Draft of an Act to Incorporate the
Bank of the United States1
An Act to incorporate the Subscribers to The Bank of 3
Whereas it is conceived, that the establishment of a Bank for the Unitd States upon a foundation sufficiently extensive to answer the purposes intended thereby, and at the same time upon principles which afford adequate security for an upright and prudent administration thereof will be very conducive to the successful conducting of the national finances will tend to give facility to the obtaining of loans for the use of government in sudden emergencies and will be productive of considerable advantages to Trade and Industry in general Therefore
Be it enacted &c. that a Bank of the United States shall be established, the Capital Stock whereof shall not exceed ten Millions of Dollars divided into twenty five thousand shares each share being four hundred Dollars and that subscriptions towards constituting the said Stock shall on the first Monday of April next be opened at the City of Philadelphia under the superindence of such persons not less than three as shall be appointed for that purpose by the President of the United States (who is hereby empowered to appoint the said persons accordingly) which subscriptions shall continue open until the whole of the said Stock shall have been subscribed.
And be it further enacted that it shall be lawful for any person copartnership or body politic to subscribe for such or so many of the said shares as he she or they shall think fit not exceeding one thousand except as shall be hereafter directed relatively to the U. States and that the sums respectively subscribed shall be payable, one fourth in gold and silver and three fourths in that part of the public debt which according to the loan proposed by the Act intitled “An act making provision for the debt of the United States”4 shall bear an accruing interest at the time of payment of six per Centum per annum, and shall also be payable in four equal parts, in the aforesaid ratio of specie to debt, at the distance of six calendar months from each other; the first whereof shall be paid at the time of subscription.
And be it further enacted that all those who shall become subscribers to the said Bank their successors and assigns shall be and are hereby created and made a Corporation and body politic by the name and stile of the President Directors & Company of the Bank of ;5 and shall so continue unless the final redemption of that part of the Stock thereof which shall consist of the sd. public Debt; and by that name shall be and are hereby made able and capable in law to have purchase receive possess enjoy and retain to them and their successors lands rents tenements hereditaments goods chattels and effects of what kind nature or quality so ever to an amount not exceeding in the whole fifteen Millions of Dollars including the amount of the Capital Stock aforesaid and the same tosell grant demise aliene or dispose of and also to sue and be sued plead and be impleaded answer and be answered defend and be defended in Courts of record or any other place whatsoever and also to make have and use a common seal and the same to break alter & renew at their pleasure; and also to ordain establish and put in execution such bye laws ordinances and regulations as shall seem necessary and convenient for the government of the said corporation not being contrary to law or to the constitution thereof for which purpose general Meetings of the Stockholders shall and may be called by the Directors & in manner hereinafter specified: and generally to do and execute all and singular matters and things which to them it shall or may appertain to do: subject nevertheless to the rules regulations restrictions limitations & provisions herein after prescribed and declared.
And be it further enacted that for the well ordering of the affairs of the said Corporation there shall be twenty five Directors; of whom there shall be an election on the first Monday of January in each year, by the Stockholders, or proprietors of the Capital Stock of the said Corporation, and by plurality of the votes actually given, and those who shall be duly chosen at any election shall be capable of serving as Directors by virture of such choice until the end or expiration of the Monday of January next succeeding the time of such election and no longer and the said Directors at their first meeting after each election shall choose one of their number as President.
Provided always and be it further enacted that as soon as the sum of four hundred thousand Dollars in gold and silver shall have been actually received on account of the subscriptions to the said Stock notice thereof shall be given by the persons under whose superintendence the same shall have been made in at least two public Gazettes printed in the City of Philadelphia and the said persons shall at the same time in like manner notify a time and place within the said City at the distance of 6 days from the time of such notification, for proceeding to the election of Directors and it shall be lawful for such election to be then and there made; and the persons who shall be then and there chosen shall be the first Directors & shall be capable of serving by virtue of such choice until the end or expiration of the Monday of January next ensuing the time of making the same and shall forthwith thereafter commence the operations of the said Bank at the said City of Philadelphia. And provided further that in case it should at any time happen that an election of Directors should not be made upon any day when pursuant to this act it ought to have been made, the said corporation shall not for that cause be deemed to be dissolved; but it shall be lawful on any other day to hold and make an election of Directors in such manner as shall have been regulated by the laws and ordinances of the said corporation. And provided lastly that in case of the death [resignation, absence from the U States, or removal of a director by the stockholders, his place may be filled up by a new choice for the remainder of the year.]7
And be it further enacted that the Directors for the time being shall have power to appoint such officers clerks and servants under them as shall be necessary for executing the business of the said Corporation & to allow them such compensation for their services respectively as shall be reasonable and shall be capable of exercising such other powers and authorities for the well governing and ordering of the affairs of the said Corporation as shall be described fixed and determined by the laws regulations and ordinances of the same.
And be it further enacted that the following rules regulations restrictions limitations and provisions shall form and be fundamental articles of the constitution of the said Corporation viz
I. The number of votes to which each Stockholder [shall be entitled shall be according to the number of shares he shall hold, in the proportions following; that is to say: For one share, and not more than two shares, one vote: For every two shares above two and not exceeding ten, one vote: For every four shares above ten, and not exceeding thirty, one vote: For every six shares above thirty, and not exceeding sixty, one vote: For every eight shares above sixty, and not exceeding one hundred, one vote: and for every ten shares above one hundred, one vote: But no person, copartnership or body politic shall be entitled to a greater number than thirty votes. And after the first election no share or shares shall confer a right of suffrage, which shall not have been holden three calendar months previous to the day of election. Stockholders actually resident within the United States, and none other, may vote in elections by proxy.
II. Not more than three fourths of the Directors in Office, exclusive of the President, shall be eligible for the next succeeding year. But the Director who shall be President at the time of an election, may always be reelected.
III. None but a Stockholder being a Citizen of the United States shall be eligible as a Director.
IV. No Director shall be entitled to any emolument, unless the same shall have been allowed by the Stockholders at a general meeting. The Stockholders shall make such compensation to the President for his extraordinary attendance at the bank as shall appear to them reasonable.]
V. Not less than seven directors shall constitute a board for the transaction of business of whom the President shall always be one except in case of sickness; in which case his place may be supplied by any other director whom he by writing under his hand shall nominate for the purpose.
VI. [Any number of Stockholders, not less than sixty, who together shall be proprietors of two hundred shares, or upwards, shall have power at any time to call a general meeting of the Stockholders for purposes relative to the institution; giving at least six weeks notice in two public gazettes of the place where the Bank is kept and specifying in such notice the object or objects of such meeting.]
XIV. Every cashier or Treasurer before he enters upon the duties of his Office shall be required to give Bond with two or more sureties to the satisfaction of the Directors in a sum of not less than Twenty thousand Dollars with condition for his good behaviour.
XVIII. The lands tenements and hereditaments which it shall be lawful for the said Corporation to hold shall be only such as shall be requisite for its immediate accommodation in relation to the convenient transacting of its business and such as shall have been bona fide mortgaged to it by way of security or conveyed to it in satisfaction of debts previously contracted in the usual course of its dealings or purchased at sales upon judgments which shall have been obtained for such debts.
The total amount of the debts which the said Corporation shall at any time owe whether by bond bill note or other contract shall not exceed the sum of ten millions of Dollars over and above the monies then actually deposited in the bank for safekeeping: unless the contracting of any greater debt shall have been previously authorised by a law of the United States. In case of excess the Directors under whose administration it shall happen shall be liable for the same in their natural or private capacities; and an action of debt may in such case be brought against them or any of them or any of their heirs executors or administrators in any Court of record of the United States or of either of them by any creditor or Creditors of the said Corporation and may be prosecuted to judgment and execution any condition covenant or agreement to the contrary not withstanding. But this shall not be construed to exempt the said Corporation or the lands tenements goods or chattels thereof from being also liable for and chargeable with the said excess. Such of the said Directors who may have been absent when the said excess was contracted or created or who may have dissented from the resolution or act whereby the same was so contracted or created may respectively exonerate themselves from being so liable by forthwith giving notice of the fact and of their absence or dissent to the Presid of the U States and to the Stockholders at a general Meeting which they shall have power to call for that purpose.
The said Corporation may sell any part of the public debt whereof its stock shall be composed but shall not be at liberty to purchase any public debt whatsoever: Nor shall directly or indirectly deal or trade in any thing except bills of exchange gold or silver bullion or in the sale of goods really and truly pledged for money lent and not redeemed in due time or of goods which shall be the produce of its lands. Neither shall the said Corporation take more than at the rate of six per Centum per annum for or upon its loans or discounts.
No loan shall be made by the said Corporation [for the use or on account of the Government of the United States to an amount exceeding 100,000 dollars or of any particular State to an amount exceeding fifty thousand dollars, or of any foreign prince or states unless previously authorized by a law of the United States.
The Stock of the] said Corporation [shall be] assignable & [transferrable according to such rules as shall be instituted in that behalf] by the laws and ordinances of the same.
The bills obligatory and of credit under the seal of the said Corporation which shall be made to any person or persons shall be assignable by indorsement thereupon under the hand or hands of such person or persons and of his her or their Assignee or Assignees and so as absolutely to transfer & vest the property thereof in each and every assignee or assignees successively and to enable such assignee or assignees to bring and maintain an action thereupon in his her or their own name or names. And bills or notes which may be issued by order of the said corporation signed by the President and countersigned by the principal Cashier or Treasurer thereof promising the payment of money to any person or persons his her or their order or to bearer, though not under the seal of the said Corporation, shall be binding and obligatory upon the same in the like manner and with the like force and effect, as upon any private person or persons if issued by him or them in his her or their private or natural capacity or capacities; and shall be assignable and negotiable in like manner as if they were so issued by such private person or persons; that is to say those which shall be payable to any person or persons his her or their order shall be assignable by endorsement in like manner and with the like effect as foreign bills of exchange now are and those which are payable to bearer shall be negotiable and assignable by delivery only.
Half yearly [dividends shall be made of so much of the profits of the Bank as shall appear to the directors advisable. And once in every three years the Directors shall lay before the Stockholders, at a general meeting for their information, an exact and particular statement of the debts, which shall have remained unpaid, after the expiration of the original Credit, for a period of treble the term of that credit, and of the surplus of profit, if any, after deducting losses and dividends.] If there shall be a failure in the payments of any part of any sum subscribed by any person or copartnership or body politic the party failing shall lose the benefit of any dividend which may have accrued prior to the time for making such payment & during the delay of the same.
It shall be lawful [for the directors] aforesaid [to establish Offices wheresoever they shall think fit, within the United States, for the purposes of discount and deposit only, and upon the same terms, and in the same manner, as shall be practiced at the Bank, and to commit the management of the said Offices, and the making of the said discounts, either to agents specially appointed by them, or to such persons as may be chosen by the Stockholders residing at the place where any such office shall be, under such agreements, and subject to such regulations, as they shall deem proper; not being contrary to law, or to the constitution of the Bank.]
The Officer [at the head of the treasury department of the United States shall be furnished from time to time, as often as he may require, not exceeding once a week with statements of the amount of the capital stock of the] said Corporation, [and of the debts due to the same, of the monies deposited therein, of the notes in circulation, and of the cash in hand; and shall have a right to inspect such general accounts in the books of the Bank, as shall relate to the said statements; provided that this shall not be construed to imply a right of inspecting the account of any private individual or individuals, with the Bank.]
XX. And be it further enacted that the bills or notes of the said Corporation [originally made payable, or which shall have become payable on demand, in gold and silver coin shall be receivable in all payments to the United States.]
XXIV. And be it further enacted that it shall be lawfull for the President of the U States [to cause a subscription to be made to the stock of the said] corporation [on behalf of the U States, to an amount not exceeding two millions of dollars, to be paid out of the monies which shall be borrowed by virtue of either of the Acts, the one intitled, “An Act making provision for the debt of the United States”8 and the other intitled “An act making provision for the reduction of the public debt.”9 borrowing of the Bank an equal sum to be applied to the purposes for which the said monies shall have been procured, reimbursable in ten years by equal annual installments; or at any time sooner, or in any greater proportions, that the government may think fit.]
And be it further enacted that no other Bank shall be established by any future law of the U States during the continuance of the Corporation hereby created; for which the faith of the U States is hereby pledged.
And be it further enacted that this Act shall in all things be construed & taken most beneficially for the said Corporation.
ADf, Hamilton Papers, Library of Congress.
1. Although there are many differences between this draft and the statute, there are many more similarities. The law is essentially an amended version of H’s draft. See “An Act to incorporate the subscribers to the Bank of the United States” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends [February 25, 1791]), and “Second Report on the Further Provision Necessary for Establishing Public Credit (Report on a National Bank),” December 13, 1790.
2. This document is undated. It is unlikely that H drafted the bill after December 31, since a Senate committee reported the Bank Act on January 3. It is possible that he finished the draft shortly after he submitted his report on the bank to the House on December 14. The House committed the report to a committee of the whole and on December 23 sent a copy of the document to the Senate.
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7. Bracketed passages in this document are not in H’s handwriting.