A Discourse in Explanation of the Bank of Credit

From The Libertarian Labyrinth
Jump to: navigation, search

Text

A Discourse in Explanation of the Bank of Credit

Or

An Account of the Model Rules & Benefits of The Bank of Credit, Lumbard, and Exchange of Moneys Proposed to be Erected in Boston And managed by persons in Partnership, as other Merchantly Affayres.

Published by the Proposers.


Anno

1687.

Briefe considerations tending Demonstratively to evince the Necessity, Security, usefulnes & Advantage of The Bank of Credit Lumbard & Exchange of Moneys Proposed to be Erected at Boston in New-England. And, That, Bank-bills of Credit will not only answer the Ends of Gold and Silver money, but are Preferrable to both. Also, some Rules & Instructions to be attended by all such as shall desire the Assistance of this Bank &c Touching the way and manner of their proceedings, in order to their Receiving the Benefits thereby held forth. viz.

Some things Premised for Introduction touching Banks in Generall vizt

Money, whether Gold or Silver, is but a measure of the value of other things: yet hath, for a long Succession of Ages (especially in the civillized & trading part of the world) obteyned to be the usuall & best known means of Interchange.

This Measure & way of interchange was originally accasion'd by the experimented inconveniencies of Comon Barter by Comodities: In which way, unlesse both the parties dealing had like occasion reciprocally of each other's. the lesse necessitous over-reached the greater, by imposing ye Price of both: to his owne Advantage, and the others detriment, which was not equall.

The Inconveniencies of the way of Barter might have been much obviated, By a frequent setting a just & equall value of the Price of all coffiodities, by publique authority, [123] according as the plenty or scarceity of them should require, and the market had ruled: But, there being no such comon standard, Money hath obteyned & been admitted as the best ballance of Trade, both by wise & un-wise. But, whether the Mynes faile, or men have not been so foreseing and industrious to bring into most countreys a sufficiency wherewith to manage their increasing trades; Or, That Traders, for want of other retumes, have been necessitated, for Ballance of the Surcharge of goods Imported, To Remit the Coynes of some Countreys into others; Or, For other unknown causes, 't is now so hard to come by, for the carrying on of trade, to answer the vastness of men's attempts & aymes of increase in Merchandize, as that it is suspected to be insufficient in this age of the world: And that hath put divers persons & countreys upon contrivances, how to supply that deficiencie, by other Mediums: Some of which, have happily pitch'd upon That, of Banks, Lumbards & Exchange of Moneys by Bills: which have thriven with them.

The Two Former of these, vizt, Banks and Lumbards have been sett on foot in divers Countreys, by their respective publique undertakings, and have succeded to their abundant inriching. Perhaps others have thought, That would have occasioned the over-Bowing of moneys amongst them: But, as the later have been mistaken, Or, their Surfeit of Trade hath obscured the visibillity of it, and protracted the consid. erations of Redressing, till it hath proved allmost Fatall, even to the giving a Sett, or declension to their Aspyrings therin; So, the Former have really experimented, that their Banks have been, as well amongst themselves, as with other Countreys, of greater value than the Species of Gold and Silver: and yet such places dreyne away the said species [124] from the other that Court it, as the only reall good thing for a Countrey.

The Third, viz. That of Exchange of Moneys, hath been for the most part managed by the respective merchants of the same and other Countreys: who, in their particular dealings and correspondencies, have un-accountably controll'd it, to their great advalltage also; and vary it often, in each Annuall Revolution.

'T is not doubted but that all Three of these might be improved and accomodated to the publique advantage of any countrey, and of this in perticular [Commuting only the Fund of the First from (but) an Imaginary being or presence of the species of Gold and Silver moneys lodged in such Banks, (which this place hath not in such plenty as to deposit for such a purpose) into Reall and Substantiall Lands & goods of un-questionable title and value (which this Countrey hath) and thence, more aptly Terming the Bank (which in other places is, in Repute, A Bank of Moneys) [A Bank of Credit] and the Bills issued on these Funds [Bank Bills of Credit] especially if such an affaire be managed in Partnership, by private hands, persons of knowne integrity, prudence and estates: all which will become thereby lyable to answer the injury, damage or Losse to any, by their undertaking. And, It seemes most necessary that some thing of this nature be sett on foot, for the present supply of the great scarceity of money here, for carrying on the Ordinary comerce amongst Traders;· who, unlesse speedily releived by this medium, will, in all probabillity, be suddainly exposed to breaking and utter Ruine. But,

At present, we shall begin with, & principally discourse of the two first of these, vizt, The Bank of Credit, as it may be [125] rendred Susceptible of the second, vizt, The Lumbard conjunct: Accounting the One to be founded on Lands or Reall estates mortgaged; and the other on staple goods or personall estates Deposited: Such as any Countreys Products and Manufactures will by Art and Industry produce and furnish.

Here might be also discours'd A Lumbard for y4 Poore (by some called Mons pietatis) But That's fitter to be the handmayd of the other. For, 't will be too poore to incourage an undertaking by it selfe. Neither is there the same necessity therof as of the other in this Countrey at present. The paucity of the poore occasioning the use & imployment of all the hands we have, and calling for more, such are thereby provided for, who will betake themselves to industry, at such moderate wages as would enable them to live comfortably without exposing their imployers to like poverty with themselves. Besides, the other, viz, The Bank of Credit & Lumbard, when understood, and received by General! approbation, will render this, as also that of the Exchange of moneys, the more intelligible, & in due time as usefull.

These things Premised by way of Introduction, we shall now proceed to that which more iiiiediately relates to the Present Bank proposed to be Erected in this Countrey: which we define thus, viz.

A considerable number of persons, some of each Trade, calling.& condition (especially in the principall places of trading in this Countrey) agree voluntarily to Receive as ready moneys, of and from each other and any Psons in their ordinary dealings, Bank-bills of Credit, signed by severall persons of good Repute joyned together in a Partnership: [126]

Given forth on Lands of good title mortgaged; and staple un-perishable goods & merchandizes Deposited in fitting places to be appoynted by them for that purpose, To the value of about One halfe or Two thirds of such respective Mortgages & Deposits at the Rate of Fower pounds P cent P annum: which said Bills, in a kinde of Circulation, through their experimented usefullnes, become diffused by mutuall consent, passe from One hand to another, and so have (at least) equall advantages with the Current moneys of the Countrey attending them, to all who become satisfied to be of this Society or agreement, Be that shall deale with them.

For Instance.

A countrey Chapman hath Lands (suppose) worth to be sold for 400L: and being willing to inlarge his trade and dealings. as farr as his Estate will enable him, Or, having bought goods, for which he is indebted, and cannot otherwise pay for. He mortgages his Land in Bank for 200L, more or lesse; and therupon receiveth severall Bank Bills of Credit for 200\ &c, of severall values from 20' and so upwards, to answer his occasions.

With these Bills he buyes such goods as he pleases, or payes his debts for what he formerly bought of the wholesale shopkeeper. or Warehousekeeper in Boston, or other Towne or Townes of Trade that shall fall into this way of dealing: and having Bank bills to deliver for them (which are of better value by 405 in the lOOt. than moneys, with this Society, as is hereinafter evinced) he buyes much cheaper than he could upon his owne Credit, or with money in specie.

The Shop keeper goes to the merchant, who thus agrees, [127] and buyes of him other goods, with the same or like Bills, wherin he reaps the same advantage as he gave his chapman.

The Merchant buyes Bullocks. Hogs, Fish. Hops, Lumber, Pitch, Tarr, Rozin; Or any other of the Countreys Product or manufactures, of the Husbandman, Artificer, or maker of such manufactures.

The Husbandman, if a Farmer of Lands. Pays.his Rent, and purchases more young Cattell of his neighbor, for Breed or Fatting. Or,

If an Owner of Land, and hath not sufficient stock to improve it, he also mortgages his Land, & has Credit to furnish himselfe. Or,

If he hath stock sufficient, and perhaps more than his present Farme can mantayne, He hath his eye upon a neighboring Fanne that would be sold: He mortgages his owne Land in the Bank, and hath Credit to buye the other.

If then he want stock, He may also mortgage the Farme last purchased, and have Credit to enable him fully to improve & stock both: whereby he doubles his yearly advantages: and, if he can then content himselfe to live as frugally, and be as industrious as before, he may soone compasse to payoff his Debt. and Redeem his Land. Or,

He may continue the Credit he had, or take out more upon the Additional improvement: and thus increase his purchases and estate as long as such an help is afforded.

Another Instance.

The Like may be don for carrying on the Opening and working in any Mynes, Myneralls, or Quarreys of stone, Lead, Tynn, Iron, Copper &c. Thus, viz.

The Myne & Lands wherin the same is may be mortgaged, [128] as aforesayd, to supply the Owner therof with Credit, for paying his workmen, in any sum of 20s, or above.

As fast as any of these metalIs &c are wrought, fitt for sale if a Chapman be wanting, the metall may be brought into the Bank, and the Owner Receive Bank bills to the value of about two thirds therof, as aforesaid, to enable him to proceed on his works: and the metall lying in Bank is there readyer for a market than else where in his owne private house or warehouse, at very reasonable Rates for lying there: and may, with allowance of the Owner, be sold at such current Rates as he shall sett: and he become Creditor for so much to be discompted, or payd him. whensoever he shall call for it.

A Third Instance.

A Weaver of Cloth, Searge, or Linnen &c is imployed in any work house erected or to be erected, to carry on those respective manufactures: Also other Manufacturers and Artificers in Ropemaking, Cables. Rigging, Sayles, Ancours or any other, for the fishing trade, Merchants, or building of ships.

The Owner of such Work-house or materialls respectively consents to mortgage the same for 200l in Bank-bills, more or lesse, as the work shall require, and the value o~ the house. or materialls will admitt.

With these Bills The Workmaster or Overseer buyes wooll, worsted, yarne, dying stuffes, hemp, Flax, Iron, Timber, Lumber &c of the merchant, warehousekeeper or other seller: and finishes forty, sixty or a hundred peeces, &ct more or lesse, of any the said Comodities, which, when wrought up for a market, if he want a Chapman he brings [129] into the Bank warehouses, as aforesaid, or such, yards, Docks or other places as they shall appoynt: takes up new Credit upon them, & leaves them there to be sold at his owne Rates, as aforesayd. Or,

A considerable parcell of Wooll, Cotton, Flax, hemp, Oyle dying stuffes, or other goods for his use, are offer'd for sale: He may pay One third therof by his wrought-up goods unsold, and, bringing these into the Bank, may receive Credit for paying the other two thirds, which he may take out in parcells, as he brings in any New-wrought-up goods: Or hath occasion to use them for making up more. And the Bank-storehouses will be to him, and all other Manufacturers, as Blackwell hall in London to the Clothyers. To assist his sale of them with out his trouble; for, Thither will all merchants have incouragements to come, to seek supplyes for transportation, and finde goods allwayes ready.

Other Instances might be multiplyed. But, By these it appeares, That,

I. The Manufacturer &c loses no time in looking out a Chapman.

2. Is allways furnish'd with Credit to buy his materialls at ye best hand.

3. The Merchant never Trusts, nor Warehouse-keeper. Or if he do, the plenty of Bills expedits his Chapmans sales, and consequently his payments. Whereby,

4. He has incouragement & stock presently to look out for more, of the same or other usefull merchandizes.

5. Sends forth the said Metalls, Clothes, stuffes Lynnen &c, amongst other merchandizes of the Product of this Countrey, or Imported. [130]

6. Makes Returne of Bullion, moneys or other usefull goods, which are presently bought off with Bank bills. Or,

7. He may store them up in Bank-warehouses, and Receive present Credit wherewith to send out againe. And,

8. Thereby be inabled (at least) to double or trebble his yearly dealings, & receive proportionable advantages. This,

1. Increases & quickens Merchandizing and Trade.

2 Promotes shipping and Navigation. Which,

3. Increases the Kings duties, & consequently his Revenues.

4. Imployes the poore in the mynings & manufactures aforementioned.

5. Also, In that of Cordage, Sayles. Cables, Ancours &c for the fishing trade and navigation.

6. They get money by these imployments.

7. That enables them to buy up all necessaries for Clothing, victualls, paying debts, &c

8. This helps the consumption of, as well our own manufactures, as other imported goods and merchandizes; For, no man that hath wherewith to buy, will go naked, or be hungry &c.

9 This helps to civillize the Ruder Sort of people. & incourages others to follow their example in industry & civillity.

10 Thus, All sorts of persons become inabled to live handsomly, and out of Debt: and that prevents multiplicity of Lawsuites, charges, and troubles to the Government. But,

None of these Advantages may be expected out of the small pittance of Cash, that now is, ever was, or likely will be in this countrey, unlesse assisted in trade Be inriched by the help this Bank proposes. But, [131]

Obj. 1. Some perhaps will object, or say,

What do you tell me of Bank-bills & Credit? Unlesse you have moneys allwayes ready to give me in Exchange for Bank-bills when I ask it; I 'l never deale with the Bank; I understand Money: and what use & advantage is to be made of that. Will you not be bound to give me ready money for the Bank-bills I have, when I have occasion for Money?

Ans. 1. This Bank is not Proposed to be a Bank of moneys (wch is liable to un-expressible & un-foreseen hazards) but A Bank of Credit, to be given forth by Bills, to supply such as cannot get money (by reason of it's scarceity) with what so ever may be had for moneys. But,

2. If it be made appeare to you, that others who have money, will be willing to change your Bank-bills into those species of Gold & Silver, & thank you for offering them the occasion, (though the Bank do it not) you 'I have no cause so hastily to resolve against dealing with the Bank, &c. Especially if you may both be gayners by the Exchange. But,

3. If I ought you 500l to be payd in Silver, & should propose to pay you in Gold, at the intrinsique coyn'd value, which, if you part with againe, will yeild you five pounds profit, or more, would you then Refuse Gold? Quis nisi mentis inops, &c. sayes a Poet.

Obj. 2. How will you apply this to make it Credible? Thus,

Ans. Who ever hath any Payment to make in Bank (which, in all, probability if the Bank take effect will be every man that deales in above 20l at a time) will finde, That he must pay 40s more in every hundred pounds of ready moneys, than in Bank bills of Credit: which is about 5 pence benefit to the Exchanger in every 20s. [132]

Obj. 3. Then surely I may returne the Poets wonder upon the Bank.

Ans. Not at all. For they will not refuse money: But, Bank bills and Credit are so respectively adapted to answer the Two severall species of Gold and Silver moneys, as that, More than Gold is valued, by many men, above Silver, Proportionably will Bank bills be preferrable 'to either of them. For,

Q. Why is Gold Preferrable to Silver, so as that a person should give 1d or 2d in the pound exchange between them?

A. I. For ease of Compting &carriage.

2 For Safety in travelling or hoarding up.

3 For the Advantage that some make by the exchange betwixt them: which lyes on the side of the Gold, but rarely is above 20s in the hundred pounds.

Bank bills Farr exceed both, on all those Accounts. For,

(I) The only reading over of a Bank bill ascertaynes the sum or value conteyned in it: and, If many Bills be offer'd in payment of a considerable sum. Few persons that have occasion for many, but can easily adde or compt even sums, none conteyning lesse than 20s

(2) If a person be Rob'd of his Gold or Silver, whether it be upon the Road travelling; Or by thievs breaking open his house by day or night, when he is abroad or asleep: Or by Servants proving unfaythfull; Though he may possibly meet with the persons. earlyer or later. that took his money away; they may have spent it, or a considerable part of it; That's lost irrecoverably: and it will be hard for the Loser to prove what he findes, to be his· owne money: But if a mischance befall him in his Bills by any of those meanes, Or, by accidents of fire, water, wearing out, &c; He may have them [133] renewed; if he forthwith apply to the Bank-house, and make a voluntary Oath therof, expressing the number, value & date of each Bill lost, &c; and will secure the Bank against all after-demands for the same Bills. By which meanes (most probably) the thiefe will be discover'd: for, the Bank will presently make publication therof, in such manner, as, if other persons, to whose hands they s~all come, comply not voluntarily with the wrong-doer, to their owne prejudice, he will be soone detected and brought to condigne punishment. And, there can be no counterfeit of any bill given out, but the Bank can make out the truth of every man's bill, by it's counterpart remayning in their hands: So the difficulty of escape will deterre from the attempt.

(3) The Third perticular is proved in the answer to the second objection, viz. Bank bills will passe in the Bank at 40s more than money in IOOl. Wheras Gold is very rarely above 20· more than Silver. But, Besides, Money may not be transported without hazards; Partly by the penalties on the Transporter, by Law: Partly by Shippwrack, Piracy, &c. Bank-bills (with advices) may assist exchanges into England, &all other parts, when once this Bank shall have gotten into Reputation, allowing for the different intrinsique value of the severall current moneys in each respective place: as 100" Bank credit of Holland, will be accepted in England & bought up at I02L, sometimes I03L of English Coyne.

Obj. 4. If therfore upon the whole, any shall say, However, Give me money, Or I '1 not deale with you, I Love to Look on it sometimes: Gold is sayd to be good for the Eyes, &c. Ans. You may be assured, That if you shall choose rather to give 8L per centu P annu for money, than fower for Bank bills, That are 4os in the IOOL better; The Bank will be [134] easily perswaded to settle some way wherin they may safely accomodate you with that eye-salve, and can bring in moneys to them, if there be any in the Countrey, when they shall see cause to value them equall with Bills: which (yet) they will never attempt to the prejudice of so many as will be of a different mind from you: But, you are rather to be suspected to have moneys than to want it; and would put it out at those Rates of Interest, as heretofore have been done, to the Ruine or impoverishing of many Landed persons; for whose Releife this Bank is principally erected: who, finding the ease this Bank affords, will herafter know where to be accomodated, on better termes: and without danger of being worm'd out of their Lands & Estates: It being the Banks Interest to continue to give out their Credit, on the termes proposed, till men can Repay. But,

Obj. 5. We know not the nature & constitution of this Bank: Nor what's requisit for us to do in order to our being made partakers of the benefits & advantages proposed to such as shall voluntarily comply therewith. Nor, Do we see clearly our Security in so doing, nor upon what termes. Pray informe us of these things, so farr as we may be safely guided into the way, & unto the end of it. Also, In case this Bank should terminate, How we shall be dealt with all in the closing up of accompts, so as may be without damage, either to ye Bank or to those that shall so deale with it? We doubt not but you have as well consider'd the end as the Beginning. Though if it prove so usefull as is suggested, . we can see no cause why a thing of so great advantage, in so many cases as have been instanced, should procure any persons ill will or wearinesse of it: And we are also satisfied, That an affayre of this nature, wherin the persons [135] & estates of so many shall be involved, as it seemes probable there will be, can not suddainly be knock'd off, but with inconvenience.

Ans. We shall indeavor to give you satisfaction in each perticular, in the order layd down by you, as neare as may be. And,

First, As touching the Constitution of this Bank:
Take it Thus.

I. There are 21 persons of good and Generall Reputation for integrity prudence & estates, To whom the Trust and care of the management therof is proposed to be Committed, wherof Seaven of them viz, A. B. C. D. E. F. G. are conceved sufficient to appeare at the first entrance therupon; and untill by the coming on of busines it shall be judged necessary to settle the full or some greater number of them. These are all ingaged by Articles of Agreement & Covenants in Partnership to attend theron and be responsible for their doings, and These will sitt in some certayne place in Boston, to be herafter agreed upon, from day to day, as the businesse & occasions of the Bank shall require, to Receive all Proposalls from any persons touching their having such Credit therout as they shall desire upon their Estates of Lands houses or staple un-perishing goods or merchandizes, to such value as they shall judge the security proposed of either kinde will admitt: and for drawing up & perfecting such Bank-bills, mortgages, Bills of Sale and Defezances therof, as Lands or goods respectively shall require. which said Respective mortgages and Goods, when perfected & brought in shall be layd up and stored respectively in as safe and convenient Roomes and Warehouses, &c, as shall be without exception, To prevent damage of wether, Robbery, [136] Fire, water, or vermin of any kinde, whereby they may be impaired: And all under the Trust and custody of such number of the sayd Managers as no opportunity can be taken to impayre or lessen the security, unlesse all the partners should agree therin; which can not reasonably be imagined by any body that knowes them. Besides, There will be continuall watching on all such places, and it will be the Interest of all persons, any way concerned in the affayres of the Bank, to be carefull to prevent, and to give advertisement of any attempt made to the impayring or prejudiceing the Deposits in the Bank; for that their Livelyhoods and dependencies will lye in their preserving it in the greatest Repute, which upon the least violation will be utterly Lost, and the Bank fall to the ground.

2. These Managers aforesayd enter into and oblige themselves by Covenants and agreements to and with other persons called Assessors, (who were the Contrivers, Framers & Proposers of this affayre of the Bank: and of the Constitution, Rules & instructions to be observed in the management therof) for their diligence & faithfulnes in the discharge & execution of their respective Trusts, according to the sayd Constitution; and inviolably to observe the same, and all the Rules therof.

3. These Assessors have also, by the said Constitution, the oversight & Comptroll of the whole affayre, to see the same be so managed: And to that end, are dayly to inspect the management therof: and that the said Rules be duly observed on both parts, viz, as well on the part of the Bank, as of the persons dealing with them in every office, or branch of the Bank; that all things be done with justice and impartiallity between them. And in case of absence of the Managers, [137] may supply that defect, by their personall transacting the same things.

4. Each of the sayd Managers and partners are also to Deposit moneys, & other estates in the Bank as a stock or Fund: which will be a further security and obligation upon them for their upright dealing, for, thereby every of themselves, and the whole partnership become personally Interested and concerned to be carefull in every thing: and the whole society liable to answer the damages.

5. This undertaking was, in July 1686, Proposed to the then President & Councill: and by them Referd to the consideration of the Grand &Standing Committee, consisting of Divers Eminent and worthy persons, Merchants and others, who Reported, as their opinion, that the erecting, Constituting & setling of a Bank of Credit, Lumbard & Exchange of moneys as was Proposed, may be very useful] and conduceibIe, to the incourageing of Trade, Navigation, Manufactures, Planting & itnproving of Lands & Estates, Increasing his Majesties Revenues, Facilitating the Payment therof, and of other Debts; And removing the present greatest obstructions therunto in this and the neighboring territories & dominions of his Matie, &c. And therupon received their allowance and Approbation. As by the sayd Report, and Order of Councill therupon, bearing date the 27th day of . September 1686, Relation being therunto had for better certainty therof, it doth'& may more fully & at large appeare. And,

Thus you have notice of the Originall Nature and Constitution of this Bank. The way & manner of it; and the Security of such as shall deale with them in this way.[138]

Secondly, As touching that which is farther Requisit for those to do and observe who shall voluntarily desire to Deale with this Bank. And the Rules to be attended, that thereby they may be made partakers of the benefits & advantages suggested, in the Instances before given; Take it in those perticulars.

I. You must Resolve to come to the Bank with as just a minde not to injure them, as all men that consider this Constitution, and know the persons imployed in the management and ordering the affayres therof will believe you shall finde in them towards you, viz, Seek not to circumvent the Bank by bad titles of Lands or Estates: which you cannot but know. For, If you do, you'l be greatly injurious to them whose designe is to be so Carr from injuring you, as they will, by all lawfull wayes, according to the honest Rules and meaning of the Bank, study to profit you: And this is no other than not to be or do evill to them who are good to you, which the very morall heathen will avoyd.

2. It will be also Requisit That you Assist, & what in you Iyes Promote the Reputation of the Bank, & it's affayres & proceedings, in all lawfull wayes. For, 't is a Generall Good to your Countrey, as well as perticular to your selves.

3. These things Premised, by way of Caution, when you have occasion to use the Banks assistance, Bring such security of Lands or goods as you have to offer, and take what Credit can, by the Rules ·of the Bank, be afforded upon it. And when you have their Credit, use it in some honest calling, or other just and necessary occasion, that, with God's blessing on your lawfull indeavors, you may reap the benefit proposed; and may thereby be enabled, at the time agreed on for Redemption, To pay in the value of the Credit given [139] out, with Interest every six months, after the Rate of fower pounds P centu P annu, in Bank bills: and so proportionably for lesser time than One yeare, if you shall take out or Redeeme your Estate sooner, (which you are to have liberty to do at your pleasure) But if you shall Redeeme it with or make any paymt in moneys, you must pay forty shillings more in every hundred pounds: For, In order to the satisfaction and incouragement of such' as doubt they shall not have money for their Bills: and, To the end the Current money that's left in the Countrey, may be free for such as desire it, The Bank preferre their owne Bills to money, according to that proportion: and thereby give demonstration, that every man that hath Bills may procure money for them, with advantage, if there be moneys in the Countrey.

4. If you can not conveniently Redeme your estate by the time agreed, you are, notwithstanding, before or at the time appoynted, to Addresse your selfe to the Principall Managers, and propose to them the continuance of your Deposit, for such longer time as you shall think fitt: And if the same be a mortgage of Lands of un-questionable title, paying your yearly Interest or praemium every six months, as aforesaid, tb that time, and charge of Registring your mortgage, they will prolong the same from yeare to yeare, as long as shall be desired. on the same termes. If, of staple goods and Merchandizes unperishable, (as.for instance, Lead, Tinn, Iron, Copper &c) they will do the like: But, if of other goods that will be unsafe to keep longer than the time contracted for, or if any unforeseene incumbrances shall appeare on the said Lands, or question touching the validity of the Mortgagers title, you must either Redeeme them at the time or times agreed on, or they must and will sell them as soone [140] after as they can, at the best Rates they can get; Paying to you the overplus above the value of the Credit issued upon them, The interest then due as aforesaid, together with the charges of the warehouseroome for the time the sayd goods shall lye there deposited, and other charges in sale therof and removall if any be, which they will deduct therout: For, they must not suffer damage to the Bank, which would also be injurious to all those concerned with them as you are.

5. You may at all usuall howers of the day have accesse to your goods in the Bank ware-houses, (in the presence of such as the Principall Managers shall substitute, and intrust with the keys therof) to see that your goods are not damnifyed, as also to Provide against the same, and to show them to Chapmen: In order wherunto, there will be Porters belonging to the Bank, such as they can intrust, and no others, to Remove or Romage your goods, and to do such businesse about them as you shall desire, you paying such moderate Rates for your goods lying there, as, according to their bulkinesse, shall be judged fitt, and agreed on to be reasonable to be allowed for the same, at the time of Depositing them, and during such time only as they shall continue there; for, The Bank-warehouses will be to all men as their owne Warehouses, save that none will be admitted to come into them, but under observation that nothing be imbezzled, or unduly removed with out the managers order.

6. You are also to Take notice by these presents Printed, and to owne and agree unto this as One Fundamentall Rule in the Constitution of the Bank (without agreeing to whicll the Proposers & managers thereof dare not give you the assistance Proposed) That, in case the Creditors of this Bank shall agree to desire, and accordingly declare in writing, [141] That there be a determination put thereto: Or, if on any other account whatsoever the Determination therof shall be judged necessary by the sayd Proposers & Managers and Declared in writing as aforesaid (wch cannot be without allowance and ascertayning of a reasonable time betwixt the said Creditors and the sayd Proposers and managers for closing up the same, and the Accompts therof, so as may be without damage to them, or either of them) That, as no person is hereby, or shall be compelled to accept Bank bills of Credit, unlesse he shall volulltarily agree so to do, and for no longer time, nor otherwise than he shall so consent, So, no man paying his praemium & charges as aforesaid for the Credit he hath, shall be compelled to Redeeme his Pledge, being of personal estate, sooner than the time contracted for, and the nature of the goods deposited shall require.. And to the End the Mortgager of Lands, of unquestionable good title, may not be distressed to his undoing, in case he should, by reason of such Declaration, be suddenly called upon to Redeeme the same, (which may be impossible for him to do in some yeares, through the scarceityof moneys) That all and every Mortgager of such Lands, in such case only, shall . or may have and take six years time after such Declaration aforesayd to be allowed unto him his heirs or.assignes, for Redemption of his Lands: He or they paying after the Rate of six pounds P centu P annum, in ready money, at the end of every six months, for the continuance of the Credit he had therupon, from such time as the sayd Declaration shall be perfected, untill he shall Redeem the same: And, That the Managers & undertakers of this Bank shall or may have and take One full years time more, from the expiration of the sayd six yeares, to be allowed unto them, for selling [142] the said Lands, or such of them as shall not within the said six yeares be redeemed; whereby they may be enabled to Receive in and exchange all Bank-bills then granted forth, into the now Current Coyne or moneys of this Countrey, or other Moneys being not of more intrinsique value than what now passes; Or otherwise satisfy the same, by such Proportions of the said remayning Lands, or other effects, as shall be judged to be of equal! value; Paying to all the Creditors who shall then have any Bills in their hands after the same Rate of Interest, for so long time after publishing the said Declaration as the said Bills shall remayne in the said Creditors hands un-occupied, with Deduction and allowance only of the praemium contracted for, as aforesaid: And that such Bank-bills, as, before such Declaration made, have been given forth, upon the Reall or personall securities aforementioned which remaine in the possession of the said Bank, may & shall be esteemed and passe as Current moneys, of the value of the present Coyne, in all Receipts & payments what so ever, during the sayd termes.

Obj.6. But, None of the forementioned cases reach my Circumstances and Condition: My Lands or goods are all. ready Mortgaged or incumbred to persons on a higher Rate of Interest: and they will not quitt them till I can pay them off. They say, They will not accept of Bank-bills: and if they would, you '1 not part with any till the Lands, &c, be really made over to the Bank. Can you Releive me and persons under my circumstances?

Ans. Doubt it not. If the person you are concerned with will not be lead by the Consideration of the Reall advantages to be made by Bills beyond moneys, herinbefore exprest, There will be other persons, whom you may be informed of [143] at the Bank, who, on Bank-bills of such sum or value as you should pay in moneys, and assurance of the Bank's satisfaction in the title & value of your Lands &c will provide and lay downe the moneys you owe them, if there be any moneys in the Countrey to be had: and you shall also be assisted therin by the Bank's Counsell, Solicitor or attomey at Law, with advice & furtherance, as your case shall require, for the accomplishing your desires, on very reasonable termes.

Obj. 7. But I have neither Lands nor Goods, that I can spare, yet if I could procure moneys, or such Credit as you speak of, I have been brought up to a calling wherin I could live and mantayne my family comfortably, though I payd a higher Rate of Interest for it than the Bank requires: And I have friends too, that would Assist me upon my owne word or Bond, but they say money is not to be had, and they cannot help me.

Ans. If your Friends have Lands or goods They may have this Credit, which will be equivalent with money, to supply you withall, at such Rate of Interest as you can afford to give, & as their friendship & charity shall incline them: whereby (also) they may be gayners, and thereby incouraged to assist you; if they judge you faithfull and laborious in any vocation likely to mantayne you.

Much more might be sayd upon this Subject: But, These seeme to be sufficient to encourage an Attempt. And, the experimente of the things suggested will give such cleare Demonstrations of the usefullnes, Advantage necessity and Security therof, as, Those who are not so prompt to receive things into their understandings by the Notions of them, or are prejudiced by mista~en apprehensions about them, may be presumed will follow others Examples in well-doing, when they are observed to thrive who goe before therin. {{p|144}

We shall therfore Sum up all in this Generall Assertion, That, there will arise many more conveniencies & advantages by this Bank than have been Enumerated, or well can be. By this, The trade and wealth of this Countrey is established upon it's owne Foundation, & upon a medium or Bal- . lance arising within it selfe, viz, The Lands & Products of this Countrey; and not upon the Importation of Gold or Silver or the Scarceity or plenty of them, or of any thing else from Forreigne Nations, which may be with-held. Prohibited or Enhansed, at their pleasures.

Our owne Native Comodities will thus become improved to a sufficiencie for our owne use (at least) & thereby afford a comfortable subsistence to many ingenious and industrious persons amongst us, who know not at present how to subsist: and this will draw over more inhabitants and Planters.

It will not be in the power of any, by extortion and oppression, to make a Prey of the Necessitous.

The Fishery of these parts will be improved. The Navigation and shipping increased for use or sale:

His Majesties Revenues here, in consequence of all these, will be much inlarged.

The Rents of Landed men will be increased, and the payment of them, and all publique taxes facilitated. Yea, The Purchase value of Lands will rise, For, the plenty of Money, or a valuable Credit equivalent therunto, and the Lowering of Interest, must necessarily have that effect. To which may be Added, That, The lesse need there is of money by reason of such current Credit, the more will be the increase of money itself, as, is manifest in Holland, Venice, and all places where Bank Credit supplyes those species. [145]

In Order therfore, and as Preavious to the entring upon this affayre: As it hath been Deemed Expedient to make publication of these things, in the Name of the Proposers, for information; submitting them to the view and Consideration of all men; That each may know his owne share and interest in this Bank, and practice what he shall approve: So, These will be shortly followed with the tender and Proposallof a Subscription to be made (by such as shall voluntarily desire to be concem'd therin) of Receiving and Paying away the Bank-bills of Credit that shall be issued by this Partnership, as ready moneys, in all their Ordinary dealings of buying & selling One with another, and also, of and from all other persons with whom they shall have to do in their tnffiquing affayres, wherupon they are to receive or pay Moneys. The Ground of which subscription is, To the end that, Before the Actuall issuing out of any Bills, it may, By the retume of such Subscriptions, be Rationally conjectured, that this undertaking will receive incouragement by such number of persons of all trades, callings, Ranks and conditions subscribing thereto, as may be judged sufficient to lay the Foundation of a Circulation and passing of this Credit, as ready moneys, By a Generall, Or at least considerable, voluntary vogue, though not universall concurrence, approbation & consent, which being, by the Retume of the sayd subscriptions made knowne. to the Partnership shall be digested into Alphabetical Lists, as well of the names of the persons so subscribing to Consent, as of their respective Trades or callings, and places of habitations, To lye in a readines for the view of all who shall accept this Credit, that they may know with whom to buy and sell in this way. After which, no further time shall be lost, But the Proposers [146] & Managers of this Bank will suddainly meet together, and sitt, from day to day, in some convenient place for carrying on the sayd affayre: Wherof notice shall be given, as also of the usuall howers of their so meeting: That if any who shall not have subscribed such consent, upon the first tender therof, shall be desirous of further satisfaction by personall conference, Or, shall receive satisfaction, and desire to be enlisted as voluntary Dealers with the Bank, they may know when and where to apply themselves, for that purpose: and have their names &c, incerted in such Alphabeticall Lists. for observation. if they shall desire it.

Quò comunius Eo melius. Finis.

NOTE TO THE "DISCOURSE IN EXPLANATION OF THE BANK OF CREDIT," ETC.

The "Discourse" was found among the Winthrop Papers now in possession of the Massachusetts Historical Society, and was published in the "Proceedings" of the society in 1904<ref> Second Series, Vol. XVIII, pp. 62-81.</ref> in connection with a communication made by myself at the December meeting, 1903, which was separately published under the title "The prospectus of Blackwell's bank, 1687." The manuscript bears the title " A Discourse" etc., on the outside of the first leaf which also serves as cover. The leaves measure St by 71 inches. There are thirty. four written pages. The handwriting has been identified as that of Capt. John Blackwell, and inasmuch as Blackwell, when the project was abandoned, put in a claim for disbursements to a clerk for writing II out the abstracts of the book intended to be printed besides what I wrote with my owne hand,"<ref> Andros Tracts, Prince Society Publications, Vol. III, p. 21.</ref> it is reasonable to suppose that we have here the work on which a part of the claim was based. [147]



Notes

<references/>