Part 10
Upon my arrival here yesterday evening, I communicated the intelligence received from General Wayne, to the President of Congress and the French minister. The latter surprised me greatly, by informing me, that only one 74 gun ship of the Count De Grasse’s division, and the Fier Rodrigue, had arrived at Chesapeake. I am at a loss how to account for the absence of the rest. They have not been within the reach of a superior enemy’s force: no storm has happened, within our knowledge, to drive them to any considerable distance from the coast. It cannot rationally be supposed that the Count has received countermanding orders, and that a capital ship of the line, together with a very valuable warlike merchantman, is to be sacrificed. Be the case as it may, all hopes of passing our reinforcement for the southern department, by sea, are out of the question. The North Carolina Brigade, after profiting by the navigation of the Delaware as far as it would serve them, marched to the head of Elk. Thence they proceed, by water, across the Chesapeake, and up to Petersburgh, where they are to be overtaken by their wagons, and pursue the rest of their way by the middle road to Charleston. This is the route marked by the Board of War, and a Committee of Congress appointed to confer with them; and I believe it was recommended by Doctor Burke, one of the North Carolina delegates lately from that country. It is intended that the Virginians should pursue the same as far as Petersburgh, where they are to take an upper road. In this route we do not avail ourselves of Albemarle Sound. The going up the river to Petersburgh will certainly be tedious; and four hundred miles land march is to be executed from thence. I communicated these objections to Mr. Matthews, and proposed the route which the General pointed out; but the poverty of the country in provision, and the means of transporting the baggage of the troops, he said, would outweigh the advantages of the water carriage and direct road. I am by no means satisfied with the present arrangement, when I reflect how much more rapidly the British may convey their reinforcements: but all the inquiries I have made hitherto, have produced nothing favorable to our plan. Indeed, in the present unguarded state of the Chesapeake, the British might render the passage even of that ineligible.
Mr. Serle, a member of Congress, who arrived in town last night from the neighborhood of Major Leigh’s post, asserts, that no transports were at the Hook on Wednesday. Whether the British operations are delayed by false rumors of Count De Grasse’s division; or whether they have heard, as we have here, that Count D’Estaing was still on the coast the twentieth of November, I cannot decide: but one would be inclined to think, that they are disconcerted, either by false intelligence, or a total defect of it. I entreat you, my dear friend, to transmit me the earliest and most accurate relation that can be obtained, of the British movements; and enlighten me with your observations upon them. Present my respects and love to our excellent General and the family. May you enjoy all the pleasure, moral and physical, which you promise yourself in winter quarters, and be as happy as you deserve. Tell the Doctor I shall commit his darling to the press this morning.
Yours, ever, John Laurens.
Colonel Hamilton.
LAURENS TO HAMILTON.
Philadelphia, December 18, 1779.
My Dear Hamilton:
On my arrival in town, I was informed by the President, that Congress had suspended the business of appointing a secretary to their minister plenipotentiary at Versailles, until my return, in hopes that I might still be prevailed upon to accept the office. I replied, that I thought my letter upon the subject sufficiently explicit; and assured him of my sincere desire to be excused from serving in that capacity at the present juncture of our affairs.
He urged the unanimity of the choice with respect to me; the difficulty of uniting the suffrages of all parties, in case of a new nomination; and the advantages of this union. Several delegates of Congress declared to me the embarrassment of Congress since I had declined. One, in particular, suggested to me his apprehension of interest being made for a late delegate of New-York, who is candidate for the office, and to whom the world, in general, allows greater credit for his abilities than his integrity; and said, “he was determined to oppose him with all his influence.” When I quitted town the sixteenth, these matters crowded into my mind. I fell into a train of serious reflections and self-examination; endeavored to investigate whether I had acted consonantly to the καλον και αγαθον, and fulfilled the duties of a good citizen in this transaction. In fine, I agitated the grand question, Whether a citizen has a right to decline any office to which his countrymen appoint him; upon what that right is founded; and whether it existed in my case.
After undergoing the severest conflict that ever I experienced; sometimes reproaching, sometimes justifying myself; pursuing my journey, or turning retrograde; as the arguments on the one side or the other appeared to prevail; I determined that I had been deficient in the duties of a good citizen. I returned to Philadelphia; communicated my sentiments to the President and two other members; and declared to them, that I thought it incumbent on me, in the first place, to recommend a person equally qualified in point of integrity, and much better in point of ability. That if, unhappily, they could not agree upon Colonel Hamilton, and that I was absolutely necessary to exclude a dangerous person, or to prevent pernicious delays, I should think it my duty to obey the orders of Congress. The persons now in nomination, are, Colonel Hamilton, Mr. Lovell, Mr. G. Morris, Major Stewart. I am sorry that you are not better known to Congress. Great stress is laid upon the probity and patriotism of the person to be employed in this commission. I have given my testimony of you in this, and the other equally essential points.
I am sorry to inform you, that the North Carolina brigade had not quitted Elk the sixteenth; having been detained by the ice.
I am sorry to write you, just as I am on the wing. Be so good as to thank Tilghman for his letter. Inform him, from Mr. Mitchell, that his habiliments are making.
My love as usual. Adieu. John Laurens.
Colonel Hamilton.
LAURENS TO HAMILTON.
Charleston, 1779.
Ternant will relate to you how many violent struggles I have had between duty and inclination--how much my heart was with you, while I appeared to be most actively employed here. But it appears to me that I should be inexcusable in the light of a citizen, if I did not continue my utmost efforts for carrying the plan of the black levies into execution, while there remains the smallest hopes of success.
Our army is reduced to nothing almost, by the departure of the Virginians. Scott’s arrival will scarcely restore us to our ancient number. If the enemy destine the reinforcements from Great Britain to this quarter, as in policy they ought to do, that number will be insufficient for the security of our country. The Governor, among other matters to be laid before the House of Assembly, intends to propose the completing our continental battalions by drafts from the militia. This measure, I am told, is so unpopular that there is no hope of succeeding in it. Either this must be adopted, or the black levies, or the State will fall a victim to the improvidence of its inhabitants.
The House of Representatives have had a longer recess than usual, occasioned by the number of members in the field. It will be convened, however, in a few days. I intend to qualify, and make a final effort. Oh that I were a Demosthenes! The Athenians never deserved a more bitter exprobation than our countrymen.
General Clinton’s movements, and your march in consequence, made me wish to be with you. If any thing important should be done in your quarter, while I am doing daily penance here, and making useless harangues, I shall execrate my stars, and be out of humor with the world. I entreat you, my dear friend, write me as freely as circumstances will permit, and enlighten me upon what is going forward.
Adieu. My love to our colleagues. I am afraid I was so thoughtless as to omit my remembrances to Gibbs. Tell him that I am always his sincere well-wisher, and hope to laugh with him again ere long.
Adieu again. Yours ever, John Laurens.
HAMILTON TO ROBERT MORRIS.
Sir:
The present conjuncture is by all allowed to be peculiarly critical. Every man of reflection employs his thoughts about the remedies proper to be applied to the national disorders; and every one, from a partiality to his own ideas, wishes to convey them to those who are charged with the management of affairs. The channel of the public papers, commonly made use of for the purpose, appears to me exceptionable on several accounts. It not only restrains a freedom of discussion, from the extreme delicacy of the subject; but the discussion itself increases the evil, by exposing our weak sides to the popular eye, and adding false terrors to those well-founded apprehensions which our situation authorizes.
Instead of pursuing this method, I prefer addressing myself to a member of that body, in whose power alone it is, by well-digested system, to extricate us from our embarrassments. I have pitched upon you, from a personal knowledge of your abilities and zeal. If I offer any thing new and useful, I am persuaded you will endeavor to turn it to advantage. If the contrary is the case, I am, at least, doing no harm. I shall only have had the trouble of writing, and you of reading, a few useless pages.
The object of principal concern is the state of our currency. In my opinion, all our speculations on this head have been founded in error. Most people think, that the depreciation might have been avoided, by provident arrangements in the beginning, without any aid from abroad: and a great many of our sanguine politicians, till very lately, imagined the money might still be restored by expedients within ourselves. Hence the delay in attempting to procure a foreign loan.
This idea proceeded from an ignorance of the real extent of our resources. The war, particularly in the first periods, required exertions beyond our strength, to which neither our population nor riches were equal. We have the fullest proof of this, in the constant thinness of our armies; the impossibility, at this time, of recruiting them otherwise than by compulsion; the scarcity of hands in husbandry, and other occupations; the decrease of our staple commodities; and the difficulty of every species of supply. I am aware that the badness of the money has its influence; but it was originally an effect, not a cause, though it now partakes of the nature of both. A part of those evils would appear, were our finances in a more flourishing condition. We experienced them before the money was materially depreciated; and they contributed to its depreciation. The want of men soon obliged the public to pay extravagant wages for them in every department. Agriculture languished from a defect of hands. The mechanic arts did the same. The price of every kind of labor increased: and the articles of foreign commerce, from the interruption it received, more than kept pace with other things.
The relative value of money being determined by the greater or less portion of labor and commodities which it will purchase; whatever these gained in price, that of course lost in value.
The public expenditures, from the dearness of every thing, necessarily became immense; greater in proportion than in other countries; and much beyond any revenues which the best concerted scheme of finance could have extracted from the natural funds of the State. No taxes, which the people were capable of bearing, on that quantity of money which is deemed a proper medium for this country (had it been gold instead of paper), would have been sufficient for the current exigencies of Government.
The most opulent States of Europe, in a war of any duration, are commonly obliged to have recourse to foreign loans or subsidies.[3] How, then, could we expect to do without them, and not augment the quantity of our artificial wealth beyond those bounds which were proper to preserve its credit? The idea was chimerical.
The quantity of money formerly in circulation among us, is estimated at about thirty millions of dollars. This was barely sufficient for our interior commerce. Our exterior commerce was chiefly carried on by barter. We sent our commodities abroad, and brought back others in return. The balance of the principal branch was against us; and the little _specie_ derived from others, was transferred directly to the payment of that balance, without passing into home circulation. It would have been impracticable, by loans and taxes, to bring such a portion of the forementioned sum into the public coffers as would have answered the purposes of the war: nor could it have spared so considerable a part, without obstructing the operations of domestic commerce. Taxes are limited, not only by the quantity of wealth in a State, but by the temper, habits, and genius of the people; all which, in this country, conspired to render them moderate: and as to loans, men will not be prevailed upon to lend money to the public when there is a scarcity, and they can find a more profitable way of employing it otherwise, as was our case.
The ordinary revenues of the United Provinces amount to about twenty-five millions of guilders; or two millions two hundred and fifty thousand pounds sterling per annum. This is, in proportion to its territory and numbers, the richest country in the world; and the country where the people sustain the heaviest load of taxes. Its population is about equal to ours, two millions of souls. The burthens on the subject are so great, that it is by some held almost impracticable, even on extraordinary emergencies, to enlarge the revenues by new impositions. It is maintained, their dependence, in these cases, must be on the extraordinary contributions of wealthy individuals; with the aid of which, in some of their wars, they have raised four millions sterling a year. In a country possessed of so vast a stock of wealth, where taxes are carried to such a height; and where the means of paying them so infinitely exceed those in our power; if the national revenues only amount to the sum I have stated, how inadequate must have been the product of any taxes we could have levied, to the demands of the service! Loans, for the reason before hinted, would have been out of the question; at least, they would have been so trifling as to be an object of little importance. Suppose we should have been able to raise a million sterling, annually; a sum that probably would have exceeded our ability; how unequal would this have been to our wants![4] No economy could have made it bear any proportion, especially if we recur to the causes already enumerated, by which the currency depreciated in its first stages.
From these reasonings it results, that it was not in the power of Congress, when their emissions had arrived at the thirty millions of dollars, to put a stop to them.[5] They were obliged, in order to keep up the supplies, to go on creating artificial revenues by new emissions; and as these multiplied, their value declined. The progress of the depreciation might have been retarded, but it could not have been prevented. It was, in a great degree, necessary.
There was but one remedy; a foreign loan. All other expedients should rather have been considered as auxiliary. Could a loan have been obtained, and judiciously applied, assisted by a vigorous system of taxation, we might have avoided that excess of emissions which has ruined the paper. The credit of such a fund would have procured loans from the moneyed and trading men within ourselves; because it might have been so directed, as to have been beneficial to them in their commercial transactions abroad.[6]
The necessity for a foreign loan is now greater than ever. Nothing else will retrieve our affairs.
The wheels of Government, without it, cannot much longer be kept in motion. Including Loan-office certificates, and State emissions, we have about four hundred millions of dollars in circulation. The real value of these, is less than seven millions, which is the true circulating medium of these States: for though the price of specie is and the rate of exchange for sterling bills the nominal value of every commodity is at least sixty to one, on an average. All the reasonings against the possibility of raising the current expenses on the foundation of thirty millions, apply to our present situation in the ratio of thirty to seven; that is, it is as thirty to seven less practicable now than when our emissions amounted to only thirty millions. Could every dollar in circulation be brought annually into the treasury, which never was effected in any country, and is politically impossible, the revenue would not be equal to the yearly expense.
The hope of appreciating the money, by taxes and domestic loans, is at an end. As fast as it could be received, it must be issued in the daily expenditures. The momentary interval between its being drawn out of circulation and returning into it, would prevent its receiving the least advantage.
These reasonings may appear useless, as the necessity of a foreign loan is now acknowledged, and measures are taking to procure it. But they are intended to establish good principles; the want of which has brought us to the desperate crisis we are arrived at, and may still betray us into fatal mistakes.
How this loan is to be employed, is now the question; and its difficulty equal to its importance! Two plans have been proposed: one, to purchase up at once, in specie, or sterling bills, all superfluous paper; and to endeavor, by taxes, loans, and economy, to hinder its returning into circulation. The remainder, it is supposed, would then recover its value. This, it is said, will reduce our public debt to the sterling cost of the paper.
Suppose two hundred millions were to be purchased, and the rest called in by taxes. At this would require bills to the amount of of dollars. But I doubt whether four times this sum would be sufficient. The moment it was known such purchases were to be made, the avarice of the speculators would begin to operate: the demand would immediately occasion an artificial appreciation; each successive million would cost more than the preceding. But this appreciation would be more relative to the purchasing medium than to the prices of commodities. The raising the value of the paper relative to the former, would depend on the combination of a few artful individuals, and would be easily accomplished. The diminution of prices must be slow, as it implies a change in the sentiments of the body of the people with respect to the money. A sudden revolution in the general rates of all the necessaries of life is not to be expected. The prices of these, as they have reached their present summit by degrees, must, by degrees, revert to their former station. The minds of the people will not readily admit impressions in favor of the currency. All their past experience has given a habit of diffidence; and the epidemical spirit of extortion will maintain a violent struggle with whatever has a tendency to produce a fall of prices. A permanent reduction of the quantity of circulating cash, will alone gradually effect it. But this will not happen on the present plan.
The necessity of continuing the supplies at nearly the same rates now given (which would be the case if my reasonings are true), would have nearly the same effect mentioned with respect to taxes and domestic loans. The money would return into circulation almost as fast as it was drawn out: and at the end of the year we should find our treasury empty; our foreign loan dissipated; and the state of our finances as deplorable as ever. At a moderate calculation, we should have spent ten or twelve millions of real dollars, for the sole purpose of carrying on the war another year. It would be much better, instead of purchasing up the paper currency, to purchase the supplies out of our specie or bills. In the first instance, the public would suffer a direct loss of the artificial appreciation, relative to the purchasing medium: in the last, it would buy at the value of the commodities in specie or bills.
A great source of error in disquisitions of this nature, is the judging of events by abstract calculations; which, though geometrically true, are false as they relate to the concerns of beings governed more by passion and prejudice, than by an enlightened sense of their interests. A degree of illusion mixes itself in all the affairs of society. The opinion of objects has more influence than their real nature. The quantity of money in circulation is certainly a chief cause of its decline: but we find it is depreciated more than five times as much as it ought to be by this rule. The excess is derived from opinion; a want of confidence. In like manner we deceive ourselves, when we suppose the value will increase in proportion as the quantity is lessened. Opinion will operate here also; and a thousand circumstances may promote or counteract the principle.
The other plan proposed, is to convert the loan into merchandise, and import it on public account. This plan is incomparably better than the former. Instead of losing on the sale of its specie or bills, the public would gain a considerable profit on the commodities imported. The loan would go much further this way, in supplying the expenses of the war; and a large stock of valuable commodities, useful to the army and to the country, would be introduced. This would affect the prices of things in general, and assist the currency. But the arts of monopolizers would prevent its having so extensive and durable an influence as it ought to have.
A great impediment to the success of this, as well as the former scheme, will be the vast sums requisite for the current expenses. The arguments adduced in the former case are applicable here also, though not with equal force. The necessity the public will be under of
## parting with its stock to defray the daily demands, will give designing
men an opportunity, by combinations not to purchase, to oblige it to sell at a rate below the real value of money. This they may the more easily effect, as the demand for foreign commodities is much less than formerly, on account of the general spirit of parsimony which has obtained from necessity, and the manufactures carried on in private families for their own use. The greatest part of the country people now almost entirely clothe themselves.