A Compilation of the Messages and Papers of the Presidents Volume 2, part 3: Andrew Jackson, 1st term online

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is it "_proper_" in relation to themselves and their successors. They
may _properly_ use the discretion vested in them, but they may not limit
the discretion of their successors. This restriction on themselves and
grant of a monopoly to the bank is therefore unconstitutional.

In another point of view this provision is a palpable attempt to amend
the Constitution by an act of legislation. The Constitution declares
that "the Congress shall have power to exercise exclusive legislation in
all cases whatsoever" over the District of Columbia. Its constitutional
power, therefore, to establish banks in the District of Columbia and
increase their capital at will is unlimited and uncontrollable by any
other power than that which gave authority to the Constitution. Yet this
act declares that Congress shall _not_ increase the capital of existing
banks, nor create other banks with capitals exceeding in the whole
$6,000,000. The Constitution declares that Congress _shall_ have power
to exercise exclusive legislation over this District "_in all cases
whatsoever_," and this act declares they shall not. Which is the supreme
law of the land? This provision can not be "_necessary_" or "_proper_"
or _constitutional_ unless the absurdity be admitted that whenever it be
"necessary and proper" in the opinion of Congress they have a right to
barter away one portion of the powers vested in them by the Constitution
as a means of executing the rest.

On two subjects only does the Constitution recognize in Congress the
power to grant exclusive privileges or monopolies. It declares that
"Congress shall have power to promote the progress of science and useful
arts by securing for limited times to authors and inventors the
exclusive right to their respective writings and discoveries." Out of
this express delegation of power have grown our laws of patents and
copyrights. As the Constitution expressly delegates to Congress the
power to grant exclusive privileges in these cases as the means of
executing the substantive power "to promote the progress of science and
useful arts," it is consistent with the fair rules of construction to
conclude that such a power was not intended to be granted as a means of
accomplishing any other end. On every other subject which comes within
the scope of Congressional power there is an ever-living discretion in
the use of proper means, which can not be restricted or abolished
without an amendment of the Constitution. Every act of Congress,
therefore, which attempts by grants of monopolies or sale of exclusive
privileges for a limited time, or a time without limit, to restrict or
extinguish its own discretion in the choice of means to execute its
delegated powers is equivalent to a legislative amendment of the
Constitution, and palpably unconstitutional.

This act authorizes and encourages transfers of its stock to foreigners
and grants them an exemption from all State and national taxation. So
far from being "_necessary and proper_" that the bank should possess
this power to make it a safe and efficient agent of the Government in
its fiscal operations, it is calculated to convert the Bank of the
United States into a foreign bank, to impoverish our people in time of
peace, to disseminate a foreign influence through every section of the
Republic, and in war to endanger our independence.

The several States reserved the power at the formation of the
Constitution to regulate and control titles and transfers of real
property, and most, if not all, of them have laws disqualifying aliens
from acquiring or holding lands within their limits. But this act, in
disregard of the undoubted right of the States to prescribe such
disqualifications, gives to aliens stockholders in this bank an interest
and title, as members of the corporation, to all the real property it
may acquire within any of the States of this Union. This privilege
granted to aliens is not "_necessary_" to enable the bank to perform its
public duties, nor in any sense "_proper_" because it is vitally
subversive of the rights of the States.

The Government of the United States have no constitutional power to
purchase lands within the States except "for the erection of forts,
magazines, arsenals, dockyards, and other needful buildings," and even
for these objects only "by the consent of the legislature of the State
in which the same shall be." By making themselves stockholders in the
bank and granting to the corporation the power to purchase lands for
other purposes they assume a power not granted in the Constitution and
grant to others what they do not themselves possess. It is not
_necessary_ to the receiving, safe-keeping, or transmission of the funds
of the Government that the bank should possess this power, and it is not
_proper_ that Congress should thus enlarge the powers delegated to them
in the Constitution.

The old Bank of the United States possessed a capital of only
$11,000,000, which was found fully sufficient to enable it with dispatch
and safety to perform all the functions required of it by the
Government. The capital of the present bank is $35,000,000 - at least
twenty-four more than experience has proved to be _necessary_ to enable
a bank to perform its public functions. The public debt which existed
during the period of the old bank and on the establishment of the new
has been nearly paid off, and our revenue will soon be reduced. This
increase of capital is therefore not for public but for private

The Government is the only "_proper_" judge where its agents should
reside and keep their offices, because it best knows where their
presence will be "_necessary_." It can not, therefore, be "_necessary_"
or "_proper_" to authorize the bank to locate branches where it pleases
to perform the public service, without consulting the Government, and
contrary to its will. The principle laid down by the Supreme Court
concedes that Congress can not establish a bank for purposes of private
speculation and gain, but only as a means of executing the delegated
powers of the General Government. By the same principle a branch bank
can not constitutionally be established for other than public purposes.
The power which this act gives to establish two branches in any State,
without the injunction or request of the Government and for other than
public purposes, is not "_necessary_" to the due _execution_ of the
powers delegated to Congress.

The bonus which is exacted from the bank is a confession upon the face
of the act that the powers granted by it are greater than are
"_necessary_" to its character of a fiscal agent. The Government does
not tax its officers and agents for the privilege of serving it. The
bonus of a million and a half required by the original charter and that
of three millions proposed by this act are not exacted for the privilege
of giving "the necessary facilities for transferring the public funds
from place to place within the United States or the Territories thereof,
and for distributing the same in payment of the public creditors without
charging commission or claiming allowance on account of the difference
of exchange," as required by the act of incorporation, but for something
more beneficial to the stockholders. The original act declares that it
(the bonus) is granted "in consideration of the exclusive privileges and
benefits conferred by this act upon the said bank," and the act before
me declares it to be "in consideration of the exclusive benefits and
privileges continued by this act to the said corporation for fifteen
years, as aforesaid." It is therefore for "exclusive privileges and
benefits" conferred for their own use and emolument, and not for the
advantage of the Government, that a bonus is exacted. These surplus
powers for which the bank is required to pay can not surely be
"_necessary_" to make it the fiscal agent of the Treasury. If they were,
the exaction of a bonus for them would not be "_proper_."

It is maintained by some that the bank is a means of executing the
constitutional power "to coin money and regulate the value thereof."
Congress have established a mint to coin money and passed laws to
regulate the value thereof. The money so coined, with its value so
regulated, and such foreign coins as Congress may adopt are the only
currency known to the Constitution. But if they have other power to
regulate the currency, it was conferred to be exercised by themselves,
and not to be transferred to a corporation. If the bank be established
for that purpose, with a charter unalterable without its consent,
Congress have parted with their power for a term of years, during which
the Constitution is a dead letter. It is neither necessary nor proper to
transfer its legislative power to such a bank, and therefore

By its silence, considered in connection with the decision of the
Supreme Court in the case of McCulloch against the State of Maryland,
this act takes from the States the power to tax a portion of the banking
business carried on within their limits, in subversion of one of the
strongest barriers which secured them against Federal encroachments.
Banking, like farming, manufacturing, or any other occupation or
profession, is _a business_, the right to follow which is not originally
derived from the laws. Every citizen and every company of citizens in
all of our States possessed the right until the State legislatures
deemed it good policy to prohibit private banking by law. If the
prohibitory State laws were now repealed, every citizen would again
possess the right. The State banks are a qualified restoration of the
right which has been taken away by the laws against banking, guarded by
such provisions and limitations as in the opinion of the State
legislatures the public interest requires. These corporations, unless
there be an exemption in their charter, are, like private bankers and
banking companies, subject to State taxation. The manner in which these
taxes shall be laid depends wholly on legislative discretion. It may be
upon the bank, upon the stock, upon the profits, or in any other mode
which the sovereign power shall will.

Upon the formation of the Constitution the States guarded their taxing
power with peculiar jealousy. They surrendered it only as it regards
imports and exports. In relation to every other object within their
jurisdiction, whether persons, property, business, or professions, it
was secured in as ample a manner as it was before possessed. All
persons, though United States officers, are liable to a poll tax by the
States within which they reside. The lands of the United States are
liable to the usual land tax, except in the new States, from whom
agreements that they will not tax unsold lands are exacted when they are
admitted into the Union. Horses, wagons, any beasts or vehicles, tools,
or property belonging to private citizens, though employed in the
service of the United States, are subject to State taxation. Every
private business, whether carried on by an officer of the General
Government or not, whether it be mixed with public concerns or not, even
if it be carried on by the Government of the United States itself,
separately or in partnership, falls within the scope of the taxing power
of the State. Nothing comes more fully within it than banks and the
business of banking, by whomsoever instituted and carried on. Over this
whole subject-matter it is just as absolute, unlimited, and
uncontrollable as if the Constitution had never been adopted, because in
the formation of that instrument it was reserved without qualification.

The principle is conceded that the States can not rightfully tax the
operations of the General Government. They can not tax the money of the
Government deposited in the State banks, nor the agency of those banks
in remitting it; but will any man maintain that their mere selection to
perform this public service for the General Government would exempt the
State banks and their ordinary business from State taxation? Had the
United States, instead of establishing a bank at Philadelphia, employed
a private banker to keep and transmit their funds, would it have
deprived Pennsylvania of the right to tax his bank and his usual banking
operations? It will not be pretended. Upon what principle, then, are the
banking establishments of the Bank of the United States and their usual
banking operations to be exempted from taxation? It is not their public
agency or the deposits of the Government which the States claim a right
to tax, but their banks and their banking powers, instituted and
exercised within State jurisdiction for their private emolument - those
powers and privileges for which they pay a bonus, and which the States
tax in their own banks. The exercise of these powers within a State, no
matter by whom or under what authority, whether by private citizens in
their original right, by corporate bodies created by the States, by
foreigners or the agents of foreign governments located within their
limits, forms a legitimate object of State taxation. From this and like
sources, from the persons, property, and business that are found
residing, located, or carried on under their jurisdiction, must the
States, since the surrender of their right to raise a revenue from
imports and exports, draw all the money necessary for the support of
their governments and the maintenance of their independence. There is no
more appropriate subject of taxation than banks, banking, and bank
stocks, and none to which the States ought more pertinaciously to cling.

It can not be _necessary_ to the character of the bank as a fiscal agent
of the Government that its private business should be exempted from that
taxation to which all the State banks are liable, nor can I conceive it
"_proper_" that the substantive and most essential powers reserved by
the States shall be thus attacked and annihilated as a means of
executing the powers delegated to the General Government. It may be
safely assumed that none of those sages who had an agency in forming or
adopting our Constitution ever imagined that any portion of the taxing
power of the States not prohibited to them nor delegated to Congress was
to be swept away and annihilated as a means of executing certain powers
delegated to Congress.

If our power over means is so absolute that the Supreme Court will not
call in question the constitutionality of an act of Congress the subject
of which "is not prohibited, and is really calculated to effect any of
the objects intrusted to the Government," although, as in the case
before me, it takes away powers expressly granted to Congress and rights
scrupulously reserved to the States, it becomes us to proceed in our
legislation with the utmost caution. Though not directly, our own powers
and the rights of the States may be indirectly legislated away in the
use of means to execute substantive powers. We may not enact that
Congress shall not have the power of exclusive legislation over the
District of Columbia, but we may pledge the faith of the United States
that as a means of executing other powers it shall not be exercised for
twenty years or forever. We may not pass an act prohibiting the States
to tax the banking business carried on within their limits, but we may,
as a means of executing our powers over other objects, place that
business in the hands of our agents and then declare it exempt from
State taxation in their hands. Thus may our own powers and the rights of
the States, which we can not directly curtail or invade, be frittered
away and extinguished in the use of means employed by us to execute
other powers. That a bank of the United States, competent to all the
duties which may be required by the Government, might be so organized as
not to infringe on our own delegated powers or the reserved rights of
the States I do not entertain a doubt. Had the Executive been called
upon to furnish the project of such an institution, the duty would have
been cheerfully performed. In the absence of such a call it was
obviously proper that he should confine himself to pointing out those
prominent features in the act; presented which in his opinion make it
incompatible with the Constitution and sound policy. A general
discussion will now take place, eliciting new light and settling
important principles; and a new Congress, elected in the midst of such
discussion, and furnishing an equal representation of the people
according to the last census, will bear to the Capitol the verdict of
public opinion, and, I doubt not, bring this important question to a
satisfactory result.

Under such circumstances the bank comes forward and asks a renewal of
its charter for a term of fifteen years upon conditions which not only
operate as a gratuity to the stockholders of many millions of dollars,
but will sanction any abuses and legalize any encroachments.

Suspicions are entertained and charges are made of gross abuse and
violation of its charter. An investigation unwillingly conceded and so
restricted in time as necessarily to make it incomplete and
unsatisfactory discloses enough to excite suspicion and alarm. In the
practices of the principal bank partially unveiled, in the absence of
important witnesses, and in numerous charges confidently made and as yet
wholly uninvestigated there was enough to induce a majority of the
committee of investigation - a committee which was selected from the most
able and honorable members of the House of Representatives - to recommend
a suspension of further action upon the bill and a prosecution of the
inquiry. As the charter had yet four years to run, and as a renewal now
was not necessary to the successful prosecution of its business, it was
to have been expected that the bank itself, conscious of its purity and
proud of its character, would have withdrawn its application for the
present, and demanded the severest scrutiny into all its transactions.
In their declining to do so there seems to be an additional reason why
the functionaries of the Government should proceed with less haste and
more caution in the renewal of their monopoly.

The bank is professedly established as an agent of the executive branch
of the Government, and its constitutionality is maintained on that
ground. Neither upon the propriety of present action nor upon the
provisions of this act was the Executive consulted. It has had no
opportunity to say that it neither needs nor wants an agent clothed with
such powers and favored by such exemptions. There is nothing in its
legitimate functions which makes it necessary or proper. Whatever
interest or influence, whether public or private, has given birth to
this act, it can not be found either in the wishes or necessities of the
executive department, by which present action is deemed premature, and
the powers conferred upon its agent not only unnecessary, but dangerous
to the Government and country.

It is to be regretted that the rich and powerful too often bend the acts
of government to their selfish purposes. Distinctions in society will
always exist under every just government. Equality of talents, of
education, or of wealth can not be produced by human institutions. In
the full enjoyment of the gifts of Heaven and the fruits of superior
industry, economy, and virtue, every man is equally entitled to
protection by law; but when the laws undertake to add to these natural
and just advantages artificial distinctions, to grant titles,
gratuities, and exclusive privileges, to make the rich richer and the
potent more powerful, the humble members of society - the farmers,
mechanics, and laborers - who have neither the time nor the means of
securing like favors to themselves, have a right to complain of the
injustice of their Government. There are no necessary evils in
government. Its evils exist only in its abuses. If it would confine
itself to equal protection, and, as Heaven does its rains, shower its
favors alike on the high and the low, the rich and the poor, it would be
an unqualified blessing. In the act before me there seems to be a wide
and unnecessary departure from these just principles.

Nor is our Government to be maintained or our Union preserved by
invasions of the rights and powers of the several States. In thus
attempting to make our General Government strong we make it weak. Its
true strength consists in leaving individuals and States as much as
possible to themselves - in making itself felt, not in its power, but in
its beneficence; not in its control, but in its protection; not in
binding the States more closely to the center, but leaving each to move
unobstructed in its proper orbit.

Experience should teach us wisdom. Most of the difficulties our
Government now encounters and most of the dangers which impend over our
Union have sprung from an abandonment of the legitimate objects of
Government by our national legislation, and the adoption of such
principles as are embodied in this act. Many of our rich men have not
been content with equal protection and equal benefits, but have besought
us to make them richer by act of Congress. By attempting to gratify
their desires we have in the results of our legislation arrayed section
against section, interest against interest, and man against man, in a
fearful commotion which threatens to shake the foundations of our Union.
It is time to pause in our career to review our principles, and if
possible revive that devoted patriotism and spirit of compromise which
distinguished the sages of the Revolution and the fathers of our Union.
If we can not at once, in justice to interests vested under improvident
legislation, make our Government what it ought to be, we can at least
take a stand against all new grants of monopolies and exclusive
privileges, against any prostitution of our Government to the
advancement of the few at the expense of the many, and in favor of
compromise and gradual reform in our code of laws and system of
political economy.

I have now done my duty to my country. If sustained by my fellow
citizens, I shall be grateful and happy; if not, I shall find in the
motives which impel me ample grounds for contentment and peace. In the
difficulties which surround us and the dangers which threaten our
institutions there is cause for neither dismay nor alarm. For relief and
deliverance let us firmly rely on that kind Providence which I am sure
watches with peculiar care over the destinies of our Republic, and on
the intelligence and wisdom of our countrymen. Through _His_ abundant
goodness and _their_ patriotic devotion our liberty and Union will be



_December 4, 1832_.
_Fellow-Citizens of the Senate and House of Representatives_:

It gives me pleasure to congratulate you upon your return to the seat of
Government for the purpose of discharging your duties to the people of
the United States. Although the pestilence which had traversed the Old
World has entered our limits and extended its ravages over much of our
land, it has pleased Almighty God to mitigate its severity and lessen
the number of its victims compared with those who have fallen in most
other countries over which it has spread its terrors. Notwithstanding
this visitation, our country presents on every side marks of prosperity
and happiness unequaled, perhaps, in any other portion of the world. If
we fully appreciate our comparative condition, existing causes of
discontent will appear unworthy of attention, and, with hearts of
thankfulness to that divine Being who has filled our cup of prosperity,
we shall feel our resolution strengthened to preserve and hand down to
posterity that liberty and that union which we have received from our
fathers, and which constitute the sources and the shield of all our

The relations of our country continue to present the same picture of
amicable intercourse that I had the satisfaction to hold up to your view
at the opening of your last session. The same friendly professions, the
same desire to participate in our flourishing commerce, the same
disposition to refrain from injuries unintentionally offered, are, with
few exceptions, evinced by all nations with whom we have any
intercourse. This desirable state of things may be mainly ascribed to
our undeviating practice of the rule which has long guided our national
policy, to require no exclusive privileges in commerce and to grant
none. It is daily producing its beneficial effect in the respect shown
to our flag, the protection of our citizens and their property abroad,
and in the increase of our navigation and the extension of our

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Online LibraryUnknownA Compilation of the Messages and Papers of the Presidents Volume 2, part 3: Andrew Jackson, 1st term → online text (page 18 of 26)