7551

Philadelphia
May 2 1791

Gentlemen

I received your’s of the 6th —– with the bond as ——, which I
lodged in the office of the post master general. He is now at N. York,
but I expect to see him soon at that place, or this. Enclosed you have
a letter which Mr. F. Cabot left with me, and concerning the papers
contained in it I suppose he has written to you – he informed me he
had attened to the calculations of the principals and interest of your
activities in the office; and that the calculations then make were considerably
in your favour, making the interest amount to ore than you computed
it; otherwise I should have myself examined those calculations-I understood
by him also that the quarter’s interest could not be drawn; ???????
which he had omitted to write you; but that you will draw the months
interest on the first opportunity – as he could not continue in the
city long enough to get your accounting funds. I subscribed for you,
the Funded Certificates will be ready in a day or two, when I will take
them out, and bring them with me, or forward them to you, agreeable
to your request.

In answer to your inquires, gentlemen, as to the value of bank stock,
securities – I will give you the best information I have, which is but
limited – I believe the price of securities then have been pretty accurately
published in Finn’s paper, from time to the percents for some months
have varied but little from ?? the 3 percents and deferred from ?? –
I judge from what is in other papers and from what I occasionally hear
– it seems to be the better opinion, that the securities will continue
to appreciate further, from a general confidence in the citizens of
the country and foreigners on the abilities of it to pay the interest
and demand on the government, and disposition to do it –

The Dutch and other foreigners are buying into the funds of this country,
and as they are accustomed to view interest on a lower grade than we
are, I think on the whole, it is probable they will consider our securities
as good property purchased at a price some what higher than they sell
for at ???-

As to the securities of Massachusetts I am from a view of all the circumstances
that come within my knowledge ??generally to estimate the ?unopened?
part of her debt as good as the opened part-

As to bank stock your inquiry naturally involves two questions. 1st
will the shares be speedily taken up? And 2nd what will be the probable
future value of the stock – we have no data to reason from with certainty
– we can from certain general principles and circumstances only infer
probable conclusions – I might say these before you somewhat at large
or give you my opinion in a forewards – as the latter must be a minor
opinion of little consequence, I have preferred the former- by stating
the facts and principles on which I form an opinion you will have my
opinion with the reasons of it-

As to the first question it appears to me the share will soon be take
up – To effect this, three things only are, perhaps, requsisite- 1an
ability to furnish the stock – 2 an opinion amongst the monied men that
the shares will be good property – and 3rd an opinion that the shares
will soon be purchased and taken out of the market – ?? ability a stock
often millions of dollars may appear at first, not to be easily furnished;
but on reflection we shall find that little or no certain can be required
to furnish any part except the two millions to be deposited in gold
and silver by the private subscribers – ?? ?? ?? subscribe two millions
of dollars with one hand, and at the same time, borrow of the bank two
millions, with the other to be repaid in annual installments with interest
– this may be done with the greatest care, and no new funds are required
to affect this part of the establishment – as to the ? millions to be
furnished by individuals – 6 millions is in securities – these securites
are already, many of them, in the hands of men most likely to be subscribers
– The principal ?? to be made are such as may be necessary to raise
the two millions of dollars in ?? – This would not be a great sum, it
appears to me or beyond the abilities of monied men in this country
to raise in this time allowed were the subscriptions confined to them
– But it is a ?? opinion, as far as my information extends, that foreigners
will become subscribers to a considerable amount – I think this opinion
is well founded – tho, men in general are not naturally fond of ?? their
property in foreign countries.. Yet these may be sitrations in which
they may prefer it – perhaps some of these circumstances now exist –
Republics are, in general, when their governments have assumed formal
stability, deemed favourable to public audit and money operations; ??
then the monied men have more ?? influence; and the influence of property
while it acts unitedly and with moderation prevails – In ?? governments,
property is often silent and public audit especially abound while the
tyrant, the army, or the mob bare rule – ???? then mear policy, may,
sometimes, dictate the prosperity of supporting property and ??; but
a union of interests to that object will be wanting – the Unite States,
I believe, appear to many foreigners to be getting into their state
favourable to audit sec. our debt is small, our country growing, and
afford in their view, a field of ?? and activity – the contrary, perhaps,
is now true as to many Countries in Europe – the affairs of France are
in an uncertain situation – Great Britain has already a debt swelled
to an enormous amount – and in Holland, from ?? we are, probably, to
respect most property to be transferred to this county or ?? in our
funds or banks, a very considerable degree of dissatisfaction prevails
with the most wealthy men, with the ?? change of government then; and
it seems to be pretty ?? that the trade and money operations of that
country are on the decline – it is said here that the Dutch merchants
? especially have already made considerable preparations for subscribing
– – as to the opinion that the share will be good property, it appears
to me, so far as I can ?? it, to be generals; and this must have its
affect to promote the subscriptions whether will or ill founded – from
these circumstances it will be very natural for men to conclude the
share will be soon be bought up and, therefore, all who propose to be
subscribers with Boston their subscriptions

With regard to the second question – what will be the probable future
value of this bank stock.. – ? this though of much the most importance,
it is much the most difficult to form an opinion – the value of all
property must depend especially on the security it ??, and the annual
profit it affords – the shares in this bank, I think, must be secure
property – notes and money deposited in the bank must in a common course
of things, be secure and safe – the management of this common stock,
I think must be good; because it must ever be for the interest of the
stockholder to see that it is so – the only difficulty of any consequence
is in forming an opinion – I have heard none ?? ?? than 6% annual profit,
clear of expenses, and none more than 15% – my own opinion brings me
much nearer the first than the last – there may be more or less economy
in the management, which may occasion some little uncertainty – but
the principle thing in ascertaining the profits is the rising ?? on
the quantity of bank notes the bank will be able to ??? – and in forming
an opinion as to this, I say the credit of the bank out of the question;
presuming it will be good and will ?? for supporting a ?? sum in notes
equal to the stock deposited; beyond which it will have no power to
?? its notes – – But there is a principle in this case of importance,
which in a small bank would hardly be worth of noting – it is a principle
which reports the Just quantity of ? medium a country can use – the
good management of the public ??, and a general union in favor of money
negotiations among other things, probably, will give life and activity
to business in this Country, and consequently make room for an increase
medium of trade – But this medium must ? this and ? other country, have
it’s natural boundaries, and the evil of too much or too little money
must infallibly find its’ own ?? in time; while gold and silver shall
retain their present power and habit of finding when and where they
are most and least wanted, and of changing plan accordingly – Some suppose
the bank will be able to circulate the whole ten million; Some not more
than four or five millions at present; hence the different calculations
of profits – it is not easy to say with precision what is a sufficient
?? medium for then states – before the war it was computed at ? millions
of dollars I think the better opinion now is that 12 million is wanted
to increase it much beyond this, if this be adequate, must produce depreciation
and correspondent high prices, which would soon be ? in our commerce
with other countries; the evil would be felt; the cause known or inquired
into; and a remedy to be applied found necessary – this may be all something
– or part something and part paper but a considerable proportion of
the former is ?? necessary; because ?? have only a local and limited
circulation, and not acrue the purposes of foreign commerce – that ?
will be much ? while it can be found in this country pretty certain
– the people in general must have it in small payments – In a country
as extensive as this many of the people, far removed from the commercial
towns, will ever prefer gold and silver; and from ?? experience some
districts in paper will remain for some time – what part of this twelve
millions can consist of bank notes is uncertain – but to suppose one
half, 6 millions in bank notes, seems to me to be going quite far enough;
and I believe as far or further than any country has done for those
bank notes must be in addition to public negotiable securities, bills
and private negotiable notes and other negotiable papers that enter
largely into all the transactions of trade of this 6 millions which
I ?? appears to me to be a large sum in bank notes for this Country
– the banks of Boston, New York, Philadelphia and Baltimore – must furnish
a considerable part to put into circulation 10 or even 7 or 6 millions
of dollars of the bank notes of this one bank of the United States in
addition to the notes of the other banks, I think would be an evil –
this 10 millions named in the law is the highest sum; and I suppose
contemplates a great ?? increase of the wrath of this country in the
20 years; and also that all the other banks may be swallowed up in this
one – but if this bank can circulate 5 millions of dollars, the ? must
be good property and afford and annual income of more than 6% – this
I should suppose, even in this country, will be generally considered
as a good profit on all that property which men can take from their
quick stock, and ? by in security as many circumstances may recommend
– If the circulation of bank notes are limited as before ? and on this
principle mention to a certain sum then deposits in the banks only sufficient
to support that sum are required, and all ? there beyond that sufficiency
are unnecessary and ? – hence quantity to multiply banks and deposits
in them will be ?; and the remedy will be found in uniting them or in
? the property pledges to a state of sufficiency mainly to support a
sufficient quantity of bank notes

With
sentiments of ?? ??

I am gentlemen your obedient servant reguards N. Dane

Mrs. Brown and Thorndike P.S.

I’ll thank you to send the ? to Mrs. Dane – my compliments to Mrs. Brown
and to Mrs. Thorndike

NB. On ? further how much ? ? in France England ? ? ? doubt whether
we have not always computed the quantity of ? necessary for the Untied
State much too low.