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"But this evil of a decreasing currency will not occur as a rare calamity, once, perhaps, in a century, but will be renewed with every flux and reflux of the exchanges between the different portions of the country, as long as the bills of the Bank of the United States are thus receivable by the Government. "3d. It makes the necessary public burthens, in some instances, doubly oppressive. In all the States south of Virginia, and in nearly, if not all, the Western States, the Government of the United States does not expend half the revenue it collects; the surplus must be remitted to other points, where it is necessarily to be expended. This draws so much of the capital of those States from them, and adds it to the capital of another-New York, for example. This is not a subject of complaint, though it is certainly an evil; but, when the revenue of New York is collected in the notes of the offices of the South and West, perhaps to an equal amount, and drawn from the necessary currency of these portions of the country, the evil produced by the remittance of the surplus revenue becomes intolerable, because the means of making it have been taken away. The capital of these States is fettered by the necessary curtailments of their banks, their currency is diminished, and that state of things which is called a scarcity of money, is produced, exchange rises, and when the revenue is to be remitted, the means of doing it no longer exists."

As bank notes represent specie, such a relationship should be maintained between them, as to enable a given amount of specie to sustain as large a paper circulation as could be instantly converted into specie; but this can never be accomplished while specie must be provided at so many different places for the payment of the same note; the uncertainty of the places where the notes will be presented for payment, must at all times confound the most discreet calculation for the maintenance of a proper relation between the specie and paper circulation. To the Government, it can be of no advantage, as debts must be paid to the Government where due, and its funds, the bank is obliged to transfer from place to place, at the pleasure of Government.

In the opinion of the Secretary of the Treasury, in his report to the second session of the 16th Congress, the alteration would be beneficial to the community. It is as follows:

66

Preliminary to a resort to internal taxation of any kind, the charter of the Bank of the United States ought to be amended, so as to make the bills of all the offices of the bank, except that at the seat of Government, receivable only in the States where they are made payable, and in the States and territories where no office is established. The effect of this modification would be, to make the notes of the offices of the Bank of the United States, except the office in this district, a local currency, which will enter and continue in the local circulation of the States in which they are issued. The notes, thus issued, will render the local circulation of the States sound, and furnish to the citizens the means of discharging their contributions to the Government.

"This measure will also place the State institutions, to the south and west of this city, in a more eligible situation, in relation to the offices of the Bank of the United States, by enabling them to adjust their accounts with these offices by the exchange of notes, instead of liquidating their balances by the payment of specie.'

To the portions of the country where the balance of trade is generally unfavorable, it must be injurious, as it deprives them of every benefit which the sound currency of the Bank of the United States is capable of affording to them; the bank, in such places, for its own defence, being obliged entirely to suspend the issuing of notes.

To the portions of the country where the exchange is at intervals unfavorable, it is injurious, because it occasions an unprofitable and distressing fluctuation in the paper circulation of the place: for, in proportion to the disappearance of branch notes, must inevitably follow curtailments, not only of the branch, but of the local banks. The Southern banks sensibly feel the effects of this vacillating and disordered state of things; and their memorial conin the following remarks on the subject: That they are perfectly satisfied,

if the notes of each office of the Bank of the United States were made receivable only at such office, and thereby confined in their circulation to the State in which they were issued, and to those parts of the adjacent States more immediately connected with it in commerce, that very great benefits would result to the different banking institutions in particular, and to the community in general.

"The offices would then issue their notes on precisely the same principles, and in the same proportions, as the State banks; and their business would be conducted, according to their several capitals, on terms of perfect reciprocity; the rates of exchange would then become more uniform and moderate, by an increase of competitors in regular exchange operations. The different moneyed institutions, and the community, would be relieved from the exactions which they occasionally feel, and of which they are always apprehensive. Good will would exist towards an institution, very capable of even now affording great advantages to the Government; and harmony would be restored between it and every part of the community."

The regulation, as it now exists, operates as a practical prohibition to issue any notes in the Western States, and to a like prohibition to issue them to the South, during six months in the year; while the collection of the revenue, and the convenience of the People, in these quarters of the Union, require them to be issued continually.

To simplify the case, let any given district be selected, where there is no sound currency, and where no notes of the Bank of the United States can, at present, be issued, for the reasons already given.

If the notes, when issued, could only be receivable at the office issuing them, their circulation would be limited. The office, for its own benefit, must do business; the notes of solvent individuals would be discounted, and a sound paper would be put in circulation, which could not leave the boundary which practice would prescribe for it. The holders of branch notes could demand silver whenever wanted for transportation, and the expense of this transfer, as in the ordinary cases of trade, would soon bring business to a safe and proper level; and some sound standard among the local banks would follow as a necessary consequence.

The same reasoning would, in part, apply to places where exchanges fluctuate. At present the branch notes are often unnaturally taken from the places at which they are wanted, and carried to places where they are not wanted.

If the desired arrangement was effected, the bank would be enabled to put into circulation a much larger quantity of sound paper than at present; by which the bank, and the Government, being the owner of one-fifth of the stock, would be greatly benefitted; and, from its operation, it is believed that the community at large would enjoy real advantages.

What substantial reason can be given for an adherence to this provision of the law?

In what manner does it produce any public good?
Its operation on exchange is ineffectual.

In reference to any two given places, when the balance of trade is against the one, gold and silver there, will be of less value than at the other, by the expense of transportation; and the exchange will always be about equal to this expense. The nature of trade will keep this balance alternating, and it may be, generally, against one place in a certain direction, while, at the same time, it is in its favor in another direction; but the design of making paper circulation for the purpose of exchange better than the specie it represents, appears to be in a great degree fallacious. The bank can never equalize exchange; the expense of exchange must be borne by the debtors, in the debtor part of the country, and every attempt to give a different direction to it, will be baffled. It is alien to the inflexible laws of trade, and cannot be realized.

Indeed, if the branch notes can be drawn directly from the office, they will, of course, be free of the usual expense of exchange; but this rarely happens; the real debtor who uses them as exchange, has generally to pay to the money

dealers a premium higher than a just premium on exchange in its accustomed form.

The Southern institutions, and the most respectable citizens in Charleston, who are materially interested, and who have witnessed the effect produced in practice, have informed us, in their memorial, that the business of exchange will be improved, and the exchange itself moderated.

There are exceptions, which, perhaps, it will be proper to make.

The notes of the parent bank may be receivable at any of the branches. The notes of the office at Washington might be receivable at the parent bank and the branches, and, for the convenience of travellers, the five dollar bills of the bank ought to be receivable every where, and all the notes of the bank and its branches may be received in the States and Territories where the bank has no establishment.

As it is no part of the charter, the law can be repealed at the pleasure of Congress; and, to guard it, in the most effectual manner, let the law, for the sake of an experiment, be limited to two years; it will then require a re-enactment, which cannot be procured, unless its utility shall have been proved by experience.

There are but few considerations that are more momentous than that which relates to the currency of the country; and it belongs to the Bank of the United States, as far as possible, to preserve its soundness. It is an institution that is entitled to a patient and calm hearing; its advantages to the country have been great, while its sufferings are but too well known. Errors, if any have been committed, it is hoped experience will correct; prejudices, if any existed, it is hoped have now subsided, and that reason alone will, in the end, prevail.

The following resolution is offered:

Resolved, That the Committee on the Bank of the United States be instructed to prepare and bring in a bill agreeable to the above report. No such bill, however, was brought in.

The same memorial was, on the 27th of January, 1823, presented in the SENATE, by Mr. Findley, and referred to the Committee on Finance, who were discharged from the consideration thereof. Nothing farther was done in that body during the session.

HOUSE OF REPRESENTATIVES, December, 1826.

On motion of Mr. McLANE,

Ordered, That the petition of the president, directors, and company, of the Bank of the United States, heretofore presented on the 28th of January, 1823, be referred to the Committee of Ways and Means.

No report appears to have been made by that committee.

DECEMBER 13th, 1827.

Mr. PHILIP P. BARBOUR submitted the following resolution:

"Resolved, That the Committee of Ways and Means be directed to report a bill for the sale of that portion of the stock of the Bank of the United States which is held by the Government of the United States, and the application of the proceeds thereof to the payment of the public debt."

On motion of Mr. GORHAM, said resolution was ordered to lie on the table. On the 20th of December, the said resolution was again considered in the House, and debated.

On the 21st December, after further debate, a motion was made by Mr. RANDOLPH, that the resolution do lie on the table; which was decided in the negative: Yeas 79, Nays 107.

The said resolution was thereupon disagreed to by the House: Yeas 9, Nays 174.

22d CONGRESS, 2

1st Session. S

Application for the renewal of the Charter of 1816.

Soon after the meeting of the present Congress, memorials were presented by the bank to both Houses, praying a renewal of their charter. These were referred-in the Senate, to a Select Committee; in the House, to the Committee of Ways and Means. This latter committee, on the 9th of February, 1832, made a report favorable to the application, and accompanied it by "A bill to renew and modify the charter of the Bank of the United States. The provisions of this bill are, briefly, as follows:

SEC. 1. That the charter be continued in force for the period of twenty years from the 3d day of March, 1836, with a power reserved to Congress to repeal it at any time after ten years, upon giving three years' notice to the bank.

SEC. 2. That the President of the United States have power to appoint one of the directors of each branch of the bank, as he now does a portion of those of the principal bank.

SEC. 3. That any of the officers of the mother bank who may be designated by the Secretary of the Treasury, shall have power to sign and countersign the notes and bills.

SEC. 4. That the bank be prohibited from issuing any notes except such as are payable at the office from which they are issued; and also, from drawing checks or drafts of twenty dollars or any less amount.

SEC. 5. A list to be furnished annually to each State, of the stockholders residing therein, with the amount of their stock; and the States to have the power of taxing it as they do that of their own banks.

SEC. 6. The bank to pay to the United States interest at the rate of per cent. upon Government deposites.

SEC. 7. Bank not to establish any additional branch thereof without the consent of Congress.

Upon this bill no action has yet taken place.

THE END.

INDEX.

Page.

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Alston, Willis, of N. C., his speech against renewal of charter in 1811,
Ames, Mr., of Mass., his speech in favor of bill of 1791,

Amendments-Mr. Swoope's to bill to renew charter, moved 20th April, 1810,

Anderson, Joseph, of Tenn., in Senate, moves to strike out the first section of
bill to renew the charter,

Ayes and Noes-In Senate, on bill of 1791,

190

45

134

134

526-529

302

36

In the House, on same,

85

In the House, on the postponement of the bill to renew charter in 1811,
In Senate, on the motion to strike out the first section of bill renewing
the old charter,

274

446

On the resolution declaring that it is expedient to establish a national
bank, with branches, in 1814,

486

On engrossing Mr. Fisk's bill, 28th November, 1814,

On section requiring bank to lend to Government,

In Senate, 5th December, 1814, on motion to reduce capital,

On Mr. King's bill, in Senate, 9th December, 1814,

On the third reading, in House, of Mr. King's bill,

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In House, on passage of Mr. K's bill,

On reducing capital from fifty to thirty millions,

On the passage of the bill, 7th January, 1815, in the House,

In Senate, on suspension of specie payments,

In Senate, on bill, after President's veto,

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In Senate, on passage of bill, 3d April, 1816,

In House, on indefinite postponement of the bill,

Bank of North America: Proceedings on the institution of,

Ordinance of incorporation of,

Utility of said bank,

Bank of the United States: Plan of, submitted by Hamilton,

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Bill passed the Senate,

First reading of the bill in the House,

Resolution calling for names of stockholders of,

In 1811, apply for a temporary continuation of their powers-their pray-
er denied,

Barbour, Mr., of Va., reports to Senate a bill to incorporate a bank, &c.

Speech on Mr. Mason's motion respecting specie,

Barry, W. T., of Ken., his speech against renewal of the charter, in 1811,
Bibb, Mr., of Geo., remarks on payments of specie on each share of stock,
Bill to incorporate subscribers to the old bank, (see Bank of U. S.)

Presented to, and signed by, the President,

In extenso, reported 2d April, 1810, to establish a bank,

To continue in force the act of Feb. 1791, introduced by Mr. Taylor,
Bill to renew charter of 1791, introduced into the House by Mr. Burwell,

postponed indefinitely,

In Senate, reported by Mr. Crawford, 1811,
Rejected,

To repeal the tenth section of the old charter,
Reported, to establish a bank in Washington,
[This bill was not acted on.]

570

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