Leyden, 29 March 1781. RC in John Thaxter's hand PCC, Misc. Papers, Reel No. 1, f. 287–294. printed: Wharton, ed., Dipl. Corr. Amer. Rev. , 4:335–337.

Read in Congress on 19 Nov., this letter consists of an English translation of the memorial that Baron de Lynden, the Dutch envoy at the Swedish court, presented on 28 Feb. to Count Ulrik Scheffer, the Swedish foreign minister. The points set down in the memorial, which the Dutch also sent to Denmark and Russia, are essentially those contained in the States General's countermanifesto of 12 March (to the president of Congress, 18 March, calendared above). It emphasized that Britain's decision to initiate hostilities was not the result of any Dutch transgression, such as the Lee-Neufville treaty, but rather the States General's decision to accede to the armed neutrality. The Netherlands was at war because it had sought to preserve and protect its neutrality, therefore it was incumbent on the other members of the armed neutrality to come to its aid under the terms of the agreement.

Unfortunately for the Dutch, their hopes for assistance from members of the armed neutrality were in vain. In response the Swedish foreign minister 239 image suggested that Sweden, Denmark, and Russia jointly propose an armistice and a return to the status quo ante-bellum. This undertaking would be supported by the naval forces of the three powers and would force Britain to reflect seriously on the consequences that the continuation of the war with the Netherlands would have on its relations with the Northern Powers (Scott, ed., Armed Neutralities of 1780 and 1800 , p. 370–374).

Catherine II rejected any notion that the armed neutrality should intervene effectively in the Anglo-Dutch war. She was no more willing than the Swedish foreign minister to risk war with Britain, but neither was she willing to permit either the League of Armed Neutrality or the Netherlands to become inconvenient obstacles to her effort to mediate between Britain and France (same, p. 375–380; De Madariaga, Armed Neutrality of 1780 , p. 309–311; first letter to the president of Congress, 23 June, below).

It is of Importance to the People of America to observe how much lighter their own Burthens are than those of their Enemies, and for this Reason, I have every Year since I have been in Europe taken Notice of the new Taxes laid annually in Perpetuity upon the People of Great Britain by Parliament, in Support of Tyranny, in addition to all former Debts and Taxes.1 One sixth Part of the new Taxes of this Year, would be more than sufficient to pay the Interest of the whole Sum which America will this Year expend in Support of Liberty.

There cannot be a more striking Contrast than that between the Conduct of Lord North and Mr. Neckar. The abilities of the former as a Financier consist wholly in laying on new Taxes without End: those of the other lie in finding Resources for vast Expences without laying any new Burthens on the People. Mr. Neckar is laying a foundation for a Credit in France as solid as that of Great Britain, by stating to the Public, the Expences and Revenues. This is the only solid Foundation of public Credit. America will never obtain a Credit of any Consequence in Europe, until She has a Credit at Home. It is demonstrable that the People of America are able to lend to Congress every Year, more than Money enough to carry on the War and pay all Expences. What is the Reason they do not? The Reasons are plain: first, they have not known that the public Money was expended by any fixed Rule, so that they could judge how much it amounted to: secondly, they did not see any certain Prospect of the punctual Payment of Interest or Principal at a fixed Value. All the Art of financieering in America lies in ascertaining with precision, by a fixed Standard, how much our Expences are: next ascertaining what our Income is: thirdly, how much must be borrowed: fourthly, how to assure the Payment of Interest and Principal.

If Taxes could be laid by Congress upon Exports and Imports, and upon the Consumption of Articles of Luxury, Convenience and Necessity as they are in Europe, America would be able to raise more every Year in Taxes, than She has ever Spent in one Year. Nay We might oblige Foreigners to pay all the Expences of the War, and establish a Credit much more solid than that of Great Britain, because We have not such a debt to begin with. But without recurring to this System, which might injure our Commerce as well as our Liberties, it is unquestionably owing entirely to Regulations of Prices, Embargoes, and stamping an arbitrary Value upon what had no Value, that has hitherto ruined our Credit. But when all these Systems shall be totally abolished in the several States, and Measures shall be taken to lay annual Taxes of a certain Value, and those Taxes mortgaged for the Payment of Interest, there is not a doubt but every State may obtain Credit enough for the Necessities of its Inhabitants.