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.