THE OLD UNITED STATES BANK.
Creston, Iowa.
Please give the location and explain the government of the first and second banks of the United States.
M. M. McKee.
Answer.—The act establishing the old United States Bank, although opposed by the Secretary of State, Thomas Jefferson, and by Edmund Randolph, the Attorney General, on the ground of its unconstitutionality, was approved by President Washington, July 25, 1791. The bank was organized at Philadelphia. The different clauses declared that the capital should be $10,000,000, which should be divided into 25,000 shares of $400 each; that any person, copartnership or body politic might subscribe for any number of shares not exceeding 1,000—only the United States could subscribe for more than this number of shares; that, with the exception of the United States, the subscriptions should be payable one-fourth in gold and silver, and the remaining three-fourths in certain 6 per cent bonds of the United States; that the subscribers should be incorporated under the name of “The President, Directors, and company of the Bank of the United States,” and the organization should continue until March 4, 1811; that the bank could hold property of all kinds, inclusive of its capital, to the amount of $15,000,000; that twenty-five directors should be chosen, who in turn should choose from their number a President; that as soon as $400,000 in gold and silver was received on subscription the bank could organize, after giving a notice of its intention. The general effect of this institution was very salutary. The credit of the United States became firmly established. The bank notes stood at par with gold and silver. The large deposits made the money available for the use of the Treasury, and the State bank currency, which had flooded the country, with no prospects of redemption, was greatly reduced. But with all its recognized advantages the act to re-charter was defeated in 1811, by the casting vote of the Vice President, George Clinton. Its loss, however, was immediately felt in the sudden and rapid increase of the currency of the State banks. To ward off an impending crisis, the second bank was established by an act approved by President Madison, April 10, 1816, at Philadelphia. A capital of $35,000,000 was required, which was to be equally divided into 350,000 shares, of which the United States took 70,000. The charter extended to March 3, 1836. It was prohibited from lending on account of the United States more than $500,000, or to any prince or foreign power any sum whatever, without the sanction of law first obtained. The bank was also prohibited from issuing bills of less denomination than $5. In time, to facilitate business, branch offices were established in every State. In December, 1829, however, the bank met strenuous opposition in the message of President Jackson, who argued, like Jefferson, against the constitutionality of its charter. When Congress, in 1832, passed a bill to re-charter the institution, Jackson imposed his veto, and soon after removed from the bank the United States’ deposits. The bank corporation, however, continued to exist, hoping that succeeding elections would change the complexion of affairs before their charter expired; but in this they were disappointed. In 1836 the charter terminated, and a few months afterward the business interests of the country were overwhelmed in a most disastrous financial revulsion.
JAMES FENIMORE COOPER.
Perryville, Ind.
Give a short biography of James Fenimore Cooper.
C. A. Moody.