The House went again into a Committee of the Whole on the report of the Secretary of the Treasury, Mr. Baldwin in the chair.
Mr. Madison's motion for a discrimination being under consideration,
Mr. Sedgwick.—The proposition, Mr. Chairman, contains a question of the utmost importance. And the committee must be obliged to the gentleman who brought it forward for his very ingenious discussion of the subject of the domestic debt. With respect to the question now before the committee, so much has been said, that I think it will not be necessary to consume much of their time in the investigation. On the subject of contracts I have to observe, that whenever a voluntary engagement is made for a valuable consideration for property advanced or services rendered, and the terms of the contract are understood, if no fraud or imposition is practised, the party engaging is bound to the performance, according to the literal meaning of the words in which it is expressed. Such contract, whether of a Government or an individual, may be either transferable or not transferable. The latter species of contract receives an additional value from its capacity of being transferred, if the circumstances of the possessor should render a sale of it necessary or convenient to him. To render the transferable quality of such evidences of contract in any degree advantageous to the possessor, it is necessary to consider, in case of sale, the alienee possessed of all the property of the original holder; and indeed it is highly absurd, and even contradictory, to say, that such evidences of debt are transferable, and at the same time to say that there is in them a kind of property that the holder could not convey by bona fide contract.
This is the construction which has invariably been given to these contracts, whether formed by Government or by individuals. To deprive the citizen of the power of binding himself by his own voluntary contract, or to prevent a disposition of property in its nature alienable, would be a violent and unjustifiable invasion of one of those rights of which man, as a citizen, is the most tenacious, and would indeed break one of the strongest bonds by which society is holden together.
In the transfers which have been made, the contracts were fairly made; the whole rights have been transferred. It is not pretended any fraud or imposition has been practised. The risk was calculated by the parties, and it was observed, that the risk contemplated a revolution in the Government.
From the foregoing deduction of particulars, it is presumed to be proved that a property is vested in the transferees. That if this property is divested by the Government, the law for that purpose would have a retrospective operation, and that no ex post facto law could be more alarming than that by which the right of private property is violently invaded.
Having considered the nature of the contract, and of the obligations which result from it, I beg leave to call the attention of the committee to those circumstances by which that obligation may be destroyed, impaired, or suspended. They are stated to be, 1. Performance. 2. Voluntary discharge. 3. Composition. 4. Inability.
And gentlemen are called upon to give information of any other causes which can produce either of those effects.
With regard, more particularly, to the proposition before the committee, I have, to observe, that with regard to these contracts, there has existed a depreciation in consequence of the failure of Government regularly to pay the interest. That in this depreciated state, the securities have been alienated; that of course the original holders have sustained a loss; that if the loss resulted from the fault, and not the misfortune of Government, the creditors have, undeniably, a demand against the Government for compensation; that this demand, however well founded, can never authorize the Government to invade the honestly acquired property of the present possessors, a property warranted by the terms of the contract itself, and sanctioned by the act of Congress, of April, 1783, and the validity of it recognized by the constitution we have sworn to support.
With regard to the claims of the original holders, it is, however, observable, that the domestic creditor, at the time the contract was formed, well knew the nature of the constitution of the Government administered by Congress, the other contracting party; that its power of performance depended on the ability and good-will of the States; that Congress had always performed its duty, had made the necessary requisitions; that this was its utmost power; and that the failure had arisen wholly from the neglect of the States. I therefore submit it to the committee, whether, if the original holder has a just or equitable demand, he should not resort to the State of which he is a member?