Washington Was Broke? Why Founding Fathers Were Strapped for Cash

Washington needed a job.

Historian Willard Sterne Randall on the forefathers’ financial struggles.

In March 1789, as he prepared to leave his beloved Mount Vernon and drive to his first inauguration in New York City, George Washington dashed off letters to his closest friends and nephews. Washington had not sought the presidency, preferring, after 15 years of warfare, to rusticate in retirement and tend his Potomac acres.

To Henry Knox, his old comrade-in-arms, he wrote, “My movements to the chair of government will be accompanied with feelings not unlike those of a culprit who is going to the place of his execution.” But Washington had more than an abiding sense of civic duty drawing him back into public life: he was broke.

To his favorite nephew, George Augustine Washington, he confided in writing on March 31 what many of his old friends already knew: “Necessity (if this [his unanimous election] had not happened) would have forced me into (frugality) as my means are not adequate to the expense at which I have lived since my retirement to what is called private life.” In other words, he needed the job.

Recent news coverage comparing the assets and income of Mitt Romney with America’s presidents have wildly overstated the wealth of the Founding Fathers, who should be more appropriately labeled the Foundering Fathers.

What the oft-quoted ranking of presidential fortunes by the gurus at 24/7 Wall Street completely misconstrues is that early Americans lived in a largely cashless society, where millions of acres were virtually worthless because nobody had any cash to buy or even rent them.

The 24/7 report asserts that George Washington was far and away the richest of all presidents because he owned 60,000 acres and 300 slaves. In fact, he managed 35,000 acres that was largely on the frontiers of western Pennsylvania and present-day West Virginia, where many of his former Revolutionary War troops were his cashless tenants, unable to pay their rent.

Washington had lost half of his net worth in the revolution. He refused to accept any pay for his eight years as commander in chief. Paying his own expenses and feeding his staff of up to 16 hungry officers at every meal, he also shelled out for a network of some 500 spies in gold.

When he put in his expense account at war’s end, Congress only blinked once, quibbling about $8, and reimbursing paying him $100,000-plus. In worthless Continental dollars that had depreciated by 9,000 percent since 1776.

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