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Jacob Barker to Benjamin F[ranklin] Butler, 5 January 1818

Dear Sir

Your favor of the 2d is at hand. The Bill for 2000$ it appeared had been paid. I am much obliged by the assistance you have rendered the Cashier. The business could not have been better managed. I wish to make an arrangement to supply the Washington & Warren Bank with specie in case of need without the least idea of its ever being necessary to act on the arrangement. I wish you to confer with Mr. Olcott & see whether he will engage & to what extent to furnish you with specie at a moments warning for your drafts on me at sight he, at all times at liberty to require me to send specie forthwith from Newyork for the amount of such drafts instead of paying them here. please If you cannot make this arrangement with him please ascertain if you can do it with any other Cashier in Albany or Troy & inform me the result. Ten or fifteen thousand would be the extent of any arrangement I would wish to make and if you cannot make any please inform me how much you suppose you could raise in case of necessity either by having Exchange Bank notes to dispose of or by drawing on me, and in either case I should wish the transaction kept a secret as it would only happen in case the Bank should be run upon. When it ought not to be known that aid from any quarter except its own vaults was necessary, I do not believe the Bank will ever be run upon if it is, it will be by some Northern Bank which would require a funds & expence which either would not be very convenient or agreeable to them however much they might dislike the Bank and they cannot do any thing without possessing themselves of our Bills which it will take a long time to collect to any considerable amount. I should like to make an arrangement with the Farmers & Mechanics Bank to keep an account with the Washington & Warren Bank. State an Interest % at Seven pr ct per annum twice a year for them to redeem all the Bills of the Washington & Warren Bank which are made payable in the City of NewYork, but not the others, as soon as they reach $500 to be made up in a package charged as a Check and held subject to the order of the Washington & Warren Bank & whenever the Balance should appear against said Bank to the amount of 5000$ the Cashier, to be at liberty to draw on me at sight for the whole balance or to require me to deposit the whole Balance in specie within ten days from the time he puts such notice into the post office at Albany and repeated as often as the balance should reach 5000$. This arrangement to be terminated by either on giving the other 30 days notice. I calculate that the balance would generally be in favor of the Washington & Warren Bank as it would commence by a deposit & would deposit from time to time as it might find convenient without waiting to be called upon. If the Farmers & Mechanics Bank agree to this arrangement, it will supersede the necessity of making a specie arrangement as you could at once procure the requisite amount of specie for the Washington & Warren notes if they were at all times redeemed by a Bank in Albany by depositing such notes & drawing the notes of the Albany Bank & then obtaining specie for the Albany notes always taking care not to get the specie from the Bank that was friendly unless perfectly convenient to them to pay it. You had better not mention the subject of specie to any one not even your friend Mr. Olcott unless you should fail in making the other arrangement of keeping an Interest <%> <pd>. I am sorry to give you so much trouble but we shall have the Bank under full sail in a few days when it will require but little nursing. I shall tomorrow put in circulation some of its paper, the amount for a time of necessity be limited as it is very difficult to get up a large and beneficial circulation for a new Bank. 

At the close of the year I committed to the flames nearly all the tickets I had issued & do not issue any more. Consequently do not care how soon they pass a law prohibiting their use. The evil having cured itself I should suppose no person would think it worth which to propose a law. You will observe by the newspapers that I intend applying to the Legislature at their next session for an Act of Incorporation for the Exchange Bank which I suppose will be granted without objection especially if they should think of passing any law prohibiting private Banking. I cannot believe that any such law will be passed but it is nearly as bad for me to have it proposed and debated every year, as for them to pass a law. For a Bank to succeed well it requires to go on smoothly without attracting much attention or creating any excitement in the community. If I could be satisfied that the subject would not be again brought before the Legislature I should be quite as well pleased to go on as I am as to have an act of Incorporation. I expect to be in Albany before any decision is had upon the subject when I will confer with your man at large. 

With esteem I am

yr assd friend

Jacob Barker

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Source: N New York State Library
Collection: Benjamin Franklin Butler Papers (N)
Series: Series 3 (17 February 1815-2 December 1821)