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JANUARY, 1804.
State Balances.

H. OFR. I adduce these facts to show in what light Con- just ? No, sir, nor would any documents which gress viewed this subject at the time when the can be produced of the services rendered by that Commissioners made their report. I presume the State go to prove the fact without contrasting National Legislature at that time, though less in them with the services rendered by the other number, were as competent to judge of the jus- States in the Union; and gentlemen very well tice of the settlement as this House now is, though know that this cannot be done without a revision more numerous.

of all the documents of the services rendered and But gentlemen in favor of extinguishing the supplies furnished by each State in the Union balances, say the debtor States will not pay; and during the whole of the war. Will Congress unif they would, that there is no way pointed out dertake to do this? If they will not, the docufor them to do it. If they will turn io the act of ments which the gentleman has reserred to must Congress passed February 15, 1799, they will go for nothing. In fact, sir, they prove nothing there find that there is a way provided by law for relative to the question under consideration. Sevthese balances to be paid.

eral other gentlemen have expatiated on the serI am opposed to ihe resolution to extinguish, vices rendered by the debtor States to prove that because it tends to weaken and destroy the confi- the settlement was unjust; and, sir, I might with dence of the citizens of the United States in their as much propriety go into a detail of the services Government, for the hand that would blot out the rendered by the State which I have the honor in balances due from the debtor States has the same part to represent on this floor to prove the reverse; power to wipe off the whole debt funded in favor but this might also be considered irrelative to the of the creditor States; the principle is the same, question before you. Yet, as gentlemen have for if the report be unjust as to the debtors, it is taken this ground, in justice to Massachusetts I so as to the creditors,

shall be permitted generally to say that she was But the gentlemen ask, what advantage is there second to no State in the Union in point of exerin holding those balances hanging over their tion for the general defence during the whole of heads? I answer, I consider them as a security the war. Her exertions in furnishing men and for the payment of the debt already funded. Be- supplies were general, uniform, and githout a lieving as I do that the settlement made by the parallel. History does not in my opinion, since Commissioners between the United States is as the first formation of civil government, give you just as the nature of the case and the difficulties an instance of any people ever having paid, acattending it would admit of, I hope the resolution cording to their numbers and wealth, in the same on your table will not prevail.

length of time, so great an amount in specie value Mr. VARNUM.—The resolution under consider- as was paid by the way of direct taxes by the peoation is for the extinguishment of the balances ple of Massachusetts in the ten years the next due from several of the individual States to the subsequent to the year 1777. At the close of the United States, as appears by a report of Commis- war, towns and individuals were deeply involved . sioners appointed to adjust and finally to settle the in debt, which had grown out of their exertions to demands of the several States for services ren- furnish supplies for your armies, and to hire soldered and supplies furnished the United States in diers to fight the battles of the country, at a time the late Revolutionary war with Great Britain. when the credit of the nation could not produce This report was made on the 5th day of Decem- them. The pressure of those debts, and the exber, 1793. The whole amount of ihe balances orbitant taxes which had been unavoidably imdue from the debtor States, and which is now pro- posed by the State, drove the people into an insurposed to be extinguished, is $3,517,582. This rection, which, for a considerable time, assumed resolution is supported on the ground that the set- an aspect which threatened the destruction of all tlement was unjust, and consequently that the the fair prospects which had been acquired by the balances found by it were improper and not due; Revolution; but, thanks to Heaven, this insurrecand in fact, sir, I cannot conceive of any other tion happily subsided. But notwithstanding all ground on which an extinguishment could be their exertions, the assumption of a part of the supported, for it is evident that the debtor States debt by the United States, and the payment of the are not deficient in ability to pay that which they balance found due on the settlement in stock of justly owe; and if not deficient in ability, surely the United States, yet, after all, the State was burno other consideration can be sufficient to exon- dened with an unwieldy debt, which grew entireerate them from the payment. No principle, ly out of the transactions of the war, and for the either political or moral, can justify an individual gradual extinguishment of which a heavy direct or a Siate in holding property justly due to an- | tax has from that period to the present time been other without the consent of the individual or annually imposed on the people, and must conState to whom it is due. In order to establish tinue for years to come before the debt can be enthe position that the settlement was unjust, the tirely extinguished. This being the case, while gentleman from Delaware (Mr. RODNEY) has some of the debtor States have glided easily along produced a document from the Comptroller of without the imposition of a direct tax to the that State to show that Delaware did comply with amount of a single cent for the discharge of the the requisitions of Congress for a part of the time expense of the war during the many years which in which the United States were engaged in the Massachusetts has labored under this pressure of war. And if it is granted that the statement is taxation, has induced gentlemen the best informed true, does that prove that the settlement was uns on the subject to doubt whether the services of

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H. of R.
State Balances.

JANUARY, 1804. that State had all been taken into the account; ing from the merit of any State to say, that the but, sir, although the settlement was supposed 10 exertions of some of the States exceeded those of bear hard on ihat State, the people were deter- others. It is weli known that in some of the mined to make the best of their situation, and not States many of the citizens were inimical to the complain of a settlement which was made under cause in which we were engaged, and did all in so much solemnity, and, as they conceived, with their power to assist the enemy in subduing our the most upright intentions, so far as the per- common country. This was a misfortune, alplexed state of the accounts would permit, to do though local in its operation, that was general in equal justice to all the States.

its effects, and it was generally lamented. Yet it The honorable SPEAKER, in order I presume did by no means detract from the merit of those to enforce on the minds of the gentlemen of this citizens who were friendly in the same States; House the injustice of the settlement, has stated but it goes to show that those States in which it that the Commissioner of the great middle de- happened did not, nor could not, do as much topartment has, since the report was made, stated wards the common cause as those who had nothon the floor of Congress • that those balances ing of the kind to impede their exertions; and, ought to be extinguished, and if it were not done, consequently, the improbability of the settlement that he would unfold a tale which would make being unjust as it relates to those States which the hair stand on end, or some strong expression stand the most indebted to the United States. of that kind.” The SPEAKER did not mention The ordinance wbich passed the old Congress the name of the Commissioner who he said had in 1787, authorizing the settlement of the accounts ultered this sentiment; but being so clearly desig- of the several States against the United States, for nated that every gentlemen present must know services rendered and supplies furnished during the the Commissioner alluded to, there can be no war, makes as ample and liberal provision for an harm in mentioning his name; I conceive it must allowance of all the accounts exbibited, as could be General Irwin. When I look at the report and possibly be expected, or even asked, by any of the find that General Irwin is the first Commissioner parties to the settlement: it was founded on the who siged, it is difficult for me to reconcile the principles of mutual compromise, and by the unanstatement of the honorable Speaker with this doc-imous consent of all the States. By the condiument; and when I recur to a more recent tran. tions of the settlement agreed upon by that ordisaction, I am confident there must have been some nance, the public faith of each State was solemnly misunderstanding in regard to the General's dec- pledged to all the other States, and the public faith laration, (for I am sure the honorable SPEAKER of the United States was solemnly pledged to each would noi intentionally misrepresent it.) General individual State, that the setilement, and proporIrwin did not only sign the report of the Commis- tion of the debt allotted to each Slate, by the Comsioners, but there is at this time a letter in the pos- missioners thus mutually agreed upon and chosen session of a gentleman of this House written by by all the States, should be final and conclusive. General Irwin since the commencement of the Soon after the establishment of the present Govpresent session of Congress, and to which his sig- ernment, in the year 1789, a law was passed by nature is subjoined, stating that all possible pains Congress for facilitating the settlement and for was taken by the Commissioners to do equal jus- filling vacancies in the board agreeable to the printice to all the States in that settlement.

ciples of the ordinance of 1787, and so far as I Now, sir, will this Committee conclude that have discovered by a recurrence to the Journals, General Irwin had, ten years ago, any frightful this law passed without any opposition. In 1790 tale, to develope which would evince the injus- Congress again assumed the consideration of the tice of this settlement? Or will they not rather subject, and passed a law which recognised all the conclude that his signature, subjoined to the report principles of the ordinance of 1787, and provided under the solemnity of an oath, (for all the offi-ihat a distribution of the whole expense should be cial transactions of the Commissioners were done made among the several States, according to the under that solemnity,) together with his state- first census under the present Constitution. This ment in the letter which I have mentioned, afford law was also passed by the almost unanimous consufficient evidence that he has always considered sent of the House, and in the Senate, where the the settlement a just one? Another objection to State sovereignties are more particularly reprethe justice of the settlement is, because the ex- sented, it appears by the journals to have passed pense of the war was not apportioned among the without opposition. Thus, sir, from the first agreeStates by the value of their lands, agreeably to an ment of 1787 to the final close of the settlement, article of the Confederation. It is an old adage all the States were unanimous in the mode prethat consent takes away error, and it is true that scribed for settlement, and stood most solemnly that mode of settlement was adopted by the unan- bound to each other to abide by it; and the public imous consent of all the States. When a recur-faith of the nation was, by the several acts of Conrence is had to the history of the whole transac- gress on the subject, most solemnly pledged to tion, I believe it will be found that this objection carry it into effect. has no weight. Sir, I am far from entertaining Can the Legislature then relinquish these bala wish in the least degree to depreciate the exer- lances, without a violation of plighied public faith? tions of any State in the Union in the Revolu. And yet will they undertake to do it? Sir, it is tionary war. I know they all made great exer- a fundamental principle in the governments of all tions.' Yet, sir, I presume it will not be derogat-civilized nations to pay the most sacred regard to

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JANUARY, 1804.

State Balances.

H. OF R.

plighted public faith. And, sir, the friends of our the creditor States are not transferable, so that Government have derived much consolation from Congress will have nothing to do to effect this the idea, that the United States would never suf- part of the business, but to order payment to the fer their national character to be stained by a vi- creditor States on those balances to be stopped. olation of this important national principle. Yet, And if this House shall consider the settlement so sir, from what has taken place, it has been believed, entirely unjust as has been stated by some gentlethat the United States would not be behind any men, and in consequence thereof give their vote. pation on the earth in the preservation of this pub- for the extinguishment of the balances due from lic virtue. But, if the resolution on the table should the debtor States, I cannot conceive why the same be passed into a law, this valuable principle will principle might not with the same propriety be receive a wound which may lead to fatal conse- extended to stop payment to the creditor States; quences. I must be permitted to doubt the power nor should I be surprised, if the one should be carof Congress to extinguish these balances without ried, at seeing a resolution laid upon your table, the concurrence of all the States. The settlement before the close of the present session, for effecting having been made under a solemn agreement of the other. And will not the same parity of reaall the States, where will you find a power vested soning which has been adduced on this occasion in Congress to alienate the interest which any in- lead to the extinguishment of all the debts of the dividual State has acquired in the balance in con- Nation? If $3,500,000 due to the United States sequence of that agreement, and vest it in another is to be wiped off on a mere statement on this floor, State? No such power is expressed in the Con- that the settlement was unjust, without the least stitution, nor can I conceive it to be implied by particle of evidence to prove the fact, will a preanything which is expressed in that instrument. text ever be wanting for passing sentence against If then Congress have no Constitutional power any class of your public debt? Sir, I have always to make the extinguishment, will not the trans- been an admirer of the system of government exaction be considered an innovation on the rights tablished in the United States. I have thought it of individual States, as well as a dereliction of the the best calculated of any government on earth, to public faith?

perpetuate national faith, and secure individual A gentleman from New York has said that the rights. I have entertained exalted ideas of the extinguishment could not be a violation of public wisdom and economy of the presentadministration, faith, because Congress had already given up part and I have consoled myself on the pleasing prosof the debt. It seems to me that the gentleman's pects of the future prosperity and happiness of our conclusion does not naturally follow the premises nation. But, sir, I view the measure before you which he has stated, for if it could, under any cir- as calculated to veil those pleasing prospects, and cumstances, be considered a dereliction of public excite fearful apprehensions for the honor and fate faith 10 extinguish these balances, it cannot at this of our country: time be considered the less so, merely on the The resolution was further supported by Mr. ground of the Legislature having heretofore fallen J. Clay, and opposed by Mr. Findley, and Mr. into an error on the subject. The fact is, that Bedinger. Congress did, in 17 pass a law for remitting the Mr. Roor begged the indulgence of the House, balances, on condition, that each debtor State for a few moments, while he briefly stated some would pay into the Treasury of the United States of the reasons which guided his judgment in favor by a given period the amount of the sums which of the resolution on the table. Coming, as he did, had been assumed by the United States, of their from a State against which a large balance had respective State debts prior to the seitlement. been reported by the Commissioners, it would Bui, sir, at the time of passing that law, and ever probably be expected that he should lend his feeble since, I have considered it in the same point of light efforts in aid of its extinguishment. But, while as I do the resolution before you, and therefore making these efforts, he should not call in question cannot admit that as a circumstance in favor of the the conduct of the Commissioners in striking these resolution. That provision has now expired, with-balances, nor inquire whether they were actuated out being embraced by any of the debtor States, by pure or impure motives. As the balances have except in that which has been done by the State been for a long time reported, and as the proceedof New York, in fortifying her ports and harbors. ings of the Commissioners, as well as the docuIf the State of Delaware had thought proper to ments and vouchers on which they acted, are sehavecomplied with this liberal provision, she might cluded from the public eye, he should suffer them have been discharged from a debt of $600,000 for all to rest together undisturbed, and confine him$60,000, but it seems that she prefers a total ex-self to the justice and expediency of the measure. tinction to a partial payment. If the balances If, said Mr. R. there is no probability that the should be extinguished on the principle that the debtor States, so called, will ever pay the balances settlement was unjust, which is the only ground reported against them, wisdom and sound policy taken in favor of their extinguishment, I am ap- require the passage of this resolution ; else they prehensive that this is only to be a stepping stone may remain a source of future jealousy and hatred to a more favorite object. I mean the extinguish- between the several States, and a subject of manment of the balances due to the creditor States on agement highly prejudicial to the Union. Or are the settlement: for, although these balances have they, he inquired, to remain as a rod over the debtbeen funded by the United States, it is well known or States to whip them into compliance with some that the evidences of the debt in the possession of | favorite measure? If this was the object, he

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H. OF R.

State Balances.

JANUARY, 1804.

thought it prudent to extinguish them at once. and that she has actually expended in the defence

The national Treasury, he said, can never be en- of the port of New York, and for which she is riched from this source, unless a voluntary pay- credited on the books of the Treasury, to the ment shall be made by the debtor States, or the amount of $220,000, and that thereby she has acUnited States shall, by coercion, compel' a pay- knowledged the justice of the demand, and will ment. And although, according to the report of pay the residue. But, let gentlemen remember the Commissioners, ihere are several States which ihat, at that time, a momentary frenzy bad seizare nominally debtor, yet there are but three, viz: ed upon the people of the United States, to wage New York, Delaware, and North Carolina, which war upon the Republic of France. And was it are, by that report, really debtor. And a volun- strange, he inquired, that the Legislature of that tary payment on the part of those States cannot State caught the contagion? When the General reasonably be expected: For you are told, Mr. Government had either refused or neglected to Chairman, that Delaware cannot pay; and you fortify her ports, was it strange that she should are also told, by two honorable gentlemen from altempt to defend herself against the danger of an North Carolina (Mr. BLACKLEDGE and Mr. Hol- invasion, then supposed to be imminent ? Since LAND) that that State will not pay—and as one of that frenzy has subsided, it is presumed that New the Representatives from the State of New York. York will not make a further waste of money, in I think I may with confidence assert that she will compliance with the terms of the act of 1799. make no farther payment. She yet remembers, And, besides, sir, should the debtor States, for a sir, that at the commencement of the Revolution moment, suppose the settlement to have been nearly one half of her citizens were inimical to that equitably made, and that the balances are justly cause which you venerate. She yet remembers, due, we should probably find each State withthat early in that revolution her only avenue to the holding a payment till other debtor States had ocean was blocked up, and by that and other causes, paid the balance reported against them. Thus, by growing out of the existing state of things, the each State's waiting for others to go forward, you price of her produce, and of her supplies furnished would find that no payment would be made. If to the army, was deeply depressed. That State you can have no reasonable expectation that these was the theatre of war almost during the whole balances will ever be voluntarily paid, why retain conflict. Her western frontiers were burnt and them on your books ? Do you intend, by coerpillaged by a savage foe, and her southern borders cion, to compel a payment? In what manner, I overrun by worse than savages. From her north- beg io know, will you institute suits against the ern frontiers a formidable enemy penetrated into debtor States? Will you bring a State sovereignty the very bowels of the State. Surrounded by to bend at the feet of your courts? I presume these distressing scenes she not only raised her not, since you have amended the Constitution regiments and paid her quotas required by Con- respecting the suability of States. Will you segress, but also set apart, as bounty lands for her quester their stock in the funds, if they should soldiers, a large tract of the most fertile part of the happen to hold any, and thus violate the national Ştate. After having done and suffered so much, faith? And will you lay a direct tax upon the she could not but view with astonishment that United States, and remit the same to the creditor enormous sum of more than two millions of dol- States, and thus indirectly evade the Constitutionlars which was reported against her. Further, al provision that direct taxes and representation Mr. Chairman, the State of New York cannot be shall be according to a certain ratio ? Or will you, lieve that the act of Congress of the 15th of Au- as the last resort, put the debtor States out of your gust, 1790, pointed out a fair and equitable mode protection, and send your fleet to block up their of seittlement. When men and money were called harbors ? I presume you will not, especially when for, to carry on that war in which these expenses you reflect that the people of New York alone were incurred, that State bad not more than half pay more than one-fourth of all your duties on the population which she possessed at the time imports and tonnage. This is too considerable an this act was passed. The quota of expenses, there item in your revenue to be wantonly thrown fore, which were charged to her according to this away. ratio, were nearly double to what it would have But, Mr. Chairman, it has been suggested that been, had a settlement been made by the same the enormous balance reported against the State ratio, at the close of the war. Had her quota been of New York proceeds from the assumption of fixed according to her population at that period, the State debts, and that she is bound in honor to it is presumed that she would have been reported pay, and will pay, the amount assumed for her. a creditor instead of a debtor State. That State In reply to this suggestion, permit me to remark, must therefore think that this enormous balance that ihe sum which was assumed for her was not is an unjust and an unreasonable demand. And equal to her proportion of the aggregate amount if she thinks it unjust, it is enough; for whether of State debis assumed. The sum assumed for the settlement is just or unjust, if a State thinks New York was $1,183,716 69. The aggregate it unjust the result is the same; she will not vol- amount assumed for the several States was $19,untarily pay;

271.787 47. Hence, it will appear that, according But, said Mr. R., perhaps we shall be told that to the ratio for settling the accounts as established the State of New York has already made appro- by the act of 1790, the proportion of New York priations for complying with the terms offered by of that aggregate sum is $1,715,169 78; which is the act of Congress of the 15th of February, 1799, | $532,453 09 more than the sum assumed for that

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State. Less sums were also assumed for Dela- peatedly before Congress and before the public ware and North Carolina than their respective since he had had the honor of a seat on that floor. proportions of that aggregate.

He should not inquire whether the accounts upon Another objection is made to the resolution on which the balances were predicated had been fairly your table, that its passage will affect the credit of liquidated or not; whether the sums were justly ihe creditor States; and one gentleman from New due; nor should he examine which of the States Jersey (Mr. SouthARD) has gone so far as to say had rendered most services to the nation. These that ihe same power which can extinguish these considerations with him bore not upon the case. balances, can wipe off the whole funded debt; and The question had simplified itself to his mind my friend from Massachusetts (Mr. VARNUM) ex- and lay in a narrow compass. It had resolved pressed a belief that the passage of this resolution itself into this: Can or will these balances ever be is a violation of public faith. But I must con- paid? If they cannot, nor will not be paid, there fess, sir, my total'inability to perceive the force of ought to be an end to the inquiry, and an end to these observations. If Congress possess the phys- the demand. It had been said, during the discusical power by one Legislative stroke to wipe off sion, by a gentlemen from New York, that when the whole funded debt, yet, if that power cannot this subject was formerly under consideration, rightfully be exercised, I trust it will not be exercis- New York sold out the stock which she held in ed at all by this House. And I cannot see that, be the funds of the United States, lest it might be cause you remit to your debtor that debt which sequestered for the payment of her balance. Can he claims to be unjust, you thereby destroy the anything evince a stronger hostility to the pay. credit of your creditors. Or, does it necessarily ment of this claim than this fact? And yet, with follow that if an individual remits the supposed this open declaration against the payment of the debt, that he, by the same act, destroys the bond balance due by her, we are to persist in continuing of his creditors? Those States in whose favor the claim ! As New York has manifested her balances were reported have funded those balan- determination not to pay, what mode of coercion ces, and the national faith is pledged for the pay- has been suggested ? None. No one has pretended ment. And I trust that this nation will continue to say that these balances ever can, or ever will to preserve its faith inviolate.

be collected. If New York and North Carolina Permit me, sir, to add, if the extinguishment will not pay, can Delaware discharge the claim of these balances is a violation of public faith and against her ?' With her what process is to be pura destruction of the credits of those States who sued? Is she to be sent to auction and sold to have funded the balances reported in their favor, the highest bidder? And if gentlemen are willing that that faith is already violated and those cre- to put her under the hammer of the auctioneer, dits are already destroyed. For, by the operation who is to be the purchaser and how is the sale to of the act of 1798, had the debtor States complied be enforced? The justice of these balances has with its proffered terms, the balance against New been contested, nay, it has been flatly denied ; York of more than two millions, with interest, it is not to be expected, therefore, that the debtor would have been paid with less than eight hun- States would willingly discharge them, and as no dred thousand dollars, and the six hundred and feasible mode of enforcing payment has been or odd thousand dollars against Delaware would can be suggested, policy and economy call for have been paid with about fifty thousand. And their extinction. the same principles which gave you a right to It would be well for gentlemen, who are for remit a part, gave you a right to remit the whole. keeping alive this demand, to calculate its cost to If the extinguishment of the whole will give a the nation, and then, perhaps, they would feel deadly blow to public faith, I should think that less reluctance to the surrender. Large sums are the remission of so large a part had, at least, in- spent in the discussion, and the time and the flicted a mortal wound.

purse of the people very unprofitably employed. From a full view of this subject, Mr. Chairman, In his apprehension, therefore, it would be a savI am convinced that if you retain these balances ing to the United States to pass the resolution. as a rod over the debtor States, you will only It is idle to keep up a demand which never can excite jealousy and animostity among the mem- nor never will be satisfied; he hoped, therefore, bers of this Union, without deriving any benefit the House would agree with him in rejecting the to the nation. Permit me, therefore, to express report of the Committee of the Whole and adopta hope that a majority of this Committee will be ing the resolution. in favor of sponging them out of the books of the Mr. HOLLAND.-It is to be expected that gentleTreasury.

men representing various parts of the Union, and Mr. Leis said that he never rose to give an opin- particularly those who were eye-witnesses to the ion on that floor but with reluctance, and he should hardships experienced under the Revolutionary not then have risen but for the demand of the war, will be led to think that the distresses they yeas and nays on the question. As he had here- saw, and the exertions performed immediately iofore voted against a similar proposition to that within their own view, were not equalled in any on the table, he felt it a duty he owed himself, as other part of the continent. That this is the case, the vote was to be recorded, to assign his reasons we have sufficient evidence by the declarations of for rejecting the report of the Committee of the many honorable gentlemen on the present queswhole House and voting in favor of the resolution. tion. A gentleman from Massachusetts (Mr.

This is not a new question. It had been re- THATCHER) has said, that the States of New

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