From Albert Gallatin
January 10th 1802
The Commissrs. of the City, without consulting any person on the subject, have offered, to the Legislature of the State of Maryland, six per cent stock in payment of the loan guaranteed by Congress, upon a presumption that that arrangement would be convenient to the U. States. As the first instalment of that loan becomes due only on the 1st Jany. 1804, there was no necessity of bringing the subject at present before Congress, & there was want of policy to state at present that the lots pledged for the loan were insufficient for that purpose. At the same time the idea of creating stock instead of paying off that small debt, if it is more eligible for the United States not to sell the lots, is altogether contradictory with our principle of paying the public debt. You will also perceive by the letter of the Comm[rs. to] the legislature of Maryland that they in [fact] charge to you the nonpayment of interest [for the?] last year on the loan. Maryland has, however, accepted their offer, & formally laid their resolution to that effect before Congress who have referred the same to the Secretary of the Treasury.
I have thought it was best to write to the Commissioners before I should make a report, and enclose the rough draft of a letter prepared for them.
It is of some importance that the manner in which the subject should be presented to Congress, should be well weighed. Will you be pleased to communicate your ideas on the letter, & on the subject generally, before I take any further steps in the business?
With respect & affection Your obedt. Servt.
RC (DLC); torn; at foot of text: “The President of the United States”; endorsed by TJ as received from the Treasury Department on 11 Jan. and “Commrs. Washington” and so recorded in SJL. Enclosure not found.
On 17 Oct. 1801, the District of Columbia commissioners addressed a memorial to the legislature of the state of maryland regarding the repayment of $250,000 in loans, which the commissioners had received from Maryland to prepare “the Federal Seat for the reception of the General Government,” using public lands in the District of Columbia as the principal collateral. As they were unable to pay the interest promptly and did not see how they would be able to repay the $50,000 loan of 1799, which would become due on 1 Nov. 1802, the commissioners proposed that the Maryland legislature extend an offer to Congress to repay the loans with U.S. stock assigned to Maryland. Want of Policy: in closing, the commissioners warned that if the law for raising the sums necessary to repay the loans was “strictly pursued, the public property must be sold at a very great loss, and the punctual payment of the principal and interest may notwithstanding be found impracticable.” Charge to you the non-payment of interest: in the memorial, the commissioners observed that the funds they had raised were insufficient to execute the works which the president “deemed essential for the accommodation of Congress” and also to pay the interest on the loans (Tr in DLC, in William Brent’s hand, including signatures of William Thornton, Alexander White, and Tristram Dalton; FC in DNA: RG 42, DCLB). For the Maryland loans, see the commissioners to TJ, 17 Aug. 1801. For criticism of the 1799 loan, see Vol. 33:508–10. TJ received a copy of a 17 Oct. memorial on 21 Oct. (Vol. 35:372n).
Accepted their Offer: on 18 Oct. 1801, the commissioners forwarded the memorial to Maryland Governor John F. Mercer, along with a 17 Oct. letter to John Johnson, a state senator who had dealt with the commissioners (FCs in DNA: RG 42, DCLB). The Maryland Senate read the memorial on 6 Nov. and referred it to a committee, headed by Johnson, to consider “whether it would not be adviseable to offer to congress a release of the public property pledged, and other securities given for the payment of the sums loaned to the said commissioners, on congress assigning to the state United States stock, equivalent in value to the stock transferred by the state to the commissioners.” The committee reported on 3 Dec. and six days later the Senate passed resolutions that called for the transfer of $250,000 in U.S. stock, bearing an interest of six percent, on or before 4 Mch. 1802, along with the payment of all interest due, after which Maryland would release claims to “any property in virtue of the loans.” The House of Delegates concurred and on 31 Dec., the governor was directed to send the Maryland congressmen copies of the resolutions and the memorial of the commissioners, along with instructions to seek implementation of the resolutions (Votes and Proceedings of the House of Delegates of the State of Maryland, November Session, One Thousand Eight Hundred and One [Annapolis, 1802], 68; Votes and Proceedings of the Senate of the State of Maryland, November Session, One Thousand Eight Hundred and One [Annapolis, 1802], 5, 22, 28, 54; see Shaw-Shoemaker description begins Ralph R. Shaw and Richard H. Shoemaker, comps., American Bibliography: A Preliminary Checklist for 1801–1819, New York, 1958–63, 22 vols. description ends , Nos. 2602–3, respectively).
On 7 Jan. 1802, Maryland congressman Joseph H. Nicholson presented to the House of Representatives the governor’s letter, the 17 Oct. memorial of the District of Columbia commissioners, and the resolutions of the Maryland legislature “agreeing to the proposition of the Commissioners.” On the same day, the House referred the documents to Gallatin “with instruction to examine the same, and report his opinion” to the House (JHR description begins Journal of the House of Representatives of the United States, Washington, D.C., 1826, 9 vols. description ends , 4:35; 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. description ends , 11:406).