To Oliver Wolcott, Junior
[New York, December 21, 1796]
I did not understand by your letter of the 17th. of November whether you meant or not to authorise the immediate commencement of the sale of Stock.1 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 U States2 to the Office of Discount here, among other things, advising a reduction of the ballance due from the Bank of NYork to 100000 Dollars.3 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 150000 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 & convulsing the business of the City so as to give a shock to Credit. The Direction here are sensible of the danger, but several of them take the intimation from Philadelphia in too strict a sense—& cannot resolve to alleviate the apprehensions of the Bank of New York.
Though this Bank of NY has reduced and is reducing its discounts, there are circumstances of the moment which continue to incline the ballance in favour 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,4 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 & disaffected spirits are armed against it when they can say “We told you that you would embarrass yourself by your loan to Government” & 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 & manner of accomplishing the Reduction of the present Ballance to their discretion.
I will say nothing more of any anticipated payment—but if this were practicable to the extent of 50 or 100000 Dollars it would be consolatory to the Directors & leave the residue more to your convenience.
Dont 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.5
I shall send you the first opportunity the volume of Reports of Comrs.6
PS 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 War7 & I am told has been bred a seamen. 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.
Ol Wolcot Junr Esq
ALS, Connecticut Historical Society, Hartford.
1. Although Wolcott wrote to H on November 17, 1796, his letter dealt with foreign affairs rather than banking matters. On the other hand, Wolcott did write to H concerning the Bank of New York on December 8, 1796.
2. Thomas Willing.
5. In the margin opposite this paragraph H wrote: “I wish to see your report on Direct taxes.” This report, which is dated December 14, 1796, 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, 414–41.
7. Brewster, an ensign in the Fourth New York Regiment at the outset of the American Revolution, was appointed a captain lieutenant in the Continental Artillery on June 23, 1780.
9. During the American Revolution, Burrall had been assistant to the paymaster general of the Continental Army, assistant paymaster general, and deputy paymaster general. From 1786 to 1789 he was commissioner for settling the accounts of the quartermaster and commissary general departments. In 1792 he became cashier of the New York Office of Discount and Deposit of the Bank of the United States.