The Life of George Washington, Vol. 4 / Commander in Chief of the American Forces During the War / which Established the Independence of his Country and First / President of the United States

by John Marshall

The argument was ably supported on both sides, was long, animated, and interesting. At length the question was put, and the amendment was rejected by a great majority.

This discussion deeply engaged the public attention. The proposition was new and interesting. That the debt ought to be diminished for the public advantage, was an opinion which had frequently been advanced, and was maintained by many. But a reduction from the claims of its present holders for the benefit of those who had sold their rights, was a measure which saved nothing to the public purse, and was therefore recommended only by considerations, the operation of which can never be very extensive. Against it were arranged all who had made purchases, and a great majority of those who conceived that sound policy and honest dealing require a literal observance of public contracts.

Although the decision of congress against a discrimination in favour of the original creditor produced no considerable sensation, the determination on that part of the secretary's report which was the succeeding subject of deliberation, affecting political interests and powers which are never to be approached without danger, seemed to unchain all those fierce passions which a high respect for the government and for those who administered it, had in a great measure restrained.

The manner in which the several states entered into and conducted the war of the revolution, will be recollected. Acting in some respects separately, and in others conjointly, for the attainment of a common object, their resources were exerted, sometimes under the authority of congress, sometimes under the authority of the local government, to repel the enemy wherever he appeared. The debt incurred in support of the war was therefore, in the first instance, contracted partly by the continent, and partly by the states. When the system of requisitions was adopted, the transactions of the union were carried on, almost entirely, through the agency of the states; and when the measure of compensating the army for the depreciation of their pay became necessary, this burden, under the recommendation of congress, was assumed by the respective states. Some had funded this debt, and paid the interest upon it. Others had made no provision for the interest; but all, by taxes, paper money, or purchase, had, in some measure, reduced the principal. In their exertions some degree of inequality had obtained; and they looked anxiously to a settlement of accounts, for the ascertainment of claims which each supposed itself to have upon the union. Measures to effect this object had been taken by the former government; but they were slow in their progress, and intrinsic difficulties were found in the thing itself, not easily to be overcome.

The secretary of the treasury proposed to assume these debts, and to fund them in common with that which continued to be the proper debt of the union.

The resolution which comprehended this principle of the report, was vigorously opposed.

It was contended that the general government would acquire an undue influence, and that the state governments would be annihilated by the measure. Not only would all the influence of the public creditors be thrown into the scale of the former, but it would absorb all the powers of taxation, and leave to the latter only the shadow of a government. This would probably terminate in rendering the state governments useless, and would destroy the system so recently established. The union, it was said, had been compared to a rope of sand; but gentlemen were cautioned not to push things to the opposite extreme. The attempt to strengthen it might be unsuccessful, and the cord might be strained until it should break.

The constitutional authority of the federal government to assume the debts of the states was questioned. Its powers, it was said, were specified, and this was not among them.

The policy of the measure, as it affected merely the government of the union, was controverted, and its justice was arraigned.

On the ground of policy it was objected, that the assumption would impose on the United States a burden, the weight of which was unascertained, and which would require an extension of taxation beyond the limits which prudence would prescribe. An attempt to raise the impost would be dangerous; and the excise added to it would not produce funds adequate to the object. A tax on real estate must be resorted to, objections to which had been made in every part of the union. It would be more adviseable to leave this source of revenue untouched in the hands of the state governments, who could apply to it with more facility, with a better understanding of the subject, and with less dissatisfaction to individuals, than could possibly be done by the government of the United States.