The President had dwelt much upon "local discounts," confining the meaning of that phrase to loans obtained on promissory notes. He did not consider money obtained upon a bill of exchange as coming under that idea—nor did it when it was an exchange of money—when it was the giving of money in one place for money in another place. But that true idea of a bill of exchange was greatly departed from when the drawer of the bill had no money at the place drawn on, and drew upon time, and depended upon getting funds there in time; or taking up the bill with damages when it returned protested. Money obtained that way was a discount obtained, and on far worse terms for the borrower, and better for the bank, than on a fair promissory note: and the rapacious banks forced their loans, as much as possible into this channel. So that this fiscal bank was limited to do the very thing it wished to do, and which was so profitable to itself and so oppressive to the borrower. This, Mr. Tappan, of Ohio, showed in a concise speech.
"Mr. Tappan said, when senators on the other side declare that this bank bill is intended to withhold from the corporation created by it the power of making loans and discounts, he felt himself bound to believe that such was their honest construction of it. He was, however, surprised that any man, in the slightest degree acquainted with the banking business of the country, who had read this bill, should suppose that, under its provisions, the company incorporated by it would not have unlimited power to loan their paper and to discount the paper of their customers. The ninth fundamental article says, that 'the said corporation shall not, directly or indirectly, deal or trade in any thing except foreign bills of exchange, including bills or drafts drawn in one State or Territory and payable in another.' This bill, in this last clause, sanctioned a mode of discounting paper, and making loans common in the Western country. He spoke of a mode of doing business which he had full knowledge of, and he asked senators, therefore, to look at it. A man who wants a loan from a bank applies to the directors, and is told, we can lend you the money, but we do not take notes for our loans—you must give us a draft; but, says the applicant, I have no funds any where to draw upon; no matter, say the bankers, if your draft is not met, or expected to be met, because you have no funds, that need make no difference; you may pay it here, with the exchange, when the time it has to run is out; so the borrower signs a draft or bill of exchange on somebody in New York, Philadelphia, or Baltimore, and pays the discount for the time it has to run; when that time comes round, the borrower pays into the bank the amount of his draft, with two, four, six, or ten per cent., whatever the rate of exchange may be, and the affair is settled, and he gets a renewal for sixty days, by further paying the discount on the sum borrowed; and if it is an accommodation loan, it it renewed from time to time by paying the discount and exchange. Very few of the Western banks, he believed, discounted notes; they found it much more profitable to deal in exchange, as it is called; but this dealing in exchange enables the banks to discount as much paper, and to loan as much of their own notes, as the old-fashioned mode of discounting; it is a difference in form merely, with this advantage to the banks, that it enables them to get from their customers ten or twelve per cent. on their loans, instead of six, to which, in discounting notes, they are usually restricted. How then, he asked, could senators say that this bill did not give the power to make loans and discounts? He had shown them how, under this law, both loans and discounts will be made without limitation."
Mr. Benton then went on with offering his amendments, and offered one requiring all the stockholders in this corporation Fisc (which was to be the Treasury of the United States), to be citizens of the United States, for the obvious reason of preventing the national treasury from falling under the control of foreigners. M. Berrien considered the amendment unnecessary, as there was already a provision that none but citizens of the United States should take the original stock; and the only effect of the provision would be to lessen the value of the stock. Mr. Benton considered this provision as a fraudulent contrivance to have the appearance of excluding foreigners from being stockholders while not doing so. The prohibition upon them as original subscribers was nothing, when they were allowed to become stockholders by purchase. His amendment was intended to make the charter what it fraudulently pretended to be—a bank owned by American citizens. The word "original" would be a fraud unless the prohibition was extended to assignees. And he argued that the senator from Georgia (Mr. Berrien), had admitted the design of selling to foreigners by saying that the value of the stock would be diminished by excluding foreigners from its purchase. He considered the answer of the senator double, inconsistent, and contradictory. He first considered the amendment unnecessary, as the charter already confined original subscriptions to our own citizens; and then considered it would injure the price of the stock to be so limited. That was a contradiction. The fact was, he said, that this bill was to resurrect, by smuggling, the old United States Bank, which was a British concern; and that the effect would be to make the British the governors and masters of our treasury: and he asked the yeas and nays on his motion, which was granted, and they stood—19 to 26, and were: Yeas—Messrs. Allen, Benton, Buchanan, Clay of Alabama, Cuthbert, Fulton, King, Linn, McRoberts, Mouton, Nicholson, Pierce, Sevier, Sturgeon, Tappan, Walker, Woodbury, Wright, and Young—19. Nays—Messrs. Archer, Barrow, Bates, Berrien, Clay of Kentucky, Clayton, Dixon, Evans, Graham, Henderson, Huntington, Kerr, Mangum, Merrick, Miller, Morehead, Phelps, Porter, Prentiss, Preston, Rives, Simmons, Smith of Indiana, Tallmadge, White, and Woodbridge—26. Considering this a vital question, and one on which no room should be left for the majority to escape the responsibility of putting the United States Treasury in the hands of foreigners—even alien enemies in time of war, as well as rival commercial competitors in time of peace—Mr. Benton moved the same prohibition in a different form. It was to affix it to the eleventh fundamental rule of the eleventh section of the bill, which clothes the corporation with power to make rules to govern the assignment of stock: his amendment was to limit these assignments to American citizens. That was different from his first proposed amendment, which included both original subscribers and assignees. The senator from Georgia objected to that amendment as unnecessary, because it included a class already prohibited as well as one that was not. Certainly it was unnecessary with respect to one class, but necessary with respect to the other—necessary in the estimation of all who were not willing to see the United States Treasury owned and managed by foreigners. He wished now to hear what the senator from Georgia could say against the proposed amendment in this form. Mr. Berrien answered: "He hoped the amendment would not prevail. The original subscribers would be citizens of the United States. To debar them from transferring their stock, would be to lessen the value of the stock, which they rendered valuable by becoming the purchasers of it." Mr. Benton rejoined, that his amendment did not propose to prevent the original subscribers from selling their stock, or any assignee from selling; the only design of the amendment was to limit all these sales to American citizens; and that would be its only effect if adopted. And as to the second objection, a second time given, that it would injure the value of the stock, he said it was a strange argument, that the paltry difference of value in shares to the stockholders should outweigh the danger of confiding the Treasury of the United States to foreigners—subjects of foreign potentates. He asked the yeas, which were granted—and stood—21 to 27: the same as before, with the addition of some senators who had come in. These several proposed amendments, and the manner in which they were rejected, completed the exposure of the design to resuscitate the defunct Bank of the United States, just as it had been, with its foreign stockholders, and extraordinary privileges. It was to be the old bank revived, disguised, and smuggled in. It was to have the same capital as the old one—thirty-five millions: for while it said the capital was to be twenty-one millions, there was a clause enabling Congress to add on fourteen millions—which it would do as soon as the bill passed. Like the old bank, it was to have the United States for a partner, owning seven millions of the stock. The stock was all to go to the old Bank of the United States; for the subscriptions were to be made with commissioners appointed by the Secretary of the Treasury—who, it was known, would appoint the friends of the old bank; so that the whole subscription would be in her hands; and a charter for her fraudulently and deceptiously obtained. The title of the bill was fraudulent, being limited to the management of the "public" moneys, while the body of it conferred all the privileges known to the three distinct kinds of banks:—1. Circulation. 2. Exchange. 3. Discount and deposit—the discount being in the most oppressive and usurious form on inland and mere neighborhood bills of exchange, declared by the charter to be foreign bills for the mere purpose of covering these local loans.
"Mr. Walker moved an amendment, requiring that the bills in which the Bank should deal should be drawn at short dates, and on goods already actually shipped. It was negatived by yeas and nays, as follows:—Yeas—Messrs. Allen, Benton, Buchanan, Calhoun, Clay of Alabama, Fulton, King, Linn, McRoberts, Mouton, Nicholson, Pierce, Rives, Sevier, Smith of Connecticut, Sturgeon, Tappan, Walker, Woodbury, Wright, and Young—21. Nays—Messrs. Archer, Barrow, Bates, Berrien, Choate, Clay of Kentucky, Clayton, Dixon, Evans, Graham, Henderson, Huntington, Kerr, Mangum, Merrick, Miller, Morehead, Phelps, Porter, Prentiss, Preston, Simmons, Smith of Indiana, Southard, Tallmadge, White, and Woodbridge—27. Mr. Allen moved an amendment to make the directors, in case of suspension, personally liable for the debts of the bank. This was negatived as follows: Yeas—Messrs. Allen, Benton, Buchanan, Clay of Alabama, Cuthbert, Fulton, King, Linn, McRoberts, Mouton, Nicholson, Pierce, Sevier, Smith of Connecticut, Sturgeon, Tappan, Walker, Woodbury, Wright, and Young—20. Nays—Messrs. Archer, Barrow, Bates, Berrien, Choate, Clay of Kentucky, Clayton, Dixon, Evans, Graham, Henderson, Huntington, Kerr, Mangum, Merrick, Miller, Morehead, Phelps, Porter, Prentiss, Preston, Rives, Simmons, Smith of Indiana, Southard, Tallmadge, White, and Woodbridge—28."
The character of the bill having been shown by the amendments offered and rejected, there was no need to offer any more, and the democratic senators ceased opposition, that the vote might be taken on the bill: it was so; and the bill was passed by the standing majority. Concurred in by the Senate without alteration, it was returned to the House, and thence referred to the President for his approval, or disapproval. It was disapproved, and returned to the House, with a message stating his objections to it; where it gave rise to some violent speaking, more directed to the personal conduct of the President than to the objections to the bill stated in his message. In this debate Mr. Botts, of Virginia, was the chief speaker on one side, inculpating the President: Mr. Gilmer of Virginia, and Mr. Proffit of Indiana, on the other were the chief respondents in his favor. The vote being taken there appeared 103 for the bill, 80 against it—which not being a majority of two-thirds, the bill was rejected: and so ends the public and ostensible history of the second attempt to establish a national bank at this brief session under the guise, and disguise, of a misnomer: and a long one at that.
The negative votes, when rejected on the final vote for want of two-thirds of the House, were:
"Messrs. Archibald H. Arrington, Charles G. Atherton, Linn Banks, Benjamin A. Bidlack, Linn Boyd, David P. Brewster, Aaron V. Brown, Charles Brown, William O. Butler, Patrick C. Caldwell, John Campbell, Reuben Chapman, James G. Clinton, Walter Coles, Richard D. Davis, John B. Dawson, Ezra Dean, Andrew W. Doig, Ira A. Eastman, John C. Edwards, Joseph Egbert, Charles G. Ferris, John G. Floyd, Charles A. Floyd, Joseph Fornance, James Gerry, Thomas W. Gilmer, William O. Goode, Amos Gustine, William A. Harris, John Hastings, Samuel L. Hays, Isaac E. Holmes, George W. Hopkins, Jacob Houck, jr., George S. Houston, Edmund W. Hubard, Robert M. T. Hunter, Charles J. Ingersoll, William W. Irwin, William Jack, Cave Johnson, John W. Jones, George M. Keim, Andrew Kennedy, Dixon H. Lewis, Abraham McClellan, Robert McClellan, James J. McKay, John McKeon, Francis Mallory, Albert G. Marchand, John Thompson Mason, James Mathews, William Medill, John Miller, Peter Newhard, William Parmenter, Samuel Patridge, Wm. W. Payne, Arnold Plumer, George H. Proffit, John Reynolds, R. Barnwell Rhett, Lewis Riggs, James Rogers, Tristram Shaw, Benjamin G. Shields, John Snyder, Lewis Steenrod, George Sweney, Hopkins L. Turney, John Van Buren, Aaron Ward, Harvey M. Watterson, John B. Weller, John Westbrook, James W. Williams, Henry A. Wise, Fernando Wood."