Your distance, and the difficulty of conveying letters to you, make it proper at times to take a retrospective view of what has passed, and by that means of supplying in part such despatches as may have miscarried.

The last year closed with important advantages gained over the southern States. The winter was unproductive of any events in this country that merit your attention.

The alteration in the British system of warfare in this country, in consequence of their reduced strength, and in pursuance of the victory obtained by the opposition in the House of Commons, has rendered the campaign inactive on the part of the enemy, and the few posts they possessed were so well fortified and garrisoned as to render an attack by us, without the assistance of a fleet, very hazardous. The reasons we had to hope for such assistance kept us from taking measures to act offensively in proper time. But though the summer has passed off without any brilliant military exploit, it has by no means been unemployed. Such attention has been paid during these moments of leisure to the discipline of the troops and recruiting the army, that they are at this time more numerous than they have been at any period during the war. So perfect are the officers and men in every military manœuvre, that we may, I believe, without vanity, boast to have an army not inferior to any in Europe. We should not know how to give this praise to our troops, but from the facility with which every foreigner gives it, notwithstanding national prejudices.

Among the military events which mark this year, are the evacuation of Savannah, and the measures taken for abandoning Charleston. The poor wretches, whom fear or interest led to join the enemies of their country, find themselves sufficiently punished to merit even our pity. With blasted characters and ruined fortunes, they are seeking new habitations under the line or near the pole. Numerous cargoes of them are sent to the West Indies and Halifax, to St Augustine and Penobscot.

But it is of moment to you, to be acquainted with the political character of your country and their sentiments with respect to the faith that is due to treaties. By knowing how far you can rely upon them yourself, you acquire a degree of confidence in making engagements for them, and you can venture to pronounce upon their conduct on every trying occasion, without waiting for intelligence from this side of the Atlantic. You need not be told, that the British nation, suffering themselves to be deceived by their wishes, and misled by the misrepresentations of those that were interested in the continuance of the war, have believed, or at least pretended to believe, that a majority of the people wished well to their cause. Neither our forms of governments, which gave their partisans annually an opportunity to declare their sentiments, and if most numerous to change their rulers; nor the number that repaired to their standard when hoisted in eleven of the Thirteen States; neither the determined and successful opposition hitherto given to the forty thousand heralds, which they sent to proclaim their champion, encourage his friends, and bid defiance to his foes, had sufficed to cure them of this delusive hope. They still imagined that a few kind words would close the wounds that they had seven years been widening. General Carleton was sent over to speak to them. So little doubt had he that they would be well received, that he was about to send out Mr Morgan, his Secretary, without soliciting a passport, and was much surprised when Colonel Livingston, who was then a prisoner, informed him that he would be stopped at the first post; and still more so, when upon a subsequent application, he found that Congress refused to have any intercourse with him; and referred all negotiations to Europe, where they could treat in conjunction with their allies.

But nothing serves more strongly to show the little confidence the people of this country have in the promises of Great Britain, and their fixed determination not to break their engagements with their allies, than the resolutions passed on the subject by the respective legislatures without consulting each other, and independent of directions from Congress; it proves beyond contradiction, to those who know how our legislatures are formed, and the frequency of their elections, that these sentiments are the sentiments of the people; and that, too, at a time when they most sincerely wished for peace. It anything was wanting to give the last blow to British credit in this country, it was their late change in their administration; from which Mr Fox and others are excluded, for avowing the sentiments that their Commissioners, Digby and Carleton, solemnly pronounced in a public letter to be those of their Sovereign.

The other general objects, which it is necessary for you to be acquainted with, are the commerce, the finances, and the government of this country. The first suffered considerably in the beginning of this year, by the great vigilance of the British cruisers, but has since been very flourishing and successful. None of those wants are known, which prevailed at the beginning of this controversy. Our stores and warehouses are amply supplied with everything, that can administer to the necessities or luxuries of the people. The West Indies and Europe furnish a ready market for all we raise beyond what is necessary for our own consumption. The embargoes and restrictions, which were once thought necessary to enable us to obtain a scanty supply for our army, have been unknown among us for three years past; and yet a most ample provision has been made both for our troops and those of our allies. Our trade with the Havana has furnished considerable sums in specie; paper is entirely out of circulation, if we except the bank paper, which, being payable at sight in specie, is equal to it in value. So extensive has this circulation been, that the managers, not long since, published a distribution of the first half year's dividend at four and a half per cent, notwithstanding a variety of expenses to which they had been put, in the first organization of the bank. So that the profit upon bank stock, is generally estimated at about ten per cent per annum, which will, I should conceive, when known in Europe, be a strong inducement with many people, those particularly who have thoughts of coming to this country, to lodge their money here.

I would not, however, have you think the flourishing state of the bank (which is the property of a private company, under the protection of government) a certain indication of the happy situation of our own finances. This is by no means the case. The demand for money to replace the property, which the enemy have destroyed, to repair buildings, and the profits which commerce yields, together with the difficulty of forming new systems of taxation in a country, which has hitherto scarce known a tax, beyond what was necessary for the support of its own frugal governments, renders the collection of a direct tax extremely difficult. Duties and excises must be levied upon some general system, so as to prevent one State from depending on another. This has been attempted by a five per cent duty on all imports, but it has hitherto been defeated by the refusal of Rhode Island to come into the plan. Congress are about to send down a committee of their own body to urge them to a compliance with this measure. Should it be attended with success, a very considerable revenue will arise from that source. Public credit, which has so frequently tottered during the revolution, will be established upon a firm and lasting basis.

The evacuation of the southern States, which we have reason to believe has taken place by this time, though we have yet received no official information of it, will greatly increase our resources. Their exports will consist in the most valuable articles at foreign markets, and must occasion such an influx of wealth, as will enable them to contribute to the public expenses, which they have hitherto been in a great measure incapable of doing.

Before you left this, I believe most of the States had formed their governments. Massachusetts has since completed hers upon plans similar to those of the other States. That of New Hampshire is printed for the approbation of the people, and I am told will shortly be agreed to.