Letters on the Bank

For the Pennsylvania Packet and Daily Advertiser.

from the Pennsylvania Packet , March 25, 1786.

AS I have always considered the bank as one of the best institutions that could be devised to promote the commerce and agriculture of the country, and recover it from the ruined condition in which the war had left both the farmer and the merchant, as well as the most effectual means to banish usury and establish credit among the citizens, I have always been a friend to it.

When the opposition to the bank first began last year, there were many people inclined to think that it arose from no other motives than those of party prejudice and ignorance of the business: But there were others who hesitated not to say that a large majority of the late assembly had formed their plan for carrying their funding bill, and were speculating on the purchase and sale of certificates, and determined to destroy every thing which they supposed might not unite with that scheme.

Which of these suppositions are best founded, or whether both of them are not too true, will be sufficiently known before the next election. One thing, however, is already proved, which is, that the late assembly have created one of the greatest fields of speculation ever known in Pennsylvania. The funding acts produce an interest, in many cases, of between twenty and thirty per cent. and the country is loaded with taxes to pay the speculations. In the mean time the opposition to the bank is kept up to amuse the people.

Common Sense.

For the Pennsylvania Packet and Daily Advertiser.

from the Pennsylvania Packet , March 28, 1786.

The bubble of Silas Deane and the bubble of the opposition to the bank have several circumstances in them that are alike. As an honest friend to the public I set myself to detect the one, and with the same motives of sincerity I shall pursue the other.

The leaders of this opposition having undertaken what they did not understand, are endeavouring to strengthen themselves by making it a party matter between the constitutionalists and the republicans. They find themselves losing ground and now seek to shelter their misconduct and mismanagement under this resource.

The bank as a national question has nothing to do with party. — As a means of encreasing the commerce and promoting the agriculture and prosperity of the country it is supported by numbers of the constitutionalists as well as republicans.

It would be a very poor excuse for a representative of Bucks or Berks, or any of the counties whose property depends on the ready sale and exportation of its produce, to tell their constituents, that though the attack on the bank last year had operated to reduce the market for their produce, and retard the exportation of it, yet the loss must be submitted to, for it was a party matter. A man in office may live by his party, or a man in power, and fond of displaying it, may make some sacrifices to preserve it. — But what is this to the farmer; he must live by his labour and the produce of his farm.

Nothing is more certain than that if the bank was destroyed, the market for country produce would be monopolized by a few monied men, who would command the price as they pleased. And it is a matter much to the honor of some merchants in the city who by their fortunes could engross the trade to themselves that they support the bank as a public benefit to the commerce of the state.

Were there no other use of a bank than that of affording a safe convenient place where people who have spare cash by them which they do not immediately want, may lodge it until they had occasion for it; this alone, I say, were there no other use in a bank is a material advantage to the community, because it keeps the money in use and circulation that would otherwise be locked up. — There are in this city nearly six hundred people who constantly send their spare cash to the bank in this manner. They receive no interest for it, and in the mean time the country has the use of the money. Take away the bank and this money returns into the chests and coffers of its owners, where it lies locked up in death and darkness, and is, in the mean time, of no more use to the community than if it was in the mine.

If there are any who suppose that I have engaged myself in this business merely on account of the bank, I wish they would state their reasons. I am ready to satisfy any man either publicly or privately on this, or any other circumstance relating to my conduct therein. I know how and where the opposition began, and the manner it has been conducted, even to the writing of the report of the committee of the late house of assembly. And the persons concerned in this opposition have for ten years past known me too well even to believe that I am governed by self interested motives.



From the Pennsylvania Packet, April 4, 1786.

AS the Press ought to be as sacred to liberty, as the privilege of Speech is to the Members of Assembly in debate, you will please to insert the following in your paper.


In the Pennsylvania Packet of last Tuesday is a publication signed Common Sense which begins in the following manner.

“The bubble of Silas Deane. and the bubble of the opposition against the bank, have several circumstances in them that are alike. As an honest friend to the public I set myself to detect the one, and with the same motives of sincerity I shall pursue the other.”

The concluding paragraph in that publication is, “If there are any who suppose that I have engaged myself in this business merely on account of the bank, I wish them to state their reasons. I am ready to satisfy any man either publicly or privately on this or any other circumstance relating to my conduct therein. I know how and where the opposition began, and the manner it has been conducted, even to the writing the report of the committee of the late house of assembly. And the persons concerned in this opposition, have for ten years past known me too well to believe that I am governed by self-interested motives.”

Here is a fair and open opportunity given to any man either to charge me with it, or inform himself respecting it.

The pamphlet on the affair of the bank, under the signature of Common Sense, was published on the first day of the meeting of the present setting of the house, nearly six weeks ago. If the arguments used in that pamphlet in support of a public bank as beneficial to the state could have been refuted, or the facts or matters stated therein contradicted, it ought to have been done. It is a public question, a subject that concerns the interest of every man in the state, and any lights that could have been thrown thereon, either by those who were for, or those who were against such an institution, would have been acceptable to the public. No subject of debate that has been agitated before the legislature of Pennsylvania ever drew together such crouded audiences as attended the house during the four days the debate lasted. And it was very easy to discover from the countenance of the people that the debate has illuminated their minds, though it has been lost upon the opposing party in the house.

But instead of answering the pamphlet, or instead of making the charge I publicly invited, or obtaining the information I offered, the member from Fayette county, who can be at no loss to know my suspicions of his integrity on this business, which I shall in my subsequent publication lay before the public, gets up in his place, impertinently introduces the pamphlet to the house, and calls the writer of it “an unprincipled author whose pen is let out for hire.”

Respect to the representative body of a free people, however wrong some of them, in my opinion, may be on this subject; the decency proper to be observed in such a place, and on such an occasion, and the manners due to a numerous and respectable audience, restrained me to silence, or I should have been justified in rising and contradicting him by the most plain and unequivocal word the English language can express.

I appeal to the honor, the feelings of any person, let his opinion respecting the institution of a bank be what it may, whether there can be a greater influence of meanness, and depravity, or a greater prostitution of legislative privilege, than, for a man, sheltered under the sanctioned authority of a representative, and speaking in his place, to make use of that opportunity to abuse private characters: for though the name was not mentioned, the person alluded to was sufficiently understood.

A perfect unlimited freedom of speech must be allowed in legislative debates; and that liberty includes every other the tongue is capable of, if a man is base enough to use it. Had he charged an individual with breaking open a house, or robbing on the highway, or had he declared that the circumstances of any private man were on the point of bankruptcy and thereby ruined his credit and his family, he might be called to order by the speaker or any of the members, but this is all. The privilege of the house protects him. There is no law can lay hold of him. This, then, being the situation of a member, restrained by no checks but the sense of honor and the force of principle, none who esteemed his own character would exceed the bounds.

From conduct like this the opposition to the bank can derive no reputation; and the suspicion will naturally spread, that where such methods are used something bad must be at the bottom. But if Mr. Smilie chose to make such an attack, why did he not do it in the first day’s debate, I could then have answered him as I now do, the next day, of if he had made it on the second day, I could have answered him on the third, or if on the third I could have answered him on the last day: but be reserved himself till just before the vote was taken, and when it could not be contradicted, for reasons too obvious to be mentioned.

In the debate of Friday evening a member from the city mentioned one of the causes of the opposition to the bank, and connected it with an allusion which, probably related to Mr. Smilie. As I am acquainted with the circumstance, I shall lay it before the public, and they will then judge of Mr. Smilie’s political honesty in this business, and have a better insight into the opposition than they have yet had.

Last year the vote for taking away the charter of the bank was upwards of 50 to 12. The vote last Saturday for restoring it with an additional clause, was 30 to 39. Mr. Clymer, though strongly in support of the bank, voted against it in this question, because he was against the additional clause. If his vote had been for it, the numbers would have stood 31 to 38 — consequently four more votes would have re-established the bank, and restored its full usefulness again to the country.

In the present house are twenty-four members who were members of the late house, and who voted for taking away the charter; yet with this number of clogged votes, the question for re-establishing had nearly been carried. On the question for restoring the charter, without the additional clause, the majority against it was thirteen.

By this state of the business in the house, and the great change of sentiment that is spreading through both the city and country, it is visible, that the people are recovering from the delusion and bubble of the last year.


Philadelphia, April 3.


from the Pennsylvania Packet, April 7, 1786.

AS the Press ought to be as Sacred to Liberty, as the privilege of a Speech is to the Members of Assembly in debate, you will please to insert the following in your paper.


As I intend to begin and continue a series of publications on the usefulness of a public bank, to the trade, commerce and agriculture of the state, and as it is proper that a man’s motives on public affairs should be known, I shall, in this publication endeavour, as concisely as I can, to bring into one view, such parts of my own conduct, as relates thereto —
In doing this, certain parts of Mr. Smilie’s conduct will necessarily make their appearance.

As to the improper use which that member made of the privilege of speech in the house, of stiling me an unprincipled author, he is welcome to it, and I give him my consent to repeat it as often as he pleases and where ever he chooses. I shall make a few remarks on this part of the subject, and then proceed to more material matter.

While those members of the house who stile themselves constitutionalists, as well as those who act as the leaders of that party, appeared to me to pursue right measures and proceed on right principles, they had what assistance it was in my power to give them.

In the winter of 1778, a very strong opposition was made to the form of the constitution. As the constitution was then on an experiment, and the enemy in full force in the country, the opposition was injudicious. To this may be added another reason, which is, that the constitution, by having only a single house, was the best calculated form of civil government that could be devised for carrying on the war; because the simplicity of its structure admitted of dispatch, and dispensed with deliberation. But that which was then its blessing is now its curse. Things are done too rashly.

As the opposition was becoming formidable, the persons then in office and power, or those who hoped or expected to be so, became somewhat seriously alarmed, and they applied very solicitously to me to help them. I did so, and the service was gratis; and so has been every other which they have had from me, from that day to the present hour; and they might still have had it, and on the same terms, had they purchased just and wise measures of government, and an honest system of politics. The service here alluded to is in a number of publications, entitled “A Serious Address to the People of Pennsylvania on the Present State of Their Affairs.” Before the appearance of those publications, the newspapers were filled with pieces in opposition to the constitution; none appeared afterwards, it is therefore reasonable to conclude they had some effect. — The constitutionalists got full possession of the government — they enjoyed their places and offices, and here the matter ended.

When the war ceased, there were these of all parties, as well of this state as of other states, who tho’t it unreasonable, as well as dishonorable to the country, to suffer the service of a man who had been a volunteer in its cause for so many years, to pass off unacknowledged. The principal mover in this business was the commander in chief. The state of New-York (being the place where the war ended) made the first step, and I mention it with a just sense of the generosity and gentility of their conduct.

The last time General Washington was in Philadelphia, he engaged the late president, Mr. Dickinson, to move the same matter in this state, which engagement that gentleman very honorably and friendly fulfilled, and the supreme executive council unanimously concurred with him in recommending it to the consideration of the assembly.

In this manner it came before the house, and at a time when those who style themselves constitutionalists (for they are not so in principle) were by a turn of elections reinstated in the power they had lost for two or three years before. I mean the late house of assembly.

The matter respecting myself, on the recommendation of council, was before them at the very time they began their attack on the bank. It is therefore inconsistent, and even absurd, to suppose, that I could have any self-interested motives in opposing that attack, when they were on the point of deciding on a matter that immediately concerned my interest. Therefore my opposition to their politics at that critical time must be placed to other motives.

The recommendation of council respecting me was, in one of the stages of it, brought on in the house, a short time before the attack on the bank broke out. I shall place Mr. Smilie’s declaration in the house at that time, against what he said in the same house a few days ago, and the event will probably be, that people will believe neither what he then said, nor what he now says.

Mr. Smilie then said, that “excepting general Washington, there was not a more disinterested patriot in America, than Mr. Paine.” He now says, that “Mr. Paine is an unprincipled author, whose pen is let out for hire.” — Thus you see my trumpeter can blow all sorts of tunes. And I am very sorry that such a high encomium as he has given me should stand upon such loose authority as himself. But the “balance” in this case is, that what I suffer by his praise, is made up to me by his censure. (1)

But to return to my point. — As it could not be interest that induced me to oppose their attack on the bank at the time here alluded to, it is proper I should declare what the motive was.

It was friendship to them. I saw very clearly they were going to destroy themselves by a rash, mad, unjust, tyrannical proceeding, and that they might not, I endeavoured in the most pressing and friendly manner to remonstrate with them, to point out the consequence, and caution them against it.

For this purpose, and with this design, I had repeated conversations with Mr. Smilie on the subject, as he appeared to make himself one of the most violent in the business. Not a soul belonging to the bank, or that had the least connection with it, or any other person, knew what I was then doing. For as it was from motives of friendship that I then spoke, I kept it to myself, and it went no further than from me to them.

But Mr. Smilie is not the only one that I urged the same matters to. And I will here take the liberty (I hope I shall be pardoned in it) in mentioning the name of a gentlemen whose friendship and acquaintance I have always esteemed and wish to preserve — Colonel J. D. Smith.

As I knew he had a general acquaintance with the persons concerned in the opposition, there was scarcely a day passed, while the matter was before the house last year, that I did not go to him, and in the strongest and sincerest terms I could use, endeavour to impress him with the danger his friends were running into. That they would ruin the whole interest of the constitutional party by it. That the proceeding was so arbitrary and unjust, so despotic and tyrannical, that no body of men who went on such grounds, could support themselves or be supported in it. That the event would not only be the total overthrow of the constitutional party in the state, among whom were many that I sincerely esteemed, but that it would overset the constitution: because it could not fail to create an apprehension which would grow into a belief, that a single legislature, by having it in its power to act with such instant rashness, and without restrained, was a form of government that might be as dangerous to liberty, as a single person.

I expressed many of the same arguments to the then speaker, and it always appeared to me, from their manner of conversation on the subject, that there was something in the conduct and principles of the late house they did not approve, and strongly implied a wish that the matter had not been so rashly gone into.

But it is the fate of friendship, that where it is not accepted it is sure to offend. I do not apply this to the two last mentioned gentlemen; I should be unjust to them if I did. The matter, however, respecting myself in the house, went heavily on, after my sentiments on the attack on the bank were known. The acknowledgment the house made to me was not equal to the money I had relinquished to the state, exclusive of the service. The acknowledgment was connected with a proposition to renew the matter at a future day, and in this manner it now stands before the present house, there being at this time a committee on the business. Therefore I can have no interest in acting as I now do in opposition to a majority of the house, and it must be equally as clear that I am acting disinterestedly.

As the bill for abolishing the charter of the bank lay over till the last meeting of the late house, there was a probability the house would see its error, and reject what it had so rashly began. I therefore published nothing on the subject, during that time.

On my return to Philadelphia, in the winter, I found that experience had, in some measure, effected what reason and the right of things could not. Many who had been clamorous against the bank began to question the legality of the measure, and to apprehend ill effects from it.

The stockholders of the bank resolved to commence a suit; but the wound given to the faith of the state, together with the arbitrary principles on which the late house acted, were matters that concerned the people. They therefore brought their complaints before the present house from different parts of the state by memorial. Those memorials exhibit a charge of delinquency against the late house and call on the present house to redress the injury by undoing an unjust act. This is the ground the memorials go on. But it happens in this case that the matter of right is interwoven with a matter of interest. All the settled parts of Pennsylvania which carry on trade with the city and draw from thence returns of money by the sale of their produce, felt their interest hurt as well as their rights invaded. The attack on the bank operated as an attack on their pockets as well as on their principles. The city felt the same injury, and therefore they joined from a twofold motive in a demand of justice.

All this while the originating moving cause of the opposition to the bank remained a secret. Clamor filled the place of reason and argument. Influence, monopoly and danger, were held out to the people, and the mis-led multitude caught the bait.

But notwithstanding all this cry of influence, this clamour of monopoly, it is influence and monopoly that have produced the attack on the bank. There are certain men in Philadelphia, whether friends or otherwise to the revolution matters not, they are monied men. These men view a public bank as standing in the way of their private interest. Their wealth is not of so much value to them as it would be if the bank was demolished, and therefore they say down with the bank. To accomplish this point, so agreeable to their wishes, and advantageous to their wealth, they have been working through the ignorance of the late house in matters of commerce, and the nature of banks, and on the prejudices of others as leaders of that party, to demolish the bank. It might be error in the former, but it is wilful mischief in the latter; and as mischief is not lessened by the apology of error, nor increased by the criminality of design, therefore those who sacrificed to prejudice, are, as to matters of public trust, alike the objects of public reprobation.

As one of the gentlemen who oppose the bank, as standing in the way of his private interest, has not made any great secret of his reasons, there can be no impropriety in making him and his reasons public.

The gentleman I here mean is Mr. George Emlen. However worthy or respectable a man may be in private life, yet when he from self-interested motives privately opposes a public institution, or get others to do it, because it puts the credit of an honest, industrious tradesman, just and punctual in his dealings, though not so rich as himself, on a level with his wealth, it is but fair those reasons should be public.

The reasons Mr. Emlen has given for not signing the memorial lately presented to the house, and for his opposition to the bank, are, “that while the bank stands a monied man has no chance — that his money is not so valuable to him now as it would be then — that if the bank was demolished he could buy country produce for exportation cheaper.” If these are just reasons for demolishing the bank, let it be demolished — if they are popular reasons let them have their effect. But at any rate let them be known that they may be judged of.

These being Mr. Emlen’s reasons for demolishing the bank, can any thing be more inconsistent and suspicious than that the members of assembly who have, all this while, been holding out to their country constituents that the bank is injurious to the former and the middling sort of people, can, I say, any thing be more inconsistent than to see men of such contrary declarations acting in concert to destroy the bank.

This is the age of negociation, compromise and coalition: but here is one that for wisdom or folly, exceeds them all. The coalition of lord North and Charles Fox is innocent childishness compared to this. How powerfully must Mr. Emlen’s reason operate on the worthy loquacious member from Fayette county. How strong must be his conviction that the bank is injurious to the farmer, when Mr. Emlen assures him that were it not for the bank he could buy the farmer’s produce for less money.

When I found that this coalition had taken place, and that Mr. Emlen was the friend of Mr. Smilie, and Mr. Smilie of Mr. Emlen, and that the entertainment of his table was open to the opposing members to the bank, I could not but be struck at the strangeness of the connection, and that Mr. Smilie might not be ignorant that he was made a dupe of, or subject himself to worse suspicions, I informed a friend of his, Dr. Hutchinson, of it, and desired him to communicate Mr. Emlen’s reasons for opposing the bank to Mr. Smilie. This is at least three weeks ago.

Having now stated to the public the circumstance I alluded to in my former piece, I shall reserve the continuation of the subject to a future paper.

Philadelphia, April 6. COMMON SENSE.


  1. Mr. Smilie, who loves to talk about what he does not understand, is always exposing his want of knowledge, in haranguing about the balance of trade.



from the Pennsylvania Packet, April 20, 1786.

AS the debates and proceedings of the Assembly, on the report of the committee (to whom were referred the memorials of a very large and respectable number of freemen, in divers parts of the state, in behalf of the injured honor of the same, and complaining of the improper, unconstitutional and faithless conduct of the late house, in their proceedings respecting the Bank of North-America) are advertised to be published in a pamphlet, by the person who usually attends the Assembly for the purpose of taking down debates, and as those debates, if correctly taken, will serve to set forth the unjust and arbitrary proceedings of the late house, and to show the exceeding usefulness of a public Bank to the landed and commercial interest of the state, I shall, (after the present number) discontinue the remarks I have to offer on the subject, until those debates are in the hands of the public.

Having thus mentioned my intention, I shall confine my present remarks to such matters as more immediately relate to those debates. — Whoever will take a review of them, cannot but perceive that the speakers in opposition to the Bank are those, who from their remote situation feel themselves very little, if at all, interested in the prosperity of the more settled and improved parts of the state. Their ideas of government, agriculture and commerce, are drawn from and limited to their own frontier habitations; and their politics seem calculated to suit their particular situations, at the expence and detriment of the rest. By attempting this, they injure themselves and the event in this instance, as in all others of narrow and contracted politics, will turn out to their own disadvantage.

If those persons could not perceive that a Bank was beneficial to the landed interest, it must be — either because they have yet no produce to sell or export, or because they have no commercial intercourse with the market where the Bank is established at. But even in this case their policy is ill calculated, and badly applied.

The time will come, when they will have produce for sale and exportation, and consequently will then want a market and a ready means of turning it into cash; and whether that produce is brought to Philadelphia market or goes to Baltimore, the consequences to themselves will be nearly the same. The quick intercourse of commercial intelligence that passes between the two markets of Philadelphia and Baltimore, immediately operates to regulate the price of the one by the other; and whenever it falls here, from whatever cause it may be, it falls there.

There are two stages or degrees into which the landed interest in Pennsylvania progressively divides itself, viz. settlers and farmers. And as a man’s ideas are generally produced in him by his present situation and condition, it will naturally follow, that if you investigate his situation you will get into the channel his thoughts run in, and find out their source, direction and extent.

The frontier parts of the state are called settlements, and the improved parts farms. A settler is not yet a farmer; he is only in the way of being so. In the stage of a settler, his thoughts are engrossed and taken up in making a settlement. If he can raise produce enough for the support of his family, it is the utmost of his present hopes. He has none to bring to market, or to sell, and therefore commerce appears nothing to him; and he cries out, that a Bank is of no use. But the case is, he is not yet in a condition to participate of its usefulness. When he is, he will think otherwise.

But the improved parts of the state, having undergone the hardship and labour attending the making new settlements, are now become farms, and the occupiers of them are farmers. The others, as I have before observed, are yet but settlements, and many of them only laid out to be such, and the occupiers of them are settlers. Therefore, when a back county member says that the Bank is of no use to the farmer, he means the settler, who has yet no produce to sell, and knows nothing about the matter. Of the twenty-eight who voted for restoring the Charter of the Bank, twenty-five are country members. Those gentlemen, by residing in the improved parts of the state, from whence the staple commodities of the country are brought, are certainly better judges of the usefulness of a public Bank, than those, who, from their distance, have no commercial intercourse with the market, and never visit it but when they are sent as representatives.

As to paper money, which so frequently occurs in the speeches of the back county members, I will, in a few words, explain their motive and meaning for it.

Not one of them will take it when it is made; but all of them will borrow it of the public, under the name of a Loan Office, let the value of it be little or much, and trust the payment to the chance of depreciation, or other future events. According to the ideas which some of them threw out, they would continue striking an additional quantity every year, till the value of the first emissions was so reduced, that they would strike themselves out of debt, at the expence of all the settled and improved parts of the state.

But however paper money may suit a borrower, it is unprofitable, if not ruinous in the end, to every other person. The farmer will not take it for produce, and he is right in refusing it. The money he takes for his year’s produce must last him the year round; and the experience he has had of the instability of paper money has sufficiently instructed him, that it is not worth a farmer’s while to exchange the solid grain and produce of a farm for the paper of an Assembly, whose politics are changing with every new election, and who are here one year and gone another.

But the persons against whose immediate interest paper money operates the strongest, are the manufacturers and mechanics.

We all know there is no part of the continent where manufacturers and mechanics flourish so much as in the New-England states. They were famed for them before the war, and are so at this day.

But the circumstance which gave spring to those arts among them was, their banishing the use of paper money, which they effectually did many years before the war. The consequence was, that all the hard money that their export trade brought in remained among them; and as none of it could be spared to send abroad to purchase foreign manufactures necessity obliged them to manufacture for themselves. It was by banishing paper money, that they established the arts, and retained among them a sufficiency of hard money.

I know some of the persons who put themselves at the head of the opposition against the Bank last year said (for I was present), that they wished there was not a hard dollar in the country.

If this wish were, or could be, carried in practice there could then be no other than paper money; the consequence of which would be, that all the hard money which the exports of the country brought in would be immediately sent out again, to purchase foreign manufactures and trinkets.

We are frequently passing acts to encourage manufactures, but the most effectual encouragement would be, to banish the practice of paper money. We have the experience of the New England states before us, which is preferable to all the reasoning that can be offered on the subject.

An independent country and paper money is a ridiculous connection. It is a weak, flimsy, idle system of government. We have as good a chance as other nations to share in the current coin of the world, gold and silver, did those who exercise the power of government understand it.

April 17th. COMMON SENSE.

No. IV.

On the Advantages of a PUBLIC BANK.

from the Pennsylvania Packet, June 20, 1786.

IF the experience of other countries on the science of Banking be a matter worth attending to, there can be no hesitation in pronouncing in favour of a well-regulated public Bank. I shall therefore introduce this part of the subject by taking a concise view of the conduct of other nations on this subject.

In countries under a despotic government there are no public banks, because in such countries those who have wealth think it safer to conceal than to expose it. Public banks, therefore, are the offspring only of free countries, or of those which approach the nearest thereto; and in proportion as the people share in the government, in nearly that proportion do public banks prosper and are encouraged.

In Holland and in England, where the people, by their right of election and representation, participate in the government of the country, more than in any other of the same importance in Europe, that participation protects their wealth, and they trust it to a bank with safety: by this means all the money of the country is brought into use: whereas in countries where the people have no share in the government, and live under the continual apprehension of the power exercised over them, the rich secret their money, or keep it locked up for their own use only; and the bulk of the people, from the want of its free and confidential circulation, are kept poor.

It is not so much the quantity of wealth, as the quantity that circulates, that constitutes the monied riches of a country. If we may credit history and reports, there is more money in some countries, where the generality of the people are wretched and poor, than in some others that are esteemed rich; but in the one it is hoarded, and in the other it is dispersed by circulation and gives briskness and vigor to industry and improvement. One of the best methods to increase wealth in a country is to increase the circulation of it, by inducing every part of it to be brought forth, and constantly moving. A pound hoarded for a year, and then paid away, pays but one debt of twenty shillings in that time; but the same pound paid away every day, does the same service three hundred and sixty five times over.

Public banks, therefore, being the offspring of free countries, and of free countries only, or of such as approach the nearest thereto, and are not instituted in despotic governments, it is no reputation to the political principles of those persons, who endeavoured to suppress the institution of a public bank in this state.

The superior advantages of a public bank in a country to those of private ones are very evident. Private banks can only be set up by men of large fortune, and therefore they would be a monopoly in the hands of a very few: but in a public bank divided into shares, the monopolizing system is destroyed, and the business thrown open and any man in any part of the country may be a banker by being a stockholder.

In a private bank, the true condition of it can be known only to the proprietor. This being the case, he may extend his credit too much beyond his capital. He may trade or speculate with the money deposited in his hands, and either by ill fortune in his projects, or fraudulent designs, may break. But in a public bank, there are too many people concerned to admit of secrecy; and the business is conducted by established rules, which cannot be dispensed with, or departed from. The directors are refrained from trading with the capital of the bank, or the money deposited there, and therefore the security of a public bank is greater than that of a private one. The proprietor likewise of a private bank be he ever so substantial will die; and when this happens, his affairs will be in the hands of executors, who are not always the best people to settle with: But in a public bank this never happens; its affairs never go into the hands of executors, because the directorship being filled up by election, never dies.

Had the persons who formed the scheme for opposing the bank been the institutors of it, it would then have been held out as one of the finest things imaginable. But such is the intoxicating spirit of party, and such the operation of envy, that where it cannot do the service that is wanted, it endeavours to prevent its being done. But in the instance of opposing the institution of the bank, the spirit of party carries something like a double face. Those who have been most clamorous against it, however they may conduct themselves in other places are nevertheless making use of its convenience. If they are now convinced of the usefulness of such an institution, they ought to be candid enough to say it.

One of the clamours against the bank was, that none but persons interested in the institution were its advocates and supporters. This is very true, if rightly understood, for every man is interested in supporting an institution that is of general utility. The stockholders are but a very small part of the numerous body of the citizens of the state, who are seeking to preserve and retain so useful an institution as a public bank. All the countries that are arrived at a degree of opulence sufficient to carry on any kind of trade by means of the produce of their lands, are as much if not more, interested in the matter than a stockholder. In short, every man who has any concern with money matters, and that every one has more or less, is in some degree benefited by an institution that serves, like the heart to the body, to give circulation through the state.

Another of the clamours was, that people could not borrow money as before. For this they may in a great measure thank their representatives, who by the instability of their political conduct, and the levity they have shown in making and unmaking of laws, violating faith, and tampering with credit and paper money, have made one man afraid to trust another; and this will ever be the case while such methods are practiced.

But the most beneficial system of loaning, for the general interest of the country, is by means of a public bank. Loans for short periods serve to pay the farmer, the miller, the tradesman, the workman, &c. and hundreds are served in the course of a year to one that would be served by loans for a long period of time. The former system of loans was excellently adapted to the circumstances of the country at that time. It enabled people to make farms; but now that the farms are made, the best encouragement to the farmer is to provide means to buy and pay, in real money, for the produce he has to sell.

If the money that now compose the capital of the bank could possibly be spared by the stockholders, which it cannot, and lent to individuals in different parts of the country for a number of years, only a very few persons could be served, compared with the numbers served now, and those only who had already considerable property to give in security; and the first borrowers would exclude all others from the chance of borrowing during the time for which they had borrowed themselves. He therefore who puts his money in the bank, lends it to a more general good, than if he were to trust it to the use of one person only for a number of years.

I shall conclude this paper with a declaration, that in this place may not be improper, which is, That from the first establishment of the bank, to the present hour, I have been its friend and advocate; yet I have never made the least use of it, or received the least personal service or favor from it, by borrowing or discounting notes, or in any other shape or manner whatever or of any person concerned with it directly or indirectly. I have kept cash at the bank, and the bank is at this time in account to me between eight and nine hundred pounds, for money which I brought from New York, and deposited there ever since last September, and for which I do not receive a single farthing interest. This money the country has had the use of, and I think it safer under the care of the bank, until I have occasion to call for it, than in my own custody.

June 17th. COMMON SENSE.

No. VII. (Editor’s Note: No.’s VI & VII are under Recently Attributed works, “Attack on Paper Money Laws”, and “On the Affairs of Pennsylvania”)


from the Pennsylvania Gazette, March 7, 1787.

ERROR like guilt is unwilling to die. However strong the conviction, or clear the detection, it still disdains to yield, and though defeated struggles to survive. The opposers to the Bank, finding their cause as unpopular as it is unjust, are endeavouring to confound what they cannot confute, and to recover by contrivance what they lost by misconduct. Failing in the onset, they seek to embarrass the issue, and escape undefeated in the fog of perplexity.

New devices, as frivolous as they are unjust, are couched under new pretences, and held out to divide or to deceive. A small reinforcement, by any means obtained, might serve as a prop to their consequence, or an apology to their defeat.

When men have rashly plunged themselves into a measure, the right or wrong of it is soon forgotten. Party knows no impulse but spirit, no prise but victory. It is blind to truth, and hardened against conviction. It seeks to justify error by perseverance, and denies to its own mind the operation of its own judgment. A man under the tyranny of party spirit is the greatest slave upon earth, for none but himself can deprive him of the freedom of thought.

The obscure promoters of the opposition to the Bank imagined that their consequence would be lessened, and their influence circumscribed by the growing circumstances of the country. They hated the means that should raise it above themselves, and beheld the Bank as an instrument of public prosperity. The lower was the ebb, the easier they would ascend to the surface, and the more visible they would appear. Their sphere of importance was that of a general poverty, and their hopes depended on its duration. “Better to reign in hell than serve in heaven,” was the language of Lucifer, and the same motives served to instigate the opposition.

In this plan they were joined by a band of usurers, whose avarice of 50 and 60 per cent, was consequently opposed by the operation of the Bank, which discounted at the legal interest of six per cent. They were further supported by the speculators in the funding scheme, who were calculating to draw from the public an annual interest of 20 and 30 per cent. and encrease the value of the capital in their hands at least one hundred per cent. This is a caracature which the public are truly interested in having explained. What but this could bring an assemblyman of the constitutional party and an usurer together.

Unjust measures must be supported by unjust means. No sooner was their scheme reprobated by men of integrity and independent principles, but invention was put to the rack, and truth to defiance, to weaken the credit of those who opposed the injustice of their proceedings. This man was bribed and that man was hired, and slander and falshood, the ministering angels of malevolence, had full employment.

So far as any of their insinuations regard me, I put them to defiance, I challenge any man amongst them to come forth and make the assertion. I dare them to it; and with all the calm composure of integrity disdain their insinuations, and leave them to lick the file and bleed away their venom. An insinuation, which a man who makes it does not believe himself, is equal to lying. It is the cowardice of lying. It unites the barest part of that vice with the meanest of all others. An open liar is a highwayman in his profession, but an insinuating liar is a thief sculking in the night.

Could the opposition to the Bank succeed in effecting its downfall, the consequence would be their own destruction as a party in the state. The attempt has already reduced their numbers and exasperated the country, and could they accomplish the end, it would be fatal to them. But they are happy in not having discernment enough to foresee the effects of their own measures. They persist because they have begun, and shun the prudence that would teach them to retreat.

Had the Bank closed its accounts as the opposition supposed it would at the passing of the repealing act, the confusion and distress in this city, and the effects that would have followed to the country, would have brought vengeance on the heads of the promoters of that measure. The quantity of cash that would have been taken away and for ever removed from this state, by the stockholders in distant parts, would have brought on a famine of money. I know one gentlemen who would have drawn out twenty-four thousand dollars, none of which would ever more have returned among us. Is there any man except a madman or an ideot, that will say we have too much money and want to have less. Can it be for the interest of this state to banish the wealth it possesses, at the very time it is complaining of the scarcity of cash.

The leaders of the opposition in this city are chiefly composed of those who live by posts and offices under the government, and if there are but taxes enough to pay their salaries, the distress would not reach their interest.

The opposition in the House of Assembly is chiefly supported by members from whom such an opposition has an indelicate appearance. It has the appearance of envy at the prosperity of all the old settled parts of the state. The commerce and traffic of the Back Country members and the parts they represent goes to Baltimore. From thence are their imports purchased and there do their exports go. They come here to legislate and go there to trade. In questions of commerce, and by commerce I mean the exports as well as the imports of a country, they are neither naturally nor politically interested with us, and the delicacy of the case when matters of this kind are agitated should have with them a greater weight. What advantage persons thus situated can propose to themselves from a dissolution of the Bank at Philadelphia is not easy to perceive. The money drawn away by the stockholders in distant parts, though removed from this state, would not be deposited at Baltimore. It is very possible that a branch of the present Bank may extend there, and in this view they are defeating their own future interest: — If one part of the state is thus to go on in opposing the other, no great good can arise to either. The principle is ungenerous and the policy injurious, and the more it is reflected upon the worse it will appear.

The cry and bubble, the falshoods and insinuations that were raised against the Bank have sunk and wasted away as groundless clamours always will. The politics founded on such contrivances never succeed, and the event serves to involve the projectors in disgrace. A very little serious thinking was sufficient to convince any man, that the more money could be retained in the country the better, and that to break up the Bank and banish so large a capital from the state as the stockholders in distant parts have deposited with us, never more to return among us; could answer no man’s purpose who had his living to work for, though it might not affect those who live by posts and offices. Would not that politician be considered as a madman in England, who should propose to break up the Bank in that nation, and send away to Holland and other countries the money which those foreigners have deposited with them: and he must be equally as vile a politician who proposes the same thing here.

So far as the part I have taken in the business has gone, it has been applied to preserve the money in the country, by supporting the Bank; and in this undertaking I am certain of the approbation of every serious thinking man who wishes to see the country in prosperous circumstances.

As for the crazy brained politicians who began and promoted the attack on the Bank, I have had experience enough of their abilities for several years past to know them sufficiently, and that a country under the management of their politics would be a perpetual scene of distraction and poverty.

I did not leave them when they were weak and distressed, but in the height of their prosperity, and in full possession of the government. I very explicitly and candidly stated to them my reasons for reprobating their conduct, and that at a time when themselves know it was against my interest to do it; and I very freely gave them my opinion (such as it was) that those unjust and despotic proceedings would work their downfal. But they were intoxicated with power, government with power, government-mad, too blind to foresee the consequence, and too confident to be advised. They trusted to the transitory popularity obtained by delusion, and supposed that a multitude deceived was never to be convinced.

But there are certain points in this business, which ought always to be kept in view.

The Bank originated on the inability of the government to carry on the war, and at a time when some of its present opposers were on the point of abandoning the cause. I speak this because I know it. But so unhappy is the spirit of envy, that it can be just to no merit but its own. The services which the Bank rendered have been a poison to those little minds, that at once receive and hate the good that others perform.

On the fall of the continental currency a band of usurers arose, and those who wanted to borrow paid from thirty to sixty per cent for their loans. These men are among the enemies of the Bank.

On the establishment of the Bank, nearly the whole of its abilities to lend were rendered to Congress, and so pressing and necessitous were the requisitions of that body, and so devoted was the Bank to the support of the public cause, that in more instances than one the Bank ran the risk of losing its whole capital. At this time the present opposers of the Bank lay snug with what hard money they had in their pockets, and contributed none of it to supply the public exigency.

On the termination of the war, all risk and danger being over, those same persons, so quiet then, and so noisy since, formed the scheme of setting up another Bank. Not from any public principle or for any public purpose; not to expel the enemy, for he was already expelled; but merely with a view to make money and profit. They had no hard money, God help them, not they, while there was danger of losing it; but when that danger was over, they could find hard money for a new bank. To carry this plan, and draw new associates to it, they proposed revising the Test-laws, which, as their scheme of a new Bank did not succeed, they afterwards voted against.

Disappointed in their plan of setting up another Bank, they immediately struck off on the contrary tack, propagated a report that Banks were injurious and dangerous, and brought in a bill to demolish that Bank they had attempted to rival. How they should ever expect that men who had reputations yet unlost should join or concur with them in such a contradictory and unprincipled round of projects, is a proof how little they regard reputation themselves. Their conduct is in itself a satire upon hypocrisy, and equalled only by the impudence of acting it.

When the demands of Congress on the Bank ceased with the war, it was then enabled to employ its capital in promoting the domestic prosperity of the country; and it was fortunate for Pennsylvania that she possessed such a resource as the Bank, at the close of a war which had ruined her commerce, reduced her farmers, and impoverished her monied men; when she had, as it were, the world to begin anew, and when, had it not been for the intervention of the Bank, the usurers would have devoured the land.

The Bank went on, and no complaint was heard against it. Its impartial punctuality served to collect and restore the shattered remains of credit, and replace the confidence which the war and paper currencies had destroyed.

At this time, without provocation, without cause, and without any motive that was wise, just or honorable, the Assembly, unwarranted by their constituents, and unjustified by the pretence, commenced an attack upon its charter. They fabricated the tales they wished to have believed, and set them up for the voice of the people. A few runners out of doors kept up the alarm, and the public, unacquainted with the business, and unsuspicious of the deception, were trepanned into the lure.

That they had not the support of the people, is evident from the disapprobation which the two succeeding elections show to their conduct. They dismissed from their trust the promoters of that measure, and elected others, to redress the injustice their predecessors had committed.

If the inhabitants of the back western parts of the state are not benefited by the establishment of a Bank within the state; it is because their trade and commerce is carried out of it. They neither increase its exports nor consume its imports, nor bear a proportionate share of the public burdens. Yet were the state of Maryland, to which place their commerce is carried, to emit a paper currency, there are none of those persons but would prefer a Pennsylvania bank note at Baltimore, that could at any time be changed into hard money, to the paper currency of a state of which they are not members. Therefore, instead of opposing the Bank on this narrow policy, they would have acted consistently with their interest to have supported it, and joined their endeavours to establish a branch of it in that state.

As to paper currencies, when we consider the fluctuating disposition of legislatures, the uncertainty of their movements, the probability of the division and separation of a state, disputes about the residence of government, and numerous other occurrences that may take place in a state, there can be no confidence placed in them. They stand on such a contingent foundation, on such a changeable connection of circumstances, and subject to such a multitude of events, not easy to foresee, and always liable to happen, that paper currencies can never be trusted to either as riches or as a medium of commerce; because a medium must in the nature of it be subject to the least possible fluctuation, or it is not a medium, and paper is subject to the greatest fluctuation of all other things, being capable of sinking to no value at all, of which this country has sufficient experience.

Pennsylvania being the centre of the thirteen states, her situation, with the assistance of a Bank, enabled her to carry on a trade upon the produce of other states. Through the medium of the Bank, for Bank notes had credit in all the states, she imported their productions, exported them again, became importers for those states, and gained a profit upon the trade. By this means the riches of Pennsylvania were increased, and many industrious people furnished with employment. Of this branch was the tobacco trade.

But matters of this kind form no part of the politics of the opposition. It is more agreeable to them to keep the country low and poor, that they may govern it the easier, than to see it prosperous, and beyond the reach of their influence.

These are some of the principal outlines in tracing the subject of the Bank. As to several little matters that have been started, as well in the assembly as out of it, they are not worth wasting the public time upon.

It is of very little or no consequence to the generality of people, and a matter which they do not trouble themselves about, because it does not affect them one way or the other, in what manner the stockholders of the Bank conduct their private concerns, regulate their elections, and do many other domestic matters. Those who best know the business, best know how to manage it, and the object with the public is best answered, when that business is best performed. Those who place their money there, are the properest people to take care of it, and the better it is taken care of, the more security there is in the Bank.

The greater quantity of money which the credit of the Bank can bring into the state, the better for the people; for it is not the money collected within the state, but the monies drawn to it from distant parts, monies which would not be here were it not for the Bank, that forms the principal capital of the Bank.

As to the domestic matters of the Bank, even the opposition is obliged to be silent. The business of it has been conducted with unimpeached faithfulness and good management. Therefore the best, and only certain line to proceed on, in restoring its legal re-establishment, is to keep as near is possible to the line of its original charter. Of this we have had an experienced security, to which innovations may be dangerous and fatal.

PHILAD. March 5, 1787. COMMON SENSE.