As the Revolutionary War was coming to an end, financial problems came to the forefront: to name a few, the country’s debts to France, Spain, and Holland, the payment of war reparations, the establishment of public credit, the states’ inability to meet their financial requisitions, and the most immanent, back pay to the disbanding Continental Army’s officers and soldiers.
Payment to the officers and soldiers had been problematic for the entire war. Loans from European nations were slow in materializing, states’ revenue payments were inconsistent at best, the five percent impost was a failure, and devaluation of states’ currencies as well as the Continental dollar left the Congress groping for money constantly. There were only two times when payment in any form was extended to the officers or soldiers: September 1781, when a month’s pay was provided to that part of the main army participating in the Yorktown campaign; and February 1782, when a supply of clothing was sent to officers in lieu of pay. Washington warned Alexander Hamilton that disbanding the army without granting their back pay would produce “Civil commotion and end in blood.” It was only following the Newburgh Affair and the “address and petition” presented by a delegation of army officers to the Grand Committee of the Continental Congress that the situation was given serious consideration.
On January 13, 1783, a subcommittee made up of Alexander Hamilton, James Madison, and John Rutledge was appointed “to report arrangements in concert with the Superintendent of Finance for their consideration.”  The subcommittee listened to the officers’ grievances; they included not only back pay but also unpaid allowances for rations, forage and clothing, and the promised half-pay pensions for the officers. The subcommittee quickly realized that immediate action was necessary to prevent a rebellion in the ranks. The superintendent of finance, Robert Morris, however, maintained that it was “imprudent to give any assurances with respect to future pay until certain funds should be previously established.” To further support his position, the next day, he presented to the subcommittee the projected cost of one month’s back pay ($253,232).He did, though, confide in them that he had taken some measures to provide pay “which depended on events not within our command . . . [and had] communicated these measures in cipher to Genl Washington under an injunction of Secrecy.”
The following day, Morris received a letter from Maj. Gen. Nathanael Greene, commander of the Southern Army, that forced his hand. In the letter, Greene wrote that after the British had evacuated Charleston he had granted two months’ advance pay to his officers, many of whom he had released from further service. Morris, disturbed that Greene had not consulted him before granting the advances, knew that a similar payment would now have to be made to the Northern Army. Later that same day, he met with the subcommittee and informed them that he would grant one month’s pay.
Morris used bills of exchange and personal notes to begin making payments, but he did not have enough to cover the entire Northern Army. Where was he planning to secure further funds from? He was significantly overdrawn on the 1782 French loan and had been informed by the French ambassador, Luzerne, that no further drafts on French funds would be approved. He told the officers’ delegation
That the Money would not only be taken from other essential Service, but that the Amount exceeded any Funds which I rely on, and that of Consequence if the Measures I had taken to procure [additional] Money did not succeed the most serious Evils would be Produced.
This was the second time he referenced certain “measures he had taken.” The advanced planning, business acumen, strong foreign relationships, and undaunting courage of those measures make for a remarkable story.
The first phase began on September 24, 1782, when Morris sent a letter to his private bankers in Europe, Le Couteulx and Company of Paris. In it he stated that he was going to have bills of exchange worth $500,000 sold in Havana for specie. The bills would be drawn on their sister bank in Cadiz, Spain, who, in turn, would seek reimbursement for them. If they could not grant full reimbursement they were to seek assistance from the Willinks, van Staphorsts, and de la Lande and Fynje Bankof Amsterdam who were the holders of the 1782 Dutch loan to the United States. Three days later, Morris wrote to Benjamin Franklin in Paris. He asked him to seek an advance on the 1783 French loan. He asked that $500,000 in specie be sent to Spain so that it could be forwarded to Havana and $500,000 be sent to Le Couteulx and Company in Paris. The former would be used if necessary to buy up any of the unsold bills of exchange; the latter to cover any shortfall with regard to reimbursements. A third plan to raise money involved sending Mr. John Brown, the clerk of the Marine department, to sell a commercial cargo and dispose of additional bills of exchange in Havana.
All of Morris’s efforts were carried out in secrecy. The only person he confided in was General Washington. To safeguard the plan the letter was written in cypher.
I am now about [to] . . . send a person . . . to Havanna, for the purpose of vending bills of exchange to the amount of half a million dollars . . . This plan was adopted from a conviction that a considerable sum would be wanted about the close of the year . . . If I succeed, a part of the money shall be applied as pay. If the plan should fail, the army will not be the only persons who will have reason to lament the failure. This matter I mention to you sir in confidence . . . it is necessary the profoundest secrecy should be observed lest the enemy should prevent the execution of it.
Besides being superintendent of finance, Robert Morris also served as the agent of marine. This meant that the Continental Navy was under his direction.
In August 1780, the Navy Board appointed John Barry captain of the thirty-six-gun Continental frigate Alliance. Over the next two and a half years, Barry, under the direction of Morris, sailed to the waters off the western coast of Europe three times: the first in February 1781 to deliver John Laurens, envoy extraordinary, and Thomas Paine to France; the second in January 1782 to deliver LaFayette to France following the victory at Yorktown; and the third in August 1782 simply to hunt for British ships. After meeting with considerable success, Barry realized that the Alliance was closer to France than the United States and so he headed directly for France “with a determined view to get those I had already taken, in safe and after Landing the Prisoners, to put out immediately.” He arrived at L’Orient, France on October 17, 1782.
Morris, having expected Barry to be at Martinique in the West Indies, sent a letter with John Brown for him. Dated October 14, it stated “I send this Letter in Expectation of your being there; and on receiving it you are to proceed with all convenient speed to Havannah where my further Orders will meet you.” After Morris received Barry’s letter of October 18 informing him that he was in France, Morris sent two letters to Brown, the first to be given to Barry on his arrival at Martinique:
Mr. John Brown, the Bearer of this Letter, will communicate to you the Plan in Consequence of which I gave you the Orders to go to Havannah. I am now only to request that you will cooperate in the Execution of it to the utmost in your Power.
The second letter contained Brown’s instructions for carrying out the mission:
When you arrive at the Havanna you will take the proper measures for Disposal of the Cargo of the Ship Duc de Lauzun and deliver the enclosed Letters which are calculated to establish the Credit and further the Sales of the Bills you may draw. You will take the best methods in your Power to ascertain the Rate at which Bills be sold before you commence the drawing of them, and get as much above Par for those you dispose of as Possible . . . You will draw if Purchases offer draw to the Amount of two hundred thousand Dollars. Whatever you may obtain . . . you will ship in such manner as shall be determined on under a Consideration of all Circumstances by Captain Barry, Captain Green and yourself so as to bring the Money in safely to the United States . . . If contrary to my wishes and expectations Captain Barry should not arrive at the Havanna in Season nor any other Vessel of Force, you will make application to the Admiral and Governor for Convoy; and if it cannot be obtained you will Ship on Board of Captain Green only fifty thousand Dollars and among the best American bottoms you can meet with you will divide the rest and consign it to the Receiver of Continental Taxes in the State in which it may arrive.
On the same day, Morris sent a letter to the Marquis del Real Socorro, a leading member of the Havana City Council. Originally, Morris asked him to assist Mr. Robert Smith, Morris’s agent in Havana, with the sale of the Bills of Exchange, but Smith had become very ill so Morris had to send Brown in his place. He also informed the Councilman that he could not accept the condition placed on the specie that “the Monies arising from the Sale of Bills should remain at Havanna until Advices that the Bills were paid” because it would have
locked up the public Funds for a period which would by no Means be consistent with interest [of the United States] . . . I am drawing Bills on Europe every Day and they are punctually paid, so that any Person conversant in that Business here will give Full Credit to them . . . I have thought it prudent to write myself on the Subject to the Governor [of Cuba], to obtain Letters from the Minister of France here, and from Mr. Rendon that Agent of your Nation.
On November 27, Morris did in fact write to new governor of Cuba, Luis de Unzaga. The French Minister in Philadelphia, Chevalier de La Luzerne, received the request from Morris on the 25th and immediately wrote to the new governor; on the same day Francisco Rendon, the Spanish Agent in Philadelphia, also wrote but to the outgoing governor Juan Manuel de Cagigal.
In Morris’ second letter to Brown on November 23, he referred to the “Disposal of the Cargo of the Ship Duc De Lauzun. On November 26, Morris sent the ship’s “Invoices and Bill of Lading for the Cargo” to Brown. He was
to dispose of this cargo to the best Advantage and from the net proceeds pay Captain Green such Monies as Mr. FitzSimmons [the owner] has stipulated for agreably to the enclosed Note . . . the Remainder you will dispose of agreably to the Directions contained in my Letter of the twenty third Instant.
Morris had one more letter to write before all of his plans were in place, to John Green, captain of the Duc de Lauzun. The letter contained his instructions for carrying out the mission
This letter will be delivered by Mr. John Brown whom you will take on Board your Ship as a Passenger and make the most Dispatch you can to arrive at the Havanna where you will deliver your Cargo to the Order of Mr. Brown . . . You will observe that the Business on which you are sent is of very great Importance therefore you must by no Means chase any Vessel whatever but avoid Action and endeavor to arrive at your intended Port with Celerity and Safety . . . At Havanna you will receive on Board such Monies as Mr. Brown shall lade in your Ship. I expect that you will find the Alliance at the Havanna or that she will arrive shortly after you. In Concert with Mr. Brown and Captain Barry you will devise the best Means you can of bringing the Treasure in Safety to the United States and you will exert yourself in the Performance of that Business.
Captain Green and John Brown aboard the Duc de Lauzun set sail for Martinique early in December; they arrived on or around December 20. Captain Barry and the Alliance set sail from L’Orient on December 9. He explained his delay:
About twenty Days after My arrival I was ready to sail. I was then taken Ill of a fever which Confined me to my Bed for fourteen or fifteen Days . . . [shortly after I was back on my feet] I receiv’d a Letter from several of my officers demanding their wages, but said as Money was scarce they would put up with Bills on Mr. Barclay [who said he] would not except of any orders on him. . . . A few days after they sent the Captn. of Marines to me to lett me Know they would not go on board the Alliance unless they could be paid two Thirds of their Wages . . . I shall leave them here to get to America as well as they can, where I hope they will be try’d by a Court Martial and Meet their deserts.
He departed L’Orient with a crew of 266 sailors and only 5 commissioned officers, one of whom was “not fit for a Ship of War.” He reached the port of St. Pierre on Martinique on the evening of January 8, 1783. Shortly after coming ashore he was given Robert Morris’s instructions, dated October 14. Not concerned that he might be too late to carry out his part of the mission, the next day he ordered the necessary repairs to the Alliance and sought additional commissioned officers, and made arrangements for sufficient water and supplies to be stored on board. Robert Morris and the Continental Congress were depending on him.
After taking on water and stores, and replacing the Alliance’s foretop mast which had been split in a December gale, Barry set sail on January 13. One week later, he reached Cape Francois, Haiti, where he took on a Havana harbor pilot. Before departing, he sent a letter to Morris stating “I had the Honor to receive your Orders of 14 October . . . [and] am now on My way.” On January 31, the Alliance entered Havana harbor; her trip, however, had not been without trouble. She had to use her speed to avoid capture when chased by the Marquis de Vaudreuil’s French squadron bound from Boston to Cape Francois, and again when chased by Adm. Sir Samuel Hood’s squadron off the coast of St. Domingo.
When Barry came ashore he was met by John Brown, clerk of the marine department, and John Green, captain of the Duc de Lauzun. He was introduced to the governor, Luis de Unzaga, and the admiral of the Spanish West Indies fleet, Don Josef Solano. As to his mission all he knew was that Brown would explain it to him when they reached Havana.
Because Brown and Green had already been waiting for him for five weeks, they had to be ready to execute another plan if Barry never arrived.
If contrary to my wishes and expectations Captain Barry should not arrive at the Havanna in Season nor any other Vessel of Force, you will make application to the Admiral and Governor for Convoy; and if it cannot be obtained you will Ship on Board of Captain Green only fifty thousand Dollars and among the best American Bottoms you can meet with you will divide the rest.
It was decided by the captains that the Duc de Lauzun would transport the specie and the Alliance would serve as her convoy. The Duc de Lauzun carried twenty guns; the Alliance, a frigate, carried thirty-six guns. Between the sale of the cargo brought by the Duc de Lauzun to Havana and the sale of the bills of exchange, the total specie aboard the Duc de Lauzun was 72,447 Spanish milled dollars. Only $61,411 came from the sale of the bills according to Le Couteulx and Company, Morris’s bankers in Europe. This was less than he had hoped for. In a report sent to him, they stated, “We wish Mr. Brown might have fulfilled your orders before the news [of a general Peace] reached Havana; for afterwards those bills negociations [became] impracticable.”
Morris also hoped that the governor of Cuba would purchase some of the bills of exchange, but this did not occur. It appears that Morris knew there was a substantial amount of specie in Havana. This was supported later by William Armstrong, a British official, who was present when the Duc de Lauzon arrived in Philadelphia. He stated that twenty million in specie was aboard a Spanish fleet ready to depart for Spain when the Duc de Lauzun sailed from Havana, but was unloaded when news of peace arrived. Also, Francisco de Miranda, a Venezuelan military officer, reported that in June a large Spanish squadron under the command of Adm. Don Jose Solano set sail for Cadiz with about sixty million in specie and goods that had been stored in America.
Barry’s ships were ready to sail on February 13. When they applied for permission to depart, they were informed by the governor, “The port being Shutt which you are not Ignorant of, for the sole object of Complying with secret Instructions from the King my Master, it is entirely out of my power to grant at present you solicitation for sailing.” On the 15th, Barry re-submitted the request, but the response he received was the same. Barry later discovered that the Spanish fleet was preparing to launch an attack on Jamaica and no ship was allowed to leave the harbor until the fleet was underway.
Twenty days later, on March 6, Admiral Solano and the Spanish fleet finally got underway. Because it consisted on nine ships-of-the-line and sixteen brigs and sloops, it took them most of the day to clear the mouth of the harbor. Barry had moved the Alliance and Duc de Lauzun near the harbor mouth the day before, allowing them to slip out ahead of the fleet.
Barry had hoped the fleet would offer them protection for some of the way to Philadelphia, but “not knowing where they were bound, I thought it best to Quit them and make the best of my way. I therefore spoke [with] Capt. Greene and told him what I intended.” He had the ships break off and head for the Gulf of Florida, the body of water between the mainland and the Bahama Islands. Before the day was over, Barry realized that the Duc de Lauzun was a heavier and slower ship than the Alliance. He hoped that this would not become a problem.
On March 7, with the Spanish fleet far astern, two ships were spotted bearing down on the Alliance and Duc de Lauzun from the northeast. Barry, when he was within hailing distance, asked Green what he thought. Green responded, “English men-of-war . . . and I think we ought to stand to the northward.” Barry was stunned. Sailing in such a manner could only end in a battle in which they were out-gunned. He stated that they would head southwest and seek the protection of the Spanish fleet. The British ships continued to gain on them. Barry told Green to continue to head in the direction of the Spanish fleet while the Alliance would drop astern in order to engage the oncoming ships if necessary. By nightfall, the Alliance and Duc de Lauzun “made the Light of part of the Spanish fleet [and] fell in with the Spanish fleet. The enemy then within Gun Shott . . . saw the Lights [and] left off [the] chace.” The next day they again broke off from the fleet and by mid-day reached the Cape of Florida. Barry knew he needed to make a decision that probably would not be well accepted by Green. On March 9, he called for a meeting with Green and Brown regarding the Continental money aboard the Duc de Lauzun. After four hours “it was agreed . . . to have all the public money on board the Alliance but thirteen thousand dollars or thereabouts.” Barry had been right, Green was not happy but he was outranked in the decision.
The two British ships that had chased them thirty-six hours earlier were Capt. Charles Cotton’s thirty-two-gun Alarm and Capt. James Vashon’s twenty-eight-gun Sybil. They had since been joined by Capt. George Martin’s eighteen-gun sloop Tobago. Somehow the secrecy of the mission was no longer a secret. Their orders were to “cruise off the Havannah [and] intercept the American sloop Lauzun of 20 guns, which had a large quantity of specie on board.”
On March 10 the three ships were sailing southward along the Florida coast. At 6:00 am. Barry
Saw 3 Large Sail of Ships standing directly for us, the course they were steering and the place they were in was a convincing proof . . . they were Enemy Ships especially as they wore the same kind of Vanes the Ships that chac’d us before had.
At the same time Barry also observed “a Ship to the Southward . . . who made sail and stood from us.” He showed little concern for her and returned his attention to the three ships that were fast approaching. “I then made a Signal for Capt. Greene to make all the sail he could & follow me.” He set full sail to the southwest hoping to find the Spanish again. Unfortunately, the distance between the Alliance and the Duc de Lauzun began to grow. At 9:00 o’clock the Duc de Lauzun, nearly two miles behind the Alliance, signaled that the enemy were British frigates. Barry, carrying most of the money, knew he had to preserve his ship even if it meant the loss of the Duc de Lauzun. He sent a message to Green that he could not stay with him. Within an hour the Alarm was only a mile and a half behind the Duc de Lauzun with the Sybil and Tobago coming up fast. Then to Barry’s surprise, Green signaled that he wished to speak with Barry. Knowing he had the fastest ship out of all of them, he agreed and lowered some his sails in order to slow down. He then noticed that the Alarm had shortened her sails—this probably was to allow the Sybil and Tobago to catch up and support her in the fight.
When the Alliance came abreast, Barry “asked him what he wanted, he said they were Privateers, I told him he was mistaken & I knew better . . . I [also] told him I could not stay by him, and the only chance he had to Get Clear was to heave his guns overboard to lighten his ship before the wind.”
Showing once again his lack of sailing skill, instead of maneuvering to port so as to get the wind behind him, Green continued his southwesterly course. As soon as the Alliance broke off, the Alarm did the same. While considering his next move, the Sybil moved up and commenced her attack on the Duc de Lauzun. Barry then saw the ship to the southward
Tack and stand for us as having all the Reason in the World to suppose she was a Stranger to the Enemy, likewise at that time Capt. Greene firing stern chasers at one of the Enemys Ships, & she firing bow chaces at him.
Because Captain Cotton of the Alarm had a better view of the ship and had decided to break off the attack, Barry was fairly confident that the ship was not British but rather either French or Spanish. He ordered all sails to be raised and commanded the helmsman “Hard a starboard . . . [and] Ordered a course . . . between Capt. Greene and the Ship next to him in order to Give him a chance to get off by bringing the Enemy to Action.” As the Alliance made her way to the Duc de Lauzun, Barry told his gunners, “Reserve your fire until we are close aboard . . . Dont fire till we’re abreast of her I’ll give you the order when we’re within half-pistol range.”
As soon as the Alliance was abreast of the Sybil, he gave the order “Open Fire!” At point blank range, a broadside was unleashed. The Sybil lost her foretop mast and her flag. During the battle the Sybil would also lose her main and foretop sails and suffer significant damage to her hull. Her casualty count varied from two killed and six wounded (Capt. Vashon’s report) to thirty-seven killed and forty wounded (Jamaica Naval report). The Alliance count listed one killed and nine wounded and its “sails spars and Riging hurt a Little.” According to Mate John Kessler, “before an half hour her [the Sybil’s] guns were silenced and nothing but Musketry was fired from her.” Shortly afterwards, the Sybil stood northeasterly with the Alarm and Tobago. The unidentified ship to the south was the French sixty-four-gun frigate Triton commanded by Capt. Comte de Ligondes. When Barry asked her captain why he had not come to the Alliance and Duc de Lauzun’s support more rapidly, Ligondes said he had “sailed from the Havana two Days before us, and had on board half Million of Dollars and bound to some of the French Islands.” He went on to say that he saw their signal, but based upon what he was carrying, he hesitated, believing it may have been a trick to draw him nearer and attack him. To make amends Ligondes proposed they chase the British ships. Barry agreed. “We then tacked and Gave chace and at Dark lost sight of them they being about 8 or 10 miles Ahead of the Alliance & the Alliance about Two miles ahead of the French Ship and three ahead of the Lauzun.” 
Calling the chase off, Barry bid farewell to Captain Ligondes of the Triton and rejoined the Duc de Lauzun. On the morning of the 11th, he called for another meeting with Green and Brown. Green was not in a good mood. He was “belligerent and nasty” toward Barry for having abandoned the Duc de Lauzun. Matters didn’t improve when Barry insisted that the balance of the public money on board the Duc de Lauzun be transferred to the Alliance. His argument was more than she was a slow sailing ship; she now could not defend herself even against a brig or a sloop. When all was said and done, the Alliance had on board the remaining public money and seventeen of the Duc de Lauzun’s crew where they would be more useful; the Duc de Lauzun had on board two of the Alliance’s nine-pounders.
On March 18, off Cape Hatteras, the Alliance lost sight of the Duc de Lauzun.
I spoke with Greene . . . [and] ordered him to make all sail he could and follow me . . . In a very little time lost sight of him, the Reason must best be known to him, as I am confident he might have kept company with us if had a mind to and I not being off the Deck the whole night and did not carry more sail than he might have kept up with us.
The next day a heavy fog set in. As the Alliance approached Capes of Delaware it began to lift.
I was standing in for the Capes and had got seven fathoms of water on the five fathom bank when it cleared up and close on Board of us was a two decker and a frigate. They immediately gave us chase and we run them into twenty fathoms of water. In a short time it grew thick and we lost sight of them. I then wore and stood in shore again. When we got in twelve fathoms they were the second time close on board of us and a little to the windward. We then bore away and they gave chase . . . It blew very hard and night coming on we soon lost sight of them.
Concerned that the immediate coast was crawling with British ships, Barry decided to head for Rhode Island. Little did he know at the time, while the two British ships were chasing him, the Duc de Lauzun slipped unobserved into the Delaware River and reached Philadelphia.
On March 20, at 3:00 o’clock in the afternoon, the Alliance safely arrived at Newport, Rhode Island. Her precious cargo was safe!
This has been considered the last naval battle of the American Revolution in American waters. On March 23, a French sloop arrived in Chester, Pennsylvania. She was carrying a dispatch for the Continental Congress. In the dispatch were the preliminary Articles of Peace that had been signed in Paris on November 30, 1782.
George Washington to Alexander Hamilton, March 4, 1783, in The Writings of George Washington from the Original Manuscript Sources, 1745-1799, John C. Fitzpatrick, ed., (Washington DC: Government Printing Office, 1931-1944), 26: 277.
Historical Manuscripts Commission, Report on American Manuscripts in the Royal Institution of Great Britain (London: 1904-09), 4:6; John S. Ezell, ed., The New Democracy in America: Travels of Francisco de Miranda in the United States, 1783-1784 (Norman, OK: University of Oklahoma Press, 1963), 3.