standing the plausible reasoning he had heard upon that head, he was satisfied a regard was due, and must be paid to the opinions of the people, and to their feelings. Government was formed for their benefit; under the present Constitution, all the powers of it flow from them as the source; they have the means of carrying into execution their will; and, under those circumstances, he could not believe the Legislature ought to be indifferent as to their senti

ments.

[FEBRUARY 18, 1790.

able to re-enlist the soldiers, was reduced almost to the necessity of abandoning the extensive lines in the vicinity of Boston; that notwithstanding this, such were the prejudices in favor of short enlistments, and such the dread of a standing army, that Congress were obliged to enlist the second army for one year, and their times of service expired at or about the end of 1776. During that campaign, Congress were so fully convinced of the fatal consequences of such policy, as, at all events, to deterGentlemen had founded their opposition to mine that the next enlistment should be for the the amendment, principally upon the rigid rules war; but they were afterwards constrained to strictly adhered to in the courts of Common provide the alternative, or for three years;” Law; rules which had often been the means of and those who enlisted for this term, left the stifling justice, to correct the rigor of which Le-army in 1780. We shall also find that, in 1780, gislatures had often interposed. Such rules the army was greatly reduced, and the States could not be used as fetters for the supreme earnestly called on to recruit their respective power of Government. The history of nations regiments; but such were the prospects of gain, proves that Legislatures are superior to them; from privateering and other measures-such their objects are extensive; and in all extraor- had been the sufferings of the army, and so dinary cases, they will make such provisions as weakened was the confidence in public faith, may be requisite to effect general justice and as to require enormous bounties in specie for obequity. The case under consideration was certaining recruits; the average of bounty, in many tainly one of an extraordinary kind. He could States, was two hundred and fifty dollars, in not think that those, whose exertions has res-specie; and in Massachusetts, upwards of two cued them and us from despotism and slavery, hundred and eighty. Thus, then, if we divide were ever honestly paid those hard-earned the army into four classes, it will appear, that claims they were so justly entitled to; and the soldiers of the first and second classes were could not but believe, that as long as those discharged and fully paid, in 1775 and 1776 claims existed, so long there would exist a stig- that the soldiers of the third class, who enlisted ma on the justice, humanity, and gratitude of for the war, between 1777 and 1780, served six, this country. five, or four years, without any other prospect of reward than the stipulations of Congress; and that the fourth class, some who served two and an half years, others two years, and others which amounted to one hundred dollars a year, or eight and one-third dollars a month, in specie, exclusive of the allowance made by Congress. The third and fourth classes were, however, entitled, by their contract, to six and two-thirds of dollars, in specie, per month, or to an equivalent, exclusive of bounties, rations, and clothing; and how has the contract been fulfilled?

Mr. GERRY observed, that it was with great concern he should express his sentiments on a subject so important in its consequences; that after mature deliberation he had formed an opi-one, were amply paid by bounties, the least of nion; but should arguments hereafter convince him that his opinion was incorrect, he should think it consistent not only with honesty, but with honor to give it up.

The amendment proposed by the gentleman from Virginia differed from the proposition before the committee in other points, besides that of discrimination; and he proposed, as an amendment to the amendment, to strike out all that related to this question, that the sense of the He then referred to a memorial of the officers committee may be fairly ascertained, "Whe- and soldiers of the army, stating their grievanther there shall be a discrimination betweences to Congress, in April, 1783; and likewise a the original and assigned holders of public se curities?"

He stated, that the foundation of the motion for a discrimination, was the heavy losses sus tained by our brave and veteran soldiers, in the sale of their public securities. Little or nothing had been urged in favor of meritorious officers, and of citizens who, by the loan of their property, had contributed to the support of the war, and much less of assignees; although he could see no reason why equal justice should not be done to these two classes of original creditors. To form a judgment, then, of the foundation of the motion for a discrimination, let us advert to the history of the army, and we shall find that their first enlistments expired at the end of 1775; that the Commander-in-Chief, not being

resolve of Congress in July, in the same year, for liquidating the accounts of the army, and for issuing certificates which would then pro duce but two shillings and six-pence in the pound, for the balance due to each officer and soldier. And asked, is this a fulfilment of the contract? Was ever a brave army so paid before? If, then, the contract has not been fulfilled, ought not the party, failing to do this, to indemnify the party who have sustained damages? Justice may be in favor of the fourth class; but justice, generosity, and humanity, plead loudly for the third class, the amount of whose demands will not exceed two millions of dollars.

The question then is, Who ought, in justice, to make good these losses of the soldiery? Some

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[H. OF R.

count? Or, where is the injustice of the measure in either case? But should the enemy be expelled, and stock again at par, can the original stockholder, in justice, demand any part of the eighty per cent. premium, or of the eighty per cent. discount, on a pretence that he has not received an equivalent? If the whole had been lost, would he have returned the twenty per cent. which he received of the insurer or purchaser? Surely not. And it must be evident, that although the nominal was the real value of stock before the appearance and after the repulse of the enemy, yet that the value was reduced by the danger of conquest, and that the market price, at that period, was an equivalent.

gentlemen say, those who purchased their certi-premium, and selling it at eighty per cent. disficates. On what principle? From their having received them without an equivalent. Let us attend to the nature of the contract of the soldiers with the assignees; for it differs widely from that with Congress. Some gentlemen consider it in the nature of a specialty or bond, and have carried us to Courts of Law, to prove, that whatever has been paid short of the nominal value of the certificates, is now due from the assignees. This mode of reasoning is inadmissible, because particular decisions of law courts cannot apply to great national questions; and the Legislature is authorized to regulate such courts, and is not to be regulated by them. But if admissible, is the transfer of a soldier's certificate in the nature of an assigned special ty? For, if not, arguments on this principle will fall to the ground, and we shall be again freed from Courts of Law.

Several cases have been cited as precedents for discriminating; that which relates to the reduction of the Canada bills, mentioned by the He undertook to show what a bond was, ac- gentleman from Virginia (Mr. MADISON) was, cording to the law definition of it, and that a by his own acknowledgment, not applicable. certificate differed from it; as in the latter, The case referred to in the act of Queen Anne, there was no condition of performance, or seal, cited by the gentleman, was not analogous; for, and in the transfer no endorsement is necessa-independent of other considerations, the debt ry. The title of an assignee to a certificate was contracted by the Queen, for the support of her by a sale, which is, "a transinutation of pro-household, was unliquidated; and by a vote of perty from one man to another, in consideration the House of Commons, had been disallowed. of some value or recompense. Had the debt been liquidated, and certificates

would have been no interference of Parliament in the subsequent transfer of such certificates, as their whole conduct evinces.

Gentlemen, in favor of discrimination, have also mentioned the South Sea and Mississippi schemes. The gentleman from New Jersey (Mr. BOUDINOT) had clearly shown that the conduct of Parliament in the South Sea scheme was directly against discrimination; for although they imprisoned the directors and others, and confiscated their property, yet they never interposed in the transfers of stock by other proprietors, although it was bought and sold from par to thirteen or fourteen hundred per cent.

He further observed, that the public securi-of it issued, as in the case of our soldiers, there ties of the United States, are a species of stock and property similar to merchandise; they are sold in open market, and at the market price, which is always an equivalent; for the market price of stock was regulated by the public opinion, and depended, in a great measure, on the circumstances of the nation, and on events. It had always been subject to great variations, and ever would be, whilst communities are subject to calamities; and this is a quality inseparable from that species of property. To illustrate this argument, he stated two cases, the latter of which was as follows: Suppose that the public debt was funded, and the stock at par; that a combination of European Powers had been se The history of the Mississippi scheme, I procretly formed to subdue us; that a fleet, with a pose not to state fully; but to mention a few formidable army, had suddenly appeared on our particulars. In the year 1717, the Government coast, and that the enemy had landed before ar- of France were deeply indebted, and had issurangements could be made to resist them, and ed State bills to the amount of several hundred had overrun half the country, would not stock, millions of livres; they were sold at sixty or under such circumstances, be reduced in value? seventy per cent. discount, and the Regent of If a stockholder should insure his property in France, desirous of appreciating them, estathe funds, would not the policy be as valid blished a Commercial Company, with the exagainst such an enemy as any other policy inclusive privilege of trading to the Mississippi, time of war? to consist of such as would subscribe sixty milLet us suppose, that this calamity had raised lions, payable in State bills at par; at first there the premiums to eighty per cent. and the stock-were few disposed to be concerned, but at holder had agreed to allow it, would not the in-length the sum was subscribed; the stock, by surer be justly entitled to it for taking the risk? another arrêt, was increased to one hundred But if the stockholder, instead of giving the millions, the farm of tobacco, amounting to four premium, had made sale of his property at millions a year, was then granted to the Comeighty per cent. discount, being one-fifth of its pany, as a fund to pay the interest, and, under former value, would not that fifth be an equiva- the direction of Mr. Law, they made greater lent, and the sale valid? Where is the differ-profits from it. Stocks were thus enhanced ence, except merely the mode of negotiating, from seventy per cent. below, to twenty per between insuring his property at eighty per cent. cent. above par. The India and African Com

panies were afterwards incorporated with the Mississippi, whose capital was further extended, by which means stocks rose to five or six hundred, and, in the progress of this matter, to one thousand per cent. At this period, a subscription was opened for fifty millions of livres, at ten for one, payable at ten different payments; and so infatuated was the nation, that the subscription, in a few days, amounted to seventy-five millions, being half as much more as was wanted; and the day after the subscription closed, those who had given one thousand sold for two thousand per cent. When the bubble burst, as it is expressed, no attempt was made by Government to interfere in the transfers made by individuals, but all such transfers were valid.

From all which, I think it will appear that stocks are, in their natures, a species of property subject to great variations from calamities and other causes; that the market price will be regulated by public opinion, and that it is always considered as an equivalent. A transfer of property in the funds, at market price, differs widely from the gambling of stock-jobbers, a pernicious species of traffic, of the nature of wagers or bets; and those concerned therein have no property in the funds, and generally are subject to punishment,

[FEBRUARY 18, 1790.

Or for a noncompliance of some of the States with the requisitions for sinking the old bills of credit? Or for the mutinying of part of the army? Or for defeating the plan of the impost and supplementary funds? Or for the consequent commotions? Or did the assignees deceive the original holders? Did they act the part of sharpers and swindlers? If so, bring the culprits to justice; your country demands it. But if their only crine is good fortune in their negotiations, if they have purchased the securities in open market, and honestly paid for them, treat them as good citizens, acquit them of fraud, and do them justice. Being among those original holders who have transferred part of their certificates, and not replaced them, I can feel for myself as well as for our brave soldiers, but am against discrimination. So much for the justice of the measure. Let us now consider the policy of it.

It is admitted on all sides, that the preservation of public faith is indispensable to the welfare of the Union, and in what does it consist? Public faith, as I conceive, consists in a punctual fulfilment of engagements and contracts on the part of Government. To preserve public faith, therefore, it is necessary that a nation should have adequate resources, the Government adequate powers, and those who administer it integrity and abilities. That our resources are equal to the payment of our debts, had not been denied; that Congress have not sufficient power, I presume none will assert.

Should inquiry be made, what calamity have we been under to reduce so low the price of our stocks? I answer, the calamity of a defective National Government, the effects of which were severely felt. In 1780, Congress called on the The preservation then, of public faith, will States to sink their respective proportions of the principally depend on their integrity and abiliold paper money: part complied, and part did ties. Their abilities may not be questioned, but not. The consequence was, that, in 1781, the their conduct, in this case, will be critically bubble burst, and almost ruined the public cre-examined, and tried by the standard of moralidit. Early in 1783, the army, from want of pay, ty. If it will stand the test, they will have the were nearly mutinying, and part of them soon confidence of the people: but if not, vain will be after did mutiny, and drove Congress from every attempt to establish public credit. For Philadelphia. Again, Congress, by the Con- this is nothing but the confidence of the people federation, were authorized to tax the States on in public faith, and the people will think that, a valuation of their respective property; but the whatever resources they may have, or power to States were unable to produce the documents change the form of Government, the defective required for forming that valuation, and refused principles of the rulers can only be corrected to adopt a new rule proposed by Congress, who by the sovereign of the universe. Is it good could therefore levy no tax. To evince an policy, then, to rest the public faith on an act honest disposition, and to support public credit of discrimination, which is intended to saddle as far as possible, Congress proposed the plan one class of citizens with a tax to repair the of impost, and supplementary funds. This was loss which another class has sustained by a accepted by some States, and violently opposed breach of contract on the part of the public? in others, which produced apprehension that a This will wear the appearance of committing considerable part of the Union wished to apply one fraud to cure another. The right of specuthe sponge to the public debt. These circum-lators to purchase certificates at the market stances, and the consequent commotions, so weakened Government, that we had no credit, public or private, at home or abroad. By these and other calamities, and the load of our debt, were the stocks reduced, the public opinion fixed their rates, and taking the risk, they were worth no more; but circumstances are now tered, and they are increased in value.

price is undoubted, and their conduct in making the purchases and payments is unexceptionable; but if there was a doubt of this in regard to some, would it be a sufficient ground for a discrimination?

Again: the whole expense of the war is supal-posed to be about 176,000,000 dollars, of which there is now due 80,000,000 dollars, exclusive Gentlemen, to support discrimination, have of 2,000,000 dollars supposed to be due to the charged assignees with fraud. Are the assignees third class of soldiers. Is it good policy, by chargeable for the defects of the Confederation? | funding the debt, to do every thing necessary

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for the support of public credit, except making ing the old debt, to sink it, and of beginning payment of 2,000,000 dollars, and then, at the anew, or of giving up the cause. Sad alternarisk of public credit, by an act of discrimina- tive! to violate the public faith or be enslaved! tion, to save the sum last mentioned, which is but They chose the former, but aimed to do all posone eighty-eighth part of the expense of the war? sible justice. Indeed they had one reason for But how are we to obtain loans in future? scaling bills of credit, which applies not to the Some gentlemen conceive the establishment of liquidated debt. The public did not receive our funds will always precede the loans. Can the value of the former, but did of the latter, any gentleman insure this? I conceive not. according to the nominal sums; and had each There is not a nation in Europe so happily cir-emission been scaled according to its value cumstanced; and if an unfunded debt should when issued, the public would probably have again be requisite, who will lend when your un- been better satisfied, but having reduced the funded securities cannot be transferred, be- old bills from forty to one, did Congress atcause you have established a precedent for dis- tempt to re-scale them when they sunk a thoucrimination? Is it not evident, then, the pro- sand for one? Or did they provide that original position is pregnant with ruinous consequences? holders, who passed Continental money for less If inquiry be made, what is to be done with than they received it, should be reimbursed by the suffering soldiers? I answer, pay them, the assignees? If not, the precedent is against if your funds are sufficient; if not, assure them discrimination. Indeed, if the precedent favoryou will do it as soon as funds can be provided. ed such a measure, it is admitted by the gentleIt has been suggested that they have relinquish-man who produced it to have been a violation ed to the public seven eighths of their proper- of faith, and is therefore a bad precedent, which ty; if they have, I think it unjust to accept it. can never sanctify a bad act, or alter the eterBut is this the fact? Would they not have re-nal rules of justice. Because, then, Congress, ceived the whole of their liquidated demands in a distressing war, without a form of Governin specie, had it been offered? There can be no ment, and at the end of their resources, violatreason to doubt of this. Some gentlemen say, ed their faith, can we, on a principle of policy, they wish to compound the matter between the in a profound peace, with a strong Government soldiers and their assignees, because we cannot and sufficient resources, be justified in taking a pay both. Would not a composition, on such measure which promises so little advantage, principles, be a declaration of national bank- and which may involve such dangerous conseruptcy? And shall the United States, with quences? If this measure is adopted, what is three million inhabitants, with the most flatter-to be done with those who have given Congress ing prospects arising from the increase of com- a dollar in public securities for an acre of land, merce, husbandry, and manufactures; with such such as you will now sell for one-fifth of a dolan extensive territory, and in the vigor of their lar in the same securities? Ought not Congress, youth, declare bankruptcy for a debt, includ- on their own principle, as the assignee of the ing the Federal, State, and Foreign loans, not purchaser, to reimburse four-fifths of this proexceeding 80,000,000 dollars, or £18,000,000 perty? But what security will a speculator in sterling; when Great Britain, with only eight land have, who may purchase of an original millions of inhabitants, can fund a debt of proprietor, that when the value of the land is £240,000,000 sterling? I hope not; and consent-enhanced, a similar discrimination will not be ing to such a measure, I would never own my-made? And who, thus circumstanced, wi self an American. purchase your lands?

Some gentlemen have referred us to the act With respect to the practicability of thus disof Congress for scaling the Continental curren-criminating, gentlemen in favor of the measure cy, to prove both the policy and justice of a dis- have not removed the objections of those who crimination. Let us examine the matter. Con- are against it, and have only said a provision gress, from the commencement of the war to Feb- must be made in certain cases, without explainruary 1781, were but a meeting of State Commis- ing. It has been said, if the latter will unite sioners, without any form of Government or with the former, the difficulties, although great, powers, except such as were contained in their hay be removed; but no effort can make a meadiscordant commissions. From April, 1775, to sure practicable which is impracticable. Such the end of 1779, they supported the war by arti- attempts tend to weaken Government, and to ficial credit. At that period they had issued bring the laws into contempt, as we have seen 200,000,000 of paper dollars, and borrowed in regulating acts. 35,000,000 of dollars on loan office certificates, Public opinion has been mentioned as an arwhich were afterwards reduced to 11,000,000 of gument in favor of the plan. I have the highest dollars; they had borrowed all they could in respect for public opinion, but have not argued Europe, and were reduced to the necessity of on this ground: First, because, in the present stopping emissions, and for depending on the case, we know not the public opinion; and, seStates for monthly supplies of 15,000,000 of de-condly, because conjecture is endless and usepreciated dollars, on domestic loans. In March, less. Indeed, in great national concerns, the 1780, the proposed taxes and loans failed; emis- public will generally form their opinions by the sions on the former plan were at an end, and proceedings of the Legislature, because the latCongress were reduced to the necessity of scal-ter have a more general view of matters, and

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[FEBRUARY 18, 1790.

the best means for forming a judgment. If, on session, as well as at the time of its formation the whole, then, the justice, policy, or practi- and ratification, he could never have supposed cability of the measure was only in question, that gentlemen would apply precedents from ought we to accept it? But when we are doubt-an omnipotent Parliament to a limited Governful of all, ought we not to reject the proposition? ment, as a rule of action. If there was an anMr. BLAND agreed in opinion with the gen-alogy in the two Governments, he had not distleman who had just taken his seat. He was covered it; but if he had discovered it at the apprehensive the idea of discrimination had al- proper time, he should have been as strenuous ready worked mischief. He then explained the in opposing the Constitution as he had been in fallacy and injustice of such a measure, which advocating that measure. He could not, under he thought had been clearly proved to the House, his idea of that instrument, refuse to admit, as and assigned, among other reasons, its imprac-a legislator, the rigid maxims of law and justicability, which, if there were ninety-nine rea- tice, as it regarded the property in dispute, sons for it, that in itself was sufficient to make which the gentleman had spoken so lightly of. him vote against the amendment. After these observations, he would admit so Holders will come to the Treasury and de-much of the precedent as applied, but no more. mand payment; there their claims must lie until The depreciation of pay allowed the late army proofs can be obtained. The same inconve- is not a case in point. Here there are three nience will arise respecting the interest. Sup-persons, one to be benefited at the expense of anpose a creditor, if the amendment should pass, other; there the soldier had justice done to him was obliged to look for proofs, where must heat the expense of the Government; but before seek them in the grave? beyond the sea? in the depreciation was allowed, Congress had deAsia? Suppose a creditor was unwilling to termined that their paper had fallen in value comply with this law, you must then pass an- as forty for one; but before the case can be other law to compel him to deposit his security. parallel, Congress must determine that the The question had not been answered to his certificates are depreciated forty for one; but satisfaction, and he should not have risen, were this would be less unjust, if all the public it not on account of the point of discrimination, creditors were equally affected; by the grato which he had always entertained an aver-dual reduction of the nominal value, the desion, as involving the loss of the most valuable preciation of the Continental money operatand inestimable jewel, public credit. ed equally. But Congress were governed, If we commit this breach of public faith, it on that memorable occasion, by another prinwould be little better than the tender-laws of ciple than is now contended for; it was poRhode Island. No doubt some of the specula-licy which dictated the allowance to the army tors had deserved punishment, but others are of their depreciation, not general and equal jusinnocent. He observed that he was no specu-tice; if general justice had been attended to, lator, but he held original securities, therefore the decision could not affect him. There is hardly a State in the Union that wishes for any discrimination. If the State accounts are to be all reckoned, what a day of reckoning would that be, to travel back and issue fresh notes; it would be two final settlements. In short, there appeared so much intricacy and difficulty, that it was utterly impossible and impracticable in his opinion.

those who left the army, as well as those who continued in service, ought to have had the depreciation of their pay allowed them; but they have never yet been allowed the depreciation. This demonstrates the principle which governed at that time to be policy; they feared without this measure was put in execution, that the army would disband, and they would never be able to collect or keep another together. The Government having, at its own expense, on that occasion, done partial justice, is a precedent for doing what? For doing partial justice to one set of men at the expense of another set; speaking the authoritative language of despotism, and trampling the sacred rights of property under foot.

Mr. LAWRENCE said, it appeared to him that the gentleman from Virginia (Mr. MADISON) had taken much pains with the subject, from the accurate manner in which he treated it. On this occasion he had been a listener often, a speaker seldom, and, of consequence, had weighed it with peculiar attention; but, never- The next precedent adduced is that of the Catheless, it appeared to him that the gentleman nada bills. If my memory serve me, those bills had erred in principle. This had been suffi- were paid by the French army to individuals in ciently demonstrated by those who had gone Canada; afterwards they were purchased by the before him; he therefore would not notice any English merchants; but were they, in consething on that point. But, as the honorable gen-quence, a claim upon the English Government? tleman had put the propriety of the business No. They were a claim upon the French Governon precedent, he would notice only those pre- ment. The individuals never could contemcedents; when the cause is committed to pre-plate that it would be proper to involve the cedent for support, great care should be used to adduce such only as are applicable.

He confessed, after the Constitution under which they deliberated had gone through such a full investigation as it had done in the last

nation in a war for compelling the payment of those bills; therefore, it was their wish and agreement at the treaty of peace, to accept of what they could get; but this was no violent interference on the part of Government to take