WASHINGTON TO HAMILTON,

UNITED STATES, Aug. 27, 1790.

Provided the dispute between Great Britain and Spain should come to the decision of arms, from a variety of circumstances (individually unimportant and inconclusive, but very much the reverse when compared and combined), there is no doubt in my mind, that New Orleans and the Spanish posts above it on the Mississippi, will be among the first attempts of the former, and that the reduction of them will be undertaken by a combined operation from Detroit.

The consequences of having so formidable and enterprising people as the British on both our flanks and rear, with their navy in front, as they respect our western settlements, which may be seduced thereby, as they regard the security of the Union and its commerce with the West Indies, are too obvious to need enumeration.

What then should be the answer of the Executive of the United States to Lord Dorchester, in case he should apply for permission to march troops through the territory of said States from Detroit to the Mississippi? What notice ought to be taken of the measure, if it should be undertaken without leave, which is the most probable proceeding of the two?

The opinion of the Secretary of the Treasury is requested in writing upon the above statement.

JEFFERSON TO WASHINGTON.

G. W.

Aug. 28, 1790.

Opinion on the questions stated in the President's note of Aug. 27,

1790.

I am so deeply impressed with the magnitude of the dangers which will attend our government if Louisiana and the Floridas

be added to the British empire, that in my opinion we ought to make ourselves parties in the general war expected to take place, should this be the only means of preventing the calamity.

But I think we should defer this step as long as possible; because war is full of chances, which may relieve us from the necessity of interfering; and if necessary, still the later we interfere the better we shall be prepared.

It is often, indeed, more easy to prevent the capture of a place, than to retake it. Should it be so, in the case in question, the difference between the two operations of preventing and retaking, will not be so costly as two, three, or four years more of

war.

So that I am for preserving neutrality as long, and entering into the war as late, as possible.

If this be the best course, it decides, in a good degree, what should be our conduct, if the British ask leave to march troops through our territory, or march them without leave.

It is well enough agreed, in the law of nations, that for a neutral power to give or refuse permission to the troops of either belligerent party to pass through their territory is no breach of neutrality, provided the same refusal or permission be extended to the other party.

If we give leave of passage, then, to the British troops, Spain will have no just cause of complaint against us, provided we extend the same leave to her when demanded.

If we refuse (as indeed we have a right to do), and the troops should pass notwithstanding, of which there can be little doubt, we shall stand committed; for either we must enter immediately into the war, or pocket an acknowledged insult in the face of the world; and one insult pocketed soon produces another.

There is, indeed, a middle course, which I should be inclined to prefer. That is, to avoid giving any answer. They will proceed, notwithstanding; but to do this under our silence will admit of palliation, and produce apologies, from military necessity; and will leave us free to pass it over without dishonor, or to make it a handle of quarrel hereafter, if we should have use for it as such. But if we are obliged to give an answer, I think the

occasion not such as should induce us to hazard that answer which might commit us to the war at so early a stage of it; and therefore that the passage should be permitted.

If they should pass without having asked leave, I should be for expressing our dissatisfaction to the British court, and keeping alive an altercation on the subject, till events should decide whether it is most expedient to accept their apologies, or profit of the aggression as a cause of war.

TH. JEFFERSON.

HAMILTON TO WASHINGTON.

TREASURY DEPARTMENT, Aug. 28, 1790.

The Secretary of the Treasury has the honor respectfully to submit to the President of the United States, for his determination, a request from the Naval Officer of the district of NewYork.

The Secretary humbly remarks, that it appears desirable, as far as possible, to avoid absences of such important officers for so long a duration, but that if the nature of the reasons should induce the President to grant the request, the Naval Officer will no doubt leave his public business in the hands of a deputy, of competent abilities, for whom he will be responsible.

SIR:

HAMILTON TO WILLIAM SHORT.

TREASURY DEPARTMENT, Aug. 29, 1790.

You are already apprised of the loan which was commenced in the United Netherlands, by Messrs. Wilhelm and Jan Willink and Nicholas and Jacob Van Staphorst and Hubbard, with a view on their part to the service of the United States, and that

ance.

the same has been submitted to our government for their acceptOn due consideration of the circumstances of that loan and the views with which the above gentlemen have undertaken it, I have determined, in consequence of power vested in me, to accept and ratify the same. I have accordingly authorized and empowered Messrs. Willinks, Van Staphorsts and Hubbard to complete and carry the said loan into full effect.

My present object is to inform you, that I have destined a million and a half of florins, as soon as that sum shall be received by the above gentlemen on account of that loan, as a payment through you to France, and I have given them directions accordingly. It is my wish that you take the earliest opportunity to inform yourself with certainty that they are in cash from the loan to pay your drafts, and that you then proceed to possess yourself of the funds and to make payment. You will, no doubt, avail the United States of all proper advantages in making the negotiation of the above sum which the course of exchange between Paris and Amsterdam will admit. It is probable that bills will command a premium that will more than indemnify our treasury for the charges of the loan, so far as the amount of this payment to France. It may be proper, on this occasion, that you express the satisfaction which the United States feel in giving an earnest of their sincere desire and intention to discharge their pecuniary obligations to France. Referring you to the Secretary of State for instructions with regard to the timing the intended payment,

I have the honor to be, &c.

SIR:

HAMILTON TO WILLIAM SHORT.

TREASURY DEPARTMENT, Sept. 1st, 1790.

Two Acts of the Legislature, of the fourth and twelfth of August, of which I inclose you copies, authenticated according to law, empower the President to cause to be borrowed on their

behalf fourteen millions of dollars, subject to certain restrictions and qualifications, to be applied in payment of such part of our foreign debt as shall have become due, and to a new modification of the remainder, if it can be effected upon terms beneficial to the United States. The execution of this authority he has committed immediately to me, and ultimately through me to you; except as to three millions of florins, part of the above sum, of which, as you are informed, a loan has been anticipated by Messrs. Willinks, Van Staphorsts and Hubbard, and of which a confirmation, with correspondent powers, has been sent directly to them. Among the documents which accompany this letter you will find a copy of the commission from the President to me, and a power founded on it from me to you.

It remains for me to give you some indications for your government, conformable to the general tenor of the instructions which I have received from the President, and of which I transmit a copy; premising that it is understood, between the Secretary of State and myself, that you are to proceed to Amsterdam without delay, and to continue there, in the first instance, for a term not less than three months.

A primary and principal object of your attention will be, to acquire as exact knowledge as may be of the footing upon which the different foreign powers who borrow in Holland have usually obtained their loans, since the commencement of our independence, and upon which they at present obtain them; the prices of foreign stock in the Dutch market, including our own; the state of our credit compared with that of other nations; the extent and the conditions to and upon which we shall be likely to borrow in case of war between England and Spain, and in the alternative of our being ourselves at peace or war; the principal houses and brokers concerned in the negotiations of foreign loans; their characters; comparative solidity and influence with the money-lenders; the terms upon which their agency is af forded to their employers; the manner in which those whom we have heretofore employed are understood to have conducted. themselves in relation to our interest and credit; and particularly their solidity and influence with the money-lenders.