J.M. Dawson was the editor of the Baptist Standard (1943-1946) and was first full-time director of the Baptist Joint Committee on Public Affairs (1946-1953). On pages 106-07 of his book Baptists and the American Republic (Published by Broadman Press in 1956), Dawson gives the following quotation of a 1784 letter from James Madison to James Monroe in reference to the debate in Virginia over Patrick Hentry's bill for a General Assessment to support the teachers of the Christian religion:
The Episcopal clergy are generally for it. . . . The Presbyterians seem as ready to set up an establishment which would take them in as they were to pull one down which shut them out. The Baptists, however, standing firmly by their avowed principle of the complete separation of church and state, declared it to be "repugnant to the spirit of the Gospel for the Legislature thus to proceed in matters of religion, that no human laws ought to be established for the purpose.
Dawson's footnote references Madison, Writings, II, 183-191.
I went to the University of Oklahoma's library and checked "The Writings of James Madison, 1751-1836," ed. G. Hunt 1900-1910 (New York: G.P. Putnam's Sons) Vol. II 1783-1787.
I discovered that pages 183-191 are the pages for Madison's Memorial and Remonstrance. So I checked the letters from Madison to Monroe. On pages 129-132 I found a letter from Madison to Monroe dated April 12, 1785 where Madison wrote Monroe about support for Henry's bill. It said:
Episcopal people are generally for it, tho' I think the zeal of some of them has cooled, the laity of the other sects are equally unanimous on the other side. So are all the clergy except the Presbyterian.
I scanned letters for nearly and hour and never could find the quotation that Dawson gave. It is impossible to verify its authenticity without reading through the entire volume of letters. Each letter discusses a variety of issues and there are many letters. I looked at the letters to Monroe and Jefferson closely and could not find the quote. Madison used similar language about Henry's General Assessment bill in letters to several people. In one of the letters it became apparent that the Presbyterians began to divide in their opinion about the bill.
Scanning through the letters did make it clear that Madison, Monroe and Jefferson were all opposed to Henry's bill.
I'm going to ask my daughter, a student at OU, to check this volume out of the library for me. Whenever she does so, I'll look at the volume more closely and see if I can find the quote hidden in a letter to someone other than Monroe.