James Madison Papers
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To James Madison from Alexander J. Dallas, 18 September 1815

From Alexander J. Dallas

18 Sept 1815

Dear Sir

The inclosed letters from Mr. Adams shew the impracticability of selling the Stock in Europe, within the limits which were prescribed.1 It is indispensable, however, to provide for the reimbursement of the heavy advances of Mess: Barings in London, and for the advance of Messr. Willincks in Amsterdam. It is time, also, to make arrangements for paying the dividends on the Louisiana stock in January next. These objects can only be accomplished by the sale of Stock in Europe, or by the purchase of Bills of Exchange here. The Stock will bring no more than 90; but exchange is now 20 per cent advance, and will, I think, rise higher. Six per-Cents are between 3–4 per cent above par in Philadelphia; they are above 96, and rising fast, in New-York; and even Boston affords a prospect of an advantageous movement, in the value of the public debt. Viewing, then, the whole ground, I am very much indisposed to authorise a sale of Stock in Europe, at a rate so much below the price here, as Mr. Baring offers; which may not only injure the credit of the Government abroad, but materially affect it at home. If, therefore, you approve of it, I will enter upon the purchase of Bills, on the best terms we can obtain, for the whole sum wanted by the Treasury, amounting to about 500000 Dollars. Indeed, I think it an object of some importance to pay away the Bank notes, which we now hold, for any effective means of satisfying our debts.

Be so good as to return Mr. Adams’s letters, with your instructions. I am, Dear Sir, most respectfully & faithfully, Yrs.

A. J. Dallas

RC (CSmH). For enclosures, see n. 1.

1Dallas probably enclosed John Quincy Adams’s 4 Aug. 1815 letter to him, with which Adams forwarded copies of his 24 and 26 July 1815 letters to Dallas (MHi: Adams Papers [microfilm ed.], reel 30). The two earlier letters expressed Adams’s doubts regarding proposals by the U.S. government’s bankers in London and Amsterdam to purchase U.S. stock at lower rates and bring the price equivalent up to the 95 percent that Dallas required by taking advantage of exchange differences between the London, Amsterdam, and U.S. markets. Adams argued that under the best of circumstances the sale price of the stock could not equal more than 94 percent, and that unpredictable and transitory market conditions made even that figure unreliable. The U.S. government, he added, could not receive information quickly enough to speculate effectively on the European market. On 4 Aug. 1815 he declared himself to be “daily more & more convinced that money cannot be obtained [in London] or at Amsterdam upon better or even so good terms as you procure it in the United States.”

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