Terms of Charter
The Second Bank of the United States was America's central bank, comparable to the Bank of England and the Bank of France, with one key distinction – the United States government owned one-fifth (20%) of its capital. Whereas other central banks of that era were wholly private, the BUS was more characteristic of a government bank.
Under its charter, the Bank had a capital limit of $35 million, $7.5 million of which represented the government-owned share. The central bank was required to remit a "bonus" payment of $1.5 million, payable in three installments, to the government for the privilege of using the public funds, interest free, in its private banking ventures. The institution was answerable for its performance to the US Treasury and Congress and subject to Treasury Department inspection.
As exclusive fiscal agent for the federal government, it provided a number of services as part of its charter including: holding and transfer of all US deposits, payment and receipt of all government transactions, and processing of tax payments. In other words, the BUS was "the depository of the federal government, which was its principal stockholder and customer".
The chief personnel for the Bank comprised twenty-five directors, five of whom were appointed by the President of the United States, subject to Senate approval. Federally appointed directors were barred from acting as officials in other banks. Two of the three BUS presidents, William Jones and Nicholas Biddle, were chosen from among these government directors.
Headquartered in Philadelphia, Pennsylvania, the Bank was authorized to establish branch offices where it deemed suitable and these were immune from state taxation.
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