To Alexander Hamilton from William Short, 11 March 1791
From William Short
Amsterdam March 11. 1791
Sir
I have the honor of writing to you at present for the last time from this place. I am now signing the bonds1 as fast as I recieve them from the notary. It is possible they may be finished to-morrow & in that case I shall set out the day after for Paris.
In my last of the 4th. inst. sent by the way of England was inclosed a translation of the bonds of the present loan. I now add a copy of the original in the Dutch language. Duplicates will be sent by the bankers.
In a former letter sent by the way of England I mentioned to you a letter which I had recieved from M. de Montmorin relative to the offers of Jeanneret & Co.2 You will recieve enclosed at present a copy of the same No. 1.3 together with the instructions therein alluded to No. 2.4 It is probable M. Otto5 will have previously communicated them. I have learned lately what I had before reason to suspect that Jeanneret & Co. are entirely without capital or credit & further of a character which shews it would be unsafe to treat with them their offers being supported by the minister is the only circumstance which entitles them to any kind of attention. They are besides of a nature which there is no probability of your being disposed to accept. You will observe by the instructions of M. de Montmorin that the ministry is in the disposition you would desire with respect to this affair.
I mentioned in my last that the committee of finance might be led into a different disposition by those who have an interest in the purchase of the American debt. The day after I wrote that letter I recieved from the Chargé des affaires of France at the Hague,6 one of which I inclose you a copy No. 3.7 & my answer No. 4.8 I am persuaded that this letter was written at the instigation of the committee of finance. They had been told that your draughts were for the loan now making. Those who wish to make this purchase & of whom some are probably in that committee imagined that if this could be ascertained that the assembly would perhaps force the government to treat for the sale of the debt, & that they would treat on more favorable terms on finding that the loans made here by the U.S. were destined for other purposes. My complete ignorance of your views on this subject disabled me from giving any other answer to M. Caillard. I know not as yet whether it will be thought satisfactory at Paris, where so much is done at present by intrigue & corruption, & where there are so many who are endeavouring to speculate on this debt. So far as it depends on the ministry I have no apprehension of any thing being done contrary to your wishes but the ministry have no weight against a decree of the assembly & these decrees are easily surprized by a committee, or a few members of a committee.
I have lately recieved from Mr. Grand9 of Paris a letter of which I inclose a copy No. 510 & my answer No. 6.11 These letters will suffice to explain themselves & the present situation of the subject which gave rise to them. They are submitted to you Sir that you may give such instructions relative thereto as you may think proper. Mr. Grand will probably persist in his complaint & carry it to the cognizance of the government of the United States. I have learned since I wrote my letter to him that the house here in which I supposed him interested has the name of Grand from his son’s12 being one of the partners & that he himself is not concerned in it.
The moment for making loans at present has been found so favorable that Russia has opened one for six millions of guilders instead of three as was intended; & it is already filled. The policy of Hope13 who conducts the business of that country with much propriety has always been never to bring on a loan at an improper moment & never to let slip unemployed one that was favorable. By the date of the bonds used in the late loan it appears that it was to have been made in August last. He found it proper to hold them up until now notwithstanding the exigencies of the Court of Petersburg. It is by the prudent & judicious conduct of this house that the credit of Russia has been maintained here throughout the war, & in such a manner that it is much superior now to what it was when the war begun. Hence it is that the services of Hope, for which however he is most extravagantly remunerated, are considered as more essential to Russia than an alliance with any of the secondary powers of Europe.
The city of Amsterdam have lately made a loan here of six millions of guilders to restore order to the affairs of their bank which have for some time appeared in an alarming posture. The interest is only 3½. p cent. The principal merchants have taken the most of it on themselves so that it was soon filled. This produced a good effect for a few days on the paper of the bank. It is again declining, which would seem to indicate that the root of the evil is deeper than had been supposed.
The price of foreign stock on this market is as when I wrote you on the 22d. of February. That of the loans made on the liquidated debt of the U.S. varies from 1 to 40 p cent above par, according to the conditions of these loans. In them the liquidated debt is alienated at different prices according to the time at which the loan was made. The present rate of the loan is graduated accordingly & will follow the rise of the funds in America.
I have had several occasions of observing during my stay here that the distance of the United States is a considerable drawback on their credit in the minds of the people in general. The idea of this distance consisting for the most part in the communications from thence being rare. The inconvenience would be much diminished if authentic papers & information were regularly sent here & published in the gazettes in the Dutch language. This might be done by some of your clerks & an arrangement made here with a gazetteer. The people being thus accustomed to have something respecting the U. S. before their eyes regularly two or three times a week would insensibly suppose America nearer to them—they would necessarily become better acquainted with the real situation of the U.S. & of course be more disposed to judge for themselves. This would contribute more than any thing else to emancipate your foreign operations from a dependence on the agents employed here. At present it cannot be denied that a combination among a few of the more powerful & more enlightened would much embarass, perhaps totally defeat any loan the U. S. might wish to make. I have formerly explained to you14 in what manner their influence operates on the money lenders, which will have convinced you also that the best manner of counteracting such inconveniences is to unfold the U.S. fully to the public view, & keep them constantly in their sight. You will easily believe that the houses here who recieve the most constant information from America, & who are four or five only, can have no inducement to disseminate the knowlege they thus acquire, & of which the principal value consists in the exclusion.
There has been an apprehension, here some time past that the states of Holland intended laying a tax of 2½ p. cent on foreign loans negotiated in the province. The idea is abandoned for the present year at least & it is thought it will not be again resumed. Yet if the exigencies of the country should increase, by their being drawn into a war, of which the probability has become greater within a day or two, I should not be surprized that this resource should be tried on foreign loans made in future. If adopted in Holland it wd of course be extended to the other provinces.
I beg leave to refer you to my letters to the secretary of State, (one of this date, which goes by the way of England & to one which I shall write to him to-morrow to go by the American vessel which carries this) for information relative to some decrees of the national assembly on navigation & commerce, & also relative to the present alarming situation of the affairs of that country.15 You will easily see from thence that there is little probability of the exchange rising for some time & that the payments which you may order to be made in future will be on as advantageous terms as the last.
I have the honor to be with sentiments of the most profound respect, Sir, Your most obedient & most humble servant
W Short
The Honble. Alexander Hamilton Secretary of the Treasury.
ALS, letterpress copy, William Short Papers, Library of Congress.
1. See Short to H, March 4, 1791.
3. See enclosure.
4. See Short to H, February 7, 1791, note 7, and enclosure.
5. Louis G. Otto, French chargé d’affaires in the United States.
6. Antoine Bernard Caillard.
7. See enclosure.
8. See enclosure.
9. Ferdinand Grand, French banker, who through his brother was connected with Hogguer, Grand, and Company.
10. See enclosure.
11. See enclosure.
12. Apparently Short is mistaken. Ferdinand Grand’s brother, George Le Grand, was a partner in the house of Hogguer, Grand, and Company.
13. Henry Hope, head of the House of Hope, a long-established Amsterdam banking firm.
14. See Short to H, December 2, 18, 1790.
15. On March 11, 1791, Short wrote to Thomas Jefferson:
“A letter which I received by the last post from my Secretary in Paris, informs me that the National Assembly have changed their decree with respect to the american oils imported into France, on the representation of the committees they have reduced the duty from 12 ₶. to 6 ₶. the quintal. I do not find this circumstance mentioned in the journals of the Assembly, but he gives it to me as having that moment recieved it from the member of the diplomatic committee who was most instrumental in obtaining this reduction & who desired him to communicate it to me. The committees were for some time determined to propose the reduction to 8 ₶ only. The Secretary whom I left at Paris urged the reduction to 6 ₶ with so much force that he at length prevailed on them to risk it. Their greatest objection was the fear of its not passing in the Assembly, & that the aversion of the members to change any of their decrees together with so considerable a reduction would defeat the plan altogether. I can have no doubt that this reduction has been decreed, from the manner in which it is communicated to me, still I should have been better satisfied, if it had not been omitted in the journal. The committees calculate that the internal duties hitherto paid on oils & to which the american were subject (independent of the duty of 11 ₶. 5s. the barrel on entering the kingdom) were upwards of 5 ₶. the quintal. By the arret du conseil, the duty would have been at present only 7 ₶. 10. the barrel of 500 lb. Still the 6 ₶. being in lieu of all other duties is considered as giving greater facilities to the importation of the american oils than they would have had under the former government.
“I received also by the last post an account of some alterations made by the Assembly in their decree concerning the importation of tobacco. It is confined to french vessels & those of the country where it is made, except that from the Levant which can be imported in french vessels only. With respect to that made in the United States it must be brought immediately from thence to France. The difference of duty on this article imported in french or foreign vessels remains as when I last wrote to you viz: 6 ₶ 5s. the quintal. The ports at which foreign tobacco is allowed to be entered are very numerous as well in the atlantic as the mediterranean, & indeed are all where any american vessel would wish to go.
“I am making use of the same means to get changed that part of the decree that makes so great a difference between french and american vessels which I did with respect to the oils. I have long ceased however even attempting to conjecture what the Assembly will do in any case. There are many arguments to be used for inducing them to put the vessels of the two nations on the same footing—the objection however which will be constantly made will be the foreign tonnage to which their vessels are subjected with us. They will insist probably on making a similar difference in their ports, but as I am sure that they were surprized into the fixing a difference which exceeds the value of the freight I have some hopes of inducing them to lower it.
“Scenes of disorder and riot are exhibited from time to time in Paris of the most alarming kind. The departure of the king’s aunts is one of the pretexts. It is not yet known here whether they have been allowed to quit the kingdom. The repairing of the Chateau de Vincennes in order to transport there some of those confined in the different prisons of Paris gave rise lately to a mob which threatened bloodshed between the rioters and the Garde Nationale. At the same time a number of persons either totally unknown or known as enemies to the present order of things entered in crowds into the king’s apartments. It being found that they had arms concealed under their clothes, they were disarmed, & some of them arrested. The reason they give for their conduct is a desire to defend the king whom they supposed in danger in that moment of disorder. It is probable that was the true cause—but many suspect an intention in them to make use of that moment for carrying off the king to some other part of the kingdom or perhaps out of it. Such scenes must be expected so long as the present anarchy continues & it is certain that the Assembly either from inability or design do nothing to prevent it.
“The Bishop of Spire, one of those foreign princes who suffer by the decrees of the National Assembly has refused absolutely to enter into negotiation for an indemnity. The manner in which he has answered the propositions of the Minister of France would induce a belief that he counts on being well supported. This however will probably depend on circumstances. The disorders of France may in time beget so much internal discontent as to invite foreign interference, but I cannot think they would have any thing of that sort to fear if their Government were properly organised & order restored. Even the greatest enemies of the revolution wish now for peace & personal security at the expence of the sacrifices they have been obliged to make.” (LC, RG 59, Despatches from United States Ministers to France, 1789–1869, January 16, 1791–August 6, 1792, National Archives.)
On March 12, 1791, Short wrote to Jefferson:
“I mentioned to you in my letter of yesterday, sent by the way of England, the reduction made by the Assembly in the duty on oils. The post which arrived last night, after the departure of that letter, brought a journal which contained the decree. It is so concise as to oils that it would appear to me obscure if I did not find that the Secretary whom I left at Paris, considers it as a substitution for the duty of 12 ₶. formerly fixed by the Assembly. The decree is as follows, copied literally from the journal.
“‘Sur le rapport fait par M. Vernier le decret suivant est rendu.
“‘Les toiles de chanvre & de lin, importées de l’etranger, seront assujettiés au droit de 70 ₶. le quintal.
“‘Celles importées par terre de la Flandre Autrichienne & de l’Allemagne seront assujetties au droit de 36 ₶. le quintal et les toiles blanches à 45 ₶. le droit sur les huiles & savons sera de 61 ₶.…’
“This letter will be sent by an american ship which is here & will contain one for the Secretary of the Treasury. The bonds are signed & I leave this place tomorrow for Paris. When there I shall be better able to judge of the real situation of the affairs of that country. At present I can not do better than to send you the following extract of a letter received from the Secretary whom I left at Paris. I have already told you that he is a man much to be relied on & enjoying fully the confidence of M. de la Fayette. I must add also that he is in general subject to be easily alarmed, & of course that some allowance must be made for that disposition in the writer. The letter is dated March 7, 1791. ‘Les journées sont orageuses. Jamais les partis n’ont eu un développement si violent. Depuis leur derniere avanture (the entering armed into the king’s apartments as mentioned in my last) les aristocrates sont dans une fureur qu’ils ne cherchent point á dissimuler, l’interieur des Thuilleries est en combustion. Les Jacobins & 89 (two clubs composed of the popular part of the Assembly) se livrent un combat a mort pendant ce terns lá on a de justes allarmes sur les rives du Rhin. Un courier arrivé hier m’apprend qu’il y un corps de 5000 hommes rassemblé en souable prés Basle, que l’on recrute à force chez le Margrave de Bade, qu’a Carlsruhe & Worms on ne parle que d’invasion, que Coubourg annonce ouvertement qu’il va commander une armée, que toute l’Alsace ce defie de plusieurs des commandants militaires, & que l’ennemi entretient des correspondances allarmantes & presque à decouvert avec les facteux de l’interieur. Les insurrections les plus violentes menacent ici nous ne pourrons éviter une explosion ces jours ci & elle pourra être terrible. S’il se fait une invasion, on ne peut prevoir combien de tetes tomberont. M. de La Fayette est maintenant en bonne posture, mais l’assassinat le menace de tous les côtés. Jacobins & Aristocrates dechainent contre lui tous les coupe jarrets. Dans l’affaire de Vincennes (mentioned in my last) il a pensé deux fois être tué.’
“Two persons have been arrested in Alsace recruiting troops for what they call l’arme des Princes. It becomes every day more probable that the discontented joined by whatever troops they can collect, will enter France & seize on some frontier place. The object will be probably merely to feel the pulse of the people & to retire if they find it unsafe to advance. In such a case much is to be apprehended for the Queen’s life—after such a calamitous scene, should it take place, it is impossible to say what would be the denouement, but certainly terrible.” (LC, RG 59, Despatches from United States Ministers to France, 1789–1869, January 16, 1791–August 6, 1792, National Archives.)