Your very friendly & polite favor of the 7th Inst; was received—unsealed—a day or two ago in Richmond with sundry official letters. I beg, my dear Sir, that you will accept of my sincere thanks for the condescending attention which you have paid to my private concerns, and for your assurances of friendship.

The business & system of banks, being but new in this country, I have never thought much on the subject, and am therefore, not sufficiently informd, to say, whether a branch of the national bank would answer in Virginia, or not; but at your request, the following loose observations, are, with great deference communicated.

The trade of this State is carried on chiefly with foreign capital. Those engaged in it, hardly deserve the name of Merchants, being the factors, agents, and Shopkeepers of the Merchants, and Manufacturers of G Britain, and their business to dispose of the goods of that, for the produce of this Country, and remit it to the order of their principals; with whom, the profits of the trade, of course centre. And this commerce, is so divided, that it will be extremely difficult to find unanimity enough, to fix upon the place for establishing the bank. Richmond, Petersburg, Norfolk, & perhaps, Alexandria, may contend for this honor (Tho, at a meeting of the Merchants from the two first on the subject of moving this Office, it was admitted that Richmond shd be the place), and fixd as it must be, at one of these places, it would occasion such chagrin and disappointment to the others, that, if they did not approve, they would not co-operate in the measure. The trade of Petersburg, at present, exceeds that of Richmond—but both, are infinitely greater than that of Norfolk, the latter, being confined chiefly to the W. Indies—and tho’ to a stranger, or to yourself—Judging from what he sees—and you from the Collectors returns—it may appear greater, yet I know it to be otherwise; insomuch that, perhaps threefourths of the goods enterd at Norfolk, are imported by the Merchants of Petersburg, Richmond & other parts up the country; to whom Norfolk is only a convenient Interpot for sometimes discharging and loading Vessels. Certain Vessels are enter’d there because I am Collector here. The produce which swells the Returns of exports from Norfolk, are Shippd by Merchants in the Upper Districts. Lumber, & Naval Stores, are almost every thing it furnishes. So that, it may with great propriety be said, that those, who carry on the business of Norfolk, reside in the upper Country, as do those in Petersburg & Richmond, who carry on the business of this District. For these reasons, & also, from its exposed, and remote situation from the heart of the Country, it does not by any means appear to be the proper place, nor is it possible that any man can recommend it to you; if possessd of one grain of candor, or information. The last of these objections applies equally to Alexandria.

Tho’ the Trade of Petersburg, is at present greater than Richmond, and, infinitely more so than any in the State, I should nevertheless, give the preference to the latter; because its situation is more central and convenient for business. Being the seat of government, where the assembly always meet, where all public-Offices are kept, where the supreme courts are always held, it occasions a great and continual intercourse with all parts of the State. The number & wealth too of its inhabitants are greater, & it is increasing more rapidly, than any other place in the Country; and when the canal is completed, of which, there is now a flattering prospect,1 and a good navigation brought to the place, it will most unquestionably draw to it, a considerable part of that trade which now goes to Petersburg. And when the canal that is opening between the waters of Elizabeth river and N. Carolina is finishd,2 it will still lessen, if not ruin the trade of Petersburg.

Tho’ I have no doubt in my own mind as to the most proper place, for fixing the bank; yet, I have very great doubts of its answering in this State at present (for my convenience as a public Officer, I wish it). If the principal object is discount, I question much, whether it will defray its expences. For the reasons already given, there is no considerable mercantile, circulating Capital; and there are but few monied men in the Country: consequently, the deposits in Specie will be inconsiderable. And the Merchants, or those who carry on the trade, having no attachment to the country, no fixd, or permanent residence in it, or any visible property except their goods and debts, discount will be uncertain; and cannot with propriety be carried to any extent, with this description of people.

But an opinion—tho’ I conceive an erroneous one—has prevailed here, that the constitution of the Bank admitted of other deposits than specie. If so, Tobacco offers in this State, a very safe and good deposit. It is not perishable; at least, when of good quality, and properly put up, it will keep sound for years, and be improv’d by age. It is brought to public warehouses for Inspection, and there kept for a certain time free of Storage, and at the risk of the State. So that, the risk the bank would run by receiving it as a deposit, and giving notes for ⅔ds of its current specie value, with liberty to sell at 60 to 90 days, if not taken up, would be, their Notes returning upon them before that time, and in case the Tobacco should be destroyd, waiting untill repaid by the State. The first might be obviated by issuing their notes payable at 60 to 90 days after date—and the last, by an Insurance, by which, in case of loss they might recover of the underwriters, who would stand in the place of the bank, and obtain restitution from the State. The redemption of the Tobacco should be by specie only to be paid into the bank. The deposits in Tobacco would be considerable, and the bank Notes wd acquire such an extensive circulation, that numbers would be lost, and the circulation so slow, that vast advantages would result to the bank from the use of the Money.

It would facilitate, and greatly promote the circulation of their notes, if the bank could obtain an act of the Legislature here, for depositing the funds of the State in the bank, and making the taxes receivable in bank-notes. It would be farther necessary to give the bank power of proceeding in a summary manner in recovering payments of discounted bills. Upon the whole I think the Trade of this Country should agree upon the proper place for fixing the bank, should give assurance of their hearty union in its support, and at the same time that it should receive the countenance and protection of the State, before a branch is fixd here otherwise it might give rise to Such an opposition, as would defeat the end. And, in my humble opinion, the last essential, would be difficult to obtain unless some leading influential members of our legislature, should become Stockholders in the bank. One of the most able consel in this country, has already given it as his opinion, that a branch of the bank cannot be established in Virginia, if it demands, or receives an higher Interest than 5 ⅌ Cent. Besides, the operations of the government hath by no means been pleasing to the people of this country—on the contrary, the friends to it are daily decreasing. Some of the highest in rank, and ability among us, & who supported it in our convention, are now extremely dissatisfied, and loud in abusing its measures, while some others, of equal fame, only express their chagrine and disappointment in private to those, who joind them in wishing to see the government establishd.

Thus my dear Sir, have I given you my confidential opinion, agreeably to your request, and, with a freedom of remark & observation, unfetterd by restraint, or reserve.

The business of the Customs being but little in this District at this Season of the year, and having some things of importance to myself to attend to, in Winchester and Philadelphia, this summer; I propose leaving this for a few weeks, as soon as possible in the ensuing month, after my quarterly accounts are closed; by which time, I hope there will be but little money on hand, and there is no prospect of any business to render my attendance necessary. Besides, private business, which hath been neglected ever since my coming into Office, my constitution has been so much affected by the great application which I paid to the duties of my Office, and constant attendance at this unhealthy place for the first two years, that I find it absolutely necessary to spend some time in the upper country this summer.

It will be the middle of August perhaps before I reach Philadelphia, when I hope to find you so much at leisure, as to be able to attend to observations on the revenue laws, which I have long forborne to make, from a persuasion that, if every Collector had been as troublesome to you on that score as I have, it would have employd your whole time to have read our letters, and directed answers. So that, instead of feeling any surprise at not receiving answers to such parts of my letters as appeard to me to require immediate notice I have only wonderd how you got through the great load of business, which hath been thrown upon your shoulders.

I am   Dear Sir   with the sincerest Esteem & friendship   Yrs