Papers of John Adams
To Wilhem & Jan Willink, Nicolaas & Jacob
van Staphorst, and De la Lande & Fynje
The Hague February 1. 1784
I have just received your Favour of Yesterday and thank you for the Promptitude with which you answered mine of the 29. Ult.
I have been informed particularly by the two worthy Pensionaries, Vanberckel and Vischer, as well as by your Letter, of the Difficulties of Succeeding with your venerable Regency, and therefore See no hopes of Saving the Bills but in the Plan of a new Loan, or in that which you propose, which I fully agree with you is much better for many Reasons.
Your Judgment in these Things, is much better than mine, and therefore, if We cannot do better, in your opinion, I will agree with you to the Sacrifice of 4 to 5 Per Cent, for all the Extraordinary Gratifications and Allowances1
I have not received from any Quarter, before I received your Letter, the least Intimation, that the Bank of Philadelphia had Stopped Payment, on Account of false Notes in Circulation.2 And I cannot credit Such a Report because, if it were true, it would have been most industriously Spread in Europe, with all its Details and Evidence, by the many Ennemies We have among the Stock jobbers in England and Elsewhere.
LbC (Adams Papers); internal address: “Messrs Wilhem and Jan Willink / Nicholas and Jacob Van staphorst / and De la Lande & Fynje.”; APM Reel 107.
1. JA arrived at Amsterdam from London in mid-January to deal with the financial crisis threatening to destroy American credit in Europe. At issue were the bills of exchange issued by Robert Morris, superintendent of finance, in amounts far in excess of the funds available from the 1782 Dutch-American loan. Lacking funds, the loan consortium faced the prospect of the bills’ being protested for nonpayment. Since July 1783 virtually no new money had been subscribed to the 1782 loan because investors lacked confidence in the ability or willingness of the United States to pay its foreign debt. Much of this wariness arose from the controversy over the continental impost that would have provided Congress with an independent source of revenue to meet its obligations. But it was furthered by the June 1783 army mutiny that forced Congress to flee Philadelphia and raised fears about the stability and even the survival of the U.S. government.
One way to have inspired and, perhaps, restored confidence in the 1782 loan would have been for the Amsterdam Regency to invest its funds. The consortium, previous to JA’s arrival, and JA, after he reached the city, pursued this option despite the traditional reluctance of Dutch governmental entities to invest in foreign loans. As JA indicates in this letter, two of Amsterdam’s pensionaries, Engelbert François van Berckel and Carel Wouter Visscher, had informed him directly that there was no possibility of investment by the regency.
The only viable alternative, first suggested by the consortium in a letter of 23 Dec. 1783, was a new loan at a substantially higher interest rate to offset the perceived risk of investing in American securities. JA wrote the consortium on 29 Jan. 1784, authorizing it to explore the possibility of a new loan if that was the only means to prevent the protest of Morris’ bills. The consortium replied on the 31st that it would do so, but that in addition to a higher interest rate there would also have to be substantial additional gratuities to the lenders (vol. 15:432–434, 470, 475–476). For the initial proposals for a new loan, see the plans submitted to JA on 4 Feb. by the consortium and the firm of Wilhem & Jan Willink, respectively, both below.