From James Madison
Washington Ocr 10. 1814
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.
I have not yet read your last comunication to Mr Monroe on the subject of finance. It seems clear, according to your reasoning in the preceding 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 can not be extended beyond the amount of a sufficient medium, and of course can not be continued but by successive re-emissions & redemptions by taxes, resort must eventually be had to loans, of the usual sort, or an1 augmentation of taxes, according to the public exigences: I say augmentations of taxes, because these 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 between2 the circulating3 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 recd despatches from Ghent, which I shall lay before Congs today. The British sine qua non, excluded us from fishing within the soverignty attached to her shores, and from using these in curing fish—required a Cession of as much of Maine as wd remove4 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,5 (such as that of the Treaty of6 Greenville) agst the U.S. mutually guaranteed, and the Indians restrained from selling their lands to either party, but free to sell them to a third party—prohibited the U.S. from having an armed 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 leav[e] 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 negociation, 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.
RC (DLC: Madison Papers); edge trimmed; at foot of text: “Thomas Jefferson”; endorsed by TJ as received 12 Oct. 1814 and so recorded in SJL.
For the August 1814 despatches from ghent, see ASP, Foreign Relations, 3:695, 705–10. For the 1795 treaty of greenville between the United States and various Northwest Indian nations, see U.S. Statutes at Large description begins Richard Peters, ed., The Public Statutes at Large of the United States … 1789 to March 3, 1845, 1845–67, 8 vols. description ends , 7:49–54. the lakes: the Great Lakes. In the most recent reorganization of the cabinet, James Monroe took over for John Armstrong at the War Department and Alexander J. Dallas replaced George W. Campbell at the Treasury Department (JEP description begins Journal of the Executive Proceedings of the Senate of the United States description ends , 2:530, 533 [26, 27 Sept., 5, 6 Oct. 1814]). Reports of an imminent British attack on the American post at sacketts harbour proved to be unfounded (Washington Daily National Intelligencer, 10 Oct., 10 Nov. 1814).
1. Preceding six words interlined.
2. Manuscript: “betwen.”
3. Word interlined in place of “paper.”
4. Word interlined in place of “allow.”
5. Preceding two words interlined.
6. Preceding three words interlined.
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