Thomas Jefferson Papers

Memorandum from Thomas Ruston, [April 1785?]

Memorandum from Thomas Ruston

[April 1785?]

  • Question by Mr. Jefferson.
  • If the people of America double their numbers in twenty five years, Query,
  • How long will it take for the increase of the Duty upon Impost to extinguish the National Debt?
  • In order to be able to answer this question fully three things are requisite.
  • 1st: It is necessary to know the present state of population.
  • 2ly: It is necessary to know the amount of the impost—and
  • 3ly It is also necessary to know the amount of the interest to be paid on the national debt.
  • Suppose for instance that the number of the people is three millions.
  • That the amount of the impost is 6,000,000 Dol. and, that the interest to be paid on the National Debt is 6,000,000.
  • In this case it is to be supposed that each individual pays at the rate of two dollars a head per Annum, and
  • That the amount of the impost is just sufficient to discharge the interest of the National Debt. But,
  • According to the probable increase of population, if they double their numbers every 25 years, the next year the numbers will be 3,120,000 which at two dollars a head will make 6,240,000 Dollars. This will occasion a surplus of 240,000 Dollars to be applied to the extinction of the National Debt.
  • 240,000 Dollars applied to the extinction of the principal of the National Debt, will at four per Cent (for the United States actually pay no more than about that sum on the aggregate of their Funds) I say an extinction of 240,000 Dollars at 4 per Ct. will also make a diminution of Interest to be paid of 9,600 Dollars.
  • A Similar increase of population the second year may be supposed to make a proportional increase of surplus in the produce of the impost. Thus, If there is a surplus of 240,000 Dollars the first year, there may be supposed to be a surplus of 480,000 more 9600 Dollars of the interest less to be paid.
  • In this way of computing therefore there will be at the end of the second year a surplus of 489,600 Dollars to be applied to the extinction of the capital, which will also occasion a diminution of the interest of 19,200 Dollars less to be paid.
  • This calculation is made upon the supposition that 3,000,000 of people increase at the rate of 120,000 a year which is one 25th. part, but they will not increase quite so fast the first year, for if they do they will increase faster the second year. Thus, If 3,000,000 produce 120,000 the first year, 3,120,000 may be supposed to produce 124,800 the second year. It will therefore be necessary to set the first years increase of population some what lower than one 25th., or 120,000.
  • So much for the method of making this calculation till the actual state of population, of revenue and of interest to be paid is more accurately known.

MS (ViW); entirely in Ruston’s hand; undated; endorsed by TJ: “Ruston Dr.”

Dr. Thomas Ruston (ca. 1740–1804), a Pennsylvania native who received his A.B. from the College of New Jersey in 1762 and his M.D. from the University of Edinburgh in 1765, practiced medicine in London until 1771 or 1772, when marriage to a wealthy heiress led him to pursue a business career in various parts of England before resuming his medical practice in Exeter around the end of 1777. A strong supporter of the American cause despite his residence in England during the Revolutionary War, Ruston wrote essays on American banking and finance which Benjamin Franklin so admired that he had them translated into French. In the spring of 1785 Ruston went to Paris to confer with Franklin and TJ about his return to America, and it was there that he probably wrote the memorandum printed here (see below). Later in the year he moved with his family to Philadelphia, where he gained entry to the city’s elite by virtue of his wealth and became a director of the Bank of Pennsylvania, a member of the American Philosophical Society, a public advocate of a balanced national economy, and a partner with Tench Coxe and Robert Morris among others in various speculative ventures that ultimately resulted in his imprisonment for debt and fraud in 1796 and left his fortune in tatters (James McLachlan, Princetonians, 1748–1768: A Biographical Dictionary [Princeton, 1976], 402–7; Cooke, Coxe, description begins Jacob E. Cooke, Tench Coxe and the Early Republic, Chapel Hill, 1978 description ends 324–30).

Although there is no record in SJL that Ruston ever corresponded with TJ, internal evidence suggests that he wrote this memorandum in response to a request the Virginian made at some point during the doctor’s visit to Paris in April 1785, when they met five times and discussed American commercial policy in Europe, the only occasions on which their paths are known to have crossed there (Ruston’s Diary, 5–6, 19, 26, 28 Apr. 1785, DLC: Ruston Papers). The memorandum also indicates that Ruston was generally unfamiliar with the American scene, and that he was writing before the establishment of the new federal government under the United States Constitution and the publication of census figures in October 1791, for his reference to the IMPOST almost certainly alludes to the duties which Congress on 18 Apr. 1783 requested authority from the states to levy for twentyfive years in order to help fund the public debt, a requisition that was finally defeated only in 1786 (Morris, Papers, description begins E. James Ferguson, John Catanzariti, Elizabeth M. Nuxoll, Mary A. Y. Gallagher, and others, eds., The Papers of Robert Morris, 1781–1784, Pittsburgh, 1973–99, 9 vols. description ends vii, 523–5n).

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