Page:The American Cyclopædia (1879) Volume II.djvu/300

 280 BANK sum to be applied to the purposes for which the said moneys shall have been procured; reimbursable in 10 years in equal annual in- stalments, or at any time sooner, or in any greater proportions that the government may think fit. 12. That no other bank shall be established by any future law of the United States during the continuance of the corpora- tion hereby created, for which the faith of the United States is hereby pledged." The bank was established in Philadelphia, with branches at different points. The dividends of the bank averaged from 8 to 10 per cent, per annum, being much below those of the bank of North America in previous years; which, in the words of a distinguished writer, now " grad- ually declined as other banks sprang into ex- istence." In 1808, three years prior to the ex- piration of the charter, application was made to congress for a renewal of the charter, and Mr. Gallatin, the then able head of the treasury de- partment, in obedience to a resolution of the senate, reported to congress upon the memorial. Mr. Gallatin proposed some changes in the new act of incorporation, and highly recommended the reincorporation of the bank, for which he gave his reasons in a clear and conclusive man- ner. Nothing, however, was done. From time to time the matter was brought to the atten- tion of congress, until Feb. 5, 1811, when a bill was brought forward, but was on Feb. 20 de- feated by the casting vote of Vice President Clinton. The bank was now obliged to wind up its affairs, which was done without at all con- vulsing the country. Within about 18 months the stockholders had received 88 per cent, on their stock. On finally closing its business, the assets yielded to the stockholders a premium over the par value of 8$ per cent. An appli- cation had previously been unsuccessfully made to the legislature of Pennsylvania for the re- charter of this institution, with a capital of $5,000,000. Second Bank of the United States. During the war of 1812-'15 the government, which was embarrassed for the want of means, had received important aid from the banks. By this means the banks, with the exception of those in New England, were, in August and September, 1814, driven to a suspension of spe- cie payments. The finances of the government were now in a terrible condition, when, on Oct. 6, Alexander J. Dallas was called to the head of the treasury department. Never before had there been greater need of a master mind in that important office. "Within less than a fort- night the new secretary communicated to con- gress a report of extraordinary ability, in which he strongly recommended the establishment of a national bank, as the remedy required again to bring the finances into order. Various plans for a bank were brought forward in congress, which resulted in nothing, until, on Jan. 20, 1815, a bill was passed. This bill was vetoed by President Madison, on the ground that it would not accomplish the objects rendered necessary by the state of the revenue and the condition of the country. On April 3, 1816, however, a bill for a bank of the United States, which had previously passed the house of rep- resentatives, was adopted by the senate, and, receiving the signature of the president, became a law. The corporate title of this institution was " The President, Directors, and Company of the Bank of the United States." Its capital was to be $35,000,000, composed of 350,000 shares of $100 each ; $7,000,000 of the stock was to be subscribed by the United States, and the remaining $28,000,000 by individuals, companies, or corporations. The charter was to extend to March, 3, 1836, and the bank was authorized to organize and commence busi- ness so soon as $8,400,000, exclusive of the subscription of the United States, was paid in. It was prohibited from lending on account of the United States more than $500,000, or to any state more than $50,000, or to any foreign prince or power any sum whatever, without the sanction of law previously being obtained. The bank went into operation Jan. 7, 1817, and through its agency the other banks throughout the country were enabled and induced to re- sume specie payments. An unsuccessful effort was made in 1818 to repeal the charter, on the ground of alleged mismanagement. President Jackson in his message of December, 1829, in- timated that " constitutional difficulties " might interfere to prevent its recharter, and expressed the desire that congress might take the matter into early consideration. Committees of both houses reported favorably to a recharter, but no application was made by the hank until the session of 1881-'2. On July 4, 1832, a bill re- chartering the bank was sent to the president, who on the 10th of the same month returned it with a message stating his objections to it. An effort now being made to pass the bill over the veto of the president, but without success, the bank on March 3, 1836, ceased to act under the charter granted by the United States, but was in the same year rechartered by the state of Pennsylvania, with the same capital. On Oct. 9, 1839, the United States bank suspended specie payments for a second time, having pre- viously suspended in 1837, a measure which was adopted immediately by all the hanks throughout the state of Pennsylvania, and even- tually, with comparatively limited exceptions, throughout the country. On Jan. 15, 1840, in compliance with an act of the legislature, it resumed specie payments to suspend finally on Feb. 4. On winding up its affairs, after pay- ment of its debts, there remained nothing to its stockholders, the entire capital having been sunk. State BanTcs. Prior to the passage of the act "to provide a national currency," &c., by congress, in 1864, the charter of all banks of issue and deposit was by the several states. No fewer than 1,400 of these state institutions existed in 1856-'7. In the New England states at that date there were 507 banks and branches, with a capital of $114,611,752. An important feature in New England banking at that tune