To Alexander Hamilton from John Nixon, [15 February 1792]
From John Nixon1
[Philadelphia, February 15, 1792]2
Sir
We take pleasure in thanking you for the candid state of the public existing engagements to the holders of Certificates, for monies lent the United States to carry on the late War between September 1777 and March 1778; and also for the proposed provision for 1791 & 1792 to those continuing nonsubscribers.
We find by your Report on the public debt alluded to above,3 that you conceive the holders of this Class of Certificates should from various motives, be induced, to come into the terms held out for and accepted by so great a portion of the public Creditors; at the same time you would have their choice & election to be free.
We therefore declare our willingness to give up as much as the funding System requires from other Creditors; all we desire is not to relinquish more, which you know would be done, if we relinquish an higher demand for an equal Sum.
As you observe, the interest is payable on the nominal amount of our respective demands, and the terms preceded the Loan; That the depreciation of the principal commenced from the first of September 1777 & not from March 1st 1778 was owing to a small majority in Congress; however in this we acquiesce, whereby 3,459,000 Dolls. are reduced to 2,538,572 Dolls., making a difference of 920,428 Dolls., being a reduction of upwards of one fourth part of the whole, on which an interest is now payable. Both debts are redeemable at pleasure on paying the arrears of interest in Specie, and a direliction of this interest amounting to more than ¼ of the whole for ever, is at least equal to a relinquishment of the interest for 9 years on one third of the Capital of the other creditors. We therefore agree to accept the proposals contained in the funding System established by Act of Congress of August 4th 1790;4 provided the remaining third of our principal reduced by the Scale is given us in Six p Cent Stock, bearing interest from the time to which the arrears are settled in 3 p Cent Stock; and that this average shall be adapted in the ratio of depreciation to the case of each Creditor, so that where the loss of interest is less than the average aforesaid, a proportionate Sum of the Capital shall be in Deferred debt, and where greater a proportionate Sum of the 3 p Cent Stock shall be augmented to Six p Cent Stock, and by this means do equal Justice to all.
As the subject is now before Congress, you may perhaps think it proper to submit to them these proposals also.
In behalf of ourselves and others we are sir with great respect your most obed servt
John Nixon
The Honble Alexr Hamilton Esqr
Secy. Treasy. of the U states
LS, Division of Public Records, Pennsylvania Historical and Museum Commission, Harrisburg.
1. Nixon had been elected president of the Bank of North America on January 10, 1792. For an earlier letter on the same topic also signed by Nixon, see Blair McClenachan et al. to H, March 16, 1791.
2. This letter is not dated, but the endorsement, in the handwriting of John Nicholson, comptroller general of Pennsylvania, reads: “Letter to A Hamilton, Feby 15th 1792.”
4. “An Act making provision for the (payment of the) Debt of the United States” ( 138–44).