With these views, I have directed Mr Jay to ask a considerable sum from the Court of Madrid, to be advanced us at the Havana, and brought thence by us, if it cannot conveniently be landed here from Spanish men-of-war.[34] I say _a considerable sum_, because, as I have declared to him, I do not wish to labor under the weight of obligation without deriving from it any real benefit; and because I consider the advance of small sums rather as a temporary palliation than a radical remedy. Our disorders are such, that the former can be of no use, and it would be better to desist in a desultory defence, than to put on the delusive appearances of a vigor we do not feel; for this lulls the people into a dangerous security, and softens those hopes of the enemy, which give duration and extent to the war. It is the disorder of our finances, which have prevented us from a powerful co-operation with our allies, and which have enabled the enemy to linger on our coasts with the dregs of a force once formidable; and it is from this cause that they have been permitted to extend the theatre, and multiply the victims of their ambition.
America alone will not derive benefit from the advances which Spain may make to her. All the a.s.sociates in the war will feel the _consequential_ advantages. The expense of the American war now hangs a heavy weight about the neck of Britain, and enfeebles her on that element, which she called her own. An increase of that expense, or the loss of her posts here, must necessarily follow from additional efforts on our part, and either of these must be a consequential benefit to those who are opposed to her. France will derive a small _immediate_ benefit from it, as she will thereby get more money here for her bills of exchange, than she can at present procure. But it is not so much from any advantage, which may be expected to that kingdom, or from any motives of _interest_, as from the generosity and magnanimity of the Prince, that we hope for support. I will not doubt a moment, that at your instance, his Majesty will make pressing representations in support of Mr Jay"s application, and I hope that the authority of so great a Sovereign, and the arguments of his able Ministry, will shed auspicious influence on our negotiations at Madrid.
From the best returns I have been able to collect, and which are in some measure imperfect, from the confusions and disasters of the Southern States, I find that there are about seven millions two hundred thousand dollars due on certificates, which bear an interest of six per cent, payable in France, at the rate of five livres for every dollar. Many causes have conspired to depreciate the certificates, notwithstanding the interest is so well secured, and has been punctually paid. This depreciation is so great, that they are daily offered for sale at a very considerable discount, which is attended with two pernicious consequences; one, that a considerable expense is unnecessarily incurred, and the other, that the public credit is unnecessarily impaired. If I had the means, therefore, I would remove this evil by purchasing in the certificates; and to procure the means, I am to pray that you would state this matter fully to the Ministers of his Most Christian Majesty. The interest being guarantied by the Court of France, they now pay for this purpose, two millions one hundred and sixty thousand livres annually; a sum, which in less than ten years, would pay a debt of fifteen millions of livres at five per cent interest. With fifteen millions of livres, however, prudently managed, the whole of these certificates might be paid. I am sure it is unnecessary to dwell on the advantages, which would result from making such a loan for this purpose, and, I trust, that if this matter is stated to M. Necker, that enlightened Minister will co-operate in the plan, to the utmost of his ability. I again repeat, that I do not wish to lay any burdens on France; but this proposal is calculated to relieve us both; and, in any case, the expense to France will be the same. Should it be adopted, I must request the earliest notice, that my operations may commence; and, in any case, I hope that secrecy will be observed, for the most evident reasons.
I am sorry to inform you, that we have as yet no satisfactory news of the ship Lafayette; but, on the contrary, her long delay occasions the most alarming apprehensions. If, as but too probable, that ship is lost, you will more easily conceive than I can describe what will be the situation of our troops next winter.
I could wish, as soon as possible, to have a state of all the public accounts transmitted, to the end that moneys due to the United States may be paid, and measures taken to provide for such sums as they stand indebted in to others. Your Excellency will, I dare say, send them as soon as may be convenient; and I hope the public affairs will hereafter be conducted in such a manner as to give you much less of that unnecessary trouble, which you have hitherto experienced, and which could not but have hara.s.sed you exceedingly, and, perhaps, taken up time, which would otherwise have been devoted to more important objects.
I shall, probably, have frequent occasion to address you, and shall always be happy to hear from you; but the mischiefs, which arise from having letters intercepted, are great and alarming. I have, therefore, enclosed you a cypher, and in the duplicate of my letters, I shall enclose another. If both arrive, you will use one, and, in case of your absence, leave the other with such person as may supply your place. Let me know, however, which cypher you use.
The bearer of this letter, Major Franks, formerly an Aid-de-camp to General Arnold, and honorably acquitted of all connexion with him, after a full and impartial inquiry, will be able to give you our public news more particularly than I could relate them. He sails hence for Cadiz, and on his arrival will proceed to Madrid, where having delivered my letters to Mr Jay, he will take his orders for you. He will then wait your orders, and I hope, will soon after meet a safe opportunity of coming to America.
With the most perfect esteem and regard, I have the honor to be, &c.
ROBERT MORRIS.
FOOTNOTES:
[34] See a letter from Mr Morris, in _John Jay"s Correspondence_, Vol.
VII. p. 421.
TO B. FRANKLIN.
Philadelphia, July 14th, 1781.
Dear Sir,
If Major Franks had departed yesterday, as was expected, he would have left the enclosed cypher behind. It was supposed to have been with the plans of the intended bank, but was left out by accident. I wish you would, when leisure and opportunity will permit, converse with some of the eminent bankers in Paris on this plan, and ask whether a correspondence and connexion with the directors will be agreeable, and whether they would establish a credit for this bank, and to what amount, to be replaced again by remittances in other bills within such time as they may limit. Or, if they decline giving such credit, then the terms on which they will receive remittances and pay drafts of the bank.
An American bank must deal largely in bills of exchange. It will thereby rule the price of bills so as to keep it pretty steady, by pa.s.sing most of the bills drawn on the continent through their channel, so as to leave a certain moderate profit. And the use of a credit in Europe will be, to have paid for their honor such bills as may be protested on account of the drawers; by which means the bank will secure the damages of twenty per cent, and pay only interest for advance and commission for negotiating. Occasion may also offer, when the bank, by drawing on Europe, shall get a high price for bills, and in a few months replace them much cheaper.
I do not wish to give you trouble on this occasion; but, if opportunities offer, you can mention the subject, and if any of the bankers will write me proposals, I will lay them before the directors.
You will tell them, that although the very moderate sum of four hundred thousand dollars is proposed as the first capital, I intend to increase it gradually to ten times that sum. The only difficulty is to get it into action now that people have but little money and less confidence. I should be glad to see your name in the list of subscribers to an inst.i.tution, that I believe will be permanent.
I ever am, Dear Sir, yours, &c.
ROBERT MORRIS.
TO THE GOVERNOR OF HAVANA.
Philadelphia, July 17th, 1781.
Sir,
The favorable attention shown to me by your Excellency in my private character, has excited those sentiments of esteem and respect, which now impel me to ask your a.s.sistance for my country.
The United States of North America, are at the present moment, possessed of more strength in men, arms, and ammunition, than when they first ventured to wage war with Great Britain. The means of subsistence are abundantly equal to our own wants, and will essentially contribute to the relief of our friends. A variety of causes, too numerous to be detailed, in the compa.s.s of a letter, have combined to destroy the credit of that paper money, which has enabled us. .h.i.therto to support the war. It has therefore become necessary to provide the means for paying the expenses to be incurred hereafter.
Our people are not yet inured to taxation, neither has the revenue, which this country is capable of affording, been drawn fairly or fully into use. The derangement of our credit and finances, consequent upon the loss of faith in our paper, rendered it necessary for Congress to create a Superintendent of the Finances of the United States, in order, that he might regulate and settle the present debts, point out new funds, with the best means of collecting them, and superintend the public expenditures, so as to prevent as much as possible all excess or abuse. This arduous task is a.s.signed to me, by a unanimous choice of that honorable body; and nothing could have induced me to undertake it, but my perfect conviction, that it is necessary that some person should undertake the work of reformation and economy. I have engaged in this business with the sole view of saving my country, and therefore think myself ent.i.tled to seek support from all who are really friends to her independency, and particularly from those nations, which have become parties in the war.
I have commenced my administration with a proposal to establish a National Bank; the plan of which I take the liberty to enclose. The subscriptions to it are going on, and I expect the very moderate sum therein proposed will soon be completed. When that is done, the directors will be chosen, incorporated, and proceed on their business.
As the bank notes are intended to be made use of by government in antic.i.p.ation of the revenues of this country, you will easily perceive, that the sum proposed is far short of the object, which it is intended to accomplish. My present pursuit, therefore, is to obtain such additional sums as will, when deposited in the bank, not only facilitate the antic.i.p.ations above mentioned, but induce further subscriptions among our own countrymen. For when they see and feel the use of an inst.i.tution, which they are yet unacquainted with, they will cheerfully and liberally support it.
It is to your Excellency that I apply for foreign aid. The vicinity of your situation, the frequent intercourse between your port and this, and your ability to comply with what I shall request, all point out the propriety of that application. Your friendly disposition towards these United States, and above all your strong attachment to the interests of your own country, will dispose you to yield me every a.s.sistance in your power. The United States have already received very considerable aid from the Court of Madrid. Much more, however is expected,[35] and in time to come these services will be repaid with honor, as they now are acknowledged with grat.i.tude.
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 a.s.sistance 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 a.s.sistance 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 a.s.surances, 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 circ.u.mstances 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.
a.s.suring myself of a.s.sistance 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 antic.i.p.ation 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.
TO ROBERT SMITH, AGENT FOR THE UNITED STATES IN CUBA.
Philadelphia, July 17th, 1781.
Sir,