I received the Letter your Excellency did me the honour of writing to me on the 8th. Inst. in answer to mine of the 4th—.

The State of Mr Lawrens's Transaction in Holland, as I understood it, is this.— Capt. Gillon represented to him, that he had bought Clothing &ca for the Troops of South Carolina, to the Value of 10,000£ Sterling, which were actually shipp'd in the Indienne; that he now wanted Money to get his Ship out, and therefore proposed to Mr Lawrens to take those Goods of him for the United States. Mr Lawrens agreed to take such as would suit their Wants, and to pay for the same by Bills upon me at Six Months sight; and proposed to send in her some other Articles that could be bought in Holland. His Motives were that this fine Ship, if she could be got out would be a safe Conveyance; and that she would afterwards be useful to the Congress on our Coasts. He informed me that he had mentioned to your Excellency Capt. Gillon's Proposal, and that you seem'd to approve of it. I accordingly consented to his ordering those Drafts upon me; but this will not be any great Addition to my Difficulty, since in the Term of 6 Months, I can probably receive from Congress the Power which you judge necessary for applying any Part of the Loan opened in Holland to the Discharge of those Bills.

With regard to the Drafts made by Congress on Mr Jay, in Expectation of a friendly Loan from the Court of Spain; on Mr Lawrens and Mr Adams in Holland, from Assurances given by some People of that Country that a Loan might be easily by them obtained there; and large Drafts upon myself, exclusive of the Loan Office Interest Bills; these all together occasion an Embar-rasment, which it is my Duty to lay before your Excellency, and to acquaint you with the Consequences I apprehend may attend their not being duly discharged. Those Bills were occasioned first by the Sums necessary last Year to assemble our Army and put it in a Condition to act vigorously with the King's Sea and Land Forces arrived and expected to arrive from France, against New York, and to defend the Southern Colonies. Our main Army was accordingly put into such a Condition as to face Mr Clinton before New York all Summer; but the additional Forces expected from France not arriving, the Project was not pursued, and the Advantage hoped for from that Exertion and Expence was not obtained, tho' the Funds of Congress were thereby equally exhausted. A second Necessity for drawing those Bills, arose from the Delay of five Months in the sailing of Mr. De Chaumonts Ship, occasioned by the Distraction of his Affairs, whereby the Clothing for the Army not arriving in Time before Winter, the Congress were obliged to purchase the Cloths taken by Privateers from the Quebec Fleet; and this could only be done by Payment for the same in Bills. All these Bills were drawn by solemn Resolutions of Congress; and it seems to me evident, that if no Part of the Aids lately resolved on by his Majesty can be applied to their Discharge, without an express Order from Congress for that purpose, the Public Credit of the United States instead of being “re-animated” as his Majesty graciously intended, will be destroy'd; for the Bills unpaid, must, according to the usual Course, be returned under Protest, long before such Order can be obtained, which Protest will by our Laws, entitle the Holders to a Damage of 20 pr. Cent, whereby the Publick will incur a net Loss of one Fifth of the whole Sum drawn for; an Effect that will be made use of by their Enemies to discredit their Government among the People, and must weaken their Hands much more in that respect than by the mere Loss of so much Money. On these Considerations, and also from an Opinion that a Bill already drawn by Order of Congress, was as good and clear a Declaration of their Will with regard to the Disposition of so much of any Funds they might have at their disposal in Europe, as any future Order of theirs could be, I ventured to accept and to promise Payment of all the Bills abovemention'd. What I have requested of your Excellency in my late Letter, and what I now beg leave to repeat, is only that so much of the intended Aid may be retained, as shall be necessary to pay those Acceptances as they become due. I had not the least Apprehension that this could meet with any Difficulty; and I hope on Reconsideration, your Excellency may still judge, that it will be for the Advantage of the Common Cause if this Request is granted.

I have already paid most of the Bills drawn on Mr Jay, which the Money furnish'd to him by the Court of Spain did not suffice to pay: I have also paid a Part of those drawn on Mr Lawrens, Mr Adams and myself: To do this I have been obliged to antici-pate our Funds, so that, as our Banker informs me, I shall by the End of this Month owe him about 400,000 Livres, tho' he has already rec'd from M. D'Harvelay for the Quarter of August. I have acted imprudently in making these Acceptances and entering into these Engagements without first consulting your Excellency, and obtaining your explicit Approbation; but I acted as I thought for the best; I imagined it a Case of absolute Necessity; and relying on Assistance from the new Aids intended us, and considering the fatal Consequence of Protests, I thought at the Time that I acted prudently and safely.

The Supplies I shall want for the Payment of these Bills will be gradual. If I cannot obtain them but by an Order from Congress; I must not only stop Payment of those not yet become due, but I apprehend that I shall be obliged to refuse Acceptance of some of the Interest Bills, having disabled myself from paying them, by paying so many others.—

I therefore beg your Excellency would reconsider this important Affair. I am sorry to find myself under a Necessity of giving you so much Trouble. I wish rather to diminish your Cares than to encrease them; being with the most perfect Respect, Sir, Your Excellency's most obedient and most humble Servant