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A Century of Lawmaking for a New Nation: U.S. Congressional Documents and Debates, 1774-1875
Journals of the Continental Congress --WEDNESDAY, APRIL 18, 1781
A report from the Board of Treasury was read; Whereupon,
Treasury OfficeApril 16th. 1781
Upon the motion of Mr Root in Congress seconded by Mr Woolcot, and referred to the Board of Treasury the following information and resolution is submitted:
The sum of 2935 88/90 dollars in specie value was due to Eleazer Wales of Hartford a late Commissioner of accounts on the 14th of June 1780 the time he resigned his Office, and Whereas it appears that the said Eleazer Wales will loan the money aforesaid due to him with interest from the time the same became due.
Ordered, That the Board of Treasury direct William Imlay, commissioner of the continental loan office for the State of Connecticut, to issue loan office certificates of specie value in favour of Eleazer Wales, late a commissioner of accounts, for two thousand nine hundred and thirty-five dollars and eighty-eight ninetieths, in discharge of his account of salary due the 14 of June, 1780.1
[Note 1: 1 This report is in thePapers of the Continental Congress, No. 136, V, folio 245. A marginal note says: The principal sum 2935 88/90. The sum with interest to this day 3111 dollars.]
The committee ∥consisting of Mr. Duane, Mr. Sharpe, Mr. Wolcott∥ appointed "to estimate and state the amount of the debts due from the United States, with the necessary estimates for the current year as near as can be done, in order that the same may be laid before the respective legislatures" brought in a report;
That they have attended to this business; but from the unsettled condition of the publick accounts they can only give a general view of the publick debts.
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[Note 1: 1 The words in brackets are in the report but not in the Journal.]
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The distresses of the army for want of provisions, and their uneasiness and dissatisfaction for want of pay, have been so great and so notorious, and the clamours of public creditors so loud, that it is become necessary to state the measures which Congress have pursued, and the steps they have taken from time to time to support the war, to provide for public exigencies, and to guard against the dangers and embarrassments with which we are now threatened for want of timely supplies of money.
It cannot be forgotten that these United States were plunged into a war, and that an army was drawn together before any money was provided, or funds established for defraying the expence thereof. Arms, ammunition and implements of war were all to be procured, as well as provisions, subsistence, and pay for the troops, suddenly called forth to oppose an enemy already in the heart of our country, and in possession of one of our capital towns. In this situation of affairs Congress met in May, 1775. They had no resource from whence to derive present supplies but that of emitting bills of credit, redeemable at a future day. This was an expedient which was well known, and had often been practised to good effect in the several colonies. Accordingly, on the 22 of June, 1775, they agreed to emit bills of credit to the amount of two millions; and on the 25 of July following encreased the sum to three million dollars;--for the redemption of which they pledged the confederated colonies, and directed each colony to provide ways and means to sink its proportion or quota, which was then ascertained, in such manner as would be most effectual and best adapted to the condition, circumstances and equal mode of levying taxes in such colony, in four annual payments; the first to be made on or before the last of November, 1779, before which
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time it was hoped the contest might be brought to a conclusion. On the 29 of November following, an estimate having been formed of the public expences already arisen, and which might accrue in the defence of America, to the 10 of June, 1776, Congress resolved to emit a further sum of three millions of dollars, to be redeemed as the former, by four annual payments, the first to be made on or before the last day of November, 1783. It was at the same time resolved, that the proportion or quota of each respective State should be determined according to the number of inhabitants of all ages, including negroes and mulattoes in each colony; and for this purpose it was recommended to the several assemblies, &c. to ascertain by the most impartial means in their power the number of inhabitants in each respective colony, and make returns thereof to Congress as soon as possible.
At this time a hope was still entertained that an accommodation would take place, and that hostilities would soon cease. But having received advices, in the winter following, that Great Britain had contracted for a large body of Hessian and other German mercenaries, which were to be sent over to subdue America, Congress found it necessary to make suitable preparations, which consequently encreased the expence; and therefore, on the 17 of February, they ordered four millions of dollars to be emitted on the same security as the former sums; and on the 9th of May following, emitted five millions more on the like security.
The powerful fleet and army sent against America in the summer of 1776, and the professed design of Great Britain to subdue by force, or to bring the colonies to unconditional submission, obliged Congress to declare Independence, and to call in the aid of militia, and consequently encreased the expence; and therefore, on the 22 July, they emitted five millions more.
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But as it was foreseen that such repeated issues of bills of credit would encrease the quantity to too great a degree, and consequently occasion their depreciation, it was resolved on the third of October following to borrow five millions of dollars; and in November, a lottery was set on foot for raising a farther sum on loan.
As the governments of the several states were not yet sufficiently organized and in vigour, and as the expences of arraying and equipping the militia were great, and the resources from commerce cut off, it was not thought proper to proceed to taxation. And as neither loans nor the lottery were sufficiently productive, necessity compelled to farther emissions of bills of credit. By this means the paper currency being multiplied, began to depreciate. It was therefore resolved on the 10 September, 1777, to prepare an earnest recommendation to the states to proceed to taxation. The invasion of Pensylvania, and the removal of Congress from Philadelphia, prevented this from being done as soon as might have been wished; but on the 22 November, 1777, it was recommended to the states to raise by taxes, for the service of the year 1778, the sum of five million dollars, and to pay the same into the public treasury in four quarterly payments. Previous to this it had been resolved to borrow larger sums; and to encourage the money holders to lend, it was agreed to pay the interest by bills of exchange drawn on our Commissioners in France.
Unfortunately the tax failed, and the sums obtained from loans were greatly inadequate to the expenditure: consequently more money was emitted; and notwithstanding the favourable turn in our affairs in 1778, depreciation encreased with amazing rapidity.
At the close of the year, 1778, the sums emitted and borrowed amounted to about one hundred and eight millions. Congress, anxious to put a stop to any farther
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emissions, and to provide a fund for redeeming what was issued, called upon the states on the 1 January, 1779, to pay into the continental treasury their respective quotas of fifteen million dollars for the service of that year, and of six millions annually, from and after the year 1779, as a fund for sinking the emissions and loans to the 31 December, 1778; and on the 21 May following, in addition to the above, on account of the great depreciation of the paper, the states were called on to furnish for the service of the year 1779, their respective quotas of forty-five millions--the whole to be paid into the continental treasury before the 1 January, 1780. A compliance with these requisitions would not only have answered the necessary exigencies of the year, but would have arrested depreciation in its progress. But as these were not complied with in due time, and as the demands of the public were pressing and constant, the prospect of future taxes served only as a stimulus to urge those who had in their possession the supplies and necessaries wanted, to enhance the price, in order to pay their taxes with greater ease: while at the same time the public treasury, receiving no recruit from taxes, was from time to time replenished with new emissions; and from these causes combined, depreciation, instead of receiving a check, proceeded with redoubled rigour.
As the failure of the states was attributed to their not having received the requisitions in due time, Congress resolved in future to remedy that defect; and therefore, early in the fall of 1779, took into consideration the means of providing for the ensuing year; and on the 6 October, accommodating themselves to the depreciation as it then stood, and still flattering themselves that the taxes already called for, if duly collected, would stop it where it was, and answer demands
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on the public till February following, they called upon the states to pay into the public treasury on the first day of February, 1780, and on the first day of each succeeding month, to the first of October inclusive, their respective quotas of fifteen millions.
It should be observed that on the first of September, 1779, the sum emitted and in circulation amounted to 159,948,880 dollars; and as there was a general outcry on account of the depreciation and the floods of money emitted, Congress resolved that they would on no account whatever emit more bills of credit than to make the whole amount of such bills two hundred millions. And as 40,051,120 dollars remained to complete the two hundred millions, they on the 3d of the same month resolved that they would emit such part only of the said 40,051,120 as should be absolutely necessary for the public exigencies, before adequate supplies could be otherwise obtained, relying for such supplies on the exertions of the several states.
This was represented to the states in an address dated the 13 of September; and they were earnestly entreated not to leave Congress without supplies, nor to let in that flood of evils which would follow from such a neglect. Notwithstanding this earnest address and representation, Congress were compelled by necessity to issue the remainder of the two hundred millions; and the army was in such extremity for want of provisions, that the Commander in Chief was reduced to the sad alternative, either to suffer it to disband, or to collect supplies by military force. He preferred the latter, and the inhabitants of New York and New Jersey, though they felt the injury, saw the necessity, and patiently submitted.
To prevent the like evils in future, Congress, on the 25 of February, 1780, called on the states forthwith to procure their respective quotas of supplies in enumerated
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articles for the ensuing campaign. And as by the continual depreciation of the continental currency, the community was suffering great injustice, the public finances were deranged, and the necessary dispositions for the defence of the commonwealth much impeded and perplexed, they on the 18 of March, 1780, recommended that the fifteen million monthly tax should be continued from October to April, 1781, inclusive; and that thirteen of those monthly quotas, namely, from March, 1780, to April, 1781, both inclusive, should be applied solely to redeem or sink the old money, which was to be cancelled and burned as fast as brought in; and in lieu thereof, new money was to be emitted in the proportion of one of the new for twenty of the old; so that when the whole two hundred millions were drawn in and cancelled, ten millions new money would be thrown into circulation; of which four tenths were to have been subject to the order of Congress, and the other six tenths to belong to the several states. The effects of this resolution, if it had been punctually executed according to the intention of Congress, would have been--1. The cancelling the old money; 2. reducing the currency to a more fixed standard; 3. supplying the states with money to purchase the supplies required from them by the act of the 25 of February; and 4, enabling Congress to pay the army, discharge the principal debts already contracted, and to provide for the exigencies of the ensuing campaign. But as this was not done, Congress was again driven into temporary expedients.
The enemy knew our situation, and were exerting their utmost efforts to take advantage of it. The southern states were invaded. A descent was threatened on New Jersey. The posts on Hudson's river were in danger.
In order to put the army in motion, Congress were obliged to raise money by drawing bills on their ministers abroad; although they had not sufficient assurances
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that those bills would be honored. On the 19 May, Congress called upon the states, from New Hampshire to Virginia, both inclusive, to collect and pay into the public treasury, in thirty days, ten million continental currency, part of the sums required to be paid last year. The states, in order to comply with this, pressed the collection of taxes, which occasioned such a clamour from those who had furnished supplies on credit, that on the 27 of the same month Congress recommended to the legislatures of the several states to empower the collectors of continental taxes due before the I March, 1780, to receive in payment thereof the notes or certificates which had been given by the quartermaster and commissary of purchases for such supplies.
Until the opening of this campaign, the army had borne their sufferings with unparalleled patience and perseverance. What pay they had hitherto received had been chiefly in depreciated money. Congress had not been unmindful of their sufferings and faithful services. As early as September, 1776, they had resolved to make provision for granting lands in certain proportions to the officers and soldiers who would engage in the service, and continue therein to the close of the war, or until discharged by Congress, and to the representatives of such officers and soldiers as might be slain by the enemy. On the 15 of May, 1778, they resolved unanimously that all military officers commissioned by Congress, who then were, or thereafter might be, in the service of the United States, and continue therein during the war, should, after the conclusion thereof, receive annually for the term of seven years, if they lived so long, one half of the pay then established for such officers, with a proviso, that general officers should not receive more than the half pay of a colonel; and it was also resolved, that noncommissioned officers and soldiers enlisted for the war
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should, at the expiration thereof, receive a reward of eighty dollars.
On the 17 August, 1779, having prefaced their resolution with a preamble setting forth that the army of the United States of America, by their patriotism, valor and perseverance in defence of the rights and liberties of their country, were entitled to the gratitude as well as approbation of their fellow citizens, they recommended it to the several states to make such further provision for the officers and soldiers enlisted for the war, to them respectively belonging, and who should continue in service till the establishment of peace, as should be an adequate compensation for the many dangers, losses, and hardships they may have suffered in the course of the contest; either by granting to their officers half pay for life, and proper rewards to their soldiers, or in such other manner as might appear most expedient to the legislatures of the several states. And it was farther recommended to the several states to make such provision for the widows of such of their officers and such of their soldiers enlisted for the war, as had died or might die in the service, as would secure to them the sweets of that liberty for the attainment of which their husbands had nobly laid down their lives.
On the 10 of April, 1780, they resolved, that as soon as the state of the public finances would admit, they would make good to the line of the army, and the independent corps thereof, the deficiency of their original pay occasioned by the depreciation of the currency; but none were to derive benefit from this resolution except such as had engaged to serve during the war, or for three years, and were then in service, or should thereafter engage to serve during the war.
And now on the 13 August, 1780, they resolved that from and after the first of the said month, the army
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shall receive their pay in the new bills emitted pursuant to the resolution of the 18 of March, 1780, and again recommended to such of the states as have not made compensation to their officers and soldiers, agreeably to the resolution of the 17 August, 1779, to do it as soon as possible. At the same time the provision for granting lands was extended to the general officers; and on the 24 of the same month the resolution of the 15th of May, 1778, granting half pay for seven years to the officers of the army who should continue in service to the end of the war, was extended to the widows of such officers as had died or should thereafter die in the service, to commence from the time of such officer's death; or, if there should be no widow, or in case of her intermarriage, that it should go to the orphan children of such officer.
And it was recommended to the legislatures of the states to which such officers belonged to make provision for paying the same on account of the United States.
Still the public treasury remained unsupplied; and the army continued without pay, and oftentimes in great distress for want of provisions. Debts were accumulating, and the creditors more and more clamorous.
Under these circumstances Congress, on the 26 of August, 1780, earnestly recommended to the several states to take the most speedy and effectual measures in their power for drawing in their respective quotas of the continental bills of credit, by taxes or otherwise, in order that the new money might be issued. And at the same time it was recommended to the states to raise by taxes, payable in the said new bills, their respective quotas of three million dollars; and to pay the same into the public treasury as soon as possible, the payment to be fully compleated by the last day of December following. From this it was hoped that Congress would
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draw a supply of money to enable them to pay the army, and carry on the war with vigor; to discharge the unfunded debts; and to pay the interest due on loan office certificates. Their expectations were again disappointed. The consequences that ensued from the failure, though alarming and painful to recollect, were far short of what might have been apprehended. Yet the requisition of the 15 January, 1781, after the mutiny in the Pensylvania and Jersey lines, for 879,342 dollars for the immediate pay of the arrears due to the army, has not yet been complied with.
This recapitulation is made, not with a view to criminate, but to show that Congress have done every thing in their power to carry on the war, and to prevent the embarrassments under which our affairs now labour.
It now remains to estimate the supplies necessary for the current year; and to point out the measures already taken for obtaining those supplies.
Congress by their resolutions of the 3 and 21 of October last, have resolved that the army for the ensuing campaign shall consist of six legionary corps, four regiments of artillery, fifty regiments of infantry, and one regiment of artificers, amounting to thirty-five thousand seven hundred and forty-eight rank and file.
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which to value the new money, unless it be speedily destroyed, it cannot fail to sink the new. It is therefore indispensably necessary, that it be called in without delay. This will give the United States in Congress assembled a command of new money to the amount of ... 3,200,000
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To make up the deficiency, no other more practicable means can be devised than to require the following states to give up of their 6 tenths of the new money to the amount of $1,739,256 73/90 in the following proportions, viz:
From the situation of the Southern States and the distressed condition of New York it is judged improper to call on them.
This requisition is not to interfere nor in any wise be construed to dispense with the states sinking one sixth of the new emission accord according to the tenor of the act of the 18th of March, 1780.
It will moreover be necessary to provide funds for paying the interest of the debts contracted in Europe. With a view to this, Congress, in their requisition of February, 1780, among other specific supplies, called upon the states of Virginia and Maryland to furnish a quantity of tobacco, which it was expected might have been shipped to France, and been the beginning of a fund for defraying the expences of our ministers at foreign courts, and paying the interest of moneys borrowed in Europe. But the want of ships last fall; and the naval superiority of the enemy in Chesapeak Bay this spring, have prevented the public from deriving any advantage from that requisition.
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It has been before observed, that the debts contracted abroad amount, by computation, to the sum of six million dollars, the annual interest of which is three hundred and sixty thousand dollars. The annual interest of the money borrowed on certificates previous to the 1 March, 1778, and which is to be paid by bills drawn on our minister at the Court of France, amounts to 438,798 31/90.
The credit and honor of the United States require that a fund should be provided not only for defraying this interest, but also for discharging the principal, or at least those certificates for the interest of which bills are to be drawn annually on our minister, who has no fund to apply to that purpose, and who therefore has to depend on the success of his solicitations, as it becomes due.
And what equally concerns the honor of the United States, a fund should be provided for defraying the expences of our ministers abroad. This shows the absolute necessity of the states immediately granting the duties on imports and prizes as requested by Congress.
Before we conclude it may not be amiss to observe, that from the constant depreciation of the currency, and the unpunctuality of the states in complying with the requisitions of Congress, the sums called for when paid in have heretofore always been greatly inadequate to the purposes designed.
It is therefore recommended that for the future wheat or flour or beef be made the standard,and that in all requisitions hereafter made the states be called upon to pay in such certain sums of money, or so much as will be in value to or will purchase a certain given quantity of wheat flour or beef.
and the same being twice read, debated by paragraphs and agreed to:1
[Note 1: 1 A copy of this report, in the writing of George Bond of the Secretary's Office, is in thePapers of the Continental Congress, No. 26, folio 259. It was entered only in the manuscript Secret (Domestic) Journal and in No. 12, (Estimates).]
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Ordered, That copies thereof be sent to the several states.
The committee to whom was referred a letter or representation, of 10 March, in the name and behalf of the general court of the Commonwealth of Massachusetts, delivered in a report.
A motion was made by Mr. [James] Madison, seconded by Mr. [William] Sharpe:
Ordered, That it be referred to a committee of three:
The members, Mr. [James] Madison, Mr. [James Mitchell] Varnum, Mr. [William] Sharpe.
Adjourned to 10 o'Clock to Morrow.
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