The Continentalist No. IV1
[Fishkill, New York, August 30, 1781]
The preceding numbers are chiefly intended to confirm an opinion, already pretty generally received, that it is necessary to augment the powers of the confederation. The principal difficulty yet remains, to fix the public judgment, definitively, on the points, which ought to compose that augmentation.
It may be pronounced with confidence, that nothing short of the following articles can suffice.
1st, THE POWER OF REGULATING TRADE, comprehending a right of granting bounties and premiums by way of encouragement, of imposing duties of every kind, as well for revenue as regulation, of appointing all officers of the customs, and of laying embargoes, in extraordinary emergencies.
2d, A moderate land-tax* throughout the United States, at a specific rate per pound, or per acre, granted to the FOEDERAL GOVERNMENT in perpetuity, and, if Congress think proper, to be levied by their own collectors.
3d, A moderate capitation tax‡ on every male inhabitant above fifteen years of age; exclusive of common soldiers, common seamen, day-labourers, cottagers and paupers; to be also vested in perpetuity, and with the same condition of collection.
4th, The disposal of all unlocated land, for the benefit of the United States (so far as respects the profits of the first sale and the quit-rents) the jurisdiction remaining to the respective States in whose limits they are contained.
5th, A certain proportion of the product of all mines, discovered, or to be discovered, for the same duration and with the same right of collection, as in the second and third articles.
6th, The appointment of all land (as well as naval) officers of every rank.
The three first articles are of IMMEDIATE NECESSITY; the three last would be of great present but of much greater future utility; the whole combined would give solidity and permanency to the union.
The great defect of the confederation is, that it gives the United States no property, or in other words, no revenue, nor the means of acquiring it, inherent in themselves, and independent on the temporary pleasure of the different members; and power without revenue in political society is a name. While Congress continue altogether dependent on the occasional grants of the several States, for the means of defraying the expences of the FOEDERAL GOVERNMENT, it can neither have dignity vigour nor credit. CREDIT supposes specific and permanent funds for the punctual payment of interest, with a moral certainty of a final redemption of the principal. In our situation it will probably require more, on account of the general diffidence, which has been excited by the past disorder in our finances. It will perhaps be necessary, in the first instance, to appropriate funds for the redemption of the principal† in a determinate period, as well as for the payment of interest.
It is essential, that the property in such funds should be in the contractor himself, and the appropriation dependent on his own will; if instead of this the possession, or disposal of them, is to float on the voluntary and occasional concurrence of a number of different wills, not under his absolute controul, both the one and the other will be too precarious to be trusted.
The most wealthy and best established nations are obliged to pledge their funds to obtain credit; and it would be the height of absurdity in us, in the midst of a revolution, to expect to have it on better terms. This credit being to be procured through Congress, the funds ought to be provided, declared, and vested in them. It is a fact, that besides the want of specific funds, a circumstance which operates powerfully against our obtaining credit abroad, is, not a distrust of our becoming independent, but of our continuing united; and with our present confederation the distrust is natural. Both foreigners and the thinking men among ourselves, would have much more confidence in the duration of the union, if they were to see it supported on the foundation here proposed.
There are some among us ignorant enough to imagine, that the war may be carried on without credit; defraying the expences of the year with what may be raised within the year. But this is for want of a knowledge of our real resources and expenses. It may be demonstrated, that the whole amount of the revenue, which these States are capable of affording, will be deficient annually five or six millions of dollars, for the support of civil government and of the war. This is not a conjecture hazarded at random, but the result of experiment and calculation;2 nor can it appear surprising, when it is considered, that the revenues of the United Provinces equal to these States in population, beyond comparison superior in industry, commerce and riches, do not exceed twenty five millions of guilders, or about nine millions and an half of dollars. In times of war, they have raised a more considerable sum; but has been chiefly by gratuitous contributions of rich individuals; a resource we cannot employ, because there are few men of large fortunes in this country, and these for the most part in land. Taxes in the United Provinces are carried to an extreme, which would be impracticable here; not only the living are made to pay for every necessary of life; but even the dead are tributary to the public for the liberty of interment at particular hours. These considerations make it evident, that we could not raise an equal amount of revenue in these States; yet in seventy-six, when the currency was not depreciated, Congress emitted for the expences of the year fourteen millions of dollars. It cannot be denied, that there was a want of order and œconomy, in the expenditure of public money, nor that we had a greater military force to maintain at that time, than we now have; but, on the other hand, allowing for the necessary increase in our different civil lists, and for the advanced prices of many articles, it can hardly be supposed possible to reduce our annual expence very much below that sum. This simple idea of the subject, without entering into details, may satisfy us, that the deficiency which has been stated is not to be suspected of exaggeration.
Indeed nations the most powerful and opulent are obliged to have recourse to loans, in time of war; and hence it is, that most of the States of Europe are deeply immersed in debt. France is among the number, notwithstanding her immense population, wealth and resources. England owes the enormous sum of two hundred millions sterling. The United Provinces, with all their prudence and parsimony, owe a debt of the generality of fifty millions sterling, besides the particular debts of each province. Almost all the other powers are more or less in the same circumstances.
While this teaches us how contracted and uninformed are the views of those who expect to carry on the war, without running in debt; it ought to console us, with respect to the amount of that which we now owe, or may have occasion to incur, in the remainder of the war. The whole, without burthening the people, may be paid off in twenty years after the conclusion of peace.
The principal part of the deficient five or six millions must be procured by loans from private persons, at home and abroad.
Every thing may be hoped, from the generosity of France, which her means will permit; but she has full employment for her revenues and credit, in the prosecution of the war on her own part. If we judge of the future by the past, the pecuniary succours from her must continue to be far short of our wants: And the contingency of a war on the continent of Europe makes it possible, they may diminish rather than increase.
We have in a less degree experienced the friendship of Spain in this article.
The government of the United Provinces, if disposed to do it, can give us no assistance. The revenues of the Republic are chiefly mortgaged for former debts. Happily it has extensive credit, but it will have occasion for the whole to supply its own exigencies.
Private men, either foreigners, or natives, will not lend to a large amount, but on the usual security of funds properly established. This security Congress cannot give, till the several States vest them with revenue, or the means of revenue for that purpose.
Congress have wisely appointed a Superintendant of their Finances;3 a man of acknowledged abilities and integrity, as well as of great personal credit and pecuniary influence. It was impossible, that the business of finance could be ably conducted by a body of men, however well composed or well intentioned. Order in the future management of our monied concerns, a strict regard to the performance of public engagements, and of course, the restoration of public credit may be reasonably and confidently expected from Mr. Morris’s administration, if he is furnished with materials upon which to operate—that is, if the fœderal government can acquire funds as the basis of his arrangements. He has very judiciously proposed a national bank, which, by uniting the influence and interest of the monied men with the resources of government, can alone give it that durable and extensive credit of which it stands in need. This is the best expedient he could have devised for relieving the public embarrassments, but to give success to the plan, it is essential, that Congress should have it in their power to support him with unexceptionable funds.
Had we begun the practice of funding four years ago, we should have avoided that depreciation of the currency, which has been as pernicious to the morals as to the credit of the nation: And there is no other method than this to prevent a continuance and multiplication of the evils flowing from that prolific source.
The New-York Packet, and the American Advertiser, August 30, 1781.
1. This, like the preceding issues of “The Continentalist,” was probably written while H was at De Peyster’s Point during the interval between his departure from Headquarters in the middle of April and his arrival in early July at Dobbs Ferry, New York.
3. Robert Morris was named Superintendent of Finance on February 20, 1781