From William Short
Paris Oct 10. 1791.
The last letter which I have had the honor of writing to you was of the 23d. of September. I have since then recieved yours of August 1st.
I inclose you at present a copy of my last letter to the bankers at Amsterdam1 written in answer to theirs in which they propose of themselves, as I had formerly mentioned it was probable they would do, that the rate of commission on the last loan should be settled between you & them.2 I have sent you regularly copies of my letters to them on this subject. They will also send you theirs to me which will save me the trouble of copying them. Thus Sir you will be furnished with all the materials on this subject. They will put out of doubt the right of the U.S. to insist on the 3½ p.cent commission. The expediency also it is now for you to judge of. Having thus put the question entirely within your decision is all that I could do. Should considerations for the former services of the bankers of the U.S. on which they seem to count a good deal induce you to make the sacrifice of this ½. p. cent in their favor I think it would be proper to make them see clearly that the concession was made on that account. As to my own part I cannot undertake to fix the weight you may think proper to give to such considerations, but as far as I can judge of them they do not appear to me to require that the U.S. should make a sacrifice of a right so clearly ascertained. It was my intention as I formerly mentioned to you to have submitted to the 4. p. cent commission if it had become indispensable—as that was not the case I did not do it & am happy to have been thus able to put the business entirely at your discretion.
When I announced to you this loan I mentioned that you might consider the 2½. millions of florins as at your disposal from the time of your recieving that letter.3 Although the undertakers were not obliged to pay more than one million a month yet it was certain they would pay more. The bankers have not informed me precisely of the sums they have recieved, but from the remittances they have announced to me it appears that the reciepts have been much more considerable than the million a month. On the 22d. of Sept. they informed me they had remitted to the public treasury here 4,088,786.—the bills from about 43⅞ to 44. groats p. crown. This includes the remittance mentioned in my last. They have since informed me in their several letters of remittances to the amount of 1,643,313 7 sols, the bills of the greater part at about 44½, the rate of the rest not mentioned.
Since the departure of Mr. Donald4 from London his partner5 has continued the correspondence with me on the subject of a loan there for the U.S. The final result of his researches is less favorable for the present moment than Mr Donald had given reason to hope. On more precise enquiry he found that no house of solidity would undertake to guarantee a loan for any commission and that no loan could be opened publicly for a foreign power. Still he was well convinced that the U.S. might privately obtain a loan in London provided the interest was at 5. p. cent, & that it was not brought on until the next spring. As I did not understand precisely what was meant by the term privately & of course could not judge whether the dignity of the U.S. would admit of their making use of that mode I have written to ask an explanation of it as an indispensable preliminary, & have not yet recieved an answer. I take it for granted however that no loan can be made there before the spring. Mr. Burton observes also that it will be absolutely necessary for me to go to London before any thing final can be determined on.6 I have written also to know in what respects he considers my presence primarily requisite, that I may be the better able to judge how far such a journey may be proper. Unless it may appear essentially necessary at present I shall suppose it best to postpone it until next spring—or until the time which may appear proper for opening such a loan. Should it be found that the U.S. can make a loan in London I cannot help still hoping from a general view of circumstances that it may be done at a lower rate of interest than 5. p. cent notwithstanding what Mr. Burton has said on the subject. This however is a circumstance which as you will readily see, can only be reduced to certainty at the time of the loan being made, & on the spot. Should that be found impracticable & should it be possible to reduce the charges to the point at which they stand at Amsterdam, I shall have no doubt of the propriety of a loan being opened there, as it will necessarily assist in enabling the U.S. to reduce the rate of interest elsewhere.
With respect to Antwerp I have hitherto informed you how the business stood there.7 Since my last I have at Mr. Morris’s request8 authorized the opening a loan there provided it can be effected at 4½ p. cent interest & 5. p. cent commission: As he observed it would be necessary in that case for the U.S. not to open loans in Holland at an higher rate of interest, I have agreed that that shall not be done before the 1st. of Jany. next provided three millions of florins can be procured at Antwerp at that rate & in that time. I had no difficulty in taking this engagement as it is consenting only to what the interest of the U. S. would dictate. No answer had been as yet recieved to this letter written only a few days ago. I must own however I am not very sanguine in the expectation of any thing being done there at present in consequence of it. I shall be more able to ascertain what may be expected from that source after having been there which will be in the course of the next month. I pass through that place on my way to Amsterdam whither I shall go in order to sign the bonds of the last loan.9 Having signed those of the loan made last spring,10 the bankers then informed me that it would be necessary for uniformity sake to sign the others. I have directed the bonds to be prepared in consequence thereof, as I thought it might not be improper to take a view of Antwerp & Amsterdam at present so as to be better able to judge of the real situation of affairs there as relative to the U.S. & as I inferred also from the tenor of your first letters that you expected I should go there.
What I have said above will make you acquainted as far as I am, with prospects at Amsterdam, London, & Antwerp. The progress of our credit at home will inevitably continue to increase them & leave the U. S. still more the arbiters of the use they may chuse to make of them. As to Genoa I have little doubt we should be able in the course of the Autumn to make a loan there for a million of dollars. From what you say however with respect to that place,11 which is evidently founded in reason & policy, I shall think it adviseable not to do it unless the terms should be better than those wch. may be offered at Amsterdam or in London, or unless it may be found proper to suspend the loans for some time at Amsterdam in order to ameliorate the terms there.
With respect to Paris, the hopes which I had formerly concieved of the resources here have not been realized although it is possible they may be in some future crisis. Hitherto the obstacles have been 1. that the difference between the assignats & specie has been less than the difference of exchange. 2. that the French having more confidence in the assignats than foreigners would not have loaned them for any length of time even at the current difference. 3. that the French monied men are not accustomed to lend to foreigners & have little confidence in the U.S., knowing little of them or only what is least favourable to their credit & punctuality; as for instance their arrears to their debt to the French government—to the farmers general12 & particularly to the foreign officers.13 Under such circumstances I have thought it most adviseable not to attempt to push such business against stream. Should assignats continue in circulation however after we shall have cleared off these several arrears I have no doubt Paris will be found a favorable soil to derive means from of liquidating our French debt. It is for this reason among others that I shall accelerate as far as depends on me the wiping off these arrears—& I don’t doubt what relates to the foreign officers strikes you too forcibly to need further mention.
I recieved in your last14 a properly authenticated copy of the revenue to Octob. 90. Such papers will enable me to shew the real situation of the debt of the U.S. & will contribute eminently to enhance their credit on this side of the Atlantic. I will ask the favor of you to send similar information of the present year & such matters as you may publicly report thereon to the next session of Congress. I cannot too often repeat the propriety of exposing the U.S. (particularly in whatever relates to their finances) to the public eye in Europe. The more they are known the more they will be independent of those few whose business it has been hitherto to make themselves acquainted with them.
I want words Sir to express the high sense I entertain of the satisfaction you are pleased to express of my conduct & the extensive confidence placed in me. I feel definitely the obligation this imposes on me not to use every effort in the prosecution of the business. I must report however with all the candor & sincerity of which I am master that I have not sufficient reliance on my skill & judgment to be exempt from apprehensions that the interests of the U.S. may suffer in my hands if alternatives should present themselves of such a nature as formerly mentioned to you. So long as the business is confined simply to the paying off the debt in one country by making loans in another less skill will be required, & I will endeavour by my zeal to merit a continuance of your confidence to which I feel I have that alone to entitle me; renewing however what I have already mentioned of being incompetent to acting alone in any negotiation for changing finally the nature of our foreign debt & begging that in that case some other person may be joined to me.
You may rest assured Sir that I shall keep you regularly advertised of all the symptoms which may take place with respect to these several matters, so as to recieve your earliest instructions thereon. I beg you to be persuaded of the sentiments of sincere attachment & profound respect with which I have the honor to be
Sir, Your most obedient & most humble servant
Alexander Hamilton Secretary of the Treasury. Philadelphia.
ALS, letterpress copy, William Short Papers, Library of Congress.
1. See enclosure.
2. On September 22, 1791, Willink, Van Staphorst, and Hubbard wrote to Short: “It is painful to us, to learn your perseverance, in rejecting our reasons for extending the last Loan to Six Millions; We now agree with you, that a further Discussion of the Matter between us is useless, especially after your continuing to judge of the Charges upon Loans as a simple Mechanical Compensation, and not on the true invariable Considerations they are granted for. The Charges of making Remittances alone are Half per Cent. Deducting this, would upon your Basis, reduce our Profits to One Half per Cent, which is totally inadmissible; Wherefore, We propose to you Sir, that We shall settle the Matter with the Secretary of the United-States, From whose official Knowledge of the Business, and the Justice He will render to our Motives, We are persuaded We shall experience full approbation …” (LS, Short Family Papers, Library of Congress).
5. Robert Burton, member of the London banking firm of Donald and Burton.
6. Burton to Short, September 13, 1791 (LS, William Short Papers, Library of Congress); Donald and Burton to Short, September 27, 1791 (LS, William Short Papers, Library of Congress).
8. On October 5, 1791, Short wrote to Gouverneur Morris:
“After reflecting on the conversations which have passed between us in consequence of your opinion that loans might be made for the U. S. at Antwerp at a rate of interest inferior to those made at Amsterdam I think it for their advantage that an experiment should be made there provided it be done with the caution & prudence so indespensably requisite in a case of this kind. Agreeably to your request therefore I now express to you in writing that you may assure the house with which you have corresponded on this subject at Antwerp, that I will engage to open no loan in Holland for the U. S. in the course of the year 91 at an higher rate of interest than 4½ p. cent; provided three millions of florins can be procured for them in the same time at Antwerp, at that rate of interest with 5 p. cent for commission & all charges whatsoever.
“You know that I rely altogether on your Knowledge of the ability integrity & prudence of the house with which you have corresponded for the certain fulfillment of the engagements which may be entered into, & particularly for nothing being undertaken in this business without its success being certain.” (ALS, Columbia University Libraries.)