Republic, in refusing a separate peace, &c. he feared would throw all
Europe into a war, there were so many pretensions against England. I
quote these sayings of foreign Ministers, because you express a desire
to hear them, and because they show all the color of argument in favor
of England that anybody has advanced. All these Ministers allow that
American independence is decided, even the Ministers from Portugal,
within a few days said it to me expressly. It is therefore very
unreasonable in them to grumble at what happens, merely in consequence
of their neutrality.
It is the miserable policy of the Prince of Orange's counsellors, as I
suppose, which has set a few springs in motion here. M. Markow, one of
the Ministers of Russia, and M. St Saphorin, the Minister from
Denmark, are the most openly and busily in favor of England. But if,
instead of endeavoring to excite jealousies and foment prejudices
against the House of Bourbon, or compassion towards England, they
would endeavor to convince her of the necessity of acknowledging
American independence, or to persuade the neutral powers to decide the
point, by setting the example, they would really serve England, and
the general cause of mankind. As it goes at present, their
negotiations serve no cause whatever, that I can conceive of, unless
it be that of the Duke of Brunswick, and, in the end, it will appear
that even he is not served by it.
I have the honor to be, &c.
JOHN ADAMS.
* * * * *
TO ROBERT R. LIVINGSTON.
The Hague, September 23d, 1782.
Sir,
As this is a moment of great expectation, news of the greatest
importance from the East Indies, from the West Indies and North
America, from Gibraltar, from Lord Howe's fleet, and the combined
fleet, being hourly looked for, I took this opportunity to return to
the Spanish Minister a visit, which I owed him.
He told me, that he trembled for the news we should have from
Gibraltar. I asked him if he thought there would be a battle at sea.
He answered, yes. He believed the combined fleet would meet Lord Howe,
and give him battle. I said, in this case it will probably be but a
running fight. His Lordship's object was to protect his convoy and get
into the port, and he would not stop to fight more than should be
unavoidable. D. Llano, however, said, that he believed the fate of
Gibraltar would be decided before Howe could arrive, either the place
taken, or the assault given over. By his advices, the attack was to
begin the 4th or 5th of September. Howe sailed the 12th, and would be
probably twenty days at least on his way, which would leave a space of
twentyseven or twentyeight days for the attack, which would decide it
one way or the other.
I did not think proper to tell him my own apprehensions, and I wish I
may be mistaken, but I have no expectation at all, in my own mind,
that the combined fleet will meet Howe; that there will be any naval
engagement; or that Gibraltar will surrender. They will make a horrid
noise with their artillery against the place; but this noise will not
terrify Elliot, and Gibraltar will remain to the English another year,
and Lord Howe return to England, and all Europe will laugh. England,
however, if she were wise, would say, what is sport to you, is death
to us, who are ruined by these expenses. The earnest zeal of Spain to
obtain that impenetrable rock, what has it not cost the House of
Bourbon this war? And what is the importance of it? A mere point of
honor! a trophy of insolence to England, and of humiliation to Spain!
It is of no utility, unless as an asylum for privateers in time of
war; for it is not to be supposed, that the powers of Europe, now that
the freedom of commerce is so much esteemed, will permit either
England or Spain to make use of this fortress and asylum as an
instrument to exclude any nation from the navigation of the
Mediterranean.
From the _Hotel d'Espagne_, I went to that of France, and the Duc de
la Vauguyon informed me that he had a letter from the Count de
Vergennes, informing him that he had received, in an indirect manner,
a set of preliminary propositions, as from the British Ministry, which
they were said to be ready to sign, that he had sent M. de Rayneval to
London, to know with certainty whether those preliminaries came from
proper authority or not.
Thus we see, that two Ministers from England, and another from
Holland, are at Paris to make peace. The Count d'Aranda is said to
have powers to treat on the part of Spain. Mr Franklin and Mr Jay are
present on the part of the United States, and M. Gerard de Rayneval is
at London. Yet, with all this, the British Ministry have never yet
given any proof of their sincerity, nor any authority to any one to
treat with the United States. I believe the British Ministry, even my
Lord Shelburne would give such powers if he dared. But they dare not.
They are afraid of the King, of the old Ministry, and a great party in
the nation, irritated every moment by the refugees, who spare no
pains, and hesitate at no impostures, to revive offensive hostilities
in America. If Gibraltar should be relieved, and their fleets should
arrive from the West Indies and the Baltic, and they should not have
any very bad news from the East Indies, the nation will recover from
its fright, occasioned by the loss of Cornwallis, Minorca, and St
Kitts, and the Ministry will not yet dare to acknowledge American
independence. In this case, Mr Fox and Mr Burke will lay their
foundation of opposition, and the state of the finances will give them
great weight. But the Ministry will find means to provide for another
campaign.
But to return to the Duc de la Vauguyon, who informed me further, that
he had received instructions to propose to the Prince of Orange a new
plan of concert of operations, viz; that the Dutch fleet, or at least
a detachment of it, should now, in the absence of Lord Howe, sail from
the Texel to Brest, and join the French ships there, in a cruise to
intercept the British West India fleet. The Prince does not appear
pleased with the plan. He has not yet accepted it. The Grand
Pensionary appears to approve it, and support it with warmth. There is
now a fine opportunity for the Dutch fleet to strike a blow, either
alone, upon the Baltic fleet, or in conjunction with the French, or
even alone upon the West India fleet. But the main spring of the
machine is broken or unbent. There is neither capacity nor good will
among those that direct the navy.
At dinner, in the course of the day, with M. Gyzelaar, M. Visscher,
and a number of the co-patriots, at the _Hotel_ _de Dort_, they
lamented this incurable misfortune. Some of them told me, that the
sums of money, granted and expended upon their marine, ought to have
produced them a hundred and twenty vessels of war of all sizes;
whereas they have not one quarter of the number. They have no more
than twelve of the line in the Texel, reckoning in the number two
fifties; and they have not more than six or seven in all the docks of
Amsterdam, Zealand, the Meuse and Friesland, which can be ready next
year.
I have the honor to be, &c.
JOHN ADAMS.
* * * * *
A MEMORIAL CONCERNING THE BANK OF AMSTERDAM.[10]
The Bank of Amsterdam is much more simple than the denomination
implies, in general, in the ideas of foreigners.
It differs widely from those of Venice, London, and others, which have
a capital, formed by proprietors (actionaries) to whose profit these
banks operate. That of Amsterdam makes neither commerce nor loan, but
upon real specie, upon their intrinsic value, and upon matters in bars
(ingots) of gold and silver.
This bank was erected in 1609. The magistrates of the city opened the
project of the bank for the convenience of the merchants; but it is
probable it was invented by the merchants themselves, as a remedy for
the difficulty of payments, which became more and more considerable
and embarrassing.
1. Because there was a great deal of foreign money in the city, with
which they made payments reciprocally, amidst eternal disputes,
concerning the value to be given or received.
2. Because, in the great number of coins struck by the States,
diversely altered, and singularly divided, they had not all a constant
circulation, notwithstanding the orders of the sovereign. Some were
declined, even below the fixed value, and others were worth more.
3. The external cashiers, which the merchants employed in those times,
as they do at present to receive the money, which is due to them in
the city, and to pay in their turn what they owe, profited, of the two
inconveniences beforementioned to make to themselves gain, which
augmented the disorder and the vexation of payments, as well as in
writings.
The merchants contrived then to make reciprocal payments, by a simple
transposition of debit from one, to the credit of the other; but to
this end, it was necessary to assure the validity of payments made in
this manner, by a known and real value, and solidly placed under the
authority and warranty of the city. The magistracy lent themselves to
arrangements, which answered to all these conditions, so that a number
of merchants and cashiers deposited at first at their pleasure, a sum
in specie, more or less considerable, which was then designated by the
commissaries of the bank, as ducats, or rix dollars and others, which
money was placed in one of the vaults of the State-House, under the
departments assigned for the carrying on of this bank. Those, who
carried there their money, were credited for it, upon a leaf of the
great book, which was shown to them, and from that time they might
make reciprocal payments, as is practised at this day, without
handling any cash, with this simple formula, viz.
"Gentlemen, the commissioners of the bank; please to pay N. N. five
thousand florins. P. G.
Amsterdam, this ----."
By means of which, the book-keepers had not, and have not still,
anything to do, but to debit P. G. with five thousand florins, and
credit N. N. for the same sum; so that, if they had deposited each one
ten thousand florins in cash, there would remain of it, to the credit
of P. G. only five thousand florins, and N. N. would have fifteen
thousand florins to his, whereof he might dispose, in his turn, the
next day, in favor of one or more others having accounts open in the
bank. This manner of making payments was found so convenient, and they
took such a confidence in it, that all the bankers and merchants, even
down to the petty traders, made haste to open an account, and to carry
there money, more or less, relatively to approaching payments, which
they had to make in bank; so that there was soon a sufficiency of
specie deposited for a foundation of all the payments, which were from
that time designed to be made in bank, viz. all the bills of exchange
of above three hundred florins, drawn by foreigners upon Amsterdam,
and in Amsterdam upon foreigners, all the merchandises of the East
Indies, the wools of Spain, and some other articles.
It happened then, that they ceased to carry thither the monies of
Holland, because the merchants, having occasion alternately, some of
the money in bank for current money, and others, of current money for
money in bank, they found a great facility in selling one for the
other. From thence arose a commerce of agiotage, (_pour l'agio_) which
had been already prepared, because it had been resolved, for good
reasons without doubt, as in case of a flood of specie, &c. that the
bank would not receive the monies, which they would deposit, but at
five per cent below the current value; so that to have one thousand
florins in bank to one's credit, it was necessary to deposit one
thousand and fifty florins in current cash. Behold thus this agio
establishment, and the money of the bank, worth five per cent more
than the current money. This value of five per cent soon varied,
because some one, who found that he had too much money in bank, and
was in want of current, sought to sell the first for the second, found
a purchaser, who would not give him more than four seveneighths per
cent; that is to say, one thousand and fortyeight florins and fifteen
stivers, for one thousand in bank. Thus of the rest in such sort, that
at all times, when one would buy or sell the money in bank, there is
no question but to agree upon the price of the agio, which is subject
to a perpetual variation, and which is more or less high, according to
the wants of epochs; as for example, when the company makes its sales,
the merchants have greater want of money in bank to pay their
purchases, which raises the agio, which falls again, when the company
would sell that, which is come into them for current money, in which
all payments are made for fitting out of vessels.
The payments of bills of exchange, being to be made, as it has been
said, in bank money, the price of all exchanges of current money,
which were heretofore fixed in bank money, for example, a crown
tournois, of sixty sols, the intrinsic value of which, founded upon
the price of the money mark, amounted to fiftyseven sols and
threefourths, current money of Holland, was placed at fiftyfive sols
of bank money; and thus of all the exchanges with all foreign
countries; from whence it results, that having sold merchandises of a
man of Bordeaux, the amount of which produces net one thousand and
fifty florins current, or the credit of one thousand bank, the agio at
one hundred and five, when they make him a remittance, or when he
draws, they purchase so many crowns as are necessary for the one
thousand florins bank, at fiftyfive sols fifteen derniers, which comes
to the same thing as if they bought crowns for one thousand and fifty
florins current, at fiftyseven and threefourths sols current. When any
one would open himself an account in the bank, he goes there himself,
and puts his signature upon a book to make it known, and they give him
the page upon which his account shall be opened, which he ought always
to place at the head of the billet, by which he pays.
They begin with debiting him with ten florins, once for all, after
which he pays no more to the bank, but two sols for each bill that he
writes, with which they debit him twice a year, when they make the
balance of the books, viz. in January and July, at which epochs, each
one is obliged to settle accounts with the bank, and to go and demand
his pay, to see if they accord with the bank, under the penalty, after
six weeks, if they fail or neglect, of paying a fine of twentyfive
florins. The bank is shut at these epochs, and continues shut during
fourteen or fifteen days, during which time, the bills of exchange
sleep, and although they fall due the first day of the shutting, or
any day following, they cannot be protested until the second or third
day after the opening. There are other little shuttings of the bank,
at the feasts, Christmas, Lent, Pentacost; and at the fair, which
continue but a few days. One cannot dispose, till the next day, of the
money, which enters by the bank, except the second days of the
openings, and that of Pentacost. They call these days, the "returns of
bills" (_revirement de parties_) or the "recounting," because they pay
with that which they receive. One ought to take care, not to dispose
beyond one's credit, for not only all the drafts whereof one has
disposed are that day stopped, that is to say they are invalid, but
one is condemned and obliged to pay a fine of triple of the whole,
which one has disposed of more than that which one has in bank.
The person who writes, ought himself to carry his draft to the bank,
or at least his attorney, between eight and eleven o'clock in the
morning; those who come after until three o'clock, pay six sols fine
for each draft. The merchants ordinarily pass a procuration, which it
is necessary to renew once a year, to one of their clerks to carry
their drafts and demand their payments, which no other person can do.
They transfer every day in the week, except Sunday, and during the
shuttings, which are announced some weeks beforehand.
For arranging the merchants, and also for maintaining and favoring the
price of matters, and specie of gold and silver, both foreign and that
of the country, which are in strictness only of mere commerce, as our
ducats and rix dollars, the bank receives them at a value determined
and relative to the weight and the title known by the pay-master of
the bank, but the sum which they there receive ought not to be below
two thousand five hundred florins. The bank gives receipts for the
specie, &c. which they deposit there for six months, which are to the
bearer; so that, within the time, if the specie or matters exceed,
the proprietor may sell his receipt to another, who pays him the
surplus of what they are worth of the price at which the bank has
received them, and this receipt may thus pass through several hands,
as often happens by the idea which they form of the excess or of the
deficiency. He who is the bearer of this receipt, may go and take away
these matters or specie when he will, in paying at the bank, the value
which it has advanced to him who has deposited them, and, moreover,
half of a florin for the keeping of them the six months, both upon
gold and upon bars of silver, and quarter of a florin upon Mexican
dollars, rix dollars, and some other species of money. When this term
is expired, one may cause to be renewed the receipts, in paying at the
bank the half or quarter florin due thus from six months to six
months; but if one let pass that time without taking away his deposit,
or without renewing it, it is devolved to the bank, which keeps it to
its profit.
The bank is governed under the inspection of the Burgomasters, by six
commissaries, chosen and named by the Burgomasters from among the
magistrates and principal merchants, under the care of whom is the
deposited treasure. They furnish every year in the month of February,
a balance of the bank to the Burgomasters, the youngest of whom goes
down with them into the vaults, to verify and take account of the
number of sacks, and of the specie contained in said balance, and
forming the real and effective fund that each one has in the bank; and
whatever may have been said or suspected upon this subject, it is very
certain, that the fund rolling through the bank, is really there
deposited in specie, ingots, and bars of gold and silver. This
treasure is not, moreover, so immense as many people imagine. Some
authors have written, (without doubt by estimation) that it went as
far as three hundred millions of florins, which is not credible, when
we consider the returns of the bills (_revirements de parties_) which
are continually made, between those who have reciprocal payments to
make among themselves. We know very nearly, that there are scarcely
more than two thousand accounts open upon the books of this bank; so
that in order to make three hundred millions of florins, it is
necessary that these two thousand persons should have, one with
another, one hundred and fifty thousand florins each in bank, which is
beyond all probability, especially, if we consider that A and B having
there each one, ten thousand florins, might reciprocally pay
themselves sixty thousand florins per week, and thus make a
circulation of transposition of one hundred and twenty thousand per
week, with twenty thousand of _sign effective_. So that reducing the
year to forty weeks of payment, with regard to the intervals which
take place in the times of the shuttings, which is too large an
allowance, it would result, that with fifty millions, there might be
made twelve thousand millions of florins of payments per annum.
According to this, and considering that the money in bank brings in no
benefit, it is easy to imagine, that there is not much more than is
necessary for the circulation of payments in bank, and that its
treasure cannot be so considerable as many people imagine.
The bank never lends upon any species of merchandise, nor discounts
any paper, nor makes any other profit than the half or quarter of a
florin upon the gold and silver there deposited, and which, added to
the ten florins for the opening of accounts, and two stivers for each
draft of which I have spoken, serves to pay all the expenses of clerks
and others, which is occasioned by the bank. The overplus, which is
not very considerable, goes to the profit of the city.
No arrest or attachment can be made of any moneys which are in bank,
under any pretext; the commissaries, book keepers, and others, who are
in the service of the bank, are bound by oath to say nothing of what
passes there. No man has a right to require of the bank, the
reimbursement in specie of the sum with which he is credited; (_a_)
each one having his account only in the receipts of the commissaries,
which are in the term of six months. It is certain, that the primitive
fund, the receipts for which they have suffered to be extinguished, is
no longer demandable, and that one cannot force the commissioners to
give specie, but it is not, therefore, the less true, that this fund
exists really, and one ought not, and cannot doubt, that if the city
was threatened with an inevitable invasion, and if the merchants
should require their money, to place it elsewhere in safety, that the
Burgomasters would cause it to be paid, by giving so many florins in
current money, or value in bars or ingots, with which one should be
credited.
* * * * *
(_a_) The author is here mistaken. All those who have an account in
bank, may demand to be paid in ready money, but they cannot require
the agio. By consequence, while the bank shall have credit, and there
shall be commerce at Amsterdam, which cannot be carried on without the
money of the bank, and while there shall be, consequently, an agio, no
man will go and demand in ready money, a sum which is worth five per
cent more. The author has not well distinguished between the sum of
money, or rather the specie, which one may redemand in the term of
six months, by means of a receipt, and the money for which one is
credited in bank. Behold the difference.
When they have received at the bank a certain quality of gold or
silver, whether in money or in bars, for the value of which the bank
has credited upon its books the proprietor, (not according to the
value which this money has in commerce, but according to its weight
and denomination,) in this case, the depositor, or he who holds the
receipt, has the right, by means of this receipt, and in restoring to
the bank the sum for which the first depositor had been credited, to
withdraw this gold or silver, paying one half per cent for the
keeping. But, the six months elapsed, the receipt becomes useless, the
gold or silver remains in propriety to the bank, and the depositor
must content himself to have received in its place, the sum which this
gold or silver has been valued at, by which sum he has been credited
upon the books, and whereof he might have disposed as he saw good. It
is this sum that he has the faculty of redemanding in ready money,
when, and as often as he judges proper, and as he is acknowledged upon
the books to be a creditor for that sum; but they are not bound to
restore him more than the net sum without agio.
No man will be, by consequence, mad enough to cause himself to be paid
four or five per cent less than the money of the bank is worth in
commerce. But if the money of the bank should be so discredited, that
there should be no longer an agio, in that case, all the world would
have a right to come and demand at the bank, the amount of the sums
for which they are credited; and the bank, whose credit would be
ruined, would be obliged, without controversy to make this payment,
or to commit bankruptcy. It can never acquire a right of propriety in
the capitals for which it has credit upon its books; but in case of
restitution, it is not obliged to restore the same matters, or the
same money for which it originally gave these credits. Over these the
right is lost, with the expiration of the time established for the
duration of the receipts, but it is held to the restitution of the
amounts of the credits, such as they appear upon the books.
September 26th, 1782.
For the use of Congress, from
JOHN ADAMS.
FOOTNOTE:
[10] From Mr Adams's remarks, at the end of this Memorial, it would
seem to have been furnished him by another hand.
* * * * *
TO M. DE LAFAYETTE.
The Hague, September 29th, 1782.
My Dear General,
I should have written you since the 29th of May, when I wrote you a
letter, that I hope you received, if it had not been reported
sometimes that you were gone, and at other times, that you were upon
the point of going to America.