Grosvenor Square Jan. 4. 1786.
I have only time to acquaint you, that since my last there have been some Appearances of an Intention in Ministry to take up American Affairs Lord Carmarthen and Mr Pitt have certainly had Conferences with Committees of Merchants who have represented to them the Necessity of arrangements with the United States, upon Terms which will give Satisfaction.
Nevertheless I have no Confidence in this att all, and I think that Congress and the states Should not relax in any Measure in Consequence of it
Mr Pitt did Say to Mr Campbell, the Principal Man among them, that Mr Adams the American Minister, was well disposed to a friendly Settlement and had made some Propositions to the Kings Ministers who were also well disposed. He was very inquisitive whether they had seen Mr Adams. They answered they had not and that they were not known to him in the Business. . This was true, in a litteral Sense. But in fact they had taken Pains to give me circuitous Information that they had been consulted by Lord Carmarthen and to desire of me Such Information as I could give them and I had, by means of Coll Smith conveyed to the Sight of a Person in their Confidence, some Papers containing Such Matter as I thought might be trusted to them, in such a misterious Way. The Representation they have made is very Strong as they say, but I cannot yet obtain a Copy of it. They pretend to say that Mr Pitt assured them their Report had given him new Lights, and they think America may have whatever they  desires except a free Trade with the W. India Islands.
This will prove only a Delusion, for if the Ministry really are desirous of an equitable settlement, I am well perswaded they cannot yet carry it, in Parliament. So that I hope the states will persevere in their own Measures and that even all the southern states will at least lay heavy Duties upon the Tonnage of Such Nations as have not Treaties with Us, and prohibit the Importation in their Bottoms of any Merchandizes except the Produce of the Country to which they belong.—Even the Importation of Irish Linnens in British Bottoms should be forbidden, as well as Silesia Linnens; Hemp & Duck from Russia and Iron from Sweden Wines from Portugal, Goods from the East Indies, &c &c &c.
With great Regard, I have the / Honour to be sir your most / obedient & most humble sert