From Oliver Wolcott, Junior1
Philadelphia June 18. 1795
I have recd. your Letters of June 13th. & 15th.2 for which I thank you & I inclose the statement you desire.
I had in season taken measures for receiving our Debt on Loan in Amsterdam. The plan is to surrender the existing obligations to the Comrs. who in lieu thereof issue triplicate descriptive Certificates to the Creditors—any one being produced at the Treasury will command the new Stock. The Certifs are not transferable. To prevent fraud and insecurity in the transmission the old bonds are to be cancelled & did to our Minister, who is to possess a controul over the whole business.
⟨S⟩ome of our Creditors have doubtless imigrated & may be unable to comply with the proposed form. Mr. Cazenove5 has suggested the expediency of advertizing that the original bonds will be recd. at the Tresy. This may be necessary, yet as the bonds cannot be verified here a very inconvenient delay or great risque must be incurred. Will you favour me with your opinion on the point?
The French Debt has been finally settled & the balance issued in Stock to James Swan6 agent to the Republic pursuant to an authority from the Comtee of Salut Public.
This Mr. Swan has proposed to me to contract7 to pay our Interest in Specie in Holland & when done to receive payment here at par. He ha⟨s⟩ immense funds at command here & as he says in France. ⟨His⟩ ability cannot be doubted. ⟨All the⟩ objections which exist will occur to you. Supposing I contract with him & at the same time authorise our Comrs. to draw on the Treasury, if he fails to comply—will the provision be adequate or what better can be done? The shipment of produce is impracticable. The French Agents command every thing & the risque & probable loss would be immense. On this point will you drop me a line soon.
The 500.000 Dolls you sent arrived in London the latter part of April. This was in season—if my subsequent remittance went safe & the Stock would sell—The Prin Interest & Installs. were paid punctually.8
I must soon decide upon some plan for paying off our Dom. Debt under the law of the last session.9 Several questions arise.
2d If a declaration is to be made, in what manner & by what officer should it be made?
3d. What distribution of the annual 8 Cent for principal & interest will be proper in the several years, to avoid too minute fractions & essentially to comply with the Law? The enclosed table in the Columns marked A & B exhibits the most exact scale which can be adopted in practice—& the Columns C. & D. the true distribution on the principles of the Law. Is it a matter of discretion, after the year 1807 to divide 1 Cent for three quarters of a year, & 5 Cent at the close of the year? This distribution would be most convenient in practice & most satisfactory to the Creditors. The fractional dividends after that time on small sums, of Capital, would not be worth attention.
4th. Does it not result from the general spirit of the Act of the last session, & from the express authority to borrow (for Interest) in the first Sect. that the payments of Interest as well as principal are to be made under the management of the Trustees of the sinking Fund?10 And is not this idea fortified by the necessity which exists of the blending a portion of the payments of principal in the Dividends of Interest?
5th. What is it the duty of the Secy to do in respect to the vested & appropriated Funds—that is, is he to seperate them from the Treasury when wanted? Or is he to carry them by Warrant to a distinct Account as they accrue in the Treasury? The former mode is justified by a practise & understood by the Legislature—the latter is the most efficient mode, by preventing a competition with the demands for the current service, & by compelling an adequate revenue establishment?
6th. If I am oblidged to recur to new Loans, will it not be best to make an arrangement by which the Bank shall be the organ of the Sales of Stock for the public—or to endeavour to obtain a Loan on the Bank for which transferrable Stock is to be delivered? Can any objection in relation to the Charter of the Bank be made to the last expedient?
7th: The 11th. Sect. of the Act, directs the Comrs. of the sinking Fund to pay the Installments of the Loan of 2 millions to the Bank.11 What is the Fund out of which the payments are to be made? And is a farther appropriation necessary?
For reasons which are sufficient I have but little knowledge of what is going forward in the Senate—but I understand generally that the prospects are good.12 The Senate is more firm & able than at any former period. A certain number will however oppose the ratification—but except on a point of which you are informed,13 I believe there is no difficulty—even that will be so managed as to avoid danger. I think I can assure you, that the result will be satisfactory.
I am very respectfully your obedt servt.
Oliv. Wolcott jr.
Alexander Hamilton Esq
P.S. We have as yet no Compt. appointed & I do not see a prospect of obtaining an efficient character.14
ALS, Hamilton Papers, Library of Congress.
2. Letter of June 15, 1795, not found.
3. Charles John Michael De Wolfe. See H to Wolcott, April 10, 1795, note 6.
5. Théophile Cazenove.
On May 1, 1795, Swan wrote to Wolcott: “Enclosed I have the honor of transmitting you the original of an Arreté or Decision of the Committee of Salut public, or public Safety of the National Convention of the 25th. January last,… by which you will perceive that the debt of the United States to France, is put at my disposition, and that I am authorised to finally liquidate the said debt, and receive the reimbursement of it from these States” (LC, RG 59, Records Relating to Foreign Accounts, 1782–1797, Letters, Accounts, and Contracts, National Archives). For the Wolcott-Swan correspondence on the French debt, see Swan to Wolcott, May 1, 13, 15, 19, 1795; Wolcott to Swan, May 11, 18, 1795 (LC, RG 59, Records Relating to Foreign Accounts, 1782–1797, Letters, Accounts, and Contracts, National Archives).
7. On January 14, 1797, Swan presented the following statement to the Treasury Department: “By General Account of Remittances for the Net proceeds of 100 Bars of Silver remitted from Paris to Wilhem & Jan Willink Nicholaas & Jacob Van Staphorst & Hubbard Commissioners of the United States in Amsterdam in payment of a Bill drawn by the said Swan on Dallarde Swan & Co. pursuant to Contract with the Secy of the Treasury dated June 20th. 1795 Amounting Acco’t Sales rendered by said Commissioners dated May 5th 1796 to f 300,365.14”
(D, RG 217, Miscellaneous Treasury Accounts, 1790–1894, Account No. 8550, National Archives).
8. See H to Wolcott, April 10, 1795, note 3.
9. “An Act making further provision for the support of Public Credit, and for the redemption of the Public Debt” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 433–38 [March 3, 1795]).
10. Section 1 of “An Act making further provision for the support of Public Credit, and for the redemption of the Public Debt” reads: “That it shall be lawful for the commissioners of the sinking fund, and they are hereby empowered, with the approbation of the President of the United States, to borrow, or cause to be borrowed, from time to time, such sums, in anticipation of the revenues appropriated, not exceeding, in one year, one million of dollars, to be reimbursed within a year from the time of each loan, as may be necessary for the payment of the interest which shall annually accrue on the public debt; and for the payment of the interest on any such temporary loan, which shall not exceed six per centum per annum, so much of the proceeds of the duties on goods, wares and merchandise imported, on the tonnage of ships or vessels, and upon spirits distilled within the United States, and stills, as may be necessary shall be and are hereby appropriated” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 433).
11. Section 11 of “An Act making further provision for the support of Public Credit, and for the redemption of the Public Debt” reads in part: “That it shall be the duty of the commissioners of the sinking fund, to cause to be applied and paid,… such sum and sums as … had of the Bank of the United States, shall be henceforth payable towards the reimbursement thereof, as the same shall respectively accrue” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 436). Section 11 of “An Act to incorporate the subscribers to 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 191–96 [February 25, 1791]) had provided for the loan of two million dollars. For this section, see “Report on a Plan for the Further Support of Public Credit,” January 16, 1795, note 30.