The Derangement of our Money Affairs. The Enormity of our public Expenditures. The Confusion in all our Departments. The Langour of our general System. The Complexity and consequent Inefficacy of our Operations. These are some, among the many, Reasons which have induced Congress to the Appointment of a Superintendent of Finance. I enclose you Copies of their Resolutions on that Subject, with such other Papers as will fully explain to you my Appointment and Powers.1

The Use of this Office must be found, in a Progress towards the Accomplishment of these two capital Objects; the Raising a Revenue with the greatest Convenience to the People, and the Expenditure of it with the greatest Oeconomy to the Public.2

The various Requisitions of Congress to the several States, none of them entirely complied with, create a considerable Ballance in Favor of the united States; and the Claim of this Ballance is delivered over to me as Revenue; while on the other Hand the dangerous Practice of taking Articles for the public Service and giving Certificates to the People, has created a very general and very heavy Debt. The Amt. of this Debt is swelled beyond all reasonable Bounds, nor can the Extent of it be at present estimated. These Things need no Explanation, but it may be proper to observe, that, if the Certificates were not in my Way, there is still an infinite Difference between the Demands of a Ballance from the States, and an effectual Revenue. The latter can be obtained only in Consequence of wise Laws generally adopted, and as generally executed with Vigor and Decission. Were all that is necessary on these Heads accomplished, Something further would still remain to be done in Order that the Produce of Taxes should be subject to the sole and absolute Disposition of the united States or of their Officers. To you, who are acquainted with republican Governments, it is unnecessary to observe on the Delays which will arise, the Obstacles which will be raised, and the Time which will be consumed in placing the Revenue of America on a proper Footing. Yet this is absolutely necessary before Credit can be established, and the indispensable Supplies obtained on Terms of Oeconomy.3

To reform our Expenditure is an Object of equal Importance with the other; and it is in some Degree within my Power, as you will perceive it to have been subjected to my Authority. But even here I find myself entramelled by the Want of necessary Funds. To contract (for Instance) with any one in Order to obtain Bread for our Troops, requires the previous Certainty of being able to make the stipulated Payments; and so, in every other Case, I shall be unable to act with Decission unless I have the Command of Money. On the other Hand, the People will bear, with great Reluctance, the necessary Emposition of heavy Burthens, while they can perceive any Want of Arrangement Method or Oeconomy in the administration of their Affairs.

If for a Moment we suppose, that this Country, amid the Confusions of a Revolution and the Rage of War, could be governed with all the Regularity, Wisdom and Prudence of antient and peaceable Nations; Yet we must be convinced, that no annual Revenue she is able to raise, could equal the annual Expence, in an offensive War against so powerful a Nation as that which we now contend with. A great Ballance therefore must remain, and it must be provided for by Loans or Subsidies.

To expect Loans within the united States, presupposes an Ability to lend, which does not exist in any considerable Numbers of the Inhabitants. The personal Property not immediately engaged either in Commerce or the Improvement of Lands was never very considerable. Little as it was, it has been greatly diminished by the pernicious Effects of a depreciating Medium. This Expedient which was adopted in the beginning from Necessity, and too pertinaciously adhered to in the Sequel; has not only exhausted the Funds of those who might have been willing to trust the united States, but it has so wounded our public Credit, that even the Will would be wanting if the Ability existed, which as I said before, it really does not.

While we neither have Credit or Means at Home, it is idle to expect much from Individuals abroad. Our foreign Credit must be nurtured with Tenderness and Attention, before it can possess any great Degree of Force; and it must be fed by substantial Revenue before we can call it into active Exertion, or derive beneficial Effects from it’s Application.

All reasonable Expectation therefore is narrowed down to the friendly Interposition of those Sovereigns who are Associates in the War. From Holland we can properly ask Nothing; nor is she I beleive in Capacity to grant, it if we did ask. The active Efforts of France require all the Resource of that great Nation, & of Consequence, the pecuniary Aid which she affords us can but little advance the general Cause, however it may releive our immediate Distress.4 We must then turn our Eyes to Spain, and we must ask either Loans or Subsidies to a very considerable Amount. Small Sums are not worth the Acceptance. They have the Air of Obligation, without affording Releif. A small Sum therefore is not an Object of the united States, for they do not mean to beg Gratuities, but to make rational Requests.5

As Congress have impowered you to remove the Obstacles which have hitherto impeded your Negotiations;6 you will doubtless proceed with prudent Dispatch, in forming the important Treaties which are to be the Basis of our national Connections. Your own Integrity, and the Dispositions which you certainly feel, as the true Representative of your Sovereign, to gratify the Wishes of his catholic Majesty, will give you just Claim to the Confidences and friendly Support of his Ministers. And on the other Hand, his Majesty’s known Piety and Justice will certainly induce him to facilitate a permanent Union between the two Countries, & to overturn that Power whose impious Ambition is known, felt & detested throughout the habitable Globe.

Having a perfect Confidence in the Wisdom of his Majesty’s Ministers, I must request that you will submit to their Consideration the Reasons which operate in Favor of the Advances we expect. In doing this, it will immediately strike you and them, that the Enemy carries on the Operations against us at an Expence infinitely greater than that by which they are opposed. By enabling us therefore to increase our Resistance, and redouble our offensive Efforts, the British will be reduced to the Necessity of increasing their Force in america, or of submitting beneath a decided Superiority. Either must be fatal to them. In the first Instance, they will be crushed by the Weight of Expence; and in the second, they must (while they loose an actual Force, and part forever with the Object in Contest) feel the increased Weight of the american Arms, and make Head against those Resources applied to a Marine, which are now consumed in Land Operations.

Money ought therefore to be supplied to us from the Havanna;7 which will at the same Time save the Risque of transporting it to Europe, while, as I have already observed, it must when employed among us absolutely ruin the common Enemy. For when once they are driven from the united States, they must at a considerable Expence defend, or at a great Loss relinquish the Rest of their american Possessions; & in either Case, the Resources of this Country will enable France and Spain to carry on Operations for the Subjection of the British Islands.8

With Respect to our Finance, I am further to observe, that the Resolutions of Congress of the 18th. of March 1780, have neither been so regularly adopted by the States as was hoped and expected, nor been productive of those Consequences which were intended.9 It is unnecessary to travel into the Causes or to explain the Reasons of this Event. The Fact is clear. The new Money is depreciated; and there is the strong Evidence of Experience to convince us, that the issuing of Paper at present must be ineffectual. Taxation has not yet been pursued to that Extent which was necessary; neither is it reasonable to expect that it should. Time has been required under all Governments, to accustom the People by Degrees to bear heavy Burthens. The People of America have so patiently endured the various Calamities of the War, that there is good Reason to expect they will not shrink at this late Hour from the Imposition of just and equal Taxes. But many Arrangements are necessary to this Purpose, and therefore an immediate pecuniary Assistance is the more necessary to us. Our Debts, under which I comprise as well those of the individual States as those of the Union, are but trifling when we consider the Exertions which have been made. The Debt I have already mentioned in Certificates is heavy, not from the real Amount, but because it is beyond what the Supplies obtained were reasonably worth, and because it impedes Taxation & impairs its Effects. But the Amount of our other Debts is so small, that a few Years of Peace would bring it within the Bounds of a Revenue, very moderate when compared with the Wealth of our Country. You well know the rapid Increase of that Wealth, & how soon it would releive us from the Weight of Debts which might be in the first Instance very burthensome, there can therefore be no Doubt that we shall be able to pay all those which it may be necessary to contract. But, as I have already observed, our great Difficulty is the Want of Means in our People and of Credit in our Government.10

It gives me however very great Pleasure to inform you, that the determined Spirit of the Country is by no Means abated either by the Continuance of the War, the Ravages of our Enemy, the Expence of Blood and Treasure we have sustained, or the Artifices Falsehoods and Delusions of an insidious Foe. These last become daily more and more contemptible in America; and it appears equally astonishing that they should longer attempt them here, or boast the Success of such Attempts in Europe. Uniform Experience has shewn the Futility of their Efforts & the Falsity of their Assertions. I know They take Advantage of every little Success, to vaunt the Prowess of their Troops and proclaim Hopes of Conquest which they do not feel. But those who know any Thing of our History or Situation, must have the utmost Contempt for all these Gasconades. It is impossible they should make Impression upon any but weak Minds, and I would hardly have thought of mentioning them, but I learn, by Letters from Spain, that Men who are uninformed, have been led into Apprehensions from Circumstances which were here considered as trivial and even favorable.

I could hardly have supposed that our Enemies had still the Folly to repeat, as I am told they do, that there is an english Party in America.11 Bribes and Deceit have induced some wicked and weak Men to join them, but when we consider the Sums they have expended, & the Falsehoods they have used, our Wonder is, not that they have got so many, but that they have gained so few. The Independence of America is considered here as established so much, that even those of equivocal Character accustom themselves to the Idea, for, the Doubt is not now whether an Acknowledgement of it will take Place, but when that Acknowledgement will be made. Our Exertions also in the present Moment, are not so much directed to establish our Liberties as to prevent the Ravages of the Enemy, abridge the Duration & Calamities of the War, and faithfully contribute to the Reduction of a Power whose Ambition was equally dangerous and offensive to every other.

All Reasoning on this Subject must be deeply enforced by paying Attention to what has happened in the southern States. The Progress of the Enemy, while in Appearance it menaced the Conquest of that extensive Region, tended only in Effect to exhaust him by fruitless Efforts so that at length a handful of Men have rescued the whole from his Possession. The Attack on Virginia (if the piratical Incursions there can deserve that Name) has been equally futile. The Commanders may indeed have enriched themselves by Plunder, and many worthy Families have been distressed. But what is the Consequence? Indignation and Resentment have stimulated even the weak and indolent to Action. The wavering are confirmed & the firm are exasperated; so that every Hour, and by every Operation, they create Enemies instead of gaining Subjects.12

Our Armies, tho not very numerous, are powerful. The regular Troops are so much improved in Discipline and the Habits of a military Life that they are at least equal to any Troops in the World. Our Militia are becoming more and more warlike, so as to supply the Want of regular Troops when the Enemy (taking Advantage of that Convenience which their Ships afford them) transfer the Scene of Action from one Place to another. The Number of the British diminishes daily, and of Consequence our Superiority becomes daily more decisive. The greatest Plenty of Subsistence is to be had for our Armies, & the Prospects from the present Harvest are beyond all former Experience. I wish I could add that Cloathing and military Stores were as abundant as those other Requisites for War. This is not the Case. Our Soldiers indeed are well armed, and in some Degree they are cloathed, we have also Amunition abundantly sufficient for the common Operations of the Field; but many of our Militia are unarmed, the Sieges which will be necessary to expel the Enemy, must make a heavy Deduction from our military Stores.

The proposed Siege of New York will soon be commenced, and it would und undoubtedly be successful, if we could maintain a decided Superiority at Sea.13 This must depend on Contingencies which are not in our Power, nor perhaps in the Power of any human Being. I am not without Hopes even if we should not possess that Superiority; but the Expence will, from the want of it, be very considerably inhanced, and this is a Circumstance which I cannot but deplore; for I repeat it again, the want of Money can alone prevent us from making the greatest Exertions. What our Exertions have already been our Enemies themselves must acknowledge, and while from insidious Views, they assert that they could not make an Impression on us with ninety thousand Soldiers and Seamen, we are certainly authorized to conclude from this Confession that these States form a considerable Ballance in the Scale against them.

I am now therefore again led to reiterate my Request of a considerable Sum of Money from Spain, for I also again repeat that small Sums are not worth our Acceptance; and I may add, they are unworthy the Dignity of his catholic Majesty. There can be no Doubt, nor will the spanish Ministry deny, that there is a very considerable Risque in transporting their Money from the new World to the old; besides that, when expended there, it necessarily runs thro the different Channels of Commerce to feed the Wants and invigorate the Forces of the Enemy. There is therefore a double Policy in expending a Part of it here, where it can not only be brought with Safety and Dispatch, but employed to an immense Advantage when compared to it’s Effects in Europe. If it be asked what advantages Spain will derive in particular during the War, and what Recompence can be made her after the Peace, I answer. That the Weakening more the common Enemy by a given Sum is in itself a great Advantage; and that to do this by sparing the Blood of spanish Subjects is an Advantage still greater. I add, that, when releived from the Enemy, we may assist her in the Reduction of the Floridas and Bahamas and perhaps of Jamaica. We shall then also be in a Situation to secure Nova Scotia, thereby depriving Great Britain of her principal Resource for Ships Timber, & enabling us to furnish that essential Article to the Navy of Spain on cheaper and better Terms than it can be had elsewhere. On this last Subject I am further to observe, that there is hardly any Thing in which the maritime Power of Spain is so much interested. For if we do not possess that Country, it will be impracticable to furnish those Supplies of Masts and Spars which both France and Spain may stand in Need of; so that, of Consequence, their positive and absolute Strength at Sea will be the less while that of the Enemy is positively and absolutely greater, the comparative Inferiority therefore will be still more considerable. Nor is this all. A Marine requires Men as well as Ships. The Fisheries & Collieries are two Pillars which support the Marine of Britain, so far forth as Seamen are required. But it is evident that the Fisheries could not long continue in her Hands, if she were deprived of Nova Scotia. Here again we are also to consider, that there is an immense Difference between that patient Resistance whose Opposition must at length weary the Enemy into granting our Independence, and those vigorous active Operations which may wrest from them their present Possessions. Money is necessary for the Latter, and I can say with Confidence that money alone is necessary.

But to return, the Advantages which will flow to Spain, at a Peace, from giving effectual Aid to our Finances now, will be in the first Place the common Compensation of Repayment, should his catholic Majesty prefer Loans to Subsidies. The having expelled the English from the Bay of Mexico & having by that Means prevented the contraband Commerce so destructive to his Revenue will be another striking Advantage which cannot have escaped the Penetration of his Ministers. But this is not all. The opening a Port in East Florida, on the Shores of the Atlantic, under proper Regulations and Restrictions, would enable us to carry on a Commerce very advantageous to Spain; because we could furnish all such Supplies of Provisions &ca as their Possessions might stand in Need of, and in Return take at that Port Cocoa Log Wood Nicaragua Wood and indeed any other Commodities, which his catholic Majesty should find it for the advantage of his Dominions to permit the Exportation of. Our Commerce with Spain is also in itself a very considerable Object. At this Moment we take from thence Wine, Oil, fruit, Silk, Cloth &ca. and, after the Conclusion of the War, our Remittances of Wheat, Corn, Fish & naval Stores will be of very great Consequence to the Commerce of that Country. Another Article of Commerce will be the Building of Ships; which can be had on cheaper & better Terms here than elsewhere: and there can be no Doubt, but that the Construction of Ships in this Country is equal, if not superior, to that in any other. Even now Ships might be built on his Majesty’s Account, tho by no Means so cheaply as in Times of Peace; besides that, as there is now no seasoned Timber in the Country, such Ships would not be durable, and therefore it might perhaps be imprudent to get any more than are immediately necessary.

To all the other Advantages which would arise to his Catholic Majesty, I may add (altho that is not so properly within my Department) the Security which his Dominions woud derive from our Guarantee. This is an Advantage which must be the more evident from a Consideration of what might have happened, had this Country continued in Union with Great Britain, & had Great Britain pursued those Schemes of universal Empire wich the Virtue and Fortitude of America first checked, and which it is the Object of the present War to frustrate.

Our Enemies, I know, allege that our Weakness is unable to withstand them, and that our Force is dangerous to Spain. The serious Refutation of such absurd Contradictions, would involve an Absurdity. It may not, however, be improper to observe that the Attention of this Country for a Century past has been, and for a Century to come most probably will be, entirely turned to Agriculture and Commerce. We must always therefore be useful Neighbours and never dangerous, except to those who may have Views of Dominion. Spain can never be in this Predicament, tho the British may and will: Their Solicitude therefore to inspire Apprehension of us, is, and ought to be, the strongest argument against entertaining them. But if this evident Reasoning did not exist, still the Conduct of Congress, with Regard to his catholic Majesty, has been so just and even generous, not only in being willing to secure his Rights, but to gratify him by foregoing their own, that there is not Room for the Shadow of Suspicion. This Conduct, I should suppose, would alone have Weight sufficient to procure what is my Object to request; if the other very cogent and conclusive Reasons for it did not apply. And, after all, if it be considered how much greater is the Interest of Spain in the vigorous Continuance of the present War, than that of any other of the Associates, I cannot permit myself one Moment to doubt of your Success. I am the more sanguine, from the Character of the Catholic King and of his Ministers for Wisdom Candor and Integrity. These Qualities will, I am sure, meet such corresponding Dispositions in the United States, that the most thorough Harmony and Coalition must inevitably take Place. This is an object of the greatest importance to both Countries. Mutual Benefits and the Reciprocation of good Offices will endear a Connection between them; and their Interests require that their Connection should be of the closest Kind.

In every Point of View, therefore, that we can consider the Subject, the Advance I have mentioned must appear alike beneficial. If the Governor of Cuba, or any other Person, were duly authorized, Stipulations might even now be entered into, for furnishing all necessary Supplies of Provisions to the Fleets and Armies of his Catholic Majesty which would certainly facilitate their Operations. The Advance of Money also by Spain, would enable the Fleets and Troops of France to subsist cheaper than at present, because it would tend to raise the Exchange here which is now too low.

Your own Good Sense will suggest to you many other forcible arguments, as well as the proper Time and Manner of applying them. It is necessary to mention, that the Sum of five Million Dollars may perhaps be sufficient for our present Emergencies;14 but if a greater Sum can be obtained we shall thereby become more extensively useful. Whatever the Grant may be, it will be proper that it be sent hither in some Spanish Ships of War from the Havannah, or advanced to us there; in which latter Case we will devise the Means of bringing it away. Whether to ask for Subsidies or Loans, as well as the Terms on which either are to be obtained; these, Sir, are Objects which you are fully competent to determine upon. I have only to wish, that your Applications may meet with that Success which I am confident you will not fail to merit. As the Means of facilitating your Views, I shall apply to the Minister of his most Christian Majesty here, to write on the same Subject to the french Ambassador at Madrid.15 The generous Conduct of France gives just Ground of Reliance on his friendly Assistance, and you are too well convinced of this not to act in the most perfect Harmony with the Servants of that Court, especially on an Occasion so important as the present. I need not stimulate your activity, by observing how precious is every Moment of Time, in those Affairs on which the Fate of Empires depend. Nor need I suggest the Importance of a Treaty, and particularly a subsidiary Treaty, with Spain, in that Moment when the Judgment of Europe is to be passed on the Fate of America. For, however impracticable it may be to subdue us, it is undoubtedly of Moment to hasten the Approach of that Period when the Acknowledgement of our Independence shall give the Blessings of Peace to so many contending Nations. To spare the present lavish Effusion of Blood and Treasure, is a serious Object with those who feel, as you do, the Emotions of Benevolence. And I am confident that the Patriotism which has inspired your Conduct, will prompt you to obtain a Peace, honorable for your Country and advantageous to her Friends. The only probable Method to effect these Things, is a thorough Union of Forces and Resources, to reduce the Pride and the Power of that aspiring Nation whose Ambition embroils the Universe— With all possible Respect I have the Honor to be Your Excellency’s most obedient and humble Servant.