TO COLONEL HAMILTON.
Philadelphia, March 27, 1793.
Sir,—In compliance with the desire you expressed, I shall endeavor to give you the view I had of the destination of the loan of three millions of florins, obtained by our bankers in Amsterdam, previous to the acts of the 4th and 12th of August, 1790, when it was proposed to adopt it under those acts. I am encouraged to do this by the degree of certainty with which I can do it, happening to possess an official paper wherein I had committed to writing some thoughts on the subject, at the time, that is to say, on the 26th of August, 1790. The general plan presented to view, according to my comprehension of it, in your report and draught of instructions, was, 1, to borrow, on proper terms, such a sum of money as might answer all demands for principal and interest of the foreign debt due to the end of 1791; 2, to consider two of the three millions of florins already borrowed as if borrowed under the act of August 4, and so far an execution of the operation before mentioned; 3, to consider the third million of florins so borrowed as if borrowed under the act of the 12th of August, and so far an execution of the powers given to the President to borrow two millions of dollars for the purchase of the public debt. I remember that the million of dollars surplus of the domestic revenues, appropriated to the purchase of the public debt, appeared to me sufficient for that purpose here, for probably a considerable time. I thought, therefore, if any part of the three millions of florins were to be placed under the act of the 12th of August, that it should rather be employed in purchasing our foreign paper at the market of Amsterdam. I had myself observed the different degrees of estimation in which the paper of different countries was held at that market, and wishing that our credit there might always be of the first order, I thought a moderate sum kept in readiness there to buy up any of our foreign paper, whenever it should be offered below par, would keep it constantly to that mark, and thereby establish for us a sound credit, where, of all places in the world, it would be most important to have it.
The subject, however, not being with my department, and therefore having no occasion afterwards to pay attention to it, it went out of my mind altogether, till the late inquiries brought it forward again. On reading the President's instructions of August 28, 1790 (two days later than the paper before mentioned), as printed in your report of February 13, 1793, in the form in which they were ultimately given to you, I observed that he had therein neither confirmed your sentiment of employing a part of the money here, nor mine of doing it there, in purchases of the public debt: but had directed the application of the whole to the foreign debt; and I inferred that he had done this on full and just deliberation, well knowing he would have time enough to weigh the merits of the two opinions, before the million of dollars would be examined here, or the loans for the foreign debt would overrun their legal measure there. In this inference, however, I might be mistaken; but I cannot be in the fact that these instructions gave a sanction to neither opinion.
I have thus, Sir, stated to you the view I had of this subject in 1790, and I have done it because you desired it. I did not take it up then as a volunteer, nor should now have taken the trouble of recurring to it, but at your request, as it is one in which I am not particularly concerned, which I never had either the time or inclination to investigate, and on which my opinion is of no importance.
I have the honor to be, with respect, Sir, your most obedient humble servant.