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National Debt - part 4

An address from the United States in Congress assembled to the legislatures of the several states : When the interests of a people are endangered, either through the defect of the government they have established, or the want of timely and vigorous, exertions to give efficacy to its operations, it becomes the duty ...

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AN ADDRESS from the UNITED STATES in CONGRESS ASSEMBLED to the LEGISLATURES of the several STATES.

WHEN the interests of a people are endangered, either through the defect of the government they have established, or the want of timely and vigorous, exertions to give efficacy to its operation, it becomes the duty of those to whom the sacred truth of watching over the welfare of the nation is delegated, to awaken it to a sense of its danger and to urge the adoption of such measures as may avert the calamities with which it is threatened.

Impressed with a sense of this high obligation, and an anxious and affectionate concern for the interest, honor and safety of their constituents, the United States in Congress assembled, have at various periods, and on various occasions, exercised this important trust, but on none more solemn and interesting than the present.

It is with the most painful anxiety that they are compelled to declare, that, having been denied the means of satisfying the engagements which they have constitutionally made for the common benefit of the union, it is now their duty solemnly to warn their constituents that the most fatal evils will speedily, and inevitably, flow from a breach of public faith, and a violation of the principles of justice, which are the solid basis of the honor and prosperity of nations.

The states were called upon the last year to pay into the general treasury the sum of three million of dollars, of which one million was to be discharged by specie, and two million by discounts of interest on the domestic debt. The objects for which the monies proposed to be raised were to be appropriated, were then distinctly pointed out; by this it appears that the sum of eight hundred and forty thousand dollars were absolutely and indispensibly necessary to defray the charges of the civil government and the interest of the foreign debt.

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What have been the effects of this requisition? Notwithstanding the serious and interesting appeal of Congress to the justice and wisdom of the several states which soon followed it, and in which, after stating the public receipts and expenditures for the four preceding years, it is proved that the receipts of the last fourteen months were not adequate to the bare maintenance of the federal government, on the most economical establishment, and in time of profound peace. Only, ten states out of the thirteen have passed acts apparently complying with it, and by such as have complied not more than the sum of 100,000 dollars has been paid into the general treasury to the present date, in actual specie.

In examining the proceedings of the different states in consequence of the resolves of the 27th September, 1785, the following statement is the result.

In the act of New-Hampshire, the specie directed to be raised is to be assessed on the polls and rateable estates within that state, agreeable to the last proportion of taxes for the several towns and places, but as it does not appear by this act, at what rate the polls and real property are rated, or whether those funds are burthened with any other engagements, it is impossible to form a judgment of what may be expected from the provision made. If the funds are the same as have been relied on for paying that states quota of the requisition of the 27th and 28th of April, 1784, experience demonstrates that no dependence can be placed upon their efficacy.

By the act of Massachusetts, it appears that there is assessed on the different counties of that state, the sum of 300,439l. IS. 3d. lawful money, out of which the sum of 145,665l. equal to 485,550 dollars (the specie quota of that state) is to be paid into the general treasury, on or before the first of January next.

  • From the whole sum there is to be deducted, .......... L. S. d.
  • For the support of civil government .......... 25,784: 1: 3.
  • For the payment of interest on their state debt .......... 29,000: 0: 0.
  • For redeeming army notes, payable 1784, 1785 and 1786, .......... 100,000: 0: 0.
  • For replacing sums drawn out of the treasury for support of the members of assembly .......... 1,101:18: 0.

It does not appear by this act, that any preference in payment is to be given to the requisition of Congress, and as more than one moiety of the sum proposed to be raised is for state purposes, in which the support of the government, and the particular interest of their citizens are concerned, it may be inferred that the first monies collected will be appropriated for the objects last mentioned; of course the specie payments of the requisition will be procrastinated, and any deficiency in the general tax will fall on the sum which is appropriated for federal purposes.

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From Rhode-Island no specie payment on the last requisition is to be expected, that state having set off, against the requisition, the balances due the contractors for ox-teams in the service of the United States for the year 1781, notwithstanding the balance which remained due on the requisition for 1784; this, together with the amount of their liquidated payments to invalids, in pursuance of the resolution of Congress of the 7th June, 1785, will very probably absorb the specie sum of the requisition of the 27th September, 1785: nor can a further payment of the balance due on that of 1784 be calculated on, as a paper currency in that state is made receivable in all taxes whatever.

Connecticut having passed no act in compliance with the last requisition, nothing can be expected from her.

By the act of New-York, though the treasurer of the state is directed to pay into the general treasury the full proportion of her quota on the last requisition, at the periods therein specified, no funds appear, by the said law, to be provided for effecting this object. By a law enacted in the last sessions of the legislature of that state, a paper currency is made receivable in all taxes whatever from the first of May last: from this circumstance, little dependence can be placed in receiving, in the course of the present year, her full specie quota.

Jersey having passed no act upon the last requisition nothing is to be expected from her.

Pennsylvania, by an act of the 8th March, 1786, directed their treasurer to pay to the order of the United States such a sum in specie, as, together with the sums paid on account of the requisitions of the 27th and 28th of April, 1784, and 27th of September, 1785, would make the sum of 557,{Omitted text, 3 characters} is to be observed, that the sum directed to be paid by discounts of interest, is 86,657 dollars more than the state has a right to avail itself of on the requisition of the 4th of September, 1782, 27th of April, 1784, and 27th of September, 1785, and that the amount directed to be paid is short (by the abovementioned overplus in indents of interest) of the actual sum of specie required of that state, by the requisitions of the 27th and 28th of April, 1784, and 27th of September, 1785.

The state of Delaware has passed an act in compliance with the last requisition, which will probably be productive of her quota.

The state of Maryland did, at their last session, pass an act providing for the payment of 94,350 dollars in specie, being the proportion of specie required of that state by the last requisition; but it does not appear that any provision has been made for the payment of the indents of interest, required by the said requisition.

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Virginia passed an act of the 21st of January last, in full compliance with the last requisition, but the revenue laws, referred to in the said act, do not shew what monies may be relied on from them.

From North-Carolina nothing is to be expected on the last requisition, no act having passed in pursuance of it.

In the state of South-Carolina the last requisition is fully covered by the credit she has obtained in the treasury, for supplies in 1782 and 1783.

The state of Georgia, by an act of the 13th of February last, directed their treasurer to pay into the general treasury, the quotas assigned to that state, by the resolves of the 4th September, 1782, 27th and 28th of April, 1784, and 27th of September, 1785; but as the said act refers to a revenue law, of which a copy has not accompanied it, no certain opinion can be formed how far the compliance may be operative; but, as nothing has yet been paid on either of the aforesaid requisitions, little expectation can be entertained of payments under this act which seems to have created no new funds.

To the above statement, nothing need be added to manifest the exhausted state of the federal treasury, except that of the requisition of the 27th and 28th April, 1784; heavy balances are still due as appears from the following statement thereof to the 30th June last:

Of the requisition of the 4th of September 1782, considerable balances are also due, but as the states were permitted to apply their respective quotas, in the payment of interest due on the loan-office certificates, and other liquidated debts of the United States, contracted therein, and few of them have caused regular returns to be made, how far they have acted upon the said requisition, the balances cannot now be ascertained.

If it be asked, to what end is another requisition made, whilst such heavy balances remain still unsatisfied? the answer is, that the United States in Congress, are bound by every principle of good faith and justice, and a regard to national character, to exercise that authority which is vested in them, for obliging the different members of the union to contribute their respective quotas for the support of the general government; and to manifest to the world, that they are not inattentive to the high and honorable trust of watching over the welfare of a free people.

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The states will observe that in the present requisition, no less than 1,723,626 dollars, 47-90ths ought to be forthwith raised in specie, for the express purpose of paying the interest and certain instalments of principal of the foreign debt, which will become due in the present, and in the course of the next year: So vast is the accumulation of the debt which has been brought on the people for want of an early and general adoption of the resolves of Congress of the 18th April 1783!

The general impost therein recommended, was expressly appropriated for the purpose of discharging the principal and interest of the national debt; the probable amount of it was at that time calculated at near a million of dollars annually. Supposing this calculation to be greater than this revenue is likely to produce in a regular state of commerce, yet when the extraordinary importations which were poured into the states for the first two years after the peace, are taken into consideration, it may safely be averred that, by the end of the year 1787, a net revenue would have accrued from the execution of that plan, of near four million of dollars, if had it commenced its operation in the early part of the year 1784.

It may in this place, be proper to state, what have been the sums necessary to be raised in specie, for the interest and principal of the foreign debt, to the end of the year 1787, and to compare the aggregate with the probable amount of that revenue to the same period.

By the schedule of the principal and interest due on the foreign loans, which was transmitted to the several states with the act of Congress of the 15th of February last, it appears that the aggregate of principal and interest due on the French and Dutch loans to the end of the year 1787 is
.......... dollars .......... 1,710,044
On the Spanish loan of 174,000 dollars, seven years interest, .......... 60,900
Foreign officers and individuals in France, say, .......... 44,000
To foreign individuals, for principal and interest of debts contracted abroad, about .......... 100,000
.......... 1,914,944

Deduct this sum from what would have been the probable amount of the impost to the end of the year

1787, and it appears that about two million of dollars, of surplus revenue, might under a proper arrangement, have been applied towards the reduction of the capital of the domestic debt.

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When to these circumstances are added, the influx of specie from the revival of credit, and the happy effects it would have had on the present unfavorable balance of commerce, and consequently on the collection of taxes throughout all the states, it is scarcely possible to foresee the extent and number of the advantages which would have flowed from the operation of this system.

It is a painful task, either in nations or individuals, to call to mind circumstances of advantage which have escaped their controul, and to compare a situation of present distress, with what (under the auspices of heaven) would have been the direct reverse, had they availed themselves of advantages once within their power to command.

But it is by an honest and serious examination of past errors, that experience only is gained, and better systems adopted in the management of public or private affairs. It becomes therefore the duty of the guardians of a free and enlightened people, however painful the task, to execute this high trust, and to conceal nothing that may induce the nation to investigate, {Omitted text, 3 characters}

It is not to be expected, that in a government composed of thirteen independent deliberative powers, and owing its origin to an extreme jealousy of public liberty, the judgment of the several members of the confederacy, should at the same time, embrace the wisdom and necessity of every measure which may be recommended by the general government, particularly in the case of an untried system of revenue, the most difficult of all objects, to carry into execution.

The several legislatures have at length passed acts for granting to the United States in Congress, the power of levying a general impost, to be appropriated agreeably to their recommendations of the 18th of April, 1783: in two states the laws which have been enacted for this purpose require some alteration to give a general operation to the collection of this revenue, and for the wisdom and patriotism for which these states have been long distinguished, the United States in Congress, cannot entertain the idea that they will refuse to give efficacy to a measure so essential to the establishment of the national credit and safety.

Under the heavy accumulation of the foreign debt, it becomes, however, peculiarly incumbent on the different states to exert themselves to fulfil that duty, which they owe to their own character and the welfare of the confederacy, by enacting laws more efficacious for bringing into the general treasury their respective quotas of the present requisition, than has hitherto been the case.

To effect this great and desirable object, the wisdom of the respective legislatures will undoubtedly discover, that the following general principles are essentially necessary:

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1st. That the taxes intended for the purposes of the union should be permanent and distinct from those which are appropriated to the service of the state.

2d. That they should (as far as is practicable) be simple in their nature, and depend more for their execution, on the mode of the tax than on the diligence of the officers entrusted with the collection.

3d. That the sums raised by the individuals should be paid in like manner as the quotas are receivable from the several states, that is to say, that the proportion of specie pointed out by the requisition should keep pace with the payment of the discounts of interest.

An attention to these principles would undoubtedly promote in a great degree the collection of the revenue, and the arrangement of the federal finances.

That a brave and enlightened people who encountered every hardship and distress in opposing a system of government which they deemed adverse to their welfare and liberty, before they had even experienced the mischiefs which they foresaw from its establishment, should (whilst the memory of their former principles and heroism is still fresh in their recollection) become the voluntary suicides of their own interest, their own happiness and their own honor, is a circumstance too disgraceful to admit of belief.

By the union of the several states they have rescued themselves from the tyranny of a powerful nation, and established constitutions on the free consent of the people, which are the admiration of the intelligent and virtuous part of mankind, and the firm support of the civil and religious rights of all who live under the shadow of their influence. But these constitutions cannot long outlive the fate of the general union; and this union cannot exist without adequate funds to defray the expences of the government, and to discharge those engagements which have been entered into with the concurrence of the citizens of all these states, for their common benefit.

An appeal is now again made to the reason, the justice, and the interest of the several states. Whatever may be the fate of the measures submitted to their consideration, for giving strength and reputation to the union, the United States in Congress by virtue of the powers of the confederation, call upon the different members to pay into the general treasury at the time stipulated, the quotas laid on them respectively by the present requisition for the support of the general government.

The purposes for which the monies are to be appropriated are fairly stated, and the evils pointed out which will attend a non compliance. The delinquent states (if such there can possibly be) must take upon themselves the responsibility for all those calamities, which will most assuredly flow from a disregard to the political ties which unite them with the other members of the confederacy, and to those principles of justice and good faith, which can alone support the existence of a free government.

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