TO ROBERT MORRIS.

My Dear Friend,

London, July 31st, 1790.

Your letters of the fourth and sixteenth of June give me some intelligence respecting public affairs, and also of your family and my other friends. Accept my thanks for that attention, and make to them my affectionate remembrances.

Your bill for establishing foreign intercourse has, it seems, been lost by a dispute between the two Houses. I cannot say that I am exactly of opinion with either in that dispute. Some discretion should be left to the Executive on this subject, most clearly; but, on the other hand, I do not think it consistent with the genius of our constitution to leave a very wide space for the exercise of discretionary powers. While the present Magistrate exists, all would go right; but his successors might much misuse the authority; and although I have not the childish apprehension of tyranny from that quarter, yet I think a dependency of the diplomatic servants might be rendered rather too great upon the chief of the Republic, and thence, perhaps, men might get into, and continue in those offices, who are not duly fitted for them.

I think, also, that it would have been well for the representatives to adopt an amendment proposed to them, for giving one year's salary as an establishment to their Minister. I do not think that a gentleman can be suitably placed, either in London or Paris, for less than two thousand five hundred pounds sterling, and I suppose nearly as great must be incurred at the Hague, or Lisbon, or Madrid. There are not many of our countrymen, suitable for the office, whom it would suit to make such an advance upon it, more especially as they might be recalled in one or two years, or be obliged by their own affairs to return within that period, and then the whole sum, almost, would be lost.

I am not surprised to find that the idea you mention prevails, of having a Minister at only one court; but, sooner or

later, we must act like other people. That we may keep an officer of higher rank, or superior emolument, at Paris, is clear; perhaps we ought to do so; but we must take care, that, in marking our regard to one power, we do not insult another. Kings are proud, and if they were not, nations are. Our real interest, therefore, requires that we pay the due respect to others. In fact, this is required also, by a due respect for ourselves. I shall readily acknowledge, that these national attentions, like the exterior ceremonies of good breeding, do in fact mean nothing; but, in both cases, the omission means a great deal. There is also in our situation a strong reason for having diplomatic agents abroad, although, from our situation, we should endeavor to be as little connected as possible with the politics of this hemisphere. But the greater powers of Europe have dominions in our neighborhood, and the incidents, which must naturally arise from that neighborhood, will require frequent explanations, to prevent serious quarrels. I might go farther, were I to consider America as a commercial nation; but I stop short, from the recollection that many truths, now as familiar as household conversation, were once treated as the visionary dreamings of a wild imagination; and no man has oftener than I have experienced that fate.

I must, however, give utterence to one or two sentiments on another political topic. Indeed, that was my object in beginning this letter, though I was led into the other by replying to yours in the order of their dates. You acknowledge the receipt of two letters from me, dated the 8th of May, 1789, but you have never said a word to me of the plan of finance, which was enclosed in one of them, from whence I conjecture that it was not well relished. I have seen much of the debates on the subject of our debts and finances, and observed with concern, that the Legislature have been divided by two opinions, against both of which solid arguments have been adduced. Truth, I still think, lies in the middle.

To assume the payment of what the States owe, merely because they owe it, seems to my capacity not more rational,

than to assume the debts of corporations, or of individuals. To establish a quota, or proportion of the whole, or of any part of the public debt upon different tracts of that great territory, which composes the United States, either according to past or present population, seems to me not consistent with justice. I say the whole or any part, for I cannot help viewing objects in a collective capacity, and judging of them upon principles. What is the debt? The public debt? The answer is centained in a definition of the words Sums due by United America. What are the sums? The value of monies advanced, services rendered, and supplies furnished to America, by any individuals, or bodies corporate or politic. By whom should this debt be paid? By existing individuals, or particular corporations, or communities? No. It is to be paid by the citizens of America at large; that is to say, by their annual contributions in proportion, as nearly as may be, to their wealth. He who purchases an acre of land in America takes it, like other mortgaged premises, subject to its just proportion of the debt; and he who, without purchase, becomes an inhabitant of America, becomes thereby liable, during his continuance, to pay his annual contribution in common with his fellow citizens.

Take any different doctrine, and try its truth by pushing it to the extreme. Suppose the whole debt were divided, by any ratio whatever, among the different States. Rhode Island and New York would each have their fixed proportion. But in twenty years the population of New York must be more than double to what it is, consequently each man's share of the burthen would be but one half; whereas in Rhode Island it must continue the same, consequently the taxes there must be double, consequently the inducement to quit it great, consequently a decrease of inhabitants, and thereby an increase of the burthens; while, from the same depopulation, the value of lands must be diminished.

Now this is not right. And that which is not right cannot last. Justice is the great support of nations. What then does

justice require? The answer, it seems to me, is clear. Pay to individuals what is due to individuals, and pay to corporations and communities what is due to them. If the individual or community be in debt, or not in debt, to others, is a circumstance which the public, the union, America, in short, has nothing to do with.

Having established thus the totality of the public debt, proceed next to make a provision for the payment. And, under this chapter, I must own that I differ from many of my worthy friends. I firmly believe, that the payment of the whole, with the full interest, is the best mode. First, I believe so, because it is right, and that is with me a sufficient reason; but, as in other cases so here, honesty is the best policy. As to the idea, that the people cannot pay it, I look upon that not only to be weak, but a contradiction of terms. The people are not able to pay-what? What they owe to themselves? They are not able to bear the burthen-what burthen? That which is already on their shoulders. But if they are not able to bear it, how are they to be relieved? By leaving them totally, or partially, as you found them.

Payment of the full interest is most economical; and here, one word on the speculations of foreigners. So long as those who hold the debt are in want of money, so long will they sell it for what they can get. The more valuable you render it, the more it will sell for; consequently, so far as foreigners are concerned, you will benefit by the difference. But the speculations of foreigners will alone enable you to reduce the interest (in other words the debt) with advantage. When it has been established for a little while, it will at six per cent get above par, and of course the holders may be called on to reduce the interest, or to receive payment. The natives would incline to the latter; but foreigners would purchase of them to secure to themselves even the lower interest, and thus things would be brought to their natural level, and thereby the interest of money in America would be lowered, a thing devoutly to be wished for, but not to be effected by legislative authority.

The other mode (pardon the expression) is what the French call eating your corn in the blade. Let both be brought to the test of plain arithmetic, and admit that in any given period, five years, if you please, the interest would of itself get down to four per cent, which seems to be the basis adopted, and which, therefore, I shall not dispute. Take any sum you please of foreign money, appropriated by the European capitalists to speculation in our funds. I observe, by the bye, that this sum is from the nature of things fixed to some certain amount, although from the nature of things it is impossible to ascertain that amount. The reasoning, however, will be equally clear in any hypothetic statement. We will therefore suppose six millions of dollars. One other position remains to be established, which may perhaps admit of dispute, but you will find it on inquiry to be a fact, viz. that the European capitalists regulate their purchases by the amount of the interest to be received. Suppose the rate they fix on to be ten per cent for their investment, they must then purchase at sixty per cent, if the interest of our debt be six per cent, and, consequently, the amount purchased will be ten millions. Whereas, if the interest be only four per cent, they will give but forty per cent, and, of course, the sum purchased will be fifteen millions. The difference of five millions is so much lost by the bargain to America, and as in the admitted case, interest is within five years to fall by natural causes to four per cent, which it certainly will, if we do what is right, the foreigners would then receive a revenue of only four hundred thousand from their capital invested, whereas, in the case of immediate reduction, they would receive six hundred thousand, not to mention the additional capital. Indeed, with respect to the capital, it is a thing of no consequence; for whenever the debt is properly funded, we shall find people as willing to accommodate us with money, as we can be to take it from them.

On the subject of public debts in general, I believe it may be taken as a maxim, that, whether foreign or domestic, the