I received and read with Pleasure your Thoughts on American Finance, and your Scheme of a Bank. I communicated them to the Abbé Morellet, who is a good Judge of the Subject, and he has translated them into French. He thinks them generally very just, and very clearly exprest. I shall forward them to a Friend in the Congress. That Body is, as you well suppose not well skilled in Financing. But their Deficiency in Knowledge has been amply supply'd by Good Luck. They issued an immence Quantity of Paper Bills, to pay, clothe, arm & feed their Troops, & fit out Ships, and with this Paper, without Taxes for the first three Years, they fought & baffled one of the most powerful Nations of Europe. They hoped notwithstanding its Quantity to have kept up the Value of their Paper. In this they were mistaken. It depreciated gradually. But this Depreciation, tho' in some Circumstances inconvenient, has had the general good and great Effect, of operating as a Tax, and perhaps the most equal of all Taxes, since it depreciated in the Hands of the Holders of the Money, and thereby taxed them in proportion to the Sums they hold and the Time they held it, which is generally in proportion to Mens Wealth. Thus after having done its Business the Paper is reduced to about a sixtieth Part of its original Value. Having issued 200 Millions of Dollars, the Congress stopt, and supplyed themselves by borrowing. These Sums were borrowed at different Periods during the Progress of the Depreciation. Those who lent to the Publick, thereby fixed the Value of the Paper they lent, since it is to be repaid in silver according to its Value at the Time of the Loan. The rest went on Depreciating; and the Depreciation is at length only stopt by the vast nominal Sums called in easily by Taxes, and which will be by that means destroyed. Thus so much of the Publick Debt has been in this Manner insensibly paid that the Remainder, which you desire to know, does not exceed six Millions sterling. And now they are working with new Paper exprest to be equal in Value to silver, which they have made to bear Interest, and have provided such Funds to pay that Interest, that probably its original Value will be supported. In the meantime the Vigour of their Military Operations is again revived; and they are now as able, with respect to Money, to carry on the War, as they were at the Beginning, and much more so with regard to Troops Arms & Discipline. It is also an encreasing Nation, Sixty thousand Children having been born annually in the United States since the Beginning of the War; while their Enemies are said to be diminishing.

I am, Sir, Your most obedient and most humble Servant B F.