Sir,—Mr. Adams having announced to our bankers here his approaching departure from Europe, and referred them to me for counsel on our affairs in their hands, they sent me a state of them, and of the difficulties which were pressing at the moment, and impending more seriously for the month of June. They were urging me by almost every post on this subject. In this situation, information of Mr. Adams' journey of leave to the Hague reached me on the day of his arrival there. I was sensible how important it was to have the benefit of his interference in a department which had been his peculiarly from the beginning, and with all the details of which he was as intimately acquainted as I was little so. I set out therefore in the instant, joined him at the Hague, and he readily concurred with me in the necessity of our coming here to confer with our bankers on the measures which might be proper and practicable. We are now engaged on this subject, and the result, together with a full explanation of the difficulties which commanded our attention, shall be the subject of a letter which I shall do myself the honor of writing you by Mr. Adams, to be forwarded by Colonel Smith, who will go in the English packet. I avoid further particulars in the present letter, because it is to pass through the different post-offices to Paris. It will be forwarded thence by Mr. Short, whom I have desired to do himself the honor of writing to you any occurrences since my departure, which may be worthy of being communicated, by the French packet of this month. I have the honor to be, with sentiments of the most perfect respect and esteem, Sir, your most obedient, and most humble servant.
[TO MR. JAY.]
Amsterdam, March 16, 1788.
Sir,—In a letter of the 13th instant, which I had the honor of addressing you from this place, I mentioned in general terms, the object of my journey hither, and that I should enter into more particular details, by the confidential conveyance which would occur through Mr. Adams and Colonel Smith.
The board of treasury had, in the month of December, informed me and our bankers here, that it would be impossible for them to make any remittances to Europe for the then ensuing year, and that they must, therefore, rely altogether on the progress of the late loan. But this, in the meantime, after being about one-third filled, had ceased to get forward. The bankers who had been referred to me for advice by Mr. Adams, stated those circumstances, and pressed their apprehension for the ensuing month of June, when two hundred and seventy thousand florins would be wanting for interest. In fine, they urged an offer of the holders of the former bonds to take all those remaining on hand, provided they might receive out of them the interest on a part of our domestic debt, of which they had also become the holders. This would have been one hundred and eighty thousand florins. To this proposition I could not presume any authority to listen. Thus pressed between the danger of failure on one hand, and this proposition on the other, I heard of Mr. Adams being gone to the Hague, to take leave. His knowledge of the subject was too valuable to be neglected under the present difficulty, and it was the last moment in which we could be availed of it. I set out immediately, therefore, for the Hague, and we came on to this place together, in order to see what could be done. It was easier to discover, than to remove, the causes which obstructed the progress of the loan. Our affairs here, like those of other nations, are in the hands of particular bankers. These employ particular, and they have their particular circle of money lenders. These money lenders, as I have before mentioned, while placing a part of their money in our foreign loans, had at the same time employed another part in a joint speculation, to the amount of eight hundred and forty thousand dollars, in our domestic debt. A year's interest was becoming due on this, and they wished to avail themselves of our want of money for the foreign interest, to obtain payment of the domestic. Our first object was to convince our bankers, that there was no power on this side the Atlantic which could accede to this proposition, or give it any countenance. They at length, therefore, but with difficulty, receded from this ground, and agreed to enter into conferences with the brokers and lenders, and to use every exertion to clear the loan from the embarrassment in which this speculation had engaged it. What will be the result of these conferences, is not yet known. We have hopes, however, that it is not desperate, because the bankers consented yesterday to pay off the capital of fifty-one thousand florins, which had become due on the first day of January, and which had not yet been paid. We have gone still further. The treasury-board gives no hope of remittances, till the new government can procure them. For that government to be adopted, its legislature assembled, its system of taxation and collection arranged, the money gathered from the people into the treasury, and then remitted to Europe, must extend considerably into the year 1790. To secure our credit then, for the present year only, is but to put off the evil day to the next. What remains of the last loan, when it shall be filled up, will little more than clear us of present demands, as may be seen by the estimate enclosed. We thought it better, therefore, to provide at once for the years 1789 and 1790, also; and thus to place the government at its ease, and her credit in security, during that trying interval. The same estimate will show, that another million of florins will be necessary to effect this. We stated this to our bankers, who concurred in our views, and that to ask the whole sum at once, would be better than to make demands from time to time so small, as that they betray to the money holders the extreme feebleness of our resources. Mr. Adams, therefore, has executed bonds for another million of florins; which, however, are to remain unissued till Congress shall have ratified the measure; so that this transaction is something or nothing, at their pleasure. We suppose its expediency so apparent, as to leave little doubt of its ratification. In this case, much time will have been saved by the execution of the bonds at this moment, and the proposition will be presented under a more favorable appearance, according to the opinion of the bankers. Mr. Adams is under a necessity of setting out to-morrow morning, but I shall stay two or three days longer, to attend to and encourage the efforts of the bankers; though it is yet doubtful whether they will ensure us a safe passage over the month of June. Not having my letters here to turn to, I am unable to say whether the last I wrote mentioned the declaration of the Emperor that he should take part in the war against the Turks. This declaration appeared a little before, or a little after that letter, I do not recollect which. Some little hostilities have taken place between them. The court of Versailles seems to pursue immovably its pacific system, and from every appearance in the country from which I write, we must conclude that its tragedy is wound up. The triumph appears complete, and tranquillity perfectly established. The numbers who have emigrated are differently estimated, from twenty to forty thousand.
A little before I left Paris, I received a piece of intelligence, which should be communicated, leaving you to lay what stress on it, it may seem to deserve. Its authenticity may be surely relied on. At the time of the late pacification, Spain had about fifteen ships of the line nearly ready for sea. The convention for disarming did not extend to her, nor did she disarm. This gave inquietude to the court of London, and they demanded an explanation. One was given, they say, which is perfectly satisfactory. The Russian minister at Versailles, getting knowledge of this, became suspicious on his part. He recollected that Spain, during the late war, had been opposed to the entrance of a Russian fleet into the Mediterranean, and concluded if England was not the object of this armament, Russia might be. It is known that that power means to send a fleet of about twenty-four ships into the Mediterranean this summer. He sent to the Count de Montmorin, and expressed his apprehensions. The Count de Montmorin declared that the object of Spain in that armament, was totally different; that he was not sure she would succeed; but that France and Spain were to be considered as one, and that the former would become guarantee for the latter; that she would make no opposition to the Russian fleet. If neither England nor Russia be the object, the question recurs, who is it for? You know best if our affairs with Spain are in a situation to give jealousy to either of us. I think it very possible that the satisfaction of the court of London may have been pretended, or premature. It is possible, also, that the affairs of Spain in South America, may require them to assume a threatening appearance. I give you the facts, however, and you will judge whether they are objects of attention or of mere curiosity.
I have the honor to be, with sentiments of sincere esteem and respect, Sir, your most obedient, and most humble servant.
P. S. I enclose herewith an extract of a letter from the Count de Vergennes to the French ambassador at the Hague, which will make a remarkable chapter in the history of the late revolution here. It is not public, nor should be made so by us. Probably those who have been the victims of it, will some day publish it.