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18. A Uniform System of Currency
he act by which Mr. Jefferson chiefly distinguished himself in his second Congressional course was the establishment of a money unit and a uniform system of currency for the United States. The interesting fact is not always acknowledged in this country that Mr. Jefferson was the father of this nation's admirable system of coinage and currency. In the volumes that have been written on this great man, many omit any allusion to the circumstance; and yet, it is one of the noblest commentaries on the versatility of his powers. The historical circumstances attending the preparation and final adoption of his scheme are of some curiosity as showing the disparity of views which prevailed on the subject.
Early in January, 1782, Congress had turned their attention to the variety and discordancy of moneys current in the several States and had directed their financier, Robert Morris, to report to them a table of the different currencies and of the rates at which foreign coins should be received at the treasury. That officer, or rather his assistant, Governeur Morris, answered them the same month in an able and elaborate statement of the denominations of money current in the several States and of the comparative value of the foreign coins chiefly in circulation among us. He went also into the consideration of the necessity of establishing a fixed standard of value with us and of adopting a money unit. He proposed for that unit such a fraction of pure silver as would be a common measure of the penny of every State without leaving a fraction. This common divisor he found to be 1/1440 of a dollar, or 1/1600 of a crown sterling. The value of a dollar, therefore, was to be expressed by 1440 units and of a crown by 1600, each unit containing a quarter of a grain of fine silver. The following year, 1783, Congress again turned their attention to the subject, and the financier, by a letter of April 30, further explained his idea and urged the unit he had proposed; but nothing more was done on it until the early part of the ensuing year, 1784, when, Mr. Jefferson having become a member, the subject was referred to a committee of which he was made chairman.
"The general views of the financier were sound," says he, "and the principle was ingenious on which he proposed to found his Unit. But it was too minute for ordinary use, too laborious for computation either by the head or in figures. The price of a loaf of bread, 1/20 of a dollar, would be 72 units. A pound of butter, 1/5 of a dollar, 288 units. A horse or bullock of eighty dollars value would require a notation of six figures, to wit, 115,200, and the public debt, suppose of eighty millions, would require twelve figures, to wit, 115,200,000,000 units. Such a system of money-arithmetic would be entirely unmanageable for the common purposes of society. I proposed, therefore, instead of this to adopt the Dollar as our unit of account and payment, and that its divisions and subdivisions should be in the decimal ratio. I wrote some notes on the subject, which I submitted to the consideration of the financier. I received his answer and adherence to his general system, only agreeing to take for his Unit 100 of those he first proposed, so that a Dollar should be 14 40/100 and a crown 16 units. I replied to this and printed my notes and reply on a flying sheet, which I put into the hands of the members of Congress for consideration, and the Committee agreed to report on my principle. This was adopted the ensuing year and is the system which now prevails." (Autobiography, 1821. ME 1:78)
The money system recommended by Mr. Jefferson and adopted by Congress in 1785 soon almost entirely superseded the various and perplexing currencies which formerly prevailed in the different States and established a uniformity of computation among them. For soundness and simplicity, easy computation, and facility of introduction among the people, it is probably unequaled by any system now in use in any other nation. A tolerable estimate of its advantages over the currencies of other States may be formed on an examination of the views of the author as drafted by himself at the time and submitted to the consideration of the committee.
s might be expected, the return to the national councils of so distinguished a man as Mr. Jefferson drew upon him an unusual proportion of public business. The journals of the house place him continually in the foreground of the concentrated wisdom of the nation. He was on all the committees to whom concerns of the highest moment were entrusted and was twice in one month elected chairman of Congress during the absence, from indisposition, of the President.
He was appointed chairman of a grand committee to revise the institution of the treasury department and report such alterations as they should deem proper. The business of this committee was emphatically to reduce order out of chaos. The finances of the country were in a most deplorable condition. No adequate system had been devised for meeting the constant and increasing requisitions upon the treasury. And no compulsory power existed in Congress over the States, many of whom being dissatisfied with their quotas refused to contribute altogether, and none appeared to have the means at command for satisfying the demands made upon them. The peace and harmony of the union were manifestly in danger. Mr. Jefferson entered upon the arduous trust with great zeal and fidelity and draughted an able report on the subject in the form of a circular letter to the supreme executive of the several States, which report was unanimously adopted. He likewise reported from the same committee the draught of an ordinance for erecting the department of finance into a commission under the title of "The Board of Treasury," which was adopted.
He was appointed chairman of a committee to prepare and report to Congress the arrears of interest on the national debt with the interest and expenses of the current year, and to adjust an equitable apportionment of the whole demand among the several States. He drew the report of the committee: it was an elaborate performance, embracing a full and comprehensive review of the various debts of the union, the interest due thereon, with the expenses of the current year, and exhibiting by a table annexed an apportionment of the necessary requisitions upon the several States for defraying the amount. The report was accepted and passed.
He was appointed chairman of a committee to devise and report a plan of government for the western territories. He drew the ordinance on a principle analogous to the State governments and reported it to the house where, after going through the ordinary course, it was adopted with few alterations. He improved the occasion to testify once more his abhorrence of slavery by introducing into his plan the following provision: "That after the year 1800 of the Christian Era, there shall be neither slavery nor involuntary servitude in any of the States, otherwise than in punishment of crimes, whereof the party shall have been duly convicted to have been personally guilty." But the clause was stricken out by Congress, as well as another which provided that no person should be admitted a citizen who held any hereditary title.
He was appointed on a committee of retrenchment to consider and report what reductions might be made in the civil list. On the report of this committee, such a reduction was ordered by suppressing unnecessary offices and diminishing the salaries of others as produced an annual saving to the United States of 24,000 dollars.
He was made chairman of a committee to settle the mode of locating and disposing lands in the western territory. He prepared the report of the committee, which was adopted. It established the mode of proceeding on this subject which was thereafter pursued with little variation.
Exclusive power over the regulation of commerce, even by treaty, was not given to Congress by the confederation, but the right was reserved to the State legislatures of imposing such duties on foreigners as their own people were subjected to and of prohibiting the exportation and importation of any species of goods within their respective ports. The inconveniences of this arrangement were speedily felt to an alarming degree. Great Britain had already adopted regulations destructive of our commerce with her West Indian Islands, and unless the United States in their federative capacity were invested with powers competent to the protection of their commerce by countervailing regulations, it was obvious they could never command reciprocal advantages in trade, without which their foreign commerce must decline and eventually be annihilated. A committee was therefore appointed, of which Mr. Jefferson was a member, to institute measures for transferring the principal jurisdiction of commerce from the States to the national tribunal. They reported resolutions recommending the legislatures of the several States to invest the federal government for the term of fifteen years with the power to interdict from our ports the commerce of any nation with whom the United States shall not have established treaties. The report was accepted and the resolutions passed.
All these important transactions with many others in which Mr. Jefferson had a leading agency were accomplished during the winter and spring of 1784, the whole term of his second congressional service.
During the same term, he submitted a proposition which embraced a double object -- to invigorate the government and reduce its expense. The permanent session of Congress and the remissness of the members had begun to be subjects of uneasiness throughout the country, and even some of the legislatures had recommended to them intermissions and periodical sessions. But the government was not yet organized into separate departments; there was no distinct executive, nor had the confederation made provision for a visible head of affairs during vacations of Congress. Such a head was necesary, however, to superintend the executive business, to receive and communicate with foreign ministers and nations, and to assemble Congress on sudden and extraordinary emergencies. Mr. Jefferson, therefore, proposed the appointment of an executive board to consist of one member from each State, who should remain in session during the recess of Congress under the title of "Committee of the States." The powers of this plural executive were to embrace all the executive functions of Congress that should not be specially reserved, but none of the legislative; the concurrence of nine members would be required to determine all questions except that of adjoinment from day to day; they should keep a journal of their proceedings to be laid before Congress, whom they should also be empowered to assemble on any occurrence during the recess in which the peace or happiness of the United States might be involved.
The proposition was adopted, and a committee of the States appointed. On the adjournment of Congress in June following, they entered upon their duties; but in the course of two months, quarreled among themselves, divided into two parties, abandoned their post, and left the government without any visible head until the next meeting of Congress. The scheme was found to be an impracticable one, though it was the best within the authority of Congress at that time to adopt. And on the whole, it was a happy circumstance for our republic that the theory proved as impracticable as it did, for it developed in a clear light the palpable defect of the confederation in not having provided for a separation of the legislative, executive, and judiciary functions; and this defect, together with the want of adequate powers in the general government to collect their contributions and to regulate commerce, was the great cause which led to the formation and adoption of the new Constitution.
Mr. Jefferson has left a brief reminiscence of his sentiments and of an amusing interview with Dr. Franklin on learning the sudden rupture and dispersion of the new executive chiefs.
"We have since seen the same thing take place in the Directory of France; and I believe it will forever take place in any Executive consisting of a plurality. Our plan, best, I believe, combines wisdom and practicability by providing a plurality of Counselors, but a single Arbiter for ultimate decision. I was in France when we heard of this schism and separation of our Committee, and, speaking with Dr. Franklin of this singular disposition of men to quarrel and divide into parties, he gave his sentiments as usual by way of Apologue. He mentioned the Eddystone lighthouse in the British channel as being built on a rock in the mid-channel, totally inaccessible in winter from the boisterous character of that sea in that season. That therefore for the two keepers employed to keep up the lights, all provisions for the winter were necessarily carried to them in autumn as they could never be visited again till the return of the milder season. That on the first practicable day in the spring, a boat put off to them with fresh supplies. The boatmen met at the door one of the keepers and accosted him with a How goes it friend? Very well. How is your companion? I do not know. Don't know? Is not he here? I can't tell. Have not you seen him to-day? No. When did you see him? Not since last fall. You have killed him? Not I, indeed. They were about to lay hold of him as having certainly murdered his companion; but he desired them to go up stairs and examine for themselves. They went up and there found the other keeper. They had quarreled, it seems, soon after being left there, had divided into two parties, assigned the cares below to one, and those above to the other, and had never spoken to or seen one another since!" (Autobiography, 1821. ME 1:80)
hile in Congress at Annapolis, Mr. Jefferson received an urgent letter from General Washington requesting his opinions on the institution of the Cincinnati and on the conduct most proper for him to pursue in relation to it. The origin of this institution was perfectly innocent, but its anti-republican organization and tendency soon excited a heavy solicitude in the breasts of the more sensitive guardians of liberty, which at length broke forth in accents of loud and extensive disapprobation. The idea of this society was suggested by General Knox and finally matured into a regular association of all the officers of the American army, to continue during their lives and those of their eldest male posterity; or, in failure thereof, of any collateral branches who might be judged worth of admission, with power to incorporate as honorary members for life individuals of the respective States distinguished for their patriotism and abilities. The laws of the association further provided for periodical meetings, general and particular, fixed contributions for such of the members as might be in distress, and a badge to be worn by them and presented by a special envoy to the French officers who had served in the United State, who were also to be invited to consider themselves as belonging to the society, at the head of which the Commander in Chief was unanimously designated to take his place.
General Washington saw with pain the uneasiness of the public mind under this institution and appealed to Mr. Jefferson for his advice on the most eligible measures to be pursued at the next meeting. The answer of Mr. Jefferson, as it probably decided the future destinies of this famous institution, is worthy of being preserved. It is dated Annapolis, April 16, 1784.
"Dear Sir,-- I received your favor of April 8th by Colonel Harrison. The subject of it is interesting, and so far as you have stood connected with it, has been matter of anxiety to me; because whatever may be the ultimate fate of the institution of the Cincinnati, as in its course it draws to it some degree of disapprobation, I have wished to see you standing on ground separated from it, and that the character which will be handed to future ages at the head of our Revolution may in no instance be compromitted in subordinate altercations. The subject has been at the point of my pen in every letter I have written to you, but has been still restrained by the reflection that you had among your friends more able counselors and in yourself one abler than them all. Your letter has now rendered a duty what was before a desire, and I cannot better merit your confidence than by a full and free communication of facts and sentiments as far as they have come within my observation.
"When the army was about to be disbanded and the officers to take final leave, perhaps never again to meet, it was natural for men who had accompanied each other through so many scenes of hardship, of difficulty, and danger, who, in a variety of instances, must have been rendered mutually dear by those aids and good offices to which their situations had given occasion; it was natural, I say, for these to seize with fondness any proposition which promised to bring them together again at certain and regular periods. And this, I take for granted, was the origin and object of this institution; and I have no suspicion that they foresaw, much less intended, those mischiefs which exist, perhaps, in the forebodings of politicians only. I doubt, however, whether in its execution, it would be found to answer the wishes of those who framed it and to foster those friendships it was intended to preserve. The members would be brought together at their annual assemblies, no longer to encounter a common enemy but to encounter one another in debate and sentiment. For something, I suppose, is to be done at these meetings, and however unimportant, it will suffice to produce difference of opinion, contradiction, and irritation. The way to make friends quarrel is to put them in disputation under the public eye. An experience of near twenty years has taught me that few friendships stand this test, and that public assemblies, where everyone is free to act and speak, are the most powerful looseners of the bands of private friendship. I think, therefore, that this institution would fail in its principal object, the perpetuation of the personal friendships contracted through the war.
"The objections of those who are opposed to the institution shall be briefly sketched. You will readily fill them up. They urge that it is against the Confederation -- against the letter of some of our constitutions -- against the spirit of all of them; that the foundation on which all these are built is the natural equality of man, the denial of every preeminence but that annexed to legal office and, particularly, the denial of a preeminence by birth; that however, in their present dispositions, citizens might decline accepting honorary instalments into the order, a time may come when a change of dispositions would render these flattering, when a well-directed distribution of them might draw into the order all the men of talents, of office and wealth, and in this case, would probably procure an ingraftment into the government; that in this, they will be supported by their foreign members and the wishes and influence of foreign courts; that experience has shown that the hereditary branches of modern governments are the patrons of privilege and prerogative and not of the natural rights of the people, whose oppressors they generally are; that besides these evils which are remote, others may take place more immediately; that a distinction is kept up between the civil and military which it is for the happiness of both to obliterate; that when the members assemble, they will be proposing to do something, and what that something may be will depend on actual circumstances; that being an organized body under habits of subordination, the first obstruction to enterprise will be already surmounted; that the moderation and virtue of a single character have probably prevented this Revolution from being closed, as most others have been, by a subversion of that liberty it was intended to establish; that he is not immortal, and his successor or some of his successors may be led by false calculation into a less certain road to glory...
"This, Sir, is as faithful an account of sentiments and facts as I am able to give you. You know the extent of the circle within which my observations are at present circumscribed, and can estimate how far as forming a part of the general opinion it may merit notice or ought to influence your particular conduct.
It remains now to pay obedience to that part of your letter which requests sentiments on the most eligible measures to be pursued by the society at their next meeting. I must be far from pretending to be a judge of what would, in fact, be the most eligible measures for the society. I can only give you the opinions of those with whom I have conversed, and who, as I have before observed, are unfriendly to it. They lead to these conclusions: 1. If the society proceed according to its institution, it will be better to make no application to Congress on that subject or any other in their associated character. 2. If they should propose to modify it so as to render it unobjectionable, I think this would not be effected without such a modification as would amount almost to annihilation, for such would it be to part with its inheritability, its organization, and its assemblies. 3. If they shall be disposed to discontinue the whole, it would remain with them to determine whether they would choose it to be done by their own act only or by a reference of the matter to Congress, which would infallibly produce a recommendation of total discontinuance.
"You will be sensible, Sir, that these communications are without reserve. I supposed such to be your wish and mean them but as materials with such others as you may collect for your better judgment to work on. I consider the whole matter as between ourselves alone, having determined to take no active part in this or anything else which may lead to altercation or disturb that quiet and tranquility of mind to which I consign the remaining portion of my life. I have been thrown back by events on a stage where I had nevermore thought to appear. It is but for a time, however, and as a day laborer, free to withdraw or be withdrawn at will. While I remain, I shall pursue in silence the path of right, but in every situation public or private, I shall be gratified by all occasions of rendering you service and of convincing you there is no one to whom your reputation and happiness are dearer than to, Sir,
"Your most obedient and most humble servant." (ME 4:215)
The sentiments of Mr. Jefferson on the subject of the Cincinnati were the sentiments of a majority of the members of Congress, and they soon animated the mass of the people. General Washington was oppressed with solicitude; he weighed the considerations submitted to him with intense deliberation; and although conscious of the purity of the motive in which the institution originated, he became sensible that it might produce political evils which the warmth of those motives had disguised. But whether so or not, the fact that a majority of the people were opposed to it was a sufficient motive with him for desiring its immediate suppression. The first annual meeting was to be held in May ensuing at Philadelphia; it was now at hand, and he went to it with the determination to exert all his influence for its annihilation. He proposed the matter to his fellow officers, and urged it with all his powers. "It met with an opposition," says Mr. Jefferson, "which was observed to cloud his face with an anxiety that the most distressful scenes of war had scarcely ever produced. The question of dissolution was canvassed for several days, and at length the order was on the point of receiving its annihilation by the vote of a great majority of its members. At this moment, their envoy arrived from France charged with letters from the French officers accepting cordially the proposed badges of fellowship, with solicitations from others to be received into the order and the recognition of their magnanimous sovereign. The prospect was now changed. The question assumed a new form. After an offer made by themselves and accepted by their friends, in what words could they clothe a proposition to retract it which would not cover themselves with the reproaches of levity and ingratitude, which would not appear an insult to those whom they loved? They found it necessary, therefore, to preserve so much of the institution as would support the foreign branch, but they obliterated every feature which was calculated to give offense to their own citizens, thus sacrificing on either hand to their brave allies and to their country."
The society was to retain its existence, its name, and its charitable funds; these last, however, were to be deposited with their respective legislatures. The order was to be communicated to no new members. The general meetings, instead of annual, were to be triennial only. The eagle and ribbon, indeed, were retained, because they were willing they should be worn by their friends in France where they would not be objects of offense; but they were never worn here. "They laid them up in their bureaus with the medals of American Independence, with those of the trophies they had taken and the battles they had won."
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