Томас Джефферсон
The Writings of Thomas Jefferson, Vol. 6 (of 9)
TO JOHN ADAMS
Monticello, October 28, 1813.
Dear Sir,—According to the reservation between us, of taking up one of the subjects of our correspondence at a time, I turn to your letters of August the 16th and September the 2d.
The passage you quote from Theognis, I think has an ethical rather than a political object. The whole piece is a moral exhortation, παραινεσις, and this passage particularly seems to be a reproof to man, who, while with his domestic animals he is curious to improve the race, by employing always the finest male, pays no attention to the improvement of his own race, but intermarries with the vicious, the ugly, or the old, for considerations of wealth or ambition. It is in conformity with the principle adopted afterwards by the Pythagoreans, and expressed by Ocellus in another form; περι δε τῆς ἐκ τῶν αλληλων ανθρωπων γενεσεως &c.—ουχ ηδονης ενεκα η μιξις: which, as literally as intelligibility will admit, may be thus translated: "concerning the interprocreation of men, how, and of whom it shall be, in a perfect manner, and according to the laws of modesty and sanctity, conjointly, this is what I think right. First to lay it down that we do not commix for the sake of pleasure, but of the procreation of children. For the powers, the organs and desires for coition have not been given by God to man for the sake of pleasure, but for the procreation of the race. For as it were incongruous, for a mortal born to partake of divine life, the immortality of the race being taken away, God fulfilled the purpose by making the generations uninterrupted and continuous. This, therefore, we are especially to lay down as a principle, that coition is not for the sake of pleasure." But nature, not trusting to this moral and abstract motive, seems to have provided more securely for the perpetuation of the species, by making it the effect of the oestrum implanted in the constitution of both sexes. And not only has the commerce of love been indulged on this unhallowed impulse, but made subservient also to wealth and ambition by marriage, without regard to the beauty, the healthiness, the understanding, or virtue of the subject from which we are to breed. The selecting the best male for a Harem of well chosen females also, which Theognis seems to recommend from the example of our sheep and asses, would doubtless improve the human, as it does the brute animal, and produce a race of veritable ἄριστοι. For experience proves, that the moral and physical qualities of man, whether good or evil, are transmissible in a certain degree from father to son. But I suspect that the equal rights of men will rise up against this privileged Solomon and his Haram, and oblige us to continue acquiescence under the "Αμαυρωσις γενεος αστων" which Theognis complains of, and to content ourselves with the accidental aristoi produced by the fortuitous concourse of breeders. For I agree with you that there is a natural aristocracy among men. The grounds of this are virtue and talents. Formerly, bodily powers gave place among the aristoi. But since the invention of gunpowder has armed the weak as well as the strong with missile death, bodily strength, like beauty, good humor, politeness and other accomplishments, has become but an auxiliary ground of distinction. There is also an artificial aristocracy, founded on wealth and birth, without either virtue or talents; for with these it would belong to the first class. The natural aristocracy I consider as the most precious gift of nature, for the instruction, the trusts, and government of society. And indeed, it would have been inconsistent in creation to have formed man for the social state, and not to have provided virtue and wisdom enough to manage the concerns of the society. May we not even say, that that form of government is the best, which provides the most effectually for a pure selection of these natural aristoi into the offices of government? The artificial aristocracy is a mischievous ingredient in government, and provision should be made to prevent its ascendency. On the question, what is the best provision, you and I differ; but we differ as rational friends, using the free exercise of our own reason, and mutually indulging its errors. You think it best to put the pseudo-aristoi into a separate chamber of legislation, where they may be hindered from doing mischief by their co-ordinate branches, and where, also, they may be a protection to wealth against the Agrarian and plundering enterprises of the majority of the people. I think that to give them power in order to prevent them from doing mischief, is arming them for it, and increasing instead of remedying the evil. For if the co-ordinate branches can arrest their action, so may they that of the co-ordinates. Mischief may be done negatively as well as positively. Of this, a cabal in the Senate of the United States has furnished many proofs. Nor do I believe them necessary to protect the wealthy; because enough of these will find their way into every branch of the legislation, to protect themselves. From fifteen to twenty legislatures of our own, in action for thirty years past, have proved that no fears of an equalization of property are to be apprehended from them. I think the best remedy is exactly that provided by all our constitutions, to leave to the citizens the free election and separation of the aristoi from the pseudo-aristoi, of the wheat from the chaff. In general they will elect the really good and wise. In some instances, wealth may corrupt, and birth blind them; but not in sufficient degree to endanger the society.
It is probable that our difference of opinion may, in some measure, be produced by a difference of character in those among whom we live. From what I have seen of Massachusetts and Connecticut myself, and still more from what I have heard, and the character given of the former by yourself, (vol. 1, page 111,) who know them so much better, there seems to be in those two States a traditionary reverence for certain families, which has rendered the offices of the government nearly hereditary in those families. I presume that from an early period of your history, members of those families happening to possess virtue and talents, have honestly exercised them for the good of the people, and by their services have endeared their names to them. In coupling Connecticut with you, I mean it politically only, not morally. For having made the Bible the common law of their land, they seem to have modeled their morality on the story of Jacob and Laban. But although this hereditary succession to office with you, may, in some degree, be founded in real family merit, yet in a much higher degree, it has proceeded from your strict alliance of Church and State. These families are canonised in the eyes of the people on common principles, "you tickle me, and I will tickle you." In Virginia we have nothing of this. Our clergy, before the revolution, having been secured against rivalship by fixed salaries, did not give themselves the trouble of acquiring influence over the people. Of wealth, there were great accumulations in particular families, handed down from generation to generation, under the English law of entails. But the only object of ambition for the wealthy was a seat in the King's Council. All their court then was paid to the crown and its creatures; and they Philipised in all collisions between the King and the people. Hence they were unpopular; and that unpopularity continues attached to their names. A Randolph, a Carter, or a Burwell must have great personal superiority over a common competitor to be elected by the people even at this day. At the first session of our legislature after the Declaration of Independence, we passed a law abolishing entails. And this was followed by one abolishing the privilege of primogeniture, and dividing the lands of intestates equally among all their children, or other representatives. These laws, drawn by myself, laid the axe to the foot of pseudo-aristocracy. And had another which I prepared been adopted by the legislature, our work would have been complete. It was a bill for the more general diffusion of learning. This proposed to divide every county into wards of five or six miles square, like your townships; to establish in each ward a free school for reading, writing and common arithmetic; to provide for the annual selection of the best subjects from these schools, who might receive, at the public expense, a higher degree of education at a district school; and from these district schools to select a certain number of the most promising subjects, to be completed at an University, where all the useful sciences should be taught. Worth and genius would thus have been sought out from every condition of life, and completely prepared by education for defeating the competition of wealth and birth for public trusts. My proposition had, for a further object, to impart to these wards those portions of self-government for which they are best qualified, by confiding to them the care of their poor, their roads, police, elections, the nomination of jurors, administration of justice in small cases, elementary exercises of militia; in short, to have made them little republics, with a warden at the head of each, for all those concerns which, being under their eye, they would better manage than the larger republics of the county or State. A general call of ward meetings by their wardens on the same day through the State, would at any time produce the genuine sense of the people on any required point, and would enable the State to act in mass, as your people have so often done, and with so much effect by their town meetings. The law for religious freedom, which made a part of this system, having put down the aristocracy of the clergy, and restored to the citizen the freedom of the mind, and those of entails and descents nurturing an equality of condition among them, this on education would have raised the mass of the people to the high ground of moral respectability necessary to their own safety, and to orderly government; and would have completed the great object of qualifying them to select the veritable aristoi, for the trusts of government, to the exclusion of the pseudalists; and the same Theognis who has furnished the epigraphs of your two letters, assures us that "Ουδεμιαν πω, Κυρν', αγαθοι πολιν ωλεσαν ανδρες." Although this law has not yet been acted on but in a small and inefficient degree, it is still considered as before the legislature, with other bills of the revised code, not yet taken up, and I have great hope that some patriotic spirit will, at a favorable moment, call it up, and make it the key-stone of the arch of our government.
With respect to aristocracy, we should further consider, that before the establishment of the American States, nothing was known to history but the man of the old world, crowded within limits either small or overcharged, and steeped in the vices which that situation generates. A government adapted to such men would be one thing; but a very different one, that for the man of these States. Here every one may have land to labor for himself, if he chooses; or, preferring the exercise of any other industry, may exact for it such compensation as not only to afford a comfortable subsistence, but wherewith to provide for a cessation from labor in old age. Every one, by his property, or by his satisfactory situation, is interested in the support of law and order. And such men may safely and advantageously reserve to themselves a wholesome control over their public affairs, and a degree of freedom, which, in the hands of the canaille of the cities of Europe, would be instantly perverted to the demolition and destruction of everything public and private. The history of the last twenty-five years of France, and of the last forty years in America, nay of its last two hundred years, proves the truth of both parts of this observation.
But even in Europe a change has sensibly taken place in the mind of man. Science had liberated the ideas of those who read and reflect, and the American example had kindled feelings of right in the people. An insurrection has consequently begun, of science, talents, and courage, against rank and birth, which have fallen into contempt. It has failed in its first effort, because the mobs of the cities, the instrument used for its accomplishment, debased by ignorance, poverty, and vice, could not be restrained to rational action. But the world will recover from the panic of this first catastrophe. Science is progressive, and talents and enterprise on the alert. Resort may be had to the people of the country, a more governable power from their principles and subordination; and rank, and birth, and tinsel-aristocracy will finally shrink into insignificance, even there. This, however, we have no right to meddle with. It suffices for us, if the moral and physical condition of our own citizens qualifies them to select the able and good for the direction of their government, with a recurrence of elections at such short periods as will enable them to displace an unfaithful servant, before the mischief he meditates may be irremediable.
I have thus stated my opinion on a point on which we differ, not with a view to controversy, for we are both too old to change opinions which are the result of a long life of inquiry and reflection; but on the suggestions of a former letter of yours, that we ought not to die before we have explained ourselves to each other. We acted in perfect harmony, through a long and perilous contest for our liberty and independence. A constitution has been acquired, which, though neither of us thinks perfect, yet both consider as competent to render our fellow citizens the happiest and the securest on whom the sun has ever shone. If we do not think exactly alike as to its imperfections, it matters little to our country, which, after devoting to it long lives of disinterested labor, we have delivered over to our successors in life, who will be able to take care of it and of themselves.
Of the pamphlet on aristocracy which has been sent to you, or who may be its author, I have heard nothing but through your letter. If the person you suspect, it may be known from the quaint, mystical, and hyperbolical ideas, involved in affected, new-fangled and pedantic terms which stamp his writings. Whatever it be, I hope your quiet is not to be affected at this day by the rudeness or intemperance of scribblers; but that you may continue in tranquillity to live and to rejoice in the prosperity of our country, until it shall be your own wish to take your seat among the aristoi who have gone before you. Ever and affectionately yours.
TO JOHN W. EPPES
Monticello, November 6, 1813.
Dear Sir,—I had not expected to have troubled you again on the subject of finance; but since the date of my last, I have received from Mr. Law a letter covering a memorial on that subject, which, from its tenor, I conjecture must have been before Congress at their two last sessions. This paper contains two propositions; the one for issuing treasury notes, bearing interest, and to be circulated as money; the other for the establishment of a national bank. The first was considered in my former letter; and the second shall be the subject of the present.
The scheme is for Congress to establish a national bank, suppose of thirty millions capital, of which they shall contribute ten millions in new six per cent. stock, the States ten millions, and individuals ten millions, one half of the two last contributions to be of similar stock, for which the parties are to give cash to Congress; the whole, however, to be under the exclusive management of the individual subscribers, who are to name all the directors; neither Congress nor the States having any power of interference in its administration. Discounts are to be at five per cent., but the profits are expected to be seven per cent. Congress then will be paying six per cent. on twenty millions, and receiving seven per cent. on ten millions, being its third of the institution; so that on the ten millions cash which they receive from the States and individuals, they will, in fact, have to pay but five per cent. interest. This is the bait. The charter is proposed to be for forty or fifty years, and if any future augmentations should take place, the individual proprietors are to have the privilege of being the sole subscribers for that. Congress are further allowed to issue to the amount of three millions of notes, bearing interest, which they are to receive back in payment for lands at a premium of five or ten per cent., or as subscriptions for canals, roads, and bridges, in which undertakings they are, of course, to be engaged. This is a summary of the case as I understand it; but it is very possible I may not understand it in all its parts, these schemes being always made unintelligible for the gulls who are to enter into them. The advantages and disadvantages shall be noted promiscuously as they occur; leaving out the speculation of canals, &c., which, being an episode only in the scheme, may be omitted, to disentangle it as much as we can.
1. Congress are to receive five millions from the States (if they will enter into this partnership, which few probably will), and five millions from the individual subscribers, in exchange for ten millions of six per cent. stock, one per cent. of which, however, they will make on their ten millions of stock remaining in bank, and so reduce it, in effect, to a loan of ten millions at five per cent. interest. This is good; but
2. They authorize this bank to throw into circulation ninety millions of dollars, (three times the capital,) which increases our circulating medium fifty per cent., depreciates proportionably the present value of a dollar, and raises the price of all future purchases in the same proportion.
3. This loan of ten millions at five per cent., is to be once for all, only. Neither the terms of the scheme, nor their own prudence could ever permit them to add to the circulation in the same, or any other way, for the supplies of the succeeding years of the war. These succeeding years then are to be left unprovided for, and the means of doing it in a great measure precluded.
4. The individual subscribers, on paying their own five millions of cash to Congress, become the depositories of ten millions of stock belonging to Congress, five millions belonging to the States, and five millions to themselves, say twenty millions, with which, as no one has a right ever to see their books, or to ask a question, they may choose their time for running away, after adding to their booty the proceeds of as much of their own notes as they shall be able to throw into circulation.
5. The subscribers may be one, two, or three, or more individuals, (many single individuals being able to pay in the five millions,) whereupon this bank oligarchy or monarchy enters the field with ninety millions of dollars, to direct and control the politics of the nation; and of the influence of these institutions on our politics, and into what scale it will be thrown, we have had abundant experience. Indeed, England herself may be the real, while her friend and trustee here shall be the nominal and sole subscriber.
6. This state of things is to be fastened on us, without the power of relief, for forty or fifty years. That is to say, the eight millions of people now existing, for the sake of receiving one dollar and twenty-five cents apiece, at five per cent. interest, are to subject the fifty millions of people who are to succeed them within that term, to the payment of forty-five millions of dollars, principal and interest, which will be payable in the course of the fifty years.
7. But the great and national advantage is to be the relief of the present scarcity of money, which is produced and proved by,
1. The additional industry created to supply a variety of articles for the troops, ammunition, &c.
2. By the cash sent to the frontiers, and the vacuum occasioned in the trading towns by that.
3. By the late loans.
4. By the necessity of recurring to shavers with good paper, which the existing banks are not able to take up; and
5. By the numerous applications of bank charters, showing that an increase of circulating medium is wanting.
Let us examine these causes and proofs of the want of an increase of medium, one by one.
1. The additional industry created to supply a variety of articles for troops, ammunition, &c. Now, I had always supposed that war produced a diminution of industry, by the number of hands it withdraws from industrious pursuits for employment in arms, &c., which are totally unproductive. And if it calls for new industry in the articles of ammunition and other military supplies, the hands are borrowed from other branches on which the demand is slackened by the war; so that it is but a shifting of these hands from one pursuit to another.
2. The cash sent to the frontiers occasions a vacuum in the trading towns, which requires a new supply. Let us examine what are the calls for money to the frontiers. Not for clothing, tents, ammunition, arms, which are all bought in the trading towns. Not for provisions; for although these are bought partly in the immediate country, bank bills are more acceptable there than even in the trading towns. The pay of the army calls for some cash, but not a great deal, as bank notes are as acceptable with the military men, perhaps more so; and what cash is sent must find its way back again in exchange for the wants of the upper from the lower country. For we are not to suppose that cash stays accumulating there forever.
3. This scarcity has been occasioned by the late loans. But does the government borrow money to keep it in their coffers? Is it not instantly restored to circulation by payment for its necessary supplies? And are we to restore a vacuum of twenty millions of dollars by an emission of ninety millions?
4. The want of medium is proved by the recurrence of individuals with good paper to brokers at exorbitant interest; and
5. By the numerous applications to the State governments for additional banks; New York wanting eighteen millions, Pennsylvania ten millions, &c. But say more correctly, the speculators and spendthrifts of New York and Pennsylvania, but never consider them as being the States of New York and Pennsylvania. These two items shall be considered together.
It is a litigated question, whether the circulation of paper, rather than of specie, is a good or an evil. In the opinion of England and of English writers it is a good; in that of all other nations it is an evil; and excepting England and her copyist, the United States, there is not a nation existing, I believe, which tolerates a paper circulation. The experiment is going on, however, desperately in England, pretty boldly with us, and at the end of the chapter, we shall see which opinion experience approves: for I believe it to be one of those cases where mercantile clamor will bear down reason, until it is corrected by ruin. In the meantime, however, let us reason on this new call for a national bank.
After the solemn decision of Congress against the renewal of the charter of the bank of the United States, and the grounds of that decision, (the want of constitutional power,) I had imagined that question at rest, and that no more applications would be made to them for the incorporation of banks. The opposition on that ground to its first establishment, the small majority by which it was overborne, and the means practiced for obtaining it, cannot be already forgotten. The law having passed, however, by a majority, its opponents, true to the sacred principle of submission to a majority, suffered the law to flow through its term without obstruction. During this, the nation had time to consider the constitutional question, and when the renewal was proposed, they condemned it, not by their representatives in Congress only, but by express instructions from different organs of their will. Here then we might stop, and consider the memorial as answered. But, setting authority apart, we will examine whether the Legislature ought to comply with it, even if they had the power.
Proceeding to reason on this subject, some principles must be premised as forming its basis. The adequate price of a thing depends on the capital and labor necessary to produce it. [In the term capital, I mean to include science, because capital as well as labor has been employed to acquire it.] Two things requiring the same capital and labor, should be of the same price. If a gallon of wine requires for its production the same capital and labor with a bushel of wheat, they should be expressed by the same price, derived from the application of a common measure to them. The comparative prices of things being thus to be estimated and expressed by a common measure, we may proceed to observe, that were a country so insulated as to have no commercial intercourse with any other, to confine the interchange of all its wants and supplies within itself, the amount of circulating medium, as a common measure for adjusting these exchanges, would be quite immaterial. If their circulation, for instance, were of a million of dollars, and the annual produce of their industry equivalent to ten millions of bushels of wheat, the price of a bushel of wheat might be one dollar. If, then, by a progressive coinage, their medium should be doubled, the price of a bushel of wheat might become progressively two dollars, and without inconvenience. Whatever be the proportion of the circulating medium to the value of the annual produce of industry, it may be considered as the representative of that industry. In the first case, a bushel of wheat will be represented by one dollar; in the second, by two dollars. This is well explained by Hume, and seems admitted by Adam Smith, B. 2. c. 2, 436, 441, 490. But where a nation is in a full course of interchange of wants and supplies with all others, the proportion of its medium to its produce is no longer indifferent. Ib. 441. To trade on equal terms, the common measure of values should be as nearly as possible on a par with that of its corresponding nations, whose medium is in a sound state; that is to say, not in an accidental state of excess or deficiency. Now, one of the great advantages of specie as a medium is, that being of universal value, it will keep itself at a general level, flowing out from where it is too high into parts where it is lower. Whereas, if the medium be of local value only, as paper money, if too little, indeed, gold and silver will flow in to supply the deficiency; but if too much, it accumulates, banishes the gold and silver not locked up in vaults and hoards, and depreciates itself; that is too say, its proportion to the annual produce of industry being raised, more of it is required to represent any particular article of produce than in the other countries. This is agreed by Smith, (B. 2. c. 2. 437,) the principal advocate for a paper circulation; but advocating it on the sole condition that it be strictly regulated. He admits, nevertheless, that "the commerce and industry of a country cannot be so secure when suspended on the Dædalian wings of paper money, as on the solid ground of gold and silver; and that in time of war, the insecurity is greatly increased, and great confusion possible where the circulation is for the greater part in paper." B. 2. c. 2. 484. But in a country where loans are uncertain, and a specie circulation the only sure resource for them, the preference of that circulation assumes a far different degree of importance, as is explained in my former letters.
The only advantage which Smith proposes by substituting paper in the room of gold and silver money, B. 2. c. 2. 434, is "to replace an expensive instrument with one much less costly, and sometimes equally convenient;" that is to say, page 437, "to allow the gold and silver to be sent abroad and converted into foreign goods," and to substitute paper as being a cheaper measure. But this makes no addition to the stock or capital of the nation. The coin sent out was worth as much, while in the country, as the goods imported and taking its place. It is only, then, a change of form in a part of the national capital, from that of gold and silver to other goods. He admits, too, that while a part of the goods received in exchange for the coin exported may be materials, tools and provisions for the employment of an additional industry, a part, also, may be taken back in foreign wines, silks, &c., to be consumed by idle people who produce nothing; and so far the substitution promotes prodigality, increases expense and corruption, without increasing production. So far also, then, it lessens the capital of the nation. What may be the amount which the conversion of the part exchanged for productive goods may add to the former productive mass, it is not easy to ascertain, because, as he says, page 441, "it is impossible to determine what is the proportion which the circulating money of any country bears to the whole value of the annual produce. It has been computed by different authors, from a fifth6 to a thirtieth of that value." In the United States it must be less than in any other part of the commercial world; because the great mass of their inhabitants being in responsible circumstances, the great mass of their exchanges in the country is effected on credit, in their merchants' ledger, who supplies all their wants through the year, and at the end of it receives the produce of their farms, or other articles of their industry. It is a fact, that a farmer with a revenue of ten thousand dollars a year, may obtain all his supplies from his merchant, and liquidate them at the end of the year, by the sale of his produce to him, without the intervention of a single dollar of cash. This, then, is merely barter, and in this way of barter a great portion of the annual produce of the United States is exchanged without the intermediation of cash. We might safely, then, state our medium at the minimum of one-thirtieth. But what is one-thirtieth of the value of the annual produce of the industry of the United States? Or what is the whole value of the annual produce of the United States? An able writer and competent judge of the subject, in 1799, on as good grounds as probably could be taken, estimated it, on the then population of four and a half millions of inhabitants, to be thirty-seven and a half millions sterling, or one hundred and sixty-eight and three-fourths millions of dollars. See Cooper's Political Arithmetic, page 47. According to the same estimate for our present population, it will be three hundred millions of dollars, one-thirtieth of which, Smith's minimum, would be ten millions, and one-fifth, his maximum, would be sixty millions for the quantum of circulation. But suppose that instead of our needing the least circulating medium of any nation, from the circumstance before mentioned, we should place ourselves in the middle term of the calculation, to-wit: at thirty-five millions. One-fifth of this, at the least, Smith thinks should be retained in specie, which would leave twenty-eight millions of specie to be exported in exchange for other commodities; and if fifteen millions of that should be returned in productive goods, and not in articles of prodigality, that would be the amount of capital which this operation would add to the existing mass. But to what mass? Not that of the three hundred millions, which is only its gross annual produce, but to that capital of which the three hundred millions are but the annual produce. But this being gross, we may infer from it the value of the capital by considering that the rent of lands is generally fixed at one-third of the gross produce, and is deemed its nett profit, and twenty times that its fee simple value. The profits on landed capital may, with accuracy enough for our purpose, be supposed on a par with those of other capital. This would give us then for the United States, a capital of two thousand millions, all in active employment, and exclusive of unimproved lands lying in a great degree dormant. Of this, fifteen millions would be the hundred and thirty-third part. And it is for this petty addition to the capital of the nation, this minimum of one dollar, added to one hundred and thirty-three and a third or three-fourths per cent., that we are to give up our gold and silver medium, its intrinsic solidity, its universal value, and its saving powers in time of war, and to substitute for it paper, with all its train of evils, moral, political and physical, which I will not pretend to enumerate.
