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be depressed. The private dealers in exchange would take the place of the bank in that business, and their profits on bills would be taken out of the pockets of the planters, as the merchants would always regulate the price they would give for an agricultural production, by the high or low rate at which they could negotiate their bills. On account of its connexion with all parts of the Union, the bank affords this important advantage to the public; it is always a purchaser and always a seller of exchange at fixed and low rates, and thus prevents extortion by private dealers.” ****** "Before this bank went into operation, exchange was from 8 to 10 per cent. either for or against Charleston, which was a loss to the planter to that amount on all the produce of Georgia and South Carolina, and indeed you might say, all the produce of the Southern and Western States." *****

"If the Bank of the United States were destroyed, the local banks would again issue their paper to an excessive amount; and while a few adventurous speculators would be much benefitted by such an issue, the honest and unsuspecting citizens of our country would, finally, be the losers. If we look back to what took place in New York, Pennsylvania, the Western States, and even in our own State, we shall see the grossest impositions committed by banks, commencing with a few thousand dollars in specie, buying up newspapers to puff them as specie-paying banks, in order to delude the public, and, after getting their bills in circulation, blowing up, and leaving the unsuspecting planter and farmer victims of a fraud, by which they were deprived of the hard earnings of years of honest industry. But, sir, I believe the bank owes a great deal of the opposition which exists, and has existed, to the fact that it has put down these fraudulent institutions, got up by combinations and conspiracies of speculators; and who, after receiving large dividends, managed to destroy the credit of their own paper, and, by the agency of brokers, bought it up at half its nominal value.

"Since I last wrote you, I had a conversation with a gentleman in the confidence of some of the moneyed men of the North, and he says they are determined to break up the United States' Bank, to enable them to use their money to advantage; as that institution gives so many facilities to the community, as to deprive them of their former

profits.” * * *

“There is another consideration : the distress would be immense, which a refusal to renew the charter would produce among those who are indebted to the institution: for I find that to this branch, the planters owe upwards of a million of dollars; and I have no hesitation in saying, as safe a debt as is owing to any bank in the Union. But if the bank should wind up its affairs, these planters could not get credit from other institutions; and as the bank can sue in the United States' Court, where judgment is obtained almost at once, property would be greatly depressed, and moneyed men would buy it up for half its value. Throughout the Union, all classes would suffer, except those who should hold up their money to go into the brokerage business, or buy property at a sacrifice. If I were sure the bank would not be rechartered, I would convert my property into money, with a view to dealing in exchange. I could make a vast fortune by it.”

Second Annual Message-Andrew Jackson

Twenty-First Congress, 2d Session

DECEMBER 6, 1830. [Source: James D. Richardson, A Compilation of the Messages and Papers of

the Presidents, Vol. 2, pp. 1091-1092]

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The importance of the principles involved in the inquiry whether it will be proper to recharter the Bank of the United States requires that I should again call the attention of Congress to the subject. Nothing has occurred to lessen in any degree the dangers which many of our citizens apprehend from that institution as at present organized. In the spirit of improvement and compromise which distinguishes our country and its institutions it becomes us to inquire whether it be not possible to secure the advantages afforded by the present bank through the agency of a Bank of the United States so modified in its principles and structure as to obviate constitutional and other objections.

It is thought practicable to organize such a bank with the necessary officers as a branch of the Treasury Department, based on the public and individual deposits, without power to make loans or purchase property, which shall remit the funds of the Government, and the expense of which may be paid, if thought advisable, by allowing its officers to sell bills of exchange to private individuals at a moderate premium. Not being a corporate body, having no stockholders, debtors, or property, and but few officers, it would not be obnoxious to the constitutional objections which are urged against the present bank; and having no means to operate on the hopes, fears, or interests of large masses of the community, it would be shorn of the influence which makes that bank formidable. The States would be strengthened by having in their hands the means of furnishing the local paper currency through their own banks, while the Bank of the United States, though issuing no paper, would check the issues of the State banks by taking their notes in deposit and for exchange only so long as they continue to be redeemed with specie. In times of public emergency the capacities of such an institution might be enlarged by legislative provisions.

These suggestions are made not so much as a recommendation as with a view of calling the attention of Congress to the possible modifications of a system which can not continue to exist in its present form without occasional collisions with the local authorities and perpetual apprehensions and discontent on the part of the States and the people.





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Third Annual Message--Andrew Jackson

Twenty-Second Congress, 1st Session

DECEMBER 6, 1831.

(Source: James D. Richardson, a Compilation of the Messages and Papers of

the Presidents, Vol. 2, p. 1121]

Entertaining the opinions heretofore expressed in relation to the Bank of the United States as at present organized, I felt it my duty in my former messages frankly to disclose them, in order that the attention of the Legislature and people should be seasonably directed to that important subject, and that it might be considered and finally disposed of in a manner best calculated to promote the ends of the Constitution and subserve the public interests. Having thus conscientiously discharged a constitutional duty, I deem it proper on this occasion, without a more particular reference to the views of the subject then expressed, to leave it for the present to the investigation of an enlightened people and their representatives.

Annual Report, Secretary of Treasury (Louis McLane)

Twenty-Second Congress, 1st Session

DECEMBER 7, 1831.

[Source: House Doc. 3, 22d Congress, 1st Session, pp. 7–10, 18-19]

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It will be thus perceived that the Government has the means, if properly employed, of reimbursing the whole of the public debt, by purchase or otherwise, on or before the 3d of March, 1833.

The moral influence which such an example would necessarily produce throughout the world, in removing apprehension, and inspiring new confidence in our free institutions, cannot be questioned. Seventeen years ago, the country emerged from an expensive war, encumbered with a debt of more than one hundred and twenty-seven millions, and in a comparatively defenceless state. In this short period it has promptly repealed all the direct and internal taxes which were imposed during the war, relying mainly upon revenue derived from imports and sales of the public domain. From these sources, besides providing for the general expenditure, the frontier has been extensively fortified, the naval and maritime resources strengthened, and part of the debt of gratitude to the survivors of the revolutionary war discharged. We have, moreover, contributed a large share to the general improvement, added to the extent of the Union by the purchase of the valuable territory of Florida, and finally acquired the means of extinguishing the heavy debt incurred in sustaining the late war, and all that remained of the debt of the revolution.

The anxious hope with which the people have looked forward to this period, not less than the present state of the public mind, and the real interests of the community at large, recommend the prompt application of these means to that great object, if it can be done consistently with a proper regard for other important considerations.

Of these means, as has already been shown, the shares owned by the Government in the Bank of the United States are an indispensable part; and for the reimbursement of the debt within the period contemplated, it will be necessary to effect a sale of them for a sum not less than eight millions of dollars.

The stock created by the United States for their subscription to the Bank having been actually paid previously to the 1st of July last, their interest in that institution has ceased to be nominal merely, and the shares form a part of the fiscal resources applicable to the public demands.

The objects connected with the early reimbursement of the public debt are more important than the interest of the Government as a mere stockholder; and it is therefore respectfully recommended to Congress to authorize the sale of those shares for a sum not less than $8,000,000.

A sale of so large an amount in the public market could not be expected to produce more than the par value, and, if attempted under circumstances calculated to shake public confidence in the stability of the institution, would, in all probability, prove wholly abortive. For these reasons, it is deemed advisable to effect a sale to the Bank itselfa measure believed to be practicable on terms satisfactory both to the United States and that institution.

In submitting this proposition to the wisdom of Congress, it is not intended that its adoption should be founded on any pledge for the renewal of the charter of the Bank. Considering, however, the connexion of the proposition with the Bank, and viewing the whole subject as a necessary part of the plans for the improvement and management of the revenue, and for the support of public credit, the undersigned feels it his duty to accompany it with a frank expression of his opinions.

The act of Congress to establish the Treasury Department makes it the duty of the Secretary of the Treasury to digest and prepare plans for the support of public credit, and for the improvement and management of the revenue. The duties enjoined, as well by this act as by the subsequent one of the 10th of May, 1800, requiring the Secretary "to digest, prepare, and lay before Congress, at the commencement of every session, a report on the subject of finance, containing estimates of the public revenue and public expenditures, and plans for improving or increasing the revenues from time to time, for the purpose of giving information to Congress, in adopting modes for raising the money requisite to meet the public expenditures,” have been supposed to include not merely the application of the resources of the Government, but the whole subject of the currency, and the means of preserving its soundness.

On this supposition, the first Secretary of the Treasury, in his memorable reports of January and December, 1790, recommended a national bank as "an institution of primary importance to the finances, and of the greatest utility in the operations connected with the support of public credit”; and various communications since made to Congress show that the same views were entertained of their duties by others who have succeeded him in the Department.

The performance of the duties thus enjoined by law upon the Secretary of the Treasury implies, however, no commitment of any other department of the Government, each being left free to act according to the mode pointed out by the Constitution.

The important charge confided to the Treasury Department, and on which the operations of the Government essentially depend, in the

improvement and management of the revenue and the support of public credit, and of transferring the public funds to all parts of the United States, imperiously requires from the Government all the facilities which it may constitutionally provide for those objects, and especially for regulating and preserving a sound currency.

As early as May, 1781, the Congress of the United States, convened under the articles of confederation, approved the plan of a national bank submitted to their consideration by Mr. Morris, then superintendent of the finances, and, on the 31st of December, of the same year, “from a conviction of the support which the finances of the United States would receive from the establishment of a national bank,” passed an ordinance, incorporating such an institution, under the named and style of “The President, Directors, and Company of the Bank of North America.” The aid afforded by that institution was acknowledged to have been of essential consequence during the remaining period of the war, and its utility subsequent to the peace of little less importance.

The authority of the present Government to create an institution for the same purposes cannot be less clear. It has, moreover, the sanction of the executive, legislative, and judicial authorities, and a majority of the people of the United States, from the organzation of the Government to the present time. If public opinion cannot be considered the infallible expounder, it is among the soundest commentators of the Constitution. It is undoubtedly the wisest guide and only effective check to those to whom the administration of the Constitution is confided; and it is believed, that, in free and enlightened States, the harmony not less than the welfare of the community is best promoted by receiving as settled those great questions of public policy in which the constituted authorities have long concurred, and in which they have been sustained by the unequivocal expression of the will of the people.

The indispensable necessity of such an institution for the fiscal operations of the Government in all its departments, for the regulation and preservation of a sound currency, for the aid of commercial transactions generally, and even for the safety and utility of the local banks, is not doubted, and, as is believed, has been shown in the past experience of the Government, and in the general accommodation and operations of the present bank.

The present institution may indeed be considered as peculiarly the offspring of that necessity, springing from the inconveniences which followed the loss of the first Bank of the United States, and the evils and distresses incident to the excessive, and, in some instances, fraudulent issues of the local banks during the war. The propriety of continuing it, is to be considered not more in reference to the expediency of banking generally, than in regard to the actual sta of things, and to the multiplicity of State banks already in existence, and which can neither be displaced, nor in other manner controlled in their issues of paper by the General Government. This is an evil not to be submitted to; and the remedy at present applied, while it preserves a sound currency for the country at large, promotes the real interests of the local banks, by giving soundness to their paper.

If the necessity of a banking institution be conceded or shown, that which shall judiciously combine the power of the Government with private enterprise is believed to be most efficacious. The Govern

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