Continuation #2 of the veto message
July 10, 1832
But this proposition, although made by men whose aggregate wealth is
believed to be equal to all the private stock in the existing bank, has been
set aside, and the bounty of our Government is proposed to be again bestowed
on the few who have been fortunate enough to secure the stock and at this
moment wield the power of the existing institution.
I can not perceive the
justice or policy of this course. If our Government must sell monopolies, it
would seem its duty to take nothing less than their full value, and if
gratuities must be made once in fifteen or twenty years let them not be
bestowed on the subjects of a foreign Government, nor upon a designated and
favored class of men in our country. It is but justice and good policy, as
far as the nature of the case will admit, to confine our favors to our own
fellow citizens, and let each in his own term enjoy an opportunity to profit
by our bounty. In the bearings of the act before me upon these points I find
ample reasons why it should not become law.
It has been urged as an argument in favor of rechartering the present bank
that the calling in its loans will produce great embarrassment and distress.
The time allowed to close its concerns is ample, and if it has been well
managed its pressures will be light, and heavy only its management has been
bad, if thertefor, it shall produce distress, the fault will be its own and
it would furnish a reason against renewing a power which has been so
obviously abused.
But will there ever be a time when this reason will be
less powerful?
To acknowledge its force is to admit that the bank ought to
be perpetual, and as a consequence the present stockholders and those
inheriting their rights as successors to established a privileged order,
clothed both with great political power and enjoying immense pecuniary
advantages from their connection with the Government.
The modifications of the existing charter proposed by this act are not such,
in my view, as make it consistent with the rights of the States or the
liberties of the people. The qualification of the right of the bank to hold
real estate, the limitation of its power to estblish branches, and the power
reserved to Congress
to forbid the circulation of small notes are restrictions comparatively of
little value or importance. All the objectionable principles of the existing
corporation, and most of its odious feature, are retained without alleviation.
The fourth section provides " that the notes or bills of the said
corporation, although the same be, on the faces thereof, respectively made
payable at one place only, shall nevertheless be received by said
corporation at the bank or at any of the offices of discount and deposit
thereof if tendered in liquidation or payment of any balance or balances due
to said corporation or to such office of discount and deposit from any other
incorporated bank."
This provision secures to the State banks a legal
privilege in the bank of the United States which is withheld from all
private citizens. If a State bank in Philadelphia owe the bamk of the United
States and have notes issued by the St.Louis branch it can pay the debt with
those notes, but if a merchant, mechanic, or other private citizen be in
like circumstances he can not by law pay his debt with those notes, but must
sell them at a discount or send them to St.Louis to be cashed.
This boon
conceeded to the State banks, though not unjust in itself, is most odious
because it does not measure out equal justice to the high and the low, the
rich and the poor.
To the extent of its practical effect it is a bond of
union among the banking establishments of the Nation, erecting them into an
interest separate from that of the people, and its necessary tendency is to
unite the bank of the United States and the State banks in any measure which
may be thought conducive to their common interest.
The ninth section of the act recognizes principles of worse tendency thamn
any other provision of the present charter.
It enacts that " the cashier of the bank shall annualy report to the
secretary of the treasury the names of all stock holders who are not
residents citizens of the the United States, and on application of the
treasurer of any State shall make out and transmit to such treasurer a list
of stockholders residing in or are citizens of such State,with the amount of
stock owned by each."
Although this provision, taken in connection with a
decision of the supreme court, surrenders by its silence, the right of the
State to tax the banking institution created by this corporation under the
name of branches throughout the union, it is evidently intended to be
construed as a concession of their right to tax that portion of the stock,
which may be held by their citizens and residents.
In this light, if the act
becomes law, it will be understood by the States, who will probably proceed
to levy a tax equal to that paid on the stock of banks incorporated by
themselves.In some States that tax is now 1%, either on the capital or on
the shares, and that may be assumed as the amount which all citizens or
resident stockholders would be taxed under the operation of this act.
As it
is only the stock held in the States and not that employed within them which
would be subject to taxation, and as the names of foreign stockholders are
not to be reported to the treasurer of the United States, it is obvious that
the stocks held by them will be exempt from this burden. Their annual
profits will therefor be 1 per cent more than the citizen stockholders and
as the annual dividends of the bank may be safely estimated at 7 per cent,
the stock will be worth 10 or 15 per cent more to foreigners than to
citizens of the United States.
To appreciate the effects which this state of
things will produce, we must take brief review of the operations and present
condition of the bank of the United States.