From William Short
Amsterdam Dec 23d 91
I had the honor of writing to you from hence on the 15th. inst. & of informing you of the posture of the American business here at that time. I am now happy in being able to announce to you the conclusion of a loan here for the U.S. at 4. p. cent interest.1 The reimbursements are to begin at the end of ten years & to be made in equal parts during the five succeeding. It has been found absolutely necessary to abandon the clause for re-imbursement at the will of the U.S. the lenders having lately become much dissatisfied with it, since the fall of interest in the other loans. In future however it will be found practicable for the U.S. to reserve this right after a given number of years. The sum of the loan is three millions of florins. The Undertakers have insisted on eight months, instead of five as allowed in the last loan. Although it will probably be furnished before the term, yet it will certainly not be done as expeditiously as the last, the market being at present excessively charged with loans. The charges will be between 5–6 p. cent, that point however is not finally settled, the bankers insisting now with some earnestness on 6. p. cent, notwithstanding in their first letter they stated them at less.2 I shall settle with them the terms at which this loan may be considered as at your disposal, so that you may regulate your draughts for such parts as you may chuse to call for. No reservation having been made by you I shall continue to have it applied towards the French payments until I hear from you, in proportion as it is recieved.
The departure of the English post by which this letter will be sent precludes me from saying anything further to you at present. In my next I will inform you of the steps which have preceded this loan, & which have convinced me that that at Antwerp has not had an unfavorable influence as the bankers here pretended.
I inclose you the second copy of the Antwerp contract mentioned in my last. Immediately after signing the bonds for the new loan which will be in five or six days unless delayed in the press, I shall return to Paris. I beg you to be persuaded of the sentiments with which I have the honor to be Sir, your most obedient servant
The Honble. Alexander Hamilton Secretary of the Treasury Philadelphia
ALS, letterpress copy, William Short Papers, Library of Congress.
1. Rafael Bayley describes the Holland loan of December, 1791, as follows: “The information respecting this loan is very scanty. It was negotiated in Holland under the authorizing acts of August 4 and 12, 1790, by Mr. Short. Finding that money could be obtained cheaper in Holland, he withdrew a portion of the Antwerp loan from market and opened a loan of 3,000,000 guilders ($1,200,000) in Amsterdam. He obtained the money at a lower rate of interest but a higher commission. It appears to have been negotiated to run for twelve years, at 4 per cent. interest, then to be redeemable in five equal annual payments of 600,000 guilders each. The charges for commission, brokerage, &c., were 5½ per cent. W. & J. Willinks, N. & J. van Staphorst, and Hubbard were the bankers employed in the transaction. The redemption commenced in 1803 and was completed in 1807” (Bayley, The National Loans of the United States from July 4, 1776, to June 30, 1880 [Washington, 1882], 26).
A copy of the contract for this loan may be found in RG 59, Records Relating to Foreign Accounts, 1782–1797, Letters, Accounts, and Contracts, National Archives.
2. Willink, Van Staphorst, and Hubbard had written to Short on November 17, 1791: “We forbear doing it [opening a loan at 4½ percent] in the flattering hope that towards the End of this Month or Commencement of the next, the great plenty of Money, that will be poured upon this Market, from the States of English Stocks, may enable us … to reduce the Interest for the UnitedStates to Four per Cent. To obtain this, the Charges must probably exceed a Triffle Five per Cent, but lower than that they assuredly cannot be …” (LS, Short Family Papers, Library of Congress).