Mont Pelier July 4. 1816.
I have received yours of the 29th. of June, with the several papers sent with it.
Under the difficult circumstances of the currency, and the obligation to attempt a remedy or at least an alleviation of them, the place you have in view is entitled to a fair experiment. You do right however in reserving a discretion to judge of the sufficientcy of accessions by the State Banks. Should there be a single State, in which a failure of its Banks to accede, should reduce the people to the necessity of paying their taxes in coin or, treasury notes, or a bank paper out of their reach, the pressure and complaint would be intense, and the more so from the inequality with which the measure would operate.
Can the Suspension of payments in coin by the principal Banks be regarded as the precise cause of the undue depreciation of treasury notes, as intimated in the 3d. parragraph of your circular? A slight modification, if you think it requisite, would obviate the remark.
As your statement to the President will remain an Official document, I suggest for your consideration, the expression that the Treasury "cannot discriminate in the mode of payment between the revenue of customs, and the internal revenue" as liable to be turned against the distinction proposed in the payment of them.
With respect to the validity of this distinction, I should yeild my doubts if they were stronger than they are, to the unanimous opinion which has sanctioned it.
I anxiously wish that the State Banks may enter promptly and heartily into the means of reestablishing the proper currency. Nothing but their general co-operation, is wanting for the purpose; and they owe it to their own character, and ultimately to their own interest, as much as they do to the immediate and vital interests of the nation. Should they sacrifice all these powerful obligations to the unfair gain of the moment, it must remain with the State legislatures to apply the remedy in their hands; and it is to be hoped that they will not be diverted from it either by their share in the gains of the Banks, or the influence of the Banks on their deliberations. If they will not enforce the obligations of the Banks to redeem their notes in Specie, they cannot Surely forbear to enforce the alternatives of redeeming them with public Stock, or with National Bank notes, or finally of paying interest on all their notes presented for payment. The expedient also of restricting their circulating paper in a reasonable proportion to their metallic fund, may merit attention, as at once aiding the credit of their paper, and accelerating a resumption of Specie payments.
I enclose the papers A. B. & C to guard against the possibility, that you may not have copies of them with you. Accept my esteem & cordial respects