A Letter Addressed to the Abbe Raynal, on the Affairs of North America, in Which the Mistakes in the Abbe's Account of the Revolution of America Are Corrected and Cleared Up

by Thomas Paine

I know it must be extremely difficult to make foreigners understand the nature and circumstances of our paper money, because there are natives who do not understand it themselves. But with us its fate is now determined. Common consent has consigned it to rest with that kind of regard which the long service of inanimate things insensibly obtains from mankind. Every stone in the bridge, that has carried us over, seems to have a claim upon our esteem. But this was a corner-stone, and its usefulness cannot be forgotten. There is something in a grateful mind, which extends itself even to things that can neither be benefited by regard, nor suffer by neglect: But so it is; and almost every man is sensible of the effect.

But to return. The paper money, though issued from Congress under the name of dollars, did not come from that body always at that value. Those which were issued the first year, were equal to gold and silver. The second year less; the third still less; and so on, for nearly the space of five years; at the end of which, I imagine, that the whole value at which Congress might pay away the several emissions, taking them together, was about ten or twelve millions pounds sterling.

Now, as it would have taken ten or twelve millions sterling of taxes, to carry on the war for five years, and, as while this money was issuing and likewise depreciating down to nothing, there were none, or very few valuable taxes paid; consequently the event to the public was the same, whether they sunk ten or twelve millions of expended money, by depreciation, or paid ten or twelve millions by taxation; for as they did not do both, and chose to do one, the matter, in a general view, was indifferent. And therefore, what the Abbe supposes to be a debt, has now no existence; it having been paid, by every body consenting to reduce it, at his own expence, from the value of the bills continually passing among themselves, a sum, equal to nearly what the expence of the war was for five years.

Again.—The paper money having now ceased, and the depreciation with it, and gold and silver supplied its place, the war will now be carried on by taxation, which will draw from the public a considerable less sum than what the depreciation drew; but as, while they pay the former, they do not suffer the latter, and as, when they suffered the latter, they did not pay the former, the thing will be nearly equal, with this moral advantage, that taxation occasions frugality and thought, and depreciation produced dissipation and carelessness.

And again.—If a man's portion of taxes comes to less than what he lost by the depreciation, it proves the alteration is in his favour. If it comes to more, and he is justly assessed, it shews that he did not sustain his proper share of depreciation, because the one was as operatively his tax as the other.

It is true, that it never was intended, neither was it foreseen, that the debt contained in the paper currency should sink itself in this manner; but as by the voluntary conduct of all and of everyone it has arrived at this fate, the debt is paid by those who owed it. Perhaps nothing was ever so much the act of a country as this. Government had no hand in it. Every man depreciated his own money by his own consent, for such was the effect which the raising of the nominal value of goods produced. But as by such reduction he sustained a loss equal to what he must have paid to sink it by taxation; therefore the line of justice is to consider his loss by the depreciation as his tax for that time, and not to tax him when the war is over, to make that money good in any other person's hands, which became nothing in his own.

Again.—The paper currency was issued for the express purpose of carrying on the war. It has performed that service, without any other material change to the public, while it lasted. But to suppose, as some did, that at the end of the war, it was to grow into gold and silver, or become equal thereto, was to suppose that we were to get two hundred millions of dollars by going to war, instead of paying the cost of carrying it on.

But if any thing in the situation of America, as to her currency or her circumstances, yet remains not understood, then let it be remembered, that this war is the public's war; the people's war; the country's war. It is their independence that is to be supported; their property that is to be secured; their country that is to be saved. Here, government, the army, and the people, are mutually and reciprocally one. In other wars, kings may lose their thrones and their dominions; but here, the loss must fall on the majesty of the multitude, and the property they are contending to save. Every man being sensible of this, he goes to the field, or pays his portion of the charge as the sovereign of his own possessions; and when he is conquered, a monarch falls.

The remark which the Abbe, in the conclusion of the passage, has made respecting America contracting debts in the time of her prosperity (by which he means, before the breaking out of hostilities), serves to shew, though he has not yet made the application, the very great commercial difference between a dependant and an independent country. In a state of dependence, and with a fettered commerce, though with all the advantages of peace, her trade could not balance herself, and she annually run into debt. But now, in a state of independence, though involved in war, she requires no credit; her stores are full of merchandise, and gold and silver are become the currency of the country. How these things have established themselves, it is difficult to account for: but they are facts, and facts are more powerful than arguments.

As it is probable this letter will undergo a republication in Europe, the remarks here thrown together will serve to show the extreme folly of Britain, in resting her hopes of success on the extinction of our paper currency. The expectation is at once so childish and forlorn, that it places her in the laughable condition of a famished lion watching for prey at a spider's web.