But it will be asked, are we to have no banks? Are merchants and others to be deprived of the resource of short accommodations, found so convenient? I answer, let us have banks: but let them be such as are alone to be found in any country on earth, except Great Britain. There is not a bank of discount on the continent of Europe (at least there was not one when I was there), which offers any thing but cash in exchange for discounted bills. No one has a natural right to the trade of a money-lender, but he who has the money to lend. Let those then among us, who have a monied capital, and who prefer employing it in loans rather than otherwise, set up banks, and give cash or national bills for the notes they discount. Perhaps, to encourage them, a larger interest than is legal in the other cases might be allowed them, on the condition of their lending for short periods only. It is from Great Britain we copy the idea of giving paper in exchange for discounted bills: and while we have derived from that country some good principles of government and legislation, we unfortunately run into the most servile imitation of all her practices, ruinous as they prove to her, and with the gulph yawning before us into which those very practices are precipitating her. The unlimited emission of bank-paper has banished all her specie, and is now, by a depreciation acknowledged by her own statesmen, carrying her rapidly to bankruptcy, as it did France, as it did us, and will do us again, and every country permitting paper to be circulated, other than that by public authority, rigorously limited to the just measure for circulation. Private fortunes, in the present state of our circulation, are at the mercy of those self-created money-lenders, and are prostrated by the floods of nominal money with which their avarice deluges us. He who lent his money to the public or to an individual, before the institution of the United States bank, twenty years ago, when wheat was well sold at a dollar the bushel, and receives now his nominal sum when it sells at two dollars, is cheated of half his fortune: and by whom? By the banks, which, since that, have thrown into circulation ten dollars of their nominal money where there was one at that time.
Reflect, if you please, on these ideas, and use them or not as they appear to merit. They comfort me in the belief, that they point out a resource ample enough, without overwhelming war-taxes, for the expense of the war, and possibly still recoverable; and that they hold up to all future time a resource within ourselves, ever at the command of government, and competent to any wars into which we may be forced. Nor is it a slight object to equalize taxes through peace and war.
Ever affectionately yours.
Th: Jefferson.
LETTER CXI.—TO JOHN ADAMS, June 21, 1813
TO JOHN ADAMS.
Monticello, June 21, 1813.