I have been anxious with respect to your being informed regularly of what is passing here. Many things have happened of which you ought to be acquainted. Our Finances have undergone a considerable change since you left us, particularly with regard to the money or paper bills heretofore emitted for the purpose of carrying on the War. On this Subject though I can explain myself to you, it will be no easy matter for you to give a Satisfactory account to People in Europe, who are entire Strangers to our Paper-Money. And yet this ought to be done to prevent the ill impressions that may be made by the Clamours of Disappointed men, who hoped to accumulate mountains of wealth from our Misfortunes. Congress having before your departure resolved not to emit a greater Quantity of Bills than 200 millions of Dollars and having in order to stop a further depreciation and fix the value of that Sum, settled the mode of redeeming it by an annual Assessment for eighteen years, found themselves under the necessity to call upon the State, to raise by taxes the Sum of 15 millions a month in order to carry on the War: But as the Legislatures were slow in raising the Taxes, and the demands of the Public were pressing, The People found they were sollicited to sell, before the want of money urged them, and consequently foreseeing that Taxes would be great everyone determined to ease himself and make his own particular burden as light as possible by raising the price of the Commodities wanted; The result of this was that the paper depreciated more than ever, and the monthly Assessments when paid in were found to be no way adequate to the Public demands in as much as every thing wanted for the Army was by the month of January raised to Double the nominal Price of what it was in the month of October when you left us. The Merchants and Traders who imported Foreign Articles, and who are always watchful to secure themselves, taking advantage of the Depreciation raised the price of their Commodities to an enormous degree, so that the Commonwealth lay like a ship stranded whose mariners instead of exerting themselves to save her, were wholly employed in securing to themselves as much of the Cargo as possible, Leaving her to the Mercy of winds and waves. In order to supply the wants of the army which could not be provided for by taxes, Congress in the month of Feb[ruar]y. called on the Several States for Specific supplies of Provision and Forage. But before these could be brought in, such advantage was taken of the Public wants which were wholly supplied by purchase on Credit, that the nominal Debt of the Continent was increased almost beyond calculation. Of this you will easily judge when you are informed that in the month of March Commodities were sold in the market of Philadelphia at four times the price they were in the month of September. In short a Continental Dollar was valued at no more than a penny, so that the Depreciation was fluctuating from 60 to 90 for one and nobody knew where it would settle. Upon this our Enemies took courage and flattering themselves that Congress must soon sink under these embarrassments, They set every engine to work to continue and encrease them by counterfeiting the currency, multyplying their Emissaries to decry its credit, tampering with our Army and at the same time prosecuting the war with a greater degree of Vigor than they had done from the commencement of it. To the honor of our Country I must inform you that History cannot produce such Instances of fortitude, patience and perseverance as were exhibited by our virtuous Army. Though exposed to Hunger and Nakedness amidst the rigours of a most inclement winter, They struggled through with unparalled firmness and notwithstanding the tempting bribes and offers of the enemy and the incredible hardships they suffered, The desertions were comparatively few. Congress finding it necessary in order to baffle the designs of our Enemy and curb intestine avarice to adopt more decided Measures, Resolved on the 18th of March to call in by Taxes and burn all the money heretofore emitted to the amount of 200 millions of Dollars in the course of one year, and in lieu thereof to issue ten Millions of new Money, which was to be issued as fast and no faster than the old was brought in, at the rate of 20 of the old for one of the new, and it was resolved that in payment of Taxes gold and Silver should be received at the rate of 40 for one, at which rate also the new money was to be received, by which means its Value was fixed and those who had amassed large quantities of the old paper were disappointed in their hopes of converting it into gold. They proceeded further and fixed the value of Certificates for money loaned from September 1777 to March 1780 rating the Value of the Money on every day between these two periods, that the Lender might receive the full value of the Money lent both in principal and interest and that the Public might not be loaded with a debt for which They received no equivalent. For it was urged with great reason as contrary to every rule of right and Justice, that the Landed property which is the principal object of Taxation should be loaded with the burden of paying off a certificate for instance of two hundred dollars, which was procured with the Price of three bushels of wheat and less, with that number of Silver dollars which are in reality worth from 20 to 100 times the Value of the money lent; These regulations were deemed so just and equitable that the People acquiesced and the States have generally enacted Laws conformable thereto. By these means the debt incurred by a war of 6 years was fixed at about one or two and twenty millions of dollars. A war which has cost our Enemies upwards of Sixty Millions Sterling. I ought to have observed to you that of the ten millions to be issued in lieu of the 200 Millions which were ordered to be paid in by Taxes and burned, Congress assigned six millions to the States to enable them to purchase the specific articles required of them, reserving four millions for paying the army and defraying the Expences of transportation and other incidental charges. But while these measures were in agitation and before they could be carried into execution, our Enemies pressing on the war with vigor, Congress found themselves exceedingly straitened for want of Money, and were from Necessity forced upon a measure, which I fear will give you and our other ministers in Europe some Trouble, I mean that of drawing Bills. But here I would just observe that if old established Nations populous, rich and Powerful, whose governments are fixed, whose revenues are settled, who have armies raised, and fleets equipped, whose Towns are fortified, and whose arsenals and Magazines are stored with implements and necessaries for war. If Nations such as these find themselves under difficulties for want of money by one or two years war against a nation weakened and greatly exhausted; What wonder, if a young Commonwealth, whose Inhabitants are poor, scattered over a large extent of Country and just emerging from the difficulties of settling a wilderness, having no governments established, no revenues but the voluntary contributions of the People, and who being without arms, without ammunition, or Military Stores were forced into a War with one of the most powerful Nations of the World, should after a War of 6 years find itself embarrassed in its finances and under the necessity of applying for aid to other Nations whose interest it is to humble the Power with which it is contending? If England alone, unassisted by a single Ally, can give such annoyance to the United Arms of France Spain and America, what must be the consequence if for want of a little assistance in Money She is suffered to triumph over the United States and again Subjugate them or a part of them to her Yoke?

To our Want of Money may chiefly be ascribed to the Enemy’s Success in Carolina. For although Congress had timely Notice of Sir Henry Clintons intentions last fall and notwithstanding his tedious passage and the slowness of his proceedings after his arrival in Carolina owing to the Loss he had sustained by a violent Storm on his voyage, yet for want of money Congress could not forward with Sufficient dispatch the succours intended and consequently the communication between Charlestown and the Country was cut off and the Enemy had time by regular approaches to force a Surrender. After this Gen[era]l Gates was sent to take the Command to the Southward. The States of Virginia and North Carolina furnish’d a very considerable body of Militia, with which joined to the Maryland and Delaware Regulars consisting of about 1200 men who were on their march to the Southward and had been destined for the relief of Charles Town, He began to move forward. But having no Tents to cover his men, no magazines of provisions laid up and no money to procure either, and the Country thro’ which he marched being thinly inhabited, he was exposed to incredible difficulties and hardships. Having entered South Carolina and broken up the Enemy’s Posts on the River Pedee, as his men were still without Shelter and the rainy season was approaching, in which his troops must suffer greatly for want of Tents, encouraged by sundry successes against the Enemy’s out posts, he was induced to march towards Cambden with the hopes of driving the Enemy from thence and establishing his head Quarters in that Village, where he would have been able to put his Troops under Cover and supply them plentifully with Provisions, and confine the Enemy to the low Country in which Case they would have exposed their army in the sickly Season to a loss by Death equal to a defeat. Unfortunately he failed in the attempt. The Battle of the 16th of August, which you have a particular acc[oun]t. of in the Public papers, broke up the Army he had collected and forced him back into N.[orth] Carolina. The Maryland and Delaware regulars acquired great honor in that Action and had they been properly supported by the Militia would in all probability have made it a glorious day for America. The Character of the Gen[era]l has suffered by his Rapid flight, and a Court of enquiry is ordered on his Conduct. The check however which the Enemy received from the Regulars who did not amount to more than a thousand in the Action prevented them from improving the victory they had gain’d. And the Spirited conduct of the Militia immediately after the Action, a party of whom under Colonel Marian rescued 150 of our regulars who had been taken Prisoners on the 16th and captivated the escort that was conducting them to Charlestown, and another Party of About 200 under Col. Williams on the 19th of Augt. engaged between four and five hundred British killed 60 on the field and took 70 Prisoners. This Spirited Conduct with some other successful enterprises of less note has reanimated our People and disheartened the enemy, so that the Consequences of the Defeat are not so distressful as might have been apprehended. The Armies in this Quarter have hitherto had an inactive Campaign. The arrival of the first division of the French fleet and army gave us sanguine hopes of regaining N. York, But the detention of the Second division and the Superiority of the British fleet disappointed our hopes and expectations; The fleets in west Indies seem to have spent the Summer in Manoevring.

Upon the Junction of the French and Spanish fleets, They directed their course for Jamaica and had they improved the opportunity it is the general opinion they would have succeeded and subdued that Island without any difficulty, and the Garrisons were chiefly withdrawn and there was no fleet to guard the Harbour. But by some unaccountable delay they suffered a fleet under Walsingham to get there before them and a reinforcement of Troops to be thrown into the Island which as the Hurricane season was coming on rendered the attempt impracticable, and secured it at least for the Present. Hereupon the Combined fleet seperated, The Spanish steered for the Havanah and the French put into Cape Francois. The Count de Guichen after some   left the Cape, directed his course notherly and coasted along our Shores. This it is supposed alarmed Rodney to that degree that anxious for the safety of the fleets and army at N. York He immediately left the Windward Islands and with a Fleet of 14 or 15 Sail of the Line and some Frigates steer’d for that Place where he now is. n. b. The Remainder relative to Arnolds Conspiracy is taken out for the Memoirs of the Life of B. F.

The late Providential Discovery of Arnold’s Plot, which appears to have been for a considerable time in agitation has induced a belief that Rodney had something farther in view than merely counteracting the design of the Comte de Guichen.

In a Controversy and revolution such as this, where former Friendships and Intimacies subsisted between the Contending Parties, and where men of upright intentions took different sides, and men of all characters were engaged in the Contest, it would not have been strange or uncommon if Conspiracies had been formed; but to the honor of the American Army Arnold is the first, and it is believed the only American Officer, who has during this war entered into a conspiracy to betray his Country. You know the Character of the man; He was Brave but avaritious, fond of Parade and not very scrupulous about the means of acquiring money to defray the Expences of it. He had married a young woman who had been distinguished by Gen[era]l Howe’s Meschianze Knights, and her Father was not remarkable for his attachment to the American cause. The Expensive manner in which Arnold lived in Philadelphia, reduced his Finances, and the acc[oun]ts he exhibited against the Public under-went a scrutiny at the Board of Treasury, not much to the advantage of his honor and honesty; which, joined to his disappointment in the Case of the Active and the result of the Court martial instituded on the Complaint of the Council of Pennsylvania, soured his temper and rendered him a fit Object for Clintons views. By Letters found among his private Papers it appears that Capt. André one of Sir H. Clintons aids, had commenced a correspondence with Mrs. Arnold in 1779, under pretence of supplying her with Milinary; whether it was continued till it was ripined into the Plot of betraying west Point into the hands of the Enemy, I will not undertake to say; but that the Scheme had been sometime in agitation appears evidently from this; that while the Enemy were making preparations for executing their purpose, and giving out that their design was against Virginia, The same reports were circulated in Lord Cornwallis’s Camp in S.[outh] Carolina, and measures were taken to make us believe he meant to second the Expedition, by marching through North Carolina and forming a Junction with Sir Henry on his arrival in Virginia. At this time Rodney arrived at N. York, and it is conjectured the design was, as soon as they had gained possession of West Point and cut off the Communication between the Western and Southern States, to turn their whole force against the French Fleet at Rhode Island. This it is true is but conjective; but it must be confessed the Object was great, and had Rodney succeeded, he would have finished the year with as much éclat as he began it. The Providential discovery of the Plot, blasted the Scheme of our Enemies. The following specimen of American Poetry well describes the popular feeling on the occasion.