Front Page Titles (by Subject) REPORT OF THE ARREARS OF INTEREST 1 - The Works, vol. 4 (Notes on Virginia II, Correspondence 1782-1786)
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REPORT OF THE ARREARS OF INTEREST 1 - Thomas Jefferson, The Works, vol. 4 (Notes on Virginia II, Correspondence 1782-1786) 
The Works of Thomas Jefferson, Federal Edition (New York and London, G.P. Putnam’s Sons, 1904-5). Vol. 4.
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REPORT OF THE ARREARS OF INTEREST1
[March 22, 1784]
The Grand Committee consisting of appointed to prepare and report to Congress the arrears of interest on the National debt, together with the interest and expences for the year 1784 from the first to the last day thereof inclusive and a requisition of Money on the States for discharging the same, have agreed to the following report.
Resolved that there will be wanting for arrears of interest, and for the interest & services of the present year 1784, from the first to the last day thereof inclusive, the following sums expressed in Dollars, tenths and hundredths of Dollars.
The Committee were apprized that the resolutions of Congress of Apr. the 18th. 1783. had recommended to the several states the raising an annual revenue by the establishment of certain imposts for the purpose of discharging the national debt, principal and interest. But it occurred to them that those recommendations were still before several of the legislatures; that however desirable a compliance therewith is for the preservation of our faith, & establishment of a National Credit, yet as time had already elapsed, and more must elapse before their final confirmation can be hoped at; after it shall be obtained time will also be requisite to advance the plan to the term of actual collection, good faith requires that in the mean while other measures should be resorted to for the purpose of discharging the growing interest.
In the statement of the interest due at the close of the year 1782, the Committee have supposed its amount lessened by 1,200,000 dollars required & apportioned by the resolutions of Congress of Sep. the 4th. and 10th. 1782, & appropriated to the sole purpose of paying the interest of the public debt. This requisition gave license to the states to apply so much as should be necessary of their respective quotas of it, to the payment of interest due on certificates issued from the loan office of their own states, & other liquidated debts of the United States contracted therein. Hence they suppose it has happened that the actual payment of these quotas have been uncommunicated to the office of finance for the United States. The Committee are of opinion that the states should be desired to communicate to the Superintendant of finance the payments they have made under this requisition, & where they have been incomplete to hasten their completion as the means still relied on by Congress for the discharge of that part of the interest of the public debt. And while on this subject they beg leave to add that from the representation to Congress by the Minister of France, referred to this Committee they learn that in some of the states a discrimination has taken place between the citizens of their own & subjects or citizens of other Countries, which was not authorized by the said resolution: they are of opinion that such states should be requested to revise & reform their proceedings herein; and to extend the benefits of this provision equally and impartially to all persons within it’s description.
Your Committee came then to consider in what way it would be best to call for the sums requisite for the services before stated. And they thought it their duty in the first place to enquire whether no surpluses might remain on former requisitions of Congress after effecting fully the purposes were effected to which they were originally appropriated; under an assurance that it would be both the duty and sense of Congress to apply such surpluses, in every instance, towards lessening the next requisitions on the states. They found in fact that such a surplus would remain on the requisition of Oct. 30. 1781, for eight millions of Dollars for the services of the ensuing year; and that this surplus would be great from the following circumstances. That requisition was estimated on supposition that the Continental army would be completed by the states to it’s full establishment, and that cloathing, subsistence & other necessaries for such an army must of course be provided. The states were far short of producing such an army. Hence the calls for money were proportionably abridged. It was estimated too on the further supposition that we might be disappointed in the endeavors we were then exerting to borrow money both at home & abroad, and of course that the whole must be supplied by taxes. Loans however were obtained and the surplus increased by this second cause. A third circumstance has further enlarged it. The payments on this requisition have been small & slow. Hence, instead of money, those who served & supplied the United States have received certificates only that money is due to them, and these debts have been transferred to the fund proposed to be raised by way of impost. So that tho’ the debts exist, they are removed from this to another fund. To know then the amount of this surplus, the Committee extended their enquiries to the sums actually received under this requisition, the purposes to which they have been applied, and the anticipations thereof still unsatisfied. They found that 1,486,511.71 only of the eight millions of Dollars had been received at the treasury at the close of the year 1783: that these had been applied to the services of the years 1782. & 1783: and that for other services of the same years debts were contracted to the amount of about one million of dollars more, which depend for their discharge on further receipts under this requisition. Your Committee then are of opinion that a surplus of 5,513,488.28 Dollars will remain of this requisition after answering all the demands which actually rose against it, which were not answered by other Means, nor transferred to other funds: and that this surplus ought to be applied so far as it will go, to the common purposes of the United States, so as to prevent new requisitions on them till the old shall have been exhausted, and to shew to those who may have paid their whole quota of any requisition that they will not be called on anew till all the other states shall in like manner have paid up their quotas.
Your Committee found also that there was a requisition of Congress of Oct. 16, 1782. for 2. Millions of Dollars for the Services of the year 1783, on which some small payments had been tendered, but that the Superintendant of finance had found it better to receive and credit them as part of the eight millions. They are accordingly comprehended in the sum before stated to have been paid in under that head.
Having thus stated the demands existing against the states, the Committee would have performed but half their duty had they passed over unnoticed their condition to pay them. Their abilities must be measured in weighing their burthens. Their creditors themselves will view them, just relieved from the ravages of predatory armies, returning from an attendance on camps to the culture of their fields, beginning to sow, but not having reaped, exhausted of necessaries & habitual comforts and therefore needing new supplies out of the first proceeds of their labour. Forbearance then, to a certain degree will suggest itself to them. Those entrusted with the dispensation of justice between them will suppose both parties desirous that their mutual situations should be considered & accommodated. Your Committee are of opinion that if the whole balances of the two requisitions of eight and of two millions should be rigorously called into payment within the course of the present year, a compliance with such call would produce much distress; and that some term short of this should be fixed on, within the reach of the least as well as of the most able states. They propose therefore that the states be required to furnish within the course of the present year such part of their deficiencies under the requisitions of 8 millions, as, with their payments to the close of the last year, will make up three fourths of their original quota thereof: and that these payments be appropriated to the services of the present year 1784, in conformity with the statement in the first part of this report, giving generally, where accommodation cannot be effected among the several objects, a preference according to the order in which they are arranged in the sd statement.
But while this proportion of the former deficiencies is of necessity called for under the pressure of demands which will admit neither denial nor delay, the Committee must acknowledge that even the punctual compliance expected from all the states will not effect completely all the purposes of their preceding statement. To accomplish these perfectly; to enable the federal administration to fulfil the whole of those just & desirable objects, they wish earnestly & warmly to encourage the abler states to go as far beyond this proposition as their happier situation will admit, under an assurance that their further contributions will be applied towards reducing the interest & principal of the public debt, & will be placed to their credit in the next requisitions, with interest thereon from the time of payment.
Individual states have at times thought it hard that while, in their own opinion, they were in advance for the United States on accounts existing & unsettled between them, they should yet be called on to furnish actual contributions of Money. Your The Committee observe in answer to this, first, that almost every state thinks itself in advance: and secondly that it has been the constant wish of Congress that these accounts should be settled, & the contributions of each be known & credited. They have accordingly put it in the power of the states to effect these settlements: and as a further encouragement to hasten this desirable work, the Committee are of opinion Congress should declare that so soon as these accounts shall be all settled, and it shall appear in favor of what states balances arise, such states shall have credit for the same in the requisitions next ensuing.
But it will be necessary also to remind the states that no materials have yet been furnished to enable Congress to adjust the ultimate ratio in which the expenditures of the late war shall be apportioned on the states. The Confederation directs that this shall be regulated by the value of the lands in the several states with the buildings & improvements thereon. Experiments made however since the date of that instrument for the purposes of ordinary taxation had induced doubts both as to the practicability of this rule of apportionment and of it’s equality apportionable. Yet Congress thought it their duty to give it fair trial, and recommended to the several states on the 17th of Feb. 1783. to furnish an account of their lands buildings & number of inhabitants, whereon they might proceed to estimate their respective quotas. But apprehending the incompetence of the rule would immediately shew itself, and desirous that no time should be unnecessarily lost, they followed it with another recommendation of the 18th. of Apr. 1783. to substitute in lieu of that article in the Confederation another which should make the number of inhabitants, under certain modifications, the measure of contribution for each state. Both these propositions are still under reference to the several legislatures; the latter accompanied by the earnest wishes & preference of Congress, under full conviction that it will be found in event the most as equal, the most more satisfactory, & most more easy of execution: the former only pressed if the other should be rejected. The Committee is informed that the states of Connecticut New Jersey, Pennsylvania & S. Carolina have acceded to the alteration proposed; but have no evidence that the other states have as yet decided thereon. As it is necessary that the one or the other measure should be immediately resorted to, they are of opinion it should be recommended to the legislatures which have not yet decided between them, to come to decision at their next meeting.
In order to present to the eye a general view of the several existing requisitions & of the payments made under them, the Committee has subjoined them in the form of a table, wherein the 1st. column enumerates the states: the 2d. the apportionment of the D1.200.000: the 3d. that of the 8. millions: the 4th. that of the 2. millions: the 5th. the sums paid by the several states in part of their respective quotas to the last day of the year 1783: and the 6th. the sums now required to made up three fourths of their respective quotas of the 8. millions expressd. in Dollrs. 10th. & 100th. of Doll.
It remained lastly to consider whether no facilities might be given to the paiment of these sums by the several states. The Committee observed that of the purposes for which money is wanting, about a moiety can be answered by nothing but money itself; but that the other moiety, consisting of interest on our domestic debt, may be effected by procuring a discount of the demand in the hands of the holder; an operation which will be shorter & less impoverishing to the state. And however, in times of greater plenty, the accuracy of fiscal administration might require all transactions to be in actual money, at the treasury itself; yet till our constituents shall have had some respite from their late difficulties, it behoves us to prefer their easement. The Committee are therefore of opinion that the several legislatures may be admitted so to model the collection of the sums now called for as that, the one half being paid in actual money, the other may be discharged by procuring discounts of interest with our domestic creditors; only taking care that the collection of money shall proceed at least in equal pace with the operations of discount. And to ascertain the evidence of discount which shall be receivable in lieu of money, the holders of loan office certificates shall be at liberty to carry them to the office from which they issued; and the holders of certificates of other liquidated debts of the United States, to carry the same to the loan office of that State wherein the debt was contracted and to have the interest due thereon settled & certified to the last day of the year 1783; for which interest the loan officer shall give a certificate in such form, and under such cautions & instructions as the Superintendant of finance shall transmit to him; which certificates of interest, being parted with by the holder of the principal, shall be deemed evidence that he has received satisfaction for the same, & therefore shall be receivable from the bearer, within the same State, in lieu of money in the proportion before stated. And where loan office certificates, issued after the 1st. day of Mar. 1778, shall be presented to the loan officer, they shall be reduced to their specie value according to the resolutions of Congress of June 28, 1780. that specie value expressed on some part of the certificate, & the interest thereon settled & certified as in other cases.
[1 ]There is no record of the appointment of this committee, which consisted of Jefferson, Foster, Partridge, Howell, Sherman, Beatty, Montgomery, Tilton, Chase, Spaight, and Read. The report was considered by Congress April 5, 12, 22, and 27, 1784; and, after material amendment, was adopted April 28, 1784. In the Jefferson MSS. (5th, II.) is a rough draft of this report, in Jefferson’s handwriting, and this fair copy, which was presented to Congress, is also written by him.