From William Short
The Hague June 28, 1792
I have the honor of resuming from this place my correspondence with you which has been lately suspended by my change of place & circumstance.1 My late letters & particularly those to the secretary of State will have shewn by what cause so long a space of time has elapsed between my appointment & my arrival here. I am anxious that it should be seen that there was no activity wanting on my part to comply with the will of government in this instance. It was not made known to me until the 7th of May.2 I immediately took measures which I hoped would enable me to set out on the 26th of the same month—my departure was however unavoidably deferred some days longer. Then being forced to pass through England from the circumstances of the moment & in the hope of rendering my arrival here more direct & perhaps more early, it was not until the 15th inst. that I got to this place.
I found here your letter of Nov 30. 91. I have since recieved from Amsterdam yours of April 2. 10 & 16. 92. I received at Paris those which you had done me the honor to write me previously in the course of the present year. Mine to you have been dated Jan. 26. March 24. April 22. 25. May 14. 26.3
Before taking up the subjects of your several letters as relative to the business at Amsterdam I will briefly report what has been mentioned in mine as relative to matters at Paris, in order that in quitting them I may leave with you as clear an idea as I can of the then situation. They are principally as follows.
1. Depreciation on payments made to France: I have already had the honor of informing you of my announcing your intention on this subject on the reciept of your letter—my reasons for considering it necessary to do so—& my applying this intention to payments to be made in future.4 Those made on the Antwerp loan only come within this description as yet. You have been informed also how it became indispensable to avoid risk to the U. S. & loss of time to make these payments at Antwerp to a person there authorized by the French government who gave his receipts expressed in florins & marking the exchange at the date of each payment.5 I have frequently mentioned to you also that the basis on which the depreciation should be calculated, being known & therefore no inconvenience being to be apprehended from a short delay, & having every reason to believe that the person who was to represent the will of government permanently at Paris either was or soon would be designated, I thought it most advisable under every consideration to leave so delicate a subject to his care.6 The event having manifested the propriety of my not taking this business on myself—I delivered to Mr. Morris my correspondence from Antwerp with the commissaries on the subject, & urged his settling it without delay, on account of the situation of the present government, with whom it was evidently better to regulate the value of assignats than with any other. He was fully sensible of this—but mentioned two causes of delay 1. a letter he had recd from the Sec. of State from which there appeared an intention to throw the depreciation on France7—2. his not having been admitted reguarly to deliver his credentials,8 & his not chusing to do anything previously. I hope that ere this he will have recieved some further explanation from the sec. of State which will enable him to proceed—& that the other cause of delay will have ceased also as he informed me previously to my leaving Paris that the day was fixed for his having his audience of the King—& that he will have adjusted the business of depreciation with the French government, although I have as yet no letter from him announcing it. I am waiting for it with some impatience in order to re-commence the payments from Amsterdam, making the proper reservations for your draughts.
2. Prospect of paying off the French debt by a single operation—I have mentioned to you several alteratives which I thought the increasing credit of the U.S. would present to their choice. That which appeared to me to merit unquestionably the preference was the offer of the house of Boyd & Kerr,9 supported by La Borde10 & connected with Hope11 of Amsterdam. I spoke of this subject particularly in my letter of March 24. You will see there by what means it was delayed. Whilst the exchange continued regularly declining, they would have contracted without hesitation & with the prospects of considerable gain. Before the arrival of Mr. Morris at Paris, a rise in the exchange as unaccountable as unexpected took place which would have rendered such a contract at least unprofitable & probably ruinous to the houses which would have contracted. The new minister also of the department of finance,12 being much versed in the business of exchange & supposed to employ artificial means of influencing it, no house chose to risk such an enterprize under such circumstances. I informed Mr. Morris of the subject, & he will no doubt make a proper use for the U.S. of such an opportunity if it should again present itself. The Minister who was most feared by the bankers who wished to undertake this business & who indeed were the only ones competent to it, from the funds they had at command, has been lately displaced. I know not how far this may encourage them to renew their offers. I shall ever consider it as a misfortune that they were not formerly closed with—but I don’t doubt you will feel Sir, that the motives which I formerly had the honor of mentioning to you as influencing me in wishing for delay, were fully legitimate.
3. Application of a part of the debt to France, to succour S. Domingo as proposed by the minister of marine. My letters from Amsterdam & Paris will have informed you of the origin & progress of this business13—& by what means I have been brought on to suspend the application of the first 4. per cent loan towards remittances to France, in hopes of its being converted into supplies to be purchased in the U. S. for succours to S. Domingo. The decree of the assembly was at length passed. I had agreed with the minister that you should hold 800,000 dollars at his disposition for these purchases, writing to you at the same time to draw for that amount at Amsterdam. My letters of April 22. & 25 & May 14 will have informed you how this business was delayed—& for what reasons—& also how in consequence of your letter of March 21. it was determined to hold that loan at your disposal instead of longer engaging the 800,000 dollars to the Minister of Marine. It was considered that the delay which he had as[k]ed & the sums already applied in America towards the demands of S. Domingo, would furnish Mr. Morris with fully sufficient reasons for considering the promise I had made, as no longer in force. I have not as yet heard from Mr. Morris what has been done in this business—but am persuaded there will have been no difficulty in it.
4. Favorable prospect for the U.S. from the disposition of the ministry as to the decrees relative to American commerce—& from the ministry’s having then for the first time a majority in the assembly. Although this does not immediately concern the American debt, yet as I mentioned it to you in a former letter I cannot avoid here touching it again for the last time. I must beg you to recollect the consideration which induced me to mention it to you in my letter of March 24 as well as what I then said respecting it. Since then that ministry have fallen out among themselves—lost the majority which they had in the assembly & consequently the force they exercised on the Monarch. They have been accordingly successfully dismissed although they were always probably unworthy of the confidence of the nation & certainly never enjoyed that of the King, yet if they could have supported themselves & kept the majority they first had in the assembly, I am fully persuaded they would have annuled the late hostile decrees to the commerce of the U.S. & this as well from the principles of the leading members of the ministry, as from their wish in general to counteract the proceedings of the former assembly, which wore a disposition that had become very popular in this. The destruction of this ministry has hastened a crisis in France, the most severe that has yet happened. It is probable that the system of absolute anarchy ⟨–––⟩ which has been growing up there for some time would in the course of things have brought it on. The post not having since arrived here (stopped as it is supposed either at Paris or on the way) we only know from a single letter sent by express that the mob had broken into the King’s Palace, & unopposed by the national guard had offered every insult to his person—armed with pikes on which the general devise was the death of the King. It is certain that he & his family were totally at their disposal & everyone trembles to learn the fate of this most unfortunate monarch—thus abandoned & delivered up to the fury of a race of miscreants which it was hoped the lights of the present age had dissipated in this civilized part of the world. Government will certainly receive much earlier & fuller information of this melancoly & alarming scene from their minister at Paris. I should not have mentioned it to you but for its connexion with what I had formerly said respecting the abolition of the late decrees respecting the commerce of the U States the late ministry possessing the majority of the assembly.14
In the re-examination of your several letters which are now before me unanswered—the first circumstance which occurs as necessary to be taken notice of is the part of your letter of Nov. 30. relative to what I had said respecting the commencement of re-imbursements to the 1st of this month. It was an error into which I had been led by the bankers at Amsterdam. They gave me to understand it at a time when I was urging the excess of our means above our wants of money—& when they wished me to believe the contrary. I had not examined the contract & was pleased when I found it was an error.
I recieve Sir with an heartfelt satisfaction the expressions of your letter of April 2 relative to my exertions at Amsterdam in reducing the interest on the loan at that time to 4. p. cent. If my exertions in France to serve my country & give satisfaction to the government by whom I was employed there have been less successfully faced yet I must beg leave to repeat to you Sir assurances that it was not through want of zeal or efforts on my part. I feel much pleasure in persuading myself that your knowledge of the spirit which prevailed there, & the operations which naturally proceeded from the order of things then existing, will enable you to attribute the effects to their true causes—& convince you that nothing on our part could have arrested the torrent of innovation which prevailed during my residence there charged with the interests of the U. S.—& have protected, much less extended, the privileges of our commerce, in opposition to the cabals & private intrigues of interested individuals which ever gave—ever must govern such assemblies.
What you are pleased to say Sir with respect to the satisfaction with which the intelligence of the result of my exertions at Amsterdam was received by the President & the pleasure it gave to the public at large cannot but be doubly pleasing at this moment in particular.
I shall communicate to Mr. Morris an extract of your letter of April 2 respecting the adopting a rule for liquidating the payments to France—referring you to what I have said above on that subject.
Nothing has been done at Antwerp since my letter informing you that M de Wolf15 had suppressed a part of the loan at 4.½ p. cent on the condition of being supplied with bonds at 4. p. cent. I expect him here soon & will inform you of the result of our conference. He is very devious & thinks his exertions entitle him to be employed in a new loan at 4. p. cent. Mr. Morris also is an advocate in favor of it & from his superior knowledge & degree of confidence placed in him by government, his opinions are necessarily entitled to much weight. What you say on the other hand with respect to holding out the idea of confining the loan at Amsterdam in some measure counteracts this.16
I observe what you say in your abovementioned letter with respect to your intended draughts. The two & an half million which you there speak of, you may draw for as soon as you please. In order that there may be no misunderstanding or delay on this subject—it will be well to mention to you that a part of the loans already made will suffice to answer your draughts. I had the satisfaction of announcing to you by a few lines written for that purpose only from Paris on the 26th of May, that a second loan at 4. p. cent had been contracted for.17 It is now going on. The 800,000 dollars I formerly mentioned to you on account of the minister of marine, to be drawn for, & afterwards as being to be held at your disposition, I shall consider as making a part of the 2½ million of guilders you mention in your letter of April 2, unless you direct the contrary in some future letter. Taking care therefore that the bankers shall be provided to answer your draughts for 2½ million of florins, so as with ½ million already drawn for to complete the 3 millions, I shall as soon as I hear from Mr. Morris direct them to proceed in their payments to France—the sums which they have already on hand having accumulated to a much greater degree & remained much longer idle that I would have wished, for the reasons which have been mentioned to you in my several letters. There will be no risk in applying a considerable part of the cash now intended towards the French debt & counting on future entries to answer a part of your draughts. It would be well therefore to inform me as nearly as you can of the times at which they will be made.
Your letter of April 10 informs me of payments made or to be made in America on account of the French debt. I observe they are expressed in dollars. Would it not be proper that your minister at Paris should be informed of them as well as the rate at which the dollar is to be converted into livres tournois? It would be advantageous probably if it were to be settled by the same rule by which he shall settle the payments made in florins if you have not already fixed it.
The information contained in your letter of April 16. was highly satisfactory. The bankers at Amsterdam seemed to think that the impression made there by the fluctuation of the funds in America was too partial & momentary to render it necessary to publish any thing respecting it. They apprehended it ought rather do harm & as my own opinion was similar I have not done it—& therefore kept your letter for my own satisfaction & to enable me to meet such observations as I may hear made on the subject. I do not apprehend that the state of things in France require any thing to be said there either respecting the business. Still for greater security I shall in consequence of what you say send a copy of your letter to Mr. Morris. I have the honor to be Sir, with the accustomed sentiments of attachment & respect your most obedient & humble servant.
Alexander Hamilton Secretary of the Treasury, Philadelphia
ALS, letterpress copy, William Short Papers, Library of Congress.
1. Short had been appointed Minister Resident to The Hague in January, 1792.
2. Gouverneur Morris had written to Short from London on February 10, 1792, informing him of an official communication received in the British capital concerning Morris’s nomination by Washington as Minister Plenipotentiary to France and Short’s nomination as Minister to The Hague (Morris, Diary of the French Revolution description begins Gouverneur Morris, A Diary of the French Revolution, ed. by Beatrix Cary Davenport (Boston, 1939). description ends , II, 363–64). Short’s official letter of appointment, however, was delivered to him by Morris on the latter’s arrival in Paris.
3. Letter of May 26, 1792, not found.
8. Morris explained the delay in presenting his credentials in a letter to Jefferson, dated June 10, 1792. The pertinent section reads as follows: “As Mr Short remained here until the second instant, and was better acquainted with the current transactions, I relied on him for the communication of them. He informed you, that we obtained an interview with M. Dumouriez on the fifteenth of May. In this interview he told me, that he thought it was best I should be presented to the King immediately, but yet my first audience did not take place until the third of this month. He apologised for this delay, as proceeding from the state of public affairs, which kept him continually occupied and agitated” (Sparks, Gouverneur Morris description begins Jared Sparks, The Life of Gouverneur Morris (Boston, 1832). description ends , II, 176).
10. Jean Joseph, Marquis de Laborde, banker to Louis XV.
11. Henry Hope, head of an Amsterdam banking firm.
12. Short was probably referring to Etienne Clavière, who had been appointed Minister of Finance on March 23, 1792, and was replaced on June 13, 1792, by François Beaulieu.
14. This paragraph refers to the fall of the Girondin Ministry, which had come into power in March, 1792.
17. Letter not found. The Holland loan of 1792 had been authorized by H in his letter to Short of March 21, 1792. The loan “was drawn for three millions of guilders ($1,200,000), at 4 per cent. interest, to run for eleven years, then to be redeemable in five equal annual payments of 600,000 guilders each. The commission and charges amounted to 5 per cent, with an additional charge of 1 per cent. on the interest received and paid” (Bayley, National Loans description begins Rafael A. Bayley, The National Loans of the United States from July 4, 1776, to June 30, 1880 (Washington, 1882). description ends , 26). The contract for this loan, dated August 9, 1792, and Washington’s ratification, dated November 5, 1792, may be found in RG 59, Records Relating to Foreign Accounts, 1782–1797, Letters, Accounts, and Contracts, National Archives.