JACKSON'S VETO OF THE RECHARTER OF THE

BANK OF THE UNITED STATES, 1832

His views on the constitutionality and expediency of the law creating the Bank of the United States and the expectation that an attempt would be made to secure a renewal of the bank's charter, which would expire in 1836, led Jackson to throw the question into the Congress, which he did in his first annual message on December 8, 1829, his second on December 7, 1830, and his third on December 6, 1831. A renewal of the charter was sought by a bill in Congress on January 9, 1832, and, after being amended in each House, was passed, sent to the President for approval, and vetoed by him on July 10th. Extracts from text in "Senate Document" No. 180, Twenty-second Congress, First Session (1831-32), Serial No. 214, and "House Executive Document" No. 300, Twenty. second Congress, First Session (1831-32), Seria! No. 221. (See page 52.)

A Bank of the United States is, in many respects, convenient for the Government, and useful to the people. Entertaining this opinion, and deeply impressed with the belief that some of the powers and privileges possessed by the existing bank are unauthorized by the constitution, subversive of the rights of the States, and dangerous to the liberties of the people, I felt it my duty, at an early period of my administration, to call the attention of Congress to the practicability of or

ganizing an institution combining all its advantages, and obviating these objections. I sincerely regret, that, in the act before me, I can perceive none of those modifications of the bank charter which are necessary, in my opinion, to make it compatible with justice, with sound policy, or with the constitution of our country. . . .

Every monopoly, and all exclusive privileges, are granted at the expense of the public, which ought to receive a fair equivalent. The many millions which this act proposes to bestow on the stockholders of the existing bank, must come directly or indirectly out of the earnings of the American people. It is due to them, therefore, if their Government sell monopolies and exclusive privileges, that they should at least exact for them as much as they are worth in open market. The value of the monopoly in this case may be correctly ascertained. The twenty-eight millions of stock would probably be at an advance of fifty per cent., and command in market at least forty-two millions of dollars, subject to the payment of the present bonus. The present value of the monopoly, therefore, is seventeen millions of dollars, and this the act proposes to sell for three millions, payable in fifteen annual instalments of $200,000 each.

It is not conceivable how the present stockholders can have any claim to the special favor of the Government. The present corporation has enjoyed its monopoly during the period stipulated in the original contract. If we must have such a corporation, why should not the Government sell out the whole stock, and thus secure to the people the full market value of the privileges granted? Why should not Congress create and sell twenty-eight millions of stock, incorporating the purchasers with all the powers and privileges secured in this act, and putting the premium upon the sales into the Treasury? . .

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 pressure will be light, and heavy only in case its management has been bad. If, therefore, 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 wil! 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, be established a privileged order, cloched 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 establish 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 features, are retained without alleviation. . . .

Is there no danger to our liberty and independence in a bank, that, in its nature, has so little to bind it to our country? The President of the bank has told us that most of the State banks exist by its forbearance. Should its influence become concentered, as it may under the operation of such an act as this, in the hands of a self-elected directory, whose interests are identified with those of the foreign stockholders, will there not be cause to tremble for the purity of our elections in peace, and