Sir,
In the close of our conversation on the 11th instant, your Excellency did me the honor to request that I would recapitulate to you in writing, the reasons why my bills had exceeded the funds in possession of Mr Grand, by about three millions and a half of livres. I undertake this task with pleasure, but I will premise, that in the course of this letter (seeking clearness more than precision) I will not trouble you with an attention to fractional sums, but rather to round numbers.
You will remember, Sir, that shortly after your arrival in this country, the Congress, while they continued their drafts for interest, added a number of other bills on Dr Franklin, at a long sight, which they directed to be sold; and urged by their necessities, and relying on the success of measures then just undertaken, they drew other bills at a long sight on their Ministers in Spain and Holland. Before this they had drawn bills on Dr Franklin, in favor of M. de Beaumarchais, for nearly three millions, of which two millions and a half were payable in June, 1782. The amount of all these bills, exclusive of those to M. de Beaumarchais, was between thirteen and fourteen millions. How great a proportion of this sum had been paid, and how much remained due, it was impossible for me to determine with precision, because I had not received the accounts, but the best estimate in my power was made.
Your Excellency will also remember, that from the sketch which you did me the honor to deliver from the Count de Vergennes, there was due on the Dutch loan of 1781 about four millions, or three and a half after deducting the supposed expenses of that loan. I considered this balance as sufficient to liquidate what I estimated to remain due of the several bills drawn by order of Congress as above mentioned, excepting the two millions and a half payable in June last. I perceive, however, from Mr Grand's accounts, that although his Majesty, among other acts of his royal generosity, remitted the expenses of the loan, yet the balance actually touched by the banker, amounted only to about two and a half millions. Thus there was a deficiency of a million in what I had relied upon to acquit former engagements. It is necessary for me to mention here, that I had allowed also for a supposed deduction on account of the Virginia goods, but as I had also supposed, that fewer of the Congress bills remained unpaid than appeared afterwards to have been, so one error eventually corrected the other, and left the deficiency still at a million. It is proper also to observe further, that although the loans and subsidies of 1781, amounting in the whole to twenty millions, had been principally employed in the purchase of clothing and military stores, yet the continuance of those things in Europe by various delays and mischances obliged me to make provision for the same articles here, forming thereby a heavy deduction from the small means which were at my disposal.
Having said thus much of things previous to the year 1782, I must now take the liberty to remind your Excellency, that I had requested the sum of twelve millions for that year, on the principle, that after deducting two millions and a half for M. de Beaumarchais, the remaining nine and a half would be absolutely necessary, and I then did expect much more from the States than has been received. The Court, however, granted only six millions, but I had every reason to suppose, that this sum would be exclusively at my disposition; and therefore in consequence of your Excellency's assurances, and according to your advice, I drew twelve bills of half a million each on Mr Franklin, in favor of Mr Grand, and I appropriated this money to the payment of what bills I should draw on him; excepting a part which I desired him to ship during the last summer, when bills were not saleable, and which I expected here in November, or December; but as it did not arrive, I conjectured as the event has shown, that no shipment was made, and extended my bills accordingly. As to M. de Beaumarchais' bills, I expected that some arrangement might have been taken with relation to them, according to our conversations. For although you declared that you had no instructions on that subject, yet you saw with me that our funds would not bear such a deduction, and the line of conduct which you advised, was precisely that which I pursued, as I shall presently have occasion to mention.
I relied then on the loan of six millions, and on three millions which Mr Adams had obtained in Holland, so long ago as in September last. My appropriation of these sums was as follows. Bills drawn on Mr Grand in 1782 for six millions, being the amount of the loan made by his Majesty; one million negotiated through the Havana; half a million which I directed for payment of interest on the Dutch loan of 1781; and a million and a half drawn for in 1783, at the time I had the honor to speak to your Excellency, formed the amount of three millions in Holland, which by the Acts of Congress were exclusively at my disposition.
It was not, therefore, until the investigation of Mr Grand's accounts, that I was struck with the deficiency above mentioned, and which arose from the difference of one million due on the former transactions more than I had calculated, and two millions and a half to M. de Beaumarchais. The moneys which I supposed to be at my sole disposal were, I found, subject to Dr Franklin's order, and therefore Mr Grand instead of six millions possessed only two and a half towards answering my bills drawn in 1782. I had written to Dr Franklin in the manner agreed between us as to M. de Beaumarchais. But the money was paid before the letter arrived. I should not, however, do that justice to Dr Franklin which I ought, if I did not observe, that I think he was perfectly right in causing those bills to be paid. You will consider, Sir, that they had been drawn in 1779, and negotiated for three years, through different parts of Europe and America, on the public faith and credit of the United States. It is a very moderate calculation to suppose, that a thousand different people were interested in the sum of three and a half millions. Protesting the bills, therefore, would have sent them back again from one person to another, affixing a stigma on our character wherever they went. The necessary consequence would have been, not only a total loss of credit in Europe, but that no person here would have bought my bills. The funds, therefore, which I could command would have been useless, and the difference between not having money and not being able to use it is immaterial.
Having said thus much, Sir, on the reason of the deficiency, I find it proper to add, that the bills drawn in December and November amount to two millions; which being at thirty days' sight will not be payable until February or March next. One million negotiated through the Havana on Cadiz, thence to Paris, &c. will not finally be payable until March and April. And one million drawn the beginning of this month at one hundred days' sight, will not fall due until some time in April and May. On the other hand, any further success of Mr Adams's loan will apply for the payment.
I trust from the whole state of these things your Excellency will see, that nothing has introduced any disorder into these transactions, but the appropriation without my authority of moneys intended to be at my disposition, and that this again has arisen from the utter incapacity of Dr Franklin any otherwise to acquit the demands on him, arising from expenditures made some years before my administration. If I might venture, therefore, to advise, it should be that three and a half or four millions were paid to Mr Grand as an addition to the loan of 1782, and then the sum which the Court may think proper to advance for 1783, being clear of preceding transactions, I will pledge myself that no act of mine shall exceed the limits to be prescribed by your Court.