FEBRUARY 18, 1790.] Public Credit. [H. of R. from one class of its subjects, in order to give ation; I will therefore repeat it, in order that to another class, or put into its own coffers. it may be corrected. I did not say that the With respect to the act of 1713, in the reign State of New York compelled the British merof Queen Anne, it is to be observed, that it af- chants to receive their debts, due them from fects the private or unauthorized debts of the the citizens of this State, in certificates; but Crown. In the reign of King Charles II. spe- that, by the laws of the State, the individuals cial provision was declared for the support of who remained within the lines were to receive the Crown; if this specific revenue was exceed of the individuals without the lines certificates ed, as was the case in the time of Anne, due at par; and that consequently such as remained bills were given for the debts contracted, due in the hands of those to whom payments of this bills not issued on the authority of Parliament; kind were made, were entitled, on every prinand which sold, perhaps, from this circum- ciple of justice, to the total of their nominal stance, at a very great discount. It was sup-amount. I shall make but one other observation. posed that the nation was under no necessity to It has been frequently said, during the course discharge them, because with them there was of debate, that the adoption of the proposition no contract; but is it pretended in the present for a composition between the two classes of case that we are at liberty to refuse the pay-public creditors will be no more a violation of ment of our certificates? Is there no contract the Constitution than the adoption of the prinexisting between the Government and indivi- ciples of the report; that a reduction of the duals? So far as this act is in point, it proves principal is nothing worse than a reduction of that the British Parliament interfered in alter- the interest. But here is a material difference ing private contracts, not public; the contracts in the proposed measure; the Government, by between individuals, not between the public the exercise of a despotic power, tears away and individuals. The interference of the same the property of the individual; while, in the Parliament, in the contracts between the South other case, the whole property remains, and noSea Company and individuals, proves equally thing but a modification of its form takes place; as much; but neither of them proves that Great nor this without the consent of the creditor. Britain undertook to do what is now proposed Whatever objections may be taken against this for us to attempt; but if they did, I hope an part of the report, it will no doubt be fully conunjust or questionable measure is not to be sidered when the alterations come under conadopted merely because it was carried into ex-sideration, and I trust fully and satisfactorily ecution in a foreign nation. answered. The honorable gentleman, after having ad- Mr. AMES.-Placing the proposition on the duced these cases, asks if they affected the pub-ground of precedent appears to be an abandonlic credit of that nation? I answer no; and the ment of the principle of right: and the only reason is evident: they were not attempts to principle upon which it can be contended will violate the public engagements, or to injure the be that of expediency; yet nothing can have creditors of the nation. been more conclusively shown than has been the inexpediency of the proposed measure. If it is contended that the violation of rights by other Governments authorize us to pursue similar measures, and the application of precedents shows that this is the object, gentlemen need not to have travelled across the Atlantic in search of an example. They might have found instances of violated rights nearer home, they need not have gone further than particular States on these shores, and they would have discovered a warrant for any infraction of individual right. If then the business rests on the precedents which have been adduced, it will be proper to examine them. When the Parliament of England interfered in the South Sea scheme, it was not with a view of destroying rights, but in favor of them, and for their protection. The paper money of the late Congress, if I understand the transaction, is not at all in point. The Government paid the soldier in depreciated paper, and afterwards allowed and paid him the deficiency; nor did the person to whom that paper was paid away, ever suppose he had a claim to the after grants of the Government. The case of the Canada bills resolves itself into a transaction between nation and nation, therefore does not apply. It may possibly be contended, that there is no contract on the part of Government to pay these debts; but that idea will be dissipated the moment we read the words of the Constitution, "all debts contracted and engagements entered into before the adoption of this Constitution, shall be as valid under this Constitution as under this confederation;" the words "as valid" make the Constitution as clear as words can make it; but one of the great causes which brought about the last Revolution was a desire which pervaded the community of securing the performance of contracts; the too frequent interference of Government in this respect had been felt and acknowledged by all. Can we then suppose that the public opinion is to be gratified by a measure founded on principles which are rejected and despised? No; if we mean to give satisfaction, it must be by acting on the principles of national obligation, justice, and good faith; I believe we shall violate the whole of these if we adopt the proposition. I do not put my opposition upon the impracticability, but on the right: I think it treason against the Constitution to break through the restraints and obligations it imposes; we cannot on any consideration violate our engagements. I suspect I was misunderstood in one observ The case of the due bills, in the reign f House. [FEBRUARY 19, 1790. PUBLIC CREDIT. The House again went into a committee on the report of the Secretary of the Treasury, Mr. BALDWIN in the chair. Queen Anne, I can hardly conceive applicable to which they desire the concurrence of the to the present time; but, as was observed by the gentleman who preceded me, these due bills were issued for debts due on the civil list; not by the sanction of Government, nor were they made transferable by an express act of the Legislature. The measure too was carried at the close of the session of Parliament with expedition, and probably without debate; but it is a rule that a measure agreed upon without debate, shall not be drawn into precedent; heace, if the case was in point, which is strongly denied, it ought not to serve as a precedent to guide our decision, Gentlemen have told us that it never was contemplated either by the purchaser or seller that the right to the real sum mentioned in the certificate was obtained and conveyed; but how does this doctrine comport with the many and solemn declarations of Congress finally to pay with honor and punctuality the utmost farthing? If this be popular opinion, let popular opinion choose its own instruments to effect it; for my part, I will never have an agency in effecting business which my principles-principles acquired by education and practice, and which, I believe, comport with those of my constituents -ever are averse to. It is not on account of its impracticability that I oppose the scheme; it is because I conceive it to be unjust and dishonorable. I will only add, that the observations I made on this point, when I was up before, were not intended to convey any personal reflections; no man can respect more the honorable mover than I do; it is the measure, and not the man, that I oppose. I am well convinced, from the experience of that gentleman's candor, and his reputed integrity, that he is actuated by the purest motives, though I think him to be engaged in a bad cause. Mr. MADISON hoped the committee did not conceive, with the two gentlemen that had re plied to him, that he meant by adducing precedents to abandon the ground of right. The committee will recollect that the gentlemen in opposition were repeatedly calling for precedents, and defied us to produce them, especially from Great Britain, which nation was held up to us as a model. They told us, that such an interference on the part of the Government of England would have annihilated that credit for which she is so respectable. Under these circumstances, the committee will think there was a necessity imposed on us to adduce precedent; and not that we did it to rest our argument on it alone, but as a collateral support, to show we had been challenged. The committee rose, and the House adjourned. TUESDAY, February 19. Mr. MADISON's proposition still under consideration. Mr. LivermorE said, he was against any discrimination between the soldier and other public creditor who held a public security, made payable to bearer, and consequently transferable, with intent that they might be sold. if convenience or necessity should require it. This had been understood by all parties, as well in America as in foreign countries, and they had been sold accordingly. The advocates for discrimination have not denied this; they have only alleged that the low rate at which the poor soldier or other public creditor had sold his securities was a sufficient reason for Congress to interfere and set aside the sale. In opposition to this, he observed, that persons had a right to buy and sell at such prices as they could mutually agree upon, provided there was no fraud. A diamond, a horse, or a lot of ground might be sold too cheap or too dear, and so might any other property; but Government could not interfere without destroying the general system of law and justice. Esau had sold his birthright for a mess of pottage, and heaven and earth had confirmed the sale. The distresses of the army, both officers and soldiers, at the time they received and sold their securities, had been painted in too strong colors. They were not so emaciated by sickness and famine as had been represented. They were crowned with victory, and received with applause by their fellow-citizens; and although they had been paid in paper, their loss had been made up by large bounties and in other emoluments; so that, in point of property, they were equal to their fellow-citizens, who had borne the burthen of taxes under which many are laboring to this day. Let them be called brave soldiers, patriotic soldiers, but not poor soldiers. They ought to be governed by the same system of justice that governs others; but their contracts ought not to be set aside out of partiality to them. The case quoted from the statute of Queen Anne is not applicable to this case, inasmuch as Government had not originally made the debentures therein mentioned transferable. Neither did the case of the Canada bills apply; for, as he understood, those bills were paid to British merchants and to others who had purchased them. He concluded by saying, that he would vote against the amendment, because no sufficient reason had been assigned that could operate on his mind against the general system of right. A message from the Senate informed the House, that the Senate have passed the bill pro- Mr. BURKE said, that on Friday last he had viding for the enumeration of the inhabitants of laid before the House a motion for making a the United States, with several amendments, I discrimination between original holders and FEBRUARY 19, 1790.] Public Credit. assignees of public securities, and for establishing a scale of depreciation for those securities. This motion he afterwards thought proper to withdraw, as, on further consideration, he deemed it altogether impracticable, and because he was not convinced that such a measure was honest and consistent with public faith. He did not therefore think himself at liberty to give it his support. As to the question before the committee, he could consider it in no other view than as a question, whether we shall commit a breach of public faith with the domestic creditors of the United States, and violate those solemn promises so often repeated in appeals and proclamations to the people by the late Government, and a promise or engagement which has been reiterated by the new Constitution? In his opinion, it required no profound skill in politics or finance to answer this question: it is only consulting the dictates of common faith and common honesty, which command nations as well as individuals to fulfil their engagements. The United States have repeatedly pledged themselves in terms as plain as language can express, to pay to the bearers a specific sum; and to commit a violation of this promise appeared to him both unjust and impolitic. If the United States are able to perform it, they ought to do so. He believed and hoped that they had the ability; and even in the case of inability, he was of opinion, should bankruptcy itseif ensue from the honorable attempt to do justice, this would be preferable to a stain cast upon these States at the commencement of their political career by a cool and deliberate act of public injustice to their creditors. America has established in the world a high military character. Let her but fulfil her engagements, and she will also establish a national character of honor and fair dealing. This will be to her as a real and substantial treasure, which she will be able to transmit, like a fair inheritance, to her children. Should we, on the other hand, pollute her by suffering her to commit a breach of honor, it will be such a public calamity as no money can compensate. [H. OF R. Virginia, and other States gave similar bounties, he believed, without mentioning the lands appropriated for them by the United States. He would not say that the soldiers have been rewarded; for what reward can be adequate to their great services? But he insisted that the people of America had not been unmindful of those services. If we for a moment consider the conduct of the people towards one part of the army, (the officers,) we shall find that America has signally displayed her gratitude towards them, from the commander-in-chief down to the ensign. The illustrious leader of our armies, retiring from the field to private life, she again raised to the elevated station of a sovereign Prince! Through what motives? From gratitude for his splendid services. View the high departments of the General Government; look into the several offices; enter the several custom-houses from the northern to the southern extremity of the continent; there we shall find conspicuous instances of gratitude. Let us now see how the people regard the officers of the army in the different States. In South Carolina, no other class of citizens stand any chance in competition with officers; they are promoted to the stations of Governor, Lieutenant-Governor, and Privy Councillors; they are to be found presiding in the tribunals of Justice, in the Legislatures, and on the floor of Congress; and the gratitude of the people follows them in the private walks and ordinary occupations of life. They are justly held in love and veneration; and if the future historian of America records the truth, and nothing but the truth, he must raise lasting monuments, both of the illustrious services of the officers of the army, and of the gratitude and love of the people for those services. This he mentioned in answer, or rather in defence of the people, and to clear them from the charge of ingratitude. It is urged in favor of discrimination that a few speculators will make princely fortunes. This, he said, was a circumstance which he sincerely regretted; as he did likewise regret the speculations now carrying on from this city and other places, in the State of South CaroliHe wished to offer a few observations in an-na-the sending pilot-boats secretly from New swer to those gentlemen who were so urgent York to Charleston, while the people there in favor of the motion. They had advanced were asleep, as it were, and totally unacquaintthat the officers and soldiers have not beened with the councils or views of the adminisfully paid. The gentleman from Virginia (Mr. MADISON) has said that without the discrimination which he offers, we shall be raising monuments of gratitude, not to our officers and soldiers who fought for us, but to those who speculated on our securities. On this, he would remark, that it is to be lamented, when our ariny was disbanded, the derangement of our He foresaw, however, a still greater misforaffairs put it out of our power to pay them in tune in this business, than that of a few specu. specie. The States, however, did every thing lators aggrandizing themselves by our funding in their power to provide for their soldiers. system: It is, that our public securities will go The State of South Carolina gave them boun-into the hands of foreigners. The present systies in lands, and the warrants and grants for these lands were passed through different offices without the usual fees. North Carolina, tration, with information on the one side only; this he thought a hard case. But the speculators, availing themselves of this and a variety of other advantages, could not justify him, in his own mind, in giving a vote that would give a stab to the good faith and credit of a nation in whose councils he had the honor of a suffrage. tem, offered by the Secretary, is actually mortgaging these States to foreign speculators, for theamount of the debt; for the holders will sell, as they have already sold, immense sums to foreigners to raise ready money. Few of our citizens will become purchasers, as ready money will yield far greater emolument, employed in commerce or agriculture, than when lodged in the funds. This is a calamity which he lamented from his soul; but, upon a most serious consideration upon the subject, he was not clear but that a forfeiture of public faith, a loss of public credit, would be for America a far greater calamity. He entertained strong apprehensions, that parting with the fair inheritance of public faith and public honor, under any pretext, would be acting the part of him who sold his inheritance for a mess of pottage. Viewing the subject in this light, he could not, he dare not vote in favor of the motion. [FEBRUARY 22, 1790. ask, whether, if the United States had thus He also mentioned another ground whereon he opposed it: The scheme of a discrimination appeared totally impracticable. Commissioners must be appointed, not only in different States, but in different places of the same State. If Commissioners are appointed, for instance, in Charleston, the citizens must attend from the remotest parts of the State, and be worried in travelling backwards and forwards to seek for witnesses, many of whom may be dead, or re-mounted. moved into other countries-not to mention the length of time and enormous expense which so complicated a business must occasion. He concluded, by declaring it to be his opinion, that the proposition, if agreed to, would throw things into confusion and perplexity, which he could not see the extent of: he should, there-surances from the ministers of the United fore, oppose it. Mr. MADISON.-If paper, or the honor of statues or medals, can discharge the debts of justice, payable in gold and silver, we cannot only exonerate ourselves from those due to the original holders, but from those of the assignees; so far as paper goes the latter have received the compensation. If honor can discharge the debt, they have received civil honors; look round to the officers of every Government in the Union, and you find them sharing equal honors with those bestowed on the original creditors. But, sir, the debt due in gold and silver is not payable either in honor, appointments, or in paper. Mr. WHITE wished to ascertain a fact which had been mentioned. He did not mean to infer that gentlemen had related a fact they did not believe; but supposed they might have been misinformed. He asked, whether foreigners had been induced to purchase in our funds by as States, residing at Foreign Courts, that no variation would be made in the domestic debt. Mr. BLAND asked his colleague, (Mr. MADISON,) how long he supposed the settlement which he contemplated would take in its completion? For his part he supposed two or three generations might pass away before that object could be accomplished, considering the dispersed situation of the claimants through America, Europe, Asia, and Africa. Mr. MADISON said, the claims of individuals were presented and liquidated by the Commissioners throughout the United States in nine months; that was the period fixed for that purpose by Congress; he would not say but it was too short, yet he thought this experiment fairly inferred that the ascertainment he contended for could be effected in a short time. Mr. BOUDINOT had seen an authentic letter, in which the writer mentioned that the opinion of Mr. JEFFERSON was asked, and obtained. He also had reason to believe the sentiments of the President of the late Congress was given to the same effect. Gentlemen say it will work injustice; but are we not as much bound to repair the injustice done by the United States? Yet I do not believe the assertion has been established by any thing that has been urged in its support. The gentleman from Maryland, [Mr. STONE] acknowledges, that there is a moral obligation to compensate the original holders; how will they get what he admits is their due? He is willing to make an effort by applying the resources of the country to that purpose; but if we are to judge by the sentiments of other gentlemen who have spoken on this occasion, we have little to expect from that quarter. Suppose the debt had depreciated to a mere tri- The House proceeded to consider the amendfle, and suppose the sale of the Western Ter-ments of the Senate to the bill providing for ritory had extinguished the certificates, let me the enumeration of the inhabitants of the United The committee now rose, and the House adjourned. MONDAY, FEBRUary 22. FEBRUARY 22, 1790.] Public Credit. States, and agreeing to a part and disagreeing to other parts; a message was sent to the Senate informing them thereof. PUBLIC CREDIT. The House then resolved itself into a Committee on the Report of the Secretary of the Treasury, Mr. BALDWIN in the chair. [H. OF R. the purchase with six per cent. interest in three years. Mr. MADISON'S proposition still under consi-it. deration. pound, to advance to the poor soldier. If certificates are the evidence of the debt, it proves, sir, that the balance is due to him in whose name it issued. This is the day of payment, and we must pay accordingly; and here permit me to remark, in reply to the observation of the gen. tleman from New Hampshire, (Mr. LIVERMORE) that Jacob was punished for his fraud, but for his faith enjoyed the promise; even so let us regard those who had so much confidence in us, as to advance two shillings and six pence to the distressed soldier. In what does the case differ between the depreciated paper and the certificates? Paper money was redeemed at forty for one, as well to the last as the first holder; the same principle would lead to give the last holder of the certificate the depreciated value at which he bought But we propose to work no injustice, we give the first holder, if he is the holder still, the Mr. PAGE.-As the worthy and eloquent full value stipulated. It would not be injusmember who replied to me did not answer the tice to consider the assignee, as having paid questions I put to the committee, I suppose he what he advanced, in consequence of his confieither did not hear them, did not understand me, dence in Government, on account of that Goor could not answer them. I hope, before the vernment; and that the Government ought to committee decide, they will attempt at least to repay him what he so advanced; having repaid resolve them. I asked, where is the injustice that sum, the balance ought to go to the credit of the States complying with its engagements of the assignee. I am willing, on this considemade to the first holders of certificates, as far ration, to call the speculator the friend and supas the case admits? Where is the justice of porter of the Government, who kindly lent us, doing more for the assignee than he or his as-when in need,two shillings and six pence in every signor expected could or would be done? Where is the breach of faith in Government, if it paid its whole debt with justice blended with mercy? Where is the interference in contracts, when the proposition is to comply sacredly, as far as the case will admit, with the contracts between a State and its creditors? I asked, is not the assignment of certificates confirmed by the motion? Does it not give to the assignee the very thing stipulated to be given, that is, whatever sum Government shall be pleased to pay for the certificates, for that was the condition of the assignment? And is not the sum now proposed more than either the first or last holder, till within these few days, supposed would be paid him? I asked also, ought not an honest assignee to be pleased that Government intends to do that justice to his assignor which he ought to do himself, were the whole payment made to him? I asked, of what is the assignee deprived but of his late sanguine expectation? I asked whether the proposition before us does not rather establish confidence in Government than the contrary? For, sir, to make use of the comparison which has been often made here between the State and an obligor on a bond, what could give more credit to any man's bonds than to find that, though they had depreciated to half a crown in the pound, he paid the whole twenty shillings; ten shillings to the assignee, who had given but two shillings and sixpence, and ten to the obligee who had sold at so great a loss? It is true Congress may, consistently with the rules of common law courts, pay the bearer and take no notice of the creditors; but were a Court of Equity instituted to decide on the case of certain speculators, how would they decide? Government, in the most solemn manner, pledged itself to make compensation to the soldiers, have they done it? Instead of doing this, certain persons, who took advantage of their ignorance and their poverty, bought up the evidence of their debt at one-eighth of their nominal value; and in some States these very men had drawn what constituted the principal of Mr. HEISTER was in hopes this question would be postponed for the present, in order to go into a consideration of the ways and means; when, if it appeared that the United States were incapable of making full provision, it might be considered, whether one deviation would not authorise the other? If any gentleman would make a motion to that effect, he would second him. The question was now taken on Mr. MADISON's proposition for a composition, and it passed in the negative; yeas 13, nays 36. Mr. WHITE observed, that the second resolution proposed by the gentleman from Pennsylvania (Mr. FITZSIMONS) was now before the committee; he would wish to modify it, by declaring that permanent funds ought to be provided, instead of appropriated; because the latter seemed to imply that Congress were already possessed of the funds, which he believed. was not the case; he also wished to extend the resolution, so as to embrace the civil and military establishments of the United States, leaving the surplus to be employed in just proportion to discharge the interest of the domestic debt. The plan of the Secretary seemed to contemplate the payment of four per cent. and gave a preference to those who subscribed to his new loan; by this means, the original holder who had retained his certificate, and who thought his claim more meritorious than the others, and who, in consequence, could neither afford, nor would be willing to accept of either |