740. BANKS, Sound Money.—
But, it will be asked, are we to have no banks? Are merchants
and others to be deprived of the resource
of short accommodations, found so convenient?
I answer, let us have banks; but
let them be such as are alone to be found in
any country on earth, except Great Britain.
There is not a bank of discount on the continent
of Europe (at least there was not one when I was there), which offers anything
but cash in exchange for discounted bills.
No one has a natural right to the trade of a
money lender, but he who has the money to
lend. Let those then among us, who have a
moneyed capital, and who prefer employing
it in loans rather than otherwise, set up
banks, and give cash or national bills for the
notes they discount. Perhaps, to encourage
them, a larger interest than is legal in the
other cases might be allowed them, on the
condition of their lending for short periods
only. It is from Great Britain we copy the
idea of giving paper in exchange for discounted
bills; and while we have derived
from that country some good principles of
government and legislation, we unfortunately
run into the most servile imitations of all her
practices, ruinous as they prove to her, and
with the gulf yawning before us into which
these very practices are precipitating her.—
To John W. Eppes. Washington ed. vi, 141.
Ford ed., ix, 394.
(M.
June. 1813)
