TO ELBRIDGE GERRY.
Office of Finance, August 26th, 1783.
Sir,
In compliance with your request, I shall not only give the information which appears to have been the object of Mr Clarke's letter, but recapitulate also the observations which I had the honor to make on what you mentioned as the object of the committee. And first, for the information desired, I can answer only in general terms, that I believe the various engagements entered into previous to the end of 1781, were under the faith of requisitions then existing. Since that period, I know of only two requisitions for current service, both of them founded on estimates. The first was of eight millions for the service of 1782, and the second was of two millions, for part of the service of 1783. All the engagements of my administration are on the faith of these latter requisitions.
The first object you mentioned was to alter the mode of settling accounts, so far as the requisitions previous to 1781 are concerned, and only to calculate the actual payments, or advances by the States, with the interest, so that the whole, being formed into one sum, may be afterwards apportioned among the States. To which plan, among other objections, I look the liberty to state the following. First, there is no evident necessity for taking this step, and therefore it will be prudent to omit it; because in such cases government risk every unforeseen danger that may result, and always render their affairs more complicated. Secondly, the measure may be misunderstood, and occasion clamors, which will indispose some to adopt the other measures recommended by Congress; which objection though it ought not to weigh in competition with what is evidently proper and right, must nevertheless be attended to in things of more doubtful complexion. Thirdly, there would arise from it a degree of irregularity; for the particular accounts being now all opened in the treasury books, by the authority of the late Board of the Treasury, it appears most natural to continue them in their present form, until the final settlements. Fourthly, all the information necessary to enable Congress to decide on the accounts when settled will then be in their power; for the accounts will contain, on one side, the compliances of the State with the requisitions, together with all other advances which they have made for the public service, and on the other side will be the amount of the various requisitions. Whenever therefore Congress on such full view of the subject, shall think proper to remit the whole, or any part of the requisitions, entries will be made in the treasury books accordingly. Fifthly, it would be rather premature to make the decision proposed before (by a settlement of accounts) all the proper materials are brought into view; and until the States have adopted the proposed measures for funding the public debts. Because, sixthly, it is conceived that the various requisitions were adequate to the necessary service; and that although it may perhaps be wise eventually to convert the whole expenditure of the war into the form of a debt, in order thereby to prevent the disputes which might arise on the apportionments, still it must be remembered, that this step cannot be taken until funds are obtained. Until that period, therefore, it is perhaps as well to leave the requisitions; if it be only to show the States why they are called on for revenues now, viz. because they would not or could not furnish supplies before. But, lastly, it might prove dangerous under present circumstances to take any step whatever with these requisitions. Only partial compliances have been made. Some States therefore adhere to some requisitions, and some to others, according to the real or supposed situation of their accounts. To go no farther, it would hardly be prudent to hazard a dispute with Massachusetts, by relinquishing the requisitions of March, 1780, or with some other States by a useless attempt to enforce them.
The other object, Sir, which you appeared to have in view, is to relinquish so much of the requisitions since 1781, as might leave only the sum necessary for fulfilling present engagements. Now although the resolution, which seems to have been in contemplation, would not have had this effect, because the requisition for the service of 1782 was made on estimates, yet I shall assign a few objections to the plan. The reason urged in favor of it is, that the demand was so much beyond the abilities of the States, and the necessities of the service, that it must excite a despair of compliance, and a diffidence in the prudence of those by whom it was made. To which it may well be replied, that the ability of the States is not so hastily to be decided on, because it has never been put to the proof by prudent and vigorous taxation, because other countries not so wealthy bear much heavier taxes without inconvenience, and because these very States have borne it, though under another name; for the depreciation of the paper money, which wiped away not less than twelve millions annually, was in effect a tax to that amount.
But further, even admitting the supposed inability, still the requisition, if not excessive as to its object, ought of necessity to have been made. Because the States could by no other mode of reasoning be convinced of the necessity of establishing that credit, which can alone prevent such great efforts. And because if such requisitions had not been made, some branch of service must have been left unprovided for by Congress, on the very face of their own measures, which would have been a palpable absurdity.
And this leads to the second point, viz. that the demand was beyond the necessities of the service. Before this position is assumed it must be considered, not only what expense was actually paid, but also what was probable when the demand was made, and what of the expense incurred still remains due. And first, as to what was paid; we shall find that the military collections in the Southern States went to a considerable sum, which is not yet brought into the public accounts, as there was no money to defray it, owing to the noncompliance of the States. Secondly, the probable expense was far beyond the actual, because of the misfortunes of our allies, which rendered it necessary lay aside the proposed offensive measures, and which could not, if not laid aside, have been carried into effect, by reason of the lamentable deficiencies of the public revenue. And thirdly, a very considerable part of the expense of 1782 is necessarily paid in 1783, and a far more considerable part remains unpaid. For instance, almost the whole amount of the pay of the army; an army by no means so numerous as that which the General had called for, and Congress resolved on. And it would have been indeed very strange, if Congress had asked only five millions from the States, including therein every other article, but the pay of the army on whose exertions everything depended.
Having said thus much on what has been assumed with respect to these estimates, and which I can defend the more hardily, as by accident they did not pass through my office, I proceed now to state the objections against remitting them. And first, let it always be kept in view, that the States not having granted the funds necessary for securing to our army the interest of their dues, that army has a just right to insist that the requisition for the principal be not relinquished, until such grants be made. Secondly, it must be remembered, that Congress have not yet any standard for making a final apportionment, and therefore it must be very useless now, to touch requisitions which must speedily be retouched again. Thirdly, the States which have complied more fully than others, would undoubtedly, in such cases, relax from, and perhaps totally withhold their efforts; from the conviction that deficient States would always be able to obtain from Congress a vote favorable to themselves, and consequently unfavorable to others; which idea, grounded too much on past experience, is one great cause of that inattention which led us to the brink of ruin. Fourthly, this mischief would not only arise among the States, but it would exist also amidst and within them, for a relaxation of the whole quota would naturally render new interior apportionments necessary. Not to mention the delays and disputes thereby occasioned, the remainder of what would then be to pay would be thrown of course upon remote counties, where the powers of government are weak, the collections languid, and the revenue in every respect feeble and unproductive. Great deficiencies would arise from these causes, both in the periods and the amount of payments, and either would be sufficient to cause another national bankruptcy. But, fifthly, there can be no reason for the measure proposed; because it is much more simple to leave the present demands for ten millions of dollars upon their present footing, until the apportionment of that whole sum can be made finally to pay (from whatever is brought in) the amount of all existing engagements, to go on (should collections be sufficient) and pay off a part of our debts, and finally to make no new requisitions, until these be completely complied with. By that period Congress will be able to deride with accuracy on the sums necessary for annual service; they will be able to apportion their demands accordingly, and, what is of infinite importance, they will have set an example of persisting regularly in a measure, until a full and final compliance.
I am, Sir, respectfully, &c.
ROBERT MORRIS.