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an impropriety. Nor do I know that there would be any in answering your queries. But you remember the saying with regard to Cæsar's wife. I think the spirit of it applicable to every man concerned in the administration of the finances of a country. With respect to the conduct of such men, suspicion is ever eagle-eyed, and the most innocent things are apt to be misinterpreted. Be assured of the affection and friendship of . . . Yours, &c. &c."It is to be feared that the statesmen of America have not all inherited this refined and sensitive delicacy.

The duties of the Secretary of the Treasury were many and various. Besides originating plans for the improvement and management of the revenue, and for the support of the public credit, he had to prepare and report the estimates, and to superintend the collection, receipt, and disbursement of the public moneys, all authority for transfers or payments being vested in him. He was the exclusive judge of the time and amount of the disbursements, subject only to the check of the Comptroller, who countersigned the warrants, and to the ultimate settlement of the accounts by the Auditor and Comptroller. And it must be remembered that, when Hamilton assumed the office, almost everything

was new, strange, and untried in this great department, and that he had to construct the machinery with which he was to perform his task.

He began by establishing a system for the collection of the revenue, and the organization of the Treasury, which has since been generally admired for the completeness of its self-acting checks, and on the principle of which all subsequent innovations have been founded. He instituted a strict and regular audit of accounts, to secure that all expenditure should be made in pursuance of legal appropriations, and that the balances of amounts unexpended should be clearly shown. But the great difficulty with which he had to contend was the necessity of taking immediate steps to support the public credit. No really efficient measures had yet been adopted to meet the debts and obligations of the United States. The Foreign Debt, due to France, Holland, and Spain, with heavy arrears of interest -the Loan Office Debt, for moneys lent to government in each State-the Army Debt, for pay and commutation of pensions-the Debt of the Five Great Departments (as it was called), for services and supplies during the war-the old Continental issues, and innumerable obligations for interest and

unpaid balances-all had to be provided for. To add to the inextricable confusion of these various claims, some were held to be State debts, and others debts of the Union. Hamilton saw at once that there was but one way to deal effectually with this pressing emergency. It was to assume the State debts as identical with those of the Union, to fund the whole, and to make all the national resources available for the security of the public creditor.

In the report which he presented to Congress, he urged the importance of maintaining the national credit, as upon it depended the individual and aggregate prosperity of the citizens of the United States, their relief from the embarrassments they now experienced, their character as a people, and the cause of good government. But, besides motives of political expediency, there were arguments for it which rested on the immutable principles of moral obligation. And these derived additional strength from the nature of the debt of the United States. It was the price of liberty; and the faith of America had been repeatedly and solemnly pledged for its redemption.

He then proceeded to point out the evils of an

unfunded debt as an object of speculation, diverting capital from more useful channels, and being itself a precarious commodity from its fluctuation and insecurity. Whereas, by funding the debt, and making due provision for it, they would render the obligations of the government in some sort a substitute for money, and promote, instead of discouraging, the great interests of industry.

But while they were all agreed, that the foreign debt ought to be provided for in accordance with the precise terms of the contract, there was a difference of opinion as to the domestic debt. Some urged, that there ought to be a discrimination between the original holders and the present possessors by purchase. This doctrine Hamilton denounced as "unjust, impolitic, highly injurious even to the original holders, and ruinous to the public credit.” He then proceeded to the question, whether any difference ought to remain between the creditors of the Union and those of the individual States. He showed that a provision by one authority would be more effectual than by several; that collision and confusion would thus be prevented; that conflicting systems must needs diminish the aggregate revenue; and that the public creditors, receiving

their dues from one source, distributed with an equal hand, would have a common interest, and would all unite in supporting the fiscal arrangements of the government.

"Hence," he argued, "it was the interest of the creditors of the Union, that those of the States should be comprehended in a general provision. Neither would it be just that one class of public creditors should be more favoured than the other. The objects for which both debts were contracted were the same; indeed, a great part of the State debts had arisen from assumptions by them on account of the Union."

Therefore he insisted that both should be placed on the same footing, and he devised a scheme for the equitable adjustment of accounts between the Union and the States, to be executed under the superintendence of commissioners appointed for the purpose. With regard to the question of interest, he contended that all arrears then due were entitled to an equal provision with the principal of the debt. Assuming the whole to be a capital bearing interest at six per cent., he proposed a loan for the entire amount, on five different plans at the option of the creditor. To provide for the payment of interest

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