CREDIT is the confidence which mankind place in the virtue and good character of its object; so when we say of a man, he is a person of credit and re­putation, the meaning is, that he is a man in whose virtue and good character people in general place confi­dence.

CREDIT, in a commercial sense, is the confidence which people place in a man's integrity and punctuality, in fulfilling his contracts, and performing his engagements. When we speak of a merchant of credit, we mean a merchant, in whose ability, integrity, and punctuality, in fulfilling his contracts and engagements, people have confidence, i. e. a man of integrity and truth, who is fit to be believed and trusted; the contrary or reverse of this, i. e. a man of no credit is a man of no integrity in his dealings, who will quibble and shuffle, evade his contracts, violate his word and truth, delay his pay­ments, disappoint his creditors, use deceit, chicanery and falshood, &c. i. e. is not sit to be believed or trus­ted.—From this view of the matter, it appears that credit is a most valuable thing in society, it gives hearts ease, it gives wealth, 'tis a nurse of every social virtue, it makes a soil suitable for the growth of public spirit and every public virtue; the worth and value of this may perhaps be best illustrated by comparing it or view­ing it in contrast, with its contrary; how much better do we feel? how much richer do we grow? how much more easy, safe and satisfied do we enjoy ourselves? when we live among citizens to whom we can give full credit, in whom we can have safe confidence, and whom we can trust, than when we find ourselves among people to whom we can give no credit, in whom we [Page 4] can have no confidence, and whom we cannot trust, and where every concern or contract we make with them is attended with anxiety, uneasiness and fear, and commonly followed by deceit, loss and disappoint­ment; in this case, I desire, I can need no better ar­gument, no better proof, no better explanation of my subject, than an appeal to the instant feelings of my fellow-citizens.

BUT however valuable and excellent in society, how­ever profitable and haypyfying, however soothing to our warmest wishes credit public or private may be, 'tis in vain to hope for it, or even to imagine the possibility of its existence, without its proper object, which is honesty or integrity, it can no more be forced by laws, it can no more be obtruded by authority, however high and puissant, than an article of faith can be forced on the understanding, without proper proof or evidence.— Credit and honesty are in their nature correlatives, and must and forever will imply and support each other. Integrity will generate credit and confidence the moment 'tis known in any part of the world, and the moment that integrity or honesty is observed to cease, the credit or confidence which was generated by it, instantly ceases too; it dies, it can never be brought to draw another breath, after the integrity which generated it, and sup­plied all its vital motions, is gone.

'TIS here to be noted, that however necessary and even essential integrity is to credit, yet in a commercial sense, i. e. as far as it relates to trade, money or wealth, 'tis not the only thing necessary, power or ability must be added, for however clear and plain it is, that an honest man will never contract beyond his power of perform­ance, yet it often happens that his power of perform­ance may be much lessened between the time of contract and the time of fulfillment, by many incidents, which may and do often take place, which at once lessen his credit, or the confidence of his neighbours in his en­gagements; [Page 5] these incidents often affect honest mer­chants so deeply, as to occasion their failure or bank­ruptcy, and their failure often produces another in their creditors, that a third and that a fourth, &c. This succession of failures often originates in a swind­ler or rascal, who knowingly contracts vastly beyond his ability of performance, and of course ruins not only himself, but a numerous succession of honest men. This affords us one instance of the vast mis­chief which a community may and often does suffer from one dishonest man residing among them; very many others might be produced of like mischief, ef­fected in a great variety of ways, and to such a degree that a national character may be deeply stained by the iniquity and knavery of a few. This shews that it is of most serious consequence to every state, to use eve­ry possible means, not only to preserve the national credit and character of their state in good purity and honor, but also to introduce as far as may be, habits of integrity and honor among their citizens, and extir­pate, as far as can be done, all such villainous and scandalous practices, as naturally tend to disgrace the national character, and ruin the fortunes of private citizens.

THESE observations will appear with greater force and advantage, if we recur for a moment, to what I just now mentioned, viz. the great ease, satisfaction, and convenience of living in a state where the public finance is so managed, that all private citizens can safe­ly rely on the justice and punctuality of the public en­gagements, and where the habits of honesty and in­tegrity are so general among the private citizens, that they may safely trust one another, so that credit and mutual confidence in each other may prevail through the community. Thus circumstanced, every man may safely employ his stock in any business of advantage, either of merchandise, mechanism, or husbandry; whereas if he lived in a state, and among citizens of [Page 6] contrary character, he would be afraid to let his stock go out of his own keeping, least it should fall into hands either public or private, which would retain it from him, so that he could not recover it again, though the advantages of improvement both to the public and himself, might be ve­ry great and inviting.—In a state, and among citizens so happily disposed, any man, with industry and oeco­nomy, though his means were small, might live very easy and comfortable, and the man of fortune might improve his estate very safely and happily, to the great advantage both of the public and himself. Strangers would have every encouragement to flock in to such a state, and thereby increase the population, and of course the commerce, manufactures, and husbandry of it.

FROM this view of the subject it appears strikingly evident, that credit, both public and private, and the mutual confidence of citizens in the public justice, and in each other, is of most momentous advantage, of most capital convenience, both to the public and to the individual members of it, it contributes most decidedly and essentially to the internal establishment, security and safety of the government, and to the ease, wealth and happiness of private citizens, therefore it follows, that 'tis the high interest, and great duty of every state to adopt and pursue every practicable method of securing, en­larging and extending to the utmost degree, all the advan­tages and blessings which can result from such public and private credit, and the mutual confidence of the subjects of the state, in the public and in each other.

THE wisest and richest nations of Europe, long be­fore we were born, have seen this subject and its most momentous importance, in a light so strong and glaring, as induced them to adopt every practicable method in their power, to secure to themselves such invaluable advantages.—In their practice we have an example, and in their success we have encouragement, and very strong inducement to imitate it.

[Page 7]FOR this purpose the richest trading cities of Eu­rope, long since adopted the plan of establishing public banks; this plan they formed upon the most deliberate consideration; they had the greatest opportunities of information, had the greatest experience in the subject; they knew the importance, operation and effects of both cash and credit, the best of any men then in the world, as their trade and wealth were then the great­est of any in the world.—It is not to be supposed that their first essays reached the perfection of the subject, but they found advantages enough in their first trial, to induce them to continue the practice ever since.

Genoa was the first state in Europe which established a public bank; their bank of St. George was establish­ed in 1407, by a public act of that republic. The plan was soon followed by Venice, whose bank, which continues to this day with the greatest ad­vantage to the state, as well as to their private citi­zens, and has ever been in the highest reputation and credit both at home and through all Europe, was esta­blished by a public act of their state. The city of Am­sterdam long after followed their example, and their pre­sent bank received a public establishment by an act of their States-General, in 1609. The cities of Rotterdam and Hamburgh adopted the same practice; and England, who is always phlegmatic and late in adopting the example of the other European states, instituted and established its bank in 1694; and France, whose attention in those days was little turned to improvements in trade, came later into it, their royal bank at Paris was esta­blished by public authority in 1718, besides these, ve­ry many other banks of less extent and consequence, both public and private, are now established in the tra­ding cities of Europe, and banks are become the great receptacles of the cash of Europe, and almost all mer­cantile receipts and payments are made through them.

THE bank of Genoa indeed fail'd in 1746, after that re­public [Page 8] had for a great length of time enjoyed most signal and capital benefits from it, but its ruin was not brought on by any defect of its principle, or mismanagement of its Directors, but by the madness of the rulers of that state; they were not mad enough indeed to decry it as a useless or dangerous institution, but they adopt­ed the contrary extreme, they magnified its strength and power too much, and compelled the Directors to make advances to the state, beyond what their funds would bear.

THE other banks have continued to this day, and with such incredible and most acknowledged benefit to the several states in which they are established, that their credit or decline has generally been considered as a sort of sure criterion of the strength or weekness of the state in which they are established. When nations are at war, they ever have thought it a sure way to bring on fatal embarrassments on an enemy, if they can by any possible means shake the credit of their bank, and every state has always been ready to go great lengths to support their bank, if by any turn of affairs it has happened to be in distress.

IT must therefore be very absurd to suppose, that such an institution can be hurtful or even useless, that has stood the test of such extensive and durable tryal and practice, among so many nations of the greatest experience, and most accurate knowledge of the subject; an institution through which not only the cash of private merchants, but of the greatest and richest trading companies, and even the treasure of nations, has been so long negociated, and which, through so great a length of time up to this very hour, supports its credit, and character of vast utility, by the universal suffrage of nations, thro' all ranks of people, from crowns and the most digni­fied assemblies of statesmen, and the most wealthy com­panies of merchants, down to the lowest dealer.

[Page 9]BUT all this notwithstanding people may be found little acquainted with the subject, and wholly unexperi­enced in it, who will give their opinion that such an institution is injurious to a state, and incompatible with the safety of it. This may be considered as an instance and proof of that height of absurdity, which people may arrive at, who grow zealous and positive in things they do not understand.

BUT however well the nature of banks may be un­derstood in Europe, and however immense the advan­tages and profits which are derived from them, may be, yet the thing is new in America, and by many people thought unfavorably of.

THE BANK of North-America, though established by act of Congress (December 31, 1781) which is the highest authority of the union, and recognized express­ly by many of the states, and implicitly by them all, is nevertheless treated by many people here, as a most dangerous and injurious thing, utterly incompatible with the safety of the state, and of course they think it ought to be demolished without ceremony, and that the common forms of dissolution are unnecessary, as people are not very nice in the manner, or delicate in the choice of means of hunting down a beast of prey, or destroying a common enemy.

BUT as I suppose my fellow-citizens will ever be wil­ling to hear before they condemn a thing that has once saved them, and very often afforded many of them a material convenience, I apprehend a short dissertation, shewing the nature of a bank, will not be unacceptable.

A BANK is a large repository of cash, deposited under the direction of proper officers (say a President and Di­rectors) for the purpose of establishing and supporting a great and extensive credit, to be made use of in every case where an established credit will answer in exchange or [Page 10] payment, as well as cash, or better than cash, as in many circumstances will manifestly and undoubtedly be the case; for instance, suppose this state should erect and establish a bank, and order all the revenues of the state to be paid into it, and should direct that all the debts of the state should be paid in bank-bills of the same bank, payable to the owner or bearer, which bearer should have liberty, whenever he pleases, to carry his bill to the bank, and receive cash for it, and should direct further, that if such bank-bills, in any circumstance, happen to suit any citizen better than cash, he should be at liberty to carry his cash to the bank, and take out bank-bills for it.

THIS would be a public or state-bank, because the stock of it would be the money of the public, and the officers of it would be appointed by the public, i. e. by the General Assembly, or President and Council.

THE effect or operation of such a bank, when its credit becomes established (i. e. when the people at large believed with full confidence, that the fund or stock was sufficient, and the management fair and up­right) I say the operation or effect of such a bank would be, that very few of the people who should be possessed of such bank-bills, would carry them into the bank, and receive cash for them, because the bills would answer by far [...]he greatest part of the purposes of cash as well as cash, i. e. they would purchase any kind of commodities, and pay any kind of debts as well as cash, as we find is the case of the bank-bills of the bank of North-America, at this time.

FURTHER such bills would not only be as good as cash for almost every purpose, where cash is used or needed, but on many accounts they would be better than cash, as any sum of them is easier and more certain­ly counted than cash; the danger of counterfeits would be less▪ the carriage would be easier; they would be less [Page 11] exposed to thefts and robberies than cash, (for a man can conceal from a thief a thousand dollars in bills, or run from a robber with them, easier than with a thousand dollars of silver); in case they are destroyed by fire, water, or other accident, they are not lost, but on proof made at the bank, they may be re­placed, &c.

THE advantages would be still greater, if instead of bank-bills, the owner should take a bank credit, and draw checks on the bank, whenever he needed his mo­ney; this would enable him to pay any sum exactly, without the trouble of making change, he would be able in any future time to prove his payments, if he kept his checks which he received cancelled from the bank, as every man ought to do; this would at once free him from all danger of loss by fire, robbers, mis­laying, dropping them on the road, &c &c. This practice is found by experience to be so very conveni­ent, that 'tis almost universally adopted by people who keep their cash in our present bank.

THESE and many other advantages which bank-bills or bank credit have beyond what cash can have, would doubtless induce most people to prefer bills or bank credit to cash, and of course very few possessors of ei­ther would demand cash at the bank, the consequence of which would be, that at the end of the year much of the cash would remain in the bank, though the whole amount of the bank-stock should have been paid out in bills, and been constantly circulating among the people, with every advantage that cash could have, and many other very valuable advantages that cash could not have, as has been just now shown.

THE benefits or uses of the bank when thus e [...] ­lished, are various: 1, The bank gains all the [...] per, i. e. all such bank-bills as are lost (where [...] can't be proved) and of course can never be br [...] [...] the [Page 12] bank for redemption or payment. 2, The bank can on any public emergency emit bank-bills, beyond the amount of the cash or stock in the bank, and of course can have the benefit of a considerable sum to circulate or use for the public benefit, without paying interest, or having it known to an enemy that they are embarrassed or in debt. Or 3, if the exigencies of the state-should not require this, they may accommodate their citizens with discounts or loans on interest, to the great increase of the bank-stock or public revenue, as well as doing great favor to indivi­duals, and increasing the trade, manufactures and husbandry of the state; this is the best and perhaps the only proper way of supporting a public loan-office in a state. And 4, if the revenues should increase beyond the ex­penditures of the state, the bank-stock will accumulate 'till the amount may be very great, and a rich state, like a rich individual, derives many and great advantages from wealth, and even from the reputation of wealth.

THESE advantages have been found by experience to be much greater, vastly greater, than a sanguine spe­culator, upon a bare view of the nature of the subject, would imagine. The force and energy of credit, perfect­ly well established and permanent, is vast almost beyond conception, it is found by experience to supply the place of cash, and much better than cash, in almost all trans­actions, except in small expences, where small change is necessary, such as travelling expences, market-mo­ney, &c. it is also found by experience, that any sum of money in the stock of a bank, well regulated and managed, is sufficient to support the credit of double or treble its amount in bank-bills, whilst each of those bills is indisputably as good as cash, because the possessor may at any time exchange them at the bank for solid hard money, whenever, either through distrust of the bank, or his own conveniency, he may chose to do it; it follows then 5th, that a [...]od bank may increase the circulating medium of a [...] double or treble the quantity of real cash, with­out [...]easing the real money, or incurring the least [Page 13] danger of a depreciation. And 6, a good bank will re­ceive no money but good coin of standard weight and fine­ness, and this will naturally and unavoidably keep the current coin, cash, or medium good, or discover its defects; for if by any means a debased or light coin, or public bills of depreciated value, should gain a cur­rency in any state (all which have often happened) the standard of the bank will discover their defects, and an exchange or agio of such depreciated money and that of the bank, will at once determine the true or real value of such depreciated currency. 7, Another capital use and advantage of a bank is, that it makes one of the best repo­sitories for money, that is designed to lie for any great length of time, on interest, as it affords a much better security than can be found in the hands of any private man, and the half yearly dividends are more than equal to any profit that can be derived from them, when put to interest on mortgage, and the punctuality of pay­ment better secured, and the trouble of collection much less.

SUCH monies as are here intended, are legacies or any other provision which is made for young children, to be paid to them with the interest, at their full age; any provision which a man may wish to make for himself or wife, against old age; the funds of public institutions of religion or charity, such as churches, hospitals, poor-houses, widows fund, sea-captains fund, &c. any accu­mulation of cash, which a man may chose to prepare, in order to compleat some great payment, or accomplish some great purchase at a future day, such as a house, a farm, &c. &c. And as bank-stock of a good bank can at any time be sold for cash, the bank becomes the surest fund to produce the principal cash reposited in it, when needed, and also the interest in the mean time, which may be used if needed, when it is paid in, or may be added to the principal in the bank. This will [...] to be a very important use of a bank, if we [...] to the subject a little, especially to the case of orph [...] [...] in­fants, [Page 14] and see in how many ways they are defrauded, or somehow deprived of the cash, which their parents have carefully laid up for them, whilst their infancy prevents their taking care of it themselves. 8. Another great use of a good bank is, that it probably may very much promote oeconomy and industry, as particularly in many of the forementioned instances, viz. when a man is engaged in accumulating any sum of money for any capital pur­pose, such as making provision for his infant children, or himself in old age, or for a heavy purchase, or any other design, which lies near his heart, he will be ve­ry industrious, and his oeconomy will be very good, 'till he has made up his heap, or got the necessary sum together, and by that time he may perhaps have ac­quired such habits of industry and oeconomy, that he may not stop at the acquirement of the sum first pro­posed, but may be induced to keep on and enlarge it beyond the original design. The bank gives a sure o­peration to such a scheme, at least in point of safe keep­ing, and punctual payment. Neighbours may see the example and its advantages, and fall into it themselves, and so on 'till the instances of such accumulations, and of course of such oeconomy and industry, may become general among monied men through the state, to the [...]reat advantage and strength of the state, the bank and themselves.

THESE are only a few of the benefits derived from a [...]ank, which our short experience will enable us clear­ly to understand, and which in point of fact or reality a [...]e demonstrated by the same experience so clearly and fully, as to put the matter beyond a doubt. I don't pretend to comprehend the great subject enough to ex­plain all the infinite uses and advantages which the long experience of the greatest cities of Europe, have [...]nd resulting from banks, or the still greater advan­ [...] [...] which a further experience may discover either to [...] to us, but these are certainly sufficient to in­ [...] [...] friend to the integrity, wealth and honor, [Page 15] interest and genuine resputability of his country, to think favorably of the subject, and to exert all proper endeavours to participate of its uses.

BUT to pursue the matter further, I will consider another instance, suppose a number of private citizens form a bank, each of whom puts in one or more shares, and raise in that way a bank-stock of any proper sum, (say a million of dollars) for a fund to support a large and extensive credit, for the purpose of deposits, loans and discounts, and appoint proper officers to manage the same, and obtain a public establishment by a char­ter, or other public act of the government; this will be a private bank, because the stock of it is the money of private men, and the officers or directors are ap­pointed by private stockholders, but it may in some sense be deemed public, both on account of its extensive utility and public importance, and the public patronage and establishment it receives from government.

THIS bank will have a nature and operation similar to the other, and will afford the same kind of conve­nience to the citizens who chose to be concerned in it, and in both cases the particular profits of the bank will go to the stockholders, i. e. in the first instance to the public or state, which is the great and sole stockholder of it, in the other case to the private stockholders, whose contributions compose the stock.

OF this kind is the BANK of North-America, and has a much greater capital (about mine hundred thou­sand dollars) than any state bank can have in the present condition of our finances, and its operation, effects and uses are much more extensive, and its ac­commodations to the citizens, and even to the state, much greater than a state bank could have; this may afford one answer to an objection which some [...] raise against the present bank, viz. that it would [...] [...] ter to discontinue the present bank, and erect a [...] [Page 16] public bank in its stead; another answer may be, that no plan of this sort can be so sure of a proper management under the state, as it would be under the direction of its own proprietors. A bank is a sort of mercantile insti­tution, or at least has such a close connection with the whole mercantile interest, that it will more naturally and properly fall under the direction of merchants, than that of any other sort of men less acquainted with its nature and principles, and less interested in its success. Another reason is, that a bank, whose stock is made up by the subscription of private men, and ma­naged by the stockholders, is the surest antidote or preservative against tyranny in the government, that can be named; its owners are the rich men of the state, who will never be concerned in needless popular cla­mours or sedition against the government, but at the same time have both influence and inducement eno' to be a check and restraint on government, when it becomes oppressive, and really verges towards tyranny; the rich have an interest in their poor fellow-citizens, and (as some men use their wives) however tyrannical they may be themselves, they will not suffer any body else to tyrannize over them. Trade and banks can't flou­rish in a despotic government, and of course, where they do exist, they will keep despotism, as far as pos­sible, out of the state. The stockholders are too nu­merous, too much scattered, of sentiments and con­nections too different, to admit any danger of becoming tyrants themselves. I never heard an instance of a state whose government was corrupted by its bank.

BUT a state bank, if we could possibly suppose that it would be well managed and grow rich, would tend immediately and directly to tyranny in the government, be­cause it would give the minister or ruler the command of a vast sum of money; and I never knew a rich c [...]ry at the command of a minister, whose head was n [...] [...]ned by it, and the insanity never fails to take a di [...]on towards tyranny.

[Page 17]THE better way, I should think, would be to join both together, so as that all the state revenues may be paid into the bank, and all public payments be made by checks on the bank, and let the state become stockholders as far as they please, and take sums out of the bank to the a­mount of their stock, whenever 'tis necessary. This will answer every purpose of the state as well as a state bank, will increase the stock of the present bank, and, of course, extend the power and energy of it so much, that it will be able to supply the necessities of the state with any loans of cash, which (without the most violent convulsions) can ever be necessary; and, at the same time would be able to afford most ample accommodations to private citizens or companies, to the vast benefit and increase, not only of private for­tunes, but of our trade, manufactures and husbandry in general.

THE present funds of the BANK of North-Ameri­ca, or the cash which supports it, is first, the bank stock, or the money paid in by the stockholders, which is about nine hundred thousand dollars: And second, the money deposited by men of all descriptions, who may draw it out by checks on the bank whenever they please. These sums are variable indeed, but al­ways very considerable, as no person ever draws checks beyond his deposit, very few ever draw quite up, and very many people have large sums there, because their cash lies in the bank, not only more secure, but is more convenient for payments there, than it could be in the keeping of its owner.

SOME objections have been made to the present bank, which it may be proper to consider.—1, such vast sums of money are hoarded up in the bank, that cash is became scarce in town and country. I answer this is not true, in fact. 1. Because, the bank circulates dai [...] more cash than it has in the bank, and of course makes [...] plentier than it would be if we had no bank. A [...] [...] [Page 18] A very great part of the bank stock, on the strength of which the bank issues and supports the circulation it gives out, belongs not ot this state or its neighbourhood, but to peo­ple who live in distant parts, to whom it must be remit­ted if the bank should be broke up.

2. ANOTHER objection is, that monied men find a greater advantage in purchasing bank stock than in letting their money on interest to people in the country, as formerly was done, and of course, though the monied men in town may gain by the bank, yet the country people suffer by it.— This is a strange sort of sentiment to appear in form of an objection; because, the bank inhances the value, or increases the use of cash or any other property, so that the purchaser is compelled to give more for it than be­fore; therefore the bank is hurtful. The same cause (i. e. the bank) raises the price of wheat and flour, to the benefit of the country farmer indeed, but to the damage of the merchant in town, who must pay more for them than before; if our country produce was all consumed in the state, these mischiefs and benefits would balance one another; because, what one citizen lost another would gain, but a very considerable part of our produce is exported and paid for by foreigners; and therefore the higher the price, the greater is the benefit to the state.

BUT this evil complained of does not originate in the bank, but in quite different causes, many monied men who used to lend money on interest, have lost their money by the war, by the enemy, or by the depreciation of money, or by evasions of payment which have been introdu­ced since, and, of course, have no money to lend; and all that have any, have found the danger of letting it in the old way so great, that few will venter into it a­gain; and lastly, the objection is hardly true in fact; be­cause any man in the country who has credit enough in town to get a good indorser, can have money out of the bank, as [...]ell as a merchant of the city.

[Page 19]3. ANOTHER objection to the bank is, that the discounts of the bank, make money of such easy acquirement, that it induces merchants to overtrade their stocks, and dissipating young fellows to spend money faster, than they would do, if it was harder to get it. I believe this is all true, and not only arises from, but is an actual proof of, the great convenience and public utility of the bank: 'Tis just of the nature of all other objections a­gainst a good thing, because, it may be made an ill use of, and will prove that a good farm is worse than a bad one, because, it makes the farmer lazy, inas­much as a little work on good land, will raise his bread; good victuals and drink are wose than bad, because gluttons and drunkards will eat and drink to excess; a loving wife is worse than a cross one, be­cause, her husband will be apt to lie in bed too long with her; and riches are worse than poverty, because they introduce luxury, &c. &c. But I can't be made to believe that blessings ought to be driven out of the state, because some people will make an ill use of them. I shall ever believe that 'tis easier living in a place where a man can raise a sum of ready cash on any emergency, without delay or difficulty, than where such a thing can't be obtained without great de­lay, trouble or perhaps selling property to great disad­vantage for it. Such a facility is an advantage which I think is not to be despised, or easily parted with.

4. ANOTHER objection is, that all the benefits of the bank centre in the city, and near confines of it, but the country reaps no advantage from it. I answer, sup­pose this was true (which cannot well be admitted) as it costs the country nothing, why do they begrudge the advantages of it to the city. I dare say the inhabitants of the city would all rejoice most heartily to see the country in full enjoyment of every advantage and co [...] venience of life, that could be derived from natu [...] art; but 'tis very evident that the country deri [...] [...] great advantage from the bank, for the richer the [...] chants [Page 20] are, and the greater their trade, the better market they afford for the produce of the country. This is a par­ticular of capital consequence to the country, for their husbandry is animated and supported by their market; indeed the husbandman and the merchant ever mutual­ly support and benefit each other: And 'tis scarcely possible that either of them should be benefitted or hurt, but the other will be affected by it.

5. ANOTHER objection is, that the great wealth of the bank will give it an undue influence on the government. There is no doubt but wealth creates influence; but 'tis that sort of influence which has ever been found safe to the state. Our bank is a sort of mercantile in­stitution, and the influence of merchants is the safest of any that can affect a government. The parson lives on the sins of the people, the doctor on their diseases, and the lawyer on their disputes and quarrels (and I suppose they all think they ought to pray for their dai­ly bread) but the merchant lives on the wealth of the people. He never wishes for a poor customer or a poor country; the richer his customers are, the more they can purchase, and the better payments they can make to him. The merchant has every inducement to seek, and promote the wealth of the state.

WEALTH rarely begets sedition; that baneful pro­duction generally springs from poverty, vice, and disap­pointment. These are the characters which find an in­terest in fishing in troubled waters. We have perhaps no instance of a nation ruined by its merchants. I never heard of a state distressed by its bank, but instan­ces are plenty enough of states served and saved by their bank.—On the whole I think it absurd to banish wealth from a state for fear it should gain too much influence in government, or generate faction in the state; but of all kinds of wealth, a bank would be the least likely [...] [...]roduce these effects, because the stockholders of the [...] are made up of all parties, and are as likely to [Page 21] balance each others influence there, as in any other part of the state. It would, in my opinion, be much more politic, to make a levelling act, to prevent the great wealth of individuals, who are much more likely to become dangerous to the state than any aggregate bo­dies of men, however wealthy they may be.

6. ANOTHER objection is, that the general benefits of a bank depend on the integrity of the directors, who may, in many ways, by a corrupt or partial management destroy these uses or make the whole stock of the bank sub­servient to the interests of a few favorites, and of course, the great body of the people must be excluded from the advanta­ges of it. I answer, this is an objection that may be made with equal force against every institution on earth, none of which are so good and beneficial, but their uses may be lessened or destroyed by corrupt ma­nagement; and when our directors are called upon to vindicate themselves against any such charge, it will be time enough to think of an answer: In the mean time the present internal strength and good condition of our bank, demonstrate that the management of the directors has been conducted with great prudence.

I HERE beg leave to subjoin a short history of the bank of North-America, with an account of some great difficulties it hath had to struggle with from its first com­mencement (four years ago) down to this time, and to make some remarks on its present state.

1. I SHALL attempt to give a short history of our bank. It being observed that the finances of the wisest and best regulated states of Europe, have for a long time been negociated through their banks, or at least been so closely connected with them as to derive the most capital benefits and assistances from them. Mr. Morris, in 1781, when our finances were, in a [...] almost desperat; I say, Mr. Morris being then [...] [...] ­cier-General, [Page 22] adopted the scheme of forming a public bank in America, which was proposed to and appro­ved by Congress, to which a thousand shares of 400 dollars each, were soon subscribed, and application was made to Congress for a charter of incorporation, which was granted by their public ordinance of De­cember 31, 1781. It appears by the preamble of said ordinance, that Congress approved and adopted the scheme from a conviction of the support which the fi­nances of the United States would receive from a national bank, and that the exigencies of the United States made it indispensably necessary that such a bank should be incor­porated.

THOUGH this act of incorporation passed in Con­gress 31st December, 1781, yet it was no new or sud­den thought; for the Financier-General had laid the plan of a national bank before them as early as May 17 preceding, and on the 26th day of the same month Congress approved the same, and engaged to grant an act of incorporation, as soon as the subscription should be full; nor was the thing new to any of the [...]ates, for the scheme of the bank, and the resolution of Con­gress of 26th of May, were published in all the states, and subscriptions were publicly opened in them all.

IN the resolution last mentioned, Congress recom­mended to all the states to make all necessary laws for support of the BANK, and in particular to make it fe­lony to counterfeit the bank notes, seal of the bank, &c. &c.

ALL the states recognized the act of Congress for incorporating the bank, many of them most explicitly, the rest implicitly, as none of them objected to it, but all made use of the bank and participated of the be­ [...] of it, as far as their opportunity and conveni­ [...] prompted them.

[Page 23]THE state of Pennsylvania recognized not only the said recommendations, by their act of 18th March, 1782, a­gainst counterfeiting bank bills, &c. but by another act of April 1, 1782, counting upon the act of Con­gress, incorporating the bank, did grant an act of in­corporation to the bank, similar to, and in the same words of, that of Congress, enacting THAT THOSE WHO ARE AND THOSE WHO SHALL BECOME SUB­SCRIBERS TO THE SAID BANK, BE, AND FOREVER HEREAFTER SHALL BE, A CORPORATION AND BODY POLITIC, BY THE NAME AND STILE OF THE PRE­SIDENT, DIRECTORS AND COMPANY OF THE BANK OF NORTH-AMERICA.

BY these public acts, the subscribers to the bank consider themselves and their property in the bank for­ever, under the most solemn and sacred sanction and protection of the law, and guarantied in the most effectual manner conceivable by the public faith, pledged to them both by Congress and the state; for 'tis not possible that the public faith can be plighted more solemnly and more effectually by any supreme or subordinate au­thority, than by a formal public act.

UNDER this sacred sanction of the law, and fully confiding in the honor, justice, and even contract of our Legislature, the Directors, in January, 1784, re­solving to make their institution as extensive and use­ful as possible, opened their books for new subscriptions. Under the inducement and encouragement of these firm esta­blishments, very many persons both citizens and fo­reigners became subscribers, and placed their money in our bank, the amount of the new subscriptions, after the charter of this state was obtained, was above half a million of dollars. Old men placed the money de­signed for the support of their old age in the bank;— the money of widows and orphans likewise was lodg­ed there, as well as the monies of the merchants, [...] every other description of men.

[Page 24]THE amount of the old and new subscriptions arose up to the vast sum of nine hundred thousand dollars, which is the present amount of the stock of the bank, a vast sum indeed for the new beginnings of America, though small when compared with the immense stock of some European banks—With the deposits and this great ca­pital stock (which was permanent and not liable to be withdrawn by the proprietors as the deposited mo­nies were) with the deposits and the permanent stock, I say the bank was in condition with great safety to make such extensive negociations as could afford very capi­tal accommodations, both to the public and to private citi­zens, whenever their occasions and exigences made the assistance of the bank necessary to them; and so great was its success, and so amazing were its effects, that it appears by the bank books, that its cash account in one year, viz. from January 1, 1784, to January 1, 1785 (the third year of its operation) amounted to the almost incredible sum of 59,570,000 mexican dol­lars; and though the attacks upon the bank, and many other difficulties which much diminished its ne­gociations in the succeeding year, were so great as seemed almost fatal; yet such was its great internal strength, and the energy of its very nature, that its transactions from January 1, 1785, to January 1, 1786, amounted to about 37,000,000 dollars.

2. I NOW proceed to give some account of the difficulties which the bank has had to struggle with, from its first be­ginning down to this time. 1. The first difficulties arose from the novelty of the thing. The directors were enga­ged in a bu [...]ness 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.—These (if any [...] happened) by experience will be discovered, and [...] [...]dence may be corrected and avoided in future [Page 25] time, but they form no conclusion against the princi­ples of the bank or its natural utility. The same novelty of the thing prevented a general confidence in the bank at first among the people.—'Twas further unlucky, that the bank was first opened at a time when the people had so often been disappointed and deceived in every species of public propositions and engagements relative to money, that they knew not who they could trust; they hesitated least they should be taken in by the bank, as they had often been, by very numerous proposals to which their con­fidence had been courted. But the fidelity of the Di­rectors, and the perfect punctuality of all payments at the bank, soon got the better of this diffidence, and the bank gained an almost universal credit and confi­dence among the people, even among its professed and bitterest enemies.

2. ANOTHER difficulty with the bank has ever been, that the balance of foreign trade has been against Ameri­ca, ever since the bank was first established. This has occasioned such great exportations of cash as render it scarce, and of course embarrasses all cash business. This must deeply affect the bank, as it is obvious at first fight to every one.

3. ANOTHER sort of difficulties arose from nume­rous enemies, who, from different motives, embarrassed the operation of the bank much, they begun with crying up the public utility of the institution and its great pro­fits to the stockholders, and thought that one set of men ought not to monopolize the reputation and op­portunity of doing so much good, and engrossing such great profits to themselves, and withall, threw out hints, importing that the Directors were haughty, par­tial, and not obliging enough, &c. to remedy all which, in 1784, they set on foot a scheme for a new bank, by the name of the Bank of Pennsylvania, got large subscrip­tions for a fund to begin with, and petitioned the [...] sembly of this state for a charter, &c. not a wor [...] [...] [Page 26] heard all this time against the bank, as an institution hurtful to the states or individuals, but its mischiefs were made to grow out of its great utility, and salutary ef­fects.

THE directors, with much trouble, put a stop to this plan, by strongly urging the fatal consequences arising from two capital banks operating in one city, which might, perhaps, act in opposition to each other, and of course, destroy each other. They finally persuaded the sub­scribers to the new bank, to relinquish their scheme, and join the old bank, and add their subscriptions to it, which they at last agreed to, and so that difficulty was got over.

BUT the bank did not rest long, for soon after this last mentioned difficulty subsided, there arose a pretty numerous party in the state who adopted the scheme of paper money to be issued by our General Assembly. All the difficulty was to make it pass equal to hard money, and they had little hopes of this, unless the bank would give it a currency, which every body see plain enough that the Directors could not do. The bank therefore and the scheme for paper money, were considered as inconsistent with each other, and one or the other, of course, must fall. The party for paper money determined at once, that the bank must be sacrificed and united with all its other enemies, to decry it as an institution injurious to the state, and incompatible with the public safety. They raised (and declaimed upon) ma­ny objections to it, the most material of which (that I heard of) I have considered already in the foregoing pages of this essay. The matter was carried so far, that an act of the legislature of this state was obtained, and passed September 13, 1785, repealing the act of April 1, 1782, which granted the state charter to the bank, and also the act of March 18, 1782, which [...]ade it felony to counterfeit the bank bills, &c. and [...] stands the matter at present.

[Page 27]3. I NOW proceed to make some remarks on the present state of the bank.

1. NOTWITHSTANDING all the difficulties above mentioned, the bank is now in good condition; its in­ternal strength is not weakened; its funds are not di­minished, though its energy and extent of operati­on has been indeed somewhat lessened, as was observed before.

THE present funds or wealth of the bank, consists in, 1. the bank stock, about 900,000 Mexican dollars. 2. In the discounted bills now in the bank and payable to it. 3. The cash deposited in the bank for safe keep­ing, and which the owners may draw out whenever they please. 4. The furniture and utensils of the bank, and any small profits which may have lain over or arisen since the last dividend.

THE debts of the bank to be paid out of their stock are, 1. All the bank bills now in circulation. 2. All the bank credits or balances due to such persons as have deposits in the bank; N. B. When both these are deducted from the stock, they leave a balance of about 900,000 dollars in favor of the bank.

3. THE legal establishment of this bank is derived from the charter of Congress, of December 31, 1781; from the charter of the state of Massachusetts-Bay, of March 9, 1782; from the charter of Delaware state of Feb. 2, 1786; from the recognizance of the char­ter of Congress, publicly made by the state of Penn­sylvania, in their act of March 18, 1782, and their charter of incorporation of the bank, by their act of April 1, 1782: But 'tis to be observed that these [...] last mentioned acts of the state of Pennsylvania, were repealed by their act of September 13, 1785. This repeal of the said two acts of the legislature of [...] sylvania, has given rise to several very import [...] [...] [...] tions.

[Page 28] Question 1. WHETHER Congress has a right to establish a national bank, so as to make it such a legal institution as the laws of the states of the union are obliged to ac­knowledge or recognize?

1. I ANSWER, this objection is grounded principly on the second article of the confederation, viz. "Each state retains its sovereignty, freedom and independence; and every power, jurisdiction and right, which is not expressly delegated to the United States in Congress as­sembled." But the answer is easy, for, 1. A power of incorporating a national bank never did exist in a­ny of the states. They might erect banks, or any other corporation, and call them by what name they pleased, but their authority, like that of all their other laws, must be limited by the bounds of the state, and could not extend beyound them. Nor,

2. DOES this act of Congress limit the power of any of the states, they still retain and may exercise every power, jurisdiction and right of incorporating banks, as fully as ever they had them: For, 3. the said second article of confederation, does not restrain Congress from having or exercising any sovereignty, power, ju­risdiction or right, whatever; it only restrains them from exercising it in such manner as to deprive the states of it. Notwithstanding all the sovereignty and power of Congress, they shall ever be so limited, that each state shall retain its own sovereignty, power, &c. concurrent jurisdictions often exist together without the least restraint of each other.

2. THE act of Congress incorporating the bank, is an act of finance, they considered it most expressly as a means, a very important means of finance, which is a branch of power that most undoubtedly falls within their authority or jurisdiction. They are not expressly [...]mpowered, indeed, to appoint a Financier, give him [...]ructions, receive his plans, or form a bank. But, [Page 29] as all those were necessary means of promoting the general interest, the liberties and general welfare of the states, which are the grand and most acknow­ledged objects of the confederation, they are doubtless comprehended within its powers.

3. THE confederation (article 9) empowers Con­gress to borrow money on the credit of the states, and this certainly implies a power to find or procure somebody who will lend it to them, and this they effected to a great degree by incorporating the bank, which suppli­ed them to a very large amount—They owed the bank, at one time 400,000 Mexican dollars, for money lent them by the bank, and all the monies lent at different times to Congress, and to the different departments un­der their direction, amounted to above two million of Mexican dollars; and these loans were of such capital and essential service in that most deranged and weak state of the public finances, that (in the opinion of those best acquainted with the matter) the war could not have been continued without them.

THE bank also lent at different times to this state for its defence and other public purposes, above 130000 dollars, which certainly proves that the bank was very convenient to the public, and very necessary to the general welfare and general interest of it, and there­fore must be comprehended in the powers granted to Congress, to manage the general interest, and secure the liberties, defence and general welfare of the states.

4. THE independence, defence, and almost the very existence, of our present political establishments, depend [...] the bank, in case of an invasion of an enemy, for 'tis v [...] ry certain that in such case, due and necessary op [...] sition and defence could not be made by a depreciatin [...] currency; nor do I think it would be possible for [...] Congress or states to borrow elsewhere, monies [...] [...] cient, and in season, for our defence, or to [...] [Page 30] bills enough for that purpose, which would not de­preciate.—I apprehend I shall not be called on for a­ny proof of this; I therefore go on to infer, that Con­gress, who are expressly empowered to secure the de­fence, liberties, welfare and general interests of the states, are, of course, empowered to institute a bank, which is so apparently and essentially necessary to all these great purposes—It follows then, that those who oppose the bank, oppose the essential means of our defence, and, of course, lay us open to destruction, the first time any enemy shall invade our country.

5. IF we should admit that there was a defect in the powers of Congress to incorporate the bank, yet that defect is amply supplied by the subsequent recognizance of the states, their acquiescence in the institution, and parti­cipation of the benefits of it for a course of years; for a subsequent consent of the principal, is as good as a previ­ous order, to every purpose of establishment or legiti­mation of any act of a substitute.

ON the whole then, I conclude that the bank of North-America, by the ordinance of Congress for its incorporation, is a well established and legal institution, and as such ought to be considered and recognized by all the states, both in their laws and all judicial pro­ceedings, as far as the same may affect the said bank.

QUESTION II. What is the weaning, energy and ope­ration of the act of this state of March 18, 1782, making it felony to counterfeit the seal or bills of the bank? I an­swer,

1. IT carries in it the strongest recognizance or ac­ [...]owledgment of the legal establishment of the bank, and, of course, the authority and lawful force of the [...]dinance of Congress for its incorporation, on which [...] the legality of the bank then depended; for 'tis [...] 'tis ridiculous, 'tis infamous to suppose that [Page 31] the legislature of this state would by a most solemn act, make it felony, i. e. death, to counterfeit the seal and bills of any number of men, who had no legal right to make a seal, issue bills, or assume to themselves any o­ther powers, liberties or privileges of a corporate body.

2. THAT act implies the most solemn consent of this state to the aforesaid ordinance of Congress, and carries in it further, the nature and energy of a solemn stipulation and compact of this state with Congress, i. e. with all the states, to support that public measure of the union, with all the weight and authority which this state could give to it, in all the particulars or clauses mentioned or enacted in the said law. The public and vigorous support of the particular states, gives great force to an act of Congress, though it might be considered as ful­ly legal without it, gives confidence in the public mea­sures, and is a good reason and strong inducement to engage the public councils of the particular states, as well as individuals, strongly to exert themselves and risk their fortunes therein. Therefore,

3. THAT act can't, of right, be repealed by this state, without consent of Congress, i. e. of the other states of the union. It is a part of that support of a public measure of the union, on which the other states have, and ought to have, dependence and confidence. Mutual con­fidence is the end of the union, as that alone can produce defence and other exertions for the public welfare; all the states have therefore an interest in that support, a very great interest indeed, and can't be deprived of it, without violating the union—'tis a part of that band of union, which holds the states together; to take it [...] way therefore, is to weak [...]n the union, and, of co [...] to lessen its power of operation, and the benefi [...] [...] sulting from it. Indeed, if this state can repeal the sa [...] act, without consent of the other states, I do n [...] [...] why they may not go on to repeal all the acts the [...] ever made in support of the union, and all [...] [...] ers [Page 32] of it, even up to that act of theirs which consent­ed to, and adopted the confederation itself.

QUESTION III. What is the meaning, energy and effect of the act of this state of April 1, 1782, incorpora­ting the bank? I answer, 1. It carries in it the most pub­lic and full acquiescence and satisfaction of our legislature in the act of Congress for incorporating the bank; because it counts upon that act, without the least censure, but with most apparent approbation of it.

2. IT imports their approbation, because they shew a readiness to give it all the support which the autho­rity of this state could give, and add to its establish­ment the further sanction of a charter of this state, con­ceived in the very words of Congress.

3. THOUGH, as I take it, this state charter did not add any thing to the legality of the bank's establish­ment under the charter of Congress, yet it served to obvi­ate and satisfy the prejudices of many people, who had formed an opinion, that it would be safer to trust their property in the bank, with a state charter, than without one, and on that account withheld their sub­scriptions till the state charter was made. I never heard that any body, at that time, disputed or called in ques­tion the legal authority of Congress to give a charter to the bank; but the public faith, plighted by Con­gress, relating to money, had been at that time so of­ten and recently violated, that very little confidence was placed, by many people, in their public acts or resolutions of any sort, and therefore thought them­selves more secure under a state charter, than they [...]ould be under a charter of Congress, without such [...]ort: And this I take to be the true reason why [...]he president and directors of the bank applied to our [...]bly for a state charter, which manifestly removed [...] prejudices and obstacles which operated against [...], as it was plain that subscriptions to it were of­fered [Page 33] faster, and bank stock was more coveted after the state charter was obtained than before; there­fore, I think it very evident that,

4. THIS act operated by way of strong inducement and encouragement to very many citizens, as well as stran­gers, to subscribe to the bank, and trust their property in it; and that the act was purposely made with intenti­on that it might have this operation and effect, and therefore ought to secure the proprietors from any dis­appointment, as far as the whole force of the act can do it; for certainly it cannot be justifiable in any state to hold out encouragement to the people, to draw them into a snare, and then leave them in the lurch.

5. WHATEVER might be the effect of this act on the bank, by way of aiding the legality of its establish­ment, or giving it support as a continental institution, there is no doubt but it had this one perfect effect, viz. It incorporated the subscribers to the bank into a legal company, and instituted a complete, established, and legal bank of Pennsylvania, though by the name of the president, directors and company of the bank of North-America, for any state may give what name or title they please to their corporations, though they can't extend their authority or privileges beyond their own jurisdiction. This act therefore undoubtedly brought the bank under the cognizance of the laws of Penn­sylvania, and entitled the company, and every propri­etor of it, to the full protection of these laws. Whi­ther this put them into any better condition than th [...] were before, made their establishment any more lega [...] or increased their right to the protection of the law [...] Pennsylvania, or not, may be a question; but it [...] be no question, that very many people were of this [...] pinion, and governed their conduct by it. 'Tis [...] ther certain that this state charter may event [...] prove of most capital service to the stockholder [...] it is possible that Congress may repeal their [...] [Page 34] for incorporating the bank, or by some other act of so­vereignty, may vacate its charter (for strange things happen sometimes) or the union of the thirteen states, may, by some means or other, be dissolved (which I think would soon happen, if each state should with­draw its supports) and by that means the authority of all their acts might cease, and of course their charter of the bank might fall with the rest. Yet, I say (all these mishaps, notwithstanding) tinder the charter of Pennsylvania, the bank would continue to be a legal state establishment, and might go on with its ne­gociations, and in short pursue the whole business, which the great interests of the concern might make ne­cessary.

QUESTION 4. Can the act of 18th March, 1782, (making it felony to counterfeit bank bills, &c.) and that of April 1, 1782 (incorporating the bank) I say, can these acts of right be repealed by our legislature, without consent of the parties interested—I give my answer in the negative, and for this my opinion I beg the reader's candid attention to the following reasons, which appear to me to deserve great consideration, e­ven by those who may not think them of sufficient force to justify my conclusion.

1. THESE acts vest a right, privilege and interest, i. e. a valuable property in all the stockholders of the bank, and therefore can't, of right, be repealed by any act of the legislature, without the consent of the stockholders. These acts are of the nature of bargains or contracts between the legislature and the stockholders, in which the sti­ [...]ulations were, that in consideration that the stock­ [...]ders had, or should, put their money into the bank, [...]e legislature would give such support and legal esta­ [...]ishment to the bank, as should enable them to make [...] enjoy all the advantages and profits which should [...] from it, under the firm protection of the law; [...] encouragement, the stockholders held or pla­ced [Page 35] their fortunes in the bank, and the legislature passed the said acts in support of it, and so the bar­gain was finished. I take it that, when the act of the legislature vests in, or grants to, any individual or company of men, on valuable consideration (i. e. for which the grantee pays his money) any valuable right, privilege, interest or property, the grantees instantly be­come legally seized of such right, which thereby becomes as much guarantied or warranted to them by the law of the land, as is any other property whatever, which they may or can possess, and therefore they can't be devested or de­prived of it by any act of the legislature, any more than of their lands, cattle, furniture or any other estate, of which they are lawful owners, and which they hold under the full protection of the law.

THE sort of acts of the legislature, which I here mean (that vest a right or interest in any individual or company of men) are such as these, viz. An act grant­ing a commission of sewers to owners of meadows, who expend much money in banking and ditching them, to make them useful to the public and their owners.— An act granting toll to persons who shall build a bridge, for which they contribute their money.—An act grant­ing wild lands to people who will cultivate and improve them, and who expend their money for that purpose. Any acts for supporting and incorporating the subscribers of a bank, in consideration of large sums of money sub­scribed, or contributed to it, and in prospects of gr [...] be [...]efits resulting from it, both to the public and [...] the stockholders.—An act for incorporating churches, universities, hospitals, schools, &c. in consideration of money paid, or to be paid by the contributors, &c. [...]c.

I CONCEIVE that all acts of this kind, [...] rights, privileges or interests in the grantees (wh [...] [...] by gain such protection of the laws in the [...] of them) that they can't be devested or depri [...] [...] act of repeal of the charters or acts which [...]ive [...] or by any other act of the legislature whatever [...]

[Page 36]2. THE 2d great reason of this is, that the declara­tion of rights (which is part of the constitution of this state) gives every citizen a right to be protected in the enjoy­ment of his property—It knows but two ways by which the subject can be devested of his lawful property. 1. By crime and forfeiture, and 2. By his own contract or consent; if his property is challenged or demanded of him, in either of these ways, or any other way, let the controversy be of what nature soever, respecting pro­perty, he is entitled to a fair tryal by jury. (See arti­cles 8.9 and 11) This can be had no where but in a judicial court. The General Assembly are not such a court—they have the legislative, but not the executive or judicial power of the state; they can neither impannel a jury, or make a judicial decision without one, much less can they deprive any individual or company of subjects of any of their legal rights, interests, property or pri­vileges, without any tryal, summons or examination at all, by any act or repeal of acts whatever, which they can make.

3. I TAKE it, that the declaration of rights is of supe­rior authority to any act which the General Assembly can make, and will controul, and even render totally null and void any act of the assembly which infringes it, and will, and ought to be considered so by the judges of our court whenever the same may be pleaded before them: For, when two contradictory laws are pleaded before a court, 'tis impossible but the one or the other must be judged void; and if one of these laws appears to be grounded on a superior authority to that of the other, there can be no doubt but the superior authority must controul the lesser.

I CONSIDER the assembly as the mere creatures of their constituents, and acting merely by a substituted power; and the declaration of rights, I consider as the [...] instructions which they receive from their con­ [...] [...], by which they are bound to regulate their con­duct, [Page 37] and by which their power and authority is altogether limited. This doctrine ought to be brought into full view, and to be recognized by every subject, in its whole importance and energy, whenever we see our assembly infringing the declaration of rights, in so ca­pital and alarming an instance, as to make any act whatever, which will in its operation, unavoidably and e­ventually deprive any subject, or number of subjects, of any right, interest or property, without tryal by jury.

THE very persons whose wishes or prejudices may be gratified by such acts of the legislature ought to trem­ble at their consequences, for the two edged sword, which has one edge turned against our enemy, has an­other which may be turned against ourselves, i. e. it can cut both sides alike, and is equally qualified to wound both parties, whenever it may be applied to them.

CHARTERS (or rights of individuals or companies, secured by an act of the state) have ever been considered as a kind of sacred things, not to be vacated by a bare holding up a few hands, and soiling a page of paper, without any further previous or subsequent forms or ceremonies; but in all wise states, have ever been considered as securities of such capital consequence, that any attempts to destroy them have ever excited a general alarm, and have rarely happened but in times of great corruption of government and dangerous en­croachments of arbitrary power.—I think it, on the whole, very manifest, that a legislature, which for va­luable consideration paid, has by public act sold and granted certain valuable rights, privileges or interest [...] [...] any individual or company of men; I say, such le­gislature have no more right by repeal of their act [...] [...] cate the title and destroy the estate of such grantees [...] to release themselves, than any private contractor ha [...] to release himself and refuse to execute his own [...] [...] tract, whenever he grows sick of his bargain▪ [...] [Page 38] I think the sacred force of contracts binds stronger in an act of state, than in the act of an individual, because the whole government is injured and weakened by a viola­tion of the public faith, but the vacillation of a private man, can produce no more than private damages; but, as public faith is an old threadbare topic of argument, and is as much out of fashion as going to church or reading the bible, and has been dined in the ears of some folks till, like the doctrine of repentance to sin­ners, it rather nauseates than convicts, I will forbear pressing it further at this time, as I wish not to dis­gust but to persuade.

4. THE ordinance of Congress for granting the Charter of the bank, is a measure of the union, so­lemnly recognized by this state (in the two repealed acts) in which all the states are interested, and is there­fore of such high authority as controuls our states to such a degree, that any attempts of this state (by an act of repeal, or any other act) to withdraw their sup­port, and thereby weaken and embarrass such measure of the union, must be void, ipso facto, in itself; for, I take it, that every act of Congress appointing or di­recting any measure of the union, when recognized by the states, either by their overt act of approbation, or by long acquiescence and practice, is of superior autho­rity to any act of any of the states, nor does it remain in the power of any particular state to withdraw their sup­port from it, or to release and discharge themselves from their obligations to it, or make any act which shall, in its operation, lessen the energy and effect of it. But I have touched on this before, and so need not enlarge on it further in this place.

5. THE act of repeal (September 13th last) deprives a great number of our citizens and strangers of their rights, privileges and property to a vast amount, and the utter ruin of many families—rights, privileges and property which were guarantied and secured to them forever by the most solemn act of our legislature, and of course [Page 39] by the whole force and power of the law; and that too by an act of mere sovereignty, without so much as al­ledging against them any crime by which they have for­feited, or contract by which they have alienated them, and without any summons, or tryal, or judgment of court, or ver­dict of jury. This is so directly in the very face of our declaration of rights, as manifestly infringes it, and of course renders the act void.—This is indeed rather an epitome of what I said before than a new argument, but the immensity of the loss or damage occasioned by the said act of repeal, may, perhaps, engage the read­er's attention, and set the subject in a stronger light of importance, than it might appear in, were the conse­quences less fatal and ruinous both to the union in ge­neral, to each of the states and all the individuals who are concerned in the bank.

BUT admitting that the act of 13th September last, for repealing the said acts of March 18, 1782, and of April 1, 1782, is to all intents and purposes valid in law, and of course that the bank is thereby deprived of all the support and legal establishment which it once received from the said laws, when they were in force, there arises another qustion, viz.

QUESTION 5. In what condition does the said act of repeal leave the bank? I answer, 1. In point of its leg [...] ity, the said act of repeal leaves the bank just where [...] said repealed acts found it when they were first m [...] [...] the repeal takes away no more than the acts them [...] gave, and of course if the bank was a legal estab [...]h­ment before these acts were made, it continues [...] after the repeal of them: Therefore, 2. The pre [...]t, directors and company of the bank remain a l [...] [...] [...] porate body, under the charter of Congress, [...] do all acts as such in the same manner as be [...] [...] said repealed acts of this state were made.

UPON the whole matter, I think it [...] [Page 40] the supreme authority of all states under all forms of go­vernment, whether monarchical, oligarchal or demo­cratical (a theocrary only excepted) is lodged in the bo­dy of the people; 1. Because the rights to be secured by, and which are the sole end of all civil government, are vested in them; and 2. Because the great force, or strength, which must support all civil governments is lodged in them, and of course all pacta conventa or capital con­stitutions established by them, do bind and controul all authorities whatever, which act under them, and of course it appears, that the legislature of this state have not an original but a derived authority, which of course is not absolute but limited; 'tis limited 1, by the laws of God, 2, by the constitution of this state, and 3, by the confederation or union of the thirteen states, and of course by every legal act of Congress under that union, for the general wel­fare of the states; therefore, if our legislature should make an act to repeal the ten commandments, or to in­fringe the constitution, or to destroy or weaken the u­nion, or any legal measures of Congress, it would of course, be ipso facto void; further, I take it, that our General Assembly are limited and tied down to the sort or kind of authority which is given to them; all acts proper for a legislative body, they are empowered to do, subject to the aforesaid limitations, but they cannot as­sume to themselves, or exercise the judicial or execu­tive powers of government; these powers are totally out of their commission or jurisdiction, and they can no more intrude on, or exercise the authority of these de­partments, than a sheriff can obtrude himself on the judge's seat, or a chief justice serve a writ; therefore, it follows that if the legislature should pass an act which, by its operation, takes away the life, liberty or lawful rights, privileges or property of any subject, i. e. such as the subject holds under the protection and sanction of the law, it must be void; for if any thing of this sort is to [...] done in the state, or if any controversy or question [...] [...]t is to be decided, the constitution has ordain­ed a [...] method, a quite different court or authority, [Page 41] in and by which it must be done. It is no objection to this, to say, that much and many important things must be left to necessity and the discretion of the assem­bly, for such necessity must exist before it can operate or justify any act grounded on it, and because much is left to the discretion of the assembly, it does not follow, that they have a right to throw by all descretion and act with­out any.

BUT waiving all questions of law, I beg to consi­der the bank one moment in the light of prudence▪ supposing the bank and all its operations could be broke up and entirely stoped on March 1 next, what would be the consequence? 1. The great and usual circulati­on of cash (through which 37,000,000 dollars were negociated last year) would at once be stopped. 2. All discounted bills must immediately be paid or sued, which would ruin very many, I think I may say, scores of substantial families; and their failures would occasion, 3. A great loss to the bank, and of course to the stockholders. And 4. The stockholders must lye out of their money till the bank accounts could be settled, which would probably be some years. 5. All the monies belonging to subscribers out of the state, must be carried out of it, as fast as they could be collected; and 6. A most fatal wound would be given to our credit, as well as to all our trade, and e­very kind of business which depends on the circulation of cash.—Who but an enemy would wish for such ca­lamities, or promote the means of them?

I will conclude my essay on this very important and in­teresting subject, with only observing, that I have stated the facts with all care, and the best information, and I be­lieve, with exactness and truth; should I have erred, I am ready to submit to better information; the sentiments and reasonings are open and obvious to every one, and, I wish, may be received and considered in the [...]e light of importance in which they appear to [...]. I [Page 42] have no interest in the subject distinct from that of my fellow citizens, and as I would not be willing to be misled myself, so neither do I wish to lead them into error. Magna est veritas and praevalebit.

Philadelphia, February 10, 1786.