"EXCESSIVE Usury," it has been said, ‘is the most unequivocal proof of the the imbecility of States, or symptom of some internal vice which corrodes them, and is often the harbinger of the most terrible catas­trophes.’

I am [...]ed to the adoption of this observation from a consideration of the unparalleled extortions that are daily and openly practised in this city— in the purchase and sale of Promissory Notes—to the disgrace of civilization and of the national character.

[Page 4]Where must this end?

My enquiries into the causes of the present distresses, are frequently answered by a reference to the injuries and losses our merchants have sustained by the unjust capture of our vessels at sea, and their illegal detention.

These evils, it cannot be disputed, are serious and deeply afflictive: but it must not be disguised that calamity is not confined to that range—it must be ascribed to a cause, operating in various forms, no less fatal, though not so striking to the public discernment—the shameful monopolizing principle adopted by the Banks, of discounting for those only who can make large deposits, or, as it is termed, "KEEP GOOD ACCOUNTS."

When I consider that the aggregate capital of the several Banks in this city, amounts to so many millions of dollars, and (making a due allowance for such parts thereof as cannot but remain inactive at present,) hear complaints so universal, and credit suffering so intensely every day, my astonishment at the public blind­ness or indifference, is greater than I can express!

[Page 5]I naturally enquire, and wonder that other men do not enquire also, How is this amazing sum disposed of EVERY SIXTY DAYS with so little general satisfaction—with such misfortunes hourly arising, and such funds at hand?

It is in vain that I labour to find a satisfactory resolution of this important question: The man most biassed by interest cannot say it is impar­tially—no candid man that it is justly disposed of—or that it is laid out in the manner most ‘useful to the commerce and agriculture of the State,’ or to produce the most ‘considerable advantages to trade and industry in general,’ as was contemplated by the several Acts of In­corporation.

Whatever may be the extent of the injuries and losses the merchants have sustained by the capture of their vessels and other property, they must be considered as part of the consequences flowing from their own proceedings in promoting the adoption of a Treaty, which, instead of healing the first affliction, hath confirmed it into a disease, and threatens to add disorders still more grievous.

[Page 6]This measure of politics, however, but par­tially relates to the present subject, inasmuch, as it is only an external aggravation of disorders, which already exist internally, radically pernicious, and fraught with generative destruction.

Must it not be a matter of astonishment to every well informed man—must it not be disgust­ing to very man not totally absorbed in avarice, to be told, that an individual of the best credit shall not be entitled to accommodation at a public institution, because he will not suffer his money to lie dead in Bank. What is the true character of such a strange procedure, is it not demanding a deposit of money, and at the same time exacting a discount for the use of a part of it? Is it not paying interest to the borrower for the use of the lender's money!

Yet such are the shameful extortions openly avowed, notwithstanding two of the charters of these public institutions were granted ‘under such limitations and restrictions as not to become an object of jealousy or apprehension to the good people of the States;’ —and— ‘to the intent that the Citizens of the State might not be oppressed!’

[Page 7]A most eminent author ⁽¹⁾ says, ‘It is not by augmenting the capital of a country, but by rendering a greater part of that capital active and productive than would otherwise be so, that the most judicious operations of banking can encrease the industry of the country. That part of the capital which a dealer is obliged to keep by him unemployed and in ready money for answering occasional demands, is so much DEAD STOCK; which, so long as it re­mains in this situation produces nothing to him or to his country. The judicious operations of bank­ing enable him to convert his dead stock into active and productive stock.’ How contrary is this doctrine to the shamefully extortionate and usurious "New invention of cashiering" now pursued, as it has been termed by Sir Joshua Child! How different from the principles of the "Mons Pietatis" of the Bishop of Padua, who (in 1490) established a Bank purposely to counteract similar extortion and usury in those days!

One of the principal motives for the establish­ment of the Bank Royale of Paris was, that ‘it would make usury to cease ⁽²⁾;’ and the [Page 8]Bank of England, we are told ⁽³⁾, is an inva­luable accommodation to the community, because it has a tendency to keep low the interest of money, and is ‘an effectual and permanent check to usury, which is the greatest bane to trade and na­vigations.’

It has been said ⁽⁴⁾ that the organization of our banks is on a plan and principles nearly uniform with, and like to those of the Bank of Eng­land. Why then are effects produced so very opposite and extraordinary? How comes it that the system upon which our banks are conducted at present can only create further distresses among all those who have not been engaged in their extortions? How comes it that they throw into the hands of usury the means whereby to play with redoubled cruelty upon those distresses which they at first create?

I have been referred to individuals in Mulberry-street—Chesnut-street—Second-street—Third-street— Water-street, and other streets, as known usurers, or AGENTS acting [...]or COMPANIES OF [Page 9]USURERS! and I have been confidently assured that those very individuals (with shame be it mentioned!) can, and do obtain discounts regularly at two of the Banks!

Whether there is cause for suspicion that seve­ral Bank Directors are intimately concerned in some of those establishments or not, may be in­ferred from the following circumstances of a con­versation which took place a few days ago. A Director was met by a Broker, whom he ad­dressed in languague and effect nearly as memory can collect thus, ‘For shame, J—, for shame! why will you not pursue some regular business, in preference to being instrumental to the dis­tresses of your neighbours?’ —To which the Jew replied— ‘Got damn! fwhat haf you to do mid it! I sells more notesh to Bank Tirectors dan to efry pody else!’ —I should not omit adding, that this very Director has been since charged, as I am well informed, openly to his face, with purchasing notes!

Some Directors, influenced more by private motives, than a regard for the duties of their appointment and the credit and character of the institutions, make it a practice to examine the [Page 10]Bank Books of individuals, and where complaints are made of the reduction of discounts without cause assigned, to offer as a reason, this sort of reply— "You trade beyond your capital;" as if a man's Bank Book stood in the place of his ledger! Presumptuous Dictators! who invested you with the insolent authority of inquisitors? Have you forgot from whence each of you sprang—that to capital you owe nothing, to credit your very existence!

It is allowed by all experienced men that ‘commerce cannot exist without mutual and extensive credit.’ —Men of the moment, be cautious!—you have sins to answer for—recollect that ‘credit is gained by custom and seldom recovers a strain’ —read Anderson, and learn what Banks are.

"Although like private merchants," says he ‘their circumstances may not be alike prospe­rous at all times, we can see no benefit that can arise by such minute enquiries, so long as they, to all appearance, are prosperous and punctual in all their affairs; neither do we apprehend these proper to be enquired into at all, unless there should arise any reasonable suspicion of fraud: for as it has been a political observation of [Page 11]long standing, that even the reputation of great and powerful Monarchies and States, often subsist more by common fame or opinion than by real strength or ability,—magis fama quam vi—so it may more strictly and properly be applicable to a Bank and Bankers, of which we had a most pregnant instance a few years ago, at the breaking up and dividing the pro­fits of an eminent partnership of a private bank in London, which, for many years, had cleared or divided several thousand pounds yearly for the partnership; when upon valuing or appraising all the real stock of the partnership before the highest judge of Great Britain, it appeared, even to that great man's amazement, that the whole did not amount to above three or four hundred pounds, consisting entirely of shop implements, and certain household furniture,’ &c.

A certain Director some time since, upon an iron merchant's applying to him, to know what were the objections to the paper which he had offered at Bank that had not been discounted, was told, "You should sell your iron!" This sapient Director had, a day or two before, been applying himself for the iron; but the ironmonger expecting (as the Director also expected) that the price of iron [Page 12]would rise, preferred borrowing cash, to selling goods to the Director at a risk of great disadvan­tage in the course of trade.

Herein may be discerned the power acquired and the means used to profit by a knowlege of the apparent state of individual credit as exhibited in their Bank Books—and in this way it is that we can account for numerous objections to the dis­counting of good notes.

If the Directory of a Bank can occasionally have "twenty thousand dollars" divided among them­selves in one day, more than is usual and customary for them to have discounted (which actually happened a few days since) they may with great ease keep "good accounts," and out of the profits only by such purchases—hopeful Directors!— graceless deposits!

When the Bank of England was instituted there were but four great or considerable Banks in Europe, all of which, excepting that of Genoa alone, were solely for the convenience of merchants ⁽⁵⁾; but our banks, by their system of "good ac­counts," [Page 13]openly and avowedly give usury the preference to the merchant.

Will this mode of proceeding ‘make money plentiful, trade easy and secure, raise the price of lands, draw the species of gold and silver into the hands of the common people,’ as we see it in Hol­land, Genoa, and other places? ⁽⁶⁾ Perhaps it might tend to cure this evil, if the Directors were obliged to take a qualification oath, as is the case in the Directory of the Bank of England; ⁽⁷⁾ and as I find they have adopted in the Bank establishment at Baltimore.

The Bank of England to support the credit of mercantile houses, advanced in one week in the year 1763, 1,600,000 pounds sterling, a great part of it in bullion, and extended its assistance even to Hamburg and Holland. ⁽⁸⁾ The advantages derived by the British Merchants in the present war are still more conspicuous. How different, how salu­tary must the effects of such an institution be, com­pared with those which give a special countenance to Usury!—How shocking is it to see such con­duct under the "most perfect Government," in [Page 14]"the most free and enlightened nation in the world!" —in times too when principles are professedly so well understood, and when no one pretends to deny that ‘Commerce cannot subsist without mutual and extensive Credit,’ nor that ‘unless money can be borrowed, Trade cannot be success­fully carried on.’ ⁽⁹⁾

But the evils of such abuses are not confined to the present time, nor to the present course of trade; it is in the first instance establishing a character of infamy on the present race, and implanting the seeds of poison for the rising generation; this countenancing of the most pernicious practice of Stock-jobbing and Usury, is directly sapping the morals and perverting the proper genius of the people from trade and industry, in the most abominable, because the most fatal and effectual manner that is possible?

‘The ease of borrowing money at a short warning is the life of commerce,’ says Black­stone ⁽¹⁰⁾, and the benefit that is to arise to the public through commerce, holds the first place among his arguments for the admission of a pre­mium for the use of money at all. But our [Page 15]Banks lend to none but those who will consent to PAY interest for LENDING their own money, and no matter by what infamous means obtained, and how sustained. This is following the advice of the Governor in his late speech to both chambers, of ‘multiplying the means by which every species of honest industry may be effectually encou­raged and rewarded’ with a vengeance!— Will it have a tendency to cultivate ‘the rela­tions of Agriculture and Commerce, the most important to be considered and cultivated.’ Is this considering ‘the direct aid which may be afforded to commercial industry and enterprize, which ought ever to be distinguished in their treatment as they are ever distinguishable in their nature, from the wild and fascinating move­ments of the spirit of speculation—a spirit that never fails to taint the morals, and to blight the credit of the nation which is exposed to its ma­lignant influence!’

AGRICULTURE is we are told the great leading interest of all states, and employs nine parts in ten of the inhabitants of America;⁽¹¹⁾ It is the great [Page 16]leading interest of all societies; ⁽¹²⁾ and— ‘in all the countries of Europe, judicious writers have considered Commerce as the handmaid of Agriculture; if true there, with us it must be unquestionable.’ ⁽¹³⁾ In the name of com­mon sense and justice then, let it be explained how Agriculture, how nine parts in ten of the inhabitants are to be benefitted by the Monopoly, Usury, and extortion of our Banks.

What is the nature and true features of an agree­ment or a resolution, for it is immaterial which form it is executed under, of the Directors of a Bank to countenance such proceedings.—Is it not in fact tantamount to an agreement to create a run upon all the regular followers of Trade and Com­merce?—Is it not striking directly at the very root of Agriculture?—Is it not conspiring and creating means for exercising the most treacherous assaults on the property of the simply industrious, and playing upon the distresses of individuals? How ma­ny have already fallen victims to this avaricious conspiration—How many have been obliged to stop payment, or been absolutely ruined by this overbearing and intolerably base and wicked ma­chination?

[Page 17]The Banks make the left-handed closet agreement to discount for those only who make a large de­posit. This is not known out of doors! ("for Bank Directors must not tell the secrets of the "Bank") until it is about to wound the unsus­pecting, and by the time so shameful a monopoly of the circulating medium begins to be believed, has already taken place (for honest men with dif­culty believe such things.) The paths of regular industry tho' thus harrassed and cut up, are not at once abandoned, sacrifices are submitted to, and honest men bow lowly to the factors of des­truction; they collect like the ant and bee, the lit­tle accumulations of labor and perseverance, but in vain, they cannot make large deposits—they are not worthy the grasp of the spoil [...]!—Their ef­forts once cramped, sacrifices must follow extreme exertions; these alone can prevent the notes of honest unsuspicious men from lying over! cruel over­bearing, horrible system! How can they expect men totally unsuspicious, and unprepared for such attacks, to make large deposits? But with what conscience can they expect men to pay itnerest for money, while their own lies dead in Bank?

[Page 18]Exorbitant, anomalous discounts may well ena­ble a Director to keep a good account. Much less than the extra sum of "twenty thousand dol­lars," divided occasionally among as many others would enable them all to keep "good ac­counts" also.

A certain Bank Director applied to a stationer some short time ago, to have a handsome Bank-Book made. After the stationer had completed his work agreeable to order, he was so much pleased with its elegance, that he resolved to furnish him­self with one equally handsome, and exactly like it. A few days after, the stationer sent his new and pretty Bank-Book to the Bank, to get a small note wrote in; to his surprise his pretty book was returned with a credit for a note which had been discounted (FOR THE DIRECTOR) for "eighteen thousand dollars."—The accidental resemblance of two elegant Bank-Books caused this mistake, but it also discovered a fact that points with silent energy, at the Bank proceed­ings; if each Director had the like indulgence on the same day, the immense sum of 350,000 dol­lars must have been at once divided among them.

[Page 19]An extra sum of 20,000 dollars occasionally added to such a sum as this, must make a Bank Director's place a very convenient and eligible one— and it may no longer be a matter of wonder that Directors can with ease keep "a good ac­count."

But "the specie has all left the country," says SPECIOUSUS; "we are obliged daily to curtail our discounts," says HIPOCRITUS;— ‘give to each a little, divide it among you,’ says AVIDIUS;— ‘But we can divide it only among those who keep GOOD ACCOUNTS,’ exclaim one and all!

It has been wisely said, that ‘the circulating medium being the soul and food of commerce, a corporation possessing a power of the soul can animate or annihilate the body at pleasure;’ if this miserly monopolizing spirit is pursued, the body must indeed die a painful and lingering death and carry contagion and ruin into its course.

[Page 20] ‘A monopoly of the circulating medium is an universal power of embargo over trade, agri­culture and manufactures,’ and it is immaterial whether it is deposited or usurped in the hands of a few. "Banking in its best view" says an emi­nent writer, ‘is only a species of fraud whereby labor suffers the imposition of paying an interest on the circulating medium.’ That banking fairly exercised may be divested of its fraudful cha­racter is beyond dispute; but that the circulating medium is the creature of labor is no less true; to render the creator subject to the creature is an in­version of all principles rational and moral, which was left for the banks to realize in this ‘most en­lightened and free nation.’

If there were not the examples of the bank of England, of Amsterdam, of Venice, of Edinburg, and so many others i [...] Europe, the experience which we have had, which every day and every hour lives before us, displays and calls for the ne­cessity of a regular, periodical, and general change of the directors in each of the banks, and that each director (as is the case at Baltimore and elsewhere) should be appointed under a very special oath of qualificati­on. The directors of the bank of Amsterdam are [Page 21]sworn when they leave the institution as well as when they first accept the charge. I do not wish to ob­lige the present directors to swear for the time past —that would be too hard upon them!—I only suggest its future propriety.

Perjury is a horrible crime, it is punished in En­gland with the Pillory—and it is remarkable e­nough that Usury is treated in the same way;⁽¹⁴⁾ should not brokers and their infamous bargains be put up for shame and scorn's pointing finger. A si­milarly infamous stock jobbing system, which is said to have caused the citizens of London ‘to decline trade and turn usurers,’ arose to so dangerous a height as to require the interference of the National Le­gislature, and the passing of an act of Parliament, which restrained the brokers to a certain number, from acting without a licence from the Lord Mayor; it obliged them to take an oath of fidelity,—their names to be written on the Royal Exchange;—to incur a penalty if they dealt in such articles them­selves, and to enter into an obligation for their faithful actings, and in failure to forfeit 500 pounds;⁽¹⁵⁾ and it is elswhere said,⁽¹⁶⁾, their be­ing [Page 22]guilty of such usurious acts as are daily com­mitted here with impunity would subject them to the penalties of a Praemunire.

Legislative interference is unquestionably called for, to guard us against the evils flowing from such scandalous abuses; and at the same time, since, ‘where paper money is pretty much confined to the circulation between dealer and dealer, as at London, there is always plenty of gold and silver,’ ⁽¹⁷⁾ it would be of great public benefit if the issuing of Bank Paper could be restricted to notes of not less than twenty dollars.

The election for Directors of the several Banks will shortly come on—these remarks will require the consideration of the Stockholders, and it is hoped that the indispensible necessity of a frequent and general change in the several Directions, will be now considered as sufficiently demonstrated. A personal exposition of names and persons has been avoided, because every one concerned that chuses to enquire, can apply the facts with the proof of them; the system admits of abuses, and it should obtain the correction of frequent [Page 23]change of persons, and every preventive of regu­lation and law that the public good and equal individual security demand.

That the State Legislature, will as much as is in their power attend to the correction of evils so universally and severely felt, is most earnestly to be hoped for. Qualification oaths, appear to be an easy and necessary preliminary step, which can be adapted to both the State Banks. It is likewise to be wished, and it appears to be signally incumbent on the LEGISLATURE of the UNITED STATES, to take up a subject involving the best and dearest interests of the nation.

December 15.