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Subject Area: Political Theory

GALLATIN TO JEFFERSON. - Albert Gallatin, The Writings of Albert Gallatin, vol. 1 [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.

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GALLATIN TO JEFFERSON.

Department of Treasury,
[Received] June 18, 1802.

The Bank of Pennsylvania applies for relief; they fall regularly one hundred thousand dollars per week in debt to the Bank of the United States, on account, as they say, of the deposits on account of government made in the last. For a sketch of their situation, compared with that of the Bank of United States, see the within paper. Their cashier is here, come on purpose for assistance. In addition to the effect of governmental deposits, it is evident that they have extended their discounts too far.

They say that these cannot at once be curtailed without ruining their customers, who consist chiefly of retail shopkeepers. Those for whom the Bank United States discounts are generally importers. There are but three means of affording them relief: 1st, write to Bank United States to spare them; 2d, deposit three hundred thousand dollars with them, or direct collector Philadelphia to deposit part of his public moneys with them; 3d, contract with them for part of Dutch debt, which, as we always pay considerably beforehand, will have the effect of a deposit.

I have proposed the last; but if we cannot agree on terms, should either of the two other modes be adopted?

It is proper to prevent the exclusive monopoly in hands of Bank United States, but it is not proper to displease them, because they place instantly our money where we may want it, from one end of the Union to the other, which is done on the tacit condition of our leaving our deposits with them, and because if we shall be hard run and want money, to them we must apply for a loan.1

[1 ]See Mr. Jefferson’s reply in his Correspondence: Writings, vol. iv. p. 439. June 19, 1802.