Notes on Debates, 30 January 1783
Notes on Debates
MS (LC: Madison Papers). For a description of the manuscript of Notes on Debates, see , V, 231–34.
The answer to the Memorials from the Legislature of Penna. was agreed to as it stands on the Journal; N. Jersey alone dissenting.1
In the course of its discussion several expressions were struck out which seemed to reprehend the States for the deficiency of their contributions. In favor of these expressions it was urged that they were true and ought to be held forth as the cause of the public difficulties in justification of Congress.2 On the other side it was urged tht. Congress had in many respects been faulty as well as the States, particularly in letting their finances become so disordered before they began to apply any remedy; and that if this were not the case, it would be more prudent to address to the States a picture of the public distresses & danger, than a Satire on their faults; since the latter would only irritate them; whereas the former wd. tend to lead them into the measures supposed by Congress to be essential to the public interest.
The propriety of mentioning to the Legislature of Penna. the expedt. into which Congress had been driven of drawing bills on Spain & Holland without previous warrant; the disappt. attending it, and the deductions ultimately ensuing from the aids destined to the U. S. by the Ct. of France, was also a subject of discussion. On one side it was represented as a fact which being dishonorable to Congress ought not to be proclaimed by them & that in the present case it cd. answer no purpose. On the other side it was contended that it was already known to all the world, that as a glaring proof of the public embarrassmts. it would impress the Legislature with the danger of making those separate appropriations which wd. increase the embarrassments;3 and particularly would explain in some degree the cause of the discontinuance of the French interest due on the loan office certificates.4
Mr. Rutlidge & some other members having expressed less solicitude about satisfying or soothing the Creditors within Pa. through the legislature than others thought ought be5 felt by every one, Mr. Wilson adverting to it with some warmth, declared that if such indifference should prevail, he was little anxious what became of the answer to the Memorials. Pena. he was persuaded would take her own measures without regard to those of Congress, and that she ought to do so. She was willing he said to sink or swim according to the common fate, but that she would not suffer herself with a millstone of *6,000,000 of the continl. debt about her neck to go to the bottom alone.6
1. The official journal for 30 January is confined wholly to the report, drafted by Thomas FitzSimons, of the committee with Daniel Carroll, chairman (, XXIV, 99–105, 105, n. 1). For the memorials of the Pennsylvania legislature and the appointment of the Carroll committee, see , V, 293–94; 294, n. 1; 362–64; 366, nn. 19, 23; 373; 389–90; 394; JM Notes, 24 Jan. 1783, and nn. 17, 19, 20. The tone of the present answer is much more conciliatory than that of 1 October 1782 to the legislature of New Jersey on behalf of her unpaid troops (, V, 173–75; 175, nn. 8, 11), a contrast which may account for the negative vote of the New Jersey delegation.
2. The inability of Congress to fulfill its pledge to purchasers of loan-office certificates was attributed in the report to the delinquency of the states in furnishing their financial quotas for 1782, to the refusal of three states to empower Congress to levy a duty on imports, and to the delay of every state with trans-Appalachian lands, except New York, to cede them to the Confederation on equitable terms. For the “several expressions” deleted from the report before it was adopted by Congress, see , XXIV, 100, 101–2.
3. , V, 20; 21, n. 4; 424, n. 9; 450, n. 5; 451, n. 14; JM Notes, 9–10 Jan., and nn. 12–14; Conference with Morris, 10 Jan., n. 5; JM to Randolph, 22 Jan. 1783, and n. 8.
4. Most of the latest loans and gifts from King Louis XVI of France necessarily had been used by Congress to buy military matérial overseas rather than to pay the interest due on loan-office certificates owned by residents of the United States. See JM Notes, 24 Jan. 1783, and n. 18. On 3 October 1776 Congress had decided to establish in each state an office for soliciting funds from individuals and business firms. In exchange, they received loan-office certificates, yielding 6 per cent interest annually, and varying in their denominations from $300 (later $200) to $1,000 (later $10,000). On 23 December of that year Congress authorized its commissioners “at the Court of France” to borrow £2,000,000 sterling, to be used in part for the payment of interest on these certificates (, V, 845–46; VI, 955, 1036–37; VII, 143; XV, 1225–26; XVII, 565). Beginning soon thereafter and continuing until 1782, bills of exchange for that purpose were drawn as a matter of routine on the commissioners in Paris, with the expectation that the bills would be honored by the royal treasury (, VIII, 730–31, XII, 1243; XVII, 689; XIX, 161–62, 164, 167–68).
In his report of 29 July 1782, rendered about a month after a congressional committee had proposed overconfidently to use the expected proceeds from the impost to pay the interest on the loan certificates, the superintendent of finance emphasized that there were no French funds for discharging that obligation and that “the idea which many entertain of soliciting Loans abroad to pay the Interest of domestic Debts, is a measure pregnant with its own destruction” (, XXII, 352, 438). Robert Morris also characterized the prevalent belief “that Foreigners will trust us with millions, while our own citizens will not trust us with a shilling” as “among the many extraordinary conceptions which have been produced during the present Revolution” (, XXII, 433). Of necessity, Congress on 9 September 1782 ordered him to instruct the loan officers to stop issuing bills of exchange for the interest due, or to come due, on certificates since 1 March of that year (, XXIII, 555). The next day Congress requisitioned the states for an extra $1,200,000 “as absolutely and immediately necessary for payment of the interest of the public debt” (, XXIII, 545, 564, 571; , V, 127; 129, n. 13). Thus, with the financial backing of France seemingly at an end, with the proposed impost amendment unratified, and with most of the states far in arrears in meeting their monetary quotas, the interest on the loan-office certificates was almost a year in default by the time of the present debate.
5. JM obviously omitted “to” between “ought” and “be.”
6. The exact amount owed on 30 January probably cannot be known. By 1 January 1783 the total loan-certificate debt was estimated to be $11,400,485.64⅛ specie by Morris. Although of this total the loan office for Pennsylvania had issued certificates worth $3,948,904.14⅛ specie, citizens of that state had also bought a large number of certificates from residents of other states (NA: PCC, No. 137, II, 205). James Wilson evidently estimated these outside purchases at over $2,000,000.
In view of the alarming decline in value of paper money, Congress on 28 June 1780 had established “a progressive rate of depreciation” providing that a forty-to-one ratio, in terms of Spanish milled dollars, should apply after 18 March of that year to continental currency offered for the loan certificates and to the interest paid to their owners (, XVII, 455–57, 567–69). See also JM Notes, 20 Feb. 1783, and nn. 6, 7.