a mutiny on board, and more trouble was made
for Franklin. At last they got away, and Landais
went crazy during the voyage, was deposed by his
Bon Homme Richard and Ser apis
TREATY WITH FRANCE 303
officers, and placed in confinement. If the ship
had been lost, it would have been a more tolerable
loss than many for which the ocean is accountable;
but she was not, and Lee got safe ashore to con
tinue his machinations at Philadelphia, and to
publish an elaborate pamphlet against Franklin.
All this story and the correspondence may be read
at length in Mr. Hale s "Franklin in France."
It is entertaining and shows vividly the misery
to which Franklin was subjected in attending to
affairs which were entirely outside of the proper
scope of his office. "It is hard," said he, "that
I, who give others no trouble with my quarrels,
should be plagued with all the perversities of
those who think fit to wrangle with one another."
CHAPTER XII
FINANCIERING
WHETHER the financiering of the American
Revolution is to be looked upon in a pathetic or
in a comical light must depend upon the mood of
the observer. The spectacle of a young people,
with no accumulated capital, engaged in support
ing the charge of a mortal struggle against all
the vast resources of Britain, has in it something
of pathos. But the methods to which this people
resorted to raise funds were certainly of amusing
simplicity. It was not until the appointment of
Robert Morris, in 1781, that a treasury depart
ment came into existence and some slight pretense
of system was introduced into the financial affairs
of the confederation. During the years prior to
that time Congress managed the business matters.
But Congress neither had funds nor the power to
obtain any. It had an unlimited power for con
tracting debts : absolutely no power for collecting
money. It used the former power freely. When
creditors wanted payment, requisitions were made
upon the States for their respective quotas. But
the States were found to be sadly irresponsive;
probably the citizens really had not much ready
FINANCIERING 305
money; certainly they had not enough to pay in
taxes the cost of the war ; no civilized state has been
able to conduct a war, even a small one, in modern
times without using the national credit. But the
United States had absolutely no credit at all. It
was well enough to exclaim " Millions for defense ;
but not one cent for tribute! " This was rhetoric,
not business; and Congress soon found that the
driblets which trickled tardily to them in response
to their demands on the several States would
hardly moisten the bottom of the great exchequer
tank, which needed to be filled to the brim.
Two methods of relief were then adopted, crude,
simple, but likely for a time to be efficient; and
provided only that within that time the war could
be finished, all might go well. One of these
methods was to issue irredeemable paper "money; "
the other was to borrow real money abroad. The
droll part was that both these transactions were
audaciously entered upon by a body which had
absolutely no revenues at all to pledge as security,
which had not a dollar of property, nor authority
to compel any living man to pay it a dollar. A
more utterly irresponsible debtor than Congress
never asked for a loan or offered a promissory
note. For the security of a creditor there was
only the moral probability that in case of success
the people would be honest enough to pay their
debts; and there was much danger that the jeal
ousies between the States as to their proportionate
quotas might stimulate reluctance and furnish
306 BENJAMIN FRANKLIN
excuses which might easily become serious in so
unpleasant a matter as paying out hard cash. At
home Congress could manage to make its paper
money percolate among the people, and could pay
a good many American creditors with it; but
there were some who would not be thus satisfied,
and few European creditors, of course, would
meddle with such currency. So to pay these
people who would have real money Congress soli
cited loans from other nations. It was like the
financiering of a schoolboy, who issues his I O IPs
among his mates, and refers the exacting and
business-like tradesman to his father. France was
cast for the role of father to the congressional
schoolboy for many wearisome years.
The arrangement bore hard upon the Ameri
can representatives, who, at European courts and
upon European exchanges, had the embarrassing
task of raising money. It was all very well to
talk about negotiating a loan; the phrase had a
Micawber-like sound as of real business; but in
point of plain fact the thing to be done was to
beg. Congress had a comparatively easy time of
it; such burden and anxiety as lay upon that body
were shared among many; and after all, the
whole scope of its duty was little else than to vote
requisitions upon the States, to order the printing
of a fresh batch of bills, and to "resolve that the
Treasury Board be directed to prepare bills of
exchange of suitable denominations upon the Hon
orable Benjamin Franklin [or sometimes Jay, or
FINANCIERING 307
Adams, or another], minister plenipotentiary at
the court of Versailles, for - - thousand dollars
in specie. 1 Having done this, Congress had ful
filled its simple part, and serenely waited for
something to turn up.
The plan which seemed most effective was to
send a representative accredited to some foreign
government, and instructed to raise money at once.
Without wasting time by waiting to see whether
he arrived safely, or was received, or was success
ful in his negotiations, the next ship which fol
lowed him brought drafts and bills which he was
expected to accept, and at maturity to pay. Hav
ing thus skillfully shifted the laboring oar into
his hands Congress bestirred itself no further.
Poor Jay, in Spain, had a terrible time of it in
this way, and if ever a man was placed by his
country in a painful and humiliating position, it
was he. He faced it gallantly, but had to be
carried through by Franklin. From first to last
it was upon Franklin that the brunt fell ; he had
to keep the country from financial failure as
Washington had to save it from military failure ;
he was the real financier of the Revolution; with
out him Robert Morris would have been help
less. Spain yielded but trifling sums in re
sponse to Jay s solicitations ; Holland, which was
tried by Adams, was even more tardy and unwill
ing, though towards the end some money was got
there. Franklin alone, at Paris, could tap the
rock and make the waters flow. So upon him
308 BENJAMIN FRANKLIN
Congress sent in an endless procession of drafts,
and compelled him to pay all their foreign bills
and indebtedness ; he gathered and he disbursed ;
to him were referred all the drafts upon Jay and
others, which they themselves could not pay, and
he discharged them one and all. A heavier task
never fell upon any man, nor one bringing less
recognition; for money matters usually seem so
dry and unintelligible that every one shirks in
forming himself about them. We read about the
horrors of the winter camp at Valley Forge, and
we shudder at all the details of the vivid pic
ture. The anxiety, the toil, the humiliation, which
Franklin endured for many winters and many sum
mers in Paris, in sustaining the national credit, do
not make a picture, do not furnish material for a
readable chapter in history. Yet many a man
would far rather have faced Washington s lot than
Franklin s.
I do not intend to tell this tale at length or
minutely, for I could trust no reader to follow
me in so tedious an enterprise; yet I must try to
convey some notion of what this financiering really
meant for Franklin, of how ably he performed it,
of what it cost him in wear and tear of mind, of
what toil it put upon him, and of what measure
of gratitude was due to him for it. It may be
worth mentioning by the way that he not only
spent himself in efforts to induce others to lend,
but he himself lent. Before he embarked for
Philadelphia on his French mission, he gathered
FINANCIERING 309
together all that he could raise in money, some
3000 to 4000, and paid it over as an unse
cured loan for an indefinite period to the Conti
nental Congress.
It is not probable that from any records now
existing the most patient accountant could elicit
any statement, even approximating to accuracy,
of the sums which Franklin received and paid
out. But if such an account could be drawn
up, it would only indicate some results in figures
which would have little meaning for persons not
familiar with the national debts, revenues, and
outlays of those times, and certainly would not at
all answer the purpose of showing what he really
did. The only satisfactory method of giving any
passably clear idea on the subject seems to be to
furnish some extracts from his papers.
The ship which brought Franklin also brought
indigo to the value of 3000, which was to
serve as long as it could for the expenses of the
commissioners. For keeping them supplied with
money later on, it was the intention of Congress
to purchase cargoes of American products, such
as tobacco, rice, indigo, etc., etc., and consign
these to the commissioners, who, besides paying
their personal bills, were sure to have abundant
other means for using the proceeds. Unfortu
nately, however, it so happened that the resources
presented by this scheme were already exhausted.
In January, 1777, a loan of one million livres
had been advanced on a pledge of fifty-six thou-
310 BENJAMIN FRANKLIN
sand hogsheads of tobacco to the Farmers General
of the French revenue; and the rice and indigo
had been in like manner mortgaged to Beaumar-
chais. Congressional jugglery could not quite
compass the payment of different creditors with
the same money, even supposing that the money
came to hand. But it did not; for a long while
no cargoes arrived ; of those that were dispatched,
some were run away with by dishonest ship-mas
ters, some were lost at sea, others were captured
by the English, so that Franklin sadly remarked
that the chief result was that the enemy had been
supplied with these articles for nothing. But he
preserved his resolute cheerfulness. "The destroy
ing of our ships by the English," he said, u is
only like shaving our beards, that will grow again.
Their loss of provinces is like the loss of a limb,
which can never again be united to their body."
When at last a cargo did arrive, Beaumarchais
demanded it as his own, and Franklin at last
yielded to his importunities and tears, though
having no really sufficient knowledge of his right
to it. Later a second vessel arrived, and Beau
marchais endeavored to pounce upon it by process
of law. That one also Franklin let him have.
Then no more came, and this promising resource
seems never to have yielded one dollar for Frank
lin s use.
Already so early as January 26, 1777, it was
necessary to appeal to Thomas Morris, from whom
remittances had been expected on account of sales
FINANCIERING 311
made at Nantes: "You must be sensible how very
unbecoming- it is of the situation we are in to be
dependent on the credit of others. We therefore
desire that you will remit with all possible expe
dition the sum allotted by the Congress for our
expenses." But the commissioners appealed in
vain to this worthless drunkard.
Strange to say, the instructions given by Con
gress to the commissioners at the time of Frank
lin s appointment said nothing about borrowing
money. In view of what he had to do in this
way it was a singular omission; but it was soon
repaired by letters. In March, 1777, Frank
lin writes to Lee : "We are ordered to bor
row 2,000,000 on interest;" also to "build six
ships of war," presumably on credit. In this same
month Franklin wrote a paper, which was widely
circulated in Europe, in which he endeavored to
show that the honesty, the industry, the resources,
and the prospects of the United States were so
excellent that it would really be safer to lend to
them than to England. It was a skillful piece of
work, and its arguments had evidently persuaded
the writer himself; but they did not induce the
money-lenders of the old countries to accept moral
qualities and probabilities as collateral security.
Fair success, however, was soon met with at the
court of France, so that the commissioners had
the pleasure of assuring Congress that they could
safely be depended upon to meet the interest on
a loan of 15,000,000, which by this aid Congress
312 BENJAMIN FRANKLIN
probably would be able to contract for. But that
body had no idea of being content with this!
March 17, 1778, Franklin writes to Lee that they
have been drawn upon for 180,000 livres, to pay
old indebtedness of the army in Canada; also
that other bills have been drawn. The number
and gross amount of these were not stated in
the advices ; but the commissioners were ordered
to "accept them when they should appear." "I
cannot conceive," said Franklin, "what encour
agement the Congress could have had from any
of us to draw on us for anything but that interest.
I suppose their difficulties have compelled them
to it. I see we shall be distressed here by these
proceedings," etc., etc. Congress was composed
of men far too shrewd to await "encouragement"
to draw for money !
July 22, 1778, he wrote to Lovell: "When we
engaged to Congress to pay their bills for the
interest of the sums they could borrow, we did
not dream of their drawing on us for other oc
casions. We have already paid of Congress s
drafts, to returned officers, 82,211 livres; and
we know not how much more of that kind we
have to pay, because the committee have never
let us know the amount of those drafts, or their
account of them never reached us, and they still
continue coming in. And we are now surprised
with drafts from Mr. B. for 100,000 more. If
you reduce us to bankruptcy here by a non-pay
ment of your drafts, consider the consequences.
FINANCIERING 313
In my humble opinion no drafts should be made
on us without first learning from us that we shall
be able to answer them."
Congress could not fairly exact great accuracy
from the drawees of its bills, when it never took
pains to give notice of the facts of the drawing,
of the number of bills drawn, of dates, or amounts ;
in a word, really gave no basis for account-keep
ing or identification. No more helter-skelter way
of conducting business has ever been seen since
modern business methods were invented. The sys
tem, if system it may be called, would have been
aggravating and confusing enough under any con
dition of attendant circumstances; but it so hap
pened that all attendant circumstances tended to
increase rather than to mitigate the difficulties
created by the carelessness of Congress. One nat
urally fancies that a nation deals in few and large
transactions, that these drafts may have been for
inconveniently large sums, but that at least they
probably were not numerous. The precise con
trary was the case. The drafts were countless, and
often were for very petty amounts, much as if a
prosperous merchant were drawing cheques to pay
his ordinary expenses. Further, the uncertainty
of the passage across the Atlantic led to these
bills appearing at all sorts of irregular times;
seconds often came to hand before firsts, and
thirds before either ; the bills were often very old
when presented. Knaves took advantage of these
facts fraudulently to alter seconds and thirds into
314 BENJAMIN FRANKLIN
firsts, so that extreme care had to be taken tc
prevent constant duplication and even triplication
of payments. It would have taken much of the
time of an experienced banker s clerk to keep the
bill and draft department in correct shape. It is
not improbable that Congress lost a good deal of
money by undetected rascalities, but if so the fault
lay with that body itself, not with Franklin.
Amid the harassments of these demands, Frank
lin was much vexed by the conduct of Arthur
Lee and Izard in drawing money for their own
expenses. In February, 1778, each insisted that
he should be allowed a credit with the banker, M.
Grand, to an amount of X2000, as each then
expected to depart on a mission. Franklin reluc
tantly assented, and was then astonished and in
dignant to find that each at once drew out the full
sum from the national account ; yet neither went
upon his journey. In January, 1779, Izard ap
plied for more. Franklin s anger was stirred;
Izard was a man of handsome private property,
and was rendering no service in Paris; and his
requirements seemed to Franklin eminently unpa
triotic and exorbitant. He therefore refused the
request, writing to Izard a letter which is worth
quoting, both from the tone of its patriotic appeal
and as a vivid sketch of the situation :
" Your intimation that you expect more money from
us obliges us to expose to you our circumstances. Upon
the supposition that Congress had borrowed in America
but $5,000,000, and relying on the remittances intended
FINANCIERING 315
to be sent to us for answering other demands, we gave
expectations that we should be able to pay here the in
terest of that sum as a means of supporting the credit of
the currency. The Congress have borrowed near twice
that sum, and are now actually drawing on us for the
interest, the bills appearing here daily for acceptance.
Their distress for money in America has been so great
from the enormous expense of the war that they have
also been induced to draw on us for very large sums to
stop other pressing demands ; and they have not been
able to purchase remittances for us to the extent they
proposed ; and of what they have sent, much has been
taken, or treacherously carried into England, only two
small cargoes of tobacco having arrived, and they are
long since mortgaged to the Farmers General, so that
they produce us nothing, but leave us expenses to pay.
" The continental vessels of war which come to France
have likewise required great sums of us to furnish and
refit them and supply the men with necessaries. The
prisoners, too, who escape from England claim a very
expensive assistance from us, and are much dissatisfied
with the scanty allowance we are able to afford them.
The interest bills above mentioned, of the drawing of
which we have received notice, amount to $2,500,000,
and we have not a fifth part of the sum in our banker s
hands to answer them ; and large orders to us from
Congress for supplies of clothing, arms, and ammunition
remain uncomplied with for want of money.
" In this situation of our affairs, we hope you will not
insist on our giving you a farther credit with our banker,
with whom we are daily in danger of having no farther
credit ourselves. It is not a year since you received
from us the sum of 2000 guineas, which you thought
316 BENJAMIN FRANKLIN
necessary on account of your being to set out immedi
ately for Florence. You have not incurred the expense
of that journey. You are a gentleman of fortune. You
did not come to France with any dependence on being
maintained here with your family at the expense of the
United States, in the time of their distress, and without
rendering them the equivalent service they expected.
" On all these considerations we should rather hope
that you would be willing to reimburse us the sum we
have advanced to you, if it may be done with any pos
sible convenience to your affairs. Such a supply would
at least enable us to relieve more liberally our unfortu
nate countrymen, who have long been prisoners, stripped
of everything, of whom we daily expect to have nearly
three hundred upon our hands by the exchange."
At this same time Franklin wrote to Congress
to explain how it had happened that so large a
sum as 4000 had been allowed to these gentle
men; for he feared that this liberality might
"subject the commissioners to censure." The
explanation was so discreditable to Lee and Izard
that it is charitable to think that there was some
misunderstanding between the parties. 1 The mat
ter naturally rankled, and in May Franklin wrote
that there was much anger against him, that he
was charged with "disobeying an order of Con
gress, and with cruelly attempting to distress gen
tlemen who were in the service of their country."
" They have indeed," he said, " produced to me a re
solve of Congress empowering them to draw . . . for
1 See Franklin s Works, vi. 294.
FINANCIERING 317
their expenses at foreign courts ; and doubtless Congress,
when that resolve was made, intended to enable us to
pay those drafts ; but as that has not been done, and
the gentlemen (except Mr. Lee for a few weeks) have
not incurred any expense at foreign courts, and, if they
had, the 5500 guineas received by them in about nine
months seemed an ample provision for it, ... I do not
conceive that I disobeyed an order of Congress, and
that if I did the circumstances will excuse it. ... In
short, the dreadful consequences of ruin to our public
credit, both in America and Europe, that must attend
the protesting a single Congress draft for interest, after
our funds were out, would have weighed with me against
the payment of more money to those gentlemen, if the
demand had otherwise been well founded. I am, how
ever, in the judgment of Congress, and if I have done
amiss, must submit dutifully to their censure."
Burgoyne s surrender had a market value; it
was worth ready money in France and Spain.
Upon the strength of it the former lent the States
3,000,000 livres; and the like amount was en
gaged for by Spain. But, says Bancroft, "when
Arthur Lee, who was equally disesteemed in Ver
sailles and Madrid, heard of the money expected
of Spain, he talked and wrote so much about it
that the Spanish government, who wished to avoid
a rupture with England, took alarm, and receded
from its intention." l
In February and March, 1779, came demands
from the officers of the frigate Alliance for their
1 Bancroft, Hist. U. S. ix. 480.
318 BENJAMIN FRANKLIN
pay; but Franklin was "neither furnished with
money nor authority for such purposes." It
seemed, however, too hard to tell these gallant
fellows, whose perilous and useful service was in
European waters, that they could not have a
dollar until they should get safely back to the
States; so Franklin agreed to pay for one suit of
clothes for each of them. But he begged them
to be as "frugal as possible," and not make them
selves "expensively fine " from a notion that it was
for the honor of the State, which could be better
promoted in more sensible ways.
May 26, 1779, he complains to the committee
of foreign affairs that, whereas the commissioners
had agreed to find in Paris means of paying in
terest on a loan of 15,000,000, that loan had been
doubled, while, on the other hand, they had been
"drained by a number of unforeseen expenses,"
including "orders and drafts " of Congress. "And
now," he says, "the drafts of the treasurer of the
loans coming very fast upon me, the anxiety I
have suffered and the distress of mind lest I
"hould not be able to pay them, have for a long
time been very great indeed. To apply again to
this court for money for a particular purpose,
which they had already over and over again pro
vided for and furnished us, was extremely awk
ward." One would think so, indeed! So he fell
back on a "general application " made some time
before, and received naturally the general answer
that France herself was being put to enormous
FINANCIERING 319
expenses, which were aiding the States as effi
ciently as a direct loan of money could do. The
most he could extort was the king s guaranty for
the payment of the interest on $3,000,000, pro
vided that sum could be raised in Holland. The
embarrassing fact was that the plea of poverty
advanced by the French government was perfectly
valid. Turgot said so, and no man knew better
than Turgot. He had lately told the king that
even on a peace footing the annual expenditures
exceeded the annual receipts of the exchequer by
20,000,000 livres; and he even talked seriously
of an avowal of national bankruptcy. The events
preceding the French Revolution soon proved that
this great statesman did not exaggerate the ill
condition of affairs. Yet instead of practicing
rigid prudence and economy, France had actually
gone into a costly war for the benefit of America.
It was peculiarly disagreeable to be ceaselessly
appealing for money to an impoverished friend.
Another vexation was found in the way in
which the agents of the various individual States