To James Madison from William Jones, 25 September 1813
From William Jones
Treasury Department Septr. 25. 1813. 2 PM
Dear Sir
Unless some additional proposals come in by the northern mail this day which I do not expect, the Loan will be closed at 88¼ money for 100 Stock payable agreeably to the instalments in the advertisement.1 I could have closed it at 88½ allowing them to pay the whole down at the Second Instalment but some inconvenience would have arisen in varying the terms from those published and moreover the difference is in favor of the Government. The sum offered and which we could have taken at 88. was 12.651,000. About 2.000,000 was at 88 and those who take the Loan get about one third less than they offered which will have a good effect. The result upon the whole is very satisfactory. On the present occasion it would probably have been hazarding too much to have invited distinct proposals engaging the full sum offered to the highest bidder and so on to the next highest bidder to such extent as the Govmt might choose to accept and without giving to the bidders the option of other terms than those offered by the bidders severally, but I have no doubt the effect produced by this Loan will prove that it will be the best plan in future and I am now satisfied that if it had been adopted on this occasion the Loan would have been taken at 90.
As it is, considering there is no dead interest to be paid the Loan is one perCent better to the Govermnt than the 16,000,000. Loan.2 I am very sincerely and with best wishes your obd Servt
W Jones
RC (DNA: RG 59, ML).
1. Jones’s 30 Aug. 1813 notice soliciting proposals to fill the $7,500,000 loan recently authorized by Congress first appeared in the Daily National Intelligencer on 31 Aug. 1813. It specified that the proposals, which would be accepted through 25 Sept. 1813, should state the amount to be loaned and the rate at which the prospective lender was willing to exchange the money for stock, which would carry an interest rate of six percent. Lenders were to provide the funds in five monthly instalments beginning in October 1813.
2. For the terms of the $16 million loan, see John Henry Sargent to JM, 4 July 1813, n. 1. By “dead interest,” Jones probably meant additional interest earned on instalments paid early. He avoided this expense to the government by informing lenders that interest would accrue only as of the date of the scheduled instalment (, Finance, 2:651, 662).