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Browsing: Papers of John Adams, Volume 11

This note contained in document ADMS-06-11-02-0212
3. Congress charged Laurens to procure additional money and supplies for the war effort. His efforts in this regard had decidedly mixed results visàvis the financial situation of the U.S. in Europe (Wharton, ed., Dipl. Corr. Amer. Rev., 4:317–321, 355–356, 364–366, 382–384, 391–392, 416–417, 467–468, 484–486). The French government had already loaned the U.S. four million livres for 1781 and, responding to appeals by Benjamin Franklin, granted an additional six million livres as a gift. This money was to be used for military supplies, including those Laurens was to procure, and to pay the bills of exchange Congress drew on its ministers abroad. Laurens judged the ten million livres already provided to be insufficient and asked that additional funds be raised in France by a loan guaran• { 296 } teed by the French government. Vergennes thought Laurens' demands excessive, and refused to allow the U.S. to borrow in France where it would interfere with the government's own efforts to finance the war. The two sides finally agreed that France would guarantee a loan of ten million livres (five million florins) to be raised in the Netherlands, but to Laurens' dismay, France refused to advance him the money before the loan was completed. Moreover, the States General did not approve the project until 3 Dec. (from Dumas, 3 Dec., Adams Papers), and the funds became available only in early 1782. Even then the loan yielded less ready cash than anticipated because much of it went to replace the goods lost when the Marquis de Lafayette was taken.
The loan's delay presented Laurens with a major problem because he wished to send its proceeds, in the form of specie, to the U.S. As he indicates in this letter, two million livres were to go in the Résolue, two million in the South Carolina, and an additional five million livres to be obtained from Cuba and Mexico. Spain was to be reimbursed from the money raised in the Netherlands. When Spain refused its assistance and the loan was delayed, Laurens turned to the six million livres that Franklin had obtained. By doing so, however, Laurens precluded Franklin from paying either Congress' bills of exchange or the cost of the supplies Laurens purchased for transport to the U.S. on the South Carolina and other vessels. It is clear from Franklin's letter of 29 April, below, that he did not fully understand what Laurens was doing. When the consequences of Laurens' actions became clear in late June, Franklin wrote to William Jackson on 28 June to inform him that he was stopping the specie that was intended to go by way of the South Carolina. To do otherwise, he wrote, would be to risk “ruining all the credit of the States in Europe, and even in America, by stopping payment” of bills of exchange (Wharton, ed., Dipl. Corr. Amer. Rev., 4:523). See also JA's letter to Franklin of 18 June and Franklin's letter to JA of the 30th, both below.
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, 2016.