George Washington's Maxims on Finance

From The Maxims of Washington; Political, Social, Moral and Religious., Collected and Arranged by John Frederick Schroeder, D.D. and published by D. Appleton and Company in 1854


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5. Finance

Public Credit


As a very important source of strength and security, cherish Public Credit.


One method of preserving it is, to use it as sparingly as possible; avoiding occasions of expense, by cultivating peace; but remembering also, that timely disbursements to prepare for danger, frequently prevent much greater disbursements to repel it; avoiding, likewise, the accumulation of debt, not by shunning occasions of expense, but by vigorous exertions, in time of peace, to discharge the debts which unavoidable wars may have occasioned, not ungenerously throwing upon posterity the burden which we ourselves ought to bear.


The execution of these maxims belongs to your representatives; but it is necessary that public opinion should co-operate. To facilitate to them the performance of their duty, it is essential that you should practically bear them in mind, that towards the payment of debts there must be Revenue; that to have Revenue, there must be Taxes; that no Taxes can be devised, which are not more or less inconvenient and unpleasant; that the intrinsic embarrassment,


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inseparable from the selection of the proper objects, (which is always a choice of difficulties,) ought to be a decisive motive for a candid consideration of the conduct of Government in making it, and for a spirit of acquiescence in the measures for obtaining Revenue, which the public exigencies may at any time dictate [1796.]




An adequate provision for the support of the Public Credit, is a matter of high importance to the national honor and prosperity [1790.]






The country does not want resources, but we the means of drawing them forth. [1780.]




No nation will have it more in its power, to repay what it borrows, than this. Our debts are, hitherto, small. The vast and valuable tracts of unlocated lands, the variety and fertility of climates and soils, the advantages of every kind which we possess, for commerce, insure to this country a rapid advancement in population and prosperity, and a certainty, its independence being established, of redeeming, in a short term of years, the comparatively inconsiderable debts it may have occasion to contract. [1781.]




The concurrence of virtuous individuals, and the


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combination of economical societies, to rely, as much as possible, on the resources of our own country, may be productive of great natural advantages, by establishing the habits of industry and economy. [1789.]






The system proposed by Congress, being the result of the collected wisdom of the continent, must be esteemed, if not perfect, certainly the least objectionable of any that could be devised. And if it shall not be carried into immediate execution, a national bankruptcy, with all its deplorable consequences, will take place, before and different plan can possibly be proposed and adopted. [1783.]




Let us, as a nation, be just; let us fulfil the public contracts, which Congress has undoubtedly a right to make, for the purpose of carrying on the war, with the same good faith we suppose ourselves bound to perform our private engagements.




I entertain a strong hope, that the state of the nation finances is now sufficiently matured to enable you (The House of Representatives) to enter upon a systematic and effectual arrangement, for the regular redemption and discharge of the public debt, according to the right which has


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been reserved to the Government. No measure can be more desirable, whether viewed with an eye to its intrinsic importance, or to the general sentiment and wish of the nation. [1792.]




No pecuniary consideration is more urgent, that the regular redemption and discharge of the public debt. On none can delay be more injurious, or an economy of time more valuable. [1793.]






Posterity may have cause to regret, if, from any motive, intervals of tranquillity are left unimproved for accelerating this valuable end. [1796.]






In two hours after the books were opened by the Commissioners, the whole number of shares was taken up, and four thousand more applied for, than were allowed by the institution; besides a number of subscriptions which were coming on. This circumstance was not only pleasing, as it exhibited as unexpected proof of the resources of our citizens. [1791.]


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That no man can be more opposed to State Funds, or local prejudices, than myself, the whole tenor of my conduct has been continual evidence of. No man, perhaps, has had better opportunities, to see and feel the pernicious tendency of the latter than I have. [1783.]






I am well aware, that appearances ought to be upheld, and that we should avoid, as much as possible, recognizing, by any public act, the depreciation of our Currency.


But, I conceive, this end would be answered, as far as might be necessary, by stipulating (with the British General Howe) that all money payments should be made in gold and silver, being the common medium of commerce among nations, at the rate of four shillings and sixpence for a Spanish milled dollar; by fixing the price of rations on an equitable scale relatively to our respective circumstances; and by providing for the payment of what we owe, by sending in provision and selling it at their market.




It is our interest and truest policy, as far as it may be practicable, on all occasions, to give a currency


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and value to that which is to be the medium of our internal commerce, and the support of the war. [1778.]




Can we carry on the war much longer? Certainly not, unless some measures can be devised and speedily executed, to restore the credit of our Currency, restrain extortion, and punish forestallers.


Unless these can be effected, what funds can stand the present expenses of the army? And what officers can bear the weight of prices that every necessary article has got to?


A rat, in the shape of a horse, in not to be bought as this time, for less than two hundred pounds; nor a saddle, under thirty or forty; boots, twenty; and shoes and other articles, in like proportion. How is it possible, therefore, for officers to stand this, without an increase of pay? And how is it possible to advance their pay, when flour is selling, at different places, from five to fifteen pounds per hundred weight, hay from ten to thirth pounds per ton, and beef and other essentials, in this proportion? [1778.]




It is well worthy the ambition of a patriot statesman, at this juncture, to endeavor to pacify party differences, to give fresh vigor to the springs of Government, to inspire the people with confidence, and above all, to restore the credit of our Currency. [1779.]


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The sponge, which some gentlemen have talked of using, unless there be a discrimination and proper saving clause provided, (and how far this is practicable I know not,) would be unjust and impolitic in the extreme.


Perhaps I do not understand what they mean, by “Using the sponge.” If it be, to sink the money in the hands of the holder of it, and at their loss, it cannot in my opinion stand justified upon and principles of common policy, common sense, or common honesty.


How far a man, who has possessed himself of twenty paper dollars, by means of one, or the value of one, in species, has a just claim upon the public, for more than one of the latter, in redemption, and in that ratio according to the periods of depreciation, I leave to those who are better acquainted with the nature of the subject, and have more leisure than I have to discuss.






Every other effort is in vain, unless something can be done to restore its credit.


Congress, the States individually, and individuals of each State, should exert themselves to effect this great end. It is the only hope, the last resource, of


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the enemy. Nothing but our own want of public virtue can induce a continuance of the war.


Let them once see, that, as it is in our power, so it is our inclination and intention, to overcome this difficulty; and the idea of conquest, or hope of bringing us back to a state of dependence, will vanish like the morning dew. They can no more encounter this kind of opposition, than the hoar-frost can withstand the rays of the all-cheering sun. The liberty and safety of this country depend upon it. The way is plain; the means are in our power. But it is virtue alone that can effect it. [1779.]




To make and extort money, in every shape that can be devised, and at the same time to decry its value, seems to have become a mere business and an epidemical disease, calling for the interposition of every good man and body of men. [1778.]






The depreciation has got to so alarming a point, that a wagon-load of money will scarcely purchase a wagon-load of provisions. [1779.]


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Nothing, I am convinced, but the depreciation of our currency, has fed the hopes of the enemy, and kept the British arms in America to this day. They do not scruple to declare this themselves; and add, that we shall be our own conquerors.


Cannot our common country, America, possess virtue enough to disappoint them? Is the paltry consideration of a little pelf to individuals, to be placed in competition with the essential rights and liberties of the present generation, and of millions yet unborn? Shall a few designing men, for their own aggrandizement, and to gratify their own avarice, overset the goodly fabric we have been rearing at the expense of so much time, blood, and treasure?


Shall we at last become the victims of our own lust of gain? Forbid it, Heaven! Forbid it, all and every State of the Union, by enacting and enforcing efficacious laws for checking the growth of these monstrous evils, and restoring matters, in some degree, to the state they were in at the commencement of the war! [1779.]






This tribe of black gentry work more effectually against us, than the enemy’s arms.


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They are a hundred times more dangerous to our liberties. and the great cause we are engaged in. [1779.]




It is much to be lamented, that each State, long ere this, has not hunted them down, as pests to society, and the greatest enemies we have to the happiness of America.


I would to God, that some one of the most atrocious in each State, was hung upon a gallows, five times as high as the one prepared for Haman.


No punishment, in my opinion, is too great for the man who can build his greatness upon his country’s ruin. [1778.]

(The reference to Haman is a reference to the mythical character of the Book of Esther, the Persian who  would have killed all of the jews. While we do not esteem Esther to be a canonical book of Scripture, we can appreciate Washington's reference in connection with the "tribe of black gentry", since it clearly shows whom he was talking about! - WRF)




Let vigorous measures be adopted; not to limit the prices of articles, for this, I believe is inconsistent with the very nature of things, and impracticable in itself; but to punish Speculators, Forestallers, and Extortioners, and, above all, to sink money by heavy taxes, to promote public and private economy, and encourage manufactures.


Measures of this sort, gone heartily into by the several States, would strike at once at the root of all our evils, and give the coup de grace to the British hope of subjecting this continent, either by their arms. The former, they acknowledge, are unequal to the task; the latter, I am sure, will be so, if we are not lost to every thing that is good and virtuous. [1779.]


An Early American Dollar Bill





It is obvious that George Washington was speaking of the counterfeiting of the colonial currency by the British.


“A Brief History of Counterfeiting Money in America (in part):


“The very first paper money in America was printed at the start of the Revolutionary War in 1775. The ‘continentals’ as they were called, were printed by the First Continental Congress to finance the cost of the war. The early bills were very crude and easy to counterfeit. This was due largely to the fact that the currency was not standardized and each separate colony had their own version of the paper bills. In most cases, continentals did not have complicated engraving patterns like modern money does. They were often only printed on one side which made reproduction somewhat easy. Counterfeiters would simply copy the design pattern onto a woodcut press and print identical bills.

“During the Revolutionary War, the British government commissioned counterfeiters to reproduce continentals in large quantities and pass them off into American circulation. The ultimate goal was to depreciate the value of the money and cause the colonies to go bankrupt. The plan nearly succeeded as American paper currency depreciated so much that it was virtually worthless by the end of the war. This is where the phrase ‘not worth a continental’ came from, originating from disgruntled American soldiers who were paid with the worthless bills.”