Speech to Congress
regarding why he was closing the United States Bank
Andrew Jackson
July 10, 1832
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 organizing 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 installments of two hundred
thousand dollars 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 will 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, clothed 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 views, as make it
consistent with the rights of the States or the liberties of the
people.
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 for the independence of our
country in war. Their power would be great whenever they might
choose to exert it; but if this monopoly were regularly renewed
every fifteen or twenty years, on terms proposed by themselves, they
might seldom in peace put forth their strength to influence
elections or control the affairs of the nation. But if any private
citizen or public functionary should interpose to curtail its
powers, or prevent a renewal of its privileges, it cannot be doubted
that he would be made to feel its influence.
Should the stock of the Bank principally pass into the hands of the
subjects of a foreign country, and we should unfortunately become
involved in a war with that country, what would be our condition? Of
the course which would be pursued by a bank almost wholly owned by
the subjects of a foreign power, and managed by those whose
interests, if not affections, would run in the same direction, there
can be no doubt. All its operations within would be in aid of the
hostile fleets and armies without. Controlling our currency,
receiving our public moneys, and holding thousands of our citizens
in dependence, it would be more formidable and dangerous than the
naval and military power of the enemy….
It is maintained by the advocates of the Bank, that its
constitutionality, in all its features, ought to be considered as
settled by precedent, and by the decision of the Supreme Court. To
this conclusion I cannot assent. Mere precedent is a dangerous
source of authority, and should not be regarded as deciding
questions of constitutional power, except where the acquiescence of
the people and the States can be considered as well settled. So far
from this being the case on this subject, an argument against the
Bank might be based on precedent. One Congress, in 1791, decided in
favor of a bank; another, in 1811, decided against it. One Congress,
in 1815, decided against a bank; another, in 1816, decided in its
favor. Prior to the present Congress, therefore, the precedents
drawn from that source were equal. If we resort to the States, the
expressions of legislative, judicial, and executive opinions against
the Bank have been probably to those in its favor as four to one.
There is nothing in precedent, therefore, which, if its authority
were admitted, ought to weigh in favor of the act before me.
If the opinion of the Supreme Court covered the whole ground of this
act, it ought not to control the coordinate authorities of this
Government. The Congress, the Executive, and the Court, must each
for itself be guided by its own opinion of the Constitution. Each
public officer, who takes an oath to support the Constitution,
swears that he will support it as he understands it, and not as it
is understood by others. It is as much the duty of the House of
Representatives, of the Senate, and of the President to decide upon
the constitutionality of any bill or resolution which may be
presented to them for passage or approval as it is of the supreme
judges when it may be brought before them for judicial decision….
It cannot 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…
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, disclosed 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….
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 preserved.
Andrew Jackson Speech to Congress