To William Short
April 13th. 1791
I have recently received your letters of the 2d. December and the 25th. of January. The others to which they refer have not yet come to hand.
The manner in which you have proceeded, as detailed in your letter of the 2d. of December, is entirely satisfactory to me and I doubt not will be equally so to the President, when known to him. He is now absent on a journey through the Southern States.
In consequence of the arrangement which has been made by the President relative to cases occurring in his absence,1 I am at liberty to authorise you as soon as the loan you announce is filled, to cause another to be opened for three millions of guilders, which I accordingly do.
One million and a half of the loan you have set on foot2 is destined as a payment to France, and you will please to take as early measures as possible to have the million remitted to Paris; the half million will wait for a further direction. I observe that the remittance of the million and a half of the last loan3 has been effected with considerable advantage to the United States. I presume that a similar advantage will for some time to come attend succeeding remittances.
Though your letters, detailing the nature of the offers for a transfer of the debt due to France, are not arrived, a communication through the Chargé des affaires of France to the Secretary of State has given me the requisite information.4 There is however one proposition of Messieurs Schweizer, Jeanneret & Co.5 which I do not understand. It is the fourth, to this effect, “The difference of exchange upon the forty millions to be furnished at Paris, & upon the same sum to be received in contracts of the United States shall be regulated according to the tariff announced in the law of Congress.” What is meant by this tariff I am wholly at a loss to determine, there being nothing in the law of Congress to which I can apply the term.
This being the case the propositions with the sole advantage of a prolonged period of reimbursement would leave the debt at the same rate of interest, and involve the disadvantage of making it payable at Amsterdam instead of Paris (subjecting the United States thereby to the loss arising from a less favourable course of exchange) together with the further disadvantage of a premium of five per Cent instead of four.
In this view of the matter the propositions are inadmissible. Your letter however by explaining the one I have quoted may possibly throw new light on the subject. But I do not despair that offers will be made better corresponding with the terms you are at liberty to accept.6
The domestic debt of the United States has reached the following prices in our market.
Six Cent funded Stock bearing Interest from the 1st. instant 17/ £ or 85 Cent, and much in demand.
Defered Six Cent Stock 9/ £ or 45 Cent
Three per Cents bearing Interest from the 1st. instant 9/ £ or 45 Cent, much in demand and rising.
I have the honor to be, with perfect consideration & esteem, Sir Your obedient servant
Secretary of the Treasury
Wm. Short Esq.
P.S. I omitted to make you my acknowledgments for the returns of exports from St Petersburg,7 which I beg you now to accept. Such documents will always be most acceptable, and whenever they can be obtained without trouble or expence, I would request your transmitting to me copies of such as you may be able to procure. I have at present to ask of you the favor of obtaining for me the best information in your power concerning the establishment of the mint in the United Netherlands; the different offices, compensations to the persons engaged in it, the standards, weights, values &c. of the coins and such other particulars as are ever communicated, will all be desirable.
The situation of our East India trade renders it an object to obtain an account of the state of that branch of commerce in foreign countries. If you could with convenience furnish me with any thing relative to that of the United Netherlands it may be very useful at the present moment. I am particularly drawn to enquire about the affairs of the Dutch East India company by the circumstance of their borrowing money and at an high interest.
LS, William Short Papers, Library of Congress. A copy of this letter was enclosed in H’s “Report on Foreign Loans,” February 13, 1793.
1. See George Washington to H, Thomas Jefferson, and Henry Knox, April 4, 1791, and H to Washington, April 10, 14, 1791.
3. The Holland loan of 1790. For a description of this loan, see H to Willink, Van Staphorst, and Hubbard, November 29, 1790, note 1.
6. On April 25, 1791, Jefferson wrote to Short: “You know how strongly we desire to pay off our whole debt to France, and that for this purpose we will use our credit as far as it will hold good. You know also what may be the probability of our being able to borrow the whole sum. Under these dispositions and prospects it would grieve us extremely to see our debt pass into the hands of speculators, and be subjected ourselves to the chicaneries & vexations of private avarice. We desire you therefore to dissuade the government as far as you can prudently from listening to any overtures of that kind, and as to the speculators themselves, whether native or foreign, to inform them without reserve that our government condemns their projects, and reserves to itself the right of paying no where but in to the treasury of France, according to their contract” (ALS, letterpress copy, Thomas Jefferson Papers, Library of Congress).