Revolutionary War Historical Article
Haym Salomon -The Revolution's Indispensable Financial Genius
By Donald N. Moran
Editor's Note: This article was reprinted from the October 1999 Edition of the Liberty Tree and Valley Compatriot Newsletter
Haym Salomon was born in Lesno, Poland in 1740. His parents were Jewish refugees from Portugal, who escaped religious persecution there. In his early twenties, he traveled throughout Europe acquiring an extensive knowledge of currency finance, that was to serve him well in his coming years.
After ten years of touring Europe he returned to Poland to join in that country's war with Russia. It is believed that he had to escape from the Russians, and decided on England. After earning enough money to pay for his passage to America he sailed in August, 1772. He arrived in New York City that winter.
In 1772, New York was a thriving colonial city of some 14,000 souls. Salomon soon learned that the colonies were in political turmoil over the issue of taxation without representation. Haym soon started a brokerage company and was very successful. His clientele included a large number of prominent loyalists, however, when word of the fighting at Lexington and Concord reached New York, Haym sided with the revolting Colonials and joined New York's active "Sons of Liberty". This was to get him into serious trouble.
New York City fell to the British on September 15th, 1776. Five days later a mysterious fire destroyed twenty-five percent of the city. 493 houses were burned, greatly inconveniencing the British Army that had planned on quartering their troops in these houses.
British General William Howe blamed the Sons of Liberty (He was probably right although no evidence has ever been found to substantiate it). George Washington reportedly said: "Providence, or some good honest fellow, has done more for us than we were disposed to do for ourselves". (Congress had forbidden Washington to destroy the city to deny the British it's use). In any case, before the British and citizens of New York City had put out all the fires, all known members of the Sons of Liberty found themselves in jail! Among them Haym Salomon.
A makeshift prison was set up in an old warehouse, called the "Old Sugar House". The building was in terrible condition and the prisoners suffered horribly. Salomon became ill with a severe chest cold (pneumonia?). He was transferred to the maximum security prison "The Provost" where his condition worsened. Haym noticed that the Hessian soldiers that were serving as guards did not speak English, and the British did not speak German. He let the British know he could speak German, without volunteering to be an interpreter. He did not want to be viewed as a British sympathizer. He was soon given the job and received better treatment, food and quarters.
During this time Salomon became a member of the American espionage ring. They operated in such secrecy that even today we know little of their activities, however, it appears that Salomon was responsible for encouraging more then 500 Hessian solders to desert to the American side! The British paroled him, not knowing of his other activities. However, two years later, he was again arrested, and this time taken to a prison called "Congress Hill". On August 11th, 1778, he was convicted of several capitol charges, all relating to his activities as a spy. He was sentenced to be hanged by the neck until dead, the next morning. He was returned to his cell to await his fate.
Haym Salomon had planned on this eventuality and had hidden some gold coins in his clothes. With them he bribed a guard, escaped and made his way to Philadelphia and safety.
In Philadelphia he reestablished hi s brokerage business from a coffee house and became known as a knowledgeable broker. In addition he was appointed by Congress as Postmaster to the French Army and Navy as well as to the Spanish, French and Dutch Ministers (Ambassadors). He did very well, and soon had created a new fortune.
About this time his ability to make money and serve the cause of American independence was noticed by Robert Morris, Congress's Minister of Finance. Haym started handling transactions for Congress. He did this for little or no remuneration, his continued contribution to the American cause. He made numerous personal loans to members of our fledging government, thus allowing many of them to stay in Philadelphia. It should be noted that these loans were from Haym's personal funds. Like Robert Morris, and other contributors, none were reimbursed or repaid.
In August of 1781, our Southern forces had trapped Lieutenant General Charles Cornwallis in the little Virginia coastal town of Yorktown. George Washington and the main army and the Count de Rochambeau with his French army decided to march from the Hudson Highlands to Yorktown and deliver the final blow. But Washington's war chest was completely empty, as was that of Congress. Washington determined that he needed at least $20,000 to finance the campaign. When Morris told him there were no funds and no credit available, Washington gave him a simple but eloquent order: "Send for Haym Salomon". Haym again came through, and the $20.000 was raised. Washington conducted the Yorktown campaign, which proved to be the final battle of the Revolution, thanks to Haym Salomon.
The Treaty of Paris was signed on September 3rd, 1783, and ended the Revolutionary War, but the financial problems of the newly established Country were not. It was Haym Salomon who managed, time-after-time, to raise the money to bailout the debt ridden government.
The damage done to Salomon's health during his imprisonment is believed to have led to his contracting tuberculosis. At age 44, on January 6th, 1785, he succumbed to the disease, leaving his wife, Rachael (Franks) Salomon, and four young children. He was buried in the Mikveh Israel Cemetery, Philadelphia. His estate showed that he owned approximately $354,000 of Continental securities, but inflation had reduced the value of this substantial amount owed him to a mere $44,732. Against this asset, he owed $45,292. His estate was insolvent! Haym Salomon had died in bankruptcy.
Prior to the adoption of the Constitution in 1789, Congress did not have the power to levee taxes, other then collect duty on imported goods. The overwhelming debt owed by the fledgling Nation far exceeded that of its meager income. Among the indebtedness obligating Congress was the need to provide pensions for those officers and soldiers who had been wounded while serving in the Continental army. This was their first priority. Repaying vast sums to a few creditors like Salomon and Morris, was outweighed by the number of disabled veterans desperately needing governmental support.
Haym's children attempted, on several occasions, to recover the monies owed, but they were always turned down. They even offered to accept a settlement of $100,000 - - but, Congress simply didn't have the money.
In 1925 a bill was introduced in Congress to erect a statue to Haym Salomon in Washington, D.C., but again, events interceded. The financial crash of 1929 caused the government to renege on the project. In 1926, Congress, did however, officially recognize the contribution to the American Revolution by Salomon, and passed a resolution placing a record of his efforts in the Congressional Record.
On December 15th, 1941, the City of Chicago erected the statue of George Washington, flanked by Haym Salomon and Robert Morris. It stands today at the intersection of Wabash and Wacker Drive. Under the image of Salomon it says "Haym Salomon - Gentlemen, Scholar, Patriot. A banker whose only interest was the interest of his Country. "
The twelve foot tall statue we rededicated on January 10, 1999, was sculpted by Robert Paine in 1941 and was originally placed in Hollenbeck Park in East Los Angeles in 1944. Because of vandalism, the statue was moved to MacArthur Park in 1953, and then again to West Wilshire Recreation Center of Pan Pacific Park at the request of the Los Angles Council of the Jewish War Veterans of America, who paid all the relocation expenses.
On March 25th, 1975, in time for the bicentennial, the United States Post Office issued a commemorative postage stamp which honored him as a Revolutionary War hero. It depicted him seated at a desk. On the front side of the stamp are the words "Financial Hero". And, for only the second time in 143 years of U.S. stamps, a message appeared on the back of this stamp, reading:
"Businessman and broker Haym Salomon was responsible for raising most of the money needed to finance the American Revolution and later to save the new nation from collapse. "