Papers of John Adams, volume 15
dDecember 17831
The relation, in which we have the honour to Stand with your Excellency concerning the American Loan, makes it our Duty to inform your Excellency with the following circumstances2
We received Some time hence a letter from Mr. Morris dated 5th August, by which he advised us that he had determined to value upon us by his drafts till the amount of half a million Florins. We calculated at that time that the ballance we had in hands, with the net Proceeds of the Cargo Tobacco of the Ship Sally,3 would not be Sufficient to pay those drafts; and that in Case we should have no opportunity to Sell one or two hundred Bonds at least, we were exposed to a disbursement of about the amount of that value. 383Notwithstanding this we took the Resolution to honour the mentioned drafts, and determined that we shall advance the difficient money if at the Time of their payment we will not have so much Cash.
We did not hesitate to give Assurances of this in our Answer to Mr. Morris, exposing however at the Same Time the very disagreable Circumstances in the Business of the Loan. This our Letter to Mr. Morris was dated 11 July and we hope he’ll have received the Same Speedily. Our next and following Letters were no less discouraging, because notwithstanding our repeated Endeavours we could not make an Engagement, nor dispose of any quantity of Bonds.
When this happened in Europe, Mr. Morris must at the same Time have been in the best Expectation about the Business, since He advises us by his Letter of the 1st. October that he was informed (tho’ thro’ an indirect Channel) that your Excellency’s Journey to Holland had given a new Spring to the American Credit, and that the Loan was going on well.4 This being the Case He determined to value on us to the amount of half a million more. Which together with the other half million, makes a whole million of Florins, for payment of which we have only in Cash, the net Proceeds of the sold Tobacco included, near f400,000—
We received this advice last Sunday, and assembled in the afternoon to agree with one another, what we should do in those Circumstances?
We were very much mortified about it, apprehending that those drafts might Soon be offered for acceptance, and knowing the very little appearences, or almost impossibility of a better Success in the Loan, within the Time when the Drafts will become due. And we are sorry to inform your Excellency that our apprehensions were but too well founded, since already the next day about two hundred thousand florins were offered.
In this disagreable Position we determined to Send immediately an Express to his Excellency B. Franklin at Paris with a Letter, whereby we informed him of what was going on, and desired that he should inform, wether perhaps Mr. Grand had a Ballance in favour of the United States, and that he should order to keep that Ballance to our disposition. But if there should be no Ballance in the hands of Mr. Grand, or if the Ballance should not be of such a large Sum, then we desired that Mr. Franklin should give his ministerial word to provide us, or to do honour to our drafts till the amount of half a million of Florins, in case we should come in the necessity to make use of such an operation, which will very likely or almost certainly 384be unavoidable. The Express is gone the Same evening, and we take the liberty to Send your Excellency here inclosed a Copy of our Letter to Mr. Franklin, for your perusal.5
We are very Sorry that Mr. Morris gives so much Credit to an indirect advice, the authenticity of which we are ignorant of, because it is certain, that there by he exposes the whole American Credit in Europe. For in Case the answer of Mr. Franklin should not be quite Satisfactory, and that by consequence we should be put in the necessity to decline the acceptance of the drafts, we fear it will cause a great Cry, and give a discredit to America. We hope it will not happen, and that in the meantime your Excellency and Congress will look upon our offer to Mr. Franklin for to honour Mr. Morris’s Drafts upon his promise and Guaranty, and also upon the Expedition of the Express, as proofs of our Zeal and Endeavours to remove every Thing, that might do any mischief to the american Credit.
We have the honour to remain very respectfully / Sir / Your most humble and Obedt. Servts.
s.& Jacob van Staphorst.
P. S. After having written our Letter to your Excellency the greatest part of the holders of Mr. Morris’s drafts, being Jews, whom it doth not Suit to wait for the acceptance of their remittances have determined to make them protested, which we could not prevent. We have given for answer that we had not received the advice, and that we desired that the bills should be offered again for payment when due, which we thought to be the best answer for to preserve the Credit of the drafts as much as we possibly could. The amount of those protested bills is about f170.000—.
We are sorry to observe a Second Time, that Mr. Morris promised not to distribute his drafts till some time after the advice, and that a few days after they come up. The first time was by his letter of 5 Augt. when he had determined to draw two hundred thousand florins or perhaps till five hundred thousand, but he would only dispose of the bills as occasion might require, which must have been soon after, as we observed by the appearence of the Bills. Now by his letter of 1 Oct. the Bills for the amount of the second half Million of that date were lying in his hands to be disposed of during that month and the succeeding or perhaps even in Decr. and by the Nos. of the Bills we presume that allmost the whole Sum must have been disposed of before the 26 of October, which as much as we 385know is the date of the last Letters from Philadelphia. This is very disagreable to us, and it seems but reasonable, that Mr. Morris ought to have waited Some time longer after his advice with the distribution of his drafts, by whose means it might have been possible to make some arrangement here in Europe, and to prevent the misfortune at which he has now exposed his drafts. We have again the honour to remain / Sir / Your most obedt. Servts.
s.& Jacob van Staphorst.
RC and enclosure (Adams Papers); internal address: “to His Excellency John Adams Esqr. London.”
JA’s 5 Dec. letter to Benjamin Franklin, below, indicates that JA received this letter from the consortium on the 5th. He did not respond, however, until 14 Dec., below. The delay was owing to his waiting for Franklin’s reply of 10 Dec., below, but nine days having passed, JA presumably felt compelled to reply without further delay.
Although the consortium’s letter of 16 Oct., above, warned JA of problems with the loan, notably the falloff in subscriptions since July, this is the first letter in which they revealed the full magnitude of the crisis regarding American credit in Europe. The emergency was precipitated by letters of 5 Aug. and 1 Oct. from Robert Morris to the consortium, both of which are accurately summarized in this letter. For both the letters and a detailed examination of Morris’ motives and the circumstances leading to the crisis and ultimately to JA’s hurried journey to the Netherlands to resolve it, see Morris, Papers
, 8:387–397, 564.
The ship Sally reached the Netherlands in the fall of 1783 with a cargo of tobacco consigned to the consortium, which realized f98,278.18 from its sale (same, p. 91, 396). For additional proceeds from the sale of tobacco carried by the Princess Ulrica and the Four Friends, which reached Amsterdam in early 1784, see Matthew Ridley’s letter of 27 Dec. 1783, note 4, below.
The passage from the opening parenthesis to this point is a paraphrase from Morris’ 1 Oct. letter. There, he noted that in issuing the bills of exchange he had “a little exceeded” the sums mentioned in his letters of 5 Aug. and 18 September. “But before this was done I had the Pleasure to learn (tho thro an indirect Channel) that Mr. Adams’s Journey to Holland had given a new Spring to our Credit, and that your Loan was going on well. This being the Case I determined to value on you to the Amount of half a Million more” (Morris, Papers
, 8:393–394, 529–531, 564).
The enclosed letter to Benjamin Franklin, which the consortium accurately summarizes, is undated but was written on Sunday, 30 November. Franklin replied on 3 Dec. that he was “very Sensible of your zeal for Supporting the Credit of the united States, and the difficulties you must be exposed to in accepting all the Drafts of Mr: Morris,” but after consulting with “our Banker Mr: Grand . . . the means of assisting us are not in his hands, as to the proposition of mÿ accepting bills drawn on me at three Months, I do not See the least Probalility of my having more money to Command at that time than I have at present, So that the Expedient would be inëffëctual.” Franklin indicated that Grand planned to write to the bankers himself, which he did, also on the 3d. Grand there indicated that while he sympathized with the consortium’s predicament and would do what he could, Congress’ funds at his disposal were already committed to meet current expenses, and he had none with which to assist the consortium. The consortium enclosed copies of both letters of 3 Dec. with theirs of 23 Dec., below, and they are with that letter in the Adams Papers.