I am not surprised to find that the contractors apply with their paper, in the first instance, to the Receivers and Collectors. This I expected, because much of that paper is not fit for other purposes. Some of it, however, which is payable to the bearer, is calculated for circulation; which you observe is not so general as otherwise it might have been, by reason of the largeness of the sums expressed in the notes. Mr. Duer’s letters contain the same sentiment.
In issuing this paper, one principal view was to facilitate the payment of taxes by obviating the too general (though unjust) complaint of the want of a circulating medium. In substituting paper to specie, the first obstacle to be encountered, was the total diffidence which had arisen from the late profusion of it. Had a considerable quantity been thrown into the hands of that class of the people, whose ideas on the subject of money, are more the offspring of habit than of reason, it must have depreciated. That this apprehension was just, is clear from this fact, that the paper I first issued, and the Bank paper which came out after it, did depreciate from ten to fifteen per cent. in the Eastern States, notwithstanding all the precautions which were used. If I had not taken immediate measures to create a demand for it on the spot, and to stop issues to that quarter, its credit would have been totally lost for a time, and not easily restored. Besides that, the quantities which were pouring in from thence would have done mischief here. Confidence is a plant of very slow growth; and our political situation is not too favorable to it. I am, therefore, very unwilling to hazard the germ of a credit, which will, in its greater maturity, become very useful. If my notes circulate only among mercantile people, I do not regret it, but rather wish that the circulation may, for the present, be confined to them, and to the wealthier members of other professions. It is nothing but the greater convenience, which will induce people to prefer any kind of paper to the precious metals; and this convenience is principally felt in large sums. Whenever the shopkeepers, in general, discover that my paper will answer as a remittance to the principal ports, and will be readily exchanged by the Receivers, they will as readily exchange it for other people. When the people, in general, find that the shopkeepers receive it freely, they will begin to look after it, and not before. For you must know, that whatever fine plausible speeches may be made on this subject, the farmers will not give full credit to money, merely because it will pay taxes: for that is an object they are not very violently devoted to. But that money which goes freely at the store and the tavern, will be sought after as greedily as those things which the store and the tavern contain. Still, however, your objection remains good; that the traffickings in which the greater part of the community engage, do not require sums so large as twenty dollars. This I shall readily acknowledge: but you will observe there is infinitely less danger that large notes, which go only through the hands of intelligent people, will be counterfeited than small ones, which come to the possession of illiterate men. When public credit is firmly established, the little shocks it receives from the counterfeiters of paper money, do not lead to material consequences; but, in the present ticklish state of things, there is just ground of apprehension. Besides this, the value of paper will depend much upon the interchanges of it for specie: and these will not take place when there is a circulation of small paper. Lastly, I have to observe, that until more reliance can be placed on the revenues required, I dare not issue any very considerable amount of this paper, lest I should be run upon for more than I could answer: and as the circulation of what I dare issue, by increasing the general mass, enables people (so far as it goes) more easily to get hold of other money, it consequently produces, in its degree, that object of facilitating taxation which I had in view.
I am, Sir,
Your most obedient, humble servant,
Robert Morris.
Alexander Hamilton, Esq.,
Receiver for New-York.
HAMILTON TO DE NOAILLES.
1782.
Esteem for your talents and acquirements is a sentiment which, from my earliest acquaintance with you, my dear Viscount, I have shared in common with all those who have the happiness of knowing you; but a better knowledge of your character has given it, in my eyes, a more intrinsic merit, and has attached me to you by a friendship founded upon qualities as rare as they are estimable. Averse as I am to professions, I cannot forbear indulging this declaration, to express to you the pleasure I felt at receiving (after an inexplicable delay) the letter you were so obliging as to write me before your departure from Boston. It was of that kind which is always produced by those attentions of friends we value; which, not being invited by circumstances, nor necessitated by the forms of society, bespeak the warmth of the heart. At least my partiality for you makes me fond of viewing it in this light, and I cherish the opinion.
I was chagrined to find that you left us with an intention not to return. Though I should be happy if, by a removal of the war, this country should cease to be a proper theatre for your exertions, yet, if it continues to be so, I hope you will find sufficient motives to engage you to change your resolution. Wherever you are, you will be useful and distinguished; but the ardent desire I have of meeting you again, makes me wish America may be your destination. I would willingly do it in France, as you invite me to do; but the prospect of this is remote. I must make a more solid establishment here before I can conveniently go abroad. There is no country I have a greater curiosity to see, or which I am persuaded would be so interesting to me as yours. I should be happy to renew and improve the valuable acquaintances from thence, which this war has given me an opportunity of making; and, though I could not flatter myself with deriving any advantage from it, I am persuaded it is there I should meet with the greatest number of those you describe, who, etc.: but considerations of primary importance will oblige me to submit to the mortification of deferring my visit.
In the mean time I should be too much the gainer by communication with you, not gladly to embrace the offer you so politely make for writing to each other.
The period, since you left us, has been too barren of events to enable me to impart any thing worth attention. The enemy continue in possession of Charleston and Savannah, and leave us masters of the rest of the country. General Greene has detached Wayne to Georgia; but I believe his views do not extend beyond the mere possession of the country. It is said the Assemblies of the two invaded States are about meeting, to restore the administration of government. This will be a step to strengthening the hands of General Greene, and counteracting the future intrigues of the enemy. Many are sanguine in believing that all the southern posts will be evacuated, and that a fleet of transports is actually gone to bring the garrisons away. For my part, I have doubts upon the subject. My politics are, that while the present ministry can maintain their seats, and procure supplies, they will prosecute the war on the mere chance of events; and that while this is the plan, they will not evacuate posts so essential as points of departure; from whence, on any favorable turn of affairs, to renew their attack on our most vulnerable side. Nor will they relinquish objects that would be so useful to them, should the worst happen in a final negotiation. Clinton, it is said, is cutting a canal across New-York island, through the low grounds, about a mile and a half from the city. This will be an additional obstacle; but if we have, otherwise, the necessary means to operate, it will not be an insurmountable one. I do not hear that he is constructing any other new works of consequence. To you, who are so thoroughly acquainted with the military posture of things in this country, I need not say that the activity of the next campaign must absolutely depend on effectual succors from France. I am convinced we shall have a powerful advocate in you. La Fayette, we know, will bring ‘the whole house’ with him if he can.