Quincy February 21st. 1815
In my Letter of the sixth of this Month, No. 2, I asked you “If three, or five Millions could not be borrowed under an Interest of Eight per Cent you may easily conjecture, how soon We should have Seen, as glorious a Bankruptcy, as We now feel.” In your Letter to me of the Same date, February the sixth, you admit that all would have proved “fallacious,” if publick “Credit had become as prostrate, and all National Feeling as callous, as they Seem to be, at the present moment.” Here, Sir, is a coincidence of Sentiment, certainly without any concert intercourse or communication between Us, some what remarkable. Your Sagacity accorded with my bitter Experience. I most sincerely condole with you, over that “callousness of national Feeling” which has appeared, in our dear New England, more grossly, if We except Washington and Alexandria, than any where else. That callousness, however, in another Year of War, notwithstanding the “prostration of publick Credit, would have been Softened, if not wholly dissovled. And this, the British Ministry have had Cunning enough to perceive. Witness the Treaty of Peace of 24th. Decr. 1814.
How shall I explain to you, Sir, the horrors of National Bankruptcy, of Paper Money, of tender Laws and of regulation of Prices, which then stared me in the face? For this purpose I must make a tedious and disagreable Circuit; and must hope and beg to be pardoned for that Egotism and Vanity which you think my “strong Foible.”
My Hobby Horse was a Navy: Alexander Hamiltons’s, an Army. I had no Idea, that France, involved as She was in Europe, could send any formidable Invasion to America. A petty squadron, a single ship of War or Privateer, might insult our Coasts and harbours as they had done; and a very small Force of Sailors and Soldiers might lay some of our Cities under Contribution. Against this danger I thought Brigantines, Sloops, Scooners, and Frigates well armed, manned and officered the most œconomical, the most certain and effectual Defence. And as many fortifications as we could afford to erect, in the best chosen places for the protection of our most exposed Cities, ought to be erected and garrisoned as soon as possible. Accordingly, in my Communications to Congress, I recommended Strong measures for maritime and Naval Defence; and four or six Regiments or Companies, (I forget which and will not Spend time to ascertain,) of Artillery to garrison the Fortresses already built or intended to be immediately erected.
But Alexander Hamilton, who fled from his own Unpopularity, and I may say from national Hatred, to the Barr at New York to acquire the Character of an unambitious Man: was found to be, (to borrow a little modest oratory from your Correspondent, Mr Randolph,) “Commander in Chief,” of the House of Representatives, of the Senate, of the heads of Departments, of General Washington, and last and least, if you will, of the President of the United States. This Language, you will Say is highly figurative: but in fact, and in Truth and in Essence, it is Strictly and litterally true. I am thankfull that the Sequel proved, that he was not “the Commander in Chief” of the Nation. This great Genius, this Sublime Statesman, this profound Politician, found that he could not apply himself to the black Letter Law in Latin and French; that he could not devote his Attention to the Interests and Causes of his Clients; This indeed had never been his Intention. Nothing was farther from his Thoughts. His deep meditations, were for the salvation of the United States, not for Nevis, his native Country. Accordingly he Sits down, and writes a long, elaborate voluminous Letter to a Confidential Friend, in Congress, in which he graciously condescended to delineate a perfect System of Administration. He projected Negotiation and Nominated Ambassador; He urged the Establishment of an Army of Fifty thousand Men, ten thousands of whom to be Cavalry; He advised to Seize upon all the sources of Revenue not yet occupied, to “invigorate the Treasury.” This Letter was brought to me, I believe by Mr Tracy. The Arrogance and presumption of it, I despised; the Extravagence of it astonished me; the gross Ignorance it betrayed and the fatal Influence I knew it would have with the ruling Party, grieved me to the heart. This Letter still exists, as I believe. If it does not, more than monkish Knavery has been exerted to destroy it. I appeal to Wolcott and Pickering and might appeal to many others, now living and to Several who are dead. The House of Representatives dared not adopt the Extravagance of this Plan: but without consulting the President, who was far beneath their notice they adopted part of the Scheme of their Leader and voted, as I remember about twelve thousand Men. Here must be an Hiatus valde deflendus.! If you wish to have it filled up, I will hereafter attempt it.
This Army, small as it was called for Revenue, Revennue demanded Taxes. Taxes had already raised three Rebellions as they were called and threatened three times, if not ten times three.
The publick Necessities were so apparent, that Congress authorised me to borrow five millions of dollars. They were So apprised of the difficulty and uncertainty of raising this Small Sum, that they dared not ascertain and limit the Interest at which it was to be borrowed, but threw all the Risk And responsibility upon me, to determine the terms of the Load. Of course Consultation after consultation took place between me, and my secretary of the Treasury, Mr Wolcott, concerning the Terms of this Loan. A Loan that now appears but a Trifle!
Mr Wolcotts opinion was that the Loan could not be obtained at a less Interest than eight per cent.” I objected to this Interest. I thought it extravagent and unnecessary. I thought it might be had at six Per Cent. Where were We going? What were We about? Five Millions would be but a Sprat for the Nourishment of Leviathan. We must borrow more; if We gave eight per Cent now, for the next Ten Millions We must give ten or twelve per Cent, and so on without End. Mr Wolcott who appeared to me then, as he does now to be perfectly honest and disinterested in the Business, Said “The legal Interest in several of the States is seven or Eight per Cent The Interest given in private Transactions is much more, mounting to ten, twelve and still more, and I do not believe the Money can be obtained, at less than Eight. I desired him to consider of it; and inquire farther. At another Interview, Mr Wolcott, persevered in his Opinion that Eight Per Cent was the lowest Interest at which the Loan could be obtained. He said, his Situation in the Treasury as Controuler and as Secretary, had given him opportunities to know the quantity of Money in the Country: that there was not Such a plenty of it, as Some People thought; that if the Loan Should fail, it would be a fatal discouragement to the People. That the recruiting service for the Army would be Stopped. That the Treasury would be embarrassed &c. I Said surely, there are in the United States Men of Wealth enough who love their Country well enough to lend 5,00,00n’s at Six, upon the faith of the U.S. which ought to be as Stable as the Soil. think and enquire again. I was so distressed with this Question that I wrote a Letter to Mr Wolcott, remonstrating against that Interest of 8 per Ct. in which I Said that fifteen Years before, I had borrowed a larger Sum in holland, for 4 1/2. 5 1/2 and never more than Six per Cent, upon the naked Pledge of the faith of U.S, and [therefore] I could not but think an Unfair Advantage was taken of the Public. Mr Wolcott however, at our next conference persisted in his Opinion, was afraid to publish Proposals for the Loan at a less Interest than 8 per Cent. My Patience which had been put by Enemies and Friends to So many severe tryals, was quite exhausted and I broke out “This damn’d Army will be the ruin of this Country”! “If it must be So, it must, I cannot help it Issue your Proposals as your please.” I ask Pardon for that peevish and vulgar expression: but for the Truth in Substance and Essence of this narration I appeal to Mr Wolcott himself. I know that Oliver Wolcott dare not lie; and if he does not recollect these Facts, his Memory is not so good as mine.
At the rate of our Expences for the Support of Government, the Navy and that Army I was sure that national Bankruptcy must occur in one Year and what resource had We? Paper Money! I had been a Witness of the Nature and Effects of old Tenor from 1745 to 1751 and of Continental Currency from 1775 to 1782 indeed to 1791. and must We buffet our Way through such a Chaos to support an Army already called Raggamuffins and Canibals, in total Idleness and Inaction? Unless, they Spent their time in pillage and plunder, in debauching Wives and Seducing Daughters!
I think Sir, I have Suggested consideration enough to convince you, that the then dominate party had not Sufficient Influence in this Nation to proceed in the War against France after the Government of that Nation had offered Us peace upon honourable Terms; no nor after she had Offered Us Negotiation upon honourable Terms.
But If I had possessed the hands of Mydas, and could have changed Trees and Rocks into Gold; or could I by Stamping on the Ground have called up Legions of Infantry and Cavalry; for what purpose should I have continued the War? The End of War, is Peace: and Peace was offered me. Had I continued the War and raised a great Army every Wise Man in the World would have said of me, in the language of Boileau “Midas! Le Roi Midas! a les Oreilles d’Ane!”
Mr Hamilton and his Friends might have said
“Δος που ςτω, και την Γην κείνησω” But he had not the “που στω.” His Nation was not then harnessed in Taxes nor broken to the draught.
I ask again, a question, which I am not certain you will fully understand. If you do not, I will explain it hereafter. The Question is, Whether Mr Hamilton and Mr Pickering, expected to draw their Resources from South America or St. Domingo?
In your Note of the 13th you congratulate me, on “the News, of the day.” On the News from New Orleans I reciprocate your congratulations. On the News of Peace, I Say, Rejoice Always in all Things. But with what feelings of Indignation, of Grief, of Sorrow, and of humiliation, I rejoice, I leave you to consider, after reading the enclosed Letter, which in full faith in your honor and candor I trust to you, in confidence, you will return it to me by the post, without making any improper Use of it. I am, Sir with much Esteem, your / Friend
I have now seen the Treaty and can cordially congratulate you on the Peace. May I ask the favour of you to think for me and my son in this perplexity?
MH: Lloyd Papers.