University of Virginia Library

TO ALEXANDER J. DALLAS.

Dear Sir Since the recet. of your several letters
relating to the Treasury proposition,[118] & the decision
of Bank Deputies at Phila. my thoughts have been

duly turned to the important & perplexing subject.
Altho' there may be no propriety in recalling the
proposition, it seems now certain that it will fail
of its effect. Should the Banks not represented at
Phila. come into the measure, the refusal of those
represented would be fatal. The want of a medium
for taxes in a single state would be a serious difficulty;
so extensive a want would forbid at once an
enforcement of the proposition. The Banks feel
their present importance & seem more disposed to
turn it to their own profit than to the public good,
& the views of the Govt. Without their co-operation
it does not appear that any immediate relief
can be applied to the embarrassments of the Treasury
or of the currency. This co-operation they refuse.
Can they be coerced?

Should the State Legislatures unite in the means
within their power, the object may be attained.
But this is scarcely to be expected; & in point of
time is too remote. The National Bank must for a
time at least, be on the defensive.

The interposition of Congress remains; & we may
hope the best as to a vigorous use of it. But there
is danger that the influence of the local Banks may
reach even that resource. Should this not be the
case, the remedy is future not immediate. The
question then before us is, whether any & what
further expedients lie with the Executive. Altho
we have satisfied by what has been already attempted
our legal responsibility, it would be still incumbent
on us to make further experiments if any promising

ones can be devised. If there be such I have full
confidence, that they will enter into your views on
the subject. One only occurs to me; & I mention
it because no other does, not because I regard it
as free from objections which may be deemed conclusive.
The notes in the Treasury might be presented
to the Banks respectively with a demand of
the specie due on the face of them. On refusal
suits might be immediately instituted not with a
view to proceed to execution, but to establish
a claim to interest from the date of the demand.
The notes thus bearing interest being kept in hand,
Treasury notes bearing interest might be issued
in payments from the Treasury; & so far injustice
to the several classes of creditors might be lessened,
whilst a check would be given to the unjust career
of the Banks.

Such a proceeding ought to be supported by the
Stockholders, the Army, the Navy, & all the disinterested
& well-informed part of the community.
The clamor agst. it would be from the Banks & those
having interested connections with them, supported
by the honest part of the community misled by their
fallacies; and the probability is but too great that
the clamor would be overwhelming. I do not take
into view the expedient of requiring a payment of
the Impost, in specie, in part at least, because it
could not be extended to the other taxes, & would
in that respect as well as otherwise, be a measure
too delicate for the Ex: Authy; nor would its effect
be in time for any very early purpose.

I have been led by the tenor of your letters to put
on paper these observations. The report you are
preparing will doubtless enlighten my view of the
whole subject.