CHAPTER loan might be obtained, Congress was content with callXLV. ing on the states for two only of the eight millions need1782. ed. The separate assessment and collection of the federal taxes was again strongly urged.

With the increasing poverty of the federal treasury, the western lands were earnestly looked to as a financial resource. Unwillingness to guarantee to Virginia the possession of Kentucky, and the influence of certain land companies, not without their weight in Congress, on whose behalf a claim was set up to large tracts west of the mountains, had hitherto prevented the acceptance of the Virginia cession. A committee, the appointment of which the delegates from Virginia vainly opposed, having gone into a full examination of all the claims to western lands, whether on the part of states, companies, or individuals, had made a report upholding the title of New York against all claimants. That report gave rise to many warm debates, which resulted, however, at the Oct. 31. close of the session, in the formal acceptance of the deed of New York conveying all her title to Congress; an acceptance intended as a means to compel the other states to make satisfactory cessions. Massachusetts and Virginia voted against it; the Carolinas were divided; all the other states in the affirmative.

Nov. 3.

No sooner was the new Congress organized, with Elias Boudinot, of New Jersey, as president, than attention was again called to the engrossing subject of finance. The Assembly of Pennsylvania sent in a memorial complaining of the neglect of Congress in liquidating and providing for the domestic debt, and intimating an intention to apply the produce of the federal taxes just levied in that state toward satisfying the numerous federal creditors resident in it.

The late Congress had directed the appointment by

XLV.

the superintendent of finance of a commissioner for each CHAPTER state, subject to state approval, with authority to audit, settle, and reduce to specie value, according to the con- 1782. gressional scale of depreciation, all outstanding claims in the old paper currency, whether state or individual, for supplies furnished, services performed, or money advanced or expended on federal account. This scheme was now carried into execution by the appointment of the commissioners. Similar commissioners were also appointed to settle the accounts of the old boards of treasury, war, and marine, and of the quarter-master's, commissary's, paymaster's, and other civil departments of the army, as well as of the commissioners, agents, and commercial correspondents in Europe. In consideration of these steps toward the liquidation of the public debt, the Assembly of Pennsylvania was persuaded by a committee of Congress to forego its threatened interference.

At length, though not without very evident reluctance, the proposed import duty of five per cent., as a fund for the support of federal credit, had been more or less fully conceded by all the states except Georgia and Rhode Island. Georgia, just restored to the Union, had not yet considered the subject; her accession, however, was confidently looked for, when the hopes of Congress were suddenly dashed by the unanimous refusal of the Assembly of Rhode Island to concur in the measure. That body gave as reasons the inequality of such a tax, bearing hardest on the commercial states, and particularly so on Rhode Island; and the inexpediency and danger of intrusting its collection, as the resolution of Congress required, to federal officers not known and not accountable to the state governments. Hamilton, now a delegate in Congress from New York, as chairman of a committee appointed for that purpose, drew up an elaborate answer to these objections;

CHAPTER and a committee was appointed to proceed to Rhode IslXLV. and personally to enforce the argument. But, just as 1782. they were ready to set out, news came that the Legislature of Virginia had taken advantage of the refusal of Rhode Island to repeal their act granting the impost, to which was added a resolution declaring the inability of that state to meet more than a very small part of the federal requisitions lately made upon her.

In this miserable condition of the federal finances, amid the leisure of an idle camp, the dissatisfaction and doubts of the army officers continued to increase. The army accounts for the depreciation of pay, and deficiencies of clothing and rations, which Congress had promised to make up, still remained unliquidated. Even the current pay was greatly behindhand. Morris found it sufficiently difficult to provide for the bare subsistence of the army. Being without money, for the sake of a three months' credit, he had just been compelled to make an advance of thirty per cent. on his contract for army supplies. A large part of the officers, quite destitute of private means, were overwhelmed with debts, and reduced to great disGeneral M'Dougall, and Colonels Brooks and Og. Dec. den, deputed for that purpose, proceeded to Congress with an emphatic petition, setting forth the distress and grievances of the army, and asking a settlement of depreciation and deficiencies, and of the pay now over-due. It was also proposed, in consideration of the extreme unpopularity of the half pay for life, to accept in lieu of it a gross sum to be paid down or secured at once.

tress.

Meanwhile the French auxiliary army marched from Virginia to Boston, and there embarked. The conduct of these French troops during the two years and a half they had been in the country had been very exemplary. They did far less mischief on their marches than the same

XLV.

number of American soldiers; and the regularity with CHAPTER which all their supplies were paid for in cash, contrasted most favorably with the means by which the American 1782. troops were too often subsisted.

A copy of Marbois's intercepted letter, transmitted to Congress by Jay, aroused in several members of that body the same suspicions felt by Jay himself. Yet a motion to release the negotiators from their obligation to consult with and to be directed by Vergennes failed to be carried. Of those who had formerly opposed that instruction, some doubted the policy of withdrawing it now. Practically it was a matter of no consequence, for the preliminary treaty was already signed. Explanations on the part of the French minister, and the absolute necessity of relying upon France for further advances of soon smothered all feelings of suspicion. cions continued, however, to be strongly entertained, especially by Adams, of whom Franklin wrote in relation to this subject, that, though "always an honest man, and often a wise one, he was sometimes, and in some things, absolutely out of his senses."

money, These suspi

Jan.

Of the eight millions for the service of the past year, 1783. for which Congress had made requisitions on the states, only $420,000 had yet reached the federal treasury. Morris had outstanding treasury notes to the amount of $400,000 fast running to maturity, for which some provision must be made. The French subsidies and loans, including that raised in Holland on the credit of France, had been exhausted; indeed, Morris had overdrawn upon the American bankers abroad to the extent of $500,000. To meet these drafts, there was nothing to rely on but the produce of a Dutch loan lately opened by Adams, the subscriptions to which came in but slowly, and the friendship of France, lately evinced, though Morris did not

CHAPTER yet know it, by the further loan, already mentioned, of XLV. $1,111,111. Under these circumstances, before taking 1783. the responsibility of further drafts, absolutely necessary

as they were to prevent an entire stoppage of treasury payments, Morris required the express sanction of Congress. That sanction, out of pure necessity, was unanimously given; and Morris, thus authorized, was enabled, by the sale of additional drafts, to raise and forward to the camp a month's pay for the army.

Meanwhile, the question of the commutation of the half pay gave rise to very lively debates. The division which had all along more or less distinctly existed between the advocates of a strong central government and the partisans of state authority, became, upon this question, very apparent. Hamilton wished to fund the whole public debt, including the sums due the army, and to give the creditors Continental certificates, for the payment of which, at least of the interest, some effectual provision. should be made. To this view Madison inclined. The other party wished to leave all state obligations, the claims of the officers included, to be separately provided for by the several states.

While Congress deliberated, the officers grew more and more impatient; and in hopes of forcing, by that means, some general provision for the public debt, some of the public creditors inflamed their discontents. Just after a visit to the camp at Newburgh by Gouverneur Morris, a great speculator, now a resident in Philadelphia, and assistant to Robert Morris in the business of the finances, an March 10, anonymous notice made its appearance, in which a meeting was proposed of the general and field officers of the army, with one officer from each company, to take into consideration the present aspect of their affairs. There came forth, at the same time, an anonymous address, very energetical