After noticing various objects which would require the attention of the legislature, the President addressed himself particularly to the house of representatives, and said, "I entertain a strong hope that the state of the national finances is now sufficiently matured to enable you to enter upon a systematic and effectual arrangement for the regular redemption and discharge of the public debt, according to the right which has been reserved to the government. No measure can be more desirable, whether viewed with an eye to its intrinsic importance, or to the general sentiments and wish of the nation."

The addresses of the two houses in answer to the speech, were, as usual, respectful and affectionate. The several subjects recommended to the attention of congress were noticed either in general terms, or in a manner to indicate a coincidence of sentiment between the legislative and executive departments. The turbulent spirit which had manifested itself in certain parts of the union was mentioned by both houses with a just degree of censure, and the measures adopted by the President, as well as the resolution he expressed to compel obedience to the laws, were approved; and the house of representatives, in the most unqualified terms, declared opinions in favour of systematic and effectual arrangements for discharging the public debt. But the subsequent proceedings of the legislature did not fulfil the expectations excited by this auspicious commencement of the session.

At an early day, in a committee of the whole house on the President's speech, Mr. Fitzsimmons moved "that measures for the reduction of so much of the public debt as the United States have a right to redeem, ought to be adopted: and that the secretary of the treasury be directed to report a plan for that purpose."

This motion was objected to by Mr. Madison as being premature. The state of the finances, he thought, was not sufficiently understood to authorize the adoption of the measure it contemplated. The debate however soon took a different direction. That part of the resolution which proposed a reference to the secretary of the treasury was particularly opposed; and an ardent discussion ensued, in which, without much essential variation, the arguments which had before been urged on the same subject were again employed. After a vehement contest, the motion to amend the resolution by striking out the proposed reference was overruled, and it was carried in its original form.

1793

In obedience to this order, the secretary made a report, in which he proposed a plan for the annual redemption of that portion of the debt, the payment of which was warranted by the contract between the United States and their creditors. But the expenses of the Indian war rendering it, in his opinion, unsafe to rest absolutely on the existing revenue, he proposed to extend the internal taxes to pleasure horses, or pleasure carriages, as the legislature might deem most eligible. The consideration of this report was deferred on various pretexts; and a motion was made to reduce the military establishment. The debate on this subject was peculiarly earnest; and, in its progress, the mode of conducting the Indian war, the relative merits and expensiveness of militia and of regular troops, and the danger to liberty from standing armies, were elaborately discussed. It was not until the fourth of January that the motion was rejected. While that question remained undecided, the report of the secretary was unavoidably postponed, because, on its determination would depend, in the opinion of many, the necessity of additional taxes. It would seem not improbable that the opponents of the American system of finances, who constituted rather a minority of the present congress, but who indulged sanguine hopes of becoming the majority in the next, were desirous of referring every question relating to the treasury department to the succeeding legislature, in which there would be a more full representation of the people. Whatever might be the operating motives for delay, neither the extension of the law imposing a duty on spirits distilled within the United States to the territory north-west of the river Ohio, nor the plan for redeeming the public debt, which was earnestly pressed by the administration, could be carried through the present congress. Those who claimed the favour and confidence of the people as a just reward for their general attachment to liberty, and especially for their watchfulness to prevent every augmentation of debt, were found in opposition to a system for its diminution, which was urged by men who were incessantly charged with entertaining designs for its excessive accumulation, in order to render it the corrupt instrument of executive influence. It might be expected that the public attention would be attracted to such a circumstance. But when party passions are highly inflamed, reason itself submits to their control, and becomes the instrument of their will. The assertion that the existing revenues, if not prodigally or corruptly wasted, were sufficient for the objects contemplated by the President in his speech, would constitute an ample apology for the impediments thrown in the way of a system which could not be directly disapproved, and would justify a continuance of the charge that the supporters of the fiscal system were friends to the augmentation of the public debt.

Soon after the motion for the reduction of the military establishment was disposed of, another subject was introduced, which effectually postponed, for the present session, every measure connected with the finances of the nation.

An act of congress, which passed on the fourth of August, 1790, authorized the President to cause to be borrowed any sum not exceeding twelve millions of dollars, to be applied in payment of the foreign debt of the United States.

A subsequent act, which passed on the 12th of the same month, authorized another loan not exceeding two millions, to be applied, in aid of the sinking fund, towards the extinguishment of the domestic debt.

A power to make these loans was delegated by the President to the secretary of the treasury by a general commission referring to the acts. This commission was accompanied by written instructions, directing the payment of such parts of the foreign debt as should become due at the end of the year 1791; but leaving the secretary, with respect to the residue, to be regulated by the interests of the United States.