Assumption of the State Debts
[2 March 1790]
Before the Committee of the Whole resumed consideration of JM’s amendment to the assumption resolution, White moved “that the secretary of the treasury be directed to ascertain the resources that may be applied to the payment of the state debts, provided they should be assumed by the United States.” Gerry objected to the motion as reflecting unfavorably on the secretary—”the house ought to consider the delicacy of his situation, and give him time.”
Mr. Madison Was sorry that the question of delicacy was drawn into the argument, as it was altogether foreign to it. It must be remembered that the secretary had included in his former report, an estimate of the expences of the civil list, which was defective to the amount reported by him this very day; yet there was not supposed to be any impropriety in requesting of him this additional report. Indeed the fact is, that the relation in which he stands to the government makes it necessary for his opinion to be asked on subjects relative to the administration of the finances. But, sir, if this proposition carried with it any imputation that he was deficient in abilities, or in industry, I should be the last man to support it, because I am well convinced the imputation would be flagrantly unjust. Whatever may be the importance affixed to it in gentlemen’s ideas, the propriety of having such a report cannot be called in question. Whenever a great undertaking is in contemplation, the means of carrying it into execution should be first examined. I venture to say, gentlemen will not find a precedent for a contrary conduct, either in the British house of commons, or any of the state legislatures. What then would be thought of this house, if we were to undertake a great expence, which we are not bound to undertake, without a previous enquiry into our ability? If, indeed, as is contended by the gentleman from Massachusetts, the state debts are binding on the United States by the same solemn ties as the foreign and domestic debt, perhaps we should not be censurable in declaring they were due by us, and that we would do every thing we could to discharge them, before we proceeded to the consideration of the ways and means; but there is a clear distinction between the two debts; and indeed, after what was said by those gentlemen on a former occasion, I must own that I was not a little surprized to hear it so positively asserted on this occasion, that there is no distinction whatever, between debts acknowledged to be due under the most formal contracts; and what are due according to their own most favorable construction in equity only. Is there a public creditor, of either class, that will deny the distinction? I am persuaded there is not one. This distinction being proved beyond the possibility of doubt, shews that we are to exercise our discretion in determining the question of assumption.
Gentlemen say that we run no risque in the case, because the debts are to be paid, if not by the United States, by particular states; and as the United States have all the resources, they can apply them with equal or superior convenience to the same object. I cannot admit this being a good reason against the present motion, any more than I could subscribe to its being an argument in favor of the assumption. For, beside what I stated before, it is to be observed that there are prejudices to be contended with, which some gentlemen think an argument of considerable weight.
In some parts of America, strong objections would not arise against a direct tax, for the purpose of paying the state debts; in other parts, an excise would be more agreeable than a direct tax; or a direct tax would be more acceptable from the hands of the state legislature, than an excise from the general government. Now, under these circumstances, if it was left to the state legislatures to make provision in the way most convenient to their constituents, the prejudices and jealousies which are so often mentioned on this floor would be removed or obviated, and more would be accomplished by the aid of the state governments than can be without them.
I really think it right and proper that we should be possessed of the ways and means, by which we should be most likely to encounter the debt before we undertake to assume it; nor do I see any inconvenience arising from pursuing this course: If the assumption is not to operate till two years hence, very little inconvenience, if any, can result from a previous investigation of the means.
Cong. Register description begins Thomas Lloyd, comp., The Congressional Register; or, History of the Proceedings and Debates of the First House of Representatives … (4 vols.; New York, 1789–90; Evans 22203–4, 22973–4). description ends , IV, 134–36. White’s motion carried after Speaker Muhlenberg’s tie-breaking vote.
[2 March 1790]
Ames asserted that those who supported JM’s amendment (which would greatly increase the amount of the state debts) acted inconsistently, for they had held that assumption was beyond the means of the federal government.
Mr. Madison Said he believed the government might, by encreasing the amount of the debt, encrease the ability of providing for it; for, in proportion as you make the debt equitable and satisfactory, you encrease the willingness of the people to bear the burthen, of consequence the government is better able to extend its provision for the payment. But how will the gentleman explain his own inconsistency in having voted to amend the amendment by the addition of the words principal or interest; he tells you that the insertion of the interest increased the debt twelve million, and yet he agreed to it; on what principal did he act?
Gentlemen have asked, is there any contract obliging us to provide for the debts redeemed by the states? I answer no: But I say justice demands that if you assume the debts yet due by particular states, you repay other states for the exertions they made to extinguish their debt.
Cong. Register description begins Thomas Lloyd, comp., The Congressional Register; or, History of the Proceedings and Debates of the First House of Representatives … (4 vols.; New York, 1789–90; Evans 22203–4, 22973–4). description ends , IV, 139. The amendment was defeated by a vote of 28 to 22.