BANK OF NORTH AMERICA.

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People withdraw money using machine

It is a common opinion that the Bank of North America rendered essential service during our revolutionary struggle that, without it, the achievement of independence would have been difficult, if not impossible. Assertions to this effect have been made with so much confidence that we once believed them to be well-founded; but on examination we find First. That the capture of Cornwallis, which is described by historians as the closing scene of the }{evolutionary War, took place on the 9th of October, 1781, and that the Bank did not go into operation tin January 7th, 1782. Secondly. that the whole amount of expenditures of the U. S. Government in the year 1782, was only three million six hundred thousand dollars, and in 1783 only three million two hundred thousand dollars. Large loans were negotiated in Europe in these years; ” and such a conviction of the necessities of public supplies generally took place through the States, that considerable sums were obtained by a tax on polls and real estates.”* Thirdly. The whole amount subscribed by individuals to the Bank did not, as appears from the concurrent testimony of Mr. Robert Morris and . Gouverneur Morris, exceed 70,000 dollars. Fourthly. From statements made by Mr. Robert torris, in public debate in the Legislature of Pennsylvania, in the year 1786, it appears that the advances made by the Bank to the Government, above the amount of silver money actually paid in by the Government, never did exceed 165,000 dollars, and for a part of the time did not amount to 50,000 dollars.t The reader, on duly considering these facts, will probably be convinced that the services rendered by the Bank of North America, during our revolutionary struggle, have been grossly exaggerated. From the beginning of the year 1780, till the close of the war, hard money was very plenty. This” was occasioned by large sums, by various means, coming from the English army at New York, and spreading through the States; also by large sums remitted by France to their army and ravy here; also by large importations of hard money from the Havanna and other places abroad; so that hard money was never more plenty nor more easily collected than at that time.” In a note to an essay of later date, Mr. Webster says, “the States were really overrun with abundance of ca5h: the French and English armies, our foreign loans, Havanna trade &c., had filled the country with money.”It has been asked,” says Lord Sheffield, “what has become of the money which we have sent during the war to America 1 Some is come back-a considerable part is the circulating cash within our. lines. many British subjects in New York have very large sums in their possession. The Dutch and Germans, whose number is not inconsiderable, have hoarded up-and it is believed considerable sums are concealed. ” France sent (not included in the debt) above 600,000 pounds sterling in specie to America, being obliged to send cash.”* The operations of the war caused such a drain of specie from Europe, that the Bank of England was brought into jeopardy, and the Caisse d’ Escohptc at Paris actually suspended payment in 1783: and such a flux of specie into the United States, that, as observes, “hard money was never more plenty or more easily collected.” Such being the state of the money market. it is difficult to believe that the Government might not, if the Bank had not been established, have obtained a loan of 50,000 to 165,000 dollars from some other source. It does not appear that the Bank ever made advances to the Government, except on the best security. For at least 80,000 dollars of the amount, the:State of Pennsylvania was guarantee. For the residue of the amount, the Government might have pledged the proceeds of the taxes, or bills on Europe: and on the same security, it is probable, individuals would have made the advances, especially as money was so abundant, and the news of peace confidently expected. if Observations on the Commerce of the American Statei. June 21st 1783. the truth is, that the project of establishing a Bank in Philadelphia had been conceived by ~ir. Robert Morris, before the commencement of the war, as appears from his own declaration :* and he had entered into negotiations in Europe with a view to effect this object. But a project for a Bank about the year 1763, had been vigorously opposed on the ground that it would give a few men a monopoly of trade: and it is probable that . Robert Morris’s project would have encountered severe opposition, if it had not been brought forward as a fiscal measure, and at a time when neither the Legislature nor the people could give it that consideration it deserved. lie submitted his plan to Congress in may, 1780, and on the 26th of the sale month it was approved by that body. “Yet,” he says, ” until the month of September or October following, there were not more subscriptions in the whole, than amounted to about 70,000 dollars. During the time, one of his most Christian frigates arrived at Boston, and brought a remittance in specie of about 470,000 dollars. The sum \vas brought to Philadelphia and deposited in the vaults of the Bank. I determined from the moment of its arrival, to subscribe on behalf of the United States, for those shares in the Bank which remained vacant: but such was the amount of the public expenditures, that notwithstanding the utmost care and caution to keep this money, nearly one-half of the sum was exhausted before the institution could be organized. In November, 1781, the president and directors of the Bank were elected: they obtained a charter of incorporation from Congress-and opened the Bank for transacting business in January, 1782. I subscribed the sum then remaining in the treasury, being about 254,000 dollars, into the Bank stock, per account of the United States, which became thereby the principal stockholder.”