Wilhem & Jan Willink to John Adams, 4 February 1784
From Wilhem & Jan Willink
Amsterdam 4 febr 1784
Sir
The Houses send to your Excellency the Sheme of the projected Loan, but in order to Leave you to Judge of it, that it agrees with one at 6 Per C: intrest, we need to hand your Excelly. the explication of it; but as it is a work of our invention, we find not proper to give the explication of it to our neighbours, and we pray there fore to keep it Secreted, the more as they comprehend it against 6 Per C:, but you’ll reflect that a ballance of ƒ47844:14. is Safed, whch. we regulated also, in order to fund Largely out of it, the higher allowance of 6 instead of 4 1/2 Per C: premium for the charges.
Your Excellency’ll be pleased to reflect, that by the principal of two millions yearly is added 6 Per Ct. intrest, whch. wanted to be payed in case it was plainly to be negotiated at that term, and is yearly deducted the 4 Per C: intrest, whch. now in reality is payed, the amount intrest whch. the 2 Per C: we pay less, saves, compose the prices to be drawn in obl: at 4 Per C: intrest from 1785 to 1797, and the gratifications promised at the redeeming, so you’ll reflect that every year that sums become redeamable, we deduct the principal sum only of the first colom, and the Sum with the gratifications of the secd: colom, whch. enjoys then a ballance as mentioned more favourable, than if really borrowed at 6 Per Ct.1
We should think very good you desired the Houses to let the subscription be only at our House, but however this would be favourable to it, we may not propose it to them to avoid their displeasure.2
We pray your Excellency to mention nothing of this letter, in your answer to the houses and to believe us with real esteem. / Sir / Your Excellency’s Most / Humb & Obedt Servants
Wilhem & Jan Willink
ENCLOSURE
show’s that the sheme is more adventagious than at 6 pCt. marelÿ.—
RC and enclosure (Adams Papers); internal address: “To his Excellency / John Adams Esqr. / Hague.”
1. This letter and its enclosure should be considered in conjunction with the consortium’s 4 Feb. letter and its enclosure, above. The Willinks’ purpose is to indicate the true cost of the loan, which was not clear from the consortium’s scheme, and to persuade JA that the terms were not as onerous as they might first appear and thus to encourage him to proceed with the undertaking. In laying out the mechanics of the loan from its inception to the final redemption of principal the Willinks’ key point was that while the United States would be annually paying 6 percent interest on the principal and accrued interest, it would be paying the investors, in cash, at the rate of only 4 percent. Thus in the first year ƒ80,000 rather than ƒ120,000 would be paid out, the remaining ƒ40,000 being added to the principal, to be paid between 1800 and 1806 in the course of the final redemption of the loan obligations. The money thus saved would be enough to cover the gratuities offered the investors to take the American securities. See also a later plan enclosed with the Willinks’ letter of 16 Feb. 1784, and the final contract for the loan of [9 March], both below.
2. For JA’s effort on the Willinks’ behalf, see his 5 Feb. letter to the consortium, below.