FIRST CONGRESS.—SECOND SESSION. (continued 2)

But why, Mr. Chairman, should we hasten on this business of funding? Are our debts ascertained? The report of the Secretary of the Treasury proposes that we should not only fund the debts that are ascertained, but the unliquidated and unsettled debts due from the Continent; nor does the plan stop here, it proposes that we should assume the payment of the State debts—debts to us totally unknown. Many of the States, sir, have not yet ascertained what they owe; and if we do not know the amount of what we owe, or are to be indebted, shall we establish funds? Shall we put our hands into the pockets of our constituents, and appropriate moneys for uses we are undetermined of? But more especially shall we do this, when, in doing it, it is indisputably certain, that the encumbrance will more than exceed all the benefits and conveniences? Gentlemen may come forward, perhaps, and tell me, that funding the public debt will increase the circulating medium of the country, by means of its transferable quality; but this is denied by the best informed men. The funding of the debt will occasion enormous taxes for the payment of the interest. These taxes will bear heavily both on agriculture and commerce. It will be charging the active and industrious citizen, who pays his share of the taxes, to pay the indolent and idle creditor who receives them, to be spent and wasted in the course of the year, without any hope of a future reproduction; for the new capital which they acquire must have existed in the country before, and must have been employed, as all capitals are, in maintaining productive labor. Thus the honest, hard-working part of the community will promote the ease and luxury of men of wealth; such a system may benefit large cities, like Philadelphia and New York, but the remote parts of the continent will not feel the invigorating warmth of the American treasury; in the proportion that it benefits one, it will depress another.

Mr. Smith, (of South Carolina.)—The report of the Secretary of the Treasury contains a proposition for the establishment of a sinking fund. I wish the gentleman who brought forward the resolutions under consideration, had included that part of the system in his propositions, as it might have had a tendency to ease the mind of the honorable gentleman from Georgia, and to have shown him that the public debt is not intended to acquire the permanency which he dreads. If our present debt cannot be paid off at once, all that can be done is to provide such funds for its gradual extinction as will morally ensure the object.

The gentleman has contended, that public funding is a public injury. I agree with him that funding a debt to a very great amount may be very injurious; yet funding a small debt is beneficial. But whether this is, or is not a fact, is not the object of our present inquiry; we are not in a situation to determine whether we will or will not have a public debt. We have it already, and it appears to me to be a matter of necessity that we should appropriate some funds for the payment of the interest upon it. When we consider the nature of the contract, for what it is we owe the money, and our ability to comply, it follows, of consequence, that we must pay; it follows as close as the shadow follows its substance; or as close as the night follows the day. The only question that can come before us is, the mode of doing it.

With respect to that part of our debt which is yet unascertained, I would just beg leave to observe, that it is not our fault that it remains in an unsettled state; neither is it the fault of those who have brought in their accounts and had them liquidated. Hence, it appears to me extremely hard that we should refuse to provide for the payment of those to whom we acknowledge ourselves to be indebted, because there are others whose claims against us are not yet adjusted. The argument, therefore, which relates to this point, as well as that which relates to the Western Territory, will apply ten years hence as well as now, and form an eternal pretext for deferring the business.

Mr. Fitzsimons said, that the circumstances of the foreign debt were such as left no choice in our power, according to the plan proposed by the Secretary of the Treasury; but we have it in our power, and are recommended to make a different arrangement with respect to the domestic debt. I stated, when I introduced the resolutions, that they were intended to bring the Secretary's plan fairly before the committee. This resolution is differently worded on that account; but it may be observed, that the foreign creditors are not here to make a contract with the people of the United States, but the domestic creditors are; and we may hold out a modification to them for their acceptance. With respect to the means by which we shall be enabled to pay the interest and principal of our debt, this resolution has nothing to do, it leaves it to the consideration of the committee; and every gentleman will be perfectly at liberty to propose and support such as he supposes to be most suitable to our abilities.

Mr. Livermore.—I do not clearly understand the import of the resolution before the committee. It seems worded rather in a doubtful manner. If it means, that funds ought to be appropriated for the payment of the interest and principal of the domestic debt, as the amount appears on the face of the certificates, I shall be totally against it; whether it pointedly carries that meaning or not, I cannot say.

For my part, I consider the foreign and domestic debt to carry with them very material distinctions. The one is not like a debt, while the other has all the true qualities of one. However gentlemen may think on this subject, there is a great difference between the merits of that debt which was lent the United States in real coin, by disinterested persons, not concerned or benefited by the revolution, and at a low rate of interest, and those debts which have been accumulating upon the United States, at the rate of six per cent. interest, and which were not incurred for efficient money lent, but for depreciated paper, or services done at exorbitant rates, or for goods or provisions supplied at more than their real worth, by those who received all the benefits arising from our change of condition. It is within the knowledge of every gentleman, that a very considerable part of our domestic loan-office debt arose in this manner. It is well known that loan-office certificates were issued as a kind of circulating medium, when the United States were in such straits for cash, that they could not raise the necessary supplies in any other way. And it is very well known, that those who sold goods or provisions for this circulating medium, raised their prices from six to ten shillings at least.

There is another observation I would beg leave to make. The prices at which our supplies were procured were such, even in hard money, that it might be said specie had depreciated, or, what amounted to the same thing, the commodities were sold for more than their current price; in many cases, half the price would now purchase the same thing. If so, there is as much reason that we should now consider these public securities in a depreciated state, as every holder of them has considered them from that time to this. There was a period at which they were considered of no greater value than three or four shillings in the pound; at this day they are not at more than eight or ten. If this, then, is the case, why should Congress put it upon the same footing as the foreign debt, for which they received a hard dollar for every dollar they engaged to pay? Could any possible wrong be done to those who hold the domestic debt, by estimating it at its current value? I do not speak of those only who have speculated in certificates. With respect to them, I do not see how a difference can be made. By the resolutions of Congress, and from the face of the papers, it appears that they were transferable.

It may be said, that there was some part of the domestic debt incurred by loans of hard money. There might be a small part lent in this way, but it was very small indeed, compared with the whole of the domestic debt. It is in the memory of every gentleman, that, before the beginning of the revolution, every State issued paper-money; it answered the exigencies of Government in a considerable degree. The United States issued a currency of the same nature, which answered their purposes, except in some particular cases, and these were effected by loans of certain sums of hard money. If any distinctions are to be made among the domestic creditors, they ought to be made in favor of such only, and that in consequence of the origin of the debt; while the great mass given for the depreciated paper, or provisions sold at double prices, ought to be liquidated at its real value. I cannot think it injustice to reduce the interests on those debts. I should therefore be against passing this resolution, if it carries in it the idea of paying the principal and interest, according to the face of the paper. It is well known, that a large proportion of this domestic debt was incurred for paper-money lent. To be sure Congress acknowledged its value equal to its name; but this was done on a principle of policy, in order to prevent the rapid depreciation which was taking place. But money lent in this depreciated and depreciating state, can hardly be said to be lent from a spirit of patriotism; it was a mere speculation in public securities. They hoped, by putting their money in the loan-office, though in a depreciated state, to receive hard money for it by and by. I flatter myself this prediction will never be effected.

The Secretary of the Treasury has offered some alternatives to the creditors, out of which they may make their election; but it seems to me that they, all of them, propose a reduction in the principal and interest, that they may have an annuity of two-thirds, at six per centum, or for the whole sum at four per centum, or they may accept of the other terms. Though this may make a reduction favorable to the public, yet this is not such a reduction as justice, in my opinion, requires; and as the resolution before the committee is intended to make way for the adoption of those principles, I shall vote against it, though I would rather it was passed over for the present, in order to see what is the sense of the House on making a specific provision for the payment of the debt.

Mr. Page was glad that the question had been asked the mover of the propositions on the table what was the object of the resolution now under consideration, because it was liable to be misunderstood. But now, he presumed, the answer had satisfied every gentleman's mind.

The gentleman from New Hampshire was pleased to observe, that foreigners were not interested in the late revolution; that what they did was from such motives as demanded our gratitude; but our citizens were deeply interested, and, I believe, if they were never to get a farthing for what is owing to them for their services, they would be well paid; they have gained what they aimed at; they have secured their liberties and their lives; they will be satisfied that this House has pledged itself to pay to foreigners the generous loans they advanced us in the day of distress. If we were to make distinctions adverse to their interests, we could never expect from them a further favor in the future exigencies of this country. But we may also look with confidence at home for loans and services; on such occasions they will be supplied us on the principles of patriotism; the adoption of the first resolution was therefore politic and just, but the motion of my worthy colleague is not necessary. I feel for my fellow-citizens who have gloriously exerted themselves in the salvation of their country by their services in the field, or the supplies which they yielded, as much as any man can do. I acknowledge the debt of gratitude the community owes to those select citizens, and am willing to pay it as far as we possibly can; but they cannot, they will not complain of the deference we have shown to others, whose particular situation merited such regard at our hands.

Mr. Scott.—I find myself obliged to consider the Government of the United States in a very different situation, with respect to our foreign and domestic creditors. With respect to the foreign debt, we, the representatives of the United States, are vested with full power, and we are bound in duty to provide for the punctual payment according to the nature of the contract; but when I turn my eyes to the domestic debt, I find myself in a very different situation. I conceive myself a mere arbiter among the individuals of which the Union is composed. A part of the people have a claim upon somebody. I think that claim is against the people at large, and we are not only to provide for the payment of that claim, if just, but to determine whether that claim is just or not. One part of the community applies to us to recover of the other what is due to it; the other says, the debt is too large, it is more than is justly due; you must try and determine between us, and say what part is just, and what is not. This brings clearly into my view the whole subject, as a thing within the power of Congress to new model or modify, if we find that justice demands it; but we have no such authority with respect to the foreign debt. It is very clear to me, that we have the power to administer justice and impartiality among the members of the Union; and this will lead me freely to assert, that we have not only authority, but it is our duty, if, on examination, we find that not more than half the sum that is claimed is justly claimed, to strike off the other half.

Mr. Boudinot.—I am glad to see gentlemen bring into view principles on which to determine the great question before us; because, when they are once established, they will enable us to proceed with certainty to a decision. If the principles brought forward by the honorable gentleman from Pennsylvania are just, his arguments are of great weight; but if, on consideration, we shall find that the principles are unjust, then I presume, however cogent the system of reasoning he has founded thereon, it will not prevail. He supposes we sit here as judges to determine the different claims of the creditors of the United States. If we are in that predicament, I agree we ought not to proceed but on full evidence and hearing of those claims. But I have never hitherto been led to consider Congress in this light, nor can I now consider them in any such point of view. I consider the Congress, who entered into these engagements, as complete representatives of the United States, and, in their political capacity, authorized, by the articles of Confederation, to contract the debts for which our public faith is pledged; instead of being judges, or arbitrators, on this occasion, we are parties to the contract; nor is our case varied, by the dissolution of the old Confederacy, because the existing constitution has expressly recognized the engagements made under the former. All debts contracted before the adoption of this constitution, shall be as valid against the United States, under this Government, as under the Confederation. Now is the moment to establish the principle; if the constitution admits the borrowing of money, or paying for supplies, to be a contract, we are one of the parties to this contract, and all idea of being arbiters must vanish. We cannot judge in our own cause. The case will now stand clear; we owe a debt, contracted for a valuable consideration. The evidences of our debt are in the hands of our creditors, and we are called upon to discharge them; if we have it in our power, we ought to consider ourselves bound to do it, on every principle of honor, of justice, and of policy; but as we have not the ability to pay the whole off, nor, perhaps, the whole interest, we must endeavor to make such a modification as will enable us to satisfy every one. Not that this modification shall take place without the consent of the creditors; this would be improper and unjust. Each party is as much to be consulted on this occasion, as it was at the time of the first contract. If, then, Congress is bound by the first contract, no gentleman can say we are judges. If we are parties, what would be the decision before a court of justice? The creditor produces my bond, by which I have bound myself to pay a hundred dollars; I cannot gainsay the fact; no man is allowed to plead that he has made a bad bargain, and that at other times, he could have purchased what he got of the creditor at half the sum he was forced to allow him. The inquiry with the judges is not, whether the debtor made a good bargain or not, but whether he did it fairly and voluntarily. We are in the same predicament if we fairly and honestly received the quid pro quo; we are bound, as parties to the honest performance of the contract, to discharge the debt; otherwise, what avails the clause in the constitution, declaring all debts contracted, and engagements entered into, before the adoption to be as valid against the present Government as they were under the old Confederation? The debt was bona fide contracted; it was acknowledged by the United States; and the creditor received a certificate as to the evidence of his debt. It is immaterial to us what he did with it. I confess, if the original holder was to come forward, and say that he had been robbed of such evidence, we ought not to pay it until the point was ascertained in a court of justice.

Some observations were made to point out a difference between the foreign and domestic debt. I admit there is a distinction, and that in another instance, which has not been mentioned. His Most Christian Majesty, when he first became our important ally, presented Congress with a large sum of money; but this being insufficient to procure us the necessary supply of military stores, a loan was made us from the royal coffers of France. But this also being inadequate, we endeavored to obtain further aid from foreigners. The credit of the United States was so much impaired, as to hold out but little encouragement to individuals to trust us with their money. The French King added another mark of his distinguished attention: he guarantied the loan, and the money was obtained—obtained of the widow and fatherless; of persons whose all depended upon a punctual payment of the interest. On this point I could refer you to letters from our commissioners in Europe, who beg that we may not put them on this business, unless we are certain that the United States will carefully provide for the payment of the interest; because, in case of failure, hundreds must perish for want. This is another motive why we should attend to the performance of our contracts; and I will repeat again, it is what we are called upon to do upon every principle of honor, justice, and policy.

Mr. Lawrence.—The observations of the honorable gentleman from Pennsylvania, (Mr. Scott,) if I rightly understand them, apply to the principal, and not the interest of the domestic debt. He imagines it to be too large; that is, that the individual who performed services, or rendered supplies during the late war, received evidences of rather too great nominal value; and that, at this period of time, it is necessary to investigate every particular claim, and judge whether the balances are respectively due or not. The gentleman has distinguished between the foreign and domestic creditor on this point; he supposes the foreign debt ought not to be re-examined, because the holders of it are unconnected with our Government. They lent us money, and we are bound according to the precise terms of the contract. Here I agree with him; but that there should be a solid distinction in justice between the foreign and domestic creditor is to me a singular thing. It was observed, that the citizens of America would be well paid for their loans, supplies, and services, by the benefits and profits arising to them by the revolution; but are we to sacrifice the claims of individuals of the community for the advantage of the whole? Who are benefited by the revolution? Every citizen. Then every citizen is bound to contribute his equal part of the expenses attending the procurement. Should those of our citizens who furnished the supplies, or loaned their money, be the only class who are injured? Every citizen is bound to pay according to his ability, because every one has participated in the benefits: then the only question to ask is, whether this discrimination should be made to ascertain or new proportion the debt? This will lead me to inquire whether it is proper for us, after the resolution we passed at the last session, after the resolution we have just now passed, to scale the public debt anew? Shall we say that the evidence carries on its face fraud and deception? I contend we shall not. Why shall we liquidate a debt which is established upon a complete and final settlement? From the face of the evidences arises the demand, and that is the demand we are to make provision for. Shall we go to our officers and soldiers who served during the late war, individually, and say that the balance struck to be due to them is an imposition on the public, when the Government itself has determined that they were entitled to such particular reward? If, at the time those securities were given to them, Government had paid them in money, would any gentleman now contend that their accounts ought to be reliquidated, and every individual called upon to refund a part of what he acquired in conformity to the laws of this country? Certainly no gentleman would contend for such a measure. How is the nature of the case altered from the circumstances of our having been so unfortunate as to pay those worthy men with a certificate in lieu of the money which was due? The nature of the case, I conceive, is perfectly the same; and we are in duty bound to make a full compensation. The face of the paper expresses what that is, and it is to be our guide; the demand surely is not to be lessened.

Mr. Jackson said there were, most surely, principles on which to ground a discrimination betwixt a foreign and domestic creditor; if there was no other, there was this, that the domestic creditors are those that are bound to pay the foreign creditors their demand; they ought, consequently, to do justice to others, by a punctual payment, before they require a discharge of their own claims.

Mr. Ames did not conceive it material to inquire whether there be an equal obligation on the people of the United States to pay their foreign and domestic creditors, when they meant to pay both; but if it is intended to reduce the principal of either, it will lead us into a discussion of the principles on which such a measure ought to be founded. The honorable gentleman from Pennsylvania (Mr. Scott) probably intends by the amendment to have a reduction of the debt; I have, said he, so much respect for the good sense and upright intentions of that honorable gentleman, that I will not impute to him unworthy motives; nor do I believe that he governs his conduct in private life by maxims which I suspect to be contained in the amendment now before us. I would not be understood, by any means, to convey an improper reflection upon the opinions of any one. The science of finance is new in America; a gentleman may therefore propose the worst of measures with the best intentions. What, let me inquire, will be the pernicious consequences resulting from the establishment of this doctrine? Will it not be subversive of every principle on which public contracts are founded? The evidences of the debt, possessed by the creditors of the United States, cannot, in reason, justice, or policy, be considered in any other light than as public bonds, for the redemption and payment of which the property and labor of the whole people are pledged. The only just idea is, that when the public contract a debt with an individual, that it becomes personified, and that with respect to this contract, the powers of Government shall never legislate. If this was not the case, it would destroy the effect it was intended to produce; no individual would be found willing to trust the Government, if he supposed the Government had the inclination and power, by virtue of a mere major vote, to set aside the terms of the engagement. If the public in such a case is, as I have said, personified, what conceivable difference is there, except in favor of the creditor, between the public and an individual in the case? If, then, the public contract is a solemn obligation upon us, we are bound to its true and faithful performance. What is the object for which men enter into society, but to secure their lives and property? What is the usual means of acquiring property between man and man? The best right to property is acquired by the consent of the last owner. If, then, an individual is possessed of property, in consequence of this right, how can Government, founded on this social compact, pretend to exercise the right of divesting a man of that object which induced him to combine himself with the society? every gentleman may determine this question by his own feelings. Shall it be said that this Government, evidently established for the purpose of securing property, that, in its first act, it divested its citizens of seventy millions of money, which is justly due to the individuals who have contracted with Government! I believe those gentlemen, who are apprehensive for the liberties and safety of their fellow-citizens, under the efficiency of the present constitution, will find real cause of alarm from the establishment of the present doctrine. I have heard, that in the East Indies the stock of the labor and property of the empire is the property of the prince; that it is held at his will and pleasure; but this is a slavish doctrine, which I hope we are not prepared to adopt here. But I will not go further into a consideration of the idea of discrimination. I will ask, though, is this country ever to be in a settled and quiet state? Must every transaction that took place, during the course of the last war, be ripped up? Shall we never have done with the settlement and liquidation of our accounts?

Mr. Livermore.—The arguments advanced by the gentlemen from Massachusetts and New York prove too much, and therefore prove nothing. That the late Congress had, at all times, from their first institution, the power to contract debts, for the benefit of the United States, cannot be denied; and that we are authorized to pay such debts, is equally certain. But this by no means contravenes the opinion of those gentlemen who think, that the whole may be properly considered and discharged at the rate which justice requires; for the same argument which is urged for the payment of the public securities at their nominal value, might be urged in favor of paying off the Continental debts of credit, according to the sums expressed on the face of them. They were issued with as much confidence, and were received with as much reliance on the public faith, as any species of securities whatever; yet, it seems to be given up on all hands, that the owners of the old Continental paper bills ought not to be paid according to their nominal value. Perhaps it may be said, on comparing them with the loan-office certificates, that the United States had not the benefit of that money; but had they not the value of it? It will be answered, that when the money was first issued, Congress had nearly the value for it; but afterwards the money greatly depreciated, and they had not the full value for it, yet the obligation to pay it is as explicit as words can make it. No advocate will be found for making all that money good. It has been thought proper, and it is just, that it should be reduced from its nominal value; if it is reduced on a scale of one hundred for one, the holders of it, I dare say, would cheerfully receive that sum. If the United States then had value for it, and if they had not value for the certificates, who can doubt of the justice of reliquidating, and duly ascertaining the public debt? All I contend for is this, that the present Government pay the debts of the United States; but as the domestic part of the debt has been contracted in depreciated notes, that less interest should be paid upon it than six per cent. Six per cent. was the usual interest upon the certificates when they were issued by Congress; but if the possessor has received no part of this six per cent. until this time, that now the principal and interest be consolidated into one sum, hereafter to bear an interest of three or four per cent.; then those citizens, who now stand as creditors of the Union, will find that part of their property has been the most productive of any, much more productive than the property of the citizens of the United States has generally been. Those who lent their money to individuals before and during the late war, generally lost or suffered by the depreciation some three-quarters of the capital; nay, some thirty-nine fortieths. But is this the case of the domestic creditor of the United States? No! he will preserve his property, through the chaos of the revolution, and be put now in a more eligible situation than he was at the time when he loaned the money. The capital sum which he lent is now increased, and very rapidly increased, for six per cent. is a very large interest. He will now receive 160 dollars for his 100, and putting that into the funds, at three or four per cent. he will find it more productive than any other method in which he could employ his money; for, I contend, that neither improved, nor unimproved lands, will give an interest near half of what the public creditor will receive. People who have held real property have sunk, with the taxes, and other losses, the greatest part of it; but the public creditor has let his run through the confusion of the revolution, and nevertheless gets it returned to him safe; and, so far from being impaired, that he has prodigiously accumulated, not only in a manner superior to the property of his fellow-citizens, but superior to the foreigner who lent his money at four per cent. Justice and equity require, on the behalf of the community, that these people be content with reasonable profit. They ought not, therefore, to receive, on a funded debt, so much as six per cent.; whether three or four, or something between three and four, would be a proper sum, I shall not pretend to determine. But I consider it a proper question for this committee to consider, in justice to those who are to pay, as well as to those who are to receive; nor do I believe the domestic creditors would be dissatisfied with it, provided they were sure of receiving this annual interest; for their debts, on such a footing, would be better to them than if they were established on an extravagant plan that could never be effected, but which would be likely to throw the nation into confusion. Every body has suffered more or less by the depreciation, but the public creditors very little, in regard to that part of their property which they had deposited in the hands of Government: it is true, that it has slept; but it is now waked up to some purpose.

Mr. Scott.—A great deal has been said on a great principle that must be attended to in some stage of this business; but gentlemen have been led into a more extensive discussion on the doctrine of discrimination than I had any idea of when I proposed the amendment. It has been urged by some of the gentlemen, that however just my principle is, that the Legislature is in the quality of an arbitrator, yet we cannot adopt the amendment; others again have said, that the debt is a contract between the Government and the individual, and that we being parties we cannot be judges; for it is contrary to the principles of the law, that we should be judges in our own cause. If, in national transactions like this, interesting to our citizens only, the Government is to be supposed one party, and the individual the other party, I would ask the gentleman who is the judge? Can two parties exist in a well organized Government to dispute about property, and have no judge? The very idea must induce the gentleman to abandon his ground. It has been said, as the foundation of an opinion, that there is a great similitude between a certificate and a bond that is brought into court to demand payment upon; that no opposition can be made; that no plea can be entered; but I would wish to ask the gentleman who made the remark, as a professional man, whether the want of consideration would not be a good plea? In Courts of Equity, relief can be given against prima facie evidence.

Mr. Boudinot.—I am a friend to the discussion of every principle on which the great business before us may be supposed to turn, because I have a great desire that they should be settled on full information, that the public, as well as ourselves, may be satisfied with their propriety. This leads me again to notice the arguments which have been urged in favor of considering this body as judges or arbitrators between the public and the individuals who have claims upon the public.

It must appear to the satisfaction of every unprejudiced mind, from the resolutions of the late Congress, that they acknowledge themselves a party on behalf of the public, to every engagement they entered into for services, supplies, or moneys loaned. If then it is admitted that the late Congress were parties to the contract, we must agree that our situation is precisely the same, because we stand in their shoes; and in my former argument I urged, if we are parties we cannot be judges.

Mr. Jackson.—If there is no part of the debt of the United States unliquidated, besides the two millions which the gentleman alludes to, yet there is a very considerable part of what is in contemplation to fund, as Continental debt, not at present ascertained. I mean the State debts. The Secretary himself had no evidence before him, from which he could make a probable guess of the amount; if these are to be assumed by the General Government, I presume the General Government ought to be at liberty duly to ascertain them; and, therefore, the amendment proposed by the honorable gentleman from Pennsylvania ought to be admitted.

The honorable gentlemen who are in opposition, contend that no sort of discrimination ought to take place; yet from what they have let fall, on this occasion, I am led to believe that they favor that part of the report of the Secretary which makes a discrimination, in fact, equal to a loss of one-third of the principal. What will hold good in one case ought to hold good in another, and a discrimination might take place upon the same principles, between those to whom the Government was originally indebted, and who have never received satisfaction therefor, and those who had nothing to do with the Government in the first transaction; but have merely speculated, and purchased up the evidence of an original debt. Some gentlemen think, that the claims of this latter class merit a greater degree of attention, because by their actions, they seem to have evinced a greater degree of confidence in the Government than those who sold them. But, sir, these men have had more information, they have been at the seat of Government, and knew what was in contemplation before citizens of other parts of the Union could be acquainted with it. There has been no kind of proportion of knowledge between the two classes—to use the expression of a British Minister, the reciprocity has been all on one side. The people in this city are informed of all the motions of Government; they have sent out their money, in swift sailing vessels, to purchase up the property of uninformed citizens in the remote parts of the Union. Were those citizens acquainted with our present deliberations, and assured of the intention of Congress to provide for their just demands, they would be on an equal footing; they would not incline to throw away their property for considerations totally inadequate. Such attempts at fraud would justify the Government in interfering in the transactions between individuals, without a breach of the public faith; but this, sir, is not the object of the present motion, it only goes so far as to ascertain the amount of the debt, before we make provision for the payment; and this appears to me to be proper upon every principle of justice and discretion.

Mr. Burke wished the question postponed till to-morrow, as it was a subject of such high importance. He moved the committee to rise; whereupon the committee rose, and reported progress.

Wednesday, February 10.

Public Credit.

The House again went into a Committee of the Whole, Mr. Baldwin in the chair, on the report of the Secretary of the Treasury.

Mr. Scott's amendment being still under consideration.

Mr. Scott.—Some time was spent yesterday in the consideration of this subject; in my opinion, that time was not ill spent, nor would two or three days more be ill spent in discussing the question, for it involves in it the whole doctrine of discrimination and liquidation. If these two great points are once settled, the way will be clear and open before us to proceed to the discussion of the report: for if the principles of the report are good, I believe the plan itself is good. I believe, upon the principles which it holds forth, that it is wisely and judiciously drawn out, and does great honor to the officer who framed it. But it is incumbent on us to examine its principles before we adopt it; if they do not consist with equity and justice among the several inhabitants of the Union, they must be rejected. Now I doubt whether they consist with that equity and justice; I think there are others on this floor who have their doubts also. I wish, therefore, that we should coolly examine those principles, consult our judgment and understanding, and when we have collected all the information we can get from each other, we may determine; and when we have determined this, and the two grand points I have mentioned, our business will be easy.

In support of the principles held out in the report, it is said that a solemn contract is entered into that cannot be violated; that the debt is ascertained and cannot be extinguished, but by the absolute payment of what it acknowledged to be due. Now, I doubt whether the necessary concomitants of a contract to the amount mentioned on the face of the paper, really accompanies the public securities. Let us revert back to the time that this contract was entered into. At the close of the war, at the commencement of issuing final settlements, there was a demand against the United States for real and essential services rendered; the claimants came forward, and asked something for their demand. Congress having no money to give them, offered something; what? A certificate to a certain nominal amount; nay more, of a certain known value; the nominal amount was twenty shillings, the certain known value was two and sixpence. Did the soldier accept of this offer? Yes. On what principle did he accept it? He knew it was putting the capstone on the building which he had erected by his labor and cemented with his blood. I have done you services, said he, to the amount of twenty shillings, but you are poor and unable to pay me; I will accept now of your two and sixpence, and give you a discharge. Thus, the soldier who had, through blood and slaughter, established the liberties of his country, crowned the whole by the sacrifice of pecuniary emoluments. His consent was given to the contract, and he received two and sixpence in the pound. Now, if there is any other contract existing like this, I cannot see it. The soldier never received it, nor the officer who handed it out, never believed it to be worth more than two and sixpence in the pound. It was like compounding a debt by the consent of the creditor, and there an equal liquidation ought to take place. If this reasoning is right, we know the value at once of our paper currency; if it is not right, I would wish to know upon what principle of rationality, a rate can be established for the value of our certificates.

Mr. Boudinot.—I am convinced that the principles laid down by the gentleman from Pennsylvania, if true, ought to effect the final determination of this question; and if I was satisfied with them, I should clearly vote with him. If I was convinced that the certificates, at the time they were given out, were worth no more than 2s. 6d. in the pound, and that the creditors received them at that price, in full discharge of their demands, I should be very loath to raise them to so great a value; I would treat them precisely the same as Continental money. I should think that the public did complete justice by complying with the terms of their contract; while this is a matter of dispute we can never agree in our determination. But if I can show that this is not the case, that he has not looked into the origin of this debt, so as to be well ascertained of the fact, I hope he will give up his opinion, and join with me in the conclusion.

The debt of the United States is of four kinds; first, paper money; second, money lent; third, the pay to the army, including commutation, and the allowance for depreciation; and fourth, certificates, or evidences of the debts due from the United States to individuals, for supplies furnished, or services rendered at different periods of the last war. As to the bills of credit, I mentioned yesterday that they stand upon a different footing from the rest; because it was one of the parties who ascertained their depreciation, contrary to the opinion of the other, who had a desire of keeping them up to their nominal value. The money loaned to the United States, is a debt which we are bound to pay, on every principle of honor and justice; nor can it be said that the certificate given to the person who loaned the money, was given as a payment in discharge of the debt. With respect to the army, including commutation, I shall beg leave to read two or three resolutions of Congress, to show that Congress had a different idea of the certificates they gave to the officers and soldiers, in evidence of the balance of their account, which is still due. When they were first issued to the soldiers, Congress guarded them from being transferable; but as the soldiers could get nothing for them in that form, upon representation, Congress passed another resolution, by which they were made transferable, in order that the soldier might avail himself of the acknowledgment of Congress in his favor; (the resolutions referred to were in May, 1783, April, 1784, and June, 1784.) This recurrence to the resolutions of Congress, under which the evidences of the debt were issued, sufficiently explodes a supposition, that they were understood to be worth no more than 2s. 6d. in the pound, at the time they were issued and received. From the personal knowledge I have of the transactions of that time, I can venture to say, that no idea of payment was ever entertained. They were, in fact, and were so considered, evidences of the liquidated and specific sums due to the creditors of the United States. The step which Congress took for the benefit of the army, in making their certificates transferable, so far from accommodating them, would have proved a real injury. If the assignee had supposed himself to stand in a less eligible situation than the assignor, he never would have been induced to have given him the price which he did. If the soldier had received a certificate of twenty shillings, as only 2s. 6d. nobody would have inclined to have given him 2s. 6d. for it, because he could never expect to obtain a repayment of a greater sum, even in such money as Congress should find convenient; upon every principle of assignation of debts or contracts, such an idea ought to be reprobated.

Mr. Sedgwick.—I will express my idea on the point which the gentleman has made an inquiry respecting, in a few words. I said, that I conceived a delay of this business would endanger the peace of the Union by diminishing the energy of the Government, without which this constitution would be of no value. These are considerations which must appear weighty and important, if justly considered by the committee. A great and respectable body of our citizens are creditors of the United States. There are a variety of opinions prevailing respecting their claims, with respect to funding, discrimination, and interest. This diversity of opinion may probably irritate and produce heats and animosities, which may terminate in forming factions among the people. The State debts may produce a difference between the General and particular Governments. If the matter is taken up as the business of a party, one may be pitted against the other, until, in the end, they disturb the public tranquillity, or sacrifice the general welfare to opposition and party spirit. Besides this, the reputation, the credit of the Government is at stake; the public expectation is alive to all the measures of Government at the present moment. They expect that justice and equity will be administered as far as the abilities of our country extend; it lies with the Legislature to realize this expectation. If Congress pursue the present inquiry, and come to a determination without delay, the public sentiment will be brought to a point, and a general acquiescence may be expected; but if it is postponed to a future session, such may be the effect of faction and disappointment during the recess, that the probability is, that no one party will comprise a sufficient number to comprehend the majority of the whole.

Mr. Jackson.—Do not gentlemen think there is some danger on the other side? Will there not be ground of uneasiness when the soldier and the meritorious citizen are called upon to pay the speculator more than ten times the amount they ever received from him for their securities? I believe, Mr. Chairman, there is more just reason of alarm on this than on the other side of the question.

A gentleman from Pennsylvania (Mr. Hartley) has noticed my arguments of yesterday, respecting a funding system. I beg leave to make a few observations in answer to him. He has said, that a funded debt is of great advantage to a nation, and has adduced the situation of England as a proof, founded on experience. But England is a solitary example, and the force of that example dwindles into nothing, if we examine into the real cause of her seeming affluence. She does not owe much of respectability to her national debt; she owes the most of it, at present, to the troubles of other countries, and when those have subsided, the bubble of her credit may blow up, as did the South Sea project, for Government stock can never be considered as cash. The stock employed in agriculture, commerce, and manufactures may, by great prospects of advantage, be diverted into the hands of brokers, for the purpose of speculating further in the funds; but no real addition will be made to the means of productive industry, nor was any thing of this kind contemplated at the time funding was first introduced into England. We learn from Blackstone, that the reason for establishing a national debt, was in order to support a system of foreign politics, and to establish the new succession at the revolution; because it was deemed expedient to create a new interest, called the moneyed interest, in favor of the Prince of Orange, in opposition to the landed interest, which was supposed to be generally in favor of the king, who had abdicated the throne. I hope there is no such reason existing here; our Government, I trust, is firmly established without the assistance of stock-jobbers. We ought to reign universally in the hearts of our fellow-citizens, on account of the salutary tendency of our measures to promote the general welfare, and not depend upon the support of a party, who have no other cause to esteem us but because we realize their golden dreams of unlooked-for success.

Mr. Smith, (of South Carolina.)—If we were about to contract debts for the purpose of funding them, the observations of the gentleman from Georgia would apply; but we have already contracted them, and the only question is, shall we fund or pay? We must do one or the other. With respect to the remark of Blackstone, he is writing of an enormous public debt when he mentions it as injurious, because he expressly says, that "a certain proportion of debt seems to be highly useful to a trading people; but what proportion that is it is not for me to determine." To be sure he adds afterwards, "that the present magnitude of our national encumbrances very far exceeds all calculations of commercial benefit, and is productive of the greatest inconveniences." And here I agree with him: but our public debt is not of such enormous magnitude as to counterbalance the good effects of throwing out such a quantity of a stable paper as will answer all the purposes of a circulating medium.

Mr. Tucker.—I very much applaud the gentleman who made the motion now before the committee, because he has boldly come forward to combat an opinion so generally received in this place, that many thought it could not be controverted by any man possessed of common honesty; and because I am persuaded, that he has done it with an honorable intention of substituting real and substantial justice, in the place of that which he deems to be only the name and the shadow.

Although it is probable I differ with the gentleman who moved the amendment, I am inclined to think a discrimination of some kind is equitable and necessary. I believe it may be fairly said, that there are three classes of domestic creditors. The first, those who hold the Continental bills of credit, which have been long out of circulation. Second, those who hold certificates that were given for services or supplies, in their own names. And, third, those who hold certificates by purchase. I would wish to consider the obligation to each of these three classes, and whether, in equity, some kind of discrimination may not be made. On a strict and impartial examination, I am inclined to believe they will not appear to be the same. I will now turn to the examination of the first; namely, the holders of the Continental bills of credit. The Secretary of the Treasury has reported in favor of some degree of provision being made for them. But, sir, what is the situation of the people who hold these bills? If I recollect rightly, the face of the bills declares, that the bearer shall be entitled to receive so many Spanish milled dollars as is therein expressed. When these bills were issued, their real value was equal to their nominal value; no person refused, or wished to refuse, them as such; but, in a short time, too large a quantity were issued, and they began to depreciate. Congress then recommended to the several States to pass tender-laws for the support of their credit. This was done by all the States; and they continued, in some of them, to pass as specie, under those laws, when they were depreciated twenty, thirty, and forty for one. Those people, who received them in this state, suffered a very great loss by an act of the Government, and many were ruined by the measure. When these bills had thus depreciated, Congress passed a resolution, calling them in at forty for one. This ordinance of Congress immediately reduced the claims of the first class of creditors by an arbitrary act of power. I do not pretend to say that the measure was unnecessary, but it was rigorous to deprive them of 39-40ths of their claims. Perhaps we cannot return to all the transactions of that time, because it would involve the Government in a thousand difficulties, and produce, perhaps, greater evils than it would remedy. But there remains a claim upon our justice to pay the holders one dollar, at least, for forty. By the act of Congress, which I alluded to before, these bills were thrown out of circulation, and have ever since lain in the hands of individuals. Now, it appears to me, that, in equity, we ought to make all the reparation in our power. Surely, then, we ought to allow interest on the principal from the time the bills were scaled, and forced out of circulation. These creditors, I take it, have a strong claim upon us; because the Government has materially injured them, and the least satisfaction we can give them, is to put this part of the debt on the best footing we can; if we cannot do complete justice, let us approximate towards it as far as it is in our power. The second class of our creditors have obligations that are strong. It has been said, and generally passed current as an incontrovertible opinion, that those who transferred their certificates have conferred to the purchaser every claim they had upon the public. I mean, sir, to deny this assertion. There is a claim which they could not transfer, that is, a claim in equity;, they were entitled to the principal sum when they presented their accounts to the United States, and we ought, in justice, to have paid it at that time; but, perhaps, from our inability to do this, we were obliged to force on them a certificate of the balance, with a promise to pay them an annual interest thereon; but a promise to pay the interest does not exonerate us from paying the principal, as soon as we have it in our power. Now, this is a claim which the original creditor, who parted with the evidence of his debt, did not transfer to the person to whom he sold it. The United States are under no contract with the purchaser who bought a loaned debt, to pay him any thing more than what the paper specifies, that is, to pay him the interest from year to year, but not the principal, until we find it convenient.

Then, with respect to the third class, if the residue of the revenue is insufficient to pay them the interest on their whole principal, I would give them certificates for such part as we are able to provide for the payment of the interest upon, at six per cent., to be paid in the same manner with the others. And I would give them other certificates for the remainder, on a like interest of six per cent., the payment whereof should commence at a fixed period, say three, four, or five years, as it might be found that the increasing resources of our country would, enable us to do; but I would undertake nothing now beyond our present ability.

Thursday, February 11.

[Mr. Fitzsimons presented the address of the yearly (Quaker) meeting of Pennsylvania, New Jersey, Delaware, and the Western parts of Maryland and Virginia, held at Philadelphia, against the continuance of the African slave trade, and praying Congress to remove that reproach from the land, and Mr. Lawrence presented an Address to the same effect from the Society of Friends in New York.]

Mr. Hartley moved to refer the Address of the annual assembly of Friends, held at Philadelphia, to a committee; he thought it a mark of respect due to so numerous and respectable a part of the community.

Mr. White seconded the motion.

Mr. Smith (of S. C.)—However respectable the petitioners may be, I hope gentlemen will consider that others equally respectable are opposed to the object which is aimed at, and are entitled to an opportunity of being heard before the question is determined. I flatter myself gentlemen will not press the point of commitment to-day, it being contrary to our usual mode of procedure.

Mr. Fitzsimons.—If we were now to determine the final question, the observation of the gentleman from South Carolina would apply; but, sir, the present question does not touch upon the merits of the case; it is merely to refer the memorial to a committee, to consider what is proper to be done; gentlemen, therefore, who do not mean to oppose the commitment to-morrow, may as well agree to it to-day, because it will tend to save the time of the House.

Mr. Jackson wished to know why the second reading was to be contended for to-day, when it was diverting the attention of the members from the great object that was before the Committee of the Whole? Is it because the feelings of the Friends will be hurt to have their affair conducted in the usual course of business? Gentlemen, who advocate the second reading to-day, should respect the feelings of the members who represent that part of the Union which is principally affected by the measure. I believe, sir, that the latter class consists of as useful and as good citizens as the petitioners, men equally friends to the revolution, and equally susceptible of the refined sensations of humanity and benevolence. Why, then, should such particular attention be paid to them, for bringing forward a business of questionable policy? If Congress are disposed to interfere in the importation of slaves, they can take the subject up without advisers, because the constitution expressly mentions all the power they can exercise on the subject.

Mr. Sherman suggested the idea of referring it to a committee, to consist of a member from each State, because several States had already made some regulations on this subject. The sooner the subject was taken up he thought it would be the better.

Mr. Parker.—I hope, Mr. Speaker, the petition of these respectable people will be attended to with all the readiness the importance of its object demands; and I cannot help expressing the pleasure I feel in finding so considerable a part of the community attending to matters of such momentous concern to the future prosperity and happiness of the people of America. I think it my duty, as a citizen of the Union, to espouse their cause; and it is incumbent upon every member of this House to sift the subject well, and ascertain what can be done to restrain a practice so nefarious. The constitution has authorized us to levy a tax upon the importation of such persons as the States shall authorize to be admitted. I would willingly go to that extent; and if any thing further can be devised to discountenance the trade, consistent with the terms of the constitution, I shall cheerfully give it my assent and support.

Mr. Madison.—The gentleman from Pennsylvania (Mr. Fitzsimons) has put this question on its proper ground; if gentlemen do not mean to oppose the commitment to-morrow, they may as well acquiesce in it to-day; and, I apprehend, gentlemen need not be alarmed at any measure it is likely Congress will take; because they will recollect, that the constitution secures to the individual States the right of admitting, if they think proper, the importation of slaves into their own territory, for eighteen years yet unexpired; subject, however, to a tax, if Congress are disposed to impose it, of not more than ten dollars on each person. The petition, if I mistake not, speaks of artifices used by self-interested persons to carry on this trade; and the petition from New York states a case that may require the consideration of Congress. If any thing is within the Federal authority to restrain such violation of the rights of nations and of mankind, as is supposed to be practised in some parts of the United States, it will certainly tend to the interest and honor of the community to attempt a remedy, and is a proper subject for our discussion. It may be, that foreigners take the advantage of the liberty afforded them by the American trade, to employ our shipping in the slave trade between Africa and the West Indies, when they are restrained from employing their own by restrictive laws of their nation. If this is the case, is there any person of humanity that would not wish to prevent them? Another consideration why we should commit the petition is, that we may give no ground of alarm by a serious opposition, as if we were about to take measures that were unconstitutional.

Mr. Stone feared that if Congress took any measures indicative of an intention to interfere with the kind of property alluded to, it would sink it in value very considerably, and might be injurious to a great number of the citizens, particularly in the Southern States. He thought the subject was of general concern, and that the petitioners had no more right to interfere with it than any other members of the community. It was an unfortunate circumstance, that it was the disposition of religious sects to imagine they understood the rights of human nature better than all the world besides; and that they would, in consequence, be meddling with concerns in which they had nothing to do. As the petition relates to a subject of a general nature, it ought to lie on the table as information. He would never consent to refer petitions, unless the petitioners were exclusively interested. Suppose there was a petition to come before us from a society, praying us to be honest in our transactions, or that we should administer the constitution according to its intent, what would you do with a petition of this kind? Certainly it would remain on your table. He would, however, not have it supposed that the people had not a right to advise and give their opinion upon public measures; but he would not be influenced by that advice or opinion to take up a subject sooner than the convenience of other business would admit. Unless he changed his sentiments, he would oppose the commitment.

Mr. Burke thought gentlemen were paying attention to what did not deserve it. The men in the gallery had come here to meddle in a business with which they have nothing to do; they were volunteering in the cause of others, who neither expected nor desired it. He had a respect for the body of Quakers, but, nevertheless, he did not believe they had more virtue or religion than other people, nor perhaps so much, if they were examined to the bottom, notwithstanding their outward pretences. If their petition is to be noticed, Congress ought to wait till counter applications were made, and then they might have the subject more fairly before them. The rights of the Southern States ought not to be threatened, and their property endangered, to please people who would be unaffected by the consequences.

Mr. Hartley thought the memorialists did not deserve to be aspersed for their conduct, if influenced by motives of benignity. They solicited the Legislature of the Union, to prevent, as far as is in their power, the increase of a licentious traffic; nor do they merit censure, because their behavior has the appearance of more morality than other people. Congress ought not to refuse to hear the applications of their fellow-citizens, while those applications contain nothing unconstitutional or offensive. What is the object of the address before us? It is intended to bring before this House a subject of great importance to the cause of humanity; there are certain facts to be inquired into, and the memorialists are ready to give all the information in their power; they are waiting, at a great distance from their homes, and wish to return; if, then, it will be proper to commit the petition to-morrow, it will be equally proper to-day, for it is conformable to our practice; besides, it will tend to their conveniency.

Mr. Lawrence.—The gentleman from South Carolina says, the petitioners are of a society not known in the laws or constitution. Sir, in all our acts, as well as in the constitution, we have noticed this society; or, why is it that we admit them to affirm in cases where others are called upon to swear? If we pay this attention to them, in one instance, what good reason is there for contemning them in another? I think the gentleman from Maryland (Mr. Stone) carries his apprehensions too far, when he fears that negro property will fall in value, by the suppression of the slave trade; not that I suppose it immediately in the power of Congress to abolish a traffic which is a disgrace to human nature; but it appears to me, that, if the importation was crushed, the value of a slave would be increased instead of diminished; however, considerations of this kind have nothing to do with the present question. Gentlemen may acquiesce in the commitment of the memorial, without pledging themselves to support its object.

Mr. Jackson.—I differ much in opinion with the gentleman last up. I apprehend, if through the interference of the General Government the slave trade was abolished, it would evince to the people a disposition towards a total emancipation, and they would hold their property in jeopardy. Any extraordinary attention of Congress to this petition may have, in some degree, a similar effect. I would beg to ask those, then, who are desirous of freeing the negroes, if they have funds sufficient to pay for them? If they have, they may come forward on that business with some propriety; but, if they have not, they should keep themselves quiet, and not interfere with a business in which they are not interested. They may as well come forward and solicit Congress to interdict the West India trade, because it is injurious to the morals of mankind; from thence we import rum, which has a debasing influence upon the consumer. But, sir, is the whole morality of the United States confined to the Quakers? Are they the only people whose feelings are to be consulted on this occasion? Is it to them we owe our present happiness? Was it they who formed the constitution? Did they, by their arms or contributions, establish our independence? I believe they were generally opposed to that measure: why, then, on their application, should we injure men who, at the risk of their lives and fortunes, secured to the community their liberty and property? If Congress pay any uncommon degree of attention to their petition, it will furnish just ground of alarm to the Southern States. But why do these men set themselves up in such a particular manner against slavery? Do they understand the rights of mankind, and the disposition of Providence, better than others? If they were to consult that book, which claims our regard, they will find that slavery is not only allowed but commended. Their Saviour, who possessed more benevolence and commiseration than they pretend to, has allowed of it: and if they fully examine the subject, they will find that slavery has been no novel doctrine since the days of Cain; but be these things as they may, I hope the House will order the petition to lie on the table, in order to prevent an alarm to our Southern brethren.

Mr. Sedgwick.—If it was a serious question whether the memorial should be committed or not, I would not urge it at this time; but that cannot be a question for a moment, if we consider our relative situation with the people. A number of men, who are certainly very respectable, and of whom, as a society, it may be said with truth, that they conform their moral conduct to their religious tenets, as much as any people in the whole community, come forward and tell you, that you may effect two objects by the exercise of a constitutional authority, which will give great satisfaction. On the one hand, you may acquire revenue, and on the other, restrain a practice productive of great evil. Now, setting aside the religious motives which influence their application, have they not a right as citizens to give their opinion of public measures? For my part, I do not apprehend that any State, or any considerable number of individuals in any State, will be seriously alarmed at the commitment of the petition, from a fear that Congress intend to exercise an unconstitutional authority, in order to violate their rights. I believe there is not a wish of the kind entertained by any member of this body; how can gentlemen hesitate, then, to pay that respect to a memorial which it is entitled to, according to the ordinary mode of procedure in business? Why shall we defer doing that till to-morrow, which we can do to-day; for the result, I apprehend, will be the same in either case.

Mr. Smith, (of South Carolina.)—The question, I apprehend, is whether we will take the petition up for a second reading, and not whether it shall be committed? Now, I oppose this, because it is contrary to our usual practice, and does not allow gentlemen time to consider of the merits of the prayer. Perhaps some gentlemen may think it improper to commit it to so large a committee as has been mentioned; a variety of causes may be supposed to show that such a hasty decision is improper; perhaps the prayer of it is improper. If I understood it right on its first reading, though to be sure I did not comprehend perfectly all that the petition contained, it prays that we should take measures for the abolition of the slave trade. This is desiring an unconstitutional act, because the constitution secures that trade to the States, independent of Congressional restrictions, for a term of twenty-one years. If, therefore, it prays for a violation of constitutional rights, it ought to be rejected as an attempt upon the virtue and patriotism of the House.

Mr. Boudinot.—It has been said, that the Quakers have no right to interfere in this business. I am surprised to hear this doctrine advanced, after it has been so lately contended and settled, that the people have a right to assemble and petition for redress of grievances. It is not because the petition comes from the society of Quakers that I am in favor of the commitment, but because it comes from citizens of the United States who are equally concerned in the welfare and happiness of their country with others. There certainly is no foundation for the apprehensions which seem to prevail in gentlemen's minds. If the petitioners were so uninformed as to suppose that Congress could be guilty of a violation of the constitution, yet I trust we know our duty better than to be led astray by an application from any man or set of men whatever. I do not consider the merits of the main question to be before us; it will be time enough to give our opinions upon that when the committee have reported. If it is in our power, by recommendation, or any other way, to put a stop to the slave trade in America, I do not doubt of its policy; but how far the constitution will authorize us to attempt to depress it, will be a question well worthy of our consideration.

Mr. Sherman observed, that the petitioners from New York stated, that they had applied to the Legislature of that State to prohibit certain practices which they conceived to be improper, and which tended to injure the well-being of the community; that the Legislature had considered the application, but had applied no remedy, because they supposed that power was exclusively vested in the General Government under the Constitution of the United States; it would, therefore, be proper to commit that petition, in order to ascertain what are the powers of the General Government in the case.

Mr. Gerry thought gentlemen were out of order in entering upon the merits of the main question at this time, when they were considering the expediency of committing the petition. He should, therefore, not follow them further in that track than barely to observe, that it was the right of the citizens to apply for redress, in every case in which they conceived themselves aggrieved; and it was the duty of Congress to afford redress as far as in their power. That their Southern brethren had been betrayed into the slave trade by the first settlers, was to be lamented; they were not to be reflected on for not viewing this subject in a different light, the prejudice of education is eradicated with difficulty; but he thought nothing would excuse the General Government for not exerting itself to prevent, as far as they constitutionally could, the evils resulting from such enormities as were alluded to by the petitioners; and the same considerations induced him highly to commend the part the Society of Friends had taken; it was the cause of humanity they had interested themselves in, and he wished, with them, to see measures pursued by every nation, to wipe off the indelible stain which the slave trade had brought upon all who were concerned in it.

Mr. Madison thought the question before the committee was no otherwise important than as gentlemen made it so by their serious opposition. Had they permitted the commitment of the memorial, as a matter of course, no notice would have been taken of it out of doors; it could never have been blown up into a decision of the question respecting the discouragement of the African slave-trade, nor alarm the owners with an apprehension that the General Government were about to abolish slavery in all the States; such things are not contemplated by any gentleman; but they excite alarm by their extended objections to committing the memorials. Gentlemen may vote for the commitment of the petition without any intention of supporting the prayer of it.

Mr. White would not have seconded the motion, if he had thought it would have brought on a lengthy debate. He conceived that a business of this kind ought to be decided without much discussion; it had constantly been the practice of the House, and he did not suppose there was any reason for a deviation.

Mr. Page said, if the memorial had been presented by any individual, instead of the respectable body from whom it emanated, he should have voted in favor of a commitment, because it was the duty of the Legislature to attend to subjects brought before them by their constituents; if, upon inquiry, it was discovered to be improper to comply with the prayer of the petitioners, he would say so, and they would be satisfied.

Mr. Stone thought the business ought to be left to take its usual course; by the rules of the House, it was expressly declared that petitions, memorials, and other papers, addressed to the House should not be debated or decided on the day they were first read.

Mr. Baldwin felt at a loss to account why precipitation was used on this occasion, contrary to the customary usage of the House. He had not heard a single reason advanced in favor of it. To be sure it was said the petitioners are a respectable body of men; he did not deny it; but certainly gentlemen did not suppose they were paying respect to them or to the House, when they urged such a hasty procedure. It was contrary to his idea of respect, and the idea the House had always expressed, when they had important subjects under consideration; and, therefore, he should be against the motion. He was afraid that there was really a little volunteering in this business, as it had been termed by the gentleman from Georgia.

Mr. Huntington considered the petitioners as much disinterested as any persons in the United States; he was persuaded they had an aversion to slavery, yet they were not singular in this; others had the same; and he hoped, when Congress took up the subject, they would go as far as possible to prohibit the evil complained of. But he thought that would be better done by considering it in the light of revenue; when the Committee of the Whole on questions of finance might properly take the subject into consideration, without giving any ground for alarm.

Mr. Tucker.—I have no doubt on my mind respecting what ought to be done on this occasion; so far from committing the memorial, we ought to dismiss it without further notice. What is the purport of the memorial? It is plainly this, to reprobate a particular kind of commerce, in a moral point of view, and to request the interposition of Congress to effect its abrogation. But Congress has no authority, under the constitution, to do more than lay a duty of ten dollars upon each person imported; and this is a political consideration, not arising from either religion or morality, and is the only principle upon which we can proceed to take it up. But what effect do these men suppose will arise from their exertions? Will a duty of ten dollars diminish the importation? Will the treatment be better than usual? I apprehend not; nay, it may be worse, because an interference with the subject may excite a great degree of restlessness in the minds of those it is intended to serve, and that may be a cause for the masters to use more rigor towards them than they would otherwise exert: so that these men seem to overshoot their object. But if they will endeavor to procure the abolition of the slave trade, let them prefer their petitions to the State Legislatures, who alone have the power of forbidding the importation. I believe their applications there would be improper; but if they are any where proper, it is there. I look upon the address then to be ill-judged, however good the intention of the framers.

Mr. Smith claimed it as a right that the petition should lie over till to-morrow.

Thursday, February 11.

Assumption of State Debts.

[Mr. Madison's motion to discriminate between original creditors and present holders, so as to pay claims in full to the former, and the highest market price to the assignee, and the remainder to the original creditor.]

The House then again resolved itself into a Committee of the Whole upon the report of the Secretary of the Treasury, Mr. Baldwin in the chair.

Mr. Burke's amendment being under consideration,

Mr. Burke said, he had brought his motion forward, in consequence of a hasty promise he had given a member of this House; but as he did not mean to support it, or vote for it, he would withdraw it.

Mr. Madison.—No gentleman, Mr. Chairman, has expressed more strongly than I feel, the importance and difficulty of the subject before us. Although I have endeavored to view it under all its aspects, and analyze it in all its principles, yet have I kept my mind open, and been anxious to aid my own reflections by the reflected light to be expected from gentlemen on this floor who enter into the discussion. For this purpose, I have chosen hitherto rather to be a hearer than a speaker on the subject, and should even at this moment have continued in my seat, but that the turn which the business has taken, renders it requisite for me now, if at all, to trouble the committee with my reflections, and the opinion in which they have terminated.

It has been said, by some gentlemen, that the debt itself does not exist in the extent and form which is generally supposed. I confess, sir, I differ altogether from the gentleman who takes that ground. Let us consider, first, by whom the debt was contracted, and then let us consider to whom it is due. The debt was contracted by the United States, who, with respect to that particular transaction, were in a national capacity. The Government was nothing more than the agent or organ, by which the whole body of the people acted. The change in the Government which has taken place has enlarged its national capacity, but it has not varied the national obligation, with respect to the engagements entered into by that transaction. For, in like manner, the present Government is nothing more than the organ, or agent, of the public. The obligation which they are under, is precisely the same with that under which the debt was contracted; although the Government has been changed, the nation remains the same. There is no change in our political duty, nor in the moral or political obligation. The language I now use, sir, is the language of the constitution itself; it declares that all debts shall have the same validity against the United States, under the new, as under the old form of Government. The obligation remains the same, though I hope experience will prove that the ability has been favorably varied.

The next question is, to what amount the public are at present indebted? I conceive the question may be answered in a few words. The United States owe the value they received, which they acknowledge, and which they have promised to pay: what is that value? It is a certain sum in principal, bearing an interest of six per cent. No logic, no magic, in my opinion, can diminish the force of the obligation.

The only point on which we can deliberate is, to whom the payment is really due; for this purpose, it will be proper to take notice of the several descriptions of people who are creditors of the Union, and lay down some principles respecting them, which may lead us to a just and equitable decision. As there is a small part of the debt yet unliquidated, it may be well to pass it by and come to the great mass of the liquidated debt. It may here be proper to notice four classes into which it may be divided:

First, Original creditors, who have never alienated their securities.

Second, Original creditors who have alienated.

Third, Present holders of alienated securities.

Fourth, Intermediate holders, through whose hands securities have circulated.

The only principles that can govern the decision on their respective pretensions, I take to be, 1. Public Justice; 2. Public Faith; 3. Public Credit; 4. Public Opinion.

With respect to the first class, there can be no difficulty. Justice is in their favor, for they have advanced the value which they claim; public faith is in their favor, for the written promise is in their hands; respect for public credit is in their favor, for if claims so sacred are violated, all confidence must be at an end; public opinion is in their favor, for every honest citizen cannot but be their advocate.

With respect to the last class, the intermediate holders, their pretensions, if they have any, will lead us into a labyrinth, for which it is impossible to find a clew. This will be the less complained of, because this class were perfectly free, both in becoming and ceasing to be creditors; and because, in general, they must have gained by their speculations.

The only rival pretensions, then, are those of the original creditors, who have assigned, and of the present holders of the assignments.

The former may appeal to justice, because the value of the money, the service, or the property advanced by them, has never been really paid to them.

They may appeal to good faith, because the value stipulated and expected, is not satisfied by the steps taken by the Government. The certificates put into the hands of the creditors, on closing their settlements with the public, were of less real value than was acknowledged to be due; they may be considered as having been forced, in fact, on the receivers. They cannot, therefore, be fairly adjudged an extinguishment of the debt. They may appeal to the motives for establishing public credit, for which justice and faith form the natural foundation. They may appeal to the precedent furnished by the compensation allowed to the army during the late war, for the depreciation of bills, which nominally discharged the debts. They may appeal to humanity, for the sufferings of the military part of the creditors can never be forgotten, while sympathy is an American virtue. To say nothing of the singular hardship, in so many months, of requiring those who have lost four-fifths, or seven-eighths of their due, to contribute the remainder in favor of those who have gained in the contrary proportion.

On the other hand, the holders by assignment have claims, which I by no means wish to depreciate. They will say, that whatever pretensions others may have against the public, these cannot affect the validity of theirs. That if they gain by the risk taken upon themselves, it is but the just reward of that risk. That as they hold the public promise, they have an undeniable demand on the public faith. That the best foundation of public credit is that adherence to literal engagements on which it has been erected by the most flourishing nations. That if the new Government should swerve from so essential a principle, it will be regarded by all the world as inheriting the infirmities of the old. Such being the interfering claims on the public, one of three things must be done; either pay both, reject wholly one or the other, or make a composition between them on some principle of equity. To pay both is perhaps beyond the public ability; and as it would far exceed the value received by the public, it will not be expected by the world, nor even by the creditors themselves. To reject wholly the claims of either is equally inadmissible; such a sacrifice of those who possess the written engagements would be fatal to the proposed establishment of public credit; it would moreover punish those who had put their trust in the public promises and resources. To make the other class the sole victims is an idea at which human nature recoils.

A composition, then, is the only expedient that remains; let it be a liberal one in favor of the present holders, let them have the highest price which has prevailed in the market; and let the residue belong to the original sufferers. This will not do perfect justice; but it will do more real justice, and perform more of the public faith, than any other expedient proposed. The present holders, where they have purchased at the lowest price of the securities, will have a profit that cannot reasonably be complained of; where they have purchased at a higher price, the profit will be considerable; and even the few who have purchased at the highest price cannot well be losers, with a well funded interest of six per cent. The original sufferers will not be fully indemnified; but they will receive, from their country, a tribute due to their merits, which, if it does not entirely heal their wounds, will assuage the pain of them. I am aware, that many plausible objections will lie against what I have suggested, some of which I foresee and will take some notice of. It will be said, that the plan is impracticable; should this be demonstrated, I am ready to renounce it; but it does not appear to me in that light. I acknowledge that such a scale as has often been a subject of conversation, is impracticable.

The discrimination proposed by me, requires nothing more than a knowledge of the present holders, which will be shown by the certificates; and of the original holders, which the office documents will show. It may be objected, that if the Government is to go beyond the literal, into the equitable claims against the United States, it ought to go back to every case where injustice has been done. To this the answer is obvious: the case in question is not only different from others in point of magnitude and of practicability, but forces itself on the attention of the committee, as necessarily involved in the business before them. It may be objected, that public credit will suffer, especially abroad; I think this danger will be effectually obviated by the honesty and disinterestedness of the Government displayed in the measure, by a continuance of the punctual discharge of foreign interest, by the full provision to be made for the whole foreign debt, and the equal punctuality I hope to see in the future payments on the domestic debts. I trust also, that all future loans will be founded on a previous establishment of adequate funds; and that a situation, like the present, will be thereby rendered impossible.

I cannot but regard the present case as so extraordinary, in many respects, that the ordinary maxims are not strictly applicable to it. The fluctuations of stock in Europe, so often referred to, have no comparison with those in the United States. The former never exceeded 50, 60, or 70 per cent.: can it be said, that because a Government thought this evil insufficient to justify an interference, it would view in the same light a fluctuation amounting to seven or eight hundred per cent.

I am of opinion, that were Great Britain, Holland, or any other country, to fund its debts precisely in the same situation as the American debt, some equitable interference of the Government would take place. The South Sea scheme, in which a change, amounting to one thousand per cent. happened in the value of stock, is well known to have produced an interference, and without any injury whatever to the subsequent credit of the nation. It is true, that in many respects, the case differed from that of the United States; but, in other respects, there is a degree of similitude, which warrants the conjecture. It may be objected, that such a provision as I propose will exceed the public ability; I do not think the public unable to discharge honorably all its engagements, or that it will be unwilling, if the appropriations shall be satisfactory. I regret, as much as any member, the unavoidable weight and duration of the burthens to be imposed; having never been a proselyte to the doctrine, that public debts are public benefits. I consider them, on the contrary, as evils which ought to be removed as fast as honor and justice will permit, and shall heartily join in the means necessary for that purpose. I conclude with declaring, as my opinion, that if any case were to happen among individuals, bearing an analogy to that of the public, a Court of Equity would interpose for its redress; or that if a tribunal existed on earth, by which nations could be compelled to do right, the United States would be compelled to do something not dissimilar in its principles to what I have contended for.

Mr. Livermore wished the amendment he had formerly mentioned might be made to the original proposition; it was, to insert, before the word "interest," the words, "at a certain rate o."

Mr. Sherman apprehended it would strongly imply that Congress meant to reduce the rate of interest, and he did not wish that question involved with the present.

Mr. Livermore's motion being seconded, the question was put thereon, and it being lost,

Mr. Madison moved to amend the original proposition, so as to read as follows:

Resolved, That adequate funds ought to be provided for paying the interest and principal of the domestic debt, as the same shall be liquidated; and that in such liquidation, the present holders of public securities, which have been alienated, shall be settled with according to the highest market rate of such securities; and that the balance of the sums due from the public, be paid in such proportion to the original holder of such securities.

Mr. Boudinot said, he had long been in the habit of paying great respect to the sentiments of the gentleman from Virginia; but he feared, on this occasion, he had not viewed the subject with his usual accuracy. He was not surprised that the gentleman was led away by the dictates of his heart, for he believed he really felt for the misfortunes of his fellow-citizens, who had been the prey of avaricious men. Indeed, it is matter of less surprise, on another account, for heretofore I contemplated the subject in nearly the same point of view. Influenced by a desire to do justice to every person connected with the public, I wished for the means of compensating the original holders, who had sold their certificates at a great loss; but I found the thing, upon long and careful examination, to be both unjust and impracticable.

The honorable gentleman tells us, that the debt was contracted for meritorious services, and inquires whether the creditor received an adequate compensation in full discharge? I say, sir, this debt is still due, and that the person to whom it is due, has received nothing but a certificate as evidence of his claim; but then, if any of our first creditors have put another person in their shoes, the question will arise, are we to disown the act of the party himself? Are we to say, we will not be bound by your transfer, we will not treat with your representative, but insist upon a resettlement with you alone? But the same reasoning will oblige us to go further, and investigate all the claims of those who have received of the Government Continental money, which they afterwards parted with for ten, forty, or one hundred for one.