From William Short
The Hague Aug. 6. 1792
I have had the honor of recieving your letter of May the 7th. enclosing the Presidents confirmation of the contract made for the loan at Antwerp, which has been delivered to M. de Wolf.1
I informed you in my last2 that I expected him here in order to speak of a new loan at 4. p. cent; in consequence of his having suppressed a part of the last at 4½. p. cent. I have formerly mentioned3 to you my having promised to him if he would stop issuing the bonds of that loan, that he should be supplied with at least as many at 4. p. cent interest & that the commission should if necessary be augmented. He in consequence thereof found means to suppress 950. of those bonds viz. deliver only 2050. So that although the loan is nominally of three millions, it is in fact only of two millions & fifty thousand florins—the 950. bonds which were numbered, but have not been signed either by me or the banker were left with M. Morris. In the hurry of my departure I did not take a reciept for them, but have written to him to send me one that I may forward it to you, in order that it may appear that they have not been made use of.4
I now have the honor of inclosing you sir, the account of the reciepts & expenditures of these 2050 obligations as furnished me by M. de Wolf. Duplicates of the rects. were regularly forwarded me, which I have put into M Morris’s hands in order that he might regulate finally with France the payments made on acct. of this loan.
My former letters explained to you how it happens that these payments were begun by remittances from Antwerp & afterwards made in cash there, to the agent employed by France for that purpose.5 The then situation of affairs added to the intention of the U.S. to make up the depreciation to France left no hesitation as to the choice.
I then contemplated the U.S. making a very honorable & advantageous arrangement as to these payments—honorable because they made up the depreciation on the assignats—& advantageous because this depreciation if measured by the rise of the price of commodities in France (which would have been just)—or even by the rise of the price of gold & silver (wch. for many reasons of locality—such as want of freedom in their being bought & sold on the market—acts of violence—& even decrees of the assembly, not imputable to the U.S, were higher & a less just measure)—this depreciation I say, would have been much less than the fall of exchange & of course have left a considerable profit to the U.S.
It was impossible for me at that time to have foreseen that the final settlement of this depreciation would have been thus delayed, much less that it wd. have been postponed so as not to have been settled even by the government which created the assignats (of which there seems now real risk) & of course with one which will have much less scruple in arguing that the depreciation was greater than it really was. As I fear the U.S. will suffer from this delay, I must beg you to bear in mind the causes of it as related to you in my several letters. It will be otherwise so natural for you to attribute this delay & the injury arising from it (if there should be any) to the person whom you charged with this business, that I hope you will excuse my anxiety on the subject, & my importunity in here briefly stating the stages of the delay.
On recieving your letter announcing the intention of the U.S. as to the depreciation on the assignats6 I informed the Minister & commissaries of the treasury of it (confining the promise made to future payments notwithstanding your letter would have embraced the former ones also)7 & desired them to fix on some basis for ascertaining the real depreciation of assignats. I was obliged to go to Holland before this was done. I returned to Paris on the 15th of January. At that time I had been long without hearing from government, but being convinced that the appointment of the minister to Paris could not be postponed & would be made during the then session of Congress, it seemed probable that every day might bring intelligence of the person, & indeed the person himself, even if he should have been in America. Considering therefore that this appointment would be the latest declaration of the will of the President—that the person appointed would necessarily be the one who enjoyed the greatest degree of the confidence of government, & of course most apt to fulfill their expectations & most capable of promoting their interests in every kind of business I thought it my duty, in one of this delicate kind particularly to postpone it, until it should be known to whom the interests of the U. S. in France were to be permanently confided & the more so as it was impossible that any inconvenience could arise from a short delay, the rate of exchange—the price of gold & silver & of the principal articles of consumption in France during that period being known. Let what will be the event I am persuaded sir, you cannot disapprove this disposition in a public servant.
I had not long remained in this situation before I learned from M Morris in London that the President had nominated him for that place, & although he did not arrive in Paris until the month of May, yet it would certainly have been improper in me to have taken any arrangements in any business which would have admitted of delay, before his arrival; & particularly as I had every reason to suppose that he would immediately receive his credentials & come on to Paris.
On his arrival I put him in possession without delay of whatever occurred to me relative to the interests of the U.S. at that place, & particularly pressed on him the necessity of regulating with the present government the depreciation promised them on the payments made at Antwerp. I had the honor of mentioning to you in my letter of June 28 the two causes which occasioned some delay with M Morris, at the time of my leaving Paris. Since my arrival here I have never ceased pressing & importuning him on the subject. I in-closed him also the extract of your letter of April the 2d. relative thereto.8 The changeable situation of ministry necessarily threw impediments in the way of business, but this was of peculiar kind & if connected only with that of making further payments, they would necessarily have removed all causes of delay. I therefore advised M Morris not to connect it with any other business as I apprehended from his letters he had done, but to reduce it to this simple proposition “We have paid you money at Antwerp on which we have promised to make compensation for depreciation—we have now more money ready for you at Amsterdam—fix the depreciation existing at the time of the payments made at Antwerp—say what it is now & we will immediately order you the payments of the cash at our disposition at Amsterdam.”9 I should have supposed from their present wants of money abroad their answer would not have been delayed twenty-four hours & that they would have been thus placed on the soliciting side of the question, whilst M Morris would have had the finest opportunity of using all the arguments which must occur to every body, for shewing what the real difference was between the depreciation of the assignats & the fall of exchange, wch difference constituted the gain of the U.S. I have begged him also in my letters to bear in mind the advantage of settling this depreciation with the government which created the assignats rather than one that should succeed to them & be built on their ruin.10 In fine I have done everything that depended on me to accelerate this business & do not doubt that M Morris has done the same. Still it is not settled—& from the present state of things in France I fear it will not be with the present government.
This leads me also to mention to you another subject which has given me much uneasiness, namely the suspension of our payments to France & consequent accumulation of monies in the hands of our bankers at Amsterdam on which the U. S. pay a dead interest. You were informed by me from Amsterdam & successively since, of the cause of this suspension viz. the hope of applying these payments towards succours to the French islands—of course having them invested in the productions of the U. S.11 This would have been so advantageous an operation that I could not hesitate delaying the payments a short time after finding that the minister of the marine12 had brought forward this proposition to the assembly & the more so as at that time the sums on hand dispensable were small; not knowing then that you had determined not to draw for the whole which you had previously announced to me.
After my return to Paris in Jany there was a constant expectation of the Minister’s proposition then referred to the colonial committee, being reported & decided on. Whilst in this expectation I learned that the confidence of government as to their affairs in France was transferred to M. Morris & expecting his arrival without delay in Paris the motives mentioned above could not but have their influence in inducing me to desire the procrastination of this business also; not knowing but, & indeed supposing, that M. Morris from his knowledge in commercial concerns, might chuse some mode unknown to me, for carrying this operation into effect. Still knowing that the operation in itself was highly advantageous I determined to act in it if it became necessary previous to M Morris’s arrival. Accordingly being pressed by the Minister I stipulated you should hold 800,000 dollars at his orders for supplies to the islands—& that the rate at which the dollars should be credited should be fixed between the two countries as stated to you in my letter of April 22. Those of April 25 & May 14 will have informed you, how this business came to be again delayed & of its passage into M Morris’s hands after his arrival at Paris the 7th of that month.
Thus sir you will see by what means it came to pass that no part of a loan opened in Decr was paid to France at the period of my departure from Paris, although in the mean time the sums in hand had been augmenting & promised to be still more so, by the seizing the opportunity of opening a second loan at 4. p. cent, of which I gave you notice by a few lines written for that purpose only, on the 26th of May.13
As to any delay which may have taken place since that time, I can only say that thinking it proper to concert this business with the representative of the U. S. at Paris I have not ceased since my arrival here writing & pressing I may add, importuning him to fix with the French government the rate at which they would recieve the florins at Amsterdam or some other mode of paying them the sums on hand. I preferred the former as being more expeditious & more sure in these times of uncertainty—& more advantageous also if the U. S. are to make up depreciation. I pressed him particularly to detach this subject & the settlement of the Antwerp payments from all others, & as the ministry were fluctuating to get over formalities & to apply directly to the commissaries of the Treasury who were a permanent body & to whom the minister would necessarily refer him as had always been done to me by the ministers of my time.14 Finding that the delay was not removed & seeing no reason to suppose it would be, with the present government, I at length wrote to M Morris, that unless he could immediately fix on some better mode of payments I should think myself obliged to direct our bankers to commence their remittances to France; fearing that I should not be able to justify myself to you for holding so long so large sums at a dead interest to the U. S., when it was expected that they had been applied towards extinguishing their debt to France.15 The last letter from him in answer there to was dated the 30th. of July & recd. here the 4th inst.16 In it he informed me that he had the day before recd the acct from the commissaries of the treasury & had written to them that morning to know whether they chose to recieve money in Amsterdam or Paris & that if there was the least difficulty he should direct Grands house17 to draw on our commissioners at Amsterdam18 & pay to the treasury. He observes some what less will be gained than by remittances, but that the state of things there is such that remittances are by no means sure. I answered this letter the instant of recieving it to inform him that I had formerly had an application from M Grand to be made use of in this business which judging improper I had referred to you, & that you had approved my not employing an useless intermediary19 —that my own opinion therefore was against his doing it now. I advised his treating immediately with the commissaries of the treasury who might purchase his draughts on the bankers at Amsterdam at the exchange which he might fix with them—& in doing which he might regulate also the depreciation to be allowed. I mentioned that you had formerly suggested my thus selling my bills to them for specie which I had not done, because I thought a more advantageous mode of ascertaining the real depreciation might be adopted.20 If he thought otherwise he might now make use of the plan suggested by you.21 I hope this will prevent his employing M Grand, as his treating immediately with the commissaries will not only be a more economical, but also a more unexceptionable mode in other respects.
Mr Morris adds also in this letter that the commissaries state their losses on the Antwerp payments by depreciation (as they have given credit for them in their acct at the current rate of exchange) at 1,368,939 livres & that he shall tell them that these losses & the compensation if any, will form a subject for the consideration of our government “whose order I shall ask.” This is in fact nothing more than leaving it unsettled with the present government who created the assignats & levied on them, to be settled by a future one who will be raised perhaps on their destruction & interested in depreciating them [in] the mode which I have always desired so much to avoid. It is possible however M Morris may see some advantages in it which do not occur to me & he will no doubt do whatever shall most advance the public interests.
I have been desirous to explain these several circumstances minutely to you because many of the advantages which I formerly contemplated as possible to obtain for the U.S. both in the payments made & to be made & also in a general conversion of their debt to France, may perhaps be lessened from a delay, which might be attributed in some degree to me, if I did not recall to you sir the motives wch induced me to postpone as much as possible taking definitive arrangements until the will of the U.S. should be more fully represented, & which I cannot doubt would be approved by every government & particularly ours, being at so great a distance.
I shall set out tomorrow for Amsterdam in order to sign the contract & bonds of the second 4. p cent loan.22 I have already informed you that 2½ millions of florins exclusive of the ½ million you announced to me as having been drawn for in your letter of April 2d. would be held to answer your draughts, & that I meant to comprehend therein the 800,000 dollars mentioned to you from Paris23 so that except these three millions I considered all other sums arising or on hand of the late loans, (making the proper reservations for your standing orders at Amsterdam) as to be applied towards the French debt unless directed otherwise by some of your future letters—accordingly it was my wish that the payments to France should be immediately made counting on future entries to answer your draughts in proportion as they should arrive.
I observe from your letter of May the 7th that you thought it possible I should be absent from this country. To my great astonishment I have recd. no further orders respecting this absence, than simply a notification of my being designated for that purpose24—& that I should find here the instructions relative thereto. From letters which others have recieved here I fear much & cannot doubt indeed that those intended for me have miscarried.
I was inadvertently drawn off from the business at Antwerp, with which I began this letter, before completing what I intended to say to you respecting it. M. de Wolf has been here, & on my objecting to some part of his acct. which from the Cr. side wd seem to indicate that he had disposed of the first 1500 bonds, much sooner than the Dr. side would authorize from the dates of the rects of M. de Broeta.25 He acknowleged the justice of the observation & attempted to account for it, by my having directed him towards the end of Dec. to suspend his remittances—on which he had told the lenders that not chusing to have so large sums on hand he wished them not to make the payments until required. On the 6th of Jany I removed the suspension & directed him to make these payments to M. de Broeta. He had then to advertise the several lenders dispersed through the Netherlands to bring on that money wch. occasioned some delay. Yet as they had tendered their money they had a right to take date from that period with the usual term of grace, which de Wolf now tells me he had agreed should be a month as at Amsterdam, although he in the beginning had told me it should be less. Yet as all powers give great facilities in these cases I did not think it would be proper to be too difficult in this instance & after making him consent to the justice of these objections to the statement of his acct. I promised him I would send it to you in its present form with the observations I have made, & particularly as he had made a sacrifice in suppressing the bonds at 4½. p. cent
He had built his hopes on having a loan of 3. millions at 4. p. cent, although I had never promised more than a sum equal to that suppressed of the 4½. p. cent loan & which was as mentioned 950,000 florins. He had written to M. Morris to get him to prevail on me to extend it to three millions, although he was obliged to confess that the Antwerp market was incompetent to so large sums monthly as he had formerly promised—& even that he could not engage for more than f250,000 a month—so that the loan would have been twelve months on the market. There are so many reasons against such a step that I had no difficulty in rejecting it on its own ground, without recurring to your preference to Amsterdam, & the advice of holding out to the bankers the hopes of confining to that place future loans if they can keep the interest at 4. p. cent. Opening a loan elsewhere for 3. millions would totally defeat that idea—but one of a smaller sum at Antwerp might be represented to them, as it really is a continuation & unavoidable consequence of the former loan. Consequently notwithstanding M. Morris’s letter I determined to confine the loan at Antwerp to the sum suppressed of the former loan or if I went beyond it, to make de Wolf consider it absolutely as a favor to him & of course pay the sacrifice. When I proposed to him to suppress the bonds at 4½. p. cent in order to substitute to them others at 4. p. cent I held out as an inducement the augmentation of the commission. On his now pressing for this loan being extended beyond the bonds suppressed I told him I would consent to extend it to 1½ million, to be completed in six months at 250,000 florins a month provided he would give up the augmentation of commission, promised on the bonds suppressed—& undertake the whole at a commission of four per cent. To this he consented. I exacted of him however that there should be no kind of uncertainty in this business—that he should have written contracts with the undertakers who should be bound to furnish the sums agreed for. Otherwise he might keep as it were a kind of open shop for the bonds of the U.S.—dispose of as many as he could & keep them until they were all disposed of which though a saving for him, would be an uncertain & dishonorable mode for the U.S. Notwithstanding he made great protestation to the contrary yet I am convinced now he had it in view when he pressed for extending the loan to three millions. For although he would have had no scruple in undertaking for that sum as he proposed—yet on my explaining to him my ideas with respect to his having real & bona fide contracts with the undertakers so that the U.S. might know fully & certainly what to count on, he returned to Antwerp in order to consult with these undertakers & told me he should come here in a short time to conclude the contract. He has written to me from thence that Sweden having opened a loan at 5.p.ct interest & the Emperor also one at 4.p.cent with an high commission—& most of the undertakers being engaged therein—& others being now absent—& himself obliged on account of his health to absent himself also to go to a watering place, he had found it best to postpone the loan until the end of the next month26 viz this his letter being dated July when he was morally sure of effecting it. Thus that matter now stands. Should it be effected it will be obtaining money at 4.p.cent instead of 4½. which was the rate of the suppressed bonds. Should it not be then effected Antwerp may be still held out in terrerem to our bankers at Amsterdam who know nothing of what has passed with respect to the loan there.
I hope in future that my letters to you will be less prolix & tedious. Asking your pardon for the minute details which I have sometimes thought myself obliged to enter into hitherto, I have the honor to add assurance of the sentiments of attachment & respect with which I am
sir your most obedient & most humble servant
Alexander Hamilton Secretary of the Treasury Philadelphia
ALS, letterpress copy, William Short Papers, Library of Congress.
9. Short to Morris, July 23, 1792 (ALS, Columbia University Libraries).
12. Antoine François, Marquis de Bertrand de Moleville, who had introduced the proposition in December, 1791, was replaced by Jean de Lacoste in March, 1792. Lacoste was in turn replaced by François Joseph Gratet Dubouchage in July, 1792.
13. Letter not found.
14. Short to Morris, July 23, 1792 (ALS, Columbia University Libraries).
15. Short to Morris, July 23, 1792 (ALS, Columbia University Libraries).
16. ALS, William Short Papers, Library of Congress.
17. The French banking house of Ferdinand Le Grand.
18. Willink, Van Staphorst, and Hubbard.
24. On January 24, 1792, Short and William Carmichael had been appointed “Commissioners for negotiating and concluding, with any person or persons, who shall be duly authorized by his Catholic Majesty, a convention, or treaty, concerning the navigation of the river Mississippi” (Executive Journal, I description begins Journal of the Executive Proceedings of the Senate (Washington, 1828), I. description ends , 99). See also “Notes on Thomas Jefferson’s Report of Instructions for the Commissioners to Spain,” March 1–4, 1792.
25. Joseph de Broeta.
26. Wolf to Short, July 26, 1792 (ALS, William Short Papers, Library of Congress).