Since my last in which I mentioned that the national assembly had voted an augmentation of their armament to forty-five ships of the line, nothing has transpired in England to shew what effect it produced in the British cabinet. We know only that on the exchange war is considered as inevitable in consequence of it. I should suppose however that Mr. Pitt would not take any decisive measure on account of the vote of the assembly, but would wait to see whether that vote can be carried into effect, for he must certainly know that there is a great difference between the vote and its execution in a disorganised government. Should France not be able to arm under the present circumstances, it is leaving matters in the very posture which Mr. Pitt must desire, and of course I should imagine he would not risk the uniting the several parties here by an hostile attack, under the hope of the advantages to be gained from commencing the war against them unprepared.

Whatever be the designs of the British cabinet, it is certain that their naval preparations are carried on with unremitting ardour. I still suppose that their original design was to frighten Spain into a commercial treaty, and if possible into a political alliance, that the expense of the first preparations having not effected that purpose, it has been judged proper to add a second stake in hopes of recovering the first loss, and that finally if it were possible for France to fit out her fleet and shew a firm and decided countenance, the game would be abandoned, and that arrangements as to Nootka sound would be proposed and accepted as the only object of the negociation.

These preparations in England have embarassed our commerce and harrassed our seamen there beyond measure. A merchant of Boston who was with me yesterday assured me there had been more than three hundred American sailors impressed into the British service, that the expence and difficulty of rescuing them from their captivity was such as to deter many of the owners from attempting it and particularly as so many obstacles are thrown in their way as to render their applications for the most part useless. I imagine you will have recieved particular accounts of this business from Mr. Cutting who has exerted himself in it with much zeal and activity.

I mentioned to you in my last the apparent repentence of several regiments who had mutinied. Since then the Regiment du Roi in garrison at Nancy has relapsed and been the occasion of vigorous measures being taken which fortunately met with success. An inspector was sent by the King to Nancy to settle the accounts of the revolted regiments, as the want of that settlement was the pretext of their disorder. This inspector being ill treated by a Swiss regiment in garrison there and in revolt he drew his sword, wounded several and made his escape to Luneville. In this extremity M. de Bouillé was ordered by the King to take such troops as he thought proper, and such a number of gardes nationales as he could procure and march against the garrison of Nancy. On arriving near Nancy he harangued his army, read to them the decree of the assembly, and finding they were willing to support him determined to act with vigour. Deputations were sent to him from the three regiments who composed the garrison desiring to capitulate. He refused their demand and ordered them to retire out of the town to receive his orders. A part of the two French regiments obeyed. The Swiss and some soldiers of the Regiment du Roi refused and defended the entrance of the town. As soon as the column of M. de Bouillé’s army approached the gate they were fired on by the guard posted there. An engagement immediately ensued. The gate was forced and the garrison made prisoners after a combat of several hours in which three or four hundred were killed. Two commissaries are sent to enquire into the causes of this revolt which is attributed to a variety of circumstances. Some say it is owing to the severities exercised by the officers, who are all aristocrats, against the soldiers on account of their patriotism. This as you may suppose is the most popular reason and that which is most readily adopted. Others think that a faction in the assembly whose power depends only on disorder, have excited these revolts in the several garrisons to strengthen their party. The most natural cause however seems to be, the example which the garrison of Nancy had already seen of several regiments having imprisoned their officers and pillaged their military chests with impunity.

The intelligence of this engagement at Nancy and its success made a very different impression here, in and out of the assembly. The assembly voted their thanks to the municipalities and gardes nationales who had taken a part in this business, and approved the conduct of M. de Bouillé and the regular troops. The mob of Paris on the contrary assembled. Money is said to have been distributed amongst them. Several feuilles volantes were circulated to animate them against M. de Bouillé, who it was said had begun the counter-revolution by massacring the most patriotic regiments and the peaceable citizens of Nancy. It was said also that a majority of the assembly were bribed by the government and had abandoned the cause of the people, and that the people should avenge themselves on them and on M. de la fayette who had supported M. de Bouillé. The mob insisted also on the ministers being turned off, and many on their being hanged. Motions were also made for going to bring the King from St. Cloud where he then was. No attempt was made to disperse the mob, but strong guards were placed before the houses of the ministers to prevent their entering them. M. Necker, who is no longer a favorite with the people retired to his country-house in alarm, and the Minister of war also thought it prudent to pass the night out of his house. A heavy rain which came on dispersed the mob, and since then the assemblies of the people in the Thuilleries and Palais-Royal have not been more numerous than usual.

Many journalists continue to spread inflammatory writings against the assembly, ministry and M. de la fayette, on account of the affair of Nancy. Nothing is more common now than to hear motions made in the Palais-Royal for hanging the latter as having deserted their cause. There is some reason to fear also that the gardes nationales of Paris are not unanimous in approving those who acted under M. de Bouillé. This shews that M. de la fayette has less influence on them than had been hoped. Still however there is no doubt that a great majority place implicit confidence and are much attached to him.

Mr. Necker as you know has been long intending to go to the waters on account of his health. This late mob and the pressing solicitations of Madame Necker have determined him to realize his intention. He has written a letter to the assembly notifying it. This is considered as the resignation of his office; on the receipt of his letter, and its being read, the order of the day was called for and no further notice was taken of it. What is still more extraordinary, it has had no effect whatever on the stocks. The other ministers seem to be determined to try to keep their places. It is as yet uncertain whether they will succeed. The best and only security they have for them is that no member of the assembly can accept a place in the ministry.

The last public ministerial act performed by M. Necker was to send a memorial to the assembly against a plan which is now before them for emitting two milliards of paper money for paying off what is called the dette exigible. You will receive this memorial with the plan for the emission and the debates on the subject in the newspapers and journals which I sent yesterday to M. de la Motte to be forwarded to you. The statement of the committee of finance which brings on this subject divides the whole national debt into three heads: 1. la dette constituée viz. rentes viageres and perpetuelles, where the Nation is only answerable for the interest annually, and can never be called on for the principal; 2. la dette exigible consisting of arrears due, and the price of venal offices suppressed, &c. 3. the debt which will become due hereafter at fixed terms. It is proposed to pay off the dette exigible by the sale of ecclesiastical and Royal lands. One plan for effecting the sale is to give certificates to the creditors of the exigible debt bearing an interest until the sale, and to recieve them in the purchase of the lands. Another is to pay off these creditors by a paper money, which shall also be redeemed by the sale of the same lands. The difference between these two plans as you will see, consists principally in this, that in one instance the public creditor recieves a certificate bearing interest until the lands are sold; in the other he recieves a paper money, with which he can pay his own private debts. Mirabeau who has hitherto been the avowed enemy of paper-money both in his writings and speeches is now the most vigorous supporter of this paper-money scheme. Its advocates insist on its being not paper-money, because there is a pledge for its immediate redemption. They are answered several ways, but irresistibly by those who tell them that the value of the pledge is not known, and that it may be and probably will be far inferior to the emission. The apprehension of this paper money has rendered specie more scarce than ever. The commercial towns and some of the provinces will certainly remonstrate against it, and as the assembly has determined that the question shall not be decided before the 10th. of this month, the disposition of the assembly will perhaps change. Hitherto it has appeared in favor of the paper money.

Among the papers which I sent you yesterday is one called L’Ami du peuple. It is published and circulated here daily. I have sent it to you to give some idea of the liberty of the press of this country. There are several others of the same kind. Some feeble attempts were made to prevent these papers being cried in the streets, but in vain, and lately the national assembly directed the Procureur du Roi au Chatelet to prosecute the author of one called c’en est fait de nous, in which he tells the people that the only remedy to their present evils is to seize and kill the queen, imprison the dauphin, and hang seven or eight hundred members of the assembly with Mirabeau at their head.

The report of the committee of impositions has not yet been laid before the assembly although several days have been fixed for it. They adhere to their plan relative to tobacco. It will probably pass, as well because it is the shortest way of getting rid of the business, as because the merchants only among the members of the assembly will oppose it.

We remain still ignorant here of the proceedings of Congress. The only intelligence that I have had for a long time has been through letters recieved here by the Americans at Paris and in London. It is on this authority alone that I have answered the variety of enquiries made me ministerially and otherwise. Your two last letters which have come to my hands were of July 1. and 8. You will soon see I hope that they produced the effect you desired. I beg you to be persuaded of the sentiments of real attachment with which I am, dear Sir your friend & servant,