H. OF R.]

Public Credit.

[FEBRUARY 22, 1790.

of the alternatives, would be left unprovided of the debt which the United States are able to for, unless there should remain a surplus after bear; how much of the debt we shall find, if every other demand was satisfied. He thought we are not capable of funding the whole; and no discrimination ought to take place, and that whether there is any part that has a less claim he conceived to be the sense of the committee; to interest being paid upon it than another; and then the revenue should be applied in just pro-in what manner such part ought to be provided portion among the creditors. for.

Mr. FITZSIMONS would not undertake to say, It is well known to every gentleman on the that this was an unfortunate proposition; but it floor, that the United States have extensive had certainly been treated as liable to many tracts of vacant and uncultivated lands. Let objections; however, he trusted he would not us inquire, then, whether it would not be both contend for words, so that the real object be at-prudent and politic to avail ourselves of this tained; but he would ask, what did the gentle-resource, and apply it to the immediate dimiman mean by this motion? Does he intend thatnution of the public burthens? It is true, gennothing more shall be provided for paying the tlemen seem pretty generally agreed, that the public creditors than the impost now in collec- people of the United States are capable of beartion? If he does, their claims will be but poorlying every burthen necessary to the support of satisfied; but he considered that no money puble credit. This I do not mean to controcould be raised by law, unless it was specially vert, they may be capable of bearing each his appropriated. He hoped the funds of the Uni-full proportion; but I would ask, what is their ted States would be found under an economical inclination? Do gentlemen suppose they are and efficient administration, fully adequate to willing to bear it? For unless, in a Governevery demand upon their justice. The reportment like ours, the people are willing to bear of the Secretary of the Treasury placed it in it, it amounts, in my judgment, to an incapathis point of view, and it was the point in which city, and will, on public credit, have the same he had long been accustomed to contemplate it. effect. He was pleased to find himself warranted, in Our present circumstances are distressing; these expectations, by official information, we were brought into this calamitous situation drawn by a gentleman of ability, from indubi-by the ravages, depopulation and expense of the table documents, and some experience.

When he had the honor of bringing these propositions before the committee, he hoped their simplicity and singleness would have confined the debate constantly to the point. He conceived it to be time enough to enter into the minutiæ, when the business was spread in the form of a bill. If the committee agree, in the general principles and great outlines of the plan, the inferior parts might be accommodated with convenience, so as to produce a complete and uniform system.

late war.

guided by a magnanimous policy, to do the best It is our duty, then, as Legislators, we can, for the community so circumstanced. Let all our efforts tend in this direction, and we shall evince that our great object is the pub lic good. This opinion, established on experience, will do more to perpetuate the blessings of good Government, than all the theoretic systems that can be invented. Let us use our extensive Western Country, to repair the ruin which has taken place; draw from the impost, Mr. GERRY objected to the amendment of- be obtained without distressing the community; or any other source of revenue, so much as can fered by the gentleman from Virginia, (Mr. but if it is not agreeable to go further, it is imWHITE) inasmuch as it involved a breach of proper, and we ought to call in aid the fund to the constitution; for, in the manner he had ex-which I allude. Let the sales of land sink the pressed it, the committee were to resolve, that permanent funds ought to be provided for the support of the military establishments of the United States, when grants of that nature are expressly prohibited from being for a term greater than two years.

Mr. WHITE. If he was right in the principles of this motion, he hoped it would be adopted; but he would obviate the last mentioned objection by striking out the word "permanent."

The proposition of Mr. WHITE, being now reduced to a motion, a question was taken on the same; and it passed in the negative.

arrearages of interest and indents; or let it be
exchanged for them at a moderate and fair va-
luation. We here do the best, we can-we have
this fund, and they have our obligation. We
do not wish the holder of indents to pay an ex-
sell them at a moderate rate.
travagant sum for our lands-we are willing to

do it, if we cannot do complete justice, let us If we can do complete public justice, let us do the best we can. We owe the interest, let us offer what we have of equal value, in order vided for the punctual future payment of the to make complete payment. After having prointerest and principal of the domestic debt, we discharge of the indents and arrearage of incan do no less than what I now propose, for the terest. The measure, there can be no doubt, would give great satisfaction to our constituMr. LEE said, he conceived this to be the ties full and adequate compensation for their ents, while it rendered the holders of securiproper place for us to determine the quantum | claims. He concluded with moving, that the

The question then, on Mr. FITZSIMONS'S second resolution (see page 1178) being taken, passed in the affirmative.

The third proposition (the same page) being under consideration:

arrearages of interest, including indents issued in payment thereof, ought to be provided for by the sale and disposal of lands in the Western Territory.

[H. OF R.

tributing taxes to pay half the debt of the latter State? Yet this will be the result, in regard to every State which has paid its full proportion or less. If it will be unjust, as it respects those States which have paid but half, how much more unjust will it be as it relates to those who have not paid any. Will it not be better to let it be considered as a debt on account without funding it, liable to the final liquidation, and settlement of accounts. Or if we admit the States making defaults, to place its indents in the general funds, we ought to provide that those States which have paid in those indents, either in whole or in part, draw back the same, or receive other securities to an equal amount, and then we may, on the principles of equity, admit the whole to be funded. But the best way to proceed will be, to considTreasury of the United States; for he could not believe that it is meant that a State should have the benefit of its delay. He wished the proposition varied so as to embrace this idea.

This motion not being seconded, Mr. GERRY inquired what it was intended by this resolution to do? Was it meant to fund the indents in the State Treasuries If this was contemplated, he feared that it would be a reward for delinquency; and this the committee would be convinced of, by referring to the manner in which the business was conducted. At the time that Congress authorized a State to issue indents in payment of interest on the domestic debt, they called upon her to pass acts for collecting and contributing her proportion of the same to the United States. Some States passed acts accordingly, collected them in, and transmitted them to the Treasuryer the indents in the State Treasuries, as in the of the Union. Others have collected them, but never paid them over as required. Therefore it appears, that this last class ought not to have the benefit of having the indents in their hands funded, while others, who have shown a more prompt compliance with the calls of the Union, are prevented, by having performed their duty, and paid them over to the Treasury. With respect to the indents in the hands of the creditors, and the arrearage of interest, he had no doubt of the propriety of considering them as part of the principal; he would, in order to make the object of the resolution more pointed, move to alter it so as to read, "ought to be incorporated with, and made part of the principal," instead of "ought to be provided for, on the same terms as the principal.”

Mr. LAWRENCE.-If gentlemen will only advert to this circumstance, the proposition, as it stands, will be admitted without any amendment. The several States have been called upon for several years past, for certain sums, in specie or indents, and those sums were apportioned according to their supposed abilities. These sums were not considered as their absolute quotas, but were left to be adjusted at some future period, when a rule of ascertaining the proportion should be agreed upon. Those States which complied with the requisitions, by advances of either specie or indents, are to be considered as making advances only on a general account; so that whether a State com

Mr. FITZSIMONS said, there was no doubt but the intention of the resolution was, to make an equal provision for all, whether in the posses-plied or did not comply, is quite immaterial, sion of the States, or in the hands of individuals. because, when those accounts are ultimately He saw no mode by which a discrimination settled, each State will have credit according could take place, if even the principle was just; ly. Some States may avail themselves of the but it was as much a fact, as that some States benefits of the resolution at present, but eventhad neglected to pay over their quotas to the ually it will be equalized. The issue of indents Federal Treasury, and retained the indents in was a measure intended for the advantage of their own, that other States had paid their full the individual creditors; the States were proproportion of them, and still retained a consid hibited from issuing this species of certificates. erable balance, which they were undoubtedly until they provided a revenue for their ultientitled to fund. He apprehended these requi· mate discharge; and the requisitions of Consitions of Congress must stand upon the same gress were so arranged as to facilitate the effooting as all other requisitions; but in the in-forts of the several States; they were authorized terim, that a general and equal provision must to pay two-thirds of the requisitions in indents, be made for all; and this was the idea of the and one-third in specie. Some States passed Secretary, as the whole interest, whether paid laws conformable to these terms held out in in indents, or unpaid, is calculated to be funded. 1785, but in 1787 an alteration in the requisiMr. GERRY would submit it to the judgment tions took place; the States were no longer of the committee whether this was a just prop-obliged to pass laws covering so much of the inosition, if they considered its operation? Sup: pose, said he, that one State has collected its full proportion, agreeable to the requisitions of Congress, and sent the amount into the Treasury of the United States, while another State has collected but half her quota, and has it still in possession. is it justice or equity, that the State first mentioned, which has complied with its duty, should be under the necessity of con

dents specially, but were left to pay them in the manner they judged most expedient. He believed that the States which had passed laws for their redemption had generally paid them over to the loan offices in their States, and they either hold them for, or have transmitted them to the Federal Treasury. Probably in some States, these certificates may be in the course of collection; because it often happens,

H. OF R.]

Public Credit.

[FEBRUARY 22, 1790.

that when revenue laws are passed, the pay-it oppressive and unjust, to contribute further ment of the tax is delayed. It is meant to say, sums, when they had done already what had by this restriction, that those indents only, been required on the principles of reciprocity; which are this moment in the State Treasuries while those who had participated in the violashall not be funded; if it is, how can the law tion of public faith and the breach of contracts be executed? Indents are made to pass as spe were rewarded. cie, they are issued without name. The States have received them as such, and have a right to pay them away, leaving the effect to be determined by the operation of the final settlement of accounts.

Mr. LAWRENCE said, the gentleman's objection went against making any provision at all on this head; for saying that the indents should be left on the footing of the old Confederation was nothing more nor less than rejecting them. If Mr. MADISON considered it improper to en- the National Government should decline fundcumber a general proposition with a particular ing them generally, the individuals would nevdetail; but beside this objection, he had another get satisfied. The gentleman has supposed, er; that is, it may tend to embarrass the com- that it would be derogatory to the honor of the mittee on a future question of great magnitude. States that have not complied with the requisiMr. SHERMAN Would second the gentleman's tions of the old Congress, if they were to give motion, if reduced to form, in order that the out the indents they have or may collect. He sense of the committee may be taken on it, and did not view it in this light, because, he suppoafterwards leave them to proceed to the main sed every State had a right to use this property question. He thought the exception to fund- as it pleased, and wait the final settlement of ing the indents in possession of the States the accounts. If she paid them into the Fedought to have a proviso attached to it, to secure eral Treasury, the balance due her on settleto them a credit in the general account on its ment would be greater; if she neglected it final adjustment. would be less, so that the event would do equal Mr. GERRY.-What are the objections to the justice, according to the nature of the case. variation I propose? It is suggested, by the gen- But the ground of requisitions was abandoned, tleman from New York, that the States having the mode of providing for the public debt was these indents in possession, may issue them and different, the General Government now operaevade the intention of the law, without the pos- ted on individuals. How then is it derogatory sibility of detection. I will not suppose a to the honor of a State, to use a property, thing so derogatory to the honor of any State; which, as she has not paid, she must hereafter but if the thing was to be apprehended, a reme- pay? The mode of discharging the public debt dy might be sought for, and no doubt with suc being varied, we are not to expect that any cess. The same gentleman says, that when State will pay a farthing on the old requisitions the accounts are finally liquidated, these mat- of Congress, what they have they will keep, and ters may be adjusted; but it is a doubtful mat-abide the ultimate adjustment; from hence, it ter when this adjustment may take place. Yet, suppose they were adjusted, which some consider as a contingency, which may or may not happen, how would it operate in the interim? Here is a State, consistent with its duty, has complied with the requisitions of Congress, so far, at least, as respects the interest of the domestic debt; while, on the other hand, there is another State disregardful of that duty which has not complied. This unlimited proposition will determine, that the first shall contribute to fund all indents, which the latter has received, collected, and retained; but which they ought equally to have paid over to the Federal Treasury; and on the capital of this exclusive debt, she must labor to pay interest, until the final liquidation of accounts. Now, is there a State in the Union so flush of money, as to wish to contribute an unequal proportion to the support of this measure? Will it be satisfactory to those States which have furnished their proportion to be thus treated? Will they not contend, either that the whole be paid in, or that they be reimbursed by the issue or return of their proportion which they had already contributed? It appears that one or other of these modes ought to be pursued, as well for the satisfaction of States, as to conform to the principles of justice. The complying States could not but consider

appears that the motion and ultimate proviso are unnecessary, even if the measure was within our reach, which it certainly is not.

Mr. LIVERMORE apprehended the general proposition made by the gentleman from Pennsylvania, was embarrassed, by having in it the word "indents;" he wished, therefore, it, and all that related to it, might be struck out. He thought the indents issued by the former Congress ought to stand on their old footing, and be paid in on the requisitions. A great part had been already collected, so ought also the remainder; but if any part should eventually be left in the hands of individuals, Govern. ment might make provision for them. If gentlemen objected to strike out the word " perhaps," and inserting "not," before the_word "including," would produce the same effect.

Mr. FITZSIMONS feared the gentlemen had not considered the subject with their usual accuracy; if they had, they would not embarrass it with a question of this sort. They would please to recollect, that the requisitions of Congress touching the indents were of the same nature as those of specie. These requisitions, as well the one as the other, were complied with by some States in full, in some by small advances, while others paid none at all: from these circumstances, it happens that a large sum is

now due the individual creditors, either for the indents in their hands, or for the unpaid interest due.

[H. of R.

principle. Would the States, who have performed their duty, submit to such oppression? It could hardly be expected of them. But if they acquiesced for the sake of preserving the harmony of the Union, is it likely that the delinquent States would ever concur in, or aid the final settlement of the accounts, which would bring the old load upon the shoulders of the majority, and render that distributive justice which they now evade? Whatever may be the event, it is certain that it would be their interest to avoid the final adjustment of the expenditures.

The indents due on the requisitions of Congress, in April, 1789, were 6,491,000 dollars; the specie was $3,521,000. Now how can it be proper to call upon the States for the first balance, and not for the last? If it is meant that these balances should be paid, the State I have the honor to represent can have no objection; she has paid an equal proportion to any in the Union; but, I believe, no gentleman on this floor entertains a hope that the States can be prevailed upon to pay up the balance of the re- Gentlemen say, that individuals will be afquisition in specie: this ground, I take it, sir, is fected by the restriction which I have contemtotally abandoned; and if we mean to do any plated; but how will they be affected? Advanthing for the support of public credit, we must tageously; for I would ask any gentleman, if have recourse to some other mode of obtain- the funds will not yield a greater proportion as ing revenue: If it is intended to refuse fund-the debt is less, and if this will not secure a ing the indents in the State Treasury, great more punctual and complete payment than injustice will be done, for the State of Penn- when the debt is increased by the addition of sylvania has not only paid the whole required the indents already in the State Treasuries? of her by Congress, but has a considerable bal-But there is a real distinction between the speance in her Treasury. For that State having cie requisitions, and the requisitions of indents. assumed the payment of the debts of the Uni-Specie was to be collected of the inhabitants, ted States, due her own citizens, has made a without a certainty of a return; but indents provision for the payment of the interest in ac- were first lent by Congress to the States, and tual money; as she assumed more than her pro- they were to return them after having made the portion of the domestic debt, she consequently use of them for which they were issued; some drew interest in indents beyond the quota re- States having paid the whole back, others quired of her by Congress, the balance still re- have paid little or none. Now, what was the mains in her hands, and she is undoubtedly as contract? That every State should return the much entitled to have them funded, as if she indents that were advanced to them. It canhad issued them to her citizens, instead of not, therefore, be consistent with justice, to the money she has paid for interest. The State burthen the complying States with a load of of New Jersey is in the same predicament, and debt, accumulated, and applied by the defaultthere can be no doubt but these two States, and ing States to their exclusive advantage, withevery other in similar circumstances, would out any other than a very remote expectation sustain real injustice, if the amendment pro- of reimbursement at the final settlement of acposed by the gentleman from Massachusetts counts. were to take place.

Mr. FITZSIMONS was apprehensive lest an Mr. GERRY said, the arguments of the gen- amendment of the kind proposed should embartleman last up did not touch the question, be- rass the business. How could the gentleman cause the amendment was not intended to affect make the exceptions he had admitted to be the balance held by the States, which had paid proper? The claim of Pennsylvania was indisin the indents required by Congress. The sit-putable; but, perhaps, other States might have uation of Pennsylvania ought, no doubt, to be the same justice due to them, in cases where provided for, but he did not know that any their claim might not be altogether so appaother State in the Union was in the same condi- rent. tion; but he was well convinced, on the prin- Mr. CLYMER said, the gentleman ought to ciple of equity, that the delinquent States had qualify his amendment, so as to speak the launo right to have their indents funded, and bur-guage of his own explanation. He ought to acthen those which have already contributed their full proportion, with a debt they do not owe: he would state a case; suppose the whole debt of the Union had been proportioned and Mr. BENSON.-The motion for amending the levied before the formation and adoption of the original proposition, appeared to him to stand constitution, and the State of Pennsylvania had on a principle rejected by the Committee. It paid in her full proportion, then she is, in jus- would be an unavailing discrimination; because tice, discharged froin any other or further con- the power of the General Government could tribution; but the new constitution having ta- not reach the case; suppose this State were to ken place the delinquent States oblige her to direct its Treasurer to sell the indents in his take up part of their burthens; they levy a di-possession, and buy certificates, or if it were to rect tax, and make her pay a second proportion: Would this be consistent with justice? It would not; yet the proposition stands upon the same

cept only those indents collected into the State Treasuries, for the purpose of complying with the requisitions of Congress.

order them to be exchanged or paid away, how would the Congress prevent the measure? This Government does not operate on States,

Public Credit.

as the Confederation did; it operates on indi- Mr. STONE thought it would be unjust to viduals, and who is to be punished for the act fund the indents in the Treasury of a delinof the State? Has Congress authority to forbidquent State, and refer the one that had paid in the sale, or to punish the disobedience of its order, in this case? It is a delicate question, and ought not to be unnecessarily agitated. Mr. HUNTINGTON had some suspicion that a resolution like that proposed would tend to embarrass the final settlement of the accounts; and for that, as well as the other reasons suggested, he would vote against it.