Albany, Sept. 21, 1782.
Sir:
The hurry in which I wrote to you by the last post, prevented my
examining particularly the papers which I informed you I had received.
On a more careful inspection of them, I found them not so complete as
I had hoped. There is a general state of specific supplies; but the
returns referred to in that for the particulars, were by some mistake
omitted. I have written for them, but they have not yet arrived; when
they do, I shall lose no time in forwarding them.
I observe there is nothing respecting transportation; and there is a
part of the supplies for the period before Col. Hay came into office,
which is estimated on a scale of proportion--too vague a method
to be satisfactory. I have urged him to send me an account of the
transportation, and to collect, as speedily as possible, official
returns of the supplies above mentioned.
There is a practice obtaining which appears to me to contravene your
views. The Contractors, I am informed, have gotten into a method of
carrying your bills immediately to the Collectors and drawing the
specie out of their hands, by which means the paper never goes into
circulation at all; but passes, so to speak, immediately out of one
hand of the public into the other. The people, therefore, can never be
familiarized to the paper, nor can it ever obtain a general currency.
If the specie were to come into the Receivers’ hands, and the
Contractors were left under a necessity of exerting their influence to
induce the inhabitants to take your notes, to be afterwards redeemed by
the Receivers agreeably to your plan, this would gradually accustom the
people to place confidence in the notes; and though the circulation at
first should be momentary, it might come to be more permanent.
I am in doubt, whether on the mere speculation of an evil, without your
instructions, I ought to take any step to prevent this practice. For,
should I forbid the exchange, it might possibly cause a suspicion that
there was a preference of the paper to the specie, which might injure
its credit.
I have thought of a method to prevent, without forbidding it in direct
terms. This was to require each collector to return the names of the
persons from whom he received taxes, and in different columns, specify
the kind of money, whether specie, your notes, or bank notes, in which
the tax was paid; giving the inhabitants receipts accordingly; and
paying in money in the same species in which it was received. This
would cover the object.
I have tried to prevail upon the county treasurer of this place, to
instruct the collectors accordingly; but the great aim of all these
people is to avoid trouble; and he affected to consider the matter as a
Herculean labor. Nor will it be done without a legislative injunction.
A method of this kind would tend much to check fraud in the collectors;
and would have many good consequences.
I thought it my duty, at any rate, to apprise you of the practice,
that, if my apprehensions are right, it may not be continued without
control. I have reason to believe it is very extensive--by no means
confined to this State.
Permit me to make one more observation. Your notes, though in credit
with the merchants by way of remittance, do not enter far into ordinary
circulation, and this principally on account of their size; which even
makes them inconvenient for paying taxes. The taxes of very few amount
to twenty dollars a single tax; and though the farmers might combine to
sell their produce for the notes, to pay the taxes jointly; yet this is
not always convenient, and will seldom be practised. If the notes were,
in considerable part, of five, eight, or ten dollars, their circulation
would be far more general; the merchants would, even in their retail
operations, give specie in exchange for balances; which few of them
care to do, or can do, with the larger notes; though they are willing
to take them for their goods.
A. Hamilton.