I would further propose, that on this day these balances, and those before mentioned, should be liquidated together, and the final capitals be considered as princ.i.p.al sums, bearing interest at six per cent. Thus, supposing the State A, in one account, to be credited ten thousand dollars, amounting, with interest, to eleven thousand, and debited in the other account five thousand, amounting, with interest, to six; in that case, the final balance, on the 18th of March, would be a credit of five thousand dollars.
On the 18th of March, we come to a new and more enlightened era of public accounts. The appointment formerly mentioned as preliminary to a settlement, will determine the quota due by each State for the two hundred millions of old Continental money, valued at forty for one.
These resolutions of the 18th of March, 1780, not having been fully complied with, there appears to be a propriety in the following plan.
1st. To charge the several States with their proportions of it at that rate.
2dly. To fix some future day for the full compliance with the resolution.
3dly. To receive old paper at the rate of forty for one, in discharge of those proportions, until that day; and,
4thly. To charge the balances then unpaid in specie, with a debit and credit of interest at six per cent in the manner before mentioned.
I am sensible, that many persons now condemn the resolutions of the 18th of March, and among these are found some of those who warmly advocated it previously to that period. It is not my business to enter into arguments on the subject. Be those resolutions wise or unwise, they are acts of the sovereign authority, which have been obeyed by some, if not by all, and therefore those who have obeyed ought not to suffer by their obedience. They are acts for the redemption of bills issued by that sovereign, and they have formed the standard of public opinion with respect to those bills. If, therefore, for argument"s sake, it were admitted, that the measure was impolitic and unjust, yet, now that it has taken place, there would certainly be both injustice and bad policy in altering it. The respective States have either obeyed it in the whole, or in part, or have totally neglected it. The first have a right to insist upon a compliance with it. The second must have so far accommodated themselves to it, as that interior mischiefs would arise from changing the system. And the last, whatever may be their claim to superior wisdom, will at least acknowledge, that the precedent of disobedience once established, our Union must soon be at an end, and the authority of Congress reduced to a metaphysical idea. Besides, the claim of such States must ultimately rest on the foundation of their own neglect; and as this will always be in their own power, it will be sufficient to rear any argument for any purpose.
By the resolutions of the 18th of March, 1780, ten millions of dollars of new paper were to have been issued, whereof four millions were to be at the order of Congress. By the resolutions of the 26th of August, 1780, three millions more were demanded. By the resolutions of the 4th of November, 1780, besides the specific supplies, an additional demand was made of one million, six hundred and fortytwo thousand, nine hundred and eightyseven and two thirds dollars in money; and by the resolutions of the 16th of March, 1781, six millions more are required. These sums amount in the whole to fourteen millions, six hundred and fortytwo thousand, nine hundred and eightyseven dollars and two thirds. A very small part of this sum has yet been paid; but admitting that there may have been circulated by the United States two millions, six hundred and fortytwo thousand, nine hundred and eightyseven dollars and two thirds, twelve millions would still remain due. If from this we deduct the whole of the new emissions, it would leave a balance of two millions. I propose, therefore, the following plan.
1st. That no more of these new emissions be used on any pretence.
2dly. That as fast as the old Continental money is brought in, the several States be credited for the new emissions to have been issued as specie, agreeably to the several resolutions of Congress upon that subject; and,
3dly. That on all those requisitions last mentioned, the money of the new emissions of any particular State be received as specie.
It is true that these propositions are liable to exception, but they have the great advantage of being consistent with former resolutions of Congress, which should always be attended to as much as possible.
I am sure that Congress must be convinced of this, for they are not to learn, that authority is weakened by the frequent change of measures and pursuits; that such changes injure the reputation of supreme power in public opinion, and that opinion is the source and support of the sovereign authority. It is further to be observed, that the motives for complying with the resolutions of the 18th of March, will, if the above plan is adopted, become very strong; for in that case, every forty dollars of old Continental, paid by a State, will produce to the credit side of its account three dollars in specie; because in the first place, the whole proportion of old Continental being changed at forty for one, and receivable until a certain day at the same rate, that payment will so far operate a discharge of one dollar; and in the second place, it will ent.i.tle the State to two dollars of the new emission, which not being issued, will also be carried to its credit upon its several requisitions.
It will be in the wisdom of the United States, in Congress a.s.sembled, to determine whether after the expiration of the day to be fixed for the above purpose, they will permit the possessors of the old Continental money to bring it in loan at the rate of forty for one. It is true, that this might operate against those States, who have not complied with the resolutions of the 18th of March, 1780, and who have not now the old Continental to comply with it; but it is entirely consistent with the former resolutions of Congress, and the States are themselves blamable for the neglect. Besides, those who now hold the Continental do it either from choice, because of their confidence in Congress, or from necessity, because it has been poured in upon them from those places where it was of inferior value, and this inferiority was owing to the neglect of those States in not pa.s.sing the laws which Congress recommended. There is, therefore, a degree of justice and firmness in that measure, which will create confidence in the future acts of the United States.
Whatever principles may be established for settling these accounts, and however just they may be, many doubts will arise in the application of them. It must always be remembered, that the States are independent; and that while they are pressed to a compliance with their duty, they must have full evidence, that Congress act fairly. It might therefore be proper, that for the settlement of their accounts, Commissioners should be chosen as follows; one by the State, one by the United States, one by the other two, and the decision of the majority to be final.
Hitherto I have taken no notice of the specific supplies called for from the several States. Many of these have been furnished, and many remain to be provided. I would exclude them entirely from the other public accounts; but as the apportionment so often mentioned, will give a rule to go by, I shall continue to press for the supplies; or where they are not wanted, make such composition with the States in lieu of those which remain to be furnished, as the public service shall render most eligible.
I have observed, that the public debts ought to be excepted from the apportionment of past expenses. The reason is clear. Those debts, or at least a great part of them, may subsist until the relative wealth of the States has entirely changed. Those who are now most rich, may become poor, and those who are poor, may become rich. This is not all; these debts are hitherto unfunded. The creditors have indeed the general promise of government, and some of them have certificates as evidences of that promise; but until measures are taken to provide solid funds for the final payment, the public credit must languish. To an enlightened mind, it is needless to debate on the advantages resulting from national credit. Congress will doubtless pursue the steps necessary for its perfect establishment. And this cannot be otherwise accomplished, than by raising taxes in hard money from sources which must be productive and increasing. Those taxes must be so bound to the public creditors for the debts due to them, that the produce cannot be diverted. These taxes ought to be raised from the same articles, at the same rates, and in the same manner throughout the whole confederation; and consequently, a present apportionment of the public debts will be as unnecessary as it would be unjust.
I think it my duty, while I am upon this subject, to mention my opinion, that in addition to the five per cent called for on articles imported, and on prizes and prize goods, it would be proper to appropriate to the payment of the public debts, a land tax, a poll tax, and an excise on spirituous liquors. I readily grant that neither of these taxes would be strictly equal between the States, nor indeed can any other tax be so, but I am convinced, that all of them taken together, would be as nearly equal as the fluctuating nature of human affairs will permit. I am, however, to observe in addition, that the land tax should be laid at a certain rate per acre, because the superior certainty of such a tax will give it the preference of others, although it cannot perhaps be so great as might have been expected. Whatever inequalities may remain, must be adjusted among individuals, by the several States in raising their quotas, and although those quotas will be most considerable during the war, yet it must be remembered, that after the conclusion of it, such sums will be necessary for the establishing a marine and other national purposes, as will still enable the States to continue their interior regulations for equalizing the general taxes.
Among the public debts, there are a considerable number of certificates given by public officers to the citizens of the several States for articles occasionally taken for the public use. With respect to these certificates, it is unnecessary to mention, that they have antic.i.p.ated the revenue, and brought us to the brink of destruction. But it is time to pay a particular attention to them.
Many ways may be fallen upon for their liquidation, all of which are perhaps justly exceptionable.
1st. They may be consolidated with the rest of the public debt, and be made payable at a future period; but this could only be by forcing a loan from the people, many of whom are unable to make it, and of consequence it would be a hard measure, if not an unjust one. Perhaps it could not be executed, for laws repugnant to the general feelings of mankind are only a dead letter. 2dly. Another mode is by receiving them in taxes, but this is very dangerous for several reasons, among which, the two following are cogent. The public revenue will not bear such a heavy deduction at those certificates would create, and the collectors of taxes would be liable to be defrauded themselves, or the remedy for that would give them opportunities of defrauding the public, which considering the natural bent and disposition of many men, ought to be carefully provided against. A third mode would be, by turning over the holders of these certificates to their respective States, and giving credit for them on account of the specific supplies. This may in some degree become necessary in cases where the negligence of the States on the one hand, and the necessities of the army on the other, have compelled to seize by force what ought to have been collected by law. But in many cases it cannot be done, and it would be improper in many others where it is practicable.
Among the bad consequences, which attend the present mode of supplying our armies, or rather leaving them to supply themselves, it is one of no small magnitude, that the officers who are compelled to the melancholy duty of plundering their fellow citizens, endeavor by the sum of their certificates, to compensate for the manner of taking as well as for the value of the thing taken. Nor is that all; where there is a disposition for fraud, an ample opportunity is afforded to commit it. Whatever may be the cause, I am informed, that these certificates are for sums vastly beyond the value of the services and articles obtained for them. The respective States would naturally be led to give to these certificates their specified value, and it cannot be expected that they will scrutinise them so rigidly as they ought, if they are to be accepted in discharge of demands existing against the particular State. To all these modes there are also some further objections. Among which it is my duty to state the following. The accounts of the several staff officers still remain unsettled. The certificates given by them, if they are to be paid by the public, ought to be carried both to the debit and credit of their cash accounts, and the articles obtained carried to their debit in the account of expenditures. Of consequence the amount of these last debits must depend much upon the amount of the certificates, and therefore either the certificates given should be known, and the accounts settled with those charges, or the account should be settled, and no other certificates allowed but such as are charged in it.
A further mode of liquidating these certificates would be, by purchasing them from the holders; but it is needless to state any other objections to it than the want of money, which is felt through all our operations. There still remains this method.
1st. That at present those certificates should neither be receivable in taxes nor transferable.
2dly. That they should be taken up and examined in the course of settling the public accounts.
3dly. That they should be brought to the amount in specie, which the article procured, or service performed, was reasonably worth.
4thly. That where the sum due to any person on certificates is small, a bill for the amount should be given, payable at the distance of a year.
5thly. That where the sum is large it should be divided into five different parts, and bills given payable in one, two, three, four, and five years, calculating on each part an interest of six per cent, and adding it to the amount. As if for instance, the sum were one hundred pounds, then the bills would be for twentyone pounds four shillings, twentytwo pounds eight shillings, twentythree pounds twelve shillings, twentyfour pounds sixteen shillings, and twentyfive pounds.
6thly. That these bills should be drawn payable to the bearer, and in such form as not to be counterfeited without great difficulty.
7thly. That they should be receivable in continental taxes, within any of the States, as cash, at the times when they are respectively due, or if not so received, payable by the continental treasurer, or any receiver of the continental taxes, on demand, after collecting the taxes, in which they were respectively receivable.
In this way a credit would be obtained not only without injury, but probably with advantage to the individual. The antic.i.p.ation of the public revenue would not be very great, and, as a list of these notes would be kept, the amount of every year"s antic.i.p.ation would be accurately known. Exceptions may probably be found even to this mode, but unfortunately for us, we have only an alternative of difficulties.
All which human prudence can do in such cases is to choose the least.
I have the honor to be, Sir, &c.
ROBERT MORRIS.
TO THE GOVERNOR OF MARYLAND.
Office of Finance, Philadelphia, } August 28th, 1781. }
Sir,
Whilst I was at Head Quarters, near Dobbs"s Ferry, the determination was taken by his Excellency the Commander in Chief, to send a very considerable force against the enemy"s troops under Earl Cornwallis in Virginia; and immediately on my return hither, I did myself the honor to address your Excellency, respecting the specific supplies due from the State of Maryland to the United States, upon the requisitions of Congress, of the 25th of February and 4th of November, 1780, well knowing the whole balance due on these calls of Congress would, now become absolutely necessary to the intended operations.
I am very sensible that your government have upon all occasions executed demands of Congress with a decision and vigor, which does them honor, and on that account I should decline saying anything calculated to stimulate their present exertions, did I not know, that everything depends thereon. Virginia, North and South Carolina, have long subsisted large armies, and that expense of provisions must come to their credit. The New England States, New York, New Jersey, and Pennsylvania, have supported, and must continue to support, the main army. Pennsylvania will also contribute towards the support of the southern army, and her supplies will be directed both ways, as circ.u.mstances may require. Delaware and Maryland must chiefly be depended on. Virginia and North Carolina will, I hope, continue to do all they can. But your Excellency must be perfectly sensible, that I have not any funds wherewith to purchase supplies; no State in the Union has. .h.i.therto supplied me with money, except Pennsylvania. But as the money of that State is (in consequence of plans adopted for that purpose) very rapidly rising in value, it would be improper to call it into circulation at present, when it is at the rate of only two for one, though it has been as low as seven, because the public interest would thereby be injured, and indeed I might be charged with defeating the measures I myself had taken, in the very moment when they bid fairest for success.
The security of your State, the safety of individuals and their property are so immediately connected with the present operations, that I persuade myself your Excellency will receive every aid and support in your exertions, that you can wish, both from public bodies and individuals. My dependence therefore, on receiving the supplies from your State seems well founded.
I have the honor to transmit your Excellency herewith a letter from the Commander in Chief on the same subject, which will add weight to my entreaties. I have written to Donaldson Yeates, Quarter Master of the States of Maryland and Delaware, to procure immediately as many craft or vessels suitable for transporting the troops from the head of the Elk to Virginia, as will carry about seven thousand men, with the necessary provisions and apparatus. I have written to Mr Ridley, William Smith, and some others in Baltimore, to a.s.sist in procuring these vessels, and should any application to your Excellency be necessary on this subject, I persuade myself, that the authority of the government or weight of its influence will be brought in aid of the Quarter Master"s endeavors to procure the shipping. I have also written to Mr Calhoun to know what part of the specific supplies he has ready, and what prospects for the remainder. He must bestir himself, as indeed must every person on whom the procuring of these articles depends.
While the demands for the campaign are constantly transmitted to me, and so much depends upon the measures I am constantly taking to economise the public funds and facilitate our military operations, your Excellency will perceive that full, early, and accurate intelligence upon the various objects of my Department is of the utmost importance. I must, therefore, reiterate my requests for it. To act from necessity and on the spur of occasion is not only the source of waste and extravagance, but frequently defeats plans otherwise the best concerted, while on the other hand, that timely forecast and early provision, which complete knowledge of circ.u.mstances can alone permit of, will save much public money, and go very far to insure victory to our arms.
I am, with great respect, &c.
ROBERT MORRIS.[42]
FOOTNOTES:
[42] _August 30th._ Went out to meet his Excellency General Washington, who arrived in this city about one o"clock, amidst the universal acclamations of the citizens, who displayed every mark of joy on the occasion. His Excellency alighted at the City Tavern, received the compliments of many gentlemen, who went out to escort him, and of others who came there to pay him their respects, and then adjourned to my house with his suit, Count de Rochambeau, the Chevalier Chastellux, General Knox, General Moultrie, and others, to dinner. The owners of several ships in the harbor ordered them out into the stream, and fired salutes, whilst we drank, The United States, His Most Christian Majesty, His Catholic Majesty, The United Provinces, The Allied Armies, Count de Gra.s.se"s speedy arrival, &c.
&c. _Diary._
CIRCULAR TO THE GOVERNORS OF THE STATES.
Office of Finance, September 4th, 1781.