THE subject of finance seems to be so little understood in America, that we find almost as many opinions as there are men who undertake to reason upon it sys­tematically, especially upon the large scale upon which it seems necessary now to take it up. But it is a subject in which we are all deeply interested, and our affairs, though in other respects they are in as prosperous a condition as we could have expected, have run so extremely wild in this busi­ness, that every one perceives we have strayed from the proper road, and seems anxiously inquisitive how to recover it again.

The rapacious violence of the British Court threw us suddenly into one of the most desperate situations imaginable. On the one hand we saw nothing but the most abject slavery, from which the minds of a people accustomed to think themselves free, would re­volt, if they had no other asylum than death: On the the other, a mazy wilderness of inexplicable difficulties. In this situation, surrounded with dangers and impelled by necessity to immediate action, we were driven to adopt expedients from time to time on the [...]pur of occasion, trusting to future events for an opportunity of method [...]zing our affairs and re [...]ucing them to order. The grand [...] of war is money. We were [...] so organized as to be able [...]o collect it with proyer expedition, nor in sufficient quantity by taxes or other contributions; it was therefore necessary to procure [...] in some other way; and bills of credit were issued on the faith of the people. While the quantity was within proper bounds, [Page 2]the united zeal of the whi [...]s, and their universal sense of the neces­sity of the measure, gave these bills a ready currency (though they were in effect unfunded) in op [...]osition to all the arts and practices of the doubtful, the tim [...]d, and the disaffected among us. This expedient was therefore sound so handy, and so easy in practice that, from a re [...]uctance to take unnecessary pains in our affairs, e­specially while we were hard pressed with dissicul [...]ies, and called upon for cons [...]ant exertions in other ways, we contioned in the frequent repetition of it, even after our social union was so con­stituted as perhaps might have enabled us to ab [...]e, if not wholly to lay aside the use of [...]t, [...]ll we have run it to a dangerous excess.

The fruits of this slaggish indulgen [...]e—this criminal negligence, are now over [...]aking us. [...] or a while they stole upon us by slow degrees, as it were imper [...]eptibly, but at len [...]th they are rushing in like a torrent, threatening disappointment and ruin to thousands of individuals, and the most mischievous embarrassments to our public affairs. Every one sees the danger necessarily arising from such a situation; and every one (a few individuals excepted who need not be described) feels in his daily transactions grievous incon­veniences, difficulties and los [...]es arising from it; and suffers perhaps still more in apprehension of the consequences which must neces­sarily follow, unless some remedy be speedily applied. Thou­sands among the most worthy part of the community, who, either by their own ind [...]stry or that of their ancestors, have acquired what they fondly hoped would have supported themselves and their families in affluence, or a decent mediocrity, see their fairest hopes on the brink of destruction, and find themselves within a step of the most wretched poverty and distress. This situation must be the more mortifying to many of them as, through zeal in the common cause of America, and confidence in the conductors of our public affairs, they have brought themselves into it by risking their all upon the s [...]ccess of the revolution, and the wisdom and good management of those to whose guidance it was committed; while others indifferent to the public good, or perhaps unfriendly to the en [...]erprize have taken advantage of the national c [...]fli [...]t to enrich themselves, or at least to secure a s [...]uation of compar [...]tive sa [...]ety, by what they call realizing; that is, by engr [...]ssing lands and other solid property. This m [...]chief, with respect to many individuals, is become remedi [...]e [...]s: But with respect to the public, the disorder is not yet d [...]perate nor without the reach of remedy, if speedily and properly a [...]lied.

In order to know what will be the proper remedy and how to ap­ply it to adva [...], it m [...]y be [...]nece [...]ary to enquire as minutely as possible into the nature, degree, and causes of the disorder.

By the nature and degree of the disorder, I mean th [...] preciation of our currency, the quantity of that depre [...]iation and the effect it [Page 3]has on our public affairs and our commerce, external and internal. These will be inciden [...]ally considered in examining the causes of the depreciation, which I shall arrange under the following heads.

1. The excess of the quantity of money in circulation.

2. Its not being established on proper funds to be redeemed at certain periods, and

3. The want of a proper plan for raising future supplies for car­ry [...] on the war, without increasing the quantity of money in cir­culation.

And first as to the excess of quantity. It seems not to be ascer­tained what quantity of money the commerce of the United States would bear in circulation, without occasioning any depreciation, supposing it to be well funded and in full credit as to the time and manner of its redemption; but the general [...]ty of opinions fix it at not more than thirty nor less than twenty millions of dollars. I shall take the medium and suppose it to be twenty five millions. It is doubted by to [...]e whether the purchases made by the public are equal to the diminution of commerce occasioned by the war, I am inclined to think they are; and that, if the money for public expenditures came into the treasury in the course of circulation, that is, by taxes and loans, these urchates would supply the de­ [...]iences of commerce so far as relates to the quantity of money requ [...]site for a circulating medium. Hitherto money cannot be said to have had a fair circulation; for almost all the money expended by the public has been created and issued as occasion required, without ever returning again into the public treasury. But as the creation of money is to cease, and it will in future travel its full round in circulation, I should suppose that commerce would find full employ for the usual quantity—say twenty five millions of dollars. The quantity now in circulation is is about one hundred and sixty mill [...]o [...]s, and if the depreciation is to be computed in mathematical proportion to the excess of the quantity, it should at this rate be but latle more than six for one. This mode of com­puting, however, is not always just, especially while the excess is increasing: but this will be considered under another head in ex­amining the imaginary causes of depreciation: I here speak mere­ly of the natural cause.—excess of quantity. We have the assur­ance of Congress that the quantity shall not ex [...]eed two hundred millions of dollars; and though I hope they will not have occasion to go so far as that s [...]m, yet, as it MAY happen, it may be fair to calculate upon it: the excess we may suppose will then be as eight for one. This I call the natural cause of depreciation; the causes which follow I shall for the sake of distinction call imaginary.

The second cause of the great depreciation of money is its not being established on proper funds to be redeemed at certain periods.

The money has been issued on the mere authority of Congress, [Page 4]who it is supposed have not in themselves the power of redeeming a single dollar of it. I do not mean to call in question the authority of Congress to emit money, nor the propriety of their doing it. The circumstances of the occasion will probably justify it, and their constituents in the several States have, by le [...]islative acts, im­pliedly approved it; but they have not yet by direct and open acts assumed the redemption of it. That certainty which is usual in such cases, and which the nature of the business requires, has not therefore been given; and to this want of certainty much of the present extravagant degree of depreciation may be imp [...]ted.

A third cause of the depreciation is the want of a proper plan for raising future supplies to carry on the war without increasing the quantity of money in circulation.

Congress have been pleased to declare that they will not on any account extend their bills of credit to more than two hundred mil­lions of dollars, and it is not doubted but that they mean to be go­verned by their promise. But we know that the w [...]r is not yet at an end; that large supplies of money will be necessary; that the remaining forty millions which they reserve the liberty of emitting must shortly be expended, unless aided by other means; that taxes will not afford sufficient aid in due season; and that there does not appear that willingness in the money-holders to lend, on the pro­sent footing, which is necessary to insure a sufficient quantity: Neither does it appear that the Loan-officers are authorized to re­ceive the necessary quantity if it should be offered. How then is the treasury to be famished? Congress, it is true have been pleased also to declare that ‘further ways and means of providing for the public exigences are now under consideration, and will soon be laid before their constituents.’ But what these ways and means are, when they will appear, and how far they will be effectual, are yet unknown to the public.

Some effectual measures have long been expected, and we have been told for many months past that such measures have been under the consideration of Congress. When this expectation commenced, the whole amount of the depreciation of money, natural and arti­ficial, was but four or five for one of sterling. It is now —I dare not say how much. Has it kept pace with the quantities emit­ted since that time? It has abundently out run that proportion. Have our external affairs grown worse in the mean time? On the contrary they have flourished even beyond our hopes. What then can have occasioned this dreadful panic—this distrust of ourselves which is driving us headlong to the brink of a dangerous preci­pice? What have we to fear? The circumstances of our exhaust­ed enemy render them less an object of terror than of the softer e­motions of humanity; and Providence has raised us up friends, and strengthened our hands in a manner that gives us the fairest pros­pect [Page 5]of seeing our independency established on as firm a basis as human affairs admit of, and of enjoying the blessings of PEACE, [...]TY AND SAFETY. Does not all this plainly indicate some [...]al misconduct in the management of our affairs? We all know that schemes of finance are a delicate subject, and that our [...]es are so particularly circumstanced, and in so ticklish a situ­ation that they will no looger bear either delay or doubtful experi­ments. Measures that, co-operating with others in a general sys­tem, might be very useful and proper, often prove mischievous when put in practice separately. I need produce no other proof of this than the scheme of calling in the emissions of May 1777, and April 1778. May we not with propriety, respecting our fi­nances, say that, by leaving undone those things which we ought to have done, and by doing those things which we ought not to have done, that faith which is the evidence of things not seen hath lost us due influence, and there is no health in that confidence which is necessary to give due vigor to public measures?

Hitherto we have considered the grand leading causes of depre­ciation. Let us take a cursory view of some of the branches which have sprung from them. These are too numerous to be minutely considered in an essay of this kind; and, viewed separately, they may appear of trifl [...]ng consequence; but their aggregate effect is wonderfully great. One of the largest of these branches, which is again abundently ramified, is that intermediate traffic which has been so much complained of as a pernicious evil, between the first possessor of commodi [...]ies, whether by importation, manufacture or otherwise, and the consumer. This is in fact a natural effect of a continued course of depreciation; but, like the accessions of a snow-ball rolling down the side of a mountain, it increases the magnitude and velocity of its cause, and thus in turn itself becomes a cause. Much of this intermediate traffic is carried on merely for the sake of private gain, regardless of other consequences; but much is also done solely to avoid loss. It is unnecessary to attempt to enumerate the many arts and practices exercised by those who are engaged in this kind of trade, or the various motives which, under the present circumstances of the times, induce so many to become partakers in it: they are known to every intelligent obser­ver. Neither would I mention the general depravity of morals which at present seems to prevail in commercial transactions, but for the sake of introducing an observation in which I find I differ from many I converse with; and that is, that this depravity of morals ought to be conside [...]ed as consequent upon, rather than as the cause of the depreciation of money. As to the devices of the disaffected, and the doubts of the timid about the final event of our great struggle, they have certainly had their share in hastening [Page 6]on the depreciation, but they have spent their force, and their in­fluence is become too contemptible to deserve much ro [...]e.

An idea has been started, and strongly u [...]ged by an essay writer who stiles himself a true Patriot, that nineteen twent [...]ths of the money ought to sink in the [...]nds of the possess [...]rs. This for a time had a wonderful effect. It was so pleasing at first view to those who had less than their proportion of it in their hands, and m [...]t with so many advocates before they had time to reflect on the gross injustice of it, that it ala [...]med the great b [...]k of the people in the middle States with a serious apprehension that it would be put in practice. It operated like a report of a plague in a [...], and in­duced many people to sh [...]n continental money as infectious, and to rid themselves of what they had, on any terms, rather [...] keep it by them. I have been told of instances of the notes of private persons payable a few years hence, for less than a fourth of the va­lue and without any stipulation for a particular kind of money, be­ing preferred to the full sum in ready money, on the strength of this apprehension only. And though thinking men may not per­haps have harboured an idea so glaringly unju [...]t, they have been carried on with the croud and obliged to give way to [...]s force. Is it possible so dishonourable an idea could ever gain admittance in Congress? It surely is not. But their long delay of the measures necessary to contradict it, let a suspicion take place which strength­ened the pernicious apprehension, which has not yet ceased its ope­ration. The multiplicity of business they had before them, and the obstructions and difficulties they have met with on other sub­jects were not known abroad, and this delay was not fairly ac­counted for.

What I have said will be sufficient to shew the propriety of the observation above hinted, that the degree of depreciation of mo­ney, while it continues increasing, will always exceed the propor­tion of its excess in quantity. And I think it may be fairly infer­red that, as soon as the quantity of money ceases to increase, and what is in circulation shall be properly funded so as to give a rea­sonable security that it will be fairly [...]edeemed at certain periods, these excressent causes of depreciation will cease to operate, and money will soon be liquidated at its true value in proportion to the quantity in circulation.

Before I state my own plan for effecting this desirable purpose, I beg leave to offer a few thoughts on some of the propositions I have met with in reading and in conversation.

It seems to be generally agreed that our future supplies must be raised by taxes and loans. The difficulty seems to [...]e in finding out in what way they are to be raised by either or both of these means, in sufficient quantity and in due season. Some are for re­lying on taxes alone; but this I fear would leave us in the lurch. [Page 7]We all know that taxes are the dermier resort, and that our public de [...]s [...] [...]e discharged principally by them: but necessity has in­troduced the practice in all civilized countries, and more especially those of extensive territory and inhabited by freemen, carrying on a war with money to the extent of their abilities, to anticipate their taxes by loans in some shape or other. And I conceive it to be so plainly impracticable for us in our present circumstances to raise the necessary sums in due season by taxes only, that I shall spend no time in argument upon it. I should nevertheless wish to [...]e taxation go on to as great an extent as the different Legislatures shall judge practicable within their r [...]pective States; and I should suppose that levying it in quarterly payments, or at shorter periods, would admit of raising a larger sum, and with less inconvenience than the usual custom of annual levies.

It has been proposed, and I am informed has obtained serious consideration, that the disterent States should be called upon for [...] respective quotas of the necessary supplies of money, to be paid in quarterly or monthly, leaving it to the respective Legisla­tures to raise it by taxes, or [...]oans, or both, as they please. This scheme, so far as it can be effected by taxation, I take to be a good one; but taxation, like other good things, may be overstrained to the injury of [...]s future usefulness; and, to whatever length it is carried for continental purposes, it ought to be kept as nearly e­qual as possible in the different States. But of this I shall say more hereafter. As to loans I fear it is too late for this scheme to take ef­fect. The difficulty lies in the uncertain value of money. If there was no considerable degree of depreciation, or if the depre­ciation was settled at any certain rate with a probability of its con­tinuing fixed for a course of time, the different States might make loans on an equal footing and on terms of certainty; but in the present situation of things I do not s [...]e how they can do it without playing a very high game of chances, in which the odds will be greatly against the State. Money is now at a rate of depreciation vastly beyond what we may suppose it will remain at when matters come to be explained, and the necessary confidence in its final re­demption at a proper time again takes place. If then a State should borrow from an individual at this high rate, say twenty for one, and money should appreciate to ten for one at the time of repay­ment, would not the lender double his money? He is to receive the s [...]me nominal sum that he lent, which is become of double the value. For a State to fix a certain rate of depreciation at which to borrow, will be attended wi [...]h risk, because [...]v [...]ry State, acting for itself, will probably differ from the rest in fixing the rate; and whatever it may vary from the general rate which shall prevail at the time of repaying the loan, will be either profit or loss to the State, and the reverse to the lender, unless the lat [...]er be secured in [Page 8]the contract against any chance but that of gain. So far as the re­spective States may borrow for their own separate purposes, these chances are of less consequence, because as they lay out the mo­ney at its value at the time of borrowing, they reap the sole bene­fit or disadvantage of its appreciation or depreciation, and gain in one way what they may lose in another; but if they turn the b [...]r­rowed money into the Continental [...] reasury it is otherwise; the State runs the whole risk, and the Continent receives the money at a certainty, that is, its nominal value. For these reasons I do not think the States will separately contract loans for Continental pur­poses, unless Congress shall fix a rate by which they may do it on a plan of equality both as to the terms, and the quantity. Loans, especially in the present fluctuating state of money, appear to be properly a Continental business, and the contracts should be imme­diately between Congress and the lender, which will preserve uni­formity in the plan, and equality in the chances of profit and loss to the different States, and thereby prevent those new scenes of job­bing and speculation which would probably be consequent upon loans on a great variety of terms, and which would hardly fail to create much jealousy and discontent.

Some have proposed the levying in kind the articles wanted for public use. However plausible this may appear in theory, it would in my opinion most certainly fail in practice. It may be likened to the laying aside a regular army, and depending solely on the militia in monthly rotation to oppose the enemy. But sup­posing it to be in some degree practicable, it would, so far as it went, destroy that use for money on which its value in a great measure depends, and render it more difficult to procure such ar­ticles as must necessarily be purchased with it.

I have, moreover, heard it alledged that the business rests with the different States, and with the people at large, and that they do not manifest a proper disposition to exert themselves. I am far from thinking this allegation well sounded: I believe on the con­trary they are heartily disposed to use the necessary exertions if they were put in a way in which they might confidently suppose they were acting in concert. But to what purpose are the exertions of individuals acting separately and unconn [...]edly, and perhaps counteracting each other? How can it be expected they will act vigorously under such discouragements? And who can with pro­priety mark out the way in which their efforts shall effectually tend to one point, but that body in whom the sovereignty of the whole is lodged? Congress, with respect to the United States, is as the Legislature of a particular State to the individuals of which it is composed; and though they may not, perhaps, in all cases com­mand with the force of a law, they may recommend with sufficient force to effect the purpose. Shall the business be delayed because [Page 9]the best mode possible cannot be agreed upon? This, in our present situation, would be like mariners disputing which way they should steer, and leaving the sails flapping while the vessel is drifting on a le [...]-shore. Some one way must certainly be the best; but any one of several that are supposed to be in our choice, would be bet­ter than to remain either idle or at cross purposes: and this way whatever it may be, must be directed by Congress.

One proposition more I beg leave to observe upon; because, however plausible and specious in appearance, I take it to be re­plete with a most dangerous and destructive poison, and extremely salacious: I mean what comes under the idea that the public debt is discharged, or diminished pro tanto, by the depreciation of money operating as a tax on the possessors of it, and on those who have received and must receive it in payment of debts? And is this an equal and just tax? Let us enquire on whom, and in what proportion this tax falls. It will be found, so far as it has yet ope­rated, to have fallen chiefly upon the aged, the infirm, widows, [...]rphans, public institutions, the army, officers of government, and o­ther zealous actors in and supporters of the revelation, many of whom are already reduced from easy, yea affluent circumstances to the most distressing poverty by the wonderful magic of this cunning mode of taxation; while a large proportion of those who are to enjoy the benefit of the prize we are contending for, have studied to withhold both their property and their personal services, and to keep themselves uppormost on the wheel, turn which way it might. But this is not all; for in the end it will be found that the greater part of the profit of this injustice has redounded to crafty and en­terprizing individuals, many of whom have obtained it by means about as honourable as secreting their neighbours goods deposited in their custo [...]y in time of a fire, or concealing a purse accidentally found in the street. The public in fact have derived no benefit from it, and if it had, would any honest member of the commu­nity wish to be exempted from paying his proportion of taxes by such means? As well might he wish the army to levy its own sup­port from the unfortunate part of the country through which it might happen to pass. The specious supposition that the public debt is to be computed at the present rate of depreciation, or at whatever rate it may arrive at, is a mere delusion. It appears to me clearly that whatever ground we have passed over in the course of depreciation, must at some time and in some shape or other, be retrodden in a course of appreciation, that is, in discharging the public debt; for, as the quantity is diminished, the residue will rise in weight as long as any depreciation remains. The great mis­fortune to those who have been the most severely oppressed by the depreciation is, that they will not in turn be peculiarly benefited by the appreciation: their private losses have become the private [Page 10]gain of other individuals who can be no otherwise reached by gene­ral laws than as their extraordinary wealth makes them greater ob­jects of taxation; and therefore if any relief is given to private sufferers, it must be by special acts, and not by general regulations.

If these observations are just, it is clear that the public have not been benefited by the depreciation of the money; and I think it still more clear that all the debt created at a depreciation beyond the natural degree arising from the excess of quantity of the money in circulation, must be contracted at a disadvantage to the public. Whenever depreciation ceases its progressive motion, those imagi­nary causes, which have swelled it to its present enormous size, will subside, and, like a river which hath been swelled by excessive rain, it will retire within its proper banks and be redu­ced to us natural size; and consequently all the debt must be paid off in the different gradations from that mark to the original value, that is, an equality with gold and silver. It may be said that, by means of a bank in Europe, a deep stroke may be made in the public debt at the present rate of depreciation. This I would readily admit if we had now such a bank existing: But I know of no other way to create it but by a foreign loan: that loan is not yet negociated, and of course it will require a good deal of time, supposing such a loan practicable, to get the bank established; and I much fear that by keeping our affairs afloat in their present wild, unstable condition during that time, we should suffer greater mis­chief than the profits of the scheme would compensate. The thought puts me in mind of a man who to gain half a crown in a bargain would expend five shillings in liquor to intoxicate the other party and bring him to a proper temper for his purpose.

From what I have said I trust it will not be understood that I am an advocate for the appreciating of money farther than may be necessary to bring it to a steady, known, and certain value; but to this point I think it is our indispensible duty to bring it as speed­ily as possible. To establish this position, I could, if it were ne­cessary, add a variety of political as well as moral arguments; but I presume it is too obvious to need illustration. I shall therefore proceed to state the plan which appears to me most likely to pro­duce this effect. In doing this I shall lay aside the idea of a foreign loan; not that I am opposed to it, for I think, judiciously managed, it might be used to good purpose, but because it is not within our reach for immediate use.

The plan I propose consists of the following parts:

• 1. Funding the bills of credit emitted.
• 2. A domestic loan for current supplies, and
• 3. Taxation.

And 1st as to funding the bills emitted: I would propose that it be recommended by Congress to the several legislatures to pass laws [Page 11]acknowledging their several quotas respectively as a debt upon the State, and making provision for redeeming it by taxes at certain periods, to commence at a given time after the war shall be ended. This would fix it on a solid foundation, and add greatly to the confidence of the people in its intrinsic as well as extrinsic value. What I mean-by its intrinsic value is, the sum it will be worth at the time of its redemption, deducting compound interest from the time of reckoning till that period. By its extrinsic value I mean its usefulness as a medium of commerce in the mean time. This depends so much on general opinion, or, in other words, a confi­dence that it will be fairly redeemed at a certain period, that no­thing should be left undone which would tend to strengthen and establish this confidence. The reason why I propose that the peri­ods of redemption should commence at some time after the war shall be ended, will appear in the next section.

2. A domestic loan for current supplies. I would propose that an estimate be made of the sum that will probably be wanted for fix, nine, or twelve months; and that a loan be opened for this sum at a certain rate of depreciation, to be measured either by the price of exchange for sterling money, or livres of I rance, or the price of wheat or some other staple commodity of the country. But as scarcely any one commodity can be found that will bear so even a price universally throughout the United States as bills of exchange, I should think the price of exchange the best standard. Let it be computed as nearly as may be, what is the true degree of depreciation of money from the excess of quantity and such other circumstances as are not at present removeable; that is, at what rate the value of money will be liquidated in the course of com­merce, when confidence shall be restored in its foundation and stability, and let this be the rate at which it shall be borrowed. Where this line will fall is not ascertained; nor do I think ex­actness on the present occasion, necessary. I must, however, sup­pose a rate in order to explain my meaning the more fully; but whether I take it a few degrees too high or too low, is not material; the scheme may be accommodated to any number that shall be thought best. For the present then, let us suppose this line of depreciation to be at eight for one.

This will hold up a view of profit to the holders of money that will probably insure a speedy supply. And this I think necessary, because, to this purpose, the public and individuals who are to lend the money, have distinct and separate interests from each other. In vain will it be said, that these persons are part of the community, and ought to contribute all in their power to its welfare. The community and they are placed in opposition to each other as con­tracting parties, each consulting its own interest in the bargain, and trying to make it as favourable to itself as it can. So far as relates [Page 12]to pecuniary matters, the patriotism of every individual is satisfied if he contributes his proportion in the way pointed out by govern­ment. It is in personal and mental services that patriotism exhibits its extraordinary efforts. Loans are therefore to be obtained only by holding up terms of advantage to the lender. Such terms do not always imply the disadvantage of the borrower, and even where they do, it may be more than balanced by avoiding greater evils, or obtaining proportionate benefit. It is moreover to the honor as well as to the interest of the public, to offer such terms as will com­mand rather than solicit the requisite supplies.

In order to give every one an equal chance of subscribing to the loan, let the sum wanted be divided in due proportions so that every State may take its quota, provided it be subscribed within a certain limited time,—say two months, after proper notice that the office is open: and if the quota is not subscribed in that time, let other States, whole inhabitants are more willing to subscribe, have the benefit of doing it. And the better to accomodate the subscribers, allow them a certain reasonable time after subscription for paying in part of the money; and let the Loan-officers be au­thorized and directed to appoint deputies in different parts so as best to accomodate the people.

For every eight hundred dollars subscribed and paid in, give the subscriber a bill or certificate for 500 livres of France, bearing interest at six per cent, per annum, redeemable in current money either at the rate of eight dollars for five livres, or at the current rate of bills of exchange on France at the time fixed for payment, at the option of the possessor of the certificate: the interest to be paid annually in the like manner. It may be best that Congress should reserve the liberty of redeeming these bilis at any time after one year, giving reasonable (say three months) notice of such their intention, in order that they may check the appreciation of money if it should be likely to pass the line at which they have borrowed. And for this purpose and as a farther check on the value of money, I would propose that all the money which the different States can turn into the Continental Treasury by taxes during the war, be reserved by Congress as a fund to be appropriated as they may find occasion from time to time, to the payment of interest, the redemp­tion of these loan-bills, or the reducing of the quantity of money in circulation. By these means money may be kept at a steady certain value, which I take to be an object of great importance and worthy of the first attention. Whatever surplus of the taxes may remain, may then be used in common expenditures and thereby lessen the occasion for future loans; but I would wish to see the first loan calculated for a full supply without any reliance on taxes for current expences, as well to avoid disappointment, as to insure the liquidation of the value of money to a certainty.

[Page 13] If to this plan of borrowing when digested and put into form, Congress should ad [...] a recommendation to the Legislatures of the respective States to pass laws or resolutions to aid the carrying it into execution, it would almon infallibly insure it success.

3. Taxation. This is a business that lies chiefly with the Le­gislatures of the respective States, and each may differ from another as to the means and manner of raising its quota, without injury to the business of the Continental Finances. I therefore take no farther notice of it in this place, than as I conceive it to come within the duty of Congress▪ who may with propriety recommend as to the time, and the quantity of money to be raised for Continental pur­poses. Such recommendations seem indeed to be necessary in order to keep the different States as nearly as may be on an equal footing in this respect; for though it may, and probably will prove bene­ficial to those Sta [...]s, which, by early exertions, shall run foremost in discharging their quota of the public debt; yet many consider­ations, which need not now be mentioned, point out the propriety of keeping them nearly equal. I should therefore think it most adv [...]able in Concress to calculate their requisitions upon a scale that even the hindmost may probably cenform to, barring extraor­dinary circumstances such as the present situation of Georgia; at the same time not discouraging those who may choose to exceed it.

It may not be amiss before I conclude, to take notice of some objections which I have heard suggested against any plan of this kind.

Some gentlemen are so extremely tenacious of the honor of Con­gress, that they seem dispo [...]ed to hazard any consequences, rather than any public acknowledgment should be made, even by impli­cation, that money is depreciated; as they suppose such acknow­ledgment would be a breach of public faith. This I take to be nicety in the extreme. I would by all means be as tender of the national honor as is consistent with its health; but I would not nurse its complexion so far as to neglect its strength and usefulness. If the proposed plan of borrowing had any tendency to injure former contracts, there might be some weight in this objection; but it is proposed merely as a separate, independent and temporary affair, having neither relation to nor connection with the former contracts subsisting between the public and individuals, farther than as it may tend to enable the public to comply with its engagements. The bills of credit may nevertheless, in due season be redeemed in the ordinary course by taxes, at their nominal value, without any re­ference to depreciation, and former loans may be paid off on the same terms and in the same manner as if this scheme had never ap­peared. It may indeed hasten the time at which they may be re­deemed on proper terms, and the lenders may, in the mean time, receive their interest at less disadvantage, but I see not how it will [Page 14]otherwise affect them, What ground then have we for the exercise of this false pride? And whither would it lead us, but to struggle on in our present course till we get so deeply entangled that we can by no means extricate ourselves but [...] cutting the cord, and by a general crash annihilating our infant national character.

Some are opposed to all loans whether foreign or domestic, and are for relying altogether upon taxes. These I would leave to be combated by those who are for throwing the whole burden of our taxes upon posterity, as I look upon both the propositions to be in­eligible extremes

It has been suggested that a domestic loan would not check the depreciation, because the loan certificates, being negoctable, would operate as an increase of the circulating medium. I am of opinion they would have rather a contrary effect. It will take some time to reduce and settle money at its standard value; during that time the certificates would be of so much more value than the bills of credit that no one would offer them [...]n lieu of money. This standard value of money when settled will nor be better than the mere principal of the certificates; the growing interest will there­fore keep the latter more valuable, and they will remain locked up as a precious kind of property, or become objects of purchase which would enhance the value of money by increasing [...]s uses.

These observations suppose an apparent appreciation of money, and hence arises another objection, viz. That it increases the na­tional debt by so much as the money appreciates in value. The idea on which this objection is founded I take to be illusive. Ab­stractedly considered, the measures proposed, supposing them to have the defired effect, will not work any real appreciation: it will only reduce money to its natural and proper state, like an ingredient thrown into fermenting or boiling liquor to subside the froth and reduce its surface to a proper level. Will any one pretend that be­cause money is at present blown up by unnatural causes, as it were, into a bubble, we are to seize the occasion and measure its contents by its surface? As well might we take the depth of water in a river by measuring from the top of the surge in a storm.

It is said also that these terms will afford too great an advantage to the money-holders, who have purchased it, and therefore can afford to part with it, at a much greater rate of depreciation; and that, as prices will not suddenly come down to the proper rate, it will be too great a sacrifice of the public interest to borrow money at a depreciation of eight for one, and issue it at fifteen or twenty. —Arguments of this kind are like placing a farthing so near the eye as to obscure a broad piece at a distance: And besides, they prove too much. A considerable part of the money emitted has been issued at a par with gold and silver, and at different rates of depreciation within the fine now proposed to be drawn. Would not this doc­trine [Page 15]hold up to the individuals who received it at these rates, a claim of compensation for all the depreciation since they received it? The public treasury must be supplied; and the means necessary to obtain that supply must be used. This appa­rent sacrifice on the part of the public (though in effect it amounts to little) appears to me absolutely necessary as the only means by which a sufficient supply can be raised in due season. I doubt not but that a considerable sum of money might be raised on a more scanty plan; but unless a sum sufficient for the purpose is procur­ed, it would fail of the proper effect. And shall we risk our de­pendance on doubtful experiments when a failure might prove fa­tal? Great affairs must be managed on a large and liberal scale. Many considerations which claim our attention in the oeconomy of our private affairs, cease to pertain to oeconomy in larger concerns. Too great an attention to small savings in national affairs not unfre­quently occasions the loss of great advantages.

The evils arising from the instability and want of force in money are too numerous to admit of particular mention, and too glaring not to be seen. Turn which way we will they present themselves to our view. All our public dapartments are labouring in the midst of difficulties which daily threaten their total obstruction; these I apprehend will in a great measure vanish the moment the proposed scheme shews its power of success. We may want large supplies of articles to be purchased for years to come, the prices of which will depend on the value of money: If therefore this mea­sure will place money on such a footing as to restore its activity and usefulness as a medium, and reduce prices to a settled standard, how much more valuable is the object than the expence of obtain­ing it? Thousands of those who now devote themselves to no o­ther pursuit than speculating in a destructive intermediate traffic be­tween the importer and the consumer of goods, would be turned to useful employments, or at least become harmless members of so­ciety. A great part of that legion of subalterns now necessary to effect the business of the staff departments of the army, instead of being incumbents upon, would become more useful members of the community. The necessary supplies for the army, which are now with difficulty found in their various recesses, reluctantly parted with by their respective owners, and drawn to the proper magazines at an amazing expence of labour as well as money, would be of­fered for sale in plenty at the most convenient places for their re­ception. Commerce would again resume its natural course, in which alone it can flourish, and every individual of the communi­ty with the wonted ease would be accomodated by supplying his wants, and disposing of such commodities to advantage as he might have to spare. Industry, the only true source of wealth and nati­onal [Page 16]strength, would be excited, and the necessaries and conveni­ences of life would abound even in the midst of war.

But a consideration of more immediate weight in our present cir­cumstances is the probability of its shortening the duration of the war. The remaining hopes of conquest, which for some time past have had little else but the derangement of our finances to keep them a­live in the minds of our enemies, would expire on our effecting a proper reformation in this respect▪ They would then probably give over the delusive pursuit and seek for peace; or at least apply their force to other objects so as to relieve us from the great exer­tions their continued invasions have hitherto occasioned.