The American Commissioners and the Farmers General: Contract for Tobacco
Copy: Library of Congress; copy: National Archives5
In the light of the previous negotiations, this is a remarkable document for the commissioners to have signed. It passed over in silence two main points on which they had been seeking concessions: insurance and transportation; by agreeing to deliver the tobacco in France they tacitly assumed the risks of the sea and responsibility for shipment in American bottoms. Last but not least, they agreed to a fixed price, although they had known for a month that commitment to that price might be ruinous.6 As late as March 17 they had insisted on an escape clause,7 yet a week later they signed the contract with no such clause.
If the Americans carried out the terms, Arthur Lee said later, they would lose two million livres; if they did not carry them out, and “there was not the remotest possibility that they would,” the breach of faith would jeopardize any future loans from the farmers general. All the commissioners achieved was to get their hands on the first instalment, a million livres. “If it was rash at first, it was infinitely more so after information they had received” of rising prices in Virginia.8 The point was well taken, assuming that the contract was what it seemed. But was it?
The advance was made on conditions that both parties must have known were unlikely to be fulfilled; hence fulfilment could not have been the prime consideration. The commissioners suggested as much a few weeks later, though in guarded fashion, when they sent news of the contract to the committee of secret correspondence: they hoped, presumably for the record, that the terms would be carried out even though disadvantageous; but the central point was that Vergennes was using the contract as a further means to finance the American cause. He had assured them, they implied, that if the tobacco could not be delivered at the stipulated price “Government will not suffer us to be losers.”9 The Minister presumably gave a similar assurance to the farmers general, for he seems to have been behind the whole affair.1 It was not a business deal to procure tobacco, but a political move, like the formation of Hortalez & Cie.; the purpose was to conceal a government subsidy of a million livres.
That purpose was secret, and the commissioners only hinted at it in writing to the committee. On the surface they negotiated a bona fide contract, thereby opening themselves to Lee’s later criticism. Whether or not he learned their real reasons for what they had agreed to in his absence, the apparent rashness of the agreement was a weapon against them; and by the time he made his observations in 1779 he was looking for any weapon. His attack was apparently justified but essentially irrelevant, for it was directed against what had happened on the stage. What mattered was behind the scenes.
[March 24, 1777]
Article 1st. The undersigned, as well in our names, as in virtue of the powers vested in us by the Congress of the United Colonies of North America, do promise and obligate ourselves to deliver in the course of the present Year 1777 to the Farmers General of France, at the ports of that Kingdom, five thousand Hogsheads; equal to five Million pounds of Tobacco, of the Growth of York and James River.
Article 2d. The price of the Tobacco so delivered shall be eight livres2 for every pound Mark of Nett Tobacco, or forty livres for every hundred pounds, weighed and delivered into the Stores of the Farmers General.
Article 3d. All the Tobacco, which is damaged, rotten or spoiled, shall be cut off and deducted from the payment according to an amicable estimation made by proper judges; or in lieu of this mode it shall be subject to a general Refraction.
Article 4th. There shall be also allowed, and deducted for full weight four per Cent; two per Cent on the Amount of the Invoice for prompt payment, and eight livres on every Hogshead for samples.
Article 5th. In payment of the above five thousand hogsheads of Tobacco, the Farmers General shall, on account of Congress either pay into the hands of a Banker to be named by Messrs. Franklin and Deane, One Million of Livres; or accept Bills drawn by those Gentlemen, through their receiver General at Paris during the course of the ensueing month, to the above amount; and another Million of Livres shall be paid on the arrival of the first Vessels, laden with Tobacco, and delivered on Account of this Contract: which two Million of Livres, shall be the full and complete of the five thousand hogsheads, or Fifty Million pounds marc of Tobacco, to be deliver’d on Account of Congress, at the price of eight Sols per pound, as above stipulated.
Article 6th. Should Congress send to France, a further quantity of Tobacco, whatever exceeds the amount of the two millions advanced by the Farmers General, shall be delivered to them by Messrs. Franklin and Deane, at the same price, and conditions, and the Cost thereof shall be paid by the Farmers General, either in money or in bills, at three usances drawn on their receiver General.
Done by duplicate at Paris on the 24th. March 1777.
5. Other copies, in French, are in the APS and the Harvard University Library.
6. See above, the first note on their memorandum of Feb. 24 and BF to Lee, March 2.
7. See their draft memorandum of March 17.
8. Lee’s observations on the contract, April 27, 1779, Lee Family Papers, roll 6, frames 80–6.
9. Above, p. 472.
1. A further indication of Vergennes’ role is his use of Georges Grand, his confidant, in the revived negotiations that led to the contract. See Paulze to BF above, March 15.
2. An obvious error; “sols” appears in the French copy in the APS.