The Caledonian. [volume] (St. Johnsbury, Vt.) 1837-1867, 1843-02-13
General Hamilton Letter to John C.
Calhoun, on the Financial condition
of the United States.
LON DON, Sept, 9th, l542.

you, II Is not alone from tie justification which
find in the recollection of an old and cherished friend
ship, but from the fact that desire to attract the pub
lie attention to its object, through the fundamentally
OF name far more Influential than my own. Be moi
SUPP rised, if you seeit first in the newspapers &
wish not only "to think aloud - but speak aloud
MY purpose in writing you, is to put you in posses
ION OF knowledge of the condition Of the American
credit in Europe, with suggestion of the indspen-
sable necessity of our doing something at home, to
meet the truly alarming crisis, which this state Of
things presents
am far fom defending tho profase confidence
with which European capitalists let their money du-
ring period of six years. from s34 to 1910, to our
countrymen, the faith Of variety of schemes
exceedingly visionary aud unsound. They did this,
however, out of virtue, which may have been
pushed to the extent Of rather amiabe than Grim
inal weakness; for they generally made these loans
at less rate of interest than they could be effected
if at all at home, and apparently for objects of great
public utility. But the loans to the States stands on
different footing. AT least in reference TO the pub
lie sanctions, with which they are invested They
were made according to your reading and mine, of
the Constitution, TO soveregns und er the Obligations
of high public faith; many of them contracted
on terms greatly advantageous under the agency Of
houses of ahe first responsibility whose lberality and
confidence know no bounds
This confidence was given to young country,
because resources Gin no degree exaggerated)
were considered immense, and because it was
thought Of the Saxon family, G were es-
! seutialy del paying people Indeed, from OBJ
servaiion, which longer residence for the last fvo
years in Europe than in America, enables to
make. it is quite obvous five had paid the interest
on our foreign debt, that the rate of that interest
would have fallen gradually TO the level of that paid
by Of the Oldest and hest established States in
Europe, and that Of objects Of well founded public
utility and even of private enterprise, our industry
at home might have been almost indefinitely nvigora
ted out of the large surplus capital ofthis country.
You will say am sure, that this facility of borrow
ing, has been great curse to our own. This I adj
nit is true to certain extent; but converted
into curse Ivy the action of our government the
currency ofthe United States. Under Judcious regula
tons and prudential guards, state of things
propilous to the Development Of the Of n
young country like ours, borrowing Of IN old like
this, its capital to invgorae its labor, mt rate
of interest, cannot well be conceived. II ifo profts
oflabor transcribed the rate of interest," it
ate capital at home. From what other have
sprung those miracles of enterprise and wealth. that
are to be found in our country in the midst of popu-
alion 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 Huegenots of South Carolina, tho
gems cftsamarcnnd on its thirty plains.
But if you consider this faculty of borrowing abroad,
my Dear Sir. as an evil, you may certainly console
yourself with the conviction that it longer lists,
although am equally convinced that you will regret
the cause which has produced this want of all conf
dence in good faith ofthe people Of the United States
and the consequences which followed in fixing
we're a stigma the character Of our country.
1t is absurd for to talk in America that o not
want the capital Of Europe; at the very mome when
the General Government Of the States has
gent abroad borrow for lis daily bread We do
their money and they the results of labor,
And greatly then is it TO be deplored that this bene.
fetal interchange has been suspended under crcum-
stances disastrous to both countries.
Let give you brief statement Of the
present condition of American credit in Europe, and
without presumng to suggest remedy, to inquire Of
you whether the force Of public opinion, (f Congress
hasnot the constitutional competency to do any hing0
acting through the legislatures of the dehurg States
cannot be made sufficiently potent to convince them Of
the truth and force of the old adage that, after all in
the long run, ''houesty is the best policy -
The first branch of my subject can discuss in very
few words. As old friend Randolph used 10 say
American credit is killed Stone dead John Jacob
Astor might obtain uncovered credit for reason
able amount (wfere he was, known and Mr. Bates
of the house of 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 concession to the
buyer. The fact is less to be concealed that we
begin to be regarded nation fsharpers and swim
ders, with whom, if the day Of judgment should hap
pen to be Monday, pay day will not be until
Tuesday following. This revuIsion Of confidence
does not arise so much from disrust which attaches
to our resources or, in other words, our ability TO
paye as seeming indsposition TO pay. The for
mer is still considered in mot undoub;ed,
whilst sickenng ds,rust has fallen upon the latter
Hence is that whilst the rate Of interest has fallen
IT, 90 ,,.o and half mar rant I in ondon