CHAPTER FOUR

MONEY: THE SINEWS OF WAR

WASHINGTON WAS A PATRIOT WHO BELIEVED IN THE CAUSE yet carried himself with moderation and self-restraint. He was also an experienced soldier. As a Virginian, he represented one of the wealthiest and most strategically significant colonies. With all of these qualities at his command, he stood poised to unite the colonies in a concerted military effort. All of these considerations played a role in the congressional delegates’ decision to appoint him commander in chief of the Continental Army in June 1775.

There was another factor, too, albeit often ignored: his personal wealth—what John Adams, in nominating Washington, called his “independent fortune.” This self-sufficiency enabled him to decline a salary and devote himself to his duties without undue distraction. More important, his wealth was inextricably linked to his social and political standing. The George Washington of 1758 would never have been chosen, and not just because of his youth. Nor would a man who, like many Virginia gentlemen, lived a dissolute life or was mired in debt. Washington’s resolution in the wake of the Stamp Act crisis to live within his means while aggressively building his fortune ideally situated him as a symbol of America’s quest for economic freedom.¹

Washington’s personal motivations for leading the army were complex. There were limits to his ambition. He retained a desire for distinction all his life. The youthful yearning for military glory, however, had long faded. Washington engaged in Virginia’s military preparations of 1774–1775 with energy but without relish. He accepted command of the army in the same spirit. That Great Britain and the colonies were headed for a trial of strength and willpower he had no doubt—the showdown had been coming for a long time. Assuming that the trial would be solely economic in character, he had kept his eye on the long term: pondering the sale of his flour in London markets, for example, and petitioning Lord Dunmore about the status of his western lands even as Great Britain and the colonies tumbled desperately toward military confrontation.

Then, in the spring of 1775, armed conflict became a reality. Washington blamed the British for this state of affairs, but he also realized that his fellow Americans desired an armed struggle. Unlike congressional colleagues such as Patrick Henry and John Hancock, who were naïve in the ways of war, he felt no glee at the prospect. Washington had anticipated victory in a solely economic contest. He expressed no such confidence in the outcome of a military trial. War, he knew, might well wreck his personal estate. More than his life or his fortune, however, his reputation was on the line. His genuine fear of failure sparked doubts—similar, but on a much grander scale than those he had experienced during the French and Indian War. Believing that the colonies had no choice but to accept the war that had been foisted upon them, he nevertheless accepted the challenge and its attendant risks with sober determination.

Independence was not yet on the table when the war began. In New York on June 26, 1775, during a stop on his journey to take command of the army in Massachusetts, Washington told the Provincial Congress that “every Exertion of my worthy Colleagues & myself, will be equally extended to the re establishment of Peace & Harmony between the Mother Country and the Colonies” despite the “fatal, but necessary Operations of War.” Even after the Declaration of Independence the following year, he looked forward to peace.²

Despite his military trappings—the fine uniform, the soldierly bearing—Washington hated war. He also believed that beneath the clash of arms the conflict was fundamentally economic in character, and that the nation’s fiscal health was the yardstick of military success. This outlook was vital to his strategic vision. Keeping in mind that economic freedom and prosperity were the ultimate objectives, he sought to carry on the fight without undermining the foundations of future growth.

Winning the war, in other words, could not come at the price of losing the peace that followed. Building and maintaining a politically stable, democratic government would create a framework in which the economy could flourish. Conversely, establishing a functional economy and ensuring that it did not collapse under the strains of war would ensure stable government. The battlefield formed only one facet of a multidimensional war. Whatever his focus at any given moment, Washington strove always to keep the entire conflict fully in view.

This broad conception of the war made Washington’s businesslike habits particularly valuable. His entrepreneurial outlook and intense interest in the worlds of business, commerce, and finance fed his drive to succeed as a general as well as a businessman. After years of working to expand his own estate, he came to think of the army and the fledgling United States as enterprises that he must both steward and develop. Used to thinking of Mount Vernon as a multilayered, multidimensional entity that both competed and collaborated with other diverse entities, he operated the Continental Army in much the same way.

Washington’s astonishing skills as a military administrator—without which the army could not have survived—derived from his ability to visualize his entire command. Seeing that the health of the whole depended on the vitality of its parts, he demanded clear and strong internal chains of authority and lines of communication. He chose strong leaders and mandated thrift and efficiency. He knew how to motivate. Above all, he fed on details, the seemingly insignificant minutiae that were as vital to the army’s survival as cells were to the human body. Likewise, Washington forged and worked ceaselessly to maintain ties with the outside entities—local and state governments, Congress, private contractors and financiers, foreign allies—upon which the army’s prosperity depended. Finally, he combined vast responsibilities with an ability to think simultaneously in terms of military, political, and financial objectives. He understood how money ensured not just survival but future prosperity.

In his role as commander in chief, Washington’s immediate sphere of control was the army. He was not civilian chief executive, or even a member of Congress, and so could not control economic policy on the national or local levels. He could influence those policies, however, and increasingly did so as the war progressed and his personal power solidified. Though respect for civilian authority was an overarching principle of his command, Washington was not above intervening in politics as circumstances dictated.

The weakness of the Confederation government, particularly in its inability to raise national revenue, worried him as the war went on. That in turn informed his military strategy. Contrary to legend, he did not seek to prolong the war in an effort to wear down the British will to win. Though some of his most experienced officers advocated guerrilla warfare, Washington explicitly rejected it because of the social, political, and especially economic dislocation it would produce. Instead, recognizing Great Britain’s almost infinitely superior long-term economic resources (despite its heavy national debt) relative to America’s fledgling economy, he persistently sought a quick military decision that would end the war and give the United States room to develop. That determination to end the war rapidly solidified as the conflict progressed.

AN AVALANCHE OF WORK smothered Washington almost from the moment he officially accepted his commission on June 16. Endless paperwork, interminable meetings, and—perhaps worst of all—alternately raucous or tear-soaked parties left the general scarcely able to breath, let alone think. On June 18 a crowd of delegates, dignitaries, and busybodies dragged him off to Vauxhall Tavern near Philadelphia, where he endured a grueling evening of dining, drinking, and small talk. A hearty toast to “the Commander in Chief of the American armies” capped the evening, followed by stifled sobs and an awkward silence that probably had Washington blushing and shuffling his feet. Back at his lodgings that evening—the door no doubt guarded by a scowling servant under orders to admit no one—the general composed a tender letter of farewell to Martha. “My unhappiness will flow, from the uneasiness I know you will feel at being left alone,” he wrote. His own loneliness he would not admit, but it was profound. As the war progressed, he and Martha found separation so unendurable that she spent most of the war with him in camp.³

Beset though he was by worries and distractions, Washington devoted a good deal of his time to pondering money and finance. On June 19, 1775, in his first written commentary on the war effort, he told his friend Burwell Bassett with evident satisfaction that “Congress in Committee have consented to a Continental Currency, and have ordered two Million of Dollars to be struck for payment of the Troops, and other expenses arising from our defence.” His initial confidence in Continental paper currency, issued in dollars under a bewildering variety of denominations and not backed by gold or silver, eventually proved unjustified. Few could have imagined in 1775 that within a few years $2 million in paper dollars would purchase a few horses or maybe a wagon. State bills of credit, which continued to be issued throughout the war, likewise proved hopelessly unstable. For everyday Americans, gold and silver in the form of coins issued by foreign governments would—when available—remain the exchange medium of choice.⁴

All that, though, lay in the future. In Washington’s efforts to arrange the army, money took pride of place as a subject of concern before the number of troops called out or the identities of the officers appointed to command beneath him. He would come to learn that he could not simply leave problems of finance for the politicians to figure out, but that he had to apply pressure where needed to ensure that Congress and the states kept money flowing to the army.

After a ride of almost two weeks from Philadelphia, interrupted by stops to meet officials and receive public delegations, Washington arrived at Cambridge, Massachusetts, on July 2. He surveyed the mob-like army encamped there with a sense of shock. Ostensibly gathered to besiege the British in Boston, the militiamen seemed to lack both organization and purpose. Men floundered about in a sprawling, filthy shantytown, united in little else but their disdain for the British. Worst of all, they lacked a system. Officers—democratically elected on the basis of popularity rather than merit—and soldiers conducted themselves according to their immediate needs, without coordination or plan. With no organized system of procurement or distribution for everything from foodstuffs to ammunition, men plundered and stole from civilians or other soldiers to satisfy their needs. Waste was colossal. Instead of economizing, men squandered precious resources to no purpose, firing muskets off at random, mixing good food with spoiled, leaving powder and equipment out in the rain, and tossing aside soiled garments to rot, among other atrocities. Washington’s annoyance did not solely reflect personal distaste. At this pace, he knew, the “army” had no staying power. It would probably dissolve in a matter of weeks.

In a foul mood, the commander in chief nevertheless wasted no time in angry speeches or displays. Instead, he stormed off to his desk and got to work. The first task as he saw it was to impose a system. He did so in much the same manner he had developed his estate—starting with the elemental building blocks and working upward from there. His goal was to create a military enterprise that was well-led, motivated, efficient, thrifty, and, as far as possible, self-sustaining. Orders flew off his desk demanding thorough and regular returns of men, clothing, equipment, and especially ordnance. Acquiring this knowledge would help him to assess fundamentals such as supply, needs, and costs. The process would also inculcate the same knowledge of needs and resources among his officers, and establish internal networks of communication and collaboration. But that was only a start. Without adequate resources, the army was doomed to wither and die no matter what Washington did. He therefore had to look first and foremost to the army’s primary source of supply—the civil population—and to the means of procuring that supply—the fledgling national government, embodied in Congress.

Congress had already established a Continental currency and voted for $2 million to supply the army’s needs. Getting that money to the army in a regular and efficient manner was another matter. To supply the army’s immediate needs, Washington required a cache of ready money—a military chest. In his first letter to Congress of July 10, formally addressed to President John Hancock, the commander in chief wrote: “I find myself already much embarassed for Want of a military Chest—these Embarassments will increase every Day: I must therefore request that Money may be forwarded as soon as possible. The Want of this necessary Article, will I fear produce great Inconveniencies if not prevented by an early Attention.”⁵

Congress complied, sending the general a supply of ready cash that he could draw upon for immediate needs. All too often over the years that followed, unfortunately, it seemed that the chest must have holes in its bottom. Every day, Washington and his aides and secretaries had to plunder it not just to meet bills but to pay off Continental troops or tide over militia forces neglected by their states. When the chest ran empty, the general had no choice but to pester Congress with repeated and sometimes frantic reminders to send him funds as quickly as possible to prevent the army from breaking up. If that failed, he had to approach civilian lenders with apologetic requests to borrow funds to meet short-term needs. It was an embarrassing position for the commander in chief of the Continental Army, and one that would progressively reinforce his conviction in Congress’s ineffectiveness.

Washington was throughout his life a fanatical account-keeper, and never more so than in a military capacity. Upon his appointment as commander in chief, he declined the salary of $500 per month that Congress offered to him, declaring that “as no pecuniary consideration could have tempted me to have accepted this Arduous emploiment at the expence of my domestik ease & happiness I do not wish to make any proffit from it: I will keep an exact Account of my expences; those I doubt not they will discharge & that is all I desire.” John Adams exulted at the vision of “A Gentleman, of one of the first Fortunes, upon the Continent, leaving his delicious Retirement” and promising to “lay before Us, an exact account of his Expences, and not accept a shilling for Pay.” Washington did, however, accept Congress’s offer of a monthly allowance for his expenses, and for the wages and expenses of his “military family”—aides-de-camp, secretaries, and other support staff. He used the same allowance to pay for an extensive array of other needs, including headquarters maintenance, tack and saddle, entertaining dignitaries, paying couriers, and so forth.⁶

Transparency was another characteristic that served Washington well both in business and in the military life. Many of his acquaintances and business associates were in the habit of juggling accounts to obscure secret expenditures or investments—or, more often, to hide fiscal embarrassments. No one could ever justly accuse Washington of such deceits. Probity and openness, he knew, built the trust essential to establish and maintain personal credit. Ultimately it was what made profitable investments and business partnerships possible.

As commander in chief, Washington knew that his expenditures would sooner or later come under close scrutiny. His expense account book, usually maintained by his secretary Caleb Gibbs but always under the general’s close supervision, was remarkably precise. Washington fretted about it throughout the war. In the spring of 1777, financier Robert Morris lent the general a few silver dollars to meet some trivial expense. Months passed, during which Washington marched his army around New Jersey and up and down the east coast, pursuing the British. In time, he forgot exactly how much Morris had lent him—a minor lapse that would hardly have troubled most people. In August, though, with a major battle against the British army looming just ahead, Washington could not stop worrying about those silver dollars and finally decided to write Morris—who was also busy with such insignificant business as helping to keep the Continental economy afloat—and beg for an exact accounting of how much he had lent him. “For want of the Sum,” the general fretted, he could not balance his account. As he had anticipated, in later years some of his detractors—ignoring the many additional costs for his military family and other needs—would accuse Washington of purposefully overdrawing his expense account. In fact, there were few things he worked harder to keep correct.⁷

Economy was important both for its own sake and because of the need to project an appearance of frugality. Washington was careful to maintain a modest military household. Officers’ wives—including Martha—were regularly present and set the example of economy and self-sufficiency by mending clothes and otherwise preventing wastage. Uniforms were clean and distinctive—visual rank distinctions being important to Washington—but not opulent. He preferred to have holes mended rather than make new purchases. Likewise, the general’s table was ample but modest. In the account book Gibbs studiously jotted down purchases of commonplace viands such as turnips, potatoes, asparagus, eggs, cabbage, chicken, pork, and beef—along with occasional treats such as a piece of “smoak’t venison” bought at Valley Forge in March 1778. The general’s military family after all consisted of young men who, like him, worked and ate heartily. Other minor luxuries—such as berries and fish, which everyone knew the general adored—appeared on the table as gifts from local well-wishers. Washington nevertheless insisted that Gibbs strictly record the small tips he gave to the servants and children who brought these goodies.⁸

Like adolescents, the boys of Washington’s family often disdained to eat their greens. The carnivorous propensities of his staff eventually went too far even for the general’s taste, especially when he had to entertain visitors. In August 1779 at West Point, New York, he worried about how he was going to feed a group of refined women who had announced their impending arrival at headquarters:

Since our arrival at this happy spot, we have had a Ham (sometimes a shoulder) of Bacon, to grace the head of the table—a piece of roast Beef adorns the foot—and, a small dish of Greens or Beans (almost imperceptable) decorates the center. When the Cook has a mind to cut a figure . . . we have two Beef-stake Pyes, or dishes of Crabs in addition, one on each side the center dish, dividing the space, & reducing the distance between dish & dish to about Six feet, which without them, would be near twelve a part—Of late, he has had the surprizing luck to discover, that apples will make pyes; and its a question if, amidst the violence of his efforts, we do not get one of apples instead of having both of Beef. If the ladies can put up with such entertainment, and will submit to partake of it on plates—once tin but now Iron—(not become so by the labor of scowering) I shall be happy to see them.

One necessity the general did not scrimp on was alcohol—wine, beer, cider, rum, and other beverages. He bought these in massive quantities, and often at his own expense. Drink had to be kept flowing freely, for social gatherings were frequent. In February 1780 Gibbs wrote “in haste” to assistant commissary John Chaloner: “We are out of Beer you will please send on a large Quantity as soon as possible.”⁹

The point was not to put on an appearance of false poverty—that the general and his staff should enjoy a higher standard of living was fully expected—but to avoid intimations of an aristocratic lifestyle. During the Valley Forge winter of 1777–1778, British general William Howe in occupied Philadelphia notoriously threw grand banquets for his staff and dallied with mistresses. On May 17, 1778, on the day of his departure from North America, Howe presided over an extravagant celebration that included a grand orchestra floating down the Delaware River, a faux medieval costumed tournament, a triumphal arch, and a sumptuous dinner among other entertainment. The price tag amounted to “somewhat more than 4,000 guineas, that is about 25,000 dollars.” Twelve days earlier, Washington had held a comparatively earthy and far less expensive celebration for his own army to commemorate French intervention in the war. After huzzas and the discharge of cannon and muskets, the men were given a special issue of rum and set loose to celebrate while officers enjoyed a “profusion of fat meat, strong wine and other liquors” at tables set up in the middle of camp. Washington shared the officers’ toasts, and then went off to mingle with the rum-swilling men in “mirth and rejoicing.”¹⁰

Yet no amount of revelry could compensate for a lack of basic necessities—especially pay. From the beginning and increasingly as the war went on, this was in short supply. Sometimes Washington could meet officers’ and soldiers’ immediate needs by borrowing. Ultimately, though, he depended on the states, either on their own behalf to pay militia or through Congress to pay Continentals. Because of varying conditions in the individual states—from resources to enemy occupation and the relative efficiency of government—supply was never reliable. Washington asked Congress to appoint a paymaster general, for there were limits to what he could manage on his own. Even after the office was created and the first of many appointments to it made, however, he still frequently had to intervene.

Again and again Washington had to address provincial councils and legislatures to keep troops paid, and he worked extensively with Congress as well. Rather than leave decisions about rates and frequency of pay to Congressional Committees, he instructed the delegates on how properly to recompense not just officers and men but ancillary support staff such as commissaries and wagon drivers. He even laid out standards for expense allowances, provisions, clothing, and the like. The commander in chief’s close attention to pay reflected his awareness—acquired first during the French and Indian War—of the economic costs of service to soldiers, their families, and their communities.

So diligently did Washington labor that Congress could be forgiven for sometimes thinking him capable of superhuman feats of administration. Because the delegates had made no provision for managing the army’s accounts, Washington spent much of the war handling them on his own. After six months’ toil, he could no longer drudge in silence. On January 24, 1776, he wrote to Hancock that “It would be absolutely impossible for me to go into an examination of all the Accounts Incident to this Army, & the Vouchers appertaining to them, without devoting so large a portion of my time to the business, as might not only prove injurious, but fatal to It in other respects.” Instead, he recommended “the absolute necessity of appointing fit & proper persons to Settle the accounts of this Army—to do it with precision, requires time, care & attention—the longer It is left undone, the more Intricate they will be—the more liable to error, & difficult to explain & rectify—As also the persons in whose hands they are, if disposed to take undue advantages, will be less subject to detection.” Washington’s points were both conscientious and incontrovertible. However, Congress considered his recommendation to form a select committee on forming a department of accounts—and, as would happen often, did nothing.¹¹

Frequent nudges from Washington in the spring of 1776 finally provoked the congressional bureaucracy to budge, if only an inch or two. In April, the delegates voted to create a treasury department of accounts and the post of auditor general. This was all very well, but there remained one glaring problem: the auditor general would handle civilian government accounts, but no mechanism existed for auditing army accounts even though they took up a huge portion of public expenditures.

In New York City on July 11, 1776, with the British fleet hovering menacingly offshore and an invasion imminent, Washington decided that he had had enough. In a long letter oozing frustration, he wrote: “It is with unwillingness and pain I ever repeat a request after having once made It, or take the liberty of Enforcing any opinion of mine after It is once given, but as the establishing of some Office for auditing accounts is a matter of exceeding importance to the public Interest I would beg leave once more to call the attention of Congress to an appointment competent to the purposes.” Doing so was essential for obvious reasons that Washington had shouted again and again into the congressional echo chamber—because he lacked the time to manage the accounts; because the lack of effective auditing invited corruption; and because “Accounts become perplexed and confused by long standing, and the errors therein not so discoverable as if they underwent an early revision and examination.” Though he didn’t say so to Hancock, all of these were lessons he had learned from having to audit the accounts of his own estate and others to which he had been appointed executor. This time, Congress finally responded by appointing auditors, giving Washington a little more time to prepare for battle.¹²

This incident encapsulated some of the challenges that Washington faced in maintaining amicable and efficient civil-military relations. Doing so was a matter of both political principle and practical necessity. Part of the army’s duty was to defend and enforce civilian authority. While that authority was deeply flawed—as became increasingly apparent over the course of the war—it remained a primary building block for future prosperity. Despite Washington’s Herculean (and sometimes Sisyphean) labors, Congress was far from irrelevant. Many of its delegates and presidents did yeomen’s work to get the national finances in order and develop a functioning economy. But the body was hamstrung by its limitations in drawing money from states that were all too often dilatory.

State civilian officials such as Governor Jonathan Trumbull, Sr., of Connecticut accomplished much in support of the cause, but faced internal problems and divisions that made it difficult to coordinate effectively on a national level. It fell to Washington’s lot to function as an informal chief executive, kind of an adviser-in-chief, who could mediate between states and Congress and help to coordinate policy. Some of the most important policy suggestions on financial matters small and large came from him, and he provided the impetus to push important measures through Congress. The creation of a War Office in 1776, for example—which Washington called “an event of great Importance” that “in all probability will be recorded as such in the Historic page,” was largely his idea.¹³

Congress’s many deficiencies included its inability to ensure that the army received essential supplies. Just like an estate, an army required a constant flow of food, drink, clothing, tools, building materials, and other items. It also needed things most estates could afford to do without, such as weapons and ordnance. And of course the army was much larger in terms of personnel than any estate, and it was more or less constantly on the move. Supplying these necessities involved procurement, transport, distribution—and especially payment. Congress created commissary departments to handle these duties, but over the war’s course they were frequently rearranged (in close consultation with the commander in chief) while sometimes corrupt or incompetent officials came and went.

Washington insisted that commissaries provide him with careful accounts of their expenses. He also devoted considerable energy to ensuring that they performed their work efficiently. The fact that the army had to procure supplies directly from civilian local and state civil officials, and civilian mercantile firms, instead of relying on federal agencies or contractors, added another dimension to the general’s never-ending work. He had to establish and maintain close personal relationships with civil officials, just as he would with any trading partner.

At the same time that he developed the means of procurement and supply, Washington modeled the army’s internal processes on principles of economy, self-sufficiency, and even profit. He envisioned the army as less an agency of government than a vital entity in its own right. As such, it had to learn how to sustain itself. On August 7, 1775, he established regulations for the appointment of sutlers to each regiment “to supply the different Regiments with Necessaries . . . provided the public is not to be tax’d with any Expence by the Appointment.” The sutlers could profit from their posts, but the commander in chief strictly enjoined them, in accordance with military regulations, not to attempt to “impose upon the Soldiers in the price of their goods.”¹⁴

More broadly, Washington worked to promote self-sufficiency among the soldiers and to eliminate waste. He did so not just with a view to conserving army supplies and monetary resources, but also to provide “Saving to the publick.” Because the army was such a major purchaser, resisting unnecessary expenditures would in time become a means of preventing the army from turning into too much of a catalyst for inflation—a fact of which Washington was fully aware. For similar reasons he sweated constantly over weeding out corruption from the army. He could not afford to delegate many details.¹⁵

Washington’s army held no monopoly over Continental resources. Though it depended on civilians to provide it with supplies, it also competed with them for many of the same goods. The army also competed constantly with the British and even other American armies for scarce resources, just as Mount Vernon did with rival estates. Among the commander in chief’s ongoing concerns was the problem of civilian trade with his army and with the enemy. He was aware that, in the last resort, the laws of economics trumped patriotism. Even the most well-meaning farmers and tradespeople produced and sold in accordance with their personal interests. A man seeking to feed his family and maintain his estate was more likely to listen to the hardy clink of British gold than to the feeble rustle of Continental scrip.

Still, Washington had weapons at hand. Though blessed with an already-established economy instead of having to invent one practically from scratch as the Americans did, the British fought the war in North America at the end of a desperately long supply chain. The British Isles might be resource-rich, but the king’s army in North America was by comparison impoverished. With support from the home shores intermittent and inadequate, the British depended on their ability to procure resources in America. Here they faced an impossible conundrum: Seize supplies and alienate American civilians, or pay in gold and deplete their limited reserves?

Washington understood the competition for resources from both perspectives. Throughout the war he daily studied the shifting prices of goods in town and country, and measured them against the relative procurement abilities of the Continental and British armies. Outside Boston in 1775, for example, he ordered his intelligence agents to monitor provision prices in the besieged city, and expressed his satisfaction when they rose beyond the British army’s purchasing power. He considered it one of his prime responsibilities to ensure that prices in British-held territory rose as high as possible while in American-held areas they remained relatively cheap. One of his means of doing so was to choke off routes of supply and trade.

The commander in chief never imagined that he would be able to reduce cities under British occupation—such as Boston, New York, and Philadelphia—to starvation. Indeed, he had no desire to do so—after all, if it came to that, American civilians would starve and not the British, who could simply seize what they needed. Rather, he hoped to place the British in an economic vise that kept them constantly at the cusp of having to decide whether to purchase supplies at exorbitant prices or confiscate them and infuriate (without actually starving) civilians.

Self-interest, as Washington knew, could work against the American cause just as much as it hurt the enemy. Price gouging particularly worried him. After observing prices of firewood, oats, and hay rising in the summer of 1775, he shared with the Massachusetts Council his fears that civilians were hoarding these commodities and creating “artificial Scarcity” to boost prices, with possibly “fatal” consequences for the cause. Though his opinions on price-fixing ebbed and flowed during the war depending on circumstances, on this occasion he demanded that the Council fix prices and force civilians to sell their goods if they refused to do so voluntarily. Mandatory sales were a last resort. While Washington was not averse to destroying civilian gristmills and manufactories near and within British lines—thus further driving up prices—he steadfastly refused to confiscate supplies from civilians. Morality informed this principle—but so did a conviction that he must do everything possible to uphold a functioning domestic commercial system.¹⁶

Property rights as Washington saw them were both a matter of principle and integral to a stable civil society. Protecting them was one of the reasons for which the war was being fought. With that in mind he not only insisted that his army respect private property rights but also used those rights as a motivating principle. On July 5, 1775, learning that some of his soldiers had plundered civilian property, he reminded every man in the army “that it is for the preservation of his own Rights, Liberty and Property, and those of his Fellow Countrymen, that he is now called into service: that it is unmanly and sully’s the dignity of the great cause, in which we are all engaged, to violate that property, he is called to protect.”¹⁷

Arriving in New York City the following year, Washington told his soldiers that “we come to protect; not to injure the property of any Man.” An army that was raised to protect property but lived rapaciously off the land—as many eighteenth-century armies did—would have ruined the very cause it sought to protect. Even during the darkest moments of need, therefore, Washington resisted calls to confiscate property from civilians without ample and prompt financial recompense. Individual farmers who approached him with complaints of having been mistreated in this respect—as many did—found him willing to act forcefully on their behalf.¹⁸

Here as elsewhere Washington maintained the long view. He actively encouraged civilian manufacture for military purposes, for example, not just to keep his army supplied but to encourage the growth of American industry. On August 4, 1775, he sent Governor Jonathan Trumbull, Sr., of Connecticut a pattern for uniforms “both cheap & convenient,” and asked him to purchase all available cloth and have “suitable Persons set to work to make it up” for supply to the army—incidentally helping the state to expand its fledgling textile industry. Washington offered similar encouragement to industries for the manufacture of iron, powder, ordnance, and equipment, urging John Augustine Washington to work to establish “a plenty of” those manufactories in Virginia.¹⁹

Self-interest, as the general knew, motivated production and innovation. Short-term recompense, especially as the real value of Continental currency declined, could offer only scant encouragement. Manufacturers and inventors were much more likely to be enticed by prospects of developing skills and enterprises that could flourish in the return to a civilian society after the war. He encouraged technical innovations for purely military purposes, such as inventor John Macpherson’s plan to develop explosive torpedoes that would “destroy every ministerial armed vessel in North America” or David Bushnell’s various infernal machines that included the notorious submarine Turtle. In the same spirit he would promote civilian inventions after the war had ended. America did not just need solutions to specific individual problems—it needed innovators.²⁰

WASHINGTON’S VARIED DUTIES would have been more than enough to occupy or overwhelm most generals. But military administration made up only a portion of the commander in chief’s overall scope. His belief that the contest with Great Britain was essentially economic in character despite the clash of arms motivated his vigilance about the international aspects of wartime trade and supply. On August 4, 1775, the commander in chief wrote to Rhode Island governor Nicholas Cooke about the possibility of outfitting ships to procure powder supplies from Bermuda—whose inhabitants Washington imagined as “well disposed” to the American cause—in exchange for provisions. The general even went to the point of formally inviting Bermudans to develop this trade.²¹

Bigger game lay across the Atlantic. Washington was not the only American with his eye on France, but he was among the first to seek the development of trade with this potential ally. He began with a scheme to import gunpowder from Bayonne in September 1775, and followed with fostering contracts for essential supplies such as cloth and even a variety of long-denied luxury items. He sought to handle some of these imports directly or through Congress, but in most cases he encouraged venturesome American merchants to handle the import trade. The remarkable thing was not that trade with France developed but that Washington recognized the need so quickly and acted to promote it instead of waiting for civilians to take the lead.

Washington could not take credit for the explosion of overseas imports that followed, especially after French intervention in 1778. Luminaries such as Benjamin Franklin, along with scores of now-forgotten American merchants, were primarily responsible for this, leaving Washington in the role of an interested spectator. Mounting debt did, however, concern him as the war approached its conclusion. Nor did he view exports as an unmitigated benefit, especially when they threatened to deprive the country of vital resources needed by the army. On June 9, 1776, he wrote commissary general Joseph Trumbull: “I am informed, that several Merchants are about to purchase Salt Pork for Exportation; and I would recommend it to you to apply immediately to the [Connecticut] Provincial Congress, to take some Measures to prevent them, as there is not only a Probability that it may fall into the Hands of the Enemy, but we may ’ere long experience the Want of it ourselves.” The state halted the export as he demanded.²²

Just as it had been before the war, trade was a means of carrying on the economic contest with Great Britain. Interfering with British trade and supply to its North American army was a first step. In the summer of 1775, Washington hired a fleet of Massachusetts schooners at Continental expense to operate as privateers off New England. Dubbed “Washington’s Navy,” this force continued to act under his direct authority—and outside the purview of the nascent Continental Navy—until 1777. Over the course of its escapades the little privateer fleet captured fifty-five prizes—hardly a crippling blow to the British, but an inspiration to other American privateers throughout North America. This naval venture was remarkable enough for a man who was expected to concentrate his energies on land affairs; but he also invested in the arming and equipage of privateers both to aid the cause and to generate personal income. On July 1, 1777, Washington invested several hundred pounds of Virginia currency in the privateer General Washington, which operated successfully throughout the war, even in European waters.

Washington was willing to be ruthless when it came to ratcheting up the pressure on British maritime trade and supply. In the spring of 1779, Bermuda—specifically its slaves—faced famine because of the ongoing trade embargo with the United States, and the island’s representatives petitioned Congress to allow them to purchase provisions from American merchants. Agreeing to their request seemed the profitable and humane thing to do—but Washington was unalterably opposed. Writing to then-president John Jay, he argued that refusing to help alleviate the famine would “throw many additional mouths” upon the already overburdened British supply system. “They will not and cannot,” he wrote, “let their people starve.” Fortunately for the island’s suffering slaves, this was one of Washington’s few suggestions that Congress—at French urging—ignored.²³

THE GENIUS OF WASHINGTON’S WARTIME LEADERSHIP would become apparent only with time. In the summer of 1775, it seemed that his efforts to reform the army at Cambridge were only producing more confusion. Orders descended from headquarters with studied regularity, but the commander in chief had to repeat them frequently as officers and soldiers struggled to understand their roles. Administrative solutions generated an almost infinite array of practical problems, leading men to besiege headquarters with queries and laments. At times Washington may have felt like the manager of a complaints department in some ambiguous government agency. He had to put administrative troubles out of his mind, however, as he pondered how to squeeze the British out of Boston.

Scanning British positions through his telescope, the general could not help noting the enemy’s isolation. The city sheltered sixteen thousand civilians and six thousand soldiers on a small peninsula. Their only connection to the mainland was via a narrow neck blocked by Washington’s troops. Geography made the task seem straightforward. Like a hangman, he could simply tighten the noose. To that end, he planned initially to “cut off all Communication between their Troops and the Country” and “prevent them from penetrating into the Country with Fire and Sword.” With thousands of soldiers, sailors, and civilians compressed within the city, competing for the same resources, Washington thought that “the whole Force of Great Britain in the Town and Harbour of Boston, can answer no other end than to sink her under the disgrace and weight of the expence.” Seeking to drive provision prices in Boston beyond endurance, he ordered his men to drive livestock out of reach and interdicted sea lanes with privateers. Intelligence reports told him that the strategy seemed to be working.²⁴

Time was the biggest enemy. As summer faded to autumn, the British tightened their belts and prepared for a long contest. Poring over reports at a headquarters desk that at any given time groaned under sheaves of paper, Washington marveled at the enemy’s endurance. The exorbitant costs of maintaining the Boston garrison did not seem to weaken their determination to resist. So far, the impact of the war on the British national economy—which Washington always monitored closely—seemed insignificant. News of the defeats at Lexington and Concord, he noted, had only caused stocks in London to tumble briefly by about 1.5 percent. British and royalist newspapers, which he scanned line by line, continued to boast remorselessly—almost as if the colonials, rather than their adversaries, were trapped on a tiny peninsula.

“The inactive state we lye in is exceedingly disagreeable,” the general wrote in frustration to his brother John Augustine, “especially as we can see no end to it, having had no advices lately from Great Britain to form a judgment upon.” Instead of worrying about their accounts, the enemy seemed smugly to assume that the colonists would pay for it all in the end: “The expence of this one would think must soon tire them were it not that they intend to fix all the Expence of this War upon the Colonies—if they can I suppose we shall add.” By contrast, the Americans seemed to lack resilience. Supply shortages caused officials to throw up their hands in helpless consternation while soldiers and militiamen were quick to plunder or desert. Not for the first time and certainly not for the last, Washington worried about the economic burden of carrying on the conflict over the long term. The cause, he knew, was frail. It would not take much to snuff it out.²⁵

Worried more than he would admit but disdaining to formulate strategy on the basis of vague prognostications, Washington decided (as no one in Congress or the army had done so far) to determine just how much Americans were paying to keep their army in the field. In October he ordered commissary general Joseph Trumbull and quartermaster general Thomas Mifflin to estimate how much it would cost just to feed and house his army of twenty-two thousand men through May 1776. Their response: over $730,000 in Continental dollars.

Pay was another matter entirely. Per month on average, the commander in chief reported to Congress in December, expenses for pay were $275,000. But this was not a steady expenditure. On Christmas Day of 1775, with the first Continental Army about to be dissolved and an entirely new one formed under a one-year term of enlistment, Washington demanded a report of how much it would cost to discharge pay arrearages for the old army and advance a month’s pay to the new. He learned that this transaction alone would cost a staggering $927,429.

The $2 million that Congress had authorized at the beginning of the war now looked paltry. Instead of facing up to the probability of having to commit over the long term, however, Congress insisted on authorizing money only in inadequate dribs and drabs. This forced Washington both to continue pestering the delegates for funds in increasingly large amounts and to formulate a short-term strategy based on ending the war quickly. Neither he nor Congress knew if the country could bear the cost for long.

Much of the money that Congress authorized either was issued inefficiently or disappeared before reaching its intended target. Corrupt officials plucked some of the money to line their own pockets. Other funds evaporated under the care of incompetent handlers, or because of the absence of skilled accountants. And not just public but private funds went to waste.

Patriot propagandists liked to portray Americans as a people united, eager to sacrifice self-interest for the good of the whole. In 1775 many Patriot leaders were deluded by this image into thinking that the goodness of their cause sufficed in and of itself to ensure victory. Washington disagreed. As an experienced businessman, he suspected that some of his countrymen would take advantage of wartime conditions for their personal profit. Even so, he was amazed and outraged at the extent of the problem.

Laziness, incompetence, and corruption in army and civilian financial administration were bad enough. Worse was pernicious public speculation, such as forestalling and stock jobbing, which artificially inflated prices and increased market volatility. Such practices did not just weaken the army, the states, and the government but undercut the entire economy. No topic brought Washington closer to apoplexy. To his friend and secretary Joseph Reed he wrote on November 28:

Such a dearth of Publick Spirit, & want of Virtue; such stock jobbing, and fertility in all the low Arts to obtain advantages, of one kind or another, in this great change of Military arrangement I never saw before, and pray God I may never be Witness to again. what will be the ultimate end of these Manouvres is beyond my Scan—I tremble at the prospect. . . . [C]ould I have foreseen what I have, & am like to experience, no consideration upon Earth should have induced me to accept this Command.²⁶

However much he rued it, however, Washington was an astute enough observer of human behavior—particularly in an aspiring but still unformed capitalist society—to understand that he could not just wish away this kind of behavior. It must be either endured or preempted by ending the war. If it surged out of control, it could leave the country an economic basket case.

The best solution, it seemed, was to push for an immediate and decisive victory—both to overawe the British and to convince the American people that their privations would not last for long. “The State of Inactivity, in which this Army has lain for some Time,” Washington informed Hancock, “by no means corresponds with my Wishes, by some decisive Stroke to relieve my Country from the heavy Expence, its Subsistence must create.” Delivering a “decisive Stroke” was easier said than done. Supplies—especially powder—were scarce, the troops poorly trained, the British well-entrenched, and the army’s general officers balky. Washington nevertheless repeatedly convened councils of war to consider attacking Boston in order to avoid the “Expence” of maintaining the army through the winter; but each time, the council rejected his proposals. In desperation, he asked Congress to let him burn the enemy out by means of an incendiary bombardment. The delegates sensibly refused.²⁷

While Washington simmered at Cambridge, the war took an ominous new turn. On the afternoon of October 17, 1775, four British warships anchored off Falmouth, Massachusetts—now Portland, Maine. The British commander sent an emissary ashore warning the inhabitants to evacuate as he was under orders to set the town ablaze. When a committee from the town asked why, he curtly informed them that every New England seaport was about to be destroyed—and New York as well. The next morning, the ships opened fire and part of the town burst into flames. A British landing party came ashore to finish the job. Four hundred buildings were burned to ashes, leaving more than a thousand men, women, and children homeless with the winter on the horizon.

This brazen act of terrorism was meant to shock and awe—and in that it succeeded. Washington publicly denounced the “desolation and misery” wrought by “ministerial vengeance,” but dread inwardly enveloped him as he contemplated the future. Although the British did not immediately carry out their threat of torching the entire seacoast, he expected them to begin doing so at any time. “The Ministry have begun the Destruction of our Sea Port Towns,” he announced, ordering local militias to take defensive measures that he knew would be useless.²⁸

The prospect of enemy warships penetrating the very waterways that he had promoted as avenues of commerce haunted Washington’s mind with images of Alexandria and Mount Vernon in flames. He urged Virginia to block “the Navigation of the Potomack without loss of time; conceiving, that at an Expence, not amounting to one tenth of the damage which the Estates [like his] on that River may sustain in the course of next Summer, such obstructions may be laid as to prevent any Armed Vessell from passing.” The tax burden would be heavy, but he for one was willing to pay his share.²⁹

The horror and rage that gripped America in the aftermath of the burning of Falmouth were comparable in some respects to the aftermath of 9/11. Apocalyptic visions abounded. An all-out scorched earth campaign by the British Navy would inflict almost inconceivable human misery, leaving many thousands of people homeless, and leading inevitably to disease and starvation. The economic dislocation would be catastrophic. Even if the American people managed to fight on to victory—by no means a sure thing, since soldiers might hesitate to take the field when their families were starving—their commerce would be destroyed. Rebuilding would take years, maybe decades (Falmouth did not approach recovery until the end of the century). The prospect did not weaken Washington’s will to seek victory. It did, however, reinforce his conviction that the war must be ended quickly, before war’s ravages destroyed the country.

British attacks on the principle of private property infuriated Washington and eventually transformed his attitude toward the Revolution. In the summer and early autumn of 1775, independence was still an abstract idea. He did not embrace it immediately. When further major attacks did not immediately materialize after Falmouth, the general briefly indulged the luxury of imagining it as an aberration never to be repeated. After the burning of Norfolk, Virginia, on January 1, 1776, however, he became a full-fledged advocate of independence. The destruction began when British ships opened fire on the town and landing parties came ashore to set certain Patriot-owned buildings ablaze. Patriot gangs finished the job by torching Loyalist property in revenge, and flames spread across the entire town. Unaware of the details, Washington assumed that Norfolk was the dreaded next step in a British campaign against American property and commerce. In reaction, he began for the first time to speak of “the Propriety of a Seperation” from Great Britain. In breaching the sacred principle of private property in a war against its own citizens, the ministry had renounced its right to govern. For Americans, it was no longer an option but a necessity to “shake off all Connexions with a State So unjust, & unnatural.”³⁰

With the attacks on Falmouth and Norfolk giving him both a gritty determination and a greater sense of urgency, Washington commenced his final campaign for the liberation of Boston. On January 1, even as Norfolk erupted in flames, the commander in chief began assembling a new army. The new troops were a motley bunch, scarcely better than those he had encountered the previous summer; but the general promptly set about whipping them and their officers into shape. Blizzards of paper blended with winter snowstorms as Washington’s military bureaucracy heaved into motion, and parade grounds echoed to the sounds of shouting officers and drilling soldiers.

By February the army was only marginally improved, but Washington decided that he had seen enough. Remarking that “no oppertunity can present itself earlier than my wishes,” he announced himself ready to assault Boston. His generals remained skeptical, and once again rebuffed his proposal to launch an all-out attack. They did, however, suggest placing artillery on Dorchester Heights overlooking the city. Maybe that would be enough to drive the British out. Washington quickly agreed. On the night of March 4–5, his men industriously hauled cannon that had been captured at Fort Ticonderoga atop the heights. Washington looked forward hopefully to a British assault and bloody repulse, but the enemy refused to oblige and instead evacuated the city.³¹

The commander in chief was crestfallen. He had anticipated that a battle with heavy British casualties would speed the end of the war. Thoughts of the haul of booty left behind in the city helped to boost his spirits for a time. He expected to find £30,000–40,000 worth of stores, equipment, and British property and ordered his commissaries to prepare precise returns of material that it could “turn to the public advantage.” In this he was not disappointed. However, his hopes that “we shall be able to collect some hard Money from the Inhabitants of Boston” were dashed because “the posessors of it, are not of Late accustomed to a paper Currency, and keep their Gold & Silver Close.”³²

THE WAGES OF VICTORY WERE SWEET, but the contest had only begun. The British might or might not continue their campaign of destruction on the seacoast, but their forces would certainly return, and civilian privations would increase. The main thing was to maintain unity. “Every person should be active in some department or other, without paying too much attention to private Interest,” Washington told John Augustine on March 31. “It is a great stake we are playing for, and sure we are of winning if the Cards are well managed—Inactivity in some—disaffection in others—and timidity in many, may hurt the Cause; nothing else can, for Unanimity will carry us through triumphantly in spite of every exertion of Great Britain, if link’d together in one indissoluble Band.”³³

Boston and Cambridge were hives of activity in March and April as troops assembled their gear and ox-drawn wagons heaped with supplies lumbered down the mud-choked roads leading south from the city. Washington fussily oversaw these preparations to shift the army to New York, but could not help noticing civilians carrying on business as if Massachusetts were still a British colony. Old associations died hard. There, in the harbor, stood British warships surrounded by a small fleet of civilian boats placidly selling foodstuffs and supplies. Furious, Washington stalked off to headquarters and scrawled or dictated a message demanding that the civilian authorities make a choice. “We are to consider ourselves either in a state of Peace or War with Great Britain,” he told them. “If the former why are our Ports shut up—Our Trade destroyed—Our property siezed—Our Towns burnt, and our worthy and valuable Citizens led into Captivity & suffering the most cruel hardships?” He followed this up with a proclamation on April 29 decreeing that anyone trading with the British would be treated as an enemy to the rights of the colonies.³⁴

Army expenses continued to lay heavy on the general’s mind as he rode south to New York with his mud-stained entourage. Careless financial management, he knew, could undermine military success. Although the country’s purse strings lay beyond Washington’s grasp, his efforts to tighten up military administration had a national impact. Before he arrived in the city, the New York Provincial Congress had contracted with merchant Abraham Livingston to supply army provisions at 10d. 1/2 per ration. Looking over the contract after arriving in Manhattan, Washington thought the price seemed high and demanded an investigation into alternate possibilities. Continental commissary Joseph Trumbull, it turned out, could provision the troops at 8d. 1/3 per ration. “The difference is immense,” Washington informed Congress, “as it will amount to no less than two hundred Pounds per Day for 20,000 Men.” Livingston relinquished his contract and the army purchased provisions at the lower rate. Over the following weeks Washington inspected every corner of army operations, administration, and supply to root out waste and impose thrift. He even mandated that his soldiers would have to repair their weapons—except in case of “unavoidable accidents”—at their own expense. His mother would have been proud.³⁵

The cumulative importance of these relatively inglorious measures—all but forgotten today—in boosting the country’s financial endurance would become apparent over time, but the arrival in New York Harbor of a massive enemy fleet bearing more than twenty thousand British and German troops in June and July posed more immediate dangers. Within days—weeks at the most—the Americans could expect to face a life-or-death struggle for arguably their most important city and commercial hub. The soldiers were hardly prepared for it despite months of training and preparation. A German officer on shipboard chuckled to see Americans strutting about in old-fashioned Spanish outfits or sporting “wretched farmers costume” and carrying their equipment in cloth sacks. Teenage Continentals and militiamen toyed with and often broke their weapons and other accoutrements—the wastage was astonishing. Grimly observing such antics, the commander in chief lamented that “we are not, either in Men, or Arms prepared for” the “bloody Summer” ahead.³⁶

The unpreparedness if not incompetence of his men was among the least of Washington’s worries. One of his first acts upon arriving in the city had been to drive off livestock and destroy or secure all provisions stores within range of the enemy, giving civilians chits for reimbursing their losses. Loyalist sentiment in the region was strong, however, and civilians actively traded with the enemy fleet. Washington furiously pushed forward defensive preparations, and exhorted his troops to embrace the Declaration of Independence that he had read to them on July 9. As the summer wore on, however, so did his impatience. British troops occupied Staten Island against only token American resistance. And the ever-hovering problem of finance continued to plague him. On August 19, just before the British landed to attack his forces on Long Island, he wrote worriedly to his cousin and farm manager Lund Washington about “the enormous expence” that the war was imposing on both America and Great Britain. The collapse of one, he thought, entailed the ruin of both and an impoverished future that he did not care to contemplate.³⁷

The storm broke—literally and figuratively—on the night of August 21, as a raging tempest pelted the harbor with rain and lightning that killed three American officers. The next morning fifteen thousand British and German troops crossed over from Staten Island to Long Island. With battle imminent, Washington exhorted his troops to “Remember that you are Freemen, fighting for the blessings of Liberty.” Fine words could not shore up weak and poorly prepared defenses, however, and on August 27 the enemy stormed and easily broke the American positions on Gowanus Heights. Fortunately for Washington and the American cause, British general William Howe hesitated to follow up his victory and left the last-ditch American fortifications on Brooklyn Heights unchallenged. Washington availed himself of the opportunity to withdraw his forces to Manhattan on the night of August 29–30. Two more weeks of dithering followed before the Americans began withdrawing from the lower part of the island, where they might easily have been cut off and destroyed. They pulled back just in time, for a British landing at Kip’s Bay on September 15 routed the American defenders. Looking on horrorstruck, Washington spurred his horse into a suicidal direct assault on the advancing enemy before his aides held him back. Fortunately the British failed to push inshore aggressively, giving the Americans and their despairing commander time to escape.³⁸

Depressed and considering resignation, Washington temporarily forgot some of the principles he was fighting to defend. After leaving Manhattan he asked Congress for permission to burn the city in order to make it uncomfortable if not untenable for the victorious enemy. The delegates refused. Days later, however, torch-bearing incendiaries dispersed through the city, setting much of it alight. Their identity was never ascertained, but it is plausible to suppose that they might have been acting under the orders of a commander in chief who thought he and the country had nothing left to lose. Whatever its cause, the conflagration had next to no impact on the British but resulted in severe civilian hardship and long-term economic dislocation that affected the entire region. Washington eventually learned about the fire’s impact on his countrymen, and would never again advocate policies that contradicted his hopes of emerging from the war with an intact civil society and infrastructure.

As the army limped north from Kip’s Bay and continued its slow evacuation of Manhattan, it seemed little more than a miserable remnant. The men still showed surprising pluck at times and inflicted a number of minor reverses on the cautiously pursuing enemy. Still, Washington knew that what remained of the army of 1776 would not outlast the year, even if it survived defeat in the field. The next force he led into the field had to enlist for substantially more than one year—preferably for the war’s duration—in order to give the general and his officers time to meld it into a competent fighting formation with the strength to ride out reverses and maintain pressure on the enemy. As he pondered how to get the point across to a Congress still remote from the realities of warfare, Washington understood that elemental questions came into play. Why did men fight? Would they sacrifice their prosperity for principles? For well-to-do Patriots who never had to scrounge for their bread, it was easy to demand that men live on ideals alone. Nurtured on this belief, delegates simply could not understand why such good and well-motivated men as the American Continentals continued to lose.

Washington exploded the delegates’ long-cherished fantasies in a remarkable letter to Congress on September 25. Tell the common soldier to subsist on patriotism, he demanded; the man would respond “that his pay will not support him, and he cannot ruin himself and Family to serve his Country, when every member of the community is equally Interested and benefitted by his Labours.” The general admonished Patriots to face the elemental truth that if they were to have any hope of victory, those willing to fight on “Principles of disinterestedness” were “no more than a drop in the Ocean.” The country could no longer fight the war with short-term armies and militias—or finance it in penny packets. The investment in manpower and resources had to be total. “This contest is not likely to be the Work of a day,” Washington declared; “the War must be carried on systematically.” An army must be established “upon a permanent footing.” And for that—men needed pay.³⁹

Patriot leaders had been used to thinking of pay as a detail, or at best as an ugly necessity almost too sordid to discuss. That was one reason why the states, and Congress, continued to fund the war so haphazardly. Propaganda berated British and German soldiers as mercenaries who fought for lucre; to admit that Americans needed money as well, if only to feed their families, seemed to subvert the very concept of righteous revolt. This belief in the supremacy of altruism was naïve but tenacious. It was also corrosive, gnawing away at the vitals of the American war effort.

Washington’s ruthless explosion of impractical idealism at this pivotal point of the war was both timely and essential, and constitutes one of his most outstanding contributions to independence. He argued his case logically, drawing on his incisive understanding, bred of experience in war and business, of what motivates men—and especially leaders of men. Nothing, he explained, was more important than “giving your Officers good pay.” This would “induce Gentlemen, and Men of Character to engage,” ensuring that they would be motivated both by “Principles of honour, and a spirit of enterprize.” Moreover, Washington insisted—outraging some delegates’ egalitarian principles—that officers must not receive just subsistence pay but “such allowances as will enable them to live like, and support the Characters of Gentlemen; and not be driven by a scanty pittance to the low, & dirty arts which many of them practice to filch the Public.” Paying the man who fought for you was not corrupt, but a way of preventing corruption. Moreover, it was a moral contract. “Something is due,” Washington argued, “to the Man who puts his life in his hand—hazards his health—& forsakes the Sweets of domestic enjoyments.”⁴⁰

Calling for officers and men to be paid was all very well—where would the money come from? For this Washington could offer no prescription. Though he had begun to recognize the inefficiency of a confederated government that left national funding wholly dependent on the whims of the states, there was nothing he could do to reform it. He could and did, however, assure the delegates that an army established for the duration of the war was significantly more economical than the system of militia and short-term enlistments that had so far prevailed. Getting this point across was challenging, but Washington pulled it off. Military explanations would have left the delegates unmoved. The general’s arguments based on financial prudence, however, forced them to take heed.

Washington’s contempt for the militia—what he called a “destructive, expensive, disorderly Mob”—is well known. Less well recognized is his emphasis on the second point—its wastefulness. Put simply, the militia system failed the cost-benefit test. Civilian leaders deluded themselves into thinking that militia not only obviated the dangers of a standing army taking over the country but also saved money. Not so, Washington pointed out. “Certain I am,” he told Hancock, “that it would be cheaper to keep 50 or 100,000 Men in constant pay than to depend upon half the number, and supply the other half occasionally by Militia.”⁴¹

The system’s costs were enormous. Since most militiamen were farmers and simple manufacturers, and since the military campaigning season coincided with the spring planting and fall harvest, calling them out almost always resulted in “farming & manufactures in a manner suspended,” with resulting economic dislocation. Moreover, the time militiamen spent “in pay before and after they are in Camp, Assembling & Marching—the waste of Ammunition—the consumption of Stores, which in spite of every Resolution, & requisition of Congress they must be furnished with, or sent home—added to other incidental expences consequent upon their coming, and conduct in Camp, surpasses all Idea; and destroys every kind of regularity & oeconomy which you could establish among fixed and Settled Troops; and will in my opinion prove (if the scheme is adhered to) the Ruin of our Cause.”⁴²

Washington was not the first American to recognize or even act upon the fact that money motivated men to enlist. Even as he wrote his letter to Congress, states desperate to fill up their enlistment quotas bribed potential recruits with additional bounties of up to twenty shillings per month. The upshot of what Washington called these “fatal & mistaken” policies was to create bidding wars as privates from Massachusetts, for example, demanded the same bounties that their counterparts received in Connecticut. Left unchecked, state bounties would send inflation spiraling out of control and lead to fiscal disaster. Washington’s intervention played a crucial role in leading Congress to crack down on the practice.⁴³

In place of ad hoc measures and state bidding wars, Washington offered a national system—one that could endure for the war but also be adjusted by Congress as circumstances dictated. His plan for a long-term army establishment was long not just on justifications but on specifics as well. To it he appended a detailed plan of proposed pay rates broken down by rank. The delegates hesitated, but after some further prodding Washington got his wish. From 1777 onward, men enlisted in the army for three years or the duration of the war, and they and their officers were granted adequate if not extravagant rates of pay. Though not immediate, the military ramifications of this decision—made in large part for economic reasons laid out by the commander in chief—would be dramatic.

DISASTERS IN THE FIELD overshadowed legislative victories in the fall and winter of 1776. Exploding out of Manhattan into New Jersey, British forces rumbled victoriously toward the Delaware River, driving all before them. Washington’s army shriveled to a dismal rump, withdrawing into Pennsylvania in a series of small detachments. On December 12, confessedly unable to cope with the crisis, Congress granted the commander in chief substantial short-term powers to manage national affairs in its absence. The body then dissolved. For the next few months, Washington would essentially run the country on his own.

The general foresaw both military challenges and economic hardships ahead as his country crumbled around him. “I think the game will be pretty well up,” he told Lund on December 17, “as from disaffection, and want of spirit & fortitude, the Inhabitants instead of resistance, are offering Submission, & taking protections from Genl Howe in Jersey.” He did not “apprehend half so much danger from Howes Army, as from the disaffection of the three States of New York, Jersey & Pensylvania.” These were no mere complaints, but practical observations made on the basis of experience. New Jersey militiamen “either from fear or disaffection, almost to a man, refused to turn out.” Pennsylvanians, reeling from financial privations and despairing of victory, “I am told exult at the Approach of the Enemy and our late Misfortunes.”⁴⁴

None of Washington’s wartime experiences traumatized him so much as these. Motivating men to enlist and fight was a challenge. Convincing them just to carry on the struggle and not to make terms with the enemy was both vital and exponentially more difficult. Patriots and Loyalists talked tough, but for the most part they were not fixed categories. Fanatics aside, Washington understood that each person at every moment had to make a moral decision based on circumstances. And everyone had a breaking point. A firm patriot at one moment might at the next find his farm wrecked and his family starving and decide to treat with the enemy. Call him a traitor if you would; but the needs of survival established a basic human calculus.

The “Treachery and defection of those, who stood foremost in the Opposition, while Fortune smiled upon us, make me fearful that many more will follow their Example,” the general worried. “By using their Influence with some, and working upon the Fears of others,” he thought they might “extend the Circle so as to take in whole Towns, Counties, nay Provinces.” As individuals and in the aggregate, people would come to terms with whatever power offered them financial security and prosperity: the same considerations that had driven revolution could drive reconciliation. In December 1776, it seemed that Washington’s army and the whole assembly of Patriot leaders in and out of Congress could offer the American people only ruin. Why, then, should they continue the struggle?⁴⁵

Men like Tom Paine spoke of hope, and to some degree enkindled it. By the fall of 1776, though, talk was cheap. Actually restoring hope—real, physical hope—was Washington’s business. He could not reform the government, or command the economy. Though he could establish long-term plans for a stable army, these would do nothing to turn the tables in the short term. With his current army down to a few thousand scraggly men, he could not even dream of inflicting a militarily significant defeat on the British army. His early aspirations for a decisive stroke to end the war were by now long out of view. What he could do, however, was to use his small force as a tangible (as opposed to a rhetorical) symbol of hope to restore public confidence. “I am certain that the Defection of the people in the lower part of Jersey,” he told one of his generals on December 18, “has been as much owing to the want of an Army to look the Enemy in the Face, as to any other Cause.” Trenton’s genesis lay in this observation.⁴⁶

By December 20 Washington had assembled six thousand men, enough to strike what he hoped would be a “lucky blow” sufficient to “raise the spirits of the People, which are quite sunk by our late misfortunes.” No American general ever worked harder to cobble together such a tiny force for such an important mission. After a secret nighttime council of war on December 22, Washington and his officers decided to launch a daring attack across the Delaware River against a German outpost at Trenton. On Christmas Eve, seemingly “much depressed” as he contemplated the stakes for which he was playing, the general penned the sentinels’ passwords for the following evening: Victory or Death. Twenty-four hours later he led his troops through a swirling snowstorm down to the river.⁴⁷

Thoughts of money did nothing to inspire the men who clutched freezing fingers to the oars and gunwales of the Durham boats that crossed the Delaware, and who left bloody footprints in the snow on the road to Trenton on Christmas night, 1776. Visions of liberty may or may not have flitted across their minds. Without question, the shivering Continentals brooded about their families and what would happen to them if Washington’s mad attack failed. That attack’s improbable success against all odds inspired and continues to inspire millions. For the men of ’76, however, victory could not drive hard realities from their minds. As the Hessian prisoners captured at Trenton shuffled off, the Continentals unanimously determined either to go home as their enlistments expired or to be paid overtime—ample overtime.

Though distressed by their reluctance, Washington sympathized with them too much to be angry. Other men would bring to camp the hard currency that kept the soldiers in service and set them on the road to Princeton in January 1777—a campaign that would eventually rout the British from New Jersey. It was Washington, though, who identified the need for cash and argued that his men should receive it as both a prerequisite and a right. Podium Patriots spoke of abstract principles. When Washington addressed his men, by contrast, he warned them of the “ravage and a deprivation of property” that they could expect from the British if they failed to resist. This simultaneous recognition of and appeal to their livelihoods established the terms of a contract between commander and soldiers that would endure for the remainder of the war. They were his to be led—and he was their advocate.⁴⁸

THE TRENTON-PRINCETON CAMPAIGN ended with the British pulling back to New Brunswick and the Continental Army filing into winter camp at Morristown, New Jersey. There the work of building an army began anew. Washington spent long daytime and evening hours hunched over his desk, poring over reports and drawing up schemata for army arrangement. Around him bustled a platoon of secretaries and aides-de-camp. One of them, twenty-year-old Alexander Hamilton, displayed record-keeping skills almost as impressive as his ability to attract women. A steady stream of visitors, from humble farmers walking hat-in-hand to somber delegates, and from privates to generals, ensured that the commander in chief had little opportunity to relax. This time, though, Washington could look on his work with some expectation of permanence. The administrative framework that he established would remain in place until the enemy called it quits.

Still acting under the extraordinary powers granted him by Congress—which expired after six months—Washington appointed commissaries and other military administrators, recruited and arranged units, and reformed regulations at will without having to seek approval from civilian committees. Congress would approve all of his measures retroactively. Only time, though, could undo the traumas of the previous winter. While the army had undergone many trials, American civilians had arguably suffered more. And their woes continued. New York City’s loss and partial destruction dealt a severe blow to surrounding counties that had depended upon it for commerce and trade. Lower New York and much of New Jersey still reeled from the ravages of the previous autumn, when enemy troops had seized supplies, burned or looted farms, and committed widespread murder and rape.

Areas spared of fighting were also hard hit. Export industries in both agriculture and manufacturing withered along with others, such as the New England fisheries, which were dependent upon free navigation. Congress had opened trade with the nations of Continental Europe and their colonies, but these markets were excruciatingly slow to develop under the dual pressures of the British blockade and the collapse (until privateering got well under way) of American shipbuilding. On top of this came the dramatic and continuing rise in military expenditures with its consequent increase in taxation. While few were actually starving, hardships were intense and widespread.

Civil distress had a tangible impact on military affairs. For one thing, recruiting lagged well behind expectations. Washington had correctly identified pay as a pivotal factor in retaining officers and attracting recruits. In times of trial, however, men instinctively preferred to stay home to tend to farms, businesses, and families. Pay rates and bounties could be elevated, but by how much?

The instability of Continental scrip complicated the problem. Civilians nervously hoarded hard money in preference to both state and Continental paper currency, severely undercutting the dollar. And though Congress had established a Continental Loan Office “to restore the Credit of the Continental Currency,” its credit had collapsed with the catastrophes of the previous fall and no long-term fix seemed possible. This left Washington and the civil authorities facing yet another conundrum: Pay officers and men more, further driving inflation? Or, hold firm and watch them stay away or resign in droves (as many did) because their pay could not defray their expenditures let alone support their families?⁴⁹

Piling injury upon injury, the canny British began a campaign to destabilize American finances by surreptitiously distributing counterfeit currency. Despite the death penalty for counterfeiters, this problem would continue unabated. Moreover, the British exploited pay shortages and depreciation to bribe troops into deserting and turning over their arms in return for hard currency or bounty lands.

Washington could do little to hold back the inflationary tide except to issue and enforce regulations that generally addressed symptoms rather than causes. He could also lecture anyone who would listen about root principles. In May 1777, one of his generals reported news of an American officer who had been caught passing off counterfeit money to recruits while pilfering the genuine article. “Money is the sinews of War,” Washington wrote in response. “That in which we are engaged is a just One, and we have no means of carrying it on, but by the Continental or State Notes. Whoever attempts to destroy their credit, particularly that of those, emitted by the United States, is a flagitious Offender & should forfeit his life, to satisfie the demands of public justice.” Alarmed as British counterfeiting grew increasingly widespread, he exhorted Congress: “Nothing therefore has a greater claim to the close attention of Congress, than the Counteraction of this part of their diabolical Scheme—every thing depends upon it.” He and the delegates knew, however, that they were practically powerless to halt the practice.⁵⁰

THE ARMY THAT CONDUCTED the summer and autumn campaign of 1777 was better organized than any that had preceded it, but still unstable. Recruiting had finally picked up in the late spring. Training, however, remained incomplete and supplies such as ordnance and clothing were lacking. Worse, although Washington had labored heroically to establish an efficient military administration, he had of necessity to rely upon untested men to fill important offices. Some of these would turn out to be incompetent or corrupt.

Washington had to work with the tools at hand, however, and as the British army launched an inconclusive spring campaign in New Jersey and then boarded ships for an undisclosed destination in July, he had no choice but to take the field. For a month he marched his army back and forth in brutal summer heat until the British landed at Head of Elk, Maryland, on August 25 and commenced their march on Philadelphia. Washington drove his force south to intercept them, but suffered a severe defeat at Brandywine on September 11. The British forces, commanded by General Howe, occupied Philadelphia on September 26 and then beat off an American surprise attack at Germantown on October 4. Over the weeks that followed, Washington tried and ultimately failed to hold on to a series of forts along the Delaware River that would have made it difficult if not impossible for the British to keep the city supplied. December found Washington and his army at Whitemarsh, Pennsylvania, reeling from a series of defeats and wondering where they would spend the winter.

In seizing Philadelphia, Howe had hoped to exploit what he thought was a vast undercurrent of loyalism in the mid-Atlantic and to reassert royal control over the region. He would have done better to think, as Washington did, of how to appeal to American civilians’ self-interest. The winter of 1777–1778 would demonstrate once again that while some civilians were too patriotic to regard their pocketbooks, many—enough to have made a difference if the British had made a concerted effort to reach them—were not. For them, the decision of whether to side with Loyalists or Patriots boiled down to survival—or, less dramatically but just as fundamentally, to a choice between mere subsistence versus profit. It was a war not just of hearts and minds, but of stomachs.

Facing these realities, Washington spent less time worrying about his military defeats than he did about money. By this point he and his staff and field officers were all stridently warning that currency depreciation demanded desperate measures—including military action—to restore public credit before the economy collapsed. “The Depreciation of the Currency of these States, Points out the Immediate necessity of giving the enemy Battle,” said General “Mad” Anthony Wayne to a chorus of approval from many of Washington’s deputies. Calmer heads, such as Henry Knox, advised the commander in chief that although inflation had become dangerous, measures that the states had taken to raise taxes still might hold it back, obviating the need for “some desperate attack.” Washington to some extent agreed, writing of “the indispensable necessity of a Tax for the purpose of sinking the Paper money” and advocating targeted price regulations. Still, though, he believed (as Trenton had taught him) that the army’s actions played an important role in maintaining public credit. This belief would set him on the road to Valley Forge.⁵¹

There were two basic options for the winter camp of 1777–1778. The first—and by far the most popular with officers and men—was to retire to a settled location such as York, Pennsylvania. There the army could recuperate and train at leisure, with the troops well sheltered, amply supplied (utilizing already-established routes of communication and commerce), safe from enemy attack, and able to gather their strength for the coming campaign. The most obvious disadvantage of that option was that it would leave the British secure and in control of Philadelphia’s mid-Atlantic commerce. The second option was to choose a location closer—but not too close—to the city, from which the Continental Army could pressure the enemy and contest control of the surrounding region. In that case, though, the Americans would have to construct their own shelter, forge new lines of communication and supply, and keep on guard against British attack.

Washington was not initially predisposed toward either option, and polled his officers on their opinions. They were divided; but the man the commander in chief trusted most had no doubts as to the wisest course. In choosing an encampment, General Nathanael Greene told Washington on December 1 that “an appearance should be kept up as much as possible of besieging the enemy, not only to cover the country but to preserve the credit of our currency which will always rise and fall as our army appears superiour or inferior to the enemy.” Greene recommended Valley Forge, and Washington, ever the businessman, agreed.⁵²

Valley Forge typically conjures up images of cold, squalor, and hopelessness. Shortly after arriving in camp, many of the soldiers assembled to raucously protest the fetid meat the commissaries had seen fit to feed them. Hooting like owls and cawing like crows, they hinted that the commissaries might join them after a course of tarring and feathering. The men were placated with promises, for a time; but as the protest suggested, none of them were going to sit around in the slush and simply endure their misery. Valley Forge was in fact perhaps the most active winter encampment of the entire war.

The encampment’s two primary and obviously interrelated themes were supply and commerce. Supplying the soldiers was of course a priority. Washington visibly worked himself almost to exhaustion on their behalf. To do so, however, he had both to develop efficient systems of procurement and distribution and to compete effectively for resources. Confiscation was not an option. This meant that the army had to convince civilians that it was in their interest, both ideologically and financially, to supply the army. Success in establishing commerce with civilians would improve public credit and thereby strengthen Continental currency.

A parallel objective in the competition for civilian commerce was to exclude the British from the market. This could only partly be achieved militarily—by using cavalry and militia to interdict supply lines. Legal coercion could also only have a marginal effect, given the limited reach of military and civil justice at the border of two contesting armies. Civilians would have to be convinced that it was not in their interest ideologically or financially to trade with the British. The contest for hearts and minds was elementally a struggle for commerce.

Ensuring supply to the American army boiled down, first and foremost, to establishing effective military administration. Major shortages of food, clothing, and other essentials, owing to the corruption and ineffectiveness of individuals as well as organization inefficiencies, induced Washington to conduct a major overhaul of army administration. He carried out the lion’s share of this work on his own, developing detailed plans and passing them on to Congress for execution. His forty-one-page letter of January 29, 1778, to a Congressional Committee on army reform must have astonished the delegates with its detailed, top-to-bottom prescriptions. Once again he zeroed in on pay as a prerequisite for improvement. “Besides feeding and cloathing a soldier well,” Washington wrote, “nothing is of greater importance than paying him with punctuality.” By February, thanks to Congress’s inherent difficulties in raising funds from the states and disbursing them to the army, pay was on average at least three months in arrears.⁵³

Washington vehemently protested but could not solve this problem, the causes of which lay beyond his purview. He could and did, however, reaffirm the old mantras of economy and self-sufficiency. Total self-sufficiency was of course out of the question. The commander in chief nevertheless issued careful instructions to the troops for constructing log huts, making soap, bartering hides for dressed leather to make shoes, and practicing other daily economies to reduce expense. He trumpeted “a new fashion which I think will save Cloth—be made up quicker and cheaper and yet be more warm and convenient to the Soldier.” He promoted industriousness by creating “Laboratory Companies” made up of convalescent soldiers for the manufacture of ordnance and stores, and ordered each army division to establish a “Travelling Forge” for the repair of weapons and equipment. Even Washington’s oft-cited proscriptions against gambling had less to do with moral abhorrence (after all, he had often gambled himself) than with a conviction that the money “Squander’d” in the process could have been devoted to necessities.⁵⁴

Administrative reforms and economies dovetailed with Washington’s objectives in the contest for civilian commerce. His first steps in this realm were repressive, as he demanded “immediate & Coercive Measures” by civil and military authority to halt civilian trade with Philadelphia. He also sent troops to steal or break millstones at gristmills near the city to shut down flour production. But these were only stopgaps.⁵⁵

More positively, Washington established Valley Forge as a hub of commerce resembling in some aspects a small city. After a series of close consultations with local farmers and tradespeople to determine supply, demand, and, above all, fair prices, he opened a “public market” at the camp where civilians could sell or trade their wares directly with the army. By the late winter and early spring of 1778 it had become an active and profitable concern, jammed on market days with milling crowds of soldiers and civilians who established a free intercourse of mutual interest.⁵⁶

Here and in transactions taking place further in the country, Washington insisted on the use of Continental currency and forbade confiscations that would “have the most pernicious consequence . . . spreading disaffection—jealousy & fear in the people.” That the bills of credit his agents provided were honored by Congress only after long delays—ironically further injuring public credit—was not Washington’s fault. He did his best, as everyone knew, to treat civilians fairly, and encouraged farmers and tradespeople not just to subsist but to profit.⁵⁷

Market forces, Washington hoped, would operate of their own accord for the army’s and the public’s benefit. Only in exceptional cases did he countenance state intervention in the manufacture of ordnance and other necessities, as for example when he learned that an important lead mine in the Allegheny foothills had been infested by squatters who impeded its production. “The Mine ought or may at least for the present,” he suggested to the Pennsylvania government, “be seized by, and belong to the State . . . that private persons who without right may have sat down on that reserved Tract [may not] be admitted to make a monopoly of the Mine.”⁵⁸

The general likewise hoped that free commerce would of itself suffice to “fix a value . . . upon that [paper currency] which is to be the medium of our internal commerce, and the support of the War.” Unfortunately, the same price-gouging practices that had appeared earlier in the war emerged at Valley Forge with redoubled force. Their first appearance left him baffled. While asking Congress to find a solution, he confessed that “I know not how it is to be effected.” Finally, he asked the states to institute price-fixing measures to circumscribe the avarice of greedy farmers and imposed controls on sutlers seeking to market their wares in camp.⁵⁹

Washington knew that such policies would be ineffective over the long term. In November 1777 Congress asked the New England states to appoint commissioners “to regulate and ascertain the price of labour, manufactures, internal produce, and commodities imported from foreign parts, military stores excepted.” Most states complied, but the measure backfired; for by keeping prices artificially low it created a dangerous scarcity of meat as farmers refused to sell their livestock. Seeing this, Washington pressured Congress and the states to ease off, and most of the price-fixing measures were repealed.⁶⁰

The ugly truth was that nothing Washington or the civil authorities did could make the money problem go away. The states had endemic problems of their own, while Congress’s attempts to raise money without printing it were sometimes almost comical in their futility. Continental lotteries, established in hopes of raising revenue at the distant prospect of substantial reward, were without exception miserable failures as sales stayed low and the government lost rather than earned money. Rail though he did against speculation that debased the Continental currency, Washington could understand and even empathize with civilians’ continuing reluctance to trust paper money.

The general was of course not immune to the immutable laws of self-interest. In instructions to Mount Vernon’s farm manager, his cousin Lund Washington, the commander in chief urged him to discretely invest wealth in land and hard currency while avoiding paper. Like the army, the estate at Mount Vernon was a significant part but still just a part of a larger whole. The sputtering economy could not be repaired without the implementation of national measures that were ultimately dependent on peace. Measures such as opening a market at Valley Forge could create a community of interest and help to build public credit, but not permanently establish it. Until then, just getting by was an accomplishment in and of itself.

The Continental Army emerged from Valley Forge in the spring of 1778 stronger than it had entered. There were many reasons for this, including the dedicated hard work of Washington and his officers, and the heroic perseverance of his men. Fundamentally, though, in winning the contest of supply and commerce the army had also secured victory in the battle for hearts and minds.

The British, who had relied in large part on overseas supply, had failed to establish the kind of extensive civilian commerce that might have generated sympathy or outright Loyalist sentiment. Instead, they had relied on their (increasingly limited) supplies of hard currency to entice civilian trade—partially curtailed anyway thanks to American military interdiction—and confiscated without recompense what they could not purchase. General Howe’s dream of an upswell in pro-British feeling never materialized. This was not so much because his army lacked the means to impose military control but because it and the loyalists who supported it failed to emerge with the mass of the population as partners rather than adversaries.

Washington, by contrast, operated within a system that respected private property while pushing commercial intercourse that encouraged legitimate profit. His communications with local officials, farmers, and tradesmen demonstrated his acknowledgment of civil authority. It was in thousands of everyday individual transactions, though—from commissaries purchasing grain from farmers, to soldiers haggling with vendors over turnips and camp kettles in the Valley Forge market—that established the army as a partner to civil society in the common struggle against British imperial domination. Valley Forge cemented Washington’s leadership among the soldiers, who came to love him for his attention to the fundamental details that determined whether they lived or died. It also established a vital bond between soldier and civilians. The bond would be tested, but thanks to Washington it would never break.