Title: Introductory Note: Report Relative to a Provision for the Support of Public Credit, [9 January 1790]
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[New York, January 9, 1790]
Sources for the ideas expressed by Hamilton in his Report Relative to a Provision for the Support of Public Credit are both varied and difficult to assess. Public credit, or the terms on which a state may borrow, had been discussed in Europe by philosophers, government officials, and political pamphleteers for almost a century before Hamilton drew up his famous Report. Many Americans had also given considerable thought to the problems involved in establishing a system of public credit. From the period of the Revolution to the presentation of the Report to Congress, public credit and finance had been the topic of numerous articles in American newspapers and periodicals. There was, moreover, substantial agreement among most of the correspondents from whom Hamilton elicited opinions on public finance; and the Secretary of the Treasury was not alone in his admiration of the credit institutions that had been established in England.
Of the many Europeans who have been said to influence Hamilton’s thinking on public finance, special mention should be made of Charles Montagu (later Lord Halifax). A Whig member of Parliament under William III and Chancellor of the Exchequer, he used his influence to support the institution of a public debt, the Bank of England, the excise on malt and liquors, and the first tontine in England. It has been suggested that Hamilton’s use of the pseudonym James Montague in an early letter on financial policy was an indication that he was aware of—and even in sympathy with—the ideas of the English statesman. This inference may or may not be farfetched, but it is supported by Hamilton’s praise of policies instituted by Montagu, and there can be no doubt that several of Hamilton’s American contemporaries were aware of Montagu’s views. The author of a short note in The American Museum in 1789, after pointing out the similarity between the current situation in the United States and that faced by Montagu, stated: “In this alarming crisis [in England], the eloquence and abilities of Mr. Montague … saved the nation.” A year later a memorial from the General Assembly of Virginia introduced its criticism of Hamilton’s funding program by pointing out “a striking resemblance between this system and that which was introduced at the Revolution [in England].”
Precedents for some of the ideas expressed in the Report can also be found in the various plans that had been put forward in the decade preceding 1790 by French and British finance ministers to solve problems concerning their respective national debts. Such proposals were well known to most Americans interested in public finance. Hamilton’s suggestion of a tontine to be divided into six classes was probably a modified version of William Pitt’s plan. An article in the Gazette of the United States mentioned Pitt’s tontine, and William Bingham presumably gave Hamilton further information on the subject. Several passages in Jacques Necker’s speech at the opening of the States General in 1789 are similar to parts of Hamilton’s Report. Hamilton had referred to Necker on an earlier occasion, and copies of a pamphlet which included Necker’s speech were available in the United States before the close of 1789. Although on April 30, 1781, in a letter to Robert Morris, Hamilton had praised French finance in contrast to the “abuse of credit” practiced in England, he believed that the abuse had been possible only because of the strength of the credit institutions developed in England during the decade of the sixteen-nineties, and his criticism antedated the financial measures proposed by Pitt. Descriptions of British financial experience were available in most of the printed works on finance and in Parliamentary Debates.
David Hume and Thomas Hobbes have been frequently cited as the authors to whom Hamilton was most indebted. Before Hamilton served in the Continental Congress, he had studied Hume’s Political Discourses. The essay “On Public Credit” contained in this work expresses Hume’s fears concerning the growth and extent of the British debt and the impending bankruptcy to which he believed it would lead, but the section of the essay that was most often quoted during the seventeen-eighties states: “More men, therefore, with large stocks and incomes may naturally be suppos’d to continue in trade, where there are public debts: And this, it must be own’d, is of some advantage to commerce, by diminishing its profits, promoting circulation, and encouraging industry.”
Hobbes made fulfillment of contract the third law of nature and “the Fountain and Original of Justice.” Although Hamilton was critical of Hobbs in a reference made before the Revolution, Hobbes’s discussion of largesse and contract bear a resemblance to Hamilton’s discussion of discrimination. In this connection, Hobbes wrote: “Whensoever a Man transfereth his Right or renounceth it, it is either in Consideration of some Right reciprocally transferred to himself, or for some other Good he hopeth for thereby. For it is a voluntary Act; and of the voluntary Acts of every Man, the Object is some Good to himself.… The mutual transferring of Right, is that which men call Contract … when a Covenant is made, then to break it is unjust. And the Definition of Injustice is no other than the not performance of Covenant. And whatsoever is not unjust, is just.”
Montesquieu, who influenced the thinking of many of the Founding Fathers, shared Hume’s aversion to large public debts, but he also emphasized the importance of support for public credit. Security holders, according to Montesquieu, should not be taxed “as a breach in the public faith cannot be made on a certain number of subjects, without seeming to be made on all; … the state is obliged to give them a singular protection, that the part which is indebted may never have the least advantage over that which is the creditor.”
One historian has called Malachy Postlethwayt’s Universal Dictionary “the most important document yet discovered showing background and immediate sources of some of Hamilton’s principal writings, especially his Reports.” During the Revolution Hamilton had used the Dictionary as an introduction to economic theory and practice. Under various headings in the Dictionary some of the major points in the Report are discussed. Postlethwayt’s emphasis on the importance of transfer of public securities is especially close to the view expressed in the Report. In an article in the Dictionary entitled “Action,” Postlethwayt wrote: “Such is the nature of public credit, that no body would lend their money to the support of the state, under the most pressing emergencies, unless they could have the privilege of buying and selling their property in the public funds, when their occasions required. ’Tis certain, therefore, that the greatest delicacy and tenderness is to be observed, in laying any restraints upon these transactions, lest the public credit should be thereby irrecoverably prejudiced.” Part of Postlethwayt’s article on “Bubbles” gives a similar emphasis. “The other species of bubbling,” Postlethwayt wrote, “arises from the nature of our national debts; for, if between eighty and ninety millions of money are so tied up, as to remain untransferrable, unnegotiable, and not to change hands, who could ever be induced to lend the government money upon the most pressing emergency, even in consideration of the largest interest? Though parliamentary security gives the real value to the national debt, or the public funds, they would be, like the miser’s treasure, useless to the possessor; or like the undiscovered riches of the earth, did not circulation and credit set a market price upon them.”
Precedents for some of Hamilton’s ideas can also be found in Blackstone and Vatel. Blackstone’s Commentaries, which Hamilton studied when he was preparing for admission to the bar, states: “The only advantage, that can result to a nation from public debts, is the encrease of circulation by multiplying the cash of the Kingdom … always ready to be employed in any beneficial undertaking, by means of it’s transferrable quality.…” Vattel, one of the writers on natural law with whom Hamilton probably became familiar during the same period, states: “What [the sovereign] … borrows for the service of the state, the debts contracted in the administration of public affairs, are contracts of strict right, obligatory with respect to the state and the whole nation. Nothing can dispense with the discharging of these debts.”
In addition to the influence which European writers may have had on Hamilton’s views, it has been suggested that he obtained some of the ideas contained in the Report from contemporaries in the United States. For example, Hamilton has been called “a product of the Robert and Gouverneur Morris school,” and to substantiate this assertion reference can be made to Robert Morris’s two letters to Congress in 1781 and 1782 and to Gouverneur Morris’s plan of American finances in 1789. But Hamilton earlier had expressed some of the views that he shared with these two men, and the differences between the proposals of the two Morrises and the contents of Hamilton’s Report are as striking as the similarities. At least three scholars have also pointed out the parallel between William Bingham’s letter of November 25, 1789, to Hamilton and some of the proposals in the Report. Although there are some points in Bingham’s letter which are similar to those in the Report, many of these points had been suggested by Hamilton before 1789, and the method for scaling down the debt proposed by Hamilton had been explicitly rejected by Bingham as “opposed to every principle of a sound and magnanimous Policy.”
The fact that many of the views on finance included in the Report were put forward by Hamilton before they were stated by his contemporaries suggests that his intellectual debt to his associates in and out of Congress and to current periodical literature was not as large as has sometimes been supposed. Between 1779 and 1781 in correspondence with James Duane, Robert Morris, and others, as well as in published articles signed “The Continentalist,” Hamilton had discussed measures necessary for the support of public credit. During his service in Congress he further elaborated his views in his “Defense of Congress” and in an answer to Rhode Island’s objections to the impost.
Although the experience under the Confederation was probably not a formative influence, the policies and failures of Congress served as a background of specific precedents. Funding, a national bank, and the establishment of a sinking fund had all been included among the various schemes proposed by Congress for the support of public credit. These institutions were to be financed by the sale of western lands, quotas from the states, foreign loans, and the impost. But either political or economic considerations rendered each of these devices ineffectual. The sale of western lands was impeded by the unequal effect of land cessions on various states, by the costs of surveying and protecting the land, and by the fear with which some states viewed the settlement of these lands. Quotas failed partly because of the strain which the costs of the Revolution had imposed on state finances and partly because many states believed that they had contributed more than their share to the cost of the war. Foreign loans were obtained with increasing difficulty after the Revolution because of the changes in the foreign and domestic situation of the lending nations, because of the uncertainty concerning repayment, and because of the growing tendency of foreign lenders to invest in the domestic debt of the United States. Although repeated attempts were made between 1783 and 1788 to gain the acquiescence of the states to a general impost, the different situations of various states respecting both foreign trade and domestic revenue prevented its general adoption.
During the three years preceding the presentation of the Report on Public Credit, many articles on public finance appeared in The American Museum and the Gazette of the United States. Hamilton was a charter subscriber to the former and undoubtedly read the latter. During this period an essay on some aspect of government finance and public credit was reprinted in almost every issue of The American Museum. Discussion was less frequent immediately after the ratification of the Constitution, but the topic regained importance during the second half of 1789. In the February, 1787, issue, “Tom Thought-full” described past contracts as “sacred things.” A reprint of Thomas Paine’s Common Sense, Part IV, was published in the March issue stating that a national debt would be a national bond and urging that public lands be used for discharge of the debt. In the same issue “an honest chearful citizen” discussed the resources which the United States could use to establish public credit and emphasized the increase in commerce and the decrease in taxes which would result. The April issue included the report of February 15, 1786, of the Committee of Finance of Congress; in May, Washington’s circular letter of 1783 was reprinted. The May issue also contained a discussion of discrimination between original and current holders of government obligations. One of the articles opposing discrimination, after discussing the benefits which would accrue to the nation if justice were done to public creditors, concluded that “instead of being considered as a curse, the Public Debt will become a Public Blessing.” More material appeared in June, including a reference to the law of Pennsylvania which had attempted to discriminate between original and current holders of army certificates. Between June, 1787, and July, 1789, few articles on finance were printed in The American Museum, but the August, 1789, issue revealed a renewed interest in public finance as a result of the failure of the Committee on Ways and Means to take up the question of debt service in connection with the revenues necessary for the current year.
During the fall of 1789, Hamilton asked several people for information and opinions on various aspects of public finance. The replies to these requests undoubtedly were used by Hamilton in drawing up the Report. For example, in the course of the Report he mentions Samuel Osgood’s letter concerning postal revenues. He also refers to the ideas which “have been suggested to him” concerning the settlement of accounts between the states. Among such suggestions, which bear a close resemblance to the proposals contained in the Report, were those supplied by Oliver Wolcott, Jr. Some of the sources of revenue mentioned by James Madison and Stephen Higginson are the same as those discussed in the Report, and Hamilton’s opinions on discrimination in the Report closely resemble the ideas advanced by John Witherspoon in his letter to the Secretary of the Treasury. Finally, there are many similarities of expression between the Report and the letter which Hamilton received from William Bingham.
The attempt to assess the influence of the opinions of Hamilton’s contemporaries on the Report is made even more difficult by the fact that ideas were exchanged in conversations as well as in letters. Witherspoon and Bingham, for example, both closed their letters to Hamilton with the statement that they hoped that they would be able to converse with him more fully in person. William Duer, who according to John Adams had a very important influence on Hamilton’s Report, probably expressed his views in conversation; and members of the old Board of Treasury (also mentioned by Adams) may have spoken to Hamilton. William Constable wrote in December, 1789, that he had “tried” Hamilton on various aspects of debt provision. Despite the possibility of such conversations, the fact remains that before 1787 Hamilton had expressed in letters and articles many of the arguments used in the Report. Later opinions with which he came in contact may have been more valuable to him as corroboration for his own views or as an indication of opinions to which the Report should be addressed than as a source of ideas for the plan proposed.
When one turns to specific proposals made by the Report, it is possible to demonstrate that few of Hamilton’s ideas were altogether original. The assumption of state debts provides a case in point. This question had been considered by several Americans in the years immediately preceding Hamilton’s presentation of his Report, and it had been mentioned during the Constitutional Convention. On February 27, 1788, Samuel A. Otis had written to the Speaker of the Massachusetts House of Representatives: “I find it in contemplation to assume the State debts, and fund state and federal at 3%. What think you of such a project? Would it be just? And how would it affect Massachusetts? This or a Sponge I apprehend will be attempted at some period not far distant.” An amendment to the Constitution proposed by the North Carolina Ratifying Convention prohibited the Federal assumption of state debts or intervention in state provision for them. In the August, 1789, issue of The American Museum, an article proposed Federal provision for the state debts on the grounds that an unequal portion of the public debt was held by citizens of various states and “… such attachment to local interests might distress the tranquillity of the states by creating discontents and dissentions.” Another argument used in the same article was that under the Constitution the states had been deprived of those tariff revenues that had been used to support state securities, “… under the persuasion that they would be fully recompensed under the federal government.” An article in the November 21, 1789, issue of the Gazette of the United States also used the argument of the impost to support the necessity of assumption. Four days later an article in the Gazette proposed the assumption of state debts by the United States because these debts had been “incurred for them and in equity they ought to see … [them] funded.” On November 29, 1789, Oliver Wolcott, Jr., wrote to his father, “It will probably be also proposed to consolidate the debts of the Union, in the settlement of the state accounts. This measure though difficult, is I believe necessary, as the states will by excises or otherwise, defeat any general system of revenue which can be proposed, unless this shall be effected.” On the same day Wolcott wrote to Hamilton outlining a plan for the settlement of accounts and assumption that was similar in almost every respect to the plan suggested in the Report.
Assumption could not be considered without reference to its effect on the settlement of accounts with the states. This problem hung like a cloud over every discussion of finances and current quotas from the period of the Revolution to the debate over Hamilton’s Report. During the Revolution Robert Morris had expressed his fear of the effect of the unsettled balances among the states. In 1783, Hamilton and Madison had taken part in the debate over settlement of accounts between the states. In April of the following year a Grand Committee on the National Debt gave a report which is in Thomas Jefferson’s writing. In answer to complaints of inequitable quotas, the Report notes that “almost every state thinks itself in advance” on its quota to the United States and that: “it has been the constant wish of Congress that these accounts should be settled, and the contributions of each be known and credited.”
Under the Confederation various plans had been proposed for the settlement of accounts between the states and the Union. They differed in the extent to which credits would be allowed to the states for expenditures in their own defense and in the proof of expenditure which was required. They disagreed upon whether the unpaid quotas, apportioned expenses of the war, and state debts assumed should be debited in the final settlement. If the expenses of the war were to be charged as debits, what ratio of apportionment should be used? Land values, population estimates, and the basis for quotas of the requisitions of Congress were suggested. But land values, population estimates, and quotas had been different at different periods during the war and postwar era, and, whatever the basis chosen, the states which had been occupied or fought over for the longest period during the Revolution favored “abatements” to make allowance for the greater difficulties which they had experienced in supporting the war. Another suggestion emphasized the current financial capability of the states rather than the ability of the various states to contribute at the time the expenses were incurred.
In 1787, an ordinance adopted by Congress gave wider latitude to claims for credits against the Union. This ordinance specified that “advances or disbursements … not sanctioned by the resolves of Congress or supported by regular vouchers” should be allowed, and it gave the Board of Commissioners power to “make such allowance for the same as they shall think consistent with the principles of general equity.” The states south of Maryland favored this ordinance, for their accounts had for the most part not been approved by Congress and they did not have adequate records of their appropriations. After this ordinance had been proposed to Congress, Madison wrote: “The settlement of the public accounts has long been pursued in various shapes, and with little prospect of success. The idea which has long been urged by some of us, seems now to be seriously embraced, of establishing a plenipotentiary tribunal for the final adjustment of the mutual claims on the great and simple principle of equity.” The North Carolina delegates wrote to their state’s General Assembly that the ordinance “will wind up the whole expenses of the War on principles perfectly equitable.” In more specific terms the Virginia delegates warned William Heth that Virginia should accede to the new plan “conceiving that a greater degree of Justice is attainable in an adjustment of the Accounts of Virginia against the United States in the present State of the business, than is to be expected in any later period, or by an agreement of other Commissioners than those now employed.” But to Massachusetts the ordinance appeared somewhat less than perfectly equitable. Samuel A. Otis wrote, “… I have a hint that the ordinance for appointing the three Commissioners is somehow so cooked that the Penobscott business although consolidated at £116,000, will be thrown out by the Board.… So true is it, in public and private concerns, that the free horse is ridden to death. The expenditures of the Board of War, the great disproportion of men we had in the field, the astonishing loss by old money, and want of alertness in bringing forward accounts, with regularity and in season will hang like a mill stone about the neck of Massachusetts for ages.”
The ordinance adopted by Congress in 1787 and the plans of both Robert Morris in 1783 and Gouverneur Morris in 1789 would all have increased the total Federal debt by $80,000,000 to $90,000,000. These proposals avoided the problem of settling the ratio of apportionment of the costs of the war by expressing the state credits as a debt due from the Union to the states at six percent and debiting only payments from the Union or quotas remaining unpaid. Gouverneur Morris also suggested that the sinking fund be used to purchase the state securities on the market and that the states should then be debited with their nominal amount. Capitalization of the cost of the war as a debt due from the Union to the states would have increased the power of the states and thus would have strengthened the hydra which Hamilton believed had to be beheaded.
Hamilton approached with caution the question of reversing part of the policy of the ordinance passed by Congress in 1787, for he knew that the principle of settlement of the accounts between the states would require “all the moderation and wisdom of the government.” The Report, nevertheless, differed in three major respects from the ordinance of 1787: The Federal Government rather than the states would disburse payment to state creditors; the remainder of quotas still due from the states would not be charged against the states; and the cost of the war would be apportioned as a debit against the states.
But the debts outstanding from a state to her own citizens could not be so easily written off. Although the amount of these debts was considered a credit for the state in the accounts between the states, several states had already encountered difficulty in servicing their debts. Under the Confederation the attempt to service the Massachusetts state debt and her assumed Federal debts on hard money principles had precipitated Shays’ Rebellion. The weight of a similar debt in South Carolina and recent crop failures in that state had left it unable to cover its current expenses without recourse to additional loans. Other states which had hoped to gain by the final settlement of accounts preferred to wait for that settlement before assumption was discussed.
As vexing as the questions of assumption and the settlement of the state accounts were the problems raised by the various proposals for discrimination between the original and subsequent holders of securities. In 1783, a circular to the states, an extract from which was used by Hamilton in his Report, opposed discrimination between original creditors and transferees. But the context of the argument over discrimination soon began to change, for between 1783 and 1789 a large part of the domestic debt was either absorbed into the state debts or serviced by the states, and public creditors turned increasingly to the state governments for payment of both state and Federal securities. While Pennsylvania was considering a funding act in 1785, Pelatiah Webster suggested a scheme of discrimination between original creditors and their assignees. “It is very certain,” Webster wrote, “and undoubtedly confessed an all sides, that our soldiers, when their services were over, and their accounts fairly adjusted, were entitled to the liquidating balances in their favor, in genuine money: this was in justice due them for their services, and if they were paid, no more than justice was done them; but if, instead of this they were paid nominally twenty shillings in a certificate … which was … no more than 2s. 6d.… it is plain they were paid but 2s. 6d. in the pound, and the remaining 17s. 6d. is still due to them.” Under Webster’s plan current holders were to receive the current market price, and the difference between the nominal value and the market value of the securities when issued was to be paid to the original creditors. The securities of current holders were to be purchased on the market by commissioners in charge of a sinking fund.
As the seventeen-eighties progressed, increasing numbers of Americans began to express their opinions on discrimination. For example, the May, 1787, issue of The American Museum includes articles both by those favoring discrimination and by those opposing it. One critic of discrimination in this issue was quoted as saying that discrimination “… if given the sanction of law would forever destroy all confidence in the faith and integrity of the public.” The June, 1787, issue of the same periodical mentioned the Pennsylvania law which contained provision for discrimination. According to Pelatiah Webster this provision applied only to final settlement certificates issued to the Army, and, in any case, it had been evaded to a considerable extent in practice by the method of proof required. John Witherspoon wrote to Hamilton in October, 1789: “We still have an idea meeting us in conversation and publication that a discrimination must be made between original Creditors and Speculators as they call them.… Discrimination is totally subversive of public credit.”
Some opponents of discrimination used the analogy of a lottery to illustrate their criticism. Thus, William Bingham wrote: “The purchaser [of securities] … may be resembled to a Dealer in a Lottery, where there are Many Blanks to a Prize. Would it be just to contest the payment due to the fortunate Ticket because it had comparatively cost a Trifle.” Although Hamilton in his Report does not use the analogy suggested by Bingham, he does state that the chance which the certificate holder took was “a hazard which was far from inconsiderable, and which perhaps, turned, on little less than a revolution in the Government.” This problem was also considered by Hobbes when he wrote: “Also when a Prize is propounded to many, which is to be given to him only that winneth; or Money is thrown amongst many, to be enjoyed by them that catch it; though this be a Free-gift; yet so to win, or so to catch, is to merit, and to have it as due.… I merit not that the Giver should part with his Right; but that when he has parted with it, it should be mine, rather than anothers.”
Discrimination was not the only device proposed by those wishing to mitigate the effects of depreciation and speculative transfer of securities, for it was also suggested that much the same results could be achieved by scaling down the debt’s principal or by reducing the interest on it. Because of past depreciation, transfer at reduced prices, and speculation, it was generally believed that the debt would not be paid at its nominal value. It had been proposed that three percent be paid on the Federal debts and the assumed debts of the states. Some believed that repudiation was a clear possibility. Even after the new government had been instituted, there were indications that creditors would willingly accept a scaled-down specie payment in lieu of an “ever widening circle of paper promises.”
The idea of scaling down the debt came from many quarters. Precedents were available in the financial history of Great Britain and France; and the matter was discussed in the Continental Congress, American periodicals, and letters addressed to Hamilton in October and November of 1789. As early as February, 1783, a delegate to Congress from Virginia “said that … no Civil Creditor would dare to put his claims on a level with those of the army, and insinuated that the speculations which had taken place in loan office certificates might lead to a revision of that subject on principles of equity.…” Stephen Higginson in his letter to Hamilton on November 11, 1789, warned against the payment of full interest in specie: “They cannot think it right for those, who have bought them up a 2/ to 3/ in the pound, to derive so great an income from them; and eventually to receive the full Sum of the principal in Specie.…” Higginson also wrote: “Though it were true that by imposts and excises, when exerted as far as our case will admit, and duly and exclusively collected by the Union, a sufficient Revenue may be raised to pay the interest on the public Debts including those of the several states, and to support the federal government; it is a very important question how far it should be applied to the first of those uses. There is nothing that would so much alarm, and rouse the feelings of the State governments and of their constituents, as a proposition, with an ability, to pay the full interest on public Securities in Specie.”
In contrast to the ideas expressed by Higginson were those of William Bingham, Gouverneur Morris, and Robert Morris. All three were opposed in varying degrees to changes in the debt. Bingham, for example, believed that neither the principal nor interest of the debt should be reduced until the market rate of interest had been lowered; then, as in Britain, the offer to return the principal, available elsewhere at cheaper rates, would induce the creditors to make a reduction in their claims. In considering the opposing views expressed by such men as Higginson and Bingham, Hamilton faced a problem similar to that posed by assumption of state debts. He had, in short, to make sure that the reduction which was made necessary by revenue limitations and political considerations did not shake the belief of creditors—especially foreign lenders—in the ability of the new government to meet its obligations.
In his Report Hamilton proposed that the debt be scaled down by a reduction of the annual interest payments, and he advanced seven different plans for achieving that objective. Although the decision to scale down the debt apparently grew out of his belief that a reduction of the interest was necessary to bring service on the debt within the range of probable revenues, it should also be pointed out that there were precedents for some of the various plans which he suggested. Both France and England had attained the same ends by somewhat different methods. In France, refunding had been accompanied by an enforced change in the legal rate of interest for all public and private loans, while in England those holding public securities had been offered the alternative of a lower rate of interest or repayment of the principal. The problem had also been considered by various Americans. For example, an undated fragment in the Hamilton Papers, Library of Congress, of a computation in Philip Schuyler’s handwriting appears to give a calculation that is based on the same principle that Hamilton used in his third plan. As early as 1781, Hamilton himself had proposed that a schedule of annuities be incorporated in a plan for a national bank in the same fashion that annuities were used by the Bank of England. And the annuity plans, which Hamilton proposed in 1790, along with the added suggestion of a tontine of six classes, were probably adaptations of British precedents. In discussing the advantages of a tontine, the Gazette of the United States stated that William Pitt’s plan for a tontine was so favorable to the public that there was some doubt that the loan would be filled. The British plan set a limit upon the amount of the annuity which any survivor could receive; Hamilton’s plan provided for even greater security for the public by making the limit on additions to annuities the reversion of four-fifths of the annuities.
No claim of originality can be made for Hamilton’s proposals for a sinking fund. Although early in the eighteenth century a sinking fund had been established in England, it had been used not only to support public credit but as a source of emergency funds for current expenses. For almost a century European politicians and political theorists had considered the merits of a sinking fund as a method either for reducing a nation’s indebtedness or for supporting its public credit. Blackstone spoke of sinking funds as the “last resort of the nation” for reversing the trend toward increasing debt and eventual bankruptcy; and Montesquieu wrote: “When the Credit of the state is not entire, there is new reason for endeavoring to form a sinking fund, because this fund being once established, will soon procure the public confidence.” Richard Price, who had strongly advocated the establishment of an inviolable sinking fund in England, stated that a sinking fund of one million dollars per annum would pay off the entire debt of the United States in slightly more than twenty years. Necker had advocated the institution of a caisse d’amortissement in his address to the States General as a means of supporting public credit.
In the years preceding the presentation of Hamilton’s Report to Congress, several Americans had discussed the desirability of a sinking fund. In 1778, Gouverneur Morris had proposed to Congress a sinking fund financed in part by postal revenues; and in 1781, Hamilton himself had estimated that a fund of approximately $1,200,000 per annum appropriated to the payment of the debt would be a “sufficient fund for the redemption of the debt within a period of thirty-five years. A report to Congress in 1786 stated: “The whole product [from sales of western lands] … is appropriated for the payment of the principal and interest of the national debt, and no part thereof can be diverted to other purposes.” Tench Coxe in a pamphlet circulated at the Constitutional Convention wrote: “The general impost … the sale of the lands and every other unnecessary article of public property … would put the sinking and funding of our debts within the power of all the states.” Between November, 1787, and October, 1789, several articles in The American Museum had discussed the theory and practice of sinking funds on both sides of the Atlantic.
In any discussion of the origins of the Report’s proposals for a sinking fund, special mention should be made of the system established by William Pitt in 1786, which, it has been suggested, was a model for Hamilton’s plan and which was recommended to Hamilton in a letter from William Bingham. But other precedents and suggestions were available to Hamilton. His earlier advocacy of sinking funds antedates the system established by Pitt, and the employment of officials of cabinet rank as commissioners for a sinking fund was made more specific in Gouverneur Morris’s plan of 1789 than in Bingham’s letter.

Hamilton’s proposals for scaled-down payments in specie rather than full payments in “paper promises” apparently satisfied the demands of most domestic creditors. But there still remained the question of the policy that should be pursued toward European creditors. In his Report, Hamilton noted that there was general agreement on the fact that the foreign debt already incurred would be paid according to contract. Madison presumably accepted this view, for in November, 1789, he wrote to Hamilton: “I take it to be the general expectation that the foreign part of the debt is to be put on the most satisfactory footing.…” An article in 1787 in The American Museum warned: “But in case of war who would lend us, if our neglecting seven years to pay the sum borrowed will justify our not paying at all.” In a similar vein an article in a 1789 issue stated: “It is problematical whether the United States could negotiate a loan at all on the present financial arrangement.”
Although many Americans agreed that the United States should honor its obligations to foreigners, they did not necessarily endorse Hamilton’s proposals for new European loans. But Hamilton was insistent on this point, and he began his Report by emphasizing—as he had since 1780—that on occasion even the wealthiest nations of Europe had to resort to borrowing. Under the Confederation the difficulty in floating foreign loans had been due almost as much to the exorbitant rates of interest that could be obtained by speculation in the domestic debt as to the fear among Europeans that such loans would not be serviced or repaid. Jefferson had recognized the effect on foreign borrowing of foreign speculation in the domestic debt when he attempted to float a European loan in 1788. At that time purchase of the foreign loan would have yielded only slightly more than the stipulated five percent on the capital invested, while speculation in the domestic debt could have yielded almost twelve percent. In this connection it should be noted that Hamilton concluded his Report with a warning concerning the probable effects of foreign speculation in the domestic debt if measures were not taken to raise the value of domestic securities.
Those who were opposed to foreign loans emphasized the drain of specie that would be produced by payments to Europe and the possibility of foreign influence or intervention in domestic politics in case of default. Although Hamilton shared the fear of foreign intervention, he believed that the use of foreign specie would help to promote the economic independence of the United States. In his opinion profits derived from the investment of European funds in domestic manufacturing, commerce, and agriculture would more than compensate for the money paid out in interest to foreigners. This was a point to which he, of course, devoted considerable attention in his Report on Manufactures. These views were shared by other Americans, and in an article in The American Museum in August, 1789, the writer stated that after provision had been made for the payment of interest, “money will be attracted from abroad on terms of the usual interest, employed in commerce agriculture and manufacturing, will yield a profit far superior to the rate of interest, will aid in support of additional taxes, make friends and draw immigrants.” For his own part, Hamilton left no doubt concerning his opinion of the importance of foreign capital to the United States, for his proposals included requests for European loans amounting to $17,000,000, a sum larger than the total foreign debt outstanding in 1789 including principal and accrued interest.
The fact that Hamilton was not necessarily an innovator is illustrated by his revenue proposals, for he explicitly denied the originality of the plan proposed for raising the money needed to service the foreign and domestic debt. The writings and precedents on which he relied for formulating his views on assumption, discrimination, refunding, and the sinking fund also provided him with ideas for obtaining the funds that would be required to finance such programs. There were, of course, ample precedents in European history for a tariff, and the impost had been a subject of debate and controversy throughout most of the Confederation period. The excise, however, was a more controversial matter. Excise taxes first assumed importance in England under William III. Sir Robert Walpole had subsequently proposed a combination of impost and excise to prevent smuggling. In discussing the controversy raised by Walpole’s excise bill, Adam Smith wrote: “Faction, combined with the interest of smuggling merchants, raised so violent, though so unjust, a clamour against that bill, that the minister thought proper to drop it; and from a dread of exciting a clamour of the same kind, none of his successors have dared to resume the project.” Several Americans had also maintained that some method in addition to an impost was needed for raising sufficient amounts of revenue. In 1782, Robert Morris had suggested an excise, and at the end of the decade an article in The American Museum criticized the sole reliance on the impost as provided by the Revenue Act of 1789. In 1789 both Madison and Higginson in letters to Hamilton suggested that taxes other than the impost should be imposed before the states acquired a de facto right to levy such taxes.
If the controversies raised by Hamilton’s Report have at times tended to obscure the fact that he was not the first to propose many of the ideas which he advanced, the originality of his synthesis cannot be overemphasized. There are few state papers which carry implications for so many aspects of public policy and which at the same time contain such detailed provisions for the implementation of policy. The institutions suggested in the Report, the ideas upon which they were based, and even many of the phrases by which they were described were not always original. But phrases were sometimes put in a context with which their original authors would have found scant sympathy; ideas were sometimes taken from writers whose main emphasis was quite different from Hamilton’s; and the institutions that the Report proposed were integrated to form parts of a political and economic system that can only be described as uniquely Hamiltonian.


Title: Enclosure: Schedule B, [31 December 1789]
From: Nourse, Joseph,Hamilton, Alexander
To:

SCHEDULE B
A General Statement of the Foreign Loans, Shewing in Abstract, the Capital Sums Borrowed, and the Arrearages of Interest to the 31st December, 1789.

Capital sums borrowed

Livres.
Dollars.
Cts.

Of the Royal French Treasury, on Interest at 5 per cent.

24,000,000

In Holland, guaranteed by the French Court, at 4 per cent.

10,000,000

Livres,
 4,000,000
6,296,296

Of the Royal Spanish Treasury, at 5 per cent.

174,011

Lenders in Holland,

Florins.

First Loan,
5 per cent.

5,000,000

Second ditto,
4 per cent.

2,000,000

Third ditto,
5 per cent.

1,000,000

Fourth ditto,
5 per cent.

1,000,000

Florins,
9,000,000
 3,600,000

Capital,
–  –
10,070,307

Arrearages of Interest to 31st December, 1789.

On the French Loan.
  Livres.
Dollars.
Cts.

1789, Jan. 1, Five Years Interest
on the
 6,000,000 at 5 per cent.
277,777.
 77

Sept. 3, Six do.
on the
18,000,000   do.
999,999.
 96

Nov. 5, Four do.
on the
10,000,000 at 4 per cent.
296,296.

On the Spanish Loan.

Arrearages on the Spanish Loan of 174,011 Dollars,

to 21st March, 1782, at 5 per cent.
5,093.
 27

March 21, Seven Years Interest on do.
60,904.
 62

 1,640,071.
 62

Total dollars,
11,710,378.
 62

Note. There were certain parts of the Capital of the Dutch guaranteed Loan of 10,000,000 Florins, and of the French Loan of 18,000,000 Livres, which became due at the following periods, and remain unpaid, viz.

Dollars.
Cts.

1787.
{
Sept. 3, First Payment
of the
18,000,000.

1,500,000.

277,777.
 77

Nov. 5, First do.
of the
10,000,000.
1,000,000.
185,185.
 19

1788.
{
Sept. 3, Second do.
of the
18,000,000.
}
the same
462,962.
 96

Nov. 5, Second do.
of the
10,000,000.

1789.
{
Sept. 3, Third do.
of the
18,000,000.
}
the same
462,962.
 96

Nov. 5, Third do.
of the
10,000,000.

Dollars
1,388,888.
 88

Treasury Department, Register’s Office, 31st Dec. 1789.
Joseph Nourse, Register.

To the Arrearage of Interest to 31st December, 1789, above stated, Amounting to
1,640,071.
 62

Add one year’s Interest from 1st January, to 31 December, 1789, on 186,427, dollars, and 69 cents, being the Amount Principal Sum due to foreign officers, employed in the service of the United States, which Interest is annually payable at the House of Mons. Grand Banker at Paris, at 6 per cent.
  11,185.
 66

Arrearages of Interest to 31st December, 1789,
Dollars,
1,651,257.
 28

The above Addition was adverted to, after the conclusion of the Report; but as it makes no material difference, an alteration in consequence of it, is deemed unnecessary.

Alexander Hamilton, Secretary of the Treasury.


Title: Enclosure: Schedule D, [31 December 1789]
From: Nourse, Joseph
To:

SCHEDULE D
An Estimate of all the Interest Which Will Accrue on the Domestic Debt of the United States, From Its Formation to the 31st December 1790, of Such Partial Payments As Have Been Made on Account Thereof, and of the Balance Which Will Remain to be Provided for, to Pay Up the Interest Fully to That Period.

Dollars.
 Cts.

The total amount of interest arising on the loan-office debt, from the opening of the several offices in 1776, to the 31st of December, 1790,

9,534,478

The total amount of interest arising on the army debt, from the several periods of its drawing interest, to the 31st December, 1790,

5,105,099

The total amount of interest arising on certificates issued by the thirteen state commissioners, estimated at

2,146,799

The total amount of interest arising on certificates issued by the commissioners for the commissaries, quarter-masters, marine, cloathing and hospital departments, estimated at

737,338

The total amount of interest arising on the debt registered at the treasury, estimated at

366,646

The total amount of interest on debts entered in the treasury books, but for which certificates have not been issued by the Register, so as to become a part of the registered debt, estimated at

   83,936

Total
17,974,296

Dollars.
 Cts.

From this total amount of interest, the following deductions are to be made, viz So much paid on the loan-office debt, in old emission, equal to
372,368.
 30

In new emissions, as specie,
39,433.
 49

In bills of exchange, as ditto,
1,663,992

So much paid by the several states in indents, paid into the treasury on account of their quotas on the existing requisitions of the late Congress,
2,244,231.
 31

So much paid by the state of New-Jersey to their own citizens, on the domestic debt, not included in the schedule of taxes,
424,442.
 22

So much paid by the state of South-Carolina, being two years interest on 222,465 dollars, and 9–90ths, the amount of certificates issued to the line of that state, at 6 per cent. is
26,695.
 73

Total amount of Interest paid,
4,771,163.
  5

Deduct three years interest, estimated in the foregoing, on 960,915 dollars, and 42–100ths, being so much of the capital of the domestic debt received in payment for lands and other public property,
172,964.
 75

Total amount of deductions,
4,944,127.
 80

Leaves a balance of thirteen million and thirty thousand one hundred sixty-eight dollars, and 20 cents, which will accrue on the domestic debt, and for which provision is to be made to pay the interest fully up to the 31st December, 1790,
13,030,168.
 20

It is to be observed, that as the certificates which have been issued for the principal of a debt of more than twenty-seven millions of dollars, are in themselves exceedingly numerous; and that as those several certificates bear an interest from different periods, it has not been practicable to form a statement of arrearages, but by ascertaining in the most accurate manner, the different periods of time from which the several parts of the domestic debt bear interest, and therefrom calculating the interest to 31st December, 1790.

Treasury Department, Register’s Office, 31st December, 1789.
Joseph Nourse, Register.


Title: Enclosure: Schedule E, [9 January 1790]
From: Hamilton, Alexander,Hodgdon, Alexander,Duer, William,Pomeroy, Ralph,Bancker, Gerard,Pendleton, John,McCall, J.,Knox, Henry
To:

SCHEDULE E
Abstract of the Public Debt of the States Undermentioned, Agreeably to Statements Transmitted in Pursuance of the Resolution of the House of Representatives of the 21st of September, 1789.

Massachusetts

Dollars.
 Cents.

Principal with interest to the 1st day of Nov. 1789.
£. 1,548,040 7 9
Lawful.

Due to sundries for which no certificates have yet been issued,
    20,000

Total,
£. 1,568,040 7 9
at 6s. per Dol.
5,226,801.
 29

Connecticut

Principal bearing interest from the 1st of Feb. 1789,
    560,404

To which ought to be added for balance of state bills emitted in the year 1780, bearing interest at 5 per cent. to the 1st March 1785, estimated at
   24,948

Total,
£. 585,352 0 0
at 6s. per Dol.
1,951,173.
 33⅓

New-York

Principal and interest computed to the 1st day of January 1790,
1,032,616 2 0

From which ought to be deducted for amount of principle and interest of continental securities loaned to the state in pursuance of their act of the 18th day April 1786, estimated at
   565,586

Leaves for state debt proper,
£. 467,030 2 0
at 8s. per Dol.
1,167,575.
 25

New-Jersey

Principal unredeemed,
295,755 4 11
at 7/6 per Dol.
788,680.
 65⁵⁄₉

Virginia

Principal of domestic debt,
1,063,396 17 1

Ditto of foreign debt with interest to the 1st January 1790,
    40,826 1 1

Total,
£.1,104,222 18 2
at 6s. per Dol.
3,680,743.
  2⁷⁄₉

South-Carolina

Principal on domestic debt,
1,069,652 2 4

Indents of interest on ditto in circulation,
71,325 7 2

Foreign debt, principal and interest, due to the 1st of January 1789,
    115,810 0 1

Total,
£. 1,256,787 9 7
at 4/8 per Dol.
 5,386,232.
  5

Total dollars,
18,201,205.
 60⁶⁄₉

It will be observed, that the period to which interest is calculated on the debts abovementioned is only specified with accuracy on the statements which have been transmitted from Massachusetts, Connecticut and New-York. From the best information which the Secretary can obtain, he presumes—That in the statement made of the debt of New-Jersey, interest has been calculated to the 31st day of December 1788. That on the debt of Virginia, interest has been calculated to the 31st day of December 1788. On that of South-Carolina, to the 1st day of April 1790.
From the states of New-Hampshire, Pennsylvania, Delaware, Maryland, North-Carolina and Georgia, no accounts of their respective state debts have been forwarded.

The Secretary is however of opinion from the result of enquiries made by him—That the state debt of New-Hampshire may be estimated at about
Dollars   300,000

That the state debt proper of Pennsylvania (that is exclusive of their assumption of the continental debt) at about
Dollars   2,200,000

And that of Maryland, at
Ditto   800,000

From the above statement and estimates, the amount of principal and interest of the state debts (exclusive of Delaware, North-Carolina, Georgia and Rhode-Island) appears to be about twenty-one millions and a half; but as the debts of the four last states are not included in the above sum; and it is possible that a greater arrearage of interest may be due on the state debts than is at present ascertained, the aggregate of the principal and interest may be computed at twenty-five millions of dollars.
Alexander Hamilton, Secretary of the Treasury.

Commonwealth of Massachusetts.
A Statement of the Debt of the Commonwealth of Massachusetts, as it respects the notes issued by the several Treasurers, to the first of November, 1789.

November 1, 1789, exclusive of half pay notes,
£. 1,403,459 16 11

Notes issued to widows and orphan children of the deceased officers of the late continental army, for the seven years half pay, agreeable to the resolves of Congress,
8,246 11 10

Interest on the foregoing notes since October, 1781
£. 579,660 6 4

Of which has been paid
  443,326 7 4

Interest remaining due, November 1, 1789,
   136,333 19 0

£. 1,548,040 7 9

Remains due on the books of the committee for settling with the late continental army, to the widows and orphan children of deceased officers of said army, and to officers and soldiers for their services, about
20,000

N.B. By an act of the legislature, one third part of the revenue of Excise is appropriated to pay the exigencies of government, and the other two third parts for the payment of interest of the notes, which pays about one quarter part of the interest; the other three quarters are unprovided for.

Treasury-Office, Boston, October 31, 1789.
Alexander Hodgdon, Treasurer.
Compared with the original, in the office of the Secretary of the Treasury.
William Duer.

State of Connecticut
A Statement of the Public Debt of the State of Connecticut, as it stood November 1, 1789.

Notes issued to the Connecticut line, payable
June 1, 1782,
£. 2,334 13 11½

Ditto
ditto
1783,
2,339 13 4

Ditto
ditto
1784,
3,252 12 1

Ditto
ditto
1785,
42,309 6 1¾

Ditto
ditto
1786,
28,189 6 3¾

Ditto
ditto
1787,
28,448 5 6¾

Ditto
ditto
1788,
21,593 4¼

Ditto
ditto
1789,
20,097 5 7¼

Ditto dated February 1, 1781, issued per act of Assembly,Nov., 1780,
153,229 8 6¼

Ditto of various dates, ditto per act of ditto, May, 1781,
33,947 11 8½

Ditto dated June 1, 1781, ditto ditto, for remounting dragoons,
1,932 8 0

Ditto of various dates, ditto   ditto        May, 1783,
41,841 6 1¾

Ditto issued per act of May, 1789, for old notes re-loaned,
  180,890 1 0

  560,404 18 9¼

Notes issued per particular acts of Assembly, payable out of the civil List funds,
    2,856 11 4

Certificates for interest, &c. issued on the state debt, up to February 1, 1789, and remaining unpaid November 1, 1789,
   19,140 3 9¾

Balance of orders unpaid, drawn by Oliver Wolcott, Esq. payable out of the 1s tax, granted in January, 1783,
     692 8 10.

Balance of state bills, which were emitted in March, June & July, 1780, with the interest at 5 per cent. to 1st of March, 1785, estimated at
   24,948 9 1

There are a number of pay table orders drawn on former taxes, the amount, supposed not great, cannot be ascertained.

There is also out-standing, a sum of old emissions of paper, issued before the war—the amount unknown.

Account of Loan-Office and Final Settlement Certificates in the treasury of the State of Connecticut.

Loan-office certificates,
£. 442 19 7

Final settlement certificates,
   2,151 17 1

 £. 2,594 16 8

Amount of interest certificates that were issued upon the evidence of the United States debt, received by the treasurer of the state of Connecticut for taxes and impost duties, and delivered to William Imlay, Esq. continental loan-officer, from January 9, 1786, to November 1, 1789,
£. 33,996 15 3

Compared with the original in the office of the Secretary of the Treasury.

A Statement of the Funds provided for the payment of the principal and interest of the public debt of the state of Connecticut.

Balances of taxes laid for the payment of interest on the state debt, and the first three classes of army notes, as appears from the treasury books, November 1, 1789, being the balance of fifteen taxes, including abatements, collecting fees &c.
£. 40,489 14 10

Balance of excise and impost bonds payable, including collecting fees, &c.
9,070 15 2

A tax of four pence on the pound, laid on the list, 1788, amounting to £. 1,462,860 10 11 for the payment of interest on the state debt, and the balance of three first classes of the state notes; the nett avails estimated at
20,266 14 4

A tax of eight pence on the pound, on the same list, laid for the payment of the balance of state bills, orders on 2s. 6d. and 1s. taxes, and part of the principal of the state debt; the nett avails estimated at
40,533 8 8

Excise for the payment of interest on the state debt, &c. estimated at
5,000 0 0

The first article in the above statement of funds will probably, upon settlement of those old taxes, fall greatly short of the sum set down; to say how much, is merely conjectural. There will also be a loss upon the excise and impost bonds. The amount of the excise for the current year is very uncertain.

Comptroller’s-Office. 1st December, 1789.
Ralph Pomeroy, Comptroller.

State of New-York
A Statement of the debt of the State of New-York.
The following species of Certificates, &c. have been issued by the State, and are still unredeemed, viz.

Principal Sum, Spec. val.
Interest to Jan. 1, 1790.

Certificates for Money loaned, pursuant to resolutions of the 4th day of April, 1778,
£. 111 13 3
£. 78 14 5

for do. pursuant to a law of the 30th of June, 1780,
741 6 0
422 10 9

for horses purchased in the year 1780,
904 5 0
515 8 5

for depreciation of pay to the army date 31st July, 1780,
54,520 1 7
25,669 17 4

for pay of the year 1781, to do. dated the 1st January, 1782,
17,972 6 9
8,626 14 0

for pensions to widows of military officers,
8,104 18 2
3,647 4 2

for pay of levies, militia, &c. &c.
42,871 4 3
18,220 5 3

for other certificates received on loan, pursuant to a law passed the 18th April, 1786,
523,848 5 1
144,058 5 4

for four-fifths of the interest due on those received on loan,
105,669 9 8

for claims on forfeited estates
25,897 8 10
3,884 12 3

Bills of credit, called New Emission, emitted pursuant to a law passed the 30th of June, 1780, bearing interest,
3,612 16 0
1,174 3 1

Ditto, emitted pursuant to resolutions of Congress, and Convention of this State, reduced to specie value,
    1,047 0 0

£. 785,300 14 7
£. 206,297 15 0

There are large demands against forfeited estates, unliquidated, and other liquidated, for which no certificates have yet issued, to the amount of
41,017 12 5

There are no funds specially provided for redeeming the aforesaid Certificates, except the following, viz.

The arrears of old taxes may probably produce about
£. 10,000 0 0

Quit rents, about
20,000 0 0

Fifteen townships of new lands, or 375,000 acres, ordered to be sold (by a law passed the 25th February, 1789,) and are now surveying.

Gerard Bancker, Treasurer of the State of New-York.
New-York, November 30, 1789.

An Account of Continental Securities now in the Treasury of the State of New-York, viz.

Principal.
Int. 1st. Jan. 1790.

Certificates issued by William Barber,
£. 352,471 13 1
£ 105,741 9 11

Ditto        “    by loan-officers in this State,
277,448 16 4
83,234 12 11

Ditto        “    by John Pierce, Burrall, Denning, Bindon, and Fox,
299,614 4 5
89,884 5 4

Interest facilities,
    2,502 14 8

£. 932,037 8 6
£ 278,860 8 2

Of the above-mentioned Loan-Office and Barber’s Certificates, the sum of £. 470,649 17 6 was received in on loan by the State in 1786, and one fifth of the interest that was due thereon, to the 31st December, 1784, then paid, and certificates for the remaining four fifths issued, payable in one year, of which certificates three fourths remain unredeemed, as represented in the former part of this statement.

Gerard Bancker. Treasurer of the State of New-York.
New-York, November 30, 1789.
Compared with the Original in the office of the Secretary of the Treasury.

An Account of Certificates due from the United States to the Inhabitants of the State of New-Jersey, which draw interest at the Treasury.

Principal.
Annual Interest.

1st. Continental loan-office certificates,
£. 420,511 0 10
25,230 13 3

2nd. Certificates issued by John Pierce, Commissioner, for arrears of pay, &c.
147,118 15 2¼
8,827 2 6

3d. Certificates by Benjamin Thompson, Commissioner,
  344,237 11 2
  20,654 5 0

£. 911,867 7 2¼
£. 54,712 0 9

Commutation

4th. Certificates issued by John Pierce, Commissioner, and given to the officers of the late Jersey line, for their commutation.
66,899 2 6

State Debt

1st. Certificates given to the officers and soldiers of the late Jersey line, for the depreciation of their pay, of which there was outstanding October 1, 1786,
99,526 11 4

2nd. Ditto given by the Commissioners in the several counties for militia pay, of which there was outstanding, October 1, 1786,
55,365 17 7½

3d. Certificates given by Silas Condict, Commissioner,
121,521 8 7

4th. Ditto given by the Treasurer and Auditor for demands against confiscated estates,
32,020 2 9

5th. Ditto issued by the Auditor for militia pay,
     821 4 7½

£. 309,255 4 11

Paid into the Treasury since October 1786,
   13,500 0 0

£. 295,755 4 11

Annual interest of state debt,

£. 17,745 6 3½

Compared with the Original in the Office of the Secretary of the Treasury.

Abstract of the Public Debts due from the State of Virginia.

On Interest at 6 per cent
{
Army debt for pay and depreciation of the officers and soldiers,
£. 936,830 7 6

Loan-office debt,
119,382 7 4

Certificates issued for the paper money funded,
7,183 2 3

Balance due to Foreign creditors, including the interest (at 6 per cent) to the 1st of January, 1790, on £. 9,415 0 2 part of the said balance, for which warrants have not been drawn by the creditors,
40,826 1 1

John Pendleton, Auditor of Public Accounts.
Virginia, Auditor’s-Office, November 20, 1789.
Compared with the original in the office of the Secretary of the Treasury.

The Auditor-General reports the following Statement of the Debt due by the State of South-Carolina, viz

Principal Indents.

Balance issued from the treasury of the state aforesaid, and yet remaining to be issued on the 1st of October, 1789,

£. 1,069,652 2 4½

To be cancelled by

Balance of bonds for confiscated property
£. 79,985 10 0¼

Purchases of ditto, unsettled for,
12,910 0 0

Balance of amercements,
7,713 4 6

Ditto for bonds for public property,
35,065 10 6

Ditto of lands granted to 1st November, 1789,
  42,568 1 7¾
£. 178,242 6 8

Balance still to be cancelled,
Sterling,
£. 891,409 15 8½

Special Indents.

Amount issued, and to be issued,

£. 440,368 0 0

Deduct, for so much received into the treasury,

  369,042 12 9¾

Balance in circulation, and yet to be issued,

£. 71,325 7 2¼

Agreeably to a report of the committee of ways and means, the debts due to the State for the arrears of taxes, &c. are sufficient to cancel the above balance.

Foreign Debt.

Amount due to sundry persons,

£. 93,244 17 4

Balance of interest due 1st January, 1789,

£. 29,558 4 11¼

Deduct, for so much paid J. S. Cripps, agent,
£. 4,949 5 4¼

Balance paid to such creditors as were here or their attorneys,
  2,043 16 10
  6,993 2 2¼
   22,565 2 9

Principal and balance due 1st January, 1789,

£. 115,810 0 1

Funds appropriated by the Legislature.

Out of the taxes payable the 1st April, 1790,

£. 10,000

Interest on the paper medium, to 1st May, 1791,

12,750

Balance of bonds given for confiscated property, payable in specie,

1,610 17 3¼

The sums due, and that shall become due, for amercements, in specie,

8,371 16 6

Balance of bonds given for duties, payable by instalments,

6,240 14 3

Bonds for duties due prior to 1st Jan. 1788, not installed,

233 3 4½

A tax of ¼th of a dollar per head, per annum, on all negroes and mustizoes, and mulattoes, for ten years, from February, 1791, the number computed to be about 100,000, which will amount to

  58,333 6 8

Sterling,
£. 97,539 18 0¾

Auditor’s-Office, Charleston, 30th November, 1789.
J. McCall, Auditor.
Compared with the original in the office of the Secretary of the Treasury.


Title: EnclSchedule G, [9 January 1790]
From:
To:

SCHEDULE G
Table Shewing What Annuity Would be Enjoyed by the Survivor of Any Two Persons Of Certain Ages, for the Remainder of Life, After the Determination of the Life in Expectation, Upon The Present Payment of One Hundred Dollars, Computing Interest at Four per Cent. Per Annum, And the Duration of Life According to Doctor Halley’s Tables.

Age of the youngest.
Age of the eldest.
Annuity of survivor.
Age of the youngest.
Age of the eldest.
Annuity of survivor.
Age of the youngest.
Age of the eldest.
Annuity of survivor.
Age of the youngest.
Age of the eldest.
Annuity of survivor.

10
28.248

20
28.169

30
28.555

45
30.620

15
26.392

25
26.041

35
26.001

50
27.005

20
24.545

30
23.923

40
23.496

55
23.375

25
22.716

35
21.753

45
21.061
45
60
20.040

30
20.920

40
19.825
30
50
18.730

65
16.957

35
19.168
20
45
17.876

55
16.529

70
14.240

10
40
17.464

50
16.018

60
14.484

45
15.847

55
14.261

65
12.600

50
32.164

50
14.263

60
12.620

70
10.894

55
27.731

55
12.782

65
11.100

50
60
23.513

60
11.237

70
9.707

35
28.993

65
19.662

65
10.099

40
26.164

70
16.257

70
8.905

25
27.816

45
23.381

30
25.556

50
20.702

55
34.286

15
28.169

35
23.331
35
55
18.172

60
28.843

20
26.198

40
21.159

60
15.820
55
65
23.742

25
24.219

45
19.047

65
13.666

70
19.175

30
22.276
25
50
17.030

70
11.724

35
20.376

55
15.117

60
37.509

40
18.528

60
13.331

40
29.673
60
65
30.423

15
45
16.750

65
11.689

45
26.469

70
24.044

50
15.053

70
10.173

50
23.337

55
12.968

40
55
20.354

65
42.481

60
11.948

60
17.604
65
70
32.679

65
10.553

65
15.060

70
9.270

70
12.799
70
70
50.994

To find the Annuity upon the Survivorship of the youngest of any two lives, expressed in this table, look for the respective ages under their respective heads, and opposite the number, which corresponds with the age of the eldest will be seen the Annuity required.


Title: Enclosure: Schedule H, [9 January 1790]
From:
To:

SCHEDULE H
Table for a Tontine of Six Classes, the Number of Lives in Each Class Being Indefinite, Calculated on a Payment of Two Hundred Dollars by Each Subscriber, and at a Rate of Interest of Four Per Cent. The Computation on the Best Life in Each Class, And on the Supposition that the Subscribers to Each Class Will not be Less Than the Respective Numbers Specified in the First Column.

Dividends at successive periods during the probable continuance of life.

Number of lives in each class.
Ages.
Annuity whilst all are in life.
At the expiration of 10 years.
At the expiration of 20 years.
At the expiration of 30 years.
At the expiration of 40 years.
At the expiration of 50 years.
At the expiration of 60 years.
At the expiration of 70 years.

75
1 to 20
8,426
9,722
11,490
14,042
18,054
25,278
42,130
126,390

64
21 to 30
8,676
10,272
12,606
16,314
23,110
39,618
138,666

54
31 to 40
9,046
11,102
14,366
20,354
34,890
122,282

44
41 to 50
9,650
12,488
17,608
30,328
106,150

34
51 to 60
10,714
15,178
26,020
91,068

24
61 to 70
12,802
20,518
71,802

This Table, which is calculated on so small a number of persons, will serve to shew the greatness of the advantage to fortunate survivors, in case of a numerous subscription.


Title: Enclosure: Schedule I, [9 January 1790]
From:
To:

SCHEDULE I
General Estimate for the Services of the Current Year.

Civil List, as per No. 1,
254,892.73

War department, No. 2,
155,537.72

Military Pensions, No. 3,
 96,979.72

Dollars,
507,410.17

With an eye to the necessary provisions for the foreign department, and to other arrangements which may be found requisite, it appeared advisable to state in the report, to which this is annexed, a sum of six hundred thousand dollars for the current service.
Treasury Department, January 5, 1790.

No. I
Estimate of the Expenditure for the Civil List of the United States, on the Present Establishment for the Year 1790.

Dollars.

For the compensation to the President of the United States,
25,000

That of the Vice-President,
5,000

Compensation to the Chief Justice,
4,000

Ditto to each of the five Associate Judges, 3500 dollars each,
17,500

To the Judges of the following Districts, viz.

District of Maine,
1,000

New-Hampshire,
1,000

Massachusetts,
1,200

Connecticut,
1,000

New-York,
1,500

New-Jersey,
1,000

Pennsylvania,
1,600

Delaware,
800

Maryland,
1,500

Virginia,
1,800

Kentuckey,
1,000

South-Carolina,
1,800

Georgia,
1,500

Attorney-General,
 1,500

69,700

Dols.   Cts.
Dols.   Cts.

Compensation to the members of Congress, estimating the attendance of the whole number for six months, viz.

Speaker of the House of Representatives, at twelve dollars per day, 2,190

Eighty members, at six dollars per day, 87,600

Travelling expences computed, 15,000

104,790

To the Secretary of the Senate, one year’s salary, 1,500

Additional allowance estimated for six months, at two dollars per day, 365
1,865

Principal Clerk to the Secretary of the Senate, for the same time, at three dollars per day,
547.50

Engrossing Clerk to the Secretary of the Senate, estimated for same time, at two dollars per day,
365

Chaplain to the Senate, estimated for six months, at five hundred dollars per annum,
250

Compensation to the door-keeper of the Senate, for the same time, at three dollars per day,
547.50

Messenger to the Senate, for the same time, at two dollars per day.
365

Clerk of the House of Representatives, for one year’s salary, 1,500.

Additional allowance calculated for six months, at two dollars per day, 365.
1,865

Principal Clerk in the office of do. estimated for same time, at three dollars per day,
547.50

Engrossing Clerk for some time, estimated at two dollars per day,
365

Chaplain to the House of Representatives, estimated for same time, at five hundred dollars per annum,
250

Serjeant at arms, estimated for same time at 4 dols. per day,
730

Door-keeper, for same time, at 3 dollars per day,
547.50

Assistant door-keeper for do. at 2 dollars per day,
365
183,100

Treasury Department

Secretary of the Treasury,
3,500

Assistant of the Secretary of the Treasury,
1,500

Five Clerks, at 500 dollars per annum each,
2,500

Messenger and office keeper,
150

Comptroller of the Treasury,
2,000

Principal Clerk to do.
800

Four clerks, at 500 dollars each,
2,000

Treasurer,
2,000

Principal Clerk to do.
600

Auditor of the Treasury,
1,500

Principal Clerk to do.
600

Twelve Clerks to do. who, besides the current business under the New Government, has the settlement of the accounts which arose under the Confederation, in the quarter-master, commissary, clothing, hospital, and marine departments, and ordnance stores; and also the accounts of the secret and commercial committees of Congress, at 500 dollars each,
6,000

Register of the Treasury,
1,250

One Clerk on the books of the public creditors, called Funded Debt at the Treasury, transfers, &c.
500

One Clerk in the office of the Register, employed in keeping the accounts of interest arising on the domestic debt,
500

One do. on the principal books of the treasury, in journalizing and posting into the ledger,
500
25,850

One Clerk in copying fair statements of the public accounts, and other transcripts as required from the treasury books,
500

One do, in keeping the accounts of the registers, signed and sealed, &c. for ships transmitted to the collectors of the customs at the several ports; filing duplicates of registers issued by the collectors; keeping the accounts of the transfers of vessels, and other business of record, arising from Act for registering of vessels, regulating the coasting trade, and other purposes therein mentioned,
500

Two do. on the old accounts of the treasury, and books and accounts of the thirteen late state commissioners, at five hundred dollars each,
1,000

Messenger and office keeper to the comptroller, auditor and register’s office,
 150
2,150

Department of State

Secretary of that department,
3,500

Chief Clerk,
800

Three Clerks, at 500 dollars each,
1,500

Messenger and office keeper,
 150
5,950.

Department of War

Secretary of that department,
3,000

Chief Clerk,
600

Two Clerks at five hundred dollars each,
1,000

Messenger and office keeper
 150
4,750.

Government of the Western Territory

The Governor for his salary as such, and for discharging the duties of Superintendant of Indian affairs in the northern department,
2,000

The Secretary of the Western Territory,
750

The Three Judges, at eight hundred dollars each,
2,400
5,150

Officers employed to settle the accounts between the United States and individual States.

Three Commissioners of the General Board, at two thousand two hundred and fifty dollars per annum,
6,750

Chief Clerk,
600

Four Clerks, at four hundred dollars each,
1,600

Messenger and office keeper,
150

Paymaster-General, and Commissioner of Army Accounts,
1,250

Eight Clerks, at five hundred dollars each,
4,000

One do. at four hundred dollars,
400

One do. at four hundred and fifty dollars,
 450
15,200

Pensions Granted by the Late Government

  Isaac Van Vert, John Paulding, David Williams,
  }
  a pension of two hundred dollars per annum to each, pursuant to an act of Congress of 3d November 1780,

600

Dominique L’Eglise, per act of 8th of August, 1782,
120

Joseph Traversie, per do
120

Youngest children of the late Major-General Warren, per Act of 1st July, 1780,
450

Eldest son of do. per act of 8th April, 1777, estimated at,
600

Youngest son of General Mercer, per act of 8th April, 1777, estimated at,
700

      James M’Kenzie, Joseph Brussells, John Jordan,
      }
      per act of 10th September, 1783, entitled to a pension of forty dollars each per annum,

120

Elizabeth Bergen, per act of 21st August, 1781,
53.33

Joseph De Beauleau, per act 5th August, 1782,
100

Richard Gridley, per acts of 17th November, 1775, and 26th February, 1781,
444.40

Lieutenant-Colonel Touzard, per act of 27th October, 1778,
360.
3,667.73

For Incidental and Contingent Expences Relative to the Civil List Establishment

Under this head are comprehended fire wood, stationary, together with printing work, and all other contingent expences for the two Houses of Congress; rent and office expences of the three several departments, viz. Treasury, State, War, and of the General Board of Commissioners, and Paymaster-General.

Congress, estimated at,
5,000

Treasury Department, viz.

Rent, 500

Contingencies of the Secretary’s office, 500

Comptroller’s 400

Auditor’s 200

Register’s 200

Treasurer’s 200
2,000

Ditto        War Department,
600

Department of State,
500

Board of Commissioners,
500

Paymaster, and Commissioner of Army Accounts,
 425
 9,025

Dollars,           254,892.73

This estimate corresponds with the existing provisions; but it will probably receive additions from others in the course of the session: In particular it will be observed, that there is no article respecting the salaries of Foreign Ministers, their allowances not having been regulated by law. Neither does the estimate include those objects which remain to be provided for in consequence of some deficiency in the estimate for the services of last year, and also from certain demands on the Treasury, founded on acts of the late Government, which require an appropriation by Congress, previous to their being discharged. These will form an estimate by themselves under the head of Contingencies.

Register’s-Office, 5th January, 1790.
Joseph Nourse, Register.

No. II
Estimate of Monies Requisite for the Department of War, for the Year 1790.

Dollars.
Dols.   Cts.
Dols.   Cts.

Infantry

1 Brigadier General with the pay of Lieutenant Colonel Commandant for 12 months at 50 Dollars,
600

2 Majors,
45
1,080

7 Captains,
35
2,940

7 Lieutenants,
30
2,520

8 Ensigns,
20
1,920

1 Pay master,
10
120

1 Adjutant,
10
120

1 Quarter Master,
10
120

1 Surgeon,
45
540

4 Surgeon’s Mates,
30
1,440

28 Sergeants,
6
2,016

28 Corporals,
5
1,680

14 Musicians,
5
840

490 Privates,
4
23,520
39,456.

Artillery

1 Major 12 Months,
at 45 Dol.
540

4 Captains,
35
1,680

8 Lieutenants,
30
2,880

1 Surgeon’s Mate,
30
360

16 Serjeants,
6
1,152

16 Corporals,
5
960

8 Musicians,
5
480

240 Matrosses,
4
11,520
19,572

Subsistence

1 Brigadier General 12 Months
at 48 Dol.
576

3 Majors,
20
720

11 Captains,
12
1,584

23 Subalterns,
8
2,208

1 Surgeon,
16
192

5 Surgeon Mates,
8
 480
5,760

Rations

For 840 Non Commissioned Officers and Privates, one ration pr. day each for 365 days, is 306,600 rations at 12 cents pr. ditto,
36,792
101,580

  Clothing, 840,
  }
  940 suits at 26 dollars each,

  Contingencies,   100,

24,440

Quarter Master’s Department

Transportation. Including the transportation of the recruits to the frontiers, the removal of troops from one station to another, the transportation of clothing, ordnance, and military stores for the troops on the frontiers—the necessary removal of ordnance military stores—the hire of teams and pack horses—the purchase of tents, boats, axes, camp-kettles, boards, fire-wood, company books, stationary for the troops, and all other expences in the quarter-master’s department,

15,000

Hospital Department

For medicines, instruments, furniture and stores for an hospital for the frontiers, also for attendance when necessary at West-Point,

1,000

Ordnance Department

For salaries for the store keepers at the several deposits, viz.

West-Point,
}
3 at 40 dollars pr. month,

Virginia,

Springfield,

1,400

Charleston, 1 Store keeper at 100 dols. pr. annum,
100

2 Assistants, at 15 do. pr. month,
360

1 Store keeper at Philadelphia,
500

1 ditto,   —     Rhode-Island,
96

1 ditto,   —     Lancaster,
96

1 ditto,   —     Fort Harkemer, 120

His subsistence, 1 dollar pr. week, 52
172

Rents of Buildings for Deposits

Philadelphia, 752.66

Virginia, 350

West-Point, 400
1,502.66

Labourers at the several Deposits,
400

8 Artificers at the posts on the frontiers, including armourers, at 5 dollars pr. month,
480

Coopers, armourers, and carpenters employed occasionally at the several arsenals,
500

The expence of materials and constructing twenty new carriages for cannon and howitzers,
2,000.
7,646.66

Buildings for arsenals and magazines are highly requisite in the southern and middle departments, for which particularly estimates will be formed.

Contingencies of the War Department, Viz.

For maps, hiring expresses, allowance to officers for extra expences, printing, loss of stores of all kinds, advertising and apprehending deserters,

3,000

Contingencies for the War Office, Viz.

Office rent, wood, stationary, desks, book cases, sweeping, &c.

600

Subsistence due the officers of Colonel Marinus Willet’s regiment in 1782,
786.6

Pay due Lieutenant Joseph Wilcox, pay master to the regiment lately commanded by Col. David Humphreys,
315

Pay subsistence and forage due the officers appointed by the State of Rhode-Island, under the act of Congress of the 20th October, 1786,
  1,770
  2,871. 6

Total Amount as above,
156,137.72
156,137.72

Deduct contingencies of the War Office, office rent, wood, stationary, desks, &c. as above, the same being included with the salaries in the civil list estimate,
   600

Dollars
155,537.72

Summary of the Foregoing

Pay of the troops,
59,028

Subsistence of ditto,
42,552

Clothing of ditto,
24,440

Quarter masters department,
15,000

Hospital department,
1,000

Contingencies of the war department,
3,000

Contingencies of the war office,
600

Arrears of pay and subsistence unprovided for,
2,871. 6

Ordnance department,
  7,646.66

Dollars,
156,137.72

War-Office, December 29th, 1789.
Henry Knox, Secretary for the Department of War.

No. III
Estimate of the Annual Pensions of the Invalids of the United States, Viz. Taken from Returns in the War-Office, Dated as Follows:

Dols.   Cts.
Dols.   Cts.

November
28,
1789,
—
New-Hampshire,
—
3,024

December
14,

—
Massachusetts,
—
11,166

December
1,

—
Connecticut,
—
7,296

December
31,

—
New-York,
—
15,588

February
2,

—
New-Jersey,
—
4,357. 6

December
10,

—
Pennsylvania,
—
16,506

For 1787,

—
Virginia,
—
 9,276.66

67,213.72

Conjectural—No returns having been received.

  Suppose Rhode-Island and Delaware nearly equal to New-Hampshire,
3,170

  Maryland nearly equal to Connecticut,
7,000

  North-Carolina, South-Carolina and Georgia, nearly equal to New-Hampshire, Connecticut and Virginia,
19,596

29,766

Dollars,
96,979.72

War-Office, 31st December, 1789.
H. Knox, Secretary for the Department of War.


Title: To Alexander Hamilton from Gaspard Joseph Amand Ducher, 10 January 1790
From: Ducher, Gaspard Joseph Amand
To: Hamilton, Alexander

Edenton [North Carolina] 10 janr. 1790
Monsieur
Les representants du peuple de la caroline du nord assemblés a fayetteville ont adoptée la nouvelle constitution; comme vous connoissez mon attachement pour les americains, j’espere que vous me rendez la justice de croire que je vois avec plaisir tout ce qui peut concourir à leur union et à leur prosperité.
Dès que ma Santé sera rétablie je me propose de faire un précis des nouvelles loix commerciales des états unis de l’amerique. Je désire voir augmenter les rapports commerciaux entre votre paÿs et le mien.
Deux nations n’auront jamais plus de raisons de s’unir par le Commerce; quelle est la nation d’europe qui peut consommer une plus grande quantité des denrées americaines?
Quelle puissance peut fournir aux americains a meilleur marché, le sel, le brandy, les vins, les melasses les soieries, les beaux draps, les cambricks &c &c &c?
Avec quelle nation les americains ont ils plus de profit de navigation ou l’ofres de leurs denrées qui est moitié de la valeur de plusieurs?
De quelle nation les americains ont ils plus d’émigrants a esperer en restreignant I’importation des marchandises manufacturées par cette nation?
Quelle puissance d’europe est la plus jalouse du Commerce et de la marine des autres nations?
Quelle puissance peut donner aux americains plus de réciprocité dans le Commerce et la navigation?
Quelle puissance peut influer davantage pour ouvrir aux américains des connexions commerciales avec autres puissances?
Je m’arrête ici quant à present sur les considerations de l’intéret commercial entre la france et l’amérique.
J’ai un mot a vous dire sur la révolution qui vient de s’opérer en france. Je ne crois pas, Monsieur, que vous ajoutiez aucunne confiance aux mensonges importés ici de la grande bretagne. Louis 16 s’est immortalizé en rendant au peuple le droit sacré de réprésentation libre et égale, en renonçant à toute taxe non générale et non consentie par leurs representants de la nation. L’assemblée nationale a montré tant de fermeté, tant d’attachement pour la liberté et le roi qui en est le restorateur que je considère cette assemblée comme une phalange descendüe du ciel pour assurer sur la terre le triomphe de la liberté et des loix. L’assemblée nationale en france, Louis 16 Washington et Lafayette donneront la liberté à toute l’europe.

J’ai l’honneur d’être avec l’attachement le plus respectueux Monsieur   Votre très humble   et très obéissant serviteur
Ducher
M. Le Colonel hamilton.


Title: To Alexander Hamilton from John E. Howard, 11 January 1790
From: Howard, John E.
To: Hamilton, Alexander

[Annapolis] January 11, 1790. Encloses a statement of Maryland’s public debt.


Title: To Alexander Hamilton from Nathaniel Fosdick, 12 January 1790
From: Fosdick, Nathaniel
To: Hamilton, Alexander

[Portland, District of Maine, January 12, 1790. On February 8, 1790, Hamilton wrote to Fosdick: “I have received your letter of the twelfth of January.” Letter not found.]


Title: To Alexander Hamilton from Aaron D. Woodruff, 13 January 1790
From: Woodruff, Aaron D.
To: Hamilton, Alexander

Trenton, January 13, 1790. “In the Action of Carter agt. Kearney … I have repeatedly pressed the Sheriff on the Business & have recd. for Answer that you have consented to a Stay of the Execution.… I am inclined to doubt the Truth of the Assertion & shall be obliged to you to know how far this Indulgence has been given & whether I am at Liberty to order the Sheriff to proceed on the Execution.…”


Title: To Alexander Hamilton from Tobias Lear, 16 January 1790
From: Lear, Tobias
To: Hamilton, Alexander

United StatesJanuary 16th. 1790.
Sir
By order of the President of the United States, I transmit you the copy of a Report from the Post Master General accompanyed with the Draft of a bill respecting the establishment of the Post Office, to the end that the same may be laid before the house of representatives, with any remarks or suggestions, which may appear to you proper, in relation to the Finances.
I have the honor to be with perfect respect   Sir   Your most Obt. Servant
Tobias LearSecretary to the President of the United States


Title: To Alexander Hamilton from Sharp Delany, 18 January 1790
From: Delany, Sharp
To: Hamilton, Alexander

[Philadelphia] January 18, 1790. “… There is one branch of Revenue which if it did not interfere too much with some of the states would produce 100,000 Dollars ⅌ annm. I mean 2 ⅌ Ct on Sales at public Auction. This has no doubt fell under your knowledge, but if not you will give it a due decision.”


Title: Enclosure: Thomas Jefferson to John Jay, 27 August 1789
From: Jefferson, Thomas
To: Jay, John

Paris Aug. 27. 1789.
Sir
I am honoured with your favor of June 19. informing me that permission is given me to make a short visit to my native country, for which indulgence I beg leave to return my thanks to the President, and to yourself, Sir, for the expedition with which you were so good as to forward it after it was obtained. Being advised that October is the best month of the autumn for a passage to America, I shall wish to sail about the first of that month: and as I have a family with me, and their baggage is considerable, I must endeavor to find a vessel bound directly for Virginia if possible. My last letters to you have been of the 5th. and 12th instant. Since these I have received information from our bankers in Holland that they had money in hand sufficient to answer the demands for the Foreign officers, and for the captives: and that moreover the residue of the bonds of the last loan were engaged. I hereupon wrote to Mr. Grand for an exact estimate of the sum necessary for the officers. He had stated it to me as being 45,653 ₶-11s-6d a year, when I was going to Holland to propose the loan to Mr. Adams, and at that sum you will see it was stated in the estimate we sent you from Amsterdam. He now informed me it was 60,393 ₶-17s-10d a year. I called on him for an explanation. He shewed me that his first information agreed with the only list of the officers and sums then in his possession, and his last with a new list lately sent from the Treasury board on which other officers were set down who had been omitted in the first. I wrote to our bankers an account of this error, and desired to know whether, after reserving the money necessary for the captives they were in condition to furnish 254,000. ₶ for the officers. They answered me by sending the money, and the additional sum of 26,000. ₶ to complete the business of the medals. I delivered the bills to Messrs. Grand & co. to negociate and pay away, and the arrears to the officers to the 1st. day of the present year are now in a course of paiment. While on this subject I will ask that an order may be forwarded to the Bankers in Holland to furnish, and to Mr. Grand to pay the arrearages which may be due on the 1st. of January next. The money being in hand, it would be a pity that we should fail in paiment a single day merely for want of an order. The bankers further give it as their opinion, that our credit is so much advanced on the exchange of Amsterdam that we may probably execute any money arrangements we may have occasion for on this side the water. I have the honor to send you a copy of their letter. They have communicated to me apprehensions that another house was endeavoring to obtain the business of our government. Knowing of no such endeavors myself, I have assured them that I am a stranger to any applications on the subject. At the same time I cannot but suspect that this jealousy has been one of the spurs at least to the prompt completion of our loan. The spirited proceedings of the new Congress in the business of revenue has doubtless been the principal one.


Title: Enclosure: Wilhelm and Jan Willink, Nicholaas and Jacob Van Staphorst, and Nicholas Hubbard to Thomas Jefferson, 13 August 1789
From: Willink, Wilhem,Willink, Jan,Van Staphorst, Jacob,Van Staphorst, Nicholaas,Hubbard, Nicholas
To: Jefferson, Thomas

Amsterdam 13th. August 1789
We had the honor to remit Your Excellency
£169,718.16 the 10th. Inst. in 23 Bills of Exchange and now inclose
110,281. 4 in 22 Do. ⅌ inclosed List.
together £280,000 for accounts of the United States; being the Amount requisite for payment of the Arrears of Interest due to Foreign Officers and for completing the Article of Medals; The Receipt whereof We request Your Excellency’s Acknowledgment to us, and to the Board of Treasury.
Your Excellency was regularly acquainted by us, that One of the Conditions which the Necessities of the United States and the then state of their Credit compelled our Submission to, to raise Monies for Payment of the last Interests, was, A Freedom to the Subscribers for 200 Bonds, to receive during all the current Year as many Bonds as they might chose at the same price, until the whole of the last Loan should be run off; Facility which the Subscribers availed themselves of, to keep the Price of this Effect low, more so than Circumstances and their Solidity merited. Desirous of remedying this evil and to augment the Respectability of the Claims upon the United States, We proposed to a very few of the first Dealers in Loans, to reserve for their joint account the remaining 280 Bonds of this Loan, allowing them what time they chose to receive them, as We should have no immediate need of the Money. Impressed equally with us of the propriety of our Views, and the probability of their speedy Realisation, They readily consented, and We have now publickly declared We have no more Bonds for sale; Which will We trust, so enable them to better the Price and to establish the Credit of the United States, as to render practicable at a more reasonable rate, the Negotiation of any future Loans, the United States may think it their Interest or wish to open here, The success whereof can be but little if at all doubted, after the Organisation and Operation of their New Federal Government, Which We experience to have given already great Strength and Stability to their Credit; More especially when it is considered, that under Circumstances not only less encouraging but even sometimes dismaying, We have always paid the Interests to the Day, and by this constant regularity during Seven Years, the Money Lenders are so accustomed to the punctual Receipt of their Interests at our Houses, as well as confident of its Continuance that they now rank the Americans among the most certain and solid Effects circulating here; An Advantage We deem so improveable, that an Opportunity may soon offer for transferring at least a considerable Share of the Debt due by the United States to the Court of Versailles, An Object We Know Your Excellency and believe the United States to have much at heart, as independant of doing France at this Juncture a considerable service, by Payment of the debt due to that Country, without loss at least material to the United States. Its final Reimbursement by such Shifting, would be prolonged to a Period, when it must be supposed its Discharge will be very easy to the United States. In this Situation of Things, We are of opinion Your Excellency would do well, to obtain from the United States with the least possible delay, sufficient Powers to Your Excellency or His Successor, for negotiating this Business with the Court of Versailles, and passing the Bonds here, So that We might seize the first favorable Moment of putting the Plan into Execution. Should Your Excellency’s Absence be for any length of time, and the Chargé d’Affaires not be acquainted with Business of this Nature or competent to transact it, The necessary Powers might be given to us to pass the Bonds and settle the Matter with the French Ministry; To which We would readily attend, being desirous on all occasions, to evince our Zest to promote the Interests of the United States. We are respectfully Your Excellency’s Most obd & very hble Servts,
Wilhem & Jan WillinkN & J. Van Staphorst & Hubbard


Title: From Alexander Hamilton to Benjamin Lincoln, 19 January 1790
From: Hamilton, Alexander
To: Lincoln, Benjamin

Treasury DepartmentJanuary 19th: 1790.
Sir
I am favored with your letter of the 16th. of last month; which I would have replied to sooner if my time had not been engrossed of late in preparing business for the consideration of the Legislature.
The case of Mr. Jefferies (as stated by himself) appears a hard one; but I take the Construction of the law to include the Articles you mention; and there is no authority in any of the Executive Officers to dispense with it.
I am Sir,   with sentiments of esteem   Your obedt. Humble servt.
Benjn. Lincoln Esqr.Collector of the Customs for the ports of Boston and CharlestonMassachusets.


Title: Report on the Petition of Christopher Saddler, 19 January 1790
From: Hamilton, Alexander
To:

Treasury Department, January 19th. 1790.[Communicated on January 19, 1790]
[To the Speaker of the House of Representatives]
In obedience to the order of the House of Representatives of the eleventh Instant. referring to the Secretary of the Treasury, the petition of Christopher Sadler,
The said Secretary Most respectfully reports:
That except the letter from the Collector of the District of Boston and Charlestown accompanying the petition, there is no evidence immediately within reach, respecting the ground of the application for relief.
That though that letter is intirely satisfactory to the mind of the Secretary, that the affair is of a nature to entitle the petitioner to relief; yet he does not consider it as such a document, as, in point of precedent, would justify the interposition of the Legislature to grant it.
The Secretary will therefore take measures for a more regular authentication of the nature of the transaction, and will submit the result. To this, therefore, is the farther inducement of it’s being necessary to ascertain, whether the persons, who may be interested in the forfeiture, are disposed to relinquish their right.
The Secretary, however, begs leave to avail himself of the occasion, to represent to the House, that there are other instances which have come under his notice, in which considerable forfeitures have been incurred, manifestly through inadvertence and want of information; Circumstances which cannot fail to attend the recent promulgation of laws of such a nature, and seem to indicate the necessity, in conformity to the usual policy of Commercial Nations, of vesting somewhere a discretionary power of granting relief.
That necessity, though peculiarly great in the early stages of new regulations, does not cease to operate throughout the progress of them. There occasionally occur incidents, from which heavy and ruinous forfeitures ensue, that require the constant existence of some power capable of affording relief.
The proper investment of such a power is a matter of too much delicacy and importance to be determined otherwise, than upon mature deliberation: Yet the Secretary begs leave to submit to the consideration of the House, whether a temporary Arrangement might not be made with expedition and safety, which would avoid the inconvenience of a Legislative Decision on particular Applications.
All which is humbly submitted.
Alexander Hamilton,Secretary of the Treasury


Title: To Alexander Hamilton from Peter Anspach, 20 January 1790
From: Anspach, Peter
To: Hamilton, Alexander

New York, January 20, 1790. Transmits “several Estimates signed by Col. Timothy Pickering late Quarter Master General.”


Title: From Alexander Hamilton to Benjamin Lincoln, 20 January 1790
From: Hamilton, Alexander
To: Lincoln, Benjamin

Treasury Department Jany 20th 1790
Sir
A Petition from Christopher Sadler, with a Letter from you to Mr. Ames, has been referred to me by the House of Representatives for examination and Opinion.
The face of the thing and your Letter leave me no doubt, that the case is such an one as to require relief. Yet I could not report in favor of it on the present evidence, without making a precedent that might in other circumstances be found inconvenient.
I shall be glad therefore to have as soon as possible an official Report of the nature of the case, stating the behaviour of the Petitioner on his first arrival, and whatever circumstances there may be tending to shew that no fraud could have been intended. If these circumstances could be confirmed by affidavits it would be the more satisfactory.
It will also be necessary, that the person or persons interested in the moiety of the forfeiture should appear in the statement, and that a certificate from him or them should accompany it, expressing a willingness to relinquish the right. I presume the Officers of the Customs are the persons.
My occupations in preparing for the Legislature have caused me to delay paying attention to several of your favors; some of them will be answered by this post and the others shall be considered as soon as possible.
I remain   Sir   Your Obedt & humble servt
Alex HamiltonSecy of the Treasury
Benjamin Lincoln EsqrCollector for the Port of Boston


Title: From Alexander Hamilton to Benjamin Lincoln, 20 January 1790
From: Hamilton, Alexander
To: Lincoln, Benjamin

Treasury Department, January 20, 1790. Instructs Lincoln to reimburse John Coffin Jones “for Oil supplied the Lighthouses” in Massachusetts.


Title: To Alexander Hamilton from Benjamin Lincoln, 20 January 1790
From: Lincoln, Benjamin
To: Hamilton, Alexander

Boston, January 20, 1790. Discusses the type of boat that should be used to prevent smuggling. States that “As all drawbacks on goods … & bounties paid on articles exported too often operate as Caches on the revenue of a country the greatest barriers possible should be placed around it to prevent the practice of frauds of every kind.”