To Thomas Jefferson from Albert Gallatin, 23 April 1805
From Albert Gallatin
23d April 1805
Dear Sir
I enclose the sketch of an Act for organizing the new district of Sacket harbour in conformity with the act of 3 March 1803 (6th Vol. page 273). If you approve of the form, and division, a fair copy shall be prepared for your signature.
Pierce’s plan of a depreciating paper is returned. Herman Husband the Pennsylvania madman proposed a similar one to the legislature of that State in the year 1779: only his paper, instead of depreciating at a regular rate each time it passed in the hands of another man, was to depreciate, instead of bearing interest, regularly every day so as to be worth nothing at the end of three years. Pierce’s paper is to be worth nothing when it shall have passed through the hands of ten persons. It is evident that such paper, without the assistance of severe tender laws, will be worth nothing from the day it is issued. But supposing such laws to exist & to be enforced; what do such plans amount to? If the depreciation be very gradual, say one per cent or one per thousand, instead of ten per cent, on each payment, it is perfectly similar to a stamp duty on receipts, notes &a. If the depreciation be at the rate of ten per cent, as suggested by Pierce, it is the Spanish Alcavalla.
With great respect Your obedt. Sert.
Albert Gallatin
RC (DLC); endorsed by TJ as received from the Treasury Department on 23 Apr. and “Sacket harbor. Pierce” and so recorded in SJL. Enclosures: (1) Draft order for establishment of Sackets Harbor, New York, as a port of entry, not found (see Gallatin to TJ, 18 Apr., second letter). (2) Edwards Pierce to TJ, 30 Mch.
Spanish Alcavalla: that is, alcabala, a system of sales taxes operating throughout the Spanish empire. Although it varied locally, the tax could be as high as the 10 percent Castilian rate, which is what Gallatin seems to have had in mind (J. Michael Francis, ed., Iberia and the Americas: Culture, Politics, and History: A Multidisciplinary Encyclopedia, 3 vols. [Santa Barbara, Calif., 2006], 1:57-8).