Alexander Hamilton to John Adams, February 5, 1793
Treasury Department February 5. 1793.
Sir.
In pursuance of the first part of the order of the Senate of the 23 d of January past, I have the honor to send herewith sundry statements marked A, AB, B. Ba, D, E, F, 1 and I beg the permission of the Senate to add the Copy of a letter dated yesterday, which served to transmit duplicates of the same documents to the House of Representatives; and which contains some explanations of them; a repetition of which here will be thereby rendered unnecessary. The document C referred to in that letter was also sent to the House of Representatives, but being of considerable length, a duplicate is not yet ready; and I did not think it advisable to detain the other papers ’till it was ready. 2
The documents now transmitted will answer the whole of the enquiry contained in the first part of the order above referred to, except what regards a distribution of the expenditures under each head of appropriation; which is in preparation and will be forwarded as soon as it can be ready.
The situation in which I am placed renders further delay absolutely necessary to the fulfilment of the second part of the Order.
There is a point in my letter of the 16 th of January to the Senate concerning which some explanation is requisite. 3 I stated as one motive to the joint negotiation of the loans, under both Acts, “an intimation from our Bankers in Holland that a distinction might prove an embarrassment, being a novelty, the reason of which would not be obvious to the money lenders.” This was done from memory, without recurrence to documents, and in a degree of hurry occasioned by my anxiety for the speedy passing of the Appropriation Bill, and upon a revision proves to be not accurate. The mistake arose in the following manner. My original idea was to maintain a separation between the two Acts. This will appear from my letter of the 28th of August 1790 to our Bankers in which I express a desire that they would endeavour to place part of the first loan upon one Act and another part upon
the other Act. But they did not carry this idea into execution for the reason assigned in their answer, now before the Senate, which is that the subdivision proposed would under the circumstances of the case tend to excite speculations and doubts among the money lenders.
But prior to the receipt of their answer I had made a further enquiry and had reflected more on the subject. The result of my enquiry was that the money lenders having been accustomed to lend on the general Credit of the Governments borrowing, with a sort of general pledge of its revenues and resources, the attempt to bottom a loan upon any particular law, might, as a novelty, occasion some hesitation and embarrassment among them; especially as they are known to be a description of men much influenced by habit and precedent; and the conclusions from more full reflection were that the distinguishing of the loans with reference to each act, might not only embarrass the business, in the first stages of negotiation, but might interfere with an application of the proceeds of the loans in the most convenient and beneficial manner, according to circumstances.
On these considerations I abandoned my original intention, and in my first instruction to M r Short was silent on the point.
These different positions of the subject in the mind, at different times, and what actually took place with regard to the first loan, produced some confusion in the recollection of facts, and led me to assign as a cause what had been only a collateral circumstance, and to ascribe to the Bankers intimations, or rather information, which I had received from other quarters.
I submit this explanation of the matter to the candor of the Senate. and have the honor to be, with perfect respect, / Sir, Your Most obed t Servant.
Alexander Hamilton
PS I have the honor to return the original Bank Books and accounts which were withdrawn respecting my request that as soon as the use for them shall cease they may be returned.