Abridgment of the Debates of Congress, from 1789 to 1856, Vol. 1 (of 16)

by United States. Congress

Now, if we have received services from the soldier, and have given him paper, the question will be, whether that was an equivalent, and the paper a proper payment; or whether it is only an evidence of the debt? I take it to be a granted point that it was not a payment, but an obligation to pay whenever the United States should be able. It appears to me, then, that it was the duty of the person who received the paper, to wait a reasonable time; and the duty of the nation to make actual payment as speedily as possible. If the person who had received this paper had wantonly parted with it for nothing, I agree we should have been under no more obligation to pay him the expressed sum, than if we had paid him money, and he had flung it away or wasted it; but if, on the contrary, there was a delay in the execution of the contract, on the part of the Government, which compelled him to part with it, a compensation is equitable.

The same rule will apply between the original holder, or person who rendered the service, and present possessor or assignee; for shortness we will distinguish them by the names of soldier and speculator. The speculator, when he dealt with the soldier, must, from the nature of the thing, have induced him to believe that he gave him an equivalent for his purchase; and it might have been an inducement to the soldier to sell, to think he had something more than an equivalent; the speculator thought he had more than an equivalent, throwing necessity on the one side, and fraud on the other, out of the question. Then the confidence was equal, perhaps not a penny between them: I can hardly conceive the exchange took place on any other terms. You never can allow the confidence of the speculator to be estimated very highly, perhaps at not more than one for ten. For if it is admitted, that the speculator had entire confidence, he was guilty of a palpable fraud, and a violation of the first principle of justice; it amounted to this, that he gave £10 in money for £100 bond, which he was certain would be paid. I believe, if the case stood exactly in this form, no man would hesitate in deciding its illegality. If a man takes £100 for £10, it is illegal; but suppose there was a risk, and this risk was considered by the speculator as little less than ten for one, has he not discovered his own mistake when he sees he gets an interest of sixty per cent. on his capital; and that capital tenfold? This contract then ought to be void on the principle of a mistake; and here you place the speculator between Scylla and Charybdis. If he really thought the certificates only worth one for ten, you can give him no credit for his confidence; and you will admit that he ought to be satisfied with a reasonable advance on his purchase. But if you give him entire credit for his confidence in Government, you must give him no credit for his honesty. If both parties had known of this event, the contract would never have taken place. If you pay the whole sum, the speculator ought to take no more than what he gave a fair equivalent for. Gentlemen who seem afraid of giving to the soldier a part of his original claim, lest they affront his nobleness of soul, make no scruple to offer the speculator ten times the sum he is entitled to, on the principle of natural justice, without any apprehension that his honor will receive a wound. If the claim of the soldier was extinguished by receiving two shillings in the pound of the speculator, upon what principle is it contended that the latter should receive more than distributive justice? Arguments, proving that the justice due to the first has been satisfied by what has been done, apply with greater force to the latter.

It has been doubted, and a question has been agitated, whether we shall exercise the power of reconsidering these contracts, and whether a modification is constitutionally in our power? I will not go into this subject, or any other which ought to be taken for granted. I shall take it, that we are authorized, and do mean to interfere; you must act. Do you mean to pay the principal and interest now due? I believe not. Will you shelter yourself under the plea of necessity? That is impossible. I dare say, if the United States were sold, they would at least be worth six hundred millions of dollars; and we have but eighty millions to provide for. Having, then, the means and power, I trust you mean to exercise them; and as you exercise them, you ought to exercise them as justly as possible; then, to do this, you will, it is said, personify the three parties concerned—the United States, the original holder, and the speculator. I do not clearly comprehend the idea of a personified State; perhaps it arises from my dulness of apprehension. Man, in his natural capacity, is sometimes obliged to do what is considered unjust; but a State, when it has power, is not obliged to do what is unjust. The State, then, in this respect, is doing what an honest man would do, if he had the power of conducting this business as he thought proper.

The speculator comes to you with his bond, and tells you it is due. The soldier tells you that he has done services to a considerable amount, for which he never has been paid; and that those evidences of the demand which you gave to him, were obtained from him, for one-tenth part of what they were declared to be worth. The State says to the speculator, you have made a great deal, and out of a man who has risked his life, and borne every burthen which human nature could bear, with the greatest fortitude which the most virtuous heart is capable of exerting, let him have a part back. The speculator answers no; here is your bond. Consider again, replies the State, that the veteran's services, at the expense of his health and property, at the risk of his life, has saved you and yours; and not only that, but he is obliged to pay of your demand, more than he has ever received. What is now his answer? Here is the bond, pay me my bond. Under these circumstances, supposing the State an individual, he might, without much infamy to his character, exercise the power which he has over his own bond, in order to do justice between the parties. He might say to the speculator, you had the soldier in your power; you did him injustice; we have you now in our power, we will do you complete justice, but no more. A private man could never be injured in his reputation by such conduct: indeed, according to the result of these circumstances, the hardships of war, and the breach of contract, have unfortunately inflicted upon the man, the most meritorious in this community, or perhaps in any other community, sufferings and miseries—a punishment sufficient to atone for the guilt of the greatest crimes. This, in the event, appears to be the situation of the saviors of America.

Mr. Madison said that the opponents of his proposition had imposed on its friends not only a heavy task, by the number of their objections, but a delicate one by the nature of some of them. It had been arranged as an embarrassing measure which ought to be facilitated, and producing discussions which might end in disagreeable consequences. However painful it might be to contradict the wishes of gentlemen whom he respected, he could promise nothing more, in the present case, than his endeavors to disappoint their apprehensions. When his judgment could not yield to the propositions of others, the right to make and support his own, was a right which he could never suffer to be contested. In exercising it, he should study to maintain that moderation and liberality which were due to the greatness of the subject before the committee. He felt pleasure in acknowledging, that the like spirit had, in general, directed the arguments on the other side. Free discussions thus conducted are not only favorable to a right decision, but to a cheerful acquiescence of the mistaken opponents of it. They might have the further advantage of recommending the result to the public, by fully explaining the grounds of it. If the pretensions of a numerous and meritorious class of citizens be not well founded, or cannot be complied with, let them see that this is the case, and be soothed, under their disappointment, with the proof that they have not been overlooked by their country.

He would proceed now to review the grounds on which the proposition had been combated; which he should do without either following those who had wandered from the field of fair argument, or avoiding those who had kept within its limits.

It could not have escaped the committee, that the gentlemen to whom he was opposed, had reasoned on this momentous question as on an ordinary case in a court of law; that they had equally strained all the maxims that could favor the purchasing, or be adverse to the original holder; and that they dwelt with equal pleasure on every circumstance which could brighten the pretensions of the former, or discredit those of the latter. He had not himself attempted, nor did he mean to undervalue the pretensions of the actual holders. In stating them, he had even used as strong terms as they themselves could have dictated; but beyond a certain point he could not go. He must renounce every sentiment which he had hitherto cherished, before his complaisance could admit that America ought to erect the monuments of her gratitude, not to those who saved her liberties, but to those who had enriched themselves in her funds.

All that he wished was, that the claims of the original holders, not less than those of the actual holders, should be fairly examined and justly decided. They had been invalidated by nothing yet urged. A debt was fairly contracted; according to justice and good faith, it ought to have been paid in gold or silver; a piece of paper only was substituted. Was this paper equal in value to gold or silver? No. It was worth, in the market, which the argument for the purchasing holders makes the criterion, no more than one-eighth or one-seventh of that value. Was this depreciated paper freely accepted? No. The Government offered that or nothing. The relation of the individual to the Government, and the circumstances of the offer, rendered the acceptance a forced, not a free one. The same degree of constraint would vitiate a transaction between man and man, before any Court of Equity on the face of the earth. There are even cases where consent cannot be pretended; where the property of the planter or farmer had been taken at the point of the bayonet, and a certificate presented in the same manner. But why did the creditors part with their acknowledgment of the debt? In some instances, from necessity; in others, from a well-founded distrust of the public. Whether from the one, or the other, they had been injured; they had suffered loss, through the default of the debtor; and the debtor cannot, in justice or honor, take advantage of the default.

Here, then, was a debt acknowledged to have been once due, and which was never discharged; because the payment was forced and defective. The balance, consequently, is still due, and is of as sacred a nature as the claims of the purchasing holder can be; and if both are not to be paid in the whole, is equally entitled to payment in part.