Wilhem and Jan Willink, Nicholaas and Jacob Van Staphorst,
and Nicholas Hubbard to William Short14
Amsterdam 25 August 1791
We must confess to you Sir, that your sticking to reduce the Charges We fixed with you for the Five per Cent Loans of the United-States, after We had placed them upon the very lowest footing, is truly surprizing to us, more especially as It is striving to recede from a Bargain already agreed between us, and approved by the Secretary of the Treasury of the United-States, as well as militating against the Mode ever practised here, in agreeing for the Charges in this Line of Business by the Lump; From which We informed you personally and You knew thro’ the Communication of our Letters to the Treasury, It ought not to be expected We should depart.
To demonstrate the Truth of these Assertions, and thereby to convince you, that our Charges of Four per Cent for all Expences on the Five per Cent Loans, are already fixed, and independant of any Change in the Premium We may pay to the Undertakers, We beg leave to refer you to this Part of our Letter of 23 Decbr last to the Secretary of the Treasury,17
“Mr. Short informed us It was expected also, He should be able to fix more advantageous Conditions for the Charges of the future Loans, and notwithstanding We assured him the last Loan18 at Four and an half per Cent for Commission, Premiums, Brokerage and all other Expences was as reasonable as It ought to be, as well as much cheaper than Russia and the other Powers of Europe paid, He stuck to this Point, with a Perseverance We must confess not to have a little surprized us: But considering the Relation We already have with the United-States, and the Injury any Application to others, would certainly have caused to their Credit and Interests, We consented to negotiate the future Five per Cent Loans, at Four per Cent, for Commission, Premiums, Brokerage & all other Charges, thereby offering a most unequivocal Testimony of the Value We set upon our Connexion with the United-States, and our Desire to satisfy and accomodate their Government all in our Power. Mr. Short having assented to the Offer authorised us &c.”
The aforesaid Letter We delivered open to you—Sir, inclosed in One directed to yourself, with this Request, “We take the liberty to inclose you open, our Letter of this Date to the Secretary of the Treasury of the United-States, entreating you to peruse same, and approving the Contents to forward it.”19 The bare Inspection of this our Letter of 23 Decbr to the Secretary of the Treasury, wherein We tell him, You had consented to allow us Four per Cent, for Charges of Negotiation on the Five per Cent Loans, and your full Approbation in forwarding it without any remark, much less reclamation, establishing most incontrovertibly, that the Charges of Four per Cent were fixed for all the future Loans at Five Per Cent Interest; We shall now proceed a Step further, and wave for a Moment only, our Right to decline entering into any disenssion upon (the premium) an abstract Part of a general & compound Arrangement, moulded by our Agreement with you into a single Result, by evidencing in an equally strong Light, that this Agreement was however as well by you as ourselves, concluded upon the Basis, that the premium upon the American Loans would be more than 1½ per Cent; Which We do by a Reference to our Letter of the 1 March last20 to the secretary of the Treasury, that was approved of by you here in all its Parts; We therein merely satisfy the Secretary of the Treasury (as He confesses) of the Mode of conducting and closing the Business of Loans here, dissected the Charges upon the last Loan of March as follows
“You’ll thereby see, that after deducting
|2||pr. Cent Premium|
|½||Ct. for Seals, Notary’s Signatures, Charges &c. Advertisements, Papers for the Bonds and other incidental Expences, there remains but|
|1||“ “ for our commission|
|4||Per Cent that We fixed with Mr. Short to do the Business for:|
We at that time calculated to give but 1½ per Cent Premium to the Undertakers, But when It was question of only a Sacrifice of our Interest, to accelerate Mr. Short’s Wish to open the Loan immediately, We did not balance a Moment to make it, by allowing Two per Cent premium, the least We could obtain the Money for.”
In the aforegoing Instance, We to hasten the Accomplishment of your Wishes, by giving up One half per Cent in the Premium, reduced the Compensation for each of our Houses, below the Basis upon which was calculated the Agreement between You and Us, and even to what is paid for Brokerage only; An Allowance too disproportionate in every respect, the Brokers having but very little Trouble and none of our great risques & responsibility, to be just in any degree, and much less to be rendered permanent, thro’ your endeavors to establish our Resignation and Surrender of our Rights in one Instance, to be a Precedent for our being stripped of them in future Transactions, notwithstanding they are guaranteed to us by express Agreement.
Being most fully persuaded, that the aforegoing Eclaircissements, are more than abundantly sufficient, to convey irresistible Conviction to your Mind, of our being incontestably entitled to four per Cent Charged on the future Five per Cent Loans for the United States, and thus removing all Objections to extending the Loan You order us to open; We have presented it for Six Millions of Guilders at Five per Cent per Annum Interest, to be dated the First Day of September next, and reimbursable in Five Instalments of f 1,200,000—.— each, commencing the First Day of September 1802 and ending the First Day of September 1806. Which Loans by means of our preparatory Measures, has been immediately undertaken with all the Eclat You can wish, and has exhibited a new Proof of the Degree which the Credit of the United-States has attained here, to the great Satisfaction of their Friends, and Astonishment of some Persons, To whom the Prosperity and rising Power of the United-States, are by no means pleasing prospects.
Had We entertained any the least Particle of Doubt, of this our Conduct, meeting your hearty Approbation and securing us your Thanks, It would have been removed by the following Reflexion, The most important of which You could not know, and the others perhaps You were not perfectly acquainted with.
Before the Fifth Day of next Month, a Loan will be determined upon, to be raised by the Province of Holland for the Service of our East-India Company, to the large Amount of Eight or Ten Million of Guilders; To precede which was essentially necessary for the Success of the Loan for the United-States, and there every Moment was precious, to conclude the Bargain with the Undertakers.
It is now reduced to a Certainty, that One of the new Taxes to be laid upon this Country, and that will it is presumed take place about the Commencement of the ensuing Year, is a Duty of One per Cent upon the principal of all Loans that will be raised here for Foreign Powers, A very heavy Incumbrance; to spare which as much as possible for the United-States, demanded every exertion, to bring as soon as could eligibly be effected, the greatest Amount of Loans for the United-States upon our Market that might be practicable, especially as exclusive of the Honor and Advantage, of reimbursing at once all the Arrears of Interest and Reimbursment of the Instalments due upon the principal of their Debt to France; The United-States are subject to no useless Interest, as the Payments can be made to the National-Treasury of that Country as fast as We receive the Monies.
Experience has demonstrated by the last Loan of March, that It will be possible to launch a new Loan upon the Market for the United-States, as soon or very nearly so after the present Loan for Six Millions, as if We had confined it to half that Sum; Wherefore as the Credit of the United-States justifies our entertaining the hope, to have it in our Power to raise another Loan for them, towards the end of the present or Commencement of the New Year, We may flatter ourselves, that by arranging your Journey, so as to remain here about that Period, You may at same time as You sign the Bonds for the Loan of next Month, pass those for another Loan, so as to save the new Duty upon that also; An Economy much more essential and important than a triffling Difference upon our Charges.
Besides Sir, We have taken into consideration, What probably has not yet attracted your Attention, that the Time is now fast drawing near, when the United-States will have to reimburse the Instalments of the first Loan21 they borrowed here, and that those will gradually become consequential.
Thus, the United-States having to provide here for
The Reimbursment of the Arrears of Interest & Instalments due on the principal of the French Debt.
The Payment by anticipation of the Instalments of ditto not yet due, to avail the United-States of the actual unprecedented favorable Exchange.
The large Sums annually to be paid here, for Interest upon the Loans raised in Holland, and which the Secretary of the Treasury, has given us a standing Order to discharge from the Monies in our hands.22
The Reimbursments of the Instalments upon the Dutch Loans as they fall due.
And It being highly probable, the Secretary will wish to provide for all these Objects by Loans here, until the full Organisation & complete Operation of the Bank of the United-States, and until the produce of the Taxes already laid or that yet are to be laid, to face the Civil List, Interest upon the Domestic-Debt, Interest upon the State-Debts assumed & other Objects of Expenditure of the United-States, shall yield a Surplus, to be remitted here to the Discharge of their Foreign Engagements; We cannot but judge, You will be deeply impressed as We are, with the propriety nay the absolute Necessity, of letting slip no Opportunity, to raise Monies for the United-States, to secure the punctual Fulfilment of all these Objects, since the Reimbursments to France, can be made to such immense Advantage to the United-States, without subjecting them to any useless Interest; And consequently fully approve our Zeal & Exertions to promote their Interests, and to facilitate the Plans of the Secretary of the Treasury; Who has in the most flattering Terms, sanctioned the whole of our Conduct in the Management of the Affairs of the United-States, and done Justice to our Moderation, in fixing the Conditions with you, for negotiating the future Five per Cent Loans.
The Bonds of the Six Millions Loan will be dated the First of next Month; But It would not have been possible to deviate from the constant practice here, of leaving to the Underwriters the faculty to receive them immediately after their signing a Contract or whenever they please, with the Enjoyment of the running Month’s Interest as customary, that is, They benefit of the Interest upon the Months they take their Bonds in, and thus pay no more for them the last Day of the Month than they would have done the first Day; The reason, Why by far the major Part nay almost the whole Receipts of Monies, are on the very last Days of Months; Thus, by allowing Interest only from the First Day of September, We should have postponed the Opening of the Loan and Receipts of Money as for whole Month, without any good purpose whatever; But on the contrary, We should thereby have subjected the United-States, to a longer risque for profiting of the favorable French Exchange, and protracted for a Month, the Opening of a fresh Loan for the United-States, Which might have precluded the possibility to effect it, timely to save the Duty upon Foreign Loans. The Undertakers are allowed until the last Day of next January to receive their Bonds in, an equal Portion however in each Month. But You may depend Most of the Capital ones, will avail themselves of their priviledge to furnish their Monies as soon as they choose, to call for large Parcels of them early, and thus that our Receipts of Money will be important in the first Months: We even do not doubt, We shall have a good Sum the Commencement of next Month at your Disposal, About which We shall therefore expect your immediate Orders. At present the Exchange at Paris is more favorable for the United-States than at this place: Perhaps You may be able to fix with the Commissioners of the Treasury, the Course as at Paris, at which the United-States shall have credit, for our Payments to Messrs. Hogguer Grand & Cy.23 Or, if You prefer leaving the Settlement of this Point to us, or that We should make Remittances for the Monies, You may depend upon our utmost Attention, to fulfill your directions, to the greatest advantage of the United-States.
By a Vessel on the point of sailing for New-York and likewise by way of England, We communicate to the Secretary of the Treasury as You desire, the Success and particulars of this Loan, at our Charges fixed with you and approved of by him, for the future Five per Cent Loans.24
Your draft on us advised in your Letter of 18 August for f 220—.— order Grand & Co:25 for your Salary, will meet usual punctual Honor.
We are respectfully Sir Your most obedient and very humble Servants
Wilhem & Jan Willink
N & J. Van Staphorst & Hubbard
Willm. Short Esqr.
14. LS, Short Family Papers, Library of Congress.
15. LS, Short Family Papers, Library of Congress.
16. ALS, letterpress copies, William Short Papers, Library of Congress.
17. Letter not found.
18. For a description of this loan, see H to Willink, Van Staphorst, and Hubbard, November 29, 1790, note 1.
19. LS, Short Family Papers, Library of Congress.
20. Letter not found.
21. For a description of the Holland loan of 1782, see Willink, Van Staphorst, and Hubbard to H, January 25, 1790, note 3.
23. Hogguer, Grand, and Company was acting as agent for the French government in Holland.
24. Letter not found.
25. Ferdinand Grand and Company, French bankers.