Mit Complimenten Aweissen (put him off with compliments)
Arthur Lee, one of the American Commissioners stationed in Paris, was appointed minister to the Prussian Court of King Frederick the Great in the Spring of 1777. He departed Paris on May 19 and arrived in Berlin on the evening of June 4. The next day, he informed Baron Gebhardt Wilhelm von der Schulenburg, the Prussian Minister of State, of his arrival. In a letter to Schulenburg two days later, he extended the following apology:
I hope your excellency will do me the justice to believe that if I had known His Majesty’s pleasure before my departure, I should have acted in conformity to it. And if my residence here as a traveller should give the least uneasiness to your court, I rely upon your excellency’s informing me of it; since nothing could be more disagreeable to me than to cause the slightest uneasiness where I owe the highest respect.
Proceeding to business, he then identified the items each country might consider for exchange, the level of sailing skills that the captains and sailors would need to possess, the role that St. Eustatius would play in their plans and the principal ports in the colonies that would receive the ships.
On June 9, Schulenburg made it clear to Lee that he could not be in Berlin as an American Commissioner but rather “your residence at Berlin will not be at all disagreeable to the King, provided you live here as an individual and without assuming a public character.” Schulenburg also asked Lee,
to add a memorandum of the places where insurance can be effected on vessels destined for America, and the premiums of insurance to be paid. I will then examine your propositions and will soon be able to inform you whether we conceive it possible to make an experiment of the kind with success.
Lee supplied Schulenburg with the rates from four French ports, but believed the Prussian Court would get the best rate in Amsterdam.
On June 15, Lee informed Franklin and Deane that American Privateers selling their prizes (most likely, English ships) in Prussia’s ports would be a problem.
American privateers . . . could function only if the government opened its ports to them and overlooked the secret sale of their prizes; Prussia had no experience in such matters . . . And the King would take no steps that might embroil him with Great Britain.
On June 18, Schulenburg made it appear that Frederick was close to agreeing on some form of commercial exchange.
After having duly examined the propositions which you have been so kind to address to me . . . I am of opinion with you . . . Sir, that it is very probable that even with paying the highest premium, the scarcity and dearness of our merchandise in America, added to abundance and low price of your productions, which can be advantageously sold in Europe, would render this commerce very profitable to the two nations: but a difficulty almost insurmountable presents itself, which is, that never having gone as far as your country, we want vessels as well as captains, pilots and sailors, who could or would go to such distant seas. Besides, vessels we have are necessary for the interior commerce between his Majesty’s different provinces, and for that which we carry on with France, England and Spain. We can only therefore, try and see if there are any proprietors of vessels in Holland or Hamburg that, in consideration of a suitable freight, will load with and carry our merchandise.
On the 20th, Lee tried to put Schulenburg at ease
the admission our cruisers into his Majesty’s ports to supply themselves with necessaries, careen, and sell their prizes . . . Is the only method of establishing a commerce at present from America . . . for the privateers take in a light cargo from America, which they bring to the ports where they are permitted. This they exchange for necessary supplies, and then make a cruise, by the profits of which they are enabled to purchase a cargo of such manufactures as are wanted in America, with which they return.
Lee closed the letter with a caveat: if the king did not grant permission for the privateers to enter his ports, they would be obliged to send their prizes south (to France) or directly to America and there would then be “no means of commerce or communication with his Majesty’s dominions.”
On June 23, Frederick wrote to Baron de Maltzan, his Ambassador to the Court of St James, “There has arrived at my court a deputy of the colonies to propose to me a commercial treaty; but as their independence is not yet decided, you will readily see that I have not wished to enter into negotiations with him.” He also wrote to Schulenburg
It is necessary to continue the same tone with him and to tell him that although I am well disposed towards his constituents . . . They ought not to expect that in order to favor them I should embroil myself with England.
Two weeks earlier, shortly after Lee’s arrival, Frederick made a similar comment in a letter to Baron Berhard Wilhelm von der Goltz, his Ambassador to the Court at Versailles, “as to the deputies of the Congress, I still hesitate as to the course to take toward them. It is necessary to await the turn in their affairs.”
On June 20, Schulenburg responded to Lee’s letter of the same day:
I can assure you, sir, that the king is very much disposed to please your constituents but . . . his Majesty in the present circumstances . . . cannot embroil himself with the court of London. Moreover, our ports have ever hitherto received only merchant vessels, and no ships of war nor privateers have ever entered there, so that the officers established in our ports would be embarrassed how to conduct themselves on such an occasion . . . We must therefore inform ourselves in what manner the courts of France and Spain act, and of the informalities they observe towards our privateers, and how they grant free admission.
Another event occurred on the 26th that would frame Lee’s entire visit. Near the end of 1776, England appointed Hugh Elliot, Minister to the Prussian Court, in Berlin. In late May, he was informed of Lee’s appointment and that he would soon be arriving in Berlin. Upon Lee’s arrival, Elliot requested a meeting with Schulenburg; at the direction of the Ministry, he was to discover the reason for Lee’s visit. Schulenburg assured him of Prussia’s goodwill toward England and “that His Majesty was entirely ignorant of [there] being at all connected with the rebels in America, or with any persons disaffected to his Majesty’s government.” Finding this difficult to believe, Elliot had to find another way of discovering the reason(s) behind Lee’s visit—and so he did. The following versions differ in specifics but the overall events remain the same. The first version is from a letter Lee wrote to Franklin and Deane on the 26th:
While I was at dinner, my bureau was broken open, and some papers stolen out, which were in porte feuille. The English Ambassador happened to be in the hotel where I lodge when I discovered the robbery. Upon being informed that I was gone to the governor and that the suspicion fell upon one of his servants, he went away in great confusion, and in half an hour the porte feuille, with all the papers, were laid down at the door and the person ran off undiscovered. The examinations that have been taken charge his servant with having repeatedly told the servants of the hotel that his master would give two thousand ducats for my papers.
The second version is the result of an interview between John Quincy Adams and Elliot in 1800.
He solemnly declared that the seizure of Mr. Lee’s papers was not made by his orders; that it was entirely the act of an officious servant, who thought to do him a service; that when the papers were brought to him he did look over them indeed, and found among them only two of any consequence; one the draft of an unfinished treaty with Spain, and the other a letter from Frederick the Second, or one of his ministers, promising that if any great power in Europe would set the example of acknowledging the independence of the United State he would be the first to follow it.
The third version was relayed by Thomas Carlyle in his work, History of Friedrich II of Prussia.
I know not whether it was by my Lord Suffolk’s instigation or . . . the Britannic Cabinet . . . but it does appear they had got it into their sagacious heads that the bad neighbor at Berlin was, in effect, the arch-enemy, probably mainspring, of the whole matter, and that it would be in the highest degree interesting to see clearly what Lee and he had on hand. Order thereupon to Elliot: “Do it, at any price” . . . Do it by any method,—steal Lee’s dispatch-box for us!” . . . “Lee is a rebel, quasi-outlaw; and you must!” Elliot thereupon . . . hired, or made his servant hire, the chief housebreaker or pickpocket in the city . . . “Lee lodges in such and such a Hostelry; bring us his red-box for a thirty hours: it shall well be worth your while!” And in brief space the red-box arrives accordingly . . . a score or two of ready-writers waiting for it, who copy all day, all night, at the top of their speed, till they have enough: which done, the Lee red-box is left on the stairs of the Lee Tavern; box locked again, and complete: only the Friedrich-Lee secrets completely pumped out of it, and now rushing day and night towards England, to illuminate the supreme council.
This version supports the notion that Lee was confused when he wrote his letter—that the theft actually took place on the 25th but Lee did not realize it until the 26th. This notion is the most probable explanation for how so many events could have taken place in so short a period of time—i.e., letter copying, the authority’s investigation, and the “safe” flight of the thief.
On the 27th, Elliot informed Governor Hertzberg that because the investigation pointed to one of his servants who now could not be found, as a gentleman he was willing to accept full responsibility for the event. The next day, Frederick (and Governor Hertzberg) demanded an investigation be opened.
On June 30 in a letter to Maltzan, Frederick shows that he had already made up his mind regarding the action to be taken against Elliot, “I did not wish to push things to an extreme, and confined myself to notifying him through my ministers of the impropriety and lawlessness of his conduct.” 
On July 1, Lee requested an audience with Frederick, at which he wanted “to make my complaint, and to say some things thereupon which it is impossible to commit to paper.” Lee received an answer from Frederick the next day:
His majesty has just ordered his minister of state, Baron de Schulenberg, to hear what he has further to offer on the subject; that for this purpose, Mr. Lee may communicate to the said minister without reserve everything he may wish to inform his majesty of, who assures him through the present letter, that an inviolable secrecy and profound silence shall be observed respecting the overtures he may think proper to make through this channel.
On July 4, Lee informed Schulenberg that he was leaving Berlin in a week; the reason he gave for his decision was the futility of his mission. In a letter to Franklin and Deane later in the day he told them that he had just learned,
the envoy [Elliot] has dispatched his secretary [Robert Listen] to London, but whether to guard against the storm which he expects his indiscretion will excite from hence, or to give the intelligence he obtained, or both . . . I know not . . . But I shall leave this place next week unless something from you should stop me; hitherto I have not been favored with a single line.
While the investigation was being conducted, Frederick had been mulling over three courses of action that he could take: first, refuse Elliot admission to his court; second, undertake a formal demarche; and third, demand his recall. England was quick to disavow the actions of her minister and was prepared to recall him.
On July 8, at Schulenberg’s request, Lee visited him one last time at his countryside residence. There are no records as to what they discussed, but Lee did return to Paris with a copy of the governor’s full investigation. It is possible that Schulenburg gave it to him during the visit.
From Frederick’s viewpoint, the American colonies had no Treaty of Commerce or Alliance with France and had not yet secured its independence. If he opened commercial relations with the colonies, his country would suffer the ire of England, If, however, his country remained neutral, he could put off the treaty that England (a country he did not trust) was seeking. On August 11, Frederick announced his decision regarding the entire affair. He told Hertzberg that he did not wish “a noise” to be made over the affair, and that he was to tell Elliot that out of consideration for the King of England and of Elliot’s youth, he had decided to “pass over the matter in silence.” Lee, having arrived in Paris near the end of June, did not learn of the decision until the middle of August.
This episode occurred against the backdrop of a complex relationship between Prussia and England, which created an atmosphere shrouded in political tension and rife with subtle friction points. None individually were enough for one to declare the other an enemy, but if Prussia allowed the American privateers to sell their (most likely) English prizes in her harbors and then refit so that they could go out and capture more English vessels—this would have been enough for England to declare war on Prussia.
In 1744, Carl Edzard, the last prince of East Frisia, died without an heir. Forty years earlier the Holy Roman Emperor Leopold I had promised East Frisia to Prussia in the event that the ruling family had no heir. Hanover, an Electorate of the Empire and domain of George II of England, disregarded the promise and attempted to take control of the land following Edzard’s death, but Frederick’s troops prevailed. Emden was the main port of East Frisia. On August 4, 1750, Frederick granted a charter to a newly formed and government-backed company—the Emden Trade Company. French experts were hired to teach local artisans how to build sturdy ships that would carry Prussian linen, timber and hemp to Spain. The goods would be sold in Spain for silver that was then used to purchase silk, tea, porcelain and spices in China. The strength of Frederick’s plan was that it focused on Prussian commerce and manufactures. When English merchants learned of the company, they became concerned since England controlled much of the trade in the Baltic region.
In 1752, Frederick published a book entitled Testament Politique. In it, he stressed the importance of trade and manufacturing in the advancement of his country. Between 1763 and 1775, England became Prussia’s number one trading partner, followed by Holland and then Spain. Prussia’s number export was Silesian linen, followed by worsted wool and non-worsted wool and semi-finished and finished iron goods. A significant portion of each was purchased by English merchants and then sent to the American colonies to be sold.
In 1772, the First Partition of Poland occurred. The victories of the Russian Empire over the Ottoman Empire became a problem for Austria (the Habsburg Empire) because they endangered Austrian interests in some of the regions. Frederick, concerned that Austria might go to war with Russia, suggested a plan whereby the Polish borderlands would be partitioned by the three countries with Austria getting the largest share. On August 5, Russia, Austria, and Prussia signed a treaty recognizing the partition. Even though Prussia gained the smallest amount of land, she gained Polish Royal Prussia including Ermland and the northern areas of Greater Poland, both located in northwestern Poland. Polish Royal Prussia and Ermland were Poland’s territories on the Baltic Sea, through which eighty percent of Poland’s foreign trade passed.
The port city of Danzig located in (Polish) Royal Prussia fought to remain a part of Poland, even though it was surrounded by Prussian provinces. It would not be long before a trade war brokeout between Prussia and Danzig. England, a trading partner with Danzig, threatened to rescind the “drawback” on Silesian linens that passed through England en route to the American colonies. In the fall of 1773, when news of the possible suspension reached Berlin, Frederick immediately hoped to head off any threat that would restrict Prussian exports. He ordered Maltzan to inform the Court of St. James that he was prepared to utilize “any of a thousand means” to disrupt England’s Baltic trade. His threat had the effect that he hoped for. England had her hands full with her American colonies and could not afford a conflict or threat to its commercial trade so close to home. In return, Frederick promised to end the trade war with Danzig. Once war broke out between England and her American colonies, he believed that if the colonies were victorious, Prussia could open trade relations with them, and if England was victorious, Prussia would just continue the relations already in place. His concern was with the risk of lost trade opportunities and becoming mired in an intractable diplomatic position with England, if Prussia prematurely opened relations with the American colonies and they lost the war. Lee best described the dilatory tactics that Frederick employed during his visit in June of 1777 as “a system of caution.”
Arthur Lee to Wilhelm von der Schulenburg, June 5, 1777, in Francis Wharton, ed., The Revolutionary Diplomatic Correspondence of the United States (Washington DC: Government Printing Office, 1888), 2:332.
Lee to Benjamin Franklin and Silas Deane, June 15, 1777, founders.archives.gov/documents/Franklin/01-24-02-0131. On this day Lee also wrote to Gen. George Washington. He informed him that Frederick’s army “amounts to 228,000 Horse & foot … and the Regiments here are in the field every day [training].”
David Widget, ed., “History of Friedrich the Second called Frederick the Great,” The Project Gutenberg Works of Thomas Carlyle, including The History of Friedrich II of Prussia and Others (Salt Lake City, UT: Project Gutenberg Literacy Archives Foundation, 2012), Book 21, Chapter 5.