The Secretary of the Treasury has offered some alternatives to the creditors, out of which they may make their election; but it seems to me that they, all of them, propose a reduction in the principal and interest, that they may have an annuity of two-thirds, at six per centum, or for the whole sum at four per centum, or they may accept of the other terms. Though this may make a reduction favorable to the public, yet this is not such a reduction as justice, in my opinion, requires; and as the resolution before the committee is intended to make way for the adoption of those principles, I shall vote against it, though I would rather it was passed over for the present, in order to see what is the sense of the House on making a specific provision for the payment of the debt.
Mr. Page was glad that the question had been asked the mover of the propositions on the table what was the object of the resolution now under consideration, because it was liable to be misunderstood. But now, he presumed, the answer had satisfied every gentleman's mind.
The gentleman from New Hampshire was pleased to observe, that foreigners were not interested in the late revolution; that what they did was from such motives as demanded our gratitude; but our citizens were deeply interested, and, I believe, if they were never to get a farthing for what is owing to them for their services, they would be well paid; they have gained what they aimed at; they have secured their liberties and their lives; they will be satisfied that this House has pledged itself to pay to foreigners the generous loans they advanced us in the day of distress. If we were to make distinctions adverse to their interests, we could never expect from them a further favor in the future exigencies of this country. But we may also look with confidence at home for loans and services; on such occasions they will be supplied us on the principles of patriotism; the adoption of the first resolution was therefore politic and just, but the motion of my worthy colleague is not necessary. I feel for my fellow-citizens who have gloriously exerted themselves in the salvation of their country by their services in the field, or the supplies which they yielded, as much as any man can do. I acknowledge the debt of gratitude the community owes to those select citizens, and am willing to pay it as far as we possibly can; but they cannot, they will not complain of the deference we have shown to others, whose particular situation merited such regard at our hands.
Mr. Scott.—I find myself obliged to consider the Government of the United States in a very different situation, with respect to our foreign and domestic creditors. With respect to the foreign debt, we, the representatives of the United States, are vested with full power, and we are bound in duty to provide for the punctual payment according to the nature of the contract; but when I turn my eyes to the domestic debt, I find myself in a very different situation. I conceive myself a mere arbiter among the individuals of which the Union is composed. A part of the people have a claim upon somebody. I think that claim is against the people at large, and we are not only to provide for the payment of that claim, if just, but to determine whether that claim is just or not. One part of the community applies to us to recover of the other what is due to it; the other says, the debt is too large, it is more than is justly due; you must try and determine between us, and say what part is just, and what is not. This brings clearly into my view the whole subject, as a thing within the power of Congress to new model or modify, if we find that justice demands it; but we have no such authority with respect to the foreign debt. It is very clear to me, that we have the power to administer justice and impartiality among the members of the Union; and this will lead me freely to assert, that we have not only authority, but it is our duty, if, on examination, we find that not more than half the sum that is claimed is justly claimed, to strike off the other half.
Mr. Boudinot.—I am glad to see gentlemen bring into view principles on which to determine the great question before us; because, when they are once established, they will enable us to proceed with certainty to a decision. If the principles brought forward by the honorable gentleman from Pennsylvania are just, his arguments are of great weight; but if, on consideration, we shall find that the principles are unjust, then I presume, however cogent the system of reasoning he has founded thereon, it will not prevail. He supposes we sit here as judges to determine the different claims of the creditors of the United States. If we are in that predicament, I agree we ought not to proceed but on full evidence and hearing of those claims. But I have never hitherto been led to consider Congress in this light, nor can I now consider them in any such point of view. I consider the Congress, who entered into these engagements, as complete representatives of the United States, and, in their political capacity, authorized, by the articles of Confederation, to contract the debts for which our public faith is pledged; instead of being judges, or arbitrators, on this occasion, we are parties to the contract; nor is our case varied, by the dissolution of the old Confederacy, because the existing constitution has expressly recognized the engagements made under the former. All debts contracted before the adoption of this constitution, shall be as valid against the United States, under this Government, as under the Confederation. Now is the moment to establish the principle; if the constitution admits the borrowing of money, or paying for supplies, to be a contract, we are one of the parties to this contract, and all idea of being arbiters must vanish. We cannot judge in our own cause. The case will now stand clear; we owe a debt, contracted for a valuable consideration. The evidences of our debt are in the hands of our creditors, and we are called upon to discharge them; if we have it in our power, we ought to consider ourselves bound to do it, on every principle of honor, of justice, and of policy; but as we have not the ability to pay the whole off, nor, perhaps, the whole interest, we must endeavor to make such a modification as will enable us to satisfy every one. Not that this modification shall take place without the consent of the creditors; this would be improper and unjust. Each party is as much to be consulted on this occasion, as it was at the time of the first contract. If, then, Congress is bound by the first contract, no gentleman can say we are judges. If we are parties, what would be the decision before a court of justice? The creditor produces my bond, by which I have bound myself to pay a hundred dollars; I cannot gainsay the fact; no man is allowed to plead that he has made a bad bargain, and that at other times, he could have purchased what he got of the creditor at half the sum he was forced to allow him. The inquiry with the judges is not, whether the debtor made a good bargain or not, but whether he did it fairly and voluntarily. We are in the same predicament if we fairly and honestly received the quid pro quo; we are bound, as parties to the honest performance of the contract, to discharge the debt; otherwise, what avails the clause in the constitution, declaring all debts contracted, and engagements entered into, before the adoption to be as valid against the present Government as they were under the old Confederation? The debt was bona fide contracted; it was acknowledged by the United States; and the creditor received a certificate as to the evidence of his debt. It is immaterial to us what he did with it. I confess, if the original holder was to come forward, and say that he had been robbed of such evidence, we ought not to pay it until the point was ascertained in a court of justice.
Some observations were made to point out a difference between the foreign and domestic debt. I admit there is a distinction, and that in another instance, which has not been mentioned. His Most Christian Majesty, when he first became our important ally, presented Congress with a large sum of money; but this being insufficient to procure us the necessary supply of military stores, a loan was made us from the royal coffers of France. But this also being inadequate, we endeavored to obtain further aid from foreigners. The credit of the United States was so much impaired, as to hold out but little encouragement to individuals to trust us with their money. The French King added another mark of his distinguished attention: he guarantied the loan, and the money was obtained—obtained of the widow and fatherless; of persons whose all depended upon a punctual payment of the interest. On this point I could refer you to letters from our commissioners in Europe, who beg that we may not put them on this business, unless we are certain that the United States will carefully provide for the payment of the interest; because, in case of failure, hundreds must perish for want. This is another motive why we should attend to the performance of our contracts; and I will repeat again, it is what we are called upon to do upon every principle of honor, justice, and policy.
Mr. Lawrence.—The observations of the honorable gentleman from Pennsylvania, (Mr. Scott,) if I rightly understand them, apply to the principal, and not the interest of the domestic debt. He imagines it to be too large; that is, that the individual who performed services, or rendered supplies during the late war, received evidences of rather too great nominal value; and that, at this period of time, it is necessary to investigate every particular claim, and judge whether the balances are respectively due or not. The gentleman has distinguished between the foreign and domestic creditor on this point; he supposes the foreign debt ought not to be re-examined, because the holders of it are unconnected with our Government. They lent us money, and we are bound according to the precise terms of the contract. Here I agree with him; but that there should be a solid distinction in justice between the foreign and domestic creditor is to me a singular thing. It was observed, that the citizens of America would be well paid for their loans, supplies, and services, by the benefits and profits arising to them by the revolution; but are we to sacrifice the claims of individuals of the community for the advantage of the whole? Who are benefited by the revolution? Every citizen. Then every citizen is bound to contribute his equal part of the expenses attending the procurement. Should those of our citizens who furnished the supplies, or loaned their money, be the only class who are injured? Every citizen is bound to pay according to his ability, because every one has participated in the benefits: then the only question to ask is, whether this discrimination should be made to ascertain or new proportion the debt? This will lead me to inquire whether it is proper for us, after the resolution we passed at the last session, after the resolution we have just now passed, to scale the public debt anew? Shall we say that the evidence carries on its face fraud and deception? I contend we shall not. Why shall we liquidate a debt which is established upon a complete and final settlement? From the face of the evidences arises the demand, and that is the demand we are to make provision for. Shall we go to our officers and soldiers who served during the late war, individually, and say that the balance struck to be due to them is an imposition on the public, when the Government itself has determined that they were entitled to such particular reward? If, at the time those securities were given to them, Government had paid them in money, would any gentleman now contend that their accounts ought to be reliquidated, and every individual called upon to refund a part of what he acquired in conformity to the laws of this country? Certainly no gentleman would contend for such a measure. How is the nature of the case altered from the circumstances of our having been so unfortunate as to pay those worthy men with a certificate in lieu of the money which was due? The nature of the case, I conceive, is perfectly the same; and we are in duty bound to make a full compensation. The face of the paper expresses what that is, and it is to be our guide; the demand surely is not to be lessened.
Mr. Jackson said there were, most surely, principles on which to ground a discrimination betwixt a foreign and domestic creditor; if there was no other, there was this, that the domestic creditors are those that are bound to pay the foreign creditors their demand; they ought, consequently, to do justice to others, by a punctual payment, before they require a discharge of their own claims.
Mr. Ames did not conceive it material to inquire whether there be an equal obligation on the people of the United States to pay their foreign and domestic creditors, when they meant to pay both; but if it is intended to reduce the principal of either, it will lead us into a discussion of the principles on which such a measure ought to be founded. The honorable gentleman from Pennsylvania (Mr. Scott) probably intends by the amendment to have a reduction of the debt; I have, said he, so much respect for the good sense and upright intentions of that honorable gentleman, that I will not impute to him unworthy motives; nor do I believe that he governs his conduct in private life by maxims which I suspect to be contained in the amendment now before us. I would not be understood, by any means, to convey an improper reflection upon the opinions of any one. The science of finance is new in America; a gentleman may therefore propose the worst of measures with the best intentions. What, let me inquire, will be the pernicious consequences resulting from the establishment of this doctrine? Will it not be subversive of every principle on which public contracts are founded? The evidences of the debt, possessed by the creditors of the United States, cannot, in reason, justice, or policy, be considered in any other light than as public bonds, for the redemption and payment of which the property and labor of the whole people are pledged. The only just idea is, that when the public contract a debt with an individual, that it becomes personified, and that with respect to this contract, the powers of Government shall never legislate. If this was not the case, it would destroy the effect it was intended to produce; no individual would be found willing to trust the Government, if he supposed the Government had the inclination and power, by virtue of a mere major vote, to set aside the terms of the engagement. If the public in such a case is, as I have said, personified, what conceivable difference is there, except in favor of the creditor, between the public and an individual in the case? If, then, the public contract is a solemn obligation upon us, we are bound to its true and faithful performance. What is the object for which men enter into society, but to secure their lives and property? What is the usual means of acquiring property between man and man? The best right to property is acquired by the consent of the last owner. If, then, an individual is possessed of property, in consequence of this right, how can Government, founded on this social compact, pretend to exercise the right of divesting a man of that object which induced him to combine himself with the society? every gentleman may determine this question by his own feelings. Shall it be said that this Government, evidently established for the purpose of securing property, that, in its first act, it divested its citizens of seventy millions of money, which is justly due to the individuals who have contracted with Government! I believe those gentlemen, who are apprehensive for the liberties and safety of their fellow-citizens, under the efficiency of the present constitution, will find real cause of alarm from the establishment of the present doctrine. I have heard, that in the East Indies the stock of the labor and property of the empire is the property of the prince; that it is held at his will and pleasure; but this is a slavish doctrine, which I hope we are not prepared to adopt here. But I will not go further into a consideration of the idea of discrimination. I will ask, though, is this country ever to be in a settled and quiet state? Must every transaction that took place, during the course of the last war, be ripped up? Shall we never have done with the settlement and liquidation of our accounts?
Mr. Livermore.—The arguments advanced by the gentlemen from Massachusetts and New York prove too much, and therefore prove nothing. That the late Congress had, at all times, from their first institution, the power to contract debts, for the benefit of the United States, cannot be denied; and that we are authorized to pay such debts, is equally certain. But this by no means contravenes the opinion of those gentlemen who think, that the whole may be properly considered and discharged at the rate which justice requires; for the same argument which is urged for the payment of the public securities at their nominal value, might be urged in favor of paying off the Continental debts of credit, according to the sums expressed on the face of them. They were issued with as much confidence, and were received with as much reliance on the public faith, as any species of securities whatever; yet, it seems to be given up on all hands, that the owners of the old Continental paper bills ought not to be paid according to their nominal value. Perhaps it may be said, on comparing them with the loan-office certificates, that the United States had not the benefit of that money; but had they not the value of it? It will be answered, that when the money was first issued, Congress had nearly the value for it; but afterwards the money greatly depreciated, and they had not the full value for it, yet the obligation to pay it is as explicit as words can make it. No advocate will be found for making all that money good. It has been thought proper, and it is just, that it should be reduced from its nominal value; if it is reduced on a scale of one hundred for one, the holders of it, I dare say, would cheerfully receive that sum. If the United States then had value for it, and if they had not value for the certificates, who can doubt of the justice of reliquidating, and duly ascertaining the public debt? All I contend for is this, that the present Government pay the debts of the United States; but as the domestic part of the debt has been contracted in depreciated notes, that less interest should be paid upon it than six per cent. Six per cent. was the usual interest upon the certificates when they were issued by Congress; but if the possessor has received no part of this six per cent. until this time, that now the principal and interest be consolidated into one sum, hereafter to bear an interest of three or four per cent.; then those citizens, who now stand as creditors of the Union, will find that part of their property has been the most productive of any, much more productive than the property of the citizens of the United States has generally been. Those who lent their money to individuals before and during the late war, generally lost or suffered by the depreciation some three-quarters of the capital; nay, some thirty-nine fortieths. But is this the case of the domestic creditor of the United States? No! he will preserve his property, through the chaos of the revolution, and be put now in a more eligible situation than he was at the time when he loaned the money. The capital sum which he lent is now increased, and very rapidly increased, for six per cent. is a very large interest. He will now receive 160 dollars for his 100, and putting that into the funds, at three or four per cent. he will find it more productive than any other method in which he could employ his money; for, I contend, that neither improved, nor unimproved lands, will give an interest near half of what the public creditor will receive. People who have held real property have sunk, with the taxes, and other losses, the greatest part of it; but the public creditor has let his run through the confusion of the revolution, and nevertheless gets it returned to him safe; and, so far from being impaired, that he has prodigiously accumulated, not only in a manner superior to the property of his fellow-citizens, but superior to the foreigner who lent his money at four per cent. Justice and equity require, on the behalf of the community, that these people be content with reasonable profit. They ought not, therefore, to receive, on a funded debt, so much as six per cent.; whether three or four, or something between three and four, would be a proper sum, I shall not pretend to determine. But I consider it a proper question for this committee to consider, in justice to those who are to pay, as well as to those who are to receive; nor do I believe the domestic creditors would be dissatisfied with it, provided they were sure of receiving this annual interest; for their debts, on such a footing, would be better to them than if they were established on an extravagant plan that could never be effected, but which would be likely to throw the nation into confusion. Every body has suffered more or less by the depreciation, but the public creditors very little, in regard to that part of their property which they had deposited in the hands of Government: it is true, that it has slept; but it is now waked up to some purpose.