which Congress have honored me, and my conviction of the necessity
that some _one_ person should endeavor to introduce method and economy
into the administration of affairs, have induced me, though with
reluctance, to accept that office. Mr Jay will receive by this
conveyance, and forward to you, copies of those resolutions and
letters which may be necessary to explain my appointment and powers.
I wish I could as readily effect, as I most ardently desire, the
accomplishment of all proper arrangements. Thoroughly convinced that
no country is truly independent, until, with her own credit and
resources, she is able to defend herself and correct her enemies, it
shall be my constant endeavor to establish our credit and draw out our
resources in such manner, that we may be little burdensome, and
essentially useful to our friends.
I am sure I need not mention to _you_ the importance of collecting a
revenue with ease, and expending it with economy. As little need I
detail the time, the authority, the ability, the favorable
circumstances, that must combine for these purposes. But I think that
I may assert, that the situation of a country just emerging from
dependence and struggling for existence, is peculiarly unfavorable;
and I may add, that this country, by relying too much on paper, is in
a condition of peculiar disorder and debility. To rescue and restore
her, is an object equal to my warmest wishes, though probably beyond
the stretch of my abilities.
Success will greatly depend on the pecuniary aid we may obtain from
abroad; because money is necessary to introduce economy, while, at the
same time, economy is necessary to obtain money; besides that a
greater plenty of solid circulating medium is required to support
those operations, which must give stability to our credit,
fruitfulness to our revenue, and activity to our operations. Among
those things, which, after the experience and example of other ages
and nations, I have been induced to adopt, is that of a national bank,
the plan of which I enclose. I mean to render this a principal pillar
of American credit, so as to obtain the money of individuals for the
benefit of the Union, and thereby bind those individuals more strongly
to the general cause by the ties of private interest. To the efficacy
of this plan, as well as to the establishment of a Mint, which would
also be of use, a considerable sum of money is necessary, and, indeed,
it is indispensably so for many other purposes.
Be not alarmed, Sir, from what I have said, with the apprehension
that I am about to direct solicitations to the Court of Versailles;
which, after the repeated favors they have conferred, must be
peculiarly disagreeable. On the contrary, as I am convinced that the
moneys of France will all be usefully employed in the vigorous
prosecution of the war, by her own fleets and armies, I lament every
sum which is diverted from them. Our necessities have indeed called
for her aid, and perhaps they may continue to do so. Those calls have
hitherto been favorably attended to, and the pressure of our
necessities has been generously alleviated; nor do I at all doubt that
future exigencies will excite the same dispositions in our favor, and
that those dispositions will be followed with correspondent effects.
But I again repeat my wish, at once to render America independent of,
and useful to her friends.
With these views, I have directed Mr Jay to ask a considerable sum
from the Court of Madrid, to be advanced us at the Havana, and brought
thence by us, if it cannot conveniently be landed here from Spanish
men-of-war.[34] I say _a considerable sum_, because, as I have
declared to him, I do not wish to labor under the weight of obligation
without deriving from it any real benefit; and because I consider the
advance of small sums rather as a temporary palliation than a radical
remedy. Our disorders are such, that the former can be of no use, and
it would be better to desist in a desultory defence, than to put on
the delusive appearances of a vigor we do not feel; for this lulls the
people into a dangerous security, and softens those hopes of the
enemy, which give duration and extent to the war. It is the disorder
of our finances, which have prevented us from a powerful co-operation
with our allies, and which have enabled the enemy to linger on our
coasts with the dregs of a force once formidable; and it is from this
cause that they have been permitted to extend the theatre, and
multiply the victims of their ambition.
America alone will not derive benefit from the advances which Spain
may make to her. All the associates in the war will feel the
_consequential_ advantages. The expense of the American war now hangs
a heavy weight about the neck of Britain, and enfeebles her on that
element, which she called her own. An increase of that expense, or the
loss of her posts here, must necessarily follow from additional
efforts on our part, and either of these must be a consequential
benefit to those who are opposed to her. France will derive a small
_immediate_ benefit from it, as she will thereby get more money here
for her bills of exchange, than she can at present procure. But it is
not so much from any advantage, which may be expected to that kingdom,
or from any motives of _interest_, as from the generosity and
magnanimity of the Prince, that we hope for support. I will not doubt
a moment, that at your instance, his Majesty will make pressing
representations in support of Mr Jay's application, and I hope that
the authority of so great a Sovereign, and the arguments of his able
Ministry, will shed auspicious influence on our negotiations at
Madrid.
From the best returns I have been able to collect, and which are in
some measure imperfect, from the confusions and disasters of the
Southern States, I find that there are about seven millions two
hundred thousand dollars due on certificates, which bear an interest
of six per cent, payable in France, at the rate of five livres for
every dollar. Many causes have conspired to depreciate the
certificates, notwithstanding the interest is so well secured, and has
been punctually paid. This depreciation is so great, that they are
daily offered for sale at a very considerable discount, which is
attended with two pernicious consequences; one, that a considerable
expense is unnecessarily incurred, and the other, that the public
credit is unnecessarily impaired. If I had the means, therefore, I
would remove this evil by purchasing in the certificates; and to
procure the means, I am to pray that you would state this matter fully
to the Ministers of his Most Christian Majesty. The interest being
guarantied by the Court of France, they now pay for this purpose, two
millions one hundred and sixty thousand livres annually; a sum, which
in less than ten years, would pay a debt of fifteen millions of livres
at five per cent interest. With fifteen millions of livres, however,
prudently managed, the whole of these certificates might be paid. I am
sure it is unnecessary to dwell on the advantages, which would result
from making such a loan for this purpose, and, I trust, that if this
matter is stated to M. Necker, that enlightened Minister will
co-operate in the plan, to the utmost of his ability. I again repeat,
that I do not wish to lay any burdens on France; but this proposal is
calculated to relieve us both; and, in any case, the expense to France
will be the same. Should it be adopted, I must request the earliest
notice, that my operations may commence; and, in any case, I hope that
secrecy will be observed, for the most evident reasons.
I am sorry to inform you, that we have as yet no satisfactory news of
the ship Lafayette; but, on the contrary, her long delay occasions the
most alarming apprehensions. If, as but too probable, that ship is
lost, you will more easily conceive than I can describe what will be
the situation of our troops next winter.
I could wish, as soon as possible, to have a state of all the public
accounts transmitted, to the end that moneys due to the United States
may be paid, and measures taken to provide for such sums as they stand
indebted in to others. Your Excellency will, I dare say, send them as
soon as may be convenient; and I hope the public affairs will
hereafter be conducted in such a manner as to give you much less of
that unnecessary trouble, which you have hitherto experienced, and
which could not but have harassed you exceedingly, and, perhaps, taken
up time, which would otherwise have been devoted to more important
objects.
I shall, probably, have frequent occasion to address you, and shall
always be happy to hear from you; but the mischiefs, which arise from
having letters intercepted, are great and alarming. I have, therefore,
enclosed you a cypher, and in the duplicate of my letters, I shall
enclose another. If both arrive, you will use one, and, in case of
your absence, leave the other with such person as may supply your
place. Let me know, however, which cypher you use.
The bearer of this letter, Major Franks, formerly an Aid-de-camp to
General Arnold, and honorably acquitted of all connexion with him,
after a full and impartial inquiry, will be able to give you our
public news more particularly than I could relate them. He sails hence
for Cadiz, and on his arrival will proceed to Madrid, where having
delivered my letters to Mr Jay, he will take his orders for you. He
will then wait your orders, and I hope, will soon after meet a safe
opportunity of coming to America.
With the most perfect esteem and regard, I have the honor to be, &c.
ROBERT MORRIS.
FOOTNOTES:
[34] See a letter from Mr Morris, in _John Jay's Correspondence_, Vol.
VII. p. 421.
* * * * *
TO B. FRANKLIN.
Philadelphia, July 14th, 1781.
Dear Sir,
If Major Franks had departed yesterday, as was expected, he would have
left the enclosed cypher behind. It was supposed to have been with the
plans of the intended bank, but was left out by accident. I wish you
would, when leisure and opportunity will permit, converse with some of
the eminent bankers in Paris on this plan, and ask whether a
correspondence and connexion with the directors will be agreeable, and
whether they would establish a credit for this bank, and to what
amount, to be replaced again by remittances in other bills within such
time as they may limit. Or, if they decline giving such credit, then
the terms on which they will receive remittances and pay drafts of the
bank.
An American bank must deal largely in bills of exchange. It will
thereby rule the price of bills so as to keep it pretty steady, by
passing most of the bills drawn on the continent through their
channel, so as to leave a certain moderate profit. And the use of a
credit in Europe will be, to have paid for their honor such bills as
may be protested on account of the drawers; by which means the bank
will secure the damages of twenty per cent, and pay only interest for
advance and commission for negotiating. Occasion may also offer, when
the bank, by drawing on Europe, shall get a high price for bills, and
in a few months replace them much cheaper.
I do not wish to give you trouble on this occasion; but, if
opportunities offer, you can mention the subject, and if any of the
bankers will write me proposals, I will lay them before the directors.
You will tell them, that although the very moderate sum of four
hundred thousand dollars is proposed as the first capital, I intend to
increase it gradually to ten times that sum. The only difficulty is to
get it into action now that people have but little money and less
confidence. I should be glad to see your name in the list of
subscribers to an institution, that I believe will be permanent.
I ever am, Dear Sir, yours, &c.
ROBERT MORRIS.
* * * * *
TO THE GOVERNOR OF HAVANA.
Philadelphia, July 17th, 1781.
Sir,
The favorable attention shown to me by your Excellency in my private
character, has excited those sentiments of esteem and respect, which
now impel me to ask your assistance for my country.
The United States of North America, are at the present moment,
possessed of more strength in men, arms, and ammunition, than when
they first ventured to wage war with Great Britain. The means of
subsistence are abundantly equal to our own wants, and will
essentially contribute to the relief of our friends. A variety of
causes, too numerous to be detailed, in the compass of a letter, have
combined to destroy the credit of that paper money, which has enabled
us hitherto to support the war. It has therefore become necessary to
provide the means for paying the expenses to be incurred hereafter.
Our people are not yet inured to taxation, neither has the revenue,
which this country is capable of affording, been drawn fairly or fully
into use. The derangement of our credit and finances, consequent upon
the loss of faith in our paper, rendered it necessary for Congress to
create a Superintendent of the Finances of the United States, in
order, that he might regulate and settle the present debts, point out
new funds, with the best means of collecting them, and superintend the
public expenditures, so as to prevent as much as possible all excess
or abuse. This arduous task is assigned to me, by a unanimous choice
of that honorable body; and nothing could have induced me to undertake
it, but my perfect conviction, that it is necessary that some person
should undertake the work of reformation and economy. I have engaged
in this business with the sole view of saving my country, and
therefore think myself entitled to seek support from all who are
really friends to her independency, and particularly from those
nations, which have become parties in the war.
I have commenced my administration with a proposal to establish a
National Bank; the plan of which I take the liberty to enclose. The
subscriptions to it are going on, and I expect the very moderate sum
therein proposed will soon be completed. When that is done, the
directors will be chosen, incorporated, and proceed on their business.
As the bank notes are intended to be made use of by government in
anticipation of the revenues of this country, you will easily
perceive, that the sum proposed is far short of the object, which it
is intended to accomplish. My present pursuit, therefore, is to obtain
such additional sums as will, when deposited in the bank, not only
facilitate the anticipations above mentioned, but induce further
subscriptions among our own countrymen. For when they see and feel the
use of an institution, which they are yet unacquainted with, they will
cheerfully and liberally support it.
It is to your Excellency that I apply for foreign aid. The vicinity of
your situation, the frequent intercourse between your port and this,
and your ability to comply with what I shall request, all point out
the propriety of that application. Your friendly disposition towards
these United States, and above all your strong attachment to the
interests of your own country, will dispose you to yield me every
assistance in your power. The United States have already received very
considerable aid from the Court of Madrid. Much more, however is
expected,[35] and in time to come these services will be repaid with
honor, as they now are acknowledged with gratitude.
Our distresses induced Congress to order certain bills of exchange to
be drawn on their Ministers at the Courts of Versailles and Madrid.
The former have been all negotiated and paid off by the assistance of
that Court. Many of the latter have also been negotiated, and those
that have appeared for payment have been discharged. There is every
reason to believe, that this would still happen; but we learn that the
advance of money in Europe is rendered inconvenient during the war,
by the impediments, which it occasions to the usual course of
remittances from his Majesty's American territories. We have desisted,
therefore, from the further sale of those bills, especially as we have
reason to expect, that in consequence of measures adopted here, Mr Jay
will obtain from your country a much larger sum than we had before
asked for; and that the greater part, if not the whole of it, will be
paid to us at your port. However this may be, my present view is to
obtain from Havana, as expeditiously as possible, four hundred
thousand Mexican dollars, in order to deposit them in the bank, and
thereby doubling the capital, give its operations such force as will
draw the attention of our own citizens, and induce them to afford it
such assistance as will reduce our necessities, and place us in a
situation to be less troublesome to our allies and friends in the
common cause.
His Excellency the Chevalier de la Luzerne, Minister of France at this
place, in consequence of orders from his Court, has authorised me to
draw bills of exchange on Paris to a very considerable amount; and
being sensible of the propriety of my proceedings, he will give you
assurances, that they shall be punctually paid. I transmit a bill for
five hundred thousand livres to Robert Smith, now appointed agent for
these United States at your port, in order that he may negotiate it,
and ship the money back to my address. Should it in any manner promote
the interest of your Court he will certainly give your Excellency a
preference in the purchase; and I am confident, that if this should
not be convenient to you, you will countenance and promote his
negotiations with private persons. I have also transmitted to Mr Smith
certain bills, drawn some time past by order of Congress, on his
Excellency John Jay, to the amount of one hundred and twenty thousand,
three hundred and eightyone dollars. I am to request, and have strong
hopes, that when Mr Smith shall have deposited these bills with you,
your Excellency will advance that sum, so that he may immediately ship
it to my address.
We are convinced that these bills, if sent forward, would have been
paid by your Court; but as such a negotiation would bring no money
into the treasury, I propose that you keep them in your possession
until the pleasure of the Court shall be known. I will write very
fully to Mr Jay on this subject, and obtain the earliest information.
But lest the Court should not choose that these bills be finally
accepted by you in discharge of the moneys advanced on them, I have
empowered Mr Smith for your perfect security to enter into conditional
stipulations to repay your Excellency that money by a delivery of
flour to the amount, at such price as you and he may agree for; the
payment to commence as soon after the pleasure of the Court shall be
known as circumstances will admit.
I hope, Sir, you will find it agreeable to your inclinations, and
perfectly consistent with the duties of your station to gratify my
desires. They are very moderate considering the necessities of this
country, and your ability to minister to its relief. Besides, your
Excellency's good sense will readily perceive, that money granted to
invigorate the operations of America will weaken and distress the
common enemy much more than the same sums expended in Europe, because
the enemy must prosecute the war here at more than four times the
expense at which it must be carried on there.
Assuring myself of assistance from your Excellency I have ordered one
of the continental frigates to proceed with these despatches for
Havana. She will take with her some flour, which I have ordered
returns for in dollars.
There are two most cogent reasons why this frigate should be
despatched instantly from your port with the money. The first is,
because we are much in want of it; and the second is, to prevent our
enemies from the possibility of receiving any advice of her. We have
so contrived things here, that everybody believes she is going to join
the French fleet at Rhode Island, and to carry the flour for their
use.
On the whole, I most earnestly entreat your Excellency, that if it be
at all convenient and consistent with your duty, you will advance the
whole of the four hundred thousand dollars in question to Mr Smith, so
that the frigate may immediately return.
I am sensible that there are certain duties payable to his Majesty on
the exportation of money from your port; but as this which I apply
for, is to be expended in carrying on the war against his Majesty's
enemies, I hope it may be dispensed with; if not, our Minister at
Madrid will be directed to make application to the Court on that
subject, so that the duty being charged to us in the first instance,
may, if not remitted, be added to the general sum. The same
observations will apply to the flour on board this frigate, which is
also public property.
I hope it is not necessary to add anything more to induce a full
compliance with my requests. But his Excellency the Chevalier de la
Luzerne, Minister of France, and Don Francisco Rendon, your own Agent
here, will also write you on the subject of this application.
I have the honor to remain, with sentiments of the highest esteem and
respect, &c.[36]
ROBERT MORRIS.
FOOTNOTES:
[35] This anticipation was never realized, as the whole amount of the
Spanish loan to the United States during the war, was no more than one
hundred and fifty thousand dollars.
[36] For several letters from Mr Morris to Mr Jay, on the subject
of loans in Spain, and the National Bank, see _John Jay's
Correspondence_, Vol. VII. pp. 421-449.
* * * * *
TO ROBERT SMITH, AGENT FOR THE UNITED STATES IN CUBA.
Philadelphia, July 17th, 1781.
Sir,
Upon a proper representation of your character, situation, and
attachments to your country and its cause, the Congress of the United
States of America have thought proper to appoint you their Agent at
the port, of Havana and Island of Cuba. I take much pleasure in
transmitting your commission, which you will find enclosed herein;
because my knowledge of you leads me to expert every exertion, which
your situation and the circumstances attending it will admit of, in
favor of your country.
You will not find any salary annexed to your appointment for this
plain reason, that we cannot afford any. It is our present business to
reduce salaries heretofore given, and not to create new ones. This
appointment, however, may be attended with pecuniary advantages,
because a public character may, and no doubt will, point you out to
American merchants as the proper person to intrust with their
commercial affairs. Continental prizes and other objects may
occasionally turn up, which will leave a reasonable commission behind;
and you will have the pleasure of serving Congress when necessary, and
the citizens and commerce of your country, as often as opportunities
for so doing may occur.
I shall now put your talents to the proof. You will find enclosed a
letter I have written for his Excellency Governor Navarro (or should
he be gone, for his successor) which will unfold to you very fully my
intentions. You will find enclosed in it for him, as in this letter
for you, the plan of a National Bank, which I have proposed to
establish for many valuable purposes. You will observe that the sum
proposed as a capital is far short of what it ought to be; but I was
afraid of attempting too much at first, and must now endeavor to
increase it by other means. If any of your acquaintances in the Havana
have a mind to speculate in the American funds, I think they cannot
place their money on a more secure or profitable establishment. This
Bank will, I believe, exist for ages to come; and I am persuaded the
annual dividends will not be less than from eight to ten per cent.
They may also have the honor and pleasure of seeing their names
enrolled among the first promoters of this useful institution, on
which the salvation of our country in some measure depends. Should any
of them incline to subscribe, they must send hither money at their own
risk; consigning it to whomsoever they please, with power to act for
them. I hope you will promote this business, and in order that you may
be able to show the profits arising from it, I am to observe, that
when once, by punctual payment, the notes of the bank have obtained
full credit, the sum in specie, which will be deposited, will be such,
that the bank will have the interest of a stock two or three times
larger than that which it really possesses. Should M. Miralles, or any
of the family be so inclined, I will put any part of their money into
the bank, which they may think proper.