Philadelphia, July 13th, 1781.
Sir,
The unanimous appointment to the Superintendency of our Finances, with which Congress have honored me, and my conviction of the necessity that some one person should endeavor to introduce method and economy into the administration of affairs, have induced me, though with reluctance, to accept that office. Mr Jay will receive by this conveyance, and forward to you, copies of those resolutions and letters which may be necessary to explain my appointment and powers.
I wish I could as readily effect, as I most ardently desire, the accomplishment of all proper arrangements. Thoroughly convinced that no country is truly independent, until, with her own credit and resources, she is able to defend herself and correct her enemies, it shall be my constant endeavor to establish our credit and draw out our resources in such manner, that we may be little burdensome, and essentially useful to our friends.
I am sure I need not mention to you the importance of collecting a revenue with ease, and expending it with economy. As little need I detail the time, the authority, the ability, the favorable circumstances, that must combine for these purposes. But I think that I may assert, that the situation of a country just emerging from dependence and struggling for existence, is peculiarly unfavorable; and I may add, that this country, by relying too much on paper, is in a condition of peculiar disorder and debility. To rescue and restore her, is an object equal to my warmest wishes, though probably beyond the stretch of my abilities.
Success will greatly depend on the pecuniary aid we may obtain from abroad; because money is necessary to introduce economy, while, at the same time, economy is necessary to obtain money; besides that a greater plenty of solid circulating medium is required to support those operations, which must give stability to our credit, fruitfulness to our revenue, and activity to our operations. Among those things, which, after the experience and example of other ages and nations, I have been induced to adopt, is that of a national bank, the plan of which I enclose. I mean to render this a principal pillar of American credit, so as to obtain the money of individuals for the benefit of the Union, and thereby bind those individuals more strongly to the general cause by the ties of private interest. To the efficacy of this plan, as well as to the establishment of a Mint, which would also be of use, a considerable sum of money is necessary, and, indeed, it is indispensably so for many other purposes.
Be not alarmed, Sir, from what I have said, with the apprehension that I am about to direct solicitations to the Court of Versailles; which, after the repeated favors they have conferred, must be peculiarly disagreeable. On the contrary, as I am convinced that the moneys of France will all be usefully employed in the vigorous prosecution of the war, by her own fleets and armies, I lament every sum which is diverted from them. Our necessities have indeed called for her aid, and perhaps they may continue to do so. Those calls have hitherto been favorably attended to, and the pressure of our necessities has been generously alleviated; nor do I at all doubt that future exigencies will excite the same dispositions in our favor, and that those dispositions will be followed with correspondent effects. But I again repeat my wish, at once to render America independent of, and useful to her friends.
With these views, I have directed Mr Jay to ask a considerable sum from the Court of Madrid, to be advanced us at the Havana, and brought thence by us, if it cannot conveniently be landed here from Spanish men-of-war.[34] I say a considerable sum, because, as I have declared to him, I do not wish to labor under the weight of obligation without deriving from it any real benefit; and because I consider the advance of small sums rather as a temporary palliation than a radical remedy. Our disorders are such, that the former can be of no use, and it would be better to desist in a desultory defence, than to put on the delusive appearances of a vigor we do not feel; for this lulls the people into a dangerous security, and softens those hopes of the enemy, which give duration and extent to the war. It is the disorder of our finances, which have prevented us from a powerful co-operation with our allies, and which have enabled the enemy to linger on our coasts with the dregs of a force once formidable; and it is from this cause that they have been permitted to extend the theatre, and multiply the victims of their ambition.
America alone will not derive benefit from the advances which Spain may make to her. All the associates in the war will feel the consequential advantages. The expense of the American war now hangs a heavy weight about the neck of Britain, and enfeebles her on that element, which she called her own. An increase of that expense, or the loss of her posts here, must necessarily follow from additional efforts on our part, and either of these must be a consequential benefit to those who are opposed to her. France will derive a small immediate benefit from it, as she will thereby get more money here for her bills of exchange, than she can at present procure. But it is not so much from any advantage, which may be expected to that kingdom, or from any motives of interest, as from the generosity and magnanimity of the Prince, that we hope for support. I will not doubt a moment, that at your instance, his Majesty will make pressing representations in support of Mr Jay's application, and I hope that the authority of so great a Sovereign, and the arguments of his able Ministry, will shed auspicious influence on our negotiations at Madrid.
From the best returns I have been able to collect, and which are in some measure imperfect, from the confusions and disasters of the Southern States, I find that there are about seven millions two hundred thousand dollars due on certificates, which bear an interest of six per cent, payable in France, at the rate of five livres for every dollar. Many causes have conspired to depreciate the certificates, notwithstanding the interest is so well secured, and has been punctually paid. This depreciation is so great, that they are daily offered for sale at a very considerable discount, which is attended with two pernicious consequences; one, that a considerable expense is unnecessarily incurred, and the other, that the public credit is unnecessarily impaired. If I had the means, therefore, I would remove this evil by purchasing in the certificates; and to procure the means, I am to pray that you would state this matter fully to the Ministers of his Most Christian Majesty. The interest being guarantied by the Court of France, they now pay for this purpose, two millions one hundred and sixty thousand livres annually; a sum, which in less than ten years, would pay a debt of fifteen millions of livres at five per cent interest. With fifteen millions of livres, however, prudently managed, the whole of these certificates might be paid. I am sure it is unnecessary to dwell on the advantages, which would result from making such a loan for this purpose, and, I trust, that if this matter is stated to M. Necker, that enlightened Minister will co-operate in the plan, to the utmost of his ability. I again repeat, that I do not wish to lay any burdens on France; but this proposal is calculated to relieve us both; and, in any case, the expense to France will be the same. Should it be adopted, I must request the earliest notice, that my operations may commence; and, in any case, I hope that secrecy will be observed, for the most evident reasons.