HAMILTON TO WILLIAM SHORT. SIR: NEW YORK, October 7, 1789. I think it probable you will have learnt, through other channels, before this reaches you, my appointment as Secretary of the Treasury of the United States. In this capacity the debt due from us to France, will, of course, constitute one of the objects of my attention. Except with regard to a few laws of immediate urgency, respecting commercial imposts and navigation, the late session of Congress was wholly occupied in organizing the government. A resolution, however, passed the House of Representatives declarative of their opinion that an adequate provision for the support of the public credit was a matter of high importance to the honor and prosperity of the United States; and instructing me to prepare and report a plan for that purpose at their next session. In this state of things you will readily perceive that I can say nothing very precise with regard to the provision to be made for discharging the arrearages due to France. I am, however, desirous that it should be understood that proper attention will be paid to the subject on my part; and I take it for granted that the national legislature will not fail to sanction the measures which the faith and credit of the United States require in reference to it. In addition to this I shall only remark that it would be a valuable accommodation to the government of this country if the Court of France should think fit to suspend the payment of the instalments of the principal due and to become due, for five or six years from this period, on the condition of effectual arrangements for the punctual discharge of the interest which has accrued and shall accrue. But in giving this intimation it is not my intention that any request should be made to that effect. I should be glad that the thing might come about in the form of a voluntary and unsolicited offer; and that some indirect method may be taken to communicate the idea where it would be of use it should prevail. It may not be amiss that you should know that I have hinted the matter in the inclosed private letter to the Marquis de Lafayette, in forwarding which I request your particular care. I have the honor to be, Sir, Your obedient and humble servant, WILLIAM SHORT, Charge d'Affaires, Paris. Secretary of the Treasury. P. S. Since writing the above, I have, in a private and unofficial manner, broken the matter to the Count de Moustier; and I have reason to conclude he will promote what is desired. HAMILTON TO WASHINGTON. NEW-YORK, Oct. 20, 1789. SIR: Agreeably to your desire, I sit down to commit a few lines. to the post. Nothing worth particular mention has occurred since your departure, except a report brought by Mr. Keane from South Carolina, that Mr. McGillivray, the Indian chief, has, after a short conference, left our commissioners, declaring that what they suggested was only a repetition of the old story, and inadmissible, or something to this effect. It is added that the lower Creeks appeared, notwithstanding, willing to go into a treaty, but the upper ones declined it. General Knox, who has particularly conversed with Mr. Keane, will doubtless give you a more accurate statement of what he brings. It seems, however, that he has his intelligence at second or third hand. P. S. I have just seen a letter from a private gentleman of considerable intelligence now in North Carolina, who gives an ill picture of the prospect there, respecting the adoption of the Constitution. SIR: SHORT TO HAMILTON. PARIS, NOV. 30, 1789. The letter of October the 7th, which you did me the honor to write me, was delivered two days ago by Mr. McCartey, and yesterday I received the duplicate by Count de Moustier. Some time before the debt of the United States to France had been brought into view by M. Necker, in a memorial which he delivered to the National Assembly on the subject of their finances, and which I inclosed in my No. 10 to Mr. Jay. Although it is stated there that a proposition was on foot for negotiating a loan in Amsterdam on the security of our debt, I was informed that it was in agitation also to sell the debt. Knowing well that if a sale did take place, it would be on terms onerous to France and injurious to the credit of the United States, I thought myself authorized by the circumstance to present this matter to the view of the minister in a light in which I knew he had not seen it. He then told me what were the reasons which had induced him to listen to this proposition from Amsterdam, let me see clearly that the rise of our credit there was unknown to him, and gave me reason to believe that he should do nothing farther in that business. As the effect of that negotiation would only have been for the advantage of the house in Amsterdam, and prejudicial to the interests of France and credit of the United States, I hope the measures I took will not be disapproved. Soon after Count de Moustier arrived, and sent the same time a renewal of the proposition from Amsterdam, in which the houses there had united the bankers of the United States, in hopes by that means of carrying their plan into execution; the bankers however withdrew as soon as they learned from those who had seen Count de Moustier, that "he was instructed by Congress to oppose any negotiation of that kind." They had from the beginning been averse to the negotiation, and gave in to it only from an apprehension that it would otherwise be effected without them. Another company, of which Mr. Parker of Boston is the organ, presents itself, as made a day or two ago-another proposition to the minister-the nature of it is, to pay the amount of our debt in bonds due by France to the lenders of Amsterdam. As they pay bonds already due, and are to receive our debt, which is not yet demandable, they require that the arrears of interest which we owe should be ceded to them by France. They offer me, in this case, to subscribe to the condition of putting off the instalments due, or to become due for five or six years-interest to begin from the present time. As this would square perfectly with your wishes, and would not injure the credit of the United States, since they pay their full debt to France (the interest which she yields being considered as a discount for ready money), I shall not oppose the negotiation if the minister thinks proper to enter into it. I rather think, however, he will not, as the extreme and pressing exigencies of the present crisis may induce him to keep our debt, as the best means, and perhaps the only means, of commanding cash in a foreign country; by it, he is sure of raising money at Amsterdam, should he be induced to make the sacrifices he is asked. Nothing but necessity, however, will induce him to do it. In the case that no negotiation should take place, then I think it probable that Count de Moustier will be able to effect what you desire. As he enters into it with zeal, and as you desire, with much propriety, that the proposition should come from France, rather than be solicited by us, it will be best to let him act in it. I shall take care, however, to lose no opportunity of inducing the minister to come into your view as of himself. M. de Moustier tells me he has already spoken to M. de Montmorin on the subject, who has referred him entirely to M. Necker. Long before you receive this letter you will have seen Mr. Jefferson, and received from him information that may induce you perhaps to adopt other views respecting our debt to France. The bankers of the United States still repeat to me the same assurances which they gave Congress in their letter of August last, and which they reiterated to Mr. Jefferson before his departure. It is useless to add observations on the effect which that measure would operate in our favor on the minds of an assembly who are new-modelling this country, and must soon influence its political and commercial relations with others-an assembly who, whilst they feel a real distress in their finances, are told by different members, in the course of debate, that the debt of the United States cannot be counted on with any certainty, either for present or future relief. As soon as I see what turn the negotiations mentioned above, or the proposition to be made by M. de Moustier, in which the Marquis de Lafayette will do whatever shall be required of him, will take, I will do myself the honor of writing you again. In the mean time, I beg you to be assured, sir, of the readiness with which I shall at all times be disposed to carry into execution your views, and of the sentiments of profound respect and attachment with which I have the honor to be, I had the honor of addressing you a letter on the 30th of November last, in answer to yours of the 7th of October. In it I mentioned in what manner our debt to France had become an object of ministerial consideration before the arrival of Count de Moustier, who was charged with your letter, and the influence. which his arrival had on some of those who were negotiating with the minister. Although I knew from your letter that he was not charged with the powers which he had mentioned to several, yet I did not think proper to contradict it, as he was endeavoring to operate what I thought for the advantage of the United States. Since that time, the proposals made by different |