1801 Examination 4 · Founding Made Plain

1THE EXAMINATION.

2Number IV.

3[New York, December 26, 1801]

4It is a matter of surprise

5 to observe a proposition

6 to diminish the revenue,

7 associated with intimations

8 which appear to contemplate war.

9The suggestions in the Message

10 respecting the Barbary States,

11 plainly enough imply,

12 that treaties are found

13 to be too feeble cords

14 to bind them;

15 and that a resort to coercive means

16 will probably be requisite

17 to enforce a greater sense of justice

18 towards us.

19Accordingly,

20 as a comment on this hint,

21 we have seen a resolution

22 brought into

23 the House of Representatives,

24 authorising the President

25 to take measures effectually

26 to protect our commerce

27 against those states.

28Believing it to be a sound position,

29 that these predatory nations

30 will never be brought

31 to respect sufficiently

32 the rights of this country,

33 whether derived from nature

34 or from compact,

35 without first being made

36 to feel its power,

37 there is no disposition

38 to condemn the efficacious employment

39 of force.

40Yet, considering the maxims

41 by which those states are governed,

42 and the obstinacy

43 which they have evinced

44 upon other occasions,

45 it is likely

46 that a policy of this sort

47 will be attended

48 with considerable,

49 and with no very temporary expense.

50This alone is conceived

51 to be a conclusive reason

52 against parting with any portion

53 of our present income:

54 nothing could be less advisable,

55 at a moment

56 when there is the prospect,

57 if not the project,

58 of a general rupture

59 with those powers.

60Hitherto the proposal

61 for sacrificing the internal revenue,

62 has been tried almost wholly

63 by the test of expediency;

64 it is time to put it

65 to a severer test:

66 to that of Right.

67Can the proposed abolition

68 take effect

69 without impairing

70 the Public Faith?

71This is a question of infinite moment

72 to the character of our Government—

73 to the prosperity of our nation.

74If it is to be answered

75 in the negative,

76 it must be matter of profound regret,

77 that a proposal

78 which could give rise to it,

79 should have come

80 from the first magistrate

81 of the United States.

82It is hardly necessary to premise,

83 by way of explanation,

84 that to pledge or appropriate funds

85 for a public debt,

86 is, in effect, to mortgage them

87 to the public creditors

88 for their security.

89Retracing our financial system

90 to its commencement,

91 we find the impost

92 and the excise on distilled spirits,

93 repeatedly and positively pledged,

94 first, for the payment and interest

95 of the debt,

96 next, for the reimbursement

97 of certain instalments

98 of the principal.

99It is true,

100 the appropriation is qualified

101 by the words,

102 "so much as may be necessary,"

103 but the public faith is engaged

104 in express terms,

105 that both the funds

106 shall continue to be levied

107 and collected,

108 until the whole debt

109 shall be discharged;

110 with the single reserve,

111 that the government shall be at liberty

112 to substitute other funds

113 of equal amount.

114It follows

115 that these two items of revenue

116 constitute a joint fund

117 for the security

118 of the public creditor,

119 coextensive in duration

120 with the existence

121 of any portion of the debt:

122 and it is to be inferred,

123 that the government,

124 contemplating the possibility

125 of a deficiency in one,

126 intended that the other

127 should serve as an auxiliary,

128 and that the co-operation of the two

129 should effectually guard the creditor

130 against the fluctuations and casualties

131 to which either singly

132 might be exposed.

133Anticipating, however,

134 the possibility

135 that the one or the other,

136 in whole or in part,

137 might in practice

138 be found inconvenient,

139 a right was reserved

140 to exchange either

141 for an adequate substitute.

142But it is conceived,

143 that this does not imply the right

144 to exchange the one

145 for the other.

146The effect would be essentially different

147 in the two cases:

148 in the first

149 there would always be two funds,

150 aggregately of the same

151 or similar force and value,

152 to secure the creditor;

153 in the last there would be only one:

154 from being double,

155 the security would become single.

156This mode of reasoning

157 is the only one,

158 upon which the rights

159 and the interests of the creditors

160 can safely rest:

161 it is plain and intelligible,

162 and avoids the danger

163 of erroneous speculations

164 about the separate sufficiency

165 of the respective funds.

166Admitting, however,

167 for the sake of the argument,

168 that this is too rigid a construction

169 of the contract,

170 and that when one of the two funds

171 should have acquired

172 a stable increase,

173 which would render it equal

174 to the purpose of the pledge,

175 it might then be made

176 to stand in the place of both:

177 yet, surely,

178 neither the purity of the public faith,

179 nor the safety of the creditor,

180 will endure the application

181 of this principle

182 to any other,

183 than to an ascertained result.

184Neither, certainly, will tolerate,

185 that merely

186 a reasonable ground of confidence

187 shall authorize so material an alteration

188 in the essence of the security

189 which protects the debt.

190The foregoing reasoning

191 as to the question of right,

192 may be further elucidated

193 by a particular provision

194 in the act*

195 which introduced the excise

196 on distilled spirits.

197After a permanent appropriation

198 of the proceeds of the tax

199 to the interest of the debt,

200 it provides that the surplus,

201 if any there shall be,

202 at the end of each year

203 shall be applied

204 to the reduction of the principal;

205 unless the surplus

206 or any part of it

207 should be required

208 for public exigencies

209 of the United States,

210 and should be so appropriated

211 by special "acts of Congress."

212While at this early period

213 of our finances

214 it was not thought expedient

215 to appropriate this surplus

216 absolutely to the sinking fund,

217 it was contemplated

218 that it should not be diverted,

219 except for public exigencies.

220Gratuitously to relinquish it,

221 is therefore contrary to the letter

222 as well as to the spirit

223 of the original institution

224 of the fund.

225The like observations,

226 though with less force,

227 apply to the provision

228 noticed in another number,

229 respecting the surpluses

230 of the revenue generally,

231 which, as we have seen,

232 are all appropriated

233 to the sinking fund.

234At the session of Congress

235 immediately succeeding any year

236 in which such surpluses may accrue,

237 they may be specially appropriated

238 or reserved by law,

239 for other purposes;

240 but, if this be not done,

241 they are then to go of course

242 to the sinking fund.

243To appropriate or to reserve,

244 plainly, can never mean

245 to relinquish.

246The true meaning of the provision

247 appears, therefore, to be,

248 that though Congress,

249 under the restriction expressed

250 as to time,

251 may appropriate or reserve

252 these surpluses

253 for other objects

254 of the public service,

255 yet if not wanted

256 for such other objects,

257 they shall continue to enure

258 to the fund

259 for the reduction of the debt,

260 so long as, by the laws

261 regulating their duration,

262 they are continued to be levied.

263Thus, on whatever side it is viewed,

264 there is a temerity and a levity

265 in the proposition

266 which confounds and amazes.

267If, unhappily,

268 it shall receive the sanction

269 of Congress,

270 there will remain nothing in principle

271 of our system of public credit—

272 nothing on which

273 the confidence of the creditor

274 can safely repose.

275The precedent

276 of a fatal innovation

277 will have been established,

278 and its extension

279 to a total annihilation

280 of the security,

281 would be a step

282 not much more violent

283 than that by which the inroad

284 had commenced.

285But it is devoutly to be hoped,

286 that the delirium of party spirit

287 will not so far transport

288 the legislative representatives

289 of the nation,

290 as to induce them

291 to put the seal to a measure,

292 as motiveless—

293 as precipitate—

294 as impolitic—

295 as faithless—

296 as could have been dictated,

297 even by a deliberate hostility

298 to the vital principles

299 of our national credit.

300Peculiarly the guardians

301 of the Public Faith,

302 and of the public purse,

303 they surely will not consent

304 to betray the one,

305 and impoverish the other,

306 through an abject

307 and criminal complaisance.

308It is a fact not unknown to himself,

309 that abroad, as well as at home,

310 a diffidence has been entertained

311 of the opinions and views

312 of the person

313 now at the head of our government,

314 with regard

315 to our system of public credit.

316This undoubtedly ought to have been

317 with him a strong reason for caution,

318 especially at so early a stage

319 of his administration,

320 as to any step

321 which might strengthen

322 that diffidence,

323 which might be in the least equivocal

324 in its tendency.

325Nor ought it to have been overlooked,

326 that the interest of the state,

327 and a regard for his own reputation

328 demanded this caution.

329The appearance of instability

330 in the plans of a government,

331 particularly respecting its finances,

332 can never fail

333 to make injurious impressions.

334To a government,

335 the character of which

336 has not yet been established

337 by time,

338 the example

339 of sudden and questionable innovations,

340 may be expected to be

341 in the highest degree detrimental.

342Prudent men every where

343 are apt to take the alarm

344 at great changes

345 not manifestly beneficial and proper;

346 a disposition which has been much increased

347 by the terrible events

348 of the present revolutionary æra.

349Yet, disregarding these

350 salutary and obvious reflections,

351 the President has ventured,

352 in the very infancy

353 of his administration,

354 upon the bold and unjustifiable step

355 of recommending

356 to the legislative body,

357 a renunciation

358 of the whole internal revenue

359 of the country;

360 though the nation

361 is at this moment incumbered

362 with a considerable public debt;

363 and though that very revenue

364 is, by the existing laws,

365 an established fund

366 for its discharge.

367What, then, are we to think

368 of the ostentatious assurance

369 in the Inaugural Speech

370 as to the preservation

371 of Public Faith?

372Was it given merely to amuse

373 with agreeable, but deceptive sounds?

374Is it possible

375 that it could have been intended

376 to conceal the insidious design

377 of aiming a deadly blow

378 at a system

379 which was opposed in its origin,

380 and has been calumniated

381 in every stage of its progress?

382Alas!

383 how deplorable will it be,

384 should it ever become proverbial,

385 that a President of the United States,

386 like the Wierd Sisters in Macbeth,

387 "Keeps his promise to the ear,

388 but breaks it to the sense!"

389Lucius Crassus.

390New-York Evening Post, December 26, 1801.

391* Passed March 3d, 1791.