ROBERT MORRIS TO JOHN JAY.
Philadelphia, July 13th, 1781.
Dear Sir,
I enclose you in this packet the plan of a national bank, which I have been induced to adopt for the following reasons. The issuing of a large paper medium converted the coin of the country into a commodity, so that much of it was exported and the remainder concealed. The depreciation of our paper has so lessened our currency, that there is not a sufficiency for commerce and taxation, without creating by the latter such distress in the former, as must injure every order of men in the community. It is necessary, therefore, to fill up the deficiency in such proportion as it may be called, and with such medium as may preserve its value.
I have already in my letter of the 4th instant stated the want of ability in the people to lend, and of credit in the government to borrow. An additional reason, therefore, for establishing a bank is, that the small sums advanced by the holders of bank stock may be multiplied in the usual manner by means of their credit, so as to increase the resource, which government can draw from it, and at the same time, by placing the collected mass of private credit between the lenders and borrowers, supply at once the want of ability in the one, and of credit in the other.
An additional reason for this institution is, to supply the place of all our other paper, which it is my design to absorb as soon as possible, and thereby to relieve the people from those doubts and anxieties, which have weakened our efforts, relaxed our industry, and impaired our wealth. But this must not be done, without the substitution of other paper, for reasons which I have already assigned, and because that our commerce would suffer for the want of that facility in money transactions, which paper alone can give.
Finally, one very strong motive, which has impelled my conduct on this occasion, is to unite the several States more closely together, in one general money connexion, and indissolubly to attach many powerful individuals to the cause of our country, by the strong principle of self-love, and the immediate sense of private interest. It may not be, perhaps, improper to show and explain this plan to the Spanish Ministry. They will then perceive how, by an advance of money, they may in this instance increase our resources and our efforts in a degree much superior to the immediate sum, and they may be assured, that on a variety of other occasions, similar benefits will result from it. I take this opportunity, however, to observe to you, that I do not mean this, or any other communication, should be absolutely made. It is, on the contrary, my unalterable opinion, that a prudent Minister on the spot should be left to act with large discretionary power, being always furnished with such details, as will enable him to judge with propriety, and act with decision.
It will undoubtedly strike your observation, that the sum of four hundred thousand dollars is very small, considering the object which it is my design to effect. I acknowledge that it is so, and when I tell you, that I was very apprehensive that we should be unable to fill a larger subscription, and when I add, that it is far from certain we shall get all of this moderate sum, you will see still more clearly the force of those observations which I have already made. But it is weakness to be deterred by difficulties from a proper pursuit. I am, therefore, determined that the bank shall be well supported, until it can support itself, and then it will support us. I mean that the stock, instead of four hundred thousand dollars, shall be four hundred thousand pounds, and perhaps more. How soon it will rise to that amount, it is impossible to foresee. But this we may venture to assert, that if a considerable sum of specie can be speedily thrown into it, the period when its force and utility will be felt and known is not far off.
After I had determined to make the application to the Court of Madrid, which is contained in my letters, it was my next object to obtain for you such support as might materially favor your operations. For this purpose I have written to Dr Franklin, and have told him, that you would receive by this conveyance, and forward to him, copies of those resolutions and letters, which may be necessary to explain my appointment and powers. I lay this task on your Secretaries, because the want of clerks in my office, and the many things to be done, together with the short time allowed me by the departure of the vessel, prevent me from having duplicates made out. I have written to the Doctor to apply to the Court of Versailles, to further your negotiations with their influence. I am confident his application will not be unsuccessful; but how you may derive most benefit from the cooperation of the French Court, you best can tell. Major Franks, therefore, is instructed to take your orders for Passy, and return thence to Philadelphia; so that you will have an opportunity of communicating fully with the Doctor on any subject you think proper. You may write to me by any opportunity, if this should arrive safe, because our cypher will prevent you from being exposed to interested or impertinent curiosity.
To obtain for you still further assistance, I have applied (in the absence of M. de la Luzerne, who is gone to camp,) to M. de Marbois for letters to their Ambassador at the Court of Madrid. I have stated my views, my hopes, and wishes, with that candor which is proper on such occasions, and which I wish to preserve on all occasions. M. de Marbois has, in consequence, written a letter on the subject, in which he informs the Ambassador of our conversation, states the disorders of our finances, and makes polite mention of my operations, my designs, and abilities, as well as the confidence reposed in me by Congress, and by the people at large. He details the proposed plans, and particularly that of the Bank, and shows forcibly the advantages, which would result from a considerable advance of money by Spain. He assigns also very proper reasons to show why it ought to be considerable, if it be made at all. The great interest of France in this business, as well as the open and candid manner, which has marked all transactions I have hitherto had with the Minister of that nation, induces me to believe that this letter is more than a compliment, and that as it is intended, so it will operate to produce the desired effect.