To ——— de Illens
Copy: Library of Congress
Passy, Augt. 6. 1780.
I have received the Letter you did me the honor of Writing to me the 28th. past with the Copy of one of the 24. June.3 By the Description you give of the Declaration or certificate of the Treasurer, and their names, with the Interest to be paid for your money 7. per Cent it appears to me that it is in the Treasury of the State of South Carolina and not in that of the general Congress, who have never agreed to pay more than 6. per Cent. and whose declarations or Certificates do not mention Pounds but Dollars, and are assigned by Fras. Hopkinson Treasurer of Loans. The Particular Circumstances of that State, (South Carolina) at present, (their Capital and Ports being in the Hands of the English) must make it difficult for you at this Time to withdraw your funds; But as the State Subsists, there is no doubt but it will in time justly perform its Engagements, and that you will receive your Money with Interest. There has been a general Depreciation of the Value of Paper Money in America, not made by Order of Congress, as it seems you have been told, But growing naturally and gradually from its too great quantity. The Congress have advised the Several States to call in their proportions of it by Taxes; and tho’ the Depreciation was so great as that 60. or 70. Paper Dollars were at length actually valued only as one of Silver, they advised that Silver Dollars Should not be received in the Payment of those Taxes as worth more than forty of Paper. This was probably to enforce the Payment of the Taxes in paper only, the End being to call it in and destroy it. But tho’ the People in general have suffered the Loss occasioned by the depreciation it has only operated as Tax upon them, from which Tax those who lent their Money to the Congress are secured by a Resolution of Congress of the 18th. of April last in the following Words.
“That Congress will, as soon as may be, make such Provision for discharging the Loans that have been made to these United States on Loan office Certificates, as that the Holders of them Shall Sustain no Loss hereon by any Depreciation of the Bills Loaned, Subsequent to the respective Dates of said Certificates.”4
This Example Sent by Congress with Regard to the general Loans, will doubtless be followed by the Several States with regard to their particular Loans, so that you will not suffer by Depreciation.
If Charlestown should be retaken, which is not improbable; or if the Enemy Should abandon it, as they have done Successively the Capitals of massachusetts Bay of Pensylvania, and of Rhode island, when they found that the Reduction of the Capital did not reduce the Province, and that their being posted in those Towns where they have always been confined, served only to divide their forces, and hurt them by Idleness; The Port of Charlestown will then be open, the Produce of the Country may then be exported, and by that means your Money be remitted to you. Your Correspondent may then if you Order it, sell your Stock in the Funds, and vest the Money in Indigo or Such other Commodities as you may direct.
I have the honour to be, Sir,
P.S. If you should want any farther Explanation that I can give you, please to mention it,5 and I will answer immediately.
M. d’Illen Negociant a Marseille.
3. The letter of June 24 is printed in XXXII, 588–9. The one of July 28 (XXXII, 588n) enclosed a copy of the earlier one and asked again how to obtain his money.
4. JCC, XVI, 374–5. Holders of loan office certificates received treatment far more favorable than that of currency holders, who lost 39/40 of their investment by the March 18, 1780, devaluation: Ferguson, Power of the Purse, pp. 51–2, 68–9.
5. He waited until Jan. 31, 1783, to answer the present letter. APS.