1479. CONFEDERATION, Financial Embarrassments under.—
Mr. Adams, while
residing at the Hague, had a general authority
to borrow what sums might be
requisite for ordinary and necessary expenses.
Interest on the public debt, and the maintenance
of the diplomatic establishment in Europe,
had been habitually provided in this
way. He was now elected Vice-President of
the United States, was soon to return to
America, and had referred our bankers to me
for future counsel on our affairs in their
hands. But I had no powers, no instructions,
no means, and no familiarity with the subject.
It had always been exclusively under his
management, except as to occasional and partial
deposits in the hands of Mr. Grand,
banker in Paris, for special and local purposes.
These last had been exhausted for
some time, and I had frequently pressed the
Treasury Board to replenish this particular
deposit, as Mr. Grand now refused to make
further advances. They answered candidly
that no funds could be obtained until the
new government should get into action, and
have time to make its arrangements. Mr.
Adams had received his appointment to the
court of London while engaged at Paris, with
Dr. Franklin and myself, in the negotiations
under our joint commissions. He had repaired
thence to London, without returning to
the Hague to take leave of that government.
He thought it necessary, however, to do so
now, before he should leave Europe, and accordingly
went there. I learned of his departure
from London by a letter from Mrs.
Adams received on the very day on which he
would arrive at the Hague. A consultation
with him, and some provision for the future
was indispensable, while we could yet avail
ourselves of his powers; for when they would
be gone, we should be without resource. I
was daily dunned by a Company who had
formerly made a small loan to the United
States, the principal of which was now become
due; and our bankers in Amsterdam
had notified me that the interest on our general
debt would be expected in June; that if
we failed to pay it, it would be deemed an
act of bankruptcy and would effectually destroy
the credit of the United States and all
future prospect of obtaining money there;
that the loan they had been authorized to
open, of which a third only was filled, had
now ceased to get forward and rendered desperate
that hope of resource. I saw that there
was not a moment to lose, and set out for the
Hague on the second morning after receiving
the information of Mr. Adams's journey.
* * * Mr. Adams concurred with me at once
in opinion that something must be done, and
that we ought to risk ourselves on doing it
without instructions, to save the credit of the
United States. We foresaw that before the
new government could be adopted, assembled,
establish its financial system, get the
money into the Treasury and place it in Europe,
considerable time would elapse; that,
therefore, we had better provide at once for
the years 1788, 1789 and 1790 in order to
place our government at its ease, and our
credit in security, during that trying interval.
We set out * * * for Amsterdam.
I had prepared an estimate showing that:
There would be necessary for the
year '88 |
531.937-10 Florins |
There would be necessary for the
year '89 |
538.540 Florins |
There would be necessary for the
year '90 |
473.540 Florins |
| Total |
1.544.017-10 Florins |
To meet this the bankers had in
hand |
79.268-2-8 florins |
| And the unsold bonds would yield |
542.800 florins |
|
622.068-2-8 florins |
| Leaving a deficit of |
921.949-7-4 florins |
We proposed then to borrow a
million, yielding |
920.000 florins |
Which would leave a small deficiency
of |
1.949-7-4 florins |
Mr. Adams accordingly executed 1000
bonds, for 1000 florins each and deposited
them in the hands of our bankers, with instructions,
however, not to issue them until
Congress should ratify the measure. * * *
I had the satisfaction to reflect that by this
journey our credit was secured, the new government
was placed at ease for two years to
come and that, as well as myself, relieved
from the torment of incessant duns, whose
just complaints could not be silenced by any
means within our power.—
Autobiography. Washington ed. i, 83.
Ford ed., i, 114.
(1821)
