Part 9

To coin money is a certain expense, and of course it is an expense, which must be borne by the people. In England the coin when melted will sell as bullion for just as much as its weight in other coin. The expense of coinage is paid by the Crown, and of course is raised by taxes from the people. In France the coinage instead of being expensive yields a profit. The price given for metal at the mint is about eight per cent less than the same quantity will yield when coined at the French standard. Both of these methods are liable to objections. When commerce demands an exportation of bullion from England, the coin of the kingdom goes out in common with others. This increases, of course, the national expense of coinage. Laws to prevent the exportation, or importation of any thing so valuable as money are always nugatory, because they always _can_ be eluded, and therefore when private interest requires it they always _will_ be eluded. That the guineas of England, therefore, are not continually going away is to be attributed to the extraordinary value affixed to gold, which has just been mentioned, and which banishes silver continually. In France the people are not liable to this inconvenience, because their money passing for more than its value in bullion, bullion will always be exported in preference to coin. But, for the same reason, there is always a strong temptation to imitate their coin and send it for the purchase of their commodities. It would be both impossible and unnecessary to distinguish the true from the false, because both would be of equal intrinsic value. The place at which they were struck would be indifferent to the receiver. Of consequence, the foreigner who made French coin, would gain; by his trade, and the French nation would lose proportionably.

The money paid for coining, or the coinage of France has, however, this advantage, that the money is a standard, which does not fluctuate with the price of bullion. This coinage is, as has been said, about eight per cent. When bullion is below ninetytwo, it is carried to the mint; when above ninetytwo, to the broker, or the silversmith. The coin still continues fixed, nor will it bear exportation until bullion rises to a hundred, when the French coin would be as liable to exportation as the English. In that case, it would be exported on one hand, while on the other no more would have been coined for a considerable period, because to make the eight percent coinage, it would be necessary that the mint price should be ninetytwo. The coin, therefore, could not long be exported, if at all, but would resume its value. The price of bullion must float between ninetytwo and a hundred, while the coin would preserve its fixed quality as money.

Hence then, it appears proper, that the price of coining should be defrayed by the coinage; because, first, it is natural and proper, that the price should be paid when the benefit is received, and that the citizen in return for the advantage of being ascertained in the value of the medium of commerce by the sovereign, should pay for ascertaining it, just as much as that he should pay for the fashion of the plate he uses, or the construction of the cart he employs. Secondly, it is right that money should acquire a value as money, distinct from that which it possesses as a commodity, in order that it should be a fixed rule, whereby to measure the value of all other things. And thirdly, it is wise to prevent the exportation of coin, which would involve an unnecessary national expense, and also to prevent the imitation of it abroad, so as to create a national loss. For both of which purposes, it is proper that the coinage should only defray the expense, without making any considerable profit. The laws usual in all countries, with respect to the money, will then fully operate the effect intended.

In order that a coin may be perfectly intelligible to the whole people, it must have some affinity to the former currency. This, therefore, will be requisite in the present case. The purposes of commerce require, that the lowest divisible point of money, or what is more properly called the _money unit_, should be very small, because by that means, price can be brought in the smallest things to bear a proportion to the value. And although it is not absolutely necessary, yet it is very desirable, that money should be increased in decimal ratio, because by that means all calculations of interest, exchange, insurance, and the like, are rendered much more simple and accurate, and of course, more within the power of the great mass of the people. Wherever such things require much labor, time, and reflection, the greater number who do not know, are made the dupes of the smaller number who do.

The various coins which have circulated in America, have undergone different changes in their value, so that there is hardly any which can be considered as a general standard, unless it be Spanish dollars. These pass in Georgia at five shillings, in North Carolina and New York at eight shillings, in Virginia and the four Eastern States at six shillings, and in all the other States, excepting South Carolina, at seven shillings and sixpence, and in South Carolina at thirtytwo shillings and sixpence. The money unit of a new coin to agree, without a fraction, with all these different values of a dollar, excepting the last, will be the fourteen hundred and fortieth part of a dollar, equal to the sixteen hundredth part of a crown. Of these units, twentyfour will be a penny of Georgia, fifteen will be a penny of North Carolina or New York, twenty will be a penny of Virginia and the Four Eastern States, sixteen will be a penny of all the other States, excepting South Carolina, and fortyeight will be thirteen pence of South Carolina.

It has already been observed, that to have the money unit very small, is advantageous to commerce; but there is no necessity that this money unit be exactly represented in coin, it is sufficient that its value be precisely known. On the present occasion, two copper coins will be proper, the one of eight units, and the other of five. These may be called an Eight, and a Five. Two of the former will make a penny Proclamation, or Pennsylvania money, and three a penny Georgia money. Of the latter, three will make a penny New York money, and four a penny lawful, or Virginia money. The money unit will be equal to a quarter of a grain of fine silver in coined money. Proceeding thence in a decimal ratio, one hundred would be the lowest silver coin, and might be called a _Cent_. It would contain twentyfive grains of fine silver, to which may be added two grains of copper, and the whole would weigh one pennyweight and three grains. Five of these would make a _Quint_, or five hundred units, weighing five pennyweight and fifteen grains; and ten would make a _Mark_, or one thousand units, weighing eleven pennyweight and six grains.

If the mint price of fine silver be established at twentytwo thousand two hundred and thirtyseven units per pound, this being coined would be four times five thousand seven hundred and sixty grains, or twentythree thousand and forty units. The difference is eight hundred and three units, and therefore the coinage is eight hundred and three, or twentythree thousand and forty, or somewhat more than three fortyeight one hundred per cent, which would be about the expense attending it. A dollar contains by the assays, which I have been able to get, about three hundred and seventythree grains of fine silver, and that at the mint price would be fourteen hundred and forty units. In like manner, if crowns contain from four hundred and fourteen to four hundred and fifteen grains of fine silver, they would, at the mint price, be worth sixteen hundred units.

When such a coin shall have been established, the value of all others would be easily ascertained, because nothing more would be necessary than to have them assayed at the mint. The advantage of possessing legal money, in preference of any other, would induce people to carry foreign coin to the mint, until a sufficiency were struck for the circulating medium. The remainder of the foreign silver, together with the gold, should be left entirely to the operations of commerce as bullion.

In the present moment, it is by no means of such consequence to establish the relative value of different coins, as to provide a standard of our own, by which in future to estimate them. If the value were now sought, they must all be estimated in dollars, because dollars are called for in the several requisitions of Congress. Without noticing the preference thus given of one coin over another, it is sufficient to observe, that if a greater alloy should be introduced by the Spanish government into their dollars, our interior regulations as to money would be overturned; and certainly we have no security that this will not happen. There is not any great inconvenience in leaving matters on their present footing, until they can be remedied by the operations of a mint; for it is not to be supposed that all the money raised by taxes in a State is to be brought out of it. I expect that there will be very little occasion to transport money from place to place. It is much easier to negotiate than to carry it; and if any species of money is generally received within a State at the same rate in which it is paid in taxes, there will be no difficulty in expending it at its value. Whenever money shall be struck by authority of the United States, then indeed it will be proper to receive in taxes no other coin.

If Congress are of opinion with me, that it will be proper to coin money, I will immediately obey their orders and establish a mint. And I think I can say with safety, that no better moment could be chosen for the purpose than the present; neither will anything have a greater tendency to restore public credit; for although it is possible that the new money will at first be received with diffidence by some, yet when it has been fairly assayed, it will gain full confidence from all, and the advantage of holding the only money, which can pay debts or discharge taxes, will soon give it the preference over all, and indeed banish all other from circulation. Whereas fixing a relation of value now on whatever principles attempted, might give offence to the power whose coin should, in any instance, be reduced from its present numerary value among us.

These sentiments are submitted, with all possible deference, to the United States in Congress assembled, in expectation of their further instructions on the subject.

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

ROBERT MORRIS.

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GEORGE WASHINGTON TO ROBERT MORRIS.[3]

Philadelphia, January 25th, 1782.

Sir,

I have received your favor of the 23d respecting Captain Hutchins, and shall give you a more definitive answer after I have seen that gentleman.

[3] _January 26th._ In consequence of the information received from Mr Thomas Paine, of the intentions of some officers to promote a general application by way of memorial to General Washington, respecting their pay, I sent for him and had a long conversation on various matters of a public nature. He observed, that his services to the public had rather been neglected. I told him I could wish his pen to be wielded in aid of such measures, as I might be able to convince him were clearly calculated for the service of the United States; that I had no views or plans but what were meant for the public good, and that I should ask no man's assistance on any other ground; that it was true I had nothing in my power at present to offer, as a compensation for his services, but that something might turn up, and that I should have him in my mind.--_Diary._

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The following record is also contained among Mr Morris's papers, in his own hand writing, dated February, 1782.

"Having lately had several meetings with Mr Thomas Paine, the writer of a pamphlet, styled _Common Sense_, and of many other well known political pieces, which, in the opinion of many respectable characters have been of service to the cause of America, I thought this gentleman might become far more serviceable to the United States by being engaged to write in the public newspapers in support of the measures of Congress and their Ministers. My assistant, Mr Gouverneur Morris, is clearly of the same opinion, and in all our conferences with him, we have pointedly declared, that we sought the aid of his pen only in support of upright measures and a faithful administration in the service of our country. We disclaim private or partial views, selfish schemes or plans of any and every kind. We wish to draw the resources and powers of the country into action. We wish to bring into the field an army equal to the object for which we are at war. We wish to feed, clothe, move, and pay that army as they ought to be done, but we wish also to effect these on such terms as may be least burdensome to the people, at the same time that the operations shall be every way effective.

"Having these for our objects we want the aid of an able pen to urge the Legislatures of the several States to grant sufficient taxes; to grant those taxes separate and distinct from those levied for State purposes; to put such taxes, or rather the money arising from them, in the power of Congress, from the moment of collection;

"To grant permanent revenues for discharging the interest on debts already contracted, or that may be contracted;

"To extend by a new confederation the powers of Congress, so that they may be competent to the government of the United States and the management of their affairs;

"To prepare the minds of the people for such restraints and such taxes and imposts, as are absolutely necessary for their own welfare;

"To comment from time to time on military transactions, so as to place in a proper point of view the bravery, good conduct, and soldiership of our officers and troops, when they deserve applause, and to do the same on such conduct of such civil officers or citizens, as act conspicuously for the service of their country.

"Finding Mr Paine well disposed to the undertaking, and observing that General Washington had twice in my company expressed his wishes, that some provision could be made for that gentleman, I took an opportunity to explain my design to the General, who agreed entirely in the plan. I then communicated the same to Mr Robert R. Livingston, Secretary of Foreign Affairs, and proposed that he should join me in this business, by furnishing from his department such intelligence, as might be necessary from time to time to answer such useful purposes for which Mr Paine is to write; and in order to reward this gentleman for his labors, and enable him to devote his time to the service of the United States, it was agreed to allow him eight hundred dollars a year, to be paid quarterly. But it was also agreed, that this allowance should not be known to any other persons than those already mentioned, lest the publications might lose their force if it were known that the author is paid for them by government."

By a letter, which General Lincoln addressed, to me before he went to the eastward, I find that you approve of my plan of sending officers to the four New England States particularly, with the returns of their deficiencies of troops, and with instructions to attend upon the Legislatures, and to endeavor to impress them with the expediency, and indeed necessity, of filling their battalions previous to the opening of the campaign. He informed me also, that you would be glad to give the same officers some instructions relative to the business of your department. If so, I could wish you would have your letters ready to go by the next post, by which time I expect to have the returns prepared. I have not yet fixed upon the gentlemen who will be proper, but you can leave blanks for the insertion of the names of those who may be chosen.

As we may reasonably expect to hear soon again from Sir Henry Clinton, on the subject of the meeting of commissioners, I think it would be well to be preparing the substance of the powers to be delegated to the gentlemen to whom the transaction of the proposed business will be committed. What I would wish you to prepare particularly, is so much as will relate to the liquidation of the former accounts of prisoners, and making provision for their maintenance in future.

I have the honor to be, &c.

GEORGE WASHINGTON.

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TO THE PRESIDENT OF CONGRESS.

Office of Finance, February 11th, 1782.

Sir,

The situation of my department makes it necessary to lay some matters of importance before the United States in Congress, and I shall endeavor to do so with as much precision, as possible.

It gives me pain to observe, that the States of Massachusetts, Rhode Island, and Maryland, have not yet passed the laws recommended by the resolutions of the third of February, 1781. I learn, (though not officially,) that the State of Virginia has lately suspended the operation of the law, which they had passed in conformity to that resolution. The bare mention of these things is sufficient to mark the consequences. Our debt being unfunded and unprovided for, the interest cannot be paid. Those, therefore, who trusted us in the hour of distress, are defrauded. To expect that, under such circumstances, others will confide in the government, would be folly; and to expect that foreigners will trust a government, which has no credit with its own citizens, would be madness. The whole weight, therefore, of the war must be borne in the present moment; and even the slightest anticipations of revenue are made on the personal credit of the Minister.

This, Sir, is not said boastingly, but with unaffected concern. I have labored to establish a credit for my country, that when the period should arrive, (and I hoped it was not far distant,) in which I could lay down the burden now pressing upon me, my successor in office should have no other difficulties to struggle with, than those which necessarily attend an extensive and complicated administration. It is, therefore, with no common degree of anxiety and distress, that I see my wishes frustrated. I feel as an American for my country, as a public servant for the interest and honor of those whom I serve, and as a man, that I cannot enjoy the ease and tranquillity I have sought for through a life of continual care and unremitted labor. It is my duty to mention to you the fact, and to apprize you, that in such circumstances, our operations will continue to be desultory efforts of individual power, rather than the combined exertion of political strength and firmness.

The repeated assurances we daily receive from the Ministers of his Most Christian Majesty, of their steady determination to grant no further pecuniary aid, will not leave room to doubt of their intentions. I candidly acknowledge that I had formed not only hopes, but even expectations from that quarter. For I had persuaded myself, that when the brilliant successes of the last campaign should be known, and when it should also be known how much the United States are capable of, and how necessary an aid of money is to call their power into action, the King would have again extended that relief, which must be most beneficial to the common cause. Even now, I shall request that Congress will instruct the Secretary of Foreign Affairs to make the most pointed representations on this subject through our Minister at the Court of Versailles, and I shall readily furnish all such materials in my department as may be necessary for the purpose; but I must not conceal my doubts as to the effect of such representations. Duty to this country requires that they should be made, but prudence forbids a reliance on their success, and will dictate to us a farther duty, which is, to act under the influence of a belief, that they will not succeed.

As to hopes of pecuniary aid from any other quarter, the delusion has already passed away. It is in vain that expensive establishments are kept up to solicit succor from Spain, who appears neither able nor willing to afford it; from Holland, who seeks peace and not to increase the causes of war; or from Russia, who seems more inclined to crush, than to support us. Let us apply to borrow wherever we may, our mouths will always be stopped by the one word, security. The States will not give revenue for the purpose, and the United States have nothing to give but a general national promise, of which their enemies loudly charge them with the violation.

Thus, Sir, compelled, however reluctantly, to look at home for the means of supporting ourselves against an enemy, whose power has rather increased with the increase of her foes, whose force has risen superior to defeats, and has found resources in a situation, which might have inspired despair, we must no longer rely on those who may neglect us, but take care that we be not charged with neglecting ourselves. I would to God, that I could say, that there were even the appearances of general vigor and exertion. But the truth is very different. The United States have called for eight millions of dollars early in November last, of which the first quarterly payment was to have been made on the 1st day of April next; but I cannot find that a single State has yet laid the taxes. I neither know what they will think proper to give, nor when. Happy to experience a momentary relief from the clamor and revolt of a starving army, from the rage and devastation of an inveterate enemy, and from the waste and extravagance of cumbrous, unwieldy departments, there appears to be no solicitude anywhere for the support of arrangements, on which the salvation of our country depends.

To give a little time for the people to breathe, and to remedy some of the many abuses, which were equally palpable and enormous, I early ventured on the business of contracting, and I have extended it as far as prudence would in any degree justify. Nay, relying on the States for support, I have made engagements, which, in almost any other circumstances, would savor of temerity, and which nothing would have led me to do, but a hope that by retrenching expenses, they would be sooner induced to grant revenue. So thoroughly am I convinced of the superior economy, which attends the present mode of supplying our armies, that I would have offered contracts for the southern department, could I have formed any well grounded expectation of moneys sufficient for the purpose from the southern States. Nor should I have been deterred even by the distance of the period at which it could be had, if I could have formed a reasonable reliance on it at some certain period. Our expenses, it is true, are retrenched, and to give an idea to what degree, I will mention, that for the amount of salaries alone in the Commissary's department to the northward of Potomac river, between three and four thousand soldiers are now fed with full rations. But though the retrenchments are great, the expenses are great also, and they must rapidly increase every moment in preparing for an early and vigorous campaign.