The most lamentable delusion seems to have prevailed in the formation of every plan for the establishment of a national Bank which has hitherto been submitted for the consideration of Congress. Your objections to the Bill which you lately returned to the Senate are correct and conclusive as far as relates to its capacity of being useful to the public or private interests of the country during the war; but I humbly solicit to express the difference of opinion which I entertain in your estimate of the capacity of a Bank to sustain its own credit and that of the nation on any of the foundations heretofore proposed.1 How can public credit be expected to derive advantage from the establishment of a national Bank “without regard to the formation of its capital?” Is it by transferring the odium of issuing worthless paper, from the Treasury to a Corporation? There must be some essential difference between Bank Notes and Treasury Notes, other than in name, to make the former a better “substitute” for specie than the latter; and that difference must consist in the establishment of a permanent insulated security commensurate to the amount of paper the Corporation is authorised to issue: Then indeed “without such an obligation” (to pay specie) “the notes of the Bank tho’ not exchangeable for Specie, yet resting on the good pledges, and performing the uses of Specie in the payment of Taxes, and other public transactions, would, as experience has ascertained, qualify the Bank to supply at once a circulating medium and pecuniary aid to the Government.”

But—Let it be remembered, “as experience has ascertained,” that nearly in the same proportion, as those “good pledges,” on which Bank paper has been issued, have consisted in Treasury notes or Stock, have they depreciated and departed from the metallic standard; and were it not for the pledges of private property in part, for the notes thus issued, the paper of some of those Banks which have ventured farthest in affording “pecuniary aid to the Government,” would avail that Government, now, little more than 50 per Cent; and as the medium depreciates, taxes, prices, and expenditures must nominally increase. What benefit, then, can the Government derive from a Corporation issuing 60 or even 500 millions of paper, over one issuing 33 millions, if the emissions of the latter will go as far in the public expenditures as the former? The inexpedience of such deceptions is too palpable to require discussion. The nearer the medium is in value to metallic money the less in quantity will be required for the same purposes: Suppose the national medium to be so depreciated that the public Stocks in that medium were at 50 per Cent premium, when with metallic money it could be purchased at 50 per cent discount, would public credit derive any advantage from that circumstance? There can be no such thing as public or private credit without some Standard by which it is to be measured; while Treasury notes are convertible into Stock, and the principal and interest of Stock payable in Treasury notes, which, by a mere popular vote, may be created at any time, and to any extent, to redeem any pledge, however solemnly given, the nation can have no credit, and, while such is its practice, it deserves none.

In the present exigencies of the Country it must, by every practical man, be admitted to be beyond the power of the Government to create a medium convertible into Specie at the option of the holder; but, it certainly is within its power to create one, which, for all national and domestic purposes, will be perfectly equivalent; not all the wealth of the nation if loaned to the Government, nor the countless millions of taxes, will support its credit, while it can vote an emission of Treasury notes to pay the whole. It is a medium, peremptorily limited in its amount to the security furnished for its redemption, that is now indispensible to the support of public credit; Taxes, payable in such a medium, furnish a basis for loans, and loans again furnish the medium for taxes; and if the revenues from these Sources fall short of the expenditures, issue Treasury notes, fundable at 8 per cent at certain periods if not redeemed, but not receivable in taxes, and let them find their level in the market; This is all that can be done.

The inclosed plan embraces these objects, and will put the Treasury in Cash at Once for 24 Millions in bills of the State Banks, the redemption of which will be secured by the pledge of the Bank Stock, for which they are issued: A National medium will be thus furnished of 33 millions, and a circulation of the State Banks, bottomed on that, will, together, supply a medium Sufficient for all public and private purposes, and the funds for its redemption will be, at the return of peace, most ample and complete; even at this time, it is believed, the Corporation might, without loss, through the medium of Exchange, convert its whole Capital into Specie, if it was desirable so to do. On the establishment of such a Bank, the whole funded debt would rise as much above its present value, as the value of the paper by which it would be represented, shall be above that of Treasury notes, its present representative; and so long as the public engagements were discharged in that medium, the value of its paper would be regulated by the market rate of Interest; whereas, a discount of 50 per cent will not induce investments in Stock, until the impolitic system of issuing Treasury notes for the payment of the Interest is abandoned.

The principles of the plan here submitted are susceptible of such modification as to free it from any constitutional objections, if to such it is liable. Banking institutions could be admitted only in common with individuals to share in the Stock, should this be thought more equitable or expedient; though the public interest, it is believed, in that way would be less promptly served, and an increase of Banking capital created that would be worse than useless.

The preceding sentiments are those of one who feels deeply for the honor and interests of the Country; They are the result of much reflection, and some practical experience; and nothing short of the most solemn conviction that a medium created, limited, and secured, substantially upon these principles is absolutely necessary to rescue the public credit from utter and irretrievable ruin, and furnish the standard which the interest of every individual in the nation imperiously calls for, as the representation of their services and their property, could have induc[e]d the writer to obtrude these opinions on Your Excellency; and while he entreats you to pardon the incourtly style in which they are conveyed, he trusts they will meet your attentive perusal and serious consideration.