presume ways and means for defraying the expenses of the present war
have a capital place. You will therefore give the following thoughts
the weight which they deserve. In the first place, to emit more bills
will be rather dangerous; for money, or whatever passes for such, when
it exceeds the amount of the commerce of a state, must lose its value;
and the present circumscribed state of the American commerce, is
perhaps within the amount of your emissions already made. Your bills,
therefore, must be borrowed of individuals by the public at interest,
or those already emitted paid off by taxes and new emissions. Some
Colonies may now be content with a tax, but it is most probably quite
out of the power of some, and a measure rather impolitic in a majority
of the Colonies or States, _durante bello_.
To effect any considerable loan in Europe is perhaps difficult. It has
not been tried, and on the probability of succeeding in this I will
give my sentiments hereafter. It is obvious, that let the loan be made
when it will, it must have a day fixed for payment, and respect to
some fund appropriated to that purpose. The relying on future taxes is
holding up to the people a succession of distresses and burthens which
are not to cease even with the war itself, whereas could they have a
prospect of paying the expenses of the war at the close of it, and
enjoying the remainder of their fortunes clear of incumberance, it
must greatly encourage and animate both the public and private spirit
in pushing it on with vigor. A loan of six or eight millions, or a
debt of that amount, will probably enable you to finish the war. This
I am confident may be negotiated on terms, which I will propose
hereafter, but previously let it be attended to, that the present
contest has engaged the attention of all Europe, and more, it will
eventually interest all Europe in favor of the United States, the
Russians in the north and Portugal in the south, excepted; I make no
consideration of the little mercenary electorates in my calculation.
The mercantile part of the other powers are convinced, where their
interest appears so evidently engaged. The political part are sensible
of the importance of enlarging their own naval concerns and force, and
of checking that of Great Britain. The good and wise part, the lovers
of liberty and human happiness, look forward to the establishment of
American freedom and independence as an event, which will secure to
them and their descendants an asylum from the effects and violence of
despotic power, daily gaining ground in every part of Europe. From
those and other considerations, on which I need not be minute,
emigrations from Europe will be prodigious, immediately on the
establishment of American Independency. The consequence of this must
be the rise of the lands already settled, and a demand for new or
uncultivated land; on this demand I conceive a certain fund may now be
fixed. You may smile, and recollect the sale of the bearskin in the
fable, but at the same time you must be sensible that your wants are
real, and if others can be induced to relieve them, it is indifferent
to you whether they have a consideration in hand or in prospect.
I trace the river Ohio from its junction to its head, thence north to
Lake Erie on the south and west of that lake to Fort Detroit, which is
in the latitude of Boston, thence a west course to the Mississippi,
and return to the place of my departure. These three lines of near one
thousand miles each, include an immense territory in a fine climate,
well watered, and by accounts exceedingly fertile; it is not inhabited
by any Europeans of consequence, and the tribes of Indians are
inconsiderable, and will decrease faster than the lands can possibly
be demanded for cultivation. To this I ask your attention as a
resource amply adequate, under proper regulations, for defraying the
whole expense of the war, and the sums necessary to be given the
Indians in purchase of the native right. But to give this land value,
inhabitants are necessary. I therefore propose, in the first place,
that a grant be made of a tract of land at the mouth of the Ohio,
between that and the Mississippi, equal to two hundred miles square,
to a company formed indiscriminately of Europeans and Americans, which
company should form a distinct state, confederated with and under the
general regulations of the United States General of America. That the
Congress of the United States shall, out of such grant, reserve the
defraying or discharging of the public debts or expenses; one fifth
part of all the lands, mines, &c. within said tract, to be disposed
of by the Congress, in such manner as good policy and the public
exigencies may dictate, the said one fifth to be sequestered out of
every grant or settlement made by the company, of equal goodness with
the rest of such grant or settlement. The company on their part shall
engage to have, in seven years after the passing such grant ----
thousand families settled on said grant, and civil government
regulated and supported on free and liberal principles, taking therein
the advice of the honorable Congress of the United States. They shall,
also, from and after their having one thousand families as
abovementioned, contribute their proportion of the public expenses of
the Continent, or United States, according to the number of their
inhabitants, and shall be entitled to a voice in Congress, as soon as
they are called on thus to contribute. The company shall at all times
have the preference of purchasing the Continental or common interest
thus reserved, when it shall be offered for sale. The company shall
consist, on giving the patent or grant, of at least one hundred
persons.
These are the outlines of a proposed grant, which you see contains
more than 25,000,000 acres of land, the one fifth of which, if a
settlement is carried on vigorously, will soon be of prodigious value.
At this time a company might be formed in France, Germany, &c. who
would form a stock of one hundred thousand pounds sterling, to defray
the expense of this settlement. By such a step, you, in the first
place, extend the circle of your connexion and influence. You increase
the number of your inhabitants, proportionably lessen the common
expenses and have in the reserve a fund for public exigencies.
Further, as this company would be in a great degree commercial, the
establishing commerce at the junction of these large rivers, would
immediately give a value to all the lands situate on or near them
within the above extensive description, and future grants might admit
of larger reserves, amply sufficient for defraying the expenses of the
war, and possibly for establishing funds for other important purposes.
It may be objected that this is not a favorable time for such a
measure. I reply it is the most favorable that can happen. You want
money, and by holding up thus early to view a certain fund on which to
raise it, even the most certain in the world, that of land security,
you may obtain the loan and engage the monied interest of Europe in
your favor. I have spoken with many persons of good sense on this
subject, which makes me the more sanguine.
As to a loan, I will now dismiss this scheme to speak of that, only
adding, or rather repeating what I have in a former letter written,
that a large and generous allowance ought immediately to be made to
the officers and soldiers serving in the present war, in which regard
should be had to the wounded, the widows or children of those that
fall, and to the term or number of campaigns each one serves. This
will make the army consist literally of a set of men fighting for
freehold, and it will be a great encouragement to foreigners, with
whom five hundred or a thousand acres of land has a great sound.
It has been a question with me at times, whether, if our commerce were
open and protected, the colonies would be wise in negotiating a loan.
But on considering, that before this war, the imports of the Colonies
just about balanced their exports, I cannot think it possible, with
the most rigid economy, supposing exports as large as formerly, to
make a lessening of consumption equal to the amount of the expenses
of the war; and consequently a debt must be contracted by the public
somewhere. The question which naturally arises is, whether it be most
prudent to contract this debt at home or abroad. To me it admits of no
doubt, that the latter is to be preferred on every account. If you can
establish a credit and pay your interest punctually, the rate of
interest will be less by two or three per cent in Europe than in
America; you will thereby engage foreigners by the strongest tie, that
of their immediate interest, to support your cause. There are other
obvious reasons for preferring the latter mode.
The next question is, where can you borrow, and what security can you
offer? Holland is at present the centre of money and credit for
Europe, and every nation is more or less indebted to her collectively
to such an amount, that could the nations in Europe at once pay the
whole of their debts to this _Republic of Mammon_, it would as
effectually ruin it, as the breaking in of the sea through their
dykes. Would you know the credit and situation of the affairs of the
different kingdoms, consult the books of the Dutch banks.
This kingdom (France) has been in bad credit, from the villainy of a
late Comptroller General, as it is said, one Abbe Terrai, against
whose administration the severest things have been uttered and
written. He was succeeded by the much esteemed Mons. Turgot, and
stocks rose, and a commission was given to a banker (a correspondent
of mine in Amsterdam) to negotiate a loan, but the dismission of Mons.
Turgot, and the indifferent opinion which monied men at least had of
his successor, Mons. Clugny, prevented the loan, and lowered the
stocks. Mons. Clugny died last week, and is succeeded ostensibly by
one Monsieur Tabourou; I say ostensibly, for M. Necker, a noted
Protestant banker, is joined with him as Intendant of the Treasury.
This raised stocks immediately, and I am told they have already risen
ten per cent. This is the most politic appointment that could have
been made, and it deserves our notice, that where a man has it in his
power to be of public service, his principles of religion are not a
sufficient obstacle to hinder his promotion even in France. This will
probably enable this kingdom to borrow money, which from all
appearances will be soon wanted. Spain, from the punctuality of its
payments of interest, and its well known treasures, is in high credit
in Holland. Denmark borrows at four per cent, Sweden at the same; the
emperor of Germany, from the security of his hereditary dominions, and
the empress of Russia, from her having lately paid part of the large
sum she borrowed in the Turkish wars, are both of them in good credit.
The credit of Great Britain, though it has not fallen, yet it is in a
critical situation with those foreseeing people, who, on receiving the
news of the action on Long Island, which raised stocks a trifle in
England, began immediately to sell out.
Not a power in Europe, the king of Prussia excepted, can go to war
without borrowing money of Holland to a greater or less amount, and
whilst so many borrowers are in its neighborhood, whose estates, as I
may say, are settled and known, it is not to be expected Holland will
be fond of lending money to the United States of North America, though
we should offer higher interest. To offer a large interest might be
tempting, but it would be very ruinous to us, and I conceive it will
never be thought prudent to permit higher than five per cent interest
in the States of North America, and this is but one per cent more than
is given in Europe.
This view leads me again to reflect, as I constantly do, with the
utmost grief, on the unaccountable delay of proper authority
announcing the Independency of the United States, and proposing terms
of alliance and friendship with France and Spain. This I am confident
would at once remove this and many other difficulties; would put our
affairs on the most established and respectable footing, and oblige
Great Britain herself to acknowledge our Independency and court our
friendship. On such powers being received and presented, these
kingdoms, I have no doubt, would become our guaranty for the money we
want, and the produce of our country will be wanted for the interest,
and even the principal, as fast as we can transport it hither. But as
no such powers and instructions are received, and as it is possible
you mean not to send any, I will mention a few thoughts on another
plan.
You are not in want of money, but the effects of money in the
manufactures of Europe. For these the Colonies or United States must
now have a demand to the amount of some millions sterling. These
manufactures are to be had principally in France and Holland. As to
the latter, they have not at present, and are resolved never to have,
any peculiar connexion with, or friendship for, any power, further
than their commerce is served by it, but that is not the ruling
passion of the former. The desire of humbling their old rival and
hereditary enemy, and aggrandizing their monarchy, are predominant,
and never was there a more favorable opportunity than the present,--so
favorable is it, that were the funds of this kingdom in a little
better situation, and were they confident that the United States would
abide by their Independency, not a moment's time would be lost in
declaring war, even though you had made no application direct.
Whatever part this kingdom takes will be pursued by the Court of
Madrid. Would this Court give a credit even to private merchants, it
would answer the same purpose as a loan; as for instance, the United
Colonies want about three millions value of manufactures annually (it
has heretofore been a little more) from Europe. If this Court will
give a credit to that amount to any body of men in the kingdom, that
company may engage to pay the Court the same amount in Continental
bills within a limited time, this company may send to America supplies
to that amount, as the Congress shall order, such goods as are wanted
either for the army or navy; the Congress will instantly deposit their
bills for the amount; the residue may be sold at a stated advance for
Continental bills, the whole of the amount immediately put on interest
to this Court; this will be the calling in of such an amount of the
bills, and of course give the greater currency to the whole. Meantime,
this Court must become interested to have the commerce free, by which
alone remittances can be made. This is but a sudden thought,
recommended to you for consideration, if deemed worthy. That something
may be effected in this way I can have no doubt, while I have this
most unequivocal evidence. I am now credited to the amount of all the
supplies for thirty thousand men, a train of artillery, amounting to
more than two hundred pieces of brass cannon, ammunition, &c. &c.
which must be of near half a million sterling, _not ostensibly by the
Court, but by a private company_. At the same time other companies, as
well as individuals, after offering any loan or credit I should ask,
always brought in sooner or later the condition of having my bills
endorsed by some banker or person of credit; where you are sensible in
my situation the affair ended; though in several instances I had the
most flattering encouragement, and expected most assuredly no security
would be required; but that this particular house should be able and
willing to advance this prodigious sum at once, and without security,
is no way surprising, but perfectly consistent with what I have all
along asserted.
The most effectual card now played by the British Ambassador is,
asserting that an accommodation will soon take place, and by some
means or other conjecturing my want of powers by my not appearing at
Court, he is bold in this assertion, and I find it the greatest
difficulty I have to encounter. But I will not enter on a subject,
which has well nigh distracted me, and embarrassed and disheartened in
a greater or less degree every friend of America. The late conduct of
the Court of Spain respecting Captain Lee, whose case I mentioned
before, is a striking proof of what I have so positively asserted of
the good disposition of both these Courts. They dismissed the
complaint against him, afforded him protection, with assurances of
every assistance he might need, declaring publicly that their ports
were equally free for Americans as for Britons. I have besides these
overt acts still more convincing proofs, that the moment your
application is made every thing will be set in proper motion.
I now discuss a subject which has given, and still continues to give
me as much anxiety as I can struggle with, and mention another, a
little new but indeed somewhat connected with it; it is the equipping
of a number of American ships of war in the ports of France.
Considering the price of duck, cordage, ordnance, and other military
stores in America, they may be built much cheaper here. This is not
the sole advantage, they may carry over stores of every kind in
safety, as being French bottoms, ostensibly at least, all the brave
and ingenious in the Marine Department in this kingdom would become
adventurers in person, or in purse and influence in such a scheme; and
I speak on good grounds, when I say, that in three months after
receiving your orders I can have ten ships of at least thirty six guns
each, at your service, independent of assistance immediately from
Government; so much attention is paid to the American cause by all
persons of consequence in this kingdom. The honorable Congress must I
conceive either continue emitting bills or borrow money, and I submit
whether it be not better to borrow of foreign states than individuals,
in the present situation of American affairs; I am convinced you may
borrow five or six millions of Holland, on France becoming your
security. This I am confident may be obtained on application to this
Court and Spain, and that on these principles they can by no means be
willing to permit the Colonies to return to their former subjection to
Great Britain, armed as both countries are. Their possessions in
America must lie at the mercy of Great Britain, on such an event as a
reconciliation with the Colonies. The Colonies being in want of the
manufactures of Europe, of this kingdom in particular, this sum would,
a principal part of it, rest in France and give a great spring to
their manufactures, and afford them the advantage of anticipating
others in American commerce. These are important objects, and I have
no doubt would be considered of consequence sufficient for them to
risk such a credit. Rich individuals offer to supply any quantity of
goods or stores on such security, and I believe the latter would do
considerable, were they only assured of five per cent interest on
their debts after they become due. But I submit the whole to the
mature consideration of the honorable Congress, and am, &c.
SILAS DEANE.
* * * * *
TO THE COMMITTEE OF SECRET CORRESPONDENCE.
Paris, 3d December, 1776.
Gentlemen,
My letters from Bordeaux and since, to which I have received no reply,
will give you my situation, but lest some of them fail, I will briefly
in this give you the history of my proceedings. Immediately on my
arrival, I sent forward your bills, a large part of which were
protested, and intelligence arriving of the loss of Canada, and that
Carleton was even on the frontiers of the Colonies, and at the same
time the formidable armament gone and going over, made every one here
give up the Colonies as subdued. To have tried for a credit under such
circumstances would have been worse than useless; it would have been
mortifying, as a refusal must have been the consequence. Mr Delap
generously offered to advance five or six thousand pounds, but when I
considered it was already more than four months since you began to
prepare for remitting, and that next to nothing was received, I really
found myself embarrassed, and hoping every day for some relief, I
suspended engaging, and came up to Paris, having previously sent Mr
Morris's letter to his different correspondents, not one of which
appeared inclinable to be concerned in a credit.
I sent ---- to procure the goods in Amsterdam, if to be had, but found
our credit worse there than in France. A gentleman here offered me a
credit for a million of livres, but it was, when explained, on the
following conditions. I must produce direct authority from the
Congress, with their promise of interest; all American vessels must be
sent to his address; and until this could be secured him I must
provide a credit, or in other words a security in Europe. Here you are
sensible my negotiation ended. I then contracted for the supplies of
the army, and crowded into the contract as large a proportion of
woollens as I well could, sensible that with them you might do
something, and hoping your remittances might still arrive, or some
intelligence of the situation of your affairs, for I thought I judged
rightly, that if in six or seven months you were unable to send out
one third the remittances, the returns must be equally difficult. On
this ground I have been anxiously waiting to hear something from you.
Meantime I shipped forty tons of saltpetre, two hundred thousand
pounds of powder, via Martinique, one hundred barrels via Amsterdam.
The late affairs at Long Island, of which we had intelligence in
October, and the burning of New York, the report of Carleton's having
crossed the lakes, and that you were negotiating, has absolutely
ruined our credit with the greater part of individuals; and finding so
little prospect of completing the Indian goods, I have attended the
closer to despatch the supplies for the army, for which I had obtained
a credit ostensibly from a private person, but really from a higher
source. Meantime the monies remitted are in Mr Delap's hands, except
what I have drawn out for my private expenses, for payment of the
saltpetre, for the fitting out of Captain Morgan, and for the
equipment of certain officers going to America. For the 200,000 weight
of powder Mr Delap is my surety, consequently should he receive
nothing more from you he will have no considerable balance in his
hands. Could I have received but one half the amount in any season, I
would have ventured on the goods long before this, but to what
purpose would it have been, could I have been credited the amount, if
you were unable to remit? The same obstruction must subsist against
their arrival. I am however at last promised the goods on credit by
the same way as the stores have been procured, and hope to ship them
this month; but some of the articles are not manufactured any where in
Europe except Great Britain, and others must be substituted in the
best manner I can.
I have written to Mr Delap to send you his account, also to send the
particulars to me, which I will transmit as soon as received. The
goods may be expected in the month of February; meantime I pray you,
not on this account only, but on others, to exert yourselves in
remitting so much as to support the credit of the Continent, for which
I am now engaged to a very great amount. Tobacco, rice, flour, indigo,
peltry, oil, whale fins, flaxseed, spermaceti, masts, spars, &c. are
in good demand. Tobacco at 9 to 10 sous per lb. and rising, free of
duty or expense, save commission. Rice 30 livres per cwt. Flour 22 to
24 livres.
I am, most respectfully, &c.
SILAS DEANE.
_P. S._ When I say tobacco is free of duty, I mean if sold to the
Farmers-General directly; on other conditions it is inadmissible at
any rate.
* * * * *
TO JOHN JAY.
Paris, 3d December, 1776.
Dear Jay,