Читать книгу Blood of Tyrants - Logan Beirne - Страница 17

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Not as Happy in Peace as They Had Been Glorious in War

These were desperate times. Besides being perilously disunited, the country was in dire straits economically. In order to fund the war, America had already spent far beyond her means, racking up $54 million in federal debt and an additional $24 million in state debt.¹ The fragile nation was deeply indebted to her French allies for their wartime monetary assistance and also owed vast sums to her own American patriots who had provided guns, rations, and blood for the war effort. These soldiers and civilian suppliers had been essential in keeping Washington and his army fighting. But now that they had won, the resultant debt threatened to crush the fledgling nation. The thirteen states were not “as happy in peace as they had been glorious in war.”²

Thomas Jefferson expressed the view of many Americans in decrying “public debt as the greatest of dangers to be feared.”³ The nation’s vast outstanding debt was reminiscent of their plight under the British monarchy. The Crown had exhausted much of its wealth during the Seven Years’ War and endeavored to fund its debt by taxing the colonies—which was one of the main reasons for the Revolution in the first place. Now America had its own financial predicament, and many feared that a large national debt might pave the way back to monarchy. “We must not let our rulers load us with perpetual debt,” Jefferson warned.

We must make our selection between economy and liberty or profusion and servitude. . . . This is the tendency of all human governments. A departure from principle becomes a precedent for a second; that second for a third; and so on, till the bulk of society is reduced to mere automatons of misery, to have no sensibilities left but for sinning and suffering. . . . And the fore horse of this frightful team is public debt. Taxation follows that, and in its train wretchedness and oppression.⁴

While he disagreed with Jefferson on many issues, Alexander Hamilton, the primary architect of the American financial system, likewise wrote, “Nothing can more interest the national credit and prosperity than a constant and systematic attention to husband all the means previously possessed for extinguishing the present debt, and to avoid, as much as possible, the incurring any new debt.”⁵ As far as many of the Founders were concerned, “Public Debt is a Public curse.”⁶

Americans and the world were losing faith in the new nation’s ability to meet its obligations. Veterans began to assume that they would never see their war salaries. They had been given IOUs because Congress and the states lacked the funds to pay them. But by the late 1780s, the war had been over for a few years and the veterans had lost confidence that they would ever see their hard-earned compensation. The humble veterans began selling their government’s promissory notes for a fraction of their value. They needed to eat today, and gave up hope that the United States would repay them tomorrow.

The veterans certainly had good reason for concern. Some politicians believed the nation should extricate itself from its crushing burden by simply refusing to repay, thereby making the loans worthless to the nation’s—irate—creditors. But while many people did not mind bilking the French, such a default would severely harm those veterans and other Americans to whom vast sums were owed.⁷ Further, it would destroy the government’s credibility and make borrowing in the future difficult, to say the least.

Washington had already made up his mind on this issue: he insisted that the country pay down its debt. He approached the matter as a question of honor, explaining, “the path of our duty is plain before us, honesty will be found on every experiment, to be the best and only true policy, let us then as a Nation be just, let us fulfil the public Contracts . . . with the same good faith we suppose ourselves bound to perform our private engagements.”⁸ Only by acting honorably and working to extinguish the debt would the new nation enjoy legitimacy and thrive.

Washington joined with those who advocated that the country repay quickly. “No pecuniary consideration is more urgent, than the regular redemption and discharge of the public debt,” he believed; “on none can delay be more injurious, or an economy of time more valuable.”⁹ He encouraged the nation to act virtuously by “shunning occasions of expence, but by vigorous exertions in time of Peace to discharge the Debts which unavoidable wars may have occasioned, not ungenerously throwing upon posterity the burthen which we ourselves ought to bear.”¹⁰

In the 1780s, however, it appeared that the nation would never be able to dig itself out of its financial hole—no matter how virtuously it behaved. Congress had little means of doing so, since under the Articles of Confederation it lacked the power to control the nation’s spending or collect taxes.

Congress could do little more than implore the states to finance the central government with donations. Congress proposed various methods by which the states might raise revenue towards paying off the national debt, but the states, each unwilling to have its citizens bear the brunt of higher taxes, refused to implement any of these ideas. They had their own debts to handle and their own citizens to care for.

The impasse fed interstate strife. Politicians clashed over whether the states should repay separately or the national government should assume the debt as a united body. While some intellectuals like Jefferson opposed entrusting the national government with such power, other, more down-to-earth Americans criticized the measure as simply unfair—certain southern states had already made great headway in repaying their debt and decried efforts to bail out the northern ones.

The debt controversy threatened to split the United States apart. The situation became so desperate that the Congressional Board of Treasury warned that if the national government could not procure more funds from the states,¹¹ “nothing . . . can rescue [the United States] from Bankruptcy, or preserve the Union of the several States from Dissolution.”¹²

Washington certainly had his opinions, but he largely remained on the sidelines—albeit monitoring the situation intently. Although geographically isolated out on his farm, he was kept apprised of the nation’s struggles by the parade of visitors who came to pay homage. These uninvited guests showed up at his door just about every day, sometimes ten or twenty at a time. Whether they were friends, veterans, or curious strangers, Washington was ever polite. Seeing it as his public duty, he fed and visited with almost every one of them. The retired commander was so inundated, in fact, that he went for over a year-long stretch without a peaceful dinner alone with his beloved wife. In search of some respite, he resorted to posting inadequate signage to his estate, causing many prospective visitors to get lost on the snaking paths through the dark woods that hid Mount Vernon.¹³

While exhausting, these visitors kept Washington abreast of the condition of the republic. Between them, his deluge of letters, and the many newspapers he avidly read, he became “the focus of political intelligence for the new world.”¹⁴ And he was aghast to learn of the nation’s looming economic collapse. But it was not his place to interfere. He was retired. He had successfully done his part to set the nation on its course and now hoped that it would find its own way forward. While Washington passively observed, however, matters only grew worse.

The United States’ fiscal disarray fed rampant inflation. The national currency, called the Continental, became virtually worthless as Congress attempted to print the country’s way out of debt. With so many bills in circulation, the Continentals’ value plummeted and many Americans’ cash savings became worth less than the mattresses that hid them. It became common to describe something of little value as “not worth a Continental.”¹⁵ The currency was such a laughingstock that “barber-shops were papered, in jest, with the bills; and the sailors, on returning from their cruise, being paid off in bundles of this worthless money, had suits of clothes made of it, and with characteristic lightheartedness turned their loss into a frolic, by parading through the streets in decayed finery, which, in its better days had passed for thousands of dollars!”¹⁶

Rather than place blame where due—on the nation’s massive war debt and the states’ refusal to coordinate a response—citizens and leaders alike turned their wrath on merchants and creditors. Even though these shopkeepers and financiers were merely acting rationally when they refused to take payment with the worthless Continentals, they became the scapegoats for public outrage. For example, the Connecticut legislature blasted them as “evil-minded persons, inimical to the liberties of the United States of America,” who had “endeavored to depreciate the bills of credit of this and the said United States.”¹⁷ Reflecting the public anger, Washington likewise lashed out against “monopolizers, forestallers, and engrossers,” describing them as “pests of society” who should be “hanged upon a gallows.”¹⁸

With the national currency crumbling, rather than work together to return to solvency, some states turned to further emissions of their own separate currencies. This drove inflation higher and fractured national unity.¹⁹ It was an economic and political mess, as the sister states not only refused to work together, but also blamed one another like “little jealous, clashing, tumultuous commonwealths.”²⁰ The states’ bickering took on “an ominous likeness to the meetings and resolves which in the years before 1775 had heralded a state of war.” Many ventured that it would not be long before “shots would have been fired and seeds of perennial hatred sown” among the peoples.²¹

Such insolvency and internal turmoil left the country perilously vulnerable to external threats. The weak young nation found itself in a world fraught with aggressors. This was an age when a renewed British assault appeared imminent. The British had already violated their peace treaty with the Americans by retaining troops on the United States’ western frontier for years after the Revolution ended. Britain made it abundantly clear that she was bitterly unwilling to relinquish her interests in America’s lands and many feared that she would soon come to collect her lost colonies. And Britain was not the only threat.

Reports abounded that Spain might prey upon the nation’s weakness to expand her New World empire. The Spanish began aggressively asserting their military might in the region by restricting America’s navigation rights on parts of the Mississippi River, thus impeding the nation’s development of its western frontier. Although humiliated and outraged by these affronts, the nation was too weak to respond. Not only was Congress too broke to pay for a national army, the government could not even fashion a united military front from among the states’ separate militias. Congress simply did not have the power under the Articles of Confederation to protect the nation.

Upon obtaining reports of his country’s deteriorating condition, Washington derided the nation as “little more than a shadow” and Congress as a mere “nugatory body.”²² The country was increasingly helpless as the major European powers licked their lips, hungrily eyeing America’s fertile territory.