# Journal of William Maclay/Second Session of the First Congress/The Settlement and Assumption Bills
## July

July 1790 :
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### 6

July 6th. — Was called on early this morning by Mr. Hanna, of Harrisburg. A letter from Mr. Harris says my family are well. Attended at the Hall after having paid some visits. The Post-Office bill was passed after some debate. Gould's bill was rejected. I had occasion to be up on both these bills. Now came the Settlement bill. Mr. Lee had spoiled my amendment, or at least had greatly obscured it; but, if I stirred at all, I must use his motion, and, great man as he is, there really was misspelling in it. The ground I took was that the fifth section of the bill laid down a ratio in consequence of which there must, in the nature of things, be creditor and debtor States. The sixth section told us how the creditor States were to be paid, but not one word was said as to the debtor States. Paying one was as necessary as the other. Justice demanded it. Vide my amendment: "And those States against whom balances shall be found shall have a portion of their State debt, which shall have accrued as aforesaid, left charged upon them equal to such deficient balance; and if it should so happen that the whole State debt of any particular State shall fall short of such balance, such deficiency shall remain charged against such State on the books of the Treasury."
I attacked the Secretary's [Hamilton's] system of supposititious balances as not only unjust, and a total departure from acts and requisitions of Congress, but as going to lay great taxes and increase the volume of our debt.
Elsworth and Strong answered. King admitted every principle which I had laid down, but wavered. Lee seconded, and forsook me. The child was none of his. I really thought I had the best of the arguments, which grew bulky and by degrees spread over all our fields of finance; but on the question I had a small division in favor of the motion.
The true history of the bill is that it has been fabricated by the Secretary's people, particularly Fitzsimons, and is meant as a mere delusion or to amuse the public, for they seriously never wish the accounts to be settled. But a show must be kept up of giving satisfaction on this point. As to myself, I may draw a lesson from Lee's conduct, to bring forward my own motions only. I spoiled the amendment to obtain his support, and he saw it perish with the indifference of a stranger.

### 7

July 7th. — Attended at the Hall. Every face bore the marks of anxious expectation. Schuyler came to me and owned the bill for the settlements of accounts was to the full as I had stated it yesterday, and showed me a long amendment; said the bill should be committed. Wished me to second him. I readily agreed to it, and now we went on the subject of debate. I was not alone, as yesterday. I supported my old system of ascertaining the expenses of the war; agreeing to the ratios and fixing the quotas; giving certificates to the creditor States and leaving the State debts on the debtors, respectively, so far as to equalize the accounts. Elsworth certainly confused himself. He wished to equalize the accounts by credits only, taking the lowest exertion as the basis and setting off to each State in proportion to it and funding all over it, as the exertions of some of the States stood nearly at 0. This, in fact, would be funding nearly the whole expenses of the war.
Butler had a third system, viz., take no notice of anything bygone, but divide the existing debt among the States. I thought it strange to hear my colleague declare for the last opinion. After some very long debate, the bill was committed.
The Secretary's [Hamilton's] people got the advantage of us again. A bill which had disappeared a long while, of the most futile nature, with regard to relieving certain officers from what they considered as a grievance, was reported on favorably, but rejected. This same bill, or at least one verbatim the same, had been rejected by us formerly. Some other trifling business was done, and we adjourned.
Sundry questions were taken in the House of Representatives on the Residence bill. The decisions hitherto have been favorable, but the question on the bill has not yet been taken.

### 8

July 8th. — This day was slack in the Senate until the report came in on the bill for the settlement of the accounts. As might be expected, their amendments followed the Secretary's report, or nearly so. It amounted to this: That the net advances of the States should be made an aggregate, and this aggregate divided by the ratio of population which would fix the quotas. Then the quotas, compared with their respective advances, would determine the balances or credit, or turn out just equal. And here it was agreed to leave the matter for the present, as the bill respected the ascertaining the balances only, and left the payment to the creditor States and the payment from the debtor States to the future operation of the Legislature. All this was far short of what I wanted, and indeed the bill will turn out, as I fear, a mere delusion. But under its present form the State debts must be embraced in the accounts, if the commissioners do their duty; and if so, this will operate as a reason why they should not be assumed.
I was called out by Mr. Hanna, who was just setting off home. I wrote a hasty line by him to Charles Biddle that the votes stood this day twenty-eight to thirty-three on the residence.
Stayed at the Hall until four o'clock, and went to dine with the President. It was a great dinner, in the usual style, without any remarkable occurrences. Mrs. Washington was the only woman present.
I walked from the President's with Mr. Fitzsimons part of the way to his lodgings. He really seemed good-humored and as if he wished to be on good terms with me. Clymer called at our lodgings in the evening, and seemed condescending and good-humored in a remarkable degree, but all in the dumps again about the residence; only thirty real friends to the bill in the House of Representatives, etc.
It is time, indeed, that this business should be settled, for all our affairs are poisoned by it.
Nothing can be plainer than the simple mode of debtor and creditor for the settlement of the public accounts of the Union. But the State of South Carolina is most miserably in arrears, and wishes to avoid all settlement, or to have such a partial one as will screen her defects. She has been devoted to New York on the subject of the residence. Therefore New York (or I should rather write, Hamilton) labors incessantly to confuse, embarrass, and confound all settlement. The thing can not be openly denied, but they will involve it in so many difficulties as will either prevent it altogether, or render it useless if it should take place.

### 9

July 9th. — Attended at the Hall at the usual time. There was much whispering of the members — Elsworth, Strong, and Izard. We had a bill for regulating the intercourse with the Indians, which has passed — a vile thing which may be made the basis of much expense. Superintendents are to be appointed, although the superintendence of the Indians in the government northwest of the Ohio is already vested in the Governor, and so south of the Ohio. By and by we shall have a call for their salaries. It really seems as if we were to go on making offices until all the Cincinnati are provided for.
The Settlement bill engaged us warmly for the most of the day. The object was to find the balances due to the creditor States and how. Ingenuity itself is tortured to find ways and means of increasing the public demands and passing by and rendering the State governments insignificant. I declared what I thought plainly on the subject — that the bill was one for the settlement but not the payment of the respective balances; that the old Confederation dearly contemplated the payment of the balances from the delinquent States to the creditor States; that every act of the old Government carried this on the face of it; that, although we could not lay unequal taxes, yet the adoption of the new Constitution did not go to the discharge of just debts due from the States which might be hereafter found debtors, and that Congress certainly had the power of liquidating the balances and making the demands from the debtor States.
The bill, after a long debate, passed on the principle of a Settlement bill only.
I find, by letters which I have received, that the public creditors are to be the body who are to rise in judgment against me and try to expel me from the Senate. This is only what I expected. Nor are they the only ones. The adoption of the new Constitution raised a singular ferment in the minds of men. Every one ill at ease in his finances; every one out at elbows in his circumstances; every ambitious man, every one desirous of a short cut to wealth and honors, cast their eyes on the new Constitution as the machine which could be wrought to their purposes, either in the funds of speculation it would afford, the offices it would create, or the jobs to be obtained under it. Not one of these has found a patron in me. In fact, I have generally set my face against such pretensions. As such men are generally wanting in virtue, their displeasure — nay, their resentment — may be expected. "Why, you want nothing neither for yourself nor friends!" said a Senator one day to me in some surprise. It was somewhat selfish, but I could not help uttering a wish that he could say so with truth of every one.

### 10

July 10th. — Being Saturday, the Senate did not meet, but I went to the Hall by a kind of instinct Created by custom, somewhat like a stage-coach which always performs its tour whether full or empty.
I met King and Langdon here. We spent an hour or two in very familiar chat. Nothing worth noting unless it was the declaration of King that a bargain was certainly made on the subject of the residence to obtain at least one vote in the room of Ms [King's], as it was most likely he would vote against the assumption if the residence went to Philadelphia. I was astonished at King's owning this, which, in fact, amounted to this: that he had engaged his vote for the assumption if the residence stayed in New York.

### 11

July 11th, Sunday. — This was with me a very dull day. I read at home; wrote the usual letters to my family and other correspondents. After dinner, walked alone out on the commons beyond the Bowery wherever I could find any green grass or get out of the dust, which was very troublesome on the roads.

### 12

July 12th, Monday. — Attended at the Hall at the usual time. We received two messages from the Representatives, one of them containing the Residence bill. We had considerable debate on the Post-Office bill. Insisted on our amendments and appointed a committee to confer. Insisted on our amendment to the Indian Intercourse bill, and passed the tonnage. This bill deserves a remark.
This bill is in every respect the same as the old one, bating the remission of some unintentional severities which had fallen on some fishermen and coasters, which were remitted. The taking all the time and passing all the forms of a new bill, would perhaps bear an interpretation as if we feared running out of work.
A motion was made for taking up the Funding bill, but withdrawn. No other serious business was gone on. The House adjourned.
A number of us gathered in a knot and got on the subject of the assumption, the report of which had just been handed in by Mr. Carrol. It was in favor of it. And now from every appearance Hamilton has got his number made up. He wanted but one vote long ago. The flexible Read was bent for this purpose some time ago and Carpel having joined to make up the defection of King. The mine is ready to be sprung. Since I am obliged to give up Carrol's political character, I am ready to say, "Who is the just man that doeth right and sinneth not?"
The sum they have reported to be assumed is twenty-one million dollars. This is most indubitably to cover the speculations that have been made in the State debts. The assumption will immediately raise the value of State securities and enable those people who have plunged themselves over head and ears in those speculations to emerge from impending ruin and secure them the wages of speculation. The report is ordered to be printed. After dismissing this subject, we got on the prospect of an approaching war between Spain and England. Here was a large field for conjecture, and we indulged our fancies on the subject until near three o'clock.
Here I will note down an observation which I wonder never made an impression on the Pennsylvanians. Every State is charged with having local views, designs, etc. Could any motive of this kind be justly chargeable on our State in adopting the Constitution? By our imposts we laid many of the neighboring States under contribution — part of Jersey, Delaware, part of Virginia, and almost the whole of the Western country. It appears one fourth of the whole impost is received at Philadelphia. This was a great sacrifice. Query: Did our politicians ever think of this advantage?

### 13

July 13th. — I attended this day at the Hall at the usual time, or rather sooner. General Schuyler only was before me. Our Vice-President came next. They sat opposite me, and had a long chat on various subjects, but nothing very interesting. Mr. Morris came at last.
The resolution for the assumption of twenty-one millions of the State debt was taken up. This was perhaps the most disorderly day we ever had in the Senate. Butler was irregular beyond all bearing. Mr. Morris said openly before the Senate was formed, "I am for a six-percent fund on the whole, and, if gentlemen will not vote for that, I will vote against the assumption." I thought him only in sport. But he three times in Senate openly avowed the same thing, declaring he was in judgment for the assumption, but, if gentlemen would not vote for six per cent, he would vote against the assumption and the whole Funding bill. His adding the Funding bill along with it in the last instance operated as some kind of palliation. But I really was struck with astonishment to hear him offer his vote for sale in so unreserved a manner. Izard got up and attacked him with asperity. Mr. Morris rose in opposition. Then Izard declared he did not mean Mr. Morris, so much did he fear the loss of his vote. But his invective was inapplicable to anybody else. I was twice up and bore my most pointed testimony against the assumption. It was insuring a certain debt on uncertain principles. The certain effect was the incurring and increasing our debt by twenty-one millions by mere conjecture.
This debt was already funded by the States, and was in train of payment. Wily not settle and let us see how the account stands before the States are discharged of their State debts? I alleged the funds on which these debts were charged by the States were those which these States could pay with the greatest facility, as every State had facilities of this kind. The transferring the debt to any general fund would lose these local advantages. It was dealing in the dark; we had no authentic evidence of these debts. If it was meant as an experiment how far people would bear taxation, it was a dangerous one. I had no notion of drilling the people to a service of this kind, etc. But I can not pretend to write all I said.
Mr. Morris has twice this day told me what great disturbances there would be in Pennsylvania if six per cent was not carried. I considered these things as threats thrown out against my reappointment [to the Senate]. But, be it so; so help me God, I mean not to alter one tittle! I am firmly determined to act without any regard to consequences of this kind. Every legislator ought to regard himself as immortal.

### 14

July 14th. — This day the resolutions on the assumption were taken up. I am so sick and so vexed with this angry subject that I hate to commit anything to writing respecting it. I will, however, seal one of the copies of it in this book as a monument of political absurdity.*
[* The Assumption Bill — Copy.]
Congress of the United States — in Senate, July the 12th, 1790.
The committee appointed July the 2d, 1790, reported as follows:
Whereas, A provision for the debt of the respective States by the United States would be greatly conducive to an orderly, economical, and effectual arrangement of the public finances; would tend to an equal distribution of burthens among the citizens of the several States; would promote more general justice to the different classes of public creditors, and would serve to give stability to public credit; and
Whereas, The said debts having been effectually contracted in the prosecution of the late war, it is just that such provision should be made:
Resolved, That a loan be proposed to the amount of twenty-one millions of dollars, and that the subscriptions to the said loan be received at the same time and places, by the same persons, and upon the same terms as in respect to the loans which may be possessed concerning the domestic debt of the United States. subject to the exceptions and qualifications hereafter mentioned. And the sums which shall be subscribed to the said loan shall be payable in the principal and interest of the certificates or notes which, prior to the first day of January last, were issued by the respective States as acknowledgments or evidences of debts by them respectively owing, and which shall appear by oath or affirmation (as the case may be) to have been the property of an individual or individuals or body politic, other than a State, on the said first day of January last. Provided, that no greater sum shall be received in the certificates of any State than as fellows. That is to say:
And provided that no such certificate shall be received which, from the tenor thereof or from any public record, act, or document, shall appear or can be ascertained to have been issued for any purpose other than compensations and expenditures for service or supplies toward the prosecution of the late war, and the defense of the United States or some part thereof during the same.
Resolved, That the interest upon the certificates which shall be received in payment of the sums subscribed toward the said loans shall be computed to the last day of the year one thousand seven hundred and ninety-one inclusively, and the interest upon the stock, which shall be created by virtue of the said loan, shall commence or begin to accrue on the first day of the year one thousand seven hundred and ninety-two, and shall be payable quarter-yearly, at the same time and in like manner as the interest on the stock to be created by virtue of the loan that they may possess in the domestic debt of the United States.
Resolved, That if the whole sum allowed to be subscribed in the debt or certificates of any State as aforesaid shalt not be subscribed within the time for that purpose limited, such State shall be entitled to receive, and shall receive from the United States, at the rate of four per cent per annum upon so much of the said sum as shall not have been subscribed, in trust for the non-subscribing creditors of such State, to be paid in like manner as the interest on the stock which may be created by virtue of the said loan, and to continue until there shall be a settlement of accounts between the United States and the individual States, and in case a balance shall then appear in favor of such State, until provision shall be made for the said balance.
But as certain States have respectively issued their own certificates, in exchange for those of the United States, whereby it might happen that interest might be twice payable on the same sums:
Resolved, That the payment of interest, whether to States or to individuals, in respect to the debt of any State, by which such exchange shall have been made, shall be suspended until it shall appear to the satisfaction of the Secretary of the Treasury that certificates issued for that purpose, by such State, have been re-exchanged or redeemed, or until those which shall not have been exchanged or redeemed shall be surrendered to the United States. And it is further
Resolved, That the faith of the United States be, and the same is hereby pledged to make like provision for the payment of interest on the account of the stock arising from subscriptions to the said loan, with the provision which shall be made touching the loan that may be proposed in the domestic debt of the United States; and so much of the debt of each State as shall be subscribed to the said fund shall be charged against such State, in account with the United States.
It has friends enough — fourteen to twelve — so far, but I am not without hopes of destroying it to-morrow. I am now convinced that there must have been something in the way of the bargain, as King alleged on Saturday. It must have been managed with Butler. Elsworth at one time this day used the following words: "No man contemplated a final liquidation of the accounts between the United States and the individual States as practicable or probable." I took them down and showed them to Mr. Morris and Mr. Walker. He observed me, and after some time got up and, in the course of speaking, said, "A settlement was practicable, and we must have it."
He will absolutely say anything, nor can I believe that he has a particle of principle in his composition.
Mr. Morris, Langdon, and others, moved to strike out the third section. We of the opposition joined Elsworth and kept it in. The State of Pennsylvania has not but about one million of existing State debt. This clause, if the vile bill must pass, may be considered as in her favor, more especially if they prevail and prevent a settlement of the accounts.
I saw Mr. Pettit yesterday at the levee, and, as I was advised by letter that he was appointed agent for the settlement of the Pennsylvania accounts with the Union, I waited on him with great joy, hoping for much information on the subject. But what disappointment! He could tell me nothing about them, but came here to gain information and return back again; seemed to speak rather unfriendly of the Comptroller as to what he had done about the accounts. This surprised me. He quitted the subject with impatience, and attacked me rather with rudeness on the subject of the public debts. I have heard him spoken of as smooth, artful, and insinuating.
He certainly displayed none of these qualities, and, as to the public accounts, he seems rather as an agent for the public creditors, and talked of the settlement as a very distant object. He teased me to tell him who were the principal holders of certificates in Boston, Newport, New York, etc., declaring that he wished to correspond with them, and unite with them in the common cause. I can not help regarding him as the curse of Pennsylvania.
For some time after the war certificates were sold as low as ninepence on the pound. John Ray, my old servant, told me that he sold one of eighty pounds for three pounds, and could get no more. But it appears, by a. remonstrance of the Executive Council of the Legislature of Pennsylvania, entered on their minutes, that the market price was two shillings sixpence on the pound at the time of passing the funding law. Yet, by the instrumentality of this man on a weak (and in some cases interested)Legislature, six per cent was given on the certificates, or forty-eight per cent on the real specie value. This Pennsylvania paid for four years. As the certificates were generally below two shillings sixpence, it is no exaggeration to say every speculator doubled his money in four years, and still has the certificates on which he expects fortyeight per cent with respect to the original cost. Thus one hundred pounds specie bought eight hundred pounds in certificates (perhaps much more). These certificates brought fortyeight pounds per annum for four years, equaling one hundred and ninety-two pounds, and the holders of certificates remain as clamorous as ever.

### 15

July 15th. — The business of the Senate was soon done this day. The Vice-President took up the Funding bill without any call for it. Mr. Morris appeared in high good humor; asked me if anybody had taken me aside to communicate anything to me. I told him no. But it was easy to observe that something was going on. He said there was, but did not tell me what it was, nor did he affect to know. I saw Carrol writing a ticket with a number of names on it, sand, and put it by. In the mean time up rose Elsworth and moved that both the Funding bill and the resolutions for the assumption should be referred to a committee. He was seconded soon. Lee rose; said we knew no good could come from a commitment. Mr. Morris rose; said he was for the commitment; that they might be made in one law, and the rate of interest fixed at six per cent. I rose; said I knew of but two ends generally proposed by commitment — the one was to gain information, the other to arrange principles agreed on. The first was out of the question; the second only could be the object; but what was the material to be arranged? A bill originated in the other House, and resolves on the assumption which had originated in this. I knew the opinion of many of the Representatives was opposed to our power of originating anything relating to the subject of the public debts. Taking two so dissimilar objects together, more especially if our powers were called in question, was the way to lose both. Gentlemen hoped much good from this measure. I wish they might not be disappointed; but I was not certain of anything but delay, which, in our present circumstances, I considered as an evil, etc.
The Vice-President, who was to appearance in the secret, seemed impatient until I had done, and putting the question it was carried. The R — were all the six-percent men and all the assumption men. They carried the committee, all of their own number. This done, the Senate adjourned.
Henry came and sat beside me a good while. He told me that Carrol wrote his ticket with the seven names (that being the number of the committee) before any business whatever was done. This I had observed in part myself. We did not need this demonstration to prove that the whole business was prearranged, nor can any person be now at a loss to discover that all three subjects — residence, assumption, and the funds equivalent to six per cent — were all bargained and contracted for on the principle of mutual accommodation for private interest.
The President of the United States has (in my opinion) had a great influence in this business. The game was played by him and his adherents of Virginia and Maryland, between New York and Philadelphia, to give one of those places the temporary residence, but the permanent residence on the Potomac. I found a demonstration that this was the case, and that [New] York would have accepted of file temporary residence if we did not. But I did not then see so clearly that the abominations of the funding system and the assumption were so intimately connected with it. Alas, that the affection — nay, almost adoration — of the people should meet so unworthy a return! Here are their best interests sacrificed to the vain whim of fixing Congress and a great commercial town (so opposite to the genius of the Southern planter) on the Potomac, and the President has become, in file hands of Hamilton, the dishclout of every dirty speculation, as his name goes to wipe away blame and silence all murmuring.

### 16

July 16th. — Senate had not been formed but a few minutes when a message from the President of the United States was announced. It was Lear, and the signature of the President to the Residence bill was the communication.
The Pension bill came up from the House of Representatives. The committee on the Indian bill reported that twenty thousand dollars, in addition to seven thousand in the hands of the Secretary of War and six thousand in Georgia, in goods, should be granted for the holding treaties with the Indians; and all this when there does not appear a shadow of reason for holding a treaty at all with any Indians whatever. Opposition was in vain. It was carried.
Now Mr. Morris came, raging angry; said and swore he would vote against everything. The committee had agreed to the Secretary's third alternative for the principal and three per cent on the interest due, and he had left them. The report came in after some time and it was proceeded on. I whispered to Mr. Morris, now he had got the residence, it was our province to guard the Union and promote the strength of the Union by every means in our power, otherwise our prize would be a blank. I told him I would move a postponement of the business and I would wish a meeting of the delegation this evening. He assented.
A vast deal was said on the subject of the contract and breach of obligation. Then I rose and stated that I had no difficulty on that head; that we stood here as legislators. Judges and executive officers were bound to observe laws and contracts; but justice was the great rule which we should govern our conduct by. The holder of the certificate called, "Do me justice." But the original performer of the service, who sold it for one eighth part of the nominal value, and on whom the tax to make it good is about to fall, cries, "Do me justice also."
Both sides of this picture ought to be viewed and their relative numbers to each other. No guess can be made in this matter, but by comparing the number of speculators with the number of those who had sold, and perhaps the ratio would not be one to one hundred. it was also true there was a class of men, the original holders, who were not embraced in the above description; but if we east our eye over the calamities of the late war they would appear to be the fortunate characters. All the others who touched Continental money were taxed by it, and it finally sunk in their hands. The original holders have, if not the whole value, at least something to show, etc. I hoped for the progress of the public business, and that a short postponement would perhaps bring us nearer together and moved for to-morrow; but it was not carried.
The report was pushed with violence and all carried, twenty members rising for it, four only sat, two going out. The Vice-President said twenty for, four against. When they came to the part for ingrafting the assumption resolves on the bill, Mr. Lee, with what assistance I gave him, retarded the business a little. When I spoke I endeavored to narrow the ground a little, and spoke solely to the question of combining the assumption with the Funding bill. The Funding bill was to provide for the domestic debt which floated at large, and was at this time in no train of payment.
The propriety of paying the foreign and domestic debt was admitted by every person. It was really the business which brought us together. But here we must not pass it, unless we tack it to another, which we considered as a political absurdity. This was contradicting the spirit of free legislation. Every subject ought to hang on its own merits. It was offering violence to our understandings. I said a good deal on the subject, and could not restrain myself from going into the merits of the assumption. But I might as well have poured out speech on senseless stocks or stones. It was carried against us, fifteen to eleven. A committee was immediately appointed to make the arrangements. We adjourned.
I came down-stairs, and all the speculators, both of the Representatives and city, were about the iron rails. Ames and Sedgwick were conspicuous among them. The Secretary [Hamilton] and his group of speculators are at last, in a degree, triumphant. His gladiators, with the influence that has arisen from six dollars per day, have wasted us months in this place. But I can not see that I can do any further good here, and I think I had better go home. Everything, even to the naming of a committee, is prearranged by Hamilton and his group of speculators. I can not even find a single member to condole in sincerity with me over the political calamities of my country. Let me deliver myself from the society of such men, for I verily believe the sun never shone on a more abandoned composition of political characters.

### 17

July 17th. — Having some leisure this morning, I called on Dr. Williamson and told him my intention of going home. He got into a long tale of his settling his children in Philadelphia and taking a more Northern position for his family than North Carolina, etc. By the way, I would only remark he has one child only born, but he has begotten another, as he says. But no gray-headed man ever was fuller of future arrangements for a numerous progeny.
He went into the Hall and everybody soon had it that I was going home, etc. I went from here and called on Fitzsimons and Clymer; told them I wished to go home, but had no objection to take the sense of the delegation on the measure. Fitzsimons said nothing, but looked Go to the devil, as I thought. Clymer spoke most pointedly against my going; said we would lose nine votes south of Virginia on a postponement bill which was going to be brought forward. By the by, we never had but seven from that quarter. I told him the delegation were to dine together to-morrow; if it was their opinion that I should stay, I would do so.
Attended at the Hall. Little was done, and we sat waiting an hour for the committee to report the bill with amendments. It was done. An attempt was made to pass it immediately by a third reading down to the House of Representatives. It was moved that it should be printed. This was opposed. The Vice-President gave the history of both the bill and the resolutions. With respect to order, he made this out to be the third reading; and of course the question would be, the sending of it to the Representatives.
It was now proposed, as an expedient, that the Secretary [of the Senate] should read the bill from the desk for information of the members. This obtained, and now behold, to a great many innovations and amendments a whole new clause was added! There was something of unfairness in this. It was, however, ordered to be printed for Monday.
When I came down-stairs, Mr. Clymer came to where I stood with General Irwin. We talked over the general belief that the assumption was forced on us to favor the views of speculation. Mr. Clymer mentioned one contract on which about eight shillings in the pound had been cleared on eighty thousand pounds. General Irwin seemed to scruple eight shillings in the pound! Mr. Clymer said he was not so sure of the rate cleared, but the sum speculated on was eighty thousand pounds. Much of this business was done in the 'Change alleyway. Constable, however, is known in the beginning of the session to have cleared thirty-five thousand dollars on a contract for seventy thousand dollars. The whole town almost has been busy at it; and, of course, all engaged in influencing the measures of Congress. Nor have the members [of Congress] themselves kept their hands clean from this dirty work; from Wadsworth, with his boat-load of money, down to the daily six dollars, have they generally been at it. The unexampled success has obliterated every mark of reproach, and from henceforth we may consider speculation as a congressional employment. Nay, all the abominations of the South Sea bubble are outdone in this vile business. In wrath, I wish the same fate may attend the projectors of both!

### 18

July 18th, Sunday. — This day the [Pennsylvanian] delegation dined at Brandon's. Mr. Morris stated to the Representatives the train of business was in the Senate. Mentioned the importance of completing the Funding law, particularly to us who now had the residence of Congress before us; that the rising of Congress without funding might go to shake and injure the Government itself, etc. We had much talk, but nothing was concluded or any agreement entered into. Mr. Fitzsimons averred, in the most unequivocal manner, the grand object of the assumption to be the collecting all the resources of the United States into one treasury. Speaking of the State of Pennsylvania, he avowed she would be a debtor State to a large amount on the settlement of the accounts, and the next moment said she would draw interest on three million dollars annually. It is not easy to reconcile his assertions on this subject. A great deal of loose talk passed among us. As I had the delegation together, I mentioned my intention of going home, and desired to know if any of them had any objection. The discourse soon took a ludicrous turn; but no objection was made, and I believe I will set off to-morrow afternoon.

### 19

July 19th. — Have made up my mind on the subject of going home. I can not serve my country anything by my staying here longer. I will certainly feel ashamed to meet the face of any Pennsylvanian who shall put to me the question, "What have you done for the public good?" I can answer with truth, "I have tried the best in my power."
Settled with the Speaker. He would have me pay nothing for any liquors, but said his boy had cost him fifty dollars, which he desired me to pay one half of. I agreed. He had about forty dollars of my money in his hands. I owe him four shillings and sixpence, Pennsylvania. I well recollect the service of the boy was mentioned, or at least all the services which I wanted in that way when I settled for my boarding at four dollars per week. I have drunk, occasionally, some of his wine — he said, not amounting to more than a bottle or two. I am convinced it would not amount to gallons. But I most cheerfully agreed to pay what he proposed.
I attended the Hall at the usual time. And now the material business of the day, the Consolidated Funding bill and assumption, were taken up. Mr. Morris showed a vindictive and ireful disposition from the very start, and declared he would have the yeas and nays on every question. This, in fact, is declaring war against me only, as it is me only whom they can effect in Pennsylvania. I know they mean to slay me with the sword of the public creditors. He was as good as his word, and moved every point to increase the demand against the public, and uniformly called the yeas and nays. All the motions were made for augmentations by him, Schuyler, and King, vide the minutes for the yeas and nays.
When he moved that six per cent should be paid on the back interest, as there were but four of them for it, and enough did not rise for the yeas and nays, I told him I was sorry to see him in distress, and jumped up. If I can turn these yeas and nays against him, the act will be a righteous one.
In the language and calculations of the Treasury, the third alternative is actually six per cent, without taking in the advantage of the quarterly over annual payments, grounded on the irredeemable quality of the debt. But I really question if we shall ever see that Change-Alley doctrine established here, which makes debt valuable in proportion to that qualification. It never can happen without a gradual fall of interest, which, in this country, may be rather considered as improbable.
Before Congress met I walked awhile across the [Senate] chamber with Mr. Lee. He lamented equally with me the baneful effects of the funding disease. [No nation ever has adopted it without having either actually suffered shipwreck or being on a voyage that must inevitably end in it. The separation from Great Britain seemed to assign us to a long run of political existence; but the management of the Secretary [Hamilton] will soon overwhelm us with political rule. Schuyler assigned a new kind of reason this day for taxation. Three millions and a half of dollars annually would be only one dollar per head on the average. It was nothing, etc. It is true it is not a heavy tax, but it ought not to be imposed without necessity.
This wretch is emaciated in person, slovenly in dress, and rather awkward in address. No Jew ever had a more cent-per-cent aspect. He seems the prototype of covetousness. Nor is it possible to assign to his appearance any passion, property, or affection but the love of money and the concomitant character of a miser.
I can not help noting something which may be void of design. Yesterday two letters were shown at dinner: one by Mr. Morris to the Governor and Council [of Pennsylvania], another by Clymer to the mayor and corporation [of Philadelphia]. It was agreed that the Senators should sign the one to the Governor and Council, and the Speaker, in behalf of the delegation, should sign the one to the corporation. I was much pleased with this arrangement, for there was a clause in Clymer's letter of advice to erect a new building for Congress, for the giving the State-House to Congress would furnish a reason for removing the scat of Government elsewhere. This day in Senate, Mr. Morris produced this last letter to me, desiring me to sign it. I declined it, telling him the Speaker was to sign that letter. I could not help concluding there was design in this business.
There was a dinner this day which I had no notice of, and never thought of such a thing. In the evening Mr. Rees, clerk to Mr. Morris, called on me with the letter to the Government. This I readily signed; but here comes the Speaker with the other letter for me to sign. All this does not look like candor. I told the Speaker my objections. There is a subject in that letter which I never have touched. I will not touch it now. I have already written fully to the mayor on the subject.

### 20

July 20th. — We went this day at the funding system and pursued it with nearly the same temper that we did yesterday. Mr. Morris had often declared himself that he would be for an assumption equal to the representation, and had calculated a schedule for the purpose; but, all I could say to him, he would not gratify me in moving it. I knew there was no chance of carrying it. But he leveled his whole force against the nineteenth section, which, in fact, is the only favorable one to our State, for our existing State debt can not be much more than one million. I will refer to the minutes for the proceedings of the day. Mr. Morris having often threatened that he would vote against the bill, at last made this remarkable speech: "Half a loaf is better than no bread. I will consent to the bill on behalf of the public creditors, for whom I am interested" (I looked up at him, and he added), "as well as for the rest of the Union." This last shed some palliation over his expressions.
I contended that the speculators generally had dealt on the face of the certificates; or, if they had dealt on the amount, it was always at an abated rate — clear proof they never expected the back interest to be funded. By the bill, every hundred of principal draws four annually, and as the back interest is about on the average equal to half the principal (at least it is so by the Secretary's [Hamilton's] report), this, at three per cent, adds one and a half more — equal to five and one half per cent per annum for ten years; and then the other third (or what is equal to it in 'Change-Alley calculation) comes at six per cent, which, added, gives about seven and a half per cent on the face of the original certificate.
I have turned the leaf to note that I may consider myself as now having passed the Rubicon with the Philadelphians. I saw Clymer through the window of the Senate chamber. Morris was sent for and went out. He came in with the same letter which I had refused to sign yesterday, and asked me to sign it. I refused, and told him plainly it touched a subject which I never had touched, nor would now. He said no more.
Mr. Morris told me this day I must allow myself to get the lands of which he had spoken to me. I told him all on my part was ready; only put the warrants into my hands. I, however, added, we have ruined our land-office by the assumption. The State certificates were the materials to buy the lands with. The offices will now be shut, for neither State money nor specie can be got or spared for it. He was silent, and I really thought he looked as if he feared that his conduct would be turned against him in the public eye.
After dinner this day I read a letter to the Speaker from John Montgomery, of Carlisle, not much in favor of Mr. Morris. He then gave me the following intelligence: That Fitzsimons and Mr. Morris' adherents, fearful that he could not be carried by a popular election, were determined to change the mode to electors. But all the difficulty was to know how Wilson could save his credit in convention and carry his party over with him after what had already happened, this being one of the pillars on which his late popularity was supported. It is easy to see the reason of all this. The mode of electors admits of more cabal, intrigue, etc.

### 21

July 21st. — King's motion of yesterday for postponement and sundry other matters which I had observed made me fearful that some storm was gathering. I called on Mr. Morris and expressed my apprehension and proposed to him that if any unexpected manoeuvre should display itself we should, with the utmost coolness, call for a concurrence of the resolution for the adjournment on the 27th.
Attended at the Hall on the affair of Donald Campbell; the most impudent and ill-founded set of claims ever I was witness to. The first business in the Senate was the new bill of ways and means. Committed.
A message, with a bill, respecting consuls and vice-consuls.
The bill for the military grants of lauds to the Virginia officers. Committed.
The Senate was now full, and the Funding bill was taken up for the last time. I made a despairing effort. Having almost uniformly opposed the measures of Congress during the present session, some general declaration of my principles or motives may be necessary to prevent any suspicion of a disposition inimical to the Government itself.
First, then, I am totally opposed to the practice of funding, upon republican as well as economical principles. I deny the power as well as the justice of the present generation charging debts, more especially irredeemable ones, upon posterity; and I am convinced that they will one day negative the legacy. I will suppose (suppositions are common in this House) that not one member of Congress has been influenced by any personal motive whatever in arranging the American funding system, which now spins on the doubtful point of pass or not pass; and, as it falls, may turn up happiness or misery for centuries to come. No; I will take gentlemen at their word, and believe that it is the glare of British grandeur, supposed to follow from her funds, that has influenced their conduct, and that their intentions are pure, wishing to render America great and happy by a similar system. Tiffs will lead to an inquiry into the actual state of Britain; and here, I trust, we shall find all is not gold that glitters.
It is, if I mistake not, about a century since the commencement of the English funds, or, in other words, since that nation began to mortgage the industry of posterity to gratify the ambition and avarice of the then Government. Since that period wars have been almost continual. The pretexts have been ridiculous — balances of power, balance of trade, honor of the flag, sovereignty at sea, etc., but the real object was to fill the Treasury, to furnish opportunity for royal peculation, jobs and contracts for needy courtiers, to increase the power of the crown by the multiplication of revenue and military appointments and the servility of the funds, for every stockholder is, of course, a courtier. The effect of these wars has been the commotion of almost the whole world; the loss of millions of lives; and the English nation stands at this day charged with a debt of about two hundred and fifty millions sterling, the annual interest of which and charges of collecting in that country is above eleven millions annually, and would be above fifteen in this.
It has been said that this is nothing in a national point of view, as the nation owes it to individuals among themselves. This is true only in part, as foreigners draw great sums. Yet it is believed that near half a million of the inhabitants of Great Britain, including army, navy, revenue, and stockholders, are supported from the Treasury. The whole of them, be the number what it may, must be considered as unproductive drones, who are ever ready to support the administration, be it ever so oppressive to their fellow-citizens.
There is another calculation said to be more exact, viz., that near a million of paupers, reduced by exorbitant taxes below the power of housekeeping, are dependent on national charity and poor-rates. Great cry has been made about Mr. Pitt as the political savior of his country — that he has paid part, and will finally discharge the whole, of the national debt. This is a vile deception. By some management between him and the stock-jobbers, as he buys they raise the price of the remaining stock, the aggregate value of which is now greater, at the market price, than when he began to purchase, so that the nation, instead of gaining, is a loser to the amount of the new duties. It is not likely that the trading of Government in stock or certificates ever will have a different effect.
There is another part of his conduct for which I am ready to give him proper credit. He seems by his sham armaments, to have hit on an expedient to plunder the nation without bloodshed. Let him enjoy this praise in common with other English robbers, who, unlike those of other nations, seldom accompany their depredations with murder. It is in vain to expect the payment of the British debt in any other way than by a national bankruptcy and revolution. Is this the precipice to which we would reduce the rising nation of North America? It may be said none of us will live to see it. Let us at least guard our memories from the approach of such misconduct.
It may be here asked, What, then, is to be done? Just what the public expectation called for. The Western lands have been considered from the beginning of the late contest as the fund for discharging the expenses of the war. The old Congress made laudable advances in this way. The present session has not passed without applications on that subject as well from companies among ourselves as persons from Europe. We have now a revenue far exceeding the limit, five per cent, which the desideratum of the old Congress and the want of which occasioned the formation of our present Constitution, and fully sufficient to discharge a reasonable interest, proportionate price of the public debt until the whole is extinguished by the Western sales. Thus no one will sustain loss. Substantial justice will be done, and the public expectation will be fully satisfied. But to bind down the public by an irredeemable debt with such sources of payment in our power, is equally absurd as shackling the hands and feet with fetters rather than walking at liberty.
The friends of the bill paid no attention whatever to me, and were but too successful in engaging the attention of others by nods, whispers, engaging in conversation, etc. Morris, Dalton, and some others went out and stayed for an hour. They carried the bill against us — fourteen to twelve. It is in vain to dissemble the chagrin which I have felt on this occasion.
We had a resolution relating to Howell's committee. I am of the committee. Report of joint committee on Settlement bill read for information, but could not be acted on, as the bill is in the power of the Lower House. I find I need be under no uneasiness about the Residence bill.

### 22

July 22d. — Attended at the Hall this day, as much to take the wrinkles out of my face, which my yesterday's disappointment had placed on it, as for anything else. It is in vain to think of changing a vote anyway; a majority are sold, and Hamilton has bought them. I can be of no further use, and will absolutely leave them. It is certainly a defect in my political character that I can not help embarking my passions and considering the interest of the public as my own. It was so while I was at the bar, in respect of my clients, when I thought their cause just. Well, be it so. It has its inconvenience, and hurts my health, but I declare I never will endeavor to amend it.
Attended all the committees on which I was, and gave my opinion as to the reports, etc. In Senate the Collection bill was reported. Almost an entire new system, or the old one so renovated as to make a volume of new work for Congress. I listened an hour to the reading of it. Rose, bade a silent and lasting farewell to the Hall, and went to my lodgings for the purpose of packing.
And now, at last, we have taken leave of New York. It is natural to look at the prospect before me. The citizens of Philadelphia (such is the strange infatuation of self-love) believe that ten years is eternity to them with respect to the residence, and that Congress will in that time be so enamored of them as never to leave them; and all this with the recent example of New York before their eyes, whose allurements are more than ten to two compared with Philadelphia. To tell the truth, I know no such unsocial city as Philadelphia. The gloomy severity of the Quakers has proscribed all fashionable dress and amusement. Denying themselves these enjoyments, they, as much as in them lies, endeavor to deprive others of them also; while at the same time there are not in the world more scornful or insolent characters than the wealthy among them. Witness the Wartons, Pembertons, etc. No, these feeble expectations will fail. Go they [Congress] must.
Nay, taking another point of view. Political necessity urges them and a disruption of the Union would be the consequence of a refusal. There is, however, a further and more latent danger which attends their going. Fixed, as Congress will be, among men of other minds on the Potomac, a new influence will, in all probability, take place, and the men of New England, who have hitherto been held in check by the patronage and loaves and fishes of the President, combined with a firm expectation that his resignation (which is expected) will throw all the power into their hands, may become refractory and endeavor to unhinge the Government. For my knowledge of the Eastern character warrants me in drawing this conclusion, that they will cabal against and endeavor to subvert any government which they have not the management of.
The effect must be sensibly felt in Philadelphia, should a great commercial town arise on the Potomac. She now supplies all the over-hill country, and even the frontiers of Virginia and other Southern States with importations. This must cease; nor need she expect a single article of country produce in return from the west side of Susquehanna.
It is true that the genius of Virginia and Maryland is rather averse to exclusive commerce. The Southern planter is situated on his extensive domain, surrounded with his slaves and dependents, feels diminution and loses his consequence by being jumbled among brokers and factors. And yet we have seen what Baltimore has become in a few years from the small beginnings of a few Pennsylvanians at first, and afterward by the accession of other strangers, for wherever the carcass of commerce is thither will the eagles of traffic be gathered. For my own part, I would rather wish that the residence of Congress should not be subject to commercial influence.
Too much has that influence, conducted by the interest of New England, whose naval connections throw them into that scale, governed — nay, tyrannized — in the councils of the Union. My consolation for going to the Potomac is, that it may give a preponderance to the agricultural interest. Dire, indeed, will be the contest, but I hope it will prevail. I can not, however, help concluding that all these things would have been better on the Susquehanna. But, query, is not this selfish, too? Ay, but it may, nevertheless, be just.

## Notes

* ↑ They used sand in those days instead of blotting-paper.
* ↑ The pay of Congressmen and Senators.