We have received the letter that you did us the honor to send the 31st of last month, but which did not arrive until the 15th.1
In our letter of the 7th, we acknowledged the receipt, from Mr. Whitall, of the book containing 205 promissory notes of the United States of America, each for 1,000 florins current payable on 1 January 1788 and accompanied by 10 of 50 florins for the interest of 5 percent per year payable to the bearer and under your signature, amounting to a capital of 205,000 florins current plus interest.
We will undertake the negotiation of these bills with all the zeal and prudence of which we are capable, taking the necessary precautions to safeguard the credit of the states, and employing in this new offering all the resources that 50 years of experience have given us.
We will conform, in every respect, to the instructions that you have given: stamping both the book and each promissory note with the letter “A,” numbering the blanks on the counterfoils while making sure that they are detached in a scalloped pattern, and filling out the counterfoils that will remain attached to the book as a means of control; without having need for the model that you said you were sending, but which we did not find enclosed in the package.
It is, of course, understood that we are not to place any of these bills against anything but cash-money and that, as they are placed, we shall send you a notice accompanied by a detailed memorandum matching the delivered promissory notes with their counterfoils.
This loan being the first that we have made of this type and in this form, we have no way of knowing beforehand if some proof of authenticity or other formality will be asked of us before having consulted our broker and others employed in these kinds of transactions.52
We will, however, start the proceedings immediately in order to obtain a preference over the offerings opened by several powers of Germany, the North, &c., which make money very scarce.
The allowance which you have granted will enable us to get this advantage, and we shall abide by the conditions that you have prescribed, taking upon ourselves all the expenses such as commission, brokerage, gratuities, postage, remissions of money, and even the payment of the interest-coupons. This we will do at no charge, although we will take out 2 percent on all commissions, to cover the minutiae and petty details, by increasing by one percent the interest, which will represent a 10 percent decrease on the capital. That is, for each 1,000 florins we negotiate, we will remit to you 900 florins free of all charges whatsoever and you will have only to enter the interest at 5 percent, as it comes due, for payment to the bearers, thus eliminating all accounting details other than our receipts and remissions.
It is also understood that we will be paid from the capital of the promissory-notes; the interest on the coupons which will have accrued, we will credit to you.
We hope, gentlemen, that you will approve this arrangement, without which we would be obliged to advance from our own money to pay the gratuities and general expenses, for which we would not be reimbursed until 10 years later, at one tenth per year. This is not practicable, particularly in view of the sum that we hope to raise with your loan.2
We have the honor to be very respectfully, gentlemen, your very humble and very obedient servants
Horneca, Fizeaux & Co.'s proposal to take their service charge of 10 percent off the top, rather than at the rate of onetenth of that amount per year, was refused by the Commissioners in a letter of 2 Oct. (LbC, Adams Papers). There the Commissioners stated that to do so would be to exceed the interest rate of 6 percent to which they were limited and to which they had to adhere.