part of the plan, and a change might produce objections; that the nature and variety of the imports would require necessarily the collection to be ad valorem on the greater part of them; that the forming of a book of rates would be attended with great difficurties and delays; and that it would be in the power of Congress, by raising the rate of the article, to augment the duty beyond the limitation of five per cent., and that this consideration would excite objections on the part of the states. The motion was negatived.

A motion was made by Mr. HAMILTON, seconded by Mr. WILSON, that, whereas Congress were desirous that the motives and views of their measures should be known to their constituents in all cases where the public safety would admit, when the subject of finances was under debate, the doors of Congress should be open. Congress adjourned, it being the usual hour, and the motion being generally disrelished. The Pennsylvania delegates said, privately, that they had brought themselves into a critical situation by dissuading their constituents from separate provision for creditors of the United States, within Pennsylvania, hoping that Congress would adopt a general provision, and they wished their constituents to see the prospect themselves, and to witness the conduct of their delegates. Perhaps the true reason was, that it was expected the presence of public auditors, numerous and weighty, in Philadelphia, would have an influence, and that it would be well for the public to come more fully to the knowledge of the public finances.

A letter was received from Mr. William Lee, at Ghent, notifying the desire of the emperor of Austria to form a commercial treaty with the United States, and to have a resident from them. Committed to Messrs. Izard, Gorham, and Wilson.

WEDNESDAY, February 19.

The motion made yesterday by Mr. HAMILTON, for opening the doors of Congress when the subject of the finances should be under debate, was negatived; Pennsylvania alone being ay.

A motion was made by Mr. HAMILTON, seconded by Mr. BLAND, to postpone the clause of the report, made by the committee of the whole, for altering the impost, viz., the clause limiting its duration to twenty-five years, in order to substitute a proposition declaring it to be inexpedient to limit the period of its duration; first, because it ought to be commensurate to the duration of the debt; secondly, because it was improper in the present stage of the business, and all the limitation of which it would adınit had been defined in the resolutions of- -, 1782.

Mr. HAMILTON said, in support of his motion, that it was in vain to attempt to gain the concurrence of the states by removing the objections publicly assigned by them against the impost; that these were the ostensible and not the true objections; that the true objection on the part of Rhode Island was the interference of the impost with the opportunity afforded by their situation of levying contributions on Connecticut, &c., which received foreign supplies through the ports of Rhode Island; that the true objection on the part of Virginia was her having little share in the debts due from the United States, to which the impost would be applied; that a removal of the avowed objections would not therefore remove the obstructions, whilst it would admit, on the part of Congress, that their first recommendation went beyond the absolute exigencies of the public; that Congress, having taken a proper ground at first, ought to maintain it till time should convince the states of the propriety of the measure.

Mr. BLAND said, that as the debt had been contracted by Congress with the concurrence of the states, and Congress was looked to for payment by the public creditors, it was justifiable and requisite in them to pursue such means as would be adequate to the discharge of the debt; and that the means would not be adequate, if limited in duration to a period within which no calculations had shown that the debt would be discharged.

On the motion, the states were-New Hampshire, divided; Massachusetts, no; Rhode Island, ay; Connecticut, divided; New York, ay; New Jersey, ay; Pennsylvania, ay; Virginia, no, (Mr. Bland, ay;) North Carolina, ay; South Carolina, ay. Mr. RUTLEDGE said he voted for postponing, not in order to agree to Mr. Hamilton's motion, but to move, and he accordingly renewed the motion made in committee of the whole, viz., that the impost should be appropriated exclusively to the army. This motion was seconded by Mr. LEE.

Mr. HAMILTON opposed the motion strenuously; declared that, as a friend to the army as well as to the other creditors and to the public at large, he would never assent to such a partial distribution of justice; that the different states, being differently attached to different branches of the public debt, would never concur in establishing a fund which was not extended to every branch; that it was impolitic to divide the interests of the civil and military creditors, whose joint efforts in the states would be necessary to prevail on them to adopt a general revenue.

Mr. MERCER favored the measure, as necessary to satisfy the army, and to avert the consequences which would result from their disappointment on this subject. He pronounced, that the army would not disband until satisfactory provision should be made, and that this was the only attainable provision; but he reprobated the doctrine of permanent debt supported by a general and permanent revenue, and said that it would be good policy to separate, instead of cementing, the interests of the army and the other public creditors; insinuating that the claims of the latter were not supported by justice, and that the loan-office certificates ought to be revised.

Mr. FITZSIMMONS observed, that it was unnecessary to make a separate appropriation of the impost to one particular debt; since, if other funds should be superadded, there would be more simplicity and equal propriety in an aggregate fund for the aggregate debt funded, and that, if no other funds should be superadded, it would be unjust and impolitic; that the states whose citizens were the chief creditors of the United States would never concur in such a measure; that the mercantile interest, which comprehended the chief creditors of Pennsylvania, had by their influence obtained the prompt and full concurrence of that state in the impost; and if that influence were excluded, the state would repeal its law. He concurred with those who hoped the army would not disband unless provision should be made for doing them justice.

Mr. LEE contended, that, as every body felt and acknowledged the force of the demands of the army, an appropriation of the impost to them would recommend it to all the states; that distinct and specific appropriation of distinct revenue was the only true system of finance, and was the practice of all other nations who were enlightened on this subject; that the army had not only more merit than the mercantile creditors, but that the latter would be more able, on a return of peace, to return to the business which would support them.

Mr. MADISON said, that, if other funds were to be superadded, as the gentleman (Mr. Rutledge) who made the motion admitted, it was at least premature to make the appropriation in question; that it would be best to wait till all the funds were agreed upon, and then appropriate them respectively to those debts to which they should be best fitted; that it was probable the impost would be judged best adapted to the foreign debt, as the foreign creditors could not, like the domestic, ever recur to particular states for separate payments; and that, as this would be a revenue little felt, it would be prudent to assign it to those for whom the states would care least, leaving more obnoxious revenues for those creditors who would excite the sympathy of their countrymen, and could stimulate them to do justice.

Mr. WILLIAMSON was against the motion; said he did not wish the army to disband until proper provision should be made for them; that if force should be necessary to excite justice, the sooner force was applied the better.

Mr. WILSON was against the motion of Mr. Rutledge; he observed that no instance occurred in the British history of finance in which distinct appropriations had been made to distinct debts already contracted; that a consolidation of funds had been the result of experience; that an aggregate fund was more simple, and would be most convenient; that the interest of the whole funded debt ought to be paid before the principal of any part of it; and, therefore, in case of surplus of the impost beyond the interest of the army debt, it ought, at any rate, to be applied to the interest of the other debts, and not, as the motion proposed, to the principal of the army debt. He was fully of opinion that such a motion would defeat itself; that, by dividing the interest of the civil from that of the military creditors, provision for the latter would be frustrated.

On the question on Mr. Rutledge's motion, the states were - New Hampshire, no; Massachusetts, no; Connecticut, no; New Jersey, no; Virginia, no; (Mr. Lee and Mr. Mercer, ay ;) North Carolina, no; South Carolina, ay.

On the clause reported by the committee of the whole, in favor of limiting the impost to twenty-five years, the states were - New Hampshire, ay; Massachusetts, ay;

Connecticut, divided; (Mr. Dyer, ay; Mr. Wolcott, no;) New York, no; New Jersey, no; Pennsylvania, ay; (Mr. Wilson and Mr. Fitzsimmons, no ;) Virginia, ay; (Mr. Bland, no;) North Carolina, ay; South Carolina, ay: so the question was lost. On the question whether the appointment of collectors of the impost shall be left to the states, the collectors to be under the control of, and be amenable to, Congress, there were seven ayes; New York and Pennsylvania being no, and New Jersey divided.

THURSDAY, February 20.

The motion for limiting the impost to twenty-five years having been yesterday lost, and some of the gentlemen who were in the negative desponding of an indefinite grant of it from the states, the motion was reconsidered.

Mr. WOLCOTT and Mr. HAMILTON repeat the inadequacy of a definite term. Mr. RAMSAY and Mr. WILLIAMSON repeat the improbability of an indefinite term being acceded to by the states, and the expediency of preferring a limited impost to a failure of it altogether.

Mr. MERCER was against the impost altogether, but would confine his opposition within Congress. He was in favor of the limitation, as an alleviation of the evil.

Mr. FITZSIMMONS animadverted on Mr. Mercer's insinuation yesterday touching the loan-office creditors, and the policy of dividing them from the military creditors; reprobated every measure which contravened the principles of justice and public faith; and asked, whether it were likely that Massachusetts and Pennsylvania, to whose citizens half the loan-office debt was owing, would concur with Virginia, whose citizens had lent but little more than three hundred thousand dollars, in any plan that did not provide for that in common with other debts of the United States. He was against a limitation to twenty-five years.

Mr LEE wished to know whether by loan-office creditors were meant the original subscribers or the present holders of the certificates, as the force of their demands may be affected by this consideration.

Mr. FITZSIMMOMS saw the scope of the question, and said that, if another scale of depreciation was seriously in view, he wished it to come out, that every one might know the course to be taken.

Mr. GORHAM followed the sentiments of the gentleman who last spoke; expressed his astonishment that a gentleman (Mr. Lee) who had enjoyed such opportunities of observing the nature of public credit should advance such doctrines as were fatal to it. He said it was time that this point should be explained; that if the former scale for the loan-office certificates was to be revised and reduced, as one member from Virginia (Mr. Mercer) contended, or a further scale to be made out for subsequent depreciation of certificates, as seemed to be the idea of the other member, (Mr. Lee,) the restoration of public credit was not only visionary, but the concurrence of the states in any arrangement whatever was not to be expected. He was in favor of the limitation, as necessary to overcome the objections of the states. Mr. MERCER professed his attachment to the principles of justice, but declared that he thought the scale by which the loans had been valued unjust to the public, and that it ought to be revised and reduced.

On the question for the period of twenty-five years, it was decided in the affirmative, seven states being in favor of it; New Jersey and New York only being no. Mr. MERCER called the attention of Congress to the case of the goods seized under a law of Pennsylvania, on which the committee had not yet reported, and wished that Congress would come to some resolution declaratory of their rights, and which would lead to an effectual interposition on the part of the legislature of Pennsylvania. After much conversation on the subject, in which the members were somewhat divided as to the degree of peremptoriness with which the state of Pennsylvania should be called on, the resolution on the Journal, which is inserted below, was finally adopted; having been drawn up by the secretary, and put into the hands of a member, the resolution passed without any dissent.*

Resolved, That it does not appear to Congress that any abuse has been made of the passport granted by the commander-in-chief for the protection of clothing and other necessaries sent from New York, in the ship Amazon, for the use of the British and German prisoners of war.

The result proved that mildness was the soundest policy the legislature, in consequence, having declared the law under which the goods were seized to be void, as contradictory to the Federal Constitution. Some of the members, in conversation, said that, if Congress had declared the law to be void, the displeasure of the legislature might possibly have produced a different issue

Resolved, That the goods imported in the said ship Amazon, and contained in the returns laid betor Congress by the assistant secretary at war, are fully covered and protected by the said passport, and ought to be sent with all expedition, and without any let or hinderance, to the prisoners for whose use they were designed.

[The evening of this day was spent at Mr. Fitzsimmons's by Mr. Gorham, Mr. Hamilton, Mr. Peters, Mr. Carroll, and Mr. Madison. The conversation turned on the subject of revenue, under the consideration of Congress, and on the situation of the army. The conversation on the first subject ended in a general concurrence (Mr. Hamilton excepted) in the impossibility of adding to the impost on trade any taxes that would operate equally throughout the United States, or be adopted by them. On the second subject, Mr. Hamilton and Mr. Peters, who had the best knowledge of the temper, transactions, and views of the army, informed the company, that it was certain that the army had secretly determined not to lay down their arins until due provision and a satisfactory prospect should be afforded on the subject of their pay; that there was reason to expect that a public declaration to this effect would soon be made; that plans had been agitated, if not formed, for subsisting themselves after such declaration; that, as a proof of their earnestness on this subject, the commander was already become extremely unpopular, among almost all ranks, from his known dislike to every unlawful proceeding; that this unpopularity was daily increasing and industriously promoted by many leading characters: that his choice of unfit and indiscreet persons into his family was the pretext, and with some the real motive; but the substantial one, a desire to displace him from the respect and confidence of the army, in order to substitute General ******* as the conductor of their efforts to obtain justice. Mr. Hamilton said, that he knew General Washington intimately and perfectly; that his extreme reserve, mixed sometimes with a degree of asperity of temper, (both of which were said to have increased of late,) had contributed to the decline of his popularity; but that his virtue, his patriotism and firmness, would, it might be depended upon, never yield to any dishonorable or disloyal plans into which he might be called; that he would sooner suffer himself to be cut to pieces; that he, (Mr. Hamilton,) knowing this to be his true character, wished him to be the conductor of the army in their plans for redress, in order that they might be moderated and directed to proper objects, and exclude some other leader who might foment and misguide their councils; that with this view he had taken the liberty to write to the general on this subject, and to recommend such a policy to him.]

FRIDAY, February 21.

Mr. MERCER made some remarks tending to a reconsideration of the act de claring general funds to be necessary, which revived the discussion of that subject. Mr. MADISON said, that he had observed, throughout the proceedings of Congress relative to the establishment of such funds, that the power delegated to Congress by the Confederation had been very differently construed by different members, and that this difference of construction had materially affected their reasonings and opinions on the several propositions which had been made; that, in particular, it had been represented by sundry members that Congress was merely an executive body; and, therefore, that it was inconsistent with the principles of liberty and the spirit of the constitution, to submit to them a permanent revenue, which would be placing the purse and the sword in the same hands; that he wished the true doctrine of the Confederation to be ascertained, as it might, perhaps, remove some embarrassments; and towards that end would offer his ideas on the subject.

He said, that he did not conceive, in the first place, that the opinion was sound, that the power of Congress, in cases of revenue, was in no respect legislative, but merely executive; and, in the second place, that, admitting the power to be executive, a permanent revenue collected and dispensed by them in the discharge of the debts to which it should be appropriated would be inconsistent with the nature of an executive body, or dangerous to the liberties of the republic.

As to the first opinion, he observed that, by the Articles of Confederation, Congress had clearly and expressly the right to fix the quantum of revenue necessary for the public exigencies, and to require the same from the states respectively, in proportion to the value of the land; that the requisitions thus made were a law to the states, as much as the acts of the latter for complying with them were a law to their individual members; that the Federal Constitution was as sacred and obligatory as the internal constitutions of the several states; and that nothing could justify the

states in disobeying acts warranted by it, but some previous abuse and infraction on the part of Congress; that as a proof that the power of fixing the quantum, and making requisitions of money, was considered as a legislative power over the purse, he would appeal to the proposition, made by the British minister, of giving this power to the British Parliament, and leaving to the American assemblies the privilege of complying in their own mode, and to the reasonings of Congress and the several states on that proposition. He observed, further, that by the Articles of Confederation was delegated to Congress a right to borrow money indefinitely, and emit bills of credit, which was a species of borrowing, for repayment and redemption of which the faith of the states was pledged, and their legislatures constitutionally bound. He asked whether these powers were reconcilable with the idea that Congress was a body merely executive. He asked what would be thought in Great Britain, from whose constitution our political reasonings were so much drawn, of an attempt to prove that a power of making requisitions of money on the Parliament, and of borrowing money, for discharge of which the Parliament should be bound, might be annexed to the crown without changing its quality of an executive branch, and that the leaving to the Parliament the mode only of complying with the requisitions of the crown would be leaving to it its supreme and exclusive power of legislation.

As to the second point, he referred again to the British constitution, and the mode in which provision was made for the public debts; observing that, although the executive had no authority to contract a debt, yet, that when a debt had been authorized or admitted by the Parliament, a permanent and irrevocable revenue was granted by the legislature, to be collected and dispensed by the executive; and that this practice had never been deemed a subversion of the constitution, or a dangerous association of a power over the purse with the power of the sword.

*

If these observations were just, as he conceived them to be, the establishment of a permanent revenue not by any assumed authority of Congress, but by the authority of the states at the recommendation of Congress, to be collected and applied by the latter to the discharge of the public debts- could not be deemed inconsistent with the spirit of the Federal Constitution, or subversive of the principles of liberty; and that all objections drawn from such a supposition ought to be withdrawn. Whether other objections of sufficient weight might not lie against such an establishment, was another question. For his part, although for various reasons he had wished for such a plan as most eligible, he had never been sanguine that it was practicable; and the discussions which had taken place had finally satisfied him, that it would be necessary to limit the call for a general revenue to duties on commerce, and to call for the deficiency in the most permanent way that could be reconciled with a revenue established within each state, separately, and appropriated to the common treasury. He said, the rule which he had laid down to himself, in this business, was to concur in every arrangement that should appear necessary for an honorable and just fulfilment of the public engagements, and in no measure tending to augment the power of Congress, which should appear to be unnecessary; and particularly disclaimed the idea of perpetuating a public debt.

Mr. LEE, in answer to Mr. Madison, said the doctrine maintained by him was pregnant with dangerous consequences to the liberties of the confederated states; that, notwithstanding the specious arguments that had been employed, it was an

Among other reasons, privately weighing with him, he had observed that many of the most respectable people of America supposed the preservation of the Confederacy essential to secure the blessings of the revolution, and permanent funds for discharging debts essential to the preservation of union. A disappointment to this class would certainly abate their ardor, and, in a critical emergency, might incline them to prefer some political connection with Great Britain, as a necessary cure for our internal instability. Again, without permanent and general funds, he did not conceive that the danger of convulsions from the army could be effectually obviated. Lastly, he did not think that any thing would be so likely to prevent disputes among the states, with the calamities consequent on them. The states were jealous of each other, each supposing itself to be, on the whole, a creditor to the others. The Eastern States, in particular, thought themselves so with regard to the Southern States. (See Mr. Gorham, in the debates of this day.) If general funds were not introduced, it was not likely the balances would ever be discharged, even if they should be liquidated. The consequence would be a rupture of the confederacy. The Eastern States would, at sea, be powerful and rapacious; the Southern, opulent and weak. This would be a temptation; the demands on the Southern States would be an occasion; reprisals would be instituted; foreign aid would be called in by, first, the weaker, then the stronger side; and, finally, both be made subservient to the wars and politics of Europe.