Talk:Private Banks (Quotation)

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Thanks for creating this entry! I spent some time today tracking down this quote and was very happy to see you've already done this. Kudos! Jmturner 20:50, 1 October 2008 (EDT)

Thanks, Jmturner! We enjoyed your blog entry - kudos to you for taking the time to look into this quotation! --ABerkes 10:09, 7 October 2008 (EDT)

More details

The quote with "inflation, then by deflation" is clearly spurious, but the rest of the quote seems to be distorted and jumbled-together portions of Jefferson's letters.

The earliest I've found this combination is 1895, from an article "Bimetallism and Currency" by Joshua Douglass in American Magazine of Civics (7:256). On page 265:

I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a money aristocracy that has set the government at defiance. The issuing power should be taken from the banks and restored to the government and the people, to whom it belongs. Let the banks exist, but let them bank on treasury notes.

The first sentence, as you say, is from Jefferson's letter to John Taylor, 28 May 1816:

And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.

The second sentence is from his letter to Dr. Josephus B. Stuart, 10 May 1817:

The bank mania is one of the most threatening of these imitations. It 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 heir strength, their principles are unyielded and unyielding.

The third and fourth —quite distorted— are from his letter to John W. Eppes, 11 September 1813:

The question will be asked and ought to be looked at, what is to be the resource if loans cannot be obtained? There is but one, “Carthago delenda est.” Bank paper must be suppressed, and the circulating medium must be restored to the nation to whom it belongs. It is the only fund on which they can rely for loans; it is the only resource which can never fail them, and it is an abundant one for every necessary purpose. Treasury bills, bottomed on taxes, bearing or not bearing interest, as may be found necessary, thrown into circulation will take the place of so much gold and silver, which last, when crowded, will find an efflux into other countries, and thus keep the quantum of medium at its salutary level. Let banks continue if they please, but let them discount for cash alone or for treasury notes.

Incidentally, then-Congressman James A. Garfield discusses whether the "soft money" advocates are justified in quoting this letter in an interesting article in the February, 1876 Atlantic Monthly (37:219).

I find a sort of intermediate form of this quote in Whither are We Drifting as a Nation? by Freeman Otis Willey (1882, p. 377), quoting from Jefferson's letter to "Mr. Eppis": "The power to issue money should be taken from the banks and restored to the government and people, where it belongs."

KHirsch 15:10, 20 February 2009 (EST)

Good find, KHirsch. This one is getting more and more complicated. With regards to the quotation as we are now seeing it (i.e. as I have noted it under Quotation in the main article), it may be that the Douglass article is the source of the "mashup" of the two different sentences that make up the latter part of it. Either that, or it's showing this misquotation in its infancy, so to speak. I think we all agree that the first part of the quotation ("If the American people ever allow private banks...wake up homeless on the continent their Fathers conquered") is completely spurious, i.e. not to be found in any of Jefferson's writings. "I believe that banking institutions..." is definitely a misquote of the 1816 Taylor letter. And I'll make a note in the main article of teh 1813 Eppes letter vis-a-vis "The issuing power...to whom it properly belongs." Thanks!