[TO MR. DUMAS.]
Amsterdam, March 29, 1788.
Sir,—I have now to acknowledge the receipt of your favors of the 14th, 18th and 23d instant. I would have preferred doing it in person, but the season, and the desire of seeing what I have not yet seen, invite me to take the route of the Rhine. I shall leave this place to-morrow morning, and probably not reach Paris till the latter end of April. In the moment we were to have conferred on the subject of paying the arrears due to you, a letter of the 20th of February from the Board of Treasury was received, forbidding the application of money to any purpose, (except our current claims,) till the June interest should be actually in hand. Being by the letter tied up from giving an order in your favor, I return you the letter you had written to Mr. Jay, on the supposition that the order for your arrears was given. It has been suggested, however, that if you could receive bonds of the loan, you could make them answer your purpose, and the commissioners say this would in nowise interfere with the views of the treasury board, nor the provision for the June interest. I have, therefore, recommended to them in writing, to give you bonds to the amount of your balance, if you choose to take them, rather than to wait. I wish this may answer your purpose. I remember that in the conversation which I had the honor of having with you, on the evening I was at the Hague, you said that your enemies had endeavored to have it believed that Congress would abandon you, and withdraw your appointments. An enemy generally says and believes what he wishes, and your enemies particularly, are not those who are most in the councils of Congress, nor the best qualified to tell what Congress will do. From the evidences you have received of their approbation, and from their well-known steadiness and justice, you must be assured of a continuance of their favor, were they to continue under the present form. Nor do I see anything in the new government which threatens us with less firmness. The Senate, who will make and remove their foreign officers, must, from its constitution, be a wise and steady body. Nor would a new government begin its administration by discarding old servants; servants who have put all to the risk, and when the risk was great, to obtain that freedom and security under which themselves will be what they shall be. Upon the whole, my dear Sir, tranquillize yourself and your family upon this subject. All the evidence which exists as yet, authorizes you to do this, nor can I foresee any cause of disquiet in future. That none may arise, that yourself and family may enjoy health, happiness, and the continued approbation of those by whom you wish most to be approved, is the sincere wish of him, who has the honor to be, with sentiments of sincere esteem and attachment, your most obedient, and most humble servant.
[TO THE COMMISSIONERS OF THE TREASURY.]
Amsterdam, March 29, 1788.
Gentlemen, * * * * * * * * I cannot close my letter without some observations on the transfer of our domestic debt to foreigners. This circumstance and the failure to pay off Fiseaux' loan, were the sole causes of the stagnation of our late loan. For otherwise, our credit would have stood on more hopeful grounds than heretofore. There was a condition in the last loan, that the lenders furnished one-third of the money, the remaining two-thirds of the bonds should remain eighteen months unsold, and at their option to take or not, and that in the meantime the same bankers should open no other loan for us. These same lenders became purchasers of our domestic debt, and they were disposed to avail themselves of the power they had thus acquired over us as to our foreign demands, to make us pay the domestic one. Should the present necessities have obliged you to comply with their proposition for the present year, I should be of opinion it ought to be the last instance. If the transfer of these debts to Europe, meet with any encouragement from us, we can no more borrow money here, let our necessities be what they will. For who will give ninety-six per cent. for the foreign obligations of the same nation, whose domestic ones can be bought at the same market for fifty-five per cent.; the former, too, bearing an interest of only five per cent., while the latter yields six. If any discouragements can be honestly thrown on this transfer, it would seem advisable, in order to keep the domestic debt at home. It would be a very effectual one, if, instead of the title existing in our treasury books alone, it was made to exist in loose papers, as our loan office debts do. The European holder would then be obliged to risk the title paper of his capital, as well as his interest, in the hands of his agents in America, whenever the interest was to be demanded; whereas, at present, he trusts him with the interest only. This single circumstance would put a total stop to all future sales of domestic debt at this market. Whether this, or any other obstruction, can or should be thrown in the way of these operations, is not for me to decide; but I have thought the subject worthy your consideration.
I have the honor to be, with sentiments of the most perfect esteem and respect, Gentlemen, your most obedient, and most humble servant.