James Madison Part 5

CHAPTER X

THE FIRST CONGRESS

The confederate Congress, at its final session in 1788, had fixed the time for the election of President and Vice-President under the Const.i.tution, and the time and place for the meeting of the first Congress of the new government. The day appointed was the first Wednesday of the following March, and, as that date fell on the fourth of the month, a precedent was established which has ever since been observed in the installation of a new President. The place was not so easily determined. The choice lay between New York and Philadelphia, and the struggle was prolonged, not because the question of the temporary seat of government was of much moment, but because of the influence the decision might have upon the future settlement of the permanent place for the capital.

No quorum of the new Congress was present at New York on March 4, 1789, and neither house was organized until early in April. On the 23rd Was.h.i.+ngton arrived; and on the 30th he took the oath of office as first President of the United States, standing on the balcony of Federal Hall, at the corner of Wall and Broad streets, a site now occupied by another building used as the subtreasury. A week before, when the ceremonies proper for such an occasion were a subject of discussion in Congress, the question of fitting t.i.tles for the President and Vice-President came up for consideration. It was decided that when the President arrived the Vice-President should meet him at the door of the senate chamber, lead him to the chair, and then, in a formal address, inform him that the two houses were ready to witness the administration of the oath of office. "Upon this," says John Adams in a letter written three years afterward, "I arose in my place and asked the advice of the Senate, in what form I should address him, whether I should say 'Mr.

Was.h.i.+ngton,' 'Mr. President,' 'Sir,' 'May it please your Excellency,' or what else? I observed that it had been common while he commanded the army to call him 'His Excellency,' but I was free to own it would appear to me better to give him no t.i.tle but 'Sir,' or 'Mr. President,' than to put him on a level with a governor of Bermuda, or one of his own amba.s.sadors, or a governor of any one of our States."

Thereupon the question went to a conference committee of both houses, who reported that no other t.i.tle would be proper for either President or Vice-President, at any time, than those which were given by the Const.i.tution. To this report the Senate disagreed and appointed a new committee. This proposed that the President should be called "His Highness the President of the United States and Protector of their Liberties." When wise men are absurd they presume on their prerogative.

The Senate accepted the report, but the House had the good sense to reject it, consenting, however, to leave the question in abeyance. On these proceedings Mr. Madison thus commented in a letter to Jefferson:--

"My last inclosed copies of the President's inaugural speech, and the answer of the House of Representatives. I now add the answer of the Senate. It will not have escaped you that the former was addressed with a truly republican simplicity to George Was.h.i.+ngton, President of the United States. The latter follows the example, with the omission of the personal name, but without any other than the const.i.tutional t.i.tle. The proceeding on this point was, in the House of Representatives, spontaneous. The imitation by the Senate was extorted. The question became a serious one between the two houses. J. Adams espoused the cause of t.i.tles with great earnestness. His friend, R. H. Lee, although elected as a republican enemy to an aristocratic Const.i.tution, was a most zealous second. The projected t.i.tle was, His Highness the President of the United States and the Protector of their Liberties. Had the project succeeded, it would have subjected the President to a severe dilemma, and given a deep wound to our infant government."

Was.h.i.+ngton has sometimes been accused of wis.h.i.+ng for the t.i.tle of "His Highness," and of having suggested it. Had this been true, Madison would have been certain to know it, and he was quite incapable of a.s.serting in that case that such a t.i.tle would have been to the President "a severe dilemma." About Mr. Adams he was perhaps mistaken, as he might easily have been, since he was not a member of the Senate, and probably heard only a confused report of how the question was brought before that body. As Mr. Adams's letter, quoted just now, shows, he regarded the charge as a calumny and resented it. He gave them, according to his own statement, no other opinion than that he preferred "Sir," or "Mr. President," as a more proper address than "Excellency," a t.i.tle then, as now, pertaining to governors of States. He probably took no further part in the debate, but it is not impossible that he may in private have avowed a preference for some other and higher t.i.tle than either "Mr. President" or "Your Excellency." "For," he said in the explanatory letter to his friend, "I freely own that I think decent and moderate t.i.tles, as distinctions of offices, are not only harmless, but useful in society; and that in this country, where I know them to be prized by the people as well as their magistrates as highly as by any people or any magistrates in the world, I should think some distinction between the magistrates of the national government and those of the state governments proper." A distinction might be proper enough if there were to be any t.i.tles whatever; but certainly they were the wiser who preferred good homespun to threadbare old clothes. Had rags of that sort been made a legal uniform, it is almost appalling to reflect upon the absurdities to which the national fondness for t.i.tles would have carried us.

From March 4 to April 1, though the House of Representatives met daily, there were not members enough present to make a quorum. The first real business brought before the House, except that relating to its organization, was introduced by Madison, two days after the inauguration. It was a proposition to raise a revenue by duties on imports, and by a tonnage duty on all vessels, American and foreign, bringing goods, wares, or merchandise into the United States. The essential weakness of the late Confederacy was, first of all, to be remedied by uniform rules for the regulation of trade. Revenue must be provided for the support of government, and that in a way which should not be oppressive to the people. Commerce, Mr. Madison said, "ought to be as free as the policy of nations will admit," but government must be supported, and taxes the least burdensome and most easily collected are those derived from duties on imports. He agreed, however, as he said on the second day of the debate, with those who would so adjust the duties on foreign goods as to protect the "infant manufactories" of the country. With little interruption this subject was debated for the first six weeks of the opening session of the First Congress. No other could have been hit upon to test so thoroughly the strength of the new bond of union. It was to brush aside all those trade regulations in the several States which each had hitherto thought essential to its prosperity. Every interest in the country was to be considered, and their different, sometimes opposing, claims to be reconciled.

New England was sure that, should the tax on mola.s.ses be too high, the distilleries would be shut up, and a great New England industry destroyed. Nor would the injury stop there. The fisheries, as well as the distilleries, would be ruined. For three fifths of the fish put up for the West Indies could find no market anywhere else; and a market existed there only because mola.s.ses was taken in exchange. A prohibitory duty on that article, or a duty that should seriously interfere with its importation, would wellnigh destroy the fisheries. What then would become of the nursery of American seamen? With no seamen there would be no s.h.i.+pbuilding. What sadder picture than this of a New England without rum, without codfish, without seamen, and without s.h.i.+ps! One can easily conceive that even in that restrained and dignified First Congress there was no want of serious and alarmed expostulation, and even some threatening talk from such men as the tranquil Goodhue, the thoughtful and scholarly Ames, and the impulsive Gerry.

Then the South, for her part, was alarmed lest, among other things, too high a tonnage duty should leave her tobacco, her rice and indigo, rotting in the fields and warehouses for want of s.h.i.+ps to take them to market. She had no s.h.i.+ps of her own and could have none, and she invited the s.h.i.+ps of the rest of the world to come for her products and bring in return all she needed for her own consumption. The picture of the possible ruin of New England was as nothing to that of the Southern planter scanning the horizon with weary eyes in vain for the sight of a sail, while behind him was a dangerous crowd of hungry blacks with nothing to do. That desolation seemed complete to the southernmost States when it was also proposed to levy a tax of ten dollars upon every slave imported. In short, the whole subject bristled with difficulties.

The problem was nothing more nor less than how to tax everything, and at the same time convince everybody that the scheme was for the general good, while n.o.body's special interests were sacrificed. The "infant industries," to which Mr. Madison alluded, really received no special consideration in the final adjustment, and they were too feeble then even to cry for nursing. They have grown stronger since, though they are "infants" still; and they should never cease to be grateful to him who, however unwittingly, gave them a name to live by for a hundred years.

But the most remarkable part of the debate was that upon the proposition of Mr. Parker of Virginia to impose a duty upon the importation of slaves. Could the progress of events have been foreseen, that proposal might have been regarded as meant to protect an "infant industry" of the northernmost slave States. But the wildest imagination then could not conceive of the domestic slave trade of a few years later, when a chief source of the prosperity of Virginia would be her perennial crop of young men and women to be s.h.i.+pped for New Orleans and a market. But Mr.

Parker had no ulterior motive when he avowed his regret that the Const.i.tution had failed to prohibit the importation of slaves from Africa, and hoped that the duty he proposed would prevent, in some degree, a traffic which he p.r.o.nounced "irrational and inhuman." It would have been difficult to have found a Virginian of that day who would not have taken down his shotgun on hearing that there were miscreants prowling about his kitchen doors in the hope of buying up the strongest young people of his household for export to the Southwest.

Judging from the imperfect report of the debate upon the subject, it would seem that the bargain relative to the slave trade, made in the Const.i.tutional Convention of two years before between New England and the two southernmost States, might still hold good. Or there may have been a new bargain; or, perhaps, both sides trusted to a tacit recognition of the eternal fitness of things, and made common cause where legislation threatened at the same time the distillery and the slave-s.h.i.+p.[11] At any rate, the extreme Southerners expressed surprise at the audacity which would disturb a compromise of the Const.i.tution; the extreme Northerners deprecated it as quite uncalled for in any consideration of the subject of revenue. The principle of Mr. Parker's motion, Mr. Sherman of Connecticut thought, was to correct a moral evil; the principle of the bill before the House was to raise a revenue. At some other time he would be willing to consider the question of taxing the importation of negroes on the ground of humanity and policy; but it was a sufficient reason with him for not admitting it as an object of revenue that the burden would fall upon two States only. Fisher Ames of Ma.s.sachusetts could only take counsel of his conscience. From his soul, he said, he detested slavery; and--forgetting, apparently, that this tax was provided for by the Const.i.tution--he doubted whether imposing it "would not have the appearance of authorizing the practice" of trading in slaves. This was his reason for wis.h.i.+ng to postpone the subject. But Mr. Livermore of New Hamps.h.i.+re was more ingenious still. If the imported negroes were goods, wares, or merchandise, they would come within the t.i.tle of the bill, and be taxed under the general rule of five per centum, which would be about the same rate as ten dollars a head; but if they were not goods, wares, or merchandise, then such importation could not properly be included in the consideration of the question of a revenue from duties on such articles of trade.

Mr. Madison came to the help of his colleague, and brushed aside the sophistries of the New England allies of the slave traders. If there were anything wanting in the t.i.tle of the bill to cover this particular duty, it was easy to add it. If the question was not one of taxation because it was one of humanity, it would be quite as difficult to deal with it under any other bill for levying a duty as under this. If the tax seemed unjust because it bore heavily upon a single cla.s.s, that would be a good reason for remitting many taxes which there was no hesitation in imposing. If ten dollars seemed a heavy duty, a little calculation would show that it was only about the proposed _ad valorem_ duty of five per centum on most other importations. "It is to be hoped," he added, "that by expressing a national disapprobation of this trade we may destroy it, and save ourselves from reproaches, and our posterity the imbecility ever attendant on a country filled with slaves." "If there is any one point," he continued, "in which it is clearly the policy of this nation, so far as we const.i.tutionally can, to vary the practice obtaining under some of the state governments, it is this.... It is as much the interest of Georgia and South Carolina as of any in the Union. Every addition they receive to their number of slaves tends to weaken and render them less capable of self-defense.... It is a necessary duty of the general government to protect every part of the empire against danger, as well internal as external. Everything, therefore, which tends to increase this danger, though it may be a local affair, yet, if it involves national expense or safety, becomes of concern to every part of the Union, and is a proper subject for the consideration of those charged with the general administration of the government." No Northern man, except Elbridge Gerry of Ma.s.sachusetts, supported this measure; and none from the Southern States, except three of the Virginia members, with Madison leading. As the foreign slave trade was protected in the Const.i.tution for twenty years by a bargain between the two southernmost States and New England, so now the same influence staved off the imposition of the tax which was a part of the consideration to be given for that const.i.tutional protection of the trade. It is not a creditable fact; but it is, nevertheless, a fact and a representative one in the history of the United States. And it is to Madison's great honor that he had neither part nor lot in it.

After six weeks of earnest debate, an amicable and satisfactory agreement was made to impose a moderate duty upon pretty much everything imported, except slaves from Africa. It was literally a tariff for revenue; but it was a settlement that settled nothing definitely, except that the provision of the Const.i.tution for a tax of ten dollars on imported slaves should be a dead letter. Thenceforth the policy of free trade was established, so far as African slaves were concerned, till the traffic was supposed to cease by const.i.tutional limitation and Act of Congress in 1808.[12]

The determination to protect the commercial interests of the country, beyond the point of mere revenue, was more manifest in fixing the rate of duty upon tonnage than in duties upon importations. It was generally agreed, after much debate, that American commerce had better be in American hands, and a difference of twenty cents a ton was made between the tax upon domestic and that upon foreign s.h.i.+ps, as a measure of protection to American s.h.i.+pping. Mr. Madison proposed to make it still larger, but the House would only agree to increase it to forty cents on s.h.i.+ps belonging to powers with which the United States had no treaties.

The Senate, however, refused to admit this distinction, and insisted that all foreign s.h.i.+ps should be subject to the same tonnage duty without regard to existing treaties. The House a.s.sented, lest the bill should be lost altogether. This proposed differential duty on foreign vessels was as clearly aimed at Great Britain as if that power had been named in the bill. Nor, indeed, was there any attempt at concealment; for it was openly avowed that America had no formidable rival except the English, who already largely controlled the commerce of the United States. In the debates and in the final decision of the question is shown clearly enough the difference of opinion and of feeling, which soon made the dividing line between the two great parties of the first quarter of a century under the Const.i.tution. n.o.body then foresaw how bitter that difference of party was to be, nor what disastrous consequences would follow it.

Mr. Madison was among the most zealous of those who insisted upon a discrimination against Great Britain. He thought it should be made for the dignity no less than for the interest of the United States. He had no fear, he said, "of entering into a commercial warfare with that nation." England, he believed, could do this country no harm by any peaceful reprisals she could devise. She supplied the United States with no article either of necessity or of luxury that the people of the United States could not manufacture for themselves. He called those "Anglicists" who did not agree with him, and who believed that it was in the power of Great Britain to hinder or to help immensely the prosperity of the United States. It was not of so much moment what America bought of England as it was that England should consent to free trade with her colonies; and on every account it was wiser to conciliate than to defy Great Britain; wiser to induce her to enter into a friendly commercial alliance than to provoke her to retaliate upon the feeble commerce of this country, upon which she had so strong a grip. Madison had shown himself, before this time, half credulous of the charges of a leaning toward England, and toward monarchy, made by those who wanted a congress of petty states against those who wanted a strong national government.

If, however, there were Anglicism on one side, so there was quite as much Gallicism, if not a good deal more, on the other. In writing to Jefferson of the probability that the Senate would make no discrimination in the tonnage duties, he said that in that case "Great Britain will be quieted in the enjoyment of our trade as she may please to regulate it, and France discouraged from her efforts at a compet.i.tion which it is not less our interest than hers to promote." Whatever may be thought of this first concession of the new government to England, it is quite as much the coming party leader as the statesman who speaks here.

It may not be doubted that he sincerely thought it to be, as he said, "impolitic, in every view that can be taken of the subject, to put Great Britain at once on the footing of the most favored nation." But the relation of American interests to English interests was evidently already a.s.sociated in his mind with the relations of France and England, so soon to be the absorbing question in American politics.

The impost act was followed by others hardly less important in putting the new Const.i.tution into operation under its first Congress. The direction of business seems, by common consent, to have been intrusted to Mr. Madison among the many able men of that body; doubtless because of his thorough familiarity with the Const.i.tution, and of his methodical ways. He was sure to bring things forward in their due order, to provide judiciously for the more immediate needs. The impost bill secured the means to work with; the next necessity was to organize the machinery to do the work. Resolutions to create the executive departments of Foreign Affairs, of the Treasury, and of War were offered by Mr. Madison. These were required in general terms by the Const.i.tution, with a single officer at the head of each, to be appointed by the President "by and with the advice and consent of the Senate." The manner of the appointment of subordinate officers was provided for by the Const.i.tution, but the manner of their removal from office was not.

Was the tenure of office to be good behavior? Were the inc.u.mbents removable, with or without cause? If the power of removal existed, did it vest in the power that appointed, that is, in the President and Senate conjointly, or in the President alone?

As the Const.i.tution was silent, the question had to be settled on its own merits. With all the arguments that could be urged, either on one side or the other, we are familiar enough in our time, coming up as the question so often does in changes in state const.i.tutions and munic.i.p.al charters, and in the discussion of the necessity for civil service reform. There is this essential difference, however, between now and then: we know the mischiefs that come from the power of official removal, which were then only dimly apprehended. The power of removal from office belonged, Mr. Madison believed, rightfully to the chief magistrate, and, if by some unhappy chance the wrong man should find his way to that position and abuse the power intrusted to him, "the wanton removal of meritorious officers would," he said, "subject the President to impeachment and removal from his own high trust."

Lofty political principles like these may still be found in the platforms of modern political parties,--

"The souls of them fumed-forth, the hearts of them torn-out."

But Mr. Madison believed, at least, that he believed in them. There is in politics as in religion an accepted doctrine of justification by faith; and this, perhaps, sustained him when, twelve years later, as Jefferson's secretary of state, he learned from his chief that, as "Federalists seldom died and never resigned," party necessities must find a way of supplementing the law of nature. Jefferson was a little timid in applying the remedy, but Madison lived long enough to see Jackson boldly remove, in the course of his administration, about two thousand office-holders, whose places he wanted as rewards for his own political followers. From that time to this, there has not been a President who might not, if Madison's doctrine was sound, have been impeached for a "wanton" abuse of power.

Though the Const.i.tution had been adopted by the States, it was not without objections by some of them. To meet these objections Mr. Madison proposed twelve amendments declaratory of certain fundamental popular rights, which, it was thought by many persons, were not sufficiently guarded by the original articles. This, also, was left to him to do, no doubt because of his thorough knowledge of the Const.i.tution and of the points wherein it was still imperfect, as well as those wherein it had better not be meddled with. The amendments, as finally agreed to after long debate, were essentially those which he proposed, and in due time ten of them were ratified by the States. The two that were not accepted referred only to the number of representatives in the House, and to the pay of members of Congress.

It was hoped that the selection of a place for the permanent seat of government would be made by this Congress. There was much talk of the centres of wealth, of territory, and of population then, and of where such centres might be in the future. But the question was really a sectional one. The Northern members were accused of having made a bargain out of doors with the members of the Middle States. The bargain, however, was only this: that, inasmuch as it was hopeless that the actual centre should be chosen as the site for a capital city, a place as near as possible to it should be insisted upon. The South, on the other hand, determined that the seat of government should be within the boundaries of the Southern States. That was a foregone conclusion with them, that needed no bargain. The nearest navigable river to the centre of population was the Delaware; but the jealousy of New York stood in the way of any selection that favored Philadelphia. The Susquehanna was proposed. It empties into Chesapeake Bay. North of it was, as Mr.

Sherman showed, a population of 1,400,000; and south of it, 1,200,000.

The South wanted the capital on the Potomac, not because it was the centre of population then, but because it might be at some future time, from the growth of the West. On the other hand, it was insisted that the population south of the Potomac was then only 960,000, while north of it there were 1,680,000 people, and that it was no more accessible from the West than the Susquehanna was. To many members, moreover, this talk of the great future of the West seemed hardly worthy of consideration. It was "an unmeasurable wilderness," and "when it would be settled was past calculation," Fisher Ames said. "It was," he added, "perfectly romantic to make this decision depend upon that circ.u.mstance. Probably it will be near a century before these people will be considerable." He was nearer right when he said in the same speech "that trade and manufactures will acc.u.mulate people in the Eastern States in proportion of five to three, compared with the Southern. The disproportion will, doubtless, continue to be much greater than I have calculated. It is actually greater at present, for the climate and negro slavery are acknowledged to be unfavorable to population, so that husbandry as well as commerce and manufactures will give more people in the Eastern than in the Southern States." It was, however, finally resolved by the House "that the permanent seat of the government of the United States ought to be at some convenient place on the banks of the river Susquehanna in the State of Pennsylvania;" and a bill accordingly was sent to the Senate.

Had the Senate agreed to this bill, there are some luminous pages of American history that would never have been written; for the progress of events would have taken quite another direction had the influences surrounding the national capital for the first half of this century been Northern instead of Southern. But the Senate did not agree. For "the convenient place on the banks of the Susquehanna" it subst.i.tuted ten miles square on the river Delaware, beginning one mile from Philadelphia and including the village of Germantown. To this amendment the House agreed, and there, but for Madison, the matter would have ended. He had labored earnestly for the site on the Potomac; but failing in that, he hoped to postpone the question till the next session of Congress, when the representatives from North Carolina would be present. He moved a proviso that the laws of Pennsylvania should remain in force within the district ceded by the State till Congress should otherwise provide by law. It seems to have been accepted without consideration, a single member only saying that he saw no necessity for it. At any rate, whether that was Mr. Madison's motive or not, time was gained, for it compelled the return of the bill to the Senate. This was on September 28, and the next day the session was closed by adjournment till the following January.

When in that next session the bill came back from the Senate to the House, a member from South Carolina said, in the course of debate, that "a Quaker State was a bad neighborhood for the South Carolinians." The Senate had also come to that conclusion, for the bill now proposed that the capital should be at Philadelphia for ten years only, and should then be removed to the banks of the Potomac. It was done, Madison wrote to Monroe, by a single vote, for two Southern senators voted against it.

But the two senators from North Carolina were now present, and the majority of one was made sure of somehow.

So much was gained by gaining time, and Madison thought the pa.s.sage of the bill through the House was possible, "but attended with great difficulties." Did he know how these difficulties were to be overcome?

"If the Potomac succeeds," he adds, "it will have resulted from a fortuitous coincidence of circ.u.mstances which might never happen again."

What the "fortuitous coincidence" was he does not explain; but the term was a felicitous euphuism to cover up what in the blunter political language of our time is called "log-rolling."

The reader of this series of biographies is already familiar with Hamilton's skillful barter of votes for the Potomac site of the capital in exchange for votes in favor of his scheme for the a.s.sumption of the state debts. Madison seems not to have been ignorant of the progress of that bargain, with which Jefferson was afterward so anxious to prove that he had nothing to do. Madison earnestly opposed the a.s.sumption of the state debts from first to last; but, when he saw that the measure was sure to pa.s.s the House, he wrote to Monroe: "I cannot deny that the crisis demands a spirit of accommodation to a certain extent. If the measure should be adopted, I shall wish it to be considered as an unavoidable evil, and _possibly_ not the worst side of the dilemma." In other words, he was willing to a.s.sent silently to what he believed to be a great injustice to several of the States, provided that the bargain should be a gain to his own State. If Hamilton and Jefferson were sinners in this business, Madison will hardly pa.s.s for a saint.

FOOTNOTES:

[Footnote 11: Eleven years afterward, when the question of prohibiting the carrying on the slave trade from American ports came up, one John Brown of Rhode Island said in Congress, "Our distilleries and manufactories were all lying idle for want of an extended commerce. He had been well informed that on those coasts [African] New England rum was much preferred to the best Jamaica spirits, and would fetch a better price. Why should it not be sent there, and a profitable return be made?

Why should a heavy fine and imprisonment [of slave traders] be made the penalty for carrying on a trade so advantageous?" Sixty years later still, there was another Brown in Providence, Rhode Island, who was a member of the Committee of the Kansas Aid Society of New England. He was about to withdraw from it for want of time to attend to its duties,--had, indeed, actually sent in his resignation,--when news came of the doings of another John Brown at Harper's Ferry. The resignation was instantly recalled, with the remark that it was not a time for Browns to seem to be backward on the question of slavery. Such is the irony of coincidence in names.]

[Footnote 12: The subsequent legislation on this subject is a curious exemplification of the ingenuity with which any law obnoxious to the owners of slaves was got rid of, when it was clear that it could not be defeated by force of numbers. In 1806 a final attempt was made to impose the duty of ten dollars upon slaves imported, and a resolution pa.s.sed in favor of it. This was referred to a committee, with instructions to bring in a bill. A bill was reported and pushed so far as a third reading, when it was recommitted, which put it off for a year. When it next appeared it was a bill for the prohibition of the importation of slaves, in accordance with the const.i.tutional provision that the traffic should cease in 1808. The new question, after some debate, in which there was no allusion to the tax, was postponed for further consideration. But it never again came before the House. A month later, February 13, 1807, a bill from the Senate, providing that the foreign slave trade should cease on the first day of the following January, was received and immediately concurred in, and that seems to have been silently accepted as disposing of the whole subject. No tax was ever paid; but the importation of slaves, notwithstanding the law to put an end to importation in 1808, continued at the rate, it was estimated, of about fifteen thousand a year. Probably it never ceased altogether till the beginning of the rebellion of 1860.]

CHAPTER XI

NATIONAL FINANCES--SLAVERY

Hamilton's famous report to the First Congress, as secretary of the treasury, was made at the second session in January, 1790. Near the close of the previous session a pet.i.tion asking for some settlement of the public debt was received and referred to a committee of which Madison was chairman. The committee reported in favor of the pet.i.tion, and the House accordingly called upon the secretary to prepare a plan "for the support of the public credit."

So far as Hamilton's funding scheme provided for that portion of the debt due to foreigners, it was accepted without demur. There could be no doubt that there the ostensible creditor was the real creditor, who should be paid in full. The report a.s.sumed that this was equally true of the domestic debt. A citizen holding a certificate of the indebtedness of the government, no matter how he came by it, nor at what price, was ent.i.tled to payment at its face value. But here the question was raised, Was this ostensible creditor the sole creditor? Was he, whose necessities had compelled him to part with the government's note of hand at a large discount when full payment was impossible, to receive nothing now when at last government was able to pay in full? Was it equity to let all the loss fall upon the original creditor, and all the gain go to him who had lost nothing originally, and had only a.s.sumed at small cost the risk of a profitable speculation? Moreover it was charged, and not denied, that in some of these speculations there had been no risk whatever; and that, so soon as the tenor of the report was known, fast-sailing vessels were dispatched from New York to the Carolinas and Georgia to buy up public securities held by persons ignorant of their recent rapid rise in value. As. .h.i.therto they had been worth only about fifteen cents on the dollar; as upon the publication of the secretary's report they had risen to fifty cents on the dollar; and as, if the secretary's advice should be taken, they would rise to a hundred cents on the dollar,--it would be securing what in the slang of the modern stock exchange is called "a good thing" to send agents into the rural districts in advance of the news to buy up government paper.

"My soul rises indignant," exclaimed a member, "at the avaricious and moral turpitude which so vile a conduct displays." Nor on that point did anybody venture then to disagree with him openly.

But, besides the question as to who were in reality the public creditors, a doubt was also raised whether the debt ought to be paid in full to anybody. Every dollar of the foreign debt was for an actual dollar borrowed. But the domestic debt was not incurred to any large amount for money borrowed, but in payment for services, or for provisions and goods purchased, for which double, or more than double, prices had been exacted by those who exchanged them for government paper. If the exigencies of war had compelled the government to promise to pay for fifty bushels of wheat the price of a hundred bushels, the creditor, now that the government was in a condition to redeem its promise, was not ent.i.tled in equity to receive more than the actual value of the fifty bushels at the time of the purchase. Moreover, it was contended, there was no injustice in such a settlement of the debt, for the war had been carried on and brought to a successful end, for the benefit of the creditor as well as of everybody else. The argument was a.n.a.logous in a measure to that used by a certain cla.s.s of politicians in our time, who maintained that the bonds of the United States, bought at a discount for "greenbacks" during the late rebellion, should not be redeemed in gold when the war was over.

The answer to all this was obvious. The nation must first be just by paying its debts to those who could present the evidence that they were its creditors. If, when that was done, it could afford to be generous, it might, if so disposed, reimburse those who had lost by parting with the certificates of debt at a discount. The government could not in honor go behind its own contracts. The Const.i.tution provided that "all debts and engagements, entered into before the adoption of this Const.i.tution, shall be as valid against the United States under this Const.i.tution as under the Confederation." Here was a debt which the Confederation had contracted, and the federal government had no more right "to impair the obligation of contracts" for its own benefit than the separate States had; and that they were expressly forbidden by the Const.i.tution to do.

Madison listened quietly day after day to the long and earnest debates upon the subject, and then advanced an entirely new proposition. He agreed with one party in maintaining the inviolability of contracts. The Confederacy had incurred a debt to its own citizens which the new government had agreed to a.s.sume. But he also agreed with the other party that there was a question as to whom that debt was due. Were those who now held the certificates ent.i.tled to the payment of their face value, dollar for dollar, although the cost to them was only somewhere from fifteen to fifty cents on the dollar? It was true that the original contract was transferable, and these present creditors held the evidence of the transfer. But did that transfer ent.i.tle the holder to the full value without regard to the price paid for it? Was there not in equity a reserved right in the original holder, who, having given a full equivalent for the debt, had only parted with the evidence of it, under the compulsion of his own poverty, and the inability of the government at that time to meet its obligations? Was not this specially true in the case of the soldiers of the late war, to whose devotion and sacrifices the nation owed its existence?

Mr. Madison thought that an affirmative reply to the last two queries would present the true view of the case, and he proposed, therefore, to pay both cla.s.ses of creditors,--those who now held the evidence of indebtedness, acquired by purchase at no matter what price; and those who had parted with that evidence without receiving the amount which the government had promised to pay for services rendered. It was not, however, to be expected that the entire debt should be paid in full to both cla.s.ses. That was beyond the ability of the government. But it would be an equitable settlement, he contended, to pay the present holders the highest price the certificates had ever reached, and to award the remainder to those who were the original creditors.