LETTER I.

IN every part of these states the great scarcity of money is become a common subject of complaint. This does not seem to be an imaginary grievance, like that of hard times, of which men have complained in all ages of the world; the misfortune is gene­ral, and in many cases it is severely felt. The scarcity of money is so great, or the difficulty of paying debts has been so common, that riots and combinations have been formed in many places, and the operations of civil government have been suspended: this is the more remarkable, because three years have not passed since money was very plenty. A calamity of such magnitude has deservedly drawn the attention of every legislature in the union. In some of the states paper money has been coined as the best or the most con­venient remedy by which the sufferings of the people can be relieved. The general assembly of the state of North-Carolina has already had recourse to two emissions of paper. Certainly when any article is scarce, the general remedy is, to make more; and if it shall be found, when money is scarce, that private and public debts can be honestly discharged by a new coinage of paper, the expedient is admirable, for it is the most easy process by which debts were ever paid. This however, is a subject on which many doubts have arisen. It is not questioned whether there are means by which we may be enabled to discharge our debts and become opulent and pow­erful, but there are many who believe that our debts cannot be fairly discharged, nor our citizens relieved, much less can they be­come rich by the manufacture of paper money. It has also been my lot to entertain some doubts, whether the regulations have hitherto been adopted for preserving justice, for relieving the op­pressed, and for securing the prosperity of the state;—these doubts have given rise to the present address.

[Page 2] This is a question, my fellow citizens, that claims your utmost attention [...] for no subject of equal importance has been presented to your view since the declaration of independence. We are go­ing to consider whether the administration of government, in these infant states, is to be a system of patch-work, and a series of ex­pedients—Whether a youthful empire is to be supported, like the walls of a tottering ancient palace by shores and temporary props, or by measures which may prove effectual and lasting—measures which may improve by use, and strengthen by age. We are go­ing to consider whether we shall deserve to be the most poor, disho­nest and contemptible, or the most flourishing, independent and happy nation on the face of the earth.

The reader is not interested in knowing who the writer of this letter may be; a bad argument is not mended by the supposed abilities of its author, and a good argument does not require paren­tal support. In the mean while he counts it his duty to declare, and he does it with humble gratitude, that his complaints are not occasioned by personal misfortunes; but he finds himself a mem­ber of a great family; he interests himself as a brother in the hap­piness of his fellow citizens, and he suffers when they are grieved.

The more I consider the progress of credit, and the increase of wealth in foreign nations, the more fully am I convinced that pa­per money must prove hurtful to this country; that we cannot be relieved from our debts except by promoting domestic manufac­tures, and that during the prevailing scarcity of money, the bur­dens of the poor may be relieved by altering the mode of taxation. Here are three separate and distinct propositions; they shall be considered apart, in order that each of them may fall or stand by its own weakness or strength.

In public measures as in the conduct of private life, it will con­stantly be found that "honesty is the best policy;" this maxim is somewhat old, but it is not become useless. A paper currency, which is a legal tender, even when it may have depreciated 20 or 30 per cent. is not generally considered as an honest tender, and there are many reasons for believing that such a currency will not finally prove useful to the states. I say it has not generally been considered an honest tender. There are many people who say the money ought not to have depreciated; they say that necessity jus­tified the manufacture, and that we are bound to receive such pay­ment as the law prescribes: but I never have heard any man say that it would be perfect justice to pass a law, by which every cre­ditor should be compelled to receive three fourths or two thirds of his debt instead of the whole debt; and yet such a law would be perfectly similar to the tender of depreciated paper, except that it would be a proof of more frugality and plain dealing; for it would [Page 3] he calling things by the right name, and would save the expence of paper coinage.

However convenient depreciated paper may appear to those who use it in the discharge of debts, we have already discovered that the credit and finances of This [...]ate [...] are injured by paper curren­cy, and we shall certainly continue to suffer, unless we can be re­lieved from it. There has ever been found much difficulty in shak­ing off the prejudices of education. We have been accustomed to the use of paper money while we continued a depending province; such a currency was properly calculated to prevent the growth of manufactures, and to continue our dependence and poverty. Surely under a change of circumstances there should be a change of mea­sures; we ought now to consult our own prosperity, and not the emolument of Great Britain, or any other kingdom. If we are willing to take a lesson from other governments, we shall find that money is not to be made out of paper, for there is not an empire, kingdom or state under the sun where debts may be legally dis­charged by paper money, except in some of the united states of America. It is admitted that a paper medium, under the form of bank notes or government securities, is circulated in France, Eng­land, Holland, and most other commercial countries; but nobody is compelled by law to receive the payment of any debt in such mo­ney; hence it is, that the paper of those countries bears no resem­blance to our's, except in name. Every man receives a bank note or refuses it at pleasure; when he receives it, he knows that on the next hour he may have it changed for gold or silver, as the bank is obliged to make such payments on demand. For this rea­son bank notes, being portable, are frequently preferred to coin of the weighty metals. But it never was found that bank notes could be circulated at par, unless when it was believed that they might be exchanged for solid money; nor could they be circulated, if they were declared to be a legal tender. The reason is obvi­ous—the whole value of paper is imaginary, and men do not be­lieve by compulsion. Every attempt to force a man to believe that paper is equal in value to silver, implies a consciousness that it is not equal. It injures what it was intended to save. Though the paper money which had been emitted in North Carolina in the year 1783, had depreciated 20 per cent. arguments were invented on the last [...] year for making more money. It was alledged that under the regal government a greater sum of money had been circulated without much depreciation, and consequently a second coinage might take place; it would not depreciate. This argument was plausible, but not solid; for the value of paper is never found to depend on the quantity in circulation, but on the security that appears for its re­demption. The bank of England, which belongs to a company [Page 4] of private subjects, circulates notes to the amount of thirty two millions of dollars, though it is not believed that they have above fourteen millions in specie at any time on hands; but every man can get money for his note when he demands it. In the year 1716, soon after the death of Lewis the XIVth, the celebrated John Law, in company with some other gentlemen, obtained a patent for a banking house at Paris. They issued notes in which they promised to pay the bearer, on sight, a certain sum, in gold and silver of the weight and fineness then established by law. As the late King had altered the weight or quality of the current coin ten times during his reign, and the same thing might be done again, Law's notes, which were not subject to depreciation, were preferred to specie at one per cent. Such were the effects of a general con­fidence in good payment. Within the space of four years, notes were issued by Law and company to the amount of 225 millions of dollars, which was near twice as much as all the specie in France; but the notes retained their credit, because the company were thought to be honest and able to pay. On the twenty first of May, 1721, the Duke of Orleans, regent of France, issued a pro­clamation, by which he reduced the value of bank notes to half the nominal sum. They were depreciated fifty per cent. This was a proof of the want of integrity, and it operated accordingly; it destroyed public confidence. It did not merely diminish the value of the notes,—it annihilated them, and on the 22d of May one guinea in gold could not have been purchased in Paris for one thousand guineas in notes. The history of paper money in all ages is uniform. It's value depends on the confidence of the public. Let government give a single proof that they ought not to be trusted—Confidence vanishes, and "like the baseless fabric of a vision, leaves not a trace behind." Let us compare this with the history of the paper in some of our states, and consider whether it ought to have retained its value. The first emission of the state of North-Carolina in 1783, was to have been redeemed by the sale of forfeited estates. That foundation was soon removed, and those estates were con­verted to another use. The money depreciated, and recourse was had to another coinage. This second structure was raised, if pos­sible, on a worse foundation, for it had not even the appearance of stability; taxes are laid for calling in the money, and it is imme­diately restored to circulation. Was it expected that such money should pass as gold or silver? No, certainly. The legislature them­selves do not seem to have expected that it should be considered of equal value. Tobacco, a staple of North-Carolina, has been purchased by the public for two prices in this new money, and cre­ditors at the same time are compelled to receive it as specie, in the payment of debts. Is this justice? Strangers will call it by a different name.

[Page 5] I have attempted to shew, according to the fate of paper in other countries, that it was not to have been expected that our money should pass as gold or silver. Every body knows that it is more or less depreciated in all the states who have emitted it. It is there­fore not a good payment, though it be a legal o [...], [...] endeavour to shew that it must finally prove hurtful to the states, and that it could not have brought us substantial [...], though the whole of it had passed as specie.

LETTER II.

IT is painful in all cases to animadvert on public measures, lest we should hurt the feelings of any citizen with whom such measures have originated. But truth is the friend of every man, and the author of every public measure, if he be a good man, treats it as other men do: he supports it while he be­lieves it to be good [...] he forsakes it whenever he finds it to be hurtful. For this reason I shall proceed freely in considering the effects of paper money. I have said that paper money, which is a legal tender, must prove hurtful to this country; when made, it must depreciate, and the effects of depreciation are un­friendly to industry, injurious to the poor, and destructive of good morals. On the supposition that the paper currency in some of the states has depreciated one third, it will follow that the differ­ent citizens to whom this money was first paid, in its depreciated state, must have lost 33⅓ per cent. on every payment; but as eve­ry bill of paper may have passed frequently from hand to hand, it will follow, that the several citizens of that state may have suffered the loss of ten times that sum by receiving bad money instead of solid coin to which they were entitled. This must have been a very considerable tax, and unfortunately it was a tax of the most per­nicious kind, for it was a tax on the frugal and temperate in favour of the idle, the profligate and luxurious. It cannot be right in government to protect and encourage vice; it is a plant that thrives sufficiently in every soil, without the help of legislative authority. In support of a measure that agrees so little with the common ideas of justice, we have been told, that money was wanted for the sake of the poor, that they might have a medium wherewith to pay their debts and taxes. Whoever has reflected [Page 6] on the circulation of paper money, will be apt to say, that the ho­nest poor man has not been the chief gainer by it. There is some difficulty in discovering how the poor man should be profited by a coinage of money. If he had been possessed of marketable pro­perty, before the money was made, he might have sold it for the full value; for there has been no season in which produce has not been sold for more than its worth; the exporters have been losers; if the poor man had no property for sale, neither could he have got any of the new money, unless it was to have been given away. There is doubtless some obscurity in this business, unless we alledge, that depreciation was intended, and this we are not willing to sus­pect. Let us suppose that the poor man may have gained a trifle by the depreciation of money; what is such a gain when compared with his sufferings by the loss of credit? No man can expect to bor­row money nor obtain goods on credit, when government does not support the creditor against dishonest payments by base money. When the rich are taught by government not to give credit, the suf­ferings of the poor must be increased, and when credit is destroyed, industry must languish; for they are constantly found to flourish in proportion to the honesty of government and the stability of the legal money. So lately as on the 43d year of Queen Elizabeth, the coin of England was debased almost nine per cent. by parlia­ment, and about that time the coin of France was frequently al­tered. The commerce of those nations suffered greatly by such instability. They have since profited by their good faith. There is no country in which the value of money has been so perfectly stable as in Holland for the last 200 years; and it is admitted that no country has prospered so much by commerce, nor any in which the interest of money is so moderate. Security of property has ever proved the spur to industry; hence we find that arts and commerce have flourished most in republican governments; for in absolute monarchies the value of money is not stable, and in despotic governments the case is worse▪ in such government we seldom find much industry. In republican governments he pro­perty of the citizen has generally been perfectly safe. To this we ascribe the progress of arts and commerce, and the consequent wealth of Athens, Carthage and Venice; of the Hans Towns and the United Netherlands. In those republics the governments have not been used to depreciate their coin; time will shew how the experiment succeeds with us. The chief advantage that appears to have arisen from depreciated money is, that fraudulent debtors have been enabled to discharge their contracts on easy terms. It is admitted that the debts of citizen to citi [...]en may be somewhat lessened by this species of payment, but the foreign debt is not diminished by such means; on the contrary, while we are using [Page 7] those desperate remedies against one another, our foreign [...] have been increasing every year. Most of our debts have been contracted since the spring of 1783; if our imports could be com­pared with our exports, the balance against us would be the amount of our debts; but it is difficult to determine what has been the amount of foreign goods imported into these states since the peace. Our public accounts cast but a faint light on this question. Gene­rally speaking, without a boat or searcher in any of our ports; the strictest attention not being paid to the revenue, people are invited to smuggle goods: detection is not apprehended, and time has nearly established the contempt of custom house oaths The amount of goods imported into Pennsylvania since the peace and consumed there, appears to exceed two millions of dollars a yea [...] ▪ In fixing its quote of the national debt, we find, that on the year 1783, Pennsylvania was supposed to contain 320,000 inhabitant [...], and North-Carolina to contain 170,000, which is more by [...] thousand than half the number contained in the larger state. [...] is true that negroes were taken into the estimation, but these ne­groes were reckoned as two whites. According to this estimation, we should suppose that the consumption of foreign goods in the state of North-Carolina has been equal to more than one million of dol­lars every year. It may be objected that winter is more sever [...] Pennsylvania than in North-Carolina, and that three negroes [...] not consume the same value of cloaths as two whites; this objecti­on is more than balanced by observing, that near two thirds of the citizens of Pennsylvania have originated in Germany, or the North of Ireland, and have imported such habits of industry and dexterity in the mechanic arts, that they make little use of foreign manufactures. Divide one million of dollars by 170,000 and [...] does not give quite six dollars for each person. Part of the inha­bitants, suppose one fourth part of them being slaves, and three slaves being counted as two whites, there will not be four dollar for each slave. We admit that the annual consumption of [...] slaves, in foreign goods, is below four dollars, even when rum [...] included, and some white inhabitants do not consume to the amount of six dollars; but there are many who consume ten times that quantity. This computation was made on the supposition that no goods have been smuggled in Pennsylvania, but some of the citizen [...] of that state have also calculated, that the account of perjury, like the tenor of their respective wills, is not to be examined till after death. They have conducted themselves accordingly. This in­ference is founded on a late association of merchants in Philadel­phia to prevent smuggling. We may fairly add 200,000 dollars for this account.

We shall now consider what have been the annual exports of [Page 8] North Carolina, in order to determine the amount of debts con­tracted since the peace. The produce exported from Currituck, Edenton, [...] Newbern and Wilmington, on the last year, [...] to be [...] too high ^* when stated at 506,700 dollars. [...] rolled into Virginia, and produce conveyed to South [...] may be stated at 400,000 dollars, and there will remain [...] of £.117,320 not accounted for. According to this [...] North Carolina has contracted a debt of 293,300 [...] to foreigners, or to people who live out of the [...] foreigners. No part of this debt has been dis­ [...] [...] of paper money, the whole advantage [...] being a mere juggle, by which one citizen is in­ [...] for the convenience of another. Their extravagance, there­ [...] is the sole [...] of this alarming scarcity of money; they [...] more than they pay for; and, until they become more [...] and more industrious, the grievance must encrease, not­withstanding their little attempts to elude the burden, by throw­ing it upon [...] another. If no debts were due in the state except [...] which are due to merchants, or the importers and retailers of goods, they would long since have discovered the true cause of the scarcity of money—the merchants books would have told the amount of their debts; but it is an unfortunate circumstance, that a small share of those may be directly due to the importers of [...] though the whole of them are occasioned by such impor­tations. In order to account for this, we are to consider, that merchants have a better opportunity than other people to receive the payment of debts, for, produce of all sorts will suit them in­stead of money.

Thus it may happen that A buys a horse from B, for which he is to pay 80 dollars as soon as he shall have sold his crop. B purchases cattle from C for 80 dollars, which he is to pay when he receives payment for his horse, and C employs D to repair his house, for which he is to pay him out of the price of his cattle. In the mean while A, tempted by the allurements of a neighbour­ing store [...] bays foreign goods, silks, gauzes, rum, and such other necessaries, for the use of his family, and he delivers the whole of his [...] payment, for be is allowed a generous price. Thence it must [...] that B, C, and D, and every other letter in the alphabet, are disappointed, each of them is in debt, and they all without [Page 9] complain of the scarcity of money, without perceiving that all those debts continue to be unpaid from the folly of A in buy­ing foreign goods, and yet the goods are paid for. Thus it is, that our citizens are universally involved, many of the debts are due to merchants, but a much greater amount is due to people who are not merchant [...] and we seem not to have discovered, that we are nearly ruined by foreign luxuries. Let any man cast his eye on this account, let him think of a state whose citizens are given up to indolence and vanity, who, in the space of three years, have plunged themselves in debt, at least three hundred thousand pounds. Let him observe how the property of our citizens is daily mortgaged to strangers and foreigners, and the inheritance of our children bartered away for fineries and fopperies. Let him observe the desperate alternative to which we are reduced, merely to obtain a transient relief. The dignity of government is wounded—base money is declared to be a legal tender—the diligent man is plundered for the benefit of the indolent and extravagant—industry languishes, for property is not safe—the orphan is de­frauded ^*, and the most atrocious frauds are practised under the sanction of law. Surely it is high time that other measures were adopted.

LETTER III.

IN all cases it is more easy to complain than to point out the me­ans of relief. It is also more easy to give wholesome advice than to adopt proper remedies. It is a downward and an easy path that leads to ruin [...] but it is a rough and uphill road which leads to prosperity; every amendment is at first unpalatable.—For this reason, I shall recommend with difference, what is like to be followed with reluctance.

[Page 10] We complain in general that money is scarce. We are mistakes about facts, for the thing alledged is not altogether true. Pride or the force of habits prevent us from discovering the truth. There is not any country in which money may be acquired with more ease than in America, and every man has it, who has any right to ex­pect it, except in cases where government interferes; but most of us ought not to have any money; we have not deserved it, for we have expended more since the peace than we have gained, whence it is that we neither have money, nor any kind of marketable pro­perty by which we can pay our debts: No man nor body of men can have either, whose expences exceed their income. There is a plain and certain process by which our complaints may be relieved—The bad effects of indolence and luxury must be cured by di­ligence and oeconomy, and the whole of our debts may be dis­charged in a few years by industry and frugality. When are we like to obtain money by such means? No man can attend to the prevailing conduct of the Americans without expressing his fear that the period is very distant. Instead of finding general proofs of industry, oeconomy, temperance, and other republican virtues, he sees a nation that is more luxurious, more indolent and more extravagant, than any other people on the face of the earth. In drawing this figure, I may be charged with high colouring, but the reader is requested to examine the original, and if he finds that we are the most luxurious and the most dissolute of all nations, he will certainly admit that some restraints might help to increase the quantity of money among us, or it might prevent the occasion for it.

Every empire under the sun is supposed to be independent of any other; that is to say, the subjects of every empire are supposed to enjoy a natural as well as a political independence. It is pre­sumed that they cloath and feed themselves. This, in former times, was obviously the case in all countries, but the introduction of commerce has produced many seeming variations from the rule. Industrious nations, who have more provisions or cloathing of any particular quality than are necessary for their own consumption, send them abroad to be exchanged for money, or for some other kind of cloathing or provisions which they like better, or which they cannot prepare with the same ease; but still their exports and imports are nearly equal, and the quantity of imported goods con­sumed by every nation, bears a very small proportion to what they consume of their own manufacture. This is true even of the Spaniards, though national pride or indolence seems to furnish them as an exception to this general rule. They depend on other nations for many important manufactures. The consequence is obvious. Though the Spaniards possess the rich mines of Mexico [Page 11] and Peru, by neglecting useful manufactures, they are become a poor nation, and they are every year decreasing in numbers and strength.

We observe that most other nations maintain a kind of barter or exchange of manufactures with one another, but still the great body of the inhabitants, rich and poor, are cloathed in the manu­factures of their own country. Is this the case in the United States? With us the master and his slave, the farmer, the mechanic and merchant, are all cloathed, from head to foot, in foreign manu­factures; this is not because we have not hemp, flax and cot­ton sufficient. There is no country where those articles are pro­duced with less trouble, nor is there any difficulty in procuring wool; but our imports are not confined to cloathing: no small share of our furniture is of British manufacture. Saws, hammers, hoes and axes, are also imported as though the wolf had made war against our iron as well as against our sheep. In every small town we are cherished with Irish butter and beef, and with British ale, porter and cheese, as though the country did not produce hops, barley or black cattle. Lest absurdity should not go on stilts, and folly ride on the great horse, we make large importations of hazle and oak sprouts, under the name of walking canes. Surely there is no scarcity of wood among us; but our sticks are not foreign. In excuse for all those follies, we are told, that a man has a right to use any of the comforts of life which he can pay for. This may be true, but he has no right to use the luxuries of life which he cannot pay for; and perhaps it may be questioned whe­ther he has a right to give examples, and introduce follies that may prove ruinous to his fellow citizens. Under the head of luxuries we may fairly include every imported article, because this country certainly produces all the necessaries of life. It is hardly requisite to visit a large town in order to determine whether the luxury of dress is become an offence against decency, as well as a sure road to bankruptcy. In this remark, no particular reference is made to the dress of either sex, for they are equally attentive to the privilege of being in fashion. It is true that some doubts have arisen con­cerning the meaning of the word fashion. In most countries fashion in dress is understood to mean the form and quality of cloathing, which is used by the most respectable inhabitants, or by the great majority of the nation. From late observations, we are taught to suspect that the word has a different meaning in the United States. Among us a person is understood to be in perfect fashion, who is rigged off with something that has not been seen nor heard of be­fore in the state. On this principle it is that we have seen new forms of head dress, like bullets in a pop-gun, kick one another out so fast, that we could hardly learn their names as they passed in [Page 12] review. Perhaps we shall be told that an American is not in fashion who dresses like other Americans; he must dress a [...] people do in London. If they change their cloaths once in the month so must we. If they wear buttons of the size of a saucer, in the form of a hexagon or square, so must we. What a pity it is that fa­shions should wear out in London, before they can arrive at New-York or Philadelphia! If there was a glass in the moon we might catch the fashions as they rise. How does it fare with nations who have no change in the fashion of their cloaths? Have the wo­men in those countries fewer charms, or have the men less discre­tion than we have who are subject to weekly revolutions? Surely the whim of this day has no more intrinsic beauty than the whim of yesterday.

In old nations, where manufactures flourish, and where wealth is unequally distributed, some of the inhabitants being exceedingly rich, and the bulk of them miserably poor, it is wise in the govern­ment to encourage luxury and caprice in dress; by those means the wealth of the rich circulates through the hands of the manu­facturing poor. What is sound policy in those countries must be folly and madness among us. When we encourage luxury, it is to enrich another nation, and to make our own citizens poor. Can there be a greater treason committed against the States!—The Chinese and Japanese, great, politic and wise nations, are distinguished by a national dress. The Dutch, though they are surrounded by nations who are changeable as the moon, have sub­mitted to little change in dress for 200 years. Their commerce does not, like the commerce of France and England, depend on their manufactures, and nothing less than rigid oeconomy could make them respectable.—Nothing but NECESSITY can justify us in the use of any foreign manufacture; doubtless the word ne­cessary is very ambiguous; most people contend that what they buy is necessary, provided they can barely discover the use of it. We have seen the daughter of a labouring mechanic perform her after­noon's visit, dressed out in more lace, ribbons, gauze and silk than her father could have earned in twelve months in any part of Europe. Were those things necessary! We have seen a young Buck, the son of a planter, who scarcely sold one hogshead of tobacco in the year, on his way to a quarter-race, fitted out, for the sake of propriety, with white silk stockings under his boots, a pair of durable black silk breeches, and more silver on his saddle and bridle, than the value of his father's estate, if his debts were paid. Those were a few of his necessaries. It is very observable that in other countries people who live by their industry▪ and are obliged to pay their debts, do not find such things necessary. It is alledged that in England the food, raiment, and other necessaries of a la­bouring [Page 13] man cost him annually about 7l. 10s. sterling; deduct a moderate allowance for food, fuel, and house-rent, how much will remain for clothes? The 'Mareschal de Vauban, considering what taxes may be paid by a labouring man in France, estimates his annual expence in clothing at somewhat less than 40 shillings of our money; this includes the cloathing for himself▪ wife, and two children. It may be noted that half of the subjects both in France and England come within the foregoing predicament, they are mechanics or day labourers. Compare their expence with our's in the article of dress; and it must be admitted that an epidemic madness has laid hold of us. It is alledged, that the citizens of the United States have contracted debts within the last three years with the subjects of Great Britain to the amount of near six mil­lions of dollars; consequently our estates are mortgaged for that sum. Painful sensations must arise to every man who loves his country from the prospect of such beginnings. Thus it was that Corsica was mortgaged to the more industrious citizens of Genoa for silks and velvets, and it was afterwards sold to a foreign power. We shall be told in excuse for imported luxuries, that we buy goods cheaper than we can make them, and a man earns more in his tobacco or corn field, than he could earn at a loom, or by other manufactures. These positions are fallacious and ill-founded.—Both experiment and calculation prove them to be false. During the late war goods were dear, and we did not run into debt, for we bought few—manufactured some—and were frugal. Since the peace goods have been cheap, and we have nearly become bank­rupts. It appears that our earnings in the field have not been equal to the price of the goods that we have consumed.—Every domestic manufacture is cheaper than a foreign one, for this plain reason, by the first nothing is lost to the country, by the other the whole value is lost—it is carried away never to return. It is perfectly indifferent to this state, or to the United States, what may be the price of domestic manufactures, because that price remains in the country. Every man is supposed to be employed in some pro­fession—he is a mechanic, or he is employed in raising provisions for those who are. In Great Britain the farmers are to the ma­nufacturers as four to three; in this state, where provisions are more easily raised, the number may be equal, because the labour of one man in the field is more than sufficient for the nourishment of two. Let the manufacturer demand what he pleases for the produce of his labour, the farmer can easily settle the account by selling his provisions accordingly. The annual consumption of goods in this state has been estimated at a million of dollars, or rather at 1,200,000 dollars. What is the result! 1,200,000 dol­lars [Page 14] in specie, or produce to that value, have been sent out of the state, or must be sent, and we are so much the poorer. Suppose the whole of those goods had been manufactured within the state, or a sufficient quantity for our consumption, and that they had cost the consumers, or been valued at two millions of dollars; would the citizens of this state have lost 800,000 dollars by this difference in price! The very reverse would have happened.—They would have gained, or they would have saved, 1,200,000 dollars; for there was not a single dollar to have been sent out of the country. No man is to say that a thing may be good for indi­viduals which is not good for the public, or that our citizens may thrive by cheap bargains, while the nation is ruined by them.—He is neither a politician nor a patriot who would use such a cloak. Let us turn our attention to manufactures, and the staple of our country will soon rise to its proper value; for we have already glutted every foreign market. By this expedient instead of using fictitious paper we shall soon obtain hard money sufficient—instead of toiling in the field, and becoming poor that we may enrich the manufacturers of other countries, we shall prosper by our own labour, and enrich our own citizens.

LETTER IV.

IT has ever been found that speculative reasonings are weak and inconclusive when opposed to the prejudices or passions of a nation. There is something so bewitching in luxury and idle­ness, that nothing short of hard NECESSITY can banish them; per­haps this great reformer is not far distant. When a man sees his fellow citizens posting at full speed to destruction—when he sees them attempt to mortgage their whole estate for a whistle and bells, and the legislatures of some of the states holding a candle to the prevailing folly, by cherishing the idle at the expence of the industrious, he comforts himself that the race is nearly run. It was not sufficient that the whole produce of our country on the last three years has been exchanged for luxuries—all the hard mo­ney that could be collected was also exported, but there was still a remnant of hard money in many of the states—the people re­tained it for the necessary purposes of exchange, and merchants could not get it out of their hands. In order to banish this rem­nant [Page 15] of hard money, our legislatures are following one another in making a paper tender. By this happy expedient people will be enabled to ruin themselves, every farthing of specie, which seems to be obnoxious, will be exported, and we shall be as poor and pennyless as Tartars.

When our merchants are involved in a general bankruptcy, and when the officious friendship of foreign merchants is sufficiently punished, who tempted us to run in debt, there will be an end to the importation of foreign goods, and necessity will effect what prudence could not.

I have some times looked for those marks of political virtue, those proofs of self denial which produced the revolution. I have expected to see associations formed by gentlemen in the several states for promoting American manufactures. For as soon as we can make our own cloaths and our own arms, we shall be perfectly independent. Surely the man who is cloathed in American ma­nufactures, which he wears for the sake of enriching his native country, and relieving his fellow citizens, may be allowed to have some claims to patriotism, which is the most honorable garb that can be worn.

While we are considering of the various means by which our fellow citizens may be relieved from a scarcity of money, the sub­ject of dress claims our particular attention. Our interest and our honour are united in recommending a national dress, national pre­judices are useful, they attach people to those of their own coun­try, and induce them to assist one another. In most cases a nati­onal language answers the purpose of distinction; but we have the misfortune of speaking the same language with a nation who, of all people in Europe, have given, and continue to give us few­est proofs of love. We do not count it an honour to imitate the forms of government that prevail in Europe—why should we think it honorable to imitate the fashion of their coats? "O imitatores, servile pecus!" Why should we imitate the dress of a man from London, more than of a man from Ispahan, P [...]kin, or Con­stantinople? Surely we do not mean this imitation as a mark of homage to a Briton—nor do we pay it as tribute, though it ren­ders us tributary. We do not mean to acknowledge that Bri­tons are superior to ourselves in every thing, whence we should imitate and strive to copy them. How then are we to account for this sycophantism? Though it was profitable, we are placed thereby in a point of view so humiliating, and so offensive to the common feelings of men, that we ought to break the fetters and give another proof of our being free. But since the imita­tion of English fashions cannot cost the United States less than five million of dollars per annum; every argument from oecono­my [Page 16] as well as pride would seem to recommend a national dress. What would be the best form of a national dress from head to foot—a dress to be adopted and persevered in? This question may pos­sibly be answered by some person who shall attempt the change. If a few respectable citizens in every state should undertake the change, beyond doubt it would soon become universal. It is true that national dress, like their several forms of government, has been established in most countries by a long process of time and accidents; but the Americans have had the resolution to shake off a set of prejudices, and at once to establish a new system of go­vernment. Such a nation might easily shake off the trammels of English fashion in the hat or coat, especially when it is considered that great savings and other solid advantages would accrue from such a measure. If a national dress should be adopted, we shall have nothing to apprehend from the effects of caprice. We are not to fear lest every adventurer who arrives among us with a new figaro on his back or head should eclipse our dress, and claim the greater attention of the ladies. It will constantly be found that the national dress in every country, is more decent and more plea­sing to people at large, than any new adventitions o [...] foreign dress. Every stranger who comes among us will think it best to assume the dress of the country. If he affects to become a citizen he will find it necessary. It is the privilege of a conquering nation to im­pose its dress upon the conquered; this becomes a mark of sub­jection. There has been a notable exception to this rule. When the Tartars conquered China, the Chinese had the good fortune to preserve their dress, and the Tartars submitted to a change; hence the Tartars in that very empire are considered as secondaries and inferiors. Whether we shall submit to the perpetual rule and customs of England, and acknowledge ourselves subordinate, is a question that is not like to be determined speedily. The present appearances are against us. I have mentioned the English, because it is certain that we do not copy French dress, though that also would be folly.

The measures to which I have referred would certainly relieve us from a scarcity of money, but they are rather to be effected by the spirit of the nation, than by legislative interposition. They are rather to be effected by voluntary patriotic association, than by express and particular statutes. It is impossible to foretell where any salutary measure is to have its beginning; but as the amendment in question will doubtless be produced by the combi­nation of sundry causes, I should naturally expect that some of the Eastern states would give us the example. Not because the citizens of those states are at this time distinguished by the fruga­lity of their dress; for we believe that no people in the united [Page 17] States have sought more greedily to ruin themselves, by the luxury of dress, than some of the inhabitants of the Eastern States. Nor is it because the tradesmen or mechanics in those states have any particular claim to patriotism; for if it be true, that as soon as the legislature of Massachusetts had imposed a heavy tax on certain imported goods, to encourage the manufacture of similar article at home, the mechanics raised the price of those very articles by the full amount of the tax. For instance, two dollars being the tax that was laid on beaver hats, the hatters immediately added two dollars to the eight dollars they had formerly demanded for a bea­ver, as if they wished by extravagance to provoke a repeal of the law, or to promote smuggling. If such reports are well founded, and if such instances of extortion are common among the mechanic [...] in the eastern states, we are not to look for proofs of signal pa­triotism among them. The Eastern states are particularly cir­cumstanced with respect to foreign commerce; they produce nothing fit for exportation; the fishery cannot be considered as theirs, for it is common, and the trifling amount of lumber and live stock, the produce of the country, that is exported, cannot be sufficient to cloath one-tenth of the inhabitants. In the mean while it is very observable, that no people can be more conve­niently situated for the purpose of extending manufactures than the citizens of Massachusetts, New-Hampshire, Connecticut, and Rhode-Island. The climate is extremely healthy, nor is it too warm for a white man to labour through the whole summer. Do­mestic slavery, which has ever been found unfriendly to manufac­tures, does not prevail among them. A great proportion of the inhabitants are contiguous to one another in small towns, which are the proper nurseries of manufactures; and most of those towns are situated on or near a water carriage. The citizens are natu­rally industrious and tractable; whatever raw materials they want can easily be procured from the southern states. As the number of citizens increase in the manufacturing towns, provisions may be­come scarce, but the corn and rice of the southern states must afford them a convenient and constant supply. Vessels that are not employed by winter in the fishery, may be usefully engaged in carrying provisions in exchange for manufactures; for in such a soil and climate as the southern states, there must ever be a redun­dance of provisions. Surely then it may be expected that the citizens of the eastern states will be among the first manufacturers. There we see a people who cannot long persevere in the course they have been running; a people who are persuaded by every argument of prudence and sound policy to adopt other measures; are we not to expect some useful, some great and patriotic exam­ples from that quarter!

[Page 18] If other arguments are wanted to induce us to promote dome­stic manufactures, and a national dress, we had best consider the question concerning imported goods, as it affects our own reve­nue, compared with the revenue of a foreign kingdom. When the subject is viewed in this light we must admit, that our present measures are neither supported by patriotism, nor by any other civil or political virtue. The amount of foreign goods annually consumed in N. Carolina has been estimated at more than one milli­on of dollars, perhaps we may fairly state the amount of British goods at that sum, consequently the subjects of Great Britain are enriched by our follies, to the amount of £.400,000 the year. How much do we contribute towards the taxes of Great Britain by such a consumption of her manufactures? This is a question that has not been fully considered, but I think the amount may fairly be stated at seven hundred thousand dollars by the year. To some Americans this computation may appear very extravagant; but gentlemen who have seen the burdens that are borne in foreign countries will not think it too large. It is generally alledged, that a man pays fifteen shillings for the use of government out of every twenty shillings that he spends in England. Some have stated the public tax at seventeen shillings in the pound. Let us take an in­stance in the article of beer. The land pays a tax; the barley which grows on it, when malted, pays an excise of six-pence by the bushel; hops pay one penny by the pound; the beer, when brewed▪ pays an excise, in some cases, greater than the original value; and all the persons who labour in the premises, contribute towards the national revenue by their sundry consumptions, to the amount of three-fourths of the whole price of their labour; this also must be charged on the beer. Surely the consumer of beer pays more than seventeen shillings to government for every twenty shillings which he expends in that liquor. But I have taken four­teen shillings in the pound, as a moderate estimate of the sum that a man in America pays towards the support of government in Great Britain, who consumes British manufactures. It follows of course, that we have for the last three years been paying into the British treasury a tax, upwards of £.200,000 a year. Strange liberality; while our own taxes are neglected, our government degraded, and our private debts unpaid, we are freely giving up the last farthing for the support of a foreign government. The [...] of our foreign debt would have been discharged by a smaller [...] than we have already paid into the British treasury; but our money is gone, and every part of the foreign loan remains unpaid. While we are neither honest nor grateful to those who befriended us in the hour of distress, we are extremely beneficent to those who stand in a different predicament. A nation that takes so [Page 19] much pains to injure itself cannot possibly prosper. If the genera use of British goods in these states could be improved so as to bring a fifth-part of the sum into our treasury that it brings into the treasury of Great Britain, our civil government would be well supported, our foreign loans discharged, our national honor pre­served, and our citizens fully relieved from the burden of positive taxes. These are objects devoutly to be wished for.

LETTER V.

IN all governments the relief of the poor should be one of the chief objects of legislative attention. Every citizen demands justice and protection from government; these should not—they cannot be refused; but the poor man has other claims. His wants and his sufferings must be in proportion to his degree of poverty; humanity requires that his sufferings be relieved or pre­vented so far as may consist with the steady and impartial admini­stration of justice. It does not consist either with honesty or sound policy, that the rich should be defrauded or plundered for the sake of the poor; but the fiscal and oeconomical laws of every state should be so framed as to encourage and assist the poor in their usual employments. The necessary burdens of civil govern­ment should be so fashioned as to press on their shoulders in the most convenient and easy manner that is possible. The general payment of taxes is absolutely necessary to the support of any government, but when money is remarkably scarce, it must be difficult for the poor man to pay his taxes, and in many cases he may find it impossible to make the annual payments, without the public sale of some part of his property. Every distress of this kind ought to be prevented, if possible. Perhaps the most easy and most effectual method of preventing the poor man from being distressed in the payment of taxes, is by altering the general form of taxation, or by substituting an EXCISE in the place of a tax on property, which is common in North Carolina.

That tax, or additional price, which in most countries is laid upon certain goods when they are sold for consumption, is called Excise. Thus a retailer of spirituous liquors may be required to pay for the support of government, one shilling for every gall [...] [Page 20] of rum that he sells; and the shop-keeper may be obliged to pay half a crown for every yard of silk or cloth that he sells. This tax is very different from the Customs, or duties that are usually paid on the importation of foreign goods. It is a subsequent tax, and frequently much heavier. In many cases it is laid on articles of domestic production. In England several millions sterling are an­nually raised by an excise: in France the revenue from an excise is larger; and in Holland almost the whole of the national expences are paid by different excises. Almost every thing in that country, which a man eats or drinks, is subject to an excise: and in some cases the excise is nearly equal to the prime cost. It has frequent­ly been said, that when the citizens of any state are obliged to raise a certain sum of money by the means of taxation, there can be little difference by what name the tax is called, or how it is laid; but this opinion is ill founded. The capitation tax or land tax, such as are usual among us, are inevitable and positive taxes; they are not to be averted. The industrious cannot elude them—the unfortunate cannot escape them: every citizen must take out his purse and pay the amount. But the excise is a negative or indi­rect tax. When it is laid on foreign goods, no man is obliged to pay any part of it; and when it is laid on domestic luxuries, no prudent man will pay much of it. It will frequently happen, that the most virtuous and industrious citizens are greatly distressed by domestic sickness; and it will happen that whole counties are distressed by intemperate seasons and short crops. In all such cases, the excise operates as a relief to the citizen; for he buys no luxuries on that year, and consequently he pays no taxes, pro­vided luxuries only are excised. Let us suppose a very frequent case:—A poor man is possessed of 500 acres of poor land, hardly worth 100 dollars. His land tax will be 25, and his poll or per­sonal tax 15 shillings. Does it not frequently happen that the public officer, at the season for collecting taxes, finds such a man without 40 shillings in his pocket? Perhaps he is seldom possessed of so much money at a time. It would certainly be strange if the poorest man in the state, who is not a cripple, could not earn, in the course of the year, three times the sum that has been men­tioned, besides what is necessary for the support of his family; but oeconomy and a provident foresight are not the characteristics of the poor. In fact, the poor in these states are generally poor be­cause they want those qualities: wh [...] then are we to suppose a man to have the thing which we ought rather to suspect he has not? Or why shall we make it necessary for a man to treasure up money for several months, who never cared for to-morrow? The land tax, or the personal tax, may appear at first sight to be small [Page 21] burdens, but experience has taught us that they are not easily borne. On the other hand, the most indolent or most careless citizen cannot possibly be incommoded by an excise. If he should have no money in the course of the year, nor any thing to sell, he will not be able to buy any thing, and consequently will not pay any tax. Whenever he shall be able to buy any foreign commo­dities he will pay his tax in buying the goods, for the excise is added to the price of the goods: it is paid by the merchant.—Suppose the excise on rum to be one shilling the gallon▪ whoever buys one gallon of rum must pay a tax of one shilling, for in this case the rum will cost him six shillings instead of five. The same rule may be applied to every article of foreign make. Prudence would dictate, that articles which are least necessary, and articles which may soonest come to perfection in the state, should bear the heaviest tax. The natural and constant operation of this tax in favour of the poor, is twofold. It is a voluntary tax, and it is a spur to industry. No man pays the tax, who is not able and wil­ling to buy foreign luxuries, therefore it is voluntary. The man who is diligent, and manufactures for himself, has no occasion for those luxuries, therefore it is a spur to industry. In a word, all taxes on property are burdens on the good citizen:—they dis­courage industry. All excises, or taxes on consumption, are taxes on luxury and dissipation:—they punish idleness, and promote in­dustry. Can we hesitate in making our choice?

The opinions of men have been variously affected in different countries on the question concerning an excise or a land tax, ac­cording to their passions or their prejudices. In England the ex­cise has been unpopular, because the multitude who are poor sus­pect that they are chiefly affected by such taxes. They continue to prefer a land tax, because none of themselves have any lands. Doubtless a land tax is very proper in that country, because the owners are wealthy; but in America the case is different, the poorest of our citizens commonly possess a little land. In France a land tax is very obnoxious, because it is thought to infringe upon the privileges of a num [...] [...] nobility. Their excise is chiefly on the necessaries of life, and is for that reason very burdensome. The revenue of the Roman empire in its prosperous days, arose chiefly from excise and customs. That jealous and wise nation did not readily submit to a personal tax, nor a land tax. There was a very hurtful trade carried on between Rome and the East Indies, by the way of Alexandria and the Red Sea. By this trade a large balance of silver was exported from the empire; frequently to the amount of three millions of dollars by the year. The returns were chiefly in silks, jewels, and spices—perfect luxuries; for which [Page 22] reason their East-India trade was charged with a heavy excise ^*. Augustus ventured to impose a tax of five per cent. on legacies and inheritances, which was very productive, with the advantage of being a negative tax. The land tax and poll tax had been long in use through the provinces, but they do not appear to have been generally imposed on the Roman people before the reign of Ga­leni [...]s who succeeded Diocl [...]fian: from that period direct or po­sitive taxes became universal. What was the condition of the Ro­man people under the administration of customs, excises, and other negative taxes, compared with the times in which the land tax, the poll tax, and other positive taxes became universal!—it was an age of gold compared to that of iron. Humanity is shocked with the tales of wo that are told. Parents are said, during the latter age, to have sold their children, and to have sold themselves, into slavery, in order to shun the burden of taxes. All wise governments have thought it their duty, on special occasions, to offer bounties for the encouragement of domestic manufactures; but an excise on foreign goods must operate as a bounty. Suppose that our annual imports into these states are worth £. 4,000,000, an excise equal to a tenth part would bring 1,100,000 dollars into the treasuries; this would be a very respectable addition to the revenues of these states, and would operate in proportion as a bounty for the en­couragement of domestic manufactures. It is true, that as our manufactures increase, our revenue by excise must decrease; but our abilities to pay taxes by some other means, must increase much faster than the excise decreases. Thus an excise of 2s. may be paid in the purchase of a pair of imported shoes, which are supposed to be worth 10s. the tax goes into the treasury, but ten shillings, the cost of the shoes, is sent out of the country. On the next year such a pair of shoes is made in the country; in that case, the two shillings is sunk in the revenue, but ten shillings are saved in the state, and some of the citizens are so much the richer.

When I say that an excise is more favourable to the poor than a poll tax, or a land tax, or any other tax on property, and that [Page 23] it tends to promote industry and wealth, I must constantly be sup­posed to mean an excise on luxuries, or imported goods; and I would also be understood to mean an excise that is impartially laid, and fairly collected.—Our expectations on this head are not san­guine;—nor is the prospect very pleasing; for some of the laws that we have hitherto made for collecting duties, are shamefully defaced by the want of public spirit; they are full of ambiguities, through which the knavish and the cunning may creep. In North-Carolina it was enacted, that a merchant importing goods by land, to the value of £. 5▪ should be obliged to pay duties on the same; but a planter might import goods to the value of pound;. 20, though he imported them for sale or merchandize, without paying any duty. The author of such a clause must have forgot that he was bound to serve the public rather than himself, and that the revenues of the state are not to be sacrificed to the convenience of a few individuals.

The general advantage of a sumptuary law, or an excise upon imported goods, is so obvious, that I question whether any objec­tions can be made to it, besides the expence of collecting the tax, and the probability of frauds being committed in secreting the goods.—Surely the expence of collecting any tax cannot be an object when the happiness and prosperity of a state is contrasted with discontent, poverty, and disgrace. If the expence of collect­ing the revenue should amount to ten per cent. no part of that money would be lost to the country, and the diligence of public officers might prove the means of enriching the country. In all places, and at all times, it has been too common for merchants to endeavour to defraud the revenue by smuggling goods. The fre­quency of this offence seems at length to have altered men's ideas concerning the turpitude of perjury, or the baseness of stealing; and there are men who would steal from the nation, or defraud the revenue, who would not on any account cheat a private ci­tizen. Be this as it may, there are means by which smuggling may be prevented ^*; and when the people at large have discover­ed, [Page 24] that they must submit to poverty and to oppressive taxes, or must support the faithful execution of the revenue laws, they will presently admit, that it is both honorable and useful to set a mark upon the man who violates the laws of the state. I have said, that an excise is more favourable to the poor than a land or poll tax; I will venture an additional sentiment—There never was any government in which an excise could be of so much use as in the United States of America. In all other countries taxes are con­sidered as grievances—in the United States an excise on foreign goods would not be a grievance—like medicine to a sick man it would give us strength. It would close that wasteful drain by which our honor and our wealth are consumed. What though money was not wanted—though we did not owe a florin to any foreign nation—though we had no domestic debt—and though the expences of civil government could be supported for many years without a tax—still it may be questioned, whether an excise would not be desirable. It is surely the best expedient by which we can promote domestic manufactures, and the condition in which we now live—our general dependence on a foreign country for arms and cloathing—is dishonorable—it is extremely dangerous.

LETTER VI.

IN all ages of the world, and in all governments in which people have been oppressed, their chief complaints have arisen from the weight of their taxes, or other impositions of a similar ten­dency. Some tyrants there have been, whose cruelty has extended to life as well as property: But the common distinction between tyrants has been, that one of them has imposed more grievous taxes, or has laid them on with less regard to the convenience or to the abilities of the subject. Hence it is that governments are preferred where the power of taxing is in the hands of the people, because it is presumed that they will impose such taxes as are most profitable, and most easily paid.

It may happen nevertheless, that in a republican government, the general system of taxing, arising from prejudice or inattention, may not be of that kind which is most conducive to the ease or prosperity of the people. This I take to be the cause in many of the states; and as the subject is extremely interesting, the reader [Page 25] will doubtless excuse me, though I detain him somewhat longer in considering the particular equity, as well as the general opera­tion of an excise or impost, by which the whole of the national debt may be discharged. Part of our taxes must be paid in specie, and some part of them may be paid in paper. Interest and prin­cipal of our foreign debt—the salaries of our ministers in foreign and some departments—and the pay of such troops as are necessa­rily employed in the service of the United States, must be dischar­ged in hard money. We shall state the expences of the federal government at 400,000 dollars by the year; for we presume that great oeconomy will be used till we are able to pay our debts, and that we shall try to be just before we are generous. The states have not hitherto been called upon for any thing more than the interest of the foreign debt; but the principal of the French loan, as well as that from Holland. is to be paid off by instalments, and the first of those payments is to be made in the year 1787, from which time some part of the principal is to be paid off every year.—Within twelve years the debt is to be reduced to a quarter of its present size, but in the mean while the payments of the principal and interest will amount to near one million of dollars by the year. This must be paid in specie, or in such payments as will command specie to that value; but there is a considerable debt which may possibly be discharged by paper. The annual tax that may be paid in this manner is very uncertain: for though we should discover that some of the states have, by assuming a considerable part of the continental debt, and by other means, nearly paid their quota of the domestic debt contracted by the United States, still it will fol­low, that the particular debts contracted by the states, or those which they have assumed, must be paid. Certificates have been issued for the amount of those debts▪ by one class of auditors or another; how is the certificate debt of this state to be reduced? how is it to be discharged! These are difficult questions—they are beyond the powers of ordinary calculation—conjecture itself can hardly reach them. It has been alledged, that our certificate debt bears some resemblance to that many headed monster of anti­quity which defied all danger; whenever one of its heads was cut off, two other heads arose to supply the loss.—Debts of this kind cannot be reduced to the common rules of finance.

We have seen that a tax is to be collected annually for the use of the federal treasury in specie, unless we are willing to forfeit our honor, and give up all pretensions to national character. Is it probable that we shall be able to raise half of this sum by all the various taxes on property? I think not. It is certain that the whole of our [...]xes for the present year, after the civil list of the [Page 26] state is paid off, will not produce half the sum in specie required for the use of the federal treasury. Let the poll tax, or land tax, be increased to three times the sum that is now demanded, and there would still be a deficiency; but the consequence would be great distress to the poorer class of citizens, and multitudes would be constrained to fly into the western territory: thousands would complain of the scarcity of money; more paper must be coined; that paper would again depreciate, and the taxes must again be doubled. Thus we should for ever be climbing the hill, and for ever sinking to the bottom. But we have other objections to taxes on property—they are extremely unequal—they cannot be justified except by necessity, and such necessity does not appear. Is it equal or just, that a citizen who lives near a [...] settlement, or one who lives in the wilderness, should pay the same tax for his land, his slave, or any other property which he possesses, as a citi­zen pays who lives near the sea coast? The last mentioned takes his lumber, and every thing that his farm produces, to a ready market; the other can get nothing for his lumber; corn itself is of no use to him when money is wanted, and there are few things his farm produces that will pay much more than the expence of carrying them to market. Those people complain at present, and their complaints are well founded, though our taxes are so small as hardly to deserve the name; what would they say if the taxes were such as the honor and safety of the nation requires? Let us consider, on the other hand, the effects of a substantial tax on lux­uries. As it would be an easy matter to raise the whole sum that is wanted both for the federal treasury, and for our own civil list, by an excise on foreign goods, I conceive that all other taxes might be given up, except a small land tax. Under such an administra­tion of the public revenue, the whole of our paper money might be called in within the space of three or four years; for in that time the industrious citizen may have discharged his private debts; and as he will not be called on for the payment of taxes, there can be no honest reason for making more paper. The immediate and necessary consequence of such taxes will be the increase of domestic manufactures, and the general circulation of hard money. Let us raise 1,000,000 dollars on the next year by imposts and excise, the consequence will be, that on the following year we shall import less goods, by at least the amount of 500,000 dollars, and thus we shall become £. 200,000 the richer—that is to say, we shall have paid off so much of our debt, or being out of debt we shall have laid up so much hard money; for whenever our exports exceed our imports, the balance returns in specie. If any man has doubts concerning the effects of large taxes on foreign manufac­tures, [Page 27] he should turn his eyes to the Eastern states, and he will dis­cover, that during the late war, sundry manufactures had there been carried to considerable perfection. We had not been six months in the enjoyment of peace, before those manufactures were all ruin­ed. The mechanic is generally the first who perceives the effects of a pernicious commerce, for the support of his family depends on his daily labour. Hence it is that the merchant may be profited by a particular branch of commerce, and may promote it diligent­ly, while his country is sinking into a deadly consumption. It is the duty of the statesman, either to check or to promote the several streams of commerce by taxes or bounties, so as to render them profitable to the nation. Thus it happened in Massachusetts—A tax of 25 per cent. was lately imposed on nails, and the poor o [...] Taunton were immediately restored to life and vigour. If our in­formant is correct, there are at least 250 labourers employed at this hour in the manufacture of nails in that little town. The effects of sumptuary laws must be extremely favourable to the industrious citizen, who lives one or two hundred miles from any navigable water. In those parts the land in general is fertile, and provisions are cheap, for it cannot be sent to a foreign market—There it is that the manufactures of linen, woollen, and iron may flourish.—The citizen near the coast may possibly indulge in the [...]se of foreign luxuries, while he can get them in exchange for a piece of timber or a bushel of corn; by such men our taxes must be paid: but the citizen, in the interior country, will attend to his manufactures, which may readily be transported to any part of the state, and within a few years we may expect to see the most plentiful circu­lation of specie in those remote settlements, which are now labour­ing under the unequal burden of taxes. By such a system of finance, perfect justice will be rendered to every citizen, they will stand on equal ground, and no man will have reason to complain, for every man will fix the amount of his own taxes; they will be limited by his abilities, his caprice, or his prudence.

In every regulation of finance we should have an eye to a vast unsettled country [...] fertile soil, and happy climate invite the foot of the adventurous citizen. The inhabitants of that country, whenever they are formed into separate states, are bound by the present federal rule to pay their quota of the national debt, ac­cording to the value of their lands and improvements; or it may possibly be expected, in order to shun the impracticable estimati­on of property, that their quota shall be as the number of citizens. Is it to be expected, that men who live at such a distance from market will, for many years, pay taxes to any amount? surely it is not! Though they should promise they will not be able to pay. [Page 28] For this reason we should take care that the operations of finance [...] any man into that country. Let the citizen have [...] in his power to live on the sea coast, equally secure as in the Western countries without the risque of troublesome visits from the [...] of taxes. In the course of time manufactures must flou­rish in those settlements, and the citizen on the sea coast who ex­p [...]'s his produce, may find it his interest to buy goods that are [...]de in the Western countries. At such a time we may expect that [...] [...]thren there shall, without difficulty, contribute their [...] the support of government. In the mean while little can [...] expected from them, except that they may consume a small por­tion of the foreign goods which pay tax when they are imported [...] of the original states. As our manufactures increase, our imports must decrease in proportion, and before the foreign debt is discharged or before thirteen years have revolved, our annual im­portations may fall short of 2 [...]0,000 dollars. In this case certain­ly the revenue on consumption must be greatly diminished, but we are [...]o [...]collect that many articles which grow in these states must be in constant demand in other countries, and that our [...] is very pro­ductive; whence our exports may be near half of what they are at [...] after our imports are reduced to a fourth or a fifth part of that sum. Such a change of circumstances must produce a ba­lance of specie in our favour, to the amount of 1,000,000l. every year▪ and though it did not produce half of that sum, there would certainly be a large supply of specie in circulation, and the balance of our quota might easily be raised by sumptuary laws of another sort.

Such are the present advantages and future effects that may be expected to spring from large and general taxes on foreign goods. Let us contrast this with our present condition and system of fi­nance. We have stated, in a former letter▪ that by the consump­tion of British manufactures, to the value of one million of dollars, we contribute at least 700,000 towards the revenues of that nation, while our own are perishing; but there are other misfortunes and other marks of servitude, to which we are subjected by our pre­sent arrangements, and the general use of British goods. In the several states, to the southward of Delaware, it is agreed, that three fourths of the produce is exported and a similar share of the returns are made in British bottoms. It will be found that for ex­porting lumber and bringing back the returns, at least, one half of the property is paid to the carrier. Tobacco, our chief staple, is exported on better terms. They who have shipped tobacco for London, have the satisfaction to find, that after all charges are paid that is to say, freight, commissions, brokerage, storage, and a variety of other expences, real or imaginary, there is fre­quently [Page 29] remaining two thirds of the value for which it was sold; in some cases three fourths of the value have been saved. The freight of the returns must be added, and we shall state the whole, though it is considerably below the mark, at 32⅓ per cent. Some part of those goods are carried in American bottoms, by which something is saved to the country under all the present burdens of that trade; for this reason, we shall state the average loss at 30l. per cent. From this computation it appears, that when produce is shipped for London in one of the Southern states, to the value of one million of dollars, the British merchant draws from that sum at least 300,000 dollars, under the name of freight, and other contingencies; this money is for ever lost to the country, and the remaining 700,000 which are returned us in dry goods, must have contributed to the revenues of Great-Britain at least 490,000 dol­lars. We take them burdened with that expence. Surely our present commerce is of the most extraordinary kind. Poverty is not the most humiliating circumstance by which it is attended; for under the name of freemen, we are little better than slaves; de­graded by national bankrupty; burdened by private debts, and constantly labouring in the soil for the benefit of another empire. When good and evil are before us, we prefer the latter. We have it in our power to promote manufactures, to bring thousands of industrious tradesmen from foreign countries, to discharge our debts, and become respectable rich and powerful:—instead of that, we are fluttering about in foreign dress [...]or which we cannot pay; we are apeing the vices of other nations, while we neglect their virtues; without patriotism and without pride, we are feed­ing other people, while our own nation is sinking under weakness and poverty. Thus we have seen an idle and thoughtless debau­chee neglect the improvement of his farm, and spend his time and his estate in a tavern, supporting the family of another man, while his own family was perishing by cold and hunger.

LETTER VII.

IN the course of these letters I have tried to explain the true cause of the present scarcity of money, the surest and best me­thod of obtaining a sufficient supply of substantial coin, and the safest method of administering the public revenue, so as to prevent [Page 30] the poor from being oppressed while money is scarce. We are told by medical people, that in discovering the true cause of any dis­ease, a considerable progress is made towards its cure. It might appear strange, that a fact so obvious as the true cause of the general scarcity of money should have escaped the notice of any person; but it must be remembered, that when troubles are occasioned by our own vices, we are generally dextrous at evasions, and ingenious at fictions; for if we confessed our fault, it would be expected that we should amend. Our farmers contend that the merchants are the cause of all our troubles—they export the specie and make it scarce. The merchant will have it that our commercial system is bad,—his profits are too small, for which reason he cannot pay his debts; but all of them, who are in debt, are agreed that it is hard living in this country. Strange positions! the farmer buys fineries—his family are idle—all the crop that he can sell, does not pay for half the goods he has bought; but he wants more fineries and more rum. He can get no more credit, and he pulls out all the specie that lay in his chest. Is the mer­chant to be blamed for shipping this specie, when the extravagance or indolence of the planter could furnish him with nothing else to ship? As for the merchants, or people who are so called, their complaints are just as well founded as those of the planter. Thou­sands of adventurers from the British dominion, have added to the thousands of our own citizens who are too lazy to plow, or labour at any other calling, and for this good reason, are become mer­chants, or more properly traders. This tribe increases much fast­er than any other class of citizens; and this class we have to main­tain, besides the misfortune of paying for their goods; but when any of those gentlemen find it inconvenient to pay their debts, they gravely complain of the scarcity of money, because our com­mercial system is bad. Certainly part of our system is bad; for by proper regulations, nine tenths of those merchants that are here might be exchanged for ten times the number of mechanics, who would render much more service to the public and to themselves. The general charge of its being hard to live in America, has a worse foundation if possible than the other complaints. There is not at this time a civilized country on the face of the earth, in which a poor man may live with so much case as in the United States of America. The modes of living are various in the different states; I shall take an example from a Southern state; namely, North-Carolina.

The necessaries of life are food and cloathing. Three-fourths of the labour of the human species is, doubtless, employed in pro­curing food. In the most luxurious countries, where the greatest number of unnecessary things are used, more than half of the la­bouring [Page 31] inhabitants are employed in agriculture. It is observed that in England, the very nursery of manufactures, the farmers are to the mechanics as [...]our to three; the difference is greater in France and Germany; but many people are to be fed in those countries who are neither farmers nor mechanics. Let [...]s sup­pose that half of the subjects employed in farming would raise provisions sufficient for the whole nation, and for their cattle; or that the labour of one family in the field is sufficient to maintain two. The produce of our labour is greater, and the labour we employ is less. Every man who has visited foreign countries, knows with what diligence farmers and mechanics are obliged to labour through the year. In the winter their work begins before day, and in summer it continues through the day. They have little respite, nor time for spending money. If one of them is accosted, he seldom stops to answer the question—his work must go on. This is not the case in North Carolina, nor have we any examples of what other people call industry. If my calculations are right, and some of them are annexed, ^* the citizens of this [Page 32] state may live with half the labour that would support them in France. England, or Germany; for the labour of one family in this state is sufficient to raise food for the support of four families. Is the man candid or honest—is he not ungrateful to Heaven who complains of such a country, or says, that his troubles are occa­sioned by the necessary difficulty of living—by the difficulty of paying taxes—or of providing food and raiment—or by any other cause than by his own vices—his idleness and dissipation!

[Page 32] Our present commercial system, if we have any thing that de­serves that name, is certainly a bad one, but reason may teach us to be moderate in our complaints. If the English ministry had not cut off all intercourse with their West-Indies, and distressed our direct intercourse with Britain and Ireland, we should have con­tinued a good while longer to take her manufactures and to pay [...] them. By these means her mechanics would have thriven, and we should have been insensibly settling down into inveterate and ruinous habits. Diseases which are slowly contracted are said to be hard to remove. The measures of Great-Britain have in a short space prevented us from being able to pay our debts, and they have at the same time prevented us from feeding her own subjects. They have happily checked our folly, at a time when all are capable of [Page 33] amendment, for we have not altogether forgot the little we knew of the mechanic arts, nor the few habits of industry that we had formerly acquired. In a few years we may be reduced to a new system by which we shall be more wealthy and less dependent. Perhaps I deceive myself, but I think that I love my country, and that no man living is more desirous to serve it, but I am not griev­ed—on the contrary I shew it as a fortunate event, that our com­mercial hopes have been disappointed, and a check given to the baneful spirit of luxury, and the general use of British goods that was prevailing. Perhaps the time is not very distant when we shall be a frugal and virtuous nation. We are not to thank Great-Britain for the favor she has done us, for she did not intend those commercial restrictions for our good; let her continue to ex­clude us from her West-Indies, and contrary to good faith to withhold the Western posts; the less we gain by commerce the fewer of manufactures we shall buy, and the sooner we shall make our own cloathing. A nation less wise might have discovered long since, that liberal conduct is most profitable, but she refuses to be reformed.

The commercial history of the United States is short. At the end of the war our merchants, forsaking the trade of other nati­ons by whom we had been well trea [...], rushed into the arms of Great-Britain with a spirit that was not honorable, and with haste that was not profitable.—They did not wait for terms.—They have suffered as they deserved.—Our shipping has been oppressed.—We have seen a vessel from these states to London, laden with naval stores, bring back, as the whole produce of her cargo, five pounds worth of chalk. The balance of the cargo was absorbed in charges. In consequence of such treatment our merchants are become bankrupts a little the sooner.—The want of payment at home, and the want of profits abroad, have effectually disabled them.

The history of our planters is rather more simple. Discarding their wheels and looms, they used nothing but what was British. They bought more foreign goods in one year, than they could pay for in two. Their produce is gone, and their specie is chiefly gone, but they are still in debt. Let us be more frugal and more industrious—let us buy no more till we pay our debts. Such are the dictates of honesty and patriotism. Is not this plan of paying our debts preferable to the expedient of making money—an expe­dient that substitutes a shadow for a substance. It converts go­vernment, which was instituted for the protection of property, in­to an engine for its destruction. After all, it is the poor expedi­ent of a day, which promises relief that it cannot give. The whole process is such contemptible quackery, that while we are [Page 34] swallowing the potion the disease increases It is vain to prophe­cy, but if the time shall ever come, when the united states are to give up part of their liberty, as men frequently have done for the greater security of property, the rage of defrauding creditors by making paper money a legal tender, is like to produce the disho­norable change. If it is true that men have not virtue enough to bear a government that is perfectly free, the proof is like to come from this quarter. If there was a state in this union, in which it was treason to attempt the making of paper, such a state would become the asylum of honesty, arts and industry; and if any of the new states in the Western country shall happily pro­vide this guard, as part of her constitution, that state will cer­tainly flourish with singular speed; it will give a new proof that men are most happy when their property is safe▪ and that all men approve of virtue, whatever may be their practice.

The reader is fully possessed of the plan that was proposed in the first of these letters, for giving relief under the present scarcity of money. The relief given by paper money is neither durable nor honest. Nothing but frugality and industry can bring us sub­stantial relief: but the operations of industry, and the progress of manufactures are slow. Specie, which is banished, cannot imme­diately return; and the poor man, in the mean while, may be dis­tressed for money to pay his taxes. In order to obviate this mis­fortune, it is proposed that the expence of government be paid by an excise on all foreign manufactures, or by sumptuary taxes which are equally intended to promote domestic manufactures, and to give immediate relief to every industrious family. By a steady perseve­rance in this plan, the poor would be relieved from the burden of taxes—our citizens would be enabled to discharge their debts—we should increase daily in wealth—our country would be the resort of ingenious artists—public and private credit would re [...]ive—and we should become truly independent.