University of Virginia Library

FEBRUARY 24. ASSUMPTION OF STATE DEBTS

Mr. Madison observed on the measure, that the principle
of it is in favor of the United States, so far as it may tend to
bring about a final settlement and payment of all the accounts
between the United States and the individual States. I believe
this to be, however, a work of amazing difficulty, though
not absolutely impossible. If it should be accomplished, it
must go at least hand in hand with the Secretary's plan; and
if it can be accomplished, it will do more honor to the revolution
in our Government than almost any other measure.

I acknowledge that I cannot subscribe to all the reasons
which some gentlemen urge. I am far from thinking that
the assumption of the State debts will be the means of keeping
the debts dispersed throughout the States. The assumption
of those debts will give them, immediately, the character of
debts of the United States; they will be embarked in the
same bottom; they will take the same course, and, of consequence,
will arrive at the same place where it is acknowledged
the domestic debts of the United States, by degrees, have
assembled. Whether they will remain in this place, or flow
out of the United States altogether, is a question which time
will decide. I look for such a revolution of the debt as will
place the greatest part of it in foreign hands.

Neither do I subscribe to the opinion of the gentleman from
Maryland (Mr. Stone) that the United States can raise more
revenue by the exercise of a sole authority, than by the concurrent
operation of the General and State Governments.
There are, I conceive, objects of taxation of three kinds: The
first is that which can only be operated upon by the United
States; the second, which can be operated upon by the United
States and individual States jointly; and, in the last place,
such as can be best operated upon by the individual States
only.

An impost or excise can be best regulated by the sole authority
of the United States. Some taxes can be collected
by the two Governments, without any interference: the land
tax generally falls under this description; but in some particular
cases, the local authority alone can make the proper
provision. I conclude, therefore, that the authority of the
United States and individual States, taken together, will draw
more revenue than either can separately draw from the same
sources.

But if we can accomplish the great object of doing full justice
in so complicated a case, perhaps it will reward us for all
the difficulties and sacrifices we shall be compelled to make;
but, in order to accomplish it, we must go much further than
the object of the proposition on the table.

Some gentlemen have made the passage of this resolution
a condition of providing for the acknowledged debt of the
United States. I think this a preposterous condition, and a
language improper to be held, after the decision which has
taken place. In priority of time and obligation, we ought to
provide for the acknowledged debt. Before we determine to
enter into a new obligation, we should see how far we are
able to discharge those positively due by us. The connexion
between these resolutions is not such as to require or justify
the condition. The plan of the Secretary draws a distinction
between the two debts.

If we are to make a common stock of the debts of the States,
not yet discharged, it can only be justified by Securing provision
for those which are discharged; with this view, therefore
I will now move to add to the resolution these words: "that
effectual provision be, at the same time made for liquidating
and crediting to the States, the whole of their expenditure
during the war, as the same hath been or may be stated for
the purpose: and, in such liquidation, the best evidence shall
be received that the nature of the case will permit."

It may be said, that this is a superfluous condition; because
there is a Board in existence charged with the trust; but, sir,

their power does not reach the great object contemplated.
The limitation act has already barred a great number of
equitable claims of one State; perhaps there are other States
in the same predicament. I do not know whether the power
of the Board has a latitude sufficient to receive such evidence
as the nature of the case will permit; and if adequate provision
is not made on this head, a great deal more injustice will
be done than by a refusal to assume the State debts.[136]

I hope I shall be excused for connecting these provisions;
because I think it impossible to separate them, in justice of
propriety. If, by providing for the first, we can secure a provision
for the last, we may do great honor to the councils of
America, and establish its character for equity and justice.
If we do not wish to decide precipitately on the question, I
shall be content to delay it; and perhaps gentlemen may be
impressed with the propriety of doing so till they take a view
of the funds which are in contemplation, and see how effective
and adequate they are likely to prove.