AS preliminary to a particular view of leading principles of the proposed institution, it may be proper to submit for consideration— 1st. Certain disadvantages, that appear to be insepa­rable from [...] Bank, whose capital is inadequate to the demands of the trade of the place, where esta­blished. 2d. Certain advantages connected with a Bank, whose capital is commensurate to the demands originating in the course of a regularly growing trade; and, 3d. To examine certain objections that may be supposed to militate against the establishment of the Bank in contemplation.

I. As to the disadvantages inseparable from a Bank whose capital is inadequate to the demands of the trade of the place where established.

Were [...] possible [...] a Bank of small or contracted [...], to administer to the demands of an exten­sive and growing trade, or to issue its notes to any amount, at pleasure, and keep them in circulation, it would be wholly unnecessary to enlarge its funds, or establish new Banks with capitals more corres­pondent to the circumstances of trade. As this, however, is impossible, as a Bank of small capital cannot be made to supply a great and growing de­mand, as the issues of every Bank is limitted by imperious circumstances; as it is an ascertained point in banking, that the amount of notes which can be supported in circulation must, generally speaking, be in a certain proportion to the funds of the Bank; it is evident, therefore, that in places [Page 9] where the demand reaches beyond this proportion, that new Banks may be erected to supply the ex­cess, without intrenching upon the reasonable pro­fits of existing ones; and that they ought to be erected, as a security against such Banks attempting to extend their paper to the whole of the demand.

It is a fact ascertained by experience, that when­ever the capital of a Bank is inadequate to the na­tural calls originating in a regular trade, that one of two things must happpen. 1st. The Bank being incompetent to the demand will spend itself in a few large loans, which, in all probability, will run in one channel. Or, 2d. It will divide its loans among the different applicants, without favour or partiality, or in reference only to their relative solidity. If the Bank takes the first course, the interest of the sel­lers of produce must suffer, because the great loans, by centring in a few buyers, will enable them to dictate the price of the produce brought to market. If the second, it must operate against the general interest of trade, because the class of buyers will not get enough to excite a spirited competition a­mong them, which, of itself, always raises the price of produce. Again, taking the first alterna­tive for the practice of the Bank, the few who en­gross the principal loans, will have it in their power to influence, to a certain degree, not only the price of produce, but the price of bills of exchange, by which double operation, the community may be considerable losers, whilst, in the other alterna­tive, agriculture cannot fail to be affected through the inadequacy of the means to keep up a brisk de­mand for its productions. These consequences are inevitable.

But this is not all. We have considered it as probable only, that the large loans of such a Bank will centre in the same persons, or run in the same channel: Should, however, the charter be so con­structed [Page 10] as to admit of the same men being annually chosen directors, from probable, it becomes abso­lutely certain, that these loans, will in time, be either shared among the directors themselves (should they be men in business, and want them) or among their respective favourites. It is easy to conceive the dis­contents, murmurs, and partialities that must take place under such a state of things, as well as the meanness of solicitation and dependence, which it is calculated to beget in the whole body of traders.

We have said also, that there is a certain ratio, which ought always to be observed between the pa­per of a Bank and its capital. Inasmuch, however, as a Bank of contracted capital will find itself safe under certain circumstances, in throwing paper into circulation beyond that standard, and as such op­portunities may frequently occur, especially in the United States, there is much room for believing that they will be used with a view to larger divi­dends, unless prevented by charter.

What follows? As the loans which exceed this proportion, can enjoy only a momentanious exist­ence; as the circumstances which induced them change; as the surplus must quickly return upon the Bank from circulation, the Bank, in order to pre­vent a stoppage of payment, must suddenly bring its discounts within the strength of its capital to face; in other words, must suspend so much of its loans as has exceeded this proportion. It follows, that the portion of its debtors who received the loans forming this excess, must be lest to satisfy their bank obligations, by means that often involve great pecuniary sacrifices, if not positive ruin, while it is fairly to be presumed that the sufferers in such con­junctures will seldom be met with among the directors or their favourites. Hence it is that we always find in places of great trade, where Banks of small capital only exist, those usurious practices that disap­pear [Page 11] after the creation of capitals sufficient to support an uniform course of discounts, and prevent those frequent, sudden, and unexpected suspensions that favour, if not generate, usury.

The direct inference from these considerations is, that the general interest requires, either that such a Bank should be wholly prohibited or its capital sufficiently enlarged.

Were any further support of this inference requi­site, it maybe found in a recent application made by the directors of the Bank of Maryland, to the stockholders, to add to its funds, by a payment of 100 dollars upon each share; an application expressly bottomed upon the ground, that the capital of that Bank, is too small to answer any longer the ends of the institution.

We state also with pleasure, that the directors of the Bank of Maryland have not shewn any marks of public disapprobation to the progress of an in­stitution, calculated to obviate the evils annexed to contracted funds; on the contrary, they have openly countenanced its establishment, by becoming sub­scribers to it, and of course petitioners for a charter.

But perhaps it may be asked, will the erection of a Bank of larger capital, put an end to favouritism? will it extinguish usury? will it obviate all irregula­rity in discounts? We answer, it will no doubt gra­dually lessen them, as the capital of such a Bank is made to approximate the level of demand, and en­tirely remove them when it shall actually attain it.

Upon the whole then, there results, from what has been said, that private convenience and public safety, the interest of individuals and the general interest, will be better promoted and secured by a large than a small Bank capital.

But this idea will receive fuller illustration by ex­amining more in detail, according to the order we have proposed.

[Page 12]II. Certain advantages, connected with a Bank whose capital is commensurate to the demands ori­ginating in the course of a regularly growing trade.

Among the advantages of such a capital may be reckoned, 1st. Its affording a more certain and steady demand for the productions of the soil. 2d. Its tendency to lessen the prices of foreign imported manufactures to the consumers. 3d. Its increasing the general effort of national industry. And, 4th. Its enabling the state to make the best use of its na­tural and geographic advantages.

I. As to its affording a more certain and steady demand for the productions of the soil.

It is certainly an object of primary importance in a country like this, where it is so easy to augment the annual quantity of its productions, beyond the quantity of specie that can be employed to purchase them, to have at hand, an expansive capital, ready to be applied to every new augmentation of pro­duce. If there should exist no such capital, it is evident that the progress of agriculture must be slow, and as evident, if there does, that its progress will be considerably accelerated.

Where a capital of this nature can be created within a state, the trader, by a loan, anticipative of a debt that is owing to him, or the sale of a cargo of goods, will find himself in a situation to buy pro­duce, as fast as it can be shipped, and the whole class of purchasers (instead of a few) enabled and in­cited, to enter into competition for it, with each other, a circumstance, highly favourable to an increase of price and a regular and steady demand. Hence a Bank of extensive capital, by multiplying the buy­ers of produce, and the means to buy, as necessarily promotes agriculture, as mild sunshine and gentle showers promote vegetation.

A capital of this kind has another operation [Page 13] tending to the same point. By its facilitating the means to buy the materials for manufactures; and to the intermediate purchasers, between the con­sumers and maker, the means to pay for them, it fa­vours their establishment, & promotes their growth; consequently creates a new demand for our produce by creating a new body of consumers. It ficilitates likewise, by the introduction of more wealth, the amelioration of roads, bridges and inland naviga­tion, by means of which the expence of transpor­tation is lessened, especially from the distant coun­ties, to the ports of exportation; and consequently the profits of the farmer proportionably increased.

It merits a remark also, that in years of foreign good crops, when the demand for our produce to supply the foreign consumption must decrease, the augmentation in the general wealth of the country, introduced by such a capital, must necessarily lead to the establishment of magazines of grain, to be held in readiness for years of foreign bad crops, or our in­creased internal consumption, a measure that must prevent any great or sudden lowering of prices, and consequently calculated to maintain a steadiness of demand, highly favourable to agriculture.

II. As to its tendency to lessen the price of fo­reign imported manufactures to the consumers.

A nation that can buy what it wants with cash, is always sure to purchase on better terms than the na­tion which is obliged to buy upon credit. It is a fact well known to the mercantile class, that every cargo of goods imported from Europe, upon a credit, is of the nature of a loan to this country, for which it is charged, on the original invoice, from 15 to 30 per cent. higher than if they had been bought with ready money, or, which amounts to the same thing, than if produce had been shipped to have paid for them when ordered, besides incurring, after the cre­dit [Page 14] expires, at the rate of compound interest, till such time as the debt is discharged.

Such being the case, let us endeavour to ascertain the annual amount of these loans, in order to appreci­ate fully what we annually pay for them, and the im­portance of the means by which they may be avoid­ed.

"It is established, by a recent investigation in Great-Britain, that in the year 1791, the United States of America took from that kingdom (exclu­sive of Ireland and the British East Indies, from which they import many manufactures) the value in Bri­tish manufactures of £3,929,771:12:8 ster." Now, as Maryland contains about a 12th part of the inhabitants of the union, it is reasonable to apportion to her one 12th part of these importations. It follows therefore, that Maryland receives annually of British manufac­tures, to the value of about 1,500,000 dollars.

How much of this sum is obtained upon credit? A writer, whose duty it was to get the best information on this point, asserts "that at least four fifths of the importations from Europe into the American states, were at all times made upon credit."^* It must be obvious that numerical precision on such a subject is not to be expected. Admitting, however, the pro­portion here quoted to come near the fact, and aver­aging the cost of credit to the state at 20 per cent. only upon four fifths of its importations from Great Britain, there is paid for this credit 240,000 dollars, annually, more than if produce could be exported to buy them at cash prices, independent of what is paid to other nations.

Is there no way by which the state may be reliev­ed from so heavy an interest? Is there a state in the union which obtains her European manufactures on better terms? And is that state so situated as to at­tract, [Page 15] by this means, any part of the trade peculiar to Maryland?

There are at this moment, three Banks in Phi­ladelphia, whose joint specie capitals may be stated at about seven millions of dollars; and two in Bal­timore, whose united capitals make only about 700,000 dollars. Supposing, then, the European importations to be neatly equal into these towns, it results, that the Bank facilities enjoyed by the Phi­ladelphia merchants, whether applied to the ship­ment of produce, to lay in their European manu­factures at cash prices, or to avoid paying compound interest after the credit expires, is above eight times greater than the bank facilities that can be applied to the same purposes by the Baltimore merchant.

What must be the final operation of this disparity in the means to export produce? Need it be plainly divulged? Need it be insisted upon how seriously and deeply its continuance must affect the dearest interests of Maryland, and how important it is that the Bank capitals of the latter should be brought as near as possible, and as soon as possible, to a level with the former? Can the utility of such a measure ad­mit of a moment's hesitation?

Should the spirit of system, seek a more compen­dious mode to rid us of this heavy interest, or re­commend a total abstinence from European im­portations, we would observe, that the experience of 160 years past, proves, that the people will have them, and our acknowledged deficiency of domestic manufactures, that they are absolutely indispensible.

There remains therefore, no other alternative for Maryland, than to continue to procure abroad, up­on credit, the manufactures which she cannot do without, or to generate a bank capital which may enable the state to introduce its importations at cash prices, till such time as the establishment and in­crease [Page 16] of her own manufactures shall relieve from the necessity of resorting to foreign ones.

Perhaps it may be said on this occasion, that Banks tend to raise the prices of imported manufac­tures, inasmuch as they have actually come higher to the consumers since their introduction. We shall not deny the fact as to the rise on many articles of foreign importation; but we deny the inference drawn from it, to be true. Were it a just inference, foreign manufactures ought to be highest, where there is most Bank capital, the reverse of which is actually the case. Were it true, the increase in the circulating medium occasioned by Bank money, ought to be so great as to account of itself, for the increase in price, whereas it is demonstrable that the Banks do not circulate more paper than would otherwise circulate of goldor silver, the general trade and industry being the same. We must therefore resort to other sources to explain the phenomenon.

These are, 1st. the increased taxes of foreign na­tions, which fall upon and enhance the prices of their manufactures. This connection of things, by which a non-manufacturing nation becomes, as it were, contributary to the wars or taxes of the ma­nufacturing nation, ought to work a two-fold ef­fect. It ought to induce the nation that depends upon another for its manufactures, to use every means in its power to encourage its own, in order to free itself from such a state of dependence; and the nation furnishing them, with an anxiety to avoid those situations, which, augmenting their prices, necessarily precipitate such an event. 2d. The duties laid by the United States upon imported ar­ticles, which serve to swell their prices to the con­sumers.

To these might be subjoined some other causes, which, though temporary in their nature, apply strongly in the present case, such as higher wages [Page 17] to seamen, higher insurance, greater expence in provisioning vessels, and of course, higher freights, the latter only being one hundred per centum more than in times of peace; circumstances which un­equivocally affect the prices of imported articles.

Giving therefore, to these several items their due weight in the argument, any supposed increase of the circulating medium by Bank money, cannot, with­out a violent hypothesis, be charged with having pro­duced an effect so clearly deducible from other causes.

But before dismissing this objection we shall take the liberty to reinforce what we have advanced, by the opinions of two well known respectable writers.

Mr. Smith, in his Wealth of Nations, page 80, says, that "As the quantity of gold and silver which is taken from the currency, (to be lodged in the Bank,) is always equal to the quantity of paper which is added to it, paper money does not necessarily in­crease tha quantity of the whole currency."

And again, in page 79, vol. 2, the same writer remarks, "Whatever is bought or sold for a pa­per money, payable on demand, must necessarily be bought or sold as cheap as it could have been for gold or silver," the reason of which is, that the one is precisely of the same value as the other.

This objection, therefore, to Bank money, to be en­titled to the least respect, must be acknowledged by those who use it, to apply as strong against an equal quantity of gold or silver, as Bank money. Hence, as an increase of gold or silver must produce the same effects in society, as a similar increase of Bank paper, it results, that if it is found policy to prohibit the one, it is no less found policy to prohibit the other.

But what is the real source and answer to this ob­jection? Is it not found in the increased and in­creasing state of the nation's prosperity, in addition to the extraneous causes already suggested?

[Page 18]We shall trouble the house with one further quo­tation, from Douglas's Political Survey of Great-Britain.

"This, of all others", he observes (vol 2. p. 242) "is the argument most relied on by those writers on this and the other side of the water, who question the utility of paper credit. This, say they, without affording the solid support of gold and silver, alike valued in all countries, exposes us to the only evil too great a plenty of money can create—the ad­vancing the prices of all the necessaries and con­veniences of life. But is this the fact? May not two things exist at the same time, without one being either the cause or effect of the other? In the reign of queen Elizabeth, houses, lands, &c. rose con­siderably in value, though paper was not then intro­duced. May not the same, which operated at that time, and not paper credit, be the cause now? If we look closely into the matter, perhaps we may find that so it really is.

"In the reign of queen Elizabeth, from a variety of causes, which have been already explained, trade began to spread, manufactures to increase, and ma­ny new branches of foreign commerce were opened. In consequence of this, numbers of families grew into ease and independence. This caused a greater consumption of things necessary, and augmented the desire of conveniences. A constant and grow­ing demand raised the price. Trade being more flourishing, manufactures more numerous, commerce much further extended, things are become still dearer from the same natural causes: For if the fruits of industry increase, however that may be effected, the consumers will be more numerous, the consumption larger, and the prices of many things higher. But the people, by living better, will not grow poorer. As the fact, so the knowledge of this truth, is as old as the days of Elizabeth, when they did not con­ceive that money was the only property, but were wise [Page 19] enough to comprehend, that he who possessed such things as were worth money, was really worth as much as those things would fetch. A truth obvious then, and which, remaining a truth, will ever ap­pear so upon a little reflection: And yet the over­looking it, is the sole cause of this heavy charge on paper credit."^*

III. As to its increasing the general effort of na­tional industry:

We observe upon this effect of Banks of extensive capitals, that it is not their faculty to augment the quantity of money, but their faculty of augment­ing the fruits of industry, that constitute the basis of their public utility. For unless Banks were in­strumental to the raising of more produce, to the erection and fabrication of more domestic manufac­tures, to more internal improvement of every de­scription, and to a more extended and profitable foreign commerce, and a more favourable balance of trade, any momentary increase of money they might oocasion, would be of no real service to the country.

It is this precous faculty of augmenting the fruits of industry, that confers upon Banks a superiority over every other mode of throwing money into cir­culation; for it may be safely affirmed, that no given quantity of specie, lent by government to individuals, upon a long credit, or presented to them gratis, could excite an equal degree of national improve­ment, industry, and wealth, as an equal sum of money, distributed upon loan, by means of a well administered Bank. This idea may be illustrated, by attending to the circumstances under which [Page 20] Bank money is emitted and kept in circulation. Whoever obtains a credit at Bank, is compelled to observe the most rigourous punctuality. Whoever, in turn, obtains a credit from him, is necessitated to a like observance of his contract; a condition, which, gradually extending itself to every class of the community, exacts from the whole, an incessant and systematic industry, capable of bringing to market commodities equivalent to the amount of the general credit obtained.

Thus, bank money, by compelling, as it were, the community to draw from the earth and their labour, more productions, gives the strongest possible impul­sion to genius, and industry.

Hence too it is, that Banks must increase, instead of diminish, the quantity of the precious metals; for, in proportion as such establishments augment the exportation of those productions, by the sale of which specie is brought into the country, and enable us to buy foreign manufactures cheaper, which takes less of it from us, or, facilitates the erection of do­mestic manufactures, which retains still more of it with us, by their rendering foreign ones unnecessary, they inevitably augment the quantity of gold and silver.

Banks, therefore, may justly be considered as a valuable instrument, to swell the general tide of in­dustry, and consequently, the general mass of natio­nal wealth and prosperity.

VI. As to Banks of extensive capital enabling the state to make the best use of its natural and geogra­phic advantages.

The chief advantage that Pennsylvania has over Maryland, in a commercial point of view, does not consist in her being more favourably situated for trade, or in having a soil better fitted for raising ex­portable productions, or harbours better calculated for commerce, but in the vast superiority of Bank [Page 21] capitals, which she has accumulated at Philadelphia, by means of which, that market is found to be more steady, and to afford, generally speaking, a higher price for produce, than any market in Maryland.

In stating this fact, we dismiss from our thoughts the narrow idea of drawing from Philadelphia, any part of that trade to which it is entitled, from po­sition and the industry of its inhabitants. We con­tend, only, for the propriety of such Bank establish­ments in Maryland, as may enable its citizens, to profit by their own resources and geographic situa­tion. Is there a state in the union more favoura­bly situated for trade, or whose productions are more wanted abroad, or whose inhabitants are more capable of enterprise? What want of policy, then, to exclude the use of the means, which has been so successfully employed by a sister state, to improve similar advantages.

The general welfare requires, that no town or place should be neglected; but, that the advantages which may be peculiar to each, should be improved to the extent of which they are susceptible. The harmony, as well as prosperity of the whole, calls upon statesmen to give efficacy to this maxim; for it is only by each state, in conjunction with the ge­neral government, enabling its citizens to extract from their respective situations, the advantages pe­culiar to each, that either a state, or the United States, can attain to that high degree of wealth, numbers, and greatness, to which they seem des­tined.

As to the trade of Maryland, it must be consi­dered as still in its infancy, at least, as far distant from that maturity of growth to which it may be carried, by a due augmentation of pecuniary as­sistance. Can any one seriously contemplate our uncultivated lands,—our defective husbandry—our thin population,—our irregular and unsteady mark­ets, [Page 22] —the unimproved condition of our roads and inland navigation,—our inabilitity, without the aid of foreign commissions, agents, and extra state mo­ney, to buy up our productions for exportation—our want of internal manufactures—our insufficiency of funds to participate in the fisheries, and other enrich­ing sources of domestic and foreign commerce—and hesitate to pronounce, that the field for the employ­ment of money, is almost unmeasurable, and that the largest sums which could possibly be brought in­to action, would be inadequate to its full cultivation. Ah, may no sinister policy, or fascinating reasoning, cloud a prospect, that cannot be viewed with indif­ference, or obstruct the attainment of those means, so essential to its prosperous enjoyment.

In pursuing the line that we have marked for our observations, we are next to examine.

III. Certain ojections that may be supposed to mi­litate against the establishment of the Bank in con­templation.

Were we to trace the opposition to Banks in the different countries where they have been established, we should find, that it has uniformly originated in men of the following descriptions.—Whenever two parties have existed in the state, the apprehensions of one of them, that the institution would be con­verted into a political engine by the other against them, has never failed to call up the ingenuity of reasoning to prevent their erection. Another pha­lanx of their enemies, not less formidable, has con­sisted of men in the practice of employing their ca­pitals in profitable monopolies, which it enabled them to create, or in advantages, in the way of commerce, which it enabled them to take, or in sell­ing their money to government or individuals, in their exigencies and distresses, at a price, much be­yond its value, or the common rate of interest. As Banks seemed to threaten the first, and actually af­fected [Page 23] the profits of the latter descriptions, one cannot be surprised at the resistance made to their establish­ment by such men. But as the evils predicted by these opposers, have been contradicted by the experience of every country, where Banks have been erected, and the arguments they have used, refuted by wri­ters, having neither party nor special interest con­nected with the issue, we should, therefore, have passed the subject over without a single remark, had it not been for the opportunity it presented us with, of entering into certain details and explanations, re­lative to the construction, solidity and administration of well organised Banks, which can only be inti­mately known to those who may have made it a par­ticular object of study and investigation.

We shall, in this view, condense the objections that lead to these explanations, under two heads. 1st. We shall consider, whether Bank notes, as being of the nature of bills of credit or state paper, may not, like them, depreciate, and injure the country. And, 2d. Whether Banks are not obstructive to agricul­tural improvements, and promotive only of com­merce.

I. Whether Bank notes, as being of the nature of bills of credit or state paper, may not, like them, depreciate and injure the country.

To this we observe, generally, that though bills of credit, under the colony government, did not, and could not, uniformly preserve the same value as the specie they represented, nevertheless, they were of great advantage to the community. If we com­mence our enquiry on this point with the first emis­sion of 1733, and follow them down to the last colo­ny emission of 1773, we shall find ample reason to attribute a certain proportion of the extension of our trade and improvements, during that period, to their operation. As an example: When the first colony emission took place, wheat sold, in the ports [Page 24] of exportation, at one third of a dollar per bushel; when the last, at three quauters of a dollar; so that, in the course of 40 years, bills of credit were instru­mental in more than doubling the price of produce. Instead, therefore, of their forming an objection a­gainst Bank bills, they furnish a conclusive argu­ment in their favour, and the more so, as Bank bills (as will be shewn hereafter) possess all the advantages of bills of credit without their inconveniencies.

With respect to our revolutionary paper.—As that was neither emitted to meet the demands of trade, nor could be supported by trade, and besides rested on a more precarious security than the colony paper, it was impossible that it could long maintain an equal degree of credit and public confidence; the rapid depreciation, therefore, of such paper, can form no rational objection to a paper resting upon different ground, and circulating upon opposite principles. But, the fallacy of the objection will emerge in a stronger light, by a more particular comparison of the two papers.

1. Bills of credit, the best supported, were always made payable at a distant period, a circumstance which could not fail, to diminish their value, and which did diminish their value.

2. Bills of credited the funds for their redemption or smal payment, wholly in the power of govern­ment, consequently, liable upon every real or sup­posed exigency of state to be deverted to other pur­poses, a circumkance that weakening confidence in the security, necessarily involved their depreciation.

3. The quantum of bills of credit emitted, being regulated by no fixed rule, but intirely dependant upon the arbitrary will of an assembly, could afford no just foundation upon which to calculate their value.

As to notes issued by a properly organised Bank (of which only we would be understood to speak) every [Page 25] circumstance attending them, is calculated to re­move doubt, inspire confidence, confine their amount within safe limits, and insure to the holders the im­mediate payment of their full value.

1st. Every Bank has a determinate capital in specie, which if its charter is properly guarded, can never be used for any purpose that might divert it from the payment of its notes.

2d. Bank notes cannot be intruded upon the pub­lic at the will or pleasure of directors, or in any man­ner other than by loan, and then only, upon the se­curity of an ample pledge or the obligation of two or more persons competent to repay it at a short date. The holders of bank notes, therefore, have not only the specie in Bank, but these pledges or obligations as security for their discharge.

3d. As a well constituted Bank can never issue notes to exceed the amount of the specie in its vaults and securities pledged for payment of its loans; at all times, therefore, and in every conjuncture of its affairs, the securities and specie, added together, must amount to the precise sum of its notes in circu­lation, consequently, the Bank must be, at all times, competent to their payment.

4th. As it is optional with those who borrow from the Bank, to receive from it, either specie or bank notes to the amount of their loan, and with him who holds a bank note, to have it immediately ex­changed for specie, the interest of the Bank there­fore imperiously requires, that it should always have in readiness a sufficient sum in gold or silver, to ex­change those notes which are incessantly returning upon it from circulation.

This brief explanation of some of the circum­stances under which bank notes are issued, and the nature of the security upon which they are bottom­ed, [Page 26] (to which, if we add a limitation to the amount of notes, it may circulate) cannot fail to afford a solid basis for public confidence, and remove every doubt from the most scrupulous mind on the score of de­preciation.

But it may be asked, "inasmuch as a part of the Bank notes, in circulation, may rest on individual security, will not the bankruptcy of these persons, cause a failure of the Bank?"

The bankruptcy of the Bank, cannot happen from this cause; it being altogether improbable, estimat­ing chances according to the ordinary course of things, that its annual losses, from such failures, can ever exceed its annual profits. It may be observed, also, in referrence to this suggestion, that it is no ways likely, that persons in a bankrupt, or ticklish situation, will be favoured with its loans; because it is the interest of directors to ascertain the state of men's solidity, who have transactions with the Bank, and the nature of short credits and Bank transactions, above all others, to conduct in the most expeditious manner, to this knowledge. "Directors," says a well informed writer, on this subject, "being, for the most part, selected from the class of traders, are to be expected to possess, individually, an accurate knowledge of the characters and situation of those who come within that description; and they have, in addition to this, the course of dealing of the per­sons themselves with the Bank to assist their judg­ment; which is in most cases, a good index of the state in which those persons are. The artifices and shifts which those, in desperate or declining circum­stances, are obliged to employ to keep up the coun­tenance which the rules of the Bank require, and the train of their connexions, are so many prognos­tics, not difficult to be interpreted, of the fate which awaits them. Hence, it not unfrequently happens, [Page 27] that Banks are the first to discover the unsoundness of such characters, and, by withholding credit, to announce to the public, that they are not entitled to it."

Upon the whole, then, it may be safely affirmed, 1st. That the irrelevant principles upon which Bank paper and bills of credit come into circulation, afford not the shadow of a reason for apprehending a similarity in their fate. 2dly. That under the safe­guard of so many precautions, pledges and double securities, it is out of the verge of probability, that such a mass of failures can happen at any one time or in such quick succession, as to affect the solidity of a well administered Bank. 3dly. If in addition, the Bank be restricted from issuing, under any cir­cumstances whatever, beyond a certain amount of notes, depreciation, or its bankruptcy, will be render­ed impossible, except indeed in the case of a total sub­version of all order, property and government.

This point settled, let us examine, 2d. Whether Banks are not obstructive to agricultural improve­ments, and promotive only of commerce.

Banks, to be injurious to agriculture, must act in one of two ways. They must either lessen the means to purchase produce—or they must elicit money from, and prevent its being, employed in agricultural improvements.

As to the first, it has been already shewn, that Banks of extensive capital, instead of lessening the means to purchase produce, actually furnish the whole mass of buyers with more money, in consequence of which more produce is actually bought. How this is accomplished, may be further familiarised by example.

A merchant, with a part of his capital, ships pro­duce to the West-Indies, with which he imports a cargo of sugar, or coffee, the rest of his capital lay­ing [Page 28] in debts, for goods sold at a short credit. If there be no Bank established where he carries on his business, and he cannot dispose of his cargo for cash, or force a payment of his debts, he will not be able to buy produce, to commence a new voyage. On the other hand, if there is a Bank, it will step in with a loan, and put him instantly in a situation to load his vessel. Thus, delay is obviated, which is always loss, and more voyages performed in the same period, which, of course, takes off more pro­duce from the farmer, whilst, before the credit ob­tained from the Bank, expires, he finds himself in cash to reimburse the loan, either by the sale of his cargo, during the interval, or the receipt of some of his debts.

Again—Let us suppose every trader to have his capital doubled, by anticipations of sales of goods, or debts, it is demonstrable, that each would be enabled to buy more produce, give more for it, sell it abroad at a less price, than when it cost him less, and yet make a greater profit upon his tran­sactions. To be more explicit. If a trader, with­out anticipations, by waiting the slow course of sales, and payments, can purchase on his capital, only 10,000 barrels of flour, annually, and fell it in a foreign market, at one dollar per barrel profit, he will clear annually, 10,000 dollars. But if he can ship 20,000 barrels per annum, upon the same capital, by means of anticipations, he may give 1-8 of a dollar per barrel more for it, sell it abroad for 1-8 of a dollar less, and yet, make about 5000 dollars per annum more than in the former case; and the farmers an additional profit of 2,500 dol­lars, upon every 20,000 barrels.

By varying such instances to the different objects of trade, and the situation of debtors and credit­ors, [Page 29] we acquire distinct notions of the manner in which Banks increase the means to purchase pro­duce, without risk to the community, or the in­stitution.

That such is the precise course of business and profits, to both farmer and merchant, as capitals augment, is a fact well known in the commercial world; and, hence it is, that Banks of extensive capitals have never failed, wherever established, to give new energies to agriculture.

Inasmuch, therefore, as Banks do not lessen, but increase the means to purchase produce, and actu­ally cause more produce to be purchased, the se­cond part of the objection, which supposes, Banks to elicit money from, or prevent its being employed in, agricultural improvements, might be considered as already answered: For, speaking in the abstract, it would be absurd to say, that Banks draw money from agriculture, and at the same time occasion its progress and improvement.

To examine, however, the objection by another criterion, let us enquire, to which side of the ques­tion experience inclines; for, which ever way this index points, ought to have greater influence upon the candid mind, than whole volumes of sprightly theory, or ingenious declamation.

We obtain a just opinion of the utility or hurt­fulness of institutions, from a correct knowledge of their effects upon industry, derived either from our own experience, or, where we have had no opportunity of observing them ourselves, from the experience of men in whose veracity and sound­ness of judgment, we have just reason to confide.

When both concur to establish the same point, it would shew the height of scepticism, to reject their combined evidence.

[Page 30]With respect to the experience of others. "To the Banks of Scotland (says sir James Stewart, in his political oeconomy) the improvement of that country is intirely owing." A more systematic writer, (Mr. Adam Smith, in his inquiry into the nature and causes of the wealth of nations) says, "I have heard it asserted, that the trade of the city of Glasgow, doubled in about fifteen years after the first creation of the Banks there; and that the trade of Scotland, has more than quadrupled since the first creation of the two public Banks at Edinburgh, of which the one called the Bank of Scotland, was es­tablished by act of parliament 1695, the other called the Royal Bank, by royal charter in 1727. Whether the trade, either of Scotland in general, or the city of Glasgow in particular, has really increased in so great a proportion during so short a period, I do not pre­tend to know. If either of them has increased in this proportion, it seems to be an effect too great to be accounted for by the sole operation of this cause. That the trade and industry of Scotland, however, have increased very considerably, during this period, and that the Banks have contributed a good deal to this increase, cannot be doubled."

This evidence therefore, as it respects the operation of Banks upon the general industry and improve­ments of Scotland, is clear and conclusive. But the generative power of Banks, is far from being confined to Scotland. Wherever we trace them, whether in Italy, Germany, Holland, England, or the United States of America, we find the same ef­fects invariably following their establishment.

As to our own experience, selecting from this enu­meration the United States, we think we plainly perceive, in the vast increase in the exports of its native productions, since the establishment of Banks, the most indubitable evidence of their benign influence [Page 31] upon agriculture; at least, if we do not, with Sir James Stewart, ascribe this improved state of the country "intirely to Banks," we may safely affirm, to use the cautious language of Mr. Smith, "that our agricultural productions have increased very con­siderably since their establishment, and, that the Banks have contributed a good deal to this increase, cannot be doubted."

It follows, from this review of the actual state of things, that Banks enable the agriculturalist to ex­tend his improvements, and bring more produce to market, consequently, that, instead of withdrawing from his means, they on the contrary, increase them.

But as there is another form into which the ob­jection may be cast, of a more particular and speci­ous nature, it may not be improper to consider it.

It may be said, "that inasmuch as the profits of Banking are greater than lawful interest, it must ne­cessarily induce money lenders to vest their money in such institutions, in preference to lending it to farmers a circumstance amounting to a positive withdrawal of money from agriculture."

The maxim upon which this argument rests, viz. that the greater profit will always be prefered to the lesser, though true in the main, is qualified in the present case, by the following exceptions.

The class of men, most in the practice of lend­ing to farmers, live in the country, and participate in the habits peculiar to a country life. Attached to the soil, a mortgage on land according to their settled fashion of thinking, offers a better bottomed security than the best constituted Bank. At a dis­tance too from such institutions, they feel a certain kind of distrust in them which is only to be removed by an intimate knowledge of their principles, and the mode of their conducting business. These cir­cumstances [Page 32] alone, form strong checks to such men, vesting their money in Banks. Admitting, however, what may happen, that a few loans will be diverted from the farmer by this means, may we not confi­dently affirm, that the loss to agriculture, if any, is counterbalanced by infinitely greater advantages? Such private loans, like partial showers in a season of general drougth, can at best fall upon a few fields, while the operations of the Bank, like the inundations of the Nile, spread over and fertilise a whole country.

But that the loans which may be thus diverted from the farmers, can never be so considerable as to form a solid objection to the institution, will be ren­dered still more apparent, by attending to the de­scription of persons who constitute the great body of stockholders. It is a fact, that the men who hold the principal part of the stock of the different Banks in the United States, have never been in the prac­tice of lending to farmers. These consist, chiefly, of merchants▪ persons who have retired from trade, residents in towns and foreigners, men, who from habits and situation, will always prefer government securities, permanent town rents, or such property as may be readily converted into specie, to the best mort­gages that any farmer of any country can offer them. From such characters, while such objects of profit exist, were all Banks to be destroyed, farmers can have little or no expectation of loans. This de­scription of men will always form the great mass of stockholders in Banks.

But the objection meets a further reply in the actual state of things. There are at this moment six chartered Banks in the United States, in which shares may be purchased to a greater amount than the capital contemplated for the pro­posed institution, and at a price to yield to the buy­ers about 9 per centum per annum for their money. [Page 33] If, therefore, the highest interest is to decide money lenders, as to the application of their money, the withholding the solicited charter can make no dif­ference in point of loans to the farmer, as such must prefer a vestment of their money in existing insti­tutions.

Again—This objection does not seem to have had any weight assigned to it in Pennsylvania. The farmers there, after granting a charter to the Bank of North-America, for 2,000,000 of dollars, spe­cie, and seeing another Bank established in Phila­delphia, by the United States, for 10,000,000 of dollars, granted a charter for a third Bank, in the same city, with a capital of 3,000,000 of dollars, in which they interested the state, as a stockholder. We do not hear that these farmers complain that they have been embarrassed by these Banks—that they have prevented their obtaining loans—or that it is more difficult for them now, than when they did not exist, to carry on their improvements; on the contrary, they find themselves enabled to bring more produce to market, and at the same time, a market better able to pay for it; are more at their ease, in possession of more money, getting fast out of debt, and their lands greatly increased in value; and besides, have attracted into the state, by means of these institutions, a large amount of specie, which, had they not been established, would not have found its way thither. May it not then, be permitted to Maryland, to calculate upon simi­lar results, from similar establishments? And does it not follow, as an undeniable consequence, that in­stead of diverting loans from the farmer, the inva­riable operation of Banks of extensive capital, is, to increase his profit, augment his wealth, and ex­tend his improvements.

From the whole, then, of these facts and obser­vations, [Page 34] we conclude, that, a small Bank capital, comports only with a proportionably limited de­mand, and stationary trade—that where the de­mand is greatly beyond the capital of a Bank to supply, both individuals and the community, are exposed to serious inconveniencies and injuries— that the capital of a Bank, to answer the end of its institution, ought to be commensurate to the de­mands of trade, and "grow with its growth;"— that the large Bank capitals in Philadelphia, with­out counterbalancing capitals in Maryland, must gradually, and irresistibly, take from this state, much of its weight and importance, by attracting hence a considerable portion of its commerce; and finally, that as the state possesses materials and re­sources for a great and progressive trade, Bank ca­pitals, co-extensive with these objects, is become necessary, upon high considerations of dignity, in­terest, and policy.

Having thus briefly stated the reasons which have conduced to an association for the establishment of a Bank of extensive capital, we shall now submit a few explanations, touching the most characteristic features of the proposed institution.

The annexed sketch of a charter, contemplates an original capital of 3,000,000 of dollars, payable in five equal instalments, in the course of ten years, besides, an augmentation eventual and provisory.^*

As there can be no doubt entertained but that our trade will furnish full employment for this capital, in the order it is to evolve, and as we may calculate, with a moral certainty, upon its progressive extension, far beyond the provisory augmentation of capital to satisfy, unless checked by some great national cala­mity, we shall add a remark of Mr. Hume's, in con­firmation of what we have said respecting the proprie­ty [Page 35] of a progressive capital, viz. that "the good policy of the magistrate, consists in keeping money still in­creasing, in proportion to the progressive improve­ments in society."

In these lights, the proposed capital cannot be con­sidered as too large, or its augmentative quality as a defect in the system.

As to the regulations under which the subscrip­tion, for the three millions have been filled, we would observe, that it is not practicable, perhaps, to lay down rules for taking subscriptions, in such cases, which can prevent speculation, and at the same time, preserve a due distribution of the shares. If in form­ing them, we have not been more successful than others, who have preceded us in like experiments, we flatter ourselves, at least, to have fallen upon provisions, which must defeat the object of speculati­on, should any have been practised. In this view, the charter, 1. Fixes the times of payments unalter­ably. 2. Declares an absolute forfeiture of right to the instalments unpaid in every instance of non­compliance. And, 3. Orders a new subscription to be opened for all forfeited shares, upon original terms. These provisions (should any persons have subscribed for more shares than they can pay for, in the expec­tation of selling), will strip them of all such, before the appointment of directors. They will also have the effect, to keep the shares at market, at the natu­ral price in the intervals between the several instal­ments, because, those who may want to buy, will expect to obtain forfeited shares upon original terms, when the instalment becomes due from failures of payment, and because, those who find that they cannot comply with the approaching instalment, will be disposed to sell at the natural price, rather than discover their inability to pay.^*

[Page 36]It may be said, in support of these regulations, that they are better calculated to give diffusiveness to the shares, than regulations to oblige subscribers, to de­posite a part of the money on each share, at the in­stant of subscribing. It may be said, too, that the requiring a deposit of money, at a time when it cannot be employed, would deprive men of shares, who might be in a situation to pay for them as soon as it could, while it would open a field to men who might be better provided at the instant of subscribing, to engross largely, and sell out at leisure. In short, each mode presents advantages and inconveniencies. If no deposit is required at subscribing, the least wealthy will have an opportunity to take more shares than they can hold, and of course, to get something by the sale of the surplus On the other hand, is a deposit required, the most wealthy will be able to pay for more than they intend to keep, and of course, to impose and obtain a high price for those they in­tend to sell. But it will rest with government, after weighing such considerations, whether to confirm the subscriptions as already taken, or open a new one upon more improved principles.

As to the capital provisory and eventual. It is proposed by the charter, that, whenever the dividends (after the whole original capital is paid) shall average above 12 per centum per annum, for and during five consecutive years, that the directors in such case, shall open subscriptions under the original regulati­ons (unless others should be prescribed previously by the legislature,) for an additional capital of 600,000 dollars, and upon every subsequent five years averag­ing a like dividend, a fresh subscription for a like sum, till the capital shall amount to 9,000,000 of dollars.^*

This provision, besides meeting the increase of [Page 37] trade and "the progressive improvements in society," is intended to operate against speculation, by giving an opportunity, from time to time, to every citizen to come in upon original conditions (which they could not do were the 9,000,000 to be subscribed for at once) as well as relieve the institution from the appellation of a monopoly, a term rendered pe­culiarly odious by the 39th section of our declaration of rights.

It is moreover meant that nothing in the charter shall be construed, to deprive government of a right to direct further occasional enlargements of the capi­tal, should circumstances point to its propriety.^*

But this provision may be considered as extreme­ly proper upon another account. Were there to be no restriction upon the amount of notes that might be issued, and the power to augment the capital to rest with the directors only, and not upon a fixed principle, it is to be apprehended, that the voracious spirit of self-interest, having an eye to greater divi­dends by keeping the capital stationary, during a pro­gressive demand, would procrastinate, if not prevent its enlargement, however loudly the interest of the community might call for the measure, and thus convert a public institution into a mere private Bank­ing company.

The provision is also calculated to answer another valuable purpose, that of preserving in its purity one of the objects of the institution, as by its means, should undue preferences have obtained, the evil may be obviated, and the equilibrium of power, among the stockholders, if lost, re-established.

It being deemed essential, to the due administration of a Bank, to provide against favoritism in the de­stribution of discounts, the charter establishes an efficient rotation of directors, at the same time that [Page 38] it enjoins the re-election of one fourth of those who have not served four years, in order to perpetuate, in the body, a competent knowlege of the affairs of the institution.^*

The next provision that requires notice, respects a limitation to the issues of paper.^†

Although the successive increase of Bank capital forms of itself a barrier against an inordinate circu­lation of paper; yet that no avenue might remain open on so delicate a point, we have introduced a clause which fixes an absolute proportion between the Bank paper and its coin.

In fixing this proportion we have consulted the best writers, and the experience of men, the best in­formed in such matters, between whom we find a perfect coincidence of opinion. According to Mr. Megins, the Bank of England keeps always in coin, ready to meet exchanges, one third of the value of its notes in circulation. Such also is the proportion observed in the Banks of the United States, when administered with prudence, and without a regard to inordinate dividends. This proportion, there­fore, which may be considered as forming the point of safety to Banks and the public, cannot be ex­ceeded by the directors of the proposed Bank, without being answerable for the consequences in their private capacities, and being rendered ineligi­ble to office for ever after. Hence, the public can never be inundated with paper, or have every ave­nue of circulation filled with Bank notes.

The United States Bank, which is, perhaps, the best organised Bank in the world, has a limitation predicated upon this principle, but admitting of a greater latitude of circulation. It is to be observed, however, that the annual conversion of a part of its [Page 39] funded debt into specie (which constitutes 3.4ths of its capital) must gradually bring the proportion of notes it may circulate within this practical rule.

There is another circumstance that may be men­tioned, as confirmatory of the propriety of the adoption of this proportion. Since the establish­ment of the Bank of England, in 1694, down to the present time, that nation has sustained forty years of war, exclusive of that in which it is yet engaged; during which period, taking the state­ments, found in Anderson's Chronological History of Commerce, and other documents of an authen­tic nature, for data, by which to ascertain the amount of its circulation, it appears, that it must have adhered, in general, to the proportion as laid down by Mr. Megins. Seeing, therefore, that this proportion has stood the test of such a length of time, as well in war as peace, the Bank which a­dopts it for an invariable and fundamental rule, must be considered as resting upon the most perma­nent foundation.

That this restriction, which must forever prevent the Bank from surcharging circulation with its pa­per, comports with a due regard to the special in­terest of the stockholders, as distinguished from the general interest of the community, will appear evident, in considering the following important provision.

The charter proposes, a dividend of ten per cent. to the stockholders, as often as it arises out of the business; and further, to divide equally between them and the state, the profits of every three years, which shall exceed an average of ten per cent.^*

As some have affected to consider this division of profit, between the stockholders and the public, in the nature of a bribe to government, for a charter, [Page 40] and others, as ushering in a new rule in such cases, we shall endeavour to shew, that the principle is sanctioned by general practice, and that the practice is founded in strict justice.

With respect to the practice. It is notorious, that the charter of the Bank of England, was paid for by a loan to government, of £. 1,200,000 sterling, on much better terms than it was obtainable else­where, and that every renewal of its charter, has been purchased in like manner. To mention in­stances—In 1742, that Bank advanced £1,600,000 to government, without interest. At another time, it paid, £100,000, which was neither to bear an in­terest, nor yet, to be repaid.

In 1781, it agreed to lend government £2,000,000 for three years, at three per cent. which, though equal to about £100,000, was strongly objected to in parliament, as an inadequate equivalent for the extension of the charter for 21 years. We find, also, to pursue the subject, that similar equivalents have been paid to their government, by the Banks of Genoa, Naples, and other like Banks of circulation for their charters, long before the erection of the Bank of England, so that the legislature of England, in this respect, have only followed a pre-existent practice.

We [...]nd, that the same practice has also governed the United States. By the charter of the Bank of the United States, government is permitted to sub­scribe 2,000,000 of dollars, specie, and to withdraw it by way of loan, for ten years, reimbursable in equal annual instalments, at an interest not exceeding six per cent. and to enjoy a dividend upon the whole sum, as if no part of it had been withdrawn, in other words, government is to draw a dividend from the Bank for ten years, upon money not advanced. This equivalent which is certainly considerable, was objected to in congress, as insufficient for a charter [Page 41] of 20 years. A like equivalent is likewise stipulated for by the government of Pennsylvania in the charter erecting a state Bank.

These facts, we presume, are sufficiently pointed and numerous to prove, that the principle of this provision is strictly conformable to the general prac­tice.

As to the justice of the principle. Would it be just, it may be asked, for a government, to grant to a few individuals, a lucrative trade, attended with little trouble, and require no equivalent for the grant? Government could not support such a proceeding upon the ground of the trade of the company ope­rating beneficially to the community, that being an effect not stipulated for, or which the company do not engage, shall be produced by their trade. Neither could it be justified upon the ground, that the profit is only equal to the risk, because, in truth, there is no risk in the business; and if there was, other in­dividuals of the community, who lend money under the general law, must run an equal risk, and yet be satisfied with a less profit. Nor, could government with propriety alledge, that men could not be in­duced to vest their money in such business, were its profits to be restricted, the fact being otherwise, as in the case of the Bank of the United States, which, in fixing limits to the quantity of paper that may be circulated, established, in fact, a restriction upon its profits, and as is further evidenced, by the list of subscribers to the proposed institution, who have a­greed to a restriction. Again, were the supposition of the theorists, who oppose such establishments, to be ad­mitted, viz. that Banks are in certain respects, injuri­ous to the community, could government upon that ground be justified in granting a charter, with­out exacting damages in the grant, to the amount of the injuries sustained.

[Page 42]Each of these cases, then, evince the justice of the principle, or propriety of the restriction. But its justice rests upon arguments of a yet more positive nature.

The fact is, when government grants a banking charter, it creates an artificial person, which did not exist before, and endows it with civil rights and at­tributes of great and extensive importance. What­ever, therefore, is particularly gained by this charter, by those to whom it is granted, which they could not gain, or obtain without it, demands a cor­respondent compensation. To render this idea more simple. A state, which incorporates a Bank, grants to its stockholders, an exemption of their private fortune, (except so much thereof as consists in Bank stock) from all engagements entered into, or debts owing by the Bank, of what nature soever, and takes from every other citizen or company, a right which they would otherwise have retained, to recover from each of the stockholders, to the amount of the notes they may respectively hold, in the event of a deficien­cy in its funds or exigible effects. Here then is some­thing plainly given to the Bank, and something as plainly taken from the people.

A state grants another important privilege to a Bank, when it permits its notes to be paid in taxes and public dues, and refuses the same privilege to notes issued by individuals, private companies, or similar institutions.

A Bank is also particularly benefited, when a state engages to deposit in its vaults, its unappropriated and other monies. For, inasmuch as the time such monies may remain in Bank, can be exactly known to its directors, hence, operations upon this money may be predicated with as much safety and certainty, as if it made a part of the Bank's capital, a circum­stance that gives to the deposits of a state a striking superiority over the fluctuating deposits of individuals.

For such grants, relinquishments, privileges, and [Page 43] advantages, an equivalent return becomes perfect­ly just, for where value is so plainly given, payment cannot be rightfully refused.

We believe it to be unnecessary to say any thing further, to conclude for the justice of the principle. The only question, then, that can fairly arise on this occasion, must respect the quantum of compensation to the stockholders, and equivalent to be allowed to the state. How ought this to be ascertained?

Supposing a gross sum to be fixed on by the par­ties, as that must be settled by arbitrary opinion or compromise, so it might be either too much for the stockholders to give, or too little for the state to re­ceive in lieu of its grant. It has been thought, therefore, better to decline this mode of adjustment in favour of a fixed rule, founded upon the solid rights of the parties, and coexistent with the dura­tion of the institution.

The ordinary profit upon money employed in a regular course of trade will, perhaps, form the truest standard by which to determine the compen­sation that ought to be allowed to the stockholders. Upon the presumption, then that this profit averages about 10 per cent. the charter secures to the stock­holders a dividend equal to that sum, as often as the business shall net as much, and as a resource against years of short compensation, half the profits upon every three year's dividends, that shall exceed, upon an average, ten per cent. reserving to the state the other half of the excess, as a constantly accruing equivalent for the charter.

This division of profit, we flatter ourselves, will appear strictly conformable to distributive justice. But it may be asked, after assigning ten per cent. to the stockholders, for the use of their money, how much will remain to the state, for the use of its charter?

[Page 44]To this question, it may be satisfactorily answered, that as the different Banks in the United States, average above twelve per centum upon their specie capital, it is to be presumed that the proposed Bank, will not average a less dividend (of which there can be no doubt▪) The state will therefore receive (taking these data for a ground of calculation) dur­ing the operation of the whole of the first instal­ment, 6000 dollars per annum; during the second, 12,000 dollars per annum; during the third, 18,000 dollars per annum; during the fourth, 24,000 dol­lars per annum; and, during the fifth, 30,000 dollars per annum; or, in ten years, the sum of 180,000 dollars, and when the capital shall have reached its eventual and provisory limitation, 90,000 dollars annually, forever, independent of what it may divide as a stockholder, should it be­come one.

And here we cannot forbear mentioning an ad­vantage that results from this arrangement of pro­fits. This provision, and its collateral ones,^* must necessarily give a publicity to the real annual profits of the Bank, and the amount of its circulation, which must attach to the institution, a confidence that no other Bank, differently constructed, can possibly enjoy, and repel from it, at the same time, those fears and suspicions of an excessive circula­tion of paper that mystery and a want of know­ledge of its real profits naturally beget. This check, as precious to the public, as it is compati­ble with the true interest of the institution, whose credit it must render perpetual, cannot be too high­ly appreciated.

This provision presents another idea, with which we shall close the subject. The source from which this profit to the state is derived, seems to point to [Page 45] the propriety of destining it to works of public utility. It is submitted, therefore, as a proposition for consideration, whether it might not be proper, to appropriate a certain part thereof, to objects of a public nature—such as the improvement of towns, roads, and inland navigation; and to pledge the faith of the legislature, in the act of incorporation, that the same shall be, forever, sacredly applied to these purposes.

Baltimore, November 2, 1795.