The Diplomatic Correspondence of the American Revolution Volume VI Part 36

The Count de Mirabel, the Sardinian Minister, said to me, upon another occasion, "your country, Sir, will be obliged in the vicisitudes of things, to wheel round, and take part with England, and such allies, as she may obtain, in order to form a proper balance in the world." My answer to both was, "these sentiments betray a jealousy of a too sudden growth of the power of the House of Bourbon; but whose fault is it, if it is a fact, (which it does not appear to be as yet) and whose fault will it be, if it should hereafter become a fact? Why do the neutral powers stand still and see it, or imagine they see it, when it is so easy to put a stop to it? They have only to acknowledge American independence, and then, neither the House of Bourbon nor England will have a colorable pretence for continuing the war, from which alone the jealousy can arise."

The Prince de Gallitzin said, not long since, that the conduct of this 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 compa.s.sion 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 a.s.sault 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 s.p.a.ce 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 embarra.s.sing.

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 a.s.sure 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 a.s.signed 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 pa.s.s 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 t.i.tle 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 pa.s.s 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 pa.s.s 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 princ.i.p.al 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 pa.s.ses there. No man has a right to require of the bank, the reimburs.e.m.e.nt 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 rest.i.tution, 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 rest.i.tution 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.