some observations as to the two laws proposed. And first, as to the
expediency of taxing, and the weight of the objections against it.
When it is considered, that the expenditures of the army, (supposing
the war to be carried on in the Southern States, must greatly exceed
the amount of the sums called for from those States,) one position is
clear, that by complying with the requisitions of Congress, a balance
of money must necessarily be brought in from the other States, to
supply the deficiency of the whole revenue in those particular States,
when compared with the amount of the whole expenditure. But by
neglecting to comply with the requisitions of Congress, (as it will be
impossible to supply the army in the same regular manner, which
prevails elsewhere,) the whole cost of the expenditure will fall in
the first instance on those who are near the seat of war, subject to a
future settlement of accounts. Besides which, it is demonstrable, that
this latter mode of supply, which is at present practised, is very
wasteful and expensive. Nor is this the only objection, though
certainly a very strong one. We must further consider, that according
to the present mode of taking supplies, the burden falls very
unequally on the inhabitants, and of course, very unjustly. I fear
that, with truth, it may added, that in some instances, it is attended
with strong circumstances of distress.
Hence, then, I conclude that the propriety of taxation is evident,
unless the reasons against it are of weight sufficient to
counterbalance the inconveniences, which would result from neglecting
it. I proceed, therefore, to examine them. And first, as to the state
of the country and the means of collection. It is clear that within
the enemy's lines, taxes cannot be collected; but out of them, they
certainly may be. For, surely, it is as easy to compel a man to pay
money by seizing his property, as it is to seize that property for the
subsistence of the troops. There is, however, this additional
advantage in taxing, that those may be compelled to pay, who have not
articles useful for the army, as well as those who have. The
objection, that those who have land only will be distressed by the
sale of it, will have just as much weight as the Legislature may
choose to give it; for if no taxes are raised on land, the objection
will vanish, and certainly the Legislature will be in capacity to
determine whether any tax should be laid on it, and what that tax
should be.
But, further, it appears that the objection is calculated to favor the
rich, who are great landholders, in preference to the poor, who labor
on a small plantation; and how far this may be either wise or just is
not for me to determine. I will, however, suggest an expedient, that,
as the taxes are payable quarterly, the first two quarters' tax should
be raised on the polls, the slaves, and other personal property in the
State, and the land tax be paid on the last quarterly instalments.
This will give the several landholders room to turn themselves, so as
to provide for their several appropriations in season. I will just add
under this head, that if (as there is some reason to hope) the
southern States should be totally evacuated, the extension of their
commerce will soon obviate every objection, which can possibly be in
the way of taxation.
I must observe further, that those States, which delay the levying of
taxes to answer present requisitions, will become totally incapable of
complying with future calls, and consequently, we shall always be
dealing in doubts and uncertainties, instead of establishing that
confidence and vigor, which alone can perfect our independence.
I come now to the proposed law for compelling the receipt of the notes
and regulating the prices of articles. My opinion of all such laws is
decidedly fixed. I know both from reason and experience, that they
injure the credit of the paper they appear designed to support. They
show doubts in the mind of the Legislature, they communicate those
doubts to the breasts of the people, the credit of the paper is then
destroyed before it is issued, and all the after operation of the law
is one continued scene of fraud and iniquity. If, therefore, such tax
bill shall be passed as will permit issuing the notes in question, I
entreat, that on no representation, nor for any cause whatever, any
law be passed making the notes a tender, valuing the price of goods,
or anything of that sort. I ask for no embargo, no regulations. On the
contrary, I wish and pray, that the whole detestable tribe of
restrictions may be done away, and the people be put in possession of
that freedom, for which they are contending. I have no system of
finance, except that which results from the plain self-evident
dictates of moral honesty. Taxation and economy are the two pillars by
which that system is supported, and if the several States will provide
the former, I will pledge myself for the latter, as far as my
abilities will permit.
To return then, Sir, to the plan I have to propose. It is simply this.
I expect that the Legislature of your State will immediately pass laws
to collect by the days named, the sums called for from them for the
service of the year 1782. To facilitate the collection and payment of
the taxes, I consent to receive the notes signed by the Receiver of
the continental taxes for your State. If, therefore, the Legislature
approve of my plan, they will merely add a clause rendering those
notes receivable by their collectors as specie, in the continental
taxes. They will, I doubt not, provide the ways and means by which the
Receiver shall compel the several collectors to pay over whatever
sums, either of those notes or of hard money, they may have received.
This will leave it purely optional with the people to take the notes,
or to let them alone. If the taxes are collected, they must either pay
those notes or hard money. If they pay hard money, the notes will not
be necessary. If they pay the notes, the public will already have
received the value of them, in the articles for which they are first
paid.
I enclose the form of the notes and the denominations, and I will
appoint the Receiver of the continental taxes for your State, as soon
as I can fix on a proper person, and prepare the necessary
instructions. In the meantime, the law may easily be passed, with a
clause directing the mode in which the appointment of such Receiver
shall be announced to the public.
I have the honor to be, &c.
ROBERT MORRIS.
* * * * *
TO THE GOVERNOR OF RHODE ISLAND.
Office of Finance, December 29th, 1781.
Sir,
I have been favored with your letter of the 3d of last month, and am
much obliged to you for the information it contains. There is now
before Congress, on a report from this office, a plan for liquidating
and adjusting the accounts of the several States, and I should sooner
have answered your letter, if I had not expected the pleasure of
sending forward the Act of Congress on that subject with my letter.
I have no doubt but that the State over which you preside, has made
great exertions in the common cause, and but for the exertions, which
have been made, the enemy would long since have been more successful.
Every State in the Union claims the merit of extraordinary efforts,
and whose claim is the best, I will not pretend to ascertain; but I
feel it to be my duty to observe, that nothing but a continuance of
active exertions on our part can possibly assure those objects, for
which so much has already been done and suffered. Persuaded that the
wisdom of your Legislature will feel equally with me the force of this
observation, I have no doubt but that the requisitions of Congress,
for the service of the year 1782, will be punctually complied with.
With respect to the impost law, I will not say anything more about it,
than merely to remind you of what has already been said in former
letters. The time is hastening on, when it must be determined, perhaps
forever, whether the United States of North America shall, or shall
not, possess the inestimable jewel of public credit. In the meantime,
the conduct of those in public life, as far as it relates to this
object, must determine whether or not they are really the friends of
their country. Mr Warren, who is now I suppose with you, will, I doubt
not, give you every information, which may be required as to the
situation of our affairs, and his genius and talents will enable him
to place in a much stronger point of view than any letter from me, the
importance of complying with the requisitions of the United States. I
hope, Sir, you will pardon me for adding, that if every State in the
Union has an equal right with yours to wait until others have
complied, the Congress may spare themselves the trouble of doing any
further business, and their constituents may be spared the expense of
keeping them together. I need not, I am persuaded, go into detail of
the consequences.
With perfect respect and esteem, I am, &c.
ROBERT MORRIS.
* * * * *
CIRCULAR TO THE GOVERNORS OF THE STATES.
Office of Finance, January 3d, 1782.
Sir,
Although it is now eleven months since Congress recommended an impost
of five per cent on goods imported, and on prizes and prize goods, the
States of Massachusetts, Rhode Island, and Maryland, have not yet
complied with that recommendation.
I will not repeat the arguments to induce a compliance, which are
contained, either in my letter of the 27th of July, or elsewhere; that
is unnecessary. The object of this letter is to make a representation,
which can no longer be delayed consistently with the duties I owe,
either to myself, or my country. And although it is principally
designed for those three States just mentioned, yet I transmit it to
the other States, (in a letter, of which the copy is enclosed,)
because all ought to know what is interesting to all.
Convinced that the impost recommended was not sufficient, I had
devised some additional funds for the payment of our debts, and the
support of our credit. These I should have submitted to the
consideration of Congress, had the States complied with their former
recommendations.
In a circular letter, dated the 19th of October last, I had the honor
to mention an order prohibiting Loan Officers from issuing
certificates in payment of interest, together with the reasons for
which it was made. That order has already produced much clamor among
the public creditors. This I expected, and I still expect that it will
occasion much more.
The public debt is considerable, and the public credit must be lost,
if the interest of it be not provided for. Congress have done their
duty in requesting revenue, and I have done mine in soliciting a
compliance with their request. It only remains for me to bear
testimony against those who oppose that compliance, and to declare,
that they and they only, must be responsible for the consequences.
They are answerable to the other States, to their fellow citizens, to
the public creditors, and to the whole world.
I must speak plainly on this subject. I must point out from time to
time, the reason of those things, which have produced murmurs and
complaints against the representative body of America. I must direct
those who suffer, to those who occasion their sufferings, and those
who are injured to those who have done them wrong. Let me then once
more entreat, that this great object be seriously considered. Let me
repeat, that the hope of our enemy is in the derangement of our
finances; and let me add, that when revenue is given, that hope must
cease. He, therefore, who opposes the grant of such revenue, not only
opposes himself to the dictates of justice, but he labors to continue
the war, and of consequence to shed more blood, to produce more
devastation, and to extend and prolong the miseries of mankind.
I have the honor to be, &c.
ROBERT MORRIS.[2]
[2] _January 7th._ This day the National Bank of North America
opens to transact business. This institution I am persuaded will
flourish under the management of honest men and honest measures.
The present directors are such men, and the present system of
measures are founded in principles of justice and equity.
Therefore, I shall most cheerfully assist all in my power, to
establish and support this Bank. And as a beginning, I have this
day issued my warrant on the treasury for two hundred thousand
dollars in part of the shares, which I have subscribed, on behalf
of the public. _Diary_
* * * * *
CIRCULAR TO THE GOVERNORS OF THE STATES.
Office of Finance, January 8th, 1782.
Sir,
I have the honor to transmit herewith an ordinance passed by the
United States in Congress assembled the 31st day of December, 1781,
incorporating the subscribers of the Bank of North America, together
with sundry resolutions recommending to the several States to pass
such laws as they may judge necessary for giving the said ordinance
its full operation. The resolutions of the 26th of May last speak so
clearly to the points necessary to be established by those laws, that
I need not enlarge on them. Should anything more be found necessary
upon experience, the President and Directors will no doubt make
suitable applications to Congress, or to the States respectively, as
the case may require.
It affords me great satisfaction to inform you that this Bank
commenced its operations yesterday, and I am confident that with
proper management, it will answer the most sanguine expectations of
those who befriend the institution. It will facilitate the management
of the finances of the United States. The several States may, when
their respective necessities require, and the abilities of the bank
will permit, derive occasional advantages and accommodations from it.
It will afford to the individuals of all the States a medium for their
intercourse with each other, and for the payment of taxes more
convenient than the precious metals, and equally safe. It will have a
tendency to increase both the internal and external commerce of North
America, and undoubtedly will be infinitely useful to all the traders
of every State in the Union, provided, as I have already said, it is
conducted on principles of equity, justice, prudence, and economy. The
present directors bear characters, which cannot fail to inspire
confidence, and as the corporation is amenable to the laws, power can
neither sanctify any improper conduct, nor protect the guilty. Under a
full conviction of these things, I flatter myself, that I shall stand
excused for recommending in the strongest manner, this well meant
plan, to all the encouragement and protection, which your State can
give, consistently with wisdom and justice.
I have the honor to be, &c.
ROBERT MORRIS.
* * * * *
TO THE GOVERNOR OF RHODE ISLAND.
Office of Finance, January 14th, 1782.
Sir,
The delegates of Rhode island did me the honor to communicate your
Excellency's letter of the 24th of last month, directed to them. I
have carefully considered that letter, and now, agreeably to my
promise made to them, shall endeavor to convey my sentiments upon it
to you. You mention, Sir, that the Assembly unanimously concluded,
that the sum of two hundred and sixteen thousand dollars, called for
by Congress, to be so large as that it could not by any means be
raised in specie, and you say, further, that the scarcity of cash has
become uncommonly great.
By the Acts of Congress on that subject, you will perceive the amount
of taxes called for by the United States, to be eight millions of
dollars. I cannot pretend to say, that the apportionment has, or has
not been equal; but I am persuaded it is as nearly so as the
information, which could have been obtained, would by any means admit.
The whole sum, Sir, however large it may appear, is very much short of
our former annual expenditures; and, I am sorry to add, that it is
certainly short of what will be necessary, even with the strictest
economy. I am compelled on this occasion to observe, that the want of
credit is now materially felt. Other free nations find infinite relief
from the oppressive weight of taxation by anticipating the public
revenue; but we, with every advantage from nature to prevent it, are
obliged to bear now those burdens, which ought, in reason, to be
divided with succeeding generations. To obtain credit, we must provide
funds amply sufficient, not only to pay the interest of all former
debts, both foreign and domestic, but also sufficient to liquidate
those, which we may find it necessary in future to contract. These
funds must be permanent, clear, sufficient, and at the disposition of
Congress. Nothing short of that will answer the purpose.
In the meantime, the interest of our debt is as great as if such funds
were given; and to pay that interest will cost as much to the people;
but the complaints from every quarter, until it be provided for, do
infinite injury. Whereas, if funds were granted, we might from time to
time obtain loans, both at home and abroad, sufficient to defray a
great proportion of our annual expenditure. You will easily perceive
what relief the people would feel from paying the interest instead of
the principal. As to the want of money, your Legislature must
consider, that there must always be such want from the very nature of
things, because nothing gives to money its value, but the universal
desire of obtaining it; and, of consequence, the ease with which all
the necessaries, conveniences, and luxuries of life are obtained in
exchange for it. It is the value of money, which has induced all wise
nations to raise the supplies in coin, rather than in produce, because
there is nothing, which so facilitates the economy of public
resources. And the great object of a wise and just government is, to
reduce as low as possible the burdens, which the people must bear, for
their own preservation, safety, and advantage. The want of money
always has been, and now is complained of throughout the United
States. This want will, however, be soon remedied in some degree by
the bank paper; and further, it must be remembered, that as the public
wants will call for an expenditure faster than the collection of
taxes will take place, those taxes will by no means decrease the
general circulating medium, and if that medium be, as is said and as I
really believe, deficient, commerce will continue, as at present, to
increase it by the daily importation of specie from abroad.
The taking of specific supplies has, by experience, been found unequal
to the object, and is extremely wasteful and expensive. Many articles
produced in the several States, in themselves very valuable, will by
no means admit of transportation; and even those, which will admit of
it, can seldom be brought to the place where they must be consumed,
but at an expense which, in many instances, exceeds the original
value.
I am convinced, nevertheless, that there is force in your observation,
on the propriety of expending within the State as much of the revenue
drawn from it as can consist with the general interest of the Union.
This, Sir, must, nevertheless, depend in a great degree upon the
cheapness with which your citizens will furnish such things as the
public may want. While they industriously make and cheaply vend those
things, which the necessities of mankind require, they need not
apprehend a want of money; for as, on the one hand, he will get most
of a commodity, who will give for it the most money; so, on the other,
he will get the most money who will give for it the most of a
commodity. Your honorable delegates inform me, that many articles fit
for our use, and in particular blankets and woollen stockings, are
manufactured in your State, and can be afforded to the United States
on good terms. If so, it is very probable, that not only the revenue
called for may be expended there, but even a greater sum. I will give
orders to the Clothier General to make inquiries immediately as to
the quantities and prices of articles proper for his department in
your State; and to purchase, if they can be had upon proper terms.
As to making any agreement for specific articles, I cannot undertake
it, because I have already made contracts for most of the articles,
which we may want, payable in money; and I am too distant to judge of
prices; nor is it possible for the human mind in that complicated
scene, which engrosses every moment of my time, sufficiently to attend
to such minute details. The business of government must be simplified,
in order that it may be well conducted, and to do this is with me a
very principal object. Your Excellency will perceive, that I am
authorised to appoint a Receiver of the Continental taxes within the
several States, and I shall make the appointment within your State
very speedily. I have every disposition to comply with your wishes,
and will give such instructions to the Receiver, as that he may from
time to time facilitate the views of the Legislature and lighten the
burdens of the people, which I sincerely assure your Excellency is an
object that lies nearest my heart.
I have the honor to be, &c.
ROBERT MORRIS.
* * * * *
TO THE PRESIDENT OF CONGRESS.
Office of Finance, January 15th, 1782
Sir,
Finding by the Act of the United States in Congress of the 7th
instant, that I am instructed to prepare and report a table of rates,
at which the different species of foreign coins most likely to
circulate within the United States shall be received at the Treasury,
I have been induced again to turn my attention to an object, which has
employed my thoughts very frequently, and which would have been long
since submitted to Congress, had I not been prevented by other
business, and much delayed by those things relating to this business,
which depended upon others. I shall now pray leave to deliver my
sentiments somewhat at large on this subject.
The United States labor under many inconveniences and even
disadvantages which may at present be remedied, but which, if suffered
to continue, would become incurable, and lead to pernicious
consequences. It is very fortunate for us, that the weights and
measures used throughout America are the same. Experience has shown in
other countries, that the efforts of the legislator to change weights
and measures, although fully seconded by the more enlightened part of
the community, have been so strongly opposed by the popular habits and
prejudices, that ages have elapsed without producing the desired
effect. I repeat, therefore, that it is happy for us to have
throughout the Union the same ideas of a mile and an inch, a hogshead
and a quart, a pound and an ounce. So far our commercial dealings are
simplified and brought down to the level of every capacity.
With respect to our money, the case is very widely different. The
ideas annexed to a pound, a shilling, and a penny, are almost as
various as the States themselves. Calculations are, therefore, as
necessary for our inland commerce as upon foreign exchanges. And the
commonest things become intricate where money has anything to do with
them. A farmer in New Hampshire, for instance, can readily form an
idea of a bushel of wheat in South Carolina, weighing sixty pounds,
and placed at one hundred miles from Charleston; but, if he were told,
that in such situation it is worth twentyone shillings and eight
pence, he would be obliged to make many inquiries, and form some
calculations before he could know that this sum meant in general what
he would call four shillings; and even then he would have to inquire
what kind of coin that four shillings was paid in, before he could
estimate it in his own mind, according to the ideas of money, which he
had imbibed. Difficulties of this sort do not occur to farmers alone.
They are perplexing to most men, and troublesome to all. It is,
however, a fortunate circumstance, that money is so much in the power
of the Sovereign, as that he can easily lead the people into new ideas
of it; and even if that were not the case, yet the loose state in
which our currency has been for some years past, has opened the way
for receiving any impressions on that subject.
As we are now shaking off the inconveniences of a depreciating medium,
the present moment seems to be that, in which a general currency can
best be established, so as that in a few months, the same names of
money will mean the same things in the several parts of the United
States.
Another inconvenience, which admits of the same easy remedy, and which
would indeed be cured by the very same Act, is the want of a legal
tender. This is as necessary for the purposes of jurisprudence, as a
general currency is for those of commerce. For although there is great
impropriety, not to say injustice, in compelling a man to receive a
part of his debt in discharge of the whole, yet it is both just and
proper, that the law should protect the honest debtor, who is willing
to pay, against the vexatious suits of an oppressive creditor, who
refuses to receive the full value.