Office of the Attorney General 15th June 1798
I have the honor to submit to your consideration a copy of a resolution intended to be proposed to the Board of Commissioners for carrying into effect the sixth article of the Treaty of Amity Commerce and Navigation between his Britannic Majesty and the United States of America which there is reason to suppose may be adopted by a majority if a question shall be taken upon it.
The principle which the resolution will establish is that in every case where a debt contracted before the late war, was paid in the paper money of the United States or any of them by an American citizen to a British creditor or his Agent duly authorized, if there be any difference between the sterling value of the debt and the sterling value of the paper money paid and accepted, such difference is a loss to the creditor for which he is entitled to claim compensation from the United States under the sixth article of the Treaty of Amity. Against a principle of such extensive consequences some of the arguments which were supposed the most cogent have been by my direction put into print that they might be the better understood and they are now also laid before you.
It is my opinion that a loss of this kind was not within the contemplation of the Treaty of Amity, and is not submitted to the jurisdiction of the Board, and therefore any award against the United States to compensate such a loss is void in itself and ought never to be paid
Whether the Commissioners act within the sphere of the authority vested in them by the Treaty or exceed it in any particular case is a question in my opinion open for the consideration of the United States who may without a violation of good faith decide upon such a question, but if the Commissioners do not exceed their authority whatever award they make upon a matter submitted to them, ought to be performed however erroneous it may appear to be, unless it manifestly appears to have proceeded from corruption or flagrant partiality neither of which is beleived or supposed possible. Though according to these opinions it will be in the power of the United States consistently with national honor and good faith, which are ever to be held sacred, to avoid the payment of sums awarded in cases which in their opinion have not been submitted to the Commissioners yet it is much more desireable that no such awards should be made. It seems then proper before any award under any circumstances whatever shall be attempted to be made in favor of a claim for compensation arising from a payment in paper money accepted by the Creditor or his Agent, that it should be made the subject of negotiation between the two nations, and be ascertained whether such a claim is within the sixth article of the Treaty of Amity, by a new negotiation. To give an opportunity of obtaining an explanation upon this point it is adviseable that the two Commissioners named on the part of the United States should secede from the others if by no other measure a postponement of a decision can be obtained.
If another negotiation shall be commenced there are other matters of moment which at the same time may also be adjusted. These may be particularly stated when necessary and in the mean time I pray leave to refer to the discussions in the case of William Cunningham and Company as suggesting the most material questions which are likely to arise relative to the circumscribed jurisdiction of the Commissioners: and the description of the cases releivable under the Treaty. These discussions appear in the claim, answer and reply herewith communicated.
I have been induced to make this representation because I am persuaded that in general the British creditors entertain the most extravagant and inadmissable expectations of awards in their favor, expectations which are neither warranted by equity or the stipulations in the Treaties, and which if realized cannot fail to impose an immense burden of unjust debt upon the United States.
With the most perfect respect / I have the honor to be your most / obedient humble servant
MHi: Adams Papers.