The writings of James Madison, comprising his public papers and his private correspondence, including numerous letters and documents now for the first time printed. |
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TO THOMAS JEFFERSON. |
 | The writings of James Madison, |  |
TO THOMAS JEFFERSON.
Dear Sir Your favor of the 24th Ult: came duly
to hand. I learn that the Library Come. will report
favorably on your proposition to supply the loss of
books by Congs. It will prove a gain to them, if
they have the wisdom to replace it by such a Collection
as yours. Mr. Smith will doubtless write
you on the subject.[94]
I have not yet read your last communication to
Mr. Monroe on the subject of finance.[95]
It seems
one, that a circulating medium, to take the place of
a bank or metallic medium, may be created by law
and made to answer the purpose of a loan, or rather
anticipation of a tax; but as the resource cannot be
extended beyond the amount of a sufficient medium,
and of course cannot be continued but by successive
re-emissions & redemptions by taxes, resort must
eventually be had to loans of the usual sort, or an
augmentation of taxes, according to the public exigencies:
absorbing a larger sum into circulation, will admit an
enlargement of the medium employed for the purpose.
In England where the paper medium, is a
legal tender in paying a hundred millions of taxes,
thirty millions of interest to the public creditors &c
&c, and in private debts, so as to stay a final recovery,
we have seen what a mass of paper has been
kept afloat, with little if any depreciation. That
the difference in value between the circulating notes
and the metals proceeded rather from the rise in
the latter than from the depreciation of the former,
is now proved by the fact, that the notes are, notwithstanding
a late increase of their quantity, rising
towards a par with the metals, in consequence of a
favorable balance of trade which diminishes the
demand of them for foreign markets.
We have just received despatches from Ghent,
which I shall lay before Congs. to-day.[96]
The British
sine qua non, excluded us from fishing within the
sovereignty attached to her shores, and from using
these in curing fish; required a Cession of as much
of Maine as wd. remove the obstruction to a direct
communication between Quebec & Halifax, confirmed
to her the Passamaquoddy Islands as always
hers of right; included in the pacification the Indian
Allies, with a boundary for them (such as that of the
Treaty of Greenville) agst the U. S. mutually guarantied,
and the Indians restrained from selling their
force on the Lakes or forts on their shores, the British
prohibited as to neither; and substituted for the
present N. W. limit of the U. S. a line running direct
from the W. end of L. Superior to the Mississippi,
with a right of G. B. to the navigation of this river.
Our ministers were all present, & in perfect harmony
of opinion on the arrogance of such demands. They
wd. probably leave Ghent shortly after the sailing
of the vessel just arrived. Nothing can prevent it,
but a sudden change in the B. Cabinet not likely to
happen, tho' it might be somewhat favored by an
indignant rupture of the negotiation, as well as by
the intelligence from this Country, and the fermentations
taking place in Europe.
I intended to have said something on the changes
in the Cabinet, involving in one instance, circumstances
of which the public can as yet very little
judge, but cannot do it now.
The situation of Sacketts Harbour is very critical.
I hope for the best, but have serious apprehensions.
With truest affection always yrs.
The library was bought for $23,950 by act of January 30, 1815.—
History of the Library of Congress, i., 68, et seq.
September 24th. See also his letter of October 15th (Writings,
14, 488, 489), to which Madison replied October 23d: "I find that the
variance in our ideas relates 1. to the probable quantity of circulating
medium. 2 to the effect of an annual augmentation of it. I
cannot persuade myself that in the present stagnation of private
dealings, & the proposed limitation of taxes, the two great absorbents
of money, the circulating sum would amount even to 20 mills. But
be this amount what it may, every emission beyond it, must either
enter into circulation and depreciate the whole mass; or it must be
locked up. If it bear an interest it may be locked up for the sake of
the interest, in which case it is a loan, both in substance & in form,
and implies a capacity to lend, in other words a disposable capital, in
the Country. If it does not bear an interest, it could not be locked
up, but on the supposition that the terms on which it is recd. are such
as to promise indemnity at least for the intermediate loss of interest,
by its value at a future day; but this both involves the substance of a
loan, to the amount of the value locked up, and implies a depreciation
differing only from the career of the old continental currency, by a
gradual return from a certain point of depression to its original level.
If this view of the subject be in any measure correct, I am aware of
the gloomy inferences from it. I trust however that our case is not
altogether without remedy. To a certain extent paper in some form
or other, will as a circulating medium, answer the purpose your plan
contemplates. The increase of taxes will have the double operation
of widening the channel of circulation, and of pumping the medium
out of it. And I cannot but think that a domestic capital existing
under various shapes, and disposable to the public, may still be obtained
on terms tho' hard, not intolerable; and that it will not be
very long before the money market abroad, will not be entirely shut
agst us; a market however ineligible in some respects, not to be declined
under our circumstances."—Mad. MSS.
| The writings of James Madison, | |