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The Branches of the First Bank of the United States1

Published online by Cambridge University Press:  03 February 2011

James O. Wettereau
James O. Wettereau
Affiliation:
New York Univerity
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Extract

The most interesting and distinctive feature of the first Bank of the United States was its nation-wide operation through a system of branches. It is difficult to present an even reasonably definitive analysis of that system. The records available, although more adequate than formerly, are still sadly incomplete. Enough is known, however, to reveal many complexities, political, entrepreneurial and administrative. This paper is designed to offer only a rather sketchy treatment of the following phases or aspects of the subject: prototypes and predecessors of the Bank with special reference to branch-banking; the establishment of the eight branches of the Bank; the actual operation of the branches; and the relative measure of their liquidity when the Bank was subjected to the acid test of winding up its affairs.

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Articles
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The Journal of Economic History , Volume 2 , supplement S1: The Tasks of Economic History , December 1942 , pp. 66 - 100
Copyright
Copyright © The Economic History Association 1942

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References

2 Consult my article: “New Light on the First Bank of the United States,” The Pennsylvania Magazine of History and Biography, vol. LXI, No. 3 (July, 1937), 263–285Google Scholar. After the publication of that article, I was obliged to suspend further research because of a lack of funds. Since March, 1942, however, thanks to a generous subsidy from the Committee on Research in Economic History of the Social Science Research Council, I have been able to discover a vast quantity of previously unknown and unexploited material which throws a flood of additional “new light” on the liquidation of the Bank. Only a modicum of this material has been utilized in the preparation of this paper; and much potentially profitable investigation remains to be made.

3 Dunbar, C. F., “Some Precedents Followed by Alexander Hamilton,” Quarterly Journal of Economics. (October, 1888)Google Scholar, reprinted in his Economic Essays, edited by O. M. W. Sprague (New York, 1904), 89–93.

4 Richards, R. D., The Early History of Banking in England (London, 1929), 195–196Google Scholar.

5 See, for example, the accompanying article by Raymond de Roover.

6 “Efforts had been made in 1696 and again in 1731 to establish branches in Glasgow, Aberdeen, Dundee, and one or two other places, but in both instances proved unprofitable and were abandoned after a year or two.” Conant, Charles A., A History of Modern Banks of Issue, 6th ed., (1927), 148Google Scholar.

7 Clarke, St. Clair and Hall, D. A., Legislative and Documentary History of the Bank of the United States: Including the Original Bank of North America (Washington, 1832), 10–14Google Scholar.

8 Davis, J. S., Essays in the Earlier History of American Corporations (Cambridge, 1917), II, 38Google Scholar. The chapter on “Banking Companies” in this brilliant pioneer study still affords the best general survey of the rise of commercial banking in the United States during the last two decades of the eighteenth century.

9 Virginia Magazine of History and Biography, vol. IX, No. 1 (July, 1901), 70Google Scholar.

10 Starnes, George T., Sixty Years of Branch Banking in Virginia (New York, 1931) 13Google Scholar.

11 During the “bank war” of 1785–1787 when the Pennsylvania legislature repealed the state charter of April 1, 1782, in an effort to crush and destroy the Bank of North America, the directors as one means of defense secured a charter from the Delaware legislature (February 2, 1786) and threatened to remove their business to Wilmington. Subsequently, however, they compromised and accepted a second and more restricted Pennsylvania state charter (March 17, 1787). Davis, 41–43; also Wilson, Janet, “The Bank of North America and Pennsylvania Politics: 1781–1787”, Pennsylvania Magazine of History and Biography, vol. LXVI, No. 1 (January, 1942)Google Scholar.

12 Davis, 39–41.

13 Thomas Willing to Win. Phillips, Isaac Smith, Jonathan Mason, Thomas Russell, Stephen Higginson and John Lowell of Boston, dated January 6, 1784-printed in Gras, N. S. B., The Massachusetts First National Bank of Boston, 1784–1934 (Cambridge, 1937), 209–212.Google Scholar

14 Ibid., 17–32.

15 Domett, Henry W., A History of the Bank of New York, 1784–1884 (New York, 1884)Google Scholar; Nevins, Allan. History of the Bank of New York and Trust Company, 1784–1934 (New York, 1934)Google Scholar; and Davis, II, 44–46.

16 Just before his death in 1816 Morris claimed that “the first bank in this country was planned by your humble servant.” Sparks, Jared, The Life of Gouverneur Morris, with Selections from His Correspondence and Miscellaneous Papers, 3 vols. (Boston, 1832), I, 235Google Scholar. In 1785 Morris published an extremely cogent pamphlet entitled “An Address to the Assembly of Pennsylvania on the Abolition of the Bank of North America,” reprinted Ibid., Ill, 435–465. Hamilton drew very heavily on this for his discussion of alleged disadvantages of banks in his “Report on a National Bank.” Seton's letter to Hamilton is in Domett, 113–115.

17 Bryan, A. C., History of State Banking in Maryland (Baltimore, 1899), 17–20Google Scholar. On April 21, 1783, Thomas Fitzsimons, a prominent director of the Bank of North America, wrote to the wealthy Charles Carroll broaching a scheme for a bank in Baltimore, Carroll replied from Annapolis (April 28, 1783) asking for thorough details and stating that he feared he would not be able to invest as much capital in such a bank as Fitzsimons seemed to expect, “for really,” he added, “with a large landed estate & considerable sums at interest I can command but very little money.” Gratz Collection, Historica l Society of Pennsylvania. Later, however, Carroll did subscribe heavily to the first Bank of the United States and was elected to the first board of directors.

18 Thomas Willing to William Patterson, President of the Bank of Maryland, June 2, 1791. Bank of North America Records, Minute Book and Letter Book (1781–1792), Historical Society of Pennsylvania.

19 Davis, II, 49–50, 60–63; also numerous letters in the Moses Brown Papers, Rhod e Island Historical Society. John Brown was the moving spirit and was elected president. Moses Brown seemed apologetic about emerging from retirement, declined the presidency, and accepted a directorship only to oblige his brother John. Moses Brown to James Pemberton, November 2, 1791.

20 Wettereau, James O., “Letters from Two Business Men to Alexander Hamilton on Federal Fiscal Policy, November, 1789,” Journal of Economic and Business History, vol. III, No. 4 (August, 1931), 667–686Google Scholar.

21 In January, 1784, the promoters of the Massachusetts Bank, in their petition for a charter, stated that “the Continental Bank so-called has proved exceedingly useful to the State of Pennsylvania where it is placed.” Gras, 214.

22 Albert Gallatin Papers, New York Historical Society, Coxe to Gallatin, January 23, 1813.

23 It will be remembered that the fraudulent mismanagement of the Baltimore Branch of the second Bank of the United States in 1817 and 1818 nearly wrecked the whole institution. Catterall, R. C. H., The Second Bank of the United States (Chicago, 1903), chapter IIGoogle Scholar.

24 Clarke and Hall, 35–85.

25 “Indeed if the possession of a commanding share of the Stock of this Bank is an object sufficient, in your opinion, to call forth the capital of the eastern States it would add greatly to my efforts & through me to those of several others. But if the Philadelphians were to get a hint of this last it might tend to defeat us. “James Watson of New York to Jeremiah Wadsworth, the Hartford capitalist who wa s then a member of the House of Representatives, January 16,1791-Wadsworth Papers, Connecticut Historical Society. “Indeed, the subscribers here are generally of the opinion that unless there is sufficient weight eastward of Philadelphia to balance the influence of that city, they had better not be concerned in the Stock. Our people, with very few exceptions, will rejoice to co-operate with the citizens of New York in any arrangement which shall have for its object such a state of the Bank.” Christopher Gore to Rufus King, Boston, June 13, 1791. King, C. R., Life and Correspondence of Rufus King, I, 239Google Scholar.

26 Charleston City Gazette or Daily Advertiser, May 21, May 24, May 28, June 1, 1791. “Charleston, South Carolina, subscribes one thousand shares to the bank-the first payment for 650 shares of which have [sic] arrived.” Secretary of War Henry Knox to William Duer, Philadelphia, June 26, 1791.-Henry Knox Papers, vol. 28, p. 144, Massachusetts Historica l Society.

27 Providence Gazette, June 18, 1791. “As to our Getting a Branch of the National Bank it appears very clear to me that we shall stand a much greater chance of suceeding in that by First having Established one of our own, then tho we Remain Slouth Full and theirby Induce their Directors to think this Town of no sufficient consequence to Instill [entitle] us to a Branch, or an office of Discount and Deposite, as the Act of Congress hold up may be in aney part of the Union ware the Directers may think proper.” John Brown to Moses Brown, August 14,1791.-Moses Brown Papers, vol. 7, p. S3, Rhode Island Historical Society.

28 Bradford to his father-in-law, Elias Boudinot, one of the leading Congressional champions of the Bank, Philadelphia, June 16, 1791.-Wallace Papers, II, 48, Historical Society of Pennsylvania. Bradford intended to withdraw a few shares from the Bank of North America and invest them in the Bank of the United States and also to purchase four or five shares in the Bank of New York. Boudinot scraped together enough cash and securities to subscribe for 80 shares of national bank stock.-Ledger of Elias Boudinot, 1760–1814, New York Public Library.

29 Brant, Irving, James Madison: The Virginia Revolutionist (1941), 102–103Google Scholar.

30 , Wettereau, “New Light on the First Bank of the United States,” 273–275Google Scholar.

31 Davis, II, 53–58.

32 Hamilton, J. C., The Works of Alexander Hamilton, V, 486Google Scholar.

33 Wolcott Papers, vol. No. 10.

34 Of the first 25 directors, 9 were from Pennsylvania, 7 from New York, 4 from Massachusetts, with 1 apiece from Connecticut, Maryland, Virginia, North Carolina, and South Carolina. Gazette of the United States, October 26, 1791.

35 Fisher Ames to Thomas Dwight, March 8, 1792. Ames, Seth, The Works of Fisher Ames, I, 115Google Scholar.

36 Gazette of the United States, November 12, 1791.

37 Miscellaneous Papers of the First Bank of the United States (Printed Guide-Item No. 675) Historical Society of Pennsylvania. Gazette of the United States, November 5, 1791. Rules and Regulations for the Offices of Discount and Deposit, ordered printed by the President and Directors of the Bank, February 24, 1792.

38 Christopher Gore to Rufus King, August 7, 1791, in King, C. R.: Rufus King, I, 400–401Google Scholar. Davis, II, 54–56. Massachusetts Bank Records, Baker Library, Harvard University-excerpts from which are conveniently reprinted in Gras. Fisher Ames wrtfte o t Alexander Hamilton, August 15, 1791, that the Massachusetts Bank “is in the best disposition in the world, ready to give up the ghost, and take a chance for a resurrection as a branch, which will be a joyful one, because the stockholders have a sure & certain hope of getting more money in their future than their present state. Tho' a few receive the idea of abolishing the Mass. Bank with great repugnance, yet so many more own shares in the U. S. Bank to a greater amot., they hope so much from the one and despond so totally of the other, that the present sanguine moment seems to be the critical one. Tho‘this Bank never had much popularity, yet it may hereafter be courted by a certain faction …. Other passions & persons may displace the present & change the aspect of things. I draw my information from persons who well know the temper of the stockholders & who have great merit in having prepared them for dissolution. Indeed, with their connections, they are able to carry a major vote.” Oliver Wolcott Papers, vol. X.

39 Domett, 39.

40 Fitzsimons to James Bacon, February 27, 1793.-Emmett Collection, No. 5403, New York Public Library.

41 Rules and Regulations for the Offices of Discount and Deposit.

42 Davis, vol. I, chapter VII of Essay II.

43 Thomas Jefferson to James Madison, July 10, 1791. Ford, P. L., The Writings of Thomas Jefferson, V, 350–351Google Scholar.

44 Hamilton to Edward Carrington, July 25, 1792.-H. C. Lodge, The Works of Alexander Hamilton (Constitutional Edition), X, 5–6. William Heth to Hamilton, June 28, 1792.-Hamilton Papers, Library of Congress.

45 Jefferson to Madison, July 3, 1792. Writings of Jefferson, VI, 97–98Google Scholar.

46 Lee to Madison, September 10, 1792 (misdated 1790), Madison Papers, Library of Congress. At this juncture, Governor Lee, resentful of administration policy, was sitting on the political fence. Later, he became a strong Federalist once more, commanded the forces that suppressed the Whiskey Insurrection, and, years later, was horribly mutilated, crippled and disfigured in the Baltimore Riots of July 27–28, 1812, defending Alexander C. Hanson-an ultra-Federalist editorial critic of “Mr. Madison's War.” Freeman, Douglas S., R. E. Lee: A Biography (1935), I, 5–17Google Scholar.

47 Starnes, 21–24. Walsh, J. J., Early Banks in the District of Columbia, 1792–1818 (Washington, 1940), chapter IIGoogle Scholar. The Bank of Alexandria finally failed in the 1830's.

48 Starnes, 24.

49 , Ford, Writings of Jefferson, V, 277Google Scholar.

50 , Ames, Works of Fisher Ames, I, 110–111Google Scholar.

51 Davis, C. A. Beard, Economic Origins of Jeffersonion Democracy (New York, 1915); C. G. Bowers, Jefferson and HamiltonGoogle Scholar.

52 The Jeffersonians actually planned and hoped to “Abolish the bank.” Ford, Writings of Jefferson, VI, 165–172Google Scholar.

53 “… a direct, firm and resolute attack should be made upon the bank law.…” John Taylor to James Madison, May 11, 1893.-“Letters of John Taylor” in John P. Branch Historical Papers of Randolph Macon College, II, 253–254. Taylor's two famous pamphlets: “An Examination of the Late Proceedings in Congress Respecting the Official Conduct of the Secretary of the Treasury (1793) and Inquiry into the Principles and Tendency of Certain Public Measures (1794) are ably analyzed by Beard, chapter VII. See also: Simms, H. H., Life of John Taylor (Richmond, 1932) andGoogle ScholarMudge, E. T., The Social Philosophy of John Taylor of Caroline (New York, 1939)Google Scholar.

54 Consult the Annals of Congress, Senate Proceedings, March 2, 1793; December 24, 1793; January 2–16, 1794.

“I hope.… that you will say definitely whether my continuance in the bank is to be desired or not, since it furnishes so copious a topic for complaint.” Senator George Cabot to Hamilton, March 4, 1793. Lodge, H. C., Life and Letters of George Cabot (Boston, 1878) 73Google Scholar. Later in the same year, Cabot sold his stock and resigned as director. Cabot to the President of the Bank of U. S., December 23, 1793.-Gratz Collection, Historical Society of Pennsylvania.

The Republican assault produced at least temporary results. On January 8, 1793, three Senators: George Cabot of Massachusetts, Rufus King of Ne w York, and Samuel Johnston of Nort h Carolina; and three Representatives: John Laurance of New York, Thomas Fitzsimons of Pennsylvania (who never took his seat, however), and William L. Smith of South Carolina, were elected to the third board of directors of the Bank. Of these six, only Laurance of New York was re-elected to the fourth board on January 6, 1794, and he was no longer in Congress.

“It is to be hoped that the Clamour of those, who pretend to very much republicanism will now cease respecting the connection of those in the Government with the Bank,” wrote Laurance to King, January 12, 1794. “I perceive you are all out, with yourself it was design-but how did it happen with respect to the others [?]. …” King Correspondence, I, 541.

This “divorce” of Bank and Congress was shortlived. In later years the connection was resumed.

55 There is a copy of this letter from Hamilton in the Samuel Breck Papers, Library Company of Philadelphia.

56 Hamilton Papers,-vol. 24, p. 3292, Library of Congress. Also “Rough” Minutes of Board of Directors, Etting Collection, Historical Society of Pennsylvania.

57 Beveridge, A. J., The Life of John Marshall, II, 141Google Scholar.

58 Starnes, 24.

59 John Proudfit & Co. to Messrs. Rutnford & Abijah Dawes of Philadelphia, dated Norfolk, February 24, 1797. Etting Collection: Bank of the United States, Historical Society of Pennsylvania.

60 Otway Bird to Oliver Wolcott, Williamsburg, July 10, 1799.-Wolcott Papers, vol. XV, No. 29.

61 “Rough” Minutes of Board of Directors.-Etting Collection, Historical Societ y of Pennsylvania. Of the 13 directors, 8 were from Norfolk, 2 from Portsmouth, 2 from Richmond and 1 from Williamsburg.

62 On January 19, 1791, while the bank bill was under consideration in the Senate, William Maclay confided to his Journal that “The Potomac interest seem to regard it as a machine which, in the hands of the Philadelphians, might retard the removal of Congress,.…”. Several attempts were made by Southern senators to limit the term of incorporation to 1801, but without success. “The Virginians are afraid of the Bank lest it should hur t the Potowmack Scheme,” wrote Representative Hugh Williamson to Governor Alexander Martin of North Carolina, February 7, 1791.-Letter Book, 1790–91. Governor Martin, North Carolina Historical Commission. The original is now in the Gratz Collection, Historical Society of Pennsylvania.

63 Bingham suggested a clerk in the Treasury Department. Bingham to Wolcott, July 23, 1800.-Oliver Wolcott Papers.

64 Wolcott to Bingham, Jul y 28, 1800.-Wolcott Papers, vol. XV, No. 106. Dalton had also been a director of the Bank of the United States in 1792–1793.

65 Bingham to Wolcott, Augus t 6, 1800.-Wolcott Papers. Bingham also requested information on the propriety of establishing an agency, the duties the agent woul d have to perform, etc.

66 Wolcott to Bingham, Augus t 16, 1800.-Wolcott Papers, vol. XV, No. 120.

67 The Bank of Columbia, located in Georgetown, was chartered by th e Maryland legislature on December 25, 1793, with an authorized capital stock of $1,000,000. President George Washington became a stockholder in this bank as well as in the Bank of Alexandria. His will lists 170 shares of the former which at pa r value ($42.) would total $6,800. See Walsh, chapter III. From August, 1800, the Bank of Columbia was utilized as a government depository. During the autumn of 1801 it became involved in such a grave internal crisis that the Treasury Department had to give it special aid.

68 On January 30, 1804, the legislature of Virginia chartered the Bank of Virginia to be located at Richmond, with branches at Norfolk, Fredericksburg, and Petersburg and with an authorized capital of $1,500,000 of which the State itself might subscribe one-fifth. Starnes, chapter II.

69 Tristram Dalton to Oliver Wolcott, January 6, 1802.-Wolcott Papers, vol. XVI, No. 35. Dalton was subsequently appointed one of the directors of the Washington Branch and the directors of the main Bank expressed the sincere wish and hope that he would be elected president of the branch, but the choice of his fellow local directors fell on another man. In July, 1802, Dalton was appointed postmaster at Georgetown by the Jefferson Administration. Philadelphia Aurora, July 30, 1802.

70 Beard, Economic Origins of Jeffersonian Democracy, chapter XIII. I have collected a vast mass of data on the famous Jefferson-Burr deadlock, but it is not feasible to summarize it here. One Boston Federalist, Joseph Hale, wrote to Rufus King, Minister to Great Britain, December 29, 1800: “It is fashionable with feds to declare in favor of Mr. Burr. May their predilections be gratified! tho‘upon the whole I do not think it probable. Men of the most judgment with us do not expect those evils to follow the adminn. of Jeff, or Burr, which while they were candidates it was thought politic to predict.” King Correspondence, III, 357.

71 On the other hand, many other Federalists professed to find many things in Mr. Burr's favor, including the fact that he was a resident of the commercial city of New York and that he had helped to found the Bank of the Manhattan Company-although New York City Federalists did not view these things in the same light.

72 Beard; the other points included: the preservation and increase of the navy; adherence to the neutral plan; and the retention of “our friends” in office.

73 Although intensely critical of Hamilton's policies from 1791 on, Jefferson had never been a repudiationist.

74 Holdsworth, J. T., The First Bank of the United States, 66–72Google Scholar.

75 Ibid., In a letter to William Wirt, May 3, 1811, Jefferson remarked: “Mr. Gal-latin's support of the bank has, I believe, been disapproved by many.… I know he derived immense convenience from it, because they gave the effect of ubiquity to his money wherever deposited.… He was therefore cordial to the Bank. I often pressed him to divide the public deposits among all the respectable banks, being indignant myself at the open hostility of that institution to a governmen t on whose treasures they were fattening. But his repugnance to it prevented my persistence. And, if he was in favor of the Bank-what is the amount of that crime or error in which he had a majority, save one, in each house of Congres s as participators?.… Ford, Writings of Jefferson, IX, 318.

Late in 1807, Jefferson apparently thought that the Bank would be rechartered. ”I remember you thought three years ago that the charter of the Bank would be renewed.… “William Short to Jefferson, December 31. 1810. ”Jefferson Papers,” Massachusetts Historical Society Collections, 7th series, I, 153–154. But Gallatin evidently feared his deep-seated hostility. He advised the officers of the Bank to defer their memorial for recharter, and when it was presented to Congress and referred to him by the Senate, he delayed making his favorable report until the very end of the Jefferson Administration, too late for Congress to take any action while the Sage of Monticello was in the Executive Mansion.

76 Thomas Willing to Samuel Breck, June 10, 1801.-Samuel Breck Papers, Philadelphia Library Company.

77 Thomas Willing to Albert Gallatin, August 19, 1801-E. W. Balch Collection: Thomas Willing Papers, Historical Society of Pennsylvania: Photostat of Copy.

78 Tristram Dalton to Oliver Wolcott, January 6, 1802.-Wolcott Papers, vol. XV No. 120.

79 The board of directors resolved upon its establishment sometime in January, 1802. Columbian Museum and Savannah Advertiser, February 16. 1802.-Georgia Historical Society. As usual, however, it took months to find qualified local directors, purchase and equip a banking house, choose subordinate officers, etc. Not until August, 1802. did a packet arrive from Charleston with a shipment of $86,000 in specie. Joseph Habersham (President of the Savannah Branch) to Thomas Willing, July 31, 1802.-Conarroe Collection: Autograph Letters, V, 80, Historical Society of Pennsylvania; Georgia Gazette, August 12. 1802.

80 “The worst depression in business thus far encountered took place between the end of 1801 and the spring of 1803.” Smith, Walter B. and Cole, Arthur H., American Business Fluctuations, 1790–1860, 16–18Google Scholar. Loans to the United States Treasury: January 1, 1796, $6,000,000; January 1, 1801, $3,440,000; January 1, 1802, $2,740,000; January 1, 1803, $1,450,000, American State Papers: Finance, II, 288–289Google Scholar.

81 “…. you may rest assured that T. Young is so obnoxious to a great proportion of our Board, that it is highly probable that they will resign if he is reappointed” Thomas Mendenhall, Cashier of Savannah Branch, to Henry Kuhl, Assistant Cashier of the Bank, May 4, 1805.-Etting Collection: Bank of the United States, Historical Society of Pennsylvania.

82 Jacob Read to George Simpson, Savannah, January 9, 1806.-Grate Collection, Historical Society of Pennsylvania.

83 A. S. Clayton, A Compilation of the Laws of the State of Georgia, passed by the Legislature.… 1800.… 1810, Inclusive (Augusta, Ga., 1812), 254–255; 301–302; and 347–349.

84 Sumner, William G., A History of Banking in the United States (New York, 1896) 48Google Scholar. Sumner is mistaken in stating that Georgia desisted from her attempt to tax the Bank.

85 To Cash paid Sheriff amount of execution for Taxes on Bank Capital ($) 1,806.15.' Profit and Loss Statement, Savannah Office, November 20, 1812.-Papers of the Late Bank of the United States, Girard College.

86 “The absence of Mr. Woodruff from Savannah till a few days since has prevented me from replying to your favor respecting the ta x paid by the late Br. Bank of U. S. to this State. Mr. Woodruff thinks an application to the Government of this State would be of no use as without the sanction of the Legislature no refund of the Ta x would be made & therefore advises that an application be made to the Legislature of this State, at the next session, for the amount of said Tax, when in case of failure, a prosecution be commenced against the Tax Collectors & Sheriffs who levied on & reed the amount of said Tax from late Br. Bk. U. S. Doubtless in the event of judgment being given in favr. of the late B. U. S. the Governmt. of this State would then come forward to relieve those persons-without which there is very little prospect of getting anything for the Taxes paid for 1807, 1809 & 1810, the receivers for 1811 & 1812 are quite able to pay if compell'd.…'-Sam Nicholas, Agent at Savannah, to George Simpson, Cashier of the Trustees, May 18, 1819, Papers of the Late Bank of the United States, Girard College.

I am deeply indebted to the Board of Directors of City Trusts of Philadelphia and o t the President and Librarian of Girard College for permission to use these papers.

87 , Ford, Writings of Jefferson, VIII, 284–285Google Scholar.

88 Jefferson's fears on this point were well grounded. Durin g the Second Anglo-American War many Federalist bankers pursued such tactics. “Otis's correspondence gives indubitabl e proof that an excellent understanding existed between the financial powers of both cities [i.e., Philadelphia and Boston] to withhold subscriptions to government loans until peace was assured. The y hope d thus to force Madison to abandon his policy of conquest and to make peace on a basis of status quo ante bellum; but they very nearly succeeded in bankrupting their government at the most critical period of the war.…” Morison, Samuel E., The Life and Letters of Harrison Gray Otis, Federalist, 1765–1848 (1913), II, 65–67Google Scholar.

89 A steadily increasing proportion of Treasury funds was deposited in State banks between 1801 and 1811: March 31, 1801–18 to 1 in favor of the Bank of the United States; September 30, 1806–6 to 1; January 7, 1811–2 to 1. Most of the deposits in State banks were in regions where there was no branch of the Bank of the United States, or in notes of “foreign” banks which the Bank and its branches refused to accept on deposit, eve n by the governmen t collectors.

90 Adams, Henry, The Writings of Albert Gallatin, I, 171–172Google Scholar.

91 Annals of Congress, 8th Cong. 1st Sess. 1803–1804, pp. 1189, 1195; 278, 280, 282; and Appendix, p. 1282.

92 Rowland, Dunbar, Official Letterbooks of IV. C. C. Claibortie, 1801–1816, 6 vols. (Jackson, Miss., 1917), II, 20–34Google Scholar. Claiborne's letters to Secretary of State Madison and other officials at Washington give the impression that he felt that he was sitting on top of a volcano that might erupt at any moment. “I fear my decrees or rather ordinances will present a Novel appearance at the seat of Government … ”, he acknowledged, March 2, 1804.

93 Gallatin to Jefferson, April 12, 1804.- Writings of Gallatin, I, 184–185. Claiborne to Gallatin, New Orleans, May 23, 1804, acknowledging a letter from Gallatin dated April 16th.-Rowland, II, 160–164. Jefferson pronounced Claiborne's charter to be “a nullity,” but it was never repealed and the Louisiana Bank was actually organized.

94 The New Orleans directors met officially on July 16, 180S, but actual or prospective absences from the city during the “sickly season” led them to postpone the operation of the branch until October 15, 1805. Benjamin R. Morgan. President of the New Orleans Branch to the President and Directors of the Bank, July 26, 1805.-Etting Collection: Bank of the United States, Historical Society of Pennsylvania.

95 Rowland, Dunbar, Encyclopedia of Mississippi History, 2 vols. (Madison, Wisconsin, 1907), I, 181Google Scholar; “Rough” Minutes of Board of Directors, June 25, 1805.

96 “The Citizens of this town, have signed a petition to the President and Directors of the Bank of the United States, for a Branch to be established in this place. The Petition we understand, is not to be forwarded, until the Bill concerning the Insurance Company, shall have finally passed.” Kentucky Gazette, quoted in the New York Evening Post, January 2,1806.

97 The vote in the House of Representatives, January 24, 1811, on indefinite postponement of the bill to recharter the Bank was 65 to 64; the Western contingent voting 6 to 2. The vote in the Senate, February 20, 1811, was 17 to 7 before Vice-President George Clinton cast his deciding ballot against the Bank; the Western Senators voted 5 to 1 against the Bank.

98 Jonathan Mason, Jr., to Andrew Craigie, Boston, December 17, 1791.-Andrew Craigie Papers: Letters, vol. Ill, p. 43, American Antiquarian Society. George Cabot to David Lenox, Boston, September 9, 1811.-Etting Collection; Administrations I, S3, Historical Society of Pennsylvania.

99 Annual balance sheet of the Bank of Alexandria, January 1, 1808.- Calendar of Virginia Slate Papers, VIII, 460.

Charles Renshaw (Cashier of Norfolk Office) to Henry Kuhl (Assistant Cashier of Bank), May 7, 1800.-“Rough” Minutes, Etting Collection.

Chosen teller of Washington Office, November 21, 1801.- National Intelligencer, November 23, 1801.

Committee Report, “Rough” Minutes, Board of Directors of the Bank.

100 The sources are too numerous for detailed citation, but see, for example, David Harris to William Tilghman, Baltimore, January 13, 1805.-William Tilghman Papers, Historical Society of Pennsylvania.

101 “…. Some of my Friends at the Eastward suggested to me their wish that I might be a Director of the Branch Bank at Boston.-For such an appointment I have no anxiety, and but little inclination.-It might however tend in some measure to increase my professional business & in that view I would accept it, if chosen.-.… Should such a project not take effect, I wish not to have it known that it was conceived by me-you will find I have held 45 shares ever since the institution.” Harrison Gray Otis to Samuel Breck, New York, December 15, 1793.-Samuel Breck Papers, Library Company of Philadelphia.

102 The most spectacular instance of this revolved around the efforts of Oliver Wolcott, the former Secretary of the Treasury, to secure a seat on the New York board between 1802 and 1806.

103 “The attorney General having considered and decided that the prescription in the law for establishing a bank, that the officers in the subordinate offices of discount & deposit, shall be appointed ‘on the same terms and in the same manner practised in the principal bank,’ does not extend to them the principle of rotation, established by the Legislature in the body of directors in the principal banks, it follows tha t the extension of that principle has been merely a voluntary & prudential act of th e principal bank, from which they are free to depart. I think that the extension was wise & proper on their part, because.… it breaks in upon the esprit de corps so apt to prevail in permanent bodies; it gives a chance for the public eye penetrating into the sanctuary of those proceedings & practices, which the avarice of the directors may introduce for their personal emolument, & which the resentment of excluded directors, or the honesty of those duly admitted, might betray to the public; and it gives an opportunity at the end of the year, or at other periods, of correcting a choice, which, on trial, proves to have been unfortunate; an evil of which themselves complain in their distant institutions. Whether, however, they have a power to alter this, or not, the executive has no right to decide; & their consultation with you has been merely an act of complaisance, or a desire to shield so important an innovation under the cover of executive sanction. But ought we to volunteer our santion in such a case ? Ought we to disarm ourselves of any fair right of animadversion, whenever that institution shall be a legitimate subject of consideration? I own, I think the most proper answer would be, that we do not think ourselves authorized to give an opinion on the question…” Jefferson to Gallatin, December 13, 1803.-Ford, Writings of Jefferson, VIII, 284–285. Gallatin accepted the reasoning of Jefferson on the subject of branch rotation. Gallatin to Jefferson, December 13, 1803.- Writings of Gallatin, I, 171–172.

104 Samuel Breck, one of the leading directors of the Bank, gave the other side of the picture in a letter to Oliver Wolcott, November 28, 1805; “The Rotation of Directors, as originally established by a Law of the Stockholders, it was absolutely necessary to do away or to suffer the Offices of Discount & Deposit to be exposed to the most serious embarrassments.-It is well known that four fifths of the Bank stock s i owned in Europe and that a very small proportion of the remainder is held by the Merchants of the United States, hence it has often happened that, in order to comply with the rule of Rotation, the Directors of the Parent Bank have been oblig'd first to agree on proper Persons to fill the necessary vacancies, and then to inform them. If they chose to be qualified by purchasing a Share of Bank Stock they might rely on being Elected. Thus very great delays as well in Establishing of Branches as procuring Directors for those already in Operation have frequently occurred, besides its being much against the Interest of the Institution to make such repeated changes, indeed, I have Known Gent”, who being left out of the Direction were so much mortified & offended as to refuse to accept when reelected and, rather than be subject to such uncertainty, chose to employ their interest in the establishing of other Banks to which they were [sic] at all times eligible to be reelected, in fact, such is the want of suitable Characters to direct the numerous Banks within the United States that, admitting the necessary qualifications enjoined by our Charter, to be abolished, the difficulty of finding every year Thirty new Directors/which make but a fourth part of those who conduct the Nine Banks now in operation/would, indeed, be very great & perhaps, if obtained, they might be inferior to those whose Seats where [sic] vacated, under these circumstances it was that the Directors of the Bank have found great relief from the repeal of the former Law which, altho' proper when at the infancy of the Institution the Bank stock was generally distributed among the Citisens, is now become impracticable.” …-Samuel Breck Papers, Library Company of Philadelphia.

105 Dozens of letters might be cited to prove this point, but the previous note renders such documentation superfluous.

106 Papers of the Late Bank of the United States.-Girard College.

107 Ibid.

108 , Wettereau, “New Light on the First Bank of the United States,” The Pennsylvanion Magazine of History and Biography, LXI, 263–285Google Scholar.

109 Rules and Regulations for the Offices of Discount and Deposit.

110 Selected weekly balance sheets of the Charleston Office in the Wolcott Papers, the Gallatin Papers and the Jefferson Papers; also American State Papers: Finance, II, 418 and 462. Papers of the Late Bank of the United States, Girard College.

111 “Rough” Minutes of the Board of Directors. In addition the central Board did, on October 27, 1795, “warmly recommend” all of the branches to reduce their discounts materially. Ibid.

112 Ibid., April 22, 1800.

113 August 23, 1800-capital $150,000, discounts $294,720.88; late October, 1801-capital $250,000, discounts $491,790; early 1809-capital $600,000, discounts $1,041,574; March, 1810-capital $600,000, discounts $880,170; December 22, 1810-capital $600,000, discounts $718,115.54; and March 3, 1811-capital $600,000; discounts $544,932.24.

114 These were prepared each Saturday for transmission to the Bank.

115 Rules and Regulations for the Offices of Discount and Deposit; later balance sheets; Letter of Instructions for the Government of the Norfolk Office, etc.

116 The first triennial report by the president to the stockholders in January, 1795, listed only 9 notes aggregating $5,407.16.

117 “Rough” Minutes of Board of Directors, January 28, February 18, and February 25, 1800.

118 Ibid., passim.

119 Library Company of Philadelphia.

120 Papers of the Late Bank of the United States, Girard College.

121 William Tilghman Papers, Historical Society of Pennsylvania.

122 Papers of th e Late Ban k of the United States, Girar d College. In 1809 the Baltimore cashier was instructed to be more particular in his next semi-annual account as to the old lebts and the value of the property mortgaged to the Bank security-John Eager Howard (President of Baltimore Office) to David Lenox (President of the Bank of the United States), December 1, 1809, explaining why the current return was incomplete. Gratz Collection, Historical Society of Pennsylvania.

123 A Schedule of discounted Notes, due and owing, from Individuals to the Baltimore Office of Discount & Deposit, March 3rd, 1811.-Papers of the Late Bank of th e United States, Girard College.

124 Statement of outstanding debts due to the late Bank of the United States, in Baltimore, March 1st, 1814.

125 The Resolution concerning the New Orleans Office is in the Library Company of Philadelphia. Actual lists from the branches mentioned are in th e Papers of the Late Bank of the United States at Girard College. The exceptions noted are purely inferential and may be incorrect.

126 Henry Kuhl (Assistant Cashier) to th e President and Directors of the Bank, March 24, 1800, soliciting an increase of salary. “Rough” Minutes.

127 Ibid., passim.

128 The antagonism of Jacob Barker and of John Jacob Astor toward the Bank durin g the struggle over recharter resulted from the rejection of their notes at th e New York Office on different occasions. See Incidents in the Life of Jacob Barker (Washington, 1855), 32Google Scholar, and Porter, Kenneth W.. John Jacob Astor: Business Man (Cambridge, 1931), II, 957–958Google Scholar.

129 But on October 16, 1795, the directors at Philadelphia resolved: “That on consideration of the Injury & Inconvenience that may arise therefrom it is inexpedient that the offices of Discount & Deposit should receive the notes emitted from any other Bank than those instituted in the Citys (sic) o r Towns in which the said offices are establish'd & that the Cashier transmit this resolution accordingly.” This resolution was never rescinded despite the request of the Boston Office tha t it be permitted to join with the Union Bank and the Massachusetts Bank in forcing specie redemption of notes of out-of-town banks. See Thomas H. Perkins (President of Boston Office) to th e President and Directors of the Bank of the United States, August, 1799-copy in Thomas H. Perkins Papers, Massachusetts Historical Society. The Boston arrange -ment fell through as fa r a s the Branch Bank was concerned. See Directors Minutes, vol. II, under dates August 12 and September 23, 1799.-Massachusetts Bank Records, Baker Library, Harvard University.

130 Here again the main Bank intervened: “We observe by your weekly returns, that considerable balances are due to th e Office, from the Banks of Maryland & Baltimore, & which have been progressively increasing.… During the Existence of the present embarrassments, it would not be adviseable rigidly to enforce the Collection of these Balances; But we are So impressed with the Importance of Punctuality in the liquidation of these accounts, that we Shall establish a permanent Regulation to be hereafter communicated to you, which will govern your Conduct, whenever a Balance due to the Office Shall exceed a certain Amount-which arrangement, by being previously known, will place the Debtor Banks on their Guard, & prepare them to meet the Exigency of the Demand.” Excerpt from draft of a letter to the Baltimore Office, January 28, 1800.-“Rough” Minutes.

Whatever regulations were established by the main Bank must have been observed to the letter by the Baltimore Office; for, on November 2, 1808, during the embargo paralysis, we find Senator Samuel Smith writing an indignant letter to Secretary Gallatin complaining of “large Calls” by the branch on the different State banks in the city, which threatened to drain them of their last dollar and bring ruin to the merchants and traders. “I am solicited to as k your interposition,” continued Smith, “if the Banks could have a present Aid, by a direction to the Branch to permit the Banks here to accumulate a Debt to the Branch at the Risque of the U. S. to the following amo‘. Union $200,000 & Baltimore $150,000, Maryland & Mechanics, each $100,000-It would be a prudent, wise & popular measure, would be attended with no Risque, would alla y the present fears & enable those institutions to facilitate the payments of Bonds to the Treasury-If somethin g is not done, the Consequences may be dreadful.” Gallatin Papers: Letter s Received, VII, 97, Ne w York Historical Society. Gallatin probably arranged the matter with the Bank, for, early in 1809, the aggregat e debt of State banks to the Baltimore Office stood at $458,898. Undated Tabular Statement and Consolidated Balance Sheet.-Bundle: “Trade & Tariff,” Gallatin Papers.

131 The most interesting example of this was in Baltimore during the early months of 1800. I hope to publish a separate article on this subject in the nea r future.

132 The Baltimore Office went so far as to purchase a lot and erect a country banking house on a basis of equal partnershi p with the Bank of Maryland and the Ban k of Baltimore, each bearing one-third of th e cost. The Baltimore Office carried its share on its books at $6,805.10. See “A description of the real Estat e belonging to th e Bank of the United States, etc., Baltimore Office of Discount & Deposit, March 3, 1811.”-Papers of the Late Bank of th e United States, Girard College. The main Bank owned its own house in Germantown where in the late 1790's it opened a temporary branch during yellow fever epidemics. The New York Office owned its own country banking house in Greenwich Village on what is now called “Bank Street.”

133 Gras, 385–385.

134 The mai n Bank and cashier's dwelling in Philadelphia cost $149,803.07, excluding the Germantown property which cost $7,000. The new banking hous e at Boston cost a little over $58,000; that at New York, togethe r with cashier's house, cost $89,583.92 and the Greenwich property $11,277.43; and that at Charleston approximately $110,000. The Philadelphia and Charleston bankin g houses are still standing.

135 Morewood et al. v. Sims et al., April Term 1850, No. 103.

136 These generalizations are based upon voluminous documents in Th e Papers of the Late Bank of the United States, Girard College.

137 Oliver Wolcott Papers, vol. XXIII, attached to No. 55.

138 Taylor, George R., “Wholesale Commodity Prices at Charleston, South Carolina, 1796–1861,” Journal of Economic and Business History, Supplement to vol. IV, No 4 (August, 1932), 855Google Scholar.

138 Profit & Loss Account, February 24, 1817.-Papers of the Late Bank of the United States, Girard College. Also sundry letters in the same collection.

140 , Taylor, “Wholesale Commodity Prices,” 856Google Scholar.

141 “The city of Charleston subscribed $2,598,000. to its capital-a sum greater than either New York or Boston, and surpassed only by Philadelphia and Baltimore.” Deusen, John G. Van, Economic Bases of Disunion in South Carolina (New York, 1928) 146Google Scholar.

142 Ibid., chapter IV, “Bank and Sub-Treasury.”