[No. 90, of Vol. lII.] READ IN THE HOUSE OP REPRESENTATIVES, TLB. 7, 1792, Treajury Department, February 6th, 1792, Sir, I HAVE the honor to fend herewith a Report on the fnbje& •f the Public Debt, pursuant to the order of the House of Repre sentatives the lft of November, 1791, and to subsequent refer ences therein mentioned ; and to be, with perfect refpeft, Sir, your most obedient, and raoft humble fei vant. To the hfflvora'btc the Speaker ef the House of Representatives. Treasury Department, Jan. 1792. PURSUANT to the Order of the ffoufi oj Representatives of the firfl of November, 1791, directing the Secretary of the Trerfury, * 4 to re port to the House the amount to the Loans propofedby the AH making Provision for tht Public Debt, as welt in the debts oj the refpeftive States as in the Domejlic debt of the United States, and of the Parts which remain unfubfcribed, together with such Measures a t are, in his Opinion, expedient to be taken on the Sub] eft : the said Secretary reffeftfully submits the following REPORT. "'HE whole amount of the domestic debt of the United JL States, principal and intercft, which has been subscribed to the loan proposed concerning that debt, by the ast intituled, 41 An ast tnaking provision for the debt of the United States," ac cording to the statement herewith transmitted, marked A. and /übjeft to the observations accompanying that ftatmenr, is vhich pursuant to the terms of that ast has been converted into stock, bearing an immediate in terest of 6 per cent, per annum - - 1 4j i 77>450. 43 Stock bearing the like interest from the ift of Jan. 1801 sfock bearing an immediate interest of 3 per cent. pe-. annum Makingtogethec ©f which there stands to the credit of the Trus tees of the finking fund, in consequence of pur chases of the public debt, made under their di rection, the sum of . dols. The unfubfcribed residue of the said debt, ac cordingto the statements herewith transmitted, marked B. and C. and fubjcft to the obfcrva fions accompanying the statement C. appears to amount to . . dofc. 10,616,604. 6$ Confjfting of registered debt, principal and in terest _ JJnfublcribed stock on the books of the commif (ioners of loans for New-Jersey, Pennfyiva nial and IVlaryJand, principal and interest Credits on the books of the Treasury, for which no certificates have iJTucd, principal and interest Qutftanding or floating evidences of debt, eftima »ed per ftatemcnt C. at Making together Concerning which some farther arrangement is nccrtfarv. 1 he gieatfft part ot the registered debt, hitherto unfuiifcribed, uownrd, by (he citizens of foreign countries, moll, ifnot all of whom appear now disposed to embrace the terms held out by the atl above mentioned ; extensive orders having been received from those creditors, to fubferibe to the loan, after the lime for re viving fubferiptions had elapsed. A confidence part of the outrtanding or floa-ing debt, con *lU of loan-office certificates issued between the fir ft of Septem er'. 1 777 i and thefirft of March, 1778, bearing interest on the nominal lum. Many of the holders of this species of debt have come in upon the terms of the ast, but others have hitherto de c.inea it ; /Hedging, that the special nature of their contract gives a peculiarity to their cafe, and renders the commutation propo not 10 fair an equivalent to them, as in other instances. They ° l^e h as had, towards them, a compulsory k ru ruling the temporary payment of interest, unless t ev Ihould change their old for now certificate, e(Tentially vary ing the nature of their contrast. A resolution of Congress of the tenth of September, 1777, fti pulati-s in favor of this class of creditors, interest upon the nominal, »nucad ot thereof principal of their debt, until that principal be dj ar g*d. This certainly renders their contra£l of a nature more eneficial than ihat of other creditors ; but they are at the fame time liable to be diverted of the extra-benefit it gives the n, by a payment of their specie-dues ; and it may beobferved, that they ave aanally enjoyed, and by accepting the terms offered to them, were enabled to reahfe, advantages superior to other creditors. cy have been paid interest by bills on France from the tenth September, 1777, to the firtt of March, 1782, while other credi tors received their interest in. depreciated bills of the old cmiflions ; an tie terms of the loan proposed put it in th ir power to realise t. e eneht of interest on the nominal amount of their refpe&ive ts, at rates from 6. 20-ioodths. nearly to 10. 47-ioodths. percent, on their real or Ipccie capital down to the last of De cember, 1790. It does not therefore appear to have been an unreasonable ex oe at ion, that they, as readily as any other defcripiion of pub ic creditors, would have acquiesced in a measure, calculated for - f a " omniof ! alio V government, under circumstances, in -e pett to which, it has been demonstrated by subsequent events t at the accommodation deftred was confident with the best in n j ptiblic creditors. A large proportion of the parties intere edl have indeed viewed the matter in this light, and have •em raced the proportion. It is probable, that the progreji of t lings will (atisfy the remainder, that it is equally their interest to r f 'i 3 ' r opportunity be afForded. But it is, never -1 C f C^ S> l^ m k^ vcs only to judge, how far the equivalent pro po e 1% in their cafe, a reasonable and fair one ; how far any crcumllances in tneir claim ma> suggest reasons for moderation on t eir part ; or how far any other motiv-s, public or private, 011? ){to induce an acceptance. And the principles of good faith require, that their election should befiee. *- )a ground, the complaint which regards the withholding • < ri tetnwotaiy paymeot of interest, except on the onditi«» of a A NATIONAL PAPER, PUBLISHED WEDNESDAYS AND SATURDAYS BY JOHN FENNO, No. 6 9 , HIGH-STREET, PHILADELPHIA. ALEXANDER HAMILTON, Secretary ef the Treasury„ Dollars 31,797,481. 22 *°»53 l »303 dols. 31,797,481. 22 6>?95.5i5- »6 3,697,466. 14 dols. 10,616,604. 65 Wednesday, March 7, 1792. surrender of the old certificates for new ones importing a eontraft lubftantially different, appears to the S-cretarv not destitute of foundation. He presumes, that the operation of that provision, in the particular cafe was not adverted to ; or, that an exception would have heen introduced as mod consonant with the general Ipirit and defignof the act. Accordingly the farther measures which will be submitted, will contemplate a method of obviating the objection in question. From the confutation, that an extension of the time for re ceiving fubferiptions udoii the terms of the ast making provision or ihe debt of the United States, isdefired by a large proportion ot the non-fubferibnig creditors; and from the farther confider at ion, that lufficient experience has not yet been had of the pro dutfcivenefs ot a considerable branch of the revenues which have been eftabliQied, to afford the light necessary to the final arrange ment—it is, in the judgment of the Secretary, advifeable, tore new the piopofition for a loan in the domestic debt, on the fame terms with the one which has been closed, and to allow time for receiving fubferiptions to if unuJ'the last day of September next, inclulively ; making provision tor the temporary payment of in terest to such who may not think fit to subscribe, tor the year 1 79 2 > of the like nature with that which was made in the fame cafe tor the year 1791 —except as to the holders of loan-office cer tificates, issued between the firft of September, 1777, and the firft of March, 1778 ; in refpeft to whom it is submitted as proper to drfpenfe with the obligation of exchanging their old certificates for new. as the condition of their receiving interest in capacity of non-fubferibers ; and to allow them, w'.thout such exchange, to receive the fame interest, both for the years 1791 and 1792, as if they had fubferibed to the firft loan. It will not be materially difficult, so to regulate the operation at the treasury as to avoid in the particular cafe, that danger of imposition by counterfeits, which was the motive to thegeneral provision for an exchange of certificates. 11. The amount of the fubferiptions in the debts of the ref pe&ive States, within the limits of the sum aflumed in each, ap pears by the ftatrment marked D. to be dollars 17,072,334. 39-ioodths, fubjeft to the observations accompanying that llaie ment. Consequently the difference between th aggregate of the sums fubferibed and the aggregate of the sums aflumed, in dollars 45427,665. 61-ioodtbs. 7.088,727. 79 This difference is to be attributed to several causes, the princi pal of which are the following : First, That the sums afTumed in l efpeel to certain States exceeded the a&ual amount of their ex iting debts. Second, That in various instances, a part of the ex iting debt was in a form which excluded it from being received, without contravening paiticular provisions of the law ; as in the cafe of certificates iffucd alter the firft day of January, 1790, in lieu of certificates which had been iflued prior to that period, wnich was reported upon by the Secretary on the twenty-fifth day of February last. Third, Ignorance of, or inattention to the li mitation of time for receiving fubferiptions. It appears, that a number of persons loft the opportunity of fubferibing from the one o» the other of these causes. 1 >«3'>3 6 4- 76 A ftrongdefire that a farther opportunity maybe afforded for fubferiptions in the debts of the States, has been manifefted by the individuals interested. And the States of Rhode-Island and New-Hampshire, have by the public a6ls referred to the Secretary, indicated a fiinilar desire. The affording of such farther opportu nity, may either be reftri&ed within the limit, as to amount, which is contemplated by the ast itfelf, or may receive an exten sion which will embrace the residuary debts of the States. 1 he firft may be considered as nothing more than giving full effect to a measure already adopted. 1 he last appears to have in its favor all the leading inducements to what has been already done. The embarrafTments which might arise from confli&ing systems of finance, are not entirely obviated. The efficacious command of the national resources for national exigencies, is not unequivocally secured. Theequalizing of the condition of the citizens of every (late, and exonerating those of the states mod indebted, from partial burthens which would press upon them in consequence of exertions iu a common cause, is not completely fulfilled, until the entire debt of every state, contracted in relation to the w*r, is embraced on one gene ral and comprehensive plan. The inconvenience to the United States, of difbui thening the states 4 which arc still encumbered with considerable debts, would bear no proportion to the inconveni ence which they would feel, if left to struggle with those debts, unaided. 15 674. 62 107,648. 63 More general contentment, therefore, in the public mind, may be expected to attend such an exoneration, than the reveife; in proportion as the experience of actual inconvenience would be greatei, though only applicable to parts, in the one than in the other cafe. With regard to states, parts only of the debts of which have been aflTumed, and in proportions ftiort of those, which have pre vailed, in favor of other states, and short also of what would have resulted from a due apportionment of the entire sum afTumed ; the claim to a further aflumption is founded on confederations of equal justice, as relative to the meafuie itfelf, considered in a se parate and independent light. But there is a further reason of material weight for an immedi ate general assumption. Mpnicd men, as well foreigners as citi zens, through the expeftatibn of an eventual aflumption, or that in some shape or other a substantial provision will be made for the unaflutned residue of the state debts, will be induced to speculate in the purchase of them. In proportion as the event is unfeitled, or uncertain, the price of the article will be low, and the present proprietors will be under disadvantage in the sale. The joss to them in favor of the purchasers is to be regarded as an evil; and as far as it is conne&cd with a transfer to foreigners, at an under value, it will be a national evil. By whatever authority an ulti mate provision may be made, there will be an absolute loss to the community eqnal to the amount of such under-value. It may appear an obje&ion to the measure, that it will require an establishment of additional funds by the government ot the United States. But this does not seem to be a necelfary confc quence. The piobability is, that without a fupplementarv as sumption, an equal, or very nearly equal augmentation of funds will be rcquifite to provide for greater balances in lavor of certain dates, which would be proportionally duninifhed by such af umption. The destination, not the quantum of the fund, will therefore be the chief diftin&ion between the two cases. It may also appear an objection to a total aflumption, that the magnitude of the object is net ascertained with precision. It is not certainly known, what sum is due in each state ; nor has it been poflible to acquire the information, owing to different causes. But though precise data are deficient, there arc materials which will serve as guides. From the, returns received at the trcafury, 357 [Whole No. 29 B.] I a (lifted by information in oilier ways, it miv he ftited without danger of mater,al error-Tbat the remaining debt, of the llaie. I over and above the funis already fubferibed, will not exceed the amount, fpecfied in the Bate,nent D. acro.npauyi.ig this report- And that, including the sums already fubferibed, thelotal amount ° ;i , H, * matc b'provided for, in the event of a general assumption. will not exceed dols. 25,403,362. 71 which would couftitute an addition of dols 3,903,36*. 71 to the Aim of 5i,500,000 dollar*, already aliumed. ./{-Id » total assumption be deemed eligible, it may still be advifeable to alfign a determinate sum for each state, that the uc molt limit of the operation may be pre-eftablilhed ; and it is nt celiary ,n order to the certainty of a due provision in prop-r time ul'aff re A° U i', d r r ß '" * on the .Jdfi lums ailumec}, till after the year 1792. It will occur, that provision has been made, for paying to each state, m trull for ,u non-fubicrib.ng creditors, an interest u P on the difference between the sum..(Filmed (or such fta.e, and that aftu been fubfenbed ' '° WhSt W ° uM h ' VC bcen T a y ,b 'e> if it had j" ' h n 'wrll 1 °f ' fanhcr "Gumption, either within the limits al ready eltabhlhed, or commensurate with the remaining deb's of the states; It IS conceived, that it will not be incompatible with the provilion just mentioned, to retain, at the end ot each quarter during the progress of the farther fubfer, pt.on, out of the money d.rested to be paid to each state, ihe sum corresponding with the interest upon so much ol its debts as {hall have been fubferibed to that period, paying the overplus it any, to the state. An abfo. lute (ufpenfion of that payment does not appear confident with the nature of the ftipulatior., included in that provision ; for though the money to be paid to a state be expr.fsly a trull for the non. uotcriblng creditors ; yet as it cannot be certain beforehand, that they will cleft to change their condition, the possibility of it will not juilify a lufpenfion of payment to the state, which might opc. rate as a suspension of payment to the creditors themselves. A farther objeaion to such a suspension results from the idea, 'hat the provision in question appears to have a secondary obje6l; namely, as a p edge for fecurin; a provision for whatever balance may be found due to a state on the general fettlemenL of accounts. The payment direded to be made to a state, is, " to continue until there Ihall be a fettlemcnt of accounts between the Uni:ed States and the individual ftdtcs ; and in cafe a balance Ihould then appear in favor of a state, until provision (hall be made for the said ba lance." This secondary operation as a pledge or security (confidently with the intent of the funding ast) can only b.: superseded in fa vor of the primary objedf, a provision for the creditors ; and as far as may be necessary to admit thorn to an etf;dual participation or it. But as whatever money may be paid to a state, is to be paid over to its creditors, proportional deductions may, with proprie ty, be made from the debts of those creditors who may hweafier lubfcribe; so as that the United States may not have to pay twice for the fdine purpose. If it (hall be judged expedient, either to open again, or extend the aflumption, it will be necefTary to vary the dcfcriptinn of the debts, which may be lubfcribed, so as to comprehend all those, which have relation to services or supplies during the war, under such refttiftions as arc requtfite to guaid against abuse. In the original proposition for an assumption of the (late debts, and in the suggestions now made on ibc fame fubjeii, the Sccie taty has contemplated, aod still contemplates, as a material part of the plan, an cffr&ual proviflon for the ! ;of the vacant lands of the United States. He has considered tbn refourci-, as all im portant mean of finking a part of the debt, and facilitating ulti, mate arrangements concerning the residue. If fupplementarjr funds (hall be rendered necessary, by an additional aflfiini|jtion # the provilion will most conveniently be made at the next feflW of Congress, when the produftivenefsof the exilling revenues, and the exicnt of the sum to be provided for, will be better ascer tained. There is a part of the public debt of the United States, which is a cause of some perplexity to the treasury. It is not compre hended within the existing provision for the foreign debt which is confined to loans made abroad ; and it is queftiouable, whether it is to be regarded as a portion of the domcftic debt. It is not only due lojoreignerj, but the interest upon it is payable, by ex press stipulation, in a foreign country ; whence it becomes a mat ter of doubt, whether it be at all contemplated by the ad making provision for the debt of the United States. The part alluded to, , is that which is due to certain foreign officers who served the United States during the late war. In consequence of a resolution of Congress, directing their inter ft to be paid to them in France, the ceitificates which were issued to them fpecify, that " in pur suance of and compliance with a certain resolution of Congress of the third day of February, 1784, the laid inteieft is to be paid, an nually, at the house of Monf. lc\Grand, banker in Paris." Interest has accoidinglv been paid to them at Pans, down to the 31 ft of December, 1788, by virtue of a special resolution of Congress of the 20th of August in that year, fmce which period, no payment has been made. It has been heretofore suggested as the op : nion of the Secretary, that it would be expedient to cause the whole of this dcfcriptioa of debt to be paid off; among other ieafons, because it bears an inteieft at fix per centum per annum, payable abroad, and can be discharged with a saving. The other reasons alluded to are of a nature both weighty and delicate, and too obvious, it is presumed, to need a fpecification. Some recent circumftanccs have served to strengthen the inducements to the m afure. But if it should, finally, be deemed unadvifeable, it is necessary, at least, that pro* vision (hould be made for the interest, wh ch is now suspended, under the doubt that has been stated, and from the want of autho rity to remit it pursuant to the contra#. The amount of this debt, with the arrears of intcreft to the end of the year 1791, is dols. 220,646. 81. IV. The ad making provision for trie debt of tho United States, has ;«ppropria'ed the proceeds of the western lands as a fund for the discharge of the public debt. And the a£fc making provifioa ior ttie redu&ion ot the public debt, has appropriated all the sur plus of the duties on imports and tonnage, to the e»rd of the year 1790, to the purpose of purchasing the debt at the market price, and has authorjfed the President to borrow the further sum ot two millions of dollars tor the fame objefct. > These measures f:rve to indicate the intention of the legiflaturc, as early and as fait as to provide for the cxtinguilhroent of the existing debt. In puriuatice of 1 hat intention, it appears advifeable, that a sys tematic plan should be begun for the creation «nd eftabhflimeot a finking fund. (to be cowti NWEq.j
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