University of Virginia Library

2026. DEBT (French), Proposition of Genet.—

I cannot but think that to decline the
propositions [122] of M. Genet on the subject of
our debt, without assigning any reason at all,
would have a very dry and unpleasant aspect indeed.
We are then to examine what are our
good reasons for the refusal, which of them
may be spoken out, and which may not. 1.
Want of confidence in the continuance of the
present form of government, and consequently
that advances to them might commit us with
their successors. This cannot be spoken out.
2. Since they propose to take the debt in produce,
it would be better for us that it should
be done in moderate masses yearly, than all
in one year. This cannot be professed. 3.
When M. de Calonne was Minister of Finance,
a Dutch company proposed to buy up the whole
of our debt, by dividing it into actions or shares.
I think M. Claviere, now Minister of Finance,
was their agent. It was observed to M. de
Calonne, that to create such a mass of American
paper, divide it into shares, and let them deluge
the market, would depreciate the rest of our
paper, and our credit in general; that the credit
of a nation was a delicate and important thing,
and should not be risked on such an operation.
M. de Calonne, sensible of the injury of the operation
to us, declined it. In May, 1791, there
came, through Mr. Otto, a similar proposition
from Schweizer, Jeanneret & Co. We had a
communication on the subject from Mr. Short,
urging this same reason strongly. It was referred
to the Secretary of the Treasury, who,
in a letter to yourself, assigned the reasons
against it, and these were communicated to
Mr. Otto, who acquiesced in them. This objection,
then, having been sufficient to decline
the proposition twice before, and having been
urged to the two preceding forms of government
(the ancient and that of 1791), will not be
considered by them as founded in objections to
the present form. 4. The law allows the whole
debt to be paid only on condition it can be done
on terms advantageous to the United States.
The minister foresees, this objection, and thinks
he answers it by observing the advantage which
the payment in produce will occasion. It would
be easy to show that this was not the sort of advantage
the Legislature meant, but a lower rate
of interest. 5. I cannot but suppose that the
Secretary of the Treasury * * * would, on
examination, be able to derive practical objections
from them. We pay to France but five
per cent. The people of this country would
never subscribe their money for less than six.
If, to remedy this, obligations at less than five
per cent. were offered, and accepted by M.
Genet, he must part with them immediately,
at a considerable discount, to indemnify the loss

of the one per cent., and at still greater dis-count
to bring them down to par with our pres-ent
six per cent., so that the operation would
be equally disgraceful to us and losing to them,
&c., &c. I think it very material myself to keep
alive the friendly sentiments of that country,
so far as can be done without risking war or
double payment. If the instalments falling due
this year can be advanced, without incurring
those dangers, I should be for doing it. We
now see by the declaration of the Prince of
Saxe Coburg, on the part of Austria and Prus-sia,
that the ultimate point they desire is to re-store
the constitution of 1791. Were this even
to be done before the pay days of this year,
there is no doubt in my mind but that that gov-ernment
(as republican as the present, except
in the form of its Executive) would confirm an
advance so moderate in sum and time. I
am sure the nation of France would never suf-fer
their government to go to war with us for
such a bagatelle, and the more surely if that
bagatelle shall have been granted by us so as
to please and not displease the nation; so as
to keep their affections engaged on our side.
So that I should have no fear in advancing the
instalments of this year at epochs convenient
to the Treasury. But at any rate I should be
for assigning reasons for not changing the form
of the debt.—
To President Washington. Washington ed. iii, 575. Ford ed., vi, 287.
(June. 1793)