### *Report of the Continental Congress, Oct. 21^st^, 1786.*

Congress assembled. Present, as yesterday.

The Board of Treasury to whom was referred an Order of the 20th October
instant, to devise Ways and Means without delay, for the Pay and Support
of the Troops of the United States upon the present Establishment, beg
leave to Report the following Resolves:

Resolved, That the Board of Treasury be authorised and directed to open
a Loan immediately to the amount of Five hundred thousand Dollars at Six
per Cent Interest per Annum.

Resolved, That Congress will, without delay, make a special Requision
for reimbursing the Lenders on the above Loan, their Principal and
Interest.

Resolved, That as a Collateral Security, the proceeds of the first half
Million of Acres of the Western Territory, which shall be sold in
pursuance of the Acts of Congress, be, and it is hereby pledged to the
Subscribers to the above Loan.

Resolved, That a Committee be appointed who together with the
Commissioners of the Board of Treasury, and the Secretary at War, shall
agree with such Gentlemen as are competent to undertake the same, for
the Pay, Cloathing, and Rations necessary for the support of the Troops
on the present Establishment, to the last Day of December, 1783, unless
sooner discharged.

All which is humbly Submitted.

October 21st, 1786.

On the report of the board of treasury, pursuant to the Order of
yesterday, to devise ways and means for the pay and support of the
troops of the United States upon the present establishment,

Resolved unanimously, That the several states in the Confederacy be, and
they are hereby required to pay into the federal treasury, on or before
the 1st day of June, 1787, their respective quotas of the sum of five
hundred and thirty thousand dollars in specie, which quotas are as
follows:

-   New Hampshire \... 18, 603

-   Massachusetts \... 79, 288

-   Rhode Island \... 11, 395

-   Connecticut \... 46, 746

-   New York \... 45, 368

-   New Jersey \... 29, 415

-   Pennsylvania \... 72, 504

-   Delaware \... 7, 950

-   Maryland \... 49, 979

-   Virginia \... 90, 630

-   North Carolina \... 38, 474

-   South Carolina \... 33, 973

-   Georgia \... 5, 671

Which sums, when paid, shall be passed to the credit of the states
respectively, on the terms prescribed by the resolve of Congress of the
6th day of October, 1779; and that the moneys arising from the said
requisition be, and hereby are appropriated for the pay and support of
the troops on the present establishment.

Resolved unanimously, That the board of treasury be, and they are hereby
authorised and directed to open a loan immediately to the amount of five
hundred thousand dollars, at six per cent. per Annum, on the credit of
the foregoing requisition, which they are hereby authorised to pledge to
the lenders for the faithful reimbursement of the moneys loaned with the
interest thereof.

The Committee consisting of Mr. \[Charles\] Pettit, Mr. \[Henry\] Lee,
Mr. \[Charles\] Pinckney, Mr. \[John\] Henry, and Mr. \[Melancton\]
Smith to whom were referred a letter from the War Office with the papers
enclosed containing intelligence of the hostile movements of the Indians
in the western country, and a letter of the 18 instant from the
Secretary at War, suggesting the imminent danger of the public stores,
deposited in the arsenal at Springfield in the State of Massachusetts
from the insurrections and disorders prevailing in that state, having
reported\--

That from the facts stated in the said letter from the Secretary at War,
and other authentic information it appears that a dangerous insurrection
has taken place in divers parts of the State of Massachusetts which is
rapidly extending its influence; that the insurgents have already, by
force of arms, suppressed the administration of Justice in several
counties.

That though the legislature of the sd. state is now in sessions, yet
from the circumstances attending it, it would undoubtedly defeat the
object of the federal interposition should a formal application for the
same be made. That nevertheless it appears to the committee that the aid
of the federal government is necessary to stop the Progress of the
insurgents; that such Aid is earnestly desired by the Governor and
Council, tho\' particular Circumstances prevent its being applied and in
a more formal Manner; and that there is the greatest reason to believe
that, unless speedy and effectual measures shall be taken to defeat
their designs they will possess themselves of the Arsenal at
Springfield, subvert the constitutional government, and not only reduce
that Commonwealth to a State of Anarchy and Confusion, but probably
involve the United States in the Calamities of a civil war.

Under such Circumstances the committee conceive that the United States
are not only bound by the confederation and good faith, but strongly
urged by the Calls of good Policy and sympathetic Affection prompted by
friendship, affection, and sound policy to be prepared to extend such
aid to the State of Massachusetts as may be necessary to restore the
government to the full exercise of its constitutional authority, and to
afford protection to the important public stores deposited within that
state. For these purposes the committee think it proper that a body of
troops should be immediately raised under the authority of the United
States; but as it is not expedient that these causes should be publickly
assigned for the raising of such troops, especially as the other Matters
referred to the Consideration of the committee afford sufficient ground
to authorize the measure, they have thought it proper, in a separate
report on the intelligence received from the Western Country, to
recommend the Augmentation of the troops in the service of the United
States. And as these troops are proposed to be raised chiefly in the
eastern states, they may probably effect these salutary purposes before
they are moved to the Western Country.

Resolved unanimously, That Congress agree to the said report.

Resolved un., That although the present condition of Massachusetts
demand immediate preparatory arrangements for the interposition of the
Union when called for, and the happiness of the U.S. require the
adoption of measures calculated to crush the insurrection in that state
still in the present embarrassments of the federal finance Congress
would not hazard the perilous step of putting arms into the hands of men
whose fidelity must in some degree depend on the faithful payment of
their wages had they not the fullest confidence from authentic and
respectable information of the most liberal exertions of the money
holders in the State of Massachusetts and the other States in filling
the loan authorised by the resolve of Congress of this date.

The Board of Treasury to whom was referred a Motion of the Honorable the
Delegates of the State of Massachusets for prolonging the receipt of
Indents of Interest on the Requisition of the 27th. September, 1785,
beyond the first of January next, the time prescribed by the said Act,
beg leave to Report:

-   That the Quota of the State of Massachusets, payable in Specie on
    the Requisition of the 27th. Sept., 1785, is \... 112,214

-   In Indents of Interest \... 336,340

-   Total Dollars \... 448,554

That the amount of Indents of Interest already transmitted to the Loan
Office of the State of Massachusets, is 397,500 Dolls. out of which had
been issued to the 30th. September last, 292,117 Dollars, which is
nearly the amount of the proportion of Indents which is receivable on
the Quota of that State on the Requisition of the 27th. September, 1785.

That previous to the first of January next, the Commissioner of the Loan
Office in the State of Massachusets will in all probability issue as
many Certificates, as will be the amount of the Interest due on the
Domestic Debt of the United States, belonging to the Citizens of that
State; and beyond the Sum which can be received within that State, on
its Quota of the Requisition of the 27th. September, 1785.

That although the Requisition of the 27th. Septr. 1785, prescribed the
first day of May last for completing the payment of the Specie Quota due
on the said Requisition, no payment in Specie has yet been made by any
States in pursuance thereof, excepting New York, Pennsylvania, and South
Carolina.

That to extend the time for receiving Indents of Interest in the several
States on the Requisition of the 27th. September, 1785, without taking
any measures to hasten the Collection of their respective Specie Quotas,
would in the opinion of this Board, encourage that disposition to
procrastinate the payment of the Specie Balances due from the several
States, whose consequences are already so injurious to the welfare of
the Confederacy.

The Board are sensible, that the late unhappy disturbances which have
prevailed in the State of Massachusets may have impeded the Collection
of Taxes in that State; but they cannot consistently with the duty which
they owe to the general Interest of the Union, recommend an unqualified
compliance with the motion submitted to their consideration, since in
their judgment it would inevitably defeat the operation of the general
Requisitions so far as they respect the Collection of the Specie Quotas.

It is necessary further to observe, that although Indents of Interest
issued in pursuance of the Requisition of the 27th. September, 1785, are
not receivable on that Requisition after the 1st. January next, unless
the respective Quotas of Indents are in the hands of the several State
Treasurers, or other proper officer on or before that day; yet the same
are receivable on the Requisition of the 4th. September, 1782, and on
the Balances of Indents due on the Requisitions of the 27th. and 28th.
April, 1784, without any definite period being fixed for such receipt.
It is true, that this will not affect the States of Massachusets, and
Pennsylvania, so far as it respects the Requisitions of the 4th.
September, 1782, and 27th. and 28th. April, 1784.

Justice to those States which have complied with the Requisition of the
4th. September, 1782, and a regard to the maintenance of Public Credit
undoubtedly require, that no time should be lost in completing the
Requisition last mentioned, and in discharging the Balances of the
requisition of the 27th. and 28th. April, 1784. Unless this is done
without delay, the mode devised by the United States in Congress, for
giving every relief in their power to the Creditors of the Union, will
ultimately operate to their prejudice, by throwing into circulation a
new species of Paper for the payment of Interest, without any definite
or adequate Funds for absorbing the same.

This important object appears to have been in the contemplation of
Congress in passing the Requisition of the 27th. September, 1785; in
which a definite period is established for redeeming the Indents of
Interest issued in pursuance thereof. The Board beg leave to suggest,
whether on the same principles it is not advisable to fix a period for
completing the payment of Indents of Interest on the Requisitions of the
4th. September, 1782, and 27th. and 28th. April, 1784.

Should this be done, and the extension of the receipt of Indents on the
Requisition of the 27th. September, 1785, be admitted on such
principles, as would incite the several States to complete the payment
of their Specie Quotas due on the same, the United States in Congress
would, in the opinion of this Board, manifest to the several States, as
strong a disposition to accommodate the Collection of the Federal
Revenue, to the circumstances of the different Members of the Union, as
can be done consistently with the present Exigencies of the Government,
and that regard to the principles of Public Credit, which is so
essential to the general Welfare.

On the above principles, we beg leave to submit to the consideration of
Congress the following Resolves:

Resolved, That the several States, be forthwith required to complete the
payment of the Balances due from them respectively on the Requisitions
of the 4th. September, 1782, and the 27^th^ and 28^th^ of April, 1784,
and that in case the said Requisitions shall not be completed, agreeably
to the Terms thereof, on or before the Day of the States so deficient,
shall be held to pay thereafter in Specie the Sums by them respectively
due; and that the Specie so paid shall be applied towards the discharge
of the Indents of Interest issued in pursuance of the former
Requisitions of Congress, provided the same does not exceed the amount
which was receivable in Indents of Interest on the Requisitions above
mentioned.

Resolved, That in any State where the Quota in Specie due on the
Requisition of the 27th. September, 1785, shall be paid on or before the
first day of January next, the proportion of Indents of Interest which
such State has a right to avail itself of on the said Requisition, may
be received in discharge thereof to the first day of April, 1787.
Provided always that, ff the whole of the said Indents shall not be then
paid into the General Treasury or the Commissioners of the respective
Loan Offices, the Balance so deficient shall be thereafter paid in
Specie, and applied agreeably to the directions specified in the
Requisition of the 27th. September, 1785.

All which is humbly submitted.

October 20th., 1786.

Board Of Treasury,

October 5th., 1786.

Sir: In obedience to the orders of Congress directing this Board to
Report on a Representation made by Messrs. Lawrence and Morris, touching
our Contract for Clothing the Troops, we beg leave to submit to that
honorable Body, our reasons for entering into the Contract in question,
together with some observations on the remarks made by these Gentlemen.

In examining their objections, we find that they consist of two
points\--viz.

-   1st. That we have deviated from the usual mode of Advertising all
    Contracts for the Public.

-   2d. That the prices the Board have contracted for, far exceed those
    at which the Cloathing was furnished last Year; and at which these
    Gentlemen declare they were ready to supply it this Year, had they
    been employed.

On the first point, we beg leave to observe that, although under the
Administration of the Treasury by the late Superintendant of Finance,
and of this Board, it has been usual to advertise Contracts for Supplies
to the Army; the fact is, that the Contract for Clothing has not been
advertised, except in the single instance of last Year. Advertising the
Contracts has been confined to the supply of Provisions, in which the
quality could be much better ascertained, than it possibly can in the
Article of Clothing; and where the evil (in case of a failure on the
part of the Contractor) is only temporary. In the supply of Clothing by
Contract, executed by the lowest Bidder, it is extremely difficult to
guard against impositions, either as to quality, or making up the
supply; and the consequence of such abuse, is felt by the Soldier
through the whole Year. These reasons it is probable prevented any such
Contracts for Clothing during the Administration of the late
Superintendant of Finance. From a wish however of extending the system
of Public Contract (if possible) to every branch of the Administration,
we last Year advertised a Contract for the Clothing; and, the lowest
proposals having been made by Messrs. Lawrence and Morris, the execution
of it devolved on them. No official complaint was ever laid before the
Board against the Contractors of last Year for a failure in the
execution of the Contract; but it is certain that the lowness of the
price at which these Gentlemen undertook the Contract prevented the
possibility of furnishing several Articles of that quality which was
necessary; more especially the essential articles of Shoes, Hats and
Overalls which could not (at the prices of Messrs. Lawrence and Morris\'
late Contract) be procured of a proper quality. If therefore we had
merely for the reasons above assigned, judged it advisable not to
advertise this Year a Public Contract for supplying the Army with
Clothing, we should have stood justified by precedents founded on
reason, and confirmed by our own experience.

But a far more powerful reason rendered it improper this Year to
advertise this Contract. It was not practiciable for us to fix either a
precise time of paying for the Clothing to be furnished, or to promise
payment in Specie, Both of which are essential points in all Contracts
proposed by Advertisement. The embarrassed state of the Finances, from
an almost total stagnation of Taxes in the respective States, and the
revival of Paper Currency, rendered it extremely difficult to obtain
Specie enough for the support of the Civil List; and were the Board
(under present circumstances) to divert, for any other purposes, the
Funds relied on for this essential object, it would hazard the immediate
dissolution of the Federal Government.

After many applications made to this Board by the Secretary at War, to
enter into stipulations for paying the Troops now in Service, at fixed
periods, and for furnishing Clothing, we were obliged for a long while
to decline entering into either of these engagements for the reasons
above mentioned; and we could not at last have effected it,
notwithstanding the weighty arguments in General Knox\'s Letter of the
23d. June last (Copy of which, No. 1, is herewith enclosed) had not the
present Contractors agreed to such a mode of payment as was practicable
for the Board to make. What these Proposals were will appear by their
Letter No. 2, of the 31st. August last.

It may be asked, why the Board did not require of Messrs. Lawrence and
Morris, the former Contractors, the prices at which they would be
willing to execute this Contract, on the mode of payment proposed by
Messrs. Turnbull, Marrole & Co. The Answer is, That it was in our
opinion necessary (in order to prevent if possible, the Depretiation of
the New Emission Money of Pennsylvania when issued, and for other State
Reasons, which cannot be unknown to Congress) that no one but the
confidential Servants of the Board, and the Persons actually interested
in the Success of the Negotiation, should know that this Paper was to be
put into circulation. The necessary secresy could not have been
preserved, had the mode of payment been communicated to Messrs. Lawrence
and Morris (or others, having an equal right with those Gentlemen to
such Communication) and been rejected; which we conceived was most
probable. It therefore appeared to us, that the communication would
certainly have depretiated and eventually might have deprived us of the
only means in our power of providing for this essential Supply; without
any probability of reducing the price of the Articles, if furnished of a
proper quality. Our Reasons for fearing a Rejection of our Offers were
1st., Because no period whatsoever was stipulated for the payment; 2d.,
Because the payments when received, was to be in a Paper medium, which
could not with equal advantage be Negotiated by any Person, whose chief
Mercantile Transactions did not center in Philadelphia. On this point,
we shall have occasion to remark more fully in Answering the second head
of the objections made against the present Contract.

Before however we proceed to this consideration, it may not be improper
to observe, that the Gentlemen, who have complained against our conduct
as unprecedented, in making a private Contract for the supply of
Clothing for the present Year; actually solicited of the Board, a
preference of a Contract for this Supply, alledging as a Reason, the
loss they had sustained by the first Contract; And we should certainly
have conceived ourselves justifiable in entering into such a Negotiation
with these Gentlemen not only for the general reasons we have mentioned,
but from the consideration suggested by themselves, had our means of
payment been such as we could reasonably have believed Contractors in
the City wou\'d have accepted, and which might without impropriety have
been communicated. In proof of the preference sollicited and the reasons
for it, we beg leave to lay before Congress a Letter from Messrs.
Lawrence and Morris to the Board No. 3.

On the second head of the Objections, namely \"That the prices the Board
have Contracted for exceed those at which the Clothing had been
furnished last Year, and at which rate the Gentlemen declare they were
ready to supply it this Year had they been employed.\" We beg leave to
observe, that the prices it is true are different, and that the
statement of the difference does not appear to vary materially from what
has been set forth by Messrs. Lawrence and Morris; but then it is
equally true, that the two Contracts differ essentially, not only as to
the principles on which they are made, but as to the mode of payment;
and so much so, as to easily reconcile this apparent difference, on a
candid comparison of the Contracts, No. 4 and 5.

They differ as to principle; because, in the former Contract the
Contractor had a right to an Arbitration, if the Inspector on the part
of the Public disapproved of the Workmanship or quality of the Clothing.
By the present Contract, no such right is left with the Contractor. From
a conviction that it was neither real economy nor justice to the
Soldiery to fix the prices of the different Articles of Clothing, so low
as to put it out of the power of the Contractors to furnish Articles of
sufficient goodness without being losers, the Board determined in the
present Contract, to fix such a price as would ensure a supply of good
Clothing; and to leave it to the Secretary at War, by having the right
of fixing the patterns after the Contract was made, and afterwards the
sole power of Inspection, to oblige the Contractors to furnish the
different Articles in proportion to the price given. Whether or no
therefore the Contract is favorable to the Public, will depend on the
patterns determined on by the Secretary at War, and a proper Inspection.

The only points therefore which we presume it was necessary for the
Board to establish were;

-   1st. Whether the price of a Suit of Soldiers Clothing was higher
    that what was judged necessary by the Secretary at War to ensure the
    different Articles of Clothing of a proper Quality.

-   2d. Whether the same could be furnished at the former prices without
    loss to the Contractors.

To shew the ground of our Opinion on the first point, the Board beg
leave to lay before Congress an Estimate of the Secretary at War No. 6.
of the Sum necessary for the supply of Clothing for the present Year
(viz. for 420 complete Suits) in which a Suit of Cloths is estimated at
26 Dollars each. This estimate will be found included in the general
Estimate for the Year 1786 transmitted by this Board to the United
States in Congress. The last Requisition (in which the Monies necessary
for this purpose are included) is founded on it. The Soldiery have
therefore derived a right to Clothing for the present Year,
proportionate to the Sum voted for this purpose by the United States in
Congress; and as it has not, and too probably will not be in the power
of the Board to satisfy them in the Material Article of Pay, it becomes
their peculiar duty to do them justice in this object.

It is to be observed further, that this Estimate was formed by the
Secretary at War, and communicated to this Board after the last Contract
had been executed; and when of course he must have ascertained whether
the former prices could ensure a proper Supply.

To prove the second point, we desire to refer to the Letter of the late
Contractors to this Board, No. 3, in which they declare: \"That they has
lodged with the Secretary at War, an Estimate to prove that they had
been sufferers by the last Contract; and that they could prove the
veracity of that Statement by Vouchers in their possession.\" Messrs.
Lawrence and Morris are pleased to observe that they would have been
willing to have taken the Contract of the present Year on the former
terms. It would not have been justice to those Gentlemen for the Board
to have supposed this in direct contradiction to the declaration above
mentioned, supported by a similar one in a Letter from them to Mr.
Staats Morris, and by him laid before the Board, in which (after stating
the prices of the last Years Contract) they observe \"That it would not
answer to form an Estimate from the above prices.\" We are sorry to
observe, that the Letter No. 7, in which the late Contractors complain
of having been losers, was not transmitted by them to Congress; and that
they only furnished to that Honorable Body, an Extract of their Letter
to Mr. Staats Morris, omitting the Remark above quoted.

Having said as much as we conceive necessary on the first point, We beg
leave to consider the two Contracts as to the mode of payment. By the
last Year\'s Contract, the whole Sum necessary for executing the same
(namely 13,455 Dollars) was advanced to the Contractors in Bills of
Exchange on Holland at the favorable rate of Three Shillings
Pennsylvania Money per Current Florin. By the present Contract, the
Contractors are to hazard the Negotiating the New Emission Money of the
18th March, 1780, at par, and abide by the loss that may arise on the
Negotiation; or to be paid in orders on the Receiver of Taxes of
Pennsylvania, payable at no fixed period, and subject to a Negotiation
with the Treasurer of that State in Paper Currency. We think it
unnecessary to make any remarks on the present value of this Paper in
Pennsylvania when compared with Specie; but certain it is, that it is
far from being equal to Bills of Exchange.

The extreme contingencies of either mode of payment will be apparent to
Congress, when it is considered by that Honorable Body, that to the New
Emission Money the State claims a right, in consequence of a negotiation
entered into betwixt the Government of Pennsylvania, and the late
Superintendant of Finance; and have actually endeavored by a process
against the Commissioner of the Loan Office, to Arrest the issue of it;
and that in consequence of a difference in statement on the Requisitions
of the 27th April, 1784, betwixt the Comptroller of Pennsylvania, and
the Officers of the Federal Treasury, it is alledged by Pennsylvania
that they have more than completed the payment of their Quota on the
present existing Requisitions.

This disadvantage in payment we could not estimate at less than 10 p
Cent. Because no Merchant whatsoever would in the present state of
Commerce, hesitate, in our opinion, to Sell his Merchandize for Bills of
Exchange in hand, at the rate fixed by the Contract of last year, with
Messrs. Lawrence and Morris at the discount above mentioned, in
preference to trusting any Government whatsoever in the United States
for a period not defined, and for a mode of payment so liable to the
hazard of Depretiation.

We therefore considered, that the difference to the Public whether
furnished at the City of Philadelphia, or at this place, could not be
estimated at less than two per Cent.

On Estimating, from a view of all the circumstances we have mentioned,
the two Contracts, the comparison stands thus\--

-   Disadvantage to the Contractors from the contingent mode of payment
    10 p. Ct. on the Sum of £4,212:6/ Pennsylvania Currency, amount of
    the Contract \... Dols. \... ,122.60

-   Advantage to the Public by the Clothing being at Philadelphia
    instead of New York \... 224.

-   \... 1,346.60

-   The advantage to the present Contractors by Messrs. Lawrence &
    Morris, is stated to be \... 1,791.

So that even in this point of view the whole difference of advantage to
the present Contractors would only be 344 30/90 Dollars (which is far
short of a Commission of 5 per Cent) even of the Contract was intended
to furnish Articles of no better quality than was done last Year; This
was not the case; the whole statement of Messrs. Lawreance and Morris is
founded on the assumption that such was the intention of the Contracting
Parties; and is therefore fallacious. From the purport of these
Gentlemen\'s Letter to the Board of the 16th June, 1786, it appears they
did not gain a commission for furnishing the Clothing at the prices
agreed on last Year (although they had the whole cost advanced in Bills
of Exchange) and such compensation at least, every person has a right to
expect who undertakes a Public Contract.

On the whole it will appear That we have not deviated from established
rules of advertising a Public Contract for the supply of Clothing for
the present Year.

That, even if it had been advisable to renew the Experiment (first
attempted by this Board) of giving the Contract for Clothing to the
lowest Bidder, the state of the Finances did not enable us to advertise
such a Contract.

That in fixing the price of a Suit of Soldiers Cloths for the Year 1786,
we have governed ourselves by the Estimate of the present Year,
furnished by the Secretary at War, and approved of by the United States
in Congress.

That the Contract we have entered into puts it altogether in the power
of the Secretary at War to ensure a supply of Clothing proportionate in
goodness to the difference in price betwixt this, and the last Year.

That the terms of payment are essentially different from those of the
Contract of last Year.

That from the communications of Messrs. Laurence and Morris, we have no
reason to suppose they would have undertaken the present Years Contract
at the prices of the last; but the reverse.

That had they been so disposed, we had it not in our power to promise at
any period an absolute payment in Specie; much less to advance the whole
amount in Bills of Exchange; neither should we have judged it proper to
fix the prices of many principle Articles of Clothing so low as to
hazard the goodness in quality of the Articles furnished.

On these Principles our Negotiation of the Contract in question rests:
And we doubt not on a candid Investigation they will appear satisfactory
to the United States in Congress.

With the greatest respect we are, etc.

His Excelly.

The President of Congress.

### Journals of the Continental Congress, 1774-1789 SATURDAY, OCTOBER 21, 1786.