James Madison Papers

From James Madison to Cumberland D. Williams, [ca. 22] February 1820

To Cumberland D. Williams

Montpellier [ca. 22] Feby 1820


I have recd. your favour of Jany. 29.1 accompanied by the Pamphlet on the subject of a circulating medium.

I have not found it expedient to bestow on the plan proposed the attention necessary to trace the bearings & operation of new arrangements ingeniously combined on a subject which, in its most simple forms, has produced much discussion among political Economists.

It cannot be doubted that a paper currency rigidly limited in its quantity, to purposes absolutely necessary, may be made equal & even superior in value to specie. But experience does not favor a reliance on such experiments. Wherever the paper has not been convertible into specie and its quantity has depended on the policy of the Govt. a depreciation has been produced by an undue increase, or an apprehension of it. The expedient suggested in the pamphlet has the advantage of tying up the hands of the Govt. but besides the possibility of Legislative interferences bursting the fetters, a discretion vested in a few hands over the currency of the nation and of course over the legal value of its property, is liable to powerful objections, and tho’ confined to a range of 5 PerCt. would still have room for a degree of error or abuse not a little formidable. The idea also of making a foreign currency depending on a foreign will, and the balance of trade always varying and at no time reducible to a certainty & precision, standards for the national currency, would not easily be admitted.

I am sensible, Sir, that these observations must have been included in your examination of the subject; and that they are to be regarded in no other light than as an expression of the respect & acknowlegement which I pray you to accept for your polite communication.

James Madison

RC (MdHi); draft (DLC). RC day of month not indicated; conjectural day assigned based on postmark: “Orange CH 22 Feby 1820.” Addressed and franked by JM to Williams at Baltimore. Docketed by Williams. Minor differences between the copies have not been noted.

1PJM-RS description begins David B. Mattern et al., eds., The Papers of James Madison: Retirement Series (2 vols. to date; Charlottesville, Va., 2009–). description ends 1:595–96.

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