From Edmund Randolph
Philadelphia July 25 1794.
The Secretary of State begs leave to submit to the President of the United States the following observations on the arrangement of the 800,000 dollars, directed to be borrowed for Algerine purposes.1
Mr Lamb was supposed to have offered for the ransom of twenty one American Citizens 59,496 dollars; that is, about 2833 dollars each.2
Mr Simpson is said to have contracted in the Deys own books, under the direction of Messrs Bulkeleys of Lisbon for the ransom of fourteen American Citizens, 34,729 dollars, that is, about 2480 dollars each.3
The instructions to Captain Paul Jones limited the ransom of thirteen American Citizens to 27,000 dollars, something better than 2000 dollars each.4
The Dutch have lately redeemed their captives at 1000 sequins, or about 2000 dollars each.5
Supposing our remaining citizens to be one hundred and twelve, the ransom would be 224,000 dollars.
As to a peace, our objections have been hitherto decided against the payment of a large sum in gross.
Annual payments have been preferred; and the expression to Captain Jones on the part of the President has been, that he would be pleased with 10,000 dollars annually; contented with 15,000; think 20,000 a very hard bargain; but would go as far as 25,000 if it be impossible to get it for less; but not a copper further, this being said to be the then limit of the law—naval stores were positively forbidden to be stipulated for.6
Upon these facts, the Secretary of State has the honor of suggesting.
1. That ransom and peace go hand and hand, if practicable; but that if peace cannot be obtained, a ransom be effected without delay.
2. That the negociator after endeavoring to obtain a ransom at the lowest possible rate, be at liberty to go as far as three or even four thousand dollars per man; it being probable that this heavy expense need not be repeated, if either Portugal continues her enmity to Algiers, or the American frigates should be successful.
3. That the peace may be purchased at any sum not exceeding fifteen thousand dollars per annum, and a douceur of twenty five thousand dollars in hand.
4. That a Consul be immediately dispatched, according to the advice of Colo. Humphreys, if a qualified man can be found, and the Dey will receive him. There is a Mr Gabriels of Norfolk in Virginia, a Dutch merchant, well qualified for such an office.7
Summary of the foregoing sums.
Now taking 300,000. dollars, as the principal at 5 per Cent (the probable rate of the loan) for the 15,000 dollars to be paid annually, and the other 27,000 dollars for contingent charges, the whole sum of 800,000 dollars will be consumed.
5. However, if by any modification of the 800,000 dollars a peace and ransom can be obtained, except by the payment of an excessive sum in hand, it may perhaps be adviseable to permit the negociator to modify accordingly; restricting him notwithstanding to the foregoing sums for a ransom.
LB, DNA: RG 59, Reports of the Secretary of State to the President and Congress.
1. For discussion of the application to Algiers of $800,000 to be borrowed under "An Act making further provision for the expenses attending the intercourse of the United States with foreign nations; and further to continue in force the act intituled ’An act providing the means of intercourse between the United States and foreign nations,’" 20 March 1794 (Stat description begins Richard Peters, ed. The Public Statutes at Large of the United States of America, from the Organization of the Government in 1789, to March 3, 1845 . . .. 8 vols. Boston, 1845-67. description ends . 1:345), see GW to Alexander Hamilton, 29 May (first letter) and 7 June; Hamilton to GW, 4 June (first letter); and Randolph to GW, 19 July (first letter).
2. For discussion of John Lamb’s unsuccessful attempt in 1786 to ransom hostages from Algiers, see Mathew Irwin to GW, 9 July 1789, source note, and Thomas Jefferson to GW, 28 Dec. 1790 (second letter). The dollar amount appears in Jefferson’s report as what the Dey demanded, not what Lamb offered.
3. For James Simpson’s attempt to ransom Algerian captives, see Simpson to GW, 25 Aug. 1790, and notes. Simpson’s "List of American Prisoners at Algiers 9th July 1790 with the sums demanded by the Regency for their ransom," which was enclosed with that letter, reported a total cost of 34,792 28/38 Mexican dollars (Jefferson Papers, 18:436).
4. For the instructions from Secretary of State Thomas Jefferson to John Paul Jones of 1 June 1792, see Jefferson Papers, 24:3-10.
5. According to letters from Richard O’Bryen to David Humphreys of 26 March and 5-12 April, Rear Admiral Pieter Melvill sailed a Dutch fleet into Algiers and negotiated an agreement for a truce and the release of Dutch captives. The terms of the agreement reached on 28 March included a payment of "50,000 Sequins for the ransom of fifty Dutch captives" (DNA: RG 59, Despatches from U.S. Ministers to Portugal). The ensuing treaty, which is dated 1 April, does not include the captive release among its provisions (NL-HaRA: Records of the States General, 12597.278).
6. Randolph is referring to Jefferson’s instructions to Jones of 1 June 1792. For the Senate resolution giving authority for annual payments to Algiers not exceeding $25,000, see Senate Executive Journal, 123.
7. J. T. Gabriels had written Randolph about U.S. relations with the Barbary states on 29 Jan. and met with him at Philadelphia in July to discuss the same subject (Gabriels to Randolph, 29 Jan. and 18 Nov., DNA: RG 59, Consular Despatches, Algiers). Randolph wrote Gabriels on 27 Aug., informing him that GW wished to appoint him consul and asking him to come to Philadelphia for an interview (DNA: RG 59, Domestic Letters). However, after Gabriels did not reply in a timely fashion, the position went to Hans Heissell.