To Oliver Wolcott, Junior
January 25. 1795
I have examined the points of which you delivered me a memorandum1 for consideration.
There is no doubt that the monies arising from foreign loans which have been invested in the purchase of Domestic Debt are to be placed to the account of the loan of 2000000 authorised to be made by the Act of the 12th of August 17902 and will exhaust pro tanto the authority thereby given.
It is equally clear that the installment authorised to be paid to the Bank by the Act of the 3d. of March 17933 is to be carried to the same account and will have the same effect.
It appears to me optional to carry the second installment which has been paid to the Bank either to the abovementioned account or to that of the 12000000 authorised to be borrowed by the Act of the 4th of August 1790.4 The last will in my opinion be found the most expedient. From the circumstances which attended the last foreign loan5 if in fact the payment of the 3d. installment must come out of that loan, as from my view of the subject it must, it will fall of course upon the act of the 12th of August 1790.
The monies which have been & shall be paid to foreign officers6 for principal & interest to the end of 1790 belong to the Act of the 4th of August 1790; so does the sum of 15000 Dollars granted for relief of the Inhabitants of St Domingo.7
I am of opinion that the investments in purchases will most properly be considered as proceeding from the first and last loans which were made under the authority of these acts; and consequently the sum to be reserved for interest out of the product of the purchases is 5 Cent. What further shall be reserved for principal is discretionary. From the situation of the fund I think the less the better—¼ Cent appears to me sufficient. But I hope the fund will be exonerated from that reservation.
I think the whole interest on the Debt to foreign Officers from the time interest ceased to be payable to them ought at once to be carried to the Sinking fund. It has been already settled between us that the principal of that debt ought to constitute a 6 per Cent Stock & the arrears of interest to the end of 1790 a three Cent Stock to the credit of the Commissioners of that Fund.
The question how far the authority of the Act of the 12 of August 1790 ought to be deemed to be exhausted will be resolved by adding to the amount of the last 3000000 loan8 the sums expended previous to that loan in purchases and payments which on the principles above stated are to be carried to the account of this Act. This will likewise settle how far the authority of the Act of the 4th of August has been exhausted.
With great consideration & esteem I am Sir Your Obed ser
The Comptroller of the Treasy9
ADf, Connecticut Historical Society, Hartford.
1. Wolcott’s memorandum to H has not been found.
2. Section 4 of “An Act making Provision for the Reduction of the Public Debt” provided “That the President of the United States be, and he is hereby authorized to cause to be borrowed … a sum or sums not exceeding in the whole two millions of dollars, at an interest not exceeding five per cent …” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 187).
3. “An Act providing for the payment of the First Instalment due on a Loan made of the Bank of the United States” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 338 [March 2, 1793]) authorized the President to apply two hundred thousand dollars out of designated borrowed money to pay the first installment due the bank.
4. Section 2 of “An Act making provision for the (payment of the) Debt of the United States” provided “That the President of the United States be, and he is hereby authorized, to cause to be borrowed on behalf of the United States, a sum or sums, not exceeding in the whole twelve millions of dollars …” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 139).
5. For information on the “last foreign loan,” see Willink, Van Staphorst, and Hubbard to H, December 27, 1793. See also Section 4 of “An Act making Provision for the Reduction of the Public Debt,” which provided “That out of the interest arising on the debt … there shall be appropriated and applied a sum not exceeding the rate of eight per centum per annum on account both of principal and interest towards the repayment of the two millions of dollars so to be borrowed” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 187).
6. For a description of this debt, see William Short to H, August 3, 1790, note 5; JCC description begins Journals of the Continental Congress 1774–1789 (Washington, 1904–1937). description ends , XXVI, 42–44. In addition to “An Act making provision for the (payment of the) Debt of the United States,” see Section 5 of “An Act supplementary to an act making provision for the Debt of the United States,” which authorized the President “to cause to be discharged the principal and interest of the said debt, out of any of the monies which have been or shall be obtained on loan …” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 282 [May 8, 1792]). For the negotiations on the payment of these officers, see H to Short, August 16, September 13, 1792; H to George Washington, August 27, 1792; Washington to H, August 31, 1792; H to Gouverneur Morris, September 13, 1792.
7. The money was granted by “An Act providing for the relief of such of the inhabitants of Saint Domingo, resident within the United States, as may be found in want of support” (6 Stat. description begins The Public Statutes at Large of the United States of America [Private Statutes] (Boston, 1856). description ends 13 [February 12, 1794]). See Washington to H, March 4, 1794, note 1, March 21, 1794, note 2; “Cabinet Meeting. Opinion on the Application of Money Given by Law to the Indigent of Santo Domingo,” April 22, 1794.
9. On a page attached to this draft, H wrote the following note: “This to be sent to the Comptroller before it is copied who if he agrees on the Ideas stated will hand the draft to Mr. Jones to be copied. If he prefers a different arrangement on any point he will confer with me. AH.” Edward Jones was a clerk in the Treasury Department.