To John Kean1
[Philadelphia, March 28, 1792]
I request that you will not draw out from the Bank of N America any further sum without a previous communication to me.2
Cashier of Bank of U States
ALS, Harvard University Library.
2. This letter concerns relations between the Bank of the United States and the state banks. Stuart Bruchey, in a definitive article on this subject, has written: “Thus in the period prior to the opening of the Bank of the United States and its first four branches Hamilton authorized the collection of duties in the notes of the Bank of North America, the Bank of New York, the Bank of Massachusetts, and the Bank of Providence.
“With the Bank of the United States and those branches functioning in the major commercial cities in the spring of 1792 it became possible for the Treasury to implement Section 10 of the act incorporating the Bank, which stipulated that ‘the bills or notes of the said corporation, originally made payable, or which shall become payable on demand, in gold and silver coin, shall be receivable in all payments to the United States.’ But Hamilton’s initial response to the opening of the parent bank was merely to place its notes on an equal footing with those of the Bank of North America, the other major institution in Philadelphia, directing on January 2, 1792, that the former ‘be received and exchanged in like manner.’ At a conference later that month with the president and directors of the parent bank, however, Hamilton suggested that it would ‘probably be found mutually convenient’ to both government and the Bank ‘to carry on through you the negotiations concerning the public Revenues.’ Accordingly, on February 21, he issued another circular to the collectors of the customs in which he explained that ‘in pursuance of arrangements with the Bank of the United States, I have to desire, that after the expiration of a month from the time of the receipt of this letter, you will discontinue the execution of my former instructions concerning the receipt, and exchange for specie, of the Cash Notes and Post Notes of the Banks of North-America and New York.’
“That same month Hamilton wrote the cashier of the Bank of New York: ‘You will understand that all the money you may receive for bills or otherwise, on account of the U States, subsequent to the 31st of January last shall be received from you in bills of the Bank of the United States And that no order shall issue to derange this engagement.’ And on March 10 the Gazette of the United States announced it was informed that the secretary of the Treasury had directed all the collectors of revenue ‘to receive no other notes but those of the Bank of the United States.’ However, it will be observed that Hamilton’s directive of February 21 was to take effect a month later, and it is perhaps for this reason that he appears to have delayed sending it out. For on March 30, in a letter to the president of the Bank of New York, he indicates that the circular will be dispatched on that date, while the acknowledgement of the receipt of the circular by the collector at Providence indicates that it was not mailed before May 10. Hamilton’s apparently repeated postponements of the effective date of the new regime must certainly have eased the necessary readjustment on the part of the state banks. And as we shall see, the notes of one state bank—those of the Bank of New York—continued to be receivable for duties in New York City, although probably not elsewhere, until April, 1793, apparent evidence to the contrary notwithstanding.” (Bruchey, “Alexander Hamilton and the State Banks, 1789 to 1795,” The William and Mary Quarterly, 3d. ser., XXVII [July, 1970], 361–63.)
See “Treasury Department Circular to the Collectors of the Customs, January 2, February 21, 1792 (PAH description begins Harold C. Syrett, ed., The Papers of Alexander Hamilton (New York and London, 1961– ). description ends , X, 501–02; XI, 42–43); H to William Seton, February 10, 1792 (PAH description begins Harold C. Syrett, ed., The Papers of Alexander Hamilton (New York and London, 1961– ). description ends , XI, 27–28); H to Gulian Verplanck, March 30, 1792 (PAH description begins Harold C. Syrett, ed., The Papers of Alexander Hamilton (New York and London, 1961– ). description ends , XI, 211–12); Jeremiah Olney to H, June 5, 1792 (PAH description begins Harold C. Syrett, ed., The Papers of Alexander Hamilton (New York and London, 1961– ). description ends , XI, 489).