The Legislature
Within the legislature, however, that question was far less clear-cut.
As bank partisans offered concessions to each other in the hopes of building consensus around dueling proposals, state legislators—the audience for these petitions—seemed increasingly unwilling to take affirmative steps on behalf of either bank.
Despite the connections that the Bank of New-York enjoyed in the legislature, there remained twelve senators and sixty-eight assemblymen in the legislature who were not directly linked to the proposed bank. New laws had to win majority support not only in both houses, but also in the state’s Council of Revision—a panel composed of the governor, two justices of the state’s supreme court, and the state’s chancellor, who happened to be Robert R. Livingston, the chief supporter of the rival land bank. Only after winning support in the Council of Revision could a bill be laid before the governor for his signature, making it necessary for the promoters of both the commercial Bank of New-York and the land Bank of the State of New York to lobby legislators using a variety of appeals—neither bank was large enough, after all, to give every lawmaker a line of credit or a seat on its board of directors.
Harnessed from across the state and crammed into the narrow quarters of City Hall, New York’s state legislature reflected many of the same tensions and motivations found in the civic and economic lives of the few dozen city blocks that surrounded them near the southern tip of Manhattan. Any person capable of reading a newspaper or entering a tavern was acutely aware of the divisions between loyalist Tories and patriotic Whigs in the city, and vehement anti-Tory passions were expressed by legislators who proposed to strip former Loyalists of their rights to hold office, vote, or own property. A cadre led by Albany County state senator Abraham Yates was hostile even to the notion of reconciliation with Tories and relished questioning the patriotic credentials of Whigs who dared to socialize or do business with onetime Loyalists. One of Robert Livingston’s friends believed that the “narrowness of [Yates’s] mind & the badness of his heart … injures this state more than ever his services will expiate.” “Men of integrity & education,” he fumed, indulged Yates’s “pretended patriotism” and “suffer that old booby to thwart & disconcert whatever has the appearance of wise & sound policy with impunity.”63
The Bank of New-York steered directly into this storm once it published the roster of its managers and directors in city newspapers, making it a target for anti-Tory politicians and their allies. A letter to a New York paper soon wondered what was behind the “present confidence and audacity” of “truly detestable and obnoxious Tories” who appeared in public as bank directors. The Whig directors and bank president McDougall, one writer asserted, had become nothing more than “advocates” for these “bloody-minded villains,” and it was “high time” for the state legislature to once and for all “make a proper discrimination” between “friends and foes of this country” by banishing “sworn enemies” who “endanger the piece of society by parties, factions, and cabals.” The Bank of New-York, the writer concluded, was nothing more than an “absurd and ridiculous system” for advancing Tory interests.64
Other letters made the same critique and pointed to the land bank as a preferable and patriotic alternative. In an “Appeal to the Legislature,” one writer who styled himself “A Real Whig” wrote in the New York Independent Gazette that the most potent British threat to America was a financial one. “We never had so much to fear from [Tory] arms,” read the letter, “as from their influence and wealth”; the author said the Bank of New-York was “the most dangerous and effectual engine of power that can ever be formed in a State,” and lauded the land bank as the more authentically American “Whig bank.” In opposing the “Whig” land bank, the writer warned, Tories had pooled “hoarded riches … the plunder of our citizens, the wages of death and the earnings of slaves” in order to create “influence in a Bank.” There, they would “lay the foundation of power … [and] silence every Whig character who applies to them for aid.” Referring to Alexander McDougall’s leading role in the bank, the writer told readers: “Be not deceived by the names of a few Whig characters who appear…. The danger is the greater while the real agents are behind the curtain.” The writer alleged that bank cashier William Seton was conspiring to unite New York Tories with Philadelphia Tories, and closed his letter with a threatening flourish: those who had “hitherto borne the name of patriots” would be committing “apostasy” if they failed to “withdraw their names when the cloven foot appears to men of discernment”65 This land-bank supporter had therefore decided that the way to defeat the money bank was to ignore concerns about assets and instead scrutinize the patriotism and motivations of those aligned with the Bank of New-York. By linking Tories with money, the writer sought to raise the stakes of the approval of a charter for a money bank; such a legislative act would empower the nation’s most dangerous domestic enemies and unravel the gains of the Revolution by elevating a class of unreliably loyal Americans to positions of financial and political power.
But another rhetorical thread soon developed amid these fights: a call to reject both banks’ petitions for incorporation. Writers argued that neither bank should be incorporated and questioned the propriety of bank chartering altogether.
One letter, punched up with emphatic typesetting in the Journal, pointed to the Tory–Whig coalition and asked whether bank chartering created dangerous alliances and corrupting influences that the legislature should try to extinguish rather than encourage. As the writer understood it, new banks were “extraordinary phenomena.” One in Pennsylvania was composed of “rigid Presbyterians (who have hitherto assumed to themselves the style and character of pure and untainted Whigs), firm and unshaken Quakers, and bigoted, furious Tories (Churchmen and others)” who all “appear[ed] in the Fields of Politicks and controversy.” Meanwhile in New York, “similar coalitions, equally destitute of public spirit, and destructive of the Whig interest, [were] now forming.” The writer demanded that the legislature “guard against” the “dangerous consequences and tendency” of banks, and asked whether “either the land or money Bank, would not be more beneficial to a few money lenders and traders, than to the country at large?” Because the legislature would be vesting an important privilege in a narrowly drawn group, the writer alleged that lawmakers were creating a situation where “Government will be laid under obligations to usurers, & c. who will of course worm themselves into lucrative posts and high stations” while escaping accountability from voters.66
Another letter, printed a week later in the Journal and written by someone who wanted to be known only as “a Mechanic,” echoed these concerns and raised a broader question about incorporated banking: “Where ought credit be placed for the public weal in a republican government?” According to the writer, neither a land- nor money-bank proposal was a suitable answer. Credit should rest “in government only,” because allowing it to reside in the hands of bankers had “pernicious and destructive consequence.” “It removes both power and credit out of the proper hands,” the author said, “and fixes them into those of individuals.” Because those people proposing a bank tended to “assert that government have no credit to circulate their own paper”—meaning that they opposed the emission of state bills of credit and other forms of inflation-prone paper money—the author felt that it was “a burlesque or insult on government” for those same individuals to “ask their sanction to give a credit to the property of individuals.” Bank charters “advance the power of stockholders, and depreciate the power of government,” creating conditions that lead to high interest rates for debtors, the political disenfranchisement of renters, and state legislatures dominated by bank shareholders. In Pennsylvania, the writer warned, “the Assembly must become Brokers for the Bankholders” because lawmakers had taken steps to protect the Bank of North America. The risk was that New York would follow suit, placing bank stockholders “in the path to acquire the same ascendancy and authority over the United States.”67
In
