Enclosure Report on Obtaining New Foreign Loans
Treasury Department June 15. 1793.
The Secretary of the Treasury in obedience to the order of the President of the U. States of the 6th instant, respectfully makes the following
The statement herewith transmitted marked A shews,1 on the credit side thereof, the amount of the fund arising from foreign Loans transferred to the United States,2 amounting to 2,965,643. Dollars & 47 Cents; and on the debit side thereof the amount of the sums which have been actually disbursed and are in a course of disbursement out of that fund for specific purposes, being 2,400,159 Dolls & 19 Cents.
There of course remains free for and subject to application, according to the Laws authorising the Loans,3 a balance of 565,484 Dollars & 28 Cents.
To this will be to be added, when ascertained, certain sums of interest subsequent to the year 1790—which will have been included in the payments to France & Spain out of the proceeds of the foreign Loans; & which will thereby have been virtually transferred to the United States—provision having been made for that object out of domestic funds. The addition however will not be large.
Hence results an answer to the first question stated by the President.4
In answer to the second Question, the Secretary has the honor to observe that it would be, in his opinion, expedient, for the reason which has governed hitherto, the convenience of which has been fully experienced, namely, the power of applying the funds to the purposes of either Law according to circumstances—that the proposed Loan should be made upon the authority of both acts, & not upon the seperate authority of either of them.
The following summary answers the third Qustion proposed.
The sum allowed to be borrowed by the two Acts of the 4. & 12. of August 1790 is 14,000,000 of Dollars. the whole amount of the Loans hitherto made is, 19,550,000 Guilders, equal, at 36 4/11 ninetieths of a Dollar Guilder, to 7,898,989 Dollars & 88 Cents; consequently “the balance remaining unborrowed of the two sums allowed to be borrowed” is 6,101,010 Dollars and 12 Cents.
Which leaves much more than sufficient latitude for a Loan of 3,000,000 of florins in addition to that for 2,000,000, already directed & probably set on foot.5
The immediate main object of this further loan would be the purchase of the Debt.
The Installments of the Debt to France falling due in September & November next, & the interest for a year upon so much of the Debt, as by the terms of Contract would fall due after the present time, amount to 3,335,000 Livres, or Dollars 605,302, and 50 Cents which, if to be wholly paid, will more than absorb the balance on hand of the foreign fund.
Supposing the application of this balance to that purpose, there would remain to be borrowed for the purpose of purchases of the Debt, Dollars 1,715,098 and 11 Cents.
The two millions of Guilders already directed to be borrowed, & the three millions, the loan of which is proposed to be authorised, would amount together to 2,020,202. Dollars & 2 Cents, which would exceed the sum requisite for purchases of the Debt by 305,103 Dollars and 91 Cents.
But it is so possible that events may arise which would render it desirable to the United States to encrease its payments to France, as in that view alone to make such an excess not inconvenient. Besides that on the first of June 1794 another installment of the Dutch loans becomes payable, & it is probable if instructions to set on foot the loan, should go at this time, the entire payment of the sums subscribed to the loan would not be completed much sooner than June next. Add to this that it is frequently possible to get the periods of payment protracted.
It would have been fortunate in every sense, if the state of the Treasury had permitted the entering the market for purchases, in force; but the detail which has been given, shews that it could not have been done, under the obstacles which the state of European Affairs lately threw in the way of Loans, without materially hazarding the credit of the United States.
While it is prudent to wait, ’till it is experimentally ascertained, that those obstacles have been removed by the change of affairs, it is desireable to be provided to the extent of the authority given, with means of prosecuting purchases.6
It is probable that for a considerable time to come the prices of stock will remain at a point which will render purchases extremely advantageous.
The further consideration which has been stated with reference to France & the next installment of the Dutch Loans, may not be found unworthy of attention. All which is humbly submitted
Secy of the Treasy
LB, DLC:GW; copy, in Thomas Jefferson’s writing, DLC: Jefferson Papers; copy (letterpress copy), in Thomas Jefferson’s writing, DLC: Jefferson Papers.
1. Enclosure “A” is dated 15 June 1793 and reads:
3. See “An Act making provision for the [payment of the] Debt of the United States,” 4 Aug. 1790, and “An Act making Provision for the Reduction of the Public Debt,” 12 Aug. 1790 (1 Stat description begins Richard Peters, ed. The Public Statutes at Large of the United States of America, from the Organization of the Government in 1789, to March 3, 1845 . . .. 8 vols. Boston, 1845-67. description ends ., 138–44, 186–87).