FIRST BANN OF THE UNITED STATES Hamilton as Secretary of the Treasury proposed a national banlc in his report for 1790. Contrasting the superiority of the pro posed bank to an emission of United. States notes, Hamilton pointed out that the right to issue paper of this character was °so certain of being abused that the wisdom of the gov ernment will be shown in never trusting itself with the use of so seducing and dangerous an experiment.) The proposed plan was arranged under 24 heads. The capital of the proposed bank was fixed at $10,000,000; one-fourth of all the pri vate and corporate subscriptions was to be paid in gold and silver and three-fourths in United States stock bearing 6 per cent interest. Two million dollars were to be subscribed by the United States, a loan of equal amount being made in return by the bank, which was to be reimbursed in 10 equal annual instalments in money or in the bonds of the government in a manner similar to that pursued by the Brit ish government upon the organization of the Bank of England; or, as Mr. Hamilton de scribed the operation, by ((borrowing with one hand what is lent with the other.) The board of directors of the bank was to consist of 25 persons, not more than three-fourths of them to be eligible for re-election in the next suc ceeding year. The bank had authority to loan on real estate security, but could only hold such real estate as was requisite for the erec tion of suitable banking houses or should be conveyed to it in satisfaction of mortgages or judgments. No stockholder, unless a citizen of the United States, could be a director and the directors were to give their services with out compensation. The bills and notes of the bank were made receivable in payment of all debts to the United States. The total amount of debts which the corporation might at any time owe in any way, except for moneys ac tually deposited in the bank for safe-keeping, was never to exceed $10,000,000 and if this limit was exceeded the directors under whose administration the excess might occur were to be personally liable for the amount. The cor
poration was allowed to sell the evidences of the public debt subscribed to its stock, but was not to purchase any public debt whatever. Notes were allowed to be issued, payable to any person or persons, assignable and nego tiable, or to bearer assignable by delivery. The directors were permitted to establish of fices for discount and deposit only, wherever they should think fit in the United States. A report of the condition of the bank was to be furnished whenever the Secretary of the Treas ury required it, but not oftener than once a week The charter was to expire 4 March 1811.
Although the bill for chartering the bank was opposed by Madison and Jefferson, as well as by Randolph, the Attorney-General, Hamil ton's wishes prevailed and the bill for chartering the bank became a law 25 Feb. 1791.
Operation of the The bank went into operation very soon after the act author izing it became a law, and before the govern ment subscription of $2,000,000 was paid; a dividend of 4 per cent was declared in July 1792. The manner of paying the government subscription was as follows: The President drew bills of exchange on Holland, where money borrowed in that country under the laws of 4 and 12 Aug. 1790, was lying available. These were handed to the bank and the latter issued $2,000,000 in its stock Immediately the bank loaned $2,000,000 in its own bills to the Treasury and received $2,000,000 of United States stocks bearing 6 per cent interest, and payable in 10 equal annual instalments begin ning in 1793. The bank was very well managed and was of great benefit to the government and the people at large. It assisted the Treasury with loans whenever called on and it forced the State banks to keep their issues within reason able bounds. It received and disbursed more than $100,000,000 of public moneys without the loss of a dollar.