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Speculation in the Revolutionary Debt: The Ownership of Public Securities in Maryland,1790

Published online by Cambridge University Press:  03 February 2011

E. James Ferguson
E. James Ferguson
Affiliation:
University of Illionois
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Extract

Historians have taken it for granted that the Revolutionary, debt was fairly well concentrated before it was funded in 1790, but they have not been able to support this view with concrete evidence. Most of the people living at the time thought the same thing but were likewise unable to prove it. The truth could not be known until Hamilton's funding operation assembled the securities that made up the debt. Under the act of 1790 a new federal loan was instituted. Various kinds of securities representing unpaid claims against the government were taken as subscriptions and the possessors given new federal stock. As nearly all the old securities came in, the government had full information about the transfer and ownership of the Revolutionary debt. The details, however, were not made public. Later, a succession of fires in the treasury destroyed nearly all the central records. Documents now existing, though voluminous, are scattered, incomplete, and hard to interpret. Historians have not made much use of them. For this reason, the ownership of the debt, which was a question in 1790, is a question still.

Type
Articles
Information
The Journal of Economic History , Volume 14 , Issue 1 , Winter 1954 , pp. 35 - 45
Copyright
Copyright © The Economic History Association 1954

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References

1 Unless otherwise cited, all statistics in this paper are computed from two subscription registers for the period October 7, 1790, to February 26, 1793. Subscriptions toward a loan t o the United States as proposed by the Act-of Congress of the fourth of August 1790 in the office of Thomas Harwood, commissioner of loans in the State of Maryland, “Old Loans,” Record Group 53, National Archives. A small ledger with the same title summarizes each subscription in a single entry and indicates whether the individual who actually brought the securities into the Maryland loan office was acting for himself or as an agent. In every case the name of the actual owner, not the agent, is entered in the two volumes that constitute the formal subscription register.

2 See Ferguson, E. James, “State Assumption of the Federal Debt During the Confederation,” Mississippi Valley Historical Review, XXXVIII (12 1951), 403–24CrossRefGoogle Scholar.

3 All figures on the subscription to the federal loan of 1790 include accumulated interest. The figures have been calculated on the basis of a dollar of 100 cents instead of the dollar of 90 cents in use at the time. This will result in discrepancies of no more than a few cents, except where extended calculations have been made. In no instances, however, will the difference amount to more than two or three dollars.

Maryland's securities were subscribed on April 1 and September 23, 1791, by Benjamin Harwood in his own name, acting as a state agent. It appears that the state also held other federal securities. On November 29, 1791, a committee of the legislature reported that the state owned $973,03; in federal stock. Votes and Proceedings of the House of Delegates of the State of Maryland, November Session, 1792, Rare Books Division, Library of Congress.

4 Register of Loan Office Certificates issued in the State of Maryland from the opening of the office till the first day of May 1781, when the issues ceased, “Old Loans,” Record Group 53, National Archives.

5 Laws of Maryland made since M, DCC, LXIII … (Annapolis, 1787)Google Scholar, November Session, 1782, chap. 25. State holdings were evidently larger than the amount noted. It was reported in 1787 that the state had loan-office certificates whose principal value was $214,712, whereas the principal value of those subscribed in 1790 was only $166,428. Perhaps the state had disposed of these securities, but it is more probable that the securities had been issued in other states originally and were subscribed by Maryland directly at the federal treasury. Votes and Proceedings of the House of Maryland (n.d., n.p.), May 2, 1787; Maryland House of Delegates to Their Constituents, 1787, Broadside Collection, Portfolio 28, No. 24, Rare Books Division, Library of Congress. See also above, note 3.

6 These were called either “Piercc's notes” or “final settlement certificates.” Commissioner of Army Accounts, Pay Account, 1784-98, Maryland Hall of Records, Annapolis. This account is not complete for the whole payment to the Maryland line.

Securities were issued by federal commissioners to detached corps not connected with any state line, but the amount of these given to Marylanders and subscribed to the federal loan in Maryland has not been identified as a separate item.

7 These were called “final settlement certificates” or referred to according to the name of the commissioner who issued them. Only the transfers occurring after 1783 can be traced from the records.

8 During the Confederation, federal creditors in most states could, if they wished, draw interest on their securities in indents. These indents were subscribablc to the federal loan of 1790. If the creditors had not collected interest in indents, they were credited with the accumulated interest on the securities they subscribed in 1790. No interest, however, was paid on indents.

9 Federal commissioners issued securities after the war in the process of settling accounts of officers previously in the service of the Continental Government. These notes were referred o t according to the name of the commissioner who issued them. See the entries for different types of federal debts in American State Papers, Finance (Washington, 1832), I, 239Google Scholar.

10 Continental currency drew neither interest nor indents.

11 The following methods were followed in computing the degree of transfer: (i) Whenever a certificate was first issued to anyone bearing the same family name as the holder in 1790, it was counted as an original holding. (2) Indents were considered original holdings if presented by a person who had original holdings of other securities sufficiently large to have drawn the indents. If the person had no original holdings of other securities, his indents were counted as secondary holdings. In a few cases, indents were divided between original and secondary holdings. (3) Subscriptions of currency were arbitrarily classified; those above $100 n i real value were considered secondary holdings and those of lesser amount deemed original holdings.

Transfer of loan-office certificates posed a problem. After February 1786 individuals holding many of these certificates, each of small value, were allowed to bring them into the loan offices, if their total holdings aggregated $100 or more in specie value, and receive a single new certificate issued in their own name. This name appears on the certificate subscribed in 1790 as that of the original holder. It has been possible to establish in each case, however, the names of the original holders of the certificates for which the later certificate was exchanged. -Register of Depreciated Continental Loan Office Certificates Cancelled and of Certificates Issued for Their Specie Value by Thomas Harwood, Continental Loan Officer in the State of Maryland, “Old Loans,” Record Group 53, National Archives.

Even so, the transfer of loan office certificates cannot be established with absolute conclusiveness. In 1780 and 1781 they were used like money by federal agents, who took them out in thcii own names and signed them over to federal creditors. Therefore, though presented in 1790 by the first assignees, these securities would appear as transferred, though the transfer was in fact merely technical. While this practice undoubtedly existed in Maryland, a general survey of the records does not indicate that it was sufficiently great to invalidate the figures given above regarding the rate of transfer.

12 The discount may have been less on certain loan-office certificates, particularly if transferred before 1782. Up to that time, Congress paid the interest in French bills of exchange on those issued before March 1, 1778. This upheld their value.

13 Stoddert's name is given as Stoddard, but he can be identified as the same man through his mercantile partnership with Uriah Forrest.

14 In computing the figures given in the foregoing tables, joint subscriptions have been considered as having been held in equal parts by the individuals named as having made the subscription.

15 Identifications of most of these men have been kindly supplied by the Hall of Records at Annapolis and the State Historical Society at Baltimore. In the case of names that were very common, some doubt must remain that the following individuals were the same men as those whose names are given in the records. It appears, however, that Benjamin Stoddert and Uriah Forrest were merchants located in Georgetown. Stoddert speculated in lands and assisted President Washington in the purchase of sites in the District of Columbia. Uriah Forrest was at one time or another a member of the governor's council, a major general in the state militia, delegate to the Continental Congress, and representative in the United States Congress. Charles Wallace was a merchant, associated with John Muir and others. Before the Revolution, he contracted to build the State House at Annapolis. In 1784 he became a member of the governor's council. Gustavus Scott studied law in Scotland and England, took part in the state Constitutional Convention of 1776, and in 1784 served as delegate to the Continental Congress. Moving later near Washington, D.C., he received an appointment as one of the commissioners to erect public buildings in the national capital.

Nicholas Slubey was a merchant and landholder in Baltimore County. Major John Davidson was twice a member of the governor's council. Richard Potts, if the name is identified correctly, served as delegate to the Continental Congress, attended the State Convention that ratified the Constitution, later became a United States senator and an associate justice of the Maryland Court of Appeals. Randolph B. Latimer was a member of the governor's council during the Confederation. Nearly all the other names occur in the contemporary records, except John Laird and Adrian Valch, but cannot be positively identified as belonging to the men in question without more research.

16 It should also be observed that Maryland speculators might have owned securities issued in other states which they subscribed at the federal treasury. The principal value of securities originally issued in Maryland is given in American State Papers. Finance, I, 239.

17 Information of a kind is available. Maryland and other states paid the interest on federal securities in indents. The records of these payments in Maryland, which occurred after 1787, give the names of original and present holders of securities. The general picture is much the same as in 1790. Most securities have been transferred. Some of the big holders of 1790' are represented, though others are not. Unfortunately, these records have only a limited usefulness. Only a part of the securities were brought in to receive indents. There is no reason to believe that the securities listed were the full holdings of the large investors. Moreover, the payment of indents took place after 1787, when the movement for constitutional revision promised success. For these reasons no detailed analysis has been made of these accounts. See Register of Certificates of the Liquidated Debts presented at the Continental Loan Office in the State of Maryland and of Interest paid thereon … “Old Loans,” Record Group 53, National Archives.