Formation of the Union

A >> Albert Bushnell Hart >> Formation of the Union

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43. FINANCES OF THE REVOLUTION (1775-1783).

[Sidenote: Resources.]

The successful termination of the war is the more remarkable because it
was fought by a government almost without means, and finally without
credit. The saddest part of the suffering at Valley Forge is that it was
unnecessary. There was always food and clothing in the country, but
Congress had no money to buy it. Congress had no power to lay taxes, and
the colonies, most of which were spending large sums on their own militia,
were not disposed to supply the general treasury. The pay of the
Continental troops and of the general officers, the furnishing of
equipments and stores, the support of foreign embassies, were burdens that
must be borne, and Congress must find the means.

[Sidenote: Continental currency.]

The most successful and the most disastrous resource was the issue of
paper-money. When, in June, 1775, it was proposed to meet the general
expenses by putting forth two millions in Continental notes, there was but
feeble objection. It was the only way of raising money which seemed to
cost nobody anything. In the course of a year four millions more followed.
Congress, with commendable foresight, called upon each colony to pay in a
sum sufficient to retire its proportion of the issue. Nothing was paid,
and the printing-press was again put in motion, until in January, 1779,
fifty millions were issued at a time. In November, 1779, the limit of two
hundred millions was reached. In order to float these notes the States
passed acts making them a legal tender; but at the same time they were
themselves issuing large sums in a similar currency. Counterfeits
abounded, but it soon became a matter of little difference whether a bill
was good or bad, since the best was worth so little. From the time of the
capture of New York by the British in 1776 the notes began to fall. In
1778 the news of the French alliance caused a little rise; but in 1781 the
bills fell to a point where a thousand dollars exchanged for one dollar in
specie, and a Philadelphia wag made out of the notes a blanket for his
dog. The Continental currency was never redeemed, and was consequently a
forced tax on those who were least able to pay, since every holder lost by
its depreciation while in his hands.

[Sidenote: Loans.]

The absolutely necessary expenditures, without which no army could make
head against the British, were from twenty to twenty-five million specie
dollars each year. Of this the Continental bills furnished on an average
some eight or ten millions. Another method of raising money was that of
borrowing on funded loans. Great schemes were put forth. The United States
were to borrow at four per cent; they were to borrow two millions; they
were to borrow ten millions; they were to borrow twenty millions. The
result was that in three years $181,000 was thus loaned, and up to the end
of the war but $1,600,000,--hardly a hundredth part of the necessary
means. Failing to raise money directly, recourse was bad to the so-called
loan-office certificates. These were issued to creditors of the
government, and bore interest. The greater part of the military supplies
were paid for in this extravagant and demoralizing fashion, and in 1789
they had to be settled, with accumulated interest amounting to nearly
fifty per cent. Better success was had in Europe. No private banker would
lend money to a set of rebels not recognized by any government as
independent, but the French and Spanish governments were willing to
advance both money and stores. In this way the United States received
about three million dollars.

[Sidenote: Requisitions.]

When it was evident that the domestic loan had failed, Congress called
upon the States to furnish five millions of dollars, apportioned among
them according to their importance. These requisitions were repeated at
intervals during the Revolution, but always with the same effect. Not a
fourth part of the sums asked for was paid by the States. A system of
"specific supplies" was adopted in 1778, by which the States were allowed
to pay their quotas in kind. It added a new source of confusion, and
brought no more revenue.

[Sidenote: Miscellaneous resources.]

Every device that the government could put into operation for raising
money was eventually tried. A lottery brought considerable sums into the
treasury, the supplies for the army were seized at Valley Forge and
elsewhere, and paid for in certificates. Bills were drawn on foreign
ministers for funds which it was hoped they might have in hand by the time
the bills reached them, and the government bought, and sent abroad to meet
its indebtedness, cargoes of tobacco and other products.

[Sidenote: Speculation.]

The financial burdens of the government were increased by a spirit of
extravagance, speculation, and even of corruption. Washington wrote,
"Unless extortion, forestalling, and other practices which have ... become
exceedingly prevalent can meet with proper checks, we must inevitably sink
under such a load of accumulated oppressions." The whole cost of the war
is estimated at one hundred and thirty-five millions. Of this about one
hundred millions had been raised through the Continental bills and other
devices. About thirty-five millions remained as a national debt.

44. INTERNAL DIFFICULTIES (1775-1782).

[Sidenote: Weakness of Congress.]

That Congress was able to make no better provision for the finances was
due to a decline in its prestige rather than to a lack of interest in the
war. Some of the ablest members were drawn into military service, or sent
on foreign missions. The committee system made it inefficient, and it was
difficult to bring it to a decision upon the most important matters. In
vain did Washington storm, and implore it to act quickly and intelligently
on military matters of great moment. Its relations with the States changed
as the war advanced. Dec. 7, 1776; Congress made Washington for a time
almost a dictator. In 1779 the Virginia legislature formally denied that
it was "answerable to Congress for not agreeing with any of its
recommendations."

[Sidenote: The loyalists.]

To the frequent unfriendly relations with the States was added the
constant conflict with the loyalists. Throughout the colonies the
adherents to England or the sympathizers with the English government were
under grave suspicion. Many of them left the country; some enlisted with
the British, and returned to fight against their own land. A body of
loyalists led the hostile Indians into the Wyoming valley to torture and
to murder. The loyalists who remained at home were often the medium of
communication with the British lines. Some of them, like Dr. Mather Byles
of Boston, and George Watson of Plymouth, were allowed to remain on
condition that they held their tongues. Washington was so exasperated with
them that he termed them "execrable parricides." In every State the
loyalists were feared and hated. When the British invaded the country, the
loyalists joined them; when the British were repulsed, thousands of them
were obliged to abandon their homes.

[Sidenote: Dissensions in States.]

The finances of the States were as much disturbed as those of the Union.
Their paper-money issues shared the same fate. Their debts, funded and
unfunded, increased. They were harassed by internal divisions, even among
the patriots. In Massachusetts, Berkshire County remained until 1780
practically independent, and the county convention did not scruple to
declare to the General Court that there were "other States which will, we
doubt not, as bad as we are, gladly receive us."

45. FORMATION OF A CONSTITUTION (1776-1781).

[Sidenote: Preliminaries of a constitution.]
[Sidenote: Articles submitted.]

One cause of the weakness of Congress and the disorders in the States was
the want of a settled national government. The Continental Congress
understood that it was but a makeshift, and on the day when a committee
was formed to frame a Declaration of Independence, another committee was
appointed to draw up Articles of Confederation. It reported July 12, 1776;
but the moment discussion began, it was seen that there were almost
insuperable difficulties. The first was the question whether each State
should have one vote, as in the existing government, or whether each
should cast a number of votes in proportion to its population; the second
question was how revenue should be raised and assessed; the third was how
the western country should be held; the fourth was what powers should be
given to the general government, and what retained by the States; the
fifth, how disputes within the Union should be settled. When, on Nov. 15,
1777, Congress had finally adopted a draft of Articles of Confederation,
the decline of its power and influence was reflected in the proposed
instrument of government. On the question of representation, the rule of
vote by States was continued. The only taxation was a formal system of
requisitions on the States. Here the question of slavery was unexpectedly
brought in: the Northern States desired to apportion the taxes according
to total population, including slaves. "Our slaves are our property" said
Lynch, of South Carolina; "If that is debated, there is an end of the
Confederation. Being our property, why should they be taxed more than
sheep?" A compromise was reached, by which requisitions were to be
assessed in proportion to the value of lands in the several States. The
question of control of territory was not distinctly settled by the
articles. The powers to be conferred upon the Confederation were
practically limited to war, peace, and foreign affairs. A cumbrous system
of arbitration courts was established for disputes between States, but
there was no machinery for settling quarrels between States and the
national government.

[Sidenote: The Western lands.]
[Sidenote: Maryland will not ratify.]
[Sidenote: Articles in force.]

Congress had spent a year and a half in forming the Articles of
Confederation. The States took three and a half years in ratifying them.
Ten States early signified their willingness to adopt them. Three others
stood out because the Western lands were left in dispute. In 1776 when the
British authority had been declared no longer existent in the colonies,
each of the new States considered itself possessed of all the British
lands which at any time had been included within its boundary; and in 1778
Virginia had captured the few British posts northwest of the Ohio, and had
shortly after created that immense region, now the seat of five powerful
States, into the "County of Illinois." On the other hand, it was strongly
urged that the Western territory had been secured through a war undertaken
by all the colonies for the whole country, and that the lands ought to be
reserved to reward the continental soldiers, and to secure the debt of the
United States. For the sake of union, two of the three dissatisfied
commonwealths agreed to the Articles of Confederation. One State alone
stood firm: Maryland, whose boundaries could not be so construed as to
include any part of the lands, refused to ratify unless the claims of
Virginia were disallowed; Virginia and Connecticut proposed to close the
Union without Maryland; Virginia even opened a land office for the sale of
a part of the territory in dispute; but threats had no effect. New York,
which had less to gain from the Western territory than the other
claimants, now came forward with the cession of her claims to the United
States; and Virginia, on Jan. 2, 1781, agreed to do the like. On March 1,
1781, it was announced that Maryland had ratified the Articles of
Confederation, and they were duly put into force. From that date the
Congress, though little changed in personnel or in powers, was acting
under a written constitution, and the States had bound themselves to abide
by it.

46. PEACE NEGOTIATED (1779-1782).

[Sidenote: Instructions of 1779.]
[Sidenote: Instructions of 1781.]

Thus the settlement of the final terms of peace fell to the new
government, but rather as a heritage than as a new task. Instructions
issued by Congress in 1779 had insisted, as a first essential, on an
acknowledgment by Great Britain of the independence of the United States.
Next, adequate boundaries were to be provided; the United States must
extend as far west as the Mississippi, as far south as the thirty-first
parallel, and as far north as Lake Nipissing. The third desideratum was
undisturbed fishery rights on the banks of Newfoundland. Finally, it was
expected that a treaty of commerce would be yielded by Great Britain after
the peace was made. In 1781 Virginia, alarmed by Cornwallis's invasion,
succeeded in carrying a very different set of instructions. The only
essential was to be the substantial admission that America was
independent; in all else the treaty was to be made in a manner
satisfactory to the French minister of foreign affairs.

[Sidenote: The king consents to peace.]
[Sidenote: Independence.]
[Sidenote: Boundary.]
[Sidenote: Instructions ignored.]

Before peace could be reached it was necessary to break down the iron
opposition of the king. On Feb. 28, 1781 Conway's motion, looking to the
cessation of the war, was adopted by Parliament. "The fatal day has come,"
said the king. It was not merely his American policy which had failed; the
party of the "King's Friends" was beaten; North resigned; and after twelve
years of strenuous opposition, the king was obliged to accept a Whig
ministry, which he detested, and to let it negotiate for peace. A part of
the ministry still cherished the delusion that the Americans would accept
terms which did not leave them independent. The firmness of the American
envoys was effectual; a royal commission was at last addressed to Oswald,
authorizing him to treat with "the commissioners of the United States of
America" in Paris. Then came the important question of boundary. Without
the thirteen colonies the possession of the Floridas was of little value
to England, and they had been reduced by a Spanish expedition in 1781;
they were therefore returned to Spain. For a long time the English
insisted that a neutral belt of Indian territory should be created west of
the mountains. That point was finally waived; the Americans withdrew their
pretensions to the territory north of Lake Erie; and the St. Lawrence
River system, from the western end of Lake Superior to the forty-fifth
parallel, was made the boundary. From the forty-fifth parallel to the sea,
the boundary was described as following the "highlands which divide those
rivers that empty themselves into the St. Lawrence from those which fall
into the Atlantic Ocean." The country was little known; the commissioners
were probably confused; and the ground was thus prepared for a dispute
which lasted fifty-nine years. In the course of the negotiations the
American ambassadors, Jay, Adams, Franklin, and Laurens, became suspicious
of the French court. There is now some reason for believing that
Vergennes, the French minister, had dealt honorably with the American
interests, and could have secured excellent terms. "Would you break your
instructions?" asked one of the fellow-commissioners of Jay. "I would," he
replied, "as I would break this pipe." Thenceforward the Americans dealt
directly and solely with the English envoys.

[Sidenote: The Mississippi.]
[Sidenote: The fisheries.]

The next question to be settled was the claim of the English to the
navigation of the Mississippi, which was supposed to reach northward into
British territory. It was yielded; the Americans, however, received no
corresponding right of navigation through Spanish territory to the sea.
Next came the fisheries. As colonists the New Englanders had always
enjoyed the right to fish upon the Newfoundland banks, and to land at
convenient spots to cure their fish. Adams, representing New England,
insisted that "the right of fishing" should be distinctly stated; he
carried his point.

[Sidenote: Loyalists.]
[Sidenote: Debts.]
[Sidenote: Slaves.]
[Sidenote: Treaty signed.]

The main difficulties disposed of, three troublesome minor points had to
be adjusted. The first was the question of loyalists. They had suffered
from their attachment to the British government; they had been exiled;
their estates had been confiscated, their names made a by-word. The
British government first insisted, and then pleaded, that the treaty
should protect these persons if they chose to return to their former
homes. The Americans would agree only that Congress should "earnestly
recommend" to the thirteen legislatures to pass Relief Acts. Then came the
question of private debts due to the British merchants at the outbreak of
the Revolution, and still unpaid. Some of the American envoys objected to
reviving these obligations; but Adams, when he arrived, set the matter at
rest by declaring that he had "no notion of cheating anybody." Finally
came the question of the treatment of the slaves who had taken refuge with
the British armies; and the English commissioners agreed that the British
troops should withdraw "without causing any destruction or the carrying
away any negroes or other property of the American inhabitants." On Nov.
30, 1782, a provisional treaty was signed; but it was not until Sept. 3,
1783 after the peace between France and England had been adjusted, that
the definitive treaty was signed, in precisely the same terms.

With great difficulty a quorum was assembled, and on Jan. 14, 1784, it was
duly ratified by Congress. The treaty was a triumph for American
diplomacy. "It is impossible," says Lecky, the ablest historian of this
period, "not to be struck with the skill, hardihood, and good fortune that
marked the American negotiations. Everything the United States could with
any show of plausibility demand from England, they obtained."

47. POLITICAL EFFECTS OF THE WAR.

[Sidenote: American union.]

Thus in seven years America had advanced from the condition of a body of
subordinate colonies to that of a nation. Furthermore, the people, who at
the beginning of the struggle were scattered and separated, and who
scarcely knew each other, were now united under a government; the
Confederation, however weak, was the strongest federation then in
existence. The people had learned the lesson of acting together in a great
national crisis, and of accepting the limitations upon their governments
made necessary by the central power.

[Sidenote: Union not perfected.]

The spirit of the new nation was now to be subjected to a test more severe
than that of the Revolution. Danger banded the colonies together during
the war. Would they remain together during peace? Sectional jealousies had
broken out in Congress and in camp; and in the crisis of 1777 an effort
had been made to displace Washington. There had been repeated instances of
treachery among military officers and among foreign envoys. The States
were undoubtedly much nearer together than the colonies had been; they had
accepted a degree of control from the general government which they had
refused from England; but they were not used to accept the resolutions of
Congress as self-operative. Their conception of national government was
still that national legislation filtrated from Congress to the State
legislatures, and through that medium to the people.

[Sidenote: Frontier difficulties.]

The interior of the country was in a confused and alarming state. The
territorial settlement with the States had only begun, and was to be the
work of years. The Indians were a stumbling-block which must be removed
from the path of the settlers. Within the States there were poverty,
taxation, and disorder, and a serious discontent.

[Sidenote: Common institutions.]

Nevertheless, the system of the colonies was a system of union. The State
governments all rested on the same basis of revolution and defiance of
former established law; but when they separated from England they
preserved those notions of English private and public law which had
distinguished the colonies. The laws and the governments of the States
were everywhere similar. The States were one in language, in religion, in
traditions, in the memories of a common struggle, and in political and
economic interests.

[Sidenote: Trade hampered.]

Commercially, however, the situation of the country was worse than it had
been in three quarters of a century. Though the fisheries had been saved
by the efforts of Adams, the market for the surplus fish was taken away.
As colonies they had enjoyed the right to trade with other British
colonies; as an independent nation they had only those rights which
England chose to give. For a time the ministry seemed disposed to make a
favorable commercial treaty; but in 1783 an Order in Council was issued
cutting off the Americans from the West Indian trade; and it was not until
1818 that they recovered it.

[Sidenote: Republican government encouraged.] A great political principle
had been strengthened by the success of the Revolution: republican
government had been revived in a fashion unknown since ancient times. The
territory claimed by Virginia was larger than the island of Great Britain.
The federal republic included an area nearly four times as large as that
of France. In 1782 Frederick of Prussia told the English ambassador that
the United States could not endure, "since a republican government had
never been known to exist for any length of time where the territory was
not limited and concentred." The problem was a new one; but in communities
without a titled aristocracy, which had set themselves against the power
of a monarch, and which had long been accustomed to self-government, the
problem was successfully worked out. The suffrage was still limited to the
holders of land; but the spirit of the Revolution looked towards
abolishing all legal distinctions between man and man; and the foundation
of later democracy, with its universal suffrage, was thus already laid.

[Sidenote: Influence of rights of man.]

The influence of the republican spirit upon the rest of the world was not
yet discerned; but the United States had established for themselves two
principles which seriously affected other nations. If English colonies
could by revolution relieve themselves from the colonial system of
England, the French and Spanish colonies might follow that example; and
forty years later not one of the Spanish continental colonies acknowledged
the authority of the home government. The other principle was that of the
rights of man. The Declaration of Independence contained a list of rights
such as were familiar to the colonists of England, but were only theories
elsewhere. The success of the Revolution was, therefore, a shock to the
system of privilege and of class exemptions from the common burdens, which
had lasted since feudal times. The French Revolution of 1789 was an
attempt to apply upon alien ground the principles of the American
Revolution.

CHAPTER V.

THE CONFEDERATION (1781-1788)

48. REFERENCES

BIBLIOGRAPHIES.--Justin Winsor, _Narrative and Critical History_, VI.
745, VII. 199-236, 527-543, VIII. 491;, notes to Curtis, Bancroft,
McMaster, and Pitkin; W. F. Foster, _References to the Constitution_,
12-14; J. J. Lalor, _Cyclopedia_, I. 577; Channing and Hart, _Guide_, secs.
142, 149-153.

HISTORICAL MAPS.--Nos. 1, 3, this volume ( _Epoch Maps_, Nos. 6, 7);
Labberton, _Atlas_, lxvi.; Rhode, _Atlas_, No. xxviii.; Johnston, _History
of the United States for Schools_, 133; Gordon _American Revolution_, I.
frontispiece; B. A. Hinsdale, _Old Northwest_, I. 188, 201 (reprinted from
MacCoun's _Historical Geography_), also I. frontispiece, and II. 393;
Justin Winsor, _Narrative and Critical History_, VII. 140; school
histories of Channing, Johnston, Scudder Thomas.

GENERAL ACCOUNTS.--Joseph Story, _Commentaries_, secs. 218-271; R. Hildreth,
_United States_, III, 374-481; T. Pitkin, II. 9-36, 154-218; H. Von Hoist,
_United States_, I. 1-46; Geo. Tucker, _United States_, I. 291-347; Justin
Winsor, _Narrative and Critical History_, VII. ch. iii.; J. T. Morse,
_Franklin_, 216-420; Abiel Holmes, _Annals of America_, II. 353-371; J.
Schouler, _United States_, I. 1-30; Bryant and Gay, _Popular History_, IV.
79-99; F. A. Walker _Making of a Nation_, ch. 1; Edward Channing, _United
States 1761-1865_. ch. iv.

SPECIAL HISTORIES.--G. T. Curtis _Constitutional History_, chs. v.-xiv.
(_History of the Constitution_ I. 214-347); George Bancroft, _United
States_ (last revision), VI. 5-194, _History of the Constitution_, I. 1-
266; John Fiske, _Critical Period_, 1-186; J. B. McMaster, _United
States_, I. 103-416; J. F. Jameson _Essays on the Constitution_; T.
Pitkin, _United States_, I. 283-422, II. 223; William B. Weeden, _New
England_, II. chs. xxii., xxiii.; W. G. Sumner, _Financier and Finances_,
II. chs. xvi.-xxvii.; B. A. Hinsdale, _Old Northwest_, chs. ix.-xvi.; H.
B. Adams, _Maryland's Influence_; W. Hill, _First Stages of the Tariff
Policy_; S. Sato, _Public Land Question_; Theodore Roosevelt. _Winning of
the West_, III.

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