I had intended to have written a word to your Excellency on the subject of the new constitution, but I have already spun out my letter to an immoderate length. I will just observe, therefore, that according to my ideas, there is a great deal of good in it. There are two things, however, which I dislike strongly, 1. The want of a declaration of rights. I am in hopes the opposition in Virginia will remedy this, and produce such a declaration. 2. The perpetual re-eligibility of the President. This, I fear, will make that an office for life, first, and then hereditary. I was much an enemy to monarchies before I came to Europe. I am ten thousand times more so, since I have seen what they are. There is scarcely an evil known in these countries, which may not be traced to their king, as its source, nor a good, which is not derived from the small fibres of republicanism existing among them. I can further say, with safety, there is not a crowned head in Europe, whose talents or merits would entitle him to be elected a vestryman by the people of any parish in America. However, I shall hope, that before there is danger of this change taking place in the office of President, the good sense and free spirit of our countrymen will make the changes necessary to prevent it. Under this hope, I look forward to the general adoption of the new constitution with anxiety, as necessary for us under our present circumstances. I have so much trespassed on your patience already, by the length of this letter, that I will add nothing further, than those assurances of sincere esteem and attachment, with which I have the honor to be, your Excellency’s most obedient and most humble servant,
Th: Jefferson.
LETTER CXXXIII.—TO JAMES MADISON, May 3,1788
TO JAMES MADISON.
Paris, May 3,1788.
Dear Sir,
Mine of February the 6th acknowledged the receipt of yours of December the 9th and 20th; since that, those of February the 19th and 20th have come to hand. The present will be delivered you by Mr. Warville, whom you will find truly estimable, and a great enthusiast for liberty. His writings will have shown you this.
For public news, I must refer you to my letters to Mr. Jay. Those I wrote to him from Amsterdam will have informed you of my journey thither. While there, I endeavored to get, as well as I could, into the state of national credit there; for though I am an enemy to the using our credit but under absolute necessity, yet the possessing a good credit I consider as indispensable, in the present system of carrying on war. The existence of a nation having no credit, is always precarious. The credit of England is the best. Their paper sells at par on the exchange of Amsterdam, the moment any of it is offered, and they can command there any sum they please. The reason is, that they never borrow, without establishing taxes for the payment of the interest, and they never yet failed one day in that payment. The Emperor and Empress have good credit enough. They use it little and have been ever punctual. This country cannot borrow at all there; for though they always pay their interest within the year, yet it is often some months behind. It is difficult to assign to our credit its exact station in this scale. They consider us as the most certain nation on earth for the principal; but they see that we borrow of themselves to pay the interest, so that this is only a conversion of their interest into principal. Our paper, for this reason, sells for from four to eight per cent, below par, on the exchange, and our loans are negotiated with the Patriots only. But the whole body of money-dealers, Patriot and Stadtholderian, look forward to our new government with a great degree of partiality and interest. They are disposed to have much confidence in it, and it was the prospect of its establishment, which enabled us to set the loan of last year into motion again. They will attend steadfastly to its first money operations. If these are injudiciously begun, correction, whenever they shall be corrected, will come too late. Our borrowings will always be difficult and disadvantageous. If they begin well, our credit will immediately take the first station. Equal provision for the interest, adding to it a certain prospect for the principal, will give us a preference to all nations, the English not excepted. The first act of the new government should be some operation, whereby they may assume to themselves this station. Their European debts form a proper subject for this. Digest the whole, public and private, Dutch, French, and Spanish, into a table, showing the sum of interest due every year, and the portions of principal payable the same year. Take the most certain branch of revenue, and one which shall suffice to pay the interest, and leave such a surplus as may accomplish all the payments of the capital, as terms somewhat short of those, at which they will become due. Let the surpluses of those years, in which no reimbursement of principal falls, be applied to buy up our paper on the exchange of Amsterdam, and thus anticipate the demands of principal. In this way our paper will be kept up at par; and this alone will enable us to command in four and twenty hours, at any time, on the exchange of Amsterdam, as many millions as that capital can produce. The same act which makes this provision for the existing debts, should go on to open a loan to their whole amount; the produce of that loan to be applied, as fast as received, to the payment of such parts of the existing debts as admit of payment. The rate of interest to be as the government should privately instruct their agent, because it must depend on the effect these measures would have on the exchange. Probably it could be lowered from time to time. Honest and annual publications of the payments made, will inspire confidence, while silence would conceal nothing from those interested to know.
You will perceive by the comte rendu which I send you, that this country now calls seriously for its interest at least. The nonpayment of this, hitherto, has done our credit little injury, because the government here, saying nothing about it, the public have supposed they wished to leave us at our ease as to the payment. It is now seen that they call for it, and they will publish annually the effect of that call. A failure here, therefore, will have the same effect on our credit hereafter, as a failure at Amsterdam. I consider it, then, as of a necessity not to be dispensed with, that these calls be effectually provided for. If it shall be seen, that the general provision before hinted at cannot be in time, then it is the present government which should take on itself to borrow in Amsterdam what may be necessary. The new government should by no means be left by the old to the necessity of borrowing a stiver, before it can tax for its interest. This will be to destroy the credit of the new government in its birth. And I am of opinion, that if the present Congress will add to the loan of a million (which Mr. Adams and myself have proposed this year) what may be necessary for the French calls to the year 1790, the money can be obtained at the usual disadvantage. Though I have not at this moment received such authentic information from our bankers as I may communicate to Congress, yet I know privately from one of them (Mr. Jacob Van Staphorst, who is here), that they had on Hand a fortnight ago four hundred thousand florins, and the sale going on well. So that the June interest, which had been in so critical a predicament, was already secured. If the loan of a million on Mr. Adams’s bonds of this year be ratified by Congress, the applications of the money on hand may go on immediately, according to the statement I sent to Mr. Jay. One article in this I must beg you to press on the treasury board; that is, an immediate order for the payment of the three years’ arrearages to the French officers. They were about holding a meeting to take desperate measures on this subject, when I was called to Holland. I desired them to be quiet till my return, and since my return I have pressed a further tranquillity till July, by which time I have given them reason to hope I may have an answer from the treasury board to my letters of March. Their ill humor can be contained no longer; and as I know no reason why they may not be paid at that time, I shall have nothing to urge in our defence after that.