I do not believe, that the advantages will be so great in fact, as they seem to be in speculation. They will be limited by the means of commerce which the States produce; and these may not be so extensive in the beginning as the plan supposes. Beside this, the profits of the commerce will not be so large, in proportion, after the first or second year, as during those years: neither will it be possible to increase the paper credit in the same degree. But the Bank of England is a striking example, how far this may be carried, when supported by public authority and private influence. On the other hand, a variety of secondary expedients may be invented, to enlarge the advantages of the bank. The whole system of annuities, as practised in England, may be ingrafted upon it, with such differences as are proper to accommodate it to our circumstances. The European loan may also be converted into a European Bank, the interests of which, being interwoven with the American Bank, may engage rich individuals there in promoting and extending the plan.
Very beneficial contracts may be made between Government and the Company, for supplying the army, by which money may be saved to the public, the army better furnished, and the profits of the bank extended.
I have confined the Bank to the space of ten years; because this will be long enough to judge of its advantages and disadvantages: and the latter may be rectified by giving it a new form. I do not suppose it will ever be discontinued; because it seems to be founded on principles that must always operate well, and make it the interest, both of Government and the Company, to uphold it. But I suppose the plan capable of improvement, which experience will suggest.
I give one half of the whole property of the Bank to the United States; because it is not only just, but desirable to both parties. The United States contribute a great part of the stock; their authority is essential to the existence of the Bank; their credit is pledged for its support. The plan would ultimately fail, if the terms were too favorable to the Company, and too hard upon Government. It might be encumbered with a debt which it could never pay, and be obliged to take refuge in a bankruptcy. The share which the State has in the profits, will induce it to grant more ample privileges, without which the trade of the Company might often be under restrictions injurious to its success.
It is not, perhaps, absolutely necessary that the sum subscribed should be so considerable as I have stated it, though the larger the better. It is only necessary it should be considerable enough to engage a sufficient number of the principal moneyed men in the scheme. But Congress must take care to proportion the advantages they give and receive.
It may be objected, that this plan will be prejudicial to trade, by making the Government a party with a trading Company; which may be a temptation to arrogate exclusive privileges, and thereby fetter that spirit of enterprise and competition, on which the prosperity of commerce depends. But Congress may satisfy the jealousies on this head, by a solemn resolution not to grant exclusive privileges, which alone can make the objection valid. Large trading Companies must be beneficial to the commerce of a nation, when they are not invested with these, because they furnish a capital with which the most extensive enterprises may be undertaken. There is no doubt the establishment proposed would be very serviceable at this juncture, merely in a commercial view; for private adventurers are not a match for the numerous obstacles resulting from the present posture of affairs.
The present plan is the product of some reading on the subjects of commerce and finance, and of occasional reflections on our particular situation: but a want of leisure has prevented its being examined in so many lights, and digested so materially, as its importance requires. If the outlines are thought worthy of attention, and any difficulties occur which demand explanation: or if the plan be approved, and the further thoughts of the writer are desired; a letter directed to James Montague, Esquire, lodged in the post-office at Morristown, will be a safe channel of any communications you may think proper to make; and an immediate answer will be given. Though the writer has reasons which make him unwilling to be known; if a personal conference with him should be thought material, he will endeavor to comply.
You will consider this as a hasty production, and excuse the incorrectnesses with which it abounds.
I am, Sir, very respectfully,
Your most obedient and humble servant.
[3] France owes a debt of near two hundred millions of pounds sterling; of which about twenty-eight millions is due to Governments and individuals in the United Provinces.