Part 14

A third defect is, the fluctuating constitution of our army. This has been a pregnant source of evil: all our military misfortunes, three-fourths of our civil embarrassments, are to be ascribed to it. The General has so fully enumerated the mischiefs of it, in a letter of the      , to Congress, that I could only repeat what he has said, and will therefore refer you to that letter.

The imperfect and unequal provision made for the army, is a fourth defect, which you will find delineated in the same letter. Without a speedy change, the army must dissolve. It is now a mob, rather than an army; without clothing, without pay, without provision, without morals, without discipline. We begin to hate the country for its neglect of us. The country begin to hate us for our oppressions of them. Congress have long been jealous of us. We have now lost all confidence in them, and give the worst construction to all they do. Held together by the slenderest ties, we are ripening for a dissolution.

The present mode of supplying the army, by State purchases, is not one of the least considerable defects of our system. It is too precarious a dependence; because the States will never be sufficiently impressed with our necessities. Each will make its own ease a primary object; the supply of the army a secondary one. The variety of channels through which the business is transacted, will multiply the number of persons employed, and the opportunities of embezzling public money. From the popular spirit on which most of the Governments turn, the State agents will be men of less character and ability: nor will there be so rigid a responsibility among them, as there might easily be among those in the employ of the Continent; of course, not so much diligence, care, or economy. Very little of the money raised in the several States, will go into the Continental treasury, on pretence, that it is all exhausted in providing the quotas of supplies; and the public will be without funds for the other demands of Government. The expense will be ultimately much greater, and the advantages much smaller. We actually feel the insufficiency of this plan; and have reason to dread, under it, a ruinous extremity of want.

These are the principal defects, in the present system, that now occur to me. There are many inferior ones, in the organization of particular departments, and many errors of administration, which might be pointed out; but the task would be troublesome and tedious: and if we had once remedied those I have mentioned, the others would not be attended with much difficulty.

I shall now propose the remedies, which appear to me applicable to our circumstances, and necessary to extricate our affairs from their present deplorable situation. The first step must be, to give Congress powers competent to the public exigencies. This may happen in two ways: one, by resuming and exercising the discretionary powers I suppose to have been originally vested in them, for the safety of the States; and resting their conduct on the candor of their countrymen, and the necessity of the conjuncture: the other, by calling immediately a Convention of all the States, with full authority to conclude finally upon a General Confederation; stating to them, beforehand, explicitly, the evils arising from a want of power in Congress, and the impossibility of supporting the contest on its present footing; that the delegates may come, possessed of proper sentiments, as well as proper authority, to give efficacy to the meeting. Their commission should include a right of vesting Congress with the whole, or a proportion, of the unoccupied lands, to be employed for the purpose of raising a revenue: reserving the jurisdiction to the States by whom they are granted.

The first plan, I expect, will be thought too bold an expedient, by the generality of Congress; and, indeed, their practice hitherto, has so riveted the opinion of their want of power, that the success of this experiment may very well be doubted.

I see no objection to the other mode, that has any weight, in competition with the reasons for it. The Convention should assemble the first of November next. The sooner the better. Our disorders are too violent to admit of a common or lingering remedy. The reasons for which I require them to be vested with plenipotentiary authority, are, that the business may suffer no delay in the execution; and may, in reality, come to effect. A Convention may agree upon a Confederation: the States, individually, hardly ever will. We must have one at all events, and a vigorous one, if we mean to succeed in the contest, and be happy hereafter. As I said before, to engage the States to comply with this mode, Congress ought to confess to them, plainly and unanimously, the impracticability of supporting our affairs on the present footing, and without a solid coercive union. I ask, that the Convention should have a power of vesting the whole, or a part, of the unoccupied lands in Congress; because it is necessary that body should have some property, as a fund for the arrangements of finance; and I know of no other kind that can be given them.

The Confederation, in my opinion, should give Congress complete sovereignty; except as to that part of internal police, which relates to the rights of property and life among individuals, and to raising money by internal taxes. It is necessary that every thing belonging to this, should be regulated by the State legislatures. Congress should have complete sovereignty in all that relates to war, peace, trade, finance; and to the management of foreign affairs; the right of declaring war; of raising armies, officering, paying them, directing their motions in every respect; of equipping fleets, and doing the same with them; of building fortifications, arsenals, magazines, etc., etc.; of making peace on such conditions as they think proper; of regulating trade, determining with what countries it shall be carried on; granting indulgencies; laying prohibitions on all the articles of export, or import; imposing duties; granting bounties and premiums for raising, exporting, or importing, and applying to their own use, the product of these duties; only giving credit to the States on whom they are raised, in the general account of revenues and expenses; instituting Admiralty Courts, etc.; of coining money; establishing Banks on such terms, and with such privileges, as they think proper; appropriating funds, and doing whatever else relates to the operations of finance; transacting every thing with foreign nations; making alliances, offensive and defensive; treaties of commerce, etc., etc.

The Confederation should provide certain perpetual revenues, productive, and easy of collection; a land tax, poll tax, or the like; which, together with the duties on trade, and the unlocated lands, would give Congress a substantial existence, and a stable foundation for their schemes of finance. What more supplies were necessary, should be occasionally demanded of the States, in the present mode of quotas.

The second step I would recommend, is, that Congress should instantly appoint the following great officers of State. A Secretary for Foreign Affairs, a President of War, a President of Marine, a Financier, a President of Trade. Instead of this last, a Board of Trade may be preferable, as the regulations of trade are slow and gradual; and require prudence and experience more than other qualities; for which Boards are very well adapted.

Congress should choose for these offices, men of the first abilities, property, and character, in the Continent; and such as have had the best opportunities of being acquainted with the several branches. General Schuyler, whom you mentioned, would make an excellent President of War; General M’Dougall a very good President of Marine. Mr. Robert Morris would have many things in his favor for the department of finance. He could, by his own personal influence, give great weight to the measures he should adopt. I dare say men, equally capable, may be found for the other departments.

I know not if it would not be a good plan to let the Financier be President of the Board of Trade; but he should only have a casting voice in determining questions there. There is a connection between trade and finance, which ought to make the director of one acquainted with the other; but the Financier should not direct the affairs of trade, because, for the sake of acquiring reputation by increasing the revenues, he might adopt measures that would depress trade. In what relates to finance, he should be alone.

These officers should have nearly the same powers and functions as those in France analogous to them: and each should be Chief in his department; with subordinate Boards, composed of assistants, clerks, etc., to execute his orders.

In my opinion, a plan of this kind would be of inconceivable utility to our affairs: its benefits would be very speedily felt. It would give new life and energy to the operations of Government. Business would be conducted with dispatch, method, and system. A million of abuses, now existing, would be corrected; and judicious plans would be formed and executed for the public good.

Another step of immediate necessity, is, to recruit the army for the war, or at least for three years. This must be done by a mode similar to that which is practised in Sweden. There the inhabitants are thrown into classes of sixteen; and when the sovereign wants men, each of these classes must furnish one. They raise a fixed sum of money; and if one of the class is willing to become a soldier, he receives the money and offers himself a volunteer. If none is found to do this, a draught is made; and he on whom the lot falls, receives the money, and is obliged to serve.

The minds of the people are prepared for a thing of this kind. The heavy bounties they have been obliged to pay for men to serve a few months, must have disgusted them with this mode, and made them desirous of another, that will, once for all, answer the public purposes, and obviate a repetition of the demand. It ought, by all means, to be attempted; and Congress should frame a general plan, and press the execution upon the States.

When the Confederation comes to be framed, it ought to provide for this by a fundamental law; and hereafter there would be no doubt of the success.

But we cannot now wait for this. We want to replace the men whose times of service will expire the first of January: for then, without this, we shall have no army remaining; and the enemy may do what they please. The General, in his letter already quoted, has assigned the most substantial reasons for paying immediate attention to this point.

Congress should endeavor, both upon their credit in Europe, and by every possible exertion in this country, to provide clothing for their officers; and should abolish the whole system of State supplies. The making good the depreciation of the currency, and all other compensations to the army, should be immediately taken up by Congress, and not left to the States. If they would have the accounts of depreciation liquidated, and governmental certificates given for what is due, in specie, or an equivalent to specie, it would give satisfaction; appointing periodical settlements for future depreciation.

The placing the officers upon half-pay during life, would be a great stroke of policy; and would give Congress a stronger tie upon them than any thing else they can do. No man, that reflects a moment, but will prefer a permanent provision of this kind to any temporary compensation. Nor is it opposed to economy: the difference between this, and between what has already been done, will be insignificant. The benefit of it to the widows should be confined to those whose husbands die during the war. As to the survivors, not more than one half, on the usual calculation of men’s lives, will exceed the seven years for which the half-pay is already established. Beside this, whatever may be the visionary speculations of some men at this time, we shall find it indispensable, after the war, to keep on foot a considerable body of troops: and all the officers, retained for this purpose, must be deducted out of the half-pay list. If any one will take the pains to calculate the expense of these principles, I am persuaded he will find the addition of expense, from the establishment proposed, by no means a national object.

The advantages of securing the attachment of the army to Congress, and binding them to the service by substantial ties, are immense. We should then have discipline; an army in reality, as well as in name. Congress would then have a solid basis of authority and consequence: for, to me, it is an axiom, that in our constitution, an army is essential to the American Union.

The providing of supplies, is the pivot of every thing else (though a well-constituted army would, not in a small degree, conduce to this, by giving consistency and weight to Government). There are four ways, all of which must be united: A foreign loan; heavy pecuniary taxes; a tax in kind; a Bank founded on public and private credit.

As to a foreign loan, I dare say Congress are doing every thing in their power to obtain it. The most effectual way will be to tell France, that, without it, we must make terms with Great Britain. This must be done with plainness and firmness; but with respect, and without petulance; not as a menace, but as a candid declaration of our circumstances.

We need not fear to be deserted by France. Her interest and honor are too deeply involved in our fate; and she can make no possible compromise. She can assist us, if she is convinced it is absolutely necessary; either by lending us, herself, or by becoming our surety, or by influencing Spain. It has been to me astonishing, how any man could have doubted, at any period of our affairs, of the necessity of a foreign loan. It was self-evident, that we had not a fund of wealth in this country capable of affording revenues equal to the expenses. We must then create artificial revenues, or borrow. The first was done; but it ought to have been foreseen that the expedient could not last, and we should have provided in time for its failure.

Here was an error of Congress. I have good reason to believe, that measures were not taken, in earnest, early enough to procure a loan abroad. I give you my honor, that from our first outset, I thought as I do now, and wished for a foreign loan; not only because I foresaw it would be essential, but because I considered it as a tie upon the nation from which it was derived, and as a mean to prop our cause in Europe.

Concerning the necessity of heavy pecuniary taxes, I need say nothing; as it is a point in which every body is agreed. Nor is there any danger, that the product of any taxes, raised in this way, will overburthen the people, or exceed the wants of the public. Indeed, if all the paper in circulation were drawn annually into the treasury, it would neither do one nor the other.

As to a tax in kind, the necessity of it results from this principle: that the money in circulation is not a sufficient representative of the productions of the country; and, consequently, no revenues, raised from it as a medium, can be a competent representative of that part of the products of the country which it is bound to contribute to the support of the public. The public, therefore, to obtain its due, or satisfy its just demands, and its wants, must call for a part of those products themselves. This is done in all those countries which are not commercial: in Russia, Prussia, Denmark, Sweden, etc., and is peculiarly necessary in our case.

Congress, in calling for specific supplies, seem to have had this in view; but their intention has not been answered. The States, in general, have undertaken to furnish supplies by purchase; a mode, as I have observed, attended with every inconvenience, and subverting the principle on which the supplies were demanded; the insufficiency of our circulating medium as a representative for the labor and commodities of the country. It is therefore necessary that Congress should be more explicit; should form the outlines of a plan for a tax in kind, and recommend it to the States as a measure of absolute necessity.

The general idea I have of a plan, is, that a respectable man should be appointed by the State, in each county, to collect the taxes and form magazines; that Congress should have, in each State, an officer to superintend the whole; and that the State collectors should be subordinate and responsible to them. This Continental Superintendent might be subject to the general direction of the Quarter-Master-General, or not, as might be deemed best; but if not subject to him, he should be obliged to make monthly returns to the President at War, who should instruct him what proportion to deliver to the Quarter-Master-General. It may be necessary, that the Superintendents should sometimes have power to dispose of the articles in their possession, on public account; for it would happen, that the contributions, in places remote from the army, could not be transported to the theatre of operations without too great expense; in which case it would be eligible to dispose of them, and purchase, with the money so raised, in the countries near the immediate scene of war.

I know the objections which may be raised to this plan; its tendency to discourage industry, and the like. But necessity calls for it. We cannot proceed without it: and less evils must give place to greater. It is, besides, practised with success in other countries, and why not in this? It may be said, the examples cited are from nations under despotic governments; and that the same would not be practicable with us. But I contend, where the public good is evidently the object, more may be effected in governments like ours, than in any other. It has been a constant remark, that free countries have ever paid the heaviest taxes. The obedience of a free people to general laws, however hard they bear, is ever more perfect than that of slaves to the arbitrary will of a prince. To this may be added, that Sweden was always a free government; and is so now, in a great degree, notwithstanding the late revolution. How far it may be practicable to erect a Bank on the joint credit of the public and of individuals, can only be certainly determined by the experiment. But it is of so much importance, that the experiment ought to be fully tried. When I saw the subscriptions going on to the Bank established for supplying the army, I was in hopes it was only the embryo of a more permanent and extensive establishment. But I have reason to believe I shall be disappointed. It does not seem to be at all conducted on the true principles of a Bank.

The Directors of it are purchasing with their Stock, instead of Bank notes, as I expected: in consequence of which, it must turn out to be a mere subscription of a particular sum of money for a particular purpose.

Paper credit never was long supported in any country, on a national scale, where it was not founded on a joint basis of public and private credit. An attempt to establish it on public credit alone, in France, under the auspices of Mr. Law, had nearly ruined the kingdom. We have seen the effects of it in America; and every successive experiment, proves the futility of the attempt. Our new money is depreciating almost as fast as the old; though it has, in some States, as real funds as paper money ever had. The reason is, that the moneyed men have not an immediate interest to uphold its credit. They may even, in many ways, find it their interest to undermine it. The only certain manner to obtain a permanent paper credit, is to engage the moneyed interest immediately in it, by making them contribute the whole, or part of the Stock, and giving them the whole, or part of the profits.

The invention of Banks, on the modern principle, originated in Venice. There the public, and a Company of moneyed men, are mutually concerned. The Bank of England unites public authority and faith with private credit: and hence we see, what a vast fabric of paper credit is raised on a visionary basis. Had it not been for this, England would never have found sufficient funds to carry on her wars: but, with the help of this, she has done, and is doing, wonders. The Bank of Amsterdam is on a similar foundation. And why can we not have an American Bank? Are our moneyed men less enlightened to their own interest, or less enterprising in the pursuit? I believe the fault is in Government, which does not exert itself to engage them in such a scheme. It is true, the individuals in America are not very rich; but this would not prevent their instituting a Bank; it would only prevent its being done with such ample funds as in other countries. Have they not sufficient confidence in the Government, and in the issue of the cause? Let the Government endeavor to inspire that confidence, by adopting the measures I have recommended, or others equivalent to them. Let it exert itself to procure a solid Confederation; to establish a good plan of executive administration; to form a permanent military force; to obtain, at all events, a foreign loan. If these things were in a train of vigorous execution, it would give a new spring to our affairs; Government would recover its respectability, and individuals would renounce their diffidence.

The object I should propose to myself, in the first instance, from a Bank, would be an auxiliary mode of supplies; for which purpose, contracts should be made, between Government and the Bank, on terms liberal and advantageous to the latter. Every thing should be done, in the first instance, to encourage the Bank. After it gets well established, it will take care of itself; and Government may make the best terms it can, for itself.

The first step to establishing the Bank, will be to engage a number of moneyed men of influence to relish the project, and make it a business. The subscribers to that lately established, are the fittest persons that can be found; and their plan may be interwoven.

The outlines of my plan would be, to open subscriptions in all the States; for the Stock, which we will suppose to be one million of pounds. Real property of every kind, as well as specie, should be deemed good Stock; but at least a fourth part of the subscription should be in specie, or plate. There should be one great Company, in three divisions: in Virginia, Philadelphia, and at Boston; or two at Philadelphia and Boston. The Bank should have a right to issue Bank notes, bearing two per cent. interest, for the whole of their stock; but not to exceed it. These notes may be payable every three months, or oftener: and the faith of government must be pledged for the support of the Bank. It must therefore have a right, from time to time, to inspect its operations, and must appoint inspectors for the purpose.