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Tuesday, May 21, 2019

General George Washington and the Bank of England

There is substantial evidence to support the inference that Washington, for one, did not view “private business pursuits . . . with foreign state-chartered trading companies” as emoluments. [DC & MD v. TrumpCiv. A. No. 17-cv-1154-EGS, at *23 & *27 (D.D.C. Apr. 30, 2019) (Sullivan, J.)] During the Revolutionary War, George Washington owned stock in, and received dividends from, the Bank of England.[1] This foreign corporation received its charter by operation of an act of the English Parliament: the Tonnage Act of 1694.[2] The Bank of England, which was analogous to the first Bank of the United States,[3] served as the private banker for the British Exchequer.[4] More importantly, the Bank of England was analogous to the foreign government “instrumentalit[ies]” that Plaintiffs allege Trump-affiliated commercial entities are doing business with.[5]
At the relevant times, the Articles of Confederation governed our young republic. That charter included a Foreign Emoluments Clause, which provided “[N]or shall any person holding any office of profit or trust under the United States, or any of them [i.e., any State], accept of any present, emolument, office or title of any kind whatever from any King, Prince or foreign State . . . .”[6] Furthermore, the Continental Congress had chosen Washington as the commander-in-chief of the nation’s armed forces. As an appointed military officer, he held an “office . . . under the United States,” and could not “accept of any . . . emolument” from a “foreign State.”
If the Court’s analysis were correct, then General Washington would not have been permitted to accept distributions—a “profit, gain, or advantage”—from the Bank of England, a “foreign state-chartered . . . company.” [DC & MD v. TrumpCiv. A. No. 17-cv-1154-EGS, at *23 & *27 (D.D.C. Apr. 30, 2019) (Sullivan, J.)] But he did. Nor was Washington a passive beneficiary of bank-related benefits. For example, throughout the Revolution, Washington’s personal London representatives, at his instructions, transferred such monies out of the Bank of England, to make payments to his creditors.[7] Thus Washington was not a mere passive recipient of automatic distributions; rather, he made timely use of sophisticated foreign commercial agents who actively “accept[ed]” dividend income on his behalf during the war. After peace was made, Washington took action to close the account and to repatriate the funds from the Bank of England account.[8]
Amici know of no evidence that any contemporaries or that any subsequent historians or legal scholars suggested that these transactions violated established law. This absence of debate reaffirms DOJ’s position that “substantial ground for difference of opinion” exists with respect to how Washington, and those in the early Republic, understood the term emolument. The better reading is that during the Founding era, an emolument was tied to lawfully authorized office-related or employment-related compensation.




[1] See Bryan Jones, The Farming Game 151 (1982); Eugene E. Prussing, George Washington, Captain of Industry/The Bank of England Stock—The Bank of the United States, 70(5) Scribner’s Mag. 549, 554, 556–57 (Nov. 1921); see also Sol Bloom, Our Heritage: George Washington and the Establishment of the American Union 210 (1944); Thomas Bayard McCabe, Central Banking’s Role in Our Free Enterprise Society 17 (1951).
[2] Robert J. Reinstein, The Limits of Congressional Power, 89 Temp. L. Rev. 1, 11 n.53 (2016).
[3] See Ron Chernow, Alexander Hamilton 347 (2004).
[4] See Our History, Bank of England, https://perma.cc/B7FQ-Y5QA; see also Robert E. Wright, The Wealth of Nations Rediscovered 13 (2002).
[5] See Plaintiffs’ Amend. Compl., ECF No. 14, at ¶¶ 56, 59, 62, 65, Part VI/Prayer For Relief.
[6] Articles of Confederation of 1781, art. VI, para. 1. Textually, the Confederation provision was very similar to the Foreign Emoluments Clause now in force under the United States Constitution. Accord U.S. Const. art. I, § 9, cl. 8 (“[N]o Person holding any Office of Profit or Trust under them [i.e., the United States], shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.”).
[7] See Bloom, supra note 1, at 210; Letter from George Washington to Robert Cary & Co (May 1, 1759), Founders Online, https://tinyurl.com/yy3arfaf.
[8] See Bloom, supra note 1, at 210; Prussing, supra note 6, at 556. 


The above is an extract from my just-filed amicus brief: 
Brief of Scholar Seth Barrett Tillman and Judicial Education Project as Amici Curiae in Support of the Defendant’s Supplemental Brief in Support of his Motion Pursuant to 28 U.S.C. § 1292(b) for Certification of the Court’s Denial of Motion to Dismiss and Defendant’s Motion to the Stay, Senator Richard Blumenthal v. Donald J. Trump, in his official capacity as President of the United States of America, Civ. A. No. 1:17-cv-01154-EGS (D.D.C. May 21, 2019) (Sullivan, J.), ECF No. 73-1, ____ WL _______, 2019 U.S. Dist. Ct. Briefs LEXIS __, <https://ssrn.com/abstract=3381838>. 


Seth Barrett Tillman, General George Washington and the Bank of England, New Reform Club (May 21, 2019, 4:05 PM), <https://reformclub.blogspot.com/2019/05/general-george-washington-and-bank-of.html>. 

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3 comments:

Anonymous said...

If staying at the Trump Hotel is an emolument, I don't see how a foreign entity purchasing one (or more) of Obama's books isn't as well.

Seamus said...

But the Bank of England at that time was a privately held entity (as the fact that Washington held stock in it should illustrate), not part of the British government. (It wasn't nationalized--or should I say nationalised--until 1946.)

Seth Barrett Tillman said...

I responded inline in square brackets. Seth