From the Board of Treasury
June 15th 
The enclosed documents marked A. B. C. shew the state of the Domestic Debt of the United States to the 3d day of March last:1 the arrears of Principal and Interest on the Foreign Debt to the end of the present year: and the annual provision which must be made for the payment of the accruing Interest, and Installments of Principal (agreeably to the respective conventions) to the period of the final extinction of Foreign Loans.
The abstract marked D will also shew the probable amount of the paper which has been issued since the 10th of September 1782, for payment of Interest on the Domestic Debt under the denomination of Indents or Facilities, and the Balance computed in circulation: We [say] probable, because previous to the A[d]ministration of the present Board, the Indents issued under the Requisitions of the Requisitions of the 10th September 1782, and 27th of April 1784, were issued without any instructions or Checks to regulate the conduct of the Loan Officers and prevent frauds.2
We have thought it necessary to exhibit this estimate (which is the most accurate that can be formed at present) because it is not improbable that the amount of it may, at a future period, enter into the general mass of the Domestic Debt; for although the Requisitions of Congress are calculated to call out of circulation a very larg[e] proportion of what might be issued to the 31st of December 1787; still there is little or no reason to hope that the States will ever make any adequate provision for calling them in by Taxes.
Under this impression (and because the receipt of Indents in taxes without any proportion of Coin) defeated almost intirely the collection of Specie under the general Requisitions, it was strongly urged by this Board to Congress, as will appear by their report of the 28th September 1787 (Copy of which marked E is herewith transmitted) not to permit their further issue: but considerations unknown to us prevented the adoption of this measure, and of course we cannot be responsible for the resulting evils. The Capital of the Domestic Debt may likewise receive considerable augmentation from the three following Sources.
1st From the admission of unsettled claims for services and supplies furnished during the late war.
2nd From the liquidated amount of unredeemed Bills of the old Emission, and
3rd From Balances which may appear due from the United States to some of the States under the old confederacy, on the final adjustment of the Accounts of the respective States with the Union.
As to the first cause, it can only operate in case the importunate applications of Individuals should induce the Government to repeal their Act of the 23d July 1787—precluding any further admission of French Claims—various and strong efforts have been made for this purpose which the Board have hitherto successfully opposed: considering it (at the present period) as one of the most fruitful sources of fraud, which could be possibly opened.3
The second, as it has at former periods, so it may under the present Government, claim the serious attention of Congress. The probable amount of it is estimated at Seventy eight Millions, four hundred and seventy seven thousand, nine hundred and ninety five nominal Dollars.
Should it therefore be funded at the rate of 40 for one (agreeably to a motion made in Congress on the 7th January 1783) the Specie amount would be 1,961,949 Dollars. If at 75, as proposed the same day—1,046,373 do.4
The augmentation from the third source cannot possibly be judged of ’till the accounts betwixt the several States and the Union (on which we propose to treat) are finally adjusted.
Hence it results that if the outstanding Indents and the unredeemed Bills of the Old Emission were both funded (estimating the latter at 75 for one) the Capital of the Domestic Debt would be augmented betwixt Three and Four Million—and that in such case the aggregate would be at least 30,558,984 Dollars.
Whether any considerable diminution can be made from it within a short period by sales of Land in the Western Territory is rather doubtful.
Contracts for Land to an amount of about 3,200,000 Dollars have been actually executed under the administration of this Board, and the first Installments due thereon paid into the Treasury; but from the subsequent rise in the public debt, and other circumstances, we fear that the public expectations from this source will be much diminished. On this subject we shall treat more fully under the head of the Western Territory.5
It is necessary to observe that in the Schedule marked C is included the last Loan opened in Holland for One Million of Florins, on the presumption that the same will be compleated during the present year.6
Exclusive of the above there are two considerable Foreign Claims against the United States of which we shall treat under a distinct head.
The one said to be due to the Farmer’s General of France estimated at
The other exhibited by Mr Caron de Beaumarchais8 amounting on the 1st July 1783 to
It is a duty, Sir, that we owe the public to declare that in our opinion a very strict investigation ought to be made of the merits of both these Claims, before the same are in any wise formally acknowledged on the part of the Government: Certain it is (as will appear by our future communications) that no less a sum than one million of Livres of the Aids and subsidies granted by the Court of France previous to February 1778, is not included in the accounts of any Foreign Ministers or Agents concerned in the Receipt of public monies in Europe since the commencement of the late war; but whether the same is involved in either of the Claims above stated cannot, at this juncture, be properly ascertained.9
Whilst on the subject of Foreign Loans, it may not be improper to observe that one of the greatest impediments, which obviously presents itself against the practicability of discharging the sums annually accruing to the first of January 1798 are the heavy Installments of the Capital due on the French Loans. If the forms of those Loans could be so modified, as to defer the payment of all the Installments of principal for the space of Eight or Ten Years, it would be certainly a most desireable object. Since in such case the Annual Revenue might be made to square much more exactly with the annual expenditure than can be otherwise hoped for.10
From Communications which have been made to this Board (for which we beg leave to refer to the paper marked F) it is not improbable that such a negotiation through the intervention of the Dutch Capitalists or other means might be effected, in which case the annual demand for the Foreign Debt to the 1st January 1798, would on an average be diminished Four hundred and sixty two thousand, nine hundred and forty two Dollars. We have the honor to be with high Respect Yr most Obedt Humble Servants
On 8 June 1789 GW requested the secretary of state, the secretary of war, the postmaster general, and the Board of Treasury to submit informal reports on the state of their departments (see GW to John Jay, 8 June 1789). The Board of Treasury submitted what were probably the most comprehensive of the departmental reports but the other departments also responded. Henry Knox submitted a series of reports during the summer on the business of his department (see Knox to GW, 15 June, 6 July and the three reports of 7 July). Reports from Ebenezer Hazard on the Post Office Department have not been found although Hazard submitted information on his department (see GW to Hazard, 3 and 17 July 1789). No reports made during the summer by John Jay on the department of foreign affairs have been located but at least some information was evidently submitted to GW (see GW to Jay, 14 July) and there are in DLC:GW a series of undated memoranda in GW’s writing on various topics relating to foreign affairs that may have been compiled from the missing reports. For a discussion of these memoranda, similar to GW’s notes on the Board of Treasury reports, see Memoranda, 1789.
The Board of Treasury had already reported briefly on 10 and 11 June, and beginning with this report to GW, they transmitted during the summer of 1789 several other voluminous accounts of the state of the treasury, particularly with regard to the foreign and domestic debt, at the time that the new government was beginning its operation. See their reports to GW, 23 July and 14 and 21 Aug. 1789. As he did with information from other departmental reports, GW prepared a digest of the information contained in the Board of Treasury’s report in order to assimilate the complex fiscal matters discussed in the report. His notes on the five Board of Treasury reports follow the numbering on the board’s reports. Arithmetical errors have not been noted either in GW’s notes or in the reports. Since information on most of the individual items in the accounts and correspondence referred to in the text is readily available in the printed and indexed journals of the Continental Congress and in the indexed collections of the Papers of the Continental Congress at the National Archives, annotation of the reports has been kept to a minimum. The various foreign loans referred to in the reports have been briefly identified.
GW’s notes on the five reports (AD, DLC:GW) are:
1. These documents are printed as enclosures to this document.
2. For the requisition of 10 Sept. 1782, levied by the Confederation Congress to raise $ 1,200,000 for the payment of the interest on the domestic debt, see JCC description begins Worthington Chauncey Ford et al., eds. Journals of the Continental Congress, 1774-1789. 34 vols. Washington, D.C., 1904–37. description ends , 23:564–71. For the requisitions of 27 and 28 April 1784, see ibid., 26:297–314.
3. The resolution of 23 July 1787 provided that “all persons having unliquidated Claims against the United States pertaining to the late Commissary’s Quartermaster’s, hospital Cloathier’s or marine department shall exhibit particular abstracts of such claims to the proper commissioner appointed to settle the accounts of those departments within eight Months from the date hereof; And all persons having other unliquidated claims against the United States shall exhibit a particular abstract thereof to the Comptroller of the treasury of the United States within one year from the date hereof; And all accounts not exhibited as aforesaid shall be precluded from settlement or allowance” (ibid., 33–392).
4. The motion in Congress of 7 Jan. 1783, which failed to pass, provided that “individuals in each State, who are possessed of Continental paper money, be entitled to receive from the commissioner who is or shall be appointed to settle the accounts of the several states, and of individuals therein, against the United States, a specie certificate for all such sums of the said money as they shall respectively pay into the hands of such commissioner, at the rate of one silver dollar for every [ ] continental dollars; the certificates to bear interest of six per cent. from the date, and be provided for as other public debts; but that no money shall be received or certificates granted by the said commissioners after the last day of December, 1783. That the states which have not sunk the proportions assigned to them, of the Continental money, be charged with the deficiency, or the amount of what they have not sunk, at the rate aforesaid” (ibid., 24:39).
6. The Holland loan of 1788 was negotiated in Amsterdam by the firms of Jan and Wilhem Willink, Nicholas and Jacob van Staphorst, and Nicholas Hubbard, the bankers of the United States in Holland. It was for the sum of 1,000,000 guilders for ten years at 5 percent per annum. After ten years, payment was to begin at the rate of 200,000 guilders per annum, by bills of exchange, products, or specie. The contract for the 1788 loan is in DNA:PCC, item 135.
John Adams began the negotiations for the loan, and Thomas Jefferson continued them after Adams’s return to the United States. For Jefferson’s vivid description of his difficulties, see Washington, Writings of Thomas Jefferson, description begins H. A. Washington, ed. The Writings of Thomas Jefferson: Being His Autobiography, Correspondence, Reports, Messages, Addresses, and Other Writings, Official and Private. 9 vols. New York, 1853-54. description ends 1:82–84.
7. The loan to the United States from the Farmers General of France was opened in 1777, before France entered the war against Great Britain. The first foreign loan undertaken by the Continental Congress, it was negotiated in Paris by Silas Deane and signed by Deane and Franklin for the United States and by Paulze for the Farmers General on 24 Mar. 1777. The contract provided that the Farmers General would advance the United States 2,000,000 livres in return for specified shipments of tobacco. For a copy of the contract with the Farmers General, see the Board of Treasury to GW, 14 Aug. 1789, Statement C, which contains further correspondence concerning the loan.
10. For Alexander Hamilton’s implementation of this suggestion a few days after he became secretary of the treasury, see his Conversation with Comte de Moustier, 13 Sept. 1789, in Syrett, Hamilton Papers, description begins Harold C. Syrett et al., eds. The Papers of Alexander Hamilton. 27 vols. New York, 1961–87. description ends 5:366–68.
11. Next to this entry an asterisk referred GW to a note at the bottom of the page: “On the Certificates issued between the 1st September 1777 and 1st of March 1778 Interest is payable on the nominal Value.”
12. There were two French loans that carried an annual interest of 5 percent: the 18,000,000–livre loan of 1782 and the 6,000,000–livre loan of 1783. Some of the funds for the loan of 1782 probably were initially viewed by both the French government and Congress as a subsidy from the French court, although the contract of 16 July 1782 specifies repayment. By the terms of its contract, 25 Feb. 1783, the French loan of 6,000,000 livres was paid to the United States by the French Treasury at the rate of 500,000 livres per month for twelve months. Repayment of the principal was scheduled to begin in January 1785, with an annual payment of 1,000,000 livres. Much of this money remained in France to pay for supplies. The contracts for both loans are in DNA:PCC, item 135.
13. John Adams negotiated in 1782 the French loan of 10,000,000 livres or 5,000,000 guilders in Holland rather than in France. Largely because the credit of the United States stood so low on the Amsterdam bourse, Adams could not find bankers willing to advance the sums so desperately needed by the United States. Partly through the diplomatic negotiations of John Laurens in Paris, the French king agreed to pledge French credit as a guarantee to the States General of the Netherlands for the repayment of an American loan. The agreement specified that the loan would be retired at the rate of 4 percent per annum in ten equal payments, the first to begin in the sixth year after the date of the loan, and the payments to be completed in five years. The French king was to make the payments on the loan in Holland, and the payments of the United States were to go to the royal treasury in Paris. A copy of the contract is in DNA:PCC, item 135.
14. The debt owed Spain by the United States arose out of the secret loans and subsidies provided by the Spanish court in 1781. Because of Spain’s policy of not recognizing American independence, much of the fund was advanced by the Spanish court through the agency of Gardoqui & Son. In addition to a subsidy of some 375,000 livres, the sum of $150,000 was advanced to John Jay as a loan (John Jay to Samuel Huntington, 16 Sept. 1780, CSmH; “Loans and Grants from the Royal Treasury of Spain to the U. States,” DNA:PCC, item 144). After the war the Spanish crown made no attempt to collect what had been advanced as subsidies but presented a claim to the United States for $174,011 rather than $150,000 as the total sum due for the loans advanced during the Revolution. See “By Foreign Debt incurred by the late Government . . . due to the Spanish Nation on the 21st March 1782” (DNA: RG 217, Miscellaneous Treasury Accounts, account no. 6072). Until Thomas Barclay, Congress’s agent for settling accounts in Europe, completed his investigation in the mid–1780s it was not evident that the $24,000 discrepancy represented an advance that the Spanish court made to Richard Harrison, United States agent at Cadiz, to purchase clothing (DNA: RG 39, Foreign Ledgers, Public Agents in Europe, 1776–87).
15. The Holland loan of 1782 for 5,000,000 florins was negotiated by John Adams with the Dutch bankers Wilhem and Jan Willink, Nicholas and Jacob van Staphorst, and De La Lande & Fynje. The loan was to run ten years at 5 percent interest and to be redeemed by paying a fifth of the loan each year for five years. The contract is in DNA:PCC, item 135.
16. The 1784 Holland loan for 2,000,000 guilders bore an interest of 4 percent per annum. On this loan, as well as on the 1782 Holland loan, the Willinks, van Staphorsts, and De La Lande & Fynje received a 4½ percent commission. Because of the difficulty in filling this loan, not only because of the United States’ poor credit but because of an unprecedented demand for funds in Amsterdam, the 1784 loan offered to subscribers chosen by lot the inducement of an added “gratification” of 4 to 10 percent of 690,000 guilders, payable at the time of redemption. The loan was to run for seventeen years and then to be redeemable in six annual payments. A copy of the contract is in DNA:PCC, item 135.
17. The Holland loan of 1787 for 1,000,000 guilders, much of which was used to pay interest on the earlier Holland loans, was negotiated by John Adams with the Willinks and van Staphorsts. The loan was to run for ten years at 5 percent per annum, redeemable in five equal annual payments. The contract is in DNA:PCC, item 135.
22. See JCC, description begins Worthington Chauncey Ford et al., eds. Journals of the Continental Congress, 1774-1789. 34 vols. Washington, D.C., 1904–37. description ends 23:545–47, 564–71, 26:311–14.
23. See ibid., 29:765–71.
24. See ibid., 31:459–66.
25. See ibid., 33:649–58.
26. See ibid., 34:433–43.
27. See ibid., 33:569–85.
28. See ibid., 23:545–47, 564–71.
29. The resolution of 12 Oct. 1785 pointed out the necessity “for the support of the federal government, that the states should supply their quotas of Money” and urged them to complete the quotas without delay. Those states not complying should “be required to collect and pay into the public treasury, the amount of such deficiencies” either in certificates issued under the requisition of 27 Sept. 1785 or in specie (ibid., 29:823–24).
31. The requisition of 27 Sept. 1785 was forced by the immediate need of Congress for $3,000,000 to service the interest on the foreign and domestic debts and to provide for the government’s expenses. The requisition provided for the following apportionment: New Hampshire, $105,416, Massachusetts, $448,854, Rhode Island, $64,636, Connecticut, $264,182, New York, $256,486, New Jersey, $166,716, Pennsylvania, $410,378, Delaware, $44,886, Maryland, $283,034, Virginia, $512,974, North Carolina, $218,012, South Carolina, $192,366, and Georgia, $32,060 (JCC, description begins Worthington Chauncey Ford et al., eds. Journals of the Continental Congress, 1774-1789. 34 vols. Washington, D.C., 1904–37. description ends 29:765–71).
32. See ibid., 31:459–66.
36. For the requisition of 27 Sept. 1785, see note 31. For the requisition of 2 Aug. 1786, see JCC, description begins Worthington Chauncey Ford et al., eds. Journals of the Continental Congress, 1774-1789. 34 vols. Washington, D.C., 1904–37. description ends 31:459–66.
37. See below.
38. The resolution of 20 Oct. 1786 specified that 1,340 noncommissioned officers and privates be raised for a term of three years and, with the troops currently in service, be incorporated into a corps of 2,040 noncommissioned officers and privates (ibid., 892).
39. The requisition of 2 Aug. 1786 estimated $168,274.50 for the needs of the War Department (ibid., 462).
40. See ibid., 29:765–71.
41. A resolution of 8 May 1787 specified that “the board of Treasury be and hereby are authorised to dispose of the public copper on hand, either by sale or contract for the coinage of the same, as they shall judge most for the Interest of the United States” (ibid., 32:272).
42. On 23 April 1782, in response to a report of the secretary at war, 23 Mar. 1782, Congress resolved that all sick and wounded soldiers who preferred to be discharged rather than transferred to the Corps of Invalids should be entitled to a pension of $5 per month “in lieu of all pay and emoluments” (ibid., 22:209–10). For the detailed provisions of the June 1785 resolution, including the provision that completely disabled commissioned officers be allotted a yearly pension equal to half their pay, see ibid., 28:435–37.
44. Spaces in brackets have been left blank in MS.
45. The terms under which payments were credited to the states in the resolution of 6 Oct. 1779 were the same as those specified by the resolution of 22 Nov. 1777, that sums raised for the support of government “shall not be considered as the proportion of any State, but being paid into the treasury shall be placed to their respective credit, bearing an interest of six per cent. per annum.” The resolution of 6 Oct. 1779 also called for a charge of 6 percent annual interest on all deficiencies in the payment of quotas (JCC, description begins Worthington Chauncey Ford et al., eds. Journals of the Continental Congress, 1774-1789. 34 vols. Washington, D.C., 1904–37. description ends 9:954–56, 15:1147–48).
53. This sum involved the negotiation by Thomas Barclay of the two 1786 treaties with Morocco. See Miller, Treaties, description begins Hunter Miller, ed. Treaties and Other International Acts of the United States of America. Vol. 2, 1776-1818. Washington, D.C., 1931. description ends 2:185–227.
54. See Jefferson’s letter to John Jay, 26 Sept. 1786, in Boyd, Jefferson Papers, description begins Julian P. Boyd et al., eds. The Papers of Thomas Jefferson. 40 vols. to date. Princeton, N.J., 1950—. description ends 10:405–6. Jefferson’s letter was read in Congress on 2 Feb. 1787, and evidently the portion relating to speculation in the French debt was referred to the Board of Treasury at that time. See JCC, description begins Worthington Chauncey Ford et al., eds. Journals of the Continental Congress, 1774-1789. 34 vols. Washington, D.C., 1904–37. description ends 32:12. Although dated 19 Feb. 1787, the Board of Treasury’s report on Jefferson’s letter was not read in Congress until 2 Oct. 1787, at which time Congress agreed to the report (ibid., 33:589–93). For the proposal of the Dutch bankers to purchase the American debt to France, see the enclosure in Jefferson’s letter to Jay, 12 Nov. 1786, in Boyd, Jefferson Papers, description begins Julian P. Boyd et al., eds. The Papers of Thomas Jefferson. 40 vols. to date. Princeton, N.J., 1950—. description ends 10:519–23.