21-BANK OF NORTH AMERICA

Mayer may have been busy in Frankfurt supervising the construction of Grunenburg Schloss, but American Independence and French aid to America was what foremost on his mind. After the Trenton defection of nearly 900 Hessians in 1776, and especially after the capture of Burgoyne’s army in Saratoga, in 1777, Louis XVI, impressed with Benjamin Franklin as a man and in awe of the American victories, had seized the moment and signed the Treaty of Alliance with the 13 Colonies, thus declaring war on England in the process. As of that moment, thanks to Benjamin Franklin’s diplomatic skills, France had decided to come to America’s aid.

The English High Command retaliated by attacking the French fleet which was in the Caribbean. Clinton, the new commander of the British forces, then sent Cornwallis to re-establish control over the southern colonies. Cornwallis’ army won major victories in Charlestown and Camden, but the English Navy had a bad time of it in the Caribbean. To make matters worse for the English, the American general, Nathaniel Greene, started hit and run tactics against Cornwallis, forcing the latter to chase him throughout the Carolinas. Eventually, Clinton had Cornwallis rest his demoralized army in the ice-free port of Yorktown in Chesapeake Bay. Clinton intended to resupply him as needed, and Cornwallis was to go back on the offensive after a much needed rest. But they hadn’t taken into account General Rochambeau, Commander-in-Chief of the French forces, and a great military strategist.

Rochambeau was a professional soldier trained in the art of warfare, and he singlehandedly coordinated the military operations that would lead to the Yorktown victory. He marched his very well rested and disciplined army out of Newport towards New York City, and as planned, he met up with Washington’s army at Wethersfield, Connecticut, in late May. When Rochambeau saw Washington’s army in tatters, he realized there was mutiny in the air. The troops had had it with Washington’s leadership and his ‘military family’, a group of young aides-de-camp who rode well bred horses with fine saddlery and spent a lot of time feasting with the General. So, Rochambeau proceeded to pay the American troops what was owed them, gave them food, proper uniforms and much needed military supplies. The allies then got ready to attack New York City. But when Rochambeau got word that Admiral de Grasse had defeated the English in the Caribbean, he had a change of plan.

He knew Cornwallis’ army was recovering in Yorktown and realized how vulnerable it was. It was obvious that defeating Cornwallis’ army would be easier and have a greater impact than facing Clinton’s well-entrenched and well-supplied army in New York City. After convincing Washington, he sent word to Admiral de Grasse in the Caribbean and Admiral de Barras in Newport informing them of his change of plans. Luckily for everybody, the two admirals agreed to go along with Rochambeau, and both headed for Chesapeake Bay. Admiral de Grasse got there first and easily defeated the English fleet off the Virginia coast, while Admiral de Barras arrived from Newport and blockaded Cornwallis’ army by positioning his fleet at the mouth of the York River. Having joined forces, the two French fleets easily outnumbered anything the British were able to muster. When Rochambeau and Washington arrived at Yorktown, they had the troops dig a siege line behind Cornwallis’ position, thus entrapping his army. The allies then tightened their stranglehold, digging a second siege line closer to Cornwallis’ army. As the naval and land artillery kept pounding away from both front and rear, Cornwallis didn’t have a chance. The English redoubts were taken one by one, forcing Cornwallis to surrender. When the English Parliamentarians learned they had lost another army, they decided to put an end to the war, but it wasn’t to be made official for another two years.

Meanwhile, in Frankfurt, Mayer was telling Gretel, his only confidante, how Haym had convinced a lot of Hessians to defect while he was under house arrest, and how Haym had later been named broker to the French Consul, and Treasurer of the French Army when he arrived in Philadelphia. Haym had then made sure the French army, as well as Washington’s army, the 13 militias, and the politicians had everything they needed. But now that the politicians were about to take over, Mayer hated to tell Gretel that he had chosen Robert Morris instead of Haym as the one to deal with Congress. Because America was no more ready than Europe to accept Jews in a leadership role, it was Robert Morris, a goy, who would look after Mayer’s finances in 1781. The continental currency that Congress had issued at the start of the war and that had somewhat helped to finance the war had by now completely depreciated. Fortunately for Congress and for Mayer, the ‘Morris Notes’ backed by the French gold had replaced the worthless currency.

When Gretel asked if Mayer has stolen the French gold, Mayer gives her a long homily on the magic of gold. He starts by telling her that it was officially all spent but that it remained stockpiled in his vaults. He continues by saying there are two ways of looking at gold bullion. The first is where the owner uses it to further his personal ambition in order to gain influence, and the second is where it is used to establish a credit system and to build a monetary system like Mayer was doing. The gold provided by France was doing what it was supposed to do. It was helping America win the war like Louis XVI had wanted, but it would do much more than that, it would help create a government, a country and an economy. When gold bullion is used to make more credit available, it becomes the cornerstone of the economic structure, whereas it accomplishes nothing if used as currency. Gold bullion is meant to be gathered in a pile, as huge as possible, and the pile is meant to remain inviolate and observable. The notes and the bills are issued and spent, but the gold stays in a neat pile. The banker who possesses the gold can issue bills of exchange in which everybody has the highest confidence, and as the pile of gold grows, it acts as a starter or mother for more notes and more bills. Confidence in the bills issued is what makes it all possible. Of course, the process of creating credit makes the gold holder richer, but beyond a certain point, getting rich is no longer the point, amassing more bullion and shoring up the monetary system is.

Creating credit is akin to controlling the monetary system, and controlling the monetary system isn’t about increasing the wealth of one individual, for that’s already a given in Mayer’s case, it’s about pointing the economy or the country in the desired direction and creating more credit and more wealth, and buying more gold. Elected individuals can’t possibly control a monetary system, for they are too subjective and think too short-term, and the monetary system is sure to founder under the weight of their greed, corruption and short-sightedness. Only objective private interests totally intent on building thriving market economies can succeed. However, because the privately owned Bank of England was myopic and parochial in nature, contrary to Mayer’s bank that was international in nature, his bank would one day take over the prestigious Bank of England.

He continued by giving a brief account of what had been accomplished so far. The Bank of North America had been created on May 26, 1781 by the Confederation Congress, at which time, Alexander Hamilton had recommended Morris for the position of Superintendent of Finance. The constitution for the Bank of North America had been drafted by Alexander and was modeled after the Bank of England. Morris had then submitted his legislative proposal based on that draft, and that’s how Mayer’s bank became the first private commercial bank in the USA.

When Robert Morris became superintendent of finance the continental currency had ceased to be issued. On April 30, 1781, Alexander Hamilton was advised to tell Morris that the bank’s capital would consist of 1,000 shares priced at $400 each. When Mayer offered Benjamin Franklin, who was still in France, a symbolic share in order to show the great American’s faith in the Federalists and his confidence in the new bank, he readily accepted. Thomas Willing, the original President of the bank of Philadelphia, and William Bingham, were both given shares as well. But Robert Morris held more than 90% of the shares, thanks to the French gold in his possession.

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20-WORKING FOR INDEPENDENCE

Franklin left Philadelphia on the 26th of October, accompanied by his son, William Temple Franklin, and his grandson Benjamin Franklin Bache, son of Sarah. Sarah was the daughter he had with Deborah Read, his common-law wife.

They sailed on board the Continental sloop-of-war Reprisal which carried sixteen guns. He had to be protected, for if Franklin had been captured by the English on the high seas he would have been hanged for treason. The 70-year-old American, widely referred to by the English as ‘chief of the rebels’ or as ‘General Franklin’, was deemed dangerous. The British Ambassador to France expressed his regrets that some English frigate had not met and dispensed with him on the high seas. However, he landed at Auray on the Loire River and made his way to Nantes with great difficulty. From there, the 250-mile trip into Paris was like a triumphal procession. He was wined and dined by scientific and literary notables on the way, and his entry into Paris caused a sensation.

Franklin’s fame was due not only to his scientific reputation, but also to the French rage for what philosopher Rousseau called ‘the natural man’. There was a vogue for things American in France at this time. Many French intellectuals looked to America as a new world, a fresh world, a world where human nature was closer to its natural origins. And Franklin, of course, was more than pleased to cater to French expectations. When he arrived in Paris, he was wearing a little fur cap to keep his bald head warm. To the French, the hat was the embodiment of the rugged American frontiersman and proof that Franklin was a true ‘natural man’. Even though no one knew what exactly he was doing in France, the French welcomed him with open arms, and he became a pop culture icon. Images of Franklin, wearing a fur cap instead of a wig, were depicted in paintings, engravings, medallions, rings, and snuffboxes.

After the Battle of Saratoga and the humiliating defeat of the British army commanded by General Burgoyne, Franklin, in spite of his struggling with the French language, used his charm, wit, and knowledge, to parlay this English defeat at the hands of American militias into a gigantic diplomatic victory. The French foreign minister, Count of Vergennes, wasted no time in officially acknowledging that the United States was an independent country. A formal treaty with France followed in 1778.

When he first arrived in Paris, Benjamin settled in Passy, a very affluent part of the city. It was necessary to seek out the French elite in order to achieve his goal. He had no direct access to the King, but he could influence those around him in order to get financial and military aid for America. He decided to do this in two ways. He would seek out the most select salon he could find, and since he was a freemason, he would frequent a local lodge, where the great men of the day, the enlightened ones, were members.

Upon his arrival he was introduced to the salon of Mme Helvetius in Auteuil. At the relatively late age of 29, Mme Helvetius had married the French philosopher and poet, Claude Adrien Helvétius, who had amassed a fortune as a Farmers General tax collector. The couple settled in the Paris suburb of Auteuil, and Minette, as she was called, opened a salon where she entertained some of the greatest figures of the Age of Enlightenment. Among them were Suzanne Necker, Diderot, Duclos, André Chénier, Condorcet, l’Abbé Sieyès, Buffon, Condillac, d’Alembert, Lavoisier, and such politicians as Malesherbes, Talleyrand, Madame Roland, Mirabeau, just to name a few.

Twenty years into her marriage, her husband died, and in 1776, she and Jérôme de Lalande opened the ‘Loge des Neuf Sœurs’, a masonic lodge that was affiliated to the Grand Orient of France. Freemasonry was incontestably one of the factors of the great changes that were taking place in the west. It was where new ideas were expressed, and from where men influenced the course of events. Of course, Benjamin frequented that French lodge from the very start. Two years later, in 1778, he was initiated as a member, and, in 1779, he was made Worshipful Master. A few weeks before his death, Voltaire was initiated as a member, and Benjamin was greatly impressed with the man. They became good friends, and when asked by Benjamin, he even gave his blessings to his grandson. Needless to say, the lodge was an excellent way for Benjamin to meet great men who had influence in the highest levels of society.

But Benjamin was also a ladies’ man. His wife had died in 1774, and in spite of his age, while in France, he was treated like a rock star, and he couldn’t help being a flirt. One lady whom he considered his equal was Mme Helvetius, and he may have even proposed to her. One thing for sure, he wanted to share her bed. He called her Notre Dame, and in one of his notes to her, he writes: ‘if Notre Dame is pleased to spend her days with Franklin, he would be just as pleased to spend his nights with her; and since he has already given her so many of his days, although he has so few left to give, she seems ungrateful in never giving him one of her nights’.

Franklin frequented the upper classes and the aristocrats, for they were the ones he had to convince in order for them to convince the king. The salon of Mme Helvetius and the Lodge of the Nine Sisters served his purpose well, but that was not his only activity. He was in constant communication with Robert Morris in Philadelphia, because, as arranged by Mayer, he depended on his financial help. There was a four-way communication between Mayer, David Schiff, Robert Morris and Benjamin because arms, clothing and war material shipments to America had to be organized as well. Because Benjamin had so many important contacts in Paris, and because he was such a hit with the French, he had been able to convince Minister Vergennes to replace the outdated arms in France’s numerous arsenals and send them to America. The arms then found their way to Rotterdam from where David shipped them to America through St. Eustatius. So, from 1776 to 1778 ever more arms and powder made their way to America.

Back in NYC, in 1776, after being arrested by the English for helping the Sons of Freedom, Haym had started interpreting for the Hessians. That’s when he befriended Colonel Johann Rall, a Hessian, and by pulling all the right strings, he managed to have him command the Hessian troops sent to hold the Trenton position opposite Philadelphia. Haym had explained to Rall that Philadelphia was a community made up of Germans who had come from the Frankfurt region just like them, and if they were to defect, not only would they feel at home but they would be given large parcels of land and enough money to start a new life. The Trenton Hessian soldier pickup was a total success, more than 900 Hessians crossed the Delaware with Washington’s help. More importantly, it was construed as a major American victory over the English, and it gave quite a boost to American morale.

Later, on July 12th, 1778, when the French Ambassador sailed up the Delaware, Mayer had been forewarned and had sent word to Haym who was in NYC. Haym escaped without too much difficulty, and though the English sentenced him to death in absentia, he arrived safely in Philadelphia ahead of the French Ambassador.

After settling in the counting house run by Bernard Gratz, Washington backed Haym’s candidacy as broker of the French aid package. But the French Ambassador was already looking for Haym, thanks to the recommendations of Benjamin in Paris. That’s how, with Benjamin’s help and the support of influential members of the Continental Congress, Haym was chosen by the anti-Semite French to be their treasurer. Haym was not only named broker to the French Consul, but also Treasurer of the French Army, and Fiscal Agent of the French Minister to the United States. Most important of all, some 500 tons of gold were added to the bullion already in his Philadelphia vault.

However, working within Congress was another matter. Both Haym and Robert worked for Mayer, but Robert Morris was the one chosen to become a member of Congress because he was a goy. Not only that, but he was, as far as the colonials were concerned, a rich merchant who had supplied them arms and ammunitions since 1774. David had sent on the arm shipments to America as directed by Mayer, but it was Morris’ arms importing company that had fronted the operations. Congress and the militias had gotten arms and powder, and they had been too grateful to ask questions. Mayer had total confidence in Robert Morris, and since Americans, like Europeans, were not yet ready to accept Jews in the inner sanctum of political leadership, Robert worked inside Congress, and Haym outside. Mayer was quite satisfied with this arrangement.

19-MAYER RECRUITS BENJAMIN FRANKLIN

After Haym wrote Mayer telling him that the meeting had gone well, that the Fairfax Resolves had been accepted by all the Colonies except Georgia, that war was inevitable and that Boston was ready to explode, Mayer left for America by way of St.Eustatius in early 1776 aboard a Robert Morris ship carrying arms and powder. He was quite impressed with all the commercial activity such a small island generated, but he was especially pleased to meet Heyliger. Since all merchandise was moving so well, thanks in part to Heyliger’s efficient running of Mayer’s counting house, there wasn’t much to talk about. After the necessary formalities and the well-deserved congratulations, the two men enjoyed a great seafood dinner, and the next morning, Mayer was off to Boston.

When Morris’ ship arrived at the drop-off site in a cove south of Boston in late March, Mayer learned that the English had evacuated Boston earlier in the month and asked the captain to carry on directly to Boston. The whole cargo was unloaded while Mayer went to meet with Moses Hayes. He learned that George Washington had marched his army to Cambridge after the Battle of Bunker Hill, and had sent young Henry Knox to fetch the canons captured by Benedict Arnold at Fort Ticonderoga. The young librarian had accomplished a miracle by transporting the canons overland by oxen to Boston in the dead of winter without losing a single one. Washington had then positioned them on Dorchester Heights overlooking Boston harbor. Moses went on to say that, thanks to the arms and powder shipments received from St. Eustatius, not only had the canons been readied for action, but that thousands of New England militiamen had been recruited.

With the heavy canons bearing down on his fleet, General Howe had thought it best to evacuate Boston and take the loyalists with him. When Moses added that the merchants, the patriots and the politicians were more determined than ever to gain their economic freedom from England, Mayer was pleased that so much had been accomplished with so little blood being spilled. When the British left Boston, Washington thought the British had gone to NYC, and that’s where he headed for with his newly recruited army. This meant Mayer would not meet with Washington in Boston, and that suited him just fine, for he would have a chance to speak with Haym before talking to the General at his NYC headquarters.

Mayer told Moses that the British had sent some twenty thousand Hessians to fight in America and that the first contingent would be arriving soon. Mayer had learned that the Hanau contingent was to be dropped off in Quebec City which meant the British were planning to send troops down the Richelieu River in order to take control of the Lake Champlain-Hudson River waterway in the spring. There was no longer any doubt the British were planning to split the Colonies in two just like General von Estorff had predicted.

The next day he went to see John Adams, and although the man wasn’t a die-hard patriot, he congratulated him on the successful siege of Boston. But what Mayer really wanted was to acquaint Adams with the fact the Hessians were coming and to ask him to send couriers to spread the news to the other Colonies. If independence was to be achieved, the wavering loyalists and the moderate patriots had to know that the Mother Country was sending mercenaries to fight them, news that would surely influence them and consolidate the patriot movement. Adams agreed and couriers were dispatched on the hour.

When Mayer got to NYC, he immediately went to see Haym. The first thing Haym told him was that the 2nd Continental Congress had voted in favor of the Declaration of Independence. Copies had been sent to the different Colonies and Congress was expecting them to ratify the document. According to Haym, because everybody now knew the German mercenaries were coming, the more moderate members of the New York Provincial Congress, and even some of the die-hard loyalists, were likely to come on board.

NYC had always been a loyalist stronghold, but with recent developments in Boston the less moderate elements of the population were being swayed. After the Boston evacuation, the British had, the month before, sent a warship in NYC harbor in order to protect the loyalists, and that encouraged the rebels to foment fear, and that led to the more moderate Provincial Assembly being replaced by the Provincial Congress. A Committee of Safety whose main task was to raise and equip troops for the defense of NYC and spy on the loyalists suspected of assisting the British was created. The situation had reached a point of no return.

Mayer lost no time in arranging a meeting with Washington who had set up his headquarters in upper Manhattan. Upon reaching Washington’s headquarters Mayer and Haym were not surprised to see that he had requisitioned an elaborate mansion for his staff. The luxurious surroundings and his many young aides-de-camp prancing around in sharp uniforms contrasted sharply with the rag tag troops encamped in helter-skelter fashion in the fields adjacent to the command post. However, what mattered was having a Commander-in-Chief who held the Continental Army together and showed the colors as much as possible. How he conducted his private life, or how good a military commander he was, was of no concern to Mayer. All that was expected of him was to harass the enemy with his company of Virginia riflemen and whatever canons he had, and retreat inland as the British retaliated.

With Haym as translator, Mayer greeted the General and made a point of congratulating him on the successful siege of Boston. He then asked him how Mrs. Washington was and if the renovation and expansion of Mount Vernon was completed to his satisfaction. Washington answered that Martha was very well, and that thanks to Mayer and his collaborators, nodding in Haym’s direction, Mount Vernon was finished and was indeed a sight to behold. Mayer said that he was delighted for him and added that if he needed anything, all he had to do was ask Haym.

Washington then told Mayer he was planning to have the Declaration of Independence document read to the troops assembled on the common the next day, and that it would be an honor to have him attend. If the Provincial Congress signed the document as expected, George would then give young Alexander Hamilton, a very promising King’s College student who had formed a group of patriots called Hearts of Oak, the go-ahead to raid the battery in Manhattan. Then, he would point the seized canons in the direction of the English fleet, and wait for the English to land their troops. Once that happened, George would put up a barrage of canon fire and get the Virginia rifle company to hold them off as long as possible. When the inevitable came, the Continental Army would simply retreat towards the interior, leaving Manhattan to the English. He was sure Cornwallis, not wanting to put too much distance between his army and the English fleet in NYC, wouldn’t pursue them too far inland.

Knowing the Hanau Hessians had been dropped off in Quebec, the General was convinced the English would be sending an army to Ft. Ticonderoga from Quebec and another up the Hudson to meet up with it. The two armies would no doubt get moving in early spring, and it was imperative that he send whatever militias he could muster to cut them off. As for the Continental Army, he needed more French muskets, more Pennsylvania rifles, more powder, more boots and clothing, more horses and saddlery, in short, more of everything.

Mayer answered that muskets, powder and boots were being sent in ever greater number. European military uniforms were also being sent to Pennsylvania along with hundreds of bolts of fine woolen red and blue cloth. An army of seamstresses would tailor the uniforms to the General’s liking. Furthermore, the Pennsylvania gunsmiths were being financially encouraged to produce as many rifles as possible and as quickly as possible. The General would soon be able to form more rifle companies. Mayer told the General all he had to do was ask Haym if he needed anything. For now, the important thing was to prevent the two British armies from joining up at Fort Ticonderoga.

Moreover, since over the winter months there wouldn’t be much action, Mayer told George that he had asked Haym to work on getting the Hessians to defect when they landed in New York. Mayer thought that if they were promised parcels of land and money in order to settle down in Pennsylvania where there already was a big population of Germans, the Hessians would readily accept the offer. If Haym succeeded in getting some Hessians to defect, Mayer wondered if the General wouldn’t mind picking them up and conveying them to Pennsylvania.

The General, happy to be getting his horses and saddlery, the promised Burgundy wine along with his guns and powder, said he would be more than willing to assist Haym in the defection of the Hessians. When Haym was ready, all he had to do was tell the General when and where to pick them up. He could also count on the General for transporting his family and capital to Pennsylvania if and when it became necessary.

The next day, Mayer witnessed a very moving ceremony on the common as the Declaration of Independence was solemnly read to the troops. A group of citizens listening on the fringes were so moved that they proceeded to tear down the newly-erected statue of the King. When it was confirmed that the Provincial Congress had signed the Declaration of Independence document earlier that day, Mayer left for Philadelphia in a good frame of mind. With New York in the American camp, the British didn’t have much of a chance.

Mayer was a judicious man who never let himself be unduly impressed by people upon meeting them, he preferred to treat everyone politely and with respect, and not prejudge them. He knew what pushed people to do the things they did, and was never disappointed one way or the other. Culturally, he was an Ashkenazi, a people that had survived thanks to the solidarity of the group, a group of people he could trust with his life. He trusted Sephardim like Haym, and a few goys like Prince William in Hanau and Robert Morris in Philadelphia, but it was a case by case affair.

When Mayer met Bernard Gratz and Robert Morris in the Philadelphia counting house, they exchanged heartfelt greetings, and Mayer asked if Benjamin Franklin had been invited. He had, and when Franklin arrived, Morris explained who Mayer was, and Franklin bluntly told him he was most anxious to meet the mystery man who had made the meeting of the 1st Continental Congress possible. When Mayer met Americans he had to use an interpreter, but this time, he was quite relieved to learn that Franklin spoke some German.

Mayer knew of Franklin’s reputation, and as they made eye contact for the first time, he was convinced that it wasn’t overstated. This man exuded humility, strength of character, and sharpness of mind, a combination of qualities that he had not seen in any of the other goy leaders. Patrick Henry, George Washington, John Adams, John Jay, and other American leaders he had met, were all talented men in their own right, but they were politically motivated. They were indispensable in the nation building process, but they weren’t men of vision. In order to achieve a monetary union and a united America, he needed an American counterpart who shared his dream, a man who wanted to establish a monetary system and who wasn’t primarily motivated by self-interest. He needed a man like Franklin.

Mayer and Franklin engaged in small talk which had to do with ocean travel and Europe. Mayer being of the strong silent type variety, Franklin was the one who kept the exchange going by asking Mayer why he had come to America. Mayer had anticipated this moment, and told him he had come to meet with the directors of his counting houses, but also to find a way to help the patriot cause. He didn’t tell Franklin outright that he was the one who had financed the 1st Continental Congress and supplied arms and ammunition to the militias in the 13 Colonies, but Franklin had already put two and two together.

When Mayer asked him if they could meet privately, saying that it was a matter of great importance for America, Franklin accepted and suggested they meet the following day in his modest manor. And since he had just hired a great cook, he insisted that they have lunch. Mayer accepted on the condition he supply the wine.

The house was quite spacious and very comfortable, but Benjamin’s wife having died the year before in 1774 while he was in England, the drawing and engraving paraphernalia he was using to produce the Continental Dollar plates was slowly invading the whole house. Since his return, he had produced four fractional dollar bills for Congress and he was working on several others. Congress had reconvened in May following the Battle of Bunker Hill, and had declared war on England. The dollar bills were to be used to pay for the war. Franklin wanted the bills to convey strong messages, for he hoped that the Continental currency would help unify the 13 Colonies. He wanted plants and animals instead of people on the face of the bills, and he had made hundreds of sketches and drawings that were strewn about. They kept company to the many books from which he got his ideas for symbols and sayings that he intended to translate into Latin. As each bill was printed bearing a message of resilience, strength, frugality, industry and such, he would publish an article in the Philadelphia Gazette in order to explain the meanings of the symbols, the emblems and the Latin. Mayer thought the man was brilliant but had doubts about the long term success of his bills.

No matter, Mayer couldn’t help but scrutinize Benjamin’s work and marvel at his great talent and energy. Mayer knew a lot about printing bills thanks to all the knowledge he had gained from the printers at the goldsmith house in Hanau, and he knew that the man before him was indeed a genius.

Likewise Benjamin was quite impressed by Mayer. It was obvious that Mayer wasn’t a rich pompous merchant, but rather a quiet powerful man who wanted to make the world a better place. When Benjamin told him that he was aware of what he had done for the patriot cause, Mayer added that it was only natural for a man such as himself, a man who was making a fortune financing trade between the Colonies and Europe, to want to help. As a matter of fact, he added, that’s what he wanted to talk to Benjamin about.

It was obvious that Benjamin knew a lot about money, for he had published a lot of treatises concerning paper currency, and over the years he had done a superb job printing bills for the Colonies and now for Congress. Mayer and Franklin both wanted the Colonies to gain their economic independence and become united, and they both knew that a common strong currency was the way to do it, and that was the topic of discussion.

Mayer proceeded to say that the only lasting monetary system that the world had ever seen was the one England had, and that was the system he wanted to duplicate. The Bank of England was made up of a group of private bankers who were the sole lenders to Parliament, and after almost a century, that arrangement was still working superbly. Above all, the Bank of England had succeeded because it was a private bank. A monetary system based on a government printing bills and minting coins for its own use, though quite morally appealing, was doomed to failure. Politicians weren’t equipped to run a monetary system, for they would always tend to print too much and for the wrong reasons. The Chinese and many others had tried to print paper money in the past, but no currency except the Pound had ever passed the test of time. A strong central government and a strong private central bank were what was needed if America was to become the great nation that it was meant to be.

Benjamin had spent enough time in England to know that Mayer was right, but he had no idea how it could be done. How does one create a central bank like the one in England out of nothing?

Mayer went on to explain how he had established his bills of exchange on both sides of the Atlantic, how he had accumulated considerable wealth, and how he had been able to organize the 1st Continental Congress and supply the various Colonies with arms and powder. He was continuing to supply war materials on credit, for he was sure the Colonies would win their independence and pay him later. However, uniting the 13 Colonies was another matter. A strong federal power had to be created, and a strong private central bank was needed to accomplish that. Mayer had enough gold and silver to redeem all the bills he issued on demand, but he explained that more gold bullion would be needed in order to create a central bank like the one in England.

Benjamin trusted that Mayer would know what to do if he had more bullion, and so he asked him outright how it could be done. To Benjamin’s astonishment, Mayer answered it all depended on Benjamin. Benjamin had invented a lot of things, and he was curious about everything, but he wasn’t a magician, and he told Mayer so. However, he was relieved when he heard what Mayer had to say on the subject. Mayer reminded him he was the most influential diplomat America had, and that his many years of representing the 13 Colonies in London were invaluable. Since Benjamin spoke French, Mayer told him if he were to go to France and seek France’s help, given his personality, experience and fame as an inventor, he would have a great chance of succeeding. Success would mean getting aid from France and, more importantly, getting French gold. The French King would certainly welcome the opportunity to give England a bloody nose by chasing it out of America.

After a short pause, Benjamin said he had some contacts in France, but that he wouldn’t know where to start. Mayer replied that Congress would be only too happy to send him over as an official ambassador, especially if Robert Morris was to arrange to pay all his personal expenses and make sure he had all the credit needed to accomplish his mission with no questions asked. France was the country with the most gold bullion, and if it was to put an aid package together, it would necessarily involve gold. He and Mayer would then make sure Haym Salomon became France’s treasurer in America. Mayer had never defaulted on an exchange bill, and his bills were as good as gold. Haym would continue doing what he was already doing, and make sure that the bills backed by the French gold would be spread around generously to the politicians, the various militias, Washington’s Army, and needless to say, France’s armed forces. The continental dollar was bound to depreciate, but his bills of exchange backed by French gold would more than make up for that loss.

By the time they had put the guinea hens down their gullet and washed them down with the excellent Burgundy wine that Mayer had brought along, both men were in total agreement. They both knew they formed a great team, two men of vision who were in the process of designing the framework of a great nation. Franklin would go to France, and they would succeed.

Benjamin left for France on Oct. 26, 1776. A month earlier, the British accused Haym of aiding the Sons of Liberty, and they arrested him. Having foreseen this development, Haym had asked Washington to convoy his family and treasury to Philadelphia for safekeeping, which he did as he retreated to Pennsylvania. Haym was sentenced to house arrest after agreeing to interpret for the Hessians. That was precisely what he had hoped for. The great defection of Hessians that was about to take place at Trenton would be a simple matter of getting to the right Hessian officer, Johann Rall.

14-LETTER FROM NYC 1772

Dear Mayer,

I’m writing from New York City. If I didn’t write sooner, it’s because the sea voyage really weakened me, and because I wanted to have a better understanding of the city before putting pen to paper.

Let me start by saying that I arrived in Rotterdam as planned after an uneventful five-day coach ride. Since you had sent the five chests of pennies ahead with Thurn and Taxis, I didn’t have anything to worry about, and it allowed me to better enjoy the company of the people I met in the relay inns. Upon reaching Rotterdam, I went directly to David and Hannah’s place, and it was a moment of great conviviality. I’d missed them, they’d missed me, and I wanted to know everything about them, and they wanted to know everything about me. I can only say that I’m very impressed with what they’ve done. They have a beautiful home, the counting house is well-appointed, and they seem to have contacted everyone worth knowing with Montefiore’s help, a truly great gentleman. There’s no doubt in my mind that your decision to send David to Rotterdam was the right one, and I can only hope to do as well for you in New York

I left Rotterdam, and I crossed the channel to London where I waited for a ship that took on passengers for New York. I soon found what I was looking for, and I booked passage on a good looking ship about to lift anchor. The ocean crossing took more than three months and was very unpleasant. The captain told us it was the worst weather he’d seen in years. I spent a lot of time turning green and wondering if life was worth living, and when it got too bad, I stayed in my hammock, and that, I’m sure, was what saved my life.

I did, however, have a few days of relief during which time I managed to get my hands on some moldy dry bread and barely drinkable water laced with rum, and having digested this doubtful ration, I was able to observe the world around me with some degree of lucidity. Most of the crew members were of the unrefined variety, but they were competent and helpful. There were several gentlemen who were going to the colonies to strike it rich, but my most interesting encounter was with a fellow named Ephraim Hart. He was especially interesting because he was returning to New York to resume his business activities, and he provided me with much information concerning the ins and outs of life in the colonies. When we arrived, I was in a pitiful state, and Ephraim was kind enough to introduce me to that fine landlady with the big house who has a fireplace in each bedroom, the same one I had fantasized about, remember? Well, it isn’t quite so, but it is a fine house. And Gretel, you’ll be happy to know she’s Ashkenazi and feeds me schmaltzy food, American style, and my ribs are no longer showing.

It’s been two weeks since I’ve arrived, and it’s the first day I feel disposed to write. On the day of my arrival, I managed to get my personal affairs transported to the boarding house, and you’ll be happy to know the five chests containing the thousand pounds of pennies are safe and sound. New York is a garrison town like Hanau, and there are hundreds of English soldiers and sailors roaming the wide avenues. Therefore, you need not worry about me or the money.

There are around fifteen thousand people living here. The city is located on the tip of an island that’s hidden behind a much bigger one that protects it completely from the onslaught of the ocean. The military installations are on the southern tip of the island, and the port facilities are built along the Hudson River on the west side and the East River on the other. One couldn’t dream of a more accessible and well-protected deep-sea water port.

The city is traversed north and south by a main artery called Broadway that runs from the Battery, the British military fortifications at the southern tip, to a fresh water reservoir called Collect Pond, and is approximately one mile long in English units. The city covers an area approximately one mile by one half mile. There are three main streets, Broad, William and Queen, running in a north-south direction. All streets run north-south and east-west, and are therefore perpendicular to each other. Most streets are pebbled and have paved walkways on either side, so one can easily access all parts of the city on foot or on horseback. Community life revolves around houses of worship, and there are many, including an imposing synagogue on Mill Street not far from Broad Street.

On my first outing, I walked to Collect Pond and I was encouraged to follow Boston Road north because of the beautiful colors of autumn. There’s a native tree called the maple that turns all colors this time of year, and it makes for a most spectacular sight. However, as I walked the streets, I couldn’t help but notice that people leave much of their waste on the roadways. They even leave dead horses to rot, and although pigs and wild animals act as scavengers, they only clean up so much. There are pigs, cows and many other animals roaming about because as the city expanded northward from Wall Street, many people used their large plots of land to grow food and raise animals.

Another downside is that one can smell human waste just about everywhere one goes. It would seem that the more responsible home owners dig a hole in the back of their house and build what is called an outhouse, and when the hole is filled, they cover it with earth, dig another hole and move the outhouse accordingly. Others use a simple pail toilet and empty it in out of the way places when people aren’t looking. There are many stories concerning chamber pots and how carelessly they’re emptied. For instance, I’m told it’s wise to hug the walls of buildings when walking in the city at night, for one never knows what can fall from the heavens.

Since there is so much waste being added to the soil, much of the water from the privately dug surface wells tastes bad and smells. A proud Philadelphian once wrote that here in New York ‘people drink a proportion of their own evacuations, as well as that of their horses, cows, pigs, dogs, cats, and other putrid liquids so plentifully dispensed.’ In all fairness, in comparing the two cities, that gentleman didn’t take in consideration the fact that Philadelphia has two rivers bringing it plenty of fresh drinking water, giving it a decided advantage. As for waste disposal in Philadelphia, I’m told it’s not much better than it is here. Its narrow unpaved streets crammed with poorly built houses are strewn with dejections, and the large deep wells dug in strategic parts of the city to accommodate waste produce a pervasive foul odor.

As a way of combating the scarcity of good drinking water, just about everybody, young and old, drinks beer. From the very first days of the colony, the Dutch drank beer and the English followed suite by bringing their brewers and beer making equipment with them. Everybody lives by an old European adage that says one doesn’t get sick if one drinks ale. However, many of the more fortunate English families tend to drink tea and buy their water from water peddlers who go door-to-door with horse drawn wagons laden with huge wooden casks. Obviously, these solutions are out of reach for the working poor. When all is said and done, as a community, New York doesn’t seem to consider having good drinking water to be a priority. When one compares the conditions here with the Judengasse ghetto and its superb sewers and abundant pristine drinking water, one can only wonder.

New York has a great middle class, composed chiefly of tradesmen and merchants. They are all housed in splendid residences, and most, including lawyers and doctors, have built their mansions on William, Broad and Queen Streets. On the other hand, the more humble folk who work for these prosperous citizens are parked along the East River in an area called the flats. It consists of an agglomeration of shacks and lean-to’s built on either side of a street appropriately called Water Street, and even though they can throw their waste directly into the East River, these poor people don’t have access to clean drinking water and don’t always have the pennies needed to buy beer. Their lot isn’t at all enviable.

The mansions and office buildings are built of stone or brick, and the Governor’s House, Trinity Church, St. Paul’s Church, Columbia College and the hospital are all within one block of Broadway. There’s a lot of wealth generated here irrespective of the sanitary conditions that I’ve described, and, not surprisingly, the population is said to double every ten years or so. For the time being, my boarding house located on Broad Street just south of Wall Street will serve me well, for I have access to all manner of businesses in the financial and port districts. It’ll be very easy to rent or buy office space, and you’ll be glad to know, that everything costs a fraction of what it does in Frankfurt. For instance, you can build a large two-story stone building on Broad Street for slightly more than five hundred pounds. According to Ephraim, you could have a five hundred ton capacity ocean-going vessel, all rigged and made of oak that can withstand thirty years of rot, built right here in New York for about the same price. This got me thinking as a banker, and I’m sure you’ll be interested in the suggestions I make further on in this letter.

First, let me tell you more about Philadelphia. It’s bigger than New York and it lies far up the Delaware River. A religious group from England called Quakers, a people known for their peaceful ways and tolerance, settled there. Since they were not tolerated in England, they’re not as loyal to the English crown as their counterparts in New York, and this could be worth remembering as the political storm builds over what is considered unfair taxation by the Mother Country. A large population of Swedes and many Germans from Frankfurt have settled there as well. However, because the tolerant Quakers are intolerant when it comes to language and want everybody to learn English, the three groups tend to stand apart.

The Delaware River being a more modest river than the Hudson, and Philadelphia being far upstream, the English have naturally built the bulk of their military facilities in New York City where they have ocean access to the whole coast. Another noteworthy fact is that Philadelphia though a long distance from New York City by sea is quite close by land. After crossing the Hudson River from New York City by ferry, it’s a mere two-day stagecoach ride to Philadelphia, and the service has been in operation for years. This situation is unique in the colonies, for all the other capitals remain quite isolated from each other.

Both the Delaware and Hudson River basins are very fertile and have been developed along the same pattern. Following the early Dutch East India Company guidelines, both valleys developed using the patroon system. The idea probably came from the Huguenot refugees who first settled in Rotterdam and later in New Rotterdam. In wanting to encourage settlements, the Dutch granted patroonships that spanned 16 miles in length on one side of the river, or 8 miles if spanning both sides. Later the plot sizes were cut in half in order to accommodate more Dutch Americans in good standing. The title of patroon derived from the word patron and meaning boss in French, grants powers and privileges just like they do to our princes in Europe. The patroon creates civil and criminal courts, appoints local officials, and holds land in perpetuity. In return, he is commissioned by the Governor to establish a settlement of at least fifty families within four years. As tenants working for the patroon, the settlers don’t pay public taxes for the first ten years, but they do compensate the patroon in money, goods, or services as agreed to by all parties. The patroon lives in a luxurious, well-built house of brick or stone, has a retinue of servants, large barns, orchards and gardens, and broad pasture lands. A patroonship has its own village infrastructure that includes a church which records births, baptisms, and marriages. On the one hand, the English encourage this system because the large tracts of land are very productive. On the other hand, they forbid the patroons from manufacturing goods for resale. As can be expected, the patroons disregard the interdiction, and continue to operate their foundries and other small industries that produce iron goods, furniture, and cloth. They then float all their excess production, along with all the furs they can get from the natives, downriver to New York where they sell the lot to the citizens and merchants totally disregarding the English interdictions.

The patroons and the merchants have developed a bartering system. They exchange local goods for manufactured goods coming from England, and keep track of how much one owes the other. No matter, there’s a real money problem here, and it lies in the fact there isn’t much silver specie to buy and sell the little things that ordinary people need in everyday life. When Ephraim told me that the Bank of England completely ignored the needs of colonials by refusing to inject silver specie in the colonies, I didn’t quite believe him, but it’s even worse than that. Not only do colonials have little sterling, but the English refuse to accept the plentiful Spanish dollars at par with the Pound, in spite of the fact they both contain the same amount of silver. By establishing an exchange rate of 4 to 1 in favor of the Pound, they are strangling the local economy. That combined with the fact that they ban the importation of non-English goods and discourage the locals from manufacturing their own very much foments ill feelings towards the Mother Country. This doesn’t make for a healthy political situation, and there’s even a growing dissident movement called Sons of Liberty that’s present throughout the colonies, especially in Boston where the English have massacred a number of their sympathizers last year. The Boston Massacre, as it’s decried on the street, has even enflamed the very loyalist Southern Colonies.

I’m sure I’ll have a lot more to say about these tensions at a future date, but for now, here are some of my views regarding facilitating trade with Europe. I’ve talked to Ephraim about this, and he thinks that our services are highly needed here in the colonies because although trade is increasing at a rapid rate, credit is hard to get, there’s very little specie and England is maintaining very unjust exchange rates in favor of the pound. But if we were disposed to finance a shipment of tobacco to Rotterdam, here’s how it could be done. I would ask a fellow I met, Robert Morris, or someone of his stature, to buy and deliver a load of tobacco consisting of a thousand hogsheads to Rotterdam. A hogshead contains a thousand pounds of tobacco worth a penny per pound and costs around £4. Morris would receive a bill of exchange reflecting a guaranteed price of, let’s say, five pennies per pound payable to him when David took possession of the tobacco in Rotterdam. Morris would then issue his own bill of exchange to the producer in Williamsburg payable when the tobacco is delivered in Rotterdam, and he would also give him written proof that taxes are paid and that the cargo is fully insured. In this scenario the seller in Williamsburg is guaranteed a full penny per pound for his tobacco payable in six months’ time with interest if required, and the merchant Robert Morris is guaranteed five pennies per pound when the shipment arrives in Rotterdam. David in Rotterdam will have by then sold the tobacco well below its market price if need be, let’s say, ten pennies per pound. In a worst case scenario, the producer gets £4000, the shipper makes £16000 (£20000 less £4000), minus expenses, and our counting house make £20000 (£40000 less £20000), minus expenses. All parties make a handsome profit, and since we have such a huge profit margin to play with, since tobacco is in such high demand, and since it would be sold ahead of time, it could be said there’s no risk at all.

If you wanted to finance shipments going from Rotterdam to New York or London, I have two suggestions, and they have to do with two French products. As you know, before I met you I had been travelling in France, and that’s when I became aware of them. I’m talking about two products the English in England, and especially in the colonies, aren’t familiar with. It has to do with a cloth from Nimes in the south, and an extraordinary wine from the Burgundy area further north.

If Burgundy wines became known, the demand for them would explode, I’m sure. The English are already very fond of Bordeaux clarets, and once they taste these delightful wines from Bourgogne, they’ll surely be overwhelmed. I personally tasted them and know how good they are. But here’s why I think they’re worth investigating further. I’ve heard that wines can now be shipped in bottles instead of casks, an innovation that not only guarantees the original quality of the wines, but allows them to age to their sublime potential before they reach the palates of connoisseurs. In a word, if we found a way to have Burgundy wine bottled, corked and packaged before sending a shipment of it to Rotterdam and London, it would surely become an overnight sensation, and its price would increase exponentially.

As for the cloth, it’s an ingeniously woven cotton fabric manufactured in Genoa, Italy. The cloth got its French name when a Huguenot silk manufacturer from Nîmes bought the Genoa business during the religious persecutions. The cloth had been used for making sails, but in wanting to expand the business, the Frenchman thought of selling the fabric for the making of work clothes. There was much talk about this white-blue ‘de Nîmes’ cloth when I was in Lyon. In spite of cotton being outlawed by the King, people kept asking for it, claiming it could outlast Indian cotton ten to one. Judging from that experience, I can say with assurance that if you financed a shipment of that fabric to America you would make a mindboggling profit. The cost of working clothes is so high and disproportionate to income in the Colonies that the demand for a cheap, attractive and tough cloth would surely be overwhelming.

Unfortunately, I have no way of looking into those products at this end. It would be necessary for someone to go to France and see about their availability. As far as I know, there are three key cities involved: Nîmes for the cloth and information regarding the bottle corks, Lyon for the bottles, and Beaune for the wine. The three cities are in a north-south axis along the Rhone-Saone River corridor. The corks, the bottles and the wine would come together in Beaune, and from there, the ‘de Nîmes’ cloth and the now-bottled wine would be transported over an excellent old Roman road that goes from Beaune to Basel on the Rhine, and from there the merchandise could be shipped down the Rhine River to Rotterdam or anywhere in between.

I hope you don’t think I’m being bold in making these suggestions. I’m just trying to give you useful information. There are many other possibilities, and I’m sure you’ll advise me. But I’m convinced that indigo, rum and tobacco from the Americas, Burgundy wine and ‘de Nîmes’ cloth from France, and colorful cotton fabrics from England are the sort of exotic merchandises that would generate extremely high profits.

There’s something else I have to tell you, and it has to do with a discovery that I’ll refer to as the Atlantic ‘stream’. Don’t fret if you’ve never heard of it, hardly anyone has. It’s an ocean phenomenon that’s been confirmed by a very ingenious fellow called Benjamin Franklin, a Philadelphian who has become the Colonies’ emissary to England. For some time now, merchants have been wondering why it takes longer to sail to New York than it does to the southern colonies even though they’re much farther, and this fellow Benjamin figured it out by paying attention to the New England whalers. The whalers kept saying that in order to catch more whales they followed what seemed to be a big river of warm water that flowed right through the Atlantic Ocean. This river was full of plankton, whale food for the uninitiated, and it flowed in an easterly direction. If they followed this river, they were sure to bring back all the whale oil their ships could hold.

Benjamin was paying attention, and on one of his trips to Europe, he got the captain to agree to zigzag his way across the ocean, thus going in and out of the alleged river of warm water. As he did so, he recorded water temperatures and latitudes, and the result was very convincing. He was able to chart this ‘stream’ of warm water and show that it flowed at a speed of around four knots. He published his findings in England, but since mighty English captains have nothing to learn from lowly colonial whalers, this discovery is still not being exploited by the English. But the fact remains, if one were to sail north or south of it on the westward leg, one could shorten the journey by as much as two weeks, and if one were to sail in it on the eastward leg, there would be much time gained as well. I thought you might find this information useful because I remember you telling me in your tongue-in-cheek way that having a good communications network and knowing things ahead of everybody else could be very profitable.

In closing, let me say that I intend to proceed with the rental of office space on Broad Street. I also took the liberty of having a small quantity of bills of exchange printed. I’m enclosing a sample for your perusal.

As I await your answer which will probably arrive in four or five months from now, I’ll get acquainted with merchants and find out what merchandises are the most profitable to finance. I’ll also make a point of going to Philadelphia and meet with a fellow called Bernard Kratz who’s trying hard to have a synagogue built over there. I’m sure I’ll find out everything there is to know about Philadelphia through him. As I await your reply, regardless of the financial activity I pursue, it won’t involve big sums. When I get your letter, if you’ve decided to go with tobacco, I’ll be ready. Needless to say, a four or five month correspondence delay doesn’t simplify matters, but once I know exactly how you want to proceed, things will get sorted out. Rest assured that I don’t see any major impediments at this end, at this time.

 

Regards,

 

Haym