Both armies have formed their junction of be-
tween four and five thousand men.
tween four and five thousand men.
Hamilton - 1834 - Life on Hamilton - v1
His high place in the
confidence of the commander, gave him an influence in
rendering those kindnesses which the situation of foreigners
peculiarly required; and his readiness, on all occasions, to
promote their wishes, led them to regret his leaving head
quarters, as an event by which they had lost a friend, on
whose affection they could repose every reliance.
Considerations of mere gratitude or interest were not
alone in recommending him to their regard. In the situa-
tion of the country, few of its young soldiers had enjoyed
those advantages, which enabled them to enter into the
gayeties of French manners, and to give zest to a society,
of which the usages were so unlike those then prevailing in
America. His command of their language, a natural turn
for pleasantry, a happy facility in adapting himself to the
vol. i. 43
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? 338 THE LIFE OF
character of his associates, a freedom from those prejudi-
ces above which persons of the most distinguished merit
do not always rise, and his warmth of heart, and romantic
temper, rendered him a welcome inmate to their conviviali-
ties, and gave him the first place among the American offi-
cers in their affections.
La Fayette, his early, his constant, his illustrious friend,
as he had been privy to many of the most confidential inci-
dents of Washington's life, and was aware of the import-
ance of Hamilton's services, seemed most to have regretted
it, and with the same warmth which he had shown in en-
deavouring to promote Hamilton's wishes on former occa-
sions, now sought to produce a reconciliation; but, as he
says, "when, after having explained the delay privately, he
expressed to each of them his own feelings, he found each
disposed to believe the other was not sorry for the separa-
tion. It did not, however, go farther than leaving the fami-
ly; the advice of Hamilton has since, in several circum-
stances, been friendly asked by the commander-in-chief. "
The following letters addressed to him, a short time after
this event, are indicative of the feelings which were enter-
tained towards him.
LA FAYETTE TO HAMILTON.
Elk, April 10th, 1781.
Where is, for the present, my dear Hamilton? This
question is not a mere affair of curiosity. It is not even
wholly owing to the tender sentiments of my friendship.
But motives, both of a public and private nature, conspire
in making me wish that your wo be not accomplished.
Perhaps you are at head quarters, perhaps at Albany; at
all events, I'll tell you my history.
Had the French fleet come in, Arnold was ours. The
more certain it was, the greater my disappointment has
been; at last it has become necessary for them to return
to Rhode-Island. I think they have exerted themselves for
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? HAMILTON. 339
the common good, and this has been a comfort in our mis-
fortune. Having luckily arrived at Elk by water, which
at first I had no right to expect, I have received the Ge-
neral's letter. If you are at head quarters, you will have
seen my correspondence with the General; if not, I tell you
that I am ordered to the southern army, and the General
thinks that the army under his immediate command will
remain inactive. After a march of forty days, we will ar-
rive at a time when the heat of the season will put an end
to operations. This detachment is so circumstanced, as to
make it very inconvenient for officers and men to proceed.
Before we arrive, we shall perhaps be reduced to five or
six hundred men.
There will be no light infantry formed, -- no attack
against New-York, -- none of those things which had flat-
tered my mind.
If a corps is sent to the southward by land, it ought to
have been the Jersey line, because if we weaken ourselves,
New-York will be out of the question.
Monsieur Destouches will, I think, propose to the Gene-
ral to send to Philadelphia l'Eveille, and all the frigates;
these, with the frigates now at Philadelphia, would carry
fifteen hundred men to whatever part of the continent the
General would think proper. We could then go to Mor-
ristown, there to form a new corps of light infantry upon
the principles at first intended, and embarking in the first
days of May, we could be at Wilmington, Georgetown, or
any where else, sooner than we can now be by land.
I would have the battalions composed of six companies;
-- colonels employed, Webb, Sprout, Huntington, Olney,
Hull, Barber, Gimat, Laurens; -- Majors Willet, Fish,
Gibbes, Inspector Smith, , and another; -- Brigadier
General Huntington and Scamell, and a good corps of ar-
tillery under ******. My dear friend, you would be more
important at head quarters; but if you don't stay there,
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? 340 TBI LIFE OF
you know what you have promised to me. Adieu. Write
me often and long letters. It is probable I will be in the
southern wilderness until the end of the war, far from head
quarters, from the French army, from my correspondence
with France; but the whole good I could have operated, in
this last instance, must have taken place by this time. My
best respects and affectionate compliments wait on Mrs.
Hamilton.
Most friendly, yours,
La Fayette.
On the eighteenth, (April,) he writes him from the Sus-
quehanna:
"DEAR HAMILTON,
"You are so sensible a fellow, that you can certainly ex-
plain to me what is the matter that New-York is given up;
that our letters to France go for nothing; that while the
French are coming, I am going. This last matter gives
great uneasiness to the Minister of France. All this is not
comprehensible to me, who having been long from head
quarters, have lost the course of intelligence.
"Have you left the family, my dear sir? I suppose so;
but from love to the General, for whom you know my af-
fection, I ardently wish it was not the case; -- many, many
reasons conspire to this desire of mine. But if you do leave
it, and if I go to exile, come and partake it with me.
"Yours,
"1. f. "
The approaching period of service, and the hopes which
began to be indulged of an active campaign, inspired Ha-
milton with a strong desire to obtain a situation in which
he might seize the first opportunity to increase his reputa-
tion. The letters of his friends, and especially those receiv-
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? HAMILTON. 341
ed from the Marquis, quickened his wishes, and with a de-
termination to continue in the service until the independ-
ence of the country was secured, he now resolved to renew
his application for a separate command, which had failed
in the preceding autumn; and with this view addressed the
following letter to the commander-in-chief.
SIB,
I imagine your excellency has been informed, that in
consequence of the resolution of congress for granting com-
missions to aid-de-camps appointed under the former esta-
blishment, I have obtained one of lieutenant colonel in the
army of the United States, bearing rank since the first of
March, 1777.
It is become necessary to me to apply to your excellency,
to know in what manner you foresee you will be able to
employ me in the ensuing campaign. I am ready to enter
into activity whenever you think proper; though I am not
anxious to do it till the army takes the field, as before that
period I perceive no object.
Unconnected as I am with any regiment, I can have no
other command than in a light corps, and I flatter myself
my pretensions to this are good.
Your excellency knows I have been in actual service
since the beginning of '76. I began in the line, and had I
continued there, I ought, in justice, to have been more ad-
vanced in rank than I now am. I believe my conduct in
the different capacities in which I have acted, has appeared
to the officers of the army in general such as to merit their
confidence and esteem; and I cannot suppose them to be
so ungenerous as not to see me with pleasure put into a
situation still to exercise the disposition I have always had,
of being useful to the United States. I mention these things
only to show that I do not apprehend the same difficulties
can exist in my case, (which is peculiar,) that have opposed
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? 342 THE LIFE OF
the appointment to commands of some other officers, not
belonging to what is called the line.
Though the light infantry is chiefly formed, yet being
detached to the southward, I take it for granted there will
be a van guard by detachment formed for this army.
I have the honour to be, very respectfully,
Your excellency's most obedient servant,
A. Hamilton.
De Peyster's Point, April 27, 1731.
The following reply was immediately given.
New-Windsor, April 27th, 1781.
DEAR SIR,
Your letter of this date has not a little embarrassed me.
You must remember the ferment in the Pennsylvania line
the last campaign, occasioned by the appointment of Major
McPherson, and you know the uneasiness which at this
moment exists among the eastern officers, on account of
the commands conferred upon Colonel Gimat and Major
Galvan, although it was the result of absolute necessity.
Should circumstances admit of the formation of another
advanced corps, of which I see very little prospect from
present appearances, it can be but small, and must be
composed almost entirely of eastern troops; and to add to
the discontents of the officers of those lines, by the farther
appointment of an officer of your rank to the command of
it, or in it, would, I am certain, involve me in a difficulty
of a very disagreeable and delicate nature, and might, per-
haps, lead to consequences more serious than it is easy to
imagine. While I adhere firmly to the right of making
such appointments as you request, I am, at the same time,
obliged to reflect, that it will not do to push that right too
far, more especially in a service like ours, and at a time so
critical as the present.
?
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? HAMILTON. 343
I am convinced, that no officer can, with justice, dispute
your merit or abilities. The opposition heretofore made
had not been for the want of those qualifications in the
gentlemen who are, and have been, the objects of discon-
tent. The officers of the line contend, without having re-
ference to particular persons, that it is a hardship and re-
flection upon them, to introduce brevet officers into com-
mands, (of some permanency,) in which there are more op-
portunities of distinguishing themselves, than in the line of
the army at large, and with the men they have had the
trouble to discipline and to prepare for the field. My prin-
cipal concern arises from an apprehension that you will im-
pute my refusal of your request to other motives than those
I have expressed, but I beg you to be assured, I am only
influenced by the reasons which I have mentioned.
I am, dear sir,
Your obedient and humble servant,
Geo. Washington.
Hamilton, deeming his case one which ought to be distin-
guished from those which Washington had adduced as pre-
cedents, wrote him a farther letter, on the second of May.
SIR,
I am extremely sorry to have embarrassed you by my
late application, and that you should think there are insu-
perable obstacles to a compliance with it. Having re-
nounced my expectations, I have no other inducement for
troubling your excellency with a second letter, than to ob-
viate the appearance of having desired a thing inconsistent
with the good of the service, while I was acquainted with
the circumstances that made it so.
I was too interested a spectator of what happened in the
case of Major McPherson, not to have remarked, and not
to recollect, all the circumstances. The opposition turned,
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? 344 THE LIFE OF
ostensibly, on his being a brevet officer, yet having a com-
mand in a corps formed entirely from one line; the pro-
priety of his being employed in a detachment from the ar-
my at large, so far as I remember, was not disputed. In
delicacy to Major McPherson, no personal objections were
formally made, but in reality they existed and contributed
to the discontent. It was thought a peculiar hardship, that
a gentleman who had, for a long time, fought against us,
and had not taken part with us till a late period, and when
our affairs had assumed a more prosperous aspect, should
be preferred in one of the most honorary commands of the
service. Your excellency must be convinced, that I men-
tion this in no other view than to show the sentiments of
the officers at the time, and the whole grounds of the oppo-
sition. My esteem for Major McPherson, and other rea-
sons, make it impossible I can have a different intention.
I know less of the motives of dissatisfaction in the cases
of Colonel Gimat and Major Galvan; but I have under-
stood, that it is founded on their being appointed in the light
corps for two successive campaigns.
It would be uncandid in me not to acknowledge, that I
believe a disposition to exclude brevet officers in general
from command, has a great share in the opposition, in every
instance, and that so far it affects my case. But, at the same
time, it appears to me, this principle alone can never be pro-
ductive of more than momentary murmurs, where it is not
seconded by some plausible pretext. I also am convinced,
that the Pennsylvania officers, for their own sakes, repented
the rash steps they had taken, and, on cool reflection, were
happy in an opportunity to relinquish their menaces of quit-
ting a service to which they were attached by habit, inclina-
tion, and interest, as well as by patriotism. I believe, too,
we shall never have a similar instance in the army, unless
the practice should be carried to excess. Major Galvan, I
am told, will probably be relieved. Colonel Gimat will be
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? HAMILTON. 345
then the only brevet officer remaining in command. Your
excellency is the best judge of the proper limits; and there
can be no doubt, that the rights of particular officers ought
to give place to the general good and tranquillity of the ser-
vice,
I cannot forbear repeating, that my case is peculiar, and
dissimilar to all the former; ^-- it is distinguished by the cir-
cumstances I have before intimated, -- my early entrance
into the service, -- my having made the campaign of '76,
the most disagreeable of the war, at the head of a company
of artillery, and having been entitled, in that corps, to a
rank, equal in degree, more ancient in date, than I now pos-
sess, -- my having made all the subsequent campaigns in
the family of the commander-in-chief, in a constant course
of important and laborious service. These are my preten-
sions, at this advanced period of the war, to being employed
in the only way which my situation admits; and I imagine
they would have their weight in the minds of the officers in
general. I only urge them a second time, as reasons which
will not suffer me to view the matter in the same light with
your excellency, or to regard as impracticable my appoint-
ment in a light corps, should there be one formed. I en-
treat they may be understood in this sense only. I am in-
capable of wishing to obtain any object by importunity.
I assure your excellency, that I am too well persuaded of
your candour, to attribute your refusal to any other cause
than an apprehension of inconveniences that may attend the
appointment.
I have the honour to be, with perfect respect, sir,
Your most obedient and humble servant,
A. Hamilton.
P. S. I have used the term brevet in the sense your excel-
lency appears to have understood it, as signifying, in gene-
ral, all officers not attached to any established corps. Con-
vol. i. 44
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? 346 TUE LIFE OF
gress, however, seem to have made a distinction; they give
only a kind of warrant to those whom they designate as
brevet officers; mine is a regular commission.
De Peyster's Point, May 2d, 1781.
Within a short time after this correspondence closed, a
letter was received from La Fayette, dated Richmond,
May 23, 1781.
MY SEAR HAMILTON,
I have been long complaining that I had nothing to do;
and want of employment was an objection I had to my
going to the southward. But for the present, my dear
friend, my complaint is quite of an opposite nature; and I
have so many arrangements to make, so many difficulties
to combat, so many enemies to deal with, that I am just
that much of a general as will make me an historian of mis-
fortunes, and nail my name upon the ruins of what good
soldiers are pleased to call the army in Virginia.
There is an age past since I heard from you. I acknow-
ledge that, on my part, I have not written so often as I
ought to have done; but you will excuse this silence in
favour of my very embarrassing circumstances. However
remote you may be from your former post of aid-de-camp
to the commander-in-chief, I am sure you are nevertheless
acquainted with every transaction at head quarters. My
letters have served to your information, and I shall conse-
quently abstain from repetitions.
Our forced march saved Richmond. Philips was going
down, and thus far I am very happy. Philips' return, his
landing at Brendon, south side of James river, and the un-
molested joining of Lord Cornwallis through North Caro-
lina, made me apprehensive of the storm that was gather-
ing. I advanced towards Petersburg, and intended to have
established a communication upon James and Appamatox
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? HAMILTON. 347
rivers. Had Philips marched to Halifax, I was determined
to follow him, and should have risked every thing rather
to omit making a diversion in favour of Greene. But that
army took possession of Petersburg, and obliged me to
stick to the side of the river, whence reinforcements are
expected.
Both armies have formed their junction of be-
tween four and five thousand men. We have no continen-
tals; their infantry is near five to one; their cavalry ten to
one. Our militia are not numerous, without arms, and are
not used to war. Government wants energy; and there
is nothing to enforce the laws. General Greene has di-
rected me to take command in this state, and I must tell
you, by the way, his letter is very polite and affectionate.
It then became my duty to arrange the departments, which
I found in the greatest confusion and relaxation; nothing
can be obtained, and yet expenses are enormous. The Ba-
ron, and the few new levies we could collect, are ordered
to South Carolina. I am glad he goes, as the hatred of the
Virginians to him was pretty hurtful to the service. Is it
not strange that General Wayne's detachment cannot be
heard of? They are to go to Carolina; but should I have
them for a few days, I am at liberty to keep them. This
permission I will improve so far as to receive one blow,
that, being beat, I may at least be beat with some decency.
There are accounts that Lord Cornwallis is very strong,
others make him very weak. In this country there is no
getting good intelligence. I request you will write me, if
you approve of my conduct. The command of the waters,
the superiority in cavalry, and the great disproportion of
forces, gave the enemy such advantages that I durst not
venture out, and listen to my fondness for enterprise; to
speak truth, I was afraid of myself as much as of the ene-
my. Independence has rendered me the more cautious, as
I know my own warmth; but if the Pennsylvanians come,
Lord Cornwallis shall pay something for his victory.
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? 348 Tilt: LIFE OF
I wish a reinforcement of light infantry, to recruit the
battalions, or a detachment under General Huntington was
sent to me. I wish Laurens or Sheldon were immediately
despatched with some horse. Come here, my dear friend,
and command our artillery in Virginia. I want your ad-
vices and your exertions. If you grant my request, you
will vastly oblige your friend,
La Fayette.
Having completed the details of circumstances of a per-
sonal nature, we now return to events of more general in-
terest.
The suggestions which had been made by Hamilton to
Mr. Duane, in the preceding summer, although they led to
no immediate measures, were presented by the latter to the
consideration of his friends in congress, and became the
subject of much serious reflection. The diminished import-
ance which that body felt would result from the proposed
transfer of their direct patronage, by the abolition of the
various subsidiary boards, to executive departments, and
the vanity of individuals who had long been most active in
the committees, all concurred to delay the measure; but
the good sense of congress at last prevailed. The new
board of treasury, with all its complicated branches, was
found wholly incompetent to its objects,. and a committee of
congress, which had been appointed to devise a system for
the arrangement of " the civil executive departments," re-
ported a plan for the establishment of a secretary of foreign
affairs, which was followed by a farther report, recom-
mending* the appointment of a superintendent of finance,
a secretary of war, and of the marine; and in the course
of the year, Robert R. Livingston was chosen to the depart-
ment of state, Robert Morris superintendent of finance, Ge-
* February, 1781.
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? HAMILTON. 349
neral McDougal secretary of the marine, and General Lin-
coln secretary at war. *
The pressure of the exigencies, and more enlightened
counsels, which had induced congress to part with such an
essential portion of their authority, in the creation of these
departments, influenced them, at the same time, to adopt
another measure, which, had it been carried into effect,
would have at once restored the public credit, secured re-
sources for the discharge of the debt, and established a per-
manent basis for a general and adequate system of finance.
It was a motion, by Dr. Witherspoon, that the United
States should be empowered to superintend the commercial
regulations of every state, so that none might take place
that should be partial, or contrary to the common interest;
and that they should be vested with the exclusive right of
laying duties on all imported articles; no restriction to be
valid, and no such duty to be laid, but with the consent of
nine states, with provisions to secure uniformity. The en-
larged views embraced in this resolution were not sanc-
tioned; but another measure of great moment was recom-
mended,-- that the states should confer on congress the
power of levying an impost of five per cent, on imported
articles, to be applied to the discharge of the debts incurred
for supporting the war, and to continue until they were dis-
charged.
* In a letter from Samuel Adams, of the 9th December, 1783, he says,
"Power will follow the possession of money, even -when it is known that it
is not the possessor's property; so fascinating are riches in the eyes of man-
kind. Were our financier, I was going to say, even an angel from heaven, I
hope he will never have so much influence, as to gain the ascendency over
congress, which the first lord of the treasury has long had over the parliament
of Britain, -- long enough to effect the ruin of that nation. These are the fears
which I expressed in congress, when the department was first instituted. I
was told, that the breath of congress could annihilate the financier; but I re-
plied, that the time might come, and if they were not careful, it certainly
would, wlen even congress would not dare to blow that breath: whether
these fears are the mere creatures of the imagination, you will judge. "
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? 350 THE LIFE OF
On the thirtieth of July, 1777, an adjourned convention
of delegates from several states was held at Springfield,
which proposed the abolition of a limitation of prices; the
gradual "drawing in" of the paper money; and its being
funded at an interest of six per cent. , and a system of taxa-
tion as a mean to this object. This subject was resumed by
a convention which assembled at Hartford, in October, 1779,
and which adjourned to meet in Philadelphia in the following
January, when resolutions were adopted, recommending
that Virginia should appoint commissioners to convene at
Hartford in the ensuing autumn. The deliberations of this
convention produced an early attention to this subject in
congress; and in March, 1780, a motion was made by Mr.
Burke, of North Carolina, " that the states be requested to
pass laws, enabling congress to levy an impost of one per
cent, on all exports and imports, as a fund for sinking the
emissions for carrying on the present war; to continue un-
til a sum equal to the whole of the said emissions shall 1)e
. collected," which was lost.
Nine commissioners assembled at Hartford, in pursuance
of their adjournment, among whom were Judge Hobart
and Egbert Benson of New-York. Upon much delibera-
tion, a paper was addressed to congress, which, after touch-
ing upon several military matters, recommends, in the sixth
article of their proceedings, that an estimate be made of all
the interest due on loan office certificates, and on all other
debts incurred by continental purchasing officers; that
taxes should be imposed by congress on certain specific ar-
ticles; or duties on imports, which the states should author-
ize them to levy and collect. This authority only to take
effect with the concurrence of all the states not in posses-
sion of the enemy; the proceeds to be appropriated to the
payment of the interest of the debt. A return of the white
and black inhabitants was also recommended, and a conti-
nental judicature, of three persons, to try offences against
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? HAMILTON. 351
the laws of congress, was suggested. This letter was read
in congress, on the twelfth of December, 1780, and in Feb-
ruary following, Egbert Benson was appointed procurator. *
The important proposal of a national impost, which be-
came the leading subject of controversy during many years,
that on which the whole system of public credit depended,
and which may be considered as the most prominent in
the train of events that led to the adoption of the federal
constitution, was resisted by the jealousy of several of the
commercial states, who imagined, that by entrusting con-
gress with the control of their customs, they were parting
with every essential attribute of sovereignty.
Nothing seemed left to relieve the finances of the coun-
try, but the adoption of some measure by which a new
"mass of credit" could be created, and the depreciated pa-
per replaced by a currency of fixed value, adequately sus-
tained. A recent resolution! of congress, passed with but
one dissenting voice, "to pay all the debts which had been
liquidated in specie value, or which had been, or should be,
made payable in specie or its equivalent, actually in specie
or its equivalent," and a recommendation to the states to
amend their laws, making the bills of credit emitted under
the authority of congress a legal tender, so that they should
not be a tender in any other manner than at their current
value, compared with gold and silver, gave evidence of a
sound state of public opinion.
Encouraged by these indications, Hamilton resumed his
* Among the proposals to invigorate the confederation, was one made on
the sixteenth March, 1781, that under a construction of the thirteenth article
of the confederation, it should be so amended, "that if any state refused to ob-
serve all the articles of the confederation, congress should be empowered to
authorize the land and naval forces of the United States to compel such state
to fulfil its federal engagements, and also to make restraint on its merchan-
dise. "
f March sixteenth, 1781.
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? 352 THE LIFE OF
plan of a national bank, of which the first suggestion was
made by him to Robert Morris.
The Bank of Pennsylvania, which had been established
in June, though partial in its objects, having been a bank
merely of deposit, not of issue, had given congress such
aid as predisposed them to the adoption of a more exten-
sive system.
The character of the individual who had been elected su-
perintendent of finance, encouraged Hamilton to hope for
the attainment of his project; and with this view, on the
thirtieth of April, 1781, he addressed an elaborate letter to
Mr. Robert Morris, the fruits of his leisure, since he had been
relieved from the duties of aid-de-camp, discussing at large
the causes of the depreciation, and indicating the means of
raising the value of the currency, and at the same time en-
closing a charter for a bank to be incorporated by congress.
This plan was prefaced by the following observations:
April 30th, 1781.
I was among the first who were convinced that an ad-
ministration by single men was essential to the proper
management of the affairs of this country. I am persuaded
it is the only resource we have to extricate ourselves from
the distresses which threaten the subversion of our cause.
It is palpable that the people have lost all confidence in our
public councils, and it is a fact, of which I dare say you are
as well apprized as myself, that our friends in Europe are
in the same disposition. I have been in a situation that
has enabled me to obtain a better idea of this than most
others, and I venture to assert, that the court of France
will never give half the succours to this country while con-
gress hold the reins of administration in their own hands,
which they would grant if these were entrusted to indivi-
duals of established reputation, and conspicuous for probity,
abilities, and fortune.
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? HAMILTON. 353
With respect to ourselves, there is so manifest and rooted
a diffidence of the government, that if we could be assured
the future measures of congress would be dictated by the
most perfect wisdom and public spirit, there would be still
a necessity for a change in the forms of our administration,
to give a new spring and current to the passions and hopes
of the people. To me it appears evident, that an executive
ministry, composed of men with the qualifications I have
described, would speedily restore the credit of government
abroad and at home; would induce our allies to great exer-
tions in our behalf; would inspire confidence in moneyed
men in Europe, as well as in America, to lend us those
sums of which it may be demonstrated we stand in need,
from the disproportion of our national wealth to the ex-
penses of the war.
I hope, sir, you will not consider it a compliment, when
I assure you that I heard, with the greatest satisfaction, of
your nomination to the department of finance.
In a letter of mine last summer to Mr. Duane, urging,
among other things, the plan of an executive ministry, I
mentioned you as the person who ought to fill that depart-
ment. I know of no other in America who unites so many
advantages; and, of course, every impediment to your ac-
ceptance is to me a subject of chagrin. I flatter myself,
congress will not preclude the public from your services, by
an obstinate refusal of reasonable conditions; and as one
deeply interested in the event, I am happy in believing you
will not easily be discouraged from undertaking an office,
by which you may render America and the world no less a
service than the establishment of American independence.
'Tis by introducing order into our finances, by restoring
public credit, not by gaining battles, that we are finally to
attain our object. 'Tis by putting ourselves in a condition
to continue the war, not by temporary, violent, and unnatu-
ral efforts to bring it to a decisive issue, that we shall in
vol. i. 45
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? 354 THE LIFE OP
reality bring it to a speedy and successful one. In the
frankness of truth, I believe, sir, you are the man best capa-
ble of performing this great work.
In expectation that all difficulties will be removed, and
that you will ultimately act on terms you approve, I take
the liberty to submit to you some ideas, relative to the ob-
jects of your department. I pretend not to be an able
financier. It is a part of administration which has been
least in my way, and of course has least occupied my inqui-
ries and reflections; neither have I had leisure or materials
to make accurate calculations. I have been obliged to de-
pend on memory for important facts, for want of the au-
thorities from which they are drawn.
With all these disadvantages, my plan must necessarily
be crude and defective; but it may be a basis for something
more perfect, or if it contains any hints that may be of use
to you, the trouble I have taken myself, or may give you,
will not be misapplied. At any rate, the confidence I have
in your judgement, assures me that you will receive with
pleasure communications of this sort. If they contain any
thing useful, they will promote your views, and the public
benefit; if not, the only evil is the trouble of reading them;
and the best informed will frequently derive lights even
from the reveries of projectors and quacks. There is scarcely
any plan so bad as not to have something good in it. I trust
mine to your candour, with this apology, -- you will at least
do justice to my intention.
With these preliminary remarks, he proceeds to the in-
quiry as to "what ought to be done in the finances of the
United States? " First, to estimate its capacity for reve-
nue, and the proportion between its abilities and its wants,
by examining the proportion the revenues other countries
have borne to theirwealth, and applying the rule to Ame-
rica. Second, by comparing the result of that rule with the
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? HAMILTON. 355
product of taxes in those states which have been most ear-
nest in taxation.
The result obtained, by an examination applied to Great
Britain, France, and the United Provinces was, that the re-
venue is one fourth of the circulating cash in commercial
countries, so far as this is a just representative of its labour
and commodities.
He then states the current cash of America, previous to
the war, to have been about thirty millions of dollars, of
which one eighth was specie; and that the proper revenue,
at that time, was seven and a half million of dollars. But
as the system of taxation was carried to an extreme in those
countries, that the rule is inapplicable in its full extent to
the United States; though a much larger amount than might
be expected, could be levied during the war, without bur-
thening the poorer classes, from the greater equality of for-
tunes, and a more equal division of the public burthens. --
Making the necessary qualifications, he arrives at the re-
sult, that the present revenue was one fifth less than it had
been before the war. Having adverted to the causes of the
diminished circulation, which he considers as principally
artificial, he comes to the conclusion, allowing for the dimi-
nution of foreign trade, and the loss of territory, that the
states have a nett revenue of six millions of dollars; a re-
sult which is nearly confirmed by a detailed examination of
the previous product of the taxes, of which Massachusetts
was supposed to have raised one fifth.
Taking this as the amount of revenue, he next proceeds
to ascertain, by general rules, the military capacity of the
country, which although it had at times risen to thirty thou-
sand men, might be estimated at twenty thousand. The
expenses incident to the support of which force, with the
necessary civil expenditures, rendering the amount of the
annual charges of the country less than eleven million of
dollars, left a deficit of four and a half millions to be supplied
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? 350 THE LIFE or
by credit, foreign or domestic. He then examines the pros-
pect from foreign loans, which taking into view the politi-
cal and financial embarrassments of France, he supposes
may justify an expectation of a loan annually of eight or ten
million of livres, which would only meet a third of the na-
tional wants.
From Spain, after remarking on her cold and passive
policy, in pursuance of which the bills drawn on her, though
not rejected, had not been paid, he expects nothing.
"Their method of prosecuting the war, can scarcely be re-
solved into Spanish supineness, but seems to have a more
corrupt original. A bigotted prince, governed by a greedy
confessor, is a character on which little dependence can be
placed. "
Holland, as a government, stands in need of all its credit
for its own uses. But from the Dutch capitalists much
might be expected, though not on the faith of the United
States, by the establishment of a system such as he is about
to propose. The prospects of internal loans to govern-
ment, both from the want of confidence, and the more ad-
vantageous terms of traffic in which individual wealth could
be employed, he rates very low.
"To surmount these obstacles," he observes,"and give
individuals ability and inclination to lend, a plan might be
devised which, by incorporating their means together, and
uniting them with those of the public, will, on the founda-
tion of that incorporation and union, erect a mass of credit
that will supply the defect of moneyed capital, and answer
all the purposes of cash. A plan which will not only ad-
vance the interest of the lenders, secure the independence
of their country, and in its progress have the most benefi-
cial influence upon its future commerce, but be a source of
national strength and wealth. I mean," he says, "the in-
stitution of a national bank. This I regard, in some shape
or other, as an expedient essential to our safety and sue-
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? HAMILTON. 357
cess, unless by a happy turn of European affairs, the war
should speedily terminate, in a manner upon which it would
be unwise to reckon. There is no other that can give to
government that extensive and systematic credit, which the
defect of our revenues makes indispensably necessary to
its operations. The longer it is delayed, the more difficult
it becomes. Our affairs grow every day more relaxed and
more involved. Public credit hastens to a more irretrievable
catastrophe. The means for executing the plan are exhaust-
ed in partial and temporary efforts. The loan now making
in Massachusetts, would have gone a great way in esta-
blishing the funds on which the bank must stand.
"I am aware of all the objections that have been made to
public banks, and that they are not without enlightened and
respectable opponents. But all that has been said against
them only tends to prove, that like all other good things,
they are subject to abuse, and when abused, become per-
nicious. The precious metals, by similar arguments, may
be proved to be injurious. It is certain that the monies
of South America have had great influence in banishing
industry from Spain, and sinking it in real wealth and im-
portance. Great power, commerce, and riches, or, in other
words, great national prosperity, may, in like manner, be
denominated evils; for they lead to insolence, an inordi-
nate ambition, a vicious luxury, licentiousness of morals,
and all those vices which corrupt a government, enslave the
state, and precipitate the ruin of a nation.
confidence of the commander, gave him an influence in
rendering those kindnesses which the situation of foreigners
peculiarly required; and his readiness, on all occasions, to
promote their wishes, led them to regret his leaving head
quarters, as an event by which they had lost a friend, on
whose affection they could repose every reliance.
Considerations of mere gratitude or interest were not
alone in recommending him to their regard. In the situa-
tion of the country, few of its young soldiers had enjoyed
those advantages, which enabled them to enter into the
gayeties of French manners, and to give zest to a society,
of which the usages were so unlike those then prevailing in
America. His command of their language, a natural turn
for pleasantry, a happy facility in adapting himself to the
vol. i. 43
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? 338 THE LIFE OF
character of his associates, a freedom from those prejudi-
ces above which persons of the most distinguished merit
do not always rise, and his warmth of heart, and romantic
temper, rendered him a welcome inmate to their conviviali-
ties, and gave him the first place among the American offi-
cers in their affections.
La Fayette, his early, his constant, his illustrious friend,
as he had been privy to many of the most confidential inci-
dents of Washington's life, and was aware of the import-
ance of Hamilton's services, seemed most to have regretted
it, and with the same warmth which he had shown in en-
deavouring to promote Hamilton's wishes on former occa-
sions, now sought to produce a reconciliation; but, as he
says, "when, after having explained the delay privately, he
expressed to each of them his own feelings, he found each
disposed to believe the other was not sorry for the separa-
tion. It did not, however, go farther than leaving the fami-
ly; the advice of Hamilton has since, in several circum-
stances, been friendly asked by the commander-in-chief. "
The following letters addressed to him, a short time after
this event, are indicative of the feelings which were enter-
tained towards him.
LA FAYETTE TO HAMILTON.
Elk, April 10th, 1781.
Where is, for the present, my dear Hamilton? This
question is not a mere affair of curiosity. It is not even
wholly owing to the tender sentiments of my friendship.
But motives, both of a public and private nature, conspire
in making me wish that your wo be not accomplished.
Perhaps you are at head quarters, perhaps at Albany; at
all events, I'll tell you my history.
Had the French fleet come in, Arnold was ours. The
more certain it was, the greater my disappointment has
been; at last it has become necessary for them to return
to Rhode-Island. I think they have exerted themselves for
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? HAMILTON. 339
the common good, and this has been a comfort in our mis-
fortune. Having luckily arrived at Elk by water, which
at first I had no right to expect, I have received the Ge-
neral's letter. If you are at head quarters, you will have
seen my correspondence with the General; if not, I tell you
that I am ordered to the southern army, and the General
thinks that the army under his immediate command will
remain inactive. After a march of forty days, we will ar-
rive at a time when the heat of the season will put an end
to operations. This detachment is so circumstanced, as to
make it very inconvenient for officers and men to proceed.
Before we arrive, we shall perhaps be reduced to five or
six hundred men.
There will be no light infantry formed, -- no attack
against New-York, -- none of those things which had flat-
tered my mind.
If a corps is sent to the southward by land, it ought to
have been the Jersey line, because if we weaken ourselves,
New-York will be out of the question.
Monsieur Destouches will, I think, propose to the Gene-
ral to send to Philadelphia l'Eveille, and all the frigates;
these, with the frigates now at Philadelphia, would carry
fifteen hundred men to whatever part of the continent the
General would think proper. We could then go to Mor-
ristown, there to form a new corps of light infantry upon
the principles at first intended, and embarking in the first
days of May, we could be at Wilmington, Georgetown, or
any where else, sooner than we can now be by land.
I would have the battalions composed of six companies;
-- colonels employed, Webb, Sprout, Huntington, Olney,
Hull, Barber, Gimat, Laurens; -- Majors Willet, Fish,
Gibbes, Inspector Smith, , and another; -- Brigadier
General Huntington and Scamell, and a good corps of ar-
tillery under ******. My dear friend, you would be more
important at head quarters; but if you don't stay there,
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? 340 TBI LIFE OF
you know what you have promised to me. Adieu. Write
me often and long letters. It is probable I will be in the
southern wilderness until the end of the war, far from head
quarters, from the French army, from my correspondence
with France; but the whole good I could have operated, in
this last instance, must have taken place by this time. My
best respects and affectionate compliments wait on Mrs.
Hamilton.
Most friendly, yours,
La Fayette.
On the eighteenth, (April,) he writes him from the Sus-
quehanna:
"DEAR HAMILTON,
"You are so sensible a fellow, that you can certainly ex-
plain to me what is the matter that New-York is given up;
that our letters to France go for nothing; that while the
French are coming, I am going. This last matter gives
great uneasiness to the Minister of France. All this is not
comprehensible to me, who having been long from head
quarters, have lost the course of intelligence.
"Have you left the family, my dear sir? I suppose so;
but from love to the General, for whom you know my af-
fection, I ardently wish it was not the case; -- many, many
reasons conspire to this desire of mine. But if you do leave
it, and if I go to exile, come and partake it with me.
"Yours,
"1. f. "
The approaching period of service, and the hopes which
began to be indulged of an active campaign, inspired Ha-
milton with a strong desire to obtain a situation in which
he might seize the first opportunity to increase his reputa-
tion. The letters of his friends, and especially those receiv-
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? HAMILTON. 341
ed from the Marquis, quickened his wishes, and with a de-
termination to continue in the service until the independ-
ence of the country was secured, he now resolved to renew
his application for a separate command, which had failed
in the preceding autumn; and with this view addressed the
following letter to the commander-in-chief.
SIB,
I imagine your excellency has been informed, that in
consequence of the resolution of congress for granting com-
missions to aid-de-camps appointed under the former esta-
blishment, I have obtained one of lieutenant colonel in the
army of the United States, bearing rank since the first of
March, 1777.
It is become necessary to me to apply to your excellency,
to know in what manner you foresee you will be able to
employ me in the ensuing campaign. I am ready to enter
into activity whenever you think proper; though I am not
anxious to do it till the army takes the field, as before that
period I perceive no object.
Unconnected as I am with any regiment, I can have no
other command than in a light corps, and I flatter myself
my pretensions to this are good.
Your excellency knows I have been in actual service
since the beginning of '76. I began in the line, and had I
continued there, I ought, in justice, to have been more ad-
vanced in rank than I now am. I believe my conduct in
the different capacities in which I have acted, has appeared
to the officers of the army in general such as to merit their
confidence and esteem; and I cannot suppose them to be
so ungenerous as not to see me with pleasure put into a
situation still to exercise the disposition I have always had,
of being useful to the United States. I mention these things
only to show that I do not apprehend the same difficulties
can exist in my case, (which is peculiar,) that have opposed
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? 342 THE LIFE OF
the appointment to commands of some other officers, not
belonging to what is called the line.
Though the light infantry is chiefly formed, yet being
detached to the southward, I take it for granted there will
be a van guard by detachment formed for this army.
I have the honour to be, very respectfully,
Your excellency's most obedient servant,
A. Hamilton.
De Peyster's Point, April 27, 1731.
The following reply was immediately given.
New-Windsor, April 27th, 1781.
DEAR SIR,
Your letter of this date has not a little embarrassed me.
You must remember the ferment in the Pennsylvania line
the last campaign, occasioned by the appointment of Major
McPherson, and you know the uneasiness which at this
moment exists among the eastern officers, on account of
the commands conferred upon Colonel Gimat and Major
Galvan, although it was the result of absolute necessity.
Should circumstances admit of the formation of another
advanced corps, of which I see very little prospect from
present appearances, it can be but small, and must be
composed almost entirely of eastern troops; and to add to
the discontents of the officers of those lines, by the farther
appointment of an officer of your rank to the command of
it, or in it, would, I am certain, involve me in a difficulty
of a very disagreeable and delicate nature, and might, per-
haps, lead to consequences more serious than it is easy to
imagine. While I adhere firmly to the right of making
such appointments as you request, I am, at the same time,
obliged to reflect, that it will not do to push that right too
far, more especially in a service like ours, and at a time so
critical as the present.
?
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? HAMILTON. 343
I am convinced, that no officer can, with justice, dispute
your merit or abilities. The opposition heretofore made
had not been for the want of those qualifications in the
gentlemen who are, and have been, the objects of discon-
tent. The officers of the line contend, without having re-
ference to particular persons, that it is a hardship and re-
flection upon them, to introduce brevet officers into com-
mands, (of some permanency,) in which there are more op-
portunities of distinguishing themselves, than in the line of
the army at large, and with the men they have had the
trouble to discipline and to prepare for the field. My prin-
cipal concern arises from an apprehension that you will im-
pute my refusal of your request to other motives than those
I have expressed, but I beg you to be assured, I am only
influenced by the reasons which I have mentioned.
I am, dear sir,
Your obedient and humble servant,
Geo. Washington.
Hamilton, deeming his case one which ought to be distin-
guished from those which Washington had adduced as pre-
cedents, wrote him a farther letter, on the second of May.
SIR,
I am extremely sorry to have embarrassed you by my
late application, and that you should think there are insu-
perable obstacles to a compliance with it. Having re-
nounced my expectations, I have no other inducement for
troubling your excellency with a second letter, than to ob-
viate the appearance of having desired a thing inconsistent
with the good of the service, while I was acquainted with
the circumstances that made it so.
I was too interested a spectator of what happened in the
case of Major McPherson, not to have remarked, and not
to recollect, all the circumstances. The opposition turned,
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? 344 THE LIFE OF
ostensibly, on his being a brevet officer, yet having a com-
mand in a corps formed entirely from one line; the pro-
priety of his being employed in a detachment from the ar-
my at large, so far as I remember, was not disputed. In
delicacy to Major McPherson, no personal objections were
formally made, but in reality they existed and contributed
to the discontent. It was thought a peculiar hardship, that
a gentleman who had, for a long time, fought against us,
and had not taken part with us till a late period, and when
our affairs had assumed a more prosperous aspect, should
be preferred in one of the most honorary commands of the
service. Your excellency must be convinced, that I men-
tion this in no other view than to show the sentiments of
the officers at the time, and the whole grounds of the oppo-
sition. My esteem for Major McPherson, and other rea-
sons, make it impossible I can have a different intention.
I know less of the motives of dissatisfaction in the cases
of Colonel Gimat and Major Galvan; but I have under-
stood, that it is founded on their being appointed in the light
corps for two successive campaigns.
It would be uncandid in me not to acknowledge, that I
believe a disposition to exclude brevet officers in general
from command, has a great share in the opposition, in every
instance, and that so far it affects my case. But, at the same
time, it appears to me, this principle alone can never be pro-
ductive of more than momentary murmurs, where it is not
seconded by some plausible pretext. I also am convinced,
that the Pennsylvania officers, for their own sakes, repented
the rash steps they had taken, and, on cool reflection, were
happy in an opportunity to relinquish their menaces of quit-
ting a service to which they were attached by habit, inclina-
tion, and interest, as well as by patriotism. I believe, too,
we shall never have a similar instance in the army, unless
the practice should be carried to excess. Major Galvan, I
am told, will probably be relieved. Colonel Gimat will be
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? HAMILTON. 345
then the only brevet officer remaining in command. Your
excellency is the best judge of the proper limits; and there
can be no doubt, that the rights of particular officers ought
to give place to the general good and tranquillity of the ser-
vice,
I cannot forbear repeating, that my case is peculiar, and
dissimilar to all the former; ^-- it is distinguished by the cir-
cumstances I have before intimated, -- my early entrance
into the service, -- my having made the campaign of '76,
the most disagreeable of the war, at the head of a company
of artillery, and having been entitled, in that corps, to a
rank, equal in degree, more ancient in date, than I now pos-
sess, -- my having made all the subsequent campaigns in
the family of the commander-in-chief, in a constant course
of important and laborious service. These are my preten-
sions, at this advanced period of the war, to being employed
in the only way which my situation admits; and I imagine
they would have their weight in the minds of the officers in
general. I only urge them a second time, as reasons which
will not suffer me to view the matter in the same light with
your excellency, or to regard as impracticable my appoint-
ment in a light corps, should there be one formed. I en-
treat they may be understood in this sense only. I am in-
capable of wishing to obtain any object by importunity.
I assure your excellency, that I am too well persuaded of
your candour, to attribute your refusal to any other cause
than an apprehension of inconveniences that may attend the
appointment.
I have the honour to be, with perfect respect, sir,
Your most obedient and humble servant,
A. Hamilton.
P. S. I have used the term brevet in the sense your excel-
lency appears to have understood it, as signifying, in gene-
ral, all officers not attached to any established corps. Con-
vol. i. 44
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? 346 TUE LIFE OF
gress, however, seem to have made a distinction; they give
only a kind of warrant to those whom they designate as
brevet officers; mine is a regular commission.
De Peyster's Point, May 2d, 1781.
Within a short time after this correspondence closed, a
letter was received from La Fayette, dated Richmond,
May 23, 1781.
MY SEAR HAMILTON,
I have been long complaining that I had nothing to do;
and want of employment was an objection I had to my
going to the southward. But for the present, my dear
friend, my complaint is quite of an opposite nature; and I
have so many arrangements to make, so many difficulties
to combat, so many enemies to deal with, that I am just
that much of a general as will make me an historian of mis-
fortunes, and nail my name upon the ruins of what good
soldiers are pleased to call the army in Virginia.
There is an age past since I heard from you. I acknow-
ledge that, on my part, I have not written so often as I
ought to have done; but you will excuse this silence in
favour of my very embarrassing circumstances. However
remote you may be from your former post of aid-de-camp
to the commander-in-chief, I am sure you are nevertheless
acquainted with every transaction at head quarters. My
letters have served to your information, and I shall conse-
quently abstain from repetitions.
Our forced march saved Richmond. Philips was going
down, and thus far I am very happy. Philips' return, his
landing at Brendon, south side of James river, and the un-
molested joining of Lord Cornwallis through North Caro-
lina, made me apprehensive of the storm that was gather-
ing. I advanced towards Petersburg, and intended to have
established a communication upon James and Appamatox
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? HAMILTON. 347
rivers. Had Philips marched to Halifax, I was determined
to follow him, and should have risked every thing rather
to omit making a diversion in favour of Greene. But that
army took possession of Petersburg, and obliged me to
stick to the side of the river, whence reinforcements are
expected.
Both armies have formed their junction of be-
tween four and five thousand men. We have no continen-
tals; their infantry is near five to one; their cavalry ten to
one. Our militia are not numerous, without arms, and are
not used to war. Government wants energy; and there
is nothing to enforce the laws. General Greene has di-
rected me to take command in this state, and I must tell
you, by the way, his letter is very polite and affectionate.
It then became my duty to arrange the departments, which
I found in the greatest confusion and relaxation; nothing
can be obtained, and yet expenses are enormous. The Ba-
ron, and the few new levies we could collect, are ordered
to South Carolina. I am glad he goes, as the hatred of the
Virginians to him was pretty hurtful to the service. Is it
not strange that General Wayne's detachment cannot be
heard of? They are to go to Carolina; but should I have
them for a few days, I am at liberty to keep them. This
permission I will improve so far as to receive one blow,
that, being beat, I may at least be beat with some decency.
There are accounts that Lord Cornwallis is very strong,
others make him very weak. In this country there is no
getting good intelligence. I request you will write me, if
you approve of my conduct. The command of the waters,
the superiority in cavalry, and the great disproportion of
forces, gave the enemy such advantages that I durst not
venture out, and listen to my fondness for enterprise; to
speak truth, I was afraid of myself as much as of the ene-
my. Independence has rendered me the more cautious, as
I know my own warmth; but if the Pennsylvanians come,
Lord Cornwallis shall pay something for his victory.
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? 348 Tilt: LIFE OF
I wish a reinforcement of light infantry, to recruit the
battalions, or a detachment under General Huntington was
sent to me. I wish Laurens or Sheldon were immediately
despatched with some horse. Come here, my dear friend,
and command our artillery in Virginia. I want your ad-
vices and your exertions. If you grant my request, you
will vastly oblige your friend,
La Fayette.
Having completed the details of circumstances of a per-
sonal nature, we now return to events of more general in-
terest.
The suggestions which had been made by Hamilton to
Mr. Duane, in the preceding summer, although they led to
no immediate measures, were presented by the latter to the
consideration of his friends in congress, and became the
subject of much serious reflection. The diminished import-
ance which that body felt would result from the proposed
transfer of their direct patronage, by the abolition of the
various subsidiary boards, to executive departments, and
the vanity of individuals who had long been most active in
the committees, all concurred to delay the measure; but
the good sense of congress at last prevailed. The new
board of treasury, with all its complicated branches, was
found wholly incompetent to its objects,. and a committee of
congress, which had been appointed to devise a system for
the arrangement of " the civil executive departments," re-
ported a plan for the establishment of a secretary of foreign
affairs, which was followed by a farther report, recom-
mending* the appointment of a superintendent of finance,
a secretary of war, and of the marine; and in the course
of the year, Robert R. Livingston was chosen to the depart-
ment of state, Robert Morris superintendent of finance, Ge-
* February, 1781.
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? HAMILTON. 349
neral McDougal secretary of the marine, and General Lin-
coln secretary at war. *
The pressure of the exigencies, and more enlightened
counsels, which had induced congress to part with such an
essential portion of their authority, in the creation of these
departments, influenced them, at the same time, to adopt
another measure, which, had it been carried into effect,
would have at once restored the public credit, secured re-
sources for the discharge of the debt, and established a per-
manent basis for a general and adequate system of finance.
It was a motion, by Dr. Witherspoon, that the United
States should be empowered to superintend the commercial
regulations of every state, so that none might take place
that should be partial, or contrary to the common interest;
and that they should be vested with the exclusive right of
laying duties on all imported articles; no restriction to be
valid, and no such duty to be laid, but with the consent of
nine states, with provisions to secure uniformity. The en-
larged views embraced in this resolution were not sanc-
tioned; but another measure of great moment was recom-
mended,-- that the states should confer on congress the
power of levying an impost of five per cent, on imported
articles, to be applied to the discharge of the debts incurred
for supporting the war, and to continue until they were dis-
charged.
* In a letter from Samuel Adams, of the 9th December, 1783, he says,
"Power will follow the possession of money, even -when it is known that it
is not the possessor's property; so fascinating are riches in the eyes of man-
kind. Were our financier, I was going to say, even an angel from heaven, I
hope he will never have so much influence, as to gain the ascendency over
congress, which the first lord of the treasury has long had over the parliament
of Britain, -- long enough to effect the ruin of that nation. These are the fears
which I expressed in congress, when the department was first instituted. I
was told, that the breath of congress could annihilate the financier; but I re-
plied, that the time might come, and if they were not careful, it certainly
would, wlen even congress would not dare to blow that breath: whether
these fears are the mere creatures of the imagination, you will judge. "
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? 350 THE LIFE OF
On the thirtieth of July, 1777, an adjourned convention
of delegates from several states was held at Springfield,
which proposed the abolition of a limitation of prices; the
gradual "drawing in" of the paper money; and its being
funded at an interest of six per cent. , and a system of taxa-
tion as a mean to this object. This subject was resumed by
a convention which assembled at Hartford, in October, 1779,
and which adjourned to meet in Philadelphia in the following
January, when resolutions were adopted, recommending
that Virginia should appoint commissioners to convene at
Hartford in the ensuing autumn. The deliberations of this
convention produced an early attention to this subject in
congress; and in March, 1780, a motion was made by Mr.
Burke, of North Carolina, " that the states be requested to
pass laws, enabling congress to levy an impost of one per
cent, on all exports and imports, as a fund for sinking the
emissions for carrying on the present war; to continue un-
til a sum equal to the whole of the said emissions shall 1)e
. collected," which was lost.
Nine commissioners assembled at Hartford, in pursuance
of their adjournment, among whom were Judge Hobart
and Egbert Benson of New-York. Upon much delibera-
tion, a paper was addressed to congress, which, after touch-
ing upon several military matters, recommends, in the sixth
article of their proceedings, that an estimate be made of all
the interest due on loan office certificates, and on all other
debts incurred by continental purchasing officers; that
taxes should be imposed by congress on certain specific ar-
ticles; or duties on imports, which the states should author-
ize them to levy and collect. This authority only to take
effect with the concurrence of all the states not in posses-
sion of the enemy; the proceeds to be appropriated to the
payment of the interest of the debt. A return of the white
and black inhabitants was also recommended, and a conti-
nental judicature, of three persons, to try offences against
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? HAMILTON. 351
the laws of congress, was suggested. This letter was read
in congress, on the twelfth of December, 1780, and in Feb-
ruary following, Egbert Benson was appointed procurator. *
The important proposal of a national impost, which be-
came the leading subject of controversy during many years,
that on which the whole system of public credit depended,
and which may be considered as the most prominent in
the train of events that led to the adoption of the federal
constitution, was resisted by the jealousy of several of the
commercial states, who imagined, that by entrusting con-
gress with the control of their customs, they were parting
with every essential attribute of sovereignty.
Nothing seemed left to relieve the finances of the coun-
try, but the adoption of some measure by which a new
"mass of credit" could be created, and the depreciated pa-
per replaced by a currency of fixed value, adequately sus-
tained. A recent resolution! of congress, passed with but
one dissenting voice, "to pay all the debts which had been
liquidated in specie value, or which had been, or should be,
made payable in specie or its equivalent, actually in specie
or its equivalent," and a recommendation to the states to
amend their laws, making the bills of credit emitted under
the authority of congress a legal tender, so that they should
not be a tender in any other manner than at their current
value, compared with gold and silver, gave evidence of a
sound state of public opinion.
Encouraged by these indications, Hamilton resumed his
* Among the proposals to invigorate the confederation, was one made on
the sixteenth March, 1781, that under a construction of the thirteenth article
of the confederation, it should be so amended, "that if any state refused to ob-
serve all the articles of the confederation, congress should be empowered to
authorize the land and naval forces of the United States to compel such state
to fulfil its federal engagements, and also to make restraint on its merchan-
dise. "
f March sixteenth, 1781.
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? 352 THE LIFE OF
plan of a national bank, of which the first suggestion was
made by him to Robert Morris.
The Bank of Pennsylvania, which had been established
in June, though partial in its objects, having been a bank
merely of deposit, not of issue, had given congress such
aid as predisposed them to the adoption of a more exten-
sive system.
The character of the individual who had been elected su-
perintendent of finance, encouraged Hamilton to hope for
the attainment of his project; and with this view, on the
thirtieth of April, 1781, he addressed an elaborate letter to
Mr. Robert Morris, the fruits of his leisure, since he had been
relieved from the duties of aid-de-camp, discussing at large
the causes of the depreciation, and indicating the means of
raising the value of the currency, and at the same time en-
closing a charter for a bank to be incorporated by congress.
This plan was prefaced by the following observations:
April 30th, 1781.
I was among the first who were convinced that an ad-
ministration by single men was essential to the proper
management of the affairs of this country. I am persuaded
it is the only resource we have to extricate ourselves from
the distresses which threaten the subversion of our cause.
It is palpable that the people have lost all confidence in our
public councils, and it is a fact, of which I dare say you are
as well apprized as myself, that our friends in Europe are
in the same disposition. I have been in a situation that
has enabled me to obtain a better idea of this than most
others, and I venture to assert, that the court of France
will never give half the succours to this country while con-
gress hold the reins of administration in their own hands,
which they would grant if these were entrusted to indivi-
duals of established reputation, and conspicuous for probity,
abilities, and fortune.
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? HAMILTON. 353
With respect to ourselves, there is so manifest and rooted
a diffidence of the government, that if we could be assured
the future measures of congress would be dictated by the
most perfect wisdom and public spirit, there would be still
a necessity for a change in the forms of our administration,
to give a new spring and current to the passions and hopes
of the people. To me it appears evident, that an executive
ministry, composed of men with the qualifications I have
described, would speedily restore the credit of government
abroad and at home; would induce our allies to great exer-
tions in our behalf; would inspire confidence in moneyed
men in Europe, as well as in America, to lend us those
sums of which it may be demonstrated we stand in need,
from the disproportion of our national wealth to the ex-
penses of the war.
I hope, sir, you will not consider it a compliment, when
I assure you that I heard, with the greatest satisfaction, of
your nomination to the department of finance.
In a letter of mine last summer to Mr. Duane, urging,
among other things, the plan of an executive ministry, I
mentioned you as the person who ought to fill that depart-
ment. I know of no other in America who unites so many
advantages; and, of course, every impediment to your ac-
ceptance is to me a subject of chagrin. I flatter myself,
congress will not preclude the public from your services, by
an obstinate refusal of reasonable conditions; and as one
deeply interested in the event, I am happy in believing you
will not easily be discouraged from undertaking an office,
by which you may render America and the world no less a
service than the establishment of American independence.
'Tis by introducing order into our finances, by restoring
public credit, not by gaining battles, that we are finally to
attain our object. 'Tis by putting ourselves in a condition
to continue the war, not by temporary, violent, and unnatu-
ral efforts to bring it to a decisive issue, that we shall in
vol. i. 45
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? 354 THE LIFE OP
reality bring it to a speedy and successful one. In the
frankness of truth, I believe, sir, you are the man best capa-
ble of performing this great work.
In expectation that all difficulties will be removed, and
that you will ultimately act on terms you approve, I take
the liberty to submit to you some ideas, relative to the ob-
jects of your department. I pretend not to be an able
financier. It is a part of administration which has been
least in my way, and of course has least occupied my inqui-
ries and reflections; neither have I had leisure or materials
to make accurate calculations. I have been obliged to de-
pend on memory for important facts, for want of the au-
thorities from which they are drawn.
With all these disadvantages, my plan must necessarily
be crude and defective; but it may be a basis for something
more perfect, or if it contains any hints that may be of use
to you, the trouble I have taken myself, or may give you,
will not be misapplied. At any rate, the confidence I have
in your judgement, assures me that you will receive with
pleasure communications of this sort. If they contain any
thing useful, they will promote your views, and the public
benefit; if not, the only evil is the trouble of reading them;
and the best informed will frequently derive lights even
from the reveries of projectors and quacks. There is scarcely
any plan so bad as not to have something good in it. I trust
mine to your candour, with this apology, -- you will at least
do justice to my intention.
With these preliminary remarks, he proceeds to the in-
quiry as to "what ought to be done in the finances of the
United States? " First, to estimate its capacity for reve-
nue, and the proportion between its abilities and its wants,
by examining the proportion the revenues other countries
have borne to theirwealth, and applying the rule to Ame-
rica. Second, by comparing the result of that rule with the
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? HAMILTON. 355
product of taxes in those states which have been most ear-
nest in taxation.
The result obtained, by an examination applied to Great
Britain, France, and the United Provinces was, that the re-
venue is one fourth of the circulating cash in commercial
countries, so far as this is a just representative of its labour
and commodities.
He then states the current cash of America, previous to
the war, to have been about thirty millions of dollars, of
which one eighth was specie; and that the proper revenue,
at that time, was seven and a half million of dollars. But
as the system of taxation was carried to an extreme in those
countries, that the rule is inapplicable in its full extent to
the United States; though a much larger amount than might
be expected, could be levied during the war, without bur-
thening the poorer classes, from the greater equality of for-
tunes, and a more equal division of the public burthens. --
Making the necessary qualifications, he arrives at the re-
sult, that the present revenue was one fifth less than it had
been before the war. Having adverted to the causes of the
diminished circulation, which he considers as principally
artificial, he comes to the conclusion, allowing for the dimi-
nution of foreign trade, and the loss of territory, that the
states have a nett revenue of six millions of dollars; a re-
sult which is nearly confirmed by a detailed examination of
the previous product of the taxes, of which Massachusetts
was supposed to have raised one fifth.
Taking this as the amount of revenue, he next proceeds
to ascertain, by general rules, the military capacity of the
country, which although it had at times risen to thirty thou-
sand men, might be estimated at twenty thousand. The
expenses incident to the support of which force, with the
necessary civil expenditures, rendering the amount of the
annual charges of the country less than eleven million of
dollars, left a deficit of four and a half millions to be supplied
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? 350 THE LIFE or
by credit, foreign or domestic. He then examines the pros-
pect from foreign loans, which taking into view the politi-
cal and financial embarrassments of France, he supposes
may justify an expectation of a loan annually of eight or ten
million of livres, which would only meet a third of the na-
tional wants.
From Spain, after remarking on her cold and passive
policy, in pursuance of which the bills drawn on her, though
not rejected, had not been paid, he expects nothing.
"Their method of prosecuting the war, can scarcely be re-
solved into Spanish supineness, but seems to have a more
corrupt original. A bigotted prince, governed by a greedy
confessor, is a character on which little dependence can be
placed. "
Holland, as a government, stands in need of all its credit
for its own uses. But from the Dutch capitalists much
might be expected, though not on the faith of the United
States, by the establishment of a system such as he is about
to propose. The prospects of internal loans to govern-
ment, both from the want of confidence, and the more ad-
vantageous terms of traffic in which individual wealth could
be employed, he rates very low.
"To surmount these obstacles," he observes,"and give
individuals ability and inclination to lend, a plan might be
devised which, by incorporating their means together, and
uniting them with those of the public, will, on the founda-
tion of that incorporation and union, erect a mass of credit
that will supply the defect of moneyed capital, and answer
all the purposes of cash. A plan which will not only ad-
vance the interest of the lenders, secure the independence
of their country, and in its progress have the most benefi-
cial influence upon its future commerce, but be a source of
national strength and wealth. I mean," he says, "the in-
stitution of a national bank. This I regard, in some shape
or other, as an expedient essential to our safety and sue-
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? HAMILTON. 357
cess, unless by a happy turn of European affairs, the war
should speedily terminate, in a manner upon which it would
be unwise to reckon. There is no other that can give to
government that extensive and systematic credit, which the
defect of our revenues makes indispensably necessary to
its operations. The longer it is delayed, the more difficult
it becomes. Our affairs grow every day more relaxed and
more involved. Public credit hastens to a more irretrievable
catastrophe. The means for executing the plan are exhaust-
ed in partial and temporary efforts. The loan now making
in Massachusetts, would have gone a great way in esta-
blishing the funds on which the bank must stand.
"I am aware of all the objections that have been made to
public banks, and that they are not without enlightened and
respectable opponents. But all that has been said against
them only tends to prove, that like all other good things,
they are subject to abuse, and when abused, become per-
nicious. The precious metals, by similar arguments, may
be proved to be injurious. It is certain that the monies
of South America have had great influence in banishing
industry from Spain, and sinking it in real wealth and im-
portance. Great power, commerce, and riches, or, in other
words, great national prosperity, may, in like manner, be
denominated evils; for they lead to insolence, an inordi-
nate ambition, a vicious luxury, licentiousness of morals,
and all those vices which corrupt a government, enslave the
state, and precipitate the ruin of a nation.
