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20,420,000 4,747,784 2,545,230 987,213 28,590,894 2,050,000 549, 110 497,072 208,921 2,565,256 1,79 1,670 743,457 173,682 226,428 2,466,291

432,625 680,379 124,880 428,817 856,814 6,118,397 673,836 861,031 343,389 6,909,705

3,692,577 1,503,460 452, 441 337,788 4,195,690 15,637,353 7,959,280 10,354,500 1,560,291 20,370,693 844,284 374,799 307,201

83,667 1,153,407 12,810,333 7,308,368 6,841,448 2,414,669 21,474,173

830,000 376,000 300,000 170,000 not known. 5,525,495 1,733,659 1,864,397 777,009 6,627,270 3,875,794 946,059 564,894 228,914 3,837,272 5,571,100 3,857,964 1,974, 171 832,732 7,698,906 3,195,000 1,431,543 452,389 179,268 4,621,810 1,156,000 1,175,000 793,000 129,000 2,605,504 4,203,029 2,719,356 1,382,634 1,305, 141 6,252,474 4,665,980 1,301,483 2,016,560 1,492,674 6,796,351

495,503 522,637 136,656 127,596 237,060 950,600 540, 190 547,756 77,665 1,927,435 737,817 30,550 339, 174 78,461 628,436

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The most important banking establishment in the United States is the Bank of the United States, an institution incorporated for twenty years by Congress, in the year 1816. † The situation, and the general movements of that institution, were fully detailed in the report of the president of the bank to the meeting of the stockholders, 1st September 1831, the greater part of which we here insert.

“ The capital of the bank consists of 350,000 shares, of which 70,000 are owned by the government of the United States. The government originally provided for its subscription by giving to the bank a stock bearing interest at five per cent. This stock has been for some time in a course of redemption, and in July last the whole of it was reimbursed, so that the government has now fully paid for its shares. This capital is divided among the stockholders as follows: DISTRIBUTION, JULY 1831.

Names. Shares. Maine,

14 498 Vermont,

2

27 New Hampshire,

23

501

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The legislature of Pennsylvania, at their session in April 1832, incorporated six additional banks, with an aggregate capital of about 2,750,000 dollars.-ED.

† An act to modify and continue the charter of the Bank of the United States till the 3d of March 1851, passed the senate by a majority of eight votes, and the house of representatives by a majority of twenty-two vofes. It was presented io the president for his approbation on the 4th of July 1832, and on the 10th was returned by bin to the senate with his velo.-ED.

CR.

The capital thus owned is divided for the purposes of business between the bank and the following twenty-five offices:

Capital stock,

35,000,000 00 Portland,

Fayetteville,
Notes issued,

35,811,623 96 Portsmouth,

Charleston,

Discount, exchange and interest, 476,965 51
Boston,

Savannah,
Foreign exchange account,

137,719 56 Providence,

Mobile,
Baring, Brothers and Co., Hottinguer

168,372 72
Hartford,
Natchez,

and Co., and Hope and Co.
Burlington,

New Orleans,
Dividends unclaimed,

251,766 03 New York,

St. Louis,
Profit and loss,

1,750,048 51 Utica,

Nashville,
Contingent fund,

5,613,173 15
Buffalo,

Louisville,

Less losses chargeable to
Baltimore,
Lexington,

contingent fund, 3,452,976 16
Washington,
Cincinnati,

2,160,196 99 Richmond,

Pittsburgh.

Due to Bank U. States,
Norfolk,

and offices,

24,096,888 37

Due to State Banks, “ The number of offices established in 1817 was

2,771,656 00 eighteen; since then two offices have been discon

-26,868,544 37 tinued-Middletown in Connecticut, and Chilli- Redemption of public debt,

483,147 46 cothe in Ohio, and nine others have been established. Deposits on account of Portland in Maine; Burlington in Vermont; Hart

the Treasurer of the

United States, ford in Connecticut; Utica and Buffalo in New

5,505,924 28 York; St. Louis in Missouri; Nashville in Ten- Less overdrafts and spenessee; Natchez in Mississippi; Mobile in Alabama;

cial deposits,

28,420 09 making an addition of seven offices within the last fourteen years. These points were selected out of

5,477,504 19 applications from thirty-eight places. There are

of public offices, 1,291,597 77 now under consideration applications for the estab- Individuals,

9,115,836 47 lishment of branches from more than thirty places

-15,884,938 43 in various parts of the United States.

118,993,323 54 “ The employment of the capital will be seen in the following statement of the condition of the bank The analysis of this account presents the followon the 1st of August.

ing view of the investments of the bank, and the DR.

distribution of its funds. Funded debt, various,

3,497,681 06 The Investments of the Bank.Bills discounted

Capital paid in,

35,000,000 00 personal securi

The circulation,

22,399,447 52 ty, 41,585,298 70

Deposits, public, 7,252,249 42 Fund. dt. 19,700 00

private, 9,115,836 47 6. Bk. stk. 779,458 07

16,368,085 89 -42,384,456 77 Due to individuals in Europe,

168,372 72 Domestic bills of ex

Unclaimed dividends,

251,766 03 change, 14,409,479 72

Contingent fund to meet losses, 5,613,173 15

56,793,936 49 Discount, exchange and interest (inForeign bills of exchange, 121,214 60 cluding foreign exchanges),

614,685 07 Real estate, 2,49 1,892 99 Profit and loss,

1,750,048 51 Due from Bank U. States and offices, 24,586,664 94

82,165,678 89 Due from State Banks, 2,903,402 51

27,490,067 45 Due from United States,

5,267 32 Deficiencies,

DISTRIBUTION.

145,258 67 Banking houses,

1,160,455 54 Expenses,

Funded debt,

3,497,681 06 68,713 34

Loans. Cash, viz. notes of Bank

Personal security, U, S. and offices, 13,412,176 44

41,585,298 70 inded debt,

19,700 00 Cash, viz. notes of the

Domestic bills, State Banks,

14,409,479 72 2,080,442 33

Foreign do. Cash, viz. specie,

121,214 60 11,545,116 51

Bank stock, 27,037,735 28

779,458 07 Mortgages,

Mortgages, 140,956 63

140,956 63 Navy agent, Norfolk,

Debts chargeable to 40,144 17

contingent fund 3,452,976 16 118,993,323 54

60,509,083 88

on

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Real estate,

2,491,892 99 " To accomplish these two objects two things Due from sundry offices and banks 621,523 08

seemed necessary. Expenses, &c.

259,383 50 “ Ist. To make all the local currencies equivalent Banking houses

1,160,455 54 10 specie at the place of their emission. This, by Notes of state banks,

2,080,442 33 rendering them competent for local purposes, Specie,

11,545,116 51 would require a less amount of general currency,

and at the same time tend to reduce the exchanges 82,165,578 89 between distant places to the real commercial ex

pense of transferring equal values of coin. " The bank of the United States was established “2d. To make the bank itself the great channel of for the purpose of restoring specie payments, which those commercial exchanges. had for a long time been suspended throughout “If the bank is bound to transfer the whole public a great part of the country,-of furnishing a sound revenue throughout the union, and to furnish a curcirculating medium, and of giving more uniformity rency payable in various and distant places, it must to the exchanges between distant sections of the obviously provide funds in those places, and these union. By importing more than seven millions of can of course be obtained only by purchasing bills specie, and by a free issue of notes immediately of exchange payable at the points to which the after its establishment, the bank with great sacri. course of irade naturally directs the notes. There fices succeeded for a time in attaining these objects; these bills, having reached their maturity, await but it seems to have been afterwards considered the coming of that portion of the notes, which havthat its powers were exhausted by the effort, and ing performed for a time the functions of a cirthat the continuance of it would be entirely im. culating medium, are carried by the demand for practicable. The essential difficulty was presumed duties out of the immediate sphere of their issue. to lie in the provision of the charter, making the The greater proportion of its funds, therefore, notes universally receivable for debts to the govern which the bank can employ in these operations, the ment, which by obliging the bank to provide pay more readily can it sustain the notes issued in the ment for the same note at various places, would re course of them. It is indeed thus, and thus alone, quire it to retain a greater amount of specie than it that a circle of sound banking operations founded could issue of notes; thus diminishing rather than on sound commercial operations contains within itincreasing the sound circulation. The consequence self the means of its own defence at home, and was, that the bank issued its own notes sparingly; of providing for its notes which the demand for more especially in the southern and western states, duties may carry to a distance. These operations where it often preferred the re-issue of the notes of too are fortunately of the highest benefit to the the state banks; being unwilling to issue freely its community; they give the most direct encouragenotes which it might be compelled to pay at some ment to industry, by facilitating the purchase and one of many places remote from the point of issuing interchange of all its products, they bring the prothem. However imperious the necessity which en ducers and consumers into more immediate contact forced this system, it was apparent that its con by diminishing the obstacles which separate them, tinuance would tend to defeat the object of estab and they specially adapt the bank to the wants and lishing the bank, since by declining the issue of its interests of each section of the union, by making it notes it could not furnish the circulating medium alternately a large purchaser among the sellers of expected from it; and by reissuing the notes of bills, and a large seller among the purchasers. state banks, it surrendered its most efficient means “A participation also in the foreign exchanges of control over the currency. Its whole circulation forms an essential part of the system, not merely as on the 1st of January 1823 was only $4,589,000. auxiliary to the transfer of funds by which the cir

“ Having, in compliance with the directions of the culating medium is accompanied and protected, but stockholders in 1822, applied without success to as the best defence of that currency from external Congress for a modification of this disabling pro- influences. It is the peculiarity of our moneyed vision in the charter, it became necessary for the system, that in many parts of the country the preboard of directors to re-examine the constitution of cious metals are excluded from the minor channels the bank, in order to discover whether there was of circulation by a small paper currency, in consereally any organic defect which prevented it from quence of which the greater portion of these metals performing the functions to which it was destined, is accumulated in masses at the points of most conor whether some different combination of its powers venient exportation. Now with a widely diffused might not overcome its difficulties.

metallic currency, the occasional demands for ex. “The experiment was interesting and hazardous. portation are more gradually felt, the portion exIt was to try how far the institution could succeed ported bearing a small relation to the whole, occain doing that which had never yet succeeded else- sions less inconvenience, and the excesses of exportwhere, in diffusing over so wide a surface of coun- ation can be more readily corrected without injury. try a currency of large amount and of uniform value But when the great mass of the precious metals of at all places and under all circumstances; and also the community lie thus accessible in the banks of whether it could bring down to its extreme limit the the Atlantic cities, liable to be immediately denecessary expense of commercial intercourse be- manded on notes previously issued in the confidence tween distant sections of country, whose exchange of a continuance of the same state of things which able productions were of such various and unequal caused the abundant issue of them; at the first turn values.

in the tide of the foreign exchanges---When the sup

ply of foreign exchange is unequal to the daily de issued freely and exclusively their own notes, takmand, the vaults of the banks may be exhausted ing care to protect and provide for them by the dis. before any precautions can prevent it. These very count of bills of exchange---and they received freely precautions, too, consisting as they do' almost ex the notes of the solvent state banks, with whom peclusively of curtailments in their loans, made sud- riodical and convenient but certain settlements of denly---mostly without concert, and always under accounts were made. the influence of anxiety if not alarm, may fall with “This system has now been in operation for seve. oppressive weight on the community, by the press, ral years. It was at first experimental and of doubture on which alone can be produced the necessary ful issue, and as the consequences were equally re-action. This re-action moreover is necessarily important to the bank and the community, its proslow, since our distance from Europe makes it less gress has been watched with deep solicitude. Its easy to restore the equilibrium than between ad- success, therefore, has been seen with proportionate joining countries in the same hemisphere. As this satisfaction. Time and experience have now dedefect in our moneyed system depends on the legis, monstrated that the bank has been able to accomlature, the bank has no power to remove it, and can plish all the purposes for which it was created, to only strive to guard against its dangers. Its ten- rectify the disorders of the currency, to sustain dency is to produce abrupt transitions, and violent a large and sound circulation, and to reduce the shocks injurious to private credit, and which might commercial exchanges within the most economical prove subversive of the currency. It belongs then limits, and this by means in themselves highly adto the conservative power over the circulating me- vantageous to the community, not in any degree indium which devolves on the bank, not to be a pass. jurious to the state institutions, and at the same ive observer of these movements, but to take an time profitable to the bank itself. The evidences of ample share in all that concerns the foreign ex. this can be best observed by comparing the past changes. It may thus foresee, and either avert or and present situation of the currency, the ex. diminish an approaching danger-it can thus break changes, the country and the bank. the force of a sudden shock, and supplying from its "1. Before the establishment of the bank, the cirown accumulations or its own credits in Europe the lating medium of the middle, western and southern more pressing demands, enable the state institu- states consisted exclusively of an inconvertible tions to provide for their own safety, and thus pro- paper money; every part of that country suffered duce the necessary alteration in the state of the ex- under the most oppressive of all taxes on industry, changes with the least possible pressure upon the a depreciated currency; the commercial exchanges banks or the community.

between different states and even different neigh“In addition to the ordinary causes of fluctuation bourhoods, were burdened with the fluctuations of in the metallic currency, there was another of great their respective representatives of money, while importance in the character of the trade to China the government itself, unable to make its funds and India, which, requiring annually many millions received in one section available for its expendia of the precious metals, very frequently caused ab- tures in another, was embarrassed in the midst of rupt and inconvenient changes in the amount of the its nominal excesses of revenue. These disorders currency and of private credit, by forcing the state are now remedied. The local currencies generally banks to sudden curtailments as an act of necessary are equivalent to specie within their respective self-defence. To abate the pressure of this de spheres of circulation, and a large mass of general mand, the bank offered as a substitute for the ship- currency is superadded for general circulation. ments of coin, to supply its own bills on Europe, That this effect was produced directly by the opewhich in the India and China markets were often rations of the bank requires no demonstration. more valuable than the coin itself. This experi. The extent of its contribution to the general cur. ment proved successful, alike to the merchants and rency, will be seen in the facts. to the community, who were thus less incommoded.

1st, That since January 1, 1823, it has furnished by sudden diminutions of the currency. Owing to to the mint, to be converted into American coin, the operation of general causes, that trade has bullion to the amount of . $12,046,415 35 within a few years greatly declined,--but should it “2d, That the gross circulation revive, the bills of the bank will doubtless constitute of the bank on the 1st of January a considerable portion of the remittances from this 1823, was

4,589,446 90 country. Even in its present comparatively inac And on the 1st of August.1831, 22,399,447 52 tive state, the amount of bills furnished by the bank Making an increase of

17,810,000 62 within the past year for the trade of India, China “From both periods a deduction is to be made of and South America, amounts to $883,500.

the notes in their passage between the bank and “ By this combination of the soundness of the lo- the branches. The total amount known to be in cal currencies, and a thorough identification of the actual circulation on the 1st of August was bank with the real business and exchanges of the $19,377,910. country, it was hoped to accomplish the purposes " This circulation is in all respects equal, and in for which it was established. With this view it most respects superior, in value, to any metallic began by giving to its whole funds an active and currency of the same amount. Indeed there is not business character, for which purpose all the stock now, and probably never has been, in any other exof the bank which had been forfeited was sold, and tensive country, a paper currency comparable to the proceeds applied to the commercial operations this for the union of all the qualities of a good cir. of the country. The bank and the branches then culating medium-perfect security-easy converti

bility into the metals—and general uniformity of are equivalent to specie, it has contributed to make value.

those of the state institutions equally valuable with“The notes of the bank, moreover, not only afford in their respective spheres, and that many of these a sound currency themselves, but they sustain and institutions earn larger profits than the bank itself. purify the much larger mass of circulating medium " 2d. The reduction in the exchanges effected by into which they are infused. By receiving freely the bank from the extravagant charges on internal the notes of the state banks within convenient reach trade to the present moderate limits need not now of the bank and its branches, and by frequent set. be particularized. A single fact will be sufficient tlements with them, these institutions are kept in to illustrate it. Before the bank was organized the the habitual presence of an accountability, which differences of exchange in favour or against Philanaturally induces them so to apportion their issues delphia, in its relations with the other commercial to their means, as to secure the soundness of their cities, was as follows. currency. Of the manner in which they have exe “ With Boston, 17 per cent; with New York, 9š cuted this extremely delicate part of their duty, per cent; with Baltimore, 45 per cent; with which connects them with the state institutions, it Washington, 7 per cent; with Charleston, 65 per is not for the board of directors to speak. But cent. they bear a willing testimony in favour of the up At present these exchanges are generally, either rightness and intelligence which generally charac- at par, or at the utmost, one half of one per cent. terize the administration of those institutions, and " This has naturally followed the rectification of the support which they have always yielded to any the currency, As long as the general circulation measures calculated to maintain the soundness of of the United States consists of specic or its equivthe currency.

alents, the rates of exchange between any two « On the few occasions where it has become neces. places in it can never much, nor permanently vary sary to insist on the performance of their obliga. from the expense of their transportation from one tions, from which either a want of judgment, or the place to another; and a reduction to nearly that rate pressure of urgent necessity had induced them to was the inevitable consequence of the resumption depart, the bank has endeavoured to perform its of specie payments. The bank has, however, been own duty with all the forbearance consistent with able to do more than this. The large mass of its the thorough execution of it, and those institutions operations in exchanges, by giving to it funds in themselves, have generally found in the increased various parts of the union which the course of its credit arising from fidelity to their engagements, own business, as well as that of the government, a full compensation for all the temporary inconve- requires to be transferred, furnishes it with the nience which that fidelity required. It is indeed means of transferring at the same time the proconfidently believed that the solvent state institu- perty of individuals at a very reduced expense. tions, recognize in the bank its true character, as Accordingly funds are transferred to the remotest a common friend, not a jealous competitor; and points of the union, sometimes at no expense whatthat the good feelings uniformly entertained for ever, and always with charges so moderate, as to them by the bank, are reciprocated. They know afford facilities of interior communication, proba. that the duties of its position make it only a more bly not equalled by those of any other country. prominent agent in preserving the soundness of the " The following table exhibits the amount of docurrency, on which their own stability and pros- mestic and foreign exchange purchased at the bank, perity equally depend; and that if its competition and the several branches, the amount of the drafts sometimes appears to prevent more abundant furnished by them on each other respectively, and profits, they find an indemnity in the general secu the amount of transfers made on account of the rity of property which its operations are designed government, during the year ending on the 1st of to protect. Undoubtedly these operations have July last. been so far beneficial to them, that if its own notes

TABLE LXIV.

Statement exhibiting the Exchange operations of the Bank of the United States and Offices, for the year end

ing June 30, 1831.

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