657. BANK (National 1813), Increased Medium and.—
Let us examine these causes
and proofs of the want of our increase of medium,
one by one. 1. The additional industry
created to supply a variety of articles
for troops, ammunition, &c. Now, I had always
supposed that war produced a diminution
of industry, by the number of hands
it withdraws from industrious pursuits for
employment in arms, &c., which are totally
unproductive. And if it calls for new industry
in the articles of ammunition and other
military supplies, the hands are borrowed
from other branches on which the demand is
slackened by the war; so that it is but a shifting
of these hands from one pursuit to another.
2. The cash sent to the frontiers occasions a
vacuum in the trading towns, which requires
a new supply. Let us examine what
are the calls for money to the frontiers. Not
for clothing, tents, ammunition, arms, which
are all bought in the trading towns. Not for
provisions; for although these are bought
partly in the immediate country, bank bills
are more acceptable there than even in the
trading towns. The pay of the army calls
for some cash, but not a great deal, as bank
notes are as acceptable with the military men,
perhaps more so; and what cash is sent must
find its way back again in exchange for the
wants of the upper from the lower country.
For we are not to suppose that cash stays
accumulating there forever. 3. This scarcity
has been occasioned by the late loans. But
does the government borrow money to keep
it in their coffers? Is it not instantly restored
to circulation by payment for its necessary
supplies? And are we to restore a
vacuum of twenty millions of dollars by an
emission of ninety millions? 4. The want of
medium is proved by the recurrence of individuals
with good paper to brokers at exorbitant
interest; and 5. By the numerous applications
to the State governments for additional
banks; New York wanting eighteen
millions, Pennsylvania ten millions, &c. But
say more correctly, the speculators and spendthrifts
of New York and Pennsylvania, but
never consider them as being the States of
New York and Pennsylvania. These two
items shall be considered together.—
To J. W. Eppes. Washington ed. vi, 231.
Ford ed., ix, 405.
(M.
Nov. 1813)
