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A Century of Lawmaking for a New Nation: U.S. Congressional Documents and Debates, 1774-1875
Journals of the Continental Congress --WEDNESDAY, FEBRUARY 8, 1786
Congress assembled. Present as before.
Congress resumed the consideration of the motion of Mr. [Charles] Pinckney, which was under debate yesterday; during the debate, a report was made by the board of treasury, which being read:
The Board of Treasury to whom was referred the Memorial of Monsieur Otto Chargé des Affaires of His Most Christian Majesty have maturely considered that part of the Memorial which relates to the Loans made by France and beg leave to Report--
That the Terms mentioned by the Chargé des Affaires of His Most Christian Majesty for the payment of the Instalments of the Principal due on the Contract for Eighteen Million Livres are in conformity with the said Contract; but that the Interest due thereon (though accruing from the Date of the Peace) is not payable 'till the first Installment becomes due, that is to say on the 3d. day of September, 1787.
That Monsieur Otto's statement of the periods assigned for the payment of the Principal and Interest of the Ten Million of Livres borrowed of Holland and guarranteed by France; and of the further Sum of Six Million of Livres borrowed of France is conformably to the Contracts of the 16th July, 1782, and 25th February, 1783.
That from the Tenor of these Contracts it appears that the United States are bound to pay the Court of France in the present Year the Interest due on the Ten Million of Livres borrowed of Holland, and Guarranteed by France, being four hundred thousand Livres; together with three Years Arrearage of Interest due on the first day of January, 1787, on the Six Million Loan, amounting together with the Sum first mentioned, to One Million, three hundred thousand Livres, instead of Two Million four hundred thousand Livres as stated by the said Chargé des Affaires--
The Board beg leave to observe that although the amount of Interest actually payable on the French Loans, to the date above
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mentioned, does not exceed the Sum of One Million three hundred thousand Livres, the Interest which will accrue to the 1st January, 1787, inclusive, amounts to Four Million of Livres, that is to say
making in the whole, the Sum of Four Million of Livres, which is equal to Seven hundred and forty thousand seven hundred and forty Dollars.
That it has been evidently the wish of Congress to prevent this vast accumulation of Foreign Interest appears from their Requisitions for the Years 1784 and 1785, in which they call upon the several States, for the full Sum of Specie necessary to defray the Charges of the Federal Government and of Foreign Interest. With what Success these Requisitions have been attended, will best appear by comparing the Sums of Specie received (as Extracted from the Books of the Treasury) with the Amount of the Specie called for on the Requisitions above mentioned.
The Receipts of the late Superintendant of Finance on account of Taxes collected in pursuance of those Requisitions,
From this Statement it appears, that the Sum of Two Million, four hundred and fifty seven thousand, nine hundred and eighty seven Dollars has been Collecting in the space of four Years; which make the Average Collection amount to 614,497 Dollars. It is to be observed however, that the Receipts of the last fourteen Months amounts only to 432,897 Dollars, which is at the rate of 371,052 per
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Year. A Sum short of what is essentially necessary for the support of the Federal Government on the most contracted Establishment and in time of profound Peace; without leaving a particle for the payment of Foreign Interest, or for providing against those Contingencies which the interrrupted state of our Commerce and the situation of the Frontier Posts render essentially necessary to the Security, Interest and Honor of the Nation.
In this critical situation of Public Affairs, it becomes the immediate and indispensible duty of this Board to inform Congress, that there is not the least probability of an increase in the public Revenue during the present Year, unless a speedy and operative System of Revenue is adopted for bringing into the common Treasury those Sums in actual Specie, which uniform experience has demonstrated cannot be derived from the ordinary mode of Requisition.
Though some of the objects of Disbursements above mentioned are in the year 1787, the periods at which they become due will shew the absolute necessity there is of making an immediate provision for them.
The Board beg leave to observe that if the Collection of the General Import agreably to the Resolves of Congress of the 18th April, 1783, was now in full force, it would not in their Opinion produce sufficient Funds for discharging these Arrearages of Interest and the other Sums above mentioned at the proper periods, much less provide for the Installments of Principal on the Loan of Eighteen Millions, and of Ten Million of Livres; the first of which commences on the 3d. September and the second on the 5th November, 1787, In which Year the United States are bound to pay in Interest and Principal of Public Loans, the sum of One Million three hundred and ninety two
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thousand and fifty-nine Dollars, exclusive of the Interest due on the Spanish and Private Loans, and the Salaries of Foreign Ministers and Agents; and that of course more vigorous exertions must be made to make up for the deficiencies of Receipts on the Requisitions of the Year 1784 and 1785 than would have been the case, if the Revenue System of the 18th April, 1783, had been adopted at an earlier period by all the Members of the Union.
It is with the utmost regret that this Board are constrained to Observe, that although frequent Applications have been made by the Ministers of His Most Christian Majesty, and by the express directions of their Sovreign, to know with precision, what provision had been made for the payment of the Principal and Interest of the French Loans; and although the United States in Congress assembled by their Resolves of the 16th April, 1784, Pledged themselves "That they would with the greatest care adopt subsequent measures for the punctual payment of the Principal and Interest of the Debt due to France," yet no encrease of the Public Revenue has taken place in consequence of the earnest recommendations of the United States in Congress to the several States, but, on the contrary, the Collection of Taxes has been less productive than it was before the Requisition of the 27th April, 1784. Under these circumstances it becomes a duty which this Board owe to themselves and to Congress to declare explicitly, that the small product of the Taxes and the irregularity in their Collection, prevents them altogether from deriving any advantage from an Anticipation of the Revenue; and that they can only be responsible for the faithful Administration of the actual Funds which may come into the Public Treasury.
The Crisis is arrived when the People of these United States, by whose Will and for whose Benefit the Federal Government was instituted, must decide whether they will support their Rank as a Nation by maintaining the Public Faith, at home and abroad; or whether for want of a timely exertion in Establishing a General Revenue and giving Strength to the Confederacy, they will hazard, not only the existence of the Union, but of those great and invaluable privileges, for which they have so arduously and honorably contended.
Impressed with a persuasion, that a fair statement of the Sums for which a timely provision is necessary, accompanied with a serious and candid Appeal to the Honor and Interest of the several States cannot fail to have effect upon those to whom the Welfare of the Citizens is
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entrusted, The Board beg leave to Annex to this Report a Statement of the several Installments of the Principal and Interest due on Foreign Loans; and to submit to the consideration of Congress the following Resolves.
Resolved, That a Copy of the Report of the Commissioners of the Board of Treasury on the Memorial of Monsieur Otto, Chargé des Affaires of His Most Christian Majesty, be transmitted to the Legislatures of the several States, and that they be called upon in the most earnest manner to enforce the Collection of Taxes in the several States, that the United States may be enabled to Discharge those Engagements with Foreign Nations which have been entered into for the Common Benefit.
Resolved, That the Requisitions of Congress of the 27th April, 1784, and 27th September, 1785, cannot be considered as the Establishment of a System of General Revenue in Opposition to that recommended to the several States by the Resolves of Congress of the 18th of Apr., 1783. That the said Requisitions were adopted only for making a Temporary provision for the Exigencies of Government, and the payment of the National Interest; and that Congress have ever trusted that the good Sense and Experience of the several States would soon impress on them the necessity of adopting in the fullest manner the Resolves above mentioned.
Resolved, That the Resolves of the 18th April, 1783, be again Recommended to the serious consideration of the Legislatures of those States which have not fully complied with the same, that they be earnestly called upon to adopt the same; and not to hazard the Welfare and Harmony of the Union by withholding their Assent to those Measures which in the Opinion of the other Members of the Confederacy are essential to the Interest, Honor, and Security of the Nation.
Resolved, That while the United States in Congress are deprived of the Means of satisfying those Engagements which they have Constitutionally entered into for the common Benefit of the Union: they cannot be responsible for those Evils which will inevitably flow from a Violation of the Public Faith and of those principles of Justice which are the only solid Basis of the Honor and prosperity of Nations.
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All which is with deference to the Judgement of Congress Submitted.1
[Note 1: 1 This report, signed by Samuel Osgood, Walter Livingston and Arthur Lee, s in the Papers of the Continental Congress, No. 138, II, folio 223. Thomson has indorsed it: "Feby 8, 1786 Referred to Mr. King, Mr. Pinckney, Mr. Keen, Mr. Monroe, Mr. Pettit. March 2, 1786 Referred to Mr. Pinckney, Mr. King, Mr. Lawrance." Both of these indorsements he, afterwards, crossed off. The statement mentioned by the Board bears the title "Schedule of the French and Dutch Loans" and is in No. 144, folio 200. The "Schedule of the Spanish Loan" is on folio 205. See post, February 9.]
February 7th. 1786
Ordered, That the said report, together with the motion under debate, and the report which was postponed, be referred to a committee of five.2
[Note 2: 2 This committee was as noted in footnote to the report. Committee Book No. 190 notes this same reference and that a report was rendered by the committee of five on February 13.]
Office of Secretary of Congress,
Feby. 8, 1786.
On the petition of Stephen Ranney stating that in pursuance of the Act of 20 feby., 1782, he has made application to the general Assembly of the state of Connecticut of which he is a member for his pay and depreciation and that the legislature has refused him.
The Secretary of Congress reports That the Act of 20 feby. recommends to the states to settle and pay their respective citizens who were officers in the hospital departmt. only the depreciation of their pay and that the application to the legislature for the nominal amount of the wages said to be due him was irregular
The Secretary is therefore of opinion
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That the petition of Stephen Ranney be referred to the Comrs. for the hospital acc ts. board of treasury to report whether any Passed 9. or what wages are due the petitioner.1
[Note 1: 1 This report is in the Reports of the Secretary of Congress, No. 180.
On this day, according to indorsement, was read the report of the Committee of January 24 on the letter of Cyrus Griffin. It is in the writing of Charles Pinckney and is in the Papers of the Continental Congress, No. 19, II, folio 535. It was passed verbatim on February 9 and is there spread, in full, on the Journal.
Also on this day the report of the Commissioners of Army Accounts on the petition of William Smith for pay and rations as an engineer in 1776 was read. It is in No. 62, folio 107. See ante, January 26.
Also, according to Committee Book No. 190, a petition from Paul Noyes for payment for cartridge boxes furnished in 1778, was this day read and referred to the Board of Treasury to report. A report was rendered January 26, 1788 and read in Congress February 1, 1788. The petition is in No. 42, V, folio 465.
Also, according to indorsement, were read two letters from George Rogers Clark and Richard Butler, Commissioners for treating with the Western Indians, dated November 10 and November 26, 1785. They are in No. 56, folios 333 and 837.]
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