To surmount these obstacles, and give individuals ability and inclination to lend, in any proportion to the wants of government, a plan must be devised, which, by incorporating their means together, and uniting them with those of the public, will, on the foundation of that incorporation and union, erect a mass of credit that will supply the defect of moneyed capital, and answer all the purposes of cash; a plan which will offer adventurers immediate advantages, analogous to those they receive by employing their money in trade, and, eventually, greater advantages; a plan which will give them the greatest security the nature of the case will admit for what they lend; and which will not only advance their own interest, and secure the independence of their country, but, in its progress, have the most beneficial influence upon its future commerce, and be a source of national strength and wealth.
I mean the institution of a NATIONAL BANK. This I regard, in some shape or other, as an expedient essential to our safety and success; unless, by a happy turn of European affairs, the war should speedily terminate in a manner upon which it would be unwise to reckon. There is no other that can give to government that extensive and systematic credit, which the defect of our revenues makes indispensably necessary to its operations.
The longer it is delayed, the more difficult it becomes. Our affairs grow every day more relaxed and more involved; public credit hastens to a more irretrievable catastrophe; the means for executing the plan are exhausted in partial and temporary efforts. The loan now making in Massachusetts would have gone a great way in establishing the funds on which the Bank must stand.
I am aware of all the objections that have been made to public Banks; and that they are not without enlightened and respectable opponents. But all that has been said against them, only tends to prove that, like all other good things, they are subject to abuse, and, when abused, become pernicious. The precious metals, by similar arguments, may be proven to be injurious. It is certain that the mines of South America have had great influence in banishing industry from Spain, and sinking it in real wealth and importance. Great power, commerce, and riches, or, in other words, great national prosperity, may, in like manner, be denominated evils; for they lead to insolence, an inordinate ambition, a vicious luxury, licentiousness of morals, and all those vices which corrupt government, enslave the people, and precipitate the ruin of a nation. But no wise statesman will reject the good, from an apprehension of the ill. The truth is, in human affairs there is no good, pure and unmixed: every advantage has two sides: and wisdom consists in availing ourselves of the good, and guarding as much as possible against the bad.
The tendency of a National Bank is to increase public and private credit. The former gives power to the State, for the protection of its rights and interests: and the latter facilitates and extends the operations of commerce among individuals. Industry is increased, commodities are multiplied, agriculture and manufactures flourish: and herein consists the true wealth and prosperity of a State.
Most commercial nations have found it necessary to institute Banks: and they have proved to be the happiest engines that ever were invented for advancing trade. Venice, Genoa, Hamburgh, Holland, and England, are examples of their utility. They owe their riches, commerce, and the figure they have made at different periods, in a great degree to this source. Great Britain is indebted for the immense efforts she has been able to make, in so many illustrious and successful wars, essentially to that vast fabric of credit raised on this foundation. ’Tis by this alone she now menaces our independence.
She has, indeed, abused the advantage, and now stands on a precipice. Her example should both persuade and warn us. ’Tis in republics where Banks are most easily established and supported, and where they are least liable to abuse. Our situation will not expose us to frequent wars; and the public will have no temptation to overstrain its credit.
In my opinion, we ought not to hesitate, because we have no other resource. The long and expensive wars of King William, had drained England of its specie: its commerce began to droop for want of a proper medium: its taxes were unproductive, and its revenues declined. The administration wisely had recourse to the institution of a Bank; and it relieved the national difficulties. We are in the same, and still greater, want of a sufficient medium. We have little specie: the paper we have is of small value, and rapidly descending to less: we are immersed in a war for our existence as a nation, for our liberty and happiness as a people: we have no revenues nor no credit. A Bank, if practicable, is the only thing that can give us either the one or the other.
Besides these great and cardinal motives to such an institution, and the advantages we should enjoy from it, in common with other nations, our situation, relatively to Europe and to the West Indies, would give us some peculiar advantages.
Nothing is more common than for men to pass from the abuse of a good thing, to the disuse of it. Some persons, disgusted by the depreciation of the money, are chimerical enough to imagine it would be beneficial to abolish all paper credit, annihilate the whole of what is now in circulation, and depend altogether upon our specie, both for commerce and finance. The scheme is altogether visionary, and in the attempt would be fatal. We have not a competent stock of specie in this country, either to answer the purposes of circulation in trade, or to serve as a basis for revenue. The whole amount of what we have, I am persuaded, does not exceed six millions of dollars, one-fifth of the circulating medium before the war. To suppose this would be sufficient for the operations of commerce, would be to suppose that our domestic and foreign commerce were both reduced four-fifths: a supposition that carries absurdity in the face of it. It follows that if our paper money were destroyed, a great part of the transactions of traffic must be carried on by barter; a mode inconvenient, partial, confined, destructive both of commerce and industry. With the addition of the paper we now have, this evil exists in too great a degree.