous, ruinous experiments? W e
experience no hardships, no real difficulties growing out of our present sys
tem. I f we continue it, none are to be apprehended. W e shall preserve a
paper medium, well known and long approved, with which the people of this
country are well satisfied: for not a single remonstrance has been offered
against continuing the operations of this bank, whilst thousands of petitioners
have solicited Congress to renew the charter. Nothing, but considerations of
the most imperious nature, should induce Congress, at this time, to refuse a
renewal of this charter, and thus compel the extensive moneyed operations of
this company to stop at once. T he situation of the country is, at this period,
peculiarly unfavorable, if not unequal to such an operation. B ut a small
amount of specie in circulation, and the course of exchange continually les
sening the quantity, draining it from the country; a large portion of the
m erchant’s property seized in Europe; our treasury nearly exhausted; a non
importation about to be adopted; our revenue to be thus cut off; our army and
navy expenditures to be increased; and, in this state of our national affairs,
we are about to destroy all confidence in paper credit; to adopt a measure
which must produce general disappointment, failures, and bankruptcy. How
ever unconcerned and secure some gentlemen may feel about the consequences
which may result from such a state of things, I cannot but contemplate them
with the most fearful apprehension. Can the people extend their confidence
to the wisdom and expediency of measures which, instead of promoting the
general welfare, produce general distress? W hy, sir, we seem to cherish as
little regard for the opinions of the People, as if they had nothing to do with
the Government.
B ut the remedy for all the evils growing out of this breaking down measure,
is to be found, we are told by some of its advocates, in the establishment of a
new national bank upon the ruins of this. T he country is to be subjected
to the spasms and throes of death and birth, at the same instant, in order to
preserve, by this bold practice, its constitution. This is a refinement in State
quackery, which must prove fatal to the patient.
A re the advocates for a national bank quite sure that they could obtain a
law of Congress for its establishment, if the U nited States Bank were out of
thequestion? lapprehend not. M anyserious, if not insurmountable difficulties,
would be found to exist. W hen an increased demand for money should have
rendered it scarce, it w'ould illy comport with that discretion and intelligence
which ought ever to distinguish the proceedings of Congress, to increase the
scarcity of this article, by enlarging the immediate demand for it. W hile
$24,000,000 would be employed in closing the concerns of one bank, $30,000,000
are to be called for to commence fhe operations of another. This would
be levying a requisition upon all the circulating medium of the country at
once. It would-create a demaml which could not be satisfied. I f this ob
jection could be removed, there are others still stronger to be obviated. It
would be found difficult to convince the States concerned in banks, that
their interests are to be promoted by a great rival bank, with a capital and
ability equal to the management of all the banking business in the country.
W ill the great commercial States of Massachusetts, New York, and P enn
sylvania, accede to this measure? T hey will not, unless they disregard all the
profits they might derive, by uniting to give credit and currency to the paper
of their own banks, unless they neglect to improve the advantage they would
in such case have over the other States. I f some States now recommend to
their representatives to oppose a renewal of this charter, would th e y b e le s 9
attentive to their own interests, and more sparing of their advice, when a

160

BANK OF T H E U N ITED ST A T E S.

n a tio n a l b a n k s h o u ld b e a tte m p te d ? N o , s ir . N o r w o u ld t h e i r r e c o m m e n d a
t i o n s b e le s s r e g a r d e d th a n u p o n th e p r e s e n t o c c a s io n . I f a b a n k w ith b u t
$ 1 0 ,0 0 0 ,0 0 0 c a p i t a l, h a s a w a k e n e d S ta t e j e a l o u s ie s , a n d r o u s e d to a c tio n S ta te
i n t e r e s t s a g a in s t i t , w h a t a r e w e to e x p e c t w h e n a n e w b a n k o f §30,000,000
s h a jl b e p ro p o s e d ? T h a t su c h a n i n s ti tu t io n c o u ld b e e s ta b lis h e d w i th o u t o p
p o s itio n ? N o . I t c o u ld n o t s u c c e e d a g a in s t th e o p p o s itio n i t m u s t a n d w o u ld
e n c o u n t e r . P u t d o w n t h e B a n k o f th e U n it e d S t a t e s , a n d , h o w e v e r e s s e n tia l
a n i n s t i t u t i o n o f th e k in d m a y b e f o u n d , e it h e r to f u r n i s h a c ir c u l a ti n g m e
d i u m , w h ic h s h a ll p a s s c u r r e n t th r o u g h o u t t h e U n i te d S t a t e s , o r a id in th e
a d m i n i s t r a t i o n o f th e f in a n c e s , t h e G o v e r n m e n t w ill n o t h a v e t h e p o w e r to e s
ta b lis h i t . A la w f o r th e p u r p o s e , w o u ld n e v e r b e s a n c tio n e d b y a m a jo r ity
o f b o th H o u s e s o f C o n g r e s s . A n d , i f w e c a n n o t c o n t in u e th e p r e s e n t b a n k
u p o n a n y t e r m s , n o o th e r o u g h t e v e r to b e a u t h o r iz e d b y C o n g r e s s . F o r to
w h a t a s t a te o f t h in g s m ig h t a n e w n a tio n a l b a n k , w i t h t w e n t y o r t h i r t y m il
lio n s c a p ita l, r e d u c e t h e c o u n tr y a t th e e x p ir a tio n o f t w e n t y y e a r s f ro m th is
t im e ? I t s s t o c k m ig h t g e t i n to t h e h a n d s o f f o r e ig n e r s , o r b e o w n e d b y th o s e
w h o w o u ld b e f o u n d in t h e o p p o s itio n to th e a d m i n i s t r a ti o n ; a n d s u r e l y , th is
w o u ld f u r n is h r e a s o n s a s p o w e r fu l fo r p u ttin g d o w n th e n a tio n a l b a n k , a s th e
B a n k o f t h e U n i t e d S t a t e s ; a n d th e c o u n tr y w o u ld be c o m p e lle d to s u b m it to
a n o t h e r g e n e r a l s h o c k , a n d , p e r h a p s , d e s tr u c ti o n o f p a p e r c r e d i t . I f w e h a v e
n o t s t a b il i t y a n d d is c r e tio n s u f f ic ie n t to c o n tin u e a n d s u p p o r t s u c h a n i n s t i t u
t i o n , w e m o s t c e r t a in l y s h o u ld n o t u n d e r t a k e to e s ta b lis h it. F o r w e a r e e x
p o s in g th e c o u n t r y to a l t e r n a t e a f llu e n c e a n d p e n u r y ; m a k in g e x p e r im e n ts
r u i n o u s t o th e p e o p le , a n d d e s t r u c t i v e to th e G o v e r n m e n t.
S o m e g e n t l e m e n t e l l u s t h a t t h i s c o r p o ra tio n c a n c lo s e i t s c o n c e r n s w ith o u t
o c c a s io n in g a n y e m b a r r a s s m e n t i n th e c o m m u n ity . I f t h e t r ia l is to b e m a d e ,
I m o s t s i n c e r e l y w is h th e y m a y n o t b e m i s t a k e n ; b u t to m e i t a p p e a r s u t t e r l y
i m p r a c tic a b le . T h e g e n tl e m a n fro m V ir g in ia [ M r . B o r w e l l ] s e e m s to t h in k
t h a t t h e s h o c k w ill b e s lig h t, a n d s c a r c e ly p e r c e iv a b le ; t h a t th is a n g r y c lo u d
w ill b e d is a r m e d b y th e c o n d u c tin g p o w e r s o f t h e S t a t e b a n k s . B u t c a n he
a s s u r e u s , t h a t s u c h w ill b e th e r e s u l t fro m a n y a c t u a l e x p e r im e n ts w h ic h
h a v e e v e r b e e n m a d e in th is b r a n c h o f p h ilo s o p h y ? I b e lie v e n o t. A n d i t is
t o b e a p p r e h e n d e d , t h a t , e v e n i f th is c lo u d s h o u ld d i s a p p e a r , c lo u d s o f d i s
c o n t e n t a n d fa c tio n w ill s u c c e e d , a n d m a y so o n b e s e e n h u r r y in g a n d c h a s in g
e a c h o t h e r o v e r t h e p o litic a l f i r m a m e n t o f A m e r i c a , u n t i l th e te m p e s t c o m e s
o n , w h ic h s h a ll c lo s e f o r e v e r th e p r o s p e c t o f o u r u n ite d s t r e n g t h a n d h a p p i
n ess.
T h e ti m e s a r e d a n g e r o u s fo r n a tio n a l e x p e r im e n ts . W h e n w e lo o k a r o u n d
u s , w e fin d th e p o litic a l p a s s io n s o f m a n r is in g to m a d n e s s ; lo n g e s ta b lis h e d
g o v e r n m e n ts b r e a k in g u p t h e i r s tr o n g f o u n d a tio n s , a n d t h e w o r ld a lm o s t
d e lu g e d w ith b lo o d a n d w a r f a r e ; w e a lo n e , s t a n d u p o n th e n a r r o w is th m u s o f
p e a c e a n d p r o s p e r ity . A n d is i t f o r u s to c o m p la in ; to b e d i s c o n te n te d w ith
t h e p r e - e m i n e n t h a p p in e s s w e e n jo y ; to h a z a r d o u r p r e s e n t e n v ia b le c o n d itio n
u p o n t h e d o u b tf u l r e s u l t o f th is g r e a t a n d s u d d e n c h a n g e in th e a d m in is tr a ti o n
o f o u r n a tio n a l f in a n c e s ? N o , s ir . I t b e c o m e s u s to b e w a r e o f in n o v a tio n s ;
to w e ig h w e ll t h e c o n s e q u e n c e s o f e m b r a c in g a n y n e w s y s t e m , o r a b a n d o n in g
a n o ld o n e . B u t , s ir , I w ill n o t d e t a i n th e c o m m itte e lo n g e r . I h a v e a l r e a d y
o c c u p ie d m o re o f t h e i r tim e t h a n I i n t e n d e d ; b u t a s e n s e o f d u t y h a s c o m
p e lle d m e to s t a te m y o p in io n a t le n g th u p o n t h e im p o r ta n t q u e s tio n b e fo re
u s. A n d , i f t h e c h a r t e r o f th is b a n k is n o t to b e r e n e w e d , o r c o n ti n u e d u p o n
a n y c o n d i t i o n s , I a m r e a d y to h o p e , t h a t m y a p p r e h e n s io n s o f th e e ffe c ts t h a t
t h e r e fu s a l w ill p r o d u c e in th is c o m m u n ity , m a y p ro v e g r o u n d le s s ; t h a t th e
d is s o lu tio n o f th is i n s t it u ti o n m a y n o t b e th e o r g a n iz in g o f r u in to a c o n
s id e r a b le p o r tio n o f th e c o u n t r y .
M r . S e y b e r t . I t m a y b e s a id t h a t t h is s u b j e c t h a s b e e n e x h a u s t e d , b y th e
d is c u s s io n s o f t h e a b le s t p o litic ia n s o f o u r c o u n tr y .
I w ill p r e m is e , th e r e
m a r k s w h ic h I s h a ll o ffe r, a r e i n t e n d e d s o le ly to j u s t i f y t h e v o te w h ic h i t is
m y i n t e n t i o n t o g iv e o n th is m o m e n to u s o c c a s io n .

ON T H E BILL TO REN EW T H E C H A R TE R OF 1791.

J61

The question pending the United States Bank lias excited a peculiar inte
rest throughout this nation, more especially in our seaports. T he dissolution
of this institution, which, form its limitation, will expire on the fourth of March
next, has been portrayed in colors of the darkest shades, and the distresses
which many maintain will be consequent to that event, call seriously for a
fair and deliberate investigation. I hope., sir, I shall be pardoned for impos
ing on the patience of the House, when it is recollected that the community
which I represent, have employed four-tenths of the capital stock of the U n it
ed States Bank. I f evil consequences are to attend the dissolution of this
establishment, or if beneficial results proceed from its continuance, in either
case I must feel myself essentially interested. I t is, therefore, my wish, to be
distinctly understood, upon the important principles which have connexion
with the great question now before us.
A t the last session of Congress, I presented the memorial of the president,
directors, and stockholders of the Bank of the United States; at that time I
entertained 110 positive opinion 011 the subject; the discussions which took
place in the committee to whom the memorial was referred, necessarily, as a
duty on my part, excited that attention which the importance of the question
imperiously demanded. U nder circumstances of doubt, I voted in favor of
reporting a resolution in support of the bank, for the purpose of giving to the
establishment every chance which reason could urge; at the same tune re
serving to myself the right to pronounce a final decision, according as policy
and expediency, but more especially as principle should dictate. I willadmit,
sir, that this is not the time or place to institute the general inquiry, whether
banks are or are not, beneficial to a nation? Because, whether the charter of
the United States Bank be renewed or not, the several States, who have the
unquestioned authority to incorporate bank establishments, have already cre
ated many, which it is not in our power to control. I do not hesitate to d e
clare, though many persons in the United States are decidedly opposed to a
banking system, under every possible circumstance, I am not of this class.
Experience has proved, in a manner very satisfactory to my mind, the advan
tages which are derived from banks, when they are impartially directed, and
when the accommodation afforded by them is prudently employed; the great
difficulty seems to be to confine the system within its proper limits. I under
stand the proposition as applicable to the agricultural, manufacturing, and
commercial interests of the Lnited States.
For my proofs of this proposition, I will not rely upon the famous Bank of
St. George, a t Genoa, whose authority, by a gentleman from N ew York, (M r.
F i s k ) lias been considered of much weight. I will recall to the mind of my
friend, the rem ark of an intelligent traveller, who, when he visited this bank
of antiquity, exclaimed, " H ere lies concealed the enigma, whether the bank
possesses millions of millions, or whether it is indebted millions of millions;”
lie concludes, upon this important secret rests the safety of the State. Unhappy
State, say I, whose safety depends upon a secret concealed within the vaults
of a bank. Perhaps, to a development of this secret, may we attribute the
present servile condition of the people of the once far famed and powerful
Republic of Genoa.
I am one of those who do not entertain fears in consequence of foreigners
becoming the stockholders of our banks; provided, on all occasions, you deny
them the privilege of voting either directly or by proxy. I would even go so
far as to prohibit their being original subscribers to any stock which may be
created in our territory. T he States do not object to a foreigner holding the
stock of their banks. Any political consequences which can arise from such
an interest, will exist, without the General Government having power over
them. F or the present, I am opposed to the exclusion of foreign capital from
our country, because it is not established that we possess a surplus of our
own, and that the introduction of more from abroad depresses that which is
immediately the property of our citizens; the prices which are at present paid
as the interest for a borrowed capital, convince me that it would oe impolitic,
at this time, to adopt the principle of exclusion.

1 Cy f

BANK OF T H E U N ITE D ST A T E S.

T h o u g h I h a v e a d m i t t e d , t h a t, u n t lc r c e r ta in s p e c itic p r o v is io n s o f th e la w .
f o r e ig n e r s s h o u ld b e p e r m itte d to h o ld th e s to c k o f th e b a n k s o f th e U n ite d
S t a t e s , i t is n o t th e n c e to b e i n f e r r e d , b e c a u s e th e y h a v e b e c o m e t h e s t o c k
h o ld e r s , t h e y a r e to b e c o n f irm e d , f ro m tim e to tim e , in th e e x e r c is e o f a n e x
c l u s iv e p r iv ile g e in o u r c o u n tr y .
S i r , I a m d e c i d e d ly o p p o se d to a p r o m in e n t, a n d w h a t to m e a p p e a r s to b e a
v e r y d a n g e r o u s f e a tu r e in th e b ill n o w u n d e r c o n s id e r a tio n . I a l l u d e to th e 8 th
s e c t i o n , w h ic h a d m i t s o f a n i n c r e a s e o f th e p r e s e n t c a p ita l s to c k o f th e b a n k .
I f y o u a d o p t th is p ro v is io n , y o u w ill th e r e b y c r e a te a n H e r c u l e a n p o w e r ,
w h ic h w ill n a v e a t its m e r c y a ll th e m in o r in s ti t u t io n s o f th e S t a t e s ; t h u s c o n
s t i t u t e d , i t c a n o p p r e s s a n d d e s t r o y th e m , a s w h im o r i n t e r e s t m a y d i c ta te .
T h e s t e p s w h ic h h a v e b e e n ta k e n p r e p a r a t o r y to a d is s o lu tio n o f t h e p r e s e n t"
b a n k , i t is s a id , o c c a s io n m u c h e m b a r r a s s m e n t, a n d t h r e a t e n w ith r u i n m a n y
o f o u r c i t i z e n s . I f t h e p r e s e n t c a p ita l o f t e n m illio n s c a n t h u s a ffe c t s o c ie ty ,
w h o w ill p r e t e n d to a c c u m u l a te p r e s e n t e v ils , o r r is k e n ta ilin g m is e r y o n p o s
t e r i t y , s o le ly fo r th e p u r p o s e o f a t e m p o r a r y g a in to t h e G o v e r n m e n t? I n th is
q u e s tio n P e n n s y l v a n ia is d e e p ly c o n c e r n e d ; s h e h a s s e v e ra l m illio n s o f d o l la r s
i n v e s te d in h e r b a n k s ; th is to h e r is a v a lu a b le s o u r c e o f r e v e n u e ; u p o n th is
m a y s h e p r e d i c a t e m u c h o f h e r f u t u r e p r o s p e r ity ; h e n c e w ill sh e d e r iv e th e
f u n d s r e q u is ite f o r f u t u r e in t e r n a l im p r o v e m e n ts ; b u t i f y o u fill u p th e b la u k s
in th i s s e c tio n w ith a c o n s id e r a b le s u m , a ll th e s e p r o s p e c ts w ill b e b la s te d
f o r e v e r ; y o u w ill th e r e b y d e s tr o y t h e t r e e , fro m w h o s e r a m if ic a tio n s w e r e to
e m a n a t e t h e b le s s in g s o f p e a c e a n d th e s in e w s o f w a r . T h o s e o f h e r R e p r e
s e n t a t iv e s w h o m a y d e e m it p o litic a n d c o n s titu tio n a l to v o te fo r a c o n t i n u
a n c e o f t h e c h a r t e r o f th e U n it e d S ta t e s B a n k , o u g h t s u r e ly to o p p o s e a n y
i n c r e a s e o f th e p r e s e n t c a p ita l. W e h a v e b e e n t o l d , t h a t t h a t w h ic h n o w e x
i s t s , h a s b e e n f o u n d s u f f ic ie n t f o r a ll p u r p o s e s , a t a tim e w h e n o u r c o m m e r c e
w a s m u c h m o r e e x te n s i v e t h a n w e h a v e r e a s o n to s u p p o s e w ill so o n a g a in b e
th e c a s e .
I f , a s so m e s a y , t h e b a n k , b y its c a p it a l, is to f a c ilita te t h e fisc a l o p e r a tio n s
o f th e G o v e r n m e n t , I a m d e c id e d th i s s h o u ld n e v e r b e g r e a t e r t h a n w h a t w ill
b e b a r e ly s u f f ic ie n t f o r th is p u r p o s e . I f y o u go f u r t h e r , y o u p la c e in th e h a n d s
o f th e G o v e r n m e n t a n e n g in e w h ic h m a y d e s t r o y th e fre e d o m o f th i s n a tio n .
W e a r e f u r t h e r t o l d , t h a t , in c a s e o f w a r , th e G o v e r n m e n t m a y d e r i v e a d v a n
t a g e , i n t h e fo rm o f lo a n s , f ro m th e b a n k . A d m i t t i n g th is to be t h e f a c t , i t is
v e r y e v i d e n t , u n d e r th e u n c e r t a in t ie s o f a w a r , t h e d e m a n d s o f o u r m e r c h a n ts
u p o n t h e b a n k s w ill d im in is h , s o t h a t th e b a n k c a p ita l a l r e a d y c r e a t e d th r o u g h
o u t t h e U n io n , m a y b e v e r y r e a d i l y h a d f o r t h e e x ig e n c ie s o f th e S ta t e . IT a
g r e a t e r s u m s h a ll b e fo u n d to b e n e c e s s a r y , th e p a t r io tic z e a l o f y o u r c i t i z e n s
w ill p ro v e i t s e l f a ll- s u f f ic ie n t to s u p p ly y o u r w a n ts i n a c a u s e w h ic h w ill be
d e e m e d j u s t a n d h o n o r a b le b y th e n a tio n .
I a m a ls o o p p o s e d to th e U n i t e d S t a t e s h a v in g th e r i g h t, in a n y m a n n e r , to
a p p o in t a n y o f th e d i r e c t o r s o f th e b a n k , n o t so m u c h o n a c c o u n t o f a n y in flu
e n c e w h ic h th e G o v e r n m e n t m ig h t d e r iv e f ro m s u c h a p p o in tm e n t, a s to p r e
v e n t r u in o u s c o n s e q u e n c e s to a l l w h o m a y b e c o n c e r n e d . W h o w ill s u c h
d i r e c t o r s g e n e r a lly b e ? C e r t a i n l y p e r s o n s w h o n e e d t h e a id o f th e b a n k s : fo r
n o n e o t h e r s w o u ld m a k e a p p lic a tio n fo r th e a p p o in tm e n ts . W h e n th e y a r e a p
p o i n t e d , th e y w o u ld b e s u b s e r v ie n t to th e v ie w s o f s u c h o f th e d i r e c t o r s a s
a r e c h o s e n b y t h e s to c k h o ld e r s ; in t h e ir p la c e s th e y w ill lo s e s ig h t o f th e p u b
lic w e l f a r e ; th e y w ill b e i n t e r e s t e d b y th e a c c o m m o d a tio n s w h ic h th e y m a y
fin d n e c e s s a r y to r t h e i r p u r p o s e s ; to o b ta in th e s e , th e y w ill y ie l d to th e i r a s
s o c ia te s . I n s t e a d o f b e in g th e g u a r d i a n s o f th e p u b lic t r e a s u r e in c a s e o f d a n
g e r , th e y w ill r e m a in s i le n t , u n til a s p o n ta n e o u s e x p lo s io n o f th e b u b b le so lv e s
fo r th e w o r ld t h e i m p o r t a n t s e c r e t o l t h e in s o lv e n c y o f th e i n s ti t u t io n . S ir ,
n o tw ith s ta n d in g m a n y a r g u m e n t s m a y b e a d d u c e d in s u p p o r t o f a b a n k in g
s y s te m , n o d e g r e e o f im p o r ta n c e , w h a t e v e r , w h e th e r d e r iv e d fro m th e f a c i li
t ie s o ffe re d to th e G o v e r n m e n t b y b a n k e s ta b lis h m e n t s , o r f ro m t h e c o n s i d e r
a b le s u m s w h ic h m a y b e th e r e b y h a d f o r th e t r e a s u r y , in c o n s e q u e n c e o f s a le s
w h ic h m a y b e m a d e o f th e s to c k b e lo n g in g t o th e n a t io n , o r o f tn e b o n u s to be

ON T H E B IL I, TO RENEW T H E C H A R TE R OF 1791.
g iv e n , sh a ll in d u c e m e to v o te in fa v o r o f a m e a s u re w h ic h is n o t g r o u n d e d
u p o n s t r i c t c o n s titu tio n a l p r in c ip le s .
T h e h is to r y o f th e b a n k s in o u r c o u n tr y in f o rm s u s, t h a t th e o n e u s u a lly
te r m e d th e B a n k o f N o r t h A m e r ic a , w a s t h e f irs t e s ta b lis h m e n t o f th e k in d
w h ic h r e c e iv e d th e s a n c tio n o f th e G o v e r n m e n t. T h i s in s t it u t i o n w a s i n c o r
p o r a te d b y a n a c t of C o n g r e s s , in th e m o n th of M a y , 1781, u n d e r th e a u t h o
r i t y o f th e “ A r t i c l e s of Confederation.” T h e p r e s e n t B a n k of th e U n i te d
S t a t e s w a s in c o r p o ra te d b y a n a c t of C o n g r e s s , o n th e 25th F e b r u a r y , 1791,
d u r i n g th e o p e r a tio n of th e p r e s e n t c o n s titu tio n of the U n i te d S t a te s .
W i t h o u t a n a t t e m p t to e x a m in e e v e r y h y p o th e s is w h ic h h a s b e e n o r w h ic h
m i g h t b e p r o p o s e d , r e s p e c tin g th e c o n s titu tio n a lity o f th e p r i n c i p le , I w ill
c o n t e n t m y s e lf w ith a s ta te m e n t o f th e c a s e , s u c h a s i t a p p e a r s to m y m in d .
T h e firs t p u b lic a c t w h ic h I p e r f o r m e d , a s a m e m b e r o f th e C o n g r e s s o f th e
U n i t e d S t a t e s w a s , t o swear , solemnly, t h a t I w o u ld s u p p o r t t h e c o n s titu tio n
o f t h e U n i t e d S t a t e s . I t th e r e f o r e is m y d u t y to e x a m in e a n d c o n s id e r its
p r e c e p t s , a c c o r d in g to th e b e s t o f m y a b ility T h e “ A r t i c l e s o f C o n f e d e r a tio n ” a n d th e p r e s e n t c o n s titu tio n o f th e U n i t
e d S t a t e s , d o n o t d if fe r , a s r e g a r d s a n y p o w e r d e le g a te d b y th e S ta t e s to C o n
g r e s s , to u c h in g c h a r t e r s o f in c o r p o ra tio n . I c a n n e v e r p e r s u a d e m y s e lf t h a t
th e c o n s titu tio n w a s in te n d e d o t h e r th a n to h a v e a d e f in ite m e a n in g ; o r th a t
i t w a s e v e r c o n te m p la te d to s p e a k a n e q u iv o c a l la n g u a g e ; a m b ig u ity a r is e s
s o le ly fro m th e m is c o n c e p tio n s o f i t s i n t e r p r e t e r s . I t is v e r y p la in a n d o f e a s y
c o m p r e h e n s io n , e s p e c ia lly a s i t r e la t e s to t h e p r e s e n t q u e s tio n , s in c e i t is
t o t a l l y s i l e n t o n th e r ig h t to c r e a t e c o r p o r a tio n s ; its w is d o m is f u r t h e r i l l u s
t r a t e d b y th e sp e c ia l p r o v is io n lo r th e o n ly e x c lu s iv e p r iv ile g e w h ic h is c o n
s i s t e n t w ith a fre e a n d e q u a l G o v e r n m e n t, a n d t h a t is in fa v o r o f g e n iu s . T h e
p o w e r s d e le g a te d b y th e S t a te s a r e s p e c ia l a n d d e f in e d , a n d i t is e x p r e s s ly d e
c l a r e d b y th e c o n s t it u t i o n , th a t “ th e p o w e r s n o t d e le g a te d to th e U . S t a te s b y
t h e c o n s titu tio n , n o r p r o h ib ite d b y i t to t h e S t a t e s , a r e r e s e r v e d to th e S t a te s
r e s p e c t i v e l y ,o r to th e p e o p le .” T h i s la n g u a g e n e e d s n o i n t e r p r e t a t io n . I c a n n o t
f o r a m o m e n t p e r m it m y s e lf to su p p o s e , t h a t th e p a tr io ts w h o w e r e te s te d d u r
in g th e lo n g c o n tin u e d u n c e r t a i n t y o f th e m o s t i m p o r t a n t e v e n ts o f o u r r e v o
l u t i o n a r y p e r io d , a n d to w h o m w a s u lti m a te l y a s s ig n e d th e r ig h t a n d p o w e r
t o c o n s t r u c t th e i n s t r u m e n t w h ic h is to g u id e u s in th e p o litic a l la b y r in th ,
t h a t th e y i n t e n d e d th is , t h e i r great work, s h o u ld a lo n e b e e x p lic a b le b y thart
r e f in e d r e a s o n in g , to w h ic h c o m m o n s e n s e is a s tr a n g e r , I n e v e r c a n a d m i t ;
s u r e l y , t h a t w h ic h th e y f r a m e d f o r th e g o o d a n d s e c u r i ty o f e v e r y in d iv id u a l
in t h e n a tio n , m u s t b e e x p r e s s e d in a m a n n e r to b e u n d e r s to o d b y o r d in a r y
m e n , a n d th o s e w h o m i t w a s i n t e n d e d to d i r e c t . S i r , i f s im p lic ity w a s n o t
o r ig in a lly c o n te m p la te d b y t h e f r a m e r s o f th e c o n s titu ti o n , w h y th e im p o s i
tio n o n th e p e o p le in p u b lis h in g i t to th e w o rld ? W a s i t n o t a p ro d ig a l w a s te
o f la b o r a n d m a t e r i a l s , to f u rn is h e v e r y c i t iz e n of o u r c o u n t r y w ith a c o p y of
t h a t w h ic h c a n o n ly b e u n d e r s to o d b y p r o fe s s io n a l m e n , or s u c h a s are emi
n e n t l y s k i l l e d in s c h o la s tic r e s e a rc h ? It h a d b e t t e r r e m a in a s e c r e t concealed
a m o n g s t t h e m u s t y r o lls in th e a r c h iv e s o f S t a t e , th a n b e a p u z z l e f o r m a n
k i n d . A s lo n g a s th is i n s t r u m e n t is p r e s e r v e d p u r e a n d u n ta r n i s h e d , it will
r e c e i v e a b e c o m in g r e s p e c t fro m y o u r f e llo w - c itiz c n s — it w ill b e r e g a r d e d as
“ th e s tu p e n d o u s f a b ric o f h u m a n in v e n ti o n .” R e m e m b e r , th e p r e s e n t a r g u
m e n t , in s e v e r a l i m p o r t a n t p o in ts o f v ie w , a ffe c ts p o s te r ity in c o m m o n w ith
o u r s e lv e s . Y o u h a d b e t t e r c o m m it the u n in te llig ib le ja r g o n to the fla m e s ,
t h a n , b y th e a g e n c y o f c o n s tr u c ti o n , n e u t r a l is e w is d o m b y fo lly . S i r , i f w e
h a v e a c o n s t it u t i o n w h ic h th e p e o p le c a n n o t u n d e r s t a n d , I th e n s a y , c u t th e
o r ig in a l i n to s lip s , a n d p r o v id e th e m e a n s f o r a b e t t e r ; o r i f t h a t is n o t to be
d o n e , a n d w e a r e to b e r u l e d b y th e iro n h a n d o f p o w e r , in t h a t c a s e , a s o n e
o f th e A m e r i c a n p e o p le , I w ill p r a y y o u to b e g r a c io u s ly p le a s e d to g r a n t a
p la in bill o f righ ts fo r o u r b e t t e r g o v e r n m e n t.
I f w e lo o k b a c k a n d a t t e n t i v e l y v ie w th e o c c u r r e n c e s w h ic h to o k p la c e w h e n
t h e la w in c o r p o r a tin g th e p r e s e n t B a n k o f th e U n i t e d S ta t e s w a s e n a c t e d , w e
s h a ll fin d o u r r e a s o n in g s u p p o r te d a n d c o n f ir m e d b y m a n y i m p o r t a n t c i r c u m
s t a n c e s ; w e s h a ll th e n p e r c e iv e t h a t th e a c t o f in c o r p o r a tio n was o p p o se d on

1Q 4

BANK OF T H E U N ITED STA TES.

constitutional ground, by men who were and continue to be esteemed for their
talents, political skill, judicial knowledge, probity, and patriotism, and it has
been adm itted that the arguments formerly urged are unanswerable. T hat
the power to create corporations was never intended to be ceded on the part
of the States, is proved beyond all manner of contradiction; for we are told
by the highest authority, by one who was a member of the General Convention,
th at it had been proposed to cede to Congress the power to create corpora
tions, and that the proposition was rejected, after a deliberate discussion. In
my opinion, this decision is in proof of the sagacity and wisdom of those who
made it; it was highly justifiable to retain this power to be exercised by the
States; because corporations are generally founded on circumstances which
are entirely local; as such they can be better understood by the Legislatures
of the respective States, than by that of the General Government.
T he experience of every session proves, that the decisions of Congress vary
with the men why, at different times, compose that body; therefore, the act of
February, 1791, can have no force in settling the principle contended for.
I have heard it urged that the States have recognised the constitutionality of
the’United States Bank, by their laws. I know of 110 law in any of the States
which declares this charter constitutional; were it even proved that several of
the States had published this declaration, with me it would signify nothing,
unless the sanction of two thirds of the States was thus had. On a former
occasion. several of the States were induced, from peculiar circumstances, to
relinquish, for a time, their right in favor of a particular case— I allude to the
first establishment of the Bank of North America. I f this had been intended to
decide this very important question, without any reservation ot their power
in other cases, they would have expressed it in the most positive and unequi
vocal manner.
Sir, it may be asked, how did the Congress, whilst acting under the ‘‘A r
ticles of Confederation,” incorporate the Bank of N orth America, though
their powers were no more extensive than those of the present Congress? W e
shall not lose by this investigation; they declared, that “ the exigencies of the
United States rendered it indispensably necessary that such an act be imme
diately passed;” and, at that period the Board of W ar confessed they had not
money sufficient to pay the expense of forwarding an express to the Com
m ander-in-Chief of the army! N otw sthstanding such urgent necessities on the
part of the General Government, they were too conscious of the rights of the
States, to attem pt an usurpation of authority, or to pretend to force this act
without their sanction; accordingly, we find the resolution by which this bank
was established, followed by another, which recommended to the Legislature
of each of the States the necessity to pass such laws as they judged requisite
for giving the ordinance by which the subscribers of the Bank of North Ame
rica W'ere incorporated, its full operation; every provision in the charter of
this bank, to have full effect, was recommended to the Legislatures of the se
veral States, for their approbation.—Sec Journals o f Congress fo r 1781, vol.
"1th, pp. 257 and 258.
It is a well known and an important fact, that the subscribers to the Bank
of North America did not rest satisfied of the authority of Congress to incor
porate them: subsequently to the original act of incorporation, they accepted
from the Legislature of Pennsylvania a charter, by which their privileges were
very much abridged.
Some maintain, the States having made it penal to pass counterfeits of the
notes of the United States Bank, is in proof of their recognizing tne constitu
tionality of the institution. No one will pretend, that these laws were in
tended other than to guard the people against fraud; these statutes were en
acted without any connexion with, or reference to, the principle upon which
the original act was founded. I t is but too well known, notwithstanding these
salutary provisions, that counterfeit bank notes, of every denomination, are
in daily circulation. I will ask, what would be the case if such laws had not
b e e n passed by the Stater? Sir, if it requires all our care to prevent an inun
dation fro m such b a n k paper, as is acknowledged to be genuine, for Heaven’s

ON T H E BILL TO REIJEW T H E C H A R TE R OF 1791.

IQ 5

s a k e , d o n o t r is k th e s e c u r i t y o f th e p e o p le , b y a n i n d i r e c t s a n c ti o n o f su c h
a9 is k n o w n to b e s p u r io u s .

I have often heard the constitutionality of a national bank defended, upon
the ground of its being absolutely necessary to the fiscal operations of the G e
neral Government. A friend from N ew York, [M r. F isk,] said he “ would
demonstrate, that this institution wras indispensably necessary to the fiscal
concerns of the Government.” I confess if he could do this, he would go far
to remove an important difficulty. I f there be higher authority, whereon to
rely for his proofs, tliau the officer who is at the head of your Treasury D e
partm ent, ha might have succeeded; I pledge myself upon the statements of
this officer to dem onstrate, that this bank is not even necessary, for the fiscal
operations of the Government. Upon this plea, it is attempted to be justified
by the 17th article of the 8 th section of the constitution of the U nited States,
which gives to Congress the power “ to make all laws which shall b e neces
sary and proper for carrying into execution” the several specific powers dele% gated to Congress by the States. I never did doubt for a moment, the con
venience of a bank, to the moneyed transactions of the Government. I was
often induced to believe, that a bank, sanctioned by the General Government,
was necessary for these, purposes, i am noyv confirmed iri a very different
sentiment by the treasury report, made the third of January, 1811. In the 11th
page of that report, we are told, it is one of the duties which are assigned to a
clerk in the T reasurer’s office, to keep a “ bank cash book, wherein an ac
count is opened with every bank in which the United States have money d e
posited. In 1798, the number of these were Jive; they are now augmented to
twenty.'” T he establishment, constituting the United States Bank, and its
branches, consists, in all, of nine banks; consequently, by the statement ju st
made, it is proved the T reasury Department has been doing business with
eleven banks, other than those sanctioned by Congress. T he same, report
states, that this business is transacted in all the banks upon precisely the same
plan. W e have never been told of any losses having been sustained in any
of them. W h y , then, pretend, that it is impossible to transact this business
through the agency of the State banks, when we have the best authority for
asserting, that this has been done already in a majority of cases, with the
greatest success, facility, and certainty? That 110 advantages, which are pe
culiar, can be derived to the nation, from the United States Bank, as respects
the collection of the revenue, the safe keeingof its specie, or the transmission
of its moneys from place to place, will be made evident by the same excellent
authority. I t is there stated, that considerable sums, to the credit of the
Government, are deposited in the State banks, even in cities where the mother
b a n k and its branches are situated. O n the 7th of January, 1811, very consi
derable sums belonging to the Government, remained in the M anhattan B a n k
of N e w Y o r k ; the Bank of P e n n s y lv a n ia , in P h il a d e lp h ia ; and the B a n k of
C o lu m b ia , in G e o r g e to w n , D i s t r i c t of C o lu m b ia . As to the transmission of
money, we are told in the same report, that the deposites in the M anhattan
Bank arise from collections o f the revenue, in the States of Rhode Island and
Connecticut; and th a t those in the Bank of P e n n s y lv a n ia , occur from th e pay
ments which are made for public lands, into the banks of O h io and K e n t u c k y ;
from these, i t is transm itted to th e branch bank of P e n n s y l v a n ia , a t P it t s b u r g ,
a n d thence i t p a s s e s to th e B a n k of P e n n s y lv a n ia , in the city of P h ila d e lp h ia ,
where it remains subject to the drafts of the T r e a s u r e r . From this we per
ceive, 'h at collections and transmissions of money, for the b e n e f it of the G o
vernm ent. are made without the aid of the United States Bank, or its branches,
and that through a considerable extent of country, from one extremity of the
S t a t e s to the other. A f t e r this, will any one pretend to urge the absolute
necessity of the United States liank?
I t is s a id , a ll a g r e e t h a t banks are necessary for th e c o lle c tio n o f t a s e s ; b u t
t h a t o f t h e U n i t e d S t a t e s is n o t a b s o lu te ly n e c e s s a r y fo r th is p u r p o s e , s in c e
t h e s e o p e r a tio n s c a n b e , a n d h a v e b e e n p e r fo r m e d f o r th e G e n e r a l G o v e r n m e n t,
b y t h e S t a t e b a n k s . S i r , I d e n y th e p o s itio n , a n d w ill m a in ta in t h a t fo r th is
p u r p o s e , n o b a n k w h a t e v e r is r e q u ir e d . . I w ill a s k g e n tle m e n w h o m a in ta in th is

J6 6

BANK OF T H E U N ITED ST A T E S.

doctrine, to name to me the banks which are employed to collect the taxes,
which are levied by the States? I know of none, and I believe it impossible
to point out a single instance, where the States make use of their agency.
Sir, I will for a moment permit myself to suppose, notwithstanding the
well founded objections to the establishment of a bank under the authority of
ihe General Government, Congress shall nevertheless deem it expedient to
renew the charter of the present United States Bank, or establish, what some
may fancifully reconcile to themselves, by the title of a national bank, it then
becomes a question, how the States will receive the act? W hether they can
not render its provisions abortive? T hat many of the States are hostile to a
bank, authorised by the General Government, is evident, from numerous facts;
for proofs we may refer to the acts of the Georgia Legislature, by which, the
bank capita! of the branch at Savannah, was made liable to taxation: North
Carolina has taxed the capital of her banks: the Legislature of New Jersey,
passed but a single act at their last session; that was to levy a tax on bank
capital. N o one can pretend, that the disposition of Virginia or M aryland,
is very favorable to a pretended national bank. I can state, upon the best a u
thority, that it was a subject of consideration with the Legislature of P en n
sylvania, during the last winter, to tax the capital of the mother bank in P hi
ladelphia. T hey did not proceed, because they relied on the refusal of Con
gress to renew the present charter of the U nited States Bank. The taxation
of the capital stock of this bank, is to be looked for on the part of the States
in which the mother bank and its branches may be established; because, the
States generally require a bonus, or in other words, they raise a tax from the
banks, which they themselves have sanctioned; in many instances, the amount
lias been very considerable. W e cannot suppose the States will hesitate to
tax the United States Bank; because if they do, they will act unjustly towards
such of their immediate citizens, as have invested their capitals in the stock
of State banks; a partial taxation is contrary to the spirit and letter of our
constitutions. T he States haying the right to tax the institutions, which you
may sanction within their jurisdiction, they have it in their power to render
inoperative the statutes which you may enact on this subject; they may tax
to an amount, which shall equal the dividends arising upon the capital. Who
can pretend, that banks will do business without the prospect of a handsome
profit? T hus disposed, the States may place the United States in a very un
pleasant situation. L et us'avoid every possible source of discord. T he General
Government m aybe reduced to the dilemma, either to relinquish a pretended
right, or to pay tribute to the States, to permit them to exercise an authority
which is unquestionably an attribute of sovereign power. T his would consti
tute an epoch in the political annals of our country. I hope such absurdities
will not he committed; we may avoid them, by a strict compliance with the
principles of the constitution of the United States.
J a n u a r y 18, 1811.

M r. B v r w e l l *s m o tio n to s t r i k e o u t th e f ir s t s e c tio n , s till d e p e n d in g :
Mr. P . B. P o r t e r spoke in favor of it, as follows:
Mr. C h a ir m a n : A s this b a n k has excited so extraordinary an interest in
every part o f the United States, and particularly in the State which 1 have
the honor to represent; as I am apprehensive, fro m what took place yester
day, that I shall be f o u n d , on this question, in opposition to a majority of my
colleagues; and, (what will always be an imperative motive with me) as I
think this bill aims a deadly blow at some of the best principles of the consti
tution, I feel it my duty to state to the House the grounds on which I shall
be constrained to vote, for striking out the section now under consideration.
1 acknowledge that I had not, until lately, paid any particular attention to
the question of the constitutionality ol this institution. I stand, therefore, in
this respect, on safer ground than the respectable member from N orth Caro
lina, (M r. M a c o n ) for 1 have no reason to suspect myself of any long-rooted
prejudices on the question. T he Bank of the United States was established

ON T H E BILL TO RENEW T H E C H A R TE R OF 1791.

JQ 7

a t ;i tim e w h e n I w a s n o t in th e h a b it o f tr o u b lin g m y s e lf w ith su c h q u e s tio n s .
I h ail b e e n a c c u s to m e d to t h i n k o f i t a s a n i n s ti t u t io n , th e c o n s titu t io n a l it y o f
w h ic h w a s c o n c e d e d b y c o m m o n c o n s e n t. B u t , s ir , w h e n th e q u e s tio n w a s
a g a in s t i r r e d , I f e lt i t m y d u t y to g iv e i t a th o r o u g h in v e s tig a tio n b e fo re 1
s h o u ld s a n c tio n i t b y m y v o te . I h a v e g iv e n i t , i f n o t a th o r o u g h , a t l e a s t a
c a n d id a n d im p a r tia l e x a m in a tio n ; a n d th e r e s u l t h a s b e e n , a f u ll c o n v ic tio n
t h a t w e h a v e n o r ig h t to in c o r p o ra te a b a n k u p o n th e p r in c ip le s o f th e b ill o n
t h e ta b le ; o r , r a t h e r , u p o n th e p r in c ip le s o f th e o r ig in a l c h a r t e r , w h ic h th is b ill
p ro p o se s to r e n e w . T n e g r o u n d o f m y o b je c tio n is , t h a t i t a s s u m e s t h e e x e r
c is e o f le g is la tiv e p o w e r s w h ic h b e lo n g , e x c l u s i v e l y , to t h e S t a t e G o v e r n
m e n ts .
I s h a ll n o t to u c h th e q u e s tio n o f th e e x p e d ie n c y o f th is b a n k , m u c h le s s th e
e x p e d ie n c y o f b a n k in g g e n e r a lly . I f I w e r e c o m p e te n t , w h ic h I c o n fe s s I a m
n o t , to t h e t a s k , I s h o u ld t h in k i t a v e r y u n p r o f ita b le o n e , to fo llo w th e g e n
tl e m a n th r o u g h a ll th e m a z e s o f th e b a n k in g s y s te m ; a s y s t e m , s i r , a b o u t th e
v a r io u s a n d i m p o r t a n t o p e r a tio n s , a n d e ffe c ts o f w h ic h , on c iv il s o c ie ty , a s id e
fro m a fe w o b v io u s t r u t h s w h ic h it f u r n is h e s , I h a v e fo u n d t h a t th o s e g e n t l e
m e n w h o h a v e p ro fe s s e d to u n d e r s t a n d th e m b e s t, h a v e d if fe r e d m o s t. A s [
ro p o se to c o n fin e m y s e lf to th e c o n s titu tio n a l q u e s tio n s o le ly , I h o p e I s h a ll
e a llo w e d to ta k e a l i t t le b r o a d e r r a n g e o n th is p o i n t , th a n h a s b e e n t a k e n b y
th e g e n tle m e n w h o h a v e p r e c e d e d m e.
I a m a w a r e h o w u n g r a c io u s c o n s titu tio n a l o b je c tio n s to t h e p o w e r s o f th is
H o u s e , a r e w ith th o s e , ( a n d th e r e a r e m a n y s u c h ) w h o b e lie v e t h a t th e p o w e rs
o f t h e F e d e r a l G o v e r n m e n t a r e , a t b e s t , to o c o n t r a c t e d , a n d w h o w o u ld be g la d
to se e a ll th e S t a t e r ig h ts m e rg e d a n d s u n k in to a c o n s o lid a te d g o v e r n m e n t.
W h a t e v e r m a y b e m y s p e c u la tiv e o p in io n s o n th is s u b j e c t, I c a n n e v e r b e i n
f lu e n c e d , b y m o tiv e s o f e x p e d ie n c y , to s w e r v e f ro m m y a lle g ia n c e to th e c o n
s t i t u t i o n . T h i s s e n t im e n t is in d e lib ly fix e d o n in y m in d , a n d I t r u s t i t is a
c o m m o n o n e to th e m e m b e r s o f th is c o m m itte e , t h a t, in a d h e r in g s t r i c t l y to
t h e o b lig a tio n w e h a v e t a k e n , to s u p p o r t th e c o n s titu tio n o f th e U n ite d S t a te s ,
w e n o t o n ly p e r fo r m a s a c r e d d u t y to o u r s e lv e s , b u t w e r e n d e r a b e t t e r s e r
v ic e to th e re a l a n d p e r m a n e n t in te r e s t s o f o u r c o u n t r y , t h a n w e c o u ld p o s s i
b ly r e n d e r b y a d e p a r t u r e fro m t h a t o b lig a tio n , e v e n th o u g h t h a t d e p a r t u r e
w e r e to a v e r t so s e rio u s a c a la m ity a s a g e n e r a l b a n k r u p t c y ; a c a l a m it y , w h ic h ,
in o r d e r to a l a r m th e t i m i d , h a s b e e n h e ld o u t a s th e in e v ita b le c o n s e q u e n c e
o f a r e fu s a l to r e n e w th is c h a r t e r .
I s h o u ld b e s u r p r i s e d a t th e g e n e r a l a c q u ie s c e n c e w h ic h s e e m s to h a v e b e e n
v ie ld e d t o t h ? c o n s tit u t i o n a l i ty o f th is i n s t i t u t i o n , d i d I n o t b e lie v e t h a t o th e r s
h a d b e e n a s s u p e rf ic ia l in t h e i r e x a m in a tio n o f th e s u b je c t a s i h a d m y s e lf .
W h e n o b je c tio n s a r e m a d e to th e c o n s titu t io n a l it y o f a la w , th e p e o p le , in th e
c u r s o r y v ie w s w h ic h th e y a r e a c c u s to m e d to ta k e o f s u c h o b je c ts , a r e a p t to
a d o p t, a s th e t e s ts o f its c o n s t it u t io n a l it y , t h e p o w e r s o f th e S t a t e a n d F e d e
r a l G o v e r n m e n t s ,c o l l e c t i v e l y ; a n d i f th e y f in d n o th in g in th e la w o ffe n s iv e to
th e p r in c ip le s o f c iv il l i b e r ty , n o th in g u n c o n g e n ia l w ith th e s p ir i t o f a r e p u b
li c a n g o v e r n m e n t , t h e y r e s t s a tis f ie d , a n d d o n o t tr o u b le t h e m s e lv e s w ith n ic e
d i s t i n c t i o n s b e t w e e n t h e p o w e r s p e c u l i a r to th e o n e o r th e o t h e r o f th e s e g o
v e r n m e n t s . S u c h r e a s o n in g w o u ld , h o w e v e r , ill b e c o m e th e s a g a c ity o f th is
H ouse.
O n e of th e m o s t s e rio u s d a n g e r s w ith w h ic h o u r G o v e r n m e n t is t h r e a t e n e d ,
a n d it is a d a n g e r g ro w in g o u t o f th e v e r y n a t u r e a n d s t r u c t u r e o f th e G o v e r n
m e n t i t s e l f , c o n s is ts in i t s t e n d e n c y to p r o d u c e c o llis io n s b e tw e e n S t a t e a n d
F e d e r a l a u t h o r i ti e s . T h e F e d e r a l G o v e r n m e n t , a s w a s o b s e rv e d b y m y le a r n e d
c o lle a g u e , ( M r . M i t c h i l l ) is , im perium in impcrio, a g o v e r n m e n t w ith in a g o
v e r n m e n t ; a n d th e m is f o r tu n e is , t h a t t h e r e e x is ts n o f r i e n d l y t h i r d p o w e r to
d e c i d e th e c o n tr o v e r s ie s w h ic h m a y a r is e b e tw e e n th e s e tw o g r e a t , in d e p e n
d e n t , a n d , in m a n y r e s p e c ts , r i v a l a u th o r itie s . T h e p u b lic p e a c e m u s t b e
k e p t , i f k e p t a t a l l , b y t h e c o n c ilia to r y d is p o s itio n s o f th e p a r t ie s th e m s e lv e s .
A s t h e n , w e h a v e a c o m m o n i n t e r e s t in th e p r e s e r v a tio n o t b o th th e s e g o v e r n
m e n ts — a s w e a r e a s w e ll th e s u b je c ts o f th e imperio a s o f th e imperium , w e
o u g h t to a c t w ith g r e a t c ir c u m s p e c tio n a n d d e li c a c y , in th e a s s u m p tio n o f p o w

]0 Q

BANK OF T H E U N ITED ST A T E S.

e r s w h ic h d o n o t c l e a r ly b e lo n g to u s. I t is b e tt e r to fo re g o th e e x e r c is e o f
p o w e r s t o w h ic h w e a r e e n t i t l e d , i f th e e x e r c is e o f th e m is n o t v e r y im p o r t
a n t , r a t h e r th a n h a z a r d th e a s s u m p tio n o f d o u b tf u l o n e s , th e f a ta l c o n s e q u e n
c e s o f w h ic h m y h o n o ra b le f r ie n d fro m V ir g in ia , ( M r . B u r w e l l ) h a s so j u s t
ly d e p r e c a t e d .
T h e g r e a t li n e o f d e m a r c a tio n b e tw e e n th e p o w e rs o f th e S t a te a n d F e d e r a l
G o v e r n m e n t s , is w e ll u n d e r s to o d . T h e p o w e r s o f th e S t a t e G o v e r n m e n ts e x
t e n d to t h e r e g u la tio n o f a ll t h e ir in te r n a l c o n c e r n s , th o s e o f th e F e d e r a l G o
v e r n m e n t to th e m a n a g e m e n t o f a ll o u r e x te r n a l r e la tio n s — e x t e r n a l , a s r e g a r d s
t h e in d iv id u a l S t a t e s , a s w e ll a s th e S ta te s in th e i r c o lle c tiv e c a p a c ity . T h e
g e n e r a l id e a s u p o n w h ic h o u r r e p u b lic is f o u n d e d , a r e th e s e : t h a t s m a ll t e r r i
t o r ie s a r e b e t t e r a d a p te d to th e s u c c e s s fu l a d m in is tr a tio n o f j u s t i c e th a n la r g e
o n e s . I n a R e p u b lic , w h e r e th e p e o p le a r e th e s o v e re ig n s a n d s o u r c e o f p o w
e r , i t is i m p o r t a n t t h a t, in o r d e r to e n a b le th e m to e x e c u te th i s p o w e r d i s c r e e t
l y , th e y s h o u ld p o s s e s s c o r r e c t in h u m a tio n in r e la tio n to th e c h a r a c te r a n d
c o n d u c t o f t h e i r r u l e r s , a n d in r e l a t io n , a ls o , to th e c h a r a c t e r o f th e m e a s u re s
w h ic h th e y p u r s u e , o r o u g h t to p u r s u e ; a n d th is in f o rm a tio n is b e t t e r a t t a in e d
in a s m a ll th a n i n a la r g e t e r r i t o r y . T h e in d iv id u a l S t a t e s , h a v e , th e r e f o r e ,
r e s e r v e d to th e m s e lv e s th e e x c lu s iv e r ig h t o f r e g u la tin g a ll t h e i r i n t e r n a l , a n d ,
a s I m a y s a y , m u n ic ip a l c o n c e r n s , in r e la tio n b o th to p e r s o n a n d p r o p e r ty .
B u t a s in g le S t a t e m a y be in a d e q u a te to i t s o w n p r o te c tio n a g a in s t fo re ig n v io
l e n c e ; i t m a y a ls o b e u n a b le to e n f o rc e th e o b s e r v a n c e o f p r o p e r r u l e s a n d
r e g u la tio n s fo r c a r r y in g on its fo re ig n t r a d e a n d in te r c o u r s e . T h e c o n f e d e r a c y
o f th e S t a t e s is , th e r e f o r e , f o rm e d f o r th e p u r p o s e o f a t t a in i n g th e s e tw o o b
j e c t s , n a m e ly , t h e r e g u la tio n a n d p r o te c tio n o f th e t r a d e a n d i n te r c o u r s e o f th e
S t a t e s w i t h e a c h o t h e r , a n d fo re ig n n a tio n s , a n d t h e i r s e c u r i ty a g a in s t fo re ig n
in v a s io n .
I t h a s s o m e o th e r o b je c ts in v ie w o f m in o r c o n s e q u e n c e , a n d im m e
d i a t e l y c o n n e c te d w ith th e s e p r in c ip a l o n e s . T h e c o n s titu ti o n o f t h e U n i t e d
S t a t e s is th e b a s is o f th is c o n f e d e r a c y , a n d i t is o n ly n e c e s s a r y to r e a d th e
c o n s titu tio n to p e r c e iv e t h a t i t is n o th in g m o r e th a n a d e le g a tio n o f s p e c ific
p o w e r s f o r th e s e s p e c ific p u r p o s e s , a n d t h a t t h e g e n e r a l s o v e r e ig n ty o f th e
S t a t e s o v e r t h e i r r e s p e c tiv e t e r r i t o r i e s , is e x p r e s s ly r e t a i n e d b y th e S ta te s .
B u t , s ir , i n d e p e n d e n t o f th e s e s p e c ific p o w e r s a n d d u t i e s o f t h e F e d e r a l G o
v e r n m e n t , it h a s a n o t h e r a n d d i s t i n c t s e t o f p o w e r s a n d d u t i e s to p e r f o r m a n d
e x e c u t e . T h e n a tio n a l d o m a in , a s i t h a s b e e n c a l le d , e m b r a c in g th e la n d s a c
q u ir e d b y th e r e v o lu tio n a r y c o n f lic t, th e l a n d s s in c e p u r c h a s e d o f f o re ig n n a
tio n s , a n d th e l a n d s c e d e d b y t h e s e v e r a l S t a t e s to th e G e n e r a l G o v e r n m e n t,
b e lo n g t o t h e U n i t e d S l a t e s , in th e i r f e d e r a te c a p a c it y ; a n d n o in d iv id u a l
S t a t e , a s s u c h , h a s a n y c la im t o , o r j u r is d i c ti o n o v e r th e m . A s to th e s e l a n d s ,
th e p o w e r s o f th e U n it e d S ta t e s a r e s o v e re ig n , i n d e p e n d e n t , a n d c o m p le te ,
a n d th e C o n g r e s s o f th e U n ite d S t a t e s is th e o n ly le g itim a te a u t h o r i ty f o r th e
e x e r c is e o f th is s o v e r e ig n ty . T h e p o w e r s o f C o n g r e s s , t h e n , in r e la ti o n to
t h e s e t e r r i t o r i e s , i n c l u d e th e p o w e r s o f b o th t h e F e d e r a l a n d S t a t e G o v e r n
m e n ts , in r e l a tio n to th e S t a t e s . I h a v e a d v e r te d to th is b r a n c h o f th e p o w e r s
o f th e ,F e d e r a l G o v e r n m e n t , a s a m e a n s o f d is p e llin g t h e o b s c u r ity w h ic h h a s
b e e n th r o w n o v e r th e c o n s titu tio n a l q u e s tio n , to w h ic h I s h a ll so o n c o m e , b y
c o n f o u n d in g t h e p o w e r s o f C o n g r e s s o v e r th e S ta te s , w ith t h e ir p o w e r s o v e r
th e T e r r i t o r i e s . A r g u m e n t s , to w h ic h I s h a ll h a v e o c c a s io n to a d v e r t , in th e
c o u r s e o f m y o b s e r v a tio n s , h a v e b e e n u s e d to ju s t i f y t h e e x e r c is e o f p a r t i c u
l a r p o w e r s w ith in th e li m i ts o f th e S ta te s , f ro m o u r a c k n o w le d g e d r i g h t to ,
a n d p r a c t i c a l e x e r c is e of, s im ila r p o w e r s w ith in th e T e r r i t o r i e s .
I n d i s c u s s in g c o n s titu tio n a l q u e s tio n s , t h e n , w e m a y la y d o w n th e s e
a x io m s — T h a t in r e l a tio n to th e T e r r i t o r i e s , t h e p o w e r s o f C o n g r e s s a r e s u
p r e m e a n d e x c l u s i v e ; t h a t in r e l a tio n to th e S t a t e , th e y a r e s p e c if ic a lly d e
fin ed a n d lim ite d b y th e c o n s t it u ti o n ; a n d t h a t w e h a v e n o r ig h t to e x e r c is e ,
w ith in th e lim its o f a S t a t e , a n y p o w e r a s r e s u l t in g fro m th e g e n e r a l r ig h ts o f
s o v e r e ig n ty ; b e c a u s e t h a t s o v e r e ig n ty b e lo n g s to th e S t a t e s a n d to th e P e o p le ,
a n d n o t to th e F e d e r a l G o v e r n m e n t . T o s h o w t h a t th e s e t w o l a s t p o s itio n s
a r e c o r r e c t , I w ill r e a d th e t e n t h a r t i c l e in a m e n d m e n t o f th e c o n s t it u t io n :

The powers not delegated to the United States by the constitution, nor pro

ON T H E B IL L TO RENEW T H E CH A RTER OF 1791.

JgQ

hibited by it to the States, are reserved to the States respectively, or the
People.”
A s, then, the incorporation of this bank involves the exercise of legislative
powers within the jurisdiction o f the States, in relation to the rights of proper
ty between the citizens o f those States; and as no power to incorporate a bank
eo nomine, is to be found in the constitution, it would seem sufficient for us
to rest the argument here, by a mere denial o f the power; and to call on the
advocates o f the bank to show its constitutionality. An attempt to prove this
constitutionality has been made; not, however, sir, by arguments advanced
by gentlemen on the other side of the House in their places, (for they have,
so lar, observed, and I understand that they w ill continue to observe, a pro
found silence on this question,) but by arguments which have been gratuitous
ly introduced, by the agent of the bank. I allude to the pamphlet, which has,
within a few days past, been printed and distributed among the members, con
taining the celebrated argument of General Hamilton, on the constitution
ality of a national bank. A s that pamphlet is de fa cto , if not d eju re, before
the committee, I w ill, if the committee will indulge m e, attempt to examine
som e o f the principal arguments contained in it, and I will also notice some
additional ones, advanced yesterday by my honorable friend and colleague on
m y left. (M r. F is k . ) In the course of the observations which I have to sub
mit, I shall, withoutdoubt, repeat arguments and remarks made by the gentle
men who have preceded me, and others which are familiar to the members of the
committee. M y excuse must rest in the difficulty of taking a connected view o f
the subject, without such repetitions. I f I shall be so fortunate as to throw a
■single new ray of light on this important question, I shall feel amply remune
rated for my trouble, and I shall think the time o f the committee not alto
gether m isspent
T he first argument in this pamphlet, is founded on the sovereignty o f the
powers of Congress. The Federal Government is said to be sovereign, as to
all the objectsfo r which that Government was instituted. A sovereign power
includes, by force of the term, a right to all the means applicable to the at
tainment ot the ends lor which that power is given; and therefore Congress
may, in virtue o f their sovereign power, create incorporations for attaining
the ends or objects of those powers.
This argument is founded on what the logicians call petitio principii, or,
beg g in g the question. T he proposition, that the Government is sovereign, is
assumed, to prove that it possesses the attributes o f sovereignty: or, in other
words, tne fact o f sovereignty is assumed, to prove that sovereignty. I f the
position, that the powers ot this Government are sovereign, as to all the objects
o f them, be proved, I will concede the consequence, to wit: that we have a
right to establish corporations to attain those objects. B ut I deny the fact o f
sovereignty. T he acts o f Congress, it is said, are declared by the constitu
tion, to be “ the supreme law of the land;” and the power which can make the
supreme law o f the land, is, necessarily, a sovereign’power. But I deny that
this is a correct definition, or exposition o f sovereignty. It is not the high
nature o f an act, nor the authority o f the act, that stamps the character of
sovereignty on him who performs it. T he sherift’o f a county, who puts a man
to death, under.the sentence of the law , executes an act o f as high import and
authority as human power can execute: and yet the sheriff o f a county is not,
therefore, a sovereign. H is authority is a mere delegated authority: his act is
a mere ministerial, mechanical act. T he idea of sovereignty imports the exer
cise of discretion—o f judgment—of w ill. It is of the very essence o f sove
reign power, that vou may execute that power, or not execute it: that you
may execute it when you w ill, and how you w ill, A sovereign power, as to
a n y object, includes a right to any means, and all the means applicable to the
attainm ent of the object. B u t, sir, do Congress possess sovereign powers; or,
what is the same thing, discretionary means, as to the attainment o f the ob
jects o f this Government? N o , sir. T h e constitution is not a general authority
to Congress to attain the objects for which the Government was established;
but it is an enumeration of the particular powers, or means, by which, and by

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which only, certain objects are to be accomplished. I f the powers of Con
gress were sovereign, they would of necessity comprehend all the means ap
plicable to the attainm ent of their objects; but, inasmuch as they are specific
and circumscribed, that very circumstance proves that they are not sovereign.
T he People of the United States are the true sovereigns of this country.
From them all power emanates, and on their will all the authority of this Go
vernm ent depends. The powers of the Federal Government are mere dele
gated chartered authorities; and in the exercise of them, we are tied down to
trie jetter of the constitu tion. W e have, to be sure, a certain latitude of dis
cretion allowed us, within the letter and pale of the constitution; and, so fa r ,
we may be said to possess a sort of limited, qualified sovereignty. B ut the
constitution is the standard by which to measure the quantum and extent of
our sovereignty. And our sovereignty, which is the result of the powers given
in the constitution, is not the standard by which to measure the constitution.
T he constitution is the true bed of Procrustes^ and o u r sovereignty, however
unwillingly we may yield it, m ust be the victim.
A nother argument, whjch is rather an a rg u m e n ts the favor,, than ter the right
of this bank, is, that it is an innocent institution 5 that although its erection
involves the exercise of legislative powers w ithin the States, it does not
abridge nor affect the rights of the citizens, as secured to them by the laws of
those States. A corporation, it is said, is a fiction of the law—a mere politi
cal transformation of a number of individuals from their natural into an arti
ficial character, for the purpose of enabling them to do business to better ad
vantage, and on a more extended scale: but, th at, when this political associa
tion, this legal entity, is once formed, it becomes subject to the lavvs of the
State in which it happens to be placed.
I know, sir, that there is nothing formidable in the abstract idea of a cor
poration. I t is a mere phantom of the imagination; invisible, intangible, and,
of course, innocent. B ut, sir, when the legal effects of this incorporation are,
to invest the individuals whom it associates, with privileges and immunities
to which they were not before entitled; when this legal fiction is interposed
to shield certain individuals from (he liabilities to which they would be sub
je c t as ordinary citizens, it then becomes a m atter of im portant and serious
consequence. W hat are some of the legal effects of this incorporation?
One of its most obvious and distinguished characteristics is, that it exempts
the private property and persons of the stockholders from all liability for the
paym ent of the debts of the company. By the laws of every State in the
U nion, every man is, I be Lieve, liable for the payment of his debts, to the full
am ount of his private fortune; and, in case that fortune prove insufficient, his
ersonal liberty is at the disposal of his creditor;, a t least, to a certain extent,
s not, then, the exemption from these liabilities an important immunity? I s
it not an exclusive privilege secured to the stockholders of this bank? A ssur
edly it is. I know it has been said, that a number of individuals may, by a
private association, secure to themselves all the advantages of an incorporated
company; that, by forming a common fund or stock, upon which to 0 0 busi
ness, and issuing notes chargeable upon that fund, they may exonerate their
persons and private property from all liability for the payment of the debts
contracted in that business. I am no lawyer, sir; but if the law be, what it
is said to be, and what I believe it to be, sum m a ratio, then I pronounce this
doctrine not to be law: for nothing can be more preposterous in principle than
to say, that a man may, by his own act, avoid the force of an obligation,
which the law has made universal and unqualified. I f a man owes a debt,
acknowledges he owes it, and has received a consideration for it; the law has
prescribed the nature and extent of his liability to pay it; and it is not for him
to say that it shall only be paid out of a certain fund, or particular p art of his
property, and no other. W hen men contract a debt jointly, the legal obliga
tion to pay it, extends as well to the persons and separate property of the in
dividual partners, as to their joint property.
Another feature o f this incorporation is, that it authorizes the stockholdersto take usurious interest for their money. By the provisions of the law , the

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bank may issue notes and make discounts to double the amount of their capi
tal stock; and, in addition to that, to the amount of any moneys which may
happen to be deposited in their vaults for safe keeping; and tni 9, too, inde
pendent of the debts created by these deposited. T he Dank then may, and in
fact, in many instances, does, draw an interest on three or four times its capi
tal. Every State in the Union has laws regulating the rate of interest, and,
jn most of the States, this rate is fixed at six per cent, a year. By these laws,
it is made penal for a man to receive more than six per cent, interest for the
use of any sum of money, which, by a loan, he puts at hazard, and the use of
which he deprives himself of. Now, sir, this bank is perm itted, contrary to
those laws, to draw an interest on tw enty or thirty millions of dollars, when,
in truth, the whole extent of its responsibility, the whole sum which it puts at
hazard, and the use of which it foregoes, is only its original stock of ten m il
lions. In answer to this, it will be said, that an individual may, by issuing
notes to an amount greater than his property, legally receive an interest on a
capital which he does not possess. B ut, it must be recollected, in case of the
individual, that, although he may not, at the particular time, possess a pro
perty adequate to the payment of his debts, yet, that all the property which
ne may subsequently acquire, will be liable for the payment of th 9 se debts:
And, what is more, sir, his personal liberty is always put in jeopardy. In this
point of view, the liability and the hazard of the individual may fairly be said
to be co-extensive with the whole amount of the capital on which he draws an
interest; and which is often the case with the bank.
This bank incorporation possesses other qualities at war with the laws of the
several States, one of which is, that it authorises stockholders, wlw may be
foreigners, to noid real estate. B ut, sir, I will not detain the committee any
longer on this part of the argument: for this institution cannot be said to be
innocent, as regards the rights of the States, when its effects on the rights of
property are to exonerate the stockholders from some of the most important
responsibilities which the laws of the several States have provided for tne pay
ment of debts; and when it authorizes the taking of usurious in te rest I lay
it down, then, asa position which cannot be controverted, that the granting of
this charter is not only an inteference with the municipal regulations of the
several States, in relation to the rights of property, but that it is an infraction
of the rights of individuals as secured by tnose regulations.
B ut, it is contended, that a right to incorporate a bank of the United States
is delegated to Congress by the constitution: and five or six different pro
visions of the constitution are referred to as giving this right. I t is said, that
it is implied in the power to lay and collect taxes —in tne power to borrow
money —in the power to regulate trade an d intercourse between the several
States —in the power to provide f o r the general iv e fa re —and in the power to
make all needful rules an d regulations respecting the territorial an d other p ro
p e rty o f the u n ited States. The very circumstance of referring this right to

many different heads of authority, is, in itself, conclusive evidence, that it has
no very direct relation to any of them: for it can scarcely be imagined, that
the single act of incorporating a bank, can be, at the same tim e, any thing like
a direct execution of so many and such distinct and independent powers. B ut
I will examine these provisions separatelyBefore I proceed, however, I will premise, that all the arguments in support
o f the right to incorporate a bank, as deducible from the provisions 9 f the con
stitution itself, are built up by the aid of the clause of the constitution, which
has been sometimes called “ the sweeping clause.” I allude to the clause
which declares that Congress shall have the right to pass all laws necessary
and proper for the carrying into execution the delegated powers. All the
powers in the constitution are given for certain ends or objects. B ut each
power is not a general authority to attain a particular object, and comprehend
ing, of course, all the means or powers aplicable to its accomplishment; but.
in most instances, it is a specific mean for effecting some particular end, ana
all other means orpowers, (for means and powers are the same thing,) conducive

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to the same end, are expressly excluded, by the restrictive clauses of the con
stitution.
T he mode of reasoning adopted by General Ham ilton, and the other advo
cates of implied powers, is this: They first search for the end or object for
which a particular power is given; and this object will be an immediate or
ultim ate one, as may best suit the purpose of the argument. Having ascer
tained the end or object, they abandon the power; or, rather, they confound
the pow er and the object of it together, and make the attainm ent of the object,
and the execution of the power given to accomplish it, convertible terms.
W hatever, they say, attains the object for which any power is given, is an
execution of that power. B ut the constitution gives to Congress a right to
make all laws necessary and proper for carrying into execution the delegated
powers: and, therefore, as the execution of a pow er,and the attainm ent of its
object, are synonymous term s, the constitution gives to Congress a right to
make all laws necessary and proper for a tta in in g the ends or objects for which
the various powers in the constitution are given.
I beg leave to read a passage from this pamphlet: “ T he relation between
the m easure and the end; between the nature of the mean employed towards
the execution of a power, and the object; must be the criterion of constitu
tionality.” H ere, then, is the axiom: Now for the application of it. T he
constitution gives to Congress the power to levy taxes, and also the power to
borrow money. B u t the establishment of a bank is neither levying taxes nor
borrowing money; nor is the la w incorporating the bank, a law to levy taxes,
or a law to borrow money. B ut the immediate end or object, for which these
two powers were given, was, to enable the Government to raise a revenue;
and a bank may promote this object. T hen, sir, by a dexterous application
of the argument which I have stated, the fallacy of which consists in the sud
den and unobserved transitions which are made from the power to the object,
and from the object back again to the power, they prove that the establish
m ent of a bank is in execution of the powers to lay taxes and to borrow money.
I will now, sir, proceed to examine the particular provisions of the constitu
tion which have been relied on, and to place the subject in some different as
pects.
In the first place, then, it is contended that the right to incorporate a bank
of the U nited States, is included in the power to la y an d collect taxes. And
how is the argument by which this position is maintained? W h y , sir, it is
said that the law, by creating bank paper, and making that paper receivable
in paym ent for taxes, increases the circulating medium in which taxes are
paid, and, of course, must facilitate the payment of them: that whatever faci
litates the payment of taxes, facilitates also the collection of them ; and w hat
ever aids or facilitates the collection of taxes, is a means for their collection.
A nd, therefore , the incorporation ot a bank is in execution of the power to lay
and collect taxes.
No man, sir, ought to complain of the weakness of a government, whose
powers may be reasoned up by logic like this, A m idst the infinite variety of
relations, and connexions, ana dependencies, and analogies, by which all h u
man transactions are allied to each other, he must be a weak politician who
cannot, by hooking together a chain of implication like this, justify any and
every measure of political policy or economy, as a m eans of executing some
of the powers with which this Government is intrusted. T ake this latitude
of implication or construction, and you w ant no other power but the power
to lay and collect taxes. I t may be tortured into a justification of every mea
sure which ambition itself could desire. N o tyrant ever made a law without
assigning the public good as the motive of it. No man on this floor, however
wicked his designs, would venture to propose a measure, (indeed few could
be proposed) in tavor of which he could not adduce some plausible argument,
to shew that it would lend to prom ote the general p ro sp erity o f the country.
And in showing this, he would show its constitutionality; for it is dem onstra
ble, that whatever would promote the general prosperity of the country,
would, and for that very reason, facilitate, in some greater or less degree, the

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173

payment of taxes; and might, therefore, be justified as a means for the col
lection of taxes.
But, sir, the constitution, as I have said before, and I must repeat it again—
for this is the radical source of all the error on this subject—the constitution
of the United States is not, as such reasoning supposes it to be, a mere gene
ral designation of the ends or objects for which the Federal Government was
established; and leaving to Congress a discretion as to the means or powers
by which those ends shall be brought about. B ut the constitution is a spe
cification of the powers or means themselves by which certain objects are to
be accomplished. The powers of the constitution, carried into execution ac
cording to the strict terms and import of them, are the appropriate means, and
the only means within the reach ot this Government, for the attainm ent of its
ends. I t is true, as the constitution declares, and it would be equally true
if the constitution did not declare it, that Congress have a right to pass all
laws necessary and proper for executing the delegated powers: b ut this gives
no latitude of discretion in the selection of means or powers. A power given
to Congress in its legislative capacity, without the right to pass laws to exe
cute it, would be nugatory; would be no power at all: it would be a solecism
in language to call it a power. A power to lay and collect taxes, carries with
it a right to make laws for that purpose; but they must be laws to la y and
collect taxes, and not laws to incorporate banks. I f you undertake to justify
a law under a particular power, you must show the incidentality and appli
cability of the law to the power itself, and not merely its relation to any su p
posed end which is to be accomplished by its exercise. You m ust show that
the plain, direct, ostensible, primary object and tendency of your law is to
execute the power, and not that it will tend to facilitate the execution of it.
I t is not less absurd than it is dangerous, first, to assume some great, distinct,
and independent power, unknown to the constitution, and violating the rights
of the States; and, then, to attem pt to justify it, by a reference to some re
mote, indirect, collateral tendency, which the exercise of it may have towards
facilitating the execution of some known and acknowledged power. This
word fa cilitate, has become a very fashionable word in the construction of
powers; but, sir, it is a dangerous one; it means more than we are aware of.
T o do a thing, and to fa cilita te the doing of it, are distinct operations; they
are distinct means; they are distinct powers. The constitution has expressly
given to Congress, the power to do certain things; and it has, as explicitly,
withheld from them the power to do every other thing. T he power to lay
and collect taxes is one thing; and the power to establish banks, involving in
its exercise the regulation ot the internal domestic economy of the States, is
another and totally distinct thing; and the one is therefore not included in
the other.
Again, sir, it is contended th.it the right to incorporate a bank is implied in
the power to regulate trade and intercourse between the several States. I t
is said to be so, inasmuch as it creates a paper currency, which furnishes a
convenient and common circulating medium of trade between the several
States. Money, sir, has nothing more to do with trade, than that it furnishes
a medium or representative of tne value of the articles employed in trade.
T he only office of bank bills is to represent money. Now, if it be a regulation
of trade, to create the representative of the representative of the articles or
subjects of trade, a fo r tio r i, will it be a regulation of trade to create the arti
cles or subjects themselves. By this reasoning, then, you may justify the right
o f Congress to establish manufacturing and agricultural companies within the
several States; because the direct object and effect of these would be, to in
crease manufactures and agricultural products, which are the known and
common subjects of trade. You might, with more propriety say, that, under
the power to regulate trade between the States, we nave a right to incorporate
canal companies; because canals would tend directly to open, facilitate, and
encourage trade and intercourse between the several States; and, in my hum
ble opinion, sir, canals would furnish a much more salutary, direct, and effi
cacious means, for enabling the great body of the people to pay their taxes,

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BANK OF T H E U N ITE D STA TES.

than is furnished by banks. But, sir, these various powers have never been
claimed by the Federal Government; and, much as I am known to favor that
particular species of internal improvement, I would never vote to incorporate
a company for the purpose of opening a canal through any State, without first
obtaining the consent of that State, whose territorial rights would be affected
by it. There can be no question, but canal companies, and agricultural com
panies, and manufacturing companies, and banking companies may all tend,
more or less, to facilitate the operations of trade; but they have nothing to do
with the political regulations of trade: and such only come within the scope
of the powers of Congress.
But, it is again said, that the right to grant this charter, is included in the
power to borrow money. T he right is attem pted to be deduced by a train of
reasoning similar to that employed in relation to the provisions which I have
already noticed. By forming a string of implications, by which you prove
that a power to act in certain cases, and in relation to certain subjects, implies
the power to create those cases and subjects to act upon. T he Government,
it is said, may w ant, and m ust have money, in any great national crisis. A
national bank, with an extensive capital, will furnish ample means for loans;
will facilitate the exercise of the power to borrow; and, therefore, the right to
establish such a bank, is implied in the power to borrow. No one, but a logi
cian, sir, would imagine that a pow’er to lend, and a power to borrow, had any
relation to each other, much less could he conjecture, that a power to borrow,
and a power to create the ability to lend, mean the same thing. A plain unso
phisticated man, on reading the constitution, would say, that the power to
borrow, necessarily and by force of the term , pre-supposed the existence of
the ability, and the disposition to lend; and that it could not be exercised un
less such ability and disposition should actually exist. B ut the favorite doc
trine is, that all powers are given for particular ends, and include all the means
applicable to their attainment. Here the end is to borrow money; to borrow
honestly if we can, but, t o b o r r o w . T he ability to lend is a necessary means
or ingredient toward perfecting the execution of the power to borrow. But,
sir, le t me ask, whether the disposition to lend be not as necessary a mean to
wards accomplishing a loan as the ability? I t unquestionably is. And, of
course, by the doctrine that the end justifies the means, you may coerce the
will to lend; and this, too, equally, in cases where the ability is created by
Congress, and where it is derived from any other quarter. A loan obtained
by bringing into fair operation all the implications of this power, would be
borrowing in an off-hand style. Such a loan, if effected by Bonaparte, we
should call robbery. B ut in this mild Republic, it would be nothing more than
the fair exercise of an implied constitutional power.
I have pursued this argument thus far, merely for the purpose of showing
the absurdities into which this doctrine of implication will lead us. But,
suppose, sir, that the argument of the gentlemen on the other side of the ques
tion be correct, as far only as they have carried it, to w it: that the power to
borrow, implies a right to furnish the ability to lend. W h at, I would ask, is
the probable fact, as to the facilities which this bank will afford the G overn
ment in borrowing?
I t will be conceded that we shall have no occasion for borrowing, except in
case of a war; anti if we have a war, the probability is, that that war will be
with G reat Britain. I say this, not as a party man, sir, but because the inter
ests of that nation, from her situation, and her rival pursuits, will be much
more likely to come in collision with ours, than those of any other power.
Now, it is a fact, in evidence before the committee, that more than one-half of
the stock of this bank belongs to British subjects; and although, as foreigners,
they can have no direct agency in the affairs of the bank, yet we well know,
that, through the instrum entality of their friends and agents, of whom there
are, unfortunately, too many in this country, they may completely control its
operations. Now, I would ask, whether it is probable, that British subjects
w o u ld be willing to lend us money to carry on war against their sovereign?
W o u l d th e y not, on t h e contrary, exert the immense influence which they are

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said to possess over the moneyed interests of this country, for the purpose of
depressing the credit of the country? for the purpose of crippling the opera
tions of the State banks? and for the purpose of drying up the sources from
which the Government might otherwise calculate to derive supplies? B ut, sir,
this has little to do with the question of constitutionality, to which I will again
return.
Another ground upon which the constitutionality of this institution has been
attempted to be supported, is, that it is necessary to the regular and success
ful administration ot the finances. There is no question, but this bank, and
its branches, afford convenient places for the deposite and safe keeping of the
public revenue. It is not to be controverted that they also furnish a safe,
convenient, expeditious, and cheap means for the transmission of moneys from
one part of the United States to another, as they may be wanted by the G o
vernment. And if these facilities were not to be attained in any other way,
I should say it would afford an argument in favor of a bank; not a bank in ■
fringing and violating the rights of the States; but, a bank upon principles
consistent with those rights.
But, sir, is there not, in every State in which there is a branch of the U nit
ed States Bank, also one or more State banks, of equal respectability, and of
equal security; at least to the extent of any sum for which they are willing to
undertake? These State banks m aybe used as depositories for the public
moneys, and they will be equally safe and convenient. A nd, if you will give
to these State banks the advantages of these deposites, as you nave hitherto
given them to the United States Bank, they will furnish means for the trans
mission of moneys from place to place, equally safe, convenient, cheap, and
expeditious, 'l’nis object will be attained by connexions which will be formed
between the banks of the different States. Such connexions have already, in
many instances, been formed. But, they have not been carried to the extent
they otherwise would have been, on account of the U nited States Bank and
its branches; between which, there is so intimate and so necessary a connexion.
But, in answer to this, it is said that, if the Bank of the united States
would be constitutional without the existence of the State banks, it is equally
so with. T hat a power which is once c 9 nstitutional,is equally so a t all times,
and under all circumstances. T hat a right which must depend for its exist
ence on the will of the State Legislatures, over whom we nave no control, is
incomplete, and, indeed, as to us, is no right at all. This argument is found
ed on the supposition, that the Federal Government is a complete G overn
ment, containing in itself all the'principles and powers necessary for its own
operations; which supposition is wholly false. T he Federal Government does
not profess to be complete in itself. It is expressly predicated on the existtence of the State Governments; and most ot the facilities for its exercise are
derived from the State Governments. I t cannot perform even its own pecu
liar powers and functions, without the aid and co-operation of the State au
thorities. How, let me ask you, sir, is your Government constituted? Your
Senate is appointed directly by the State Legislatures. Your President and
House of Representatives, indirectly, by the same authority. Suppose they
should neglect or refuse to make these appointments, can you compel them to
d o it? No, sir. Can you punish them for not doing it? N ot in the least. They
may appoint, or not, as they think proper; and if they should neglect, or re
fuse to do it, your boasted complete Government would die a natural death, by
its own imbecility. It is not fair, then, to say that a power is constitutional,
because the Government would be incomplete without it. I t is not fair to
say, that what would be constitutional, without the existence of the State Go
vernm ents, and their appendages, is equally so with. This w ould prove that
you have a right to appoint your own President, Senate, and House of R epre
sentatives. I t would go to usurp all the powers of the State Governments:
for the Government could not be said to be complete, without possessing the
powers of both Governments combined. Indeed, this Federal Government
cannot be said to be complete, as to a single power, without all the auxiliary
powers of the State Governments: for there i» not a single act which it can

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T H E U N ITED ST A T E S.

perform without their assistance, directly or indirectly. T he very bank law
now under consideration, is an illustration of this: for how are the provisions
of this law to be enforced; how are the debts which it authorizes to be con
tracted, to be collected, but through the medium of the State courts? The
doctrine of perfect rights, then, if it prove any thing, proves t<?o much. I f it
proves that, in order to manage your revenues, you may establish banks with
in the States, it equally proves, that, in order to carry the provisions of your
bank laws into execution, you may establish courts and offices within the
States for that purpose. I think, then, sir, I may fairly conclude, that, so long
as the State Governments furnish you with all the facilities which you can
reasonably require, for conducting your revenues by means of their State
banks; so long, it will be unnecessary; so long, it will be improper; and, there
fo re , so long, it will be unconstitutional, to invade the jurisdiction of the States,
to establish national banks.
Again: T he constitutionality of the bank has been attem pted to be main
tained, by a reference to the phrase in the constitution, in relation to the power
of Congress to provide for the general welfare. I will read the clause in
which this phrase is contained: “ T he Congress shall have power to lay and
collect taxes, duties, imposts and excises, to pay die debts and provide for the
common defence and general welfare of the United States.” T his clause has
been erroneously construed by some, to contain a successive delegation of
three or four distinct powers, to w it: a power to lay taxes; a power to pay
the debts; a power to provide for the common defence and general welfare.
If, then, it is said, Congress have power to provide for the general w’elfare,
they may choose the means, which are here not made specific, but left discre
tionary, for the attainm ent of that object: and if, in their opinion, a national
bank will conduce to that object, they have a right to establish a national
bank. B ut, sir, this is a total misconception of the meaning of this clause of
the constitution. Instead of three or four distinct grants of power, this clause
contains but one grant of power, namely, the power to raise money by taxes,
&c. and all the subsequent parts of the clause, are a mere limitation of this
power to raise money; or a specification of the purposes for which money may
be collected. T hat this is not a general authority to Congress to provide for
the common defence and general welfare, is instantly discovered by a com
parison of this clause writh the subsequent part of this section, which consists
of a list, or enumeration of the specific means or powers, by which Congress
may provide for the common defence and general welfare. A nd it would be
unnecessary and absurd in itself, as well as repugnant to the whole spirit and
character of this constitution, to give, first, a general power, and then to de
legate specific powers, all comprehended in the general one. Although I do
not think there is any ambiguity in this clause, as it now stands, yet, its mean
ing might, perhaps, be rendered more perspicuous and definite, by altering
the phraseology so as to read in this way: “ Congress shall have power to lay
and collect taxes, duties, imposts and excise, fo r the purpose o f paying the
debt,and providing for the common defence and general welfare of the U nited
States; but, (going on again, sir, with a further qualification of the same pow
er to raise money) all duties, imposts and excise, shall be uniform throughout
the United S tates.” T his, then, is merely a right to raise revenue; and, so
far as regards the objects for which revenue may be raised, the powers of Con
gress are discretionary; provided those objects come within the description of
providing for the common defence and general welfare. B ut, so far as regards
the means by which these revenues, when collected, shall be applied to their
destined objects, we m ust look to the powers of Congress, as defined and limit
ed in the subsequent parts of this section. In other words, this clause gives
plenary powers to raise money; but it gives no powers, I should say political
powers, in relation to its application and expenditure. T he powers of Con
gress over the money, when collected, in reference to its expenditure, would
be the same which an individual possesses over his private property; powers
resulting from the nature of property; and, as regulated by the law s of the
State in which it might happen to be situated. I will illustrate my idea by »

ON T H E

BILL T O RENEW T H E C H A R TE R OF 1791.

y i’J

case. Suppose the constitution had given to Congress the power to raise a
million of dollars, to provide for a national university. W ould it thence
follow, that we might go into the State of North Carolina, and take your pro
perty—property secured to you by the laws of this State—to make this es
tablishment upon? Could we take the public property of that State for this
purpose? To both of these questions, every man, who understands any thing
of the constitution, will promptly answer, no. This power, then, to raise mo
ney, fo r the pwpose o f establishing a national university, is only a power
to raise money; and, for the means of applying it, we must search for our
power in other parts of the constitution. On doing this, we should find that
we must erect the university either in the District of Columbia, or in one of
the territories over which we have exclusive jurisdiction, or in case we should
choose to erect it within the limits of a particular State, we m ust first not
only purchase the land, but obtain a cession of the jurisdiction from the State
Government. T he phrase of providing fo r the general welfare, then, is a
mere qualification of the power to levy taxes, and can give no authority in re
flation to banks.
T here is one more, and I believe but one more, provision in the constitu
tion, which is relied on as authorizing the establishment of this bank. I t is
this: Congress shall have a right to dispose of and make all needful rules
and regulations respecting the territory, or other property belonging to the
U nited States.” It is said that, in virtue of this provision, Congress nave es
tablished the territorial Governments, which are corporations of the highest
and most extensive nature, exercising political powers over the person, as well
as the property of citizens of the United States: and that no complaint has
been made, that Congress has exceeded its authority in this particular. W hy
may we not, then, it is asked, establish corporations to regulate and manage
the personal property of the United Suites, which is coupled in the constitu
tion with the territorial property? T he fallacy of this argument consists in
not marking the distinction which exists in these two species of property, and
the consequent powers of the Government over them. T he property which
the United States possess in the territorial lands, is not a mere right ot soil, a
mere usu fru c t; but it also includes the right of jurisdiction and sovereignty.
I t is in virtue of this right of jurisdiction, of those sovereign plenary and ex
clusive powers over the territories, which I noticed in a former part of my
observations, that these corporations or territorial Governments have been
established. On the other hand, our revenues are not only personal property,
but a qualified property. They are collected for certain objects, anti are sub
ject in transitu to the local jurisdictions. This argument, then, which is
founded 011 an analogy that does not exist, must fall with the analogy that sup
ports it.
B ut, Mr. Chairman, my honorable friend [M r. F isk ] has advanced a new
argument in support of the constitutionality of this bank; an argument, not
deduced from the provisions of the constitution itself, but founded on pre
scription. He tells us that this bank was originally incorporated by a Con
gress fully competent and qualified to decide on its constitutionality; that its
existence is almost coeval with the Government; that it has been counte
nanced by all succeeding administrations; that laws have been passed to en
force the provisions of the original charter; and, therefore, the constitutional
question must be considered as settled, adjudicated, and at rest.
W hatever may be the opinion of the gentlemen of the long robe, I cannot,
for myself, yield to this doctrine of prescriptive constitutional rights. It may
answer in England, where they have no constitution; or where, rather, as
they choose to explain it, immemorial usage, or prescription, are evidence of
what their constitution is. It may do in Connecticut—(itis not my design to
derogate from the respectability of that State, nor of its institutions)—it may
be good doctrine in Connecticut, where ancient custom and steady habits a r e
their constitution. B ut, sir, such doctrine should never be tolerated in this
H ouse, where every member has a printed constitution on his table before
him; a constitution drawn up with tiie greatest care and deliberation; with
23

178

BANK OF T H E U N ITED ST A T E S.

t h e u t m o s t a t t e n t i o n to perspicuity and precision; a constitution, the injunc
t io n s o f which, as we, in our best judgments shall understand them, and n o t
a s they shall be interpreted to us by others, we are solemnly bound, by our

oaths, to obey.
I t is true, that this bank was originally established by a Congress competent
to judge of its constitutionality. I t is equally true, that a respectable minority
of that Congress opposed the passage of the law, on the ground of its uncon
stitutionality; and, if I have been rightly informed, it is also true, that the
then President, General W ashington, in giving his sanction to that law, did
it with more doubt and hesitation than almost any other act of his adm inistra
tion. It is true, that subsequent Congresses, of different political complex
ions, have passed laws enforcing the provisions of the original charter; and
that no attem pts have been made to repeal it. B ut, it is equally true, that all
this might be done with the most perfect propriety and consistency, although
they totally disbelieved in its constitutionality. I need not state to this House,
that this is not a law in the ordinary course of legislation; a law prescribing a
common rule of conduct for the government of the citizens of the United
States at large; liable to be repealed at any time: and the obligations of which
would cease with its repeal. T his, sir, is not the nature of the law; but it is
a law in the nature of a contract between the Government and certain indivi
duals, and the existence of it was extended to tw enty years. T he moment
this contract was made, and its operations commenced, private rights were
vested; and it would have been a breach of national faith to have repealed it.
T he original Congress had the same right that we have to judge of the consti
tutionality of a law; and having, under that right, passed this law, or made
this contract, we are bound to carry it, as a contract, into execution. As a
contract, every successive Congress, of whatever materials composed, is one
party to it; and it is well known that a party cannot violate the obligations of
his own contract; but, on the contrary, is bound to carry them into effect. It
was competent in the State Governments to have opposed the execution of this
law, on the ground of its unconstitutionality; but, perhaps, under all circum
stances, they acted a wise and discreet part, in not attempting it. T he na
tional faith was pledged in the passage of this law. T he national credit,
which it was, at that time, and which, indeed, it is at all tim es, of the first im
portance to support, was at stake on the faithful execution of this contract:
and it was better to suffer for tw enty years, under an unconstitutional law,
rather than to attem pt so violent a remedy—a remedy which would have crip
pled the credit of the nation in its infancy.
B ut, sir, because these were proper considerations with our predecessors and
the States, to suffer the continuance of this law, does it follow, that now,
when that law has expired by its own limitation; when the obligations of that
contract are complied with and discharged; when the national faith is emanci
pated, that they are motives for us to make a new unconstitutional contract?
N o, sir. The question now is a question de novo. I t is a question of con
science in the interpretation of the letter and spirit of the constitution, unem
barrassed by any collateral considerations; and as such, I shall feel bound to
vote upon it. I t is the province of the executive and judicial departments to
explain and direct the practical operation of each particular law; and I must
submit to the decisions. B ut the commentaries of courts are not to furnish
the principles upon which I am afterwards to legislate. I t is to this book, (the
constitution) so justly dear to us all, and not to the books of reports, that we
must look, as a guide, to direct us in the path of our oath and our duty.
I believe, sir, that I have gone through, lamely I know, but I hope intelli
gibly, with the examination of all the principal arguments that have been ad
vanced in support of the constitutionality of this law. Having already occu
pied so much time, I will detain the committee but a few moments longer.
I f the views which I have taken of the subject are correct, these positions
may be considered established. First, that we have no right to incorporate a
bank, unless that right be delegated by the constitution: for such is the decla
ration of the constitution itself. Secondly, that if this right be given by the

ON T H E B IL L TO RENEW T H E C H A R TE R OF 1791.

J79

constitution, it is included in some of the provisions upon which I have been
commenting.
.
.
.
.
.
.
T he only question, then, as relates to the constitution, is, whether we shall,
by the passage of this bill, recognise the doctrine of implied or constructive
powers. Before we do this, I must entreat every member of the committee
to examine well the consequences of such a recognition. This is not a ques
tion about the utility or inutility of a bank; but it is a great question of con
stitutional principle. It is, whether we shall consider this Government as the
servant and instrument of the people for managing and protecting their rights,
and subject, at all times, to their control; or, whether we shall make it a giant,
capable of crushing its masters? A moment’s careful attention to this sub
je ct will show us that the doctrine of implied or constructive powers, as con
tended for in this case, is nothing mere nor less than the doctrine of general
expediency; and that, once established, it will w arrant Congress in the adop
tion of any measure not expressly prohibited by the constitution.
T he great ends or purposes of our Government are, the liberty, the security,
and the happiness, of the people. T he raising and management ol revenue;
the establishment and support of armies; the institution of courts of justice;
and the regulation of trade and intercourse between the States and foreign na
tions, are some of the great means or instruments by which these results are
finally produced. T here is a natural and intimate connexion and coincidence
between all these great measures or powers of government; they are expressly
calculated to aid and assist each other in their operations, and, in fact, form
different parts only of one great political machine; every possible measure of
civil policy is expedient exactly in proportion to its fitness or tendency to
promote the combined operation of these great causes or instruments ol human
happiness and security. But, sir, by the doctrine of implied powers, the con
stitu tion ality of every measure is also made to depend on its tendency or fit
ness to promote the final objects for which these various powers are given;
and thus resolves itself into a question of expediency. From the view we have
taken of the arguments in support of the right to incorporate this bank, we
perceive that its constitutionality is not made to depend on the P9 culiar appli
cability of the measure to any particular power in the constitution: for it is
equally applicable to halfa dozen different powers; but its constitutionality is
made to depend on its general tendency to promote the ultimate objects for
which these different powers were given. In other words, it is made to depend
on its expediency. W e speak of implied powers as innocent things—as m a t
ters of course. B ut the idea of express constitutional powers, and implied
constitutional powers, gives us the exact definitions of limited and arbitrary
Governments. The final object of both these Governments is the same—the
happiness of the people. T he only difference between them is, that in the one
case the powers or means by which this end is attained, or intended to be
attained, are limited and defined; in the other, they rest on the discretion or
will of the despot—they are all, with him, questions of expediency.
T here is another point of view in which, this subject may be placed; and
in which, it seems to me impossible for the strongest advocates of implied
powers to reconcile the passage of this bill. I t will not be denied, that the
constitution contemplates the existence of two distinct sets of powers—the one.
in the State Governments, and the other in the Federal Government: that
there are certain powers which may be said to belong peculiarly and exclusively
to the State Governments; and certain other powers which may be said to
belong peculiarly and exclusively to the Federal G ovennent. Now, sir, if
there be any power which can be said to belong peculiarly and exclusively to
the State Governments, it is, in my humble apprehension, the very power of
erecting the corporations for the purpose of carrying on moneyed or other ope
rations; connected immediately, necessarily ana inseparably with the internal
political economy of the State: it is the power of regulating the rights and
relations of property between citizen and citizen of the same State: it is the
power of erecting a banking company, in order to facilitate and direct the daily
and ordinary operations of trade and industry among the citizens of the same

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State. Although, then, I say, the power of incorporating a bank might, at
first, seem to be implied in some of the powers of the Federal constitution?
yet, when we see that, in its exercise, it goes to obliterate and destroy the great
characteristic feature of distributive power in this Republic; when we see that,
in its execution, it obtrudes and ramifies itself into all the transactions of do
mestic economy, which are the peculiar subjects of local or State regulation,
we ought, on that account, to reject it.
B ut, sir, I will conclude by again cautioning my republican friends, and
my worthy colleague in particular, to beware how they familiarise themselves
with this doctrine of constructive power. It is a creed, at war with the vital
principles of political liberty. T he pride and the boast of the American Go
vernm ents is, that they are the governments of the laivs and not of men—that
they are the regular and necessary operations and results of principles and
powers, established in the moments of cool and deliberate reflection, by the
combined wisdom of the nation; and that they are not the effects of the mo
m entary passion, pride, interest, whim or caprice, of a few individuals collected
on this floor.
L ittle did the framers of this constitution, when they were so nicely adjust
ing and balancing its various provisions; when they were so carefully erecting
guards and barriers against the encroachments of power and ambition—L ittle,
I say, sir, did they imagine, that there lay concealed under the provisions of
this constitution, a secret and sleeping power, which could, in a moment,
prostrate all their labors with the dust. Still less, sir, did the people when
they adopted this constitution, with even more caution and scruple than that
with which it was formed, conjecture that they were singing the death warrant
o f all their State rights. B ut, once adopt the doctrine that you may travel out
of the letter of this constitution, and assume powers, merely on the ground
that they will tend to facilitate the execution of powers which are here given;
and you compass, a t a single sweep, all the rights of the States; and form the
basis of a cansolidated government. L e t the principle of constructive or im
plied powers be once established, in the extent to which it must be carried, in
order to pass this bill, and you will have planted in the bosom of this consti
tution a viper, which, one day or other, will sting the liberties of this country
to the heart.
T he question was then taken on striking out the first section, and carried, 59
to 46. W hereupon M r. A l s t o n reported the said amendment to the House.
J a n u a r y 19, 1811.
M r. L

ove,

t h i s d a y , o ffe re d t h e f o llo w in g r e s o l u ti o n :

Resolved, T h at it is expedient to repeal so much of an act passed the 10th
day of M ay, 1800, as makes it the duty of certain collectors to deposite, for
collection, in the bank of the United States or any of its branches, the bonds
taken by them for the payment of duties; and, that it be expedient to provide
that the bonds or money, now deposited in the said bank or its branches, may
be withdrawn.
T he said resolution was read and ordered to lie on the table.
F

ebruary

12, 1811.

T he following proceedings took place:
M r. L o v e moved that the House do proceed to consider the said resolution.
And, the question being taken thereon, it was determined in the negative.
[ S e e Journals of the House of the above dates.]
T he Committee of the W hole, having reported to the House, that they h a d
a g r e e d to strike out the first section of the bill.
M r . F i s k m o v e d t h a t t h e r e p o r t o f t h e s a id c o m m itte e s h o u ld lie o n the
t a b le . T h i s w a s d is a g r e e d to b y a v o te o f 57 t o 46.

ON THE BILL TO RENEW THE CHARTER OF 1791.

J8 1

The House then proceeded to consider the report of the Committee of the
W hole.

M r. D e s h a spoke in favor of the report: M r. P ic k m a n , against it: Mr. W .
A l s t o n , in fa v o r o f th e r e p o r t , b u t a ls o in fa v o r o f a n a tio n a l b a n k , o n t h e
g ro u n d o f c o n s titu tio n a lity ; a n d Mr. K ey c o n lc u d e d t h e d e b a te o t th is d a y ,
m a s p e e c h a g a in s t t h e r e p o rt.
The several speeches are inserted in their order, as follows:
Mr. D e s h a . Mr. Speaker: the question is on a concurrence with the Com
mittee of the W hole, in striking out the first section of the bill that contem
plates a renewal of the charter of the Bank of the United States; or, in other
words, whether we will foster a viper in the bosom of our country, that will
spread its deadly venom over the land, and finally affect the vitals of your
republican institutions; or, whether we will, as it is our duty, apply the pro
per antidote, by a refusal to renew the charter, thereby checking the canker
ing poison, the importation and dissemination of foreign influence that has
already brought our Government almost to the brink of ruin. Sir, I am op
posed to the renewal of the charter on constitutional grounds, as well as on
the score of expediency. I view it as being directly at war with not only the
letter, but the spirit of the constitution, and replete with principles incompati
ble with republicanism. As to the constitutionality, the ground that 1 in
tended to have occupied, was taken from me by the gentleman from New
York, who spoke yesterday, (M r. P o r t e r ) and I will say ably managed. T he
points he made, 1 consider incontrovertible, and the arguments deduced from
them, unanswerable; consequently, as I deem the constitutional question
nearly exhausted, I shall but barely touch upon it.
The States, sir, from the time they determined to be free, were particularly
guarded against the adoption of any measure that could, in the most remote
degree, lead to aristocracy or consolidation. L et gentlemen examine that in
strument—the pledge of union; I mean the articles of confederation. T hey
will find it couched in cautious language; they will find that the framers of
that instrum ent, were particularly guarded against vesting powers in the G en
eral Government, that could, in the most distant manner, place their rights
and liberties in jeopardy; they, no doubt, viewed large moneyed institutions,
like the one under consideration, as moneyed aristocracies which might, with
their different ramifications, jeopardize liberty, by imperceptibly gliding into
consolidation. A power expressly given to the General Government to grant
charters of incorporation will not be found in the articles of confederation;
and if gentlemen will cast their eyes over the second article of that instru
ment, they will find it expressly provides, that each State retains its sove
reignty, freedom, and independence,and every power, jurisdiction, and right,
which is not, by the articles of confederation, expressly delegated to th e United
States in Congress assembled. T his, sir, I show to prove, that, from the time
the States determined to shake off the shackles of despotism, the power of
granting charters of incorporation was never intended to be given to th e G en
eral Government.
Sir. those gentlemen who arc the advocates of this measure will not pretend,
that tne power to grant charters is expressly given by the constitution, and,
sir, they must be well apprised that such a power was never intended to be
given. This fact ought not to be lost sight of. Did not M r. Madison urge,
in energetic language, in 1791, on the floor of Congress, that the power to
grant charters ot incorporation was in the original plan, reported by the com
mittee to the convention among the enumerated powers delegated in the eighth
section of the first article of the constitution, but, that after three days’ delib
eration and ardent debate, it was expunged, as a power, dangerous and impro
per to be vested in the General Government? It is on remote constructive
powers, that gentlemen m ust bottom this measure; and in my mind, there
they are cut short by the 10th article of the amendment to the constitution
of the United States, where it expressly provides, that “ the powers not

v
^

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BANK OF T H E U N ITE D ST A T E S.

delegated to the U nited States by the constitution, nor prohibited by it to the
State3, are reserved to the States respectively, or to tne People.” Are not
those prohibitory words strongly and clearly expressed? Sir, I defy gentle
men to lay their finger on any clause of the constitution that would justify
the granting monopolies or exclusive privileges. No, sir, it cannot be done,
utdess they lay hold of the horrid doctrine of implication—a doctrine as
absurd as it is dangerous, particularly when you have a specific instrum ent for
your guide, and one which you have taken a solemn obligation to support invi
olate. I had hoped that the doctrine of implied powers, had long since been
exploded. Ever since the reign of terror; ever since the federal gentlemen,
under the head of constructive powers, adopted the alien and sedition laws,
the People of the United States, in whom the powers of Government right
fully rest, signified their disapprobation of the doctrine of implication, in
forcible language, by hurling tne then majority out of power. Sir, if you
subscribe to this doctrine, the barriers of your constitution are broken down;
it will ultimately become a dead letter; you will have nothing to restrain you.
B ut, say gentlemen, our predecessors have said it was constitutional; they
were men of wisdom and solemnly passed upon it as being within the pale of
the constitution. S ir, I acknowledge they were men of wisdom, and perhaps
actuated by the purest of motives: but they were men; consequently, fallible,
and liable to err; and in my mind, they aid err most egregiously. And am I
to take for granted what they have done, without examining and judging for
myself, particularly when I am acting under the solemnity of an oath? No,
sir, while I have the honor of a seat on this floor, and any measure is about to
be adopted which, in my opinion, conflicts with that instrum ent that I am
sworn to support, I will raise my voice against it, and if possible, check its
progress.
But, sir, we are gravely told, that it is expedient to renew the charter of
the Bank of the United States, inasmuch as the evils arising to Government
and individuals would be desperate on its being suft'ered to expire; therefore,
it was constitutional. Then, sir, we are to understand expediency and con
stitutionality to be synonymous term s; then, if that is the fact, the constitution
is a nullity in itself; Congress has nothing to restrain them but their judg
ment. They are fully at liberty to adopt any measure they may think proper
under the sweeping clause of providing for the common defence and general
welfare.
Sir, much confidence as I have in Congress, after witnessing the fluctua
tions and vibrations that have passed in review for several sessions past, I am
afraid your republican Government would be prostrated; your liberties would
be shortly at an end. Gentlemen talk of republicanism; they say they are
real Americans in principle, and would go any l e n g t h that was necessary in
defending our rights against oppression; and, sir, at the same time are doing
the very thing our lasting and inveterate enemy, Britain, would wish them
to do; and the very thing, if adopted, that will strengthen her power and
inevitably accelerate the dissolution of Government. W h a t did that able
statesman say, who, with some gentlemen, have been considered almost ora
cular? I mean, sir, W illiam P itt; speaking of the American policy— “ let them
adopt their funding system and go into their banking institutions, and their
independence is a mere phantom.” Sir, keep close to your chartered aufhorities, or the most direful evils await you. I f you are at liberty to tw ist that
instrum ent on which the perpetuity of your civil liberty depends, into any
shape the caprice of party may think proper, you may calculate o n your boast
ed institutions being of but short duration, i f your constitution is defective,
amend it. The manner is pointed out, and which is certainly much safer
than to slide into the dangerous doctrine of implication. I f you c a n multiply
and link together remote implications, you may, from the same parity ot rea
soning, take in every object of legislation that comes within the whole scope
of the political sphere.
Sir, it is not only astonishing, but painful, to behold gentlemen who, on for

mer occasions, were loud against the doctrine of constructive powers, now it*

ON T H E B IL L TO RENEW T H E CH A RTER OF 1791.

J83

warmest advocates. T hey come forward with the greatest ardor imaginable,
in support of a measure that has nothing in the constitution on which they can
bottom it, without laying hold of the dangerous doctrine of implication. The
federal gentlemen have the same justification for the adoption of this measure,
that they had for the adoption of the alien and sedition laws. T he doctrine
of implied powers will hold them out. But, sir, their object is to pull down
the administration and republicanism—ours to support it. T he minority is
not responsible; the majority has the whole responsibility on their shoulders;
consequently, ought to act with great circumspection. Sir, what were the
causes that produced a change of administration? W as it not constitutional
encroachments and abuses? Most unquestionably it was. And will gentle
men wantonly steer their bark against the same rock on which the former
administration split? Rest assured, sir, that the People of the United States
will not tamely look on and see their sacred bill of rights trampled under
foot. No, sir; when they discover a disposition in the public agents to fritter
away their constitution into a mere cipher, they will rise in their majesty, and,
in a constitutional way, apply the proper corrective. They will tell you,
gentlemen, that you have betrayed the trust reposed in you, by abusing the
powers delegated to you; that you must give place to more able and safer
hands to steer the national bark.
W ell, sir, as to expediency, we are told that inevitable ruin would follow a
refusal to renew the charter of the Bank of the United States, as it is impro
perly called. Pray, sir, in what way have the United States a single cent of
money or interest in this bank? Certainly none. Does she not merely lend
her name, and, by that, foster speculation? Most unquestionably she does.
For, sir, 1 can view it in no other light, than a complete system of speculation.
A system, sir, that has drained a considerable portion of your precious metals
from your country. Has there not, within less than twenty years, nearly
nineteen millions of dollars, dividends arising from this colossal bank, been
principally sent out of the country to fatten the European shareholders, who
are the principal stockholders? For, sir, I believe it will not be denied, that
about three-fourths of this ten million capital belongs to foreigners, and prin
cipally to the citizens of the island of Britain; the balance, in all probabili
ty, principally to her agents and partisans in this country: for I recollect
that, on a former occasion, a gentleman from Virginia laid a resolution on the
table for consideration, that contemplated making the shareholders known,
and that extraordinary opposition was manifested by the other side of the
House, I presume, lest the measure should become more unpopular, when
it was ascertained that nearly the whole of the capital stock belonged to
Britain and her partisans.
M r. Speaker, money is naturally calculated to command influence. Then
what must be the influence wielded by this ten millions of capital in the bosom
of our country, and held principally by our lasting and inveterate enemy?
This is one ot the engines, and no inconsiderable one, that is set to work, in
in order to overturn civil liberty, and which will, in all probability, unless
checked by timely resistance, go lengths in producing the efleet: and, sir,
from the influence it has already obtained in different sections of the Union,
and the ardent manner it is advocated, I should not be surprised, if a renewal
of the charter should take place, if it should ultim ately make its way into the
national councils. L et gentlemen reflect on the hardihood of the agents of
this bank. T hey come forward in the face of the nation, and openly oft'er to
bribe its councils with upwards of a million of dollars for the renewal of the
charter; for, sir, I may be wrong, but I can view it in no other light than as
a bribe in order to obtain the name and sanction of Government to carry on
their destructive speculations. I have no doubt but that George the 3d is a
principal stockholder in this bank; and I believe, rather than not succeed in
obtaining a renewal of the charter, that he would authorise his agent in this
country to bid up several millions; because, sir, he has never pardoned us
since our independence, and by this means he would necessarily calculate on
effectuating his nefarious purposes of overturning your Government and bring

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ing you under his power again, and which would be a much safer method than
encountering the Americans in arms: for of that he became extremely tired
when we were in a state of infancy.
But, it is said, that this bank can be of infinite serv ice to Government, in
making her deposites in, and, in case of necessity, to borrow money from, to
answer governmental purposes. Indeed, sir. if we continue temporising and
playing the losing game much longer, we will have but little to deposite—and
would it not be as safe to make the deposites in some of the State banks as in
this foreign bank? For we must be in a desperate situation, indeed, if it would
not be equally as safe to trust ourselves as to trust foreigners, and the very
ones who are oppressing us, and whose interest as well as inclination is to
oppress us in every imaginable way. And, sir, as to the obtaining of loans in
case of emergency, I would much rather be dependent on my own Govern
ment—on the citizens of my own Government, than a foreign Government or
its agents, and especially one that is at war with us; for I deem it tantamount
to war, when they are perpetually plundering our property, impressing and
ill-treating our countrymen, as well as depriving us of important inherent
rights, the liberty of the seas. This measure, perhaps, may be a conveniency
in our fiscal concerns, in the collection and transmission of revenue; but, sir,
there is no danger of the wheels of Government being stopped for it; and, sir, I
should regret extremely, if it was, as has been insinuated, that the existence
of our Government depended on foreign capital; I should regret extremely
indeed, if we held our rights, privileges, and independence, on so uncertain a
tenure. No, sir, in my mind government can be carried on equally as well
without this darling bank as with it: therefore, it is time to abandon this de
structive system. J confess, sir, that I am not very favorably disposed to
banking institutions; I view them as in direct hostility with the principles of
our Government: but if we must have banks, in the name of common sense,
let us have a bank of our own, with home capital and not foreign, and one that
w’ill not import foreign influence, (for God knows we have enough of it among
us already) and one that will not extract the wealth from your country and
export it, nor undermine the foundation of your liberty. Well, sir, on whom
is this ruin, that is spoken of in such lively colors, to fall? Why, sir, it is to
fall on a few speculating merchants, who have been so incautious as to be
come involved in debt in consequence of wishing to carry on extensive specu
lations, therefore borrowed freely of this foreign bank, the calling for which
sums would, in all probabilty, bring on bankruptcies. These are not the
people that I would make any considerable sacrifice for. They are not de
serving it. Government has already made very considerable sacrifices in
attempting to comply with their memorials and petitions respecting the pro
tection of commerce; and how have they been rewarded? Why, sir, by fly
ing in the face of authority, and trying to bring the laws of Government into
ridicule. Yet they are the few who are to be favored at the expense of the
many. But, notwithstanding their reprehensible conduct, there are respect
able exceptions: I speak of the speculator, not of the honest and fair trader.
I wish not to be considered an enemy to commerce. The reverse is the
fact. I am a friend to it to a certain extent; as an auxiliary to agriculture;
but I never wish to see it have the ascendency in Government, to sway the
national councils and give law.
But, sir, if the evils will be so great at this time on a failure to renew the
charter, what will they be at the end of twenty years, the time contemplated
to extend it? For it is reasonable to suppose, that the evil will increase in
equal ratio for twenty years to come, as it has for twenty years past. Agree
ably to this, a renewal will be tantamount to a perpetuation; for, agreeably to
the doctrine held forth by gentlemen, a failure then to renew the charter
would engulph the Government in ruin, and overturn the fabric of liberty.
Who are to be favored particularly by the continuance of this destructive
system? The speculating mercantile class, I may say, exclusively. And, sir,
it they increase in extravagance and arrogance for twenty years to come, in
equal ratio with what they have for a few years past, nothing will satisfy them

ON T H E BILL TO RENEW T H E C H A R TE R OF 1791.

|g 5

short of swaying the national councils, and giving law to Government, and
making every thing subserve to their cupidity. Sir, I hold commerce essen
tially necessary, and would go as far as reason would justify in the protection
of it, but I am for keeping it directly within the pale of reason, and not suffer
ing it to drown every thing in the whirlpool of its power.
A re not Government well aware, that this large foreign capital, in the bosom
o f our country, lias an extraordinary influence in certain sections of the
Union in our elections, the keeping which pure, oughtto be an object ol the
first magnitude? (low was it, sir, formerly, in N ew York? Did they not, in
consequence of (his moneyed aristocracy, give complete tone to the elections;
and, sir, was it checked, until Burr surreptitiously obtained the M anhattan
Bank, under the mask of watering the city, which formed a counterbalance?
A nd, when it obtains an influence in your elections, you may necessarily
calculate on its making its way into your national councils; then every thing
must bend to this monstrous speculating institution, your constitution not ex
cepted.
It will be said, 110 doubt, as I am from the W est, where banks are not com
mon, that I am unacquainted with the nature and operations of banking in stitu ,
tions. Sir, I do not pretend to go into details practically; I acknowledge, I am
unacquainted with them: my information on subjects ol this kind is principally
theoretical. B ut, sir, I am sufficiently acquainted with the nature and opera
tions of them, to convince me that they are systems of speculation, calculated
to suit the speculatory and mercantile class, at the expense of the agricultu
rists; at the expense of those who are the support and sheet anchor of your
Government? How is it, sir, when your banks break, which has been the case
in several instances, in some of the Eastern States? T he Farm er’s Exchange
Bank of Rhode Island, when it was ripped up, had but some odds of forty
dollars in its vaults. T he Berkshire, and Northampton banks, both of M as
sachusetts, when their vaults were examined, one had perhaps thirty or forty
dollars in it, the other, I believe, was entirely empty; the Coos Bank, (I be
lieve it was called) o f New Hampshire, was nearly in the same situation, and
thousands of their bills in circulation at the time. W e ll, sir, who were the
sufferers? T he note holders; the people at large? A nd, sir, as it is a system
o f speculation, when they have emitted bills to the amount of their limitation,
where they are limited they may break (as the saying is) full handed, and the
weightof the shock falls on the note holders, who are principally agicrulturists, as they compose eight-tenths of the people.
B ut, sir, the accounts of the speculations, impositions, and, I must add,
swindling and corruptions, that have been practised in the East, under the
head of banks, have reached the W est, and tne people, notwithstanding they
have, by some of the eastern gentry, been deemed scarcely in a state of civil
isation, have sympathised with their eastern friends, and had regretted that
turpitude had become so deeply rooted in the E ast, in the line of banking,
where all but exclusive civilization was claimed, and which has made them
cautiously guard against the possibility of being engulphed in a similar vortex.
B ut, sir, it gentlemen would cast their eyes emphatically over the history of
the W est, 1 expect|they would not only find civilization, but pure patriotism;
patriotism, sir, that would not fade before the sun; they would find the people
uncontannnated with foreign partialities, prejudice or influence, and where
the last torch of liberty would be held up 011 the continent, as a terror to ty
rants.
M r. Speaker, perhaps I am mistaken, but I view this measure as the greatest
test of political principle that has been on the carpet for many years back,
and if adopted, federalism, or, if gentlemen please, aristocracy, will regularly
progress, and finally obtain the ascendancy; republicanism will have to take
the back ground, and ultimately be prostrated; your boasted institutions will
only figure in the pages of history, like ancient republics, as a mournful mon
um ent of the fall of man, and a sorrowful memento of his degraded condition;
therefore, in my mind, the adoption of this measure would seem like commit
ting a most horrid treason against the principles of the constitution and civil
24

18(5

HANK O F T H E U N ITE D ST A T E S.

liberty; consequently, I consider it not only the true interest, but the bounder!
duty of every man who has any pretensions to friendship for the American
Government, or civil liberty, to assist in strangling this infant H ercules in the
cradle, or at least preventing it from coming to maturity. I f this measure was
only calculated to perpetuate the memory of its founder, I should not so
much object to it; but then I should think it unnecessary and iniproper. But,
sir, it will do more; it will further the views of federalism, by increasing their
power, and assist them in overturning the present system of government, on
the ruins of which they will calculate on raising one more congenial to their
purposes.
M r. Speaker, from my present impressions, I think it would be more advi
sable, if the British Government should not rescind their destructive measures
affecting our rights, and do us justice, rather than renew the charter of the
Bank ot the United States, as itis called, thereby furthering their views on this
country, to lay our hand on the capital sto c k ,o ra t least so muchas belongs to
citizens of the island of B ritain, in order to indemnify us in part for the da
mages we have sustained by British outrages, and, if it becomes necessary, (as
I presume it w ill) to make use of it in defraying the expenses necessary in
the subjugation of the N orth American provinces, which will have to be re
sorted to, if you wish to give peace to the land: for I have no hesitation in
saying, that, while this large foreign capital is in existence in your country,
and tne British hold their N orth American possessions, that British principles
w ill be disseminated; that federalism—if gentlemen like the term better, aris
tocracy—will regularly progress, and finally convulse your Government to its
centre. You may rest assured, sir, that if the charterof the Bank of the U nit
ed States is renewed, it will prove a powerful weapon in the hands of our
enemies, and will be calculated to rule the Government, instead of the Govern
m ent ruling itself. T hen, sir. is it not high time that the accounts of this co
lossal speculating institution should be suffered to close, by letting the char
te r expire on the 3d of March next, that we may know whether this Diana of
the Ephesians, be a goddess of solid silver, or only of clay silvered over.
Sir, much has been said about the want of capital; if gentlemen would cast,
their eyes around, and examine our resources, they m ust be fully apprised
that we have capital adequate, and beyond our wants. Then is it not time to
cu t asunder those leading strings, by which corruption has led credulity? Yes,
sir, it is not only time that we should have the name of freemen, but be so in
reality.
Sir, in justice to my own feelings, and the future prosperity of my country,
1 am bound to vote in favor of concurring with the Committee of the W hole m
striking out the first section of the bill.
M r. P ic k m a n . I acknowledge, sir, that I feel very anxious to have the char
te r of the United States Bank renewed.^ N ot from any personal interests
which I have therein— for 1 have none. N or from a regard to the interest of
the stockholders, tor I consider that very unimportant, when compared with the
interests of the Government, and of the community. T his question has ac
quired an artificial importance from the manner in which it was originally
discussed and in which it has been discussed at t his time. I t has been treated
as a great constitutional question, when, according to my view, it involves no
great constitutional principles. Ingenuity has surrounded it with a mist of
sophistry which has obscured it, and presented it to the mental eye though a
very delusive medium. 1 shall not attem pt to follow the gentleman from N.
Y. (M r. P o r t e r ) in all his nice and ingenious distinctions between the pow
ers vested in the Federal and State Governments, nor in his metaphysical re
finements on objects, ends, powers and means; but shall leave that task to
gentlemen of more industry and more talent than myself. His observations,
however, on the position laid down by the late General Hamilton, in his cele
brated argument on this subject, appear to me so extraordinary that I cannot
forbear to notice them. T he position is, that every power vested in a govern
ment, is, in its nature, sovereign, and includes, by force of the term , a right to

ON T H E IULL TO RENEW T H E C H A R TE R OF 1791.

I 37

employ all the means requisite, and fairly applicable to the attainment ot the
ends of such power, and which are not precluded by restrictions and excep
tions specified in the constitution, or not immoral, or not contrary to the es
sential ends of political society. Aud to prove that the powers of the Federal
Government, as to its objects, are sovereign, the following clause in the con
stitution is considered as desisive: “ That the constitution, and the laws of
the United States made in pursuance of it, and all treaties made or which shall
be made under their anthority, shall be the supreme law of the land.” Now
the words supreme and sovereign are synonymous terms; if there be any dif
ference, the word supreme is of the highest import, it being frequently applied
to the Almighty himself. But the gentleman from New York, (Mr. P o r t e r )
as I undertood him, observed, that the power to pass the supreme law does not
give the Government sovereign power: for the highest law which any govern
ment can pass, is a law to innict the punishment of death . The sheriff who
executes this law, said he, is not, therefore, possessed of sovereign power.
Certainly not; he is only the instrument of the sovereign power, as much so as
the axe or the halter with which he executes the sentence. But “ the Govern
ment is not sovereign because it is made to depend, in some degree, on the
State Legislatures”—if they were to omit to appoint Senators the Government
would die a natural death. If they were to neglect it they would violate their
oath to support the constitution of the United States. But, “ the sovereign
power is in the people.” The sovereign and the physical power are often con
founded together. The people, in their collective capacity, are as much bound
by the immutable rules of justice, as each one is in his individual capacity.
’I he people of the United States are under a constitutional and moral obliga
tion to support the Federal Government; and it is not proper to presume that
they will omit to do what it is their duty to do, and found an argument on such
presumption.
But, to return to the subject of the bank. If we consider, sir, what are the
purposes for which it was established, and what are the privileges with which
it is invested, we shall, I think, find, that the former are not only constitu
tional, but highly necessary, proper, and useful, and that the latter do not in
terfere with State rights. The constitution of the United States vests Con
gress with the power ‘‘to lay and collect taxes, duties,” &c.; to pay the debts
and to provide for the common defence and general welfare of the United
States; “to borrow money on the credit of the United States; to regulate
commerce with foreign nalions, and among the several States; and to make
all laws which shall be necessary and proper for carrying into execution the
foregoing powers.” It is, therefore, the right aud duty of Congress to facili
tate, and to render as certain as possible, the collection of the revenue. It is
their right and duty to provide places of safe deposite for the public moneys; it
is their duty to discharge the public engagements with punctuality and good
faith, and, if possible, to provide the means of transmitting the public moneys
from one place to another, as the public exigencies may require, without tne
risk of loss to the United States. Has not the bank answered all these highly
important and necessary purposes? Can they be so well accomplished by any
other means ? I presume not; for the ingenuity of those who oppose the re
newal of the charter—and certainly, sir, they have displayed much ingenuity—
has not suggested a plausible substitute. It is surmised that the public mo
neys may be transmitted from one part to another, in specie, which may be
carried by land, or sent by water in Government vessels; or, that it may be
done by the private drafts of merchants. The objections to these modes are
too obvious to render it necessary to enumerate them. It is sufficient to say,
that each of them would subject the United States to frequent losses, and the
Government to constant disappointment. But, it is thought, by many, that
the fiscal concerns of (lie Government may be conducted through the instru
mentality of the State banks; and, in fact, it is the interest of the State banks
which excites much of the opposition to the renewal of the charter of the Unit
ed States Bank. In my opinion, however, it is an erroneous view of their
interest. I apprehend that many of them will sustain a shock from the sup

188

BANK

o r THE UNITED ST A TE S.

pression of this institution, from which they will never recover. How can
the public business now done by the United States Bank, be executed by the
S tate banks ? Congress have no control over them; are ignorant of their
funds; unacquaintecl with the conditions on which they are granted, and of
the principles by which they are governed. Some of them are undoubtedly
entitled to confidence, but many of them are not. I t would be imposing on
the Secretary of the Treasury an invidious task, and a most unpleasant re
sponsibility, to make a selection. In every view which I can take of the
subject, it appears to me that it would be the height of imprudence and indis
cretion to suppress the Bank of the United States, and deposite public moneys
in the State banks. If, however, the privileges conferred, and necessarily
conferred, on the U nited States Bank, are. unconstitutional, then it is our
duty to suppress it. L et us candidly consider what these privileges are. The
reatest, in my opinion, is, that its bills are receivable for duties. I do not
now that any one has pretended that Congress transcended their powers in
conferring this privilege. I t is this, however, and this only, which gives its
bills a circulation throughout the United States; it is this which enables it to
transm it large sums from one extreme of the Union to the other, as the exi
gencies of the Government require; nor do I see how this necessary privilege
could be conferred on the State banks. Certainly it would not be sate to give
it to all of them ; and if you were to select a few, it would excite the most se
rious discontents. Besides, it is necessary that the banks between which this
intercourse is to subsist, as that of drawing upon each other, should have a
common parent to regulate their aftairs, and to secure them from ruin from
unexpected, and, of course, unprepared for, drafts. I t i s necessary, in fact,
that there should be such an institution as the United States B ank; and the
only question is, how shall it be established? By the State Legislatures,
or the Federal Government ? B ut, it is said that the establishment ot branches
in the different States, is a violation of the State sovereignties; and the gen
tleman from N ew Y ork, (M r. P o r t e r ) says it is so because the States have
laws against usury, and that the bank makes more than lawful interest upon
their capital, anti thereby violates the laws of the States. This objection ap
plies to all banks. Now, so far are the banks from having practised or en
couraged usury, the suppression of it may be considered as one of the best ef
fects of their establishment. T he United States Bank is restrained by their
charter from letting their money at a rate exceeding six per cent.; and I be
lieve that this is not usury in any of the States; in some of them the legal rate
of interest is higher. T heir profits, over six per cent., are what they make
as bankers and not as money lenders. It is said to violate the State laws,
because the persons and private property of the stockholders are not responsi
ble for the payment of its notes. T his is the case with every artificial person;
he is not accountable, in his private capacity, for the notes which he gives, or
the contracts which he makes, as such. T he stockholders of the bank may be
considered as public agents, and, as such, it would not be reasonable to sub
je ct their private fortunes to the payment of its debts, unless they abuse the
tru st reposed in them. Such a responsibility would render it impossible to
establish the institution; nor is it necessary for the public security: for, it is
next to impossible for a bank with such funds to become insolvent, if its aftairs
are honestly and judiciously managed; if they are otherwise, no guards will
afford security to the public.
I t appears to be thought by many, that, because the State Governments
have a right to incorporate banks, therefore the United States’ Government
has not the right. Now, it is an implied power in the State Governments; for
there is no such power expressly delegated to them in any of the State con
stitutions; they assume the right, because it is not prohibited to them. Upon
the same principles has the U nited States’ Government the l ight to establish
a bank, provided it be necessary to the accomplishment of tne purposes for
which the Government was instituted. I again inquire, M r. Speaker, if the
fiscal operations of the Federal Government do not require such an institu
tion? H as not the experience of twenty years fully evinced its utility to Go

ON T H E B IL L TO RENEW T H E C H A R TE R OF 1791.

189

vernment? Have not the public moneys been safely kept ? Have not large
sums been continually transm itted from one place to another,^ as the public
exigencies have required, and without any loss to the United States ? AVhy
then suffer an institution, which has done so much good, which has proved so
safe and so useful, to run down, and trust to precarious and unpromising sub
stitutes ? But, while I am anxious to have the charter of this bank renewed,
from a full conviction that the fiscal concerns of the Government cannot be
managed with convenience, or safety, in any other way, I feel infinitely more
anxious that it should not be suppressed at this time, on account of the commu
nity at large. Such an event must, in my opinion, be productive of the most
distressing consequences. Perhaps there has never been a period when our
merchants were more embarrassed than they arc at present, and when it was
more difficult to raise money. They have large funds in England, but at pre
sent there is no demand for exchange upon that country. T hey have large
quantities of imported merchandise, Dut the prices of most articles are merely
nominal. T he bank has seventeen millions of dollars due to it from the U nit
ed States and individuals; it has to the amount of five millions of dollars in
gold and silver in its vaults: there is due to it, from the State banks, about
two millions of dollars, on their bills, and on deposites. I t owes about four
teen millions of dollars, payable on dem and; and it will probably be very soon
called upon for this money. To fulfil its own engagements, therefore, it must
immediately call for seven millions of its debts, and, within a short period,
for the remaining ten millions, and this last sum must, eventually, be paid in
specie. W hence is this specie to come ? From the vaults of the State banks,
it it be there: for the payments to the United States Bank will be in bills of
the State banks; these bills will be immediately sent to those banks to be ex
changed for specie. T hus they, instead of having it in their power to aid the
debtors to the United States Bank, as some erroneously suppose, will be oblig
ed to call on their own debtors, and every specie dollar taken from a bank,
may, and probably will, oblige it to call for two or three dollars of its debts.
I t does not appear to me unreasonable to suppose, that, by compelling the
United States Bank to call in the seventeen millions of dollars due to it, we
shall compel the State banks to call in as large, if not a larger sum. IIow
these payments are to be made, and what effects are to result from such a
state of things, I pretend not, sir, to sufficient discernment to foresee. I t will
probably produce a general suspension of the payment of debts, and an almost
total stagnation of business; it will greatly depreciate the value of every spe
cies of property, and thereby reduce many persons to insolvency, who flatter
themselves that they have much more than enough to pay their debts. I t will
raise an enormous demand for money, and, of course, throw many persons
into the hands of the griping usurer. I t will distress all classes of people ex
cept the moneyed capitalist. If, in addition to this measure, our non-importa
tion act should go into effect, thousands must be overwhelmed by ruin; the
shock may first be felt in the seaport towns, but will ultimately extend to the
remotest villages in the country. I deem it, sir, a very unfortunate circum
stance, that our paper circulating medium so greatly exceeds the amount of
our specie; that so large a portion of it is the representative of lands, houses,
and merchandise, instead of being the representative of gold and silver. But
this is not the fault of the Federal Government; it is owing to the numerous
banks which have been instituted by the State Governments. This furnishes,
to my m ind, a strong argument against the institution of banks by the States,
and in favor of the power being vested in the Federal Government, which su
perintends the affairs of the United States. As I have before observed, our
paper circulating medium dangerously exceeds our specie; should we adopt a
m easure which will affect its credit, it will produce consequences which none
o f us can foresee. On the one hand, by continuing the bank, we tread upon
perfectly Safe ground; tw enty years experience of it has proved that it is cal
culated to answer all the purposes for which it was established; it has proved
very useful to our merchants, and to the community at large, not only by fur
nishing loans, but, also, by supplying a medium which circulates throughout

190

BANK OF T H E U N ITED ST A T E S.

the United States, and thereby renders it much easier for the merchant of
the Northern States to purchase the productions of the Southern States. It
may be truly said, that it has aided the agriculture, the commerce, and the
manufactures of our country; its affairs have, generally, if not uniformly, been
conducted with fidelity and ability. Yet we are about to suffer this valuable
institution to fall; we shall thereby compel the Secretary of the Treasury to
have recourse to untried, troublesome, and hazardous expedients, for the
management of our finances, and we shall probably lead many of our fellowcitizens into ruinous speculations. It is absurd, after the experience we have
had, to ascribe to it any great political influence: it was established by the
federal republicans when they were the ruling party; it has always been un
der their management. Yet, with this monstrous engine in their hands—this
engine which is to govern the Government—their political opponents have
gained an absolute and uncontrolable ascendency. Continue it, sir, and you
will probably do much good; suppress it, and you may bring on incalculable
evils.
Mr. \ V . A l s t o n said, that the motion to strike out the first section, was
undoubtedly a fair way of attacking the principle of the bill; but as the same
motive, even if he did hereafter vote against the bill, would not govern him as
it had other gentlemen, he begged leave to state the reasons why he should
vote against the motion. It has been contended (said he) by gentlemen who
have gone before me in this debate, that the constitution did not authorize
Congress to continue this charter, or to have created it, in the first instance.
I am opposed to this doctrine of the restriction of our powers, because I be
lieve, if practised upon to the extent that gentlemen of great talents contend,
the Government itself cannot get along. I do not believe that gentlemen can
put their finger on the constitution, and show their authority for a number of
acts which we are compelled to pass, any more than they can put their finger
on the particular passage which authorizes the granting this charter.
Sir, we are met on the threshold of this question, by tbe gentleman from
Virginia, (Mr. B u r w e i .l ) on constitutional grounds; and I will take the ar
gument of that gentleman alone, and I think can prove, that he himself has
given up the consitutional question. In the clause which many gentlemen
have called the sweeping clause in the constitution, I find these words: “ Con
gress shall have power to make all laws necessary and proper for carrying
into execution the foregoing powei'3, and all other powers vested by this con
stitution in the Government of the United States, or in any department or
office thereof.” The gentleman, well satisfied that this clause confers the
power, attaches to it, to make it the more important, the word “ absolutely,”
before he is able to give any weight to the construction for which he contends.
I have examined the constitution over and over again, for the word absolutely,
and can find no such word. Where then does the gentleman get it from, but
from the very same source that he charges on the favorers of the constitutional
right to pass the law? It is by implication, that he calls in the aid of the word
absolutely before necessary. With what propriety, then, can he refuse to
others the exercise of the same right that he himself has taken? If gentlemen
have the right to interpolate this word, why may we not as well interpolate
others? It is denied that the doctrine of implication can apply with respect to
granting charters. If it can apply in any way, why not in this way? If I can
show to the House that it might apply in some cases, or it will be impossible
that you can execute the object of the constitution, why may it not as well
apply in the case of granting charters, as in any other. I ask gentlemen to
put their finger on the clause of the constitution, which authorizes them to
pay away one cent of the public money? How do they get at the power, but
by implication? You have a power by the constitution, to pay the debts of the
United States—but that part which provides for the payment of debts, means
debts already contracted, and owing at the time of the adoption of die consti
tution; that too is in the sweeping clause, which gentlemen will certainly not
avail themselves of. But you have not the power expressly given, to create a

ON THE BILL TO RENEW TH E CH ARTER OF 1791.

debt, other than the clause which authorizes you to borrow money 011 the credit
of the United States; but none will contend, that, by this you are authorized to
make contracts, and go in debt. T here is an important clause of the consti
tution, which gives to the United States power to call out the militia of the
States for particular purposes. Show me the spot in the constitution which
authorizes the payment of the militia. N ot one. The power to call them
out, implies the power to pay them. I t inevitably follows, that the power to
lay and collect taxes and raise a revenue, implies the power to take care of it.
'Will gentlemen pretend to deny it? W hat is the argument of gentlemen on
this point? They say it is true, that a bank is necessary for the safe keeping
and paying the debts of the United States; but, say they, tks banks ot all the
States are open to you. How does this doctrine apply to the United States?
Have not the States themselves denied the connexion of the State and F ede
ral Governments? Can 1 quote a State which docs not afford an example of
this disposition? T he seat of a gentleman of high standing in the Legislature of
Virginia, was vacated merely because he was a contractor for carrying the
mail. W ill then the State of Virginia, who is so jealous of your influence
over her officers, permit you to exercise that influence, by placing your mo
ney under officers created by her? L et gentlemen examine this questionThe argument will not bear them out. In the State which I represent, also, a
law has been passed, to prevent a person from holding any office or appoint
ment at the same time, under the State and Federal Governments. W h at
right have the directors in a State bank, appointed by the State, to contract
with the General Government to keep its money? I deny their right.
Putting the State banks out of the question, it is necessary that we should
create means by which we can transfer the money of the Government without
expense, hazard, or joss? I will state a case. W e have an army in the city
of New Orleans, which m ust be paid. By paying the money at Baltimore or
Philadelphia, it is transferred to the paymaster at N ew Orleans, without cost
ing you a cent. Is not this convenient expedient necessary to comply with
the interest of the United States in the case 1 have stated? I do not believe
it possible, taking the ground that they have a right to place money in the
banks of the individual States, that such a connexion between them could
ever be established as with the same ease, convenience, and safety, as at pre
sent, to pay in the different parts of the Union money which the United States
are bound to pay. I ask the question—W ill a bank in North Carolina tru st
a bank in N ew Hampshire? N o; but the State and every individual in it,
would trust the Bank of the United States. You could not establish a con
nexion between N orth Carolina and N ew Hampshire, so that either would
tru st the other. The establishment of the Bank of the United States, affords
in this case, a facility useful and absolutely necessary, in my opinion, to carry
on the measures of Government. How will putting down the Bank of the
United States, have an effect to lessen the quantity of paper in circulation?
I f I could think so? I would join the gentleman most seriously; but the very i
contrary, in my opinion, would be the effect. T he Bank of the United States >
and its paper, serves as a controlling pow'er, keeps the State banks in proper
bounds; and prevents them from issuing a vast quantity of paper, which would
inundate the country. T hey are very confident if they issue too much paper,
th at there will be a run upon them; because the interest of the United States
Bank and the State banks, do not at all times go hand in hand. A t this time
it certainly restrains the circulation of State bank paper.
It is said, sir, that the States are not compelled to do particular acts which
they are required to do. T o be sure, the States have the physical power, but
they are bound by the same solemn oath to carry into effect the constitution
o f the United States, that the members of this House are. It may as well be
said, that the State Legislatures may, if they choose, refuse to appoint electors
to vote for President and V ice-President, or elect Senators; but the obligation
upon them is as strong as upon any other departm ent of the Government, as
it is upon the members of this House, to perform its duties. T hey have taken
a solemn oath, and must perforin its obligations.

IQ 2

BANK OF T H E U N ITE D ST A T E S.

Sir, there is one part of this constitution, which, in my humble opinion,
gives the power completely. I t is a part of the constitution which 1 never
heard any gentleman mention, nor any w riter on the subject. I may put an
erroneous construction on it; but if I am correct, the conclusion is inevitable.
In the 10 th section of the first article, it is saiil, “ N o State shall coin money,
em it bills of credit, or make any thing but gold and silver coin, a tender in
payment of debts;” and the interpretation which 1 give to it is, that the United
States possess the power to make any thing besides gold and silver, a legal
tender.
I f this, then, be the correct construction, it is a clause which I have never
before heard relied on. If, what I conceive to be the fair interpretation, be
adm itted, it must follow, that they have a right to make bank paper a tender.
Much more, then, sir, have they the power of causing it to be received by them
selves in payment of taxes. It they have power to make paper of any descrip
tion whatever, receivable in payment of all debts whatever, can anyone deny
that they have a power to make it a tender in payment of taxes or debts to
the United States? A fter admitting the power, will you place the exercise
of it in your Secretary of the T reasury, or in the hands of fifteen or twenty
men whom you call directors? B ut 1 might not have voted against concur
ring with the committee in striking out the first section of the bill, if J stood
on this ground alone.
T o the bill in its present shape, I should have no hesitation in giving a de
cided negative; but there is a plan on which I would vote for the renewal.
Sir, I ask gentlemen who have voted against it on constitutional ground, to
meet me on this point—the plan is, that the additional stock shall be taken
wholly by the United States; that they shall be bound to distribute it among
the individual Slates, having respect to their relative numbers, at its par
value. T he States would take it if they think proper; if taken, there is an
end to the violation of State rights. In a plan of this kind, a distinction is
brought to the mind of every man, whether he will prefer the interest of the
great body of those people who are represented in the State Legislature, or
whether he will support the interest of a few who think proper to incorporate
themselves for the support of a bank. The true question is, whether the emo
luments of the banking system should belong exclusively to a few, or collec
tively to the whole United States. I therefore hope, the first section will not
be stricken out. In discussing the detail, such a plan would be more interest
ing than any other can be to the States. T he advantages of such a system
must be seen. T he anxiety evinced for the renewal of this charter, and the
credit of the State banks altogether, in consequence of the money made by
the banking system, is then done away. T he money arising from the profit
of the banks will belong to the States in their individual capacity, and the
taxes of every individual lessened in proportion to its share of the capital.
L e t gentlemen bring the question home to them; let them examine how it
concerns their constituents, and put the question which of the two will in
terest the great body of the people the most.
P utting down the charter of the United States Bank, will not put an end
to the banking system. Cast your eyes about you at w hat has taken place at
the last sessionsof the State Legislatures? Has one of them adjourned without
establishing a bank? I t is bank paper as much when issuing from State banks
as when from the Bank of the United States. T here is no sort of difference.
If this question had not been attacked on constitutional ground; if it had been
left merely to expediency, I should not have troubled the House on the sub
ject. I know too little of the concerns of a bank to think of making a speech
on the details alone. But I know how much interest moves us on this ques
tion. W hen you place money in the State banks, you give a complete license
to the State banks to issue what they please. What was the loss of paper
money during our revolution? Did it not fall on those who had given creclit?
And are we prepared to meet such a shock as that? Could we have stood it in
any other cause than that in which we were engaged? H ere let me enter my
protest against the banking system altogether; but we have it. Is not the
consequence more dangerous—will not the loss ultimately be greater, to let

ON THE B IL L TO RENEW T H E CH A.RTF.R OF 1791.

J93

the State banks issue paper at will , than to control them by the Bank of the
United States.?
If the doctrine which gentlemen advance, about putting the finger on that
art of the constitution which gives power to carry on the Government itself,
e true, we may as well quit legislation altogether. You cannot go a single
step without calling in the aid of implication. When a means is necessary
and expedient; when the operations of Government cannot as well be carried
on in any other way as by it, then it is necessary, and, being necessary, is
■constitutional,

Mr. K e y . Mr, Speaker: This House, in Committee of the Whole, having
struck out the first section of the bill in relation to the charter of the Bank of
the United States, and thereby defeated the bill; and this House being called
upon to concur with or reject the vote of the committee, a question ot the ut
most magnitude and importance is presented to our consideration. Few sub
jects more deeply affect the welfare and prosperity of our country, and none
deserves a more calm and temperate investigation. I shall not attempt to ex
cite the feelings of the House by painting the scenes of distress that will proba
bly flow from a non-renewal of the charter; but address myself entirely to
your understandings.
All parties seem to concur in the utility and convenience of the bank to aid
the collection and payment of our taxes and revenue, to safe keep the amount,
and distribute it when wanted. But many deny that we have, under the con
stitution, a right to incorporate a bank even for such purposes. I have listened
with pleasure to the arguments urged by those who deny the right, and have
weighed them with attention, and soliciting the same indulgence from them in
return, I do not despair of producing conviction.
I shall contend, that we have a right to create a national bank, and that it
is our duty to do so, to avoid the general calamity that will result to the
country, if we fail to do it. I beg of gentlemen to take the constitution in
their hands, and follow me, step by step, while I demonstrate the existence of
the right.
The eighth section of the first article of the constitution, contains the grant
of powers given to Congress, to enable it to conduct the affairs of the Union.
The powers given are enumerated and specified, being eighteen in number.
In the first we find these words: “ The Congress shall nave power to lay and
collect taxes, duties, imposts and excises, to pay the debts and provide for the
common defence and general welfare of the Lrnited States; but all duties, im
posts and excises, shall be uniform throughout the United States.” These
words "ive to the United States, a definite, explicit power, “ to lay and collect
taxes, duties, imposts,” &c.—the only qualification of the power is, that the
duties and imposts, not the taxes, shall be uniform. The eighteenth enume
rated power is, “ for Congress to make all laws which shall be necessary and
proper for carrying into execution the foregoing powers,” &c.
The powers thus given to Congress are sovereign in their nature, and ex
plicit in their terms of grant; but the jealousy ana provident wisdom of the
framers of the constitution, knowing that the power might be abused in its
exercise, have, in the ninth section of the first article, enumerated seven spe
cific limitations or restrictions of the powers previously given. The grant of
power is in affirmative terms; the restrictions are in negative terms.
The general grant of power, “ to lay and collect taxes and imposts,” &c.
given in the eighth section, is thus restricted in the ninth: “ No capitation or
other direct tax, shall be laid, unless in proportion to the census,” &c.
Secondly, “ No tax or duty shall be laid on articles exported from any State.”
It is a sound rule of construction, and is founded in common sense as well as
wisdom, that, where a grant creates a general power, aud enumerates excep
tions to its exercise, the expression and enumeration of those exceptions,
operate to exclude all others; because, having exceptions in view, and naving
specified some, it demonstrates that if others had been intended, they would
also have been expressed. This rule is so true, that it has long been a maxim
25

19 4

BANK OF THE UNITED ST A TE S.

that, ‘‘ Expressio unuis est exclitsio alterius,” and govern!' the construction 1
of all grants and instalments in public or in private lire. I am then warranted
in saying, that the grant of power “ to lay and collect taxes and imposts, &c.
provided the latter are uniform,” is fettered or restricted by no other limita
tion than the two above expressed in the ninth section; and it follows, that we
can make any laws necessary and proper to lay taxes, if we do not violate the
restrictions interdicting us from laying a tax on? exports, and a capitation tax
contrary to the proportion of the census.
M r. Speaker, an honorable gentleman from Virginia, on the constitutional
question, limits the power of Congress, by what 1 call an interpolation in the
constitution. T he words of that instrument expressly give Congress the
power “ to lay and collect taxes,” and “ to make all laws necessary and pro
per to carry those powers into effect;” but the honorable gentleman adds, that
necessary,” means indispensably necessary. T o this, I answer, that the
word indispensable is not used in the constitution; the words used are, ne
cessary and proper. The error into which that gentleman and an honorable
member from N ew York have fallen, is a want of precise meaning of the terms
they use, or rather confounding two things,.in their nature essentially differ
ent. They confound the means or mode by which an end is attained, with
the end itself, and nothing can be more erroneous. The end, or power given,
is to lay and collect taxes and pay the public debts; the power to make laws
necessary and proper to effect that end, is also given, and consists in devising
and establishing the means of accomplishing it. The means to accomplish the
end are no where restricted. A ll the restrictions are upon the power. The
means or mode by which the collection is to be effected, is left to the wisdom
and discretion of Congress making all necessary and proper laws for that pur
pose. I lay down this proposition as universally tru e, that where a power is
given to do a particular act, as “ to lav and collect taxes and pay the public
debt,” that it necessarily results that the party to do the act, may do it by any
mode or means he pleases, (if more means than one exist) if such mode or
means are not prohibited; and I further state, that the party in executing the
power, is imperatively bound to use the means best adapted to accomplish the
end. If. then, which seems generally adm itted, a bank is useful and neces
sary in the collection of taxes aud imposts and payment of the public debt,
and is the best mode of effecting it, the creation of a bank for such purposes
is definitely within the power ot Congress. And more; it is the bounden duty
of Congress to establish it; because they are bound to adopt the best practica
ble, or, in other words, necessary and proper means to collect the tax and
imposts.
i f more means than one exist to carry a power into effect, neither can be
said to be indispensably necessary, because either may be adopted to the ex
clusion of the other; and this mode of reasoning, pushed far, proves, that,
where more means than one exist to execute a power, the power is a deail
letter.
T hat the creation of a bank, is a means to excite a given power, and not the
power itself, will follow from a careful view of the subject. H ere my oppo
nents and myself are precisely at issue. They say the creation of the bank
is a power not given by the constitution. I state it to be a means of executing
a power given, and not the power itself. L et sound reasoning test our prin
ciples: what is a power, but an authority to attain a given end? W h a t is the
power given in this case? L et the constitution speak for itself: “ to lay and
collect taxes, imposts,” &c. and pay the public debts. N ow , the power and
the end are express, definite, and precise: there is but one power and one end;
human ingenuity can make no more out of the words of the constitution; but
there are many means by which the power may be executed, by which the end
may be attained, and those means are vested in Congress, by the power ex
pressly given them “ to make all laws necessary and proper to execute the
powers before enum erated.”
Congress is a body politic and incorporeal, and m ust use some agency or
means to carry a power into effect. T o do it in this instance by the agency

ON THF. B IL L TO RENEW T IIE C H A R TE R OF 1791.

I95

of a bank, is one means; to do it by the appointment of officers to collect the
taxes, is another; to make the debtors themselves pay into the treasury, is a
third. Now is it not an equal exercise of power, to create and appoint officers
to collect, preserve and pay away public money, as to create a bank for that
purpose? The power is the same, though exercised in a different way; but the
mode o f its exercise does not affect the nature or essence of the power. T his is
most clear; and I ask gentlemen, in the sense they use the word power, where
is the express power in the constitution, to appoint and pay officers to collect
taxes? Certainly it grow's out of the power “ to make all laws necessary and
proper,” &c. and is 110 where else to be found; then the necessary conse
quence is, that the creation of a bank, or the creation of officers, to colject
taxes and imposts, &c. is not a constitutional question, but of sound discretion,
as most suitable to promote the public good, and the House has power to adopt
either, as in their judgm ent shall be found most necessary and proper.
Now, for the great objects of economy in collection, sqfety in keeping, and
fa cility o f paying it away, as, and where the exigencies of Government require,
a bank has a decided preference over the appointment of a m ultitude of offi
cers, with salaries or commissions, the cnance of negligence, the risk of
loss, and almost insuperable difficulty and embarrassment of transmission,
at home or abroad.
I trust, Mr. Speaker, that I have shown, that, correctly viewed, the crea
tion of a bank is a means, not an original power; that, as a means, it is best
adapted to the end or execution of the power; and that, to attain the end, a
full, express, definite grant of power is given by the constitution. B ut, sir, I
ask, is our Government never to settle down to stability, an object so desira
ble and so important to the happiness of the People? If, from the inexplicit
ness or imperfection of language, doubts have existed, which have been d e
cided by tne concurrence ol this House, the Senate, and the illustrious W ash
ington, in the exercise of their constitutional functions, and twenty years last
past have exhibited a practical commentary on the constitution, ought we not
now to regard it as sacred?
Has not Congress, and have not all the States, sanctioned the legitimacy of
the bank, by passing penal laws against counterfeiters of its paperr Have not
many of the judiciaries inflicted imprisonment and deprivation of liberty, on
offenders under those laws; and are we now to be tola, that the original law
which induced all these punishments, is unconstitutional, and of course, no
law? But, sir, I will not repose my argument on the fact of long acquies
cence in the States, nor of acquiescence under the adm inistration, of W ash
ington, Adams, Jefferson and Madison; I will advance a step further, and
show that this House, under the ad ministration of M r. Jefferson, and that M r.
Jefferson himself, did, under his own hand, acknowledge the legitimacy, and
consequently the constitutionality, of the bank. In 1801, M r. Nicholson, of
Maryland, made a report, authorizing the Bank of the United States to estab
lish an office of discount and deposite at New Orleans; a bill was drawn, it
passed this House, it passed the Senate, and was signed by President Jeffer
son the day it was presented to him. It was entitled, “ An act supplementa
ry to the act, entitled A 11 act to incorporate the subscribers to the Bank of
the United States.” H ere let us pause; it is really ludicrous, sir, to see the
gravity and wisdom of the nation, engaged in passing a supplement to an un
constitutional law. One would suppose, sir, that if the original law was
brought into view, if deemed unconstitutional, the object of bringing it into
view would be to repeal it; but what was the fact? W hy, the very reverse
took place; instead of repealing it, they enlarged the powers of the bank.
Now, sir, I call on honorable men to answer me with precision; to meet two
questions in the teeth: First, W as it not as unconstitutional to enlarge the
powers of the bank, as originally to create it? Second, Is not the enlargement,
so far as it goes, a new creation of power? Gentlemen cannot escape from
these questions, by saying, that the bank had this power before the act of 1804.
I deny it; but for the sake of argument, be it so? Then 1 ask, why was that
supplement passed? And was not the passage of (he supplement a direct af

ig g

BANK OF TH E UNITED STA TE S.

firmative recognition ot' the power, if already in the bank, and to give it to
them, if they Rad it not.
S ir, I will trouble the House no longer on this part of the subject. I trust 1
have satisfied gentlemen that we have authority to create a bank under the
constitution; that this authority has been acted on by federal and republi
can adm inistrations: and the United States and the States have acquiesced
in it, and sanctioned it many years, without murmur or remonstrance.
M r. K e y th e n p ro ceed ed to e x a m in e th e q u estio n o n th e g ro u n d o f e x
p e d ie n c y , & c .*
J a n u a r y 2 1 , 1811.

M r. N e w t o n moved to postpone indefinitely, the further consideration of
the bill, but withdrew his motion until more members should come in.
M r. G a r l a n d said, that on this very important subject, the House ought
to act understandingly and prudently. H e wished that they should not pre
cipitate the Government into difficulties, from which it would not be easy to
extricate themselves. He wished at least, that they should take a little time
to reflect: that his friend from Virginia (M r. Love) should be permitted to
go on, and take out his letters of administration, as proposed on Saturday,
and see what could be done. I f the gentleman could show that the Govern
m ent could conveniently carry on its fiscal operations without the bank, Mr.
G. said he should be ready to go with lSm. B ut, until that were shown, he
did not wish a decision precipitated. H e, therefore, moved to postpone the
further consideration of tlie bill till the first of February. T here would in the
interim , be time to see how they could form their plans, and how they would
be able to conduct the fiscal operations of the Government. I f a suitable
substitute could be offered for the purposes of collecting and transferring
revenue, it would be the means of reconciling many gentlemen to vote against
the bank. He hoped, therefore, that the postponement would be agreed to.
M r. N e w t o n said the House had had ample time for reflection on the sub
je ct. He did not believe that any alteration would be w'rought in the opinions
of members by a postponement.
Gentlemen ought to recollect that the subject had been under consideration
for three or four years past. Every one had revolved it in his mind. Sir,
said M r. N ., I know these moneyed institutions. I know what sort of things
they are; and after the time we have had to consider the subject, I think it
all important, that we should come to a decisive determination. L et me tell
you, sir, that intrigue and artifice will wear away the best principles. Ample
time has been given for it already.
I am for laying the legislative axe at the root of the evil: I am for imme
diately deciding this question, and turning to some other business, and for this
purpose, move that the further consideration of the bill be indefinitely post
poned.
The motion of M r. N

ew ton

su p e rse d e d

that of M r. G a r l a n d .

M r. L o v e said he rose principally, at this time, to ask for the yeas and
nays on this question- H e thought with the gentleman last up, that it was
highly im portant that there should be an immediate decision, and he would
add to the reasons already offered in favor of it another. I t is now three
years, said he, since Congress w erecajled upon, in the most imperative terms,
to act upon this subject. In the petition o f the stockholders, three years ago,
it will be recollected, that it was stated that, unless a certain assurance was
given, that the charter would be renewed, they m ust immediately commence a
curtailm ent of their discounts, &c. W e have now progressed to within six
weeks of the time when this institution will cease to exist; and, yet, we find,
by an inspection of tbeir accounts, that they stand very nearly in the situa
tion in which they were at the time the subject was first brought before Con* T he rem ainder of Mr. K m ’s speech does not appear to have been published.

ON T H E BILL TO RENEW T H E C H A R TE R OF 1791.

J 97

cress. I f this company were not to have their charter renewed, the sooner
they know it the better. On the part of the Government, it is important that
an early decision should be had, that they may not run the risk of losing
revenue to an immense amount; for, who knew who was to adm inister on the
assets of this institution? In consequence of the law now in existence, re
quiring deposites to be made in the Bank of the United States, and its branches,
there would soon be within their control, in specie and bonds, an amount
of sixteen millions of dollars of the public property. U nder present circum
stances, it is highly proper that immediate measures should be taken to with
draw these deposites. Every gentleman, belore this time, m ust have had an
opportunity to make up his mind; and I hope the question will be decided
without further delay. As the mind of no gentleman in the House could be
changed by a discussion, it is to be hoped that the question will immediately
be taken.
M r. T r o u p conceived the motion now made to be perfectly proper. He
felt, however, under no obligation to accommodate the bank. The act grant
ing an act of incorporation was entirely a voluntary act, and the duration of
it limited in the act itself, to a term of twenty years. I f the bank had acted
the part of an ordinary or discreet m erchant,it would have taken care,before
the expiration of its charter, to have wound up its business, anti be prepared
to meet the event; because, the Legislature was not bound to renew it, not
having, either by the original charter, or by any subsequent act, given any
pledge, that it would do so. The bank not having received any pledge of re
newal, ought to have been prepared for its dissolution. I f the institution had
done what they ought to have done, the Government, so far as it is concerned,
would have prepared itself against the event, as he was told it was now about
to do, by substituting arrangements with the State banks, for arrangements
with the United States Bank, or its branches. M r. T . could, therefore, see
no difficulty in assenting to this proposition, whether as respected the Go
vernment, or as respected the individuals concerned in the bank.
M r. F isk inquired whether it was understood that the deposites in the United
States Bank would be transferred to the State banks without the sanction of
law.
M r. W r ig h t sp o k e a t le n g th on the p r in c ip le s o f th e b ill, an d in favor
in d e fin ite p o stp o n e m e n t.

Mr. B o y d sp o k e in favor o f th e m otion .
M r. M c K e e fo llo w e d in r e p ly , a n d a g a in st th e p op osed p o stp o n e m e n t.

M r. B a r r y sp o k e a t le n g th on th e c o n stitu tio n a l q u e stio n , an d in favor o f
in d e fin ite p o stp o n e m e n t.
M r. F in d l e y sp o k e a g a in st th e m o tio n .
M r. W r i g h t . M r. Speaker: T he importance of this subject, and the great
attentionjthat has been paid to gentlemen while delivering their opinions upon
it, is a sure guarantee that I, also, in my turn, shall receive the attention of
this House, while I deliver my sentiments. 1 pledge myself, in this exhaust
ed state of the debate, not to consume more of their time than a correct sense
of duty to my constituents shall impose.
T his subject, sir, is presented to our consideration in a two-fold point of
view: as to its constitutionality, and as to its expediency. I will, therefore,
proceed to consider it in that order.
On the point of its constitutionality I shall take the liberty to recal your a t
tention to those parts of the constitution on which its advocates have seem
ed to rely. T he gentleman from M aryland (M r. K e y ) cites the 1st article,
8 th section, “ Congress have a right to lay and collect taxes, imposts, d u
ties, and excises, to pay the debts, and provide for the general defence and

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BANK OF T H E U N ITED ST A T E S.

common welfare of the United States.” He also read the 1st art. 9th section,
“ N o capitation, or other direct tax shall be laid, unless in proportion to the
census or enumeration herein before directed to be taken.” However, not
yet himself satisfied with being able to derive an authority from these sections,
lie calls in aid the last paragraph of the section, “ Congress shall have power
to make all laws necessary and proper for carrying into execution the fore
goin g powers, and all other powers vested by this constitution in the Govern
ment of the United States, or in any department or officer thereof.” The
gentleman insists, that the power to lay and collect taxes, &c. &c. and the
sweeping clause empowering Congress to make all laws necessary to carry
that power into execution, will authorize Congress to grant a charter to this
bank; that it is necessary to the collection of taxes, that Congress provide by
law the means whereby the taxes should be paid. I had always presumed
that the power to lay and collect taxes, to provide for the general defence and
common welfare, only authorized Congress, under the limitations of the con
stitution, to provide by law for those purposes, by directing whether the tax
should be a direct or an indirect tax, or by capitation; and that their powers
extended no further than the specification of the objects, if the tax was di
rect, and the rate at which the specific articles should be valued:“in the case
of a capitation, what should be paid by the head; and, in the case of indirect
taxes, what should be the duty on the several articles taxed; and, in either
case, to direct the mode of ascertaining and collecting the same; by whom to be
ascertained, and by whom collected, and to whom paid. But I never did
suppose that this power, even aided by the sweeping clause, could be conceiv
ed, seriously, to extend to the providing means to those who had to pay the
tax, whereby they were to be aided in the payment. Such a construction
would as well justify the passing a law, compelling the culture of land in a
particular way, whereby the crops might be increased; as the farmer cannot
pay his tax, unless he raises produce for sale; or, indeed, it might be extend
ed to compel him to use plaister of Paris to improve his crop, and facilitate
the payment; which I should deny, even if the tax was made payable in pro
duce.
The same gentleman seems to have relied on the article, “ T h at no capita
tion, or other direct tax should be laid, but in proportion to the census,” as
forming an exception to the powers of Congress; and, I presume, means to
infer, as this bill will not be a capitation tax, that Congress may pass it under
their power “ to lay and collect taxes,” and the sweeping clause to carry their
specific powers into execution. Sir, the convention never intended that Con
gress should have, or exercise, the power to establish banks, or they would
nave made use of apt words to have vested them with it. B ank, sir, is
a technical term ; and if they had | intended that power, they would cer
tainly have used that term. W hen it was intended to give any power, we
find the convention had no difficulty in expressing it: as, Congress shall
have power “ to coin money and regulate the value thereof, and of foreign
coin.” And here, let me rem ark, is an express power “ to coin money,”
which, if we were left to legal construction, would be an affirmative pregnant
that they should not omit bills of credit. But, sir, we need not rely on con
struction to prove what powers Congress have not, as one of the amendments
to the constitution provides, that “ Congress shall have no power that is not
expressly given.” A nd, to give a power by expression, is to use apt words
for that purpose, and it of course becomes necessary to the power in Congress
to establish a bank, that such a power should be given by such specific terms,
as would, unequivocally, and without construction, convey the right.
As to the sweeping clause, “ to pass all laws necessary to carry into effect
the foregoing powers of Congress,” the letter of this section confines its opera
tion to the specific powers of Congress, previously enumerated, and can, in
no sort, create constructive powers, or be construed into a creation or exten
sion of power. Sir, if a doubt can remain of its harmless and inoperative na
ture, I trust it will be removed by a reference to the second volume of the
Federalist, page 2 0 2 : “ It is expressly to executa these powers, that the

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sweeping clause, as it has been affectedly called, authorizes the National L e
gislature to pass all necessary and proper laws. If there be any thing excep
tionable, it must be sought for in the specific powers upon which this general
declaration is predicated. T he declaration itself, though it may be chargeable
with tautology or redundancy, is at least perfectly harmless.” H ere we find
one of the framers of this instrument, when defending this article called the
“ sweeping clause,” from the charge of being used to extend the powers of
Congress, or to embrace other than the specific powers, himself confining it to
the express powers, and, indeed, declaring that it gave no power; was a mere
tautology. Yet gentlemen seem to think that it is an important delegation
of power, and confidently quote it as such; and, indeed, if their construction
of it was indulged, it would discharge us from every constitutional obligation,
that we. in our discretion, might suppose the public good required; but I trust
the good sense and patriotism of this House will never suffer it to substitute
discretion for expression, their w ill for the law.
An honorable member from North Carolina, [M r. A l s t o n ] has, with some
confidence, cited the 10th section of the 1st article: “ No Str.te shall emit bills
of credit, or make any thing but gold and silver a tender.” H e urged this
denial of the right to the States to emit bills of credit, as a perfect prohibition
of the States to grant bank charters, and insisted that bank notes were bills of
credit. He spoke of this section as a discovery of his own, not noticed by
any body before him, as applicable to the case. Sir, the gentleman certainly
misapplies the term “ bills of credit” to “ bank notes.” T he term “ bills of
credit,” wus surely intended to express and prohibit the emission of paper
money, which had been emitted by the States and by Congress, during the
war of the Revolution, and had so depreciated, as to impress the convention
with the propriety of prohibiting their emission in future. By a recurrence to
the proceedings of the old Congress, and the laws of the several States, itw ill
be found that the term “ bills of credit,” was technically used for paper money;
nor can there be less doubt that bank notes have also their technical meaning,
as the paper issued by bank directors; and neither of the term s “ bills of ere
d it,” or “ bank notes,” could, by men of legal intelligence, be used for the
other. “ Bank note,” and a “ bill of credit,” are terms so well known to the
law, that, in legal parlance, neither could be substituted for the other. On a
prosecution for counterfeiting either, the other could not, I apprehend, be
given in evidence. I must, therefore, insist, that the gentleman’s construc
tion of the constitution is incorrect. But, sir, if it was correct, and the States
could not grant bank charters, would it follow that the Government of the
United States would possess the right? I presume not: unless that article of
the constitution, which declares, “ that all powers not granted to Congress
are reserved to the States, or the People, shall be blotted out of the instru
ment, or totally disregarded. Sir, I hope we have not already arrived to that
lust of power; and I trust the present case, when its expediency comes to be
examined, will not seduce any member of this House from his regard to this
hallowed instrument.
Sir, the Secretary of the T reasury, [A . Hamilton] at the time of the pas
sage of the law establishing the United States Bank, and who may be called
the father of it, labored with unceasing assiduity, in every stage of it, to give
It a legitimate existence. W e see him, sir, insisting on the power to grant
this charter, as conferred by the section that authorizes Congress to lay and
collect taxes, and by the sweeping clause, “ to pass all laws necessary to
carry the preceding powers into effect,” any thing, in his opinion, in the F e
deralist, before cited, as to the harmless quality of the sweeping clause, to the
contrary notwithstanding. S ir, we see him driven from these stands by the
A ttorney General, [M r. Randolph] and by the then Secretary of State,
[M r, Jefferson] the last of whom insisted, that a proposition in the conven
tion, to authorize Congress to grant corporations, had been rejected; which
60 thoroughly closed the case, that we find M r, Hamilton, although he ques
tioned the authenticity of the document relative to the rejection (by the con
vention) of the articles alleged to have been rejected, taking post behind that

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article of the constitution, that “ Congress shall have power to dispose of, and
make all needful rules and regulations respecting the territory, or other p r o
perty, belonging to the United States,” and insisting, that the shares of the
stock contemplated to be subscribed by the U nitea States, would bring the
law, granting the charter, within that section which authorized the United
States to make all needful rules and regulations respecting the property of
the United States. B ut this would not justify a renewal, as Congress have
sold their stock. Thus, sir, we find the advocates of this power in Con
gress to grant a charter to the Bank of the United States, nxing on a va
riety of the sections of the constitution, from whence they infer we have the
right. A nd, although, by the express letter of an amendment to the constitu
tion, Congress can exercise no power not expressly or specifically granted,
yet these gentlemen insist we have the right, although they cannot agree
among themselves on the article by which it is specified ; and, indeed, each is
an authority against the other, that the power is not granted at all. And al
though they all agree on its being constitutional, they areas much at a loss to
fix on the article oy which it is made so, as the ladies of Strasburg were to
decide on the composition of S tern’s celebrated nose, though they all agreed
it was a noble nose.
T he gentleman from M aryland says, Congress have, by the law authorizing
a branch of this bank to be established at New Orleans, recognised their right
to grant a charter; and insists that this ought to be considered as an authority
to that purpose. Strange that the gentleman’s zeal should so transcend his
judgm ent as to induce him to press so futile aif argument. Congress, at the
time of passing that law, had a right to make any law necessary for, and be
neficial to New Orleans; it was then a territory, and, by the positive provi
sions of the constitution, Congress have the power to make all “ needful rules
and regulations respecting their territories or other property;” they have ex
clusive legislation over it, and may make any law that a State could, as to its
government, as well as any law authorized by the constitution to be passed by
Congress.
Sir, by this charter, the directors of this bank were authorized to fix
branches in every part of the United States; and when Congress became the
purchasers of N ew Orleans, they considered it a portion of the U nited States,
and, of course, that the directors of this bank had the right to establish the
New Orleans branch bank, and felt no hesitation to declare it by law, as they
had a perfect constitutional right to make all needful laws for their territories,
of which the Orleans territory then was, and yet is one. Yet, sir, this act of
ood faith in the nation, to this bank, is pressed as an authority to bind this
louse to consider the constitutionality of this question as settled; but the
good sense of this body will secure the United States from the calamity of rechartering this bank, and committing the best interests of this nation to its
foreign and domestic enemies.
Now, sir, having presented this view of the unconstitutionality of thisquestion, I must beg the further indulgence of the House while I present also my
view of its inexpediency.
Sir, this Qharter is very nearly allied to the funding system; they had a co
eval conception, and the same progenitors. They were conceived in sin,
and born in iniquity. T he funding system was founded in the basest of
frauds to the best of tnen, the war-worn soldier, whose necessities compelled
him to part with his certificates, the price of his blood and toil during an eight
years’ war; and out of which the arch speculator, availing himself of those
necessities, had trepanned him, at h a lf a crown in the pound. These certi
ficates, sir, were funded to the holders, with their interest, at par, and with
other certificates, for supplies for the army and navy, which had also depre
ciated, were funded at par; and although it was ably contended, that the certi
ficates granted to the original holders only, should be funded at par, and that
those held by speculators should be funded at a certain exchange. Yet, sir,
such was the influence of that well organized band, under the auspices of the
then Secretary of the T reasury, that no discrimination could be effected

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whereby Congress might have been justified in paying the poor soldier for his
loss, by being obliged to p art with his certificate at less than its nominal value;
a loss occasioned by the inability of Congress to pay them at the time, agree
ably to their contract; a loss by Congress forcing upon them these certificates,
and their total inattention to the payment of them, for many years, and until
they were possessed by the hopeful band of speculators, who were the active
agents of this system. As an evidence of its corruption, the continental bills
of credit which had been issued from time to time, were to be funded at one
dollar in the hundred. T hey, sir, were as a circulating medium in the hands
of the People, who, however honestly they might have receivedjthem for sup
plies to the army and navy, at the same time, and at the same price that their
neighbors furnished them supplies for which they took their certificates,
which this system funded at par for the benefit of speculators, while the hold
ers of the bills of credit w ere funded at one hundred for one—could, sir, any
thing but corruption have prevented the discrimination between the original
holders of the certificates and the speculators, or have induced the funding of
certificates (for supplies furnished at the same time and the same price) at par,
that denied it to those holding the bills of credit?
This banking system was partly made up of these corrupt materials of the
funding system, which composed a portion of its stock ; was illegitimate in its
conception, partial in its establishment, and corrupt in its administration; is a
mammoth moneyed aristocracy, violative ofthe constitution, of unlawful origin,
u nder the control of foreigners, who have proved their principles, by the se
lection of its directors— 'ill federalists. T his stock was to be subscribed at a
short day in Philadelphia, convenient only to that neighborhood: it was therefore
partial. W hen in M aryland a bank is to be established by law, the propor
tion of each county is allotted to it; books are opened, and the stock subscrib
ed for in each county; and why were not books opened in each State, and
their portions of the stock allotted to them, as in M aryland? Sir, when we
consider that the directors of the mother bank in Philadelphia are elected
under the influence of foreign stockholders, to the amount of upwards of seventenths of the whole capital, we are not left much to conjecture, why these
tw enty-five directors .are all of a particular political complexion, nor why a
list of them, and of the directors of the branches, (as required) has not been
furnished, as an agent here had it in his power. Sir, I should have been glad
o f the list, as, being pretty well read in the biography of the people of this
country, I should have been enabled to have pointed out, 1 have no doubt, a
number of traitors to the Revolution, Burrites, and embargo breakers; the
whole phalanx being at every stage of the republican administrations of this
country, with fe w exceptions, opposed to every measure of those adm inistra
tions. I am a little surprisea at their tem erity in asking, and expecting a re
newal of that charter, by which its directors have used their influence cor
ruptly, to control the measures of the Government, and the elections of the
patriotic favorites of the People. W e have seen a petition, signed by a num
ber of the m erchants of Philadelphia, addressed to General Washington, to
ratify Jay ’s memorable treaty, a number of whom were known to have been
its bitter enemies; and it is* a well known fact, that the reason assigned by
them for that act was, that they were induced to subscribe it under the threats
o f these bank directors, that, it they did not, they need expect no more accom
modation at the bank. W e have seen, at Baltimore, their influence exerted
in the memorable election between Gen. Smith and Mr. W inchester, where
Edw ard Johnson, now mayor of Baltimore, and a bank director of the State of
M aryland, and M r. M atthew s, now and often a bank director, were put out
because they had the presumption to think for themselves, and the temerity
to vote for General Smith. These gentlemen were of unblemished reputation,
and equally entitled to respect with their successors. I have not a single
doubt but they did not suit the directors of the mother bank; they had sup
ported a patriotic soldier of the Revolution, a sin of too deep a die to be for
given by this Britannic chosen band, who have lately put the seal to their
principles in the election of Evan Jones, now president of the branch bank at
26

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BANK OF T H E U N ITE D ST A T E S.

New Orleans, who succeeds a gentleman of republican principles. T his M r.
Jones is said to be a refugee from the United States at the commencement ot
the American Revolution, and a British officer during that period, who has been
lately more than supected to be one of B urr’s chosen band. It, at a time when
the directors are soliciting the renewal of their charter, they can thus outrage
every principle for which our patriots bled, and prefer the parricide to the pa
triot; at a time when the eye of the nation was fixed upon them; what, I ask,
after a twenty years’ renewal of the charter, may they not be expected to do,
or how. in the case of a war with G reat Britain, might they not be expected to
act? How would a patriot of America be expected to act in supplying funds
to our enemies, to prosecute a war against this country? It would certainly
he a treasonable adhering to our enemies, giving them aid and comfort. But,
sir, we are told this is a harmless institution, all important to the fiscal con
cerns of the United States; influenced by no motives but the common good.
Strange, indeed, would it be, to ascribe to the stockholders of seven-tenths ot
the capital of this bank, (reported by the Secretary of the Treasury to be fo
reigners) and known to be Englishmen, a disposition friendly to this coun
try. Sir, here is a strong foreign influence on the moneyed concerns ot this
country; money has been correctly called the sinews of war; and are we to
suppose that Britons are not as much attached to their country as Americans
are to theirs; or that the strength and influence of this institution will not be
put in full operation against us, when it has been committed to (he care, and
put under the direction of men, known to be in hostility to the best interests
of this country?
.
Gentlemen on the other side, however, insist that there is no improper in
fluence to be apprehended, and deny it to be a party question, although it is
well known to have originated in party, under the auspices of the great federal
leader, Alexander Hamilton; although it has been conducted by directors of
the mother bank, exclusively federalists; and although every federalist in this
House is now its advocate. I t is said to be harmless; I thinK, sir, the placing
in the hands of twenty-five directors, elected by stockholders, seventenths foreigners, to have the direction of twenty millions of dollars, when
money is admitted to be the sinews of w ar, particularly when we consider
their political complexion, and retrace their political conduct, cannot be sale
to our republican institutions, ou the score of its moneyed influence; but when
we consider the patronage of these directors, who, by the charter, have a right
to establish as many branches in the United States as they please, say one to
each State, with the appointment of thirteen directors, a president, and seven
officers to each branch, with as great accommodations as directors, and salaries
to their officers averaging a thousand dollars a year, each making upwards ot
one hundred and seventy thousand dollars to tneir officers, and more to their
directors—sir, this is a patronage greater than is possessed by the President
of the United States; and will any gentleman who regards the solid interest
of this country, be disposed to give this aristocracy, organized as it is, and
composed of such materials, the key of this treasury, with its privileges? I
had always supposed that the treasury of this country ought to be in the hands
of representatives of the American People; they are said to hold the purse string
of the nation’s treasure, and not that body who now directs this bank. Have
they not denounced the administration, and every measure of the Government,
and supported its most inveterate enemies? But, suppose them to have been
correct in all their measures, ought the nation’s representatives to give to fo
reigners, knowing them to be such, the immense advantages flowing from the
renewal of this charter, or to one set of her citizens this benefit, which they
have enjoyed for twenty years, in exclusion of her other citizens, who, to say
v_m> more, are equally entitled to the favors of Government?
If, sir, we have the power, and feel it necessary to the fiscal concerns of the
nation, to have a national bank, the eight millions two hundred thousand dol
lars hejd by foreigners in its funds ought to be withdrawn, and that share of
stock distributed among the States, having an eye to the stock already held by
citizens, so that the proportion of each State, agreeably to the relative census

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of the S tates, might be apportioned and subscribed, whereby the establish
m ent might be puiged of its foreign influence. B ut, it is said, these foreign
ers will send their gold to England. Can any man of sound judgm ent sup
pose they would transfer their capital to England, and take fo u r per cent, in
England, and that in paper, when they can loan their money in this country,
a t six per cent, and get the interest in specie?
Sir, there can be no possibility of their exporting their stock in specie very
speedily, when you take a view of the late report of the treasury ; they will not
have specie to meet the specie engagements of the bank. Sir, this institution
was established by the Secretary of the T reasury without a bonus, or any solid
advantage to the United States: he well knowing what had been the en
gagements of the stockholders of the Bank of England, at its establishment,
and frequent extensions in its accommodations to the British Government;
and that the derangement in its fiscal concerns had forced these extensions on
that Government. He also well knew (hat, when the two insurance fire com
panies, the London and the Royal Fire Insurance Companies were es
tablished, with a capital of four hundred and fifty thousand pounds sterling
each, they gave as a bonus to the British Government, one hundred and fifty
thousand pounds sterling each; and yet this experience was not turned to the
benefit of the United Sta es; but, this charter was Granted without any bene
fit blit to speculators, who were holders of the funded debt, which was made
a part of the stock of this bank. Sir, in the provisions of the law' for the esta
blishment of this bank, whose capital was to have been ten millions of dollars,
the stockholders were so favored, as to be permitted to go on as soon as four
hundred thousand dollars were paid in, (one twenty-fifth part of the capital)
and thus, on that small sum, they proceeded to business, and soon received
an interest on fifteen millions of dollars; and so much in conclave are its con
cerns, and so much under the control of inen of a particular political complex
ion— all l he directors of the mother bank, at a//tim es, have been federal, or worse,
many of them tories, or monarchists—so that, as to its secrets, it might be com
pared to the inquisition; and being under such control, I have ever doubted
the statem ent of its funds. Sir, the humiliation of having such an assemblage
of characters, selected by foreigners, to select directors for the branches in
each S tate, lias ever been truly grating to the honest feelings of republicans,
and violative of the rights of the States, to whom an independent republican
Government has been guarantied.
Sir, there can be no necessity for this bank. T he State banks are abun
dantly sufficient to supply every requisition, if the United States’ deposites are
made in them. This goes all lengths to defeat the arguments of gentle
men, predicated on the principle of necessity, as vesting this power in Con
gress. T here are banks, in Baltimore, alone, with a nominal capital of eight
millions two hundred and eighty thousand dollars, four millions nine hun
dred thousand dollars of which is paid in; and if a nominal capital of the U nit
ed States’ Bank of ten millions ofdollars, with four hundred thousand dollars
only paid in. could begin and progress in business, is it possible to doubt that
the'banks of Baltimore, with four millions nine hundred thousand dollars paid
in, already in operation, could not go on, with the deposites of the United
States, and extend their business, so as to give every necessary accommodation
to individuals, and the public? Can there be any magic in the (J. States’ Bank?
O r can any honest American feel a predilection to its foreign stockholders,
or to their hopeful selection of directors? I tru st not. Therefore, there can
be no cause of alarm; no danger to the fiscal concerns of the nation. But, sir,
many of the States have banks, and will no doubt conduct them as honestly
and impartially as the United States’ Bank has been conducted, and under the
direction of men the United States may as safely trust, and on whom the pub
lic may as confidently rely for accommodation, unless, peradventure, some
gentlem en might repose more confidence in foreigners, than in their owrn citi
zens; but. I hope and trust there are none such within this sanctuary of the
liberties of the nation. W e have been told by the gentleman from N ew York,
( M r . F is k ) that agriculture, com m erce,and manufactures, will receive a vital

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stab, by suffering the charter of this bank to expire. This is a groundless
phantom, produced by the feverish fancy ot this gentleman, laboring under
the bank mania; but, sir, ifagriculture, commerce, and manufactures, were to
feel it, in the extent suggested by the gentleman, I trust those classes ot our
fellow-citizens would bear it with fortitude, when they reflected that it coultl
not be renewed, but by a violation of the constitution of the United States; a
violation of the rights of the States, to whom is guarantied an independent
republican form of government; and perhaps a violation of our independence,
for which the best mood of our heroes was shed on the altar ot liberty. 1 his
charter is a cancer on the body politic, which I hope we shall suffer the hanu
of time to eviscerate and eradicate, and no longer suffer any foreign -agency in
the regulation of the internal affairs of this country; and that we shall preserve
our fiscal concerns from the influence of those, whose interest it is to destroy
them. B ut, we are told by the same gentleman, that the Secretary ot the
T reasury, whom he calls the Chancellor o f the Exchequer, has reported this
bank.as necessary to the fiscal concerns of this country; and I suppose, by
giving the Secretary of the Treasury the title of Chancellor of the Exchequer,
he wished to impress this House with the powers of that officer, in England,
to give an imposing influence to the Secretary here: and while he advocates
the interest of these foreign stockholders, he so far forgets himself, as to intro
duce into our Government, a Chancellor of the Exchequer. B ut, I hope we
shall exercise our own judgment, and be satisfied with our own Government,
organized as it is, disregarding the principles of foreign Governments, and
the interest of foreign stockholders. Sir, we are told by the same gentleman,
that Congress sold to foreigners, two hundred thousand dollars of tne stock in
this bank, but a few years ago; and therefore we ought to renew the charter.
Sir, the purchasers knew the tenure by which this charter was held, and the
precise moment of its death; they bought it as it was, a perishable article, and
the selling of the stock by the United States, ought to have been considered
as the tocsin of its dissolution, at the time appointed for it. T he claim to renew
the charter on that ground, is as ridiculous, as for a man who had bought a
horse, on his death, to demand another. W e are told of the vast inconvenience
our merchants will experience, by not having an universally circulating medi
um. How, say they,'can money be paid by a Bostonian, at New Orleans? Sir,
money is not paid in large commercial transactions; and if it were, would it
not be an easy m atter, if a m erchant has Boston bank notes, to get the specie
for them, anil send that to New Orleans? How, I ask, would he do if he
wanted the money at the Havana, orany foreign port? A nd why cannot he
do the same at N ew Orleans? Sir, this is the common lot of merchants; but,
sir, if the gentleman had Boston United States branch bank notes, could he
get gold for them at the New Orleans branch bank? N o, sir; and a gentleman
who"had five hundred pounds in the United States mother and branch bank
notes, might have to travel to every State having a branch, to get the specie, as
neither will give specie for the paper of the other, and are to that purpose fo
reign to eacn other. Indeed, it has been suggested, as a practice, to secure
the banks from a pressure for specie, to circulate the Eastern notes to the W est,
and so, vice versa, whereby the holders, on the fourth of M arch, will be put to
great inconvenience in procuring specie for them. Sir, the people of England
had no national bank till the year sixteen hundred and ninety-seven, less
than a century before the establishment of this bank, and they were enabled to
conduct their great commercial concerns, to great advantage; and the United
States had an extended commerce, before the establishment of this hank, and
I tru st her merchants will be able still, to conduct advantageously, their com
mercial concerns, without our sacrificing the constitution we are sworn to
support, or being tributary to foreigners, whose interests I never can respect,
when in collision with that of the American People.
M r. B oy d said he was unwilling to give his vote on the question of indefinite
postponement, without ottering to the House, and those that he in part repre
sented, his sentiments. I shall vote, said he, for the postponement; and,

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205

should that vote not prevail, then against the bill, in its present form, and every
other in which it may be presented to me. for a renewal of the charter of the
United States’ Bank, predicated on the original grant; because, to my mind,
it is unconstitutional. A nd here, M r. Speaker, you must allow me to go back
and take a look at the tim e and manner of its creation, and how it originated.
T o my mind it was created in aid of the funding system; and what was that
debt, so created, not contracted? W as it for the redemption of the bills of
credit, called Congress money, that paid your army in the field, fed and
clothed them for years? No. W as it to redeem said bills that were paid to
the farmer for his flour, beef, teams, hay, and supplies to the army? N o, no.
How, then? W hy, after those bills had so far depreciated that the farmers
were unwilling to receive them, then certificates were given at the compara
tive price of those depreciated bills. T hen again it became necessary to liqui
date those certificates down to specie value. W ere they called in then? No,
no, sir; no redemption yet: anti let me tell you, sir, it was that paper and
credit that placed you in that chair, and me on this floor. W e ll, next the
constitution is formed, and Congress set themselves about paying the debts of
the United States, and some part of the several States’ debt. M r. Speaker,
how was it done? Runners go out, in every direction, to purchase those liqui
dated certificates, and they succeed at 2 s. 6 cl. in the pound value, up to 8 s.
A ll the certificates funded did not, on an average, cost the purchaser more
than five shillings in the pound. Now, sir, the bdls, called Congress money,
are all, or next to all, sunk in (he hands of the holders, and fifteen shillings
in (he pound of the residue. Now, sir, an act ofgeneral justice takes place!
The said certificates are funded at 2 0 s., or their nominal value, to the specu
lator! and an interest of six per cent, per annum given to him; to pay which
duties are laid, and money borrowed to pay the interest in advance of the
revenue. A charter is now granted for a bank often millions of dollars, seven
and a half millions of which was to be this aforesaid State paper, and two m il
lions five hundred thousand in specie; and when a small part of that was paid
in, they were allowed to begin their discounts, and issue their paper to double
the amount of the whole capital! viz. tw enty millions; these certificates
drawing six per cent, making seven millions five hundred thousand of the
stock. N ow , this part m ust, according to this statem ent, give to the stock
holders eighteen percent, for the deposite of this State paper, and twelve for
the residue. Now, M r. Speaker, I will ask where was the redemption for
these bank notes so issued? Surely not in the bank, for that was seven and a
half millions State paper, as above, drawing six per cent. N ot in cash, for that
was not supposed to be there. Therefore, to my mind, this was a great decep
tion; swindling, I will call it. Ah, but, say some, by this means you were
furnished with a capital, and enabled to carry on commerce to a great extent.
I deny the fact—our capital was the produce of our soil and industry. Banks
af best are no more than a conveniency to m erchants; and I respect honest
merchants; they are useful and necessary; but I do not include bank stock
jobbers, or men calling themselves merchants, without a capital; mere drones
in the hive. N o, sir, the latter is a moth to the commonwealth.
I t appears to me, that this scheme of banking is an evil in its operation,
something like the faro table, always, in its operations at each round, deposit
ing six per cent, to the stockholders—for what? T he exchange of a note dis
counted, and the note so lodged the best of the two! Ah! and is this indeed
the capital of our country? Sir, I am lost in the chicanery. T h e banks enable
us to over-trade on a false capital; depreciate our property; demoralise our
citizens, and take or send the gold and silver out of the country. L et me
state this a little further. I will suppose a line drawn at a distance from the
sea of fifty miles, the whole length of the continent. I would ask, if the cu l
tivation of that tract of country would be equal to the maintenance of them
selves and those collected in the cities? I believe not. T hen, again, let me
suppose that, on an average, the whole length of our country we cultivate to
the distance of two hundred miles from the sea board. T hen, it appears that
the average distance that we have to take all our transportable produce is one

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hundred and twenty-five miles. I t is believed that the cultivated distance
is, on an average, nearly four hundred miles, which will enhance the price of

transportation, mostly by land, to the cities. Now, sir, at the general price,
one-third. and in some cases one-half, is expended in getting the produce
there. But this is kept out of sight, and much said about high and great
prices obtained by the farmer. It is nominal, not real. It is paid them in
depreciated bank paper. Sir, I do contend that not only the bank paper is
depreciated, but that, by the means of its abundance, the gold and silver is
depreciated. One dollar, eight years since, was worth more than one dollar
and fifty cents is at this day. Besides all this, I ask, is there cash in their
vaults to redeem their bills? No, no, sir; not for one-half. T hus, sir, are the
People swindled out of their proporty to support gambling and chicane. Is
this what enhances property, and gives a capital to c a n y on commerce? No,
for myself, I think not. It is the product ot our soil and our industry that is
the capital, and on that we do and ought to trade: and that trade ought to be
internal, turned to our own manufactories in a great part. I do not say that
banks are not convenient and useful, to a certain degree; but I do not think
the advantage is equal to the disadvantage. I am well aware that such senti
ments will be treated with ridicule; but, sir, that does not intimidate me;
they are my sentiments, and, as such, I give them without the least fear of
intimidation, having in view the happiness of my country; and I will venture
to say, that the day is not far distant, if we progress as we have done with
banks, that the country will experience an universal shock from this false
capital. Before you, sir, are propositions for charters of incorporation, within
this D istrict, for banks, to the amount of four millions! Can there be a want
of capital? I f there is, how is this stock to be furnished?
M r. Speeker, we hear from Richmond, Baltimore, and Philadelphia, much
said against ihe renewal of the United Slates’ Bank charter, and I agree with
them; but. I believe, from very different principles. T he profits of the U ni
ted States’ Bank have been, from their issues, and the deposites of the revenue,
and privrte individuals, immense; and they want the cards in their own hands
to play the same game. I think they are not entitled to much credit. The
odds consists in this: the one is against the constitution, the other not; the
principle is the same in both.
M r. Speaker, if we must have a national bank, let it be so in reality. I
shall not attem pt to go into the detail of such an institution. It is not my
purpose; but I think that it might easily be done by making a portion of our
public lands the foundation of such part as the United States should choose to
subscribe or hold—the bank to be created in the D istrict of Columbia, and to
extend branches into such States as, by law, would choose to accept them.
Sir, I had much more to say on this subject, but I perceive that the House is
impatient, and I do not wish to detain them, and snail add no more.
Mr. M cK ee .—Residing, as I do, in a part of this country remote from the
scene of bank operations,! had determined to say nothing on the subject, con
tenting myself by giving a vote flowing from the honest convictions of my
heart; but the extraordinary manner in which this discussion has been mana
ged, on the part of the opposers of the bill, by attempting to make it a party
question, has compelled me to commence my defence of the vote I expect to
give, 011 this motion. So far as 1 know, or believe, my suffrage in favor of a
renewal of the charter of the United States’ Bank is in conformity with the
views and wishes of the people I have the honor to represent; and any change
in their sentiments, which might be effected by the frequent appeals to their
passions and prejudices, made in the form of argument, it becomes my duty
to correct.
W e are arrested in the threshold of this discussion by a constitutional ob
jection, by which it is alleged, that Congress do not possess the power of re
newing this charter. I had thought this question long since settled, not alone
by those who originally granted the charter, but confirmed by M r. Jefferson,
and the votes ot a republican Congress. I have been led to this opinion by a

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207

recurrence to the act of Congress of the 23d of March, 1804, by which the pre
sident and directors of the Bank of the United States are authorized to esta
blish offices of discount and deposite in any of the territories or dependencies
of the United States. A gentleman has said, this was a power possessed ori
ginally by the bank. If so, for what end was this law enacted? It must either
have been enacted from an opinion that the charter could not, without this
aid, be extended to New Orleans, or that it was proper and necessary, in order
to the well-management of the fiscal concerns of the country, that this institu
tion should be extended to New Orleans. Either case answers my purpose:
for, if the bank could not, without this act of Congress, establish an office of
discount and deposite at New Orleans (which seems to me to be the better
opinion) then the passage of a law, extending the influence, the power, and
tne profit of the bank, cannot be considered in any other light than a tacit and
full acknowledgment, on the part of Mr. Jefferson and the republican Con
gress, that the charter was within the pale of the constitution: for, sir, can it
be supposed that Mr. Jefferson and Congress, who were more republican in
1804 than at any other period, would have extended, bolstered up, supported,
and cherished an institution, orisinally obtained by a violation of the sacred
charter of our political rights? No. Surely, it is impossible. And if, sir,
this office of discount and deposite was induced to go to New Orleans because
it was necessary and proper to be sent thither for the better management of
the collection of taxes at that port, this circumstance admits the only fact ne
cessary to be in proof to establish the power of Congress to pass the law.
If, sir, any additional proof could be wanting to show that the power of Con
gress, under the constitution, has been considered sufficient by this adminis
tration to authorize them to grant the charter in question, it is abundantly
furnished by the act of Congress of the 24th of February, 1807, for the punish
ment of frauds committed on the Bank of the United States. By this law,
Congress have subjected the citizens of the United States to capital punish
ment for counterfeiting the notes of the United States’ Bank. Now, if Con
gress by the constitution had not the power, originally, to grant this charter,
the notes of the bank were certainly issued in violation of the supreme law of
the land, and Congress had no power whatsoever to pass a law making that
criminal which was in itself no crime, and could not, by any conception w h at
ever, be considered as a violation of any law of the United States. It seems
to me to be perfectly paradoxical and absurd to say, that any institution, hav
ing no legitimate right to issue paper, nevertheless has a right to the interpo
sition of Congress in their behalf, making it a crime against the United States
to counterfeit this paper, which was issued in violation of the supreme law of
the land. Under this act of Congress, the citizens of the United States have
been deprived of their liberty as well as subjected to heavy fines, by the deci
sions of your courts. A citizen of Kentucky has been doomed to confinement
in the jail and penitentiary house for a violation of this act of Congress, and
he was not relieved from the fangs of the law by the President, (Mr. Jeffer
son.) llo w are these things to be reconciled on any other ground than by ad
mitting the constitutional validity of the original act granting the charter?
But it has been stated that this charter, when originally granted, operated
in the nature of a contract; and that Congress could not repeal the act of a
former Congress granting a charter; and hence the power to make, and pro
priety of passing the act in question. This idea is altogether fallacious, be
cause it is an indispensable requisite to all contracts, that the parties thereto
shall be able to contract. If the constitution vested no power in Congress to
make the contract, it was absolutely void; and if the Congress of 1807 were
thus impressed, they could not and would not have passed the law in question;
and, therefore, I infer that they considered that the constitution had vested
Congress with the power to grant the charter.
In addition to this, we find that the present Secretary of the Treasury,
under the auspices of Mr. Jeft’erson, made a report in favor of the renewal of
the charter of the United States’ Bank, in pursuance of a resolution of the
Senate, passed on the subject. This report called forth no animadversions

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from any section of the country; and I have ever understood, that, if this
question had then been brought forward, it would have passed by a large m a
jority of Congress. These circumstances have led me to suppose this ques
tion had received the ratification of every party, and of every administration;
and, what is still of more importance and higher authority, the sanction and
confirmation of the sovereign People, and therefore considered as an adjudged
case, tested by experience.
I shall not consume the time of the House by any enumeration of the powers
of Congress, arising from the constitution itself, with a view to prove that
Congress originally had the power to pass the law granting this charter, and
still possess it, because this ground has already been occupied with great abi
lity, and the power of Congress to pass the bill clearly shown, and any remarks
which I might make would only be a repetition of the arguments of others. I
shall therefore content myself by answering some objections made to the bill.
I t is said the bank will be a thorn and a viper in the bosom of the United
States, which will ere long sting the political liberty of this country to death.
T his is a strong charge, and if it is found to be true, it must be conclusive
against the bill; but let us examine this bold assertion by the test of reason
and experience. This charter was given by Congress tw enty years ago. Since
that time the constitution, and the political liberties of this country have been
in the hands of our political opponents, and are now in our hands unimpaired.
T he country has, in the latter period, been prosperous beyond example. Agri
culture has prospered, commerce has flourished, internal improvements have
increased; the People have enjoyed peace, prosperity, security, and happiness,
in a degree infinitely superior to that of any other nation on earth. N o dele
terious consequences have grown out of this institution, affecting the security
or liberty of the citizen or the country. It is said, and truly too, that ours is
a Government of experiment, none similar too it ever having existed before.
Here, then, is the test of experience in favor of this institution; and why dis
continue it to try some devious and unknown track?
But, sir, suppose there is something of truth in this statem ent, I ask if State
banks are not equally as dangerous to the political liberties of the States, as
this bank can be to the United States? And, if the political liberties of the
States are stung to death, I ask where will you find the liberties of the U nited
States? I believe they will sink with the liberties of the States. But, if gen
tlemen are really serious on this subject; it they believe that banking is fraught
with thorns, and not with roses, and wish to return to the state of native sim
plicity which existed in the pure ages of ancient Greece and Rome, I will
unite with them as far as we have power in plucking up by the roots this mon
ster, and make a common bonfire of the charters of every bank in the nation.
T o do less would not cure the evil, if any exists.
But it is said that this institution will destroy republican principles, and
federalise the country. T his bank, as 1 have already stated, was in opera
tion in federal times; and, notwithstanding its influence, those times have
changed; experience, the best possible test of human affairs, does not bear
gentlemen out in this assertion. On examination we find, that the States of
Rhode Island, Connecticut, and Delaware, are the only States in the Union
who are represented in the Senate and in this House, exclusively, by federal
ists; yet there is not now, and never was, a branch of this bank in either of
those States; but there is a branch bank in Georgia, South Carolina, Virginia,
M aryland, N ew York, and Massachusetts, and the mother bank in Pennsylvania.
The two first are exclusively republican States, and those parts of all the
others, (except Massachusetts) where those banks are seated, are represented
on this floor by republicans; whence, then, are found the facts to prove this
assertion? or do gentlemen pursue a recent example, set by a certain great
man, of giving opinions, when, with the same breath, it is acknowledged there
exist no facts on which they are founded?
T he foreign capital employed in this bank is a ground of great alarm to
some gentlemen. In answer to this objection, I would ask, if it ever has
been, or if it is now, the interest or the policy of the States, or the United

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209

S tates, to exclude foreign capital from being received and employed in your
country? Do you find any provision in the charters of the State banks, pro
hibiting fereigners from becoming stockholders? Is there any provision in
those bills from the Senate, establishing half a dozen banks in the District of
Columbia, prohibiting foreigners from becoming stockholders? T o all these
questions you are compelled to answer in the negative. So long as the pro
fits of agricultural pursuits, or commercial enterprise, furnish tne adventurer
with a good profit, over and above the price he has to pay for the use of the
capital employed, just that long will he continue to employ it; and, if the
capital is not to be found at home, application will be made for it abroad; and
whenever capital becomes redundant at home, you will then exclude foreign
capital. Before that time, the attem pt would be unavailing: for, capital, like
air or water, will seek its level. I have thought that foreign capital, in this
country, would have had rather a salutary tendency, inasmuch as it would
interest men of influence in the preservation of the peace and perpetuity of
the Government. M r. Jefferson must have been thus impressed, or now could
he have permitted a sale of the bank stock of the United States directly to
Englishmen; and he was certainly not chargeable with a predilection in favor
o f British influence. T here is in England a class of men favorable to the
prosperity of this country; and I have always understood that it is those alone
v/ho have interest in our funds. Besides, if this foreign capital is fraught
with all those evils which gentlemen picture to themselves, the argument holds
good against State banks, and goes to prove,the necessity of their destruction
also.
T he gentleman from M aryland (M r. W r i g h t ) has made some heavy charges
against the directors of the United States’ Bank and their management. I
had thought it universally understood and adm itted, that the management of
this great moneyed institution had been exemplarily correct, and I have not
before heard any thing of the kind laid to their charge. B ut, even admitting
the charge to be true, it only proves, what may. I believe, be alleged and
proved against every human institution administered by man, viz: that the
institution, as well as the administration thereof, is imperfect. B ut I ask if
the directors of three-fourths of the State banks in the United States are not
federalists; and, therefore, why not put them down in mass?
I beg leave to notice an argument which has been resorted to by all the opposers of the bill, when they have been told that the bank was both necessary
and proper to the convenient and advantageous management of the public re
venues. T he answer has uniformly been, that this difficulty could easily be
obviated by the agency of State banks. T his, sir, is certainly begging the
question; because, an admission that bank agency is necessary to the collec
tion of your revenue, and proper to be used in the management of the moneyed
concerns of the Government, is an admission of the only fact necessary to be
in proof to show, conclusively, the power of Congress to pass the bill in ques
tion. Besides, do not all the unhappy consequences, which, is it said, await
this bank, attend the depositing your money in State banks? W ill you not,
thereby, give a circulation to tne paper of the bank where you make your d e
posites greater than heretofore? and, by increasing the circulation of their
paper, as well as by aiding them with your money to make more extensive
discounts, you [increase the profit and value of the stock. This circum
stance will create an anxiety with all the State banks to obtain your deposites;
and, hence, ths United States, if they are so disposed, can operate through
those favorite banks as effectually on the People of the States, as they could
by the United States Bank. You have all the evils of the United. States
Bank without any of the advantages; you also throw into circulation a hetero
geneous masss ot paper that no body knows any thing about, issued by esta
blishments of whose solvency you know nothing. W ill the gentlemen from
N orth Carolina, or] the members from Massachusetts, willingly receive their
per diem in their own State paper? 1 believe they would not—yet the effect
of using State banks, for revenue purposes, will be to impose this paper on
the People of the United States.

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BANK OF T H E U N ITED STA TES.

It is a rule, sir, which I have prescribed to myself, in the management of
the concerns of others which may be committed to my care, in any character,
to conduct them in such a manner as to produce no individual distress or loss,
which may not be fully compensated by an equivalent certain public good;
and I shall not relinquish the observance of this rule on this occasion. We
are informed by various gentlemen, who are charged with the representation
ol the more commercial States, that great individual distress will be the cer
tain consequence of a refusal to renew the charter of the United States Bank;
and that the distress will fall, with accumulated weight, on those who have
poverty and the frowns of fortune to struggle with, is evident; and, when I
commiserate the woes felt by the citizensfof every part of our country, my
attention, as it ought, is particularly drawn to the losses and distress which
will be felt by my immediate constituents.
If this charter is n o t r e n e w e d , it is my deliberate opinion that the farmers
of Kentucky will sustain a lo ss thereby to the amount of near 2 0 0 ,OOOdollars;
and I will now attempt to show that this opinion is not altogether chimerical.
I am unable to state, with any great certainty, what is the amount of circulat
ing medium of the United States; nor, indeed, is it necessary for me to state,
with great accuracy, the precise amount. I suppose the whole circulating
medium of the United States to be upwards of 5 0 ,0 0 0 ,0 0 0 dollars, aud that
of this sum the Bank of the United States circulates one-third. It is a fact,
frequently stated in this House, and which stands undenied, that money, or
circulating medium, is scarcer in the United States, at this time, than it has
been for several years past, owing, perhaps, to the unproductiveness of com
mercial enterprise; or, if you please, to the natural increase of population,
and the proportionate increase of demand for money. By refusing to renew
the charter, you throw out of circulation one-third of the money ot' the coun
try. The necessary and inevitable consequences of this act ot the Govern
ment will be to diminish commercial enterprise in the same proportion, and,
consequently, ship building and ship repairing will be diminished in a like
proportion, and the materials, for this service, will not be wanting. By let
ters recently received from very intelligent merchants of Lexington, Ken
tucky, I am informed that 6.000 tons of hemp will have been raised in that
State in the past year. The snip owners are the consumers of this article; for
not one pound of it goes abroad, and from 6 to 9 ,0 0 0 tons of hemp is the quan
tity consumed in prosperous times in the United States. These 6,000 tons of
hemp, together with what will be brought to the market from other States,
will furnish an abundant supply for the present year, even admitting it to be
a prosperous year. By the refusal to renew the charter you lessen the de
mand one-third at least, and, consequently, you diminish the price ol’ the ar
ticle in the same proportion. But, sir. this is viewing the consequences aris
ing out of the rejection of this act in the most favorable light. If the refusal
to renew this charter should, as some gentlemen apprehend it will, bankrupt
not only many individuals, but also some of the State banks, a general alarm
may take place, which would, for a time, put an end to a ll credit and to all
business. The consequences of such a state of tilings are much to be feared,
and much to be dreaded, by every portion of the community.
It has been stated that the United States’ Bank can be|dispensed with in the
collection of your revenue, and in the management of your moneyed con
cerns. I wish to know how gentlemen can make this statement. I perceive
that General Hamilton, the first Secretary of the Treasury appointed since
the adoption of the constitution, in his argument on the subject,uecidedly de
clares that the bank is necessary for the collection of the taxes, and manage
ment of the fiscal concerns of tne United States; and Mr. Gallatin, the pre
sent Secretary of the Treasury, makes, substantially, the same declaration to
you in his report on this subject.
[Mr. W r ig h t observed, that Mr. Gallatin had, in conversation, said that
the moneyed concerns ot the Government could be well managed without
this bank.] If Mr. Gallatin has so said, he then says one thing and reports
a different thing; and is therefore inconsistent. But 1 take his official report

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211

as the best evidence of his opinion; and these men, having been charged with
the management of the revenue for many years, and having the knowledge
acquired by experience, certainly should know what is necessary and pro
per for the convenient and well management of the affairs of their depart
m ent, and are therefore better authorities on the subject than any member of
this House.
As to the remark made by some gentlemen that this is a party question, I
have only to observe, that, if federalists do right, that can be no sufficient rea
son for me to do wrong, merely to oppose them; and if the suggestion that
this is a party question, is to prevail against reason and common sense, and
parties are thereby to be marshalled against each other, under the banners of
some leader, then, indeed, any thing tnat can say ay or no, is perfectly quali
fied to be a member of this House, and intelligence is laid aside as useless
an d unnecessary. Against doctrine of this sort 1 protest; and perceiving, as
I think I do, great political as well as individual inconvenience and distress
awaiting a refusal to renew this charter, which is not compensated by any cor
respondent public good; and perceiving, also, in the destruction of this in
stitution, a w ant of stability in your institutions, which is a partial verification
of the predictions of the enemies of republican government, which we ought
to refute by our acts, I shall therefore vote against the indefinite postpone
ment _?of this bill, reserving, however, to myself, the light of subsequently
examining the details thereof.
M r. \V . T . B a r r y . M r. Speaker: T he measure now under consideration
is certainly important. It involves principles interesting both as they relate
to the General and State Governments. T he solicitude manifested for the re
newal of the charter; the deep concern that is felt in some of the States; the
serious and solemn manner in which this subject has been considered and act
ed upon by their legislative councils; the general agitation it has occasioned
in the public m ind; nas not failed to command my most serious attention,
should, nevertheless, have been content to have left it to the-discussion of others,
abler and more experienced than myself, satisfied with giving such a vote as
would coinport with the honest conviction of my understanding; but the debate has taken an unexpected course to-day. T he remarks of my colleague,
{M r. M ’K ee ] will not permit me longer to remain silent. As it is my lot to
differ with him on this great question, I must claim the indulgence of the
House for a few moments, whilst I endeavor, in as concise a manner as possi
ble, to state some of the reasons by which I am actuated.
T he baneful effects to result from the dissolution of the bankj the ruin that
is to follow in its train; have been portrayed in the most glowing colors, in a
manner calculated, as it was no doubt designed, to awaken and alarm our
fears. I shall not now enter upon this branch of the subject.
If, as 1 am most seriously impressed, the constitution does not authorize us
to pass the bill, there is a t once an end of the question. It is, M r. Speaker,
immaterial what consequences may result. No pressure of calamity, however
great, can w arrant a departure from, or violation of, that sacred instrument.
I t has been said that this is a party question. T he remark is ju st, so far as
the principles which separate and distinguish the two great political parties in
the U nited States shall be made to bear upon it; not that the declaration of
any man can make it so. I t is measures, not men, that should govern.
I t will be recollected that, early in the history of our Government, the coun
try was divided into two great political parties; the one endeavoring to extend
and increase the powers of the General Government; the other attached to the
S tate authorities, and exceedingly jealous of their rights. U nder this state of
things the constitution of the United States was framed. Soon after the Go
vernment w ent into operation under it, these parties again displayed them
selves in the rules they adopted for expounding the constitution; the one con
tending for that kind of interpretation which would possess Congress with the
most ample powers, sufficient to do whatever political expedience might dic
tate in providing for the common defence and general welfare.

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This latitude of construction was considered by the other party as danger
ous; that it would tend to consolidation; that, in this way, State rights would
be encroached upon and their sovereignty impaired. They contended that the
power of Congress was limited; that it must be confined to those powrers ex
pressly delegated, and to such as were necessary and proper to-carry them in
to execution. That this mode of construction resulted necessarily from the
nature of the General Government, but was settled beyond all doubt by that
clause in the constitution which provides “ That all powers not delegated to
the United States by the constitution, nor prohibited by it to the States, are re
served to the States or to the People;” that, to step beyond the boundaries thus
fixed, would be to enter upon a field of power no longer capable of being de
fined. Such has been iny understanding of the views of the two parties; the
one called federal, the other republican, or democratic, if you please. I speak
of parties as they were at the period I allude to.
It isremarkable, that, upon this very subject, in the year 1791, when the bank
charter was granted, we find the most distinguished politicians of that day
who were on the republican side, opposing it: and they did it under the gui
dance of those sentiments that had originally given rise and character to the
party. For, although they did not admit the utility of the banking system,
yet the great ground of opposition—the strength of their argument—was direct
ed against the power of Congress to pass such a law. It was, sir, upon that
occasion, that Mr. Madison, then a member of Congress, made that perspi
cuous and luminous argument that has been so justly celebrated as defining
and marking out the proper limits of power assigned to the General Govern
ment. I have thought proper to make these preliminary remarks, to show
what was the understanding of this measure at the time of its adoption. That
it was then protested against as unconstitutional. Two articles of the consti
tution seem to be mostly relied upon by those who are in favor of the renewal.
That which gives to Congress the power to lay and collect taxes, duties, im
pacts, and excises, to pay the debts and provide for the common defenee and
general welfare of the United States, or, in other words, the power by which
Congress is to regulate the financial concerns of the nation; and that which
gives the power to make all laws necessary and proper for carrying into exe
cution the powers vested by the constitution in tne Government of the United
States.
It has already been shown by gentlemen who have preceded me, by a
course of reasoning, to my mind unanswerable, that the clause which enablesCongress to pass all laws necessary and proper to execute the specified powers,
must, according to the natural force of the terms and context, be limited to the
means necessary to the end, or incident to the nature of the specified powers;
that this clause was in fact merely declaratory of what would have resulted by
unavoidable implication, as the appropriate, and, as it were, technical, means of
executing these powers. It was further contended, that the true exposition
of a necessary mean was, that mean without which the end could not be pro
duced. if this doctrine is correct, it puts the question at rest; as it has been
most clearly shown that a bank is not a necessary mean according to this ex
position. 1 shall notdwell longer on this head, considering it as already ex
hausted by argument. The word ‘‘ proper” is, in my mind,an important and
operative word in this clause of the constitution. The incidental power to be
exercised must not only be necessary, but proper; that is, it must be appropri
ate and confined to the end in view. If it goes beyond it, if it involves the ex
ercise of a power that tends to create a distinct and substantive thing, which, in
its important operations, is entirely distinct from, and independent of, the pow
er to the execution of which it was designed as a mean, it would most certain
ly be improper. Such an exercise of power would, in truth, be usurpation; and
tlie end proposed becomes a mere pretence for the unwarrantable assumption
of power.
To enable Congress to collect taxes,oflices of deposite merely would be suf
ficient. But instead of confining the incidental power to be employed to the
object it is designed to accomplish, you introduce a new system of policy, that

ON T H E B IL L TO RE N E W T H E CH A RTER OP 1791.

213

has no more connexion with the management of the revenue, than it has with
the power to borrow money on the credit of the United States; with the power
to regulate commerce with foreign nations, among the States, and with the In
dian tribes; or than it has with the power to raise and support armies or to pro
vide and maintain a navy. The power to establish a bank applies equally as
an incident to all the abovenamed powers, and is not strictly appropriate to
either, nor is it confined to all of them collectively. If, under such pretence,
you can erect corporations, our power in this respect is unbounded.
By this act, you form a society of individuals, invest them with extensive
and exclusive privileges, who, instead of being employed as auxiliaries in the
fiscal arrangements of the Government, set up for themselves, and go on upon
a system of money making. They issue notes that become a circulating me
dium, and forms a new species of capital. The institution carries with it a
train of offices, influence, and patronage. It gives rise to an act of sovereign
power, that no Government should ever be permitted to, or can derive by just
implication, that of punishing those who may counterfeit the notes of this bank.
Thus introducing into our code of laws a system of criminal jurisprudence
never contemplated by the constitution.
It will be seen, as we progress in this inquiry, how this measure is calcu
lated to affect the State rights, and to infringe upon their sovereignty.
If it is good policy to establish banks, and I am inclined to think it tends,
when properly regulated, to promote the interest of society, the States will
surely nave a right to claim the benefits that may result from it; because this
right they never have parted from. The profits arising from discounts, the
advantage to accrue from public and private deposites, and the many facilities
this kind of institution affords to society, belong to the States, and ought to be
exclusively under their control. The objects of State policy are infinitely
more numerous than those of the General Government, and deserve equally
to be promoted.
It is said the States are at liberty, if they choose, to establish banks; this
does not remove the objection: if the right is impaired, it is the same in prin
ciple as if it was denied. A branch bank of the United States will alw:vys
have a predominant influence. They will have the benefit of a largo capital;
but the great source of influence results from its connexion with the mother
bank, and a confederacy of branches co-extensive with the United States.
They all move in concert; and, by combining their influence, would, at any
time, be enabled to overwhelm and destroy the small State establishments.
There can be no stronger evidence of the weakness and the dependence of
the State banks upon that of the United States, than the alarm that some of
them now feel at its expected dissolution. It is said, that no danger of this
sort is to be apprehended; that those who have had the direction of tne United
States’ Bank have conducted it properly, and with liberality. This affords
no guarantee that they will continue to do so. Bank directors have the same
passions and prejudices that other men have; the same feelings of jealousy and
rivalship exist in corporate bodies as with individuals; the same struggle for
power and disposition to oppress. State rights require the guardianship of the
constitution; they are not, I trust, to be left to the mercy of a bank directory.
It would, sir, be less objectionable, if the Bank of the United States diffus
ed its benefits equally throughout the different States. But, instead of this
equal and just distribution, it will be found to be confined and partial in its
operations; its benefits will be principally confined to the seaports; it can
only be made to operate indirectly upon the agriculturist and manufacturer.
The direction of this institution will be entirely in the hands of commercial
men; all its power and influence will be lent to them. This, combined with
the power their wealth naturally gives them, has heretofore, and will continue
to give them a decided ascendancy in the councils of this nation. It is be
lieved that this kind of influence lias had its eflect in producing our existing
embarrassments with foreign nations. Sir, the slightest attention to our pub
lic acts will show that there has been a great predilection for commerce; that
it has met with almost exclusive protection and support; whilst little or nc-

214

®a n k

op the

u n it e d

sta tes.

thing has been done for the internal industry of the country; large sums of
money have been expended for the promotion of commerce, whilst our infant
manufactures have been suffered to pine and languish; the enterprise em
barked in this way, never having experienced any kind of encouragement
from the General Government. It is time to remove the causes that gave rise
to this partial influence.
: The power of the States is affected by this measure, in another important
respect. By its means, individuals, who are mostly foreigners, hold large es
tates in stock, without being, in any way, subject to tine control of the State
Government, or paying any tax for its support. Is it just that such exclusive
privileges should be conferred? Is it proper that these men, not the most
meritorious, should be entirely exempt fromthe burthen of taxation, whilst the
true citizen is bound to yield his personal and pecuniary aid?
Another formidable objection that presents itself, is the connexion of this
institution with the Government—a dangerous source of influence and power.
When the People have to pay taxes for the support of Government, they feel
and understand what is going on. If they should be burthened with high
taxes, unless a good reason can be assigned for it, they will remove their
agents, and appoint others, who will act upon a better system of economy. But
give to the Government a bank with a large capital, and you afford a facility
of borrowing, and a source of supplies, utterly incompatible with the genius of
republican institutions. Loans may be had to enable the Government to pur
sue their projects; expensive establishments may be created, and kept up, in
this way, that the people never would have tolerated, had they been directly
called on for their contributions. The ease it would afford of getting money,
would be the cause of repeated applications to this source; and we may readily
perceive how a debt thus created will be constantly accumulating; upon this
subject we have the light of experience to guide us. The English nation pre
sents a sad example. It is true, the proposed capital is too small to create
much clamor at present; but, renew this charter, and it will be augmented as
convenience shall dictate. The capital of the Bank of England was small at
its first establishment, but it increased gradually as the exigence of the Go
vernment required. Sir, whenever the Government shall have become largely
indebted to this bank, it will have acquired an influence over our counsels, the
idea of which is humiliating; an influence that would not only be degrading,
but one that would endanger our liberties, by subjecting us to the control of
a moneyed aristocracy. Permit me now, sir, to notice a few of the arguments
that have been advanced in favor of renewal. It is said, that the practice of
this Government is against the rule of construction we contend for: as an ex
ample, the act concerning light houses, beacons, buoys, and public piers, has
been cited. This is referred to the power of regulating trade. This act is,
in truth, only a mean to carry into execution a power; it is distinguishable at
the first glance from the power to establish a bank. They only tend to pro
mote commerce; they are strictly, necessary, and properly confined to the ob
ject. They go no further than the end in view, not at all impairing the rights
of individuals, or of the States; besides, there is nothing in them uncongenial
with the nature of our Government.
It is further contended, that the law now attempted to be renewed has been
sanctioned by the States, and acquiesced in by the People- That, although it
might not originally have been necessary, it has now become so. I can see
strong reasons why this act, granting a charter, should not be repealed, al
though unconstitutional. The system had been introduced; a pledge was
given to the stockholders; they invested their funds upon the faith of its
continuance for twenty years; it was a contract for that period; to have
violated the public faith would not, perhaps, have been consistent with
sound policy. There is a difference between repealing the law and suf
fering it to expire. The stockholders have not even the color of a claim
upon us for tne continuance of the charter after the expiration of the
twenty years. The contract has been fulfilled and completed. They
are, or should have been, ready to close their business- Sir, if this doc

ON T H E BILL TO REN EW T H E C H A R TE R OF 1791.

215

trine of acquiescence is correct, many other obnoxious laws that have been the
cause of much heat and ferment throughout the nation, might, in the same
way, be proven to be constitutional, and might, hereafter, be received, for the
same reason. It is one of the first principles of a representative government,
that a subsequent legislature have tne power to change the measures of a pre
ceding one; and it often is necessary they should do so. No State lias ever
sanctioned this law by a direct declaration to that effect. Their approbation
has been inferred from their having passed laws to punish counterfeiters.
Sir, the States cannot repeal an act of Congress; they could not prevent the
circulation of the notes of this bank. It was, therefore, essential to pass such
laws, in order to secure and protect their own citizens from fraud and impo
sition.

I t seems clear to me, that an act of Congress, not originally constitutional,
cannot be made so by any lapse of time. If, in 1791, it was unconstitutional,
it m ust be so now. T he constitution does not change with the times. A re
publican administration should not be permitted to exercise a power that they
would have denied to the other party. T he love of power is natural; man is
prone to abuse it. I confide much in those who are, at present, at the helm,
Dut 1 will not trust them beyond the jimits of the constitution. “ W ith unre
mitting vigilance, with undaunted virtue, should a free people watch against
the encroachments of pow er, and remove every pretext for its extension.”

The evils to result from tne dissolution of the bank, have, in my opinion,
been greatly exaggerated: but, sir, this alarm, if real, impresses my mind
differently from what it does that of some others. The deep interest excited;
the feelings that have been awakened; the memorials constantly flowing in
upon us; show the important bearing of this institution, and the great interest
it has already created.
If we look forward to a period when this charter is to expire; if ever we
intend to shake off this illegitimate offspring, now is the lucky moment; its
embrace, though strong, is not yet deadly. Although some of its advocates
threaten, and endeavor to coerce us into the measure, by the alarm they have
excited, the stockholders yet approach in the respectful attitude of momorialists; we are yet at liberty to act freely; but, if this charter is renewed, depend
upon it we shall not be able, hereafter, to stop its progress. Pretences will
not be wanting to extend its limits, and augment its capital. The poison, al
ready tasted, would soon reach the vitals of this Government^ our efforts,
hereafter, for relief, will be friutless; they will only serve to irritate and in
flame, until, at length, it will be found that we must tamely submit.
Mr. F i n d l e y . —That Congress have a right to refuse the renewal of the
charter of the bank, or to modify it as they think proper, is admitted on all
sides. He himself wished the bill to be much changed from what it is at pre
sent. He would be even willing to join in rejecting it, for the sake of trying
an experiment, if he was not convinced in his own mind, that the experiment
woul(l cost too much. We know how far and how well the present bank had
answered the intention and the end for which it was instituted; but suppos
ing another national bank to be instituted, which he knew was the wish of
some members who were opposed to the present one, very great both public
and private distress must take place in the mean time, without a certainty of
being better served in the end.
Whatever might be said on the ground of expediency, against renewing the
charter, he had been much astonished to observe the bill so much opposed, as
being contrary to the constitution. When the law for incorporating the bank
passed, it was opposed in the House of Representatives by a minority—about
one third of the members voted against it. Though he was not then a mem
ber, yet he attended to the discussion, and he knew that those that led the
opposition were equally opposed to all State banks, of which there were then
but three in the United States, and none of these were instituted to promote
the regular, permanent, and successful operation o f the finances o f the State,

as some of tbem at least have since expressly been. He was sure that the

21G

BANK OF T H E U N ITE D ST A T E S.

Bank of North America, the first that had been incorporated, was, perhaps,
from the circumstances of the times, considered rather as injurious than bene
ficial to the State: therefore, that a bank should be useful in conducting the
revenues of the United States, was, at that time, in the opinion of many, at
least doubtful, or a mere theory; but, no sooner was the experiment fully
made? than all parties acquiesced in its constitutionality and usefulness. Its
constitutionality has been recognised by all the branches of the General Go
vernment, through all the changes of parties and administrations: this could
be made evident by numerous instances.
It is true, an honorable member from N ew York (M r. P o k t e r ) has denied
this, and alleged that the reason why it was acquiesced in or-not repealed,
was, because it was a contract which it was necessary on the part of the Go
vernment to fulfil.
Mr. F . said, that a contract contrary to the constitution was void in itself,
especially where no consideration was given; that our courts of justice, who
were judges both under the law and the constitution, would set such cont racts
aside, much more an act of incorporation, for which 110 valuable considera
tion had been paid, as the consideration only consisted of the services that
were to be rendered, and which, if contrary to the constitution, ought not to
be accepted. So far, however, have, the courts of justice been from setting
this law aside, that both Federal and State courts have, under the authority
of both the Federal and State laws, made decisions for its protection. Or, if
it had been contrary to the constitution, Congress ought to have repealed the
law by which it was granted; there was a precedent to that purpose in this
country. The Bank of North America was incorporated by Congress at a
period of alarming pecuniary distress; but knowing that it nad no authority
to give it effect, Congress recommended the incorporation of it to the respec
tive States. Pennsylvania and Delaware only complied with the requisition;
the charter gave an exclusive monopoly in jperpeluity. Another company, in
1784, applied for a charter; the Bank of North America opposed their claim
with success, in right of their charter. The succeeding Legislature consider
ed the exclusive right and the perpetuity to have been granted in violation of
the constitution, and therefore repealed that charter, and afterwards granted a
limited charter to the company. Political parties have changed since the
U nited States’ Bank was incorporated; those that now prevail nave been the
majority about half the tim e; yet so far have they been from repealing the
charter, that they have extended its powers, and availed themselves of its ac
commodations. It was a mistake to consider the authority to incorporate the
bank to be a separate and distinct power, and therefore not granted to Con
gress. It was not even, as some members have called it, a constructive
power, or power by implication. I t was inseparably included in the powers
expressly granted, as the means to accomplish the end; for it is in all cases
adm itted, that where an object or duty is enjoined, the means of accomplish
ing the object or of performing the auty are included. T his is too plain to
require proof or illustration.
T he powers vested in Congress, or the duties enjoined, are. to lay and col
lect taxes, duties, imposts, &c. to pay the debts of the U nited States, &c.; and
the object prescribed is the public good and general welfare of the United
States; they have also the power to provide for raising and supporting an
army and navy, and for borrowing money 011 the credit of the United States.
Surely, no member will say that the safe-keeping, the most cheap and ce r
tain manner of collecting the revenues, and the most expeditious and the least
expensive manner of transmitting them to the destined places, and paying
them to their appropriate uses, are not included in the beforementioned powers;
if they are not, the powers themselves are a nullity, because they cannot be ex
ecuted. Custom house bonds are, by law, lodged in the banks for collection.
I t is admitted that these powers included a choice of means and a discre
tion in the application of them, as they did in the various objects of taxation.
Congress might have instituted numerous offices of deposite, and paid high
salaries, and required sureties equivalent to the risk, and they might have

ON THE BILL TO RENEW THE CH ARTER OF 1791.

2 17

employed public officers, sufficiently protected, to transm it the money to the
various places where it was required, and to pay it to the appropriate uses.
T o this method, no doubt, nations had resorted before banks were introduced;
but, surely, this method would be more unsafe, more uncertain, much more
expensive, and attended with much more delay, than the agency of a bank,
whose capital gave sufficient security, and whose paper is in great circulation
and credit. Therefore, whatever might have been the different opinions, b e
fore the experiment was made, yet, having been successfully made, it is evi
dent that it was the best means to accomplish the end.
T he honorable gentleman from New' York, however, has adm itted that
banks are necessary and proper for collecting, transmitting, and safe keep
ing of the revenue, but alleges that the State banks are sufficient for that pur
pose. This, Mr. F . said, as he understood it, was giving up. in a great mea
sure, the point. If the use of banks was necessary to carry the revenue pow
ers into effect when this charter was given, and w'hen there were not banks
south of Philadelphia, and, it is believed, but two east of it, there not being
State banks sufficient at the period when the charter in question was granted^
in any degree adequate to the purpose, the Bank of the United States was a
necessary means or instrum ent for executing the revenue powers vested in
Congress, and therefore not contrary to the constitution. If, at that time, it
was not, then, it may be asked when it became so?
T he State banks are not, by their charters, in any degree responsible to
Congress; they are not obliged to inform it of the amount of their capital, or
their debt, or paper issued, as of their deposites. Surely, no member would
agree to deposite the revenues of the United States with, or transm it them
through, institutions, of the solidity of whose credit they were not well in
formed. H e did not mean, however, to say, that it was not possible to se
lect such a number of State banks as would be sufficiently safe for deposites,
or that such a connexion of these banks might not be formed, as would make
them responsible for the safe and speedy transmission of the revenue, and
give the necessary information to Congress of the shite of thejr affairs; yet,
supposing this was all completed, this union of banks would be in so far a n a
tional bank, subject to the same objections, and to the following defects: T he
rates of all these banks would not pass through the whole of the United States,
and the continuance of their charter would be at their discretion, and on the
term s prescribed by the respective States. Indeed, it would occasion such a
competition between the different States and the United States, in conduct
ing their respective revenues, as might be inconvenient.
H e did not mean to depreciate the State banks; many of them are worthy
of the highest confidence, as far as their power and operations extend; but,
surely, it wi 11 not be said that all of them are so. T he paper of some of them
is well known to have depreciated; the paper of many others are current but
to a small distance; they will not carry many of the" members of this House
from their homes to this place; the paper of none of them will pass through
out the United States.
M r. F. said, there had been an unusual liberty taken on this question, of
introducing party epithets. He did not really know what that had to do with
the question. T he parties connected with all banks, are the men that have
money to vest in them for their own profit and at their own risk, and those
who have credit, on which they receive accommodations from the bank; and
there is a third party, who have neither money nor credit, and who have no
interest in banks further than the accommodations received from them some
times enable their employers to pay them their wages the more promptly.
You may call these parties federalists, republicans, aristocrats, or what you
please; but those who have the most money, and are the greatest stockholders,
will eventually have the direction of the banks, and those who have the great
est credit will obtain the largest accommodations. W e know of some banks,
instituted by one political party, which has come under the direction of ano
th er; they purchase the stock in m arket. W e find, indeed, great opposition
to the renewal of the charter of this bank, but not a single charge of miscon-

2 13

BANK o r THE UMITED ST A TES

duct, except the alleged appointment of two improper directors in a distant
branch. Surely, the bill might be so amended as to give reasonable security
against such appointments. lie was but little acquainted with the branches,
but he had heard no complaint against the direction of the mother bank, and
was well assured that the republicans of Philadelphia had as liberal accom
modations, and that as much or more of their paper was discounted there, than
in any other bank; which, if the charter is not renewed, they must then
redeem.
Congress is vested with the power of receiving money on loans, and, conse
quently, of providing the best method of procuring loans: and it is univer
sally admitted that banks are the best sources from which to receive loans,
without delay, without difficulty, and at moderate interest, and for no longer
time than the loan is necessary. In the early stages of our Government, our
revenue was small, and our debts and expenses great. In addition to these,
we soon became involved in a tedious, very expensive Indian war. I t con
tinued five years. During this period, numerous loans were made from the
bank, till more than three-fifths of the whole capital was loaned to the Go
vernment at common interest, payable at discretion. Another crisis of diffi
culty and expense arrived, viz. hostilities with France. Money was wanted;
the bank could advance no more, it had already loaned too much. T he Go
vernm ent was obliged to open books for a loan at eight per cent, interest, ir
redeemable for ten years; but few years had passed before money could have
been borrowed at a reduced interest for its discharge. N ay, but a few years
had passed till it could have been discharged at the treasury, if it had been
redeemable; much of it, as well as bank and other stock, was sold to pur
chasers in Britain and Holland.
I t is believed by many, that a loan might be made to a large amount now, on
better term s; but when he considered the great drain of specie from the coun
try during the last year, the losses in Europe, and the unusually small amount
ot specie imported, or that was in the vaults of the different banks, he thought^
there was little encouragement to try the experiment. Such loans m ust be of
a money that would pass throughout the United States for all payments.
Mr. F. said, that, h aving entered more largely, on a former occasion, into
this question, he did not intend to detain the House now. He had, as much
as he could, avoided repeating what he had said formerly, or what others on
the same side of the question had expressed. H e had, therefore, avoided
mentioning the public and private distress that must result from the immedi
ate dissolution of this bank. Even admitting that the specie stock purchased
by foreigners, believed to amount to $7,000,000, should not be immediately
removea from the country, yet it would be diverted from its accustomed
uses; and, instead of giving relief as at present, might speculate upon our dis
tresses. H e believed that suddenly calling $15,000,000 of current medium
out of the usual circulation, could not avoid, in any country, being the cause
of at least a great proportion of public and private distress. Therefore, he
could not, by his vote, support the measure. I t will have other inconveniencies, which have not been mentioned. W hen the bank winds up its busi
ness and makes a transfer to trustees, it is not, by charter, obliged to call in
its notes from a circulation that is widely extended throughout the United
States. T he holders, indeed, will have their remedy at law against the trust,
but this may be a tedious and inconvenient remedy for many note holders.
I t has been asserted by more than one member, that the institution of the
bank was the foundation or source of the party spirit that lias unhappily pre
vailed in this country. H e wished, before he sat down, to correct this mis
take, passing what prevailed before the Government took place. I t was the
funding system, in the manner it was conducted, and the extent to which it
was carried, and the consequent speculations, that was the source of that un
happy party spirit; but, especially, the assumptions of the State debts belore
they were liquidated or the amount known, and which, after having been once
rejected, was carried by a very small majority; as a fund for this debt, the excise
and other unpopular internal taxes became necessary- I t is well known that

ON T H E BILL T O RENEW T H E C H A R TE R OF 1791.

about $3,500,000 of this assumption is vet due to the United States from the
States that were paid that much more than enough, and which no method has
been, nor probably can be, found to recover. U nfortunately, almost every
session, some measures are so conducted as to keep alive, if not promote that
ruinous party spirit by which our national character is degraded, and our
measures embarrassed. lie questioned much if rejecting the bill, without even
attempting to amend it, is calculated to allay that unhappy party spirit.
J anuary

22, 1811.

The motion for indefinite postponement under consideration—
Mr. M c’K im spoke in favor o f it? M r. G old against it; Mr- J ohnson for
it; and M r. S h ef * et closed the debate for the day, in a speech against the
motion.

Mr. M c’Kim.—Mr. Speaker: The subject now under discussion involves an
im portant constitutional principle, which presents, to my mind, an insupera
ble objection to the passage of the bill, i t is not, however, my intention to
enter on a diccussion of the constitutional principle which has a bearing on
the bill. T hat part of the subject has been ably and critically discussed by
my honorable friend from N ew York, (M r. P o r t e r ) and by other gentlemen,
who have spoken on the same side of the question. On this part of the sub
ject, sir, I will only observe, that a former Congress haying decided the con
stitutional question fo r themselves, by passing the law to incorporate the bank;
the tribunals of the nation having sanctioned it, as it respected themselves; or
the several States having, without rebellion, but not without m urm uring and
complaint, acquiesced in such decision, cannot quiet my conscience, nor sat
isfy my mind on the subject. T he question now recurs; I have to act on it,
and I must decide it for myself.
I will now endeavor, M r. Speaker, to submit to the House a few desultory
observations, which have for their object to explain some of the practical
operations of the banking business; to shew the probable effect of the dissolulio n o fth e bank charter; and to answer some objections which have been
raised against its being suffered to expire.
I t has been urged as a motive for the renewal of the charter, that the con
cerns of the bank have been conducted with impartiality to persons of differ
en t political opinions. In answer to this, I beg leave to read a part of a speech,
said to be delivered on the floor of this House, and reported in one of our pub
lic papers; and also a letter from a gentleman in Baltimore, to whom the
speech alluded. “ I t had been asserted (says this speech) during the last
winter, that the branch bank in Baltimore had accommodated only one par
ticular class of political gentlemen. H e (M r. S t a n l e y ^ had it from good
authority, that a distinguished republican house in Baltimore, of which a
member of the Senate was partner, had obtained a greater portion of discounts
than any other merchants in that place.”
T he letter to which I alluded, is in the following words: “ Dear Sir: W ill
you have the justice to state to the House of Representatives, as early as
you have an opportunity, and in direct contradiction of the unfounded asser
tion contained in the enclosed? that the republican house in Baltimore, of
which a member of the Senate is partner, has received buttw odiscounts from
the branch bank of Baltimore, to wit: one of nineteen hundred and sixteen
dollars and fifty-five cents, and one of eighteen hundred dollars; the first on
the U til of A pril, and the second on the 14th of M ay, 1798; although the
transactions of the House with that bank amount to nine hundred and thirtysix thousand three hundred and tw enty-two dollars fifty cents.”
[H ere M r. S t a n l e y explained. Perhaps i t had not been his good fortune
to be understood in the remarks which he presumed were alluded to by M r.
M ’s correspondent. I t was his meaning, if not his words, that, although par
tiality had been charged in the distribution of the favors of the branch bank

220

BANK OF THF, U N ITE D ST A T E S.

of Baltimore, lie had been informed, from good authority, th at, of its discounts,
more than one half had been obtained by gentlemen of politics opposite to
those of the bank; and that, in the purchase of bills of exchange, this bank had
purchased a larger amount from the house alluded to (Smith and Buchanan)
than from any other house in Baltimore.]
I am satisfied, said M r. M . with the explanation. I have not introduced
the speech and letter so much to support my argument, as to do justice to my
friend; nor can I vouch for the correctness of the report.
I t has been stated that nineteen or tw enty millions of dollars are due to
this bank, whose charter is now about to expire; that, if the charter is not re
newed, it will produce great distress, and general bankruptcy wilt ensue;
that the bank, in winding up its concerns, can receive nothing but specie,
which will exhaust the resources of the other banks and individuals, and there
by produce a result the most disastrous to the mercantile interests of the
nation. This statem ent is incorrect. By the returns from the treasury, it
appears that no more than $1,318,024 was due to the bank; and that the bank
is indebted to the public and to individuals, in the sum of $11,542,320; and
all the offsets it had, against the heavy debt, are the above sum, due fr o m
different Stale banks, of $1,318,024.
M r, M. illustrated this position by the following detailed statem ent of the
account, which he read in his place:
T he bank owes to Government for deposites,
- $2,493,362
I t owes to individuals for deposites,
3,891,680
I t owes for its notes in circulation,
5,157,378
Total amount of its debts, D educt from the amount of debts due by the bank, its only offset,
Leaving a nett balance of debts due from the bank, of -

11,542,320
1,318,024
- 10,240,296

T his, sir, is the present situation of the expiring bank, by its own showing.
Gentlemen have involved this subject in obscurity, by supposing the fifteen
■ millions of dollars, held by the bank in discounted notes, as a debt due to the
bank. Sir, there is not one cent of these notes due except a small sum that
is in suit. If these notes were really due, it would materially change the
state of the account. It would then possess the means of spreading terror,
if it wras disposed unnecessarily so to do; but we must take the account as it
is; and if we would know how it stands, at any particular time, we must
judge of it as we do of a race, by viewing both sides at the same point of time.
Judging in this way, we find that this bank now owes a nett balance of up
wards of ten millions of dollars.
Now, sir, I would ask. Can any gentleman believe that it will be in the power
of a bank, thus heavily indebted, tar beyond the extent of its present means,
to spread such terror, and produce such distress, as has been stated, when it
is deprived of the public and private deposites, of which it will be deprived,
when it is known that the charter will not be renewed? It is true, that, while
these funds, the debts it owes, and a continuance of the public deposites, are
suffered to remain in its possession, it may do much to create distress; while
these funds are in its hands, it can employ the whole pecuniary resources of
the nation to coerce otiier banks and individuals into its measures, if it were
so disposed.
I wish it to be clearly understood, that I do not mean to say, or to insi
nuate, that this bank had unnecessarily used coercion, to create distress, or
to obtain the object of its wish—a renewal of its charter. But, while these funds
remain in its hands, they produce this effect. They render it a measure of
prudence and necessary precaution in other banks, not to issue their paper, to
aid the customers of this bank, or others indebted to it, to retire their notes;
and this operates powerfully on my mind, as a reason for urging a speedy de
cision of the question. I am of opinion, if this question is settled, let it be
determined as it may, that all the difficulty and distress resulting from the

ON T H E B IL L TO KENEW T H E CH A RTER OF 1791.

probable dissolution of the charter, will soon be dissipated, and things resume
their usual course. I f the charter is not renewed, the expiring bank will lose
its power of holding other banks in check, by the withdrawing of public and
private deposites; which, being placed in other banks, will increase^ their
means of giving aid to those who nave paper to retire from the expiring bank.
T his bank having now no other than its own natural means, will no longer be
an object of dread to other similar institutions; they may now freely lend
their aid to relieve the distressed, and their increased means will be adequate
to the object.
It has been suggested, that the capital of this bank, owned in Europe, will
be remitted in specie, if the charter is suffered to expire; and (hat such a
drain of specie would be severely felt by the banks, at this distressing time,
in our commercial concerns. There is 110 necessity for rem itting this capital
in specie; and I do not believe one dollar would be so rem itted, because it
will not be the interest of the proprietors that it should. Exchange is low;
I believe bills might be purchased at 7j a 10 per cent, below par; and if re
m itted in specie, the freight and insurance could not be less than 5 per cent.
A remittance in specie would then be 12$ a 15 per cent, less favorable than
to remit in bills. Men are usually governed by their interest, in transactions
o f this kind; and I do believe that the managers of this stock, i f it is to be
remitted to Europe, would remit it as other gentlemen do, in bills. B ut if it
must be rem itted in specie, it is probable there is some unknown cause, ope
rating on remittances generally, that gives an advantage to remittances in
specie; and if this be the case, the whole amount of our imports from Europe
will probably be thus remitted. T he amount of our imports from Europe,
annually, is probably not less than eighty millions of dollars; and if specie
m ust be shipped off, to pay for these imports, it will not add much to our dis
tress, to let the bank capital go with it; but, I am of opinion,J that one dollar
will not be shipped to pay this stock.
I t has been stated by my honorable colleague,’ (M r. K f.y) whom I do not
now see in his place, ( and 1 regret that I do not, that I m ig h t be corrected i f
I m isstated what he said) that fourteen millions of dollars would be thrown
out of circulation, if the charter of this bank was suffered to expire; that the
bank discounted fourteen millions of dollars; and therefore must have issued
its notes to that amount, in payment for the discounted paper. This is incor
rect; one half of the discounted paper, it m ight be fa ir ly estimated, was of
what is denominated accommodation notes; and for this portion of the dis
counted paper, no money goes out of the bank after the first renewal; but, on
the contrary, money is brought into bank in this part of the business, to pay
the interest, or discount, on these notes. I beg leave to explain to the House
the nature of what is termed accommodation notes. They are notes for which
no value has passed; they are given by the m aker of the note, to accommodate
the receiver of it, on an understanding between them, that, when due, it will
be taken up by the person who received it; and discounts on this kind of
paper are in the nature of a permanent loan, so long as the person accommo
dated requires, or as it may be convenient for the bank to continue it, the
note being renewed every sixty days, and the interest paid thereon. B ut the
proposition is equally incorrect, as it relates to the notes dircounted. which
were given on some actual transaction in business; notes are not issued by the
bank, to the amount of the real paper it discounts; money is constantly com
ing in for notes that fall due; and in the course of trade, it frequently happens
that the money paid, in one week, 011 discounted notes, is, the next week,
by various w indings and changes, again in bank, to discount nearly a like
amount.
T he real diminution of the circulating medium, that will result from the
dissolution of the charter, will be fiv e millions o f dollars. T he report from
the treasury, laid on our tables, states that the bank has five millions of dol
lars of its notes in circulation, and these of course will be paid off and des
troyed, when the bank ceases to act; and, as it will then receive no more d e
posites, the means of other banks will be enlarged: whereby they may issue

222

BANK OP T H E U N ITE D ST A T E S.

an increased amount of notes, perhaps nearly equal to the extent of the dimi
nution that will result from the decease of tne charter.
I will repeat, sir, what L before said. W hen the question of the charter is
settled, the difficulties and distress that now exist will soon cease, and an
accommodating disposition will take place; the expiring bank will then relin
quish its pretensions to receive nothing but specie in payment; it will see the
necessity of receiving payment in the paper of other banks that are in credit;
it will receive payment in such bills as other banks and individuals receive
freely. And why will it do this, when it has a right to insist on specie? Because
it will be urged to do so, from interest and ,necessity. I t has a large debt,
that will be shortly falling due from its customers, and how will they be able
to pay, if the bank shall draw all the specie into its vaults, and keep other
banks in check, so that they can afford no aid to its customers, to retire their
notes when they fall due. The specie cannot be wanted by the expiring
bank. Every object of winding up, remitting, and paying its capital, can be
managed to equal advantage without it. A nd will this bank, without a motive,
and in opposition to its own interest, endeavor to produce distress, by thus
unnecessarily drawing the specie into its vaults? Certainly it will not. B ut,
if it should act so unadvisedly, who is to be the greatest sufferer? W ho has
a greater interest than itself, in facilitating the payment of debts? None have
a greater stake at hazard than this bank; and I venture to say, that none will
be more disposed to promote the general convenience and prosperity, than it
will be. I have no fears of this spectre of misery and distress, that has been
artfully conjured up, to alarm us into a renewal of the charter.
My honorable colleague (M r. K ey ) has made an eloquent display of the
benefits of banking establishments, in our agricultural improvements, our
manufactures, and ship building; and if this bank was put down, the effects
would be severely felt, in the reduced price of produce, and in our improve
ments generally.
I accord most heartily with the honorable gentleman, as to the benefit of
banks, to a reasonable extent. N o one is more perfectly convinced of the
benefits resulting from them than myself; but 1 deny that such injurious
effects would be produced, by suffering this charter to expire. Is there no
other bank but this one, founded on foreign capital and administered, more
or lessj, under foreign influence, that can produce and perpetuate these be
nefits? Surely there are others as capable, and as much to be relied on, as this.
The capital of this bank forms but a small portion of the aggregate bank capi
tal of tne nation; and if' its charter should expire, the benefits mentioned will
not be lost. No specie will be destroyed, or.sent out of the country, by its
dissolution. Specie is the basis of bank capital; and if we have specie to
meet them, we can easily make bank notes enough, without the aid of this
bank. T he bank notes that will be thrown out of circulation, are all that
will be lost by the dissolution of the charter; and if we have specie, we can
soon supply their place; there is no scarcity of paper among us.
The charter of this bank was granted for a limited tim e; the privileges and
immunities it granted were great. T he interest it yielded on its capital and
its credit, are liberal; and the increased value the charter gave to its stock was
fjreat. This stock, originally only ten millions of dollars, soon became worth
fourteen millions uuder the charter. T he company have enjoyed these bene
fits in the fullest extent, without molestation; their chartered rights have not
been infringed or violated; and the charter is now about to expire by its own
limitation. And this valuable inheritance of benefits, about to descend,
with the death of the charter, to the People of the United States, will be
come their joint property. About seven tenths of the present stockholders
are foreigners; and shall we, the guardians of the rights and interests of the
American People, perpetuate these benefits to foreigners, by a renewal of the
charter to them, in preference to those whose interests we have been chosen
to protect? Persons unconnected with the public business, might, perhaps,
wink at such an act; but if we, in our representative capacity, should do it,
will it not be to record our infamy?

ON T H E BILL TO RENEW T H E CH A RTER O F 1791.

223

U nder these impressions, M r. Speaker, I am prepared to give my vote for
an indefinite postponement of the bill. But, if the section stricken out in
Committee of the W hole shall be reinstated, and the bill shall come to a final
vote, I must record my name against its passage.
M r. G o l d .— M r. Speaker: Although this question has long engrossed the
consideration of the House, [ must ask the indulgence of the House to the
observations I may offer; I will not trespass on your patience.
The question of expediency, together with various extrinsic topics, I pass
by unnoticed; on these, let the ju d g m en t, and not the feelin g s, of the House,
which have been so much addressed through ex parte statem ents and sugges
tions, determine.
On the great constitutional question, involved by the bill on your table, it
is the fruit of my best reflections, it is my deep conviction, that the agency
o f a bank is necessary to the adm inistration o f the finances o f this country;
that it is eminently necessary to the great exigencies o f war. This is the
te st; on this pivot rests the question. In coming to the conclusion I have,
sir, I disclaim the doctrine of implication o f powers; of constructive powers;
now rendered so odious and so unjustly imputed to those who maintain the
constitutionality of this bank. I ask only the application of a plain simple
rulers which is as old as first principles; as extended in its operation as the
empire of Jaw; to be found in all codes, applicable to all instrum ents, as well
to conventions between States as to the contracts of individuals.
I t is, that, w ith the end is given, inseparably given, the means; that, with
the express powers given to this Government is also given the means necessary
to carry the Government into successful operation; not merely to move the
wheels, but to give an effectual impulse, necessary to the exigencies of the
country- W hen gentlemen survey the extended Department of the Treasury,
the wide theatre of the public expenditure, commensurate with the United
States; the daily transmission of moneys (to satisfy the'public demand) in
every direction, to the furthest limits of the Union; to the frontiers; to your
garrisons; to places with which there is no commerce, on which bills of
exchange cannot be obtained; can they avoid seeing the treasury involved in
the utmost embarrassment by withdrawing the aid of a banking institution?
Such embarrassment to my mind is inevitable.
B ut, sir, if doubts could exist as applicable to a state of peace, in the great
and trying emergencies of war, there is not, I did hope, room for diversity of
opinion; the necessity of the institution in my conception is em inent, is indis
pensable. M oney is the sinews o f war; for w ant of it, to satisfy a needy dis
contented army, the most important operations of a campaign have been
arrested, and tne most disastrous results produced.
Our own country, sir: the patriotic army of the Revolution—and one more
patriotic, 1 fear, we sliall never see—furnished one, if not more, instances of
discontent and actual mutiny for w ant of pay (for w ant of that which this
institution could so promptly furnish) which was not appeased without resort
to military execution.
However pacific in its policy* let no nation promise itself continued exemp
tion from w ar; history gives no assurances of this kind; now ise Government,
in its policy and institutions, ever lost sight of a state of war. In case of
internal dissensions; in public convulsions, the prompt aid of a bank may be
equally necessary. It is the observation of a distinguished writer who had
well considered the events of the Revolution, that the independence of this
country was in no small degree indebted to the Bank of N orth America.
B ut it is said, that the best resort of Government is to the purse o f in d i
viduals; that this source will be found abundant. I t is, M r. Speaker, on
public emergencies; in times of public convulsion: under the severe pressure
of war, when ready supplies of money become indispensable to Government;
and it is a t such a period that alarms spread and distrust seizes on the com
m unity; it is then that the moneyed man withdraws himself, places his cash in
a strong box, and not unfrequently commits it to the earth, beyond the reach

224

BANK OF T H E U N ITE D ST A T E S.

of Government. W e have no power of draw ing the Jew's teeth; no resource
in a.forced loan.
In the course of debate on this bill, it is not a little amusing to observe the
desperate efforts, the contradictions and inconsistencies, which gentlemen, in
their zeal, fall into. A t one moment it is most strenuously insisted that no
thing short of an express provision in the constitution to create corporations
can w arrant the establishment of a bank; the next moment it is adm itted, and
strange indeed had it been denied, that, if a bank be a nccessary mean for the
execution of the delegated powers of the Government, then must it be consti
tutional.
The most fruitful source of error, M r. Speaker, is in the palpable misinter
pretation of the term “ necessary,” in the constitution; it has been reiterated,
again and again, under this head of the argument, that a mean, to be necessary,
m ust be absolutely, indispensably so, without which the operations of the
Government would be arrested. Now, sir, all this is contrary to the sense
in which that adjective is used by the most approved writers, and in direct
violation of the elementary principles of our language. I f gentlemen will
take the trouble, and I invite them to do it, to recur to the best w riters and
philologists, they will find the term used in a sense implying only w hat is
needful or requisite, and not what is extremely so or indispensable; and why,
sir, should it be extended beyond the above limits? Is it not an adjective o f
comparisonP for the argument has carried us back to our schools. Is it not
in every day’s use, and correctly so, that one thing is necessary, another more
so, and a third imlispcnabhj sop Have we not seen here, upon this floor, a
member rise and call for the order of the day on a bill as necessary to be acted
on, another member call for one more necessary, and a third for one absolute
ly or indispensably necessaryP And yet, sir, gentlemen continue to urge
upon us, that necessary, in its positive, uncompared slate, imports tne
superlative, and means indispensable. Such arguments, sir, not only pros
trate the bank, but subvert the very foundation of language. Again,
sjr, it is said, th at no mean is given by the constitution, it the opera
tions ol Government can possibly be carried on without it. Is this
dishonor to be done, sir, to the memories of those wise men who framed
our excellent constitution? W as it the height of their ambition, the fruit
of all their labors, to give the country a lim ping ; halting Government,
to move with a snail’s pace; to give to the wheels an impulse the least possi
ble competent to move them? Upon this argument, sir, the Government itself
ought not to have been established at all, as, without it, the country might
have subsisted; we might probably have defended our territory and retained
our liberties, at least, lor a considerable period; we might have moved up and
down, and consumed the acorns o f our forests. A higher ambition moved the
worthies who laid the foundations of this goodly fabric of Government; and
I will not hesitate to honor them so much as to say, that they intended to give
to the Union a Government for attaining the highest degree of political pros
perity, which the condition of the States and the nature of a federative com
pact is susceptible of. Such, sir, in my apprehension, was the object of the
constitution; and I beg leave to add, that this object may be carried into effect,
without touching the rights, the interests, or happiness of those States. Nay,
sir, the best interests of each and every State in the Union imperiously d e
mands of Congress, in despite of all the covert movements of State banks
and State politicians, independently, to carry into effect the bill on your table.
L et us not, sir, shut our eyes to the quarter from whence danger threatens—to
the interests and ambition o f States, who, assuming a control or influence
over the Representatives o f the People, would, in effect, dictate to you what
course you are to pursue. H ere, sir, at this period, lies the danger to the con
stitution. W e are arrived at a crisis, when it is considered almost an act of
hardihood to vote, on this question, in opposition to the wishes of the State to
which a member may belong, signified by a resolution of the Legislature. If
this influence, sir, is to prevailjover the councils of the Union, then, indeed,
are we degraded, our sovereignty lost, and all the weaknesses and maladies of

ON T H E B IL L TO RE N E W T H E CH A RTER OF 1791.

225

the old confederation returned again upon this body politic. I repeat, sir, if
this bank shall fall, it will owe its fate to the baneful influence of individual
States, governed by their own banking interests, over the counsels of the
Union.
T he argument, sir, in support of the constitutionality of a banking institution,
as a mean necessary to execute the Government, is greatly strengthened by
the consideration, that the jurisdiction o f the Government over the specified
subjects o f its cognizance is sovereign.
In the division of power, certain subjects of legislation remain with tho
individual States for their sole and sovereign jurisdiction: other specific sub
je cts are, by the constitution, committed to the exclusive cognizance of the
Government of the Union; all Legislative power over those subjects is not onlygiven to Congress, but expressly denied to the States. W ith these plain land
m arks before him, I was not a little surprised to hear my honorable colleague
(M r. P o r t e r , ) in a speech of so much method and ingenuity, contend, that
the Government q f the Union was not sovereign in any thing; that sove
reignty was to be found alone with the People. 1 o the People, sir, we always
bow with respect; it is among first principles, that all power flows from tne
People, and is to be exercised for their benefit and welfare; the People are the
legitimate source of all power, and it is from them the constitution is derived;
but, sir, the moment the constitution is formed, and the government establish
ed, the original sovereign pow’er of the People is parted with; it is transferred
to the Government, and all interference with its exercise is lost, except through
the medium of elections. N eed I refer to a host of writers on civil society
and Government for all this? The result is inevitable, that the power of this
Government over the objects specifically and exclusively committed to its ju
risdiction, is fu ll , entire, and sovereign. T he principle of my colleague would
've us.a government o f m en, not of laws, the very definition of despotism.
his view, sir, repels the strict, the narrow, meagre rules of interpretation
which have been applied on this occasion. Another position of my colleague
is equally unfounded. H e insists that the Governments of the Union and the
respective States have a m ixed or combined jurisdiction over the same subject
m atter; and hence a new restriction is created on the power of Congress.
W hat, sir, is the power given to Congress, and the means to execute it reservea to the States? for such is the application and consequence of the argu
ment.
T he very face of this proposition involves contradiction and inconsistency;
it would make the constitution a fe lo d ese, and annihilate the Government.
W e are carried back again into Egypt: to the old doctrine of dependence and
requisition of the confederation upon the States. Such, sir, is the extent, such
the desperate efforts of argument to cut down the powers of this Government
and prostrate this institution.
I cannot, sir, pass over another argument against the bill, without notice.
I t is said that the banks o f the States may be resorted to in the administration
of the finances. H ere, sir, by this argument, the whole question of constitu
tionality is given up, for the very necessity o f the resort to State banks main
tains the agency ol a bank as necessary in adm inistrating the Governments
it is on this pivot, necessity, that the whole question turns. In steering clear
of Scylla the argument is lost in Charybdis. This necessity of bank agency
is so indispensable to the Government, that gentlemen look with fear and trem
bling upon the intermission of a day between the expiration of the charter of
the present bank and the new and gladdening reign of State banks. It has
been stated on the floor of the House, that arrangements are already making
with State banks for the accommodation of the Government. Preparations are
in forwardness for celebrating the nuptials of these State-damsels, who, with
little modesty, attend in the anti-chamber, eager to rush into the arms of pa
tronage in the treasury. Do ye not discern the signs o f the times? A re the
policy, the co-operation, and active movements, of the State banks, not seen?
VVhile the United States’ Bank is going down, do you not observe the wreckers
hovering on the coast?

226

bank of t h e u n ited s t a t e s .

But, sir, this great question of constitutionality does not depend on the oc
casional existence or non-existence of banks, in the States, but on the intrinsic
poiver given by the constitution, without regard to the extrinsic, contingent,
and uncertain co-operation of State Legislatures.
W h at the future policy of the respective States would be; whether State
banks would be established, able and willing to aid this Government, and safe
depositories for the revenue, could not be foreseen by the framers of the con
stitution. Such an argument, resting on snch contingencies, would at one pe
riod make a thing constitutional, which at another would be unconstitutional.
T o all those who are averse to a multiplication of banks and bank-stock,
permit me to observe, that the States stand ready to fill up, by new banks, the
vacuum or space left on the expiration of the United States’ B ank, as rapidly
as the motion of fluids under the principles of hydraulics; nay, sir, some have
already anticipated the event by a litter of banks, and hence, sir, we have wit
nessed the struggle of a parent’s affection to protect its offspring.
It only remains, sir, for me to call the attention of the House to the past.
I t is now twenty years that this bank has been in operation, in constant in
tercourse and correspondence with the Government under all the revolutions
of parties; during which period we have the concurring testimony of all the
States in the Union in support of its legitimacy, deducible from their acqui
escence and satisfaction; for, sir, after the agitation excited by its creation
had subsided, I have not been able to find, among all the projects for amend
ing the constitution, that a single State has touched the power that created this
bank. No, sir, this viper in our bosom (to use the impassioned language of
entlemen in opposition to this bill) has lain harmless. Harmless, did I say?
jike a good genius, it has administered to our wants, and promoted our
welfare.
Can the candid mind resist the conclusion, that the People are with the batik?
Shall I remind you, sir, that this institution received its existence from the
hands of the greatest and best of men, and under the presidency and with the
entire approbation of W ashington; that the constitutional question was decid
ed at a period auspicious to fair inquiry; at a period when party spirit was
much less virulent and destructive; that some of the most distinguished sup
porters of the present administration concurred in its establishment? Shall
this question of constitutionality never be at rest?

M r. J ohnson.—M r. Speaker: I had determ ined, untij yesterday, to be
silent on this occasion, and I extremely regret the necessity which has com
pelled me to trespass upon the exhausted patience of the House upon an almost
exhausted subject. I am opposed to the renewal of the charter of the Bank of
the U nited States from the strongest sense of duty which can be felt by the
representative of a free People; I believe it palpably unconstitutional to renew
the charter, and, if it were constitutional, it is inexpedient and improper.
It is absolutely necessary that the House and this nation should unclerstand
the real question before us: for arguments have been advanced upon premises
which do not exist, and remarks predicated upon a case which is not embraced
by the bill. This makes it my duty to call attention to the real question,
that we may not dwell longer upon supposed cases. T his is not a struggle,
on our part, to repeal any act of incorporation, or to deprive any citizen of
any vested rights claimed either by nature or by any political act; but an ex
ertion in favor of equal laws and equal justice to all the People of the United
States, to prevent monopolies from being given to a moneyed aristocracy,
unknown to the constitution, and dangerous to the liberties ot the People, and
subversive of the State sovereignties. Tw enty years ago. Congress, in express
violation of the constitution, incorporated a bank, called tne Bank of the
United States, to continue tw enty years, which will expire the 3d of March.
I t was granted by those principally who have assumed the name of federalists,
and who advocated the incorporation of the bank as constitutional, upon the
odious doctrine of implied powers, and which was opposed by those who have
since supported the character of republicans; this very measure was the first

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that laid the foundation for the two great political parties who have, since that
period, agitated and divided this country. The charter granted in 1791 will
expire the 3d of March, and the stockholders, and those under their in
fluence, have petitioned Congress to renew the charter for the term of twenty
years more. W ill we encourage this moneyed aristocracy, and continue thi 3
privileged order in the bosom of our country twenty years longer? They have
had the exclusive advantage of accumulating wealth and 'money for twenty
years, and they are not satisfied. T hey wish a renewal of their charter for
twenty years to come. T hus, sir, the present Congress have before them the
same question which was determined in 1791, viz. to incorporate the stock
holders of the United States’ Bank twenty years from the 3d of next March.
W e are absolved from all obligations on this subject, but those of duty to the
People; the question stands on its original merits and demerits: for the lapse
of twenty years cannot sanctify a breach in the constitution., nor the acquies
cence of the People make that expedient and proper, which is hostile to liber
ty , equality, ana justice; thus absolved from all obligations to promote this
institution, from such considerations as have been urged, I am to consult the
goood of the People.
First, to incorporate the stockholders of this bank, and thereby continue in
existence a moneyed aristocracy, and a privileged order of men, is a violation
of the constitution of the United States; that constitution of union which binds
the States together, and which we are individually bound to support by a
solemn appeal to heaven.
It cannot be unpleasant to trace back to its source the union of the States.
I t brings to the patriot’s mind the events of the American Revolution. I t was
in this glorious Revolution that theunion of the Stateshad its origin; at a time
when we were distracted by domestic faction, anti threatened with a foreign
power, when, in fact we were invaded by a British army, and our political
existence was threatened. T hus, while General Washington was at the head
of our forces in the N orth, the sages in Congress were planning articles of
confederation as early as June, 1776. Before the declaration of independence,
a committee, composed of a member from each State, was appointed, to draw
up articles of confederation by which the States should be bound to each
other.
These articles of confederation were finally adopted by all the States in
1781, until which time Congress was the type of union, and the rallying
point for the States. So great was the influence of these men who conducted
us safe through the Revolution. This summary will give us the objects of the
union of the States. I t was not for the purpose of interfering with State
rights, for the purpose of regulating the laws of credence, and the laws of
descents, of creating county court-houses and jails, opening State and county
roads; this would have been impossible; it would have been an assumption of
power destructive to every principle of independence. It was, on the other
hand, for the great and mighty objects of common security from foreign ene
mies and domestic treason and insurrection, that the union was formed. The
objects of the union are confined to those great matters of the confederacy
which could not be effected by a single State. W e should, therefore, confine
ourselves to these objects of the confederacy, that we may not weaken the
bonds of union by a usurpation of power not given to us by the confederation;
a union sacred in its origin, cemented by the sufferings of the States, strength
ened by habit and affection, and sacred in its objects of common security
against external danger and internal commotion. The articles of confede
ration being the first written bond of union, let us examine the system and
point out its defects, that we may more easily see why the articles of con
federation were abandoned for the present federal constitution. T he articles
o f confederation gave to the old Congress the powers enumerated in the pre
sent constitution. T he objects of both instruments were the same, the pow
ers principally the same, but different in the execution of those powers. T he
powers of confederation were federal in extent, and federal in their operation.
The resolves of Congress, therefore, under the articles of confederation, had

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no other force than recommendations to the different States. I f men were
wanting, the States were required to furnish their auotas. I f Congress want
ed money for the great objects of union, they could lay and collect no tax;
they could only recommend to the States severally to furnish the requisition.
B ut Congress had no power to force the States to a compliance. And the
States could, as many of them did, refuse to furnish the requisition of men
and money demanded by Congress; thus the powers of the United States
were federal in extent and federal in their operation. T he old Congress had
no judiciary, because that would have been unnecessary, as their resolves
could not be enforced upon the States in their sovereign capacity, or upon the
property or persons of individuals. In this state of things, when commerce
languished, when, under British influence, we were engaged in a bloody In
dian war, and our ports and frontiers in British possession, and the States
refusing to furnish men and money, and comply in all things with the resolves
of Congress, although under constitutional obligation to do so; it was agreed,
by all, that the articles of confederation wanted revision and amendment;
the States sent their deputies for the purpose of forming a more perfect instru
ment of union between the States. T h is was a great and a delicate trust.
T hus the present constitution originated, from the defects of the confedera
tion—embracing the same great objects of common security; and the power
of both instruments are limited and federal. In fact, they are both a grant of
specified powers, and powers not granted to Congress are reserved to the
States or to the People. W e discover the same objects and powers in the
two instruments of union: differing in their operation upon the States and the
People. Congress has the power to lay and collect taxes, and to operate
upon the person and the property of every individual in the U nited States,
and, with that view, federal, judicial, and executive branches were establish
ed, by the present constitution, to carry the laws into effect, and to appoint
officers to collect the revenue. Congress has a right to raise an army from
the body of the People, and to force a draught if necessary, w herras tne old
Congress, under the confederation, had the same right to require men and
money for the objects of the Confederacy; but these requisitions operated only
as recommendations to the States. From this statement we plainly discover
the great and only radical difference between the confederation and the pre
sent constitution. The powers now exercised by Congress can be enforced
upon the persons and property of the People. This operation, and carrying
into effect the powers of Congress, is the national ana consolidating princi
ple of the constitu tion.
Although experience had proven the w ant of power in Congress to carry
into effect the legitimate objects of the confederation, this national or consoli
dating principle in the federal constitution, was a subject of alarm and solici
tude to the friends of liberty. This principle was the fruitful source of the
most obstinate and rational objections to the adoption of the federal constitu
tion; and it was with vast difficulty that the States adopted it. In fact, it was
adopted under a conviction and promise that amendments would be made,
which would leave nothing to doubt or implication, and important am end
ments were engrafted accordingly into the constitution, all tending to demon
strate that we were to assume no power by implication, but confine ourselves
to the letter of the constitution.
Io prove that the constitution should be thus construed, I need only advert
to the 8 th section of the 1st article, in which the powers granted to Congress
are specifically enum erated, to lay and collect taxes, to borrow money, to
regulate commerce, to establish a uniform rule of naturalization, to coin money, to constitute courts of justice, declare war, raise armies, to call forth
the militia, &c. And to the 10th section of the same article, where certain
powers are prohibited to the States, which had been previously vested in the
Congress ot the United States, viz: no State shall enter into any treaty, al
liance, or confederation, nor grant letters of marque and reprisal, coin money,
emit bills of credit, or grant any title of nobility, nor lay imposts or duties on
imports or exports, or lay duties on tonnage, keep troops or ships of war in

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time of peace, or engage in war unless actually invaded, or in such danger as
will not adm it of delay, &c.—and the 9th amendment in these words: “ the
enumeration in the constitution of certain rights, shall not be construed to
deny or disparage others retained by the People;” which amendments refer
to the prohibitions to be found in the 9th section of the 1st article, and others
o f the same kind, viz: “ T he writ of habeas corpus shall not be suspended
unless when, in cases of rebellion or invasion, the public safety may require it.
N o bill of attainder or ex post facto law to be passed. No tax or duty shall
be laid on articles exported from any State. No money shall be drawn from
the public treasury except in cases of appropriation by law. No title of no
bility shall be granted,” &c. A nd, more especially, the 10 th amendment,
viz: “ T he powers not delegated to the United States by the constitution,
nor prohibited by it to the'States, are reserved to the States, respectively, or
to the People.” T he parts of the constitution recited prove the position
taken, that the constitution is a grant of specified powers; that we can exer
cise no power not expressly delegated to us by this instrum ent; that our orbit is
circumscribed by the grants of the constitution, and we should be careful not
to usurp authority not given to us. T he exercise of authority not delegated,
but reserved to tne States, or to the People, is the very essence of consolida
tion, which, if enforced by the United States, would lead to monarchy or a
despotism. I f not enforced, it would convulse the whole nation, and we
should see the People quitting their daily avocations; the farmer his plough,
the mechanic his shop, to remonstrate against a tyrannical exercise of power.
This we have seen on former occasions, not less memorable than this, arising
from the same doctrine of implication, and arising from the acts of the very
same set of men. T he harmony of the States should not be disturbed. It
should not be agitated by the breath of discontent. Its value is more precious
than gold or silver. T he spirit of union should be cherished by us all in
words and in actions. Nothing will produce more happy effects than keeping
in the path of our rightful powers; otherwise you generate the most angry
passions of the People; you start up the most malignant invectives— order will
be disturbed, and tranquillity will be interrupted. To produce these unfor
tunate effects, nothing can contribute more than to disregard the enumerated
powers in the constitution, and exercise tyrannical powers by implication, or
u nder some general phrases, such as the “ general welfare;” expressions
which contain no grant of power, but limited and explained by enumerated
authorities; by which construction the power of Congress would be arbitrary
and unlimited, as Congress would take upon themselves to judge what mea
sures would promote this general welfare. I wish, on this occasion, to do
justice to the People of K entucky, by asserting their inviolable attachm ent to
the Union, more especially since, in this House, its sacredness has been pro
faned in a m anner not to be forgotten. I f the People of the W e st, and bevond the mountains, have any political idol, it is the union of the States. As the
Dible and new testam ent are dear to every Christian and true believer, as the
basis of his happiness here, and the foundation of his future hopes; so the
union of the States, in a political point of view, is considered, by the People,
a 9 the surest pledge for the blessing of liberty, and the security we enjoy, and
the ark of our future hopes and safety. T heir union is never profaned by
conversations or speculations about disunion. You never hear disunion men
tioned in private circles, much less in public bodies. A professor of religion
to deny the existence of an over-ruling Providence, would not be more d is
graced, in the estimation of the real Christian, than astatesm an would be d is
graced, politically, by even doubting the advantages of the union of the States.
T h e word disunion, as applied to the States, would produce a heart-rending
pang in the bosom of a W estern patriot, and, I hope it would, throughout the
seventeen United States and their territories.
T he people are republican, and they abhor all measures of a monarchical
tendency—they know the United States have been governed alternately by
the two great political parties in this country; they have a regard for and a con
fidence in the republican party; this regard is not confined to the western

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BANK OF T H E U N ITE !) STA TES.

States, but extended to every part of the United States. They believe that
truth and equal justice will prevail, where the opportunity is equal, and where
the People do exercise the powers of sovereignty. The People represent, and
in fact the whole of the States have confidence in every part of the United
States. As a People they cherish and harbor no jealousy about large and small
States, of commercial monopolies, &c. N or are they thus attached to the
Union from selfish and interested motives; no, sir, tneir attachment to the
Union arises from a noble and generous affection, a magnanimous and disin
terested display of patriotism, and love of independence; we have given many
proofs of this. A t a time when this People were agitated and alarmed at the
prospect of having some of their most essential rights interrupted, and when
they declared their determination to support those rights, the gold and silver
of Spain, in the hands of Spanish emmissaries, could not alienate the affec
tions of this People, with all the influence of arch intriguers; and the treason
of Aaron Burr had as little effect upon the minds of this virtuous and happy
People; and any other attem pt would be as vain, however well matured. I
feel the consolation which arises from a knowledge that I represent in part
such a People, whose affections cannot be estranged from the great American
fam ily,by promises of future greatness, the hopes of golden harvests, or the ex
pectations of governing provinces with the silver mines of Mexico. W ith
these sentiments, I am now to examine for the particular parts of the consti ■
tution and the arguments which have been advanced to justify this measure.
I t is not contended by any, that the power of incorporation is an express
power given by the constitution to the Congress of the United States, beyond
this ten miles, over which Congress has exclusive legislation. I f then this
power is not expressly given, I might here stop and deny the right to exercise
it. So far from finding any express clause in the constitution, giving this
power, the word corporation or bank cannot be found in any part of this in
strum ent of our Union.
W e have seen the exercise of great abilities, and we have been entertained
with great research by those who advocate the renewal of this charter; but, un
fortunately, these gentlemen cannot agree among themselves. Is this not the
strongest proof that the power to incorporate this bank is not given by the con
stitution, and does it not demonstrate the danger of constructive powers? One.
has contended that this power was inclusive in some of the specified powers;
another has contended that this power is given by implication; and a third
contends, that it is an incidental power given to carry some specified power
into operation. T his is not all; the advocates cannot agree upon the speci
fied power in the constitution, out of which this power or means arises. One
has contended that the power to lay and collect taxes gives this power, as a
means to execute the specified power; and to support this position, it has been
contended that this national bank is necessary and proper, as a means to lay
and collect taxes, duties, &c. T o strengthen this construction, that part of
the 8 th section of the first article, which says that “ Congress shall have
power to make all laws which shall be necessary and proper for earring into
execution theforegoing powers,” &c. has been resorted to; another has said that
this instrum ental power grows out of the express power to borrow money;
and a third, that this power was incident to the power to regulate commerce,
and in fact these three great objects are embraced by the preamble of the bill
which passed in 1791, which incorporated this moneyed aristocracy and erect
ed a privileged order of men. W ith respect to the declaration in the con
stitution, that Congress may make all laws necessary and proper to carry the
express powers into effect, 1 should state that the framers of the constitution
intended by this declaration to prevent the doctrine of implication, and to
leave nothing to doubt. I t was introduced through abundant caution against
the strides of usurpation, and it should be the last clause to which he should
advert, upon whicn to build the doctrine of unlimited means, to carry the ex
press powers of the constitution into effect. I f our means are unlimited, our
powers need not be defined; because one. as much as the other, is a destruction
of our freedom and independence. I shall contend, that the means by which

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we are to carry into effect any express authority should be adapted to the
end in view; that it should not embrace other objects, not contemplated by the
constitution, although it may be made instrumental in carrying into effect a
specified authority. U nder this cloak we might conceal our usurpation of
power.
I will ask if this national bank is necessary and proper, as a mean to carry
into effect the power to lay and collecttaxes, duties on imports &c. to borrow
money, or to regulate commerce. I f necessary and proper, is this bank con
fined to any one of these objects, exclusively, or to all collectively; or does it
embrace a vast variety of other objects, which are the primary ones, in fact, of
this institution, and only embracing these powers in the constitution, incident
ally and as secondary considerations? Sir, it will be difficult to convince the
People that it is necessary, in the language of the constitution, to create a
moneyed aristocracy and a privileged order of men, extending its branches, its
influence, and its strength, into the interior of every State, to collect taxes,
to borrow money, or to regulate commerce. T he primary object of this in
corporation was to promote usurpation of power, to support the dangerous
doctrine of implication, and to amass wealth from the labor of the People, and
not for the exclusive object of carrying into effect any express authority in the
constitution. T hus, it is evident that this moneyed aristocracy, embracing
such av a st variety of objects, 110 ways connected with the execution of any
specific grant of power, that it departs from the letter and meaning of that part
of the constitution which gives the power to carry into effect tne specified
powers of the constitution. Hut now let us inquire what is the necessary
means to lay and collect taxes. I f a bank was not intended, I will take du
ties upon imports, as in that way we collect our revenue. First, a law must
pass designating the articles upon which a duty shall be laid, the amount of
that duty, and the manner in which it shall be paid, either upon the delivery
of the goods, or upon a credit, by giving bond with security, and last, to ap
point collectors of the revenue and other officers to collect and receive this re
venue for the United States, with authority to bring suit upon failure of pay
ment. This is a necessary exercise of the power to lay and collect taxes, &c.
And where is the statesman who has denied the power as unconstitutional?
H ere these means are confined to the object in view, the collection of reve
nue, and certainly the United States have power sufficient for all the objects
of the confederacy, as, in the exercise of all the specific grants of authority,
Congress may operate upon the person and property of the individuals of the
States to enforce that authority.
I t is no argument with me, that we are in prosperity and health, and such
an institution will not be dangerous. N o, sir, establish a precedent in the
days of prosperity, and it will come upon you in the hour ot adversity.. This
same doctrine of our being unlimited in our means of carrying into effect the
grant of powers in the constitution, has already endangered the liberty of this
nation. If the doctrine contended for on this occasion be correct and carried
into full force. Congress would be as omnipotent as the parliament of G reat
B ritain—the constitution would no longer restrain us—and the independence
of this nation would depend upon the caprice of Congress—our constitution
would be like the boasted constitution of Englishmen; and what is that con
stitution? S ir, it is not lettered or defined like ours. I t may be changed
by parliament, as the crown party, or the people, shall prevail. 1st. The great
charter of liberty, obtained from King John, violently, and in duress, declar
ing what should be considered the fundamental laws of England. 2 d. A sta
tute in confirmation of the great charter, making provisions to read the same
to the people in their churches and public places, semi-annually. 3d. A num
ber of statutes, called the conforming statutes, from the reign o f Edward I.
to H enry IV. 4th. N ext the petition of rights, a declaration by parlia
ment of the liberties of Englishmen, extorted from Charles the first, before the
rupture with his parliament. The habeas corpus act, in the reign of Charles
I I . 6 th. T he bill of rights, and declaration of lords and commons of E ng
land, in 1688. 7th. The act of settlement at the commencement of the 18th

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century, endeavoring to secure the English subject in his personal liberty, se
curity, and property. These, and the like parliamentary declarations and sta
tutory provisions, constitute the constitution of England, which the same p a r
liament has a right to alter or abolish. I never wish to see Congress invested
with a power to change the constitution, sanctioned by the People in their
highest sovereign capacity. T he constitution has vested us with power enough,
and if we want more, amend the constitution in a constitutional way, and not
tyranically exercise power never delegated to this body. T he ground on
which we stand is delicate, and the duty we owe the People should teach us
caution, more especially when we see men in power too apt to grasp a t more,
and exercise it oppressively. W e should never forget that all power flows
from the People; they are sovereign—1 hope they will ever remain sovereign
in this country. Our safety is with them. They are unambitious, they are
virtuous, and have no temptation to overturn those liberties which they them
selves enjoy. B ut this measure is a violation of the constitution in another re
spect, by interfering with State rights. T his corporation can send a branch
bank to any part ot the United States, without consulting the States or the
citizens of the States. Suppose, sir, they should send one of these branches
to Frankfort, K entucky, w ith a great capital, and under the sanction of the
General Government, would it not lessen the profits arising to the State, and
to the People of the State, from the State bank of K entucky, as established by
the laws of that State? 1 presume it would. I t would contract very much
the circulation of the State bank notes, and would, in many other respects,
come in collision with State rights. Every State has a right to regulate its own
moneyed concerns; to incorporate banks or not, as interest or inclination may
dictate. B ut, in the zeal of some gentlemen, to continue this moneyed aristoc
racy in the U nited States, for tw enty years to come, they have denied the
right of the States to incorporate banks, and that Congress alone has the power.
'In is doctrine is new to me. W hen M r. Madison and other patriotic states
men denounced this measure, as unconstitutional, in 1791, it was not contend
ed that the States had no right. It was adm itted, by the lovers of implication,
that there was a concurrent right. T hus we behold the progress of opinion to
mi pport a favorite measure.
If this bill passes, and the States have no right to incorporate banks, I su p
pose the State banks throughout the United States m ust be put down or burnt
up, to give way to this great engine of foreign influence. “ T he States shall
not emit bills of credit.” T his is the prohibition relied on to take the right of
incorporation from the States. Bills of credit is another phrase for paper
money. T he States shall not issue paper money and make it a legal tender.
The men of the Revolution know this. T he great calamity which individuals
suffered by the paper money, demonstrated^ the necessity. B ut no man is
obliged to take the bank notes of a State bank, for the paym ent of a debt, or
in common transactions. It is at his option, and the moment you get a bank
note, you may present it to the bank and demand your money. N ot so with
bills of credit or paper money, issued and made such by the State. I t would
be extremely difficult, I presume, for any gentleman to convince the States by
argument, that they had no right to incorporate banks, and it would be equal
ly difficult to force the States to destroy their local banks for the United
States Bank, owned principally by foreigners. N ot only the bank, in its
moneyed operations, would interfere with State rights; but the rules and regu
lations of the bank, as heretofore established by Congress, have interfered with
the laws of the several States in these municipal regulations, as to the tenure
of property, and the liability of the corporation to pay their debts.
M r. Speaker, 1 have said as much as 1 conceive it my duty, upon the uncontitutionality of the bank charter. I am to ask your indulgence, while I endea
vor to prove its inexpediency, and its dangerous tendency to the freedom of
this nation. In the hand ot a private citizen wealth will, at all times, have its
influence, and may attach to him an importance beyond his merits. B ut this
influence is not so dangerous as to induce a government to interpose and liqjit the honest accumulation of property by any citizen. And though thi*

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wealth may have its influence, it is always limited. I t may frequently be in
the hands of the benevolent man; and, it not of this character, this vast wealth
seldom survives the death of the individual proprietor. It is either divided
among numerous relations, or squandered by his heir. B ut not so with a body
corporate, extended thoughout this vast empire, possesed of a capital of ten
millions of dollars, and extending their credit and accommodations to double
th at sum, notwithstanding their limit to ten millions. It is stated by an
advocate for this bank, that the stockholders commenced their discounts with
about 625,000 dollars, and that, upon this sum, they discounted to the amount
o f 6,000,000 of dollars the first ten months after it w ent into operation. T o
divide this 10 millions or 20 millions of capital in local or state banks, no se
rious danger could be apprehended, because the stockholders of one in stitu
tion would be strangers to all the other stockholders; so of the directors of the
different local institutions, and consequently there could be no combination
betw'en the different banks. B ut it is otherwise, and the danger is imminent,
when you, by act of the General Government, give unity of action,unity of will,
an d unity of strength, to a moneyed aristocray, vested with a capital of ten
millions of dollars, with power to increase their accommodation to twenty
millions, and to send their branch banks into the bosom of every State and terri
tory. T his is not a ll: your revenue bonds, to the amount of millions, are de
posited with this bank for collection, and the public money deposited in this
bank to the amount of millions for safe keeping, and their notes made pay
able to the United States the same as gold and silver. Sir, is there no dan
ger in such a monster,jfostered by the General Government, and possessing so
many advantages by the laws of Congress? Such a bank, in its beginning,
would confine its engagements to the means of payment—but as their credit
increases, they engage beyond their means; their vaults are empty, and the
institution relies upon its great credit and exclusive privileges. Thus the
character of the bank is changed, and it becomes a system of speculation, and
a political engine to destroy virtuous individuals, or mould the Government to
its notions.
I have no knowledge myself about the political workings of this United
S tates’ Bank. But if I were to believe the declarations of members on this
floor, and complaints from ev ery part of this continent, I must think that this
institution has not been silent and indifferent spectators to the reform of the
administration to republican principles—but they have endeavored to support
that party who gave them a charter. I do not, however, introduce this as a
conclusive argument against this bank. No, sir, I would equally object to it
in the hands of republicans. It would still be a moneyed aristocracy, too vast
and too powerful not to be dangerous to the freedom of the United States. But
w ithout these declarations'of political influence exercised by the stockholders
and directors of these banks, our own reason would teach us to believe all we
have heard of the oppression and partiality of this bank. I t is composed of
individuals; these individuals have their passions, their feelings, their preju
dices, their partialities, and their politics, and they will act acordingly. Selfpreservation will always induce tnem to support and keep in power the party
who will be most freindly to moneyed aristocracies and their own institution.
T he influence of this bank is palpable and notorious. W e have the evidence
from the long roll of petitioners h o w imploring^Congress to renew' the charter.
I f in tw enty years this bank is to be the idol of some and the alarm of others
—;if the solvency of so many individuals depend on it—if ruin and devastation
will, in the event of its dissolution, spread wide in the country—then, sir, it will
only require twenty years more to make it stronger than the G overnm ent
T o induce us to vote for this institution, we have been persuaded, flat
tered, alarmed, petitioned, and threatened, and we have been amused with the
rise and history of the banking system. It originated in Italy, it has travelled
through Europe, crossed the British channel to G reat B ritan, and lastly, it
crossed the wide A tlantic to America. And much has been said of the utility
o f those institutions- W ithout dwelling upon the utility of banks at present,
I could only admit them as a necessary evil, and not dangerous, if left to
30

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BANK. OF T H E U N ITED ST A T E S.

the control of our State Governments. B ut the history of those banks which
have been quoted, will furnish no argument in favor of a national bank.
W e wish no political engine of a moneyed aristocracy. W e wish to rest
upon the virtue and will ot the People.
It has been stated that Georgia is republican, notwithstanding this mon
strous machine has extended a branch bank to this State; and it is stated that
Connecticut is federal, and has no Branch Bank of the United States. T his
does not prove that the bank is not a dangerous engine against the liberties of
the People; but it proves, that the People of Georgia withstood this dangerous
influence, and deserve more credit. It is a proof of the virtue of that Peo
ple. I f this institution is so necessary and beneficial, why do not the repre
sentatives of Georgia, who have been blessed with this institution, come for
ward and advocate a renewal of the charter? But you find the respectable
members of Georgia opposing a continuance of this evil in every form. In
fact, the State of Georgia taxed the paper of this bank, and the State was
determ ined, by taxation or legislative prohibition, to drive this circulating
medium from their territory. B ut considerations ot wisdom induced a post
ponement of this determination, until it should be seen whether the charter
would again be renewed, in violation of the constitution, and in defiance of
our liberties. M y colleague (M r. M cK ee) whose opinions I had been in the
habit of considering as my own, until this unfortunate question, which divides
us, has stated, that, in h’is opinion, the dissolution of this institution would
be felt by the citizens of the western country, and that our surplus hemp
would not command as good a price. 1 differ in opinion from my colleague,
if he supposes the western country will feel any great pressure from the dis
solution of this bank. 1 grant, tne People of Kentucky may not be entirely
exempt from some inconveniences common on such an event. B ut our pro
duce will fall from other very different causes. Interruptions in commerce,
stagnation in trade, bankruptcies throughout the commercial part of the United
States, arising from the bankruptcies in England, which have occasioned the
return of many bills from England protested. These are the causes which
produce distress, and will continue to produce it, until we are a People less
dependent on foreign commerce. But believing as I do on this subject;
viewing the efleets of this great political moneyed institution with abhorrence,
I would not vote it, let the temporary distress be what it may. I would rather
see the present crop of hemp brought to one deposite, which would make a
bulk larger than this capitol, and consumed with a lighted torch, and ascend
to the heavens in smoke as a bonfire, rather than vote for the passage of this
law ; and, sir, the People I represent would justify my vote. They would
bear the loss without a murmur; they would act the part of freemen worthy
of freedom; they would magnanimously bear the calamity without complaint,
if their patriotism required the sacrifice. T hey are a most worthy People—a
virtuous People—an enlightened People—a glorious People—descendants of
this great American family; inheriting that spirit of independence which
equally sustained our cause under deleat and victory, upon all the battle,
grounds of the Revolution. I will not be alarmed out of my vote by clamor,
no m atter from what quarter it may assail me. I never will be driven from
my duty by alarms and fears. I will stand firm to the cause I conceive to
be ju st, and the People will support me; they despise wavering and tempo
rising. Ify o u continue this charter tw enty years more, you can never put
it down. N o, sir; instead of having petitions which would reach from the
speaker to the seat of the members, you would have them packed upon your
table, until they would intercept my view in addressing you. Yes, sir, they
would rise up higher, and implore that goddess of liberty which presides over
the deliberations of this House. W e are told, that this bank is necessary to
the collection, the safe keeping, and the transmission of the revenue, to dif
ferent parts of the United States. It is stated that the State banks are
strangers to us, and cannot be trusted with the deposite of public money. I
am sorry to hear such a sentiment. It has originated from a panic, an alarm,
an ideal danger. T hat great and good man, the Secretary of the T reasu ry , has

V
ON T H E BILL TO REN EW T H E C H A R TE R OF 1791.

235

told you otherwise, by his report now before me, of date 12th of January, in
which it appears that, of about 2,400,000 dollars, upwards of 800,000 dollars
are deposited in the State banks, $75,000 of which are deposited in the State
Bank of Kentucky, anti I should be sorry if it w$s not as safe there, as in the [
hands of the United States’ Bank,' in the possession of foreigners; if State
banks will not do, let the United States build vaults for the safe keeping of
the revenue.
B ut, sir, the alarming consequences which must arise from a dissolution of
this corporation. It will deprive us of a circulating medium; it will interrupt
commerce and produce bankruptcies. I t is to produce the distress of farmers
and the ruin of m erchants; it is to prevent em igration; and it is to shake
the foundations of the Government. T his picture gives live no alarm. It is
the picture of a wild and distempered imagination. I f serious injury will be
l'elt by many in the powrer of this moneyed aristocracy, I feel and sympathise
with the sufferings of those who may be needy without any fault of their owrn;
but something is due to posterity; and even in that point of view, I am not
willing to entail upon them the baneful effects of a great moneyed corporation,
with a capital of twenty millions of dollars, extending their arms of power and
influence to every part of the United States, and having the destiny of good
men within their control, whenever they receive the nod to exercise their giant
power. No, sir, I am ready to see and feel the sad crisis which has been d e
scribed. I f we die with less money, we shall live in more honor and enjoy
more happiness. 1 wish to see whether so much depends upon this corpora
tion. I f so, it is the greater reason why the poison should be destroyed. Like
the strong man we read of in holy w rit, let us see if the violent death of this
corporate body will pull down the pillars of the constitution, that another Volney may sit upon the ruins of this capitol, and mourn the fallen empire of this
great and happy republic.
Mb. S h e f f e y . —Mr. Speaker: I t was my intention n;it to address any obser
vations to you on the subject now before the House, but reasons which I can
not disregard have induced me to request your attention. I am confident,
when the importance of the question is considered—a question in which is
involved the integrity of a constitution we all profess to adore, and the pros
perity of a country we all profess to love, the House will listen to every thing
that can be said, not only with patience, but with pleasure.
I have been led to make the remarks, which I am about to offer, by con
siderations distinct from the intrinsic merits of the question. In the vote
which I shall give, I shall disagree with a majority of my honorable colleagues,
whose opinions are entitled to my respect. The sentiments of a great portion
of the People of the State which I have the honor in part to represent, so far as
they can be collected from the opinions of her Legislature ana my own, do not
correspond on this occasion; and 1 m ust superadd, that no question ever was
presented to my mind, in the course of my public duty, which, at firs t view,
appeared attended with more difficulty. I have, therefore, thought it proper
to state the reasons of my vote to the House, to enable my country to appre
ciate them, and my constituents to interpose their corrective, should they
deem them unsatisfactory.
I had hoped that this question would have been discussed, and determined,
abstracted from all party considerations; that our attention would have been
exclusively directed to the effects of this measure upon the community, whose
interests are committed to us; and our solicitude employed to keep within the
limits prescribed by the constitution. B ut we have been invited to a differ
ent course. M y honorable colleague (M r. E p p e s ) told us the other day, that
we need not expect that this question would be determined on any other than
party principles; that party principles gave birth to the charter of the bank
originally, and that that was the first great question which separated the two
parties in this country. W as the fact ever conceded, the conclusion does not
appear to me inevitable that this m ust now be a party question. A t that time
it was a m atter of speculation and conjecture, what means would b e “ necessa-

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BANK OF T H E U N ITE D ST A T E S.

ry and proper” to give effect to the delegated powers confided to this Govern
ment. T he light afforded us by twenty years’ experience has banished them
and substituted certainty in their steaa. W e have now before us the practi
cal operations of the Government, calculated to show the fallacy of reasonings
founded on plausible but untried theories. W ith these means within their
power. it does not appear to rne that those act inconsistent with their former
principles, who now conceive the necessity of a bank as an instrum ent to car
ry on the fiscal concerns of the Government, though (unaided by the best of
all human guides, experience) they might have thought different in the infant
state of an operation.
B ut my honorable colleague has committed an error in point of fact in giving
the statem ent to the House, that this originally was a party question. Jl had
taken it for granted that the fact was as stated by him, but, on recurring to
the Journal of this House for the y ear 1791, (which I hope I shall be par
doned in receiving as better evidence than his declaration, how'ever im
plicitly I might rely on him on other occasions) I find that a considerable
portion of the federal members voted against the incorporation of the bank, and
a still greater portion ol the republicans for it; besides, as the measure was
then contested on the ground that there was no constitutional power in Con
gress to adopt it, which always involves m atter of conscience, I cannot submit
to the idea tnat one political party exclusively entertained conscientious scru
ples when violence was threatened the constitution. This would be degrading
one half of the American People.
[M r. K p p e s rose to explain. H e said he apprehended, from the various
observations which had been made, that he had been misunderstood in what
he saitl a few days ago. H e meant to say, that there were, from the com
mencement of the Government, two opposite opinions entertained, with re
spect to its powers. One was, that they were strictly conformed to the ob
jects delegated; the other was, that there were certain implied powers which
the Government might exercise, that did not appear on tne face of the con
stitution; that the latter opinion gave birth to the alien and sedition laws, and
the stamp act, and that this was the party principle he m eant, which gave
birth to the bank charter. As to conscience oeing monopolized by one party,
he had never entertained any such idea; he knew men of the federal party,
who were as conscientious as he was, and as much attached to the welfare of
the country.]
M r. S heffey proceeded. Mr. Speaker, 1 do not believe that my honora
ble colleague was actuated by any improper motive, in making the declaration
he did. During the time I have been associated with him in public life, I
have had no cause to believe that he was under any such influence. T h at the
opinions stated by him, existed early in this Government, cannot be denied.
They are attributable to very obvious causes. On the one hand, those who
were the friends of the constitution, were friendly to the exercise of all the
legitimate powers confided to the General Government, under the impression
that it was necessary to preserve the Union; many, indeed, supposed that the
powers delegated were still too feeble to secure tnat great object, unless sup
ported by a very extensive and liberal construction. On the other hand, there
were those who were apprehensive that the powers of the General Government
were of a character calculated to swallow up the State authorities, and sub
vert the rights of the People. T hese, after their efforts had been unsuccess
ful in the conventions of the States, on the adoption of the constitution,
brought with them (w ith the best intentions) into the counsels of the new Go
vernm ent, their solicitude for popular rights and State sovereignty, without
sufficiently regarding the importance of the Union, and the means necessary
to preserve it; and, while some of their political opponents contended for a
construction which produced some very obnoxious measures, they, if success
had attended their efforts, would have brought the Union to the feeble state
in which the old confederation had left it, and I hesitate not to declare, by diis
time, we should have been a divided, distracted, and enslaved People.

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327

Much has been said, in the course.of this debate, about the State rights, and
the offence which will be given to the States, should this measure be adopted.
T here is certainly propriety in preserving to the States their legitimate au
thority, and in manifesting a jealousy whenever it is threatened with any in
fraction; because the rights of the People are then in jeopardy. B ut, let it
not be forgotten, that every relaxation on (he part of this Government, w eak
ens the Union, without which, the rights of the People are but an empty name.
Sir, he who impairs the powers properly belonging to us, is as much the ene
my of the People, as he who subverts tne State authorities possibly can be; he
is as criminal, who weakens in the least degree, the bonds which unite us, as
he who places upon our necks an iron yoke to keep us together.
I f we should pursue the course which the observations of some gentlemen
seem to recommend, not to adopt the bill before you, because it will give o f
fence to the States, and bring us into collision with them; to what a misera
ble state must this Government, and consequently, this Union, be very spee
dily brought? It is in the nature of man to thirst for power, and to employ
all his means to obtain it. From this spirit, the State Governments are not
exempt; but, on the contrary, we have abundant reason to know that it pre
vails there in an em inent degree. L et it once be established as a principle,
not to exercise any particular power, because it is disagreeable to some of the
States, and I pledge myself, that, in a very little time, you will not be able to
exercise any whatever. You will have to recede, step by step, as they advance
upon you, (which they will be sure to do) until you possess nothing but the
shadow of authority; and this Union, the last and best hope of the friends of
liberty, m ust dissolve in its own weakness. Sir, I fear, when that is gone,
there never will be sufficient patriotism and unanimity, nor a sufficient por
tion of a conciliating spirit, to reunite us in any form of government, which,
while it secures to us the principles of a free constitution, has sufficient ener
gy to maintain itself. '1 he consequences are easily foreseen. W e shall be
tossed about, divided and distracted, until we finally share the destiny of
other nations—seek repose from the evils of anarchy in the arms of despotism.
A principle, equally untenable, and equally productive of misclnefi has
been advanced in debate, particularly by the honorable member from New
York, (M r. P o r t e r ) that no power cun be exercised by this Government,
which interferes with the remaining powers of the States. Sir, some of the
prim ai'y powers confided to us, are concurrent with the powers of the States.
Such, tor instance, is the power of internal taxation. Every cent which we
draw from the citizen by virtue of that power, diminishes his ability to pay
his taxes to the State of which he is an inhabitant, and, consequently, narrows
the circle q f State legislation. A nd, indeed, cases might be supposed, where
the necessities of this Government required taxes commensurate with the u t
most ability of the People to pay, which, in eftect, would be a total suspension
of the power of the States to lay and collect taxes. Y et, can it be pretended,
that, in the am ount of public contributions, which it may be necessary to re
quire, we are limited by any other restriction than that which a sound discre
tion and a due regard to tne welfare of the community imposes? T he same
principle applies to the means which may be necessary to carry the delegated
powers into effect; they may be legitimate, though they interfere with the le
gislation of the States.
Having detained you thus long with the preliminary remarks which I had
to offer, perm it me now, sir, to lead your attention more directly to the sub
je c t before us.
T he most important principle involved in this question, is, whether the con
stitution has delegated to us the power to legislate upon this subject, in the
manner proposed. I t is admitted on all sides, that, unless that power exists,
let the inconveniences, and even calamities which will follow the rejection of
this bill, be what they may, the high duty which_we owe to the country, not to
transcend the limits prescribed to us, is superior to every other, and must
imperiously lead us to that result. In order, therefore, to approach the minor
question of expediency, it is necessary to ascertain, whether, by a rational

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BANK OF T H E U N ITED ST A T E S.

and unbiassed construction of the constitution, this power is fairly apparent,
either as directly or indirectly given—either as a power original and express,
or derivative and implied.
It has never been contended that the constitution expressly delegates the
power to create banks; but that such institutions m ar be established as in stru
mental in giving effect to some one or more of the delegated powers. In the
course of the observations which I propose to submit on this part of the sub
ject, I shall attempt to prove that Congress are not restricted in the means
to execute the delegated powers, except so far as the constitution expressly
restricts them: but that they may employ any, which they deem “ necessary
and proper,” without violating the constitution.
To enable us to give correct constructions to the acts of individuals and
of public bodies, it frequently becomes important that we should consider the
time in w hich they happened, and the circumstances under which the persons
concerned acted. In legislation and jurisprudence, this is a very general
maxim, and seems to me peculiarly proper to be called in aid on the present
occasion. I t will afford us the best ideas of the evils under which this coun
try labored, when the constitution, under whose authority we now act, was
proposed and adopted, and, consequently, of the extent of the relief which
that remedy w-as intended to give.
Let us, then, see what was the situation of this country at that period of our
history, and what were the causes which led to that great event. I t was not
the want of a general government that induced the People of the United States
to seek security in the present constitution, but the want of one with sufficient
powers lor the purposes of union. T hat w ant of efficiency which character
ized (lie confederation, emphatically styled “ a rope of sand,” was not the
effect of the limited subjects confided to the deliberations of Congress, but the
limited means to carry their determinations into effect. On recurring to that
instrument, it will be seen, as has been stated by an honorable member from
Kentucky, (Air. J ohnson) that the subjects embraced are little short of those
vested in this Government. Congress was clothed with all the great a ttri
butes of sovereignty. They had the power to determine on peace or w ar; to
regulate commerce (through the medium of commercial treaties) with foreign
nations; to regulate trade with the Indian tribes; to grant letters of marque
and reprisal; to coin money, and regulate the value thereof; to raise armies
and navies; to borrow- money on the credit of the United States; and many
other powers of minor importance. Had they had the means to carry their
resolutions into effect through the agency of their own executive and judicial
authorities, and could their acts have reached the People, instead of being d e
pendent for their execution on the will of the States, 1 venture to say that this
constitution would not have been proposed. I t is true, that the organization
of the Government, under the confederation, was greatly defective; yet, that
was not the cause of its dissolution. It was the imbecility, arising from the
want of means, in the old Congress, that assembled the general convention.
It was that which produced the constitution of the United States, the primary
object of which, and of the People who adopted if, was to place into the hands
of the new Government, means commensurate with the due execution of all
the powers confided to it. Is it rational, therefore, to suppose, that, under
this impulse, under the pressure of the evil which every one felt, and the
cause of which every one knew, those who framed and adopted this instru
ment could have intended that we should be circumscribed in tne means deem
ed necessary to give effect to our measures, or (as some gentlemen strangely
suppose) be dependent on the States for them r Is it in the least probable,
that the men, selected for their wisdom, perfectly acquainted with the pro
gress ol man in every age; who foresaw the changes which the state of society
must undergo, in this country, from the increase of population, commerce, and
the arts, could act so absurdly as to prescribe a certain set of means to carry
on the operations of a Government, intended, not only for the present, but
for luture generations ? T here are, indeed, some express limitations, which
the circumstances of the times, and the jealousies ol the parties, produced;

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239

but, they being expressly stated, prove that the means, not interdicted, re
main entirely at our discretion.
W hen we examine the various parts of the constitution, with a view to this
question, we shall see many reasons in support of the principle for which I
contend. The last clause of the 8 th section of the first article invests Con
gress with the “ power to make all laws which shall be necessary and proper
to carry into effect the delegated powers, and all powers vested in the G o
vernm ent of the United States, or in any department or office thereof.” To
whom is confided the right to ju d g e what shall be “ necessary and proper?”
I presume it will be admitted that this right is exclusively inherent in Con •
gress. And, if Congress alone have the right to judge of the necessity and
propriety of the means, is it not absurd to say that they must judge rightly,
or they have no right to judge at all ? “I have always supposed, when a sub
ject is within the legitimate authority of any men, or body of men, an errone
ous decision upon such subject does not prove a w ant of jurisdiction, but of
correct judgment. On this, as on every other subject, there will be a vari
ety of opinions as to what is “ necessary and proper.” T he majority must
determine that question; and, although there may, in this, as in every other
case, be flagrant abuses of power, for which we are responsible, there never
can be any usurpation. I t must always be a question of sound discretion,
guided by the interests of the Union, and not a question of power; unless, in
deed, we should fall in with the fancy of my honorable colleague, (M r. B i j r w e ll ) who opened this debate, and interpolate the word “ absolutely,” so
that he could adopt no means but such as are “ absolutely necessary,” which
would leave us, as has been ably demonstrated by the honorable member from
M aryland, (M r. K ey) without any power at all.
Everv subject which is presented to us within the acknowledged sphere of
our authority, involves the question whether it is “ necessary and proper.” I f
a tax be proposed, which (as the constitution is expounded by some, and
which, I believe to be correct) can only be laid “ to pay the debts and pro
vide for the common defence and general welfare,” it may be objected that it
is unconstitutional: because these objects may be provided for without any
tax, or without the one proposed. B ut there can be no doubt that this would
be exclusively a question of expediency and discretion.
T he constitution of the United States has universally been considered as a
grant of particular and not of general powers; those powers are the primary
or expressly delegated, and the derivative or implied. T he character of the
instrum ent precluded the necessity of a “ bill of rights,” because the question
never could arise, what was reserved, but, what teas granted. T he framers
of the constitution were well aware of this; and so were the People who adopt
ed it. It is, therefore, fairly to be inferred, that, whenever there appears a
limitation or restriction in the shape of a negative clause, Congress might have
exercised the power interdicted, nad such clause not been made part of the
instrument. By examining this part of the subject, we will be able to deter
mine how far it was supposed derivative or implied powers would extend when
not restricted.
T he first clause of the 9th section of the first article, provides, that “ the
migration or importation of such persons as any of the States now existing shall
think proper to admit, shall not be prohibited by the Congress prior to the
year 1808, but a tax or duty may be imposed on such importation, not exceed
ing ten dollars for each person.”
Among the delegated powers, the right to prohibit the migration or impor
tation of persons into the States, is no where to be seen; but it was justly
conceived that it was incidental to the power “ to regulate commerce with
foreign nations.”
T he second clause of the same section restricts the suspension of the writ
of habeas corpus to certain circumstances. T here is no express power given
to any departm ent to grant it, in any instance. B ut Congress have the pow
er to organize the judicial courts, to which is incident, the power to regulate
v rits and other processes. And as this celebrated writ was deemed the

240

BANK OF T H E U N ITED STATES.

birth-right of the People of the States, under the State authorities, as the in
strum ent to release them from arbitrary imprisonments, it was taken for grant
ed that its benefits would be extended to them under this Government, and it
was conceived necessary to restrict the discretion of Congress in suspending
its salutary operations.
In the third clause of the same section, Congress are prohibited from pass
ing any bill of attainder, or ex post facto law. Congress are no where direct
ly authorized thus to interfere with the ordinary course of justice, so as to sub
ject an individual to the consequences of an attainder, at their own mere will,
without a trial; or, to make an innocent act criminal, by a posterior declara
tion. But they have the power to define and punish certain oft'ences, which
would have implied the power to d o it in any manner they might have thought
proper: hence it became necessary to interpose this restriction.
'I lie next three clauses contain restrictions on the power to lay and collect
taxes, and appropriate their proceeds; and shew that it was considered as un
limited, unless expressly restricted.
The last clause in the same section gives a more comprehensive idea of the
extent to which the framers of the constitution conceived the implied powers
of this Government might be exercised, if not restricted. It provides, “ that
no title of nobility shall be granted by the United States.” T he whole context
of the constitution doss not afford the most distant hint, that the creation of
an aristocracy is among the delegated powers. And yet the interdiction to
create such a body, the very name of which is so justly abhorrent in this coun
try, was deemed necessary. And why ? Because this Government has the
power to raise and support armies and navies. It has various important con
cerns committed to it, in which eminent men may render great and meritorius
services. And, as it would not have been restricted in rewarding them accord
ing to its pleasure, it might, in conformity with the usage of other nations,
have conferred distinction upon them; which, though they could give 110 ex
clusive right to office, might be attended with emolument and honor.
I f the doctrines which have been advanced upon this floor, during the p re
sent debate, are truly genuine and constitutional, then does the history of this
country, for the last twenty years, present a spectacle the most alarming: then
have the operations of our Government been nothing but an uninterrupted
scene of usurpation. From its organization, under the auspices of the first
of men and ot patriots, until the present moment, violation has succeeded vio
lation; the constitution has been trodden under foot by all parties, and is no
longer worth preserving. Sir, I will go further. I venture to say, that, if those
doctrines are adhered to and acted on in every instance, this Government is
at an end. It cannot adopt the simplest measures necessary for its own exist
ence and for the welfare of this People, without resorting to means not ex
pressly delegated. I f this critical construction prevails, we have no right to
disband one single man from the army or navy. Congress are expressly au
thorized to raise and support them; but the power to lesseii and destroy them,
is not to be seen on the face of the constitution. W e are invested with the
power to regidate commerce with foreign nations; but where is the authority
to suspend or annihilate it by an embargo or non-intercourse, unless it is im
plied?
T o those whoare not carried away by these doctrines, pregnant with so much
mischief to this community, it is well worth the trouble to examine the opera
tions of the Government under every administration. They will be able to as
certain the opinions of men of every party manifested by their public acts, as
to the extent of the means confided to us to give effect to the delegated pow
ers. And this inquiry will, I am persuaded, tend to confirm the construc
tion which I have attempted to give to the constitution.
By the constitution, a judicial departm ent, with limited jurisdiction, is es
tablished, to give effect to the due administration of justice, so far as it is con
fided to the Government of the United States. Congress have made provi
sion for the punishment of perjury, bribery, stealing or falsifying records, res
cue, opposition to the execution of judicial process, and other oftenccs- It

ON THfe B IL L TO RENEW' T H E CH A RTER OF 1791,

241

does not appear that the particular definition to these crimes and the punish
m ent designated are “ absolutely necessary.” Some other means, perhaps,
more conducive to the end, might: have been employed: and, indeed, it might
be said, that, as Congress, by the constitution, are authorized to “ define and
punish” certain crimes, it implied a negative to define and punish any other,
and consequently those ju st mentioned. B ut can it be necessary to waste the
time, or insult the good sense of this House, to attem pt to prove, that, in these
cases, Congress exercised their constitutional power only?
T he power to borrow money, on the credit o t the United States, has been ex
ercised by authorizing the commissioners of the sinking fund to issue certifi
cates, pledging the public faith to pay so much money as therein stated, to be
sold in the market for what they could bring.
T o give effect to the revenue system of the U nited States, Congress have
employed means, which, instead of appearing “ absolutely necessary,” have a
very remote connexion with the object; besides the many penalties and for
feitures which are created, the citizen is subjected to the more arbitrary
searches and seizures dependent-upon the mere will of the collector; yet, the
authority to do this has never been questioned. U nder the power to regulate
commerce. Congress have erected light houses, beacons, and buoys; they have
established rules for the regulation and government of the seamen in the m er
chant service: they have adopted measures for their protection on the high
seas, and in foreign countries; they hav

Full text of Legislative and Documentary History of the Bank of the United States : Including the Original Bank of North America

FRASER