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- Herausgeber: Krill Press
- Kategorie: Geisteswissenschaft
- Sprache: Englisch
- Veröffentlichungsjahr: 2015
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THE WORKS OF ALEXANDER HAMILTON: VOLUME 3
Alexander Hamilton
FIREWORK PRESS
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Copyright © 2015 by Alexander Hamilton
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TABLE OF CONTENTS
Introduction
The Works of Alexander Hamilton: Volume 3
FINANCE (Continued)
number one
number two
number three
number four
payments of public debt
I
ii
civis to mercator
fact For the National Gazette
public debt (Communicated to the House of Representatives, December 3, 1792.)
loans
report of the secretary of the treasury in pursuance of the foregoing resolutions
loans Communicated to the Senate, February 6, 1793.
Communicated to the Senate, February 6, 1793.
loans Communicated to the House of Representatives, February 13, 1793.
Communicated to the House of Representatives.
No. 1 George Washington, President of the United States of America, to the Secretary of the Treasury for the time being.
No. 2 George Washington, President of the United States of America, to the Secretary of the Treasury for the time being.
No. 3 To all to whom these presents shall come:
No. 4 To all to whom these presents shall come:
public funds Communicated to the Senate, February 14, 1793.
loans Communicated to the House of Representatives, February 20, 1793.
observer1
hamilton to the speaker of the house of representatives
loan Communicated to the House of Representatives, February 25, 1794.
hamilton to washington
hamilton to a committee of congress
hamilton to a committee of congress
washington to hamilton
washington to hamilton
washington to hamilton
hamilton to washington
hamilton to the speaker of the house of representatives
public credit Communicated to the Senate, January 16 and 21, 1795.
I. Proposition
II. Proposition
III. Proposition
IV. Proposition
V. Proposition
VI. Proposition
VII. Proposition
VIII. Proposition
IX. Proposition
X. Proposition
Remarks upon the First Proposition
Remarks upon the Second Proposition
Remarks on the Third Proposition
Remark on the Fourth Proposition
Remarks on the Fifth Proposition
Remarks on the Sixth Proposition
Remarks on the Seventh Proposition
Remarks on the Eighth Proposition
Remarks on the Ninth Proposition
Remarks on the Tenth Proposition
improvement of the revenue Communicated to the House of Representatives, February 2, 1795.
building tax plan sent to oliver wolcott, secretary of the treasury, june 7, 1797
NATIONAL BANK
hamilton to robert morris, 1780
hamilton to robert morris
national bank Communicated to the House of Representatives, December 14, 1790.
washington to hamilton
hamilton to washington
hamilton to washington
The Works of Alexander Hamilton: Volume 3
By
Alexander Hamilton
The Works of Alexander Hamilton: Volume 3
Published by Firework Press
New York City, NY
First published circa 1804
Copyright © Firework Press, 2015
All rights reserved
Except in the United States of America, this book is sold subject to the condition that it shall not, by way of trade or otherwise, be lent, re-sold, hired out, or otherwise circulated without the publisher’s prior consent in any form of binding or cover other than that in which it is published and without a similar condition including this condition being imposed on the subsequent purchaser.
About Firework Press
Firework Pressprints and publishes the greatest books about American history ever written, including seminal works written by our nation’s most influential figures.
INTRODUCTION
UNFORTUNATELY, ONE OF THE BEST known aspects of Alexander Hamilton’s (1755-1804) life is the manner in which he died, being shot and killed in a famous duel with Aaron Burr in 1804. But Hamilton became one of the most instrumental Founding Fathers of the United States in that time, not only in helping draft and gain support for the U.S. Constitution but in also leading the Federalist party and building the institutions of the young federal government as Washington’s Secretary of Treasury.
One of the biggest battles was over the chartering of a national bank, a topic that seems trivial today given the size and scope of the federal government. At the founding, however, the Southern states and Thomas Jefferson’s Democratic Party were skeptical of the necessity of a national bank, while Hamilton’s Federalists insisted that it would help the nation pay off its debts and manage its finances. Eventually Hamilton won out, but the First U.S. Bank, located in Philadelphia, was nonetheless run by a private company, ensuring limits on government control.
This edition of Hamilton’s Works: Volume 3 includes his writings on Taxation and the argument over a National Bank.
THE WORKS OF ALEXANDER HAMILTON: VOLUME 3
FINANCE (CONTINUED)
VINDICATION OF THE FUNDING SYSTEM
NUMBER ONE
1791 (?)
It was to have been foreseen, that though the virtuous part of those who were opposed to the present Constitution of the United States, while in deliberation before the people, would yield to the evidence which experience would afford of its usefulness and safety, there were opponents of a certain character, who, as happens in all great political questions, would always remain incurably hostile to it; that in the course of its administration its greatest merits would be in the eyes of such men its greatest blemishes, its most brilliant successes to them occasions of bitter chagrin and envious detraction, its slightest mismanagements subjects of malignant exaggeration, its most trivial misfortunes the welcome topics of virulent accusation and insidious misrepresentation.
With some men the hardest thing to forgive is the demonstration of their errors,—the manifestation that they are not infallible. Mortified vanity is one of the most corroding emotions of the human mind; one of the most unextinguishable sources of animosity and hatred.
It was equally to have been foreseen, that personal disappointments would be likely to alienate from the government some individuals who had at first advocated its adoption, perhaps from motives not the most patriotic or commendable; that personal rivalships and competitions would throw others into an opposition to its measures, without much regard to their intrinsic merits or demerits; and that a third class would embrace the path of opposition as the supposed road to popularity and preferment, raising upon every colorable pretext the cry of danger to liberty, and endeavoring to disseminate among the people false terrors and ill-grounded alarms.
Phenomena like these have deformed the political horizon, and testify the depravity of mankind, in all countries and at all times.
It was likewise to have been expected that among the well-meaning friends of the government, there would be a part, competent to the proper management of the affairs of the Union, who, sensible from experience of the insufficiency of the former system, gave their assent to the substitute offered to their choice, rather from general impressions of the necessity of a change, than from an accurate view of the necessary compass of the authorities which ought to constitute it.
When they came to witness the exercise of those authorities upon a scale more comprehensive than they had contemplated, and to hear the incendiary comments of those who will ever be on the watch for pretexts to brand the proceedings of the government with imputations of usurpation and tyranny, and the factious and indiscreet clamors of those who, in and out of the Legislature, with too much levity, torture the Constitution into objections to measures which they deem inexpedient;—it was to have been expected, I say, that some such men might be carried away by transient anxieties and apprehensions, and might for a moment add weight to an opposition which could not fail to grow out of other causes, and the real objects of which they would abhor.
There is yet another class of men, who, in all the stages of our republican system, either from desperate circumstances, or irregular ambition, or a mixture of both, will labor incessantly to keep the government in a troubled and unsettled state, to sow disquietudes in the minds of the people, and to promote confusion and change. Every republic at all times has its Catilines and its Cæsars.
Men of this stamp, while in their hearts they scoff at the principles of liberty, while in their real characters they are arbitrary, persecuting, and intolerant, are in all their harangues and professions the most zealous; nay, if they are to be believed, the only friends to liberty. Mercenary and corrupt themselves, they are continually making a parade of their purity and disinterestedness, and heaping upon others charges of peculation and corruption. Extravagant and dissipated in their own affairs, they are always prating about public economy, and railing at the government for its pretended profusion. Conscious that as long as the confidence of the people shall be maintained in their tried and faithful servants, in men of real integrity and patriotism, their ambitious projects can never succeed, they leave no artifice unessayed, they spare no pains to destroy that confidence, and blacken the characters that stand in their way.
Convinced that as long as order and system in the public affairs can be maintained, their schemes can never be realized, they are constantly representing the means of that order and system as chains forged for the people. Themselves the only plotters and conspirators, they are for ever spreading tales of plots and conspiracies; always talking of the republican cause, and meaning nothing but the cause of themselves and their party; virtue and liberty constantly on their lips, fraud, usurpation, and tyranny in their hearts.
There is yet another class of opponents to the government and its administration, who are of too much consequence not to be mentioned: a sect of political doctors; a kind of Popes in government; standards of political orthodoxy, who brand with heresy all opinions but their own; men of sublimated imaginations and weak judgments; pretenders to profound knowledge, yet ignorant of the most useful of all sciences — the science of human nature; men who dignify themselves with the appellation of philosophers, yet are destitute of the first elements of true philosophy; lovers of paradoxes; men who maintain expressly that religion is not necessary to society, and very nearly that government itself is a nuisance; that priests and clergymen of all descriptions are worse than useless. Such men, the ridicule of any cause that they espouse, and the best witnesses to the goodness of that which they oppose, have no small share in the clamors which are raised, and in the dissatisfactions which are excited.
While the real object of these clamors, with the persons most active in propagating them, is opposition to the administration of it; while they are straining every nerve to render it odious, they are profuse in their professions of attachment to it. To oppose avowedly the work of the people would be too barefaced. It would not accord with that system of treacherous flattery, which is the usual engine of these pretended “friends,” but real betrayers, of the people.
Circumstances require that the mode of attack be changed. The government is to be good, if not excellent, but its administration is to be execrable,—detestable,—a mere sink of corruption; a deep-laid plan to overturn the republican system of the country.
Suspicions of the most flagitious prostitution and corruption in office, of improper connections with brokers and speculators to fleece the community, of the horrid depravity of promoting wars, and the shedding of human blood, for the sake of sharing collusively the emoluments of lucrative contracts, suspicions like these are, if possible, to be thrown upon men, the whole tenor of whose lives gives the lie to them; who, before they came into office, were never either land-jobbers, or stock-jobbers, or jobbers of any other kind; who can appeal to their fellow-citizens of every other party and description to attest that their reputations for probity are unsullied, that their conduct in all pecuniary concerns has been nicely correct and even exemplarily disinterested; who, it is notorious, have sacrificed and are sacrificing the interests of their families to their public zeal; who, whenever the necessity of resisting the machinations of the enemies of the public quiet will permit them to retire, will retire poorer than they came into office, and will have to resume under numerous disadvantages the pursuits which they before followed under every advantage. Shame, where is thy blush? — if detraction so malignant as this can affront the public ear. Integrity, where is thy shield? where thy reward?—if the poisonous breath of an unprincipled cabal can pollute thy good name which thou incessantly toiled to deserve.
People of America, can ye be deceived by arts like these? Will ye suffer yourselves to be cheated out of your confidence in men who deserve it most? Will ye be the dupes of hypocritical pretenders?
Think for yourselves. Look around you. Consult your own experience. If any of you have doubts, listen calmly and dispassionately to the arguments and facts which, in the course of the following numbers, shall be opposed to the suggestions which would persuade you that the administration of your government has been in the aggregate weak or wicked, or both.
NUMBER TWO
OF ALL THE MEASURES OF the government, that which has been most bitterly inveighed against is the funding system, contained in the act making provision for the debt of the United States. As well for this reason, as on account of its superior importance, the objections which have been made to it are entitled to an examination in the first place.
It is a curious phenomenon in political history (not easy to be paralleled), that a measure which has elevated the credit of the country from a state of absolute prostration to a state of exalted pre-eminence, should bring upon the authors of it obloquy and reproach.
It is certainly what, in the ordinary course of human affairs, they could not have anticipated. They are not here chargeable with arrogance, if they indulged from it the hope of credit and applause; and if the clamors which have been raised have truly proceeded, as the clamorers assure us, from patriotic motives, it must be confessed that they have the additional merit of novelty and singularity.
There must be something original in the passions as well as in the ideas of the sect to which they are attributable. It will be hardly possible not to believe, that some mysterious work of political regeneration has begun to make its way in the world, and that all those who have not been the subjects of it are in a state of pitiable darkness and error.
The two first points which, in considering the funding system, present themselves to attention, are the existence and the composition of the debt funded.
A person who, unacquainted with the fact, should learn the history of our debt from the declamations with which certain newspapers are perpetually charged, would be led to suppose that it is the mere creature of the present government for the purpose of burthening the people with taxes, and producing an artificial and corrupt influence over them; he would, at least, take it for granted that it had been contracted in the pursuit of some wanton or vain project of ambition or glory; he would scarcely be able to conceive that every part of it was the relict of a war which had given independence and preserved liberty to the country; that the present government found it as it is, in point of magnitude (except as to the diminutions made by itself), and has done nothing more than to bring under a regular regimen and provision what was before a scattered and heterogeneous mass.
And yet this is the simple and exact state of the business. The whole of the debt embraced by the provisions of the funding system consisted of the unextinguished principal and arrears of interest of the debt which had been contracted by the United States in the course of the late war with Great Britain, and which remained uncancelled, and the principal and arrears of interest of the separate debts of the respective States contracted during the same period, which remained outstanding and unsatisfied, relating to services and supplies for carrying on the war. Nothing more was done by that system than to incorporate these two species of debt into the mass, and to make for the whole one general, comprehensive provision.
There is, therefore, no arithmetic, no logic, by which it can be shown that the funding system has augmented the aggregate debt of the country. The sum total is manifestly the same; though the parts which were before divided are now united.
There is, consequently, no color for an assertion that the system in question either created any new debt, or made any addition to the old.
And it follows that the collective burthen upon the people of the United States must have been as great without as with the union of the different portions and descriptions of the debt. The only difference can be, that without it that burthen would have been otherwise distributed, and would have fallen with unequal weight instead of being equally borne as it now is.
These conclusions which have been drawn respecting the non-increase of the debt proceed upon the presumption that every part of the public debt, as well that of the States individually as that of the United States, was to have been honestly paid.
If there is any fallacy in this supposition, the inferences may be erroneous, but the error would imply the disgrace of the United States, or parts of them—a disgrace from which every man of true honor and genuine patriotism will be happy to see them rescued.
When we hear the epithets, “vile matter,” “corrupt mass,” bestowed upon the public debt, and the owners of it indiscriminately maligned as the harpies and vultures of the community, there is ground to suspect that those who hold the language, though they may not dare to avow it, contemplate a more summary process for getting rid of debts than that of paying them. Charity itself cannot avoid concluding from the language and conduct of some men (and some of them of no inconsiderable importance), that in their vocabularies creditor and enemy are synonymous terms, and that they have a laudable antipathy against every man to whom they owe money, either as individuals or as members of the society.
It has been said that the sum of the debt to be ultimately provided for has been artificially increased by the plan for the settlement of accounts between the United States and individual States. This point will most properly be the subject of a distinct examination, as the act which settles the accounts is a distinct one from that which establishes the funding system. It will appear, upon examination, that there is no foundation for the assertion, and, moreover, that the plan which has been adopted by the present government for the settlement of the accounts is essentially a recapitulation of that which was adopted under the Confederation, and which established principles which were not only equitable in themselves, but could not have been reversed without an infraction of the public faith.
NUMBER THREE
MY LAST NUMBER CONTAINED A concise and simple statement of facts tending to show that the public debt was neither created nor increased by the funding system, and, consequently, that it is not responsible either for the existence or the magnitude of the debt.
It will be proper next to examine the allegations which have been made of a contrary tendency.
In the first place, it is asserted that the debt is greater than it ought to be, because, from the state of depreciation in which the government found it, a much less provision for it than that which was made might have sufficed. A saving of nearly one half, it is said, might have been made by providing for it in the hands of alienees, at least at 8s. or 10s. in the pound, who, having come by it at a much less rate, would have been well compensated by such a provision.
To a man who entertains correct notions of public faith, and who feels as he ought to feel for the reputation and dignity of the country, it is mortifying to reflect that there are partisans enough of such a doctrine to render it worth the while to combat it. It is still more mortifying to know that in that class are comprehended some men who are in other respects sober-minded and upright, friends to order, and strenuous advocates for the rights of property.
In reasoning upon all subjects, it is necessary to take, as a point of departure, some principle in which reasonable and sound minds will agree. Without this there can be no argument, no conclusion, in moral or political more than in physical or mathematical disquisitions.
The principle which shall be assumed here is this, that the established rules of morality and justice are applicable to nations as well as to individuals; that the former as well as the latter are bound to keep their promises; to fulfil their engagements to respect the rights of property which others have acquired under contracts with them. Without this there is an end of all distinct ideas of right or wrong, justice or injustice, in relation to society or government. There can be no such thing as rights, no such thing as property or liberty; all the boasted advantages of a constitution of government vanish into air. Every thing must float on the variable and vague opinions of the governing party, of whomsoever composed.
To this it may be answered that the doctrine, as a general one, is true, but that there are certain great cases which operate as exceptions to the rule, and in which the public good may demand and justify a departure from it.
It shall not be denied that there are such cases; but as the admission of them is one of the most common as well as the most fruitful sources of error and abuse, it is of the greatest importance that just ideas should be formed of their true nature, foundation, and extent. To minds which are either depraved or feeble, or under the influence of any particular passion or prejudice, it is enough that cases are only attended with some extraordinary circumstances to induce their being considered as among the exceptions. Convenience is with them a substitute for necessity, and some temporary, partial advantage is an equivalent for a fundamental and permanent interest of society. We have too often seen in the United States examples of this species of levity. The treaties of the United States, the sacred rights of private property, have been too frequently sported with, from a too great facility in admitting exceptions to the maxims of public faith and the general rules of property. A desire to escape from this evil was a principal cause of the union which took place among good men to establish the national government; and it behoved its friends to have been particularly cautious how they set an example of equal relaxation in the practice of that very government.
The characteristics of the only admissible exceptions to the principle that has been assumed, are—1st. Necessity. 2d. There being some intrinsic and inherent quality in the thing which is to constitute the exception, contrary to the social order and to the permanent good of society.
Necessity is admitted in all moral reasoning as an exception to general rules. It is of two kinds, as applied to nations—where there is want of ability to perform a duty, and then it is involuntary; and where the general rule cannot be observed without some manifest and great national calamity.
If from extraordinary circumstances a nation is disabled from performing its stipulations, or its duty in any other respect, it is then excusable on the score of inability. But the inability must be a real, not a pretended, one; one that has been experimentally ascertained, or that can be demonstrated to the satisfaction of all honest and discerning men. And the deviation ought to be as small as possible; all that is practicable ought to be done.
A nation is alike excusable in certain extraordinary cases for not observing a right or performing a duty, if the one or the other would involve a manifest and great national calamity. But here, also, an extreme case is intended; the calamity to be avoided must not only be evident and considerable — it must be such an one as is like to prove fatal to the nation, as threatens its existence, or at least its permanent welfare.
War, for instance, is almost always a national calamity, of a serious kind; but it ought often to be encountered in protection even of a part of the community injured or annoyed; or in performance of the condition of a defensive alliance with some other nation.
But if such special circumstances exist in either case, that the going to war would eminently endanger the existence or permanent welfare of the nation, it may excusably be forborne.
Of the second class of exceptions, the case of certain feudal rights, which once oppressed all Europe, and still oppress too great a part of it, may serve as an example; rights which made absolute slaves of a part of the community, and rendered the condition of the greatest proportion of the remainder not much more eligible.
These rights, though involving that of property, being contrary to the social order, and to the permanent welfare of society, were justifiably abolished in the instances in which abolitions have taken place, and may be abolished in all the remaining vestiges.
Wherever, indeed, a right of property is infringed for the general good, if the nature of the case admits of compensation, it ought to be made; but if compensation be impracticable, that impracticability ought not to be an obstacle to a clearly essential reform.
In what has been said, the cases of exception have been laid down as broad as they ought to be. They are cases of extremity—where there is a palpable necessity—where some great and permanent national evil is to be avoided—where some great and permanent national good is to be obtained. It must not be to avoid a temporary burthen or inconvenience—to get rid of a particular, though a considerable evil, or to secure a partial advantage. A relaxation of this kind would tend to dissolve all social obligations—to render all rights precarious, and to introduce a general dissoluteness and corruption of morals.
A single glance will suffice to convince that the case of the debt of the United States was not one of those cases which could justify a clear infraction of the fundamental rules of good faith, and a clear invasion of rights of property acquired under the most unequivocal national stipulations.
If there was any doubt before, the real facility with which a provision for the debt has been made removes it; a provision which touches no internal source of revenue but the single article of distilled spirits, and lays upon that a very moderate duty.
But a history of the real state of the debt when it was taken up by the government will put the matter out of all doubt. This shall constitute the subject of my next number.
NUMBER FOUR
THE DEBT PROPER, OR THE original debt of the United States, in its primary sense, may be classed under four general heads: 1st, the old emissions of Continental money; 2d, the loan office debt, contracted for moneys lent to the government; 3d, the army debt, contracted for the pay and commutation of the army: 4th, the debt of the five great departments, as they are called in the resolution of Congress, being for services and supplies in the Marine Department, the Quartermaster’s, Commissary’s, Clothing, and Hospital Departments.
Emanations from these were the registered debt, so denominated from new kinds of certificates issued by the Register of the Treasury in lieu of the former evidences. Indents of interest being a species of paper payable to bearer, which, by different resolutions of Congress, were issued on account of arrears of interest on the old debt. The new emission money is not added to the enumeration, because it was issued upon funds of the respective States, with only a guaranty of the United States, and falls, perhaps, most properly, in the class of State debts.
Of this original debt, it appears by a statement of the Register of the Treasury, published Sept. 30, 1791,1 not less than $16,900,203 73 in its first concoction, belonged to citizens of the States from Pennsylvania to New Hampshire inclusively; the remaining belonging to States from Maryland to Georgia inclusively, in nearly the following proportions: to Maryland, $1,697,910 34; to Virginia, $1,024,104 26; to North Carolina, $28,994 75; to South Carolina, $299,109 88; to Georgia, $97,233 03. The reasons of this state of things are obvious. Until the year 1779 the principal theatre of the war had been in the States from Pennsylvania north; and after that period, to the close of it, the principal part of the enemy’s force remained stationary at New York, which obliged the keeping up in the same quarter large bodies of troops till the termination of the war.
The natural consequence of this state of things was, that a very large proportion of the means for carrying on the war—men, money, and other supplies—were drawn from the States comprehended in the first division. They indeed possessed greater comparative resources than the more southern States, and with only the same degree of zeal could furnish more to the common cause. Obvious causes always conspire to occasion larger aids to be drawn from the vicinity of the war than from more distant parts of the country, and the main dependence of the United States being credit, a large debt was created in the scene from which the principal supplies came.
The use of this statement of the original distribution of the debt will appear hereafter.
A leading character of every part of the debt is, that it was in its origin made alienable. It was payable to the holder, either in capacity of assignee or bearer, far the greatest part of the latter description. The contract, therefore, was, in its very issue, a contract between the government and the actual holder.
A considerable part of the debt was consequently alienated by the first proprietors at different periods, from its commencement down to the time of passing the funding act.
But this has been much exaggerated, both as to the quantity alienated and as to the rates of alienation. The declamations on the subject have constantly represented far the greatest part of the debt in the hands of alienees, and have taken the lowest price at which it ever was in the market as the common standard of the alienation. The changes have been rung upon two shillings and sixpence in the pound, in all the arguments which have advocated a violation of the rights of the alienees.
Neither the first nor the last supposition is true. As to the first point, namely, the quantity of the debt alienated, there are no documents by which it can be satisfactorily ascertained, which of course gives full scope to imagination.
But there is an important fact which affords strong evidence that the quantity has always been much less considerable than has been supposed.
In the year 1786 the State of New York passed a law permitting the holders of Continental securities to bring them in and receive in exchange for them State securities upon certain conditions, which were generally deemed for the advantage of the holders to accept. The same arrangement embraced an exchange of old State securities for new.
In the event of this exchange, which was completed by the 1st of May, 1787, it appeared that about two thirds1 of the debt remained in the hands of the original proprietors.
Alienations after this period….
It may be stated as a fact, that there always has prevailed in the States north of New York, a more firm confidence in an eventual provision for the debt than existed in that State; and it may be inferred that the alienation was still less in those States than in the State of New York.
In Jersey and Pennsylvania, it is probable that the alienations were not more considerable in their degree than in New York. In Maryland they may be supposed to have been still less, on account of that State having made a better provision for its debt than any other, and having included in it Continental securities in the hands of its own citizens by an exchange of certificates.
It is probable from information, though not certainly known, that a more considerable alienation in proportion had taken place in the States south of Maryland. But making all due allowance for this, and taking into the account that the principal part of the debt was originally owned from Pennsylvania north, the probability still is, that the progress of alienation has been much less rapid than has been conjectured. Nothing is more natural than a mistake on this point. The dealers in the debt in the principal cities appeared to be continually engaged in buying and selling large sums; and it has not been their fault generally, to underrate the extent of their dealings. Thence it came to be imagined that the whole debt, or the greatest part of it, was in the market; whereas a small sum comparatively was sufficient to satisfy all the appearances. Bandied incessantly from hand to hand, a few hundred thousand dollars appeared like as many millions.
The best inquiries on the subject will lead to an opinion that there never was, prior to the funding system, three millions of dollars of floating debt in all the great stock markets of the United States. And the whole sum which had been acquired by foreigners, was about ———. From all which it is very questionable whether one third of the debt in the hands of alienees at the time when Congress began to deliberate concerning a provision for it would not be an ample allowance.
With regard to the terms of alienation, they have varied from 20s. down to 2s. 6d. in the pound.
There are several considerable classes of alienees, who hold the debt at full or high values:
I. Those who advanced moneys or furnished supplies to public officers upon loan-office certificates, issued to those officers in their own names. An example of this exists in the cases of purchases made during the war by public officers. Warrants from the Treasury would frequently be drawn in their favor upon the commissioners of loans, who would often furnish loan-office certificates in their own names in payment of those warrants. For these certificates the officers would sometimes procure the current paper in exchange, and would transfer the certificates to those who advanced the money. In other cases they would pay for supplies in the certificates themselves, which they would in like manner transfer. This is a very extensive case.
II. Those whose money has been placed in the funds by trustees or agents, who took out certificates in their own names, and afterwards assigned them to the true proprietors.
An instance of this was mentioned in the debates in Congress on the subject of a discrimination between original and present holders, and can be ascertained by any one who will take the pains to inquire. It was that of a Mr. Caldwell, a respectable clergyman and zealous patriot in New Jersey, who acted for some time during the war in the capacity of deputy quartermaster. In that capacity he frequently had money to pay to individuals, which, at their desire, he would place in the loan-office for them, take certificates in his own name, and afterwards transfer them to the persons whose money he had deposited. There are likewise instances, not a few, of trustees and agents for absent persons and minors, who placed the moneys of those whom they represented in the loan-offices, took out certificates in their own names, and afterwards transferred them to the parties entitled.
III. Those who, by laws of particular States, were compelled to take certificates at the full value in payment of debts.
A law of the State of New York, passed in the year ———, obliged all persons who had resided within the British lines during the war to receive, in satisfaction of their debts from those who had been without the lines, certificates.
IV. Those who, at different periods, voluntarily received certificates in payment of debts. This, in some States, is a very extensive case. From the precarious situation in which all persons were placed by the Revolution, whose property was merely personal, it was no uncommon thing for creditors to receive from their debtors certificates in payment of debts; and this was almost always at high values.
Even since the peace, compromises between creditors and debtors, especially those whose fortunes had been injured by the war, in which certificates were received at full value.—Cætera desunt.
PAYMENTS OF PUBLIC DEBT
August 29, 1792.
The following authentic documents respecting the progress which has been made by the present Government of the United States, toward extinguishing the debts contracted under the former Government, will, it is presumed, be very acceptable to the people of the United States; and it is hoped that the different editors of newspapers will give the information the general circulation which its importance merits.
I
Treasury Department, Register’S Office,
August 24, 1792.
Sir:—I have the honor to enclose an abstract and statement of the debt incurred by the late Government, and which has been paid off from the funds of the present Government, amounting to one million eight hundred and forty-five thousand two hundred and seventeen dollars forty-two cents; but this sum will be increased, when the balance of three hundred and ninety-seven thousand twenty-four dollars thirteen cents, remaining to be appropriated to the further purchase of the public debt, shall be applied, and which more particularly appears by the subjoined statement.
With every sentiment of the highest respect, I have the honor to be, Sir,
Your most obedient and most humble servant,
Joseph Nourse,
Register.
Hon. Alexander Hamilton,
Secretary of the Treasury.
II
STATEMENT OF THE BALANCE WHICH remains to be applied to the further purchase of the Public Debt
By the Act passed 12th August, 1790, making provision for the reduction of the Public Debt, Section 2d, it is enacted, That all such surplus of the product of the duties arising from impost and tonnage to 31st December, 1790, after satisfying the several appropriations therein specified, shall be applied to the purchase of the public debt.
The product of said duties were . .
$3,026,070 65⅛
The total appropriations were . .
1,687,194 81
The surplus fund to 31st December, 1790
$1,338,875 84⅛
Deduct the amount paid for $1,456,743 18 of the public debt extinguished as per abstract . . . . .
941,851 69
Leaves a balance which remains to be applied to the further purchases of the public debt . . . . .
$397,024 15⅛
III
An abstract Statement of the sum extinguished of the Public Debt, also of the payment from the funds of the present Government of certain claims which were incurred by the late Government.
Purchases of the Public Debt
Amount thereof extinguished . . .
$1,456,743 38
Warrants drawn by the Board of Treasury under the late Government, and which have been discharged in pursuance of the Act of Congress of 29th September, 1789 . . . .
157,789 94
Civil List: for various payments made upon accounts which originated under the late Government . . .
25,768 50
War Department, being for arrearages of pay due to sundry officers of the army, and for provisions furnished . .
7,308 40
Abraham Skinner, late Commissary General of Prisoners, for the Board of American Prisoners of War at Long Island; appropriated by Congress, per their Act passed 12th August, 1790
38,683 13
Representatives of Mr. de Decoudray, balance of pay . . . . .
2,977 24
Ditto Hon. John Laurens, his salary on an embassy to the French Court . .
6,017 31
Francis Dana, salary on an embassy to the Court of St. Petersburg . .
2,410 30
Benson, Smith, and Barker, their expenses attending the embarkation of the British troops at New York . .
1,000 00
His Most Christian Majesty, for military and ordnance stores supplied to American ships of war in the French West Indies . . . . . .
$ 29,029 68
Oliver Pollock, for balance due him for supplies at New Orleans, with interest thereon, in conformity with the several Acts of Congress . . .
108,605 00
MM. Gardoqui & Son, balance due for supplies furnished in Spain . . .
502 86
$550,542 14
Bills of exchange, which had been drawn on Foreign Commissioners, not paid by them . . . . . .
4,185 50
Timothy Pickering, late Quartermaster-General, being on account of the appropriation of $40,000, passed July 1, 1790 . . . . . . .
2,077 89
Grants of Congress, viz.:
John McCord, per Act of Congress of 1st July, 1790 . . . . .
1,309 71
Jehoakim M. Tocksin, per Act of Congress of the 26th of March, 1790 . .
120 00
Baron de Glaubeck, per Act of 29th September, 1789 . . . . .
140 26
Seth Harding, per Act 11th August, 1790 .
200 00
Caleb Brewster, ditto, ditto . . .
348 57
$2,118 54
$1,845,217 42
Treasury Department, Register’s Office, August 23, 1792.
Joseph Nourse,
Register.
CIVIS TO MERCATOR
I
September 5, 1792.
Certain Treasury documents were lately published for the information of the community, without any precise designation of the purpose for which they were published. They were left to speak for themselves, with only a short introduction, denominating them “Authentic documents respecting the progress which has been made by the present Government of the United States towards extinguishing the debts contracted under the former Government.”
A writer in this Gazette1 of Saturday last, under the signature of Mercator, has thought fit to come forward, and, assigning what he conceives to be the object of the publication, endeavors to show that the contrary of what was intended is true.
What right had Mercator to suppose, that any thing more was intended, than simply to inform the public that besides a punctual payment of the interest on the debt, from the period at which measures were matured to begin that payment, a considerable sum of the Capital of the Debt has been extinguished, and that a further sum will be extinguished by a provision already made? leaving them to this very natural inference, which will be drawn by every candid mind, that the Government has been as attentive as circumstances would permit, at so early a period, to the extinguishment of the debt.
But admitting Mercator to be right in his suggestion of the object, it is presumed that a liberal construction of all circumstances will justify the position, that the present Government has reduced the debt of the former Government to the extent expressed in the documents which have been published. This will result, if it shall appear that provision was made for the interest as early as was reasonably practicable. To have paid the interest from that period, and to have sunk so much of the capital in addition, is, in fair construction, to have reduced the debt to the extent of the capital sunk.
When Mercator undertook to suppose an object which was not declared, he ought to have taken care to be better informed and more accurate. When he undertook to state an account with the Treasury Department, he ought not only to have selected just items, to have adverted to dates, times, and possibilities, but he ought to have stated the whole account.
This he has not done; on the contrary he has both misrepresented and suppressed facts. He has shown in the true spirit of a certain junto (who, not content with the large share of power they have in the government, are incessantly laboring to monopolize the whole of its power, and to banish from it every man who is not subservient to their preposterous and all-grasping views), that he has been far more solicitous to arraign than to manifest the truth—to take away, than to afford consolation to the people of the United States.
The following particulars are proofs of his want both of accuracy and candor.
First.—He charges to the Treasury Department arrears of interest which accrued prior to its existence, that is, from the 1st of August, 1789; whereas the department was not instituted till the 2d of September, nor organized till about the 13th, when, I am informed, the Secretary of the Treasury entered upon the duties of his office.
Secondly.—He takes as the standard of his calculation, the whole amount of the annual interest on the whole amount of the public debt, as it exists under the present funding system, including all the arrears of interest made principal, and the $21,500,000 of assumed debt—whereas the arrears which did actually accumulate to the end of the year 1790, were only on the principal of the foreign and domestic debt, and fall short more than a million of dollars of the sum he states.
These simple facts prove the fallacy of his statement.
But the principle upon which he proceeds is not less absurd than his calculations are fallacious.
With as much propriety might an executor be charged with increasing the debts of his testator, by suffering the arrears of interest on his bonds and notes to accumulate, while he was collecting, arranging, and disposing of the estate, as the present Government, or, if the phrase is preferred, the present Treasury Department, may be charged with those arrearages which unavoidably accrued during the preparatory measures for bringing the resources of the public estate into activity. With as much reason might it be charged with the $13,000,000 of interest, which accumulated under the imbecile system, the old Confederation, to which, if not to worse,—a dissolution of the Union!—the designs of the junto evidently point or tend.
When, proceeding upon grounds so loose and unjust, Mercator makes the extraordinary declaration, that the Secretary of the Treasury “has produced an actual addition to the public debt of more than one million and a half of dollars,” is it not palpable, that in the most malignant spirit of party he is endeavoring to destroy the public confidence in that officer, no matter how unfair the means, as one link in the chain of measures by which the domineering aims of his party are to be effected, or the cause of confusion promoted? Is it not clear that, in the language and conceptions of Mercator, to provide for a debt and to “produce” it, amount to the same thing?
To form a still better estimate of the spirit by which he is actuated, let there be a review of some leading facts.
Congress met under the present Government on the 1st of April, 1789. To put it in motion they had a vast and very arduous work before them. This was of course a primary object; a provision for the debt, a secondary one. It was natural then, that the first session should have been exhausted in organizing the Government, and that a systematic provision for the debt should be postponed, as in fact it was, to the second session. A temporary and partial provision of revenue only was accordingly made by very moderate duties of impost, far short of an adequate fund for the support of Government and the payment of the interest on the debt, to take effect on the 1st of August, 1789; which was as early as the law could be promulgated throughout the Union, and the subordinate executive arrangements made for carrying it into execution.
It has been stated that the Treasury Department began to be in activity on the 13th of September. Congress adjourned on the 29th of that month, after having instructed the Secretary of the Treasury to report concerning the debt at the ensuing session. It is to be recollected that without an order of the House that officer can propose nothing.
It is evident that there was no responsibility on the side of that department for the accumulation of interest on the debt until, at earliest, the second session, which began on the 7th of January, 1790.
On Thursday, the 14th of January, the Secretary of the Treasury submitted to the House of Representatives, according to order, the plan of a provision for the public debt, comprehending an additional provision of revenue for the purpose of facing the interest. But it was not till the 4th of August that the principles of a provision for the debt were determined by law, nor till the 10th of the same month that a supplementary fund was established for paying the interest upon it; and from considerations of an obvious nature the commencement of this fund in operation was deferred to the 1st of January following.
Here, again, ’t is manifest that there was no responsibility in the Treasury Department for the accumulation of interest up to the period from which it has been punctually paid—namely, the 1st of January, 1791,—because it was not in the power of that department to have accelerated a provision for it. Nor will any blame justly light upon Congress for the moderate delay which ensued. It was their duty to bestow much deliberation upon the subject. Much difference of opinion—much discussion—a considerable loss of time, were to be expected in relation to a subject so momentous, so perplexing, touching so differently so many chords of passion and interest.
The law providing for the debt having passed, the Secretary of the Treasury immediately seized the opportunity which was afforded by an unappropriated surplus of revenue to the end of the year 1790 to make an impression on the debt. He proposed that it should be applied to purchases of the debt at its market prices, which was agreed to by Congress, and has been carried into execution as far as circumstances have hitherto permitted.
This was certainly the best application that could have been made of the fund. It was equally the interest of the Government and of the public creditors:—of the Government, because it was a clear gain of all the difference between the sum of specie paid and the sum of debt redeemed, which is already $514,-891 69, and will be more when the remaining sum appropriated comes to be applied to further purchases; because it was a clear saving to the nation of all the difference in price which was paid by foreigners in their purchases, in consequence of the competition of the Government in the market as a purchaser. It is well known to every well-informed man that the rapid appreciation of the debt was materially owing to that circumstance, and of course the saving to the nation by it has been very considerable. The measure in question was equally beneficial to the public creditors—because, if the fund applied to purchases had been apportioned among them in payment of interest, it would have been a mere pittance; but applied as it was, it gave a rapid spring to the whole value of the stock.
As it is therefore proved that the Treasury Department is chargeable with no delay with regard to a provision for the debt, occasioning an unnecessary accumulation of interest, in a question of merit respecting that department which Mercator has raised, it will follow that the department, on account of the operations which have been advised by it, has an unbalanced claim of merit with the community—
1st.—For all that has been or shall be saved by purchases of the public debt at the market prices.
2d.—For all that has been saved to the nation, for the more advanced prices given by foreigners in their purchases of the debt.
But there are other items of importance to be placed on the same side of the account.
1st.—The saving resulting from the reduced rate on the new loans for paying off the foreign debt.
2d.—The positive gain of 1,000,000 of dollars, by the institution of the Bank of the United States. The stock of the bank being at an advance of 50 per cent., it is clear that the Government, by having become a proprietor to the extent of 2,000,000 of dollars, has by this single operation made an actual net profit of 1,000,000 of dollars—that is, it can get three millions for what will have cost it only two.
I add nothing for any saving which has accrued from the particular modification of the domestic debt, for two reasons: one, because the subject being more complicated would require more illustration; and the other, because the plan adopted by the Legislature, though having the leading features of that proposed by the Treasury Department, differs from it in some material respects,—a strong refutation of the idea, so industriously inculcated, that the plans of that department are implicitly followed by the Legislature, and a decisive proof that they have had no more weight than they ought to have had—that is to say, than they were entitled to from their intrinsic reasonableness in the unbiassed and independent judgment of majorities in the two Houses of Congress. The result of what has been said is this: that provision was made for paying the interest of the debt as early as could reasonably have been expected; that no negligence having happened, the arrears of interest which have accumulated in the interval are properly a part of the debts of the former Government; and consequently, that the sums which appear to have been absorbed are so much of the debts of the old Government extinguished by the new.
Mercator brings as a proof that the public debt has increased and is increasing, what he terms “the present amount and increasing weight of the duties of impost and excise.” Let facts decide the soundness of this logic. In the last session of Congress, the only excise duty which exists was reduced upon an average fifteen per cent. The only addition which was then made to the imposts was for carrying on the Indian war, and by avoiding recourse to permanent loans for that purpose, to avoid an increase of the debt. How then can that which was done to avoid an increase of debt, be a proof that it has increased?
Civis.
II
Philadelphia,
September 11, 1792.
Little other notice of the futile reply of Mercator to Civis is necessary, than merely to put in a clear light the erroneousness of the standard which he has adopted for calculating the arrears of interest to the end of the year 1790.
He takes for his standard, the present annual interest on the whole amount of the public debt, as provided for under the funding system—that is, 1st. Upon the former principal of the foreign and domestic debt; 2d. Upon the arrears of interest of that principal, which on the 1st of January, 1791, and not before, became principal, by the provisions of the funding law; 3d. Upon the whole amount of the assumed debt—that is, $21,500,000.
Now, the fact is, that the only arrears which can colorably be computed are those on the principal of the foreign and domestic debt, according to the terms of interest which they actually bore up to the 1st January, 1791. 1st. Because, in fact, the arrears of interest on that principal did not bear interest till the 1st of January, 1791; and consequently no interest whatever accrued upon them. And 2d, because the Government of the United States took up the State debts as they stood at the end of the year 1791. If arrears of interest accumulated in the meantime, ’t was the affair of the State governments, which were the debtors and alone responsible for a provision for it, not of the Government of the United States, which only became responsible by virtue of the assumption from the time that it took effect—that is, from the 1st of January, 1792, from which period the interest has been punctually paid. This is the true view of it, unless it can be shown that the Government of the United States is answerable for the neglects and omissions of the State governments. But what arrears may have really accumulated on this part of the debt is unknown, as it is understood there was in some States a provision for the interest.
Calculating then the arrears which did actually accrue—that is, on the principal and interest of the foreign and domestic debt, the former, according to the various rates which were stipulated upon it, and the latter at six per cent., the rate which it then bore, from the 1st of August, 1789, to the 1st of January, 1791, from which period interest has been paid, the amount is $3,003,378 47—that is, $1,032,980 72 less than the amount of the arrears for the same period by Mercator. This statement is not made from any secret sources of information, but from documents long since in the possession of the public. If Mercator has been inattentive to the means of information he ought not to come forth the instructor of his fellow-citizens.
In a mere question of the increase and decrease of the public debt, if the arrears of interest which accrued on the assumed debt, up to the period from which the United States began to pay interest upon it, be placed on one side of the account, the saving or reduction, by the nature of the provision for it, ought to be placed on the other side, and the balance will be in favor of the United States.
Had Mercator stated an account with the Treasury Department on his own principle candidly applied—namely, that of setting off the surplus of revenue to the end of the year 1790 against the amount of the debt redeemed by purchasers and payments, the account would have stood thus:
Debtor Side
To amount of surplus revenue at the end of the year 1790 . . . .
$1,338,875 84
Credit Side
By the amount of the sum which appears by the statement of the Register of the Treasury to have been redeemed and paid off . . . . .
$1,845,217 42
By sum remaining to be applied . .
397,024 13
$2,242,241 55
Balance . . . .
$903,365 71
being the amount of the public debt actually reduced beyond the amount of the funds remaining on hand at the commencement of the operation of the funding system, in virtue of antecedent provision, and exclusive of reductions on the rates of interest.
