I cannot but think that to decline the propositions of Mr. Genet on the subject of our debt, without assigning any reasons at all, would have a very dry and unpleasant aspect indeed. We are then to examine what are our good reasons for the refusal, which of them may be spoken out, and which may not. 1. want of confidence in the continuance of the present form of government, and consequently that advances to them might commit us with their successors. This cannot be spoken out. 2. since they propose to take the debt in produce, it would be better for us that it should be done in moderate masses yearly, than all in one year. This cannot be professed. 3. when M. de Calonne was minister of finance, a Dutch company proposed to buy up the whole of our debt, by dividing it into actions or shares. I think Mr. Claviere, now minister of finance, was their agent. It was observed to M. de Calonne that to create such a mass of American paper, divide it into shares, and let them deluge the market, would depreciate them, the rest of our paper, and our credit in general. That the credit of a nation was a delicate and important thing and should not be risked on such an operation. M. de Calonne, sensible of the injury of the operation to us, declined it. In May 1791,1 there came, thro’ Mr. Otto, a similar proposition from Schweizer, Jeanneret & Co. We had a representation on the subject from Mr. Short, urging this same reason strongly. It was referred to the Secretary of the Treasury, who in a letter to yourself assigned the reasons against it, and these were communicated to Mr. Otto, who acquiesced in them. This objection then having been sufficient to decline the proposition twice before, and having been urged to the two preceding forms of government (the antient and that of 1791) will not be considered by them as founded in objections to the present form. 4. the law allows the whole debt to be paid only on condition it can be done on terms advantageous to the US. The minister foresees this objection and thinks he answers it by observing the advantage which the paiment in produce will occasion. It would be easy to shew that this was not the sort of advantage the legislature meant, but a lower rate of interest. 5. I cannot but suppose that the Secretary of the Treasury, much more familiar than I am with the money operations of the treasury, would on examination be able to derive practical2 objections from them. We pay to France but 5. per cent. The people of this country would never subscribe their money for less than 6. If to remedy this, obligations at less than 5. per cent were offered and accepted by Mr. Genet, he must part with them immediately at a considerable discount to indemnify the loss of the 1. per cent: and at a still greater discount to bring them down3 to par with our present 6. per cents: so that the operation would be equally disgraceful to us and losing to them &c. &c. &c.

I think it very material myself to keep alive the friendly sentiments of that country as far as can be done without risking war, or double payment. If the instalments falling due in this year can be advanced, without incurring those dangers, I should be for doing it. We now see by the declaration of the Prince of Saxe-Cobourg on the part of Austria and Prussia that the ultimate point they desire is to restore the constitution of 1791. Were this even to be done before the pay-days of this year, there is no doubt in my mind but that that government (as republican as the present except in the form of it’s executive) would confirm an advance so moderate in sum and time. I am sure the nation of France would never suffer their government to go to war with us for such a bagatelle, and the more surely if that bagatelle shall have been granted by us so as to please and not to displease the nation; so as to keep their affections engaged on our side. So that I should have no fear in advancing the instalments of this year at epochs convenient to the treasury, but at any rate should be for assigning reasons for not changing the form of the debt. These thoughts are very hastily thrown on paper, as will be but too evident. I have the honor to be with sentiments of sincere attachment & respect, Sir your most obedient & most humble servt