Article 6, Clause 1
Records of the Federal Convention
[2:6; Madison, 14 July]
[Mr. King:] The Genl. Governt. can never wish to intrude on the State Governts. There could be no temptation. None had been pointed out. In order to prevent the interference of measures which seemed most likely to happen, he would have no objection to throwing all the State debts into the federal debt, making one aggregate debt of about 70,000,000, of dollars, and leaving it to be discharged by the Genl. Govt.
[2:47; Madison, 18 July]
Mr. Wilson did not entirely approve of the manner in which the clause relating to the engagements of Congs. was expressed; but he thought some provision on the subject would be proper in order to prevent any suspicion that the obligations of the Confederacy might be dissolved along with the Governt. under which they were contracted.
[2:322; Journal, 18 Aug.]
To secure the payment of the public debt.
To secure all Creditors, under the new Constitution, from a violation of the public faith. when pledged by the authority of the Legislature
[2:355; Madison, 21 Aug.]
Governour Livingston, from the Committee of Eleven to whom was referred the propositions respecting the debts of the several States, and also the Militia, entered on the 18th. inst: delivered the following report:
"The Legislature of the U. S. shall have power to fulfil the engagements which have been entered into by Congress, and to discharge as well the debts of the U--S: as the debts incurred by the several States during the late war, for the common defence and general welfare"
. . . . .
Mr. Gerry considered giving the power only, without adopting the obligation, as destroying the security now enjoyed by the public creditors of the U--States. He enlarged on the merit of this class of citizens, and the solemn faith which had been pledged under the existing Confederation. If their situation should be changed as here proposed great opposition would be excited agst. the plan-- He urged also that as the States had made different degrees of exertion to sink their respective debts, those who had done most would be alarmed, if they were now to be saddled with a share of the debts of States which had done least.
Mr. Sherman. It means neither more nor less than the confederation as it relates to this subject.
Mr Elseworth moved that the Report delivered in by Govr. Livingston should lie on the table. Agreed to nem. con.
[2:377; Madison, 22 Aug.]
. . . the first clause containing the words "The Legislature of the U. S. shall have power to fulfil the engagements which have been entered into by Congress" being under consideration,
Mr. Elsworth argued that they were unnecessary. The U--S--heretofore entered into Engagements by Congs who were their Agents. They will hereafter be bound to fulfil them by their new agents.
Mr Randolph thought such a provision necessary; for though the U. States will be bound, the new Govt will have no authority in the case unless it be given to them.
Mr. Madison thought it necessary to give the authority in order to prevent misconstruction. He mentioned the attempts made by the Debtors to British subjects to shew that contracts under the old Government, were dissolved by the Revolution which destroyed the political identity of the Society.
Mr Gerry thought it essential that some explicit provision should be made on this subject, so that no pretext might remain for getting rid of the public engagements.
Mr. Govr. Morris moved by way of amendment to substitute--"The Legislature shall discharge the debts & fulfil the engagements of the U. States".
It was moved to vary the amendment by striking out "discharge the debts" & to insert "liquidate the claims", which being negatived,
The amendment moved by Mr. Govr. Morris was agreed to all the States being in the affirmative.
[2:392; Madison, 23 Aug.]
The 1st sect. of art: VII being so amended as to read "The Legislature shall fulfil the engagements and discharge the debts of the U. S, & shall have the power to lay & collect taxes duties imposts & excises", was agreed to
Mr. Butler expressed his dissatisfaction lest it should compel payment as well to the Blood-suckers who had speculated on the distresses of others, as to those who had fought & bled for their country. He would be ready he said tomorrow to vote for a discrimination between those classes of people, and gave notice that he should move for a reconsideration.
[2:400; Madison, 24 Aug.]
Mr. Butler, according to notice, moved that clause 1st. sect. 1. of art VII, as to the discharge of debts, be reconsidered tomorrow--He dwelt on the division of opinion concerning the domestic debts, and the different pretensions of the different classes of holders. Genl. Pinkney 2ded. him.
Mr. Randolph wished for a reconsideration in order to better the expression, and to provide for the case of the State debts as is done by Congress.
On the question for reconsidering
N--H. no. Mas: ay. Cont. ay N. J. ay. Pena. absent. Del. ay--Md. no. Va. ay--N. C. absent, S. C. ay. Geo. ay. [Ayes--7; noes--2; absent--2.]--and tomorrow assigned for the reconsideration.
[2:412; Madison, 25 Aug.]
The 1st. clause of 1 sect. of art: VII being reconsidered
Col. Mason objected to the term, "shall"--fullfil the engagements & discharge the debts &c as too strong. It may be impossible to comply with it. The Creditors should be kept in the same plight. They will in one respect be necessarily and properly in a better. The Government will be more able to pay them. The use of the term shall will beget speculations and increase the pestilent practice of stockjobbing. There was a great distinction between original creditors & those who purchased fraudulently of the ignorant and distressed. He did not mean to include those who have bought Stock in open market. He was sensible of the difficulty of drawing the line in this case, but He did not wish to preclude the attempt. Even fair purchasers, at 4, 5, 6, 8 for 1 did not stand on the same footing with the first Holders, supposing them not to be blameable. The interest they receive even in paper is equal to their purchase money. What he particularly wished was to leave the door open for buying up the securities, which he thought would be precluded by the term "shall" as requiring nominal payment, & which was not inconsistent with his ideas of public faith. He was afraid also the word "shall," might extend to all the old continental paper.
Mr Langdon wished to do no more than leave the Creditors in statu quo.
Mr. Gerry said that for himself he had no interest in the question being not possessed of more of the securities than would, by the interest, pay his taxes. He would observe however that as the public had received the value of the literal amount, they ought to pay that value to some body. The frauds on the soldiers ought to have been foreseen. These poor & ignorant people could not but part with their securities. There are other creditors who will part with any thing rather than be cheated of the capital of their advances. The interest of the States he observed was different on this point, some having more, others less than their proportion of the paper. Hence the idea of a scale for reducing its value had arisen. If the public faith would admit, of which he was not clear, he would not object to a revision of the debt so far as to compel restitution to the ignorant & distressed, who have been defrauded. As to Stock-jobbers he saw no reason for the censures thrown on them--They keep up the value of the paper. Without them there would be no market.
Mr. Butler said he meant neither to increase nor diminish the security of the Creditors.
Mr. Randolph moved to postpone the clause in favor of the following "All debts contracted & engagements entered into, by or under the authority of Congs. shall be as valid agst the U. States under this constitution as under the Confederation"
Docr Johnson. The debts are debts of the U--S--of the great Body of America. Changing the Government cannot change the obligation of the U--S--which devolves of course on the New Government. Nothing was in his opinion necessary to be said. If any thing, it should be a mere declaration as moved by Mr. Randolph.
Mr. Govr. Morris, said he never had become a public Creditor that he might urge with more propriety the compliance with public faith. He had always done so and always would, and preferr'd the term "shall" as the most explicit. As to buying up the debt, the term "shall" was not inconsistent with it, if provision be first made for paying the interest: if not, such an expedient was a mere evasion. He was content to say nothing as the New Government would be bound of course--but would prefer the clause with the term "shall", because it would create many friends to the plan.
On Mr. Randolph's Motion
N--H--ay--Mas. ay. Ct ay--N. J. ay--Pa. no Del. ay--Maryd. ay Va. ay--N. C.--ay--S. C. ay Geo. ay--[Ayes--10; noes--1.]
Mr. Sherman thought it necessary to connect with the clause for laying taxes duties &c an express provision for the object of the old debts &c--and moved to add to the 1st. clause of 1st. sect--of art VII "for the payment of said debts and for the defraying the expences that shall be incurred for the common defence and general welfare".
The proposition, as being unnecessary was disagreed to, Connecticut alone, being in the affirmative.
Farrand, Max, ed. The Records of the Federal Convention of 1787. Rev. ed. 4 vols. New Haven and London: Yale University Press, 1937.
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