or beyond a fixed amount to the United States, was a measure of policy to prevent injurious combinations; and to serve as a barrier to Executive encroachments.

The limitation of the rate of interest had reference to the existing rates in different parts of the United States, and to its tendency to lower those rates; the only doubt entertained was, whether five per cent. ought not to have been the rate, had it been supposed to offer a sufficient inducement to subscribers.

The chief design of the authority to the President of the United States, to subscribe to the stock, was to enlarge the specie fund of the Bank; and thus, enable it to give a more early extension to its operations; while the disbursement of what was borrowed was to be progressive, and in the form of notes, instead of coin; the annual reimbursement of such loans, operating finally, as an actual investment of so much specie. The positive profit in the excess of the dividends beyond the interest paid for the sum subscribed, though a small, was an auxiliary induce

ment.

CHAPTER LXIV.

MANY and frequent as have been the discussions on the subject of Incorporated Banks, it would be vain to seek any valuable views, not embraced in this Report. Not only have all its arguments been fully sustained, but Hamilton's plan of the institution has been pronounced "perfect." If this commendation be too strong; it may with confidence be asserted, that the innovations on it in the bank subsequently chartered, have not brought into question the wisdom of the first organization.

By a comparison of the draft of the bill in the handwriting of the Secretary of the Treasury, with that which was enacted, it appears that, with the exceptions—that the name was in blank, leaving it open, whether the "Bank of North America" should be incorporated as a National Bank; and of a clause in the third section, by which the charter was to continue "until the final redemption of that part of the stock which shall consist of the Public debt," no other amendments were made than those contained in the eighth and ninth sections. *

The eighth section prohibited the bank from trafficking in goods, wares, or merchandize, contrary to the provisions of its charter, under pain of forfeiture. The ninth imposed a similar forfeiture, if the bank should loan to the United States more than one million of dollars; to any of the States more than fifty thousand dollars; or to any Foreign State, any sum, unless authorized by law.

This draft was reported by Caleb Strong, in behalf of the Committee of the Senate, on the third of January; and having been considered during the succeeding days, a motion was made on the thirteenth, to limit the term of incorporation to a period of seven years. On the same day, to impair the influence of the Secretary of the Treasury, Resolutions and a Memorial of Virginia were presented in the Senate, by Monroe, a recently elected Senator from that State, condemning the Act making a provision for the Public debt. They made no impression.

The motion to limit the term of the existence of the National Bank to seven years, was followed by a proposition to extend the charter until the fourth of March, eighteen hundred and fifteen. It passed by a vote of

eleven to ten.

The next day, a proposal to insert a proviso, that the charter might be amended on giving twelve months notice, from and after the first of January, eighteen hundred was negatived; and it was agreed, to limit the term of incorporation to the fourth of March, eighteen hundred and eleven. On the nineteenth of January, it was proposed to expunge the section, pledging the faith of the United States, that no other bank should be incorporated during the term of its present charter, which was rejected by a vote of eighteen to five.* An attempt to limit the charter to the year eighteen hundred and one, was made the next day, but was defeated by a vote of sixteen to six, and a renewed motion to expunge the clause, securing an exclusive charter to the bank, met with a similar fate.

The opponents to the bill, having failed on these two

* Butler and Izard, South Carolina; Few, Georgia; Hawkins, North Carolina; Mouroe, Virginia.

The Senators from South Carolina and Georgia; Hawkins of North Carolina, and Monroe of Virginia.

points, the bearings of which will be hereafter seen, it passed the Senate, on the twentieth of January, there being no reason to believe that the question of its constitutionality was raised in that body.

The bill was read in the House on the twenty-first of January; and on the thirty-first, it was proposed to consider it, which was objected to, on the ground, that the mili tia bill ought to have precedence. The Bank bill was then read, in paragraphs; and, no amendments being offered, was reported to the House, which voted that it be read the third time, the next day.

The engrossed bill being then read, upon the question whether the bill should pass, a motion was made by Smith, of South Carolina, to recommit it for the purpose of obviating several objectionable parts, among which, he indicated the clause which omitted to require bonds for their fidelity from the persons authorized to receive subscriptions; that, which excluded foreigners from voting by proxy; and the too limited time, within which, the subscriptions were to be received. Madison appealed to the candor of the House to recommit the bill-in which Stone and Giles united, declaring their opinion that the measure was unconstitutional. Lawrence denied the allegation that the bill was precipitated, stating, that it had been laying in the hands of the members; that all the usual forms had been passed through, and, that not a single objection had been raised. In these views, Gerry, Boudinot, and Ames concurred, observing, that a recommitment might issue in a defeat of the bill for the session-the latter insisting on the absurdity of going into a committee to discuss the constitutionality of a bill, which, if unconstitutional, should be rejected at once. The motion for a recommitment being lost, Madison, on the final question,

made an elaborate speech, reviewing the advantages and disadvantages of banks.

He said, if banks were useful, "the most important of the advantages would be better obtained by the distribution of several banks, than by a single one; as giving greater aids to commerce, and greater facilities to Gov

ernment.

"The plan did not make so good a bargain for the public, as was due to its interests. The charter of the Bank of England had been for a term of eleven years only; and was paid for by an advantageous loan to the Government. Every renewal had, in like manner, been purchased-in some instances at a very high price.* The same had been done by the Banks of Genoa, Naples, and other banks of circulation. The plan was unequal to the public creditors, preferring the holders of a particular denomination of the debt, and those near the seat of Government; by which, if the subscription should be rapid, distant holders would be excluded."

These general objections were offered as a preface to the principal objection which he raised-a denial that "the power of establishing an incorporated bank had been vested by the Constitution in the Legislature of the United States,”-in confirmation of which position, he stated, "his recollection, that a power to grant charters of incorporation had been proposed in the General Convention, and rejected."

* The Bank of England, at its inception in 1694, was an incorporation of the subscribers to a loan, and was a condition of the loan. The first advance or loan by the Bank to the Government was in 1708, without interest, the charter being renewed, and almost exclusive control being given by Parliament over banking issues. At each subsequent renewal, loans, without interest, have been required in return for the prolongation of its exclusive privi

leges.