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CHAPTER and every other case, not only to act the part of a court of equity in bringing exorbitant nominal claims within 1790. the limits of reason and fair dealing, but, where the stability of the social system was in danger, to decline altogether even the fulfillment of bona fide public contracts, and to interfere, should there be need, with private contracts also. Such a power, however, was only to be exercised in cases of the most extreme and palpable necessity, a case which the present circumstances of the United States did not present.

Feb. 11.

Scott's motion having been voted down, Madison rose to explain his views. In all the former business of the House he had acted as leader, but on this question he had hitherto preserved silence. No logic, he thought, could disprove the obligation of the United States to pay the whole amount, principal and interest, promised on the face of their certificates. But to whom should this payment be made? Where the certificates remained in the hands of the original holders, no question of this sort could arise; but in cases of transfer, there seemed to be two parties having a claim upon the justice of the nation. The original holder, obliged to take a certificate depreciated, at the moment it was given, to a sixth or seventh of its nominal value, might justly allege that such a certificate could not fairly be esteemed a discharge of the debt; and in support of that view, might refer to the case of the depreciation allowances made to the army during the late war. The holder, on the other hand, might say, that in taking the risk of losing the whole, he had justly acquired, in accordance with the tenor of the certificate, a right to the full amount. To pay both sets of claimants in full would perhaps exceed the abil ity of the nation; at any rate, it would be to refund a sum greatly beyond that originally received by the pub

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lic, a stretch of generosity not expected by the world, CHAPTER nor by the parties themselves. To deprive the present

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holders of a fair profit on their speculation would be fatal 1790. to the proposed establishment of public credit. the unfortunate persons who had sold their certificates at a great sacrifice, and who were now to be taxed to pay the present holders, the sole victims, was abhorrent to every principle of humanity. He proposed, therefore, and he moved an amendment to that effect, that while holders by transfer should receive the highest price which the certificates had ever yet borne in the market, thus giving to the larger part of them a very handsome profit, the balance, amounting to one half or more of the entire amount, should be paid to the original creditors.

This proposition, which seems to have taken the House quite by surprise, was very far from meeting the views entertained on either side of it. It had been the object of those who had attempted to belittle the claim of the present holders to find an excuse in so doing for a new repudiation. If nothing could be saved to the public, they cared but little to whom the money was paid. Those, on the other hand, who went for full payment, whether impelled by the policy of supporting the public credit, or through desire of attaching the moneyed interest to the support of the new government, were little disposed to favor a proposition which the very moneyed men whom it was desired to gain over would hardly fail to consider a violation of their rights.

Boudinot objected to the impracticable character of Madison's proposition. The certificates being payable to bearer, had often issued to merely nominal persons, and not to the actual creditors. This was especially the case with those paid out for supplies furnished to the army, the commissioners taking a quantity of certificates

CHAPTER payable to themselves which they transferred by delivery. II. Sedgwick objected that the proposed partition of pay1790. ment between the original holder and his assignee would

have the effect of an ex post facto law, or, at all events, of a law violating the obligation of contracts, amounting, in fact, to a transfer back to the original creditor of a part of that property with which he had voluntarily parted for a valuable consideration, an interference with private contracts highly dangerous as well as unconsti tutional. The loss suffered by the original creditors, whether by the fault or the misfortune of the government, could not justify the making reparation by seizing for that purpose on the lawfully-acquired property of other people. Even granting that the original creditor might have an equitable claim on the present holder for a part of the money, it was the business, not of Congress, but of the judicial courts, to enforce that claim; and to them it should be left. Similar views were urged with great ability by Lawrence and Smith of South Carolina. Ames poured out against Madison's proposition a torrent of invective. Benson, Hartley, Goodhue, and Wadsworth maintained the right of the present holders to the entire payment. The galleries were crowded with spectators, many of them large holders of certificates, who looked on with beating hearts. The unexpected payment in full which the secretary had proposed, seemed to them already like a property in possession; and men who would have been well satisfied a few months before to be secure of fifty per cent. on the face of the certifi cates, regarded now with no little indignation the proposal to allow to them that sum, and as much more to the original holders.

Madison's proposition was supported by Jackson and Page, and by his two colleagues, White and Moore, but

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their speeches added nothing to the argument. They CHAPTER seemed, indeed, to be very much under the influence of envy at the great profits about to be made-profits in 1790. which the planters would have little share, but which would chiefly redound to merchants and money-lenders. They drew pathetic and rather highly-colored pictures of war-worn veterans seduced by the artful persuasions of cunning speculators to sell their certificates for a great deal less than the value. In fact, the whole business of the purchase of certificates was denounced as having been little better than a fraud.

This drove some speakers on the other side into questioning whether the soldiers, after all, had such claims on the government as had been represented. Taking their enormous bounties into consideration, they had been better paid than any other soldiers. The public creditors, who had transferred their certificates, had asked for no such relief as this motion proposed, nor could they accept it with honor. They had voluntarily transferred their whole claim for a valuable consideration, and any thing which might now be paid to them under color of discharging that claim they would be bound in honor and justice to pay over to their assignees.

To all the denunciations, some of them rather warm, leveled against his motion, as if it were a proposal to rob the present holders of the certificates for the benefit of the original creditors, Madison replied with great calmness and dignity. He admitted that, according to the strict rules of law, the present holders were alone entitled to payment, and that the original creditors, in parting with their certificates, had lost all legal claim on the government; but their claim in equity still remained, and a great political question like this was not to be settled on mere grounds of technical jurisprudence. The

CHAPTER great object in paying at all was avowed to be the politII. ical object of establishing public credit. In strict justice, 1790. the present holders might be entitled to the whole face

of the certificates, and the original creditors to an additional indemnity out of the public treasury equal to the difference between the face of the certificates and the sums for which they had been obliged to sell. But the nation was able, or, what in a government like ours amounted to the same thing, was willing to pay no more in the whole than a sum equal to the original debt, with the interest upon it. How should that sum be distributed? Should all of it go to the mere technical creditor, whose sole merit consisted in having confidence enough in the government to speculate in its securities, or should those also come in for a share by whom services had actually been rendered and supplies actually furnished, but whom the necessities of government and their own had compelled to accept a very partial equivalent? Holders of certificates by purchase had unquestionably a certain merit and a certain claim; but ought they not to be satisfied with being paid the utmost amount which, prior to the secretary's report, they could have expected, and which they would then have very gladly received? Those who, for services performed and advances made, had realized but a very inadequate recompense, had also a merit and a claim. Would not the public credit be better established by recognizing both these claims, and meeting both to the extent of the public means, rather than by paying one in full to the total exclusion of the other? That method would establish a credit only with capitalists; the other would establish a credit not less essential with those from whom was to be expected the actual rendition of services.

Gerry, Ames, and Lawrence replied at great length,