October 16

[In this letter to Albert Gallatin on October 16, 1815, I argued that the U.S. government will be ruined if private banks are not reined in, noting that relying on private paper currency leaves the nation's wealth at the mercy of its enemies.]

We are undone, my dear Sir, if this banking mania be not suppressed. Aut Carthago, aut Roma delenda est. The war, had it proceeded, would have upset our government; and a new one, whenever tried, will do it. And so it must be while our money, the nerve of war, is much or little, real or imaginary, as our bitterest enemies choose to make it. Put down the banks, and if this country could not be carried through the longest war against her most powerful enemy, without ever knowing the want of a dollar, without dependence on the traitorous classes of her citizens, without bearing hard on the resources of the people, or loading the public with an indefinite burthen of debt, I know nothing of my countrymen. Not by any novel project, not by any charlatanerie, but by ordinary and well-experienced means; by the total prohibition of all private paper at all times, by reasonable taxes in war aided by the necessary emissions of public paper of circulating size, this bottomed on special taxes, redeemable annually as this special tax comes in, and finally within a moderate period,—even with the flood of private paper by which we were deluged, would the treasury have ventured its credit in bills of circulating size, as of five or ten dollars, &c., they would have been greedily received by the people in preference to bank paper. But unhappily the towns of America were considered as the nation of America, the dispositions of the inhabitants of the former as those of the latter, and the treasury, for want of confidence in the country, delivered itself bound hand and foot to bold and bankrupt adventurers and pretenders to be money-holders, whom it could have crushed at any moment.

Even the last half-bold half-timid threat of the treasury, showed at once that these jugglers were at the feet of government. For it never was, and is not, any confidence in their frothy bubbles, but the want of all other medium, which induced, or now induces, the country people to take their paper; and at this moment, when nothing else is to be had, no man will receive it but to pass it away instantly, none for distant purposes. We are now without any common measure of the value of property, and private fortunes are up or down at the will of the worst of our citizens. Yet there is no hope of relief from the legislatures who have immediate control over this subject. As little seems to be known of the principles of political economy as if nothing had ever been written or practised on the subject, or as was known in old times, when the Jews had their rulers under the hammer. It is an evil, therefore, which we must make up our minds to meet and to endure as those of hurricanes, earthquakes and other casualties: let us turn over therefore another leaf.