ALTHOUGH a great deal has been wrote on the subject of the Bank, which has engrossed much of the po­litics of the State, and no small share of the conversation of the town; and although an ho­norable Gentleman, who is a great stockholder, and, therefore, very naturally, a great champion for the Bank in the House of Assembly, has said, that he imagines "sufficient light has been thrown upon the subject," yet I cannot help thinking that there is still room to say something upon it, and that without going "the old ground over again."

It would be ungenerous, and unworthy the character of that Gentleman, to suppose that he entertained a wish to stifle any further enquiry, in order to bring the Members to an immediate decision upon that subject. But as one of the [Page 2] writers in favor of the Bank has been candid enough to acknowledge, that "the directors were engaged in a business in which they had no experience (nothing of the kind having ever before been practised in America) and though they acted with the greatest considera­tion, care and caution possible; yet all this not­withstanding, 'tis hardly supposable but some errors in management must have been committed." I say, if this has been the case, there is nothing presumptuous in supposing, that there may be some very worthy and reputable Members, who are very deserving, and very well qualified to fill the seat which they hold in that honorable House, who nevertheless may wish for further in­formation on this subject; their thoughts and attention having been employed another way.

In what I have to offer on this subject it is not my intention to run out into a laboured pane­gyric on the utility and importance of Public Cre­dit to a nation, as some of the writers in favor of the Bank have done; though I am as well con­vinced of both as any of them. My reason for declining it is, because the Bank is a thing that has very little to do with it.

Public Credit entirely depends upon the faith kept by the Government with the Public, in the strict and punctual discharge of her pecuniary obligations.

The Bank is a private trading company, principally in the hands of four or five persons; who, it is true, have their own private credit to support, but at present they have no connection whatsoever with the credit of the Government.

Neither is it my intention to go into an in­vestigation of the powers of Government and of [Page 3] the Assembly to give or to take away charters of incorporation, highly lucrative to private in­dividuals; whereby the situation of Government is given to those individuals, not only without any adequate consideration, but without any consideration at all.

I purposely omit going into this investigation, because, if I should be able to prove that one Assembly had not power to repeal a law which a former one had imprudently passed, this might be proving too much; because it might be made use of to prove, that a future Assembly had no power to alter what a former one had repealed.

Setting aside these topics, therefore, I mean to confine myself to a very few points; and the point I mean chiefly to insist on is to con­sider, how far the constitution of the Bank is consistent with the Government and with the present state of trade and commerce in this country.

This is a subject that has been but lightly if at all touched upon, and in the pursuit of it I mean to be as candid and as impartial as possible. I shall carefully avoid all personalities, and as I profess to be of no party, having the supreme felicity of being friends with all, I shall as care­fully avoid all party distinctions.

And first then, with regard to the question, how far the constitution of the Bank is consistent with the Government. In order to determine this question, it is necessary to draw a parallel betwixt them.

The constitution of this country, and of this State in particular, is well known to be Repub­lican. The Members of the Assembly are cho­sen [Page 4] annually, by the freemen thereof, but no member is eligible to serve for more than four years in seven, nor has any inhabitant, let his property be ever so great, more than one an­nual vote.

The directors of the Bank are few in number, only twelve. It is true, they are chosen an­nually, but every proprietor has as many votes as he has shares. Hence a few great stockhol­ders have the power of perpetuating their own election, and that of their friends. Nor is there any provision made for a change or succession, by way of rotation. It is not in any respect de­pendent on Government. Here, therefore, is not only a monopoly, but an aristocracy, formed of a most formidable kind, a monopoly which, by the acquisition of the sanction of Govern­ment, will be capable of absorbing all the wealth of the United States. And, as wealth creates influence, it is impossible to tell how far their influence may extend. So much for the constitution of the Bank.

Now with regard to the second question, viz. How far the present Bank is consistent with the present state of trade and commerce in this country, it may be necessary to take a some­what wider range, in order to inquire into the state and condition of other Banks that have been instituted in Europe.

If we look abroad, we find the four most an­cient and most considerable Banks to be those of Amsterdam, Venice, Hamburgh and Genoa. The three first of which are all in the hands and, consequently, in the interest of their respective Governments. The Bank of Genoa was an ex­ception. Machiavel, in his history of Florence, [Page 5] tells us, "that a war with the Venetians occa­sioned that Government to borrow great sums of the citizens, for the payment of which they con­signed to them their customs, and incorporated them into a Bank, which had the palace over the custom-house for their meeting, they had a Council of Hundred, and a Magistracy or Di­rectors of Eight, and divided their credit into loqui or shares in stock, and the body thus con­stituted bore the name of St. George, as the Government had the name of the Commonalty."

This Commonalty, or Commonwealth, had a further occasion for a loan, and applied to St. George, then grown rich, and the ablest, if not the only lender, and for that they mortgaged to it some lands and towns, as they had done the customs before. What was the consequence?

Machiavel tells us, that most of these towns and lands, (that were in mortgage to them) for­merly subject to the Genoese, submitted to them. The Historian adds, " And they (St. George) governed and defended them, (the towns and lands) and every year, by public vote, sent their rectors; and the Commonalty (that is the Government) of the city was no way concerned." He goes still further, "Whence," says he, "it came to pass that those citizens have taken away their love to the Rules of the Commonalty, as a thing usurped and tyrannized, (though the ancient constitution) and placed it on St. George, as a Rule well and equally administered."

I should not have said so much had not the Hi­storian in a manner compelled me to it; but now, since the murther is out, I cannot refrain from giving you his conclusion, "Whence," says he, "(that is from the Bank's administration) arises [Page 8] the frequent and easy change of Government, and that sometimes they obey a citizen, and sometimes a stranger."

I must however do our Bank the justice to say, that she differs widely from the Bank of St. George at Genoa, and that in almost every in­stance. When the monied men in England first solicited an establishment of a Bank by Act of Parliament, the argument made use of in favour of it, was not only a present loan, but a great show of future services. But what does the pre­sent Bank of North America offer? Why she institutes no loan in favour of the Government. She is of a more provident and selfish nature, she is willing to gain all she can from the sanction of Government, but she is not willing to give her any assistance in return. On the other hand she endeavours to thwart the operations of Go­vernment as much as she can, and incessantly sets herself up in opposition to the Government.

But, secondly, Among the Banks I have men­tioned, which are in the hands of their respective Governments and pursue their interest, there are none of them that issue notes payable in specie to bearer upon demand. And yet, perhaps, this is the circumstance that recommends the Bank in this city to most people. What is the reason, they do not issue notes payable in specie? Why, the reason is, because they have the interest of their country at heart.

The Bank of Amsterdam is one of the oldest as well as one of the most considerable in Europe, having subsisted now for near two centuries. She receives coin, but she never pays any. There are indeed cashiers or brokers always at­tending who are ever ready to exchange cash [Page 7] for Bank credit; and what is remarkable, is, that this Bank credit is generally upon an ave­rage from three to five per cent. better than the specie itself. The reason why this Bank never pays in specie, is, because she knows very well, that if she was to pay in coin, her country would soon be drained of it. England is the only country in Europe, and I believe I may say, in the world, where Banks can subsist issuing notes payable to bearer in specie upon demand. What is the reason of it, why she is the only country whose trade is so well protected by laws, that there is never a reflux, but always an influx of wealth, constantly coming into her. France indeed, following the example of England, has within these few years instituted a Bank, issuing notes payable upon demand. The Bank I mean, is the Caisse d'Escompte, or Bank of Paris. What was the consequence? Why, let us read the following extract of a letter from Paris, bearing date the 27th of September, 1783.

"The administrators of the Caisse d'Escompte having represented to the King, that in conse­quence of the scarcity of cash in their hands, oc­casioned by the circumstances of the war, which have prevented the annual and regular importa­tion of gold and silver, at the same time that specie has been exported, they, in order to sup­port commerce, and above all that of the city of Paris, where the scarcity has been particular­ly felt, have recurred to the resource which Go­vernment allowed them, in authorising the establishment of the Caisse d'Escompte—That their zeal to assist commerce has induced them to discount such bills of exchange, and good deeds on individuals, as have been presented [Page 8] to them, and have paid those bills of exchange in cash, or in notes of their Bank payable to the bearer—That the confidence of the public in this Bank, has led them to augment the number of these notes in proportion to the wants of com­merce; but the resource, by which trade has been so greatly benefited and specie thrown into circulation, being retarded in its effects, the Caisse d'Escompte will be prevented, for a time, from continuing to the public the facility of discount, by the impossibility of issuing specie, and even if being able to give cash for their notes, when they are presented in too great quan­tity, unless provision is made by his Majesty." How extremely similar, in some respects, is the situation of America, with that of France, at the time alluded to; but further: "It does not appear, however, that any further means are wanting there until the first of January next, a period, when it is expected that the cir­culation of specie will be re-established. They therefore pray his Majesty's protection. In con­sequence whereof, the King ordains, that all the notes of the said Bank shall have circulation till that time in the city of Paris, and be received in payment as before, and that no prosecutions shall take place on account of their non-pay­ment at the Bank. At the same time a severe edict was issued, to prevent the exportation of gold and silver for a limited time."

Here we see, in a very striking manner, the bad effects of a wrong balance of trade upon a Bank paying in specie, even in so great a kingdom, as that of France where specie abounds, even though this wrong balance was but temporary. But let us proceed—

"On the fourth of that same month a new edict [Page 9] of the King appeared, opening a loan of twenty-four millions of livres, for which his Majesty offered sixty thousand tickets of a new lottery, price four hundred livres each, which makes in all the twenty-four millions wanted. The pur­chasers of these tickets, in order to favor the Bank, had the option of paying half the four hundred livres in notes issued by the Caisse d'Es­compte. The lottery was to be drawn during the space of eight years, and the adventurers were to run no risque, as the holders of blanks were to be allowed the principal and interest of their money." Here surely is a most extraordi­nary instance of Royal interposition in favour of a Bank. What was the consequence?

Why, notwithstanding all this, so great is the effect of natural causes that on the first of October following the Bank of Paris, called the Caisse d'Escompte, stopt payment, which occasioned the utmost consternation and horror throughout that city.

The fact is, that no Bank issuing notes payable in specie upon demand can hold their station long in any country where there is a strong ba­lance of trade against that country, let her be reinforced by Royal Edicts or entrenched in Charters, or let her do what she will.

The case is plain and obvious—For sup­posing that balance against that country to be a Million of pounds, or a Million of dollars per annum, or what you will, is it not plain that so much money must be sent out of the country every year as that balance amounts to, in order to pay that wrong balance?

But, it may be said that money comes into the country every year, as well as it goes out of it. Well then, let us suppose that Half a Million is [Page 10] imported annually. Why then the account will stand thus: Half a Million being imported, and a Million going out, this will just make Half [...] Million of cash of which the country [...] drained every year.

If only half a Million, therefore, [...] what is imported goes out every [...] years the country will be drained of two [...] and a half, in ten years of five Millions, [...] so on.

How then is this demand for cash for expor­tation to be supplied? Why, surely, no where so readily as at the Bank; for as the Bank is the common receptacle for money, and as she issues her notes payable in specie to bearer upon de­mand, is it not in the power of every one who gains possession of these notes to go with them and to demand payment for them at the Bank, and considering how the Bank is constituted at present, is it in her power to refuse? Surely not, for the moment she does, that moment she stops payment, and there is an end put to her opera­tions at once. The Bank therefore facilitates the exportation of money, but she not only fa­cilitates the exporation of money in general, but particularly of the best pieces. That this is no idle supposition I myself can witness, for I have known persons keep accounts with the Bank merely for the purpose of drawing out the best of the specie. Thus by paying in their own notes and then drawing for specie, they have se­lected the best and so paid the remainder back, and thus after repeated drawings, they have been able to get possession of all the best pieces, in order to send them abroad.

But it may be said, that when the Bank finds an extraordinary demand of cash for exportation [Page 11] it is her custom to stop discounts. That is, in hopes that this demand will cease, after the sail­ing of a particular vessel, or of a packet for Eu­rope, she, for the present, puts a stop to her profits as well as her out-goings, and, in fact, shuts up shop; for as her profit arises from the discounting of bills, the moment she puts a stop to this, that moment she puts a stop to the pro­fits of her trade. And yet this is far from being any remedy for the evil complained of; the de­mand for cash to send abroad still subsists and is not supplied, and it only tends to make peo­ple, who have occasion for this money, more artful, by beginning to draw upon the Bank a little earlier. I shall say nothing of the great advantage that those have, who are concerned in the Bank, in trading with the Bank's money, which gives them a great advantage over other traders, in buying lands, in making use of the specie of the Bank for their own remittances, and in the preferences which they have an op­portunity of giving to their friends; all of which are matters of the greatest importance. Suffice it to say, that if the prayer of the Bank's petition was granted, and the charter restored [...]on the footing it was before, it is impossible, in the na­ture of things, that it could afford any thing more than a temporary relief, by creating a tempo­rary confidence: indeed, like the King of France's edict in favor of the Caisse d'Escompte, it might induce some to bring their cash to the Bank; but the same cause existing, viz. an unfavorable balance of trade, and that still ope­rating against her, the same distress must soon recur, from which she must necessarily find her self involved in as much difficulty as before.

[Page 12] But this method of stopping discounts ap­pears to me, I confess, a most extraordinary ex­pedient; and such a one, as in any other country would be considered as little short of committing an act of bankruptcy. It is extraordinary, be­cause it is not her interest to do it; and because, upon the principles upon which she is consti­tuted, it is what she is not justifiable in doing. Banks are the servants of the public, and their institution is intended for the facilitating circu­lation and for the promotion of trade, and the profits they receive for the discounting of bills are the wages they receive for performing that of­fice. To refuse therefore to discount good bills, unexpectedly, and at a time perhaps when they are most wanted, is defeating the very purpose for which they were instituted. It is a tacit acknowledgment, that they either want cash, or that they want credit; and it is giving a vital stab to circulation and trade. When they do this, it demonstrates that the confidence that was placed in them by their customers was mis­placed, and that they have received wages for performing an office, which, at the time when their assistance was most wanted, they took the liberty to decline. Hence it is that we see so many running about the streets with distraction and desperation in their countenances; and hence it is that so many have been obliged to stop payment who had reckoned upon having their bills discounted as a sure resource.

But it may be said that the profits of the Bank must be considerable, notwithstanding their stopping discounts, because they have made large dividends. Large dividends may be made various ways, by manufacturing their [Page 13] own paper while the public confidence conti­nues, or even by dividing their capital. What their profits are, is best known to themselves; but that their profits could never be so consider­able as to afford a dividend of 16 per cent, though they had made no bad debts, even if they had never stopt discounts, I am inclined to believe, by comparing it with the dividends that have been made at different times by the Bank of England.

I have before me a list of the dividends made by the Bank of England, for a matter of seventy years past, viz. from the year 1715 down to the present time, by which I learn that she never has, in any one year, divided to her creditors more than after the rate of 8 per cent. The list is as follows, viz.

From 1715 to 1719 she divided 8 p. ct. per an.

If the Bank of England therefore, whose busi­ness is so much more extensive, and who has always had an interest allowed her by the Go­vernment [Page 14] of at least 3 per cent. upon her stock, besides four thousand pounds a year to defray her expences of management, has never been able to divide amongst the proprietors more than 8 per cent. is it probable, that the profits of the Bank of North America, in this city, can have enabled her fairly to divide amongst her creditors after the rate of 16 per cent. especially when we consider, that she has no interest paid her by the Government upon her stock, nor has she any other means of defraying her expences but what arise out of the profits of her trade.

If this is not a fair inference, I call upon the directors to prove the contrary, by producing a full and fair account of their property and effects, and laying them before the public. This, at least, your honourable House, I think, has a right to expect, before they consent to a renewal of their charter, and a refusal on their part can be construed into nothing but an acknowledge­ment of their guilt.

For my own part, I own, I am somewhat at a loss, to account for their extreme solicitude up­on this head. If they have been acting fairly and honestly, which I always suppose till it ap­pears to the contrary, where is the great neces­sity for a charter? Is it to screen their own private fortunes from being answerable to the public creditors for debts contracted by the Bank? If it is, let the proprietors look to it. This, I am sorry to say, has been done in other countries, and why may it not in this?

After all that has been said, I am far from be­ing an enemy to Banks.

Banks have subsisted for ages in many coun­tries, and have been of the greatest utility. A [Page 15] Bank, as I before observed, has existed at Ve­nice, another at Genoa, another at Amsterdam, for a great number of years; but they are all of them very differently constituted from the Bank in this city. They are suited to the con­dition and circumstances of their respective coun­tries. Were the Bank in this city to continue upon its present plan, issuing notes payable in specie, for any length of time, it would be the means, by degrees, of transferring all the coin in the country out of it, and we have no mines to afford an inexhaustible supply. This the Bank of St. George once did with respect to Corsica, and were Banks paying in coin established in Spain, Portugal, or any other country that has a constant balance of trade against her, they would only help on their ruin a little faster. This had very nearly happened in Scotland in the year 1764. Such a Bank, it is true, may be a present temporary convenience and accom­modation to the merchant, but it is ruin and destruction to the country. Had our greatest enemies been the inventors of this device, they could not have concerted our ruin more effectu­ally, than by recommending the institution of such a Bank. And is it any wonder, that British merchants and others should complain most grievously of the abolition of a Bank, through the instrumentalilty of which they had been enabled to glean away from us all our money. This is the true reason of our present scarcity of cash, and if the Bank continues upon its present plan, this scarcity of cash must every day grow greater. If European countries are ambitious of our trade, let them consent to a [Page 16] settlement of it upon the only terms upon which it can be carried on, viz. A free, open and ge­nerous exchange of their manufactures for our produce through such channels as may be found convenient for that purpose. When that is done, and a favourable balance of trade restored, it will be time enough to institute Banks, paying in specie. But if we must have a Bank in our present circumstances, it must be of a different kind. To conclude,

The question, therefore, before the House, in my humble opinion, which I beg leave to submit to you, is not, Whether the charter ought to be restored to the Bank, only limiting the time of its duration and the quantum of its stock, (which I understand is the thing prayed for) but, Whether it ought to subsist at all under its present form, or whether it ought not to be new modelled, so as to harmonize with the Go­vernment of this country, and with the present state of trade and commerce.