in supporting one another. He added his wish that I would interest my friends from the South, who were those most opposed to it. I answered that I had been so long absent from my country that I had lost a familiarity with it's affairs, and being but lately returned had not yet got into the train of them, that the fiscal system being out of my department I had not yet undertaken to consider & understand it, that the assumption had struck me in an unfavorable light, but still not having considered it sufficiently I had not concerned in it, but that I would revolve what he had urged in my mind. It was a real fact that the Eastern & Southern members (S. Carolina however was with the former) had got into the most extreme ill-humor with one another. This broke out on every question with the most alarming heat, the bitterest animosities seemed to be engendered, and tho' they met every day, little or nothing could be done from mutual distrust & antipathy. On considering the situation of things I thought the first step towards some conciliation of views would be to bring Mr. Madison & Col: Hamilton to a friendly discussion of the subject. I immediately wrote to each to come and dine with me the next day, mentioning that we should be alone, that the object was to find some temperament for the present fever, and that I was persuaded that men of sound heads & honest views needed nothing more than explanation and mutual understanding to enable them to unite in some measures which might enable us to get along. They came, I opened the subject to them, acknowledged that my situation had not permit me to understand it sufficiently but encouraged them to consider the thing together. They did so, it ended in Mr. Madison's acquiescence in a proposition that the question should be again brought before the house by way of amendm from the Senate, that tho' he would not vote for it, nor entirely withdraw his opposition, yet he should not be strenuous, but leave it to it's fate. It was observed, I forget by which of them, that as the pill would be a bitter one to the Southern States, something should be done to soothe them, that the removal of the seat of Government to the Patowmac was a just measure, & would probably be a popular one with them and would be a proper one to follow the assumption. It was agreed to speak to Mr. White & Mr. Lee whose districts lay on the Patowmac and to refer to them to consider how far the interests of their particular districts might be a sufficient inducement in them to yield to the assumption. This was done. Lee came into it without hesitation, Mr. White had some qualms but finally agreed. The measure came down by way of amendment from the Senate and was finally carried by the change of White's & Lee's votes. But the removal to Patowmac could not be carried unless Pennsylvania could be engaged in it. This Hamilton took on himself, and chiefly, as I understood, through the Agency of Robert Morris, obtained a vote of that State, on agreeing to an intermediate residence at Philadelphia. This is the real history of the assumption, about which many erroneous conjectures have been published. It was unjust in itself, oppressive to the States and was acquiesced in merely from a fear of discussion. While our Government was still in it's most infant state, it enabled Hamilton so to strengthen himself by corrupt services to many that he could afterwards carry his bank scheme, and every measure he proposed in defiance of all opposition, in fact it was a principal ground whereon was reared up that speculating phalanx, in & out of Congress which has since been able to give laws to change the political complexion of the Government of the U.S. QUESTIONS AS TO FRANCE.1 W. MSS. [Feb. 12, 1793.] Questions arising on the application of France for 3. millions of livres to be sent in Provisions to France. I. 1. Has the Legislature furnished the money? 2. Is that money in it's place, or has it been withdrawn for other purposes? 1 Sent to the President with the following letter: PHILADELPHIA Feb. 12. 1793. SIR,-According to the desire you expressed the other day when speaking of the application of France for 3. millions of livres, I have the honour to inclose a statement of the Questions which appear to me to enter into the consideration of that application. After putting them on paper, I saw that some developements & observations would be necessary to explain their propriety & connec II. 3. If it has, should we not take the first proper occasion of rectifying the transaction by repaying the money to those for whom the law provided it? 4. Is the application from France for an arrearage or an advance? 5. Have we money any where at command to answer this call? 6. If we have not, should we not procure it by loan under the act for borrowing 12. millions? Whether & How far we may venture to pay in advance? NOTES ON APPLICATION OF FRANCE. Feb. 12, 1793. I. The First question is Whether the application of the Executive of France for 3. millions of livres = 544,500 Doll. is to be complied with? But to be in condition to solve this, some preliminary Queries & Observations are necessary. Qu. Has the Legislature done their part, by providing the money? The Acts of 1790. Aug. 4. c. 34. §. 2. authorized the President to borrow 12. millions of dollars & appropriata them to paym' first of arrears & instalments of the foreign debt, & then to the residue of that debt. The act of 1790. Aug. 12. c. 47. authorized the Presid: to borrow 2,000,000 D.,to purchase up the public debt. It ap tion. These therefore I put down summarily on another paper, also inclosed. As they relate to the affairs of another department, some of these ideas may be wrong. You will be readily able however to correct them from the information you possess, or may procure from that department. Still, however, combining & weighing them with the ideas of others, and, most of all, trying them by your own judgment, they may contribute to enable you to form an ultimate decision of what is right; in which decision no man on earth has more confidence than he who has the honor to be with sincere and affectionate respect, Dear Sir, Your most obed & most humble servt! propriated certain surplusses of revenue to the same object, & put the application of the whole under the direction of a board with the approbation of the President. 19,550,000 florins were borrowed under the authority of the two acts, so that any part of them might be applied to either purpose. But the surplusses of revenue having sufficed for the orders of the Board for the sinking fund they never called for any part of the loans. The whole therefore of this nett produce may be considered as appropriated to the foreign debt. The Treasury Report of Jan. 3. 1793. states the application of the whole of this to it's proper purposes except (page. 3) a bal ance of which is carried on to page 5. & there stated as equal to 5.649.621-25-gd 2.304,769D-13 Part of it is stated there to have been applied to purposes to which it was not applicable by law, part transferred to the Bank for purposes not explained. We must therefore consider it as a loan by one fund to another, to be replaced afterwards. There follow however in the same page two Items, fairly chargeable on the Foreign fund. So that on the whole the account stands thus. It appears then that the Legislature has furnished & appropriated the money, and if it is not in hand it is by the act of the Executive department. The Executive (into whose hands the money is confided) has 1 The bank law authorized a temporary use of those funds to pay the subscription of the U. S. to that institution. It is not noticed here because the permission was never used. See Treasury Report, Feb. 4. pa. 7. T. J. the power, tho' not the right, to apply it contrary to it's legal appropriations. Cases may be imagined however where it would be their duty to do this. But they must be cases of extreme necessity. The paim' of interest to the Domestic creditors has been ment" as one of the causes of divert the foreign fund. But this is not an object of greater necessity than that to which it was legally appropriated. It is taking the money from our foreign creditors to pay it to the domestic ones; a preference which neither justice, gratitude nor the estimation in which these two descriptions of creditors are held in this country will justify. The payment of the Army and the daily expences of the government have been also ment as objects of withdrawing this money. These indeed are pressing objects, and might produce that degree of distressing necessity which would be a justifica". But the possibility that our domestic finances can be in such a state of distressing necessity as to oblige us to recur to borrowed money for our daily subsistence, will be doubted on the ground of the communications to the last and present session of Congress. It will be denied on the ground of the Treasury Report of Feb. 4. pa. 5. and 13. where it appears that 614,593. Dollars of this money has been drawn away, not to furnish present necessities, but to be put out of our power for 3, 6, & 9 months. It was ready money there, it was payable there; it has been drawn here, & the draughts (which are always a ready money article) have been parted with on long credit. Why? If it should appear that the Legislature has done their part in furnishing the money for the French nation, and that the Executive departments have applied it to other purposes, then it will certainly be desirable that we get back on legal ground as soon as possible, by pressing on the Domestic funds and availing ourselves of any proper opportunity which may be furnished of replacing the money to the foreign creditors. Does the pres ent application from the French government furnish such an occasion? If it be an arrearage, it does? If it be an advance, we shall be more free to calculate our own necessities against theirs. The next question then is Are we in arrears for instalments or interest with France ? VOL. VI-1S |