James Madison Papers

To James Madison from Henry Lee, 4 March 1790

From Henry Lee

Stratford. March 4th. 1790.

Dear Sir

Since your illness at Georgetown I have heard nothing of you, only that you had so far recovered as to proceed, until yesterday, when a gentleman from Alexandria told me that you had taken your seat in Congress.

This information gave me pleasure, as it seemed to communicate your complete recovery, as well as because it assured me that you was executing your duty at a time which seems big with important consequences to our country. It is very much to be lamented that all in legislative trust were not where they ought to be. The infirmitys to which old age is subject, especially in the winter season, has detained Col. Lee & poor Grayson has been constantly ill. It is said that he must very soon quit us for ever. Indeed as long as Congress continue in a northern climate, I think the spring & summer should be your period of session, or absence in many members must take place from respect to their health.

I have seen the report of the secretary of the treasury on the subject of finance. It is certainly impossible for any one with my limited information to judge with Tolerable justice on a subject so complex.

Defective as it appears to me to be in its principles, it yet may be worthy of congressional approbation, for public bodys as well as individuals always act wisely in my opinion, when they do the best in their power, altho that best may not be in itself the most proper.

In this view then the report may be praise worthy—in any other I am confident it is abhorrent to political wisdom & not strictly consonant to justice. Certainly the original holders of certificates merit in every vicissitude of the public paper distinction from the assignees of the Certificates & if the supreme power shall consider it expedient & right to treat the latter as depreciated in value, it cannot be just that the former should meet the same fate—much plausible argument I am well aware may be used by ingenious men against this position, but when examined accurately I think it will appear to be absolutely sophistry & inadmissible.

This is only one of the many objectionable parts of the proposed system.

But my opposition to it proceeds on ground more material. I never can think the funding scheme wise & proper in any nation, if the common good is the supreme point to which all their consultations & doings tend. It is no doubt political to establish this system where the govt. is in the hands of one or a few, because it draws to the support of the govt. a numerous class of the people from the strongest Motive of human action, viz self interest.

But where the people are really free & mean to be so, where the govt. is absolutely their own property, political tricks of this kind are abominable & dangerous in their effects. If they succeed completely national debts will be encouraged by wanton expeditions, wars & useless expences. This encrease of the peoples burthen, will in exact proportion encrease the operation & influence of the principle & the one will continue to cherish the other, untill the weight of oppression shall force the people to recur to first principles, or the Government shall have changed hands.

Funding systems belong to arbitrary governments, they are not congenial to the true spirit of general, common freedom—they are ⟨an⟩ excellent means to change the latter into the former.

However then in theory the mischeif & wickedness of such policy is plain to my mind, I confess my disapprobation of it is heightened by recurrence to the experience of Nations. It is not in my power to trace the practice of communitys on this subject with accuracy, nor can it be done generally within the limits which my dislike to scribbling prescribes always to my letters.

Already this has reached my common boundary, but having given my opinion with respect to this pitiful plan, I will exceed my ordinary limits & view the subject experimentally in the case of G. Britain.

I prefer this nation as the exemplum not only because their history is more familiar to me than that of any other modern people, but because it is the polar star of the advocates for the funding system & because it conveys the plainest & strongest testimony of the pomp & vice of this fashionable scheme.

Contentions for the crown, wars with France for a feather & with other european potentates at various periods for straws or for what is commonly called the ballance of power plunged that people into debt—small at first but so large that direct taxes could not be assessed at once, in conjunction with their impost, so as to meet the debt.

It became them to pay, or to secure payment satisfactory to their creditors. Inhabiting an island & habituated to commerce, they readily determined that credit was all important to them, that it would serve them instead of principal & extent of territory. Wonderful indeed have been their exertions, & astonishing the event.

To the workings of their unbounded commerce are they entirely indebted for the success of a system wicked in its beginning suitable (if at all suitable) only to nations whose situation genius & habits direct them to commercial pursuits, & which must terminate in national bankruptcy.

But admitting this issue to be doubtless as it respects Britain, how can America expect to flourish under a system calculated only for commercial society. We thank heaven are by situation genius & habit agricultural, & our commerce ought to be considered only as the hand maid of our agriculture. The preeminence of the last I trust will be ever distinguished by all the regulations of our general govt. If this should not be the case, a change may be worked in our national character which will debase us as men, & destroy us as a people.

God forbid the event, I ardently pray that the U. States may to the latest ages continue to possess the character & enjoy the blessings of tillers of the earth.

In this light then, how will funding systems square with their interest.

In the first place they will draw a great part of the circulating cash from the proper channels, cultivation of soil & commerce, & appropriate it in a line unproductive to the community. For altho individuals may amass princely fortunes by stock-jobbing, yet in the encrease of their wealth the national income receives not the addition of a penny. Reverse is the case where the farmer adds to his capital & where the merchant by fair commerce encreases his stock in trade. Each of them add to the national income, in as much as they add to their own. Then will a wise honest people by their laws establish a mode of appropriating one third of the circulating cash of the community inproductively to the society.

I think not, truth & reason condemns such policy every where, but especially in America.

As you encourage this artificial use of money, in so much do you starve the real uses of money & in the same proportion do you absolutely diminish the ability of your people to pay towards the support of govt.

A complete investigation of this subject in this point of view only would I think be sufficient to demonstrate the error of the secretarys report.

But let us touch the effects of funding systems as they operate on the moral character of a people.

Habit is second nature, a long course in vitious habits will corrupt the best heart. What can be denominated the habit of supporting life, subsisting family &c. by buying & selling in the funds, when contrasted with the habit of performing the same object by tilling the earth. Avarice, deception falsehood & constant over-reaching belong to the first, while contentment, moderation, hospitality, frugality & a love to mankind result from the last. Ought not then the U States possessing extensive & fertile territory abominate the policy, which in addition to other evils, depretiates the morals of their citizens.

The subject is important & cannot be entered on without a copious discharge of the mind. I have given proof of this myself, for when I began, I did not mean to use five minutes of your time. There I will stop & promise no more to write of funds or funding systems.

I am not interested, only in common with my fellow citizens, & individually I care not what fiscal policy is pursued. I cannot give you any opinion with tolerable precision on the feelings of our people towards the genl. govt. Living in very retired part of the country & mixing only with a few neighbors I have little opportunity of knowing the general mind.

While on the last session of Assembly, I was impressed with a beleif that the enmity was rather encreasing, than otherwise.

The debates in your house during this session, I have not seen on any subject, but have heard that as far as your intentions have been discovered they are not esteemed on this side of the potomac.

It seems to me that you must introduce real taxation & bring the seat of govt. near the center of territory, or we southern people must be slaves in effect, or cut the Gordian knot at once.

By these two measures we shall be greatly assisted & may be able to bear up, till our encrease in inhabitants may place us nearer equality.

Another political involuntary flight. I ask pardon.

You have seen Mr. Jefferson or may have heard from him on the subject of the great falls. Prospect as delineated by him to me gloomy. He has done all in his power, to promote our views & is entitled to our grateful thanks.

Ware houses are building on the place but nothing material can be done without 3000 £. The sum is small & certainly might be raised in Newyork.

The object is great, very great indeed. As Tontine days are coming again, perhaps some of these paper gentry would become part owners.

Wadsworth is a man of enterprize & full of gold.

Mrs. Lees health is worse & worse, I begin to fear the worst.1 She begs you will present her most affecy to her friends Mrs. Colden & Hamilton & unites with me in best wishes for your health & happiness. Yours truely & affy.

Henry Lee.

It is rumoured that Mr. Walter Jones, John Taylor & F. Corbin propose to offer as representative for their district—the first I beleive will not unless Mr. Page shall decline & wishes to become congressional on the principle of Ajaxs prayer for light to die in.2

Jones considers us as irretrevably gone & desires to see the progress of the work.

RC (DLC). Docketed by JM.

1Matilda Lee died 16 Aug. 1790 (Va. Gazette, and Alexandria Advertiser, 19 Aug. 1790).

2The point of Lee’s allusion seems to be that Walter Jones would run for office only for the glory it would add to his old age. John Page in fact continued as a U.S. representative until 1797, when Jones succeeded to his seat in Congress. See Sophocles: Ajax, Loeb Classical Library (1913; Cambridge, Mass., 1967 reprint), pp. 71, 73.

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