Philadelphia, May 14, 1783.
Sir:
The President of Congress will of course have transmitted to your
Excellency, the plan lately adopted by Congress for funding the public
debt. This plan was framed to accommodate it to the objections of
some of the States; but this spirit of accommodation will only serve
to render it less efficient, without making it more palatable. The
opposition of the State of Rhode Island, for instance, is chiefly
founded upon these two considerations: the merchants are opposed to any
revenue from trade; and the State, depending almost wholly on commerce,
wants to have credit for the amount of the duties.
Persuaded that the plan now proposed will have little more chance of
success than a better one; and that, if agreed to by all the States,
it will, in a great measure, fail in the execution, it received my
negative. My principal objections were,
_Firstly_: That it does not designate the funds (except the impost)
on which the whole interest is to arise; and by which (selecting
the capital articles of visible property) the collection would have
been easy, the funds productive, and necessarily increasing with the
increase of the country.
_Secondly_: That the duration of the funds is not coextensive with
the debt, but limited to twenty-five years; though there is a moral
certainty, that, in that period, the principal will not, by the present
provision, be fairly extinguished.
_Thirdly_: That the nomination and appointment of the collectors of
the revenue are to reside in each State, instead of, at least the
nomination, being in the United States; the consequence of which will
be, that those States which have little interest in the funds, by
having a small share of the public debt due to their own citizens, will
take care to appoint such persons as are least likely to collect the
revenue.
The evils resulting from these defects, will be, that in many instances
the objects of the revenues will be improperly chosen, and will consist
of a multitude of little articles, which will, on experiment, prove
insufficient; that for want of a vigorous collection in each State, the
revenue will be unproductive in many, and will fall chiefly upon those
States which are governed by most liberal principles; that for want of
an adequate security, the evidences of the public debt, will not be
transferable for any thing like their value; that this not admitting
an incorporation of the creditors in the nature of Banks, will deprive
the public of the benefit of an increased circulation, and of course
will disable the people from paying the taxes for want of a sufficient
medium.
I shall be happy to be mistaken in my apprehensions; but the experiment
must determine.
I hope our State will consent to the plan proposed; because it is her
interest, at all events, to promote the payment of the public debt on
Continental funds (independent of the general considerations of union
and propriety).
I am much mistaken if the debts due from the United States to the
citizens of the State of New-York, do not considerably exceed its
proportion of the necessary funds: of course it has an immediate
interest that there should be a Continental provision for them. But
there are superior motives that ought to operate in every State; the
obligations of national faith, honor, and reputation.
Individuals have been already too long sacrificed to public
convenience. It will be shocking, and indeed an eternal reproach to
this country, if we begin the peaceable enjoyment of our independence
by a violation of all the principles of honesty and true policy.
It is worthy of remark, that at least four-fifths of the domestic debt,
are due to the citizens of the States (from Pennsylvania inclusively)
northward.
I have the honor to be, Sir,
Your most obedient servant,
A. Hamilton.
P. S. It is particularly interesting that the State should have a
representation here. Not only many matters are depending which require
a full representation in Congress (and there is now a thin one), but
those matters are of a nature so particularly interesting to our State,
that we ought not to be without a voice in them. I wish two other
gentlemen of the delegation may appear as soon as possible; for it
would be very injurious for me to remain much longer here. Having no
future views in public life, I owe it to myself, without delay to enter
upon the care of my private concerns in earnest.