Ben Franklin – Spending Money to Invest Time
Posted by Orrin Woodward on February 19, 2011
Here is a second portion from my study on Ben Franklin, one of the most creative, industrious, and interesting of the Founding Fathers. Enjoy. God Bless, Orrin Woodward
After multiple attempts for a peaceful resolution failed, the Declaration of Independence proclaimed the new United States of America, moving Ben Franklin into the third stage of his life – the mastership stage. The colonist were not naive, knowing that if they intended to maintain their independence, they would need the help of a European ally, everyone knew that ally must be France, the recently defeated mortal enemy of England. With the new nation, in the midst of battle field defeats, clinging to a tenuous union of independent states, and suffering from a bleak financial outlook, Franklin was asked to be the lead ambassador to France. If he failed to gain an alliance, the cause of America’s freedom would fail with it. But, if Franklin could somehow pull off a miracle, one needing a combination of personal credibility, professional tact, and France’s burning hatred of her bitter rival, perhaps, a new nation would not be snuffed out at birth. Franklin, thanks to his financial stability, receiving multiple streams of income monthly, having a world wide reputation, and highly developed skills in diplomacy, was up to the daunting task. Using his leadership, refined by his involvement in innumerable community organizations, he had just the right mix of wealth, prestige, and skills, to turn the diplomatic tide with France, changing a luke warm de Vergennes, the French Foreign minister, into a vital friend and supporter of the countries’ common interests. Franklin helped de Vergennes see that France’s interest and America’s were one, exemplifying the principle taught in the saying, “The enemy of my enemy is my friend.” Many historians have acknowledged, that Franklin’s role as chief diplomatic leader, was as important as Washington’s role as chief military leader, in winning the Revolutionary War. When both France and Spain entering the conflict on America’s side, the balance of power had shifted to the upstarts. England, unwilling to admit its political gaffe, now fought for its national honor, hoping to either separate the states by a divide and conquer strategy, or failing that, to run the colonials out of monetary funds through a costly war of attrition. Both of these strategies had legitimate chances of success. The first, because people like Benedict Arnold etc, under the right conditions, would have gladly sold their honor for recognition and rewards. The second, because the Continental Congress was printing paper, in the hopes of passing it off as money, making the printed paper Continentals slide down the inflationary slope into oblivion. Meanwhile, the States, not to be outdone, printed money of their own, creating an untenable position of State paper backed by Continental paper, backed by nothing. The inflation caused by both the State and National paper printing schemes, ruined the credit of America. The paper money was soon worth pennies on the dollar, leaving a dismal legacy in the popular saying, “Not worth a Continental.”
Stepping into the fray, Franklin, with an alchemic combination of diplomacy and realpolitik secured loan after loan, several times, with nothing more than his reputable name as the real collateral. Arguing that the cause of his county was the cause of liberty for mankind, Franklin engaged the imagination of the French intelligentsia, fed upon the writing of liberty from Rousseau, Voltaire, Montesquieu, and the Physiocrats. At the same time, he strengthened de Vergennes with the reasoning of power politics, that any enemy fighting your enemy ought to be supported, since it’s the least costly way, in men and money, to reduce a rival. These loans, may have been Franklin’s finest hour, the last of which, allowed Washington to supply his army for his southern campaign, ultimately ending in his victory against Cornwallis, at the Battle of Yorktown. Simply stated, no money, no supplies, no battle, and thus, no possible victory. But, Franklin was not one to blow his own horn, believing the best way to help someone accept an idea is to make them believe it’s their own. Franklin learned never to speak in declarative assertions, discovering that assertions created resistance, where Socratic questions created mutual discovery. He refused to criticize another’s view or degrade his person, rather he asked questions, helping the other person to think, leading him a step at a time to Franklin’s well thought out position. He was a master at dealing with people because he had learned early in life that one catches more bees with honey than with vinegar. Because of his legendary negotiating techniques, Franklin ensured a happy ending to the Revolutionary War, refusing to even sit down with the British to discuss a possible peace, until they had accepted America’s independence as a necessary precondition. With this trump card, Franklin won the diplomatic posturing before the treaty talks had even begun.
After the war, Franklin returned to Pennsylvania, serving his State one final time at the Constitutional Convention. Many felt the Articles of Confederation were not strong enough to maintain the unity of the States. Some in fact, believed the States would separate into smaller segments, leaving the dream of a United States behind. Franklin, although an old man, suffering from many physical ailments, played an crucial role in the development of the U.S. Constitution. It was Franklin’s character and compromising manner, that led to the biggest breakthrough of the Convention, called the Connecticut Compromise, that ended the divide between the populous states and their smaller brethren. Franklin’s diplomatic genius tempered the proceedings, leading to one of the most important man made documents created in the recorded annals of history. He retired from public service shortly after the convention, but even in retirement, his active mind continued to serve the public. Shortly before his death, Franklin became president of the Pennsylvania Society for Promoting the Abolition of Slavery, becoming one of the first Founding Fathers to make a public stand against slavery, believing the degenerative institution stood against every principle that the Founders themselves had fought for – liberty, equality of opportunity and the rule of law.
In his will, Franklin provided one more lesson on finances to the world, teaching the wonder of compounding interest. He left 1,000 pounds (around $6,000 in today’s money) in a trust to both Boston and Philadelphia with the condition that it couldn’t be touched for 200 years. The original 2,000 pounds ($12k) invested in the two trust, grew in the the 200 years, to over $7 million, an impressive return on investment for the cities thanks to the financial mastery of Franklin. His works are still making a difference today, teaching the cities to delay their gratification, enjoying the magnifying effects of compound interest. Franklin reminds American’s that incremental gains over time become great surpluses, as he had shared many years earlier, “Human felicity [happiness or fortune] is produced not as much by great pieces of good fortune that seldom happen as by little advantages that occur every day.” Financial mastery is a process of learning, that small incremental investments, compounded over time, become large amounts, freeing people from the enervating effects of mindless work, opening up leisure time to pursue one’s destiny. Franklin had written, “Your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones,” a fitting description of his life; not a perfect one, but when subtracting the good habits from the bad, his net worth, in the service of his fellow man, he ranks near the top of the list. Most people spend a lifetime in apprenticeship mode, while some reach journeyman status, but only a few, the hungry and driven few, reach the mastership level, freeing themselves from financial concern, investing their lives into the service of others. This is the priceless lesson learned from Franklin’s life.