Tag Archives: Banks
the principle of rotation established by the legislature in the body of Directors in the principal bank [Bank of the United States], it follows that the extension of that principle [to subordinate banks] … was wise & proper … it breaks in upon the esprit de corps so apt to prevail in permanent bodies, it gives a chance for the public eye penetrating into the sanctuary of those proceedings & practices which the avarice of the directors may introduce for their personal emolument … and it gives an opportunity at the end of a year, or at other periods, of correcting a choice which on trial proves to have been unfortunate …
To Albert Gallatin, December 13, 1803
Patrick Lee’s Explanation
Realistic leaders do not trust permanent office-holders.
Congress provided in 1791 that no more than 3/4 of the 25 directors of the national bank could be re-elected for a second year. The President applauded the extension of that principle to its regional branches, for three reasons:
1. It broke up the good-old-boy network arising among those who can hold office forever.
2. It allowed the public to examine their practices, especially those designed to enrich themselves.
3. It provided the opportunity to correct an appointment that had “been unfortunate.”
As a general rule, Jefferson opposed all offices and appointments that were permanent and thus shielded from public accountability. He thought Supreme Court justices should be subject to periodic review. The same principle should apply to national bank directors.