From William Short
Antwerp Dec. 1. 1791
I arrived here the day before yesterday & learned from M de Wolf that the loan mentioned to you in my letters of the 12th. & 22d of November was already contracted for, except a small portion which he reserved for the public according to the usage of this place & which he should continue open ten or fifteen days. The loan is to be dated from to-day & the undertakers are to have five months to furnish the money in equal portions monthly with the privilege of furnishing it sooner if they please as at Amsterdam. He has no doubt it will be furnished much sooner.
I passed the act before the Notary yesterday, a copy of which will be forwarded to you with this letter if it can be prepared in time, to obtain on it the ratification promised. The terms of interest & commission have been already mentioned to you.1
The amount of this loan will be remitted to France in proportion as it is recieved here, as well to avoid double interest as to leave it the smallest time possible at the risk of the U.S. Nothing was settled before I left Paris as to the manner of indemnifying France for depreciation. I mentioned to you why the sale of my bills for specie at Paris would be disadvantageous.2 The government do not remit this money to Holland, as you had been informed. On the contrary they have specie brought from thence to satisfy such demands in France as exact specie. I imagine that the indemnity must be made them at the close of the payments by estimation formed on principles which it will not be difficult to agree about. The price of exchange is regularly & daily settled. The price of gold & silver is published also daily, but the manner in which this commerce is carried on & its accidental fluctuations render it by no means a true standard or one which would suit the U.S.
I had the honor of informing you in my late letters of the payments made out of the loan of six millions3 conformably to my orders.4 They amounted to three millions of florins which I had desired the bankers of the U.S. to remit to France & f 560,000. paid to the French bankers at Amsterdam. I had supposed of course there would remain in their hands of the 6,000,000, f 2,440,000 which was the part you had directed to be kept at your disposition except the f 60,000 paid above the f 500,000 to the French bankers as formerly mentioned. I have lately recieved however a letter from our bankers in which they state f 2,200,000 as the whole of the balance that will remain in their hands.5 How this happens I cannot say, but suppose they must have received other orders for disposing of this money as mine extend only to f 3,560,000. Should your draughts be recieved for the f 2,500,000, directed to be reserved, still I do not apprehend any inconvenience, as if no loan should be previously made at Amsterdam, the deficiency may at the worst be supplied from hence.
You will have learned from my several letters the progress of affairs here & at Amsterdam. Before having any reason to believe that the U.S. would be able to reduce the rate of interest this year at Amsterdam, & assured by our bankers that all loans made there after that period would be subjected to a tax of 1. p. cent, I authorized a loan here at 4½. p. cent interest & 5. p. cent commission. Circumstances becoming more favorable before that authorisation was acted under I determined to endeavour to make use of them to ameliorate the terms of commission & succeeded in the manner mentioned to you. During this time the bankers represented to me that the increasing abundance of money at Amsterdam gave them hopes that they might succeed in effecting a loan at 4½ p. cent. early enough to avoid the tax & therefore requested my authorisation for them to sieze the first favorable moment to conclude an engagement with the undertakers at 4½. p. cent. Nothing was said about charges, but their former letters left me no doubt that they counted on an augmentation, & they wrote me soon afterwards in answer to my letters on the subject that the reduction of interest would of course augment the charges, they could not say how much precisely until authorized to make propositions to the undertakers. As soon as I had fixed the business of the loan at Antwerp I limited them to the same charges of 4. p. cent & authorised their opening a loan at 4½. p. cent interest for f 3,000,000 if it could be done before the operation of the tax.6 In answer they say they postpone it in hopes of soon effecting a loan at 4. p. cent interest with an augmentation of charges somewhat above five p. cent, & desire my authorisation as mentioned to you in my last.7 I mentioned to you also that it was then too late to stop that agreed for here, under circumstances quite different from those then stated at Amsterdam; & the effect I apprehended it might produce on our bankers there to whom it had been notified since their writing above, although it is probable they had either information or suspicions respecting it sooner. I was not mistaken in my apprehensions. On my arrival here I found a letter from them waiting for me in which they express fully their mortification at a loan being opened here.8 They gave various reasons to shew the impropriety & danger it may be of to the credit of the U.S. & finally desire that if any opportunity should present itself for stopping it that it may be done as being “absolutely necessary to insure the success of a loan at Amsterdam at 4. p. cent.”
Their letter may be reduced to the following substance which I give you in its own order. Their surprize that it did not occur to me from the relation they stand in to the U.S. to ask their opinion upon the measure, that they would then have told me that Antwerp is not a new source of credit to the U.S. as the monied men here place their money in the loans in Holland, that the Undertakers will be piqued at this & avail themselves of any circumstance to shew their resentment, that those who operate a solitary piece of business will not be as well disposed if as able as they are, to advance any monies for regular payment of interests, that borrowing money out of Amsterdam would denote the credit of the U.S. being exhausted there & be a mortifying reflection, though an untrue one, on the respectability of the U.S., that a debtor’s borrowing money here, there & wherever he can find lenders supposes great wants or small means of satisfying them & be a basis of discredit, that borrowing at different places under the same power limited as to its amount, may prevent giving the moral certainty required in such cases where personal respectability & credit are out of the question, of the power’s not being exceeded. They had misconstrued an expression in my letter which I used in notifying to them this loan, so as to infer that the wants of the U.S. were considerable, & that therefore the offers from Antwerp had been accepted; & they say in consequence that if I had deigned to inform them confidentially of the extent of these wants they would have informed me candidly how far they could be supplied there. Whereas I meant that the wants of the U.S. were such that they were sufficiently master of them to execute the design of reducing the rate of interest even at the risk of diminishing the sums loaned.
I answered their letter yesterday9 & found no difficulty in obviating the several objections they made. On the whole I continued the authorization of making the loan at 4. p. cent interest informing them that no more would be made at an higher rate, that this was authorised here, as they knew, before any hopes were held out of reducing the interest below 5. p. cent this year at Amsterdam & that it had been too late to have revoked it or I should have done it not from any apprehension that it could prevent a loan at 4. p. cent at Amsterdam, but because it was better raising money at 4. p. cent than 4½. & that if the loan was not effected at 4. p. cent I should remain fully persuaded that the hopes they had held out had been too sanguine & never believe they had been frustrated by this loan which was already engaged. I observed also that I supposed the dispositions of the undertakers would depend very much on those by whom they were employed, but that if not & they were sufficiently unjust to desire any other monopoly of the loans of a country than that which arises from negotiating them on better terms, I should imagine they (the bankers) would agree with me that it was an additional reason for desiring not to depend solely on their will. I know not what effect my letter will produce though I cannot doubt that if any opportunity presented itself in this moment for exercising their resentment with some degree of efficacity that it would be made use of. As that cannot be done however, interest will probably resume its proper weight & induce them to exert themselves as hitherto. Should they not effect the loan at 4. p. cent it will be an indisputable proof to me, that the suspicions they had entertained of the loan here, had more influence in exciting the hopes they held out than its accomplishment can have had in frustrating them.
I own however that I wait with some degree of anxiety for the event, for although what I have mentioned, is my firm persuasion yet it is possible you may think otherwise; & even the possibility of the measure which I have taken, procrastinating so desirable an event as the reduction of the interest on the loans to 4. p. cent, would augment much the distrust I have always entertained as to myself in this business & which I took the liberty of communicating to you.10
In any event however I cannot doubt Sir that you will consider the authorisation given for the loan here, as indisputably proper at the time & under the circumstances it was given, with which you were regularly made acquainted. I must add also in justice to myself that if any doubts could possibly have been entertained respecting the measure at that time, they would have been removed by the confidence of the advantages resulting from it, entertained & expressed by Mr. Morris with so much constancy & uniformity,11 & whose opinions could not but have weight with me proportioned to the proofs of the confidence reposed in him by the President of the United States.
This letter will be sent by the way of London & will be followed soon by another informing you of what shall have been done at Amsterdam, & adding assurances of the respect & attachment with which I have the honor to be Sir, you most obedient humble servant
Alexander Hamilton Secretary of the Treasury Philadelphia
ALS, letterpress copy, William Short Papers, Library of Congress.
5. Willink, Van Staphorst, and Hubbard to Short, November 14, 1791 (LS, Short Family Papers, Library of Congress).
6. Short to Willink, November 11, 1791 (ALS, letterpress copy, William Short Papers, Library of Congress).
7. Willink, Van Staphorst, and Hubbard to Short, November 14, 1791 (LS, Short Family Papers, Library of Congress); Willink, Van Staphorst, and Hubbard to Short, November 17, 1791 (LS, Short Family Papers, Library of Congress).
8. Willink, Van Staphorst, and Hubbard to Short, November 24, 1791 (LS, Short Family Papers, Library of Congress).
9. Short to Willink, Van Staphorst, and Hubbard, December 1, 1791 (ALS, letterpress copy, William Short Papers, Library of Congress).