With the markets closed today for Washington's Birthday, I'm reminded of some financial advice from our first president.

It's in a letter Washington wrote to a Mr. James Welch — a man who owed Washington money.

In 1797, about the time he retired from the presidency, Washington leased part of his land along Virginia's (now West Virginia's) Great Kanawha River to Mr. Welch. Two years later, James Welch had yet to make a payment.

In fact, not only was he failing to pay Washington, but Welch also was trying to borrow money from others using Washington as a reference!

Here is an excerpt from the letter George Washington sent to James Welch in the Spring of 1799:

Mount Vernon
April 7, 1799


I have received your letter of the 10th of March....

It would be uncandid, Mr Welch, not to inform you that I have heard too much of your character lately, not to expect tale after tale...of your numerous disappointments, by way of excuses for the non-compliance of your agreement with me.... 

I am not unacquainted, Sir, with your repeated declarations of your having purchased my lands on the Great Kanawa and endeavoring by that means, and...misrepresentations to obtain extensive credit where you were not known. Letters, to enquire into the truth of these things, have been written to me on the subject....

I will...assure you in the most unequivocal terms of two things — first, that I am in extreme want of the money which you gave me a solemn promise I should receive the first of January last; and secondly — that however you may have succeeded in imposing upon, and deceiving others, you shall not practice the like game with me with impunity. To contract new debts is not the way to pay old ones....

Consider this letter well; and then write without any deception....

Your Very Humble Servant,

George Washington

As it turned out, George Washington was a better general and president than he was a collection agent — Welch never paid the money.

The part of Washinton's letter we would all to do well to remember is this: "To contract new debts is not the way to pay old ones." He was telling Welch to stop borrowing until he paid what he already owed. Wise advice — even more so in the age of the credit card.

(My boss of many years, Larry Burkett, used to put it this way, "If you're in a financial hole, stop digging.")

Here's one other interesting fact on Washington's Birthday: George Washington's image first appeared on the U.S. one-dollar bill in 1869. The head-and-shoulders image used by the U.S. Bureau of Engraving and Printing (and still in use today) is based on Gilbert Stuart's 1796 portrait of Washington. Stuart's original painting hangs in the National Portrait Gallery in Washington, D.C.