John Jay’s Conference with Floridablanca Editorial Note
John Jay’s Conference with Floridablanca
Before entering the war, Spain had provided covert aid to the United States for which no comprehensive account has been found. The total amount of it is far from clear. The first grant, a sum of one million livres tournois ($185,200)1 used to purchase and ship military stores to the United States, was supplied in conjunction with French aid in 1776. In December of that year, Charles III authorized more support in the expectation that the Americans would mount an expedition to take the Floridas and deliver them to Spain as a protectorate. Additional aid was forthcoming in 1777 and 1778 as a result of Arthur Lee’s meeting with Diego de Gardoqui and Jerónimo Grimaldi in March 1777. In December 1777, the three American commissioners at Versailles reported that Spain had promised three million livres tournois ($555,600) for 1778, which might be sent to Congress from Havana in specie. Bernardo de Gálvez, governor of Louisiana, furnished Oliver Pollock, representing the United States, with $74,087 on behalf of Spain. Records kept by the firm of Gardoqui and Sons of Bilbao, through which much of the aid was channeled, indicate that, from 1776 through 1778, Spain contributed a total, in money and supplies, of 7,944,906 reales de vellón ($397,200) plus 30,000 army coats, for which no value had been assigned. No further assistance has been documented.2
It was not until 27 April 1780 that Jay learned that Congress, in an act of 23 November 1779, had authorized bills to be drawn on him at six months’ sight to the amount of £100,000 sterling ($444,400 at par), which it expected him to cover with funds raised in Spain.3 These bills would be sold by government officials to individuals in the United States who had obligations to cover in Europe. It was dangerous and costly to ship cash. Bills were easily transportable, could be destroyed if the vessel carrying them was about to be captured, and could be sold to intermediate creditors before they were finally presented for payment in cash. Eventually, they would be acquired by large merchant houses or financiers in France and Spain and then presented to Jay for acceptance—acknowledgment of their validity and agreement to pay them when due. Since the bills would not all sell at the same time and might have passed through different hands, they would not all be presented to Jay for acceptance at the same time, but they would begin to fall due for payment in December 1780. If Jay refused to accept the bills because he had no funds to cover them, he would be forced to protest them and return them to their owners. This would destroy Congress’s credit and make it liable for additional charges, plus interest, when it ultimately reimbursed the original purchasers in the United States, as it was legally bound to do.
Jay informed Floridablanca about the bills on 29 April. After an exchange of correspondence on 4 May, the present meeting was arranged, in the course of which the Spanish minister suggested he might be able to provide up to £40,000 sterling ($177,600) by year’s end and that if in the meantime the bills were presented to Jay, he would engage in the king’s name to pay them. He also told Jay that they should immediately formulate a contract for repayment, which the United States might make in light vessels and naval stores. Carmichael reported that Floridablanca displayed a “great appearance of candor and good faith” and a desire to do “all that is possible to succor us consistent with the actual situation of their finances,” but he expressed doubts that Spain had the means to provide assistance equal to American needs and expectations. He subsequently predicted that negotiations with British emissary Richard Cumberland would both delay and shape Spain’s decision about the level of assistance it would offer.4
Although Jay seems to have initially believed, as he wrote in September 1779 in his circular letter to the states, that the Spanish treasury was “overflowing with wealth,” Spain’s finances were indeed precarious. Shipment of specie on public and private account from Spanish America, Spain’s customary source of funds, was largely suspended during the war. To raise funds to carry out military operations, the Crown approached the Cinco Gremios Mayores, or Five Major Guilds, of Madrid for a loan of 60 million reales de vellón ($3 million), but it could raise no more than half that sum.5 On 7 June, Floridablanca informed Jay that the king could not furnish £100,000 in Europe but would be willing to guarantee payment of that sum in two years. This, he suggested, should satisfy the bill holders and sustain the credit of Congress. He still expected payment in ships not only for the present amount but also for sums Spain had previously provided. And there was a new twist: the ships were to be manned by American seamen and sail under Spanish colors under orders to intercept British East India Company convoys. Jay discreetly noted that bill holders would hardly welcome a plan that deferred payment so long and that every merchant who drew on them or endorsed the bills became responsible for their credit. What merchants really wanted, he said, was money actively employed, not money lying still and collecting less interest than the profits its use would generate. He also found Floridablanca’s proposals for immediate reimbursement problematic: ships cost money that Congress did not have, he noted, and there was little prospect for obtaining American crews. Unaware that prospects for Spanish aid were far bleaker than it had been led to expect, on 16 June, Congress drew bills on Jay for an additional sum of $25,000 at sixty days’ sight and expressed the hope that it would not have to draw more.6
In his letter to the Committee for Foreign Affairs of 28 May, Carmichael had announced the arrival of the first of the bills drawn on Jay, which he had received in a letter from Jonathan Nesbitt of Lorient, who, he said, “very prudently did not negotiate it until he consulted me on the subject.” Francisco Cabarrús, a French financier active in Spain and soon to become the founder of the Bank of Spain, presented Jay with three bills for acceptance on 19 June.7 Jay forwarded them to Floridablanca “without comment.” They amounted only to $333 each, and Floridablanca agreed to pay them but noted that if other bills were presented, he could not cover them without consulting the king. Several days later, Jay sent thanks and took the occasion to remind Floridablanca that he had said on 11 May that he might be able to supply £25,000–40,000 ($111,000–177,600) at year’s end. This amount, Jay speculated, might cover all the bills payable at that time, and in the meantime, resources might have become available to cover those due thereafter. Britain, he suggested, would interpret the fact that Floridablanca had accepted the first bills presented as an indication that Spain was throwing its weight into the struggle and would not leave America without resources to continue the war.
Encouraged by his own logic, on 28 June, Jay informed Floridablanca that the firm of Messrs. Patrick Joyce and Sons of Madrid had presented several more bills amounting to about $11,000. In a second letter of that date, he informed the minister that Congress had passed the act of 18 March 1780, which created a new currency emission that might stabilize American finances and enable the United States to supply Spain with ships in return for loans. In reply, Floridablanca noted that he would have to consult the king and other ministers about accepting the bills and instructed Jay to tell Joyce that there would not be an immediate response. Several days later, he asked Jay when Joyce’s bills would become payable.8
Floridablanca continued to send mixed signals about the prospects for Spanish aid. When he conferred with Jay on the evening of 5 July, he complained that Congress had drawn its bills without consulting Spain in advance. He suggested that it would have been more convenient for the king to have covered the bills at Cádiz, Bilboa, or Amsterdam, and he reminded Jay that Spain was struggling to meet its own expenses for the war. He would, he said, defer further consideration of financial aid to the United States until the arrival of an unnamed English-speaking person, whom he would assign to continue the discussion. Nevertheless, he agreed to cover bills amounting to about $15,000 and, Carmichael said, appeared “to interest himself more than ever in contributing to aid us, repeating, in the strongest manner, his majesty’s favorable intentions.” Several days later, however, Montmorin reported that Spain’s attempt to raise funds in Holland had failed and predicted that another scheme to raise funds, discussed below, was likely to be prejudicial in the long run.9
Held in Madrid by the death of his infant daughter when the court moved to San Ildefonso, Jay informed Floridablanca on 11 August that bills valued at $6,600 had recently been presented to him for acceptance and that he had prevailed on their owners, the Joyces and the Gardoquis of Bilbao, to wait a week for an answer. Floridablanca replied the next day that he was “mortified” not to be able to immediately authorize Jay to accept the bills, and that the as-yet-unidentified “person” he had assigned to deal with Jay (Diego de Gardoqui) had not yet arrived. Recalling that he had been promised that Spain’s “friendship for America should rise with her Distresses,” Jay informed Floridablanca on 17 and 18 August that he was being pressed hard to accept bills and that if any of their owners demanded an immediate answer, he would have to protest them and thereby reduce American credit to “the lowest Ebb.” Jay directed Carmichael to apprise Montmorin about the crisis.10
Floridablanca had reason to be mortified, and Jay’s anxiety was justified, as the arrival of these bills coincided with a severe crisis in Spanish finances. Neither Jay in Madrid nor Carmichael at court fully realized this at the time, although the owners of the bills may well have. On 18 August, Carmichael informed Jay that more bills would soon be presented for payment and suggested that he come to San Ildefonso to avoid the importunities of their owners. On 22 August, he reported to Congress that Floridablanca had allowed Jay to accept bills amounting to $14,000 of the $30,000 presented to him. None of the others, he added, had yet been protested. He then described how greatly Spain’s financial state had deteriorated since the beginning of the war and remarked that “previous to that period they were by no means so flourishing as Congress had reason to suppose.” He noted Floridablanca’s expressed annoyance at Congress for issuing bills without prior approval from Spain and remarked that it would have been easier for Spain to furnish aid from its American possessions than from Europe. Carmichael continued to claim, however, that Spain’s reasons for delaying an answer had more to do with lack of funds than “want of inclination.” Finally, he stated that 7.5 million pesos de vellón ($5,647,000) had been raised, mostly in France, on the loan Spain had just opened.11
Carmichael’s letter also carried the news that on 9 August 1780 the combined French and Spanish fleets under the command of Admiral Luis de Córdova y Córdova had captured British merchant ships valued at £1.5 million ($6,660,000), a victory that somewhat improved French and Spanish finances and damaged those of Britain. Floridablanca had also concluded that Britain would not exchange Gibraltar in return for peace with Spain; he broke off negotiations with Cumberland at the end of August. Convinced that Spain stood to gain nothing by continuing the war, on 20 August, Floridablanca advised the king to explore how to withdraw from it advantageously, with Spain’s reputation intact and without further drain on Spain’s treasury. However, Charles III decided to conduct his campaigns in earnest to achieve his territorial objectives as quickly as possible. This greatly increased the demands on the treasury.12
Jay arrived at San Ildefonso on 25 August to beg Floridablanca for assistance. His letters to Floridablanca were unanswered, and deeply embarrassed, he could do no better than ask the holders of the bills for time. The Spanish minister was not, however, merely toying with him, as he may have suspected. In desperation, Jay pressed Montmorin to intervene, suggesting that if he did not receive an answer, he would bring his mission to an end. He also hinted that he was aware that the person chosen to replace Miralles had arrived. To Jay’s distress, Montmorin appeared evasive and unhelpful.13
After it failed to raise sufficient funds from the Five Major Guilds of Madrid, the Crown looked to Cabarrús to persuade a syndicate of financiers in Spain, France, and Holland to come to its assistance. Cabarrús, acting for the group, agreed to advance Spain at least 9 million pesos de vellón (equivalent to 36 million livres tournois, or about $6,776,000) for four months, for which he would receive a 10 percent commission, to be divided with his backers. His foreign investors would remit funds in bills of exchange on Spain, then after four months redraw on Spain for payment. At the same time, to cover the amount owed the syndicate plus the commission, Spain issued an equivalent sum of 9.9 million pesos de vellón ($7,454,100) in vales reales, a new emission of interest-bearing Treasury bills, each worth 600 pesos de vellón ($452) and made legal tender for all domestic financial obligations valued at no less than that amount. Necker, the French minister of finance, and other foreign lenders in the syndicate objected, however, when they learned that they would be repaid not in specie but in vales, which they expected would depreciate. Necker immediately ordered the French royal treasury to refuse to receive any bills drawn by firms involved in the loan, and Girardot, Haller & Company, the prestigious firm in which Necker was involved, publicly discredited it. The flow of funds to Spain reversed as Spain was forced to remit bills and cash to the amount of 800,000 pesos de vellón ($602,400) to Paris to come to the aid of the participating firms. On 9 September, Carmichael informed Congress that the Spanish loan, which he had believed would enable the court to provide for the bills drawn on Jay, had failed.14 Montmorin reported that Spain was unable to provide financial aid to the United States. The firm of John de Neufville & Son wrote Jay from Amsterdam that Dutch bankers were so alarmed that no firm of any consequence would meddle with the Spanish loan. Carmichael noted that the fiasco had cost Spain over 2 million pesos de vellón ($1,505,900) and “greatly irritated the ministry.”15
Pressed by importunate bill holders, Jay met with Montmorin on 27 August and then with Bernardo del Campo and Gardoqui, identified finally as the long-awaited “person,” on 3 and 4 September. The latter conversations reprised topics Jay had previously discussed with Floridablanca: the bills that Congress had drawn without previously applying; Spain’s financial distress; the need for repayment in the form of ships; and a pointed demand for concessions with regard to navigation of the Mississippi River in return for a loan, a demand Jay firmly refused on the grounds that the Mississippi was worth far more to the United States than £100,000 ($444,444).16
On 13 September, Gardoqui informed Jay that Spain would not be able to permit him to accept any more bills. The next day Jay asked Floridablanca to tell him frankly what, if any, further aid the United States could expect. In an initially unsigned letter of 15 September dictated by Floridablanca to Gardoqui, Jay was told that the king still wished to aid the United States but found it impossible to raise money in Europe and expected none from America. After reiterated demands for recompense in the form of ships or concessions regarding the Mississippi, the letter informed Jay that if he could raise up to $150,000, the king would guarantee repayment within three years. Realizing that he could not raise funds from private lenders in France and Holland under so unattractive a guarantee, in a curt letter of 16 September, Jay advised Congress to draw no further bills on him, and on 22 September, he pleaded with Franklin and Vergennes for help in covering $50,000 in bills he had promised to accept but could not cover.17
Floridablanca was finally available to confer with Jay on 23 September. The meeting began on a relatively positive note. Floridablanca acknowledged that supplies of flour for Spanish armed forces had reached Havana from the United States and that Congress had promised to send a detachment of troops to South Carolina in support of Bernardo de Gálvez’s campaign to take Pensacola from the British. He then informed Jay that the king had firmly rejected British attempts to persuade Spain to conclude a separate peace. He promised a shipment of clothing for the American army, offered apologies for his inability to provide the funds he had promised in the conference of 11 May, and agreed to advise Jay as to how the king would evince responsibility for sums Jay might borrow on the loan guarantee for $150,000. A wide-ranging discussion of diplomatic issues pending between the two followed, and there the conference ended. Jay was left on his own to raise funds wherever he could, but he was well aware that the guarantee would not help.18
Franklin was able to meet Jay’s immediate need for funds with $25,000 Vergennes had recently made available to him, but the total required, as Jay informed him in a letter of 30 October, far exceeded that amount, as bills amounting to $100,000 had arrived. Spain’s financial difficulties led Cabarrús to propose extraordinary means to raise funds, means that required finding specie to back the vales. Floridablanca seems to have believed he would succeed, for he informed Jay, on 8 November, that he would make funds available to him from a loan currently being negotiated. A month later, Cabarrús had still not finalized his arrangements, and Jay was concerned he would be unable to cover the $150,000 in bills already presented and accepted. Additional bills continued to arrive. In the course of a meeting on 23 December 1780 about which Jay provided few details, Floridablanca committed himself to cover bills due each month to a total of $150,000, an amount that almost covered the bills presented to date for payment. As Jay would discover, however, the commitment was fragile and subject to manipulation, and the funds were not readily forthcoming.19
1. For the monetary figures here and below, the following explanations may be useful. For convenience, money sums are reduced herein to their rough equivalent in dollars. In the instances of the four major currencies discussed, such calculations are made at the par values of exchange, rather than at the variable commercial exchange rates, except when the document itself reports such values. To avoid an unwarranted appearance of precision, the results of most such editorial calculations are rounded to the nearest hundred.
One Spanish silver peso was, by definition, the equivalent of eight silver reales and was thus called a peso de ocho reales. It was commonly known in America as the silver dollar and was about to be adopted by the United States as the monetary unit for its own national currency (6 July 1785, reconfirmed by the U.S. government in 1792). The full-weight dollar coin minted in the Latin American colonies, especially Mexico, was also sometimes referred to as a peso duro, peso fuerte, piastre forte, or peso de plata mexicana. The dollar, or peso de ocho reales, retained a high standard of fineness and weight and was the foreign coin most widely circulated within the United States. The accounts of the Continental Congress (but not of the individual states) were calculated in dollars, as were the accounts of the Bank of North America when it was established in 1781. However, Continental currency, although denominated in dollars, depreciated against the silver dollar and thus did not retain its original dollar value. Therefore, the total amount for which Congress decided to draw was calculated in pounds sterling, but the bills drawn on Spain were calculated in silver dollars, those drawn on France in livres tournois, and those on the Netherlands in guilders. The par value of a pound sterling was the equivalent in decimal terms of $4.44, so that the bills drawn on JJ for $225, $333, and $444 approximated £50, £75, and £100.
The silver dollar, or peso de ocho reales, coin was equivalent at par to 4 shillings, 6 pence (or 54 pence) sterling, the money of Great Britain; 5 livres, 8 sols tournois, the money of France; and 2.5 gulden/ guilders/ florins, the money of the Netherlands. However, in Spain, accounts were kept and business was transacted in terms of vellón maravedis. The vellón, originally a copper coin, became the official Spanish money of account in the eighteenth century. One real de vellón contained 34 maravedis de vellón, and a peso de vellón (sometimes called a dollar sençilla or current dollar) contained 15 reales, 2 maravedis de vellón (or 512 maravedis de vellón), or, in decimal terms, 15.0588 reales. The silver dollar or peso de ocho reales, on the other hand, was worth 20 reales de vellón (or 680 maravedis de vellón). Thus, one silver real, the coin, was worth 12.5 cents and was the equivalent of 2.5 reales de vellón, and one real de vellón was equivalent to 5 cents. In the United States the silver real became popularly known as the “bit”; two reales were “two bits,” equivalent to the U.S. quarter of a dollar. After 1772, by Spanish law, many contracts had to be expressed in reales de vellón; the Spanish loans discussed below are generally calculated in pesos and reales de vellón. However, the American bills of exchange drawn on JJ were denominated in dollars, or pesos de ocho reales, which were worth nearly 25 percent more than pesos de vellón. For purposes of comparison, the vellón, like the other monetary figures mentioned, is converted into dollar equivalencies (given in parentheses), calculated at the par value. See Earl J. Hamilton, “War and Inflation in Spain, 1780–1800,” Quarterly Journal of Economics 59 (November 1944): 38n5; “Monetary Problems in Spain and Spanish America, 1751–1800,” Journal of Economic History 4, no. 1 (May 1944): 22–23, 23n7; and “The Foundation of the Bank of Spain,” Journal of Political Economy 53, no. 2 (June 1945): 99; Tomás Antonio de Marien y Arróspide, Tratado general de monedas, pesas, medidas y cambios de todas las naciones, reducidos á las que se usan en España (Madrid: Benito Cano, 1789), pt. 1, pp. 2–8; Joseph James and Daniel Moore, A System of Exchange with Almost All Parts of the World. To Which is Added, The India Directory, for Purchasing the Drugs and Spices of the East-Indies, &c. (New York: Joseph James and Daniel Moore, 1800), 25; Statement of the Accounts of the United States of America during the Administration of the Superintendant of Finance [Robert Morris], Commencing with his Appointment, on the 20th Day of February, 1781, and Ending with his Resignation, on the 1st Day of November, 1784 (Philadelphia, Pa.: Robert Aitken, 1785), x (, 9: 698); John J. McCusker, Money and Exchange in Europe and America, 1600–1775 (Chapel Hill, N.C.; 1978), 98–100; and McCusker, How Much Is That in Real Money? A Historical Commodity Price Index for Use as a Deflator of Money Values in the Economy of the United States, 2nd ed. (Worcester, Mass.: American Antiquarian Society, 2001). The editors wish to thank Professor John J. McCusker of Trinity University for assistance on this subject.
2. Spain had matched France’s contribution of one million livres tournois ($185,100) in aid funneled to the Americans through Beaumarchais’s fictitious firm of Roderigue Hortalez and Company. In March 1777, Arthur Lee, who had been denied permission to come to Madrid, met Grimaldi, former minister of state, in Vitoria, Spain, to ask for more Spanish aid. In 1777 Spain funneled a subsidy of 187,500 l.t. through the firm of Gardoqui and Sons and, in 1778, a loan valued at 187,000 l.t., for a total of $69,444. See Miguel Gómez del Campillo, Relaciones diplomáticas entre España y los Estados Unidos según los documentos del Archivo Histórico Nacional (Madrid, 1944), 1: 24; , 325–34; Bemis, Diplomacy of the Am. Revolution, 27–28, 93; , 41; , 2: 226n10; 6: 560–63; 7: 385; 8: 73–74; , 2: 290–91, 292–93, 308, 453; 3: 12–15; , 52–53; Brian N. Morton and Donald C. Spinelli, Beaumarchais and the American Revolution (New York and Oxford, 2003), 57, 73; the editorial note “Congress Appoints John Jay Minister to Spain,” : 709–16; Gouverneur Morris to JJ, 3 Jan. 1780, above; and Buchanan Parker Thomson, Spain, Forgotten Ally of the American Revolution (North Quincy, Mass., 1976), 23–69, which provides translations of correspondence detailing the aid provided by France and Spain in the early years of the Revolution. On the settlement of the Spanish accounts, see JJUP, 2: 682–85.
3. At the same time Congress also drew bills on Henry Laurens in the hope that he would be able to raise a loan in Holland. See the Committee for Foreign Affairs to JJ, 11 Dec. 1779, above.
4. See “Foreigner of Distinction” (editorial note) on p. 2; JJ to Floridablanca, 29 Apr., above; JJ to the Committee for Foreign Affairs, 27 May, LbkCs, DNA: PCC, item 110, 1: 178; JJ Lbk. 1; and CSmH (EJ: 3353); JJ to the President of Congress, 30 Nov. (first letter); and Carmichael to JJ, 18–19 June 1780, both below; and, for JJ’s Circular Letter from Congress to Their Constituents, 13 Sept. 1779, see : 671.
5. Spain’s deficit for 1780 was estimated at 109.5% of its revenues. See Pedro Tedde de Lorca, “Política financiera y política comercial en el reinado de Carlos III,” in Actas del Congreso Internacional sobre “Carlos III y la Ilustración,” vol. 2, Economía y sociedad (Madrid: Ministerio de Cultura, 1989), 152–53. On the state of Spain’s finances, see Earl J. Hamilton, “War and Inflation in Spain, 1780–1800,” Quarterly Journal of Economics 59, no. 1 (November 1944): 37–38, and War and Prices in Spain, 1651–1800, Harvard Economic Studies, vol. 81 (Cambridge, Mass.: Harvard University Press, 1947), 78; 527–51; and Carlos Marichal and Matilde Souto Mantecón, “Silver and Situados: New Spain and the Financing of the Spanish Empire in the Caribbean in the Eighteenth Century,” Hispanic American Historical Review 744, no. 4 (November 1994): 587–613. On the guilds, see Miguel Capella Martínez and Antonio Matilla Tascón, Los Cinco Gremios Mayores de Madrid: Estudio critico-histórico (Madrid: Cámara Oficial de Comercio e Industria, 1957).
6. See Floridablanca to JJ, 7 June; JJ to Floridablanca, 9 June; and the Committee for Foreign Affairs to JJ, 16 June, all below.
7. Jonathan Nesbitt (c. 1730–1802), a partner in the Philadelphia mercantile firm Conyngham & Nesbitt, accompanied Gustavus Conyngham to Europe to purchase military supplies and established a mercantile house at Lorient. , 1: 367; biographical sketch, (digital edition).
On Cabarrús and the creation of the Bank of Spain in 1782, see JJ to the Secretary for Foreign Affairs, 28 Apr. 1782, below, and note 27; and Carmichael to BF, 28 Feb., and to the Committee for Foreign Affairs, 17 Nov. 1781, , 4: 269, 843. On the impact of the war on Spanish finances, see also , 31–34; , 278–79; Renate Pieper, “Imperium und Finanzpolitik im 18, Jahrhundert Spanien und England im Vergleich,” in Dinero y negocios en la historia de América Latina: Veinte ensayos dedicados a Reinhard Liehr / Geld und Geschäft in der Geschichte Lateinamerikas: Zwanzig aufsätze, gewidmet Reinhard Liehr, edited by Nikloaus Böttcher and Bernd Hausberger, Bibliotheca Ibero-Americana, vol. 77 (Frankfurt am Main, Germany: Vervuert; Madrid: Iberoamericana, 2000), 147–68; and Carlos Marichal, Bankruptcy of Empire: Mexican Silver and the Wars between Spain, Britain, and France, 1760–1810, trans. Anthony Tillet and Lorena Murillo, Cambridge Latin American Studies, vol. 91 (Cambridge: Cambridge University Press, 2007). On the war’s impact on Spain’s trade with its American colonies, see John Fisher, “Imperial ‘Free Trade’ and the Hispanic Economy, 1778–1796,” Journal of Latin American Studies 13, no. 1 (May 1981): 26–27.
8. See Carmichael to the Committee for Foreign Affairs, 28 May, , 3: 737–39; and Carmichael to JJ, 18–19 June, and notes; JJ to Floridablanca, 19, 22, and 28 June (two letters); and Floridablanca to JJ, 29 June and 3 and 12 July 1780, all below. JJ informed Congress in a letter of 10 July (below) that he had been allowed to accept Joyce’s bills. , 3: 739.
9. Richard Cumberland gave a similar report on Spain’s finances. See Notes on John Jay’s Conference with Floridablanca, 5 July; JJ to Floridablanca, 11 July; JJ to BF and to JA, both 17 July; and Floridablanca to JJ, 12 July, all below; Montmorin to Vergennes, 20 July 1780, FrPMAE: CP-E, 599: 497v–498r; Cumberland to Hillsborough, 21 July 1780, PRO: SP 94/ 209, 123–30; and , 3: 865. At this same time, bills drawn on Laurens began to be presented for payment, and both JJ and BF were asked to help cover them. See John de Neufville & Son to JJ, 13 July 1780, below.
10. JJ promised the holders that, if he accepted the bills, payment would be computed from the day they were first presented. See JJ to Floridablanca, 11 and 16 Aug., and Floridablanca to JJ, 12 Aug., all below; and JJ to Carmichael, 18 Aug., Dft, NNC (EJ: 7659). Gardoqui, the person who was to discuss finances with JJ, had arrived in early August. See Carmichael to JJ, 12 Aug., below, and 18 Aug., ALS, NNC (EJ: 7545); , 16: 415.
11. See Carmichael to the Committee for Foreign Affairs, , 4: 38–40; and JJ to the President of Congress, 6 Nov. 1780, below.
12. Floridablanca’s notes of a conversation with Charles III on 20 Aug. indicate that he had discussed with the king the lack of progress in achieving Spain’s war objectives. Charles blamed France for the failure of the costly attempt to invade Britain and to deprive Britain of maritime dominance. See Floridablanca, Memorandum of a conversation with Charles III, SpMaAHN: Estado, leg. 4202, exp. 3, doc. 23, p. 55. On Córdova’s victory of 9 Aug. 1780, see Carmichael to JJ, 18 and 20 Aug. 1780, both ALS, NNC (EJ: 7545, 7547); and David Syrett, The Royal Navy in European Waters during the American Revolutionary War (Columbia, S.C., 1998), 136–37, which states that the British convoy, which was being escorted by HMS Ramillies and four other warships, consisted of 63 merchant vessels bound for the East and West Indies, as well as military store ships and transports carrying 3,144 soldiers of a British regiment, all of which, with the exception of the naval vessels and a few merchant ships, were captured off the coast of Portugal, between Cape St. Vincent and the Azores, by 32 Spanish and French ships of the line. For American newspaper reports of the victory and its impact, see, for example, Connecticut Journal, 9 and 23 Nov. 1780, and Gazette Françoise (Newport, R.I.), 30 Nov. 1780. For the French-Spanish offer of captured supplies of clothing from this victory for American military use, see Notes on John Jay’s Conference with Floridablanca, 23 Sept. 1780, below, note 4.
13. See JJ to the President of Congress, 6 Nov., and the documents embedded in it; JJ to Floridablanca, 16, 18, and 25 Aug.; and Notes on John Jay’s Conference with Montmorin, 27 Aug., all below; and JJ to Floridablanca, 17 Aug., AL, SpMaAHN: Estado, leg. 3884, exp. 4, doc. 68 (EJ: 12148); JJ to Carmichael, 17 and 18 Aug., Dfts, NNC (EJ: 7658, 7659); and JJ to Messrs. Casa Mayor (Casamayor), Messrs. Queneau, and John de Neufville & Son, all 27 Aug. 1780, Dfts, NNC (EJ: 8243, 8244, 8598).
14. See Carmichael to the Committee for Foreign Affairs, 9 Sept. 1780, , 4: 51–53, 71, 165; , 16: 415; Earl J. Hamilton, “War and Inflation in Spain, 1780–1800,” Quarterly Journal of Economics 59, no. 1 (November 1944): 38–40; Tedde, “Política financiera y política comercial en el reinado de Carlos III,” 172–99.
For Montmorin’s speculation that Floridablanca’s resentment of Necker’s action explained his refusal to honor previous promises of aid to the United States, see the notes to JJ to Vergennes, 22 Sept., below. On 28 Nov., Carmichael reported that the embarrassment to Spanish finances was severe, and that Spain’s resentment of Necker’s interference had barely been papered over. When Necker resigned as finance minister in May 1781, Carmichael commented that Spain would have welcomed his removal some months before because of his interference in this loan, but he noted that Necker had subsequently endeavored to facilitate loans to Spain so long as repayment was made in specie in America. Necker hoped to use the specie in part to pay French troops there and to advance funds promised to the United States. The intermediary in these operations was Cabarrús, whose profits on these transactions were said to have been substantial. See James A. Lewis, “Las Damas de la Havana, El Precursor, and Francisco de Saavedra: A Note on Spanish Participation in the Battle of Yorktown,” Americas 37, no. 1 (July 1980): 91n23; and , 4: 164–65, 466.
15. See John de Neufville & Son to JJ, 7 Sept., C, NNC (EJ: 7901); LbkCs, enclosed in JJ to the President of Congress, 30 Nov. (first letter), below, DNA: PCC, item 110, 1: 377–80 (EJ: 4157); NNC: JJ Lbk. 1; and CSmH (EJ: 3404); Montmorin to Vergennes, 21 Sept., FrPMAE: CP-E, 601: 516r; Carmichael to the Committee for Foreign Affairs, 9 Sept. 1780, , 4: 51–53; Earl J. Hamilton, “Monetary Problems in Spain and Spanish America, 1751–1800,” Journal of Economic History 4, no. 1 (May 1944): 41–42; , 38–43; Herbert Lüthy, La banque protestante en France, de la révocation de l’Édit de Nantes à la Révolution (2 vols.; Paris, 1961), 2: 624–25n; and , 1: 11–12; 2: 236.
16. See Notes on John Jay’s Conference with Montmorin, 27 Aug.; Account of John Jay’s Conferences with Diego de Gardoqui and Bernardo del Campo, 3–4 Sept.; and Floridablanca to JJ, 3 Sept., all below; JJ to BF, 8 Sept., Dft, NNC (EJ: 7797), and LbkC, DLC: Franklin (EJ: 10299); and JJ to John de Neufville & Son, 4 Oct. 1780, below.
17. See JJ to Floridablanca, 14 Sept.; JJ to the President of Congress, 16 Sept.; JJ to BF and to Vergennes, both 22 Sept.; and Gardoqui to JJ, 15 Sept. 1780, all below. JJ’s efforts to procure French assistance were supported by Montmorin. See JJ to the President of Congress, 6 Nov., below, in which JJ summarizes the entire saga of his attempt to cover the bills.
18. See Notes on John Jay’s Conference with Floridablanca, 23 Sept., below; and Carmichael’s report on it in his letter to the Committee for Foreign Affairs of 25 Sept. 1780, , 4: 71–72.
19. See JJ to BF, 30 Oct.; JJ to the President of Congress, 6 Nov. 1780 and 28 Jan. and 25 Apr. 1781; Notes on John Jay’s Conference with Floridablanca, 8 Nov. 1780; and JJ to Floridablanca, 11 Dec. 1780, all below; “Spain’s Finances and the Bills Drawn on John Jay” (editorial note) on pp. 366–72; and , 4: 99, 166. As of 19 Dec. 1780, Carmichael reported that JJ had “touched” about $18,000 to pay bills he had accepted, and that, with the $25,000 expected from France, would give “respite” until March 1781. See , 4: 198.