NUMBER I.

TO meddle with the subject of the Currency was long deemed a matter of the highest imprudence; and tho' all saw and felt its decline, few had the hardiness publicly to declare it. But the depreciation became, at length, an object of such magnitude, and was so intimately connected with every movement, both political and military, that eve­ry eye became familiarized to it. The laws acknowledged it, and the news-papers, in successive essays, proclaimed it aloud. Various have been the schemes for remedying the evil; and appreciation, appreciation, has been the cry from one end of the Continent to the other. To combat the general voice, may be thought to savour of either folly or vanity. But as no injury can now happen to the public, from even torturing the subject into every shape, I am willing to risque the im­putation; and venture on the ocean of finance with my little bark. An ocean, much of which remains unexplored, and in which fog banks and islands of ice are often mistaken for land. If I perish with my little visionary crew by the falling of some mighty projecting promontory, future voyages must beware of my fate.

IT may be necessary to premise, that in the sundry calcu­lations which I may take occasion to exhibit, I shall gene­rally make use of whole numbers; as the nature of the sub­ject precludes accuracy.

BY the resolves of Congress in January, 1779, it appears they had emitted 123 millions of dollars. And in September following, in their circular letter, they state the amount ex­pended to be about 160 millions; and then proposed conti­nuing the emissions till they should reach 200 millions, ex­clusive of 33 millions borrowed on interest. I presume the said 200 millions are now compleated; for if in eight months (viz. from January to September) the expences were 37 mil­lions, when depreciation was on the general average 15 1-2 [Page 2] for 1, the remaining four months would undoubtedly con­sume 40 millions, because the average depreciation since September has been 35 1-2 for 1.

DURING the two first emissions, of 3 millions each, the money I believe continued at par, no actual diminution of value having taken place. How the depreciation has since gone on, may be seen by a table I shall subjoin to this letter, taking gold for the standard; which, by the by, has ever been behind every other commodity in advance of price. As we have no account of the quantities of all the several emis­sions, or the dates at which they were actually issued, it is in the breast of Congress alone, to determine with precision, how far the depreciation has kept pace with the quantity, and from thence in some measure to ascertain, whether the quantity alone, or some other concomitant causes, have pro­duced the effect. Was I to judge from mere conjectural ap­pearances, I should suppose the value of money has been principally affected by its relative quantity, when compared with the quantity of commodities for sale. For instance, if 10 millions of dollars, at 7s6 each, were sufficient for a me­dium of trade, when we had 40 millions of saleables, and we should at any time have 200 millions of dollars, I should suppose money would be depreciated as 20 to 1, because, not being of intrinsic value, or capable of exportation, there would be 20 times the number of bidders for every article on sale (for money is in fact the buyer or bidder) and of course the possessors of money could as well afford to give 20 prices for an article, as they could formerly to give one price. But if the quantity of saleables should be reduced to one half, or 20 millions, I should then say that the depreciation was ac­tually 40 for 1; because there was 40 times as much money as was necessary for a medium. This I presume is plain rea­soning. But to come nearer to the matter of fact, I must ob­serve that, from the best information I have been able to col­lect, the current money of America formerly never exceeded 16 millions of dollars, when the value of merchandize might be estimated at about 45 millions.

I fancy it will be readily allowed, that we have not at present above one fourth part of the quantity of saleables which we had formerly, consequently not much above 11 millions in value. Then, if 16 millions of money conducted the business of 45 millions of saleables, How much is necessary to nego­ciate 11 millions? The answer is, About 4 millions. And [Page 3] this proportion of money will be deemed very sufficient, if we recollect, that 6 millions of running cash served the whole business of England in Sir William Petty's time, when the saleables amounted to 42 millions and a half. Now as we have of Continental money about 200 millions, at a time when 4 millions would answer the purpose, it is evident there is fifty times as much as is necessary, and the money is in fact depreciated to fifty for one. I do not bring land into the ac­count of saleables, as the amount would be too uncertain to at­tempt; but I should suppose the local emissions of the several States, together with the value of Loan-Office money issued under the denomination of Certificates, may be deemed fully to counterbalance any allowance for the sale of real estates; especially when we reflect, that very considerable loans have been made since the 33 millions mentioned, in September.

I am very sensible, that I am obliged to assume my pre­mises, as no certain data can be formed, yet I conceive I am not much beside the mark; for if we reason back from effects to causes, we shall find, that on an average the prices of sale­ables are more than 50 for 1, and thence discover the medium to be 50 times more than is wanted. And I am the more con­vinced of the truth of this conjecture from the late prices of goods; which have in some measure become stationary or fixed. For though the quantity of money has been daily en­creasing, yet the quantity of goods, for some time past, crouded in upon us, has in some measure counterbalanced the quantity of money; whereby a kind of equilibrium hath been established, and trade has fairly regulated itself. The merchants endeavoured to advance the prices, but the money on hand was not sufficient to bear it; and it is just now, relatively, as scarce as when it passed equal to hard money. Should Congress continue striking at the rate of 10 millions a month, and 10 millions present value of goods should be imported in each month, I think I might venture to assert, that no further real depreciation could take place. As to any more capricious turns, they could not be durable. The ge­neral equilibrium between the quantity of goods, and the quantity of money would soon be restored.

THEN taking for granted, that the real depreciation is fifty for one, the grand question arises, "What is to be done?" Some cry, stop the press, and raise by taxes and loans sufficient for the exigencies of government; some are for a sudden appreciation to the rate of twenty for one; some [Page 4] for a foreign loan; and others for calling in the whole mo­ney, and re-issuing about one sixth part, which, say they, will be as valuable as the whole; and the remaining 5 6th to be funded, and carry an interest. These several modes resemble the prescriptions of anxious friends, standing round a sick bed—Some would bleed—some physic—one is for poultices, another for a bath of bitter herbs, whilst poor dame nature is labouring incessantly to throw off the disor­der by her own efforts, and would often succeed, if not in­terrupted by the ignorance of quacks. That the money has depreciated, we well know; and many have fatally felt its effects; but those partial evils I presume are pretty generally at an end. All old contracts are either settled or the prof­fered payments absolutely rejected; for he who can bear to lose 19s6 in the pound, will not be ruined by the other six pence. Let the debtor pay it into the Treasury, and the Laws support him as long as conscience will bear it. Pre­sent dealings are for ready money—not a moment's credit is allowed—the cash is paid, or the bargain void.

"Stop the presses"—easily said—But how are the current expences to be supplied?—"Raise taxes"—Every State on the Continent, is at it as hard as they can drive, and law after law has been passed for supplying the quotas called for by Congress. In November 1777, five millions were re­quired, in 1779 fifteen millions and forty-five millions. Yet I believe not one will assert, that even one fourth part of the whole is paid into the Treasury. In Sep­tember last, they tell us, no more than three millions had been received. To expect that a country can be brought to pay taxes, voluntarily, to support the whole demands of the year, in the midst of an expensive war, is as absurd, as to suppose the rent of a house will in one year pay for the building of it; nothing but an anticipation of the taxes can effect it. A young country, like America, can by no means be supposed to have such an overplus of riches as to furnish the sum wanted. In England they have long been com­pelled to borrow, in time of war, and the accumulating in­terest has nearly ruined the nation; they can now scarce le­vy taxes sufficient to pay the interest; for during the whole interval of the last peace, they have not, I think, paid four millions into the sinking fund.

"BORROW money then—at home—of foreigners—any where—rather than have fresh emissions."—What borrow [Page 5] on interest, when you may have it without!—Send your resources to foreign Courts when you may keep them at home!— I would ask, what is the difference between striking a million of Bills of 50 dollars each, and issuing Loan Of­fice Certificates for the same amount in notes of 500 dollars each? With respect to the quantity of paper, there is none; for Certificates are now as liable to circulation, as the money itself. We are not to conclude that the Certificates will re­main more dormant than the money did. He who puts money into the Loan-Office, may be presumed to have no immediate use for it; and that it was innocently resting in his chest, without rushing into circulation to encrease the sum current; and whenever it becomes convenient to make a purchase he would either bring out the cash or the Certi­ficate. Therefore to pay an interest of 6 per cent for money received at the Loan Office, is in my humble opinion to in­volve the country in a lasting tax, purely for the benefit of monied men. A tax which every man of small capital, ar­tisan and labourer, must annually contribute to raise, with­out the least benefit to themselves. From the first moment a Loan-Office was projected, I conceived it an error in po­litics, and it has brought on the country the great evil of a contrariety of interests.

WE see a great depreciation has happened of near 50 for 1, and every man who at the first paid 5000l. into the Loan-Office, has in fact sunk his stock to 100l. and so in propor­tion to the different dates at which they lent to the public; and many of these have been foreign lenders upon the credit and honour of the Continent. Now all these people have an interest different from the people at large, and must be continually wishing for a restoration of the value of the mo­ney; whilst the rest of the community who have gradually borne a share of the loss by depreciation from time to time, and have settled and squared all their transactions conform­ably thereto, cannot have a wish to see the money return to its original value. All they have to desire is, that the value may remain where it is, or if it still declines, that they may bear no more than their proportion of the loss.

IT may be asked what mode of settlement is to be adopted between government and the money lenders. Policy would answer ‘emit as much fresh money as will pay off the whole debt immediately,’ and justice would add, ‘let such an addition be made, as will amply reimburse the lenders, [Page 6] estimating the value of money at the time of subscribing.’ Perhaps some medium between the two, might be proper; for as people at large have borne their share of the deprecia­tion, these subscribers could not expect to set down whole. I don't pretend to determine, what such medium should be. I only contend for the immediate dissolution of the Loan-Office; for why should the Community be burthened with an addition of taxes, merely to pay an interest to monied men, for lending paper to government; when that very pa­per could be as well made without any other expence than striking it; and the larger these bills the better; if a thou­sand dollars each, it might help to retard the circulation, and lessen the charge of printing and signing. It is to be observed, that the whole of my reasoning on this subject turns upon the assertion, that Loan-Office Certificates are money to all intents and purposes, and operate in proportion to their quantity, equal to a like sum of Continental bills— if I am wrong my conclusions fall to the ground.

LOANS on interest in England are absolutely necessary; because real gold is paid into the treasury by the subscribers, but could their government manufacture that gold, as cheap as we can manufacture paper, will any man suppose they would prefer taking it up on interest? surely no; the habit we had long been accustomed to, of using paper money, ren­dered it familiar to us; and no one was alarmed with the consequences of an encreasing quantity, yet it is a debt to all intents and purposes; but being due to ourselves, the evil is not so great as if Foreigners were our creditors. The expe­riment might prove dangerous to Great-Britain, should she attempt to carry on a war with paper money, otherwise she might pledge her funds for redeeming it and save the interest, but her complicated trade and connection with foreigners would thereby be involved in great perplexity. It will be said, that much of the circulating medium of Great-Britain is already paper: I grant it with this difference, that it is not legal tender, and a man can at any moment convert it into actual hard cash. But I have rather wandered from the point: I only mean to prove, that it is highly injurious to America in the present state of things, to have a Loan-Office. As to foreign Loans with a view to serve the Currency, every ar­gument used against Loans amongst ourselves, applies with equal force against them, with this important addition, that the interest would be an actual drain of the wealth of our [Page 7] country. In the former instance it would only drain people of moderate and small fortunes for the benefit of the rich; but in the latter both rich and poor would lose for ever the interest so paid. How far Foreign Loans may be requisite to supply the Continent with such Foreign necessaries, as we have not the means of paying for at present, is a considera­tion which does not come within the present question.

I shall here insert the table of depreciation the greater part of which I had from a trader, whose business required his accounts to be kept in hard money, and agrees with accounts kept by some others with whom I have compared. And yet I am aware it cannot correspond with all, who may have kept such accounts, because the rates of exchange, between different persons, have often varied on the same day; I on­ly mean to demonstrate the general gradual depreciation; and the table here produced, will come near enough to the truth, for the use I propose making of it in my next letter.

NUMBER II.

IF taxes will not supply the present exigencies, and Loans, both domestic and foreign, are rejected; you say appreci­ate the money to 20 for 1 by acts of the several Assemblies, and oblige the venders of goods and tradesmen to charge their goods and work at that rate. Has not this mode been attempted three several times, and universally failed? Did not general discontents and murmurs prevail? Was not every artifice used to elude the scheme? Were not goods secreted? And did not one State take the advantage of the other, in either buying up from their neighbour, or refusing to have intercourse with them? Did not Congress (aware of the evils it produced) recommend the discontinuing such regu­lations? And is it not probable the same inconveniences will still arise? And after the people have been worrying and perplexing each other, will it not be likely to fall through? as trade carried on under restraint will be for ever attempt­ing to break the fetters. But should success attend the at­tempt, it would produce the very evil I would wish to avoid. An evil of the most alarming nature; converting an imaginary into a real debt, and riveting on the Continent a succession of taxes, which we should scarce ever be able to get clear of. Suppose we consider this subject a little more minutely. We will, for argument's sake, allow of the desired appreciation in its utmost extent; that by some magical stroke the whole Continental money, calling it 200 millions, should become equal to gold and silver; that a Continental dollar would purchase as much as a hard dollar would; why truly we should suddenly arrive at the possession of immense riches, provided we could export this same money as a commodity, and import, in lieu thereof, the production of other coun­tries; but as no one can expect this can happen, what is to be done with it? The excess of quantity is far beyond the value of saleables; is the surplus to be locked up? No, we will put it to interest with such as want: But this cannot be; for those who are to be the borrowers, cannot find ma­terials to vest it in. What is next to be done with this sur­plus? It appears to be a nominal not a real estate; it lies dormant by us, and nothing is to be bought with it, for the proportion in actual circulation answers every purpose. Is it to exist for ever in bits of paper, under the denomination of money? Or is it to be destroyed? Burned by all means▪ [Page 9] that, in case of another war, we may not have too great a re­dundance of it, by striking afresh, and again bring on our backs this monster depreciation. But how shall this same money be destroyed, in such equal proportions, as to give general satisfaction?—Very easily, by taxes.—Agreed. We will now, if you please begin to lay them, and try how long it will take to do the business.

Here is John Harrow, the farmer, for instance. He has a farm of 200 acres, and raises 400 bushels of wheat per annum, which, at 20l. per bushel, the present price, is 8000l. for which he shall pay the old accustomed rate of 1s6 in the pound; his tax will then be 600l. per annum.—But stop, the money is appreciated. John Harrow cannot get above 8s. per bushel for his wheat, his 400 bushels will only amount to 160l. of consequence his tax of 1s6 in the pound will yield no more than 12l. per annum; which is only one fiftieth part. Very pretty, truly! Why, then if this 200 mil­lions is to be made good money, we shall take fifty years to pay off that portion of the debt, which would have been paid off in one year, if the money had not appreciated: That is, John Harrow, instead of selling 30 bushels of wheat one year, at 20l. per bushel, to raise his 600l. he must now sell this same 30 bushels for 12l. and have the same to do every year for 49 years to come; which would in fact be a tax upon John Harrow of 1500 bushels, instead of 30; and all this for the honor of making our money good.

WE will now, if you please, bring it upon a more general scale: Pennsylvania formerly raised by an 1s6 tax about 25,000l. per annum, at 7s6 the dollar. Now Pennsylvania being deemed 1-8th of the Continent, we may say the whole Thirteen States would raise by a 1s6 tax about 200,000l. which is somewhat about half a million of dollars. Thus we find it would take only about 400 years to sink the said 200 millions of dollars. But this same 400 years would carry us to so distant a period, that few of the present generation could hope to see a settlement of the account; and great frauds might be committed by our successors; to remedy which, suppose, for the honor of the present race, we should annually pay the whole of our incomes, or 20s. in the pound, which will raise just 13 times and 1-3; as much as the 1s6 tax would, and so finish the job in about 30 years. In the mean time, we may go abroad upon our travels, whilst our estates are out at nurse, as the English phrase is; and at the end of [Page 10] this quarter of a century we might return, and spend the remainder of our lives in Peace and Plenty. But pray, who are to work your estates in your absence?—A good re­mark— Why then, we must 'een drudge on as slaves during the said 25 years, live on the husks and sell the grain, for the honor of appreciation.

YOU ask next "how this enormous debt of 200 millions came upon us? Is it possible we can have expended 50 mil. per annum honestly and fairly, or have there been frauds and embezzlements?" All very fairly: The quantity of money in­creasing daily beyond the medium necessary for circulation, a gradual depreciation took place; every one having plenty of money to buy with, the sellers advanced their prices, in proportion to the number of bidders, 'till at length they rose on an average to about 50 for 1. "And have the public expences been managed in this way?" Undoubtedly, all the late expenditures for the army, navy, &c. have been on an average at that rate. Then, surely, the different receivers, and all subsequent handlers of the money, who have made Con­gress pay 50 prices, ought not to have the same money made equal with gold; for, should that be the case, the present money-holders would be enormous gainers, and the Con­tinent for 400 years to come must feel its effects. Then you would have the money remain at its present value? Cer­tainly, if it can be kept there; but by no means carried back towards its former value.

BUT the depreciation will run on rapidly if we keep strik­ing; for you intimate that the taxes we may expect to raise, will be but as a drop in the bucket.—Pray, what great public evil do you imagine has happened from the depre­ciation? —Oh! very great. Our money is good for nothing it will take an estate to go to market, every thing is so high that common people can scarcely find money enough to pur­chase the necessaries of life, putting taxes out of the question which taxes they say must be raised or we shall be all ruined Suppose, I was to assert in answer, that there is at presen no absolute necessity for high government taxes, that the natural unavoidable tax of depreciation is the most certain expeditious and equal tax that could be devised. Upon the [...] which has lately existed, every possessor of money has paid a tax for it, in proportion to the time he hold it. Like a hackney coach it must be paid for by the hour. And this no man can escape. It is the very tax the Assembly of [Page 11] Pennsylvania have, in vain, attempted to levy, by obliging every person to disclose, on oath, the sum in his possession. I say, in vain; for I will venture to predict, that the Assessors will not find out one fifth part of the cash which is actually amongst us. But, depreciation is an Assessor that gets at every farthing, and baffles every attempt to deceive. To make myself better understood, I will state an account in double columns, viz. Continental and Hard money, at the different dates of depreciation; though it is to be noted, that I have no certain documents, as to time or quantity, and that I estimate the depreciation by the price of gold, which has always been below every other commodity. It will serve however to illustrate my reasoning.—When this account is examined, it will probably be thought very surprising, that the neat expences of 1779, when brought into gold, should fall so much short of those in the preceding years. It cannot well be accounted for, but by supposing, that the large sums received at the Loan-Office have made up the deficiency; but of this we have no account later than September last. The only certain premises we can procede on, are; That two hundred millions of dollars have been issued; that one hundred and twenty-three millions were expended Decem­ber 1778; that the remaining seventy-seven millions were expended in the year 1779; and that the table of deprecia­tion, in the foregoing part of this paper, is a true state of the decline of the money, when compared with gold. Be the appearance what it may, the fact is, that at whatever dates the two hundred millions have been expended, the va­lue of money at those dates must be taken for the real sum expended; for though at one time it took six thousand dol­lars to purchase a thousand barrels of flour, and at another time two hundred thousand dollars, the actual expence to the country is exactly the same; it is the article supplied, and not the nominal sum paid, which constitutes the real expenditure.

[Page 12]Dr. The United States in account with Continental Money.

BY this state of the matter, the whole expences have amounted to 48 millions of hard dollars, 43 of which have been sunk in the time by depreciation. Now I would ask the best financier amongst us, whether in four years he could have levied a tax of 43 millions of hard dollars, in a more equal or less expensive way? Here have been no com­missions to pay, no embezzlements, no public defaulters, and no appeals, except by the possessors of old contracts, who have been ungenerously and unjustly paid off in current nominal value, under sanction of laws, which ought long ago to have been repealed.

I can scarcely think it possible, that those who wish to see the money restored to its original value, have ever adverted seriously to the subject. We find, that Congress have ex­pended, in the last four months, 40 millions of dollars, be­sides the sums received at the Loan-Office. Now would any man, in his senses, wish to have the Continent at the expence of above 10 millions of hard dollars per month? Is he aware that at 4s6 sterling per dollar, it amounts to nine millions of sterling pounds for the said four months? A sum almost twice as large as Great-Britain expended in any four months of the last war. This would be extravagance in the extreme, and the more inexcusable as the nature of the case [Page 13] by no means requires it. Every man who now receives the money, estimates it at the proper discount. If he sells a house, a horse, or a piece of goods, he demands at least for­ty prices for them, and in many articles vastly more, so as to have on an average near 50 prices; then, from what train of reasoning are these money-holders to receive the value of a hard dollar, for every Continental dollar thus obtained, at the fiftieth part of its value? Should the war continue, emissions of some sort must run on, and the money will ine­vitably sink in value; and, politically speaking, this would not be an evil, for it would still operate as a gradual tax, affecting every individual in the community. Let us, for ar­gument sake, suppose that the war should last another year. The expences of that year added to the foregoing emissions would probably stand, as follows:

Dr. The United States in account with Continental Money. Cr.

[Page 14]IN stating this second account, I have gone upon the principles of Congress having emitted, for the four last months, at the rate of ten millions per month; which at fifty for one, is 200,000 hard dollars. This sum I have taken as the expenditure of every month, and have gradually va­ried the exchange, exactly in proportion to the quantity en­creased, beyond the sums required for a medium; from whence it followed, that as the rate of exchange advanced, a proportionable addition to the monthly emission became necessary; and though the emissions have amounted in this estimate to three hundred fifty-nine millions of dollars, we find depreciation has still been our faithful friend, and kept us from sinking under the burthen. We find, notwithstanding the enormous sound, that the sum of 5 1-4 millions of hard dollars would redeem them all, without any person having a right to complain; for, having received the money from time to time at the depreciated rate, no one could reasonably ob­ject to reducing them to that real value.

WHEN the war is over, I should have no objection to a foreign loan, to pay off the whole currency at the rate then existing, which no man could be displeased with, and great confusions might be avoided. We should then know what was our real debt, and apply ourselves in good earnest to sink both principal and interest as fast as the country could bear it. But funding paper money with paper money, and paying an interest for what we may have without, is an im­position on the middle and poorer class of people, who will have nothing to lend, but will be for ever paying taxes for interest money received by the rich. I am therefore averse to a Loan-Office of any kind at the present; to enormous taxes; and by all means object to every scheme tending to appreciation.

NUMBER III.

FROM the calculations which have been exhibited, it appears, that the real debt of America, at the end of the year 1780, will probably amount to no more than five mil­lions and a quarter of hard dollars, exclusive of Loan-Office Certificates; which sum will be sunk by an 1s6 tax in 10 years. This is evident from the principles we have already assumed, viz. that Pennsylvania is estimated at an eighth of the Continent, and raises by an 1s6 tax 25,000l. per annum. [Page 15] But, should the desired appreciation succede, and the nomi­nal sum, of 359 1-4 millions of dollars, become equal to its declared value, it would require near 700 years to sink the whole. It may probably be said, that a sudden appreciation is not intended, and therefore the reasoning, here urged, will not apply; to which I answer, that the evil of appreciation will be felt in exact proportion to its retrograde motion. If the general appreciation should average 30 for 1 in any given time, accounting back from the present, and then remain fixed, I should say, that instead of 400 years tax, as supposed in my former numbers, it would only take 100 years. If it was reduced to 20 for 1, it would take 200 years, if reduced to 10 for 1,300 years. Any appreciation whatever will ope­rate against the payment of the debts; it would produce an effect to which the whole circle of politics could not produce a parallel, viz. a government refunding to its inhabitants the taxes they have been paying; for we must insist that depre­ciation is an actual tax, and that appreciation is an actual refund. For instance: John Harrow, in June, 1779, when exchange was 20 for 1, sold a pair of oxen for 200l. with which sum he could have bought two pieces of linen, of 25 yards each, at 4l. per yard, which formerly sold at 4s. per yard. But John Harrow neglecting to make the purchase till December, when exchange was 40 for 1, he could buy with the produce of his two oxen no more than one piece of linen, because the price had risen to 8l. per yard; then, surely, it fol­lows that John Harrow has paid a tax amounting to the va­lue of one ox. On the other hand, suppose John Harrow kept his money till this day, and a paper dollar should pass equal to a silver dollar, his 200l. would bring him 40 pieces of linen, by which he would gain 38 pieces. But how think you is the apparent gain to be provided for? Is it not by John Harrow, and every other farmer and inhabitant, in­volving themselves either in a monstrous immediate tax, or a duration of moderate taxes on them and their heirs, to the end of the world, for aught we know.

NOR will the effects of appreciation be in any way equally distributed. The monied man will become suddenly rich; but the poor man, who has seldom a week's cash beforehand, will be for ever labouring under taxes, to repair the loss en­tailed on the public by appreciation. Here it must be noted, that I reason upon the supposition of a total and permanent appreciation, but I must so far do justice to my own senti­ments, [Page 16] as to declare my belief, that it is a matter absolutely impracticable; for though, by strenuous efforts, it might be carried into execution, and money be universally received at the declared value, I contend that it would be but of short duration; that its quantity would inevitably operate against its fixture; and continually pressing against the unnatural barrier, like a river dam'd in its course, it would quickly overflow the banks, and deluge the adjacent country with irresistible fury; tearing down whole cities and villages in its way; thousands upon thousands would be ruined by the attempt, and general confusion ensue. All which may be prevented by suffering the stream to flow in its natural chan­nel, without obstructions. Let the money find its own weight, it will balance itself much better than can be done by any attempt of ours.

SOME are apprehensive, that if a check is not given to depreciation, the credit of the money will be reduced to so low an ebb, as to become entirely stagnant. These timid politicians would do well to look back to the money in its first stages of depreciation, and enquire of themselves, what they would have thought, if some prying financier had as­sured them, that in less than 3 years its value should sink to 40 for 1, would they not have asserted, with disdain, that the matter was impossible; that long before it arrived at such a stage it would cease to circulate? Nor ought their false judgments to have been too severely reflected on, for the sub­ject was but little studied, and less understood. But at pre­sent we can look back, trace its progress and define its cause. And from a series of reasoning, pronounce with some certainty, that no interruption to its passing can arise from its mere quantity. Should it gradually sink, even to 1000 for 1, I freely declare my opinion, that it would pass as cur­rent as at present, and would be relatively as scarce. Per­haps we have not, in general, sufficiently attended to the subject; otherwise we should not so hastily assert, that the depreciation has latterly run on with rapidity. It is an error and arises from a want of considering the proper progression of numbers.

WHEN the money sunk from one to two, we all agree that it sunk one in value, when it fell from two to three, it is said to have sunken one more; but this I deny, it only sunk half of one, and when it proceded from three to four, its gradation instead of being one, was only one third of one. [Page 17] In other words, when it decreased in value from two to four, it fell no faster than in going from one to two. From four to eight, from eight to sixteen, and from sixteen to thirty-two, the actual decline is no greater than from one to two. Hence we find, that when money passes from thirty to forty, it makes no larger step, than it did in going from three to four, that is one third more. When once we get into in­creased numbers, we should consider, that we proceded by fractions. Exchange rising from twenty to twenty-one, advances in fact only one twentieth. From twenty to twen­ty-five is only an advance of five twentieths, or one quar­ter; and from twenty to thirty it has only advanced ten twentieths, or one half; and that it must run all the way from twenty to forty, before the depreciation becomes as great as it did when it rose from one to two, or from two to four; and the depreciation may continue from forty to eighty, without a greater acceleration than it had in passing from one to two. To render this subject a little more fa­miliar, as well as to point out the injustice of the present laws, respecting the payment of debts, we will once more call upon John Harrow for an illustration. We will sup­pose John to pay an annuity out of his farm of 32l. per an­num, which sum he usually raised by sending hickory wood to town. Here the reader will observe that the rates of ex­change, respecting the dates, are merely imaginary, and not confined to the true state.

BY this we perceive, that in 1776, money falling from the full value to two for one, John saved half of the quan­tity of wood which he cut in 1775—In 1777 he saved half of the quantity cut in 1776—In 1778 he saved half of the quantity cut in 1777—In 1779 he saved half the quantity cut in 1778,—and in 1780 he saved half the quantity cut in 1779. When exchange went from par to two, it only advanced one in number, and when it proceded from sixteen to thirty-two, tho' the depreciation was deemed alarming, its progress was but just equal to the variation from one to [Page 18] two. In the first case he sent but half the quantity he did the preceding year; and in the second case he likewise sent but half the quantity; and thus we may go on to a very high amount. From the rate of thirty-two for one, we must proceed as far as sixty-four for one, before the money will suffer depreciation equal to the first alteration from one to two, and it must then go on to one hundred and twenty-eight for one, before it has made another stride similar to the first. Now let any person look back to the late pro­gress of depreciation, and he will find that he has less occa­sion to be alarmed, at this day, then he had when it varied from one to two. The jump then made, would have been truly alarming, if it had been properly attended to, but a mix­ture of caprice, fear and interest, produced an effect of which few were aware; and these causes continued to ope­rate, perhaps, till it arrived to four or six for one; by which time, I should suppose, that the waves which had been ex­cited by the agitation of the passions, were pretty well sub­sided, and the surface of the financial ocean restored to its proper level. Effects followed their causes, and the swell increased but as the wind blew. The quantity of the mo­ney determined its value, and so it would probably continue to an excess which I should not choose to enter on. I know of no period to depreciation, or cause of stoppage from mere quantity. I am very sensible that those who have gi­ven themselves the trouble to think on this subject, will charge me with using needless repetitions, and labouring the matter beyond what is necessary. But it is a subject of great importance, and cannot be too fully and closely investigated. The more points of view we place it in, the better it will be understood.

In Portugal they calculate in mille-rees; that is, in pieces of silver, supposed to contain 1000 parts, being somewhat more than one of the Spanish dollars; now a thousandth part of a dollar is a sum of which, at first view, we have no adequate idea, when compared with a farthing, which is our lowest denomination; but affixing to it a compound va­lue, or calling it a mille-ree, we can readily subdivide it low enough for every purpose of trade. Then suppose deprecia­tion should continue till it reached 1000 for 1, and we should change the denomination of a dollar to a mille-dollar, that is to a dollar subdivided into a thousand parts, we should as easily keep our accounts, and transact the affairs of trade [Page 19] with as much precision, as if we were trading in hard dol­lars. A paper bill instead of being called one dollar might represent the thousandth part of a dollar, and answer every purpose of money, if the rate was once established. And this mode of calculation might continue, even after the paper dollars were all consumed by a foreign loan, and real gold and silver became the only money current. Some may probably think I treat the point in too visionary a manner; but I request them to sit down seriously to the subject, and I will then venture to pronounce that they will inevitably fall into my train of thinking.

THEY will quickly acknowledge, that it is not the amount of nominal dollars which constitutes the debt of America; which alone arises from the real value of home produce con­sumed, of foreign goods impo [...]d, and of labour, wages and salaries paid; these constitute our debt. With respect to the nominal amount in paper money, I contend that it is of small importance, whether the sum be called 5 millions or 500 millions, with this proviso, that we do not, in the lat­ter case, transmute paper into silver, and determine at all events to pay a hard dollar for every imaginary dollar emitted.

SUPPOSE the crew of Captain Cooke's ship, in his 3 years voyage round the South-Pole, had carried their amusement of gaming to so high a pitch, that it became necessary to pass notes of hand for the payment of the sums lost, and that these notes had amounted to millions of pounds: Suppose they had even divided the entire stock of provisions, and some had won from the others their whole share. I would ask, whether the ship would be interrupted in her voyage by such exchange of property, or would she be less able to procede than if no such gaming had happened. As a little Common-wealth, her internal resources and abilities would undoubted­ly remain the same; the rich must of necessity permit the poor to partake of the stock for the common good of the voyage, and the ship's general design of making new disco­veries, would be prosecuted without any other difficulties, than those naturally incident to the sea, and the gradual de­cline of the ship's stock of provisions. If fresh supplies could from time to time be procured, they might sail, play and pass notes from year to year, till the ship's bottom could bear them no longer; but should it prove impracticable to com­mand such supplies, then, and not till then, the voyage [Page 20] would from necessity terminate. So with America—Whi [...] the country can supply the actual necessaries of government, no excess of paper money can prove a bar thereto. What we have most to fear is from injudicious attempts to give a value to our currency beyond what its quantity demands.

I have endeavoured to prove, that the decrease of the value of money has been generally occasioned by its increased quan­tity; that in its progress it has operated as a tax; that Loan-Office Certificates are money to all intents and purposes, and therefore the interest arising thereon is a burthen on the community, without our deriving the advantage thereby proposed; that in good policy, these Certificates should all be called in, and a just compensation made to the holders; that foreign loans, during the present war, may prove ruin­ous drains to the Continent, and can answer no one good purpose more effectually than paper money would; that a total appreciation of the sum now current, would bring us under a debt, which an 1s6 tax for 400 years would scarcely clear us from, when on the contrary it is evident, the same tax of 1s6 would sink the whole in less than ten years, if the money should remain at its present value. I have also en­deavoured to shew, that depreciation has not been so rapid as was generally thought; that an increase of quantity ought not to alarm us; that the fear of its becoming stagnant is entirely groundless, and that it would circulate as freely as at present, although the quantity should be encreased to a great excess.

IF the thoughts I have here thrown together should be deemed injurious to the common interests of America, I should be obliged to the writer who would point it out; and should be happy to be released from the dread which has long preyed on my mind, that a general distress would be brought on the country by appreciating the money. I declare upon honor, that I am no other way interested in the event, than as a citizen of America; nor have I, in a single instance, an advantage to make by depreciation, but am daily suffering by it. I have stated my sentiments with candour, and submit them to the public; and all I ask in return, is a candid per­usal, and fair refutation, if I am wrong.