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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 honour."*
This subject was resumed in a letter from Jefferson to Jay of the twelfth of November following.t He wrote: “ In a letter which I had the honour of writing you on the twenty-sixth December, I informed you that a Dutch company were making propositions to the minister of France here, to purchase at a discount the debt due from the United States to this country. I have lately procured a copy of their memoir, which I now enclose. Should congress think this subject worthy their attention, they have no time to lose, as the necessities of the minister, which alone have made him to listen to this proposition, may force him to a speedy conclusion."
The former of these letters was referred to the board of Treasury, who on the second of October of the following year made a report ; which, after reciting the previous extracts of the letter of Jefferson, contains comments full of meaning:
“ 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, liberties, and property of their several citizens, who had solemnly pledged themselves for its redemption ; and that, therefore, the honour of the United States cannot be impeached, for having authorizea their minister at the court of France to enter into a formal convention, acknowledging the amount of the said debt, and stipulating for the reimbursement of the principal and interest due thereon.
* 4 S. J. 386.
† 3 D. C. 175.
“ 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 persons 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 loans 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 negotiation. 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 this negotiation (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 indispensably necessary.
“ The board beg leave further to observe, that although 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 moneys 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 honour 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 instalments of the principal, which would from time to time become due. How far the idea of transferring the discontents which may prevail in the French court, for the want of the punctual payment of interest, to the breast 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 negotiation 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 moneys 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 dependence for support is frequently on the interest of the monėys loaned, the board presume that the proposed negotiation cannot be considered at the present juncture, in any point of view, either as 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 negotiation which may be proposed for transferring the debt due from the United States, to any state, or company of individuals, who may be disposed to purchase the same."
* Jefferson wrote to Carmichael at Madrid, June 14, 1787 :" New.York still refuses to pass the impost in any form, and were she to pass it, Pennsylvania will not uncouple it from the supplementary funds. These two states and Virginia, are the only ones, my letters say, which have paid any thing into the continental treasury for a twelvemonth past.”
So jealous were congress of the injury which this proposition might inflict on the national character, that on the day on which this report is dated, they instantly passed an act instructing Jefferson not to promote any negotiation for transferring the debt due to France from the United States. Could he have incurred a severer censure ?
Thus the national honour was saved, but the lure had succeeded. In prosecution of the project, a letter was addressed by Jefferson to Dumas, I to ascertain its practicability ; whose reply evinced a preference of a purchase for a sum less than its face, to a loan for the whole amount, and urged prompt action, stating that the sacrifice on the part of France, would be very small. An arret was accordingly framed and submitted to Calonne. That minister, grasping at such a prospect of relief from his financial difficulties, soon after this purchase was suggested, addressed a letter to Jefferson, giving the assurance that the monopolies on particular articles would not be renewed, and that the duties on most of the imports, the growth of the United States, in French or American vessels, were “ suppressed."'S The execution of this arrangement was,
* 3 D. C. 183.
+ 3 D. C. 289. 1 Dumas had a pension from France, revertible to his daughter.
$ 3 Dip. Cor. 163.-Oct. 22, 1786.—This letter also states, that as Virginia had ordered arms for her militia from France, the duties and prohibition of them should be abolished. Similar supplies had been furnished by France to her during the war, which gave rise to questions in the settlement of the accounts. A more serious difficulty grew out of an act of that state, passed pending Jefferson's negotiation about the debt, giving a preference to French
however, suspended, not improbably in consequence of the rejection by congress of the proposed transfer of the debt. But the disturbances in Holland, and the hostile appearances in Europe, notwithstanding a temporary pacification, ultimately induced the issuing of arrets, enlarging in some particulars, and abridging in others, the former arrangement.
One topic of discussion yet remained. It has been previously mentioned that the treaty with France provided for the mutual appointment of consuls, under a convention to be framed between the respective governments. This subject was not acted upon until July, seventeen hundred and eighty-one ; immediately after the resolutions, submitting the terms of a treaty with Great Britain, had been passed. A memoir was at that time presented by La Luzerne, containing a draft of a consular convention, prepared at Paris.
It was in its essential features approved by congress the following January, with one material difference. The French plan proposed the presentation, by their consuls, of their commissions to the respective states, which were to grant them their exequaturs. The American draft required that the consuls should, “ in the first instance," present their commissions to congress, to be recognised by them by a public act, and then to have validity in the states. This plan was sent to Franklin, with instructions to exercise his discretion as to the words or arrangement of it, but to confine himself in all important respects to its substance.
brandies. The minister of the Netherlands presented a remonstrance against this preference, as a breach of treaty. In this treaty, Adams had omitted an important provision, securing compensation for privileges; but the United States considered this as a gratuitous favour. The injury was acknowledged, and resolutions were adopted by congress, urging Virginia to repeal the act, founded on a report from the department of foreign affairs, censuring the granting of favours by any state.—4 S. J. 401.