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SENATE.

Bank of the United States.

MARCH, 1809.

I have the honor to be, with the greatest respect, sir, your most obedient and most humble servant, JAMES MADISON.

the several acts for the establishment and regula- | twelve o'clock, in the Chamber of the House of Reption of the Treasury. War, and Navy Depart-resentatives. ments, and making appropriations for the support of the Military Establishment and the Navy of the United States for the year 1809;" and, on motion, by Mr. GILES, that the Senate insist on their said amendments disagreed to, it was determined in the affirmative-yeas 26, nays 2, as follows:

The Hon. JoHN MILLEDGE,

President pro tempore of the Senate.

BANK OF THE UNITED STATES. YEAS-Messrs. Anderson, Bayard, Bradley, Condit, The PRESIDENT also communicated the report Gaillard, Giles, Gilman, Hillhouse, Howland, Kitchel, of the Secretary of the Treasury on the memoLeib, Lloyd, Mathewson, Meigs, Milledge, Moore, Par-rial of the stockholders of the Bank of the Uniker, Pickering, Pope, Reed, Robinson, Smith of Mary-ted States, referred to him on the 26th of April ryland, Smith of New York, Smith of Tennessee, Tif- last; which was read, as follows:

fin, and White.

NAYS-Messrs. Crawford and White.

So it it was, Resolved, That they insist on their said amendments disagreed to by the House of Representatives..

A message from the House of Representatives informed the Senate that the House have passed a bill, entitled "An act to deprive, in certain cases, vessels of their American character, and to prevent, under certain disabilities, any citizen of the United States taking a license from any foreign Power to navigate the ocean, or to trade with any other foreign and independent Power;" in which they request the concurrence of the Senate. They do not concur in the bill, entitled "An act authorizing the sale and grant of a certain quantity of publie land to the Chesapeake and Delaware Canal Company."

The bill, entitled "An act to deprive, in certain cases, vessels of their American character, and to prevent, under certain disabilities, any citizen of the United States taking a license from any foreign Power to navigate the ocean, or to trade with any other foreign and independent Power." was read; and, on the question, Shall this bill be read the second time? it was determined in the affirmative.

On motion, by Mr. ANDERSON, that the bill be read a second time, it was objected to as contrary to rule.

Mr. TIFFIN, from the committee, reported the bill providing for the promulgation of certain laws in the Territory of Michigan correctly engrossed; and the bill was read the third time, and passed.

A message from the House of Representatives informed the Senate that the House have passed a bill, entitled "An act authorizing the augmentation of the Marine Corps," with an amendment, in which they request the concurrence of the Senate. The Senate proceeded to consider the said amendment. Whereupon,

Resolved, That they concur therein.

The PRESIDENT communicated to the Senate the following letter from the President elect of the United States:

CITY OF WASHINGTON, March 2, 1809. SIR: I beg leave, through you, to inform the honorable the Senate of the United States, that I propose to take the oath which the Constitution prescribes to the President of the United States, before he enters on the execution of his office, on Saturday the 4th instant, at

The Secretary of the Treasury, to whom was referred the memorial of the stockholders of the Bank of the United States, praying for a renewal of the charter which will expire on the 4th day of March, 1811, respectfully submits the following report:

The Bank of the United States was incorporated by the act of March 2, 1791, with a capital of ten mil lions of dollars, divided into twenty-five thousand shares, of four hundred dollars each. Two millions of dollars were subscribed by the United States, and paid in ten equal annual instalments. Of the eight millions of dollars subscribed by individuals, two millions were paid in specie, and six millions in six per cent. stock of the United States. Two thousand four hundred and ninety-three of the shares belonging to the Government were sold in the years 1796 and 1797, at an advance of twenty-five per cent.; two hundred and

eighty-seven were sold in the year 1797, at an advance

of twenty per cent.; and the other two thousand two advance of forty-five per cent.; making together, exhundred and twenty shares in the year 1802, at an clusively of the dividends, a profit of $671,860 to the United States. The greater part of the six per cent. stock originally paid by the stockholders has since been sold by the Bank; a portion has been redeemed by Government, by the operation of the annual reimbursement, and the Bank retains at present only a sum of $2,231,598 in six per cent. stock.

About eighteen thousand shares of the Bank stock are held by persons residing abroad, who are by the charter excluded from the right of voting. The stockholders resident within the United States, and who have the exclusive control over the institution, hold only seven thousand shares, or little more than onefourth part of its capital. They appoint annually twenty-five directors of the Bank itself, which is estabentire management of the discounts and other translished at Philadelphia, and those directors have the actions of the institution in that city, and the general superintendence and appointment of the directors and cashiers of the offices of discount and deposite established in other places. There are at present eight of those offices, viz: at Boston, New York, Baltimore, Norfolk, Charleston, Savannah, the City of Washington, and New Orleans. The last two were established at the request of the Secretary of the Treasury.

The profits of a Bank arise from the interest received on the loans made, either to Government or to individuals; and they exceed six per cent. or the rate of interest at which the loans are made, because every bank lends, not only the whole of its capital, but also a portion of the moneys deposited for safekeeping in its vaults, either by Government or by individuals. For every sum of money thus deposited, the party making the deposite, either receives the amount in

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bank notes, or obtains a credit on the books of the bank. In either case he has the same right at any time to withdraw his deposite; in the first case, on presentation and surrender of the bank notes; in the other case, by drawing on the bank for the amount. Bank notes, and credits on the books of the bank arise, therefore, equally from deposites, although the credits alone are, in common parlance, called deposites; and the aggregate of those credits, and of the bank notes issued, constitutes the circulating medium substituted by the banking operations to money; for payments from one individual to another are equally made by draughts on the bank, or by delivery of bank notes. Experience has taught the directors what portion of the money thus deposited they may lend, or in other words how far they may with safety extend their discounts beyond the capital of the bank, and what amount of specie it is necessary they should keep in their vaults. The profits, and therefore the dividends of a bank, will increase in proportion as the directors will increase loans of the moneys deposited, and suffer the amount of specic on hand to diminish. Moderate dividends, when not produced by some particular cause which checks the circulation of bank paper, are the best evidence of the safety of the institution, and of the wisdom of its direction.

The annexed table of all the dividends made by the Bank of the United States since its establishment, shows that they have on an average been at the rate of 8 (precisely) 8-13 (14) per cent. a year, and proves that the bank has not in any considerable degree used the public deposites for the purpose of extending its discounts.

From what has been premised, it appears that the property of a bank in full operation, consists of three general items, viz: 1st. Outstanding debts, consisting principally of the notes payable at sixty days, which have been discounted at the bank. 2dly. Specie in the vaults. 3dly. Buildings necessary for the institution. On the other hand, the bank owes: 1st. To the stockholders, the amount of the capital stock originally subscribed, payable only in case of the dissolution of the institution. 2dly. To Government or individuals, the whole amount of moneys deposited, payable on demand, and including both the credits on the bank books, commonly called deposites, and the bank notes in circulation. The account is balanced by the amount of undivided profits and accruing discounts, which constitute the fund for defraying current expenses, for paying subsequent dividends, and for covering contingent losses.

The following statement of the situation of the Bank of the United States, including its branches, exhibits the true amount of public stock which is still held by the institution, of the cost of its buildings and lots of ground, and of the undivided surplus or contingent fund subsequent to the dividend made in January last. But the amount of loans to individuals or discounts, of specie in the vaults, and of moneys deposited, including both the credits on the bank books, commonly called deposites, and the bank notes in circulation, is taken on a medium; and, so far as relates on the credit side of the account, to specie on hand, and, on the debit side, to deposites, is several millions of dollars less than it happens to be at this moment; both having been swelled much beyond the average by the embargo, and by the unusually large balance in the Treasury, which is principally deposited in the bank. Some minor items arising from accidental circumstances are omitted for the sake of perspicuity.

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SENATE.

800,000

18,030,000 5,000,000

480,000

Total Cr.

$23,510,000

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It sufficiently appears from this general view, that the affairs of the Bank of the United States, considered as a moneyed institution, have been wisely and skilfully managed.

The advantages derived by Government from the bank are nearly of the same nature with those obtained by individuals, who transact business with similar institutions, and may be reduced to the following heads.

1. Safe keeping of public moneys. This applies not only to moneys already in the Treasury, but also to those in the hands of the principal collectors, of the Commissioners of Loans, and of several other officers, and affords one of the best securities against delinquencies.

2. Transmission of public moneys. As the collection will always, in various quarters of the extensive territory of the Union, either exceed or fall short of the expenditures in the same places, a perpetual transmission of money, or purchase of remittances at the risk and expense of the United States, would become necessary in order to meet those demands; but this is done by the bank at its own risk and expense, for every place where one of its branches is established, which embraces all payments of any importance.

3. Collection of the revenue. The punctuality of payments introduced by the banking system, and the facilities afforded by the bank to the importers indebted for revenue bonds, are amongst the causes which have

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enabled the United States to collect with so great facility, and with so few losses, the large revenue derived from the impost.

4. Loans. Although the prosperity of past years has enabled Government, during the present Administration, to meet all the public demands without recurring to loans, the bank had heretofore been eminently useful in making the advances which under different circumstances were necessary. There was a time when, exclusively of the six per cent. stock held by the institution as part of the original subscription, the loans obtained by Government from the bank amounted to $6,200,000. And a similar disposition has been repeatedly evinced whenever the aspect of public affairs has rendered it proper to ascertain whether new loans might, if wanted, be obtained.

MARCH, 1809.

payable semi-annually, is worth almost $2,890,000.
This, however, would be much more than any bank
would give for a charter, as it would leave it nothing
but the right of dividing at the rate of six per cent. a
year, which the stockholders have without a charter. It
is believed that they would not be willing to give even
half that sum for the extension, and that about $1,250,-
000 may be considered as the maximum which could
be obtained, if it was thought eligible to sell the re-
newal of the charter for a fixed sum of money.
It is, however, presumed that the decision on the
conditions which may be annexed to an extension of
charter will be directed by considerations of a much
greater importance than the payment of such a sum
into the Treasury. The object will undoubtedly be to
give to the institution all the public utility of which it
is susceptible, and to derive from it permanent and
solid advantages rather than mere temporary aid. Un-
der those impressions, the following suggestions are
respectfully submitted:

The numerous banks now established under the authority of the several States, might, it is true, afford considerable assistance to the Government in its fiscal operations. There is none, however, which could effect the transmission of public moneys with the same I. That the Bank should pay interest to the United facility, and to the same extent, as the Bank of the Uni-States on the public deposites, whenever they should ted States is enabled to do through its several branches. exceed a certain sum, which might perhaps be fixed at The superior capital of that institution offers also a about $3,000,000. greater security against any possible losses, and greater II. That the Bank should be bound, whenever reresources in relation to loans. Nor is it eligible that quired, to lend to the United States a sum not exceedthe General Government should, in respect to its owning three-fifths of its capital, at a rate of interest not operations, be entirely dependent on institutions over which it has no control whatever. A National Bank, deriving its charter from the National Legislature, will at all times, and under every emergency, feel stronger inducements, both from interest and from a sense of duty, to afford to the Union every assistance within its power.

The strongest objection against the renewal of the charter seems to arise from the great portion of the bank stock held by foreigners; not on account of any influence it gives them over the institution, since they have no vote, but of the high rate of interest payable by America to foreign countries on the portion thus held. If the charter is not renewed, the principal of that portion, amounting to about $7,200,000, must at once be remitted abroad; but if the charter is renewed, dividends equal to an interest of about 8 per cent. a year must be annually remitted in the same manner. The renewal of the charter will, in that respect, operate in a national point of view, as a foreign loan, bearing an interest of 8 per cent. a year.

That inconvenience might perhaps be removed by a modification in the charter, providing for the repayment of that portion of the principal by a new subscription to the same amount in favor of citizens; but it does not, at all events, appear sufficient to outweigh the manifest public advantages derived from a renewal of the charter.

The conditions in favor of the public, on which this should be granted, are the next subject for consideration.

The nett profit, annually derived by the stockholders from a renewal of the charter, is equal to the difference between the annual dividends and the market rate of interest. Supposing this to continue at six per cent. during the period granted by the extension of the charter, and the dividends to be on an average at the rate of 83 per cent., that profit will be 2 per cent. a year. If the charter be extended twenty years, the value of the privilege will be equal to an annuity of 2 per cent. on the capital, that is to say, of $250,000 for twenty years; and such annuity being

exceeding six per cent.; the amount of such loan or loans to be paid by the Bank in instalments not exceeding a certain sum monthly, and to be reimbursed at the pleasure of Government.

III. That the capital stock of the Bank should be increased to $30,000,000, in the following manner, viz: 1. Five millions of dollars to be subscribed by citizens of the United States, under such regulations as would make an equitable apportionment amongst the several States and Territories.

2. Fifteen millions to be subscribed by such States as may desire it, and under such equitable apportionment amongst the several States as may be provided by law; and a branch to be established in each subscribing State, if subscribed for by the State.

3. The payments either by individuals or States to be either in specie or in public stock of the United States, at such rates as may be provided by law.

4. The subscribing States to pay their subscription in ten annual instalments, or sooner, if it suits their convenience, but to receive dividends in proportion only to the amount of subscription actually paid, and their shares of bank stock not to be transferable.

IV. That some share should be given in the direction to the General and State Governments: the General Government appointing a few directors, and the Government of each subscribing State appointing a few directors in the direction of the branch established in such State.

The result of that plan would be, 1st, That the United States, receiving no interest on public deposites, might, without inconvenience, accumulate during years of peace and prosperity, a treasure sufficient to meet periods of war and calamity, and thereby avoid the necessity of adding, by increased taxes, to the distresses of such periods. 2dly, That they might rely on a loan of $18,000,000 on any sudden emergency. 3dly, That the payment of the greater part of the proposed increase of capital being made in ten annual instalments, that increase would be gradual, and not more rapid than may be required by the progressive state of the country. 4thly, That the Bank itself would form an

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MARCH, 1809.

Proceedings.

SENATE.

additional bond of common interest and union amongst House of Representatives therewith, and request the several States.

All which is respectfully submitted.

ALBERT GALLATIN.
TREASURY DEPARTMENT, March 2, 1809.
On motion, the Senate adjourned to five o'clock.

Five o'clock in the Evening.

Ordered, That Messrs. SMITH of Maryland, BAYARD, and GAILLARD, be a committee of arrangement for the reception of the President of the United States to-morrow, on the occasion of his inauguration.

the appointment of a committee on their part.

A message from the House of Representatives informed the Senate that the House have passed the bill, entitled "An act supplementary to the act, entitled 'An act to amend the charter of Georgetown," with an amendment, in which they request the concurrence of the Senate.

The Senate proceeded to consider the amendment of the House of Representatives to the bill, entitled "An act supplementary to the act, entitled 'An act to amend the charter of Georgetown." On motion of Mr. BRADLEY, that the bill and amendment be postponed to the next sesssion of Congress, it was determined in the negative.

On motion, by Mr. BRADLEY,

Resolved, That the Senate disagree to the said amendment.

Mr. MITCHILL, from the committee, reported that they had waited on the President of the United States, who informed them that he had no further communications to make to the two Houses of Congress.

A message from the House of Representatives informed the Senate that the House insist on their disagreement to the amendments of the Senate to the bill, entitled "An act further to amend the several acts for the establishment and regulation of the Treasury, War, and Navy Departments, and making appropriations for the support of the Military Establishment and of the Navy of the United States for the year 1809." They ask a conference, on the disagreeing votes of the two Houses, and have appointed managers on their part. They have passed a bill, entitled "An act for the relief of William Hastings," in which they request the concurrence of the Senate.ed The Senate proceeded to consider the resolution of the House of Representatives, requesting a conference on the disagreeing votes of the two Houses on the bill first above mentioned; and having agreed to the same,

Ordered, That Messrs. GILES and BRADLEY be the managers at the same on the part of the Senate.

The bill, entitled "An act for the relief of William Hastings," was read. On the question, Shall this bill be read a second time? it was determined in the affirmative. On motion, that the bill be now read a second time, it was objected to as against the rule.

Mr. GILES, from the managers at the conference on the bill, entitled "An act further to amend the several acts for the establishment and regulation of the Treasury, War, and Navy Departments, and making appropriations for the support of the Military Establishment and of the Navy of the United States for the year 1809," made report. Whereupon, it was agreed that a bill further to amend the several acts for the establishment and regulation of the Treasury, War, and Navy Departments, be now read three several times, by unanimous consent.

Resolved, That this bill pass, and that the title thereof be "An act further to amend the several acts for the establishment and regulation of the Treasury, War, and Navy Departments."

Resolved, That Messrs. MITCHILL and SMITH, of New York, be a committee on the part of the Senate, with such as the House of Representatives may join, to wait on the President of the United States and notify him that, unless he may have any further communications to make to the two Houses of Congress, they are now ready to adjourn.

Ordered, That the Secretary acquaint the

Ordered, That the Secretary notify the House of Representatives that the Senate having finishthe business before them, are about to adjourn. The Secretary having performed that duty, the Senate adjourned without day.

EXTRA SESSION.

The President of the United States

to

Senator for the State of -: that the Senate should be convened on Saturday, the Certain matters touching the public good requiring fourth day of March next, you are desired to attend at the Senate Chamber, in the City of Washington, on that day; then and there to deliberate on such communications as shall be made to you.

WASHINGTON, Dec. 30, 1808.

TH. JEFFERSON.

SATURDAY, March 4.

In conformity with the summons from the President of the United States, the Senate assembled in the Chamber of the House of Rep

resentatives.

PRESENT:

JOHN MILLEDGE, from the State of Georgia, President pro tempore.

NICHOLAS GILMAN, and NAHUM PARKER, from
New Hampshire.

TIMOTHY PICKERING, from Massachusetts.
CHAUNCEY GOODRICH, from Connecticut.
ELISHA MATHEWSON, from Rhode Island.
STEPHEN R. BRADLEY, from Vermont.
JOHN SMITH, from New York.
AARON KITCHEL, from New Jersey.
ANDREW GREGG, from Pennsylvania.
JAMES A. BAYARD, from Delaware.
PHILIP REED, from Maryland.
WILLIAM B. GILES, from Virginia.

JAMES TURNER, and JESSE FRANKLIN, from
North Carolina.

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THOMAS SUMTER, and JOHN GAILLARD, from South Carolina.

WILLIAM H. CRAWFORD, from Georgia.
BUCKNER THRUSTON, and JOHN POPE, from
Kentucky.

DANIEL SMITH, from Tennessee.
EDWARD TIFFIN, from Ohio.

JOHN LAMBERT, appointed a Senator by the Legislature of the State of New Jersey for six years, and SAMUEL SMITH, appointed a Senator by the Executive of the State of Maryland, attended, and their credentials were read.

JAMES LLOYD, junior, appointed a Senator by the Legislature of the State of Massachusetts, attended, stating that he was elected, but not in possession of his credentials.

MARCH, 1809.

on any unwarrantable views, nor, as I trust, on any involuntary errors in the public councils. Indulging no passions which trespass on the rights or the repose of other nations, it has been the true glory of the United States to cultivate peace by observing justice; and to entitle themselves to the respect of the nations at war, by fulfilling their neutral obligations with the most scrupulous impartiality. If there be candor in the world, the truth of these assertions will not be ques tioned; posterity, at least, will do justice to them.

This unexceptionable course could not avail against the injustice and violence of the belligerent Powers. In their rage against each other, or impelled by more direct motives, principles of retaliation have been introduced, equally contrary to universal reason and acknowledged law. How long their arbitrary edicts will be continued, in spite of the demonstrations that not JOSEPH ANDERSON, from the State of Tennes- even a pretext for them has been given by the United see; RICHARD BRENT, from the State of Vir- States, and of the fair and liberal attempt to induce a ginia; JAMES HILLHOUSE, from the State of Con- revocation of them, cannot be anticipated. Assuring necticut; MICHAEL LEIB, from the State of Penn-myself, that, under every vicissitude, the determined sylvania; RETURN J. MEIGS, from the State of spirit and united councils of the nation will be safeOhio; JONATHAN ROBINSON, from the State of guards to its honor and its essential interests, I repair Vermont; SAMUEL WHITE, from the State of than what springs from my own inadequacy to its high to the post assigned me with no other discouragement Delaware, severally attended. duties. If I do not sink under the weight of this deep conviction, it is because I find some support in a consciousness of the purposes, and a confidence in the principles which I bring with me into this arduous

The oath required by law was administered to the Senators above mentioned, in the six years' class, respectively, except to Mr. BRENT.

The PRESIDENT OF THE UNITED STATES at- service. tended, and communicated the following

ADDRESS:

Unwilling to depart from examples of the most revered authority, I avail myself of the occasion now presented, to express the profound impression made on me by the call of my country to the station, to the duties of which I am about to pledge myself by the most solemn of sanctions. So distinguished a mark of confidence, proceeding from the deliberate and tranquil suffrage of a free and virtuous nation, would, under any circumstances, have commanded my gratitude and devotion, as well as filled me with an awful sense of the trust to be assumed. Under the various circumstances which give peculiar solemnity to the existing period, I feel that both the honor and the responsibility

allotted to me are inexpressibly enhanced.

The present situation of the world is, indeed, without a parallel, and that of our own country full of difficulties. The pressure of these, too, is the more severely felt, because they have fallen upon us at a moment when the national prosperity being at a height not before attained, the contrast, resulting from the change, has been rendered the more striking. Under the benign influence of our Republican institutions, and the maintenance of peace with all nations, whilst so many of them were engaged in bloody and wasteful wars, the fruits of a just policy were enjoyed in an unrivalled growth of our faculties and resources. Proofs of this were seen in the improvements of agriculture; in the successful enterprises of commerce; in the progress of manufactures and useful arts; in the increase of the public revenue, and the use made of it in reducing the public debt; and in the valuable works and establishments everywhere multiplying over the face of our land.

It is a precious reflection that the transition from this prosperous condition of our country, to the scene which has for some time been distressing us, is not chargeable

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To cherish peace and friendly intercourse with all nations having correspondent dispositions; to maintain sincere neutrality towards belligerent nations; to prefer, in all cases, amicable discussion and reasonable accommodation of differences, to a decision of them by an appeal to arms; to exclude foreign intrigues and foreign partialities, so degrading to all countries, and dence, too just to invade the rights of others, too proud so baneful to free ones; to foster a spirit of indepento surrender our own, too liberal to indulge unworthy prejudices ourselves, and too elevated not to look down upon them in others; to hold the union of the States as the basis of their peace and happiness; to support the Constitution, which is the cement of the Union, as well in its limitations as in its authorities; to respect the rights and authorities reserved to the States and to the people, as equally incorporated with, and essential

to the success of, the general system; to avoid the slightest interference with the rights of conscience or the functions of religion, so wisely exempted from civil jurisdiction; to preserve, in their full energy, the other salutary provisions in behalf of private and personal rights, and of the freedom of the press; to observe economy in public expenditures; to liberate the public resources by an honorable discharge of the public debts; to keep within the requisite limits a standing military force, always remembering that an armed and trained militia is the firmest bulwark of Republics; that without standing armies their liberty can never be in danger, nor with large ones safe; to promote, by authorized means, improvements friendly to agriculture, to manufactures, and to external as well as internal commerce; to favor, in like manner, the advancement of science and the diffusion of information, as the best aliment to true liberty; to carry on the benevolent plans which have been so meritoriously applied to the conversion of our aboriginal neighbors from the degradation and wretchedness of savage life, to a participation of the improvements of which the human mind and manners are susceptible in a civilized state;-as far as sentiments and intentions

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