of new paper were to have been issued, whereof four millions were to
be at the order of Congress. By the resolutions of the 26th of August,
1780, three millions more were demanded. By the resolutions of the 4th
of November, 1780, besides the specific supplies, an additional demand
was made of one million, six hundred and fortytwo thousand, nine
hundred and eightyseven and two thirds dollars in money; and by the
resolutions of the 16th of March, 1781, six millions more are
required. These sums amount in the whole to fourteen millions, six
hundred and fortytwo thousand, nine hundred and eightyseven dollars
and two thirds. A very small part of this sum has yet been paid; but
admitting that there may have been circulated by the United States two
millions, six hundred and fortytwo thousand, nine hundred and
eightyseven dollars and two thirds, twelve millions would still remain
due. If from this we deduct the whole of the new emissions, it would
leave a balance of two millions. I propose, therefore, the following
plan.
1st. That no more of these new emissions be used on any pretence.
2dly. That as fast as the old Continental money is brought in, the
several States be credited for the new emissions to have been issued
as specie, agreeably to the several resolutions of Congress upon that
subject; and,
3dly. That on all those requisitions last mentioned, the money of the
new emissions of any particular State be received as specie.
It is true that these propositions are liable to exception, but they
have the great advantage of being consistent with former resolutions
of Congress, which should always be attended to as much as possible.
I am sure that Congress must be convinced of this, for they are not to
learn, that authority is weakened by the frequent change of measures
and pursuits; that such changes injure the reputation of supreme power
in public opinion, and that opinion is the source and support of the
sovereign authority. It is further to be observed, that the motives
for complying with the resolutions of the 18th of March, will, if the
above plan is adopted, become very strong; for in that case, every
forty dollars of old Continental, paid by a State, will produce to the
credit side of its account three dollars in specie; because in the
first place, the whole proportion of old Continental being changed at
forty for one, and receivable until a certain day at the same rate,
that payment will so far operate a discharge of one dollar; and in the
second place, it will entitle the State to two dollars of the new
emission, which not being issued, will also be carried to its credit
upon its several requisitions.
It will be in the wisdom of the United States, in Congress assembled,
to determine whether after the expiration of the day to be fixed for
the above purpose, they will permit the possessors of the old
Continental money to bring it in loan at the rate of forty for one. It
is true, that this might operate against those States, who have not
complied with the resolutions of the 18th of March, 1780, and who have
not now the old Continental to comply with it; but it is entirely
consistent with the former resolutions of Congress, and the States are
themselves blamable for the neglect. Besides, those who now hold the
Continental do it either from choice, because of their confidence in
Congress, or from necessity, because it has been poured in upon them
from those places where it was of inferior value, and this
inferiority was owing to the neglect of those States in not passing
the laws which Congress recommended. There is, therefore, a degree of
justice and firmness in that measure, which will create confidence in
the future acts of the United States.
Whatever principles may be established for settling these accounts,
and however just they may be, many doubts will arise in the
application of them. It must always be remembered, that the States are
independent; and that while they are pressed to a compliance with
their duty, they must have full evidence, that Congress act fairly. It
might therefore be proper, that for the settlement of their accounts,
Commissioners should be chosen as follows; one by the State, one by
the United States, one by the other two, and the decision of the
majority to be final.
Hitherto I have taken no notice of the specific supplies called for
from the several States. Many of these have been furnished, and many
remain to be provided. I would exclude them entirely from the other
public accounts; but as the apportionment so often mentioned, will
give a rule to go by, I shall continue to press for the supplies; or
where they are not wanted, make such composition with the States in
lieu of those which remain to be furnished, as the public service
shall render most eligible.
I have observed, that the public debts ought to be excepted from the
apportionment of past expenses. The reason is clear. Those debts, or
at least a great part of them, may subsist until the relative wealth
of the States has entirely changed. Those who are now most rich, may
become poor, and those who are poor, may become rich. This is not all;
these debts are hitherto unfunded. The creditors have indeed the
general promise of government, and some of them have certificates as
evidences of that promise; but until measures are taken to provide
solid funds for the final payment, the public credit must languish. To
an enlightened mind, it is needless to debate on the advantages
resulting from national credit. Congress will doubtless pursue the
steps necessary for its perfect establishment. And this cannot be
otherwise accomplished, than by raising taxes in hard money from
sources which must be productive and increasing. Those taxes must be
so bound to the public creditors for the debts due to them, that the
produce cannot be diverted. These taxes ought to be raised from the
same articles, at the same rates, and in the same manner throughout
the whole confederation; and consequently, a present apportionment of
the public debts will be as unnecessary as it would be unjust.
I think it my duty, while I am upon this subject, to mention my
opinion, that in addition to the five per cent called for on articles
imported, and on prizes and prize goods, it would be proper to
appropriate to the payment of the public debts, a land tax, a poll
tax, and an excise on spirituous liquors. I readily grant that neither
of these taxes would be strictly equal between the States, nor indeed
can any other tax be so, but I am convinced, that all of them taken
together, would be as nearly equal as the fluctuating nature of human
affairs will permit. I am, however, to observe in addition, that the
land tax should be laid at a certain rate per acre, because the
superior certainty of such a tax will give it the preference of
others, although it cannot perhaps be so great as might have been
expected. Whatever inequalities may remain, must be adjusted among
individuals, by the several States in raising their quotas, and
although those quotas will be most considerable during the war, yet
it must be remembered, that after the conclusion of it, such sums will
be necessary for the establishing a marine and other national
purposes, as will still enable the States to continue their interior
regulations for equalizing the general taxes.
Among the public debts, there are a considerable number of
certificates given by public officers to the citizens of the several
States for articles occasionally taken for the public use. With
respect to these certificates, it is unnecessary to mention, that they
have anticipated the revenue, and brought us to the brink of
destruction. But it is time to pay a particular attention to them.
Many ways may be fallen upon for their liquidation, all of which are
perhaps justly exceptionable.
1st. They may be consolidated with the rest of the public debt, and be
made payable at a future period; but this could only be by forcing a
loan from the people, many of whom are unable to make it, and of
consequence it would be a hard measure, if not an unjust one. Perhaps
it could not be executed, for laws repugnant to the general feelings
of mankind are only a dead letter. 2dly. Another mode is by receiving
them in taxes, but this is very dangerous for several reasons, among
which, the two following are cogent. The public revenue will not bear
such a heavy deduction at those certificates would create, and the
collectors of taxes would be liable to be defrauded themselves, or the
remedy for that would give them opportunities of defrauding the
public, which considering the natural bent and disposition of many
men, ought to be carefully provided against. A third mode would be, by
turning over the holders of these certificates to their respective
States, and giving credit for them on account of the specific
supplies. This may in some degree become necessary in cases where the
negligence of the States on the one hand, and the necessities of the
army on the other, have compelled to seize by force what ought to have
been collected by law. But in many cases it cannot be done, and it
would be improper in many others where it is practicable.
Among the bad consequences, which attend the present mode of supplying
our armies, or rather leaving them to supply themselves, it is one of
no small magnitude, that the officers who are compelled to the
melancholy duty of plundering their fellow citizens, endeavor by the
sum of their certificates, to compensate for the manner of taking as
well as for the value of the thing taken. Nor is that all; where there
is a disposition for fraud, an ample opportunity is afforded to commit
it. Whatever may be the cause, I am informed, that these certificates
are for sums vastly beyond the value of the services and articles
obtained for them. The respective States would naturally be led to
give to these certificates their specified value, and it cannot be
expected that they will scrutinise them so rigidly as they ought, if
they are to be accepted in discharge of demands existing against the
particular State. To all these modes there are also some further
objections. Among which it is my duty to state the following. The
accounts of the several staff officers still remain unsettled. The
certificates given by them, if they are to be paid by the public,
ought to be carried both to the debit and credit of their cash
accounts, and the articles obtained carried to their debit in the
account of expenditures. Of consequence the amount of these last
debits must depend much upon the amount of the certificates, and
therefore either the certificates given should be known, and the
accounts settled with those charges, or the account should be
settled, and no other certificates allowed but such as are charged in
it.
A further mode of liquidating these certificates would be, by
purchasing them from the holders; but it is needless to state any
other objections to it than the want of money, which is felt through
all our operations. There still remains this method.
1st. That at present those certificates should neither be receivable
in taxes nor transferable.
2dly. That they should be taken up and examined in the course of
settling the public accounts.
3dly. That they should be brought to the amount in specie, which the
article procured, or service performed, was reasonably worth.
4thly. That where the sum due to any person on certificates is small,
a bill for the amount should be given, payable at the distance of a
year.
5thly. That where the sum is large it should be divided into five
different parts, and bills given payable in one, two, three, four, and
five years, calculating on each part an interest of six per cent, and
adding it to the amount. As if for instance, the sum were one hundred
pounds, then the bills would be for twentyone pounds four shillings,
twentytwo pounds eight shillings, twentythree pounds twelve shillings,
twentyfour pounds sixteen shillings, and twentyfive pounds.
6thly. That these bills should be drawn payable to the bearer, and in
such form as not to be counterfeited without great difficulty.
7thly. That they should be receivable in continental taxes, within any
of the States, as cash, at the times when they are respectively due,
or if not so received, payable by the continental treasurer, or any
receiver of the continental taxes, on demand, after collecting the
taxes, in which they were respectively receivable.
In this way a credit would be obtained not only without injury, but
probably with advantage to the individual. The anticipation of the
public revenue would not be very great, and, as a list of these notes
would be kept, the amount of every year's anticipation would be
accurately known. Exceptions may probably be found even to this mode,
but unfortunately for us, we have only an alternative of difficulties.
All which human prudence can do in such cases is to choose the least.
I have the honor to be, Sir, &c.
ROBERT MORRIS.
* * * * *
TO THE GOVERNOR OF MARYLAND.
Office of Finance, Philadelphia, }
August 28th, 1781. }
Sir,
Whilst I was at Head Quarters, near Dobbs's Ferry, the determination
was taken by his Excellency the Commander in Chief, to send a very
considerable force against the enemy's troops under Earl Cornwallis in
Virginia; and immediately on my return hither, I did myself the honor
to address your Excellency, respecting the specific supplies due from
the State of Maryland to the United States, upon the requisitions of
Congress, of the 25th of February and 4th of November, 1780, well
knowing the whole balance due on these calls of Congress would, now
become absolutely necessary to the intended operations.
I am very sensible that your government have upon all occasions
executed demands of Congress with a decision and vigor, which does
them honor, and on that account I should decline saying anything
calculated to stimulate their present exertions, did I not know, that
everything depends thereon. Virginia, North and South Carolina, have
long subsisted large armies, and that expense of provisions must come
to their credit. The New England States, New York, New Jersey, and
Pennsylvania, have supported, and must continue to support, the main
army. Pennsylvania will also contribute towards the support of the
southern army, and her supplies will be directed both ways, as
circumstances may require. Delaware and Maryland must chiefly be
depended on. Virginia and North Carolina will, I hope, continue to do
all they can. But your Excellency must be perfectly sensible, that I
have not any funds wherewith to purchase supplies; no State in the
Union has hitherto supplied me with money, except Pennsylvania. But as
the money of that State is (in consequence of plans adopted for that
purpose) very rapidly rising in value, it would be improper to call it
into circulation at present, when it is at the rate of only two for
one, though it has been as low as seven, because the public interest
would thereby be injured, and indeed I might be charged with defeating
the measures I myself had taken, in the very moment when they bid
fairest for success.
The security of your State, the safety of individuals and their
property are so immediately connected with the present operations,
that I persuade myself your Excellency will receive every aid and
support in your exertions, that you can wish, both from public bodies
and individuals. My dependence therefore, on receiving the supplies
from your State seems well founded.
I have the honor to transmit your Excellency herewith a letter from
the Commander in Chief on the same subject, which will add weight to
my entreaties. I have written to Donaldson Yeates, Quarter Master of
the States of Maryland and Delaware, to procure immediately as many
craft or vessels suitable for transporting the troops from the head of
the Elk to Virginia, as will carry about seven thousand men, with the
necessary provisions and apparatus. I have written to Mr Ridley,
William Smith, and some others in Baltimore, to assist in procuring
these vessels, and should any application to your Excellency be
necessary on this subject, I persuade myself, that the authority of
the government or weight of its influence will be brought in aid of
the Quarter Master's endeavors to procure the shipping. I have also
written to Mr Calhoun to know what part of the specific supplies he
has ready, and what prospects for the remainder. He must bestir
himself, as indeed must every person on whom the procuring of these
articles depends.
While the demands for the campaign are constantly transmitted to me,
and so much depends upon the measures I am constantly taking to
economise the public funds and facilitate our military operations,
your Excellency will perceive that full, early, and accurate
intelligence upon the various objects of my Department is of the
utmost importance. I must, therefore, reiterate my requests for it. To
act from necessity and on the spur of occasion is not only the source
of waste and extravagance, but frequently defeats plans otherwise the
best concerted, while on the other hand, that timely forecast and
early provision, which complete knowledge of circumstances can alone
permit of, will save much public money, and go very far to insure
victory to our arms.
I am, with great respect, &c.
ROBERT MORRIS.[42]
FOOTNOTES:
[42] _August 30th._ Went out to meet his Excellency General
Washington, who arrived in this city about one o'clock, amidst the
universal acclamations of the citizens, who displayed every mark of
joy on the occasion. His Excellency alighted at the City Tavern,
received the compliments of many gentlemen, who went out to escort
him, and of others who came there to pay him their respects, and then
adjourned to my house with his suit, Count de Rochambeau, the
Chevalier Chastellux, General Knox, General Moultrie, and others, to
dinner. The owners of several ships in the harbor ordered them out
into the stream, and fired salutes, whilst we drank, The United
States, His Most Christian Majesty, His Catholic Majesty, The United
Provinces, The Allied Armies, Count de Grasse's speedy arrival, &c.
&c. _Diary._
* * * * *
CIRCULAR TO THE GOVERNORS OF THE STATES.
Office of Finance, September 4th, 1781.
Sir,
I do myself the honor to enclose the plan of a National Bank, which I
laid before the United States in Congress assembled on the 17th day of
May last, and which was adopted by them on the 26th. I have now the
pleasure to inform your Excellency, that an election for Directors
will be held in this city on the 1st day of November next.
It is important that the execution of this plan be facilitated as much
as possible, and particularly that of it which relates to the
currency of the bank notes. The inhabitants of the United States
already suffer from the want of a circulating medium. Of consequence
the taxes must soon press heavily on the people. My feelings conspire
with my duty in prompting me to alleviate those burdens. Therefore I
pray the speedy attention of your Legislature to that resolution, by
which the notes are to be receivable in payment of all taxes, duties,
or debts due, or that may become due or payable to the United States.
I do not doubt either the credit or currency of bank notes, but I wish
to render them equally useful to America in the individual as well as
collective capacity, and to supply the necessities of the husbandman
as well as the merchant. I shall not at present mention the other
articles to be attended to; nor will I adduce any arguments in favor
of my present proposition, as it is evidently calculated for the ease
and benefit of the people you preside over. I hope, however, that your
Legislature will not only pass the proper laws to make bank notes
receivable in the manner mentioned in the resolution, but that it will
be done soon.
With all possible respect, &c.
ROBERT MORRIS.[43]
FOOTNOTES:
[43] _September 5th._ The Commander in Chief having repeatedly urged,
both by letter and in conversation, the necessity of advancing a
month's pay to the detachment of troops marching to the southward,
under the command of Major General Lincoln, and my funds and resources
being at this time totally inadequate to make that advance, and at the
same time answer the various demands that are indispensable, I made
application to the Count de Rochambeau for a loan of twenty thousand
hard dollars, for such time as his military chest could, without
inconvenience, spare that sum, promising repayment at the time he
should name.
I was desired to meet the Count at the Chevalier de la Luzerne's
house, which I did on Wednesday the 5th instant, where I met the said
Minister, Count de Rochambeau, and General Chastellux. They informed
me of their strong desire to comply with my request, but that their
treasury was at present not well filled, considering the daily drains
upon it, and that although they had money arrived at Boston, it would
require six or eight weeks to get it from thence, that although they
expected money by the fleet of Count de Grasse, yet it was not then
arrived, and of course that supply was less certain than the other;
that the Intendant and the Treasurer were set out for the head of the
Elk, and their consent was necessary however, they concluded this
subject with requesting that I should ride down to Chester, where we
should overtake those gentlemen, and if it were possible on
consideration of all circumstances they would supply the money
required.
General Washington was extremely desirous, that the troops should
receive their month's pay, as great symptoms of discontent had
appeared on their passing through this city without it. This affair
being considered of great importance, I desired Mr Gouverneur Morris,
my assistant, to accompany me, on account of his speaking fluently the
French language. We set out at three o'clock for Chester, and on the
road met an express from General Washington, who left us in the
morning to join his troops at the head of the Elk, with the agreeable
news of the safe arrival of Count de Grasse and his fleet in the
Chesapeake. This news I received with infinite satisfaction on every
account, and among the rest one reason was the facility it would give
the French treasury in complying with my views, and this I found was
actually the case, as Count de Rochambeau very readily agreed at
Chester to supply at the head of the Elk twenty thousand hard dollars,
to such person as I should appoint to receive them. I engaged to
replace the same sum in their treasury by the 1st day of October next.
On Thursday forenoon I returned to this city about twelve o'clock
having been impeded in my journey by meeting the last division of the
French army, their artillery, and baggage on the road. On my return I
immediately despatched Mr Philip Audibert, Deputy Paymaster General,
to the head of the Elk, with orders to receive the money, pay the
troops, &c. agreeably to instructions given him in writing. In the
conferences with Count de Rochambeau and General Chastellux, they
asked whether, if upon any occasion their treasury should stand in
need of temporary aids, I thought they could procure loans in this
city. I answered, that money is very scarce, that the people who have
property generally keep it employed, and that no certain dependence
can be placed on any given sums, but that I knew the people to be very
generally disposed to assist our generous allies, and should such
occasions offer, I was certain they would exert themselves; and as to
my own part they might on every occasion command my utmost services,
assistance, and exertions, both as a public officer, and as an
individual. I mentioned to them again the affair of exchange, showing
that they had reduced the price below what it had been raised to by my
measures, and requested that in future when they expected to raise
money by bills, they should in good time previously lodge them with
the Minister, and that on his giving me timely notice, I would cause
the most advantageous sale to be made of them, and deliver him the
money without any other charge or deduction, than the expense of the
brokerage.