Phila. 25 Feb. 1807
There is an object of some importance to the interest of the United States, of which it may be in my power in some measure to influence the direction. But before it is set in motion at all I wish to know your opinion of it. The Bank of the U.S. will apply to Congress the next session for a new Charter, or a prolongation of the old for 25 years. It would be willing to pay a few millions of dollars for this advantage. My proposal would be to have the money that the Bank will pay, whatever it may be, applied to public works & education, as the commencement of a great system of national improvements.
Suppose the Bank in its petition to Congress should offer to pay into the hands of a Board of Commissioners, to be named by the president, the sum of five hundred thousand dollars a year for 8 years next insuing the grant of the new charter, to be by them laid out in the following manner:
1st. One fifth part of each of sd. payments shall go to the endowment of a National Institution for the promotion of education & Science, in the manner to be pointed out by Congress.
2d. The other 4 fifths shall be appropriated to the extension of Canal navigation, bridges & turnpike roads as follows:—whenever a Company for a canal, bridge or turnpike shall be incorporated, either by the government of the U.S. or by that of an individual State, whose object shall be such as to the Commissioners, shall appear to comport with the intention of this appropriation, they shall subscribe for one third of the shares of such work, & pay the price of such shares in proportion as the shareholders of the other two thirds shall pay theirs, until the object be accomplished.
3d. The Commissioners shall receive no part of the profits arising from the tolls of the Canal, bridge or road until the profits shall amount to 4 percent per annum on the whole capital, or 6 percent on the 2. 3ds. held by the private owners. But after 4 p.c. is recieved by them the next 2 p.c. shall go to the Commissioners. After which both parties shall receive according to their subscription.
4th. The profits received by the Commissioners for toll shall always be appropriated in the same manner & in the same proportions as the original payments,—that is: 1 fifths to the National Institution for education, & the 4 fifths in new Canals &c., or extending the old.
Here then in the first instance would be 3,200,000 Dol of Public improvement money; which, with twice that sum in private capital would bring into operation 9,600,000. Small canals with inclined planes, on Fultons plan, will not cost on an average more than 10,000 Dol. per mile. And this is the best mode for a general system. This (supposing it all in canals) would give us 960 miles of canal at the end of about 10 years; the time when the 8 years payments may be supposed to be laid out.
We may now calculate the extension arising from appropriating the profits. Though works of this kind do not usually yield 6 per cent a year at first, yet at the end of ten years it is probable that these on an average would yield that profit. This would give to the extension fund 192,000 Dol. a year. Deduct 1 fifth for the Institution there would remain 153,600. Add double this sum from private Capital as above, & you have 460,800 Dol. which would create 46 miles of new Canal every year, or other works equivalent. After this the operation would go on increasing in a compound ratio.
This is supposing that Congress should make no other appropriation to this kind of public works. But it is to be hoped that by the end of ten years Some millions a year may be assigned to these objects. In which case the government might give up its third of profits to the public: that is, reduce the tolls one third & leave the property thus reduced in the hands of the proprietors of the 2 thirds.
Thus the Government might go on in the application of its surplus revenue, subscribing for one third of the shares in all such useful enterprises; And when they should become so profitable as to yield 6 per cent per annum, give up its third to the public by reducing the tolls one third. In this way the whole country would become a garden, showing in practice the advantage of a republican government, whose revenues are not spent in wars, Armies, & fleets & Courts; but in subduing the elements & improving human happiness.
It appears to me there cannot be a more favorable occasion for beginning these operations than the one now to be offered by the Bank. And I am extremely anxious that the system should be begun & well begun during your administration. Because your name would give it a vogue, & make it more likely to be followed up by your successors. It may be added that the system, when success shall have proved its wisdom, will give to your name one of its brightest ornaments.
There is one argument in favor of public improvements in our country which is not usually adverted to: they would be a power full means of preserving peace. It is the class of men who have enterprise & capital that are now crying out for war. These men want contracts, they want privateering, they want high insurance to increase their profits. Two thirds of the men of capital in Philadelphia are now raving for war; and this chiefly as a field of speculation. It is true they likewise calculate on war to produce monarchy, monarchy to make Dukes & peers; and Dukes & peers are to grow out of their families. But hold up before them an extensive scope of profitable speculation for their capital, and although that Speculation should be an innocent one, and even beneficial to their country, they would not despise it. You will find it occupying their chief attention. They will almost forget their nobility in pursuit of gain; and you will make them useful members of society.
It is not probable that I could say any thing on the general view of the subject that is not already familiar to your mind,—such as that Canals & roads are essential bonds of our union,—and that a system of education which would comprehend every human creature will become absolutely necessary to the preservation of liberty. But I must repeat once more that I am very anxious to see these things begun during your administration & during my life.
You may give me your opinion in full confidence that I will not impart it farther than you desire.
Since my last visit to Washington we have very nearly decided to come & fix our residence in that city for the remainder of life. By the last of September I think we shall have made this final movement.
With great respect, Dear Sir, yr. obet.
DLC: Papers of Thomas Jefferson.