From Henry Remsen
New York April 23d. 1792
I had the honor of receiving your favour of the 14th. on the 15th.; but a desire to communicate such intelligence as might be relied on, respecting the calamitous event which has happened here, and the proceedings of the mob, induced me to delay it until now.
A very intelligent person who is interested in the funds of the U.S., but who has not meddled with them for a twelvemonth past, and can therefore be supposed to speak without biass, attributes the whole of this business to Mr. Duer. Astonished at the rapid rise of the funds, he took such pains to ascertain it’s cause, as to discover enough to convince him that it was without foundation, and originated in the spirit of monopoly. In this enquiry, he found that Duer had formerly, and at very enhanced prices, contracted to receive from different people and about at the same time, a number of the New York bank shares, exceeding considerably the number in existence. When the time for delivery arrived the shares were not to be had; and the consequence was, that those which did exist rose almost immediately 40 pr. Cent, and Duer received the difference of price. His success with respect to this plan, gave birth probably to the other for monopolizing the stocks of the U.S., and which has ended in his disgrace and the ruin of many of his fellow citizens. At first he purchased this kind of stock on his own account and on credit, and pledged it to the endorsers of his notes as security: but it continuing to rise, they associated themselves with him in business to appearance so very profitable, and formed themselves into a company, known among the stock dealers by the name of the 6 pr. Cent company. Their purchases and dealings however were extended to all kinds of stock. It is believed, and with reason that Duer alone knew the true state of their funds, and that the others (W. Livingston, Macomb, Whippo &c.) conceived themselves perfectly safe till very lately. Besides the monopoly by the company, Duer was engaged in a monopoly of Stocks on his own acct.; and finding no other people to endorse his notes whose credit was sufficient, he engaged John Pintard (formerly interpreter of the french language for your Departmt.) to procure money for him at an usurious interest, and allowed him £1000 pr. annm. for his services. Pintard employed the lower kind of brokers to effect it, and was extremely successful in raising money, principally among the middling and poorer classes of people. It was the practice of these brokers, who are little better than robbers, to go into every house where they thought there was money, and also to ascertain which of the small traders kept running accounts with the bank (for many of them did, and do still) and to ask them whether they had any money to put out on good interest, offering 1, 2 or 3 pr. Cent pr. Month as they found it necessary. To those who hesitated they offered a greater interest—and there are instances where they have applied 4 or 5 times in vain, and succeeded in the 5th. or 6th. application, by encreasing their offers. The lenders then received notes signed by Duer and endorsed by Pintard, with the assurance that they were perfectly safe, as he received a transfer of stock more than sufficient to cover every note he endorsed. This went on some months, and probably some notes were renewed several times, the interest being discounted or added to the principal on the renewal. But it is to be observed, that as money grew scarcer the interest was raised from 1, 2 and 3, to 4, 5 and 6 pr. Cent per month.—Several procuresses, and other people of the same character became creditors of Duer in this way.
The high prices given by the Company, and by Duer, for stocks from the commencement of their late rise, which was I believe in November or December last, occasioned a great influx from every part of the continent. This market concentrated 9/10th. of the quantity that was held merely for speculation at one time. A part of it was bought directly by the company or Duer for cash, and the cash carried away; but a very considerable and perhaps the greatest part by merchants, or men who possessed money or credit. These gave for it 22/, 23/ or 24/ cash, and sold it to the company or Duer on credit, some payable for when delivered, and others payable for at a future day and deliverable immediately, for 25/, 26/ and 27/. There are others who bought for 22/ and sold for 23/; these sold for 24/, the third purchaser sold for 25/, the fourth for 26/, the fifth for 27/ or 28/, the last purchaser being the company. All these dealings were on credit. The company failing and the stock falling in value, much lower than the first price of 22/, every one of those persons lose, some their whole fortunes, others the greater part of it. It would be impossible to relate the particulars of this ruinous business. The sum of it is, that the wealthy people who engaged in it have lost by the company, and the less wealthy by Duer, thro’ the agency of Pintard. It has totally annihilated all confidence between man and man, and checked in a most surprising degree merchandizing and fair trade.
It appears that the Company intended to raise 6 pr. Cents to 30/, and 3 pr. Cents and deferred to 20/ each; and that they would privately sell a part of their own stock to raise money, in order to effect their object by exaltg. the public value of it, and thereby induce people to buy.
It might be supposed that this business was quite important enough to engage the whole time and attention of one man, but the fact proves the contrary. Duer’s projecting spirit could not brook confinement to a single object however important. After settling a plan of operations with Pintard for the part he was to act in the department assigned him, and furnishing him with blanks for notes ready signed, to be filled up as occasions required, and after fixing principles whereon the agent of the 6 pr. Cent company was to govern himself, Duer in conjunction with W. Livingston purchased a large ship, and sent her with many thousand dolls. to India. Of one man alone they got 80,000 dollars, on giving their note for 100,000 payable on the ship’s return. He also bought a large tract of territory in one of the Eastern States, and contracted for many parcels of land in N. Jersey, in the vicinity of the spot contemplated for the establishment of the manufactory. He was already largely interested in lands on the Ohio; and had the contract for supplying our army with rations, and the frenchmen on the Scioto also with rations.
It is said here that the U.S. will experience some loss on account of his not having taken up the drafts of his agent, who was stationed at fort Pitt to pay for the provisions destined for our troops; Genl. St. Clair having been obliged to endorse them, which makes it the duty of the U.S. to pay them.
Before McComb engaged in speculation, he was in high repute and of extensive credit: His landed estate alone was computed to be worth £60,000: But just before he declared himself a bankrupt and while he was tottering, he has been guilty of many vile, unprincipled acts, such as delaying the declaration of his bankruptcy until after the sailing of the packet, that advices of his situation might not go by her to England, receiving stock to a great amount on the 2d. of April, and assuring upon his honour those who delivered it, that he was able to and would pay for it on the 13th.—remitting this very stock, and all other that he possessed by the packet to England to comply with a contract there—selling bills under such assurances of their being honored, as could not be disputed, to the amount of 80,000 £ Stlg., when he knew his failure to be inevitable; and also conveying beyond the reach of his creditors all his property here, whether real or personal. He is now in gaol with Duer—Whippo and Pintard have secreted themselves—and W. Livingston has retired to his country seat amidst his tenants. Among the less notorious dealers and defaulters, the fulfilment of Contracts has ceased, and they appear to be entirely dissolved and disregarded. Things in general however wear a better aspect than they did a few days since, and the stocks are getting up slowly to par.
Three or four days after the sailing of the English packet, a pilot boat, similar in construction and size to the Virginia built boats that ply in the Chesapeake, was dispatched for England. Many think she will never get there, being too small to escape should the weather prove tempestuous. It is conjectured that the holders of Macomb’s sterling bills sent her off with the hope of her reaching England before the packet. Others suppose that Macomb himself sent her, dreading that some intimation of his approaching fate had been sent by the packet, while a few think that she conveys dispatches from the Secretary of the Treasury for our bankers in Holland. The first two appear to me to be probable; but the real object remains a secret to all except those who sent her. A gentleman wished to send a letter by her, but the Captn. refused to take it, and said £1000 should not tempt him to carry it.
The collection of people about the gaol has consisted chiefly of boys and servants, who went from a motive of curiosity rather than the design of doing mischief. They assembled in consequence of handbills dispersed thro’ the city, by some unknown person, exciting the citizens to inflict punishment on the authors of their wrongs, since they could obtain no redress. It is said some attempts were really made by a few individuals to enter the gaol. The magistracy thought it necessary to have a guard of constables and watchmen in it every night. On one or two nights the crowd stoned the gaol, and broke some windows and lamps; but it is a question whether this disorderly behaviour did not proceed from resentment against the constables &c., who in several instances treated the persons who were quiet spectators with great rudeness, for not retiring to their homes. For the two past nights there has been no collection of people at the gaol. During the two nights of the greatest disorder, no lives were lost nor limbs broken, neither were the militia called out, or a gun fired.—The public mind is however so far from acquiescing in the series of calamitous events with which it has been aflicted, day after day, that but little address would be necessary to raise a mob that all the force of the city could not withstand. In every place Duer and his associates are execrated, and it is a remark in every person’s mouth, that were they torn to pieces, or hung without undergoing any form of trial, it would be only a necessary example and a just punishment. I do not apprehend any thing serious while they remain in confinement, since their creditors seem bent more on recovering a part of the property which is concealed, than on inflicting punishment personally; but it will be dangerous for either of them to appear again in public, unless they previously surrender their property.
Suffer me here, Sir, to obtrude an idea which may suggest some advantages to the Government and it’s citizens. However well meant the law for reducing the public debt was, there have been disadvantages resulting from the manner of purchasing on the part of the U.S., that more than balance, in my mind, the advantages from the reduction that has been made. On the development of Duer’s and the company’s plans they were evident. The 6 pr. cent stock fell to 18/9, and the other kinds in proportion. Had Government then purchased to the extent of it’s ready money, or it’s resources, privately, instead of coming forward with fixed prices, they would with the same money have got more stock than they have done. The money thrown into circulation would have been the same and have afforded equal relief, and it would in addition, by reducing in a greater quantity the stock kept for speculation, have rendered the residue of a more stable value. It strikes me that money is rather scarce in this country; barely sufficient for a circulating medium. If then in this rage for speculation the matter of speculation, that is the stocks, can be reduced in quantity, the more advantageous it would be for the community. In the last public purchase but a small proportion that was offered could be taken—in fact it commenced and ended in a moment—for all had their papers ready and handed them in at the same time. The consequence was, that what was refused fell almost as low as it was before. Besides many supposing the treasury of the U.S. to be an inexhaustible mine, and arguing from precedt. bought on credit; and thus what was intended as a relief, did in a certain degree operate as an evil. Had the Government a sum in it’s coffers sufficient to pay off the whole, or only half of it’s debts at once, perhaps it would be true policy to purchase publicly. To any objection to private purchases, may [be] opposed the irredeemibility of the 6 pr. Cents; for few can believe that the continuance of the debt will prove a blessing. Nay the merchants, who it was supposed would feel none of the duties imposed on the articles of their trade for paying the interest, further than as far as their own consumption went, complain, and say that commerce is scarcely worth pursuing on this very account, and that they are stretched almost to a violation of our commercial laws.
I hope you will excuse me for thus offering my opinion without asking, or even without being warranted by any circumstance, except the favorable opinion you have been pleased to express of me.—Indeed, Sir, I feel much obliged by your friendly and delicate conduct while I had the honor of being employed in your Office; and I assure you nothing but the most pressing necessity could have induced me to a change. I knew, and I have since experienced, that no person but myself could do justice to my mother, and my young brothers and sisters, in attending to the concerns of my deceased parent. I am under the most grateful and lasting acknowledgments for the certificate you favored me with, which is more full than I expected; and I regard it as a testimonial to be of use whenever I should have occasion to exhibit it.
I shall not venture, Sir, to trouble you with any reflections on the pamphlet I sent you, further than to observe, that whoever has read it of my acquaintance, have ascribed it to party spirit, and envy—to disappointed ambition perhaps—but none have to what the author asserts his design to be, in publishing it, the public good. To one who has given up the peaceful enjoyment of domestic happiness, and devoted the best part of his life to the public, to uninterrupted labour and incessant cares, it would be a cruel sensation did he suppose the pamphlet above mentioned spoke the public voice, but as he must know it does not, that it is only intended to serve a political movement, and the purpose of party, he must have the approbation not only of his own conscience, but the approbation of all those who are honest and good men. You know so much of pamphleteers in Europe, Sir, and of their capability to blacken the best of men and measures, that I persuade myself you consign the one in question to the forgetfulness he deserves. I have heard it conjectured that Mr. Ames was the author, but Mr. King disbelieves it, or pretends to do so.
I cannot yet judge whether Govr. Clinton or Mr. Jay will be elected. Their advocates are respectively very zealous and sanguine. The great sale of land to Macomb has lessened Govr. Clinton’s interest among the farmers in the upper part of the state, where he was formerly very popular; but in this city and indeed in the whole southern district of which this city is only a small part, he will have a decided majority of votes. Mr. Jay has gone on the Eastern circuit, and will not return before the election is over.—I have the honor to be with great respect and attachment, Dr. Sir Your obliged & obedt. Servt.
P.S. I must not omit to mention a rumour of Mr. King and Mr. Lawrence the one a Senator and the other a Representative from this State in the legislature of the U.S., being among the unfortunates in speculation. The latter very deeply.
RC (DLC); endorsed by TJ as received 24 Apr. 1792 and so recorded in SJL.
The establishment of the manufactory was to be under the auspices of the Society for Promoting Useful Manufactures of which William Duer himself was governor. Governor George Clinton was under heavy criticism from his Federalist adversaries for having approved, in his capacity as a member of the New York Land Office Commission, a great sale of land to the notorious speculator Alexander Macomb, under the terms of which Macomb purchased more than 3,600,000 acres of state land for 8 cents an acre (Alfred F. Young, The Democratic Republicans of New York: The Origins, 1763–1797 [Chapel Hill, 1967], p. 239–43).