Documents referred to in the preceding report.
Newport, 22d August, 1785.
Misfortunes are more or less painful, as they have been brought upon us by folly, extravagance, or imposed by public necessity. Those of the latter kind may be distressing, but cannot be dishonorable. I have long struggled with difficulties, in which I was involved, while in command to the southward, and which I should have laid before Congress, at an earlier period, but from a hope, that I should extricate myself without their intervention. But, as life is uncertain, I should do great injustice to my family, not to lay the matter before them and claim their indemnity, should the precautions, which I have taken, prove insufficient for this purpose. I will gve them a history of the matter, and leave the rest to their justice and the event of things.
The sufferings of the southern army in the campaigns of eighty one and eighty two, for want of supplies of all kinds, are known to all America. The inability of Congress to give effectual support, at those periods, needs no explanation. In this situation, without funds or public credit, necessity compelled us to have recourse to many expedients, to prevent a dissolution of the army. In the spring of eighty two, the troops would have disbanded, but from a seasonable supply of clothing from Charleston, by the Governor and Council of South Carolina. Several hundred men had been as naked as they were born, except a clout about their middle, for more than four months, and the enemy in force within four hours march of us, all the time. Soon after this, I got instructions from the War-Office, to get supplies of clothing in the best manner I could, as there could be none sent from the northward. Mr. John Banks, one of the House of Hunter, Banks and Company, contracted to supply us. I advanced him a sum of money, and gave him bills on Mr. Morris for forty thousand dollars, to secure the clothing. The whole of which was reported to the Secretary of War at the time. Mr. Banks’s prospects for securing the clothing was with a set of merchants in Charleston, then in treaty with the Governor and Council of South Carolina, for permission to remain with their goods, after the place should be evacuated; and if the place should not be evacuated, those merchants were to contrive a plan for sending out the clothing for the army. Mr. Banks, in writing of this transaction to his partners in Virginia, and enclosing a number of the public bills, his letters being opened and the circumstances not known, it gave birth to a report, that I held a commercial connection with him.16 And this interpretation was more readily given to the affair, from Mr. Bank’s hazarding a conjecture, that it was probable I might. On this being communicated to me by the Governor of Virginia, I took Mr. Banks before the Chief Justice of South Carolina, to make oath on the subject.17 A copy of his affidavit, I enclose, and have the original in keeping. There are no transactions in life, which are more vexatious than those, where our zeal to serve the publc is made the subject of private accusation. It is no elss mortifying to our pride, than unfriendly to our character. I despise popular prejudices, and disdain vulgar suspicions. But lest the army might be tinctured with the rumors on the subject, and sap their confidence so essential to military operations, and the propsects of peace uncertain, I got General Wayne and Colonel Carrington to look over the original papers, that the army might be convinced it was a public, and not a private transaction. And such they found it. Their report has been made public.18 Soon after the enemy left Charleston, the inhabitants, who had been much harrassed, from the mode of subsisting the troops, began to clamor against it. The discontent was so great, as to give opposition, in some cases, and to threaten it, in all. This rendered our collections difficult and precarious. Our soldiers were soon reduced to the utmost distress, and, at times, compelled, from hunger, to plunder the market in Charleston for support. I believe, these are facts, known to some of the members on your floor. The universal cry was, a contract for the subsistence of the army; but such was the critical situation of our Financier, the difficulty lay in finding persons of property to engage in the business. Applications were made to almost every man of property and influence in the State. No one could be found, and so scrupulous were the people, at one period, that no body would take bills on the Financier, except Mr. Banks and Company, and they were the only persons, that made any propositions for contracting, and their conditions were high, and their funds inadequate. The matter was referred to the General Assembly, and their advice and assistance solicited upon the occasion. The General Assembly, after making the necessary enquiry on the subject, discovered such a backwardness in the people to engage in a contract, that they recommended our closing with the offer made by Banks and Company, even under all the disadvantages, in which it presented itself.19 The difficulties, which were foreseen, were soon felt. The Company’s funds were inadequate, bills sold greatly under par, and but few could be sold at any rate. Those funds, which were in the hands of the Company, were tied up by prior engagements, and the creditors insisted on farther security, before they would consent to their application for the support of the army. The repeal of the impost law in South Carolina added another difficulty. My Address on this subject gave offence to the Assembly.20 In this critical situation, I had but a choice of difficulties; to turn the army loose upon the country, or take the risk upon me of supporting the contractors. I chose the latter, as the least evil. The sum, I first engaged for, was upwards of thirty thousand pounds sterling; but afterwards, when public bills got into better credit, I was obliged to give occasional support, by lodging bills to raise money upon; and this was attended with no small risk, but, happily, with no loss. And, that as little hazard might be run, as possible, in my engagements, I made the Company give an order for all the contract money, and sums due on the clothing department, to be paid into the hands of those persons, whose debts I had guaranteed. The order was given on Mr. Pettit, the Company’s agent, in Philadelphia, and one of the Creditors, commissioned by the whole, sent forward to receive it; and had it been complied with, it would have discharged all my engagements. From this until my return to the northward, I was ignorant that those funds were diverted into other channels. My indignation at the vulgar suspicions of my holding a concern with Banks and Company, imposed a sort of silence on me, which kept me ignorant of Mr. Banks’s villainy,21 until my arrival at Philadelphia. Mr. Pettit then told me what had been done. Alarmed at the situation of the business, I got Doctor Burnet, whose son had been one of the Company, and was then deceased, to send another of his sons to Charleston, to have deposits made from the Company’s funds, for the security of those debts, for which I stood engaged.22 He went, and the greater part was settled, and I should have been discharged from the whole, but from new acts of villainy in Mr. Banks. Part of what now remains due is in dispute, and I have a bond of indemnity and some mortgages for the rest. But after every precaution I have taken, if I should suffer, I hope, Congress will indemnify. I have been much perplexed with the business, distressed, to the greatest degree, in my private affairs, and have already travelled some thousand miles upon it, and am still involved in a law-suit, and sundry other difficulties, concerning the payments which have been made. Thus have I given your Excellency a short narration of the origin and situation of this matter, and have only to add, on this subject, that I never held any commercial connection with this Company, other than what concerned the public, either directly or indirectly, or ever received one farthing profit or emolument, or the promise of any from them; and my bond of indemnity expressly declares, that I have no interest, connection or concern in the debts, for which I became bound: all which, I am willing to verify on oath.
Another instance of private loss has attended my command, which, in many instances, has been rendered more difficult and distressing, than can be readily conceived. Baron Glusbeck,23 an officer created for special merit in the action at the Cowpens, was in Charleston, without money or means to get to the northward, and a foreigner and without credit. I had no money to advance him, and endorsed his bills, which were returned upon my hands with damages and interest, to the amount of near a thousand dollars, which I have been obliged to borrow the money to settle, and still owe it. My public station imposed this business upon me, and, although I would not have done it, if I had known the fellow to have been as great an impostor, as I have reason to believe him since, yet, at the same time, being commanding officer, I could not well refuse it.
I have the honor to be with great respect and esteem, Your Excellency’s most Obedient Humble Servant,
His Excellency The President of Congress.24
16. See note 13.
17. This document is printed below as document No. 5 of Section C of this Report.
18. The statement by Wayne and Carrington, dated February 15, 1783, reads in part as follows: “It cannot be supposed that a character, stamped with so many marks of public integrity as General Greene’s, will receive an injury in the minds of generous men, from the incautious expressions of a private letter, communicating to a friend the surmises of the writer; nor would it be thought necessary to regard the opinions of those of another cast, did the general stand in a private capacity alone; but as it is the duty of public characters to preserve the full confidence of all orders of people, so it is requisite that, whenever any circumstance shall happen, admitting of constructions and interpretations, which may tend to impair the general confidence, such explanations be immediately made as to remove every possible ground for suspicion. Upon these considerations, General Greene, having received from Governor Harrison, copies of letters wrote by Mr. John Banks to Mr. James Hunter, which had been opened by General Scott, wherein the writer had mentioned, that he had reason to think the general had some thoughts of proposing a connexion with him in a house to be set up in Charleston, after the evacuation of that place, immediately called on Mr. Banks, and laying the letters before him, in our presence, requested we would hear his explanation of the grounds on which he had taken up such an opinion; from which it fully appeared to have arisen in mere conjecture, from the general’s having taken an opportunity to recommend Major Burnet, who had long been in his family, and had some views of quitting the service to go into business.… As to the advancement of moneys, and the bills on the superintendant of finance, the general, for our information, laid before us the whole papers relative to them; from which we find that the secretary at war, early in the fall, apprehending the evacuation of Charleston to be near at hand, requested him to take measures for procuring from thence clothing for the army, by drafts on the superintendant of finance; that those advancements of eleven hundred guineas, and eight thousand dollars in bills, were made to Mr. Banks for that purpose, at an early period, on account, for procuring the clothing on the most advantageous terms; that due notice of the bills was given to the secretary at war, with a full state of the steps taken for accomplishing that object—that he fully approved of them, and thanked the general, in the warmest terms, for his prudent attention to the business, informing him, at the same time, that the superintendant of finance was perfectly satisfied with the drafts, and was ready to take them up. We are happy in being able to add to this state of the affair, that, in consequence of these measures, the southern army is now better clothed than we have ever seen any American troops since the beginning of the war …” (Johnson, Greene description begins William Johnson, Sketches of the Life and Correspondence of Nathanael Greene, Major General of the Armies of the United States, in the War of the Revolution (Charleston, 1822). description ends , II, 381–82).
19. See the exchange of letters between Carrington and Rutledge printed below as Section H of this Report.
20. On February 3, 1781, Congress had recommended to the states “as indispensably necessary, that they vest a power in Congress, to levy for the use of the United States, a duty of five per cent. ad valorem … upon all goods, wares and merchandises of foreign growth and manufactures, which may be imported into any of the said states from any foreign port, island or plantation, after the first day of May, 1781; except arms, ammunition, cloathing and other articles imported on account of the United States, or any one of them; and except wool-cards and cotton-cards, and wire for making them; and also, except salt, during the war:
“Also, a like duty of five per cent. on all prizes and prize goods condemned in the court of admiralty of any of these states as lawful prize:
“That the monies arising from the said duties be appropriated to the discharge of the principal and interest of the debts already contracted, or which may be contracted, on the faith of the United States, for supporting the present war:
“That the said duties be continued until the said debts shall be fully and finally discharged.” (JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , XIX, 112–13.)
The states, however, were reluctant to accede, and by January, 1783, only ten had agreed, with Rhode Island and Georgia still withholding assent and Virginia repealing her earlier agreement to the impost (JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , XXIV, 101–02). Greene had been depending upon the South Carolina impost to provide funds for his contracts for Army supplies. When it became apparent that South Carolina intended to repeal the impost, Greene wrote to the governor, Benjamin Guerard, with a request that his letter be read in the South Carolina legislature. This letter, dated March 8, 1783, reads as follows:
“Persuaded that public happiness is the great object of every Legislature, and that they would wish for full information upon every political question, I take the liberty to inform your Excellency upon two points, which may have some weight in determining the great question before the Assembly respecting an impost upon trade. I should not presume to offer my sentiments upon the present occasion, or take the liberty to lay matters of information before them, did I not conceive I stand connected with the consequences, and should be justly chargeable with every public misfortune, which may result from having concealed the temper of the Army, and the situation of the Financier—a knowledge of which may influence the decision. These reasons, I hope will apologize for this address, however unpleasing the subject.
“Before a measure is adopted that may disturb the tranquillity of Government, unhinge the present Constitution of things, and bring on convulsions, which we know not the end of, it may be well to weigh the reasons for, and against it.
“I confess I am one of those, who think our Independence can only prove a blessing under congressional influence. Every Government has the seeds of commotion in it, and there will never be wanting occasion to kindle them into life, while public prejudice and private resentments operate so powerfully on man and measures. The situation of the several States, the various interests prevailing in them, and a thousand other sources of discontent, either real or imaginary, may give birth to civil discord, unless there is some controuling power to Check it in its infancy. Several instances have already happened that have nearly produced an appeal to the sword, which have been happily accomodated by the intervention of Congress; But the weight and influence of this body in future, will depend upon the estimation and support they receive from the States. There are principles in human nature, which influence Society, at a particular point through all their turnings and windings, with as much certainty as the streams direct thier motions, from their sources to the Sea. Congress can have neither weight or influence without revenue, and where is the danger of granting it? There is no plan of policy free from possible evils. That which promises the greatest share of private security, and public tranquillity must be the most eligible. To decide fairly what may be expected from this body you should examine its component parts. Are not the members of Congress citizens of each State, annually elected? And has not every member a much greater, interest in the State to which he belongs, than he can have in that collective body. This being the case what temptation have they to betray the interest they represent, and more especially as they may be called to a severe account for their Conduct, in the State to which they severally belong, for any breach of trust, or neglect of duty? If this body was independant of the united States, and had a permanent Standing, there might be something to apprehend, both from extensive powers, and extensive revenue, but upon their present constitution there is as little reason to suppose they will betray their trust, as that the representatives of the people in each State will do it. If we have any thing to apprehend it is, that the members of Congress will sacrifice the general interest to their particular interest, in the State to which they belong. This has been the Case, and from the very nature and constitution of that body, more is to be dreaded from their exercising too little, than too much power.
“The Financier says the affairs of his Department are tottering on the brink of ruin; The Army to the Northward are in the highest State of discontent; and the same may be expected to the Southward. It must be confessed the soldiers have given noble proofs of virtue and patriotism, under almost every species of distress and suffering; But this has been in full persuasion that Justice would be done them in due time. The distresses of a suffering Country has been urged with Success, to silence their present Demands, but these arguments will have no weight in future. The present repose affords a prospect for permanent revenue. The eyes of the Army are turned upon the States in full expectation of it. It is well known that Congress have no revenue, and the measures of the States will determine the conduct of the Army. I need not tell your Excellency the moment they are convinced they have nothing to hope for from that quarter, they will disband; nor will they be satisfied with General promises. Nothing short of parmanent and certain revenue can or will keep them subject to authority. I think it my duty to be explicit, because I know the sentiments of the army. Men will suffer to a certain degree, beyond which it is dangerous to push them. My influence shall never be wanting to promote the tranquillity of Government, but this will have little weight when opposed to the Demands of an injured soldiery. My heart is warm with good wishes for this Country, and I cannot contemplate future dangers that threaten it, but with pain and anxiety. I am sure I shall never turn my back when troubles overtake her, but it is much easier to prevent evils than correct them. This Country is much better calculated for revenue, than for War. It may loose by every new convulsion; but can never gain where liberty is not the object. Your wealth and weakness are a double temptation to invite an invasion, and are the strongest arguments for uniting in the closest terms your interest with others. View but for a moment the vast property you have exposed, and the little permanent force for its Defence. Again Consider how unhealthy your Climate, and the prejudices prevailing against it. Should you add new difficulties in matters of Finance, the War continue, and the Army disband, your ruin will be inevitable. There is a great difference between personal consequence and national strength; nor will the feelings of one always dictate a just policy for the other.
“I have only to add, if in the present plan there are insuperable difficulties, and such as should induce you to hazard every consequence, rather than adopt the plan under its present form, change the mode but let the revenue be applied to the same purposes. This may serve to rest the hopes of the Army upon, and lay a foundation for public credit abroad. It will carry the fullest conviction that your objections are not to the thing, but the mode, without which, it will be thought the mode is only the ostenssible objection, while the thing is the real one.” (LS, William L. Clements Library of the University of Michigan.)
The South Carolina legislature considered Greene’s letter an unwarranted interference by the military and promptly repealed the impost.
21. One of Greene’s biographers describes this affair as follows: “Banks … was speculating in various directions in anticipation of the change in prices that would result from a declaration of peace, and he soon became deeply involved. Distrust of the value of the bills on Morris also began to spread, and Banks’s creditors refused to advance him anything further.… At this juncture the merchants proposed that if Greene would guarantee Banks’s debts they would furnish the latter further credit, and would surrender the interest which Banks had assigned to them in the bills on Morris. For the purpose of keeping his men from starvation Greene agreed to this, and executed a bond of surety guaranteeing the debts of Banks. For his security Banks pledged all the bills he had received, both for the clothing and the feeding contracts; the merchants executed a release of their interest in them, and an agent was sent on to Philadelphia during the latter part of May with an order for them on Mr. Pettit … in whose hands they were reported to be. Before he could return, Greene started North, and, traveling leisurely, did not reach Philadelphia until the autumn. Then, to his dismay, he learned that Banks had previously disposed of the bills in Pettit’s hands, and that his security was lost. Banks meantime had gone into bankruptcy, with liabilities of over thirty thousand pounds” (Francis Vinton Greene, General Greene [New York, 1897], 297–98).
22. Dr. William Burnet, a resident of Newark, New Jersey, had served in the Continental Congress from 1780 to 1781 and with the Continental Army as surgeon-general for the Eastern District. His son, Ichabod Burnet, Greene’s aide, had died in Havana. For Ichabod Burnet’s connection with Banks, see notes 11 and 13.
23. Baron Glaubeck served during the American Revolution as volunteer aide-de-camp to Brigadier General Daniel Morgan. He was brevetted a captain in the Continental Army on March 9, 1781, in consideration of his services at the Battle of Cowpens.
24. Richard Henry Lee was elected President of the Continental Congress on November 30, 1784.