Founding America (Barnes & Noble Classics) - Jack N. Rakove [106]
I know the objections which may be raised to this plan—its tendency to discourage industry and the like; but necessity calls for it; we cannot proceed without [it], and less evils must give place to greater. It is besides practiced with success in other countries, and why not in this? It may be said, the examples cited are from nations under despotic governments and that the same would not be practicable with us; but I contend where the public good is evidently the object more may be effected in governments like ours than in any other. It has been a constant remark that free countries have ever paid the heaviest taxes. The obedience of a free people to general laws however hard they bear is ever more perfect than that of slaves to the arbitrary will of a prince. To this it may be added that Sweden was always a free government, and is so now in a great degree, notwithstanding the late revolution.
How far it may be practicable to erect a bank on the joint credit of the public and of individuals can only be certainly determined by the experiment; but it is of so much importance that the experiment ought to be fully tried. When I saw the subscriptions going on to the bank established for supplying the army, I was in hopes it was only the embryo of a more permanent and extensive establishment. But I have reason to believe I shall be disappointed. It does not seem to be at all conducted on the true principles of a bank. The directors of it are purchasing with their stock instead of bank notes as I expected; in consequence of which it must turn out to be a mere subscription of a particular sum of money for a particular purpose.
Paper credit never was long supported in any country, on a national scale, where it was not founded on the joint basis of public and private credit. An attempt to establish it on public credit alone in France under the auspices of Mr. Law27 had nearly ruined the kingdom; we have seen the effects of it in America, and every successive experiment proves the futility of the attempt. Our new money is depreciating almost as fast as the old, though it has in some states as real funds as paper money ever had. The reason is, that the monied men have not an immediate interest to uphold its credit. They may even in many ways find it their interest to undermine it. The only certain manner to obtain a permanent paper credit is to engage the monied interest immediately in it by making them contribute the whole or part of the stock and giving them the whole or part of the profits.
The invention of banks on the modern principle originated in Venice. There the public and a company of monied men are mutually concerned. The Bank of England unites public authority and faith with private credit; and hence we see what a vast fabric of paper credit is raised on a visionary basis. Had it not been for this, England would never have found sufficient funds to carry on her wars; but with the help of this she has done, and is doing wonders. The bank of Amsterdam is on a similar foundation.
And why can we not have an American bank? Are our monied men less enlightened to their own interest or less enterprising in the persuit? I believe the fault is in our government which does not exert itself to engage them in such a scheme. It is true, the individuals in America are not very rich, but this would not prevent their instituting a bank; it would only prevent its being done with such ample funds as in other countries. Have they not sufficient confidence in the government