Conceived in Liberty (271 page)

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Robert Morris’ zeal to pay government debts stopped short of paying the exploited Continental soldiery, and his refusal to pay them any salaries in 1781–82 impelled the states to continue assuming the burden. Morris proved far more interested in paying his administrative personnel in order to build up a loyal bureaucracy. He also displayed great interest in repaying, in specie, large sums due to his former business partners, William Bingham and John Rorss. In this, he presumed to pick and choose among all the various accumulated claims on the central government.

Until a federal taxing system could be established by constitutional amendment, however, the conservatives had to confine themselves to establishing a federal taxing power within the Confederation framework. That power, after all, was the critical linchpin of the entire counterrevolutionary program. The haphazard requisition system, leaving power in the hands of the several states, could never supply the firm basis for centralized sovereignty.

In early 1781, they proposed a federal “impost,” or import duty, of 5 percent on all goods imported into the U.S. The import revenue was to go to repay interest and principal on the federal debt contracted during the Revolution, both domestic and foreign. The impost power was to continue as long as there was a public debt, i.e., permanently. The states were asked to agree to this power as “vested” in Congress; implicit was to be the collection of this tax by federally appointed collectors. The impost would only yield about $500,000 a year, no more than $1,000,000 in peacetime, and this did not suffice to pay even the interest on the public debt that Morris had assumed before the end of the war. But Morris envisioned it as an entering wedge to be eagerly followed by taxes on polls, property, and commodities. Indeed, Morris considered this impost, proposed and adopted by Congress before his accession to office, the key to the success of his entire program. Referring to the impost, he declared, “The political existence of America depends on the accomplishment of this plan.”

The impost concept had previously been proposed in Congress by Gouverneur Morris and by none other than Thomas Burke, who by 1780
had shifted drastically rightward; but the 1781 plan was basically steered through Congress by Robert R. Livingston and John Sullivan of New Hampshire, It passed Congress on February 3, 1781. Originally, some conservatives wanted to present the impost plan as a simple revenue measure which would become effective after ratification by the legislatures of nine states. But it was clear to the dullest that the creation of a federal taxing power was a fundamental amendment to the Articles and therefore had to be ratified by every state.

The Right, firmly in control of every state, was optimistic; and Morris threatened, bullied, and cajoled the state legislatures. He pulled out every stop. First, the tax was supposedly absolutely essential to obtain foreign loans, and therefore for winning the war. With the war over except for the formalities, his harangues reached the height of absurdity in early 1782 as he ranted that he “who opposes the grant of such revenue... labors to continue the war, and, of consequence, to shed more blood, to produce more devastation, and to extend and prolong the miseries of mankind.”
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He was embarrassed by obtaining foreign loans without the tax, but he relieved his embarrassment simply by keeping information of the French loan from the states in order to keep up the pressure for the impost.

When the war argument had become nonsensical to everyone, he shifted his tune to bellow about the sacredness of the public debt and the payment of the creditors. He went so far as to refer to the existence of a large public debt as an “inestimable jewel.” So sacred did the cynical Morris regard the public debt contract that he deliberately stopped all interest payments on federal loan certificates in 1782 in order to prod the public creditors into the pressure campaign we have noted at the end of the last chapter. He exulted to Benjamin Franklin about his “well-grounded expectation that the claims of the public creditors would induce the states to adopt the impost.”

Cajolery, threats, pressure—including sending teams of congressmen to persuade state legislatures—joined to tight conservative control of the politics of the country, drove the impost through all the states except one by the autumn of 1782. Only Rhode Island remained, and it seemed inconceivable that this little state could refuse to ratify when all the others had agreed.
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Furthermore, Rhode Island Congressman Gen. James M. Varnum was one of the leaders of the nationalists, and he and his fellow conservative, Congressman Daniel Mowry, had been in control of the politics of that state. Congress confidently demanded an immediate decision
from Rhode Island, and Morris declared that the impost “may be considered as being already granted.”

The left was demoralized, fragmented, its leadership ousted or gone; there seemed to be no force in the entire country that could stop the Nationalist-conservative juggernaut. Even Tom Paine had already literally sold out radical principles by secretly hiring out his eloquent and renowned pen to conservative monied interests, first to the briber and master French intriguer La Luzerne, and then to the land speculators. Almost miraculously an unknown David to “slay” the Philistine Morris and his well-constructed Nationalist machine was somehow found: David Howell of Rhode Island.

A political upheaval in Rhode Island in the spring of 1782 had ousted General Varnum and his colleagues from the Continental Congress and replaced them by liberals allied with commercial interests in Providence. The war and British invasion had all but wrecked Newport and shifted its prosperity to Providence, now the center of Rhode Island trade; and for its prosperity this basically entrepôt commerce required freedom of trade unhobbled by a tariff. Furthermore, the merchants and liberals sensibly saw no reason why Rhode Island trade had to be penalized and crippled in order to pay public creditors from other states. David Howell, leader of the liberals, was a professor at Brown University and he was chosen for Congress along with his Providence colleagues, Dr. Jonathan Arnold and John Collins.
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Upon arriving at Philadelphia in early June, Howell began virtually a one-man campaign against the impost, and attacked other centralizing measures as well. Emboldened by his efforts, the Rhode Island legislature postponed considering the impost in early September, leading the Congress to make its peremptory demand for Rhode Island’s acceptance. At that point, Howell and Arnold advised the state legislature to reject the impost which, if granted, would bring about a huge permanent federal machine, with ever larger expenditures and taxes. Bureaucrats would multiply—“a numerous train of officers concerned in the collection and after management of the revenue, the tribes of half-pay officers, pensioners and public creditors....” This program, eloquently warned the two Rhode Island delegates, would indeed complete “the bond of Union,” in the favorite phrase of Morris and his supporters. But “we will add the yoke of tyranny fixed on all the states, and the chains riveted.” They reminded the Rhode Island legislature that the object of the seven years
of revolution “has been to preserve the liberties of the country, and not to assume into our own hands the power of governing tyrannically.”

To counter the Howell forces, Morris and his group organized a heavy pressure barrage upon Rhode Island. Thus, with only the knowledge of Livingston, Washington, and Gouverneur Morris, Robert Morris secretly hired Tom Paine to write articles attacking Rhode Island opposition to the impost. The conservatives organized a hysterical campaign of vilification of Howell, which led to his censure by Congress (unanimously but for Rhode Island) for disclosing important facts about the progress of foreign loans that Congress had deliberately kept secret in order to build up pressure for an impost.

Just as Congress prepared to send a commission to Rhode Isand to put pressure upon it, it received the stunning news at the end of December that Virginia had repealed its ratification of the impost. The critical plank in the nationalist program—the federal impost—had failed. The repeal by the Virginia legislature occurred so quickly and quietly that such conservative leaders as Edmund Randolph and Gov. Benjamin Harrison could not understand what had happened. But with the English invasion of Virginia over, an impost passed as an emergency war measure had now been considered more soberly. As in the case of the public crediters, Morris’ arguments had backfired, and Virginia balked at allowing federal tax officials levy a tax that could be retained permanently. The impost plan was dead, and the right-wing juggernaut had been stopped, almost at the last minute.

*
See Ferguson,
The Power of the Purse,
p. 147.

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Georgia, too, had not yet agreed; but Georgia had been until recently occupied by the British. Under restored royal government, and unrepresented in Congress, it did not count.

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It is characteristic of a man such as Howell that he romantically signed his able anti-impost articles in the
Providence Gazette
in the spring of 1782, “A Farmer,” and characteristic of all too many historians to be misled into thinking that the Rhode Island anti-tariff movement was basically “agrarian.” See Jackson Turner Main,
The Antifederalists: Critics of the Constitution. 1781–1788
(Chapel Hill, N.C.: University of North Carolina Press, 1961), p. 88.

The conservatives would not simply give up and abandon their dreams of centralized rule. If the peaceful road of passing an impost was blocked, then more drastic means would have to be found. Moreover, the right knew that it was pressed for time; soon the war would be over in all formality, and the cover of the war effort could no longer be used as a prop for centralizing government power. Thus, both Robert and Gouverneur Morris saw that peace would be fatal to their hopes of greatly expanding federal power. To the conservatives, it appeared to be now or never. One solution would have been a convention for a new constitution; and Hamilton and Schuyler had already pushed a recommendation for such a convention through the New York legislature in mid-1782. But there was scarcely time for such a drive.

The conservatives found their immediate opportunity in rising discontent among the officers of the Continental Army. Thanks to Washington’s drive for a conventional, disciplined army, the radical principles of a democratic army were vitiated, and an officer caste, highly paid in relation to the common soldier, was established during the war. The officers longed for the standard European system of half-pay pensions for life after the war; and in the fall of 1780, the triumphant conservatives in Congress, eager to establish an officer caste and a permanent standing army as an integral part of their nationalist plans, promised half-pay for life to the officers. But the states, more influenced by the radical hostility to the military, began to balk, and Congress, too, showed no signs of carrying through its promise. Time was also getting short for the officer caste, for peace would bring demobilization, weakening the potential counter-revolutionary
pressure that the army might exert. It was now or never for the officers, and their aims now coincided with those of the right.

A delegation of three army officers, headed by Gen. Alexander McDougall, submitted the officers’ petition to Congress in early January 1783. The officers demanded payment of arrears, and, above all, half-pay for life, actuarially commuted into a payment of six years’ full salary. Otherwise, they warned, “fatal consequences” would follow. Congress, led by antimilitarist New England, rejected the proposal, but while in the capital the delegates conferred with the leaders of the Right: the Morrises, James Wilson, and Alexander Hamilton, now a member of Congress. These persuaded the officers to unite with the public creditors to try to obtain a centralized government with the power to tax and then to pay their claims. Robert Morris warned the officers that their demands—so useful to his schemes—must be made solely upon the federal government and
not
be referred back to the states. Generals McDougall and Knox, and Gouverneur Morris, spread the word of the new unity of the vested interests in federal government claims, and discreet hints began to circulate of an army coup, should Congress not capitulate. Arthur Lee, acutely worried, wrote to his fellow antimilitarist Samuel Adams that “the terror of a mutinying army is played off with considerable efficacy.” He reported also that unwelcome memories were being awakened of Cromwell’s counterrevolutionary coup during the English Revolution, when he and his army crushed Parliament for attempting to disband the army without meeting its demands for pay. Gouverneur Morris exulted to John Jay, “The army has swords in their hands. You know enough of the history of mankind to know much more than I have said....” Or, as he explicitly and revealingly added, “You and I, my friend, know by experience, that when a few men of sense and spirit get together, and declare that they are the authority, such few as are of a different opinion may easily be convinced of their mistake by that powerful argument the halter.”

With opinion in Philadelphia sufficiently alerted, it now became necessary to whip up the army. On March 8, Col. Walter Stewart, holder of a large amount of public securities and acting as an agent for Morris and his cohorts, arrived at Newburgh, where the Continental Army was stationed. Soon it was widely rumored that the army would refuse to disband, and, standing with the public creditors and aided by Morris, it would revolt against Congress. Asked by his close friend William Duer how the troops would be fed if they launched a coup against Congress, and in a sense against their country, Morris smugly answered, “I will feed them.”

On March 10, 1783, the conspirators decided to move. John Armstrong, Jr., an aide to General Gates and the young son of a fiery Pennsylvania radical, circulated his explosive “Newburgh Address.” In the address, he attacked the idea of moderation, and called for an officers’
meeting for March 11, to draw up a last remonstrance to Congress, a remonstrance which would be followed by an army revolt. And so the conservative conspirators began to put their plans for a military coup into effect.