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TO M. DE LA FAYETTE

Paris, August 24, 1786.

Dear Sir,—Your other friends here being so much better qualified to give you the transactions of the metropolis during your absence, it would be presumption in me to touch on them. I assume, therefore, the office of your correspondent for American affairs, in the discharge of which, I may stand a chance to communicate to you details which you cannot get in the ordinary course of your correspondence, and which the interest you are so good as to take in our affairs will sometimes render agreeable to you. My letters and papers from America came down to the 16th of July. The impost then wanted the accession of New York only, but another difficulty had started up. Three or four of the States had coupled together the impost and the supplementary funds, so that neither could take place till all the States had granted both. Pennsylvania was of this number, and though desired by Congress to suffer the impost to be established unconnected with the supplementary funds, they have refused, saying, that should the interest of the foreign debt get into a course of regular payment, separately from that of the domestic one, the other States will be the less ready to provide for the latter. Some of the other States have hereupon provided the supplementary funds. It remains to see whether it will be easiest to get all the States to do this, or to prevail on Pennsylvania to recede. All the States have come into the Virginia proposition for a commercial convention, the deputies of which are to agree on the form of an article giving to Congress the regulation of their commerce. Maryland alone has not named deputies, conceiving that Congress might as well propose the article. They are, however, for giving the power, and will, therefore, either nominate deputies to the convention, or accede to their measures. Massachusetts and New Hampshire have suspended their navigation acts. The English encroachments on the province of Maine become serious. They have seized vessels, too, on our coast of Passimaquaddy, thereby displaying a pretension to the exclusive jurisdiction to the Bay of Fundi, which separates Nova Scotia and Le Maine, and belongs as much to us as them. The Spaniards have not yet relinquished the fort of the Natches, and our arrangements with them hang on a great obstacle, indispensable with us, and of which they are unjustly and unwisely tenacious. The Indians, both Northern and Southern, have made peace, except the Creeks, who have made a formidable attack on Georgia. Scattering parties of the Northern Indians, too, have killed some persons in Kentucky. They are unacknowledged, however, by their nations. I observe that Samuel Adams is not re-elected President of the Senate. I cannot conjecture the reason of this. General Sullivan is made President of New Hampshire, Generals Green, McDougal, and Williamson are dead. There have been, for some time, twelve States present in Congress. By a letter from Mr. Barclay, of July 16, I expect our peace with Morocco is signed. For this we are indebted to the honest offices of Spain. Your letter to some friend in Boston, enclosing M. de Calonne's of November 19, 1785, on the subject of whale oils, is printed at length in our papers. Your name is to it, but not that of the person to whom addressed, nor any date. It will do you just service there: the only question is whether it may not disarm you here. I have as yet not heard a tittle from M. de Calonnes on the subject of our commerce. I have received from you, from London, Andrew's history of the war, and Cooper's travels. McIntosh's is not to be bought, the whole edition being exhausted. Our Madeira will be in Paris to-day or to-morrow. I shall be able to have a small copying press completed for you here in about three weeks. Must it wait your return, or will you have it sent to you? Adhering to my promise of saying nothing to you of what I know so imperfectly as the affairs of this country, I shall conclude with assurances of the sincere esteem with which I have the honor to be, dear Sir, your most obedient and most humble servant.

TO M. VAN HOGENDORP

Paris, August 25, 1786.

Sir,—Your favor of the 2d instant has been duly received, and I employ the first moment which has been at my disposal to answer it. The author of the part of the new Encyclopedie which relates to political economy, having asked of me materials for the article "Etat Unis," stating a number of questions relative to them, I answered them as minutely and exactly as was in my power. He has from these compiled the greater part of that article. I take the liberty of enclosing you one of them, which will give you all the details to which your letter refers. I can even refer you to the pages which answer your several questions.

What is the extent of the Congress power in managing the affairs of the United States?

The 6th and 9th articles of the confederation will explain these. Those which it is thought they still need, you will find indicated in this pamphlet, pages 29, 30, and in 31-6, their powers of coercion.

Ques. —What are the expenses of Congress?

Ans. —Page 31-6, and 43-6.

Ques. —Which the revenue?

Ans. —As yet they have no standing revenue; they have asked standing revenues as they shall be noted under a subsequent question. In the meantime they call annually for the sums necessary for the federal government. See pages 43, 44.

Ques. —In which way does the particular State contribute to the general expenses?

Ans. —Congress, once a year, calculate the sum necessary the succeeding year to pay the interest of their debt and to defray the expenses of the federal government. This sum they then apportion on the several States according to the table page 44. And the States then raise each its part by such taxes as they think proper.

Ques. —Are general duties, to be levied by Congress, still expected to be acquiesced to by the States?

Ans. —See page 30, a. New York, the only State which had not granted the impost of 5 per cent., has done it at a late session, but has reserved to herself the appointment of collectors. Congress will not receive it upon that condition. It is believed that New York will recede from this condition. Still, a difficulty will remain; the impost of 5 per cent. not being deemed sufficient to pay the interest of our whole debt, foreign and domestic. Congress asked at the same time (that is in 1783) supplementary funds to make good the deficiency. Several of the States have not yet provided those supplementary funds. Some of those which have provided them, have declared that the impost and the supplementary fund shall commence only when all the States have granted both. Congress have desired those States to uncouple the grants, so that each may come into force separately as soon as it is given by all the States. Pennsylvania has declared this way, that if the impost be granted alone, as that will do little more than pay the interest of the foreign debt, the other States will be less urgent to provide for the interest of the domestic debt. She wishes, therefore, to avail herself of the general desire to provide for the foreign creditors in order to enforce a just attention to the domestic ones. The question is whether it will be more easy to prevail on Pennsylvania to recede from this condition, or the other States to comply with it. The treaties with the Indians have experienced greater delay than was expected. They are, however, completed, and the surveyors are gone into that country to lay out the land in lots. As soon as some progress is made in this, the sale of lands will commence, and I have a firm faith that they will, in a short time absorb the whole of the certificates of the domestic debt.

The Philadelphia Bank was incorporated by Congress. This is, perhaps, the only instance of their having done that which they had no power to do. Necessity obliged them to give this institution the appearance of their countenance, because in that moment they were without any other resource for money. The Legislature of Pennsylvania, however, passed an act of incorporation for the bank, and declared that the holders of stock should be responsible only to the amount of their stock. Lately that Legislature has repealed their act. The consequence is, that the bank is now altogether a private institution, and every holder is liable for its engagements in his whole property. This has had a curious effect. It has given those who deposit money in the bank a greater faith in it, while it has rendered the holders very discontented, as being more exposed to risk, and has induced many to sell out, so that I have heard (I know not how truly) that bank stock sells somewhat below par; it has been said 7 1-2 per cent.; but as the publication was from the enemies of the bank, I do not give implicit faith to it. With respect to the article, "Etats Unis" of the Encyclopedie now enclosed, I am far from making myself responsible for the whole of the article. The two first sections are taken chiefly from the Abbé Raynal, and they are therefore wrong exactly in the same proportion the other sections are generally right. Even in them, however, there is here and there an error. But, on the whole, it is good, and the only thing as yet printed which gives a just idea of the American constitutions. There will be another good work, a very good one, published here soon, by a Mr. Mazzei, who has been many years a resident of Virginia, is well informed and possessed of a masculine understanding. I should rather have said it will be published in Holland, for I believe it cannot be printed here. I should be happy indeed in an opportunity of visiting Holland, but I know not when it will occur. In the meantime, it would give me great pleasure to see you here. I think you would find both pleasure and use in such a trip. I feel a sincere interest in the fall of your country, and am disposed to wish well to either party only as I can see in their measures a tendency to bring on an amelioration of the condition of the people; an increase in the mass of happiness. But this is a subject for conversation. My paper warns me that it is time to assure you of the esteem and respect with which I have the honor to be, dear Sir, your most obedient humble servant.

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