The Continentalist No. IV, [30 August 1781]
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.
The other numbers of “The Continentalist” are dated July 12, 19, August 9, 1781;
April 18, July 4, 1782.
2. See H to Robert Morris, April 30, 1781, for H’s calculation of the
“difference between our revenues and expences.”
3. Robert Morris was named Superintendent of Finance on February 20, 1781
Authorial notes
[The following note(s) appeared in the margins or otherwise outside the text
flow in the original source, and have been moved here for purposes of the
digital edition.]
* Two-pence an acre on cultivated and a half penny on uncultivated land, would
answer the purpose, and would be so moderate as not to be felt. A small tax on
uncultivated land would have the good effect of obliging the proprietor either
to cultivate it himself, or to dispose of it to some person, that would do it
‡ Suppose a dollar or even a half a dollar per head.
† It might indeed be a good restraint upon the spirit of running in debt with
which governments are too apt to be infected, to make it a condition of the
grants to Congress, that they shall be obliged in all their loans to appropriate
funds for the payment of principal as well as interest; and such a restriction
might be serviceable to public credit.
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