PARIS, January 5, 1787.
DEAR SIR,--I am desired to forward to you the enclosed queries, and to
ask the favor of you to give such an answer to them, as may not give
you too much trouble. Those which stand foremost on the paper, can be
addressed only to your complaisance; but the last may possibly be
interesting to your department, and to the United States. I mean those
which suggest the possibility of borrowing money in Europe, the
principal of which shall be ultimately payable in land, and in the
meantime a good interest. You know best whether the suggestion can be
turned to any profit, and whether it will be worth while to introduce
any proposition to Congress thereon. Among the possible shapes into
which a matter of this kind may be formed, the following is one: Let us
suppose the public lands to be worth a dollar, hard money, the acre. If
we should ask of a moneyed man a loan of one hundred dollars, payable
with one hundred acres of land at the end of ten years, and in the
meantime carrying an interest of five per cent., this would be more
disadvantageous to the lender than a common loan, payable ultimately in
cash. But if we should say, we will deliver you the one hundred acres
of land immediately, which is in fact an immediate payment of the
principal, and will nevertheless pay your interest of five per cent.,
for ten years, this offers a superior advantage, and might tempt money
holders. But what should we in fact receive, in this way, for our
lands? Thirty-seven dollars and one-fourth, being left in Europe, on an
interest of five per cent., would pay annually the interest of the one
hundred dollars for ten years. There would remain then only sixty-two
dollars and three-quarters, for the one hundred acres of land, that is
to say, about two-thirds of its price. Congress can best determine,
whether any circumstance in our situation, should induce us to get rid
of any of our debts in that way. I beg you to understand, that I have
named rates of interest, term of payment, and price of land, merely to
state the case, and without the least knowledge that a loan could be
obtained on these terms. It remains to inform you from whom this
suggestion comes. The person from whom I receive it, is a Monsieur
Claviere, connected with the moneyed men of Amsterdam. He is, on behalf
of a company there, actually treating with the Comptroller General
here, for the purchase of our debt to this country, at a considerable
discount. Whether he has an idea of offering a loan to us, on terms
such as I have above spoken of, I know not; nor do I know that he is
authorized to make the suggestion he has made. If the thing should be
deemed worthy the attention of Congress, they can only consider it as a
possibility, and take measures to avail themselves of it, if the
possibility turns out in their favor, and not to be disappointed if it
does not. Claviere's proposition not being formal enough for me to make
an official communication of it, you will make what use of it you see
best. I am, with very sincere esteem and attachment, dear Sir, your
most obedient, and most humble servant.