last month, as chosen by the Minister to succeed M.
Miralles, had arrived here, and proves to be M. James Gardoqui, and
that since his arrival, our affairs are once more in train. I also
mentioned that the Ministry were negotiating loans, to answer
extraordinary expenses. I expected to have been able to send the
Committee a full account of the nature of these loans, as I founded my
hopes of the Court's paying the bills drawn on Mr Jay, by means of the
supplies obtained in this way. I am therefore very sorry to inform the
Committee, that the success of the most considerable has not answered
the expectations of the Ministers, and what is worse, they impute its
failure to the interference of M. Necker and others, influenced by
that Minister, which has created a soreness, that for the moment must
be disagreeable to our ally, and may be disadvantageous to us, unless
more important considerations obviate the ill effects to be
apprehended from such disappointment, and the personal disgust and
resentment consequent thereof.

A person with whom I am well acquainted, is the projector of the loan
abovementioned, and although for near three months I have known that
such a measure was in agitation, I was not able to discover the plan,
it having been preserved with great secrecy, in order to secure its
successful and complete operation. As this measure is so far important
to Congress, as it may influence the conduct of the Court with
respect to money matters, and affect the credit of the nation in
future, on which all the vigor of military operations in a great
measure depends, I will endeavor to give the outlines of the money
negotiation to the Committee, and will forward the plan and the King's
ordinance thereon as soon as I receive them.

The original design of this loan was to procure nine millions of
dollars, or thirtysix millions of livres in four months, and possibly
to enlarge the sum according to exigencies. The projector was to
receive ten per cent for expenses and profit, which he was at liberty
to divide as he thought proper with the original lenders. To these, I
think, he gave three, or three and a half per cent for the use of
their money for four months, which money they were to remit in bills
of exchange on Spain, and to redraw at the end of four months for
their principal and interest. The great secret of the operation is,
that government instead of repaying their bills in specie, issues
paper to repay them, the cre