University of Virginia Library

TO EDMUND PENDLETON.[1]

Dear Sir,—Yesterday was opened, for the first
time, the Bank instituted under the auspices of Congress.

Its principal founder is Mr. Robert Morris,
who has certain prerogatives with respect to it in his
quality of Superintendent of Finance. It is pretty
analogous in its principles to the Bank of England.
The stock subscribed is 400,000 dollars. When the
scheme was originally proposed to Congress for their
approbation and patronage, a promise was given that
as soon as it was ripe for operation the company
should be incorporated. A few days ago the fulfilment
of the promise was claimed. The competency
of Congress to such an act had been called in question
in the first instance; but the subject not lying in so
near and distinct a view, the objections did not prevail.
On the last occasion, the general opinion,
though with some exceptions, was, that the Confederation
gave no such power, and that the exercise of it
would not bear the test of a forensic disquisition, and
consequently would not avail the Institution. The
Bank, however, supposing that such a sanction from
Congress would at least give it a dignity and preeminence
in the public opinion, urged the engagement
of Congress; that on this engagement the subscriptions
had been made, and that a disappointment would
leave the subscribers free to withdraw their names.
These considerations were re-inforced by the Superintendent
of Finance, who relied on this Institution
as a great auxiliary to his department; and, in particular,
expected aid from it in a payment he is exerting
himself to make to the army. The immediate
interposition of Congress was rendered the more
essential, too, by the sudden adjournment of the
Assembly of this State, to whom the Bank might
have been referred for the desired incorporation,
which, it was the opinion' of many, would have given
them a sufficient legal existence in every State. You
will conceive the dilemma in which these circumstances
placed the members who felt on one side the
importance of the Institution, and on the other a want
of power, and an aversion to assume it. Something
like a middle way finally produced an acquiescing,
rather than an affirmative, vote. A charter of incorporation
was granted, with a recommendation to
the States to give it all the necessary validity within
their respective jurisdictions. As this is a tacit admission
of a defect of power, I hope it will be an
antidote against the poisonous tendency of precedents
of usurpation.

In the ordinance lately passed for regulating captures,
which I presume you have seen, a clause was
inserted exposing to capture all merchandizes produced
in Great Britain, if coming into these States,
and within three leagues of the coast, although the
property of a neutral nation. Congress have now
recommended to the States to subject them to seizure,
during the war, if found on land within their respective
limits. These measures had become necessary to
check an evil which was every day increasing, and
which both enabled and encouraged Great Britain to
persevere in the war, at the same time that it mortified
our ally with daily seeing the fruits of his generosity
to us remitted in payment to the rival of his nation
and the enemy of both.