Mr. Clay to Mr. Seward

No. 101.]

Sir: Your despatch No. 184 is received, together with the report of the Secretary of the Treasury. I have read with great interest Mr. McCulloch’s able report, for which his Fort Wayne speech had already prepared me. His views are, in my opinion, rigidly correct, and I shall regard it as a great misfortune if Congress does not at once carry out his policy. The currency must be reduced till it comes to par with gold. And I am also in favor of taxation and redemption of principal and interest of our debt by immediate and steady effort. I dissent only from the Secretary’s idea that our bonds should not be held abroad.

In old countries, where production has reached its maximum, a large foreign debt, especially for unproductive expenditures, would be oppressive, if not ruinous. But in our country, full of undeveloped resources, capital borrowed at something like six per centum per annum could be employed in reproductive expenditure for some centuries, yet, perhaps, with eminent advantage to our whole people; for that is one reason I desire to see the Secretary’s policy carried out. Our credit would be at once established in Europe, and an immense number of our bonds would be still taken here. As we have been fortunate in our generals, so now we may pride ourselves upon our finance ministers. I am sure S. P. Chase was the right man for the war expenditures, as H. McCulloch will prove to be the right man for the peace establishment.

I am, sir, your obedient servant,

C. M. CLAY.

Hon. William H. Seward, Secretary of State, Washington, D. C.