To William Seton1
My Dear Sir
I have learnt with infinite pain the circumstance of a new Bank having started up in your City.3 Its effects cannot but be in every view pernicious. These extravagant sallies of speculation do injury to the Government and to the whole system of public Credit, by disgusting all sober Citizens and giving a wild air to every thing. It is impossible but that three great banks in one City4 must raise such a mass of artificial Credit, as must endanger every one of them & do harm in every view.
I sincerely hope That the Bank of New York will listen to no coalition with this newly engendered Monster.5 A better alliance, I am strongly persuaded, will be brought about for it, & the joint force of two solid institutions will without effort or violence remove the excrescence, which has just appeared, and which I consider as a dangerous tumour in your political and commercial œconomy.
I express myself in these strong terms to you confidentially; not that I have any objection to my opinion being known as to the nature & tendency of the thing.
Yrs. with real regard
Wm. Seton Esq
ALS, The Chase Manhattan Bank Money Museum, New York City
1. Seton was cashier of the Bank of New York.
2. H mistakenly dated this letter “1791.”
3. H is referring to the “Million Bank,” the first of three new banks which were proposed in New York City during one week in January, 1792. On January 16, proposals for the “Million Bank” were published, and during the same day more than twenty thousand shares, or ten times the value of the contemplated capital, were subscribed. On January 17, The [New York] Daily Advertiser carried the notice of a second bank project, the “State Bank,” and by the end of the week still another bank, the “Merchants Bank of New York,” was proposed. On Saturday, January 21, the promoters of the three banks agreed on a consolidation (Davis, Essays description begins Joseph Stancliffe Davis, Essays in the Earlier History of American Corporations (“Harvard Economic Studies,” XVI [Cambridge, 1917]). description ends , I, 283; II, 83–85).
Alexander Macomb, a close associate of William Duer, was an early promoter of the “Million Bank” together with Brockholst Livingston and Melancton Smith, who were both supporters of George Clinton in the 1792 New York gubernatorial election. The chief promoters of the “State Bank” were Walter Livingston and Richard Platt, who were also connected with William Duer in speculation. Isaac Clason and Jacob Hallet, two New York City merchants, were the promoters of the “Merchants Bank” (Davis, Essays description begins Joseph Stancliffe Davis, Essays in the Earlier History of American Corporations (“Harvard Economic Studies,” XVI [Cambridge, 1917]). description ends , II, 83–85).
A petition for incorporation from the “State Bank” was received by the Assembly on January 20, 1792. On January 23 a similar petition from the promoters of the “Million Bank” was read in the Assembly, and on February 2 a petition was presented for incorporation of the combined projects. On February 4, 1792, Nathaniel Laurence of Hempstead, Long Island, reported on the petitions and brought in a bill, “An Act to incorporate a State Bank” (New York Assembly Journal, 1792 description begins Journal of the Assembly of the State of New York. Fifteenth Session (New York, 1792). description ends , 31–32, 46, 49). The bill did not pass the Assembly.
4. The “three great banks in one City” were the proposed “Million Bank,” the Bank of New York, and the New York branch of the Bank of the United States. The last, which had been authorized in November, 1791, did not open until April 2, 1792.
5. Section VII of the plan of the “Million Bank” provided: “That the directors of the Bank are hereby empowered to form and conclude on such terms as they may deem equitable and for the interest of this institution, any agreement, association, or coalition, for the space of nine months next ensuing, with the president, directors and company of the Bank of New-York; the stockholders hereby binding themselves to abide by the same” (The [New York] Daily Advertiser, January 17, 1792).