"Didn't we have three million dollars and tens of thousands of pounds? How could it be spent so quickly?" Charles was a little disbelieving. "It couldn't have been secretly embezzled by someone, could it?"
"Of course, it hasn't all been spent, but every sum of money has already been allocated for a specific purpose.
There are the salaries for the representatives and councilors, and also, Councilor Charles Godfrey, the eight hundred steel sabers ordered from you, which need to be paid for upon delivery; several official warships ordered from the shipyards, also to be paid upon delivery; and orders for artillery, military horses, and so on.
Even for funds without specific orders, as Mr. Franklin once said, a sum must be reserved to secure aid from France. These funds are still in hand, but their use has already been determined," Morris said with certainty.
"Alas! It seems we'll have to issue new dollars again," Hancock sighed helplessly.
"No! No! Mr. Hancock, the dollar is the guarantee of our credit. The initial three million dollars had no collateral or guarantee whatsoever. In fact, it can be considered a public bond we issued to all of America, guaranteed solely by the credit of our Continental Congress.
If we now issue more unsupported dollars, allowing those who use dollars to believe that the government can simply issue new currency when it runs out of money, it will immediately cause the dollar to depreciate," Charles quickly interjected.
"That's right! Councilor Charles is indeed a Banker; increasing the issuance of dollars is absolutely not permissible." Morris glanced at Charles and also firmly rejected Hancock's proposal.
"Then what do you two think we should do?" Hancock felt very helpless. "Morris, can your Bank of America still lend money?"
"Alas!" Morris couldn't help but sigh again upon hearing this request. "Mr. Hancock, my Bank of America has been lending to various state governments and the Continental Congress, but I am, after all, a commercial bank with the goal of profit. After continuous long-term lending for a year, my bank's situation is already in a mess. If I lend any more, I'm afraid it will lead to my bank's bankruptcy."
During the war of Independence, the Continental Congress, in the name of the nation, borrowed a large amount of funds from financial institutions and wealthy individuals across America. Later, after the Federal Government was established, it was still heavily burdened by debt.
If it weren't for the brilliant economist Hamilton becoming the Finance Minister, establishing a state bank, beginning to collect taxes from the citizens, and formulating new economic policies, the nascent Federal Government might have declared bankruptcy due to its heavy debt.
And now, according to historical development, the Continental Congress should begin borrowing from newly established banks and wealthy individuals.
Hancock, not changing the decisions he made in history, immediately turned his gaze to Charles, the owner of Pittsburgh Bank, and a minor shareholder and major chairman of Pennsylvania Bank, after hearing Morris' complaint.
"Alas!" Today was a day of sighs. Charles also began to sigh. "My Pittsburgh Bank and Pennsylvania Bank can lend to the Continental Congress, but we are just two newly established banks, so the amount of the loan cannot be very large. Moreover, the bank's funds come from various shareholders, and we cannot lend to the Continental Congress for free. These loans will still need to bear interest according to the contract."
Recalling what Jefferson had mentioned earlier, Charles immediately knew that this fellow must have known about the Continental Congress' financial difficulties in advance. But money lent to the Continental Congress in this way would be very difficult to recover. Historically, the war of Independence lasted seven or eight years.
Although this time, due to his involvement, things had gone much more smoothly, there was no sign that the British army would surrender before the Battle of Charlestown. Over such a long period, plus the time to discuss the formation of the States later, who knew when the money could be repaid?
"That's not a problem!" Hancock readily agreed. "National affairs cannot allow your personal interests to be harmed. When we borrowed from the Bank of America, we also paid interest."
Morris, listening nearby, still complained reluctantly:
"It's just that I don't know when the money will be repaid!"
"What?" Hancock deliberately pretended to be an old man who couldn't hear, asking loudly.
"Oh! I mean, this amount of money is still not enough. Can Councilor Charles increase the loan a bit? After all, our interest rate is still very high," Morris said with a bitter smile, quickly clarifying.
"Heh heh! It's not impossible to increase the loan, but there must be collateral," Charles tapped on the table, changing his mind about lending as little as possible.
Originally, it was just a reluctant loan, but then he thought that the interest rate on the money lent to the Continental Congress was indeed very high; this was a very profitable deal. However, Morris' point about not knowing when the money would be repaid was also very reasonable. To ensure repayment, the simplest method was collateral.
The collateralized items generally had to be no less than the loan amount. And he roughly knew the duration and direction of the war of Independence. If he could sign a fixed-term contract, precisely demanding repayment before the end of the war of Independence, then when the situation was most tense, the Continental Congress certainly wouldn't be able to repay the money, and wouldn't the collateralized items then become his?
Anyway, the purpose of establishing a bank was originally to lend money, and now being able to lend all the money at once was actually to his advantage. Hmm, the interest rate couldn't be lowered either. At that time, it would be interest on interest, settled annually, and if they couldn't pay, they would continue to use items for discounted collateral, making the Continental Congress repay until they were ruined.
"Collateral?" Hancock and Morris exclaimed in unison.
Morris secretly regretted in his heart why he had trusted the credit of the Continental Congress back then, thinking that just signing a contract was enough and forgetting about collateral. Otherwise, he wouldn't be facing such difficulties with cash flow now.
"Then what do you want as collateral?" Hancock wasn't particularly opposed to this suggestion; he still greatly respected private property and individual rights.
"Of course, tariffs and land!" Charles said with a smile.
Ancient empires, who borrowed large sums of money from the great powers, were very experienced in large-scale lending. Tariffs, salt taxes, and even road rights could all be used as collateral. Considering that the latter two didn't yet exist in the United States, and the former was unlikely to yield much now due to the British naval blockade, Charles added land.
"Good! That's not a problem. We can always ask each state to set aside a piece of unowned land for collateralized loans. The war of Independence concerns the interests of every state, and I imagine they wouldn't object," Hancock agreed.
"I prioritize tax revenue as collateral!" Fearing that the states would try to fool them with barren, unwanted land, Charles quickly added, "Only the remaining amount can be supplemented with land. And the land must have development value, and be collateralized after a significant discount."
He was clearly preparing to run a pawn shop business.
"Hahaha! No problem, Councilor Charles. However, for this specific loan agreement, you should sign it with Morris. He is our financial commissioner for the Continental Congress and Pennsylvania, and he shouldn't let either of us lose out!" Hancock laughed heartily.
"Uh… yes, I didn't intend to earn too much money. I just want to earn what should rightfully be mine."
Charles felt greatly embarrassed; he was so focused on making money that he forgot the Continental Congress also had its own economists. It would be difficult to gain too much advantage from Morris.
"Heh heh! Actually, the amount my two banks can lend is still fixed, and can only solve immediate needs," Charles said with a bitter smile, quickly changing the subject. "In fact, we should also conduct fundraising, throughout the entire United States, and even Europe. Anyone who sympathizes with our cause and supports our independence can generously contribute to help us!"
Charles knew that Americans were actually quite wealthy at the moment, but their wealth was somewhat lopsided. Some assets were very abundant, such as gold, tobacco, and land, while other areas were somewhat poor, such as luxury goods and daily necessities. Asking them to donate in kind should not be a problem.
As for Europeans, many Americans came from Europe, so asking them to raise funds from their homelands would certainly bring in a lot of money. Even many anti-British countries in Europe would surely be willing to contribute generously, as France had already donated a large amount of military supplies.
"Indeed! Mr. Franklin also mentioned this. After he arrives in France, he will raise funds from the French people and other European countries," Morris added.
He and Franklin were both members of the "Revolutionary" Committee of Correspondence, and their relationship was much closer than his with Charles.
"Originally, if port trade were still active, simply collecting export and import taxes would have been enough to cover a large portion of the war expenses," Charles sighed.
"That's right! The common people of America hate the taxes imposed by the British king, which is why they are willing to stand up against his rule. We cannot levy taxes on them. A country without tax revenue is truly difficult to sustain!" As a financial expert, Morris' understanding of taxation was far superior to Hancock's.
"Councilor Charles, Councilor Morris! Do you think such donations and one or two loans can sustain us until our victory in battle? Councilor Charles once said that in our fight against Britain, ultimate victory will be ours, but we must persevere for a very long time. If we don't have enough money, can we still hold on?" Hancock asked the two with a frown.
Upon hearing Hancock's words, Morris didn't react much, but Charles' expression changed.
When cannons roar, gold flows like water. He had thought that trench warfare and protracted warfare could bridge the gap between the Continental army and the British army.
As long as the war dragged on, the cost of the British army's distant expedition would increase, and ultimately, victory would belong to the United States of America. He had only focused on calculating the British costs, but forgot to calculate the costs of the Continental army!
The cost of trench warfare would certainly not be lower than that of open-field warfare. The reason it couldn't replace the foolish yet very effective linear tactics in history was partly due to the prolonged duration, but primarily because a prolonged war significantly increased the cost of a single conflict.
If a war lasted seven or eight years, and the costs of trench warfare were factored in, many countries would rather simply concede defeat and pay reparations, because even if the war was won, the nation's economy would be completely shattered, and even the defeated nation's economy would be ruined, unable to pay much. The trench warfare of World war I not only crippled Germany but also devastated the victorious Britain and France; that is the best example.
Currently, the Continental Congress' finances were certainly no better than the British Government's. At that rate, the British might still hold out, while the Continental Congress would go bankrupt first.
"If there isn't enough money, then of course we can't hold on. I don't think donations will be very much; those from Europe will at most not exceed one million francs (in reality, Franklin raised one million francs in three months in France), and those from America might be a bit better, but we shouldn't expect too many pounds sterling. These funds, plus the loans, will definitely be enough for three or four years, but if it exceeds five years, it will absolutely not be enough!" Morris estimated.
Because Charles had factored in the industrial output from his Pittsburgh operations, his calculated expenditure was a bit higher. If a trench war were fought outside Philadelphia, continuously purchasing firearms and ammunition from Pittsburgh, these funds might not even last three years.
But even with his new muskets and cannons from Pittsburgh, the Continental army could only hold its ground without suffering losses, not gain an absolute advantage. Defeating the British army within three years was still unlikely.
"If we have to continue fighting, I'm afraid it will only last for three years!" Charles still honestly confessed.
Morris and Hancock both looked at Charles, knowing that his understanding of military matters was greater than theirs, and naturally accepted his judgment.
However, accepting it only made them realize the difficulty of the situation even more.
"Such a significant matter cannot be resolved by just the three of us, nor should it be. For now, let's borrow a sum of money from Councilor Charles' bank to cover any new budget items that may arise. For future fundraising, I will propose it to the Continental Congress for discussion, as a regular matter that all our representatives must be responsible for. Everyone must find ways to raise money." Hancock's words released Charles and Morris from their deep thoughts.
Yes, this concerns all of America; why should only a few of us worry about it?
With his mood relaxed, Charles' mind cleared, and he suddenly had an idea:
"Mr. Hancock! Have you ever considered entrusting the right to mint and print currency to the banks?"
"Handing over the right to mint coins to a bank?" Hancock looked at Morris questioningly, nodding his head to indicate he also didn't understand.
"Yes! It's about establishing a central bank… or rather, a bank specifically designed to control the nation's financial instruments, possessing the right to mint coins.
When the government's trustworthiness is low, it would issue currency through reserves, and also adjust deposit and loan interest rates to control and regulate the entire national economy…" Charles saw that Hancock and Morris both looked confused, so he suddenly stopped speaking.
These things are very simple for people in the 21st century; almost anyone with a little common sense in economics would know them.
But for people who haven't even heard of a central bank yet, these concepts are still a bit too advanced.
By the end of the 17th century, some state-owned banks had already adopted measures similar to those of central banks to intervene in certain economic affairs.
However, a central bank in the modern sense did not truly emerge until after the first capitalist economic crisis in the early 19th century.
As for its perfection, that wasn't until after World war II, and even in the 21st century, the functions of central banks in various countries are still frequently adjusted.
Morris, as a Banker, understood some of the economic terms Charles mentioned, but he still didn't quite grasp the overall meaning of his speech.
In fact, even if the brilliant Alexander Hamilton were here, he might not be able to fully comprehend the functions of a central bank as Charles described them.
"Alas! What I mean is, if the Continental Congress can grant me the right to mint coins, I can use the currencies of my various banks as reserves.
I would issue an amount of U.S. dollars equivalent to the amount of British pounds and gold coins I hold.
If the common people don't trust the value of the U.S. dollar, they can exchange it for British pounds and gold coins at an equivalent rate.
With this guarantee, there won't be a large-scale devaluation of the U.S. dollar.
This way, by using the U.S. dollars we issue domestically and British pounds and gold coins internationally, we can generate an additional sum of money to use.
Perhaps because our U.S. dollar has reserve backing, it might even be seen by foreigners as a strong currency, and be used as a basic monetary unit in international settlements.
With a large amount of U.S. dollars circulating in the market, just minting this portion of the currency could allow us to make a fortune." Charles, like a tour guide, couldn't stop once he started talking about the right to mint coins.
He was almost talking about the business of the American Central Bank two hundred years in the future.
"So, that will create more money?" Hancock listened, "enraptured," but completely bewildered.
"It's not so much about creating more money, but rather being able to issue the maximum amount of U.S. dollars within our credit limit without worrying about its devaluation.
Before, we could only issue U.S. dollars based on our feelings, not knowing how much was appropriate.
Now, through currency reserves, we can achieve quantification and find the most suitable point." Charles tried to explain in simple sentences.
In reality, he knew that the theory of issuing reserves was very complex and could not be explained clearly in a few words, and he himself didn't know it in great detail, so he could only use the best-sounding words.
He was, however, very clear that the central bank of the United States in later generations nominally issued the U.S. dollar.
But as an international settlement currency, the U.S. dollar was a global currency; it was essentially issuing 'Earth dollars'.
The portion of U.S. dollars issued by the central bank that was used outside the United States was, in a roundabout way, an additional income for the U.S. central bank.
Charles had read relevant specialized research reports and knew that this total amount was not as large as outsiders speculated, but it was generated every year, and when added up, it was indeed a huge income.
"Then The Continental Congresscan also print it ourselves," Hancock still sounded a bit skeptical.
In this era, from Europe to America, the right to mint coins was generally controlled by the government.
Although there had been a few instances where the right to mint coins was granted to private merchants, each time it was opened to the private sector, it was certainly when the government's situation was not very good, and in the end, the private sector often reaped huge profits.
Now that Charles proposed to take the right to mint coins, his intuition was that it should not be relinquished, even though the current situation of the Continental Congress was indeed not very good.
"Councilor Charles just mentioned something about 'reserves'," Morris interjected.
"That's right, my intention is to use the British pounds and gold coins from our Pittsburgh Bank and Pennsylvania Bank as collateral for the printing of U.S. dollars," Charles nodded.
"The Continental Congress itself does not have such financial reserves, so it is impossible for it to issue currency."
Morris was indeed formidable; he immediately grasped the key point.
"Then can my Bank of America participate in coining? Our bank also has a considerable amount of British pounds and Spanish gold coins, which should be able to serve as collateral, right?"
Charles broke into a cold sweat.
He should have known better than to say it in front of Morris, letting him take a share of the profit for nothing.
However, historically, many countries and regions have entrusted the right to mint coins to several banks, which was both a necessity and a means of checks and balances.
With Morris, a Banker, present, it was never really possible for him to monopolize the Continental Congress' right to mint coins.
"Granting you the right to mint coins should not be an issue, but the coining must be done according to a certain reserve ratio," Charles nodded.
Minting coins would certainly not be done for free; just collecting coining fees from the government would be a huge income, not to mention the various hidden benefits within.
Such advanced economic concepts were a bit too distant for Hancock, who didn't understand much about economics.
He could only sit by and watch Charles and Morris divide up the right to mint coins that originally belonged to the Continental Congress.
Charles knew that the only banks currently owned by Americans were Morris' Bank of America, and his own Pittsburgh Bank and Pennsylvania Bank.
Seeing Morris' sincerity, he was inspired and simply proposed directly:
"However, the ratio between reserves and minted currency should ideally be determined by a specialized bank, which we can call a central bank.
She would represent the government in issuing national debt, specifically formulating financial laws and policies, managing banking and financial affairs, and so on."
Morris nodded, smiling as he looked at Charles, his desire for this central bank completely unconcealed in his eyes, eagerly awaiting Charles' next words.
"Haha!" Charles smiled slightly, knowing that Morris wanted to compete with his own bank for the power of the central bank, so he simply said directly:
"The president of this bank can be a government official, and specific financial measures should be formulated by Central Bank personnel.
She is called a bank, but she cannot specifically participate in banking business; she is merely a government agency similar to a bank."
This time, Morris didn't argue.
As long as it was a government official and a government agency, he, as the person in charge of the Continental Congress and Pennsylvania's financial power, would certainly be able to interfere.
It didn't seem important whether his own bank held the position.
In fact, if it became a central bank and couldn't engage in regular business, he wouldn't even want it.
Charles already had a clear candidate for this Central Bank position: Alexander Hamilton from Washington's Continental army, the future architect of U.S. financial policy for over a hundred years.
This brilliant economist was currently serving as an ordinary soldier in Washington's Continental army, and would only become Washington's aide-de-camp during the Battle of Charlestown.
Charles had already met this prominent figure during his last visit to the Continental army and was originally concerned that changing his experience would leave Alexander Hamilton with insufficient experience, which was why he hadn't approached him.
However, given the current dangerous situation in New York, such a genius serving as an ordinary soldier could die on the battlefield at any moment.
Since there was now indeed a position that required his responsibility, he decided to officially write a letter to preemptively conscript him in the name of the Continental Congress.
Finally, Charles and Morris reached a package of related agreements, then formally drafted the text, preparing to submit it to the relevant special committee of the Continental Congress, and then for a vote by the entire Continental Congress.
Alexander Hamilton's matter, of course, was also brought up incidentally.
The kind President of the Continental Congress, Hancock, could only smile as he accepted the agreement formulated by the two Bankers.
—
As soon as Charles returned to the castle, he saw James Jonathan anxiously pacing back and forth in the living room.
"James! Are you looking for me?"
"Yes! sir, you're back; I've been waiting here for almost half a day."
James hurried forward to take the hat Charles had removed, placing it aside for him.
"What happened?"
"I don't know what's going on, but in the past few days, many people have come to our bank to deposit money, and now we're having trouble keeping up with the deposits," Jonathan's tone was very anxious.
"Haha! Many people depositing money means our bank has good credit, which is a good thing," Charles said, looking puzzled.
"But they're all depositing U.S. dollars!" James' voice was filled with annoyance.
"A while ago, news came that the New York front had suffered a defeat, and some people already started coming to the bank to withdraw or deposit money.
Although the transaction volume was relatively large, it was just due to concerns about the situation, and we didn't feel anything abnormal.
However, recently, rumors are rampant that New York will completely collapse, and many people are still worried that the war will be unfavorable and could endanger Philadelphia, and that the Continental Congress will also fall.
So, they are rushing to deposit the U.S. dollars issued by the Continental Congress into the bank, fearing that the U.S. dollar's credit will collapse in the future, rendering the money in their hands worthless paper.
And precisely because our bank uses British pounds as its settlement unit, what is deposited is U.S. dollars, but what is displayed is the amount in British pounds.
Now with so many U.S. dollars deposited in the bank, if the U.S. dollar depreciates one day and they come to withdraw, we would definitely lose a large sum of money by paying according to the British pound amount displayed on the account!"
"These people are truly pragmatic!" Charles also felt a surge of anger.
Isn't this clearly taking advantage of his bank?
Collecting such a large amount of U.S. dollars now isn't a huge problem, as the U.S. dollar itself hasn't depreciated and won't depreciate significantly in the short term.
If those people want to withdraw money, the bank can still pay in U.S. dollars.
But if the war continues for several months or years, and the U.S. dollar depreciates, when they come to withdraw, an account showing British pounds might require paying out hundreds of U.S. dollars for the dozens of U.S. dollars originally received.
Fortunately, he had taken some measures in advance to secure the right to mint coins.
He no longer worried about the U.S. dollar's credit issue and was even preparing to issue new U.S. dollars.
But now, everyone distrusted the U.S. dollar because war was imminent, and they dared not spend money to buy and store goods, so they simply deposited it all into safe banks.
This was, in fact, a disguised form of devaluation and would also have an unfavorable impact on his bank's future issuance of U.S. dollars.
Charles was not an economist, but he had studied Western economics and some advanced economic common sense, knowing the benefits of banks settling with international currencies.
Currently, the internationally accepted and reputable currencies, besides real gold and silver, were mainly British pounds.
Therefore, when Charles chose a settlement unit for the bank, he almost unhesitatingly chose the British pound.
The U.S. dollar had just been issued at that time, and Charles himself did not believe its currency value would be stable, so of course it was impossible to use it as a settlement unit.
But now, this advanced approach had clearly brought him trouble.
This U.S. dollar was issued by the Continental Congress and itself had no gold backing; its value would depreciate as the Continental Congress' own credit declined.
And because it involved the credit of the Continental Congress, as well as the public's confidence in the U.S. dollars in their hands, he couldn't refuse to accept U.S. dollars.
In fact, he even had to accept and use them on a large scale to restore everyone's confidence in the U.S. dollar, so that his next coining plan could proceed smoothly.
As an amateur economist, Charles naturally felt very annoyed thinking about this.
It wasn't that there was no solution, but rather that he felt very bothered and stifled.
However, Charles was not a rigid person and knew that James' economic methods were quite good.
So, he very straightforwardly told James all about the agreement he had reached with the Continental Congress and Morris, including the establishment of a central bank, the issuance of U.S. dollar electric power, and so on, asking him to think about countermeasures together, while he himself took a break.
Delegating power to subordinates and unleashing their abilities is something a superior must do.
"Do you have any solutions, James?"
"Haha! The only truly effective method is to change the settlement method: U.S. dollar deposits for U.S. dollars, British pound deposits for British pounds, and Spanish gold coin deposits for Spanish gold coins." James' face relaxed considerably.
"How is this possible?" Charles shook his head. "If a bank doesn't have a unified currency, it has to tie up a lot of cash to handle withdrawals in various different currencies. Not to mention, how many complicated procedures would be added to deposits and withdrawals this way. Philadelphia isn't our only bank; doing that would drive away all our customers, and they would never come back."
"If we don't do that, there's actually a temporary solution: quickly spend the received US dollars. Even if they continuously depreciate, we can minimize losses. Moreover, this can create the illusion that US dollars are in high demand, serving as propaganda for the next coinage plan."
"Who would we spend them on? The common people are already worried about the depreciation of US dollars, which is why they want to save them. Would they accept them?"
"Spend them on the government! The Continental Congress needs loans, right? Just give them US dollars. Even if there are losses, they will share a portion. We can even ask them to compensate for some of the depreciated amount due to the US dollar's depreciation," James said with a smile.
"Hahaha…" Charles also laughed heartily. "That's right, our bank can accept US dollars without hesitation, then lend them to the Continental Congress, and then let the Continental Congress spend them. In the future, our bank's financial credibility among the common people will far exceed that of the Continental Congress. Even if the Continental Congress wants to reclaim the right to mint coins, it won't be very likely."
He thought more than James. The Continental Congress was an ally, but also a competitor. No one could guarantee when the Continental Congress would reclaim its coinage rights due to conflicts of interest. For now, he would tarnish its reputation, making it lose credibility in this area. Then, he would use the reserves of his two banks as a guarantee to issue authoritative US dollars, like a savior, both salvaging the Continental Congress' credit and the value of the US dollars in ordinary people's pockets.
Of course, there's another very important point about issuing currency: there must be sufficient gold or international currency reserves. He currently had a certain amount of gold reserves, mainly from the spoils of raiding the four Iroquois tribes and transactions with two other native tribes. Coupled with the pounds and Spanish gold coins he possessed, although the amount was not small, the development speed of the American economy was very fast. It was estimated that after a few years post-independence, his issuance reserves would be insufficient. It seemed that upon returning to Pittsburgh this time, he would have to send people to places like California to look for gold mines and refine gold himself.
James, who had just offered an idea, was originally a bit smug because he had thought of something Charles hadn't. Now, hearing Charles' words, he immediately reverted to humility. His young master, so young yet able to sit as a Continental Congress Representative, truly possessed vision and ability. He, relying on a clever economic mind, was also about to achieve a prominent status, but trying any tricks with just that was best not even considered.
Seeing James' increasingly respectful demeanor, Charles was also very satisfied. Perhaps it was the influence of traditional feudal concepts, but what he appreciated most was the loyalty of his subordinates. Jonathan and his son were both excellent in this regard.
"James! How is your relationship with miss Elisa, the mayor's granddaughter, progressing? When I returned to Pittsburgh last time, I spoke to your father about this matter, and he is also very concerned about you, eager to hold a grandson!"
"Haha! Not bad," James smiled very naturally.
"Not bad? To what extent? Can I arrange your wedding now?" Charles pressed on.
"Uh, this October's Pennsylvania Assembly re-election, Grandfather Bonis also participated, and I heard he did well and might be elected. Elisa and Grandfather Bonis' intention is for us to hold the wedding after he is elected. When you went to New York a few days ago, I had already written to tell my father, and his reply was affirmative," James said with a bright smile.
"Hahahaha! Great, you're already arranging the wedding and didn't even tell me!" Charles heavily punched James.
"Well, because Grandfather Bonis' election isn't confirmed yet, it's not good to announce this matter now. If he is truly elected and the wedding is set, we will definitely report to you."
"En! That's more stable. Announcing this news upon his election will make people even happier. It's already October; I should prepare your gifts!" Charles nodded in understanding.
Seeing James' warm expression, he knew that his relationship with Elisa must be very good. Even if Bonis wasn't elected as a state assemblyman this time, their wedding would definitely be fine. It was a pity that he, the master of a similar age, was neither too high nor too low, and hadn't found a suitable partner yet.
Thinking of old Butler Jonathan asking about his and Diana's affairs, he couldn't help but use the same questions the old butler had asked him on his son. He pressed James, saying:
"James, my friend, miss Elisa is Mayor Bonis'—oh, perhaps soon to be called Assemblyman Bonis'—granddaughter. She seems to be the Bonis family's only heir, right? How much annual income and how many assets does she have?"
"She is the Bonis family's only heir. She has already inherited a manor from her grandmother, with an annual income of five hundred gold coins. The entire Bonis family's current annual income is about three thousand pounds, and their annual expenses are not much. This has accumulated a large amount of assets. Just in our Pittsburgh Bank, they have a deposit of five thousand pounds, and I heard they have similar amounts deposited in the Pennsylvania Bank and the Bank of America. Their family is definitely the wealthiest in town." James was truly Jonathan's son; like his father, he was very concerned about the financial situation of the girl's family and had already understood it thoroughly.
"Hahahaha! James, congratulations, you're marrying a rich woman!" Charles praised with a smile.
An annual income of three thousand pounds and over ten thousand pounds in village assets were, of course, insignificant compared to the profits of his coal and steel joint venture. However, even in all of America, this was already a very high annual income.
If the town hadn't been close to Philadelphia, such a high income might not have been possible. Moreover, the Bonis family held the technology for manufacturing Picric acid, and their future income would increase. James marrying miss Elisa, who was not particularly beautiful, indeed represented a leap from servant to wealthy status.
However, Charles did not feel any jealousy towards his subordinate. According to the traditions of the time, James was still a member of his family, and no matter which family he married into, it would not change the fact that he came from the Godfrey Family. Moreover, having such a wealthy friend meant he would have a strong political and economic ally in the future.
In the following days, Charles was busy with Morris, Adams, and others, handling matters related to loans, the central bank, and the construction of land defenses around Philadelphia. He had almost no free time.
By the time he saw James again, it was when the results of the Pennsylvania state assembly elections were officially announced.
"Sir! Grandfather Bonis has been elected as a member of the Pennsylvania Assembly!" James shouted to Charles as soon as he saw him.
"Oh? Haha! Then your marriage to miss Elisa is settled, isn't it?" Charles smiled and embraced his friend.
"Haha! Yes, Grandfather Bonis has already announced our engagement in town and set the wedding for New Year's Day next year at the cathedral in Philadelphia. He asked me to invite you to attend," James said, a little nervously.
"Nonsense, I'm also a member of the groom's family, why would he need to invite me? If he wants to discuss something with me, he can say so directly, instead of using the wedding as an excuse." Charles shook his head with a wry smile. "Don't worry, James, I'll return to Pittsburgh in a few days. On New Year's Day next year, I will definitely bring your father and come together to attend your wedding."
"Thank you, sir!" James bowed deeply.
Charles had settled his personal affairs, but his work matters were not so easy to complete. He was also a little worried about James' wedding, because the latest news from the New York battle had just arrived, and the situation was very unfavorable. Charles was even concerned that if things continued to develop this way, it was uncertain whether James' wedding could even be held in Philadelphia.
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With Charles' support, the Continental Congress passed a resolution granting Washington full military command. Upon receiving the authorization, Washington immediately convened a military meeting, overruled dissenting opinions, issued orders, and organized troops for a major retreat from New York, moving all military supplies. At this time, the British army had begun to tighten its encirclement, advancing step by step towards New York City.
In early September, two warships, one carrying forty cannons and the other two, sailed up the East River. Their broadsides landed among the Continental army troops, causing significant casualties. One cannonball even landed near Washington.
On September 14th, the Continental army retreated to "king's Bridge." This bridge spanned the Spuyten Duyvil Creek and was the only bridge connecting Manhattan Island to the mainland. Here, they were suddenly intercepted by British army ground forces.
The intense artillery fire resulted in dozens of Continental army casualties, and the troops briefly fell into disarray. Washington personally commanded calmly at the front, stabilizing morale, and finally repelled the enemy. He decided to abandon the positions in northern New York, accelerate the retreat, and fight as they withdrew.
This was the first major strategic transfer and retreat in the history of the United States' founding—to be more direct, it was a major rout. The future was uncertain, with tens of thousands of pursuers behind them, and their own morale was low, with an unstable army. Soldiers whose terms of service had expired were eager to return home to reunite with their families and were unwilling to fight for their lives. Desertions increased daily, and the army suffered heavy losses, pushing the Continental army to the brink of collapse.
Fortunately, General Howe at the time still intended to persuade the Continental Congress to surrender. Despite having an overwhelming advantage in both numbers and quality, the British army did not pursue relentlessly, resting in place day after day.
To create a good atmosphere for negotiations held on Staten Island, British army commander General Howe even sent an envoy with a letter, suggesting an exchange of prisoners of war. It was not until the peace talks broke down that the British army resumed its pursuit and attack on the Continental army.
On September 24th, Washington wrote a long letter to the Continental Congress during his retreat, strongly arguing for the establishment of a standing army. This hastily written letter was the product of his summary of months of war gains, losses, experiences, and lessons. He said:
"...Our army's current situation seems to be facing another disintegration... This struggle is by no means the work of a single day; the war must be conducted systematically. Based on some of my recent thoughts, if there is a lack of a standing army now, the consequences of destruction will ultimately be inevitable. If I were to swear under oath whether militias, on the whole, are beneficial or detrimental, I would agree with the latter."
Due to the circumstances, by the time the letter was delivered to the Continental Congress, it was already October.
The Continental Congress had repeatedly rejected Washington's request to establish a standing army, but this time, upon seeing what could almost be called an ultimatum, everyone finally calmly sat down and began to think.
First, the Military and Ordnance Committee discussed the establishment of a standing army. Although John Adams was Washington's close friend and loyal supporter, on the issue of standing army construction, he sided with the democratic radical Samuel Adams. He feared that a large standing army would lead to totalitarianism and dictatorship, and even more, that military figures would monopolize power.
Charles agreed with Washington's view and advocated for the establishment of a standing army. He had lost debates to Adams before, but after seeing Washington's letter, he knew he could definitely persuade Adams, because it was clear that if a standing army mechanism was not established and fresh recruits were not supplemented, this Continental army would collapse immediately.
When choosing between an imminent collapse and the possible emergence of a powerful military strongman, Adams was still very rational.
Charles barely had to say much; he had already expressed his agreement and stated his willingness to lobby other representatives in the Continental Congress to support the establishment of a standing army. This left Charles, who had prepared a speech to persuade him, very annoyed, feeling as if he had punched, only to find nothing there, no point of impact.
The subsequent Continental Congress was also very efficient. Charles and Adams, one a rising strongman who had just led a battlefield victory, and the other a political strongman who had long led military affairs, these two immensely influential figures jointly supported Washington's proposal. How many representatives could still object?
The resolution to establish a standing army was quickly passed. The new army's soldiers would serve throughout the entire war of Independence.
To successfully recruit soldiers and improve their treatment, in addition to more generous allowances, each person would receive one hundred to one hundred and fifty acres of land at the end of the war, and officers' treatment would be even more generous.
At the same time, it was required that the thirteen states must provide a fixed quota of soldiers based on their financial and human resources, which could be considered a form of conscription.