From Wilhem and Jan Willink,
Nicholaas and Jacob Van Staphorst,
and Nicholas Hubbard1
[Amsterdam, January 25, 1790]
We had the Honor to address you the 29 Ulto.2 since when we have not received any of your respected favors.
We have now to acquaint you that the Persons employed by the Court of France here, and the principal Broker in the French funds, foreseeing that the Situation of the Finances of that Country would put it out of the Power of the Governmt. to make timely Provision for the payement of the interest and reimbursment of the instalment of Capital due the 5 Decr. last on the loan raised here by the Court of France under Guarantee of their High Mightinesses, the Monies of which were applied to the services of the united states;3 They made ouvertures to Mr. Necker4 the first minister of the Finances to purchase the title of Six Millions of livres, furnished by the Court of France to the united States in 1783. and the arrears of interest due thereon in order to furnish monies for the above & other pressing Objects.5 As this transaction tended to commit the credit & reputation of the united States to the Management of Persons unconnected with their Government and without any strong Motives to induce them to uphold it, but who on the contrary would be spurred by the urging necessities to raise Monies, to effect the same on terms injurious to the rising credit of America. We on the first intelligence of any Movements here, exerted ourselves to prevent the success of the business, and Succeeded So far, that in order to remove the ground of our Objections, the french house6 offered to assume us in the execution of the business, as the only Certain way of Securing the Event, and hindering any depression to the Credit of the united States. We refused so long as we could imagine that by keeping aloof, we might defeat the business but when we saw that the Minister had touched upon the negotiation here, in his Memorial to the National Assembly,7 and were informed from an Authority we would have been injustifiable in doubting, that if we did not determine to Coalesce the affair would be proposed and certainly be accepted by the french Minister, so great were his then actual wants, and thus the credit of the united States be Sported with, owing to our declining to interfere in its Support, which we were enabled to do, by the confidence the Money lenders place in us, from the care we have always taken to insure the regular Payment of their interests, we judged it our duty to Submit notwithstanding we constantly entertained the most eager wish, that the matter could have been postponed, until we should receive the directions of the united States upon what we wrote the Commissioners of the Treasury,8 and communicated to his Excellency Thomas Jefferson,9 respecting the transfer to the Money Lenders here, of the debt due by the united States to France. In the Interval of the negotiations upon this Subject, and the time the offer could be formally made to the Minister for his final determination a Settlement of considerable Magnitude of the french Finances by rendering the Minister more easy in Money matters, thro’ the receipt of eight millions of Livres the caiste d’Escompte Supplied to the Government inclined him not to accept the proposal one10 of us went to Paris, expressly to make him for the Purchase of six millions livres Capital and the arrears of interest, alledging that this was too Small an object to trouble the national assembly with, but that if we would treat for the whole debt He was ready to enter into arrangements for it. This issue to the business was highly agreeable to us, as would be the possibility of the matter laying dormant, untill we received instructions from the united States, subsequent to the arrival of our letter of 11 Sepr.11 and of his Excellency Thomas Jefferson; but we have had the chagrin to learn that some Gentlemen have formed, and presented to the Minister a Plan for the Purchase of the whole Claim of France against the united States.12 Half of the consideration to be paid in french Effects, and the other half in Money at the Current Prices of these Effects, which afford the Prospect of a most enormous profit to the Speculators, and we have but too much reason to apprehend there are Persons concerned in the affair, capable of influencing its acceptance by the French Ministry.13
The parties confident that no house could succeed to negotiate the business, or at least with any thing near the facility or advantage as the Commissioners of Congress Loans, applied to us to know if we would consent to undertake it, and to obtain our acquiesence offered us the alternative of a share in the Profits, or a Valuable Commission. Deeming ourselves the natural Guardians of the Honor and credit of the united States in their Financial Concerns here, we stood in need of no other Consideration to induce us to forego Any personal advantages, in order to ward off the depression such a Bargain would cause to the credit of the united States. These being our sentiments even if we had had the chief direction in the Business and consequently a great controul over the timely Opening of the Loans, you’ll easily conceive, how much Stronger our objections are against assuming the Commission to negotiate upon the credit of the united States, for these Speculators, and the eager desire we have by every possible Means to prevent the realization of this project, to avoid that from the certain Knowledge our Money lenders would have of this Transaction, as it must pass thro’ and be ratified by the National Assembly, they would learn that the credit of the united States is held in So litle repute, that the french Ministry at an enormous great Profit to the speculators, uncompensated by any early desirable Supply of Money to that Nation, had abandoned it to the mercy of Speculating individuals who to fullfill their Engagements of paying off the whole in two Years, would be compelled to camish14 upon this Market American loans to the extent at least of twelve Millions of Guilders, to purchase the necessary french Funds, an information that would immediately Check nay destroy the credit of the united states, as the Money Lenders would naturally conclude, that by waiting until the Speculators must make good their payments they would be necessitated to vend their American Bonds at almost any rate, exclusive of the danger, that when the french Funds should be low they might find it their benefit to force the sale of the american Bonds at low prices, to profit of the fall of French Stocks. To remedy which evils our remonstrances or opposition might provely entirely fruitless, as when once possessed of these Claims upon our refusal to open the Loans requisited to enable them to compleat their Views or Engagements, they might commission any other House to do it, which not having the same relation with the United States and consequent Interest to support their credit would not hesitate sacrificing it to give satisfaction to their Employers, adding to all which the impossibility there would be for the united states during the long time it would take, to place the nineteen Millions in Bonds that would issue from the Exchange of debts, as the value at par of that due by the united States to the Court of France and the Still longer Period that would be necessary to raise the credit of the united States from the injury it would unquestionably Sustain to negotiate any other monies they might desire to appropriate to the Support of their credit here, their inferior arrangements or Ameliorations, and we are persuaded the government will fully applaud our anxious Sollicitude to avert the Many and great Evils that would flow from the completion of this purchase, and thankfully approve of the only Step we have judged efficacious to overturn it immediately; which is of availing ourselves of the present plenty of Money here to open a loan the 1st. Proximo of Three millions Florins for account of the united States, reimbursable by yearly Instalments of f600,000.—Commencing in 1801. and ending in 1805—which we communicate to the French Ministry with information of our having So done, from our knowledge of the wishes and intentions of the united states to evince their friendship to the French Nation, by reimbursing so soon as in their Power the debt due to France, and that we would be ready to pay them these three Millions, on receipt of directions from the United States to negotiate monies for this object, which we had reason to expect Shortly and assuring them that we would Second with all our power the wishes of our Employers, to transfer this debt from the French nation, unto the Money lenders here in a Manner not derogatory to the dignity & honor of the Government of the united States or injurious to their Credit, which flattering ourselves to be able to compleat within the Course of the next year, and at all events with more expedition than the money could be procured in any Other manner or thro’ any other Persons, we trusted the Ministry would refrain by any Bargain with individuals for the sale or Transfer of the claim against the united States, from compromising the dignity and honor of their allies, and overturn their well established credit here, in committing it to the direction of Persons whose Engagements or Interests may tempt them to sacrifice it. We make not the least doubt of the Success of this Measure, to defeat entirely all further treaty between the French Ministry and the Persons offering to purchase the claims of France against the united States. However to render our object the more certain, we transmit the duplicate of this letter open to Mr. Short chargé des affaires of the United States to be forwarded to you by him, acquainting him of our proceedings, and urging his utmost Exertions to engage the French Ministry to suspend the Idea of treating with Individuals about the claim against the united States until the desire and intentions of their Government Shall be known on the Subject, and we are without Apprehension of this Gentleman’s obtaining the Promise we are so Sollicitous the french Ministry shall make from our experience of his Zeal for the Service of the united States and the Opinion he testified to us in Paris, that the Commissioners here were unquestionably the most fit Persons to decide upon every thing relating to the credit of the united States in Holland.
The actual state of the credit of the united states will permit us to open the Loan upon the most favorable terms any Nation borrows Monies here, so that there will be only a deduction of 4½ pCt. for Premiums, Brokerage, Commissions and all other Charges, and we the more readily agreed to open this Loan for three Millions as we now avail the united States of the plenty of money here, which will probably have subsided or be less brisk on arrival of their orders, and because there will be no Question of obtaining a lower rate of interest than 5 pCt. now universally established here by all the Powers borrowing Money, which rise of interest is the only reason why the united States pay the same for this as for the first Loan15 opened for their account, altho’ their credit now is equal to that of any European Government accustomd to raise monies in Holland.
To Spare the united States all possible Advances of Interest while the Money shall remain unappropriated, we shall issue the recepisses at the option of the buyers to take them so late as they please, on the Expectation the three Millions will be placed in a few months. Having thus explained our motives for opening this Loan, and our attention to the Interest and credit of the United States in its price and conditions. We firmly rely upon our obtaining that approbation and Ratification from the United states which they have hitherto constantly bestowed upon all our discretionary proceedings,16 dictated as this has been by our Sincere Zeal to cherish and promote their Credit; But if after all this our conduct shall not be honored with their approbation, youll please to observe that we have not assumed to bind the United States to accept the Monies arising from this Loan, which the Purchasers will furnish solely upon our Personal credit, and the Confidence they place in us, and in Such case we Shall have to return back the Monies with one Years Interest to the Proprietors of the Bonds sold. A Sacrifice that with the other charges we chearfully submit to the decision of your Government If it ought to be borne by us, who expose ourselves thereto only thro’ Zeal for the credit of the united States, or whether the United States will not deem it Just to assume the same.
A Speedy decision be it either way, is of to great Consequence to render it necessary for us, to press your obtaining and transmitting it to us with the least possible delay possible. If as we do not doubt the united states will accept and confirm this Loan, we will follow their directions for disposal of the Monies, on receipt of the necessary powers to enable us to pass the Bonds on their behalf and may we request your care sir, that these may be ample and Satisfactory, to prevent all reclamation of that Point.
We further submit to you, whether considering that the wants and necessities of the French Nation may render it extremely desirable, to the Ministry to raise all the Monies they can, and thus tempt them to hearken to Proposals for purchasing Parts or the whole of their claims against the united-States, it would not be proper to lodge the needfull Powers and Authority in an Agent or with us, to negotiate Monies here as Opportunities might offer, upon favorable Terms to be paid to the French Ministry against their delivring us discharged the Titles of the claims of the French Nation against the united States, until their final Extinction, which would be the sure means of defeating any other projects of individuals by rendering themSelves Possessors of such enormous claims, to become massers of the credit and in some degree of the dignity of the Government of the United States, and the only possible mode, by which the United States could in the interval of the realisation of the transfer of this Object to our money Lenders, apply any part of the Monies raised upon its Engagements to the Support of its credit here, temporary or permanent Provision for the Interests of its foreign debts or other Engagements in Europe exclusive of any Sums they may wish to appropriate for the Purposes of their domestick Finances or local improvements.
We are very respectfully Sir! Your most obedient & most Humble Servants.
Wilhem & Jan Willink
N & J. Van Staphorst & Hubbard
To the Hble A. Hamilton Esqr. Secretary of the Treasury at Newyork
LS, Connecticut Historical Society, Hartford; LC, George Washington Papers, Library of Congress.
2. Letter not found.
3. Rafael Bayley states:
“The king of France had, through his minister at the Hague, offered his assistance to the Americans in procuring loans in that country, but without effect. He now engaged to become, himself, responsible for the sums which might be furnished. In consequence of this and the exertions of Mr. [John] Adams, a loan of ten millions of livres was obtained in Holland.
“The money thus borrowed, although intended solely for the United States, having been obtained on the credit of France, became a debt due to that country, and was provided for in the financial contract drawn up July 16, 1782, and signed by the Comte de Vergennes and Benjamin Franklin.
“Article V of this contract says that although the loan of 5,000,000 florins of Holland, amounting on a moderate valuation to 10,000,000 livres Tournois, agreed to by the states general of the Netherlands on the terms of the obligation passed November 5, 1781, between his majesty and the states general, has been made in his majesty’s name and guaranteed by him, it is nevertheless acknowledged that the said loan was made, in reality, on account and for the service of the United States of North America. By the terms of the obligation the king had agreed to pay the capital of the said loan with the interest at 4 per cent. per annum, the capital to be repaid in ten equal payments, the first to commence the sixth year after the date of the loan, and to be completed in five years thereafter, and it was therefore promised that the United States should reimburse and pay the same with interest at 4 per cent. per annum, at the royal treasury of France, in ten equal payments of 1,000,000 livres each, to commence November 5, 1787, the king ‘on account of his affection for the United States, having been pleased to charge himself with the expense of commissioners and bank for the loan, of which expense his majesty has made a present to the United States.’” (Bayley, National Loans description begins Rafael A. Bayley, The National Loans of the United States from July 4, 1776, to June 30, 1880 (Washington, 1882). description ends , 13–14.)
4. Jacques Necker, French Director General of the Finances.
5. For information on the French attempt to sell the debt due France from the United States and the offer made by a combine of American and French speculators to purchase it, see Short to H, November 30, 1789.
6. The banking house of Ferdinand Grand and Company.
7. The memorial which Necker presented to the National Assembly on November 14, 1789, is printed in Archives Parlementaires, X description begins Archives Parlementaires de 1787 à 1860, First Series (Paris, 1878). description ends , 56–65. See Short to H, November 30, 1789, note 4.
8. Willink, Van Staphorst, and Hubbard had written to the American Commissioners of the Treasury (Board of Treasury) on September 11, 1789, of Thomas Jefferson’s “favorite wish to transfer unto Our Money-Lenders the debt due by the United States to the Court of Versailles” (copy, Thomas Jefferson Papers, Library of Congress).
9. The letter to Jefferson is dated September 24, 1789, and is printed in Boyd, Papers of Thomas Jefferson description begins Julian P. Boyd, ed., The Papers of Thomas Jefferson (Princeton, 1950– ). description ends , XV, 471–72.
10. Nicholas Hubbard.
11. See note 8.
13. Presumably Etienne Clavière and Jacques Pierre Brissot de Warville.
15. Bayley describes this loan as follows:
“The united firms [Willink, Van Staphorst, and De La Lande and Fynje] offered a loan of 5,000,000 guilders ($2,000,000), to run for ten years, at 5 per cent. interest, then to be redeemed in five years, by paying each year a fifth part. As compensation for raising this money they asked 4¼ per cent., to include all the expenses, except a charge of 1 per cent. for paying out the annual interest and a charge of ½ per cent. on the final redemption. To this last item Mr. [John] Adams refused to accede. He offered them 4½ per cent. to cover all charges except the 1 per cent. on the annual interest received and paid by them. To this they agreed, and the contract was closed, varying in no other particular from their first proposition. Five formal contracts for 1,000,000 guilders each, numbered from 1 to 5, were drawn up, “as advised by the ablest lawyers and most experienced notaries,” setting forth these terms, with a great deal of verbiage, but which as Mr. Adams observes in one of his letters, “meant only that the money having been borrowed must be paid. The contract was concluded June 11, and the five formal documents were confirmed by Congress September 14, 1782.” (Bayley, National Loans description begins Rafael A. Bayley, The National Loans of the United States from July 4, 1776, to June 30, 1880 (Washington, 1882). description ends , 17.)
16. The loan was authorized by Congress on August 4, 1790, when a $12,000,000 loan was authorized to be floated and applied to the public debt (“An Act making provision for the [payment of the] Debt of the United States” [1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 138–44]). See H to Willink, Van Staphorst, and Hubbard, August 28, 1790.