Everything predicted by the enemies of banks, in the beginning, is now coming to pass. We are to be ruined now by the deluge of bank paper, as we were formerly by the old Continental paper. It is cruel that such revolutions in private fortunes should be at the mercy of avaricious adventurers, who, instead of employing their capital, if any they have, in manufactures, commerce, and other useful pursuits, make it an instrument to burthen all the interchanges of property with their swindling profits, profits which are the price of no useful industry of theirs. Prudent men must be on their guard in this game of Robin's alive, and take care that the spark does not extinguish in their hands. I am an enemy to all banks discounting bills or notes for anything but coin. But our whole country is so fascinated by this Jack-lantern wealth, that they will not stop short of its total and fatal explosion.
~~Thomas Jefferson to Dr. Thomas Cooper, 1814
The enormous abuses of the banking system are not only prostrating our commerce, but producing revolution of property, which without more wisdom than we possess, will be much greater than were produced by the Revolutionary paper. That, too, had the merit of purchasing our liberties, while the present trash has only furnished aliment to usurers and swindlers.
~~Thomas Jefferson to Richard Rush, 1819
The bank mania is raising up a moneyed aristocracy in our country which has already set the government at defiance, and although forced at length to yield a little on this first essay of their strength, their principles are unyielded and unyielding. These have taken deep root in the hearts of that class from which our legislators are drawn, and the sop to Cerberus from fable has become history. Their principles lay hold of the good, their pelf of the bad, and thus those whom the Constitution had placed as guards to its portals, are sophisticated or suborned from their duties.
~~Thomas Jefferson to Dr. J. B. Stuart, 1817
It is a litigated question, whether the circulation of paper, rather than of specie, is a good or an evil. In the opinion of England and of English writers it is a good; in that of all other nations it is an evil; and excepting England and her copyist, the United States, there is not a nation existing, I believe, which tolerates a paper circulation. The experiment is going on, however, desperately in England, pretty boldly with us, and at the end of the chapter, we shall see which opinion experience approves: for I believe it to be one of those cases where mercantile clamor will bear down reason, until it is corrected by ruin.
~~Thomas Jefferson, letter to J. W. Eppes, 1813
I have ever been the enemy of banks, not of those discounting for cash, but of those foisting their own paper into circulation, and thus banishing our cash. My zeal against those institutions was so warm and open at the establishment of the Bank of the United States, that I was derided as a maniac by the tribe of bank-mongers, who were seeking to filch from the public their swindling and barren gains.
~~Thomas Jefferson to John Adams, 1814
I am an enemy to all banks discounting bills or notes for anything but coin.
Thomas Jefferson to Dr. Thomas Cooper, 1814
The failure of some stock gamblers and some other circumstances, have brought the public paper low. The 6 per cents have fallen from 26 to 211-4, and bank paper stock from 115 or 120 to 73 or 74, within two or three weeks. This nefarious business is becoming more and more the public detestation, and cannot fail, when the knowledge of it shall be sufficiently extended, to tumble its authors headlong from their heights.
~~Thomas Jefferson, letter to William Short, 1792
Like a dropsical man calling out for water, water, our deluded citizens are clamoring for more banks, more banks. The American mind is now in that state of fever which the world has so often seen in the history of other nations. We are under the bank bubble, as England was under the South Sea bubble, France under the Mississippi bubble, and as every nation is liable to be, under whatever bubble, design or delusion may puff up in moments when off their guard.
~~Thomas Jefferson to Charles Yancey, 1816
Jefferson on central banks:
"This institution is one of the most deadly hostility existing, against the principles and form of our Constitution. The nation is, at this time, so strong and united in its sentiments, that it cannot be shaken at this moment. But suppose a series of untoward events should occur, sufficient to bring into doubt the competency of a republican government to meet a crisis of great danger, or to unhinge the confidence of the people in the public functionaries: an institution like this, [like today's Federal Reserve] penetrating by its branches every part of the Union, acting by command and in phalanx, may, in a critical moment, upset the government. I deem no government safe which is under the vassalage of any self-constituted authorities, or any other authority than that of the nation, or its regular functionaries. What an obstruction could not this Bank of the United States, with all its branch banks, be in time of war? It might dictate to us the peace we should accept, or withdraw its aids. Ought we then to give further growth to an institution so powerful, so hostile?
That it is so hostile we know: 1, from a knowledge of the principles of the persons composing the body of directors in every bank, principal or branch; and those of most of the stockholders; 2, from their opposition to the measures and principles of the government, and to the election of those friendly to them; and 3, from the sentiments of the newspapers they support. Now, while we are strong, it is the greatest debt we owe to the safety of our Constitution, to bring its powerful enemy to a perfect subordination under its authorities. The first measure would be to reduce them to an equal footing only with other banks, as to the favors of the government. But, in order to be able to meet a general combination of the banks against us, in a critical emergency, could we not make a beginning towards an independent use of our own money, towards holding our own bank in all the deposits where it is received, and letting the treasurer give his draft or note, for payment at any particular place, which, in a well-conducted government, ought to have as much credit as any private draft, or bank note, or bill, and would give us the same facilities which we derive from the banks?
~~Thomas Jefferson To Albert Gallatin, 1803
Private fortunes, in the present state of our circulation, are at the mercy of those selfcreated money-lenders, and are prostrated by the floods of nominal money with which their avarice deluges us. He who lent his money to the public or to an individual, before the institution of the United States Bank, twenty years ago, when wheat was well sold at a dollar the bushel, and receives now his nominal sum when it sells at two dollars, is cheated of half his fortune; and by whom? By the banks, which, since that, have thrown into circulation ten dollars of their nominal money where there was one at that time.
~~Thomas Jefferson to John W. Eppes, 1813
It was impossible the Bank and paper mania should not produce great and extensive ruin. The President is fortunate to get off just as the bubble is bursting, leaving others to hold the bag. Yet, as his departure will mark the moment when the difficulties begin to work, you will see, that they will be ascribed to the new administration, and that he will have his usual good fortune of reaping credit from the good acts of others, and leaving to them that of his errors.
~~Thomas Jefferson to James Madison, Jan. 1797
The bank filled and overflowed in the moment it was opened. Instead of twenty thousand shares, twenty-four thousand were offered, and a great many were presented, who had not suspected that so much haste was necessary. Thus it is that we shall be paying 13 per cent, per ann. for eight millions of paper money, instead of having that circulation of gold and silver for nothing. Experience has proved to us that a dollar of silver disappears for every dollar of paper emitted; and, for the paper emitted from the bank, seven per cent. profits will be received by the subscribers for it as bank paper (according to the last division of profits by the Philadelphia bank), and six per cent. on the public paper of which it is the representative. Nor is there any reason to believe, that either the six millions of public paper, or the two millions of specie deposited, will not be suffered to be withdrawn, and the paper thrown into circulation. The cash deposited by strangers for safe keeping will probably suffice for cash demands.
~~Thomas Jefferson to James Monroe, 1791
The flood of paper money had produced an exaggeration of nominal prices, and at the same time a facility of obtaining money, which not only encouraged speculations on fictitious capital, but seduced those of real capital, even in private life, to contract debts too freely. Had things continued in the same course, these might have been manageable; but the operations of the United States bank for the demolition of the State banks obliged these suddenly to call in more than half their paper, crushed all fictitious and doubtful capital, and reduced the prices of property and produce suddenly to one-third of what they had been.
~~Thomas Jefferson to Albert Gallatin, 1820
Bump for afternoon reading with a hearty Thank You!