From Alexander Hamilton to Oliver Wolcott, Junior, [23 December 1796]
To Oliver Wolcott, Junior
[New York, December 23, 1796]
My Dear Sir
I wrote to you two days ago on the subject of obtaining an instruction from the Bank of the U States to the Direction of the Office here to prevent a speedy repetition of their call on the Bank of New York. This Bank has so large a proportion of its whole Capital in the power of the Office that if it be not tranquillized on the subject of demands from that quarter, it will be driven to such violent operations as cannot fail to convulse Credit & among other evils prevent the collection of the Revenues. The danger is urgent & a prompt explanation is essential.
The situation of the Bank of NYork is no doubt materially owing to the prolongation of the old & the new loan to Government.1 Its Capital is 900,000 Dollars—its discount 1600000. Here is certainly no imprudence.2
Many of the Merchants here are anxious for an accommodation for the duties similar to that which I upon certain trying occasions made.3 I know not what is possible on your part.
Yrs. truly
A Hamilton
O Wolcot Jun. Esq
ALS, Connecticut Historical Society, Hartford.
1. The “old” loan was one of two hundred thousand dollars which the Bank of New York made to the United States in 1794. See Wolcott to H, June 28, 1796; H to Wolcott, August 5, 1796, note 2.
For information on the “new” loan, which was for three hundred and twenty thousand dollars, see H to Wolcott, August 5, 1796; Wolcott to H, December 8, 1796, notes 2 and 5.
2. Section 9 of “An Act to Incorporate the Stockholders of the Bank of New-York,” which was passed March 21, 1791, reads in part: “That the total amount of the debts which the said corporation shall, at any time owe, whether by bond, bill, note, or other contract, over and above the monies then actually deposited in the bank, shall not exceed three times the sum of the capital stock subscribed, and actually paid into the bank …” (New York Laws, 14th Sess., Ch. XXXVII).
3. One such occasion was the spring of 1792. See H to William Seton, March 19, 1792.