Notes on Alexander Hamilton’s Report on Foreign Loans, [ca. 20 February 1793]

Notes on Alexander Hamilton's Report on Foreign Loans

Extracts from Colo. Hamilton's letters to Mr. Short,
laid before the H. of Representatives. Feb. 1793.

A.H.’s letter to W.S. Nov. 26. 92. in the observations on it1 to justify his idea of a suspension of payment for 6. months, a year, or much longer he says the Executive here had considered and admitted the propriety of a suspension of payments.
  The opinion given in the first week of Nov. to the Presidt. by those whom he consulted was unanimously that after the dethronement of the king the government was become incomplete and incompetent to give a valid discharge for any payment, that therefore payments should be suspended till there was some legitimate body authorized to receive and discharge. Three out of four were of opinion the National convention, about to meet, would be such a body, but as we did not know whether it’s meeting might not be prevented by the D. of Brunswick then marching directly on Paris, it was thought safest to suspend payment till further orders. Before such orders could be renewed, it was found there was no money left for them to operate on. They now await for money.

do. Aug. 29. 90. he confirms the loan made by our bankers without previous authority. (It2 was for 3. Milln. flor.) He destines 1½ Milln. of it to French debt. Why was not the whole so destined? What other foreign purposes could be adequate to such a defalcation?
do. 91. May. 9. directions to Treasurer to draw 800,000
24. to reserve in the hands of bankers 1½ milln. of the next succeeding loan, and one million of the one immediately succeeding that for completing the purposes of the act for borrowing 12. Milln.
Nov. 1. has directed Treasurer to draw for 1. Milln. flor. and at the close of this month shall direct him to draw for another milln.
 
30. the prices of the public debt here rendering it questionable whether to purchase with monies borrowed @ 5. per Ct. and there being reasons of the moment against beginning the redemption of the 6. per Cts. I shall forbear drawing for the 2d. milln. mentioned in my letter of 1st. inst. Payments for interest on Dutch loans for 92. to be out of monies borrowed abroad, which will leave in the Treasy. the sums which ought to be remitted for interest as part of the 2. Mills. authorised to be borrowed by the act for the redemption of the public debt.
1792. Apr. 2. the Treasurer will draw for 500,000ƒ—I consider it as for the interest of the U.S. to prosecute purchases of the public debt with monies borrowed on the terms of the last loan, and mean as fast as it can be done with safety to draw for a further sum of 2½ millns. florins to complete the 3 millns. intended by my last mentioned letter
July 25. has drawn for 500,000ƒ and shall draw for 500,000ƒ
  by my letter of June 4. last your agency in the whole of the pecuniary business to continue and Mr. Morris as representative of the U.S. at France instructed to cooperate. I understand the Secy. of state that this instruction has been forwarded.
Sep. 13. Mr. Morris authorised to pay interest to foreign officers and to draw 105,000ƒ for that
Dec. 31. has drawn for 1,237,500ƒ and 24,750ƒ
1790. Aug. 8. the Presidents instructions to A.H. committing to him the charge of borrowing under the two acts for 12. Mills. and 2 Millns.
  to employ W.S. except where otherwise specially directed.
  to borrow (within the limitations prescribed by law as to time of repayment and rate of interest) so much as necessary to pay instalments and interest of foreign debt becoming due before end of 1791. to apply the money to that with all convenient dispatch.
  not to extend the loan beyond that amount unless it can be done on terms more advantageous to U.S. than those on which residue of said debt shall stand or be.
  but if residue can be paid off on terms of advantage you are to borrow and apply accordingly.
  empowers him to make the necessary contracts.
  if any negociation with any prince or state to whom any part of the debt is due be requisite he shall carry it on thro’ the Minister &c of the U.S. with that prince or state ‘for which purpose I shall direct the Secy. of state, with whom you are on this behalf to consult and concert, to co-operate with you.’

MS (DLC: TJ Papers, 82: 14225); entirely in TJ's hand; undated.

  1. TJ here canceled “he says to support.”
  2. Before this word TJ canceled “I think.”