John Bondfield to the American Commissioners, 9 January 1779: résumé
John Bondfield to the American Commissioners7
ALS: American Philosophical Society; copy: National Archives
<Bordeaux, January 9, 1779: Yesterday the convoy for the French islands sailed, accompanied by three small cutters for the United States.8 From a vessel arriving out of Edenton I have learned that tobacco is £10 per hundred weight in American currency. American prices are extraordinarily high because of the excessive emission of paper money. The motives which produced the excess are no longer present, there being ample supply for all emergencies.
A reduction in the quantity of money in circulation is essential to the preservation of credit. A dangerous situation is developing whereby America’s indebtedness abroad will become impossible to repay without exorbitant taxation. The amount of circulating currency in the U.S. has recently been put at about seven hundred million livres, and given the prices at 20 for 1, it is probable that the sum of 35 millions [in specie] does exist. The difficulty is to sink the excess 19/20ths in circulation. In the present course of things foreigners become creditors of consequence, and in time their respective governments may form a national debt of it, demanding reimbursement that we would find difficult to achieve. Considerable purchases of continental paper have been made by men of distinction in this country, and it is from these circumstances that I warn of the danger. If capital of two millions could be granted and appropriated to the end of sinking the continental paper rather than paying the interest to foreigners, I dare say it would sink thirty million of paper. Over a few years this would change the face of the country.
Certain operations now underway may, if successful, put America many millions in debt to France. If continued this will create a debt America will find it difficult to cancel.9
Two injured young men, former captives, arrived today; I will try to procure them passage to America. The initial payment, 24,000 l.t., for the cannon you ordered will fall due in February. Reports from Nantes indicate that the Governor Livingston and the Chasseur are almost loaded; please advise me about the status of the convoy.>
7. Published in Taylor, Adams Papers, VII, 346–8.
8. The Fier’s convoy, which is discussed in our headnote on intelligence reports, Nov. 13, p. 104.
9. Currency reform was a long-standing concern of Bondfield; the previous August he had offered BF a scheme which the commissioners forwarded to Congress: XXVII, 259–60, 261–2, 267–8, 275.