Alexander Hamilton Papers

Report on the Public Debt and Loans, 23 January 1792

Report on the Public Debt and Loans1

Treasury Department January 23d 1792.
[Communicated on February 7, 1792]2

[To the Speaker of the House of Representatives]

Pursuant to the order of the House of Representatives of the first of November 1791, directing the Secretary of the Treasury, “to report to the House the amount of the Subscriptions to the loans proposed by the act making provision for the Public Debt,3 as well in the debts of the respective States as in the domestic debt of the United States, and of the parts which remain unsubscribed, together with such measures as are, in his opinion, expedient to be taken on the subject”:4 the said Secretary respectfully submits the following Report:

I. The whole amount of the domestic debt of the United States, Principal and Interest, which has been subscribed to the Loan proposed concerning that debt, by the Act intitled “An Act making provision for the debt of the United States,” according to the Statement herewith transmitted marked A and subject to the observations Cts
accompanying that Statement is Dollars 31,797,481.22
which, pursuant to the terms of that Act, has been converted into Stock bearing an immediate interest of 6 per Cent: per Annum 14,177,450.43
Stock bearing the like interest from the first of January 1801 7,088,727.79
Stock bearing an immediate interest of 3 per Cent per Annum 10,531,303.--
making together Dollars 31,797,481.22
of which there stands to the credit of the Trustees
of the sinking fund, in consequence of purchases Cents
of the Public Debt made under their direction the sum of Dollars 1,131,364.76
The unsubscribed residue of the said Debt, according to the statements herewith transmitted marked B & C and subject to the observations accompanying the statement C appears to amount to Dollars Cents
  10,616,604.65
consisting of Registered Debt, Principal & Interest 6,795,815.26
  Unsubscribed Stock on the books
of the Commissioners of Loans for
New Jersey, Pennsylvania and
Maryland, Principal & Interest
}
15,674.62
  Credits on the books of the Treasury
for which no certificates have
issued, Principal & Interest
}
107,648.63
  Outstanding or floating evidences
of Debt estimated per Statement C at
}
  3,697,466.14
making together Dollars
  10,616,604.65

concerning which some further arrangement is necessary.

The greatest part of the registered Debt, hitherto unsubscribed, is owned by the Citizens of foreign countries, most, if not all of whom appear now disposed to embrace the terms held out by the act abovementioned; extensive orders having been received from those creditors, to subscribe to the Loan, after the time for receiving subscriptions had elapsed.

A considerable part of the outstanding or floating debt, consists of Loan Office Certificates issued between the first of September 1777 and the first of March 1778, bearing interest on the nominal sum. Many of the holders of this species of debt have come in upon the terms of the act, but others have hitherto declined it; alledging, that the special nature of their contract gives a peculiarity to their case, and renders the commutation proposed not so fair an equivalent to them, as in other instances. They also complain, that the act has had, towards them, a compulsory aspect, by refusing the temporary payment of interest, unless they should exchange their old for new certificates, essentially varying the nature of their contract.

A resolution of Congress of the tenth of September 17775 stipulates in favour of this class of creditors, interest upon the nominal, instead of the real principal of their debt, until that principal be discharged.6 This certainly renders their contract of a nature more beneficial than that of other creditors; but they are at the same time liable to be divested of the extra-benefit it gives them, by a payment of their Specie-dues; and it may be observed, that they have actually enjoyed, and by accepting the terms offered to them were enabled to realise, advantages superior to other creditors. They have been paid interest by bills on France, from the tenth of September 1777 to the first of March 1782, while other creditors received their interest in depreciated bills of the old emissions; and the terms of the loan proposed put it in their power to realise the benefit of interest on the nominal amount of their respective debts at rates from 6 20/100 nearly to 10 47/100 per cent on their real or specie capital down to the last of December 1790.7

It does not therefore appear to have been an unreasonable expectation, that they, as readily as any other description of public creditors, would have acquiesced in a measure, calculated for the accommodation of the Government, under circumstances, in respect to which, it has been demonstrated by subsequent events that the accommodation desired was consistent with the best interest of the public creditors.8 A large proportion of the parties interested have indeed viewed the matter in this light, and have embraced the proposition. It is probable, that the progress of things will satisfy the remainder, that it is equally their interest to concur; if a further opportunity be afforded. But it is, nevertheless, for themselves only to judge, how far the equivalent proposed is, in their case, a reasonable and fair one; how far any circumstances in their claim may suggest reasons for moderation on their part; or how far any other motives, public or private, ought to induce an acceptance. And the principles of good faith require, that their election should be free.

On this ground, the complaint which regards the withholding of a temporary payment of interest, except on the condition of a surrender of the old certificates for new ones importing a contract substantially different, appears to the Secretary not destitute of foundation.9 He presumes, that the operation of that provision, in the particular case was not adverted to; or, that an exception would have been introduced as most consonant with the general spirit and design of the Act. Accordingly, the further measures which will be submitted, will contemplate a method of obviating the objection in question.

From the consideration, that an extension of the time for receiving subscriptions, upon the terms of the Act making provision for the Debt of the United States, is desired by a large proportion of the non-subscribing creditors, and from the further consideration, that sufficient experience has not yet been had of the productiveness of a considerable branch of the Revenues which have been established, to afford the light necessary to a final arrangement—It is, in the judgment of the Secretary, adviseable, to renew the proposition for a loan in the Domestic Debt, on the same terms with the one which has been closed, and to allow time for receiving subscriptions to it until the last day of September next inclusively; making provision for the temporary payment of interest to such who may not think fit to subscribe, for the year 1792, of the like nature with that which was made in the same case for the year 1791—Except as to the holders of Loan Office Certificates, issued between the first of September 1777 and the first of March 1778; in respect to whom it is submitted as proper to dispense with the obligation of exchanging their old certificates for new, as the condition of their receiving interest in capacity of non-subscribers; and to allow them, without such exchange, to receive the same interest, both for the year 1791 & 1792 as if they had subscribed to the first Loan. It will not be materially difficult, so to regulate the operation at the Treasury as to avoid in the particular case, that danger of imposition by counterfeits, which was the motive to the general provision for an exchange of certificates.10

II. The amount of the subscriptions in the debts of the respective States, within the limits of the sum assumed in each, appears by the statement marked D to be Dollars 17,072,334.39 Cents, subject to the observations accompanying that statement. Consequently the difference between the aggregate of the sums subscribed, and the aggregate of the sums assumed, is Dollars 4,427,665.61 Cents. This difference is to be attributed to several causes; the principal of which are the following. First; That the sums assumed in respect to certain States exceeded the actual amount of their existing debts. Second; That in various instances, a part of the existing debt was in a form which excluded it from being received, without contravening particular provisions of the Law; as in the case of certificates issued after the first day of January 1790 in lieu of certificates which had been issued prior to that period, which was reported upon by the Secretary on the twenty fifth day of february last.11 Third; Ignorance of, or inattention to the limitation of time for receiving subscriptions. It appears, that a number of persons lost the opportunity of subscribing from the one or the other of these causes.

A strong desire that a further opportunity may be afforded for subscriptions in the debts of the States, has been manifested by the Individuals interested. And the States of Rhode Island12 and New Hampshire,13 have, by the public Acts referred to the Secretary, indicated a similar desire. The affording of such further opportunity, may either be restricted within the limit, as to amount, which is contemplated by the Act itself; or may receive an extension which will embrace the residuary debts of the States.

The first may be considered as nothing more than giving full effect to a measure already adopted.

The last appears to have in its favour all the leading inducements to what has been already done. The embarassments which might arise from conflicting systems of finance are not entirely obviated. The efficacious command of the National resources for National exigencies is not unequivocally secured. The equalizing of the condition of the citizens of every State, and exonerating those of the States most indebted, from partial burthens which would press upon them in consequence of exertions in a common cause, is not completely fulfilled, until the entire debt of every State, contracted in relation to the war is embraced in one general and comprehensive plan.14 The inconvenience to the United States of disburthening the States, which are still incumbered with considerable debts, would bear no proportion to the inconvenience which they would feel, if left to struggle with those debts, unaided.

More general contentment, therefore, in the public mind, may be expected to attend such an exoneration, than the reverse; in proportion as the experience of actual inconvenience would be greater, though only applicable to parts, in the one, than in the other case.15

With regard to States, parts only of the debts of which have been assumed, and in proportions short of those, which have prevailed, in favour of other states, and short also of what would have resulted from a due apportionment of the entire sum assumed; the claim to a further assumption is founded on considerations of equal justice, as relative to the measure itself, considered in a separate and independent light.

But there is a further reason of material weight for an immediate general assumption. Monied men, as well foreigners as citizens, through the expectation of an eventual assumption, or that in some shape or other a substantial provision will be made for the unassumed residue of the State Debts, will be induced to speculate in the purchase of them. In proportion as the event is unsettled, or uncertain, the price of the article will be low, and the present proprietors will be under disadvantage in the sale. The loss to them in favour of the purchasers is to be regarded as an evil; and as far as it is connected with a transfer to foreigners, at an undervalue, it will be a national evil. By whatsoever authority an ultimate provision may be made, there will be an absolute loss to the community equal to the total amount of such undervalue.

It may appear an objection to the measure, that it will require an establishment of additional funds by the Government of the United States. But this does not seem to be a necessary consequence. The probability is, that without a supplementary assumption, an equal or very nearly equal augmentation of funds will be requisite to provide for greater balances in favour of certain States; which would be proportionably diminished by such assumption. The destination, not the quantum of the fund, will therefore be the chief distinction between the two cases.16

It may also appear an objection to a total assumption, that the magnitude of the object is not ascertained with precision. It is not certainly known, what is the sum due in each State; nor has it been possible to acquire the information, owing to different causes. But though precise data are deficient, there are materials which will serve as guides. From the returns received at the Treasury, assisted by information in other ways, it may be stated without danger of material error—That the remaining debts of the States over and above the sums already subscribed will not exceed the amounts specified in the statement D accompanying this report17—And that, including the sums already subscribed, the total amount to be ultimately provided for, in the event of a general assumption, will not exceed 25,403,362 ⁷¹⁄₁₀₀ Dollars, which would constitute an addition of 3,903,362, ⁷¹⁄₁₀₀ Dollars to the sum of 21,500,000 Dollars already assumed.18

Should a total assumption be deemed eligible, it may still be adviseable to assign a determinate sum for each State, that the utmost limit of the operation may be preestablished; and it is necessary in order to the certainty of a due provision in proper time, that interest should not begin to be payable, on the additional ⟨sums⟩19 assumed, till after the year 1792.20

⟨It will oc⟩cur, that provision has been made, for paying to eac⟨h St⟩ate, in trust for its non-subscribing creditors, an interest upon the difference, between the sum assumed for such State, and that actually subscribed, equal to what would have been payable, if it had been subscribed.

In the event of a further assumption, either within the limits already established, or commensurate with the remaining debts of the States, it is conceived, that it will not be incompatible with the provision just mentioned, to retain, at the end of each quarter, during the progress of the further subscription, out of the money directed to be paid to each State, a sum corresponding with the interest upon so much of its debts as shall have been subscribed to that period, paying the overplus, if any, to the State. An absolute suspension of that payment does not appear consistent with the nature of the stipulation, included in that provision; for though the money to be paid to a State be expressly a trust for the nonsubscribing creditors; yet as it cannot be certain beforehand, that they will elect to change their condition, the possibility of it, will not justify a suspension of payment to the State, wh⟨ich⟩ might operate as a suspension of payment to ⟨the creditors⟩ themselves.

A further ob⟨ject⟩ion to such a suspension results from the idea, that the provision in question appears to have a secondary object; namely, as a pledge for securing a provision for whatever balance may be found due to a State on the general settlement of accounts. The payment directed to be made to a State, is “to continue until there shall be a settlement of accounts between the United States and the Individual States, and in case a balance should then appear in favour of a State, until provision shall be made for the said balance.”21

This secondary operation as a pledge or security (consistently with the intent of the funding Act) can only be superseded in favour of the primary object, a provision for the creditors; and as far as may be necessary to admit them to an effectual participation of it.22 But as whatever money may be paid to a State, is to be paid over to its creditors, proportional deductions may, with propriety, be made from the debts of those Creditors who may hereafter subscribe; so as that the United States may not have to pay twice for the same purpose.

If it shall be judged expedient, either to open ag⟨ain, or exte⟩nd the assumption, it will be necessary to vary the description of the debts, which may be subscribed, so as to comprehend all those, which have relation to services or supplies during the war, under such restrictions as are requisite to guard against abuse.

In the original proposition for an assumption of the State Debts, and in the suggestions now made on the same subject, the Secretary has contemplated, and still contemplates, as a material part of the plan, an effectual provision, for the sale of the vacant lands of the United States. He has considered this resource, as an important mean of sinking a part of the debt, and facilitating ultimate arrangements concerning the residue. If supplementary funds shall be rendered necessary, by an additional assumption, the provision will most conveniently be made, at the next session of Congress, when the productiveness of the existing revenues, and the extent of the sum to be provided for, will be better ascertained.

[III]23 There is a part of the public Debt of the United States, which is a cause of some perplexity to the Treasury. ⟨It is⟩ not comprehended within the existing p⟨rovis⟩ion for the foreign debt, which is confined to Loans made abroad; and it is questionable, whether it is to be regarded as a portion of the Domestic Debt. It is not only due to foreigners, but the interest upon it is payable, by express stipulation, in a foreign country, whence it becomes a matter of doubt, whether it be at all contemplated by the Act making provision for the debt of the United States. The part alluded to is that, which is due to certain foreign Officers, who served the United States during the late war. In consequence of a resolution of Congress, directing their interest to be paid to them in France,24 the certificates which were issued to them specify, that “in pursuance of and compliance with a certain resolution of Congress of the third day of February 1784, the said interest is to be paid, annually, at the House of Monsr. le Grand, Banker in Paris”. Interest has accordingly been paid to them at Paris, down to the 31st of December 1788 by virtue of a special resolution of Congress of the 20th. of August in that year;25 since which period, no payment has been made.

It has been heretofore suggested, as the opinion of the Secretary, that it would be expedient to cause the whole of this description of debt to be paid off, among other ⟨re⟩asons, because it bears an interest at six per centum per annum, payable abroad, and can be discharged with a saving. The other reasons alluded to are of a nature both weighty and delicate, and too obvious, it is presumed, to need a specification. Some recent circumstances have served to strengthen the inducements to the measure. But if it should, finally, be deemed unadviseable, it is necessary, at least, that provision should be made for the interest, which is now suspended, under the doubt that has been stated, and from the want of authority to remit it pursuant to the contract.

The amount of this debt, with the arrears of interest to the end of the year 1791 is Dollars 220,646 ⁸¹⁄₁₀₀26

IV. The Act making provision for the Debt of the United States27 has appropriated the proceeds of the Western Lands as a fund for the discharge of the public debt. And the Act making provision for the reduction of the public debt,28 has appropriated all the surplus of the duties on Imports and Tonnage, to the end of the year 1790, to the purpose of purchasing the debt at the market price; and has authorised the President to borrow the further sum of Two Millions of Dollars for the same object.

These measures serve to indicate the intention of the Legislature, as early and as fast as possible, to provide for the extinguishment of the existing debt.

In pursuance of that intention, it appears adviseable, that a systematic plan should be begun for the creation and establishment of a sinking fund.

An obvious basis of this establishment, which may be immediately contemplated, is the amount of the interest on so much of the debt as has been or shall be, from time to time, purchased, or paid off, or received in discharge of any debt or demand of the United States, made payable in public securities—over and above the interest of any new debt, which may be created, in order to such purchase or payment.

The purchases of the debt already made have left a sum of interest in the Treasury, which will be increased by future purchases—certain sums payable to the United States in their own securities, will, when received, have a similar effect. And there is ground to calculate on a saving upon the operations, which are in execution with regard to the foreign debt. The sale of the Western Lands, when provision shall be made for it, may be expected to produce a material addition to such a fund.

It is therefore submitted, that it be adopted as a principle, that all interest which shall have ceased to be payable; by any of the means above specified, shall be set apart and appropriated in the most firm and inviolable manner, as a fund for sinking the public debt, by purchase or payment; and that the said fund be placed under the direction of the officers, named in the second section of the Act making provision for the Reduction of the public debt,29 to be by them applied towards the purchase of the said debt, until the annual produce of the said fund shall amount to two per Cent. of the intire portion of the debt which bears a present interest of six per Centum, and thenceforth to be applied, towards the redemption of that portion of the debt, according to the right which has been reserved to the Government.

It will deserve the consideration of the Legislature, whether this fund ought not to be so vested, as to acquire the nature & quality of a proprietary Trust, incapable of being diverted, without a violation of the principles and sanctions of property.30

A rapid accumulation of this fund would arise from its own operation; but it is not doubted, that the progressive developement of the resources of the country and a reduction of the rate of interest, by the progress of public credit, already exemplified in a considerable degree, will speedily enable the Government to make important additions to it, in various ways. With due attention to preserve order and cultivate peace, a strong expectation may be indulged, that a reduction of the debt of the Country will keep pace with the reasonable hopes of its citizens.

All which is humbly submitted31

Alexander Hamilton
Secretary of the Treasury

DS, RG 233, Reports of the Secretary of the Treasury, Second Congress, National Archives; ADf, Hamilton Papers, Library of Congress; Df, partly in the handwriting of H, Hamilton Papers, Library of Congress; copy, RG 233, Reports of the Treasury Department, 1791–1792, Vol. II, National Archives; copy, RG 39, Reports of Congress, Clerk’s Table, 1791–1792, National Archives.

1Neither the first draft, which is in H’s handwriting, nor the second draft, which is partly in H’s handwriting, has been printed. Substantive differences between the drafts and the final version have, however, been indicated in the footnotes.

2Journal of the House, I description begins Journal of the House of Representatives of the United States (Washington, 1826), I. description ends , 503. The communicating letter, dated February 6, 1792, may be found in RG 233, Reports of the Treasury Department, 1791–1792, Vol. II, National Archives

3Provision for the debts of the United States was made by “An Act making provision for the (payment of the) Debt of the United States” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 138–44 [August 4, 1790]) and by “An Act making Provision for the Reduction of the Public Debt” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 186–87 [August 12, 1790]), which established the sinking fund.

4Journal of the House, I description begins Journal of the House of Representatives of the United States (Washington, 1826), I. description ends , 445. This report was debated during March, 1792, and on May 8, 1792, a law concerning the questions raised by this report was passed. See “An Act supplementary to the act making provision for the Debt of the United States” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 281–83).

5The resolution of the Continental Congress to which H is referring reads as follows: “Resolved, That the interest which shall arise after the date of this resolution on loan office certificates already issued, or which shall be issued before the 1st day of March next, be annually paid at the respective loan offices, in bills of exchange on the commissioners of the United States in Paris, at the rate of five livres of France for every Spanish milled dollar due for interest as aforesaid, or in continental bills of credit, at the option of the respective lenders” (JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , VIII, 730–31).

6At this point in the first draft the following sentence appears: “It is true that there is a peculiar ⟨–⟩ in the situation of this class of Creditors; as it respects the nature of their contract; but it is also true that they have enjoyed and in accepting the terms offered would have realized peculiar advantages.”

7At this point in the first draft H wrote and then crossed out the following paragraphs:

“It would be improper to inquire now whether the determination originally made in favour of this class of Creditors was justified by sufficient reasons or otherwise. Respect for an act of Government claims a presumption that it was; unless the contrary were manifest. And the principles of good faith would require at any rate that what has been done should remain unimpaired. Nor is it for any but the parties themselves to judge whether they ought to accept, as an equivalent for their present contract, the terms which were proposed to them.

“It may however without impropriety be observed that considering the superiority of advantages which they have enjoyed and would have realized now in the very act of accepting the forms which were proposed. Under such circumstances It was not unreasonable to have entertained.”

8The material which is printed for the remainder of this paragraph appears on a separate sheet of paper in the first draft and was copied for the second draft. In the margin of the first draft at this point, however, H wrote the following sentences, which he marked for insertion: “But it nevertheless be left to themselves to judge whether it was, & if the proposition be renewed, whether it will be their interest to accept the terms proffered as an equivalent for the (existing) Contract. And the principles of good faith require that their election should be free.”

9In the margin in the second draft opposite this point H wrote and crossed out the following material: “however little room there may have been under all the circumstances to have expected that a complaint of that nature would have been strenuously urged.”

On October 27, 1791, in the Senate “The Memorial of John Nixon and Others, a committee on behalf of certain creditors of the United States was read, requesting that an appropriation may be made for the payment of the arrears of their interest and the annual interest accruing” (Annals of Congress, I 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 II, 16).

10In the first draft at this point H wrote and crossed out the following paragraph: “But as it is desireable to decide the nonsubscribing Creditors on a final election whether to remain non subscribers or to become subscribers, it is submitted as expedient to incorporate a provision in the act which shall be passed that any who may receive a payment of interest as Nonscribers pursuant to that act shall be deemed to have made their election and shall be precluded from a right afterwards to subscribe.”

11Report not found.

12On January 4, 1792, “A memorial of the Legislature of the State of Rhode Island was presented to the House and read, representing the injuries they are subject to from the operation of an act of Congress relative to the assumption of the State debts, and praying a farther assumption of the debt of that State.

Ordered, That the said memorial be referred to the Secretary of the Treasury, for his information.” (Journal of the House, I description begins Journal of the House of Representatives of the United States (Washington, 1826), I. description ends , 486–87.)

13On December 28, 1791, “A memorial of the Legislature of the State of New Hampshire was presented to the House and read, representing the inequality and injustice of a late act of Congress for the assumption of the State debts, and praying that the inequalities thereof may be removed, or the injuries and burthens thereby occasioned to the said State redressed in such other way as the wisdom of Congress shall deem expedient.

Ordered, That the said memorial be referred to the Secretary of the Treasury, for his information.” (Journal of the House, I description begins Journal of the House of Representatives of the United States (Washington, 1826), I. description ends , 481–82.)

14At this point in the first draft H wrote and then crossed out the following paragraphs:

“The states upon which the heaviest burthens would still rest, Massachusettes and South Carolina were certainly among the foremost in exertion during the late war—the latter was second to none in suffering. Georgia also so much and so often the scene of depredation and distress has a considerable debt which must either incumber her beyond her ability or perish in the hands of her citizens.

“There appears to be no comparison between the inconvenience to the United States of exonerating the States which are still incumbered with debt from their remaining burthens and the inconvenience which their citizens must sustain if left to struggle with them unaided. The reflections too, which may be expected to arise in their minds when they not only see the citizens of other states exempt from burthens which they endure; but the governments of some of those States drawing considerable supplies from the National Treasury for their particular use, and when they indulge the consciousness that this disparity of situation has not been occasioned by any defect of effort on their part—cannot be of a nature to promote the harmony and mutual affection or to fortify the confidence which it is desireable to cultivate between all the parts of the Union. With regard to any state the debt of which may have been only partially assumed, and that too in a proportion not only short of what has been assumed for some other states but short also of a due proportion of the intire sum assumed, as has been the case in certain instances, the claim of exoneration, by a further assumption has particular force.

“The subsequent reflections of the Secretary have not weakened the strength of his original impression that a complete assumption of the debts of the particular states is a measure of sound policy and substantial justice.

“And the Reception which in the great body of the community has attended the measure as far as it has proceeded affords ground of assurance that the further prosecution of it to the necessary extent will concliliate the general suffrage.”

15At this point on both drafts H wrote the following sentence, which he deleted in the second draft: “The contrast would be strong, between the situation of certain parts of the Union, exempted from all burthens except those which they bore in common with their fellow citizens of every other part, and of certain other parts of the Union, which in addition to that exemption enjoyed the advantage of drawing from the National Treasury annually considerable sums for their particular use—when compared with the situation of other parts, which would not only be without the latter advantage but would add the weight of local and extraordinary burthens to their share of those which were common to all.”

16This and the preceding paragraph do not appear in the first draft. They were inserted in the second draft.

17In the first draft this sentence reads as follows: “From the returns formerly received at the Treasury and reported to the House of Representatives and from subsequent information in other ways, it may be stated without danger of material error that the sums already assumed for the states of New Jersey Pensylvania Delaware Maryland & North Carolina will cover the whole amount of their respective debts in some instances with an excess; and that the remaining Debts of the other states over and above the sums already assumed will not exceed the amounts specified in the statement accompanying this Report.” H revised this sentence in the second draft.

At this point the following paragraph appeared in the first draft and was crossed out in the second draft: “Deducting the probable amount of excesses in regard to some states, from that of deficiencies in regard to others, the additional sum to be provided for in case of a Total Assumption may be computed at  .”

18This sentence does not appear in the first draft. It was inserted in the second draft.

19Material within broken brackets has been taken from the second draft.

20At this point the following paragraph was crossed out in the first draft: “The payments which may in the mean time be made to any state pursuant to the   section of the Funding Act will of course be to be deducted proportionably from the sums subscribed unless the state shall consent to wave its agency for the Creditors & suffer the money which they are entitled to receive in trust to be reserved for their use.”

21H is referring to Section 17 of “An Act making provision for the (payment of the) Debt of the United States” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 143–44 [August 4, 1790]).

22This sentence and the preceding paragraph do not appear in the first draft. They were inserted in the second draft.

23Material within brackets has been taken from the second draft.

24On February 3, 1784, Congress “On the report of a committee,… Resolved, That the Superintendant of finance be, and he is hereby directed to take measures, as far as may be consistent with the finances of the United States, for remitting annually to the foreign officers of the late corps of engineers, the legionary corps lately commanded by Brigadier General Armand, to Major Segond and Captain Beaulieu, late of General Pulaski’s corps and to Captain Pontiere, late aid-de-camp to Baron Steuben, the interest of such sums as may remain due to them respectively, after the payments which shall have been made to them in consequence of the resolution of the 22d of January last” (JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , XXVI, 65–66).

25See JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , XXXIV, 443.

26The first draft ends at this point.

27See note 3.

28See note 3.

29Section 2 of “An Act making Provision for the Reduction of the Public Debt” provided that purchases of the public debt should be made under the direction of the president of the Senate, the Chief Justice, the Secretary of State, the Secretary of the Treasury, and the Attorney General (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 186).

30This paragraph does not appear in the second draft.

31The second draft ends at this point.

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