"Mr. Grenville has written to his court for further instructions. We shall see what the return of his courier will produce. If full power to treat with each of the powers at war against England does not appear, I imagine the negotiation will be broken off. Mr. Grenville, in his conversation with me, insists much on our being under no engagements not to make a peace without Holland. I have answered him, that I know not but that you may have entered into some, and if there should be none, a general pacification, made at the same time, would be best for us all, and that I believe neither Holland nor we could be prevailed on to abandon our friends. What happens further shall be immediately communicated.

"Be pleased to present my respects to Mr. Laurens, to whom I wrote some days since. Mr. Jay, I suppose, is on his way hither. With great respect, B. FRANKLIN."

&c.

On Monday the 3d, Mr. Oswald came according to appointment. He told me, he had seen and had conversations with Lord Shelburne, Lord Rockingham, and Mr. Fox. That their desire of peace continued uniformly the same, though he thought some of them were a little too much elated with the late victory in the West Indies; and when, observing his coolness, they asked him, if he did not think it a very good thing; "yes," said he, "if you do not rate it too high." He went on with the utmost frankness to tell me, that the peace was absolutely necessary for them. That the nation had been foolishly involved in four wars, and could no longer raise money to carry them on, so that if they continued, it would be absolutely necessary for them to stop payment of the interest money on the funds, which would ruin their future credit.

He spoke of stopping on all sums above one thousand pounds, and continuing to pay on those below, because the great sums belonged to the rich, who could better bear the delay of their interest, and the smaller sums to poorer persons, who would be more hurt, and make more clamor, and that the rich might be quieted by promising them interest upon their interest. All this looked as if the matter had been seriously thought on.

Mr. Oswald has an air of great simplicity and honesty, yet I could hardly take this to be merely a weak confession of their deplorable state, and thought it might be rather intended as a kind of intimidation, by showing us that they had still that resource in their power, which he said would furnish five millions a year. But, he added, our enemies may now do what they please with us; they have the ball at their foot, was his expression, and we hope they will show their moderation and magnanimity. He then repeatedly mentioned the great esteem the ministers had for me, that they, with all the considerate people of England, looked to, and depended on me for the means of extricating the nation from its present desperate situation; and that, perhaps, no single man had ever in his hands an opportunity of doing so much good as I had at this present time, with much more to that purpose. He then showed me a letter to him from Lord Shelburne, partly, I suppose, that I might see his Lordship's opinion of me, which, as it has some relation to the negotiation, is here inserted. He left it with me, requesting that I would communicate it to Mr. Walpole.

FROM THE EARL OF SHELBURNE TO RICHARD

"SIR,

OSWALD.

"Whitehall, 21 May, 1782.

"It has reached me, that Mr. Walpole esteems himself much injured by your going to Paris, and that he conceives it was a measure of mine, intended to take the present negotiation with the court of France out of his hands, which he conceives to have been previously commenced through his channel, by Mr. Fox. I must desire that you will have the goodness to call upon Mr. Walpole, and explain to him distinctly, how very little foundation there is for so unjust a suspicion, as I knew of no such intercourse. Mr. Fox declares, he considered what had passed between him and Mr. Walpole, of a mere private nature, not sufficiently material to mention to the King or the cabinet, and will write to Mr. Walpole to explain this distinctly to him.

"But if you find the least suspicion of this kind has reached Dr. Franklin, or the Count de Vergennes, I desire this matter may be clearly explained to both. I have too much friendship for Dr. Franklin, and too much respect for the character of the Count de Vergennes, with which I am perfectly acquainted, to be so indifferent to the good opinion of either, as to suffer them to believe me capable of an intrigue, where I have both professed and observed a direct opposite course of conduct. In truth, I hold it in such perfect contempt, that, however proud I may be to serve the King in my present situation, or in any other, and however anxious I may be to serve my country, I should not hesitate a moment about retiring from any situation which required such services. But I must

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do the King the justice to say, that his Majesty abhors them, and I need not tell you, that it is my. fixed principle, that no country in any moment can be advantaged by them. I am, with great truth and regard, &c. SHELBURNE."

In speaking further of the ministry's opinion of the great service it might be in my power to render, Mr. Oswald said, he had told them in one of his conversations, that nothing was to be expected of me but consistency, nothing unsuitable to my character, or inconsistent with my duty to my country. I did not ask him the particular occasion of his saying this, but thought it looked a little as if something inconsistent with my duty had been talked of or proposed. Mr. Oswald also gave me a copy of a paper of memorandums, written by Lord Shelburne, viz.

"1. That I am ready to correspond more particularly with Dr. Franklin, if wished.

"2. That the Enabling Act is passing, with the insertion of Commissioners recommended by Mr. Oswald; and, on our part, commissioners will be named, or any character given to Mr. Oswald, which Dr. Franklin and he may judge conducive to a final settlement of things between Great Britain and America; which Dr. Franklin very properly says, requires to be treated in a very different manner from the peace between Great Britain and France, who have always been at enmity with each other.

"3. That an establishment for the loyalists must always be on Mr. Oswald's mind, as it is uppermost in Lord Shelburne's, besides other steps in their favor to influence the several States to agree to a fair restoration or compensation for whatever confiscations have taken place.

"4. To give Lord Shelburne's letter about Mr. Walpole to Dr. Franklin."

On perusing this paper, I recollected that a bill had been some time since proposed in Parliament, To enable his Majesty to conclude a Peace or Truce with the revolted Provinces in America, which I supposed to be the Enabling Bill mentioned, that had hitherto slept; and, not having been passed, was perhaps the true reason why the colonies were not mentioned in Mr. Grenville's commission. Mr. Oswald thought it likely, and said, that the words, "insertion of Commissioners, recommended by Mr. Oswald," related to his advising an express mention in the bill of the Commissioners appointed by Congress to treat of peace, instead of the vague denomination of any person or persons, &c. in the first draft of the bill.

As to the loyalists, I repeated what I had said to him when first here, that their estates had been confiscated by the laws made in particular States where the delinquents had resided, and not by any law of Congress, who, indeed, had no power, either to make such laws or to repeal them, or to dispense with them, and, therefore, could give no power to their Commissioners to treat of a restoration for those people; that it was an affair appertaining to each State. That if there were justice in compensating them, it must be due from England rather than America; but, in my opinion, England was not under any very great obligations to them, since it was by their misrepresen tations and bad counsels, she had been drawn into this miserable war. And that if an account was to be brought against us for their losses, we should more than balance it by an account of the ravages they had committed all along the coasts of America.