[No. XC.j
THE TABLET
" Legijlalors by overlooking falls, sometimes trouble themfilves tofct- (
tie principles, when there is no occajion for them.
TH E fir It obie& to be regarded in the examination of a prac- i
tical fubjeft, is to ascertain all the facts which relate to it.
If this rule were dr.ftly observed, many of the debates which take
place in public alfemblies would be avoided. There is no error
so which men are more liable, than taking things for granted
which are not true. Mistakes of this kind expose people to much
painful reflection, and produce a warmth and altercation of de
bate to no ufeful purpose. Why (hould one perplex himfelf to
assign a cause for an effect which exists only in imagination ? why
ihould we attempt to apply a remedy to an evil, before we exam
ine the faffs, and determine whether the evil we propose to re
dress, has any existence. A man must feel in an auk ward fixa
tion, who having employed several days in the difculTton of prin
ciples, (hould find that the cafe, to wh.ch he meant to apply
them, was merely a creature of fiction.
I can better illuilrate my ideas by a fpecific example, than by
general reflections. The very important question di (cuffed in a
refpeftable alTembly is not remote from the purpose. I allude to
the difcuHion relative to a discrimination between originalmd pur
chasing holders of public certificates. It does not come within
the design of my speculations to enter into political dilputes, and
I (hall wave a consideration of the principles that were adduced,
in support of either fide of the question. The debates on the oc
casion discovered good talents at investigation. The remarks
were judicious, and the reasoning ingenious. But it was evident
that the speakers were not generally acquainted with thole facts
that were the ground work of the whole business.
The point to be determined was, whether original creditors
had any demand in justice for the indemnification of the losses in
curred by the transfer of their certificates. It was pretended that
the assignee ought to relinquilh part of the sum exprefled on the
face of the certificate, for the benefit of the original holder. A
compromise, it was urged, ought to be made between them, and
the property divided. This pretence was founded on two pre
mises, which many of the speakers conceived to be fa£fcs, without
any enquiry into the matter.
One of these supposed fads is, that original holders have gene
rally fold their fecuritiei at about one eighth partof their nominal
value. ..
The other is, that they were compelled by ncceflky thustodif
pofe of their securities. ,
Few of the speakers, in the examination of the fubjedt, expref.
fed any doubt of the propriety of taking these fuppofuions for un.
disputed fafls. By a pifconception of the real (late of the cafe,
there was a most anxious effort to reconcile a difference of opinion,
which would not have exifled at all, had the f„£ts been previoudy
examined.
It may be proper in thd firft place to enquire who have been
the principal losers by the fluctuating price of public securities.
And, secondly what were the causes that generally induced ori
ginal creditors to transfer their certificates.
To the firll of these points, I reply that if the government pays
the possessor of a certificate, the amount exprefled on the face ot it,
no daft of creditors will fuffer an undue proportion of loss. In
such i decision all the creditors whether real or imaginary (hould
be put into claflcs, and an opinion formed upon an aggregate view
of each class. Some individuals in each division will no doubt be
found to have been diftinguiihed fufferers ; but I believe if the
lodes are fairly dated among the several clafles, ihe difference
will be too little to agitate the public mind with devising a mode
of redress. Forfeiting aside the question of the justice or injustice
of an interference of the government, the cases of real injury are
too few to constitute any claims for general remedy. It is not
probable that a twentieth part of the domestic debt is held under
such circumstances as to render it a doubt, viewed cither on prin
ciples of justice, or sentiments of generosity, whether any persons,
but the present holders, {hould receive the payment.
It admits of a tolerable degree of demonstration, that the ori
ginal creditors, who have alienated their securities, have fold them
on an average of twelve (hillings and fix pence on the pound. As
they have a longtime had the benefit of the money, their situation
is not less favorable than the present holders. It will here be ob
served, that many persons have in fact fold securities at two (hil
lings and fix pence on the pound ; and it may be asked what de
scription of persons fold at this low rate. This point is easily
made clear. It (hould firft be undfrftood that not more than a
tenth part of the domestic debt was in circulation, at the low fta
gesof depreciation. Thole who (old at the lowed ebb of dock',
and sustained the principal loss, were generally early pur chafers
and not original holders.
(To be continued.)
HOUSE OF REPRESENTATIVES.
MONDAY, FEBRUARY 15.
(continued.)
IN Committer of the whole on the report of the Secretary of
treasury. Mr. Madison's motion for a discrimination under
consideration.
Mr. Lawrance observed, that the proportion of Mr. Madison
derived force from the talents and knowledge of that gentleman
in public tranfattions ; but that, on examination, it would be
found to contain do&rines very repugnent to the interest and
prosper ity of the union.
Mr. Lawrance dated* that the debts contra&ed by the United
States were for loans of moiiey, supplies of articles necessary for
the public wants, and for a&ual service rendered indifferent em
ployments. These debts were ultimately adjuftcd and reduced to
their pre font transferable form. Every part of *he contra# was
rffential to it: The negocration was a material part, and the na
ture of the contrast was frequently recognized by the late govern
ment. That in 1783, Congress recommended certain funds to be
eftabUfhed to pay the interest and put the principle in a course of
discharge. This recommendation was unequivocal, as to the na
ture of it, and made no discrimination between the pofleflbr and
the original holder. The fubfequcnt condudl of that body was
conformable to this recommendation. They annually called on
the States to furnifti money to pay the interest, without discrimi
nating between the original holder and present pofleffor. They
paid interest on the securities, without makingany discrimination.
J?rovifion has been made for holders of loan-office certificates,
that weie fubjeft to liquidation, to have them cancelled and o
thers iflued for the specie value. And the holders ot certificates
were enabled to have them regifteredto guard against accidents;
& no diftin&ion was between the original holder and the alie-
PUBLISHED WEDNESDAYS AND SATURDAYS BY JOHN FEN NO, No. 9, MAIDEN-LANE, NEW-YORK.
No. XC,
CONGRESS.
SATURDAY, FEBRUARY 20, 1790,
nee. The transferable nature of the claim was for the benefit of
the creditor, because it gave it an a&ive value. He consented to
take it, and consulted his own advantage. The conduct of the
late Congress, since the war. has been uniform in the support of
thiscontratt, and they have done no a£l to impair its obligation
according to the terms of it. This contratt is valid against the
government ; for, notwithstanding the truth of Mr. Madison's
observation, that the nation was the fame tho the bodies that ad
ministered the government were different—there is yet a far great
er fesurity ; and to remove all doubt, a clause is inserted in the
constitution, that made all debts and engagements, valid against
the United States under the late general government, valid against
the present.
Mr Lawrance further observed, that this contract having de
scended upon the government, there is no right in the legislature
to impair the force of it. The particular governments are re
strained from pa fling laws impairing the obligations of contratt.
This interference would be a violation of the contrast between
the individuals when the certificates were transferred ; and it will
not be pretended that the States are prohibited, and the general
governmenthas power to do it.
Mr. Lawrance adverted to the principles of Mr, Madison, to
reft the obligation of the public on the original holder ; and ob
served that the fame principles arc in favor of the present pofleffor.
That public justice requires a performance of contra&s, when there
is no fraud on the part oI the holder. The pofleffor has been guil
ty of no fraud, no deception: the between him and the ori
ginal holder was fair, and a hazard and rifle, attended the purchase
adequate to the advantage; and nothing (hort of a revolution in
government could have produced payment. If there was an im
position, the public occasioned it ; and, between the original hold
er and the public, there might be a claim for retribution. Pub-
lic faith is as facrcdly pledged to the bearer, or present pofleffor,
as to the original creditor. Public credit results from fair and
upright conduct ; and the government, to support it, must perform
its contrails. Thi? is a contratt recognized by them, and as
such (hould be discharged. The situation we have been in made
it proper for us to be cautious on this fubjedfc ; and even at present
people doubt our disposition to establish our credit. This would
give a fatal blow to it. Much has been said about public opinion.
Public opinion is difficult to be ascertained ; gentlemen have dif
ferent modes to determine it. He supposed it was better ascer
tained by the a£ls of public bodies, than by squibs in the news
papers, or by a pamphlet written by any individual. The uni
form conduct of men, deputed by the particular States to repre
sent them in the late general government, was a standard ; and
their opinion, from 1783, was in favor of the present pofleffor.
Thecondudlof the particular States is another circumstance : I
do not know of aifv discrimination made by them, tho it has been
attempted : The general opinion of men of property is against it;
and thefc sources of public opinion are moll certain and unequi-
vocal,
Mr. Lawrance further observed, that altho he believed Mr.
Madison supposed no advantage would be derived to the United
States, from this discrimination, yet much would arise. Part
of the army had been composed of foreigners ; many had left
the country, others are dead and their relatives ; all their part
would be unclaimed. That certificates were issued to public of
ficers to a great amount, and were paid by them to persons from
whom they purchased. The difficulty of making proof of the
original creditor will be great; and from this circumstance great
sums would be gained to the public. Theie are persons enough
who would have sagacity to discern this ; and they would doubt the
purity of the public motive (hould the Gentleman's plan be adopt
ed.
Mr. Lawrance adverted to the circumstance of the new credit- |
or receiving paper : that this paper might be fubjeft to another li- ;
quidation on the fame principle as the present. That it would t i
introduce doubt and distrust of public engagements ; and there .
would be no greater security, although a fund was pledged, than
there is at present; for whenever the public pleased, they might
destroy the obligation.
Mr. Lawrance observed, that arguments were improperly ad
drcflTcd to their feelings; but that however hard it may be for the
original creditor, who had parted with his certificates, to contri
bute to pay the debt; yet it would be aqually hard on him who
had been injured by continental money, who had been plundered
by the enemy, who had his property burned by them in the course
of the war ; and instances of this kinds were numerous.
Mr. Lawrance adverted to the doftrineof the high court of e
quity ; and urged that this court must be governed by principle.
Was the committee this high court, and the United States' original
creditor and present pofleffor before them ; If there appeared no
fraud on the part of the poffeflbr, the original creditor would have
no just claim on him. Between the United States ?nd original
creditors, the United States were in fault; and the claim, if good
would be against them.
Mr. Lawrance also noticed the resolution of Congress of 10th
April, 1780, relative to the depreciation of pay to the army ; and
declared that this was limitted to persons then in service : those
who had left it, even the day before, had not this juftire done
them : But this cafe was between the United States, and the per
sons rendering them service. The ast did not affect third persons ;
it did not take from one and give to another, as the present mea
sure proposes and was therefore diflimilar.
Mr. Lawrance further observed, that his objection to the a
mendment was on the ground of thecontraft ; yet he would men
tion some instances to shew the impra&icability of the scheme.
In many cases a State has fold lands, for low value in these certifi
cates. by the law of this State, creditors residing within the
British lines during the A*ar, had received by law these certificates,
at their nominal value, from their debtors. British and domestic
creditore have received from their debtors large sums at their no
minal value. Foreigners are pofTeffed of large sums of the re
o-iftcred debts, in their names, for alienated certificates. These
and many other instances which might be mentioned, will shew
the difficulty of devising a scheme, with the checks and excep
tions that would be proper to render it in any manner feafible.
It has been objeftcd to the Secretary's report, that it proposes a
redu&ion of interest. He observed, that there is a material dif
ference in a plan that made the consent of the creditor ncpefTary,
and one that reduces his capital without his consent This part is
not now under consideration ; but the scheme of the gentleman
from Virginia will add a considerable sum to the provision pro
posed by the Secretary, from the increased interest to be provided
for, and the additional number of officers to be appointed to car
ry his plan into execution.
Mr. Lawrance observed, that he was still open to convithon ;
but that he was, at the time of speaking, against Mr. Madison's
proposition.
Mr. Smith (S- C.) next rose and remarked, that it vm neceffa
rv and proper the house should give the fubjefl the moll ample
difcuflion. The question had long agitated the public mind, and
the people should know that it had occupied the ferions atten
PRICE THREE DOLLARS PR. ANN
tion of their representatives, and be made acquainted with the
principles of their decifjon. For his part, having bestowed on it
the mod attentive consideration, he could aflert, that the more he
contemplated it the more he was imprrffed with a conviction that
the proportion was unjust, impolitic and impracticable. It con
fided of two parts : the one was to take away the property of one
person ; the other was to give that property to another : and this
by a voluntary interposition of the house, by a taere ast of power,
without the aflfent of the former, or without even the application
of the latter ; for it was remarkable that the original holders, who
had alienated their certificates, had not come forward with this
demand ; and it is presumable that, had they applied for redress,
they would rejeftany indemnification which was the result of such
manifeft injultice. To prove that this was taking away the pro
perty of a citizen by force, heobferved, that the purchaser had,
by a fair purchase, acquired a right to a full amount of the sum
expressed in the certificate, which it was not within the power of
the house to divest him of. No tribunal on earth could lawfully
deprive a man of his property, fairly obtained. The purchaser
bought under :he ast of Congress making the seCurities transfera
ble ; and having given the market price, without fraud or impo
sition, he was by virtue 6f such purchase vested with the complete
and absolute ownerlhip of the certificate, as fully as the original
holder ; and had as much right to demand full payment as the
original holder would have had, had the security been still in his
hands. Even should the house refufe, by an ast of power, to pay
him more than half, his demand for the other half would still re
main against the public ; it could not be extinguifhad ; the debt
would continue to haunt them ; the creditors would loudly cla
mour for justice, and sooner or later the balance would be paid.
Then would they mcur all the odium of a violation of private
rights, without derivin^tOL-the-public any advantage whatever.
Heconfidered the measure as doing a certain evil that a poflible
good might result from it : this was not, in his opinion, the pro
the proper mode of doing good. Justice cannot be founded on
injustice ; and to take money out ot the pocket of one man to put
it into that of another, is a precedent which may juftify future in
terferences. This step would lead the house to others : for if the
principle be a just one, then the government should look into all
the tranfaftion? and speculations of individuals, in order to cor
rect them, and make retribution to every individual according to
his lofTes. He was persuaded that the true policy of a legislative
bodv, was to pursue the broad road of justice clearly marked out
before them ; for it was an undeniable truth, that whenever they
deviated into these by-roads and trackless paths, without any other
guide than their own imaginations, they would get bewildered
in a labyrinth of difficulties, and rejoice to trace back their steps
and regain the plain road. Now the plain line of conduct was,
to do ftrift justice, such as is inforced in judicial tribunals between
man and man in a similar cafe. The debtor is bound to pay the
debt to the holder of the security ; the contrast, between the giver
of the bond and the person to whom it was given, is done away
the moment the latter afligns it to another person. If A. gives a
bond to B. who parts with it to C. there is no longer any obliga
tion 6n the part of A. to pay to B. but he must pay it to C. A,
has nothing to do with the pri\ate negociations between B. and C.
nor to inquire what consideration was given for the security. , All
that he has to enquire is, whether he really signed it and had value
received for it and the amount of it: he cannot fay to the holder,
you gave but 50 dollars for this security of 100, and I will pay you
only 50 ; for the law will compel him to pay the 100: This is
law and justice between man and man : is there another fort of
law and justice for the government ? By what rule is the govern
ment to square its conduct, if not by those sacred rules which
form the basis of civil society, and are the fafeguard of private
property ?
These observations fully refute the remarks of the gentlemen
from Virginia, that the orginal holders still have a claim on rhe
government, notwithftandingthey have transfered their securities ;
and that in cases of individuals bearing an analogy to the present,
a court of equity v. ould interpose and give redress. The direst
contrary was the fact ; there never was an inftancc of a court of c
quity afTuming such power. In cases of bankruptcy, which are
under the fuperintendance of courts of chancery, the debts of the
bankrupt are paid in equal proportions to all the creditors, whe
ther original holders orafllgn'ees, and the court never enquires in
to the terms of the alienation. It cannot be said that the original
holder has any claim of justice on the government; his claim must
be addressed to our humanity ; but the House have no authority
to gratify their humane inclinations at the expence of justice, and
by a facrifice of private rights. If the proicft was unjust in itfelf,
the application of the property to relieve the diftrefles of the ori
ginal holder cannot change its nature ; it must still be unjust ; the
mode of appropriation cannot alter the rcftitude or turpitude of
the measure. If therefore Congress have the right to take away
the property of the present holders, they may apply the savings tc>
public purposes ; and what appearance would such a scheme have
to the world ? Would it not ruin forever our national character ?
The gentleman from Virginia had (aid, that justice and good
faith were the substratum of public credit : but lie was persuaded
that the justice and good faith held out by this plan, would be a
substratum of sand, a foundation too weak to fupportour public
credit, which would soon crumble to pieces. If the object o£
the gentleman be to afford relief to thediftrefled, without impair
ing legal rights, let enquiry be made into the cases of those ori
ginal holders who fold from absolute distress—let those cases be
fele&ed and brought forward, and he would yield to no member
in his alacrity to give them every adequate compensation, and
to indemnify them for their fufferings ; —but he could not as
sent to a proposition which blended together the cases of aJI
the original holders, and gave them the propertv of others.
That there were various classes of original holders ; some had
fold for purposes of speculation or trade ; and had proba
bly made good bargains, and were now in a better plight than
if they had still retained their fecuritics ; others got rid of their
securities because they had no confidence in the government: these
the public are not bound to indemnify ; this plan would place
them on a better footing than those who having confidence in the
general government had, notwithstanding their diftrefTes, kept
their securities ; for supposing the former fold eight years ago for
4s. in the pound, it was not improbable they had by this time
doubled their money, and in addition to that they were to get io_
which would give them 18s. whereas the latter would be able to
fell their securities at the market for 15 or 16s. after they were
funded. Some had exchanged their securities for bonds of indi
viduals, of which the real value cannot be *fcertained, or for land
or other property, which may have risen considerably in value.
Some present holders have received their fccurities by way of le
gacy—Are these to have one half taken off ?—is their patrimonial
estate to be torn from them ? Had their parent been still living,
he would receive 20s. in the pound, but the circumstance of his
death is to strip the child of one half.
The gentleman from Virginia had said, that giving the present
holders, by alienation, the highest market price, would be doing
them ample jnftice ; but did the public mean to defraud them the