Silas Deane to the Secret Committee



Paris, 1st December, 1776.

GENTLEMEN: Among the many important objects which employ your whole attention, I presume ways and means for defraying the expense of the present war, has a capital place; you will therefore give the following thoughts the weight which they deserve: In the first place, to emit more bills will be rather dangerous, for money, or whatever passes for such, when it exceeds the amount of the commerce of a State, must lose its value, and the present circumscribed state of the American commerce, is perhaps within the amount of your emissions already made. Your bills, therefore, must be borrowed of individuals by the publick at interest, or those already emitted paid off by taxes, and new emissions made. Some Colonies, I am sensible, may now be content with a tax, but it is most probably quite out of the power of some, and a measure rather impolitick in a majority of the Colonies or States durante bello. To effect any considerable loan in Europe is perhaps difficult; it has not been tried; and on the probability of succeeding in this, I will give my sentiments hereafter; this is obvious, that let the loan be made when it will, it must have a day fixed for payment, and respect to some fund appropriated to that purpose.

The relying on future taxes is holding up to the people a succession of distresses and burthens, which are not to cease even with the war itself. Whereas, could they have a prospect of paying the expenses of the war at the close of it, and enjoying the remainder of their fortunes clear of incumbrance, it must greatly encourage and animate both the publick and private in pushing it on with vigour. Loan of six or eight millions, or a debt of that amount, will probably enable you to finish the war. This I am confident may be


negotiated on terms which I will propose hereafter; but previously let it be attended to, that the present contest has engaged the attention of all Europe; more, it will eventually interest all Europe in favour of the United States — the Russians in the north and Portugal in the south excepted. I make no consideration of the little mercenary Electorates in my calculation. The mercantile part of the other Powers are convinced where their interest appears so evidently engaged. The political part are sensible of the importance of enlarging their own naval concerns and force, and checking that of Great Britain.

The good and wise part, the lovers of liberty and human happiness, look forward to the establishment of American freedom and independence as an event which will secure to them and their descendants an asylum from the effects and violence of despotick power, daily gaining ground in every part of Europe. From these, and other considerations, on which I need not be minute, emigrations from Europe will be prodigious immediately on the establishment of American independency. The consequence of this must be the rise of the lands already settled, and a demand for new or uncultivated; on this demand I conceive a certain fund may now be fixed. You may smile, and recollect the sale of the bearskin in the fable, but at the same time must be sensible that your wants are real; and if others can be induced to relieve them, it is indifferent to you whether they have a consideration in hand or in prospect.

I trace the river Ohio from its junction to its head; thence north to Lake Erie, on the south and west of that lake to Fort Detroit, which is in the latitude of Boston; thence a west course to the Mississippi, and return to the place of my departure. These three lines, of near one thousand miles each, include an immense territory, in a fine climate, well watered, and by accounts exceeding fertile; it is not inhabited by any Europeans of consequence, and the tribes


of Indians are inconsiderable, and will decrease faster than the lands can possibly be called for, for cultivation. To this Task your attention, as a resource amply adequate, under proper regulations, for defraying the whole expense of the war, and the sums necessary to be given the Indians in purchase of the native right. But to give this land value, inhabitants are necessary. I therefore propose, in the first place, that a grant be made of a tract of land at the mouth of the Ohio, between that and the Mississippi, equal to two hundred miles square, to a company formed indiscriminately of Europeans and Americans, which company should form a distinct State, confederated with and under the general regulations of the United States General of America. That the Congress of the United States shall out of such grant reserve the defraying or discharging the publick debts or expenses, one-fifth part of all the lands, mines, &c˙, within said tract, to be disposed of by the Congress in such manner as good policy and the publick exigencies may dictate; the said one-fifth to be sequestered out of every grant or settlement made by the company, of equal goodness with the rest of such grant or settlement; the company on their part shall engage to have in seven years after the passing such grant thousand families settled on said grant, and civil government regulated and supported on the most free and liberal principles, taking therein the advice of the honourable Congress of the United States of North-America. They shall also, from and after their having one thousand families as above said, contribute their proportion of the publick expenses of the continent, or United States, according to the number of their inhabitants, and shall be entitled to a voice in Congress as soon as they are called on thus to contribute. The company shall at all times have the preference of purchasing the Continental or common interest thus reserved, when it shall be offered to sale. The company shall consist, on giving the patent or grant, of at least one hundred persons.

These are the outlines of a proposed grant, which you see contains more than twenty-five millions acres of land, the one-fifth of which, if a settlement is carried on vigorously, will soon be of most prodigious value. At this time a company might be formed in France, Germany, &c˙, who would form, a stock of one hundred thousand pounds sterling, to defray the expense of this settlement. By such a step you in the first place extend the circle of your connection and influence, you increase the number of your inhabitants, proportionably lessen the common expense, and have in the reserve a fund for publick exigencies. Further, as this company would be in a great degree commercial, the establishing commerce at the junction of these large rivers would immediately give a value to all the lands situated on or near them, within the above extensive description; and further grants might admit of larger reserves, amply sufficient for defraying the expenses of the war, and possibly for establishing funds for other important purposes.

It may be objected, this is not a favourable time for such a measure. I reply, it is the most favourable that can happen. You want money, and by holding up thus early to view a certain fund, on which to raise it, even the most certain in the world, that of land security, you may obtain the loan and engage the moneyed interest of Europe in your favour. I have spoke with many persons of good sense on this subject, which makes me the more sanguine.

As to a loan, I will now dismiss this scheme, to speak of that; only adding, or rather repeating, what I have in a former letter wrote, that a large and generous allowance ought immediately be made for the officers and soldiers serving in the present war, in which regard should be had to the wounded, the widow, or children, of those who fall, and to the term or number of campaigns each one serves. This will make the Army consist literally of a set of men fighting for freehold; and it will be a great encouragement to foreigners, with whom five hundred or a thousand acres of land has a great sound.

It has been a question with me at times, whether, if our commerce were open and protected, the Colonies would be wise in negotiating a loan. But on considering that before this war the importation of the Colonies just about balanced their exportations, I cannot think it possible with the most rigid economy, supposing exports as large as formerly, to make a lessening of consumption equal to the amount of the


expenses of the war, and that consequently a debt must be contracted by the publick somewhere.

The question which naturally rises on this is, whether it be most prudent to contract this debt at home or abroad? To me it admits of no doubt, that the latter is to be preferred on every account. If you can establish a credit and pay your interest punctually, the rate of interest will be less by two or three per cent˙ in Europe than in America. You will thereby engage foreigners by the surest tie, that of their immediate interest, to support your cause, with many other obvious reasons for preferring the latter mode.

But the next question is, where can you borrow and what security can you offer? Holland is at present the centre of money and credit for Europe, and every nation is more or less indebted to them, collectively, to such an amount that could the nations in Europe at once pay the whole of their debts to this Republick of Mammon, it would as effectually ruin it as the breaking in of the sea through their dykes. Would you know the credit and situation of the affairs of the different kingdoms, consult the books of the Dutch banks. This kingdom has been in bad credit from the villainy of a late Comptroller-General, as it is said, one Abbé Terrai, against whose administration the severest things have been said and wrote. He was succeeded by the much esteemed Mons˙ Turgot, and stocks rose and a commission given a banker (a correspondent of mine in Amsterdam) to negotiate a loan; but the dismission of Mons˙ Turgot, and the indifferent opinion moneyed men at least had of his successor, Mons˙ Clugny, prevented the loan and fell the stocks. Mons˙ Clugny died last week, and is succeeded ostensibly by one Mons˙ Tabouron; I say ostensibly, for one Mr˙ Necker, a noted Protestant banker, is joined with him as Intendant of the Treasury. This raised stocks immediately; and I am told they have already risen ten per cent. This is the most politick appointment that could have been made; and it deserves our notice, that where a man has it in his power to be of publick service, his principles of religion are not a sufficient obstacle to hinder his promotion even in France. This will probably enable this kingdom to borrow money, which, from all appearances, will soon be wanted.

Spain, from the punctuality of its payments of interest and its well-known treasures, is in high credit in Holland. Denmark borrows at four per cent˙; Sweden at the same; the Emperor of Germany, from the security of his hereditary dominions, and the Empress of Russia, from her having lately paid part of the large sum she borrowed in the Turkish wars, are both of them in good credit. The credit of Great Britain, though it has not fell, yet it is in a ticklish situation, with these foreseeing people; who, on receiving the news of the action on Long-Island, which raised stocks a trifle in England, began immediately to sell out. Not a Power in Europe, the King of Prussia excepted, can go to war without borrowing money of Holland to a greater or less amount; and whilst so many borrowers are in its neighbourhood, whose estates, as I may say, are settled and known, it is not to be expected Holland will be fond of lending money to the United States of North-America, though we should offer an higher interest.

To offer a large interest might be tempting, but it would be very ruinous to us; and I conceive it will never be thought prudent to permit higher than five per cent, interest in the States of North-America, and this is but one percent, more than is given in Europe. This view leads me again to reflect, as I constantly do, with the utmost grief on the unaccountable delay of proper authority announcing the independency of the United States of North-America, and proposing terms of alliance and friendship with France and Spain. This, I am as confident as I can be of any thing not already effected, would at once remove this and many other difficulties; would put our affairs on the most established and respectable footing, and oblige Great Britain herself to acknowledge our independency and court our friendship, or hazard the chance of ceasing to be a nation. On such powers being received and presented, these kingdoms, I have no doubt, would become our guaranty for the money we want, and the produce of our country will be wanted for the interest, and even the principal, fast as we can transport it hither. But as no such powers and instructions are received, it is possible you mean not to send any.

I will mention a few thoughts on another plan. You are


not in want of money, but the effects of money, in the manufactures of Europe. Of these the Colonies, or United States, must now have a demand for some millions sterling. These manufactures are to be had principally in France and Holland. As to the latter, they have not at present, and are resolved never to have, any peculiar connection with, or friendship for, any Power further than their commerce is served by it; but that is not the ruling passion of the former, but the desire of humbling their old rival and hereditary enemy, and aggrandizing their monarchy, are predominant; and never was there a more favourable opportunity than the present. So favourable is it, that were the funds of this kingdom in a little better situation, and were they confident the United States of America would abide by their independency, not a moment' s time would be lost in declaring, even though you had made no application direct, whatever part this kingdom takes will be pursued by the Court of Madrid. Would this Court give a credit even to private merchants, it would answer the same purpose as a loan, as for instance, the United States want about three million value of manufactures annually (it has heretofore been rising of that) from Europe; if this Court will give a credit to that amount to any body of men in the kingdom, that company may engage to pay the Court the same amount in Continental bills within a limited time, this company may send to America supplies to that amount, as the Congress shall order such goods as are wanted, either for Army or Navy. The Congress will instantly deposit their bills for the amount, the residue may be sold at a stated advance for Continental bills, the whole of the amount immediately put on interest to this Court; this will be the calling in of such an amount of the bills, and of course give the greater currency to the whole; mean time this Court must become interested to have the commerce free, by which alone remittances can be made. This is but a sudden thought, recommended to you for digesting, if deemed worthy of pursuing. That something this way may be effected, I can have no doubt, while I have this most unequivocal evidence: I am now credited to the amount of all the supplies for thirty thousand men, a train of artillery amounting to more than two hundred pieces of brass cannon, ammunition, &c˙, &c˙, which must be of near half a million sterling, not ostensibly by the Court, but by a private company; at the same time other companies, as well as individuals, after offering any loan or credit I should ask, always brought in sooner or later the condition of having my bills endorsed by some banker or person of credit, where you are sensible, in my situation, the affair ended, though in several instances I had the most flattering encouragement, and expected most assuredly no security would be required: but that this particular house should be able and willing to advance this prodigious sum at once, and without security, is no way surprising, but perfectly consistent with what I have all along asserted.

The most effectual card now played by the British Ambassador is, asserting that an accommodation will soon take place, and by some means or other conjecturing my want of powers by my not publickly appearing at Court. He is bold in this assertion, and I find it the greatest difficulty I have to encounter. But I will not enter on a subject which has well-nigh distracted me, and embarrassed and disheartened, in a greater or less degree, every friend of America. The late conduct of the Court of Spain respecting Captain Lee, whose case I mentioned before, is a striking proof of what I have so positively asserted of the good disposition of both these Courts. They dismissed the complaint against him, afforded him protection, with assurances of every assistance he might need, declaring publickly that their ports were equally free for Americans as for Britons. I have besides these overt acts, still more convincing proofs that the moment your application is made, every thing will be set in proper motion.

I now dismiss a subject which has given, and still continues to give me as much anxiety as I can struggle with, and mention another a little new, but indeed somewhat connected with it: it is the equipping of a number of American ships of war in the ports of France. Considering the price of duck, cordage, ordnance, and other military stores in America, they may be built much cheaper here. This is not the sole advantage. They may carry over stores of every kind in safety, as being French bottoms,


ostensibly at least. All the brave and ingenious in the marine department in this kingdom would become adventurers in person or in purse and influence in such a scheme; and I speak on good grounds when I say, in three months after receiving your orders, I can have ten ships of at least thirty-six guns each, at your service, independent of assistance immediately from Government, so much attention is paid to the American cause by all persons of consequence in this kingdom.

The honourable Congress must, I conceive, either continue emitting bills or borrow money; and I submit it whether it be not preferable to borrow of foreign States than of individuals, in the present situation of American affairs. If of foreigners, I am convinced you may borrow five or six millions of Holland, on France becoming your security. This I am confident may be obtained on application to this Court and Spain; and that on these principles, they can by no means be willing to permit the Colonies to return to their former subjection to Great Britain, armed as both countries are. Their possessions in America must lie at the mercy of Great Britain on such an event as a reconciliation with the Colonies. The Colonies being in want of the manufactures of Europe, of this kingdom in particular, this sum would, a principal part of it, rest in France, and give a great spring to their manufactures, and give them the advantage of the first lead in American commerce. These are important objects, and I have no doubt would be considered of consequence sufficient for them to risk such a credit. Rich individuals offer to supply any quantity of goods or stores on such security, and I believe the latter would do considerable, were they only assured of five per cent, interest on their debts after due.

But I submit the whole to the mature consideration of the honourable Congress; and am, &c˙,