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Our negotiations have been protracted longer than I had expected or than was desirable. The only advantage arising from it is that a change in Europe or a reverse of the British in America might alter their views and produce a peace ; that whilst we continue here it may be made at any time, if any such contingency should happen, and that, considering distance and irritation, a renewal of negotiations once broken would be attended with much delay and difficulty, even if Great Britain became sincerely disposed to peace.
With respect to the Indian article, my only motive for assenting to it - and I believe that it was the same with my colleagues - was that having little hope of peace, I thought it much more favorable, with respect to public opinion in the eastern part of the Union, that we should break on other grounds, and particularly on that of territorial rights, than on that of Indian pacification. Considering that we may still be detained longer than we calculate, it seems important that you should immediately send us instructions on that subject and on the other points, either not heretofore contemplated, or which may require reconsideration. Permit me to mention some of them: 1st. We principally rest on the basis of status ante bellum. Would it be proper to break on the point of trading with the Indians granted to the British by the treaty of 1794? The non-renewal by our present instructions is a sine qua non. 2d. The right of preserving our naval force on the Lakes to any extent we please is also a sine qua non by our instructions. Supposing the British to propose a mutual restriction in that respect, either partial or total, should we still adhere to the sine qua non? 3d. After the declaration of the British respecting fisheries, are we to insist on our rights as defined by the treaty of 1783 being renewed, or rest on our construction of that treaty ? My idea was to make a similar declaration on our part respecting the British privilege of navigating the Mississippi, derived from the same treaty, and to let both be renewed or fall together. 4th. Is it indispensable, if we should agree to the northwestern boundary from the Lake of the Woods to the Mississippi, to provide for the northern boundary of Louisiana, or to insert a proviso that the article shall not affect said boundary? or may we safely rest on our right to the country without referring to it? If we fix a boundary for Louisiana, what should it be? In giving instructions on that point, I think that the ultimatum should be a line including all the waters of the Mississippi and Missouri. 5th. If Great Britain should agree to a mutual restoration of territory everywhere, with the single exception of the settlement on Columbia River, what must we do? And generally, what should be our conduct and claims respecting the country between the Rocky Mountains and the Pacific Ocean ? 6th. With respect to Maine, I believe the British will insist on the islands in the Passamaquoddy Bay as of right belonging to them. We have no documents to rebut their claim. May we agree to the appointment of commissioners to decide on the claim? How should they be constituted? and must we, in that case, insist on the restitution of the islands till the question is settled ? 7th. The British also want in the same district the country watered by St. John's River, which forms the northern part of said district. In case that, as already suggested, they should insist that there is uncertainty in the line, cn we likewise agree to the appointment of commissioners? If they propose an exchange, how far can we agree to it? My reason for putting this last query is, that although Massachusetts has taken possession of the whole country, she has no claim to any part of the territory north of 45 degrees of north latitude and east of the Penobscot or Kennebec River (I do not recollect which). That territory of right belongs to the Union, as acquired by the treaty of 1783. Yet, considering the undisturbed possession by Massachusetts, it would be a delicate question to exchange without her consent, even for a fair equivalent. 8th. If a maritime war should be renewed in Europe, what must we do on the subject of impressment ?
We have certainly no means of giving you information on the points of attack contemplated by the British. Their conduct in occupying the country east of Penobscot requires no comment. I still believe that their principal object is Louisiana. If strong enough, they may also occupy the Southern ports, from St. Mary's as far north as they can, for the double purpose of obtaining cotton and of having territory in their hands for which to ask equivalents when making peace. The defence of New Orleans, the repossession of the country east of Penobscot, the subjugation and pacification of the Indians, and the conquest of enough in Canada to have also something to restore, appear important objects with a view to the terms of peace.
No loan can be obtained in Europe, and our financial resources will be deficient. I will, without apology, state the principles on which it seems to me that we can go with least inconvenience. Difficulties and objections in any plan you must expect. 1st. To carry the revenue to the greatest extent which the people will bear. Indirect internal taxes to be preferred. 2d. To limit the nominal loans to the extent which can be obtained, and to be previously ascertained as far as practicable, and not to borrow stock at a rate exceeding in any shape 8 per cent. 3d. To apply exclusively the moneys arising from those two sources - loans and revenue - to the payments of the civil list, interest of public debt, and pay and support of the regular army and navy, and of the militia employed in offensive operations. The essential objects must be first provided for, and some distinct line drawn between what you will pay in money or provide for otherwise. 4th. Not to increase the amount of Treasury notes receivable in payment of taxes and payable one year after date, but, in order to supply deficiencies, to issue notes payable also to bearer, but not receivable in taxes, and reimbursable at a longer period, if possible one year after peace, and having such an interest - from six to eight per cent. - as will prevent too great a depreciation. These may, if the war continues, be funded in part annually, when a loan is opened. 5th. To authorize the States, within such limitations as may be thought proper, to raise State troops for self-defence, which, as well as the militia called for defensive purposes, should be paid and supported by the States respectively, the United States reimbursing ultimately the expense by stock or by instalments after the war, or in any other mode which may be devised. States not providing as aforesaid would be left by their neglect without sufficient defence. 6th. If the preceding suggestion is not adopted, a superabundant issue of paper will take place, which I fear will be fatal. Still, in that case the notes bearing interest, or stock by loans on bad terms, appear preferable to paper money, so called. In case States be not resorted to, will not a local force, as I had formerly proposed, be more efficient and cheaper than large and sudden calls of militia ? My plan was to raise men for local defence, to be trained and kept encamped or in forts by turns, say one-fourth part at a time, to be liable to be called as minute-men in service whenever required, and to be paid only when in actual service. But I perceive that my zeal carries me out of my sphere. I had left a plan for a bank ; also that of making lands instrumental in procuring loans, byway of lottery. I think the last scheme might be useful. But it may be too late for a bank, and subscribers may not perhaps be obtained. Of that those on the spot must judge. With my conjectures on European affairs I will not trouble you. I do not think that the British are apprehensive of a renewal of the war. They are hated everywhere, and I think that we begin to grow popular. We are certainly so here, and the destruction of the public buildings at Washington has produced a considerable sensation against England, though its capture, and without sufficient defence, has been injurious to the opinion entertained of our strength or abilities. We have ordered the Neptune to Brest ; we will join her by land, and whence we may sail with more convenience at an advanced or early season. Antwerp is also liable to be frozen up.
- The writings of Albert Gallatin, Vol I, Henry Adams