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February 4 | This Day in U.S. Military History

Take a look at the this series-- Turn: Washington's Spies - Wikipedia. It tells the story very well.

1777 – George Washington appoints Nathaniel Sackett as spymaster over what will become the Culper Ring of spies. During the American War of Independence the Culper ring was assigned to obtain intelligence on the plans of the British enemy forces in New York. His work involved the recruitment of agents and informers, behind the enemy lines, if necessary paid from a purse of $500 sanctioned by Washington. Nathaniel was recommended to General Washington by William Duer, a Continental Congressman, with whom Nathaniel served on the New York committee for detecting and defeating conspiracies. Taking his instructions personally from Washington, Nathaniel set up an intelligence-gathering network in the New York area. He was soon reporting information gathered in the field to Duer and through him to Washington. The Culpers were extremely successful, the more so for having to develop tradecraft as they went, with an intricate arrangement of dead drops and codes.