If gentlemen persisted, however, in demanding precedents, he was happy in being able to gratify them with two, which, though not exactly parallel, were, on that account, of the greater force, since the interposition of Government had taken place where the emergency could less require them.
The first was the case of the Canada bills. During the war which ended in 1763, and which was attended with a revolution of the Government in Canada, the supplies obtained for the French army in that province were paid for in bills of exchange and certificates. This paper depreciated, and was bought up chiefly by British merchants. The sum and the depreciation were so considerable as to become a subject of negotiation between France and Great Britain at the peace. The negotiations produced a particular article, by which it was agreed by France that the paper ought to be redeemed, and admitted by Great Britain that it should be redeemed at a liquidated value. In the year 1766 this article was accordingly carried into effect by ministers from the two courts, which reduced the paper in the hands of the British holders, in some instances, as much as seventy-five per cent. below its nominal value. It was stated, indeed, by the reporter of the case, that the holders of the paper had themselves concurred in the liquidation; but it was not probable that the concurrence was voluntary. If it was voluntary, it shows that they themselves were sensible of the equity of the sacrifice.
The other case was of still greater weight, as it had no relation to war or treaty, and took place in the nation which has been held up as a model with respect to public credit. In the year 1713, the civil list of Great Britain had fallen into arrears to the amount of £500,000. The creditors who had furnished supplies to the Government had, instead of money, received debentures only from the respective officers. These had depreciated. In that state, they were assigned in some instances; in others, covenanted to be assigned. When the Parliament appropriated funds for satisfying these arrears, they inserted an express provision in the act, that the creditors who had been obliged, by the default of Government, to dispose of their paper at a loss, might redeem it from the assignees by repaying the actual price, with an interest of six per cent., and that all agreements and covenants to assign should be absolutely void. Here then was an interposition on the very principle, that a Government ought to redress the wrongs sustained by its default, and on an occasion trivial when compared to that under consideration; yet it does not appear that the public credit of the nation was injured by it.
The best source of confidence in Government was the apparent honesty of its views. The proposition could not possibly be ascribed to any other motive than this, because the public was not to gain a farthing by it. The next source was an experienced punctuality in the payments due from the Government. For this support to public credit, he relied on what had been experienced by a part of the foreign creditors; on the provision to be made for the residue; and on the punctuality which, he flattered himself, would be observed in all future payments of the domestic creditors. He was more apprehensive of injury to public credit from such modifications of the interest of the public debt as some gentlemen seemed to have in view. In these the public would be the gainer, and the plea of inability the more alarming, because it was so easy to set up, so difficult to be disproved, and for which, consequently, the temptations would be so alluring.
Mr. Seney rose and observed, that it was with reluctance he attempted to express to the committee his ideas upon a question which had been so fully and ably discussed. However, as it had been expected that gentlemen would not, in a case of such magnitude, be content with merely a silent vote, he rose to declare the reasons upon which his decision was founded. In doing this, he hoped that he should not use epithets which might be deemed harsh, or language which would be offensive; that although the sentiments of other members should differ from his, he wished so far to respect those sentiments as to treat them with decency.
He considered the proposition of the gentleman from Virginia (Mr. Madison) was designed to effect two purposes: the one, a compensation to the original creditors, who, during the late war, in times of distress, had loaned money, furnished supplies, and rendered military services; and who had only received satisfaction therefor in paper of inconsiderable value, forced on them by the public, and depreciated by their acts. This class of citizens, he conceived, had a just and equitable claim for the full difference in value between that paper, when paid, and specie. The other object of the proposition alluded to, was, he said, to compensate those creditors who now hold alienated certificates. Each description of those creditors had, in his opinion, claims on the public. The first was founded on an original contract between them and the Government, part of which only had been complied with, and the residue still remained undischarged. The other was grounded on having possession of the paper which contained the promise to pay.
It has been contended that the United States have not ability to pay both. In this case a question arises: What is, upon the whole, most just and expedient? Some gentlemen contend, that it is incumbent on us to make full provision for those who hold the assigned certificates, without any for the original creditors who have alienated them. Others think, that the misfortune of Government, in this respect, should not be felt by either class solely, but be borne by both. That it is more just to adopt a mode of composition, by which those creditors should mutually share in this misfortune, and be mutually benefited by a provision within our power to make; with those his sentiments accorded. He could not be impressed with the justice or reason of a measure calculated to make a total sacrifice of one class of creditors, and full payment to the other class. Such a step could not, in his opinion, be justified in any distinction or precedence which existed in their claims. When it was considered that the original creditors furnished money and supplies, and rendered services essential to the preservation of their country, and at a time when its liberties were invaded, and every thing which can be dear to freemen was in jeopardy and at stake, he could not apprehend that their claims would be deemed inferior to those of their rivals. In his opinion, these circumstances entitled them to superior notice. Believing, however, that the amendment under consideration would, upon the whole, effect more substantial justice than any other practicable scheme that had been proposed to the committee, or which he had heard of, his assent would, therefore, be given to it.
Tuesday, February 19.
Public Credit.
The House again went into a committee on the report of the Secretary of the Treasury, Mr. Baldwin in the chair.