To Alexander Hamilton from Oliver Wolcott Junior, [February 1804]
From Oliver Wolcott Junior1
New York February 1804
My Dear Sir.
By Letters lately recd. from Albany, by Gentlemen interested in the Merchants Bank, we are informed, that a meeting of political characters connected with the Legislature, has been held, and that it has been resolved at all events to suppress this Company.2 This violent decision was altogether unexpected, as from prior intelligence, it appeared that several influential characters of the ruling party had expressed opinions in favour of an act of incorporation. The report here is, that since Chancellor Lansing declined a nomination,3 serious apprehensions have been entertained of the Success of Colo. Burrs party,4 unless the Federalists can by some means be divided, and that this division is expected to be effected, by complying with the prayer of a Memorial for our suppression which has been signed by a number of respectable men, chiefly connected with the other Banks in this city.5
That a Memorial of some kind has been forwarded is certain. Some time since at the request of a number of our Board, I made inquiry of D. Ludlow6 Esqr. in respect to the fact and he admitted it; but declined shewing me the Copy. All that we know is, that it is substantially like that which appeared in Cheetham’s paper,7 though it is presumed that some of the most offensive passages were omitted. There is no doubt, that most of the Directors of the three Banks, have petitioned not only that a charter may be refused, but that our Bank may be restrained from transacting business in future. It is said, that Mr. Murray, Mr. Schermerhorn, Mr. Glover, Genl Stevens, & Mr. Townsend of the Branch Bank8—an equal number of the Directors of the Bank of New York and Mr. Coles & Mr. Fairly9 of the Manhattan Company have refused to lend their names to this instrument. These exceptions however, cannot compensate the injury which has been done to my feeling from the information, that men of such standing in society as Mr. Ray,10 Mr. Le Roy11 and Mr Lenox,12 Mr. Buchannan13 &c &c. have placed their names to a paper, representing an association of which I happen to be a conspicuous member as dangerous to the community and a violation of the rights of Property. A few years since, I should not have been easily persuaded that such an imputation upon my conduct would ever have recd. the sanction of such characters; blunted as my sensibility is, by several disappointments and new views of human nature, during a few of the last years, I am not yet prepared to meet with patience an accusation the most unreasonable & unjust that could possibly be preferred against me.
There is one fact however, that the Politicians in Albany, appear to have taken for granted in which they are totally mistaken; no diversion from the federal party in favour of Judge Lewis,14 can possibly be made by adopting violent measures against the Merchants Bank. Some gentlemen who signed the adversary petition, seriously regret the step they have taken, and reflecting men of all Parties, are impressed with a decided conviction that the Bank cannot be suppressed without producing incalculable mischief and disorder in the city. Indeed so decided is the opinion, that an attack on this Institution, would promote Colo. Burrs views, that surmises have not unfrequently been made that his partizans, might secretly stimulate violent measures, with a view to this consequence. I know of no fact, which can justify the slightest suspicion of this nature, but the suggestion proves, the course which the public passions would take, and it is an ascertained fact, that a great proportion of the active spirits, of almost every description of men, & especially among the Federalists, would be brought into action with a degree of energy of which there has been no recent example. Indeed the circumstances will justify vigour, for after knowing, that the Leaders of the present party, and among others Judge Lewis himself, have publickly expressed themselves in favour of the Bank; its distruction, with the view of promoting his election, by conciliating the support of a few Directors of rival Banks, would be such an outrage upon Justice, as the Community would not, and ought not to tolerate.
I am inclined to believe, that when the state of public opinion here is known at Albany, and when it is seen, that the Memorial in our favour, has been signed by about One thousand Merchants & Traders comprizing the great Body of those in active business of all political denominations, that the decision of which we have heard, will be rescinded. Hitherto we have pursued a conduct strictly neutral and conciliatory: We shall not deviate from this system at present, nor at any future time without urgent motives; if however, our rights & property are disposed of, to promote an election, we mean to render the bargain as unprofitable as possible.
In case the attack which has been threatened should be persisted in, it is proposed to apply to the Legislature to be heard by Council, in which case the Board wish your assistance. The agents at Albany will apply to you on this subject, and I sincerely hope, that your aid will not be refused. In many respects, and with reference to more Interests than are immediately affected by the question in issue, would a public discussion by you, be useful.
Reports from Washington announce serious and increasing divisions among the ruling Party: and here the Clintonians, are said to be endeavouring to encourage the Federalists to offer a Candidate of their own Party for the office of Governor. If the design was any other than to promote the election of Judge Lewis, the suggestion would be worthy of Notice; but to make use of the name of a respectable man, to exhibit the inferiority of the Federalists, and indirectly to oppose Colo Burr, will not I presume be thought proper. If the Clintonians as they say is the case, prefer a Federalist to Colo. Burr, and are apprehensive of his success, in consequence of divisions among themselves, let them publickly renounce their pretensions & then I presume, their preference can ⟨be⟩ realised.
I remain Dear Sir, truly & affectionately yours.
Oliv: Wolcott
Alexander Hamilton Esqr.
ALS, Connecticut Historical Society, Hartford.
1. This letter, which Wolcott wrote in his capacity as president of the Merchants’ Bank, concerns his and his fellow-directors’ efforts to secure a charter for that bank from the New York legislature. See “Articles of Association of the Merchants’ Bank,” April 7, 1803.
As soon as the bank’s articles of association had been printed in the NewYork Evening Post on April 11, 1803, the bank became an issue between New York Federalists and Republicans. In this connection it should be kept in mind that the Merchants’ Bank was essentially a Federalist institution, and that as such it was in a position to threaten the interests of the Manhattan Bank, which was dominated by Republican financial and political leaders (see the introductory note to Philip Schuyler to H, January 31, 1799). In addition, the Republicans were understandably disturbed by the fact that the Merchants’ Bank was permitted to perform banking operations without first being authorized to do so by the state legislature. An article in the [New York] American Citizen, a Republican newspaper edited by James Cheetham, reads: “A similar association was never before palmed upon the community. With a power to issue notes to any extent, the projectors take care that they shall not be liable for any abuse of trust.… we will only say that the greatest injustice may be committed if such associations be legal. With one share a person may continue director. What interest can such a director feel in the welfare of the institution or of the community? … What right had the directors to more shares than the other parties to the association? What right had they to choose themselves directors? … The whole of the transaction is one of ignorance and folly …” ([New York] American Citizen, April 19, 1803; see also American Citizen, April 16, 1803). Editorials in the New-York Evening Post defended the Merchants’ Bank and charged that the Republicans through the Manhattan Bank were attempting to secure a monopoly on banking in the city (New-York Evening Post, April 16, 18, 1803).
When in the first months of 1804 the Merchants’ Bank sought to obtain a charter from the legislature, the struggle was resumed in Albany with the Federalists and Republicans using much the same arguments that had appeared in the city’s partisan press in 1803 (Philip G. Hubert, Jr., The Merchants’ National Bank of the City of New York [New York, 1903], 52–54).
Opponents and supporters of the bank submitted several petitions to the Assembly in February and March, 1804, all of which were referred to a select committee appointed on February 24 consisting of one member of the Assembly from each county. On February 24 a memorial of Daniel Ludlow and others from New York City was presented to the Assembly opposing the charter, and the next day a petition by Willet Seaman, signed by six hundred and fourteen supporters of the bank, was also submitted (Journal of the Assembly of the State of New-York. At Their Twenty-seventh Session, Begun and Held at the City of Albany, the Thirty-first Day of January, 1804 [Albany: Printed by John Barber, Printer to the State, n.d.], 103, 106, 113, 114, 127, 207, 214). On March 14, 1804, the select committee submitted a report recommending that the Merchants’ Bank not be granted a charter of incorporation (D, New York Assembly Miscellaneous Documents, VI, 95 [New York State Library, Albany]).
“An Act to restrain unincorporated banking associations,” which passed the Assembly on March 24 and the Senate on March 31, became law on April 11, 1804. According to its provisions, no person or association unauthorized by law was permitted to perform banking operations with the exception of “the association in the city of Albany, known by the name of the Mercantile Company, nor the association in the city of New-York, known by the name of the Merchants’ Bank, until the first Tuesday in May one thousand eight hundred and five” (New York Laws, 27th Sess., Ch. CXVII). This provision represented a compromise between Republicans and Federalists in the legislature, for the Mercantile Company of Albany was dominated by Republicans, and, like the Merchants’ Bank, it had applied to the Assembly for an act of incorporation in February, 1804 (Journal of the Assembly. 27th Sess., 67).
Despite continued opposition, the Merchants’ Bank did obtain a charter at the 1805 session of the state legislature (“An Act to incorporate the stockholders of the Merchants’ Bank, in the city of New-York” [New York Laws, Ch. XLIII, March 26, 1805]).
2. The New-York Evening Post, February 27, 1804, carried the following item: “Accounts received by this day’s mail from Albany, state, that on Thursday evening a Legislative caucus was held, in which a hostile proceeding towards the Merchants’ Bank … was determined on.… The new line of conduct which the Clintonian faction have adopted … arises, it is understood, from a belief that they can create a division in the federal party at the coming election by urging a suppression of the Merchant’s Bank, & that more federalists will support them in consequence of this measure than if they suffered that institution to remain unmolested. The petition from the Directors of the three other banks, it is said was signed by several federal gentlemen whose influence they believe to be very great.”
3. See “Speech at a Meeting of Federalists in Albany,” February 10, 1804, note 1; H to Robert G. Harper, February 19, 1804, note 8.
5. See Journal of the Assembly. 27th Sess., 103.
6. Daniel Ludlow, a New York City merchant, was the first president of the Bank of the Manhattan Company.
7. James Cheetham, a Republican journalist, edited the [New York] American Citizen. On February 21, 1804, an article “By the Editor” entitled “Remarks on the Merchants’ Bank, Respectfully submitted to the Legislature of the State of New-York” appeared in the American Citizen. The article was continued in subsequent issues (American Citizen, March 2, 7, 1804).
8. John Murray, Peter Schermerhorn, John J. Glover, Ebenezer Stevens, and John Townsend were directors of the New York branch of the Bank of the United States.
9. John B. Coles and James Fairlie were New York City merchants.
10. Cornelius Ray was president of the New York branch of the Bank of the United States.
11. Herman LeRoy was a director of the Bank of New York.
12. Robert Lenox was a director of the New York branch of the Bank of the United States.
13. Thomas Buchanan was a director of the New York branch of the Bank of the United States.