Thanks for Smith's sympathy [on failure of his banking house]; speculates causes including the great employment of capital following the opening of the American trade and immense exports of Liverpool merchants, most of whom kept their accounts with them, although though most direct and immediate cause was from the least expected quarter [unspecified]. Confident that his and his partners' property will cover all debts and leave a disposable income for themselves and consoles himself with the thought of being freed from his many obligations. Was unaware that [Thomas William] Coke, Lord Derby [Edward Smith-Stanley], and others had been applied to. His family bear it well.

Current state of affairs [following failure of his banking house]: they have appeased the "great mass" of their creditors and pleaded for time to convert their funds to money; surprised and consoled by the kindness and confidence they have met with, following a meeting on recommencement of business which was "unanimously asserted to" by the 400 in attendance, some refractory persons remain. Comments on support and friendship of Mr Martin [Smith's brother-in-law]. Allerton, his library, and art collection are all to be sold, but as they will fully discharge his obligations he does it with pleasure.

Current state of affairs [following failure of his banking house]: has dispatched catalogues of his books, drawings, and prints and expects sale to be well attended; Lord [George John] Spencer has already expressed an interest; transcribes a sonnet on being parted with his library. Business of their bank increasing again and if not for the commerical depression they would quickly recover what they had lost, discusses the particular risks of Liverpool banking ventures.

Pleased by Smith's improved health and opportunities to see [Thomas William] Coke and Duke of Bedford [John Russell, 6th Duke]; his own delight at making acquaintance of Lord [George John] and Lady [Lavinia] Spencer [(1762-1831)], who have invited him to spend Christmas at Althorp, [Northamptonshire]. Invited Dr Francis [Buchanan] to Allerton but his ship embarked early. Dispatched parcel of manuscripts to Coke at Holkham, [Norfolk].

Pleased [Thomas William] Coke is satisfied with the books he bought at sale of his collections, including particularly fine manuscript of the Bible, and the pitcures he bought are the "cream" of the collection; Hargreaves has made a miniature copy of the "Head of Christ" by Leonardo da Vinci. Keen to meet Smith at Holkham, [Norfolk, home of Coke]. Congratulates Mr and Mrs Reeve. His daughter, Jane, recovering but still source of anxiety.

[Letter incomplete: first folio cropped, presumed destroyed]

Thanks for Smith's congratulations and refers him to Mr Martin [Smith's brother-in-law] for all information on subject [presumably a recovery in his affairs]. A reconciliation has occured between them and their friends at Greenbank, renewing friendship of 30 years.

Everything Smith said of [Thomas William Coke] has been fulfilled, and still hopes to meet Smith at Holkham, [Norfolk, Coke's home]. His studies and pursuits have been interrupted by the dispersal of his library, though he has long suspected that collecting literary and artistic curiosities has an unfavourable effect on original efforts, and now plans to focus on several unfinished labours.