From Wilhem & Jan Willink, Nicolaas & Jacob
van Staphorst, and De la Lande & Fynje
Amsterdam 4 febr 1784
We have received your Excellency’s esteemed favour of 1 febr, by whch. we See you are pleased to consent of an extraordinary Sacrifice, whch. we pleaded by the undertakers, but could by no means prevail on them, and enfin declined it finally: thise displeasing circumstances brought us in the necessity to take their opinion on a New Loan against 6 Per C: intrest, as your Excellency judged perfectly right, that it was much more preferable to do it, than to get the bills protested, we in consequence have proposed to them the inclosed Sheme, on whch. Sunday or monday next they jointly have promised the answer; that in case we can offer to them a reasonable premium & gratification some of them seemed inclined to hearken to it and we stipulated the ready payment of so many hunderd thousand Guilders this month that the bills falling due at the end to such amount will all be payed, we want therefore to pray Your Excellency to authorise us to Conclude it on this footing with 6 Per Ct. allowance for all the premiums brokeridges, gratifications Notary Seals obligations commn. &c & every expence besides. in case we can be happy enough to bring it to consistance, when we Shall directly draw up the Obligation to Sign for your Excellency and direct further matter in the most regular Way and order, desiring your answer here on for our government.1
We remain With great esteem / Sir / Your Excellency’s most / Humbl & Obedient Servants
Wilhem & Jan Willink
Nics. & Jacob van Staphorst.
de la Lande & fynje
We shall forward the packets received of Mr Dumas for Congress by first opportunity, whch. please to communicate to him With our Compliments.2
Sheme of a Loan of Two Millions of Guilders, against 4 Pr. Ct. Pr. Annum dated 1 Feby.
In favour of the Money Lenders Shall be distributed a Set of obligations bearing also intrest of 4 Pr. Ct. Pr an: to those Numeros drawn in presence of a Notary & Witnesses, in the manner as specifyed here under.
|Pmo: Feby. 1785||fiftÿ obligations to gether . . . . .||ƒ 50.000.–.–|
|—————1787||Sixty . . . ″ . . . . . . . . . . ″ . . . . .||″ 60.000.–.–|
|—————1789||Seventy. ″ . . . . . . . . . . ″ . . . . .||″ 70.000.–.–|
|—————1791||Ninéty . . ″ . . . . . . . . . . ″ . . . . .||″ 90.000.–.–|
|—————1793||One Hundred . . . . . . . ″ . . . . .||″ 100.000.–.–|
|—————1795||One Hundred Twenty. ″ . . . . .||″ 120.000.–.–|
|—————1797||Two Hundred . . . . . . . ″ . . . . .||″ 200.000.–.–|
|The Redeeming shall be–|
|Pmo: Feby. 1800. With . . . . . . . . . .||ƒ 250.000.–.–|
|& the obligations distributed 1785 . . .||″ 50.000.–.–|
|With a Gratification of 5 PCt.|
|Pmo: Feby. 1801 With . . . . . . . . . .||ƒ 250.000.–.–|
|& the obligations distributed 1787 . . .||″ 60.000.–.–|
|With a Gratification of 6 PCt.|
|Pmo: Feby. 1802 With . . . . . . . . . .||ƒ 250.000.–.–|
|& the obligations distributed 1789 . . .||″ 70.000.–.–|
|With a Gratification of 7 PCt.|
|Pmo: Feby. 1803 With . . . . . . . . . .||ƒ 250.000.–.–|
|& the obligations distributed 1791 . . .||″ 90.000.–.–|
|With a Gratification of 8 PCt.|
|Pmo: Feby. 1804. With . . . . . . . . .||ƒ 250.000.–.–|
|& the obligations distributed 1793 . . .||″ 100.000.–.–|
|With a Gratification of 9 PCt.|
|Pmo: Feby. 1805 With . . . . . . . . . .||ƒ 250.000.–.–|
|& the obligations distributed 1795 . . .||″ 120.000.–.–|
|With a Gratification of 10 PCt.|
|Pmo: Feby. 1806 With . . . . . . . . . .||ƒ 500.000.–.–|
|& the obligations distributed 1797 . . .||″ 200.000.–.–|
|With a Gratification of 15 PCt.|
Repartition of the Obligations
RC and enclosures (Adams Papers); internal address: “To his Excellency / John Adams Esqr / Hague.”; endorsed: “Messs Willinks & Co. / 4. Feb. Ansd 5. 1784.”
1. This letter and its enclosures should be considered with Wilhem & Jan Willink’s 4 Feb. letter and enclosure, which immediately follow. Although couched in the arcane phraseology and calculations of eighteenth-century Dutch finance, these documents present with remarkable clarity the nature of the loan the consortium was pursuing on JA’s behalf. The diminished creditworthiness of the United States in the eyes of Dutch investors is evident from the consortium’s enclosed “Sheme.” In 1782 JA and the consortium had negotiated a 5 million florin loan at 5 percent interest. Two years later a loan of 2 million florins was the maximum possible, and the undertakers were willing to commit only to the first million. Moreover the cost of the loan would be much higher, first because it would ostensibly be offered at 6 percent, but also because extraordinary gratuities or gratifications were needed to induce investment in American securities. This meant that to the original 2 million florins in principal would be added additional loan obligations to the amount of 690,000 florins. These would be distributed to investors by lottery in the years 1785, 1787, 1789, 1791, 1793, 1795, and 1797. Interest would be paid on the principal, including the additional 690,000 florins, from 1784 through 1799. Then, from 1800 through 1806, the 2,690,000 florins in principal would be repaid in installments, but an additional gratification would be paid each year, ranging from 5 percent in 1801 to 15 percent in 1806.
The consortium’s letter and its enclosure set down the basic and, from the standpoint of JA and the United States, very harsh terms of the loan that the consortium proposed to negotiate with the undertakers. But appearances were somewhat deceiving, for the loan’s ultimate success as well as the way in which the interest was paid and the principal redeemed made the loan less onerous than it might appear at first glance. This is evident from the Willinks’ letter of 4 Feb. 1784, and its enclosure, wherein they set down the loan’s effective, as opposed to its apparent, cost. As the consortium indicates, and as the Willinks make clear by their calculations, the United States would pay 6 percent interest on the principal. However, the annual cash outlay of the United States to the investors would be 4 percent. The approximately 2 percent that was not being expended would become due when the principal was redeemed between 1800 and 1806. This meant that between 1784 and 1800 the United States would avoid expenditures of approximately 765,636 florins, enough to pay for the additional loan obligations and other expenses. It also had the effect, as the Willinks indicate in their letter, of producing a more favorable interest rate than if the money had actually been borrowed at 6 percent. For the terms of the loan as the negotiations proceeded, see the plan enclosed by Wilhem & Jan Willink with their letter of 4 Feb. 1784, a later plan enclosed by the Willinks with their letter of 16 Feb., as well as the [9 March] contract for the loan as finally concluded, all below.
2. The “packets” probably included the original and duplicate of C. W. F. Dumas’ 1 Feb. letter to the Department of Foreign Affairs (Dipl. Corr., 1783–1789 description begins The Diplomatic Correspondence of the United States of America, from … 1783, to … 1789, [ed. William A. Weaver], repr., Washington, D.C., 1837 [actually 1855]; 3 vols. description ends , 3:480–482).
3. The enclosures comprised two sheets. The first was headed “Sheme of a Loan,” and the second, “Repartition of the Obligations.”