University of Virginia Library

TO C. D. WILLIAMS.

I have received your favor of [January 29] accompanied
by the pamphlet on the subject of a circulating
medium.[12]

I have not found it convenient to bestow on the
plan proposed the attention necessary to trace the
bearings and operations of new arrangements ingeniously
combined on a subject which in its most
simple forms has produced so much discussion among
political Economists.

It cannot be doubted that a paper currency
rigidly limited in its quantity to purposes absolutely
necessary, may be made equal & even superior in

value to specie. But experience does not favor a
reliance on such experiments. Whenever the paper
has not been convertible into specie, and its quantity
has depended on the policy of the Govt. a depreciation
has been produced by an undue increase, or an
apprehension of it. The expedient suggested in the
pamphlet has the advantage of tying up the hands
of the Govt. but besides the possibility of legislative
interferences, bursting the fetters, a discretion vested
in a few hands over the Currency of the nation, &
of course over the legal value of its property, is
liable to powerful objections; and tho' confined to a
range of 5 per Ct., Wd. have still room for a degree of
error or abuse not a little formidable. The idea
also of making foreign currency depending on a
foreign will, and the balance of trade always varying,
and at no time reducible to certainty & precision,
standards for a natl. Currency Wd. not easily be
admitted.

I am sensible Sir that these observations must
have been included in your examination of the
subject, and that they are to be regarded in no other
light than as an expression of the respect & acknowledgment,
which I pray you to accept for your polite
Communication.