To Oliver Wolcott, Junior
[New York, August 5, 1796]
The Bank of New York is willing to make the loan of 324 000 Dollars to you (I mean the exact sum of about this amount, if you desire it, which one of the laws you mentioned authorises to borrow)1 on these terms to advance all but two hundred thousand Dollars when you please—to advance the two hundred thousand Dollars, by way of reloan, when that sum, payable in October, becomes due.2 The term of credit to be in each case six months from the time of the advance. The interest six per Cent, with a deposit of Stock (6 Cent) at par so placed as to permit the sale of it at the market price, if there be a failure of reimbursement at the stipulated periods. The Treasury, upon honor, to draw immediately upon the Bank as the money is wanted for expenditure not to transfer it before hand. On this point sincerity and delicacy will be expected.
It was mentioned too as desirable, though not made a condition, that it should be understood that in case a real pressing emergency in the course of the Winter should exist the Bank on giving previous notice of the necessity to the Treasury might be at liberty to sell the stock at the then market price. The Directors to be upon honor not to use this permission but in case of real necessity. Their honor, I know, may be intirely relied upon & it may be well to gratify.
The deposit of Stock was suggested by myself upon your first letter.3 It is an ingredient in the negotiation which the Bank values.
The Bank wishes a speedy decision.4
Oliver Wolcott Junr. Esq
ALS, Connecticut Historical Society, Hartford.
1. H is suggesting that the United States borrow from the Bank of New York in accordance with the provisions of “An Act making further provision for the expenses attending the intercourse of the United States with foreign nations; and to continue in force the act, intituled ‘An act providing the means of intercourse between the United States and foreign nations’” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 487–88 [May 30, 1796]). Section 5 of this act provided that the President “be authorized to borrow … a sum not exceeding three hundred and twenty-four thousand five hundred and thirty-nine dollars and six cents, at an interest not exceeding six per centum per annum, reimbursable at the pleasure of the United States, to be applied to the purposes of this act.…” In actuality the United States borrowed three hundred and twenty thousand dollars under the terms of “An Act making provision for the payment of certain Debts of the United States” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 488–89 [May 31, 1796]). For this act, see H to Wolcott, May 30, 1796, note 1. For the terms of the loan, dated August 16, 1796, negotiated with the Bank of New York under this act, see Rafael A. Bayley, The National Loans of the United States, From July 4, 1776, to June 30, 1880 (Washington, 1882), 40; ASP description begins American State Papers, Documents, Legislative and Executive, of the Congress of the United States (Washington, 1832–1861). description ends , Finance, I, 584, 691.
4. Wolcott wrote at the top of this letter: “recd. & ansd. the 7th.” Wolcott’s answer has not been found.