WASHINGTON, _August 16, 1841_.
_To the Senate of the United States_:
The bill entitled "An act to incorporate the subscribers to the Fiscal
Bank of the United States," which originated in the Senate, has been
considered by me with a sincere desire to conform my action in regard
to it to that of the two Houses of Congress. By the Constitution it
is made my duty either to approve the bill by signing it or to return
it with my objections to the House in which it originated. I can not
conscientiously give it my approval, and I proceed to discharge the duty
required of me by the Constitution--to give my reasons for disapproving.
The power of Congress to create a national bank to operate _per se_
over the Union has been a question of dispute from the origin of the
Government. Men most justly and deservedly esteemed for their high
intellectual endowments, their virtue, and their patriotism have in
regard to it entertained different and conflicting opinions; Congresses
have differed; the approval of one President has been followed by the
disapproval of another; the people at different times have acquiesced in
decisions both for and against. The country has been and still is deeply
agitated by this unsettled question. It will suffice for me to say that
my own opinion has been uniformly proclaimed to be against the exercise
of any such power by this Government. On all suitable occasions during
a period of twenty-five years the opinion thus entertained has been
unreservedly expressed. I declared it in the legislature of my native
State; in the House of Representatives of the United States it has been
openly vindicated by me; in the Senate Chamber, in the presence and
hearing of many who are at this time members of that body, it has been
affirmed and reaffirmed in speeches and reports there made and by votes
there recorded; in popular assemblies I have unhesitatingly announced
it, and the last public declaration which I made--and that but a short
time before the late Presidential election--I referred to my previously
expressed opinions as being those then entertained by me. With a full
knowledge of the opinions thus entertained and never concealed, I was
elected by the people Vice-President of the United States. By the
occurrence of a contingency provided for in the Constitution and arising
under an impressive dispensation of Providence I succeeded to the
Presidential office. Before entering upon the duties of that office
I took an oath that I would "preserve, protect, and defend the
Constitution of the United States." Entertaining the opinions alluded
to and having taken this oath, the Senate and the country will see that
I could not give my sanction to a measure of the character described
without surrendering all claim to the respect of honorable men, all
confidence on the part of the people, all self-respect, all regard for
moral and religious obligations, without an observance of which no
government can be prosperous and no people can be happy. It would be to
commit a crime which I would not willfully commit to gain any earthly
reward, and which would justly subject me to the ridicule and scorn of
all virtuous men.
I deem it entirely unnecessary at this time to enter upon the reasons
which have brought my mind to the convictions I feel and entertain on
this subject. They have been over and over again repeated. If some of
those who have preceded me in this high office have entertained and
avowed different opinions, I yield all confidence that their convictions
were sincere. I claim only to have the same measure meted out to myself.
Without going further into the argument, I will say that in looking to
the powers of this Government to collect, safely keep, and disburse the
public revenue, and incidentally to regulate the commerce and exchanges,
I have not been able to satisfy myself that the establishment by this
Government of a bank of discount in the ordinary acceptation of that
term was a necessary means or one demanded by propriety to execute those
powers. What can the local discounts of the bank have to do with the
collecting, safe-keeping, and disbursing of the revenue? So far as the
mere discounting of paper is concerned, it is quite immaterial to this
question whether the discount is obtained at a State bank or a United
States bank. They are both equally local, both beginning and both ending
in a local accommodation. What influence have local discounts granted by
any form of bank in the regulating of the currency and the exchanges?
Let the history of the late United States Bank aid us in answering this
inquiry.
For several years after the establishment of that institution it dealt
almost exclusively in local discounts, and during that period the
country was for the most part disappointed in the consequences
anticipated from its incorporation. A uniform currency was not provided,
exchanges were not regulated, and little or nothing was added to the
general circulation, and in 1820 its embarrassments had become so great
that the directors petitioned Congress to repeal that article of the
charter which made its notes receivable everywhere in payment of the
public dues. It had up to that period dealt to but a very small extent
in exchanges, either foreign or domestic, and as late as 1823 its
operations in that line amounted to a little more than $7,000,000 per
annum. A very rapid augmentation soon after occurred, and in 1833 its
dealings in the exchanges amounted to upward of $100,000,000, including
the sales of its own drafts; and all these immense transactions were
effected without the employment of extraordinary means. The currency of
the country became sound, and the negotiations in the exchanges were
carried on at the lowest possible rates. The circulation was increased
to more than $22,000,000 and the notes of the bank were regarded as
equal to specie all over the country, thus showing almost conclusively
that it was the capacity to deal in exchanges, and not in local
discounts, which furnished these facilities and advantages. It may be
remarked, too, that notwithstanding the immense transactions of the bank
in the purchase of exchange, the losses sustained were merely nominal,
while in the line of discounts the suspended debt was enormous and
proved most disastrous to the bank and the country. Its power of local
discount has in fact proved to be a fruitful source of favoritism and
corruption, alike destructive to the public morals and to the general
weal.
The capital invested in banks of discount in the United States, created
by the States, at this time exceeds $350,000,000, and if the discounting
of local paper could have produced any beneficial effects the United
States ought to possess the soundest currency in the world; but the
reverse is lamentably the fact.
Is the measure now under consideration of the objectionable character
to which I have alluded? It is clearly so unless by the sixteenth
fundamental article of the eleventh section it is made otherwise. That
article is in the following words:
The directors of the said corporation shall establish one competent
office of discount and deposit in any State in which two thousand shares
shall have been subscribed or may be held, whenever, upon application of
the legislature of such State, Congress may by law require the same. And
the said directors may also establish one or more competent offices of
discount and deposit in any Territory or District of the United States,
and in any State with the assent of such State, and when established the
said office or offices shall be only withdrawn or removed by the said
directors prior to the expiration of this charter with the previous
assent of Congress: _Provided_, In respect to any State which shall not,
at the first session of the legislature thereof held after the passage
of this act, by resolution or other usual legislative proceeding,
unconditionally assent or dissent to the establishment of such office
or offices within it, such assent of the said State shall be thereafter
presumed: _And provided, nevertheless_, That whenever it shall become
necessary and proper for carrying into execution any of the powers
granted by the Constitution to establish an office or offices in any of
the States whatever, and the establishment thereof shall be directed by
law, it shall be the duty of the said directors to establish such office
or offices accordingly.
It will be seen that by this clause the directors are invested with the
fullest power to establish a branch in any State which has yielded its
assent; and having once established such branch, it shall not afterwards
be withdrawn except by order of Congress. Such assent is to be _implied_
and to have the force and sanction of an actually expressed assent,
"provided, in respect to any State which shall not, at _the first
session_ of the legislature thereof held after the passage of this act,
by _resolution_ or _other usual legislative proceeding, unconditionally_
assent or dissent to the establishment of such office or offices within
it, such assent of said State shall be thereafter presumed." The assent
or dissent is to be expressed _unconditionally at the first session of
the legislature, by some formal legislative act;_ and if not so
expressed its assent is to be _implied_, and the directors are thereupon
invested with power, at such time thereafter as they may please, to
establish branches, which can not afterwards be withdrawn except by
resolve of Congress. No matter what may be the cause which may operate
with the legislature, which either prevents it from speaking or
addresses itself to its wisdom, to induce delay, its assent is to be
implied. This iron rule is to give way to no circumstances; it is
unbending and inflexible. It is the language of the master to the
vassal; an unconditional answer is claimed forthwith, and delay,
postponement, or incapacity to answer produces an implied assent which
is ever after irrevocable. Many of the State elections have already
taken place without any knowledge on the part of the people that such a
question was to come up. The representatives may desire a submission of
the question to their constituents preparatory to final action upon it,
but this high privilege is denied; whatever may be the motives and views
entertained by the representatives of the people to induce delay, their
assent is to be presumed, and is ever afterwards binding unless their
dissent shall be unconditionally expressed at their first session after
the passage of this bill into a law. They may by formal resolution
declare the question of assent or dissent to be undecided and postponed,
and yet, in opposition to their express declaration to the contrary,
their assent is to be implied. Cases innumerable might be cited to
manifest the irrationality of such an inference. Let one or two in
addition suffice. The popular branch of the legislature may express its
dissent by an unanimous vote, and its resolution may be defeated by
a tie vote of the senate, and yet the assent is to be implied. Both
branches of the legislature may concur in a resolution of decided
dissent, and yet the governor may exert the _veto_ power conferred on
him by the State constitution, and their legislative action be defeated,
and yet the assent of the legislative authority is implied, and the
directors of this contemplated institution are authorized to establish a
branch or branches in such State whenever they may find it conducive to
the interest of the stockholders to do so; and having once established
it they can under no circumstances withdraw it except by act of
Congress. The State may afterwards protest against such unjust
inference, but its authority is gone. Its assent is implied by its
failure or inability to act at its first session, and its voice can
never afterwards be heard. To inferences so violent and, as they seem to
me, irrational I can not yield my consent. No court of justice would
or could sanction them without reversing all that is established in
judicial proceeding by introducing presumptions at variance with fact
and inferences at the expense of reason. A State in a condition of
duress would be _presumed_ to speak as an individual manacled and in
prison might be presumed to be in the enjoyment of freedom. Far better
to say to the States boldly and frankly, Congress wills and submission
is demanded.
It may be said that the directors may not establish branches under such
circumstances; but this is a question of power, and this bill invests
them with full authority to do so. If the legislature of New York or
Pennsylvania or any other State should be found to be in such condition
as I have supposed, could there be any security furnished against such a
step on the part of the directors? Nay, is it not fairly to be presumed
that this proviso was introduced for the sole purpose of meeting the
contingency referred to? Why else should it have been introduced? And
I submit to the Senate whether it can be believed that any State would
be likely to sit quietly down under such a state of things. In a great
measure of public interest their patriotism may be successfully appealed
to, but to infer their assent from circumstances at war with such
inference I can not but regard as calculated to excite a feeling at
fatal enmity with the peace and harmony of the country. I must therefore
regard this clause as asserting the power to be in Congress to establish
offices of discount in a State not only without its assent, but against
its dissent, and so regarding it I can not sanction it. On general
principles the right in Congress to prescribe terms to any State implies
a superiority of power and control, deprives the transaction of all
pretense to compact between them, and terminates, as we have seen, in
the total abrogation of freedom of action on the part of the States.
But, further, the State may express, after the most solemn form of
legislation, its dissent, which may from time to time thereafter be
repeated in full view of its own interest, which can never be separated
from the wise and beneficent operation of this Government, and yet
Congress may by virtue of the last proviso overrule its law, and upon
grounds which to such State will appear to rest on a constructive
necessity and propriety and nothing more. I regard the bill as asserting
for Congress the right to incorporate a United States bank with power
and right to establish offices of discount and deposit in the several
States of this Union with or without their consent--a principle to which
I have always heretofore been opposed and which can never obtain my
sanction; and waiving all other considerations growing out of its other
provisions, I return it to the House in which it originated with these
my objections to its approval.