It was during the Pontiac War that Governor James Hamilton, in reply to earnest appeals for help and protection, said he could give the frontiersmen no aid whatever. Neither the Governor nor the Assembly showed the proper spirit. It was a time when the tomahawk, the scalping knife and the torch were desolating the frontiers of the Province.

The Indians set fire to houses, barns, corn, hay, in short, to everything that was combustible, so that the whole frontier seemed to be one general blaze. Great numbers of back inhabitants were murdered in the most shocking manner and their dead bodies inhumanly mangled.

Paxtang, near what is now Harrisburg, became truly the frontier, for west of the Susquehanna so great was the terror that scarcely an inhabitant was left. At this juncture the Reverend John Elder, the revered pastor of the Paxton Presbyterian Church, at Paxtang, organized his rangers under authority of the Provincial Government. They were mostly members of his own and the Hanover congregations.

These brave men were ever on the alert, watching with eagle eye the Indian marauders. The Paxtang rangers were truly the terror of the red men, swift on foot, excellent horsemen, good shots, skillful in pursuit or in escape, dexterous as scouts, and expert in maneuvering.

In August, 1763, Colonel John Armstrong, the “hero of Kittanning,” with 200 Paxtang and Hanover rangers and some soldiers from Cumberland County, marched to the Indian town at Great Island (now Lock Haven). Several skirmishes were fought, and some killed in the Muncy Hills. These volunteers returned home enraged at learning that the Conestoga Indians had sent messengers to inform their friends of the expedition.

Subsequently, on September 9, 1763, the rangers who were scouting in Berks County, were apprised by their out-scouts of the approach of Indians. The savages intended to take the rangers by surprise, and during a short engagement, it was discovered these Indians were from the Moravian settlement in Northampton County. The “Paxtang Boys” were determined to ascertain the treacherous.

In October occurred the murder of the Stinson family and others; the Paxtang men solicited their colonel to make an excursion against the enemy. The first massacre at Wyoming occurred October 15. Two companies in command of Captain Lazarus Stewart and Captain Asher Clayton were sent by Colonel Elder to Wyoming. Upon their arrival they learned first handed of the awful outrages committed by the bloodthirsty savages under “Captain Bull.”

Indians had been traced by these scouts to the wigwams at Conestoga, and some to those of the Moravian Indians at Nain and Wichetunk. The rangers insisted on captivating the murderers but the merciful colonel dissuaded them. It was then that Colonel Elder advised Governor Hamilton to remove the Indians from Conestoga.

Colonel Timothy Green wrote to the Governor: “We live in daily fear of our lives. At the Indian town the incarnate devils are secreted, and the people here demand that those Indians be removed from among us.”

John Harris wrote: “I hope Your Honor will be pleased to cause these Indians to be removed to some other place, as I don’t like their company.”

Governor Penn replied: “The Indians of Conestoga have been misrepresented as innocent, helpless and dependent on this Government for support. The faith of this Government is pledged for their protection. I cannot remove them without adequate cause.”

The rangers resolved on taking the law into their own hands. The destruction of the Conestoga Indians was not then projected. That was the result. Colonel Elder approved the capture of the most notorious Indians.

The “Paxtang Boys” reached the Indian settlement about daybreak, when the barking of a dog made their approach known. The Indians rushed from their wigwams, brandishing their tomahawks. This show of resistance was sufficient excuse for the rangers to make use of their guns.

In a few minutes every Indian fell before the unerring fire of the brave frontiersmen. Unfortunately a number of Indians were absent from Conestoga, prowling about the neighboring settlement.

Soon as this attack was known some Indians were placed in the Lancaster workhouse and several, well known to Parson Elder’s scouts, were hurried to Philadelphia, where they were secreted among the Moravian Indians protected in that city.

Governor Penn did not act with dispatch in removing the Indians from Lancaster, nor did he seem to care for them.

The “Paxtang Boys” realized their work was only half done. Captain Stewart proposed they capture the principal Indian outlaw, in the Lancaster workhouse, and take him to Carlisle jail, where he could be held for trial. This plan was heartily approved and fifty of the “Paxtang Boys” proceeded to Lancaster on December 27, broke into the workhouse, and but for the show of resistance would have effected their purpose.

But the rangers were so enraged at the defiance of the Indians that before they could be repressed the last of the so-called Conestoga Indians had yielded up his life. In a few minutes the daring rangers were safe from pursuit.

The excitement throughout the Province was great. No language could describe the outcry which arose from the Quakers in Philadelphia, or the excitement along the frontiers.

Fears were entertained for the safety of the Moravian Indian converts, and they were removed to Philadelphia and lodged in the city barracks.

This open and avowed protection of the Indians exasperated the frontiersmen, and they started for Philadelphia with the avowed purpose of killing the Indians and punishing the Quakers.

The city was greatly alarmed. Military companies were organized. Even the staid, reverent, peaceful Quakers shouldered guns and drilled. The wildest rumors were current as to the numbers and anger of the Scotch-Irish.

But the “Paxtang Boys” when they learned the effective measures for protection taken in the city, halted their march at Germantown. A delegation of leading men composed of Benjamin Franklin, Israel Pemberton and Joseph Galloway was sent by Governor Penn to meet the insurgents and hear their grievances.

The “Paxtang Boys” presented their side, and left a committee consisting of Captain Matthew Smith, afterward vice president of the State, and James Gibson, to accompany the Provincial Commissioners to Philadelphia, where they met the Governor and the Assembly, to whom they presented their grievances in the form of a declaration. The remaining members of the party returned to their homes, and the inhabitants of the city to their peaceful avocations. And thus ended the “Paxtang Boys’ Insurrection.”

So soon as the idea of independence had taken the practical shape of a resolution and declaration adopted by the Continental Congress, the Americans began to contemplate the necessity of foreign aid, material and moral. Congress appointed a Secret Committee of Correspondence for the purpose and sent Silas Deane, of Connecticut, upon a half-commercial, half-diplomatic mission to France.

Franklin was at first opposed to seeking foreign alliances. “A virgin state,” he said, “should preserve the virgin character, and not go about suitoring for alliance, but wait with decent dignity for the application of others.”

But Franklin soon became chief suitor in Europe.

Later in the autumn of 1776 Dr. Franklin was sent by the Continental Congress as a diplomatic agent to France. He sailed in the ship Reprisal. The passage occupied thirty days during which that vessel had been chased by British cruisers and had taken two British brigantines as prizes.

Franklin landed at Nantes, December 7. Europe was not prepared for his arrival, having had no advance notice of his coming and the event was in consequence one of great surprise. By this time Franklin’s fame was world-wide.

The courts were filled with conjectures, and in England the story was current that Dr. Franklin was a fugitive for his own personal safety. Burke said, “I never will believe that he is going to conclude a long life, which has brightened every hour it has continued, with so foul and dishonorable a flight.”

On the Continent it was concluded that he was in Europe on a most important mission. To the French he spoke frankly, saying that twenty successful campaigns could not subdue the Americans, that their decision for independence was irrevocable and that they would be forever independent states.

On the morning of December 28, Franklin, with the other commissioners—Silas Deane, of Connecticut, and Arthur Lee, of Virginia—waited upon Vergennes, the French Minister of Foreign Affairs, when he presented the plan as suggested by the Continental Congress for a treaty, by which it was hoped the states might obtain their independence.

The Commissioners were instructed to press for an immediate declaration of the French Government in favor of the Americans. Knowing the desire of the French to widen the breach and cause a dismemberment of the British Empire, the Commissioners were to intimate that a reunion of the Colonies with Great Britain might be the consequence of delay.

Vergennes spoke of the attachment of the French nation to the American cause and requested a paper from Dr. Franklin upon the condition of America and that in the future intercourse with the sage might be in secret, without the intervention of a third person. Personal friendship between these two distinguished men became strong and abiding.

The French Minister told Franklin that as Spain and France were in perfect accord, he might communicate freely with the Spanish Minister, the Count de Aranda.

With him Franklin, Deane and Lee held secret but barren interviews, for Spain was quite indifferent. Aranda would only promise the freedom of Spanish ports to American vessels.

As for France, she was at that time unwilling to incur the risk of war with Great Britain, but when the defeat and surrender of Burgoyne was made known at Versailles late in 1777, and assured thereby that the American Colonies could help themselves, the French Court was ready to listen to Franklin. To him was chiefly due the successful negotiation of the treaty of alliance which meant so much to the American cause at that critical period in the War for Independence.

The presence of an agent of the British Ministry in Paris, on social terms with the American Commissioners, hastened the negotiations, and February, 1778, two treaties were secretly signed at Paris by the American Commissioners and the Count de Vergennes on the part of France. One was a commercial agreement, the other an alliance contingent on the breaking out of hostilities between France and Great Britain.

It was stipulated in the treaty of alliance that peace should not be made until the mercantile and political independence of the United States should be secured.

Franklin continued to represent the States in France until 1785, when he returned home. He took an important part in the negotiations for peace. In 1786 he was elected Governor of Pennsylvania; and, in 1787 he was the leading member in the convention which framed the National Constitution.

Dr. Franklin had deserved confidence in his ability and honesty. To Silas Deane was intrusted the receipt and expenditure of money by the Commissioners to France. The jealous, querulous Arthur Lee, who was the third Commissioner, soon made trouble.

Lee wrote letters to his brother in Congress (Richard Henry Lee), in which he made many insinuations against both his colleagues. Ralph Izard, of South Carolina, Commissioner to the Grand Duke of Tuscany, who felt offended because he was not consulted about the treaty with France, when he also was in Paris, sent home similar letters to those of Lee.

William Carmichael, of Maryland, a secretary of the Commissioners, who had returned to Philadelphia, insinuated in Congress that Deane had appropriated the public money to his own use. Deane was recalled.

Out of this incident sprang two violent parties. Robert Morris, of Philadelphia, and other members of Congress, who were commercial experts, took the side of Deane, and Richard Henry Lee, then chairman of the Committee on Foreign Affairs, opposed him.

Deane published in the Philadelphia Gazette an “Address to the People of the United States,” in which he referred to the brothers Lee with much severity and claiming for himself the credit of obtaining supplies from France through Beaumarchais. Thomas Paine replied to Deane, making use of public documents in his charge.

The statement called out loud complaints from the French Minister and Paine’s indiscretion cost him his place as secretary of the Committee on Foreign Affairs.

This discussion among diplomatic agents soon led to the recall of all of them except Franklin, who remained sole Minister at the French Court.

Franklin testified to Deane’s strict honesty and private worth, but Arthur Lee had the ear of Congress, and Deane had to suffer. He died in obscurity and poverty at Deal, England, August 23, 1789. He has since been vindicated and all unjust suspicions have been removed, thus confirming the judgment of the wise Franklin.

From Franklin’s advent in the French Court, December 28, 1776, until he sailed for his home in Philadelphia, in 1785, he was held in the high esteem which his talents, experience and personality entitled him.

Governor Robert Hunter Morris summoned the Provincial Assembly for November 3, 1755, when he laid before them an account of the depredations committed by the enemy, and demanded money and a militia law.

Petitions began to pour in from all parts of the Province; from the frontier counties praying for arms and munitions; from the middle counties, deprecating further resistance to the views of the Governor, and urging, if necessary, a sacrifice of property for the better defense of their lives. All wished that the religious scruples of the members of the Assembly might no longer prevent the better defense of the Province.

By the middle of November, and while the Assembly was receiving these petitions, the Indians entered the passes of the Blue Mountains and broke into the Counties of Lancaster, Berks and Northampton, committing murder, devastation and every other kind of horrid mischief, and yet the Assembly debated and debated the measures for defense.

The Governor, wearied with this delay, sent a message requesting the Assembly to strengthen his hands and afford assistance to the back inhabitants, but this time they made the excuse that in so doing they might alienate the affections of the Indians, and to a large degree refused to grant the means necessary for the protection of the frontiers. This was truly an unfortunate position.

But at this time the alarming news of Braddock’s defeat reached the proprietaries in England, and they came forward with a donation of £5000 for defense, to be collected from arrears in quit-rents; but they refused to grant it on any other ground than as a free gift. The Assembly waived their rights for a time, in consideration of the distressed state of the Province, and passed a bill to strike £30,000 in bills of credit, based upon the excise. This bill was approved by Governor Morris.

The population of the Province was not yet satisfied with the cold indifference of the Assembly at such a crisis and throughout all the counties there were indignant protests. Public meetings were held throughout Lancaster and the frontier counties, at which it was resolved that the people should “repair to Philadelphia and compel the provincial authorities to pass proper laws to defend the country and oppose the enemy.”

In addition, the dead bodies of some of the murdered and mangled were sent to Philadelphia and hauled about the streets with placards announcing that they were victims of the Quaker policy of nonresistance.

A large and threatening mob surrounded the House of Assembly, placed the dead bodies of their neighbors in the doorway and demanded immediate relief for the people of the frontiers. Such indeed were the desperate measures resorted to in their effort to obtain better defense.

One of the results of these demonstrative measures and the protests of the people was the erection of a chain of forts and block-houses. These were designed to guard against the Indian incursions and were erected by the Province, at a cost of £85,000.

This chain extended from along the Kittatinny Hills, near where Stroudsburg now stands, southeasterly through the Province, to the Maryland line. They were constructed at the important passes of the mountains and at important places, almost equi-distant, so that they would the better serve as havens of refuge when attacked suddenly.

These forts were garrisoned by troops in the pay of the Province, twenty to seventy-five men always under the command of a commissioned officer. Even the Moravians at Bethlehem cheerfully fortified their town and took up arms in self-defense.

Benjamin Franklin and James Hamilton were selected to repair to the forks of the Delaware and raise troops for the execution of the plan. They arrived at Easton, December 29, and appointed William Parsons to be major of the troops to be raised in Northampton County.

In the meantime Captain Hays, with his company from the Irish Settlement, in that county, had been ordered to New Gnadenhutten, which had recently been the scene of an Indian raid, in which they applied the torch, many being burned to death and others escaped to Bethlehem in their nightclothes in the cold winter air.

The troops erected a temporary stockade and a garrison was placed there to guard the Brethren’s mills, which were filled with grain, and to protect the few settlers who had the hardihood to return and again settle there.

Captain Hay’s detachment was attacked on New Year’s Day, 1756, while some of the troops were amusing themselves skating on the ice of the river, near the stockade. They noticed some Indians in the distance and thinking it an easy matter to capture or kill them the soldiers gave chase, and rapidly gained on these Indians, who proved to be decoys skilfully maneuvering to draw the untrained Indian fighters into an ambuscade.

After the troops had gone some distance a party of Indians rushed out behind them, cut off their retreat and, falling upon them with great fury, as well as with the advantage of surprise and superior numbers, quickly dispatched them. Some of the soldiers, remaining in the stockade, filled with terror by the murder of their comrades, deserted, and the few remaining thinking themselves incapable of defending the place, withdrew.

The savages then seized upon such property as they could use and set fire to the stockade, the Indians’ houses and the Brethren’s mills. Seven farm houses between Gnadenhutten and Nazareth were burned by those same Indians, who also murdered such of the people as they discovered.

This incursion was the inception of Fort Allen. It seems that “it was the intention to build a fort at New Gnadenhutten, and Colonel Franklin started to Bethlehem to carry that plan into operation.”operation.” But the situation required him to change his plans and he marched to what is now Weissport, in Carbon County, and there erected Fort Allen. The site of this provincial fort is now occupied by Fort Allen Hotel. The old well is still in existence.

The Assembly requested Franklin’s appearance and when he responded to this call he turned his command over to Colonel William Clapham.

It is interesting to note that the chain of forts began with Fort Dupui, built on the property of Samuel Dupui, a Huguenot settler, in the present town of Shawnee, on the Delaware River, five and one-half miles from the present town of Stroudsburg. Then Fort Hamilton was built on the present site of Stroudsburg, where Fort Penn was also in the eastern part of the town. These forts were in the heart of the territory which the Minsink, or Munsee, Indians occupied.

Fort Norris came next in the chain and was near Greensweig’s, Monroe County, and fifteen miles west was Fort Allen, and then Fort Franklin, in Albany Township, Berks County, and nineteen miles west was Fort Lebanon, also known as Fort William, about a mile and a half from the present town of Auburn, a short distance from Port Clinton. The next in the chain was the small fort at Deitrick Six’s, then Fort Henry; then Fort Swatara, both described in former stories, and then Fort Hunter, six miles above Harrisburg, and Fort Halifax, both on the Susquehanna River.

Crossing the river was Fort Patterson, in the Tuscarora Valley, opposite Mexico, Juniata County; Fort Granville, near Lewistown; Fort Shirley, near Aughwick Creek; Fort Lyttleton, at Sugar Cabins, and Fort McDowell, in Franklin County, the last of the line in the Province of Pennsylvania.

The dispute over the boundary of the province on the south began with the acquisition of the charter and continued through the life of William Penn and his descendants, until almost the end of Proprietary Government in Pennsylvania.

Charles Calvert, the fifth Lord Baltimore, drew an agreement, defining the boundaries between Maryland and Delaware and Maryland and Pennsylvania. On May 10, 1732, John and Thomas Penn agreed to this and signed the instrument. John Penn and Lord Baltimore then came to America, and, Baltimore changed his mind and caused every possible delay in having a survey made of this disputed line.

Commissioners had been appointed by both governments and they did nothing but wrangle for the eighteen months allowed in the agreement, and Baltimore believed this made it of no effect.

The Penn family won in court and the conduct of Baltimore was censured.

Frederick, the sixth Lord Baltimore, declined to be bound by any act of his predecessors, and again many years were wasted.

In 1760 a new agreement was made which was practically identical with the one of 1732. Commissioners on the part of Pennsylvania were the Governor, James Hamilton, Richard Peters, Reverend Dr. Ewing, William Allen, William Coleman, Thomas Willing, Benjamin Clew, and Edward Shippen, Jr., a selection which assured good and faithful performance.

The first three years were spent by the surveyors employed in marking the lines of Delaware. The circle around New Castle was drawn by David Rittenhouse, and added much to his reputation.

This work proceeded too slowly and on August 4, 1763, Thomas and Richard Penn, and Frederick, Lord Baltimore, then being together in London, agreed with Charles Mason and Jeremiah Dixon, two well known English astronomers, “to mark, run out, settle, fix, and determine all such parts of the circle, marks, lines, and boundaries, as were mentioned in the several articles or commissions, and were not yet completed.”

Mason and Dixon arrived in Philadelphia, November 15, 1763, and forthwith engaged in work.

They began their survey by ascertaining the latitudelatitude of the southernmost part of the City of Philadelphia, which they agreed was the north wall of the house then occupied by Thomas Plumstead and Joseph Huddle, on the south side of Cedar Street. They determined it was 39° 56' 37.4”. This was ascertained December 30, 1763, and the actual survey of the boundary line properly began on this date.

During January and February, 1764, they measured thirty-one miles westward of the city to the forks of the Brandywine, where they planted a quartzose stone, six miles west of the meridian of the court house in West Chester.

With this stone as a fixed point they determined the point from which they should start to run the horizontal line of five degrees longitude to fix the southern boundary. This was of course the northeast corner of the State of Maryland.

From this point they extended the line 230 miles, eighteen chains, and twenty-one links, or 244 miles, thirty-eight chains, and thirty-six links, from the Delaware River. This was done during 1766 and 1767.

The Indians could not understand the object of an exploring expedition that spent every clear night gazing at the stars through big guns, and they soon stopped their progress. The Penns used their influence with the Indians and the work proceeded.

The western extremity of Maryland was reached and passed, and the astronomers were encamped on the banks of the Monongahela, when the Indians again interposed. Their attitude was so threatening that many of the servants and workmen of the expedition deserted. But the great delight and satisfaction of running an astronomical line through primeval forests raised Mason and Dixon above all fears, and they pressed on to the Warrior Branch of the great Catawba Indian trail.

This was on the borders of a stream called Dunkard Creek, about the middle point on the southern boundary line of the present Green County. Here the Indians took such a menacing stand that Mason and Dixon were obliged to return, and their Dunkard Creek trail, or Warrior trail, remained the terminus of their line for many years.

This Mason and Dixon’s line was a great achievement in that day, and a new thing in science. These two modest but skillful men had made themselves immortal. Their line was not marked by river, creek or even mountain range, it was an imaginary one. At every fifth mile a stone was set up marked on the northern side with the arms of the Penns and on the southern side with the arms of Baltimore, each intermediate mile was marked with stones having P. on the one side and M. on the opposite side.

This line, fixed after nearly a hundred years of conflict, is more unalterable than if nature had originally made it. It became the boundary line between the great sides of the slavery question, and divided the armies of the North and South in the great Civil War.

The interference of the Indians having arrested further work, Messrs. Mason and Dixon returned to Philadelphia, where they reported to the commissioner, and on December 26, 1767, received an honorable discharge.

There were many minor disturbances occasioned by this line, and the actions of the rough border population were slow to become satisfied. A surveyor’s transit or astronomy was not enough to determine the limits of their civil pride. These people had grown accustomed to the temporary lines which had been run about 1740, which was about one-quarter of a mile above the true one, and they became as much excited over that narrow strip as they had been when they hoped to penetrate miles into Pennsylvania.

The government of Pennsylvania determined to acquire its rightful jurisdiction and in 1774, a proclamation was issued, which has generally been considered the final act in the boundary controversy.

The residue of the southern boundary, a little less than twenty-two miles, was run in 1782 by Robert Andrews, Andrew Ellicott, John Ewing, David Rittenhouse, and John Hutchins, and completed and permanently marked in 1784.

Congress again assembled in Philadelphia on July 2, 1778, and on the 9th the “Articles of Confederation,” engrossed on parchment, were signed by the delegates of eight States.

Pennsylvania was one of those states which immediately acceded to the Confederation. The delegation from this State consisted of Benjamin Franklin, Robert Morris, Daniel Roderdeau, Jonathan Bayard Smith, James Smith, of Yorktown; William Clingan and Joseph Reed.

The “Articles of Confederation” were submitted to the several State Legislatures. Slowly the States ratified them, some of them pointing out serious defects, and all taking time to discuss them. The first State to ratify, in addition to the eight which immediately signed, was North Carolina, July 21, but Maryland steadily refused until March 1, 1781, when the League of States was perfected.

It was soon perceived that under this new Government the Congress had no power, independent of the several States, to enforce taxation.

Robert Morris, then Superintendent of Finance (Secretary of the Treasury), proposed the establishment of a bank in Philadelphia, to supply the Government with money, with a capital of $400,000.

The promissory notes of the bank were to be a legal tender of currency, to be received in payment of all taxes, duties and debts due the United States.

But before Congress could act the patriotic citizens of Philadelphia moved for the establishment of a bank by which means the soldiers in the Continental Army could be supplied with provisions.

A plan for this bank was prepared in Philadelphia which set forth the entire scheme of subscription and operation, down to the minutest detail, even stating that the factor (cashier) “shall provide his store with rum, sugar, coffee, salt and other goods at the cheapest price to those who supply him with provisions, that he may gain a preference of what comes to market.” The provisions were to be purchased for the army in the field.

This plan named the original board of inspectors, Robert Morris, J. M. Nesbitt, Blair M'Clenachan, Samuel Miles and Cadwallader Morris. The two directors were John Nixon and George Clymer and the factor was Tench Francis.

The subscription list was headed:

“Whereas, in the present situation of public affairs in the United States, the greatest and most vigorous exertions are required for the successful management of the just and necessary war in which they are engaged with Great Britain; We, the subscribers, deeply impressed with the sentiments that on such an occasion should govern us, in the prosecution of a war, in the event of which, our own freedom and that of our posterity and the freedom and independence of the United States are all involved, hereby severally pledge our property and credit for the several sums specified and mentioned after our names, in order to support the credit of a bank to be established for furnishing a supply of provisions for the armies of the United States; and we do hereby severally promise and engage to execute to the directors of the said bank bonds of the form hereunto annexed.

“Witness our hands the 17th day of June, in the year of our Lord, 1780.”

There were ninety-two original patriot subscribers, the total pledges of whom amounted to £300,000 Pennsylvania currency, payable in gold or silver.

Robert Morris and Blair McClenachan each subscribed £10,000; Bunner, Murray & Co., £6000; Tench Francis, £5500; James Wilson, George Clymer, William Bingham, J. M. Nesbitt & Co., Richard Peters, Samuel Meredith, James Mease, Thomas Barclay, Samuel Morris, Jr., John Cox, Robert L. Hooper, Jr., Hugh Shiell, Samuel Eyre, Matthew Irwin, Thomas Irwin, John Philip De Haas, Philip Moore, John Nixon, Robert Bridges, John Benezet, Henry Hill, John Morgan, Samuel Mifflin, Thomas Mifflin, Thomas Willing and Samuel Powell, each subscribed £5000.

None of the subscribers pledged less than £1000, and it is a question if ever a more liberal list of patriots could be found anywhere than this one.

This bank opened its doors on July 17, 1780, in Front Street, Philadelphia, two doors above Walnut.

To show the mode of doing business an old advertisement says: “All persons who have already lent money are desired to apply for bank notes; and the directors request the favor of those who may hereafter lodge their cash in the bank, that they would tie it up in bundles of bills of one denomination, with labels, and their names indorsed, as the business will thereby be done with less trouble and much greater dispatch.”

The bank continued in operation till the establishment of the Bank of North America, December 31, 1781, and was the first banking institution in America.

The plan for the bank for the Government was approved by the Continental Congress, May 26, 1781, and this financial agent of the Government was chartered by the Congress December 31, 1781. The capital stock was divided into shares of $400 each, in money of gold and silver, to be procured by subscriptions.

Twelve directors were appointed to manage the affairs of the bank, which was entitled by the Congress “The President, Directors and Company of the Bank of North America.”

Alexander Hamilton, observing the prosperity and usefulness to the commercial community and the financial operations of the Government of the Bank of North America, in Philadelphia, and of the Bank of New York, and the Bank of Massachusetts, which were afterward established, and which three banks held the entire banking capital of the country before 1791, recommended the establishment of a Government bank in his famous report on the finances (1790), as Secretary of the Treasury.

Hamilton’s suggestion was speedily acted upon, and an act for the purpose was adopted February 8, 1791.

President Washington asked the written opinion of his Cabinet concerning its constitutionality. They were equally divided. The President, believing it legal, signed the bill.

The bank was named “The United States Bank” and its charter limited to twenty years.

This bank was soon established, with a capital of $10,000,000, of which amount the Government subscribed $2,000,000 in specie and $6,000,000 in stocks of the United States.

The measure was very popular. The shares of the bank rose to 25 and 45 per cent premium, and it paid an average dividend of 8½ per cent on its capital. The shares were $400 each, same as the Bank of North America.

The United States Bank was chartered February 25, 1791, and established at Philadelphia, with branches at different points. Its charter expired without renewal March 4, 1811.