Alexandria gazette, commercial and political. [volume] (Alexandria [Va.]) 1812-1817, 1816-11-06
LETTERS
no THE BANK DIRECTORS,
LETTER ~.

LIZ 4 ESAe =
GEsTLxMEN,
Oapos.d to all ] have advanced, SO
far as Ihaye been able to catch, might
almost saw to conjecture the ground on
which YOU have predicated your opera
tions. there IS s. SORT of inde6nabie terror
prevailing Of the Bank Of the 1nlted
States, Of which the directors, it is pref
sumed. will gratuitously pursue wantonl
hostility against the old institutions. 1t
is 20 be ike Aaron's rod, and to swallow
up all the etherbanks
The hostility apprehended from theI
new Bank, is to display itself by making
a run uuon the others for specie, as soon
as payment Of it is resumed, and thus
reducing them to bankruptcy. And It rs
lin order to guard against this fatal issue
YOU have been reducing yonr discounts
so as to abridge your specie resPonslblll.
nv. If this be not the state of the case, 1
am vet to learn what ale the motives tor
the system pursued.
II isfreely admitted, thatif you were.
10y law, or in any other way, obliged to
resume specie payments simultaneously
with the commencement of the opera.
tons OF the new bank, you would be in
danger ofbeing who'll, drained;
and it would therefore be necessa' y, at
Iall events, come what might, previously
to reduce your di.couuts, your notes IN
circulation, and Of course your specie re-
sponsibilities, But as there is no such
icompulsien and as you may with SAFETY
Ito your customers, and with convenience
Ito yourselves, make that reduction to any
extent you please, when the new bank is
fairly launched, | can form no conception
Why you should make the attempt at pre-
|sent. 1t appears a course OF action as
completely without adequate cause, as
has ever occurred,
1t is strange, that while the idea Is,
so prevalent with many, that this bank
will nearly ruin all the rest, there are
numbers Of our citizens, who are deeply
with the idea, that it will not
dare to discount except on a very small
scale, not exceeding the amount OF Its
specie as all its notes will be employed
for the purpose Of drawing specie from
vaults. This idea / have heard from
those whose long experience in banking
and whose good sense, would have led to|
expect aluminous and correct view of
this subject.
Itdoes not often happen that on plain
point of general interest, such grsss err
rors prevail.
To sbew the utter fallacy Of the lat
ter opinion, | assume as undeniable-
/. That the object OF the subscribers
to the bank, and consequently of the di
rectors, is to make profit by their sub
|scriptions.
Q. That they will discount freely i'll
they can with safety.
And undertake to prove,
l. That unless they discount largely i
they will not only not make proht,bu will
fall short Of legal interest.
2. That they may discount very large
ly, with the most perfect safety.
S. That let them discount in whatever
form or mode they may, you lbe there
by enabled to reduce your discounts tot
whatever extent you may require.
First point 70 be prored.
The capital of the U. States Bank is toI
be s5,0oO,000 of dollars /, 100000 be
longing to the government, and $4,000
900 to individuals.
ct the thirty five millions, twenty eight
will be in government stock, and seven
in specie.
Let US investigate the operations Of
this bank for four wears, within which
time the bonus of 1900, 900 is to be
paid. The interest on 28,000,000.
for four years, at 6 per cent IS
s,7so,sooI
The bonus to co.
vernment, paya-
BILE within four
years 100000
Suppose six bank
ing houses 1000
Expense of engra-
wing, salaries,
TIC. for four
years 100000
$500, GOO
Which leaves balance Of net
income 4,2s0, O0Ol
This is but three per cent per annum
on the whole capital. To divide 6 per
cent per annum, therefore, they must,
in orderto make up the difference dis /
count at the mother bank, and the differ Il