Herald of the times. [volume] (Newport, R.I.) 1830-1846, 1842-10-06
General HamiliOn's Letter
to John e.. Calhoun, OS
the Financial Condition OF
the United States.
LoSDoS, September 9Th, ls42.
To THE Hon. JoHN L. CALHOUN
MY Dean SIR

If have addressed this letter 10 You, il i.
not alone from the Justification which ] find
ia the recollrctions Of an old and cherished
friendship. bui from the fact, that desire I,
attract the public attention To its object
through the instrnmeni nialiy Of name fa'
more influential than my own. Be no, sur.
prized. If yon see IL first in the newspaper
! wish not only ITO think aloud" but speak
aloud.
Ny purpose in writing yon, is TO pat you
IN possrssion Of knowlrdge oi the CONDITION
f tho American credit in Europe. with u
suggestion Of the indispensable necessity al
nur doing something at home. To meet The
'rnly alarming crisis, which this state o.
things presents.
! am far from defending the profnsc con
6dcncc. with which European capitalists LEM
heir money during n period Of six yrnr.
from 1894 10 1910, To our conniryInen, ever
IN the faith ot variety Of schemes. exceed
,ngly visionary and unsound. They did this
hOwevcr, on; Of virtue. which may have
heen pushed 10 the extent Of rather an ania
bic than criminal weakness for they gene.
rally made these loans at n less rnic of IN
icrcst than they could be effected. If at all
y, home, md apparently for objects of grea,
stand on n different footing. At least, IL,
reference TO the public sanctions, with which
they nre invested. They were made accord
irg 10 yonr reading and mine, OF the Consti.
tuition. To snvereigns under the obligations oi
4, high public faith; mnny Of them were con-
iracted On terms greatly advantageous under
the agency Of honses OF The first ressciaSili.
", whose libcrality and confidence, knew M
bounds.
This confidence was given To our young
country. because our resources I'm M degree
rxaggrraicd) were considered Immense. aud
because IT was ihonght, rs we are of the
Saxon family, we were essentially a debt
paving people. Indeed. from an observation
which larger residence for lh" last five years
in Europe than in America. enables me Ia
make; IL is quite obvlous II we had paid
the interest on our foreign debt. that the rate
Of that interest would have talicn gradually
to the level of that paid by some of the
oldest and best established States in Europe
and that for objects of well funded public
utility, and even Of private enterprise. our
industry at home might have been almost
indefinitely invigorated out Of the large sur
plus capital Of this country. You will say
am sure, that this facility OF borrowing. has
been n great curse 10 our own Thus ] ad
nit. ~ trne To n certain extent; but il was
converted into curse by the action of our
government on the currency of the United
Slni"s. Under udirinus regulations and
Prndrn;al guards, state of things more
propiiious tn the development of the re-.
sources of young country like ours. Dor
rowing of an old one like this. its capital Ia
invigorate its labor. nt n low rate Of interest.
cnnno, well be conceived. If the profits oi
labor transcribed the rate Of interest, it was
In create capital nj hume. From what other
source have sprung those miracles Of enter.
prise aud wealth, that are To be found in
our country IN the midst Of n populat Of
millions, but this conjulnt action Of
our labor on the capi,al of others. The PIT.
grims found no Bank o! England planted on
the rock of Plymouth, or the Hucgrno,s oi
South Carolina, the gems Of Samarcand on
it's thirty Plnins.
But il you consider this faculty Of borrow
ing abroad, my Dear Sir. as on evil, you may
certninlv console yourself with the conviction
that !, no longer exists, although am equal
" convinced that yon will regret the cause
which has produced this want OF all conf.
dencc IN good faith of the people OF the
United States md the consequences which
hnve followed N fixing so severe stigma on
the character of our country.
II is absurd for us 10 ink in America that
we de- not want the capital of Europe at thu
very moment when the Geurrsl Govcrnmen,
Of the States has sent an Agent abroad to
borrow for its daily bread. We do want,
their money and they wan, the results of our
labor. And greatly then is It To be deplored
that this beneficial interchange has been sus
pended under circumstances SO disastrous to
both countries.
Let me now give you n brief statement Of
the present condition Of American credit in
Europe. and without presu,ning To suggest n
remedy, To enquire of you whether the force
of public opinion, If Congress has not the
constitutional competency TO do any thing !
acting through the legislatures of the de-.
iauling States cannot be made sufficiently
potent to convince them Of the truth aud
force of the old adage that. after all in the
long ron, "hones,y is the best policy"
The frs, branch Of my suffice, can dis
cusS in n very few words. As our old friend
Randolph used TO sny. American credit j.
KILLED "sionc dead" John Jacob Asinr
NIGH. obtain nn uncovered credit for n
reasonable amount (whcre he was known. J
aud Mr.. Bates, of the house of Barlngs, by
wearing uut pair %. shoes ~ walking from
the Mansion House in the Minorrs, might
sell fifteen hundred pounds worth OF Massa.
chusctts stock. with large concessions TO the
buyer. The fact Is not the less To be- con
ccalcd thni we beglu 10 be regarded M q
un,ion OF sharpers and swindlers. with whom,
If the day of jugdment should happen io be
Monday, our pay day will not be- until Tues.
day following. THIS r"vulsiun of confidence
does not arise so much from discrcdlt which
attaches TO our resources or, IN other words
our ability To pay. rs Our seeming lndisposI.
lion To pay. The former il siIll considered
~ most cases rs undoubtcd, whilst sicken.
Iug dlsirnst has fallen upon The latter
ilruc" II -, that whilst the rate of interest
has fallen this day 10 Two and half per cent
IN the London market, II is not probable TINT
If The Commissioner OF the United States
six per cent loan, were 10 offer price
which would secure an interest of ten per
without. from considerations of pollc,, under
the advice of Lord Ashbufton. on his return
Ia England. the BarIngs should be induced
Ia take the loan.
When we contrast this Giscrcdit OF our
own country. ic,blng with such gigantic
resources, with The palmy credit at other
States that have little else hut good faith and
high taxation to offer, il IL impossible 10 refer
-, ii. L., 4.