ARTHUR LEE. [38] “_In Congress, December 3d, 1777._ The great quantity of paper money, issued to defray the necessary expenses of the war, having at length become so considerable as to endanger its credit, and Congress apprehending, that the slow operation of taxes may not be adequate to the prevention of an evil so pernicious in its consequences, and as experience proves, that the method of paying the interest by bills on France does not fill the loan office so fast as the urgent calls of war demand, “_Resolved_, That the Commissioners at the Courts of France and Spain be directed to exert their utmost endeavors to obtain a loan of two millions sterling on the faith of the United States, for a term not less than ten years, with permission if practicable to pay the same sooner if it shall be agreeable to these States, giving twelve months’ previous notice to the lender, of such intention to return the money. That the Commissioners be instructed to consider the money hereby directed to be borrowed, as a fund to be applied, unless Congress direct otherwise, solely to the purpose of answering such drafts as Congress shall make for the purpose of lessening the sum of paper money in circulation. “That in order more effectually to answer the good purposes intended by this plan, the Commissioners be also instructed to keep as secret as the nature of the thing will admit, whatever loan they shall be able to obtain for this purpose on account of the United States.” TO THE COMMITTEE OF FOREIGN AFFAIRS. Paris, July 29th, 1778. Gentlemen, I enclose you a duplicate of the news of an engagement between the fleets of France and England. The particulars received since make the loss on board the French fleet very inconsiderable, and paint the behavior of the English to have been inexpert and dastardly. The repulsing them in the first engagement will probably lead to the defeating them in the next, for which purpose the fleet of our allies will go out in a few days. The Empress and Emperor seem at length sensible of the impropriety of their conduct, and in consequence a truce for six weeks is agreed on, to give time for negotiation to prevent the effusion of blood. The quadruplicate of the ratification reached us on the 3d in safety, as all the rest have done. The answer of Congress to the Commissioners was immediately sent to the ministers, and will, I am persuaded, give great satisfaction.