Robert Morris to Alexander Hamilton,
Richard Peters, and Nathaniel Gorham1
Office of Finance [Philadelphia] 15th. May 1783
In Consequence of the Conversation2 which passed between us this Morning I shall give you the best information in my Power as to the State of my Department and the Resources I can command.
You have in the enclosed Paper Number one an Account of Receipts and Expenditures from the Commencement of the Year to the End of the last Month3 by which it appears that there is an Advance on Credit to the Amount of near six hundred thousand Dollars exclusive of what may appear in Mr. Swanwicks4 Accounts for the Month of April. A large Sum is also due on Genl. Green’s Drafts and the Contractors are to be paid in this Month for the Supplies of January last. At the End of this Month therefore that Anticipation must necessarily be much increased. As will appear from the slightest Reflection after what is to be said of our Resources.
These are either foreign or domestic. As to the first I enclose the Copy of the last Letter I have received from Mr. Grand5 and I have to add to what is contained in that Letter that the Day it was received my Drafts on him over and above those mentioned in it amounted to Three million and forty thousand two hundred and seventy eight Livres and six deniers. I have directed therefore Mr. Barclay6 to pay over to Mr. Grand any Monies which may be in his Possession and I have directed Messrs. Willink &ca. of Amsterdam7 to do the same after deducting what may be necessary to pay the Interest of their Loan falling due the first of June next. But as I have no Accounts how much has been borrowed since the End of January and as all which had been borrowed before was disposed of I cannot determine how far they can come in Aid of Mr. Grand neither can I tell until the Receipt of his Accounts what Aid he may stand in need of. In these Circumstances I am obliged to leave about eighteen hundred thousand Livres (which remain of a Sum placed in the Hands of Messrs. Le Couteulx8 for answering Drafts intended thro Havanna to answer any Deficiency of other Funds to pay my Drafts on Mr. Grand. These then Gentlemen are all the foreign Resources except what the french Court may advance on the late Resolutions of Congress9 and you will see by the enclosed Translation of a Letter from the Minister of france what little Hope is to be entertained from that Quarter.10
Our domestic Resources are twofold first certain Goods and other Property such as Horses Waggons &ca. These latter will produce very little and the former are (by the Peace) very much reduced in Value and from the nature of the Goods themselves they are chiefly unsaleable. Very little Reliance therefore can be placed on this first Dependance. The Amount I cannot possibly ascertain for I do not yet know (and cannot until the opening of them now in Hand shall be compleated) the Kinds Quality and Situation. Some are damaged those which were deemed most Saleable have been tried at Vendue and went under the first Cost and much the greater Part will certainly not sell at a fourth of their Value.
The only Remaining Resource is in the Taxes and what they may amount to, it is impossible to tell. But you have enclosed an Account of what they yielded the four first Months of this Year11 and you will see from thence that if all Expence had ceased on the first day of this Month the Anticipations already made would not have been absorped by the same Rate of Taxation in eight Months more.
Now then Gentlemen you will please to consider that if your Army is kept together they will consume as much in one Month as the Taxes will produce in two and Probably much more. To make them three Months Pay will require I suppose at least six hundred thousand Dollars and every Day they continue in the Field lessens the Practicability of sending them Home satisfied. The Anticipations of Revenue are threefold two of which appear as to their Effects in the public Accounts and one very considerable one tho it produces great Relief is not seen. It consists in the Drawing of Bills on me for the public Service by different Persons and at different Usances. I imagine that these Amount at the present Moment to one hundred thousand Dollars. The other Anticipations consist in Loans from the Bank or the issuing of my own Notes. As to the first of these it is limited in its Nature by the Capital of the Bank which being small will not admit of great Deductions and it depends much upon Circumstances whether the Bank will go to the Extent which they may go. If they find the Revenues increasing and the Expences diminishing they will; otherwise they certainly will not. As to the Notes I issue (and which form the greater Part of my Anticipations) these have also a certain Limit to exceed which would be fatal. I must not so extend that Circulation as that I shall be unable to pay them when presented for that would totally destroy their Credit and of Course their Utility.
Now Gentlemen if any Thing of this Sort should take place before the Army are disbanded you will see at once that they could be fed no longer and must of Course disband themselves. I will not dwell on the Consequences but I will draw one clear Conclusion which you have doubtless by this time anticipated viz. that unless they are disbanded immediately the Means of paying them even with Paper will be gone. And this Sentiment I have not only delivered to you but to a former Committee as well as to many individual Members of Congress.
But Gentlemen when I speak of disbanding the Army I beg to be understood as meaning to reserve a sufficient Garrison for West Point. And on this Subject I pray to be indulged in a View of our Political and military Situation as far as relates to this capital Object of my Department. And first as to our political Situation I conceive that we are at Peace. It is true that the definitive Treaty is not that we know of compleated but it is equally true that all the other beligerent Powers have been disarming for months past and I presume they are at least as well acquainted with the State of things as we are. To express Doubts of the Sincerity of Britain on this Subject is I know a fashionable but in my Opinion a very foolish Language. We have the best Evidence of their Sincerity which the Nature of Things will admit for we know they are unable to carry on the War and we see & feel that they are passing every Act and doing everything in their Power to conciliate our Affections. Expressions of Doubts as to their Sincerity if intended to foster Enmity against them will fail of the Effect and produce the direct Contrary for every Body will soon learn to consider them as unjustly suspected and their Ministers will take Care to inculcate and enforce the Sentiment.
As to our military Situation some of the Troops in the Southern States have already mutinied12 the principal Part of them are ordered away and since the floridas are ceded to Spain it follows that those Troops which may remain in the Southern States will have to operate against the Spaniards if they operate at all. So that every Man except those under the Generals immediate Command and the little Garrison of fort Pitt are in fact disbanded to every Purpose but that of Expence.
The Prisoners are some of them going and the rest gone into New York so that in a few Days the Enemy will be able to do every Thing which they could do if the greater Part of our Army were gone Home. For they could not take West Point if it is properly Garrisoned and they could ravage the Country in spite of our Army when theirs shall be all collected.
Our Situation therefore seems to be this. We are keeping up an Army at a great Expence and very much against their Inclinations for a meer Punctilio and by that Means incapacitating ourselves from Performing what they begin to consider as a kind of Engagement taken with them. I shall detain you no longer on this Subject but must repeat one Observation which is that unless the far greater Part of our Expences be immediately curtailed the Object Congress had in View by their Resolutions of the second Instant13 cannot possibly be accomplished.
I have the Honor to be Gentlemen your most obedient and humble Servant
|The honorable||Mr. Hamilton||a Committee of Congress|
LS, Papers of the Continental Congress, National Archives; LC, Robert Morris Papers, Library of Congress.
1. On May 9, 1783, Congress appointed a committee consisting of H, Peters, and Gorham “to consider and report the means of reducing expenditures in all other Departments as well as the military.” The committee was directed to confer with the Superintendent of Finance and the Secretary at War (JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , XXIV, 337).
2. Morris recorded in his Diary under the date May 15 the following account of the interview:
“The Honble. Mr. Gorham and Mr. Hamilton, two Members of a Committee of Congress for conferring with the Secretary of War, The Secretary of foreign Affairs and myself relative to disbanding the Army, met with the said Ministers at this Office this Morning. I opened the Business and stated very fully the Necessity of disbanding the Army in Order to get clear of an Expence which our Resources are unequal to, and which cannot be supported many Months at any rate, but which if continued any longer, will consume the only Means now left for making a payment to the Army when disbanded. The Gentlemen of the Committee seemed perfectly satisfied of the Necessity of Disbanding the Army on Principles of Oeconomy but opposed to it on Principles of Policy in which the Honble. Secretary of foreign Affairs joins them. The Secretary at War said little, and I related an Observation which he had made to me a few Days before in favor of disbanding the Army directly, viz: That they would not continue in the field under their present Enlistments if the War was to break out again; but that in such a Case we must begin entirely a New. The Conclusion of the Conference is that I am to State the Reasons resulting from the Situation of our Finances which induce an immediate disbanding of the Army in writing to the Committee.” (Robert Morris Papers, Library of Congress.)
3. The enclosure is in the Papers of the Continental Congress, National Archives.
4. John Swanwick was an official in the office of the Superintendent of Finance.
5. Ferdinand Grand was a French banker who handled most of the financial operations of the United States in France during the American Revolution. Grand’s letter is in the Papers of the Continental Congress, National Archives.
6. Thomas Barclay, American consul in France, was appointed by Congress in November, 1782, to settle its accounts in Europe.
7. The Amsterdam banking house of Jan and Wilhem Willink was employed in the financial operations of the United States in Holland.
8. I. L. and C. Le Couteulx and Company was a French banking house which aided the United States in its financial operations abroad.
9. The resolution of Congress to which Morris is referring was dated May 2, 1783, and requested the French King to add three million livres to the amount he had granted the Americans.
10. The Chevalier de La Luzerne, French Minister to the United States, had written to Morris on March 15 warning him that the French King would not lend the United States more money until Congress established substantial revenues. It was to this letter rather than to one discussing the resolution of May 2 (see note 9) that Morris is referring. La Luzerne’s letter is printed in Wharton, Revolutionary Diplomatic Correspondence description begins Francis Wharton, ed., The Revolutionary Diplomatic Correspondence of the United States (Washington, 1889). description ends , VI, 303–05.
11. The enclosure is in the Papers of the Continental Congress, National Archives.
12. Morris is presumably referring to the mutiny of Colonel George Baylor’s regiment in Virginia. Benjamin Harrison, governor of Virginia, informed the Virginia delegates in Congress of such a mutiny in a letter which he wrote on May 31, 1783 (Burnett, Letters description begins Edmund C. Burnett, ed., Letters of Members of the Continental Congress (Washington, 1921–1938). description ends , VII, 157).