If you thought cost overruns were a 20th-century Pentagon phenomenon, you're wrong. They go all the way back to the Revoluntionary War.
Robert Morris, who was the man responsible for directing the fiscal side of the revolution from 1781 until 1784, heard from his quartermaster general on June 17, 1782, that the planned powder magazine in Springfield, Mass., would cost more than twice its budgeted $1,650.
Timothy Pickering wrote Morris that the budgeted funds are "now hardly equally to half the cost of materials alone." What went wrong? Well, in part, the quartermaster general said, the architect's plans showed only half the building, so "half the calculations was made by mistake."
Not only that, the cost of the bricks and stones required to build the magazine was estimated too low. It turns out the contractor had to go farther from the building site to get the materials than the estimates had anticipated.
Morris, who had to dip into his own financial resources to keep the war effort going because the states refused to kick in their share, also had to deal with an angry Gen. George Washington, who was outraged about civil servants being paid before soldiers, at suppliers who wanted the armies to move about at their convenience and by the huge expense accounts that Benjamin Franklin and John Adams ran in Europe. h
Morris' problems are revealed in the fifth volume of his papers, edited by E. James Ferguson and John Catanzariti, professors at Queens College, part of the City University of New York.
Morris was so exasperated with the lack of financial support from the 13 states in the infant republic that he wrote, "I am so habituated to receive apologies instead of money. . . . If complaints of difficulties were equivalent to cash, I should not complain."
The war budget, which had been about $20 million a year until 1782, had to be scaled back to $8 million, a sum he ventured was too low. But even with the budget cuts, the states were still remiss. By May 1782, the states were supposed to have supplied $2 million to the federal government. tHowever, Morris reported, not a shilling had been coughed up "excepting only the state of New Jersey from which I received five thousand, five hundred dollars a few days ago."
In a letter to each of the governors he said, "Now Sir, should the army disband and should scenes of distress and horror be reiterated? . . . I again repeat that I am guiltless, for the fault is the states. They have been deaf to the calls of Congress, to the clamors of the public creditors, to the just demands of a suffering army and even to the reproaches of the enemy who scoffingly declares that the American Army is fed, paid and clothed by France.
The globe-trotting Adams and Franklin arranged loans from the Netherlands and France that kept the creditors at bay and the army in the field.
Washington and Morris battled constantly. Morris paid the bureaucrats with whatever money was on hand, while soldiers' wages depended on the sporadic cash flow from the states.