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James Madison to Thomas Jefferson, 23 October 1814

From James Madison

Washington Ocr 23. 1814

Dear Sir

I have recd yours of the 15: and attended to your remarks on “ways & means.” I find that the variance in our ideas relates 1. to the probable quantity of circulating medium: 2. to the effect of an annual augmentation of it. I cannot persuade myself that in the present1 stagnation of private dealings, & the proposed limitation of taxes, the two great absorbents of money, the circulating sum would amount even to 20 mills. But be this amount what it may, every emission beyond it, must either enter into circulation and depreciate2 the whole mass; or it must be locked up. If it bear an interest it may be locked up for the sake of the interest, in which case it is a loan, both in substance & in form, and implies a capacity to lend, in other words a disposable capital, in the Country. If it does not bear an interest, it could not be locked up, but on the supposition that the terms on which it is recd are such as to promise indemnity at least, for the intermediate loss of interest, by its value at a future day: but this both involves the Substance of3 a loan, to the amount of the value locked up: and implies a depreciation differing only from the career of the old Continental currency, by a gradual return from a certain point of depression, to its original level. If this view of the Subject be in any measure correct, I am aware of the gloomy inferences from it. I trust however that our case is not altogether without remedy. To a certain extent paper in some form or other, will, as a circulating medium, answer the purpose your plan contemplates.4 The increase of taxes will have the double operation of widening the channel of circulation, and of pumping the medium out of it. And I cannot but think that domestic capital existing under various shapes, and disposeable to the public, may still5 be obtained on terms tho’ hard, not intolerable; and that it will not be very long before the money market abroad, will not be entirely shut agst us: a market, however ineligible in some respects, not to be declined under our circumstances.

We hear nothing from our Envoys since the despatches now in print; nor any thing else of importance from abroad.6 We continue anxious for the situation of Sackett’s Harbour. Izard has joined Brown on the Canada side of the Straight; and offered battle to Drummond, which he does not accept, and which it seems can not be forced on him witht risk from re-enforcements now transportable to him. The most that can fairly be hoped for by us now, is that the campaign may end where it is. Be assured always of my most affece respects

James Madison

RC (DLC: Madison Papers); at foot of text: “Mr Jefferson”; endorsed by TJ as received 26 Oct. 1814 and so recorded in SJL.

The American generals George Izard and Jacob Brown had recently joined forces on the Niagara River (the straight) near Buffalo, New York. Although they marched into Canada and offered battle, Gordon Drummond, the British general opposing them, successfully avoided a general engagement. An artillery duel on 16 Oct. 1814 and an inconclusive skirmish three days later at Cook’s Mills, Upper Canada, ended the campaign on the Niagara Peninsula (Malcomson, Historical Dictionary description begins Robert Malcomson, Historical Dictionary of the War of 1812, 2006 description ends , 118–9).

1Word interlined.

2Manuscript: “depeciate.”

3Preceding two words interlined in place of “idea of.”

4Preceding five words interlined in place of “present purposes.”

5Word interlined.

6Manuscript: “abrod.”

Index Entries

  • Brown, Jacob Jennings; Niagara campaign of search
  • currency; amount of in circulation search
  • currency; Continental search
  • Drummond, Gordon; British general search
  • Ghent; peace negotiations at search
  • Izard, George; as major general search
  • Madison, James (1751–1836); and peace with Great Britain search
  • Madison, James (1751–1836); and TJ’s letters on finance search
  • Madison, James (1751–1836); and war with Great Britain search
  • Madison, James (1751–1836); letters from search
  • Madison, James (1751–1836); on wartime finance search
  • political economy; and wartime finance search
  • political economy; TJ’s letters on finance search
  • Sackets Harbor, N.Y.; British threat to search
  • taxes; as absorber of currency search
  • War of1812; and peace negotiations search
  • War of1812; Niagara Campaign search