To Thomas Jefferson.

DEAR SIR,—I have received yours of the 15th, and attended to your remarks on "ways and means." I find that the variance in our ideas relates—1. To the probable quantity of circulating medium. 2. To the effect of an annual augmentation of it. I cannot persuade myself that in the present stagnation of private dealings, and the proposed limitation of taxes, the two great absorbents of money, the circulating sum would amount even to 20 millions. But be this amount what it may, every emission beyond it must either enter into circulation, and depreciate the whole mass, or it must be locked up. If it bear an interest, it may be locked up for the sake of the interest; in which case it is a loan, both in substance and in form, and implies a capacity to lend; in other words, a disposable capital in the Country. If it does not bear an interest it could not be locked up, but on the supposition that the terms on which it is received are such as to promise indemnity, at least for the intermediate loss of interest, by its value at a future day; but this both involves the substance of a loan to the amount of the value locked up, and implies a depreciation differing only from the career of the old continental currency by a gradual return from a certain point of depression to its original level. If this view of the subject be in any measure correct, I am aware of the gloomy inferences from it. I trust, however, that our case is not altogether without remedy. To a certain extent, paper, in some form or other, will, as a circulating medium, answer the purpose your plan contemplates. The increase of taxes will have the double operation of widening the channel of circulation and of pumping the medium out of it. And I cannot but think that a domestic capital, existing under various shapes, and disposable to the public, may still be obtained on terms, though hard, not intolerable; and that it will not be very long before the money market abroad will not be entirely shut against us; a market, however ineligible in some respects, not to be declined under our circumstances.

We hear nothing from our Envoys since the despatches now in print, nor any thing else of importance from abroad. We continue anxious for the situation of Sackett’s Harbour. Izard has joined Brown on the Canada side of the straight, and offered battle to Drummond, which he does not accept, and which it seems cannot be forced on him without risk of reinforcements now transportable to him. The most that can fairly be hoped for by us now is, that the campaign may end where it is.