From William Short
Paris July 24. [–25] 1791
Since my last of the 19th inst. in which I gave you an account of the then prospects with respect to loans at Amsterdam or Antwerp, Mr. Morris has recieved an answer from his correspondent at the latter place.1 He still assures that a loan for the U.S. being opened there for a million of florins at 4½. p. cent might successively be carried to greater amount. He insists however on the commission of 6. p. cent: as he seemed to do this more fully in his last letter I have authorized Mr. Morris to offer him 5. p. cent commission, & to tell him that if he would accept it he might set on foot immediately a loan for any sum not less than a million of florins & might extend it as far as three million—taking care however not to commence it without having full certainty of its success.
Mr. Morris assures me that the house with which he corresponds (Wolfe of Antwerp) may be relied on for solidity and prudence, & is particularly regarded as having the best influence among the money lenders. It was formerly employed by Russia in loans made there. At present Hope2 obliges that power to concentrate its loans at Amsterdam.
Should this loan succeed I shall go to Antwerp to sign the bonds if thought necessary. Hitherto I have thought it best to let Mr. Morris negotiate this business by his correspondence so that the U.S. might not appear in it unless it should be brought to effect.
It is easy to see that such an event would be attended with a variety of good consequences for the credit & interest of the U.S. If they are able to make loans at this reduced rate of interest at Antwerp there is no doubt that that will enable them to do the same at Amsterdam in a very short time.
There is however one aspect in which this subject may be considered differently. Should the U.S. be able to borrow a small sum only a 4½. p. cent, as it is certain they might immediately make large loans at 5 p. cent, it may be questioned whether the advantages arising from paying off the French debt with the present immense profit of exchange, or from purchasing up the domestic debt at its present price, would not more than counter-balance the ½. p. cent additional interest. The privilege which the U.S. reserve to themselves of re-imbursing their loans would have weight in deciding that large sums at 5. p. cent were more for their advantage at present than a small one at 4½. Still it would be necessary to be much better acquainted with your general plan & views on these subjects than I am, not to make this experiment of a loan at a reduced rate of interest. You shall be kept regularly informed of its progress.
M. Durezzo of Genoa,3 one of the richest & most influential citizens of the Republic, is now here. I have put him fully in possession of the present situation of the government and resources of the U.S. He seems highly satisfied with them & in the present situation of affairs in Europe considers the U.S. as a new treasure found for the capitalists of Genoa: viz. for all the men of property of the country. He does not return to Genoa before October or November next, & he thinks that the information which he shall carry there & the zeal which he should use in person would insure loans for the U.S., particularly if in the beginning by the way of inducement they would recieve a part in the French funds to be set off by the ministry here against the American debt. He says the months of October & November are favorable also for loans. I rather think however he has fixed on that season because he expects before that time to recieve further information from the Genoese Consul4 in America to whom he has written on the subject. It is natural that information coming from that source should be more relied on by the Genoese & for that reason I am happy that M. Durezzo has taken measures for collecting it. Should the Consul shew any desire to resort to administration in his researches I don’t doubt you will consider it proper to give him every facility, as it is certain the more the real situation of the U.S. is exposed to the Genoese the greater will be their confidence. I think it highly probable that the U.S. will in time find considerable resources at Genoa & that these will be followed by commercial advantages also.
The commissaries of the treasury having not yet changed the principle on which they had desired the payment at Amsterdam to be made, it is probable I shall find it necessary to desire our commissioners5 to remit the balance in their hands to Paris, as otherwise we should be exposed to the artificial rise in the exchange which our payments would enable the French bankers or other persons interested, to make.
I have the honor to renew the assurances of attachment & respect with which I shall ever remain Sir Your most obedient humble servant
P.S. July 25. The commissaries of the treasury have just come to desire I would have the payment made at Amsterdam & have agreed to fix the rate of exchange according to what it may be to day at that place. The exchange has been rather on the rise for some time viz from 44½ to 44 7/8. I shall desire our bankers to comply with this request.
The Honble. Alexander Hamilton, Secretary of the Treasury. Philadelphia
ALS, letterpress copy, William Short Papers, Library of Congress.
1. Gouverneur Morris had been corresponding with Charles John Michael de Wolf, an Antwerp banker, concerning the possibility of raising an American loan in Antwerp.
2. Henry Hope of the House of Hope.
3. Presumably Girolamo D. Durazzo, member of a famous Genoese family and last Doge of the Republic.
4. Joseph Ravard.
5. Willink, Van Staphorst, and Hubbard.