APPORTIONMENT OF DEBT. the payment of the interest and principal of the public debt solely, and term of the act was limited to twentyfive years. The collectors of the revenues were to be appointed by the States, subject to removal by Congress. In addition the various States were requested to enact laws covering the same period of time and for the same object, so as to derive sufficient revenues to supply their proportion of $1,500,000 annually, exclusive of duties on imports, the proportion due from each State being fixed in accordance with the Articles of Confederation.† Up to this time the expenses of the government had never been apportioned among the States, in accordance with the rule prescribed by the Confederation. As yet no satisfactory valuation of houses and lands had been made as the difficulties of securing the necessary information seemed almost insuperable. Previously the proportions had been regulated according to the supposed num * Curtis, Constitutional History, vol. i., p. 118. Journals of Congress, Feb. 12, 1783, p. 126; March 20, pp. 154, 157, 158, 160; April 18, pp. 185-189; Marshall, Life of Washington, vol. v., pp. 35-36; Pitkin, Civil and Political History, vol. ii., pp. 180-181; Hunt, Life of Madison, pp. 38-43. This sum of $1,500,000 was apportioned among the States as follows: - New Hampshire, $52.708; Massachusetts, $224,427; Rhode Island, $32,318; Connecticut, $132,091; New York, $128,242; New Jersey, $83,358; Pennsylvania, $205,189; Delaware, $22,443; Maryland, $141,517; Virginia, $256,487; North Carolina, $109,006; South Carolina, $96,183; Georgia, $16,030. the opposition of Rhode Island to this measure, see Bates, Rhode Island and the Formation of the Union, p. 90 et seq. For 353 ber of inhabitants in each State. To remedy these conditions, Congress now proposed that the Articles be altered so that the proportions would be more equitable. The proposition. of Congress was that the proportion should be governed by the number of white and other free citizens, including those bound to servitude for a term of years, and three-fifths of all other persons. In order to secure the consent of the States to this change, Congress presented an address to the various legislatures, which had been prepared by Madison, Hamilton and Ellsworth.* The object of this revenue system was to give justice to all the creditors of the United States. It was a wise and judicious movement, but the scheme was never adopted, although, as Mr. Curtis points out,† it had a remarkable effect in saving the Union from speedy dissolution, and in directing the attention of the States to the fact that a powerful central government was a great desideratum. While this revenue system was under consideration, Congress was still struggling with the finances. About the only thing that could be done was to issue requisitions upon the States, but these continued to be evaded, From November 1, 1781, to January 1, 1786, the requisitions for the payment of interest on the domestic debt had amounted to $10,000,000, yet, *Curtis, Constitutional History, vol. i., p. 142 et seq. ↑ Constitutional History, vol. i., pp. 124-126. 354 THE DEBT AND PLANS TO LIQUIDATE IT. according to the reports of the Treas- At the beginning of 1783 the domestic debt of the country was $34,115,290, and the foreign debt $7,885,085, making a total of $42,000,375, on which the annual interest was $2,415,956. Of the foreign debt $7,037, McMaster, United States, vol. i., pp. 356-357. See the Report of the Committee in Journals of Congress, February 15, 1786, vol. xi., pp. 34-40. See also Curtis, Constitutional History, vol. i., p. 164; J. P. Gordy, Political History of the United States, vol. i., p. 35. Curtis, Constitutional History, vol. i., p. 115; McMaster, United States, vol. i., p. 356. McMaster's dates and figures are evidently wrong. He says the debt in 1786 was $42,000,325, of which $7,885,035 was owed abroad, but he gives the interest the same. Curtis' figures of the foreign debt do not bring the total as given by him. The figures as given by the Committee under date of 037 was due in France; $671,000 in April 8, 1783, bring the total domestic debt to $26,615,290. See Hunt's ed. of Madison's Writings, vol. i., p. 443. Charles J. Bullock, Finances of the United States, 1775-1789, with Especial Reference to the Budget, pp. 145, note, 181 (in University of Wisconsin Bulletins in Economics, Political Science and History, series i., no. 2. For some of the arguments for and against it see McMaster, vol. i., pp. 145-147, 266-267; Bancroft, vol. iv., pp. 185-193. REPORT OF COMMITTEE ON FINANCES. sented to all the requests of Congress; Massachusetts granted the general impost, but withheld the supplementary funds, as did New Hampshire, Connecticut, New Jersey, Virginia, South Carolina, and Pennsylvania, but the last named stipulated that she would collect these moneys as the legislature saw fit. New York, Rhode Island, Maryland, and Georgia at first refused to sanction the proposed revenue system, as they were unwilling that the national treasury should receive the sums collected at New York, Providence, Baltimore and Savannah, to the exclusion of the State treasuries.* Congress therefore appointed a committee to examine into the state of the finances and report on the best method by which the debt might be discharged. The report of this committee recommended the impost as the most feasible plan and earnestly advised those States which had not already consented to yield at once. A new committee of five was appointed to consider the matter, and the report of this committee was presented by Rufus King, February 15, 1786. In this report King said that the system of imposts was the best system of collecting revenue that Congress could devise and that the States should adopt it at once. He further * McMaster, United States, vol. i., p. 357; Bates, Rhode Island and the Formation of the Union, pp. 96-99; McLaughlin, The Confederation and the Constitution, p. 80; Curtis, Constitutional History, vol. i., P. 194. 355 said that "the requisitions of Congress. for eight years past have been so irregular in their operations, so uncertain in their collection, and so evidently unproductive, that a reliance on them in future, as a source from whence moneys are to be drawn to discharge the engagements of the Confederacy, definite as they are in time and amount, would be no less dishonorable to the understandings of those who entertained such confidence, than it would be dangerous to the welfare and peace of the Union. The Committee are therefore seriously impressed with the indispensable obligation that Congress are under, of representing to the immediate and impartial consideration of the several states the utter impossibility of maintaining and preserving the faith of the federal government, by temporary requisitions on the states, and the consequent necessity of an early and complete accession of all the states to the revenue system of the 18th of April, 1783." The Committee said also: "It has become the duty of Congress to declare most explicitly, that the crisis has arrived, when the people of these United States, by whose will and for whose benefit the federal government was instituted, must decide whether they will support their rank as a nation, by maintaining the public faith at home and abroad; or whether, for want of a timely exertion in establishing a general revenue and thereby giving strength to the confederacy, 356 CONFLICTING STATE LAWS; ACTION OF NEW JERSEY. they will hazard not only the existence of the Union, but of those great and invaluable privileges for which they have so arduously and so honorably contended."* This report was adopted and a set of resolutions drawn up and passed. This The House then turned its attention to the regulation of trade, and a committee was appointed to examine the acts of the various States. committee reported that the acts were confusing and conflicting and clogged with many restrictive conditions. † North Carolina, while assenting to all the requests of Congress, had made a condition that, when the other twelve States did likewise, the regulation of trade by Congress should become an article of the Confederation. Connecticut, Pennsylvania, and Maryland set a date when the act was to become effective; Rhode Island restricted the duration of the act to twenty-five years; Massachusetts, New York, New Jersey, and Virginia would not consent to have the act go into operation within their borders until it had been adopted by all. Delaware, South Carolina, and Georgia had not given the request any consideration; and New New Hampshire determined the manner in which the * Journals of Congress, vol. xi., pp. 34-40. † As Madison said: "The States are every day giving proofs that separate regulations are more likely to set them by the ears than to attain the common object."- Hunt's ed. of Madison's Writings, vol. ii., p. 227. See also Story, Commentaries on the Constitution, vol. i., pp. 184-185 (5th ed.). act should be enforced, granting the power to regulate trade by restrictions on duties.* Congress therefore asked the States to make the various laws uniform.t New Jersey now became disgruntled and refused to pay her share of the requisition of $3,000,000 made in September, 1785, claiming that the levy was unjust and that the Confederation was not protecting her from the encroachments and the ill-usage of New York. As New Jersey's share of the requisition was $166,716, Congress could not afford to lose it; for even if the sum were paid, there would still be a deficit. So a committee, of which Nathaniel Gorham, William Grayson and Charles Pinckney were members, was sent by Congress to expostulate with the Legislature of New Jersey, Pinckney making the principal speech. As a result of the visit, New Jersey rescinded her acts refusing to pay her quota, but she instituted no measures to provide funds to meet the requisitions, nor was such action taken until five months later.‡ Meanwhile New York had granted the impost. This was due principally. to the efforts of Alexander Hamilton. He drew up a petition to the Legislature declaring that all the motives of public honor and reputation demanded that New York act favor NEW YORK AND THE IMPOST; THE COINAGE. ably.* He induced large numbers to sign the petition; wrote pamphlets in favor of the impost; and advocated Governor George it in the press. Clinton, however, had used all his influence and ability to make New York the richest and the most powerful State in the country; and, considering that the impost would drag the State down to the level of the others, he labored mightily to have the Legislature refuse assent to the act. But on May 4, 1786, after much debate, the Legislature passed the act, though a clause was inserted which made the grant of the impost practically useless; for, instead of vesting Congress with the power of levying the duties, this right was reserved to the State itself. The Legislature also made a condition that the collectors of the duty should be appointed by the State and should not be amenable to Congress. † Thereupon, when considering this matter in August, Congress determined to have the State amend the act, and, as the Legislature had adjourned, sent a request to Clinton to call a special session. On August On August 16 Clinton replied that, according to the Constitution of New York, he could convene the Legislature only on "extraordinary occasions "; and as the present business had often been before the Assembly during the late session, he did not consider that * Hamilton's ed. of Hamilton's Works, vol. ii., pp. 333-334. † McMaster, United States, vol. i., pp. 368–370. an 357 "extraordinary occasion'' existed. Later, in August, Congress sent him a second and more earnest application to reconvene the Legislature, but he made the same reply. In the early part of 1787 the matter was again taken up by the Legislature, but on February 15, despite the endeavors of Hamilton to secure its passage, the measure was thrown out by a vote of 36 to 21.† There had been much discussion also in connection with the founding of a system of national coinage. As previously stated, coins of the same denomination were differently valued in the various colonies and there was also a large variety of coins, which, except coppers, were the product of foreign mints, including English guineas, crowns, shillings, and pence, and many French and Spanish and some German coins. Of the Spanish coins, probably the most valuable in general circulation, was the Johannes, called the "Joe," valued at about $16; next came the doubloon at $15; then the half-joe at $8; the double Spanish pistole at $7, and the pistole at half that value. Other gold coins were the moidore at $6; the English guinea and half-guinea, the French guinea, the Carolin, the five and two and one-half moidore, the double Johannes, the Chequin, the quarter and eighth Johannes, and the French pistole. The silver coins * Bancroft, vol. vi., pp. 193-194; McMaster, p. 370. † McMaster, p. 398. |