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Robert Morris and the “Art Magick”
Skillful money-juggling by America’s first financier aided the new nation but led Morris himself to utter ruin
October 1956 | Volume 7, Issue 6
Early in the York town year of 1781 the Continental Congress heard the report of a committee which had been at work estimating the debts of the United States. The committee failed to find enough income even to meet interest charges. The Continental paper had reached a point where it cost more to print a bill than it was worth in the market place. Next day the members of Congress voted unanimously to dump the whole mess in the lap of Robert Morris.
The Financier, as he came to be called, was the center of a web of commercial enterprises which included most of the banking and land speculation and shipping of the middle states. He was openhanded, approachable, a bold trader who exuded that prime commercial quality described as confidence. He was thought to be the richest man in America.
Martha Washington’s grandson, George Washington Custis, used to say that of all the Revolutionary leaders it was Robert Morris for whom Washington felt the warmest personal friendship. He was a sanguine, hearty, thick-necked man. He had two town houses and a country house above the Schuylkill, where his table was famous for good food and good drink and cheerful entertaining; he was always ready to crack a friendly pot. He was obliging, particularly to people of influence. He made an opening for one of Washington’s nephews in his country house. He was helpful to the General and to many a member of Congress about discounting notes and cashing bills of exchange. When Jefferson after his wife’s death left his eleven-year-old daughter in Philadelphia for her schooling, Mr. and Mrs. Morris couldn’t have been more considerate. The great magnate arranged loans for congressmen; he gave advice to his many friends about investments; he was everybody’s banker.
Of his appointment as superintendent of finance, Washington wrote: “I have great expectations of the appointment of Mr. Morris, but they are not unreasonable ones; for I do not suppose that by art magick, he can do more than recover us, by degrees, from the labyrinth in which our finance is plunged.” Art magick! High finance was regarded with awe and astonishment in those days, almost as a form of sorcery. What Robert Morris did, in that mysterious realm, no other man in America could have done. The Financier played such a crucial role in the affairs of the Confederacy that, by the time Washington rode home to Mount Vernon in December, 1783, he was left the most influential figure in the government.
Yet there was always ground for suspicion. Joseph Reed of Pennsylvania, who had been Washington’s aide in the old days of the investment of Boston, was a vain and thin-skinned politician but a man of good education and a shrewd observer. After Morris’ appointment as superintendent of finance he described him to Nathanael Greene as a “pecuniary dictator. … It would not be doing justice not to acknowledge that, humiliating as this power is, it has been exercised with much advantage for the immediate relief of our distresses, and that the public have received a real benefit from Mr. Morris’s exertions. At the same time those who know him will also acknowledge that he is too much a man of the world to overlook certain private interests which his command of the paper, and occasional speculations in that currency, will enable him to promote. It seems to have ever been a ruling principle with him to connect the public service with private interest and certainly he has not departed from it at this time of day.”
Part of the confusion over Morris’ honesty as a public servant arose from the complexity of the commercial dealings of the time. Bookkeeping was rudimentary. Since American merchants had to deal with the fluctuating paper currencies of thirteen separate provinces, transactions were basically by barter. Morris would trade so many hogsheads of tobacco estimated in Maryland paper currency, say, for a shipload of molasses in St. Kitts estimated in pounds sterling. In default of other currency, bills of lading would have to pass as a medium of exchange, so that half the time he would be using the bill of lading for the shipload of molasses to meet an obligation for a shipment of straw hats held by a merchant in Leghorn.
Bills of exchange circulated that could be met part in cash, part in commodities, part in credit. Due to the slowness in communications, years might go by before any particular transaction was completed and liquidated. Add to that the hazards of wartime captures and confiscations, and the custom, so as not to have all their eggs in one basket, of a number of shippers sharing in a shipload of goods. “The commonest things,” Morris wrote to a friend, “become intricate when money has anything to do with them.”
Everything depended on the individual merchant’s personal standing in the world-wide commercial community—what Robert Morris, in the parlance of the time, spoke of as his “integrity.” It was considered ethical for a merchant who had in his hands a shipload of lumber consigned to him, say, in Boston, to exchange it, if he saw the chance for a good deal, with the bill of lading for a shipload of hides in Cadiz, without consulting the original owners who might be merchants in St. Eustatius or in Baltimore or in Savannah. In dealing with public funds Robert Morris behaved in the same way. As Joseph Reed pointed out. he was never too curious to find out whether he was using the negotiable paper of the United States for a speculation to his own advantage, or whether he was using his own funds for the benefit of the United States.