persons to the minister on the subject of our debt have been of two sorts. I mentioned them in my letters to Mr. Jay, and begged the favor of him to communicate it to you, not being willing to trouble you before something definitive was done. This, however, being deferred longer than I had supposed possible after what I had heard M. Montmorin say on the proposition now before the minister, and it being not improbable that the delay may still continue, I have thought it my duty to inform you of it.

The offer now before the minister is made by Mr. G. Morris and Mr. Parker of Boston. It is, to pay the full amount of the American debt (capital and interest), in French funds which produce an annual interest equal to that of the American debt after the interest in arrear is added to the capital; and also to oblige themselves, after they shall have deposited the French funds in the minister's hands, to receive them from him again, and give him in their stead, for a certain part of them to be agreed on, cash agreeable to their present value. This last article is to enable the minister to raise a certain sum of money on the American debt, or rather on the French funds given for the American debt, in the case of public exigencies requiring it. It is certain the minister was determined, to have accepted the offer, and has been prevented only by the want of confidence in the pecuniary abilities of those who made it. He asked security, and they replied that no house could or would give security for a sum of nearly forty millions of livres; they desired that he should retain the American obligations as his security, and should deliver them only as he received their value in the French stocks. It seems he did not choose to commence such a negotiation except with some house of established reputation, and this probably that his own might not be committed in the case of the contract not being carried into full execution. Mr. Morris is, I believe, now in correspondence with the bankers of the United States in order to engage them to join him in this offer. One of them, who resides at Paris, is much disposed to engage in it; the others, I believe, think differently. Thus, sir, stands the affair at present. It comes to my knowledge as a private person. I have thought it

best, throughout the whole of these negotiations, to take the least part possible in them, as it will leave the most entire liberty to the decisions of Congress, whose ratification will certainly be considered as one of the conditions of the contract.

It is useless, after what I have said, to add that nothing has been done by me on the subject of delaying the instalments and arrears of interest agreeably to your desire. As I know Count de Moustier is desirous of doing whatever he supposes agreeable to the United States, and at the same time may prove to the minister their confidence in him, I think this negotiation better in his hands than any other, and also suppose it more conformable to your idea that the arrangement should be effected by his means than mine. He has told me that he had no doubt he should get M. Necker to make the offer of delay on the conditions and in the manner you desired. He added, also, what I think not so certain, that he had put a stop to the negotiation for the purchase of the American debt. Since that time I have had a conversation with M. Montmorin, which convinced me that if any house of extensive and established credit should make the same offer with that of Mr. Morris, that it would be accepted without hesitation. On the whole, however, I think you may consider it as certain, either that the debt will be purchased by a company who will subscribe to your proposals, or that the minister will make an offer of what you desire.

I have obtained from the Farmers General a return of the vessels and cargoes which arrived in France from the United States under the premium of the last year. Supposing it may contribute as a datum to the calculations which you will necessarily be induced to make on the American commerce, I do myself the honor, sir, of forwarding it to you. My letters to Mr. Jay long ago will have made known the continuation of this premium to the first of July next, a like return at that period will be easily obtained. A late letter from Bordeaux informs me that several vessels have already arrived there from the United States with flour and wheat of the last crop.

I beg leave to congratulate you, sir, on the return of happiness and unexampled prosperity to our country, and on the effect

which it has already produced in the dispositions of Europe towards us, my ardent wishes for their long continuance are as sincere as the assurances of those sentiments of profound respecti and attachment, with which I have the honor to be, Sir, Your most obedient

Triplicates of your letter of the 25th of January last have duly come to hand.

As the success of the negotiations for the purchase of the debt due from the United States to France would have been an unwelcome circumstance, I learn with pleasure that it had not taken place.

The distinguished zeal you have in so many instances shown for the interests of this country, entitles you, upon all occasions, to a favorable interpretation of the motives by which you are actuated, and is calculated to inspire a disposition to co-operate in your arrangements, though without previous authority, as far as circumstances will justify. Nor should I be apprehensive that a sanction to the step you have taken, would form an inconvenient precedent for the future.

But the delays naturally incident to deliberations on a matter of the first consequence, the road to which had not been made easy by the antecedent state of things, having hitherto suspended any definitive resolutions concerning the public debt, I am not now in a situation to speak explicitly in regard to the measure you have undertaken. I can only say, that the United States will stand in need of the aid of loans abroad, and that I expect the requisite provision for making them upon solid and conse

quently advantageous terms, will shortly be concluded upon; in which case, you will immediately hear from me.

P. S. You have herewith triplicate of my letter of the 7th of April. The first and second of the bills therein mentioned have been forwarded by the British packet Antelope, Captain Curtiss, and by the Catherine, Captain Bull, bound for Amsterdam, and I hope will get duly to hand.

HAMILTON TO WASHINGTON.

1790.

The Secretary of the Treasury respectfully begs leave to submit to the President of the United States copies of a letter from Messrs. Wilhem and Jan Willink, and Nicholas and Jacob Van Staphorst and Hubbard, of the 25th day of January last, and of an answer thereto, of the 7th day of May following.

The President will perceive that the last mentioned letter was formed upon a plan not to discourage the progress of the loan which had been set on foot, and yet to leave a final determination upon it open.

The undertaking that loan, without previous authority, was irregular, and, in that view, exceptionable, though the motives assigned for it have considerable force as they respect the credit of the United States; and so far as they may be supposed to have really operated, afford a plausible apology for the measure.

As far, however, as the giving a sanction to it might serve as a precedent, it would not be free from objection; for it certainly would consist neither with the dignity nor the interest of the government to encourage its agents in the practice of employing its credit in unauthorized loans.

But as an acceptance of the loan may be accompanied with a prohibition of similar attempts hereafter, which would doubtless have the effect of preventing them, it is submitted as the opinion. of the Secretary, that the irregularity of the proceeding ought

not to preclude such acceptance, if the loan itself be in other respects desirable; and the following considerations appear in his judgment to render it so. The terms are probably as advantageous as the present agitations of Europe, which must necessarily create an unusual demand for money, authorize an expectation of obtaining.

A sum of one hundred and seventy-two thousand dollars will be wanting at the commencement of the ensuing year, to discharge the interest which will then fall due on the Dutch loans, which it is essential to the credit of the United States should be paid, and the timely payment of which could with difficulty be accomplished in any other way. There was on the 21st of March last due to Spain, for principal and interest of her advances and loans, the sum of two hundred and forty thousand and eight dollars and eighty-nine cents; and to France there will be due at the end of the present year, for arrears of interest and certain instalments of the principal of her loans, a sum little short of three millions eight hundred thousand dollars.

Powerful considerations of different kinds, which will readily occur to the mind of the President, urge to exertions to discharge these demands. The Minister of the Finances of France has, through the charge d'affaires of the United States at that court, solicited that the money arising from the loan in question, of which he had been apprised, might be applied in part payment of the debt due to that nation. Its peculiar situation at the present juncture contains an appeal to the sensibility, as well as to the policy and honor of this country, in favor of that requisition.

If these reasons appear to the President sufficient to induce his sanction to the loan in question, it will remain to consider under what act it will be most expedient to authorize its being made, whether that of the 4th or that of the 12th of the present month, or whether it may not be advisable to authorize it partly under one and partly under the other.

It is conceived that the business may easily take the latter form, if deemed eligible; and this is recommended by the consideration that it will contribute in a degree to all the purposes which require to be promoted.