CHAPTER XLVI. COST OF THE WAR. FEDERAL AND STATE DEBTS. WEST- NAV TIONS. DIPLOMATIC AFFAIRS. INDIAN TREATIES. States had not been CHAPTER XLVI. THE HE independence of the United achieved except at very heavy cost. manifold calamities of the war towns burned, the coun- 1784. try ravaged, the frontiers attacked by the Indians, property plundered by the enemy or impressed for the public service, citizens called out to serve in the militia or drafted into the regular army, nakedness, disease, and sometimes hunger in the camp, the miseries of the hospitals, the horrors of the British prison ships-worse than all, the remorseless fury and rancorous vindictiveness of civil hatred; besides all this, the mere pecuniary cost of the war had imposed a very heavy burden, amounting to not much less than a hundred and seventy millions of dollars—a greater outlay, in proportion to the wealth of the country, than ten times as much would be at the present moment. Of this sum two thirds had been expended by Congress, and the balance by the individual states. It had been raised in four ways: by taxes under the disguise of a depreciating currency; by taxes directly imposed; by borrowing; and by running in debt. CHAPTER Of the two hundred millions issued by Congress in Continental bills of credit, eighty-eight millions, received 1784. into the state treasuries in payment of taxes at the rate of forty for one, had been replaced by bills of the "new tenor," to the amount of four millions four hundred thousand dollars, bearing interest at six per cent. Massachusetts, New Hampshire, and Rhode Island had thus taken up and redeemed their entire quota of the old paper. Connecticut, Delaware, the Carolinas, and Georgia had taken up none; the remaining states had taken up and replaced but a part of their quota. As to the outstanding hundred and twelve millions, there was no thought of redeeming or funding that at any higher rate than seventy-five or a hundred for one. Many of these bills were in the state treasuries, into which they had come in payment of taxes; but a large amount remained also in the hands of individuals. The depreciation and subsequent repudiation of this paper had imposed a tax upon the country to the amount of perhaps seventy millions of specie dollars-a tax very unequal and unfair in its distribution, falling heaviest on the ignorant and helpless; the source in private business of numberless frauds, sanctioned, in fact, by the laws of the states, which had continued to make the bills a legal tender after they had fallen to a tenth, a twentieth, and even a fortieth part of their nominal value. But in what other way could Congress have realized any thing like the same sum of money? How else could the war have been carried on at all? Besides the Continental paper issued by Congress, all the states had put out bills of their own. In some states, ́as Massachusetts and Pennsylvania, these bills had been called in and funded at their nominal value. In others, especially at the South, they had been partially redeemed XLVI. by the issue of land warrants. The remainder had shared CHAPTER the fate of the Continental money, being either suffered to fall dead in the hands of the holders, or being funded 1784. at an immense depreciation. No state had made such profuse issues as Virginia, and such of her bills as were not paid in for land warrants were finally funded at the rate of a thousand for one. Besides the taxes thus indirectly imposed, very heavy direct taxes had been levied, especially toward the conclusion of the war. The amount raised by the states, whether through the medium of repudiated paper or taxes, it is impossible to ascertain with precision, but it probably did not exceed thirty millions of dollars. The remaining seventy millions of the expenses of the war still hung over the confederacy in the shape of debt. Congress had begun to borrow while the issue of paper was still going on; and after that issue stopped, to borrow and to run in debt became the chief federal resources. A federal debt had been thus contracted to the amount of some forty-four millions of dollars, of which about ten millions were due in Europe, principally to the French court. Franklin had signed contracts for the repayment of moneys advanced by France to the amount of thirty-four million livres, about seven million dollars. All the back interest was remitted; the reimbursement of the principal was to be made by installments, to commence three years after peace. To this sum was to be added the small loan from Spain, the larger one from the French farmersgeneral, and so much of the Dutch loan as Adams had succeeded in getting subscribed. It was the produce of the subscription to this loan, amounting to about $700,000, which formed the resource of Morris for meeting the treasury notes in which the three months' pay had been advanced to the furloughed soldiers. That fund, however, XLVI. CHAPTER Was soon exhausted, and a considerable number of the bills drawn upon it were likely to come back protested; but, by 1784. paying an enormous premium, Adams succeeded in borrowing an additional amount of about $800,000, out of which the bills of Morris were met. The loan in Holland, formerly yielded to the solicitations of Laurens, formed a part of the French debt. It had been lent, in fact, to France for the benefit of the United States. The federal debt, besides this amount due abroad, included eleven millions and a half, specie value, borrowed on loanoffice certificates at home; six millions due to the army for deficiencies and depreciation of pay; five millions due to the officers for the commutation of their half pay for life; and about twelve millions more on unliquidated accounts, including, also, arrears of interest on the loan-office debt, of which but little had been paid since 1781, at which period the French government had refused to advance any more money for that purpose. These unliquidated accounts included, also, certificates for supplies impressed for the army, and a mass of unsettled claims in the old currency, in all the departments, civil and military, which the officers appointed for that purpose were busy in reducing to specie value. Besides this federal debt, each state was burdened with a particular debt of its own; the whole together amounting to some twentyfive or six millions of dollars, thus raising the total indebtedness of the country, state and federal, to the beforementioned sum of seventy millions. The arrangements. for the payment of the interest on this debt were very imperfect, depending, so far as the federal debt was concerned, upon requisitions on the states-requisitions, as we have seen, but very partially met. ་ For some months after the disbandment of the army, Congress was very thinly attended. The first business JEFFERSON'S REPORT ON WESTERN TERRITORY. 449 XLVL of importance, after a quorum of nine states had been ob- CHAPTER tained, was the acceptance of the cession of Virginia of her claims to lands northwest of the Ohio, which cession 1784. she had modified by the omission of that guarantee of her March. remaining territory heretofore demanded. Besides a lib eral reservation of bounty lands for her revolutionary soldiers, and those employed under George Rogers Clarke in the conquest of Kaskaskia and Vincennes, Virginia stipulated in her act of cession indemnity for the expenses of that expedition; the security of the French inhabitants of those settlements; and that the ceded lands should be erected into republican states, each not less than ten thousand, nor more than twenty-two thousand five hundred square miles in extent, to be admitted into the Union with the same rights of sovereignty and independence with the older states. Simultaneously with this acceptance, Jefferson, who now again sat in Congress as a delegate from Virginia, as chairman of a committee, of which Chase of Maryland and Howell of Rhode Island were members, submitted a plan for the government of the western territory; not that only northwest of the Ohio, but the entire western region from the thirty-first degree of north latitude to the northern boundary of the United States, all of which it was expected to acquire by cessions from the states claiming it. This plan proposed to divide the territory into seventeen states: eight between the Mississippi and a north and south line through the falls of the Ohio, each to contain two parallels of latitude, except the northernmost, which was to extend from the forty-fifth parallel to the northern boundary; eight more between this line and another parallel to it, drawn through the mouth of the Great Kenhawa, to be laid out in plots corresponding to the first eight; the remaining tract west III.-F F |