From William Short
Paris Nov. 22. 1791.
In my two last letters of the 8th: & 12th: inst. I informed you of the then position of affairs at Antwerp & Amsterdam. Nothing new can have taken place with respect to Antwerp as I then mentioned to you that a loan was to be opened there for three millions of florins at 4½. p. cent interest & 4. p. cent commission. I shall leave this place in two days so as to sign the contract there at the end of the month.
I mentioned to you also that I had authorized the opening a loan for the same sum & on the same terms at Amsterdam.1 I have just recieved a letter from the commissioners there in which they inform me that they have postponed it in hopes of being able to raise a loan the beginning of the next month at 4. p. cent interest, & ask my authorisation to do it with an augmentation of charges.2 This has surprised me very agreeably & I shall of course in answering their letter approve what they have done & give them the authorization they desire. I shall be extremely happy to find their hopes realized & shall take care to inform you of the progress of this business immediately on my arrival there. They state the charges as being somewhat above 5. p. cent.
It is too late now to stop the loan ordered at Antwerp as the prospectus will have been published two days ago, or I should do it; having some apprehensions it may prevent the bankers opening the one they speak of at 4. p. cent. In that case however I shall really suspect they have held out these hopes merely to have a pretext for saying that the translation of our loans to Antwerp prevented the reduction of the rate of interest to 4. p. cent at Amsterdam. It is unfortunately too true that such strategems are considered as legitimate among the most delicate of those who deal in money in the markets of these countries. A very short time will shew however what opinion is to be formed of the prospect which they thus hold out, & which they say is produced by extraordinary & unexpected circumstances, particularly the immense & unforeseen sales of British stock. Such a reduction in the rate of interest is an event pregnant with such a variety of good consequences that it should be aimed at by every possible means. There was every reason to believe it would be effected in the course of the next year, but I own I did not flatter myself with it sooner.
Since my last I have recieved your two letters of Sep. 2. & Oct. 3. As it is the intention of the U.S. to make up the depreciation I am glad to have been informed of it thus early. I communicated it to the commissaries of the treasury who intended as they told me making objections to such payments in future. This astonished me the more as it would be objecting to recieve from a debtor what they pay to a considerably greater amount annually to their creditors. It is well to have anticipated their reclamations since the intention of the U.S. is such. I am persuaded the Ministry would have been too prudent to have rendered public such reclamations & should suppose it highly probable Ternant3 had acted of himself. The commissaries of the treasury were highly pleased with my communication. I desired they would fix some basis which should be equally just for both parties; it was agreed between us that it would be to ascertain what would have been the rate of exchange between Paris & Amsterdam if gold & silver had continued to circulate in France. They said they would consider of this subject, but nothing has been as yet proposed. I did not mention the mode of selling them my bills for specie,4 because their laws, & the accidental circumstances of the revolution having rendered gold & silver as articles of merchandize considerably dearer in France than they would have been in the ordinary course of things it is not just that the U. S. should support this real & intrinsic increase. In my letter to which you allude5 the depreciation was stated as about half the value of exchange. Since then depreciation, I mean the comparison difference between assignats & specie, has gone on much more rapidly than the difference of exchange. There are various & obvious reasons for this.
I have communicated this intention of the U. S. to M. de Lessart who has the interim of the department of foreign affairs.6 I have not as yet however an answer from him owing probably to the unsettled state of the department.
I had from a former letter concieved that you would have preferred London to Amsterdam in order to establish a credit there.7 I shall attend however in the manner you desire to what you say on this subject in your letter of Sep. 2.
It gave me much pleasure to find by your last letter that you had noticed to the bankers at Amsterdam the momentary fall in our stock there.8 The reduction of the rate of interest will of course, as it has hitherto been, be in future the object of our efforts agreeably to your desire, & I am exceedingly happy to have been able to offer you such favorable hopes respecting it, being ever desirous to convince you of my zeal, & give you assurances of the sentiments with which I have the honor to be Sir, you most obedient servant.
Alexander Hamilton Secretary of the Treasury, Philadelphia.
ALS, letterpress copy, William Short Papers, Library of Congress.
1. Short to Willink, Van Staphorst, and Hubbard, November 11, 1791 (ALS, letterpress copy, William Short Papers, Library of Congress).
2. Willink, Van Staphorst, and Hubbard to Short, November 14, 1791 (LS, Short Family Papers, Library of Congress); Willink, Van Staphorst, and Hubbard to Short, November 17, 1791 (LS, Short Family Papers, Library of Congress).
3. Jean Baptiste de Ternant, French Minister Plenipotentiary to the United States.
4. Treasury bills drawn at Amsterdam.
6. In 1791 Claude Antoine de Valdec de Lessart was successively Minister of the Interior, Minister of Marine, and Minister of Foreign Affairs.