From Charles Pinckney
Charleston April 4: 1789
I have the honour to inclose you an extract from the proceedings of the Executive of this state, in consequence of a law passed, by the Legislature at their last session for funding and ultimately discharging their foreign debt. A copy of the Ordinance is also inclosed, and a list of the foreign creditors with the nature of their debts, whether due by bond, indent or open account as obtained from Mr. Cripps the agent of the state.
On examining the proceedings of the Executive, you will find how far they have taken the liberty to request your interference in the management of this important affair. They have done so, because there was no one else to whom they would consent it should be confided and because they were convinced your zeal to aid every exertion that should be made to recover our credit in Europe, would very readily induce you to undertake it. They have, to remove all danger of mistakes taken the liberty to suggest the nature of the certificate they wish you to transmit, and will consider it as a particular favour if you will oblige me by an answer in time to be laid before the Legislature at their next session. I have the honour to be with respect Your Obedient humble Servant,
RC (DLC). Recorded in SJL as received 22 June 1789. Enclosures: (1) Copy of ordinance of legislature of South Carolina passed at session ending 13 Mch. 1789 making provision for funding the foreign debt as being “essential to the honor and credit of this State” and pledging various funds for this purpose, including £1,000 to be collected in 1790 under the tax law just passed, the balances on bonds given and payable in specie for the purchase of confiscated estates, and the proceeds of “a Tax of one fourth of a Dollar per head per Annum … hereby imposed on all Negroes Mustizoes and Mulattoes” annually for a period of ten years and applicable only to the foreign debt. The ordinance also authorized the auditor to settle the account of each creditor; directed the commissioners of the treasury to issue certificates of stock at 7 percent interest on such sums as should be found due each creditor; stipulated that the sums due should “be and remain the property of the respective Creditors and … in no wise be transfered or become the property of any other person whatever except only by the Act of the said Creditors respectively appearing in their proper persons at the Treasury and signing an order for such Transfer or by their Special power of Attorney authorizing a person to appear in their name and make such Transfer on their account and in such case the sum thus transferred by each or either of the said methods shall by virtue thereof become the sole free and full property of the person in whose name it is so recorded and to all intents and purposes whatsoever” set forth the exact form of the certificate to be issued, in which there was included the following proviso: “that the said Certificate shall in no case be issued untill the Bonds or Indents which have already been given for the said debt respectively shall be delivered up to the Commissioners of the Treasury or to some person or persons duly authorized by the Governor or Commander in Chief for the time being to recover the same” ordered that the funds pledged should not be used to reduce the capital of the debt until arrears of interest had been extinguished; and stipulated that reimbursement of capital should be made on an annual basis and “rendered only in exact proportion to the relative amount of the Capital owned by each Creditor respectively so that equal justice may be extended to all the foreign Creditors of this State” (Tr in DLC, TJ Papers: 48, 8192–3, attested by Peter Freneau, secretary, under date of 31 Mch. 1789; another Tr, DLC: Short Papers, also attested by Freneau, under date of 25 Aug. 1790, being an enclosure in Pinckney’s letter to Short of 22 Aug. 1790, same). (2) Copy of extract of journals of the privy council of South Carolina, 27 Mch. 1789, in which it appears that Gov. Pinckney laid before the council a letter from John Brown Cutting to him of 23 Mch. 1789 reiterating the position taken by Cutting in conversation “that the proviso in the funding Ordinance empowers the Commander in Chief for the time being to accept Surrender of these Evidences of Contract into the custody of any responsible person in Europe, in lieu of an actual deposit of them here” and “that this really was the Intention of the Legislature” and stating that, if Pinckney still entertained a different belief and construed the law accordingly, “it only remains for me to acquiesce in such decision of the Executive, and return without delay to Amsterdam, to possess myself of the Bonds for the purpose of fulfilling litterally on the part of the Messrs. Van Staphorsts the only Condition upon which in that Case they can obtain the proper Evidence of their new Contract with this State… . But on the other hand, if upon maturer deliberation you should unite in opinion with me that the Bonds which are now in Custody of the Law, and subject to my disposal until the last day of the present year, may as well be ordered to be cancelled by the Notary in whose Hands they are lodged, or delivered up to any other Person in Europe, on whose Integrity you prefer to rely, I am ready to sign the Order for such Cancellation or delivery, provided I have your Excellency’s Assurance previously that as soon as you obtain proof that the Order is obeyed you will certify it to the Commissioners of the Treasury so that the new Certificate may thereupon immediately issue” that the governor then read the proviso as stated in the form of certificate stipulated in the ordinance; that he informed the council that, though authorized to proceed alone, he preferred in an affair of such importance to obtain their advice; that it was his own opinion “that the Honorable Thomas Jefferson … should be written to by the Executive” and “requested on the part of this State to receive from each of the Creditors, or their Agents, their respective Bonds or Evidences of the debt, and to give to them a triplicate receipt on the part of the State, and that upon receiving the Bonds or other Evidences of the debt from all such … as are willing to surrender their present Claims, and accept of the provision offered by the Ordinance and receive the Certificate therein mentioned in lieu of their Claims, that in that Case Mr. Jefferson should be requested to retain such Bonds in his possession, subject only to the Order of the Executive”; that TJ should thereupon transmit to the governor a certificate setting forth his own authority under Pinckney’s letter of 4 Apr. 1789 enabling him to receive “certain Bonds given by Alexander Gillon Esquire, and Alexander Gillon and Ralph Izard Esquires,” naming therein the various creditors, attesting that receipts had been given to each of them in triplicate, affirming that the creditors at the time of surrendering the bonds had given assurance of their willingness to accept the funds provided in the ordinance in lieu of other claims, and assuring the governor that such bonds were in his possession and held subject to the order of the executive of the state; that upon receipt of such certificate from TJ the commissioners of the treasury be directed to issue certificates of stock as provided for in the ordinance; that “Mr. Jefferson be requested to give Information to the Executive of those who have accepted in time to be laid before the Legislature at their Session in January next” and that “the Council were of Opinion that the mode proposed by the Governor be adopted and that if it should so happen, that Mr. Jefferson cannot, or does not receive them, that the Certificate mentioned in the Ordinance do not issue but upon the original Bonds being produced to the Treasury here.” The remainder of the extract pertained to Cutting’s request as attorney for Jacob & Nicolas van Staphorst for payment of the proportionate sum due on the audited indebtedness to that firm of £8,219, and to the council’s stipulation of terms upon which this proportionate share could be paid (Tr in DLC: TJ Papers, 48: 8134–6, attested by John Neufville, secretary to the governor; another Tr, DLC: Short Papers, but lacking the concluding part concerning the debt due Jacob & Nicolas van Staphorst, was transmitted in Pinckney’s letter to Short, 22 Aug. 1790, same). The enclosed list of creditors has not been found.
For TJ’s report on the task that the state of South Carolina imposed upon the American minister, see TJ to Pinckney, 21 Sep. 1789.