TO THE COUNT DE VERGENNES.
Paris, June 22d, 1780.
Sir,
I this day acknowledge the receipt of the letter, which you did me the honor to write to me on the 21st.
I have the honor to agree with your Excellency in opinion, that it is the intention of Congress to redeem all their paper bills which are extant, at an exchange of forty for one, by which means, the two hundred millions of dollars, which are out, will be reduced to about five millions.
I apprehend, with your Excellency, that it was necessary for the Congress to put themselves in a condition to defray the public expenses. They found their currency to be so depreciated, and so rapidly depreciating, that a further emission sufficient to discharge the public expenses another year, would have, probably, depreciated it to two hundred for one; perhaps, would have so totally discredited it, that nobody would have taken it at any rate. It was absolutely necessary, then, to stop emitting. Yet it was absolutely necessary to have an army to save their cities from the fire, and their citizens from the sword. That army must be fed, clothed, paid, and armed, and other expenses must be defrayed. It had become necessary, therefore, at this time, to call in their paper; for there is no nation that is able to carry on war by the taxes, which can be raised within the year. But I am far from thinking, that this necessity was the cause of their calling it in at a depreciated value, because I am well convinced that they would have called it in at a depreciated value, if the British fleet and army had been withdrawn from the United States, and a general peace had been concluded. My reason for this belief is, the evident injustice of calling it in at its nominal value, a silver dollar for a paper one. The public has its rights as well as individuals; and every individual has a share in the rights of the public. Justice is due to the body politic, as well as to the possessor of the bills; and to have paid off the bills at their nominal value, would have wronged the body politic of thirtynine dollars in every forty, as really as if forty dollars had been paid for one, at the first emission in 1775, when each paper dollar was worth, and would fetch a silver one.
I beg leave to ask your Excellency, whether you judge that the Congress ought to pay two hundred millions of silver dollars, for the two hundred millions of paper dollars which are abroad? I presume your Excellency will not think that they ought; because I have never met with any man in America or in Europe, that was of that opinion. All agree, that Congress ought to redeem it at a depreciated value. The only question then, is, at what depreciation? Shall it be at seventyfive, forty, thirty, twenty, ten, or five, for one? After it is once admitted, that it ought to be redeemed at a less value than the nominal, the question arises, at what value? What rule? I answer, there is no other rule of justice than the current value, the value at which it generally passes from man to man. The Congress have set it at forty for one; and they are the best judges of this, as they represent all parts of the continent where the paper circulates.
I think there can be little need of illustration; but two or three examples may make my meaning more obvious. A farmer has now four thousand dollars for a pair of oxen, which he sells to a commissary to subsist the army. When the money was issued in 1775, he would have been glad to have taken one hundred. A laborer has now twenty dollars a day for his work; five years ago, he would have been rejoiced to have received half a dollar. The same with the artisan, merchant, and all others, but those who have fixed salaries, or money at interest. Most of these persons would be willing to take hard money for his work and his produce, at the rate he did six years ago. Where is the reason, then, that Congress should pay them forty times as much as they take of their neighbors in private life?