CHAPTER XII—FRAMING A GOVERNMENT

Hopes as to the Public Credit (1787–1790)

SENATOR PAINE WINGATE

A. FROM JEREMIAH LIBBEY

PORTSMOUTH, October 24th, 1787.

. . . THE Constitution as far as I have had oppertunity of hearing is very generally liked in this State. How some of our leading men in the State (not in this town) approve of it I have not heard. Our Court was adjourned to next January; but many persons in this town have expected the President would call them together immediately on the occasion. However no proclamation appears for that purpose, which makes some rather severe on the P.; but I have never heard how he likes it. On the whole, I am of opinion it will be adopted by this State. I was a few days past talking with Major Hale on the subject. He says he likes it much, but our General Court will never come into it. I ask’d him the reason. "Pho," says he, "do you know, if they adopt it, it will make them honest, & put it out of their power to cheat every body by tender laws & paper money. No, no, that will never do." Pretty severe, I think. It is now very certain that we shall not take up the matter untill you have acted on it; & if you do right, I hope we shall follow your example. If, on the contrary, I hope we shall have wisdom & fortitude to act in a becoming manner, & not let any of your bad conduct, if you have any, influence us to follow your examples in that respect.

Mr Wendell Informs me that Continental security[s] were sold last week for 2/6 on the £, with interest due on them. How they will sell now he does not know. He says he purchases State notes for 3/ on the £, with interest due on them, & pays for them in anything he has. I have done by yours as I should with my own; let it lay, thinking it better than to dispose of it at that rate. Should the new Constitution take place, & that it will I feel quite sanguine, as you observe, our national character will then rise, & the securitys of course. . . .

B. FROM PAINE WINGATE

NEW YORK, Jan. 18, 1790.

. . . WITH respect to public securities I will gladly give you any intelligence in my power . . . but I can say nothing at present but mere conjecture. Those securities have not sold for less than 8/3d on the pound in New York since I came here; and I am told that now they are sold from 9/ to 10/, and that the indents are about 7/. The Secretary of the Treasury has reported a part of his plan of finance, that the domestic debt should be funded anew to voluntary subscribers at 4 Pr cent interest & include equally both principle & interest. This it is supposed would appreciate the securities considerably. I think it is doubtful whether the interest will be more than 3 Pr cent, but a certain revenue will be appropriated for the punctual payment of whatever shall be promised. At this rate of interest, it is the opinion of those who are good judges that the securities will sell for about ten shillings on the pound. I believe that there is no great danger of their being much lower, & they may possibly be something higher. It will be yet a considerable time before this business will be compleated in Congress respecting the new funds, & in the mean time there will be various arts of speculators practiced on one another, as well as on the less knowing. If I was a holder of public securities (which I am not) I should not sell until I knew more of the probable issue of the present plans; but perhaps it may be as advantag[e]ous to those who do not choose to be holders in the funds to sell soon after the funds are established as at any after time. This is only my mere opinion, in which I am as liable to be deceived as any body. I am not able to give you any tollerable account of Colo Hamilton’s plans, & will not attempt it. By the last of this week, it is expected, the pamphlet will be published. . . .

[February 5.] . . . Since I wrote to you last, the current price of securities has rather dwindled. I am told they now sell for about 7/6d

on the pound. This may have arisen from other causes than meerly the want of confidence in the public faith. It will be a considerable time before Congress can decide on this perplexing and important business; but next Monday it will be taken up by the House of Representatives, and perhaps some conjecture may be formed from the disposition which will then appear. It appears to me that matters have gone so far wrong that it is not an easy thing to find the right way out, and that men of the most upright intentions, who would wish to unite justice with policy, may judge & act very differently. I rather think, on the whole, that the public creditors will receive as good as half the nominal value of their securities, if not more, & that there can be no discrimination between the original holders & the speculators, however deserving the one may be more than the other. Very little business has yet been compleated in Congress. We go slow fast enough.

(Massachusetts Historical Society, Collections, Sixth Series, IV, Boston, 1891), III, 341–459 passim.