PROFIT AND LOSS
A biographer whose opinions about Washington are usually sound concludes
that the General was a failure as a farmer. With this opinion I am
unable to agree and I am inclined to think that in forming it he had in
mind temporary financial stringencies and perhaps a comparison between
Washington and the scientific farmers of to-day instead of the juster
comparison with the farmers of that day. For if Washington was a
failure, then nine-tenths of the Southern planters of his day were also
failures, for their methods and results were much worse than his.
It must be admitted, however, that comparatively little of his fortune,
which amounted at his death to perhaps three-quarters of a million
dollars, was made by the sale of products from his farm. Few farmers
have grown rich in that way. Washington's wealth was due in part to
inheritance and a fortunate marriage, but most of all to the increment
on land. Part of this land he received as a reward for military
services, but much of it he was shrewd enough to buy at a low rate and
hold until it became more valuable.
The task of analyzing his fortune and income in detail is an impossible
one for a number of reasons. We do not have all the facts of his
financial operations and even if we had there are other difficulties. A
farmer, unlike a salaried man, can not tell with any exactness what his
true income is. The salaried man can say, "This year I received four
thousand dollars," The farmer can only say--if he is the one in a
hundred who keeps accounts--"Last year I took in two thousand dollars or
five thousand dollars," as the case may be. From this sum he must deduct
expenses for labor, wear and tear of farm machinery, pro rata cost of
new tools and machinery, loss of soil fertility, must take into account
the fact that some of the stock sold has been growing for one, two or
more years, must allow for the butter and eggs bartered for groceries
and for the value of the two cows he traded for a horse, must add the
value of the rent of the house and grounds he and his family have
enjoyed, the value of the chickens, eggs, vegetables, fruit, milk, meat
and other produce of the farm consumed--as he proceeds the problem
becomes infinitely more complex until at last he gives it up
as hopeless.
This much, however, is plain--a farmer can handle much less money than a
salaried man and yet live infinitely better, for his rent, much of his
food and many other things cost him nothing.
In Washington's case the problem is further complicated by a number of
circumstances. As a result of his marriage he had some money upon bond.
For his military services in the French war he received large grants of
land and the payment during the Revolution of his personal expenses, and
as President he had a salary of twenty-five thousand dollars a year.
Yet another difficulty discloses itself when we come to examine his cash
accounts. We find, for example, that from August 3, 1775, to September,
1783, leaving out of the reckoning his military receipts, he took in a
total of about eighty thousand one hundred sixty-seven pounds. What then
more simple than to divide this sum by seven and ascertain his average
receipts during the years of the Revolution? But when we come to examine
some of the details more closely we are brought to pause. We discover
such facts as that in 1780 a small steer, supposed to weigh about three
hundred pounds, brought five hundred pounds in money! A sheep sold for
one hundred pounds; six thousand five hundred sixty-nine pounds of
dressed beef brought six thousand five hundred sixty-nine pounds; the
stud fee for "Steady" was sixty pounds. In other words, the accounts in
these years were in depreciated paper and utterly worthless for our
purposes. Washington himself gave the puzzle up in despair toward the
end of the war and paid his manager in produce, not money.
We of to-day have, in fact, not the faintest conception of the blessing
we enjoy in a uniform and fairly stable monetary system. Even before the
days of the "Continentals" there was depreciated paper afloat that had
been issued by the colonial governments and, unless the fact is
definitely stated, when we come upon figures of that period we can never
be sure whether they refer to pounds sterling or pounds paper, or, if
the latter, what kind of paper. People had to be constantly figuring the
real value of Pennsylvania money, or Virginia money or Massachusetts
money, and one meets with many such calculations on the blank leaves of
Washington's account books. Even metallic money was a Chinese puzzle
except to the initiated, there were so many kinds of it afloat. Among
our Farmer's papers I have found a list of the money that he took with
him to Philadelphia on one occasion--6 joes, 67 half joes, 2
one-eighteenth joes, 3 doubloons, 1 pistole, 2 moidores, 1 half moidore,
2 double louis d'or, 3 single louis d'or, 80 guineas, 7 half guineas,
besides silver and bank-notes.
The depreciation of the paper currency during the Revolution proved
disastrous to him in several ways. When the war broke out much of the
money he had obtained by marriage was loaned out on bond, or, as we
would say to-day, on mortgage. "I am now receiving," he soon wrote, "a
shilling in the pound in discharge of Bonds which ought to have been
paid me, & would have been realized before I left Virginia, but for my
indulgences to the debtors." In 1778 he said that six or seven thousand
pounds that he had in bonds upon interest had been paid in depreciated
paper, so that the real value was now reduced to as many hundreds. Some
of the paper money that came into his hands he invested in government
securities, and at least ten thousand pounds of these in Virginia money
were ultimately funded by the federal government for six thousand two
hundred and forty-six dollars in three and six per cent. bonds.
And yet, by examining Washington's accounts, one is able to estimate in
a rough way the returns he received from his estate, landed and
otherwise. We find that in ten months of 1759 he took in £1,839; from
January 1, 1760, to January 10, 1761, about £2,535; in 1772, £3,213;
from August 3, 1775, to August 30, 1776, £2,119; in 1786, £2,025; in
1791, about £2,025. Included in some of these entries, particularly the
earlier ones, are payments of interest and principal on his wife's share
of the Custis estate. Of the later ones, that for 1786--a bad farming
year--includes rentals on more than a score of parcels of land amounting
to £282.15, £25 rental on his fishery, payments for flour, stud
fees, etc.
Upon the average, therefore, I am inclined to believe that his annual
receipts were roughly in the neighborhood of ten thousand dollars to
fifteen thousand dollars a year from his estate.
As regards Mount Vernon alone, he sometimes made estimates of what the
crop returns ought to be; in other words, counted his chickens before
they were hatched. Thus in 1789 he drew up alternative plans and
estimated that one of these, if adopted, ought to produce crops worth a
gross of £3,091, another £3,831, and a third £4,449, but that from these
sums £1,357, £1,394 and £1,445 respectively would have to be deducted
for seed, food for man and beasts, and other expenses.
A much better idea of the financial returns from his home estate can be
obtained from his actual balances of gain and loss. One of these, namely
for 1798, which was a poor year, was as follows:
BALANCE OF GAIN AND LOSS, 1798
DR. GAINED CR. LOST
Dogue Run Farm 397.11.2 Mansion House .. 466.18. 2-1/2
Union Farm .... 529.10.11-1/2 Muddy Hole Farm 60. 1. 3-1/2
River Farm .... 234. 4.11 Spinning ....... 51. 2. 0
Smith's Shop .. 34.12.09-1/2 Hire of Head
Distillery .... 83.13. 1 overseer ..... 140. 0. 0
Jacks ......... 56.1
Traveler ...... 9.17
(stud horse)
Shoemaker ..... 28.17. 1
Fishery ....... 165.12. 0-1/4 By clear gain on
Dairy ......... 30.12. 3 the Estate.....£898.16. 4-1/4
Mr. Paul Leicester Ford considered this "a pretty poor showing for an
estate and negroes which had certainly cost him over fifty thousand
dollars, and on which there was live stock which at the lowest
estimation was worth fifteen thousand dollars more." In some respects it
was a poor showing. Yet the profit Washington sets down is about seven
per cent. upon sixty-five thousand dollars, and seven per cent. is more
than the average farmer makes off his farm to-day except through the
appreciation in the value of the land. The truth is, however, that Mount
Vernon, including the live stock and slaves, was really worth in 1798
nearer two hundred thousand dollars than sixty-five thousand, so that
the actual return would only be about two and a fourth per cent.
But Washington failed to include in his receipts many items, such as the
use of a fine mansion for himself and family, the use of horses and
vehicles, and the added value of slaves and live stock by
natural increase.
Besides in some other years the profits were much larger.
And lastly, in judging a man's success or failure as a farmer, allowance
must be made for the kind of land that he has to farm. The Mount Vernon
land was undoubtedly poor in quality, and it is probable that Washington
got more out of it than has ever been got out of it by any other person
either before or since. Much of it to-day must not pay taxes.
Washington died possessed of property worth about three-quarters of a
million, although he began life glad to earn a doubloon a day surveying.
The main sources of this wealth have already been indicated, but when
all allowance is made in these respects, the fact remains that he was
compelled to make a living and to keep expenses paid during the forty
years in which the fortune was accumulating, and the main source he drew
from was his farms. Not much of that living came from the Custis estate,
for, as we have seen, a large part of the money thus acquired was lost.
During his eight years as Commander-in-Chief he had his expenses--no
more. Of the eight years of his presidency much the same can be said,
for all authorities agree that he expended all of his salary in
maintaining his position and some say that he spent more. Yet at the end
of his life we find him with much more land than he had in 1760, with
valuable stocks and bonds, a house and furniture infinitely superior to
the eight-room house he first owned, two houses in the Federal City that
had cost him about $15,000, several times as many negroes, and live
stock estimated by himself at $15,653 and by his manager at upward of
twice that sum.
Such being the case--and as no one has ever ventured even to hint that
he made money corruptly out of his official position--the conclusion is
irresistible that he was a good business man and that he made farming
pay, particularly when he was at home.
It is true that only three months before his death he wrote: "The
expense at which I live, and the unproductiveness of my estate, will not
allow me to lessen my income while I remain in my present situation. On
the contrary, were it not for occasional supplies of money in payment
for lands sold within the last four or five years, to the amount of
upwards of fifty thousand dollars, I should not be able to support the
former without involving myself in debt and difficulties," This must be
taken, however, to apply to a single period of heavy expense when
foreign complications and other causes rendered farming unprofitable,
rather than to his whole career. Furthermore, his landed investments
from which he could draw no returns were so heavy that he had approached
the condition of being land poor and it was only proper that he should
cut loose from some of them.