From Gouverneur Morris1
London 6 April 1792
A friend ask’d me some Days ago to calculate for him the true Value of our public funds. I did so and you will find in answer to the Queries No: 1. 2. & 3 the result of my first Enquiries. But my Mind being once in this Train I determined on greater Accuracy at the Expence of a little more Attention, and the Questions I propounded to myself with the Answers are contained in the enclosed Paper under the Heads 4. 5. & 6. Lastly as I had assumed for one Basis the Interest of 4 p % which we pay in Europe, and as a Commission is allowed on the Negotiation, I thought it well to enquire what additional Interest accrued from that Circumstance. This appears in the Question No. 7. You will observe that I communicated only the Answers to the three first Questions.
About the same Time a Newspaper was put into my Hand containing your Report of the 23d of last January,2 and that led me to consider in what Way Money could be most advantageously employed in Diminution of the public Debt, and after sundry Estimates one Operation appear’d to me so advantageous that I thought it worth while to trouble you with this Letter and with the Calculations above referred to. I beleive that on Examination you will find them to be exact. And altho the Answer to Question 5 may seem to be exhorbitant yet the Result would in fact be still greater if the Party receiving his Annuity of two per Quarter should apply it in discounting Notes which have three Months to run at the low Rate of 1 p%: a fortiori at 1 ½ the legal Rate now going in America. I need not remark to you on the Difference between Discount and Interest which in the Case put is that between 1/99 & 1/100 or 1 in 9.900.
I ought to apologize for writing this Letter but I will not because if it does not carry its’ own Excuse none which I can make will be worth a farthing. farewell
I am truly yours
Alexander Hamilton Esqr
ALS, Hamilton Papers, Library of Congress; LC, Gouverneur Morris Papers, Library of Congress.
1. Morris, who had been appointed United States Minister Plenipotentiary to France in January, 1792, did not arrive in Paris until May 6, 1792.