United States Bank

“ A bank owned by Government, and under its command, would be an engine dangerous to the people. But when owned by individuals, neither the people nor the Government have any thing to fear from it. It is then dependent on both for its business, prosperity, and usefulness.
With the evidence which both history and experience offer to our reflection, 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. ”

“ Congress can hardly consent to see the southern States torn to pieces and rendered disaffected towards the federal government, which would seem to be the inevitable consequence of the present measures of the United States Bank, which it is enabled to pursue only by the means derived from the collection of the revenue. ”

“ The key to the proper interpretation of the act of Congress is its policy and purpose. The object of the law was to establish a system of national banking institutions, in order to provide a uniform and secure currency for the people, and to facilitate the operations of the Treasury of the United States. The capital of each of the banks in this system was to be furnished entirely by private individuals ”

“ Events have satisfied my mind, and I think the minds of the American people, that the mischiefs and dangers which flow from a national bank far over-balance all its advantages. The bold effort the present bank has made to control the Government, the distresses it has wantonly produced, the violence of which it has been the occasion in one of our cities famed for its observance of law and order, are but premonitions of the fate which awaits the American people should they be deluded into a perpetuation of this institution or the establishment of another like it. ”

“ Those of her representatives who may deem it politic and constitutional to vote for a continuance of the charter of the United States' Bank, ought surely to oppose any increase of the present capital; we have been told that that which now exists has been found sufficient for all purposes, at a time when our commerce was much more extensive than we have reason to suppose will soon again be the case. ”

“ But a bank of the United States would not, if it could, restrain the issues and loans of the State banks, because its duty as a regulator of the currency must often be in direct conflict with the immediate interest of its stockholders. If we expect one agent to restrain or control another, their interests must, at least in some degree, be antagonistic. ”

“ The commercial banks of the United States may to a very considerable degree check dynamic tendencies, but in general, they do not lead and direct them. Bank-credit, directed by others than commercial bankers, does, however, enormously facilitate both the starting of new enterprises and social readjustment to them. ”

“ Wherever the investigator comes on any of the questionable banking or State financiering of the period, there he is very sure to find the United States Bank or some members of the Bank clique in the midst of it. ”

“ And it is furthermore evident, that the Bank, which is met at every turn as an agent in all transactions, which governs credit, regulates the currency, animates or checks at will the activity of commerce by narrowing or widening the channels of circulation, the Bank, which by its numerous branches is, like the fabled polypus, everywhere present, the Bank with its funds, its centralisation, its trusty creatures, is certainly an anomaly, which may become big with danger. ”

“ Section 19 of the Federal Reserve Act is amended so as to forbid a member bank to act as the medium or agent of any nonbanking corporation, partnership or individual in making loans on the security of stocks, bonds and other investment securities to brokers or dealers in such securities, and a fine is provided for violation. ”

“ The second attempt to engraft a Central Bank on American industry was the Second Bank of the United States. It was chartered on April 10, 1816, and was a stormy petrel of finance. About it waged a running battle. It was from birth to death the center of a conflict. Against its domination American industry rebelled. Real producers of real wealth constantly fought this parasite of finance. ”

“ It would then be sufficient that the Bank should not receive the bills of any other bank, which issued notes of less than 10 or 20 dollars, or which received the bills of other banks, that issued notes less than the same minimum. In fine, a National Bank is an admirable instrument of exchange, and the most influential friends of the Administration are convinced of the necessity of an institution of the sort. ”

“ That when the United States Government shall have made provision for refunding the 2 per centum bonds or consols into 3 per centum bonds and the American Reserve Bank Fund shall amount to the sum of five hundred million dollars, the United States Treasury shall transfer to and keep with the American Reserve Bank a sufficient balance—upward of fifty million dollars—to meet all of its checks and drafts ”

“ Present organization of the national banks. National banks are owned by private individuals who subscribe the capital stock. These stockholders, or shareholders, elect the bank’s officers, who in turn manage the business. The profits go to the shareholders in the form of annual dividends. Each national bank must buy a designated amount of United States bonds and these bonds are deposited in Washington. ”

“ Stockholders actually resident in the United States and none other might vote by proxy. Five of the elected directors and one of the appointed directors were to go out each year, and no one might be a director more than three years out of four, except the president. The Bank might not buy public stocks nor take over six per cent. for loans. It was forbidden to loan the United States more than $500,000, or any State more than $50,000, or any foreign prince or state anything. ”

“ We say, therefore, in the words of the constitution, that a bank is necessary and proper, to enable the Government to carry into complete effect the right to lay and collect taxes, imposts, duties, and excises. We do not say that the existence of the Government absolutely depends upon the operations of a bank, but that a national bank enables the Government to manage its fiscal concerns more advantageously than it could do by any other means. ”

“ But such evolution can not develop impartially if the banks of one system are given or permitted any advantages of opportunity over those of the other system. And I trust also that the new legislation will carefully and completely protect and assure the individuality and the independence of each bank, to the end that any tendency there may ever be toward a consolidation of the money or banking power of the Nation shall be defeated. ”

“ One of the chief subjects of complaint was that the national banks get double interest on their capital. Every bank of issue gets double interest on its capital, minus such deductions as must be taken into account for taxes, specie reserve, and so on. If the bonds must be bought at a premium, and only 90 cents on $1 of their par value can be obtained in circulation, the deductions are so important that the special advantages of being in the national system are very slight. ”

“ One argument, much confided in by gentlemen who have opposed the present bill, is, not that banks are not necessary to the collection of the revenue, but that State banks will answer. In return, I insist that no State banks did exist when the constitution was first formed, therefore the power to create a National Bank is necessarily given in the power to levy and collect taxes. To this it is replied that to create a National Bank is to legislate by implication; it is a separate, substantive, and independent power; to levy a tax is one thing, to make a bank another. ”