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The Writings of Thomas Jefferson, Vol. 2 (of 9)

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.

TO MR. SHORT

Amsterdam, March 29, 1788.

Dear Sir,—I have received from you three letters of March the 9th, 14th, and 17th, and written you two of the 10th and 13th. In the last, I mentioned to you that I should leave this place the 13th, but I have been drawn on from day to day by the hope of seeing the business on which I came settled, on the basis of positive engagement, and the great object of the month of June appeared so sure, that we were about proceeding to immediate payment of Mr. Grand, the State of Virginia, and all smaller claims, when a letter of the 20th February, from the Commissioners of the Treasury, arrived, forbidding the application of money to any object except the diplomatic expenses, till the cash for the June interest was actually in hand. No room was left for the bankers to execute their discretion. The consequence is a delay of all other objects for some weeks, which probably might have been effected instantly, without danger to the great one. Indeed, I had obtained a positive engagement on that ground. Be so good as to communicate this much to Mr. Grand.

A letter from Mr. Van Berkel, at New York, confirms the arrival of the Count de Moustier there on the 18th of January, and removes all suspense and anxiety on that subject. You know we received a similar account the day before I left Paris, which I communicated to M. de Montmorin. It is with infinite affliction that I recollect, in the hurry of my departure, to have omitted to have notified the same to M. Dupont, who had a son embarked in the same bottom. I am haunted with this recollection, and would beg either yourself or Mr. Grand, whichever sees M. Dupont first, to let him know that it was neither want of attention nor attachment to him which occasioned it to escape me, but the confusion which attended the setting out on such a journey on so short notice.

I set out to-morrow for Utrecht, Nimeguen, &c., and shall pursue the course of the Rhine as far as the roads will permit me, not exceeding Strasburg. Whenever they become impassable, or too difficult, if they do become so, I shall turn off to Paris. So also if anything of importance should call for me at Paris sooner, you will be so good as to address to me at Frankfort and Strasburg. I will call at the post office there, and be happy to find news from you relative to yourself, my daughters, and America. I shall be at Frankfort about the 8th of April, and at Strasburg about the 15th. You shall hear from me on the road. * * * * * * *

TO GENERAL WASHINGTON

Paris, May 2, 1788.

Dear Sir,—I am honored with your Excellency's letter by the last packet, and thank you for the information it contains on the communication between the Cayahoga and Big Beaver. I have ever considered the opening a canal between those two water courses as the most important work in that line which the State of Virginia could undertake. It will infallibly turn through the Potomac all the commerce of Lake Erie, and the country west of that, except what may pass down the Mississippi; and it is important that it be soon done, lest that commerce should, in the meantime, get established in another channel. Having, in the spring of the last year, taken a journey through the southern parts of France, and particularly examined the canal of Languedoc, through its whole course, I take the liberty of sending you the notes I made on the spot, as you may find in them something, perhaps, which may be turned to account, some time or other, in the prosecution of the Potomac canal. Being merely a copy from my travelling notes, they are undigested and imperfect, but may still perhaps give hints capable of improvement in your mind.

The affairs of Europe are in such a state still, that it is impossible to say what form they will take ultimately. France and Prussia, viewing the Emperor as their most dangerous and common enemy, had heretofore seen their common safety as depending on a strict connection with one another. This had naturally inclined the Emperor to the scale of England, and the Empress also, as having views in common with the Emperor, against the Turks. But these two powers would, at any time, have gladly quitted England, to coalesce with France, as being the power which they met everywhere, opposed as a barrier to all their schemes of aggrandisement. When, therefore, the present King of Prussia took the eccentric measure of bidding defiance to France, by placing his brother in law on the throne of Holland, the two empires immediately seized the occasion of soliciting an alliance with France. The motives for this appeared so plausible, that it was believed the latter would have entered into this alliance, and that thus, the whole political system of Europe would have taken a new form. What has prevented this court from coming into it, we know not. The unmeasurable ambition of the Emperor, and his total want of moral principle and honor, are suspected. A great share of Turkey, the recovery of Silesia, the consolidation of his dominions by the Bavarian exchange, the liberties of the Germanic body, all occupy his mind together, and his head is not well enough organized, to pursue so much only of all this as is practicable. Still, it was thought that France might safely have coalesced with these powers, because Russia and herself holding close together, as their interests would naturally dictate, the Emperor could never stir but with their permission. France seems, however, to have taken the worst of all parties, that is, none at all. She folds her arms, lets the two empires go to work to cut up Turkey as they can, and holds Prussia aloof, neither as a friend nor foe. This is withdrawing her opposition from the two empires, without the benefit of any condition whatever. In the meantime, England has clearly overreached herself. She excited the war between the Russians and Turks, in hopes that France, still supporting the Turks, would be embarrassed with the two empires. She did not foresee the event which has taken place, of France abandoning the Turks, and that which may take place, of her union with the two empires. She allied herself with Holland, but cannot obtain the alliance of Prussia. This latter power would be very glad to close again the breach with France, and, therefore, while there remains an opening for this, holds off from England, whose fleets could not enter into Silesia, to protect that from the Emperor. Thus, you see, that the old system is unhinged, and no new one hung in its place. Probabilities are rather in favor of a connection between the two empires, France and Spain. Several symptoms show themselves, of friendly dispositions between Russia and France, unfriendly ones between Russia and England, and such as are barely short of hostility between England and France. But into real hostilities, this country would with difficulty be drawn. Her finances are too deranged, her internal union too much dissolved, to hazard a war. The nation is pressing on fast to a fixed constitution. Such a revolution in the public opinion has taken place, that the crown already feels its powers bounded, and is obliged, by its measures, to acknowledge limits. A States General will be called at some epoch not distant; they will probably establish a civil list, and leave the government to temporary provisions of money, so as to render frequent assemblies of the national representative necessary. How that representative will be organized is yet uncertain. Among a thousand projects, the best seems to me, that of dividing them into two Houses, of Commons and Nobles; the Commons to be chosen by the Provincial Assemblies, who are chosen themselves by the people, and the Nobles by the body of Noblesse, as in Scotland. But there is no reason to conjecture that this is the particular scheme which will be preferred.

The war between the Russians and Turks, has made an opening for our Commodore Paul Jones. The Empress has invited him into her service. She insures to him the rank of rear admiral; will give him a separate command, and, it is understood, that he is never to be commanded. I think she means to oppose him to the Captain Pacha, on the Black Sea. He is by this time, probably, at St. Petersburg. The circumstances did not permit his awaiting the permission of Congress, because the season was close at hand for opening the campaign. But he has made it a condition, that he shall be free at all times to return to the orders of Congress, whenever they shall please to call for him; and also, that he shall not in any case be expected to bear arms against France. I believe Congress had it in contemplation, to give him the grade of admiral, from the date of his taking the Serapis. Such a measure now would greatly gratify him, second the efforts of fortune in his favor, and better the opportunities of improving him for our service, whenever the moment shall come in which we may want him.

The danger of our incurring something like a bankruptcy in Holland, which might have been long, and even fatally felt in a moment of crisis, induced me to take advantage of Mr. Adams' journey to take leave at the Hague to meet him there, get him to go on to Amsterdam, and try to avert the impending danger. The moment of paying a great sum of annual interest was approaching. There was no money on hand; the board of treasury had notified that they could not remit any; and the progress of the loan which had been opened there, had absolutely stopped. Our bankers there gave me notice of all this; and that a single day's failure in the payment of interest would have the most fatal effect on our credit. I am happy to inform you we were able to set the loan a going again, and that the evil is at least postponed. Indeed, I am tolerably satisfied, that if the measures we proposed are ratified by Congress, all European calls for money (except the French debt) are secure enough, till the end of the year 1790; by which time, we calculated that the new government might be able to get money into their treasury. Much conversation with the bankers, brokers and money holders, gave me insight into the state of national credit there, which I had never before been able satisfactorily to get. The English credit is the first, because they never open a loan, without laying and appropriating taxes for the payment of the interest, and there has never been an instance of their failing one day, in that payment. The Emperor and Empress have good credit, because they use it little, and have hitherto been very punctual. This country is among the lowest, in point of credit. Ours stands in hope only. They consider us as the surest nation on earth for the repayment of the capital; but as the punctual payment of interest is of absolute necessity in their arrangements, we cannot borrow but with difficulty and disadvantage. The monied men, however, look towards our new government with a great degree of partiality, and even anxiety. If they see that set out on the English plan, the first degree of credit will be transferred to us. A favorable occasion will arise to our new government of asserting this ground to themselves. The transfer of the French debt, public and private, to Amsterdam, is certainly desirable. An act of the new government, therefore, for opening a loan in Holland for the purpose, laying taxes at the same time, for paying annually the interest and a part of the principal, will answer the two valuable purposes, of ascertaining the degree of our credit, and of removing those causes of bickering and irritation, which should never be permitted to subsist with a nation, with which it is so much our interest to be on cordial terms as with France. A very small portion of this debt, I mean that part due to the French officers, has done us an injury, of which, those in office in America, cannot have an idea. The interest is unpaid for the last three years; and these creditors, highly connected, and at the same time needy, have felt and communicated hard thoughts of us. Borrowing, as we have done, three hundred thousand florins a year, to pay our interest in Holland, it would have been worth while to have added twenty thousand more to suppress those clamors. I am anxious about everything which may affect our credit. My wish would be, to possess it in the highest degree, but to use it little. Were we without credit, we might be crushed by a nation of much inferior resources, but possessing higher credit. The present system of war renders it necessary to make exertions far beyond the annual resources of the State, and to consume in one year the efforts of many. And this system we cannot change. It remains then, that we cultivate our credit with the utmost attention.

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 of 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.

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 to 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, at terms somewhat short of those at which they will become due. Let the surplusses 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 compte rendu which I send you, that this country now calls seriously for its interest at least. The non-payment 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' 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.

* * * * * * * * *

You remember the report, drawn by Governor Randolph, on the navigation of the Mississippi. When I came to Europe, Mr. Thompson was so kind as to have me a copy of it made out. I lent it to Dr. Franklin, and he mislaid it, so that it could never be found. Could you make interest with him to have me another copy made, and send it to me? By Mr. Warville I send your pedometer. To the loop at the bottom of it, you must sew a tape, and at the other end of the tape, a small hook, (such as we use under the name of hooks and eyes) cut a little hole in the bottom of your left watch pocket, pass the hook and tape through it, and down between the breeches and drawers, and fix the hook on the edge of your knee band, an inch from the knee buckle; then hook the instrument itself by its swivel hook, on the upper edge of the watch pocket. Your tape being well adjusted in length, your double steps will be exactly counted by the instrument, the shortest hand pointing out the thousands, the flat hand the hundreds, and the long hand the tens and units. Never turn the hands backward; indeed, it is best not to set them to any given place, but to note the number they stand at when you begin to walk. The adjusting the tape to its exact length is a critical business, and will cost you many trials. But once done, it is done for ever. The best way is, to have a small buckle fixed on the middle of the tape, by which you can take it up, and let it out at pleasure. When you choose it should cease to count, unhook it from the top of the watch pocket, and let it fall down to the bottom of the pocket.