James Madison Papers

To James Madison from Littleton Dennis Teackle, 31 January 1814

From Littleton Dennis Teackle

Tomlinson’s Hotel 31st: Jany. 1814


Upon my arrival in this City, I was informed that the subject of a National Bank, was about to be discussed in Congress, and considering the scheme proposed by its projectors, as designed to compass a vast monopoly, and an important source of revenue, without an equivalent, I took occasion cursorily to draw up a plan of Finance embracing that subject, which appeared in the National Intelligencer, and has been republished by several prints of various political character1—but in the ardour of my zeal, to submit those views to your consideration, before the matter should have been disposed of by Congress, it escaped me to notice a most essential auxiliary to the plan. To wit, the extension of emissions upon the security of national domains,2 redeemable at a distant date, say five years, with interest annually at the rate of 1⅓ Cents per $100 per day, equal to $4 80/100 perCt. per Ann—for such facilities a capital of Sixty-millions might be readily commanded, as computing the aggregate of Bank-stock at seventy-five millions, whereof 1/5 in specie is amply sufficient to discharge any demand, that in the common course of commerce could be presented and which is equal to the avarage portion of specie in the different Banks, and nearly equal to their notes in circulation; the remaining 4/5 or Sixty-millions—in public securities bearing interest, and intrinsic solidity, obviously preferable to the notes of State Banks, of which that portion is now composed, would consequently be thus invested. The correctness of this position is well known to Gentlemen conversant in fiscal operations.

The burthen of interest sustained by the present system of Treasury-Notes, is needlessly great, and the limitation tends to reduce their value, whilst issues on the plan herein suggested would lessen the rate of interest, and expense of emission, and be universally esteemed a more eligible facility.

Supposing the sum assumed to be taken up by individuals & Banks, in anticipation of, or to replace the like amount of funded stock, as recently contracted vizt. say

60.000.000 at 7 50/100  = $4.500.000
60.000.000 4 80/100   –2.880.000
the difference would be $1.620.000

a fund sufficient to build and equip annually a force of two 74’s & two Frigates of the first class.

There is nothing more certain than that Stock funded at so extravant a rate of interest, will find its abode in Foreign-Countries, and produce the pernicious effect of a constant drain beyond the requisite supply of specie for the commerce of Asia. Some pseudo-Financiers have advocated the policy of foreign-loans, but nothing can be more deleterious in operation—for illustration I will suppose the debt of England, due to another Country, and by resorting to their public documents we percieve, that the means to meet its interest, and cover their public charges, exceed by two-fold the aggregate of their Exports, and hence impoverishment, & ruin, would enivitably follow. But the debt being among themselves, operating as a stupendous Engine, for every purpose of national prosperity—a result diametrically different succeeds in due course.

The assimilation of individual, to public expenditure, is a common error. The liberality of the one dissipates his substance, and destroys his Estate; whilst the diffusion of public wealth, under a liberal and judicious appropriation, propels every useful enterprize for the general benefit.

The odious system of Farmers general, is in effect, revived by the mode adopted for letting out the late loans, and those Farmers, expert in the subtile Arts of cultivating the fields of Foreign Finance, have reapt, and are now reaping the most exuberant crops from our virgin soil3—it is only necessary to glance an eye to the prices current for Stocks on the eve of a new loan & a most ominous depression appears—the object and design of which cannot be doubted. The like game is now playing off, and in addition it is rumoured, that an augmented loan, cannot be obtained without an increase of terms; but the end of these tricks, and the fallacy of these rumours, will be manifested by the sudden appreciation of the Scrip, after the completion of the subscription—the fact is that the means of supply are enlarged, as the proceeds of previous loans exported to Europe are returned with the addition of immense profits.

Considering that amidst the multitude of important concerns, with which, your mind is employed, that possibly some of the views herein suggested may not have occurred to you, & impelled by worthy motives, I have presumed to take this liberty. I pray you to believe me sincere, in tendering assurances of my exalted veneration and affectionate esteem wherewith, I have the honour to subscribe Your Most Obt. Sert

L: D. Teackle

P.S. Since writing the forgoing, I have received a letter from a Gentleman of Science, & distinguished financial abilities, which I take leave to enclose with a request that it may be returned.


RC (DLC). Docketed by JM. Enclosure not found.

1“Americanus” to JM, 10 Jan. 1814.

2Emission: the issuing or setting in circulation of bills, notes, or shares (OED Online description begins Oxford English Dictionary. description ends ). Teackle referred to government bills secured by public lands.

3The farmers general leased the right to collect taxes in prerevolutionary France and were reputed to have enriched themselves by oppressive means (An Impartial and Concise History of the French Revolution, from Its First Causes and Commencement in 1789, to the Conclusion, and Coronation of Bonaparte, Emperor of the French, on the 2d Dec. 1804 [New York, 1810; Shaw and Shoemaker description begins R. R. Shaw and R. H. Shoemaker, comps., American Bibliography: A Preliminary Checklist for 1801–1819 (22 vols.; New York, 1958–66). description ends 20428], 7; John Payne, A New and Complete History of Europe, from the Earliest Ages, Down to the Present Time … [New York, 1810; Shaw and Shoemaker description begins R. R. Shaw and R. H. Shoemaker, comps., American Bibliography: A Preliminary Checklist for 1801–1819 (22 vols.; New York, 1958–66). description ends 21001], 624).

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