Dear Sir,

I had not expected to have troubled you again on the subject of finance; but since the date of my last, I have received from Mr. Law a letter covering a memorial on that subject, which, from its tenor, I conjecture must have been before Congress at their two last sessions.  This paper contains two propositions; the one for issuing treasury notes, bearing interest, and to be circulated as money; the other for the establishment of a national bank.  The first was considered in my former letter; and the second shall be the subject of the present.

The scheme is for Congress to establish a national bank, suppose of thirty millions capital, of which they shall contribute ten millions in new six per cent, stock, the States ten millions, and individuals ten millions, one half of the two last contributions to be of similar stock, for which the parties are to give cash to Congress:  the whole, however, to be under the exclusive management of the individual subscribers, who are to name all the directors; neither Congress nor the States having any power of interference in its administration.  Discounts are to be at five per cent., but the profits are expected to be seven per cent.  Congress then will be paying six per cent, on twenty millions, and receiving seven per cent, on ten millions, being its third of the institution:  so that on the ten millions cash which they receive from the States and individuals, they will, in fact, have to pay but five per cent, interest.  This is the bait.  The charter is proposed to be for forty or fifty years, and if any future augmentations should take place, the individual proprietors are to have the privilege of being the sole subscribers for that.  Congress are further allowed to issue to the amount of three millions of notes, bearing interest, which they are to receive back in payment for lands at a premium of five or ten per cent., or as subscriptions for canals, roads, and bridges, in which undertakings they are, of course, to be engaged.  This is a summary of the scheme, as I understand it:  but it is very possible I may not understand it in all its parts, these schemes being always made Unintelligible for the gulls who are to enter into them.  The advantages and disadvantages shall be noted promiscuously as they occur; leaving out the speculation of canals, &c. which, being an episode only in the scheme, may be omitted, to disentangle it as much as we can.

1.  Congress are to receive five millions from the States (if they will enter into this partnership, which few probably will), and five millions from the individual subscribers, in exchange for ten millions of six per cent, stock, one per cent, of which, however, they will make on their ten millions of stock remaining in bank, and so reduce it, in effect, to a loan of ten millions at five per cent, interest.  This is good:  but

2.  They authorize this bank to throw into circulation ninety millions of dollars, (three times the capital), which increases our circulating medium fifty per cent., depreciates proportionably the present value of the dollar, and raises the price of all future purchases in the same proportion.