are inflexible. When this shall have been ascertained, it may be found more eligible to bring in amendments to the existing system rather than to propose an entirely new law. It seems, indeed, impracticable to overset in one session a system consolidated by the progressive legislation of a number of years; and was it not for the threatening attitude of the South, to check the progress of the system and to divest it of its most obnoxious features would be a great deal for one session, and perhaps enough altogether. Respecting the gradual reduction of duties, and the time necessary to effect it without inflicting a severe injury on vested interests, I have made no suggestion, as this must necessarily be arranged by mutual agreement on the spot. The rates of duties I have suggested are those to be, in my opinion of a compromise, ultimately and permanently adopted.

Under existing circumstances I would almost despair of succeeding in effecting a compromise without the aid of the Executive. Whatever the abstract opinions of the President may be respecting the policy of the tariff, I have no doubt of his disposition, in the present crisis, to promote such conciliatory plan as will appear to him rational.

In what manner this should be done it is not for me to say; but it is extremely desirable that you should, so far as is practicable, act in concert with the Secretary of the Treasury. I cannot but believe, also, that you will find a disposition to conciliate on the part of the Senators and of several members of the delegations of Pennsylvania and New York. The most difficult. and yet the most important point to obtain is a great reduction of the duty on wool. I see with satisfaction that that on flax is abandoned. The principle is the same with respect to hemp, and more or less to every raw material. I insist the more on that point, because my agricultural bias had originally induced me [to] lean to a contrary opinion, and it is experience which has satisfied me of my mistake, and that on that point, at least, the general opinion was correct.

Permit me to add that such is your high and justly-deserved standing with all parties, that if you fail in the attempt there is indeed but little hope of a satisfactory arrangement of this momentous question. Entertaining a just sense of the confidence

you have placed in me by applying for such information on the subject as I might possess, I cannot but regret my not being able to supply you with better materials. Any further explanation within my power will be cheerfully given at any time when requested.

I have the honor, &c.

GALLATIN TO LEONARD JARVIS.

NEW YORK, October 22, 1832.

SIR, I received on Saturday your letter of the 15th instant, in which you inform me that I am reported to have said, 1st, that General Jackson's opinion had been that the decision of the King of the Netherlands was not binding on the United States; 2dly, that he was willing to give up a part of the territory of Maine to secure re-election.

I never said any such thing: the first allegation is founded in error, and the other is altogether destitute of foundation.

1. In June, 1829, at the time of laying before the President the first statement respecting the North-Eastern boundary, which had been prepared by Mr. Preble and myself, I gave him verbally a brief history of the case, with which he was not then thoroughly acquainted; and in the course of the conversation he expressed a doubt of the propriety of having at all consented to submit the subject of difference to the arbitration of a foreign power. This was a question already decided, and quite distinct from that of abiding by the award after having assented to the arbitration.

It is my sincere conviction that the decision of the King of the Netherlands, being on the face of it inconsistent with the description of the boundary in the treaty of 1783, is not binding on the United States. This opinion I have freely expressed, but as my own, and not at all as being or ever having been that of the President. The fact on which it is founded is the award itself; and from the last day of December, 1829, when I left Washington, that is to say, fifteen months before the decision of

the King of the Netherlands was made and known,-I have not seen the President, nor, directly or indirectly, received from him any intimation on that or any other subject whatever. It is my earnest wish that the difficulties with which the case is now embarrassed may be surmounted; but I am altogether unacquainted with the course our government intends to pursue.

2. The supposition that I could have said that General Jackson was willing to give up a part of the territory of Maine to secure his election is a glaring absurdity; since it is manifest that such a course would injure it in Maine without promoting it in a single quarter of the Union. But the opinion thus ascribed to me is the very reverse of that which I entertain of the President. So far from being willing to sacrifice for that purpose the interest of the United States or of any State (a kind of negative praise to which almost every public man in America is equally entitled), it is a conspicuous trait of his character that at all times, on all occasions, and even on subjects of minor importance, General Jackson fearlessly avows and acts in conformity with his opinions, with a total disregard of the effect it may have on his popularity and re-election.

P.S.-I have only taken notice of the allegations specified in your letter. It may be proper to add that I wish that the President had found it consistent with his duty to reject the award without submitting it to the Senate; that I have regretted the steps taken by the Legislature of Maine in relation to an equivalent from the United States; and that I have not concealed those sentiments.

GALLATIN TO HORSLEY PALMER.

NEW YORK, May 1, 1833.

DEAR SIR,-I received about three months ago, without knowing to whom I was indebted for the favor, a copy of the "Evidence taken by the committee on the of the charter of the Bank of England." letter of 12th December last reached me

subject of the renewal Your very acceptable much later, the ship

having been compelled to put back in distress in an Irish port, where she was detained several weeks. I return you my thanks for both. The first contains a body of invaluable information, and you need not have claimed indulgence for your evidence, which is not less luminous in the exposition of facts than correct in the principles it sustains. Your letter throws additional light on the subject, and the questions you propose embrace every essential branch of that complex inquiry. For that very reason I hesitated whether I should attempt to enter into the discussion or do anything more than to acknowledge the receipt of your favor. I feel some confidence in the soundness of my opinions on the subject of currency as applied to the United States; but I am not competent to judge for other countries. Some general principles must, if true, be indeed applicable everywhere, but they are few, and must, in most cases, be modified by the situation, and perhaps as much by the habits, of every country respectively.

Thus, for instance, we have, from the necessity of the case, uniformly departed from that which is in Europe considered as an essential banking principle. The increase of our population and the unparalleled spirit of enterprise of this nation have always been far in advance of the accumulation of capital. That of the banks has always been required for the immediate aid of commercial undertakings. That of the Bank of the United States, as well as that of the State banks, is, in addition to the issues and deposits, applied almost exclusively in discounting private bills and promissory notes. The portion vested permanently in public stocks and real estate is so inconsiderable that it need not be taken into consideration. I believe that at this moment those private discounts by incorporated banks amount to about 250 millions of dollars, of which less than one hundred rest on issues and deposits, or, in other words, on the principle of borrowing with one hand and lending with the other.

The residue is, in fact, the loan of the capital itself of the banks; and it could not be withdrawn from that employment without bringing universal ruin and arresting the progress of our commercial and manufacturing industry. That credit has

in too many instances been far too much extended (particularly in the interior) is indubitable; but it is not less true that capital was drawn in that direction because it could not be employed as profitably in any other way; and that more is still wanted for the same purpose is proved by the fact that there is not enough to discount good short paper at 6 per cent.

Another important difference between the United States and Great Britain arises from the peculiar form of our government. Our paper system, and therefore our currency, is under the control of twenty-four different legislative bodies, which, although forbidden to issue paper money in the name and on the credit of the individual States, authorize its issue by the joint stock companies they incorporate, and even in some cases do it on their own credit through the medium of nominal banks, which are only subordinate offices of their treasury. But even when acting on sounder principles, it is impossible to expect, from so many independent legislatures, any uniformity, any system that will bring every description of paper currency under the same regulations and restrictions. The Bank of the United States must not be considered as affording a complete remedy, but as the best and most practicable which can be applied. Its object is not to substitute its paper for that of the several State banks, which cannot either legally or in fact be done to any considerable extent, but so to control by its operations those of the other institutions as to keep their issues within reasonable bounds, and thereby give solidity and an uniform value to the whole mass. In order to do this it is, of course, necessary that the issues of that bank should be extremely moderate and its treasure considerable. It had acted on that principle and had been irreproachable in that respect as late as November, 1830, when I wrote the essay on our currency which you have seen. The inconsiderate subsequent extension of their loans and issues, and consequent diminution of their treasure, has not escaped your observation; and their conduct in that circumstance has been attended with worse consequences to the bank than you could be aware of, by affording a strong argument against the renewal of the charter.

When, therefore, you ask whether I think a single bank of