Chapter M: De Calonne to M. De Lafayette (6)

I have been told, that some gentlemen considered the expressions in my letter to Congress on this subject so general as that they might be construed to comprehend the Commander in Chief, Heads of Department, &c. But this cannot be. The Commander in Chief is not concerned himself, but employs others in the expenditure of public money, to whom he grants warrants or drafts on the military chest; and the persons so employed ought to be accountable, and subject to dismission. I suppose officers of the army may frequently be so employed, and in that case it cannot be supposed, that the power of the Financier extends to the military commission, for it certainly must be confined to the money matters. There is one exception with respect to what I have said of the Commander in Chief, and that is the expenditures for secret service, and in this respect I think he should be responsible to the Sovereign only.

The Quarter Master General, having a military as well as a civil duty, he cannot be under the control of the Financier, for the first, although he certainly ought to be the last, which has great connexion with heavy expense, and perhaps it would be best, that he should execute all the business of expenditures by one or more deputies, which would exonerate him from that power, which they must be subjected to. The Commissary General, and every person employed under him, are the immediate objects of this power. The Paymaster General, may be considered as a channel of conveyance, through which money passes from the treasury to the army, and as he is subjected to the law military, the Minister of Finance needs no other authority over him and his officers, than the power of putting under arrest and suspending for mal-conduct in office.

All persons employed as Commissaries of military stores, of clothing, or any other denomination, wherein the expenditure of public money or property is connected, ought to be subjected to this authority. The expenses in the medical department are said to have exceeded those of the like kind in any other country. It is, therefore, evident that the Purveyors, Commissaries, &c. in this department should be subject to the same immediate control as others; and although the Financier cannot judge of the medical skill of the Director General and his officers, yet if any waste or misapplication of public property in their department should come to his knowledge, he should have authority to bring offenders to a Court Martial.

There is no possibility of introducing public economy without the frequent adjustment of accounts; and the more various these may be, the greater is the necessity of constant attention to liquidate them speedily and well. The Financier ought, therefore, to have the power of removing any of the officers, whose business it is to examine and settle the public accounts, that so he may be enabled to obtain a proper and early settlement, and prevent the dangerous effects of inattention or corruption on one hand, or of delay, insolence, and tyranny to individuals concerned in such accounts, on the other. And on account of this power the Financier should have no accounts with the public himself, but wherever expenditures are necessary in his department, he should employ proper persons therein, subject to the same powers and modes of accounting with every other person employed in expending public property; or if of necessity he shall at any time have accounts with the public, Congress can appoint a committee, or special board, to examine and settle his accounts.

From what I have already said, I think it is evident, that the power I have stipulated for is absolutely necessary; and although it is not possible to enumerate every object of that power, yet the general lines within which they may be comprehended can be drawn from the observations I have made, although I have said our foreign departments, as these may be brought into consideration hereafter when it shall appear necessary.

Whoever contemplates the extent of the United States, and the vast amount of their present expenses, while at the same time all our operations languish, must certainly be convinced that some immediate remedy ought to be applied. The office of Superintendent of Finance I suppose is meant as one means of restoring economy and vigor; and nothing will keep up in the minds of the public servants such a constant sense of their duty, as a knowledge of the power to remove them in the hands of a person of vigilant and decisive character. Whether I shall have sufficient courage and perseverance to act up to that character, and whether my small abilities, supported by application and attention, will enable me to render essential service in the execution of this office, is become an object of great consideration, that fills my mind with much apprehension, and induces me to wish I had declined this arduous undertaking in the first instance.

I have the honor to be, &c.

ROBERT MORRIS.

* * * * *

PROCEEDINGS IN CONGRESS.

_April 21st._ On a report of the committee, to whom was referred Mr Morris's letter of the 13th of March,

_Resolved_, That the Superintendent of Finance be, and he is hereby authorised, to remove from office or employment, for incapacity, negligence, dishonesty or other misbehavior, such persons, not immediately appointed by the United States in Congress assembled, as are or may be officially intrusted with, and immediately employed in the expenditure of the public supplies, stores, and other property; in stating, examining and passing the public accounts, or in the receipt of the continental revenues of the United States, and such of the said persons as are or may be in his judgment unnecessary, reporting to such authority, board, minister, or office, to whom it may belong to supply the vacancy, the respective names of the persons so removed.

That he be authorised to suspend from office or employment, for similar causes, persons officially employed and intrusted as aforesaid, immediately appointed by the United States in Congress assembled, reporting forthwith their names and the reason of suspension.

Provided, that in all cases where any of the persons aforesaid, are or may be amenable to the law martial, the Superintendent be, and he is hereby authorised and directed, if he shall deem it most expedient for the public service, to put them in arrest by order in writing, and to apply to the officer whose duty it may be, to order a court martial; and such officer is hereby directed to order proceedings on the arrest accordingly.

That in every case of suspension, all pay and emoluments cease from the date thereof, unless the persons suspended be, upon trial, acquitted and restored; and the Superintendent shall have power to supply the place when it may be necessary, by a temporary appointment, to continue until the person suspended be restored or dismissed.

That the aforesaid powers shall not be construed to interfere with the rank, commission, or military duty of any officer in the line of the army, or those who may be duly intrusted with money for secret services by Congress, or the Commander in Chief of the army, or commanding officer of a separate department.

That the powers aforesaid be exercised during the pleasure of Congress, but not to extend beyond the duration of the war.

_April 27th._ On a further report of the committee on Mr Morris's letter of the 13th ultimo,

_Resolved_, that in order that the Superintendent of Finance may be at liberty to devote his time and attention to the more immediate duties of his office, he be, and hereby is authorised, to appoint by letter of attorney, or otherwise, such person or persons, as he may think proper, to prosecute or defend for him, in his official capacity, or in behalf of the United States, in all places where the same may be necessary.

* * * * *

TO THE PRESIDENT OF CONGRESS.

Philadelphia, May 14th, 1781.

Sir,

The honor conferred by Congress in appointing me Superintendent of Finance, their several resolutions of the 20th of March, and the 21st and 27th of April, which your Excellency has been pleased to transmit, and a serious conviction of that duty, which every citizen owes to his country, especially in times of public calamity, will no longer permit me to hesitate about the acceptance of that office, although I must again repeat, that I have the fullest sense of my own inability. I shall, however, strive to find such assistance as will enable me, in some measure, to answer the reasonable expectations of Congress, to whom I can promise for myself nothing more than honest industry.

You will readily perceive, that much time must be consumed in procuring proper officers; fixing on men for assistants, whose abilities and integrity may be depended on; in laying plans for obtaining money with the greatest ease to the people, and expending it with the greatest advantage to the public; forming arrangements necessary to carry these plans into execution; and obtaining information as to the present state of things, in order that abuses may be, if possible, speedily and effectually remedied.

Besides this, it will be necessary that I should confer with the Commander in Chief, on the various expenditures of the war, and the means of retrenching such as are unnecessary. Let me add, that the accounts of my private business must be adjusted, so as that all my affairs may be put into the hands of other persons, and subjected to their management. My necessary commercial connexions, notwithstanding the decided sense of Congress, expressed in their resolution of the 20th of March, might, if the business were transacted by myself, give rise to illiberal reflections, equally painful to me and injurious to the public. This reason alone would deserve great attention; but, further, I expect that my whole time, study, and attention will be necessarily devoted to the various business of my department.

Having thus stated some of the causes, which will prevent me from immediately entering on the arduous task assigned me, I pray leave to call the attention of Congress to the advanced season, and then I am persuaded their own good sense will render it unnecessary for me to observe, that very little can be expected from my exertions during the present campaign; they will, therefore, easily perceive the propriety of the request I am to make, that the business may go on according to the present arrangements, or such other as Congress may devise, until I can take it up, which I promise to do as speedily as possible. By this means, I may be enabled so to dispose of the several members of my department, as to form them into a regular system; whereas, by throwing the whole immediately upon me, I shall be inevitably involved in a labyrinth of confusion, from which no human efforts can ever afterwards extricate me.

Another consideration of great magnitude, to which I must also pray the attention of Congress, is the present public debts. I am sure no gentleman can hope that these should be immediately paid out of an empty treasury. If I am to receive and consider the applications on that subject, if I am to be made responsible, that alone will, I fear, be full employment for the life of one man, and some other must be chosen to attend to the present and provide for the future. But this not all; if from that, or any other cause, I am forced to commit a breach of faith, or even to incur the appearance of it, from that moment my utility ceases. In accepting the office bestowed on me, I sacrifice much of my interest, my ease, my domestic enjoyments, and internal tranquillity. If I know my own heart, I make these sacrifices with a disinterested view to the service of my country. I am ready to go still further; and the United States may command everything I have, except my integrity, and the loss of that would effectually disable me from serving them more. What I have to pray, then, is, that the adjustment of all past transactions, and of all that relates to the present system, may be completed by the means already adopted, that whatever remains unpaid may become a funded debt, and that it may in that form be committed to me, to provide for the yearly interest and for the _eventual_ discharge of the principal. This task I will cheerfully undertake; and if, in the progress of things, I am enabled to go further, with equal cheerfulness it shall be done; but I must again repeat my serious conviction, that the least breach of faith must ruin us forever.

It is not from vanity that I mention the expectations, which the public seem to have formed from my appointment. On the contrary, I am persuaded, they are raised on a weak foundation, and I must lament them, because I foresee they must be disappointed. I must, therefore, entreat that no flattering prospect of immediate relief may be raised.

Congress will know that the public credit cannot be restored without method, economy, and punctual performance of contracts. Time is necessary to each; and therefore the removal of those evils we labor under can be expected from time only. To hold out a different idea would deceive the people, and consequently injure the public service.

I am sure it is unnecessary to add, before I close this letter, that I confidently expect my measures will meet with the fullest support from Congress, so long as they are honestly directed to the general welfare. In this conviction, and with every sentiment of respectful attention, I have the honor to be, &c.

ROBERT MORRIS.[31]

FOOTNOTES:

[31] _May 14th._ Wrote a letter to the President, promising to accept the office. At this time, however, various reasons occurred to prevent an immediate acceptance of the Commission; but particularly it was necessary to retain my seat in the Assembly of Pennsylvania, in order to lay a foundation for such measures as might tend to their support of me in pursuing the public good, not doubting but their example would have proper influence on the Legislatures of the other States, especially in their determination upon general points, such as their repealing those tender and penal laws, which in their operation had destroyed all public and private confidence and credit; in passing effective tax bills, that might yield substantial aid to the United States for calling in the paper money, that had lost its credit; and is adopting plans of reviving and establishing the credit of such as had been injured in some degree, but which, being necessary in circulation, and originally issued on funds sufficient for its redemption, ought not to be given up to ruin, if possible to prevent it. _Diary._

* * * * *

TO THE PRESIDENT OF CONGRESS.

Philadelphia, May 17th, 1781.

Sir,

I beg leave to submit the enclosed plan for establishing a National Bank in these United States, and the Observations on it, to the perusal and consideration of Congress.

Anticipation of taxes and funds is all that ought to be expected from any system of paper credit. This seems as likely to rise into a fabric equal to the weight, as any I have yet seen or thought of; and I submit whether it may not be necessary and proper, that Congress should make immediate application to the several States, to invest them with the powers of incorporating a bank, and for prohibiting all other banks, or bankers, in these States, at least during the war.[32]

I have the honor to be, &c.

ROBERT MORRIS.

FOOTNOTES:

[32] See the _Plan of the National Bank_ here mentioned, and also the _Observations_ on it, in _John Jay's Correspondence_, Vol. VII. p. 444.

* * * * *

TO THE PRESIDENT OF CONGRESS.

Philadelphia, May 23d, 1781.

Sir,

As I have heard in times past, that the treasury has frequently been in want of hard money, to comply with engagements made with the approbation of Congress, and sometimes obliged to obtain it on terms inconsistent with the dignity of government, and not very consonant to the public interest, I would wish to guard against the like inconveniences by importing from foreign countries a supply at least sufficient to pay rents of the houses and offices necessarily employed for the Continental service; also to answer, as far as may be, the calls for secret service. And even if I could devise the means of obtaining it, I should suppose it would be agreeable to bring such sums as may answer other valuable purposes; but as it cannot be imported but at the risk of being captured by the enemy, and the danger of the elements, you will perceive the necessity of my being authorised by Congress to enter on and execute this business at the risk, and for account of the Continent, on the best terms in my power.

The sum may be limited if thought needful; although I should suppose it is not possible in our circumstances to obtain too much; yet the sum to be risked in any one bottom may very properly not exceed a certain amount in a line of battle ship or frigate, and a smaller in any one merchant vessel. Should Congress think proper to authorise these measures, as I hope they will, the private journals will be most proper to insert the proceedings in; as a want of secrecy may endanger the money.

I have the honor to be, &c.

ROBERT MORRIS.

* * * * *

TO ALEXANDER HAMILTON.

Philadelphia, May 26th, 1781.

Sir,

It is some time since I received your performance, dated the 30th of April last. I have read it with that attention, which it justly deserves, and finding many parts of it to coincide with my own opinions on the subject, it naturally strengthened that confidence, which every man ought to possess to a certain degree in his own judgment.

You will very soon see the plan of a bank published, and subscriptions opened for its establishment, having already met with the approbation of Congress. It only remains for individuals to do their part, and a foundation will be laid for the anticipation of taxes and funds, by a paper credit that cannot depreciate. The capital proposed fell far short of your idea; and, indeed, far short of what it ought to be; but I am confident if this is once accomplished, the capital may afterwards be increased to almost any amount. To propose a large sum in the outset, and fail in the attempt to raise it, would be fatal. To begin with what is clearly within our power to accomplish, and on that beginning to establish the credit, that will inevitably command the future increase of capital, seems the most certain road to success.

I have thought much about interweaving a security with the capital of this bank, but am apprehensive it would convey to the public mind an idea of paper being circulated on that credit, and that the bank in consequence must fail in its payments, in case of any considerable run on it; and we must expect, that its ruin will be attempted by external and internal foes. I have, therefore, left that point to the future deliberations of the Directors of this bank, to whom in due time, I shall communicate your address.

I esteem myself much your debtor for this piece, not merely on account of the personal respect you have been pleased to express, but chiefly on account of your good intentions; and for these, and the pains you have taken, I not only think, but on all proper occasions shall say, the public are also indebted to you.

My office is new, and I am young in the execution of it. Communications from men of genius and abilities, will always be acceptable, and yours will ever command the attention of, Sir, your obedient humble servant,

ROBERT MORRIS.

* * * * *

TO MAJOR GENERAL PHILIP SCHUYLER.

Philadelphia, May 29th, 1781.

Dear Sir,

You will probably have heard that Congress have done me the honor to bestow their confidence, by appointing me to the important station of Superintendent of Finance of North America; a station that makes me tremble when I think of it, and which nothing could tempt me to accept, but a gleam of hope, that my exertions may possibly retrieve this poor distressed country from the ruin with which it is now threatened, merely for want of system and economy in spending, and vigor in raising the public moneys. Pressed by all my friends, acquaintances, and fellow citizens, and still more pressed by _the necessity_, the _absolute necessity_, of a change in our monied system, to work salvation, I have yielded, and taken a load on my shoulders, which it is impossible to get clear of without the faithful support and assistance of those good citizens, who not only wish, but will promote the service of their country. In this light I now make application to you, Sir, whose abilities I know, and whose zeal I have every reason to believe. The object, however, before me, is not of such magnitude as to require any great exertion of either at present, although it is of sufficient importance to induce the invocation.

General Washington is distressed for want of an immediate supply of flour, and as I am not even yet fairly entered on the execution of my office, and when I do, have to meet an empty treasury, and a totally exhausted credit, it must be some time before funds can be created or money be commanded for any purpose whatsoever; and as I do not know any gentleman of such resources as General Schuyler, he seems the most likely of all men to give assistance under the present circumstances. I must, therefore, request that you will take the most speedy and effectual measures to deliver to the order of his Excellency, General Washington, one thousand barrels of flour, which I am sure you will purchase and cause to be transported on the most reasonable terms that are practicable. No time must be lost, but the flour must be sent down in the parcels as fast as procured. The Pennsylvania Bank had all the flour they supplied to the army, secured with outside lining hoops on each head of every barrel, and the weight and tare marked on each cask. If you were to cause this to be done, and add to the mark your name, it would save a waste of flour, oblige the Issuing Commissary to take notice of an account for the weights as well as barrels, and teach the army to think that they are indebted to your exertions for a seasonable supply.

I have the means of raising hard money to pay for this flour, and the charges on it; but the longer time I am allowed to do it, the more I can consult the public interest. I take it for granted, that you can, upon your own credit and engagements, either borrow the money for a few months, necessary to accomplish this business; or that you can make the purchases on such credit, without giving higher prices; and for your reimbursement, you may either take me as a public or a private man, for I pledge myself to repay you with hard money wholly, if required, or part hard and part paper, if you so transact the business. In short, I promise, and you may rely that no consideration whatever, shall induce me to make a promise, that I do not see my capability to perform, that I will enable you to fulfil your engagements for this supply of flour, if you find it convenient, you may draw on me for hard money or paper, payable in such sums, and at such times, as you can conceive may not be inconvenient, judging by what I have said on this subject. Should good bills on France be wanted, at about ---- hard money your currency, for five livres tournois, I will furnish them, drawn or endorsed by myself, for the whole, or any part of this purchase.

I hope we shall hereafter supply our army by contracts, and your information and observations on this subject would be very obliging. Perhaps if you are not fully employed otherwise, you might start some worthy man under your patronage, that might render essential service to the public, with proper advantage to himself and connexions in this line.

I am, Dear Sir, yours, &c.

ROBERT MORRIS.

_P. S._ Remember, that I put absolute dependence on you for this one thousand barrels of flour, and it must be sent to the army directly.

* * * * *

TO THE PRESIDENT OF CONGRESS.

Philadelphia, June 4th, 1781.

Sir,

Having been informed by several members of Congress, as also by his Excellency, the Chevalier de la Luzerne, that it was determined to put the management of the moneys lately granted by his Most Christian Majesty under my direction, in order that they might be punctually applied to the purposes for which the grant was made, viz. a vigorous prosecution of the present campaign; I had, in conjunction with the Minister of France, formed some arrangements for drawing part of this money into immediate use; but, on applying to the Secretary of Congress, I do not find that any act has been passed giving me authority over the moneys so granted; consequently, all proceedings must stop until the previous steps are taken by Congress.

I have the honor to be, &c.

ROBERT MORRIS.

* * * * *

TO B. FRANKLIN.

Philadelphia, June 8th, 1781.

Dear Sir,

In a private letter, which I did myself the honor to write you on the 6th instant, I announced the appointment I have received from the honorable Congress, to the office of Superintendent of the Finances of the United States of North America; and I now beg leave to address you in my official character.

Congress have thought proper to commit to me the disposition and management of the money granted to the United States by his Most Christian Majesty, in aid of our operations for the present campaign, in order that the same may be solely applied to that use; and for this reason, I have found it necessary to keep the whole sum of this grant separate and distinct from any other, so that its application may at any time be clearly seen. Instead, therefore, of drawing upon your Excellency, who have many other bills running upon you, I have judged it expedient to name Messrs Le Couteulx & Co., bankers in Paris, to receive the money from his Majesty's Ministers, so that they may be able to honor my bills with acceptance whenever they appear, and punctually to acquit them as they fall due. I have written to Messrs Le Couteulx, that you would join and support them in any application that may become needful to his Majesty or his Ministers, which I hope you will readily do.

And, on the other hand, your attention to the interest of this country will lead you to inform yourself whether the house of Le Couteulx and Company, are as perfectly safe and rich as they ought to be, to entitle them to this trust. They are represented to me as one of the safest and most prudent banking houses in Europe; and his Excellency, the Minister of France at this place, now writes to have five hundred thousand livres tournois deposited with them, on account of the United States, subject to my drafts or orders. Should their credit not entitle them to this trust, you will please to interfere, and consult with M. Necker what banker to employ in such case, directing those you do employ, to accept and pay my drafts. However, I imagine these gentlemen will be found sufficiently safe.

Should it be more agreeable to M. Necker that any other banker be made use of, give me the name and write me the propriety of such alteration, and I shall acquiesce in such change immediately on the receipt of your letter, for I have no partiality in public business. All I wish is to act with security, and to the best advantage.

If you think it proper to inquire into the terms on which the bankers will receive and pay this money, and settle their commissions on the most reasonable footing, I shall be happy in your doing so. I do not, however, wish to give you any trouble that is not proper and necessary; being, with the highest respect, your Excellency's most obedient, humble servant,

ROBERT MORRIS.

* * * * *

TO MESSRS LE COUTEULX & CO., BANKERS IN PARIS.

Philadelphia, June 8th, 1781.

Gentlemen,

In a private letter, I have already informed you of my appointment, by the honorable Congress, to the office of Superintendent of the Finances of the United States of North America; and in that character I now address you.

His Most Christian Majesty, having been graciously pleased to grant an aid of money for the purpose of invigorating our operations during the present campaign, I find it convenient to make use of your house as bankers to receive from his Majesty's Ministers such sums as they may have occasion to deposit, in order that you may accept and pay my drafts on you as fast as they shall appear. His Excellency, the Minister Plenipotentiary of France at this place, now writes to his Court, at my request, desiring that five hundred thousand livres tournois may be placed in your hands thirty days after the receipt of his letter, the said sum to be subject to my drafts or orders, and I shall proceed to draw upon you as fast as purchasers offer for the bills; therefore, I beg you will be prepared to honor my bills, drawn as Superintendent of Finance, whenever they offer; for I would not, on any account, that there should be the least demur; and I am confident, that his Most Christian Majesty's Minister of Finance will enable you punctually to make payment as they fall due. I shall communicate this matter to his Excellency, Benjamin Franklin, Minister Plenipotentiary from these States to the Court of Versailles, who will join you in any application that may become necessary in this business; which, however, I expect will be conducted much to your satisfaction. And as it may become important, I hope your attention to it can be relied on, and that you will render the charges as moderate as possible.

I have the honor to be, &c.

ROBERT MORRIS.

* * * * *

TO M. DE LA LUZERNE, MINISTER OF FRANCE.

Philadelphia, June 8th, 1781.

Sir,

The honorable Congress having thought proper to invest me with the power, disposition, and management of the moneys granted by his Most Christian Majesty to the United States, for the purpose of assisting them to carry on the present campaign with vigor, I have, with your concurrence, taken some arrangements for drawing it into the uses for which the grant has been made; and in conformity with your promise, I pray you to write immediately to his Majesty's Ministers, that they cause the sum of five hundred thousand livres tournois to be deposited with Messrs Le Couteulx & Co., bankers in Paris, for account of the United States of North America, and subject to my drafts or orders as Superintendent of Finance of the said United States.

This deposit I hope may, without inconvenience, be made in thirty days after the receipt of your letter; and I shall proceed to draw on Messrs Le Couteulx & Co. in full confidence thereof, until my bills on them shall amount to the said sum of five hundred thousand livres tournois, when I will give you timely notice, that another deposit may be made for the like purpose, and by this means I hope we shall occasion as little trouble to his Majesty's Minister of Finance as the nature of this transaction will admit of.

With great respect and esteem, &c.

ROBERT MORRIS.

* * * * *

CIRCULAR RESPECTING THE NATIONAL BANK.

Philadelphia, June 11th, 1781.

Sir,

No doubt you have seen in the public papers, the plan for establishing a National Bank, the necessity of which everybody sees, that allows himself the least time for reflection on the present state of public credit. All the public bodies in America have, more or less, lost the confidence of the world as to money matters, by trying projects and applying expedients to stop a course of depreciation, which original errors had fixed too deeply to admit of any radical cure.

It is vain to think of carrying on war any longer by means of such a depreciating medium, and at the same time an efficient circulation of paper that cannot depreciate, is absolutely necessary to anticipate the revenues of America. A National Bank is not only the most certain, but will prove the most useful and economical mode of doing so. It is, therefore, of the utmost importance that this first essay, confined as it is in point of capital, should be brought into action with the greatest expedition. I am sensible that plans of public utility, however promising and pleasing they may be on their first appearance, soon grow languid, unless it be the particular business of some man, or set of men, to urge them forward; this may be said to be my duty in the present instance. But as I cannot be everywhere, I must apply for support to gentlemen of your character and zeal for the service of their country, requesting in the most earnest manner, that you will urge your friends and fellow citizens to became proprietors of this bank stock.

Every subscriber will find his own interest benefited in proportion to the capital he deposits, and I dare say few will find the other parts of their fortunes to yield them so large or so certain an income as the stock they may have in the bank; and at the same time they will have the satisfaction to be considered forever as the promoters of an institution that has been found beneficial to other countries, and inevitably must be so in the highest degree to this; an institution, that most probably will continue as long as the United States, and that will become as useful to commerce and agriculture in the days of peace, as it must be to government during the war.

The capital proposed is but small, when the extent and riches of the United States are considered; but when put in motion, the benefits flowing from it will be so perceptible, that all difficulty about increasing the capital or securing its credit, will vanish, and we shall only have to appeal to the interest of mankind, which, in most cases, will do more than their patriotism; but there have been, and will continue to be, many instances, where interest is sacrificed to patriotism; and in that belief, I ask you to devote some of your time to this infant plan, which, as it gathers strength, may in the end prove the means of saving the liberties, lives, and property of the virtuous part of America. My good opinion of you is an excuse for giving you this interruption.

I am, Sir, yours, &c.

ROBERT MORRIS.

* * * * *

TO THE PRESIDENT OF CONGRESS.

Philadelphia, June 21st, 1781.

Sir,

I find that the new payment of the moneys due to the subscribers to the Pennsylvania Bank materially injures and impedes the subscription to the National Bank. At the same time, I am informed, that Congress are unwilling to dispose of the bills lodged as a security, lest the Minister of the United States at Madrid should be incommoded by it. I have the honor to observe to your Excellency, that if these bills shall be submitted to my disposal, I think I can pay the debts, above mentioned, and cause the greater part of the money to be subscribed to the National Bank, thereby rescuing, in some measure, the public credit and forwarding the service, while, at the same time, I shall put the bills in such a train of negotiation, that at least a very considerable time must elapse before they can be presented, and probably they may not be presented at all.

I have the honor to be, &c.

ROBERT MORRIS.[33]

FOOTNOTES:

[33] _July 4th._ I met the Directors of the Pennsylvania Bank, and a number of the subscribers to that bank called, at my desire; and I proposed that they should transfer their subscriptions from the Pennsylvania to the National Bank, and deliver up to me the bills of exchange deposited by Congress with the Directors as security; and I undertook to place the amount of what remained due to them from Congress, in the hands of Messrs Clymer & Nixon, in payment of such transferred subscriptions to the National Bank; which all that were present agreed to. _Diary._

* * * * *

TO B. FRANKLIN.

Philadelphia, July 13th, 1781.

Sir,

The unanimous appointment to the Superintendency of our Finances, with which Congress have honored me, and my conviction of the necessity that some _one_ person should endeavor to introduce method and economy into the administration of affairs, have induced me, though with reluctance, to accept that office. Mr Jay will receive by this conveyance, and forward to you, copies of those resolutions and letters which may be necessary to explain my appointment and powers.

I wish I could as readily effect, as I most ardently desire, the accomplishment of all proper arrangements. Thoroughly convinced that no country is truly independent, until, with her own credit and resources, she is able to defend herself and correct her enemies, it shall be my constant endeavor to establish our credit and draw out our resources in such manner, that we may be little burdensome, and essentially useful to our friends.

I am sure I need not mention to _you_ the importance of collecting a revenue with ease, and expending it with economy. As little need I detail the time, the authority, the ability, the favorable circumstances, that must combine for these purposes. But I think that I may assert, that the situation of a country just emerging from dependence and struggling for existence, is peculiarly unfavorable; and I may add, that this country, by relying too much on paper, is in a condition of peculiar disorder and debility. To rescue and restore her, is an object equal to my warmest wishes, though probably beyond the stretch of my abilities.

Success will greatly depend on the pecuniary aid we may obtain from abroad; because money is necessary to introduce economy, while, at the same time, economy is necessary to obtain money; besides that a greater plenty of solid circulating medium is required to support those operations, which must give stability to our credit, fruitfulness to our revenue, and activity to our operations. Among those things, which, after the experience and example of other ages and nations, I have been induced to adopt, is that of a national bank, the plan of which I enclose. I mean to render this a principal pillar of American credit, so as to obtain the money of individuals for the benefit of the Union, and thereby bind those individuals more strongly to the general cause by the ties of private interest. To the efficacy of this plan, as well as to the establishment of a Mint, which would also be of use, a considerable sum of money is necessary, and, indeed, it is indispensably so for many other purposes.

Be not alarmed, Sir, from what I have said, with the apprehension that I am about to direct solicitations to the Court of Versailles; which, after the repeated favors they have conferred, must be peculiarly disagreeable. On the contrary, as I am convinced that the moneys of France will all be usefully employed in the vigorous prosecution of the war, by her own fleets and armies, I lament every sum which is diverted from them. Our necessities have indeed called for her aid, and perhaps they may continue to do so. Those calls have hitherto been favorably attended to, and the pressure of our necessities has been generously alleviated; nor do I at all doubt that future exigencies will excite the same dispositions in our favor, and that those dispositions will be followed with correspondent effects. But I again repeat my wish, at once to render America independent of, and useful to her friends.

With these views, I have directed Mr Jay to ask a considerable sum from the Court of Madrid, to be advanced us at the Havana, and brought thence by us, if it cannot conveniently be landed here from Spanish men-of-war.[34] I say _a considerable sum_, because, as I have declared to him, I do not wish to labor under the weight of obligation without deriving from it any real benefit; and because I consider the advance of small sums rather as a temporary palliation than a radical remedy. Our disorders are such, that the former can be of no use, and it would be better to desist in a desultory defence, than to put on the delusive appearances of a vigor we do not feel; for this lulls the people into a dangerous security, and softens those hopes of the enemy, which give duration and extent to the war. It is the disorder of our finances, which have prevented us from a powerful co-operation with our allies, and which have enabled the enemy to linger on our coasts with the dregs of a force once formidable; and it is from this cause that they have been permitted to extend the theatre, and multiply the victims of their ambition.

America alone will not derive benefit from the advances which Spain may make to her. All the associates in the war will feel the _consequential_ advantages. The expense of the American war now hangs a heavy weight about the neck of Britain, and enfeebles her on that element, which she called her own. An increase of that expense, or the loss of her posts here, must necessarily follow from additional efforts on our part, and either of these must be a consequential benefit to those who are opposed to her. France will derive a small _immediate_ benefit from it, as she will thereby get more money here for her bills of exchange, than she can at present procure. But it is not so much from any advantage, which may be expected to that kingdom, or from any motives of _interest_, as from the generosity and magnanimity of the Prince, that we hope for support. I will not doubt a moment, that at your instance, his Majesty will make pressing representations in support of Mr Jay's application, and I hope that the authority of so great a Sovereign, and the arguments of his able Ministry, will shed auspicious influence on our negotiations at Madrid.

From the best returns I have been able to collect, and which are in some measure imperfect, from the confusions and disasters of the Southern States, I find that there are about seven millions two hundred thousand dollars due on certificates, which bear an interest of six per cent, payable in France, at the rate of five livres for every dollar. Many causes have conspired to depreciate the certificates, notwithstanding the interest is so well secured, and has been punctually paid. This depreciation is so great, that they are daily offered for sale at a very considerable discount, which is attended with two pernicious consequences; one, that a considerable expense is unnecessarily incurred, and the other, that the public credit is unnecessarily impaired. If I had the means, therefore, I would remove this evil by purchasing in the certificates; and to procure the means, I am to pray that you would state this matter fully to the Ministers of his Most Christian Majesty. The interest being guarantied by the Court of France, they now pay for this purpose, two millions one hundred and sixty thousand livres annually; a sum, which in less than ten years, would pay a debt of fifteen millions of livres at five per cent interest. With fifteen millions of livres, however, prudently managed, the whole of these certificates might be paid. I am sure it is unnecessary to dwell on the advantages, which would result from making such a loan for this purpose, and, I trust, that if this matter is stated to M. Necker, that enlightened Minister will co-operate in the plan, to the utmost of his ability. I again repeat, that I do not wish to lay any burdens on France; but this proposal is calculated to relieve us both; and, in any case, the expense to France will be the same. Should it be adopted, I must request the earliest notice, that my operations may commence; and, in any case, I hope that secrecy will be observed, for the most evident reasons.

I am sorry to inform you, that we have as yet no satisfactory news of the ship Lafayette; but, on the contrary, her long delay occasions the most alarming apprehensions. If, as but too probable, that ship is lost, you will more easily conceive than I can describe what will be the situation of our troops next winter.

I could wish, as soon as possible, to have a state of all the public accounts transmitted, to the end that moneys due to the United States may be paid, and measures taken to provide for such sums as they stand indebted in to others. Your Excellency will, I dare say, send them as soon as may be convenient; and I hope the public affairs will hereafter be conducted in such a manner as to give you much less of that unnecessary trouble, which you have hitherto experienced, and which could not but have harassed you exceedingly, and, perhaps, taken up time, which would otherwise have been devoted to more important objects.

I shall, probably, have frequent occasion to address you, and shall always be happy to hear from you; but the mischiefs, which arise from having letters intercepted, are great and alarming. I have, therefore, enclosed you a cypher, and in the duplicate of my letters, I shall enclose another. If both arrive, you will use one, and, in case of your absence, leave the other with such person as may supply your place. Let me know, however, which cypher you use.

The bearer of this letter, Major Franks, formerly an Aid-de-camp to General Arnold, and honorably acquitted of all connexion with him, after a full and impartial inquiry, will be able to give you our public news more particularly than I could relate them. He sails hence for Cadiz, and on his arrival will proceed to Madrid, where having delivered my letters to Mr Jay, he will take his orders for you. He will then wait your orders, and I hope, will soon after meet a safe opportunity of coming to America.

With the most perfect esteem and regard, I have the honor to be, &c.

ROBERT MORRIS.

FOOTNOTES:

[34] See a letter from Mr Morris, in _John Jay's Correspondence_, Vol. VII. p. 421.

* * * * *

TO B. FRANKLIN.

Philadelphia, July 14th, 1781.

Dear Sir,

If Major Franks had departed yesterday, as was expected, he would have left the enclosed cypher behind. It was supposed to have been with the plans of the intended bank, but was left out by accident. I wish you would, when leisure and opportunity will permit, converse with some of the eminent bankers in Paris on this plan, and ask whether a correspondence and connexion with the directors will be agreeable, and whether they would establish a credit for this bank, and to what amount, to be replaced again by remittances in other bills within such time as they may limit. Or, if they decline giving such credit, then the terms on which they will receive remittances and pay drafts of the bank.

An American bank must deal largely in bills of exchange. It will thereby rule the price of bills so as to keep it pretty steady, by passing most of the bills drawn on the continent through their channel, so as to leave a certain moderate profit. And the use of a credit in Europe will be, to have paid for their honor such bills as may be protested on account of the drawers; by which means the bank will secure the damages of twenty per cent, and pay only interest for advance and commission for negotiating. Occasion may also offer, when the bank, by drawing on Europe, shall get a high price for bills, and in a few months replace them much cheaper.

I do not wish to give you trouble on this occasion; but, if opportunities offer, you can mention the subject, and if any of the bankers will write me proposals, I will lay them before the directors. You will tell them, that although the very moderate sum of four hundred thousand dollars is proposed as the first capital, I intend to increase it gradually to ten times that sum. The only difficulty is to get it into action now that people have but little money and less confidence. I should be glad to see your name in the list of subscribers to an institution, that I believe will be permanent.

I ever am, Dear Sir, yours, &c.

ROBERT MORRIS.

* * * * *

TO THE GOVERNOR OF HAVANA.

Philadelphia, July 17th, 1781.

Sir,

The favorable attention shown to me by your Excellency in my private character, has excited those sentiments of esteem and respect, which now impel me to ask your assistance for my country.

The United States of North America, are at the present moment, possessed of more strength in men, arms, and ammunition, than when they first ventured to wage war with Great Britain. The means of subsistence are abundantly equal to our own wants, and will essentially contribute to the relief of our friends. A variety of causes, too numerous to be detailed, in the compass of a letter, have combined to destroy the credit of that paper money, which has enabled us hitherto to support the war. It has therefore become necessary to provide the means for paying the expenses to be incurred hereafter. Our people are not yet inured to taxation, neither has the revenue, which this country is capable of affording, been drawn fairly or fully into use. The derangement of our credit and finances, consequent upon the loss of faith in our paper, rendered it necessary for Congress to create a Superintendent of the Finances of the United States, in order, that he might regulate and settle the present debts, point out new funds, with the best means of collecting them, and superintend the public expenditures, so as to prevent as much as possible all excess or abuse. This arduous task is assigned to me, by a unanimous choice of that honorable body; and nothing could have induced me to undertake it, but my perfect conviction, that it is necessary that some person should undertake the work of reformation and economy. I have engaged in this business with the sole view of saving my country, and therefore think myself entitled to seek support from all who are really friends to her independency, and particularly from those nations, which have become parties in the war.

I have commenced my administration with a proposal to establish a National Bank; the plan of which I take the liberty to enclose. The subscriptions to it are going on, and I expect the very moderate sum therein proposed will soon be completed. When that is done, the directors will be chosen, incorporated, and proceed on their business. As the bank notes are intended to be made use of by government in anticipation of the revenues of this country, you will easily perceive, that the sum proposed is far short of the object, which it is intended to accomplish. My present pursuit, therefore, is to obtain such additional sums as will, when deposited in the bank, not only facilitate the anticipations above mentioned, but induce further subscriptions among our own countrymen. For when they see and feel the use of an institution, which they are yet unacquainted with, they will cheerfully and liberally support it.

It is to your Excellency that I apply for foreign aid. The vicinity of your situation, the frequent intercourse between your port and this, and your ability to comply with what I shall request, all point out the propriety of that application. Your friendly disposition towards these United States, and above all your strong attachment to the interests of your own country, will dispose you to yield me every assistance in your power. The United States have already received very considerable aid from the Court of Madrid. Much more, however is expected,[35] and in time to come these services will be repaid with honor, as they now are acknowledged with gratitude.