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LEGISLATIVE

AND

DOCUMENTARY HISTORY

OF THE

UNITED STATES BANK.

CHAPTER I.

BANK OF NORTH AMERICA:

PROCEEDINGS IN CONGRESS ON ITS ORIGINAL INSTITUTION.

Is tracing the history of the Bank of the United States, it seems proper to give some account of that moneyed institution, which, deriving its incipient powers from the General Government, may be considered as the prototype of the corporations which have more recently borne that name. The Bank of N America, which was the precursor of that of the United States, was first incorporated in 1781, by an ordinance of the American Congress. Its dependence, however, upon this creating power, was of short continuance: for, in the next year, it accepted of a charter from the State of Pennsylvania, and Las since been content to derive its powers from that source. All that is attempted here, in relation to it, is to give the proceedings of Congress, on its original institution, from the first introduction of the plan of the bank, to its final consummation, in the grant of the ordinance; and these are given in the order of their dates, and chiefly in the words of the Journals of Congress, from which they are taken.

The proceedings on the enactinent of this ordinance, together with those given in the subsequent chapters, will place the reader in possession of the entire legislation of Congress, both before and since the adoption of the constitution, upon the subject of a bank.

Proposition for the establishment of a Bank.

IN CONGRESS, June 21, 1780. A letter of this day, from the Board of War, was read, informing "that a number of patriotic persons, having 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 committtee 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 were, Mr. Ellsworth, Mr. Duane, and Mr. Scott.

JUNE 22, 1780.

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

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 millions 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 the 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 beforementioned 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 in the premises.

Resolved, That the Board of Treasury be directed to deposite, 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, £150,000 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 deficiences of losses and expenses 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 said bills as shall be requisite to make good the deficiency, shall be negotiated for that purpose, by the said directors, and the residue 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 are Mr. Ellsworth, Mr. Duane, and Mr. Scott.

JUNE 23, 1780.

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. Duane and Mr. Ellsworth, who are absent. The members chosen are Mr. Livingston and Mr. Adams.

Whether the preceding proposition and resolutions had any immediate connexion with the plan that was subsequently submitted, as hereafter exhibited, by Robert Morris, and adopted by Congress, does not appear.

Proceedings on the incorporation of the Bank of North America.
MAY 26, 1781.

On the report of a committee, consisting of Messrs. Witherspoon, Sullivan, M. Smith, and Clymer, to whom was referred a letter from Mr. R. Morris, with the plan of a bank:

Resolved, That Congress do approve of the plan for establishing a national bank, in these United States, submitted to their consideration by R. Morris, on the 17th 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 and nays being required by Mr. T. Smith, were as follows:

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ay. Zay.

ay.

no.

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no.

Mr. Varnum,

Mr. Huntington, ay.

Mr. Witherspoon, ay ay.

Houston,

Mr. Clymer,

T. Smith,

Mr. Jenifer,

Carroll,

Mr. Jones,

ay.

ay.divided.

no.

ay.ay.

North Carolina,

South Carolina,

Georgia,

ay. 5

ay.

Madison,

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Bland,

ay.

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So it was resolved in the affirmative.

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 said bank.

The plan of the bank above referred to is as follows:

1st. That a subscription be opened for 400,000 dollars, in shares of 400 dollars each, to be paid in gold or silver.

2d. That the subscription be paid into the hands of George Clymer and John Nixon, Esquires, or their agents.

3d. That every subscriber of less than five shares shall pay the whole sum on the day of his subscription.

4th. That 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 that day.

5th. That every holder of a share shall be entitled to vote by himself, his agent, or proxy, properly appointed, at all elections of 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 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.

6th. That there be twelve directors chosen from among those entitled to vote, who, at their first meeting, shall choose one as president.

7th. That there be a meeting of directors quarterly, for the purpose of regulating the affairs of the bank, and seven of the directors to make a Board, and that the Board have power to adjourn from time to time.

8th. 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.

9th. That the Board be empowered, from time to time, to open new subscrip tions for the purose of increasing the capital of the bank, on such terms and conditions as they shall think proper.

10th. That the Board, at every quarterly meeting, shall choose two directors to inspect and control the business of the bank for the ensuing three months. 11th. 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.

12th. 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.

13th. 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.

14th. That any director or officer of the bank, who shall convert any of the property, moneys, 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.

15th. That laws shall be passed, making it felony, without benefit of clergy, to commit such fraud or embezzlement.

16th. That the subscribers shall be incorporated under the name of the President, Directors, and Company, of the Bank of North America."

17th. 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 stockholders, at a general election.

18th. That, as soon as the subscription shall be filled, George Clymer and John Nixon, Esquires, shall publish a list of the names and sums respectively subscribed, with the place 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.

DECEMBER 29, 1781.

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

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

MONDAY, December 31st. The said ordinance was read a second and third time, and 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 style of The President, Directors, and Company, of the Bank of North America."

And be it further 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, chattels, and effects, of what kind, nature, or quality, soever, to the amount of ten millions of Spanish 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.

And be it further ordained, That the said coporation be, and shall be, for ever, hereafter, able and capable, in law, to sue and be sued, plead and be impleaded, answer and be answered unto, defend and be defended, in courts of record, or any other place whatsoever, and to do and execute all and singular other matters and things that to them shall or may appertain to do.

And be it further ordained, That, for the well governing of the said corporation and the ordering of their affairs, they shall have such officers as they shall hereafter direct or appoint. Provided, nevertheless, That twelve directors, one of whom shall be the president of the corporation, be of the number of their officers.

And be it further 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, according to the laws and regulations of the said corporation.

And be it further 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 occasional meetings for that purpose, as shall be described, fixed, and determined, by the laws, regulations, and ordinances, of the said corporation.

And be it further 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 corporation.

Provided, 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 laws or constitution of such State.

And be it further 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.

And be it further 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

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