Report on Edmond Genet’s Debt Proposal
Treasy Departmt Novemr 23. 1793.
The Secretary of the Treasury upon two Letters from the Minister plenipotentiary of France to the Secy of State severally bearing date the 11. & 14 of November inst. respectfully reports to the President of the United States as follows.1
1. The object of these Letters is to procure an engagement that the bills which the Minister may draw upon the sums, which according to the terms of the Contracts respecting the French debt would fall due in the years 1794 and 1795, shall be accepted on the part of the United States, payable at the periods stipulated for the payments of those sums respectively.2
The following considerations are submitted as militating against the proposed arrangement.
I. According to the view entertained at the Treasury of the situation of the account between France and the U. States, adjusting equitably the question of depreciation, there have already been anticipated payments to France equal or nearly equal to the sums falling due in the course of the year 1794.
II. The provision by law for discharging the principal of the French debt contemplates only loans.3 Of those, which have been hitherto made, the sum unexpended is not more than commensurate with a payment which is to be made on the first of June next upon account of the Capital of the Dutch Debt.4 It is possible that a fund for this payment may be derived from another loan; but it is known to the President that from advices recently received full reliance cannot be placed on this resource; owing to the influence of the present state of European Affairs upon the measures of the U. States for borrowing.5 It need not be observed that a failure in making the payment referred to would be ruinous to the credit of the U. States.
The acceptance of the bills of the Minister of France would virtually pledge the only fund, of which there is at present a certainty, for accomplishing that payment. And as this is a matter of strict obligation, directly affecting the public credit, it would not appear adviseable to engage that fund for a different object, which if the ideas of the Treasury are right, with regard to the state of our account with France, does not stand upon a similar footing.
It would be manifestly unsafe to presume upon contingencies, or to enter into engagements to be executed at distant periods when the means of execution are uncertain.
But as there appears to be a difference of opinion between the Minister of France and the Treasury with regard to the state of the account between the two countries, it is necessary that something on this head should be ascertained. With this view the Secretary of the Treasury will proceed without delay to take arrangements for the adjustment of the account.6
Secy of the Treasy
LB, DLC:GW; LB, DNA: RG 59, Domestic Letters; Copy, DLC: Jefferson Papers; Copy, FrPMAE: Correspondence Politique, États-Unis, Supplement, vol. 20; Copy (French translation), FrPMAE: Correspondence Politique, États-Unis, vol. 39. Jefferson enclosed this report in his letter to Genet of 24 Nov., and it was submitted to Congress with GW’s message of 5 Dec. and published by order of the House (A Message of the President of the United States to Congress Relative to France and Great-Britain. Delivered December 5, 1793. With the Papers therein Referred to . . . [Philadelphia, 1793], 97–98).
1. For Edmond Genet’s letter to Thomas Jefferson of 11 Nov., and his fourth letter to Jefferson of 14 Nov., see 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 , 27:347–48, 364–65 (translations of both letters are in ASP, Foreign Relations description begins Walter Lowrie et al., eds. American State Papers. Documents, Legislative and Executive, of the Congress of the United States. 38 vols. Washington, D.C., Gales and Seaton, 1832–61. description ends , 1:185–86).
2. For the contract for payment of the French debt, 16 July 1782, 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 , 48–58.
3. See section 2 of “An Act making provision for the [payment of the] Debt of the United States,” 4 Aug. 1790 (Stat. description begins Richard Peters, ed. The Public Statutes at Large of the United States of America, from the Organization of the Government in 1789, to March 3, 1845 . . .. 8 vols. Boston, 1845-67. description ends , 1:138–44).
4. The Dutch loan of five million guilders approved by Congress on 14 Sept. 1782 (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 , 23:575–80) was to be paid in five installments commencing in June 1793. The first of these payments had been met by a new loan of two million guilders, and the second, due on 1 June 1794, was also finally met with a new loan (see Wilhem and Jan Willink, Nicholaas and Jacob Van Staphorst, and Nicholas Hubbard to Hamilton, 1 May and 27 Dec. 1793, Hamilton Papers description begins Harold C. Syrett et al., eds. The Papers of Alexander Hamilton. 27 vols. New York, 1961–87. description ends , 14:364–67, 15:593–96).
5. The Dutch bankers Wilhem and Jan Willink, Nicholaas and Jacob Van Staphorst, and Nicholas Hubbard advised in a letter of 1 July received by Hamilton in late October: “The demands for money by the European belligerant Powers will continue to be so great and pressing, and force them to such sacrifices in the Charges, as will render highly improbable the success for a long time to come, of Loans for ye. U.S. under five pr. Ct. interest” (Hamilton Papers description begins Harold C. Syrett et al., eds. The Papers of Alexander Hamilton. 27 vols. New York, 1961–87. description ends , 15:47–49).
6. Hamilton wrote Genet on 26 Nov., “It appears indespensable to adjust disagreeing Ideas with regard to the State of the Account between France and the UStates. . . . With this view I have instructed the Accounting Officers of the Treasury to proceed in the business as soon as there shall appear some person on your behalf to cooperate in it” (Hamilton Papers description begins Harold C. Syrett et al., eds. The Papers of Alexander Hamilton. 27 vols. New York, 1961–87. description ends , 15:411).