FEDERAL BANKING LAWS AND REPORTS, 1780-1912

Proceedings in Congress on Bank of North America

[Source: Gaillard Hunt, Journals of the Continental Congress, 1774-1789, Vol. 17, pp. 542, 548–550, 585; Vol. 20, pp. 519, 545-548; Vol. 21, pp. 1185-1190] IN CONGRESS, June 21, 1780.

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A letter, of this day, from the Board of War, was read, informing, "that a number of patriotic persons have formed a plan for the establishment of a bank, whose object is the public service; that the directors have applied to that Board to represent to Congress the desire of the company, that a committee of this body may be appointed to confer with the inspectors and directors on the subject to morrow morning: Whereupon,

Ordered, That a committee of three be appointed for the purpose above mentioned:

The members chosen, Mr. [Oliver] Ellsworth, Mr. [James] Duane, and Mr. [John Morin] Scott.

The committee, appointed to confer with the inspectors and directors of the proposed bank brought in a report, which was read stating:

That the gentlemen appointed to confer with the committee, communicated to them a plan for the establishment of a bank for the sole purpose of furnishing and transporting on the eredit and by the exertions of the subscribers, three millions of rations and three hundred hogsheads of rum for the use of the army.

That the committee were in the said conference informed that subscribers stand already engaged to support the said bank to the amount of two hundred and seventy-five thousand pounds, Pennsylvania currency; and that there is no doubt but that such further sums as will be necessary to its eredit and the object of its establishment will be eheerfully subscribed.

That this liberal offer at a conjuncture when the efforts of the states have not produced sufficient supplies is equally seasonable and praiseworthy.

That as the subscribers mean not to derive to themselves the least private gain from their patriotie exertions, so it is the opinion of the committee, that they ought to be fully indemnified against any loss or expense with which it may be attended.1

1 In the original journals, this passage was crossed out.

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The committee also laid before Congress the plan of the bank, communicated to them at the said conference, which being read, Congress thereupon came to the following resolutions:

Whereas a number of the patriotic citizens of Pennsylvania, have communicated to Congress a liberal offer, on their own credit and by their own exertions, to supply and transport three million of rations and 300 hogsheads of rum for the use of the army, and have established a bank for the sole purpose of obtaining and transporting the said supplies, with greater facility and despatch; and whereas on the one hand the associators, animated to this laudable exertion by a desire to relieve the public necessities, mean not to derive from it the least pecuniary advantage, so on the other it is just and reasonable that they should be fully reimbursed and indemnified: therefore,

Resolved, unanimously, That Congress entertain a high sense of the liberal offer of the said associators to raise and transport the before mentioned supplies for the army, and do accept the same as a distinguished proof of their patriotism.

Resolved, That the faith of the United States be, and the same hereby is pledged to the subscribers to the said bank, for their effectual reimbursement and indemnity in the premises.

Resolved, That the Board of Treasury be directed to deposit in the said bank, bills of exchange in favor of the directors thereof, on the ministers of these United States, in Europe, or any of them, and in such sums as shall be thought convenient, but not to exceed in the whole one hundred and fifty thousand pounds sterling; that the said bills are to be considered not only as a support of the credit of the said bank, but as an indemnity to the subscribers for all deficiencies of losses and expences which they may sustain on account of their said engagements, and which shall not, within six months from the date hereof, be made good to them out of the public treasury; and in case of failure, such a proportion of the said bills as shall be requisite to make good the said deficiency, shall be negotiated for that purpose by the said directors, and the residue thereof returned into the treasury.

Resolved, That upon representation made that the bank stands in need of occasional assistance, Congress will advance as much of their current money as can be spared from other services.

Resolved, That a standing committee of Congress be appointed to confer with the officers of the said bank, as occasion may require:

The members chosen, Mr. [Oliver] Ellsworth, Mr. [James] Duane, and Mr. [John Morin] Scott.

Ordered, That two members be added to the committee, appointed to confer with the directors and inspectors of the proposed bank, in the room of Mr. [James] Duane and Mr. [Oliver] Ellsworth, who are absent:

The members chosen, Mr. [Robert R.] Livingston and Mr. Houston, [Samuel] Adams.

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IN CONGRESS, May 21, 1781.

A letter, of 17th, from General Washington; and

One, of 17th, from R. Morris, enclosing a plan of a bank, were read: Ordered, That Wednesday next be assigned for considering the enclosed plan.

IN CONGRESS, May 26, 1781.

The report of the committee [consisting of Mr. Witherspoon, Mr. Sullivan, Mr. M. Smith, Mr. Clymer] on the letter from Mr. R. Morris [with the plan of a bank] was taken into consideration; 1 Whereupon, The Committee to whom was referred the letter from Mr. R. Morris of the 17 May 1781 together with a plan for establishing a National Bank, beg leave to Report,

1 The plan, in the writing of Robert Morris, is in the Papers of the Continental Congress, as follows:

Plan for establishing a national bank in the United States of North America.

I. That a subscription be opened for four hundred thousand dollars, in shares of four hundred dollars each, to be paid in gold or silver.

II. That the subscriptions be paid into the hands of George Clymer and John Nixon, esqrs, or their agents.

III. That every subscriber of less than five shares, pay the whole sum on the day of his subscription.

IV. That every subscriber of five shares, or upwards, pay one-half the sum on the day of his subscription, and the other half within three months of that day.

V. That every holder of a share shall be entitled to vote by himself, his agent, or proxy properly appointed, at all elections for Directors, and that he have as many votes as he holds shares; and that every subscriber may sell or transfer his share or shares at his pleasure, the transfer being made in the bank books, in presence and with the approbation of the proprietor, or his lawful attorney, the purchaser then to become entitled to the right of voting, &c.

VI. That there be twelve Directors chosen from among those entitled to vote, who, at their first meeting, shall choose one as President.

VII. That there be a meeting of the Directors quarterly, for the purpose of regulating the affairs of the Bank; any seven of the Directors to make a Board, and that the Board have power to adjourn from time to time.

VIII. That the Board of Directors determine the manner of doing business, and the rules and forms to be pursued, appoint the various officers which they may find necessary, and dispose of the money and credit of the Bank for the interest and benefit of the proprietors, and make, from time to time, such dividends, out of the profits, as they may think proper.

IX. That the Board be empowered, from time to time, to open new subscriptions, for the purpose of increasing the capital of the Bank, on such terms and conditions as they shall think proper.

X. That the Board shall at every quarterly meeting, choose two Directors to inspect and control the business of the Bank for the ensuing three months.

XI. That the Inspectors so chosen, shall on the evening of every day, Sundays excepted, deliver to the Superintendent of the Finances of America, a state of the cash account and of the notes issued and received.

That the bank notes, payable on demand, shall by law be made receivable in the duties and taxes of every State in the Union, and from the respective states by the treasury of the United States as specie.

XII. That the Superintendent of the Finances of America shall have a right, at all times, to examine into the affairs of the Bank, and for that purpose shall have access to all the books and papers.

XIII. That any Director or officer of the Bank, who shall convert any of the property, monies or credits thereof to his own use, or shall any other way be guilty of fraud or embezzlement, shall forfeit all his share or stock to the company.

XIV. That laws shall be passed making it felony without benefit of clergy, to commit such fraud or embezzlement.

XV. That the subscribers shall be incorporated under the name of the President, Directors and Company of the Bank of North America.

XVI. That none of the Directors shall be entitled to any pecuniary advantage for his attendance on the duties of his office as Director, or as President or Inspector, unless an alteration in this respect, shall hereafter be made, by the consent of a majority of the stock-holders at a general election.

XVII. That as soon as the subscription shall be filled, George Clymer and John Nixon, esqrs, shall publish a list of the names and sums respectively subscribed, with the places of abode of the subscribers, and appoint a day for the choice of Directors, to whom, when chosen, they shall deliver over the money by them received.

That they approve the said plan and are of opinion that when carried into Execution, it will promote the Interest of the Subscribers, facilitate the commercial intercourse of Individuals, and be highly convenient and advantageous to Government.

Your Committee therefore submit the following resolutions:

Resolved, That Congress do approve of the plan for establishing a national bank in these United States, submitted to their consideration by Mr. R. Morris, the 17 day of May, 1781; and that they will promote and support the same by such ways and means, from time to time, as may appear necessary for the institution and consistent with the public good:

That the subscribers to the said bank shall be incorporated agreeably to the principles and terms of the plan, under the name of The President, Directors and company of the bank of North-America, so soon as the subscription shall be filled, the directors and president chosen, and application for that purpose made to Congress by the president and directors elected.

On the question to agree to this paragraph, the yeas required by Mr. T[homas] Smith,

and nays being

Resolved, That it be recommended to the several states by proper laws for that purpose, to provide that no other bank or bankers shall be established or permitted within the said states respectively during the war.

Resolved, That the notes hereafter to be issued by the said bank, payable on demand, shall be receivable in payment of all taxes, duties and debts due, or that may become due or payable to the United States: Resolved, That 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 counterfeit ; also making it felony without benefit of clergy,

for any president, inspector, director, officer or servant of the bank, to convert any of the property, money or credit of the said bank to his own use, or in any other way to be guilty of fraud or embezzlement as an officer or servant of the bank.

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IN CONGRESS, December 29, 1781.

An ordinance for incorporating the subscribers to the national bank, was read a first time:

The Committee appointed to confer with the Bank upon the act of incorporation proposed by them to Congress.

Report,

That it does not seem probable, that an Act of incorporation could be obtained from the Legislature of Pennsylvania before the middle of next March.

That in the Meantime, the finances of the United States must suffer considerably without the aid of the Bank.

That the Bank cannot operate without an act of incorporation from Congress itself.

The Committee therefore

Report the following act of incorporation (here read the act, and let a question be taken upon reading it a second time on Monday next) and the Committee beg leave to sit again.

Ordered, That Monday next be assigned for a second reading.

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IN CONGRESS, December 31, 1781. The ordinance for incorporating the subscribers to the Bank of North America, was read a second time, and ordered to be read a third time at two o'clock.

The ordinance being read a third time, was agreed to as follows: An ordinance to incorporate the subscribers to the Bank of North America.

Whereas Congress on the 26th day of May last did, from a conviction of the support which the finances of the United States would receive from the establishment of a national bank, approve a plan for such an institution submitted to their consideration by Robert Morris, esq. and now lodged among the archives of Congress, and did engage to promote the same by the most effectual means; and whereas, the subscription thereto is now filled 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:

Be it therefore ordained, and it is hereby ordained, by the United States in Congress assembled, that those who are, and those who shall become subscribers to the said bank be, and forever after shall be, a corporation and body politic to all intents and purposes, by the name and stile of "The President, Directors and Company of the Bank of North America."