Front Page Titles (by Subject) A PLEA FOR THE Poor Soldiers: OR, AN ESSAY To demonstrate that the Soldiers and other Public Creditors, who really and actually supported the Burden of the late War, HAVE NOT BEEN PAID, OUGHT TO BE PAID, CAN BE PAID, and MUST BE PAID. [ Fir - Political Essays on the Nature and Operation of Money, Public Finances and Other Subjects
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A PLEA FOR THE Poor Soldiers: OR, AN ESSAY To demonstrate that the Soldiers and other Public Creditors, who really and actually supported the Burden of the late War, HAVE NOT BEEN PAID, OUGHT TO BE PAID, CAN BE PAID, and MUST BE PAID. [ Fir - Pelatiah Webster, Political Essays on the Nature and Operation of Money, Public Finances and Other Subjects 
Political Essays on the Nature and Operation of Money, Public Finances and Other Subjects, published during the American War, and continued up to the present Year, 1791 (Philadelphia: Joseph Crukshank, 1791).
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A PLEA FOR THE Poor Soldiers: OR, AN ESSAY To demonstrate that theSoldiersand otherPublic Creditors,who really and actually supported the Burden of the late War, HAVE NOT BEEN PAID, OUGHT TO BE PAID, CAN BE PAID, and MUST BE PAID.
WHEN the funding bill of Pennsylvania was published for consideration, five years ago, I wrote my Seventh Essay on Free Trade and Finance, in which I advanced sundry principles and arguments, which, perhaps, may apply as well to the finance of the Union in general, as to that of Pennsylvania in particular; and, of course, it may be necessary here, to repeat and revise many of the principles and arguments therein advanced and fully discussed; but a reference to that Essay will make a full enlargement on them unnecessary in this place.
In an Essay of this sort, it will probably be expected, I. That the monies necessary for the public exigence, should be stated: II. The resources out of which these monies are to be raised, should be considered: and, III, The mode of assessments and collections should be attended to.
I am informed, that these will be the first great objects of attention in Congress, on the opening of the ensuing session.
My present design is, to state and advocate the rights and claims of a great and very respectable class of our citizens, whose distinguished merit entitles them to the justice, and, indeed, to the gratitude also, of their country, but who are, I fear, at least many of them, in danger of being neglected and losing the reward due to them, for the supplies and services which they rendered their country in the greatest public distress.
And the very money which is granted and paid by the country, for the just recompense of these worthy and deserving patriots, is, by a strange fatality of events, absurdity of reasoning, and perversion of counsel and right, I say, this money is proposed by some to be diverted from, and never paid to, them; but to be given to another class of citizens and foreigners, who do not pretend to any merit of their own, or to have earned any of the money, but whose claim and demand is founded wholly on the merit and earnings of these worthy citizens, who are, by the very plan, to lose it all, and get none of it.
The worthy patriots I allude to, are those who, during the war, when our country was overwhelmed with infinite distress and danger, rendered their services, supplies, and money in its defence, but who, on the adjustment of their accounts, could not be paid, by reason of the deficiency of the public finances of the States, and, therefore, were obliged to accept certificates of the balances due to them, with premises of interest and payment in future time.
These certificates were made payable to the bearer, and of course were negotiable, and were worth about 2s. or 2s. 6d. in the pound, their value being estimated by the current or common price, at which they were generally bought and sold in the public market; for the value of certificates, as well as of every thing else that becomes an object of general exchange or transfer, must, and ever will, be estimated by the current or common price it will bring in market.
That the common price at which such certificates were generally bought and sold at the close of the war, was in fact about 2s. or 2s. 6d. may easily be made appear in a most incontrovertible manner, by the testimony of thousands and thousands, who bought and sold them the first year or two after the close of the war, when the great bulk of them were issued, and when the greatest sales of them were made by the original holders.
Since this period they have been hawked and jockied about by the speculators and brokers, like an ignis fatuus, at a great variety of desultory risings and fallings of price, according to the opinion, or whim, or caprice, or deception which happened to prevail in the minds of men at the time; the tracing or even considering of which, I conceive of no manner of consequence at present.
It follows from the foregoing observations, that the value of the public certificates, at the time of their being issued, may be easily ascertained; and so much the public creditors who received them, were paid, and no more, say 2s. 6d. in the pound; and the remainder, say 17s. 6d. in the pound, and the interest of it from that time, is still due to them.
That this remainder or balance ought to be paid to them, with the money which is, or may be, granted and paid by the public, for the express purpose of satisfying and rewarding these worthy citizens, for their dear and painful earnings in their country’s cause, and that the said money ought not to be diverted from this most just and valuable purpose, on any reason or pretence whatever; I say, that the balance which they have not received, and which, of course, is still due, ought to be paid to them, is a most capital object to be proved, urged, and enforced in the present Essay.
I shall attempt, and cannot doubt I shall be able, to prove to the satisfaction of every judicious reader,
And, to satisfy the grateful wishes of all our citizens, and to establish our national character of honor and humanity, both at home and abroad, That they must be paid.
For this purpose, I beg the candid attention of my reader to the following propositions:
I. No public creditor who receives a certificate, is thereby paid any more than the value of the certificate at the time of delivery, i. e. it is not the nominal value but the real value only, i. e. the current price of it, which is to be regarded in estimating the quantity of payment made by it.
When any body proposes to pay a debt in bills of exchange, bills of paper money, certificates, or any bills of public or private credit (if the creditor agrees to accept such payment) the first question that invariably occurs is, what is the exchange? i. e. no regard at all is paid to the nominal value, but reference is constantly had to the exchange or current price in market, in order to determine what amount of such bills shall be given to satisfy the debt. This practice is so universal among all men, and grounded on such manifest principles of right, that I cannot conceive that any man can be found, who will dispute either the reality or propriety of it.
The practice of Congress, the supreme council of the Union, affords a precedent of this same principle, adopted by them, respecting their loan-office certificates.
They published by their authority a scale of depreciation, by which the value of those certificates was estimated at the real exchange they had at the time of their dates, and the rate of their final redemption was fixed on the same principle.
All the States adopted the same principle, either by making use of the scale of Congress, or establishing scales of their own, by which the value of Continental money was estimated thro’ all the stages of its depreciation.
This practice of Congress and of all the States was founded not only on absolute necessity, but on the plainest principles of right; and if they made any deviation from justice, in the adjustment of any of their scales, this was no error in the principle, but merely a fault in the practice or use of it. And surely there can be no reason why the same rule (if a good one) of estimating the real value of certificates issued in 1777 and the subsequent years, should not be applied to the certificates which were issued at the close of the war.
But there is certainly great reason why our most virtuous citizens, who, by their patriotic efforts, services, and supplies, supported the war, and saved our country, should not be subjected to the loss of seven-eighths of their just dues, for want of such a rule, or some other means of saving them from such ruinous and shameful injustice.
Farther, let us appeal to plain, common sense on this subject. When the public accounts were settled at the close of the war, the public creditors were entitled to their several balances due to them from the States, in good hard money. Now can any possible reason be given, why a certificate worth but 2s. 6d. should be good payment to them, of 20s. at that time, any more than now at this time? I believe it will be readily admitted, that if any body (personal or aggregate) should, at this time, seriously propose to pay a debt of 20s. with a certificate or any thing else, which was worth but 2s. 6d. the offer would be rejected with every degree of contempt, as a most villainous and rascally insult.
Is there one Member of Congress, who would not think himself abused by the offer of a certificate worth 3-5ths of a dollar, in full satisfaction of six dollars, which he expects for one day’s attendance in the house? but how aggravated and keen, would be his feelings and chagrin, if he should neglect his family and private concerns, and attend Congress seven years, and, at the end of the term, should be paid off in certificates of the same depreciated value!
Or, do you think his vexation would be softened any, by being told, that tho’ his certificates were really worth at present but 2s. 6d. in the pound, yet the sum expressed on the face of them was 20s. in the pound, and therefore he must be satisfied with them as good and full payment, and if he would have patience to keep them long enough, they might perhaps bring him the full, real value expressed in them?
I believe every Member of Congress will readily allow, that I have hit on what would be the true feelings of any of his brethren, and even of himself, in such a supposed case. If so, gentlemen, please to do as you would be done by; this rule of conduct is enjoined upon you by an authority much superior, and far paramount, to any you can lay the least claim to, in your utmost dignity, and fullest possession of sovereign power.
From all this it appears evident, that the public creditors, who have received certificates in payment, were paid no more than the current value or exchange of the certificates, at the time they received them. So much is paid and no more, and so much and no more they ought to be debited, and the residue of the debt, not having been paid, is still due to them.
It farther appears, that the certificates which were delivered to the soldiers and other public creditors, on the final settlement of their accounts, after the close of the war, were worth not more than 2s. 6d. in the pound, which ought to be debited to them, and the remaining 17s. 6d. in the pound, being unpaid, still remains due to them.
II. These balances which remain unpaid to the public creditors, ought to be paid as soon as possible. The sums due to them are their dear, their painful earnings; these claimants are the soldiers who fought, and the citizens who supplied them, when the salvation of our country was the great prize contended for; it is owing to their virtuous and strong exertions, that we have any thing left, either for our own enjoyment, or the payment of them.
We have no instance in history, of an army who discovered and practised more spirit, firmness, patience, discipline, fortitude, and zeal, either under the instant pressure of the greatest hardships and sufferings, or in the solemn and awful march to the most dangerous enterprises, or in the arduous moments of battle, than were found in our troops.
Nor did they hesitate or faulter in the least, till they had completed their great work, raised their own, their general’s, and their country’s honor and character to the utmost height, and reached the arduous goal which they had constantly in view, thro’ every stage of their fatigue and danger; this glorious goal was the complete liberation of one of the greatest empires of the earth, which empire we are, who sit clothed in all the majesty of empire, wealth, and power, solemnly deliberating, whether we shall pay these our deliverers, or not.
That “the laborer is worthy of his hire,” is the great doctrine of commutative justice, that divine law of nature, and nature’s God, which, in the utmost majesty of command, connects the quid pro quo, that august principle on which alone all thrones and governments can acquire and fix a permanent establishment; this sacred principle, I say, requires that these worthy claimants should be paid the money due to them, because they have dearly, nobly, and faithfully earned it.
There is in every human heart, a principle of right, a principle planted by the great Creator, ever approving the things which are most excellent; how far soever this sacred principle may become generally practical, emanate and spread in society, and govern and direct the general mind; yet the dispensation of public justice and right, lies in the power, and becomes the peculiar duty, of a few men, the chosen and dignified few, to whom the administration of the great affairs and interests of the nation are committed.
These dignified personages are sometimes called gods; they certainly sit in the place of God, and whether given to the people in wrath or mercy, are certainly appointed by him, and the sacred charge and duty of imitating his government lies on them; judgment and justice are the habitation of his throne; and these sacred virtues ought always to be found in our supreme council, not as transient persons who may be called in on favorite occasions, where their presence may be pretty well admitted, and their inspection may be tolerable, but as constant residents, who take up their dwelling there, as the place of their uniform habitation.
With a heart melted in sympathy with the sufferings of my country’s deliverers, with a sublimated sense of the importance, as well as sacred nature, of the justice and judgment of our nation, I most devoutly implore (and doubt not the concurrence of every honest American) that these sovereign and sacred virtues may dwell, not only in our supreme councils, but in the heart of every member who shall give his vote in the decision of this most capital and interesting cause which I am pleading.
Another thing which ought to induce us to pay these worthy citizens is, their brilliant success, and the most important benefits we derive from their exertions. I do not say that success simply is a virtue, but it is a very great proof of it, in as much as success generally follows prudent, spirited, and persevering conduct; nor do I say that rewards ought to be proportioned to the benefits received; for by this rule we can never pay enough to our deliverers; but where the benefits accruing from virtuous exertions are very great, they at least become entitled to a full compensation, and perhaps liberal minds will think a generous one might with great propriety be allowed.
We call general Washington, the father and saviour of his country, and with great propriety; the virtues of a father he might have possessed alone, but the saviour of his country he could not have been without his army. He indeed designed with discernment, commanded with prudence, and led on his troops with fortitude; but altho’ these virtues were carried by him beyond the power of imitation, the success must have failed, had not his army co-operated with his designs effectually, obeyed his orders cheerfully, and followed him with firmness; without these, neither his laurels could have been obtained, nor our deliverance have been completed.
They were his faithful companions in distresses, in dangers, in battles, in victories; they shared his fortunes, they shared his merits, and they persevered with him, till they also shared his final successes, which put a period to their long and patient labors, and our country’s calamities.
How would all the fine feelings of the human mind have glowed in the breast of that exalted general, if, in that period of triumphant and final success, he could have called these his dear and worthy fellow-laborers and fellow-sufferers together, met their brightened countenances with the warmest mutual congratulations, thanked them for their services, and dismissed them with such rewards, as would have enabled them to return to their families with some degree of advantage, as well as honor.
But I will draw a veil over the rest, and only say, the hard necessity of the times prevented this; the general knew it, the soldiers knew it, and submitted with patience to accept their discharge, and find their way home as they could, with empty hands and dry lips.
Is it possible that the great councils of America shall suffer such persevering fortitude, discipline, and patience to go without their reward? Generous allowances are not demanded; liberal appointments are not solicited; no more is required than the simple pay which was promised them by Congress; all they ask for, is the fulfilment of that sacred contract, which is grounded on the public faith and honor of an empire.
Indeed, I think that the patient and quiet behaviour of the real public creditors, both at the close of the war and since, entitles them to the highest esteem and respect of all our citizens, and should excite a very strong zeal, to make the most powerful efforts to do them right; it is certainly mean, base, and shameful, it is below the dignity of a nation, to deny or delay that justice to virtuous, quiet, and well-behaved citizens, which would be granted to tumult, uproar, and insurrection.
Will any man presume to say they are quiet, because it is not in their power to make disturbance? This is very ill-natured; but were it really the case, it would bring them into the rank of helpless persons, like the widows and fatherless, who have rights which they are not able to assert and support; these are entitled to the most peculiar and tender protections of the government; the wrongs and oppressions of such as these, are always ranked among the most horrid and cruel acts of injustice.
But I do not conceive this to be the real fact; all States have found that there may be as great force and strength in the still, small voice, as in the explosions that break the cedars of Lebanon; it is not commonly a fretfulness of temper in the people, but the cause of complaint, which breeds disturbances in a State; it is rare that people can be worked up into general insurrection, without some great and general cause.
Wrongs and oppressions diffused over a State will always sow the seeds of discontent; these sit easy on nobody; but always operate by way of fret and resentment, and are generally the causes of serious insurrections, and sometimes of most capital revolutions, in government; I know of but one sure way to keep the people quiet and easy in any government, and that is, to cause ‘justice and judgment to run down its streets, and righteousness to cover it.’
But it ought to be noted here, that tho’ the proper way to keep the subjects of any State in quietness, is to do them justice, yet it does not follow, that no men will be quiet under wrongs; many virtuous and good citizens will put up with injuries, and bear them with patience, rather than engage in pursuits for redress, which may make the remedy worse than the disease; few men would be willing to foment public disturbances, and make the land of their nativity a scene of desolation and horror, to gain redress of personal wrongs, or to gratify a spirit of revenge.
Many good men would patiently suffer injuries, rather than even give uneasiness to their oppressors, especially where the wrong happens to proceed from some near connection, a brother, a father, or perhaps the fathers of their country; but this virtuous patience under injury I deem highly meritorious, and deserving the utmost attention to their rights, and the redress of their wrongs.
But when the very people from whom redress is expected, begin to take advantage of the peaceable disposition of such a citizen, to think him void of spirit, and proceed to insult his wrongs, trifle with his demands, ridicule his pretensions, and plead absurd arguments in avoidance of his claims, arguments which are a burlesque of common sense, and which cannot meet the approbation of that discerning power, which the all-wife Creator has planted in every human mind, as the great index of right and wrong; I say, when insults of this sort are added to injuries, there is a point, a bound, beyond which human patience will not endure, and, of course, such injuries never will be offered to any person who is supposed to be in condition to assert and vindicate his own rights, or to resent properly the insults offered to him.
For example, let us suppose that the Continental army, officers and men, with those who, by their contributions, fed and clothed them, were all met together, with their august general at the head of them,* and, in this respectable state, should present their humble petition to Congress for their pay; do you think, gentlemen, that there is a man in all the States, either in or out of Congress, who would venture to tell them they were paid already, and bad no right to expect any thing farther from their country?
If a speech of this sort is supposable, it may be proper to consider it a little more particularly. I conceive that any speech directed to an army, the great subject of which is, to persuade them, after seven years’ hard service, to go off quietly without their pay, must necessarily carry in it materials somewhat rough, harsh, and not much suited to the tasle of the hearers; it will therefore, doubtless, be necessary to soften and sweeten it as much as may be, in order to insure its proper effect.
I will go on then to suppose, if you please, that some grave person of known wisdom, candor, and polished manners, should rise up to make an address to this great and respectable body of citizens, which, I think we may presume, might be pretty nearly in the following manner, viz.
“Gentlemen—I address you as most respectable citizens; your conduct has been noble; your merits are known to all the world, and acknowledged by all the States. Your arduous, persevering efforts have saved your country. What a pity is it then, that after so much worthy action, and so much triumphant virtue, you should be inadvertently betrayed into such an improper conduct, as to petition for your pay; inadvertently betrayed, I say, for I do not attribute your present application to any evil design; but to your having somehow imbibed very improper sentiments. I must be so free, gentlemen, as to tell you, you have been paid, fully paid already.”
Here the soldiers interrupt the orator.—“Paid already! fully paid! with certificates worth but 2s. 6d. in the pound, and hard work to get so much.”
The orator resumes—“Have patience, my friends; do not interrupt me; I am delivering the sense of your country.”
Soldiers.Is it the sense of our country, that a debt of 20s. can be paid, fully paid, with a certificate, or any thing else, which is worth, and will sell for, but 2s. 6d.?
Orator. “I again beg your patience a little, my dear friends; it is true, your certificates, when you received them, were indeed somewhat dull and low; they would not fetch more than 2s. 6d. in the pound, and hardly that; 2s. 6d. was the extent of the general current price of them; but surely you ought to consider this was no fault of the certificates; they were wrote on as good paper, and with as good ink, as need be, and 20s. was wrote on them as plain as could be wished; and not only so, but the public faith of the States, the sacred honor of your country, was annexed to that 20s. and solemnly pledged to make it good, and what could you wish more? Certainly, gentlemen, you cannot have the assurance to suggest, or even to think, that the public faith, the sacred honor of your country, was worth but 2s. 6d. in the pound! that their State-bills of 20s. were worth but half a crown.”
Soldiers. We do not wish to enter into any conversation about public faith and honor; it seems to us, that this subject is not very proper to talk much of, at this time; for the least said is soonest forgot; but one thing we know and feel, that we could get no more than 2s. 6d. in the pound for our certificates; and our necessities obliged us to part with them for what we could get.
You will please to consider, sir, it is no small thing for people in our condition, to be deprived of seven years’ hard earnings, carved out of the prime of life, and to be left with nothing to begin the world with, or even to keep ourselves and families from starving.
Orator. “I do not blame you in this distress for selling your certificates; but you ought to have considered, that, when you sold them, you made over and transferred all your right to payment, for all your services and advances to your country, and, therefore, ought not to have sold them so cheap; you really hurt yourselves, and debased the honor and credit of the States, by that imprudent step; had you been wise enough to have sold them at 20s. in the pound, your necessities had been better relieved, and all this trouble and perplexity which you give yourselves and us, would have been prevented.”
Soldiers. You might as well blame us for not turning our certificates into joes and guineas; you know as well as we, that it was absolutely impossible to get more for them, or do better with them, than we did; we received the certificates made payable to the bearer, and of course, negotiable, and calculated to be bought and sold, i. e. to circulate like cash thro’ any and every hand; but we had no idea when we sold them, that we sold any more than we received; or that our selling them destroyed our demand on the States, for that part of our earnings which we had not received, and which was not paid to us; nor can we conceive, how our sale of negotiable certificates can operate on our real earnings like an enchanter’s wand, so as to annihilate them, or turn them into a mist.
Orator. “I observe, gentlemen, you grow somewhat warm; I wish to avoid all ill-humor and hard language; you have deserved nobly; you have gained great honor; you have saved your country; and I hope, after all this merit, you will neither tarnish your own honors, nor disturb your country’s peace, by your uneasiness and discontent.
“What is done is passed and cannot be recalled; I earnestly recommend to you, my dear and honored fellow-citizens, to return home peaceably and quietly like virtuous and good christians, and go to work double tides, to raise money to pay the present holders of your certificates; for however foolishly you parted with them under value, yet the public faith is annexed to them, and must be supported.”
I appeal to every man in the Union, whether this address, or rather dialogue, does not state every fact and every argument, truly and fairly; and whether such a statement of facts and arguments would be likely to send the hearers home contented and quiet, without their pay; I trow not. If the above statement is not right, I challenge any body that can, to mend it; for my part, I freely own my opinion, that the whole harangue, tho’ ever so well-dressed and polished, is, and must be, from the nature of the facts, an insult not only on these worthy citizens, who rendered their supplies and services to their country during the war, but on common sense itself, and must wound the natural feelings of the humane mind, and which no man of honesty and candor could ever make in the absence of the parties, and which no man, who had any regard to personal safety, would dare to make in the presence of them.
The Orator’s plan is, to consider the certificates delivered to the public creditors, on the settlement of their demands, for supplies and services rendered during the war, to consider these certificates, I say, as full payment of the sum due to them, and to redeem the certificates at full nominal value, by payments made to the bearers of them.
It is farther a most plain fact, that the certificates were not worth more than 2s. 6d. in the pound, at the time they were delivered to the real public creditors, on the final settlement of their accounts, after the close of the war.
And it is a farther plain fact, that by far the greatest part of these certificates have been sold by the original holders, in their necessities and distresses, to persons who are now possessed of them, at 2s. 6d. in the pound, or at most for some trifle which bears but small proportion to the nominal value.
Now this plan, dress it, and cook it, and season it, and color it in any and every way you possibly can, if carried into execution, will most necessarily and unavoidably draw after it these two consequences:
1. That a sum of many millions of money must be levied and collected from the labor and painful earnings of the citizens of the States, not to be paid to the worthy citizens, who, by their supplies and services, during their country’s distress, have merited and earned it, but to be paid to numbers of rich speculators, who have no pretence of having merited or earned any of it, and who will, upon the earnings of those others, make a profit immense, not less in thousands of instances than 1000 per cent. Whilst,
2. The great bulk of the worthy citizens, who, by their supplies and services, really and dearly merited and earned the money, but who have sold their certificates (which is the case of by far the greatest part of them) must and will absolutely and finally lose 7-8ths, and very many even eleven parts out of twelve, of their real merits and painful earnings, from which shameful injustice, Good Lord, deliver us.
I beg leave here to ask the gentlemen who compose our supreme administration, legislative, executive, and official,
1. Whether they can possibly reconcile their own minds to any plan which involves such gross injustice?
2. Whether any of them could be prevailed on, at any time of their lives, on any consideration, to pay a private debt of their own of 20s. with a certificate, or any other depreciated paper, worth but 2s. 6d.?
3. Whether in heaven or earth (and farther we need not go) I say, whether in heaven or earth, there can be found a reason which can justify a minister of State, or any public man, employed in the dispensation of the justice and judgment of a nation, in devising or doing any thing, which, in his personal capacity, would wound his honor and conscience, and damn him to eternal infamy and contempt.
It is known to every body, that at the close of the war, our nation was bankrupt; at least they stopped payment, could not, and did not, do justice to those to whom they were justly indebted; and if we could not pay them when we ought, the only way to heal and remedy the matter, is to pay them when we can; and it is mighty plain, if we honestly mean to pay our debts, we must not only pay the whole money we owe, but must pay it to those to whom we owe it; for paying it to any body else can be no satisfaction of the debt.
Nothing can be more absurd than to apply the common rule of assignments of negotiable notes, bills of exchange, &c. to the public certificates; the exchange of the one rarely rises or falls more than 4 or 5 per cent.; the depreciation of the other is 15 or 20 times as much, and is so enormous, that the principal value is absorbed by it, and not more than 1-8th or 1-10th part of the nominal value in reality remains; here is an extreme case indeed, and it is well known that every law, right, or rule of morality is limited to its mean or reasonable application; the moment it diverges therefrom, and flies into its extreme, it loses its rectitude and equity, and becomes injurious and wrong; and the sure and infallible criterion of such extreme, is when such application operates by way of injustice and destruction of right.
And in the case in point before us, the application of the common rule of assignments, to the certificates, has a necessary operation, most cruel, injurious, and hurtful in two respects:
1. It takes an immense sum of money from virtuous citizens, who dearly merited and earned it, and subjects them to a total and ruinous loss; whilst,
2. It conveys the same immense sum to other men, who never merited or earned it all, and gives them an enormousprofit of 1000 per cent. on the merits and earnings of the losers.
This whole doctrine is so perfectly known and familiar to all doctors in law and morality, that they have adopted it for a proverb or maxim, summum jus, summa injuria, i. e. right in extreme becomes extreme wrong; and nobody ever pretended to dispute this maxim, who was not either most poignantly pressed with argument (in which case the schoolmen will make any shifts) or hurried and impelled by some favorite scheme or interest, out of all their philosophy, decency, and common sense.
There is another plan or method of doing this business, which appears to me much more just and equitable, and quite as easy as the one I have been exploding, viz. Let every certificate be estimated by a scale of value, grounded on the current price or exchange of it at its date, and at this value let it be debited to every public creditor who received it, and at the same value,*or at the current value (as the case mayrequire) let it be redeemed, with interest from its date to the time of its redemption, and let the remainder of the balances due to the public creditors, who have received certificates, be paid them in money with interest, as soon as that can be done.
I know no reason why the real or current value of the certificates in question should not be fixed by a scale, as well as the loan-office certificates, and other depreciated public paper, during the war; this principle, as I before observed, was adopted not only by Congress, but by all the States, as a matter of both justice and necessity, and the tender-acts and other infringements of this plan, were found totally wrongful, and, of course, were repealed.
No human plan of dispensing commutative justice to a nation, can ever be perfect and wholly free from error; all that human wisdom and human virtue can do, is to adopt that plan, which, in its operation, shall produce the most justice and right, and the least injury and wrong, of any that can be devised, and carry the plan into effect by the most equitable administration which can be practised.
If this then is a good rule or criterion of a good plan (which certainly no man can seriously deny) let us try the two plans by this infallible touchstone, viz. which of them, in its operation, will produce the most justice and utility, and avoid the greatest injury and wrong.
1. The justice and utility of the one is reduced by its operation to almost nothing, whilst the injuries and wrongs it produces are enormous, detestable, and almost infinite; no less than depriving numberless citizens of 9-10ths of the reward due to their great merits and services, and subjecting them to a final and total loss of the same, whilst it heaps the immense wealth (which is their due, and which they lose) on another class of men, who have no pretence to any merit at all.
2. The other plan gives to those meritorious citizens all the rewards to which they are entitled, and if any injustice has been done them by the long delay, it is in some measure made up to them by the interest it proposes to give them, whilst it gives to the purchasers of alienated certificates, the same price for them which they were worth when first issued, with interest from that time till their redemption; and I think this is all they have a right to expect, and we may very well say to each of them, Take what is thine own with usury, and more we will not give thee.
If this class of men sustain any loss, it must arise from their having purchased certificates at a higher exchange or price than they bore when they were first issued, and this is a loss to which speculations of that sort are always exposed; if any of our rich and enterprising citizens are disposed to deal in stocks, gamble in the funds, or to be concerned in any negotiations of hazard whatever, they all expect to be liable to a run of ill luck, as well as to good fortune; and I do not know that the public have much occasion to trouble themselves about either their profit or loss.
But if the losses of these men should be thought pitiable, they certainly, in either magnitude or distress, bear not the least proportion to the heavy, ruinous losses, which our most virtuous and meritorious citizens must sustain on the other plan; much less can they justify the adoption of a plan in their favor, which will deprive our most respectable citizens of the immense sums due to their painful merit and services, in order to lavish the same away on these adventurous speculators, and thereby accumulate the fortunes of the one, and the distresses of the other, to a degree almost infinite.
But after all, if the losses of these speculating gentry must be thought to require compensation, I beg it may be made by the public, but by no means let it be carved out of the dear merits and earnings of the noblest patriots of our country.
But the sacred duty of paying these worthy citizens, who have done and suffered so much for our country, and from whose noble exertions we actually derive and enjoy most inestimable benefits, is not only enforced on us by every principle of justice, honor, and gratitude; but it is farther recommended by many advantages and great inducements of interest, which are either involved in it, connected with it, or consequential from it. It may be proper here to mention some of these.
The reverence and respect which we owe to general Washington, ought to induce us to pay with punctilious honor and justice, these his faithful followers and fellow-laborers; it is known only to God, and the humane heart of that august commander, what anguish of mind, what poignant sensibility of regret and compassion occupied his breast, at the close of the war, when the exhausted finances of the country reduced him to the dreadful necessity of dismissing his faithful followers without their pay, and leaving them to find their way home as they could, without a shilling, either to relieve the distresses of their families on their return, or even to buy a cup of good liquor to recruit their exhausted spirits, or make their meeting cheerful.
It is known only to God, and to the humane heart of that august commander, how animated, how alive would be every fine sensibility of that great man, how dilated his whole heart, could he be informed that the justice and gratitude of his country would furnish the reward due to the virtues and merits of these his worthy followers and supporters.
With what a suffusion of pleasure would he hasten to find out these noble spirits in their retreats of obscurity and distress, extend to them the welcome relief, and sympathize in their joy and gladness; is it possible we should hesitate to indulge a man we reverence and esteem so highly, with this gratification, in which every good heart in our nation would sympathize, and which every feeling of honor and compassion strongly requires of us?
On the other hand, do you think he could bear a disappointment in this, with his usual equanimity? He can bear hardships and dangers, he can bear a retreat before his enemies, he can bear the horrors of war, and the dreadful collisions of a battle, he can bear the joys and triumphs of victory, he can bear final and decided successes, and he can bear the universal applause, gratitude, and melting hearts of his fellow-citizens; I say, he can bear all these with that heroic strength of mind, which, indeed, feels every incident, but can control every passion into calmness and decency.
But were he to see the immense sum of money due to his companions and supporters, twice earned, first by their toils and supplies, and then again by the citizens at large, out of whose labor the money was carved and collected, were he to see, I say, this immense sum all swept away into the coffers of those who never earned any of it, whilst his dear companions were left to lament, in remediless despair, the savage injuries of their country, the disappointment of all their last expectations, and the hopeless ruin of their fortunes and families; this, I think, would be too much for his mighty fortitude to sustain, would shake that firmness of mind, that great power of self-command, which perhaps forms the most inimitable part of his character; and what has he done, that you should subject him to this insupportable mortification, this agony of sympathizing wo?*
I do not mean by all this, to suggest that the simple humor or caprice of any individual, however dignified, ought to be the basis of any public measure, in which national interests are concerned; but where any man exists in a nation, whose long practice and example have demonstrated that all his powers are directed by wisdom, all his passions are controlled and governed by discretion, and every action excited and animated by virtue and patriotism, I say, to form public acts agreeable to the wishes of such a citizen, is paying court to virtue itself.
Whilst, at the same time, the government makes a very high compliment to the great body of the people, in supposing that their minds are all under the influence of a similar virtue and patriotism, and, of course, that it is highly proper to propose such an act to their approbation, on full presumption that a public act, dictated by the wishes of such an illustrious citizen, would certainly meet with a co-incidence of sentiment in the people at large, and, of course, must be equally grateful to their wishes also.
I do not offer this as an airy compliment to the citizens of the States; but I do most seriously believe, that the wishes of our august general, in the case before us, and those of the great body of our people, are the same, or at least, similar; the operations of the war being under the direction of the general, and the more important parts, both of action and events, happening under the inspection of his own eye, will doubtless excite in his mind more lively sentiments of many things and circumstances, than the people at large can have; yet I think the conduct of those worthy patriots who supported the war by their supplies and services, meets the approbation of the people in so universal a manner, that very few can be found, who would not sincerely join their august general, in wishes that they may be paid. This leads me to observe,
III. That the patriots who supported the war by their supplies and services, not only ought to be, but in fact can be,paid. Let their merits be ever so great, and our obligations to do them justice be ever so sacred, yet if our case was such that we could not pay them, no more need be said on the subject; but if we can pay them, and do not, one would think that heaven and earth would rise in their favor, and revenge their wrongs.
To prove that they can be paid, the following facts may, and doubtless will, be admitted to be true and convincing evidence.
1. That the country is rich enough to pay them: 2. That the people are generally convinced, that the debt demanded is justly due to their merits and earnings: 3. That they are willing to pay them: and, 4. That our government, or supreme council, is also willing to pay them, and vigorously to set on foot and pursue the ways and means proper to effect it.
1. That the country is rich enough to pay their deliverers, is too manifest to admit a doubt, or need any proof. It is easily demonstrated, that an additional impost on imported luxuries (such as spirits, wines, silks, jewellery, &c. &c.) but barely high enough to reduce the consumption down to that moderate degree, which is really necessary to the health, wealth, and morality of the inhabitants, would make our finances amply sufficient to pay every shilling we owe to these worthy citizens, and not this only, but also to discharge every other debt which either honor, justice, or gratitude demands of us.
2. That our people are generally convinced that the money demanded by these worthy citizens is justly due to them, is abundantly manifest from many considerations: 1st. They have discernment enough to know that a debt justly due will always be due until it is paid. That long delay of payment is no extinguishment of a debt. 2d. I believe their genius rises high enough to comprehend, that a debt of 20s. cannot be paid and satisfied by a payment of 2s. 6d. or, which amounts to the same thing, that the whole is greater than a part, or that 20 of any thing cannot be balanced or equalized by an eighth part of the same thing.
3. That our people at large are universally willing to pay these worthy citizens, is also very manifest.
1st. The habits of morality are strongly impressed on our people in general. The country is not old enough to establish vice, oppression, and injury, or to obliterate the natural index of right and wrong, in the human mind: in the old countries, the luxury of an individual may consume the labor of thousands; a nation may be taxed and oppressed to support the lust, pride, and haughty grandeur of a few; a court of inquisition may be instituted to force the mind, and infringe the rights of conscience, and the people will bear it; but with us it is otherwise.
In America, oppressors have not lost their shame, nor the oppressed their resentment, nor the people their natural sense of good and evil; when these worthy citizens exhibit their merits and services, show their wounds, and plead their constitutions and fortunes broken in the cause of their country, and cry for their pay, the general mind is instantly affected, a sense of both justice and compassion is strongly excited, and the universal wish and murmur is, ‘let right be done,’ and, ‘why has it been so long neglected and delayed?’
2d. For the truth of the fact, I appeal to every man in the States, whether, within the circle of his acquaintance, there does not prevail a general pity for the soldiers and other liberal supporters of the war; a decided opinion and high sense that they have been injured and ill used; and a strong and sincere wish that they may be paid: as far as my acquaintance with my countrymen extends, this wish is almost universal, and if any exception can be found, I conceive it must be among two classes of people. 1. The present holders of alienated certificates, some of whom, I suppose, wish to grab and secure to themselves, the rewards due to the merits and services of these worthy patriots. 2. The other class are those who always abhorred both the war and Revolution, and are therefore well enough pleased to see all those who were concerned in promoting both the one and the other, most effectually mortified and disappointed. This leads us to consider,
4. The happy facility and ease with which our supreme council can adopt the measure of paying these worthy, injured citizens, and put into most effectual operation the ways and means necessary to accomplish it; nobody doubts that this is the ardent wish of their hearts, or that they will speedily adopt the favorite measure, and vigorously support and push it to its final effect, and thereby demonstrate to the world, how strongly they are animated and gratified with the pleasing task of repairing the wrongs of our injured citizens, and restoring the justice, honor, and dignity of our country.
By large and repeated trials of the temper of our people, we find that they will bear great pressures and burdens, and will freely devote their services and fortunes for what they deem to be the good of their country, for objects which fall in with their wishes, and meet their approbation; this temper will enable government to institute any proper modes of supply, for the payment of our worthy patriots, when that very payment is the favorite wish of the people who are to pay the tax which is collected for that purpose.
Two different bodies of claimants now present their demands on government; these worthy patriots are one of them; and the present holders of alienated certificates are the other; it will require equal sums of money to pay either of them; the only question is, which of them shall have it? but I conceive, that the difficulty of raising the money for the payment of each of these, will not be by any means equal, but extremely different.
This brings into view another consideration, which, in the present state of our finances, appears to me of great moment; our revenue system is young and tender, and it is of great importance to introduce the practice of it, and get it formed into a sort of habit in the States as soon as possible; and this may require delicate management; if taxes are called for in ways, and for purposes, which are generally approved, the collection may be made with little difficulty and few murmurs; but if immense sums of money are demanded in ways that are disgusting, and for purposes not generally approved, and perhaps abhorred, the difficulties of collection will be great, and the murmurs, infinite; this may bring embarrassments on the revenue, which we may long feel very sad effects of. To apply this to the case before us—
A large impost laid purposely for the payment of the real supporters of the war, will meet the approbation, and coincide with the wishes, of the great body of our people, and, of course, the collection will be made with ease and good humor; but let our people be told that this immense sum, which is levied for that favorite purpose, when carried into the treasury, is not to be given to those favorite patriots, but is to be grabbed up by another class of men who have no pretence to either service or merit, but claim only what is due to the merits and the services of the others, I conceive, in this case, that all good humor will take its flight in an instant, and murmurs plenty and sour enough will ensue.
What effect such general murmurs, complaints, and discontents may have on the revenue, may be easily foreseen, and I should be glad to know, that these mischiefs would end with the revenue, without extending farther to disturb and derange the general police of the nation; the least mischief which can be expected from this general dissatisfaction may be, that it will furnish a plausible excuse or plea for smugglers and those who wish to defraud the revenue, viz. that there cannot be much harm in eluding a tax which is levied for the very purpose of satisfying claims, which are, in their nature, wrongful, and not grounded on any such valuable considerations, as the laws of commutative justice make essentially necessary to the existence of any rightful transfer of property.
I imagine it would be pretty much in vain for government to attempt to compose all this confusion, and pacify the general ill humor, by holding out an old law of trade, or mercantile rule (good enough, indeed, within its proper limits) but which is racked and tortured far beyond the reach and influence of that reason, on which alone all its fitness and propriety ever did, and ever must, depend; and which is stretched to such a degree of extravagance, as no nation under heaven ever thought of adepting into practice; and which no man of common sense can ever reconcile to that natural sense of right, which exists in his own mind; I mean the old law or usage of assignments.
I do not recollect more than two instances which ever happened in Europe, of stock, bills, or certificates (for they are all different names for the same thing) of such magnitude as to affect national credit, the variations of exchange of which ever were so great as from par to 8 for 1; these two instances were, the Mississippi scheme in France, in 1719; and the South-Sea scheme in England, in 1721.*
These were both established and authenticated by acts of the supreme legislature; acted under the inspection and control of it; were the channels thro’ which the public monies were circulated; and the final accounts of both were settled and adjusted under the direction and authority of the same supreme power of the respective nations. These schemes were so extensive as to affect national interests; most of the monied men in both nations were deeply concerned in them, and when the enormous and ruinous effects of that great variation of exchange, which these stocks suffered, came to be be generally felt, applications without number were made to government for relief.
Very strong remonstrances were made against the interference of the legislature, and that the matter should be left to the course of common law, i. e. to be decided according to the common rule of assignments of all negotiable notes, bonds, &c. But on a close inspection of the matter, it was soon clearly seen, that the variation of exchange of these stocks (or their depreciation, as we call it) was so enormous and extreme, that any application of the ordinary rules of law and practice to them, would produce the most ruinous injustice and wrongs, and, of course, every idea of that mode of settlement and adjustment was instantly given up.
Their great principle was, that justice and right was the grand end of law, and paramount to any particular rules or established practice, and, of course, ought to control them in all cases of so extreme and extraordinary a kind, as could not fall within the reason on which those rules were founded, but so circumstanced, as that an application of these common rules would unavoidably produce such injury and wrong, as was totally destructive of all that right which was the essential principle and end of all law.
Upon full consideration of all this, by an act of sovevereignty they adopted the most equitable principles, which they could devise in those great confusions, which would apply to the particular cases that lay before them, and which would, in their operation, produce the most right and avoid all wrong, in the best manner they could think of.
The English House of Commons went so far as to suspend all judgments and executions recovered upon any contract, for sale or purchase of any stock or subscription, and also ordered that all persons, who had become indebted to the Company for South-Sea stock, &c. should, on payment of 10 per cent. be discharged from any farther demands. They made many other resolutions (which were afterwards made acts of parliament) totally repugnant to the common rules of law and practice, but absolutely necessary to be adopted in those extreme cases, to which these common rules could not be applied without the most manifest and ruinous wrongs and injustice; wrongs of such magnitude as to affect the trade and credit of the nation, as well as to bring remediless ruin on thousands of individuals, and, at the same time, heap immense fortunes on others who had never deserved them.
I know very well that great pains were taken in France, to throw much odium and blame on mr. Law, and to make him chargeable with the great and ruinous mischiefs of the Mississippi scheme; and the same industry was used in England, to cast blame on the directors of the South-Sea Company, and to father the pernicious consequences of that scheme on their corruption and mismanagement.
But tho’ it may be probable enough, that in schemes of that vast magnitude and national interest, faults in the management might be found, which are always made to rest on the prime movers and directors of them, yet the most capital and destructive mischiefs sprung from the nature of the schemes themselves, and would necessarily happen (tho’, perhaps, not in every possible excess and aggravation) if the same plans were to be set on foot a thousand times over.
But as these schemes were established under the sanction of the Legislature, in the fullest manner that could be devised, it was not quite decent to admit in the national assemblies, that their mischiefs flowed from their nature, but the blame must be thrown on somebody, as some stupid committees, in the late times, attributed the depreciation of the Continental money to the merchants.
This, to be sure, in England, was natural enough, where they adopt this principle, that when popular discontents rise very high, one man must die for the people, i. e. one or more victims must be sacrificed, like scape-goats, to appease the people, and thereby parry the reseniment due to the minister, or prince, or Parliament, or other principal, from whose folly or misconduct the mischief originally proceeded; witness, admiral Byng, and many others.
But let the mischief originate wherever it might, the grand object of attention was a remedy, and this, doubtless, engrossed and occupied the whole wisdom of the legislatures and the respective nations, at the time; for whilst their great interests, both national and individual, were rapidly melting down under the fatal influence of these destructive schemes, even supreme councils were willing to hearken to advice; and, therefore, we may well presume that we have an example of the most consummate national wisdom that could be collected, in the modes of remedy which they adopted.
Nor does any body suppose that one man in England expects that their national debt will ever be paid at par, tho’ the present discount or depreciation is but about 25 per cent.; or that more interest will be paid than the real value of these stocks or certificates require; the present interest paid on them being 3 or 3½ per cent. whilst the common interest of that country is 5 per cent.
I do not pretend to refer to any thing, which might be done in the old days of barbarity and ignorance; but I do not recollect having ever heard of one modern prince or State in Europe, who ever attempted to pay his soldiers or other public creditors, in certificates, or stocks, or negotiable securities of any sort; except when such payment made a part of the original contract, as the contracts for navy supplies are payable in navy bills, &c. All that I know, which is at all like it, is paying armies, &c. with base coin, which some princes have done; but this was a State-cheat universally detested; nor could all the authority of such prince ever give such base coin a currency beyond its real value; nor did I ever hear of much it being called in and redeemed at full nominal value.
This I take to be the practice of the nations of Europe, in cases familiar to the one I am pleading; and, I think, a very little diseretion on our part might induce us to imitate their prudence and virtue, profit by their example, and avoid their errors.
But it may, perhaps, be more important to our internal quiet, to advert to what has been the practice of our own States in similar cases; for any innovations, or departure from known usages and customs among ourselves, may give more dissatisfaction to our people, than any deviation from European practices, which, tho’ perhaps equally wise, yet are less known and considered among us, than our own.
The loan-office certificates issued by our own supreme council during the war, are all estimated by a scale, the principle of which is the value of them at the time of their dates; the value of our Continental and State money has been estimated by either the general scale of Congress, or that of particular States; this method was indeed neglected too long, but was at last fully adopted, upon the plainest reason and most urgent necessity; and when our Continental and State money depreciated down to nothing, it all died where it was; nobody ever thought of appreciating it again, by a redemption at its original value.
The Old Tenor and other bills which had a currency in many of the States long before the Revolution, were redeemed at their current exchange, without the least regard to their nominal value.
And can any possible reason be given, why we should adopt an innovation (proposed and urged by many) respecting the certificates in question, which is a total departure from the constant practice of all the States before, at, and since the Revolution, in all cases of similar reason; an innovation, which, by its natural and necessary operation, must and will not only produce immense and ruinous wrong to numberless individuals of most deserving citizens, but will also disgrace and disparage our public credit, honor, and dignity, and discourage the confidence of our own citizens and foreigners in our national justice and morality?
Indeed, the ordinary rules of law would do infinite mischief and injustice, were not the rigor of them to be softened and corrected by chancery; the powers of chancery ought always to control the common law, whenever, in any case, the application of the ordinary rules of law will manifestly destroy right and justice, or work a wrong; for law is certainly perverted and needs correction, whenever it destroys right, or does wrong.
The supreme power of every State is the supreme chancery of it, and always hath, and must have, sovereign authority to repeal, to limit, or control every rule of law; and may, and ought to, do it, whenever that rule operates by way of destruction or defalcation of right, or producing of wrong, for justice and security of right can never be perfict, or even tolerable, in any State, without the existence of this power, and the prudent exercise of it.
When all the foregoing reasons, the practice of all our own particular States, and also, that of our own supreme council, as well as that of all the States of Europe, in similar cases, as far as their practice is known to us; I say, when all these things are duly considered, I think my great conclusion will be admitted very readily, viz.
That our most deserving and patriotic citizens (whose cause I have been advocating) must be paid; that the wishes of our own citizens require it; that our character of honor and justice, both at home and abroad, requires it; and that we shall be deemed by the nations of Europe, the veriest novices in policy and finance, as well as knaves in practice, if we do not do it.
I will subjoin one short observation here, because I think it of great importance, viz. it is the great interest, duty, and honor of every government, not only to pay their contracts honestly and in good season, but also to grant proper compensations to all their citizens, who, by patriotic exertions, deserve the notice and rewards of their country; this will enable government at all times to command every possible exertion of their people, either in the way of services or supplies, and will induce them to hasten with cheerfulness and pride, to offer to government any thing they have or can produce, which the public service stands in need of.
Whereas, if these noble spirits find themselves neglected and forgotten, and that in their country’s service they have labored in vain, and spent their strength for nought, their zeal for the public service will become very languid, and not only so, but the example of their disappointment will operate by way of great discouragement of their neighbours. Nothing animates and keeps up the spirit and good-humor of a nation so effectually, as a full confidence in the justice and gratitude of its government; and this is the deepest and firmest foundation on which the wealth, the peace, the honor, and the establishment of a nation can be built.
For this great purpose, excessive and extravagant allowances are by no means necessary, but are even criminal, when the finances are low and straitened, for we ought, at least, to be just before we are generous; the honor of the service and the acceptance of government, are the grand inducements to noble, patriotic actions; and moderate compensations, adequate to the services and merits, will be perfectly satisfactory; more than enough need not be given to any one, for that will make it necessary to give less than enough to some other.
On the whole, raising the great sums of money necessary to satisfy all the real public creditors, will, under proper management, be no great burden to the States; the levying them as fast as the honor and justice of the States require, will not impoverish them. Large sums collected from the body of the nation, if they are paid out again and disiributed over the same nation, especially if the collection is principally made from the richer sort, and the payments made to the poorer sort (which will be the case, on the plan I propose) this tax, I say, will rather prove a benefit than a burden.
It will increase the circulation of cash; it will stimulate industry; it will enable thousands to pay their debts, who otherwise could not do it; and, of course, it will enable thousands to receive the debts due to them, who must otherwise lose them; it will enable very many poor to support themselves, who otherwise would be a burden on the public or private charity; it would tend to equalize the wealth of the community, by giving every one his due portion of it; and thereby prevent the riches of the country from aceumulating in few hands, &c, &c.*
These are no small advantages resulting from taxation; and, I think, their effects on the nation at large will compensate the burden of it, and probably yield a balance of advantage: especially if the tax should be levied by an impost on imported luxuries, and thereby lessen the consumption of useless and hurtful articles; which would operate to the benefit of the community, even if the money produced by the tax was all thrown into the sea.
This mode of taxation may easily be made adequate to all the exigencies of the State, and leave no occasion of reverting to either an excise or direct taxation, both of which will be much more difficult in their assessment, more expensive in the collection, more disgusting in the mode of demand, more burdensome to the subject, less equable in pressure, and much more uncertain in the product.
I now, with the utmost confidence, submit it to the heart, to the feelings, and to the conscience, of every citizen of the States, that I have exhibited proofs, not barely sufficient for full conviction, but so plain, that any person must put violence on himself, who will not be convinced,
I. That the real public creditors, whose cause I am pleading, have not yet been paid; this is as plain as that 20s. is more than 2s. 6d.
II. That they ought to be paid, with the first monies we can get; this is as plain as that “the laborer is worthy of his hire,” or, that contracts made on valuable consideration given, ought to be fulfilled.
III. That I have exhibited such a statement of our finances or resources of supply, as demonstrates that they can be paid; that the payment of them would not be a burden or distress on the country, but rather a benefit, a manifest advantage, to our people at large: and,
IV. That from most essential considerations of public justice and honor, of national character, both abroad and at home, and of the internal peace and establishment of our nation, it follows most clearly, that they must be paid.
I do not know any thing farther necessary or that can be done, but to give this Essay some inscription, which may direct it to some particular attention; for that which is offered to the public at large, is generally considered as every body’s business, and so is apt to be in fact nobody’s, and, of course, becomes neglected.
As I mean, in this Essay, to plead the cause of national justice, I wish to address it to Congress, and beg the patronage of that august body;
Not merely because they are the fountain of national justice, and their decisions alone can administer the remedy which I solicit; but also,
Because many very respectable personages, who now compose that supreme council, were, during the war, either concerned in the most capital public transfactions in the cabinet, or were officers of most distinguished rank in the army; and therefore, by near inspection, were enabled to judge in the best manner, not only of the importance of the merits and services herein urged; but also of the spirit, fidelity, and patriotism, with which they were rendered to the public; and also,
Because I wish to set up the claim of these worthy, deserving patriots, along side of that of the present holders of certificates, who (I am told) have presented their petition to Congress, in which they count very largely on the merits, services, and sufferings of these worthy citizens, of which they exhibit pathetic and very moving descriptions, but after all, very modestly request, that the money due to these very meritorious citizens, may be paid to themselves.
I think, I can introduce my friends at least under the advantage of old acquaintances; whereas the others, I conceive, are mostly new faces.
I have great confidence, that my plea for citizens of such merit and respectability, will meet at least the attention, if not the approbation and patronage, of Congress.
But after all, if it should be the final determination (which I cannot suppose) that the certificates shall be considered as full payment to those who received them, and that nothing is now due to any but to the possessors of those certificates, I have one more motion to make, viz. that the original holders of these certificates should be preferred and first paid, as claiming payment of debts of an higher nature, and grounded on greater merit, than the others can pretend to.*
I know that Congress, like all other similar bodies of supreme authority, must necessarily have a great variety of important, different, and sometimes, contending interests, referred to their decision; and, of course, the several parties will use all possible arts, address, and influence in their power, to bend the mind of that august body to their several wishes.
It is very difficult for any body of men, thus beset and surrounded (if they have any passions or prejudices at all) to pursue a course perfectly direct, and free from error; yet so very important and consequential is every decision they make, and every measure they adopt, that the fate of millions hangs on their lips, and the fortune of millions is balanced by the motion of their hands.
Therefore, under a due impression and sense of both the difficulty and importance of their stations, councils, and actions, all good men ought to be candid in their opinions, moderate in their censures, and very zealous and sincere in their prayers that Almighty God would, in all their difficult consultations, give them that wisdom which may direct and lead them to such decisions as may be conformable to natural right and justice, conduce to his glory, and establish the peace, happiness, security, and best good of our country.
[* ] When I wrote this I had no doubt but that, if such an assembly of fellow-laborers and fellow-sufferers had appcared, their general would have cheerfully put himself at their bead, and have supported their suit with all his power and influence.
It is also very manifest, that both they and their rights are all, at this time, in real existence and full life, tho’ not all met together in condition to assert and demand the justice which is due to them.
It is further certain, that the known rights of an absent man ought not to be neglected, because he is not present to assert them, or in condition to vindicate his demand; infants, and all other helpless persons, have rights which are ever recognised by the law of right, and ought ever to be supported by the government, to which the administration of that law of right is committed.
[* ] I apprehend that certificates should never be redeemed at a higher rate than their value or current exchange was at the time of issuing them; for the public never received a valuable consideration for any more than was paid; and to demand their redemption at a higher value would be charging the public with usurious interest, which would be as wrong between public, as between private, contractors.
It may be objected, perhaps, that the public do not literally receive 2s. 6d. and give their bond or certificate for 20s.: but I answer, they really do this; for it is very plain, that the certificate, when issued, was worth no more then its current exchange at that time, say 2s. 6d.: the public creditor received no more, and ought to be debited with no more; but the certificate is made payable to the bearer, who is a stranger, at 20s.
Now if I pay 2s. 6d. and, in consideration thereof, take a bond to a third person, who is a stranger, for 20s. it is plain that the bond is usurious and void, and if it passes by assignment thro’ a thousand hands, the usury will always stick to it, and, of course, it will ever carry with it its legal defect, or principle of avoidance.
For it is plain, that if a private man should receive 2s. 6d. and give his bond for 20s. the bond would be usurious, and of course void.
My proposition is plainly just, and acknowledged by Congress and every body else, and has the sanction of general practice with respect to loan-office certificates, Continental money, &c. and I challenge any man to give a shadow of reason, why all subsequent certificates, or paper of public credit, should not be estimated, and in every respect be governed, by the same rule.
But if the certificate depreciates below its original value, the aggregate public sustains the loss. This is manifestly the case with respect to all paper money, certificates, and other public securities of every kind, which gain a general currency, or become objects of common exchange and negotiation thro’ the community, and happen to depreciate during such currency.
The loss by depreciation becomes divided into innumerable parts, every single one of which consists of the loss each individual severally sustained by the depreciation of the paper, whilst it was in his hands, and the aggregate sum of all these parts or losses, makes up the whole sum of the depreciation, or the difference between the current value of the paper at the time, and the original value of it when it first issued.
By this it appears, that the aggregate public has sustained the whole loss, not in a way of perfect equality indeed (and perhaps no public assessment ever did or can do this) but by way of general tax, of which innumerable individuals (tho’ not strictly every one) has sustained or paid his share, and, of course, it would be very unjust to tax the same public over again for such sum, not to pay it to the persons who have suffered by the depreciation, but to other people, who have lost nothing, nor have any claim of merit to it.
[* ] When this Essay was written, I had not the least idea that any possible consideration could have induced general Washington to sign any act, which, in its operation, would cut his soldiers out of their pay, and leave those without compensation, who, by their advance of money and supplies, had fed and furnished his army; nor do I apprehend, that when he signed the funding bill, he conceived these effects would follow its operation: but I see two ways only, in which these effects can be avoided:
One is by paying both original creditors and speculators; which, I suppose, will be considered either extremely difficult or desperate, for want of cash.
The other is by a repeal of the funding act, or, which amounts to the same thing, by an explanatory declaration that by public creditors, in the act, is meant the real, original creditors; and not the speculators.
But be this as it will, I conceived it impossible for the general to sign such an act, and, of course, thought it would be great cruelty, and even insult, to offer such an one to him.
[* ] In the original publication of this Essay, the following short account of the South-Sea scheme in England was inserted by way of preface, viz.
“TheSouth-Sea scheme in England affords us the only instance I ever heard of in that country, of any national stocks or funds, whose fluctuation or exchange ever varied, i. e. rose or fell, so much as from par to 8 for 1, or, vice versa, from 8 for 1 to par.
“National stocks or funds I call them, not because those stocks were properly public money, but because they were of such magnitude and extent as to affect the trade and credit of the nation, and were managed under the sanction and protection of national authority, and controlled by the inspection of Perliament.
“The South-Sea Company was incorporated by act of Parliament, in 1711, i. e. a great number of proprietors of navy bills, debentures, and other public securities, were incorporated into a Company, to which was given a great variety of duties on wines, tobacco, India goods, &c. to pay the annual interest due to them, amounting to above half a million sterling; and also, with this grant was joined a grant of a monopoly of the trade to Spanish South-America, grounded on the Assiento treaty, &c.
“This Company soon grew amazingly rich, had the King and most other capital personages for stock-holders, and, in 1718, his Mejisty himself was chosen their Governor; at which time, the Company was become the great favorite of the court and nation, and, in 1720, were in such good condition, that 100l. share of their stock was worth 130l. i. e. 30 per cent. above par.
“At this time, i. e. in 1720, the scheme of reducing all the public funds into one, for discharging the national debt (which, by the by, at that time was alarming enough) was set on foot.
“The South-Sea Company and Bank of England were competitors, and bid on one another for the privilege of taking in the national debts, and thereby increasing their capital stock and yearly fund. The offer of the Company to Parliament for this privilege, was above 7,000,000l. sterling, &c. which was more than the Bank would give, and, of course, was accepted and ratified by an act of Parliament.
“Having thus carried their point, the next thing was to go to work, and make the most of their privilege, which was generally thought so great, that their stocks rose from 130 to 330l. for a share of 100l. by the time their contract with Parliament was completed.
“The first thing they had to do, was to purchase in the public securities, which they were able to do on pretty favorable terms; for the Revolution, and the wars of King William and Queen Anne, had raised the national debt to about 40,000,000l. sterling (if I remember right) which was in those days thought a very alarming sum (tho’ the nation have learned better since) of course, the credit of the public debts was somewhat doubtful; and as the stock of the South-Sea Bank or Company was in the first credit, the proprietors of the public securities thought themselves happy to carry in and sell their public securities, on such terms as they and the Company could agree on. Above 26,000,000l. sterling was subscribed into the South-Sea stock, in this manner.
“In short, the Company opened their books and sold out stock to an immense amount, and to a profit from 300 to 1000 per cent. Their first subscription was for 1,000,000 at 300l. April 12, 1720; and the stock rose so fast, that on the 24th of August following, the books were opened for a subscription of 1,000,000 capital stock, at 1000l. for every 100l. capital stock, which was filled in three hours; such was the rage for that sort of speculating, at that time. And, what is more amazing, after the books were closed, in the afternoon of the same day, this same subscription was sold in Change-Alley at 30 or 40 per cent. advance.
“The cash and credits of the Company were vastly accumulated by this time; and as they lent millions on interest, and sold most of their stocks for about 1-5th cash in hand, the rest on credit at several future payments, the debts due to them were immense.
“When the bubble burst, as it did in less than six months after, and the stock the subscribers had purchased at 1000 per cent. was reduced down to about 150, and, of course, the loss of every such subscriber was 850l. out of every 1000l. subscribed; I say, when this happened, legal suits (of which very many were commenced) for these debts due to the Company, would have reduced most of the monied men in the kingdom to a state of remediless bankruptcy, and the Company must have lost most of their money in the bargain. The public creditors had lost most of their public securities, which they had subscribed into that fund. And infinite other mischiefs of a like nature must have accrued, of a kind most ruinous and wrong, and of an amount so great as to affect national interest, honor, and credit, and of such an extreme and extraordinary nature, that no ordinary rules of law could be applied in any such manner as to afford the least remedy, but would rather increase the evil, and give the wrong a kind of sanction of law.
“In this extreme case, the Parliament found themselves under an absolute necessity of assuming the powers of sovereign equity, and, as supreme chancellors of the kingdom, to supersede the ordinary rules of the law, control its force, soften its rigor, and adopt such equitable principles, as would afford some remedy of an evil, an injury, a wrong, of such magnitude, as brought the justice, credit, and safety of the nation into danger.
“On this principle they suspended law-suits; annulled special bails; discharged numberless debtors who owed for stock, on paying 10 per cent. of their debts; compelled compensations in favor of the sufferers; forced dividends and appropriations of the stock of the Company; and even punished many for mismanagement, who seemed to have conformed themselves to the letter of the law, &c. &c.
“Vide Tindal’s Continuation of Rapin, in the pages referred to in the index, under the words, South-Sea Trade and Company.”
[* ] It is here very worthy of notice, that these salutary effects will naturally and savely flow from myplan of paying the public monies to the real, original creditors, who are scattered over all the States; and payment to them will, of course, not only afford such relief as will be highly convenient to them and their neighbours, but will also produce such a brisk circulation of the money so paid, as will be greatly beneficial to the whole nation.
Not so, but in a manner widely different, will be the operation of the scheme of paying these monies to the speculators; about one-third of whom, I am told, are foreigners, who will carry their share of the money out of the country, never to return again; and the other two-thirds, if paid to the speculators here, will not probably produce any general increase of circulation of money, or other benefit to the public.
For money obtained by sudden acquirement, without industry, merit, or earnings, seldom proves any benefit either to the possessors or to the public, but generally produces luxury, vanity, pride, and hurtful, example of prodigality and waste, till the whole is expended, and then the poor objects and their families are left much more forlorn and distressed than they would probably have been, had the money never have come into their hands.
I think any body may observe the very different effects and operations of these two plans, and it appears to me, that little penetration will be necessary to discern that the gain lies on the side of godliness; and, of course, if we reject the right, with so many benefits annexed, and adopt the wrong, with such a train of mischiefs at the heels of it, however our integrity may be unimpeached, our wisdom will be doubted, and will appear to many people altogether inadiquate to the management of the finances of a nation.
[* ] Congress, in their last session, after long debate, rejected the whole plan of disorimination between the original creditors or holders of certificates, and the speculators or the holders of alienated certificates, and, without any distinction, admitted alike the claims of all the present possessors, and, by their funding act of August 4, 1790, funded all the certificates at full value, or 20s. in the pound, with interest payable quarterly on two-thirds of their amount, from the first day of January, 1791; and the other third, with interest to commence the first of the year 1801, or ten years from said January 1.
The certificates for interest, called indents, are excepted out of this provision, and are funded at an interest of 3 per cent. only.
By this act, an enormous sum of the public money is appropriated for the payment of speculators, who never earned it, nor pretend to hold out any sort of right to it, which is founded on their merits, or earnings, or valuable consideration paid, but claim it entirely in right of others, to whose merits and earnings the money was righteously due, and which they make title to merely by force of the common rule of assignments, which, it appears to me, cannot admit any reasonable application to this case.
Whether it is the design of Congress, by this statute, to cut the real, original creditors off from their pay of that part of the balances which they have never yet received (and which, I suppose, is yet justly due to them) I know not; but I take it, that this is the light in which it is generally understood.
If this is really the case (which I cannot yet believe) I have only to lament that all the arguments I have published, which appear to me to be very strong, clear, and conclusive, and all the concern I have felt for this great subject, are vain and fruitless, and I suppose I ought to set myself down as an idiot, stupid as a post, because I cannot perceive an iota of reason or justice in a measure, which appeared to Congress so clear and just, as to induce them to adopt it in a solemn, public act. or may I rather be indulged in the thought that a Prince, a Diet a Parliament, a Congress, an Assembly, however high in dignity, and however important to mankind their decisions are, may err, and, what is more, may, on revision, be convinced of their error, and—correct it?