Contract for the Second Dutch Loan
[9 March 1784]1
On the ninth day of March in the Year of our Lord One Thousand seven hundred and eighty four, appeared before me Lambert Sythoff Notary Public, duly admitted and sworn by the Honourable Court of Holland, dwelling att the Hague, and in the presence of the underwritten Witnesses.—
The Honourable John Adams Esqr: Minister Plenipotentiary on the part of the United States of America by their High Mightinesses the Lords States General of the United Netherlands &c: &c: &c: in quality as especially qualifyd and authorized by the above mentioned States of America, in Congress assembled for and in behalf of the said States of America, to raise a loan with any Person or Persons, States or Companies with subjoined assurance in good faith to ratify and fulfill all that shall be done in this respect by him Honourable appearer in his above mentioned quality, and by virtue of the above mentioned authority. This original Power being exhibited to me Notary, with authentic Copy and the Translation of the same, in behalf of the money Lenders, to be hereafter named, their successors or Assigns and deposited in the Custody of the Notary Peter Galenus Van Hole in Amsterdam.—2
And the Honourable Appearer acknowledged himself in his aforesaid Quality, and thus in the name and on the part of the United States of America, to be duly and lawfully indebted to and in behalf of Messieurs Wilhem & Jan Willink Nicolaas & Jacob Van Staphorst and de La Lande & Fynje a sum of Two Millions of Guilders Dutch Current money arising from and on account of so much ready money, received to his perfect Satisfaction by him the Honourable appearer in his above mentioned quality, and therefore expressly and formally disavowing the excuse de nummis non numeratis3 of untold moneys, and thus the whole to be performed on the following Conditions and limitations.
That for the said Capital of Two Millions of Guilders shall be paid annually an Interest at the rate of four in the Hundred, the said Interest begining with the first day of February of this Year, untill the actual liquidation and final accomplishment on the terms and limitations to be hereafter mentioned and appointed.—
That the above mentioned Gentlemen Messieurs Wilhem & Jan Willink Nicolaas & Jacob Van Staphorst and de la Lande & Fynje, shall have the liberty and so far as is necessary are hereby empowered to divide the above mentioned Capital and distribute the same under their firm or Signature4 and dispose of to others Two thousand obligations or Bonds of Participation each obligation or Bond consisting of one thousand Guilders with the Coupons of the same for the receipt of the Yearly interest of four in the Hundred which obligations or bonds of participation being numbred No 1 to 2000 inclusive and attested by a Notary Public in Amsterdam, shall be of the same power and Value as the engrossed Copy it self.—
That for the advantage of the Persons who are participators in the above mentioned obligations or Bonds of participation a certain number of obligations or Bonds each of one thousand Guilders yielding likewise an Interest of Four in the Hundred in the Year, shall be distributed at the under mentioned periods as premiums to the bearers of such numbers as shall have a right and be entitled thereto, by a drawing which is to be three Months before in the presence of a Notary Public and Witnesses.—
|First of February||Capital|
|1785||Fifty obligations in all . . . . . . . . . . . . . . . . . . . . . . .||ƒ 50000:–|
|1787||Sixty, Do . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .||60000:–|
|1789||Seventy Do . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .||70000:–|
|1791||Ninety Do . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .||90000:–|
|1793||One hundred Do . . . . . . . . . . . . . . . . . . . . . . . . . .||100000:–|
|1795||One hundred & twenty Do . . . . . . . . . . . . . . . . . . .||120000:–|
|1797||Two hundred Do . . . . . . . . . . . . . . . . . . . . . . . . . .||200000:–|
That the obligations or bonds arising from this drawing shall be likewise signed by Messieurs Wilhem & Jan Willink, Nicolaas & Jacob Van Staphorst and de La Lande & Fynje or the successors of the said Gentlemen for the time being and duly attested by a Notary unless the United States of America might chuse to pay of and discharge in ready money the premiums thus drawn six months after the drawing, to do which the Honourable appearer by these presents reserves the liberty for the above mentioned States of America.—5
That the redeeming of the above mentioned obligations or Bonds of participation as also of the premiums falling thereto in consequence of a drawing to be done annually in the presence of a Notary Public and witnesses shall be accomplished at the following Periods.
That for the payment of the Yearly Interest and the redeemings or liquidations to be done in consequence of the above mentioned drawing of which a due publication shall be made by advertisement in the Public News papers, the Honourable appearer in his aforesaid Quality and thus in the name of the United states of America promises and engages to remit the necessary moneys thereto to the above mentioned Gentlemen Messieurs Wilhem & Jan Willink, Nicolaas & Jacob Van Staphorst and De La Lande & Fynje, and their Successors in good bills of exchange products of America or in ready money without any abatement or deduction.—
That this Obligation shall likewise never be subject to any Impost or Taxes imposed or yet to be imposed in the United States of America or any of them, and there shall also never be made or formed by the aforesaid United states of America, or any of them in particular any resolution or Convention whereby the execution and performance hereof should in any manner be prejudiced or hindered though it even were, which the Almighty forbid that any war Hostility or Alienation might arise between the United States of America or any of them on the one hand, and the States of these Lands or any of them on the other hand but on the Contrary that in all circumstances without any exception the contents of these presents shall be punctually performed and executed.—
Finally that the Honourable appearer in his abovewritten Quality promises and engages, that this obligation or Bond shall be as Speedily as possible ratifyed and approved by the abovementioned United states of America in Congress assembled, and that the original act of this ratification and approbation with an authentic Copy Translation of the same, together with an engrossed copy hereof, shall be deposited in the Custody of a Notary Public in Amsterdam, to be there kept all together, for the satisfaction and security of the money lenders, and to remain there so long untill the Capital and Interest of the borrowed moneys, as likewise the obligations or bonds arising from the drawing as is herebefore appointed and limited be perfectly acquitted and discharged.—
On Failure of a Punctual discharging or acquitting of the Capital as well as the Interest at the appointed periods the whole Capital, or that part of the same which shall at that time be unpaid may by the Gentlemen directors in behalf of the then jointly Money lenders be demanded, and the Honourable appearers abovementioned Principals the United States of America, shall in that case be held and obliged in promptis to discharge and acquit the due Capital with the Interests and charges the whole in one Sum.—
For the accomplishment and performance of all the above written the Honourable appearer binds in his above mentioned quality and thus in the Names and on the part of the United States of America, jointly and each of them Separately as also all their Lands, Chattels, Revenues and Products together with the Imposts and taxes already imposed or hereafter to be imposed and levyed and thus of all the United States and of each of them in particular, in Solidum, and for the whole.—
He the Honourable appearer renouncing in the Names above mentioned to that and expressly and premeditatedly Beneficium Divisionis, together with de duobus vel pluribus reis debendi,6 Signifying a retribution of debts, and that when two or more are indebted, each of them can Satisfy with the payment of his portion; the Honourable appearer promising in his above mentioned quality never to have recourse to the said or to any other Evasion or Subterfuge whatsoever.—
Thus done and passed att the Hague in the presence of Francis John Bosboom and John Philip Van Ogten, Witnesses.
The Original is duly signed.—
Dupl (Adams Papers); endorsed: “Ratification 1. Feb. 1785 / of / my Loan of 9. March 1784.” Tripl (Adams Papers). FC’s in Dutch and English (Adams Papers). For additional information regarding this document, see Descriptive List of Illustrations, No. 3, above.
1. On 9 March Lambert Sythoff notarized three English language texts of the loan contract for transmission to Congress. The notarized FC in English is a copy of the aforementioned documents. The notarized FC in Dutch is of the contract in that language. The consortium wrote JA on the 11th that it had received the contracts from Sythoff and would send them to America by the vessels “getting Ready, to Sease the first Opportunity for their Departure” (all Adams Papers). The contract printed here is the second of the three copies sent to Congress for ratification and returned to JA with the instrument of ratification attached, both of which were enclosed with the letter from John Jay, dated 11 Feb. 1785, below. JA received it on 2 May, having on 23 April received the original, which he immediately dispatched to the consortium. The triplicate was received later in May (to John Jay, 24 April, 4, 30 May 1785, JA, Works description begins The Works of John Adams, Second President of the United States: with a Life of the Author, ed. Charles Francis Adams, Boston, 1850–1856; 10 vols. description ends , 8:236–238, 239–240, 252–254; to the consortium, 24 April 1785, LbC, APM Reel 107). For an explanation of the almost eleven months that passed between the dispatch of the contract and Congress’ ratification of it, see the ratification of 1 Feb. 1785, note 1, below.
2. This is a reference to and paraphrase of JA’s [20 June 1780] commission authorizing him to negotiate a Dutch loan in the absence of Henry Laurens. Originally issued because Laurens’ departure for Europe had been delayed, it took on new importance after the British captured the South Carolinian on 3 Sept. 1780 and subsequently imprisoned him in the Tower of London. Pieter Galenus van Hole had notarized the 1782 loan contract at Amsterdam (vol. 9:452–453; 10:196; 13:110, 116).
3. Of money not to be paid out.
4. In the 1782 loan, each bond or obligation was “to be Signed bÿ him Honble. Appearer,” that is, JA, whereas in this loan they were to be signed by the consortium (vol. 13:114).
5. This was an extremely important provision, for it promised to save the United States substantial interest if implemented, as it was in 1785. Then, rather than issuing ƒ 50,000 in new securities that would have earned interest until their redemption in 1801, the United States made a onetime cash payment (Winter, Amer. Finance and Dutch Investment description begins Pieter J. van Winter and James C. Riley, American Finance and Dutch Investment, 1780-1805, New York, 1977; 2 vols. description ends , 1:115). For the consortium’s proposal to do that, see its letter of 2 Sept. 1784, and for JA’s approval of the plan see his reply of 16 Sept., both below.
6. That is, JA renounced the right of one of several borrowers to pay only its prorated share of the debt. Thus each state of the United States was responsible for the entire debt rather than for only a part that might be apportioned to it. The 1782 loan contract contained the same renunciation (vol. 13:114, 116).