|Sir.||The Hague 6. January 1796|
Very soon after the termination of the correspondence, between the Bankers of the United States at Amsterdam & my brother, relative to the payment of the Antwerp interest, and in consequence of which, those Gentlemen finally consented to accept Mr: DeWolfs drafts upon them for that object, they commenced a fresh correspondence with me, requiring one to supply them with funds or the means of raising them, to face a payment of interest amounting to 270.000 florins, which would become due on behalf of the United States at Amsterdam, on the first of January; observing as inducements to my compliance without delay, that Mr Monroe had received the amount of the Bill on Messrs: Dallarde Swan &Co, that was remitted by the Treasury to face the Antwerp Interest and the other engagements of the United States, but that owing to certain obstacles, thrown in the way of a transportation of the Specie from Paris, there was very little prospect of its speedily reaching them; & further that they had assumed the payment of the Antwerp interest, solely at the very earnest desires of my Brother, who assured them, that he had in his power other means to provide for it, which they presumed were left in my hands, to support the credit of the United States in Holland.
Upon the subject of this demand several letters passed between the Bankers & myself & between Mr. Monroe & me, Copies of which I have the honor to enclose herewith.
From a perusal of them a judgment will be formed, how far the conduct, pursued by me upon the occasion, may be reconciled with propriety, & if in any manner the instructions, which formed the Basis of it, authorized or dictated a different mode of proceedure.
It may not be improper to premise, that the want of precedent in [. . .] instance of this demand from the Bankers at Amsterdam, joined to the novelty of my Official functions as a principal at the time it was made may have magnified the embarrassments produced by it, much above their real dimensions.
The Bill upon Messrs: Dallarde Swan &Co had been paid into the hands of Mr: Monroe, & though difficulties were raised against a transportation of the proceeds, it was very possible, that a seasonable removal of them might be effected.
By your letter of June 24th: to my Brother, the bill upon Paris for one hundred & twenty thousand Dollars; that upon the House of Lubbert & Dumas of Hamburg for the same sum payable at Amsterdam, are expressly mentioned as provisions for the payment of future interest; the latter however to be resorted to, only in case of failure in realizing the first. As a still further provision, the Bankers were authorized to draw on the Treasury for one hundred & twenty thousand Dollars, provided both the bills before mentioned should fail.
Previous to a recurrence therefore to other means, for answering the call of the Bankers, it was necessary to ascertain the absolute inefficacy of all the above provisions. Under this impression I replied to their [. . .] of December 2d: informing them, that the proceeds of the bill on messrs: Dallarde Swan &Co. were considered as being appropriated to the discharge of the ƒ270.000 Interest, which would shortly fall due, and that until the prospect of their receiving the specie from Paris should be desperate, I could not undertake to furnish them with other means. It was also inferible from the manner in which their demand was proposed that if the proceeds of the Bill on Paris had been in their hands, they would not have made it. This idea is accordingly advanced in my letter to Mr: Monroe of the 4th: of December; but the next letter from the Bankers proves it to have been erroneous, as by a statement of their account current with the United States to the first of December, they appear to be under an advance of 427.000. florins after crediting the Bill for 120.000 Dollars, although it was yet to be received.
After this information, I should not have hesitated to employ the resource, which I was instructed by my brother before his departure to make use of, to ensure the payment at Antwerp, in case it had been necessary, by empowering Mr: DeWolf to raise the funds by drafts upon the Treasury, had it not occurred to me, that the difference between the account current furnished on the first of September to the Treasury, and that submitted up to the first of December, might possibly proceed from the arrangements respecting the payment of the One million installment, in which the value of one third of the stocks remitted to face that payment had been assumed by the Bankers. What portion of those stocks had been already realized from the sales in London, and passed to the credit of the United States at Amsterdam, or what was the estimated amount of the whole nett proceeds of those stocks, were circumstances quite unknown to me. It was therefore considered proper to estimate at par, at least for principal, the probable value of them to the Bankers; since it was inferible from the instructions, which accompanied their remittance, that no loss was expected to result from the sales in Europe. In answer to the second letter from the Gentlemen, I took the liberty to state the above particulars, insisting at the same time upon the competency of the remittances hitherto made by the Treasury to effect very nearly a balance of the account current with them, provided they were all realized & credited. But if a balance should exist in favor of the Bankers, fresh supplies from America might shortly be expected to arrive, both to satisfy that object and others of more considerable magnitude.
Upon the strength of these presumptions I repeated, that the money in the hands of Mr: Monroe was still viewed, after a deduction of the Antwerp interest as in part a provision for the then approaching payment and should it reach Amsterdam prior to the first of January, I did not feel myself at liberty to use other means of providing for it. At the same time I informed them of the resource, which was left in my hands to secure the Antwerp payment, and which was ready to be employed for that at Amsterdam in case of real necessity.
Their letter of the 9th: fully convinced me, that my previous calculations had been considerably erroneous. It appeared that the proceeds from the sales of the six per cent stocks, the whole of which were estimated at about 1.150.000 florins, the sum of 1.058.043.—5. was already received & passed to the credit of the United States in the account current; that after the receipt of all the remittances, of which at that time [. . .] Bankers had any notice, from the Treasury Department, they would under an advance of ƒ325.000. The money in the hands of Mr: Monroe therefore could no longer be regarded as provision for the January payment, even should it seasonably reach Amsterdam. Estimating the produce of the 535.000. Dollars Six per cent Stocks at par however, the claim of the Bankers would be reduced to ƒ137.500; but as the loss incurred upon the disposal of those stocks would doubtless be accounted for in their communications with the Treasury Department, it was thought unnecessary to enter into discussion with them upon the subject, especially as it was connected with the arrangements made by those Gentlemen, for discharging the installment of one million florins due last June & the result of which was unknown to me. At all events there was no balance in their hands in favor of the United States; but they consented to assume the January payment provided the ƒ300.000. Specie should previously reach them from Paris, unless I could furnish some other provision to face it.
The resource of drafts on the Treasury negotiable at par they did not think expedient to employ for reasons detailed by them, the validity of which was not in my power to dispute, as I had received similar information with respect to the scarcity of demands for Bills on America from other sources.
The importance of punctuality in the regular discharge of interest, and the anxiety, which the Treasury Department had always testified to effect that object, were circumstances familiar to my mind, and impressed me with a desire no less ardent, that no failure should take place in this instance. The expedient of raising the money by Loan suggested itself, & could perhaps have been warranted, under the general authority given my Brother to interpose, in case of necessity, for the support of American credit here. But the latitude of this authority had been abridged with regard to the Antwerp interest, by the express assurance of my Brother before his departure from this Country, that under the circumstances as they then were, he could not undertake to authorize a new loan. This expedient therefore was never mentioned to the Bankers at Amsterdam, [. . .] the considerations, which restrained its adoption in the first instance were deemed equally applicable to the second.
At this stage of the business the prospect, that the Bankers would be prepared to meet the approaching payment, was confined to the possibility, that the Paris remittance should reach them, or that fresh supplies? from America, should arrive in this interval. The French Government had not then refused the liberty to transport the specie; though [. . .] first part of Mr: Monroe’s demand, which was for an escort to attend it, had been unsuccessful, & he was still pressing an answer upon the other point. The bill upon Messrs. Lubbert & Dumas of Hamburg was repeatedly suggested as a resource, the employment of which was strongly recommended, provided the Paris remittance was likely to be protracted much longer. Why it was not resorted to appears from Mr: Monroe’s letter of the 28th: ulto:, which also contains the final dispositions, that were adopted by necessity respecting the proceeds of the bill of Messrs: Dallarde Swan &Co:. The assurance of the French Minister of Finance, that the Bills of the Government shall be paid here, affords perhaps the greatest probability, that they will be; but the term of three months was the shortest that could be obtained.
On the 24th: ultimo I had the honor to receive the letter from your Department of the 3d: November addressed to my Brother. It came by the Ariel Captain Terris, & gave me the first information of that [. . .] arrival. It may not be improper to remark, that the external cover which enclosed this letter had apparently never been sealed or wafered. This circumstance is only mentioned, because as this packet was forwarded to this place from the Texel by Post, it was at least liable to inspection if any one had been so disposed.
This arrival could not have been more seasonable. In addition to a favorable market for the Cargo with which the Ship is charged, the security afforded thereby for the punctual fulfillment of present & future engagements for the United States, was a source of real satisfaction.
The payment at Amsterdam was immediately advertised in consequence of it, and was doubtless commenced on the day it fell due.
It is presumed that some of the most recent letters of my Brother before his departure from hence, to the Treasury Department, & the communications from the Gentlemen at Amsterdam respecting Mr: Hubbards transactions in London & the payment of the one million installment, have anticipated the reply to several important particulars, upon which information is required by your letter of November 3d:
It is undoubtedly true, that at this time the ordinary avenues of communication with this Country are very much obstructed, but more especially those channels through which remittances from America used to be effected, nor is it easy to fix a term for the duration of this state of things. The change of Government, which is shortly expected to take place here, & from the commencement of which must be dated the real Revolution of public affairs, may be expected to produce many objects of interesting speculation, both as it concerns the external relations of the Country and its possible effect upon the security of private property. The public exigencies are great; they may indeed be said to exceed the means of satisfaction, without a recurrence to impositions much more considerable than such as have hitherto been made upon the wealth of the Nation. With these prospects it is natural to presume, that the desire of placing property out of the reach of such threatened requisitions, must be very general. To those whose property is chiefly of a personal nature, it might be easy to adopt this expedient provided the species of security in which it is invested could be changed without much loss. But for the holders of real estate in this country, the facilities for converting it into productive funds are very few.
The immense sacrifices, which would be necessary to effect that object, are more than sufficient to terrify a people less parsimonious than the Dutch. They balance the project of selling their Estates at this month and the estimated loss to be incurred, with the chance of future demands on the part of the Government; the evil that is farthest removed seems most supportable & fixes the resolution for preserving their property, in the hope of a more advantageous season to dispose of it. Few individuals in Holland can boast any great superfluity of wealth at this time; the sources whence it used to flow are either partially or totally obstructed.
It will be seen from the Commercial papers transmitted herewith what are the present prices of Obligations upon the different Loans of the United States. Those which bear an interest of five prCent are at par [. . .] the rest are proportionably respectable. But though the American Credit here may be avered to be upon a more favorable footing than that of any other foreign Nation, their domestic stocks have never had any public circulation, and so long as individual avarice is interested in depriving them the benefit of a general market, it is at least doubtful whether any alteration in the system of suppression can be effected .
With the highest respect & consideration / I have the honor to be, Sir, / Your very humble & obedient sert
Thomas B Adams