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Colonial and State Records of North Carolina
Letter from Samuel Osgood and Arthur Lee to Richard Caswell
Osgood, Samuel, 1748-1813; Lee, Arthur, 1740-1792
November 08, 1787
Volume 20, Pages 783-785


Board of Treasury,
November 8th, 1787.


We do ourselves the honor of transmitting to your Excellency for the consideration of the Legislature of the State in which you preside,

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the Requisitions of the United States in Congress for the present year, together with a Statement of arrears due from the State on the former Requisitions, computed to the 30th June, last.

It is with extreme regret that we inform your Excellency that the aggregate of the Specie Arrears to the period last mentioned is no less than 3,668,203 dollars. This circumstance, without the necessity of entering into a further detail, must convince every reflecting person of the Embarrassments to which the Federal Government has been for a long time subjected from the delinquency of the several States in paying their respective quotas into the public Treasury. Although the expenditures of the Civil list have been reformed in such a manner that it is with difficulty the business of the several Departments can be executed with proper dispatch and regularity, and the Military Establishment has been so much reduced as to be scarcely adequate to the Security of the public Arsenals, and the preservation of the Western Territories; still it is with the utmost difficulty that we have hitherto been able to satisfy with any degree of punctuality the immediate and necessary Expences of the Civil Department, and to pay part of the demands arising on the Military Establishment. To enable the General Treasury to compleat these two branches of the public Expenditure for the year 1786, and to provide for these under the same head for the year 1787, no less than Seven Hundred Thousand Dollars in Specie, are necessary. Unless this sum is collected without delay and paid into the General Treasury the States will be inevitably exposed to all the evils which would most assuredly attend the dissolution of the present form of Government, before any new system is adopted for binding together the different members of the Union, and those States which are peculiarly delinquent (as the enclosed Act of Congress very justly observes) be considered as responsible for the consequences.

Whilst the more pressing necessities of Government constrain us in a most peculiar manner, to mention the necessity of an immediate Collection of the Sum required for its Support, we should discharge a small part of the trust reposed in us if we omitted to solicit the influence of your Excellency in urging to the Legislature how much the National Character is interested in the discharge of the heavy arrears due on the French and Spanish Loans, which amounted at least to the Sum of 2,400,000 Dollars to the end of 1788, almost the whole of which is due to his Most Christian Majesty. When the present deranged

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State of the Finances of that Kingdom is considered, and the necessity that Sovereign is under of imposing new and heavy Taxes upon his Subjects, We cannot but persuade ourselves the States will feel in the strongest manner how incumbent it is on them to make the utmost exertions to enable the General Treasury to discharge a balance so justly due, and so repeatedly promised.

Your Excellency will observe that no deficiency is Stated to be due on the Dutch Loans, but we are sorry to observe that such has been the reduced state of the Treasury that the Interest which fell due in June last has been discharged by a new loan of monies, on Terms much more unfavourable than could have been obtained if that punctuality had been observed in the discharge of the Foreign Interest, which those who subscribed to the Loans had a right to expect. The consequences flowing from the payment of Interest on old Debts by Contracting new ones are too obviously ruinous to require any comment. It gives us pain to observe that in comparing the Balance due from the State of North Carolina with those due from the other States, it becomes our duty to inform your Excellency that the State over which you preside is so particularly delinquent, that unless immediate and effectual exertions are made by the Government to pay these deficiencies in the General Treasury, the State must be ranked amongst those who will be responsible for all the Evils which will inevitably flow from a disregard to the political obligations by which they are bound to the other Members of the Union. This consideration must, we presume, make such an impression on the mind of every reflective person within the State to induce a Cheerful obedience to such Acts as the Legislature may Judge necessary to adopt for the immediate collection of as large a Sum in Specie as can be possibly raised in the course of the present and ensuing Year.

We have the Honor to be, with the Greatest respect,
Your Excellency’s Most Oobedient Humble Servants,