Thomas Jefferson Papers

Thomas Jefferson to John Neilson, 8 November 1818

To John Neilson

Monticello Nov. 8. 18.

Dear Sir

I inclose you 4. letters lately recieved, which [I] suppose to be from your friends in Ireland, and which I hope may give you agreeable news from them.

I return you also the papers which mr Dinsmore gave me from you, and I see, not without sensible regret, that our ideas of the mode of charging interest are very different. I never in my life paid a cent of compound interest; being principled against it; not but that compound may be made as just as simple interest, but then it should be at a lower rate. interest simple or compound1 is a compensation for the use of money, and the legislature supposed, as is the truth & general opinion, that taking one mode of employing money with another, 6. per cent simple interest is an average profit. but had they established a compensation by way of compound interest, they would have probably fixed it at 4. or 4½ per cent. the difference it makes in our case is but a little over 40.D. a sum which with you I think nothing of, could I allow myself to countenance what I think is wrong, without pretending to censure those who think differently, as it is your debt, in the form in which I always considered it shall be paid out of the proceeds of my crop now going to market as soon as sold, which possibly may be not till April. your debt has remained in my hands because not called for, & in the belief you had no2 expectation of placing it at better profit. had I ever supposed you wished to employ it otherwise, it should never have been kept from you a moment. in no case however will this difference of opinion lessen my wishes to be useful to you, nor my friendly esteem for you.

Th: Jefferson

PoC (MHi); on verso of reused address cover to TJ; one word faint; at foot of text: “Mr Nielson”; endorsed by TJ as a letter to “Nelson John” and so recorded in SJL. Enclosures not found.

The legislature of Virginia set the maximum allowable interest rate at 6 percent in November 1796 (Acts of Assembly description begins Acts of the General Assembly of Virginia (cited by session; title varies over time) description ends [1796 sess.], 16–7). TJ settled his account with Neilson on 16 Apr. 1809, leaving a debt of $435.75 (MB description begins James A. Bear Jr. and Lucia C. Stanton, eds., Jefferson’s Memorandum Books: Accounts, with Legal Records and Miscellany, 1767–1826, 1997, The Papers of Thomas Jefferson, Second Series description ends , 2:1245). For TJ’s eventual agreement on the interest due, see his 31 May 1820 letter to Neilson.

1Preceding three words interlined.

2TJ here canceled “view.”

Index Entries

  • Dinsmore, James; delivers papers search
  • interest; rate limits in Va. search
  • Jefferson, Thomas; Business & Financial Affairs; debt to J. Neilson search
  • Jefferson, Thomas; Opinions on; interest search
  • Neilson (Nelson), John; letters to search
  • Neilson (Nelson), John; TJ forwards letters to search
  • Neilson (Nelson), John; TJ’s debt to search
  • Virginia; interest rates in search