Sunday, February 13, 2022

Geo Washington (1732-1799) - Profit & Loss - A 1915 View

George Washington as Farmer by Junius Brutus Stearns. 1851

George Washington: Farmer (1915) by Paul Leland Haworth (1876-1936) 

Profit & Loss

... comparatively little of his fortune, which amounted at his death to perhaps three-quarters of a million dollars, was made by the sale of products from his farm. Few farmers have grown rich in that way. Washington's wealth was due in part to inheritance & a fortunate marriage, but most of all to the increment on land. Part of this land he received as a reward for military services, but much of it he was shrewd enough to buy at a low rate & hold until it became more valuable.

This much, however, is plain--a farmer can handle much less money than a salaried man & yet live infinitely better, for his rent, much of his food & many other things cost him nothing.

In Washington's case the problem is further complicated by a number of circumstances. As a result of his marriage he had some money upon bond. For his military services in the French war he received large grants of land & the payment during the Revolution of his personal expenses, & as President he had a salary of twenty-five thousand dollars a year.

The depreciation of the paper currency during the Revolution proved disastrous to him in several ways. When the war broke out much of the money he had obtained by marriage was loaned out on bond, or, as we would say to-day, on mortgage. "I am now receiving," he soon wrote, "a shilling in the pound in discharge of Bonds which ought to have been paid me, & would have been realized before I left Virginia, but for my indulgences to the debtors." In 1778 he said that six or seven thousand pounds that he had in bonds upon interest had been paid in depreciated paper, so that the real value was now reduced to as many hundreds. Some of the paper money that came into his hands he invested in government securities, & at least ten thousand pounds of these in Virginia money were ultimately funded by the federal government for six thousand two hundred & forty-six dollars in three & six per cent. bonds.

And yet, by examining Washington's accounts, one is able to estimate in a rough way the returns he received from his estate, landed & otherwise. We find that in ten months of 1759 he took in £1,839; from January 1, 1760, to January 10, 1761, about £2,535; in 1772, £3,213; from August 3, 1775, to August 30, 1776, £2,119; in 1786, £2,025; in 1791, about £2,025. Included in some of these entries, particularly the earlier ones, are payments of interest & principal on his wife's share of the Custis estate. Of the later ones, that for 1786--a bad farming year--includes rentals on more than a score of parcels of land amounting to £282.15, £25 rental on his fishery, payments for flour, stud fees, etc.

A much better idea of the financial returns from his home estate can be obtained from his actual balances of gain & loss. One of these, namely for 1798, which was a poor year, was as follows:


DR. GAINED                           CR. LOST

Dogue Run Farm  397.11.2         Mansion House .. 466.18. 2-1/2

Union Farm .... 529.10.11-1/2    Muddy Hole Farm   60. 1. 3-1/2

River Farm .... 234. 4.11        Spinning .......  51. 2. 0

Smith's Shop ..  34.12.09-1/2    Hire of Head

Distillery ....  83.13. 1          overseer ..... 140. 0. 0

Jacks .........  56.1

Traveler ......   9.17

  (stud horse)

Shoemaker .....  28.17. 1

Fishery ....... 165.12. 0-1/4     By clear gain on

Dairy .........  30.12. 3          the Estate.....£898.16. 4-1/4

But Washington failed to include in his receipts many items, such as the use of a fine mansion for himself & family, the use of horses & vehicles, & the added value of slaves & live stock by natural increase.

Washington died possessed of property worth about three-quarters of a million, although he began life glad to earn a doubloon a day surveying. The main sources of this wealth have already been indicated, but when all allowance is made in these respects, the fact remains that he was compelled to make a living & to keep expenses paid during the forty years in which the fortune was accumulating, & the main source he drew from was his farms. Not much of that living came from the Custis estate, for, as we have seen, a large part of the money thus acquired was lost. During his eight years as Commander-in-Chief he had his expenses--no more. Of the eight years of his presidency much the same can be said, for all authorities agree that he expended all of his salary in maintaining his position & some say that he spent more. Yet at the end of his life we find him with much more land than he had in 1760, with valuable stocks & bonds, a house & furniture infinitely superior to the eight-room house he first owned, two houses in the Federal City that had cost him about $15,000, several times as many negroes, & live stock estimated by himself at $15,653 & by his manager at upward of twice that sum.

Such being the case--and as no one has ever ventured even to hint that he made money corruptly out of his official position--the conclusion is irresistible that he was a good business man & that he made farming pay, particularly when he was at home.

It is true that only three months before his death he wrote: "The expense at which I live, & the unproductiveness of my estate, will not allow me to lessen my income while I remain in my present situation. On the contrary, were it not for occasional supplies of money in payment for lands sold within the last four or five years, to the amount of upwards of fifty thousand dollars, I should not be able to support the former without involving myself in debt & difficulties," This must be taken, however, to apply to a single period of heavy expense when foreign complications & other causes rendered farming unprofitable, rather than to his whole career. Furthermore, his landed investments from which he could draw no returns were so heavy that he had approached the condition of being land poor & it was only proper that he should cut loose from some of them.