HAMILTON TO GOV. CLINTON.
Philadelphia, May 14, 1783.
Sir:
The President of Congress will of course have transmitted to your Excellency, the plan lately adopted by Congress for funding the public debt. This plan was framed to accommodate it to the objections of some of the States; but this spirit of accommodation will only serve to render it less efficient, without making it more palatable. The opposition of the State of Rhode Island, for instance, is chiefly founded upon these two considerations: the merchants are opposed to any revenue from trade; and the State, depending almost wholly on commerce, wants to have credit for the amount of the duties.
Persuaded that the plan now proposed will have little more chance of success than a better one; and that, if agreed to by all the States, it will, in a great measure, fail in the execution, it received my negative. My principal objections were,
Firstly: That it does not designate the funds (except the impost) on which the whole interest is to arise; and by which (selecting the capital articles of visible property) the collection would have been easy, the funds productive, and necessarily increasing with the increase of the country.
Secondly: That the duration of the funds is not coextensive with the debt, but limited to twenty-five years; though there is a moral certainty, that, in that period, the principal will not, by the present provision, be fairly extinguished.
Thirdly: That the nomination and appointment of the collectors of the revenue are to reside in each State, instead of, at least the nomination, being in the United States; the consequence of which will be, that those States which have little interest in the funds, by having a small share of the public debt due to their own citizens, will take care to appoint such persons as are least likely to collect the revenue.
The evils resulting from these defects, will be, that in many instances the objects of the revenues will be improperly chosen, and will consist of a multitude of little articles, which will, on experiment, prove insufficient; that for want of a vigorous collection in each State, the revenue will be unproductive in many, and will fall chiefly upon those States which are governed by most liberal principles; that for want of an adequate security, the evidences of the public debt, will not be transferable for any thing like their value; that this not admitting an incorporation of the creditors in the nature of Banks, will deprive the public of the benefit of an increased circulation, and of course will disable the people from paying the taxes for want of a sufficient medium.
I shall be happy to be mistaken in my apprehensions; but the experiment must determine.
I hope our State will consent to the plan proposed; because it is her interest, at all events, to promote the payment of the public debt on Continental funds (independent of the general considerations of union and propriety).
I am much mistaken if the debts due from the United States to the citizens of the State of New-York, do not considerably exceed its proportion of the necessary funds: of course it has an immediate interest that there should be a Continental provision for them. But there are superior motives that ought to operate in every State; the obligations of national faith, honor, and reputation.
Individuals have been already too long sacrificed to public convenience. It will be shocking, and indeed an eternal reproach to this country, if we begin the peaceable enjoyment of our independence by a violation of all the principles of honesty and true policy.
It is worthy of remark, that at least four-fifths of the domestic debt, are due to the citizens of the States (from Pennsylvania inclusively) northward.
I have the honor to be, Sir,
Your most obedient servant,
A. Hamilton.
P. S. It is particularly interesting that the State should have a representation here. Not only many matters are depending which require a full representation in Congress (and there is now a thin one), but those matters are of a nature so particularly interesting to our State, that we ought not to be without a voice in them. I wish two other gentlemen of the delegation may appear as soon as possible; for it would be very injurious for me to remain much longer here. Having no future views in public life, I owe it to myself, without delay to enter upon the care of my private concerns in earnest.
A. H.
To His Excellency Governor Clinton.