CONTENTS (continued 5)

In like manner money lent by the city of Amsterdam to clear the forests of America would be beneficial to both. Draining marshes and bringing forests under culture, are beneficial to the whole human race, but most to the proprietor. But at any rate, in a country and in a situation like ours, to lighten the weight of present burdens must be good policy by loans. For as the governments acquire more stability, and the people more wealth, the former will be able to raise, and the latter to pay, much greater sums than can at present be expected.

What has been said on the general nature and benefit of public loans, as well as their particular utility to this country, contains more of detail than is necessary for the United States in Congress, though perhaps not enough for many of those to whose consideration this subject must be submitted. It may seem superfluous to add, that credit is necessary to the obtaining of loans. But among the many extraordinary conceptions which have been produced during the present revolution, it is neither the least prevalent nor the least pernicious, that foreigners will trust us with millions, while our own citizens will not trust us with a shilling. Such an opinion must be unfounded, and will appear to be false at the first glance; yet men are, on some occasions, so willing to deceive themselves, that the most, flattering expectations will be formed from the acknowledgement of American independence by the States-General. But surely no reasonable hope can be raised on that circumstance, unless something more be done by ourselves. The loans made to us hitherto, have either been by the Court of France, or on their credit. The government of the United Netherlands are so far from being able to lend, that they must borrow for themselves. The most, therefore, that can be asked from them, is to become security for America to their own subjects; but it cannot be expected that they will do this, until they are assured and convinced that we will punctually pay. This follows necessarily from the nature of their government, and must be clearly seen by the several States as well as by Congress, if they only consider what conduct they would pursue on a similar occasion. Certainly Congress would not put themselves in a situation, which might oblige them to call on the several States for money to pay the debts of a foreign power. Since then no aid is to be looked for from the Dutch government, without giving them sufficient evidence of a disposition and ability to pay both principal and interest of what we borrow; and since the same evidence which would convince the government must convince the individuals that compose it, asking the aid of government must either be unnecessary or ineffectual. Ineffectual before the measures are taken to establish our credit, and unnecessary afterwards.

We are, therefore, brought back to the necessity of establishing public credit; and this must be done at home before it can be extended abroad. The only question which can remain, is with respect to the means. And here it must be remembered, that a free government whose natural offspring is public credit, cannot have sustained a loss of that credit, unless from particular causes, and therefore those causes must be investigated and removed, before the effects will cease. When the continental money was issued, a greater confidence was shown by America than any other people ever exhibited. The general promise of a body not formed into, nor claiming to be a government, was accepted as current coin; and it was not until long after an excess of quantity had forced on depreciation, that the validity of these promises was questioned. Even then the public credit still existed in a degree, nor was it finally lost until March, 1780, when an idea was entertained that government had committed injustice. It is useless to enter into the reasons for and against the resolutions of that period. They were adopted, and are now to be considered only in relation to their effects. These will not be altered by saying that the resolutions were misunderstood, for in those things which depend on public opinion, it is no matter, (so far as consequences are concerned,) how that opinion is influenced. Under present circumstances, therefore, it may be considered as an incontrovertible proposition, that all paper money ought to be absorbed by taxation, or otherwise, and destroyed before we can expect our public credit to be fully reestablished; for so long as there be any in existence, the holder will view it as a monument of national perfidy.

But this alone would be taking only a small step in the important business of establishing national credit. There are a great many individuals in the United States, who trusted the public in the hour of distress, and who are impoverished, and even ruined by the confidence they reposed. There are others whose property has been wrested from them by force to support the war, and to whom certificates have been given in lieu of it, which are entirely useless. I need no inspiration to show that justice establishes a nation. Neither are the principles of religion necessary to evince that political injustice will receive political chastisement. Religious men will cherish these maxims in proportion to the additional force they derive from divine revelation. But our own experience will show, that from a defect of justice this nation is not established, and that her want of honesty is severely punished by her want of credit. To this want of credit must be attributed the weight of taxation for the support of the war, and the continuance of that weight by the continuance of the war.

It is, therefore, with the greatest propriety, your petitioners already mentioned, have stated in their Memorial, that both policy and justice require a solid provision for funding the public debts. It is with pleasure, Sir, that I see this numerous, meritorious, and oppressed, body of men who are creditors of the public, beginning to exert themselves for the obtaining of justice. I hope they may succeed, not only because I wish well to so righteous a pursuit, but because their success will be the great ground work of a credit, that will carry us safely through the present just, important, and necessary war; which will combine us closely together on the conclusion of a peace, which will always give to the supreme representative of America, a means of acting for the general defence on sudden emergencies, and which will of consequence procure the third of these great objects, for which we contend, peace, liberty, and safety.

Such, Sir, are the cogent principles, by which we are called to provide solid funds for the national debt. Already Congress have adopted a plan for liquidating all past accounts, and if the States shall make the necessary grants of revenue, what remains will be a simple executive operation, which will presently be explained. But however powerful the reasons in favor of such grants, over and above those principles of moral justice, which none, however exalted, can part from with impunity, still there are men, who, influenced by penurious selfishness, will complain of the expense, and who will assert the impossibility of sustaining it. On this occasion the sensations with respect to borrowing are reversed. All would be content to relieve themselves by loan from the weight of taxes, but many are unwilling to take up as they ought the weight of debt. Yet this must be done before the other can happen; and it is not so great but that we should find immediate relief by assuming it, even if it were a foreign debt. I say if it were a foreign debt, because I shall attempt to show, first, that being a domestic debt, to fund it will cost the community nothing, and secondly, that it will produce, on the contrary, a considerable advantage.

And as to the first point, one observation will suffice. The expenditure has been made, and a part of the community have sustained it. If the debt were to be paid by a single effort of taxation, it could only create a transfer of property from one individual to another, and the aggregate wealth of the whole community would be precisely the same. But since nothing more is attempted than merely to fund the debt, by providing for the interest at six per cent, the question of ability is resolved to the single point, whether it is easier for a part of the people to pay one hundred dollars, than for the whole people to pay six dollars. It is equally clear, though not equally evident, that a considerable advantage would be produced by funding our debts, over and above what has been already mentioned as the consequence of national credit.

The advantage is threefold. First, many persons by being creditors of the public are deprived of those funds, which are necessary to the full exercise of their skill and industry. Consequently the community are deprived of the benefits, which would result from that exercise, whereas if these debts, which are in a manner dead, were brought back to existence, monied men would purchase them up, though perhaps at a considerable discount, and thereby restore to the public many useful members, who are now entirely lost, and extend the operations of many more to considerable advantage. For although not one additional shilling would be by this means brought in, yet by distributing property into those hands, which could render it most productive, the revenues would be increased, while the original stock continued the same. Secondly, many foreigners who make speculations to this country, would, instead of ordering back remittances, direct much of the proceeds of their cargoes to be invested in our public funds, which, according to principles already established, would produce a clear advantage, with the addition, from peculiar circumstances, that it would supply the want of credit to the mercantile part of society. The last but not least advantage is, that in restoring ease, harmony, and confidence, not only the government (being more respectable) would be more respected, and consequently better obeyed, but the mutual dealings among men on private credit would be facilitated. The horrors which agitate people's minds, from an apprehension of depreciating paper would be done away. The secret hoards would be unlocked. In the same moment the necessity of money would be lessened, and the quantity increased. By these means the collection of taxes would be facilitated, and thus instead of being obliged to give valuable produce for useless minerals, that produce would purchase the things we stand in need of, and we should obtain a sufficient circulating medium, by giving the people what they have always a right to demand, solid assurance in the integrity of their rulers.

The next consideration, which offers is the amount of public debt, and every good American must lament that confusion in public affairs, which renders an accurate state of it unattainable. But it must continue to be so until accounts at home and abroad be fully adjusted. The enclosed is an estimate, furnished by the Controller of the Treasury; from which it appears, that there is, already an acknowledged debt bearing interest, to the amount of more than twelve millions of dollars. On a part of this also there is a large arrearage of interest, and there is a very considerable debt unsettled, the evidence of which exists in various certificates, given for property applied to the public service. This service, including pay due to the army previous to the present year, cannot be estimated at less than between seven and eight millions. Our debt to his Most Christian Majesty, is above five millions. The nearest guess, therefore, which can be made at the sum total, is from twentyfive to twentyseven millions of dollars; and if to this we add what it may be necessary to borrow for the year 1783, the amount will be, with interest, by the time proper revenues are obtained, considerably above thirty millions. Of course the interest will be between eighteen hundred thousand and two millions of dollars.

And here, previous to the consideration of proper revenues for that amount, it may not be amiss to make a few general observations; the first of which is, that it would be injurious to the United States to obtain money in loans, without providing beforehand the necessary funds. For if those who are now so deeply engaged to support war, will not grant such funds to procure immediate relief, certainly those who come after them will not do it to pay a former debt. Remote objects, dependent on abstract reasoning, never influence the mind like immediate sensibility. It is, therefore, the province of wisdom to direct towards proper objects that sensibility, which is the only motive to action among the mass of mankind. Should we be able to get money from the Dutch, without first providing funds, which is more than doubtful; and should the several States neglect afterwards making provision to perform the engagements of Congress, which is more than probable, the credit of the United States abroad would be ruined forever. Very serious discussions also might be raised among foreign powers, and our creditors might have recourse to arms, we might dishonorably be compelled to do what dishonestly we had left undone.

Secondly, the idea, which many entertain, of soliciting loans abroad to pay the interest of domestic debts, is pregnant with its own destruction. If the States were to grant revenues sufficient only to pay the interest of present debts, we might, perhaps, obtain new credit upon a general opinion of our justice, though that is far from certain. But when we omit paying by taxes the interest of debts already contracted, and ask to borrow for the purpose, making the same promises to obtain the new loans, which had already been made to obtain the old, we shall surely be disappointed.

Thirdly, it will be necessary, not only that revenues be granted, but that those revenues be amply sufficient for the purpose, because (as will presently appear) a deficiency would be highly pernicious, while an excess would be not only unprejudicial, but very advantageous. To perceive this with all necessary clearness, it must be remembered that the revenues asked for on this occasion must be appropriated to the purposes for which they are asked, and in like manner the sums required for current expenditures must be appropriated to the current service. If then the former be deficient the latter cannot be brought in to supply the deficiencies, and of course the public credit would be impaired; but should there be an excess of revenue it could be applied in payment of a part of the debt immediately, and in such case, if the credits should have depreciated they would be raised to par, the offer of payment would induce creditors to lower the interest. Thus in either case, the means of making new loans on good terms would be extended, and the necessity of asking more revenues obviated.

Lastly, the revenues ought to be of such a nature, as naturally and necessarily to increase, for creditors will have a greater confidence when they have a clear prospect of being repaid, and the people will always be desirous to see a like prospect of relief from the taxes. Besides which, it will be necessary to incur some considerable expense after the war, in making necessary establishments for a permanent naval force, and it will always be least objectionable to borrow for that purpose on funds already established.

The requisition of a five per cent impost, made on the 3d of February, 1781, has not yet been complied with by the State of Rhode Island; but as there is reason to believe that their compliance is not far off, this revenue may be considered as being already granted. It will, however, be very inadequate to the purposes intended. If goods be imported and prizes introduced to the amount of twelve millions annually, the five per cent would be six hundred thousand, from which at least one sixth must be deducted, as well for the cost of collection as for the various defalcations which will necessarily happen, and which it is unnecessary to enumerate. It is not safe, therefore, to estimate this revenue at more than half a million of dollars, for, though it may produce more, yet probably it will not produce so much. It was in consequence of this, that on the 27th day of last February, I took the liberty to submit the propriety of asking the States for a land tax of one dollar for every hundred acres of land, a poll tax of one dollar on all freemen and all male slaves between sixteen and sixty, (excepting such as are in the federal army, and such as are by wounds or otherwise rendered unfit for service) and an excise of one eighth of a dollar per gallon, on all distilled spirituous liquors. Each of these may be estimated at half a million, and should the product be equal to the estimation, the sum total of revenues for funding the public debts, would be equal to two millions. What has been the fate of these propositions I know not, but I will beg leave, on this occasion, not only to renew them, but also to state some reasons in their favor, and answer some objections against them.

And first, as to a land tax. The advantages of it are, that it can be reduced to a certainty as to the amount and time. That no extraordinary means are necessary to ascertain it, and that land being the ultimate object of human avarice, and that species of permanent property, which peculiarly belongs to a country as neither to be removed or concealed, it stands foremost for the object of taxation, and ought most particularly to be burdened with those debts, which have been incurred by defending the freedom of its inhabitants. But besides these general reasons, there are some which are in a manner peculiar to this country. The land of America may, as to the proprietors be divided into two kinds; that which belongs to the great landholders, and that which is owned and occupied by the industrious cultivators. This latter class of citizens, is, generally speaking, the most numerous and most valuable part of a community. The artisan may, under any government, minister to the luxuries of the rich, and the rich may, under any government, obtain the luxuries they covet. But the free husbandman is the natural guardian of his country's freedom. A land tax will probably, at the first mention, startle this order of men; but it can only be from the want of reflection, or the delusion must be kept up by the artifice of others. To him who cultivates from one to five hundred acres, a dollar per hundred is a trifling object, but to him who owns a hundred thousand it is important. Yet a large proportion of America is the property of great landholders, they monopolise it without cultivation; they are, for the most part, at no expense either of money or personal service to defend it, and keeping the price higher by monopoly than otherwise it would be, they impede the settlement and culture of the country. A land tax, therefore, would have the salutary operation of an agrarian law without the iniquity. It would relieve the indigent, and aggrandize the State by bringing property into the hands of those who would use it for the benefit of society.

The objections against such a tax are twofold; first, that it is unequal, and secondly, that it is high. To obviate the inequality, some have proposed an estimate of the value of different kinds of lands. But this would be improper; because, first, it would be attended with great delay, expense, and inconvenience. Secondly, it would be uncertain, and therefore improper, particularly when considered as a fund for public debts. Thirdly, there is no reason to believe, that any estimate would be just, and even if it were, it must be annually varied, or else come within the force of the objection as strongly as ever; the former would cost more than the tax, and the latter would not afford the remedy asked for. Lastly, such valuations would operate as a tax upon industry, and promote that land monopoly, which every wise government will study to repress. But further, the true remedy for any inequality will be obtained in the apportioning other taxes, of which there will always be enough to equalize this; besides, the tax being permanent and fixed, it is considered in the price of land on every transfer of property, and that produces a degree of equality, which no valuation could possibly arrive at.

In a word, if exact numerical proportion be sought after in taxes, there would be no end to the search. Not only might a poll tax be objected to, as too heavy on the poor and too light on the rich, but when that objection was obviated the physical differences in the human frame would alone be as endless a source of contention, as the different qualities of land. The second objection, that the tax is too high, is equally futile with the former. Land which is so little worth, that the owner will not pay annually one penny per acre for the defence of it, ought to belong to the society by whom the expense of defending it is defrayed. But the truth is, that this objection arises from and is enforced by those men who can very well bear the expense, but who wish to shift it from themselves to others. I shall close this subject by adding, that as such a tax would, besides the benefits to be derived from the object of it, have the farther advantage of encouraging settlements and population, this would redound not only to the national good, but even to the particular good of the landholders themselves.

With respect to the poll tax, there are many objections against it, but in some of the States a more considerable poll tax already exists without inconvenience. The objections are principally drawn from Europe, by men who do not consider that a difference of circumstances makes a material difference in the nature of political operations. In some parts of Europe, where nine tenths of the people are exhausted by continual labor, to procure bad clothing and worse food, this tax would be extremely oppressive; but in America, where three days of labor produce sustenance for a week, it is not unreasonable to ask two days out of a year as a contribution to the payment of public debts. Such a tax will, on the rich, be next to nothing; on the middling ranks it will be of very little consequence; and it cannot affect the poor, because such of them as are unable to labor will fall within the exception proposed. In fact the situation of America differs so widely from that of Europe as to the matter now under consideration, that hardly any maxim which applies to one will be alike applicable to the other. Labor is in such demand among us, that the tax will fall on the consumer. An able bodied man who demands one hundred dollars to go into military service for three years, cannot be oppressed by the annual payment of one dollar while not in that service. This tax, also, will have the good effect of placing before the eyes of Congress the numbers of men in the several States; an information always important to government.

The excise proposed is liable to no other objection than what may be made against the mode of collection, but it is conceived that this may be such as can produce no ill consequences. Excise laws exist and have long existed in the several States. Of all taxes, those on the consumption of articles are most agreeable, because being mingled with the price, they are less sensible to the people; and without entering into a discussion with which speculative men have amused themselves, on the advantages and disadvantages of this species of taxation, it may be boldly affirmed, that no inconvenience can arise from laying a heavy tax on the use of ardent spirits. These have always been equally prejudicial to the constitutions and morals of the people. The tax will be a means of compelling vice to support the cause of virtue, and like the poll tax, will draw from the idle and dissolute, that contribution to the public service which they will not otherwise make.

Having said thus much on the propriety of these taxes, I shall pray leave to assure you of my ready acquiescence in the choice of any others, which may be more agreeable to the United States in Congress, praying them nevertheless to consider, that as the situation of the respective States is widely different, it will be wise to adopt a variety of taxes, because by that means the consent of all will be more readily obtained, than if such are chosen as will fall heavy only on particular States.

The next object is the collection, which, for the most obvious reasons ought to be by authority derived from the United States. The collection of a land tax, as has been above observed, will be very simple. That of the poll may be equally so, because certificates of the payment may annually be issued to the collectors, and they be bound to return the certificates or the money, and empowered to compel a payment by every man not possessed of a certificate. If in addition to this, those who travel from one State to another be obliged to take out and pay for a new certificate in each State, that would operate a useful regulation of police; and a slight distinction between those and the common certificates would still preserve their utility in numbering the people.

It is not necessary to dwell on the mode of collecting these branches of revenue, because in reason, a determination on the propriety of the taxes should precede it. I will only take the liberty to drop one idea with respect to the impost already required. It is conceived that laws should be so formed, as to leave little or nothing to the discretion of those by whom they are executed; that revenue laws, in particular, should be guarded in this respect from odium; being, as they are, sufficiently odious in themselves; and therefore it would have been well to have stipulated the precise sum payable on different species of commodities. The objection is, that the list to be accurate must be numerous. But as this accuracy is necessary, the description ought to be very short and general, so as to comprise many commodities under one head; and the duty ought to be fixed according to their average value. The objection against this regulation, is, that the tax on fine commodities would be trivial, and on coarse commodities great. This indeed is true; but it is desirable for two reasons. First, that coarse and bulky commodities could not be smuggled to evade the heavy duty; and that fine commodities would not be smuggled to evade the light duty. Secondly, that coarse commodities, generally speaking, minister to the demands of necessity or convenience, and fine commodities to those of luxury. The heavy duty on the former would operate an encouragement to produce them at home, and by that means a stoppage of our commerce in time of war would be most felt by the wealthy, who have always the most abundant means of procuring relief.

I shall now, Sir, take the liberty to suppose, that the revenues I have mentioned, or some others, to the amount of at least two millions net annual produce, were asked for and obtained, as a pledge to the public creditors, to continue until the principal and interest of the debts contracted or to be contracted, shall be finally paid. This supposition is made, that I may have an opportunity, thus early, to express my sentiments on the mode of appropriation. It would be as follows; any one of the revenues being estimated, a loan should be opened on the credit of it, by subscription to a certain amount, and public debts of a particular description, or specie, be received in payment of the subscriptions. This funded debt should be transferable under particular forms, calculated for the prevention of fraudulent, and facilitating of honest negotiations. In like manner on each of these revenues should subscriptions be opened, proceeding by degrees so as to prevent any sudden revolutions in money matters, such revolutions being always more or less injurious.

I should further propose, that the surplus of each of these revenues, (and care should be taken that there would be a surplus,) should be carried to a sinking fund; on the credit of which, and of the general promises of government, new loans should be opened when necessary. The interest should be paid half yearly, which would be convenient to the creditors and to the government, as well as useful to the people at large; because by this means, if four different loans were opened at different times, the interest would be payable eight times in the year; and thus the money would be paid out of the treasury as fast as it came in; which would require four officers to manage the business, keep them in more constant and regular employment, dispense the interest so as to command the confidence and facilitate the views of the creditors, and return speedily the wealth obtained by taxes into the common stock.

I know it will be objected, that such a mode of administration would enable speculators to perform their operations. A general answer to this would be, that any other mode would be more favorable to them. But further, I conceive, first, that it is much beneath the dignity of government to intermeddle in such consideration. Secondly, that speculators always do least mischief where they are left most at liberty. Thirdly, that it is not in human prudence to counteract their operations by laws; whereas, when left alone, they invariably counteract each other; and fourthly, that even if it were possible to prevent speculation, it is precisely the thing which ought not to be prevented; because he who wants money to commence, pursue, or extend his business, is more benefited by selling stock of any kind, even, at a considerable discount, than he could be by the rise of it at a future period; every man being able to judge better of his own business and situation than the government can for him.

So much would not perhaps have been said on the head of this objection, if it did not naturally lead to a position, which has hitherto been ruinous, and might prove fatal. There are many men, and some of them honest men, whose zeal against speculation leads them to be sometimes unmindful not only of sound policy, but even of moral justice. It is not uncommon to hear, that those who have bought the public debts for small sums, ought only to be paid their purchase money. The reasons given are, that they have taken advantage of the distressed creditor, and shown a diffidence in the public faith. As to the first, it must be remembered, that in giving the creditor money for his debt, they have at least afforded him some relief, which he could not obtain elsewhere, and if they are deprived of the expected benefit, they will never afford such relief again. As to the second, those who buy up the public debts, show at least as much confidence in the public faith as those who sell them. But allowing, for argument sake, that they have exhibited the diffidence complained of, it would certainly be wiser to remove than to justify it. The one mode tends to create, establish, and secure public credit, and the other to sap, overturn, and destroy it. Policy is, therefore, on this, as I believe it to be on every other occasion, upon the same side of the question with honesty. Honesty tells us, that the duty of the public to pay, is like the same duty in an individual. Having benefited by the advances, they are bound to replace them to the party, or to his representatives. The debt is a species of property, and whether disposed of for the whole nominal value, or the half, for something, or for nothing, is totally immaterial. This right of receiving and the duty of paying must always continue the same. In a word, that government which can, through the intervention of its Courts, compel payment of private debts, and performance of private contracts, on principles of distributive justice, but refuses to be guided by those principles as to their own contracts, merely because they are not amenable to human laws, shows a flagitious contempt of moral obligations, which must necessarily weaken, as it ought to do, their authority over the people.

Before I conclude this long letter, it would be unpardonable not to mention a fund, which has long since been suggested, and dwells still on the minds of many. You doubtless, Sir, anticipate my naming of what are called the back lands. The question as to the property of those lands, I confess myself utterly incompetent to decide, and shall not for that reason presume to enter on it. But it is my duty to mention, that the offer of a pledge, the right of which is contested, would have ill consequences, and could have no good ones. It could not strengthen our credit, because no one would rely on such a pledge, and the recurrence to it would give unfavorable impressions of our political sagacity. But admitting that the right of Congress is clear, we must remember also, that it is disputed by some considerable members of the confederacy. Dissentions might arise from hasty decisions on this subject. And a government torn by intestine commotions, is not likely to acquire or maintain credit at home or abroad.

I am not, however, the less clear in my opinion, that it would be alike useful to the whole nation, and to those very constituent parts of it, that the entire disposition of those lands should be in Congress. Without entering, therefore, into the litigated points, I am induced to believe, and for that reason to suggest, the proposing this matter to the States as an amicable arrangement. I hope to be pardoned when I add, that considering the situation of South Carolina and Georgia, it might be proper to ask their consent to matters of the clearest right. But that supposing the right to be doubtful, urging decision in the present moment, might have a harsh and ungenerous appearance.

But if we suppose this matter to be arranged either in the one mode or in the other, so that the right of Congress be rendered indisputable (for that is a previous point of indispensable necessity) the remaining question will be, as to the appropriation of that fund. And I confess it does not appear to me, that the benefits resulting from it are such as many are led to believe. When the imagination is heated in pursuit of an object, it is generally overrated. If these lands were now in the hands of Congress, and they were willing to mortgage them to their present creditors, unless this were accompanied with a due provision for the interest, it would bring no relief. If these lands were to be sold for the public debts, they would go off for almost nothing. Those who want money could not afford to buy land. Their certificates would be bought up for a trifle. Very few monied men would become possessed of them, because very little money would be invested in so remote a speculation. The small number of purchasers would easily and readily combine; of consequence they would acquire the lands for almost nothing, and effectually defeat the intentions of government; leaving it still under the necessity of making further provision, after having needlessly squandered an immense property.

This reasoning is not new. It has been advanced on similar occasions before, and the experience, which all America has had of the sales of confiscated estates and the like, will now show that it was well founded. The back lands then will not answer our purpose, without the necessary revenues. But those revenues will alone produce the desired effect. The back lands may afterwards be formed into a fund, for opening new loans in Europe on a low interest, redeemable within a future period, (for instance twenty years) with a right reserved to the creditors of taking portions of those lands on the non-payment of their debts, at the expiration of the time. Two modes would offer for the liquidation of those debts. First, to render payment during the term to those who would not consent to alter the nature of the debt; which, if our credit be well established, would place it on the general footing of national faith. And secondly, to sell portions of the land (during the term) sufficient to discharge the mortgage. I persuade myself, that the consent of the reluctant might be obtained, and that this fund might hereafter be converted to useful purposes. But I hope that in a moment when the joint effort of all is indispensable, no causes of altercation may be mingled unnecessarily in a question of such infinite magnitude as the restoration of public credit. Let me add, Sir, that unless the money of foreigners be brought in for the purpose, sales of public lands would only absorb that surplus wealth, which might have been exhaled by taxes; so that in fact no new resource is produced. And that while, as at present, the demand for money is so great as to raise interest to five per cent per month, public lands must sell extremely low, were the title ever so clear. What then can be expected, when the validity of that title is one object of the war?

I have the honor to be, &c.

ROBERT MORRIS.

TO THE PRESIDENT OF CONGRESS.

Office of Finance, July 30th, 1782.

Sir,

I do myself the honor to enclose for the inspection of Congress, estimates for the service of the year 1783, amounting in the whole to eleven millions. I should be strictly justified in praying a requisition of the United States for that sum, but I conceive that the demands made should be the lowest which our circumstances will possibly admit of. I am persuaded, that if the United States in Congress will adopt those means of economy, which are in their power, we may save two millions; and, therefore, on a presumption that those means will be adopted, I shall ask only nine millions. Congress will observe, that the estimates of the Marine Department amount to two millions and a half; whereas there was no estimate made for that service in the last year, any more than for the Civil List. There can be no doubt that the enemy have changed their mode of warfare, and will make their principal exertions in the naval line. It becomes us, therefore, to make like exertions, and that for the plainest reasons.

Experience has shown that the efforts to obtain a large army have for many years proved utterly fruitless. The only effect of those efforts, has been to enhance the price of such men as were obtained, and thereby to disable the States, who exerted themselves to raise recruits, from pouring supplies into the public Treasury. Thus we have not only been unable to get more men, but also to pay and support those which we had gotten. Admitting, however, that the required number were obtained and properly supported as an army, these things are clear; first, that without naval aid we could not make an impression on the enemy's posts. Secondly, that they would be able to harass and distress us in every quarter, by predatory incursions. Thirdly, that they would prevent us from receiving those supplies, which are necessary alike to the operations and existence of an army. And, fourthly, that their inroads on our commerce would produce such distress to the country, as to make our revenues utterly unproductive, and finally bring our affairs to destruction.

An army, therefore, without a navy would be burdensome, without being able to give essential aid, supposing the enemy to have changed their system of carrying on the war. But if we had a navy, we should be able, first, to prevent the enemy from making predatory incursions. Secondly, we should, at least, keep the ships they have on our coast together, which would prevent them from injuring our commerce, or obstructing our supplies. Thirdly, if they kept in this country an equal or superior force, we should by that means have made a powerful diversion in favor of our allies, and contributed to give them a naval superiority elsewhere. Fourthly, if our enemy did not keep an equal or superior force in this country, we should be able by cruising to protect our commerce, annoy theirs, and cut off the supplies directed to their posts, so as to distress their finances and relieve our own. Fifthly, by economising our funds, and constructing six ships annually, we should advance so rapidly to maritime importance, that our enemy would be convinced, not only of the impossibility of subduing us, but also of the certainty that his forces in this country must eventually be lost, without being able to produce any possible advantage. And, sixthly, we should, in this mode, recover the full possession of our country, without the expense of blood or treasure, which must attend any other mode of operations; and while we are pursuing those steps, which lead to the possession of our natural strength and defence.

I trust, Sir, that the influence of these considerations, will not only lead the councils of America to adopt the measures necessary for establishing a navy, but that by economising as much as possible, we may be able (from the sums now to be asked for) to do more in that line than is contained in the estimate; but as this must depend on circumstances, which we cannot command, so it is not prudent or proper to rely on it. Having already stated the lowest necessary sum at nine millions, I proceed, Sir, to propose that four millions be borrowed, which will reduce the quotas to five millions. I make this proposition, under the idea, that the plans contained in my letter of yesterday's date be adopted. The quotas then being five millions, the sum total of what will be taken from the people will amount to only seven millions; and of that, full twelve hundred thousand will be paid back as the interest of our domestic debt, so as not to be, in fact, any burden on the whole people, though a necessary relief to a considerable part of them. On this plain statement I shall make no comment. I shall only pray, that as much expedition may attend the deliberations on these objects as the importance of them will permit, so that the States may be in a situation to make speedy decisions. And this is the more necessary, as the negotiations for a loan must be opened in Europe early next winter.

I have the honor to be, &c.

ROBERT MORRIS.[9]

TO THE GOVERNOR OF RHODE ISLAND.

Office of Finance, August 2d, 1782.

Sir,

I presume you have been before this informed, that all the States except Rhode Island, have acceded to the impost law. A committee of Congress lately appointed on this subject, did me the honor to request my attendance, with that of your Delegates, to hear the objections from them, and know from me the circumstances attending the requisition. After a long conversation the committee were about to confer on a report, which, at my request they were pleased to suspend, that I might have the last opportunity of praying your attention to the subject. And I was induced to make that request, as well for the avoiding those disagreeable discussions, which cannot exist between the Union and an individual State without inducing pernicious consequences, as because it appeared to me, that the reasons urged against passing the impost are not conclusive, as some have thought them to be.

Mr Howell was so kind as to promise, that he would state his objections in writing. This he has done, and a copy of them is enclosed. They are,

1st. That the impost would draw a disproportionate supply from either merchant or consumer.

2dly. That Rhode Island imports and consumes more of foreign articles in proportion, than any other State.

3dly. That, from her maritime situation she is exposed to great losses.

4thly. That the exclusive benefit of the impost should be carried to account of the State.

5thly. That the impost will raise prices, and therefore manufactures brought from the neighboring States will draw a revenue from Rhode Island.

6thly. That duties imposed by the neighboring States may compel Rhode Island to subsist by foreign articles.

7thly. That many men will be employed in the collection.

8thly. That it would be evaded by smuggling; and,

9thly. That the collection may be objectionable.

To each of these I will reply in their order.

1st. To determine whether the impost will act proportionably or not, we must consider in what respect the proportion is to be taken. If it be a proportion between two of the States, that will be considered under the second head; if it be a proportion among the people of the same State, it is only recurring to the question, whether the taxes on consumption are useful; for so long as no man pays the tax, but he who chooses to purchase the article, the disproportion, if any, is of his own creating. The necessity of a revenue to a certain amount must be admitted. Is it then wise to raise a part of it from the consumption of foreign articles? I say the consumption, because the tax undoubtedly falls on the consumer and not on the importer. If this be not a wise tax, what shall we substitute? Articles of primary and immediate necessity are made in the State of Rhode Island. Both food and raiment can be had without crossing the Atlantic in search of them. Every man, therefore, is at liberty to use foreign articles or not. If he does use them the tax is voluntary, and therefore cannot be considered as disproportionate, any more than for one man to wear silk while another wears wool.

2dly. That Rhode Island consumes more foreign commodities in proportion than any other State in the Union, cannot be admitted. Rhode Island certainly makes many commodities, but the more southern States are in the habit of importing everything.

3dly. That Rhode Island is, from its situation, liable to the unhappy accidents of war is true; but this incidental evil, arising from an advantageous position, cannot be adduced as a plea for exemption from public burdens. New York has suffered, at least as much and as long.

4thly. That the exclusive benefits of an impost should be carried to the State where it is collected, is a position unjust in itself, and which would forever prevent any duties; wherefore it would cut off not only one of the most productive, but one of the most useful branches of revenue. Rhode Island, Pennsylvania and some other States carry on the commerce of their neighbors as well as their own, from which they derive great riches. The duties are always (like the risks and the expenses) paid by the consumer; for unless this be so, no tolerable reason can be assigned, why foreign commodities should be dearer in war than in peace. If then a considerable duty were laid by the commercial State, it would fall on its uncommercial neighbor. That neighbor, therefore, would immediately take measures to carry on its own commerce, and prohibit the bringing of articles from the commercial State. Those measures would produce a repeal of the duty. I take no notice here of the altercations which would arise; it is sufficient to show, that the private view of revenue for the State would be defeated.

5thly, and 6thly. These objections do not appear to me to apply, because in the first place, I can hardly suppose the neighboring States will ever think of laying duties on the produce, for if any of them should, her citizens would be the sufferers. Secondly, if the article of produce be left uncontrolled by the government every individual will be a check on the avidity of his neighbors, and if by this means a piece of American goods can be vended cheaper in Rhode Island than a piece of foreign goods, the consumer in Rhode Island will by the purchase of it save money to himself, and therefore to the country. And as the duty is collected only on foreign goods he will not pay the duty, and of course the duty on his State will be so much the less.

7thly. The seventh objection will apply more strongly to almost any other kind of tax, because this may be collected by a very small number of men.

8thly. The eighth objection I cannot admit, because forming my opinion of that State from what I conceive to be the character of the gentleman who makes the objection, I cannot believe it to be valid. Smuggling was formerly not disreputable because it was the evading of laws, which were not made by proper authority, and therefore not obligatory; but nothing can be more infamous than to defraud our own government of so poor a pittance; and I trust, that if any individual were inclined to do so, he would be detected by the first person who saw him, and would be as much exposed to the resentment and contempt of his fellow citizens as an informer would have been in the times alluded to.

9thly. The last objection ought not to be made, because there is no reason to suppose, that Congress would devise means to oppress their fellow citizens. But it is one of our greatest misfortunes, that men are apt to reason from one thing to another that is very dissimilar. The parliament of England cared nothing about the consequences of laws made for us, because they were not affected by them. This is always the case under such circumstances, and forms one of the most powerful arguments in favor of free governments. But how can it be supposed, that a member of Congress who is liable to be recalled at a moment's warning would join in measures which are oppressive to the people, and which he must necessarily himself feel the weight of, without deriving any advantage from them. For it is not here as in England, that there is a King to buy votes for bad purposes. If the members of Congress be seduced, it must be by the Congress, which is absurd. If indeed the Congress were either an hereditary body, self-existent, or if they were self-elected, there might be room for apprehension, but as they are, there can be none.

Now, Sir, the state of things is shortly this. The United States are deeply indebted to the people of America. They have called for revenues to pay their debts in a course of years, being the only means of reviving credit and lightening burdens. All the States consent but Rhode Island, to whose citizens a very considerable part of this debt is due. Of consequence the whole is suspended. The reasons assigned are purely local, and I verily believe are founded on mistaken principles. The revenue, however, if granted is insufficient. More must be demanded; and consequently, as all taxes are unpleasant some State will be found to oppose any which can be devised, on quite as good ground as the present opposition. What then is the consequence?

I am, Sir, &c.

ROBERT MORRIS.

TO SIR GUY CARLETON.

Office of Finance, August 20th, 1782.

Sir

I do myself the honor to enclose to your Excellency letters from the masters of two flag ships, which have arrived in this port with American prisoners. I have sent them in by Mr John Greene, one of the persons that came in the Symmetry, who will bring such orders, as your Excellency may think proper to transmit to those gentlemen. I have further to mention, Sir, that I intend delivering to one of them such British marine prisoners as may be in this place, or its vicinity, when they depart, provided their receipt shall be deemed a proper evidence of the delivery, on a settlement of the account hereafter. On this point I shall be happy to learn your sentiments. It might have been more proper to have addressed myself to Admiral Digby, especially as Mr Greene carries the duplicates of a former letter to him. But as the King's servants in England have placed the masters of these flags under your Excellency's directions, I was led to conclude, that if the concurrence of the Admiral should be necessary, you would take the trouble of obtaining it.

I have the honor to be, with perfect respect, &c.

ROBERT MORRIS.

TO ALEXANDER HAMILTON.

Office of Finance, August 28th, 1782.

Sir,

I have duly received your several favors of the 22d and 27th of July, and 10th and 13th of August. My not answering them is owing to causes which you will easily conceive; for you will easily conceive the multiplicity of objects to which I must turn my attention. I am very sorry to learn that you can no longer continue in the office of Receiver. It would have given me great pleasure that you should have done so, because I am sure that you would have rendered very signal services to the public cause. This you will now do in another line, more important as it is more extensive; and the justness of your sentiments on public affairs, induce my warm wish that you may find a place in Congress so agreeable, that you may be induced to continue in it.

I am sorry to learn, that any letter of mine should have given offence; but I conclude that this effect must follow from many parts of my writings and conduct; because the steady pursuit of what appears to be the true line of duty will necessarily cross the various oblique views of interest and opinion. To offend is sometimes a fault, always a misfortune. The letter in question is, I suppose, under the date of the 11th of December, of which I enclose you a copy. Let me at the same time assure you, that in all your excellent letter of the 13th instant, I most esteem the clause now in question because it contains that useful information which is least common. I will make no apologies for the letter, to any one, because apologies are rarely useful, and where the intention has been good, they are to candid minds unnecessary. Possessed of the facts you can guard against misrepresentation, and I have found that to be the most hostile weapon, which either my personal or political enemies have been able to wield against me.

I have not even yet seen the resolutions of your Legislature, relative to an extension of the powers of Congress. I had supposed the same reason for them that you have expressed. Indeed power is generally such a darling object with weak minds, that they must feel extreme reluctance to bid it farewell; neither do I believe that anything will induce a general consent to part with it, but a perfect sense of absolute necessity. This may arise from two sources, the one of reason the other of feeling; the former more safe and more uncertain, the latter always secure and often dangerous. It is, my Dear Sir, in circumstances like these, that a patriotic mind seeking the great good of the whole on enlightened principles, can best be distinguished from those vulgar souls, whose narrow optics can see but the little circle of selfish concerns. Unhappily such souls are but too common, and but too often fill the seats of dignity and authority. A firm, wise, manly, system of federal government, is what I once wished, what I now hope, what I dare not expect, but what I will not despair of.

Your description of the mode of collecting taxes, contains an epitome of the follies, which prevail from one end of the continent to the other. There is no end to the absurdity of human nature; mankind seem to delight in contrast and paradox, for surely nothing else could sanctify (during a contest on the precise point of being taxed by our own consent) the arbitrary police, which on this subject, almost universally prevails. God grant you success in your views to amend it. Your ideas on the subject are perfectly correspondent to my own. As to your doubt on the mode of collecting it, I would wish to obviate it by the observation, that the further off we can remove the appointment of collectors from popular influence, the more effectual will be their operations; and the more they conform to the views of Congress, the more effectually will they enable that body to provide for general defence. In political life, the creature will generally pay some deference to the creator. The having a double set of officers is indeed an evil, but a good thing is not always to be rejected because of that necessary portion of evil, which in the course of things must be attached to it. Neither is this a necessary evil, for with a proper federal government, army, navy, and revenue, the civil administration might well be provided for, by a stamp act, roads by turnpikes, and navigation by tolls.

The account you give of the State is by no means flattering; and the more true it appears, the more concern it gives me. The loan I hope will be completed, and I wish the whole amount of the tax may be collected. The forage plan I have disagreed to, and enclose for your information, the copy of my letter on that subject to the Quarter Master General. I believe your State is exhausted, but perhaps even you consider it as being more so than it is. The certificates, which now form a useless load, will (if the United States adopt, and the several States agree, to a plan now before Congress) become valuable property. This will afford great relief. The scarcity of money also may be immediately relieved, if the love of popular favor would so far give way to the love of public good, as to enforce plentiful taxation. The necessity of having money, will always produce money. The desire of having it produces, you see, so much as is necessary to gratify the desire of enjoying foreign luxuries. Turn the stream, which now flows in the channels of commerce, to those of revenue, and the business is completed. Unfortunately for us, this is an operation which requires fortitude, perseverance, virtue, and which cannot be effected by the weak or wicked minds, who have only partial, private, or interested views.

When I consider the exertions, which the country has already made, under striking disadvantages, and with astonishing prodigality of national wealth, by pernicious modes of applying it, I persuade myself that regular consistent efforts would produce much more than you suppose.

For your accurate, clear, and comprehensive description of general and particular characters, sentiments, and opinions, accept my sincere thanks and warm approbation. They do equal justice to your talents, both for observation and description.

Mr Duer's attention to the business of his contract, is very pleasing to me, and honorable to himself. I am very sorry that he should lose by it, but to avoid this as much as possible, I am determined to support him by liberal advances so soon as it shall be in my power to do it.

I pray you to believe me to be yours, &c.

ROBERT MORRIS.

TO GEORGE WASHINGTON.

Office of Finance, August 20th, 1782.

Sir,

I have now to address you on a subject, which cannot be more painful to you than it is to me. I am determined to act justly, and therefore when I find that I shall be unable to pay the contractors, I will give them due notice in season. This period is fast approaching, and unless the States make infinitely greater exertions than they have hitherto done, it must soon arrive. To comprise this matter in a short compass, your army is fed at a dollar for nine rations, or three dollars and a third per month to feed a soldier. Twentyfour thousand rations per day would therefore amount to eighty thousand dollars monthly, which is more than had been paid by all the States on the 1st instant. The object of this letter, Sir, is to request that you will consider how your army is to be subsisted or kept together, if I am obliged to dissolve the contracts. I pray that Heaven may direct your mind to some mode by which we may be yet saved. I have done all that I could, and given repeated warnings of the consequences, but it is like preaching to the dead. Every exertion I am capable of shall be continued while there is the least glimmering of hope.

I have the honor to be, with great respect, &c.

ROBERT MORRIS.[10]

TO GEORGE WASHINGTON.

Office of Finance, August 30th, 1782.

Sir,

My letter of the 29th, which is enclosed, I have written for two reasons; one that you may be informed and I may stand justified in every respect, should the event take place; the other, which is the principal one, that you may found a warm application on it to the States. You will, I hope, keep this entirely to yourself. You will see, that I have not intrusted a view of it to my Secretary, or to any of the clerks. The effect of your application must depend on raising a very general alarm.

I have the honor to be, &c.

ROBERT MORRIS.[11]

TO THE PRESIDENT OF CONGRESS.

Office of Finance, September 9th, 1782.

Sir,

I did myself the honor to propose, in my letter of the 30th of July last, the borrowing or four millions of dollars for the service of the ensuing year. It always gives me pain to repeat any application to Congress, because it is my duty to suppose they pay every proper attention to those things, which are submitted to their consideration. But I must take the liberty, on this occasion to observe, that the many engagements I have been compelled to make for the purpose of supporting the public service to the present moment, will all fall due between this and the first of next year.

My prospects of relief from the revenues of America are slender indeed. As a safe opportunity for Europe will offer in a few days, Congress will be pleased to consider that the moments are precious. They will consider, that I cannot act in this business without their authority, and that it will take some days to prepare the necessary despatches, even after that authority is given. I hope, Sir, that I shall not be understood as desiring to precipitate any acts or resolutions. We are fast approaching to the winter. If everything could be ready by the 15th of this month, we could not reckon on the arrival of despatches at Paris before the beginning of November. A month is but a short period to transact this important business, and this would not leave another month for the winter's passage back.

With perfect respect, I have the honor to be, &c.

ROBERT MORRIS.

TO GEORGE WASHINGTON.

Office of Finance, September 9th, 1782.

Dear Sir,

The dates of the enclosed letters will show you my extreme reluctance to wound your mind with the anxieties which distress my own. At the time they were written, I was sore pressed on every quarter; but a gleam of hope broke in upon me, and induced me to bear up still longer against the torrent of demands, which was rushing upon me. These would long since have overwhelmed me, had I been supported only by the revenues drawn from the States.

At length, however, my other resources, which are nearly exhausted, have become useless by the total stagnation of trade, owing to the expectations of peace. There is, therefore, no other dependence left but the taxes, and, unless these become immediately productive of funds sufficient to feed our troops, I need not describe the consequences. Already I am in arrears, in spite of my efforts. I am determined, however, to continue those efforts to the last moment, but at present, I really know not which way to turn myself.

With the most sincere esteem, &c.

ROBERT MORRIS.

TO MESSRS WILLINK & CO., AMSTERDAM.

Office of Finance, September 24th, 1782.

Gentlemen,

Presuming, from the letters of yourself and of Mr Adams, that the loan opened on account of the United States of America under your auspices is filled, I do myself the honor to enclose you sundry acts of Congress, by which you will see that the amount is subject to my disposal. Whatever measures I may take, you will from time to time receive due notice of, unless the miscarriage of letters by the accidents to which they are at present subjected should prevent.

I have now in view a money negotiation, which may or may not take place according to circumstances, but which will probably be accomplished, to the amount of from one to two millions of florins. If it should be effected, Messrs Le Couteulx & Co. bankers at Paris, will have occasion to draw on you. I am now, therefore, to desire that the bills drawn by that house to whatever amount, be punctually honored and paid on account of the United States. It is in a reliance on this that I shall take my measures, and a failure of payment would be attended with the worst consequences.

I have the honor to be, with perfect respect, &c.

ROBERT MORRIS.

TO MESSRS LE COUTEULX & CO., PARIS.

Office of Finance, September 24th, 1782.

Gentlemen,

Enclosed you have letters of this date to the house of Messrs Le Couteulx, at Cadiz, and to Wilhelm and Jan Willink, Nicholas and Jacob Van Staphorst, and De la Land and Fynjé, at Amsterdam. These two letters, which I am to request that you will forward, are left open for your perusal, and will explain to you the object which I now have in view.

The United States having moneys in Holland, which are very necessary for the public service here, I have deemed it best to bring them through the Havana, for the following reasons. First, bills of exchange cannot be negotiated here to the necessary amount, and are even then negotiated at the rate of thirteen per cent discount. Secondly, as it is, therefore, necessary to import money, the risk is less from the Havana than from Europe. Thirdly, it might not be agreeable to the prejudices of many to draw from Europe their circulating coin; and, fourthly, I expect that a considerable gain will be made on the negotiations. Thus, for instance, to take it in its greatest extent, I am informed that bills on Cadiz, at thirty days' sight, sell at the Havana for an advance of eight per cent; and that bills on Paris sell at Cadiz, for an advance of nine per cent; and there is also an advance on bills drawn from Paris on Amsterdam; to which may be added, that a considerable time is also gained in these various negotiations; and, therefore, if any benefit can be derived to the United States from that circumstance, you will govern yourself accordingly. In this, as well as in every other circumstance relating to the business, I have on you, Gentlemen, the most perfect reliance.

I think it will be best for you to know immediately of the gentlemen in Amsterdam, whether they will answer your drafts to the amount; because, if they should raise obstacles in the way, those may be removed in season from this country, provided an early notice be transmitted; for I expect you will receive this letter by the time Mr —— reaches the Havana, if not before; and I do not suppose that his bills can reach Cadiz in less than two months; and, of course, at one usance only (and they shall, if that can be done without loss, be drawn at two usances) they will not be payable until three months, and then if time is necessary, you will direct the house in Cadiz to draw at two usances more, which will bring the business to between five and six months from your receipt of my letters. At any rate, it will not do, that Mr ——'s bills be protested; I must rely on you to prevent an accident, which would be attended with such fatal consequences, and shall take measures to put you in a capacity to answer them seasonably.

With perfect respect, &c.

ROBERT MORRIS.

P. S. You will observe, that there is in the foregoing letter, a blank for the name of the person who is to be employed in this business. The reason is, that the gentleman I spoke to on the subject, is prevented by the circumstances of his family from going to Havana. I shall write to you further on the subject when I shall have taken other arrangements.

R. M.

TO B. FRANKLIN, JOHN ADAMS, AND JOHN JAY.

Office of Finance, September 25th, 1782.

Sir,

I do myself the honor to enclose for your perusal, Acts of Congress of the 27th of November and 3d of December, 1781, and the 14th and 3d instant. In consequence I have to request, that all the bills hitherto drawn by authority of Congress be paid and the accounts of those transactions closed. After this is done, and I hope and believe that while I am writing this letter it may have been already accomplished, you will be freed from the torment and perplexity of attending to money matters.

I am persuaded that this consideration will be highly pleasing to you, as such things must necessarily interfere with your more important attention. I have long since requested the Secretary of Foreign Affairs to desire you would appoint an agent or attorney here, to receive and remit your salary, which will be paid quarterly; in the meantime it is paid to him for your use. As to any contingent expenses which may arise, I shall readily make the necessary advances upon Mr Livingston's application. These arrangements will, I hope, be both useful and agreeable to you.

I am, Sir, with perfect respect, &c.

ROBERT MORRIS.

TO JOHN ADAMS.

Office of Finance, September 27th, 1782.

Sir,

I do myself the pleasure to congratulate you on the success of your patriotic labors in Holland. The general tribute paid to your abilities on this occasion, will so well dispense with the addition of my feeble voice, that I shall spare your delicacy the pain of expressing my sentiments.

The enclosed resolutions and copies of letters will convey to you so fully the views of Congress, and explain so clearly my conceptions on the subject, that very little need be added. If the application to France should fail of success, which I cannot permit myself to believe, you will then have a new opportunity of showing the influence you have acquired over the minds of men in the country where you reside, and of exerting it in the manner most beneficial to our country.

Before I conclude this letter, I must congratulate your Excellency on the success of the loan you have already opened, which I consider as being by this time completed.

With perfect respect, I have the honor to be, &c.

ROBERT MORRIS.

TO MESSRS LE COUTEULX & CO.

Office of Finance, September 27th, 1782.

Gentlemen,

I write to Dr Franklin under this date to place in your hands five hundred thousand dollars, as soon as he possibly can. I hope it may be effected speedily. My object in making this deposit is, that you may remit to the amount of that sum to the Havana, provided bills on that place can be purchased at a discount of twentyfive per cent; by which I mean, that seventyfive dollars in Europe should purchase one hundred dollars in Havana. If the negotiations cannot be effected upon those terms, you will retain the money in your hands subject to my after direction. I suppose that those, or better terms, can be obtained for the following reasons.

The person who has money in the Havana, by selling bills will immediately possess himself of the amount for which they are sold; and therefore, allowing time for the bills to go over and be presented, with the thirty days of payment, and the further time, which would be necessary to remit that money from the Havana to Cadiz, and he would gain from eight to twelve months' time, which is itself important; but in addition to this, there is the duty of nine per cent on exporting cash from the Havana; a freight, which is I suppose considerable; a risk which is very great, and perhaps a farther duty on the arrival at Cadiz. To which may be added, the advance on bills drawn at Cadiz on the different parts of Europe.

If you can accomplish the negotiation on the terms I have mentioned, you will then remit the bills to a good house in the Havana, to receive the money and hold it subject to my order; and you will, if you can, fix the terms on which that House are to do the business. Whether anything of this sort takes place or not, I am to request that you will give me every information on the subject, which you can acquire.

I am, Gentlemen, your most obedient and humble servant,

ROBERT MORRIS.

TO B. FRANKLIN.

Office of Finance, September 27th, 1782.

Sir,

I have the honor to enclose the copy of Acts of Congress of the 14th and 23d instant, together with the copy of my letter of the 30th of July, covering the estimates for the year 1783. These estimates are not yet finally decided on. By the Act of the 14th you are, as you perceive, instructed to communicate the resolution for borrowing four millions of dollars, to his Most Christian Majesty; and first, to assure his Majesty of the high sense, which the United States in Congress assembled entertain of his friendship and generous exertions. Secondly, their reliance on a continuance of them; and thirdly, the necessity of applying to his Majesty on the present occasion.

From this, and even more particularly from the Act of the 23d, you will see, that it is the wish of Congress to obtain this money from or by means of the King. After the decisive expressions contained in those resolutions, of the sense of our Sovereign, I am sure that it is unnecessary for me to attempt anything like argument to induce your exertions. I shall, therefore, rather confine myself to giving information. The grateful sense of the King's exertions, which has so warmly impressed your bosom, operates with undiminished force upon Congress; and what is of more importance, in a country like ours, has the strongest influence upon the whole whig interest of America.

I have no doubt but that the King's Minister here has given his Court regular information on this and every other subject of equal importance, and, therefore, any general assurances on your part will be complimentary, and in some degree superfluous. But there is a kind of knowledge not easily attainable by foreigners in any country, particularly on such a matter as the present. It is not amiss, therefore, that I should convey it to you, and your good sense will apply it in the most proper manner. You (of all men in the world) are not now to learn, that the sour English prejudices against everything French had taken deep root in the minds of America. It could not have been expected that this should be obliterated in a moment. But by degrees almost every trace of it has been effaced. The conduct of Britain has weaned us from our attachments, and those very attachments have been transferred, in a great measure, to France.

Whatever remains of monarchical disposition exist, are disposing themselves fast to a connexion with the French monarchy; for the British adherents begin to feel the pangs of a deep despair, which must generate a deep aversion. The British army here, felt the national haughtiness increased by the contempt which, as Englishmen, they could not but feel for those who had combined against the freedom of their own country. Every part of their conduct, therefore, towards the tories, while they flattered themselves with victory showed how much they despised their American friends. Now that a reverse of fortune has brought on a little consideration, they find a total separation from this country unavoidable. They must feel for the fate of their country; they must, therefore, hate, but they must respect us, too; while their own adherents are both detested and despised. Since General Carleton's arrival, or rather since the change of Ministers, the British have shown that their intention is, if possible, to conciliate the rulers of America; and by the influence of a common language and similar laws, with the force of ancient habits and mutual friendships not yet forgotten, not only to renew again the commercial intercourse, but to substitute a new federal connexion to their ancient sovereignty and dominion.

The assurance, therefore, which Congress have directed you to make, must not be considered in the number of those idle compliments, which are the common currency or small change of a Court. It is an assurance important because it is founded in truth, and more important still because it is dictated by the affections of a people. If I may venture an opinion still further, it is principally important because of the critical situation of things. The sudden change of Britain from vengeance and war to kindness and conciliation must have effects; and those effects, whether they be contempt or affection, will depend less, perhaps, on them than upon others. It cannot be doubted that they will ring all the changes upon their usual theme of Gallic ambition. They will naturally insinuate the idea, that France will neglect us when we have served her purposes; and it would be very strange if they did not find some converts among that class of people who would sacrifice, to present ease, every future consideration. What I have said will, I am confident, put your mind into the train of reflections, which arise out of our situation, and you will draw the proper conclusions and make a proper appreciation of them.

Congress have directed you further, to express to the King their reliance on a continuation of his friendship and exertions. I have no doubt that a full belief of this reliance will be easily inculcated. Indeed, I apprehend, that we shall be considered as relying too much on France, or in other words, doing too little for ourselves. There can be no sort of doubt, that a good argument may be raised on the usual position, that the nation which will not keep itself, does not merit the aid of others; and it would be easy to tell us, that we must put our own shoulders to the wheel before we call upon Hercules. In short, if the application be refused or evaded, nothing can be easier than to assign very good reasons why it is done. But you have very justly remarked in one of your letters, that it is possible to get the better in argument, and to get nothing else. So it might be here. True sagacity consists in making proper distinctions, and true wisdom in taking determinations according to those distinctions. Twenty years hence, when time and habit have settled and completed the federal constitution of America, Congress will not think of relying on any other than that Being, to whose justice they appealed at the commencement of their opposition. But there is a period in the progress of things, a crisis between the ardor of enthusiasm and the authority of laws, when much skill and management are necessary to those who are charged with administering the affairs of a nation. I have already taken occasion to observe, that the present moment is rendered particularly critical by the conduct of the enemy; and I would add here, (if I dared even in idea to separate Congress from those they represent,) that now above all other times, Congress must rely on the exertions of their ally. This sentiment would open to his Majesty's Ministers many reflections, the least of which has a material connexion with the interests of his kingdom. But an argument of no little weight, is that which applies itself directly to the bosom of a young and generous prince, who would be greatly wounded to see that temple, dedicated to humanity, which he has taken so much pains to rear, fall at once into ruins, by a remission of the last cares, which are necessary for giving solidity to the structure. I think I might add, that there are some occasions on which a good heart is the best counsellor.

The third topic on which Congress have directed you to dwell upon, is the necessity of their present application; and it is this which falls most particularly within my department; for I doubt not that every sentiment on the other objects, has been most forcibly inculcated by the Minister of Foreign Affairs. I might write volumes on our necessities, and not convey to you so accurate an idea, as by the relation of a single fact, which you may see in the public newspapers. It is, that the requisitions of last October for eight millions, had produced on the 1st day of this month only one hundred and twentyfive thousand dollars. You are so perfectly a master of everything, which relates to calculation, that I need not state anything of our expenses. You know also what were our resources beyond taxation, and therefore you have every material for forming an accurate idea of our distresses. The smallness of the sum which has been paid will doubtless astonish you; and it is only by conversation or a long history that you could see why it has been no greater. The people are undoubtedly able to pay, but they have easily persuaded themselves into a conviction of their own inability; and in a government like ours the belief creates the thing.

The mode of laying and levying taxes are vicious in the extreme; the faults can be demonstrated; but would it not be a new thing under the sun, that people should obey the voice of reason? Experience of the evil is always a preliminary to amendment, and is frequently unable to effect it. Many who see the right road, and approve it, continue to follow the wrong road, because it leads to popularity. The love of popularity is our endemial disease, and can only be checked by a change of seasons. When the people have had dear experience of the consequences of not being taxed, they will probably work the proper amendment, but our necessities in the interim are not the less severe.

To tell America in such a situation, that she should reform her interior administration, would be very good advice, but to neglect affording her aid, and thereby to lose the capital objects of the war would be very bad conduct. The necessity of the present application for money arises from the necessity of drawing by degrees the bands of authority together, establishing the power of government over a people impatient of control, and confirming the federal union of the several States, by correcting defects in the general constitution. In a word it arises from the necessity of doing that infinite variety of things, which are to be done in an infant government, placed in such delicate circumstances, that the people must be wooed and won to do their duty to themselves, and pursue their own interests.

This application also becomes the more necessary, in order to obviate the effort of that British faction, which the enemy are now attempting to excite among us. Hitherto indeed they have been unsuccessful, unless perhaps with a very few men, who are under the influence of disappointed ambition, but much care will be required when their plans are brought to greater maturity. The savage inroads on our frontiers have kept up the general horror of Britain. The great captures made on our coasts have also rather enraged than otherwise, though such captures have always the twofold operation of making people wish for peace as well as for revenge. But when the enemy shall quit our coasts, (and they have already stopped the inroads of their savage allies,) if the people are urged at once to pay heavy and unusual taxes, it may draw forth and give weight to arguments, which the boldest emissaries would not at present hazard the use of.

I have already observed, that Congress wish to obtain this money either from or by means of the King. The most cautious prudence will justify us in confiding to the wisdom of his Ministers the portrait of our situation. But it might not be very wise to explain to others those reasons for the application, which lie so deep in the nature of things, as easily to escape superficial observers. I shall enclose a copy of this letter to Mr Adams, and you will find a copy of what I say to him on the subject. I hope the Court will take such measures as to render any efforts on his part unnecessary; but you and he must decide on what is best for your country.

I must trouble you still further on this subject, with the mention of what you will indeed collect from a cursory reading of the resolutions, that Congress have the strongest reason for their procedure, when they direct your utmost endeavors to effect this loan, notwithstanding the information contained in your letters. If the war is to be carried on, this aid is indispensable, and when obtained, will enable us to act powerfully in the prosecution of it. If a peace takes place, it is still necessary, and as it is the last request which we shall then have occasion to make, I cannot think it will be refused. In a word, Sir, we must have it.

With perfect respect, I have the honor to be, &c.

ROBERT MORRIS.

TO B. FRANKLIN.

Office of Finance, September 27th, 1782.

Sir,

By my letter of this date you will be informed of the intentions of Congress, to provide for a principal part of the expenditures of the year 1783, by loan. I expect that you will be able to obtain the four millions of dollars, either from the Court, or by their assistance. I wish for an immediate deposition of a part in the following manner. That the Court of Spain should give orders for the shipment of a million of dollars at the Havana, free of duties, and be convoyed by one or more ships of the line to an American port; the money to be paid to them during the year, in Europe; I wish this order may be so expedited, as that Captain Barney, in the Washington, by whom this letter goes, may carry it out to the Havana, and receive the money, which will by that means arrive here some time during the winter, and of course will, I expect, come safely as well as seasonably. I wish that a half million of dollars may be paid to Messrs Le Courealx & Co, as soon us possible, to enable them to execute my orders as to particular negotiations, which I commit to them. Whatever else of the money is obtained in France, will of course be paid to Mr Grand, subject to my orders. If any part of the money be negotiated in Holland, it will be, I suppose, proper to leave it in the hands of those who negotiate the loan, subject to my further disposition.

I am, Sir, &c.

ROBERT MORRIS.

TO B. FRANKLIN

Office of Finance, September 30th, 1782.

Sir,

It is in some respects fortunate, that our stores were not shipped, because, as you observe, they might have been taken; but I hope they are now on the way, for if they are to lie in France at a heavy expense of storage, &c. while we suffer for the want, it will be even worse than if they were taken. You will find by the letters, which are to go with this, that Mr Barclay is prohibited from making any more purchases on account of the United States. I confess, that I disapprove of those he has made; for the purchase of unnecessary things because they are cheap, appears to be a very great extravagance. We want the money as much as anything else, and the world must form a strange idea of our management, if while we are begging to borrow, we leave vast magazines of clothing to rot at Brest, and purchase others to be shipped from Holland. I have said nothing on this subject to Mr Barclay, because the thing having been done, could not be undone, and because the pointed resolutions of Congress on the subject, will prevent any more such operations.

What I have now said, however, will I hope lead you to urge on him the necessity of making immediate shipments of all stores in Europe. A merchant does not sustain a total loss of his goods by their detention, but the public do. The service of the year must be accomplished within the year, by such means as the year affords. The detention of our goods has obliged me to purchase clothing and other articles at a great expense, while those very things were lying about at different places in Europe. I am sure that any demand made for money on our part, must appear extraordinary, while we show so great negligence of the property we possess. The funds, therefore, which were obtained for the year 1781, are not only rendered useless during the year 1781, but so far pernicious, as that the disposition of them will naturally influence a diminution of the grants made for the year 1782.

You mention in yours of the 25th of June, that you would send enclosed the account of the replacing of the Lafayette's cargo, if it could be copied in season. As it did not arrive I shall expect it by the next opportunity.

I have received Mr Grand's accounts, which are not settled in the manner I wish; and in consequence I have written to him by this opportunity to alter them. I have desired him to give your account credit for every livre received previous to the current year, including therein the loan of ten millions of livres in Holland, though a part of it may not have been received until this year. I have desired him to debit your account for every expenditure made by your order, which will include all your acceptances of bills, &c. and of course M. de Beaumarchais' bills, if they shall have been paid. Finally, I have desired him to carry the balance of your account to mine, in which he is to credit all moneys received for the current year; for instance, the six millions (and the other six if they are obtained) together with such moneys as may come to his hands, from the loan opened for the United States, by Messrs Willink, Staphorst, & Co.

I did expect to have had some kind of adjustment made by this time of Captain Gillon's affair; but Congress referred much of it to a committee, with whom it has long slept; but I have informed Mr Gillon, that I must have a settlement, and at present I wait a little for the determination of Congress.

You mention to me, that the interest on the ten millions, Dutch loan, is payable at Paris annually on the 5th of November, at four per cent. I must request you to send me the particular details on this subject, such as who it is payable to, and by whom, that I may make proper arrangements for a punctual performance, so as not to incur unnecessary expense. I presume that the first year's interest may be discharged before this reaches you; but at any rate I enclose a letter to Mr Grand, to prevent any ill consequences, which might arise from a deficiency of payment.

I informed you, in mine of the 1st of July, that Congress had resolved to appoint a Commissioner to settle the public accounts in Europe. This is not done, but they have reconsidered and committed the resolution. Where the thing will end, I do not know. I think, however, that eventually they must send over some person for the purpose.

The appearances of peace have been materially disserviceable to us here, and general cautions on the subject from Europe, and the most pointed applications from the public officers, will not prevent that lethargy, which the very name of peace extends through all the States. I hope measures will be taken by our public Ministers in Europe, to prevent the people from falling into the snares which the enemy has laid. Undue security in opinion, is generally very hurtful in effect, and I dread the consequences of it here, if the war is to be carried on, which is not improbable.

I am, Sir, &c.

ROBERT MORRIS.

TO B. FRANKLIN.

Office of Finance, October 1st, 1782.

Sir,

In my letter of the 27th of September last I expressed my wish, "that the Court of Spain should give orders for the shipment of a million of dollars at the Havana, free of duties, and to be convoyed by one or more ships of the line to an American port," &c. Upon further reflection, I am induced to believe that the Court of Spain will not go into the whole of this arrangement; for although they may, and probably will, agree to so much of it as will procure them an equivalent in France for the one million dollars, to be shipped from the Havana, yet there are reasons to doubt whether they will convoy the Washington hither. I wish, therefore, (should you meet with difficulties in that quarter) to apply to the Court for such convoy. I wish it may consist of a ship of the line, because none but frigates will cruise on this coast during the winter, and therefore a ship of the line will afford more protection than two or three frigates. However, this will depend entirely on the convenience or inconvenience which may attend the business. I shall communicate both this letter and that of the 27th, to the Chevalier de la Luzerne, on whose representations I rely much, as well for procuring the aid asked for, as for accomplishing the necessary arrangements after it is procured.