to oliver wolcott - Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 10 [1774]
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The Works of Alexander Hamilton, ed. Henry Cabot Lodge (Federal Edition) (New York: G.P. Putnam’s Sons, 1904). In 12 vols. Vol. 10.
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to oliver wolcott
Dec. 21, 1796.
Dear Sir:
I did not understand by your letter of the 17th of November whether you meant or not to authorize the immediate commencement of the sale of stock. If you think this measure will become indispensable, it may be well to anticipate the execution; though, indeed, sales of stock are at this juncture nearly impracticable. Yet I imagine it will be agreeable to the bank to have permission to anticipate.
A very prudent letter has lately been written by the president of the Bank of the United States to the Office of Discount here, among other things advising a reduction of the balance due from the Bank of New York to 100,000 dollars. This letter, which in my opinion leaves, as it ought to do, to the directors of the office here, discretion to execute the idea with due regard to circumstances, has, however, been construed by them in too peremptory a light; and accordingly they have drawn from the Bank of New York pretty rapidly 150,000 dollars, which begets an apprehension that subsequent calls may be equally rapid, and, exciting fear and jealousy, is likely to produce too sudden a retrenchment of the business of the Bank of New York. And as the office, being confined, as they suppose, to discounting twice their capital, cannot, by increased accommodations, fill the void, there is danger of stagnating and convulsing the business of the city so as to give a shock to credit. The directors here are sensible of the danger, but several of them take the intimation from Philadelphia in too strict a sense, and cannot resolve to alleviate the apprehensions of the Bank of New York.
Though the Bank of New York has reduced and is reducing its discounts, there are circumstances of the moment which continue to incline the balance in favor of the office, but it is easy to see, taking in the payments of the government in February, that there will be a natural change, and consequently it is every way imprudent to force them.
If the last loan of the Bank of New York to government had no other use than that which you hint, this still was very important. And it is interesting all round that a disposition should exist to repeat similar accommodations. But you easily see how cautious and disaffected spirits are armed against it when they can say, “We told you that you would embarrass yourself by your loan to government,” and in truth if this had not been made the Bank of New York would now stand on high ground.
Pray interpose with Mr. Willing to obtain an explanatory letter leaving more clearly the time and manner of accomplishing the reduction of the present balance to their discretion.
I will say nothing more of an anticipated payment, but if this were practicable to the extent of 50,000 or 100,000 dollars it would be consolatory to the directors and leave the residue more to your convenience.
Don’t derive from this letter any source of alarm. Every thing is sound with both banks here. I know the state of both. But there is danger that fear and jealousy in the directors of the Bank of New York may produce evil which it is unnecessary to hazard. I wish to see your report on direct taxes.
I shall send you, the first opportunity, the volume of “Reports of Courts.”
P.S.—Mr. Caleb Brewster is a candidate for the office of first mate in the revenue cutter here. I remember he rendered very meritorious services in the war, and I am told has been bred a seaman. In these respects he has a good claim. His character otherwise is not known to me. But if it affords no objection, I think he will be an eligible man.
It is said Walker is to resign. In this case Jonathan Burrall wishes to succeed. There cannot, you know, be a more fit man, and he will be entirely acceptable here.
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