We have now given you an exact account of our military situation. With respect to our civil state, we would acquaint you that Congress have passed the confederation, and sent it to the different States, with strong recommendations to give it speedy consideration and return. Extensive taxation is also recommended, and seems to be universally adopting. You will readily imagine, gentlemen, that our extensive operations have produced great expense, as our inexperience in war has not furnished us with that systematic economy, which is so necessary and so well understood by European nations. We shall have emitted twenty eight millions of dollars by the close of this year, exclusive of Provincial currency. The quantity is too great, and of course the quality is injured. The slow operations of taxes will not afford adequate remedy, and the offer of sterling interest does not fill the loan offices so quickly, as the necessary expenses call for supply. If a loan of two millions sterling could be obtained, the high exchange would enable Congress, by drawing on that fund, to call so large a quantity of paper presently out of circulation, as to appreciate the rest, and give time for taxation to work a radical cure. Without this remedy of the evil, very pernicious consequences may follow ere long. Our situation is rendered still worse by the impossibility of supplying such products as America has largely in store, and which are now greatly wanted in Europe, viz. tobacco, naval stores, rice, indigo, &c. The great superiority of the enemy's naval fleet makes it impossible to send those products in any quantity to sea, with a tolerable prospect of safety. Thus we are prevented from sending you the five thousand hogsheads of tobacco, which you have contracted for, and which Congress has directed to be sent; although several thousands have, for some time past, been purchased for payment of our debts in France. The good intentions of our friends in that country are almost entirely frustrated, by the exertions of the whole power of our enemies by sea, to prevent our sending to, or receiving from Europe, any thing whatever. A war in Europe would greatly and immediately change the scene. The maritime force of France and Spain, with the American cruisers, would quickly lessen the power of Great Britain in the Western ocean, and make room for the reciprocal benefits of commerce between us and our friends.