To Gouverneur Morris
September 13th. 1792.1
The Legislature at their last Session having made provision for the paying off the Debt due to foreign Officers,2 the Interest of which is payable at the house of Mr. Grand,3 Banker, at Paris; and the President having authorized me to carry that provision into effect,4 I have concluded to commit such part of the business as is to be transacted at Paris to your Management; not doubting of the chearfulness with which you will render this service to the public and to my particular Department.
The object not regarding your diplomatic mission, and Mr. Jefferson being absent from the seat of Government, I open without scruple a direct communication with you on the subject.
By the tenor of the certificates which were issued the stipulation to pay at Paris is confined to the Interest. The principal is of course payable in the United States.
To enable you to make payment of this Interest Mr. Short is directed to subject to your order in the hands of our Commissioners in Holland, the sum of one hundred and five thousand Guilders.5
Inclosed is a list, shewing the names of the persons to be paid, and the amount of principal and interest due to each; computing interest from the 1st. day of January 1789. up to the last of the present year.
The reason of beginning at the first of January 1789. is that Congress placed a fund in the disposition of their then Minister plenipotentiary to make payments up to that time;6 and though an account of the application of that fund has not been rendered it is understood that the payment provided for was made.
By the list referred to you will find that the sum directed to be placed at your order is adequate to the object.
The instruction of the President to me is to cause the payment to be made in “a mode which will exempt the parties from the loss attendant on the depreciation of the assignats; and at the same time occasion no loss to the United States.”7
The line of conduct, which has appeared to me proper to fulfill the spirit of this Instruction is to give to each Creditor his option either to receive payment in bills on Amsterdam, dollar for dollar, according to the intrinsic par of the metals at Paris and Amsterdam, or to receive an equivalent in Assignats according to the current rate of exchange between Paris and Holland, at the time.
To exemplify what is meant by an equivalent suppose the following data—
|1.||That 2½ Guilders are equal to a dollar according to the intrinsic par of the metals at Paris and Amsterdam.|
|2.||That the current rate of exchange between the two places is 20 . Cent. against Paris; that is, 100 Guilders at Paris, will bring only 80. at Amsterdam.|
|3.||That the sum to be paid for principal and Interest is 100. Dollars.|
The computation to ascertain the equivalent will then stand thus—If 80 be equal to 100—so will 100 be equal to 125
125 × 2½ is = 312½ Guilders which being converted into livres, at Par, will be to be paid in Assignats at their nominal value, livre for livre.
I have made an arrangement to begin the discharge of the principal here at any time after the 15th. of October next upon demand and the production of the certificate by the party or his legal representative or Attorney duly constituted and authorized. Notice will be given that after the last of December next, interest will cease, as to all those, who shall not have made application for their principal by that day.
I request that you will also cause some proper notification of this arrangement to be given in France.
As the Certificates will be required to be produced here; the payment of Interest at Paris must be made without the production of them. Especial care must of course be taken to ascertain that the payments are made to the identical Creditors or their certain Attornies. It will be well that duplicate or triplicate receipts be taken for such payments in order that one or more sets be transmitted with the Accounts Current.
Should there be any who may prefer receiving their whole dues, interest as well as principal here—they may have the option of doing it; but in this case, they must make known their election to you, or to some person whom you shall appoint and must obtain a certificate from you or the person appointed by you of their having made and communicated that election. Should you authorize another person for the purpose, you will please to inform me without delay who he is and send me his signature.
The payments are stipulated to be made at the house of Mr. Grand; and those which have been hereto-fore made have passed through his hands. The same course will be proper, unless there are good reasons to the contrary. You who are on the spot will judge how far any such reasons may have resulted from the tempests which have of late agitated the Kingdom; and you will act accordingly. No body knows better than you how important it is, to make no misteps in money concerns.
With the most respectful consideration I have the honor to be Sir Your obedient and humble Servant
P. S. Herewith you will also find the evidence of a claim which has been lodged at the Treasury on behalf of Mr Claviere8 that what is right in the matter may be done. A copy of an advertisement from the Treasurer, of the Seventeenth Instant is also in-closed.9
Gouverneur Morris Esqr.
Minister Plenipotentiary at the Court of France.
LS, William Short Papers, Library of Congress; copy, Columbia University Libraries; letterpress copy, Thomas Jefferson Papers, Library of Congress.
1. The copies are incorrectly dated October 1, 1792.
2. For a description of this debt, see Short to H, August 3, 1790, note 5, and JCC, XXVI, 42–44, 65–66. Section 5 of “An Act supplementary to the act making provision for the Debt of the United States” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 282 [May 8, 1792]) authorized the President “to cause to be discharged the principal and interest of the said debt, out of any of the monies, which have been or shall be obtained on loan.” For the negotiations on the payment of these officers, see H to Short, August 16, September 13, 1792; H to Washington, August 27, 1792; Washington to H, August 31, 1792.
3. Ferdinand Grand.
6. On August 11, 1788, the Board of Treasury made the following report to the Continental Congress:
“The Board of Treasury to whom was referred an extract of a Letter of the 6th. of August 1787, from the Honble. Mr. Jefferson,
“Beg leave to Report to Congress,
“That the critical situation in which the provision for the payment of the Dutch Interest, has been for some time placed, has hitherto prevented the Board from recommending any appropriation of the Funds in Europe for any other object; but as information has lately been received that the Loans now open in Holland will furnish timely and sufficient Funds for the above object. The Board are of opinion, that no time should be lost in making Provision for the Payment of the Arrears of Interest due to Foreign Officers, agreeably to the Recommendation of the Minister of the United States at the Court of France, and therefore submit to the consideration of Congress the following Resolve. Vizt.
“That so much of the Loans in Holland as shall be necessary to discharge the Interest due on Certificates issued to Foreign Officers to the 31st. December 1788, be specially appropriated for that purpose, under the direction of the Minister of the United States at the Court of France.” (JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , XXXIV, 409.)
Congress passed a resolution agreeing to this proposal on August 20, 1788 (JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , XXXIV, 443).
8. Etienne Clavière, French financier and politician, was made Minister of Finance under the Girondin Ministry and after August 10, 1792, was a member of the Provisional Executive Council. In 1788 Clavière had entered into an agreement with several other men to speculate in the American debt owed to France.
9. This advertisement, dated September 17, 1792, reads as follows:
“Whereas pursuant to the fifth section of the act of Congress, entitled, ‘An act supplementary to the act making provision for the debt of the United States,’ passed the eighth day of May last, provision has been made for discharging the debts due to certain foreign officers, on account of pay and services during the late war, the interest whereof, as expressed in the certificates granted to the said officers, by virtue of a resolution of the United States in Congress assembled, is payable at the house of Mr. Grand, Banker at Paris.
“This is therefore to give notice, that provision has been and is made for the payment of the principal of the said debt at the Treasury of the United States, at any time after the fifteenth day of October next, upon demand of the parties respectively to whom the said certificates were granted, or their respective lawful representatives or attornies duly constituted and authorized, and the production of the certificates in each case granted; and also for the payment of the interest which shall be due upon the said certificates, to the 31st day of December next inclusively at Paris, in conformity to the tenor of the said certificates.
“Should there be any, who prefer receiving their whole dues, interest as well as principal, at the treasury afore-said, it shall be in their option so to do; but in this case, all such who are not within the United States at the date hereof, must make known their election to the minister plenipotentiary of the United States at the court of France, or to the person whom he shall appoint for that purpose, and must obtain from the said minister plenipotentiary, or from the person appointed by him, a certificate of his having made and communicated his election so to do.
“In consequence of the foregoing provision, interest, after the said last day of December next will cease upon all such of the said debts, for the payment whereof application shall not have been made pursuant to the tenor hereof, prior to the first day of January, one thousand seven hundred and ninety-three.
“Treasurer of the United States.”
([Philadelphia] Dunlap’s American Daily Advertiser, September 20, 1792.)