TO THE GOVERNORS OF NORTH CAROLINA, SOUTH CAROLINA, AND GEORGIA.
Office of Finance, December 19th, 1781.
Sir,
In my circular letter on that subject, I have already had the honor to transmit the requisitions of Congress, contained in their Acts of the 30th of October and 2d of November last, by which the quota of your State for the year 1782 is —— dollars, payable in quarterly payments, commencing the 1st day of April next.
The distresses which your State has lately suffered, will not, I fear, permit the collection of this quota in hard money, although the subsistence of the army will naturally call for an expenditure to a great amount in such articles as the State can furnish. The mode hitherto pursued of granting receipts and certificates by every one empowered or employed to impress or purchase, cannot but be attended with much confusion and difficulty, if not with oppression and fraud. It is the duty of those who are intrusted with the management of the public affairs, to prevent as much as possible these evils, and as much as possible to equalize and diminish those burdens, which the people must bear. It would give me great pleasure to be put in such a situation, as that I might at once contract for the supplies of the southern army; but I have not specie for the purpose; nor do I find that taxes are yet laid in the Southern States to procure it. Wherefore, I must wait yet some time, until the public treasury is replenished, until the hard money now in America gets somewhat more diffused, and until I have a prospect of receiving back from those States in hard money their quota of the public taxes.
In this situation of things, I have devised and proposed to the Delegates of the three Southern States, the following plan. To appoint a Receiver of the taxes in each State, agreeably to the Act of Congress, and to empower such Receiver to issue notes on the warrants of the General, payable in those taxes, or from the amount of them when collected. By which means those articles necessary for the consumption of the army may be purchased, and the quota of the State be thereby paid.
The Delegates of North and South Carolina thought the plan eligible, but one of the Delegates of Georgia was disinclined to that part of it, which requires the previous passing of a law to raise the quota of taxes called for by the United States. I am this morning informed, that upon a reconsideration of the matter, a majority of the Delegates of South Carolina are also of opinion, that it would be better not to make the enacting such a law an indispensable part of the system. I am very sorry for this circumstance, because, as all the Delegates from the three States mentioned, approve of the plan in other respects, I did expect their warm recommendation of it to their respective Legislatures; for your Excellency will perceive at a single glance, that it originated in the sincere desire of relieving those States, and has that relief for its object, as far as the public service of the United States will possibly permit.
Those gentlemen who object to making a tax bill the preliminary to any issues of the notes, have proposed as an expedient, a law, promising the payment of the notes when taxation shall become practicable, compelling the receipt of them in payment as specie, and limiting the prices of those articles, which the army may want. This is done to obviate two objections, which are supposed to be against taxation, that the state of the country will not admit of the collection, and that those who have no property left but lands, cannot pay the taxes without extreme distress.
Before I go into any detailed observations on these subjects, I beg leave to state one general reason why I must insist on the tax law, even if in other respects I should have no material objections to the expedient proposed. As Superintendent of the Finances of the United States, it is my duty to urge a compliance with the requisitions of Congress, and, therefore, to facilitate that compliance; but I should betray the trust reposed in me, if by any expedient whatever, I assisted in eluding those requisitions. With me, therefore, the propriety of passing the tax bill can admit of no question; and in consequence, my orders are precise, to prevent the issue of a single note, until such bills shall have been enacted, and effectual provision made for the collection.