bond, under seal, unless it was under a particular statute, or for the performance of an unlawful thing, would not be a plea. The gentleman has also adduced the case of the paper money, to show that we have a right to interfere, and modify the contract. Now, in order to understand this matter, we ought to consider that Government was contracting with an individual; that the individual, as a party, had as much to say in the contract as the purchaser. If I come to you, and offer to purchase of you a bushel of wheat, the value of which is one dollar, and I offer to give you my note for it at that price, you tell me, no, I will not take it, for your credit is not equal to it; you shall give me twenty dollars, because that, on your credit, is no more than equal to one dollar; if I give you the price that you hold the wheat at, is it not settled between the contracting parties, that the note for twenty dollars is, in fact, no more than one dollar? And having been fixed, by mutual consent, to be of that value, there is no impropriety in its being declared so by either. If the Government, in such a case, finds that it will work an evil of the most enormous magnitude, to discharge those notes which have been paid out, not at twenty for one, but at one hundred for one, at their nominal value, they are not to be blamed for scaling them. Now, are these two cases alike? The certificates that were issued were given for the real specie value of the commodity, or service, or they were on a liquidation of a depreciated currency they had before received. What pretext can there be set up for a re-investigation of claims so certainly decided on? The money that was due, as I have supposed, to the person for his bushel of wheat, might have been paid off in Continental bills of credit, when the depreciation was at forty, fifty, or a hundred for one; but, in this case, Government would have done an act of injustice, they would have paid the man but half a dollar instead of a whole one. But the Government acted more generously, they agreed to give the value at the time the supplies were furnished, or the loans made. Now, can this be brought as a precedent why we should abridge the claims of the holders of the public securities? We cannot interfere, unless it arises from national necessity, that the community would be injured by doing them justice. [FEBRUARY, 1790. low the example of other nations, has told us that the Parliament of England has razed houses, and appropriated the property of individuals to the public service. This is all true, sir; but the Parliament were no parties to the contract by which those houses or lands were held; so have we a right to bind the citizens, in cases where they all stand equal, and where we ourselves shall not be particularly the gainers. His last argument was, requiring us to show why this contract between the public creditors and the United States was different in its qualities from every other? By every other, I presume, he meant the cases referred to, respecting the Parliament of Britain and the paper money of America. I think I stated this sufficiently clear be fore; they are widely different, because Congress is a party to the contract, in the other they were not. So, on the principle of honor, we are bound to fulfil what we have engaged to perform; en the principles of justice, we are bound to pay what we owe; and, on principles of policy, we ought to discharge the interest of our present debt, in order that when public exigencies require it, we may borrow money with greater facility. We have no right, by our conduct, to put it out of the power of the United States hereafter to defead themselves, and unless we support the credit of America by a just performance of our engage ments, we shall depreciate her credit to so low a state, as to prevent her from hereafter obtaining any future loans. Mr. FITZSIMONS.-I apprehend my colleague has taken for granted, what has not appeared in evidence, that there is a great part of the domes tic debt unliquidated. I doubt the truth of such an opinion. We are not authorized to entertain it from any thing contained in the report of the Secretary of the Treasury. The unliquidated debt therein spoken of, amounts to but two millions of dollars, and that chiefly arises from the old Continental money, which is not yet brought into the Treasury, and this sum is so small, that I think there is little danger, that in making our provision now for the payment of the interest, we shall so far exhaust the resources of our country as to disable us from making provision for the re mainder, when it is ascertained; indeed, the accounts which are not liquidated, appear to me to But is there any gentleman on this floor, who be very trifling; because the two millions of dol will presume to say, that such a necessity exists? lars, mentioned in the report, are the greater part The public ability is confessedly equal to the de- of them supposed to arise from seventy-eight milmands of its creditors; yet, from motives of con-lions of the old Continental dollars, yet outstandvenience and expediency, it may be proper to at- ing; and these, at forty dollars for one, amount to tempt a modification of the national debt, with pretty nearly that sum. the consent of the creditors; and if this can be obtained, will any gentleman oppose it upon principles of honor, justice, or policy? On such an occasion, it is prudent to provide a variety of terms, because different offers may meet the approbation of different minds. This variety, I take it, is held out in the report of the Secretary; and the debt reloaned, in either way, will be as much the child of consent, as the original engagement at the first contract. The gentleman, as an inducement for us to fol 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 Seeretary 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 Gener al 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 one 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. STONE thought, if we made no effort to pay the debt until it was wholly liquidated, it would be a work of time, and that it would be unjust to refuse to settle with those who had settled their accounts, because there were some of our creditors who had hitherto neglected to bring them in. Mr. SEDGWICK feared the consequences, were the present Congress to disperse without providing adequate funds for the support of public credit; he believed every gentleman's mind was impressed with the same idea; that, therefore, a procrastination upon the principle of liquidation would be extremely injurious. Mr. WHITE did not understand the full extent of the amendment, nor of the original proposition; he wished the committee to investigate the subject very fully before they came to a decision, because much depended on doing what is right. [H.OF R. 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. The memorial of Robert Morris being read a second time, it was ordered to be entered on the Journal, and that the subject-matter of it be referred to a select committee, composed of Messrs. MADISON, SEDGWICK, and SHERMAN. 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 is 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 six-pence. 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 six-pence, 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 six-pence 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 six-pence 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; and 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. Chairman, I do not lead, nor have I vanity enough to be the champion of a party, I disdain all such ideas; what I now advance, I throw out merely for consideration. I am willing always to receive information. Let me be convinced of the existence of a contract, before I agree that provision ought to be made upon the principles of there being one. But suppose for a moment that such a contract exists, and that it is inviolable, let us look at the first contractors, and see how it will operate in point of justice and equity. Those heroes who compounded their claims for the oneeighth, (for this was the value at which they received and passed the evidences of the debt,) who lost the other seven-eighths, and who are still willing it should be sunk, from whom we do not hear a word of clamor, they have added this to their other sacrifices; but there is a clamor, and from whence comes it? It comes from those who are now possessed of the Government paper; they are not content with passing it to the next hand for the same value at which they received it; they must have a profit eightfold, or they will not be satisfied. But how is this to be paid them? As certificates have no intrinsic value, the owners of them have no right to put their hands into the pockets of individuals, and extract money for them. The Government has the power; but the Government will not wrong one individual to do more than justice to another. Will they even wrong an individual to do strict justice to another? They ought not. But by the plan proposed, the soldier who received two shillings and six-pence for a security of the nominal value of twenty shillings, will be subject to the payment of five shillings towards the redemption of that evidence for which he got but half a crown. [FEBRUARY, 1790. ments destroy the position; for it is a notorious fact, that for the first paper money that was issued. the public received the value of gold and silver. National policy and equity, when by mutual consent they had depreciated, properly induced Congress afterwards to say, that they should pass at a lower rate. Had not that policy been adopted, the community must have been inevitably ruined; the loss operated as a public tax, and injured no person, for it lost its value in the hands of every one, the same as if it had been contributed in payment for the support of Government. Another reason urges me to adopt this principle rather than the one contained in the plan. When the amount of the public debt is ascertained, I could not pretend to cut the proprietor short of six per cent. interest. I think the same interest ought to be given which was offered, and which induced the holder to vest his money in this way. It would be doing more justice to him to abridge the principle, and to give him the full interest, than it would be to reverse the case. That part of the amendment which is supposed to look like a delay in providing permanent funds for the discharge of the debt, is supported on a variety of considerations. I do not think we can go into funding the public debt until we know what it amounts to. One part we know is liquidated; but we do not know what the real value of that part is. It is called two millions of dol lars; but there are seventy-eight millions of old Continental dollars still in circulation. A question will arise, if we determine that Government can make no alteration in the value of the paper she has issued, and plighted the public faith for the redemption of, whether the real value of these seventy-eight millions of dollars is, according to the nominal value, or as the Secretary supposes them to be, two millions only? On this point, I could raise this inquiry, what was the idea of the Secretary of the Treasury when he used those words? Did he advert to the scale of depreciation which was fixed by the late Congress at forty for one? It is probable he did. It has been said that a public acknowledgement of money due on the balance of account is like a bond. Though I am not able to discover in what this likeness consists, yet if final settlements par take of the nature of bonds, I presume it will be admitted that paper bills are, to all intents and purposes, good notes of hand; no plea in justice or equity can be set up against the payment one, that would not be admitted against the pay ment of the other. If at any time the public ne cessities have compelled the Government to declare them depreciated, I presume, when those ne cessities no longer exist, that they ought to return to their first value, and have the same force as if they had been unaffected by Legislative interfer ence. of What would be the consequence of funding the public debt under these impressions? The From what I have said on this point, it will ap- inconsiderable two millions would be found to pear that I am of opinion, that a new scale of de- amount to eighty millions. This consideration to certificates as former scales applied to paper and deliberate in weighing the present question. The doctrine held forth that the present posses money. Nor will their being deemed final settle FEBRUARY, 1790.] Public Credit. [H. OF R. sor stands in the place of the original holder, is abundant. Those suggested in the report of the what I do not perfectly comprehend; I think there Secretary of the Treasury, are but an inconsideris a difference. There would be a difference be-able number of the branches of revenue to which fore a National Court of Equity; that Court I now bring you before-and one distinction I ground on this simple consideration, that you cannot do what is termed justice to the present holder without doing an injury to the original holder; for out of his pocket must come more than he received for what the nation owed him. This certainly is not the part which a Legislature ought to act, who has an equal care of the whole, when we have it in our power to do strict justice to the one, without doing an injury to the other. Shall I be told, that there are many of those characters, whom I have spoken so highly of, veteran soldiers and brave officers, who hold sentiments different from those I am now advocating? I believe there are men who were once brave soldiers, who are now become speculators. I do not think it a crime that a man should speculate in the funds; but when we hear his opinion and attend to his language, we are led to believe, that it is not the opinion or the language of the soldier, but those of the speculator; consequently, they ought to have no weight on our minds, in determining a question in which they are interested. our power extends. I would not touch the funds that present themselves to my mind, unless they were necessary; but I am pretty confident there will be enough left, after making provision for the part of the debt which is ascertained, so that we have little occasion to fear that our present efforts will prevent us from making future provision for that part of the debt which is now said to be unliquidated. This circumstance of our ability greatly enhances the obligation to do justice; the only object of the motion, I conceive, is delay; which is a principle contrary to what has been established by this House, in their vote of last session, as well as their answer to the President during the present. With respect to what was said of the public securities being originally issued, and received as worth but 2s. 6d. in the pound, I must totally dif fer with my colleague. The contracts for which they were given as an acknowledgement, were, many of them, performed three, four, or five years, previous to the time of their being received, and then they were not accepted by the soldiers, willingly, as an equivalent for their services; but Congress forced them to accept of them as the only alternative. Neither did Congress consider that paper as a discharge of the debt; they only gave it as an evidence of the amount. The soldiers parted with them, to be sure, for what they could get, and here, I believe, they were frequently hardly delt with. I always reprobated the idea of purchasing the soldier's rights for such trifling considerations as have been generally given; and I would, at the time they were so imposed upon, have cheerfully given my consent that a discrimination should take place; but, now they have changed hands so often, it is impossible to do it without the greatest degree of injustice if the Government had the power: and this leads me to consider another principle, mentioned by my colleague, that we are arbiters in the case; so far from it, Mr. Chairman, I consider that we are parties, and that one party has no right to change a contract without the consent of the other. We may attempt to modify the interest and mode of payment; but before either of these measures can take effect, the consent of the other party must be obtained. In Great Britain, the principle has been three times tried within a century. In the year 1784, the Chancellor of the Exchequer attempted to modify the unfunded navy and ordinance debt; but, after bringing a bill into Parliament for that purpose, the opposition obliged him to relinquish the measure. Mr. HARTLEY.-I am opposed to the amendment, not only on account of the mode of expression used in it, but also on account of the very reasons urged by the gentleman in support of it, My colleague considers his principles right, and supposes those who differ from him in sentiment, to entertain different ones; I happen to be one of those who entertain a different sentiment from him; I am also one of those to whom he has alluded, having been in the late army, though I never speculated in public securities. As I differ so much in sentiment from him, and would not willingly give a silent vote on the occasion, I beg leave to state my reasons for it. At our last session we gave assurances to the public, that we would take up the subject of providing the means for the support of public credit, by providing the means of paying our public debts. It was well known then to every gentleman in this House, that many of the certificates were in the hands of those who had purchased them; yet, I believe the idea of making a discrimination never entered into the contemplation of any gentleman, at least nothing was said that indicated such an intention; nor was it suggested that before this could be done, a reliquidation ought to take place. If that principle be just, and must be carried into execution, it will take many years before we can complete our promise. I grant that we ought to be certain of the extent of our funds, before we undertake to burden them with the amount suggested in the As to the policy of funding, I differ in opinion report of the Secretary. Every gentleman can from the gentleman from Georgia, who has supform some opinion, by contemplating the mate- posed it to be improper and dangerous to introrials; if we discover that our means are insuffi- duce such a scheme into a republic. Funding, cient, let us make it known to the world, and en-like every human good, has its certain alloy of deavor at a composition upon true principles; but I have not heard it asserted that our means are insufficient. I believe, if we compare them with those of other countries, we shall find them very evil; abuses may be committed; undeserving individuals may obtain a living by acts practised upon their fellow-men; but these things cannot be avoided in any human system. Funding has carried Great Britain, apparently, to the highest degree of national prosperity; how has she extended her commerce and her manufactures, by means of her paper credit? To what a reputable rank has she raised her character in the scale of nations? compare her with herself when she pursued a different policy; when she collected her revenue upon the spur of the occasion. Look at Frederick the Second, King of Prussia; that Prince accumulated in his coffers specie to the amount of one hundred millions of crowns; but his people were poor and wretched, unable to have assisted him in point of revenue, in case any accident had happened. A capital thus collected was depriving his subjects of the means of promoting productive industry, and leaving them to languish their lives away in military indolence. A nation that has it in her power punctually to pay the interest of the debts she contracts, may always be supplied, in cases of exigency, with what is sufficient for her service, without diminishing the stock of her industrious citizens. Mr. SEDGWICK professed himself to be totally disinterested on the subject of discrimination. He was a representative of a part of the United States in which there were very few of these certificates to be found; he believed, therefore, that it would be their particular interest, that as little money should be drawn for the payment of the national debt as was consistent with justice. He felt no difficulty in declaring, that the Government possessed the power to interfere with contracts, public and private. Gentlemen will concur with this idea, if they consider, that the great object of society is self-preservation, and that, consequently, every measure that has a tendency to destroy the social compact is in the power of Government to abrogate and set aside. But it should be assumed as a principle, that this interference of the Government should never take place, but when such are the circumstances of the community, that the mind is convinced that without the measure the public welfare would be endangered. Here, then, arises the question: are we in such circumstances at present as to render an interference, without the consent of the creditors, consistent with the well-being of the society? If gentlemen will demonstrate this to me, I shall concur with them in the idea, that we ought to pursue that line of conduct which we have a precedent for under the old Congress; but if we are not in that situation, we have no right to meddle in the business. The great point, then, to be settled is, what is our capacity of fulfilling the existing engagements of the country to its creditors? On this question there may be a variety of opinions. I am prepared to acquiesce in the decision that shall be made after a due investigation of our resources. But, for myself, I do believe any further procrastination of the business will not only increase the difficulty of a final determination, but will be mischievous and destructive of the general welfare. Nay, I do not know but it will tend to the destruction of the Government itself, by destroying that energy on which all is to depend. I shall not recapitulate the circumstances which [FEBRUARY, 1790. have led me to form this conclusion; but if gentlemen will consider the fervor of the public mind on this subject, the impressions that have been made, and what they are still likely to receive from this and other causes, they cannot wonder at my apprehension. The pernicious consequences of speculation will, I fear, be increased by any unnecessary delay; for although that business is of course connected with a transferable debt, and that debt derives its value from it in a great degree, and though the public credit is thereby promoted, yet, when persons are seduced from more useful occupations, to divert their stock, and commence speculating in the public funds, the protective industry of the country must be checked, and great injury be sustained by the Commonwealth. I would just suggest another idea, with respect to the subject of discrimination. I suppose that it is not contemplated by any gentleman, to make provision for the payment of the public debt, upon the precise terms it was contracted. I have heard no gentleman say, that it would be proper, under all circumstances, to go into such a measure. I suppose the only difference amongst us is, whether we do it by a violent interference of the Govern ment, or whether we shall modify it with the consent of the creditors? I am led to believe. that the latter mode will be the only proper one; and from the public creditors being a set of enlightened men, I am led to expect that they will accept of our reasonable proposals. They would not wish to receive from us engagements beyond what the Government is able to discharge, the value of their certificates will depend upon the public opinion, and the public opinion will depend upon our ability to discharge them; they will contemplate all these consequences, and their concurrence may be expected with certainty. Mr. BOUDINOT.-I am convinced that the prin ciples laid down by the gentleman from Pennsyl vania, 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 loth 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 wil 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 |