James Madison Papers

To James Madison from an Unidentified Correspondent, 27 April 1812 (Abstract)

§ From an Unidentified Correspondent

27 April 1812, Boston. Promised in his last1 not to trouble JM again. “But an Idea has since struck me In consequence of the difficulty you had in selling the 18 million and the enormous Interest you was obliged to give.2 … If you should again want 18 million of Dollars that for this 18 million there should be Issued from the treasury 36 Million of 3 P C Stock and that your Contracters for Navy & army should be obliged to take a part of their payment in 3 P C Stock which shall be charged them, and that these contracters should then be authorised to sell at public auction this Stock & what ever It sold for the goverment should be Creditted for the amount.” Claims that “there are many federalists who want the Stock and would buy It If sold in the public Market, which dare not subscribe to a loan.” Gives an illustration: “Suppose Mr Binny the navy agent should put repairs to the frigates which should amount to 500,000 dollars, and that the secretary of the treasury should Inform him that he must take 5 hundrd thousand dollars of three P Cent Stock to his credit and that he must Sell this Stock at public auction on Change for the most It will bring. The Consequence would be that the monied federalists would buy It at the Market price first to prevent Its being sold for less than Its Value on acct. of the Stock they now hold and Second because they want It and they dare not subscribe to a loan as It would be said by those federal-lists who cannot buy that this Is supporting the War. (Therefore as money Governs all). If they can buy without meritting this censure they would do It.”

Warns that “Care must be taken that It is not Known that this Stock belongs to the Goverment, you will by this means make your loan at 6 P Ct instead of 7½…. This Town is full of federalists & monied men who do not Know what to do with their money & Itch to get part of a loan.” Adds in a postscript that “this mode of selling Stock is very common here.”

RC (NN). 3 pp. Signed, “One of the people.” Docketed by JM.

1Letter not identified.

2JM’s correspondent may have arrived at the sum of $18 million by combining an estimated $10 million to be borrowed in 1812 with the estimated $8 million of the annual appropriation required for “the payment of interest and reimbursement of the principal of the new debt” (see Gallatin to Ezekiel Bacon, 10 Jan. 1812 [ASP description begins American State Papers: Documents, Legislative and Executive, of the Congress of the United States … (38 vols.; Washington, 1832–61). description ends , Finance, 2:523–27]).

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