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Article 1, Section 10, Clause 1



Document 8

Debate in Virginia Ratifying Convention

15 June 1788Elliot 3:471--81

Mr. Henry apologized for repeatedly troubling the committee with his fears. But he apprehended the most serious consequences from these restrictions on the states. As they could not emit bills of credit, make any thing but gold and silver coin a tender in payment of debts, pass ex post facto laws, or impair the obligation of contracts,--though these restrictions were founded on good principles, yet he feared they would have this effect; that this state would be obliged to pay for her share of the Continental money, shilling for shilling. He asked gentlemen who had been in high authority, whether there were not some state speculations on this matter. He had been informed that some states had acquired vast quantites of that money, which they would be able to recover in its nominal value of the other states.

Mr. Madison admitted there might be some speculations on the subject. He believed the old Continental money was settled in a very disproportionate manner. It appeared to him, however, that it was unnecessary to say any thing on this point, for there was a clause in the Constitution which cleared it up. The first clause of the 6th article provides that "all debts contracted, and engagements entered into, before the adoption of this Constitution, shall be as valid against the United States, under this Constitution, as under the Confederation." He affirmed that it was meant there should be no change with respect to claims by this political alteration; and that the public would stand, with respect to their creditors, as before. He thought that the validity of claims ought not to diminish by the adoption of the Constitution. But, however, it could not increase the demands on the public.

Mr. George Mason declared he had been informed that some states had speculated most enormously in this matter. Many individuals had speculated so as to make great fortunes on the ruin of their fellow-citizens. The clause which has been read, as a sufficient security, seemed to him to be satisfactory as far as it went; that is, that the Continental money ought to stand on the same ground as it did previously, or that the claim should not be impaired. Under the Confederation, there were means of settling the old paper money, either in Congress or in the state legislatures. The money had at last depreciated to a thousand for one. The intention of state speculation, as well as individual speculation, was to get as much as possible of that money, in order to recover its nominal value. The means, says he, of settling this money, were in the hands of the old Congress. They could discharge it at its depreciated value. Is there that means here? No, sir, we must pay it shilling for shilling, or at least at the rate of one for forty. The amount will surpass the value of the property of the United States. Neither the state legislatures nor Congress can make an ex post facto law. The nominal value must therefore be paid. Where is the power in the new government to settle this money so as to prevent the country from being ruined? When they prohibit the making ex post facto laws, they will have no authority to prevent our being ruined by paying that money at its nominal value.

Without some security against it, we shall be compelled to pay it to the last particle of our property. Shall we ruin our people by taxation, from generation to generation, to pay that money? Should any ex post facto law be made to relieve us from such payments, it would not be regarded, because ex post facto laws are interdicted in the Constitution. We may be taxed for centuries, to give advantage to a few particular states in the Union, and a number of rapacious speculators. If there be any real security against this misfortune, let gentlemen show it. I can see none. The clause under consideration does away the pretended security in the clause which was adduced by the honorable gentleman. This enormous mass of worthless money, which has been offered at a thousand for one, must be paid in actual gold and silver at the nominal value.

Mr. Madison. Mr. Chairman, it appears to me immaterial who holds those great quantities of paper money which were in circulation before the peace, or at what value they acquired it; for it will not be affected by this Constitution. What would satisfy gentlemen more than that the new Constitution would place us in the same situation with the old? In this respect, it has done so. The claims against the United States are declared to be as valid as they were, but not more so. Would they have a particular specification of these matters? Where can there be any danger? Is there any reason to believe that the new rulers, one branch of which will be drawn from the mass of the people, will neglect or violate our interests more than the old? It rests on the obligation of public faith only, in the Articles of Confederation. It will be so in this Constitution, should it be adopted. If the new rulers should wish to enhance its value, in order to gratify its holders, how can they compel the states to pay it if the letter of the Constitution be observed? Do gentlemen wish the public creditors should be put in a worse situation? Would the people at large wish to satisfy creditors in such a manner as to ruin them? There cannot be a majority of the people of America that would wish to defraud their public creditors. I consider this as well guarded as possible. It rests on plain and honest principles. I cannot conceive how it could be more honorable or safe. [Mr. Madison made some other observations, which could not be heard.]

Mr. Henry. Mr. Chairman, I am convinced, and I see clearly, that this paper money must be discharged, shilling for shilling. The honorable gentleman must see better than I can, from his particular situation and judgment; but this has certainly escaped his attention. The question arising on the clause before you is, whether an act of the legislature of this state, for scaling money, will be of sufficient validity to exonerate you from paying the nominal value, when such a law, called ex post facto, and impairing the obligation of contracts, is expressly interdicted by it. Your hands are tied up by this clause, and you must pay shilling for shilling; and, in the last section, there is a clause that prohibits the general legislature from passing any ex post facto law; so that the hands of Congress are tied up, as well as the hands of the state legislatures.

How will this thing operate, when ten or twenty millions are demanded as the quota of this state? You will cry out that speculators have got it at one for a thousand, and that they ought to be paid so. Will you then have recourse, for relief, to legislative interference? They cannot relieve you, because of that clause. The expression includes public contracts, as well as private contracts between individuals. Notwithstanding the sagacity of the gentleman, he cannot prove its exclusive relation to private contracts. Here is an enormous demand, which your children, to the tenth generation, will not be able to pay. Should we ask if there be any obligation in justice to pay more than the depreciated value, we shall be told that contracts must not be impaired. Justice may make a demand of millions, but the people cannot pay them.

I remember the clamors and public uneasiness concerning the payments of British debts put into the treasury. Was not the alarm great and general lest these payments should be laid on the people at large? Did not the legislature interfere, and pass a law to prevent it? Was it not reechoed every where, that the people of this country ought not to pay the debts of their great ones? And though some urged their patriotism and merits in putting money, on the faith of the public, into the treasury, yet the outcry was so great that it required legislative interference. Should those enormous demands be made upon us, would not legislative interference be more necessary than it was in that case? Let us not run the risk of being charged with carelessness, and neglect of the interests of our constituents and posterity. I would ask the number of millions. It is, without exaggeration, immense. I ask gentlemen if they can pay one hundred millions, or two hundred millions? Where have they the means of paying it? Still they would make us proceed to tie the hands of the states and of Congress.

A gentleman has said, with great force, that there is a contest for empire. There is also a contest for money. The states of the north wish to secure a superiority of interest and influence. In one part their deliberation is marked with wisdom, and in the other with the most liberal generosity. When we have paid all the gold and silver we could to replenish the congressional coffers, here they ask for confidence. Their hands will be tied up. They cannot merit confidence. Here is a transfer from the old to the new government, without the means of relieving the greatest distresses which can befall the people. This money might be scaled, sir; but the exclusion of ex post facto laws, and laws impairing the obligation of contracts, steps in and prevents it. These were admitted by the old Confederation. There is a contest for money as well as empire, as I have said before. The Eastern States have speculated chiefly in this money. As there can be no congressional scale, their speculations will be extremely profitable. Not satisfied with a majority in the legislative councils, they must have all our property. I wish the southern genius of America had been more watchful.

This state may be sued in the federal court for those enormous demands, and judgment may be obtained, unless ex post facto laws be passed. To benefit whom are we to run this risk? I have heard there were vast quantities of that money packed up in barrels: those formidable millions are deposited in the Northern States, and whether in public or private hands makes no odds. They have acquired it for the most inconsiderable trifle. If you accord to this part, you are bound hand and foot. Judgment must be rendered against you for the whole. Throw all pride out of the question, this is a most nefarious business. Your property will be taken from you to satisfy this most infamous speculation. It will destroy your public peace, and establish the ruin of your citizens. Only general resistance will remedy. You will shut the door against every ray of hope, if you allow the holders of this money, by this clause, to recover their formidable demands. I hope gentlemen will see the absolute necessity of amending it, by enabling the state legislatures to relieve their people from such nefarious oppressions.

Mr. George Nicholas. Mr. Chairman, I beg gentlemen to consider most attentively the clause under consideration, and the objections against it. He says there exists the most dangerous prospect. Has the legislature of Virginia any right to make a law or regulation to interfere with the Continental Debts? Have they a right to make ex post facto laws, and laws impairing the obligation of contracts, for that purpose? No, sir. If his fears proceed from this clause, they are without foundation. This clause does not hinder them from from doing it, because the state never could do it; the jurisdiction of such general objects being exclusively vested in Congress.

But, says he, this clause will hinder the general government from preventing the nominal value of those millions from being paid. On what footing does this business stand, if the Constitution be adopted? By it all contracts will be as valid, and only as valid, as under the old Confederation. The new government will give the holders the same power of recovery as the old one. There is no law under the existing system which gives power to any tribunal to enforce the payment of such claims. On the will of Congress alone the payment depends. The Constitution expressly says that they shall be only as binding as under the present Confederation. Cannot they decide according to real equity? Those who have this money must make application to Congress for payment. Some positive regulation must be made to redeem it. It cannot be said that they have power of passing a law to enhance its value. They cannot make a law that that money shall no longer be but one for one; for, though they have power to pay the debts of the United States, they can only pay the real debts; and this is no further a debt than it was before. Application must, therefore, be made by the holders of that money to Congress, who will make the most proper regulation to discharge its real and equitable, and not its nominal, value.

We are told of the act passed to exonerate the public from the payments of the British debts put into the treasury. That has no analogy to this: those payments were opposed because they were unjust. But he supposes that Congress may be sued by those speculators. Where is the clause that gives that power? It gives no such power. This, according to my idea, is inconsistent. Can the supreme legislature be sued in their own subordinate courts, by their own citizens, in cases where they are not a party? They may be plaintiffs, but not defendants. But the individual states, perhaps, may be sued. Pennsylvania or Virginia may be sued. How is this? Do I owe the man in New England any thing? Does Virginia owe any thing to the Pennsylvanian holder of such money? Who promised to pay it? Congress, sir. Congress are answerable to the individual holders of this money, and individuals are answerable over to Congress. Therefore, no individual can call on any state.

But the Northern States struggle for money as well as for empire. Congress cannot make such a regulation as they please at present. If the Northern States wish to injure us, why do they not do it now? What greater dangers are there to be dreaded from the new government, since there is no alteration? It they have a majority in the one case, they have in the other. The interests of those states would be as dangerous for us under the old as under the new government, which leaves this business where it stands, because the conclusion says that all debts contracted, or engagements entered into, shall be only as valid in the one case as the other.

Gov. Randolph. Mr. Chairman, this clause, in spite of the invective of the gentleman, is a great favorite of mine, because it is essential to justice. I shall reserve my answer respecting the safety of the people till the objection be urged; but I must make a few observations. He says this clause will be injurious, and that no scale can be made, because there is a prohibition on Congress of passing ex post facto laws. If the gentleman did not make such strong objections to logical reasoning, I could prove, by such reasoning, that there is no danger. Ex post facto laws, if taken technically, relate solely to criminal cases; and my honorable colleague tells you it was so interpreted in Convention. What greater security can we have against arbitrary proceedings in criminal jurisprudence than this? In addition to the interpretation of the Convention, let me show him still greater authority. The same clause provides that no bill of attainder shall be passed. It shows that the attention of the Convention was drawn to criminal matters alone. Shall it be complained, against this government, that it prohibits the passing of a law annexing a punishment to an act which was lawful at the time of committing it? With regard to retrospective laws, there is no restraint.

Let us examine the cause of the clamors which are made with regard to the Continental money. A friend has mentioned a clause which shows there is no danger from the new Congress. Does it not manifestly appear that they are precisely in the same predicament as under the old Confederation? And do gentlemen wish that this should be put in a worse condition? If they have equity under the old Confederation, they have equity still. There is no tribunal to recur to by the old government. There is none in the new for that purpose. If the old Congress can scale that money, they have this power still. But he says not, because the states cannot impair the obligation of contracts. What is to be done by the states with regard to it? Congress, and not they, have contracted to pay it. It is not affected by this clause at all. I am still a warm friend to the prohibition, because it must be promotive of virtue and justice, and preventive of injustice and fraud. If we take a review of the calamities which have befallen our reputation as a people, we shall find they have been produced by frequent interferences of the state legislatures with private contracts. If you inspect the greater corner-stone of republicanism, you will find it to be justice and honor.

I come now to what will be agitated by the judiciary. They are to enforce the performance of private contracts. The British debts, which are withheld contrary to treaty, ought to be paid. Not only the law of nations, but justice and honor, require that they be punctually discharged. I fear their payment may press on my country; but we must retrench our superfluities, and profuse and idle extravagance, and become more economical and industrious. Let me not be suspected of being interested in this respect; for, without a sad reverse of my fortune, I shall never be in a situation to be benefited by it. I am confident the honest Convention of Virginia will not oppose it. Can any society exist without a firm adherence to justice and virtue? The federal judiciary cannot intermeddle with those public claims without violating the letter of the Constitution. Why, then, such opposition to the clause? His excellency then concluded that he would, if necessary, display his feelings more fully on the subject another time.

Mr. George Mason. Mr. Chairman, the debt is transferred to Congress, but not the means of paying it. They cannot pay it any other way than according to the nominal value; for they are prohibited from making ex post facto laws; and it would be ex post facto, to all intents and purposes, to pay off creditors with less than the nominal sum which they were originally promised. But the honorable gentleman has called to his aid technical definitions. He says, that ex post facto laws relate solely to criminal matters. I beg leave to differ from him. Whatever it may be at the bar, or in a professional line, I conceive that, according to the common acceptation of the words, ex post facto laws and retrospective laws are synonymous terms. Are we to trust business of this sort to technical definition? The contrary is the plain meaning of the words. Congress has no power to scale this money. The states are equally precluded. The debt is transferred without the means of discharging it. Implication will not do. The means of paying it are expressly withheld. When this matter comes before the federal judiciary, they must determine according to this Constitution. It says, expressly, that they shall not make ex post facto laws. Whatever may be the professional meaning, yet the general meaning of ex post facto laws is an act having a retrospective operation. This construction is agreeable to its primary etymology. Will it not be the duty of the federal court to say that such laws are prohibited? This goes to the destruction and annihilation of all the citizens of the United States, to enrich a few. Are we to part with every shilling of our property, and be reduced to the lowest insignificancy, to aggrandize a few speculators? Let me mention a remarkable effect this Constitution will have. How stood our taxes before this Constitution was introduced? Requisitions were made on the state legislatures, and, if they were unjust, they could be refused. If we were called upon to pay twenty millions, shilling for shilling, or at the rate of one for forty, our legislature could refuse it, and remonstrate against the injustice of the demand. But now this could not be done; for direct taxation is brought home to us. The federal officer collects immediately of the planters. When it withholds the only possible means of discharging those debts, and by direct taxation prevents any opposition to the most enormous and unjust demand, where are you? Is there a ray of hope? As the law has never been my profession, if I err, I hope to be excused. I spoke from the general sense of the words. The worthy gentleman has told you that the United States can be plaintiffs, but never defendants. If so, it stands on very unjust grounds. The United States cannot be come at for any thing they may owe, but may get what is due to them. There is therefore no reciprocity. The thing is so incomprehensible that it cannot be explained. As an express power is given to the federal court to take cognizance of such controversies, and to declare null all ex post facto laws, I think gentlemen must see there is danger, and that it ought to be guarded against.

Mr. Madison. Mr. Chairman, I did expect, from the earnestness he has expressed, that he would cast some light upon it; but the ingenuity of the honorable member could make nothing of this objection. He argues from a supposition that the state legislatures, individually, might have passed laws to affect the value of the Continental debt. I believe he did not well consider this, before he hazarded his observations. He says that the United States, being restrained in this case, will be obliged to pay at an unjust rate. It has been so clearly explained by the honorable gentleman over the way that there could be no danger, that it is unnecessary to say more on the subject. The validity of these claims will neither be increased nor diminished by this change. There must be a law made by Congress respecting their redemption. The states cannot interfere. Congress will make such a regulation as will be just. There is, in my opinion, but one way of scaling improperly and unjustly; and that is, by acceding to the favorite mode of the honorable gentleman--by requisitions. Is it to be presumed any change can be made in the system inconsistent with reason or equity? Strike the clause out of the Constitution--what will it be then? The debt will be as valid only as it was before the adoption. Gentlemen will not say that obligations are varied. This is merely a declaratory clause, that things are to exist in the same manner as before.

But I fear the very extensive assertions of the gentleman may have misled the committee. The whole of that Continental money amounted to but little more than one hundred millions. A considerable quantity of it has been destroyed. At the time when no share of it had been destroyed, the quota of this state did not amount to more than twenty-six millions. At forty for one, this is but five hundred thousand dollars at most. In every point of view it appears to me that it cannot be on a more reasonable, equitable, or honorable footing than it is. Do gentlemen suppose that they will agree to any system or alteration that will place them in a worse situation than before? Let us suppose this commonwealth was possessed of the same money that the Northern States have; and suppose an objection was made by them to its redemption at its real value--what would be the consequence? We should pronounce them to be unreasonable, and on good grounds. This case is so extremely plain, that it was unecessary to say as much as has been said.

Mr. Mason was still convinced of the rectitude of his former opinion. He thought it might be put on a safer footing by three words. By continuing the restriction of ex post facto laws to crimes, it would then stand under the new government as it did under the old.

Gov. Randolph could not coincide with the construction put by the honorable gentleman on ex post facto laws. The technical meaning which confined such laws solely to criminal cases was followed in the interpretation of treaties between nations, and was concurred in by all civilians. The prohibition of bills of attainder he thought a sufficient proof that ex post facto laws related to criminal cases only, and that such was the idea of the Convention.


The Founders' Constitution
Volume 3, Article 1, Section 10, Clause 1, Document 8
http://press-pubs.uchicago.edu/founders/documents/a1_10_1s8.html
The University of Chicago Press

Elliot, Jonathan, ed. The Debates in the Several State Conventions on the Adoption of the Federal Constitution as Recommended by the General Convention at Philadelphia in 1787. . . . 5 vols. 2d ed. 1888. Reprint. New York: Burt Franklin, n.d.

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