operation's for the present campaign, before the arrival of Mr
Laurens, 2,500,000 of it went in the same ship with him in cash;
stores equivalent to 2,200,000 more of it were ordered by him, and are
shipped; 1,500,000 were sent to Holland, to go in the ship commanded
by Commodore Gillon. Add to this, that Captain Jackson, by his orders,
purchased clothing and stores in Holland, to the value of about
£50,000 sterling, for which he has drawn bills on me, which bills I
accepted, and also agreed to pay those drawn on Messrs Laurens, Jay,
and Adams; expecting aid from a projected loan of 10,000,000 of livres
for our use in Holland. But this loan meeting with unforeseen
difficulties, and its success uncertain, I have found myself obliged
to stop the money in Holland, in order to be able to save the honor of
the Congress drafts, and to comply with my engagements. By these means
you have really at present no funds here to draw upon. I hope,
however, that Messrs Couteulx, & Co. will be enabled to honor your
drafts; but I trust in your prudence that you will draw no more till
you have advice of funds provided. And as the laying out so much money
in Holland instead of France is disapproved here, and the payment
will, therefore, not be provided for, I must earnestly request your
aid in remitting that sum to me before December next, when my
acceptances will become due, otherwise I shall be ruined with the
American credit in Europe.
With regard to the wealth and credit of the House of Le Couteulx, &
Co. I have never heard it in question. But as Mr Ferdinand Grand,
banker at Paris, and his broker, Sir George Grand, banker in Holland,
have been our zealous and firm friends ever since our arrival in
France, have aided us greatly by their personal interest and
solicitations, and have often been six or seven hundred thousand
livres in advance for us, and are houses of unquestionable solidity, I
cannot but be concerned at any step for taking our business out of
their hands, and wish your future bills may be drawn on Ferdinand
Grand, for I think it concerns our public reputation, to preserve the
character of gratitude, as well as that of honesty and justice. The
commission hitherto charged to us by Mr Grand for receiving and paying
our money is a half per cent, which, considering the trouble given by
the vast number of small drafts for interest of the loans, appears to
me a moderate consideration.
With great and sincere esteem, I have the honor to be, Dear Sir, &c.
B. FRANKLIN.
* * * * *
TO THE GOVERNORS OF MASSACHUSETTS, RHODE ISLAND, NEW YORK, DELAWARE,
MARYLAND, AND NORTH CAROLINA.
Philadelphia, July 27th, 1781.
Sir,
I find upon examination, that the recommendation of Congress of the 3d
of February last, for laying an impost of five per cent on goods
imported, and a like impost of five per cent on prizes and prize
goods, has not been complied with by your State.
The object which Congress had in view when they issued this
recommendation was of the utmost importance, and every day gives it an
additional weight and magnitude. Whether these States are able to
support the annual expenses of the war by their annual revenue, and
whether it would be prudent and wise to draw forth such revenue, are
questions which may hereafter be agitated, considered, and answered.
For the present it is sufficient to observe, that no methods have
hitherto been adopted to produce a revenue by any means adequate to
the current expenses. The public debt, therefore, is large and
increasing. The faith of the United States is pledged to the public
creditors. At every new loan it must be pledged anew, and an appeal is
now made to the States individually, to support the public faith so
solemnly pledged. If they do, it is possible that public credit may be
restored, if not our enemies will draw from thence strong arguments in
favor of what they have so often asserted, that we are unworthy of
confidence, that our union is a rope of sand, that the people are
weary of Congress, and that the respective States are determined to
reject its authority. I fear that a mere verbal contradiction of these
assertions will have but little effect. No words will induce men to
risk their property upon the security of a nominal union. Your
Excellency will be able at once to determine whether that union is
more than nominal, in which any part shall refuse to be bound for the
debts of the whole, or to contribute to the general defence. I must be
permitted, however, to observe, that in matters of public credit long
delay is equivalent to direct refusal.
Despotic governments are in war superior to others by the union of
efforts, the secrecy of operations, and the rapidity with which every
wheel may be moved by one sovereign will. This superiority, however,
is amply compensated to free governments by the ardent attachment of
their citizens, and the general confidence, which enables them to make
exertions beyond their force, and expend in one year the revenues of
many. A single view of our enemy, in the unequal contest she now
carries on, will demonstrate these advantages more clearly than any
arguments. The credit of Great Britain is not only her chief, but it
is almost her only support. Inferior in everything else to the
associates combined against her, she still makes head everywhere, and
balances the opposition through the four quarters of the globe. While
we feel the force of these last struggling of her ambition, we must
admire the source from whence they flow. Admiring, we should endeavor
to imitate, and in order to succeed, we need only to make the attempt.
There was a time when public confidence was higher in America than in
any other country. Hence the existence of that paper, which bore us
through the conflict of five years' hostility. In the moment when no
others dared oppose Great Britain in her career towards universal
empire, we met her ambition with our fortitude, encountered her
tyranny with our virtue, and opposed her credit with our own. We may
perceive what our credit would have done, had it been supported by
revenue, from what it has already effected without that support. And
we have no reason to doubt but that it may be restored, when we
reflect on the fate which paper currencies have formerly sustained.
The appeal, as I have already had the honor to observe, is made by
Congress to the several States. Some of them have answered by passing
the laws required, others are silent. Whence this silence proceeds, I
confess myself at a loss to determine. Some reasons, indeed, I have
heard assigned by individuals in conversation, but I cannot conceive
that they should have weighed with the Legislatures. Indeed I can
hardly conceive how any reasons can have weighed against a matter of
such importance as the keeping public faith inviolate.
I have heard it said, that commerce will not bear a five per cent
duty. Those who make such assertions must be very little acquainted
with the subject. The articles of commerce are either such as people
want, or such as they do not want. If they be such as people want,
they must be purchased at the price for which they can be had; and the
duty being on all, gives to no seller any advantage over another. If,
on the contrary, the article be such as people do not want, they must
either increase their industry so as to afford the use of it with the
duty, or else they must dispense with that use. In the former case,
the commerce is just where it was, and in the latter case the people
consume less of foreign superfluities, which certainty is a public
benefit.[38]
I have also heard it said, that the duty should be carried to the
account of the State where it is levied. What can be the object of
those, who contend for this point, I know not. If there are doubts as
to the justice of Congress, that body should not have been intrusted
with the power of apportioning quotas on the several States. If, on
the contrary, those who make this proposition, expect that the
commercial States, by carrying the five per cent duty to their private
account, can derive from their neighbors, the idea is as fallacious as
it is unjust. The equity of Congress would lead them to relax so much
in the quotas as would render the contribution of the States
proportionate, or if that could not be done, the suffering State would
be induced to carry on its commerce. Thus the end would be defeated,
as indeed it ought; for surely the advantage derived by the mercantile
States, as a mercantile profit, is sufficient without exacting a
revenue in addition to it. Articles imported into the country are
consumed in the country. If each pays a duty, that duty will be paid
by all. The tax will fall equally on all, and therefore ought, in
justice, to be carried to the general account.
I have also heard it suggested, that the public debts ought to be
divided among the several States, and each be called to provide for
its proportion. This measure would be sufficient to destroy the credit
of any country. The creditors trust the Union, and there can be no
right to alter the pledge which they have accepted for any other, even
for a better one, without their free consent. But this is not all;
there is in it a principle of disunion implied, which must be ruinous.
Even at this late period, the States might singly be subjugated. Their
strength is derived from their union. Everything, therefore, which
injures that union, must impair the strength which is dependent upon
it.
I shall not encroach longer upon your Excellency's patience by
adducing farther arguments. Everything for and against the
proposition, has doubtless been considered by the United States in
Congress assembled, with that attention which is due to the
importance of those objects on which they deliberate. I think,
however, it may fairly be concluded, that those who wish to
re-establish the credit and confirm the union of these States, will
comply with this requisition. As I do not doubt that this is the
sentiment of that State over which you preside, I shall believe that
the Legislature at their next session, will pass the proper laws, and
I shall at present only entreat that it may be done as speedily as
possible.
I take the liberty, however, on this occasion, to make an observation,
which applies indeed to many others. Those who have the public weal
very seriously at heart, cannot but lament that the acts passed by
many States on the requisitions of Congress, have been fettered with
restrictions, as to their operation and effect, very inconsistent with
that confidence which is due to the integrity of the United States in
Congress assembled. Nothing can be more pernicious than the jealousy
which dictates clauses restraining the operation of laws, until
similar laws shall have been passed by the other States, or confining
the revenue or supplies to partial or particular objects, not within
the design of Congress, or short of their intentions; or any other
clauses, which show a distrust of the States in the sovereign
representative of America, or in each other. Such jealousies must
prove highly detrimental, if not ruinous. And surely there can be no
ground to entertain them, for the Congress is composed of
Representatives freely chosen, and is of consequence under the control
of those by whom they were appointed. Nothing, therefore, ought to
prevent the free and generous communication of all necessary powers to
Congress; and I am confident that such a communication will more
effectually dishearten the enemy, encourage our friends, and promote
the general and unanimous efforts of the whole community, than any
other circumstance which could possibly happen. It is a truth, that
the enemy does not even pretend to hope anything except from sowing
discord among us, and it is but too true, that while the whigs of
America are daily more firm and united in the cause of independence,
there has been too little attention paid to give to that union of
sentiment a proper political form and consistency. I am not, however,
the less confident that in this, as in everything else, the enemy
will, to their cost, discover that their hopes have been extremely
fallacious.
With every sentiment of respect, &c.
ROBERT MORRIS.
FOOTNOTES:
[38] For a very interesting letter from the President of Congress to
the Governor of Rhode Island, on the matter of duties to be levied by
the States, reported by a Committee, of which Hamilton was Chairman,
see the _Public Journals of Congress_, under the date of April 29th,
1783.
* * * * *
TO JOHN JAY, MINISTER IN SPAIN.
Philadelphia, July 29th, 1781.
Sir,
I enclose you copies of my letters, of the 17th, to the Governor of
Havana, and Robert Smith. These letters will require no explanation to
you. In addition, however, I am to inform you, that my letter to the
Governor was shown to Don Francisco Rendon, whose full approbation of
it is contained, in the enclosed copy of his note to me.
I am to request your early attention to this matter, and that you will
support and justify the measures I have taken, and which may be taken
in consequence of them by others.
With every sentiment of respect, &c.
ROBERT MORRIS.
* * * * *
TO THE PRESIDENT OF THE COUNCIL OF PENNSYLVANIA.
Philadelphia, July 30th, 1781.
Sir,
I am favored with your Excellency's letter, of the 27th instant, for
which I beg leave to make my acknowledgements.
I must again repeat my regret, that the means devised by the
Legislature are unequal to the exigencies of the State. A majority of
the Assembly seemed much disposed, at their late meeting, to adopt
such measures as were calculated to promote the public service; and
therefore it is to be lamented that they were not called, after
passing the resolutions mentioned in your letter, to appropriate to
the disposition of Council, such funds as might have been adequate to
the demands they are liable to, if those which remained for that
purpose were deemed insufficient. I still hope, however, that the
collection of specie in taxes may enable the Council to effect more
than present appearances promise; but it is evident, that the money
allotted to my disposal is intended for the procuring specific
supplies, and paying the balance of the four tenths of the new
Continental emission, and that I cannot apply any part of it to other
purposes, without crediting the State in account with the United
States for such part, at a value equal to gold and silver. I must
observe, that the resolutions taken by the Assembly, were consequent
upon a report made to them, and communicated to me by order of the
House, after it had been made. This report also was by a committee
appointed on a message from your Excellency in Council to the
Assembly, and it is therefore to be presumed, that it originated in
that message. Be that as it may, this at least is certain, that the
resolutions of the Assembly were proposed by them, and accepted by me.
With respect to the balances due from the State, I am to observe, that
I have a perfect conviction of and reliance on the justice of
Congress, who will I am persuaded, make every equitable and proper
allowance; and your Excellency will perceive by the circular letters I
have had the honor to transmit, my determination to have the accounts
of every State with the United States settled on just principles, with
all possible expedition.
I am obliged by your communication as to Mr Searle's mission,[39] and
assure you, that I lament his disappointments, and still more so, that
his negotiations have met with any opposition, which to me was quite
unexpected. I freely confess, that I did not expect he would be
successful; nevertheless, he had my good wishes, and had it been in my
power, he should have experienced my readiness to assist every public
measure. I wish his efforts in Holland may be productive, but I have
very little expectation of it, being convinced that war with England
will create such demand for money, and procure for the lenders such
security as will prevent them from listening to American proposals. It
was from a belief that your Excellency and the Council would give your
support to measures which have the public good for their object, that
I sought your confidence, asked your advice, and relied on your
assistance. Entertaining still the same opinion, I shall freely and
candidly give my sentiments and opinions on every proposition, which
the Council may think proper to refer to me.
The arguments against drawing paper money from the treasury, and
throwing it into circulation, had forcibly impressed my mind; and
nothing but necessity will compel me to have recourse to it, being
very desirous to pay every possible attention to your Excellency's
request.
The determination to proceed with vigor and energy in the collection
of taxes, coincides with my judgment, and of course meets with my
earnest wishes for success. And your promise to strengthen my hands,
and enable me to proceed with cheerfulness, in the great work I have
undertaken, excites my warmest gratitude. The delays which attend the
collection of taxes, are indeed great and alarming. To remedy them
will be highly beneficial, and perhaps the modes suggested in your
letter may be effectual. Every proposition of this sort will command
my serious attention; and if it shall appear to me productive of the
public good, your Excellency may rely that it shall meet with all the
support in my power.
I am, respectfully, &c.
ROBERT MORRIS.
FOOTNOTES:
[39] Mission to Holland, for the purpose of borrowing money for the
State of Pennsylvania.
* * * * *
GEORGE WASHINGTON TO ROBERT MORRIS.
Head Quarters, Dobbs's Ferry, }
August 2d, 1781. }
Dear Sir,
The expectation of the pleasure of seeing you, has prevented me
hitherto from making a communication of a most important and
interesting nature. But circumstances will not admit of further delay,
and I must trust it to paper. It seems reduced almost to a certainty,
that the enemy will reinforce New York with part of their troops from
Virginia. In that case, the attempt against the former must be laid
aside, as it will not be in our power to draw together a force
sufficient to justify the undertaking. The detachment, which the enemy
will probably leave in Virginia, seems the next object which ought to
engage our attention, and which will be a very practicable one, should
we obtain a naval superiority, of which I am not without hopes, and be
able to carry a body of men suddenly round by water. The principal
difficulty which occurs, is in obtaining transports at the moment they
may be wanted; for if they are taken up beforehand, the use for which
they are designed cannot be concealed, and the enemy will make
arrangements to defeat the plan.
What I would therefore wish you to inform yourself of, without making
a direct inquiry, is what number of tons of shipping could be obtained
in Philadelphia at any time between this and the 20th of this month,
and whether there could also be obtained at the same time, a few deep
waisted sloops and schooners, proper to carry horses. The number of
double decked vessels which may be wanted, of two hundred tons and
upwards, will not exceed thirty. I shall be glad of your answer as
soon as possible, because, if it is favorable, I can direct certain
preparations to be made in Philadelphia, and at other convenient
places, without incurring any suspicions. There certainly can be no
danger of not obtaining flour in Philadelphia, and as you seem to have
doubts of procuring salt meat there, I shall direct all that which is
to the eastward, to be collected at points from whence it may be
shipped at the shortest notice.
You will also oblige me by giving me your opinion of the number of
vessels which might be obtained at Baltimore, or other places in the
Chesapeake, in the time before mentioned, or thereabouts.
I have the honor to be, &c.
GEORGE WASHINGTON.
* * * * *
TO M. DE LA LUZERNE.
Philadelphia, August 2d, 1781.
Sir,
Agreeably to the intimations I made to your Excellency some days ago,
it was my intention to have gone to camp yesterday. But an act of
Congress of the ---- of July, rendered it necessary for me to hold a
conference with a Committee of Congress and the Board of War. This was
done; and it was determined, that a member of the Board of War should
go with me to camp.
This circumstance has postponed my journey for a few days. But this is
not all; the daily demands on me for money are considerable, and
beyond the utmost extent of any funds I can command. The demands for
past dues in compensation for past services, and the like, are
rejected; but those for the prosecution of the campaign must be
attended to. If, in my absence, and from that cause there be any
stoppage, or considerable delay, the consequences will be equally
injurious to my reputation, and to the public service.
I have before mentioned to you, that my dependence for immediate
supplies of money, is on the produce of bills of exchange. I am sorry
now to observe, that this dependence fails, and from a cause equally
prejudicial to France and to the United States, considered in their
collective capacity, though, perhaps, advantageous to individuals.
Your Excellency will remember, that when I was called to the
administration, the bills of your army had been selling for two
thirds, and even so low as for one half of their value in Europe. What
might have been the causes of this, it is not my business to inquire.
The fact is incontestable. Your Excellency observed it, and endeavored
to remedy the evil, by holding your own bills at five sixths. But the
merchants, who had benefited by the former low rate, could not be
brought at once to make so considerable an advance. They expected that
the same causes, which had reduced bills to one half, must again bring
them down; and, therefore, were disposed to wait the event.
I take the liberty here to observe, that the fluctuation of exchange
will naturally strengthen that expectation, and nothing but steady,
firm perseverance on the part of the administration, can, or indeed
ought, to produce a ready sale on good terms. Bills of exchange are
remitted to France in payment for European commodities. If the cost of
this remittance is fixed, commerce may so far be established on true
commercial principles; otherwise, it is a mere game of hazard.
Sensible of this, the merchant will rather wait, with his money in his
chest, the event of public necessity, than invest that money in bills,
which may shortly after be bought on better terms by his more cautious
neighbor. Hence it follows, that the public will really command less
money than they otherwise might. Nor is that all. While the public can
command the money of the merchants as fast as it comes into their
hands, the servants of the public can spend that money to advantage,
and the very expenditure will increase the circulation, so as to bring
it again sooner into the hands of the merchant.
Your good sense, Sir, your experience, and the unremitted attention,
which I have perceived you pay to every object which can relate to the
service of your Sovereign, will render it necessary for me to
prosecute any further these observations.
It was from a knowledge of this subject, which many years' constant
attention to this business had imparted, that I saw the necessity of
raising the value of bills by degrees, and, at the same time, of
opposing the most inflexible firmness to every attempt at lowering
their price. The bills I drew on Messrs Le Couteulx & Co., at sixty
days' sight, were selling readily at four fifths, until the bills for
your army were offered at thirty days' sight, and at a lower rate,
This, Sir, has checked my sales; and this induces me to mention to you
another matter, which will, I foresee, become of great importance.
The concurrence of many venders of bills cannot be more pernicious
than the concurrence of many purchasers of supplies. The merchant
cannot reason more effectually on public necessities, which he may
conjecture, than the husbandman on such wants as he has ocular
demonstration of. Melancholy experience has shown, that the contest
between our purchasers has been extremely pernicious. What may have
been the manner of conducting the business by the agents of the King,
I do not positively know; but if I were to credit many tales which I
have heard about it, I should believe there had been errors at least.
But I know too well the weakness and impropriety of listening to
slanderous reports; and I am very confident, that all possible care
will be taken of the interests of his Majesty.