Part 5

As to the paper money, it is of no use, although it is necessary, for evident reasons, to receive it in taxes. But the confidence of the people is so entirely lost, that for the present no bills of credit whatever can be made use of as money. I hope that the taxes laid and collecting in most of the States, will bring in all this useless load by the middle of next summer; and I have some expectation, that the States of Massachusetts, Connecticut, Pennsylvania, and Delaware, will be entirely rid of it by the spring. If I could buy anything with it, I would not, until the last necessity; but it will buy nothing, so that it must be burnt as soon as it honestly can.

The picture I have already given of this country will not be pleasing to you. Truth bids me add, that it will admit of a higher coloring. But what else could be expected from us? A revolution, a war; the dissolution of government, the creating of it anew; cruelty, rapine, and devastation in the midst of our very bowels. These, Sir, are circumstances by no means favorable to finance. The wonder, then is, that we have done so much, that we have borne so much, and the candid world will add, that we have dared so much. I could take up much of your time in recapitulating many less matters, which have tended to weaken the exertions we have otherwise been capable of. The confused state of public accounts, and the deplorable situation of credit for want of funds to secure, or means to redeem, the debt, for which the public faith is pledged, are, however, of such important operation, that I must not pass them over in silence.

In the enclosures your Excellency will have perceived, that I have noticed the effects, which follow from the want of a final settlement of accounts. Representations on the subject of these accounts, and also of certificates given by public officers in the Commissary's and Quarter Master's Departments for articles taken from the people had been made by some of the States to Congress. The impost asked for by Congress was, I have already observed, for the funding of our debts. On the 13th of October, I wrote a letter to the several loan officers, in which I expressly prohibit the issuing of any more Loan Office certificates. The reason for this order will appear more clearly from the latter part of my letter to the several Governors of the 16th of October.

I do hope and expect, that some methods will speedily be adopted by the United States in Congress assembled for settlement of the public accounts, as also to liquidate the several certificates given by the public officers, and to provide revenues for funding the public debts. The last of these objects must not, however, be urged with too much rapidity. The impost law is not yet passed, and is the first step. When that shall have been taken, it will give room for urging what further may be necessary. In the meantime, there is a well grounded expectation, that the clamors of our creditors will induce the several Legislatures to comply with the requisitions of Congress upon that subject.

From what has been said, your Excellency will perceive, that the prospect of future supplies from the several States, is by no means very brilliant. I send you the Act of Congress of the 29th of October, calling for eight millions of dollars, the Act of the 2d instant apportioning that demand among the several States, and the Act of the 12th instant, repealing (in consequence of my letter of the 5th) a part of the Act of the 2d. My circular letter of the 17th, enclosing those Acts to the Governors, will close what I have to say on the subject. But I must observe to you on my letter of the 5th to the President of Congress, that although it is strictly true, that I had not seen the estimates as mentioned in that letter, yet it is equally true, that until the business was nearly completed, I was supposed to have seen them, and when the contrary was suggested, they would have been sent from Congress, but that so few States were represented, as that only the number absolutely necessary to pass such requisitions were then present, and some of the representatives of those few were about to depart, wherefore it was waved. I have further to remark on the estimates themselves, that they are only for the feeding and paying the army. The expense of recruiting that army, of moving it from place to place, the heavy articles of clothing and ordnance, with expense of the hospitals, and the long train, which is comprehended under the title of contingencies, is totally unprovided for. Defective as it is, I have no hope that it will be complied with. The great arrearage of unfunded debt, the cumbrous load of useless paper, the multiplied mass of certificates, the distracted situation of the more southern States, the ravages which have been made in them, the total loss of their commerce, the real want of coin in many States, and the equal want of system in all. These, Sir, are circumstances, which forbid the most sanguine temper to expect a full compliance. It shall be my business, as it is my duty, to get as much as I can, and for this purpose, I shall make compositions; where it is necessary, take articles of provisions in lieu of money and the like. Still, however, I am convinced, that I shall not get what is asked for, and indeed I do not expect any part of it, before the middle of next campaign.

I have said, that I will make some remarks on the supplies already furnished by France. It is necessary to do this, as well because I am so unfortunate as to differ a little in opinion on the subject with the Minister of his Most Christian Majesty here, as because the demands we are to make on the Court for the next year, will depend on the compliances, which have been, and shall be, made with the grants for the present year.

It was a point understood in Congress very early, that his Most Christian Majesty would pay the interest of certain moneys to be borrowed by Congress in America. Your Excellency knows better than any other man what passed on that subject. It would, therefore, be absurd in me to recapitulate it. Those circumstances which rendered an express stipulation improper then, have introduced much delicacy into it now; and, therefore, I do not expect that the Court will recur to a formal acknowledgement of what was then, perhaps, rather a personal, than national, obligation. But I do expect that the payment of that interest will be provided for as heretofore, without considering the moneys appropriated to that purpose, as a relief to us in carrying on the war. You will have seen, Sir, from the course of my letters how much it is an object with me to collect from ourselves the revenues necessary to lighten our debts. There is a variety of reasons for it, which I will not repeat. Among them, however, this is one, that I wish to remove the load from France to ourselves. It will in the end be the same thing; because, in proportion as our resources here are appropriated, we must ask help there. But it would be better, that the people were taught to look at home for the basis of national credit, because there alone it can be found. I should not have mentioned this matter, but that you will find it noted in the correspondence between the Chevalier de la Luzerne and myself, of which copies are enclosed.

Shortly after the arrival of M. Gerard, it was understood that France would supply us with the clothing and warlike stores which might be necessary, and therefore it was, that Colonel Laurens, when in France, labored to prevent a deduction from the subsidy of six millions on account of the articles furnished to him. As I am persuaded that his efforts were in consequence of your advice, and in concert with you, I shall say nothing more upon that subject, only to lament that the Court have differed from you in opinion, and to acquiesce in their determination, on the principle, that those who give have a right to dispose of that which is given.

By a note from the Count de Vergennes, of which I enclose a copy, I perceive that the Court granted the United States as a gift, six millions; advanced to you four millions to pay the bills which might be drawn on you; and became security for a loan of ten millions; the amount of which was to be advanced from the royal treasury, in case the loan should fail of success. The expression, as to this last object, is strong, namely, _that his Majesty will see himself under the necessity of supplying the deficiency_, although, in the former part of the note it is said, that he will supply it from his own finances _as soon as possible_. An expression which, while at the first blush it makes an earnestness of affection, may be, and in fact has been, construed into a kind of cautionary provision. Your Excellency will also, I doubt not, observe what is there said of the appropriation of the gift, the last two millions whereof, as is already observed, we did not expect to find there.

Enclosed also is an account delivered by the Minister of France in the month of September to a committee of Congress, which had been appointed to confer with him. There are striking differences between this account and the note last mentioned. But by this account it appears, that it was the design of the Court to make the advances of the present year distinct from all past transactions. From whence this conclusion, at least, will follow, that such of the bills drawn by Congress, either on yourself, or on their agents in Spain, or Holland, as you may have discharged before the commencement of the present year, are not to be deducted from the sums mentioned in the Count de Vergennes' note. Now that I am on this subject, I will observe to you, Sir, that I have determined to prevent that circuitous negotiation of bills, which has so much perplexed and distressed you, and have for that reason stopped many of those already drawn, as will presently appear. Another observation to be made on this account is, that no notice is taken of the four millions expressly mentioned in the Count de Vergennes' note, as granted to you for payment of bills drawn by Congress.

A third observation is, that the articles marked B, and the article number two, C, which together amount to the sum of six million, six hundred and eightysix thousand one hundred and nine livres, are all charged as being expended to the order of Colonel Laurens. But by the Count de Vergennes' letter to you of the 8th of June last, it appears, that Colonel Laurens was to have had the command of no other than the six million livres, given by the King. Indeed the Count's note of the 16th of May shows the same thing. The letter of the 8th of June just mentioned, shows clearly the opinion of the Court on another point of very great importance, namely, that the whole ten million livres, to be advanced for the loan, are, as in effect they ought to be, subject to the disposition of the United States only. A fourth observation is, that the article A three, B two, and C one, amounting to four millions three hundred thousand livres, were, or were to have been, in your possession for payment of bills. If to this be added four million livres, granted for that express purpose, of which no mention is made in the account, it would follow, that you would have eight millions three hundred thousand livres at your disposal; and this leads me to consider the amount of the demands, which could be made on you.

These cannot be precisely ascertained, but the paper number seventeen, contains the best estimate, in my power. The first six articles of this estimate contain all the bills, which have been drawn upon you, excepting some interest bills, which although made out had not been delivered to the people before the 1st of April last. These amount to ten millions six hundred and seventyone thousand four hundred and fiftysix livres, thirteen sols, four deniers. The article number seven, is the whole amount of guilders drawn for; the far greater part of which I have detained, as you will perceive by the article number eight. The balance it is not possible to ascertain exactly in livres, because it must depend upon the course of exchange; but at two livres for a guilder, the whole of the bills actually negotiated on Holland will amount to one million ninetyfour thousand seven hundred and twentynine livres. The article number nine, is the amount of bills drawn on Spain, of which a considerable part has been paid by Mr Jay, and a part, somewhat more considerable, is destroyed. These parts are contained in the articles ten and eleven. The balance (calculated at the value of a dollar in France, which will, I suppose, be as much as it can cost) amounts to one million seventyseven thousand two hundred and eighteen livres. So that the whole of those bills, which by any means whatever could have come upon you for payment, will be twelve millions eight hundred and fortythree thousand four hundred and three livres, thirteen sols, four deniers, and from this sum very considerable deductions are to be made. The article number twelve, which is the first of them, contains the exact amount of the several bills for interest, which were negotiated previously to the first of April last.

It may be objected, that these bills will many of them be payable during the present year; which indeed, is true, and for that reason, I have added to the bottom of the account the extent of one year's interest on Loan Office certificates, and which is more than will, I believe, be presented. The next article, number thirteen, is for bills which had been drawn on you, and have been stopped by me. The article, number fourteen, is, you will perceive, for bills, which in all human probability will have been paid during the last year. The certainty of this transaction is doubtless with you, and what we are now upon is an estimate, not an account. The remaining articles speak clearly for themselves; wherefore I conceive myself well founded in making the amount of deductions in this estimate, nine millions one hundred and sixtythree thousand two hundred and sixtyfive livres; so that after including one year's interest, as is already mentioned, the total is five millions eight hundred and seventythree thousand one hundred and twentyeight livres, thirteen sols, and four deniers; and from this there must be some deductions, because undoubtedly you have paid some of the bills drawn on Spain and Holland before the first day of January last. I have mentioned no sum for this purpose, but in order to be within bounds, I will suppose it to be only three hundred and seventythree thousand one hundred and twenty eight livres, thirteen sols, and four deniers, and then the extent of the bills payable by you in the year 1781, will be five millions and a half of livres; and, therefore, the four millions granted by the Court, and the million and a half said to be stopped by you in Holland, will apply to this demand.

As the last mentioned sum appears by the Count de Vergennes' note, to have been part of that, which was given by the Court, this state of the matter will leave clear the ten million livres to have been loaned, and seems properly to consist with the Count's note of the 16th of May, and his letter to you of the 8th of June following. I have mentioned above, that in making the deduction for bills paid previous to the year 1781, I meant to be within bounds. It is proper to give a reason why I supposed that deduction to be so. I have already made one remark on the article A one two and F, in the account officially communicated by the Minister of France in September last. From those articles it appears at least that three million livres were advanced for the payment of bills last year. The amount of the interest bills, I have already stated as being in the extent, two millions one hundred and ninetythree thousand nine hundred and ninety livres, to this sum must be added one hundred and fortyfour thousand livres, due to M. Beaumarchais, and the one hundred and twentyfive thousand livres deducted in the estimate, as having been drawn for by the Resolutions of the 19th of May, 1780. These sums together amount to two millions four hundred and sixtytwo thousand nine hundred and ninety livres; to which I will add for contingencies one hundred and thirty seven thousand and ten livres more, making the whole amount two millions six hundred thousand livres; wherefore suppose the grant of moneys to pay bills for the year 1780, to have been but three million livres, and it appears evidently to have been at least that, there would have remained in your hands a balance of four million livres; which is more than I have deducted from the amount of my estimate.

On the whole, then, I conceive myself well grounded in the opinion, that the whole loan is still at our disposal, and this opinion is so well supported by the Count de Vergennes' letter to you, that I might with great propriety insist on that point. The letter, therefore, which I shall write with such act of Congress, as may be made, in consequence of yours of the 11th of June, will proceed entirely upon that supposition.

I must, however, remark to you in this place, that I by no means intend to insist rigidly with the Court, on points which may incommode them. We are neither in a situation to do it, nor would it be proper even if we were. But while I say this, I do not mean to preclude myself from such observations as my duty shall render necessary, on any transaction which has happened, or which may happen hereafter.

I enclose you an account, containing the extent of what I conceive to have been the appropriation of the supplies above mentioned, together with an invoice from the Board of War, amounting to the sum of one million seven hundred and seventyseven thousand five hundred and twenty livres and ten sols, and which I will call one million eight hundred thousand livres, from which it will appear, that there must remain, subject to my disposition, the sum of four millions at least, after replacing the Lafayette's cargo, and purchasing the articles mentioned in the invoice.

I have had the honor to mention to your Excellency, that I have the misfortune to differ in opinion with the Minister of France. This is upon two points, namely, the drawing of bills by me, and the amount of what may remain due by the Court. From the correspondence between us, which is contained in the enclosed papers, there will appear to have been some warmth on the occasion, but this rather arose from the nature of the transaction, than anything else. I know not what impression it may have left on his mind, but for my own part, as I greatly respect him, I sincerely feel for a situation, to which the orders of his Court have reduced him; and although the language of his letter of the 24th of November, evidently intended for his Court, was so pointed as to force me into the observations contained in mine of the 26th, in my own justification; yet I was almost as much wounded while writing, as he appeared to have been at reading it. I am much inclined to believe, that he wishes to place this business substantially in the same point of light that I do. The whole correspondence is enclosed, that you may be in a capacity to make any proper observations, which occasion may dictate.

Before I take up this correspondence more particularly, I must detain you one moment longer to mention the facts, which preceded it. Before my acceptance of the office I now hold, the Chevalier de la Luzerne informed me, that the Court had given money to the United States, with a determination that it should be at the disposal of General Washington, but that upon my acceptance, he would authorise me to draw for it. It was agreed between us, that I should draw for five hundred thousand livres, and so much be deposited to answer the drafts, and by giving him notice in season a new deposit of five hundred thousand livres should be made, and so on from time to time. Shortly afterwards, I formed a plan to get money from the Havana, and explained it to the Chevalier. He approved of it, and in consequence, I drew a bill on Messrs Le Couteulx & Co. the 17th of July, for five hundred thousand livres, but the capture of the Trumbull frigate prevented the negotiation of that bill, which being then on board of her, intended for Havana, was sunk with my despatches; and the knowledge that Colonel Laurens was then on his way with specie, together with the expectation of that, which was to be sent by the way of Holland, prevented a repetition of the experiment upon Havana at that time. It was previously to the 2d of July, 1781, that the Chevalier agreed that I should negotiate bills for one million five hundred thousand livres, of which the five hundred thousand livres to have been negotiated at the Havana, was a part.

You will see enclosed my letter of the 2d of July upon this subject, which was the day before M. de la Luzerne went to camp; and also M. de Marbois' answer to it. My reply of the 4th closes the matter at that time; and then it was understood on all hands in the manner I have just now mentioned, and which I have, you will perceive, insisted on through the whole of my correspondence, and which was equally insisted on in a variety of conversations.

That part of the letter last mentioned, which relates to the effect of drawing bills, together with the letters of the 2d and 3d of August, need no comment. They merely serve to show the desire, which animates the servants of the United States, to economise the resources of France. I am not disposed to criminate, but it is right that I should inform you of my opinion, which is, that the French troops in this country have cost much more than was necessary, if my information is not extremely erroneous. I have now in contemplation plans for feeding them more cheaply, and I think the French ration ought not to cost more than half a livre, at least not much more, if so much. The officers who now return to Europe can best answer, whether it has formerly exceeded that amount, and the Court must know how much has been lost on the negotiation of their bills. While on this subject it is my duty to add, that the Minister of France here, has demonstrated the most earnest desire to introduce economy in the expenditures of the army, and that the readiness shown by the Count de Rochambeau, and other general officers, to aid in it, demand acknowledgements.

On the 24th of September the Chevalier wrote me a note, of which a copy is enclosed. This, you will observe, was after the receipt of those letters, in consequence of which, he, among other things, communicated the account, on which I have already had the honor of making some remarks. This letter, while it assigns reasons for continuing my drafts, shows clearly that the Chevalier had communicated his instructions to stop them, which was done, not only to me, but to the committee. But I confess, that I was very far from considering those instructions as absolute. I concluded, that a line of discretion had been left to the Minister; and, indeed, his answer to my letter confirmed me in that opinion. This answer is of the 26th. He does indeed say, that _it is impossible to depart from the precise instructions received on that subject, and authorise my drafts to the amount of two millions five hundred thousand livres_; but he immediately goes on to permit an addition of two hundred and ninetyeight thousand nine, hundred and eightyone livres, fifteen sous, and four deniers. Wherefore, it followed, that either those instructions left him at liberty to extend those drafts, or that he was at liberty to disregard the instructions. I therefore did expect to have gone on to the sum first agreed for. These expectations were frequently mentioned in conversation, and particularly so in that alluded to in mine of the 22d instant.