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Banks and Economic Development in Post-Revolutionary Northern Virginia, 1790–1812

Published online by Cambridge University Press:  13 December 2011

A. Glenn Crothers
A. Glenn Crothers
Affiliation:
A. GLENN CROTHERS is assistant professor of history atIndiana University Southeast in New Albany, Indiana, where he is also director of the Floyd County Oral History Project.
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Abstract

In order to facilitate commercial transactions and economic investment after the American Revolution, many inhabitants of northern Virginia became convinced that the region needed financial institutions. Indeed, most politically active residents of the region—at least after the 1790s—saw banks as crucial agents of economic development. Thus, the philosophy of “agrarian republicans” such as Thomas Jefferson and John Taylor of Carolina—who saw banks as monopolistic and anti-republican institutions—had limited appeal in the region. Moreover, the banks of northern Virginia were not controlled by planters who sought capital to finance the purchase of slaves and land. Instead, banks supported a wide range of economic endeavors—agriculture, industry, internal improvement projects, and commercial activities. The broadening access to bank capital in northern Virginia reveals that in the South—as in the northern states—there was a “democratization” of banking in the years after Revolution.

Type
Articles
Information
Business History Review , Volume 73 , Issue 1 , Spring 1999 , pp. 1 - 39
Copyright
Copyright © The President and Fellows of Harvard College 1999

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References

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2 9 Oct. 1792, Alexandria City Legislative Petitions, 1778–1809, Library of Virginia, Richmond, Virginia (hereafter LOV).

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6 Genovese, Eugene, The Political Economy of Slavery: Studies inthe Economy and Society of the Slave South, 2nd ed. (1965; reprint, Hanover, N.H., 1989), 22–23 (quote)Google Scholar, 158, 184, 196, 199; Wyatt-Brown, Bertram, Southern Honor: Ethics and Behavior in the Old South (New York, 1982), 183–184Google Scholar; Feiner, Susan, “Factors, Bankers, and Masters: Class Relations in the Antebellum South,” Journal of Economic History 42 (Mar. 1982): 65 (quote)CrossRefGoogle Scholar; Feiner, Susan, “The Financial Structures and Banking Institutions of the Antebellum South, 1811–1832” (Ph.D. diss., University of Mass., 1981)Google Scholar; Gray, Lewis Cecil, History of Agriculture in the Southern United States to 1860, 2 vols. (1932; reprint, Gloucester, Mass., 1958), 2:712–713Google Scholar; and Freehling, William, The Road to Disunion, Volume 1: Secessionists at Bay, 1776–1854 (New York, 1990), 47–48.Google Scholar A recent issue of the Journal of the Early Republic devoted to the question of the “capitalist transition” of the U.S. provides a good summary of the dominant historical view of the antebellum South. The only article devoted to the region argues that in contrast to the rest of the nation the South failed to undergo a “market revolution”; see Egerton, Douglas, “Markets without a Market Revolution: Southern Planters and Capitalism,” Journal of the Early Republic 16 (Summer 1996): 207–221.CrossRefGoogle Scholar For contrary views which see banks playing a central role in Southern economic growth see Schweikart, Larry, Banking in the American South, from the Age of Jackson to Reconstruction (Baton Rouge, La., 1987)Google Scholar; and Green, George D., Finance and Development in the Old South: Louisiana Banking, 1804–1861 (Stanford, Calif., 1972).Google Scholar

7 Davis, Joseph Stancliffe, Essays in the Eadier History of American Corporations, vol. 2 (1917; reprint, New York, 1965), 59 (banks in 1793)Google Scholar; Webster, Noah, “A Sketch of the History and Present State of Banks and Insurance Companies in the United States,” Miscellaneous Papers on Political and Commercial Subjects (1802; reprint, New York, 1967), 43–45Google Scholar; Gouge, William, A Short History of Paper Money and Banking in the United States; to which is Prefixed an Inquiry into the Principles of the System, 2 vols. (1833; New York, 1968), 2:42–44Google Scholar; Gallatin, Considerations, 53. In addition, Galltin estimated thatthere were 208 banks in 1815, 246 in 1816, and 307 in 1820; see pages 45, 49.

8 Matson, Cathy D., “Capitalizing Hope: Economic Thought and the Early National Economy,” Journal of the Early Republic 16 (Summer 1996): 283–285CrossRefGoogle Scholar; Riesman, Janet A., “Money, Credit, and Federalist Political Economy,” in Beyond Confederation: Origins of the Constitution and American National Identity, eds. Beeman, Richard, Botein, Stephen, and Carter, Edward D. (Chapel Hill, N.C., 1987), 128–161Google Scholar; and Riesman, , “Republican Revisions: Political Economy in New York after the Panic of 1819,” New York and the Rise of American Capitalism: Economic Development and the Social and Political History of an American State, 1780–1870, eds. Pencak, William and Wright, Conrad Edick (New York, 1989), 1–44 (esp. 1–12).Google Scholar

9 Doerflinger, Vigorous Spirit of Enterprise, 296–298; Davis, History of American Corporations, 2:36–39; and Morris, quoted in Ferguson, Power of the Purse, 123.

10 Wood, Gordon S., The Creation of the American Republic, 1776–1787 (1969; reprint, New York, 1972), 400–403Google Scholar; Johnson, Foundations of American Economic Freedom, 187–188; Doer-flinger, Vigorous Spirit of Enterprise, 268–272; Davis, History of American Corporations, 2:41–43; Hammond, Banks and Politics, 53–56; and Riesman, “Federalist Political Economy,” 146–149, 156–161. See also Webster, Pelatiah, “An Essay on Credit: In Which the Doctrine of Banks is Considered, and Some Remarks are Made on the Present State of the Bank of North-America,” Political Essays on the Nature and Operation of Money, Public Finances, and Other Subjects… (Philadelphia, 1791), 441–444Google Scholar; and N. Webster, “Sketch of Banks and Insurance Companies,” 5–6.

11 Thomas Paine noted in 1786 that “as gold and silver are not the natural products of Pennsylvania, we have no other hard money than what the produce of the country exported to foreign parts brines in”; “The Affairs of Pennsylvania,” Thomas Paine: Collected Writings, ed. Foner, Eric (New York, 1995), 362.Google Scholar

12 P. Webster, “An Essay on Credit,” 433–434; Riesman, “Federalist Political Economy,” 135–139. Such arguments, of course, followed Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations, 2 vols., ed. Cannan, Edwin (1904; reprint, Chicago, 1976), 1:310, 345.Google Scholar

13 Smith, Wealth of Nations, 1:310–311; P. Webster, “Essay on Credit,” 435–436; Hammond, Banks and Politics, 10 (quote), 87, 282. On the uncertainty of early bankers regarding what constituted a safe reserveof specie to circulating bank notes, see Blackson, Robert M., “Pennsylvania Banks and the Panic of 1819: A Reinterpretation,” Journal of the Early Republic 9 (Fall 1989): 345–346.CrossRefGoogle Scholar In the 1830s the confusion still existed. William Gouge, a Jacksonian supporter of hard money, noted that “for every silver dollar they have in their vaults, some of the Banks have two paper dollars in circulation, some three, some five, some eight, and some thirteen”; Gouge, Paper Money and Banking, 1:53.

14 Doerflinger, Vigorous Spirit of Enterprise, 304–310; Smith, Wealth of Nations, 1:340–341.

15 P. Webster, “Essay on Credit,” 443–444; Paine, “The Affairs of Pennsylvania,” 362 (quote); and Paine, , Dissertations on Government, the Affairs of the Bank, and Paper Money (Philadelphia, 1786).Google Scholar See also Foner, Eric, “Tom Paine's Republic: Radical Ideology and Social Change,” in The American Revolution: Explorations in the History of American Radicalism, ed. Young, Alfred F. (DeKalb, Ill., 1976), 219–222Google Scholar; Johnson, Foundations of American Economic Freedom 107–109; and Hammond, Banks and Politics, 56–62. Hammond noted, on page 57, that Robert Morris was particularly insistent on the importance of banks for farmers: “Morris recalled occasions when farmers had waited vainly with their loaded wagons on Market Street and at the end of the day had driven them home as full as they came, because there was no cash. Produce in the market had been plenty … and he himself had been eagerly bent on the purchase of it, but could not command the money for the purchase. … Now that there was a bank, money was always available, for the bank furnished its notes to the merchants in exchange for their obligations, and the notes served as money with which they paid for their purchases.”

16 N. Webster, “Sketch of Banks and Insurance Companies,” 47; Doerflinger, Vigorous Spirit of Enterprise, 309 (quote); Hammond, Banks and Politics, 86; P. Webster, “Essay on Credit,” 437.

17 Fenstermaker, Development of American Commercial Banking, 15; Gouge, Paper Money, 2:51; Doerflinger, Vigorous Spirit of Enterprise, 301; and Davis, History of American Corporations, 2:39.

18 Hunter to Theodorick Bland, May 1782, “Selections from the Campbell Papers,” Virginia Magazine of History and Biography 9 (July 1901); 70; Stames, Sixty Years of Branch Banking, 13; Doerflinger, Vigorous Spirit of Enterprise, 289, 308; Entry of 13 Dec. 1783, Hooe and Harrison Journal, 1778–1787, Hooe and Harrison, Virginia Account Books, 1770–1787, UVA; 9 Oct. 1792, Alexandria Legislative Petitions, LOV; Columbian Mirror and Alexandria Gazette, 23 and 26 Jan. 1793.

19 Virginia Gazette and Alexandria Advertiser, 19 May and 23 June 1791; Fitzgerald to Hamilton, 21 Nov. 1791, in The Works of Alexander Hamilton; Comprising His Correspondence, and His Political and (Ufficiai Writings, Exclusive of the Federalist, Civil and Military, 7 vols., ed. Hamilton, James C. (New York, 1851), 5:485.Google Scholar The petition to the bank directors is not extant. On Fitzgerald, see Miller, T. Michael, Artisans and Merchants of Alexandria, Virginia, 1780–1820, 2 vols. (Bowie, Md., 1991–1992), 1:139.Google Scholar

20 “The Bank of the United States: Petitions from Virginia Cities and Towns for the Establishment of Branches, 1791,” Virginia Magazine of History and Biography 8 (Jan. 1901): 287–295; Starnes, Sixty Years of Branch Banking, 18–20, 24–25; Virginia Gazette and Alexandria Advertiser, 12 Jan. 1792. The delay in establishing a Virginia branch of the BUS had much to do with Jeffersonand Madison's opposition to the institution. In early 1792 Jefferson informed Madison that “It seems nearly settled with the Treasuro-bankites that a branch shall beestablished at Richmond.” He suggested that “a counter-bank be set up to befriend the agricultural man by letting him have money on a deposit of tobo, notes, or even wheat, for a short time, and would not such a bank enlist the legislature in it's [sic] favor, & against me Treasury bank?”; see Jefferson to Madison, 3 July 1792, in The Works of Thomas Jefferson, Federal Edition, 12 vols., ed. Ford, Paul Leicester (New York, 1904–1905), 7:132.Google Scholar Jefferson's hostility to the BUS survived even after its charter had been revoked in 1811. In 1814 he wrote, “I have ever been the enemy of banks, not of those of discount for cash, but those foistingtheir own paper into circulation, and thus banishing our cash. My zeal against those institutions was so warm and open at the establishment of the Bank of the United States that I was derided as a maniac by the tribe of bank-mongers, who were seeking to filch fromthe public their swindling and barren gains”; see Jefferson to John Adams, 24 Jan. 1814, in The Writings of Thomas Jefferson: Being His Autobiography, Correspondence, Reports, Messages, Addresses, and Other Writings, Official and Private, 9 vols., ed. Washington, H. A. (New York, 1853–1857), 6:305.Google Scholar Oponents of the BUS also suggested that the Virginia legislature limit the intrest rate the BUS could charge in the state to 5 preent; see Risijord, chesapeak politics, 473.

21 Virginia Gazette and Alexandria Advertiser, 13 Sept. 1792; 9 Oct. 1792, Alexandria Legislative Petitions, LOV.

22 Ibid.

23 Journal of the House of Delegates of the Commonwealth of Virginia … 1792, (Richmond, 1792), 127–130, which reveals that opponents of the bank tried to lower its discount rate from 6 to 5 percent; John Pope quoted in Cole, David M., The Development of Banking in the District of Columbia (New York, 1959), 7Google Scholar; Dawson to Madison, 27 Nov. 1792, Madison Papers, Library of Congress (hereafter LC); Risjord, Chesapeake Politics, 473–474. As Henry Lee put it, “One way … to preserve the State from this undue operation [ie., the BUS] … is to establish a Bank under the auspices of the C. wealth. This mighteasily be done & would counteract if not defeat the plan contemplated”; see Lee to Madison, 10 Sept. 1792, Henry Lee Papers, 1768–1816, LOV.

24 Hening, William Walter, ed., The Statutes at Large; Being a Collection of all the Laws of Virginia, from the … Year 1619, 13 vols. (Richmond, New York, and Philadelphia, 1809–1823), 13:592–598Google Scholar. See also Walsh, John Joseph, Early Banks in the Distrct of Columbia, 1792–1818 (Washington, D.C., 1940), 24–27Google Scholar; Cole, Banking in D.C., 8–11; Gruchy, Allan Garfield, Supervision and Control of Virginia State Banks (Charlottesville, Va., 1937), 14–20, 48–50Google Scholar; and Howe, Charles E., “The Financial Institutions of Washington City in Its Early Days,” Records of the Columbia Historical Society 8 (1905): 1–9.Google Scholar

25 Columbian Mirror and Alexandria Gazette, 5 and 8 Dec. 1792, 23, 26 Jan., 13 Feb. and 6 Apr. 1793; Virginia Gazette and Alexandria Advertiser, 13 Dec. 1792 (quote), and 16 May 1793; Walsh, Early Banks in D.C., 28–34; “Balance of Books, Bank of Alexandria,” 6 Jan. 1794, Calendar of Virginia State Papers and Other Manuscripts, 11 vols. (Richmond, 1875–1893), 7:6. The nine original directors were Richard Conway, William Hartshome, Robert T. Hooe, William Wilson, William Herbert, Jonah Thompson, William Hodgson, Josiah Watson, and John Fitzgerald. Fendall served as president until 1796 when William Herbert took his place.

26 Frédéric, François Alexandre, Liancourt, duc de la Rochefoueault, Travels Through the United States of North America, the Countryof the Iroquois, and Upper Canada in the Years 1795, 1796, and 1797; With an Authentic Account of Lower Canada, 2 vols., ed. Neuman, H. (London, 1799), 2:339Google Scholar; Alexandria Expositor, 23 Jan. 1806; “Balance of Books, Bank of Alexandria,” 6 Jan. 1794, 8 Jan. 1795, 7 Jan. 1796, 9 Jan. 1797, 12 Jan. 1798, 6 Jan. 1800, and 17 Mar. 1802, Calendar of State Papers, 7:6, 419; 8:330, 410, 460; 9:71, 290. After 1801 the jurisdiction of Alexandria and the bank shifted to Congress. I have found no surviving financial statements until 1814. For acceptance of Alexandria bank notes, see, for example, Columbian Mirror and Alexandria Gazette, 14 Apr. (James Pierce will take bank notes for sugar) and 5 May 1798 (William Herbert will take bank notes for land).

27 The dividends paid per year between 1795 and 1805 were: 1795, 13 percent; 1796, 10 percent; 1797, 8.5 percent; 1798, 8.75 percent; 1799, 8.5 percent (estimated); 1800, 9.5 percent; 1801, 12.5 percent; 1802, 9 percent; 1803, 9.5 percent; 1804, 9 percent; 1805, 8 percent. Thus, in the eleven years from 1795 to 1805 dividends onbank stock averaged 9.66 percent. See Columbian Mirror and Alexandria Gazette, 7 July 1795, 5 Jan. and 30 July 1796, 2 Jan. and 6 July 1797, 4 Jan. 1798, 10 Jan. 1799, 21 Jan. and 7 July 1800; Alexandria Advertiser and District of Columbia Daily Advertiser, 28 June 1798; Alexandria Advertiser and Commercial Intelligencer, 5 Jan. 1801, 13 Jan. and 6 July 1802, 3 Jan. and 5 July 1803; Times and District of Columbia Daily Advertiser, 6 July 1801; Alexandria Daily Advertiser, 4 Jan. and 2 July 1804, 9 Jan. and 2 July 1805, and 6 Jan. 1806. “District of Columbia Banks,” American State Papers, Documents, Legislative and Executive, of the Congress of the United States: Class 10: Miscellaneous, 1789–1823, 2 vols. (Washington, D.C., 1834), 2:45–46.

28 Alexandria Advertiser, 1 and 3 Nov. 1797; Alexandria Advertiser and District of Columbia Daily Advertiser, 30 May 1798 and 1 Jan. 1799 (Moore); 6 Mar. and 13 Sept. 1798 (Lemoine); Alexandria Advertiser and Commercial Intelligencer, 25 Nov. 1802; 10 May, 24 June, and 12 Sept. 1803 (Groverman). Lemoine diedin 1802, but Moore and Groverman were still in business in 1805; see Miller, Artisansand Merchants, 1:175, 272–273, 342. On the operations of note brokers elsewhere in the District of Columbia, see Cole, Banking in D.C., 137–139.

29 See, for example, Alexandria Advertiser, 1 Nov. 1797 (Stewart Pollock and Company selling dry goods in exchange for bank shares), 28 July (David Pollock and Company selling dry goods in exchange for bank stock) and 5 Sept. 1798 (Robert Allison selling mill in exchange for bank stock); Columbian Mirror and Alexandria Advertiser, 29 May 1798 (J. B. Nickols wants to buy stock); Times and District of Columbia Daily Advertiser, 25 Nov. 1800 (Thomas Cruse wants to buy five shares), 29 July 1801 (J. F. Mercer selling land in Loudoun Co. in exchange for bank shares); Alexandria Advertiser and Commercial Intelligencer, 5 Feb. 1801 (William I. Hall wants to buy stock), 12 Jan. (Henry K. May and Company wants to buy stock), and 10 Nov. 1803 (Francis Lightfoot Lee wants to buy stock); Alexandria Daily Advertiser, 10 Jan. (Charles Little and George Triplett selling three shares), 10 Mar. (William Herbert selling fifteen shares), 20 Aug. (James Patton selling bank shares), 28 Nov. (William Hodgson will receive bank shares in exchange for land), and 14 Dec. 1804 (J. Mandeville seeking bank stock). This list is by nomeans complete.

30 Bank of Alexandria Stocks, Herbert Family Papers, 1793–1833, Virginia Historical Society, Richmond (hereafter VHS); Alexandria Advertiser and Commercial Intelligencer, 23 Ian. 1803.

31 The Will of George Washington (Baltimore, 1800); Potomak Guardian & Berkeley Advertiser, 31 Mar. 1796; Cole, Bankingin U.C., 159. Four of the women identified as previous owners of Robert Beverley's shares (Letitia Kennedy, Margaret Magruder, Eleanor and Mary Thomas) probably fall into the category of widows; see Alexandria Bank Shares, Herbert Family Papers, VHS. ‘Philanthropy,” Alexandria Expositor, 10 May 1805.

32 Of the 65 previous owners of Beverley's shares, 29 were merchants (Charles Bennett, Geo. Clementson, Jonathan Darby, James Deneale, John Dunlap, David Easton, John Ford, John Gill, Robert Hamilton, Robert B. Jamieson, John Janney, Philip Magruder, John Mandeville, James Miller, John Norwood, Robert Patton, Thomas Patton, Charles Scott, Wm. Smith, James Sommerville, George Stovin[g], John D. Sutton, George Taylor, John Tayloe, John Thomas, John Vowell, Thomas Vowell, Josiah Watson, William Wilson, and Charles Young); 10 were professionals (James Kennedy and E. C. Dick [doctors], George Deneale, P. R. Fendall and Richard M. Scott [lawyers], Thomas Davis and James Muir [clergymen], Jesse Simms, A. J. Thomas and John Wise [tavernkeepers]); 9 were planters (Francis Corbin, Wm. Holburn, Henry Lee, Richard Bland Lee, Theodorick Lee, Charles Little, Wm. Mitchell, Wm. Montgomery, Leven Powell); and 3 were artisans (James Irvin [ropemaker], Andrew Jamieson [baker], and Mordecai Miller [silversmith]). The occupations of 14 could not be positively identified (Walter Chandler, James Dermot, Letitia Kennedy, Margaret Magruder, Francis Newman, Wm. Osbum, Wm. Peale, Henry Rise, Alexander Sampson, Thomas Snowden, Craven Payton Thomas, Eleanor Thomas, Mary Thomas, and John R. Wheaton). See Alexandria Bank Stock, Herbert Family Papers, VHS; Miller, Artisans, 1:30, 72, 95, 98, 102–103, 105–106, 119, 123, 135–136, 144–145, 160, 180–181, 226, 232, 233, 235, 249, 270, 279, 313, 314–315, 335–336, 350; 2:9, 24, 96, 104, 106, 122–123, 138, 157–158, 163, 173, 174, 181–182, 209–210, 235–236, 263; and Netti Schreiner-Yantis and Florene Speakman Love, eds., The 1787 Census of Virginia …, 3 vols. (Springfield, Va., 1987), 2:884, 886, 894, 902, 1245, 1419. 4 other stockholders can be identified from newspaper advertisements, 3 of whom were merchants or professionals; see Alexandria Advertiser and Commercial Intelligencer, 27 Feb. 1801 (J. Fitzgerald, merchant, 5 shares); Alexandria Daily Advertiser, 10 Jan. (Wm. Triplett, Fairfax Co. planter, 3 shares), 10 Mar. (Wm. Herbert, banker, 15 shares), and 17 Apr. 1804 (Geo. Gilpin, merchant, 2 shares).

33 Columbian Mirror and Alexandria Gazette, 27 Feb. 1798 and 21 Jan. 1800; “Incorporated Banks and Insurance Companies in the District of Columbia,” 22 Feb. 1814, American State Papers, Documents, Legislative and Executive, of the Congress of the United States: Class 3: Finance, 1789–1828, 5 vols. (Washington, D.C., 1832), 3:831; “Stock Certificates,” McKnight Family Papers, 1768–1824, UVA. In 1800 the turnpike commissioners for Fairfax and Loudoun counties also announced that they would piace their funds in the Bank of Alexandria; see Columbian Mirror and Alexandria Gazette, 13 Mar. 1800. Lee to William Ludwell Lee, 4 Apr. 1797, Edmund Jennings Lee Papers, 1753–1904, VHS.

34 Columbian Mirror and Alexandria Gazette, 6 Apr. 1793; Lee to Lieutenant-Governor, 25 Sept. 1794, Calendar of State Papers, 7:325.

35 Hammond, 86. On the rise of Alexandria's commerce, see Crothers, “‘The Projecting Spirit,’” 58–102. Potomak Guardian & Berkeley Advertiser, 2 Mar. 1795; J. F. Mercer to Richard Mercer, 9 May 1794, Mercer Family Papers, 1656–1869, VHS; “Value of Exports for Five Years Ending Sept. 30, 1795,” American State Papers, Documents, Legislative and Executive, of the Congress of the United States, Class 4: Commerce and Navigation, 1789–1823, 2 vols. (Washington, D.C., 1832), 1:321; Cole, Banking in D.C., 8. The Maryland assembly incorporated the Bank of Columbia in 1794 with a capital of $1 million though bank organizers sold nowhere near enough shares to fill the entire capital.

36 21 Nov. 1793, Alexandria Legislative Petitions, LOV. The petition was signed by 245 individuals, and it was accompanied by identical petitions from Fairfax and Fauquier counties (212 signatures).

37 21 Nov. 1795, Alexandria Legislative Petitions, LOV. The petition was signed by 234 individuals. Identical petitions were forwarded on the same date from Loudoun County (32 signatures), Frederick County (58 signatures), Berkeley County (30 signatures), and Spotsylvania County (unknown number of signatures).

38 Shepherd, Samuel, ed., The Statutes at Large of Virginia, from … 1792 to … 1806, 3 vols. (1835; reprint, New York, 1970), 1:373–374Google Scholar; Columbian Mirror and Alexandria Gazette, 2 Jan. 1796; William Herbert to the Governor, 17 Mar. 1802, Calendar of State Papers, 8:460, 9:290; Times and District of Columbia Daily Advertiser, 10 June and 16 July 1801.

39 Columbian Mirror and Alexandria Gazette, 12 May 1796; Alexandria Advertiser, 2 Aug. 1797. In 1799 Washington, though he pronounced himself “a novice” in “this business of borrowing and discounting,” requested that the bank renew his sixty-day note on the bank; see Washington to William Herbert, 1 Sept. 1799, Writings of Washington, 37:351–352. Hammond argues that by 1800 the “majority” of banks “had begun to lend for longer periods.” Renewals on notes became “a matter of course,” though “bankers liked to pretend that they were faithful” to the “tradition of short-term credit”; Banks and Politics, 192.

40 “Balance of Books, Bank of Alexandria,” 6 Jan. 1796, 9 Jan. 1797, and 17 Mar. 1802, Calendar of State Papers, 8:330, 410; 9:290.

41 William Hartshome to Jacquelin Ambler, 12 July 1793, ibid., 6:447 (quote); P. W. Fendall to Governor, 18 Feb. 1794, and J. Pryor to Governor, 3 Mar. 1794, ibid., 7:34–35, 60, see also John Steele to Governor, 23 June 1795, ibid., 8:260; Cole, Banking in D.C., 14; Alexandria Daily Advertiser, 1 and 7 May 1805; and Walsh, Early Banks in D. C., 48. The federal government also deposited over $170,000 in public funds in the Bank of the Alexandria between 1804 and 1806; see Gallatin, Albert, A Letter from the Secretary of the Treasury, Transmitting a Statement of the Amount of Deposits of the Public Money in the United States and Other Banks … (Washington, D.C., 1806), 6–7.Google Scholar See also Sylla, Richard, Legier, John B., and Wallis, John J., “Banks and State Public Finance in the New Republic: The United States, 1790–1860,” Journal of Economic History 47 (June 1987): 391–403.CrossRefGoogle Scholar

42 Alexandria Advertiser, 2 Aug. 1797; Alexandria Advertiser and Commercial Intelligencer, 12 Sept. 1801. For other examples in which both farm land and Alexandria town lots were sold on credit for bank notes see Alexandria Advertiser, 8 Sept. 1797; Columbian Mirror and Alexandria Gazette, 5 May 1798;Times and District of Columbia Daily Advertiser, 29 July 1801; Alexandria Advertiser and Commercial Intelligencer, 11 Sept. 1801, 17 May 1802, 11 Feb. and 28 Apr. 1803.

43 Alexandria Expositor, 27 Jan. 1806.

44 Ibid.; see also 19 Dec. 1805, Alexandria Legislative Petitions, LOV.

45 For example, of the nine original bank directors (see note 25), all but Wilson and Hodgson were original investors in the Potomac Company; see Crothers, “‘The Projecting Spirit,’” app. 2, 490–515.

46 General Meeting, 4 Aug. 1794, Records of the Potomac Company, Letter Book, 1785–1796, National Parks Service, Record Group 79; Meeting of Directors, 5 Apr. 1796, General Meeting, 8 Feb. 1799, Meeting of Directors, 17 Sept. 1802, 28 Oct. 1803, 10 Sept. and 13–14 Dec., 1804, General Meeting, 5 Aug. and Meeting of Directors, 7 Dec. 1805, Records of the Potomac Company, Proceedings, 1785–1807, National Parks Service, Record Group 79, National Archives, Washington, D.C. (hereafter NA). See also Crothers, “‘The Projecting Spirit,’” 103–167.

47 Meeting of Directors, 3 Dec. 1804, Little River Turnpike Company, Record Book, 1801–1812, LOV, 23; Alexandria Daily Advertiser, 10 Dec. 1804; Thompson to Bernard Peyton, 20 Nov. 1817, Little River Turnpike Company, Correspondence, Reports, etc., 1805, 1814, 1817, 1819–1833, LOV. See also Crothers, “‘The Projecting Spirit,” 168–231.

48 “Report of the Joint Commissioners, on the Navigation of the Potowmac River,” House and Journal Documents, 1822–23 (Richmond, Va., 1823), 16; 9 Dec. 1805, Fairfax County Legislative Petitions, 1776–1805, LOV; Alexandria Expositor, 27 Jan. 1806; Schweikart, Banking in the American South, 7. According to Robert E. Wright, banks in New York and Pennsylvania loaned their capital in the same broad fashion and played an equally crucial role in regional economic development; see Wright, “Banking and Politics in New York,” especially chaps. 12–14; and Wright, “Artisans, Banks, Credit, and the Election of 1800,” Pennsylvania Magazine of History and Biography 122 (July 1998): 211–239.

49 Alexandria Advertiser, 9, 10, 11, 12 (quote), 15 (quote) Jan. 1798; and Columbian Mirror and Alexandria Gazette, 13 Jan. 1798.

50 For a similar argument, see Edwin J. Perkins who contends that in 1790s “ideological conflicts over the legitimacy of private chartered banking were less pronounced than in the 1780s.” Though “partisan battles over banks continued at the state level … the debates typically addressed … practical matters, such as whether rival organizing groups backed primarily by Federalists or, alternatively, by Republicans could maneuver a charter bill through the legislature, and on what terms”; American Public Finance, 273–281 (quote 275). On the growing political differences of the late 1790s, see Buel, Richard, Securing the Republic: Ideology in American Politics, 1789–1815 (Ithaca, N.Y., 1972), 137–240Google Scholar; Rose, Lisle A., Prologue to Democracy: The Federalists in the South, 1789–1800 (Lexington, Ky., 1968), 139–291Google Scholar; Risjord, Chesapeake Politics, 506–572; and Beeman, Richard, The Old Dominion and the New Nation, 1788–1801 (Lexington, Ky, 1972), 119–236.Google Scholar

51 Lamoreaux and others have vividly demonstrated that favoritism in the allocation of credit was a common practice in early New England banks; see Lamoreaux, “Banks, Kinship, and Economic Development”; Lamoreaux, , Insider Lending: Banks, Personal Connections, and Economic Development in Industrial New England (New York, 1994), 11–83CrossRefGoogle Scholar; see also, Vatter, Barbara, “Industrial Borrowing by the New England Textile Mills, 1840–1860: A Comment,” Journal of Economic History 21 (June 1961): 216–220CrossRefGoogle Scholar; and Beveridge, “Local Lending Practice.”

52 Two of the proposed slates are clearly identifiable as Republican, two are Federalist, and two appear to be compromise slates. The Republican list of Jan. 12 proposed the following candidates: Samuel Craig, Richard Conway, Benjamin Dulany, George Gilpin, Wm. Herbert, John Janney Francis Peyton, J. T. Ricketts, and George Taylor. The Federalist list of Jan. 15 proposed Richard Conway, John Fitzgerald, George Gilpin, Wm. Herbert, Wm. Hodgson, James Patten, J. T. Ricketts, Jonah Thompson, and Wm. Wilson. The board of directors actually selected consisted of Richard Conway, John Fitzgerald, George Gilpin, Wm. Herbert, Wm. Hodgson, John Janney, James Patten, J. T. Ricketts, Jonah Thompson, and Wm. Wilson. Thus, the stockholders selected all nine of the Federalist candidates, while electing only five of the Republica candidates. More pointedly, of the five candidates to appear exclusively on the Republican slate (Craig, Dulany, Janney, Peyton, and Taylor), only one (Janney) was elected; see Alexandria Advertiser, 12, 15, 16, 17 Jan. 1798; Columbian Mirror and Alexandria Gazette, 13 Jan. 1798.

53 “Milo,” Alexandria Advertiser, 19 Mar. 1798.

54 5 and 16 Dec. 1799, Alexandria Legislative Petitions, LOV; see also “A Citizen,” Times and District of Columbia Daily Advertiser, 5 Oct. 1799. Similar petitions in support of the charter's extension were forwarded from Loudoun, Frederick, Berkeley and Augusta counties. These petitions emphasized “the better and more regular prices” which farmers received for their produce at Alexandria, and the ease with which bank notes could be converted into speciebecause of the bank. See 7, 16 Dec. 1799, Loudoun County Legislative Petitions, 1778–1806; 11 Dec. 1799, Frederick County Legislative Petitions, 1776–1805; 5, 7, 19 Dec. 1799, Berkeley County Legislative Petitions, 1776–1805; Dec. 1799, Augusta County Legislative Petitions, LOV.

55 “An Alexandrian,” Times and District of Columbia Daily Advertiser, 4 Oct. 1799; 19 Dec. 1799, Alexandria Legislative Petitions, LOV.

56 16 Dec. 1800, Alexandria Legislative Petitions, LOV; Alexandria Advertiser and Commercial Intelligencer, 14 and 26 Jan. 1801; Journal of the House of Delegates of the Commonwealth of Virginia … 1800 (Richmond, Va., 1800), 27, 41, 58, 60, 70, 71, 72, 75, 76; Shepherd, Statutes at Large, 2:292. The assembly chose 4 Mar. 1811 as the Bank of Alexandria's charter expiration date because the incorporating act of the Bank of the United States was to terminate on that date. After 1800 Alexandria came under the jurisdiction of Congress; the charter of the BUS stipulated that the federal government could incorporate no other bank during its life. Thus, if the Bank of Alexandria was to be renewed by Congress, it could not occur until 1811; see Cole, Banking in D.C., 22–23.

57 Alexandria Advertiser and Commercial Intelligencer, 5 Feb. 1801; Times and District of Columbia Daily Advertiser, 10 June 1801.

58 Riesman, “Republican Revisions,” 11–12; Riesman, “Federalist Political Economy,” 156–161; and Matson, “Capitalizing Hope,” 284; Alexandria Expositor, 30 Aug. 1804; see also ibid., 6 Dec. 1804.

59 Ibid., 23 Jan. 1804.

60 shepherd, Statutes at Large, 3:100–108. This was not thefirst attempt to establish a bank in Richmond. In 1792 the Virginia assembly incorporated the Bank of Richmond with a capital of $400,000. However, the institution never openedbecause it failed to attract enough subscribers. See “Legislative Petition of Sundry Merchants, Traders, Farmers, and Other Citizens of the Commonwealth,” Broadside, [Richmond], 1792; Hening, Statutes at Large, 13:599–607; Starnes, Sixty Years of Branch Banking, 24.

61 Alexandria Daily Advertiser, 10 Feb., 10 Mar., and 12 July 1804; Alexandria Expositor, 4, Mar., 23 June, 3 and 17 July 1804.

62 Alexandria Daily Advertiser, 28 July, 3 and 11 Aug. (text of petition) 1804; Alexandria Expositor, 26, 28 July, 3 Aug. 1804, and 25 Jan. 1805; Blodget, Samuel, Economica: A Statistical Manual for the United States of America (Washington, D.C., 1806), 161.Google Scholar Apparently, many northern Virginians accepted the bank supporters' arguments; the Fairfax petition was accompanied by petitions from Augusta, Culpepper, Fauquier, Hampshire, Loudoun, Prince William and Westmoreland counties, and the town of Alexandria; see Journal of the House of Delegates of the Commonwealth of Virginia … 1804 (Richmond, Va., 1804), 13, 15, 27, 63, 64, 96 (the vote was 85 to 50 against placing a branch outside Alexandria). See also Hills, Timothy J., “The Origins of the West End and the Little River Turnpike: Urbanization and Economic Change in Northern Virginia, 1780–1820,” (master's thesis, Washington State University, 1993), 68–70.Google Scholar

63 Alexandria Expositor, 23 Aug. and 9 Sept. 1805; Alexandria Daily Advertiser, 2 and 21 Aug. 1805; 6 Dec. 1805, Fairfax County Legislative Petitions, LOV.

64 For example, when Elizabeth Lee organized a “Virginia wedding” for her daughter, Portia, in 1799 she asked her relatives in Philadelphia topurchase many items, including the fabric for the wedding dress, and the “Bereau” and “Peanno Forte” for the dowry. Lee assured her relatives that “what ever is sent will be just the thing,” but stressed her desire that the items be procured “whilst” they were “to be had on good terms”; see Lee to Sarah Ann Collins, 7 Jan. 1799, Mrs. Charles Betty Moore Papers, 1758–1817, UVA. Washington also purchased many goods in Philadelphia rather than Alexandria in order to save expenses; see Wasnington to Tobias Lear, 7 Oct. 1791, Writings of Washington, 31:383–385; and Washington to James Anderson, 5 Feb. 1797, ibid., 35:383–385, where he wrote: “Spades, Shovels, Scythes, Nails, Nail rods, rods plates for the mould boards of Ploughs, Bar iron, and most other things can be had upon better terms here [Philadelphia] than in Alexandria.”

65 Journal of the House of Delegates of the Commonwealth of Virginia … 1805 (Richmond, Va., 1805), 11, 28, 29, 35. Fauquier, Frederick, Hampshire, Jefferson, Loudoun, Prince William, Stafford, and Westmoreland counties all sent petitions. On the conservative management of the bank in its early years see Starnes, Sixty Years of Branch Banking, 37–40.

66 Alexandria Daily Advertiser 17 Aug. 1804.

67 Alexandria Daily Advertiser, 17, 27, 30 (articles of association) July 1804; Alexandria Expositor, 16, 27, 31 July 1804.

68 Alexandria Daily Advertiser, 30 July 1804; Alexandria Expositor, 31 July 1804.

69 The question of when limited liability was extended to the shareholders of chartered banks remains unsettled in the historical literature. Hammond, forexample, raises the issue only in passing, remarking that “personal liability became established only in subterranean fashion with almost no formal advocacy and with verylittle formal recognition”; Banks and Politics, 654. Davis explicitly states that early corporations bestowed limited liability upon investors, though he remarks that investors in the Bank of North America remained uncertain whether they enjoyed such privileges; History of American Corporations, 1:5, 2:45. Adams argues that the managers and investors of private banks exercised “greater caution in lending”than the directors of chartered institutions because of their “personal liability”; Finance and Enterprise, 5. Surveying this historical and historiographical confusion, Perkins concludes that most early banks lacked “de jure” legal protection until the 1820s, but “de facto, American investors” were rarely “exposed to … personal liability.” “In practice … few creditors of failed U.S. banks … ever succeeded in recovering even a portion of their losses by proceeding against the personal assets of stockholders”; American Public Finance 116–117, 373–376. See also Fenstermaker, American Commercial Banking, 23; and Oscar and Handlin, Mary F., “Origins of the American Business Corporation,” Journal of Economic History 5 (May 1945): 1–23.CrossRefGoogle Scholar

70 On shareholders'; limited liability in the Alexandria bankcharter, see Hening, Statutes at Large, 13:596.

71 National Intelligencer and Washington Advertiser, 24 Aug. and Oct. 1804. The articles were reprinted in the Alexandria Expositor, 30 Aug. and 60ct. 1804. The article printed in October was actually written 29 August, but the editorof the Intelligencer delayed its publication because he did not want to unduly influence those considering subscribing to the bank.

72 Alexandria Daily Advertiser, 28 Aug. 1804. The legislature passed the law against private notes in 1785, intending to end the circulation of Robert Morris's personal notes; see Hening, Statutes at Large, 12:166–167.

73 Alexandria Daily Advertiser, 28 Aug. 1804. Samuel Blodget made a similar argument in defense of the Bank of Potomac; see National Intelligencer and Washington Advertiser, 19 Sept. 1804. See also Riesman, “Federalist Political Economy,” 160–161.

74 Alexandria Daily Advertiser, 6, 8, 13 Sept., 1 Dec. 1804, 1Apr., 6 May, 8 Nov. 1805; Alexandria Expositor, 8, 14, 17 Sept. 1804, 20 Mar., 3 May, 8 Nov. 1805; “District of Columbia Banks,” American State Papers, Miscellaneous, 2:46. The original directors were Jacob Hoffman, Elisha Janney, Cuthbert Powell, John G. Ladd, William Hartshorne, James Patton, James H. Hooe, Joseph Riddle, James Keith, Jr., William Fitzhugh, William Hodgson and Robert Young. Thomas Vowell served as the first president. All but William Fitzhugh wereprominent Alexandria merchants.

75 Shepherd, Statutes at Large, 3:122; Journal of the House, 1804, 12, 73, 75, 92, 96, 103; Alexandria Expositor, 25 Jan. and 16 Feb. 1805.

76 9 Dee. 1805, Fairfax County Legislative Petitions, LOV. The following petitions were attached to the Fairfax County petition: 4 Dec. 1805, Fauquier County; 5 Dec. 1805, Prince William County; 9 Dec. 1805, Shenandoah County. See also 11 Dec. 1805, Frederick County Legislative Petitions; 9 Jan. 1806, Loudoun County Legislative Petitions; and 9 Jan. 1806, Miscellaneous Legislative Petitions, 1782–1823, LOV; Journal of the House of Delegates, 1805, 68 (which identifies the seventh county as Augusta).

77 19 Dec. 1805, Alexandria Legislative Petitions, LOV.

78 Journal of the House of Delegates, 1805, 7, 33, 36, 49, 55, 57, 59, 60, 62, 64, 65, 68; Alexandria Expositor, 23 and 27 Jan. 1806; Powell to Burr Powell, 22 Jan. 1805, “The Leven Powell Correspondence,” The John P. Branch Historical Papers of Randolph-Macon College 1 (June 1901–1903), 252–253.

79 “District of Columbia Banks,” American State Papers, Miscellaneous, 2:45–47, 147; The Statutes at Large of the United States of America, 1789–1845, 8 vols. (Washington, D.C., 1845), 2:621.

80 Walsh, Early Banks in D.C., 134–139, 152–154; Cole, Banking in D.C., 37–52. Banking capital in Alexandria in 1820: American State Papers, Finance, 3:304, 648–649. The five new banks were the Farmers Bank of Alexandria (1811), the Mechanics Bank of Alexandria (1812), the Merchants Bank of Alexandria (c. 1813), the Franklin Bank of Alexandria (1817), and the Union Bank of Alexandria (1817).

81 William Gouge was the most prominent antebellum critic; see History of Paper Money and Banking; Walsh, Early Banks in D.C., 55–58, 131; Cole, Banking in D.C., 532, 533.

82 Alexandria Daily Advertiser, 11 Sept. 1804.