Alexander Hamilton Papers

The Examination Number III, [24 December 1801]

The Examination.1
Number III.

[New York, December 24, 1801]

Had our laws been less provident than they have been, yet must it give us a very humble idea of the talents of our President as a statesman, to find him embarrassed between an absolute abandonment of revenue, and an inconvenient accumulation of treasure.2 Pursuing the doctrine professed by his sect, that our public debt is a national curse which cannot too promptly be removed, and adhering to the* assurance which he has virtually given, that a sponge,4 the favorite instrument, shall not be employed for the purpose, how has it happened that he should have overlooked the simple and obvious expedient of using the supposed excess of income as a remedy for so great a mischief?

After all we have heard in times past, it would ill become either the head, or any member, of the orthodox sect to contend, that a too rapid reimbursement of the debt might be attended with evils. In c[o]urtesy however, this shall be supposed to be urged by some new convert, who has not entirely shaken off the prejudices of former modes of thinking; and it shall be examined, whether this argument will afford a justification of the measure recommended.

It shall not be denied, that the immediate payment of our whole debt, if practicable, would be likely to be injurious in various ways. It would, in the first instance, produce a money-plethora, (if the phrase may be allowed,) which experience has shewn to be inauspicious to the energies, and especially to the morality and industry of a nation. The quick efflux of this money to pay a considerable part of the debt in the hands of foreigners, and to procure from abroad the means of gratifying an increased extravagance, would, after some time, substitute a too great vacuity to a too great fulness; leaving us to struggle with the bad habits incident to the latter state, and with the embarrassments of a defective circulation. To these, other reasons might be added, which, though equally just and solid, are omitted as being more liable to dispute.

Tho’ an extreme case is here presented, the immediate reimbursement of the entire debt; yet it must be admitted, that the same considerations are applicable in a less degree to a summary, or very rapid repayment by large instalments. But the answer to all this is, that it would have been full time to adopt precautionary measures against evils from such a source, when experience had realized the danger. Till such time it is certainly the highest wisdom to continue the employment of a fund which is already provided, and without overburdening the people, for the all important purpose of exonerating our nation from debt, and of placing it in a condition, with competent resources to meet future contingencies which may threaten its safety. On the other hand, is it not a mark of the highest improvidence and folly, to throw away an important part of this fund on the mere speculation that it may possibly be superfluous?5

But admitting it to be already ascertained, that the fund is greater than is requisite to extinguish the debt, with convenient celerity; does it follow that the excess, if retained, must be suffered to accumulate, and that no different method could have been found to employ it which would have been productive of adequate utility?

Whatever diversity of opinion there may be with regard to military and naval preparations, for the defence and security of the country, there are some things in which all well-informed and reflecting men unite. Arsenals, founderies, dock-yards and magazines, (especially those containing materials for the construction and equipment of ships,) so that upon the breaking out of a war there may be a sufficient supply of warlike implements, and of means for the speedy creation of a navy;6 are by all deemed eligible objects of public care. To provide for these objects upon a competent, though moderate scale, will be attended with expence so considerable, as to leave nothing to spare from the amount of our present income. To persons unacquainted with the subject, the quantities of several articles on hand may appear ample; but to good judges there is hardly any one class of supplies which will not be thought to require much augmentation. As far as a navy is concerned, the deficiency is palpable.

If dock-yards are to be established in earnest, they ought certainly to be well protected. For this purpose, fortifications of a substantial and durable nature, very different from the temporary shifts hitherto adopted, ought to be erected. And if the President will enquire into the cost of even these trifling constructions, in the instances where they have been managed with all practicable œconomy, he will become convinced that the erection of proper works would call for an expenditure forbidding the supposition of a superfluity of revenue.7

In addition to objects of national security, there are many purposes of great public utility to which the revenues in question might be applied. The improvement of the communications between the different parts of our country is an object well worthy of the national purse, and one which would abundantly repay to labor the portion of its earnings, which may have been borrowed for that purpose. To provide roads and bridges is within the direct purview of the constitution.8 In many parts of the country, especially in the Western Territory, a matter in which the Atlantic States are equally interested, aqueducts and canals would also be fit subjects of pecuniary aid, from the general Government. In France, England, and other parts of Europe, institutions exist supported by public contributions, which eminently promote agriculture and the arts: such institutions merit imitation by our government: they are of the number of those which directly and sensibly recompense labor for what it lends to their agency.

To suggestions of the last kind, the adepts of the new-school have a ready answer: Industry will succeed and prosper in proportion as it is left to the exertions of individual enterprise. This favorite dogma, when taken as a general rule, is true; but as an exclusive one, it is false, and leads to error in the administration of public affairs. In matters of industry, human enterprize ought, doubtless, to be left free in the main, not fettered by too much regulation; but practical politicians know that it may be beneficially stimulated by prudent aids and encouragements on the part of the Government. This is proved by numerous examples too tedious to be cited; examples which will be neglected only by indolent and temporising rulers, who love to loll in the lap of epicurean ease, and seem to imagine that to govern well, is to amuse the wondering multitude with sagacious aphorisms and oracular sayings.

What has been observed, is sufficient to render it manifest, that independent of the extinguishment of the Debt, the revenues proposed to be yielded up, would find ample and very useful employment for a variety of public purposes. Already in possession of so valuable a resource; having surmounted the difficulties, which, from the opinions and habits of our citizens, obstruct, in this, more than in any other country, every new provision for adding to our public income; certainly without a colourable pretence of there being a grievous or undue pressure on the community—how foolish will it be to resign the boon, perhaps in a short time to be compelled again to resort to it; and for that purpose to hazard a repetition of the obstacles which have been before encountered and overcome; which, however, gave birth to one insurrection, and may give birth to another? Infatuated must be the councils from which so injurious a project has proceeded!

But admitting the position that there is an excess of income which ought to be relinquished, still the proposal to surrender the internal revenue is impolitic. It ought to be carefully preserved, as not being exposed to the casualties incident to our intercourse with foreign nations, and therefore the most certain. It ought to be preserved, as reaching to descriptions of persons who are not proportionably affected by the impost, and as tending for this reason, to distribute the public burden more equitably. It ought to be preserved, because if revenue can really be spared, it is best to do it in such a manner as will conduce to the relief or advancement of our navigation and commerce. Rather let the tonnage duty on American vessels9 be abolished, and let the duties be lessened on some particular articles on which they may press with inconvenient weight. Let not the merchant be provoked to attempt to evade the duties, by the sentiment that his ease or interest is disregarded, and that his capital alone is to be clogged and incumbered by the demands of the treasury.

But who and what are the merchants when compared with the patriotic votaries of whiskey in Pennsylvania and Virginia?10

Lucius Crassus.

New-York Evening Post, December 24, 1801.

3For Thomas Jefferson’s inaugural address, March 4, 1801, see Annals of Congress description begins The Debates and Proceedings in the Congress of the United States; with an Appendix, Containing Important State Papers and Public Documents, and all the Laws of a Public Nature (Washington, 1834–1849). description ends , X, 763–66.

4Used in this context a sponge is a method or process for wiping off indebtedness without payment. See the introductory note to “Report Relative to a Provision for the Support of Public Credit,” January 9, 1790.

6For the portion of Jefferson’s annual message to Congress on December 8, 1801, relevant to H’s discussion in this paragraph, see “The Examination Number I,” December 17, 1801, note 1.

7For Jefferson’s views on fortifications presented in his annual message to Congress, December 8, 1801, see “The Examination Number I,” December 17, 1801, note 1.

8Article I, Section 8.

9See “An Act imposing duties on the tonnage of ships or vessels” (1 Stat. description begins The Public Statutes at Large of the United States of America, I (Boston, 1845). description ends 135–36 [July 20, 1790]).

Authorial notes

[The following note(s) appeared in the margins or otherwise outside the text flow in the original source, and have been moved here for purposes of the digital edition.]

* One of the essential principles of government, is, “the honest payment of our debts and sacred preservation of the public faith.”—Inaugural Speech.3

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