To Alexander Hamilton
[Philadelphia, 7 May 1792]
For carrying into execution the provisions in that behalf made by the Act in titled “An Act for raising a farther sum of money for the protection of the Frontiers, and for other purposes therein mentioned,” I do hereby authorise you the said Secretary of the Treasury to agree and contract with the President Directors & Company of the Bank of the United States; with any other body politic or corporate within the United States, or with any other person or persons, for a loan or loans to the United States of any sum or sums not exceeding in the whole Five hundred and twenty three thousand five hundred Dollars to be advanced & paid in such proportions and at such periods as you shall judge necessary for fulfilling the purposes of the said Act. Provided that the rate of interest of such loan or loans shall not exceed five per centum per annum, and that the principal thereof may be reimbursed at the pleasure of the United States.1 And I hereby promise to ratify what you shall lawfully do in the premises.2
In testimony whereof I have hereunto subscribed my hand at the City of Philadelphia the seventh day of May in the year one thousand seven hundred and ninety two.
1. This letter is essentially a recapitulation of article 16 of this act (Annals of Congress description begins Joseph Gales, Sr., comp. The Debates and Proceedings in the Congress of the United States; with an Appendix, Containing Important State Papers and Public Documents, and All the Laws of a Public Nature. 42 vols. Washington, D.C., 1834–56. description ends , 2d Cong., 1st sess., 1369).
2. Hamilton returned to GW “a copy of the Authorisation which the President signed this morning” later this day (DLC:GW), and on 23 May, Hamilton sent a rough draft of an agreement to Thomas Willing, the president of the Bank of the United States (see Syrett, Hamilton Papers, description begins Harold C. Syrett et al., eds. The Papers of Alexander Hamilton. 27 vols. New York, 1961–87. description ends 11:419). Two days later Hamilton and Willing signed a formal agreement, which reads: “Whereas the said President Directors and Company on the application of the said Secretary have consented to lend on account of the United States the aforesaid sum of Five hundred and twenty three thousand five hundred Dollars in conformity to the provision of the Act aforesaid.
“Now therefore these Presents Witness that it hath been agreed and it is hereby mutually agreed by and between the parties aforesaid as followeth to Wit.
“First that The said President Directors and Company shall advance lend and pay on account of the United States the aforesaid sum of Five hundred and twenty three thousand five hundred Dollars, or so much thereof as may be required in the following installments and at the following periods respectively, namely One hundred thousand dollars on the first day of June next, One hundred thousand dollars on the first day of July next, One hundred thousand dollars on the first day of August next One hundred thousand dollars on the first day of September next, and the residue of the said sum of Five hundred and twenty three thousand five hundred dollars on the first day of January next which several sums shall be paid to the Treasurer of the United States upon Warrants issued from the Department of the Treasury according to Law and shall bear an Interest at the rate of Five per Centum per annum to be computed upon each of the said sums from the time of passing the same to the credit of the said Treasurer.
“Secondly that the Interest upon so much of the Loan aforesaid as may be advanced prior to the first day of January next shall be paid upon the said day and that thenceforth until the reimbursement of the principal sum which shall have been advanced and lent as aforesaid, interest shall be payable half yearly, that is to say upon the first day of July and the first day of January in each year.
“Thirdly, That the surplus of the duties laid by the Act herein before mentioned shall pursuant to the true intent and meaning of the fifteenth Section of the said Act be well and truly applied, as the same shall accrue and be received to the reimbursement of the principal and interest of the monies which shall be advanced and lent as aforesaid and that until such reimbursement shall be completed, The Secretary of the Treasury for the time being shall cause half yearly returns of the amount of the said surplus to be laid before the said President Directors and Company for their information, as soon as may be after the expiration of each half year during the continuance of the said duties from the time of the commencement thereof until the said reimbursement shall be completed.
“Provided always that the whole or any part of the monies which shall have been advanced upon the loan together with all arrears of interest thereupon to the time of such reimbursement may at any time whatsoever at the pleasure of the United States be reimbursed paid off and discharged.
“And lastly—The said Secretary of the Treasury doth promise and engage That the President of the United States within two months from and after the date of these presents will in due form ratify and confirm the Agreement hereby made” (DNA: RG 59, Miscellaneous Letters).
On 1 June, Tobias Lear returned the agreement to Hamilton, informing him that it had been submitted to the president and that as the agreement had been “made conformably to instructions given by the President to the Secretary for that purpose, the President approves the same” (DLC:GW). On 5 June, Thomas Jefferson drafted GW’s official ratification of the agreement between Hamilton and the Bank of the United States (Df, DNA: RG 59, State Dept., Bills of Exchange and Loan Ratifications).