FOR a period of twenty-one years, 1816 to 1836, inclusive, the annual income of the National Treasury usually exceeded expenses and in most years the excess was very substantial. The revenues were derived chiefly from customs duties, as the internal revenue taxes were repealed in 1818.
There was not a year during the period in which there was not a net reduction in the public debt.
In order to remedy the impossible banking and currency situation referred to in the last chapter, resulting from the elimination in 1811 of the first Bank of the United States, it was deemed advisable to charter another national bank. Accordingly the second Bank of the United States was chartered with an authorized capital of $35,000,000 and went into operation on January 1, 1817.
The United States subscribed for one-fifth of the capital stock and the bank agreed to pay $1,500,000 to the United States in consideration of the exclusive privileges conferred on the corporation. These privileges were that during the life of the bank no other bank should be established by authority of the United States except in the District of Columbia. The notes of the bank, payable on demand, were to be received in all payments to the United States and the deposits of the moneys of the United States were to be made in the bank or in its branches, unless the Secretary of the Treasury should at any time otherwise order and direct.