Part 22

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.

I am, Sir, &c.

ROBERT MORRIS.

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TO M. DE LA LUZERNE.

Office of Finance, October 2d, 1782.

Sir,

I have the honor to enclose for your Excellency's perusal, the copies of letters from this office to Dr Franklin, of the 27th of last month and the 1st instant. I am to entreat, Sir, that you will represent to your Court the necessity of the application, which Congress have directed their Minister to make for four millions of dollars. The resolutions on the subject have, I suppose, been communicated to you by the Secretary of Foreign Affairs. I have, also, to request that you will facilitate the arrangements proposed in my letters already mentioned, the advantages of which are so well known to you that I shall not dwell on them.

With real esteem and respect, &c.

ROBERT MORRIS.

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TO ALEXANDER HAMILTON.

Office of Finance, October 5th, 1782.

Sir,

I have now before me your letters of the 14th and 21st of last month. I am sorry to find that you are less sanguine in your pecuniary expectations than the Governor appears to be; for I have always found that the worst forebodings on this subject are the truest.

I am not surprised to find that the contractors apply with their paper, in the first instance, to the receivers and collectors. This I expected, because much of that paper is not fit for other purposes. Some of it, however, which is payable to the bearer, is calculated for circulation, which you observe, is not so general as otherwise it might have been, by reason of the largeness of the sums in the notes. Mr Duer's letters contain the same sentiment.

In issuing this paper, one principal view was to facilitate the payment of taxes, by obviating the too general, though unjust, complaint of the want of a circulating medium. In substituting paper for specie, the first obstacle to be encountered, was the difference which has arisen from the late profusion of it. Had a considerable quantity been thrown into the hands of that class of people, whose ideas on the subject of money are more the offspring of habit than of reason, it must have depreciated. That this apprehension was just, is clear from this fact, that the paper I first issued, and the bank paper which came out after it, did depreciate from ten to fifteen per cent in the Eastern States, notwithstanding all the precautions which were used. If I had not taken immediate measures to create a demand for it on the spot, and to stop issues to that quarter, its credit would have been totally lost for a time, and not easily restored. Besides that the quantities, which were pouring in from thence would have done mischief here. Confidence is a plant of slow growth, and our political situation is not too favorable to it. I am, therefore, very unwilling to hazard the germ of a credit, which will in its greater maturity become very useful. If my notes circulate only among mercantile people, I do not regret it, but rather wish that the circulation may be for the present confined to them and to the wealthier members of the professions.

It is nothing but the greater convenience, which will induce people to prefer any kind of paper to the precious metals, and this convenience is principally felt in large sums. Whenever the shop-keepers in general discover that my paper will answer as a remittance to the principal ports, and will be readily exchanged by the receivers, they will as readily exchange it for other people. When the people in general, find that the shop-keepers receive it freely, they will begin to look after it, and not before. For you must know, whatever fine plausible speeches may be made on this subject, the farmers will not give full credit to money merely because it will pay taxes, for that is an object they are not very violently devoted to; but that money that goes freely at the store and the tavern, will be sought after as greedily as those things which the store and the tavern contain.

Still, however, your objection remains good, that the trafficking in which the greater part of the community engage, do not require sums so large as twenty dollars. This I shall readily acknowledge; but you will observe, that there is infinitely less danger that notes, which go only through the hands of intelligent people will be counterfeited, than small ones that come to the possession of illiterate men. When public credit is firmly established, the little shocks it receives from the counterfeiters of paper money, do not lead to material consequences; but in the present ticklish state of things, there is just ground of apprehension. Besides this, the value of paper will depend much upon the interchanges of it for specie; and these will not take place when there is a circulation of small paper. Lastly, I have to observe, that until more reliance can be placed on the revenues required, I dare not issue any very considerable amount of this paper, lest I should be run upon for more than I could answer; and as the circulation of what I dare issue, by increasing the general mass, enables people (as far as it goes) more easily to get hold of other money, it consequently produces, in its degree, that object of facilitating taxation, which I had in view.

I am, Sir, &c.

ROBERT MORRIS.

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TO B. FRANKLIN.

Office of Finance, October 7th, 1782.

Sir,

Captain Barney having been detained until this day, and it being probable that he will not arrive in Europe so early as I expected, I am very doubtful whether it would be proper to send him to the Havana, but think it would be better he should return immediately hither, because it is likely that the negotiation I proposed will consume more time than he can spare. His ship is small, but she sails remarkably well, and will, therefore, give us a good chance of being well informed of the situation of our affairs.

If there is likely to be any delay or difficulty in the Havana plan, it will be best that you endeavor to obtain the shipment of a considerable sum in Europe on board some of the King's frigates. At any rate, we must have money, and I think you may venture fifty thousand crowns by this vessel. You will see that Captain Barney is put under your directions, and is to wait your instructions; but I must at the same time inform you, that Congress have directed his ship to be purchased and sent to France, among other things, for the purpose of obtaining a better communication with their servants, and more frequent and accurate intelligence from Europe. You will see, therefore, the propriety of despatching her as speedily as possible, and I think we may, probably, fall upon ways and means to afford you frequent opportunities of writing with a great chance of security.

I am, Sir, &c.

ROBERT MORRIS.

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TO GEORGE WASHINGTON.

Office of Finance, October 15th, 1782.

Sir,

I have received your letters of the 2d, 3d, and 7th instant. There is no man in America, more heartily disposed than I am to remove from the army and from all others who have claims on the public, every just ground of complaint. But with the means in my power, how is it possible? I have been obliged to submit to cancelling one contract and forming another, at one third advance on the former price, for the want of a mere trifle, compared with what we had a right to expect. I am in advance on credit to an amount, which you can scarcely form an idea of, although I have declined every expenditure not indispensable.

That part of the late arrival of clothing, which is unfit for soldier's use, is now selling to pay debts contracted by the clothing department during my administration. Among these debts are twelve thousand dollars for needle work done by people in extreme indigence. The clothing which arrived fit for the officers' wear, was inadequate to the purpose of clothing them all. The division must have created confusion and raised disputes. If this had not been the case, still it would have been liable to the inconveniencies attending partial payments, and we should have been justly reproached for having broken repeated promises, that no such payments should take place. Congress have done all in their power to procure money for the army. My own efforts I shall not dwell upon. If money is obtained, that will produce satisfaction; I am sure that nothing else will.

My credit has already been on the brink of ruin. If that goes, all is gone; but if it can be preserved, there will, in the last necessity, be some chance of making advances on credit to the army, as well as to others. Thus, Sir, you will see that I look forward as far as my distressed situation will admit; but after all, if the States cannot be prevailed on to make greater exertions, it is difficult to see where the thing is to terminate.

I have this day commissioned Major Turner as Marine Commissary of prisoners, and I trust he will soon be in capacity to prevent your Excellency from having any further trouble on that subject.

I am, Sir, with sincere respect and esteem, &c.

ROBERT MORRIS.

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TO THE GOVERNOR OF NORTH CAROLINA.

Office of Finance, October 7th, 1782.

Sir,

Since the receipt of your favor of the 20th of August last, I have received copies of a correspondence between yourself and Colonel Carrington on the subject of specific supplies. The disposition which you have expressed, (in your letter to me, and which indeed breathes through your whole correspondence) to promote those plans of regularity and economy, which Congress have adopted, command my sincere acknowledgements.

I perceive that there is a difference of opinion between the officers of the continent and your State on the receiving specific supplies, which I attribute principally to some misunderstanding of the matter. The specific supplies called for by Congress in their several resolutions on that subject are undoubtedly receivable, and ought above eighteen months ago to have been received, on the requisitions which were made at the rates for that purpose mentioned. Such as it may now suit any State to deliver on those requisitions, ought in like manner to be carried to account. But it is very clear, that they cannot be received on account of the subsequent money requisitions. The several quotas of the eight millions asked for last year, to supply the current expenditures of the year 1782, must be paid in cash, or what is equivalent to it, in my notes or bank notes. I cannot consent to receive anything else. It is by this means alone, that economy can be established, order restored, and confusion, that parent of fraud, too apt to introduce itself into public accounts, banished and destroyed.

I incline to think, that as Congress have determined to have all accounts settled and liquidated to the end of the year 1781, your State would rather choose to attend only to the money requisition, and leave the further delivery of specifics to a liquidation of the old accounts; but if not, there can be no doubt but the specifics will be received, and in such case I will give the gentleman whom I shall appoint as Receiver of taxes in your State, instructions how to dispose of them; but I must again repeat, Sir, that I will not accept one particle of them in abatement of the State quota for the year 1782.

Before I close this letter I must take the liberty to mention a matter, which suggests itself from one of your letters to Colonel Carrington. You tell him that you will continue the prohibition against sending certain things out of the State, in order that he may purchase for the United States on better terms. Now, Sir, while I feel it my duty to require justice for the United States it is equally my duty to take care that equal justice be done to the several States, individually considered, as well as to the individuals which compose them. I am, therefore, to request that all such restrictions be taken off. They sour people's minds, destroy the spirit of industry, impair by a rapid as well as a certain progress, the public wealth of the State, producing a dearth of the things embargoed, eventually enhance the prices far more than they could have been increased by any other mode. Whereas perfect freedom makes the people easy, happy, rich, and able to pay taxes, and the taxes when paid can be expended amid a plenty of products, and consequently be expended to advantage. I say a plenty of products because I know, that liberty to dispose of them to the greatest advantage will encourage men to raise them and produce a plenty. Your Excellency will, I hope, excuse reflections which arise from an ardent desire to promote the general welfare and happiness of all the inhabitants of the United States.

I have the honor to be, &c.

ROBERT MORRIS.

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TO MAJOR GENERAL GREENE.

Office of Finance, October 17th, 1782.

Dear Sir,

I have received your letter of the 1st of September, for which I pray you to accept my acknowledgements. Amid the many distresses and cares, which await every step of my administration, it is a great relief and consolation to have met with the support of those who command (and what is more, who worthily command) the armies of the United States. I have felt, my Dear Sir, your efforts to support my measures, and I know that they have been useful. I wish it were in my power to give to you and to your brave army that full relief, which their conduct, their sufferings, and above all, their patience, have merited.

I had intended to supply their subsistence, and the little contracts in Virginia, from the quota of that State, as the money there collected would have been nearest the spot where it was to be applied. But I need not tell you how deficient that State has been. The consequence is, that I must endeavor to supply the deficiency from other sources, which I am now doing; but in the precarious state of things at present, there is no reliance to be placed on any measure. I suppose, however, that the evacuation of Carolina will enable you to move northward, with a considerable part of your army; these will, I hope, meet the relief intended. I shall direct a statement of the whole to be made out by the Pay Master General, and do whatever may lay in my power; but as to pay, my inviolable determination is, that the whole army shall equally share whatever is disposed of in that way.

The disposition of the State of North Carolina to pay in specie, is far from being peculiar to that State. Attempts of the same kind have been made by others; and they have invariably been opposed and shall be. There is however a distinction to be taken. You recollect that Congress called for large quotas of specie. I am perfectly persuaded, that no State has fully obeyed that call, but many, and indeed almost all, aver that they have overpaid. The last requisitions have been for money; and if I had not by the publications prevented such assertions, it would not be surprising, that they should be repeated, even as to the money quotas. Now if the State of North Carolina are desirous of paying in specie, on the requisitions of specie, I shall not have the least objection; but on the requisitions for the service of the current year, I will receive money alone. I make this distinction in such clear and peremptory terms, to avoid all further cavils on the subject. I see that it has already been drawn into some length, and must, therefore, be finally terminated. Besides, under the present appearances there can be little doubt, that specie in North Carolina will be almost as useless as if they were in Otaheite. A copy of my letter to Governor Martin on this subject shall be enclosed to you.

You have in several of your letters, made very just observations on the business of my department, and such as convince me you have turned your attention to it. I have therefore taken the liberty to enclose to you a copy of a letter to Congress, on the subject of a mint, of one on the establishing public credit by funding our debts; and of a third, on the estimates for the ensuing year.

As there is a report, that the enemy got several letters intended for you, it is possible that some or other of those, may be among the number.

I pray you to believe me, with very sincere esteem, your most obedient servant,

ROBERT MORRIS.

* * * * *

GEORGE WASHINGTON TO ROBERT MORRIS.

Head Quarters, October 18th, 1782.

Sir,

I take the liberty to enclose to your care, a letter for the Chevalier de la Luzerne, on the subject of expense, which at his request I have incurred, for the purpose of forwarding intelligence of the movements of the enemy at New York, to the Marquis de Vaudreuil.

If our circumstances would admit, I should be very glad that this expense should be defrayed by the United States; it is infinitely short of the debt, which gratitude imposes on us. I submit therefore to your judgment, whether to deliver the enclosed, or to send forward the money from your own funds, agreeably to the monthly estimate sent to the Minister.

The chain of expresses was instituted about the middle of August, and will probably be continued till the sailing of the French fleet from Boston.

I am, &c.

GEORGE WASHINGTON.

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CIRCULAR TO THE GOVERNORS OF THE STATES.

Office of Finance, October 21st, 1782.

Sir,

I have on many occasions warned the States of the consequences which must follow from delays in supplying the treasury. The expense which attends such delays, has frequently been mentioned, and instances daily occur to show, how much the public burdens are increased by the want of a timely provision. To cite them all would be endless; but there is one of no inconsiderable magnitude, which I think it proper to state for your consideration. I had contracted on the part of the United States for the supply of rations to the main army, at ten pence Pennsylvania currency, and to the garrison at West Point for nine pence half penny, and had agreed to pay, at the commencement of each month for the issues of the preceding month.

These beneficial contracts have been dissolved by my inability to make punctual payments, which rendered the contractors incapable of performing their engagements. After many efforts on my part to supply the want of cash, and on their part to substitute private credit and promises in the place of ready money, they found it impracticable to proceed further on the moderate terms stated in the contract. Some of them told me so, and asked (what any persons in their situation would have asked) _the promise of indemnification for any damages they might sustain_. And a promise to pay at the end of each month, one half the amount of issues for the preceding month in coin, and three times the remaining half in bills or notes receivable in taxes. They offered if I would agree to these propositions, to go on and supply the army; but declared, that if I would not, they could no longer perform their engagements.

From this moment I was obliged to consider the contract as dissolved; because the dissolution of it appeared inevitable. I had already by entering into the contract, promised on the part of the public, a payment of the whole money due for the monthly issues. A new promise of the half would have given no additional security, and therefore I considered that stipulation as a request, that I should on my private and personal honor, assure them the public funds would enable me to make such payments. But of this I had no good prospect. The greater part of what little came in from taxes, was the same kind of paper with that which they asked for, being what I had long before issued for other services. If indeed I could have trusted the assurances made to me, I might have given the assurances required by them. But experience had taught me caution, and the event has shown, that if I had made the promise, I should now have been chargeable with falsehood.

I think the contractors were prudent in requiring a promise of indemnification; their situation made it necessary; but it was a promise which I could not make, for although I had reason to confide in their integrity and would have done it in my private capacity, yet as a public officer, I could not. For there would have been no longer certainty of the extent to which their expenditures might have been carried, after it should have become a matter of indifference to their private interest what prices should be given for supplies.

Thus, Sir, I found myself reduced to the alternative of making a new agreement for subsistence of the army and garrison, or of leaving them to subsist themselves by military collection. The latter was to be avoided, if possible, for it would have been the most expensive mode of obtaining supplies, not to mention other circumstances. The former, therefore, was to be adopted, and I accordingly gave instructions to Mr Cornell, the inspector of the contracts, to consult with the Commander in Chief, and take the necessary arrangements. It could not be expected, that a contract dictated by necessity, could be made on economical terms, and the inability to perform old engagements would necessarily influence the rate of new ones. Besides this, it was indispensably necessary to obtain a longer credit, because otherwise the burden would have been shifted, not removed; and the evil must have returned with equal speed and greater magnitude. Under such unfavorable circumstances, it was necessary to pay for a credit in order to obtain it. A new contract is made, and the rations issued now, are to be paid for three months hence, at the rate of thirteen pence, Pennsylvania currency, for a ration; which is an advance of about one third upon the former price. The public therefore will pay for this advance of moneys, equal to feeding the army at the rate of thirtythree and one third per cent for three months; or, to make the matter more simple, they must pay for feeding them three months, as much as would have fed them four months. Besides this, the public credit sustains material injury, and damages will be expected by the former contractors.