How the Battle of Yorktown was bankrolled by Spain & France

How the Battle of Yorktown was bankrolled by Spain & France  – part 1

The Battle of Yorktown is widely recognized as the most important American victory during the Revolutionary War. Less well known is the critical role that American allies France and Spain played in this world war. In particular, a cash infusion of Spanish silver coins, which had been quickly collected in Cuba, enabled Washington to mobilize and supply the Continental army for the decisive Battle of Yorktown.

This post (part 1) describes the financial difficulties Washington faced heading into the Battle of Yorktown. As described by Washington, “we are at the end of our tether” and without additional funding the American forces could not be held together much longer. French support for the American war effort is discussed below, along with a summary of the battle of Yorktown. The post continues (part 2) with a discussion of Spanish assistance during the Revolutionary War, led by Don Bernardo de Gàlvez, the Spanish Governor of New Orleans.

The siege: The Battle of Yorktown was not a single fixed battle, but rather was a three week long siege that encircled the British army with land and naval forces, preventing their escape by sea. British General Cornwallis had selected Yorktown as a base of operations in Virginia because it contained a deep water port where the York River meets the Chesapeake Bay. The British dug in and protected their position in the Town of York with a chain of seven redoubts and batteries linked by fortified earthworks.

The siege began on September 26, 1781 when French forces led by the Marquis de Lafayette blocked Cornwallis’ escape by land, while the French fleet led by Admiral de Grasse blockaded the York river and Chesapeake Bay. General Washington had deceived British General Clinton into thinking that the Americans would be attacking New York, which kept the British forces divided. Washington quickly marched south to link up with additional French troops led by Comte de Rochambeau (the commander of the French expeditionary forces in America) to further encircle and trap Cornwallis on the Yorktown Peninsula.

A smaller British fleet under Admiral Thomas Graves was unable to counter the larger French fleet which prevented the Royal Navy from reinforcing or evacuating Cornwallis’ besieged troops. On September 5, in the two hour naval Battle of the Chesapeake, Admiral de Grasse and his larger French ships (25 ships of the line and 6 frigates) prevented the outnumbered and outgunned British fleet (19 ships of the line and 7 frigates) from breaking through to reach Cornwallis.

Pictured below is the naval Battle of the Chesapeake also known as the Battle of the Virginia Capes. French Admiral de Grasse and Comte de Rochambeau are also pictured below.

During the siege American and French engineers built a series of trenches and earthworks around the British positions to protect their troops from British artillery fire. Ultimately the American trenches stretched 2,000 yards long and reached within six hundred yards of the British defenses. Toward the end of the Siege, the American forces began building a second, closer line of trenches to enable a direct assault on Yorktown. Washington and Rochambeau understood that the only way they could complete the second line of trenches would be by capturing Redoubts 9 and 10, which enabled the British to fire directly upon allied forces and the second trench line.

On the night of October 14, 400 French troops led by Major General De Viomenil attacked Redout 9. Led by Alexander Hamilton and Lafayette 400 American troops simultaneously attacked Redoubt 10. After capturing the two redoubts, the allies were now able to fire directly down into British positions. Realizing that his 9,000 British troops were trapped and outnumbered by 17,000 combined American and French troops, General Cornwallis formerly surrendered his 8,000 troops on October 19, 1781.

As recounted in the Hamilton musical, a British band is reputed to have played “The world turned upside down” as Cornwallis’ troops marched out to surrender. After the surrender, American and French officers invited their British counterparts to dinner. For a link to one of the best eyewitness accounts of the British surrender, click here to read the journal of Ebenezer Denny, a Major in the Continental Army.

Upon learning of General Cornwallis’ surrender, Lord North exclaimed, “Oh, God! It’s all over. It’s all over.” While the Treaty of Paris would not be signed until September 3, 1783, the British loss at the Battle of Yorktown undermined the will of Britain’s increasingly overtaxed population to continue supporting the six year long war. When news of the British defeat at Yorktown reached Europe, Britain’s credit rating fell while America’s credit rating reversed.

Lord North’s ministry soon fell and Parliament voted on March 5, 1782 to cease offensive operations and authorize peace negotiations. The British continued to hold 10,000 troops in New York under General Clinton’s command for two more years until the Treaty of Paris was finalized in 1783.

Pictured above is Trumbull’s depiction of General Cornwallis surrendering to French and American forces. In fact, Cornwallis sent Brigadier General Charles O’hara to surrender his sword to Washington. In turn, Washington sent his second-in-command, Benjamin Lincoln to accept Cornwallis’ sword.

Funding the Battle of Yorktown: In the 1770s, Great Britain’s colonial empire stretched around the world and its military was well financed. Not only did King George have access to tremendous wealth, the British government had excellent credit and ready access to capital. By contrast, six years into the Revolutionary War, the Continental army was under-funded, ill-equipped and increasingly desperate.

Washington recognized that “in modern wars the longest purse may chiefly determine the event.” In a letter to Joseph Jones dated July 22, 1780 Washington explained his fears that Britain’s purse afforded it resources that the Americans were sorely lacking:

I fear that of the enemy will be found to be so…the nation [Britain] is rich, & their riches afford a fund which will not be easily exhausted. Besides, their system of public credit is such, that it is capable of greater exertions than that of any other nation.

By 1781, worsening inflation was rendering the American paper currency increasingly worthless and undermining Washington’s efforts to maintain and support the Continental Army. To counter the British “Southern campaign,” Washington knew he needed supplies for what was likely to be a long siege at Yorktown. Moreover, the long trip from New York to Virginia would further undermine the morale of his rag tag troops.

Faced with increasingly bleak financial options, Washington dispatched Henry Laurens, Thomas Paine and Vicomte de Noailles (a cousin of Lafayette) on a secret mission to secure desperately needed loans from France. Departing from Boston on February 11, 1781 on the USS Alliance (the fastest American ship), Laurens had instructions to meet up with Benjamin Franklin in Paris, who had arranged meetings with French Foreign Minister Comte de Vergennes and King Louis XVI.

In a coded letter dated April 9, 1781, Washington wrote to John Laurens, that “we are at the end of our tether, & that now or never deliverance must come.” Washington’s letter to John Laurens, April 9, 1781 explained that without additional funding the American forces “which is bunt the remmant of an Army” cannot be held together:

As an honest & candid man—as a man whose all depends on the final and happy termination of the present contest, I assert this—While I give it decisively as my opinion, that without a foreign loan our present force (which is but the remnant of an Army) cannot be kept together this Campaign; much less will it be encreased, & in readiness for another.

Ultimately, Laurens’ mission succeeded in convincing France to release another 6,000,000 livres, supplies and further guarantees of military support. Laurens returned to Boston on June 6, 1781 with additional arms and equipment necessary to confront Cornwallis.

Nevertheless, Washington lacked the cash to pay his troops, many of whom had only been paid in rapidly devaluating paper currency. In letters dated August 17 and August 27, 1781 to Robert Morris, the Superintendent of Finance for the Continental Congress, Washington explained that one month’s pay “in specie” was necessary to prevent further troop desertions heading into the Yorktown campaign:

I must entreat you if possible to procure one months pay in specie for the detachment which I have under my command part of those troops have not been paid any thing for a very long time past, and have upon several occasions shewn marks of great discontent—The service they are going upon is disagreeable to the Northern Regiments, but I make no doubt that a douceur of a little hard money would put them in proper tempter.

Anticipating Washington’s “active operations,” Robert Morris urgently requested additional funding from the States. In his August 22 letter to the States Morris wrote:

The Exigencies of the Service require immediate Attention, We are on the Eve of the most Active Operations, and should they be in anywise retarded by the want of necessary Supplies, the most unhappy Consequences may follow. Those who may be justly chargeable with Neglect, will have to Answer for it to their Country, to their Allies, to the present generation, and to all Posterity. I hope, intreat, expect, the utmost possible Efforts on the Part of your State; and I confide in your Excellency’s Prudence and Vigor, to render those Efforts effectual.

Morris recorded in his diary that “great S[y]mptoms of discontent had Appeared on their passing through this City” of Philadelphia. In the six days between the army’s departure from Trenton and arrival at Elkton on September 6, at least eleven soldiers deserted from the 2nd Continental Artillery Regiment, not counting other desertions in other units.

French Admiral de Grasse and his fleet arrived at the Chesapeake Bay at the end of August. De Grasse brought with him additional troops and began a naval blockade around Yorktown. Importantly for Washington, de Grasse had also acquired 500,000 silver pesos on loan from bankers and merchants in Havana, Cuba.

Upon learning that French Admiral de Grasse had arrived with 1.2 million livres in silver coin, Morris was able to pay salaries as requested by Washington. In a letter to Washington dated September 9, 1781, Morris confirmed that the requested hard specie (gold and silver coins) would be waiting in Elkton, Maryland, to pay Washington’s troops and staunch troop desertions by his volunteer army.

Before departing for Yorktown, on September 8, 1781, the Continental army was in fact paid with precious silver coins in Elkton, Maryland. For many Continental soldiers this was the first (and only) time that they were paid with hard specie rather than with worthless continental currency. From Elkton the French and American armies continued south to Yorktown to meet up with Lafayette and encircle Cornwallis.

Joseph Plum Martin, a Sergeant with the Corps of Sappers and Miners, reflected that “we each of us received a MONTH’S PAY, in specie, borrowed, as I was informed, by our French officers from the officers in the French army. This was the first that could be called money, which we had received as wages since the year ‘76, or that we ever did receive till the close of the war, or indeed, ever after, as wages.” John Hudson, a 13 year old private with the First New York Regiment, observed that at Elkton “I received the only pay that I ever drew for my services during the war, being six French crowns, which were a part of what Robert Morris borrowed on his own credit from the French commander to supply the most urgent necessities of the soldiers. My comrades received the same amount.”

Background of French support for the Revolutionary War: Hoping to reclaim territories lost to the British in the 7 Years War (also known as the French and Indian War), France began to secretly ship arms and supplies to the Americans in late 1775. France did so by establishing dummy corporations to receive French funding and supplies. Because it was unclear whether this early French aid was provided as a loan or a gift, the issue would later emerge as one of the disputes behind the infamous XYZ Affair that led to the brief 1797 Quasi-War with France.

After the Battle of Saratoga, as the Americans proved that they were not going to be easily defeated, the French Government provided the Americans with loans which totaling over two million dollars. France formally recognized the United States with the Treaty of Alliance, signed in February of 1778. Shortly thereafter Britain declared war on France. Spain entered the war in 1779.

In 1782 John Adams secured additional loans from Dutch bankers. After the war, the Continental Congress struggled with its obligations. Payments of interest to France ceased in 1785 and full default occurred in 1787.

According to Alexander Hamilton’s Report on the Public Credit, America’s total foreign debts totaled $10,070,307 and arrears of interest through December, 1789 totaled another $1,640,071. Click here for a discussion of Hamilton’s Report to Congress. Copied below are Hamilton’s calculations of outstanding debt:

Further reading:

The Little-Remembered Ally Who Helped America Win the Revolution (Erick Trickey, Smithsonian magazine)

U.S. Debt and Foreign Loans: 1775-1795 (State Dep’t, Office of Historian)

The Contributions of Spain and Cuba to American Independence (Eduardo Tejera)

Our American History: La Historia de Nuestra America, Battle of Yorktown

Spain and the Independence of the United States (Thomas E. Chavez)

How was the Revolutionary War Paid For? (John Smith, Journal of the American Revolution)

French Monetary Support (Historical Society of Hartford)

Brothers at Arms: American Independence and the Men of France and Spain Who Saved It (Larrie Ferreiro)

Washington, Rochambeau and the Yorktown Campaign of 1781 (Robert Selig, U.S. Army Center of Military History)

Admiral De Grasse and American Independence (Charles Lee Lewis)

Lafayette’s Account of the Battle of York

The Papers of Robert Morris, Volume 2 (August t0 September 1781)

The Operations of the French Fleet under the Count de Grasse in 1781-1782 (John Gilmary Shea)

The Battle of Yorktown: A Reassessment (John D. Grainer)

The Diplomatic History of the American Revolution (Jonathan Dull)

The Correspondence and Public Papers of John Jay

Hamilton’s Report on the Public Credit

Pictured below are commemorative medallions from 1783 designed by Benjamin Franklin, the American Ambassador to France. The coins commemorate the battle of Yorktown and were minted in Paris.

The maps pictured below displays the placement of British, French and American forces at the Battle of Yorktown.

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