James Madison Papers

To James Madison from James Gartland, 3 January 1811 (Abstract)

§ From James Gartland

3 January 1811, Philadelphia. As a naturalized citizen who emigrated from Dublin because the U.S. laws and constitution were “more congenial to my feelings,” thinks himself duty bound to submit a statement on the renewal of the charter for the Bank of the United States. Believes the public has not reflected on this matter, otherwise it would not support a petition “which has such a tendency of draining the Country of its Treasure & Wealth.” Calculates that the bank stockholders under the last charter have averaged profits of 8 percent over and above the expenses of obtaining the charter. If the charter were to be renewed for a further twenty years, the net gain to the stockholders, at 8 percent interest compounded, would amount to $124,800,000 over the forty-year period. This is a bounty in favor of the English, which neither the English nor the French would suffer in favor of Americans.

Advocates a different banking system by which the 8 percent would benefit the U.S., with each state’s capital to be invested in the legislature and to increase in proportion to its population every seventh or tenth year. This would make “one of the greatest Establishments that ever appeared” and could also provide the government with paper money in time of war. Describes a method he devised using transparent ink to prevent enemies from forging this paper. His plan supposes that eighteen states have a capital of $30 million, compounding at 8 percent annually, from which Congress could borrow $6 million at 6 percent per annum. At the end of twenty years, the government would have a net gain of $10,640,264.20 after liquidating the loan and its interest. At the renewal of the bank charter, the government would have a “respectable Capital” in new funds on which it would have to pay no interest. At 8 percent compound interest, at the end of the second twenty-year charter the government would have $27,664,686.92.

Calculates the portion the states would have in this capital according to their population and estimates that $24 million at 8 percent compound interest would increase to $62,400,000 in the first twenty years and to $162,240,000 in the second twenty years, resulting in a net gain for the states of $138,240,000. “This is the favour that those who prefer the Interest of England to that of this Country prays Congress to grant in favour of England & English Agents.” Offers to convey further details of his scheme through his son, Simon Gartland, who is at Georgetown College. Describes the proposed recharter plan as “similar to that which had been advocated by the corrupt Legislatures of the Irish Parliament, that Ireland would become more powerful, rich & happy by having the whole income of the landed Property of Ireland spent in London, than by having it spent in Dublin.” Argues that the plea of “necessity” to justify recharter of the present bank will always exist and will increase “at the lapse of every Cycle of 20 years which may revolve forever.” If the world continues for about another three thousand years, the bank stockholders, at their present rate of earnings, would make $5,446,801,905,834,287,424 million by March 2561, “and all this would be raised on the Country without the present stockholders having one single Dollar of English Capital in the fund.”

RC (DLC). 3 pp. Cover bears Gartland’s note, “in Person.”

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