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A FIFTH ESSAY ON Free Trade and Finance. First published in Philadelphia, March 30, 1780. - 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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A FIFTH ESSAY ON Free Trade and Finance.

First published in Philadelphia, March 30, 1780.

THE expenditures of the present year 1780, are estimated (as I am told) at about 10,000,000 of dollars hard money. This sum must be raised and paid, or our defence must be discontinued; we must lose our liberties and probably many of our heads too; our struggles must vanish into smoke and disgrace; and our glorious revolution must be dubbed rebellion, and punished as such, and how much more God knows. The said sum must be raised, or these miseries must ensue. We have no other alternative, and it is vain and idle to amuse ourselves with any hopes or even shadows of any other. Our defence cannot be continued without the necessary money; if that ceases, we instantly lie open to the full power of our enemies, and must submit to any conditions they may prescribe.

This I take to be the plain state of the facts; stubborn facts, which can neither be removed, eluded, or softened, by any possible finesse, coloring, or evasions. We may as well keep them in sight as to shut our eyes against them; for facts they are, and will have their operation, which we must feel, whether we will see them or not. If the expenditures, on which the estimates are made, can be reduced, doubtless every possible attention will be paid to such an object, but we cannot flatter ourselves that any very considerable savings can be made in this way; it only remains then that we set ourselves immediately to raise the money, or give up the cause in despair. I say immediately, for it will soon be too late; every department will be so involved in debt, and the difficulties, disappointments, and confusions thence arising will multiply so fast, that no remedy can be admitted.*

In a crisis of danger, when the most spirited and resolute efforts are called for, to see men like children stand with one hand in their eyes, and the other in their mouths, blubbering out with voices half assured, I cannot! I cannot! I dare not! I dare not! is ridiculous, argues such meanness of spirit, such heartless cowardice, I am ashamed of it. If I really thought the people of America capable of this, I would not move a finger to save them from that slavery and subjection for which they must, in that case, be so well fitted by nature; it would not move my pity to see them lashed by their masters into that severity of effort, which their cowardly souls had not animation enough to exert in defence of their own liberties.

The very taxes which we now hesitate to impose on ourselves to defend and secure our liberties, will, I dare say, be imposed and rigidly extorted by our enemies, whenever they shall get their yoke on our necks: the price which they will make us pay for our chains, will be greater than that which is now necessary to pay for our liberty: the temporary burdens which are now demanded to secure the well-being of ourselves and posterity, will be made perpetual on us and them by our enemies, when they shall find it necessary to secure our slavery and their luxury: for did any man ever know or read the history of any country, governed as an appendage of a distant empire, that was not fleeced, if not skinned and peeled to the bone, by their distant, unfeeling, unsympathizing despots. Such countries are never, in such case, estimated by any other scale, than the amount of the revenue and other advantages that can be drawn from them.

I do not really think that the people of the United States are at all the proper subjects of this kind of government; I do not think a meanness of spirit, a gross stupidity, or cowardly diffidence makes any part of their character; they have, in fact, resented injuries, asserted their liberties, and nobly dared to defend them, with a degree of exertion, perseverance, and firmness, unparalleled and almost beyond belief. It is my opinion that we may safely depend on any degree of exertion and spirit in our people, which is necessary to their safety; and if this is not all called out and put in force, when and to any degree the public safety may require it, the fault will lie in the rulers, not in the people.

Indeed I am of opinion, there are few instances of any countries over-run or enslaved, thro’ any defect of virtue in the people, which does not originate in their rulers; the natural and common source of remedies lies in the rulers, and if they are good, they will see the mischief, and apply the remedy, before it rises to such force as to endanger the liberties of a country. If vice or corruption gets ground in any popular state, it generally discovers itself pretty early in the appointment of officers of notorious improper character, or insufficient abilities, to fill and manage the important departments of the state; for where any corruption or prejudice prevails in any state, they will generally endeavour to get into place, such officers as are likely to support such corruption or prejudice.

In this case, the mischief is carried into the very source of remedy, and corruption gets a whip-row, which gains by every movement; and if this whip-row cannot be broken, the game must soon be up, and there remains nothing to do, but to set again, and try a new game. But as all that is not our case, this may be deemed a needless digression: we will come then directly to what is our case, which I will here endeavour to state as it stands in fact, which no fretting, or jesting, or shrugging can alter.

I. The estimates of the present year amount to about 10,000,000 of hard dollars, or the value of them, which must be paid by somebody, or our defence cannot be continued, If this ceases, our country must lie open to the unrestrained ravages and plunders of our enemies, and every obnoxious individual be exposed to their vengeance, and we have seen enough of them to know that their tender mercies are cruelty. And the only question I conceive that can arise here is this, Whether this heavy burden shall be laid on a part only of our people, and crush them into ruin; or whether it shall be laid equably on all? In the latter case, heavy as it is, it may be borne; it will not amount to more than 4 dollars on each person, or 20 dollars on a middling family of 5 persons. If there is a beggar in the Thirteen States who cannot pay this, he must have some rich neighbours who can pay it for him; and it lies with each State to apportion their taxes in such manner as to ease the poor, and increase the share of the rich, so as to bring the burden on all in due proportion to their abilities.

If, instead of this, the whole weight must lie on a few, viz. such as happen to have the supplies necessary for public use; if the wheat, hay, &c. must be torn from the farmer; the rum, salt, &c. from the merchant; the services of the soldiers, waggoners, &c. be compelled by force; if in this way our supplies and services are to be extorted from a few, whilst the rest bear nothing, the community must suffer much more than it would do, were the burden equally proportioned on all.

For to say nothing about the execrable injustice and wickedness of this method, the resentment and rage it will excite, the discouragement to the future industry of the farmer, or adventure of the merchant, the reluctant recruits of the army, hereby occasioned; to say nothing of these, it is as manifest that a heavy burden may be borne by a whole community with more convenience than the same can be borne by a part only; as that a large beam of timber can be borne by 20 men, each bearing in proportion to his strength, better than by 10 only who are crushed by the weight, whilst the other 10 bear nothing, or perhaps some of them hang on and increase the weight. The 10 who are crushed and overstrained will be rendered unfit to bear any burden in future time, and of course their future services will be lost to the community; whereas if the whole 20 bore each his due proportion, it might be a heavy lift indeed, but none of them would be overstrained, and they would all be fit for future service.

II. Our currency is in such a feeble and fluctuating state, that the ends and uses of it are much decayed, and in a manner lost; it ceases to be a certain security to the possessor of any determinate value, and of course cannot be a common measure of value for other things; so that it becomes impossible to calculate or carry on our private business or public operations with this medium, and of course both must cease, or be greatly impaired by this mischief.

This may be easily and speedily remedied by taxes; for if every bill of our currency was a Turkish turban, we might easily set any price on it we pleased, and make the demand quick at that price, in this way; for was an adequate tax made, and speedily and rigidly pressed, obliging every man to pay a turban or 10 dollars into the public treasury, it is manifest the price of a turban would immediately be 10 dollars, and the demand quick at that price. For the same reason, we may raise the value and demand for our currency to any pitch or degree we please, in the same way, viz. by making a tax for any sufficient sum of continental dollars, or the value in hard money, at any exchange we please to fix. This would immediately raise the continental money up to that exchange, if the tax was large enough, and sufficiently pressed.

Indeed we manifestly have it in our power to increase the demand and value of our currency to a much higher degree in this way, than either the fixing the currency or the public exigencies require. This is a matter that requires great judgment and nicety of observation. Some may think there may be danger of oppression here; but I answer there is neither danger nor possibility of oppression, if the exchange is not fixed higher or lower than the current exchange or real present value, nor more money required than is necessary for the public use, and the States apportion the tax on their people properly according to their several abilities; all which ought to be very carefully attended to; and if any part is not done right, the fault will lie on those that do it, but not at all on the principle here advanced.

But before we quit this idea, I beg leave to add one observation more here, viz. every honest individual, I conceive, loses more in a year by the present fluctuating state of our currency, and the present mode of procuring the public supplies, than his whole tax would amount to; he loses his business on which the support of himself and family depends, and must live on his dead stock, or at least is subjected to most material disadvantage and discouragement; for I submit it to every man to judge, whether any man, either in the occupation of husbandry, mechanic arts, or merchandise, can compute his business in such a manner, as to make it safe to put his whole stock in action in any of these ways, while he has no reasonable assurance what the produce of his diligence may be, or whether he may have the selling his produce, fabrics, or merchandise, when he has procured them.

The occupations of life are of such great importance to every man, that it is manifest that even small embarrassments in them, involve a damage much greater than any man’s tax would be to the whole expenditures of the war. This opens to our view another actual circumstance, another fact, which is too obvious to be overlooked, and too serious and interesting to be neglected, viz.

III. The whole sources of our supplies are dying away fast, are lessening to an alarming degree, and threaten not a mere scarcity, but universal famine, want, and deficiency in a short time. Most people are lessening the business of their several occupations down to a pitch just sufficient for their present occasions and necessities, and many have wholly thrown up their occupations, and live on their dead stock, and very few are calculating their business on any large scale. I submit the truth of this to common observation. The present great demand for merchandise, fabrics, and the farmers’ produce, which would be the sharpest spur of industry, were our public counsels wise, and our currency good, now becomes the terror of the possessors, and induces them to hide and conceal their effects, instead of exposing them in open market: our public acts (for taking supplies by force) demonstrate this, for such acts are always supposed to be suited to the circumstances of the times.

This is a direct and manifest consequence of the numberless instances of force and fraud which have been practised to rob and cheat the possessors out of their goods. These methods are in every view mad, wicked, and absurd; mad in those who do not see the consequences of them; wicked in those who do see them; and absurd in both, because by their natural operation they soon defeat and destroy the very ends for which they are adopted, viz. mending the currency, and procuring supplies.

The great Creator has not given to all men equal discernment; some politicians are short-sighted, and cannot see the distant ill consequences of measures which yield a present advantage, but he must be a stupid blockhead who cannot see such effects when they stare him in the face, and stand in full fact before his eyes.

The proper remedy of these terrible mischiefs is to lay the public burden equally on all by taxes; this is easier, more reasonable, and more safe for the community, than to suffer it to rest upon a few. The burden must be borne by the community in some way; the supplies and services cannot be procured for nothing; we have too lately tried it out and out, and have full proof that something cannot be paid for with nothing, and therefore if something is to be paid for, it is vain and ridiculous to be casting about, and starting and chasing one visionary project after another, of new emissions and better emissions, of loans foreign and domestic, &c. We must recur to solid wealth to pay for all our solid supplies. The nature of the subject will drive us to this at last, and the longer we put it off, the longer our miseries will increase; and God grant that we may not put it off till all remedy is desperate.

We must at last have recourse to the solid wealth of the States, and every individual must be called on for his share. In this there can be no reason of complaint; the cry of oppression will cease; that demand will be given to our currency which is essential to its nature and use; and every possessor of supplies will hasten to offer them: this will stimulate the industry of men of all occupations, and fill our country with virtue and plenty. But it may be objected here,

1. That our old currency is got so much out of repute, that it cannot be reformed, but may be called in, and replaced with a new and better one. I answer, all that ails the old currency is, that it is not, it carries not in it, a sufficient certain security of any determinate value to the possessor; and this same thing will all the new currency or any currency we can make, unless we can mend the public faith on which it depends, and connect it so manifestly and firmly with the real wealth of the States, that the security may be undoubted. It is impossible this can be done by any thing but payment, either present or so secured, that there will remain no doubt in the mind of the possessor that it will be bona fide made. If this can be done, there is no doubt but we may make our currency good, yea, better than hard money, because it is sooner counted, and more easily conveyed.

There is indeed one reason for calling in the old currency, and issuing a new one, which appears to me to have real and great weight, viz. Many of the bills of the present currency are counterfeited, and it is very necessary the public should be freed from these impositions; and to this another may be added, viz. It would be very desirable to have a currency which should express the true value of the bills in the face of them. The present bills carry but a fortieth part of the value expressed in their face; and this holds out the feeble, enervated, and debilitated state of our public credit in so glaring a light, and publishes our shame and distress so very undeniably and universally, that I should be willing to have them out of sight; as people generally endeavour to keep out of view, brands and marks which indicate the disgrace of their families.

Besides, there is a sort of deception in the bills, which I conceive to be hurtful; when a man gets a great bundle of them, he is apt to be cheated in spite of the convictions of his own heart, into an opinion that he is richer than he is, and of course to abate a little of that economy which he would think necessary if his mind was not dilated by that delusion; whilst, on the other hand, the taxes appear more heavy and terrible when heightened under the enormous denomination of the currency, than they would do were they offered and demanded in a shape that corresponded to their real value.

These may perhaps by general consent be allowed good reasons for calling in the present bills and issuing new ones, and this may be well enough, if the mode and regulations of the measure are limited to its uses.

But the substance is yet wanting, every thing necessary to give fixture to the currency is still to be done, and all remains to be done, and will remain so, till we can fix the funds of our currency so sure as to make it a certain security of real value to the possessor, and call it in so fast by taxes as to limit its quantity within the uses of circulation, and prevent its increasing to such amount as to render the final redemption difficult, improbable, or uncertain. This is the grand gist of the whole matter; this will effectually save us; less than this will not; all the rest is but shifting the weights in the scale, without adding a single ounce to help a balance or preponderation; this therefore is our great object, from which our attention must not be diverted, no, not for a moment; on this our fate depends.

2. It may be further objected, that no nation of Europe can carry on a war without loans, or some way anticipating their revenue, and running in debt, and how can it be supposed that we can do it otherwise? I answer, their case differs from ours very materially.

1. They have credit to borrow on, which we have not, unless we allow such a ruinous discount as makes our affairs desperate, and must soon put it out of our power to preserve our liberty.

2. Our country is richer, more full of men and stores necessary in war, than those of Europe in general, and of course the carrying on the war without running in debt is more practicable by us, than by them.

3. They have such sure and established systems of finance fixed and settled, on which they can issue internal bills, as furnish a certain security to the possessor, of payment; their treasuries are the safest repositories of their nation’s wealth; we have not these advantages, our treasury has hitherto proved the destruction of the wealth that has been trusted to it, and of course every body is afraid of it, and therefore loaning at home to any great amount is impracticable, and what cannot be done need not be urged as politic, eligible or salutary.

4. If any nation of Europe borrows specie, and thereby increases and of course depreciates their cash but 2 or 3 per cent. that discount is enough to spread it all over Europe, by which the balance is soon restored, and the depreciation is checked; or if any nation, as Spain, imports money from Peru, and makes it over plenty and of reduced value, it spreads over Europe directly; and so by covering a larger surface the depreciation becomes insensible, and the inconvenience little felt: but this is not the case with us; our currency cannot be exported, were it ever so good, therefore, any increase of quantity must have its full effect by way of depreciation among ourselves; and of course any increase of the quantity destroys at once the very end and use of such increase, as the value cannot be thereby increased, but instead of this, the whole deluge of mischiefs arising from a fluctuating currency must flow in upon us.

5. The very operation of this method of loaning, and anticipating of the revenue, adopted and practised by the nations of Europe, is in itself enough, were it ever so practicable by us, to deter us from following so fatal an example. See Great-Britain enervated and benumbed under the pressure of an enormous debt, the very interest of which consumes the best part of the richest revenue which the wealth, industry, and oppression of the nation can produce. How disheartening must it be for that people to struggle thro’ the year merely to pay a corroding interest, which brings them not the nearer to the end of their misery, but only keeps alive that gnawing vulture that must for ever feed on their very entrails. I cannot but wonder that any man in his senses should hold up such a sad spectacle for an example to the Americans.

6. The nations of Europe never attempt to borrow money, till they have first raised all the revenue they can within themselves, and find it not sufficient; but this is so far from our case, that we have never yet taxed half enough to drain off that surplusage of money which the war has occasioned, and our capital distresses and difficulties have all along arisen from that flood of money which made it too plenty for use; even hard money will buy little more than half so much country produce as it would purchase before the war.

This mischief cannot be remedied by increase of the quantity, by loans or any other way, but must in its nature be checked by draining off and lessening that quantity, and thereby raising the demand for it which is essential to its use. From all this it appears to be weak and silly as well as absurd, to urge for our imitation the example of other nations, the very convenience, necessity, or even practicability of which depends on circumstances which do not apply at all to our case.

It is not the least danger of this practice that it operates insensibly, saps and mortgages our wealth before we know it; it operates like a slow poison, which is certain death, and more painful, tho’ more slow and lingering, than the sudden execution of the ball or sword. Indeed I look on all insensible taxes to be highly dangerous; a fatal instance of which we have in the depreciation of our own currency. I think it necessary that the people should see and feel what they pay, should earn the money before it is spent; this would prevent a thousand stupid, foolish, and needless ways of spending the publie money; this would make the rulers careful how they adopt any expensive operations, and attentive to the strictest economy in the expenditure.

Insensible taxes are like insensible perspiration, which weakens the body, and wastes the constitution before the patient knows he is sick. Nature generally marks places of danger with signals of notice, and every mariner looks on one sunken rock as more dangerous than twenty that are above water; for this reason I think that every branch of the revenue should originate in such sensible and visible demands on the wealth of the people, that they may all feel and know what they pay, and what they pay it for; and this is, in my opinion, the surest way to keep a treasury always supplied with enough by the cheerful contributions of the people, when the public safety or convenience requires it, and to prevent more than enough being ever demanded or granted: a due attention to both these I take to be no small branch or even pillar of policy in every state. The foregoing survey of our mischiefs and remedies brings up to view another circumstance which appears to me a very plain fact, viz.

IV. Our distresses, dangers, and difficulties do not consist in a want of any thing, but in over plenty, in surplusage of cash, which is become so common and easy of acquirement, that it is slighted, it is little thought of, it is scarce an object of desire, much less of animation; our burdens are burdens of cash, that which is the wish and want of most other distressed people is our misery; like plethoric constitutions, whose stamina are all good, but are overloaded with too much blood. A sufficient bleeding, a proper draining off of this superfluous matter, would set us all right in a short time, and every part of the constitution would find case, relief, and a speedy return of life and vigor from the simple operation of this most obvious, natural remedy. On the whole matter, I think that one more fact offers itself to view, which were we in a less torpid state, might animate us to some spirited efforts, some lively exertions to extricate ourselves from distress and danger, viz.

V. Every circumstance conspires to demonstrate that the most sure and effectual remedies are in our own power, are very practicable, and the present time is the most suitable for the application of them that any nation in distress ever had or could wish. We are free of debt, at least of the pressures of debt; the whole public debt at home and abroad does not exceed our abilities, and may be paid in two or three years without any painful exertions. We are yet on this side of that bottomless abyss of debt, into which our enemies find themselves plunged; that insupportable but everlasting burden that presses and exhausts them in so fatal a manner, that they are become the sport of their enemies and neglect of their friends; none appears for them in this their day of distress.

This enervating, disheartening circumstance we are yet free of; our strength is our own, and in proper condition for use; we are yet to receive the fruits of our own labors; none of our crops are mortgaged or sold before they are reaped; our wealth is entire; our country abounds with most of the supplies and stores we need; we have no difficulty but in the disorders of our finances, and they are not only capable of being restored, but self-preservation will compel us to it. We are like a strong man who is obliged to labor, but the labor required is but just enough to afford that degree of exercise which is absolutely necessary to his health, and which he must practise or be sick.

The same kind and degree of exertion necessary to restore our currency, reinstate our finances, establish our credit, and animate the industry of our people, will at the same time pay our civil list, and carry on the war. Our enemies are in a declining state, under great degrees of embarrassment, and have their hands full in every quarter, and every body against them; whilst we are courted, like the rising sun, by every body; our alliances and connexions are of the surest and best kind, grounded on such interests as cannot deceive us; a general union prevails among ourselves; our public counsels are all dictated by the same views and ends, and if ever we differ, it is only about the means of obtaining the same end; our relief indeed requires the animated exertions of our people, but the very distress they all feel, makes them willing to put into vigorous practice, any efforts which tend to their deliverance.

Here I beg leave to call the reader’s attention to the act of Congress of the 18th of March 1780, respecting our finances, that we may, on the best examination, judge how far that important act, if duly executed, will reduce our finances into such method, and give them such establishment as the public safety requires. It is necessary that the nature, design, and use of that act should be thoroughly discussed, because the efforts for its execution will probably take their tone from the degree of conviction which generally prevails of its utility.*

I do not pretend to be adequate to such a discussion, and shall only beg leave to make a few remarks on it; and this I am induced to do at this time, because the act is but lately published, and our people have not had time to make up their minds on it, and I conceive many persons misapprehend the real design and true construction of it.

1. I take it that the design of the act is not to be a substitute for taxes; our public credit or finances want the same support and supplies from our real substance, our material wealth, as they did before the act. If the new bills are no better supported than the old ones were, they will depreciate as fast, become as useless and more ruinous than those, as these involve us in a vast debt of interest, which those did not. The past error of our finances is clearly seen, and the deluge of mischiefs resulting from it is severely felt, and the design of this act is not to continue but prevent those mischiefs in future, not to repeat our former error, but to mend it.

2. The act contains in it a declaration or fixture of the present value or exchange of the public bills, making them redeemable at 40 for 1, or 6d. in the pound, and this on the highest reason, grounded on such rigid facts, such real change of circumstances, as render the fulfilment of the promises contained in the old bills, impracticable, injurious to the public, absurd, and useless, as I think I have fully proved in my Fourth Essay; and all clamor and exclamation on this subject is as idle and void of reason and sentiment, as a clamor against any other promise, which, however properly made at first, is become, by a change of circumstances, either impossible or highly improper to be performed, of which we have daily instances in every part of human experience.

We are to consider the depreciation of our currency as a public calamity, like a blast, a deluge, a drought, or ravages of an enemy, which affect every man as he happens to stand in their way, and to become their object; in all these cases the mischief must lie where it lights; it is doubtless so directed by Divine Providence, that each individual receives that degree of correction from it, which is suited to his own particular case.

In point of remedy, it is vain to inquire whether this calamity arose from the public necessity, or from the fault of any individuals or boards of our policy; for could we find and punish the faulty delinquents, their heads or gibbets might hang up in terrorem, as monuments of caution to future financiers, but can avail nothing to the easement of the calamity; our duty at present, and all we can do is, to correct the mischief in time, and prevent it in future.

3. It is objected to this act, that it doubles the quantity of circulating bills, because it issues 2 dollars out for 1 that is brought in, for 10,000,000 of the new bills are equal to 400,000,000 of the old ones, at the exchange of 40 for 1, prescribed in the act itself; that this will clash with a former resolution (of Sept. 1, 1779) “that the quantity of bills should not be increased beyond 200,000,000;” will tend to a depreciation; and render the fixing the medium more difficult, if not impossible. But I beg leave to observe here, that few laws would be salutary, or even tolerable, if they were executed up to the height of their letter; and I conceive that a prudent execution of this act will obviate all the ill effects arising from the above objections.

I do not conceive it to be the design of Congress that any part of the new bills shall issue at all, if it shall be found that it cannot be done at their full value, without any depreciation; or that they shall issue any faster, or to any larger amount than can be done, without any depreciation; for I can by no means admit the supposition, that the new bills are to be issued in a depreciated state, because that very depreciation defeats their use, renders them insufficient for the procurement of supplies, and involves us over again in the miseries of a fluctuating currency, whilst we are at the same time loaded with a vast debt of hard money to pay the interest of them. I never doubted the integrity of Congress, and therefore cannot attribute to them such absurdity of design, even tho’ the letter of their act might admit such a ruinous and absurd construction.

They reserve, in their act, 4 tenths of the new bills for their own disposal, which they will doubtless issue in a manner safe and useful to the States; whilst the other 6 tenths are left to the discretion of the States, who have every inducement to a prudent issue of them, as each state will stand bound to redeem both principal and interest of all they shall issue.

I am further told, that the Congress have it in contemplation to appoint a Financier-General, of known gravity, judgment, and economy, to superintend this great department, who can either let out or withhold the issues in such manner as to give the bills all the effect and use their nature will admit, without overloading the public credit, or increasing the quantity so far as to lessen their demand, and, by that means, lose the whole benefit by grasping at too much. This error is so fatal and recent, and the apprehensions of the people wound up to such a pitch of alarm, that I much doubt if half the proposed quantity of the new bills can be issued without a sensible depreciation; but experience will best show this, and prudence at the time must dictate the practicable degree which may be ventured on; and it is my opinion, that no possible height of public necessity can justify exceeding such degree, because that excess is a sure way to defeat the uses of the currency, and of course to increase the public necessities, let them be ever so high before.

The exchange is a sure barometer of the public credit, as it is of the trade, and will always serve as a safe monitor and guide to our counsels of revenue. It is the vainest of all vanities to imagine that a public bill is worth a dollar when it will not bring it, or that it is worth any more than it will bring. If it shall be found on trial that any larger sum than I have supposed, or that the whole 10,000,000 can be issued without depreciation, the public may safely receive the benefit of the whole; and the addition of the interest, which will be received by every individual that holds the bills, will compensate for the increase of his taxes to pay it.

This matter cannot be computed on with any exactness, without knowing the whole amount of the current cash of the Thirteen States, which I have not yet seen any where ascertained. I have heretofore on a few data made a sort of loose, rough computation of it, to be about 12,000,000 of hard dollars; but I have of late been collecting documents for a more exact calculation, and on a nearer view am induced to believe the amount will rather fall short of that sum, and perhaps very considerably; and I think farther, it is very manifest that we must have a promiscuous circulation of both hard money and paper, in order to keep the exchange of them equal: but this by the bye.

4. It may be further objected to this act, that we can have no security that some necessity or other will not be urged next year to make a further addition to the emissions of circulating bills, till they will depreciate.

But in answer to this, I am clearly of opinion, Congress will not be able to issue the whole 10,000,000 already voted without a depreciation; and also, that they will not dare to issue any of it in a depreciated state; this will so manifestly and immediately ruin the use of the whole, and defeat its whole purpose, and bring on afresh the mischiefs of a fluctuating currency, that I can have no idea that any men in their senses can think of adopting it.

But if we are to suppose our wisest men capable of such idle frenzy, it is needless to reason any further about it, we may as well give up all use of our intellects, and follow where wild distraction roves, and take the fate which a concourse of whim and accident shall provide for us: but I augur better things; I am full of expectation that before our affairs come to this pass, our wisest men, both in Congress and State-Assemblies, will be convinced of one great truth, dictated by nature and our present circumstances, viz. that we must pay our expenditures as we go: and this is the only practicable method before us; this will make any scheme good, which is not wretched indeed, and without this, every devisable scheme is but whim, vision, and frenzy.

5. The sum of 10,000,000 is not more than the States are able to make the most sufficient and undoubted security for, if they please. But let that security be ever so good; to give it a currency, and prevent a depreciation, they must raise a demand for it by general taxes. These are recommended by Congress in their act of the 18th instant, and others foregoing; and were they put under rigid collection by all the States, we might judge whether the demand thereby raised was sufficient to give life and use to the currency; if it should not be so, it is necessary that the taxes be still increased till that effect shall appear, at which time, and not before, the grand point will be gained, viz. that of fixing our currency. We shall then have the two great things necessary to fix any paper currency, viz. good funds, which may give the possessor a certain security; and a quick demand and circulation of the currency itself.

6. It appears then, that if the said act was put into proper and wise execution, duly limited and sufficiently vigorous, it will answer the great and important ends expected from it; and tho’ it may not be thought the best possible, yet as it appears to be sufficient for its purpose, were it duly put into operation, and properly supported, I think it clear that the States ought not to hesitate adopting it, nor starve it by too languid and dilatory movements; the best plan possible may be rendered useless and ineffectual this way; wisdom and decision in counsel are not more necessary in any important plans of this sort, than vigor in execution.

I do not consider the act so much a scheme of increasing the revenue as of fixing the currency; but if it is to include both, the first certainly depends on the last, and is limited by it; for Congress cannot think of issuing any part of the new bills in a depreciated state; they must fix their value, or it is idle, dangerous, and ineffectual to the last degree to issue them; if they can be issued in a fixed state, yet no more of them can be issued than can be kept in a fixed state; for to exceed this limit, will be to destroy their whole use at once, and involve us in more distress than before. I look on it a very bold step to put the revenue on such a risk; but I suppose the public necessities require it, and of this the Congress are the best judges, and doubtless acted on more reasons than we out of doors can see.

The fixing the currency, and incomes of revenue are of of the last consequence to us all in the present crisis; and therefore it appears to me absolutely necessary that every State should exert themselves in the most speedy and effectual manner to give sanction and force to this act, lest, by their defect, the important chance should turn against us, and we should be left without revenue or currency at this critical time, when our political existence, as well as the occupation and means of living of every individual, depend on both.*

To have a currency of fixed value, and the same as is expressed in the face of the bills, is an object most important and desirable, but can be obtained in no other way than by keeping the quantity within due bounds, and ascertaining its value, by such connexion with our real substance as will make it a certain security to the possessor. The value of money being wholly grounded in the proportion of two objects, viz. the quantity of money, and the objects of money, it is demonstrable that if either varies, whilst the other continues the same, the proportion must vary likewise, and of course the value of the money must fluctuate, as appears most plain to any person who has the least knowledge of the nature of proportion.

All experience justifies and confirms this reasoning, and puts the truth of it beyond all doubt; yet so strongly does the infatuating bias, like some darling, favorite lust, work itself into our public counsels, that after the longest and gravest consideration of the subject, they will, in the face of the clearest demonstration, in spite of repeated experience and the fullest proof of fact, still work up their deliberations into the vain issue, the fruitless resolution of trying new methods, adopting new plans of increasing the currency, and thereby defeat their own purposes, render their counsels ridiculous, and leave us all without remedy. The mischief lies in the nature, not in the modification of this fatal charm; there is too much already, and it is not possible that any increase of quantity, however modified, should help the matter, nor is it possible to fix the value in this way; for the increase of the quantity will for ever render the punctual redemption of it more difficult, and therefore more uncertain, and of course of less credibility or credit.

The nature of money is such, that its quantity cannot be increased beyond a certain degree, without losing its use; this has already been far exceeded, and it is not therefore possible that our remedy should lie in further increases of it, however modified. I have known people try to fatten their hogs with pumkins, turnips, and bran, to save corn, but without success; I have known people who had not milk enough, add water to it, but the nutritious particles of milk were not increased thereby; I have known children change their pistereens into coppers, and gain a greater heap of money; in all these cases the substance was wanting; the show, tho’ increased, was delusive; and the counsels puerile and without effect, to say no worse of them.

Impending destruction is no longer a matter of empty declamation. All occupations of town and country are embarrassed and near to a full stop. Our public debts are every where increasing, and supplies failing. Famine, want, and total enervation of all strength and effort must be the speedy consequence. When the springs, the fountains, the resources are dried up, it is not possible but the streams must fail soon. We are in every respect well and safe, except in the article of finances. Were they restored, every thing else would immediately flourish and gain vigor sufficient for every purpose of safety and happiness.

There is in nature but one way to restore these, viz. by immediate recourse to our solid substance, by taxing equal to our expenditures. This I have often urged in vain; whenever it comes in view every countenance gathers paleness. True, but it is impossible, is the cry. Had it been a spectre, or goblin of terror, it could not have been started from and avoided with more precipitation. People will even take fatal leaps into certain destruction, to get away from it.

Pray, my countrymen, let us muster up a little courage and firmness of mind, and not, like a distempered imagination or guilty conscience, start with terror at a distant movement of we know not what. Let us compose ourselves, and take a little nearer view of this dreadful expedient; it is not so frightful in near view as in distant apprehension. There is such a thing as being penny wise and pound foolish. We may lose the ship for fear of hurting the sails.

  • Presence of mind and courage in distress,
  • Are more than armies to procure success.

A cool and careful examination of the subject will at least let us into the truth of it; and be that truth ever so hard and dreadful, our knowing the worst of it, is preferable to suspense.

Many things which strike us at first as intolerable or impossible, lose much of their difficulty and terror by growing familiar to us. Could we have thought it possible to support the dreadful war which we have hitherto sustained, had it been held up to our view five years ago? The remedy now proposed is but trifling in comparison of what we have suffered. And shall we sink disheartened in sight of a desirable shore, after we have surpassed the tempests and billows of the ocean thro’ the voyage? The remedy I propose, is allowed by all to be effectual and sufficient, if it can be practised; and we shall find it the only one that can save us from ruin; at least this is my opinion, after more than six months’ close attention to the subject, and viewing it in every light in which I can consider it.

I conceive, if it should appear that each industrious individual loses more for want of the tax, than his tax would amount to, that every doubt of the expediency of the tax would instantly be removed and vanish at once; and I think this may be made very clear and plain. I shall attempt to prove this.

I. The tax demanded will amount to about 4 hard dollars in a year to each person in the States, or 20 such dollars, or the value of them, to a middling family of 5 persons; and this will, by the due apportionment of the tax, be lessened to the poor and increased to the rich, in proportion to their abilities. This is the height of it; this is the worst that can happen; this is the dreadful price demanded for our salvation, to save us from sure destruction, and which the Thirteen States are deeply hesitating and contemplating whether they will pay or no; at least this tax is what the Congress are hesitating to recommend, and the States to levy and collect, tho’ I doubt if the people would hesitate a moment to pay it, if it was put under collection, especially if it was demanded in monthly rates, which would render the payment much more practicable than it would be, if it was all called for at one payment. Now we will consider what is lost for want of this tax.

1. Every industrious man loses his business, his occupation, or at least finds it greatly embarrassed, and subjected to great difficulty and discouragement: for, I submit it to every man to judge, whether, in the present fluctuoting state of the currency and mode of procuring the public supplies, whether, I say, it can be safe or prudent for any man to lay out any business of husbandry, mechanic arts, or merchandise, on any large scale, whilst he knows not what he must sell his proceeds for when he has got them, or whether he may have the selling of them at all or not? These embarrassments are very sensibly felt thro’ the States, but would all vanish, if our finances were restored. And I think it very plain, that a man’s occupation must be very poor indeed, if these embarrassments are not more damage to him, than his whole tax would amount to.

2. For want of the tax, the supplies of the country are daily lessening, our plenty wastes away fast, and scarcity and want are succeeding in the place of them. This makes every man’s estate in the country less valuable, as it is apparent that an estate in a country of poverty and want, is not so good, or worth so much money, as the same estate would be in a country full of riches and plentiful supplies. All means of living will of course become harder to be obtained, as it is more difficult procuring supplies in a country where they are scarce, than in one where they are plenty. What may be the amount of loss to each individual from these causes, is not easy to calculate; but as they affect the whole bulk of estates, and operate on the whole means of livelihood, they cannot be supposed small, and I think will readily be allowed to exceed any man’s share of the tax necessary to prevent them.

3. For want of the tax, the morality and industry of the people are greatly diminished. Frauds, cheats, and gross dishonesty are introduced, and a thousand idle ways of living are attempted in the room of that honest industry, economy, and diligence which heretofore blessed and enriched this country. And as an estate in a country of honest, industrious people, is better than in one filled with idle rogues; and as all property is hereby rendered more unsafe and less valuable; it is very easy to see, that the loss of each individual in this respect, will be very considerable, and must, on a very moderate computation, much exceed the tax required to remedy the whole mischief.

4. For want of the tax, our trade is decaying fast; and this not only ruins the merchant, and renders the procurement of such necessaries as are usually supplied by our trade, more dear and difficult, but it enervates the whole system both of husbandry and mechanic arts, as these can never flourish without a market, where the produce of the farmer and the fabrics of the mechanic may be sold, when ready for sale. This affects the whole country in a most material manner, and must at least involve each individual in a loss of more than his tax would amount to, sufficient to give a fixed value and use to our currency, and thereby restore our trade and husbandry to their former vigor.

5. For want of the tax our defence must cease, and we must lie open to the ravages and plunders of our enemies; the very risk and danger of which involves many distresses that must occasion loss to every individual, far greater than the whole amount of his tax would be towards such defence as would render the country quite safe and secure. Add to this, the danger of being finally overrun and conquered by our enemies, and falling under their unrestrained power; in which case, they would doubtless extort perpetual taxes from us, to as great amount as are now required for a short time to secure us against their power.

6. The want of this tax enervates our laws, renders their fines, penalties, and forfeitures uncertain and ineffectual; destroys the salaries, fees, and rewards of our civil and religious officers, and of course prevents men of abilities from serving in the character of judge, sheriff, gospelminister, schoolmaster, &c. and of course the whole system of our civil and religious polity, and education of youth is clearly on the decline to a very dangerous degree; but as all these institutions tend much to the happiness of society, any decline of them must greatly prejudice the value of every estate, and the prospects of happiness and utility arising from it, to an amount greatly beyond the tax required to secure all these wholesome institutions in their fullest use, respectability, and general influence.

I might add here more instances of loss incurred by individuals from the fluctuating state of our currency and disorders of our finances, which would be all remedied by the tax I recommend; but it appears to me, those already adduced are grounded on such obvious and notorious facts, are of such interesting concern, and of such forcible conclusion, that if they do not convince, it is needless to offer more on the subject; it is vain to offer arguments to people who will not give a shilling to save a pound; and yet this is much more than the tax I propose, requires, however it may be aggravated and heightened by stingy, timorous, or corrupted men, into an exorbitancy utterly insupportable.

II. As the money collected by taxes, or other money to the amount will be constantly issuing, the payment of heavy taxes will be rendered as easy as the nature of the case admits; while at the same time the great demand for money occasioned by the tax, will be sufficient to keep its value fixed, and its uses well secured and preserved. The facility of raising sums of money when the circulation is brisk, and the demand quick for goods on hand, is easily conceived, by any person in the least acquainted with trade. This mightily lessens the burden of the tax below what it would be, if collected in a dull time of business, and scarcity of cash, and consequently the tax itself becomes less sensibly felt under these favorable circumstances of easy procurement, than the same would be, if deferred to some future time, when there might be less demand for goods, and greater scarcity of cash; therefore it is the interest of every individual to pay his dues to the public whilst he can do it with the greatest ease, rather than defer it to some future time, when he may happen to be called on for it at a juncture when the payment will be more difficult and distressing than now.

III. The price of most kinds of country produce is much higher than it is usually in times of general quiet, and therefore the tax may be paid much easier now than then; as a bushel of wheat, a cow, a sheep, &c. will bring much more now than it will do when quiet is again restored, and of course ought to be sold now, that the payment may be made whilst it can be done with most ease and advantage; for what is not paid now must lie as a debt to be paid in future time, when it will probably take near a double quantity of wheat, beef, mutton, pork, &c. to pay it, as would now be sufficient.

IV. Further, a prudent man will never let a demand lie against him when he can conveniently satisfy it; and a public debt is the worst of all kind of demands, when a man is not ready for them; for I submit it to every man if he would not see any sort of creditor come to him when he was unprepared to pay, rather than a public collector. Present payment avoids all this trouble and mortification, as well as saves much by the high price which that produce will now bring, which must be sold to pay the tax.

V. The tax will procure a good market, and sure, sufficient payment to individuals who have such articles for sale as are needed by the public; whereas for want of the tax, thousands who have sold their goods to the public, have been paid in a useless currency, or have not been able to get any payment at all, to their great disappointment and damage. This is a consideration of great importance to most people in the States, as there are few who would not choose to supply the public with some kind of goods or services in their power, if they could be sure of punctual and sufficient payment. The having a quick and profitable market for what is made ready for sale, is no small advantage to every individual; for without this all his goods which he does not need for his own consumption, lie useless on his hands, or his time may be lost for want of an employer, who would pay him for his services.

The advantages resulting from this one circumstance would be equal to the tax to many thousands of individuals; as the goods or time they would lose for want of a market or employers, would be more than equal to the tax, as they have experienced to their sorrow, who have lost their goods for want of a market, or sold them where they could not get their payment either in due time, or in currency of certain value.

VI. The tax would remove all cause of complaint, and put an end to the great oppression which has taken place much too long; for if the burden is laid equally on all, no one can have any cause to complain of oppression when his share is demanded; but without this the supplies wanted for the public must be taken by force or fraud from the owners, without payment, to their great oppression and injury. Indeed if supplies are not procured and sent to the army, these oppressions must be multiplied to a very tragical degree; for to disband the army and send them home, when their present supplies are spent, will not probably be either safe for the country, or agreeable to them; they must therefore live in free quarters; they will probably be directed to march into such States and towns as have been most deficient in furnishing their quotas: but even in that case, thousands of individuals will suffer, who have not been guilty of any deficiency or delays; for in cases of such extremity, the innocent must be involved with the guilty, and of course oppressions must be infinite, and very terrible. The burden of the tax bears no proportion to the ruinous and most dreadful effects resulting in this one instance from the want of it.

VII. The tax in a few months will restore our finances, fix our currency, and put us in condition to unite our force with every possible advantage; and this will so clearly demonstrate our unbroken strength, union, and firmness, that the hearts of our enemies will die within them, and they will soon break up and leave us in despair. Their only hope of conquest has long been from the confusions of our finances; they have not attempted for two years past to oppose their capital force to ours, but have hung on us in hopes that we should soon sink under the pressure of our own expenses, and so fall an easy prey into their hands; and they will continue in this hope as long as they see us ringing the changes on visionary schemes, and trying in new shapes and attitudes an old delusion, that always has deceived us in every shape, and probably always will.*

VIII. This same thing will show to foreign powers our unbroken strength, great resources, wisdom of policy, and vigor in execution, give us great respectability in their eyes, and enable us to demand and expect any aids from them which we may need; for the state of human nature is such, that those can get least help who need it most, and those can procure most friends who need them least; and the best way for a man or a nation to get assistance from his neighbours is to be able to do without it.

On the whole, I do not see that any thing more is necessary, than wise, decisive counsels, put into action with spirit and resolution. We have enough to do with, if we had but spirit and wisdom to call it into use; and I think this spirit is much more wanting in our rulers than in the people. In old times of distress among the Israelites, it was a sign of approaching deliverance when the Spirit of the Lord came on their great men, i. e. in the Hebrew dialect, a great spirit, great courage, and resolution, adequate to the work; as the trees of the Lord mean great trees; the sons of God were their great men, and thunder is called the voice of the Lord, because it is greatest of voices in the natural world. The Romans, without inspiration, somehow catched the same idea. Audentes fortuna juvat. They esteemed Fortune a divinity, ready to help those who had spirit and courage to help themselves. Little is to be expected from languid counsels, half assured resolutions, plans that want extent adequate to their purpose, and vigor of execution equal to their extent. If I could see a little more of that Spirit of the Lord which animated the brave old worthies, I should soon expect to see the sword of the Lord follow, and our troubles and troublers all melting away before us.

But before I quit this subject, I beg leave to add one thought more, which appears to me of the most capital importance, viz. that no plan of taxation, or any thing else, can be of any good effect, if there is not some method adopted to bring all the States into an union and punctuality of execution. The least company of men, who have a common concern, if it is but in a ship or piece of banked meadow, find it absolutely and essentially necessary to have some way to compel their partners into a punctual discharge of their quotas. The very existence of our union requires this. If one State hangs back, another will, and the best concerted plan possible may be rendered ineffectual by delays and defects in the execution.

It is essential to the very being of any independent community, that it has in it all the powers necessary to its own preservation. These powers doubtless exist in the Thirteen States, as perfectly as in any other community in the world. And tho’ I do not pretend to understand the constitution of our union well enough to decide where these powers lie, yet I should suppose they must be vested in the Congress, as I know of no powers which extend over the whole, but theirs. But if it is thought that these powers are not sufficiently explicit and declared to be in them, it is necessary that this declaration should be made without delay, and put into such force as is absolutely necessary to give effect to our public counsels, preserve the union, and concentre the force of the whole, and prevent that destruction which may ensue for want of such union of effort for the common safety.

If it was possible for the tardy States to go to destruction alone, without dragging the rest after them, it might be best to dismiss them from the union with contempt. But as this cannot be done, it is necessary to the preservation of the whole, that some means be found to compel such States to keep pace with their neighbours, and bear their due proportion of the burden and duty, as well as receive their share of protection and benefit.

In fine, we want nothing but united and spirited efforts for a short time, to restore our finances, establish our currency, retrieve our honor, secure our safety, give vigor to every kind of business and occupation, recover our virtue, and make ourselves the laudable and envied example of wisdom and happiness to all the world. Our posterity expect and have a right to demand this from us. The eager eyes of all Europe are on us, ready to give their plaudit to our virtue, decision, and success. Our enemies tremble, for fear we should grow wise and virtuous; and Heaven opens the scene favorably, and has given us the lucky cards, and we have nothing to do but to play them out well.

  • Et dubitamus adhuc virtutem extendere factis,
  • Aut metus, hac libera, prohibet consistere terra.

[* ] To this Essay, when first published, the following preface was prefixed, viz. “The urging taxes, I know very well, is an unpopular task, and generally meets a sour reception and very little thanks; but the belly must be fed, or all the members must perish, and it is not possible it should convey nutriment which it does not receive. When we find a general decay and weakness spreading into every limb and nerve of the body, it is time to attend very seriously to the malady, and every other consideration must give place to the remedy. If there is a disorder or worm in the bowels which devours much of the food, it is a sad circumstance indeed, but still the belly must be fed, while we are taking every method in our power to extract or kill the worm. Truth, however disagreeable, will force itself into notice and attention, and to know it is always safer than to be deceived; our deception or ignorance will not retard the hasty steps of ruin. The man who points out the real distresses and dangers or errors of the State, does not make them; the knowledge of them tends to a remedy. I therefore hope my humble attempt may be received with candour, however disagreeable the subject, a present and diligent attention to which, I conceive absolutely necessary to the public safety. If any man can avoid my propositions, or substitute better, he may serve the public, and will not diseblige me.”

[* ] The substance of said act is as follows, viz.

1. The monthly tax of 15,000,000 of dollars, from Feb. to Aug. 1780 (recommended to the States, Oct. 7, 1779) is continued to the 1st of April, 1781, inclusive.

2. That hard money be receivable in payment of said tax, at the rate of 1 Mexican dollar in lieu of 40 Continental dollars.

3. That the Continental bills paid in for said tax, except for the months of Jan. and Feb. 1779, be not re-issued, but destroyed.

4. That as fast as those bills shall be brought in to be destroyed (and other funds shall be established for other bills) other bills be issued, not to exceed on any account one twentieth part of the nominal sum of the bills brought in to be destroyed.

5. That the new bills which shall be issued, be redeemable in specie within 6 years from Jan. 1, 1781, and bear an interest of 6 per cent. to be paid in specie at the redemption of the bills, or, at the election of the holders, in sterling bills of exchange, at 4s. 6d. sterling per dollar.

6. That the said new bills issue on the funds of individual States to be established for that purpose, and be signed by persons appointed by them.

7. That the United States be likewise pledged for the payment of such of said bills, as shall be signed by those States, who, by the events of the war, shall be rendered incapable to redeem them; which undertaking of Congress shall be endorsed on said bills, and be signed by a commissioner of Congress.

8. That the several States shall receive 6 tenths of the bills which they sign, for their own use, and that the remaining 4 tenths shall be subject to the orders of Congress, but shall be credited to the several States who signed them.

9. That the said new bills be received in taxes at the same rate as specie.

10. That the several States be called on to provide effectual funds to sink 1 sixth part of their respective quotas, annually, after Jan. 1, 1781.

11. That this act be despatched to the Executive of the several States, to be laid before their Assemblies, who are requested, as soon as possible to previde certain funds for the purposes of it, and take every other measure to carry it into full and vigorous effect.

[* ] In my Fourth Essay on Trade and Finance, published Feb. 10, 1780, I calculated the exchange of Continental money at that time to be 40 for 1, and strongly urged the fixture of it at that exchange, that the fatal mischiefs of a fluctuating currency, either by appreciation or depreciation, might be avoided.

From this I suppose that some people have surmised that the first idea and original plan of this act was formed by me and suggested to Congress, and my opinion here expressed, “that the States ought to adopt it without hesitation,” confirms their conjecture: this induces me to observe some things on this matter, viz.

1. This act was not the absurd, inefficient, and ridiculous thing, which some people have represented it to be; there was no error in its principle; it wanted nothing to complete its purposes but decided support and effectual execution. The taxes then instituted by Congress, with the arrearages of former requisitions, would have been (if punctually paid) sufficient to call in every bili of the old money, and a large sum of the new bills, in the course of one year, and would doubtless have raised such a demand for what remained, as would have kept up its value, and prevented any depreciation.

Yet, 2d, I did not approve of it, but in all conversations I had with Members of Congress, whilst it was under debate, I constantly opposed it; principally because I did not expect, as the state of things then was, that it would receive that support and vigorous execution which was necessary to give it a due effect.

The people of the States at that time had been worried and fretted, disappointed and put out of humor by so many tender-acts, limitations of prices, and other compulsory methods to sorce value into paper money, and compel the circulation of it, and by so many vain funding schemes, declarations, and promises, all which issued from Congress, but died under the most zealous efforts to put them into operation and effect, that their patience was all exhausted; I say, these irritations and disappointments had so destroyed the courage and confidence of the people, that they appeared heartless and almost stupid when their attention was called to any new propositions.

Besides all this, I had objections to several clauses of the act, viz. our people were pretty well accustomed to the old bills (bad as they were) but to call them all in, and substitute a new sort in their stead, I thought would be a novelty that might have danger in it; at least, it would require great expense, time, &c. and all to very little use or benefit; for the same energy of taxation absolutely necessary to support the credit of the new bills, would be quite sufficient to make such demand for the old ones as would prevent their further depreciation, and receiving hard money in their stead at 40 for 1, would prevent their appreciation.

I could not see any benefit in the signature of the States, and seared this might bring into doubt the full powers of Congress to issue bills, or do any other like acts under their own signature.

Nor could I see any advantage arising from the interest annexed to the bills; it being payable six years afterwards would create mighty little inducement to their present circulation; but if the bills succeeded, this would greatly increase the price of their final redemption.

But I had another material objection to the act; for when I calculated the exchange, Feb. 10, 1780, it was really 40 to 1; but when this act passed, viz. the 18th of March following, the exchange had increased to 60 for 1, and consequently, all the provisions of the act which related to the exchange, became essentially wrong, and of course rendered the act itself utterly impracticable, without new provisions conformable to the exchange which really existed at the time, or making all the requisitions of the act in hard money or Continental bills of the same value, i. e. at any exchange that should exist at the time of payment.

But notwithstanding all this, when the bill was actually past, and the revenues and supplies of the year depended on its success, I readily offered my little mite of aid to give it an effectual operation, as I suppose any Member of Congress would and ought to do, when it was past, tho’ he opposed it in every stage, whilst under debate.

[* ]Nov. 19, 1779, Congress earnestly recommended to the several States, “forthwith to enact laws for a general limitation of prices, to commence from the 1st day of Feb. (then) next,” on the principle of the exchange of the currency being at 20 for 1.

The real exchange when this resolution passed, was 38 for 1; and on Feb. (when their limitation was to commence) the real exchange was 47 for 1.

Various other methods equally idle and visionary were set on foot about this time to fix the currency, such as, modifying the loan-office with many proposals of supposed advantage, exclamations and threats against such as refused to sell their property for Continental money, setting on soot subscriptions for supplying the Treasury, &c. vide Journal of Congress.