Proceedings of the Commissioners
of the Sinking Fund
[7 June 1802]
The Secretary of the Treasury reported to the Board, that provision has already been made to meet nearly all the demands which will become due in Holland, during the course of the present year, but, that it is necessary to make immediate provision for the payments on account of principal & Interest which fall due there, during the first five months of the year 1803, and amounting to Four millions, four hundred and thirty nine thousand eight hundred & thirty Guilders, and payable at the following periods. Vizt.
That from the great diminution of Trade, between this Country and Holland, he has ascertained during his late excursion to New York and Philadelphia, that it is impracticable to obtain bills on Holland to that amount; that the rate of Exchange is already forty one Cents Guilder, and that any attempt on the part of the Government to procure the large amount now wanted, would indubitably raise considerably, the rate of Exchange: That if it shall be attempted to remit by the way of England, the loss will be also considerable, the present rate of Exchange with that Country, being now above par and raising, and would indubitably be enhanced, should Government come into the market for large purchases; and the rate of Exchange between England and Holland, being, by the last advices ten Guilders eight Stivers per pound Sterling, nor likely to become more favorable, which, supposing the whole amount in bills on England to be procurable, (which is not believed to be the fact) at 168, would, including the commission of one Cent in England, amount to forty three and a half Cents Guilder: That the Bank of the United States having been applied to, has refused to undertake to contract for making the necessarry Remittance: And that the two only considerable offers made to the Secretary, are now submitted to the Board. Vizt.
The Manhattan Company offer to remit the whole, at the rate of forty three Cents Guilder.1
Alexander Baring2 offers to remit Guilders 3,140,487.16½ payable in Amsterdam, at the following dates. Vizt.
and at the rate of forty one Cents Guilder, provided however, that the United States shall sell to him the two thousand two hundred & twenty shares of the Bank of the United States, owned by the United States, at forty five Cent advance, or at the rate of five hundred & eighty dollars Share; which last proposition is recommended by the Secretary of the Treasury as the most eligible, as, exclusively of the advantageous rate of Exchange thereby secured, the transaction will not have any unfavorable effect on the rate of Exchange generally, and by so considerably diminishing the demand, will enable the United States to obtain what is still wanted at a reasonable rate: And because in his opinion, the price obtained for the Bank shares, is more than could be obtained, were they thrown in the market for sale, and more than their intrinsic value.
Whereupon, it was resolved by the Board, “That the Secretary of the Treasury be authorized to sell the shares of the Stock of the Bank of the United States, belonging to the United States; and that the proceeds thereof be applied to the payment of the Capital or principal of any part of the Debt of the United States, which had become due to the Bank of the United States, before or during the course of the year 1796, and which remains still unpaid, in conformity to the provisions of the Act entitled “An Act making provision for the payment of certain Debts of the United States” passed on the 31st. day of May 1796.”3
James Madison secretary of State
Albert Gallatin secretary of the Treasury
Levi Lincoln Atty Genl.
secretary to the Board
of Commissrs. of Sinking Fund.