To James Madison from Albert Gallatin, 15 March 1805
From Albert Gallatin
Treasury Department 15th March 1805
Sir
I have the honor to enclose the copy of a letter written to Mr Merry1 respecting the proposed payment of the last 200,000 St. due to Great Britain in London, instead of making it at Washington, and also a copy of my correspondence with the Bank of the United States on the same subject.2 It is as much the interest of Great Britain as our own that the payment should be effected in that manner. Even Dollars if they could obtain them here would at present afford little or no profit as a remittance there; but Dollars cannot be obtained, and on Gold there is a certain loss, exclusively of the delay, expense, and risk which attach to the transportation of specie. There is therefore the highest probability that the British Government will gladly accept the payment in London. Yet we have no absolute certainty on that subject, and Mr Merry who verbally said that he could not foresee any objection, has at the same time so far avoided a commitment as not even to answer my letter. I need not say how extremely inconvenient it would be for us, after having made the remittance to England, to be obliged to make payment here. It is therefore important that immediate notice of our intention should be given to the British Government so as to obtain their formal assent. Permit me to request that you will, in your dispatches to London, give particular instructions on that Subject. You will perceive from the enclosed letters from the Bank, that the money will certainly be in the hands of Sir Francis Baring & Co. for that purpose before 15th of Septer., and most probably in the course of July next. I have the honor to be with the highest respect Sir, Your obedt. Servt.
Albert Gallatin
RC and copies of enclosures (DLC: Gallatin Papers); Tr and Tr of first enclosure, two copies (DNA: RG 59, ML); letterbook copy of first enclosure (UkLPR: Foreign Office, ser. 115, 14:30–31); letterbook copy of first enclosure (ibid., ser. 5, 45:100–101). RC docketed by Wagner, with his note: “Third instalment due to GBritain.” For enclosures, see nn.
1. Gallatin enclosed a copy of his 5 Mar. 1805 letter to Anthony Merry (2 pp.; docketed by Wagner), saying that since “the impossibility of obtaining Dollars in America, the relative value of gold in the United States and in the Dominions of Great Britain, and the expence and risk incident to the transportation of specie” made it more convenient for the United States to arrange through the Bank of the United States for paying the £200,000 sterling in London rather than by sending specie from the United States as had been done the two previous years, he was repeating the request he had made in a previous conversation that Merry inform Gallatin if he had “any reason to suppose that the Government of Great Britain has formed any arrangement which would forbid their accepting the payment in London.”
2. Gallatin enclosed an extract (2 pp.) from his 4 Feb. 1805 letter to Thomas Willing, president of the Bank of the United States, stating that although Gallatin was “not permitted by Law to pay” in Europe and did not know if the British would accept such payment, he would “try to remove some difficulties, and run the risk of the others” if the bank would agree that the export of so much specie was inconvenient and cooperate in the necessary arrangements for purchasing the bills of exchange on Europe that would facilitate the transfer. He probably also enclosed copies of Willing to Gallatin, 11 Mar. 1805 (2 pp.), stating that the board of directors of the bank had agreed to pay £200,000 sterling to Gallatin’s order in London by 15 July, if possible, and no later than 15 Sept., and Gallatin to Willing, 15 Mar. 1805 (1 p.), stating that he had instructed the treasurer of the United States to remit a draft for $200,000 to the Bank of the United States. In his full letter to Willing of 4 Feb. 1805, Gallatin also discussed the best methods to transfer funds in order to relieve the Merchants and New York Banks and the Manhattan Company, which were undergoing difficulties, without exacerbating a shortage of specie in New York (DLC: Gallatin Papers).