George Washington Papers

To George Washington from the Board of Treasury, 15 June 1789

From the Board of Treasury

No. 3.

June 15th [1789]

Sir.

The enclosed documents marked A. B. C. shew the state of the Domestic Debt of the United States to the 3d day of March last:1 the arrears of Principal and Interest on the Foreign Debt to the end of the present year: and the annual provision which must be made for the payment of the accruing Interest, and Installments of Principal (agreeably to the respective conventions) to the period of the final extinction of Foreign Loans.

The abstract marked D will also shew the probable amount of the paper which has been issued since the 10th of September 1782, for payment of Interest on the Domestic Debt under the denomination of Indents or Facilities, and the Balance computed in circulation: We [say] probable, because previous to the A[d]ministration of the present Board, the Indents issued under the Requisitions of the Requisitions of the 10th September 1782, and 27th of April 1784, were issued without any instructions or Checks to regulate the conduct of the Loan Officers and prevent frauds.2

We have thought it necessary to exhibit this estimate (which is the most accurate that can be formed at present) because it is not improbable that the amount of it may, at a future period, enter into the general mass of the Domestic Debt; for although the Requisitions of Congress are calculated to call out of circulation a very larg[e] proportion of what might be issued to the 31st of December 1787; still there is little or no reason to hope that the States will ever make any adequate provision for calling them in by Taxes.

Under this impression (and because the receipt of Indents in taxes without any proportion of Coin) defeated almost intirely the collection of Specie under the general Requisitions, it was strongly urged by this Board to Congress, as will appear by their report of the 28th September 1787 (Copy of which marked E is herewith transmitted) not to permit their further issue: but considerations unknown to us prevented the adoption of this measure, and of course we cannot be responsible for the resulting evils. The Capital of the Domestic Debt may likewise receive considerable augmentation from the three following Sources.

1st From the admission of unsettled claims for services and supplies furnished during the late war.

2nd From the liquidated amount of unredeemed Bills of the old Emission, and

3rd From Balances which may appear due from the United States to some of the States under the old confederacy, on the final adjustment of the Accounts of the respective States with the Union.

As to the first cause, it can only operate in case the importunate applications of Individuals should induce the Government to repeal their Act of the 23d July 1787—precluding any further admission of French Claims—various and strong efforts have been made for this purpose which the Board have hitherto successfully opposed: considering it (at the present period) as one of the most fruitful sources of fraud, which could be possibly opened.3

The second, as it has at former periods, so it may under the present Government, claim the serious attention of Congress. The probable amount of it is estimated at Seventy eight Millions, four hundred and seventy seven thousand, nine hundred and ninety five nominal Dollars.

Should it therefore be funded at the rate of 40 for one (agreeably to a motion made in Congress on the 7th January 1783) the Specie amount would be 1,961,949 Dollars. If at 75, as proposed the same day—1,046,373 do.4

The augmentation from the third source cannot possibly be judged of ’till the accounts betwixt the several States and the Union (on which we propose to treat) are finally adjusted.

Hence it results that if the outstanding Indents and the unredeemed Bills of the Old Emission were both funded (estimating the latter at 75 for one) the Capital of the Domestic Debt would be augmented betwixt Three and Four Million—and that in such case the aggregate would be at least 30,558,984 Dollars.

Whether any considerable diminution can be made from it within a short period by sales of Land in the Western Territory is rather doubtful.

Contracts for Land to an amount of about 3,200,000 Dollars have been actually executed under the administration of this Board, and the first Installments due thereon paid into the Treasury; but from the subsequent rise in the public debt, and other circumstances, we fear that the public expectations from this source will be much diminished. On this subject we shall treat more fully under the head of the Western Territory.5

It is necessary to observe that in the Schedule marked C is included the last Loan opened in Holland for One Million of Florins, on the presumption that the same will be compleated during the present year.6

Exclusive of the above there are two considerable Foreign Claims against the United States of which we shall treat under a distinct head.

The one said to be due to the Farmer’s General of France estimated at

Livs. 846,0007

The other exhibited by Mr Caron de Beaumarchais8 amounting on the 1st July 1783 to

3,309,491

It is a duty, Sir, that we owe the public to declare that in our opinion a very strict investigation ought to be made of the merits of both these Claims, before the same are in any wise formally acknowledged on the part of the Government: Certain it is (as will appear by our future communications) that no less a sum than one million of Livres of the Aids and subsidies granted by the Court of France previous to February 1778, is not included in the accounts of any Foreign Ministers or Agents concerned in the Receipt of public monies in Europe since the commencement of the late war; but whether the same is involved in either of the Claims above stated cannot, at this juncture, be properly ascertained.9

Whilst on the subject of Foreign Loans, it may not be improper to observe that one of the greatest impediments, which obviously presents itself against the practicability of discharging the sums annually accruing to the first of January 1798 are the heavy Installments of the Capital due on the French Loans. If the forms of those Loans could be so modified, as to defer the payment of all the Installments of principal for the space of Eight or Ten Years, it would be certainly a most desireable object. Since in such case the Annual Revenue might be made to square much more exactly with the annual expenditure than can be otherwise hoped for.10

From Communications which have been made to this Board (for which we beg leave to refer to the paper marked F) it is not improbable that such a negotiation through the intervention of the Dutch Capitalists or other means might be effected, in which case the annual demand for the Foreign Debt to the 1st January 1798, would on an average be diminished Four hundred and sixty two thousand, nine hundred and forty two Dollars. We have the honor to be with high Respect Yr most Obedt Humble Servants

Samuel Osgood

Walter Livingston

Arthur Lee

A.
Abstract of the Liquidated and Loan Office Debt
of the United States 3rd March 1789

Dollars 90th
Registered Debt 4,598,462.78
Credits given to Sundries on the Treasury Books by virtue of special Acts of Congress which are not yet put on the Funded Debt 187,578.65
Certificates issued by the Commissioner of Army Accounts (deducting those which have been cancelled and Registered) 7,967,109.73
Certificates issued by the Commissioners of the five Departments (deducting those which have been cancelled and Registered) 903,574.59
Certificates issued by the late State Commissioners (deducting those which have been cancelled and Registered) 3,291,156.37
Loan Office Certificates issued in 1781 and expressed at Specie value (deducting what has been cancelled and Registered) 112,704.15
Loan Office Certificates old Emissions reduced to specie value agreeably to the scale made by Congress by taking the Medium of the Loans in each Month viz. 3778,900 Dols. Loaned Septr 1st 1777 equal to  Dollars 90th 
3,778,900.
3,459,000 between 1st Septr 1777 & 1st March 1778 equal to 2,538,572.11
59,830,212 between 1st March 1778 & the close of the Lo[a]n Offce equal to  5,146,330.  
11,463,802.
Deduct specie amount cancelled and Registered    365,983.15 11,097,818.75
 
Foreign Officers Amos. to their Credit, the Interest whereof is payable at the House of Mr Grand Banker at Paris and included in the estimate of Foreign Interest    186,427.69
28,334,833.21
From which deduct this sum received into the Treasury (on account of Lands and other purposes) and cancelled 960,915.44
Leaves the Amot of the Domestic Debt 27,383,917.67

Joseph Nourse Register

The Interest on the Domestic Debt agreeably to the Estimate heretofore made, is payable in Indents to the 31st of December 1787. From that period to the 31st of December 1789 provision is yet to be made; of course the Interest on 27,383,917 Dollars Capital at 6 per Cent for Two Years is

Dollars—3,286,070.

[B]
A General Statement of the Foreign Loans, Shewing in abstract the Capital Sums borrowed, the arrearages of Interest and parts of Principal which became due in 1786–1787 and 1788, and remaining unpaid on the 1st January 1789; and the Interest and parts of Principal becoming due in the year 1789.

Treasury of the United States Register’s Office 3d March 1789

Capital Loans borrowed. viz.
Of the Royal French Treasury on Int. @ 5 prCt12 24,000,000
In Holland, guarranteed by the Fr[en]ch Court @ 4 prCt13 10,000,000 Dollars
Livres—34,000,000 = 6,296,296
Royal Spanish Treasury @ 5 per Ct14 174,011
Lenders in Holland 1st loan @ 5 prCt15 5,000,000 Flor:
2nd do 4 prCt16 2,000,000 do
3d do 5 prCt17 1,000,000 do
4th do 5 prCt18 1,000,000 do
9,000,000 =
3,600,000
Total Dollars 10,070,307
Arrearages of Interest and parts of Principal which by the Terms of the Loans became due in 1786–1787 and 1788 and remained unpaid on the first of January 1789. viz.
1786  dolls. 90th 
January 1st 2 Yrs Intt on the  6,000,000 Liv. Fr:Lo[a]n @ 5 prCt. 600,000   = 111,111.10
Novr 5th 1 do on 10,000,000 do 4 prCt 400,000   = 74,074.  
Marh 21st Principal of the Spanish Loan is 174,011.  
Arrearages of Interest 5 prCt    39,895.85
399,092. 5
1787
January 1st 1 Yrs Intt on  6,000,000 Fr: Lo: @ 5 prCt 300,000   = 55,555.50
Sepr 3rd 4 do on 18,000,000 do do 3,600,000   = 666,666.60
First paymt of the 18,000,000 Capital is 1,500,000   = 277,777.70
Novr 5th 1 Yrs Int. on 10,000,000 Fr: Lo: 4 prCt 400,000   = 74,074.  
 
First paymt of the 10,000,000 Capital is 1,000,000   = 185,185.17
Marh 21st 1 Yr’s Int. on 174,011 Dol. Sp: Lo: is 8,700.60
1,267,959.77
1788
January 1st 1 Yr Int. on  6,000,000 Fr: Lo: @ 5 prCt 300,000   = 55,555.50
Septr 31 do on 18,000,000 do @ 5 pCt 900,000   = 166,666.60
Second paymt of the 18,000,000 do Capital is 1,500,000   = 277,777.70
Novr 5th 1 Yrs Int. on 10,000,000 do @ 4 pCt 400,000   = 74,074.  
Second paymt of the 10,000,000 do Capital is 1,000,000   = 185,185.17
Marh 21st 1 Yrs Int. on 174,011 Dol. Sp: Lo: @ 5 prCt 8,700.60
  767,959.77
Total unpaid 1st January 1789 Interest 1,335,074.75
Parts of Principal 1,099,936.89
2,435,011.69
Interest and parts of Principal becoming due in the year 1789
1789
Jany 1st 1 Yrs Int. on  6,000,000 Fr: Lo: @ 5 PrCt 300,000   = 55,555.50
Feby 1st 1 do on  2,000,000 Flo. D. Lo: 4 prCt 80,000 flo. = 32,000.  
Marh 21st 1 do on 174,011 Dol. Sp: Lo: 5 prCt 8,700.60
June 1st 1 do on  7,000,000 flo. D: Lo: 5 prCt 350,000 flo. = 140,000.  
Septr 3d 1 do on 18,000,000 Fr: Lo: 5 prCt 900,000   = 166,666.60
Novr 5th 1 do on 10,000,000 do 4 prCt 400,000   = 74,074.  
Annual Interest Dollars 476,996.80
Parts of Principal
Septr 3d 3d paymt of the 18,000,000 Capital is 1,500,000   = 277,777.70
Novr 5th 3d do of the 10,000,000 do 1,000,000   = 185,185.17
462,962.87
1789
Feby 1st By the terms of the Loan of 2,000,000 of Florins vide Journals of Congress for 1787 Appendix 24619—“The United States may if they please pay off and discharge in ready Money the premium arising this year”—in like manner as was done in 1785 and 1787, whereby they will save as per page 249 the gratification of 6 per Cent as also the Int. upon 70,000 florins @ 4 pCt until A.D. 1803.
Premium of 70,000 Florins is 28,000.  
Total 1789 Dollars   967,959.77
From the foregoing statement it appears there was due on 1 Jany 1789 Interest 1,335,074.75
To be provided for to pay Int. becoming due in 1789 476,996.80
Dutch Premium of 1789 28,000.  
1,840,071.65
Parts of Principal due on 1st January 1789 1,099,936.84
becoming due in 1789   462,962.87
Dollars 3,402,971.56

The Farmers General of France have a claim on the United States, for eight hundred forty six thousand seven hundred and seventy Livres, fourteen Sols, five deniers upon Contract signed Benjamin Franklin 17th Novr 1781 being a balance due on a Loan of one million Livres Tournois, the 3d June 1777 to Messrs Franklin and Dean as Agents of the United States.20

Joseph Nourse Regr

C.

Treasury of the United States Register’s Office 3d March 1789.

Schedule of Annual payments of French & Dutch Loans on account both of principal and Interest to their final Extinction; for which provision is yet to be made Treasury of the United States Register’s Office 3d March 1789

 Dollars 90th 
Amot of Principal & Int. due Jany 1st 1789 3,402,971.56
1790 867,370.33
91 882,074. 7
92 824,777.67
93 1,243,481.43
94 1,162,185.17
95 1,168,888.80
96 1,079,592.53
97 1,118,296.27
98 695,148.14
99 489,222.20
1800 469,962.87
1 554,703.63
2 432,444.40
3 130,000.  
4 127,000.  
5 124,000.  
6 121,000.  
7 228,000.  
Total to be paid Dollars
16,127,119.65

This Schedule being formed on a principle of a full payment of all Arrearages due on the 1st January 1789: and also, of Interest and parts of Principal, becoming due in 1789. A variation will be made for 1790, and the subsequent Years (as the case may be) should not the funds of the United States admit of such payment.

By the terms of the Loan of 2,000,000 Florins, certain premiums were agreed to be paid to the Subscribers; but at the option of the United States, whether in ready money as they become due, or with an yearly Interest thereon, and an additional Gratuity at the several periods affixed for the Redemption of the Loan.21 The foregoing statement is on a Supposition that the United States will prefer discharging the said Premiums in ready Money, and are accordingly stated in the years they become payable.

Joseph Nourse Regr

D.
Interest Indents

Treasury of the United States Register’s Office 12th June 1789

The following sums by sundry Resolutions of Congress were made receivable into the Treasury of the United States.

1st In Certificates which were to be signed by the respective Loan Officers for Interest due in the several States, by Acts of Congress of the 4th & 10th Septr 1782 & 28th April 178422 Dollars
1,867,747.67.4
2nd In Indents of Interest prepared by the Board of Treasury, and to be by them transmitted to the several Loan Officers for the payment of Interest on the Domestic Debt viz.
By Act 27th Septr 178523 1,871,756
 2d Augt 178624 1,606,632
11th Octr 178725 1,700,407
20th Augt 178826 1,686,541
6,865,336.12    
Thus the United States made receivable in Taxes into their Treasury in Interest Indents 8,733,083.79.4
From some of the States not complying with the Acts of 4th & 10th September 1782 and 28th April 1784 the whole amount actually issued of 1.867.747 67/90. 4/8 above mentioned was only 550,841.33.6/8
The whole amount transmitted to the several Loan Offices by the Board of Treasury under the Acts above mentioned to 12th June 1789 is 3,548,965.70
Interest paid at the Treasury of the United States upon Warrants drawn by the Board on the Treasurer, or Treasury Certificates &c. 264,224.35
The total Amount which has been issued for Interest on the Domestic Debt is 4,364,031.48/90.6/8
of which sum there has been received into the Treasury to 12th June 1789 so far as the Records of the Tresy shew 2,235,337.40.5  
Leaving in circulation throughout the U.S. 2,128,694. 8.1

E.
[Board of Treasury to Congress]

Board of Treasury 28th September 1787

The Board of Treasury, to whom “it was referred to report a Requ[i]sition for the current year, including one year’s interest on the Foreign Debt, and such part of the Principal as may become due in the ensuing year; and providing for the payment of one Year’s Interest on the Domestic Debt, in a mode most convenient to the States, and advantageous to the Union.”27

Beg leave with great deference to represent to Congress.

That on an attentive investigation of the modes which have been hitherto proposed for the payment of the Interest of the Domestic Debt, it appears altogether impracticable, in the present state of the Federal Government, to make the Interest or honor of the Union coincide with what the several States appear to judge for their convenience in this respect. The propriety of this remark will we presume, appear from a statement of the subsequent facts, and the inferences obviously resulting from them.

The first attempt made by the United States in Congress, to induce the several States to provide means for paying part of the Interest on the Domestic Debt, was the requisition of the 4th & 10th September 1782:28 by this the States are required to furnish their several Quotas of One Million two hundred thousand Dollars, to be applied for the purpose abovementioned; and license given to appropriate, in the first instance, their respective Quotas towards the payment of the Interest of such part of the Debt as was due to their Citizens, previous to any part thereof being paid into the public Treasury.

Without entering into a discussion, how far the License given to the several States, by the foregoing requisition, is warranted by the Confederation (a point which is probably very questionable) we shall only observe, that notwithstanding the completion of it was again urged on the States by the Act of Congress of the 12th of October 1785,29 not more than Four hundred and thirty five Thousand, five hundred and forty one Dollars, was paid on it to the thirty first of March last, and that only by the States of Massachusetts, Pennsylvania, Connecticut and Delaware.

The second experiment for this purpose is the requisition of the 27th and 28th April 1784,30 by which, (although the estimate on account of Interest on the Domestic Debt, to the end of the year 1783 was 1,970,760 Dollars) the sum actually called for on that account was Six hundred and seventy seven thousand seven hundred and forty four Dollars, forty three ninetieths: This Sum the States had a right to pay in Indents of Interest on the Domestic Debt, certified to the end of the Year 1782.

The requisition next in course is that of the 27th September 1785;31 by which the sum required for Interest on the Domestic Debt was Two Millions eight hundred and five thousand, seventy one dollars, and nine ninetieths: This sum the States were admitted to pay in Indents of Interest certified to the end of the year 1784.

By the last requisition, of the 2nd of August 1786,32 the sum required for Interest on the Domestic Debt was one Million, six hundred and six thousand, five hundred and sixty dollars, sixty five ninetieths.

Which sum the States had a right to pay in Indents of Interest, certified to the end of the year 1785: So that the summary of the requisitions on account of Domestic Interest, from the 4th September 1782 to the 2d of August 1786 is as follows:

By the Requisition of 1782 1,200,000.
By that of 1784 667,774.43
By that of 1785 2,805,071. 9
By that of 1786 1,606,560.65
Making in the whole the sum of 6,279,376.27 dols.

It is with regret that we are constrained to observe, that to the 31st of March last, the aggregate payments, on account of these requisitions, do not appear from any documents in the Treasury Office to exceed the sum of

1,003,725.57
Leaving a Balance still due of no less than 5,275,650.60
6,279,376.27 dols.

If from this balance is deducted the sum of Dollars 1,606,560 65/90 (being the sum required for Interest by the Requisition of the 2nd of August last, and for which no Indents of interest have as yet been issued;) the remainder being 4,672,815 50/90 dollars, is still in circulation, either in Indents of Interest issued by the United States or by the several States, in pursuance of the licence given to them by the requisition of the 10th of September 1782;33 of which last no returns have been made to this Office.

For this large sum of public paper, there is no reason to presume, that Funds in the least degree adequate have been provided by the several States.

Having compared the aggregate of the Indents which have been issued, with the receipt of them in the general Treasury, it may not be amiss to examine the particular States by which payments of Indents have been made, because, by this review the disposition of the several States to provide taxes for the purpose of defraying the Interest of the domestic Debt, may, with a considerable degree of accuracy, be ascertained.

On the Requisition of 1782, there has been paid to the 31st day of March last,

By the State of Massachusetts 192,000.
Connecticut 46,741.10
Pennsylvania 180,000.
Delaware 16,800.
 435,541.1034
On the Requisition of 1784
By Massachusetts 30,963.45
Connecticut 10,989.71
New York 36,933.67
Pennsylvania 53,441.
Delaware 10,011.69
Virginia 38,231.25
 180,571. 7
On the Requisition of 1785
By Massachusetts
By New York 111,195.
Pennsylvania 200,824.70
Delaware 11,064.36
Virginia 64,529.24
 387,613.40
On the Requisition of 1786 000
No State having complied with the terms of it; so that the total receipt of Indent to 31st March last as above stated 1,003,725.57

Hence it appears that (exclusive of the extreme inequality in the payments of Interest on the Domestic Debt) there never has been, at any one period, a majority of States disposed to collect taxes for the payment of this Interest (notwithstanding the advantageous terms on which such payments might have been made) and that this disposition has been diminishing so fast, that on the requisition of 1785, scarcely any payments of Indents have been made to the General Treasury; and that no State whatsoever, has complied with the requisition of the 2d of August last, so as to provide adequate funds for their respective quotas.

The United States in Congress having, however, judged it advisable to continue the requisition for Interest on the Domestic Debt, it becomes the duty of the Board to suggest, for this purpose, what appears most conducive to the Interest and Honor of the Union.

Two modes only can be devised for payment of Interest on the Domestic Debt, so that every public Creditor may have his interest ascertained, and regular Documents preserved thereof at the General Treasury.

The first is, by an issue of a paper medium, for the payment of the Interest so certified; and making the same receivable as specie in all the general Taxes.

The second, by requiring of the several States, their respective quotas, for the purpose abovementioned, in gold or silver Coin.

The first mode, (which is, in fact, the issuing of Indents) has been already put in practice; and the result has proved, that the several States do not judge it sufficiently convenient to induce them to comply with it: at least, tho’ some of them have passed Acts in apparent conformity to the requisitions, very few of them have taken measures to collect; by taxes, the Indents issued in pursuance thereof.

The State of Virginia, indeed, by the returns in this Office, appears to have collected on the requisition of 1785, by Taxes, on the 1st January last, more than all the other States in the Union; (although the whole sum collected, for want of sufficient accompanyment in Specie, is not yet paid into the general Treasury) and the States of Pennsylvania and New York, have, it is presumed, a sufficient number of Indents to discharge their several proportions of the Domestic Interest; but this (as to the two States last mentioned) arises from an assumption of a considerable part of the Capital of the Domestic Debt, and not by the ordinary mode of Taxation.

If then it shall appear, that the continuation of the issue of Indents is not beneficial to the domestic Creditors at large (for whose relief it was calculated) and that it is injurious to the public Interest, we presume that Congress will not judge it adviseable to continue it; in which case the sum adequate to the discharge of the domestic Interest, as well as what is required for the other exigencies of Government, for the year 1787, must necessarily be called for in Specie.

That it is not beneficial to the Domestic Creditors at large, will appear clearly from the following circumstance:

In the month of April 1784 the market price of the Domestic Debt (without computing Interest, for which the purchasers made no allowance) was about five shillings in the Pound, at present it is about half that sum. On these principles the following statement will shew the loss sustained by a person then possessed of One hundred Pounds Capital, of the Domestic Debt, and still continuing to hold it.

£100 Capital of the Domestic Debt, in the year 1784 @ 5/ for 20/ is £25
Four Years avarage Interest on ditto, in Indents of Interest, issued in pursuance of the requisitions of 1784 & 85, sold for 8/ for 20/ £ 9.12
Value of the principal in 1787 @ 2/6 12.10
Loss to the holder   2.18
£25.

Which is about 12 per cent diminution on the value of the Capital. This estimate, indeed, is made on terms more favourable to the Creditors in theory than it would be found in practice; for the avarage Interest on the domestic debt, to the end of the year 1785, would not be four years: Neither could Indents be generally negociated at 8s. in the pound; they fell much below that price soon after those of 1785 were issued; and at present they are from 2S.9 to 3s. in the pound.

This loss, indeed, might not be sustained by persons who are skilful in their speculations on the Public Debt, since by a quick transfer of their property on it, they might in a great degree avoid it; but this by the bona fide holder, or original possessor of the Debt, could not be done, and for the relief of such, more than of the former class, we presume the public arrangements, for the payment of the Domestic Interest ought to be calculated.

That the continuation of the system of issuing Indents, is injurious to the public Interest, will appear clearly from the following considerations:

1st Because it is attended with a certain and heavy expence in preparing and issuing the bills, and in preserving the proper checks, so as to detect counterfeits, and to prevent abuses in the officers entrusted with their issue:

2d Because in its operation, it delays, as well as diminishes the payment of Specie into the public Treasury; as the Indents from the depreciated value, are sure of finding their way into the State Treasuries, whilst the gold and Silver (tho’ it may be actually paid by the People) lingers in the hands of the Collectors for the purposes of speculation.

3d Because, where the payments of Indents into the general Treasury, is not limited to a stated and reasonable period (as is the case of the requisition of September 1782 and April 1784:)35 it operates as a premium to those States, who may procrastinate the completion of their Quota’s: The payments made by the state of Massachusetts and Pennsylvania, on the requisition of 1782, are a full confirmation of this remark, as the Interest paid in the former State, was very little below the par of specie, and in the latter, at no more than 25 per cent, discount, whilst the whole arrearages of those requisitions, which are payable in Indents, may now be discharged, by the delinquent States, at a discount of at least 80 per cent, that is four shillings in the pound.

4th Because where to guard against this evil, it is declared, (as in the requisition of 1785 and 1786)36 that the Indents, not collected by a stated period, should not be received at the General Treasury, and that the same shou’d be secured by proper Funds; it creates a disposition in the several States (who may be so delinquent) to withhold all payments, whatsoever, of Specie, from the general Treasury, to compel a relinquishment of those principles whose operation they feel to be inconvenient, And lastly; because it revives, and gives a Sanction to the issue of an unfunded Paper medium, the evils of which, have been so severely felt throughout the Union.

It may be said that the sum of specie which is necessary for the Interest of the Domestic Debt, cannot with any prospect of success, be expected from the States, in addition to what is indispensably requisite for the support of the civil Establishment and Foreign Debt; but this objection (as will appear from the great balance still due from the States) will equally apply against calling for it even in that mode; and of course operate against any requisition whatsoever on account of Domestic Interest.

For the reasons above stated, the Board have judged it advisable to submit to the consideration of Congress, the annexed requisition, in which the sum necessary for the Domestic Interest, is required in Specie.

This sum, estimating the Domestic Debt, as it was computed by the Register of the Treasury, on the 31st March last, will amount to 1,700,407 Dollars.

To facilitate the payment of it, as far as practicable, the Board have judged it necessary, to take a review of the amount in Specie, which has been required of the several States, by the existing requisitions, and to compare with it the actual payments on the appropriations specified in the Annual Estimates, and the sums now judged necessary for their completion; in order that the surplus of the specie appropriations, (if any shou’d appear) should be applied in aid of the sum necessary, for the payment of one years Interest on the Domestic Debt.

This surplus will appear, by the abstract marked (C)37 to be no less than, One million two hundred thousand Dollars; the principal part of which arises from the sum of 1,000,000 Dollars, required in the year 1784, to discharge Debts contracted, and supposed to be due, in the years 1782. and 1783; and which it was originally meant to pay in Specie.

We cannot from any documents in the Treasury Office, ascertain on what details this estimate was grounded: no anticipation has, however, been made on it, excepting the one stated by the late Superintendant of Finance, at the time of his resignation.

Amounting to Dollars 153,000.
The payments made by the Board under it are 38,539.
Arrears of Military pay and subsitance for 1782 and 1783 still due    39,141.33
230,680.33
 
Making in the whole the sum of Two hundred and Thirty thousand, six hundred and eighty Dollars 33/90ths, which deducted from the 1,000,000. above stated will leave a surplus of 769,320.
This surplus may, in the judgement of the Board, be applied towards the discharge of the Domestic Interest, for the year 1786, because it is to be presumed, that the greatest part of the Debt it was meant to discharge has entered into the mass of the liquidated Debt, and of course, shou’d any claims be now made under it, it wou’d be proper to adjust the same on uniform principles.
The next surplus of any considerable moment is, an excess of provision in the Monies required for the payment of the Interest, and Installments, due on the foreign Debt, owing to an error in former Estimates, as particularly explained in the abstract above mention’d amounting to 333,111.
The third surplus is an excess of specie, required by the requisition of 1784. beyond what the aggregate of the specie appropriations as specified in the estimate, on which that requisition was founded, renders necessary.
The proportion of specie by that requisition being 2,003,241.
And the aggregate of the objects for which actual specie was necessary 1,841,779.33
Leaving a surplus of 161,461.57
So that the Excess of specie, required on former Estimates is 1,263,892.57
If from this is deducted for short provisions    63,892.57
The balance which may be appropriated towards the payment of the Domestic Interest, for the year 1786, will be 1,200,000.

By appropriating this sum, to the payment of one years Interest on the Domestic Debt, the deficiency to be required of the States, will be Five hundred thousand, four hundred and Seven Dollars.

In the Estimate, on which the proposed requisition is founded, Congress will observe, that we have included a sum adequate to the discharge of the Debts contracted in consequence of the Act of Congress of the 20th October last, for augmenting the Troops in service,38 which by the Estimate of the Secretary at War (No. 4) amounts to Forty eight thousand, five hundred and forty eight Dollars.

The special requisition, which was intended for defraying the Expences accrueing from that Act, have been repeated, and the States permitted to pass any Monies paid on account of the same, to the credit of the former Specie requisitions, no appropriation has, of course been made for it—the requisition of the 2d August last, having only provided for the Expences of the military establishment, as it then stood.39

A question may perhaps arise, whether it might be proper to appropriate the whole specie surplus, as above stated, for the payment of the Interest on the Domestic Debt, to the end of the year 1786, since by comparing the aggregate of the sums required of the States, on account of Domestic Interest, with the estimates on which those requisitions are founded, the provision for completing the payment of the Domestic Interest, to the end of the year 1786, will not appear adequate.

But it is doubtful how far these estimates can be relied on. In some cases (as in the requisition of 1782) Congress left it to the States to ascertain and pay the interest for which that requisition is made, and even where such licence was not given, some states in the Union have undertaken such payments.

No proper Documents of the Interest so paid, has been returned to this Office, notwithstanding the several States were, by the requisition of 27th September 1785 required to make returns of all Interest paid by them respectively, to the first of January 1786: of course it is not yet practicable to ascertain, with sufficient precision, the commencement of the respective periods of Interest.

When the returns are compleated of all the Indents issued on the requisition of 1785 (with which almost every State in the Union complied)40 it is probable, that a pretty accurate Estimate may be made of the provision necessary for compleating the payment of the Domestic Interest.

In the mean while the arrangements made by Congress, for the disposal of the Western Lands by public Auction, or Contract, and by the sale of the Public Copper,41 will not only absorb a sum of Domestic Interest now due, but will lessen extremely the sum requisite for that object in future; so that should there, on a future investigation, appear a deficiency in the provision made for Domestic Interest, to the end of the year 1786 the States, it is presumed (as they will become more able) will feel themselves better disposed to provide for it, than they appear to be at present. All of which is humbly submitted.

Estimate of the Monies requisite for the services of the year 1787
For the civil Department, as per abstract No. 1. heretofore transmitted 124,161.85
Military Department, as per abstract No. 2. accompanying this report 176,757.17
Geographer’s Department as per Abstract No. 4. heretofore transmitted 9,964.
Invalid Pensions, agreeably to Act of Congress of April 1782 & June 178542 estimated at 88,000.
Contingencies, estimated from actual expenditures under that head, in the year 1786 20,000.
Foreign Debt, for the payment of the principal & Interest, due on the French & Dutch Loans, in the year 1788 which ought to be provided for in this Year, as per Schedule of Foreign Loans  Dollars 871,622.87
One Years Interest on the Spanish Loans, due in 1788 8,700.
One Years interest on 186,427. dollars amount of Debt due to foreign officers43  11,185.55
891,508.52
Domestic Debt, liquidated as per abstract No. 5. heretofore transmitt’d, Interest on 15,955,788.  Dollars 957,342.
Loan Office Debt, Interest on 3,778,900 issued to 1st Septr 1777 226,734.
Interest on 3,459,000 Dollars (nominal) issued between 1st September 1777 and 1st March 1778 (which sum when liquidated will amount to 2,558,572 Specie; but the Interest is payable in nominal value) 207,552.
Interest on 5,146,330 Dollars specie, value of Loan Office Certificates issued after the 1st March 1778 308,779.  
1,700,407.  
Making in the whole, the sum of Dollars 3,010,798.64
By the United States in Congress assemble’d September [ ] 1787. Resolved, That for the services of the present year, One thousand seven hundred & eighty seven, it will be necessary that the several States should pay into the common Treasury on or before the first day of [ ] next the sum of [ ] for the following purposes.44 Viz.
For the Civil Department 124,161.85
   Military Department 176,757.17
   Geographer’s Department 9,964.
   Invalids Pension 88,000.
   Contingencies 19,000.
Foreign Debt, for the payment of Interest on the French & Dutch Loans and two Instalments of Principal on the French Loans becoming due 1788  Dollars 871,622.87
Spanish Loan, one years Interest due thereon 8,700.
Debt due to foreign officers, one years interest thereon  11,185.55
891,508.52
Domestic Debt one years interest thereon 1,700,407.  
Making in the whole the sum of Dollars 3,009,798.64

From which deduct the sum of one million two hundred thousand Dollars, being the excess of Specie, called for by the several requisitions of 1784–1785. and 1786 beyond what is, at present, found necessary (agreeably to a report of this date from the board of Treasury) and the balance to be raised in virtue of the present requisition, will be one million, eight hundred and nine thousand, seven hundred and ninety eight Dollars, and fifty eight ninetieths: That the quotas of the several States, of the sum above stated, be as follows, Viz.

New Hampshire 63,592.
Massachusetts 270,780.
Rhode Island 38,992.
Connecticut 159,373.
New York 154,727.
New Jersey 100,572.
Pennsylvania 247,569.
Delaware 27,077.
Maryland 170,745.
Virginia 309,460.
North Carolina 131,522.
South Carolina 116,048.
Georgia 19,341.58
Dollars 1,809,798.58

That the excess in specie, of the former requisitions, as above stated, be, and it is hereby appropriated towards the payment of one years Interest on the Domestic Debt for the year 1786; any thing in the said requisitions to the contrary notwithstanding; And that whenever one moiety of the sum required for the above purpose shall be paid into the common Treasury the Board of Treasury be, and they are hereby authorised and directed, to give public notice thereof in the several States, and to take such measures for the payment of the said Interest, as they shall think best adapted for the convenience of the public creditors in the several States, and for preserving regular Documents of the interest so paid.

That the foregoing requisition is made in virtue of the Powers of the Confederation, and is obligatory on the States as such, and that the payments under the same shall be passed to the credit of the States respectively, on the terms prescribed by the resolve of Congress, of the 6th day of October 177945 and be applied in conformity to the statement in the preceding part of this requisition, giving preference according to the order in which they are placed in the Estimate.

And whereas, from the delinquency in several States, in discharging their respective quotas of the general Requisitions, the public service is not only greatly impeded, but the United States have been precluded from the means of discharging their foreign engagements, which are at present accumulated to a very heavy amount.

Resolved, That it be again required of the several States, as indispensably necessary to the welfare & honor of the Union, to pay, without delay, into the General Treasury, their several quotas of the former requisitions; and that the States, which continue particularly delinquent, must be considered as responsible for all the Evils which will inevitably flow from a total disregard to the political obligations by which they are constitutionally bound to the other members of the confederacy.

Samuel Osgood

Walter Livingston

Arthur Lee

No. 2.

Estimate of Money requisite for the War Department from first January, to thirty first December 1787

Pay of the troops 39,031.
Subsistences 5,232.
Rations 28,129.30
33,361.30
Clothing 15,002.
Paymaster Generals department 3,400.
Hospital Department 1,000.
Quarter Master’s Department 13,000.
Ordnance Department 24,614.60
Contingencies of War Department 2,000.
War Office   5,000.  
136,409.
To which add the amount of expences accruing in consequence of the resolve of Congress of the 20th October 178646 per estimate of the 13th August 1787. 48,748.17
Deduct for the Paymaster Generals Department, included in the estimate for the civil department 3,400.
Ditto for the War Office inclu[d]ed in Ditto  5,000.  
  8,400.  
Leaves for the War Department Dollars 176,757.17

C.

Comparative Estimate of the sums required in Specie of the several States, by the requisitions of 1784 1785 and 1786 with the Expenditures made under the several appropriations, and in sums now judged necessary to complete the same, shewing the surplus or short provision of the specie appropriations for the years above mentioned. By the requisition of 1784 was required of the States in specie Viz.

For civil Department 107,525.33
Military Department 200,000.
 
Marine Department 30,000.
Purchases of Indian soil and Expence 60,000.
Contingencies 60,000.
Debts contracted and unpaid, for services of 1782 and 1783 1,000,000.
Spanish Loan, interest on, to 31st December 178447 37,500.
French Loan interest on, 24,000,000 Livres48 222,000.
Dutch Loan, Interest on 10,000,000 Livres guaranteed by France49 74,074.
Ditto interest on 1,800,000 florins50 35,000.
Debt to Farmers General51 interest on    15,680.  
1,841,779.33
By that of the 27th September 1785
For civil Department 122,231.
Military Department 187,224.32
Purchases of Indian Soil 5,000.
Contingencies 90,000.
Dutch Loan, Interest on 10,000,000 Livres guaranteed by France 74,074.
French Loan of 24,000,000 Livres, Interest on 222,222.20
Spanish Loan of 174,000 dollars Interest on 8,700.
Dutch Loan of 5,000,000 Florins, at 5 per Cent 96,527. 5
Ditto of 2,000,000 do at per 4 Cent 30,888.88
Farmers General, 846,710 livres, capital     7,840.  
844,707.55
By the requisition of the 2d of August 178652 the sum required in specie was,
For Civil Department 169,352.86
Military Department 168,274.50
Contingencies 94,294.65
Indian Affairs 6,000.
Geographer’s Department 8,953.
French and Dutch Loans interest for 1786 317,985.10
Ditto principal and interest for 1787 1,392,059.17
Spanish Loan, balance of interest 2,396.55
Debts due to foreign Officers Interest for 1786    11,185.55
2,170,501.68
4,856,988.66

In these sums were included, through error, four years Interest on the eighteen million French Loan; whereas two years only ought to have been called for, to complete the Interest to 1787 inclusive. that for 1784 and 1785 having been included in the estimates of these years making an excess (after rectifying an error in the estimate of the year 1784. of computing the Interest on twenty four million of Livres at 220,000. instead of 220,222) of 333,111 Dollars.

Recapitulation
Civil Department 1784, 1785. & 1786 399,109.29
Military Department do do per do 555,498.82
Marine Department 1784 30,000.
Purchases of Indian Soil &c. 1784, 1785 and 1786 71,000.
 
Contingencies 1784, 1785 and 1786 244,294.65
Debts contracted and unpaid 1782 and 1783 1,000,000.
Spanish Loan, Interest on 48,596.55
Farmers General, Interest for 1784 and 1785 23,520.
French and Dutch Loans—Interest and principal, Installments for 1784 1785 1786 and 1787 2,464,830.50
Geographer’s Department, 1786 8,953.
Debts due to foreign officers 1786    11,185.55
4,856,988.66
From the above statement it appears, that for the civil Department was required in 1784, 1785 and 1786 Surplus short provisions
  399,209.29
Which sum being founded on an Estimate of actual Salaries and Expences leaves no surplus 000,000.
For the military Department   555,498.82
On which account has been expended exclusive of services of 1782 and 1783 the sum of 559,601.68
Judged necessary to complete pay & subsistence &c. of Colonel Harmars corps for 1786    39,141.33
Short provision 43,244.29
Marine Department    30,000.  
Expended 24,754.45
Balance judged necessary to complete the appropriation     5,245.45
Dollars    30,000.  
Purchases of Indian Rights of Soil and Contingencies   315,294.65
Under which two heads have been expended 248,863.60
Balance judged necessary to complete the appropriation, upwards of Forty thousand Dollars having been expended on account of Barbary Treaties,53 and not requir’d in any former Estimate    66,431. 5
Dollars 315,294.65
Debts contracted and unpaid in 1782 and 1783 on which account there was required 1,000,000.  
Anticipation of the late Superintendant of Finance 153,000.
Expenditures by the Board 38,539. 9
Arrears of military pay due for 1782 and 1783 39,141.33
Balance which may be appropriated for other objects 769,319.48 769,319.48
1,000,000.  
 
French and Dutch Loans
Interest and principal, for 1784 1785 1786 and 1787 Surplus short provisions
2,464,830.50
On which account has been expended 557,427.
The sum necessary to complete the payment of Interest and Installments of principal to the end of the year 1787 1,574,292.50
Excess of appropriation   333,111.  
Dollars 2,464,830.50   333,111.  
1,102,430.48

On the other articles mentioned in the Recapitulation there does not, on examination, appear any surplus; the excess, however, of the sums required in specie, of the several States, by the requisition of 1784. beyond the aggregate objects, for which specie was necessary may be applied as stated in the Reports.

The sum required in specie being 2,003,241.
And the sum for which actual specie was necessary 1,841,779.33
Surplus of specie required 161,461.57
To which add, as stated per contra 1,102,430.48
Makes the total surplus—Dollars— 1,263,892.15
From which deduct short provisions on military Department for 1784 1785 and 1786 43,244.29
For Contingencies    20,647.76
63,892.15
Remains subject to a change of appropriation 1,200,000.  
Dollars 1,263,892.15

F.

[Board of Treasury to Congress]

Board of Treasury February 19th 1787

Present Samuel Osgood } Esquires
Walter Livingston
Arthur Lee

The Board of Treasury to whom was refered an Extract of a letter from the Honorable Mr Jefferson Minister Plenipotentiary to the Court of France54

Beg leave to report,

That the said minister states, “that a proposition has been made to Monsieur De Calonne, Minister of the finances of France, by a company of Dutch merchants to purchase the debt due from the United states to the Crown of France; giving for the said Debt, amounting to twenty four million of Livres, the sum of twenty million of Livres.55

[“]That information of this proposition has been given to him by the Agent of the said company, with the view of ascertaining whether the proposed Negociation would be agreeable to Congress.

“That the said minister suggests, That if there is a danger of the Public payments not being punctual, whether it might not be better that the discontents which would then arise should be transferred from a Court, of whose good will we have so much need, to the breasts of a private company.

[“]That the credit of the United states is sound in Holland, and that it would probably not be difficult to borrow in that Country the whole sum of money, due to the Court of France, and to discharge that Debt without any deduction, thereby doing what would be grateful to the Court, and establishing with them a confidence in our honor.”

On a mature consideration of the circumstances above mentioned, the board beg leave to observe.

That at the time the debt due from the United States to the Crown of France was contracted, it could not have been foreseen, that the different members of the Union would have hesitated to make effectual provision for the discharge of the same, since it had been contracted for the security of the lives, liberty & property of their several citizens, who had solemnly pledged themselves for its redemption, and that therefore the honor of the United States cannot be impeached for having authorised their minister at the Court of France to enter into a formal Convention acknowledgeing the amount of the said Debt, and stipulating for the reimbursement of the principal and Interest due thereon.

That should the United States at this period, give any sanction to the transfer of this Debt, or attempt to make a Loan in Holland for the discharge of the same, the person interested in the transfer, or in the Loan, would have reason to presume that the United states in Congress would make effectual provision for the punctual payment of the Principal and Interest.

That the prospect of such provision being made within a short period, is by no means flattering; and though the credit of the United States is still sound in Holland, from the exertions which have been made to discharge the Interest due to the subscribers to the Loan in that Country, yet in the opinion of this board, it would be unjust, as well as impolitic to give any public sanction to the proposed Negociation.

Unjust, because the nation would contract an engagement, without any well grounded expectation of discharging it with proper punctuality, Impolitic, because a failure in the payment of Interest accruing from the negociation (which would inevitably happen) would justly blast all hopes of credit with the Citizens of the United Netherlands, when the exigencies of the Union might render new Loans indispensibly necessary.

The Board beg leave further to observe, that altho a grateful sense of the services rendered by the Court of France would undoubtedly induce the United States in Congress to make every possible exertion for the reimbursement of the Monies advanced by his Most Christian Majesty, yet that they cannot presume that it would tend to establish in the mind of the French Court an idea of the National honor of this Country, to involve individuals in a heavy Loan, at a time when Congress were fully sensible that their resources were altogether inadequate to discharge even the Interest of the same, much less the Installments of the principal from time to time becoming due.

How far the Idea of transferring, the discontent which may prevail in the French Court, for want of the punctual payment of Interest, to the breasts of the private Citizens of Holland, would be consistent with sound policy, the Board forbear to enlarge on, it may be proper however to observe, that the public integrity of a nation is the best shield of defence against any Calamities, to which in the course of human events she may find herself exposed.

This principle, so far as it respects the conduct of the United States in contracting the Loans with France cannot be called in question—The reverse would be the case, should the sanction of the United states be given, either to the transfer of the French Debt, or to the Negociation of a Loan in Holland for the purpose of discharging it.

If it be further considered, that the consequences of a failure in the punctual payment of Interest on the Monies borrowed by the United States can by no means be so distressing to a nation (and one powerful in resources) as it would be to individuals whose dependance for support is frequently on the Interest of the Monies Loaned; the Board presume that the proposed Negociation cannot be considered at the present juncture, in any point of view, as either eligible or proper.

Under these circumstances they submit it as their opinion, That it would be proper without delay to instruct the Minister of the United States at the Court of France, not to give any sanction to any Negociation which may be proposed for transfering the Debt due from the United states to the Court of France, to any State or company of individuals who may be disposed to purchase the same.

All which is humbly submitted

Saml Osgood } Commrs
W: Livingston
Arthur Lee

LB, DLC:GW.

On 8 June 1789 GW requested the secretary of state, the secretary of war, the postmaster general, and the Board of Treasury to submit informal reports on the state of their departments (see GW to John Jay, 8 June 1789). The Board of Treasury submitted what were probably the most comprehensive of the departmental reports but the other departments also responded. Henry Knox submitted a series of reports during the summer on the business of his department (see Knox to GW, 15 June, 6 July and the three reports of 7 July). Reports from Ebenezer Hazard on the Post Office Department have not been found although Hazard submitted information on his department (see GW to Hazard, 3 and 17 July 1789). No reports made during the summer by John Jay on the department of foreign affairs have been located but at least some information was evidently submitted to GW (see GW to Jay, 14 July) and there are in DLC:GW a series of undated memoranda in GW’s writing on various topics relating to foreign affairs that may have been compiled from the missing reports. For a discussion of these memoranda, similar to GW’s notes on the Board of Treasury reports, see Memoranda, 1789.

The Board of Treasury had already reported briefly on 10 and 11 June, and beginning with this report to GW, they transmitted during the summer of 1789 several other voluminous accounts of the state of the treasury, particularly with regard to the foreign and domestic debt, at the time that the new government was beginning its operation. See their reports to GW, 23 July and 14 and 21 Aug. 1789. As he did with information from other departmental reports, GW prepared a digest of the information contained in the Board of Treasury’s report in order to assimilate the complex fiscal matters discussed in the report. His notes on the five Board of Treasury reports follow the numbering on the board’s reports. Arithmetical errors have not been noted either in GW’s notes or in the reports. Since information on most of the individual items in the accounts and correspondence referred to in the text is readily available in the printed and indexed journals of the Continental Congress and in the indexed collections of the Papers of the Continental Congress at the National Archives, annotation of the reports has been kept to a minimum. The various foreign loans referred to in the reports have been briefly identified.

GW’s notes on the five reports (AD, DLC:GW) are:

No. 1

The Board of Treasury was constituted by an ordinance of Congress of the 28th of May 1784—in the words following—see orde for Particulars—but

The Board was to consist of three Persons—any two of which might exercise the Powers granted to the Financier 7th of Feb. 1781.

To employ as many Clerks as they see fit—reporting them &ca.

Two thousd five hundd Dollars allowed to each Com[missione]r pr ann.

Allowance to Clerks not to exceed 500 dollars pr Ann.

Comrs to continue 3 years unless sooner revoked by Cong[res]s.

Powers of the Board—see the enumeration of them—being the same vested in the Financier by the Orde abovementiond.

Extended afterwards to sundry other matters—viz.—To superintend & examine the Conduct of all the Officers employed in the Treasury Department. Those of the 5 great Departments. The board of 3 for settling the Accts betwn the U: States & Individual States. To contract for 300 Tons of Copper Coin—To dispose of the Western Lands—To direct the issuing of Indents on the requisition of Congress. To enter into Contracts with individuals for Western Lands not less tracts than 1,000,000 ac[re]s.

Commission on the 21st Septr 1787—continued until the 10th Novr 1789.

Salaries reduced—and are as follows

Three Comrs ea: 2250 Dolr  6,750
Their Secretary 1,500
Three Clerks 450 ea. 1,350
Doorkeeper & Messenger 150
Contingent Exp[ence]s of their Off[ice]. 450
Register of the Treasury 1,200
Accountant of Do 800
Eight Clerks @ 450 3,600
Contingent Exps. averagd at 300
16,100

No. 2

Duties of the several Officers immedly annexed to the Bd of Treasy.

Secretary—to aid the Board in its administration.

Accountant—To report for the consideration of the Board forms for keepg & rendering the Public Accts—To revise accts after they have been examined & stated by the Clerks—To determine on objections against them, after hearing the clerks & person exhibiting them—and to transmit the Statement to the Board for their decision, & to issue his certificate for the balance if any be due thereon. The present duties of the Accountant consist of such as were formerly exercised by the Auditor of the Treasury—and partly of those which were heretofore invested in the Comptroller of the Treasury. The principal duties of this last Office having been vested in the Board of Treasury.

Register. his duty is to keep all the public accts—both of receipts & Expenditures—and to register all Warrants on the Treasurer or others, before the same are paid.

Treasurer’s duty is to receive & keep all monies of the U. States, & to issue them on Warrants drawn by the Board and recorded by the Register.

Inferior description of Offrs.

Commissioners of the Loan Office in the several States receive & keep the monies arising from Taxes in the several States, subject to the orders of Congress or the Board of Treasury (see resolve of Congress—30th Septr 1787)—To pay the Interest due from the U. States in the said States respectively—To make weekly returns to the Treasury of monies received, or Certificates issued for payment of Interest on the Domestic Debt—To form estimates (when required[)] of Interest falling due in the respective States; and to keep accurate & distinct Registers of the principal Sums on wch such interest is paid. To make no appropriation except for the payment of Interest without the express order of the Board of Treasury—To concern themselves in all their transactions by the Acts of Congress & the order of the Board ⟨illegible⟩ant thereto; and to transmit to the Treasury quarterly a state of their Accts for examination & allowance. The Treasurers of the respective States, specify at the foot of the quarterly acct current the payments received from the States, distinguishing the ⟨illegible⟩ amounts of the respective Sums, and the payments in actual Specie, from those in interest Certifi[cate]s.

The names and annual Salaries of the above Officers are

dollrs
Nathl Gilman—New Hampe 650
Nathl Appleton—Massats 1,500
William Ellery—Rhode Isld 600
William Imlay—Connectt 1,000
John Cochran—New Yk 1,000
James Ewing—New Jery 700
Thos Smith—Pensa. 1,500
Jas Tilton—Delawe 600
Thos Harwood—Maryld 1,000
Willm Skinner—No. Carola 1,000
John Neufville—So. Caroa 800
Richd Wylly—Georgia 600
John Hopkins—Virga 1,500
N.B. the above Salaries are in full of every Service &ca except Stationary.

N.B. the above Salaries are in full of every Service &ca except Stationary.

No. 3

Contains a Statement of the Domestic & foreign Debts of the U. States.

dollars
illegible of the first is 27,383,917
illegible of 2 yr interest thus
Registered Debt 4,598,462
Credits on the Treasury Books by order of Cong[res]s 187,578
Certificates issued by the Comrs of Army Accts deducting those wch have been cancelled & Registd 7,967,109
Certificates issued by the Comrs of the five Departments deductg as above 903,574
Certificates issued by the late State Comrs deductg &ca 3,291,156
Loan Office Certificates issued in 1781 & expressed at Specie value—deductg &c. 112,709
Loan Office Certificates old emission reduced to Specie value agreeably to the Scale made by Congs 11,097,818
Foreign Officers interest paid in France    186,427
28,344,833
Deduct for Lands sold    960,916
27,383,917

Note, on the Certificates issued betwn the 1st of Septr 1777 and 1st of March 1788—Interest is payable on the nominal value (being 3,459,000 dollars) altho’ the Specie value of the principal is only 2,538,572 dolls.

Foreign Debt.

Borrowed of the royal French Treasury on intt @ 5 pr Ct 24,000,000
In Holland, guarand by France @ 4 pr Ct 10,000,000 Dollars
Livres 34,000,000 6,296,296
Royal Spanish Treasury 5 pCt 174,011
Holland 1st Loan 5 pr Ct
2d Do 4 do
3d Do 5 pr Ct
4 Do do
5,000,000
2,000,000
1,000,000
 1,000,000
Florins 9,000,000  3,600,000
Total Dollrs 10,070,307

Arrearages of Interest, and part of principal which by the terms of the Loan became due in 1786, 7 & 8 remained unpaid on the 1st of Jany 1789—see statement for particulars.

The Farmers General of France have a claim of 846,770 Livres on the United States upon a Contrt signed B. Franklin 17th Novr 178⟨1⟩ being a Balle due on a Loan of 1,000,000 Livres the 3d June 1777 to Messrs Franklin & Dean as agents of the U. States.

A Schedule of the French and Dutch loans shewing the Periods of their Redemption, with the annual Interest, payable thereon, until their final extinction; for which provision is yet to be made.

By this there is payable in the year 1789 3,402,971 Dollrs
Interest Indents—receivable in Taxes in the Treasury of the United States by sundry resolves of Congress amounts to—in Dollars 8,733,083
Of these from the Non-compliance of some of the States there has been issued for Interest of the Domestic debt no more than Dollrs 4,364,031
Of which sum there has been received into the Treasury to the 12th of June 1789 according to the Treasy Dollrs 2,128,694

Report of the Board of Treasury 28th Septr 1787 to whom “It was referred to report a Requisition for the Currt year, &ca &ca”

Says.

That by Resolves of the 4th & 10th of Septr 1782–1,200,000 Dollrs was required of the sevl States and again urged the 12th Octr 1785—notwithstanding whh only 435,541 Dollars was pd on it to the 31st of March 1787—and that by the States of Mas[sachuset]ts Penna. Connt & Delaware.

That the 2d experimt for this purpose—viz.—27th & 28th of Apl 1784, was for 677,744 dollars altho’ the estimate on acct of Intt on the Domestic debt to the end of the yr 1783 was 1,970,760 Dollars.

The next requisition (27th Sepr 1785) by which the Sum required for interest on the Domestic Debt was—2,805,071 Dollars the States were admitted to pay in Indents of Interest certified to the end of the year 1784.

By the last requisition of 2d Augt 1786—Intt required on the Domestic debt, was—1,606,560 dollars which sum the States had a right to pay in Indents of Interest certified to the end of the year 1785.

On acct of these several requistns wch tog[ethe]r. amd to—in Dollrs 6,279,376
there was paid only to the 31st of Mar. 1787 1,003,725
leavg a balle still due, of no less 5,275,650

For this large bal[anc]e of public paper there is no reason to presume that funds in the least adequate have been provided by the sevl States.

 Of the before mentioned sum of 1,003,725
on the requisitn of 1782
 Massachusetts has pd to the 31st of Mar. 1787 192,000
 Connecticut 46,741
 Pensylvania 180,000
 Delaware 16,800
 N: York since the report 54,000
On the requisitn of 1784
 Massachusetts 30,963
 Connecticut 10,989
 New York 36,933
 Pensylvania 53,441
 Delaware 10,011
 Virginia 38,231
          1785
 New York 111,195
 Pensylvania 200,824
 Delaware 11,664
 Virginia 64,529
          1786
 Nothing from any 000
7,003,725

Hence it appears (exclusive of the extreme inequality in the payment of Int. on the Domestic Debt) there never has been a disposition at any one period, in a majority of the States, to collect Taxes; notwithstanding the easy & advantageous terms on which such payments might have been made.

After giving this Statement of facts to shew the futility of further requisitions—the Board observes, that they can devise but two modes for payment of the Intt of the Domestic Debt.

First, by an issue of a Paper medium to be receivable, as specie in all general Taxes—the

Second, by requiring of the several States, their respective quotas for the purpose above mentioned, in gold & Silver.

The first is in fact, no more than issuing of indents which has been ineffectually tried.

The State of Virginia indeed by the returns in the Office appear to have collected on the requisition of 1785 by Taxes on the 1st of Jany 1787 more than all the other States in the Union.

Disapproves the continuation of Indents as injurious to the public interest, and not beneficial to the Domestic creditor at large—gives an example why it is not so to the latter—and reasons on support of the former.

Therefore the Board advise ⟨a⟩ requisition in Specie—to facilitate the payment of whch the surplus of the former Specie requisitions, ⟨&⟩ actual paymts be applied—amounting pr estimate to—Dollars—1,200,000 to be appropriated towards paymt of intt on the domestic debt.

To these may be added the purchase of the Western Lands.

The Estimate of the monies required for the Service of the yr 1787 in the agregate amts ⟨to⟩ 3,010,798 dollars, including the 1,200,000 dollars; which being deducted the States are called on for the balance—viz.—1,809,798.

In the letter enclosing the Papers No. 3 are the followg observns.

That Congress for reasons unknown to them, issued Indents although the consequences were strongly urged in their Report of Septr 28th 1787.

The Capitol of the Domestic Debt they think may be considerably augmented.

1st From the admission of unsettled claims.

2d From the liquidated amt of unredeemed Bills of the old emission—and

3d From bal[ance]s wch may appr due from the U.S. to indivl States.

Contracts for Lands in the Western Territory have been made to the amount of 3,200,000 Dolls. and the first installments due thereon paid into the Treasy.

Two considerable foreign Claims one from the Farmr Genl of FranceLivs. 846,000

The other by Mr Beau Marchais amg the 1st of July 1783 3,309,491

They think a very strict investigation ought to be made into the Merits of these claims before they are formerly acknowledged. 1,000,000 Liv. ⟨of⟩ the aids & Subsidies granted by the Court of France previous to Feb: 1778, is not in⟨clud⟩ed in the Accts of any for⟨mer⟩ Ministers or Agents conce⟨rned⟩ in the receipt of public monies in Europe since the commencement of the War—but which the same is involved in either of the above claims cannot at this juncture be properly ascertained.

It would be, they think a des⟨agrea⟩ble object to postpone th⟨e⟩ Installments of the French loans.

On the extract of the Lette⟨rs⟩ referred to them, from Mr Jefferson, respecting propositions of a Compy of Dutch Merchts to purchase the debt due from the U.S. to France by giving 20,000,000 of Liv⟨res⟩ for the 24,000,000 they con⟨clu⟩ded the compliance with ⟨illegible⟩ as inexpedient, impolitic & not consistent with justice.

No. 4

On the Claims of Monsr de Beau Marchais, and the Farmers General against the U.S.

These require particular attention and due investigation before any settlement is ⟨illegible⟩—especially the Claim of Beau Marchais who by the Statement made—& Papers adduced may on probable grounds be supposed to have the 1,000,000 Livs. which are not accounted for by any of our Agents.

No. 5

On the Requisitions of Congress which may be divided under the 5 following heads—vizt

1st Reqns payable in money of old Emissions.
2 Reqns payable in money of new emissions.
3 Reqns payable in specific supplies.
4th Special Requisions.
5th Reqns payable in specie & Indents.
6th Reqns payable in Indents only.
The Balances due on the 4 first Articles—March 3d 1789—were
In old Emissn 39,249,515 dollrs
new Ditto 10,637,839
Specie 80,000
Specific supp. 25th Feb. 1780 5,173,008
4 Nov.—80 4,357,012
9,530,020
Those due at the sametime under the two last articles—were
In Specie & Indts 3,320,259 Dollrs
Indents only 6,508,160

For the detail of this business refer to the Papers—and for the urgent manner in which the States have been called upon to discha: their respective Ballan[c]es, see the Reports from the Treasury Board.

No. 6

On the general State of the Treasury Recd into the Treasury by the Registers Statement from the 21st of Aprl 1785 (being the commencement of the present Administration of this Board) to the 31st day of Mar. 1789

The sum of 3,236,680
Domestic disbursemts to the ab[ov]e peri[o]d 3,380,306
Anticipn on the Reven[u]e on the 31st Mar. 89 143,626
From the foreign accts of receipts & Expenditures there appears to have been received from the 21st of April 1785 to the 2d Feby 1789 by the Comrs of Loans in Holland the sum of 2,771,271.5.8 florins wch at 34¾ ninetiths pr Florin is in Dollars 1,070,018.60
and By Mr Grand Bankr to the United States at Paris 932,821.10.9 livs. wch at 5 lb. 8s. pr Doll. 172,744.83
1,242,763.53
Disbursed by both houses for payment of Interest due to France and the money lenders in Holland 1,195,011.62
In the hands of the Comrs of Loans in Holld 2d Feb. 1789 47,751.81
1,242,763.53

The last loan on Holland of a Million is not fully subscribed but supposing it to be compleated—it will not answer the demands to the first of June 1790.

No. 7

By the Statement of the intt which will be due on the Domestic debt to the 31st of Decr 1789 the sum amounts to in arrear Dollars—11,579,646.

This accumulation of interest so far exceeds what has hitherto been supposed, that the Board thought it their duty to transmit a particular estimate.

1These documents are printed as enclosures to this document.

2For the requisition of 10 Sept. 1782, levied by the Confederation Congress to raise $ 1,200,000 for the payment of the interest on the domestic debt, see JCC description begins Worthington Chauncey Ford et al., eds. Journals of the Continental Congress, 1774-1789. 34 vols. Washington, D.C., 1904–37. description ends , 23:564–71. For the requisitions of 27 and 28 April 1784, see ibid., 26:297–314.

3The resolution of 23 July 1787 provided that “all persons having unliquidated Claims against the United States pertaining to the late Commissary’s Quartermaster’s, hospital Cloathier’s or marine department shall exhibit particular abstracts of such claims to the proper commissioner appointed to settle the accounts of those departments within eight Months from the date hereof; And all persons having other unliquidated claims against the United States shall exhibit a particular abstract thereof to the Comptroller of the treasury of the United States within one year from the date hereof; And all accounts not exhibited as aforesaid shall be precluded from settlement or allowance” (ibid., 33–392).

4The motion in Congress of 7 Jan. 1783, which failed to pass, provided that “individuals in each State, who are possessed of Continental paper money, be entitled to receive from the commissioner who is or shall be appointed to settle the accounts of the several states, and of individuals therein, against the United States, a specie certificate for all such sums of the said money as they shall respectively pay into the hands of such commissioner, at the rate of one silver dollar for every [ ] continental dollars; the certificates to bear interest of six per cent. from the date, and be provided for as other public debts; but that no money shall be received or certificates granted by the said commissioners after the last day of December, 1783. That the states which have not sunk the proportions assigned to them, of the Continental money, be charged with the deficiency, or the amount of what they have not sunk, at the rate aforesaid” (ibid., 24:39).

5For the Board of Treasury’s suggestion for raising money in Europe by the sale of western lands, see its letter to GW, 14 Aug. 1789.

6The Holland loan of 1788 was negotiated in Amsterdam by the firms of Jan and Wilhem Willink, Nicholas and Jacob van Staphorst, and Nicholas Hubbard, the bankers of the United States in Holland. It was for the sum of 1,000,000 guilders for ten years at 5 percent per annum. After ten years, payment was to begin at the rate of 200,000 guilders per annum, by bills of exchange, products, or specie. The contract for the 1788 loan is in DNA:PCC, item 135.

John Adams began the negotiations for the loan, and Thomas Jefferson continued them after Adams’s return to the United States. For Jefferson’s vivid description of his difficulties, see Washington, Writings of Thomas Jefferson, description begins H. A. Washington, ed. The Writings of Thomas Jefferson: Being His Autobiography, Correspondence, Reports, Messages, Addresses, and Other Writings, Official and Private. 9 vols. New York, 1853-54. description ends 1:82–84.

7The loan to the United States from the Farmers General of France was opened in 1777, before France entered the war against Great Britain. The first foreign loan undertaken by the Continental Congress, it was negotiated in Paris by Silas Deane and signed by Deane and Franklin for the United States and by Paulze for the Farmers General on 24 Mar. 1777. The contract provided that the Farmers General would advance the United States 2,000,000 livres in return for specified shipments of tobacco. For a copy of the contract with the Farmers General, see the Board of Treasury to GW, 14 Aug. 1789, Statement C, which contains further correspondence concerning the loan.

8For Beaumarchais’s claims, see Board of Treasury to GW, 14 Aug. 1789, n.2.

10For Alexander Hamilton’s implementation of this suggestion a few days after he became secretary of the treasury, see his Conversation with Comte de Moustier, 13 Sept. 1789, in Syrett, Hamilton Papers, description begins Harold C. Syrett et al., eds. The Papers of Alexander Hamilton. 27 vols. New York, 1961–87. description ends 5:366–68.

11Next to this entry an asterisk referred GW to a note at the bottom of the page: “On the Certificates issued between the 1st September 1777 and 1st of March 1778 Interest is payable on the nominal Value.”

12There were two French loans that carried an annual interest of 5 percent: the 18,000,000–livre loan of 1782 and the 6,000,000–livre loan of 1783. Some of the funds for the loan of 1782 probably were initially viewed by both the French government and Congress as a subsidy from the French court, although the contract of 16 July 1782 specifies repayment. By the terms of its contract, 25 Feb. 1783, the French loan of 6,000,000 livres was paid to the United States by the French Treasury at the rate of 500,000 livres per month for twelve months. Repayment of the principal was scheduled to begin in January 1785, with an annual payment of 1,000,000 livres. Much of this money remained in France to pay for supplies. The contracts for both loans are in DNA:PCC, item 135.

13John Adams negotiated in 1782 the French loan of 10,000,000 livres or 5,000,000 guilders in Holland rather than in France. Largely because the credit of the United States stood so low on the Amsterdam bourse, Adams could not find bankers willing to advance the sums so desperately needed by the United States. Partly through the diplomatic negotiations of John Laurens in Paris, the French king agreed to pledge French credit as a guarantee to the States General of the Netherlands for the repayment of an American loan. The agreement specified that the loan would be retired at the rate of 4 percent per annum in ten equal payments, the first to begin in the sixth year after the date of the loan, and the payments to be completed in five years. The French king was to make the payments on the loan in Holland, and the payments of the United States were to go to the royal treasury in Paris. A copy of the contract is in DNA:PCC, item 135.

14The debt owed Spain by the United States arose out of the secret loans and subsidies provided by the Spanish court in 1781. Because of Spain’s policy of not recognizing American independence, much of the fund was advanced by the Spanish court through the agency of Gardoqui & Son. In addition to a subsidy of some 375,000 livres, the sum of $150,000 was advanced to John Jay as a loan (John Jay to Samuel Huntington, 16 Sept. 1780, CSmH; “Loans and Grants from the Royal Treasury of Spain to the U. States,” DNA:PCC, item 144). After the war the Spanish crown made no attempt to collect what had been advanced as subsidies but presented a claim to the United States for $174,011 rather than $150,000 as the total sum due for the loans advanced during the Revolution. See “By Foreign Debt incurred by the late Government . . . due to the Spanish Nation on the 21st March 1782” (DNA: RG 217, Miscellaneous Treasury Accounts, account no. 6072). Until Thomas Barclay, Congress’s agent for settling accounts in Europe, completed his investigation in the mid–1780s it was not evident that the $24,000 discrepancy represented an advance that the Spanish court made to Richard Harrison, United States agent at Cadiz, to purchase clothing (DNA: RG 39, Foreign Ledgers, Public Agents in Europe, 1776–87).

15The Holland loan of 1782 for 5,000,000 florins was negotiated by John Adams with the Dutch bankers Wilhem and Jan Willink, Nicholas and Jacob van Staphorst, and De La Lande & Fynje. The loan was to run ten years at 5 percent interest and to be redeemed by paying a fifth of the loan each year for five years. The contract is in DNA:PCC, item 135.

16The 1784 Holland loan for 2,000,000 guilders bore an interest of 4 percent per annum. On this loan, as well as on the 1782 Holland loan, the Willinks, van Staphorsts, and De La Lande & Fynje received a 4½ percent commission. Because of the difficulty in filling this loan, not only because of the United States’ poor credit but because of an unprecedented demand for funds in Amsterdam, the 1784 loan offered to subscribers chosen by lot the inducement of an added “gratification” of 4 to 10 percent of 690,000 guilders, payable at the time of redemption. The loan was to run for seventeen years and then to be redeemable in six annual payments. A copy of the contract is in DNA:PCC, item 135.

17The Holland loan of 1787 for 1,000,000 guilders, much of which was used to pay interest on the earlier Holland loans, was negotiated by John Adams with the Willinks and van Staphorsts. The loan was to run for ten years at 5 percent per annum, redeemable in five equal annual payments. The contract is in DNA:PCC, item 135.

18See note 6.

19See note 17.

20See note 7.

21For the 1784 “lottery” loan, see note 16.

22See JCC, description begins Worthington Chauncey Ford et al., eds. Journals of the Continental Congress, 1774-1789. 34 vols. Washington, D.C., 1904–37. description ends 23:545–47, 564–71, 26:311–14.

23See ibid., 29:765–71.

24See ibid., 31:459–66.

25See ibid., 33:649–58.

26See ibid., 34:433–43.

27See ibid., 33:569–85.

28See ibid., 23:545–47, 564–71.

29The resolution of 12 Oct. 1785 pointed out the necessity “for the support of the federal government, that the states should supply their quotas of Money” and urged them to complete the quotas without delay. Those states not complying should “be required to collect and pay into the public treasury, the amount of such deficiencies” either in certificates issued under the requisition of 27 Sept. 1785 or in specie (ibid., 29:823–24).

30See note 2.

31The requisition of 27 Sept. 1785 was forced by the immediate need of Congress for $3,000,000 to service the interest on the foreign and domestic debts and to provide for the government’s expenses. The requisition provided for the following apportionment: New Hampshire, $105,416, Massachusetts, $448,854, Rhode Island, $64,636, Connecticut, $264,182, New York, $256,486, New Jersey, $166,716, Pennsylvania, $410,378, Delaware, $44,886, Maryland, $283,034, Virginia, $512,974, North Carolina, $218,012, South Carolina, $192,366, and Georgia, $32,060 (JCC, description begins Worthington Chauncey Ford et al., eds. Journals of the Continental Congress, 1774-1789. 34 vols. Washington, D.C., 1904–37. description ends 29:765–71).

32See ibid., 31:459–66.

33See note 2.

34See note 2.

35See note 2.

36For the requisition of 27 Sept. 1785, see note 31. For the requisition of 2 Aug. 1786, see JCC, description begins Worthington Chauncey Ford et al., eds. Journals of the Continental Congress, 1774-1789. 34 vols. Washington, D.C., 1904–37. description ends 31:459–66.

37See below.

38The resolution of 20 Oct. 1786 specified that 1,340 noncommissioned officers and privates be raised for a term of three years and, with the troops currently in service, be incorporated into a corps of 2,040 noncommissioned officers and privates (ibid., 892).

39The requisition of 2 Aug. 1786 estimated $168,274.50 for the needs of the War Department (ibid., 462).

40See ibid., 29:765–71.

41A resolution of 8 May 1787 specified that “the board of Treasury be and hereby are authorised to dispose of the public copper on hand, either by sale or contract for the coinage of the same, as they shall judge most for the Interest of the United States” (ibid., 32:272).

42On 23 April 1782, in response to a report of the secretary at war, 23 Mar. 1782, Congress resolved that all sick and wounded soldiers who preferred to be discharged rather than transferred to the Corps of Invalids should be entitled to a pension of $5 per month “in lieu of all pay and emoluments” (ibid., 22:209–10). For the detailed provisions of the June 1785 resolution, including the provision that completely disabled commissioned officers be allotted a yearly pension equal to half their pay, see ibid., 28:435–37.

43For the debt due foreign officers who served with American forces during the Revolution, see La Radiere to GW, 26 April 1789, n.1.

44Spaces in brackets have been left blank in MS.

45The terms under which payments were credited to the states in the resolution of 6 Oct. 1779 were the same as those specified by the resolution of 22 Nov. 1777, that sums raised for the support of government “shall not be considered as the proportion of any State, but being paid into the treasury shall be placed to their respective credit, bearing an interest of six per cent. per annum.” The resolution of 6 Oct. 1779 also called for a charge of 6 percent annual interest on all deficiencies in the payment of quotas (JCC, description begins Worthington Chauncey Ford et al., eds. Journals of the Continental Congress, 1774-1789. 34 vols. Washington, D.C., 1904–37. description ends 9:954–56, 15:1147–48).

46See note 38.

47See note 14.

48See note 12.

49See note 13.

50For the Dutch loans, see notes 6, 15, 16, and 17.

51See note 7.

52See JCC, description begins Worthington Chauncey Ford et al., eds. Journals of the Continental Congress, 1774-1789. 34 vols. Washington, D.C., 1904–37. description ends 31:459–66.

53This sum involved the negotiation by Thomas Barclay of the two 1786 treaties with Morocco. See Miller, Treaties, description begins Hunter Miller, ed. Treaties and Other International Acts of the United States of America. Vol. 2, 1776-1818. Washington, D.C., 1931. description ends 2:185–227.

54See Jefferson’s letter to John Jay, 26 Sept. 1786, in Boyd, Jefferson Papers, description begins Julian P. Boyd et al., eds. The Papers of Thomas Jefferson. 40 vols. to date. Princeton, N.J., 1950–. description ends 10:405–6. Jefferson’s letter was read in Congress on 2 Feb. 1787, and evidently the portion relating to speculation in the French debt was referred to the Board of Treasury at that time. See JCC, description begins Worthington Chauncey Ford et al., eds. Journals of the Continental Congress, 1774-1789. 34 vols. Washington, D.C., 1904–37. description ends 32:12. Although dated 19 Feb. 1787, the Board of Treasury’s report on Jefferson’s letter was not read in Congress until 2 Oct. 1787, at which time Congress agreed to the report (ibid., 33:589–93). For the proposal of the Dutch bankers to purchase the American debt to France, see the enclosure in Jefferson’s letter to Jay, 12 Nov. 1786, in Boyd, Jefferson Papers, description begins Julian P. Boyd et al., eds. The Papers of Thomas Jefferson. 40 vols. to date. Princeton, N.J., 1950–. description ends 10:519–23.

55See note 12.

Index Entries