From William Short1
Amsterdam Dec. 15. 1791.
I have now the honor of inclosing you a copy of the contract for the loan opened at Antwerp,2 which could not be had in time to go with my last of the 1st. inst. The customary ratification has been promised on it, which it is hoped will be obtained & forwarded to Antwerp. A duplicate will be sent by another conveyance. The translation is in French, the English language not having been understood by the Notary. The act is copied as nearly as possible from those passed here & you will find the terms at least as barbarous, but as it seems they compose the technical language of Antwerp I imagine no objection will be made to them, they being clear and intelligible. I recieved yesterday a letter from M. de Wolf3 in which he informed me that the loan continued going on with prosperity as well as the remittances he was making therefrom to France. I have already mentioned to you that it would be remitted in proportion as it was recieved as I understand that to be your wish, the reservation for your purposes having extended only to f 2,500,000. to be taken out of the last six millions loaned here.4
I come now to speak of the business at this place which I have postponed writing to you about until now because nothing new has occurred since my last & because I hoped after arriving here I should be able to give you information of greater certainty respecting it.
I have already informed you that the bankers5 here in reply to my letter authorizing them to make a loan at 4½. p. cent interest had told me that they postponed it in the hopes of being able to make one in a short time at 4 p cent interest on the charges being augmented.6 I informed you also how unexpected a circumstance this was to me & at the same time that my earnest desire to see it realized could not prevent my entertaining certain doubts respecting it. I wrote to them however immediately approving their having postponed the loan at 4½ p. cent, & authorized their opening one at 4. p. cent at the charges they mention.7 Lest this offer of the loan at 4. p. cent should be intended merely to defeat that at Antwerp, or at least to be made use of as a pretext for shewing the disadvantage of opening a loan out of Holland, whilst they should make use of the authorization for one at 4½. p. cent interest here, I thought it advisable at the same time that I mentioned to them that their having not used it in the hopes of reducing the interest still lower, was an additional proof of their zeal for the service of the U.S. to desire them to consider that authorization as no longer in force, but to act under that for the loan at 4. p. cent interest; if they found such an one practicable.
This was the best means I had of satisfying myself fully whether a loan at 4. p. cent here was really practicable, as now having no longer the power to make one at 4½ p. cent & the tax on loans approaching8 it was certain every effort would be used to effect one at 4. p. cent, even if their original offer should have been made with the intentions abovementioned.
I mentioned to you in my last their letter respecting the loan at Antwerp & their adding that it had rendered impracticable the expected loan at 4. p. cent. I afterwards recieved another from them saying that if that loan could be arrested in its present state & no more of the bonds given out they could still effect the loan here, but otherwise that it would be impossible.9 As they had been informed however that it was contracted for they must have known that they were placing their offer on a contingency that could not take place. Since my arrival here they persist in saying that the loan at 4. p. cent cannot take place at present, though it may be hoped for soon, & that it has been prevented only by that at Antwerp. Thus the affair stands at present.
My conversations with these gentlemen however have given me full proofs of what I informed you I was myself already fully satisfied about—namely that it is not the loan at Antwerp which has prevented the one held out here at 4. p. cent. The various reasonings they have made use of carry a strong conviction with them of what I assert. They laid down for example that the bonds of the Antwerp loan being for sale here & the money lenders finding thus an opportunity of placing their money at 4½. would not give it at 4., & this would seem reasonable. Yet they told me among other things that the tax on loans would not diminish their number, as those in whom the money lenders had confidence, such as brokers undertakers &c. would always prevent their placing their monies in loans made elsewhere, of course that those powers who have need of Dutch money must come & take it at Amsterdam. This is probably the truth. I asked them how they reconciled it however with what they had told me of the loan at Antwerp being brought here & spoiling the market for the loan they had considered as certain without it. M. de Wolf had also given me every reason that can be given in such cases to believe, that no part of these obligations had been or would be placed on the Amsterdam market. He observed that it was his interest as well as that of the undertakers of Antwerp to prevent it & accordingly to his knowlege one of the brokers from Amsterdam interested in the American loans having written to an undertaker of Antwerp to know on what terms he could take an interest with him, had been answered that he had no part to dispose of in that manner. He suspected the intention was to get possession of a certain number of the obligations either to sell them under par on the Amsterdam market, or to shew me, as a proof of the money’s coming from Amsterdam although the loan was opened at Antwerp, & of course to prove that it was no new source of credit. This you will easily concieve Sir is an underground kind of business where it would be useless & improper to employ myself in digging for the truth between assertions on one hand & denials on the other. Of course I do nothing more than hear indifferently all parties & draw the inferences which seem to me the most probable that they may serve as a future guide.
The bankers here finding that I did not consent to renew the authorisation for the 4½. p. cent loan on being told that the one at 4. p. cent was impracticable for the present, have taken some pains to shew me that the step from 5 to 4. p. cent was too rapid for the money lenders, that nothing but the extraordinarily favorable moment at which they concieved the idea of it could have justified it &c. They press me to renew that authorisation & among other reasons say that it will hasten the moment of making a loan at 4. p. cent. I asked them how they reconciled that with what they had told me of the 4½. p. cent obligations from Antwerp on this market having procrastinated the 4. p. cent loan. I was left unsatisfied on this & other points of the same nature.
On the whole I cannot at present entertain a doubt that the loan at Antwerp was the cause of the expectations held out from hence as to one at 4. p. cent. On that ground many things are easily accounted for which are inexplicable on any other. I have taken much pains to convince myself on this subject, as well because I considered it a point of importance to the U.S. as on my own account personally. For although I am fully persuaded that you will consider the loan at Antwerp as a measure that admitted of no hesitation at the time it was adopted, yet I should not have been able to have divested myself of pain if by any posterior & unforeseen contingency, it had been really the means of preventing the U.S. from reducing the rate of their interest to 4. p. cent. The bankers themselves agree that at the time of the loan being authorized at Antwerp the possibility of one here at a lower rate of interest was not discoverable by any human foresight.
I gave the bankers no hopes that I shall consent to a loan at 4½. p. cent. I shall wait until the delay necessary for making one at 4. p. cent shall be ascertained as nearly as possible—if not too considerable I shall suppose it not advisable to wait for it. Since the U.S. was not to derive the expected benefit from the present rate of exchange with France, former reasons for despatch in the making of loans do not exist.
Nothing has been yet settled as to the manner in which the payments are to be rated. The several data are known viz. the rate of exchange & depreciation & there can be no inconvenience in delaying the settlement of the mode.
The contract for the late loan of six millions was signed immediately on my arrival here.10 It will be soon forwarded for ratification as usual. The bonds are printing & I shall have finished signing them in a few days. Immediately after which & taking arrangements for a new loan here I shall return to Paris by the way of Antwerp. The present state of affairs in France will have rendered my absence of little consequence—no business but that of the most urgent & pressing nature being attended to there by the ministry.
I have been favored by the bankers here with the President’s speech at the opening of Congress & other articles of American intelligence. The last letters which I have had the honor of recieving from the U.S. are yours of Sep. 2 & Oct 3. & one from the Sec. of State of July 28.11 Your last acknowleges the reciept of mine of July 26. & 27. There were three of an older date unacknowleged which I hope will have been since recieved, they were July 8, 19 & 24.
I beg you to be fully persuaded of the sentiments of respect & attachment with which I have the honor to remain, Sir, your most obedient humble servant
Alexander Hamilton. secretary of the Treasury—Philadelphia
ALS, letterpress copy, William Short Papers, Library of Congress.
1. After serving from 1783 to 1784 as a member of the Executive Council of Virginia, Short in 1784 accompanied Thomas Jefferson to France to serve as Jefferson’s secretary, and later as secretary of the American legation in Paris. In 1789 he became chargé d’affaires at Paris.
3. Charles John Michael de Wolf to Short, December 12, 1791 (ALS, Short Family Papers, Library of Congress).
5. Wilhem and Jan Willink, Nicholaas and Jacob Van Staphorst, and Nicholas Hubbard, the bankers of the United States in Amsterdam.
7. Short to Willink, Van Staphorst, and Hubbard, December 1, 1791 (ALS, letterpress copy, William Short Papers, Library of Congress).
9. Willink, Van Staphorst, and Hubbard to Short, December 1, 1791 (LS, Short Family Papers, Library of Congress).
11. Thomas Jefferson to Short, July 28, 1791 (LS, letterpress copy, Thomas Jefferson Papers, Library of Congress).