505. 1530. 1108. 894. 959. 1107. May 1806
I enclose the rough draft of an article for L[ ]n, which tho’ I have rejected a number of modifications contains in fact eight fourteen distinct modifications or plans to wit.
First. to pay two millions; one M[ ]n twelve mo. after ratification, and residue to claimants under convention.
Second. To pay two millions down: one million twelve months after ratification, and residue to Spain in which case an additional article is provided for paying the claimants in Collonial bills.
Third. To pay two millions down, one residue, to claimants under convention.
Fourth. To pay two millions down one million and residue to Spain with provision of Colonial bills.
5th. 6th. 7th. & 8th. To pay two millions after ratifications &c.
The Modifications. 1st. The two are on the supposition that Spain may be willing to allow a sum to the claimants less, than the whole residue after paying her the two first millions.
I think if left to myself the proposition to take colonial bills for the spoliations instead of deducting the amount of those spoliations from the purchase money would be considered as inadmissible. I hope it may not be resorted to but as an ultimatum, and in case of absolute necessity and you will perceive, that I have omitted altogether the proposition of taking any thing short of colonial Bills, or in other words of paying Spain in full and leaving our merchants to the mercy of a commission, and to the chance of being paid by Spain.
As the subject is complex I shall recapitulate some points relative to the Treasury, to which the negotiation should particularly attend.
1. Payments in Specie must not be stipulated beyond two millions of Dollars, unless it shall be found necessary to accept for spoliations a sum less, than the residue in which case the difference say one million which shall then be payable to Spain may be stipulated to pay in specie but not sooner, than twelve months after the exchange of ratifications.
2. The payments in Specie must exclusively of the million for which credit shall be given in Dollars to open negociations be made in bills of the minister of the United States at Paris and Madrid and at different sights; so that the payments shall not at once fall upon us.
3rd. If the million now provided for in Amsterdam shall not be used immediately, it must not be counted upon for future payments, as we will apply it in a different way long before the exchange of ratifications can take place.
4. For any payments in Amsterdam either of that million or of interest on stock to be created the rate of exchange must be fixed, and not to be more unfavorable to the U. States than par, or one current Guilder of Holland for every forty cents.
5. Any stock to be created must be of the description stated in the article, that is to say, six per cent and the principal at least payable in America, and not redeemable for a longer period, than four years. It would be better that the interest should be payable also in America and the principal redeemable absolutely as well.
6. Payments by the U States for spoliations must be provided in three annual instalments. As the importance of the second point may not be perceived, it is proper to state, that a payment in bills drawn on the Treasury prevents both the inconvenience of making provision for payment abroad, and the exportation of Specie, as in the case of the provision for paying two hundred thousand pounds sterling to G. B. annually: for when bills are given they are negotiated commonly in America thro’ the usual commercial channels, and as remittances, so as to produce no kind of inconvenience. I have the honor to be &c
signed, Albert Gallatin