Financing the New Nation at the End of the American Revolution de ROBERT MORRIS - 1782

On October 19, 1781, the date of the British surrender at Yorktown, Robert Morris, as Superintendent of Finance of the United States, sent a circular to the governors of each of the states. In it, he asserted that "It is high time to relieve ourselves from the ignominy we have already sustained, and to rescue and restore the national credit. This can only be done by solid revenue."

On January 3, 1782, Morris sent this letter to William Moore, the President of the Supreme Executive Council of Pennsylvania. He also sent copies to President of New Hampshire John Langdon, Governor of Connecticut Jonathan Trumbull, and Governor of Virginia Benjamin Harrison V.

Complete Transcript

Office of Finance / 3rd January 1782.

Sir

I enclose the Copy of a Letter written this day to the States of Massachusetts, Rhode Island and Maryland. It is unnecessary to say any thing on the Subject to your Excellency as you will see and feel with me the urgency of the occasion.

It gives me great pain to make such a Representation and especially as those States deserve applause for their former Exertions.

I have the Honor to be / with very great Respect

Sir / Your Excellency's /

most Obedient / & / Humble servant

Robt Morris

The circular that Morris enclosed (see below) explained that although it had been eleven months since Congress recommended a 5 percent tariff, Massachusetts, Rhode Island, and Maryland had not complied. He urged them "that this great object be seriously considered."

On January 7, 1782, Morris wrote to Benjamin Franklin in France, including copies of his letters to the states and commenting, "as you will perceive has not been agreed to by Massachusetts Rhode Island and Maryland. The States of South Carolina and Georgia were not called upon but I have transmitted the requisition to them now that they are in a Situation to pass Laws by the meeting of their Legislatures which has by this Time taken Place."

At Morris's urging, Congress enacted ordinances in February 1782 for the settlement of the accounts of the Revolution, but it remained to be seen whether the states would raise the necessary money.

On May 2, Morris offered Alexander Hamilton the position of receiver of continental taxes for the state of New York, but Hamilton initially declined, replying that the income would be poor and that he planned to concentrate on a law practice. However, Hamilton served in the position from June to November 1782, when he began representing New York in the Congress of the Confederation. Hamilton passed the bar exam in July and was licensed to practice in New York in October 1782.

In July 1782, Morris issued his "Report on Public Credit," which called on the new country to pay its war debt through new revenue measures, including a federal tariff of five percent on all imported goods. However, the plan would require an amendment to the recently approved Articles of Confederation. While the Articles gave Congress the power to conduct foreign policy, states retained all power over funding and were reluctant to give it up. By late 1782, all of the states but Rhode Island had agreed to an amendment allowing the tariff, but that state's opposition was enough to block the amendment.

As members of the Confederation Congress, Hamilton and Morris attempted to use the Newburgh Conspiracy by disaffected Continental Army officers to secure support from the states and Congress for funding the federal government. Unsuccessful, they had to await the formation of a new federal government under the Constitution for the federal government to have effective authority to raise revenue through taxes.

Robert Morris (1734-1806) was born in Liverpool and immigrated to Maryland at the age of 13. His father later sent him to Philadelphia to study, and in 1757, he became a partner in a banking and shipping firm, which lasted until 1779. A delegate to the Second Continental Congress, he opposed the motion for independence but abstained in the final vote. He signed the Declaration of Independence after it passed. He personally paid £10 million to fund the American army during the Revolutionary War and was critical to the new government's success. He signed the Articles of Confederation in 1778, and in 1781, Congress appointed him as Superintendent of Finance of the United States, a position he held until 1784. Elected to the Constitutional Convention in 1787, Morris nominated his friend George Washington as its president, and he signed the new constitution. Washington wanted to appoint Morris as Secretary of the Treasury, but Morris declined and suggested Alexander Hamilton. Morris served as U.S. Senator from Pennsylvania from 1789 to 1795. Deeply engaged in land speculation, he bought millions of acres of land in western New York from Massachusetts in 1791.

William Moore (1735-1793) was born in Philadelphia and became a successful merchant like his father. He supported colonial protests against the Stamp Act in 1765, but was more moderate than some early revolutionaries. After his son joined the Continental Army in 1775, Moore supported the revolutionary cause. He was a member of Pennsylvania's Council of Safety and Board of War. Elected to the Continental Congress, he declined to serve, preferring instead to be a member of the Supreme Executive Council of Pennsylvania. He served as its vice-president from November 1779 to November 1781, then as its president from November 1781 to November 1782. In 1784, he was elected to the Pennsylvania General Assembly.

Full Text of Enclosed Circular to the Governors (not included)

Office of Finance, January 3d, 1782.

Sir,

Although it is now eleven months since Congress recommended an impost of five per cent on goods imported, and on prizes and prize goods, the States of Massachusetts, Rhode Island, and Maryland, have not yet complied with that recommendation.

I will not repeat the arguments to induce a compliance, which are contained, either in my letter of the 27th of July, or elsewhere; that is unnecessary. The object of this letter is to make a representation, which can no longer be delayed consistently with the duties I owe, either to

myself, or my country. And although it is principally designed for those three States just mentioned, yet I transmit it to the other States, (in a letter, of which the copy is enclosed,) because all ought to know what is interesting to all.

Convinced that the impost recommended was not sufficient, I had devised some additional funds for the payment of our debts, and the support of our credit. These I should have submitted to the consideration of Congress, had the States complied with their former recommendations.

In a circular letter, dated the 19th of October last, I had the honor to mention an order prohibiting Loan Officers from issuing certificates in payment of interest, together with the reasons for which it was made. That order has already produced much clamor among the public creditors. This I expected, and I still expect that it will occasion much more.

The public debt is considerable, and the public credit must be lost, if the interest of it be not provided for. Congress have done their duly in requesting revenue, and I have done mine in soliciting a compliance with their request. It only remains for me to bear testimony against those who oppose that compliance, and to declare, that they and they only, must be responsible for the consequences. They are answerable to the other States, to their fellow citizens, to the public creditors, and to the whole world.

I must speak plainly on this subject. I must point out from time to time, the reason of those things, which have produced murmurs and complaints against the representative body of America. I must direct those who suffer, to those who occasion their sufferings, and those who are injured to those who have done them wrong. Let me then once more entreat, that this great object be seriously considered. Let me repeat, that the hope of our enemy is in the derangement of our finances; and let me add, that when revenue is given, that hope must cease. He, therefore, who opposes the grant of such revenue, not only opposes himself to the dictates of justice, but he labors to continue the war, and of consequence to shed more blood, to produce more devastation, and to extend and prolong the miseries of mankind.

1 have the honor to be, &c.

Robert Morris.