Veto Message
Washington, July 10,1832
To the senate:
The bill " to modify and continue " the act, entitled, "an act to incorporate
the subscribers, to the bank of the United States, "was presented to me on
4th July, instant.
Having considered it, with solemn regard, to the principles
of the Constitution, which the day was calculated to inspire, and come to the
conclusion that it not to become a law, I herewith return it to the senate,
in which it originated, with my objections.
A bank of the United States is, in many respects, convenient for the
Government and useful to the people. Entertaining this opinion, and deeply
impressed, with the belief that some of the powers and privileges possessed,
by the existing bank, are unauthorized by the Constitution, subversive to the
rights of the States, and dangerous to the liberties of the people, I felt
it my duty, at an early period of my administration, to call the attention of
congress, to the practicability, of organizing an institution, combining all
its advantages, and obviating these objections. I, sincerely, regret, that in
the act before me, I can perceive none of those modifications, of the bank
charter which are necessary, in my opinion, to make it compatible with
justice, with sound policy, or with the constitution of our country.
The present corporate body, denominated the president, directors, and
company of the bank of the United States, will have existed, at the time, this
act is intended to take effect, twenty years. It enjoys an exclusive
privilege of banking, under authority of the general Government, a monopoly
of its favor and support, and, as a necessary consequence, almost, a monopoly
of the of the foreign and domestic exchange. The powers, privileges, and
favors bestowed upon it, in the original charter, by increasing the value of
the stock, far above its par value, operated a gratuity of many millions, to
the stockholders.
An apology may be found, for the failure to guard against this result, in the
consideration that the effect of the original act of incorporation could not
be certainly forseen, at the time of its passage. The act, before me, proposes
another gratuity, to the holders of the same stock, and, in many cases, the
same men, of at least, seven millions more. This donation finds no apology
in any uncertainty, as to the effect of the act. On all hands, it is conceded
that its passage will increase, at least, twenty or thirty per cent more, the
market price of the stock, subject to the payment of the annuity, of $200,000,
per year, secured by the act, thus, adding, in a moment, one fourth to its par
value.
It is not our own citizens, only, who are to receive the bounty of our
Government. More than eight
millions of the stock of this bank are held by foreigners, by this act the
American Republic proposes virtually to make them, a present of some
millions of dollars. For these gratuities to foreigners and some of our own
opulent citizenz the act secures no equivalent whatever. They are the
certain gains the present stockholders under the operation of this act,
after making full allowance for the paymemnt of the bonus.
Every monopoly and all exclusive privileges are granted at the expense of
the public, which ought to receive a fair equivalent. The many millions
which this act proposes to bestow on the stockholders of the existing bank
must come directly or indirectly out of the earning of the American people.
It is due to them, therefor , if their Government sell monopolies and
exclusive privileges, that they should at least exact for them as they are
worth in the open market. The value of the monopoly in this case may be
correctly ascertained. The twenty eight millions of stock would probably be
at the advance of 50 per cent, and command in market at least $42,000,000,
subject to the payment of the present bonus. The present value of the
monopoly, thjerefor, is $17,000,000, and this the act proposes to sell for
three millions, payable in fifteen annual installments of $200,000 each.
It is not conceivable how the present stockholders can have any claim to the
special favor of the Government. The present corporation has enjoyed its
monopoly during the period stipulated in the original contract. If We must
have such a corporation, why should not the Government sell out the whole
stock and thus secure to the people the full market value of the privileges
granted?
Why should not Congress create and sell twenty eight millions of stock,
incorporating the purchasers with all the powers and privileges secure in
this act and putting the premium upon the sales into the treasury?
But this act does not permit competition in the purchase of this monopoly.
It seems to be predicated on the erroneous idea that the present
stockholders have a prescriptive right not only to the favor but to the
bounty of the Government.
It appears that more than a fourth part of the stock is held by foreigners
and the residue is held by a few hundred of our own citizens, chiefly of the
richest class.
For their benefit does this act exclude the whole American
people frlom competition in the purchase of this monopoly and dispose of it
for many millions less than its worth. This seems the less excusable because
some of our citizens
not now stockholders petitioned that the door of competition might be
opened, and offered to take a charter on terms much more favorable to the
Governmemnt and Country.
This includes two pages of the Veto message. It is easy to see that
Politicians and bankers suffer from the same malady and there is no change
as of this date.