Ernesto Hernandez Rodriguez Deacon Orr Economics October 9, 2012 President Andrew Jackson Vetoes Bank Bill—July 10, 1832 President Andrew Jackson veto against the bank bill is truly a communication to Congress but it is also like a political manifesto. He states that the privileges possessed by the bank are unauthorized by the Constitution, subversive of the rights of the States, and dangerous to the liberties of the people. In McCuloch v Maryland, the court turned to the “necessary” and “proper” clause which grants Congress enumerated powers which include the power to regulate collect taxes.
President Jackson explains the necessity in regards to the functions that the bank is trying to fulfill: The “degree of its necessity,” involving all the details of a banking institution, is a question exclusively for legislative consideration (Jackson). It is not question for the judicial department. As stated in the Constitution the one that has the job to determine what is “necessary” in cases where the law is not prohibited or really calculated, is the legislative department. President Jackson gives major points in describing the reason why the bank was not “necessary” and “proper”.
At first the bank was established by Congress because of the power to determine what was necessary. But in the years 1816 and 1832 Congress proposed and took away from their successors the power of establishing banks for twenty years and then for fifteen years more. This contradiction that Congress did of bartering away or divesting itself from the powers is unconstitutional because of using discretion upon itself; Congress was limiting the discretion of their successors. And the Constitution does not grant Congress the power to inflict this in itself. The bank affected the rights of the Sates in a subversive way.
It gave up, surrendered the right of the States to tax the banking institutions. Under the operation of this act resident stockholders and citizens would be taxed 1 per cent. Stock held in the States would be subject to taxation, meanwhile stocks from the branches and those foreign stockholders would have been exempted from this burden. Their annual profits would be 1 per cent more than the citizen stockholders. As annual dividends of the bank estimated at 7 per cent, the stock would be worth 10 or 15 per cent more to foreigners than to citizens of the United States.
Another important aspect was the benefits foreign stockholders received through this act. Not only citizens received bounty from government, more than eight millions of the stock was held by foreigners. And the bank act would not permit competition in the purchase of this monopoly. A fourth part of the stock is held by foreigners and the residue is held by a few hundredths of US citizens, chiefly of the richest class. As annual dividends of the bank estimated at 7 per cent, the stock would be worth 10 or 15 per cent more to foreigners than to citizens of the United States.
Of the twenty-eight millions of private stock in the corporation, $8,405,500 was held by foreigners, mostly Great Britain. The amount of specie drawn from those States through its branches within two years was about $6,000,000. More than a half a million of this amount passes on to Europe to pay the dividends of the foreign stockholders. When by a tax on resident stockholders the stock of this bank was made worth 10 or 15 per cent more to foreigners than to residents. The bank would have sent across the Atlantic from two to five millions of specie every year to pay the bank dividends.
Shockingly almost one third of foreign stock that was not represented in elections curtails the suffrage of the directors. The entire stock would have serious chances to fall into the hands of few citizen stockholders causing temptation to secure the control in their own hands by monopolizing the remaining stock. There was also a danger that a president and directors would then reelect themselves from year to year without the responsibility to control manage the whole concerns of the bank. The American people would have suffered an adverse effect in many ways. This ct excludes the whole American people from competition in the purchase of this monopoly and dispose of it for many millions less than it is worth. The fourth section provision secures to the State banks a legal privilege in the Bank of the United States which is withheld from all private citizens. There was a lack of equality when paying with notes. A State bank that had notes by a particular branch could pay the dept to the Bank of the United States with those notes, but a citizen couldn’t pay with those notes but must have sold them at a discount or sent them to the branch to be cashed.
This does not measure out equal justice to the high and the low, the rich and the poor. The president of the bank said that most of the State banks existed by its forbearance, the abstention of enforcing the payment of the debt. The influence of the self elected directory which is identified with those of the foreign stockholders may become concentered in a particular interest that could affect the purity of elections and the independence of the country when it goes to war.
Their influence could have been so great as to influence elections and control the affairs of the nation. Works Cited Jackson, Andrew. «Miller Center. » 10 de July de 1832. Miller Center. Monday October 2012. <http://millercenter. org/scripps/archive/speeches/detail/3636>. McBride, Alex. «pbs. » s. f. The Supreme Court. Monday October 2012. <http://www. pbs. org/wnet/supremecourt/antebellum/landmark_mcculloch. html>.
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