Whole No. 413.
7Te "North-Carolina Free Press,"
BV GEORGE HOWARD,
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MESSAGE
From the President of ibo U. States,
returning the Bank Bill, with his
objections, &e.
To the Senate:
The bill to "modify ami con
tinue" the net entitled "an aet to
incorporate the subscribers of
the Rank of the United States,"
was presented to me on the 4th
of July instant. Having consi
dered it with that solemn regard
to the principles of the Consti
tution which the dav was calcu
lated to inspire, and come to
the conclusion that it ought not
to become a law, I herewith re
turn it to the Senate, in which it
originated, with my objections.
A Bank of the United States
is, in many respects, convenient
for the Government and useful
to the people. Entertaining
this opinion, and deeply im
pressed with the belief that
some of the powers and privile
ges possessed by the existing
.Bank arc unauthorized by the
Constitution, subversive of the
rights of the States, and danger
ous to the liberties of the peo
ple, I felt it my duty, at an early
period of my administration, to
call the attention of Congress
to the practicability of organiz
ing an institution combining all
its advantages and obviating
these objections. I sincerely
regret that, in the act before
me, I can perceive none of those
modifications of the Bank char
ter which are necessary, in my
opinion, to make it compatible
with justice, with sound policy,
or with the Constitution of our.
country. The present corpo
rate bodv, denominated the Pre
sident, Directors and Company
of the Bank of the U. States,
will have existed, at the time
this act is intended to take ef
fect, twenty years. It enjoys
an exclusive privilege of bank
ing under the authority of the
General Government, a mono
poly of its favor and support,
and, .as a necessary conse
quence, almost a monopoly of
the foreign and domestic ex
change. The powers, privile
ges and favors bestowed upon
it, in the original charter, by in
creasing the value of the stock
far above its par value, opera
ted as a gratuity of many mil
lions to the stockholders.
An apology may be found for
the failure to guard against this
result, in the consideration that
the effect of the original act of
incorporation could not be cer
tainly foreseen at the time of its
passage. The act before me
proposes another gratuity to the
holders of the same stock, and,
in many cases, to the same men,
of at least seven millions more.
This donation finds no apology
Tarborough, (Edgecombe County, JV. C.) Tuesday, Juhj 31, 1833.
in any uncertainty as to the ef
fect of the act. On all hands it
is conceded that its passage
will increase at least twenty or
thirty per cent. more, the mar
ket price of the stock, subiert
to the payment of the annuity of
$;uu,UUU per year, secured by
the act; thus adding, in a mo
ment, one-fourth to its par va
lue. It is not our own citizens
only who are to receive the
bounty of our Government.
More than eight millions of thn
stock of this Bank arc held by
foreigners. By this act, the A
meriean Republic proposes vir
tually to make them a present of
some millions of dollars. For
these gratuities to foreigners,
and to some of our own opulent
citizens, the act secures no
equivalent whatever. They are
the certain gains of the present
stockholders under the opera
tion of this act, after making
full allowance for the payment
of the bonus.
Every monopoly, and all ex
clusive privileges, are granted
at the expense of the public
which ought to receive a fair
equivalent. The many millions
which this act proposes to bes
tow on the stockholders of the
existing Bank, must come, di
rectly or indirectly, out of the
earnings of the American peo
ple. It is due to them, there
fore, if their Government sell
monopolies and exclusive privi
leges, that they should at least
exact for them as much as they
arc; worth in open market. The
value of the monopoly in this
case may be correctly asser
tained. The twenty-eight mil
lions of stock would probably
be at an advance of fifty per
cent, and command in market
at least forty-two millions of
dollars, subject to the pay mem
of the present bonus. The
present value of the monopoly,
therefore, is seventeen millions
of dollars, and this the act pro
poses to sell lor three millions,
payable in fifteen annual instal
ments of $200,000 each.
It is not conceivable how the
present stockholders can have
any claim to the special favor of
the Government. 1 he present
corporation has enjoyed its mo
nopoly during the period stipu
lated in the original contract.
If we must have such a corpo
ration, why should not the Go
vernment sell out the whole
stock, and thus secure to the
people the full market value of
a 1 Y T
I he privileges granted: Why
should not Congress create and
sell twenty-eight millions of
stock, incorporating the purcha
sers with all the powers and
privileges secured in this act,
and putting the premium upon
the sales into the Treasury?
But this act does not permit
competition in . the purchase of
this monopoly, it seems to be
predicated on .the erroneous
idea, that the present stock
holders have a prescriptive right,
not only to the favor but to the
bounty of Government. It ap
pears that more than a fourth
part of the stock is held by for
eigners, and the residue is held
by a few hundred of our own
citizens, chiefly of the richest
class: for their benefit does this
act exclude the whole American
people from competition in the
purchase of this monopoly, and
dispose-of it Tor many millions
i .
perceive the justice or policy of
this course. If our Government
must sell monopolies, it would
seem to be its duty to take no
thing less than their full value;
and it gratuities must be made
once in fifteen or twenty years,
let them not be bestowed on the
subjects of a foreign govern
ment, nor upon a designated
and favored class of men in our
own country. It is but justice
and good policy, as far as the
nature of the case will admit, to
confine our favors to our own fel
low citizens, and let each in his
turn enjoy an opportunity to pro
fit by our bounty. In the bear
ings of the act before me upon
ihese points, I find ample reasons
why it should not become a law.
It has been urged as an argu
meat in favor of re-chartering
die 'present Bank, that the call
ing in its loans will produce
great cmbarrassru-Am and dis
tress. Tin? timt allowed to
close Its concerns, is ample, and
if it has been well managed, its!
pressure will be light, and hea
I n I
vy only in case its management
has been bad. If. i Imrpfnrn. it ;
shall produce distress, the fault!
will be its own, and it would
furnish a reason against renew-!
ing a power which has been so!
less than it is worth. This
seems the less excusable, be
cause some of our citizens, not
now stockholders, petitioned
that the door of competition
might be opened, and offered to
take a charter on terms much
more favorable to the govern
ment and country.
But this proposition, although
made by men Whose aggregate
wealth is believed to be equal
to all the private stock in the
existing Bank, has been set a
side, and the bounty of our Go
vernment is proposed to be
again bestowed on the few who
have been fortunate enough to
secure the stock; and, atihis
moment wield the power of the
existing institution. I cannot
obviously abused. But, will taken in connection with a de
there ever be a time when this cision of the Supreme Court,
reason will be less powerful? surrenders by its silence, the
To acknowledge its force, is to j right of the States to tax the
admit that the Bank ought to banking institutions created by
be perpetual, and as a conse- this corporation, under the name
quence, the present stockhold- of branches, throughout the U
ers and those inheriting theirjnion, it is evidently intended
rights, as successors, be estab
fished a privileged order, clo
thed both with great political
; fr i i
nower and enioving immense!
pecuniary advantages from their i
connection with the government
The modifications of the ex
isting charter, proposed by this
act, are not such, in my view, as
make it consistent with the
rights of the States or the liber
ties of the people. The qualifi
cation of the right of the Bank
to hold real estate, the limita
tion of its power to establish
branches, and the power reser
ved to Congress to forbid, the
circulation of small notes, are.tion of this act. As it is only
restrictions comparatively of,
little value or importance. All
the objectionable principles ot ,
the existing corporation, and
t7 f
most of its odious features, are
retained without alleviation.
The fourth section provides
"that the notes or bills of the
said corporation, although the
same be on the faces thereof,
respectively made payable at
one place only, shall, neverthe
less, be received by the said
corporation at the Bank, or at
any of the offices of discount
and deposit thereof, if tendered
in liquidation or payment of any
balance or balances, due to said
corporation or to such office of
discount and deposit from any
other incorporated Bank." This
provision secures to the State
Banks a legal privilege in the
Bank of the United States,
which is withheld from all pri
vate citizens. If a State Bank
in Philadelphia, owe the Bank
of the United States and have
notes issued by the St. Louis
Branch, it can pay the debt with
those notes; but if a merchant,
mechanic, or other private citi
zen be in like circumstances, he
cannot by law pay his debt with
those notes, but must sell them
at a discount, or send them to
St. Louis to be cashed. This
boon, conceded to the State
Banks, though not unjust in it
self, is most odious, because it
does not measure out equal jus
tice to the high and the low, the
rich and the poor.
To the extent of its practical
effect, it is a bond of union am
ong the banking establishments
of the nation, erecting them in
to an interest, separate from that
of the people, and its necessary
tendency is to unite the Bank of
the United States and the State
Banks in any measure which
may be thought conducive to
their common interest.
The ninth section of the act
recognizes principles of worse
tendency than any provision of
; the present charter.
It enacts that "the Cashier of
the Bank shall annually report
to the Secretary of the Treasu
ry the names of all stockholders
who are not resident citizens of
the United States, and on the
application of the Treasurer of
any State, shall make out and
transmit to such Treasurer n
list of stockholders residing in,
or citizens of such Stale, with
the amount of stock owned by
each." Although this provision,
to be construed as a concession
of their right to tax that portion
of the stock which may be held
. . .
by their own citizens and resi
dents. In this light, if the act
becomes a law, it will be under
stood by the States, who will
probably proceed to levy a tax
equal to that paid upon the
stock of&anks incorporated by
themselves. In some States
that tax is now one per cent.,
either on the capital or on the
shares, and that may be assu
med as the amount which all
citizens or residentstockholders
will be taxed under the opera-
the stock held in the States, and
not that employed within them,
which woukj oe suojeci 10 laxa
tion; and as the names ot for
eign stockholders are not to be
reported to the Treasurers of
the Slates, it is obvious that the
stock held by them will be ex
empt from this burden. Their
annual profits, ufiill, therefore be
one per cent, more than the ci
tizen stockholders, and as the
annual dividends of the Bank
mnv be sofelv estimated at seven
Vol. Fill No 49.
per cent., the stock will be
worth ten or fifteen per cent,
more to foreigners than to citi
zens of the United Stales. To
appreciate the effects which
this state of things will produce,
we must take a brief review of
the operations and present con
dition of the Bank of the United
States.
By documents submitted to
Congress at the present session,
it appears that on the 1st of Jan
uary, 1332, of the 28 millions of
private stock in the corporation
83,405,500 were held by for
eigners, mostly of Great Bri
tain. The amdunt of stock
held in the nine Western and
Southwestern Slates, is $140,
200; and in the four Southern
States, is $5,623,100; and in
the Middle and Eastern States,
is about $13,522,000. The
profits of the Bank in 1831, as
shown in a statement to Con
gress, were about $3,455,598;
of this there accrued in the nine
Western States, about $1,640,-
043; in the four Southern States
about $352,507; and in the Mid
dle and Eastern States, about
$1,463,041. As little stock is
held in the West, it is obvious
that the debt of the people, in
that section, to the Bank, is
principally a debt to the eastern
and foreign stockholders; that
the interest they pay up'on it, is
carried into the Eastern States
and into Europe; and that it is
a burden upon their industry
and a drain of their currency,
which no country can bear with
out inconvenience and occasion
al distress. To meet this bur
den, and equalize the exchange
operations of the Bank, the
amount of specie drawn from
those States through its bran
ches within the last two years,
as shown by its official reports,
was about $6,000,000. More
than half a million of this am
ount does not stop in the East
ern States, but passes on to
Europe to pay the dividends of
the foreign stockholders. In
the principle of taxation recog
nized by this act, the Western
Stales find no adequate com
pensation for this perpetual bur
den on their industry, and drain
of their currency. The Branch
Bank at Mobile made, last year,
$95,140; yet, under the provi
sions of this act, the State of
Alabama can raise no revenue
frpm these profitable operations,
because not a share of the stock
is held by any of her citizens.
Mississippi and Missouri are in
the same condition in relation
to the branches at Natchez and
St. Louis; and such, in a great
er or less degree, is the condi
tion of every Western State.
The tendency of the plan of
taxation which this act propo
ses, will be to place the whole
United States in the same rela
tion to foreign countries, which
the Western States now bear to
the Eastern. When by a tax
on resident stockholders, the
stock of this Bank is made
worth ten or fiften per cent,
more to foreigners than to resi
dents, most of it will inevitably
leave the country.
Thus will this provision, in
its practical effect, deprive the
Eastern, as well as the Southern
and Western Slates, of the
means of raising a revenue from
i he extension of business, and
great profits of this institution,