Osborn v. Bank of the United States
Encyclopedia
Osborn v. Bank of the United States, 22 U.S. 738
(1824), was a case set in the Banking Crisis of 1819
, during which many banks, including the Second Bank of the United States
, demanded repayment for loans which they had issued on credit that they did not have. This led to an economic downturn and a shortage of money. In 1819, Ohio
passed a law which put a tax on the Bank of the United States, the theory being that if a bank were taxed it would allow the state government to receive and distribute the scarce money. On September 17, 1819, Ohio Auditor Ralph Osborn
was given permission to seize $100,000 from a branch of the Bank of the United States. However, his agents mistakenly took $120,000, the extra $20,000 of which he promptly returned. The bank chose to sue Osborn for the return of the additional $100,000, and a federal court ruled that Osborn violated a court order prohibiting the taxing of the bank. Osborn argued that he had never been properly served with this order, but still had to return the money. A problem arose when Osborn could only pay back $98,000, as the other $2,000 had been used to pay the salary of Osborn's tax agents. In 1824, the Supreme Court of the United States
ruled in favor of the Bank of the United States, ordering the return of the disputed $2,000.
Case citation
Case citation is the system used in many countries to identify the decisions in past court cases, either in special series of books called reporters or law reports, or in a 'neutral' form which will identify a decision wherever it was reported...
(1824), was a case set in the Banking Crisis of 1819
Panic of 1819
The Panic of 1819 was the first major financial crisis in the United States, and had occurred during the political calm of the Era of Good Feelings. The new nation previously had faced a depression following the war of independence in the late 1780s and led directly to the establishment of the...
, during which many banks, including the Second Bank of the United States
Second Bank of the United States
The Second Bank of the United States was chartered in 1816, five years after the First Bank of the United States lost its own charter. The Second Bank of the United States was initially headquartered in Carpenters' Hall, Philadelphia, the same as the First Bank, and had branches throughout the...
, demanded repayment for loans which they had issued on credit that they did not have. This led to an economic downturn and a shortage of money. In 1819, Ohio
Ohio
Ohio is a Midwestern state in the United States. The 34th largest state by area in the U.S.,it is the 7th‑most populous with over 11.5 million residents, containing several major American cities and seven metropolitan areas with populations of 500,000 or more.The state's capital is Columbus...
passed a law which put a tax on the Bank of the United States, the theory being that if a bank were taxed it would allow the state government to receive and distribute the scarce money. On September 17, 1819, Ohio Auditor Ralph Osborn
Ralph Osborn
Ralph Osborn was the state auditor of Ohio who served as plaintiff in the Supreme Court case Osborn v. Bank of the United States.-References:...
was given permission to seize $100,000 from a branch of the Bank of the United States. However, his agents mistakenly took $120,000, the extra $20,000 of which he promptly returned. The bank chose to sue Osborn for the return of the additional $100,000, and a federal court ruled that Osborn violated a court order prohibiting the taxing of the bank. Osborn argued that he had never been properly served with this order, but still had to return the money. A problem arose when Osborn could only pay back $98,000, as the other $2,000 had been used to pay the salary of Osborn's tax agents. In 1824, the Supreme Court of the United States
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
ruled in favor of the Bank of the United States, ordering the return of the disputed $2,000.