THE bill, which originated in the^* last session of assembly, for repealing the law whereby a charter of incorporation is granted to the bank in this city, under the name of the Bank of North-America, will be taken up, in a few days, for its final decision. It respects an object of great and general concern; and requires the serious con­sideration of every member of the legislatre.

A gentleman, well known for his professional abilities, has undertaken to advocate the cause of the bank, in a pamphlet, just published, entitled—"Considerations on the Bank of North▪America." He has gone fully into the defence of this institution; and has pleaded for his client with his usual ingenuity.

The writer of the following strictures assures the public, that he has no inducement to take up his pen, on the oc­casion, but to offer his candid, unbiassed sentiments, on the subject to which they relate. He has to lament, that so little time is afforded him for the purpose: and this, he begs, may be accepted as his apology, for not going more fully into the matter.

The first position, which the author of the Observations endeavours to establish, is—"That the Bank of North-America was legally and Constitutionally instituted and or­ganized, by the charter of incorporation granted by the United States in Congress assembled."

[Page 4] This we deny—The second article of the confederation declares. in express terms, that "Each state retains its sovereignty, freedom, and independence, and every power, jurisdiction and right, which is not by this confederation expressly delegated to the United States in Congress as­sembled."—The right of creating a corporation appertains to sovereignty; and every state in the union, by virtue of this right, exercises the power. It is a power vested in the legislature of each state. We find that, in England, though a monarchy, the power of erecting corporations, is a right of parliament. It is true, the king also posses­ses this power: but it seems to be rather a permissive pre­rogative of the sovereign, which he, as a constituent part of the parliament, has the privilege of exerting; not­withstanding the forced construction, in favour of preroga­tive, which Judge Blackstone makes, in his observations on this privilege (though not an exclusive one) of the crown—"The method," says the learned Judge, "by which the king's consent (to the erection of any corporation) is expressly given, are either by act of parliament or char­ter. By act of parliament, of which the royal assent is a necessary ingredient, corporations may undoubtedly be created: but it is observable, that most of these statutes, which are usually cited as having created corporations, do either con­firm such as have been before created by the king, as in the case of the College of Physicians, erected by charter, 10. Henry VIII—Which charter was afterward confirmed in parliament; or they PERMIT the king to erect a corpo­ration in futuro, with such and such powers, as is the case of the BANK OF ENGLAND, and the society of the British fishery. So that the immediate creative act is usually per­formed by the King alone, in virtue of his royal prero­gative."—The foregoing quotation naturally suggests the idea of a distinction, with respect to corporations by char­ter in England, between the "immediate creative act," by the king, and a subsequent confirmation in parliament. This idea will apply to a charter granted by CONGRESS; its immediate creation may be by them; but, to give it operation, it must be confirmed by the several states. So far, and no farther, do the powers of Congress extend, as to the erecting of corporations. And it is evident this [Page 5] was the idea of the matter, entertained by that body, when they recommended to the legislature of each state, "to pass such laws as they might judge necessary for giving the ordinance incorporating the bank its FULL OPERA­TION." By the 9th section of the constitution of this commonwealth, there is an express confirmation of the power of the legislature, "to grant charters of incorpo­ration." The exercise of this power is an act of "sove­reignty;" and as it is not, by the articles of confederati­on, "expressly delegated to the United States in Con­gress assembled," the "right" to exercise it is exclusively vested in the legislatures of the several states. Nor can any implication operate to the extinction of this right, by giving Congress any other power, in this case, than such as is above defined.

But, could we, for a moment, suppose, that Congress has a power of establishing corporations, we must admit that solecism in politics, imperium in imperio. For could they not institute a corporation, whose objects might, to use the words of the author of the "Observations," be—"commensurate to the United States"—whose opera­tions would extend through all—and whose principles, pro­ceedings and police might interfere with the laws and constitutions of individual states?—Such a power, Con­gress neither possesses nor claims: And though the autho­rity and power of that truly honourable and respectable body are, without doubt, in many instances, incompetent to the discharge of the high and important duties annexed to their office; it is to be presumed, that no man will se­riously contend for the propriety of granting them this prerogative. "Cities and towns" (says Judge Black­stone, I. 472. note h.) "were first erected into corporate communities on the Continent, and endowed with many valuable privileges, about the eleventh century: to which the consent of the feodal sovereign was absolutely necessary, as many of his prerogatives and revenues were thereby consi­derably diminished"—If the Bank of North-America is to be considered as a body corporate within the Common­wealth of Pennsylvania, without the "consent" of the legislature, which is the sovereign power of the state; is not an essential "prerogative" of the state infringed—And [Page 6] may not its "revenues" be "considerably diminished" by many of its citizens vesting their funds in an instituti­on, within the heart of the state, solely "under the autho­rity and auspices of Congress," and not am enable to the laws of any single state?—Might not Congress, on the same principles, incorporate an East-India Company, and grant them great and exclusive privileges, with an exemp­tion of their imports from all duties and imposts what­soever?

The author of the Observations asserts—That "STATES are corporations, or bodies politic, of the most important and dignified kind." "New states, says he, "must be FORMED and established; their extent and boundaries must be regulated and ascertained"—And then asks—"How can this be done, unless by the United States in Congress assembled."

To this we reply—That states resemble corporations in their nature and properties; and, in some respects, may be considered as such. The territory, on which the new states are to be established, was ceded to the United States, in consequence of a treaty between Congress and the original proprietors of the soil; the right of "enter­ing into treaties" being vested in Congress, by the 9th article of the confederation. But, neither the acquisition of the lands, nor the regulating and ascertaining "their extent and boundaries," constitute the act of incorporat­ing—People are the necessary ingredient, (if we may use the term) which enter into the composition of a body politic: And Congress do no more than declare, that the settlers on these lands should, in the first instance, be authorized "to meet together, for the purpose of establishing a tem­porary government," FOR THEMSELVES—and, on an in­crease of their numbers, "to establish a permanent constitu­tion and government, FOR THEMSELVES."—They are to incorporate, or rather confederate themselves: Congress has nothing to do with their incorporation ^*, having no agen­cy in this part of the formation of the new states.

[Page 7] To what has been said on this subject, we subjoin the sense of the Council of Censors, relative thereto.—"By the first section of the act of assembly to incorporate the Bank of North-America, passed the first of April, 1782, the claim of Congress to erect incorporations is acknowledged.—Yet there is no countenance given to this assumed authority by the confederation."

These arguments, we conceive, are sufficient to shew the futility of the assertion—"That the Bank of North-America was legally and constitutionally instituted and or­ganized by the charter of incorporation granted by the Unit­ed States in Congress assembled."

[Page 8] On what basis, then, does this institution stand?—It will not be seriously contended, that any single state in the union has a right to exercise a legislative power over any one or more of the others; nor that twelve states, out of Congress, have authority to bind a thirteenth in any case whatsoever.—The result, in the present instance, is—that the validity of the incorporation of the bank depends on the existence of a law of this state, entitled, "An act to incorporate the subscribers to the Bank of North-America."

This point being established, it follows, as a necessary consequence, that the assembly of Pennsylvania have a right to dissolve the corporation of the bank. "A corpo­ration (says Judge Blackstone, I. 485) may be dissolved by act of parliament, which is boundless in its operations." The power of repealing its own laws, is a right inherent in every legislative body—it is a right exercised by the freemen of Pennsylvania, through the medium their repre­sentatives, for the benefit of the whole community; and therefore it cannot, with any reason, be supposed, that "acts of the state" exerting that right, will be directed by "every varying gust of politics." The most absolute and explicit terms of perpetuity, as to the force and ope­ration of a law, cannot militate against this right: for to suppose the contrary, would, in effect, be to infer—either, that the legislature can do no wrong; or that, having once gone into an error, the people must necessarily submit to the consequences, be they what they may, without any means of obtaining redress—The absurdity of such doctrine is too glaring, to need any comment; it being sufficiently exemplified in the instance before us, of a legislative body erecting a public bank into a perpetual corporation—a thing unprecedented in any free country!

The right of the legislature, to dissolve the corporation of the bank, being ascertained, our next enquiry shall be—as to the expediency of the measure.

We shall endeavour to shew, as concisely as possible that the Bank is an institution incompatible with the inte­rest and welfare of the state.

High interest for money is allowed, by all writers, to be extremely prejudicial to every country where it obtains. [Page 9] It is alike unfavourable to the farmer, merchant and trades­man. In a country, where the principal source of their wealth is agriculture and the lands are in a state of progres­sive improvement, with a proportionable increase of trade, manufactures and people, every man must see the necessity of a circulating medium being kept up, in a due ratio to these increasing uses and demands for money. Such a country is this: But the balance of trade being against it, that balance must be paid in gold and silver; and as the addition made to the circulating medium by the bank, must bear a certain reasonable proportion to its limited and fixed capital, which cannot be enlarged, so as to keep pace with the growing pecuniary uses, there must be a progres­sive diminution of the circulating medium of the country; operating against its interest, in a compound ratio to the in­creasing uses and demands for money: unless, indeed, other paper, besides that of the bank, be thrown into circulati­on, as a medium of alienation; which would be contrary to their interest. This effect will be produced by the high rate of money; whereby none can possibly be benefited, but the stockholders themselves, and an inconsiderable number of merchants and traders: while the farmer is deprived of access to such sums, as are absolutely necessary, towards enabling him to cultivate and improve his lands, in such a manner, as to contribute to his own emolument and the wealth of his country; otherwise than on terms totally in­consistent with those purposes. In what manner will this operate? In facilitating the importation of foreign commo­dities; preventing the settling and improvement of the lands; discouraging emigration of useful citizens hither, from abroad; and expediting the transportation of gold and silver to other countries. The great emoluments which would accrue from banking, under these circum­stances would induce men of moderate monied property, as well as the rich, to vest their funds in bank-stock, to the discouragement of industry. And, for the same purpose, and to a similar effect, would the occupier of a landed estate convert it into cash, in order to become a proprietor in the funds of the bank; that he might draw an interest of eight or ten per cent. per annum for his money, without any la­bour, and subject to no taxes. These allurements might [Page 10] continue for some considerable time; probably long enough to suffer a long succession of great holders of stock to acquire independent fortunes, from the accumulation of interest upon interest every six months. But, finally, all the circulating specie of the country must center in the bank, and, whilst one of its notes remains in circulation, will be drawn out to discharge the grand balance of our trade with foreign countries, till the whole shall be exhausted.

The influence of the bank is not less to be dreaded, than its dangerous tendency in other respects. By the act of assembly for incorporating the subscribers to the bank, they are "declared and made able and capable in law to have, purchase, receive, possess, enjoy and retain lands, rents, tenements, hereditaments, goods^*, chattles and effects, of what kind, nature or quality soever, to the amount of ten millions of spanish silver milled dollars" By the same law, this corporation is to exist for ever. And we are told, "The bank was established and organized under the au­thority and auspices of Congress"—That, "the directors have a trust and duty to discharge to the United States, and to all the particular states, each of which has an equal inte­rest in the bank"—That "they could not have received, from this state, a charter, unless it had been similar to that granted by Congress"—That, "Without the approbation of Congress, where all the states are represented, the direct­ors would not be justified in agreeing to any alteration of the institution"—And, that, "if alterations are necessa­ry; they should be made through the channel of the United States in Congress assembled."

Thus, the Bank of North-America is an organized body; [Page 11] endowed with certain rights and privileges FOR EVER; capable of possessing property to the amount of TEN MIL­LIONS OF DOLLARS, governed by TWELVE men; situ­tuated in the metropolis of the state (indeed, it might be said, of the United States) and claiming an exemption from the power of its legislature!—Its interest is distinct from that of the state; and, in some respects, they are in­compatible. The interest of the state requires a paper cur­rency, for the encouragement of the farmer; but this would diminish the profits of the stockholders, and therefore they will continue to oppose it. Here, then, is an interference of interests between the state and a mercantile corporation. To destroy this competition, the latter will naturally be led to exert its utmost influence: and, when we consider of what nature and extent this INFLUENCE may be;—espe­cially when exercised by men who suppose themselves, in their corporate capacity, free from the control of the laws; and who, possibly, may be aliens and even enemies, or under the direction of such;—what may not be its effects?—what have we not to fear?

The people of England, ever jealous of their liberties, were alarmed at the parliament extending the duration of the charter of their national bank only ten years beyond its usual term of twenty one! what says Mr. David Hartley on that occasion (in his letter, dated 22d. June, 1782) to the Lord Mayor of London?—"The establishment of a monopoly in any corporation, immense in its magnitude, of the duration of thirty-one years," (the duration of the Bank of North-America is to ETERNITY) "situated in the very heart of the city of London, which is the heart of the kingdom, and which may, by that establishment, be enabled to control the whole national powers of public and private credit, is an object most seriously deserving the attention of the city of London"—"A state bank should be the ser­vant of the state, QUAMDIU SE BENE GESSERIT, and under the control of a lease of moderate duration. Those who give power out of their own hands, are responsible for any subsequent usurparions or encroachments which may follow."—"If they were upon any sudden occasion, or up­on any pressing emergence of the state, to refuse the ordinary circulation of land or malt bills, or of any other articles of [Page 12] public supply, they might have it in their power to control all the executive faculties of the state, and to fetter, by their exclusive negative all their vigorous and financial ope­rations. The extremes likewise, on the other hand, would be equally in their power. If any daring minister hereafter should meditate some deep design, and should extend the influence and powers of corruption over some unknown future set of twenty-four bank directors"(the Bank of North America has but twelve) "the immense power of their monopoly, thus liberated from fear or control for an age to come, might become the most formidable engine of state; even so far, possibly, as by some desperate stroke to render the executive power independent on the knowlege or con­sent of parliament, for any required sum of money." And farther. "If, unfortunately, in any future period in this country, vehement factions should arise, and that the bank should, incidentally, become an engine in the hands of any one party, to wreak their vengeance upon their ad­versaries, might not some men be prefered to partial favor, while others of equal merit might be proscribed to bank­ruptcy? Let every merchant and banker in the city of London apply this case to his own thoughts, whether he would wish to set it merely on a cast of lots, on whose head favor or proscription should fall."

This is the language of Mr. Hartley.—We offer no apo­logy for the length of the quotations—They are in point—And every man, capable of judging, may draw the parallel, and determine, whether these remarks do not apply with equal force, if not greater, to the Bank of North America.

This bank, as well as that of England, is founded on the principles of mercantile credit. Sir James Steuart (in his "Political OEconomy") tells us—"The constitution of the bank of England differs essentially, in some particulars, from that of banks upon mortgage and private credit. It is not so much calculated for multiplying the currency by melt­ing down private property, as for facilitating the circulation of the trade of London, and ^* exchequer of Great Britain" [Page 13] It is, says he, "more useful for promoting circulation, than augmenting it."—Where then are the great advanta­ges resulting to this country from the Bank of North-Ame­rica, to counterpoise its numerous and great disadvantages? "It is not much calculated for multiplying the currency." Nor has it testified any disposition to co-operate with govern­ment, in the restoration and support of public credit; as the bank of England has done: on the contrary, it has fully evinced its determination to oppose all paper but its own. The author of the observations has exhibited a list of monies advanced to the public by the bank—We wish not to de­tract from the merit of the bank: but, on enquiry, it will be found—that these sums were advanced on ample securi­ties; and that they received interest for these advances; altho they had the use of a sum not less than 16,000 dol­lars belonging to the state, ten or twelve months, without any charge. If the facts are otherwise, we wish to be set right: they may be ascertained, without much difficulty.

On a review of what has been said, we apprehend it will be sufficiently evident, that it would be "wise" and "po­litic" to repeal the charter granted by this state to the Bank of North-America; and that the legislature would be justifiable, in so doing, on every principle of equity, expediency, and duty.

It now remains for us to point out a proper substitute for the bank—some institution, which shall answer all the pur­poses of a bank, suited to this country; which shall not be attended with the disadvantages and dangers of one, but adapted to promote the interests of the whole community. Such an institution is a LOAN-OFFICE; on a footing similar to that which obtained in this state, prior to the revolution. This is, in fact, a state bank, and analogous, [Page 14] in its operations, to a bank of circulation upon mortgage. A paper currency is emitted by government—This is loaned, (in sums not exceeding, perhaps, two hundred pounds to any one person,) to proprietors of lands within this state; who mortgage real, substantial property, amounting to double or treble the value of the money borrowed by them, as a security for the repayment of the principal with inter­est, in fifteen or sixteen years, in equal yearly portions.

The demands for money in every country, will be regulat­ed by its uses: When the uses are great, the demands will be so; and so, vice versâ, in proportion. The occupiers of the lands, in a new and unimproved country, have continu­al uses for money, to stock and improve their farms. With­out this, the settlers in an unimproved country can do no­thing; and the improvements of the partially-cultivated lands must become stationary, or advance but slowly. But when the farmer is enabled to obtain money, on the fa­vourable terms of a loan-office he uses it in extending the improvements of his farm; which improvements become, as it were, the capital stock, from the employment of which he is enabled to repay, in the limited time, the principal sum borrowed; together with interest, which must come out of the profits on his capital stock.—For instance—"A farmer borrows, from a public loan-office, one hun­dred pounds, on a mortgage of lands double or treble in value; repayable, with interest, in sixteen yearly instalments. He pays £.142 10, principal and interest, in that term. As this intire sum of one hundred pounds, in paper money, originally lent, must be withdrawn from circulation by the state, at the expiration of the sixteen years, the additional sum of £.42 10, which the borrower will have then paid, will be produced by the use which he has had, during that term, of the average sum of £.53 26, per annum, at an interest of five per centum. Therefore, the borrower of the original sum of £.100, in the bills of credit, will, by the employment thereof, have created the additional sum of £.42 10, in actual money. The principal will have been realized by the borrower in that improved value of his lands, which has furnished such interest; and that interest will have supplied a fund for public uses."

Nothing is more evident, than, that the objects, which [Page 15] create such uses for money, are of the most important kind: They promote, in the highest degree, the national wealth and prosperity. The demands of the farmer, for money, will continue while he can apply it to such uses with ad­vantage, but no longer; and so long may the government continue to issue it, without any danger of creating too great a quantity. While in circulation, there can be no apprehension of its depreciation, having indubitable and sufficient funds for its redemption.

Loan-office bills of credit anticipate, from time to time, the improvement of real estates. Money of this kind ope­rates as a stimulus to the borrower, to procure funds for re­payment, whereby a spirit of industry is excited. Add to this, that a circulating medium is established, adequate to the necessities of the whole community; our exports in­creased; domestic trade enlivened; population promoted; and a revenue furnished to the state.—"I will venture to say" (in the words of Mr. Pownall, extracted from his "Administration of the Colonies") "that there never was a wiser or a better measure, never one better calculat­ed to serve the uses of an increasing country, that there never was a measure more steadily pursued, or more faith­fully executed, for forty years together, than the loan-of­fice in Pennsylvania, formed and administered by the as­sembly of that province."

A^* LOAN-OFFICE, then, is the proper succedaneum to supply the place of a bank in this country.

PHILADELPHIA, Sept. 1, 1785.