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DEPRESSED CONDITION OF THE FINANCES.
test was developing into a struggle “ Exclusive of these sums obtained for bare existence. The enemy in abroad, the debts
contracted by strong force was in the very heart of arrears of army pay and commissary the country, while the Continental certificates at home, and such specific government was almost without an supplies as had been received, the exarmy, was absolutely devoid of money penditures from the federal treasury and, as Robert Morris said, its au- for the year 1780 amounted to $83,thority was almost “ reduced to a 000,000 in old tenor, and $900,000 in metaphysical idea." * Notes of new; the whole value in specie at credit were worthless and Congress about $3,000,000, a great falling off had been compelled to acknowledge from the expenditures even the last this fact, their bills of credit being year, and an indication of the rapno longer a legal tender or receivable idly declining resources of Conin payment of taxes. The early gress."'* issues were so worthless that barber On March 18, 1781, Congress called shops were papered with it.† But upon the States for an additional the darker the outlook, the greater $6,000,000, in quarterly installments, were the exertions of the patriots. the payment of which was to be in Their agents abroad were instructed money of specie value and to comto obtain loans from France, Spain mence on June 1. This was in addiand Holland, and further internal tion to the requisitions of last year taxes were were laid and apportioned
which remained to a great extent unamong the several States by whose discharged. The domestic debt now authority they were to be collected. I opinion of most men, public good was promoted.
The evils consequent on depreciation had taken of our public situation.”— See Gaillard Hunt, place and the redemption of bills of credit, at Life of Madison, p. 32; Gay, Life of Madison, p. their nominal value, as originally promised, in21.
stead of remedying the distress of the sufferers, Sumner, Financier and Finances of the would, in many cases, have increased them, by Revolution, vol. i., p. 286.
subjecting their small remains of property, to † Breck, Historical
Sketch of Continental exorbitant taxation. The money had, in a great Paper Money, in Transactions of the American
measure, got out of the hands of the original Philosophical Society, vol. iii., p. 18.
proprietors, and it was in the possession of "About this time, the old continental money, others, who had obtained it at a rate of value, by common consent, ceased to have currency. Like not exceeding what was fixed upon it by the an aged man, expiring by the decays of nature,
scale of depreciation. Nothing could afford a without a sigh or a groan, it fell asleep in the stronger proof, that the resistance of America hands of its last possessors. By the scale of to Great Britain, was grounded in the hearts of depreciation, the war was carried on five years, the people, than these events.
* The people for little more than £1,000,000 sterling, and two saw the necessity which compelled their rulers to hundred millions of paper dollars were made act in the manner they had done, and being well redeemable, by five millions of silver ones. convinced that under other circumstances, would other countries, such measures would have pro- scarcely have been expiated by the lives and duced popular insurrections, but in the United fortunes of their authors.”—Ramsay, History of States, they were submitted to without any the American Revolution, vol. ii., p. 519. tumults. Public faith was violated, but in the * Hildreth, vol. iii. p. 331.
FINANCIAL NEEDS; DEPRECIATION OF CURRENCY.
amounted to $24,000,000, specie value, making paper bills of any sort a legal to which about $5,000,000, due tender, Congress informed the States abroad, were to be added the amount that the requisitions called for must being estimated under the scale of be met in "solid coin" depreciation adopted by Congress, equivalent. The “new tenor " havthe outstanding old tenor having ing now sunk to 4 for 1, it was not sunk to 75 for 1. Beside this annual an equivalent, and as further issues interest to the amount of $1,000,000 would entail heavy loss on the govwas already payable on the liqui- ernment, Congress advised that they dated portion of this debt.
be stopped. Thus rejected by its Including $500,000 of outstanding creator, the paper money, of which commissary certificates, it was esti- over $100,000,000 in “old tenor " mated that the requirements for the remained outstanding, declined more year 1781 would be $19,500,000, rapidly than ever, falling to 100, 125, specie value, to meet which the 200, 500 and finally to 1,000 for it, treasury officials counted on receiv- being considered so valueless that ing $9,000,000 from the unpaid re- nobody would hold it for a day, even quisitions of the last year, and three the soldiers resolving not to take of the quarterly installments of the it. It soon disappeared from circula$6,000,000 requisition lately made tion.* upon the States, which would give The management of financial $4,500,000. Beside this, $3,200,000 affairs by means of a committee had were counted upon from the ex- now proven to be prejudicial to the change of outstanding “ old tenors interests of the country, and Confor bills of the new emission; $500,- gress therefore determined to intro000 in commissary certificates would duce a thorough reform.
It was be produced by outstanding paper decided to place one man at the head money requisitions; and it was hoped of the financial department who that the proposed import duty of 5 should be responsible to the country per cent. would yield another $500,- for the proper handling of its affairs. 000. But the estimated income did As there was a great disorder and not reach the amount of the estimated waste in the finances, it was felt that expenditure, and when the time came the country could not secure a better for the actual transactions, the
person to make the desired change greater part of the income was not than Robert Morris, a man whose realized. The "old tenor "
paper pure morals, ardent patriotism and continued to depreciate, carrying vast knowledge of financial matters with it the "new tenor." In May, eminently fitted him for this im1781, besides recommending to the States that they repeal any laws Hildreth, vol. iii., pp. 359–361.
MORRIS TAKES CHARGE OF FINANCES; BANK ESTABLISHED.
portant station. Accordingly, on Bank of North America."* By borFebruary 20, 1781, Morris
was rowing in the name of the governelected superintendent of finances by ment through this bank, and pledging the unanimous vote of the States, for payment the taxes as yet uncolwith the exception of Massachusetts, lected, Morris was enabled to anticiwhich abstained from voting.* On pate them and to command a ready May 14 Morris was installed in officet supply of money. Though the govand on the 17th laid before Congress ernment credit had failed, Morris a plan for a national bank, & con- used his own private credit which cerning which he and Alexander was considered excellent.t It has Hamilton həd corresponded freely been reported that large sums of Morris planned to capitalize the bank money were advanced by him out of at $400,000 in gold and silver, with his own personal resources, but these power to increase this amount if nec- legends may be rejected as essary, its notes constituting the founded. currency of the country and to be But America was indebted no less accepted as specie for duties and to her foreign representatives than taxes by the Nation and by every
she was to the exertions of the offiState.ll Congress, however, had not
cials at home. Franklin, who in the power to legalize such a bank and September, 1778, had been appointed the proposition was submitted to the
minister plenipotentiary to France, States. The vote was carried by New obtained from Louis XVI. a gift of Hampshire, New Jersey and the five
6,000,000 livres (over $1,100,000) besouthernmost States, while Massa
side a loan of 4,000,000 livres (over chusetts voted in the negative, Penn
$740,000). Holland, however, refused sylvania was divided, and Madison alone of the Virginia members op
* Oberholtzer, p. 108.
† Oberholtzer, p. 157. : posed it as being beyond the powers
I Sumner, Robert Morris, pp. 61-63. For other of the Confederation. The bank details regarding Morris and his financial opera
tions, see W. G. Sumner, The Financier and the was incorporated as the “ President,
Finances of the Revolution (2 vols., New York, Directors and Corporation of the 1891); Michael Nourse, Robert Morris, the
Financier in Banker's Magazine, vol. ix., (1860);
Charles H. Hart, Robert Morris, the Financier of Journals of Congress, vol. iii., p. 580; Ober- the American Revolution, in Pennsylvania Magaholtzer, Life of Robert Morris, pp. 65-73; Sum- zine, vol. i.; Robert Waln, Jr., Robert Morris, ner, Robert Morris, p. 53 et seq.
vol. v. of Sanderson's Lives of the Signers of the † Though he did not take the oath of office Declaration of Independence (Philadelphia, as Superintendent of Finance until June 27. 1823); Redwood Fisher, Revolutionary Reminis
† Journals of Congress, vol. iii., p. 624; Dip- cences connected with the life of Robert Morris; lomatic Correspondence, vol. vii., pp. 444–449; · Lawrence Lewis, Jr., A History of the Bank of Oberholtzer, p. 74.
North America (Philadelphia, 1882), the Letters | Oberholtzer, p. 96 et seq.
to Robert Morris, 1775–1782, in Collections of the $ Bancroft, vol. vi., pp. 26-27.
New York Historical Society for 1878.
FOREIGN LOANS; REVOLT OF THE PENNSYLVANIA LINE.
to loan the United States on their should terminate before the three own credit, but the French monarch years had elapsed.* Consequently, guaranteed the loan to the States- when they were not allowed to return General, and on this security Con- home at the end of their terms, they gress obtained 10,000,000 livres became highly disgruntled, which (about $1,850,000) from Holland. * condition was further aggravated by Spain refused to advance any money their sufferings from extreme want. f unless the United States would re- They determined to obtain a redress nounce the navigation of the Missis- of grievances, and, having seized six sippi; but, as before stated, this field-pieces, marched off toward proposition was peremptorily re- Princeton, intending to go to Philajected.
delphia to lay their situation before Before the beneficent effect of Congress. In an effort to bring the these measures was felt, an event had mutineers to submission, General occurred which threatened the most Wayne interposed and threatened to serious consequences. On January shoot the most audacious, but hardly 1, '1781, about 1,300 soldiers of the had he cocked his pistol when several Pennsylvania Line, because of non- bayonets were at his breast, the men payment of salaries, etc., paraded exclaiming, “We respect you, Genunder arms, refused to obey their eral; we love you, but you are a dead officers and committed a number of man if you fire! Do not mistake us, outrages.f They had enlisted for a we are not going to the enemy; on the term of three years, or during the contrary, were they to come out, you war, and the officers contended that, should see us fight under you with as according to the agreement, the sol- much resolution and alacrity as ever; diers should serve to the end of the
* L. C. Hatch, The Administration of the war, no matter how far distant that
American Revolutionary Army, in Harvard end might be; while, on the other
Historical Studies, vol. x., pp. 125-127; Thacher,
Military Journal, pp. 240–241. There were sevhand, the soldiers maintained that
eral other causes for discontent among the Pennthey had engaged to serve three sylvania troops, for details of which see Stillé
Wayne and the Pennsylvania Line, pp. 166–181, years only, or during the war if it
† Wayne said in a letter: “Poorly clothed, Sparks, Life of Franklin, p. 468; Parton, badly fed, and worse paid, some of them not Life of Franklin, vol. ii., pp. 389–391; Fisher, having received a paper dollar for near twelve Struggle for American Independence, vol. ii., pp. months; exposed to winter's piercing cold, to 447-449; Morse, Life of Franklin, chap. xii. See drifting snows and chilling blasts, with no protecalso the various letters of Franklin, Vergennes, tion but old worn-out coats, tattered linen overalls and others in Hale, Franklin in France, and but one blanket between three men. especially vol. i., pp. 455–456, vol. ii.,
The delicate mind and eye of humanity are hurt, † See Wayne's letter to Washington, in Sparks, very much hurt, at their visible distress and Correspondence of the Revolution, vol. iii., pp. private complainings.”— See Irving, Life of 192-193; Heath's Memoirs, pp. 248–249 (Ab- Washington, vol. iv., p. 224. batt's ed.)
Stille, Wayne, pp. 240-243.
MUTINEERS SURRENDER; OUTBREAK OF JERSEY TROOPS.
but we wish a redress of grievances He was perfectly well aware that the and will no longer be trifled with.” * grounds for discontent were plenty, Wayne, however, argued the matter and was disposed to be as lenient with the mutineers and finally in- as possible with men who had been duced them to put their demands in driven to an extremity. Neverthewriting. The demands consisted of a less, he realized the significance of request that all who had served three
the example of the Pennsylvania years should be discharged, an imme- troops in inciting similar outbreaks, diate payment of all arrears due and therefore took effectual measthem, and that future pay be in specie ures to quell every such attempt. He to all who remained in the service.t selected a body of troops in the HighAt Princeton the mutineers were met lands, in whom he placed complete by a committee of Congress, joined reliance, and held them in readiness by President Joseph Reed of Penn- to march at a moment's notice. sylvania, and a satisfactory compro- Hardly had the organization of this mise was reached, whereupon the force been completed, when on Janmutineers gave up their arms. The
uary 20 a part of the New Jersey British commander had hoped to Brigade rebelled and made demands profit by this revolt, and emissaries similar to those to which Congress were sent among the discontented had yielded in the case of the Penntroops, making them all sorts of in- sylvania troops. The Jersey soldiers ducements to join the British army. marched to Chatham, but WashingThese offers were declined with in- ton immediately dispatched General dignation, as the troops had no idea Robert Howe against them to crush of turning traitors to their country, the revolt by force, unless the men merely wishing justice at the hand should unconditionally surrender and of Congress.||
return to duty. Washington's orders This movement had caused Wash
were promptly executed, and having ington no little concern and anxiety. been taken by surprise, the Jersey
soldiers immediately yielded. Two * Quincy's Memoir of Major Shaw, p. 85.
of the ringleaders were shot and the † Lossing, Field-Book of the Revolution, vol. i., pp. 312–313.
spirit of mutiny was thus effectually | See the Diary of the Revolt in Pennsylvania subdued.* Archives, series ii., vol. xi., pp. 631-674. See also Stillé, Wayne, p. 243 et seq.; and the letters in Sparks, Correspondence of the Revolu- * Hildreth, vol. iii., pp. 338–339; Sparks' ed. tion, vol. iii., pp. 194–199.
of Washington's Writings, vol. vii., pp. 380-381, || Hildreth, vol. iii., pp. 336–338; Heath's App. no. x.; Thacher, pp. 244–245. On these Memoirs, pp. 249–250; Thacher, Military Jour. revolts see also Gordon, American Revolution, nal, pp. 242–243; Carrington, Battles of the vol. iv., pp. 16–22 (ed. 1788); Stillé, Life of Revolution, pp. 536–538; Sullivan's and Dick. Wayne, pp. 239-262; Ford's ed. of Washington's inson's letters in Sparks, Correspondence of the Writings, vol. ix., pp. 87–98, 100-102, 117-119, Revolution, vol. iii., pp. 199, 205–207.
121-123; Bolton, The Private Soldier Under