BANKS. 



to contract, to be liable to an interest of 

 12 per cent, per ann.>.<tt 'urmg the sus- 

 pension. A bonus of 1,500,000 dollars 

 to be paid to the government forthe char- 

 ter, which is declared to be exclusive. 



In pursuance of the provisions of the 

 act incorporating the bank, the books 

 were opened by the commissioners ap- 

 pointed for the purpose, at the principal 

 city or town of each of the states, on the 

 first of July, 1816. The result was, a de- 

 ficiency of subscriptions to the amount of 

 3,044,800 dollars, which, upon the re- 

 opening of the books at Philadelphia, on 

 the 26th day of August following, was 

 readily supplied. The first election for 

 directors is to take place at Philadelphia, 

 the seat of the bank, on the 28th day of 

 October, and it is expected that the bank 

 will go into operation prior to the first of 

 January, 1817. 



All the banks in the United States, ex- 

 cept those of the New England States, 

 suspendedspecie payments in the months 

 of August or September, 1814, and have 

 not yet (Sept. 1816,) resumed them, al- 

 though it is probable that such an ar- 

 rangement will be effected on or before 

 the 1st of July, 1817. 



BANK of England, was projected by 

 Mr. W. Paterson, a merchant, who, in 

 conjunction with others, arranged the 

 establishment, for which, with some diffi- 

 culty, they obtained the sanction of par- 

 liament. The charter was executed July 

 27, 1694, and was granted for the term of 

 twelve years, the corporation being then 

 determinable on a year's notice. The ori- 

 ginal capital subscribed was 1,200,000/. 

 which they lent to government at 8 per 

 cent, interest, with an allowance of 40QOZ. 

 per ann.fortheirexpens.es of management. 



In less than two years from its esta- 

 blishment the company was involved in 

 much difficulty, from the bad state of the 

 silver coin, and the great discount to 

 which all public securities had fallen ; 

 the impossibility of getting a sufficient 

 supply of cash during the re-coinage re- 

 duced them to the necessity of paying 

 their notes by small instalments, and of 

 issuing bonds bearing interest, in ex- 

 change for their cash notes. These dif- 

 ficulties, however, were overcome by pru- 

 dent management, and the responsibility 

 and reputation of the bank became fully 

 established. The term of the charter 

 was, in 1706, extended to five years be- 

 yond the original period, in consideration 

 of the company having undertaken to cir- 

 culate for government exchequer bills to 

 the amount oH, 500,0007. and it has since 



VOL. II. 



bi en further extended at different times, 

 viz. 



In 1709 to 1st of August 1732 



1713 1742 



1742 1764 



1763 1786 



IfSl 1812 



1800 ' 1833 



On all these occasions the company 

 have either paid a considerable sum, or 

 advanced a greater amount by wuy of 

 loan to government, as a consideration 

 for the renewal of their exclusive privi- 

 leges, and for the advantages they derive 

 form acting as the agents for government 

 in all money transactions of any impor- 

 tance. Their chief privilege consists in 

 the prohibition of all other companies or 

 partnerships of more than six persons, 

 from issuing bills or notes payable on 

 demand, or for any time less than six 

 months. 



The total permanent debt due from go- 

 vernment to the bankisll,686,800 bear- 

 ing 3 per cent, interest ; but the capital 

 stock of the company is 11,642.400?. on 

 which they pay a dividend of 10 per cent, 

 per ann. to the proprietors 



The notes of the bank of England are 

 the representative of money in all the 

 commercial transactions of London and its 

 vicinity, and from the vast magnitude of 

 the payments in which they are employed, 

 the total amount in circulation, which, till 

 within a few years was never made pub- 

 lic, was generally thought to be much 

 greater that it has since appeared to have 

 been. The total amount of bank notes in 

 circulation on the 25th of February, 1787, 

 was 8,688,570Z. which, on the 25th of Fe- 

 bruary, 1793, had increased to 11,451, ISO/. 

 Soon after this period the temporary an- 

 nual advances which the bank had long 

 been accustomed to make to government 

 were increased; while an advance in the 

 price of gold, in consequence of the great 

 exportation of coin and bullion to Germany 

 and Ireland, greatly reduced the quantity 

 in the hands of the bank, and consequent- 

 ly rendered it impracticable to maintain 

 the same amount of notes in circulation. 

 An alarm of invasion, in the beginning of 

 the year 1797, greatly increased the de- 

 mands on the bank for cash, and it was 

 deemed necessary for the government to 

 interfere and authorise a suspension of pay- 

 ment in cash for bank notes, for a limited 

 period: the continuance of the suspension 

 was at first renewed annually, and after- 

 wards till the return of peace. In order 

 to supply a substitute for coin for making 

 small payments, the bank issued notes ef 

 R 



