From William R. Davie1
Halifax, No Carolina, Nov. 17th. 1791.
I mentioned to my friend Judge Iredell2 when I saw him last at Newbern my intentio⟨n⟩ of moving our next Assembly to address Congress on the subject of receiving our pap⟨er⟩ money in the revenue of the United States collected in this State; and requested him to have a conversation with you on the business, that I might avail myself of your opinion of its propriety and success.
This measure has been suggested to me, by the objections that are made here to the colle⟨ct⟩ion of the excise in specie; the real difficu⟨l⟩ty with which I foresee it will be attended, and its certain operation on the value or exchange of our paper currency: but independent of the policy and convenience of such a measure, I think the State may very wel⟨l⟩ require it of Congress as a matter of Justi⟨ce.⟩ The first emission of this money was ⟨made⟩ for the express purpose of paying the Continental line;3 the second to purchase Tobacco to pay the interest of the Federal debt,4 and to answer these purposes more effectually both emissions were made a tender in discharge of private contracts, and have been so received. It is also to be observed, that both these emissions amounting to two hundred thousand pounds were made several years before the constitution was formed, and that this incumbrance made a part of our political situation at its adoption, and had grown out of the old confederation: so that leaving this State to struggle with the task of supporting the credit of this money, even against the measures of Congress, surely has the appearance of great injustice, especially after a general Assumption of the State debts.
The effects of such a measure would I am certain be highly beneficial to the people of this Country, and I think not injurious to the General Government; the paper money which is now generally at ten shillings to the dollar would rise instantly to par, a benefit the people would attribute to its proper cause; the commercial part of the State would be relieved from great and very distressing difficulties, and the demand for specie created by the duties would no longer operate injuriously on the value of our paper money; it would effectually remove the only rational ground of complaint made against the excise, in the interior and western parts of the State, that is the difficulty or as they say impossibility, of procuring specie sufficient to pay that Tax: And would also prevent a very delicate and perhaps dangerous question, that must otherwise soon arise on executions issuing from the Federal Court. These appear to me as objects of some moment, and I take it, form only a part of the good consequences of this measure. There are not more than £140,000, now in circulation, the balance having been taken up by the sinking fund and destroyed, and as the money would certainly rise to par I think the Federal Treasury would run little risk in receiving it; and I cannot prevail upon myself to entertain the idea, that the General Government is so unwieldy a machine as to be incapable of being accomodated to the interests and situations of the different States.
Our Assembly meet at Newbern the first monday of December, and should you think proper to write to me on this subject you will please to direct to me at that place. I would undertake that the State shall give the most satisfactory assurances that the sinking fund Tax5 shall be continued; and that the Assembly will pass any other law that might be necessary to secure the Treasury of the United States.
I know very well that Gentlemen in official situations are in the habit of respecting no communication, but such as wears the garb of confidence or office. I have no claim to either footing and was I not well persuaded, even from the slight acquaintance I have with you, that you possess a mind of a very different ⟨cast,⟩ I should not have troubled you with this letter.
I have the Honor to be with great respect your mo obd
William R. Davie
ALS, Hamilton Papers, Library of Congress.
1. Davie, a lawyer and Federalist politician, was a representative from the borough of Halifax in the North Carolina state legislature.
2. James Iredell of North Carolina was an Associate Justice of the United States Supreme Court.
3. In 1783 the North Carolina legislature passed “An Act for emitting One Hundred Thousand Pounds in Paper Currency, for the purposes of government for seventeen hundred and eighty three, for the redemption of paper currency now in circulation, and advancing to the Continental officers and soldiers part of their pay and subsistance…” (Clark, State Records of North Carolina description begins Walter Clark, ed., The State Records of North Carolina (Goldsboro, North Carolina, 1886–1907). description ends , XXIV, 475–78).
4. On December 29, 1785, the North Carolina legislature passed “An Act for emitting One hundred thousand Pounds paper Currency, for the Purposes therein expressed.” This law was enacted because of the “pressing circumstances of our domestic and foreign debts” (The Laws of the State of North-Carolina, Passed at Newbern, December, 1785 [New Bern: Printed by Arnett & Hodge, Printers to the State, 1786], 8–9).
5. This tax had been provided by “An Act for emitting One hundred thousand Pounds paper Currency, for the Purposes therein expressed” passed by the North Carolina legislature on December 29, 1785. Section XII provided that “the tax of six-pence on every hundred acres of land, one shilling and six-pence on every poll, and one shilling and six-pence on every hundred pounds value of town property, shall be levied in each and every year, to commence and be first paid for the year one thousand seven hundred and eighty-six; which shall be a sinking fund to sink the paper money in circulation, no part of which shall again go into circulation except the commission given for the collection of said tax” (Laws of the State of North-Carolina … December, 1785, 9).