Part 92

It had been said we came forward as volunteers; that the original holders did not put in their claim. That might be easily accounted for; they were generally obscure and indigent; had too much modesty, or perhaps not the capacity, to come forward. That he believed the crowd in the gallery did not consist of original holders.

Mr. HARTLEY.--I do not wish to trespass upon the time of the committee, but I cannot consent to give a silent vote on this occasion. I mean, however, to confine myself to a few observations, as many of my ideas have been communicated by other gentlemen. The honorable gentleman from South Carolina (Mr. SMITH) has anticipated much of what I had to urge; I shall therefore reduce my view of the subject to two points; first, as to the justice or legality of the measure, in obliging a creditor, or assignee, to take less than a certificate expresses, and pay the difference to another: second, as to the practicability or policy of the motion and its consequences.

As to making further satisfaction to the officers and soldiers of the late army, who have sold their certificates for an inconsiderable sum, and who have in consequence reaped a less reward than the Government contracted for, and intended them, I conceive it has nothing to do with the present question. However, if there is a disposition in Congress to make a further compensation to those brave and meritorious men, I would be among the first to support the measure; but I think this a subject too momentous to be involved collaterally in the question now under consideration.

With respect to the first point that offers itself, I have to remark, that a man who enters into a contract should know the consideration, and understand the principles upon which it is made, and these should be expressed on the face of the evidence of the contract. Now, if this contract be of a negotiable nature, the person to whom the same is offered, looks on its face, from which it discovers the agrementum, and is naturally led to consider the circumstances of the debtor, his ability and integrity. Suppose even the evidence of the contract to be obtained by fraud, unless it be against the express provision of a statute, and is transferred to a third person for a valuable consideration, without notice of fraud, it, must be paid. A fraud in any link of the chain is corrected by a bona fide transfer for a valuable consideration, without a knowledge of that circumstance by the purchaser.

Now, let us apply these principles to the present case. Here is an instrument of writing, specifying a debt to be due from the United States to the original holder, or bearer; this being brought into market, is offered to a third person, he, before his purchase, sees that the contract was executed in consequence of a consideration, and not against any positive statute; he then inquires the ability of the Union, and its disposition to comply with the contract; and, from a consideration of these circumstances, he concludes, with respect to his own interest and safety in the purchase, and pays what is conceived to be the value. What is there to discharge the Government from the payment? Is it pretended that the services and supplies were an inadequate compensation? If it even was so supposed, it would not authorize us to refuse a compliance with our engagements; any interference would set afloat the great principle upon which the public tranquillity and happiness depend. This leads me to consider the subject in my second point of view, with respect to its policy and practicability, and the consequences that would result from the attempt.

There are but few original holders who have transferred, that can be found; of consequence, you would throw the major part of the debt into an intricate labyrinth. The present possessor would be shifting back the certificate to the original holder, as far as a latitude is given. Many persons who were bare trustees, would be reaping advantages, and drawing money from the Public Treasury, to which they are not entitled; oaths would be multiplied on oaths; perjuries on perjuries; fraud upon fraud; and every species of speculation would ensue; deception would be a strong trait in the character of the times, and the whole of the United States would be in motion, each endeavoring to prey upon the other. The consequences of a second inundation of this nature are to be dreaded, and ought to be carefully avoided.

Mr. MOORE observed, that it was agreed on all hands, and proposed in the report of the Secretary, that some discrimination ought to take place. It was, therefore, incumbent on the House to inquire how this might be effected with the greatest degree of equity. He supposed the result would be, that we are at liberty to pay the most meritorious first. Who constituted this class of citizens? He trusted the late army had an incontrovertible title to it. He could never believe that the men who stripped the soldiers of their hard earnings, by allowing them a tenth of their claim, would have the temerity to pretend that they had acquired the title of merit with their money, and that the soldier relinquished, with his certificate, the honor of his corps.

Had the present question been agitated in the hour of distress, when an army was essential to our defence, the arguments of justice and equity would have had their weight. Perhaps it is the soldier's misfortune, that the question arises at a time when the object for which he was employed is secured. But notwithstanding all that has been said, I am fully convinced that his claim is insuperable in equity. The soldier did not engage to fight your battles to be compensated with a certificate, acknowledging you were indebted to him; it was specie you promised, and specie he had a right to expect, or something equal to it in reality. The public faith was actually pledged to him for a compensation for his services; but will any one say the public faith was inviolably kept with him, when a certificate, worth but two shillings in the pound was forced upon him as specie? The poor soldier, thus situated, was followed by gangs of speculators, who endeavored to impose on his judgment by the relation of artful and insidious opinions of the public capacity and integrity in the discharge of these acknowledgments. The soldier, incapable of detecting the specious falsehood, swallows the bait, and becomes the easy prey of designing men. The people felt and resented the injuries thus perpetrated on those they esteemed; and I am much mistaken if the citizens of America do not still retain favorable impressions of the soldiers' services.

A great deal has been said, with respect to public opinion on this question. It is impossible, perhaps, to ascertain the public mind with precision; but there is but one way in our power, that is, to suffer the subject to be suspended for the present session, and on our return, or the election of our successors, the public sentiment in this respect will be evinced; but if we are to determine the public mind from our own observation, I should not hesitate to say that nine out of ten would be in favor of a discrimination. The people would, on this principle, I conceive, submit cheerfully to the payment of those taxes which are requisite to discharge the public engagements; but if they are to flow into the large cities, or into the hands of foreigners, who have speculated upon the misfortunes of the most meritorious class of our citizens, they will bear the burthen with murmurs and complaints.

Can any principle of justice demand the payment of the present possessor of a certificate, that does not apply more forcibly as it respects original holders? Will gentlemen, then, comply with the one, and neglect the other? Or rather, as my colleague has proposed, if they are incapable to pay both, will they not prefer a composition?

Mr. WADSWORTH.--It appears to me that we have mistaken this business from the beginning, for we are proceeding as if it was taken for granted that all those who had alienated their certificates, have been compelled to it by necessity; there is nothing further from the truth. So far as it respects the army debt it may be just; and at this moment, were a soldiery to be paid in certificates, they would part with them at as great a discount as ever. There is a disposition in soldiers generally to despise pecuniary considerations; if they want money, they will dispose of their property at an inconsiderate value to obtain it. But this remark does not extend to the industrious part of the public creditors, because they have carefully retained the evidences of their debt, and now will receive its value. But even of the army, it is not true that they will suffer the loss of the discount at which their certificates have been sold. Having an opportunity of being well acquainted with the circumstances of the army, I know that many of the officers lived upon their friends, who supported them from time to time, with such sums as they had occasion for, and when they retired from the army, they repaid their friends with the certificates which they had received. The best way for gentlemen to ascertain the amount of the public debt which has been transferred from necessity, is to mix in the world, and try, from the circle of their acquaintance, to learn what the actual transfers have been. I have done this, and am conscious within myself, that seven-eighths of all the alienated debt has not been disposed of by the original holder from necessity.

When the requisitions of Congress were rejected by the State Assemblies, some of the most wealthy persons of the community, and those most violently opposed to Continental measures, seemed to concur in the opinion, that the States would never raise a revenue for the purpose of paying the domestic debt. The people finding this a prevailing opinion, were impressed with a dread of its consequences, and sold this species of negotiable property at a rate dictated by their apprehensions. I should conceive it as a great evil, if the Government were now to restore to such persons what they lost for want of confidence. I think this circumstance will operate considerably against the gentleman's principle of equity; now, as to the practicability of the measure, those gentlemen who are acquainted with the history of the manner in which the public debt was contracted, will readily agree with me, that it is an insuperable objection. In the years 1776 and 1777, very few advances were made to those who procured supplies to the public; they purchased what they got generally upon credit, and they were obliged, before their accounts could be settled, and they could get their money from the Public Treasury, to get receipts for all the articles they had furnished, and then they received orders upon the loan-officers, who, not having money, paid them in certificates, which these people, in return, paid over to those who furnished them with supplies. So that the agent appears a creditor to a very considerable amount, when his personal claim is very trifling, and those who risked their property, without pay of any kind, and who are undoubtedly deserving of some credit, appeared to be no other than speculators in public securities. I cannot see, in this case, any possible mode of discrimination. There are a variety of other official transactions which would demonstrate the impracticability, if it was necessary to oppose the proposition on that ground.

WEDNESDAY, February 17.

Public Credit.

The House again went into a committee on the report of the Secretary of the Treasury, Mr. BALDWIN in the chair.

Mr. MADISON's proposition still under consideration.

Mr. PAGE.--I do not wish to trouble the committee with a formal argument in favor of the motion offered by my colleague; but I wish to inquire of the gentlemen in opposition, whether they conceive the principles upon which it is grounded to be unjust? I observed, that their replies have generally gone against the practicability of the measure; but that does not prove to me that it is inequitable. If there is justice in the case, we must not consider the difficulty of the attempt. I trust, if it shall be found to stand on the foundation of immutable justice, that its practicability will be demonstrated. However, I shall not enter on that ground, but leave it to my colleague, who has so ably supported it on the other.

I would, however, beg gentlemen to answer these questions, and show to my mind the injustice of the United States complying with their engagements made to the first holders of certificates, as far as the case, and their abilities, will permit. Or where is the justice of doing more for the assignee than he, or his assignor, expected could or would be done? Where is the breach of faith in Government, if it pays its whole debt, with a justice, blended with mercy, resembling that of Heaven itself, making impartial retribution among the children of men, on the great day of accounts? Where is the propriety of branding a measure of this nature with epithets of infamy? or using such harsh expressions as have issued like a torrent from a gentleman on the other side of the House? So far am I from viewing the propositions through such a discolored medium, that I am induced to believe, if Congress adopt it, they may submit its rectitude, and stand the decision, of not only a superior order of beings, but of the Great Judge of the Universe, who is immutable truth itself.

What will the assignee lose by the measure? He will lose nothing, but the sanguine expectation lately raised in his mind.

Where is the interference in contracts, when the proposition is to comply sacredly, as far as the case will admit, with the contract between the State and its creditors? Is not the assignment of the certificates confirmed by the nation? Does it not give to the assignee the very thing stipulated between the assignor and assignee, that is, whatever sum the Government shall be pleased to pay for the certificate? And is not the sum now proposed, more than either the first or last assignee ever contemplated, till within a few days past, would ever be paid him?

The time is now arrived when justice ought to be done; it is looked for, with anxious expectation, by all classes of our fellow citizens; it will not avail us to say, it is impracticable, until experience has demonstrated it to be so. But the measure we contend for is termed an ex post facto law, and as such, is declared to be unconstitutional. Gentlemen torture every thing, in order to produce evidence against an act of justice. How can it be such an ex post facto law as is prescribed by the constitution, when that expression is conjunctive with a bill of attainder? It relates to that only, and can have no reference to the subject of the proposition before us. The same idea, which prevents us from an interference on the present occasion, will prevent us, as was observed by the gentleman from Georgia, from making a statute of limitation, or from correcting any frauds, which have been perpetrated on the unsuspicious soldiery. We must not contemplate the restoration of the starving soldier, with his humble wife and numerous and naked offspring, to a more eligible situation; we must not restore confidence to the man of honor who is buried in abject poverty, because it is addressing a language to the heart, which the haughtiness of the head disdains to hear; but, in doubtful cases of justice, the heart is the best director on this subject; happy will it be for us, if, as I think, they both concur to give their approbation to the present measure.

THURSDAY, February 18.

Public Credit.

The House again went into a committee on the Secretary of the Treasury's report, Mr. BALDWIN in the chair.

Mr. MADISON's proposition still under consideration.

Mr. STONE.--I shall not attempt to show the importance of the subject before us, as it relates to public credit; or as it will affect our character as a nation, at home and abroad. These have been explained; but it is proper for us to consider how far the amendment may operate to establish a precedent of Continental and State Legislation, the influence it may have on society, and the rules of civil conduct between man and man. Every community must experience that the conduct of the Government will influence the opinions of the individuals; and the spirit of the individual will transfuse itself into the Government. This action and reaction operates more powerfully in a Republican Government, founded on representation, than on any other.

Our situation is made more important, on the present occasion, by a disagreement on principles which ought to be fixed and plain; to me it seems that we differ on the principle of public justice. This may be unfortunate--let us endeavor to be reconciled. If the true distinction between natural and civil justice be accurately drawn, we may annihilate the point in contest. Agreeably to the principle of natural justice, no contract is perfect unless there be an equivalent; and that which we call a valuable consideration, on which to ground a contract, is founded on the idea of an equivalent, and presupposes it. And, I believe the idea of such a consideration being an equivalent, is the foundation of the validity of a contract, even in the English law; and is always carried into effect, wherever the execution is safe and certain; because I think, whenever it appears in any court of justice, that the consideration was not an equivalent, that then the contract is not carried into execution. The execution of the principle of natural justice then is safe; for instance, £99 19s. 11d. is not a consideration for £100, but a small sum may be a consideration for a valuable property; this does not arise from an infraction of the principle; but because the property may not have a determinate value in the society; and it would make judges arbitrary, legal proceedings extremely expensive, and contracts uncertain, if an extensive discretion as to the value was admitted. But whenever the consideration is so small and inadequate, as to appear so plainly and satisfactorily that the judge cannot be mistaken in determining it not to be an equivalent, there the contract is not valid.

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.