exclusive of duties on imports; the proportion of each state to be fixed, according to the articles of confederation.*

This system was not to take effect, until acceded to by every state, and when adopted by all, to be a mutual compact among the states, and irrevocable by any one, without the consent of the whole, or of a majority of the United States in congress.

The taxes and expenses of the union, had never yet been apportioned among the states, according to the rule prescribed by the confederation. A satisfactory valuation of houses and lands had never yet been completed; and the difficulties in making such a valuation, seemed nearly insuperable. The proportions had been generally regulated by the supposed number of inhabitants. Congress now proposed to the consideration of the states, an alteration in the articles, providing, that the proportion should be governed by the number of white and other free citizens, including those bound to servitude for a term of years, and three fifths of all other persons.

To enforce the importance and necessity of adopting and carrying into effect, this system of finance, congress presented an address to the states. This was prepared by a committee consisting of Mr. Ellsworth, Mr. Madison, and Mr. Hamilton, who, then and afterwards, held a high rank among American statesmen.

After explaining the system itself, congress appealed to the gratitude and pride, as well as justice and plighted faith of the nation. They urged particularly, the propriety of the provision recommended for the payment of the national debt. "If other motives than that of justice," they said, "could be requisite, on this occasion, no nation could ever feel stronger; for, to whom are the debts to be paid?

* This sum of 1,500,000 dollars, was apportioned among the states, as follows:--

"To an ally, in the first place, who, to the exertion of his armies in support of our cause, has added the succors of his treasure; who, to his important loans, has added liberal donations; and whose loans themselves, carry the impression of his magnanimity and friendship.

"To individuals in a foreign country, in the next place, who were the first to give so precious a token of their confidence in our justice, and of their friendship for our cause, and who are members of a republic, which was second in espousing our rank among nations.

“Another class of creditors is, that illustrious and patriotic band of fellow citizens, whose blood and whose bravery have defended the liberties of their country, who have patiently borne, among other distresses, the privation of their stipends, whilst the distresses of their country disabled it from bestowing them; and who even now, ask for no more than such a portion of their dues, as will enable them to retire from the field of glory, into the bosom of peace and private citizenship, and for such effectual security for the residue of their claims, as their country is now unquestionably able to provide.

"The remaining class of creditors is composed partly of such of our fellow citizens as originally lent to the public the use of their funds, or have since manifested most confidence in their country, by receiving transfers from the lenders; and partly of those, whose property has been either advanced or assumed for the public service. To discriminate the merits of these several descriptions of creditors, would be a task equally unnecessary and invidious. If the voice of humanity plead more loudly in favor of some, than of others, the voice of policy, no less than justice, pleads in favor of all. A wise nation will never permit those, who relieve the wants of their country, or who rely most on its faith, its firmness, and its resources, when either of them is distrusted, to suffer by the event.

"Let it be remembered, finally, that it has ever been the pride and boast of America, that the rights, for which she contended,

were the rights of human nature. By the blessing of the author of these rights, or the means exerted for their defense, they have prevailed against all opposition, and form the basis of thirteen independent states. No instance has heretofore occurred, nor can any instance be expected hereafter to occur, in which the una. dulterated forms of republican government can pretend to so fair an opportunity of justifying themselves by their fruits. In this view, the citizens of the United States are responsible for the greatest trust ever confided to a political society.

"If justice, good faith, honor, gratitude, and all other quali ties, which enoble the character of a nation, and fulfil the ends of government, be the fruits of our establishments, the cause of liberty will acquire a dignity and lustre, which it has never yet enjoyed; and an example will be set, which cannot but have the most favorable influence on the rights of mankind.

"If on the other side, our government should be unfortunately blotted with the reverse of these cardinal and essential virtues, the great cause which we have engaged to vindicate, will be dishonored and betrayed; the last and fairest experiment in favor of the rights of human nature will be turned against them, and their patrons and friends exposed to be insulted and silenced by the votaries of tyranny and usurpation.”*

The propriety and necessity of adopting this system, was strongly pressed upon the states, by general Washington, in his address of the 8th of June. Alluding to it, he says, "no real friend to the honor and independency of America, can hesitate a single moment respecting the propriety of complying with the just and honorable measure proposed."

This plan, however, though thus ably supported and recommended, was never accepted by the states, in such a manner, as to go into operation. The pressure of common danger being removed, the bond of federal union became weak and feeble, and the inefficiency of the national government more apparent. A jealousy between the state and general governments, began to exist; and state interests predominated. The importing states levi

* Journals of Congress, vol. 8.

ed contributions on their neighbors for their own benefit, and some of them would not relinquish the advantages of their local situation. Congress, indeed, had power to make treaties with foreign nations, but none to enforce the observance of them; they had power to contract debts, but were unable to enforce the collection of money for the payment of them. For this, they were dependent on the will of thirteen distinct legislative bodies.

That part of the financial plan, which required from the states a pledge of internal revenues for twenty five years, met with the greatest opposition. Congress, were at length, satisfied, that a general compliance with this part of the system was not to be expected, and confined their requests to that relating to duties on imports. In 1786, all the states, except New York, had complied with this part of the system. The operation of the acts, passed by some of the states, however, depended on similar acts from the others. The state of New York, instead of vesting congress with the power of levying the duties, reserved this right to itself agreeably to a law passed in 1784; and also refused to make the collectors amenable to, and removable by congress.

As the assent of New York was now only wanting, on this part of the plan, congress earnestly requested the executive of that state to convene the legislature, for the purpose of making their law conformable to those of other states. The governor of New York, however, declined complying with this request, alleging, that by the constitution of that state, he could only convene the legislature on extraordinary occasions; and as the subject had recently been before that body, and received their determination, such an occasion did not exist. To a second and more earnest application, he made the same reply. While this system of revenue was under the consideration of the states, congress could do nothing more than make requisitions, and these were not complied with. The requisitions for the payment of the interest of the domestic debt, from 1782 to 1786, amounted to more than six millions of dollars; yet, of this sum, up to March 31st, 1787, about one million only was paid.* The

Report of the Board of Treasury.

interest of the domestic debt, therefore, was unpaid; and the money borrowed in Europe, was applied to the payment of interest on foreign loans. In this situation, the domestic debt was deemed of little value, and was sold for about one tenth of its nominal amount.

Soon after the ratification of the definitive treaty, congress, turned their attention to the subject of commercial intercourse with foreign nations. Liberated from the commercial shackles of their colonial state, the Americans were now disposed to form commercial arrangements with most of the powers of Europe. With these views, congress declared, that it would be advantageous to conclude treaties with Russia, the court of Vienna, Prussia, Spain, Portugal, Genoa, Tuscany, Rome, Naples, Venice, Sardinia, and the Ottoman Porte.

Certain principles, by which the American negociators were to be governed, in the formation of these treaties, were at the same time, settled. Among the stipulations to be proposed on the part of America, some were of a novel character, and calculated to lessen the calamities of war. In case of hostilities between the contracting parties, fishermen, cultivators of the earth, artisans or manufacturers unarmed and inhabiting unfortified towns, villages, or places, who labored for the common subsistence of and benefit of mankind, and peaceably followed their respective employments, were to be allowed to continue the same, and not be molested by the armed force of the enemy, in whose power, by the events of war, they might happen to fall; but if it should be necessary to take any thing from them for the use of such armed force, it should be paid for, at a reasonable price. All merchants and traders, also, exchanging the products of different places, were to be allowed to pass free and unmolested; and neither of the contracting parties was to grant or issue any commission to any private armed vessels, empowering them to take or destroy such trading ships, or interrupt such commerce.*

VOL. II.

* Secret Journals of Congress, vol. 3, p. 484, and Note 17.

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