The opposition to the scheme was led by Madison and came from the southern states.
The law provided for a Bank of the United States, located at Philadelphia, capitalized at $10,000,000, with shares at $400 each, subscriptions payable one-fourth in specie and three-fourths in United States securities bearing 6 per cent interest and payable within two years. The United States government subscribed $2,000,000, which sum was loaned by the bank to the government, the loan to be repaid in ten annual instalments. Thus the payment of the government subscription was effected by what were virtually stock notes - a very faulty banking operation. The subscriptions in government securities were thought to give the bank a wider basis for note issue than would otherwise have been possible, as it would have been difficult to assemble $10,000,000 in gold.
The bank was privately controlled by a board of directors of 25 members, one-fourth of whom at the end of each year became ineligible for re-election. Stockholders in foreign countries could not vote by proxy. The votes allowed per share decreased with the increase in the number of shares held by any one stockholder, thus providing for decentralized control, and no subscription, save that of the government, was to exceed 1,000 shares.
The bank was authorized to issue notes which were a legal tender in payment of all debts to the United States. The bank's debts were limited to the amount of the capital. This limitation could be exceeded only by authorization of Congress, and the directors were personally liable for the excess. The bank was forbidden to trade in merchandise, it was permitted to sell - but not to buy - United States securities, and its real estate investments were limited to its bank buildings and site. The bank was to make no loan to the United States in excess of $100,000, nor to any state in excess of $50,000, nor to any foreign country without the authorization of Congress. The maximum rate for loans and discounts was fixed at 6 per cent. The directors were empowered to establish branches within the United States. The bank was required to report its condition to the Secretary of the Treasury at his demand, but not oftener than once a week. The Secretary of the Treasury had the right to inspect the books of the bank. The charter ran for twenty years and meanwhile the government was to establish no other bank.
In 1792 the bank established in the chief cities of the country eight branches, among which the $10,000,000 capital was apportioned.
Bank notes were issued by the parent bank and its branches in denominations of $5 and more, the total amount in circulation at any one time never exceeding $6,000,000. As the parent bank refused to redeem the notes of its branches, this forced each branch to be self-reliant and tended to prevent overextension; this policy also relieved the parent bank from a sudden demand for large payment at any one of its branches. The bank used "half-notes" and "post-notes" to make payments at a distance. As these notes circulated widely, they had a salutary effect in restraining the overissue of notes by state banks.