Since my last the national assembly have completed a subject which had fixed the attention of all parties, and which in the course of its deliberation seemed to threaten serious disorders—the emission of a paper currency. In order to insure its success and to distinguish it as much as possible from other paper currencies, it is to bear an interest of 3. p.Ct. p. Ann. to be calculated daily and to be current for the value of the principal together with the interest accrued at the moment of payment. The idea is taken from Spain where it is said to produce a good effect. Besides it was determined that a quantity of Royal domains and ecclesiastical property to the amount of 400 millions, the sum of the paper emission, should be exposed to sale for its redemption. Whilst the subject of this sale was in debate, an incident motion was made which soon became the principal object of discussion. Dom Gerle, a Carthusian monk, a member of the assembly, remarkable for his probity of character and still more for the zeal with which he has uniformly supported the principles of the revolution, moved that previous to the sale of the ecclesiastical property the assembly should declare the Roman Catholic religion, the religion of the nation. This motion was immediately supported and amended by the members of the clergy and noblesse. Many desired to pass it over in silence as a subject which it was dangerous to touch, but a large number were for meeting in front and finally deciding it. The heat and tumult which immediately took place in the assembly and the advanced hour of the day induced an adjournment till the next morning.—A rumour was immediately spread among the people of Paris that the Aristocrats were making a final effort to prevent the sale of ecclesiastical property. Many false reports were added perhaps designedly, so that in a few hours the different districts assembled and all Paris seemed at the moment of a general explosion. The members of the Clergy and Noblesse of the assembly held a meeting at the same time in the convent of Capucins, whilst those of the most popular part of the assembly met as usual in the convent of Jacobins. In the former it was agreed that they should all go early the next day to the assembly in full dress, and if they lost the question to proceed immediately to the palace, protest against the proceedings of the assembly and throw themselves on the King’s protection. Some of the more zealous and more enthusiastic proposed that from thence they should disperse themselves in the streets and public places of Paris crying out to the people that the Roman-Catholic religion was attacked and that the Protestants had a majority in the assembly. It was hoped that this would bring on some catastrophe which would excite the pity or rouse the fears of the nation.—In the latter (the Jacobins) a plan of conduct for the next day was agreed on so as to decide this question agreeably to the principles of the revolution without rendering their religion suspect to their constituents. Dom Gerle who is a member of the club that assembles at the Jacobins was now sensible of the imprudence of his motion. It was evident he had been induced to make it from the purity of his zeal and from a hope that it would reconcile all parties.

The next morning immense crowds of people collected in the galleries of the assembly and around the house. The guards were doubled and a large number of troops formed on the place Vendome. Anxiety and inquietude were painted on the faces of all, and a fermentation evident among the people without doors. In this manner the members assembled and the deliberation commenced. A circumstance however previously took place which is remarkable for its singularity. The two public galleries of the assembly are filled generally with the lower classes of the people, and yielding to their impressions they frequently incommode the deliberations by their applauses or marks of discontent. It was feared they would go further that day on account of the fermentation which prevailed, but on the contrary the different galleries sent deputies to each other taking a mutual engagement to observe the most profound silence, and what is still more extraordinary, kept the engagement with an exactitude of which there is no example, although a variety of circumstances occurred in the course of the day which excited among them, the most lively emotions.

Agreeably to the plan settled at the Jacobins the Baron de Menou the next day proposed that the Assembly should from a respect for the Creator as well as the Catholic religion determine themselves incompetent to treat the subject, and therefore proceed to the order of the day. Dom Gerle immediately rose to withdraw his motion and adhere to that of the Baron de Menou. As was foreseen the ecclesiastical side of the house took on themselves and proposed the original motion of Dom Gerle with amendments. Many other motions and amendments were made by both sides of the house, and at length that which had been prepared the evening before at the Jacobins as the one which they would all unite to support. The character of the Duke de la Rochefoucauld pointed him out as the proper person to move it. For it I beg leave to refer you Sir to the No. 243. of journals of the assembly herewith inclosed. Immediately the Baron de Menou withdrew his motion to adhere to this, and it passed by a considerable majority. So that France now approaches more nearly than any other country the example which the United States have given to all the world on the subject of freedom of conscience and exercise of religion.—Towards the end of the debate murmurs were heard on the side of the assembly occupied by the aristocratical party, ‘that the deliberations were not free, that the assembly was invested by armed troops &c.’ After the question was decided these murmurs became more loud and pointed, and at length the Marquis de la Fayette desired to be heard on the denunciation made by one of the members against the Mayor and himself.1 He spoke in such a manner as to excite the loudest applauses even on that side of the assembly from which the murmurs and denunciation had come. In passing through the Thuilleries on his return home, he was surrounded and escorted to his carriage by thousands of the people assembled there. Their shouts of joy, their cries of ‘vive notre General,’—men, women and children pressing on him to kiss his hands and skirts of his coat, gave him the air of an hero carried in triumph. This escort passed under the windows of the King and Queen and in their presence.—At the same time two or three of the leading members of the opposite party were insulted by the people in the streets and obliged to seek shelter in a circle of the armed Bourgeoisie which they had a few moments before denounced in the assembly. The people having thus energetically pronounced their opinion on this question prevented the ecclesiastical members from going through the streets as had been proposed night before, and an opinion that the King would not recieve them if they came to offer their protestation induced them to abandon also that part of their determination.—No marked opposition has been since given to the decree for the sale of ecclesiastical lands and the emission of a paper currency. What effect it will produce in the end time only can determine. As yet, it has raised the stocks and the exchange with foreign countries. Still it is apprehended that this paper, notwithstanding the advantages of a daily interest and a mortgage of land will depreciate for some time after its emission. As soon as it begins to be called in by the sale of the lands it will probably be at par.

The coldness between the assembly and Mr. Necker increases, as you will see by a pamphlet which he has published and which I have the honor of inclosing. It is that which was referred to in my last. It is supposed he wishes the assembly may take some measure that may force him to retire from administration.—I inclose you also a publication of the Minister of foreign affairs relative to the livre rouge, and which he distributed to the members of the corps diplomatique. You will recieve also a memorial of the minister of war on the subject of the organisation of the army, and I beg leave to add for the Secretary of the treasury, a continuation of the list of pensions, (of which I have already sent him the preceding numbers) and a report of the committee of finance on the Assignats-monnoie.

The gabelle as you have been informed is entirely suppressed. It may not be amiss to render this circumstance public in the United States, as several American merchants have given it as their opinion that it would be an advantageous circumstance to be allowed to load or ballast with salt in the different ports of France. Mr. Jefferson had induced the farmers-general to form a magazine for this purpose at Honfleur, but the price at which it was fixed prevented the merchants making use of it. At present that obstacle is removed and the article being now of free sale will necessarily fall to a price which will be found advantageous to the merchant.

Mr. Jefferson before his departure had also sollicited of the ministry to grant permission for the entry of salted beef provisions from the United States. A calculation which he had made induced him to believe they would become articles of considerable consumption in this country. The gabelle was then mentioned as an obstacle. Since its abolition I have renewed the subject with Mr. Necker. He wrote me a few days ago that he would take into consideration my demand as soon as the present accumulation of affairs left him a moment free, and that in the mean time he had directed the Controller general to examine it. He told me in conversation he had it at heart, and I dont doubt, if he remains in office, that he will grant the permission desired.

The committee of finances have made a report on the farm of tobacco relative to the contraband which at present exists. Several members were for the continuation of the present exclusive system. It is referred to the committee of impositions. The leading members of that committee are for rendering the commerce of that article free. I mentioned to you the letter I had written to the Duke de la Rochefoucauld the president of the committee on that subject. I referred him at the same time to a letter which Mr. Jefferson had formerly written to Count Vergennes on the same subject, and which he has since told me, he has recieved from the office of foreign affairs. The question will be brought on in a few days.

I mentioned to you in my last the proposals made to the King by the Marquis de la fayette. He has since accepted them, but in a manner which shewed evidently that he had an aversion to several of the articles and that he chose them merely as the smaller evil. The consequence will be necessarily a change in the ministry. A new one will be formed of some of those who are in the present administration and of such other persons as the Marquis de la fayette shall chuse. The Garde des sceaux is one of those who will go out. As soon as the new ministry shall be formed, I do not think it impossible that an attempt will be made to separate the present assembly and call a new one—or at least to force them to confine themselves to the articles of constitution, and leave the framing of laws to the legislature which is to succeed them and which will be chosen under the constitution. This will be a means of bringing about the end of the present assembly which begins to be desired for different reasons by all parties.

I have not yet recieved any letter from you since that of the 11th. of December, which I have already mentioned perhaps too often. I beg leave to repeat here the assurances of those sentiments of respect and attachment with which I have the honor to be, Sir Your most obedient humble servant,