^. IMAGE EVALUATION TEST TARGET (MT-3) .«f^ ^ ^ 1.0 1.1 UBJ 125 |jo "^^ MHI mmwn iM il2.0 IK Hi u 11:25 HI 1.4 UHI 1.6 6" O^ / 4*^? f few, at the risk of many, I may, without fear of censure, confess myself unequal, or unwilling ; but the prominent qualities of which are so evident, and the effects so familiar and long observed, that it will not surprise, if some of the lineaments should excite attention, above the ordinary interest ' ,^. or suspicion that exceeds its usual boundary. r In analyzing such a combination of men, protected by real \ wealth, or imaginary millions, the public can be little in- / terested in personal attack, or individual satire ; and possibly, I the serious nature of the subject, would preclude the happy ^ illustration of either : but, as a public body, with whom the intiM'ost of evtM*y one is arssimlhiti'd, a ll'W obr^orvations may j not be deemed irrolevjiiit, or enquiry siipi-i lliious. In all the roUilions of ancient or uiodcrn jurispnuU-ncf*, reciprocal contingency is necessary to constitute an absolute »:ontracl; and it will bo diffictdt for the most infrcnioiis so- iMiistry of the present day, fruitfid as it is, to peivtrt its mean- ing or pvade its» intention v^. Opinions may bo divided upon the abstract principles of a «ciKMice, or the theoretical dilUcnltics of lejral spccidation : but there can be no division, or misinterpretation, oi a practice formed for tlie most beneficial purposes, and adhei\:d to by every tradin*^ nation. ^^ To prevent monopoly, and for the jirotection of the general intercuts c/^ society, it lias been the wisdom and practice ot "every pfovernment, to enact the severest pennliies ; and there- fore, the Parliament of Great Brilfiin prohibUs the Association ofitny number cxcecdirii^ s/.r, in any Ftr/n^ or Stock Compant/, iinleHS incorporated by its authority : chartered, they become ii legal body, invested with privileges and inununities, and from individual responsibility, from which the private trader is not exempt. Without this, the public would be ever liable to the fraudulent impositions of adventuring individuals, who with an ostentatious aj)pearance of fictitious capital, might pillage the credulous, and by an invented prospectus of an- ticipated gains, induce the sanguine to hazard their hard* earned savings* Indeed, with all the caution which the wisest states could supply, too many and too fatal have been the schemes by which the designing have been enriched, partial fortunes raised upon general ruin, private &ith forfeited, distress increased, and public confidence betrayed. To hold out the prospect of domestic comfort, and the speedy acquisition of wealtli, are subjects, however flattering, and illusory, that too hastily incline our reliance : the vivid colors with which imagination encourages hope, influences A 3 1: V] If! f ' our jiulginent, anrl easily perflnades us into a realization of ()i« Hcheni(7!4, that are projected by the cunning or promoted by the avaricious. To prevent such combinatlonR, has ever been the aim of the humane and the wine ; to form and profit by them has equally attracted the attention of the aspiring, or abandoned ; direct- ed by selfish feeling, or unprincipled intention, they have been enabled to revel with impunity on the confidence of those vrhose folly or imprudence assisted their plans. Fully to appreciate that which has been done, it will be necessary to call to our minds what there was to do, and the situation of these Provinces, when these establishments origi- nated. War, which in other countries is so calamitous and desolating, was in this of a contrai7 tendency ; particular losses and devastations no doubt occurred, but the general effect was the same : an influx of specie and an encrease of trade. It has ever been the case with colonies where the bur- then of the war falls alone upon the mother country, and where the payment of troops affords such a ready circuUtion and iucofiiiderate expenditure. ' Naturalists assure us that the human body is only capable of obtaining a ceitain degree of muscular power, or health ; and the impossibility of continuing long at that ; the Consti- tution of every cour^'y is similarly circumstanced. Canada before the war was, as to its financial resources, in the most emaciated state of weakness and inability ; with scarcely an interchange of specie, it was carrying on an immense traffic, remitting the produce of the country against the balance of trade, and virtually coming rich, by the most advantageous .system pf commerce, without the ordinary auxiliaries, of ne- gotiable representation. But war quickly changed the state of her political health; invigorated by a population of daily expense and supply, her Imports received an impetus, which hev internal trade kept pace with ; by a transition, not unfi'c- quent in inercantile nuctuation, she attained a stamina of real wealth unf^qualled by countries of greater importance, and exceeding the hopes of hor most sanguiae promoters. Improv-. ing every advantage of local circumstances, she invested heip. » . n of t)i« by tlie n of the equally direct- ey have ofthoue will be and the ts origi- »us and rticular general reaae of le bur- fy, and :uiation capable health; Consti- Canada tiemoit cely an ! traffic, lance of tageous of ne- le Rtate of daily whicn : unfi'e- i of real :e, and mprov-. ted heif. capital and her credit, in the fallen maniifuctures of the mother country : their unexampled depression facilitated every ar* rangemcnt for profitable purchase ; and which the unpr^ce^ dented nature of exchange, so favorable at that time for Cana« da, Htill more profitably enabled her to fulfil. Fortunate, for a while ambition and iivduHtry extended tho empire of her trade, enterprise received additional ardour, avarice loosened its grasp ; and with hopes sanctioned by prevalent success, risked its hoards in the confidence of participation. In this state of lucrative employment and plethoric success, the peace found UR, the troops were sent home, establishments broken up, with stocks, that improvident calculation, or former pros- perity, had too greatly enlarged. These unforeseen demands withdrawn, trade be^an to subside, and by degrees resumed its former level; the unexpected inundation of specie, neces- sity insensibly directed to its former channels. To this ill- proportioned extent of trade, the internal resources of the Colony were inadequate; liberal credit was given, and every effort used to perpetuate that which in itselr was unnatural. The trading mania became epidemic ; new establishments were formed upon the flattering retrospect of that which had been done ; many, unfitted by their education and habits, embarked what they nad amassed during the war; all parties became competitors in the extent of their outfit ; and that which the limited capital was unable to do, the assistance of firiends waa (engaged to accomplish. From a competition thus excited which the population was unable to support, ill will was quickly engendered, jealousy per* vaded the wnole, prices were lowered, and each sacrificed his property in the hope of extending the ruin to his rivals. With- out estimating the rf al cause of this unlooked-for depression, this contest v/as carrying on ; the credit which had oeen ex- tended to them, they as liberally extended to others — their ledgers became bulky by inconsiderate reliance, and nominal figures inflated their pages, without the reasonable depend- ance of a negotiable asset. Importunity from home induced general solicitation — necessity, rendered irritable by uncom- plied-with-dcmands, and inability to pay, was content to de< vise means ibr actual security ; mortgages were taken and lands A 4 t r 10 W boMf'ht With an avidity that fiar alone impellecl ; balances vvf re liquidated, and real Value attached to alinost imaginary acrcsj. The merchant whose views are expanded with the extent ot' his iradej isolated from all potty distinction, takes a range ot* feehng, calculates upon the unhappy fluctuations of" trade v^ith mercitid consideration, and relinquishes his claims with a com- miseration proportioned to its risks. Unhappily for the country debtor, tlie country retailer is actuated by no such motives ; his views are bounded by the narrowness of his transactions, the multiplicity of small debts comprising the whole of his dependance ; the lenient acquittal which the liberality of the merchant induced hiuito give, only increases his cupidity, as it presents the nearer prospect of approaching ease. The law is then set to work, the, most destructive engine of copimercial defalcatitn, and just in the inverse proportion of the mercy lliey have experienced, are they themselves actuated ; valuable property is seized, and sold, at scarcely a consideration equal to thp payment of the transfer, and circumstances might be re- lated that exceed the oppression of a Star Chamber, or the rigor of an Inquisition This general depreciation, so universally felt, and acknow* ledged, did not arise from any alteration in the internal! capa- bility of Colonial Revenue, but from circumstances remote and unexpected. The war had given a character to the minds and m'&nners of the inhabitants, little to be calculated upon in a country hitherto so foreign from its influence. The peaceable retire- inent of a people for thirty or forty years, with the full recol- lection of tlie American struggles, had biassed the opinions and dispositions of the rising population. Unaccustomed to the gaiety of a camp, its alternate relaxations and &tigue, they had been instructed only in the laborious employment of agri- cultural exertion, and the superfluous product of their indus- try was exchanged for such comforts as domestic labour could not ensure, or foreign climes alone afford* That which before was only *o be attained by slow and painful degrees, was now as quickly to be gained by a few hours of more profitable ex- .crlion in the service of the Grovernment. The transportation of stores, the improvement of forts and fortifications, readily J IT ces vvf re ry acre:*, xtent ot' range of ide with h a com- country notives ; tactions, le of his y of the dity, as The law iiflercial e mercy traluable n equal It be re- , or the ickrK)w- ilr capa- remote nners of country e retire- 1 recol- >pinions lined to lie, they of a£[ri- ' indus- r could k before as now ible ex- »rtation readily (upplied all those wants, for which, before, so many hour.rwer2 necessary. Agricaltural pursuits were neglected, or aban- doned, and the dependence which had formerly attached it- self to it, as the pennarwint; interest of the individual, and the country, was now superseded by the facilities which those various means afforded. The rise or fall in provisions was little felt in a country where l^-bour could be so vei*y profitably employed ; cattle were sold, because their value was enhaiiCed^ -without' computation upon their more advantag'eous increase, or the prospect of renewal. With a })erfect reliance upon the ^continuation of these adventitious circumstances, in which prosperity was smiling in the midstof desolation' and carnage, the war suddenly ended; nor was its termination greeted with the joy with which peace generally hails her votaries ; for that which, at its commencement, had teemed with all the horrors of imaginary and real danger, had now gathered strength from the surrounding objects of protection and safety ; everyone, directed by dilrerent views of ambition or gain, was desirous of obtaining se»me emolument from war, politics, or merchan- dize. Drained of its internal means of actual subsistence, the wair h^ left nothing in their place but specie, which for the two or three following years went to the United States, in payment of those necessaries which their occupationj during the war, had prevented the attainment of. A general defi- ciency of means pervaded all ranks, every link in the great chain of commercial responsibility was, in-some measure, af- fected ; with heavy balances in their favoi^,'it was yet impos- sible to make their remittances. In this stagnation, which had all the effect of bankruptcy, it became necessary to devise some means to arrest the spreading insolvency. It 13 the characteristic merit of the intelligent merchant, to act upon pressing emergency with a promptness of decision and resource^ equal to the nature and extent of the occasion. In this his character assimilates with that of the statesman, in tlie ability it call^ forth, in identifying his interest, even with' those resources which his invention suppliea ; and in making those veiy efforts which necessity compels him to adopt, to- wards the extrication of his difftculties, subservient to profit. The mind^ habituated to the review of transactions in all 12 I' li l'-( ,li their bcariii«rs, and to an estimate of their events, however remote, is apt to judge with precision and correctness, and can grasp the varied extremes of mercantile termination. Em- boldened by conscious rectitude of intention — by sanguine calculations — by courage and confidence in the latent poweit of his mind, or in those resources which ability and skill sel- dom fail to produce ; few circumstances appal him, he im- proves every favorable opportunity, and ultimately, perhaps advantageously, retires from a concern in which ruin seemed inevitable. ;vj In this dilemma of increasing ruin, necessity supplied the place of wit, genius, and ability ; a general concurrence of sentiment, or coincidence of circumstances, induced the same effort, all eyes were directed to the means of parrying the im- pending danger; nor will it excite the astonishment ot.the financial speculatist that a Bank was instituted, which so amply unites the auxiliaries and support of mercantile foundar tion, capital, and profit. . . > These Establisments perhaps exceed, in their application and success, all the endeavours of ancient or modern science. In tain may Mathematics and Philosophy attempt the quadra- ture of the circle ; perpetual motion, or an everlasting lamp ; even the boasted power of transmuting metals, falls short, vei^ short, of the attainments of these Alchemic asst^ciations. In the fabulous history of the Phcenix, classical fiction asssigns its generation to the ashes of its predecessor ; what veneration^ tlien, should that art excite, which can raise splendid monui> ments of colonial greatness, of corinthian decoration — ^f circu- lating wealth, with less foundation — that can realize the vision- ary showers of Danae, and exceed the possession of Pactolian sands The successful dawning of one Bank, has given encourage- ment to others, until imagination may anticipate infinity. La Chambre asserts that plants grow in such abundance in Egypt that they are forced to throw sand upon them, to prevent tnem choaking one another ; and to take as much pains to hinder their growth, as in other countries to cultivate it. It may be as difficult, possibly, to devise means to repress the rising exu- l>eran<:e of these exotics, when once they have taken root. Ls, however ctness, and alio II. Em* sanguine tent poweit id skill sel- he m. im- ly, perhaps uin seemed upplied the :urrence of id the same ng the im-« nent ot.the which so tile founda* application rn science, the quadra- }ting lamp ; i short, veiy ations. In asssigns its veneration^ tdid monu^ 1 — njfcircu- the vision- >fPactolian encourage- Lfinily. La :e in Egypt event them ( to hinder It may be rising exu- 1 root. 13 These reflections may appear bold and unfounded, probably to the superficial observer : to the tradesman, whose un- bounded confidence gives uninterrupted currency to their spurious issue ; and to others, who have associated their names upon the real, or implied honour of their projectors. An association may become corrupt, without its origin having beeiv. venal; and 1 am far from intending to attribute dis- honorable motives to any one concerned. But, an enquiry into the effects of such a system, cannot be conducted by cere- monious or partial investigation. The difficulties that impede the progress of commerce will, with many, palliate the introduction of any means that may promise dumbility or support ; and, separated from the con- sidemtion of its ultimate tendency, may give it unquali£ed sanction and assistance, while, probably, those whose mterests and property are most likely to be prejudiced, are the last ta whom conviction may occur, or its consequences appear. In the present view of the subject, it may not be necessary to remark upon the impolicy of allowing a combination, that may be destructive of general confidence ; and of nurturing a pov/er that may attain a political ascendancy, inconsistent with the welfare of the country. Although candour may claim the acknowledgment, that there are few instances of public bodies betraying the interests of their Cv/untiy ; yet, in times so jealous of the preponderations of power, it may not be unr seasonable to observe, that the excess of power in the peopla was as fatal to Athens, as that of the prince was to Persia. But throwing the political danger quite out of the question, I would only wish, iiv the present discussion, lo draw tlie atten- tion to such conpeqaences as may arise, not only to commerce in general, but to the individual security of every man in this Colony. In a country like Canada, so free of political restraints of every description, of legislative interference, and religious.in- toleration, it may create some astonishment, that any objection should be urged against institutions that have become po ular and approved ; against associations that apparently combine privattt advantage with public convenience. But however ■■.-<*i- \m n ■ 14 -llaltcrinjif the testimony of private advancement may be, tlioa^ niousnres nin«t be practically wrong, which engraft individual \ agorandizenicnl only npon geuerat ruin : nor can a more fk- \ vorablc cohritriiclion be pUt upon a speculation, Ihat claims j cifny advantage of projU^ eculaiion. Confidence in the lionor and pru-dence of the d'u'ectovs, may do much to lacilitate laeir currency, but cannot establish per- manent Becuriiy ; it hiay extend but cannot prevent the ruin. If the " Joint funds of the Association" be the only se- curity upon which public confidence is grounded, or which tl»e ^claimant can pursue, the boasted security of the Colonial Banks may terminate in an hour, may be terminated now. The expense of public buildings, the organization of the esta- blishment, or losses, may have exhausted those very funds upon which their issue is founded ; the deprecation of ex- change, the fall in bullion, the failure of agents, and the unfortunate termina>tion of justifiable risks, may at any time innocently consume every shilling of their original capital. Their discounts (thtnr only soui'ce of profit while exchange is at piar) must be attended with all' the common hazards of trade; and every mercantile feilure will aflect the validity of their security. With all the circumspection that the most rigid caution can direct, and with every scrutiny as to the responsibility of indorsements, yet the Banking system in- var'ably raises a train of accommodation paper that will baffle thieir utmost vigilance. The temporary wants of merchants, wdl induce temporary accommodation ; names will be lent for mutual assistance, until a chain will be fornr^'^d of sucli reciprocal dependence, that the fracture of one link will in- volve the whole in one commoji ruin. The bona fide transac- tions even, of the most rcspectiible houses, depending upon a continuance of confidence, may sustain incouTenience that it may not be in their power afterwards to repair ; the caprice of a President or Director, arrayed in all the power, without the symbols, of the ancient Dictator, may figuratively apply the axe to commercial credit, PrepossessioUj prejudice, or 15 ay be, tlios^ ft individual a more fa- l/ial claims from loss. tee have the mwg trans- i •ectovs, may tablish per- nt the ruin. he only se- el, or whicli he Colonial inated now. of theeeta- very funds Ltion of ex- \ ts, and the at any time nal capital, exchange is hazards of ! validity of t the most y as to the system in- t will baffle merchants, vill be lent ''d of sucli ink will in- de transac- ing upon a kience that the caprice ir, without ively apply ejudice, or 1 x'ivtitc patronage, may influence or reject ihe discount of jil's; collision of Hitercst, or even party feoling, is able to stab the credit of the private trader, Hnd milititetigainst those very principles that the Banks are intended lo Rupjiort. In jhe systems of Banking, however conducted, two objects must uecessarily present tliemselvcs — the one comj)rising their own })roHls, as the object of the institution ; and the other the be- nefits which are proposed to arise to the public : and yet, however remote these objects may appear, they are indis- solubly connected. The profits of the Institution are only to be attained by the fortunate adventures of the Bank ; public confidencecan alone promote it, it is inseparable from its well-doing. In return [or this confidenrc reposed, it is but just to expect that their dissociations shall not be founded in fraud or exasion — that they shall not justify as a Public Bod?/ what they would scorn to ormtas Individuals — that the amount of the capital adver- tised ohall be the real and actual sunt subscribed — that no pri- rate collusion, or secret understanding, shall enable them " to keep the word of promise to our ear, and break it to our* hope." — In fact that the untarnished character which, as indi- viduals, they sustain, shall be the standard upon which they v/ill regulate their proceedings; and that th(i circulation of their Paper shall be wise and cautionary. The profitable circulation of Bank Paper can only be in the proportion which their fictitious issue may bear to the real amount of the funds reserved ; that is to say, in the proportion to which their fictitious circulation may be extended, without endangering any call or run upoii their dormant funds, llie difficulties and expenses of replacing specie are such, that the line of transactions which shall touc!i tlwi reserved fund, will be the line beyond which they cannot profitably extend their trade, and every negotiation which shall be extended beyond that line, must be attended with actual and increasing loss. It must be clear that if their issue be only the representative of their real capital, no profit can possibly accrue, unless they calculate u])on the lo.sses of their Notes by sea, land, or fire. Upon the principles which Adam Smith has laid down, thi domestic commerce of the country musj, be the boundarv of <*V w 16 m their transactions, nor can the profitable application of ficti- tious issue be extended beyond tlio real amount of what actual gold and silver would be in the country, without the assistance of these auxiliaries. " The commarce and industry of a coun- try, however, it must be acknowledged, though they may be somewhat augmented, cannot be altogether so secure when they are thus, as it were, suspended upon the Daedalion wines ot paper money, as when they travel about upon the solid ground of gold and silver. ^ Over and above the accidents to which they are exposed from the unskilfulness of the conduct- ors of this paper money, they are liable to severa' others, from which no skill or prudence of the conductors can guard them.'* The experience of all Eiu'ope has proved that the circulation of paper money has invariably tended to make the circulation of real money more scarce, and ultimately to banish it entirely. Those who argue or imagine that the issue of any certain sum. of paper money is an actual addition to the sum in circulation, argue upon premises that are in themselves false, and can by no means justify such a conclusion. The issue "of j^ 100,000 of paper money, for example, does not add :£• 100,000 more to the circulation of the country ; it has decidedly the contrary effect, as it banishes the exact amount of gold and silver. As paper money is not adapted to the purposes of foreign com- tnerce, it cannot be applied to it. No subtilty of reasoning would induce the Chinaman to exchange a chest of tea or a bale of silks for a ship-load of these flimsy commodities ; and the London merchant, although he might willingly give credit, would want something more than the vaunted " Joint funds of the Association^^'' in security. He would require private cha- racter and the " green fields" as collaterals for his confidence. He would ridicule, as impossible, the credulitt/ which could ground ani/ faith upon such more than Mahometan Imposture, The circulation of paper money must, therefore, be circum- scribed, and limited only to the local uses and negotiations of domestic commerce. ^100,000 of paper money, by an- swering as the medium of home trade, will allow the mer- chants to export ,1^100,000 of gold and silver, which was the before existitig medium to foreign commerce : it does not come in addition to the capital of the country ; it only fills up the vacuum which the egression of the jplOO^OOO of specie oc- I i ^ m of ficti- [lat actual assistance jt'a coun* y may be ure when ion wines the sohd ndents to conduct- ers, from rd them.'* irculation ulation of t entirely, rtain sum. re Illation, nd can by f 100,000 [) more to contrary liver. As rign com- reasoning r tea or a ties ; and ive credit, it funds of vate cha- >nfidence. ich could iposture* e circiun- rotiations , by an- the mer- 1 was the not come ils up the pecie oc- i - ir casions. It is upon the home trade, therefore, cnTy, wpon which any liank can advanta<^eoiisly cali-ulatc upon the ex- t^casion of tlieir issue. If any sum hm-onil th.>t is circiihifod, it iuiuu'diato^y is broujj;ht bacli to tluj liunk, to bo oxchant^vfl for money of more general application. This wouUi'occa^iion the consLciut payineut oii specie, aud wuuid he accoiupanied ^Jth constant loss. In a country like Oreat Britain, M'liere the succe.s of manu- factures CDUstitutcs a great portion of her political wealth, the Banking system has no doubt been pe( uliarly advantageous. The purchase of the raw materials of foreign countries, setting aside her foreign wars, would naturally and profitably exiiaust her specie ; but the manufiicture and exportation of those raw materials, would as naturally bring back her specie. Then, the substitniion of paper money, dtfferenilu^ in I rut/ty founded from the Colonial iijmks, might be benelicially used, in en- abling the manutiicturer to convert those raw materials Ibr a ■ foreign market. In Canada, however, where manufactures tbrm no pairt of Iter political wealth, and where a machine for cutting a few nails bounds her utmost power and capa^ bility ; it may be a problem not very diflicult of solution, whether more than one Bank can be protitably conducted } But it certainly must be self-evident, that this one iiw«/c should be upon the most permanent and solid fnmdation, If, as it l\as. been satisfactorily proved, that the introduction of paper money lessens the circulation of real coin, the sniallci: the notes in which that paper currency is, the more evident will that scarcity appear, as it will hardly bo necessary to keep specie even for the purposes of change. In America, where the Banking system caused so great a scarcity of specie, small and smaller notes wi re issued lo rcMnedy the increasing incon- venience. The remedy was fOund only to assist the cause ; and so successfully co -operated with it, that Bank paper was in general circulation almost as low as its most nominal coin y cerlainlv as low as three cents, the thirty-third fraction of a dollar.^ I^>en to the present writing three-ceiits promissory KOlcs are in circulatiun. ■ft -^ .'^- if > I ii! }f> ! J 18 To Kuch an extent \^'a<) the swindling speculations of Bank- in,q[ Companieri carried, tliat, in J 722, the Exchange was at that liine^ from ISO to 1100 per cent against some of their Banks ; and to this day, scarcely any one of them is at par — terrible coincidence, and fatal proximity ! Some of the Banks in Scotland, even long since that period, to enable them* selves to profit upon their fictitious issue, inserted a clause in thoir notes, making them payable on demand, or six months after, with legal interest at the option of the Bank. Human assurance had not at that time attained the acme of its eleva- tion ; otherwise, the?/ might have rivalled the Canada Banksy in the original stipulation of — Out of the Joint Funds of the Association, and no other. The Government of Great Britain then interfered, and terminated their fi-audulent proceedings. The paper currency of the Banks of Canada, brings to my recollection what I have read somewhere of the currency of Malta. The common people were there paid in a copper coin, called a piece of four tarins, equivalent, in ideal value, to about eight-pence of our money, but intrinsically, not worth more than about two farthings. To render this coin more currtmt, public confidence was, as it now iSf necessart/. It was stamped with this motto: " Nonaes, sed fides;" of no rial value, but confidence is every thing. Can the Banks of Canada, founded as they are, say more ? Against these positions it may probably be urged, that the Director* would Keep their discounts within the limits of jH"U- dence, and thereby not endanger their Capital Stock. But it will be equalyly easy to foresee, that if the whole of the original funds of the Association are yet in their coffers, and that their discounts aTe only to that extent, their transactions could only be neutral ; that is, they would gain no more upon the fictitious issue, than they would Iqse oy not employing the dormant capital ; that, therefore, they must issue just twice the an»ount of the " Joint Funds of the Association," oxclusively of an amount to cover the expenses of the Esta- blifihiuent, before they can make a half-yearly dividend of thtoo per cent above the ordinary interest of the country, wiiiio the Principal is secured in one case, and in danger in the other. Now, taking the expenses of the first year at the jTioderate rate of six thousand. poundi, it will require the pro- f ■^<^' ill' •*■ of Rank- le was at n of their 1 at par— ihe Uanks ale them* clause in K months Human its eleva* fn Banksy ids of the at Britain )ceeclings. igs to my irrency o£ pper coin, value, to not worth :oin mw€ ssart/. It j;" of no Banks of , that the its of pru- Dck. fiut ole of the )i!ers, and insactions no re upon employing issue just ociation,** the Esta- ividend of u country, danger in ear at the re the pro- fiiftble iflsue of one hundred thousand pounds, exdeedinff the amount of the joint funds, betbre they can divide one shilling more than common interest among the stockholders. Esti- mating the capital of any Bank at ^§^250,000, it must ne- cessavily enforce the constant issue of j^^50.000, without the allowance of one shilling for bad debts, to keep the Company only neutral in their transactions, and solvent in their capital : 80 that the constant issue of ^600,000 can only obtain com- mon interest for the original capital risked, and a bonus or pir centage, that will, in peiilous times, average tl>e losses in trade. And taJcing sixty days as the common period of discounted hWh, k will require the annual risk of three million^ sic hundred thousands pounds having been incurred : to gain what ? less than one and a half per cent above the usual interest ! Com- puting the risk of debt at one and a half per cent, it would only require five years to reduce the establishment to absolute and irretrievable bankruptcy. Now let nie ask, where is the merchant who would not willingly give one and a half per cent, even -five oer cent in this country, to guarantee every ^:tsk of debt. These observations could not apiply, if the private property of the Stockholder were pledged in security tor the transactions of the Banks. Deprived of this, tlie notes of the Banks are not upon the same footing of responsibility with the paper Of the private merchant, or the Country Batiker in Engliand. The forgery of -tlieir paper is prevented by the eeverest punishment due to crime, that of death; whilst upon ihese Banks, forgeries may be carried on to any extent, wiih scarcely a penal statute to interfere with them : a misdemeanor is the most that can possibly bfi made of them. These calculations and remarks can only locally apply to the Banking system of this country, where, perhaps,' upon the present routine of Government, no sources are open 'for the profitable application of capital, but that of discounting bills. In England, Government transactions furnish different means : '■4, ^immwwfmmnifum 1 : 20 h'.ins, Kxchc(j\icJ'r!)ills, Imlia bonds, and \avldu8 6thtr source*^ oU'rr perft'ct and permanent security for the profitable appli- CHtion of CJipital, and an instantaneous resource in oase of nnrrafency. Therefore, not depending upon discoitnts alone, the Bank of Enpfland regulates its discounts according to the scarcity or plentifnl«css of those more solid secm'ities, and would, if they could consistently, decline most private paper; added to which, they have a Conunission of i?450 per million^ as Agents for the public funds, And j^805 per million on new loans, which assists towards the expenses of the establish^ tnent. Hitherto we have viewed the Banks in their most favorable aspect; on the contrary, suppose, instead of the whole of their projected capital being in the coffers, that they should have only 40 or 30 per cent upon it, the remaining 50 or 60 pef cent might, I think, in case of any alarm, or pressing need, b6 considered nearly nominal ; some, no doubt, might bring for- ward their quota, but many, from inability or fear, would be prevented. Still, however, prudence might limit their issuej or however limited their real capital j it would require the isisue of the £100fiOO to pay the expense*. Supposing any of these circumstanced, imagine a run upon one of the Banksj either from private pique, or the jealousy and opposite intierests of other Banks, it will be difficult to understand what method of calculation, or finance, can render stable such fluctuating and precarious Establishments. • But what will the strenuous advocates of these Institutions say in defence of the folly or imprudence upon which these Banks are erected, and upon which the only security of the Stockholder depends ; upon the folly that could publish a statement of circumstances likely to endanger their property, or the imprudence that knowingly must do so. For however the Banks may advertise, even upon their own Notes, that they will only pay out of " the Joint funds of the Association^'* end no other, I maintain, that their liabiliti/ is inevitable^ and it must be in the knowledge oi'cvcrj^ well read Barrister tliat such a limit is impossible. 8oufce*j le appli- oase of ts alone, ig to the ic.H, and e pap«r ; million^ 1 on new tst&blish^ favorable whole of »y should or 60 per need, b6 arinff for- would be leir issuej t the issue run upon ; jealousy iiilicult to an render is. istitutions tiich these rity of the publish a property, r however otes, that ociation^"* \ahk^ and rister that i2l I l^iicbirtercd^ they ftre nothing but ft t*ublic Sioik Coini ^ ^any-, trading like any other firm, and, conr^fciucntly, liahWtO | every risk, in common with the lowest trader •, the property of j every individual Stock-holder subject to the last shilling lor i the engagements of the Bank, and his person to imprisonnu^Vt, ' Upon the suspension of specie payment. Such a candid and plain statement may o'cc'asion some alarm to those who have innocently lent their names, and mny as innocently fall victims to it. No one v/ill rpujstion the tquity of the case, but it is the law of the Realm, and it should be known. However well founded these observations may be, and cot^V* tesy will acquit me of intentionally misrepresenting, yet the very nature of their promise to pay may lead to an extent of litigation little to be suspected, and diflTicult to bi? guarded ftganist. Upon any embarrassment or insolvency occurring^ the answer would be — the Funds of the AFsociiUion are ex* hausted, artd we promised to pay out of no other : our liability is therefore discharged, we have nothing more to Ho with the Bank. We have faithfully discharged our tru(1 in the f evciitu, It was in a inn- liberal- )und the great de- ng to the by which ijrived of ueir com- pence, as ; from the iierchanta came for- d but for ts of that recuri'en- parties to insider if, rade, they stance, in rity ; and isy credu- ianger of id Bank- these cir- sufficient- [718 is an or allay Mississipi were pro- moted by many as sanguine in their fliith — .nul 'heir failure df!<«)latt'd Knglund, France, and (iermany, with poverty nnd wretchedness. Those bubbles burs't, oppuleut ^uujilies were, in an instant, reduced to begj^ary, every class felt, in some degree, their mournful ellt?cts, aud were plunged in the ubysd ufruin. With such examples belbre our eyes, and the corro- boration of many of the same nature in America, will it b*! wondered if the present Establishments afford .iter for serious contemplation and alarm. Accustomed tospcculation in individuals, caution is suspended, and every Association that will promise an increase of fortune will be congratidated with omens of partial approbation. Against the tide of these prevailing yet destructive associa? tions, tome influence is necessary which the pen may point out, but cannot command. In vain may genius deplore tht results that may be foreseen, and the powers of declamation return impotent and exhausted, the concurrence of opinion may silence the orator — conviction be opiated by interest — and even party spirit be lulled in security, or turned from itspoint to retain unanimity for other measures. If the comprehensive minds of Mr. Fox and Mr. Bur'.e, in their India Bill, could see sufficient to direct an enquiry in the House of Commons upon the aflairs of the East India Company, with how much more justice may Legislative in- terference be exerted in this country. Party zeal betraye<| them into an indiscretion, that even th? persuasive eloquence of their appeal could not combat. They advocated oppressive and unconstitutional measures against chartered rights, pur- chased and sanctioned by Parliament, where the property of the Stockholuers could not be proved to be in any danger. With regard to the Banks in this country, unprejudiced reason can dittw no p^.rallel. It therefore only remains fqii' some impartial member of the present Parliament to do his duty. The general interests and safety of the public, demand this sacrifice of private feeling. The House ought to order a Committee of Inspectors, or An- diiors of their Accounts; or enjoin, brijond future altercation^ the resjjomibititjf of the Director and Stockholders to ail the '^■ii4,<,i* wji; fw^fmmmmimimftitwm. i i! i4 4ns(aireniefifs of the Banks^. Either of these methods woul'Ui .iifive jin lionourable guarantee to all the transactions, and the j>rospcct of firm ana periuanetu security This aMention tlie. i,i;vj)i)r*ance of the subject demands , and it i- to b.e hoped, ijonie indi'pendcnt member will be found to promote these plans, or to divisc others, for >he security of the countr;;f, To pui.rit out the defects of any undertaking, is so easy, tha; ?i.dlcule is most justly attached to endeavours directed to ngi Other end ; but to promote enquiries solely for the public good, incautious zeal may be allowed to plead for indulgence^, bt tolerated if not encouraged. To attempt the reformatio.^ of an evil, by the substitution of a solid good, ought not to provoke criticism, or awaken censure. Against perils so con- spicuous, my dcsigi) is not to create feg,j", but to propose an gn.lidote. Tq reracdy every evU, and to ensuxe lasting l?enefi.t and fu-ccess to these Provinces, nothing now remains, but for tht^ Government to establish a National Bank — the profits to be only locally applied, in removing obstructed navigation, for^ warding new settloinents, internal improvement, and civil polity. Thus thi;» country might be benefited, and the m,other (jountry^ in KK'^\t^ be relieved of some of hejc burthea. Tq digest so impoi'tajit a plari, woul4, require mu,ch tim« ^nd thought, as well as greater talents than the \yriter can ^oa^t; or could vanity Suggest that he were equal to it, there ^i;e njany weighty reasons tor his declining it. An attempt to settle an affair of such national concern, would, in any private pprson, bje too invidious a task, and might expose him, to much (jensure. A plan of this, sort must be the joint product of 3omc of the ablest head^, whose characters might give such authority, and whose power, such sanction to, what they pro- posed, as to abfi^h prejudice, silence envy, and disarm ridicule. The fnture Historian of this Colony would say, " The suc-» Qess.^f it was entirely owing to the zealous endeavours of Here,, my Lo(d, is a blank ! The name of tha^ Governor who, shall fill it up, will be more memorable in future times thqiOi that of Moecenas. His be the honor ; let the Colony jeap the benefit ! His grave will have a living monumenjt, i." ,vJ '/■■''%'.':.: /I- ■-()