objection, if it did not naturally lead to a position, which has
hitherto been ruinous, and might prove fatal. There are many men, and
some of them honest men, whose zeal against speculation leads them to
be sometimes unmindful not only of sound policy, but even of moral
justice. It is not uncommon to hear, that those who have bought the
public debts for small sums, ought only to be paid their purchase
money. The reasons given are, that they have taken advantage of the
distressed creditor, and shown a diffidence in the public faith. As to
the first, it must be remembered, that in giving the creditor money
for his debt, they have at least afforded him some relief, which he
could not obtain elsewhere, and if they are deprived of the expected
benefit, they will never afford such relief again. As to the second,
those who buy up the public debts, show at least as much confidence in
the public faith as those who sell them. But allowing, for argument
sake, that they have exhibited the diffidence complained of, it would
certainly be wiser to remove than to justify it. The one mode tends to
create, establish, and secure public credit, and the other to sap,
overturn, and destroy it. Policy is, therefore, on this, as I believe
it to be on every other occasion, upon the same side of the question
with honesty. Honesty tells us, that the duty of the public to pay,
is like the same duty in an individual. Having benefited by the
advances, they are bound to replace them to the party, or to his
representatives. The debt is a species of property, and whether
disposed of for the whole nominal value, or the half, for something,
or for nothing, is totally immaterial. This right of receiving and
the duty of paying must always continue the same. In a word, that
government which can, through the intervention of its Courts, compel
payment of private debts, and performance of private contracts, on
principles of distributive justice, but refuses to be guided by those
principles as to their own contracts, merely because they are not
amenable to human laws, shows a flagitious contempt of moral
obligations, which must necessarily weaken, as it ought to do,
their authority over the people.
Before I conclude this long letter, it would be unpardonable not to
mention a fund, which has long since been suggested, and dwells still
on the minds of many. You doubtless, Sir, anticipate my naming of what
are called the back lands. The question as to the property of those
lands, I confess myself utterly incompetent to decide, and shall not
for that reason presume to enter on it. But it is my duty to mention,
that the offer of a pledge, the right of which is contested, would
have ill consequences, and could have no good ones. It could not
strengthen our credit, because no one would rely on such a pledge, and
the recurrence to it would give unfavorable impressions of our
political sagacity. But admitting that the right of Congress is clear,
we must remember also, that it is disputed by some considerable
members of the confederacy. Dissentions might arise from hasty
decisions on this subject. And a government torn by intestine
commotions, is not likely to acquire or maintain credit at home or
abroad.
I am not, however, the less clear in my opinion, that it would be
alike useful to the whole nation, and to those very constituent parts
of it, that the entire disposition of those lands should be in
Congress. Without entering, therefore, into the litigated points, I am
induced to believe, and for that reason to suggest, the proposing this
matter to the States as an amicable arrangement. I hope to be pardoned
when I add, that considering the situation of South Carolina and
Georgia, it might be proper to ask their consent to matters of the
clearest right. But that supposing the right to be doubtful, urging
decision in the present moment, might have a harsh and ungenerous
appearance.
But if we suppose this matter to be arranged either in the one mode or
in the other, so that the right of Congress be rendered indisputable
(for that is a previous point of indispensable necessity) the
remaining question will be, as to the appropriation of that fund. And
I confess it does not appear to me, that the benefits resulting from
it are such as many are led to believe. When the imagination is heated
in pursuit of an object, it is generally overrated. If these lands
were now in the hands of Congress, and they were willing to mortgage
them to their present creditors, unless this were accompanied with a
due provision for the interest, it would bring no relief. If these
lands were to be sold for the public debts, they would go off for
almost nothing. Those who want money could not afford to buy land.
Their certificates would be bought up for a trifle. Very few monied
men would become possessed of them, because very little money would be
invested in so remote a speculation. The small number of purchasers
would easily and readily combine; of consequence they would acquire
the lands for almost nothing, and effectually defeat the intentions of
government; leaving it still under the necessity of making further
provision, after having needlessly squandered an immense property.
This reasoning is not new. It has been advanced on similar occasions
before, and the experience, which all America has had of the sales of
confiscated estates and the like, will now show that it was well
founded. The back lands then will not answer our purpose, without the
necessary revenues. But those revenues will alone produce the desired
effect. The back lands may afterwards be formed into a fund, for
opening new loans in Europe on a low interest, redeemable within a
future period, (for instance twenty years) with a right reserved to
the creditors of taking portions of those lands on the non-payment of
their debts, at the expiration of the time. Two modes would offer for
the liquidation of those debts. First, to render payment during the
term to those who would not consent to alter the nature of the debt;
which, if our credit be well established, would place it on the
general footing of national faith. And secondly, to sell portions of
the land (during the term) sufficient to discharge the mortgage. I
persuade myself, that the consent of the reluctant might be obtained,
and that this fund might hereafter be converted to useful purposes.
But I hope that in a moment when the joint effort of all is
indispensable, no causes of altercation may be mingled unnecessarily
in a question of such infinite magnitude as the restoration of public
credit. Let me add, Sir, that unless the money of foreigners be
brought in for the purpose, sales of public lands would only absorb
that surplus wealth, which might have been exhaled by taxes; so that
in fact no new resource is produced. And that while, as at present,
the demand for money is so great as to raise interest to five per cent
per month, public lands must sell extremely low, were the title ever
so clear. What then can be expected, when the validity of that title
is one object of the war?
I have the honor to be, &c.
ROBERT MORRIS.
* * * * *
TO THE PRESIDENT OF CONGRESS.
Office of Finance, July 30th, 1782.
Sir,
I do myself the honor to enclose for the inspection of Congress,
estimates for the service of the year 1783, amounting in the whole to
eleven millions. I should be strictly justified in praying a
requisition of the United States for that sum, but I conceive that the
demands made should be the lowest which our circumstances will
possibly admit of. I am persuaded, that if the United States in
Congress will adopt those means of economy, which are in their power,
we may save two millions; and, therefore, on a presumption that those
means will be adopted, I shall ask only nine millions. Congress will
observe, that the estimates of the Marine Department amount to two
millions and a half; whereas there was no estimate made for that
service in the last year, any more than for the Civil List. There can
be no doubt that the enemy have changed their mode of warfare, and
will make their principal exertions in the naval line. It becomes us,
therefore, to make like exertions, and that for the plainest reasons.
Experience has shown that the efforts to obtain a large army have for
many years proved utterly fruitless. The only effect of those efforts,
has been to enhance the price of such men as were obtained, and
thereby to disable the States, who exerted themselves to raise
recruits, from pouring supplies into the public Treasury. Thus we have
not only been unable to get more men, but also to pay and support
those which we had gotten. Admitting, however, that the required
number were obtained and properly supported as an army, these things
are clear; first, that without naval aid we could not make an
impression on the enemy's posts. Secondly, that they would be able to
harass and distress us in every quarter, by predatory incursions.
Thirdly, that they would prevent us from receiving those supplies,
which are necessary alike to the operations and existence of an army.
And, fourthly, that their inroads on our commerce would produce such
distress to the country, as to make our revenues utterly unproductive,
and finally bring our affairs to destruction.
An army, therefore, without a navy would be burdensome, without being
able to give essential aid, supposing the enemy to have changed their
system of carrying on the war. But if we had a navy, we should be
able, first, to prevent the enemy from making predatory incursions.
Secondly, we should, at least, keep the ships they have on our coast
together, which would prevent them from injuring our commerce, or
obstructing our supplies. Thirdly, if they kept in this country an
equal or superior force, we should by that means have made a powerful
diversion in favor of our allies, and contributed to give them a naval
superiority elsewhere. Fourthly, if our enemy did not keep an equal or
superior force in this country, we should be able by cruising to
protect our commerce, annoy theirs, and cut off the supplies directed
to their posts, so as to distress their finances and relieve our own.
Fifthly, by economising our funds, and constructing six ships
annually, we should advance so rapidly to maritime importance, that
our enemy would be convinced, not only of the impossibility of
subduing us, but also of the certainty that his forces in this country
must eventually be lost, without being able to produce any possible
advantage. And, sixthly, we should, in this mode, recover the full
possession of our country, without the expense of blood or treasure,
which must attend any other mode of operations; and while we are
pursuing those steps, which lead to the possession of our natural
strength and defence.
I trust, Sir, that the influence of these considerations, will not
only lead the councils of America to adopt the measures necessary for
establishing a navy, but that by economising as much as possible, we
may be able (from the sums now to be asked for) to do more in that
line than is contained in the estimate; but as this must depend on
circumstances, which we cannot command, so it is not prudent or proper
to rely on it. Having already stated the lowest necessary sum at nine
millions, I proceed, Sir, to propose that four millions be borrowed,
which will reduce the quotas to five millions. I make this
proposition, under the idea, that the plans contained in my letter of
yesterday's date be adopted. The quotas then being five millions, the
sum total of what will be taken from the people will amount to only
seven millions; and of that, full twelve hundred thousand will be paid
back as the interest of our domestic debt, so as not to be, in fact,
any burden on the whole people, though a necessary relief to a
considerable part of them. On this plain statement I shall make no
comment. I shall only pray, that as much expedition may attend the
deliberations on these objects as the importance of them will permit,
so that the States may be in a situation to make speedy decisions. And
this is the more necessary, as the negotiations for a loan must be
opened in Europe early next winter.
I have the honor to be, &c.
ROBERT MORRIS.[9]
[9] _August 1st._ This day many people expected that my
engagements to supply the Paymaster General with money to
discharge the notes, which, under that engagement he had issued to
the officers of the army on account of their pay, would be broken,
and, consequently, that my public credit would be lost, and a
train of evils, easy to be conceived, ensue to the United States.
But having warranted Mr Pierce, the Paymaster General, to give his
notes in February last to all the officers of our army, viz. to
all subalterns for the amount of three months' pay, that is, for
January, February, and March, 1782, I have for some time past been
providing for the performance of this engagement, and to
accomplish it, have been distressed in a variety of channels. When
this engagement was taken, it was at the pressing instance of the
Commander in Chief, and to enable the officers to clothe
themselves, which they could not have done without that seasonable
aid. At the time this engagement was made, I had a right to expect
that four millions of dollars would be paid into the treasury of
the United States; as, agreeable to the requisitions of Congress,
two millions were to be paid on the 1st day of April, and two
millions on the 1st day of July. Instead of receiving those sums,
I have not to this hour received fifty thousand dollars on account
thereof, and have, therefore, been compelled to raise this money
by selling bills of exchange on France. Upon sending for Mr
Pierce's return of the notes I issued, I find they amount to one
hundred and forty thousand two hundred and sixtysix dollars; of
which Mr Sands is possessed of thirtynine thousand, which he has
delivered up on my paying part of the amount now, and part to be
paid a short time hence, which leaves to be provided for about
eightyfive thousand nine hundred and fortysix dollars; and as this
debt will be punctually paid, it leaves only an unprovided balance
of fifteen thousand three hundred and twenty dollars, which I
think will be ready before payment is demanded; so that the hopes
and expectations of the malicious and disaffected will in this
instance be disappointed. _Diary._
* * * * *
TO THE GOVERNOR OF RHODE ISLAND.
Office of Finance, August 2d, 1782.
Sir,
I presume you have been before this informed, that all the States
except Rhode Island, have acceded to the impost law. A committee of
Congress lately appointed on this subject, did me the honor to request
my attendance, with that of your Delegates, to hear the objections
from them, and know from me the circumstances attending the
requisition. After a long conversation the committee were about to
confer on a report, which, at my request they were pleased to suspend,
that I might have the last opportunity of praying your attention to
the subject. And I was induced to make that request, as well for the
avoiding those disagreeable discussions, which cannot exist between
the Union and an individual State without inducing pernicious
consequences, as because it appeared to me, that the reasons urged
against passing the impost are not conclusive, as some have thought
them to be.
Mr Howell was so kind as to promise, that he would state his
objections in writing. This he has done, and a copy of them is
enclosed. They are,
1st. That the impost would draw a disproportionate supply from either
merchant or consumer.
2dly. That Rhode Island imports and consumes more of foreign articles
in proportion, than any other State.
3dly. That, from her maritime situation she is exposed to great
losses.
4thly. That the exclusive benefit of the impost should be carried to
account of the State.
5thly. That the impost will raise prices, and therefore manufactures
brought from the neighboring States will draw a revenue from Rhode
Island.
6thly. That duties imposed by the neighboring States may compel Rhode
Island to subsist by foreign articles.
7thly. That many men will be employed in the collection.
8thly. That it would be evaded by smuggling; and,
9thly. That the collection may be objectionable.
To each of these I will reply in their order.
1st. To determine whether the impost will act proportionably or not,
we must consider in what respect the proportion is to be taken. If it
be a proportion between two of the States, that will be considered
under the second head; if it be a proportion among the people of the
same State, it is only recurring to the question, whether the taxes on
consumption are useful; for so long as no man pays the tax, but he who
chooses to purchase the article, the disproportion, if any, is of his
own creating. The necessity of a revenue to a certain amount must be
admitted. Is it then wise to raise a part of it from the _consumption_
of foreign articles? I say the consumption, because the tax
undoubtedly falls on the consumer and not on the importer. If this be
not a wise tax, what shall we substitute? Articles of primary and
immediate necessity are made in the State of Rhode Island. Both food
and raiment can be had without crossing the Atlantic in search of
them. Every man, therefore, is at liberty to use foreign articles or
not. If he does use them the tax is voluntary, and therefore cannot be
considered as disproportionate, any more than for one man to wear silk
while another wears wool.
2dly. That Rhode Island consumes more foreign commodities in
proportion than any other State in the Union, cannot be admitted.
Rhode Island certainly makes many commodities, but the more southern
States are in the habit of importing everything.
3dly. That Rhode Island is, from its situation, liable to the unhappy
accidents of war is true; but this incidental evil, arising from an
advantageous position, cannot be adduced as a plea for exemption from
public burdens. New York has suffered, at least as much and as long.
4thly. That the exclusive benefits of an impost should be carried to
the State where it is collected, is a position unjust in itself, and
which would forever prevent any duties; wherefore it would cut off not
only one of the most productive, but one of the most useful branches
of revenue. Rhode Island, Pennsylvania and some other States carry on
the commerce of their neighbors as well as their own, from which they
derive great riches. The duties are always (like the risks and the
expenses) paid by the consumer; for unless this be so, no tolerable
reason can be assigned, why foreign commodities should be dearer in
war than in peace. If then a considerable duty were laid by the
commercial State, it would fall on its uncommercial neighbor. That
neighbor, therefore, would immediately take measures to carry on its
own commerce, and prohibit the bringing of articles from the
commercial State. Those measures would produce a repeal of the duty. I
take no notice here of the altercations which would arise; it is
sufficient to show, that the private view of revenue for the State
would be defeated.
5thly, and 6thly. These objections do not appear to me to apply,
because in the first place, I can hardly suppose the neighboring
States will ever think of laying duties on the produce, for if any of
them should, her citizens would be the sufferers. Secondly, if the
article of produce be left uncontrolled by the government every
individual will be a check on the avidity of his neighbors, and if by
this means a piece of American goods can be vended cheaper in Rhode
Island than a piece of foreign goods, the consumer in Rhode Island
will by the purchase of it save money to himself, and therefore to
the country. And as the duty is collected only on foreign goods he
will not pay the duty, and of course the duty on his State will be so
much the less.
7thly. The seventh objection will apply more strongly to almost any
other kind of tax, because this may be collected by a very small
number of men.
8thly. The eighth objection I cannot admit, because forming my opinion
of that State from what I conceive to be the character of the
gentleman who makes the objection, I cannot believe it to be valid.
Smuggling was formerly not disreputable because it was the evading of
laws, which were not made by proper authority, and therefore not
obligatory; but nothing can be more infamous than to defraud our own
government of so poor a pittance; and I trust, that if any individual
were inclined to do so, he would be detected by the first person who
saw him, and would be as much exposed to the resentment and contempt
of his fellow citizens as an informer would have been in the times
alluded to.
9thly. The last objection ought not to be made, because there is no
reason to suppose, that Congress would devise means to oppress their
fellow citizens. But it is one of our greatest misfortunes, that men
are apt to reason from one thing to another that is very dissimilar.
The parliament of England cared nothing about the consequences of laws
made for us, because they were not affected by them. This is always
the case under such circumstances, and forms one of the most powerful
arguments in favor of free governments. But how can it be supposed,
that a member of Congress who is liable to be recalled at a moment's
warning would join in measures which are oppressive to the people, and
which he must necessarily himself feel the weight of, without deriving
any advantage from them. For it is not here as in England, that there
is a King to buy votes for bad purposes. If the members of Congress be
seduced, it must be by the Congress, which is absurd. If indeed the
Congress were either an hereditary body, self-existent, or if they
were self-elected, there might be room for apprehension, but as they
are, there can be none.
Now, Sir, the state of things is shortly this. The United States are
deeply indebted to the people of America. They have called for
revenues to pay their debts in a course of years, being the only means
of reviving credit and lightening burdens. All the States consent but
Rhode Island, to whose citizens a very considerable part of this debt
is due. Of consequence the whole is suspended. The reasons assigned
are purely local, and I verily believe are founded on mistaken
principles. The revenue, however, if granted is insufficient. More
must be demanded; and consequently, as all taxes are unpleasant some
State will be found to oppose any which can be devised, on quite as
good ground as the present opposition. What then is the consequence?
I am, Sir, &c.
ROBERT MORRIS.
* * * * *
TO SIR GUY CARLETON.
Office of Finance, August 20th, 1782.
Sir,
I do myself the honor to enclose to your Excellency letters from the
masters of two flag ships, which have arrived in this port with
American prisoners. I have sent them in by Mr John Greene, one of the
persons that came in the Symmetry, who will bring such orders, as your
Excellency may think proper to transmit to those gentlemen. I have
further to mention, Sir, that I intend delivering to one of them such
British marine prisoners as may be in this place, or its vicinity,
when they depart, provided their receipt shall be deemed a proper
evidence of the delivery, on a settlement of the account hereafter. On
this point I shall be happy to learn your sentiments. It might have
been more proper to have addressed myself to Admiral Digby, especially
as Mr Greene carries the duplicates of a former letter to him. But as
the King's servants in England have placed the masters of these flags
under your Excellency's directions, I was led to conclude, that if the
concurrence of the Admiral should be necessary, you would take the
trouble of obtaining it.
I have the honor to be, with perfect respect, &c.
ROBERT MORRIS.
* * * * *
TO ALEXANDER HAMILTON.
Office of Finance, August 28th, 1782.
Sir,