A.
Abstract of the Liquidated and Loan Office Debt
of the United States 3rd March 1789

Joseph Nourse Register

The Interest on the Domestic Debt agreeably to the Estimate heretofore made, is payable in Indents to the 31st of December 1787. From that period to the 31st of December 1789 provision is yet to be made; of course the Interest on 27,383,917 Dollars Capital at 6 per Cent for Two Years is

Dollars—3,286,070.

[B]
A General Statement of the Foreign Loans, Shewing in abstract the Capital Sums borrowed, the arrearages of Interest and parts of Principal which became due in 1786–1787 and 1788, and remaining unpaid on the 1st January 1789; and the Interest and parts of Principal becoming due in the year 1789.

Treasury of the United States Register’s Office 3d March 1789

The Farmers General of France have a claim on the United States, for eight hundred forty six thousand seven hundred and seventy Livres, fourteen Sols, five deniers upon Contract signed Benjamin Franklin 17th Novr 1781 being a balance due on a Loan of one million Livres Tournois, the 3d June 1777 to Messrs Franklin and Dean as Agents of the United States.20

Joseph Nourse Regr

C.

Treasury of the United States Register’s Office 3d March 1789.

Schedule of Annual payments of French & Dutch Loans on account both of principal and Interest to their final Extinction; for which provision is yet to be made Treasury of the United States Register’s Office 3d March 1789

This Schedule being formed on a principle of a full payment of all Arrearages due on the 1st January 1789: and also, of Interest and parts of Principal, becoming due in 1789. A variation will be made for 1790, and the subsequent Years (as the case may be) should not the funds of the United States admit of such payment.

By the terms of the Loan of 2,000,000 Florins, certain premiums were agreed to be paid to the Subscribers; but at the option of the United States, whether in ready money as they become due, or with an yearly Interest thereon, and an additional Gratuity at the several periods affixed for the Redemption of the Loan.21 The foregoing statement is on a Supposition that the United States will prefer discharging the said Premiums in ready Money, and are accordingly stated in the years they become payable.

Joseph Nourse Regr

D.
Interest Indents

Treasury of the United States Register’s Office 12th June 1789

The following sums by sundry Resolutions of Congress were made receivable into the Treasury of the United States.

E.
[Board of Treasury to Congress]

Board of Treasury 28th September 1787

The Board of Treasury, to whom “it was referred to report a Requ[i]sition for the current year, including one year’s interest on the Foreign Debt, and such part of the Principal as may become due in the ensuing year; and providing for the payment of one Year’s Interest on the Domestic Debt, in a mode most convenient to the States, and advantageous to the Union.”27

Beg leave with great deference to represent to Congress.

That on an attentive investigation of the modes which have been hitherto proposed for the payment of the Interest of the Domestic Debt, it appears altogether impracticable, in the present state of the Federal Government, to make the Interest or honor of the Union coincide with what the several States appear to judge for their convenience in this respect. The propriety of this remark will we presume, appear from a statement of the subsequent facts, and the inferences obviously resulting from them.

The first attempt made by the United States in Congress, to induce the several States to provide means for paying part of the Interest on the Domestic Debt, was the requisition of the 4th & 10th September 1782:28 by this the States are required to furnish their several Quotas of One Million two hundred thousand Dollars, to be applied for the purpose abovementioned; and license given to appropriate, in the first instance, their respective Quotas towards the payment of the Interest of such part of the Debt as was due to their Citizens, previous to any part thereof being paid into the public Treasury.

Without entering into a discussion, how far the License given to the several States, by the foregoing requisition, is warranted by the Confederation (a point which is probably very questionable) we shall only observe, that notwithstanding the completion of it was again urged on the States by the Act of Congress of the 12th of October 1785,29 not more than Four hundred and thirty five Thousand, five hundred and forty one Dollars, was paid on it to the thirty first of March last, and that only by the States of Massachusetts, Pennsylvania, Connecticut and Delaware.

The second experiment for this purpose is the requisition of the 27th and 28th April 1784,30 by which, (although the estimate on account of Interest on the Domestic Debt, to the end of the year 1783 was 1,970,760 Dollars) the sum actually called for on that account was Six hundred and seventy seven thousand seven hundred and forty four Dollars, forty three ninetieths: This Sum the States had a right to pay in Indents of Interest on the Domestic Debt, certified to the end of the Year 1782.

The requisition next in course is that of the 27th September 1785;31 by which the sum required for Interest on the Domestic Debt was Two Millions eight hundred and five thousand, seventy one dollars, and nine ninetieths: This sum the States were admitted to pay in Indents of Interest certified to the end of the year 1784.

By the last requisition, of the 2nd of August 1786,32 the sum required for Interest on the Domestic Debt was one Million, six hundred and six thousand, five hundred and sixty dollars, sixty five ninetieths.

Which sum the States had a right to pay in Indents of Interest, certified to the end of the year 1785: So that the summary of the requisitions on account of Domestic Interest, from the 4th September 1782 to the 2d of August 1786 is as follows:

It is with regret that we are constrained to observe, that to the 31st of March last, the aggregate payments, on account of these requisitions, do not appear from any documents in the Treasury Office to exceed the sum of

If from this balance is deducted the sum of Dollars 1,606,560 65/90 (being the sum required for Interest by the Requisition of the 2nd of August last, and for which no Indents of interest have as yet been issued;) the remainder being 4,672,815 50/90 dollars, is still in circulation, either in Indents of Interest issued by the United States or by the several States, in pursuance of the licence given to them by the requisition of the 10th of September 1782;33 of which last no returns have been made to this Office.

For this large sum of public paper, there is no reason to presume, that Funds in the least degree adequate have been provided by the several States.

Having compared the aggregate of the Indents which have been issued, with the receipt of them in the general Treasury, it may not be amiss to examine the particular States by which payments of Indents have been made, because, by this review the disposition of the several States to provide taxes for the purpose of defraying the Interest of the domestic Debt, may, with a considerable degree of accuracy, be ascertained.

On the Requisition of 1782, there has been paid to the 31st day of March last,

Hence it appears that (exclusive of the extreme inequality in the payments of Interest on the Domestic Debt) there never has been, at any one period, a majority of States disposed to collect taxes for the payment of this Interest (notwithstanding the advantageous terms on which such payments might have been made) and that this disposition has been diminishing so fast, that on the requisition of 1785, scarcely any payments of Indents have been made to the General Treasury; and that no State whatsoever, has complied with the requisition of the 2d of August last, so as to provide adequate funds for their respective quotas.

The United States in Congress having, however, judged it advisable to continue the requisition for Interest on the Domestic Debt, it becomes the duty of the Board to suggest, for this purpose, what appears most conducive to the Interest and Honor of the Union.

Two modes only can be devised for payment of Interest on the Domestic Debt, so that every public Creditor may have his interest ascertained, and regular Documents preserved thereof at the General Treasury.

The first is, by an issue of a paper medium, for the payment of the Interest so certified; and making the same receivable as specie in all the general Taxes.

The second, by requiring of the several States, their respective quotas, for the purpose abovementioned, in gold or silver Coin.

The first mode, (which is, in fact, the issuing of Indents) has been already put in practice; and the result has proved, that the several States do not judge it sufficiently convenient to induce them to comply with it: at least, tho’ some of them have passed Acts in apparent conformity to the requisitions, very few of them have taken measures to collect; by taxes, the Indents issued in pursuance thereof.

The State of Virginia, indeed, by the returns in this Office, appears to have collected on the requisition of 1785, by Taxes, on the 1st January last, more than all the other States in the Union; (although the whole sum collected, for want of sufficient accompanyment in Specie, is not yet paid into the general Treasury) and the States of Pennsylvania and New York, have, it is presumed, a sufficient number of Indents to discharge their several proportions of the Domestic Interest; but this (as to the two States last mentioned) arises from an assumption of a considerable part of the Capital of the Domestic Debt, and not by the ordinary mode of Taxation.

If then it shall appear, that the continuation of the issue of Indents is not beneficial to the domestic Creditors at large (for whose relief it was calculated) and that it is injurious to the public Interest, we presume that Congress will not judge it adviseable to continue it; in which case the sum adequate to the discharge of the domestic Interest, as well as what is required for the other exigencies of Government, for the year 1787, must necessarily be called for in Specie.

That it is not beneficial to the Domestic Creditors at large, will appear clearly from the following circumstance:

In the month of April 1784 the market price of the Domestic Debt (without computing Interest, for which the purchasers made no allowance) was about five shillings in the Pound, at present it is about half that sum. On these principles the following statement will shew the loss sustained by a person then possessed of One hundred Pounds Capital, of the Domestic Debt, and still continuing to hold it.

Which is about 12 per cent diminution on the value of the Capital. This estimate, indeed, is made on terms more favourable to the Creditors in theory than it would be found in practice; for the avarage Interest on the domestic debt, to the end of the year 1785, would not be four years: Neither could Indents be generally negociated at 8s. in the pound; they fell much below that price soon after those of 1785 were issued; and at present they are from 2S.9 to 3s. in the pound.

This loss, indeed, might not be sustained by persons who are skilful in their speculations on the Public Debt, since by a quick transfer of their property on it, they might in a great degree avoid it; but this by the bona fide holder, or original possessor of the Debt, could not be done, and for the relief of such, more than of the former class, we presume the public arrangements, for the payment of the Domestic Interest ought to be calculated.

That the continuation of the system of issuing Indents, is injurious to the public Interest, will appear clearly from the following considerations:

1st Because it is attended with a certain and heavy expence in preparing and issuing the bills, and in preserving the proper checks, so as to detect counterfeits, and to prevent abuses in the officers entrusted with their issue:

2d Because in its operation, it delays, as well as diminishes the payment of Specie into the public Treasury; as the Indents from the depreciated value, are sure of finding their way into the State Treasuries, whilst the gold and Silver (tho’ it may be actually paid by the People) lingers in the hands of the Collectors for the purposes of speculation.

3d Because, where the payments of Indents into the general Treasury, is not limited to a stated and reasonable period (as is the case of the requisition of September 1782 and April 1784:)35 it operates as a premium to those States, who may procrastinate the completion of their Quota’s: The payments made by the state of Massachusetts and Pennsylvania, on the requisition of 1782, are a full confirmation of this remark, as the Interest paid in the former State, was very little below the par of specie, and in the latter, at no more than 25 per cent, discount, whilst the whole arrearages of those requisitions, which are payable in Indents, may now be discharged, by the delinquent States, at a discount of at least 80 per cent, that is four shillings in the pound.

4th Because where to guard against this evil, it is declared, (as in the requisition of 1785 and 1786)36 that the Indents, not collected by a stated period, should not be received at the General Treasury, and that the same shou’d be secured by proper Funds; it creates a disposition in the several States (who may be so delinquent) to withhold all payments, whatsoever, of Specie, from the general Treasury, to compel a relinquishment of those principles whose operation they feel to be inconvenient, And lastly; because it revives, and gives a Sanction to the issue of an unfunded Paper medium, the evils of which, have been so severely felt throughout the Union.

It may be said that the sum of specie which is necessary for the Interest of the Domestic Debt, cannot with any prospect of success, be expected from the States, in addition to what is indispensably requisite for the support of the civil Establishment and Foreign Debt; but this objection (as will appear from the great balance still due from the States) will equally apply against calling for it even in that mode; and of course operate against any requisition whatsoever on account of Domestic Interest.

For the reasons above stated, the Board have judged it advisable to submit to the consideration of Congress, the annexed requisition, in which the sum necessary for the Domestic Interest, is required in Specie.

This sum, estimating the Domestic Debt, as it was computed by the Register of the Treasury, on the 31st March last, will amount to 1,700,407 Dollars.

To facilitate the payment of it, as far as practicable, the Board have judged it necessary, to take a review of the amount in Specie, which has been required of the several States, by the existing requisitions, and to compare with it the actual payments on the appropriations specified in the Annual Estimates, and the sums now judged necessary for their completion; in order that the surplus of the specie appropriations, (if any shou’d appear) should be applied in aid of the sum necessary, for the payment of one years Interest on the Domestic Debt.

This surplus will appear, by the abstract marked (C)37 to be no less than, One million two hundred thousand Dollars; the principal part of which arises from the sum of 1,000,000 Dollars, required in the year 1784, to discharge Debts contracted, and supposed to be due, in the years 1782. and 1783; and which it was originally meant to pay in Specie.

We cannot from any documents in the Treasury Office, ascertain on what details this estimate was grounded: no anticipation has, however, been made on it, excepting the one stated by the late Superintendant of Finance, at the time of his resignation.

By appropriating this sum, to the payment of one years Interest on the Domestic Debt, the deficiency to be required of the States, will be Five hundred thousand, four hundred and Seven Dollars.

In the Estimate, on which the proposed requisition is founded, Congress will observe, that we have included a sum adequate to the discharge of the Debts contracted in consequence of the Act of Congress of the 20th October last, for augmenting the Troops in service,38 which by the Estimate of the Secretary at War (No. 4) amounts to Forty eight thousand, five hundred and forty eight Dollars.

The special requisition, which was intended for defraying the Expences accrueing from that Act, have been repeated, and the States permitted to pass any Monies paid on account of the same, to the credit of the former Specie requisitions, no appropriation has, of course been made for it—the requisition of the 2d August last, having only provided for the Expences of the military establishment, as it then stood.39

A question may perhaps arise, whether it might be proper to appropriate the whole specie surplus, as above stated, for the payment of the Interest on the Domestic Debt, to the end of the year 1786, since by comparing the aggregate of the sums required of the States, on account of Domestic Interest, with the estimates on which those requisitions are founded, the provision for completing the payment of the Domestic Interest, to the end of the year 1786, will not appear adequate.

But it is doubtful how far these estimates can be relied on. In some cases (as in the requisition of 1782) Congress left it to the States to ascertain and pay the interest for which that requisition is made, and even where such licence was not given, some states in the Union have undertaken such payments.

No proper Documents of the Interest so paid, has been returned to this Office, notwithstanding the several States were, by the requisition of 27th September 1785 required to make returns of all Interest paid by them respectively, to the first of January 1786: of course it is not yet practicable to ascertain, with sufficient precision, the commencement of the respective periods of Interest.

When the returns are compleated of all the Indents issued on the requisition of 1785 (with which almost every State in the Union complied)40 it is probable, that a pretty accurate Estimate may be made of the provision necessary for compleating the payment of the Domestic Interest.

In the mean while the arrangements made by Congress, for the disposal of the Western Lands by public Auction, or Contract, and by the sale of the Public Copper,41 will not only absorb a sum of Domestic Interest now due, but will lessen extremely the sum requisite for that object in future; so that should there, on a future investigation, appear a deficiency in the provision made for Domestic Interest, to the end of the year 1786 the States, it is presumed (as they will become more able) will feel themselves better disposed to provide for it, than they appear to be at present. All of which is humbly submitted.

From which deduct the sum of one million two hundred thousand Dollars, being the excess of Specie, called for by the several requisitions of 1784–1785. and 1786 beyond what is, at present, found necessary (agreeably to a report of this date from the board of Treasury) and the balance to be raised in virtue of the present requisition, will be one million, eight hundred and nine thousand, seven hundred and ninety eight Dollars, and fifty eight ninetieths: That the quotas of the several States, of the sum above stated, be as follows, Viz.

That the excess in specie, of the former requisitions, as above stated, be, and it is hereby appropriated towards the payment of one years Interest on the Domestic Debt for the year 1786; any thing in the said requisitions to the contrary notwithstanding; And that whenever one moiety of the sum required for the above purpose shall be paid into the common Treasury the Board of Treasury be, and they are hereby authorised and directed, to give public notice thereof in the several States, and to take such measures for the payment of the said Interest, as they shall think best adapted for the convenience of the public creditors in the several States, and for preserving regular Documents of the interest so paid.

That the foregoing requisition is made in virtue of the Powers of the Confederation, and is obligatory on the States as such, and that the payments under the same shall be passed to the credit of the States respectively, on the terms prescribed by the resolve of Congress, of the 6th day of October 177945 and be applied in conformity to the statement in the preceding part of this requisition, giving preference according to the order in which they are placed in the Estimate.

And whereas, from the delinquency in several States, in discharging their respective quotas of the general Requisitions, the public service is not only greatly impeded, but the United States have been precluded from the means of discharging their foreign engagements, which are at present accumulated to a very heavy amount.

Resolved, That it be again required of the several States, as indispensably necessary to the welfare & honor of the Union, to pay, without delay, into the General Treasury, their several quotas of the former requisitions; and that the States, which continue particularly delinquent, must be considered as responsible for all the Evils which will inevitably flow from a total disregard to the political obligations by which they are constitutionally bound to the other members of the confederacy.

Samuel Osgood

Walter Livingston

Arthur Lee

No. 2.

Estimate of Money requisite for the War Department from first January, to thirty first December 1787

C.

Comparative Estimate of the sums required in Specie of the several States, by the requisitions of 1784 1785 and 1786 with the Expenditures made under the several appropriations, and in sums now judged necessary to complete the same, shewing the surplus or short provision of the specie appropriations for the years above mentioned. By the requisition of 1784 was required of the States in specie Viz.

In these sums were included, through error, four years Interest on the eighteen million French Loan; whereas two years only ought to have been called for, to complete the Interest to 1787 inclusive. that for 1784 and 1785 having been included in the estimates of these years making an excess (after rectifying an error in the estimate of the year 1784. of computing the Interest on twenty four million of Livres at 220,000. instead of 220,222) of 333,111 Dollars.

On the other articles mentioned in the Recapitulation there does not, on examination, appear any surplus; the excess, however, of the sums required in specie, of the several States, by the requisition of 1784. beyond the aggregate objects, for which specie was necessary may be applied as stated in the Reports.

F.

[Board of Treasury to Congress]

Board of Treasury February 19th 1787

Present	Samuel Osgood		Esquires
	Walter Livingston
	Arthur Lee

The Board of Treasury to whom was refered an Extract of a letter from the Honorable Mr Jefferson Minister Plenipotentiary to the Court of France54

Beg leave to report,

That the said minister states, “that a proposition has been made to Monsieur De Calonne, Minister of the finances of France, by a company of Dutch merchants to purchase the debt due from the United states to the Crown of France; giving for the said Debt, amounting to twenty four million of Livres, the sum of twenty million of Livres.55

[“]That information of this proposition has been given to him by the Agent of the said company, with the view of ascertaining whether the proposed Negociation would be agreeable to Congress.

“That the said minister suggests, That if there is a danger of the Public payments not being punctual, whether it might not be better that the discontents which would then arise should be transferred from a Court, of whose good will we have so much need, to the breasts of a private company.

[“]That the credit of the United states is sound in Holland, and that it would probably not be difficult to borrow in that Country the whole sum of money, due to the Court of France, and to discharge that Debt without any deduction, thereby doing what would be grateful to the Court, and establishing with them a confidence in our honor.”

On a mature consideration of the circumstances above mentioned, the board beg leave to observe.

That at the time the debt due from the United States to the Crown of France was contracted, it could not have been foreseen, that the different members of the Union would have hesitated to make effectual provision for the discharge of the same, since it had been contracted for the security of the lives, liberty & property of their several citizens, who had solemnly pledged themselves for its redemption, and that therefore the honor of the United States cannot be impeached for having authorised their minister at the Court of France to enter into a formal Convention acknowledgeing the amount of the said Debt, and stipulating for the reimbursement of the principal and Interest due thereon.

That should the United States at this period, give any sanction to the transfer of this Debt, or attempt to make a Loan in Holland for the discharge of the same, the person interested in the transfer, or in the Loan, would have reason to presume that the United states in Congress would make effectual provision for the punctual payment of the Principal and Interest.

That the prospect of such provision being made within a short period, is by no means flattering; and though the credit of the United States is still sound in Holland, from the exertions which have been made to discharge the Interest due to the subscribers to the Loan in that Country, yet in the opinion of this board, it would be unjust, as well as impolitic to give any public sanction to the proposed Negociation.

Unjust, because the nation would contract an engagement, without any well grounded expectation of discharging it with proper punctuality, Impolitic, because a failure in the payment of Interest accruing from the negociation (which would inevitably happen) would justly blast all hopes of credit with the Citizens of the United Netherlands, when the exigencies of the Union might render new Loans indispensibly necessary.

The Board beg leave further to observe, that altho a grateful sense of the services rendered by the Court of France would undoubtedly induce the United States in Congress to make every possible exertion for the reimbursement of the Monies advanced by his Most Christian Majesty, yet that they cannot presume that it would tend to establish in the mind of the French Court an idea of the National honor of this Country, to involve individuals in a heavy Loan, at a time when Congress were fully sensible that their resources were altogether inadequate to discharge even the Interest of the same, much less the Installments of the principal from time to time becoming due.

How far the Idea of transferring, the discontent which may prevail in the French Court, for want of the punctual payment of Interest, to the breasts of the private Citizens of Holland, would be consistent with sound policy, the Board forbear to enlarge on, it may be proper however to observe, that the public integrity of a nation is the best shield of defence against any Calamities, to which in the course of human events she may find herself exposed.

This principle, so far as it respects the conduct of the United States in contracting the Loans with France cannot be called in question—The reverse would be the case, should the sanction of the United states be given, either to the transfer of the French Debt, or to the Negociation of a Loan in Holland for the purpose of discharging it.

If it be further considered, that the consequences of a failure in the punctual payment of Interest on the Monies borrowed by the United States can by no means be so distressing to a nation (and one powerful in resources) as it would be to individuals whose dependance for support is frequently on the Interest of the Monies Loaned; the Board presume that the proposed Negociation cannot be considered at the present juncture, in any point of view, as either eligible or proper.

Under these circumstances they submit it as their opinion, That it would be proper without delay to instruct the Minister of the United States at the Court of France, not to give any sanction to any Negociation which may be proposed for transfering the Debt due from the United states to the Court of France, to any State or company of individuals who may be disposed to purchase the same.

All which is humbly submitted

Saml Osgood		Commrs
W: Livingston
Arthur Lee