Rhode Island Stampless Covers & Letters
July 22, 1816 Free-Franked Letter from Secretary of the Treasury, A. J. Dallas
to the President of The Bank of Warren, Rhode Island

(Scroll Down for Biographical Information, History and Full Text of the Circular)

In 1814, President Madison appointed Alexander Dallas Secretary of the Treasury. By this time; the War of 1812 and the large number of commercial banks  issuing worthless bank notes that were not backed by U.S. currency had virtually bankrupted the treasury. Secretary Dallas, in a Report to the Congress in 1816, advocated an annual revenue to be raised by internal taxation in addition to the external revenue already being collected from customs duties. He also advocated and created a "Second" Bank of the United States to issue "Treasury Notes" for the purpose of acquiring additional government funds. Dallas's brilliant and successful plan restored public confidence and greatly improved the government's credit.

The circular and notice illustrated here were mailed to various banks; outlining his proposals and encouraging the banks to adopt the new rules and support his strategies for bringing the country out of debt. He also outlined the penalties that would be applied for non-compliance. This particular Stampless Folded Letter was mailed to the President of the Bank of Warren, RI. It contains two items; a personalized letter/circular to the Bank President and a copy of the Treasury Notice to be enacted in October, 1816.

The Cover was Free Franked and contains a July 30 Philadelphia CDS. It is signed, "A. J. Dallas."

Alexander James Dallas was Secretary of the Treasury under President Madison from 1814 to 1816. He was born on June 21, 1759, the son of a Scottish physician who immigrated to the island  of Jamaica in 1750. He received his primary education at Edinburgh and Westminster under the tutelage of James Elphinston and was a friend and acquaintance of both Dr. Johnson and Dr. Franklin. He studied law in London and returned to Jamaica in 1780. Alexander moved to Philadelphia in 1783 and acquired citizenship in the Commonwealth of Pennsylvania in that same year. Alexander was admitted to the bar in 1785 and began a very successful practice a few years later in Philadelphia.

He was appointed Secretary of the Commonwealth of Pennsylvania in 1791. During his term of office, he compiled the four volume, "Reports of Cases ruled and adjudged by the Courts of the United States and Pennsylvania, before and since the Revolution." He also prepared an edition of "The Laws of Pennsylvania." He held this office until 1801 when President Thomas Jefferson appointed him as the U.S. District Attorney for the Eastern District of Pennsylvania. 

In 1814, President Madison appointed him to the post of Secretary of the Treasury. At the time of his appointment; the government's finances were in serious arrears because of the recent war with Great Britain and he was requested to present a proposal for raising money to pay off the debt and restore public confidence in the government.

Secretary Dallas's masterful report showed that the required funds could not be raised with taxation alone and called for the establishment of a government bank for the purpose of raising a loan. On April 3, 1816, the bill to create a National Bank was passed by Congress and signed by President Madison. Secretary Dallas's efforts greatly improved the credit of the government and helped to erase the debt from the War of 1812.

In March 1815, Secretary Dallas assumed the duties of Secretary of War in addition to his position as Secretary of the Treasury. After the new Bank of the United States was firmly established, Alexander retired from both offices in November, 1816 and returned to Philadelphia. He died just a few short weeks later in Trenton, New Jersey on January 14, 1817

The text of the Letter and Treasury Notice sent to the President of the Bank of Warren is reproduced below in it's entirety.

(CIRCULAR)

TREASURY DEPARTMENT, 22d July, 1816

SIR:

    BY the Constitution and Laws of the United Sates, current as a legal tender in all cases whatsoever.

    By particular Acts of Congress, Treasury Notes issued by the government, and notes issued by the Bank of the United States, are made receivable in all payments to the United States.

    But in consequence of the suspension of payments in coin, at many of the principal State Banks, the lawful money of the United States suddenly ceased to be a circulating medium, and the Treasury Notes issued by the government, having suffered an undue depreciation, the government as well as private citizens, yielded to the necessity of receiving and paying the notes of the State Banks, as a national currency.

    The State Banks have hitherto excused the suspension of their payments in coin, upon the alleged necessity of the act; and assurances have been given, repeatedly, that preparations were making to resume those payments.

    The effect of such preparations has not, however, become visible; and an apprehension has at length been excited in the public mind, that the temptation of profit, according to the present irregular course of banking, is too great, to admit of voluntary return to the legitimate system of banking, upon the basis of a metallic capital.

    The Banks of the New England states, (which have always paid their own notes in coin) are ready and willing to co-operate in the general revival of the metallic currency. The Banks in the States to the South, and to the West, of Maryland, are ready and willing, it is believed, to co-operate in the same measure. The objection, or the obstacle, to the measure, principally rests with the Banks of the middle States; but the most important of these Banks have converted their unproductive capital of Gold and Silver, into the productive capital of Public Stock, and a restoration of the metallic capital is alone wanting to enable them, also, to resume their payments in coin.

    Under these circumstances, it will not be doubted by any candid and intelligent citizen, that a simultaneous and uniform movement of the State Banks, would, at this period be successful, in the revival of the public confidence, and the restoration of the lawful currency of the United States. An appeal is, therefore, made to these Banks; in the hope and confidence, that they will adopt a policy dictated by their own real and permanent interests, as well as by the justice due to the community.

    By a resolution of Congress, passed on the 29th of April, 1816, it is declared, that "from and after the 20th day of February next, no duties, taxes, debts, or sums of money accruing, or becoming payable to the united States, ought to be collected, or received, otherwise then in the legal currency of the united States, or Treasury Notes, or Notes of the Bank of the United States, or in Notes of Banks, which are payable and paid on demand, in the said legal currency of the United States."

    But in addition to this positive limitation, the Resolution "requires and directs the Secretary of the Treasury to adopt such measures, as he may deem necessary, to cause as soon as may be, all such duties, taxes, debts, or sums of money, to be collected and paid in the legal currency of the United States, or Treasury Notes, or Notes of the Bank of the United States, as by law provided and declared; or in Notes of Banks, which are payable, and paid, on demand in the legal currency of the United States." After the 20th of February 1817, therefore, the Revenue must be collected in the mode prescribed; but even previously, the Secretary of the Treasury is required and directed to pursue the proper measures, for an earlier establishment of that mode of collection.

    It is the sincere desire of this department, to execute the duty thus assigned to it, in a manner the most convenient and acceptable to the State Banks, and, indeed, rather to invite the Banks to a spontaneous adoption of the measures, which appear to be necessary upon the occasion, than to proceed by the mere force of official regulations. In the draft of a Treasury Notice, which accompanies this communication, and which you will consider in the light of an amicable proposition, the views of the Department are conveyed, as to the incipient and preparatory steps, that may, I think, be safely taken, with reference to a general resumption of payments in coin, on the 20th of February next. If the State Banks concur in the opinion, so far as their interests and operations are affected, their voluntary assent to the arrangement, will undoubtedly produce the most beneficial consequences, and I shall proceed to announce it in official form. Permit me, therefore, to request an early communication of the decision of your Bank upon the subject.

    The present opportunity is embraced to repeat the assurances, which have been uniformly given and maintained, that this department deems the fiscal interests of the Government, and the successful operations of the Bank of the United States, to be intimately connected with the credit and prosperity of the State Banks. Upon just and efficient principles of co-operation, it is hoped that the institutions, Federal and State, will be mutually serviceable. From the State Banks, a sincere and effectual exertion, in the common cause of restoring the legal currency, is certainly expected and required; but, in return, they will merit and receive the confidence of the Treasury and the National Bank; the transfer of Public Funds, from the State Banks to the National Bank and its Branches, will be gradual; and the Notes of the State Banks will be freely circulated by the Treasury and the National Bank.

                                                                                                I am, very respectfully,
                                                                                                                 Sir,
                                                                                                      Your Most Obedient Servant,

                                                                                                                        A. J. Dallas

To the President of the Bank of
    Warren

 

DRAFT OF A NOTICE,

PRESENTED FOR THE CONSIDERATION OF THE STATE BANKS

TREASURY DEPARTMENT, JULY, 1816.

    WHEREAS, by a Resolution of Congress, passed on the 29th of April, 1816, the Secretary of the Treasury is required and directed to adopt such measures, as he may deem necessary, to cause, as soon as may be, all duties, taxes, and debts, or sums of money accruing or becoming payable to the United States, to be collected and paid in the legal currency of the United States, or Treasury Notes, or Notes of the Bank of the United States, as by law provided and declared, or in Notes of Banks, which are payable and paid on demand in the legal currency of the United States; And it is further by the said Resolution of Congress declared, that from and after the 20th day of February, 1817, no such duties, taxes, debts, or sums of money, ought to be otherwise collected or received, than in the manner aforesaid.

    And whereas it is deemed expedient and necessary to adopt measures preparatory to the general restoration of the legal currency of the united States, contemplated by the said Resolution of Congress, as well as to facilitate the collection of the Revenue, as soon as may be, in the manner therein specified:-----

NOTICE IS THEREFORE GIVEN, AS FOLLOWS:

   1st.  That from and after the 1st day of October next, Bank Notes of the denomination of Five Dollars, and under, shall not be received in any payments to the United States, for debts, duties, or taxes, unless such Notes are payable and paid on demand in the legal currency of the United states, by the Banks respectively issuing the same.

    2nd.  That from and after the 1st day of October next, Bank Notes of whatever denomination issued by any Bank, which does not pay upon demand, its Notes of the denomination of Five Dollars and under, in the legal currency of the united States, shall not be received in any payments to the United States, for debts, duties, or taxes.

    3rd.  That from and after the 1st day of October next, all sums of money accruing or payable to the United States, for the purchase of public lands, or other debts, or for duties of import and tonnage of the amount of Five Dollars, shall be paid and collected in the legal currency of the United States, in Treasury notes, in the Notes of the Bank of the United States, or in Notes of Banks which are payable and paid on demand, in said legal currency of the united States, and not otherwise.

    4th.  That from and after the 1st day of October next, all sums of money accruing and payable to the United states on account of internal revenue, or direct tax, of the amount of One Dollar and under, and all fractions of such last mentioned sums of money, not exceeding the amount of One dollar, shall be paid and collected in the legal currency of the United states, in Treasury Notes, in the Notes of the Bank of the United States, or in Notes of Banks, which are payable and paid on demand, in the said legal currency of the united States, and not otherwise.

5th.  That from and after the 20th day of February, 1817, all duties, taxes, debts, or sums of money accruing or becoming payable to the United States, shall be paid and collected in the legal currency of the United States, or Treasury Notes, or Notes of the Bank of the United States, or in Notes of Banks, which are payable and paid on demand, in the said legal currency of the United States.

    And all Collectors and Receivers of public money, are required to pay due attention to the Notice hereby given, and to govern themselves, in the collection and receipt of the public dues, duties, and taxes, accordingly.


RI Historical Society
Introduction
Stampless I
Stampless II

Stampless III
Stampless IV
Stampless V
Stampless VI
Brown & Ives Letters
The Hazard Family Letters
Joseph Tillinghast
Free Franked Letters
DeWolf Family Letters

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