To Mathew Carey
Montpellier Decr. 12th. 1821.
I have received your letter of the 1st. inst. and am sorry that neither my memory, nor my knowledge goes far enough back to furnish the desirable answers to your questions, whether and to what amount, the balance in the trade with G. Britain was against the colonies, particularly Virginia previous to the Revolution. That the ordinary balance was unfavorable cannot be doubted, and the limit to its amount was probably determined pretty much by the limit beyond which credit would not be extended.
The general fact of an unfavorable balance might be inferred from the mode in which the trade was carried on, in the Southern states at least, and particularly Virga. G. Britain had then a monopoly both as a buyer of Colonial commodities, and as a seller of her own; and her factors in the colonies, were in the practice of giving long credits, with little discriminations among customers; the responsible part of whom were made, by high prices, to afford indemnities for defaulters. Long credits are always snares to the inconsiderate, and often to those who are not so.
It is well known accordingly, that at the commencement of the Revolution, there were heavy debts due to G.B. from some of the Colonies, if not all, and particularly from Virginia. The amount was such as to make an important Article in the Treaty of peace,1 and to occasion difficulties in carrying it into execution. These debts must have been accumulations of unfavorable balances for a series of preceding years.
The successive emissions of paper money by the Colonies2 are another indication of the general fact. These emissions were founded on petitions and pleas growing out of a scarcity of coin, to be best accounted for by its remittance to G.B. towards discharging the commercial balance in her favor. Were the immediate cause of the emissions to be sought in the interest of the authors as debtors, in providing a depreciated currency, the conclusion would not be different; the debts being for the most part due to British factors, for British merchandize consumed beyond the products of the consumers; and consequently due to G.B. beyond the ordinary means of paying for them.
I am aware that these views of the subject are too vague to be of avail to your particular researches. They will not probably suggest any general Ideas which will not of themselves occur to you. They can only be regarded therefore as a testimony of the respect of which I take occasion to repeat my assurances.
FC (DLC). In John Payne Todd’s hand, with JM’s note “Mathew Carey” at the top of the first page.
1. Article 4 of the 1783 Treaty of Paris between the United States and Great Britain provided that “creditors on either Side shall meet with no lawful Impediment to the Recovery of the full Value in Sterling Money of all bona fide Debts heretofore contracted” (Miller, Treaties description begins Hunter Miller, ed., Treaties and Other International Acts of the United States of America (8 vols.; Washington, 1930–48). description ends , 2:154).
2. “By the Colonies” interlined by JM.