(Private.)

I have lately had the honour of receiving your favour of 10th May last, accompanied, by Letters for Sir John Sinclair, which I immediately delivered in person, to him for Mr Bentham, which I left at his house; and for Dr Eustis which was forwarded by Post, to the Hague. Sir John Sinclair then put into my hands the printed paper which I now enclose, requesting me to forward it to you;1 and Mr Bentham has since sent me two small volumes lately published by him, under the title Chrestomathia, Part 1. and 2. with a similar request.2 They will be sent in a packet with this Letter.

You will perhaps think there is something like desperation in the remedies proposed by Sir John Sinclair for the Extremities which an insupportable debt and intolerable taxes have brought upon this nation. But the only practical problem for the British Financier to solve is how to accomplish a national Bankruptcy or a composition with the Public Creditors without appearing to make it. When the distress about which so much has been and yet is said, and which I believe to have been much exaggerated by almost all parties, when it comes to pinch as it has hitherto only threatened, the remedy will present itself as unequivocally as the disease—and the most decisive proof to my mind of the exaggeration in all the representations of general distress which have been spreading over the world for so many months, has been the arrant trifling of all parties in the character of the remedies they have administered or proposed. While wheat cost six Shillings a bushel, the farmers must certainly have found it difficult, to pay their taxes, tythes and poor rates, and subsist themselves and support their families. Had it continued long at that price they would have found it impossible. But it has now risen again to ten Shillings and upwards. At that price the farmers can yet stagger along with their load. The streams of the revenue which had begun to fail are again filling up, the cry of distress is still continued, but the symptoms of suffering have much abated. The present paroxysm has evidently passed its point of greatest severity, and a great portion of those who were really distressed are relieved for the moment. It will however be scarcely possible to raise a revenue of sixty Millions Sterling a year upon this People for any continued length of time, without occasioning frequent renewals of the pressure which they will not always be in a humour to endure with equal Patience and Resignation.

You will perceive by my Correspondence with the Secretary of State, that the proposal for negotiating a Treaty of Commerce, has been declined with a profession of readiness to receive and consider any specific proposition upon two of the points suggested under your instructions. Upon the point most immediately interesting, our commerce with their Colonies in the West Indies, the refusal to treat is positive and unqualified.3 Lord Castlereagh with the utmost courtesy and politeness in point of form, observed that with regard to any regulations, which might be contemplated on our part, the whole subject was in the hands of the American Government; they might prohibit the trade in British Vessels, & they might impose aggravated duties upon it as might best suit, their view of the policy of the United States and Great Britain would have no right and feel no disposition to complain of it. He appeared to intimate that the British Cabinet had anticipated the effect of any thing that could be done by Congress, and were prepared for it. He said it was merely an adherence to their Colonial System, and acknowledged that he had some personal doubts whether it was for their own advantage. I am indeed inclined to think that this inflexibility upon Colonial subjects proceeds rather from the Colonial department than from Lord Castlereagh.

When the first proposal in relation to the ships at Venice was made,4 I was apprehensive that there would be objections to the agency of the person through whom it was proposed. It was afterwards renewed through a regular and unexceptionable channel, and I had hopes that it would then have been found acceptable. I have lately been asked from the official source of the last proposal whether I had received any answer to it. I had none from the Secretary of State, and it was a few days before I had the honour of receiving your Letter. The terms upon which the Ships may be obtained are So advantageous, and the ships themselves are so good that another opportunity to decide upon the proposal may be offered.

Some Months since I received a Letter from a Person in the Danish Province of Jutland, requesting me to propose to the Government of the United States, the purchase from Denmark, of the Nicobar Islands in the East Indies. The writer of the Letter intimated that the Danish Government would readily dispose of them to the United States, but that there were particular and satisfactory reasons for making the proposal in this indirect and unaccredited channel. I answered the Letter and declined the negotiation as having no authority to treat upon the subject. The proposal was however repeated and urged in a second Letter which I have not answered.5 I knew nothing of the writer of the Letters, but they were transmitted to me through the medium of the Danish Consul. There is no inconsiderable alarm prevailing here at this moment, in consequence of rumours circulating in the newspapers that an object of Mr. Pinkney’s Negotiation at Naples, is to obtain a cession of the Neapolitan Island of Lampedusa to the United States. Some of the public Journals are for ordering Lord Exmouth’s whole fleet immediately to the Bay of Naples, to anchor yard arm and yard arm along side of the American seventy-four, and give courage to the Neapolitans to reject the ridiculous American demands. If you will send a Minister, in a line of Battle ship to Copenhagen, with instructions to claim indemnity for the Danish spoliations upon our Commerce, and let it be circulated that he is negotiating for the Nicobar Islands, I will answer for its working the British Cabinet and Parliament up to another year of a thirty Millions Peace Establishment, and shall not be surprized if it rearms the whole body of the militia, and remounts all the yeomanry Cavalry of the British Isles. I have the honour to be with perfect Respect Sir your very humble & obedt Servt.