I had the honor to receive in course of post your favors of the 26th. of May from Bourdeaux and of June the 14th. from Paris. Colonel Smith having himself expressed a desire to acquaint you with the Object of his mission from motives which you will feel, I left that task to him, and of course deferd doing myself the honor of writing to you until I might have it in my power to communicate something worthy your Attention. Mr. Grand had anticipated the disagreable Information you give me of the State of our funds in Europe and will have communicated to you my situation in consequence thereof. I have taken the proper precautions to extricate myself as well as I can, but permit me to remark, that it is painful to submit to obligations which I have endeavoured to avoid since my residence in this Country. As I know not the Amount of the Sums due by the United States to Mr. Grand, I cannot be a judge of his reasons to despair of their Credit. But I know that his Banking house was what the french call mesquin until it first had the good Fortune to become known to the French Ministry by its Connection with us and until it acquired a degree of reputation by the payment made on our account. Of this I can assure you that I have many proofs in my possession.

Colonel Smith left me the fourth Inst. I find that Gentleman in every respect such as you describe him to me. Agreable to his desire I presented him to the Ct. de Florida Blanca by whom he was very well received and from whom he had a Letter recommending him in his Majestys name to the Frendly offices of the Spanish Chargé des Affaires at the Court of Portugal. I also procured him an unlimited credit with the first commercial house at Lisbon and letters of Introduction which I hope will prove agreable and useful to him.

I must own to you frankly that I was somewhat embarrassed in communicating to the Minister here the Object of Colonel Smiths Voyage. I have obtained here a declaration of his Catholic Majestys resolution to treat the commercial Interests of America as favorably as those of any other Nation. This court interested itself to releive from Captivity the Crew of an American vessel carried into Morrocco and obtained the Restoration of the vessel Captured. Not content with this Interference, it procured an offer from the Emperor to make a treaty with the United States thro the Mediation of his Catholic Majesty. Congress hath been Advised of all these Circumstances and yet no notice has yet been taken by that Body of the good offices of this Court except by some Insinuations which Mr. Jay in a Letter to me desired me to make of the future steps that Congress would take to manifest their sense of his Catholic Majestys good offices. I had in some measure fulfilled Mr. Jays injunctions. On the Arrival of Colonel Smith I was constrained to hackney (if I may be permitted the expression) the same trite declaration. It succeeded—But I must pray you, if the Subject Strikes you as it doth me, to represent to Congress the necessity of these Little Attentions. For what hath Portugal done to merit the marked thanks of Congress. An offer to protect our Commerce as that of its own subjects! That is to say, that her faithful Majestys Ships of war will not permit an Algerine or Barbary corsair, with which Portugal is at war to take any of our vessels in their view, or to retake them if captured. I must own I see no great merit in this communication of her faithful Majestys Intentions. I have looked upon it rather as an advance of the Treaty which has been so long on the Carpet and in Consequence have mentioned to Colonel Smith my Ideas of bringing it forward, that is of giving the portuguese Ministry the opportunity of Explaining their Sentiments on this point.

I have nothing from Algiers that can Induce me to beleive the Treaty with this country is in a way of being concluded to the Satisfaction of Both parties. On the contrary either this Country must submit to the extortion and even caprice of the Dey and Regency or run a risque of losing the great sums it has already expended for this object of pacification. I have Letters from our Captives in a complaining Stile. I have received accounts from the Ct. D’Expilly of the Advances he has made for their sustenance, until the 1st. of April. The vouchers and receipts are good and there is near 800 Dollars to pay him, but as Mr. Lamb has left a private account against D’Expilly in the hands of Mr. Montgomery of Alicant, I shall endeavour to pay the public Debt by the private account of Mr. Lamb. At All Events I wish to know how I may in case of Exigency reimburse the sum abovementioned.

The Death of the Minister of Indies (the Marquis de Senera) will occasion many changes here. In fact the Spanish possessions in America are in a critical Situation. By force it is impossible to preserve their dependance on this Government. But I am persuaded that the Cte. de Florida Blanca will pursue every measure of conciliation to lose nothing by the Death of Galvez. He had too many fits of phrensy and folly to Listen to reason. I enter into no details of the Politics of this Court. In the present situation of Europe, you are at the fountain head and can better develop than myself the Catastrophe. I own I cannot plunge thro’ the chaos. I have the cypher you mention and you may make use of it when you think proper. By your manner of employing it I shall judge of what I ought to do. I shall never be more happy than in having an opportunity of assuring you of the great regard and Esteem with which I have the honor to be Your Excellencys Most Obedt. & Hble. Sert.,