To George Washington from the Commissioners for the District of Columbia, 31 October 1796
From the Commissioners for the District of Columbia
Washington 31st October 1796
Sir,
We were favored, by last Mail, with the two inclosed Letters, which are forwarded by the earliest conveyance since their arrival; not having been received until the Saturday’s Mail had been closed—The prospects held out by Messrs Willinks are by no means flattering1—We inclose an answer to their letter which we presume will readily meet with a conveyance to Amsterdam or Hamburgh; a copy of which Letter is inclosed2—Messrs Morris & Nicholson have releived us of 50,000 Dollars of our Bank debt, and we have some reason to expect that they will relieve us of $20,000 more in which case, we shall only owe $12,000, & 10,000$ of that sum yet remains in Bank, undrawn, & is destined to meet the expenditures of the next month3—We shall probably be able to raise a further Sum of 5000 Dollars from other Sources, which will carry us to the middle of December, when the building Season will close—The months of Decr & January are those during which we have with most advantage generally contracted for one Year’s supplies of Beef, Pork, Meal, Lime & sundry other articles; on all of which contracts, it is essentially necessary to make considerable advances, & without them, no beneficial contracts can be made4—The Bank of columbia, whilst so much of their capital is absorbed by Morris & Nicholson, in their city affairs, and upon which principle alone they obtain such large discounts, can give us no effectual aid; money, however, is as necessary to our operations in the Winter as summer, and without some supplies by the middle of Decr, our Summer operations will be considerably crippled We think it therefore, adviseable immediately to lay before you such plans as appear to us most likely to succeed—The reasons given by Messrs Willink why they can at present do nothing at Amsterdam, apply with equal strength to the rest of Europe—We therefore consider that Country as for the present out of the question and that we must gain our immediate supplies within the United States, or not at all—A Sale of Lots or partial loan appear to be the only means of obtaining the object—We wish Mr Wolcott, with whom we heretofore had a correspondence on the Subject, to renew his application to the Bank of the U. States—Could we obtain from them 100,000 Dollars, to be advanced by Instalments of 7000 Dollars ⅌ Month, during the Winter Months, or, until April; and afterwards, at the rate of 11000 Dollars per month until the whole shall be drawn; it would be sufficient, with our other resources, to carry us through the ensuing Year—We would readily agree to pay an Interest of 6 ⅌ cent ⅌ annum on the whole Sum borrowed, from the day of the first advance and to draw the money by Monthly Instalments, as above proposed5—This would, we presume, be convenient to the Bank, and would really yeild them an Interest of at least 8½ ⅌ cent; and we would agree, further, to repay the money loaned, as soon as the foreign Loan is effected—If however, these terms cannot be obtained, we know not how we can do better than negotiating with the Bank of the United States for $100,000 of the new created Stock, which will sell at a loss of 10 or 12 ⅌ct, one we are very unwilling to sustain; but this will be less injurious than the loss of a Summers operations, & Congress cannot complain of a loss which arises from a Sale regulated by their own Acts, & which prohibits the Bank from selling at any price less than par6—The sooner the result of Mr Wolcots application is known, the better, as we mean, if not successful with the Bank of the United States, to apply to the Legislature of Maryland, who will soon be in session & who will probably lend us Stock on the same terms now proposed to the Bank7—We beg leave, also, to submit to your consideration the propriety of offering for Sale at Phila., New York and Boston, through the medium of some respectable Broker at each place, a number of Squares, sufficent to raise 60 or 70,000 Dollars, limiting the Sale to certain prices, under which, they shall not be bid off—If successfull, these Sales will greatly facilitate our finances, and, if not, no expense or inconvenience can arise—We have the honor to be, &c.
G. Scott
W. Thornton
A. White
LB, DNA: RG 42, Records of the Commissioners for the District of Columbia, Letters Sent. GW received this letter on Thursday, 3 Nov., and replied to the commissioners on 7 November.
1. The previous Saturday was 29 October.
The commissioners enclosed a copy of a letter written to them by Jan and Wilhem Willink on 10 Sept., and one of 27 Oct. from Robert Gilmor, which enclosed the Willinks’ 10 Sept. letter. In their letter of 10 Sept. to the commissioners, the Willinks acknowledged the commissioners’ letter to them of 13 May and its enclosures, which had included a power of attorney authorizing the Willinks to negotiate a loan in Amsterdam for 512,000 guilders for the benefit of the Federal City. Jan and Wilhem wrote: “We feel our Selves highly obliged to you for the confidence you are pleased to place in us, on the recommendation of our friends Messrs Robt Gilmor & Co. … Mr Gilmor has surely informed to you … that an engagemt is contracted with Undertakers, who receive a premium of some [percentage] for it, the brokers their brokerage … the notary, the bonds Seals must be paid … to whch the commn of the house must be added.” A scarcity of cash resulting from “forced and heavy contributions … to the Government” made it “utterly impossible to Succeed” with the new loan for the Federal City (DNA: RG 42, Records of the Commissioners for the District of Columbia, Letters Received).
The letter of 27 Oct. from Robert Gilmor reads: “Inclosed is a letter [of 10 Sept.] I received by last post from my friends Messrs W. & J. Willink of Amsterdam, whereby you will see that the powers for negotiating the loan had reached them, as also the various reasons which at this moment prevent their being able to effect it; nevertheless you may be certain that it will be done, the moment it is practicable, and I have little doubt but that will be in the course of this winter. The peculiarly distressed Situation of many of those characters in Holland … owing to the immense contributions levied on them for the last & present year, is the sole cause of the loan’s not being negotiated immediately—Messrs Willinks in a private letter to me say ‘… such is the Scarcity of money at this moment that it is utterly impossible to execute it at present; however … the moment we find it practicable, we shall open the loan in virtue of the power sent us by the Three Commissioners appointed for that purpose’” (DNA: RG 42, Records of the Commissioners for the District of Columbia, Letters Received). Gilmor was a partner in the Baltimore firm Robert Gilmor & Co., which served as the Willinks’ agent. For more on prospects of the Dutch loan, see Commissioners for the District of Columbia to GW, 13 May 1796, and n.1.
Brothers Jan (1751–1826) and Wilhem (1750–1841) Willink headed a banking house in Amsterdam, which participated in the consortium of Dutch bankers that had negotiated earlier American loans.
2. The commissioners enclosed their letter of 31 Oct. to Jan and Wilhem Willink, which reads: “Your much esteemed letter of the 10th Ulto came to hand two days ago—We are extremely sorry to find that the unfavorable circumstances of the times have rendered doubtful the success of the negotiation which you have obligingly undertaken for us—We are sorry likewise that there should have been any defect in our communications, but we did not suppose that a particular description of the Lots offered as security could be necessary, not only because the property pledged far exceeds in value the sum desired on loan, but because the faith of the United States is also pledged to make good the deficiency, should any happen after the Sale of that property. … We … shall not fail to send the desired list as soon as it can be prepared.” The commissioners added that “Mr Gilmor, was of opinion … that so high an Interest as 6 ⅌cent ⅌ annum, would be sufficient to pay all charges, and the Interest to the money-Lenders.” The commissioners agreed to the “brokerage and other incidental expences beyond the Interest payable to the money Lenders, provided the whole charges do not exceed one & an half ⅌ct on the principal sum to be borrowed.” The commissioners sought to “compleat the Loan of” $300,000 with the Willinks’ help, but they warned that failure to procure at least half of the requested 512,000 Guilders would require them to seek a loan elsewhere. In a letter of 3 Nov., the commissioners asked Gilmor to forward to the Willinks their 31 Oct. letter, “a duplicate” of which “was inclosed some days since to the president, to be forwarded from Philadelphia” (both DNA: RG 42, Records of the Commissioners for the District of Columbia, Letters Sent). For the handling of the versions of the commissioners’ 31 Oct. letter to the Willinks, see Commissioners for the District of Columbia to GW, 11 Nov., and n.2.
3. The commissioners were indebted to the Bank of Columbia for previous loans and lines of credit, including a $40,000 loan that they had secured the previous summer. The commissioners had owed at least $30,000 to the bank in early 1796 (see Gustavus Scott to GW, 14 Oct., and n.2 to that document; see also Commissioners for the District of Columbia, 22 June 1796, and n.3; and Commissioners for the District of Columbia to GW, 12 July; see also , 317, 332, 340, 357, 376–77, 387; and , Miscellaneous, 1:143). Federal City investor John Nicholson convinced land speculators to endorse negotiable notes that he and investor Robert Morris planned to use when applying to the Bank of Columbia to assume $50,000 of the commissioners’ debt. Nicholson offered the endorsers Federal City lots as security. The partners’ assumption of the commissioners’ bank debt meant that Morris and Nicholson were authorized to receive the titles of hundreds of Federal City lots, which would then serve as collateral for the endorsers. Morris also negotiated loans and enlisted the help of William Deakins, Jr., William Mayne Duncanson, and Uriah Forrest in providing security for their $50,000 note in the bank. On 26 Oct., Morris and Nicholson drew a deed for Deakins, Duncanson, and Forrest “for the consideration of $50,000, for a great number of squares in Washington city” (, 9:292; see also , 264). Morris and Nicholson previously had failed to make scheduled payments to the commissioners on the Federal City lots purchased by Morris and James Greenleaf in 1793, and therefore formulated the above scheme in order to avoid the necessity of making cash payments to the commissioners. As another means of making their scheduled payments to the commissioners, Morris and Nicholson regularly sought loans from the Bank of Columbia and elsewhere, and used their lots as security. Nevertheless, Morris and Nicholson still owed back payments to the commissioners in the amount of $60,000 by May 1797 (see , 389–91, 401; see also , 130–36).
4. In an order dated 1 Nov., the commissioners indicated their intention to contract for the delivery of numerous articles to “the City of Washington,” such as Brick, “6000 Bushells of unslaked Stone Lime,” 150 barrels of pork and 40 of beef, and 1,500 bushels of “bolted or sifted Indian Meal.” The order further reads: “On bond with approved security being given by the several Contractors for the due performance of their respective Contracts—The necessary advances will be made.” The commissioners expected to consider all contract proposals forwarded to their office “any time before the ⟨2d⟩ Monday in December next [12 Dec.]” (DNA: RG 42, Records of the Commissioners for the District of Columbia, Letters Received).
5. For prior unsuccessful efforts to secure loans from the Bank of the United States, see Commissioners for the District of Columbia to GW, 31 May, and n.4 to that document; see also Commissioners for the District of Columbia to GW, 12 and 20 July, and n.3 to the latter document. The commissioners wrote Treasury Secretary Oliver Wolcott, Jr., on this matter in a letter of this date (see the commissioners’ second letter to GW of this date, and n.1 to that document). Wolcott attempted to obtain a loan from the Bank of the United States, but his efforts failed (see GW to the Commissioners for the District of Columbia, 11 Nov., and n.3 to that document).
6. The “Act making provision for the payment of certain Debts of the United States,” 31 May 1796, authorized the commissioners of the sinking fund to borrow “on the credit of the United States, any sum not exceeding” $5 million for the payment of U.S. debt. Section 3 of that act allowed the sinking fund commissioners “to cause to be constituted, certificates of stock … and to cause the same to be sold in the United States, or elsewhere: Provided, That no more than one moiety of the said stock shall be sold under par” ( 488–89). For more on this, see Proceedings of the Sinking Fund Commissioners, 1 June 1796.
7. For the loan that the commissioners secured from the Maryland legislature, see their second letter to GW of this date, and n.2 to that document; and John Hoskins Stone to GW, 12 Dec., and n.2 to that document.