Alexander Hamilton Papers

Introductory Note: From Oliver Wolcott, Junior, 29 March 1792

Introductory Note

This letter concerns the problem of the so-called lost million. As early as September, 1775, Pierre August Caron de Beaumarchais, the French writer and courtier, had attempted to persuade the French government of the desirability of aiding the American colonies in their revolt against England. When, in the spring of 1776, the French government agreed to send supplies from France to the colonies, Beaumarchais secured the appointment as agent and opened negotiations with Arthur Lee and Silas Deane, American agents in Paris. To protect France’s neutrality it was intimated to the Americans that the transaction should be presented as a private business undertaking between the United States and Beaumarchais through the fictitious Spanish firm of Roderique Hortalez et Cie. Arms, ammunition, and uniforms were to be sent to the United States and, in order to retain the appearance of a business transaction, certain payments in supplies were to be sent to Beaumarchais by the American states.1

In addition to the supplies secured through Beaumarchais, Benjamin Franklin and Silas Deane negotiated a loan on March 24, 1777, with the Farmers-General of France. Article 5 of this agreement provided that “The Farmers-General oblige themselves for the discharge of the amount of five thousand hogsheads [of tobacco], to remit at the disposal of Congress, and to pay into the hands of the banker who shall be appointed by Messrs. Franklin and Deane, or to direct their receiver-general at Paris to accept the bills which shall be drawn upon him by Messrs. Franklin and Deane as far as a million of livres tournois, in the course of the ensuing month, and another million the instant of the arrival of the first ships loaded with tobacco, which shall be delivered to them; the said two millions making the balance an entire payment for the five thousand hogsheads, or five million weight of tobacco, mark weight, sold by Congress at the price of eight sols per pound, before agreed upon.”2

Soon after the signing of this contract the sum of one million livres was paid to Deane and Franklin by the Farmers-General. The American agents then deposited this sum with the banker of the United States in Paris, Ferdinand Grand, and, as agreed to in the contract, shipments of tobacco were made from the United States to the Farmers-General.

On February 21, 1783, Franklin and Charles Gravier, Comte de Vergennes, the French Foreign Minister, signed a contract with the French government which summarized and explained the various loans that Franklin had obtained from France. According to the contract, there had been “Aids and Subsidies furnished to the Congress of the United States, under the title of gratuitous assistance, from the pure generosity of the King, three millions of which were granted before the treaty of Feby. 1778.…”3

Grand’s accounts showed that he had received only two million livres from the French government in the form of gratuities, and the search for the “lost million” began. At first it was supposed that the advance of one million livres from the Farmers-General might constitute the missing million, and on July 11, 1786, Franklin wrote to Grand as follows:

“I send you enclosed some letters, that have passed between the Secretary of Congress and me,4 respecting three million of Livres, acknowledged to have been received, before the Treaty of February 1778 as Don gratuit from the King, of which only Two Millions are found in your accounts; unless the million from the Farmers-General be one of the three. I have [been] assured, that all the money received from the King, whether as Loan or Gift, went through your hands; and as I always looked on the million we had of the Farmers-General to be distinct from what we had of the Crown, I wonder how I came to sign the Contract acknowledging three millions of gift, when, in reality, there was only two, exclusive of that from the Farmers.…

“It is possible, that the million furnished ostensibly by the Farmers, was in fact a gift of the Crown, in which case … they owe us for the two Ship Loads of Tobacco, which they received on account of it. I most earnestly request of you to get this matter explained, that I may stand clear before I die, lest some enemy should afterwards accuse me of having received a million not accounted for.”5

Inquiry was made repeatedly of the French government on this matter, but the royal administration refused to provide the commissioner with a statement of account. On January 27, 1787, Franklin wrote to Charles Thomson, secretary of the Continental Congress, as follows:

“You may remember, that in the correspondence between us in June last, on the Subject of a Million free gift of the King of France, acknowledged in our contract to have been received, but which did not appear to be accounted for in our Banker’s accounts, unless it should be the same with the million said to be received from the Farmers-General, I mentioned, that an explanation might doubtless be easily obtained by writing to Mr. Grand, or Mr. Jefferson.… I wrote myself to Mr. Grand a letter upon it, of which I now enclose a Copy, with his answers, and several letters from M. Durival, who is Chef du Bureau des Fonds … des Affaires Etrangères.6

“You will see by these letters that the million in question was delivered to somebody on the 10th of June 1776, but it does not appear to whom. It is clear that it could not be to Mr. Grand nor to the Commissioners from Congress;7 for we did not meet in France till the end of December 1776, or beginning of January 1777, and that Banker was not charged before with our affairs.

“By the Minister’s [reserve] in refusing him a Copy of the Receipt, I conjecture it must be money advanced for our use to M. de Beaumarchais, and that it is a mystère du cabinet, which perhaps should not be further enquired into, unless necessary to guard against more demands than may be just from that agent: For it may well be supposed, that, if the Court furnished him with the means of supplying us, they may not be willing to furnish authentic proofs of such a transaccion so early in our dispute with Britain.…”8

It was not until 1794, after the fall of the royal government, that Gouverneur Morris, United States Minister Plenipotentiary to France, was able to obtain a definite account of the missing million, and Franklin’s surmise was proved to be correct. In reply to an inquiry by Morris, Philibert Buchot, French Minister of Foreign Affairs, sent to Morris a “Copie d’une quittance dattée du 10 juin 1776. Qui parait être celle dont le gouvernement des Etats-unis a besoin pour regler Ses Comptes”9 (LS, Columbia University Libraries). The receipt reads as follows:

“J’ai recu de Monsieur Du Vergier, Conformément aux ordres de Monsieur Le Comte de Vergennes en date du 5. courant que je lui ai remis. La Somme d’un million, dont je rendrai compte à mondit Sieur Comte de Vergennes. à Paris ce 10. juin 1776.

“Caron de Beaumarchais.

“Bon pour un million de Livres Tournois.”10

1Beaumarchais’s ambiguous position caused difficulties from the beginning of the negotiations. It was not clear to Congress whether the supplies were in reality being provided as a gift to the American states by the French government using Beaumarchais’s firm as a disguise to protect its neutrality, or whether the transaction was to be regarded as a straightforward business undertaking between Beaumarchais and the United States. Even the American commissioners in Paris were divided in their opinions on this subject. For an account of this divergence of views, see Wharton, Revolutionary Diplomatic Correspondence description begins Francis Wharton, ed., The Revolutionary Diplomatic Correspondence of the United States (Washington, 1889). description ends , I, Introduction, § 62.

2Wharton, Revolutionary Diplomatic Correspondence, II, 300.

3Smyth, Writings of Franklin description begins Albert Henry Smyth, The Writings of Benjamin Franklin (New York, 1905–1907). description ends , X, 383–84.

4On May 15, 1786, Charles Thomson wrote to Franklin concerning the missing million livres (Edmund C. Burnett, ed., Letters of Members of the Continental Congress [Washington, 1921–1938], VIII, 361–62). Franklin replied on June 18, 1786 (Smyth, Writings of Franklin description begins Albert Henry Smyth, The Writings of Benjamin Franklin (New York, 1905–1907). description ends , IX, 517–18).

5Smyth, Writings of Franklin description begins Albert Henry Smyth, The Writings of Benjamin Franklin (New York, 1905–1907). description ends , IX, 527–28.

6Grand’s letter to Franklin, dated September 9, 1786, and the enclosures from Jean Durival, dated August 30 and September 5, 1786, are printed in Sparks, Works of Benjamin Franklin, X description begins Jared Sparks, The Works of Benjamin Franklin (Boston, 1848), X. description ends , 269–72.

In his letter of September 5, 1786, Durival assured Le Grand that the gift from the French government had “nothing to do with the million, which the Congress may have received from the Farmers-General in 1777; consequently [the Comte de Vergennes] … thinks, that the receipt, which you desire may be communicated to you, cannot satisfy the object of your view, and that it would be useless to give you the copy which you desire” (Sparks, Works of Benjamin Franklin, X description begins Jared Sparks, The Works of Benjamin Franklin (Boston, 1848), X. description ends , 270).

7Benjamin Franklin, Silas Deane, and Arthur Lee.

8Smyth, Writings of Franklin description begins Albert Henry Smyth, The Writings of Benjamin Franklin (New York, 1905–1907). description ends , IX, 553–54.

9Buchot to Morris, July 7, 1794 (Sparks, Gouverneur Morris description begins Jared Sparks, The Life of Gouverneur Morris (Boston, 1832). description ends , II, 446).

10Copy. Columbia University Libraries. For an account of the subsequent claims of Beaumarchais and his heirs against the United States, see Wharton, Revolutionary Diplomatic Correspondence, I, Introduction, § §69, 70, 71; Charles J. Stillé, "Beaumarchais and the Lost Million,” Pennsylvania Magazine of History and Biography, XI (1887), 34–38; ASP description begins American State Papers, Documents, Legislative and Executive, of the Congress of the United States (Washington, 1832–1861). description ends , Claims, I, 343–46.

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