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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 --SATURDAY, OCTOBER 21, 1786.
Congress assembled. Present, as yesterday.
The Board of Treasury to whom was referred an Order of the 20th October instant, to devise Ways and Means without delay, for the Pay and Support of the Troops of the United States upon the present Establishment, beg leave to Report the following Resolves:
Resolved, That the Board of Treasury be authorised and directed to open a Loan immediately to the amount of Five hundred thousand Dollars at Six per Cent Interest per Annum.
Resolved, That Congress will, without delay, make a special Requision for reimbursing the Lenders on the above Loan, their Principal and Interest.
Resolved, That as a Collateral Security, the proceeds of the first half Million of Acres of the Western Territory, which shall be sold in pursuance of the Acts of Congress, be, and it is hereby pledged to the Subscribers to the above Loan.
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Resolved, That a Committee be appointed who together with the Commissioners of the Board of Treasury, and the Secretary at War, shall agree with such Gentlemen as are competent to undertake the same, for the Pay, Cloathing, and Rations necessary for the support of the Troops on the present Establishment, to the last Day of December, 1783, unless sooner discharged.
All which is humbly Submitted.1
[Note 1: 1 This report, signed by Samuel Osgood, Walter Livingston and Arthur Lee, is in the Papers of the Continental Congress, No. 139, folio 411. According to indorsement it was passed October 21. The adopted resolves are entered in different handwritings on the blank sheet of the report.]
October 21st, 1786.
On the report of the board of treasury, pursuant to the Order of yesterday, to devise ways and means for the pay and support of the troops of the United States upon the present establishment,
Resolved unanimously, That the several states in the Confederacy be, and they are hereby required to pay into the federal treasury, on or before the 1st day of June, 1787, their respective quotas of the sum of five hundred and thirty thousand dollars in specie, which quotas are as follows:
Which sums, when paid, shall be passed to the credit of the states respectively, on the terms prescribed by the resolve of Congress of the 6th day of October, 1779; and that the moneys arising from the said requisition be, and hereby are appropriated for the pay and support of the troops on the present establishment.
Resolved unanimously, That the board of treasury be, and they are hereby authorised and directed to open a loan immediately to the amount of five hundred thousand dollars,
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at six per cent. per Annum, on the credit of the foregoing requisition, which they are hereby authorised to pledge to the lenders for the faithful reimbursement of the moneys loaned with the interest thereof.
The Committee consisting of Mr. [Charles] Pettit, Mr. [Henry] Lee, Mr. [Charles] Pinckney, Mr. [John] Henry, and Mr. [Melancton] Smith to whom were referred a letter from the War Office with the papers enclosed containing intelligence of the hostile movements of the Indians in the western country, and a letter of the 18 instant from the Secretary at War, suggesting the imminent danger of the public stores, deposited in the arsenal at Springfield in the State of Massachusetts from the insurrections and disorders prevailing in that state, having reported--
That from the facts stated in the said letter from the Secretary at War, and other authentic information it appears that a dangerous insurrection has taken place in divers parts of the State of Massachusetts which is rapidly extending its influence; that the insurgents have already, by force of arms, suppressed the administration of Justice in several counties.
That though the legislature of the sd. state is now in sessions, yet from the circumstances attending it, it would undoubtedly defeat the object of the federal interposition should a formal application for the same be made. That nevertheless it appears to the committee that the aid of the federal government is necessary to stop the Progress of the insurgents; that such Aid is earnestly desired by the Governor and Council, tho' particular Circumstances prevent its being applied and in a more formal Manner; and that there is the greatest reason to believe that, unless speedy and effectual measures shall be taken to defeat their designs they will possess themselves of the Arsenal at Springfield, subvert the constitutional government, and not only reduce that Commonwealth to a State of Anarchy and Confusion, but probably involve the United States in the Calamities of a civil war.
Under such Circumstances the committee conceive that the United States are not only bound by the confederation and good faith, but strongly urged by the Calls of good Policy and sympathetic Affection prompted by friendship, affection, and sound policy to be prepared to extend such aid to the State of Massachusetts as may be necessary to restore the government to the full exercise of its constitutional
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authority, and to afford protection to the important public stores deposited within that state. For these purposes the committee think it proper that a body of troops should be immediately raised under the authority of the United States; but as it is not expedient that these causes should be publickly assigned for the raising of such troops, especially as the other Matters referred to the Consideration of the committee afford sufficient ground to authorize the measure, they have thought it proper, in a separate report on the intelligence received from the Western Country, to recommend the Augmentation of the troops in the service of the United States. And as these troops are proposed to be raised chiefly in the eastern states, they may probably effect these salutary purposes before they are moved to the Western Country.
Resolved unanimously, That Congress agree to the said report.
Resolved un., That although the present condition of Massachusetts demand immediate preparatory arrangements for the interposition of the Union when called for, and the happiness of the U.S. require the adoption of measures calculated to crush the insurrection in that state still in the present embarrassments of the federal finance Congress would not hazard the perilous step of putting arms into the hands of men whose fidelity must in some degree depend on the faithful payment of their wages had they not the fullest confidence from authentic and respectable information of the most liberal exertions of the money holders in the State of Massachusetts and the other States in filling the loan authorised by the resolve of Congress of this date.1
[Note 1: 1 This proceeding is entered by Thomson, in Secret Journal, Domestic, No. 3. The words lined out so appear in the report of the committee and not in the Journal. This report, in the writing of Charles Pettit, with changes by John Henry and Charles Thomson is in the Papers of the Continental Congress, No. 30, folio 405. It is indorsed: "Private report * * * passed 21 Oct. 1786." Thomson has entered on it the two resolves as above. See ante, October 20. An interesting letter from Rufus King to Charles Thomson, dated December 10, 1786, informing as to Shays' Rebellion, is in No, 59, III, folio 109.]
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The Board of Treasury to whom was referred a Motion of the Honorable the Delegates of the State of Massachusets for prolonging the receipt of Indents of Interest on the Requisition of the 27th. September, 1785, beyond the first of January next, the time prescribed by the said Act, beg leave to Report:
That the amount of Indents of Interest already transmitted to the Loan Office of the State of Massachusets, is 397,500 Dolls. out of which had been issued to the 30th. September last, 292,117 Dollars, which is nearly the amount of the proportion of Indents which is receivable on the Quota of that State on the Requisition of the 27th. September, 1785.
That previous to the first of January next, the Commissioner of the Loan Office in the State of Massachusets will in all probability issue as many Certificates, as will be the amount of the Interest due on the Domestic Debt of the United States, belonging to the Citizens of that State; and beyond the Sum which can be received within that State, on its Quota of the Requisition of the 27th. September, 1785.
That although the Requisition of the 27th. Septr. 1785, prescribed the first day of May last for completing the payment of the Specie Quota due on the said Requisition, no payment in Specie has yet been made by any States in pursuance thereof, excepting New York, Pennsylvania, and South Carolina.
That to extend the time for receiving Indents of Interest in the several States on the Requisition of the 27th. September, 1785, without taking any measures to hasten the Collection of their respective Specie Quotas, would in the opinion of this Board, encourage that disposition to procrastinate the payment of the Specie Balances due from the several States, whose consequences are already so injurious to the welfare of the Confederacy.
The Board are sensible, that the late unhappy disturbances which have prevailed in the State of Massachusets may have impeded the Collection of Taxes in that State; but they cannot consistently with the duty which they owe to the general Interest of the Union, recommend an unqualified compliance with the motion submitted to their consideration, since in their judgment it would inevitably defeat
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the operation of the general Requisitions so far as they respect the Collection of the Specie Quotas.
It is necessary further to observe, that although Indents of Interest issued in pursuance of the Requisition of the 27th. September, 1785, are not receivable on that Requisition after the 1st. January next, unless the respective Quotas of Indents are in the hands of the several State Treasurers, or other proper officer on or before that day; yet the same are receivable on the Requisition of the 4th. September, 1782, and on the Balances of Indents due on the Requisitions of the 27th. and 28th. April, 1784, without any definite period being fixed for such receipt. It is true, that this will not affect the States of Massachusets, and Pennsylvania, so far as it respects the Requisitions of the 4th. September, 1782, and 27th. and 28th. April, 1784.
Justice to those States which have complied with the Requisition of the 4th. September, 1782, and a regard to the maintenance of Public Credit undoubtedly require, that no time should be lost in completing the Requisition last mentioned, and in discharging the Balances of the requisition of the 27th. and 28th. April, 1784. Unless this is done without delay, the mode devised by the United States in Congress, for giving every relief in their power to the Creditors of the Union, will ultimately operate to their prejudice, by throwing into circulation a new species of Paper for the payment of Interest, without any definite or adequate Funds for absorbing the same.
This important object appears to have been in the contemplation of Congress in passing the Requisition of the 27th. September, 1785; in which a definite period is established for redeeming the Indents of Interest issued in pursuance thereof. The Board beg leave to suggest, whether on the same principles it is not advisable to fix a period for completing the payment of Indents of Interest on the Requisitions of the 4th. September, 1782, and 27th. and 28th. April, 1784.
Should this be done, and the extension of the receipt of Indents on the Requisition of the 27th. September, 1785, be admitted on such principles, as would incite the several States to complete the payment of their Specie Quotas due on the same, the United States in Congress would, in the opinion of this Board, manifest to the several States, as strong a disposition to accommodate the Collection of the Federal Revenue, to the circumstances of the different Members of the Union, as can be done consistently with the present Exigencies of the Government, and that regard to the principles of Public Credit, which is so essential to the general Welfare.
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On the above principles, we beg leave to submit to the consideration of Congress the following Resolves:
Resolved, That the several States, be forthwith required to complete the payment of the Balances due from them respectively on the Requisitions of the 4th. September, 1782, and the 27th. and 28th. of April, 1784, and that in case the said Requisitions shall not be completed, agreeably to the Terms thereof, on or before theDay ofthe States so deficient, shall be held to pay thereafter in Specie the Sums by them respectively due; and that the Specie so paid shall be applied towards the discharge of the Indents of Interest issued in pursuance of the former Requisitions of Congress, provided the same does not exceed the amount which was receivable in Indents of Interest on the Requisitions above mentioned.
Resolved, That in any State where the Quota in Specie due on the Requisition of the 27th. September, 1785, shall be paid on or before the first day of January next, the proportion of Indents of Interest which such State has a right to avail itself of on the said Requisition, may be received in discharge thereof to the first day of April, 1787. Provided always that, ff the whole of the said Indents shall not be then paid into the General Treasury or the Commissioners of the respective Loan Offices, the Balance so deficient shall be thereafter paid in Specie, and applied agreeably to the directions specified in the Requisition of the 27th. September, 1785.
All which is humbly submitted.1
[Note 1: 1 This report, signed by Samuel Osgood, Walter Livingston, and Arthur Lee, is in the Papers of the Continental Congress, No. 139, folio 403. According to indorsement it was read October 21 and "This matter settled by requisition of 1787."]
October 20th., 1786.
Board Of Treasury,
October 5th., 1786.
Sir: In obedience to the orders of Congress directing this Board to Report on a Representation made by Messrs. Lawrence and Morris, touching our Contract for Clothing the Troops, we beg leave to submit to that honorable Body, our reasons for entering into the Contract in question, together with some observations on the remarks made by these Gentlemen.
In examining their objections, we find that they consist of two points--viz.
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On the first point, we beg leave to observe that, although under the Administration of the Treasury by the late Superintendant of Finance, and of this Board, it has been usual to advertise Contracts for Supplies to the Army; the fact is, that the Contract for Clothing has not been advertised, except in the single instance of last Year. Advertising the Contracts has been confined to the supply of Provisions, in which the quality could be much better ascertained, than it possibly can in the Article of Clothing; and where the evil (in case of a failure on the part of the Contractor) is only temporary. In the supply of Clothing by Contract, executed by the lowest Bidder, it is extremely difficult to guard against impositions, either as to quality, or making up the supply; and the consequence of such abuse, is felt by the Soldier through the whole Year. These reasons it is probable prevented any such Contracts for Clothing during the Administration of the late Superintendant of Finance. From a wish however of extending the system of Public Contract (if possible) to every branch of the Administration, we last Year advertised a Contract for the Clothing; and, the lowest proposals having been made by Messrs. Lawrence and Morris, the execution of it devolved on them. No official complaint was ever laid before the Board against the Contractors of last Year for a failure in the execution of the Contract; but it is certain that the lowness of the price at which these Gentlemen undertook the Contract prevented the possibility of furnishing several Articles of that quality which was necessary; more especially the essential articles of Shoes, Hats and Overalls which could not (at the prices of Messrs. Lawrence and Morris' late Contract) be procured of a proper quality. If therefore we had merely for the reasons above assigned, judged it advisable not to advertise this Year a Public Contract for supplying the Army with Clothing, we should have stood justified by precedents founded on reason, and confirmed by our own experience.
But a far more powerful reason rendered it improper this Year to advertise this Contract. It was not practiciable for us to fix either
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a precise time of paying for the Clothing to be furnished, or to promise payment in Specie, Both of which are essential points in all Contracts proposed by Advertisement. The embarrassed state of the Finances, from an almost total stagnation of Taxes in the respective States, and the revival of Paper Currency, rendered it extremely difficult to obtain Specie enough for the support of the Civil List; and were the Board (under present circumstances) to divert, for any other purposes, the Funds relied on for this essential object, it would hazard the immediate dissolution of the Federal Government.
After many applications made to this Board by the Secretary at War, to enter into stipulations for paying the Troops now in Service, at fixed periods, and for furnishing Clothing, we were obliged for a long while to decline entering into either of these engagements for the reasons above mentioned; and we could not at last have effected it, notwithstanding the weighty arguments in General Knox's Letter of the 23d. June last (Copy of which, No. 1, is herewith enclosed) had not the present Contractors agreed to such a mode of payment as was practicable for the Board to make. What these Proposals were will appear by their Letter No. 2, of the 31st. August last.
It may be asked, why the Board did not require of Messrs. Lawrence and Morris, the former Contractors, the prices at which they would be willing to execute this Contract, on the mode of payment proposed by Messrs. Turnbull, Marrole & Co. The Answer is, That it was in our opinion necessary (in order to prevent if possible, the Depretiation of the New Emission Money of Pennsylvania when issued, and for other State Reasons, which cannot be unknown to Congress) that no one but the confidential Servants of the Board, and the Persons actually interested in the Success of the Negotiation, should know that this Paper was to be put into circulation. The necessary secresy could not have been preserved, had the mode of payment been communicated to Messrs. Lawrence and Morris (or others, having an equal right with those Gentlemen to such Communication) and been rejected; which we conceived was most probable. It therefore appeared to us, that the communication would certainly have depretiated and eventually might have deprived us of the only means in our power of providing for this essential Supply; without any probability of reducing the price of the Articles, if furnished of a proper quality. Our Reasons for fearing a Rejection of our Offers were 1st., Because no period whatsoever was stipulated for the payment;
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2d., Because the payments when received, was to be in a Paper medium, which could not with equal advantage be Negotiated by any Person, whose chief Mercantile Transactions did not center in Philadelphia. On this point, we shall have occasion to remark more fully in Answering the second head of the objections made against the present Contract.
Before however we proceed to this consideration, it may not be improper to observe, that the Gentlemen, who have complained against our conduct as unprecedented, in making a private Contract for the supply of Clothing for the present Year; actually solicited of the Board, a preference of a Contract for this Supply, alledging as a Reason, the loss they had sustained by the first Contract; And we should certainly have conceived ourselves justifiable in entering into such a Negotiation with these Gentlemen not only for the general reasons we have mentioned, but from the consideration suggested by themselves, had our means of payment been such as we could reasonably have believed Contractors in the City wou'd have accepted, and which might without impropriety have been communicated. In proof of the preference sollicited and the reasons for it, we beg leave to lay before Congress a Letter from Messrs. Lawrence and Morris to the Board No. 3.
On the second head of the Objections, namely "That the prices the Board have Contracted for exceed those at which the Clothing had been furnished last Year, and at which rate the Gentlemen declare they were ready to supply it this Year had they been employed." We beg leave to observe, that the prices it is true are different, and that the statement of the difference does not appear to vary materially from what has been set forth by Messrs. Lawrence and Morris; but then it is equally true, that the two Contracts differ essentially, not only as to the principles on which they are made, but as to the mode of payment; and so much so, as to easily reconcile this apparent difference, on a candid comparison of the Contracts, No. 4 and 5.
They differ as to principle; because, in the former Contract the Contractor had a right to an Arbitration, if the Inspector on the part of the Public disapproved of the Workmanship or quality of the Clothing. By the present Contract, no such right is left with the Contractor. From a conviction that it was neither real oeconomy nor justice to the Soldiery to fix the prices of the different Articles of Clothing, so low as to put it out of the power of the Contractors to
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furnish Articles of sufficient goodness without being losers, the Board determined in the present Contract, to fix such a price as would ensure a supply of good Clothing; and to leave it to the Secretary at War, by having the right of fixing the patterns after the Contract was made, and afterwards the sole power of Inspection, to oblige the Contractors to furnish the different Articles in proportion to the price given. Whether or no therefore the Contract is favorable to the Public, will depend on the patterns determined on by the Secretary at War, and a proper Inspection.
The only points therefore which we presume it was necessary for the Board to establish were;
To shew the ground of our Opinion on the first point, the Board beg leave to lay before Congress an Estimate of the Secretary at War No. 6. of the Sum necessary for the supply of Clothing for the present Year (viz. for 420 complete Suits) in which a Suit of Cloths is estimated at 26 Dollars each. This estimate will be found included in the general Estimate for the Year 1786 transmitted by this Board to the United States in Congress. The last Requisition (in which the Monies necessary for this purpose are included) is founded on it. The Soldiery have therefore derived a right to Clothing for the present Year, proportionate to the Sum voted for this purpose by the United States in Congress; and as it has not, and too probably will not be in the power of the Board to satisfy them in the Material Article of Pay, it becomes their peculiar duty to do them justice in this object.
It is to be observed further, that this Estimate was formed by the Secretary at War, and communicated to this Board after the last Contract had been executed; and when of course he must have ascertained whether the former prices could ensure a proper Supply.
To prove the second point, we desire to refer to the Letter of the late Contractors to this Board, No. 3, in which they declare: "That they has lodged with the Secretary at War, an Estimate to prove that they had been sufferers by the last Contract; and that they could prove the veracity of that Statement by Vouchers in their possession." Messrs. Lawrence and Morris are pleased to observe that they would
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have been willing to have taken the Contract of the present Year on the former terms. It would not have been justice to those Gentlemen for the Board to have supposed this in direct contradiction to the declaration above mentioned, supported by a similar one in a Letter from them to Mr. Staats Morris, and by him laid before the Board, in which (after stating the prices of the last Years Contract) they observe "That it would not answer to form an Estimate from the above prices." We are sorry to observe, that the Letter No. 7, in which the late Contractors complain of having been losers, was not transmitted by them to Congress; and that they only furnished to that Honorable Body, an Extract of their Letter to Mr. Staats Morris, omitting the Remark above quoted.
Having said as much as we conceive necessary on the first point, We beg leave to consider the two Contracts as to the mode of payment. By the last Year's Contract, the whole Sum necessary for executing the same (namely 13,455 Dollars) was advanced to the Contractors in Bills of Exchange on Holland at the favorable rate of Three Shillings Pennsylvania Money per Current Florin. By the present Contract, the Contractors are to hazard the Negotiating the New Emission Money of the 18th March, 1780, at par, and abide by the loss that may arise on the Negotiation; or to be paid in orders on the Receiver of Taxes of Pennsylvania, payable at no fixed period, and subject to a Negotiation with the Treasurer of that State in Paper Currency. We think it unnecessary to make any remarks on the present value of this Paper in Pennsylvania when compared with Specie; but certain it is, that it is far from being equal to Bills of Exchange.
The extreme contingencies of either mode of payment will be apparent to Congress, when it is considered by that Honorable Body, that to the New Emission Money the State claims a right, in consequence of a negotiation entered into betwixt the Government of Pennsylvania, and the late Superintendant of Finance; and have actually endeavored by a process against the Commissioner of the Loan Office, to Arrest the issue of it; and that in consequence of a difference in statement on the Requisitions of the 27th April, 1784, betwixt the Comptroller of Pennsylvania, and the Officers of the Federal Treasury, it is alledged by Pennsylvania that they have more than completed the payment of their Quota on the present existing Requisitions.
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This disadvantage in payment we could not estimate at less than 10 p Cent. Because no Merchant whatsoever would in the present state of Commerce, hesitate, in our opinion, to Sell his Merchandize for Bills of Exchange in hand, at the rate fixed by the Contract of last year, with Messrs. Lawrence and Morris at the discount above mentioned, in preference to trusting any Government whatsoever in the United States for a period not defined, and for a mode of payment so liable to the hazard of Depretiation.
We therefore considered, that the difference to the Public whether furnished at the City of Philadelphia, or at this place, could not be estimated at less than two per Cent.
On Estimating, from a view of all the circumstances we have mentioned, the two Contracts, the comparison stands thus--
So that even in this point of view the whole difference of advantage to the present Contractors would only be 344 30/90 Dollars (which is far short of a Commission of 5 per Cent) even of the Contract was intended to furnish Articles of no better quality than was done last Year; This was not the case; the whole statement of Messrs. Lawreance and Morris is founded on the assumption that such was the intention of the Contracting Parties; and is therefore fallacious. From the purport of these Gentlemen's Letter to the Board of the 16th. June, 1786, it appears they did not gain a commission for furnishing the Clothing at the prices agreed on last Year (although they had the whole cost advanced in Bills of Exchange) and such compensation at least, every person has a right to expect who undertakes a Public Contract.
On the whole it will appear That we have not deviated from established rules of advertising a Public Contract for the supply of Clothing for the present Year.
That, even if it had been advisable to renew the Experiment (first attempted by this Board) of giving the Contract for Clothing to the lowest Bidder, the state of the Finances did not enable us to advertise such a Contract.
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That in fixing the price of a Suit of Soldiers Cloths for the Year 1786, we have governed ourselves by the Estimate of the present Year, furnished by the Secretary at War, and approved of by the United States in Congress.
That the Contract we have entered into puts it altogether in the power of the Secretary at War to ensure a supply of Clothing proportionate in goodness to the difference in price betwixt this, and the last Year.
That the terms of payment are essentially different from those of the Contract of last Year.
That from the communications of Messrs. Laurence and Morris, we have no reason to suppose they would have undertaken the present Years Contract at the prices of the last; but the reverse.
That had they been so disposed, we had it not in our power to promise at any period an absolute payment in Specie; much less to advance the whole amount in Bills of Exchange; neither should we have judged it proper to fix the prices of many principle Articles of Clothing so low as to hazard the goodness in quality of the Articles furnished.
On these Principles our Negotiation of the Contract in question rests: And we doubt not on a candid Investigation they will appear satisfactory to the United States in Congress.
With the greatest respect we are, etc.1
[Note 1: 1 This report, signed by Samuel Osgood, Walter Livingston and Arthur Lee, is in the Papers of the Continental Congress, No. 138, II, folio 29. According to Committee Book No. 190, it was delivered October 9. According to indorsement it was read in Congress October 21. A further explanation was made in a letter of October 20 to the committee of October 9, consisting of Mr. Lambert Cadwallder, Mr. [Henry Lee, and Mr. Charles Pinckney. It is in No. 138, II, folio 43. See post, October 24.]
His Excelly.
The President of Congress.
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