From Alexander Hamilton
Treasury Department New York Septr 3d 1790
Agreeably to your direction I conversed the day after your departure with the Secretary of State on the subject of an Agent for conducting the Loans to be made abroad. I stated to him, that you had expressed to me a preference of Mr Shorts being employed, if he could be spared the requisite time from France, without injury to the affairs depending there; and that I conceived it wou’d be necessary for him to proceed immediately to Amsterdam and in the first instance to remain there for about three months; after which occasional journeys thither might suffice.
He gave it as his opinion that Mr Short might be spared from France without injury to the public service according to what I had stated to be necessary. Regarding his judgment on that point as conclusive to me, it only remained for me to fulfil your intention and I accordingly requested him to make the proper communication on his part to Mr Short,1 and have since transmitted instructions to that Gentleman in conformity to the general tenor of those which I received from you, a copy of which accompanies this letter.2 If any alterations or additions shou’d appear expedient, I request your commands for the purpose & shall lose no time in executing them.3 I have the honor to remain with the most perfect respect & truest attachment sir Your most Obedient & humble servant
Secretary of the Treasury
For background to this letter, see Hamilton to GW, 26 Aug. 1790 (second letter), and notes.
1. Jefferson’s letter to William Short, 31 Aug. 1790, is in Boyd, Jefferson Papers, description begins Julian P. Boyd et al., eds. The Papers of Thomas Jefferson. 40 vols. to date. Princeton, N.J., 1950—. description ends 17:477–78.
2. Hamilton’s instructions to Short, 1 Sept. 1790, enclosed copies of the acts of 4 and 12 Aug. 1790 concerning the retirement of the United States foreign and domestic debts and the floating of new loans abroad. Hamilton ordered Short to proceed from Paris to Amsterdam for a period of at least three months to investigate the market for United States loans in Holland and to make a judgment of the qualifications and resources of Willink, Van Staphorst & Hubbard, the current United States bankers in Amsterdam. “You are accordingly to borrow on the best terms which shall be found practicable within the limitations prescribed by Law, such sum or sums as shall be sufficient to discharge as well all installments or parts of the principal of the foreign debt, which now are due or shall become payable to the end of the year One thousand seven hundred and ninety one, as all interest and arrears of interest which now are or shall become due in respect to the said debt to the same end of the year One thousand seven hundred and ninety one. But you shall not extend the amount of the loans which you shall make or cause to be made beyond the sum which shall be requisite for that purpose unless it can be done upon terms more advantageous to the United States than those upon which the residue of the said debt shall stand or be.” Short was further instructed not to allow the bankers to accept “unusual or extraordinary premiums, to obtain loans upon a nominal interest of five per Cent as well because it is a pernicious mode of borrowing, as because it would be an evasion of the law, is inadmissible.” Hamilton wrote that Short should “not pass unnoticed the circumstance, that the laws contain actual appropriations of very adequate funds for the payment of interest upon the sums you shall borrow. The first Act, indeed, after reserving six hundred thousand Dollars for the support of Government, gives a priority in payment to the for⟨eign⟩ debt out of revenues which are calculated upon the estimate of a much larger product. You may confidently assert, that the duties hitherto have produced at the rate of One Million eight hundred thousand Dollars; which alone would leave twelve hundred thousand Dollars, as the fund out of which the interest on your loan would be payable. But the augmentations which have been made in the rates are computed to be capable of affording an addition of Eight hundred thousand Dollars; and I believe the computation to be well founded” (DLC: William Short Papers; see also Syrett, Hamilton Papers, description begins Harold C. Syrett et al., eds. The Papers of Alexander Hamilton. 27 vols. New York, 1961–87. description ends 7:6–14).
3. GW replied to Hamilton from Mount Vernon on 18 Sept. 1790: “Your letter dated the 3d inst. enclosing a copy of the instructions you have forwarded to Mr Short, came to my hands by the mail of Wednesday.
“The appointment of that gentleman to negotiate the Loans in Holland, and the Instructions you have given for his government, meet my approbation—The first as no inconvenience it is conceived will result from his absence from Paris, is a measure of œconomy; the latter, are full and cautionary; and under his Agency will, it is to be hoped, be satisfactorily executed” (LB, DLC:GW).