From Alexander Hamilton
Treasury Department [Philadelphia] April 14th 1791
I have the honor to send herewith a copy of my letter of the 10th inst: and of that from Mr Short of the 2d of December to which it refers; and also the copy of another letter from Mr Short of the 25th of January.1
The result of my submission to the Vice President and the heads of Departments has been, that they have unanimously advised me to instruct Mr Short to proceed to open a second loan as soon as the first shall be filled, and to extend the sum from two and a half to three millions of Guilders. I nevertheless request your direction concerning the alteration in his instruction, generally which is proposed in my letter.
Finding on recurring to it, your instruction to me competent to the disposition of the sum borrowed; I have directed Mr Short to apply one million and a half of the loan which was to commence in February, as a payment to France. The exchange between France & Holland afforded a benefit of more than ten Cent to the United States on the last payment.
I thought it adviseable to dispose of a principal part of the loan to this object, not only from the general considerations which operate in the case, but from a desire to counteract the success of some Negotiations with the French Court for the purchase of the Debt due from us, which are not for the interests of the United States.2 I have the honor to be with the most perfect respect Sir Your most Obedt & most hble servant
LB, DLC:GW; copy, DNA: RG 233, Third Congress, 1793–1795, Records of Legislative Proceedings, Committee Reports and Papers.
1. William Short’s letter to Alexander Hamilton of 25 Jan. 1791 announced that the terms of the new loan opened by Willink, Van Staphorst & Hubbard, were substantially the same as those of the bankers’ previous loan, except for their commission, which was ½ percent lower. The loan was to be opened in mid- or late February (Syrett, Hamilton Papers, description begins Harold C. Syrett et al., eds. The Papers of Alexander Hamilton. 27 vols. New York, 1961–87. description ends 7:454–56). The contract for the loan—usually referred to as the Holland Loan of March 1791—stipulated that the loan was to run for eleven years at 5 percent interest. Redemption was to begin on 1 Mar. 1802 at the rate of 500,000 guilders per annum due on 1 Mar. of each year until the loan was repaid. The commission and brokerage fees amounted to 4 percent (Bayley, National Loans, description begins Rafael A. Bayley. The National Loans of the United States, from July 4, 1776, to June 30, 1880. 1881. Reprint. New York, 1970. description ends 23).
2. For attempts in Paris to purchase the American debt to France, see Gouverneur Morris to GW, 27 May 1791 (first letter). Before receiving GW’s letter of 7 May acknowledging Hamilton’s of this day, Hamilton wrote to Short on 13 April, authorizing him to open another loan for three million guilders as soon as the current loan was filled and noting that one and a half million of the March 1791 loan “is destined as a payment to France, and you will please to take as early measures as possible to have the million remitted to Paris, the half million will wait for a further direction” (Syrett, Hamilton Papers, description begins Harold C. Syrett et al., eds. The Papers of Alexander Hamilton. 27 vols. New York, 1961–87. description ends 8:280–83).