Econlib

The Library

Other Sites

 Front Page arrow Titles (by Subject) arrow CRAWFORD TO GALLATIN. - The Writings of Albert Gallatin, vol. 2

Return to Title Page for The Writings of Albert Gallatin, vol. 2

Search this Title:

Also in the Library:

Subject Area: Economics
Subject Area: Political Theory

CRAWFORD TO GALLATIN. - Albert Gallatin, The Writings of Albert Gallatin, vol. 2 [1879]

Edition used:

The Writings of Albert Gallatin, ed. Henry Adams (Philadelphia: J.B. Lippincott, 1879). 3 vols.

Part of: The Writings of Albert Gallatin, 3 vols.

About Liberty Fund:

Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


CRAWFORD TO GALLATIN.

Washington, 26th April, 1819.

Dear Sir,—

It is so long since I have received a line from you that I am not entirely certain that you remember there is such a being in existence as myself. Mortifying as this declaration is to my feelings, I am constrained from various considerations to hazard the charge of intrusion by addressing you at this time.

Two days ago I addressed a letter to you, at the request of the president of the Bank of the United States, explaining in general terms the reasons which have rendered it desirable that an arrangement should be made by the bank with the holders of the Louisiana stock in Europe, by which the remittance of the principal of that stock, reimbursable on the 21st of October next, may be delayed until it can be effected with more convenience than at present. The bank contemplated originally the employment of Mr. Sheldon in effecting this arrangement; but when I mentioned the subject to Mr. Adams he objected to it, especially if compensation was to be attached to the service. Two days ago, however, he has informed me that he has no objection to his being employed and receiving a reasonable compensation. As, however, the first determination was communicated to the board, another person has been thought of, and possibly may be eventually employed.

If the board should ultimately fix upon Mr. Sheldon, I hope you will not only consent to his undertaking the execution of the trust, but that you will give him all the aid and assistance which can be afforded without inconvenience. It is a matter of the greatest importance that an arrangement should be effected, and as early as practicable. It is difficult to conceive of the distress which prevails in the commercial cities, resulting from the indispensable necessity to which the banks have been reduced to diminish their discounts.

This process has now been in operation for about nine months, and must be continued for some months longer. Every exertion has been made by the commercial and, indeed, every interest in the community, to meet the pressing demands of the banks, and so far very successfully; but there is just reason to apprehend that if these demands are extended much further a general delinquency will ensue, which will take from it all its odium. Whenever this shall happen, the collection of the revenue will be most seriously affected. If the remittance of two millions of dollars to Europe during the ensuing autumn cannot be avoided, the curtailments of the banks must be continued until that remittance is effected. The danger resulting to the collection of the revenue from the curtailment of bank discounts consequent upon the exportation of specie and the remittance of that part of the moiety of the Louisiana stock held in Europe which was redeemed on the 21st of October last, was foreseen, and a possible deficiency of the revenue suggested, in my annual report to Congress. No measure, however, founded upon that suggestion was introduced in either House during the late session.

As I did not calculate with much confidence that any deficiency would occur, I contented myself with having made the suggestion. Hitherto the collection of the revenue accruing upon merchandise and tonnage has furnished no reason to apprehend any deficiency. The amount of bonds which have been put in suit has not much exceeded—with the exception of the port of Norfolk—the sum ordinarily remaining unpaid; but concurrent representations from all parts of the Union lead me to apprehend that delinquencies to a great amount will occur in the course of the summer and autumn. The fall in the price of every article almost of exportation, and the commercial distress which is said to prevail in the commercial parts of Europe, will probably throw back upon this country an immense amount of bills which have been drawn in the ordinary course of business upon the credit of shipments made of those articles. If these bills should return at the moment when the drawers are making every exertion in their power to meet the demands of the banks,—rendered indispensable to preserve their credit,—something like a general bankruptcy is greatly to be apprehended. No event will have a more favorable influence upon the moneyed and fiscal operations of the nation than an arrangement by which the exportation of two millions of dollars, or the remittance of that sum in bills, can be avoided. It is on this account that I feel more than ordinary solicitude to interest you in the success of the attempt contemplated by the board of directors, which I have explained.

The remittances of the sums redeemed during the last autumn I believe are not yet completed. They have been made upon the most favorable terms, but exchange is every day becoming less favorable. The fall in the price of our principal staples will no doubt render it difficult to remit considerable sums after this period. It is even probable that the rate of exchange may become so unfavorable as to offer some temptation to the exportation of specie to Europe. If this should not be the case, it will be owing to very diminished importations of foreign merchandise during the present year.

The receipts from the public lands in the North-Western States and Territories will be much below those of the last year, owing to the impossibility of obtaining money which can be received at the land offices. How long this state of things will continue cannot be ascertained. Nothing can be more vexatious as long as it does continue.

From the files of the Intelligencer you will have discovered that the last session of Congress was not remarkably tranquil. The events of the Seminole war gave rise to a discussion in one House, and a report in the other, which has excited all the angry passions in the mind of the commanding general and his particular adherents. The deep interest which the President felt in the question was what saved the general from the censure of both Houses. The particular friends of the Secretary of State made the question a rallying-point; and, strange to tell, Clintonianism enlisted itself under the banners of the hero of New Orleans. The support of this party, like everything connected with it, had for its object a quid pro quo. Perhaps the support which he received from that quarter may be traced to the correspondence between Generals Scott and Jackson, which, like everything else in this country, has found its way into the gazettes. I am inclined to believe that the chiefs on both sides have been mutually deceived in their expectations of support. The general, however, has had the advantage, inasmuch as he has received an active support from the Clintonians in his Seminole war, and has repaid that support by insulting the Tammany men, in toasting the governor at a dinner given him in Tammany Hall. This in all probability is the only service which he will ever be able to render Mr. Clinton, and it is at least doubtful whether that has not been injurious to him. It is probable that General Lacock’s reply to the strictures upon the report of the committee of the Senate will produce a paper war, which will be protracted through the summer, and that the subject will be resumed in the Senate during the next session. Unless the changes in that body should be favorable to the general, the report of the last session will be approved. An attempt was indirectly made at the close of the last session to soften the censure contained in the report, by a resolution which was drawn up and shown to such members of the majority as were supposed to be most supple upon that subject; but no recruit was obtained, and the attempt was therefore abandoned.

The Bank of the United States has just determined not to receive from the government its own bills and those of its offices except at the places where they are payable. When tendered under such circumstances, they [are to be] credited to the Treasurer as special deposit until time is afforded the bank to transfer the specie from the issuing to the receiving office.

This determination, you will readily perceive, produces inconveniences and delay, which at this moment are extremely vexatious. It is a mere palliative to gain a little time, and cannot possibly decide the ultimate question of the capacity of the bank to continue specie payments.

Present my respects to Mrs. Gallatin and every member of your family, and believe me to be, with sentiments of the most sincere regard,

Your most obedient servant.