. The foreign debt
comprehends, 1. the loan from the government of Spain; 2. the loans from
the government of France, and from the Farmers General; 3. the loans
negotiated in Holland, by order of Congress. This branch of our debt
stands absolutely singular: no man in the United States having ever
supposed that Congress, or their legislatures, can, in any wise, modify
or alter it. They justly view the United States as the one party,
and the lenders as the other, and that the consent of both would be
requisite, were any modification to be proposed. But with respect to the
domestic debt, they consider Congress as representing both the borrowers
and lenders, and that the modifications which have taken place in this,
have been necessary to do justice between the two parties, and that they
flowed properly from Congress as their mutual umpire. The domestic debt
comprehends 1. the army debt; 2. the loan-office debt; 3. the liquidated
debt; and 4. the unliquidated debt. The first term includes debts to the
officers and soldiers for pay, bounty, and subsistence. The second term
means monies put into the loan-office of the United States. The third
comprehends all debts contracted by quarter-masters, commissioners, and
others duly authorized to procure supplies for the army, and which have
been liquidated (that is, settled) by commissioners appointed under the
resolution of Congress, of June the 12th, 1780, or by the officer who
made the contract. The fourth comprehends the whole mass of debts,
described in the preceding article, which have not yet been liquidated.
These are in a course of liquidation, and are passing over daily into
the third class. The debts of this third class, that is, the liquidated
debt, is the object of your inquiry. No time is fixed for the payment of
it, no fund as yet determined, nor any firm provision for the interest
in the mean time. The consequence is, that the certificates of these
debts sell greatly below par. When I left America, they could be bought
for from two shillings and sixpence to fifteen shillings, in the pound:
this difference proceeding from the circumstance of some STates having
provided for paying the interest on those due in their own State, which
others had not. Hence, an opinion had arisen with some, and propositions
had even been made in the legislatures, for paying off the principal of
these debts with what they had cost the holder, and interest on that.
This opinion is far from bei