November 13th.
After writing the above, my apprehension, lest I should be thought any way out of the usual course in communicating my sentiments to Congress, made me omit sending it to you with the enclosed, but the alarming intelligence, which I received but a day or two since, of the sentiments of my countrymen in different parts on the present situation of the credit of our money, the state of our finances and resources, and of the temper and disposition prevailing in consequence, has made me waive every personal consideration, and communicate this with the enclosed to Congress, and I shall count it one of the happiest occurrences of my life, if anything in my power will help to prevent that total loss of public as well as private credit, which I am sorry to find begins to be almost universally apprehended, and I fear appearances at this time are in support of such apprehensions, which though at bottom they may be ill founded, yet, if once generally prevailing, will produce consequences easily foreseen. I beg leave to refer to Colonel Duer for the substance of the intelligence I refer to, having communicated the letters I have received to him, for as they contain many things merely personal, I could not lay them at large before Congress.
S. D.
Plan for sinking fiftythree millions of dollars of the Continental Currency, and to establish a Bank of one million, and a half sterling, or $6,666,6662/3 in Europe for the use of the States of America, at the expense of forty millions of dollars in specie only, or of Bills upon Europe equivalent.
1st. Let a loan be obtained of twentyfive millions of dollars on account of the United States; the interest and necessary charges will probably amount to, and will not exceed, six per cent per annum.
2dly. Let a fund be established of two millions and a half annually, clear of all charges of collecting and remittances, out of which let the interest of the loan be paid, and the surplus unalienably appropriated as a sinking fund to discharge the principal; the annual interest of twentyfive million dollars; at six per cent will be 1,500,000 dollars, the sinking fund one million.
3dly. The calculation which follows demonstrates, that this fund of two millions and a half of dollars will, in sixteen years, pay off the principal and interest of the twentyfive millions borrowed, and leave a surplus of $673,103 in the hands of the States, which may be supposed equivalent to the charge of managing the money, and paying the loan in Europe.
4thly. A fund of two millions and a half for sixteen years amounts to forty millions, but twentyfive millions at six per cent simple interest will in that time amount to fortynine millions, supposing the interest annually paid; hence it is evident, that a sinking fund of one million operating on such a loan of twentyfive millions, will make a saving of nine millions of dollars to the States out of what will otherwise be paid on the same capital, on the plan of borrowing practised in our, and indeed in most other loan offices; or in other words would reduce the interest from six to little more than three and a half per cent, which is demonstrated in the following calculations.
5thly. Twentyfive millions of dollars may be computed in value equal to £5,625,000 sterling. Of this, let one million and a half, or £1,620,000 sterling be applied to the payment of debts contracted in Europe, contracted by the commissioners, for the discharge of which no particular mode has been stipulated and agreed upon, and for the establishing a bank or fund for other uses and benefit of the United States.
6thly. As the sum of £125,000 sterling will be equal to the public debts already contracted in Europe, except those to the Farmers-General and the house of Rodrique Hortalez & Co. there will remain, agreeable to the plan, one million and a half sterling, or $6,666,6662/3 in the Congress' Bank in Europe, and four millions sterling, or $17,777,7772/3, for the purpose of sinking the sum of fiftythree millions proposed.