1790 Issue of Gazette of the United States with Debates on Debt Assumption
4pp of a bifolium, measuring 10" x 16.5", New York, dated June 23, 1790. An issue of the "Gazette of the United States", No. 21 of Volume II, Whole No. 125, containing the continuing debates in Congress on the Federal assumption of state debts. Also includes the establishment of the Post Office and an anecdote of two black men in France. Published by John Fenno. The paper has flattened folds, with light toning, foxing, and soiling throughout. Slightly rough left edge from being removed from a larger volume. Overall, very good.
"On the Means of Preserving the Union of the American States. The present Constitution of the United States appears to be excellent in contemplation; and if the harmony of the States should not be disturbed by groundless jealousies, it bids fair to be durable and efficient in practice…The experiment is curious, and much wisdom and prudence may render it successful. What then are the probable means of perpetuating our present establishments? Patriotism and the sword are not the means. I conceive the means to consist solely in a union of interests. I. -All debts contracted during the late war, and in the common cause, must be made a common charge against the Union, and the creditors must all look to the fame authority for payment, must depend on the fame resources, and have the offer of equal compensation. Divide the debts, divide the resources, leave the different State legislatures to make various unequal provisions for payment, and a hostility will immediately commence between the general and particular governments, and between the different descriptions of creditors. To sever our Union forever, nothing is wanted, but to aet three or four States contending with Congress about the sources of revenue; and unless the debts should be assumed and made a common charge. nothing but infinite power could prevent such a contention…"
"Mr Boudinot then rose and said- I am one of those, Mr. Chairman, who consider the subject now before you of as much importance as any that has yet required the attention of Congress. When it was first brought forward, it was new to me; I therefore determined in my own mind, patiently to hear both sides of the question, and to weigh every argument before I drew any positive conclusion: being also a State creditor (tho' in the habit of receiving interest from the State) my fears were excited, least self-interest might mislead my judgment…I have contented myself with a silent vote, and should have still continued in the fame disposition, had not the gentleman who spoke on this subject, when it was last under consideration, advanced some arguments and drew certain conclusions from them, that struck me as neither founded in fact or reason… It has been generally denominated 'the assumption of the State debts;' from whence a bye stander might suppose that the States, or some individual State, had called upon us to assume a debt or debts that we owed to them; but nothing is further from the truth. What is the subject before us ? It is an application of our creditors, on which a question arises, whether a certain species of debt, evidenced by certificates from an individual State, is part of the domestic debt of the United States, or whether it is the private debt of the individual State?.."
The idea for Federal assumption of state debts was first put forward by Secretary of the Treasury Alexander Hamilton in 1790 in his "Report on the Public Credit." The concept of the national government assuming responsibility for paying the debts of all 13 states as well as the debts of the national government was highly controversial and highly criticized, notably by Thomas Jefferson. Southerners also opposed the idea because they saw it as an act to aid Northern financial interests. However, a compromise was finally reached by Hamilton, Jefferson, and Madison, which allowed for the assumption of state debts in exchange for the U.S. capital being moved south. The assumption of debt was executed with the passage of the Funding Act of 1790 and helped bolster the country's credit both at home and abroad. This good line of credit ultimately allowed for the Louisiana Purchase in 1803 and for financing the War of 1812.
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