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So that instead of an additional loan being necessary, the monies already borrowed will suffice for all the purposes to which they can be legally applied to the end of 1794, and leave a surplus of $387,474 64 to cover charges and errors. And as, on account of the unsettled state of the French government, it is not proposed to pay in advance, or but little so, any further sum would be lying at a dead interest and risk. Perhaps it might be said that new monies must be borrowed for the current domestic service of the year. To this I should answer, that no law has authorized the opening of a loan for this purpose.

If it should be said that the monies heretofore borrowed are so far put out of our power that we cannot command them before an instalment will be due, I should answer, that certainly I would rather borrow than fail in a payment; but if borrowing will secure a payment in time, the two millions of florins now borrowing are sufficient to secure it. If we cannot get this sum in time, then we cannot get an additional sum in time.

The above account might be stated in another way, which might, perhaps, be more satisfactory, to wit:

Dr.
The trust for loans.
To nett amount of loans to June 1, 1792. 18,678,000 florins,

at 99 florins to $10

$7,515,912

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Florins By charges on remittances to France

10,073 1 By reimbursement to Spain

680,000 By interest paid to foreign officers .

105,000

795,073 l= - $321,239 46 By principal paid to foreign officers

191,316 90 By payments to France .

10,073,043 81,009,918 54

Livres, By ditto to St. Domingo

4,000,000 726,000 By ditto to do.

3,000,000 544,500 By do. to Mr. Ternant [I state this by memory] 24,000 4,356 Balance in hand to be carried to new debit

1,688,581 10

$7,545,912 00

Dr.
The trust for loans.
To balance as per contra

$1,688,581 10 To two millions of florins, new loan, when effected

808,080 $2,496,601 10

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By this statement, it would seem as if all the payments to France, hitherto made and ordered, would not acquit the year 1792. So that we have never yet been clear of arrears to her.

The amount of the French debt is stated according to the convention, and the interest is calculated accordingly. Interest on the ten million loan is known to have been paid for the years 1784, 1785, and is therefore deducted. It is not known whether it was paid on the same loan for the years 1786–7–8–9, previous to the payment of December 3, 1790, or whether it was included in that payment; therefore this is not deducted. But if, in fact, it was paid before that day, it will then have lessened the debt so much, to wit, 400,000 livres a year, for four years, making 1,600,000 florins, equal to $290,400, which sum would put us in advance near half of the instalments of 1793. Note,- livres are estimated at 1 cents, proposed by the Secretary of the Treasury to the French ministry as the par of the metals, to be the rate of conversion.

This uncertainty with respect to the true state of our account with France, and the difference of the result from what has been understood, shows that the gentlemen who are to give opinions on this subject, must do it in the dark, and suggests to the President the propriety of having an exact statement of the account with France communicated to them, as the ground on which they are to give opinions. It will probably be material in that about to be given on the late application of Mr. Genet, on which the Secretary of the Treasury is preparing a report.

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XXXIX. - Opinion relative to the policy of a new loan.

June 17, 1793. I cannot see my way clear in the case which the President has been pleased to ask my opinion, but by recurring to these leading questions :

Of the $7,898,999 88 borrowed, or rather of the $7,545,912, nett proceeds thereof, how much has been applied to the payment of the foreign, and purchase of the general debt ?

To the balance thereof, which should be on hand, and the two millions of florins now borrowing, is any and what addition necessary, for the same objects, for the years 1793, 1794 ?

The statement furnished by the Secretary of the Treasury does not answer these questions. It only shows what has been done with somewhat less than three millions out of near eight millions of dollars which have been borrowed, and in so doing it takes credit for two sums which are not to come out of this sum, and therefore not to be left in the account. They are the following:

1. A sum of $284,901 89 expended in purchases of the public debt. In the general report of the trustees of the sinking fund, made to Congress the 23d of February last, and printed, it appears, page 29, that the whole amount of monies laid out by them was $1,302,407 64, from which were to be deducted, as is mentioned in the note there subjoined, the purchases made out of the interest fund (then about $50,000 as well as I recollect). Call the sum paid then $1,252,407 64. By the Treasury report, p. 38, (new edition,) it appears that the surplus of domestic revenue to the end of 1790, appropriated to this object, was $1,374,656 40, and p. 34, that the monies drawn from Europe on account of the foreign loans, were not the instrument of these purchases; and in some part, to which I am not able just now to turn, I recollect pretty certainly that it is said these purchases were actually carried to account, as was proper, against the domestic surplus, consequently they are not to be allowed in the foreign account also. Or if allowed in this, the sum will then

be due from the surplus account, and so must lessen the sum to be borrowed for the sinking fund, which amounts to the same.

2. The 1st instalment due to the bank $200,000. Though the first payment of the subscription of the United States to the bank might have been made, in the first instant, out of the foreign monies to be immediately repaid to them by the money borrowed of the bank, yet this useless formality was avoided, and it was a mere operation of the pen on paper, without the displacement of a single dollar. See reports p. 12. And, in any event, the final reimbursement was never to be made out of the foreign fund, which was appropriated solely to the payment of the foreign, and purchase of the general debt.

These two sums, therefore, of $284,901 89 and $200,000 are to be added to the balance of $575,484 28 subject to future disposition, and will make $1,050,386 17 actually here, and still to be applied to the proper appropriation.

However, this account, as before observed, being only of a part of the monies borrowed, no judgment can be formed from it of the expediency of borrowing more ; nor should I have stopped to make a criticism on it, but to show why no such sums as the two above mentioned, were inserted in the general account sketched for the President, June 5. I must add that the

I miscellaneous sum of $19,400 in this account, is probably covered by some other articles of that as far as it is chargeable on this fund ; because that account, under one form or another, takes up all the articles chargeable on this fund which had appeared in the printed reports.

I must, therefore, proceed to renew my statement of June 5, inserting therein the 1st instalment of the Dutch loan of $ 104,040 40 payable this month, which not having been mentioned in any of the reports heretofore published, was not inserted in my statement. I will add a like sum for the year 1794, because I think we should now prepare for the whole of that year. · As the Secretary of the Treasury does not seem to contemplate the furnishing any fixed sum for the sinking fund, I shall leave that article out of the account. The President can easily add to

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its result any sum he may decide to have furnished to that fund. The account, so corrected, will stand thus:

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So that it appears there would be a balance in the hands of this trust, at the close of 1794, of $499,393 84, were no monies to be furnished in the meantime to the sinking fund ; but should the President determine to furnish that with the $900,000 proposed in my statement of June 5, then a loan would be necessary for about $100,000, say in near round numbers, 1,000,000 of guilders, in addition to the 2,000,000 now borrowing. I am,

individually, of opinion that that sum ought to be furnished to the sinking fund, and consequently that an additional loan, to this extent, should be made, considering the subject in a legal point of view only.

The reasons in favor of the extension are,

The apprehension of the extension of our war to other Indian nations, and perhaps to Europe itself.

The disability this might produce to borrow at all, [this is, in my judgment, a weighty consideration.]

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