In Obedience to the Principle So Often Attributed to Sir Thomas Gresham, Paper Money Issued by the National Bank Was Driving Out Dependable Coinage

Jefferson charged that the national debt had been grossly mishandled. It had become too large to be taken care of by the ordinary sources of revenue, so that the impost had been raised to such a height that the collectors might have to bear arms. Even so, the sums obtained were still insufficient to service the debt, and the federal government had to resort to excise taxes. This expedient was so unpopular as to invite mass resistance. To the Revolutionary generation, revolt against taxation was not inconceivable.

In obedience to the principle so often attributed to Sir Thomas Gresham, paper money issued by the National Bank was driving out dependable coinage. This ghost currency served only the lenders, whose annual profit of 10 to 12 percent was "taken out of the pockets of the people." The bank, which was supposed to stimulate commerce and insure national prosperity, was imperiling both commerce and agriculture by substituting "paper speculation" for true production.

The political and social effects of the bank, he argued, were even worse than the economic. The institution's policies had created in Congress a "corrupt squadron." The term now conjures up visions of outright bribery but Jefferson meant simply conflict of interest in that Congressmen who were stockholders in the bank were also framing the legislation that governed it.

--Alf J. Mapp Jr., Thomas Jefferson: America's Paradoxical Patriot (Lanham, MD: Rowman and Littlefield Publishers, 2008), 308.