Page:A History of Banking in the United States.djvu/31

 others for £150,000, to be lent in notes on land security, and payable in twenty years by various articles of merchandise. Another was Edward Hutchinson and 106 partners, for £120,000, redeemable in fifteen years, with silver at 20s. an ounce, or gold pro rata. The latter was upon a plan similar to one before mentioned, and its bills were denominated merchants' notes. It was promoted in order to put down the other. Though the gentlemen appointed to consider them had less objection to the Specie Bank than to the Land, or as frequently called, Manufactory Bank, they give an opinion that both are inexpedient. In the Legislature, there is a diversity of opinion as to these companies. The Council express their wish that the Land Bank may be forthwith disannulled, but that the silver scheme, so called, be put over to the coming session. The Representatives, looking on the Land Bank as designed for people of moderate property as well as for the rich, manifest their desire that both suspend operations till the next Assembly, and then be considered as to their respective claims. This was the motion agreed on, and thus the petitioners earnestly looked for a hearing."

The Land Bank of 1741 was to be for the amount of £150,000 lawful money. Estates were to be mortgaged to the company. Three per cent. per annum was to be paid on loans in enumerated products of the Colony and the principal was to be repaid in twenty years (five per cent. per annum), in the same way. Mechanics, etc., might come in for not over £100 each, by giving two sureties for double the sum. [Evidently they meant to print and loan, in notes, at once to the stockholders the full amount of the stock subscribed. The mortgages carried no guarantee to the noteholders, except as they could be pursued through the company.] There were to be no dividends for five years, and after that none which should ever leave less than twice the principal paid in at the time. [They intended to trade with the products which were paid in.]

The notes were to read: "We promise for ourselves and partners to receive this 20 shilling bill of credit as so much lawful money, in all payments, trade, and business, and after the expiration of twenty years to pay the possessor the value thereof in manufactures of this Province." The projectors of this notable scheme had, probably, no intention of fraud, but their plan would have given them possession of the "manufactures of this province" to the amount of the notes issued by them, without any security or interest by them, for the term of twenty years. It was because they called it a "bank," and were "providing a medium" that their minds were obscured to the truth of the case.

At this time, the notes of the merchants, issued in 1733, were at thirty-three and one-third per cent. above the Province bills, being paid in gold and silver, and the notes of the Specie Bank of 1740 were equivalent to cash, the issuers being "eminent and wealthy merchants." This seems to sound as if the notes were actually convertible and converted; but it probably should not be understood that they were so in the sense of more modern times.