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Subject Area: Economics
Subject Area: Political Theory
Topic: The American Revolution and Constitution

to william duer - Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 9 [1774]

Edition used:

The Works of Alexander Hamilton, ed. Henry Cabot Lodge (Federal Edition) (New York: G.P. Putnam’s Sons, 1904). In 12 vols. Vol. 9.

Part of: The Works of Alexander Hamilton, (Federal Edition), 12 vols.

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to william duer

My dear Duer, five minutes ago I received your letter of yesterday. I hasten to express to you my thoughts, as your situation does not permit of delay. I am of opinion that those friends who have lent you their money or security from personal confidence in your honor, and without being interested in the operations in which you may have been engaged, ought to be taken care of absolutely, and preferably to all creditors. In the next place, public institutions ought to be secured. On this point the manufacturing society will claim peculiar regard. I am told the funds of that society have been drawn out of both banks; I trust they are not diverted. The public interest and my reputation are deeply concerned in the matter. Your affairs with the government, as connected with your office as assistant to the Board of Treasury, will deserve your particular attention. Persons of whom you have made actual purchases and whose property has been delivered to you, would stand next after public institutions. But here perhaps some arbitration may be made. It would certainly be desirable to distinguish between the price of stock at the time of purchase and its enhanced price upon time. With regard to contracts merely executory, and in regard to which differences would be to be paid, no stock having been delivered, I postpone claims of this nature to all others. They ought not to interfere with any claim which is founded on value actually given. As to the usurious tribe: these present themselves under different aspects. Are these women, or ignorant people, or trustees of infants? The real principal advanced and legal interest would, in such cases, stand, in my mind, on high ground. The mere veteran usurers may be taken greater liberties with. Their real principal and interest, however, abstracted from usurious accumulation, would stand better than claims constituted wholly by profits from speculative bargains. But the following course deserves consideration: Take care of debts to friends who have aided you by their money or credit disinterestedly, and the public institutions. Assign the rest of your property for the benefit of creditors generally. The law will do the rest. Whenever usury can be proved, the contract, I take it, will be null. Where it cannot be proved, the parties will be obliged to acknowledge on oath, and then their principal and interest only will be due. Wherever a fair account can be stated, and all the sums borrowed and paid can be set against each other, it is probable it will be found that more has been paid than, on a computation of legal interest, was ever received. Here, I presume, the demand would be extinguished, and possibly the parties would be compelled to disgorge. These are rather desultory thoughts than a systematic view of the subject. I wish I had more time to form a more digested opinion, but as I have not you must take what I can give. Adieu, my unfortunate friend. God bless you and extricate you with reputation. Again adieu. Be honorable, calm, and firm.1

[1]Reprinted from the History of the Republic, iv., 289.