To the President and Directors
of the Bank of Pennsylvania1
Treasury Department December 1st 1794
A plan for the Redemption of the debt of the United States on more comprehensive principles than have been hitherto adopted, may be expected to be shortly under the consideration of the House of Representatives.2 The practicability of such a plan may be materially connected with the answer that shall be given to the following Inquiry.
Would it be convenient to the Bank of Pennsylvania to make an annual loan of one hundred thousand Dollars for the term of five Years; that is to say a Loan of one hundred thousand Dollars for the term of one Year to be reimbursed and renewed annually for five Successive Years. The Interest to be five per Cent per Annum?
It will be readily understood that the Loan at no one time could exceed one hundred thousand Dollars.
In proposing the question under the shape of an annual Loan rather than of one to continue for the whole term of five Years, I am influenced by the opinion that Banks ought cautiously to go into the business of permanent Loans or Loans of any considerable duration.
It will be seen that I do not propose a Contract, but only ask an opinion of the present Directors how far it may comport with the ability, convenience and policy of Your Institution, to come in aid of the Government in the way suggested. It would not be expected that the loan for one year should be accompanied by an engagement to renew it another; for this would be equivalent to a stipulation for the whole term. A view of what would be probably convenient is all that is desired.
The object is one which affecting strongly the interest and wishes of the Community, cannot but make a correspondent impression on the dispositions of Your Board. A similar inquiry has been extended to other Banks.3
I request a Speedy reply.
With great consideration & esteem I have the honor to be Gentlemen Your Obedient Servant
Secy of the Treasy
The President & Directors of
the Bank of Pennsylvania.
LS, MS Division, New York Public Library.
1. John Barclay was president of the Bank of Pennsylvania.
2. On November 21, 1794, the House of Representatives “resolved itself into a Committee of the Whole House” and adopted five resolutions. The second of these resolutions reads: “Resolved, That it is the opinion of this committee that further provision ought to be made by law for the redemption of the public debt.” The House also “Ordered, That a committee be appointed to prepare and report a plan. pursuant to the second resolution, and that Mr. William Smith, Mr. [Fisher] Ames, Mr. [Thomas] Fitzsimons, Mr. [Gabriel] Duvall, and Mr. [John] Nicholas, be the said committee” (Journal of the House description begins Journal of the House of Representatives of the United States (Washington, 1826), I, II, III. description ends , II, 238). On December 15, 1794, “Mr. William Smith, from the committee appointed to prepare and report a plan for the redemption of the public debt, made a report” (Journal of the House description begins Journal of the House of Representatives of the United States (Washington, 1826), I, II, III. description ends , II, 266). The Smith committee’s report is printed in ASP description begins American State Papers, Documents, Legislative and Executive, of the Congress of the United States (Washington, 1832–1861). description ends , Finance, I, 317–19.
H also reported subsequently on the same subject. See “Report on a Plan for the Further Support of Public Credit,” January 16, 1795.