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CONGRESS

HOUSE OF REPRESENTATIVES.

Tuesday, April 13, 1802.

Debate on the bill making provision for the redemption of the whole of the public debt of the United States.

(Concluded)

Mr. Nicholson. We find by the report of the secretary of the treasury an appropriation of $8,000,000 dollars, proposed to be annually applied to the discharge of the whole public debt. In the accompanying documents it is stated that one installment on the Dutch debt of 2,271,692 dollars will be due in 1802, 2,317,038 in 1803, 1,942,028 in 1804, 1,734,1950 cts. in 1805, & 1,326,019 in 1806.

Instead of paying off these sums as they become due, which, it will be observed are various in amount, the secretary has thought that it would be most prudent to equalize the installments. To effect this object he has requested that authority may be vested in the President to make partial loans. According to the present terms, the Dutch debt will be entirely paid in 1809; and it is not intended that any of these proposed loans should retard the extinguishment. I am inclined to think this provision of the bill is not so precise to this effect as it ought to be; as by it the new loans are not necessarily reimbursable till a period beyond 1809. I will therefore move to amend the bill as to make all the loans reimbursable before 1809.

[Mr. N. offered a motion to this effect.]

Mr. Griswold. I do not like that arrangement. The eight per cent stock is calculated to be paid off in 1809. If you carry forward to that period the annual payment of the Dutch debt, you will necessarily prevent the payment of the 8 per cent stock, from the inability of the government at one time to pay both. It is to be considered that the interest of eight per cent, is war interest, and that it will be the interest of the government to pay off the principal as soon as possible; and the ability to pay that stock in 1808 and 1809 will arise principally from the smallness of the foreign installments.

I am also opposed to procrastinate the payment of the Dutch debt by loans, as they will probably cost more than any other description of debt, perhaps equal to the 8 per cent. stock, from the premium and charges which always attend loans. I am also opposed to this measure from the difficulty of making remittances in time of war.

With respect to the merits of the Secretary of the Treasury in remitting, I do not wish to contrast upon them; though the operation is as plain as A. B. C. Bills are below par, there is money enough in the Treasury, and all that the Secretary has to do is to direct the Cashiers of the Banks to buy bills. I have no doubt, the Secretary has acted in this business, with propriety, -- every Secretary ought to, and would act.

I am sensible too that bills may next year be above par. But still: should this be the case, the expense will not equal that of loans.

As to the conduct of the Bank on this occasion, I know not how it is; but I presume it is such as the gentleman from Virginia has stated it. They may not make the remittance without compensation. ; but I have no doubt but that if a proper premium is offered they will undertake it. They are like merchants, and we must pay for these agencies what other people pay.

Mr. Randolph. The gentleman from Connecticut seems to refer, as if this provision were imperative; whereas it does not declare that the installments of the Dutch debt shall be paid in the precise proportion of the existing installments; it only is advisory now, because those who are well acquainted with the business of remittance, know the difficulty attending it, and wish to profit by legal provision.

It is probable that the Secretary will be obliged to buy bills above par on England, and then lay bills below par on England; this incurring a double loss. For my part I have no objection to vesting in the commissioners of the sinking fund and the President, this discretionary power now, because I believe the existing installments, without a recurrence to loans will be paid, if the provision be advantageous to the United States.

The gentleman says if the Dutch debt is left to 1809. it shall nothing to provide the 3 per cent. domestic debt. But by withholding the payment of the intermediate installments, you will be in a situation to meet the whole Dutch debt in 1809 ; and if the price in the market
of the 8 per cent. will admit, it may be bought with the millions thrown by the postponement of the payment of the Dutch debt.

The remarks of the gentleman respecting bills being below par, and the facility of purchasing them, may apply perhaps to ordinary sales, where only small sums are required; but when a demand for two millions, beyond the current demand, is superadded, will not the necessity be to enhance the price of bills? But suppose the individuals from whom bills are generally purchased have no right to draw beyond the ordinary demand for bills, what will be the effect? The government to be driven, no matter what length; to put, as the gentleman says, their shoulders to the wheel. In answer, I will say that the government have put their shoulders to the wheel, and have manifested in their actions the most unequivocal disposition to pay off the debt; but notwithstanding this disposition, they are unwilling to put the country to the inconveniences that may arise from the payment of the large instalment due in 1802—they are therefore in favor of qualifying it.

Besides if every dollar that is saved from the Dutch debt, be applied to the payment of bank loans, navy stock, or 8 per cents. will there be less debt extinguished? Will not such application of the public monies promote as highly the public interest; and have gentlemen shown that the ultimate redemption of the debt will be prolonged for a moment?

Mr. S. Smith said this section, and others that follow, were of considerable importance; the chiefs of which he had but little considered. He therefore wished the committee might rise, and time be allowed for further consideration until to-morrow. It appeared to him that the provision in the bill would answer one good object at least. Persons, who have bills, may hold them up, and the Secretary of the Treasury, having this power, may keep down the price. If the provision should have no other effect, this may be a very important one.

The committee rose, and asked leave to sit again.