Part 94

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.

Mr. MADISON's proposition still under consideration.

Mr. LIVERMORE said he was against any discrimination between the soldier and other public creditor, who held a public security, made payable to bearer, and consequently transferable, with intent that they might be sold, if convenience or necessity should require it. This had been understood by all parties, as well in America as in foreign countries, and they had been sold accordingly. The advocates for discrimination have not denied this; they have only alleged that the low rate at which the poor soldier or other public creditor had sold his securities was a sufficient reason for Congress to interfere and set aside the sale. In opposition to this, he observed, that persons had a right to buy and sell at such prices as they could mutually agree upon, provided there was no fraud.

A diamond, a horse, or a lot of ground, might be sold too cheap, or too dear, and so might any other property; but Government could not interfere without destroying the general system of law and justice. Esau had sold his birthright for a mess of pottage, and heaven and earth had confirmed the sale. The distresses of the army, both officers and soldiers, at the time they received and sold their securities, had been painted in too strong colors. They were not so emaciated by sickness and famine as had been represented. They were crowned with victory, and received with applause by their fellow-citizens; and although they had been paid in paper, their loss had been made up by large bounties, and in other emoluments; so that, in point of property, they were equal to their fellow-citizens who had borne the burden of taxes under which many are laboring to this day. Let them be called brave soldiers, patriotic soldiers, but not poor soldiers. They ought to be governed by the same system of justice that governs others; but their contracts ought not to be set aside out of partiality to them. The case quoted from the statute of Queen Anne is not applicable to this case, inasmuch as Government had not originally made the debentures therein mentioned transferable. Neither did the case of the Canada bills apply; for, as he understood, those bills were paid to British merchants and to others who had purchased them.

Mr. MADISON.--If paper, or the honor of statues or medals can discharge the debts of justice, payable in gold or silver, we can not only exonerate ourselves from those due to the original holders, but from those of the assignees. So far as paper goes, the latter have received the compensation. If honor can discharge the debt, they have received civil honors; look around to the officers of every Government in the Union, and you find them sharing equal honors with those bestowed on the original creditors. But, sir, the debt due in gold and silver is not payable either in honor, appointments, or in paper.

Gentlemen say it will work injustice; but are we not as much bound to repair the injustice done by the United States? Yet I do not believe the assertion has been established by any thing that has been urged in its support. The gentleman from Maryland (Mr. STONE) acknowledges that there is a moral obligation to compensate the original holders; how will they get what he admits is their due? He is willing to make an effort, by applying the resources of the country to that purpose; but if we are to judge by the sentiments of other gentlemen who have spoken on this occasion, we have little to expect from that quarter. Suppose the debt had depreciated to a mere trifle, and suppose the sale of the Western Territory had extinguished the certificates, let me ask, whether, if the United States had thus exonerated themselves from the obligation to the assignee, whether the claim of the original holder would not still remain in its full force in a moral view? But believing the point of justice to be exhausted, I will just add one remark upon the practicability. The transferred certificates, generally, will show the names of the original holders, and here there is no difficulty. With respect to those granted to the heads of either of the five great departments, the books of the Treasurer of Loans, as well as the accounts of those departments now in the Treasury, will designate, with a great degree of accuracy, and this may be followed up by the usual mode of obtaining evidence; and I believe every security may be provided against fraud in this case that was provided in the case of the commissioners who were sent into the respective States for ascertaining and liquidating the claims of individuals. That there will be some difficulty I admit, but it is enough for me that it is not insuperable; and I trust, with the assistance which the cause of equity and justice will ever obtain from the members of the National Legislature, they will easily be surmounted.

MONDAY, February 22.

Public Credit.

The House then resolved itself 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.--As the worthy and eloquent member who replied to me did not answer the questions I put to the committee, I suppose, he either did not hear them, did not understand me, or could not answer them. I hope, before the committee decide, they will attempt at least to resolve them. I asked, where is the injustice of the State's complying with its engagements made to the first holders of certificates as far as the case admits? 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 paid its whole debt with justice, blended with mercy? Where is the interference in contracts, when the proposition is to comply sacredly, as far as the case will admit, with the contracts between a State and its creditors? I asked, is not the assignment of certificates confirmed by the motion? Does it not give to the assignee the very thing stipulated to be given, that is, whatever sum Government shall be pleased to pay for the certificates, for that was the condition of the assignment? And is not the sum now proposed more than either the first or last holder, till within these few days, supposed would be paid him? I asked also, ought not an honest assignee to be pleased that Government intends to do that justice to his assignor which he ought to do himself, were the whole payment made to him? I asked, of what is the assignee deprived but of his late sanguine expectations? I asked, whether the proposition before us does not rather establish confidence in Government than the contrary? For, sir, to make use of the comparison which has been often made here between the State and an obligor on a bond, what could give more credit to any man's bonds than to find that, though they had depreciated to half a crown in the pound, he paid the whole twenty shillings; ten shillings to the assignee, who had given but two shillings and sixpence, and ten to the obligee who had sold at so great a loss?

It is true Congress may, consistently with the rules of common law courts, pay the bearer and take no notice of the creditors; but were a Court of Equity instituted to decide on the case of certain speculators, how would they decide? Government, in the most solemn manner, pledged itself to make compensation to the soldiers, have they done it? Instead of doing this, certain persons, who took advantage of their ignorance and their poverty, bought up the evidence of their debt at one-eighth of the nominal value; and in some States these very men had drawn what constituted the principal of the purchase with six per cent. interest in three years.

In what does the case differ between the depreciated paper and the certificates? Paper money was redeemed at forty for one, as well to the last as the first holder; the same principle would lead to give the last holder of the certificate the depreciated value at which he bought it. But we propose to work no injustice, we give the first holder, if he is the holder still, the full value stipulated. It would not be injustice to consider the assignee, as having paid what he advanced, in consequence of his confidence in Government, on account of that Government; and that the Government ought to repay him what he so advanced; having repaid that sum, the balance ought to go to the credit of the assignee. I am willing, on this consideration, to call the speculator the friend and supporter of the Government, who kindly lent us when in need, two shillings and sixpence in every pound, to advance to the poor soldier. If certificates are the evidence of the debt, it proves, sir, that the balance is due to him in whose name it issued. This is the day of payment, and we must pay accordingly; and here permit me to remark, in reply to the observation of the gentleman from New Hampshire, (Mr. LIVERMORE,) that Jacob was punished for his fraud, but for his faith enjoyed the promise; even so let us regard those who had so much confidence in us as to advance two shillings and sixpence to the distressed soldier.

Mr. HEISTER was in hopes this question would be postponed for the present, in order to go into a consideration of the ways and means: when, if it appeared that the United States were incapable of making full provision, it might be considered, whether one deviation would not authorize the other? If any gentleman would make a motion to that effect, he would second him.

The question was now taken on Mr. MADISON's proposition for a composition, and it passed in the negative; yeas 13, nays 36.

WEDNESDAY, March 17.

On Slavery.

The House again resolved itself into a Committee of the Whole on the Report of the committee, to whom was referred the memorial of the people called Quakers, &c., Mr. BENSON in the chair.

The question of order was put, when it was determined that Mr. TUCKER's last amendment was not in order.

The report was then taken up by paragraphs. The first proposition being read,