James Madison Papers

To James Madison from William George Vidal, 30 April 1809

From William George Vidal

Urbanna April 30th. 1809.
Middlesex county. Virginia


The question who is to govern the Kingdom of Spain seems now to be decided.

It is evident that in this continent the greatest and a very considerable part of the circulating intrinsic value medium came from Spain and its Colonies; that the expences of the coinage thereof are inconsequent, when compared to the deprivation of the intrinsic value itself, out of the orbit it was intended for. The pernicious influence of this evel was not noticed by the former government of Spain; it may however be observed by its present rulers.

In the infancy of our independence, necessity, and sound policy urged the adoption of this measure; its operation has invigorated our resources, and its immense benefit may not long pass unnoticed by the public character, who may represent the government it injures.

How to elude observation; how to secure the continuance of this benefit, which cements opulence in commercial and national finances, are considerations to which I am incompetent.

The bank of England is no object of jealousy to foreign powers, although it has constantly bought as bullion, for fluctuating prices controled either by commercial or political events immense sums of coined gold and silver.

A similar establishment, by prohibiting altogether the circulation of foreign coin as legal tender, would at once enable the government to convert foreign into national coin, and to secure its permanency in the United States, by adopting a standart [sic] calculated for that purpose.

Would it be sound policy to adopt in the vast Union of this Continent, a circulating medium of the same intrinsic value, in general for all the States?1

Has not every State its commercial balance in its favor, or against it?

Is not this balance the regulator of the intrinsic value of the circulating medium in each State?

Could law render the circulation of coin no tender, dependent only on the will of the contracting parties, to consider it as bullion, except in such State as it is or was coined for?

These considerations would lead to the establishment of a commercial exchange between State and States, and independent from the now established banks, open to men of credit and speculation, a wide range of usefull exertion, destructive to usury, which seems to germ a pace with the prosperity of our banks, whose funds in a great measure obtained from foreign capitalists at a low although to them beneficial rate, are frequently turned into the channels of usury, for the destruction of our citizens.

Patriotism leads me to address these lines to you Sir, accompanied with the best wishes for the prosperity of our country. I am with the utmost respect Sir your obedient humble Servant

Wm. Geo. Vidal2

RC (DLC). Docketed by JM.

1Most of the coins circulating in the U.S. in 1809 were of foreign origin. In 1806 Congress again recognized the shortage of coins with legislation that gave foreign gold and silver coins the status of legal tender, continuing a practice from the 1790s (Arthur Nussbaum, A History of the Dollar [New York, 1957], p. 62; U.S. Statutes at Large, 2:374–75). The solution Vidal urged did not become law until 1857, when Congress repealed all previous legislation making foreign coins legal tender and provided for the striking of U.S. coins from the collected foreign bullion (U.S. Statutes at Large description begins The Public Statutes at Large of the United States of America … (17 vols.; Boston, 1848–73). description ends , 11:163).

2Vidal was a Dutch merchant who immigrated to the U.S. circa 1797 and settled in Virginia (CVSP description begins William P. Palmer et al., eds., Calendar of Virginia State Papers and Other Manuscripts (11 vols.; Richmond, 1875–93). description ends , 9:446).

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