From William Short
Amsterdam Dec. 30. 1791.
My letter of the 23d. inst. which I sent by three separate conveyances will have informed you of a loan of 3,000,000 florins being contracted for at 4. p. cent interest. That of the day before yesterday sent by the way of the Texel contained the steps which preceded & led to this loan & the circumstances respecting the charges on it. The present which goes by the English packet of the next week will inform you that these charges are definitively settled at 5½. p. cent, which seems now perfectly agreeable to the commissioners, notwithstanding the effort they made to fix them higher. I have full confidence they may be reduced without difficulty on future loans. Instead of the eight months mentioned in my letter of the 23d. the undertakers have been brought to contract for the completion of the loan in six months, in equal portions monthly, the time to count from the 1st. of Jany. The commissioners are fully persuaded that the epochs will be anticipated.
The reservation which you formerly made will be kept to answer your draughts,1 & the sums which fall due, here in february & march will be made from the monies arising on this loan; the surplus will be remitted to France until I hear from you. Not knowing the terms at which your draughts may arrive & they being as I learn here at ten days sight, I have found it necessary to inform the bankers of the amount to which they may go, in order that in making remittances they may take care to remain provided to answer your orders. Had I known the terms at which you would probably have sent your draughts in succession, as some of them will in all likelihood not arrive immediately, I should have thought it most advisable to have applied the monies now in hand to the French payments, & have counted on the successive entry of the present loan to anwer your successive draughts; at least as far as they should be found to correspond with each other.
I have formerly had the honor of mentioning to you Sir, a tax intended to be laid by this government on foreign loans made here.2 It was represented to me by the commissioners as a thing beyond all doubt to take place from the 1st. of Jany. It is now under discussion in the States of Holland & if adopted in this province the example will be followed in the others. The commissioners proposed to me, in order to avoid this tax in the case of its taking place, to sign the original contract for a loan of six millions at 4. p. cent, & to leave it here in the hands of the notary, so as to be absolutely at my disposal, & to have no force until I shall call it into existence. I have done it accordingly because the measure can have no inconvenience & may be attended with the advantage of avoiding a tax of which the borrower will certainly be obliged to pay the whole or much the greatest part.
Should peace continue in Europe they think they shall ere long be enabled to bring it on the market. They understand that the charges are then to be fixed at what may be agreed on between us. The natural guide for this would seem to be those which they are obliged to pay the undertakers & others employed. They however will not consent to state them & say that you are perfectly satisfied with it, since in giving you formerly the analysis of a particular loan they informed you it was merely to satisfy curiosity & could not consent to its being taken as a precedent, to which you have not objected. They say it is contrary to usage here, contrary to their fixed principles &c. &c. The true objection however to give This analysis can only arise from its throwing too much light on the subject, to which all people in business here have an insuperable aversion.
About one fourth of the Antwerp loan was recieved at the date of my last letters from thence3 & it was supposed a third would be, by the end of the month. A part has been remitted to Paris & the rest will be remitted also as fast as good bills can be found. M. de Wolf informs me that he is sure of obtaining money there for the U.S. at 4 p. cent, & hopes I shall allow him to give me proofs of it.4 I observe however by your late letters that you prefer loans on equal terms at Amsterdam.5 Until I hear from you therefore I shall probably postpone doing any thing further there unless some arrangement for the French debt not yet due shd. render it advisable. I should be happy to have your ideas as to the two places examined comparatively in the case of the tax being laid here. It is only by knowing how far your preference to Amsterdam extends that I shall be enabled to decide fully in some cases which may present themselves. I hope your answer to my letter announcing the loan at Antwerp will give me lights on this subject.6
In the statement which you formerly sent me of the arrears due on the debt of the U.S. to France, they are expressed in dollars & no notice is taken of the arrears of principal on the loan of six millions of livres nor of any payments which may have been made to France on account of the interest of the debt, previous to the orders you gave me.7 It appears that several sums have been paid to the Royal Treasury by Mr: Grand8 but I have not been able to learn from him, & much less from the commissaries of the treasury, who were not able to find on their books that any payments had been made at all, how the account stood at the time of my commencing the payments. I will ask the favor of you therefore to have the account up to that time stated in livres, that I may see what was then due & consequently know how much remains exigible at present. You will be furnished by the bankers here of course with the payments as made.
I hope also to learn from you in consequence of a former letter what measures you wish to be taken with respect to the debt to the farmers general & to Spain.9
I have already had the honor of mentioning to you that the depreciation of assignats & the fall of exchange in France although clearly connected with each other, were not uniform in their progression.10 In the late unprecedented fluctuation the assignats were even lower than the exchange, having depreciated 50. p. cent. They have now risen & were quoted by the last post 32. p. cent, but sooner or later they must inevitably experience the fate of all forced paper unsupported by regular taxes.
I mentioned to you in my last the proposal made by the minister of the marine to the national assembly respecting the application of the American loan to the relief of the sufferers in S. Domingo.11 As yet the decision is not known here.
You will recieve from the bankers the contracts for the two last loans which they will forward to obtain the certification thereof. They will also probably mention a difficulty which arose respecting the re-imbursement of the six million loan.12 Until then no objection was made to the loans opened here, to the clause for re-imbursement at the will of the U.S. In that it seems the brokers had concieved themselves authorized to promise that this clause should be suspended for ten years as in the first loan made here by Mr. Adams.13 This was however contrary to my authorisation & their intention. The bonds have consequently been passed conformably thereto. The brokers & undertakers insisted on their proposing to me to change the clause which they refused to do. They have mentioned the circumstance to me incidentally.
You will probably find it advisable to take into consideration the means you may judge proper for exchanging the five p. cent obligations of the U.S. for others at a lower rate of interest. The peace which at present prevails in Europe & which can not be counted on as of certain duration, & the favorable point of view in which the U.S. are now regarded by the money lenders, would seem to recommend that no time should be lost. War would necessarily oblige the belligerent power to give an higher interest than one at peace, but it would oblige both to give an higher rate than the present of 4. p. cent, unless it should be for very small sums.
The East-India company continue their loans here. On their own credit they could borrow nothing. They are guaranteed therefore by the States of Holland, & yet they are obliged to pay 4. p. cent interest with a premium of 5. p. cent at the time of re-imbursement. These are the terms of one opened here within a few days for five millions of florins. It is generally supposed their affairs are in bad condition. Their partisans say that the loans they have made here (which I am told pass 50. millions since the peace) are to make up the losses sustained during the war & to extend their commerce. They have lately introduced a change in the mode of making their sales, which is found so injurious to the commerce of individuals that the merchants of Amsterdam are now in contestation with them before the States-general. It is supposed the Company will succeed, the apprehension of which displeases a good deal here. Their charter expires I think four years hence. No doubt however is entertained of its being renewed.
I have learned nothing here respecting the mint which seems worthy of your attention. M. Brantsen whom I formerly mentioned to you14 as most likely to give lights on this subject returned to Paris a few days before my arrival here. I hope you will long before this have recieved my letters respecting Mr. Drosts change of mind,15 which I am sorry not to have been able to have informed you of previous to the opening of Congress, as I observe by the Presidents speech that he was counted on.16
I shall be detained a few days longer than I expected by the Printer’s not having furnished the bonds of the three million loan agreeably to promise. I am now signing them & shall leave this place for Antwerp on the 4th. of the next month, where I shall stop a day or two & then proceed to Paris.
This letter will accompany one to the Secretary of State17 & carries with it assurances of the sentiments of respect & attachment with which I have the honor to be
Sir Your most obedient humble servant
⟨I enclo⟩se you a state of the exportations ⟨from Pe⟩tersburg to America for the present ⟨– –⟩ the number of vessels as you will ⟨see is o⟩nly a third less than that of the last ⟨– – w⟩hich must prove the increase of the ⟨consumptio⟩n of those valuable articles in the U.S.
The Honble Alexander Hamilton Secretary of the Treasury, Philadelphia
ALS, letterpress copy, William Short Papers, Library of Congress.
3. Charles John Michael de Wolf to Short, December 22, 1791 (ALS, Short Family Papers, Library of Congress).
4. Wolf to Short, December 26, 1791 (ALS, Short Family Papers, Library of Congress).
8. Ferdinand Grand, Paris banker.
9. See Short to H, November 12, 1791. For a description of the loan from the Farmers-General, see H to Short, September 1, 1790, note 26. The Spanish loan is described in H to Short, September 1, 1790, note 19.
13. See H to Short, November 30, 1791. The first loan negotiated by John Adams in Amsterdam was the Holland loan of 1782. For a description of this loan, see Willink, Van Staphorst, and Hubbard to H, January 25, 1790, note 15.
15. Short wrote to H concerning Jean Pierre Droz on August 23 and September 23, 1791, but in neither letter did he state that Droz had changed his mind. Short had written to Thomas Jefferson on October 14, 1791, that Droz would not go to America (LC, RG 59, Despatches from United States Ministers to France, 1789–1869, January 16, 1791–August 6, 1792, National Archives).
16. See Washington’s third annual address to Congress of October 25, 1791 (GW description begins John C. Fitzpatrick, ed., The Writings of George Washington (Washington, 1931–1944). description ends , XXXI, 403).
17. Short to Jefferson, December 30, 1791 (LC, RG 59, Despatches from United States Ministers to France, 1789–1869, January 16, 1791–August 6, 1792, National Archives).