ted States certain Western lands therein described, on the conditions therein contained, and that when a deed shall be executed for the same, Congress express their acceptance thereof by a legislative act: to which resolution they desire the concurrence of this House. Mr. FITZSIMONS, from the committee appointed for the purpose, presented a bill for regulating the Post Office of the United States, which was read the first time. PUBLIC CREDIT. The House then again went into Committee of the whole on the Report of the Secretary of the Treasury, Mr. BENSON in the Chair. The assumption of the State debts under consideration. [H. OF R think I discover great advantages resulting therefrom. I believe it will be much easier, and more productive, for one body to draw forth the resources of the Union, than it will be for, many. Those resources must be drawn out for the particular purposes for which they are wanting; the debt of the General and particular Governments must be provided for, either by the General Government, or part by the General Government, and part by the particu lar State Governments; for I apprehend the creditors of the respective States will think their State Governments as much bound, in justice, to satisfy their claims, as the creditors of the General Government think the United States bound to satisfy theirs. Therefore it seems to follow, if the General Government does not make provision for both, that they must leave some of the resources for the satisfaction of that part for which they themselves decline to make provision. Supposing the whole must be satisfied, I am led to conclude it might be done with greater ease, less expense, and more facility, if it was all provided for under one general system. This is my general idea; and I am convinced, the more it is examined, the more it will be found beneficial to the Union. Mr. LIVERMORE thought this proposition one of a very extensive nature, and of which the committee, at the present, had no complete idea. But why are we to use such expedition in determining upon it? The Secretary does not consider it of importance to provide for it for a long time to come. Are the creditors of the respective States, or the States themselves, clamorous for the measure? They have not, as yet, applied to Congress on this head; perhaps the creditors are satisfied with what the States have done for them; why then are we to undertake a work of this extent, when nothing appears to show its necessity, or even propriety? Is not the task of providing for the real debts of the Union sufficiently arduous, without undertaking more, when more is unnecessary? Beside, will not the assumption of more debts than we owe disable us from doing our real creditors justice? And will they not have a right to complain of our conduct? But the merits and amount of these debts are both unascertained. It would argue a want of foresight to adopt a measure wrapped up in uncertainty, We know there are Commissioners appointed and employed in the settlement of the accounts between the individual States and the United The objections made by the gentleman from States; let us know first from them what balan- New Hampshire may be easily obviated. He ces are due to the respective States, before we has mentioned that we know nothing of the undertake to assume them. I think these con- state or amount of this debt. The Secretary siderations alone sufficient to induce us to sus- of the Treasury, from authentic accounts in pend our determination for the present; but if many instances, and from well grounded conwe cannot pass it over regularly, and consis-jectures in others, has ascertained that all the tently with the rules of order, of which, by the by, I profess myself no judge, I hope it may be negatived. It is well known, that particular States are in the exercise of deriving revenue from excise, for the satisfaction of particular creditors; and that part of the Secretary's plan contemplates the excise as a branch of revenue whereby to provide for the domestic debt of the United States. Perhaps, and it is highly probable, that the excise may be laid by both on the same articles; if they both go on, there will be such clashing and confusion, such prejudice and loss of revenue, that the product cannot be relied on by either: but if the debts are assumed, we can have the whole of these funds, and there is no doubt but they will be fully adequate, in this way, to the purpose for which they are wanted. claims of individuals upon the several States does not exceed twenty-five millions of dollars; hence, here is some certainty as to the extent of the debt; but if there is any objection on this ground, Congress may bind them to that amount, that they shall not go further. Mr. LAWRENCE.-I view this, sir, as one of the most important subjects which can come before Congress. I conceive that it requires all the investigation and consideration which rea- He further objected, that it was improper to son and the most experienced judgment can be- assume these debts, because we do not know stow. I hope, therefore, that gentlemen are the merits of the particular claimants. We prepared to enter on the discussion with candor must have some confidence on this subject, and and moderation; and furnish their associates suppose that when the particular States settled, with all the light they can reflect upon the sub-liquidated, and admitted a debt, that they did ject. not admit improper ones; the States having adFor my own part, after paying some attention mitted them is our security; the merit was provto the measure, I must own that I am at pre-ed to their satisfaction, and no doubt will be to sent in favor of assuming the State debts; Iours, provided we think proper to assume them. H. OF R.] Public Credit. [FEBRUARY 23, 1790. subject which some gentlemen considered as of the first importance. He presumed from it, and the consideration gave him the highest gratification, that they were disposed to persevere He says there has been no application made to Congress, by either States, or individual creditors of States. But this, sir, is no reason against the assumption. If we view it as a measure beneficial to the true interests of the Unit-in that line of conduct towards each other, ed States, we are at liberty to adopt it without any such application. I imagine it will be beneficial to the State claimants; and it is unne cessary to wait for an application from them, to induce us to do what will be conducive to their interest. They will be better satisfied under a general regulation, that will exhibit full and permanent provision, than they can be under partial State regulations. I believe there is no occasion to wait until the particular States make application, because the claims we are to assume are those of individuals against the States, and if they mean to subscribe their claims, the States cannot interfere, it is the property of the creditor, and he may do with it what he pleases; if they chose to transform their debt into a Continental debt, what has a State to do with the transaction? The gentleman has also intimated, that if we assume the State debts, we shall embarrass the operations of the General Government, with respect to the domestic creditors; but if we do not assume those debts, I think the creditors of the General Government will have a right to complain. For the interference and clashing of thirteen collections will, in all probability, occasion a deficiency in every one; the certain ty of drawing any given sum from a fund thus circumstanced, is not to be relied on; will it not be injurious to the creditors of the Union to have the revenue that is to pay them their interest totally precarious? Will not their principal be diminished in full proportion? which had hitherto so notoriously contributed But there is another consideration: the manner in which the provision shall be made for the discharge of the annual interest will, in a great measure, depend on the decision of this question; because, if the committee determine that they will assume the State debts, they may proceed without paying much regard to the existing and otherwise interfering revenue laws of the several States. They would then have a clear stage, and might fit it up as they judged most convenient. They might lay such duties as they supposed were most likely to be successfully collected. But if we do not assume them, it will then be worthy of inquiry, how far we are to regard the present laws of the States respecting excise? Whether we are content to take the residue of what is left after the State collection? This will also lead to the discusThe gentleman has admitted, that on the sion of an invidious question between the prefinal adjustment of accounts, we ought to as-emption right of the State and of the United sume the balances. I suppose, if the States are States, and the superiority of the general and not able to pay them; but I presume the settle-particular creditors. ment of accounts makes no alteration on this point. If the debts are now assumed, it will reduce those balances; if they are not assumed till after settlement, the balances will be greater. If it is proper to assume at any stage, why not assume at the first stage, when we are certain that the measure is founded in justice, and can be executed with convenience to all parties? Hence I am led to hope that the committee will ultimately adopt the resolution, though I am not anxious to hurry on a decision until the subject is well examined. I shall hear the observations of gentlemen with pleasure. By pursuing order, we shall, I trust, come to satisfactory conclusions upon every proposition. The resolutions are simple; they do not enter too much into detail; nor are they expressed in too compact a manner. By their simplicity they are capable of fair discussion; it is what the honorable mover intended, and what I hope they will receive. There is one other remark I would suggest; but then I would have gentlemen observe, that I barely suggest it. Perhaps if we do not assame the debts contemplated by the Secretary, we have no right to assume the funds; if we break into his general arrangement, the system is dissevered, and can hardly be again connected so as to preserve its symmetry, or give it ef Mr. LIVERMORE begged to explain one word. What he had said with relation to the merits of the debt, did not apply to the individuals, it referred to the nature of the debt, such as whe-ficacy. ther it was contracted for general or particular Mr. SHERMAN,-If we can make provision defence, or for local and State purposes, with for these debts, it will be a desirable object to which other States had nothing to do. He sup-assume them; it will, at the same time, ease the posed there was all this and more variety to be found in the State debts. Mr. AMES expressed great regard for the candor of the committee in proceeding to discuss a States of a very great burthen, and put all ranks of creditors on the same footing; and this last will have an effect to prevent speculation, inasmuch as there will be but one uniform ob ject for men to trade in; there will be no difficult variety in the nature of stock. But, at the same time, I think the debts to be assumed ought to consist of those only which were incurred for common or particular defence during the last war; and not those debts which a State may have incurred for the support of its Government, the protection and encouragement of its manufactures, or for amending and opening highways, clearing the obstructions in the navigation of rivers, or any other local purpose, undertaken merely for the benefit of one or two States. I have no objection to agreeing to the general proposition at this time; but I am not quite so well satisfied with respect to the time when the provision ought to be made for paying the interest thereon; but as that matter is not immediately before the committee, I shall not touch upon it at present. [H. OF R. ever the property is, there will be the power. And if the General Government has the payment of all the debts, it must, of course, have all the revenue; if it possesses the whole revenue, it is equal, in other words, to the whole power; the different States will then have little to do; important talents will not be necessary to be employed in the administration of the State Governments; if they are not found to be necessary, the fair presumption is, they will not be employed. Men of consequence and great abilities will hardly go into a Legislature where their usefulness is circumscribed to trifling or uninteresting points. What is likely to be the effect of this? I presume, that hereafter the Legislatures of particular States will be composed of men who hold their talents at a cheaper rate. The same principle will operate throughout the whole routine of State business-the Legislative, Executive, and Judicial; and the operaMr. STONE.-A strong binding force, exte- tions of the Government will partake of the rior or interior, is supposed essentially neces- weakness and imbecility of its administration. sary to keep together a government like ours; In proportion as the State Governments decline and of all the bands of political connexion, in consequence, men will look up to the Geneperhaps there is none stronger than that which ral Government; and in proportion as they deis formed by a uniform, compact, and effica-cline in their importance, so will the Federal cious chain or system of revenue. A greater thought could not have been conceived by man; and its effect, I venture to predict, if adopted by us, and carried into execution, will prove to the Federal Government walls of adamant, impregnable to any attempt upon its fabric or operations. I have viewed it with some degree of attention, and I see the subject rise into gigantic height. Government rise in consequence. It has been very doubtful whether there can be a confederated Government where the laws are to operate on individuals, and not on States. Indeed it has been a doubt whether a Confederated Government remains, when the General Government possesses the power of the purse; and whether that circumstance does not swallow up the idea of an absolute existence of a I am inclined, sir, from the view I have taken, State Government. I believe the truth of this to believe that the measure is not founded in will be demonstrated by recourse to historic injustice; because it is an advance of credit by facts. Every confederated Republic which has the United States, which the individual States given the superintending body the power of the are in future to compensate. And although the purse, has found every effort of the individual individual States may have gone into enormous States insufficient to keep the compression of expenses on account of their Civil Government, that band from holding them tightly together; yet it does not appear that it will operate injus- neither exterior nor interior force has yet been tice on that account; because I suppose that the able to separate the parts of a Government States will not have credit in a future settle-formed on this principle. Hence, sir, I am led ment for any thing but their exertions during the war. Those who have made the greatest exertions will have the greatest credit; there fore we are to suppose that justice, in the end, will be done to all parties. It is also very clear to me, that the United States will collect the revenue arising from the proposed funds, and pay it over to the public creditor, with more ease and less expense, under a uniform system, than could be done by the various and different regulations of the several States; but, in proportion as these reasons are cogently impressed on my mind, the objection rises the stronger to the whole system; for, in my opinion, it ought to be defended, with this point granted, that a General Government is of advantage to the people of the United States. I shall detain the committee a very little while in examining how far the proposed scheme is connected with that idea. I think, sir, where to believe, that if the whole revenue of the several States is taken into the power of Congress, it will prove a band to draw us so close together, as not to leave the smallest interstice of separation. There is another consequence which seems to result from this plan, with which my mind does not accord; it is this-that one class of men in the United States are about to bear the whole expense of the late war, and that class is the consumers of foreign articles. This is strictly true, if we except a very trifling revenue indeed, derived from the writers of post letters; and, perhaps, as trifling a one from the excise on the spirits distilled in the United States. Now, it appears to me, that the consumers of imported articles are not the only persons in the community who draw advantages from the late revolution, or from the adoption of this efficient Government; therefore, we ought, as far as we can ascertain, endeavor to lay the burthen . as equally as possible upon the whole community. I know that laying a duty on imports to a certain extent is one of the easiest modes of raising revenue; and that, in general, it will operate most equally; but it does not follow, that because it is the easiest to a certain extent, we are, therefore, to relinquish every other species of taxation, and lay the burthen of the revolution on one class of citizens alone. [FEBRUARY 23, 1790. funds appropriated for the payment of the State debt are neither so ample or punctually paid as funds provided by Virginia or Pennsylvania, the two adjoining States, for the payment of their debts; yet the paper securities of Maryland sell in market for twice the sum than the securities of either of those States. I suppose the paper must be rated at what it sells for in the market; and when men are asked to make their selection as to which they will prefer, they There is another observation which I mean to will forego what brings least, and accept of what make. It does not appear to me that the debts of contributes most; they will be governed by the the particular States are the debts of the United market price of the several kinds of stock; then States. State debts, and debts of the United I infer from hence, that there may be a partial States, are hardly convertible terms; and I adoption of the scheme by the several States, question very much, whether it is strictly with- and individual creditors of the States. It would in our constitutional power to levy taxes and be well to examine the consequences of such an collect duties, except it be to pay the debts of event. I believe the committee will have no the United States. Will it be admitted, that doubt in assenting to this proposition—that Congress can adopt any debts they think pro-whenever the faith of a nation is pledged to pay per, whether they come within the idea of being its just debts, it must perform that promise with debts contracted for the purposes of the Con- good will and alacrity. We have sufficient federation or not? The object expressed in the proof of this by the speedy adoption of several Constitution is simply to pay the debts of the resolutions on this head by this very body. But United States. Can Congress, by their own let us suppose, sir, that the individual creditors authority, saddle the Union with a debt of this of Pennsylvania or Maryland refuse to adopt magnitude, independent of the particular pow- your plan, and the State refuses to notice it; or ers they derive from the Constitution, and then that the majority of the creditors of those States justify the collection of taxes under the general refuse to subscribe to your loan, one of two powers of the Constitution? Suppose the United consequences must arise: either a great part of States were to levy a large sum in taxes, with- the United States, having agreed to adopt the out an object, would this exercise of authority plan of Congress, will remit in their exertions be within the defined powers of the Constitu- to pay their State creditors, and, by that means, tion? Would it be right to say, that we shall force the remaining creditors into a compliance hereafter be largely in debt, but we are not yet with the terms of the scheme, or the States, so; and, therefore, we must collect a great where the creditors do not subscribe, will be quantity of revenue? The scheme of the Se- forced to levy taxes for their individual credicretary proposes either this very thing, or some-tors, and contribute, at the same time, to pay thing extremely analogous. The State debts which we are to provide for are not the debts of the United States, and very possibly may never be. If this is granted to be a principle of our Constitution, it may be a dangerous one. If Congress say they want money for some purpose which they conceive to be salutary to the United States, but which, at the same time, is not a constitutional object of their power, have they a right to levy duties for such purpose? And if they have, where is the limit to which they may not go? Or where is the boundary by which they are restrained? Before this scheme is adopted, it is my opinion that the sense of the several States, and the individual creditors, ought to be obtained. I think material disadvantages may arise unless they are. There are a variety of debts in the several States; their extent is as different as the provision made for their security. The credit of the States is materially different; perhaps in consequence of the amount of their debts, and the means of their payment; not, however, that this is uniformly the case. The value of the debts of the State of Maryland may be different from that of the debts of New York and Pennsylvania. I believe, in Maryland, the the debts thus assumed. Suppose the State of Massachusetts is pleased with the scheme, and thinks it right, but its creditors do not subscribe, will she go on and levy taxes to discharge the debt? Suppose the creditors of Maryland should refuse to subscribe, and Maryland disagree to the scheme: suppose a majority of the creditors and States should reject the scheme, and it fail, then the States who were in favor of adopting it would have to begin to tax again, having lost all this time. Suppose a majority of the States were to adopt the scheme, and a State and its citizens refuse, then this State must pay as much, by external taxes, as Congress are able to collect, and by internal taxes, as the State is able to obtain: all this they must bear without the consolation of thinking it equal. Such a situation must involve this country in serious circumstances. A State, thus circumstanced, would bear its burthen with great pain, and very great impatience. Suppose an individual creditor, in any State, should refuse to subscribe to the Continental loan, the State must go on with its process of taxation to collect the money for this unsubscribed part. Here the expense of taxation would be equal to what it is at present; but its relative proportion, with the sum raised, would be increased much to the dissatisfaction of the citizens. In this case, that ease in taxation, which has been contemplated, would not take effect. These are the reflections which have arisen in my mind, and really I did not think that we should have got so far on with this business by this time; we have been expeditious indeed; it will not be doubted that we are wise politicians, yet it must be granted we are bold ones. We have, without the assistance of any part of the community, except an officer of Government, and the information we have obtained from each other, adopted resolutions affecting the dearest interests of the people, without affording them an opportunity of letting us know their sentiments. Shall we go on to new-model all the revenues throughout the United States, to alter the disposition of every State's scheme of finance, without consulting them; giving cause of chagrin to the State creditors, and of alarm to our constituents and their State Governments generally? It appears to me to be a hazardous thing. I will make one observation more, which the last has suggested. The community might have adopted, willingly, had they been consulted, a measure which they may object to and oppose, if decided upon without their knowledge. (H. OF R. would be sufficiently covered in the gross demand which they all would have against the United States, when their accounts should be finally made up. To the second, he answered, that Congress could not assume the State debts without assuming, at the same time, those very means which otherwise the States would employ in extinguishing their debts, were they left on their own hand; and that, in this case, it would be as easy to satisfy both species of debt as one. On the third objection he observed, that if a condition of absolute dependency on the General Government was to follow this measure, it would be only the anticipation of a necessary event. For, on the final settlement of accounts, whatever debts were then due to the States, must be assumed, and in like manner provided for by Congress, in taking the taxation out of the hands of the States. Other objections, and perhaps material, might occur; but he saw none at that time that militated forcibly against the measure. Mr. SHERMAN.-It appears to me, that the objections of the gentleman from Maryland, are not sufficient to prevent our adoption of this proposition. His first objection is, that it will give a greater degree of importance to the General Government, while it will lessen the conI do not see, nor has it been proved to the sequence of the State Governments. Now, I satisfaction of my mind, that there is any occa-do not believe it will have that effect. I consision for using expedition in completing any part of the funding plan. I have not changed that sentiment which I mentioned in the beginning. If we lay and collect taxes, we shall be in a situation to pay our debts; but a funding scheme will not make us a farthing the richer, however elevated on the scale of nations it may make us appear. We often adopt propositions with the firmest reliance on their truth and propriety; yet some thought and communication, with a little experience, will induce us to wonder how we ever could have conceived them right. These are the suggestions of my mind, so far as I have examined the subject, and it appears to be a step which we cannot take, at this time, with any prospect of advantage. der both Governments as standing on the broad basis of the people; they were both instituted by them, for their general and particular good. The Representatives in Congress draw their authority from the same source as the State Legislatures; they are both of thein elected by the people at large, the one to manage their national concerns, and the other their domestic, which they find can be better done, by being divided into lesser communities, than the whole Union; but to effect the greater concerns, they have confederated; therefore, every thing which strengthens the Federal Government, and enables it to answer the end for which it was instituted, will be a desirable object with the people. It is well known, we can extend our authority Mr. CLYMER said, that although the assump- no further than to the bounds the people have tion of the State debts appeared to him a mea- assigned. If we abuse this power, doubtless, sure of a federal complexion, and necessary to the people will send others to correct our faults, the preservation of the Union, yet it required or, if necessary, alter the system; but we have considerable caution. At present no very im- every reason to believe the people will be pleasportant objection occurred to him against it. ed with it, and none suppose that the State GoThose mentioned by the gentleman from Mary-vernments will object. They are the supreme land, he thought, admitted of an easy answer; | they were principally, That we were required to assume the unauthorized, as well as the authorized State debts; which never could be a charge against the United States: That it would be difficult to find the means of satisfying both the Federal and State debts consolidated: And that if the power of providing for their own debts was taken from the States, they would be brought to too great a dependency on the United States. To the first, he answered, that what we assumed of the unauthorized debts of the States power, within their own jurisdiction, and they will have authority over the States, in all cases, not given to the General Government, notwithstanding the assumption of the State debts. If it was a question between two different countries, and we were going to give the British Parliament power, by assuming our debts, of levying what taxes they thought proper, and the people of America were to have no voice in the appointment of the officers, who were to administer the affairs of the Government, the experiment would be dangerous to this country; but as the business is to be conducted by our |