From William Short
The Hague Dec. 17. 1792
I had the honor of writing to you on the 29th. ulto by the English packet, the day after I had recieved the letters of the Secretary of State relative to the business in Spain.1 I expected then to be able, to set out from this place, much sooner. I have been detained by the answer from Paris not arriving as soon as it might have done2 & by my wish to recieve from the commissioners at Amsterdam3 & forward to you previously to my departure, the account you had asked of me of the monies paid by my order.4 I have now the honor of inclosing you that account reduced to the simplest & clearest form possible. It consists of two parts. The monies paid to the French government posterior to Nov. 1790 & The monies paid to me or on my draughts from the time of my being left at Paris as Chargé des affaires (Sep. 24. 1789) up to July 1. 1792.
No. 1. shews the amount of the sums paid to the French government No. 1 (a) & No. 1.(b) are the general account of the commissaries of the French treasury (viz the copy furnished me by M. Morris5 the original remaining in his hands) in which you will find the same payments comprehended & which vouch them.
No. 2 Is a statement of all the monies that I have recieved or that have been paid on my draughts for any cause whatever, whether on my account or not, up to the 5th. of July last. I chose to have the statement made in that form that there might be no possibility of an omission, although there are several articles which should not enter into my account with the U.S. & which are not entered into the accounts wch. I have transmitted to the department of State. These articles are explained by marginal notes annexed to No. 2. They are for monies which M. Jefferson desired me to pay for him by draughts on the commissioners, & which were to enter into his acct. with the U.S. which has certainly been done, as I sent him the accounts of these expenditures made for him, which he approved. That I might not be obliged to keep an account of those draughts I stated in my letters of advice, the purposes for which they were made, desiring that they might be placed in M. Jefferson’s account with the U.S. I rather apprehend however that this was not attended to & that the commissioners have placed them in my acct. In that case I must ask the favor of you to advert to Mr. Jefferson’s acct. with the U.S. or to M. Jefferson himself, which will immediately shew that these draughts noted in the margin were for him. I wish this reference to be made, because these draughts were not stated in my accts. transmitted annually to the department of state—& also that you may see that I have scrupulously observed a rule which I prescribed to myself as being particularly proper in my situation, namely of never drawing for any part of my salary before it became due. This would not appear to be the case if the draughts made by me on acct. of expenditures for Mr. Jefferson, were to be considered as made on my own acct. for salary & contingencies of stationary, postage &c. I hope & trust that ere this the accts. transmitted by me, on acct of my salary & contingencies will have been carried through the proper process by the department of state, & I ask it as a favor that if any article should not carry the most complete satisfaction with it, that I may be informed of it at present whilst in the way to procure the proper eclaircissements if any should be wanting, although I endeavoured by the accts. themselves & the letters to the Secretary of State accompanying them to leave nothing deficient. I asked his orders with respect to the vouchers for the contingencies disbursed on public account, which remained in my hands, not chusing to venture them across the Atlantic without his directions which I have not yet recieved.
No. 3. Is an account furnished me by M. de Wolf6 of his draughts on the commissioners at Amsterdam for the payment of the interest due the 1st. inst. on the Antwerp loan. I have had it compared with the books of the commissioners & found it to be just. The draughts were made by M. de Wolf with much care & attention to the interests of the U.S. The favorable moments of the exchange were made use of so as to have obtained a considerable advantage as you will see.
I have formerly mentioned to you that 950 of the bonds of this loan had been suppressed by me, & were left at Paris unsigned in M. Morris’s hands.7 This acct of the payment of the interest will ascertain that they have never been delivered, & that the loan is in fact only 2,050,000 florins. M. de Wolf informs me that these bonds now sell [at] 101½ so that the American credit is higher than that of any other power at Antwerp. I have long ago transmitted you his acct. on the reciepts on this loan & the payments made by him to France,8 which you will find confirmed also by the acct. of the commissaries inclosed.
Finding that I should be detained both by the necessity of recieving information from Paris as to the certainty of my passage through France, & also by the delay of the commissioners in furnishing me the accts I had asked, I determined to go to Amsterdam for a few days in order to examine myself into the state of American affairs there & give you as just an idea as I could previously to my leaving this country. I have already informed you of what has passed between the commissioners & myself as to the powers they wished me to obtain from you to borrow at an higher rate of interest than 4. per cent.9 I have not undecieved them as to the limits of my powers, but on the contrary impressed on them how averse I was sure you would be to raise the rate of interest on any occasion whatever. I have recommended it to them particularly to impress this idea on their undertakers & money lenders, if they wished to confine the loans to Amsterdam, letting them understand at the same time that I had better offers made me elsewhere than any rate above 4. per cent interest. They seemed to attend to this part of our conversation with some kind of anxiety, altho’ they were unwilling to let me suppose they concieved any danger of our being tempted by offers elsewhere. It will become in future an object of some delicacy to manage this business so as to keep off by means of Antwerp all hope of raising the rate of interest at Amsterdam. The commissioners would certainly procure a loan at any rate of interest however low rather than see us make use of Antwerp—but they have some motives of much weight for not forcing this rate of interest too low in the first instance if left to themselves. Should the interest be as low as it may be reduced hereafter they lose the profits which they contemplate on the reduction of the rate of interest by opening new loans in future for the same at the reduced rate. By this means you will observe a loan at 4½ or 5. p cent interest, besides the profits it yields immediately holds out the certainty of its producing a second time by its conversion to one of a reduced rate. I mention these as considerations so far as the rate of interest would be under the control of the commissioners—but it might so happen that it would not be under their control—& certainly would so happen if the U.S. were obliged to go on the market at present. The present state of Europe induces all the money lenders to hold back their money on the contemplation of an advanced rate of interest—but above all the present state of the English stocks produces this effect to an incalculable degree. Many people at Amsterdam & other parts of this country have made fortunes by purchasing into the English stocks at the lowest rate & selling out at the highest; so they have been their own witnesses of these ebbs & flows in those stocks, nothing will be so tempting to them as the present prospect of their fluctuation. Every money lender will stand on the watch & hold himself ready for the first turn of the tide. All the borrowing powers at Amsterdam feel the effects of this disposition most sensibly—the American bonds continue the highest but the 4. per cents are down decidedly to 96. & if any person should wish to dispose of any quantity of them they wd. not produce more than 95. The late Spanish loan at 4½ per cent interest hangs an heavy load on those who are interested in it, although supported by Hope’s house10 & all their influence.
You will easily see under this state of the market how essential it is for the U.S. not to be forced on it. I cannot too often repeat how essential it is to ingraft fully the idea of their fixed determination not to retrograde in their rate of interest. Every effort should be made rather than to do this. If once the money lenders were allowed to suppose we might be induced to retrograde, it would certainly have an unhappy influence for some time to come—not to mention the double expence to the U.S. of making the loan first at an advanced rate of interest with a view to reduce it hereafter. I flatter myself particularly from your purposing to remit for the payment of interest in future, that there will be no necessity for a new loan for a long time to come—& I derive much pleasure from this consideration. Should you have disposed of the large sums remaining in the hands of the commissioners on recieving information of their being locked up there by the King’s suspension, This will enable you I should hope to provide for the million re-imbursement next June from home.11 It is impossible to say what will be the then state of the market, but it would be dangerous to rely on it lest the U.S. should be forced to make sacrifices in coming on it. The great object is to keep the matter so in our own hands as to be able to come on the market or not—& this is so important that I trust you will excuse the importunity with which I urge it.
As yet no draught of yours on the commissioners has arrived since the suspension except the 100,000 florins you mentioned to me.12 Should you instead of remitting for the interest due in the first months of the next year, have the payments made from the monies here on hand, & call for the rest—this will enable you to remit for the re-imbursement in June instead of the interest as was your intention, & thus secure the U.S. from being forced on the market against their will. I shall flatter myself at least with this hope as long as I can, as it seems to me to be well founded.
Whilst at Amsterdam I examined also into the state of the Spanish payment.13 The exchange with Madrid has taken so unfavourable a rise that the commissioners have suspended taking bills. They are persuaded a change will soon take place. As yet no answer has ever been recieved from the Spanish government. These circumstances joined together made me adopt the delay of the commissioners. Should the exchange become more favorable they will remit—if not they will await my orders from Madrid, where I shall be able to learn the cause of the unaccountable silence of the ministry on this subject to Mr. Carmichael.14
As you are acquainted with my mission to Spain I need not observe to you how much delay it will occasion if you should continue to transmit through me your orders to the Commissioners. It will probably be more advisable to charge the minister of the U.S. at London or Paris, with a branch so important at this moment & likely to become critical during the next year. A nearer view of the ground than I can possibly have at Madrid may be important & particularly a correspondence more rapid than can take place from thence. I hope you will excuse the liberty I take in suggesting these considerations lest they should escape you in the immense circle you are obliged to embrace.
I shall leave this place the day after to-morrow without fail & pursue my route to Madrid through France. I have the honor to be most respectfully
Sir your most obedient & most humble servant
Alexander Hamilton Secretary of the Treasury Philadelphia
ALS, letterpress copy, William Short Papers, Library of Congress.
2. Short was waiting for information on the feasibility of traveling through France on his way to Spain.
3. Willink, Van Staphorst, and Hubbard.
5. Gouverneur Morris.
10. The banking house of Henry Hope of Amsterdam.
11. Short is referring to the payment due in June, 1793, on the Holland loan of five million guilders. For a description of this loan, see Willink, Van Staphorst, and Hubbard to H, January 25, 1790, note 15.
14. William Carmichael who with Short had been appointed commissioner to treat with Spain.