A Businessman on the Assumption of State Debt, 1790
Nathaniel Gorham to Henry Knox, January 20, 1790. (The Gilder Lehrman Institute of American History)
Nathaniel Gorham, a leading Massachusetts businessman and political leader, writes to Henry Knox about the assumption of state debt. Gorham was on the brink of bankruptcy due to the inflation of Massachusetts currency, and so was not neutral in the matter. Here Gorham summarizes the major federalist and antifederalist debates over the constitutionality and prudence of federal assumption of state debt.
A Letter from Nathaniel Gorham to Henry Knox, January 20, 1790
Boston January 20th 1790
My Dear Sir
We understand here that Mr. Hamiltons report on finance was to be made on Thursday last - various are the conjectures on the nature of it. Many suppose that a proposal for the assumption of the State debts will make a part of it - The Antis generally and some Federalists who are under apprehensions for the support of the State Governments will be opposed to the assumption and the former have very generally circulated an idea that the People will be subjected to a very heavy and perpetual Land tax in consequence of it - This is a most powerful Engine with which to work and will if the consent of the States is necessary totally defeat the measure - I would therefore suggest to you - whether the plan may not be so constructed as to remove the fears of the People on that head – They will not be aware I believe to give up all other funds – do suggest the business in such manner as you know very well how to do – I have been led to hope that the transfer of our Bonds for the benefit of the Nation may lie apart of the plan – but this I suggest to you only to make such use as you think proper – do write me fully upon every thing particularly what you may have learnt of Ellicots proceedings
I am Your Friend
and Humble Servt
Nath Gorham
Source: Nathaniel Gorham to Henry Knox, January 20, 1790, The Gilder Lehrman Institute of American History, GLC02437.04476.
A Letter from Nathaniel Gorham to Henry Knox, January 20, 1790
Boston January 20th 1790
My Dear Sir
We understand here that Mr. Hamiltons report on finance was to be made on Thursday last – various are the conjectures on the nature of it. Many suppose that a proposal for the assumption of the State debts will make a part of it – The Antis generally and some Federalists who are under apprehensions for the support of the State Governments will be opposed to the assumption and the former have very generally circulated an idea that the People will be subjected to a very heavy and perpetual Land tax in consequence of it – This is a most powerful Engine with which to work and will if the consent of the States is necessary totally defeat the measure – I would therefore suggest to you – whether the plan may not be so constructed as to remove the fears of the People on that head – They will not be aware I believe to give up all other funds – do suggest the business in such manner as you know very well how to do – I have been led to hope that the transfer of our Bonds for the benefit of the Nation may lie apart of the plan – but this I suggest to you only to make such use as you think proper – do write me fully upon every thing particularly what you may have learnt of Ellicots proceedings
I am Your Friend and
Humble Servent
Nath Gorham
Source: Nathaniel Gorham to Henry Knox, January 20, 1790, The Gilder Lehrman Institute of American History, GLC02437.04476.
prudence - wise in practical affairs
perpetual - everlasting
Background
Nathaniel Gorham, a leading Massachusetts businessman and political leader, writes to Henry Knox about the assumption of state debt. Gorham was on the brink of bankruptcy due to the inflation of Massachusetts currency, and so was not neutral in the matter. Here Gorham summarizes the major federalist and antifederalist debates over the constitutionality and prudence of federal assumption of state debt.
Transcript
A Letter from Nathaniel Gorham to Henry Knox, January 20, 1790
Boston January 20th 1790
My Dear Sir
We understand here that Mr. Hamiltons report on finance was to be made on Thursday last - various are the conjectures on the nature of it. Many suppose that a proposal for the assumption of the State debts will make a part of it - The Antis generally and some Federalists who are under apprehensions for the support of the State Governments will be opposed to the assumption and the former have very generally circulated an idea that the People will be subjected to a very heavy and perpetual Land tax in consequence of it - This is a most powerful Engine with which to work and will if the consent of the States is necessary totally defeat the measure - I would therefore suggest to you - whether the plan may not be so constructed as to remove the fears of the People on that head – They will not be aware I believe to give up all other funds – do suggest the business in such manner as you know very well how to do – I have been led to hope that the transfer of our Bonds for the benefit of the Nation may lie apart of the plan – but this I suggest to you only to make such use as you think proper – do write me fully upon every thing particularly what you may have learnt of Ellicots proceedings
I am Your Friend
and Humble Servt
Nath Gorham
Source: Nathaniel Gorham to Henry Knox, January 20, 1790, The Gilder Lehrman Institute of American History, GLC02437.04476.
Excerpt
A Letter from Nathaniel Gorham to Henry Knox, January 20, 1790
Boston January 20th 1790
My Dear Sir
We understand here that Mr. Hamiltons report on finance was to be made on Thursday last – various are the conjectures on the nature of it. Many suppose that a proposal for the assumption of the State debts will make a part of it – The Antis generally and some Federalists who are under apprehensions for the support of the State Governments will be opposed to the assumption and the former have very generally circulated an idea that the People will be subjected to a very heavy and perpetual Land tax in consequence of it – This is a most powerful Engine with which to work and will if the consent of the States is necessary totally defeat the measure – I would therefore suggest to you – whether the plan may not be so constructed as to remove the fears of the People on that head – They will not be aware I believe to give up all other funds – do suggest the business in such manner as you know very well how to do – I have been led to hope that the transfer of our Bonds for the benefit of the Nation may lie apart of the plan – but this I suggest to you only to make such use as you think proper – do write me fully upon every thing particularly what you may have learnt of Ellicots proceedings
I am Your Friend and
Humble Servent
Nath Gorham
Source: Nathaniel Gorham to Henry Knox, January 20, 1790, The Gilder Lehrman Institute of American History, GLC02437.04476.
prudence - wise in practical affairs
perpetual - everlasting
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