Sec. 50. There is an expression in your letter, page 7, that "British creditors have not been countenanced or supported, either by the respective Legislatures, or by the State courts, in their endeavors to recover the full value of debts contracted antecedently to the treaty of peace." And again, in p. 8, "In many of the States, the subjects of the crown in endeavoring to obtain the restitution of their forfeited estates and property, have been treated with indignity." From which an inference might be drawn, which I am sure you did not intend, to wit: that the creditors have been deterred from resorting to the courts by popular tumults, and not protected by the laws of the country. I recollect to have heard of one or two attempts, by popular collections, to deter the prosecution of British claims. One of these is mentioned in No. 49. But these were immediately on the close of the war, while its passions had not yet had time to subside, and while the ashes of our houses were still smoking. Since that, say for many years past, nothing like popular interposition, on this subject, has been heard of in any part of our land. There is no country, which is not sometimes subject to irregular interpositions of the People. There is no country able, at all times, to punish them. There is no country which has less of this to reproach itself with, than the United States, nor any, where the laws have more regular course, or are more habitually and cheerfully acquiesced in. Confident that your own observation and information will have satisfied you of this truth, I rely that the inference was not intended, which seems to result from these expressions.

Sec. 51. Some notice is to be taken, as to the great deficiencies in collection urged on behalf of the British merchants. The course of our commerce with Great Britain was ever for the merchant there to give his correspondent here a year's credit; so that we were regularly indebted from a year to a year and a half's amount of our exports. It is the opinion of judicious merchants, that it never exceeded the latter term, and that it did not exceed the former at the commencement of the war. Let the holders then of this debt be classed into, 1st. Those who were insolvent at that time. 2d. Those solvent then, who became insolvent during the operations of the war—a numerous class. 3d. Those solvent at the close of the war, but insolvent now. 4th. Those solvent at the close of the war, who have since paid or settled satisfactorily with their creditors—a numerous class also. 5th. Those solvent then and now, who have neither paid, nor made satisfactory arrangements with their creditors. This last class, the only one now in question, is little numerous, and the amount of their debts but a moderate proportion of the aggregate which was due at the commencement of the war; insomuch, that it is the opinion, that we do not owe to Great Britain, at this moment, of separate debts, old and new, more than a year, or a year and a quarter's exports, the ordinary amount of the debt resulting from the common course of dealings.

Sec. 52. In drawing a comparison between the proceedings of Great Britain and the United States, you say, page 35, "The conduct of Great Britain, in all these respects, has been widely different from that which has been observed by the United States. In the courts of law of the former country, the citizens of the United States have experienced, without exception, the same protection and impartial distribution of justice, as the subjects of the crown." No nation can answer for perfect exactitude of proceedings in all their inferior courts. It suffices to provide a supreme judicature, where all error and partiality will be ultimately corrected. With this qualification, we have heretofore been in the habit of considering the administration of justice in Great Britain as extremely pure. With the same qualification, we have no fear to risk everything which a nation holds dear, on the assertion, that the administration of justice here will be found equally pure. When the citizens of either party complain of the judiciary proceedings of the other, they naturally present but one side of the case to view, and are, therefore, to be listened to with caution. Numerous condemnations have taken place in your courts of vessels taken from us after the expirations of the terms of one and two months stipulated in the armistice. The State of Maryland has been making ineffectual efforts, for nine years, to recover a sum of £55,000 sterling, lodged in the bank of England previous to the war. A judge of the King's bench lately declared, in the case of Greene, an American citizen, v. Buchanan and Charnock, British subjects, that a citizen of the United States, who had delivered £43,000 sterling worth of East India goods to a British subject at Ostend, receiving only £18,000 in part payment, is not entitled to maintain an action for the balance in a court of Great Britain, though his debtor is found there, is in custody of the court, and acknowledges the fact. These cases appear strong to us. If your judges have done wrong in them, we expect redress. If right, we expect explanations. Some of them have already been laid before your court. The others will be so in due time. These, and such as these, are the smaller matters between the two nations, which, in my letter of December 15th, I had the honor to intimate, that it would be better to refer for settlement through the ordinary channel of our ministers, than embarrass the present important discussions with them. Such cases will be constantly produced by a collision of interests in the dealings of individuals, and will be easily adjusted by a readiness to do right on both sides, regardless of party.

Sec. 53. III. It is made an objection to the proceedings of our legislative and judiciary bodies, that they have refused to allow interest to run on debts during the course of the war. The decision of the right to this rests with the judiciary alone, neither the Legislative nor the Executive having any authority to intermeddle.

The administration of justice is a branch of the sovereignty over a country, and belongs exclusively to the nation inhabiting it. No foreign power can pretend to participate in their jurisdiction, or that their citizens received there are not subject to it. When a cause has been adjudged according to the rules and forms of the country, its justice ought to be presumed. Even error in the highest court which has been provided as the last means of correcting the errors of others, and whose decrees are, therefore, subject to no further revisal, is one of those inconveniences flowing from the imperfection of our faculties, to which every society must submit; because there must be somewhere a last resort, wherein contestations may end. Multiply bodies of revisal as you please, their number must still be finite, and they must finish in the hands of fallible men as judges. If the error be evident, palpable, [16]et in re minime dubiâ, it then, indeed, assumes another form; it excites presumption that it was not mere error, but premeditated wrong; and the foreigner, as well as native, suffering by the wrong, may reasonably complain, as for a wrong committed in any other way. In such case, there being no redress in the ordinary forms of the country, a foreign prince may listen to complaint from his subjects injured by the adjudication, may inquire into its principles to prove their criminality, and, according to the magnitude of the wrong, take his measures of redress by reprisal, or by a refusal of right on his part. If the denial of interest, in our case, be justified by law, or even if it be against law, but not in that gross, evident, and palpable degree, which proves it to flow from the wickedness of the heart, and not error of the head in the judges, then is it no cause for just complaint, much less for a refusal of right, or self-redress in any other way. The reasons on which the denial of interest is grounded shall be stated summarily, yet sufficiently to justify the integrity of the judge, and even to produce a presumption that they might be extended to that of his science also, were that material to the present object.

Sec. 54. The treaty is the text of the law in the present case, and its words are, that there shall be no lawful impediment to the recovery of bona fide debts. Nothing is said of interest on these debts; and the sole question is, whether, where a debt is given, interest thereon flows from the general principles of the law? Interest is not a part of the debt, but something added to the debt by way of damage for the detention of it. This is the definition of the English lawyers themselves, who say, "Interest is recovered by way of damages ratione detentionis debiti."[17] 2 Salk. 622, 623. Formerly, all interest was considered as unlawful, in every country of Europe; it is still so in Roman Catholic countries, and countries little commercial. From this, as a general rule, a few special cases are excepted. In France, particularly, the exceptions are those of minors, marriage portions, and money, the price of lands. So thoroughly do their laws condemn the allowance of interest, that a party who has paid it voluntarily, may recover it back again whenever he pleases. Yet this has never been taken up as a gross and flagrant denial of justice, authorizing national complaint against those governments. In England, also, all interest was against law, till the stat. 37 H. 8, c. 9. The growing spirit of commerce, no longer restrained by the principles of the Roman church, then first began to tolerate it. The same causes produced the same effect in Holland, and, perhaps, in some other commercial and Catholic countries. But, even in England, the allowance of interest is not given by express law, but rests on the discretion of judges and juries, as the arbiters of damages. Sometimes the judge has enlarged the interest to 20 per cent. per annum. [1 Chanc. Rep. 57.] In other cases, he fixes it, habitually, one per cent. lower than the legal rate, [2 T. Atk. 343,] and in a multitude of cases he refuses it altogether. As, for instance, no interest is allowed—

And we may add, once for all, that there is no instrument or title to debt, so formal and sacred, as to give a right to interest on it, under all possible circumstances—the words of Lord Mansfield, Dougl. 753, where he says: "That the question was, what was to be the rule for assessing the damage, and that, in this case, the interest ought to be the measure of the damage, the action being for a debt, but that, in a case of another sort, the rule might be different:" his words, Dougl. 376, "That interest might be payable in cases of delay, if a jury, in their discretion, shall think fit to allow it." And the doctrine in Giles v. Hart. 2 Salk. 622, that damages, or interest, are but an accessary to the debt, which may be barred by circumstances, which do not touch the debt itself, suffice to prove that interest is not a part of the debt, neither comprehended in the thing, nor in the term; that words, which pass the debt, do not give interest necessarily; that the interest depends altogether on the discretion of the judges and jurors, who will govern themselves by all existing circumstances, will take the legal interest for the measure of their damages, or more or less, as they think right; will give it from the date of the contract, or from a year after, or deny it altogether, according as the fault or the sufferings of the one or the other party shall dictate. Our laws are, generally, an adoption of yours, and I do not know that any of the States have changed them in this particular. But there is one rule of your and our law, which, while it proves that every title of debt is liable to a disallowance of interest under special circumstances, is so applicable to our case, that I shall cite it as a text, and apply it to the circumstances of our case. It is laid down in Vin. Abr. Interest. c. 7, and 2 Abr. Eq. 5293, and elsewhere, in these words: "Where, by a general and national calamity, nothing is made out of lands which are assigned for payment of interest, it ought not to run on during the time of such calamity." This is exactly the case in question. Can a more general national calamity be conceived, than that universal devastation which took place in many of these States during war? Was it ever more exactly the case anywhere, that nothing was made out of the lands which were to pay the interest? The produce of those lands, for want of the opportunity of exporting it safely, was down to almost nothing in real money, e. g. tobacco was less than a dollar the hundred weight. Imported articles of clothing for consumption were from four to eight times their usual price. A bushel of salt was usually sold for 100 lbs. of tobacco. At the same time, these lands, and other property, in which the money of the British creditor was vested, were paying high taxes for their own protection, and the debtor, as nominal holder, stood ultimate insurer of their value to the creditor, who was the real proprietor, because they were bought with his money. And who will estimate the value of this insurance, or say what would have been the forfeit, in a contrary event of the war? Who will say that the risk of the property was not worth the interest of its price? General calamity, then, prevented profit and, consequently, stopped interest, which is in lieu of profit. The creditor says, indeed, he has laid out of his money; he has therefore lost the use of it. The debtor replies, that, if the creditor has lost, he has not gained it; that this may be a question between two parties, both of whom have lost. In that case, the courts will not double the loss of the one, to save all loss from the other. That it is a rule of natural as well as municipal law, that in questions "de damno evitando melior est conditio possidentis." If this maxim be just, where each party is equally innocent, how much more so, where the loss has been produced by the act of the creditor? For, a nation, as a society, forms a moral person, and every member of it is personally responsible for his society. It was the act of the lender, or of his nation, which annihilated the profits of the money lent; he cannot then demand profits which he either prevented from coming into existence, or burnt, or otherwise destroyed, after they were produced. If, then, there be no instrument, or title of debt so formal and sacred as to give right to interest under all possible circumstances, and if circumstances of exemption, stronger than in the present case, cannot possibly be found, then no instrument or title of debt, however formal or sacred, can give right to interest under the circumstances of our case. Let us present the question in another point of view. Your own law forbade the payment of interest, when it forbade the receipt of American produce into Great Britain, and made that produce fair prize on its way from the debtor to the creditor, or to any other, for his use of reimbursement. All personal access between creditor and debtor was made illegal; and the debtor, who endeavored to make a remitment of his debt, or interest, must have done it three times, to answer its getting once to hand; for two out of three vessels were generally taken by the creditor nation, and, sometimes, by the creditor himself, as many of them turned their trading vessels into privateers. Where no place has been agreed on for the payment of a debt, the laws of England oblige the debtor to seek his creditor wheresoever he is to be found within the realm—Coke Lit. 210, b. but do not bind him to go out of the realm in search of him. This is our law too. The first act, generally, of the creditors and their agents here, was, to withdraw from the United States with their books and papers. The creditor thus withdrawing from his debtor, so as to render payment impossible, either of the principal or interest, makes it like the common case of a tender and refusal of money, after which, interest stops, both by your laws and ours. We see, too, from the letter of Mr. Adams, June 16, 1786, No. 57, that the British Secretary for Foreign Affairs was sensible that a British statute, having rendered criminal all intercourse between the debtor and creditor, had placed the article of interest on a different footing from the principal. And the letter of our plenipotentiaries to Mr. Hartley, the British plenipotentiary, for forming the definitive treaty, No. 58, shows, that the omission to express interest in the treaty, was not merely an oversight of the parties; that its allowance was considered by our plenipotentiaries as a thing not to be intended in the treaty, was declared against by Congress, and that declaration communicated to Mr. Hartley. After such an explanation, the omission is a proof of acquiescence, and an intention not to claim it. It appears, then, that the debt and interest on that debt are separate things in every country, and under separate rules. That, in every country, a debt is recoverable, while, in most countries, interest is refused in all cases; in others, given or refused, diminished or augmented, at the discretion of the judge; nowhere given in all cases indiscriminately, and consequently nowhere so incorporated with the debt as to pass with that, ex vi termini, or otherwise to be considered as a determinate and vestat thing.

While the taking interest on money has thus been considered, in some countries, as morally wrong in all cases, in others made legally right but in particular cases, the taking profits from lands, or rents in lieu of profits, has been allowed everywhere, and at all times, both in morality and law. Hence it is laid down as a general rule, Wolf, s. 229, "Si quis fundum alienum possidet, domini est quantum valet usas fundi, et possessoris quantum valet ejus cultura et cura."[18] But even in the case of lands restored by a treaty, the arrears of profits or rents are never restored, unless they be particularly stipulated. "Si res vi pacis restituendæ, restituendi quoque sunt fructus a die concessionis,"[19] say Wolf, s. 1224; and Grotius, "cui pace res conceditur, ei et fructus conceduntur à tempore concessionis: NON RETRO."[20] l. 3. c. 20. s. 22. To place the right to interest on money on a level with the right to profits on land, is placing it more advantageously than has been hitherto authorized; and if, as we have seen, a stipulation to restore lands does not include a stipulation to restore the back profits, we may certainly conclude, à fortiori, that the restitution of debts does not include an allowance of back interest on them.

These reasons, and others like these, have probably operated on the different courts to produce decisions, that "no interest should run during the time this general and national calamity lasted;" and they seem sufficient at least to rescue their decisions from that flagrant denial of right, which can alone authorize one nation to come forward with complaints against the judiciary proceedings of another.