ed on a
redeeming tax, but bearing no interest. These were readily received, and
never depreciated a single farthing. In the revolutionary war, the old
Congress and the States issued bills without interest, and without
tax. They occupied the channels of circulation very freely, till
those channels were overflowed by an excess beyond all the calls of
circulation. But although we have so improvidently suffered the field of
circulating medium to be filched from us by private individuals, yet I
think we may recover it in part, and even in the whole, if the States
will co-operate with us. If treasury bills are emitted on a tax
appropriated for their redemption in fifteen years, and (to insure
preference in the first moments of competition) bearing an interest of
six per cent., there is no one who would not take them in preference
to the bank-paper now afloat, on a principle of patriotism as well as
interest: and they would be withdrawn from circulation into private
hoards to a considerable amount. Their credit once established, others
might be emitted, bottomed also on a tax, but not bearing interest: and
if ever their credit faltered, open public loans, on which these bills
alone should be received as specie. These, operating as a sinking fund,
would reduce the quantity in circulation, so as to maintain that in an
equilibrium with specie. It is not easy to estimate the obstacles which,
in the beginning, we should encounter in ousting the banks from their
possession of the circulation: but a steady and judicious alternation of
emissions and loans, would reduce them in time. But while this is going
on, another measure should be pressed, to recover ultimately our right
to the circulation. The States should be applied to, to transfer
the right of issuing circulating paper to Congress exclusively, _in
perpetuum_, if possible, but during the war at least, with a saving of
charter rights. I believe that every State west and south of Connecticut
river, except Delaware, would immediately do it; and the others would
follow in time.

Congress would, of course, begin by obliging unchartered banks to wind
up their affairs within a short time, and the others as their charters
expired, forbidding the subsequent circulation of their paper. This they
would supply with their own, bottomed, every emission, on an adequate
tax, and bearing or not bearing interest, as the state of the public
pulse should indicate. Even in the non-complying State