206. Revolutionary Finance (1781)
This letter was sent to John Laurens, as a basis of information for his mission abroad. For Washington, see No. 195 above. — Bibliography of Revolutionary finance : Winsor, Narrative and Critical History, VII, 81 ; W. G. Sumner, Financier [Morris] and Finances of the American Revolution ; Bolles, Financial History of the United States, I, 1-332; Channing and Hart, Guide, § 151.
IN compliance with your request I shall commit to writing the result of our conferences on the present state of American affairs, in which I have given you my ideas with that freedom and explicitness, which the objects of your commission, my entire confidence in you, and the exigency demand. To me it appears evident :
1st. That, considering the diffused population of these States, the consequent difficulty of drawing together its resources, the composition and temper of a part of the inhabitants, the want of a sufficient stock of national wealth as a foundation for revenue, and the almost total extinction of commerce, the efforts we have been compelled to make for carrying on the war have exceeded the natural abilities of this country, and by degrees brought it to a crisis, which renders immediate and efficacious succors from abroad indispensable to its safety.
2dly. That, notwithstanding, from the confusion always attendant on a revolution, from our having had governments to frame and every species of civil and military institutions to create, from that inexperience in affairs necessarily incident to a nation in its commencement, some errors may have been committed in the administration of our finances, to which a part of our embarrassments are to be attributed ; yet they are principally to be ascribed to an essential defect of means, to the want of a sufficient stock of wealth, as mentioned in the first article, which, continuing to operate, will make it impossible by any merely interior exertions to extricate ourselves from those embarrassments, restore public credit, and furnish the funds requisite for the support of the war.
3dly. That experience has demonstrated the impracticability long to maintain a paper credit without funds for its redemption. The depreciation of our currency was in the main a necessary effect of the want of those funds ; and its restoration is impossible for the same reason, to which the general diffidence that has taken place among the people
