January 18, 1791
My Dear Sir:
I have learnt with infinite pain the circumstances of a new bank having started up in your city. Its effects cannot but be in every way pernicious. These extravagant sallies of speculation do injury to the government and to the whole system of public credit, by disgusting all sober citizens and giving a wild air to every thing. ’t is impossible but that three great banks in one city must raise such a mass of artificial credit as must endanger every one of them, and do harm in every view.
I sincerely hope that the Bank of New York will listen to no coalition with this newly engendered monster; a better alliance, I am strongly persuaded, will be brought about for it, and the joint force of two solid institutions will, without effort or violence, remove the excrescence which has just appeared, and which I consider as a dangerous tumor in your political and commercial economy.
I express myself in these strong terms to you confidentially, not that I have any objection to my opinion being known as to the nature and tendency of the thing.
January 13, 1791
Dear Sir:—I thank you for the printed papers you have been so obliging as to send.
I cannot forbear a conjecture that the communications of the Chargé des Affaires of France are rather expedients to improve a moment in which it is perceived questions concerning navigation are to be discussed, than the effects of serious instructions from his court.
Be this as it may, I really have not thought of any substitute for your proposition to which objections do not lie. And, in general, I have doubts of the eligibility of ex-parte concessions, liable to be resumed at pleasure. I had rather endeavor, by a new treaty of commerce with France, to extend reciprocal advantages, and fix them on a permanent basis. This would not only be more solid, but it would, perhaps, be less likely, than apparently gratuitous and voluntary exemptions, to beget discontents elsewhere, especially (as ought to be the case) if each party should be at liberty, for equivalent considerations, to grant like privileges to others. My commercial system turns very much on giving a free course to trade, and cultivating good humor with all the world. And I feel a particular reluctance to hazard any thing, in the present state of our affairs, which may lead to a commercial warfare with any Power; which, as far as my knowledge of examples extends, is commonly productive of mutual inconvenience and injury, and of dispositions tending to a worse kind of warfare. Exemptions and preferences which are not the effect of treaty, are apt to be regarded by those who do not partake in them as proofs of an unfriendly temper towards them.
Philadelphia, January 11, 1791
Dear Sir:—I have perused with attention your intended report to the President, and will, as I am sure is your wish, give you my opinion with frankness.
As far as a summary examination enables me to judge, I agree in your interpretation of the treaty. The exemption sought does not appear to be claimable as a right. But I am not equally well satisfied of the policy of granting it on the ground you suggest. This, in my mind, stands in a very questionable shape. Though there be a collateral consideration, there is a want of reciprocity in the thing itself; and this is a circumstance which materially affects the general policy of our navigation system. The tendency of the measure would be to place French vessels upon an equal footing with our own in our ports, while our vessels in the ports of France may be subjected to all the duties which are there laid on the mass of foreign vessels. I say the mass of foreign vessels, because the title of “most favored nation” is a very extensive one, the terms being almost words of course in commercial treaties. And consequently our own vessels in the carrying trade between the United States and France would be in a worse situation than French vessels. This is the necessary result of equal privileges on one side and unequal on the other, in favor of the vessels of France.
Though, in the present state of the French navigation, little would be to be apprehended from the regulation; yet, when the probable increase of that navigation under a free government is considered, it can hardly be deemed safe to calculate future consequences from the actual situation in this respect.
And if the principle of the regulation cannot be deemed safe in a permanent view, it ought not to be admitted temporarily; for inconvenient precedents are always embarrassing.
On the whole, I should be of opinion that the introduction of such a principle without immediate reciprocity would be a high price for the advantage which it is intended to compensate.
It will, no doubt, have occurred to you that the fund has been mortgaged for the public debt. I do not, however, mention this as an insuperable objection; but it would be essential that the same act which would destroy this source of revenue should provide an equivalent. This I consider as a rule which ought to be sacred, as it affects public credit.
I have the honor to be, etc.
P. S.—If you have any spare set of the printed papers, I should be obliged by having them.