From William Seton1
[New York] 22d Jny 1792
My dear sir
Trusting that Mr King2 would communicate to you all that has passed between him & me on the subject of coallittion, the New Bankers—& US Bank Paper &ca, I did not intrude on your time by a repetition. Your kind favor of the 18. I recd last night. I had no doubt you would condemn the numerous carrying ons here in the Strongest terms. The folly & madness that rages at present is a disgrace to us. There is no say where it will end—but it is the strongest proof that could be given, how necessary & usefull a coallition between the Bank of the U S. & this Institution would be in the plan proposed. It is the only thing that can destroy this combination of Speculators. Be assured this Bank will never listen to a Coallition with these madmen. They have aimed too deep a strike at our existence to be forgot or forgiven; for had not the rapidity with which they wanted to carry on their plan defeated their own intentions there is no saying what the immediate consequences might have been to us—for in less than two hours we were called upon for upwards of 500 000 Dollars. Low3 would not permit them taking entirely Specie, of course they took paper of every Kind and the largest proportion was that of the United States Bank. Their operations being delayed by the over eagerness of every body, as they brought the paper back & wished us to receive it again as a Deposit—self preservation immediately pointed out the imprudence of our allowing these men to increase the balance of their accounts by our ⟨receiving⟩ it, which at any moment they might demand from us in actual Specie. We were therefore obligd to refuse it—not out of any evill intention to that Institution or with a design to affect its Operations you may believe. You will observe that the ⟨funds of all⟩ the large discounts drawn from their Men at Philadelphia, have been ⟨received⟩ by us in the Bank paper—from which & the liberal discounts drawn for them here they had accumulated such large ballances (no doubt with a view to affect what they are now carrying on) that had they all drawn together they might have ruined us at once. Our refusing to take the paper (tho we have still about 100,000 Dollars in hand) has raised a great clamour but I trust you will view the maneuver in a proper light & approve of it. Thus situated there are two or three points, upon which I must request your friendly opinion & advice—for rest assured that our Directors & myself have nothing ever at heart than to pursue such a line of conduct as shall be perfectly agreeable to you. The Collector of the Customs,4 will no doubt tender to us his payments in National Bank Notes—the purchasers of the last Treasury Bills on Amsterdam which become payable the beginning of augt. will probably do the same & refuse to pay if we do not receive them—how are we to act in such case—for the operation will be thus, our receipts are carried to the credit of the Treasurer, he draws in favor of Mr Kean5 or Mr Francis6—his checks are passed to their credit—they again draw to individuals, who in consequence have a right to demand Specie from us & (from the existing opperations) will probably do it. The consequence is that our whole Specie is drained from us in payment not of our own circulating paper but for the paper of the Bank of the U S.—& upon the Establishment of the Bank here, it is more than probable, that the Bank will draw upon us for the amount recd for them & that to constitute their Specie Capital, they will not receive their own Notes from us in payment. It is true we can send them to Phia. & then demand the Specie but how unpleasant would that be—in short we are surrounded with difficulties, & with the best intentions in the world shall probably fall short of our wishes.
Pray My Dear sir excuse this lengthy detail, & rest assured of the high respect & esteem of
Your ever obliged ob H Sert
AL, Hamilton Papers, Library of Congress.
2. Rufus King, United States Senator from New York.
3. Nicholas Low, a director of the Bank of New York.
4. John Lamb, collector of the customs at New York City.
5. John Kean, cashier of the Bank of the United States.
6. Tench Francis, cashier of the Bank of North America.