In

of which would be a fatal bar to the establishment of national credit. stead of enlarging on these topics, two observations are submitted to the justice and wisdom of the legislatures. First, the present creditors, or rather the domestic part of them, having either made their loans for a period which has expired, or having become creditors, in the first instance, involuntarily, are entitled, on the clear principles of justice and good faith, to demand the principal of their credits, instead of accepting the annual interest. It is necessary, therefore, as the principal cannot be paid to them on demand, that the interest should be so effectually and satisfactorily secured, as to enable them, if they incline, to transfer their stock at its full value. Secondly, if the funds be so firmly constituted as to inspire a thorough and universal confidence, may it not be hoped that the capital of the domestic debt, which bears the high interest of six per cent., may be cancelled by other loans obtained at a more moderate interest? The saving by such an operation would be a clear one, and might be a considerable one.

Thus much for the interest of the national debt : for the discharge of the principal within the term limited, we rely on the natural increase of the revenue from commerce, on requisitions to be made from time to time for hat purpose, as circumstances may dictate, and on the prospect of vacant erritory. If these resources should prove inadequate, it will be necessary, at the expiration of twenty-five years, to continue the funds now recommended, or to establish such others as may then be found more convenient. With a view to the resource last mentioned, as well as to obviate disagreeable controversies and confusions, Congress have included in their present recommendations a renewal of those of the 6th day of September, and of the 10th day of October, 1780. In both these respects, a liberal and final accommodation of all interfering claims of vacant territory is an object which cannot be pressed with too much solicitude.

The last object recommended is a constitutional change of the rule by which a partition of the common burdens is to be made. The expediency, and even necessity, of such a change, has been sufficiently enforced by the local injustice and discontents which have proceeded from valuations of the soil in every state where the experiment has been made. But how infinitely must these evils be increased, on a comparison of such valuations among the states themselves! On whatever side, indeed, this rule be surveyed, the execution of it must be attended with the most serious difficulties. If the valuations be referred to the authorities of the several states, a general satisfaction is not to be hoped for. If they be executed by officers of the United States traversing the country for that purpose, besides the inequalities against which this mode would be no security, the expense would be both enormous and obnoxious. If the mode taken in the act of the 17th day of February last, which was deemed, on the whole, least objectionable, be adhered to, still the insufficiency of the data to the purpose to which they are to be applied must greatly impair, if not utterly destroy, all confidence in the accuracy of the result; not to mention that, as far as the result can be at all a just one, it will be indebted, for that advantage, to the principle on which the rule proposed to be substituted is founded. This rule, although not free from objections, is liable to fewer than any other that could be devised. The only material difficulty which attended it in the deliberations of Congress, was to fix the proper difference between the labor and industry of free inhabitants and of all other inhabitants. The ratio ultimately agreed

on was the effect of mutual concessions; and if it should be supposed not to correspond precisely with the fact, no doubt ought to be ente tained that an equal spirit of accommodation among the several legislatures will prevail against little inequalities which may be calculated on one side or on the other. But notwithstanding the confidence of Congress, as to the success of this proposition, it is their duty to recollect that the event may possibly disappoint them, and to request that measures may sill be pursued for obtaining and transmitting the information called for in the act of the 17th of February last, which, in such event, will be essential. The plan thus communicated and explained by Congress must now receive its fate from their constituents. All the objects comprised in it are conceived to be of great importance to the happiness of this confederated republic are necessary to render the fruits of the revolution a full reward for the bloo, the toils, the cares, and the calamities which have purchased it. But the object, of which the recessity will be peculiarly felt, and which it is peculiarly the duty of Congress to inculcate, is the provision recommended for the national debt. Although this debt is greater than could have been wished, it is still less, on the who.e, than could have been expected; and, when referred to the cause in which it has been incurred, and compared with the burdens which wars of ambition and of vain glory have entailed on other nations, ought to be borne not only with cheerfulness; but with pride. But the magnitude of the debt makes no part of the question. It is sufficient that the debt has been fairly contracted, and that justice and good faith demand that it should be fully discharged. Congress had an option betweeen different modes of discharging it. The same option is the only one that can exist with the states. The mode which has, after long and elaborate discussion, been preferred, is, we are persuaded, the least objectionable of any that would have been equal to the purpose. Under this persuasion, we call upon the justice and plighted faith of the several states to give it its proper effect, to reflect on the consequences of rejecting it, and to remember that Congress will not be answerable for them.

If other motives than that of justice could be requisite on this occasion, no nation could ever feel stronger; for to whom are the debts to be paid? To an ally, in the first place, who, to the exertion of his arms in support of our cause, has added the succors of his treasure; who, to his important loans, has added liberal donations; and whose loans themselves carry the impression of his magnanimity and friendship.

To individuals in a foreign country, in the next place, who were the first to give so precious a token of their confidence in our justice, and of their friendship for our cause, and who are members of a repu ic which was second in espousing our rank among nations.

Another class of creditors is that illustrious and patriotic band of fel low-citizens, whose blood and whose bravery have defended the liberties of their country; who have patiently borne, among other distresses, the privation of their stipends, whilst the distresses of their country disabled it from bestowing them; and who, even now, ask for no more than such a portion of their dues as will enable them to retire from the field of victory and glory into the bosom of peace and private citizenship, and for such effectual security, for the residue of their claims, as their country is now unquestionably able to provide.

The remaining class of creditors is composed partly of such of our fellow-citizens as originally lent to the public the use of their funds, or have

since manifested most confidence in their country, by receiving transfers from the lenders; and partly of those whose property has been either advanced or assumed for the public service. To discriminate the merits of these several descriptions of creditors, would be a task equally unnecessary and invidious. If the voice of humanity plead more loudly in favor of some than of others, the voice of policy, no less than of justice, pleads in favor of all. A wise nation will never permit those who relieve the wants of their country, or who rely most on its faith, its firmness, and its resources, when either of them is distrusted, to suffer by the event.

Let it be remembered, finally, that it has ever been the pride and boast of America, that the rights for which she contended were the rights of human nature. By the blessings of the Author of these rights on the means exerted for their defence, they have prevailed against all opposition, and form the basis of thirteen independent states. No instance has heretofore occurred, nor can any instance be expected hereafter to occur, in which the unadulterated forms of republican government can pretend to so fair an opportunity of justifying themselves by their fruits. In this view, the citizens of the United States are responsible for the greatest trust ever confided to a political society. If justice, good faith, honor, gratitude, and all the other qualities which ennoble the character of a nation, and fulfil the ends of government, be the fruits of our establishments, the cause of liberty will acquire a dignity and lustre which it has never yet enjoyed, and an example will be set which cannot but have the most favorable influence on the rights of mankind. If, on the other side, our governments should be unfortunately blotted with the reverse of these cardinal and essential virtues, the great cause which we have engaged to vindicate will be dishonored and betrayed, the last and fairest experiment in favor of the rights of human nature will be turned against them, and their patrons and friends exposed to be insulted and silenced by the votaries of tyranny and usurpation.

By order of the United States in Congress assembled.

PAPER NO. II.

REPLY TO THE RHODE ISLAND OBJECTIONS, TOUCHING IMPORT

DUTIES.

"By the United States in Congress assembled, December 16, 1782. "The committee, consisting of Mr. Hamilton, Mr. Madison, and Mr Fitzsimmons, to whom was referred the letter of 30th November, from the Honorable William Bradford, speaker of the lower house of Assembly of the state of Rhode Island, containing, under three heads, the reasons of that state for refusing their compliance with the recommendation of Congress for a duty on imports and prize goods, report,

"That they flatter themselves the state, on a reconsideration of the objections they have offered, with a candid attention to the arguments which stand in opposition to thera, will be induced to retract their dissent, convinced that the measure is supported on the most solid grounds of equal justice, policy, and general utility. The following observations, contrasted with each head of the objections, successively, will furmish » satisfactory answer to the whole :

"First Objection. That the proposed duty would be unequal in its operation, bearing hardest upon the most commercial states, and so woula press peculiarly hard upon that state which draws its chief support from

commerce.'

"The most common experience, joined to the concurrent opinions of the ablest commercial and political observers, has established, beyond contro. versy, this general principle, that every duty on imports is incorporated with the price of the commodity, and ultimately paid by the consumer, with a profit on the duty itself, as a compensation to the merchant for the advance of his money.'

"The merchant considers the duty demanded by the state on the imported article in the same light with freight, or any similar charge, and, adding it to the original cost, calculates his profit on the aggregate sum. It may happen that, at particular conjunctures, where the markets are overstocked, and there is a competition among the sellers, this may not be practicable; but in the general course of trade, the demand for consumption preponderates, and the merchant can with ease indemnify himself, and even obtain a profit on the advance. As a consumer, he pays his share of the duty but it is no further a burden upon him. The consequence of the principle laid down is, that every class of the community bears its share of the duty in proportion to its consumption, which last is regulated by the comparative wealth of the respective classes, in conjunction with their habits of expense or frugality. The rich and luxurious pay in proportion to their riches and luxury; the poor and parsimonious, in proportion to their poverty and parsimony. A chief excellence of this mode of revenue is, that it preserves a just measure to the abilities of individuals, promotes frugality, and taxes extravagance. The same reasoning, in our situation, applies to the intercourse between two states; if one imports and the other does not, the latter must be supplied by the former. The duty, being transferred to the price of the commodity, is no more a charge on the importing state for what is consumed in the other, than it is a charge on the merchant for what is consumed by the farmer or artificer. Either state will only feel the burden in a ratio to its consumption, and this will be in a ratio to its population and wealth. What happens between the different classes of the same community, internally, happens between the two states; and as the merchant, in the first case, so far from losing the duty himself, has a profit on the money he advances for that purpose, so the importing state, which, in the second case, is the merchant with respect to the other, is not only reimbursed by the non-importing state, but has a like benefit on the duty advanced. It is, therefore, the reverse of a just position, that the duty proposed will bear hardest on the most commercial states: it will, if any thing, have a contrary effect, though not in a sufficient degree to justify an objection on the part of the non-importing states; for it is as reasonable they should allow an advance on the duty paid as on the first cost, freight, or any incidental charge. They have also other advantages in the measure fully equivalent to this disadvantage. Over-nice and minute calculations, in matters of this nature are inconsistent with national measures, and, in the imperfect state of human affairs, would stagnate all the operations of government. Absolute equality is not to be obtained; to aim at it, is pursuing a shadow at the expense of the substance; and in the event we should find ourselves wider of the mark than if, in the first instance, we were content to approach it with moderation.

"Second Objection.

That the recommendation proposes to introduce

into that and the other states officers unknown and unaccountable to them, and so is against the Constitution of the state.'

"It is not to be presumed that the constitution of any state could mear to define and fix the precise numbers and descriptions of all officers to be permitted in the state, excluding the creation of any new ones, whatever might be the necessity derived from that variety of circumstances incident to all political institutions. The legislature must always have a discretionary power of appointing officers, not expressly known to the Constitution, and this power will include that of authorizing the federal govern ment to make the appointments in cases where the general welfare may require it. The denial of this would prove too much; to wit, that the power given by the Confederation to Congress, to appoint all officers in the post-office, was illegal and unconstitutional.

"The doctrine advanced by Rhode Island would perhaps prove, also, that the federal government ought to have the appointinent of no internal officers whatever a position that would defeat all the provisions of the Confederation, and all the purposes of the union. The truth is, that no federal constitution can exist without powers that, in their exercise, affect the internal police of the component members. It is equally true that no government can exist without a right to appoint officers for those purposes which proceed from and concentre in itself; and therefore the Confederation has expressly declared that Congress shall have authority to appoint all such 'civil officers as may be necessary for managing the geral affairs of the United States under their direction.' All that can be required is, that the federal government confine its appointments to such as it is empowered to make by the original act of union, or by the subsequent consent of the parties. Unless there should be express words of exclusion in the constitution of a state, there can be no reason to doubt that it is within the compass of legislative discretion to communicate that authority. "The propriety of doing it, upon the present occasion, is founded on substantial reasons.

"The measure proposed is a measure of necessity. Repeated experiments have shown that the revenue to be raised within these states is altogether inadequate to the public wants. The deficiency can only be supplied by loans. Our applications to the foreign powers, on whose friendship we depend, have had a success far short of our necessities. The next resource is to borrow from individuals. These will neither be actuated by generosity nor reasons of state. It is to their interest alone we must appeal. To conciliate this, we must not only stipulate a proper compensation for what they lend, but we must give security for the performance. We must pledge an ascertained fund, simple and productive in its nature, general in its principle, and at the disposal of a single will. There can be little confidence in a security under the constant revisal of thirteen different deliberatives. It must, once for all, be defined and established on the faith of the states solemnly pledged to each other, and not revocable by any without a breach of the general compact.

"It is by such expedients that nations, whose resources are understood, whose reputations and governments are erected on the foundation of ages, are enabled to obtain a solid and extensive credit. Would it be reasonable in us to hope for more easy terms, who have so recently assumed our rank among the nations? Is it not to be expected that individuals will be cautious in lending their money to a people in our circumstances and that they will at least require the best security we can give?