This blog is about a person most of you have never heard of, yet he played a crucial role in the colonies’ successful fight for independence from England. In fact, I believe he was more responsible for the colonies winning the Revolutionary War than anyone else other than George Washington and a very few others. His name was Haym Salomon, and if you are not cognizant of whom he was and what he did, read on.
Conventional wisdom says an army travels on its stomach, meaning it needs basic supplies, such as food, clothing, weapons, etc., to be able to function effectively. It is axiomatic that if an army overextends its supply lines, it is in dire trouble. There have been many examples of this throughout history, Napoleon’s Russian campaign being one of the more egregious ones. True enough, but it also travels on its pocketbook, as it needs financing to buy those supplies and pay its soldiers to maintain morale.
Much of the Revolutionary Army consisted of volunteers; there was no draft. The soldiers had left their farms and jobs to join up. After a year or two as the losses were piling up and it looked as though defeat was inevitable, many of them had become disillusioned and dispirited. Morale was low. They were not being paid and needed to be. If the soldiers were not paid, many of them would simply go home. Whether or not that constituted “desertion” or “mutiny” would depend on your point of view, but the situation was certainly dire.
The Continental Congress had no ability to raise money through taxes. It was relying on the largesse of the individual States some of which could not or would not provide funds. It did print currency, but the currency became worthless as everyone came to realize the CC was broke. Furthermore, foreign governments, such as France and Holland were only willing or able to extend just so much credit.
Enter Haym Salomon. He was born in 1740 in Lissa, Poland. He was a descendant of Ashkenazi Jews who had fled there to escape the Spanish Inquisition. In his early life he lived in various Western European countries where he became fluent in several languages. This would serve him well later. He emigrated to NY in 1772 where he quickly established himself as a successful merchant and financial broker and dealer specializing in foreign securities.
At some point he became friends with the leader of the NY Branch of the Sons of Liberty, Alexander MacDougall. When war broke out he became very active on the side of the Patriots. He became a major supplier to the Continental Army. The British arrested him, but due to his proficiency in foreign languages they freed him hoping he would serve them as a liaison with their Hessian mercenaries. Instead, Salomon worked covertly against the British by trying to convince the Hessians to desert. He was arrested again, and all his property was confiscated. The Sons of Liberty helped break him out, whereupon he fled to Philadelphia, free but penniless.
In Philadelphia he resumed his financial brokering activities. Again, his language skills came in handy. The French designated him as paymaster general of their forces fighting in the colonies. Moreover, both the Dutch and the Spanish utilized him to sell the securities that were financing their loans to the CC.
In 1781 when the CC established the Office of Finance to run fiscal matters for the colonies Salomon befriended the Superintendent, William Morris. Salomon not only became the most proficient broker of securities to raise funds for the office but also personally loaned money to members of the CC and other federal officers. One of the above was James Madison, who was quoted as saying “I have for some time…been a pensioner on the favor of Haym Salomon…”
One time when the situation was particularly acute Washington is said to have told Morris “send for Haym Salomon,” as if Salomon was the panacea for any and all financial ills. One of Salomon’s accomplishments was to raise money needed to finance the campaign for the decisive Battle of Yorktown, which effectively ended the Revolutionary War.
Within five years of arriving in Philadelphia Salomon went from penniless to wealthy and respected businessman and philanthropist. There is no doubt that he played a crucial role in providing financing for the revolution. He donated his fortune and pledged his personal credit to the patriotic cause. All this came at a time when the CC had no money, no credit, and little credibility among foreign governments, without whose support the Revolution would have failed. (Eventually, France and Holland did provide financing.) One historical footnote: America never fully repaid its debt to France, which some historians maintain was an underlying cause of the French Revolution.
Salomon was never repaid. He died in 1785, penniless, leaving behind a wife and four young children. Many times his descendants have attempted to collect those debts, to no avail. The government has claimed the documentation supporting the loans has been lost.
However, Salomon has not been forgotten entirely:
- His gravesite, though unmarked, has two plaque memorials – one of marble and another of granite. The memorials were donated by William Salomon, a great-grandson and former Managing Partner of the investment firm, Salomon Brothers.
- There is a monument to him in Chicago.
- California is home to an organization named “The American Jewish Patriots and Friends of Haym Salomon.”
- In 1939 Warner Brothers released a film called “Sons of Liberty,” which featured Claude Rains as Salomon.
- During WWII the US Navy commissioned a ship in his honor, the “SS Haym Salomon.”
- In 1975 the US Postal Service issued a commemorative stamp citing him as a “Financial Hero” of the American Revolution.