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Browsing: Papers of John Adams, Volume 8

Docno: ADMS-06-08-02-0001

Author: Adams, John
Recipient: President of Congress
Recipient: Jay, John
Date: 1779-03-01

To the President of the Congress

[salute] Sir

My last Letter to Congress, was on the Twenty seventh of last Month Since which an Account of the new Loan is received from London, and as this may perhaps afford to Congress the clearest Proof, of the Weakness of their Ennemies, it is of importance that it should be transmitted to them.
Some Accounts Say the Loan is to be seven Millions, others Eight.1
The Conditions of the Loan are in general, the established Interest of three Per Cent—an Annuity of Three and Three Quarters Per Cent, for twenty nine Years, and Seven Lottery Ticketts for every Thousand Pounds.
In one Account, the Advantages are thus stated
100 3 per Cent   £   61    
3:15 Annuity for 29 Years at 12 Years purchase     45    
2/5ths of a Years Interest and Annuity gained by both beginning from the 5 Jany, altho the Money is paid Monthly and not ended untill December     2:   14  
3£ Premium of 7 Lottery Tickett for each £1000—gives for each hundred     2:   2  
For each £ 100 paid, there is received     110:   162  
This State for the first Year is pretty accurate—another Account makes it 10 and a Quarter Per Cent for the first Year. The subsequent Years however, it will not be so much. Yet for all the subsequent Years, during the Term of the Annuity, it will be six and three Quarters per Cent. Upon the whole it is generally looked upon, as good as seven and an half Per Cent. In a Country where the highest Interest that is tolerated by the Standing Laws, is five Per Cent, this is a terrible Symptom.
While this System has any Credit, among the Money Lenders in Holland, Switzerland Geneva &c, Congress will perceive, that there is little Hope, of procuring a private Loan for the United States, from { 2 } | view any of those Places. Whether any may be procured from any State or Prince, Time must discover. I confess, I have no very Sanguine Hopes. I have the Honour to be, with great Respect, sir your most obedient humble servant
[signed] John Adams
RC (PCC, No. 84, I, f. 57–58); docketed: “Letter from John Adams Esqr. Passy. March 1. 1779 Read Sept 1.”
1. Lord North settled with the financial men of London on seven million pounds, although he would have preferred eight (Parliamentary Hist., 20:158).
2. JA is saying that for each £100 invested, the investor would receive a certificate nominally worth £100 and paying 3 percent interest on that amount, but which was selling below par and thus had a market value of £61; an annuity for 29 years of £3.15 (3.75 percent), which had a market value of £45 at 12 years purchase (12 × £3.15); £2.14 in annuity and interest paid the first year despite the fact that the subscriber was making monthly payments of principal; and the opportunity to receive 7 lottery tickets per thousand pounds invested, which was worth £2.2 per £100 invested, the prizes redeemable in additional certificates paying additional interest. This would result in the investor receiving a share in the loan with a market value, in the first year, of £110.16, but for which he had paid only £100. Since the initial purchasers usually would be doing so for resale, this would give them a clear profit of £10.16 (10.8 percent).
During the Commons' debate on 24 Feb. the opposition attacked the terms of the loan as unnecessarily expensive. North defended the terms as the best that could be obtained. According to him, the investor would receive:
  £.   s.   d.  
100 £. 3 per cent. consol. val. at 60¼   60   5   0  
3 £. 15 s. annuity for 29 years, at 11 7–16ths years purchase   42   17   9¼  
7 Lottery Tickets to every 1000 subscribed; which will bring a profit to every 100 of   2   2   0  
  105   4   9¼  
(same, 20:157–174; London Chronicle, 23–25 Feb. 1779). By North's analysis the advantages to investors were significantly lower than by JA's, primarily because JA rounded off his figures and North did not include the two-fifths interest and annuity to be paid the first year.

Docno: ADMS-06-08-02-0002

Author: Adams, John
Recipient: Boylston, John
Date: 1779-03-05

To John Boylston

[salute] Dear Sir

I have received your Billet of the 6. Feb. and altho I am much obliged by your Care to put me on my Guard, against dangerous Men: Yet I am extreamly Sorry to find, that Slander has been So successfull, as to impose upon you, who I know have no sinister Motive, nor any Thing to byass you; in this Case from the Truth and the Interest of a Country whose Welfare you wish.
The “Freres” have been abominably belied, and their Characters must be vindicated and assuredly will be.
Your Caution against Persons whose Circumstances expose them to Corruption and Stock Gambling is excellent. It is the execrable Game of the Alley,1 that has done Us Injuries, created Divisions, and propa• { 3 } gated Slanders. I am not however of your opinion that the Independance of our Country, entirely depends, on a Harmony and Unity of sentiment. On the Contrary, if our Ministers, Generals, Admirals and Ambassadors, quarrelled as much as the British, and if such Quarrells should continue in succession these twenty Years, they would not affect in the least degree that Independance.
That Independance stands on a Rock. The Winds may blow, and the Rain descend and it will not fall, for it is built upon a Rock.
There is no Character or Group of Characters in that Country, who have Influence enough to shake it.

They are all but Bubbles on the Sea of Matter borne

They rise, they break and to that Sea return.2

LbC (Adams Papers). This letter appears in Lb/JA/5 and is the last Letterbook copy made by JA during his residence at Passy. The next entry in this Letterbook is his letter to Edmund Jenings dated 22 May at Lorient. It is an unfortunate gap because, as can be seen from references to letters by JA in the recipient's copies printed below, at least thirteen, and probably more, of his letters have not been found.
1. See JA to James Lovell, 20 Feb., note 5 (above).
2. Pope, An Essay on Man, Epistle III, lines 19–20. JA had used the quotation earlier in Thoughts on Government (vol. 4:80, 90).
Cite web page as: Founding Families: Digital Editions of the Papers of the Winthrops and the Adamses, ed.C. James Taylor. Boston: Massachusetts Historical Society, 2018.