From William Short
Paris May 14 1792
I recieved the day before yesterday your letter of the 21st. of March expressing your wish that a loan should be opened at the same rate with that of Antwerp.1 It found me in correspondence with our bankers2 with respect to the charges on one to be made as soon as a proper moment should occur at 4. p. cent interest—the rate of the last opened in Amsterdam, of which you had not recieved our letters of notification at the date of yours.3
I had desired them to fix the charges at 4½ p. cent which I am persuaded would leave them the same clear profits as on the first loan,4 & with which of course they should be satisfied. I was apprehensive however they would insist on higher, & was not therefore surprized on recieving their answer5 the day before yesterday covering your letter of March 21st, in which they say that the charges cannot be lower than 5. p. cent, & that they were not sure of success at this moment, but would use their utmost endeavour whenever the instant should be favorable. I have informed them6 that I supposed the 5. p. cent was asked on the footing of their being obliged to give more to their undertakers & therefore consented to it—authorizing them to open the loan as soon as the moment would admit of it. The present warfaring appearance of Europe may force a rise in the rate of interest perhaps, but nothing shall be left undone to procure a loan at the present rate of 4. p. cent. If it can be effected at all it may be for the charges allowed as well, as if they were more considerable; & of course I think it improper to propose an augmentation, although it would be much better to increase them than to allow an increase of interest. You may rest assured of being informed without delay of the opening of a new loan, as well as the prospects which may precede it if there should be delay.
I had the honor of informing you in my two last letters7 of what had been done here with the minister of marine.8 Mr. Morris9 has since arrived here (on the 7th. of this month) of which I immediately informed the Minister of Marine.10 Having not yet an answer from him, I should imagine he had not yet obtained of the committee the explanation he expected from them with respect to the six millions mentioned in my last. Your letter of the 21st. shewing your intention to employ further sums for the purchase of the public funds, & your disposition to give even an high rate of interest for monies to be thus applied, has suggested that it would be agreeable to you if the monies at present in the hands of our bankers arising on the last loan11 shd. be put at your disposition for that purpose instead of going to the minister of marine for succours to St. Domingo.12 I have shewn your letter to Mr. Morris who is of opinion as well as myself to do this. I therefore wish to inform you that the last loan (of December) at 4. p. cent interest shall be held to answer your draughts. Its amount was three millions of florins no part has been paid to France. Of course, there is only to be deducted the amount of applications known to you—& wch. will appear from the bankers accounts transmitted to you in which should be included the payments for interest in february & march & the same for the 1st. of next month. Should the minister of marine obtain from the committee a report according to his wishes, & come forward in the promise made to hold the 800,000 dollars13 at his disposition in America, Mr. Morris proposes to answer it by informing him that he has already learned from the government that 400,000 have been furnished14 & does not know but that the monies at your disposition may have been already applied that way. I apprehend however the assembly will include the six millions voted in the twelve millions drawn for,15 although the minister was formerly persuaded of the contrary, & that the affair will take that turn. Should he delay the renewal of his application it will be an additional reason to give him, that the monies had been in the interval otherwise employed.
Mr. Morris has recieved here under cover to him & delivered to me the triplicate of your letter of Jan 28. for me—neither the first or second has come to my hands, & of course I have not recd. your report therein mentioned.16 Nor have I recd. your letter of the 30th. Novr mentioned there also. All the others which you have announced have been recd. My late letters to you have been of January 26. March 24. April 22. & 25.
I have formerly informed you of the footing on wch. the payments made here on the Antwerp loan stood17—as well as the cogent reasons for having them made at Antwerp instead of being remitted by bills of exchange. Mr. Morris has recieved a letter from the Sec. of State, by which he apprehends it to be the intention of government to transfer to France the loss by depreciation on the assignats.18 He of course waits for further instructions before settling the rate at which the U. S. are to be credited for the payments made from Antwerp. In consequence of your letter to me of Sep. 2. I informed the minister here & the commissaries of the treasury, of the intention of the U. S. not to take advantage of this depreciation. I did not include the payments previously made although your letter authorized it, supposing it best to leave this for your future consideration.19 Of course no indemnity will be made for them. My letters announced this intention of the U. S. only to begin with the Antwerp loan. The rate of exchange & the current difference between Specie & paper here, being known, will furnish the basis for regulating this business finally, which Mr. Morris will do on recieving your further instructions. I hope they will arrive ere long & that the business will be finally settled by him to your satisfaction. I shall give him the letters which have passed on that subject.
I have mentioned to Mr. Morris what I communicated to you with respect to the proposals of Boyd & Kerr.20 Since then a very great rise having taken place in the exchange (it was with Amsterdam as low as 27½ & rose to 35. & is now 30) has suspended their ideas on this subject, as such a rise would have proved ruinous to them. They consider it however only a suspension, although it is probable they will be more timorous now, the game being much less sure than they expected. Should they come forward again Mr Morris will no doubt do what so advantageous an operation for the U. S. would dictate. These advantages I mentioned to you in my letter of March 24.
I shall not have the honor of writing to you again from hence as I shall set out for the Hague towards the end of the month.21 I am now much busied & hurried in my preparations of departure, having never known until the 7th. of this month whether I was to go there or to Madrid first,22 & of course was not able to conform my preparations thereto. Until then I had only learned through Mr Morris & the gazettes in general terms that I was appointed to the Hague, & joined in a commission at Madrid. I have the honor to be Sir, most respectfully your obedient & humble servant
Alexander Hamilton Secretary of the Treasury, Philadelphia
ALS, letterpress copy, William Short Papers, Library of Congress.
1. The Antwerp loan had been opened in December, 1791, for three million guilders at four and one-half percent interest and four percent charges. For a description of the loan, see Short to H, November 8, 1791, note 4, and November 12, 1791.
2. Willink, Van Staphorst, and Hubbard.
4. This is a reference to the Holland loan of 1790. For a description of this loan, see Willink, Van Staphorst, and Hubbard to H, January 25, 1790; H to Willink, Van Staphorst, and Hubbard, November 29, 1790. The bankers’ charges on this loan were four and one-half percent.
5. Willink, Van Staphorst, and Hubbard to Short, May 7, 1792 (LS, Short Family Papers, Library of Congress).
6. Short to Willink, Van Staphorst, and Hubbard, May 12, 1792 (ALS, letterpress copy, William Short Papers, Library of Congress).
8. Jean de Lacoste.
9. Gouverneur Morris had been appointed United States Minister Plenipotentiary to France in January, 1792.
10. Short to Lacoste, May 8, 1792 (ALS, letterpress copy, William Short Papers, Library of Congress). According to Morris’s diary he arrived in Paris on Sunday, May 6, 1792. His first interview with Short was on May 7 (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, 424–25).
11. See note 3.
13. Short had written to H on April 22, 1792, that in his correspondence with the Minister of Marine he had “engaged that a certain sum, which has been since fixed at 800,000 dollars should be held by you at the disposition of France for the purchase of supplies in America for S. Domingo.”
14. On the application of Jean Baptiste de Ternant, Minister of France to the United States, the United States had agreed to advance four hundred thousand dollars on “account of the debt due to France.” See H to Short, April 10, 1792. Thomas Jefferson had informed Morris of Ternant’s application in a letter of March 10, 1792 (ALS, letterpress copy, Thomas Jefferson Papers, Library of Congress).
16. In his letter to Short of January 28, 1792, H had enclosed his “Report on Estimates of Receipts and Expenditures for 1791-1792” January 23, 1792.
18. Short is referring to the letter which Jefferson had written to Morris on March 10, 1792. In discussing the French debt, Jefferson wrote: “The Secretary of the Treasury has reason to believe that the late loan at Antwerp has paid up all our arrearages to France both of principal & interest, & consequently that there is no part of our debt exigible at this time. However the legislature having authorized the President to proceed in borrowing to pay off the residue, provided it can be done to the advantage of the U.S. it is thought the law will be satisfied with avoiding loss to the U.S. This has obliged the Secretary of the Treasury to require some conditions which may remove from us that loss which we encountered, from an unfavorable exchange, to pay what was exigible, and transfer it to France as to payments not exigible” (ALS, letterpress copy, Thomas Jefferson Papers, Library of Congress).
21. Short had been appointed United States Minister to The Hague in January, 1792.
22. On January 24, 1792, the Senate had confirmed the appointment of “William Carmichael, present Chargé des Affaires of the United States, at Madrid, and William Short, present Chargé des Affaires of the United States, at Paris, to be Commissioners for negotiating and concluding, with any person or persons, who shall be duly authorized by his Catholic Majesty, a convention, or treaty, concerning the navigation of the river Mississippi, by the citizens of the United States, saving to the President and Senate their respective rights as to the ratification of the same” (Executive Journal, I description begins Journal of the Executive Proceedings of the Senate (Washington, 1828). description ends , 99). See also “Notes on Thomas Jefferson’s Report of Instructions for the Commissioners to Spain,” March 1–4, 1792, note 1.