The providing of supplies, is the pivot of every thing else (though a well-constituted army would, not in a small degree, conduce to this, by giving consistency and weight to Government). There are four ways, all of which must be united: A foreign loan; heavy pecuniary taxes; a tax in kind; a Bank founded on public and private credit.
As to a foreign loan, I dare say Congress are doing every thing in their power to obtain it. The most effectual way will be to tell France, that, without it, we must make terms with Great Britain. This must be done with plainness and firmness; but with respect, and without petulance; not as a menace, but as a candid declaration of our circumstances.
We need not fear to be deserted by France. Her interest and honor are too deeply involved in our fate; and she can make no possible compromise. She can assist us, if she is convinced it is absolutely necessary; either by lending us, herself, or by becoming our surety, or by influencing Spain. It has been to me astonishing, how any man could have doubted, at any period of our affairs, of the necessity of a foreign loan. It was self-evident, that we had not a fund of wealth in this country capable of affording revenues equal to the expenses. We must then create artificial revenues, or borrow. The first was done; but it ought to have been foreseen that the expedient could not last, and we should have provided in time for its failure.
Here was an error of Congress. I have good reason to believe, that measures were not taken, in earnest, early enough to procure a loan abroad. I give you my honor, that from our first outset, I thought as I do now, and wished for a foreign loan; not only because I foresaw it would be essential, but because I considered it as a tie upon the nation from which it was derived, and as a mean to prop our cause in Europe.
Concerning the necessity of heavy pecuniary taxes, I need say nothing; as it is a point in which every body is agreed. Nor is there any danger, that the product of any taxes, raised in this way, will overburthen the people, or exceed the wants of the public. Indeed, if all the paper in circulation were drawn annually into the treasury, it would neither do one nor the other.
As to a tax in kind, the necessity of it results from this principle: that the money in circulation is not a sufficient representative of the productions of the country; and, consequently, no revenues, raised from it as a medium, can be a competent representative of that part of the products of the country which it is bound to contribute to the support of the public. The public, therefore, to obtain its due, or satisfy its just demands, and its wants, must call for a part of those products themselves. This is done in all those countries which are not commercial: in Russia, Prussia, Denmark, Sweden, etc., and is peculiarly necessary in our case.
Congress, in calling for specific supplies, seem to have had this in view; but their intention has not been answered. The States, in general, have undertaken to furnish supplies by purchase; a mode, as I have observed, attended with every inconvenience, and subverting the principle on which the supplies were demanded; the insufficiency of our circulating medium as a representative for the labor and commodities of the country. It is therefore necessary that Congress should be more explicit; should form the outlines of a plan for a tax in kind, and recommend it to the States as a measure of absolute necessity.
The general idea I have of a plan, is, that a respectable man should be appointed by the State, in each county, to collect the taxes and form magazines; that Congress should have, in each State, an officer to superintend the whole; and that the State collectors should be subordinate and responsible to them. This Continental Superintendent might be subject to the general direction of the Quarter-Master-General, or not, as might be deemed best; but if not subject to him, he should be obliged to make monthly returns to the President at War, who should instruct him what proportion to deliver to the Quarter-Master-General. It may be necessary, that the Superintendents should sometimes have power to dispose of the articles in their possession, on public account; for it would happen, that the contributions, in places remote from the army, could not be transported to the theatre of operations without too great expense; in which case it would be eligible to dispose of them, and purchase, with the money so raised, in the countries near the immediate scene of war.
I know the objections which may be raised to this plan; its tendency to discourage industry, and the like. But necessity calls for it. We cannot proceed without it: and less evils must give place to greater. It is, besides, practised with success in other countries, and why not in this? It may be said, the examples cited are from nations under despotic governments; and that the same would not be practicable with us. But I contend, where the public good is evidently the object, more may be effected in governments like ours, than in any other. It has been a constant remark, that free countries have ever paid the heaviest taxes. The obedience of a free people to general laws, however hard they bear, is ever more perfect than that of slaves to the arbitrary will of a prince. To this may be added, that Sweden was always a free government; and is so now, in a great degree, notwithstanding the late revolution.
How far it may be practicable to erect a Bank on the joint credit of the public and of individuals, can only be certainly determined by the experiment. But it is of so much importance, that the experiment ought to be fully tried. When I saw the subscriptions going on to the Bank established for supplying the army, I was in hopes it was only the embryo of a more permanent and extensive establishment. But I have reason to believe I shall be disappointed. It does not seem to be at all conducted on the true principles of a Bank.