The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1842-10-01
General HamiIton's Letter to John G. Cal
houn, on the Financial Condition OF the
United states.

l
States-and the position of existing State credit in
| Europe II is written TO the Hon. John c. Calhoun,
by General James Hamilton, of S. c., who is now
in London, and has resided mostly in Europe for
| the last five years, as diplomatic and financial
| agent OF Texas and ohers-and who is well ac-
qualn'ed both with the condltion of his own
country and of Europe.
This letter is one of series of great movements
that will increase in numter and volume, as the
doctrines and consequences of reputation increase.
Reputation, both public and prvate-either that
tried by Mississippi and other States or that agita-
ted by Messrs. Boorman& Johnston, of New York,
and their advocates cannot stand moral conflict
with the commercial communities of the world
This question of State debts and reputation will
soon absorb all others-and command the public
attention of both hemispheres. 1t is the beginning
OF a new crisis On this point, the letter of Gene
raj Hamilton is a singular and remarkable produc-
ton, and will attract universal attention.
LONDON, September 9th, 1912.
To THE Hon. JOHN G. CALHOUN =
My DEAR SIR
If have addressed this letter to you it is not alone
from the justification which find in the recoecons
of old and cherished friendship, but from the fact that
desire the public attention to its object through
the nsrumentality of a far influential than
papers wish only "to think aloud but speak aloud
My purpose in writing you to put you possession
OF know ledge OF the condition OF the American credit IN
Europe with suggestion of the Indispensable necessity
of our doing something at home to meet the truly alarm
ing crisis, which this state of things presents
am far from defending the profuse confidence, with
which European capitalists lent their money during
period of years from 1884 to siO countrymen
the faith OF variety o. schemes exceedingly
visionary and unsound: They did this, however out OF
the excess oil virtue, which may have been pushedto
the extent of rather amiable than criminal weakness
for they generally made these loans at less rate of in
terest than they could be effected if all at home and
pareny Cor objects of great public utility. But the loans
the States stand different footing. At least, in
ference 10 the public sanctions, with which they in
vested. They made according to your reading ami
mine, OF tn Constitution to soveregns under the obi ga
tons of high public faith; many OF them were CON
racted terms greatly vantageous under the agency
Of houses OF the first responsibility, whose lberay and
confidence, knew no bounds.
This confidence was given to our young country be-
cause resources n degree exagge ate were con-
idered immense, and because was thought as we are
people Indeed, from observ alton, which larger
residence for the last five years in Europe than in Anne
RIGA, enables 10 make; it quite obvious If we mad
paid the interest foreign debit that the rate of that
interest would have fallen gradually to the level of that
paid by of the Oldest and best established States in
Europe and that for objects of well founded public ut
ty, and private enterprise, industry at home
might have been almost indefinitely nvigorated of the
large surplus capital of this country. You will say
that this facility of borrowing has been greet
TO ownf This admit, is true to a cert ain
tent but il converted into by the action of
our the currency of the United states
Under udcious regulations and prudential guards
of things NOR proptous to the ev eopemt of the re.
OF young country like borrowing OF old
like this its capital to vigoraie its labor at low rate
of interest cannot wen be conceived lfthe profits of abo
transcribed the rate of interest to create capital
at home. From what other source have sprung those
miracles of enterprise and wealth. that be found
lions this conoin action of our labor the capital
of others The Pilgrims found no Bank of England
planted the rock of Plymouth, the Huegenos of
South Carolina, the gems OF Samarcand is thirsty
plains
But you consider this faculty ofborrowing abroad my
Dear Sir, evil you may certainly console yourself
with the conviction that it longer exists although
equally convinced that you will regret the which
has produced this want of all confidence in the good
iah of the people OF the United States and the
quences which have followed in fixing stigma
en- the character of our country.
II is absurd for to talk in America that do not
the capital of Europe at the moment when the Gene
raj Gov eminent Of the States has sent Agent abroad to
borrow for its daily bread We do want their money and
they want the results of our labor And greatly then is
to be depored that this beneficial interchange has been
suspended under circumstances dsasrouso both
tries
Let give you brief statement of the present
condition OF Americ credit in Europe and without pre-
Stunning suggest a remedy enquire of you whether
the force OF public opinion Of Congress has not the
stutonal competency to do thing0 acting through
sufficiently potent convince them of the truth and force
OF the old adage that after ALL in the long rum honesty
is the best policy
few words As our old friend Randolph used to say,
American credit is killed " stone dead" John Jacob
a
amount (where he known,) and Mr.. Bates, of the
house of Barngs, by wearing out pair of shoes walk
ing from the Mansion house 10 the inories mght sen
fifteen hundred pounds worth of Massachusetts, stock,
wharge the buyer The fact not the less
to be concealed that begin to be regarded nation OF
sharpers and swndlers, with whom, the day OF judg
men should happen to be Monday ourpay day will not
be until the Tuesday following. This revulson Of
fdence does arise much from discredit, which
taches in other words, ability
pay seeming ndispostion to pay The former is
still considered in most cases as undoubted, willis.
sick he lattp
Hence is that whilst the rate Of interest has fallen this
day to two and half per cent in the London market is
probable that if the Commissioner othe United States
six per cent loan, to offer price which would
interest of ten cent ten pounds Of the stock
could be sold without from considerations of policy un
der the advice of Lord Ashburton his return to Eng
land the Barings should be induced to take the loan
When conrashs discredt OF our own country teem-
ing with such resources with the pamy credit of
other States that have little else but good faith and high
taxation to oer 1t is 10 reer TO any other
that fall paople who aspire to be civil
lized Ofthe truth of this fact cannot give you
better proof that whilst will look to- and cap
italists with aversion from, the United States loan
comparatively Insignificant of Hamburg with
population Of 200 900 inhabitants to enable rise Of
its ashes has borrowed at 81 per precisely double the
amount ofour proposed loan arthing Of which the
U. s Commissioner will probably not be able to nego
tate Denmark and Belgium neither of which would be
scarcely breakfast for the hungry stomach Of Brother
Jonathan on frosty morning. can borrow at four per
cent what they want and England and Holland, with the
principal of public debt the payment of which is likely
to be contemporaneous with the discovery of perpetual
notion can borrow What want, at ana under
per cent because they pay their interest," and tax them
selves TO pay their interest
As Statesman and Patriot sure, my dear sir, you
will say that this state othngs must not be permitted to
last No country continue in the species of in
solvency bankruptcy in its repute without losing that
self respect which the salient spring Of all that gives vi
gor and renown to national character IL may be said
that nation in degree responsible, for this
decadence in the credit OF the States This may be
to a certain extent Our national and political aggrega
on however i'll may speak, is made up of this family
of States and depend upon that other nations
and posterity will hold the government of the Union
morally responsible for the character of its members al
though the forms OF ederave sy stem may discharge
il from legal liability for their engagements
Admitting the potency, and the extent of the evil you
will ask what the remedy This, my good SIR, pre-
cisey the question am about to ask you and ask
the form Of specific inquiry, whether public opinion
through the Union may not receive such organization
by the action of Congress popular meetings and the press
induce the defoung States 10 hold conventions hs