Chapter 10

A plan for a national bank, is at present before the Council. The projector, M. Cabarrus, proposes to form a capital of fifteen millions of dollars, of which he offers to procure six millions; each action to amount to two thousand reals, for which the proprietors receive a certain interest of four per cent, with the profits expected from this establishment; I have seen the plan, but had not permission to copy it, so that I can give but a faint sketch of it. Eight directors are to be chosen the first year, and six annually, by the assembly of the proprietors; two of these directors are to be perpetual, because it is proposed, that they should have the direction of the supplies for the army and navy, with an interest of ten per cent, to the emolument of the bank; these two directors are to be named by the Court, out of four chosen by the proprietors; in other respects the Court to have no influence. If this plan, which was originally a part of the scheme for the circulation of paper here, should succeed, the paper which will be discounted by it, will probably preserve its credit. The Gromios, companies possessed of exclusive privileges, will be annihilated, and much money, now dormant in the coffers of individuals, be called into circulation. The Gromios pay two and a half per cent interest, and the bank four, which difference, joined to the hopes of farther profits, will tempt the money-holders to withdraw their funds from the hands of the first, and place them in the latter. But these companies and their friends, oppose it strongly, as do also the persons employed in supplying the army and navy, with whom, it is said, people in various departments of Government have interested connexions.

The Courts of France and Spain seem determined to continue the war with vigor, and you will see by the King of Great Britain's speech, that he is not disposed to accommodation. The Empress of Russia still continues her endeavors to bring about a peace between England and Holland, to which the British Ministry has lately appeared to listen, although in a haughty manner. I am told the republican party is more exasperated than ever, by their answer to Russia, which is published. But your information will be much more accurate from Mr Adams, than any that I can procure. My correspondents from France write me, that the nation is much elated by the late triumph of the allied arms. This success, and the flourishing state of their commerce, reconcile them to the war, the continuance of which their Ambassador here regards as inevitable.

The resolution of Congress, prohibiting all intercourse between the citizens of America and the subjects of Great Britain, gives a secret satisfaction both in France and this country, and augments the jealousy of others, that the influence of France will exclude at the peace all amicable connexions between the States and Great Britain, at least this is the language of several of the foreign Ministers and their families. The Imperial Ambassador has lately made representations on account of an ordinance rigorously executed of late in the ports, obliging all captains of vessels to make an oath, declaratory of the contents of all packages, &c. &c. on board their vessels. He has endeavored to make this a common cause. The commerce murmurs against this, and other regulations lately enforced. It must be confessed, that Spain seems desirous to discourage all commerce carried on by foreigners, and bears as hard on their allies as on neutral nations. Whenever a peace takes place, France will be constrained to make a new convention on this subject. At present, this Court feels its importance, and the cabinet of Versailles has points of a nature so much more interesting to carry, that it takes little notice of the breach of conventions actually subsisting. By a late ordinance of the Minister of Finance, a duty of twentyfive per cent was imposed upon all produce brought in American vessels from the Havana. Mr Jay has made representations on this subject, which, I hope, will be attended to. M. Galvez appeared well disposed to withdraw them. It appears also to be the intention of the present Minister, to diminish the consumption of salt fish, to pave the way, as their friends give out, for its total exclusion at the peace, unless cured and imported by the natives; for this purpose, they have obtained bills of indulgence from the Pope, permitting the use of meat during Lent, and on other days on which it was prohibited. The price of these indulgences is proportioned to the rank of the purchaser. It is calculated, that the sale of them in the Spanish dominions will produce two millions of dollars annually; so that a double advantage is derived from this operation, the extraction of money for fish is prevented, and the revenue considerably augmented.

The present Ministry seem firmly established in their respective posts. The Count de Florida Blanca's health does not permit him to give constant application to business, but is not of so dangerous a nature as to cause any apprehension. The Ministers of the Indies and Marine keep their ground in the King's favor, although they have many enemies. If the disturbances in America should increase, the credit of the first may be weakened. The latter, although disliked by his colleagues and disapproved by France, preserves the Sovereign's good graces. He has one merit, which is his constant attention to the safety of the Spanish fleet, a merit that may fix him in his place, but which renders him odious to the nation and its allies, who wish to see it more actively employed.

I am afraid these particulars may appear trivial to Congress, to whom I should be happy to make more important communications; these are not to be obtained but by the dint of money, or by a long residence and intimacy with persons in the various departments of government. The first we have not for the most pressing exigencies, and the latter, our at present doubtful situation at this Court precludes us from in some degree; although neither attentions nor endeavors have been omitted to make useful acquaintances.

I have the honor to be, &c.

WILLIAM CARMICHAEL.

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TO ROBERT R. LIVINGSTON.

Madrid, December 24th, 1781.

Sir,

Yesterday Mr Jay had an audience of his Excellency, the Count de Florida Blanca, in which that Minister in the most express terms assured him, he might depend on receiving three millions of reals to pay such bills as he had already accepted, this sum, with near eighteen thousand dollars received already, and twentyfive thousand promised by the Court of France, will fully answer this purpose, and I still hope ways and means will be found to furnish funds for the bills, which have not yet been presented, and which, for some weeks, come to hand slowly. The Minister also promised his good offices with the Court of Portugal, and informed Mr Jay, that previous to his application, he had endeavored to induce the Ministry of that nation to conduct itself with respect to the States, in a manner more agreeable to the rights of humanity and the law of nations founded on those rights, but that the party in favor of Great Britain preponderated hitherto.

I have had opportunities of speaking several times on this subject to the Secretary of the Embassy of Portugal here, and once to the Ambassador. Each seemed sensible of the injustice of the first step of the Court, and owned it more easy to do an injury than to repair it. If the Congress should be in a situation to make strong representations to that Court, with a recapitulation of the conduct of the States during the whole war in respect to Portugal, they may be possibly attended with success, particularly if they should accede to the armed neutrality, to which they are strongly pressed by Russia at present. The Minister also engaged to do justice to certain Americans who carried a British privateer to the Canaries, and, in short, seemed exceedingly well disposed to render the States every service in his power. I cannot forbear, however, mentioning to the Committee, that he spoke with much chagrin of the adherence of Congress to points, which, in his opinion, rendered a treaty impracticable for the present, and although pressed on that subject by Mr Jay, I doubt whether he will give his sentiments thereon in writing. He also seemed exceedingly apprehensive of the efficacy of the means employed by Sir H. Clinton, to sow jealousy and discord among the States, and even in Congress, and said that the letters lately received by the British Court from the officer abovementioned, gave great hopes of success in this particular. In fine, he assured Mr Jay, that considerable sums of money would be employed for this purpose, and as I am convinced this Court received its information from a person equally employed by that of London, I fear it will be difficult to remove these suspicions until time shows how ill founded they are.

In the meantime, unanimity and force in America are the best arms of the States there, and their best arguments in Europe. To which, if much complaisance to the Spanish King and nation is added, even in objects not essential, the Congress will enable their servants to defeat the designs of the British emissary and their party here, so long as the present King lives. According to present appearances, the war is likely to continue. Although I have already written you particularly on the subject, I now repeat, that the Court is in the way of negotiating its loans for the expenses of the ensuing year, and that it expects some treasure from America. At Cadiz, they have twentynine sail of the line ready for sea. The blockade of Gibraltar is continued with tolerable success hitherto. The Count d'Estaing was not arrived in France by the last advices. This delay will retard the operations intended for our succor.

The death of the Empress Queen will probably kindle the flame of war in Europe, though perhaps not in the ensuing year. I am told from good authority the Emperor is favorably disposed to England. His Ambassador and Mr Cumberland are very intimate, and see each other every day. The residence here of the latter is extraordinary in the present situation of the two nations, and can only be accounted for on the principles, which I had the honor to mention in former letters. If I may be allowed to conjecture, I think Holland will be sooner or later involved in the war, and that orders have already been given by the Court of England to attack their possessions in the East Indies. This however is but a conjecture, although grounded on some share of political evidence.

The British Parliament is prorogued to the 23d of January. Their grand fleet is at sea. Mr Trumbull has been arrested in England, and several Americans obliged to fly and abscond, among whom there is one of my correspondents. I have received advice, that several were included in the number to be arrested, whom it was not the intention of Government to seize, in order to give them an opportunity of returning to America with more eclat, to be in a situation of rendering greater services to Great Britain. I hope this advice is without foundation, but having received it, I think it my duty to communicate it, because circumspection can do us no material injury. M. Gardoqui will scarcely take his departure until all negotiations are at an end, and the campaign shall have commenced.

I have the honor to be, &c.

WILLIAM CARMICHAEL.

_P. S._ Sir Joseph Yorke has presented another Memorial to the States, more insolent than the former. The armed neutrality propose to have forty sail of the line next spring in the ports of Holland.

W. C.

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TO ROBERT R. LIVINGSTON.

Madrid, February 18th, 1782.

Sir,

I have just had the pleasure of receiving your letter of the 20th of December, and seize the earliest opportunity of acknowledging the satisfaction I feel in the hope of a more regular correspondence than I have hitherto had with your department. The moment I was informed, indirectly of your appointment, I did myself the honor of addressing you. My first letter was dated the same day you wrote the one above mentioned. On the 24th ultimo, I again solicited your attention, and as I sent quadruplicates of these letters, I think I may venture to refer you to their contents, for accounts of the state of affairs, and the general intelligence at the time of writing them.

I find by your letter, that mine written in the month of September, had not reached Congress. I sent three copies via Bilboa, by the Captains Tracy, Cook, and another, whose name my correspondents omitted to mention to me. I have had the mortification to hear lately, that these vessels were all taken on the coasts of America. The fourth copy was sent from France, so that I still hope it may have escaped the misfortune of the others. Nothing gives me, or can give me, more pleasure, than the idea of contributing to the satisfaction of Congress, while I fill a duty, which a sense of their confidence, and a desire of meriting a continuance of it imposes on me. I am only sorry, that my abilities and opportunities do not correspond with my wishes, to render my communications more useful. I have already requested you in the letters above mentioned, to point out the line of my duty.

I am infinitely obliged to you for what you mention with respect to my apprehension of being sent to Corunna, and having your sanction to direct my conduct in future. I shall implicitly follow Mr Jay's directions, should he even choose to send me as a courier to be the bearer of despatches to the sea-ports. The reason assigned in your letter, joined to others which I had the honor to mention in mine to the Committee, were such as I suggested when I expressed a reluctance to be employed with discretionary powers in this business. I was prepared however to execute Mr Jay's orders, but I believe ulterior reflections, and the advice of the French Ambassador, induced him to relinquish the idea of sending me.

I have no cypher from Mr Morris and have seen none from him. I must therefore again request you to forward me one, under cover to Messrs Barclay and Harrison, with directions to those gentlemen to forward your letters by private hands, and not by the post, for I fear that one you sent to Mr Jay has been intercepted. No delicacy is preserved by this Court on this head. This practice is not confined to us, but extends to the correspondence of all the _corps diplomatique_. It has happened, that in the hurry of resealing letters thus examined, papers belonging to the department, in which they were opened, have been carelessly enclosed by the Secretary, and returned to the Minister by the person to whom the letters were addressed. Without a cypher it will be impossible for me to be so punctual as may be expected, for at present I am obliged to send most of my letters by private hands, or by the French Ambassador's couriers to the sea-ports, which circumstance often retards their arrival in America.

Our situation with respect to money matters is still critical. The drafts which Dr Franklin is obliged to pay are so frequent, that he has not been able to obtain cash to enable Mr Jay to discharge the bills accepted by him here, for which M. Cabarrus, as has been mentioned in former letters, is nearly forty thousand dollars in advance. Happily there are few bills due until the middle of next month, which will give Dr Franklin time to endeavor to save our credit here, and to this Ministry to reflect on the consequence of denying us this small succor. The Count de Florida Blanca has been lately solicited on this subject by the French Ambassador, and without giving hopes of affording the sum demanded, he promised to do what the urgency of their own wants permit him to do for us. In this conversation he appeared dissatisfied, that Congress had taken no notice of the desire he had expressed of obtaining one of the vessels constructing in the Eastern ports, for the United States, and complained, that no returns had been made by the States to the proofs the King had manifested, of his favorable disposition towards them. In fact their own necessities are evident.

In addition to what I have heretofore mentioned on this head, I have lately been informed from good authority, that a person to whom the Crown is indebted twelve millions of reals, in order to obtain payment, has been constrained to propose to purchase the salt belonging to his Majesty, to the amount of twentyfour millions of reals, for the payment of which, after deducting the sum due to him, he is obliged to advance immediately five millions of reals, although he has little hopes of disembarrassing himself shortly, of such an immense quantity of an article, for which there is little demand at present. The Minister, to soften the harshness of his refusal to make further advances, informed the Count de Montmorin, that M. Del Campo's instructions would be ready in a few days, and that Mr Jay might then commence his conferences on the subject of the proposed treaty. If I may be allowed to hazard a conjecture again on this subject, I must repeat what I have often mentioned already, that Spain seems desirous to retard this business until a general treaty takes place. Perhaps it may not be unworthy the attention of Congress, to prepare eventual resolutions should this prove to be the intentions of the Court.

Since commencing this letter, we have the agreeable news of the capitulation of Mahon, in twentyeight days after the trenches were opened. The garrison are prisoners of war, and, including sailors, &c., amount to two thousand six hundred men. Sickness, which reduced their number of effective men to one thousand three hundred, unwholesome provision, fatigue, and despair of succor, are the motives assigned by the Governor, for the surrender of this important place, which has cost Spain two hundred killed, and three hundred wounded. The joy of the Court is excessive. The Count de Florida Blanca has the merit of having planned this expedition. It is said, the fortifications are to be entirely ruined, and the port rendered incapable of receiving large vessels. The officer charged with the despatches, announcing this event, accuses our allies of having shown a backwardness and reluctance to assist in this siege, which has excited much indignation here. The Princess of Asturias said publicly at dinner, that the Spaniards had taken Fort St Philip's in sight of four thousand spectators, (meaning the French troops.) I had this from a foreign Minister who was present. I am persuaded the charge is without foundation, but still it will have a bad effect, and augment a national animosity, which prevails too much already.

It is probable that the siege of Gibraltar will now be pushed with more vigor. It is the King's favorite object, and the Duc de Crillon, I know, is of opinion that it may be taken. His late success will give weight to his opinion. I have been told that the Irish who obtained permission to return to the sea-ports, after being exiled from thence for several months, will again be ordered to quit them. This circumstance induces me to believe, that strong efforts will be made to take Gibraltar. The Spanish fleet has returned to Cadiz, where it will not remain long, the magazines being abundantly provided, and although there is no great number of workmen, or docks, for the repairs of vessels of the line, yet as few of the vessels have suffered in their cruise, these inconveniences will not be felt. The Count de Guichen was ready for sea the 28th ultimo, and only waited for a wind. His fleet consists of ten sail of the line, which has under its convoy fifty sail of transports; five of the first mentioned are destined for Cadiz, to join the Spanish fleet, which will then be superior to any the enemy can assemble in the seas of Europe. Admiral Rodney was still in the Channel the 22d ultimo, and will probably push for the West Indies, without any transports; the convoys for the West and East Indies, and America, not being yet in readiness. It is said that great reinforcements are to be sent to these quarters. Lord George Germain, it is said, will resign, and be succeeded by Mr Ellis.

The Russian and Imperial Ministers, still interpose their good offices to mediate a peace. The neutral Ministers say here, that Lord Stormont, in a late conversation with the first mentioned, declared with heat, that his Sovereign would treat with France on the subject of our independence, when a French army was in possession of the Tower of London, and not before, and that they would negotiate with Spain for the cession of Gibraltar, in exchange for the city of Madrid. I should not commit this extravagance to paper if I had not heard it mentioned by the Count de Montmorin, and other Ministers.

Mr Adams has demanded a categorical answer from the States-General to the proposition made them on behalf of the United States. The Dutch Secretary here informs me, that his letter was well received. The Dutch Minister at this Court has invited me to his house, since the presentation of the above mentioned demand. I have lately had conversation with the Swedish Minister, which I hope will enable me two months hence to give you some information of the disposition of his Court. This Minister is exceedingly well disposed to forward a connexion between Sweden and America, as is the Baron de Ramel, formerly Minister here, now Vice Chancellor of Sweden, to whose good offices I believe I owe the countenance and civilities of its representative here.

The _cedula_ for the bank will appear shortly. I shall take care to forward that, and any other paper that I think worthy your attention. I have sent the Madrid Gazette to Mr Harrison, and have desired him to forward it in future. This gentleman is every way deserving your esteem and notice. He acts at present as Consul for America at Cadiz, and has been very useful there. His good sense and agreeable manners, have acquired the good will of natives and foreigners.

I have the honor to be, &c.

WILLIAM CARMICHAEL.

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TO ROBERT R. LIVINGSTON.

Madrid, February 27th, 1782.

Sir,

I did myself the honor of addressing you the 18th instant, which I enclosed in the first copy of this. My letter of the 18th contained all the intelligence of the state of our affairs in Holland, which had come to my knowledge. My mind now is full of another object, for I have the mortification to inform you, that unless Mr Jay is enabled by Dr Franklin in a few days to pay the drafts he has accepted, he will be obliged to stop payment. I am persuaded the latter has done everything in his power to extricate us from this cruel situation, but he has had so many other bills to answer, and France is itself so pushed for money, that hitherto he has not been able to succeed, nor indeed to pay us regularly our salaries.

This Court has at length consented to pay us the balance of the three millions, promised last year, which amounts to near twentysix thousand dollars, but this money is in some sort appropriated to the repayment of the advances made for two months past, by M. Cabarrus, who, after the conversation he has had with the Minister, is discouraged from making equal advances. Less than twenty thousand pounds sterling would now pay all our debts in this country. I shall not despair until the bills are refused, although after what we have experienced here, I have little ground to hope. The Count de Florida Blanca has engaged to take such measures, as that Mr Jay shall not be personally exposed, which, without the interference of the Court, might be the case, as he is not acknowledged in a public character.