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Virginia Delegates to Benjamin Harrison, 8 January 1782

Virginia Delegates to Benjamin Harrison

RC (Virginia State Library). Written by Edmund Randolph. Docketed: “Lre from Delegates in Congress Dated Jany 8th. 1782[.] Inclosing Mr D Murrays papers[,] Also facts and reasons respecting the incorporation of the National Bank.”

Philadelphia Jany. 8. 1782.

Sir

Your excellency’s favor of the 28th. Ulto, not having acknowledged the receipt of our despatches by Capt. Irish, we shall repeat them, unless the next post should announce his arrival.1

We cannot but lament the distressing and degrading situation, in which we are placed, from the scantiness and uncertainty of our supplies, in which our own private credit can avail us nothing, and prices are immoderate and ruinous. We beg the attention of the executive to this point, important to ourselves, and perhaps important to our country.2

The inclosures (No 1. & 2) were received from a Mr. Murray.3 He has painted his services to Virginia at the Illinois, in strong terms, and his sufferings on her account in stronger. We have therefore undertaken to transmit to your board his state of both; requesting, that some answer may be given to his application.

Being disposed to advance, on every proper occasion, the views of our ally, and to demonstrate to Great Britain, how practicable it is to renounce her manufactures and produce, we rendered every aid in our power to the resolution, which the president has sent on, recommending more effectual provision against the introduction of British merchandizes. As these considerations were the grounds of the resolution, we cannot doubt, that our legislature will execute the recommendation.4 It will be remembered, that the late ordinance, respecting captures, which has been forwarded to the judges of the court of the Admiralty thro’ your excellency, relates to this species of commodities, when found on water only.5

The superintendant of finance is instructed to transmit to the several states copies of the act, incorporating the national bank. He probably will be explicit on the benefits to be expected from such an institution. To him we shall consign this part of the subject.6

But some scruples having been entertained as to the authority of congress to grant a charter of incorporation, we cannot forbear to mention the predicament, in which this body stood.

When the establishment of a bank was proposed to congress on the 26th. day of May last, its utility was immediately seen. They accordingly approved the plan, and promised to support it in the most effectual manner. Among other things, they stipulated to pass an act of incorporation; altho’ objections were suggested against such an engagement. After a vote to this effect, subscriptions were made upon the expectation of a charter from congress, the president and directors chosen, and we were required to fulfil our contract. The same doubts upon congressional power were again urged; but nothing decisive was done, until a committee, appointed to confer with the bank, reported the result of the conference. They informed congress that they had communicated to the bank the difficulties, which occurred in granting a charter; but that they were answered, that the promise of a preceding congress was binding on a subsequent one; that the subscribers would be free to withdraw their subscriptions, unless a charter should pass from congress, and that tedious and expensive arrangements had been made for commencing the operations of the bank. The financier added, that a delay in these operations would injure him in his attempt towards a payment to the army. Pressed as they were by these representations, congress did incorporate the bank; some of those, who voted in the affirmative thinking themselves obliged by the engagement in may, others contending for a constitutional power in these cases, and others assenting to it from absolute necessity. The resolution subjoined to the act will therefore, we hope, be complied with by the several legislatures.7

We have the honor, Sir, to be with great respect yr. excellency’s mo. ob. servts.

Edm: Randolph

J. Madison Jr.

Jos: Jones

1See Papers of Madison description begins William T. Hutchinson, William M. E. Rachal, et al., eds., The Papers of James Madison (4 vols. to date; Chicago, 1962——). description ends , III, 309, n. 1. Benjamin Harrison’s letter of 28 December 1781 has not been found. For Harrison’s receipt of “the packet by Captain [Nathaniel] Irish,” see Harrison to Virginia Delegates, 11 January 1782.

2On the day after this letter was written, through the good offices of Thomas Pleasants, Jr., the agent of David Ross, JM borrowed £100, Pennsylvania currency, from Haym Salomon, a Philadelphia broker (Harrison to Virginia Delegates, 9 February; and Expense Account as a Delegate in Congress, 20 March 1782). See also Papers of Madison description begins William T. Hutchinson, William M. E. Rachal, et al., eds., The Papers of James Madison (4 vols. to date; Chicago, 1962——). description ends , III, 327.

3Daniel Murray. See Papers of Madison description begins William T. Hutchinson, William M. E. Rachal, et al., eds., The Papers of James Madison (4 vols. to date; Chicago, 1962——). description ends , III, 342–44.

4See Papers of Madison description begins William T. Hutchinson, William M. E. Rachal, et al., eds., The Papers of James Madison (4 vols. to date; Chicago, 1962——). description ends , III, 338; 339, nn. By “An act for seizure and condemnation of British goods found on land,” passed on 2 July 1782, the Virginia General Assembly complied with the request of Congress but stipulated that “the operation of this act shall be, and is hereby suspended until the rest of the United States shall have passed similar laws on this subject” (Minute Book, House of Delegates, May 1782 description begins Minute Book, House of Delegates, May 1782, MS in Virginia State Library. description ends , p. 86; Hening, Statutes description begins William Waller Hening, ed., The Statutes at Large; Being a Collection of All the Laws of Virginia, from the First Session of the Legislature, in the Year 1619 (13 vols.; Richmond and Philadelphia, 1819–23). description ends , XI, 101–3; Harrison to Virginia Delegates, 18 May and 6 July 1782).

5See Papers of Madison description begins William T. Hutchinson, William M. E. Rachal, et al., eds., The Papers of James Madison (4 vols. to date; Chicago, 1962——). description ends , III, 217–19; 235–41; 338; 339, n. 2. The editors have been unable to determine when Governor Harrison received a copy of the “late ordinance” for transmission to Benjamin Waller, Richard Cary, and William Roscow Wilson Curle, judges of the Court of Admiralty of Virginia, sitting at Williamsburg. Immediately after its enactment on 4 December, this ordinance had been issued as a broadside by David C. Claypoole of Philadelphia (JCC description begins Worthington Chauncey Ford et al., eds., Journals of the Continental Congress, 1774–1789 (34 vols.; Washington, 1904–37). description ends , XXI, 1200). On the date of the present letter, Congress adopted “an Ordinance for amending the Ordinance, ascertaining what captures on water shall be lawful” (JCC description begins Worthington Chauncey Ford et al., eds., Journals of the Continental Congress, 1774–1789 (34 vols.; Washington, 1904–37). description ends , XXII, 10–11). As soon as this ordinance was printed by Claypoole, it was dispatched to the executive of each state (JCC description begins Worthington Chauncey Ford et al., eds., Journals of the Continental Congress, 1774–1789 (34 vols.; Washington, 1904–37). description ends , XXIII, 885; Pennsylvania Archives description begins Samuel Hazard et al., eds., Pennsylvania Archives (9 ser.; 138 vols.; Philadelphia and Harrisburg, 1852–1949). description ends , 1st ser., IX, 479–80). The measure is in the Virginia Gazette description begins Virginia Gazette, or, the American Advertiser (Richmond, James Hayes, 1781–86). description ends , 16 February 1782.

6In his circular letter of 8 January 1782, addressed to the executive of each state and enclosing a copy of the ordinance of 31 December 1781, incorporating the “Subscribers to the Bank of North America,” Robert Morris enthusiastically pointed out the vital services which the institution, if “conducted on the principles of equity, justice, prudence and economy,” could render to the United States, each state, and to “all the Traders of every State” (Pennsylvania Archives description begins Samuel Hazard et al., eds., Pennsylvania Archives (9 ser.; 138 vols.; Philadelphia and Harrisburg, 1852–1949). description ends , 1st ser., IX, 477–78). For the ordinance of incorporation, see JCC description begins Worthington Chauncey Ford et al., eds., Journals of the Continental Congress, 1774–1789 (34 vols.; Washington, 1904–37). description ends , XXI, 1187–90.

7Robert Morris’ plan for a bank provided that “the subscribers shall be incorporated under the name of the President, Directors and Company of the Bank of North America” (JCC description begins Worthington Chauncey Ford et al., eds., Journals of the Continental Congress, 1774–1789 (34 vols.; Washington, 1904–37). description ends , XX, 546 n.). Thus the expected source of the charter of incorporation was not designated, but Morris implied that it would be Congress, since his plan allotted to the superintendent of finance the prime role of overseeing the proposed institution.

Laid before Congress on 21 May 1781, the plan was referred three days later to the committee, with John Witherspoon (N.J.) as its chairman, which had been appointed over two weeks earlier “to devise further ways and means to defray the expences of the ensuing campaign and what farther measures may be adopted for the better regulation of the public finances” (JCC description begins Worthington Chauncey Ford et al., eds., Journals of the Continental Congress, 1774–1789 (34 vols.; Washington, 1904–37). description ends , XX, 487, 519, 530–31). On 26 May the committee’s report, comprising four resolutions in Morris’ handwriting, was submitted to Congress. All four resolutions were apparently agreed to on that day, although only the first was adopted by a tallied vote. This first resolution, after stating that Congress approved the plan of the bank and pledged to “promote and support the same by such ways and means, from time to time, as may appear necessary for the institution and consistent with the public good,” continued by affirming “That the subscribers to the said bank shall be incorporated agreeably to the principles and terms of the plan, under the name of The President, Directors and company of the bank of North-America, so soon as the subscription shall be filled, the directors and president chosen, and application for that purpose made to Congress by the president and directors elected.” The final clause of this resolution obviously removed whatever doubt was warranted by the language of Morris’ plan that Congress would be asked to issue the charter of incorporation. At the instance of Thomas Smith (Pa.), each delegate’s vote on this resolution was recorded in the journal. Twenty delegates approved the resolution and only Smith, James Lovell, Artemas Ward (Mass.), and JM, unsupported by his three colleagues from Virginia, opposed it (JCC description begins Worthington Chauncey Ford et al., eds., Journals of the Continental Congress, 1774–1789 (34 vols.; Washington, 1904–37). description ends , XX, 546–48).

Clearly, the premise of the resolution was that Congress had the authority to issue the charter, even though the vote did not pledge Congress to do more than receive a petition asking for a charter. JM’s disagreement with the premise almost certainly accounts for his adverse vote. In other words, he recognized that considerations of the general welfare made a national bank an urgent necessity, but he believed on constitutional grounds that it should be chartered by a state rather than by Congress. A decade later in the House of Representatives he would stress the same point in arguing against the proposal of Alexander Hamilton to have Congress charter a national bank. The following sentences, allegedly summarizing what JM said in the course of his speech of 8 February 1791 on the subject, must be read in the context of this position to avoid the impression that he had opposed the Bank of North America itself. “The Bank of North America he had opposed, as he considered the institution as a violation of the Confederation. The State of Massachusetts, he recollected, voted with him on that occasion” (Annals of the Congress of the United States, 1st Cong., 3d sess., col. 1959).

On the same day that the present dispatch was written, JM further clarified his position in a letter to Edmund Pendleton (q.v.). In this he pointed out that, when adopting the ordinance of incorporation on 31 December 1781, Congress deferred to the constitutional scruples of many delegates by hinging the success of the institution upon the willingness of the legislature of each state to grant the Bank of North America a monopoly of the banking business within that state for the duration of the war and to enact statutes providing for the condign punishment of counterfeiters of the notes of the Bank and of its officers or employees who were guilty of embezzlement or other fraud (JCC description begins Worthington Chauncey Ford et al., eds., Journals of the Continental Congress, 1774–1789 (34 vols.; Washington, 1904–37). description ends , XX, 545–48; XXI, 1190). Congress further guarded the sovereignty of each state by inserting near the close of the ordinance of incorporation an amendment by Abraham Clark (N.J.) reading, “Provided, always, that nothing herein before contained, shall be construed to authorize the said corporation, to exercise any powers in any of the United States, repugnant to the laws or constitution of such State” (JCC description begins Worthington Chauncey Ford et al., eds., Journals of the Continental Congress, 1774–1789 (34 vols.; Washington, 1904–37). description ends , XXI, 1189; NA: PCC, No. 59, III, 309–11). Congress also, at the instance of Edmund Randolph, resolved, “That it be recommended to the legislature of each State, to pass such laws as they may judge necessary, for giving the foregoing ordinance its full operation” (ibid., No. 59, III, 315; JCC description begins Worthington Chauncey Ford et al., eds., Journals of the Continental Congress, 1774–1789 (34 vols.; Washington, 1904–37). description ends , XXI, 1190). Whether these safeguards of state sovereignty led JM to vote for the ordinance of incorporation is not known, because the votes of the members of Congress were not entered in the journal. In all likelihood JM was among those who, as he remarked in his letter of this day to Pendleton, cast “an acquiessing rather than an affirmative vote.” By this subtle distinction JM probably meant that many delegates, in spite of their conviction that they were supporting an act in violation of the Articles of Confederation, voted to have Congress charter the bank because of the extreme and immediate need for it at a time when the Pennsylvania General Assembly, which constitutionally should have been the incorporator, was not in session. Although the analogy is not exact, JM’s argument of “necessity” suggests his position in the 1790’s, when he upheld the exercise of “implied powers,” provided that it was a requisite rather than merely a possible means of making effective a field of authority clearly delegated to Congress by the Constitution of the United States.

Before Morris’ circular letter (n. 6, above) reached Governor Harrison, the Virginia General Assembly had adjourned. At the opening of the session of May 1782, the governor forwarded to the speaker of the House of Delegates, without recommendation, Morris’ letter and a copy of “the resolution of Congress establishing a public bank” (McIlwaine, Official Letters description begins H. R. McIlwaine, ed., Official Letters of the Governors of the State of Virginia (3 vols.; Richmond, 1926–29). description ends , III, 214). These documents were laid before the House on 15 May, the first day enough members assembled to make a quorum. There being no known extant journal of the House, such consideration as was given to the subject must be traced in the manuscript minutes kept by the clerk, whose entries are frequently too cryptic to be understood. The bank proposition was discussed in committee of the whole on 16 and 17 May and on the latter day assigned to a committee comprising twelve of the ablest delegates with Mann Page, Jr., as chairman (Minute Book, House of Delegates, May 1782 description begins Minute Book, House of Delegates, May 1782, MS in Virginia State Library. description ends , pp. 44, 46, 48). Beyond that, evidence is negative, strongly suggesting that neither report nor recommendations ever reached the floor. Hening’s Statutes contains no law relating to the Bank of North America enacted by that session.

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