Revolutionary Finance (1781)

BY GENERAL GEORGE WASHINGTON

NEW WINDSOR, 15 January, 1781. . . .

IN compliance with your request I shall commit to writing the result of our conferences on the present state of American affairs, in which I have given you my ideas with that freedom and explicitness, which the objects of your commission, my entire confidence in you, and the exigency demand. To me it appears evident:

1st. That, considering the diffused population of these States, the consequent difficulty of drawing together its resources, the composition and temper of a part of the inhabitants, the want of a sufficient stock of national wealth as a foundation for revenue, and the almost total extinction of commerce, the efforts we have been compelled to make for carrying on the war have exceeded the natural abilities of this country, and by degrees brought it to a crisis, which renders immediate and efficacious succors from abroad indispensable to its safety.

2dly. That, notwithstanding, from the confusion always attendant on a revolution, from our having had governments to frame and every species of civil and military institutions to create, from that inexperience in affairs necessarily incident to a nation in its commencement, some errors may have been committed in the administration of our finances, to which a part of our embarrassments are to be attributed; yet they are principally to be ascribed to an essential defect of means, to the want of a sufficient stock of wealth, as mentioned in the first article, which, continuing to operate, will make it impossible by any merely interior exertions to extricate ourselves from those embarrassments, restore public credit, and furnish the funds requisite for the support of the war.

3dly. That experience has demonstrated the impracticability long to maintain a paper credit without funds for its redemption. The depreciation of our currency was in the main a necessary effect of the want of those funds; and its restoration is impossible for the same reason, to which the general diffidence that has taken place among the people is an additional and, in the present state of things, an insuperable obstacle.

4thly. That the mode, which for want of money has been substituted for supplying the army, by assessing a proportion of the productions of the earth, has hitherto been found ineffectual, has frequently exposed the army to the most calamitous distress, and, from its novelty and incompatibility with ancient habits, is regarded by the people as burthensome and oppressive, has excited serious discontents, and in some places alarming symptoms of opposition. This mode has, besides, many particular inconveniences, which contribute to make it inadequate to our wants, and ineligible but as an auxiliary.

5thly. That, from the best estimates of the annual expense of the war and the annual revenues which these States are capable of affording, there is a large balance to be supplied by public credit. The resource of domestic loans is inconsiderable, because there are properly speaking few moneyed men, and the few there are can employ their money more profitably otherwise; added to which, the instability of the currency and the deficiency of funds have impaired the public credit.

6thly. That the patience of the army, from an almost uninterrupted series Of complicated distress, is now nearly exhausted, and their discontents matured to an extremity, which has recently had very disagreeable consequences, and which demonstrates the absolute necessity of speedy relief, a relief not within the compass of our means. You are too well acquainted with all their sufferings for want of clothing, for want of provisions, for want of pay.

7thly. That, the people being dissatisfied with the mode of supporting the war, there is cause to apprehend, that evils actually felt in the prosecution may weaken those sentiments which began it, founded, not on immediate sufferings, but on a speculative apprehension of future sufferings from the loss of their liberties. There is danger, that a commercial and free people, little accustomed to heavy burthens, pressed by impositions of a new and odious kind, may not make a proper allowance for the necessity of the conjuncture, and may imagine they have only exchanged one tyranny for another.

8thly. That, from all the foregoing considerations result, 1st, absolute necessity of an immediate, ample, and efficacious succor in money, large enough to be a foundation for substantial arrangements of finance, to revive public credit, and give vigor to future operations; 2dly, the vast importance of a decided effort of the allied arms on this continent, the ensuing campaign, to effectuate once for all the great objects of the alliance, the liberty and independence of these States. Without the first we may make a feeble and expiring effort the next campaign, in all probability the period to our opposition. With it, we should be in a condition to continue the war, as long as the obstinacy of the enemy might require. The former is essential to the latter; both combined would bring the contest to a glorious issue, crown the obligations, which America already feels to the magnanimity and generosity of her ally, and perpetuate the union by all the ties of gratitude and affection, as well as mutual advantage, which alone can render it solid and indissoluble.

9thly. That, next to a loan of money, a constant naval superiority on these coasts is the object most interesting. This would instantly reduce the enemy to a difficult defensive, and, by removing all prospect of extending their acquisitions, would take away the motives for prosecuting the war. Indeed, it is not to be conceived how they could subsist a large force in this country, if we had the command of the seas, to interrupt the regular transmission of supplies from Europe. This superiority, (with an aid in money,) would enable us to convert the war into a vigorous offensive. I say nothing of the advantages to the trade of both nations, nor how infinitely it would facilitate our supplies. With respect to us, it seems to be one of two deciding points; and it appears, too, to be the interest of our allies, abstracted from the immediate benefits to this country, to transfer the naval war to America. The number of ports friendly to them, hostile to the British, the materials for repairing their disabled ships, the extensive supplies towards the subsistence of their fleet, are circumstances which would give them a palpable advantage in the contest of these seas.

10thly. That an additional succor in troops would be extremely desirable. Besides a reinforcement of numbers, the excellence of French troops, that perfect discipline and order in the corps already sent, which have so happily tended to improve the respect and confidence of the people for our allies, the conciliating disposition and the zeal for the service, which distinguish every rank, sure indications of lasting harmony,—all these considerations evince the immense utility of an accession of force to the corps now here. Correspondent with these motives, the enclosed minutes of a conference between their Excellencies the Count de Rochambeau, the Chevalier de Ternay, and myself will inform you, that an augmentation to fifteen thousand men was judged expedient for the next campaign; and it has been signified to me, that an application has been made to the court of France to this effect. But if the sending so large a succor in troops should necessarily diminish the pecuniary aid, which our allies may be disposed to grant, it were preferable to diminish the aid in men; for the same sum of money, which would transport from France and maintain here a body of troops with all the necessary apparatus, being put into our hands to be employed by us, would serve to give activity to a larger force within ourselves, and its influence would pervade the whole administration.

11thly. That no nation will have it more in its power to repay what it borrows than this. Our debts are hitherto small. The vast and valuable tracts of unlocated lands, the variety and fertility of climates and soils, the advantages of every kind which we possess for commerce, insure to this country a rapid advancement in population and prosperity, and a certainty, its independence being established, of redeeming in a short term of years the comparatively inconsiderable debts it may have occasion to contract.

That, notwithstanding the difficulties under which we labor, and the inquietudes prevailing among the people, there is still a fund of inclination and resource in the country, equal to great and continued exertions, provided we have it in our power to stop the progress of disgust, by changing the present system, and adopting another more consonant with the spirit of the nation, and more capable of activity and energy in public measures; of which a powerful succor of money must be the basis. The people are discontented; but it is with the feeble and oppressive mode of conducting the war, not with the war itself. They are not unwilling to contribute to its support, but they are unwilling to do it in a way that renders private property precarious; a necessary consequence of the fluctuation of the national currency, and of the inability of government to perform its engagements oftentimes coercively made. A large majority are still firmly attached to the independence of these States, abhor a reunion with Great Britain, and are affectionate to the alliance with France; but this disposition cannot supply the place of means customary and essential in war, nor can we rely on its duration amidst the perplexities, oppressions, and misfortunes, that attend the want of them.

George Washington, Writings (edited by Worthington Chauncey Ford, New York, etc., 1891), IX, 102–109.