Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1842-10-28
From he Newport Hcraid cfhe T;mss.
GENERAL HAMILTON'S LETTER

f~Nt'pN-Nt '1if' 4 Dtb, iCt~s
TO the UOn. JOHN G.. Cdihoun:
My DEAR sIR-If ] have addressed this
letter TO you, il is not alone from the iusfifi-
cation which | find in the recoIlectOns OF
an old and cherished friendship, but from
the fact, that ] desire to attract the public
attention To its object, through the instrll-
mentality of name far more influential
than my own. BE not surprised, if you
see 1t hrst IN the newspapers | wish not
only "to think aloud" but to speak aloud.
My purpose in writing to you, is TO put
you III possession of Il knowledge of the con-
dhion OF American credi; in Europe, with a
suggestion of the indispensable necessity of
our doing something at home. to meet the
truly alarming crisis, which this state of
things presents
am far from defending the profuse con-
hdence with which European capitalists lent
their money during a period of six years
from 1884 to 1910, TO our counirymen, even
on the faith Of variety of schemes. exceed
ingly visionary and unsound. They did
this, however out Of a virtue, which may
have been pushed to the extent of rather an
amiable than criminal weakness for they
generally made these loans at a less rate of
Interes, than they could be effected. if at all
at home, and apparently for objects Of great
public utility. But The loans to The States
stand on different footing. Atleast in ref
erence TO the public sanctions, with which
they are invested. They were made accord
ing to your reading and mine, of the con-
sttuion, to soyereigns under the obligations
OF high public faith many of them
were contracted on terms greatly advanta-
geons under the agency of houses of the first
responsibility, whose libcrality and conf
dence, knew no bounds.
This confidence was given to our young
country, because our resources (in no de-
gree exaggerated) were considered immense,
and because ii was thought, as we are of the
Saxon family, we were essentially debt
paying people. Indeed, from an obserya-
ton, which larger residence for the last
FIVE years in Europe than in America, cna-
bes me to make, it is quite obvious if we
had paid the interest on our foreign debt,
that the rate of that interest would have fall
len gradually to the level of that paid by
some of the Oldest aud best established
States in Europe, aud that Tor objects of
well founded public utility, and even of pri-
yate enterprise, our industry at home might
have hOen almost indefinitely inyigorated oui
qtjhHIarqe Sprpns capital oil inns rSSS2l nIhss y:
borrowing, has been a great curse to our
own. This | admit is true 10 a certain ex-
tent; but it was converted into curse by
the action of our government on the curren-
CIV of the United States. Under ludiclous
regulations and prudential guards, state of
things more proptious to the Development
of the resources of a young country like
ours, borrowing of an old one like this, its
capital to invigorate lis labor, at a low rate
of interest, cannot well be conceived. If
the profits of labor transcribed the rate Of
interest, ii was 10 create capital at home
From what other source have sprung those
miracles of enterprise and wealth, that are to
be found in our country in the mlds; of
population of eighteen millions, but this con-
Joint action of our labor on the capital of
others The Pilgrims found no bank Of
England planted on the rock of Plymouth,
or the Huegeno,s of South Carolina, the
gems Of Samaritan on its thirty plains.
But if you consider this faculty of bor-
rowing abroad, my dear sir, is an evil, you
may certainly console yourself with the con-
viction that it no longer exists, although
am equally convinced that you will regret
the cause which has produced this want of
all confidence in good faith of the people
of the United States and the consequences
which have followed in fixing so severe a
stigma on the character of our country.
1t is absurd for us to talk in America that
we do not want the capital of Europe, at the
very moment when the General Government
of the States has sent an 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 it to be de-
plored that this beneficial interchange has
been suspended under circumstances SO dis
astrous to both countries
Let me now give you a brief statement OF
the present condition of American credit in
Europe, and without presuming to sug-
gest a remedy, to enquire olyou whether the
force of public opinion, Gf Congress has
not constitutional competency to do any
thng,) acting through the legislatures o'
the defaulting States cannot be made sulli'
ciently potent to convince them of the truth
and force of the old adage that, after all, in
the long run. "honesty is the best policy"
The first branch of my subject | can dis
cuss in few words. AS our old friend
, Randolph used to say, American credit is
killed 'stone dead" John Jacob Aston
might obtain an uncovered credit fol
a reasonable amount, (where he was
known,) and Mr.. Bates, of the house o
Earrings, by wearing out pair of shoes
in walking from the Mansion House to the
, Mnories, might sell fifteen hundred pounds
worth of Massachusetts stock, with large
concessions to the buyer. The fact is moi
the less to be concealed that we begin to be
regarded as a nation of sharpers and swind'
IL Al. L