The farmers have the game in their own hands, and will make it very difficult to lower the prices of their commodities. For want of laborers, there is no great superfluity of the most essential articles raised. These are things of absolute necessity, and must be purchased, as well by the other classes of society as by the public. The farmers, on the contrary, if they do not like the price, are not obliged to sell; because they have almost every necessary within themselves; salt, and one or two more, excepted; which bear a small proportion to what is wanted from them; and which they can obtain, by barter, for other articles equally indispensable. Heavy taxes, it may be said, will oblige them to sell; but they can pay, with a small part of what they have, any taxes our legislatures will venture to impose, or would be able to enforce.
One measure, alone, can counterbalance these advantages of the farmers, and oblige them to contribute their proper quota to the support of Government: a tax in kind.
This ought instantly to begin throughout the States. The present quantity of cash, though nominally enormous, would, in reality, be found incompetent to domestic circulation, were it not that a great part of our internal commerce is carried on by barter. For this reason, it is impossible, by pecuniary taxes, to raise a sum proportioned to the wants of the State. The money is no longer a general representative; and when it ceases to be so, the State ought to call for a portion of the thing represented; or, in other words, to tax in kind. This will greatly facilitate whatever plan of finance is adopted; because it will lessen the expenditures in cash, and make it the easier to retain what is drawn in.
I said the demand for foreign goods is less than it formerly was. I mean there is not a demand for so large a quantity, which the reasons already assigned clearly demonstrate; nor are the exorbitant rates now given any objection to this doctrine. There is an absolute scarcity even in comparison of the present consumption; and, of course, a demand for what there is. But should an importation of two millions sterling take place, the market would be glutted; and there would be no way of keeping up the price, but by making very slow sales. A less quantity would stand no chance of calling in the money, and keeping it in long enough to effect any thing in favor of its credit.
I say nothing about the risk of importation. I do not believe we could obtain a convoy sufficient to justify our hazarding it without the precaution of insurance. But with this expedient we are safe; and must be satisfied with smaller profits for the sake of security.
This is a plan not altogether to be rejected. With prudent management it might enable us to carry on the war two or three years (which, perhaps, is as long as it may last); but if we should expect more from it, the restoration of the currency, we should be disappointed.
The only plan that can preserve the currency, is one that will make it the immediate interest of the moneyed men to co-operate with Government in its support. This country is in the same predicament in which France was previous to the famous Mississippi scheme, projected by Mr. Law. Its paper money, like ours, had dwindled to nothing; and no efforts of the Government could revive it, because the people had lost all confidence in its ability. Mr. Law, who had much more penetration than integrity, readily perceived, that no plan could succeed which did not unite the interest and credit of rich individuals with those of the State; and upon this, he framed the idea of his project, which, so far, agreed in principle with the Bank of England. The foundation was good, but the superstructure too vast. The proprietors aimed at unlimited wealth, and the Government itself expected too much; which was the cause of the ultimate miscarriage of the scheme, and of all the mischiefs that befel the kingdom in consequence.
It will be our wisdom to select what is good in this plan, and in any others that have gone before us; avoiding their defects and excesses. Something on a similar principle in America, will alone accomplish the restoration of paper credit, and establish a permanent fund for the future exigencies of Government.
Article I. The plan I would propose, is that of an American Bank, instituted by authority of Congress for ten years, under the denomination of The Bank of the United States. II. A foreign loan makes a necessary part of the plan; but this I am persuaded we can obtain, if we pursue the proper measures. I shall suppose it to amount to two millions of pounds sterling. This loan to be thrown into the Bank as a part of its stock.
III. A subscription to be opened for two hundred millions of dollars; and the subscribers erected into a Company, to be called The Company of the Bank of the United States.