The Rebels breathe the most rancorous and malignant Spirit everywhere. Committees and Associations are formed in every Colony and Resolves passed that no Refugees shall return nor have their Estates restored. The Congress and Assemblies look on tamely and want either the Will or the Power to check those Proceedings. In short, the Mob now reigns as frilly and uncontrolled as in the Beginning of our Troubles and America is as hostile to Great Britain at this Hour as she was at any Period during the War. From all this many people conclude that the Army will not be withdrawn from hence this Year, that the British Troops at least will keep Possession of New York, as it will be very difficult, if possible, to send off any more than the Foreign Troops, and as it would be highly imprudent to abandon this Place in the present Posture of Affairs. Certain it is that, if the whole Army goes away this Year, very few Refugees or Inhabitants within the British Lines will be able to stay behind. Besides those gone to Europe and Canada, upwards of eleven thousand persons have already removed to Nova Scotia and twelve thousand more have given in their Names to be carried to Nova Scotia and other Places. Almost all the principal people here are gone or going; not the tenth part of the Inhabitants will be able to remain if the Army goes this year.

Without the Lines every thing is equally gloomy. Confusion and Discontent prevail. The Load of Taxes is intolerable. Farms in general pay a Tax which is greater than the Rents they paid formerly. Every other Species of Property is proportionably taxed. This, joined to the Insolence of the new Rulers, the unsettled State of Government, and the want of Security for the Persons and Property of Individuals induce Multitudes to wish for a removal and accordingly have applied to Sir G. Carleton for the purpose. I am told that upwards of One hundred thousand people without the Lines have already applied to be transported to Nova Scotia and Canada. At the same time the cool and dispassionate Adherents to Congress are of Opinion that their present System of Government can-not hold long and that the Powers of Congress are utterly in-adequate to the Government of this Country. A very sensible Man from without the Lines told me lately that the judicious people among them did not expect their present Form of Government could last longer than four or five Years, if so long; and, on asking him what Form would be adopted in its Place, he answered, Monarchy.

In the several Assemblies there are some liberal Persons who are for recalling all the Loyalists, or for excluding none but a few that are most obnoxious hitherto. However, there has been a Majority against such Motions in each Assembly and the Leaders of the Mob will not listen to anything of that Kind. The purchasers of confiscated Estates and all who have risen from Obscurity to Power and Eminence are violent against the Loyalists and the Return of Refugees, the former least ’they should lose the Estates which they purchased for a Trifle, the latter least they should again sink into their Original Obscurity; and it unfortunately happens that those two Descriptions are not only numerous, but also include many of the most active Men and such as have most Influence.

The Congress have disbanded most of their Army-all that were enlisted during the War. None remain but those that were enlisted for three Years and amount, as I am told, to about 4ooo. Congress have also stated their public Debt, the whole of which, Foreign and Domestic, as far as it could be ascertained, amounts, according to their Statement, to forty-two million of Spanish Dollars. It is supposed that it must be much more, as many Domestic Debts could not be ascertained and the Debts of particular Colonies which cannot be less’ than a fourth part of this Sum are not included. But supposing the Debt to be no more, it is absolutely impossible for America in its present exhausted State to pay either the Interest or Principal; and indeed many declare without Hesitation that the Americans neither can nor will pay either. Moral Principles, I do assure you, are at a very low Ebb in America at present, and I should not be surprized to hear of an explicit Refusal to pay any part of this Money.

The only good Tidings I have to send you is that Sir G. Carleton is not leaving us. While he stays I think myself safe; and were he left intirely to himself to manage Affairs as he pleased, with the Army he has, I have not the least Doubt but he would yet bring everything in America to a happy Conclusion. He sees Things in a just Light, has Judgment and Penetration to manage Affairs properly, and will neither be frightened, cajoled, nor diverted by Congress or their Adherents in any Measure he undertakes. He has an Altercation with those People at present about Negroes. An Article of the wise provisional Treaty obliges us to give up all Negroes and, accordingly, the Rebels have claimed all that came within the Lines. But many Negroes came in Consequence of Royal Proclamations promising them Protection and Liberty. Sir G. thinks that no minister can by a Treaty disannull those Proclamations; and indeed it would be inhuman to the last Degree and a base Violation of Public Faith to send those Negroes back to their Masters who would beat them with the utmost Cruelty. Accordingly, such Negroes as came in by Virtue of those Proclamations are permitted to go wherever they please. If they chuse to go to their Masters, it is well; if not, they are transported to Nova Scotia or else where as they desire. Sir Guy Carleton in this, as in every thing else, has acted with Openness and Candor. Before any Negroes went off, he desired Mr. Washington to appoint Commissioners to inspect all Embarkations. The Commissioners accordingly came and take Account of all Negroes that go away. The Rebels bluster about this Matter and declare it a Violation of the Provisional Treaty, but Sir Guy goes on deliberately and steadily and refers the Business to future Discussion, that Compensation may be made to the Masters of the Negroes if judged necessary. No Man can be a warmer Friend to the Loyalists than Sir Guy and perhaps no Man has it so much in his Power to serve them.