Never did a nation unite more circumstances in its favor than we do: we have nothing against us but our own misconduct.
There are two classes of men among us, equally mistaken: one who, in spite of daily experience, of accumulated distress, persist in a narrow line of policy, and, amidst the most threatening dangers, fancy every thing in perfect security. Another, who, judging too much from the outside, alarmed by partial misfortunes, and the disordered state of our finances, without estimating the real faculties of the parties, give themselves up to an ignorant and ill-founded despondency. We want to learn to appreciate our true situation and that of the enemy. This would preserve us from a stupid insensibility to danger on the one hand, and inspire us with a reasonable and enlightened confidence on the other.
But let us suppose the worst, that we shall, after all, fail in our independence; our return to Great Britain, whenever it should happen, would be by compact. The war would terminate by a mediation. It cannot be supposed that the mediator would be so devoted to Great Britain, or would have so little consideration for France, as to oblige us to revert to our former subjection by an unconditional surrender. While they might confirm his dominion over us, they would endeavor to save appearances for the honor of France, and stipulate terms as favorable to us as would be compatible with a state of dependence. A general amnesty, and the security of private property (of course the payment of public debts), would be among the most simple and most indispensable. This would comprehend the concerns of the Bank; and if, unfortunately for our virtue, such a circumstance could operate as an inducement, it might be added, that our enemies would be glad to find, and to encourage such an institution among us for their own benefit.
A question may arise concerning the abilities of these States to pay their debts after the establishment of their independence; and though any doubt on this head must originate in gross ignorance, it may be necessary to oppose it with more than general argument, as has been done heretofore. A very summaryand obvious calculation will show that there is nothing to be dreaded on this head.
The funds of nine hundred and seventy-nine thousand, three hundred and thirty-three, and one-third, dollars, proposed to be established for paying off the loan of the first year, and for redeeming the present paper, will, in thirty years, wipe off all the debts of the States, except those contracted to foreigners, which, I imagine, do not amount to four millions of dollars. Suppose we should be obliged, for two years besides the present, to borrow an equal sum each year from the Bank; the fund requisite to discharge these loans, on the same terms with the first, will amount to seven hundred and thirty-six thousand dollars, to be deducted from the five million, and twenty thousand, six hundred and sixty-six, and two-thirds, dollars, remaining on the annual revenue; which will reduce it to four millions, two hundred and eighty-four thousand, six hundred and sixty-six, and two-thirds, dollars: then the debt unfunded will be,
Should, then, the war last three years longer, which must probably be the utmost term of its duration, we shall find ourselves with an unfunded debt of nine million, five hundred and forty-two thousand dollars, and an unappropriated revenue of four million, two hundred and eighty-four thousand, six hundred and sixty-six, and two-thirds, dollars.
The surplus of four millions, which is two hundred and eighty-four thousand, six hundred and sixty-six, and two-thirds, dollars, and the funds appropriated to the payment of the other debts which will revert to the public at the end of thirty years,will be a sufficient fund for the redemption of this debt in about thirty-five years: so that, according to my plan, at the end of thirty-five years these States have paid off the whole debt contracted on account of the war; and, in the mean time, will have a clear revenue of four millions of dollars, for defraying the expenses of their civil and military establishments.
This calculation supposes the ability of these States for revenue to continue the same as they now are, which is a supposition both false and unfavorable. Speaking within moderate bounds, our population will be doubled in thirty years; there will be a confluence of emigrants from all parts of the world; our commerce will have a proportionable progress; and of course our wealth and capacity for revenue. It will be a matter of choice if we are not out of debt in twenty years, without at all encumbering the people.
A national debt, if it is not excessive, will be to us a national blessing. It will be a powerful cement of our Union. It will also create a necessity for keeping up taxation to a degree which, without being oppressive, will be a spur to industry, remote as we are from Europe, and shall be from danger. It were otherwise to be feared our popular maxims would incline us to too great parsimony and indulgence. We labor less now than any civilized nation of Europe; and a habit of labor in the people, is as essential to the health and vigor of their minds and bodies, as it is conducive to the welfare of the State. We ought not to suffer our self-love to deceive us in a comparison upon these points.
I have spun out this letter to a much greater length than I intended. To develope the whole connection of my ideas on the subject, and place my plan in the clearest light, I have indulged myself in many observations which might have been omitted. I shall not longer intrude upon your patience than to assure you of the sincere sentiments of esteem with which I have the honor to be,
Sir, your most obedient and humble servant,A. Hamilton.
Sir, your most obedient and humble servant,A. Hamilton.
Sir, your most obedient and humble servant,A. Hamilton.
[12]It is to be feared, too, that this sum is rated too high. Hitherto we have not four hundred men from that State, nor very promising accounts of those which may be expected.[13]The proportion of the European armies, in general, to the national population, is calculated at one to a hundred. By this rule, supposing our population to be two and a half millions, our armies ought to consist of twenty-five thousand men; but the proportion will naturally be less in this country. Our population is more diffused; there is a greater facility of procuring subsistence, fewer poor (and consequently fewer of that class of men whose habits, tempers, and circumstances lead them to embrace the military life) than in any other country in the world. Hence it is, I say, twenty thousand men are as many as we shall be able to raise. Experience justifies this opinion. In the first paroxysms of enthusiasm our armies were larger. I believe, at particular periods, we have had more than thirty thousand men in the field: but our force has every year diminished, and has been for two years past below the standard I have assigned. Immense efforts have been made to procure men, but they have not been able to produce more. This shows that our military system is still susceptible of great reforms in favor of economy; but we dare not make them, because we cannot pay the army. I also said, twenty thousand men would be as many as we should stand in need of. The enemy have now less than this number within the States; and cannot, in the future progress of the war, have more.An equal force, with the occasional aid of the militia, will confine them within one or two capital points; and this will be their defeat. But we have a further resource in the troops of our allies. We must not dream of decisive enterprises, unless our allies will assist us with twelve or fifteen thousand land troops, and an undisputed maritime superiority. Then, with the aid of the militia, drawn out for a few months, we may undertake and succeed. Our true policy, in the meantime, is, to endeavor to form a solid compact force, proportioned to our necessities.[14]The possibility of making up so large a proportion of specie will depend on foreign assistance. It could hardly be hoped to effect it within ourselves, if, as I suppose, there are not more than six millions of dollars in these States. It is true, plate is admitted; but it is uncertain how far this may prove a resource. It were to be wished the proportion of specie might be as large as possible: but, perhaps, for fear of a failure, it may be advisable to alter the above proportions, so as to have, upon the whole, about one-third in specie, and two thirds in European funds and landed security.[15]It may, perhaps, not be impossible to make some profitable speculations on the bullion which the Spaniards are afraid to transport from South America to Europe.[16]It is impossible too soon to make some arrangement that will enable Congress to put a stop to the further emission.[17]There is another immense consideration. The proprietors of the Bank will be the holders of a great part of this paper. They have it in their power to double the value of it by this plan: which is, in other words, to gain a hundred per cent.
[12]It is to be feared, too, that this sum is rated too high. Hitherto we have not four hundred men from that State, nor very promising accounts of those which may be expected.
[12]It is to be feared, too, that this sum is rated too high. Hitherto we have not four hundred men from that State, nor very promising accounts of those which may be expected.
[13]The proportion of the European armies, in general, to the national population, is calculated at one to a hundred. By this rule, supposing our population to be two and a half millions, our armies ought to consist of twenty-five thousand men; but the proportion will naturally be less in this country. Our population is more diffused; there is a greater facility of procuring subsistence, fewer poor (and consequently fewer of that class of men whose habits, tempers, and circumstances lead them to embrace the military life) than in any other country in the world. Hence it is, I say, twenty thousand men are as many as we shall be able to raise. Experience justifies this opinion. In the first paroxysms of enthusiasm our armies were larger. I believe, at particular periods, we have had more than thirty thousand men in the field: but our force has every year diminished, and has been for two years past below the standard I have assigned. Immense efforts have been made to procure men, but they have not been able to produce more. This shows that our military system is still susceptible of great reforms in favor of economy; but we dare not make them, because we cannot pay the army. I also said, twenty thousand men would be as many as we should stand in need of. The enemy have now less than this number within the States; and cannot, in the future progress of the war, have more.An equal force, with the occasional aid of the militia, will confine them within one or two capital points; and this will be their defeat. But we have a further resource in the troops of our allies. We must not dream of decisive enterprises, unless our allies will assist us with twelve or fifteen thousand land troops, and an undisputed maritime superiority. Then, with the aid of the militia, drawn out for a few months, we may undertake and succeed. Our true policy, in the meantime, is, to endeavor to form a solid compact force, proportioned to our necessities.
[13]The proportion of the European armies, in general, to the national population, is calculated at one to a hundred. By this rule, supposing our population to be two and a half millions, our armies ought to consist of twenty-five thousand men; but the proportion will naturally be less in this country. Our population is more diffused; there is a greater facility of procuring subsistence, fewer poor (and consequently fewer of that class of men whose habits, tempers, and circumstances lead them to embrace the military life) than in any other country in the world. Hence it is, I say, twenty thousand men are as many as we shall be able to raise. Experience justifies this opinion. In the first paroxysms of enthusiasm our armies were larger. I believe, at particular periods, we have had more than thirty thousand men in the field: but our force has every year diminished, and has been for two years past below the standard I have assigned. Immense efforts have been made to procure men, but they have not been able to produce more. This shows that our military system is still susceptible of great reforms in favor of economy; but we dare not make them, because we cannot pay the army. I also said, twenty thousand men would be as many as we should stand in need of. The enemy have now less than this number within the States; and cannot, in the future progress of the war, have more.
An equal force, with the occasional aid of the militia, will confine them within one or two capital points; and this will be their defeat. But we have a further resource in the troops of our allies. We must not dream of decisive enterprises, unless our allies will assist us with twelve or fifteen thousand land troops, and an undisputed maritime superiority. Then, with the aid of the militia, drawn out for a few months, we may undertake and succeed. Our true policy, in the meantime, is, to endeavor to form a solid compact force, proportioned to our necessities.
[14]The possibility of making up so large a proportion of specie will depend on foreign assistance. It could hardly be hoped to effect it within ourselves, if, as I suppose, there are not more than six millions of dollars in these States. It is true, plate is admitted; but it is uncertain how far this may prove a resource. It were to be wished the proportion of specie might be as large as possible: but, perhaps, for fear of a failure, it may be advisable to alter the above proportions, so as to have, upon the whole, about one-third in specie, and two thirds in European funds and landed security.
[14]The possibility of making up so large a proportion of specie will depend on foreign assistance. It could hardly be hoped to effect it within ourselves, if, as I suppose, there are not more than six millions of dollars in these States. It is true, plate is admitted; but it is uncertain how far this may prove a resource. It were to be wished the proportion of specie might be as large as possible: but, perhaps, for fear of a failure, it may be advisable to alter the above proportions, so as to have, upon the whole, about one-third in specie, and two thirds in European funds and landed security.
[15]It may, perhaps, not be impossible to make some profitable speculations on the bullion which the Spaniards are afraid to transport from South America to Europe.
[15]It may, perhaps, not be impossible to make some profitable speculations on the bullion which the Spaniards are afraid to transport from South America to Europe.
[16]It is impossible too soon to make some arrangement that will enable Congress to put a stop to the further emission.
[16]It is impossible too soon to make some arrangement that will enable Congress to put a stop to the further emission.
[17]There is another immense consideration. The proprietors of the Bank will be the holders of a great part of this paper. They have it in their power to double the value of it by this plan: which is, in other words, to gain a hundred per cent.
[17]There is another immense consideration. The proprietors of the Bank will be the holders of a great part of this paper. They have it in their power to double the value of it by this plan: which is, in other words, to gain a hundred per cent.