NATIONAL FINANCES--SLAVERY
Hamilton's famous report to the First Congress, as secretary of the
treasury, was made at the second session in January, 1790. Near the
close of the previous session a petition asking for some settlement of
the public debt was received and referred to a committee of which
Madison was chairman. The committee reported in favor of the petition,
and the House accordingly called upon the secretary to prepare a plan
"for the support of the public credit."
So far as Hamilton's funding scheme provided for that portion of the
debt due to foreigners, it was accepted without demur. There could be no
doubt that there the ostensible creditor was the real creditor, who
should be paid in full. The report assumed that this was equally true of
the domestic debt. A citizen holding a certificate of the indebtedness
of the government, no matter how he came by it, nor at what price, was
entitled to payment at its face value. But here the question was raised,
Was this ostensible creditor the sole creditor? Was he, whose
necessities had compelled him to part with the government's note of hand
at a large discount when full payment was impossible, to receive
nothing now when at last government was able to pay in full? Was it
equity to let all the loss fall upon the original creditor, and all the
gain go to him who had lost nothing originally, and had only assumed at
small cost the risk of a profitable speculation? Moreover it was
charged, and not denied, that in some of these speculations there had
been no risk whatever; and that, so soon as the tenor of the report was
known, fast-sailing vessels were dispatched from New York to the
Carolinas and Georgia to buy up public securities held by persons
ignorant of their recent rapid rise in value. As hitherto they had been
worth only about fifteen cents on the dollar; as upon the publication of
the secretary's report they had risen to fifty cents on the dollar; and
as, if the secretary's advice should be taken, they would rise to a
hundred cents on the dollar,--it would be securing what in the slang of
the modern stock exchange is called "a good thing" to send agents into
the rural districts in advance of the news to buy up government paper.
"My soul rises indignant," exclaimed a member, "at the avaricious and
moral turpitude which so vile a conduct displays." Nor on that point did
anybody venture then to disagree with him openly.
But, besides the question as to who were in reality the public
creditors, a doubt was also raised whether the debt ought to be paid in
full to anybody. Every dollar of the foreign debt was for an actual
dollar borrowed. But the domestic debt was not incurred to any large
amount for money borrowed, but in payment for services, or for
provisions and goods purchased, for which double, or more than double,
prices had been exacted by those who exchanged them for government
paper. If the exigencies of war had compelled the government to promise
to pay for fifty bushels of wheat the price of a hundred bushels, the
creditor, now that the government was in a condition to redeem its
promise, was not entitled in equity to receive more than the actual
value of the fifty bushels at the time of the purchase. Moreover, it was
contended, there was no injustice in such a settlement of the debt, for
the war had been carried on and brought to a successful end, for the
benefit of the creditor as well as of everybody else. The argument was
analogous in a measure to that used by a certain class of politicians in
our time, who maintained that the bonds of the United States, bought at
a discount for "greenbacks" during the late rebellion, should not be
redeemed in gold when the war was over.
The answer to all this was obvious. The nation must first be just by
paying its debts to those who could present the evidence that they were
its creditors. If, when that was done, it could afford to be generous,
it might, if so disposed, reimburse those who had lost by parting with
the certificates of debt at a discount. The government could not in
honor go behind its own contracts. The Constitution provided that "all
debts 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." Here was a debt which the
Confederation had contracted, and the federal government had no more
right "to impair the obligation of contracts" for its own benefit than
the separate States had; and that they were expressly forbidden by the
Constitution to do.
Madison listened quietly day after day to the long and earnest debates
upon the subject, and then advanced an entirely new proposition. He
agreed with one party in maintaining the inviolability of contracts. The
Confederacy had incurred a debt to its own citizens which the new
government had agreed to assume. But he also agreed with the other party
that there was a question as to whom that debt was due. Were those who
now held the certificates entitled to the payment of their face value,
dollar for dollar, although the cost to them was only somewhere from
fifteen to fifty cents on the dollar? It was true that the original
contract was transferable, and these present creditors held the evidence
of the transfer. But did that transfer entitle the holder to the full
value without regard to the price paid for it? Was there not in equity a
reserved right in the original holder, who, having given a full
equivalent for the debt, had only parted with the evidence of it, under
the compulsion of his own poverty, and the inability of the government
at that time to meet its obligations? Was not this specially true in
the case of the soldiers of the late war, to whose devotion and
sacrifices the nation owed its existence?
Mr. Madison thought that an affirmative reply to the last two queries
would present the true view of the case, and he proposed, therefore, to
pay both classes of creditors,--those who now held the evidence of
indebtedness, acquired by purchase at no matter what price; and those
who had parted with that evidence without receiving the amount which the
government had promised to pay for services rendered. It was not,
however, to be expected that the entire debt should be paid in full to
both classes. That was beyond the ability of the government. But it
would be an equitable settlement, he contended, to pay the present
holders the highest price the certificates had ever reached, and to
award the remainder to those who were the original creditors.
This proposition received only thirteen votes out of forty-nine. Many of
those opposed to it were quite ready to grant that it was hard upon the
veterans of the war that they, who had received so little and who had
borne so much, should not now be recognized as creditors when at last
the government was able to pay its debts. But the House could not
indulge in sentimental legislation. That would be to launch the ship of
state upon another sea of bankruptcy. There were in the hands of the
people tens of millions of paper money not worth at the current rate a
cent on the dollar. If everybody who had lost was to be paid, the point
would soon be reached where nobody would be paid at all. A limit must be
fixed somewhere; let it be at these certificates of debt which were the
evidence of a contract made between the government and its creditors.
These could be paid, and they should be paid, to those who were in
lawful possession of them. The law, if not the equity, of the case was
clearly against Madison. That the government should be absolutely just
to everybody who had ever trusted to it, and lost by it, was impossible.
It was a bankrupt compelled to name its preferred creditors, and it
named those whom it was in honor and law bound to take care of, and over
whose claims there was, on the whole, the least shadow of doubt. That
the loss should remain chiefly with the soldiers of the Revolution, and
the gain fall chiefly to those who were shrewd enough, or had the means
to speculate in the public funds, was a lamentable fact; but to
discriminate between them was not within the right of the government.
That he would have had it discriminate was creditable to Madison's
heart; it was rather less creditable to his head.
Of course, underneath all this debate there lay other considerations
than those merely of debtor and creditor, of moral and legal obligation,
of pity for the soldiers, and of strict regard for the letter of a
contract. Mr. Hamilton and his friends, it was said, were anxious to
establish the public credit, not so much because they wished to keep
faith with creditors as because they wished to strengthen the government
and build up their own party. The reply to these accusations was, that
the other side, under pretense of consideration for the soldiers and
others on whom the burden of the war had borne most heavily, concealed
hostility to the Constitution and a consolidated government. These were
not reflections to be spoken of in debate, but they were not the less
cherished, and gave to it piquancy and spirit. There was truth on both
sides without doubt.
Though defeated in this measure, Madison was not less determined in his
opposition to the assumption of the debts of the States. Of these debts
some States had discharged more than others; and he complained, not
without reason, of the injustice of compelling those which had borne
their own burdens unaided to share in the obligations which others had
neglected. He was unfortunate, however, in assuming a superiority for
Virginia over some of the Eastern States, and especially over
Massachusetts, in services rendered in the struggle for independence.
The comparison provoked a call for official inquiry; and that proved
that Massachusetts alone had sent more men into the field during the war
than all the Southern States together. It was not much to be wondered
at, when this fact was considered, that the debt of Massachusetts should
be larger than that of Virginia by $800,000. The difference between
Virginia and South Carolina was the same, the truth being that the war
had cost Massachusetts more money to pay her soldiers for the general
service, and South Carolina more to repel the enemy upon her own soil,
than it had cost Virginia for either purpose. Massachusetts and South
Carolina were again found acting together, simply because each of them
had a debt--$4,000,000--larger than that of any other State. The total
debt of all the States was about $21,000,000; and as that of North
Carolina, Pennsylvania, or Connecticut, when added to the $8,000,000 of
Massachusetts and South Carolina, amounted to half, or more, of the
whole sum, there was no difficulty in forming a strong combination in
favor of assumption. No combination, however, was strong enough to carry
the measure on its own merits, notwithstanding its advocates attempted
to defeat the funding of the domestic debt of the Federal Union unless
the debts of the several States were assumed at the same time.
The domestic debt, however, was at length provided for, and the
assumption of the debts of the States was rejected till that bargain,
referred to in the preceding chapter, which gave to the Southern States
the permanent seat of government, was concluded. It would not have been
difficult, probably, to defeat that piece of political jobbery by a
public exposure of its terms. Why Madison did not resort to it, if, as
seems certain, he knew that such a bargain had been privately made, can
only be conjectured. Perhaps he saw that Hamilton, who was applauded by
his friends and denounced by his enemies for his clever management, had,
after all, only made a temporary gain; and that Jefferson, whose defense
was that Hamilton had taken advantage of his ignorance and innocence,
would not, had he not been short-sighted, have made any defense at all.
For the assumption of the state debts by the general government was only
a distribution of a single local burden; and this was a small price for
Virginia and the other Southern States to pay for the permanent
possession of the federal capital.
While these questions were pending, another was thrown into the House
which was not disposed of for nearly two months. The debates upon it,
Madison said in one of his letters, "were shamefully indecent," though
he thought the introduction of the subject into Congress injudicious.
The Yearly Meeting of Friends in New York and in Pennsylvania sent a
memorial against the continued toleration of the slave trade; and this
was followed the next day by a petition from the Pennsylvania Society
for the Promotion of the Abolition of Slavery, signed by Benjamin
Franklin as president, asking for a more radical measure.
"They earnestly entreat," they said, "your serious attention to the
subject of slavery; that you will be pleased to countenance the
restoration of liberty to these unhappy men, who alone in this land
of freedom are degraded into perpetual bondage, and who, amidst
the general joy of surrounding freemen, are groaning in servile
subjection; that you will devise means for removing this
inconsistency from the character of the American people; that you
will promote mercy and justice towards this distressed race; and
that you will step to the very verge of the power vested in you for
discouraging every species of traffic in the persons of our
fellow-men."
The words were probably Franklin's own, and, as he died a few weeks
after they were written, they may be considered as his dying words to
his countrymen,--counsel wise and merciful as his always was.
A memorable debate followed the presentation of these memorials. Even in
the imperfect report of it that has come down to us, the "shameful
indecency" of which Madison speaks is visible enough. Franklin,
venerable in years, exalted in character, and eminent above almost all
the men of the time for services to his country, was sneered at for
senility and denounced as disregarding the obligations of the
Constitution. But the wrath of the pro-slavery extremists was specially
aroused against the Society of Friends, and was unrestrained by any
considerations of either decency or truth. In this respect the debate
was the precursor of every contest in Congress upon the subject that was
to follow for the coming seventy years. The Quakers were the
representative abolitionists of that day, and the measure of bitter and
angry denunciation that was meted out to them was the same measure
which, heaped up and overflowing, was poured out upon those who, in
later times, took upon themselves the burden of the cause of the slave.
The line of argument, the appeals to prejudice, the disregard of facts
and the false conclusions, the misrepresentation of past history and the
misapprehension of the future, the contempt of reason, of common sense,
and common humanity, then laboriously and unscrupulously arrayed in
defense of slavery, left nothing for the exercise of the ingenuity of
modern orators. A single difference only between the earlier and the
later time is conspicuous; the "plantation manners," as they were called
five and twenty years ago, which the Wises, the Brookses, the
Barksdales, and the Priors of the modern South relied upon as potent
weapons of defense and assault, were unknown in the earlier Congresses.
Mr. Madison and some other members from the South, particularly those
from Virginia, opposed the majority of their colleagues, who were
unwilling that these memorials should be referred to a committee. "The
true policy of the Southern members," Madison wrote to a friend, "was to
have let the affair proceed with as little noise as possible, and to
have made use of the occasion to obtain, along with an assertion of the
powers of Congress, a recognition of the restraints imposed by the
Constitution." This in effect was done in the end, but not till near two
months had passed, within which time the more violent of the Southern
members had ample opportunity to free their minds and exhaust the
subject. The more these people talked the worse it was, of course, for
their cause. Had Madison's moderate advice been accepted then, and had
that example been followed for the next sixty or seventy years, it is
quite likely that the colored race would still be in bondage in at least
one half of the States. But there was never a more notable example of
manifest destiny than the gradual but certain progress of the opposition
to slavery; for there never was a system, any attempt to defend which
showed how utterly indefensible such a system must needs be. Every
argument advanced in its favor was so manifestly absurd, or so shocking
to the ordinary sense of mankind, that the more it was discussed the
more widespread and earnest became the opposition. Had the slaveholders
been wise, they would never have opened their mouths upon the subject.
But, like the man possessed of the devil, they never ceased to cry, "Let
me alone!" And the more they cried, the more there were who understood
where that cry came from.
In one respect Mr. Madison declared that the memorial of the Friends
demanded attention. If the American flag was used to protect foreigners
in carrying on the slave trade in other countries, that was a proper
subject for the consideration of Congress. "If this is the case," he
said, "is there any person of humanity that would not wish to prevent
them?"[13] But he recognized the limitations of the Constitution in
relation to the importation of slaves into the United States, and the
want of any authority in the letter of the Constitution, or of any wish
on the part of Congress, to interfere with slavery in the States. On
these points he would have a decisive declaration, without agitation,
and with as little discussion as possible, and there would have dropped
the subject. It only needed, he evidently thought, that everybody, North
and South, should understand the Constitution to be a mutual agreement
to let slavery altogether alone, when the bargain would be on both sides
faithfully adhered to.
This was all very well with the numerous persons who were quite
indifferent to the subject, or who thought it very unreasonable in the
blacks not to be quite willing to remain slaves a few hundred years
longer. But there were two other classes to reckon with, and Mr. Madison
was not much inclined to be patient with either of them. To let the
subject alone was precisely what the hot-headed members from the South
were incapable of doing then, as they proved to be incapable of doing
for the next seventy years. On the other hand, all the petitioners could
really hope for was that there should be discussion. The galleries were
crowded at those earliest debates, as they continued to be crowded on
all such occasions in subsequent years. Many went to learn what could be
said on behalf of slavery, who came away convinced that the least said
the better. Agitation might disturb the harmony of the Union, which was
Madison's dread; it might lead to the death of an abolitionist, as it
sometimes did in later times; but it was sure in the end to be the death
of slavery, though its short-sighted defenders could never understand
why. They could never be made to see that its most dangerous foes were
the friends of its own household, who could not hold their tongues; that
for their case all wisdom was epitomized in the vulgar caution "to lie
low and keep dark;" that the exposure of the true character of slavery
must needs be its destruction, and that nothing so exposed it as any
attempt to defend it. Slavery was quite safe under the Constitution, as
Mr. Madison intimated, if its friends would only leave it there and
claim no other protection.
Advocates are never wanting in any court who believe that the most
effective line of defense is to abuse the plaintiff. The Quakers, it was
said, "notwithstanding their outward pretenses," had no "more virtue or
religion than other people, nor perhaps so much." They had not made
the Constitution, nor risked their lives and fortunes by fighting for
their country. Why should they "set themselves up in such a particular
manner against slavery"? Did they not know that the Bible not only
allowed but commended it, "from Genesis to Revelation"? That the Saviour
had permitted it? That the Apostles, in spreading Christianity, had
never preached against it? That it had been--the illustration was not
altogether a happy one--"no novel doctrine since the days of Cain"? The
condition of these American slaves was said to be one of great happiness
and comfort; yet almost in the same breath it was asserted that to
excite in their minds any hope of change would lead to the most
disastrous consequences, and possibly to massacre. The memorialists were
bidden to remember that, even if slavery "were an evil, it was one for
which there was no remedy;" for that reason the North had acquiesced in
it; "a compromise was made on both sides,--we took each other, with our
mutual bad habits and respective evils, for better, for worse; the
Northern States adopted us with our slaves, and we adopted them with
their Quakers." Without such a compromise there could have been no
Union, and any interference now with slavery by the government would end
in a civil war. These people were meddling with what was none of their
business, and exciting the slaves to insurrection. Yet how forbearing
were the people of the Southern States who, notwithstanding all this,
"had not required the assistance of Congress to exterminate the
Quakers!"
This was not conciliatory. Those who had been disposed at the beginning
to meet the petitions with a quiet reply that the subject was out of the
jurisdiction of Congress were now provoked to give them a much warmer
reception. They could not listen patiently to the abuse of the Quakers,
and, though they might acquiesce in the toleration of slavery, they were
not inclined to have it crammed down their throats as a wise,
beneficent, and consistent condition of society under a republican
government. Even Madison, who at first was most anxious that nothing
should be said or done to arouse agitation, while acknowledging that all
citizens might rightfully appeal to Congress for a redress of what they
considered grievances, was moved at last to say that the memorial of the
Friends was "well worthy of consideration." While admitting that under
the Constitution the slave trade could not be prohibited for twenty
years, "yet," he declared, "there are a variety of ways by which it
[Congress] could countenance the abolition, and regulations might be
made in relation to the introduction of [slavery] into the new States to
be formed out of the western territory."
Gerry was still more emphatic in the assertion of the right of
interference. He boldly asserted that "flagrant acts of cruelty" were
committed in carrying on the African slave trade; and, while nobody
proposed to violate the Constitution, "that we have a right to regulate
this business is as clear as that we have any right whatever; nor has
the contrary been shown by anybody who has spoken on the occasion." Nor
did he stop there. He told the slaveholders that the value of their
slaves in money was only about ten million dollars, and that Congress
had the right to propose "to purchase the whole of them; and their
resources in the western territory might furnish them with the means."
The Southern members would, perhaps, have been startled by such a
proposition as this, had he not immediately added that "he did not
intend to suggest a measure of this kind; he only instanced these
particulars to show that Congress certainly had a right to intermeddle
in the business." It is quite likely, had he pushed such a measure with
his well-known zeal and determination, that it would have been at least
received with a good deal of favor; and, as the admirers of Jefferson
are tenacious of his fame as the author of the original Northwest
Ordinance, so Gerry, had he seriously and earnestly urged the policy of
using the proceeds of the sales of territorial lands to remunerate the
owners of slaves for their liberation, would have left behind him a more
fragrant memory than that which clings to him as a minister to France,
and as the "Gerrymandering" governor of Massachusetts. The debate,
however, came to an end at last with no other result than that which
would have been reached at the beginning without debate, except,
perhaps, that the vote in favor of the reports upon the memorials was
smaller than it might have been had there been no discussion.
Within less than two years, however, Warner Mifflin of Delaware, an
eminent member of the Society of Friends, who was one of the first, if
not the first, of that society to manumit his own slaves, petitioned
Congress to take some measure for general emancipation. The petition was
entered upon the journal; but on a subsequent day a North Carolina
member, Mr. Steele, said that, "after what had passed at New York on
this subject, he had hoped the House would have heard no more of it;"
and he moved that the petition be returned to Mifflin and be expunged
from the journal. Fisher Ames explained in a rather apologetic tone that
he had presented the petition at Mr. Mifflin's request, because the
member from Delaware was absent, and because he believed in the right of
petition, though "he considered it as totally inexpedient to interfere
with the subject." The House agreed that the petition should be
returned, and Steele then withdrew the motion to expunge it from the
journal.
In the next Congress, eighteen months afterward, the House took up the
subject of the slave trade, apparently of its own motion, and a bill was
passed prohibiting the carrying on of that traffic from the ports of the
United States in foreign vessels. The question was as inexorable as
death, and the difference in regard to it then was precisely what it
was in the final discussion of the next century which settled it
forever. One set of men was given over to perdition if they dared so
much as talk; the other set talked all the more, and went to the very
verge of the Constitution in act all the more, because they were bidden
neither to speak nor to move. Courage was not one of Madison's marked
characteristics, but he never showed more of it than in his hostility to
slavery.
[Illustration: Fisher Ames]
At the third session of the First Congress, which had adjourned from New
York to Philadelphia, where it met in December, 1790, Madison led his
party in opposition to the establishment of a national bank, which
Hamilton had recommended; and again, as in the adjustment of the
domestic debt, he and his party were defeated. He compared the
advantages and the disadvantages of banks, and possibly he did not
satisfy himself, as he certainly did not the other side, that the weight
of the argument was against their utility. At any rate, he fell back
upon the Constitution as his strongest position. To incorporate a bank
was not, he maintained, among the powers conferred upon Congress. The
Federalists, who were beginning to recognize him as the leader of the
opposition, were quite ready to accept that challenge. "Little doubt
remains," said Fisher Ames in rising to reply, "with respect to the
utility of banks." Assuming that to be settled,--whether he meant, or
not, that such was the conclusion to be drawn from Madison's argument
on that point,--he addressed himself to the constitutional question. If
the incorporation of a bank was forbidden by the Constitution, there was
an end of the matter. If it was not forbidden, but if Congress may
exercise powers not expressly bestowed upon it, and if by a bank some of
the things which the federal government had to do could be best done, it
would be not only right but wise to establish such an agency. This was
the burden of the argument of the Federalists, and Madison and his
friends had no sufficient answer. The bill was at length passed by a
vote of thirty-nine to twenty.
But it had still to pass the ordeal of the cabinet. The President was
not disposed to rely upon his own judgment either one way or the other.
He asked, therefore, for the written opinions of the secretaries of the
treasury and of state, Hamilton and Jefferson, and the attorney-general,
Randolph. The same request was made to Madison, probably more because
Washington held his ability and knowledge of constitutional law in high
esteem than because of the prominent part he had taken in the debate.
Hamilton's argument in favor of the bill was an answer to the papers of
the three other gentlemen, and was accepted as conclusive by the
President.
FOOTNOTE:
[Footnote 13: The most serious difficulty in the way of the final
suppression of the African slave trade in the present century was, that
it could be carried on without molestation in American bottoms, under
the American flag. The ruling power in the United States, from 1787 to
1860, was never willing that their own cruisers should meddle with the
slavers, and resented as an insult to the flag the search, by the
cruisers of other powers, of any vessel under the American flag, though
it might be absolutely certain that she had come straight from the coast
of Africa, and that her "between-decks" was crowded full of negroes to
be sold as slaves in Cuba.]