From Thomas Jefferson
Monticello Feb. 16. 14.
A letter from Colo. Earle of S.C. induces me to apprehend that the government is called on to reimburse expences to which I am persuaded it is no wise liable either in justice or liberality.1 I inclose you a copy of my answer to him, as it may induce further enquiry, & particularly of Genl. Dearborn.2 The Tennisee Senators of that day can also give some information. We have not yet seen the scheme of the new loan3 but the continual creation of new banks cannot fail to facilitate it; for already there is so much of their trash afloat that the great holders of it shew vast anxiety to get rid of it.4 They percieve that now, as in the revolutionary war, we are engaged in the old game of Robin’s alive.5 They are ravenous after lands, and stick at no price. In the neighborhood of Richmond, the seat of that sort of sensibility, they offer twice as much now as they would give a year ago. 200 millions in actual circulation, and 200. millions more likely to be legitimated by the legislative sessions of this winter, will give us about 40. times the wholesome circulation for 8. millions of people.6 When the new emissions get out, our legislatures will see, what they otherwise cannot believe, that it is possible to have too much money. It will ensure your loan for this year; but what will you do for the next? For I think it impossible but that the whole system must blow up before the year is out: and thus a tax of 3. or 400 millions will be levied on our citizens who had found it a work of so much time and labour to pay off a debt of 80. millions which had redeemed them from bondage. The new taxes are paid here with great cheerfulness, those on stills & carriages will be wonderfully productive. A general return to the cultivation of tobo. is taking place, because it will keep. This proves that the public mind is made up to a continuance of the war. Ever affectionately your’s
RC and enclosure (DLC); FC (DLC: Jefferson Papers). For enclosure, see n. 2.
1. Elias Earle wrote Jefferson on 28 Jan. 1814, requesting a statement from the former president regarding Earle’s 1807 proposal to build ironworks in Cherokee territory, and enclosing copies of a 28 Mar. 1812 letter from former North Carolina Congressman James Holland and a 29 Mar. 1812 statement by Henry Dearborn on the matter. According to Dearborn’s statement, he and Jefferson had agreed that Earle was to locate a suitable tract of land, erect the works, and eventually supply the government with iron implements for the Indian trade; in exchange, the government would extinguish the Indian title to the tract, cede at least part of the land to Earle, and purchase his iron products annually on “reasonable terms.” Return Jonathan Meigs Sr., U.S. agent to the Cherokees, accordingly obtained a treaty ceding a six-square-mile tract of land for this purpose, and gave the Indians nearly $3,000 in partial payment. Earle delivered the document to Washington, where Jefferson submitted it to the Senate for ratification. Part of the tract, however, was discovered to be in the state of Tennessee, and ratification was suspended pending that state’s agreement to relinquish title to the land in question, which did not occur. Earle, therefore, claimed reimbursement for the expenses he incurred in locating the tract and taking the treaty to Washington; alternatively, he wished the substitution of a tract not located in Tennessee. Holland’s account, shorter than but substantially in accord with Dearborn’s, noted specifically that the location of the tract was the only apparent reason that ratification did not proceed (DLC: Jefferson Papers). For Earle’s earlier attempt to gain compensation in this case, in which he submitted to JM a copy of Dearborn’s statement, along with an additional note by Dearborn of the same date recommending that Earle’s request be granted, see Earle to JM, 6 Apr. 1812, PJM-PS, description begins Robert A. Rutland et al., eds., The Papers of James Madison: Presidential Series (7 vols. to date; Charlottesville, Va., 1984–). description ends 4:303, 304 n. 1.
2. The enclosed copy of Jefferson’s 16 Feb. 1814 reply to Earle (1 p.) stated that, while Jefferson was substantially in agreement with Dearborn’s and Holland’s accounts, he wished to add his recollection that Earle had undertaken the project on his own initiative, that the government had agreed to help him but “took no part nor interest which could make them liable as parties for the expences” that Earle wished reimbursed, that in the process the government aimed to protect Indian interests, and that ratification of the treaty was suspended in part because “a strong opposition to it had arisen among the Indians.” He would, however, defer to Dearborn’s better memory of the affair if after being consulted on these points the general still concluded that the government should pay Earle’s expenses.
3. On 9 Feb. 1814 in the House of Representatives, John Wayles Eppes introduced legislation authorizing a loan to cover government expenses for the ensuing year, and moved that the amount be set at $25,000,000. The matter was debated at length in the House until 3 Mar., when the legislators passed a bill for a loan not exceeding that amount. It was sent to the Senate the following day and approved there on 19 Mar.; on 24 Mar., JM signed it into law (Annals of Congress, description begins Debates and Proceedings in the Congress of the United States … (42 vols.; Washington, 1834–56). description ends 13th Cong., 2d sess., 647–48, 673–75, 1264–1798; 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 3:111–12).
4. Between 1811 and 1816, following Congress’s refusal to recharter the First Bank of the United States, the number of state-chartered banks in the country increased from eighty-eight to two hundred and forty-six. In the face of a burgeoning war-related need for credit and a shortage of specie, many of these new charters did not require the redemption of bank notes on demand, or the maintenance of specie reserves to cover such demands. The impetus to issue paper money not backed by hard currency was further increased by the cessation of the First Bank’s regulatory practice of presenting, at will, any of its large holdings of state bank notes for redemption in specie. The resulting inflation culminated in a widespread suspension of specie payments after the British burned Washington in August 1814 (Edward S. Kaplan, The Bank of the United States and the American Economy [Westport, Conn., 1999], 28–31, 38, 42–43).
5. In “Robin’s alive,” players recited a verse beginning with that phrase, or a variation, while holding a lighted stick. The object of the game was to finish the verse and pass the stick to the next player before the fire went out (William Wells Newell, Games and Songs of American Children [New York, 1903], 135).