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 European securities. About one-third was to be in specie. The United States and the States might subscribe not more than half of the capital. The notes under £20 were to bear no interest, the larger ones, four per cent. The bank was to buy land, from which Hamilton thought that great gains might be made because the tories would put much land on the market, and sell it cheaply. Depositors were to pay a fee for the safe keeping of their money. The bank was to lend Congress £1.2 millions at eight per cent. Taxes were to be levied, the revenue from which should be specially appropriated to pay the interest on this loan. Other revenues were also to be raised sufficient to pay the bank two per cent. on all the Continental paper outstanding, at 40 for 1; for which provision the bank was to guarantee the paper and retire it in thirty years. There were to be three auxiliary banks in Massachusetts, Pennsylvania, and Virginia. Morris replied that he was afraid to "interweave a security with the capital of this [his] bank, lest the notes should seem to be circulated on that credit, and the bank would fall if there should be a run on it."

The next step in the development of banking was independent of these projects. On the 4th of June, 1780, Thomas Paine wrote to Joseph Reed, urging that a subscription should be raised to obtain recruits and supplies for the army, which was in a very sad condition. It was expected every day that news would come of the loss of Charleston. The public were very despondent. Many members of the Pennsylvania Assembly had brought up petitions against taxation. Paine was then clerk of that body. He says that he subscribed $500, and that the next day M'Clenahan and Morris subscribed each £200 in hard money. On the 14th came the news of the loss of Charleston. On the 17th a meeting was held, at which a syndicate was formed to raise £300,000 of Pennsylvania currency, but in real money, the subscribers to execute bonds for the subscriptions and form a bank. The Board of War informed Congress of this project, and asked that a committee be appointed to confer with the subscribers. The offer of the persons who formed the so-called bank was to provide, on their own credit and by their own exertions, three million rations and three hundred hogsheads of rum, without profit to themselves; but they desired that security should be given them for their payment. The faith of the United States was pledged to them and the Board of Treasury was directed to deliver to them bills of exchange, drawn in their favor, on the Envoys in Europe, for a sum not exceeding £150,000 sterling, as a guarantee of payment within six months. Morris described this bank, some years later, as "in fact nothing more than a patriotic subscription of Continental money, * * * for the purpose of purchasing provisions for a starving army." Hamilton criticised it because its purchases were made with its "stock," that is, its capital, and not with its notes; so that it was only a subscription for a single occasion, and not an institution capable of continued action.