Thomas Jefferson, the Apostle of Americanism

by Gilbert Chinard

With the particulars of the different loans obtained by Jefferson while he was in France, and with the transactions that took place in Holland, we cannot deal here. It would be a study well worth undertaking separately, and one for which there is abundant material not yet utilized in the Jefferson papers, particularly in his correspondence with Dumas, the agent at the Hague. We shall restrict ourselves, however, to the political aspect of the debt settlement during Jefferson's mission.

The French were at first very polite about it; without insisting in any way on the question of payment, Vergennes simply asked Jefferson whether "the condition of American finances was improving." The French minister did not even mention the possibilities of the United States paying the arrears of the interest; but Jefferson suffered and irked, thinking that he was probably expected to mention it first, while he could not do so without instructions and there were "no visible means to pay anything for the present."[135]

Curiously enough, the matter came to a head with England during the trip made by Jefferson in the spring of 1786. He held several conferences with the British merchants and tried to obtain with them a sort of compromise by which American merchants would repay in full the capital of debts contracted before and after the war, but withdrawing payment of the interest for the period of the war. It was then that Jefferson put forth the principle he was to maintain persistently with the French,—namely that the matter of commerce and the question of the debts could not be separated, "were it only as a means of enabling our country to pay its debts."[136]

The chief fault of Jefferson's solution, however, was that there was very little America could sell to England, while the Americans themselves were eagerly buying goods manufactured in England. There was great danger of seeing that economic vassalage perpetuated, for "instead of a proper equilibrium, everything at present lies all in the British scale."[137] Importations being permitted, fashion and folly requiring English products, the country was sinking deeper and deeper into poverty, and all the news on the matter received by Jefferson "filled him with despair."

However, something had to be done at once in the case of the French debt, as Jefferson knew that the French Minister of Finance was "at his wit's end to raise supplies for the ensuing year."[138] It does not appear that the French Court had made any representation on the debt to the American Plenipotentiary, but Jefferson fully realized that he was placed in a position of inferiority as long as the vexing question remained unsettled and payments on the interest were overdue. This was the more deplorable, as France was the only European nation with which the United States could hope to develop really satisfactory relations. It was at this juncture that a very interesting proposition was made through Dumas by the Dutch bankers. The French debt's most objectionable feature was that it placed the American Government under direct obligation to the French; in other words, as we would say now, it was a political debt, but means might be found to change it into a purely commercial debt. If a company of bankers were formed to pay off France at once, the American Government would be able to treat with them on a business basis, the greatest advantage being that in case of delayed payments, no political pressure could be exerted or political advantage claimed.

The only objection to such a combination was that it could not be made without the consent of both the French and American governments, and negotiations to that effect would necessarily take a long time. To provide for the most pressing needs, Jefferson proposed to raise directly in Holland the four and twenty millions due to France as accrued interest. This would make a beginning and create a precedent. In the meantime Adams was urged to go to Holland to acquaint himself with the situation, so as to be able to present a definite solution to Congress on his return to America.[139] The French court remained very considerate and did not make any formal representations; but very harsh criticism of the failure of America to meet her obligations were heard during the Assemblée des Notables. The funds were so low that the American Government could not even pay its debts to the French officers who, because of their influence with the Court, should have received special consideration. Yet Congress did not seem to realize how pressing the matter was, and Jefferson could only repeat with real despair and disgust: "Would to heaven they would authorize you to take measures for transferring the debt of this country to Holland before you leave Europe."[140]

On their side, the French Court did their best to reassure the French creditors, and when the written report of the Assemblées des Notables appeared it had been considerably toned down, simply stating that:

... the interest of the claims of His Majesty on the United States of America, cannot be drawn out for the present, except as a document. The recovery of these claims, as well as principal as perhaps even interest, although they appear to rest on the most solid security, may, nevertheless, be long delayed, and should not consequently, be taken into account in estimating the annual revenue.

But even that mention seemed to Jefferson a reflection on the national honor of his country. He was harassed by French claimants; Beaumarchais had just placed in his hands a memorial to Congress; French officers were writing to him and calling on him, threatening to sell their claims to a single creditor, or to ask the court to intervene in their favor. But all the unfortunate American minister could answer was that Congress "would do in that business, what justice would require, and their means enable them."[141]

At the end of the same year he learned that Congress had rejected the proposition of the Dutch bankers, and he could not help expressing deep disappointment. One hope was left however: the sale of western lands then going on which would provide Congress with important liquid assets.