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AN ESSAY ON Free Trade and Finance. First published in Philadelphia, July 1779, and dedicated to CONGRESS. - Pelatiah Webster, Political Essays on the Nature and Operation of Money, Public Finances and Other Subjects [1791]

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Political Essays on the Nature and Operation of Money, Public Finances and Other Subjects, published during the American War, and continued up to the present Year, 1791 (Philadelphia: Joseph Crukshank, 1791).

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Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


AN ESSAY ON Free Trade and Finance.

First published in Philadelphia, July 1779, and dedicated to CONGRESS.

FREEDOM of trade, or unrestrained liberty of the subject to hold or dispose of his property as he pleases, is absolutely necessary to the prosperity of every community, and to the happiness of all individuals who compose it: this liberty will produce the following effects:

1. Every industrious man will procure all the goods he can for sale; this is the way to get most money; and gain is the soul of industry, the hope of reward sweetens labor, and the most righteous have respect to the recompence of reward.

2. Every man will make his goods for market of the best quality he can, because they will bring more money and quicker sale than goods of mean quality.

3. Every man will endeavour to carry to market the most scarce goods because there is the greatest demand and best price for them. All experience shews, that the most effectual way to turn a scarcity into a plenty, is to raise the price of the articles wanted: witness, among other instances, the most alarming scarcity of saltpetre and gunpowder, in the beginning of the present war, succeeded by the most abundant plenty in less than one year, effected altogether by the high price and premiums set on them.

4. Every man will go to market and return in good humor and full satisfaction, even though he may be disappointed of the high price he expected, because he has had the full chance of the market, and can blame nobody; and should he indulge fretting on the occasion, he would be the more ridiculed, and less pitied by his neighbours: and good humor and satisfaction contribute not a little to the happiness and prosperity of communities, as well as individuals; and therefore this is an article by no means to be left out or overlooked in the administration of either public or private œconomy.

5. In times of danger, distress, and difficulty, every man will use strong endeavours to get his goods to market, in proportion to the necessity and great demand for them; because they will then bring the best price, and every man is fond of embracing golden opportunities and favorable chances.

6. When things grow scarce and dear, every man will use them with the best œconomy, and make the stock on hand go as far and last as long as possible; or if he is destitute, will buy as little as will just serve his necessity. This naturally preserves the stock on hand from needless profusion and waste, and converts it to the best and most prudent use for the benefit of the community, and naturally tends to ward off high distress or total want, till the high price and great demand, by their natural operation, will bring further supplies to market.

7. In times of scarcity, every man will have strong inducements to bring all he can spare to market, because it will then bring the highest price he can ever expect, and consequently the community will have the benefit of all that exists among them, in a much surer manner than any degree of force could extort it, and all to the entire satisfaction of buyer and seller; by which the numberless feuds, riots, resentments, and mischiefs which usually attend forced markets, would be entirely avoided; and the market be supplied with all there is to be had. For no principle can draw into market, all the supplies which are attainable, so effectually, as the cheerful good-will and interest of the owners.

8. In times of scarcity, when all the goods that are to be had, are exposed to sale, it is not possible the prices should exceed the degree of scarcity, for when the prices rise very high, they will soon determine whether the scarcity is real or not; for if not real the high price will bring such quantity to market as will soon lower the price; but if real, it is necessary for the above reasons, that the prices should continue high till supplies are produced.

Restraint of property or*limitation of prices will hurt any community, and will probably produce the following effects, contrary to the above.

1. Every man will have as little to do with the market, and bring as few goods there as he can; for the less goods he has for sale, the less mortification and loss he sustains.

2. Every man will make his goods for market of a bad quality, or at least not the best; for they must all go at the limited price, and he therefore gets nothing for any special care or skill he may bestow on his goods to meliorate or perfect their quality: for the same reason, every man will expose his worst goods to market, and keep the best out of sight; for example, musty tea, stale flour, black heavy bread, &c.

3. Every man is induced to keep such goods as are most scarce from market; for if he carries them there, he can get no more than the limited price, and stands a chance of a bad hustling in the crowd into the bargain. Whereas, if he can keep his goods from market, the scarcity will soon force a great price, and he has a chance of great profits.

4. If prices are limited, and the owner is compelled to sell at the prices limited, he considers himself injured by every sale he makes for less than he supposes he could have obtained in a free market; that his liberty is taken from him, and he can no longer call his property his own. These are hard feelings to one born to freedom almost perfect, and raised to the expectations of enjoying it in future time, in its highest perfection. These feelings fill the mind with anxiety and resentment, and when instances of this become numerous among the merchants, tradesmen, and farmers, small accidents may blow up the concealed coal, and most fatal effects may easily be supposed to ensue. This is a danger of no small magnitude, for the real strength and establishment of every government consists in the hearty union and satisfaction of the individuals that compose it.

5. In times of danger, distress, and difficulty, no man will be induced to any great efforts to supply the market; for an additional danger makes an additional expense upon the goods; but he must take the limited price and no more; he will not consequently combat or risk an increase of danger and expense without any chance of compensation.

6. When things grow scarce, every man will endeavour to lay in great stores if he can do it without an increase of price, and will not think it necessary to retrench his expenses, whilst he thinks his stock will last through the scarcity; the consequence of which is, that all the scarce articles at market will be scrambled up by a few hands, who will have no inducement to parsimony in the expenditure of them, by which the scarcity and distress are increased, and many must be wholly destitute; and as far as this respects the necessaries of life, the consequences must be dreadful.

7. Add to the above, that in times of scarcity and great demand, every man who can possibly conceal his goods will be tempted to do it, in expectation that the great demand will soon break through the unnatural restraint of the limitation, and he shall be able to obtain a great profit in the future sale; and in spite of all the vigilance and force that can be used, many will be able to do this; which I take to be one of the natural effects of any unnatural restraint of trade, which cannot be avoided.

8. In addition to all these, the difficulties which must attend the execution of such an act of limitation, may perhaps furnish not the least objection to it. Must the owner be obliged to sell to every person who applies to purchase, without knowing whether he wants for use or sale? Must he forego previous engagements of his goods in favor of the present demandant? Must he be obliged to sell to every knave and litigious fellow, with whom he would not chuse to be at all concerned in any dealing? Who shall judge how much he may reserve for his own use, and whether he may give corn to his cattle and hogs, and how much, and how many of each he may keep, &c. &c. &c. Must he have his house searched from top to bottom for concealments? Even the lodging-rooms of his wife and daughters! I must beg to be excused from any further description of these horrors, which too many know are not mere creatures of the imagination.

9. It is not possible to form a limitation of prices which shall be just, and therefore the whole scheme necessarily implies injustice. The principles on which the just prices of goods are fixed, are in a constant state of fluctuation, and therefore the prices must rise and fall with their causes: all experience proves this, and it holds true in the most excessive degree, in times of such public distress and convulsion as we now experience. And as it is much safer to bind a man in health than a man in convulsions, so it will be safer to limit trade in peaceable than convulsed times. It is not more absurd to limit the precise height to which a ship shall be fixed at a wharf, where the tide is constantly ebbing and flowing. A great force will be requisite to keep the ship from rising or falling with the tide, and a mighty little use to pay for the trouble; besides the probability of very essential damage which the ship must incur by the application of the necessary force: but indiscreet as this would be judged, it is less dangerous in a calm than in a stormy season.

10. Another mischievous consequence of this fatal measure, and not the least, I conceive to be its unhappy tendency to corrupt the morals and integrity of the people. To escape the ruinous consequences of loosing in their sales, they are in a manner compelled, but to say the least, they have very strong temptation, either by downright lying, or using little arts, shifts, and cheats, to avoid the sale of their goods to disadvantage. This naturally brings them into the habit, and gives them a facility of inventing and practising low methods of shamming Abraham, which they never would otherwise have thought of, and which it is infinitely detrimental to the public, they ever should learn; instances of this sort might be enumerated without end. But it is needless to give examples, it were better they and their causes should be removed, than that they should be repeated. But after all, it is said that a limitation of prices is necessary to appreciate the currency, and supply the army. Two very great objects indeed: I will attend to both.

I. I do not conceive that a limitation of prices can possibly appreciate the currency or prevent a further depreciation.

1. The value of money is nothing in itself, it is a mere relation, it is the proportion between the medium of trade and the objects of trade; these two will always be in balance: Therefore, if the medium of trade be increased, whilst the objects of trade continue the same, the money must depreciate; if the medium of trade increases, and the objects of trade decrease, the proportion will alter fast, and the depreciation will increase in a double proportion, which I take to be the case at present. Money will therefore increase or decrease its value according to the increase or decrease of its quantity, and the increase or decrease of the quantity of goods, or the objects of trade. This principle is grounded on the nature of the thing, and can never be altered, and consequently any attempt to oppose it must be equally vain, as opposing any other law of nature whatever. It follows from this, that nothing can ever appreciate the money, but lessening its quantity, or increasing the quantity of goods or objects of trade, and all attempts to do this in any other method, will prove vain and fruitless in the end.

2. It follows, that the price that any article of trade will bring in a free, open market, is the only measure of the value of that article at that time, and if this is warped from the truth, by any artifices of the merchant, or force of power, it cannot hold; but the error will soon discover itself, and the correction of it will be compelled by the irresistible force of natural principles, i. e. it is not possible for merchants to raise goods too high, or the force of power to depress them too low, and make them keep so. Both these may be done for a short time, but neither can last long.

3. It follows that any limitation of prices, however strongly enforced, if below the rates required by this great natural proportion, is but temporary injustice, cannot be of long continuance, will tend daily to lessen the quantity of goods in market, and so will increase the mischief it was designed to prevent, and bring with it a large train of evils besides, which will require much time and wisdom to remedy, and many that will be utterly remediless, examples of which are obvious.

4. Money is made only for a medium of trade, and must be kept in circulation and use, or it perishes; for to stop the circulation of money and to kill it is the same thing, stop its course and it dies, give it circulation again and it revives, or comes to life again; therefore, the price of goods for sale, or objects of trade (i. e. every thing for which money is paid) must always be so high, as to require all the money there is to purchase them, otherwise the sum remaining cannot circulate, i. e. there will be nothing to lay it out upon, and so the owner must keep it by him, dead and useless: so that let what sums of money soever be in circulation, the objects of trade must either increase in quantity, or rise in price so high as to take all the money there is in circulation to purchase them, and as this natural law cannot be restrained, so neither can it be exceeded by any degree of artifice or force for any long time, for if the objects of trade rise so high that all the money in circulation will not purchase them, the overplus must remain dead and unsaleable in the hands of the owner, which will soon reduce the price; for goods which cannot be sold, are as useless in the hands of the merchant, as money which cannot be circulated.

5. Every limitation of prices below their due proportion, cheeks the circulation of money, than which nothing can be more dangerous, when money is over plenty; this has been the constant effect of every limitation of prices which has been tried in America. Business immediately stagnates, goods cannot be had, people cannot purchase with their money the necessaries they want, they begin of course to think that their money is good for nothing, and refuse to take any more of it, and grow willing to part with what they have on hand at a depreciated value; so that the certain operation of a limitation of prices is a further depreciation of the money instead of the contrary. Instead of this, it is of the last necessity in a plenty of money, that a free circulation be kept up, people will readily and even greedily take any money which they can readily pass again. And as long as this lasts, there can be no danger of the money’s stopping; whereas, the contrary chills it at once, and in a short time must chill it into a torpor, incapable of cure. Much in this case depends on opinion, which is soon formed by people in general, when they find they cannot buy necessaries with their money. Specious reasonings, warm harrangues, declarations of Congress, or even the force of power operate little against this; it is a glaring intuitive proof of the badness of money, when it will not purchase necessaries, and as glaring and strong a proof that it is good, when it will buy any thing in market. Hence appears the necessity of keeping up a high and brisk circulation of money, and the folly and danger of limitations, or any other measures which prevent a circulation and obstruct trade. These are arguments grounded on plain fact, they have their foundation in the laws of nature, and no artifice or force of man can prevent, elude, or avoid their effects; their operation is uncontrolable, and therefore I conceive all opposition to them is the height of absurdity, and dangerous in the highest degree.—For ten months before the late limitations, we had a trade perfectly free, on which two observations are obvious.

1. That any goods at market might be bought for continental money, the Speculators especially (as they are called) were fond of receiving it, and no person could be at any loss for any thing at market, if he had that money to purchase the goods he needed.

2. That imported goods on an average (which were the only articles Speculators dealt in) were 50 per cent. cheaper on the 25th of May last, than on the 25th of July preceding, i. e. any given quantity of imported goods would buy 50 per cent. more articles of country produce, or hard money, on the 25th of July, than on the 25th of May last; and for the truth of this, I refer to the merchants’ books; from which it follows that the Speculators (however numerous and however censured) have not raised the price of the goods they have principally dealt it:—Indeed all experience teaches, that the more hands the goods in market are held by, the cheaper they will be, and the more difficult to raise the price; and therefore, if the merchants ever think of raising the price of any article, they never fail to say, We must wait till these goods are drained out of the small stores and get them into few hands. In July 25, 1778, price current of imported goods, at Philadelphia, was as follows, West-India rum 3l. 15s. Muscovado sugars 30l. molasses 40s. pepper 17s. 6d. coffee 9s. cotton 15s. bohea tea 60s. Madeira wine 400l. dry goods about 8 to 1 old prices, and hard money 4 to 1, and price current of country produce, was as follows, for Indian corn 15s. oats 12s. flour 60s. bar iron 200l. consequently on July 25, 1778, one gallon of West-India rum would bring 5 bushels of Indian corn, 6 bushels of oats, 1¼ hundred of flour, and of a hundred of iron, or 18s. 9d. hard money; any body may easily compare the rest, and they will find enough to prove my assertion with large allowance. Price current 25th May last was, rum 7l. sugars 130l. iron 800l. tea 6l. 10s. &c. Indian corn 7l. 10s. oats 90s. flour 30l. (hard money 20 to 1) and consequently one gallon of rum would buy no more than one bushel of Indian corn, 1½ bushel of oats, ¼ hundred flour, and hundred iron or 7s. hard money, &c. These computations are made in the face of the world, and grounded on facts which any body may disprove if they are not true, or correct the reasoning if it is not just. Now I have only to add; let any body who is disposed to see, open their eyes, and see who it is that has raised our prices, or which is the same thing, depreciated our money. Is it the Speculators who deal only in imported articles? Or the farmers, among whom no kind of dangerous speculation does or can exist? Perhaps it may be replied here, that the articles of country produce are extremely scarce, which raises their price beyond the due proportion of other things: if you say this, you say every thing and yield every thing, viz. that the plenty and scarcity of goods will govern the price. You must admit too, that the plenty and scarcity of money will determine the value of that also. Why then will any one pretend to limit either, against the operation of this great principle? It is easy, in addition to all this, to prove that the price of imported articles in general does not exceed the value of them, if computed on the expense of acquirement: but this I mean only to hint, and wave it for the present; and only wish some merchants of experience and reputation would take it up, and publish the needful essay on it.

Nor do I think that the scheme of loans can give establishment to the currency, or prevent its depreciation.—For

1. All loans increase the public debt, and the immensity of the sum is one cause of the depreciation, as it induces people to think it never will be paid, or the payment will necessarily be delayed to such a distant period, as in point of use to the present possessor is nearly equal to total failure.

2. If the credit of the Loan-Office is well supported (as it must be to give it any good effect) the Loan-Office certificates themselves will pass in payment, and so become an addition to the currency which they are designed to lessen.

3. If foreign loans are negotiated, and bills sold here, drawn on the loaned bank in Europe, those very bills will become a currency here, and so add to the mischief.

4. The discount on all European bills, is not less than 50 per cent. which loss must immediately be sustained by the Continent on the first sale of them.

5. If hard money, borrowed in Europe, should be imported and sold here, the insurance, which is more than 50 per cent. must be lost, nor can any man tell the mischief which would attend any attempt to import hard money, and open offices for the sale of it for continental bills: but a large group of these present themselves too plainly to need enumeration.

6. Nor do I think the* scheme adopted by our Committee promises better success; for that proposes Loaning without inducement; and if it should succeed to the utmost expectation, it would drain the best friends to our cause of their money, whilst our internal enemies would pay nothing, for no compulsion is proposed, and after all, it will be at best but an anticipation of the revenue, very dangerous in the end; for the very worst thing that can be done respecting a revenue, is to destroy it all, principal and use, and the next worst thing is to anticipate it, i. e. to spend this year the rent and proceeds which will become due and payable next year, and these two are so connected, that the latter generally brings on the former sooner or later.

After all these objections to the various methods that have been proposed, it may be expected that I should propose some method that will be practicable and effectual to fix the value of our currency; and this I cannot think very difficult, either in theory or practice, though I have not one new thought to offer the public on the subject. We are now on the brink of ruin, and the worst disgrace, in danger of loss of liberty hitherto nobly asserted, and subjection to shameful slavery to enemies most cruel and insulting in themselves, and all that heightened in them to madness by the determined opposition we have given to their scheme of tyranny over us. All this danger arises not from our poverty or want, for we have officers and soldiers enough, stores of every kind enough, and zeal, union, and virtue sufficient to insure success; our difficulties arise only from our having too much money, and the lessening that quantity would relieve us at once from every difficulty, and dissipate the thickest clouds that hang over us.

In matters of difficulty and importance, all wise counsellors compare well the end and the means, on which two very weighty matters always present themselves.

1. Whether the means are sufficient to secure and effect the end proposed.—And

2. Whether the end is worth the means necessary to effect it. When these two points are settled, there remains no more room for consultation or debate, the rest is all vigorous action, strenuous exertion to put the means into such effectual execution as to obtain the end. This is a wise method of planning, which no man will have any objection to. We will then adopt it in the consideration of the weighty subject now in view.

1. The end is fixing our currency and preventing any future depreciation, and so putting an effectual end to all the cheats, delusions, disappointments, and ruinous losses, which every one who has been concerned in it hath hitherto felt, and giving every one a sure and well grounded confidence in it in future. This is an end, an object of such vast, such weighty consequence, and so confessed and acknowledged by all, that no arguments or illustrations are necessary to be added here.

2. The only means I conceive possible to obtain this end, are to call in such sums annually by taxes, as shall be equal to the annual expenditures; this will prevent the increase of the money, will make a great demand for it through the Thirteen United States, will give it a brisk circulation, will exhibit a most convincing proof that it may be all called in and redeemed, and that it is the real design of Congress to do this. * Nothing helps the credit of a large debtor like making ample provision for actual payments; he may promise till he is grey without this, and all in vain; the larger his promises, the less are they credited, and the more ridiculous does he become: the cry against him is, Where is the money to come from? let us see a sample of it: but the cry is altered when large payments are actually made, and sufficient provision making for the discharge of the whole debt. Let people see the money collecting through the Continent, and the sources of revenue actually opened, and the whole matter in train, there can remain no doubt but the whole of the Continental money will be redeemed, and every one will venture to trust the credit of it; and in this confidence it will be soon sought after and grasped with greediness, and hugged and hoarded with avidity.

This will put life into all our public measures, civil and military, will give our government the command of the fullest supplies of men, money, and stores that are in the country, and that can be made or procured, will give spirit to our people, will animate industry, and will be a total cure of the mischiefs we now feel from the low credit of our currency. Here is an object highly worthy of our attention, as every one will admit without hesitation: the only thing then that remains, is whether it be practicable: I soppose the outcry against it will be, that the people will not bear such enormous taxes, that they would sink the poor and distress the rich far beyond what they will ever consent to bear, &c. &c. I conceive a vein of conversation of this sort not at all founded in truth, for several reasons.

1. It is rare that the people refuse burdens or even grumble under them, when, by general conviction, they are necessary for the public good. And I dare say, that the absolute necessity of fixing and establishing our currency is become obvious to almost every individual on this Continent, and the real necessity of taxes for this purpose clearly seen by all.

2. As far as my acquaintance with people of middling rank extends, they have been generally in favor of taxing for three years past; they say this money must be paid first or last, and we can better pay it now whilst we have little use for our money, whilst it is plenty and easy to be got, than in future time, when we can perhaps not so well spare it, and when the getting it will be much more difficult.

3. The enormity of the sum required for this purpose consists much more in sound than substance; a quarterly tax of one bushel of wheat, or two bushels of Indian corn per head, on all persons in the Thirteen States, would be amply sufficient. The number of souls are computed at 3,000,000, in all the States, and of course this would produce 12,000,000 bushels of wheat, which at 20 dollars per bushel (the lowest present price) will be 240,000,000 millions of dollars, a sum greatly exceeding any annual exigence of these States; each State might apportion this as they pleased, so as to relieve the poor, and increase the share of the rich, but the middling farmer, who has ten in family, would have 40 bushels of wheat or its value, to pay in a year.

I admit this would be a high tax; but is there any thing impossible or ruinous in this. In the best of times, it would have been 40 dollars or 15l. and the same sum of hard money will probably now pay it, it is to be observed this is not the tax of a poor man or a new beginner, but of a middling farmer, with ten in family; such are spread over the face of this fertile country, and few of them so poor, that such a sum would distress them to any great degree.—It is to be observed further this is not a tax to last always, but to be paid only for a short time, during our strong exertions for the liberty of ourselves and our posterity;—again, this sum is not all to be paid at once, but at four quarterly payments;—again this is not a tax which demands wheat in kind, hard money, or any thing else that is scarce and hard to be obtained, but for Continental money, which is so plenty as to become the great burden of the country, and the source of most of our public calamities, and which any valuable commodity will procure in plenty, and with little trouble; and for which any man may sell any thing he can best spare without difficulty;—again, this is a sure method to overcome our capital difficulties, and fix the currency, whereas all others are precarious and uncertain in their effect. This is a durable, a finished remedy; all others that have been proposed are at best but temporary, and should they succeed, would involve us and our posterity in great difficulties, involve us in a vast debt, which would lie so heavy on the country as would greatly check our future prosperity, and discourage foreigners from coming to settle with us. For nobody likes to move into a country where taxes are very high and burdensome.

I submit it to every man, whether it will not be much easier for us by a spirited exertion, for a short time, to collect large sums of our present currency, and pay our expenses as fast as they arise, than if a foreign loan could be obtained, to pay a vast debt of hard money with interest to foreigners in future time, when every dollar we pay, must go out of the country never to return again. Every man ought to consider that his proportion of the public debt is as much a debt fastened on his estate, and becomes to all intents and purposes as much a burden and charge on it, as any of his private debts of the same amount, and must as surely one day be paid; is it not better then to pay it now than to have it lie a burden on him, to be paid in in future time, which may be called for when he may not be in condition to pay it so easy as now. Every prudent man does this with respect to his private debts, and what reason can be given why the same prudence should not extend to the debt which he owes the public? Can any reason be assigned why the States should not imitate the prudence and economy of a private man, who happens to be involved for a time in great expenditures, which is, to pay up and discharge as much as possible as he goes, and leave as little as possible to be settled in future time.

To facilitate this, I humbly propose one thing more, viz. To take off every restraint and limitation from our commerce. Let trade be as free as air. Let every man make the most of his goods and in his own way, and then he will be satisfied. Let every man taste and enjoy the sweets of that liberty of person and property, which was highly expected under an independent government. It is a sad omen to find among the first effects of independence, greater restraints and abridgments of natural liberty, than ever we felt under the government we have lately renounced and shaken off. Let the laws point out the duty, and be the bulwark of security of every man.

Nothing gives the people such high satisfaction with any system of government they live under, as the actual enjoyment of the inestimable blessings of perfect liberty and full fecurity under it; this will most effectually induce them cheerfully to support it. No burdens will be thought heavy, or difficulties discouraging, which the exigencies of government may require, when every man finds his own happiness involved in the establishment of the State.

If, on the freedom of trade, any articles should rise in their price, the mischief facilitates this remedy, it makes the payment of the taxes more easy and tolerable. Whereas, if the taxes were collected during the limitation of the market and stagnation of business, the payment would be extremely difficult, and the murmurs high and reasonable; it would be almost like the Egyptians demanding brick without straw. But when the circulation of money is brisk, and the price and demand for goods high, every one knows that money may be raised and taxes may be paid much more easily than in dull times of stagnated business. And this ought to be noticed on another account.

It is necessary our first taxes should be rendered as easy as possible to the people; for tho’ high in nominal sum, if they find them easily paid, the terror and uneasiness which high taxes generally raise, will mostly vanish, and the payment will be made without endangering the peace of the State, and these things all considered together naturally lead us to the true answer to the second great question to be solved, viz.

II. How is the army to be supplied? The method I propose, if it can be adopted, will undoubtedly fix the currency and create a great demand for money, and a quick circulation of it; this will of course open all the stores in the State to any purchasers that may offer, and a little prudence used in purchasing, may supply the army to the full, at reasonable prices. Indeed I am rather afraid of overdoing the thing in this way, so far as to cause an appreciation of the money, which I do not think ought ever to be done, for I see no reason why the States should be taxed to raise the money in my pocket to twenty times the current value of it; but this is a great argument, and may be the subject of future discussion.

I must add here, that this method will not only fix our currency and support our army, but will afford another advantage of no small moment: it will take away the capital hope and assurance of our enemies of conquering us; for they depend more on the failure of our funds than on their own force, for this purpose; they count high on the quarrels, contention, oppressions, and mischiefs that will arise from the low, sinking credit of our money; and by this are encouraged to continue the war, which they would relinquish as desperate without it.

I will just note here, that however intolerable the means I propose may appear at first sight, I cannot think them impracticable; the tax I propose is not more than two thirds of the annual taxes in Great Britain; the whole revenue raised every year there is about 12,500,000l. sterling, which is somewhat more than 55,000,000 dollars, reckoning them at 4s. 6d. a-piece; divide this by the number of souls in Great Britain, which are computed at 9,000,000, and we have the sum of somewhat more than 6 dollars per head on each of the inhabitants or living persons there; but, be this as it may, to balance the argument fairly, I think it stands thus: on the one side certain destruction, and on the other a tax so heavy, that a middling farmer’s share annually, will be 40 bushels of wheat, 40 dollars hard money, or the value of it in any thing he chooses to sell, to be paid in four quarterly payments. This, if it can be done, will undoubtedly save us, restore our finances thoroughly, fix our currency, and supply our army; without this, I do not see how these great objects can be effected. If any other method can be devised, it is more than all the united wisdom of America has yet been able to find and accomplish, nor do I conceive we have any long time to hesitate; something speedy and decisive must avert our fate.

Thus I have offered my best thoughts freely to the public, and with most upright intentions; I hope they may be received with candour. The facts and reasonings are all open to the examination of every one; if they do not convince, I hope at least they may induce some abler person to sketch out something more perfect and adequate to the great subject.

[* ] The pressures of the war, together with the vast increase of Continental money had for a considerable time before this Essay was wrote, raised the nominal price of all goods, to a most alarming degree; to remedy which the most unhappy expedient had been adopted in most of the states, of regulating or limiting the prices at which goods should be sold, with high penalties on those who should sell at higher prices than those limited; and those ordinances were carried into such rigid execution, that many stores were forced open, and the goods sold at the limited prices, by committees, &c. when the owners refused to sell them at those prices; and much pains was taken to load the merchants with scandal and obloquy for combinations to raise the price of goods, depreciate the currency, &c. they were called Tories, Speculators, and many other hard names, &c. &c.

[* ] This was a proposal for a subscription and immediate advance of money, to be discounted on their future taxes of the subscribers.

[* ] No taxes had hitherto been collected, or other funds but Continental money and loans, provided for supporting the war, which had lasted four years, nor had any methods been adopted either to lessen the quantity of that money, or even to prevent the increase of it, except the institution of the Loan-Office, October 3, 1776, which proved a remedy altogether inadequate to the purpose, and of course the emissions of that paper were multiplied, which together with the emissio is of the particular states, swolled the quantity so much that the depreciation at that time (July 24, 1779) became very alarming; it was about 20 to 1, i. e. one dollar hard money would buy 20 dollars continental: the annual expense of supporting an army of 50,000 men and a small navy, amounted to at least ten millions of Mexican dollars.

That Congress should ever think of supporting that expense with such funds, or that it should be possible to do it, may seem strange to foreigners, and will appear so to our own posterity; but the universal rage and zeal of the people through all the states, for an emancipation from a power that claimed a right to bind them in all cases whatsoever, supplied all defects, and made apparent impossibilities, really practicable.