Mr Jay resumed his animadversions on the paper in question by observing, that it assured him it was necessary, "that Congress should give sure and effective tokens of a good correspondence, proposing reciprocal measures of a compensation, &c. in order that his Majesty might extend his further dispositions towards them." That for his part he could conceive of no higher tokens, which one nation could give to another of friendship and good will, than their commissioning and sending a person for the express purpose of requesting his Majesty to enter into treaties of amity and alliance with them, and that on terms of reciprocity of interest and mutual advantage. To this the Count replied, that to this day he was ignorant of these terms, and that no particular propositions had been made him. Mr Jay then reminded him of his letters from Cadiz, and of the conference on the subject at Aranjues on the 2d day of June last, in the latter of which, after conferring on the subject of aids, and of the treaty, his Excellency had promised to reduce his sentiments on both to writing, and send him notes on each; that as to the first, Mr Jay had received the notes, but not on the last; that he had been in constant expectation of receiving them, and that delicacy forbade pressing his Excellency on that matter, or offering anything further till he should have leisure to complete them.

He said he thought he had given them to Mr Jay or Mr Carmichael, which both of them assured him he had not. Of this the Count appeared after a little time satisfied, when Mr Jay resumed the subject by remarking, that the order of conducting that business appeared to him to be this; that as a right was reserved by the Secret Article to his Majesty to accede to the treaty between France and America whenever he thought proper, and that the latter would go into a discussion of any alteration the King might propose, that should be founded on reciprocity of interest, the first question was whether his Majesty would accede to it as it was, or whether he would propose any and what alterations.

The Count here interrupted Mr Jay by saying, that the interest of France and Spain with respect to America were so distinct, as necessarily to render different treaties necessary. Mr Jay answered, that admitting this to be the case, the treaty with France might be made the basis, and then go on mutatis mutandis. The Count proceeded to say, that it would not conduce to the general pacification to hurry on the treaty; that finding Congress were not disposed to cessions, without which the King would not make a treaty, he thought it best by mutual services and acts of friendship, to continue making way for more condescensions on both sides, and not excite animosities and warmth by discussing points which the King would never yield. That, therefore, Mr Jay might take time to write to Congress on the subject, and obtain their instructions.

He said, that previous to Mr Jay's or M. Gerard's arrival at Madrid, M. Mirales had informed him that Congress would yield the navigation of the Mississippi, but that M. Gerard informed him that Congress had changed their resolution on that subject; that he had mentioned these obstacles to Mr Jay and Mr Carmichael, and it was probable that having done this, he had neglected or forgotten to give Mr Jay the notes in question. Mr Jay here reminded his Excellency, that the conference between them of the 2d day of June last turned among other points on these obstacles, and that they had then mutually expressed hopes that regulations calculated to remove them in a manner satisfactory to both parties might be adopted, and that the conferences respecting them were concluded by his Excellency's promising to give Mr Jay notes of his sentiments on the proposed treaty. The Count admitted this, and made several observations tending to show the importance of this object to Spain, and its determination to adhere to it, saying, with some degree of warmth, that unless Spain could exclude all nations from the Gulf of Mexico, they might as well admit all; that the King would never relinquish it; that the Minister regarded it as the principal object to be obtained by the war, and that obtained, he should be perfectly easy whether or no Spain procured any other cession; that he considered it far more important than the acquisition of Gibraltar, and that if they did not get it, it was a matter of indifference to him whether the English possessed Mobile or not; that he chose always to speak his sentiments plainly and candidly on those occasions, for which reason he generally acted differently from other politicians, in always choosing to commit himself to paper, and appealing to the knowledge of the French Ambassador and others, who had done business with him, for the proofs of this being the principle of his conduct. He concluded by saying he would give his sentiments in writing on this subject to Mr Jay.

Mr Jay made no reply to the Count's remarks on the navigation, but observing, that being little acquainted with the practice of politicians, he was happy in having to treat with a Minister of his Excellency's principles. He added, that there were many points necessary to be adjusted in order to a treaty; that they might proceed to agree upon as many as they could, and with respect to the others, he should state them clearly to Congress, and attend their further instructions.

Mr Jay then again turned the conference to the paper beforementioned, by observing to the Count, that it appeared from it, that the King also expected from Congress equivalents to the supplies formerly afforded, and also the expenses of the war, which it alleged had its origin from them. That as to the first he could only repeat what he had before said, that a general account of them was necessary. That he neither knew the amount of them, nor the terms on which they were granted; that it was a transaction previous to his appointment; that on being furnished with the necessary information, he would transmit it to Congress, and wait their instructions; that an expectation of an equivalent to the expenses sustained by Spain in the war, was inadmissible on every principle. He read the passage in question and remarked, that America could no more be justly chargeable with the expenses of the war sustained by Spain, than Spain could be justly chargeable with the expenses of the war sustained by America. The Count replied, that Mr Jay had mistaken his meaning, and that he urged it merely to show that as the States were deriving considerable advantages from very expensive operations on the part of Spain, that consideration should incline them to more condescension towards the latter.

Mr Jay assured his Excellency that he knew it to be the disposition of Congress to contribute all in their power to the success of the common cause, and that they would on every occasion give proofs of it, and among others, that he was confident they would permit his Majesty to export from thence, during the war, ship timber and masts for the royal navy, and would readily consent to such measures as might be proper and necessary for facilitating it. He further observed that having been informed by M. Gardoqui that his Majesty would like to take and finish a seventyfour gun ship now on the stocks in one of the eastern ports, on which it was said no work was doing, he would with pleasure write to Congress, and propose their transferring her to his Majesty at prime cost. That this previous step was necessary, as Congress might perhaps intend that vessel for particular services, but he was confident they would otherwise be happy in indulging his Majesty's inclinations. The Count appeared pleased with this. He said, that with respect to timber they stood most in need at present of yards, and should be glad to obtain a supply of them from Congress. That as to the ship, he wished to be informed exactly of her present state, and the materials wanted to complete and equip her, which he observed might be sent from the Havana, and whether a crew of Americans could be had to navigate her there. Mr Jay replied, that though he was sure that Congress would readily give their aid in these and other matters interesting to Spain, yet he could not forbear reminding his Excellency as a friend, that public business done under the direction of public bodies was always more expensive than when done by individuals. That, therefore, he would submit it to his consideration whether it would not be more advisable to commit the management of those affairs to the agent, intended to succeed M. Mirales, who, by being on the spot, would have opportunities of acting on exact information, and in a manner more consistent with the views of his Excellency. The Count agreed in this opinion, and promised to communicate to Mr Jay his further intentions on this subject.

Mr Jay informed the Minister, that as his further stay here would now be unnecessary, and business called him to Madrid, he purposed to return there on Monday next. The Count concurred and the conference ended.

Congress will permit me to observe that many things in this conference are important, and demand instructions. I forbear to point them out, because they are obvious; and I take the liberty of giving this hint from a knowledge of the delays attending the proceedings of large bodies.

I returned to Madrid on the day appointed; and whether to accept or not to accept the bills became a very serious question. After reviewing all the reasons for and against it, which are numerous, and which Congress will readily perceive without a particular enumeration, I determined to put a good face on the business, and accept all that should be presented, which I have accordingly done, and am daily doing. What the event will be I cannot pretend to decide. All that I can say is, that my endeavors shall not be wanting to render it successful. The responsibility of the King will not produce much, and the difficulty of borrowing money has been increased, by the number of agents sent to Europe for that purpose by several of the different States, who I am told have imprudently bidden on each other.