Dissenting Opinion on the Sinking Fund
[12 Apr. 1792?]
The Secretary of State continuing to dissent from any estimate of [the par of the sixes at more than 20/ the pound, of] the true value of the three percents1 at more than 10/ the pound2 [and of that of the deferred sixes at such a sum as at a compound interest of 6 per cent would produce 20/ at the term of paiment].
MS (DLC: TJ Papers, 72:12592); written entirely in TJ’s hand on a small scrap; undated; brackets in original. Presumably the second document recorded in SJPL under 31 Mch. 1792 below the entry listed in note to Alexander Hamilton to TJ, 20 Mch. : “Th:J. note respecting same subject.—our debt trebled by Hamilton.” For the third document, see the undated Note on the National Debt in Vol. 24: 810.
TJ drafted this dissent in his capacity as a Commissioner of the Sinking Fund to express opposition to Alexander Hamilton’s policy during the Panic of 1792 of purchasing government securities at par, rather than at their lower market value, in order to preserve public credit, a policy the Virginian evidently regarded as a prop to speculators. Although TJ and one of the other three Commissioners then in Philadelphia had questioned the legality of this policy from the time they first considered it on about 21 Mch. 1792, this impasse was broken by Chief Justice John Jay, an absentee member who advised his colleagues in a 31 Mch. opinion that the policy was legal. Despite TJ’s later entry in SJPL, the resolution from which the Secretary of State dissented was probably the one adopted by the Commissioners at a meeting on 12 Apr. 1792, which authorized Hamilton to extend his current purchases of the debt in the three classes of stock by up to a total of $200,000 according to principles they had approved on 15 Aug. 1791. Consistent with TJ’s opinion, the minutes of the 12 Apr. 1792 meeting record that the Secretary of State dissented from the resolution as it related to the purchase of 3 percent and deferred 6 percent stock. As TJ’s opinion suggests, he had previously dissented entirely from a resolution of 4 Apr. 1792 approving Hamilton’s purchase of those classes of securities “upon a computation of interest at the rate of five per centum,” though he had joined in a resolution adopted on 26 Mch. 1792 authorizing the Secretary of the Treasury to begin purchases of $100,000 in funded 6 percent stock at the par value of 20 shillings in the pound. In May 1792, inspired in part by James Madison, Congress specified that henceforth the Commissioners were to purchase the debt at the lowest possible price (ASP description begins American State Papers: Documents, Legislative and Executive, of the Congress of the United States, Washington, D.C., Gales & Seaton, 1832–61, 38 vols. description ends , Finance, i, 235–7; Syrett, Hamilton description begins Harold C. Syrett and others, eds., The Papers of Alexander Hamilton, New York, 1961–87, 27 vols. description ends , xi, 158–61, 172–3, 434; Annals description begins Annals of the Congress of the United States: The Debates and Proceedings in the Congress of the United States … Compiled from Authentic Materials, Washington, D.C., Gales & Seaton, 1834–56, 42 vols. All editions are undependable and pagination varies from one printing to another. The first two volumes of the set cited here have “Compiled … by Joseph Gales, Senior” on the title page and bear the caption “Gales & Seatons History” on verso and “of Debates in Congress” on recto pages. The remaining volumes bear the caption “History of Congress” on both recto and verso pages. Those using the first two volumes with the latter caption will need to employ the date of the debate or the indexes of debates and speakers. description ends , iii, 1383; Peterson, Jefferson description begins Merrill D. Peterson, Thomas Jefferson and the New Nation, New York, 1970 description ends , 462–3; Forrest McDonald, Alexander Hamilton: A Biography [New York, 1979], 170–1, 248–50; Hamilton to TJ 20 Mch. 1792, and note).
1. MS: “threes percents,” the second word being interlined.
2. Preceding two words interlined.