Front Page Titles (by Subject) no . XXI - The Works of Alexander Hamilton, (Federal Edition), vol. 5
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no . XXI - Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 5 
The Works of Alexander Hamilton, ed. Henry Cabot Lodge (Federal Edition) (New York: G.P. Putnam’s Sons, 1904). In 12 vols. Vol. 5.
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Since the closing of my last number, I have accidentally turned to a passage of Vatel, which is so pertinent to the immediate subject of that paper, that I cannot refrain from interrupting the progress of the discussion, to quote it; it is in these words (B. III., Ch. IV., Sec. 63): “The sovereign declaring war can neither detain those subjects of the enemy, who are within his dominions at the time of the declaration, nor their effects. They came into his country on the public faith. By permitting them to enter his territories, and continue there he tacitly promised them liberty and security for their return.” This passage contains, explicitly, the principle which is the general basis of my argument—namely, that the permission to a foreigner to come with his effects into, and acquire others within our country, in time of peace, virtually pledges the public faith for the security of his person and property, in the event of war. How can this be reconciled with the natural right (controlled only by the customary law of nations) which this writer admits, to confiscate the debts due by the subjects of a State to its enemies? I ask once more, can there be a natural right to do that which includes a violation of faith?
It is plain, to a demonstration, that the rule laid down in this passage, which is so just and perspicuous as to speak conviction to the heart and understanding, unites the natural with the customary law of nations, in a condemnation of the pretension to confiscate or sequester the private property of our enemy, found in our country at the breaking out of a war.
Let us now proceed to examine the policy and expediency of such a pretension.
In this investigation I shall assume, as a basis of argument, the following position: That it is advantageous to nations to have commerce with each other.
Commerce, it is manifest, like any other object of enterprise or industry, will prosper in proportion as it is secure. Its security, consequently, promoting its prosperity, extends its advantages. Security is indeed essential to its having a due and regular course.
The pretension of a right to confiscate or sequester the effects of foreign merchants, in the case in question, is, in its principle, fatal to that necessary security. Its free exercise would destroy external commerce; or, which is nearly the same thing, reduce it within the contracted limits of a game of hazard, where the chance of large profits, accompanied with the great risks, would tempt alone the adventurous and the desperate. Those enterprises, which, from circuitous or long voyages, slowness of sales, incident to the nature of certain commodities, the necessity of credit, or from other causes, demand considerable time for their completion must be renounced. Credit, indeed must be banished from all the operations of foreign commerce; an engine, the importance of which, to its vigorous and successful prosecution, will be doubted by none, who will be guided by experience or observation.
It cannot need amplification, to elucidate the truth of these positions. The storms of war occur so suddenly and so often, as to forbid the supposition, that the merchants of one country would trust their property, to any extent, or for any duration, in another country, which was in the practice of confiscating or sequestering the effects of its enemies, found within its territories, at the commencement of a war. That practice, therefore, would necessarily paralyze and wither the commerce of the country in which it obtained. Accordingly, nations attentive to the cultivation of commerce, which formerly were betrayed, by temporary considerations, into particular instances of that atrocious practice, have been led, by the experience of its mischiefs, to abstain from it in later times. They saw that to have persisted in it would have been to abandon competition on equal terms, in the lucrative and beneficial field of commerce.
It is no answer to this, to say that the exercise of the right might be ordinarily suspended, though the right itself might be maintained, for extraordinary and great emergencies.
In the first place, as the ordinary forbearance of its exercise would be taken by foreigners for evidence of an intention never to exercise it, by which they would be enticed into large deposits, that would not otherwise have taken place; a departure from the general course would always involve an act of treachery and cruelty.
In the second place, the possibility of the occasional exercise of such a right, if conceived to exist, would be, at least, a slow poison, conducing to a sickly habit of commerce; and, in a series of time, would be productive of much more evil than could be counterbalanced by any good which it might be possible to obtain in the contemplated emergency, by the use of the expedient.
Let experience decide. Examples of confiscation and sequestration have been given. When did the dread of them prevent a war? When did it cripple an enemy, so as to disable him from exertion, or force him into a submission to the views of his adversary? When did it even sensibly conspire to either of these ends? If it has ever had any such effect, the evidence of it has not come within my knowledge.
It is true, that between Great Britain and the United States, the expectation of such effects is better warranted than perhaps in any other cases that have existed; because we commonly owe a larger debt to that country, than is usual between nations, and there is a relative state of things, which tend to a continuation of this situation.
But how has the matter operated hitherto? In the late war between the two countries, certain States confiscated the debts due from their citizens to British creditors, and these creditors actually suffered great losses. The British Cabinet must have known that it was possible the same thing might happen in another war, and on a more general scale; yet the appearances were extremely strong, at a particular juncture, that it was their plan, either from ill-will, from the belief that popular opinion would ultimately drag our Government into the war, from the union of these two, or from other causes, to force us into hostilities with them. Hence it appears, that the apprehension of acts of confiscation, or sequestration, was not sufficient to deter from hostile views, or to insure pacific dispositions.
It may be pretended, that the menace of this measure, had a restraining influence on the subsequent conduct of Great Britain. But if we ascribe nothing to the measures which our Government actually pursued, under the pressure of the provocations received, we at least find in the course of European events, a better solution of a change of policy in the Cabinet of Great Britain, than from the dread of a legislative piracy on the debts due to their merchants.
The truth unfortunately is, that the passions of men stifle calculation; that nations the most attentive to pecuniary considerations, easily surrender them to ambition, to jealousy, to anger, or to revenge.
For the same reason, the actual experiment of an exercise of the pretended right, by way of reprisal for an injury complained of, would commonly be as inefficacious as the menace of it to arrest general hostilities. Pride is roused; resentment kindled; and where there is even no previous disposition to those hostilities, the probability is that they follow. Nations, like individuals, ill brook the idea of receding from their pretensions under the rod, or of admitting the justice of an act of retaliation or reprisal by submitting to it. Thus we learn, from the king of Prussia himself, that the sequestration of the Silesia debt, instead of procuring the restoration for which it was designed, was on the point of occasioning an open rupture between him and Great Britain, when the supervention of a quarrel with France diverted the storm, by rendering him necessary as an ally.
Perhaps it may be imagined that the practice of confiscation or sequestration would be more efficacious to wound and disable Great Britain, in case of a war, than to prevent it. But this also is a vain chimera! A nation that can, at pleasure, raise by loan twenty millions sterling, would be in little danger of being disconcerted or enfeebled in her military enterprises by the taking away or arresting of three or four millions due to her merchants. Did it produce distress and disorder among those whom it affected and their connections? If that disorder was sufficient to threaten a general derangement of mercantile credit, and, with it, of the public finances, the pending war affords an example, that the public purse or credit could be brought successfully into action for the support of the sufferers. Three or four millions of exchequer bills applied in loans would be likely to suffice to prevent the partial evil from growing into a national calamity.
But we forget that, as far as the interruption of the payment of the debts due to her merchants could be supposed to operate upon Great Britain, war itself would essentially answer the purposes of confiscation or sequestration—by interrupting trade and intercourse, it is in fact in a great degree a virtual sequestration. Remittances to any extent become impracticable. There are few ways in which, on account of the state of war, it is lawful to make them; and debtors are, for the most part, enough disposed to embrace pretexts of procrastination.
The inconvenience of deferred payment would, therefore, be felt by Great Britain, with little mitigation, from the bare existence of war, without the necessity of our Government incurring the discredit and responsibility of a special interference.
Indeed, as far as the dread of eventual loss can operate, it ought in a great measure to have its effect exclusive of the idea of confiscation. Great Britain must want reflection, not to be sensible, that in making war upon us, she makes war upon her own merchants; by the depredations upon our trade destroying those resources from which they are to be paid. If she be indifferent to this consideration, it will be because she is governed by some motive or passion powerful enough to dispose her to run the risk of the entire loss—in the reliance of obtaining indemnification by the acquisitions of war, or in the terms of peace.
Will it be said that the seizure of the debts would put in the hands of our Government a valuable resource for carrying on the war? This, upon trial, would prove as fallacious as all the rest. Various inducements would prevent debtors from paying into the Treasury. Some would decline it from conscientious scruples, from a doubt of the rectitude of the thing—others, with intent to make a merit with their creditors of the concealment, and to favor their own future credit and advantage—others, from a desire to retain the money in their own employment; and a great number from the apprehension that the treaty of peace might revive their responsibility to the creditors, with the embarrassment to themselves of getting back, as well as they could, the moneys which they had paid into the Treasury. Of this, our last treaty of peace, in the opinion of able judges, gave an example. These causes and others, which do not as readily occur, would oppose great obstacles to the execution of the measure.
But severe laws, inflicting heavy penalties, might compel it. Experience does not warrant a sanguine reliance upon this expedient, in a case in which great opportunity of concealment is united with strong motives of inclination or interest. It would require an inquisition, justly intolerable to a free people—penalties, which would confound the due proportion between crime and punishment, to detect or to deter from concealment and evasion, and to execute the law. Probably no means less efficacious than a revolutionary tribunal and a guillotine would go near to answer the end. There are but few, I trust, to whom these would be welcome means.
We may conclude, therefore, that the law would be evaded to an extent which would disappoint the expectations from it, as a resource. Some moneys, no doubt, would be collected; but the probability is that the amount would be insignificant, even in the scale of a single campaign. But, should the collection prove as complete as it ordinarily is between debtor and creditor, it would little, if at all, exceed the expense of one campaign.
Hence we perceive that, regarding the measure either as a mean of disabling our enemies, or as a resource to ourselves, its consequence dwindles, upon a close survey; it cannot pretend to a magnitude which would apologize either for a sacrifice of national honor or candor, or for a deviation from the true principles of commerce and credit.
But let us take a further view of its disadvantages.
A nation, in case of war, is under no responsibility for the delinquencies or frauds of its citizens, who are debtors to those of its enemy, if it does not specially interfere with the payment of the debts which they owe. But if it interposes its authority to prevent the payment, it gives a claim of indemnification to its adversary for the intervening losses which those delinquencies or frauds may occasion. Whether, on the making of peace, this would be insisted upon or waived, might depend much on the good or ill success of the war; but every thing which adds to the catalogue of our enemy’s just pretensions, especially when the fortune of war has been pretty equal, is an evil, either as an additional obstacle to speedy peace, or as an ingredient to render the terms of it less advantageous to ourselves. And it is, therefore, unwise in a government to increase the list of such pretensions, by a measure which, without utility to itself, administers to the indolence of negligent, and to the avidity of fraudulent individuals.
Further—Every species of reprisal or annoyance which a power at war employs, contrary to liberality or justice, of doubtful propriety in the estimation of the law of nations, departing from that moderation which, in later times, serves to mitigate the severities of war, by furnishing a pretext or provocation to the other side to resort to extremities, serves to embitter the spirit of hostilities, and to extend its ravages. War is then apt to become more sanguinary, more wasting, and every way more destructive. This is a ground of serious reflection to every nation, both as it regards humanity and policy; to this country it presents itself, accompanied with considerations of peculiar force. A vastly extended sea-coast, overspread with defenceless towns, would offer an abundant prey to an incensed and malignant enemy, having the power to command the sea. The usages of modern war forbid hostilities of this kind; and though they are not always respected, yet, as they are never violated, unless by way of retaliation for a violation of them on the other side, without exciting the reprobation of the impartial part of mankind, sullying the glory and blasting the reputation of the party which disregards them, this consideration has, in general, force sufficient to induce an observance of them. But the confiscation or sequestration of private debts, or private property in public funds, now generally regarded as an odious and unwarrantable measure, would, as between us and Great Britain, contain a poignant sting. Its effect to exasperate, in an extreme degree, both the nation and government of that country, cannot be doubted. A disposition to retaliate, is a natural consequence; and it would not be difficult for us to be made to suffer beyond any possible degree of advantage to be derived from the occasion of the retaliation. It were much wiser to leave the property of British subjects an untouched pledge for the moderation of its government in the mode of prosecuting the war.
Besides (as, if requisite, might be proved from the records of history), in national controversies, it is of real importance to conciliate the good opinion of mankind; and it is even useful to preserve or gain that of our enemy. The latter facilitates accommodation and peace; the former attracts good offices, friendly interventions, sometimes direct support, from others. The exemplary conduct, in general, of our country, in our contest for independence, was probably not a little serviceable to us in this way; it secured to the intrinsic goodness of our cause every collateral advantage, and gave it a popularity among nations, unalloyed and unimpaired, which even stole into the cabinets of princes. A contrary policy tends to contrary consequences. Though nations, in the main, are governed by what they suppose their interest, he must be imperfectly versed in human nature who thinks it indifferent whether the maxims of a State tend to excite kind or unkind dispositions in others, or who does not know that these dispositions may insensibly mould or bias the views of self-interest. This were to suppose that rulers only reason—do not feel; in other words, are not men.
Moreover, the measures of war ought ever to look forward to peace. The confiscation or sequestration of the private property of an enemy must always be a point of serious discussion, when interest or necessity leads to negotiations for peace. Unless when absolutely prostrate by the war, restitution is likely to constitute an ultimatum of the suffering party. It must be agreed to, or the war protracted, and at last, it is probable, it must still be agreed to. Should a refusal of restitution prolong the war for only one year, the chance is that more will be lost than was gained by the confiscation. Should it be necessary finally to make it, after prolonging the war, the disadvantage will preponderate in a ratio to the prolongation. Should it be, in the first instance, assented to, what will have been gained? The temporary use of a fund of inconsiderable moment, in the general issue of the war, at the expense of justice, character, credit, and, perhaps, of having sharpened the evils of war. How infinitely preferable to have drawn an equal fund from our own resources, which, with good management, is always practicable! If the restitution includes damages, on account of the interference, for the failures of individuals, the loan will have been the most costly that could have been made. It has been elsewhere observed that our treaty of peace with Great Britain gives an example of restitution. The late one between France and Prussia gives another. This must become every day more and more a matter of course, because the immunity of mercantile debts becomes every day more and more important to trade, better understood to be so, and more clearly considered as enjoined by the principles of the law of nations.
Thus we see that, in reference to the simple question of war and peace, the measure of confiscation or sequestration is marked with every feature of impolicy.
We have before seen that the pretensions of a right to do the one or the other has a most inimical aspect toward commerce and credit.
Let us resume this view of the subject. The credit which our merchants have been able to obtain abroad, especially in Great Britain, has, from the first settlement of our country to this day, been the animating principle of our foreign commerce. This every merchant knows and feels; and every intelligent merchant is sensible that, for many years to come, the case must continue the same. This, in our situation, is a peculiar reason, of the utmost force, for renouncing the pretension in question.
The exercise of it, or the serious apprehension of its exercise, would necessarily have one of two effects. It would deprive our merchants of the credit, so important to them, or it would oblige them to pay a premium for it, proportioned to the opinion of the risk. Or, to speak more truly, it would combine the two effects; it would cramp credit, and subject what was given to a high premium. The most obvious and familiar principles of human action establish, that the consideration for money or property, lent or credited, is moderate or otherwise, according to the opinion of security or hazard, and that the quantity of either to be obtained, on loan or credit, is in a great degree contracted or enlarged by the same rule.
Thus should we, in the operations of our trade, pay exorbitantly for a pretension which is of little value, or rather, which is pernicious, even in the relations to which its utility is referred. What folly to cherish it! How much greater the folly ever to think of exercising it!. It never can be exercised hereafter, in our country, without great and lasting mischief.
Instead of cherishing so odious a pretension, as “our best, our only weapon of defence,” wisdom admonishes us to be eager to cast it from us, as a weapon most dangerous to the wearer, proscribed by the laws of nations, by the laws of honor, and by every principle of sound policy.
Every merchant ought to desire that the most perfect tranquillity on this point, in foreign countries, should facilitate to him, on the best and cheapest terms, the credit for which he has occasion. And every other citizen ought to desire, that he may be thus freed from a continual contribution, in the enhanced price of every imported commodity he consumes, towards defraying the premium which the want of that tranquillity is calculated to generate.