To John Jay, with Enclosures
Amsterdam March 16. 1788.
In a letter of the 13th. inst. which I had the honor of addressing you from this place, I mentioned in general terms the object of my journey hither and that I should enter into more particular details by the confidential conveiance which would occur thro’ Mr. Adams and Colo. Smith.
The board of Treasury had, in the month of December, given notice to our bankers here that it would be1 impossible for them to make any remittances to Europe for the then ensuing year, and that they must therefore rely altogether on the progress of the late loan. But this, in the mean time, after being about one third filled, had ceased to get forward. The bankers, who had been referred to me for advice by Mr. Adams, stated these circumstances, and pressed their apprehensions for the ensuing month of June, when 270,000 florins would be wanting for interest. In fine, they urged an offer of the holders of the former bonds to take all those now remaining on hand, provided they might retain out of them the interest on a part of our domestic debt, of which they had also become the holders. This would have been 180,000 florins. To this proposition I could not presume any authority to listen. Thus pressed between the danger of failure on one hand, and an impossible proposition on the other, I heard of Mr. Adams’s being gone to the Hague to take leave. His knoledge of the subject was too intimate to be neglected under the present difficulty, and it was the last moment in which we could be availed of it. I set out therefore immediately for the Hague, and we came on to this place together, in order to see what could be done. It was easier to discover, than to remove the causes which obstructed the progress of the loan. Our affairs here, like those of other nations, are in the hands of particular bankers. These employ particular brokers; and they have their particular circle of money lenders. These money lenders, as I have before mentioned, while placing a part of their money in our foreign loans, had at the same time employed another part in a joint speculation to the amount of 840,000 dollars of our domestic debt. A year’s interest was becoming due on this, and they wished to avail themselves of our want of money for the foreign interest, to obtain paiment of the domestic. Our first object was to convince our bankers that there was no power on this side the Atlantic which could accede to this proposition, or give it any countenance.
They at length therefore, but with difficulty receded from this ground, and agreed to enter into conferences with the brokers and lenders, and to use every exertion to clear the loan from the embarrasment in which this speculation had engaged it. What will be the result of these conferences is not yet known. We have hopes however that it is not desperate, because the bankers consented yesterday to pay off, and did actually pay off the capital of 51,000 florins which had become due to the house of Fizeaux and company on the first day of January, and which had not yet been paid.
We have gone still further. The Treasury board gives no hope of remittances till the new government can procure them. For that government to be adopted, it’s legislature assembled, it’s system of taxation and collection arranged, the money gathered from the people into their treasury, and then remitted to Europe, must enter us considerably into the year 1790. To secure our credit then for the present year only, is but to put off the evil day to the next. What remains of the last, even when it shall be filled up, will little more than clear us of present demands, as may be seen by the estimate inclosed. We thought it better therefore to provide at once for the years 1789. and 1790. also; and thus to place the government at it’s ease and our credit in security during that trying interval. The same estimate will shew that another million of florins will be necessary to effect this. We stated this to our bankers, who concurred in our views, and that to ask the whole sum at once would be better than to make demands from time to time so small as that they betray to the money holders the extreme feebleness of our own resources. Mr. Adams therefore has executed bonds for another million of florins: which however are to remain unissued till Congress shall have ratified the measure; so that this transaction is something or nothing at their pleasure. We suppose it’s expediency so apparent as to leave little doubt of it’s ratification. In this case much time will have been saved by the execution of the bonds at this moment, and the proposition will be presented here under a more favorable appearance according to the opinion of the bankers. Mr. Adams is under a necessity of setting out tomorrow morning: but I shall stay two or three days longer, to attend to, and to encourage the efforts of the bankers to judge and to inform you whether they will ensure us a safe passage over the month of June.
Not having my letters here to turn to I am unable to say whether the last I wrote from Paris mentioned the declaration of the emperor that he should take a part in the war against the Turks. This declaration appeared a little before or a little after that letter, I do not recollect which. Some trifling hostilities have taken place between them. The court of Versailles seems to pursue immoveably it’s pacific system: and from every appearance in the country from which I write we must conclude that it’s tragedy is wound up. The triumph appears complete and tranquillity perfectly established. The numbers who have emigrated are differently estimated from 20. to 40. thousand.
A little before I left Paris, I received a piece of intelligence which should be communicated, leaving you to lay what stress on it it may seem to deserve. It’s authenticity may be surely relied on. At the moment of the late pacification, Spain had about 15 ships of the line really ready for sea. The convention for disarming did not extend to her, nor did she disarm. This gave inquietude to the court of London, and they demanded an explanation. One was given which they say is perfectly satisfactory. The Russian minister at Versailles getting knolege of this, became suspicious on his part. He recollected that Spain during the late war had been opposed to the entrance of a Russian fleet into the Mediterranean, and concluded, if England was not the object of this armament Russia might be. It is known that that power means to send a fleet of about 24. ships into the Mediterranean this summer. He went to the Ct. de Montmorin, and expressed his apprehensions. The Count de Montmorin declared that the object of Spain in that armament was totally different; that he was not sure she would succeed; but that France and Spain were to be considered as one, and that the former would become guarantee for the latter that she would make no opposition to the Russian fleet. If neither England nor Russia be the object, the question recurs, who is it for? You know best if our affairs with Spain are in a situation to give jealousy to either of us. I think it very possible that the satisfaction of the court of London may have been pretended, or premature. It is possible also that the affairs of Spain in South America may require them to assume a threatening appearance. I give you the facts however; and you will judge whether they are objects of attention, or of mere curiosity.
I have the honor to be with sentiments of sincere esteem & respect, Sir, Your most obedient & most humble servt.,
P.S. I enclose herewith an extract of a letter from the Ct. de Vergennes to the French Ambassador at the Hague which will make a remarkeable chapter in the history of the late revolution here. It is not public, nor should be made so by us. Probably those who have been the victims of it will some day publish it.
RC (DNA: PCC, No. 87, ii); endorsed by Charles Thomson: “Letter 16 March 1788 Mr T. Jefferson Read 22 May 1788 23 May Referred to Mr Baldwin Mr Duane Mr Otis Mr Kearny Mr Carrington.” PrC (DLC).
1. At this point TJ deleted the word “altogether.”