To the King Only.
Sire, ー When considerations of State impel you to extend a helping hand to the Americans, Policy requires that your Majesty proceed with such caution, that aid secretly conveyed to America may not become in Europe a brand to kindle strife between France and England. Above all, it is the part of prudence to be certain that the money cannot possibly pass into other hands than those of your own ch9ice. Moreover, since the present state of the finances does not at once permit of as great an expenditure as events seem to require, it is my duty, Sire, to submit to your judgement the following plan, having for its principal object, under the semblance of a purely commercial affair, to remove all suspicion that your Majesty or your Council are at all interested in the matter.
Another advantage of this plan is that your Majesty's Council can easily, and at a glance, follow the money throughout all its changes in the course of trade, from the generous hand of the giver to the grateful hand of the receiver, without a fear of its diversion or loss through dishonest agents.
But the principal advantage of this plan is, that it increases the prestige and maintains the continuity of your aid to such a degree, that by multiplying this money by its increase, a single million enhanced by being again put in circulation produces the same results in favor of the Americans as if your Majesty had actually paid out nine millions for their benefit. This requires further explanation.
Finally, this plan, in execution, unites with many other advantages, the power of retarding or accelerating the course of these supplies as your prudence may dictate, and according as the situation of the Americans becomes more or less pressing, with the result that these aids, wisely administered, will serve not so much to terminate the war between America and England, as to sustain and keep it alive to the detriment of the English, our natural and pronounced enemies.
Besides, should your Majesty in pursuance of this important object be obliged to increase the amount, it is certain that every million spent by you to enable the Americans to defend their soil, will cost the English 100 millions, if they persevere in going 2,000 leagues from home to attack them. In other words, to sacrifice a million in order to occasion a loss of 100 millions to England, is precisely the same thing as advancing a million to gain ninety-nine millions; and, in a calculation of chances throughout the longest reign, it is impossible, Sire, that you could ever find another opportunity to make a less expensive, more practical or greater gain.
Let us consider the details of the scheme. The unvarying impression of this affair to the majority of the Congress, should be the delusion, that your Majesty has nothing to do with it, but that a Company is about to entrust a certain sum to the prudence of a trusted agent, to furnish continuous aid to the Americans by the promptest and surest methods, in exchange for returns in the shape of tobacco. Secrecy is the essence of all the rest.
But the two vital points of the operation are, first, the ease with which your Majesty may obtain as much power as you wish, at a moderate price, and, second, the impossibility of the Fermiers-Généraux now obtaining tobacco at any price whatever. Admitting this, I would proceed as follows:
Your Majesty will begin by placing one million at the disposal of your agent, who will style himself Roderique Hortalez. and Company, this being the signature and title of the firm under which I have agreed to conduct the entire business. One half of this sum, changed into moidores or Portuguese pieces, the only foreign money that passes in America, will be immediately forwarded thither; for it is necessary that the Americans should have a little gold at once, to put in circulation their own paper money which, lacking this impetus, is likely to become valueless and stagnant. It is the leaven that must be poured on the heavy dough to make it rise and properly ferment.
From this half million, no other benefit can be derived than its return in the form of Virginia tobacco which the Congress ought to furnish to the Firm of Hortalez, the Ferme-Général having previously agreed with the latter to purchase the tobacco at a good price. Yet, this is of small consequence.
Roderique Hortalez intends to use the remaining half million in procuring powder, and in conveying it without delay to the Americans. Instead, however, of buying this powder in Holland, or even in France at the current prices of 20 or 30 sols tournois a pound, the price at which the Dutch hold it, or even higher, when supplying the Americans, the real device of the operation consisting, as Roderique Hortalez hopes, in secretly procuring, with the sanction of your Majesty, all necessary powder and saltpetre of your Registrars, on a basis of from four to six sols a pound.
If the firm of Hortalez contracts with the Americans to forward to them powder on the basis of 20 sols a pound, and pays the equivalent to the merchants, it cannot send to Philadelphia for the remaining 500,000 livres more than 500 milliers of powder, and this second operation will be as barren as the first, in regard to the gold coin, nor will it yield further profit, beyond a payment in tobacco, confining the speculation to the same return as in the first instance. As has been stated, this is of small consequence in itself.
But if Hortalez secretly obtains powder from your Majesty's Registrars, at 5 sols a pound, with the 500,000 livres remaining he can obtain 2,000 milliers, or 20 thousand quintals, of powder, which forwarded to America, at 20 sols a pound, will leave Congress in debt to Hortalez to the amount of 2 millions tournois. The profits, returning in the shape of tobacco, sold in advance to the Ferme-Général, will enable the firm of Hortalez to settle with the real owner, namely, your Majesty, for the sum of two million five hundred thousand livres; and in addition there remains to be calculated the profit on sales of tobacco, that may rise in round numbers to 500,000 livres.
The return of these various sums will place at the disposition of Hortalez an actual capital of 3 millions, with which to renew the operation, to rehabilitate the American paper money with 1,500,000 livres in gold, and to supply American mortars and cannon with 60,000 quintals of powder, while this 60,000 quintals, although costing Roderique Hortalez but 15 thousand livres, will nevertheless make the Americans his debtors to the amount of 9 millions in return for both the powder and the Portuguese gold received by them.
Enough has been stated to demonstrate to your Majesty, how the returns in this affair treated in accordance with a large conception of the principles of commerce ought to grow by circulation, not merely by using two for a multiple, as 1,2,4,8, etc., but by using three, as 1,3,9,27, etc.; for if the first million produced three, these three employed in further operations on the same theory, ought to produce 9, and these 9, 27 etc., as I think that I have sufficiently demonstrated.
Your Majesty will not mistrust the plan as I have stated it, because of its complications, when you realize that no commercial speculation either advances or succeeds by a method more simple or natural than this.
I have exhibited the matter to you, Sire, in the character of a large merchant who wishes to speculate to advantage, and I have explained the real secret by which a wholesale business, drawing its profits from abroad, by a profitable exchange of its returns, increases the prosperity of all nations sufficiently intelligent to foster it. This art is far superior to that of the financier, who, invariably drawing his profits from speculations at home, directed against the subjects of the home government, cannot increase the revenue except at the expense of the manner of life of the governed. Thus, instead of the healthy plethora occasioned by commerce, that destructive science only produces a monstrous swelling like a tumor on the head, the result of penury, discomfort, and the general clogging of all other parts of a sickly body.
But to return to the subject, my primary object is less to embark your Majesty on a lucrative speculation than to secure to your first gifts the air and effect of a much larger sum.
The outcome of my first operation, above described, will be the receipt by the Americans from your Majesty, through Hortalez, of actual aid to the amount of 2 millions 500 thousand livres; that is, 500 thousand livres in gold and 2 millions in powder, while your Majesty will have parted with only one million livres. Besides, if the assets in tobacco and the sale of this return proceed as I have indicated, your Majesty can soon recommence, by the hand of Hortalez, the redistribution of the three millions arising from the sale and profit of these returns, and begin the operation anew on a larger scale. Thus, following the geometrical progression indicated above, the Americans will have received in two installments from your Majesty a sum of 9 millions ー that is to say, 2 millions in gold, and 7 millions in powder ー although your Majesty, having merely invested a second time the profits of the former operation, will have actually paid out in all but a single million.
Admitting the foregoing as sufficiently explained, it is the same to the firm of Hortalez whether it employs for the trade a French or a Dutch ship. In either case there are advantages and disadvantages that I will briefly enumerate.
The choice of a Dutch ship conceals more effectually the source of the supplies, but it also renders the munitions and the returns liable to be intercepted by English cruisers during the long course of transportation, and thus we may be deprived in an instant of all the profits of the operation; while by employing a French ship the transportation is absolutely safe as far as the French Cape, selected by Hortalez as the first depot for his trade with America.
This way, however, gives ground for a suspicion that the French government favors the enterprise, but considering that proof of the fact cannot be produced, we can disregard this, for whether France assists the Americans or does not assist them, the English for some time past, have been certain that we are lavish of our aid to the brave rebels in America.
Supposing, then, that a French ship be employed and freighted on account of Roderique Hortalez and Company; Congress, or rather Mr. Adams, the General Secretary of Congress will alone be informed by the American agent in England that a ship will carry to the French Cape gold and munitions to be paid for in Virginian tobacco, in order that he may send to the Cape his representative with the tobacco and with authority to receive the gold and munitions; to give his receipt, and to transfer to the captain and supercargo of Hortalez all the tobacco, or else a note to Roderique Hortalez for the proportion of the debt still outstanding.
Whereupon, the French captain will deliver to him all his cargo, and carry to Europe the cargo of the American ー contriving that if the American ship is captured during the short run between San Domingo and the mainland, no trace can be discovered of anything beyond a simple commercial transaction between Hortalez and an American war-vessel.
The cargo of tobacco landed in France may meet a part of the loss, and the operation can be repeated in the hope of a better result and without compromising any one.
Before terminating this paper I wish to hazard an idea suggested during its composition, namely, that it would be a pretty thing to aid the Americans with English money. Neither is this difficult.
It would suffice should your Majesty, adopting an English usage that exacts a tax of 75% ad valorem on all French vehicles entering England at Dover, decree that in future all foreign vehicles and horses landed at our ports shall pay a tax equal to that levied on ours when entering England.
Considering the enormous number of carriages, horses, etc., that fashion, foolishness, or trade draws hither from that country, I promise your Majesty that were I allowed to arrange this little matter to your advantage you would have no need to contrive how to furnish the firm of Hortalez with funds, but would soon possess sufficient to enable the concern, which is really your own, to flourish on the grandest scale.
This stroke of finance is far superior to all the other speculations in that deadly science, since the cost is borne by the English and not by your Majesty's subjects; and it accords with the principle adopted by the merchant, economist, and politician, Hortalez de Beaumarchais, that foreign merchandise and products ought not to be admitted into any country, unless they create a revenue equivalent to their cost.
By putting in practice this conceit, your Majesty would have the pleasure of using for the relief of the Americans the very money squeezed out of the English, and this seems to me to be quite an agreeable consideration, and, so to speak, like planting a few flowers amid the dry waste of explanations of the output, return, and profits of the commercial capital of the firm of Hortalez, of which your Majesty is about to become the sole proprietor.
After what has been said, it is not necessary that I prove to your Majesty your power to retard or accelerate these aids at pleasure. The trade contracted or expanded by Hortalez, according to the exigencies of the case, will have this effect without raising a suspicion of the true reason of these fluctuations.
Such is the scheme that I submit to your Majesty for this affair, after deliberate reflection upon it, and a calculation of the chances. The decision depends on your commands: the execution on my prudence and the success is left to Fortune. Under these conditions it appears to me the most profitable of any.
In case your Majesty does not adopt it, I shall, at least, be credited with having again shown in your service a zeal as extended as my experience and as active and pure as it is unalterable.