Pensions or Patriots

The following is an excerpt from a speech made by firm co-founder Kevin Kern to our Wealth Advisory team at our recent “Making History Conference,” which was held June 12-14th, 2024, at the historic United States Military Academy at West Point. 

Good evening. I have a short story about the importance of guaranteed income, even for revolutionary patriots.

In the waning days of the Revolutionary War, a conspiracy formed in Newburgh, NY, inside the Continental Army, just 10 miles north of where we stand here at West Point. Essentially, our newly formed government was close to being toppled over the lack of pensions once promised to our patriots.

The war was essentially over. Britain’s General Charles Cornwallis and his army surrendered in Yorktown, VA, by 1781, and King George was drafting a peace accord. Newburgh had an encampment of some 7,500 soldiers and officers looking after the remaining British troops until they left New York. Throughout most of the war, officers and soldiers were not paid, and the Continental Congress was broke. It had become evident to the officers that as the war ended, they would not receive the lifetime half pensions promised.

In March 1783, anonymous letters began circulating among the officers at the army’s camp in Newburgh. These letters called for a meeting to discuss the grievances. They hinted at the possibility of taking drastic measures, including marching on Congress in Philadelphia or even establishing a military dictatorship if their demands were not met.

George Washington was approached by a group of officers who suggested that he could become the king of America. Washington quickly declined this idea. Hearing of Washington’s rejection of being king, King George is supposed to have remarked, “If he does that, he will be the greatest man in the world.”

The situation amongst the American troops was dire. Officers with any wealth financed their troops and were also broke. Congress could not yet tax at a federal level, and the 13 colonies could not agree on raising the funds for the army pensions. The Continental Army officers were losing faith in the new citizen congress and its ability to govern and raise much-needed funds.

Enter Major General Horatio Gates, commander of the troops in Newburgh. Unlike Benedict Arnold, Washington’s favorite general, Washington was not a fan of Gates; Gates was not a fighter in George’s mind.

Further south, 200 soldiers had already marched on Philadelphia out of Lancaster, PA, causing Congress to move to Trenton, NJ.  After eight years of battling the British, there was a real movement of a possible military coup led by Gates or his officers. General Gates’ role is unclear, but he and his officers, like Benedict Arnold, saw the new congress fading.  Many in the army believed what they had fought for seemed unreal or unattainable. The idea of peace with Britain would mean continued hardship without the promised pensions.

General Washington became aware of a meeting of the officers in Newburgh. He wrote a letter asking them to consider what they had accomplished before doing anything against the newly formed republic. As the troops gathered to discuss Washington’s response, he surprisingly appeared.

Now you have to imagine this historic moment: Washington at 6 foot 2 inches tall when the average height of his army was 5 foot 7 inches. He was riding up on his favorite horse, Chestnut, which was under his saddle at the capture of Cornwallis at Yorktown. He looked older and weary. It had been eight years since the first shot of the Revolution at Lexington, MA.

In a masterful display of leadership, Washington addressed them personally on March 15, 1783. During his speech, he appealed to their sense of duty and patriotism over the concern of pensions, urging them to trust in Congress and the civilian government with all its flaws. Washington also made an unplanned decision to read a letter from a congressman that explained the difficulties Congress faced in meeting the financial demands.

Washington famously put on his spectacles, a gesture that underscored his sacrifices and hardships, saying, “Gentlemen, you must pardon me. I have grown gray in your service and now find myself going blind.”

Washington urged his officers to remain patient and loyal to the cause they had fought for. He appealed to their sense of honor and patriotism, emphasizing the importance of supporting the fledgling government and trusting in its eventual ability to meet its obligations. His emotional and compelling appeal quelled the unrest. The officers, moved by Washington’s words and display of vulnerability, abandoned any thoughts of insurrection.

In response to the Newburgh conspiracy, congress passed a measure granting officers five years of full pay instead of the lifetime half-pay pension that had been initially promised. It took several decades and numerous legislative efforts to fully address the needs of all veterans of the American Revolutionary War.

Pensions over patriotism. History will show that we came that close to losing our nation over guaranteed income.

Advisors Capital Management, LLC is an investment advisor registered with the United States Securities and Exchange Commission. Registration does not imply any degree of skill or training. All investing carries risk, including the potential for the loss of principal and past performance is no guarantee of future results. This content is for informational purposes only, can change at any time without notice, and is not investment advice or a recommendation to trade any security. Indices are not available for direct investment. We only provide services in jurisdictions where we are registered. Our disclosure brochure (ADV Part 2A) and customer relationship summary (ADV Part 3) are available at https://adviserinfo.sec.gov and upon request.