Adams Family Correspondence, volume 9
r.26
th1790
I fear that my receiving your letters so late may be some disadvantage to you. The information I shall now give you perhaps may reach you too late. By the last post I received your favor of the 14th instant and this morning went into town for the one dated the 11th which Harbach brought.1 The newspapers before this time must have informed you concerning some of the business you have written to me upon. The Presidents speech is public from that you may see that a loan of three millions of florins has been completed in Holland. The two Houses of Van Staphorst and Willinck in Amsterdam had of their own accord & without any order borrowed three millions of guilders for the United States some time in the winter of 89 and ninety. But I will copy a paragraph from a letter written your father by the houses dated February 1st 1790 The houses took on themselves to open a loan of three millions at a five pr cent interest in full confidance that our motives would be considered in their true light and not doubting but our loan would be highly approved in the United States2 The President upon consultation has thought proper to ratify that loan upon motives best know to himself. I think that there were eleven millions to be borrowed three only have as 169yet been borrowed as we know. It is not certainly know whether more has been borrowed for Dutch merchants here but from the complection and interests of money lenders in Holland it is not probable There is therefore a large loan to be negotiated and it may be done upon favorable terms in Holland. The 6 per Cents are now selling in Amsterdam at 124 pr Cent as I am informed from those who know. They have been sold at par here but I beleive 18 shillings is now the price generally some thousands have been sold at par upon 90 days credit. No man can lose by bying in the public stocks now The three pr Cents will in my opinion be soon at 10 shillings. The resolution of the Virginia assembly will have no effect.3 The public creditors of Pensylvania have exhibited an arogant remostrance to the Congress and the resolution of the Senate thereupon you will see the tenor whereof is this that it would be hurtful to the Country to make any alteration in the funding system at present4
There is no doubt says Mr Lawrance that the house of Representatives will make ample provision for the remaining part of the public debt and this opinion seems to be general among the well informed. I fear very much that I have not been sufficiently accurate I think you may depend upon the information given here my desire to send by this post has made he hurry more than I could have wished. You will do well to come here this winter. All well—
RC (Adams Papers); endorsed: “Charles— 26. Decr: 1790.”
Neither letter has been found. The carrier of the letter was probably John Harbach (d. 1793), a Boston securities broker (John B. Hench, “Letters of John Fenno and John Ward Fenno, 1779–1800,” Amer. Antiq. Soc., Procs.
, 90:165 [April 1980]).
On 8 Dec., George Washington announced to Congress that the United States had borrowed 3 million florins in Holland. CA paraphrases here lines from Wilhem and Jan Willink's letter to JA of 1 Feb. (Adams Papers). There, the Willinks said that they and Nicolaas and Jacob van Staphorst had borrowed the money without authorization “in order to maintain the Credit of the United States” when it became clear that the United States would otherwise default on payments due on foreign debt. The loan commenced on 1 Feb. and was formally accepted by Congress seven months later (Philadelphia Federal Gazette, 8 Dec.; Hamilton, Papers
, 6:210–218; 14:42, 257).
In November the Va. General Assembly passed a nonbinding resolution decrying the federal Funding Act as “repugnant to the Constitution of the United States” and “subversive of the interest of the people” (Providence United States Chronicle, 2 Dec.).
A committee of Pennsylvania citizens on 21 Aug. 1789 had submitted to Congress a “Memorial of the Public Creditors of Pennsylvania” that urged Congress to repay the federal debt over a long period of time on the theory that a slowly diminishing debt would establish public credit and motivate the states to remain unified. Congress referred the report to Secretary of the Treasury Alexander Hamilton, whose more aggressive plan was adopted by Congress instead. On 23 Dec. 1790 Congress passed a resolution refusing to reconsider the issues raised in the memorial (
First Fed. Cong.
, 5:738–743; 14:510, 515; Charlene Bangs Bickford and Kenneth R. Bowling, Birth of the Nation: The First Federal Congress, 1789–1791, Washington, D.C., 1989, p. 62–64).