Chapter M: De Calonne to M. De Lafayette (7)

Our distresses induced Congress to order certain bills of exchange to be drawn on their Ministers at the Courts of Versailles and Madrid. The former have been all negotiated and paid off by the assistance of that Court. Many of the latter have also been negotiated, and those that have appeared for payment have been discharged. There is every reason to believe, that this would still happen; but we learn that the advance of money in Europe is rendered inconvenient during the war, by the impediments, which it occasions to the usual course of remittances from his Majesty's American territories. We have desisted, therefore, from the further sale of those bills, especially as we have reason to expect, that in consequence of measures adopted here, Mr Jay will obtain from your country a much larger sum than we had before asked for; and that the greater part, if not the whole of it, will be paid to us at your port. However this may be, my present view is to obtain from Havana, as expeditiously as possible, four hundred thousand Mexican dollars, in order to deposit them in the bank, and thereby doubling the capital, give its operations such force as will draw the attention of our own citizens, and induce them to afford it such assistance as will reduce our necessities, and place us in a situation to be less troublesome to our allies and friends in the common cause.

His Excellency the Chevalier de la Luzerne, Minister of France at this place, in consequence of orders from his Court, has authorised me to draw bills of exchange on Paris to a very considerable amount; and being sensible of the propriety of my proceedings, he will give you assurances, that they shall be punctually paid. I transmit a bill for five hundred thousand livres to Robert Smith, now appointed agent for these United States at your port, in order that he may negotiate it, and ship the money back to my address. Should it in any manner promote the interest of your Court he will certainly give your Excellency a preference in the purchase; and I am confident, that if this should not be convenient to you, you will countenance and promote his negotiations with private persons. I have also transmitted to Mr Smith certain bills, drawn some time past by order of Congress, on his Excellency John Jay, to the amount of one hundred and twenty thousand, three hundred and eightyone dollars. I am to request, and have strong hopes, that when Mr Smith shall have deposited these bills with you, your Excellency will advance that sum, so that he may immediately ship it to my address.

We are convinced that these bills, if sent forward, would have been paid by your Court; but as such a negotiation would bring no money into the treasury, I propose that you keep them in your possession until the pleasure of the Court shall be known. I will write very fully to Mr Jay on this subject, and obtain the earliest information. But lest the Court should not choose that these bills be finally accepted by you in discharge of the moneys advanced on them, I have empowered Mr Smith for your perfect security to enter into conditional stipulations to repay your Excellency that money by a delivery of flour to the amount, at such price as you and he may agree for; the payment to commence as soon after the pleasure of the Court shall be known as circumstances will admit.

I hope, Sir, you will find it agreeable to your inclinations, and perfectly consistent with the duties of your station to gratify my desires. They are very moderate considering the necessities of this country, and your ability to minister to its relief. Besides, your Excellency's good sense will readily perceive, that money granted to invigorate the operations of America will weaken and distress the common enemy much more than the same sums expended in Europe, because the enemy must prosecute the war here at more than four times the expense at which it must be carried on there.

Assuring myself of assistance from your Excellency I have ordered one of the continental frigates to proceed with these despatches for Havana. She will take with her some flour, which I have ordered returns for in dollars.

There are two most cogent reasons why this frigate should be despatched instantly from your port with the money. The first is, because we are much in want of it; and the second is, to prevent our enemies from the possibility of receiving any advice of her. We have so contrived things here, that everybody believes she is going to join the French fleet at Rhode Island, and to carry the flour for their use.

On the whole, I most earnestly entreat your Excellency, that if it be at all convenient and consistent with your duty, you will advance the whole of the four hundred thousand dollars in question to Mr Smith, so that the frigate may immediately return.

I am sensible that there are certain duties payable to his Majesty on the exportation of money from your port; but as this which I apply for, is to be expended in carrying on the war against his Majesty's enemies, I hope it may be dispensed with; if not, our Minister at Madrid will be directed to make application to the Court on that subject, so that the duty being charged to us in the first instance, may, if not remitted, be added to the general sum. The same observations will apply to the flour on board this frigate, which is also public property.

I hope it is not necessary to add anything more to induce a full compliance with my requests. But his Excellency the Chevalier de la Luzerne, Minister of France, and Don Francisco Rendon, your own Agent here, will also write you on the subject of this application.

I have the honor to remain, with sentiments of the highest esteem and respect, &c.[36]

ROBERT MORRIS.

FOOTNOTES:

[35] This anticipation was never realized, as the whole amount of the Spanish loan to the United States during the war, was no more than one hundred and fifty thousand dollars.

[36] For several letters from Mr Morris to Mr Jay, on the subject of loans in Spain, and the National Bank, see _John Jay's Correspondence_, Vol. VII. pp. 421-449.

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TO ROBERT SMITH, AGENT FOR THE UNITED STATES IN CUBA.

Philadelphia, July 17th, 1781.

Sir,

Upon a proper representation of your character, situation, and attachments to your country and its cause, the Congress of the United States of America have thought proper to appoint you their Agent at the port, of Havana and Island of Cuba. I take much pleasure in transmitting your commission, which you will find enclosed herein; because my knowledge of you leads me to expert every exertion, which your situation and the circumstances attending it will admit of, in favor of your country.

You will not find any salary annexed to your appointment for this plain reason, that we cannot afford any. It is our present business to reduce salaries heretofore given, and not to create new ones. This appointment, however, may be attended with pecuniary advantages, because a public character may, and no doubt will, point you out to American merchants as the proper person to intrust with their commercial affairs. Continental prizes and other objects may occasionally turn up, which will leave a reasonable commission behind; and you will have the pleasure of serving Congress when necessary, and the citizens and commerce of your country, as often as opportunities for so doing may occur.

I shall now put your talents to the proof. You will find enclosed a letter I have written for his Excellency Governor Navarro (or should he be gone, for his successor) which will unfold to you very fully my intentions. You will find enclosed in it for him, as in this letter for you, the plan of a National Bank, which I have proposed to establish for many valuable purposes. You will observe that the sum proposed as a capital is far short of what it ought to be; but I was afraid of attempting too much at first, and must now endeavor to increase it by other means. If any of your acquaintances in the Havana have a mind to speculate in the American funds, I think they cannot place their money on a more secure or profitable establishment. This Bank will, I believe, exist for ages to come; and I am persuaded the annual dividends will not be less than from eight to ten per cent. They may also have the honor and pleasure of seeing their names enrolled among the first promoters of this useful institution, on which the salvation of our country in some measure depends. Should any of them incline to subscribe, they must send hither money at their own risk; consigning it to whomsoever they please, with power to act for them. I hope you will promote this business, and in order that you may be able to show the profits arising from it, I am to observe, that when once, by punctual payment, the notes of the bank have obtained full credit, the sum in specie, which will be deposited, will be such, that the bank will have the interest of a stock two or three times larger than that which it really possesses. Should M. Miralles, or any of the family be so inclined, I will put any part of their money into the bank, which they may think proper.

By captain James Nicholson, commanding the frigate Trumbull, I send a bill of lading and invoice of five hundred barrels of flour, which is all fresh and good, and a considerable part of it superfine. This flour I have caused to be shipped to your address, on account and risk of the United States of North America. Be pleased to receive it as quickly as may be from the ship, make the most advantageous sale of it, which you can, and remit the net proceeds in Mexican dollars, consigned to my order, for account and at the risk of the United States. I expect you will not charge more than five per cent for transacting the business, that is, two and a half per cent on the sales, and the same on the returns.

I have also enclosed a bill of exchange, drawn by myself on Messrs Le Couteulx & Co. bankers in Paris, to the amount of five hundred thousand livres tournois; this bill is at sixty days' sight, and you may depend it will be punctually paid, for I have the authority of the Court of Versailles to draw it, and every assurance I could wish. You will observe, by my letter to the Governor, that he is to have the refusal of this bill; you will therefore offer it to him in the first instance. When I consider the risk, which must attend sending money from Havana to Cadiz, and the remittances, as well private as public, which are to be made from one place to the other, I cannot but persuade myself, that unless the government and the people are alike blind to their interests, good bills must sell at a very considerable advance. Should the Governor decline taking the bill on Paris, as it is not probable that any one private person would purchase it, you may either remit it to the House of Le Couteulx & Co. in Paris, or to the House of Messrs. J. L. & L. Le Couteulx & Co. at Cadiz, as may be most convenient for your operations. You will then draw on the House to whom you remit the bill, and sell your bills to the same amount. Should you remit to the House in Cadiz, let me know it, that I may write and apprize them of it; but this I shall do provisionally, beforehand, so that they may be prepared for you.

I have also, as you will perceive, written to his Excellency on the subject of certain other bills of exchange, drawn on Mr Jay. You will endeavor to get the money for these, if possible; and in case it is required, you will enter the stipulations there mentioned, as to the shipment of flour. In this last case, get the flour fixed at as high a rate as possible, and let me have due notice, so that I may punctually cause to be fulfilled, whatever contracts you shall, on the part of the public, have entered into.

Should his Excellency be inclined to make those advances of money, which I have so earnestly pressed upon him, you will be able the sooner to despatch the frigate, which I hope will be done without delay. But as there is a risk in placing large sums on board of any one vessel, I am to observe, that if there should be any fast sailing vessels about to leave the Havana at the same time, and if in consideration of convoy, they will take the public money freight free, you will then prudently distribute it among them, and direct Captain Nicholson to give them signals, and to take them under his convoy. But I must caution you, that on no consideration is any private property to be covered as belonging to the public, either to save the duties or for any other purpose. You will, therefore, use all proper vigilance to prevent everything of this sort, should it be attempted. If there are not such vessels as Captain Nicholson and you shall approve of ready to sail, then ship the whole money in the frigate; for the risk of being waylaid by the enemy in consequence of any unnecessary delay, is greater than that of being otherwise intercepted.

It is unnecessary for me to mention to you, that we want money exceedingly. This very measure must convince you of it. Exert yourself therefore to get it, and you will merit much at the hands of your country. Should you not succeed in getting the whole sum I have asked for, get as much as you possibly can; and if the Governor should decline advancing any money on the bills drawn by order of Congress on Mr Jay, perhaps the Intendant may accept your contract for flour, and take these bills in security, or you may possibly borrow on their credit from individuals, to be repaid when I shall send you shipments of flour, which I will cause to be done so soon as I shall hear from you to this effect.

I have forbidden Captain Nicholson to cruise, but should fortune enable him to bring a good prize into Havana, the Continent has one half, and you must send that half to me in dollars. Whatever supplies the frigate is absolutely in need of, you must let her have; but I entreat, that the expenses may be as moderate as possible, and the best way to secure this is to despatch her quickly, for the moment they get clear of the salt water air, and feel, their land tacks on board, every soul of them will try to get his hands into your pockets; but take care.

I have desired Captain Nicholson to consult with and obey you whilst in Havana, and to push off whenever you say the word. I shall send you flour by private vessels, for the sake of getting money back, and write you further, as occasion may require.

I am, Dear Sir, &c.

ROBERT MORRIS.

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TO B. FRANKLIN.

Philadelphia, July 19th, 1781.

Sir,

The foregoing are duplicates of my letters of the several dates there mentioned, by Major Franks, who has sailed for Cadiz. I now enclose to you duplicate copies of the letters and resolutions, referred to in mine of the thirteenth.

I do not write to Colonel Laurens, because I know not whether he is still in France, and because I am confident you will make to him all necessary communications. I pray you, if he is still with you, to present my compliments to him, and inform him of the reasons of my silence. Colonel Laurens's letter of the 9th of April last, from Versailles, has been received, and I am induced to hope, that the ten millions of livres mentioned in it, to be borrowed in Holland, will be, as he says he shall request, advanced from the treasury of France.

He mentions also a promise of the Marquis de Castries to make immediate arrangements for the safe transportation, of the pecuniary and other succors destined hither. It would be well that the money, or as much of it as possible, were in heavy half Johannes. Whether this letter may arrive in time I know not, but if it should, you will, I hope, be able to effect my views.

If the fifteen millions of livres I mentioned in my letter of the 13th, can be obtained, it will be best that they should be retained in France, provided the ten millions be sent to America; for in that case, the exchange may, I believe, be put upon such a footing as to answer every valuable purpose. Of consequence the risk will be saved to America, and France will not suffer by the exportation of so much coin. To this it may be added, that a loan will probably be more easily obtained, if the days of payment of the money by the subscribers to it be somewhat distant, which will answer very well for bills of exchange, though not quite so well for the exportation of money.

I have the honor to be, &c.

ROBERT MORRIS.

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TO B. FRANKLIN.

Philadelphia, July 21st, 1781.

Sir,

I have now to inform you, that the State of Pennsylvania had emitted five hundred thousand pounds in bills of credit, funded in such manner, that there could be no reasonable doubt of their redemption. But the public confidence had been so impaired, that these bills, soon after they came out, rapidly depreciated, notwithstanding the solidity of the funds by which they had been secured. The executive authority of Government, therefore, declined issuing more of them than were then in circulation (being one hundred and thirty thousand pounds), and called together the Legislature. The Assembly, at their late meeting, took measures for the collection of a very considerable tax, sufficient to absorb all the paper then in circulation, and which was receivable in taxes, as also a considerable balance in specie. It is therefore evident, that if the tax has time to operate before any more of the paper be issued, it must necessarily rise in value.

The Assembly did me the honor to commit this sum of five hundred thousand pounds to my care, for the purpose of paying to Congress a balance due on the resolutions of that honorable body, of the 18th of March, 1780, and of procuring the specific supplies which had been called for, the greater part of which had been unpaid. In this situation, it has been my study to effect both these objects, without making any new issues of the paper money. I cannot easily describe to you the good consequences which would follow from the appreciation of it. You will partly conceive them, when I inform you, that it is now at five for one, and that my expectation of specific supplies, or rather of furnishing rations to the amount of them, is very much founded upon the rise of its value.

Finding, however, that the balance of money due to the United States has been already drawn for by them, and that the holders of those drafts are very clamorous for payment, I must put money into the hands of the proper officer immediately. To accomplish this, I have fallen upon an expedient, which, while it answers that purpose, will be productive of another very considerable advantage. To explain which, I must previously inform you, that I have lately refused to draw bills on Messrs Le Couteulx & Co. for any other than specie; so that the paper will no longer answer the purpose of procuring a remittance to Europe. I shall, at the same time, borrow such of it as I can discover to have been hoarded, and by paying it to the holders of the drafts drawn by Congress, throw it again into circulation. I shall then draw bills on you for four hundred thousand livres, payable at six months' sight or more, for which I expect to get four hundred thousand paper dollars; a sum sufficient to satisfy the demand. I shall draw on Messrs Le Couteulx & Co. in your favor, to this amount, payable at sixty days' sight, which will probably leave four months for my operations; but at any rate, it will leave three months, which will be amply sufficient; and, therefore, in three months after I shall have drawn on you, I shall remit you my drafts on Messrs Le Couteulx & Co. If in that period this money can be appreciated, it will be a gain to the United States of the difference, which you will clearly see to be very considerable. By this means, also, I shall so economise the funds placed in my hands, that I can make them productive of the supplies from this State.

In mentioning these supplies, it occurs to me, also, to make mention of what has passed, relative to the contract you entered into for a part of them, to the amount of four hundred thousand dollars. Colonel Mennonville spoke to me on this subject, from the Count de Rochambeare, shortly after my appointment. Upon considering the very slender situation of our revenue, or rather the total want of it, and that the several States had omitted furnishing the specific supplies demanded of them, I told Colonel Mennonville, and told him truly, that I had but little prospect of complying with your promise. It is not easy to convey to your mind an idea of the pain I suffered from being obliged to make this declaration. I felt for you, for Congress, for America. There is no man in the world more deeply impressed than myself with the importance of fulfilling every compact made by a proper authority. All my reasonings, my feelings, and my experience, have concurred in producing a thorough conviction, that it is essential according to the principles of justice, from a regard to our national honor, and for the sake of our general interests. I shall, therefore, notwithstanding what has passed between Colonel Mennonville and myself, assiduously endeavor to perform your promise, and I am happy to add, that I am not without hopes of success.

With respect to the bills I intend to draw on you, I must apologize for the trouble they will give you, which I hope will be but little. It will be only necessary to accept them, and direct the holders what banker to apply to for payment. That banker will be enabled to make payment, by the bill I shall draw on Messrs Le Couteulx, & Co. in your favor. Perhaps it may be most convenient to send the bill holders to them, but this you will be the best judge of. It is unnecessary to state any reasons to you for accepting these bills, as I cannot suppose you will have the least hesitation on that subject. I take this opportunity, however, of pledging myself to you, that you shall suffer no inconvenience from honoring them with your acceptance, as I shall most certainly remit in time the bills sufficient to discharge all I draw on you. My reason for drawing them on you at all arises from this circumstance, that I am desirous of keeping the transaction entirely distinct, and that many inconveniences would follow from drawing bills on Messrs Le Couteulx, & Co. at six months' sight for paper, while I draw others at sixty days' sight for specie, especially after my refusal to draw on them except for specie, which refusal was, as you will perceive, a necessary part of my plan. Add to this, also, that the arrangements I had made with the Minister of his Most Christian Majesty would not permit it. When this transaction shall be finished, that is, when my remittances to you and my drafts on you are all paid, be pleased to send me copies of the bankers' accounts.

I have the honor to be, &c.

ROBERT MORRIS.

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CIRCULAR TO THE GOVERNORS OF THE STATES.

Philadelphia, July 25th, 1781.

Sir,

I had the honor to write to you on the ---- instant, enclosing a certified copy of the account of your State, as it stands in the treasury books of the United States. I now pray leave to recall your attention to it.

It gives me great pain to learn, that there is a pernicious idea prevalent among some of the States that their accounts are not to be adjusted with the continent. Such an idea cannot fail to spread listless languor over all our operations. To suppose this expensive war can be carried on without joint and strenuous efforts, is beneath the wisdom of those who are called to the high offices of legislation. Those who inculcate maxims, which tend to relax these efforts, most certainly injure the common cause, whatever may be the motives which inspire their conduct. If once an opinion is admitted, that those States who do the least and charge most will derive the greatest benefit, and endure the smallest evils; your Excellency must perceive that shameless inactivity must take the place of that noble emulation, which ought to pervade and animate the whole Union. It is my particular duty, while I remind my fellow citizens of the tasks, which it is incumbent on them to perform, to remove, if I can, every impediment which lies in the way, or which may have been raised by disaffection, self interest, or mistake. I take, therefore, this early opportunity to assure you, that all the accounts of the several States with the United States, shall be speedily liquidated if I can possibly effect it, and my efforts for that purpose shall be unceasing. I make this assurance in the most solemn manner, and I entreat that the consequences of a contrary assertion may be most seriously weighed and considered, before it is made or believed.

These accounts naturally divide themselves into two considerable branches, viz. those which are subsequent to the resolutions of Congress of the 18th of March, 1780.[37] The former must be adjusted as soon as proper officers can be found and appointed for the purpose, and proper principles established so as that they may be liquidated in an equitable manner. I say, Sir, in an equitable manner, for I am determined that justice shall be the rule of my conduct, as far as the measure of abilities, which the Almighty has been pleased to bestow, shall enable me to distinguish between right and wrong. I shall never permit a doubt, that the States will do what is right; neither will I ever believe that any one of them can expect to derive advantage from doing what is wrong. It is by being just to individuals, to each other, to the Union, to all; by generous grants of solid revenue, and by adopting energetic methods to collect that revenue; and not by complainings, vauntings, or recriminations, that these States must expect to establish their independence and rise into power, consequence and grandeur. I speak to your Excellency with freedom, because it is my duty so to speak, and because I am convinced that the language of plain sincerity is the only proper language to the first magistrate of a free community.

The accounts I have mentioned as subsequent to the resolutions of the 18th of March, 1780, admit of an immediate settlement. The several States have all the necessary materials. One side of this account consists of demands made by resolutions of Congress, long since forwarded; the other must consist of the compliances with those demands. This latter part I am not in a capacity to state, and for that reason I am to request the earliest information, which the nature of things will permit, of the moneys, supplies, transportation, &c. which have been paid, advanced, or furnished, by your State, in order that I may know what remains due. The sooner full information can be obtained, the sooner shall we know what to rely on, and how to do equal justice to those who have contributed, and those who have not, to those who have contributed at one period, and those who have contributed at another.

I enclose an account of the specific supplies demanded of your State, as extracted from the journals of Congress, but without any mention of what has been done in consequence of those resolutions. Because as I have already observed, your Excellency will be able to discover the balance much better than I can.

I am further to entreat, Sir, that I may be favored with copies of the several acts passed in your State since the 18th of March, 1780, for the collection of taxes and the furnishing supplies, or other aids to the United States; the manner in which such acts have been executed, the times which may have been necessary for them to operate, and the consequences of their operation. I must also pray to be informed of so much of the internal police of your State as relates to the laying, assessing, levying, and collecting taxes. I beg leave to assure your Excellency, that I am not prompted either by an idle curiosity, or by any wish to discover what prudence would dictate to conceal. It is necessary that I should be informed of these things, and I take the plain, open, candid method of acquiring information. To palliate or conceal any evils or disorders in our situation, can answer no good purpose; they must be known before they can be cured. We must also know what resources can be brought forth, that we may proportion our efforts to our means, and our demands to both. It is necessary, that we should be in condition to prosecute the war with ease, before we can expect to lay down our arms with security, before we can treat of peace honorably, and before we can conclude it with advantage. I feel myself fettered at every movement, and embarrassed in every operation from my ignorance of our actual state, and of what is reasonably to be asked or expected. Yet when I consider our real wealth and numbers, and when I compare them with those of other countries, I feel a thorough conviction, that we may do much more than we have yet done, and with more ease to ourselves than we have yet felt, provided we adopt the proper modes of revenue and expenditure.

Your Excellency's good sense will anticipate my observations on the necessity of being informed what moneys are in your treasury, and what sums you expect to have there, as also the times, by which they must probably be brought in. In addition to this, I must pray you to communicate the several appropriations.

A misfortune peculiar to America, requires that I entreat your Excellency to undertake one more task, which perhaps is far from being the least difficult. It is, Sir, that you will write me very fully as to the amount of the several paper currencies now circulating in your State, the probable increase or decrease of each, and the respective rates of depreciation.

Having now stated the several communications, which are most indispensable, let me entreat of your Excellency's goodness, that they may be made as speedily as possible, to the end, that I may be early prepared with those propositions, which from a view of all circumstances, may be most likely to extricate us from our present difficulties. I am also to entreat, that you will inform me when your Legislature is to meet. My reason for making this request is, that any proposals to be made to them, may arrive in season for their attentive deliberation.

I know that I give you much trouble, but I also know, that it will be pleasing to you, because the time and the labor will be expended in the service of your country. If, Sir, my feeble but honest efforts, should open to us the prospect of American glory; if we should be enabled to look forward to a period, when, supported by solid revenue and resources, this war should have no other duration or extent than the wisdom of Congress might allow, and when its object should be the honor and not the independence of our country; if with these fair views the States should be roused, excited, animated, in the pursuit, and unitedly determining to be in that happy situation, find themselves placed there by the very determination; if, Sir, these things should happen, and what is more, if they should happen soon; the reflection that your industry has principally contributed to effect them, would be the rich reward of your toils, and give to your best feelings their amplest gratification.

I have the honor to be, &c.

ROBERT MORRIS.

FOOTNOTES:

[37] It stands thus in the manuscript, but there seems to be an omission of what is meant by the _first branch_ of the accounts.

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B. FRANKLIN TO ROBERT MORRIS.

Passy, July 26, 1781.

Dear Sir,

I have just received your very friendly letter of the 6th of June past, announcing your appointment to the superintendence of our finances. This gave me great pleasure, as from your intelligence, integrity and abilities, there is reason to hope every advantage, that the public can possibly receive from such an office. You are wise in estimating beforehand, as the principal advantage you can expect, the consciousness of having done service to your country; for the business you have undertaken is of so complex a nature, and must engross so much of your time and attention, as necessarily to injure your private interests; and the public is often niggardly even of its thanks, while you are sure of being censured by malevolent critics and bug-writers, who will abuse you while you are serving them, and wound your character in nameless pamphlets; thereby resembling those little dirty insects, that attack us only in the dark, disturb our repose, molesting and wounding us, while our sweat and blood are contributing to their subsistence. Every assistance that my situation here, as long as it continues, may enable me to afford you, shall certainly be given; for, besides my affection for the glorious cause we are both engaged in, I value myself upon your friendship, and shall be happy if mine can be made of any use to you.

With great and sincere esteem, I am ever, Dear Sir, &c.

B. FRANKLIN.

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B. FRANKLIN TO ROBERT MORRIS.

Passy, July 26th, 1781.

Dear Sir,

I have received the letter you honored me with, of the 8th of June past, acquainting me, that as Superintendent of Finance, you have named Messrs Couteulx, & Co. at Paris to receive from his Majesty's Ministers the money granted to Congress, that they may be enabled to honor your bills whenever they appear; and you intimate a desire to be informed of the responsibility of that house.

With regard to the six millions given by the King in aid of our operation's for the present campaign, before the arrival of Mr Laurens, 2,500,000 of it went in the same ship with him in cash; stores equivalent to 2,200,000 more of it were ordered by him, and are shipped; 1,500,000 were sent to Holland, to go in the ship commanded by Commodore Gillon. Add to this, that Captain Jackson, by his orders, purchased clothing and stores in Holland, to the value of about £50,000 sterling, for which he has drawn bills on me, which bills I accepted, and also agreed to pay those drawn on Messrs Laurens, Jay, and Adams; expecting aid from a projected loan of 10,000,000 of livres for our use in Holland. But this loan meeting with unforeseen difficulties, and its success uncertain, I have found myself obliged to stop the money in Holland, in order to be able to save the honor of the Congress drafts, and to comply with my engagements. By these means you have really at present no funds here to draw upon. I hope, however, that Messrs Couteulx, & Co. will be enabled to honor your drafts; but I trust in your prudence that you will draw no more till you have advice of funds provided. And as the laying out so much money in Holland instead of France is disapproved here, and the payment will, therefore, not be provided for, I must earnestly request your aid in remitting that sum to me before December next, when my acceptances will become due, otherwise I shall be ruined with the American credit in Europe.

With regard to the wealth and credit of the House of Le Couteulx, & Co. I have never heard it in question. But as Mr Ferdinand Grand, banker at Paris, and his broker, Sir George Grand, banker in Holland, have been our zealous and firm friends ever since our arrival in France, have aided us greatly by their personal interest and solicitations, and have often been six or seven hundred thousand livres in advance for us, and are houses of unquestionable solidity, I cannot but be concerned at any step for taking our business out of their hands, and wish your future bills may be drawn on Ferdinand Grand, for I think it concerns our public reputation, to preserve the character of gratitude, as well as that of honesty and justice. The commission hitherto charged to us by Mr Grand for receiving and paying our money is a half per cent, which, considering the trouble given by the vast number of small drafts for interest of the loans, appears to me a moderate consideration.

With great and sincere esteem, I have the honor to be, Dear Sir, &c.

B. FRANKLIN.

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TO THE GOVERNORS OF MASSACHUSETTS, RHODE ISLAND, NEW YORK, DELAWARE,
MARYLAND, AND NORTH CAROLINA.

Philadelphia, July 27th, 1781.

Sir,

I find upon examination, that the recommendation of Congress of the 3d of February last, for laying an impost of five per cent on goods imported, and a like impost of five per cent on prizes and prize goods, has not been complied with by your State.

The object which Congress had in view when they issued this recommendation was of the utmost importance, and every day gives it an additional weight and magnitude. Whether these States are able to support the annual expenses of the war by their annual revenue, and whether it would be prudent and wise to draw forth such revenue, are questions which may hereafter be agitated, considered, and answered. For the present it is sufficient to observe, that no methods have hitherto been adopted to produce a revenue by any means adequate to the current expenses. The public debt, therefore, is large and increasing. The faith of the United States is pledged to the public creditors. At every new loan it must be pledged anew, and an appeal is now made to the States individually, to support the public faith so solemnly pledged. If they do, it is possible that public credit may be restored, if not our enemies will draw from thence strong arguments in favor of what they have so often asserted, that we are unworthy of confidence, that our union is a rope of sand, that the people are weary of Congress, and that the respective States are determined to reject its authority. I fear that a mere verbal contradiction of these assertions will have but little effect. No words will induce men to risk their property upon the security of a nominal union. Your Excellency will be able at once to determine whether that union is more than nominal, in which any part shall refuse to be bound for the debts of the whole, or to contribute to the general defence. I must be permitted, however, to observe, that in matters of public credit long delay is equivalent to direct refusal.

Despotic governments are in war superior to others by the union of efforts, the secrecy of operations, and the rapidity with which every wheel may be moved by one sovereign will. This superiority, however, is amply compensated to free governments by the ardent attachment of their citizens, and the general confidence, which enables them to make exertions beyond their force, and expend in one year the revenues of many. A single view of our enemy, in the unequal contest she now carries on, will demonstrate these advantages more clearly than any arguments. The credit of Great Britain is not only her chief, but it is almost her only support. Inferior in everything else to the associates combined against her, she still makes head everywhere, and balances the opposition through the four quarters of the globe. While we feel the force of these last struggling of her ambition, we must admire the source from whence they flow. Admiring, we should endeavor to imitate, and in order to succeed, we need only to make the attempt. There was a time when public confidence was higher in America than in any other country. Hence the existence of that paper, which bore us through the conflict of five years' hostility. In the moment when no others dared oppose Great Britain in her career towards universal empire, we met her ambition with our fortitude, encountered her tyranny with our virtue, and opposed her credit with our own. We may perceive what our credit would have done, had it been supported by revenue, from what it has already effected without that support. And we have no reason to doubt but that it may be restored, when we reflect on the fate which paper currencies have formerly sustained. The appeal, as I have already had the honor to observe, is made by Congress to the several States. Some of them have answered by passing the laws required, others are silent. Whence this silence proceeds, I confess myself at a loss to determine. Some reasons, indeed, I have heard assigned by individuals in conversation, but I cannot conceive that they should have weighed with the Legislatures. Indeed I can hardly conceive how any reasons can have weighed against a matter of such importance as the keeping public faith inviolate.

I have heard it said, that commerce will not bear a five per cent duty. Those who make such assertions must be very little acquainted with the subject. The articles of commerce are either such as people want, or such as they do not want. If they be such as people want, they must be purchased at the price for which they can be had; and the duty being on all, gives to no seller any advantage over another. If, on the contrary, the article be such as people do not want, they must either increase their industry so as to afford the use of it with the duty, or else they must dispense with that use. In the former case, the commerce is just where it was, and in the latter case the people consume less of foreign superfluities, which certainty is a public benefit.[38]

I have also heard it said, that the duty should be carried to the account of the State where it is levied. What can be the object of those, who contend for this point, I know not. If there are doubts as to the justice of Congress, that body should not have been intrusted with the power of apportioning quotas on the several States. If, on the contrary, those who make this proposition, expect that the commercial States, by carrying the five per cent duty to their private account, can derive from their neighbors, the idea is as fallacious as it is unjust. The equity of Congress would lead them to relax so much in the quotas as would render the contribution of the States proportionate, or if that could not be done, the suffering State would be induced to carry on its commerce. Thus the end would be defeated, as indeed it ought; for surely the advantage derived by the mercantile States, as a mercantile profit, is sufficient without exacting a revenue in addition to it. Articles imported into the country are consumed in the country. If each pays a duty, that duty will be paid by all. The tax will fall equally on all, and therefore ought, in justice, to be carried to the general account.

I have also heard it suggested, that the public debts ought to be divided among the several States, and each be called to provide for its proportion. This measure would be sufficient to destroy the credit of any country. The creditors trust the Union, and there can be no right to alter the pledge which they have accepted for any other, even for a better one, without their free consent. But this is not all; there is in it a principle of disunion implied, which must be ruinous. Even at this late period, the States might singly be subjugated. Their strength is derived from their union. Everything, therefore, which injures that union, must impair the strength which is dependent upon it.

I shall not encroach longer upon your Excellency's patience by adducing farther arguments. Everything for and against the proposition, has doubtless been considered by the United States in Congress assembled, with that attention which is due to the importance of those objects on which they deliberate. I think, however, it may fairly be concluded, that those who wish to re-establish the credit and confirm the union of these States, will comply with this requisition. As I do not doubt that this is the sentiment of that State over which you preside, I shall believe that the Legislature at their next session, will pass the proper laws, and I shall at present only entreat that it may be done as speedily as possible.

I take the liberty, however, on this occasion, to make an observation, which applies indeed to many others. Those who have the public weal very seriously at heart, cannot but lament that the acts passed by many States on the requisitions of Congress, have been fettered with restrictions, as to their operation and effect, very inconsistent with that confidence which is due to the integrity of the United States in Congress assembled. Nothing can be more pernicious than the jealousy which dictates clauses restraining the operation of laws, until similar laws shall have been passed by the other States, or confining the revenue or supplies to partial or particular objects, not within the design of Congress, or short of their intentions; or any other clauses, which show a distrust of the States in the sovereign representative of America, or in each other. Such jealousies must prove highly detrimental, if not ruinous. And surely there can be no ground to entertain them, for the Congress is composed of Representatives freely chosen, and is of consequence under the control of those by whom they were appointed. Nothing, therefore, ought to prevent the free and generous communication of all necessary powers to Congress; and I am confident that such a communication will more effectually dishearten the enemy, encourage our friends, and promote the general and unanimous efforts of the whole community, than any other circumstance which could possibly happen. It is a truth, that the enemy does not even pretend to hope anything except from sowing discord among us, and it is but too true, that while the whigs of America are daily more firm and united in the cause of independence, there has been too little attention paid to give to that union of sentiment a proper political form and consistency. I am not, however, the less confident that in this, as in everything else, the enemy will, to their cost, discover that their hopes have been extremely fallacious.

With every sentiment of respect, &c.

ROBERT MORRIS.

FOOTNOTES:

[38] For a very interesting letter from the President of Congress to the Governor of Rhode Island, on the matter of duties to be levied by the States, reported by a Committee, of which Hamilton was Chairman, see the _Public Journals of Congress_, under the date of April 29th, 1783.

* * * * *

TO JOHN JAY, MINISTER IN SPAIN.

Philadelphia, July 29th, 1781.

Sir,

I enclose you copies of my letters, of the 17th, to the Governor of Havana, and Robert Smith. These letters will require no explanation to you. In addition, however, I am to inform you, that my letter to the Governor was shown to Don Francisco Rendon, whose full approbation of it is contained, in the enclosed copy of his note to me.

I am to request your early attention to this matter, and that you will support and justify the measures I have taken, and which may be taken in consequence of them by others.

With every sentiment of respect, &c.

ROBERT MORRIS.

* * * * *

TO THE PRESIDENT OF THE COUNCIL OF PENNSYLVANIA.

Philadelphia, July 30th, 1781.

Sir,

I am favored with your Excellency's letter, of the 27th instant, for which I beg leave to make my acknowledgements.

I must again repeat my regret, that the means devised by the Legislature are unequal to the exigencies of the State. A majority of the Assembly seemed much disposed, at their late meeting, to adopt such measures as were calculated to promote the public service; and therefore it is to be lamented that they were not called, after passing the resolutions mentioned in your letter, to appropriate to the disposition of Council, such funds as might have been adequate to the demands they are liable to, if those which remained for that purpose were deemed insufficient. I still hope, however, that the collection of specie in taxes may enable the Council to effect more than present appearances promise; but it is evident, that the money allotted to my disposal is intended for the procuring specific supplies, and paying the balance of the four tenths of the new Continental emission, and that I cannot apply any part of it to other purposes, without crediting the State in account with the United States for such part, at a value equal to gold and silver. I must observe, that the resolutions taken by the Assembly, were consequent upon a report made to them, and communicated to me by order of the House, after it had been made. This report also was by a committee appointed on a message from your Excellency in Council to the Assembly, and it is therefore to be presumed, that it originated in that message. Be that as it may, this at least is certain, that the resolutions of the Assembly were proposed by them, and accepted by me.

With respect to the balances due from the State, I am to observe, that I have a perfect conviction of and reliance on the justice of Congress, who will I am persuaded, make every equitable and proper allowance; and your Excellency will perceive by the circular letters I have had the honor to transmit, my determination to have the accounts of every State with the United States settled on just principles, with all possible expedition.

I am obliged by your communication as to Mr Searle's mission,[39] and assure you, that I lament his disappointments, and still more so, that his negotiations have met with any opposition, which to me was quite unexpected. I freely confess, that I did not expect he would be successful; nevertheless, he had my good wishes, and had it been in my power, he should have experienced my readiness to assist every public measure. I wish his efforts in Holland may be productive, but I have very little expectation of it, being convinced that war with England will create such demand for money, and procure for the lenders such security as will prevent them from listening to American proposals. It was from a belief that your Excellency and the Council would give your support to measures which have the public good for their object, that I sought your confidence, asked your advice, and relied on your assistance. Entertaining still the same opinion, I shall freely and candidly give my sentiments and opinions on every proposition, which the Council may think proper to refer to me.

The arguments against drawing paper money from the treasury, and throwing it into circulation, had forcibly impressed my mind; and nothing but necessity will compel me to have recourse to it, being very desirous to pay every possible attention to your Excellency's request.