9: April 1815.
After a very unpleasant excursion as far as New York, I returned to Washington on Thursday evening. It is some consolation, however, that I have been able to put all my objects of business in a good train; and I shall be much mistaken, if the machinery of the Treasury be not restored to its regular movements, with the aid of the Banks, in the course of two or three months. I inclose a copy of the plan, which I proposed to the Banks. It has been accepted promptly by the Banks to the South, and those in Baltimore and New-York. It will, also, be accepted by the Banks in Philadelphia, as soon as some difficulty between the creditor and debtor Banks of that City shall be settled. The Banks of Boston, have, for the present, declined accepting the plan, as I expected would be the case. Their Charters compel them to pay their Notes in gold or silver; and a connection with Banks, which pay only in paper, would be fatal to them. The course of trade has hitherto been much in favor of Boston, and, of course, the difference of exchange makes a material obstacle to a general arrangement, connecting the money institutions of the East with those of the South and west. But I think all the New-England States will concur, except Massachusetts. There is no immediate prospect of a change in the course of trade, so as to restore the balance. The vessels which have been sent from the East to the South, went in ballast to remove goods purchased before, or during, the war, and not to make new purchases. The importations from Europe, however, will give life to the markets of New-York, Philadelphia &c and, probably, equalize the exchange, throughout the Atlantic line of commercial cities.
There is less commercial activity in Baltimore, Philadelphia, and New-York, than I expected to see; but I think the reserve is a very good symptom, considering the new state of the world. The Merchants do not know, what cargoes to ship, nor to what markets they can beneficially resort. There are few adventures preparing for China and India; But those have the effect of postponing the resumption of specie payments at the Banks; or, at least, of furnishing an excuse for not resuming them. I do not believe, that the exports of specie will be considerable; as the India trade is now managed, through the medium of credits opened by English Houses, for American Merchants, at Calcutta, and Bengal; and I am told that there are similar accommodations for the trade to Canton. As to specie payments, it is obvious that the Banks, which have taken great sums of State and Treasury Notes, cannot be so soon prepared for that operation, as the Banks which kept aloof from the Treasury during the war. The Banks of the latter description are, therefore, urging those of the former description, to commence the business; and I am afraid of some premature exertion. I have recommended a confidential correspondence between the Banks on the subject; so that whatever may be done, should be done by common consent, and with a determination of mutual support.
With some difficulty, I provided for the payment of the April dividend on the Public debt at Philadelphia, New-York, and Boston; and Notes of Exchange for about £27,000 Sterling have been purchased and remitted towards reimbursing the advances of Messr. Barings Brothers & Co. This Debt being of peculiar urgency, the Notes have been purchased by a sale of Stock at the market price, but the discount upon the exchange will render the bargain a good one. I have received offers for the Loan of 12 millions of dollars payable in Treasury Notes, for stock at 89, at 90, and at 92 per cent; but I have rejected them all. There has evidently been a combination to depress the market price of the Stocks; and a few necessitous speculators have been obliged to sell. There was not, however, a sum of half a million for sale, and the purchasers of the little that has been actually sold, are real purchasers to hold, and not to speculate. I did not hesitate, under these circumstances, to represent to the Treasury Note holders, that I was willing to accept their subscriptions upon just and reasonable terms; but that I could not allow a few Brokers, and small sales, to make a price for 12 millions of dollars. If, therefore, they would suspend at 95, I would attend to the proposals; but if they declined that proposition, which gave them an advantage of 5 per cent, besides the difference of interest, I must postpone paying their demands upon the Treasury, until the revenue enabled me to pay. I think the offer, which I have made, will be accepted; and it will be fortunate to be so relieved from the discredit of the Notes, which are due and unpaid, and from the daily clog of the Notes, which are becoming due.
My attention is now bent upon providing for the payment of the Army on the 1: of May. The Paymaster General reports, that he shall want for that object 4,300,000 Dollars. Of this amount he has in hand 2,000,000 of dollars in Treasury Notes, and a Warrant for 700,000 Dollars, which I am endeavoring to satisfy out of Bank credits. The balance of 1,600,000 Dollars will be furnished in Treasury Notes, or Bank Notes. I have hitherto restrained the issue of the Small Treasury Notes, which are fundable at 7 pCent, to providing for the dividends on the public debt in Boston &c. and to providing for the pay of the Army, at places where I had no Bank credits. It is probable, that this must be my resource to compleat the payment to the Army on the 1: of May, as I cannot hope to see the Bank Plan in operation at so early a day.
The business of the War Department becomes urgent and distressing. I am preparing a general construction of the Act of Congress, with an outline for executing it, which I hope to send to you by Tuesday’s Mail. If you approve of it, I propose addressing the General Officers, who are retained in service, and who will attend at Washington, requesting their aid, - 1st. in organizing the Army: 2d in selecting the Officers: and 3d in designating the military stations. General Scott is now here, and Genl. Brown and General Macomb may be expected early in the ensuing week. I wish you to compleat your selection of the Brigadiers, and that you will permit me at once to announce the arrangement, as it will be advisable to relieve the non-selected officers from all unnecessary suspense. I saw Genl. Ripley in New. York, and was agreably disappointed in his manner and conversation. He is evidently a man of talents, and by all accounts a Soldier. He still urges a revival of the Court of Inquiry, but disclaims all intention to injure Genl. Brown. I have stated to him the impropriety of the proceeding at this time, and he seems willing to conform to your ultimate views of the subject. He asked permission for his health, to pass to the South, and told me, that he would see me in Washington soon after my arrival. If you decide upon General Ripley as the fourth Brigadier, I would suggest the expediency of giving him a brevet rank of Major General, to obviate a difficulty, which is likely to occur, in case another suggestion should be deemed practicable and proper; that is, to offer to some of the Brigadiers the command of Regiments. Genl. Smith of Tennessee, stated, that he and General Blissel, and he believed others, would chearfully accept Regiments, provided no Brigadier General, whom they ranked, was retained in service. The proviso would not operate, as to Generals Scott, Gaines, and Macomb, who are breveted Major Generals, but it would operate as to Genl. Ripley. These are considerations, however, to be weighed, before the course of assigning Brigadiers to Regiments can be adopted A similar assignment of Majors to Companies may be proposed. But in both cases it would appear, that new Commissions must issue, subject to the approbation of the Senate; and the Act of Congress may be thought to contemplate such an organization, as can be completed according to the existing commissions of the Officers. If the course could be pursued, you could provide for Generals Cushing, Smith, Bissel &c without injury to the service, as the rank of Colonel presents fewer cases of merit than any other in the Army. Genl. Winder has just declined being considered as a Candidate to be retained in service. Genl. Boyd is solicitous in the extreme to be retained. Genl. McArthur would merit employment, if a vacancy existed. But of all cases Genl. Wilkinson’s is the most troubling, simply on the face of humanity. He has written and spoken the most lamentable accounts of the consequences of his dismission. Yesterday, however, he intimated, that if it were determined not to retain him, he would be willing to resign; and he spoke of some civil office as an asylum to preserve him from want. I answered nothing to his representations, but that the arrangements were not so compleated as to enable me to speak to him definitively on the subject; but I assured him, that whatever might be the issue of the present question, you felt a kind disposition towards him. General Jackson’s acceptance of the offer to retain him has not been received; and doubts are expressed, whether he will accept it. I think, however, that his controversy with the Louisiana Government will decide him to accept, as the appointment of the President will be probably used as a testimonial of approbation, covering the whole of his conduct. Genl. Scott’s acceptance is recieved, and General Brown’s; but we have no answer from Genl. Macomb.
The Act of Congress provides for "ten thousand men": Are they enlisted men, or are they commissioned Officers, as well as enlisted men? The 5 section seems to require the latter construction, although I wish to adopt the former.
The Act provides for Engineers, Artillery, Infantry, and Riflemen; but what is to be done with the General Staff? The Ordinance Department &c &c.
These enquiries are now suggested, for the benefit of your instructions; but I mean to dwell upon them more particularly in the outline, which I am preparing to submit to you.
Mr. Monroe was so good as to shew to me Mr. Jefferson’s letter, relative to the Expose. I feel much gratified at his approbation. My own opinion, however, is, that if you publish it, the publication should be just as it stands, with all its imperfections. Coming from the Government, it should retain its war spirit and expression. If it is to be changed, I am sure it might throughout be changed for the better. Its only merit with me, is the satisfaction which you have recieved from it.
I request you to do me the favor to present my best respects to Mrs. Madison, and to believe me with every sentiment of attachment and esteem, Dr. Sir, Yrs. most faithfully
DLC: Papers of James Madison, Rives Collection.