Paris August 15. 1785.
In the conversation which I had the honor of having with your Excellency a few days ago, on the importance of placing, at this time the commerce between France and America on the best footing possible, among other objects of this commerce, that of tobacco was mentioned as susceptible of greater encouragement and advantage to the two nations. Always distrusting what I say in a language I speak so imperfectly, I will beg your permission to state in English the substance of what I had then the honour to observe, adding some more particular details for your consideration.
|I find the consumption of tobacco in France estimated at from 15. to 30. millions of pounds. The most probable estimate however places it at 24. millions. This costing 8. sous the pound,|
|delivered in a port of France amounts to||9,600,000.||livres.|
|Allow 6 sous a pound, as the average cost of the different manufactures||7,200,000.|
|The revenue which the king derives from this is something less than||30,000,000.|
|Which would make the cost of the whole||46,800,000.|
|But it is sold to the Consumers at an average of 3 the pound||72,000,000.|
|There remains then for the expences of collection||25,200,000.||livres,|
which is within a sixth as much as the king receives, and so gives nearly one half for collecting the other.1
It would be presumption in me, a stranger, to suppose my numbers perfectly accurate. I have taken them from the best and most distinterested authorities I could find. Your Excellency will know how far they are wrong: and should you find them considerably wrong, yet I am persuaded you will find, after strictly correcting them, that the collection of this branch of the revenue still absorbs too much.
My apology for making these remarks will I hope be found in my wishes to improve the commerce between the two nations, and the interest which my own country will derive from this improvement. The monopoly of the purchase of tobacco in France discourages both the French and American merchant from bringing it here, and from taking in exchange the manufactures and productions of France. It is contrary to the spirit of trade, and to the dispositions of merchants to carry a commodity to any market where but one person is allowed to buy it, and where of course that person fixes it’s price, which the seller must receive, or re-export his commodity, at the loss of his voyage hither. Experience accordingly shews that they carry it to other markets, and that they take in exchange the merchandize of the place where they deliver it. I am misinformed if France has not been furnished from a neighboring nation with considerable quantities of tobacco, since the peace, and been obliged to pay there in coin what might have been paid here in manufactures, had the French and American merchants brought the tobacco originally here. I suppose too that the purchases made by the Farmers general in America, are paid for chiefly in coin, which coin is also remitted directly hence to England, and makes an important part of the balance supposed to be in favor of that nation against this. To satisfy government on this head, should the farmers general, by themselves, or by the company to whom they may commit the procuring these tobaccoes from America, require the exportation of a proportion of merchandize in exchange for them, it is an unpromising expedient. It will only commit the exports, as well as imports, between France and America to a monopoly, which being secure against rivals in the sale of the merchandize of France, are not likely to sell at such moderate prices as may encourage it’s consumption there, and enable it to bear a competition with similar articles from other countries. I am persuaded this exportation of coin may be prevented, and that of commodities effected, by leaving both operations2 to the French and American merchants, instead of the Farmers general. They will import a sufficient quantity of tobacco, if they are allowed a perfect freedom in the sale; and they will receive in paiment wines, oils, brandies, and manufactures instead of coin, forcing each other, by their competition, to bring tobaccoes of the best quality, to give to the French manufacturer the full worth of his merchandize, and to sell to the American consumer at the lowest price they can afford, thus encouraging him to use in preference the merchandize of this country.3
It is not necessary that this exchange should be favoured by any loss of revenue to the king. I do not mean to urge any thing which shall injure either his majesty or his people. On the contrary the measure I have the honour of proposing will increase his revenue, while it places both the seller and buyer on a better footing. It is not for me to say what system of collection may be best adapted to the organisation of this government; nor whether any useful hints may be taken from the practice of that country which has heretofore been the principal entrepot for this commodity. Their system is simple and little expensive. The importer there pays the whole duty to the king: and as this would be inconvenient for him to do before he has sold his tobacco, he is permitted on arrival to deposit it in the king’s warehouse, under the locks of the king’s officer. As soon as he has sold it, he goes with the purchaser to the warehouse, the money is there divided between the king and him, to each his proportion, and the purchaser takes out the tobacco. The paiment of the king’s duty is thus ensured in ready money. What is the expence of it’s collection I cannot say, but it certainly need not exceed 6. livres a hogshead of 1000℔. That government levies a higher duty on tobacco than is levied here.4 Yet so tempting, and so valuable is the perfect liberty of sale, that the merchant carries it there, and finds his account in carrying it there.
If by a simplification of the collection of the king’s duty on tobacco, the cost of that collection can be reduced even to 5. per cent, or a million and a half, instead of 25. millions, the price to the Consumer will be reduced from 3. to 2. the pound. For thus I calculate.
|The cost, manufacture and revenue on 24. million ℔. of tobacco being (as before stated)||46,800,000.|
|5. per cent on 30. millions of livres, expences of collection||1,500,000.|
|gives what the Consumers would pay, being about 2. a pound||48,300,000.|
|But they pay at present ‥ 3 a pound||72,000,000.|
|The difference is||23,700,000.|
The price being thus reduced one third, would be brought within the reach of a new and numerous circle of the people, who cannot at present afford themselves this luxury. The consumption then would probably increase, and perhaps in the same, if not a greater, proportion with the reduction of the price, that is to say, from 24. to 36. millions of pounds: and the king continuing to receive 25. sous on the pound, as at present, would receive 45. instead of 30. millions of livres, while his subjects would pay but 2. livres for an object which has heretofore cost them 3. Or if, in event, the consumption were not to be increased, he would levy only 48. millions on his people where 72. millions are now levied, and would leave 24. millions in their pockets, either to remain there, or to be levied in some other form should the state of his revenues require it.5 He will enable his subjects also to dispose of between 9. and 10. millions worth of their produce and manufactures, instead of sending nearly that sum annually in coin to enrich a neighboring nation.
I have heard two objections made to the suppression of this monopoly. 1. That it might increase the importation of tobacco in contraband. 2. That it would lessen the ability of the Farmers general to make occasional loans of money to the public treasury. These objections will surely be better answered by those who are better acquainted than I am, with the details and circumstances of the country. With respect to the 1st. however I may observe that contraband does not increase on lessening the temptations to it. It is now encouraged by being able to sell for 60. sous what costs but 14. leaving a gain of 46. sous. When the price shall be reduced from 60. to 40. sous, the gain will be but 26., that is to say a little more than one half of what it is at present.6 It does not seem a natural consequence then that contraband should be increased by reducing it’s gain nearly one half. As to the 2d. objection, if we suppose (for elucidation and without presuming to fix) the proportion of the farm on tobacco at one eighth of the whole mass farmed, the abilities of the Farmers general to lend will be reduced one eighth, that is, they can hereafter lend only 7. millions where heretofore they have lent 8. It is to be considered then whether this eighth (or other proportion, whatever it be)7 is worth the annual sacrifice of 248 millions, or if a much smaller sacrifice to other monied men will not produce the same loans of money in the ordinary way.
While the advantages of an increase of revenue to the crown, a diminution of impost on the people, and a paiment in merchandise instead of money are conjectured as likely to result to France from a suppression of the monopoly on tobacco, we have also reason to hope some advantages on our part; and this hope alone could justify my entering into the present details.9 I do not expect this advantage will be by an augmentation of price. The other markets of Europe have too much influence on this article to admit any sensible augmentation of price to take place. But the advantage I principally expect is an increase of consumption. This will give us a vent for so much more, and of consequence find employment for so many more cultivators of the earth: and in whatever proportion it increases this production for us, in the same proportion will it procure additional vent for the merchandize of France, and emploiment for the hands which produce it. I expect too that by bringing our merchants here they would procure a number of commodities in exchange, better in kind, and cheaper in price. It is with sincerity I add, that warm feelings are indulged in my breast by the further hope that it would bind the two nations still closer in friendship, by binding them in interest. In truth no two countries are better calculated for the exchanges of commerce. France wants rice, tobacco, potash, furs, ship-timber. We want wines, brandies,10 oils and manufactures. There is an affection too between the two people which disposes them to favour one another. If they do not come together then to make the exchange in their own ports, it shews there is some substantial obstruction in the way. We have had the benefit of too many proofs of his majesty’s friendly disposition towards the United states, and know too well his affectionate care of his own subjects, to doubt his willingness to remove these obstructions, if they can be unequivocally pointed out. It is for his wisdom to decide whether the monopoly which is the subject of this letter be deservedly classed with the principal of these. It is a great comfort to me too, that in presenting this to the mind of his Majesty, your Excellency will correct my ideas where an insufficient knowlege of facts may have led me into error; and that while the interests of the king and of his people are the first object of your attention, an additional one will be presented by those dispositions towards us11 which have heretofore so often befriended our nation. We fervently invoke heaven to make the king’s life and happiness the objects of it’s peculiar care, and that he may long be relieved in the burthen of government by your wise counsels. Permit me to add the assurance of that high respect and esteem with which I have the honor to be your Excellency’s most obedient & most humble servant,
RC (Arch. Aff. Etr., Paris, Corr. Pol., E.-U., xxx); at head of text: “M. de R[ayneval] envoyé la traduction à M de Calonne le 31 aoust 1785. M. Jefferson. rep. le 31 aoust.” PrC (DLC). Dft (DLC); actually a presscopy of a first draft, but with later alterations by TJ which render this copy a second draft. Tr (DLC); in French; in an unidentified hand, without indication of addressee or signature; with one correction in TJ’s hand; enclosed in TJ to De la Boullaye, 18 July 1787, and printed by Ford, description begins Paul Leicester Ford, ed., The Writings of Thomas Jefferson, “Letterpress Edition,” N.Y., 1892–1899 description ends iv, 272–80, under 15 Aug. 1786. PrC of another Tr (DLC); in French; in William Short’s hand. Tr (MHi); an undated fragment of four pages of continuing text; in an unidentified hand, with several corrections in TJ’s hand. Tr (DNA: PCC, No. 107, i). There is also in DLC: Hamilton Papers, 14: 2142–5, an abstract of this letter prefaced with the following: “The object of Mr. Jefferson’s conversation with the Ct Vergennes on the subject of tobacco is a destruction of the Monopoly of the Farmers General… .” and concluding with the following, which was deleted: “Defeated by Calonne who fears the loss of his Office &c. &c.”; endorsed in part: “The propositions of Mr. Jefferson to abolish the Tobacco Farm.” Entry in SJPL reads: “Vergennes. Tobacco trade.” The texts of RC, PrC, the several Tr, and the second stage of Dft are identical, except for minor variations of punctuation and phrasing; the significant differences between these and the first stage of Dft, however, are noted below. TJ incorporated the text of this letter in his long report to Jay of 2 Jan. 1786, in which he gave an account of Vergennes’ response to his overtures and of the immediate events preceding Lafayette’s appeal to Calonne.
In his letter to De La Boullaye, 18 July 1787, TJ stated that he “took the materials for my calculation from the new Encyclopedie” and that he was “informed that article was written by the Abbé Baudeau, and that he was well acquainted with the subject.” However, he had also taken the precaution of obtaining Thomas Barclay’s advice and criticism of his estimates. Barclay “happened to be at Paris” at this time (TJ to Contée, 16 Aug. 1785) and TJ no doubt handed to him a copy of the letter. This copy, evidently, was the press-copy of the text here referred to as Dft, which TJ, after receiving it back from Barclay, then revised, employing some, though by no means all, of Barclay’s suggestions. Barclay’s comments (DLC: TJ Papers, 17: 3055–6) are as follows:
“The calculations are all right except that which states the price of Tobacco at 31¼ sols. It should be 31 ⅕.—The Quantity annually Used in France seems to be about Thirty thousand hogsheads five thousand of which are supposed to be of the Growth of Holland, the Palatinate and the Ukerain. Therefore the Tobacco from America may stand at Twenty five thousand hogsheads.—The Expence of Manufacturing into Rolls or snuff Cannot I think be placed at less than 3 sols pound. That of Collecting the Duty wou’d not be any thing like the sum Mentiond in the Estimate. Four livres hogshead wou’d be sufficient which on 24000 hhds. wou’d amount to no more than 96000 livres.—An Estimate formed on these principals wou’d stand thus:
|30,000,000 Pounds at 8 sols||12,000,000|
|Duty 1 livre pound||30,000,000|
|4 livres hhd. Expence of Collecting Duties||120,000|
|3 sols pound Expence of Manufacturing||4,500,000|
|which is 31 2/25 sols Pound.|
|But 30 Millions of Pounds at 50 sols pound the supposed average price amounts||75,000,000|
|From which Deduct||46,620,000|
clear annual gain to the Farmers, supposing that with the Encrease of the Consumption of Tobacco, they Pay an Encrease of the Duties which is a Very doubtfull point.—If His Majesty wou’d appoint persons to purchase Tobacco and Deliver it out again to the Farmers as they shou’d have occasions for it, it wou’d, Next to laying the Trade open as it ought to be, Certainly produce the Best Consequences. But if the Farmers hold the Monopoly and Make Contracts with Individuals, it is Easie to forsee that None of the People of Either France or America Can derive any advantage from the Commerce of the two Countries but those actually Employ’d in the Execution of the Contract.—I think the Estimate of 50 sols pound for Manufactured Tobacco low, and that the Difference between that sum and the actual produce of the Sale wou’d probably Defray the Expence of Manufacturing. But it is better to Err on the safe side and as the Soldiers and Sailors are supplied at a lower rate than the Public in general the price of 50 sols had better stand. The Copy of the letter is Inclosed.”
On this general subject of the tobacco monopoly, see F. L. Nussbaum, “The Revolutionary Vergennes and Lafayette versus the Farmers General,” Jour. Mod. Hist., iii (1931), p. 592–604, with Lafayette’s communication to De Boullongne, president of the American Committee of the farmers-general, printed as an appendix, p. 605–13; also, by the same author, “American tobacco and French politics, 1783–1789,” Pol. Sci. Qu., xl (1926), p. 479–516. See also, for an excellent account, Gottschalk, Lafayette, 1783–89, description begins Louis Gottschalk, Lafayette between the American Revolution and the French Revolution (1783–1789), Chicago, 1950 description ends p. 207–37. When Vergennes transmitted TJ’s letter to Calonne, who was far from sympathetic, he remarked: “Elle semble demander la plus serieuse attention, et en séparant la routine pouvoir operer une amelioration dans votre Commerce et dans les revenus du Roi” (31 Aug. 1785; Arch. Aff. Etr., Corr. Pol., E.-U., xxx; Tr. in DLC). Calonne replied to Vergennes in part:
“La partie de cette lettre, qui traite des moiens d’établir dans ce moment le commerce entre la france et les Etats-Unis, sur le meilleur pied possible, contient des choses bien vues, et faites pour séduire au premier examen; mais indépendamment de ce que les calculs qui servent de bases au plan de M. de Jefferson sont absolument inéxacts, il est des considérations majeures, que ce Ministre n’a pu prévoir et qui, quand il ne se rencontrerait aucune difficulté dans l’exécution de son plan, ne permettroient pas de l’adopter.—J’aurai d’abord l’honneur de vous faire observer, Monsieur, que la Consommation en tabac, que M. de Jefferson, d’après ce qui lui a été raporté, suppose s’elever annuellement à 24. millions de livres pezant, ne monte pas à beaucoup plus de 14., déduction faite des matières de rebut.—Le produit brut de la vente du Tabac, bien loin d’être porté à 72. millions, n’a pas, pendant l’année la plus favorable des Six du bail précédent, et des trois premieres du bail actuel, atteint la proportion de 49. millions.—La guerre entre L’Angleterre et l’Amérique Septentrionale, ayant fait renchérir considéablement le prix des Tabacs, les frais d’achat ont Si fort augmenté qu’ils ont absorbé une grande partie du produit de la vente du tabac; en sorte que le prix de rigueur pour cette partie n’est entré dans les calculs du bail actuel que pour 25.600.000; mais la baisse de ces prix devient de jour en jour plus sensible, et elle est telle, qu’il y a tout lieu d’espérer qu’avec l’augmentation de 4s. par Livre de tabac, imposée par l’Edit d’Aout 1781, la fixation du prix de ferme du tabac dans le nouveau bail pourra excéder cette Somme de plusieurs millions.—Une masse aussi considerable de produit ne pourrait être détachée du bail, sans en rendre les Conditions extrêmement difficiles à régler, et peut-être Même désavantageuses au Roi; et d’ailleurs si, en renonçant au privilege exclusif de la vente du tabac, on se bornait à le charger d’un droit à l’importation, ou ce droit seroit modique, et alors il serait impossible qu’il produisit une Somme Suffisante pour dédommager du Sacrifice qu’on auroit fait; ou si ce droit étoit dans une proportion telle qu’on crût pouvoir espérer de retrouver le niveau de ce que reproduit la ferme du tabac, cette esperance serait bientôt détruite par l’excès de la fraude, qu’on n’aurait plus de moyens d’arrêter.—Enfin, Monsieur, si le Roi, en suivant les mouvements de Sa Bienfaisance, pouvoit adoucir le régime des perceptions que les besoins de l’Etat le forcent à maintenir, il ne commenceroit certainement pas par celle qui porte sur le tabac, parce qu’elle est absolument volontaire et qu’il depend de Ses Sujets de S’en affranchir.—Malgré ces considérations qui, à ce que j’espère, vous démontreront qu’il n’est pas possible d’adopter aucun des plans indiqués par M. de Jefferson, je n’en sens pas moins combien il est à désirer. qu’on puisse resserrer davantage les Liaisons de Commerce entre nous et l’Amérique Septentrionale, et favoriser l’échange de nos productions avec celles de ce Peuple. Je Suis parvenu à écarter en partie les entraves que la ferme générale, au moien de Son droit de préférence sur l’achat des tabacs, peut mettre à l’importation de cette matière dans nos ports, par les Vaisseaux Américains, et j’aurai incessamment l’honneur de me concerter avec vous Sur les moiens de former un plan général de Commerce également utile aux deux Nations” (Calonne to Vergennes, Fontainebleau, 19 Oct. 1785; same, xxx). Lafayette entered the picture after his return to France, and on 16 Nov. 1785 wrote Vergennes asking for a copy of Calonne’s reply:
“Vous avés eu la bonté, Monsieur le Comte, de me dire que MM les fermiers Generaux avoient repondu à la lettre de M. jefferson; s’il nous etoit possible d’avoir cette Reponse, peut être M. jefferson qui connoit à fonds tout ce qui Regarde les tabacs, pourroit il servir à demontrer la fausseté de quelques Calculs. Ces messieurs sont si Redoutables, malgré leur desinteressement, qu’on ne sauroit assés multiplier les moiens de defense.—On nous a dit, Monsieur le Comte, que le Bail des fermes va se Renouveller. Si le Bruit est fondé, j’oserois proposer que le Renouvellement de celle du tabac, puisqu’il Reste encore du tems, fut seulement plus Retardé que les autres, afin de pouvoir Examiner les methodes proposées.—Je vous demande pardon de vous importuner, Monsieur le Comte, mais j’ai voulu vous Communiquer mes deux idées, parce que vous les accueillés avec bonté” (same).
1. This paragraph to this point in the first stage of Dft reads as follows (the figures in italics represent, however, TJ’s preliminary alterations during revision for the second stage): “I find the consumption of tobacco in France estimated at 24. millions of pounds. This costing 8. sous a pound, delivered in a port of France, amounts to 9,600,000 livres. It is afterwards either powdered, or cut, or formed into rolls. Suppose these operations, on the average, add [2.] 6 sous a pound to the price; this raising the cost of a pound to 10. 14 sous, makes the whole amount
|to||12. millions 16,800,000 of livres.|
|The king derives a revenue of a livre a pound, making||24. millions|
|and of course raising the price of the whole to||millions.|
|But it is sold to the Consumers at an average of 50 sous the ℔, making||millions of livres.|
|There remains then for the expences of collection||24. millions, exactly as much… .”|
2. The passage “To satisfy government … operations” was interlined in second stage of Dft after the following had been deleted: “I am persuaded this would be prevented by leaving the supply of tobaccoes.”
3. The words, “forcing each other … of this country,” were interlined in the second stage of Dft.
4. This and the preceding sentence in the first stage of Dft read: “… in ready money, and the expence of it’s collection probably does not exceed 5. or 6. per cent. At least we know from experience that it need not exceed that. Mr. Pitt, in the debate in parliament of the 21. of June last, observed that the duties on tobacco in that country amounted to fifteen pence sterling a pound. This is 30. sous. That government then levies 50 per cent more on every pound of tobacco than is levied here.”
5. The passage “can be reduced … require it” reads in the first stage of Dft: “can be reduced to 6. per cent, or about a million and a half instead of 24 millions, the price to the Consumer will be reduced from 50 sous to 31¼ sous the pound. For thus I calculate. First cost, in France of 24 millions of pounds of tobacco @ 8.
|sous the pound is||9,600,000|
|The king’s duty on that quantity at a livre a pound is||24,000,000||30,000,000|
|6 per cent on 24 millions of livres, expences of collection||1,440,000|
|2. 6 sous a pound for manufacturing 24. millions of pounds of tobacco||2,400,000||7,200,000|
|gives what the Consumers would pay for 24. millns. of pounds (to wit 31¼ sous pr. lb.)||37,440,000|
|But they pay under the present regulations 50 sous a pound||60,000,000|
|The difference is||22,50,000.|
The price being thus reduced nearly two fifths, would be brought within the reach of a new and numerous circle of the people who cannot at present afford themselves this luxury. The consumption then would increase in the same if not a greater proportion with the reduction of the price, that is to say to 3. instead of 24. millions. And the king, continuing to receive only the same duty of a livre on the pound would receive 38 instead of 24. millions of livres, while his subjects would pay but [31¼] sous for an object which has heretofore cost them 50 sous. Or if, in event, the consumption were not to be increased, he would levy only 25½ millions on his people where 48 millions are now levied, and would leave 22½ millions to be levied in some other form should the state of his revenues require it.”
6. This and the preceding sentence in the first stage of Dft read: “It is now encouraged by being able to sell for 50. sous what costs but 1 leaving a gain of 40. sous. When the price shall be reduced from 0. to 31¼ sous the gain will be but 21[¾], that is to say about half of what it is at present.”
7. The phrase enclosed in parentheses (in RC) was inserted in the second stage of Dft.
8. This figure in the first stage of Dft reads: “22½.”
9. The words “and this hope … present details” were inserted in the second stage of Dft.
10. This article was inserted in the French Tr in DLC: TJ Papers, 14: 2381 by TJ as “eaux de vie.”
11. Instead of the words “and that while … towards us,” Dft in its first stage reads: “and be under the influence of those dispositions which have… .”