National credit

“ And when, in the disturbance of credit and industry which followed, the twin heresies Expansion and Repudiation stalked abroad, Yankee ideas conquered again in the policy of our distinguished guest, the Secretary of the Treasury. So great a triumph has never been won by any financial officer of the government before, as in the funding of our national debt at four per cent., and the restoration of the national credit, giving an impulse to our prosperity and industry that can neither be stayed nor stopt. ”

“ In spite of dishonest and subtle counsel, and in spite of great temptation, we have dealt with the public debt on the simple and honest principle that the only thing to do with a debt is to pay it. The National credit is the best in the world, and the National debt has ceased to be an object either of anxiety or consideration. ”

“ Not only would the national credit be seriously impaired if the government should be under the necessity of using silver dollars or certificates in payment of gold obligations, but business of all kinds would be greatly disturbed ”

“ That it is bold and flourishing in security, and fearful and withering in danger, A small degree of danger being about to assail the credit of the bank of England, the corporation influenced government to protect it against the payment of its debts to the nation; a protection, which would not withstand the shock of war, invasion, superior force and disaster, as long as did the currency of national credit in France and America.
National credit includes the credit of every individual; a part cannot be more solid than the whole ”

“ Authority, it is conceded, exists in congress to pass laws providing for the issue of treasury notes, based on the national credit, as necessary and proper means for fulfilling the end of the express power to borrow money, nor can it be doubted at this day, that such notes, when issued by the proper authority, may lawfully circulate as credit currency, and that they may, in that conventional character, be lawfully employed, if the act authorizing their issue so provides, to pay duties, taxes, and all the public exactions required to be paid into the national treasury. ”

“ The national system will create a reliable and permanent influence in support of the national credit and protect the people against losses in the use of paper money. Whether or not any further legislation is advisable for the suppression of State-bank issues, it will be for Congress to determine. ”

“ The financial world requires to feel assured that under any possible form of government the importance of maintaining the national credit will be regarded as paramount to every other consideration. It is among the solid advances of practical morality that this is so much better understood than was once the case. ”

“ At all events, as a measure of justice to the holders of the nation's certificates of indebtedness, I would recommend that no more legislation be had on this subject, unless it be to correct errors of omission or commission in the present laws, until sufficient time has elapsed to prove that it can be done and still leave sufficient revenue to meet current expenses of Government, pay interest on the public debt, and provide for the sinking fund established by law. The preservation of our national credit is of the highest importance ”

“ Our national credit should be sacredly observed, but in making provision for our creditors we should not forget what is due to the masses of the people. It may be assumed that the holders of our securities have already received upon their bonds a larger amount than their original investment, measured by a gold standard. ”

“ And until the United States Government divests itself of these unnatural burdens, which it is unfitted to carry, we shall continue to suffer immeasurably whenever called upon to use our national credit to any great extent. ”

“ A uniform national currency has been provided, repudiation frowned down, the national credit sustained under the most extraordinary burdens, and new bonds negotiated at lower rates. The revenues have been carefully collected and honestly applied. Despite annual large reductions of the rates of taxation, the public debt has been reduced during General Grant’s Presidency at the rate of a hundred millions a year. Great financial crises have been avoided, and peace and plenty prevail throughout the land. ”

“ At the adoption of the National Constitution, the people, to their wide-spread cost, had become familiar with bills of credit and their incidents, while all conversant with Colonial history must have known the part which bills of credit played for nearly a century, not only as a help to currency, but as a tender, constituting paper money. ”

“ Another proposition equally clear is, that at the time the Constitution was adopted, it was, and had for a long time been, the practice of most, if not all, civilized governments, to employ the public credit as a means of anticipating the national revenues for the purpose of enabling them to exer cise their governmental functions, and to meet the various exigencies to which all nations are subject ”

“ Because they are "less impressed with the importance of national credit, or because their citizens have little, if any, immediate interest in the question." But other states, "a numerous body of whose citizens are creditors to the public beyond the proportion of the state in the total amount of the national debt, would be strenuous for some equitable and effective provision." In other words, citizens who had nothing at stake would be indifferent, and those who had something to lose would clamor. ”

“ Indeed, taking the money-market as a test, it may be said that Russia, Turkey, certain South American States, and Portugal are the only countries where national credit has been seriously impaired by borrowing, and even among these the decline is sometimes due to the fact that the country has drawn too largely in quite recent times upon its credit. ”

“ One would really suppose that nothing was perishable but the national credit—the nobleman, the merchant, the shopkeeper, all who have assignats, engage in these speculations, and the necessities of our dissipated heirs do not drive them to resources for obtaining money more whimsical than the commerce now practised here to get rid of it. ”

“ In this first report on public credit, January 9, [Pg 57] 1790, Hamilton analyzed the financial situation with masterly clearness and set forth his plans for the adjustment of the national debt. The determination of Congress to make adequate provision for the support of the public credit was justified in his mind by every consideration. A country like the United States, possessed of little active wealth, must borrow in emergencies; to borrow on good terms, it must establish its credit ”

“ Contrast genuine and honest publick credit, with this thievish spectre, and assign the privilege of consecrating law, to general or exclusive interest, as the result shall indicate which of the two is the purest legislator.
Genuine publick credit is enthroned, not upon gold gathered by law into a bank, but upon property distributed by industry. It is greatest, where national debt is least. It flows from national wealth and prosperity, not from the wealth of corporations enriched by exclusive privileges. It creates gold by industry, not by magick ”

“ The progress of public credit is witnessed by a considerable rise of American stock abroad as well as at home, and the revenues allotted for this and other national purposes have been productive beyond the calculations by which they were regulated. This latter circumstance is the more pleasing, as it is not only a proof of the fertility of our resources, but as it assures us of a further increase of the national respectability and credit, and, let me add, as it bears an honorable testimony to the patriotism and integrity of the mercantile and marine part of our citizens. ”

“ A penultimate Disadvantage of Credit may be noted in the facility which it offers for contracting great national Debts. There are certain aspects, under which a Nation may be properly regarded as a moral person, and as such person may pledge the public faith for the present and the future, becoming a debtor to its own people or to foreigners, and thus a public debt may be made a sort of mortgage on the national property and income. ”

“ To protect the national honor, every dollar of Government indebtedness should be paid in gold, unless otherwise expressly stipulated in the contract. Let it be understood that no repudiator of one farthing of our public debt will be trusted in public place, and it will go far toward strengthening a credit which ought to be the best in the world, and will ultimately enable us to replace the debt with bonds bearing less interest than we now pay. ”

“ A vast volume of the business of the world is done on credit. The national debts exceed thirty thousand millions of dollars. No one can tell the amount of private debts, but it must be much in excess of that sum, large as it is. ”

“ He smote the rock of the national resources, and abundant streams of revenue gushed forth. He touched the dead corpse of the Public Credit, and it sprung upon its feet. ”

“ A credit had been established for the country, whose soundness no capitalist doubted—an immense floating debt had been funded in a manner perfectly satisfactory to the creditors, and a revenue had been secured sufficiently ample for the national demands. ”

“ Many persons who entertain sound views on the subject of credit, consider such an establishment as indispensable, whilst even those who are least acquainted with the subject—those who scarcely know what a bank is, and who are totally327 ignorant of the organization suitable to a national bank, seem to derive confidence, amidst the present want of credit, simply from understanding that the National Assembly contemplates the establishment of a national bank. ”

“ When a nation is desirous of establishing public credit, or, in other words, of inducing individuals to confide their property to its government, they must begin by acquiring a revenue equal to their fixed expenditure ”

“ Private credit, which fell to decay from the destruction of public credit, by a too inefficient general government, will be restored; and this valuable intercourse among ourselves must give an increase to those useful improvements that will astonish the world. ”

“ The change which had at last been effected in the Constitution, securing to the Federal head full power to levy and collect all necessary revenue, and the prospects of an improving trade and increasing prosperity in every branch of business gave of themselves to the Government a good right to anticipate an improvement in the public credit sufficient to enable it to make direct loans abroad upon fair terms, payable at specific and reasonable periods, as [146] had been before done without these advantages. ”

“ In January, 1795, he sent a letter to Congress on the subject of the public credit, which is one of his ablest productions, full of sound financial doctrine, and showing that he was in advance of most men on those economical questions the proper settlement of which so closely concerns the welfare of nations. ”

“ The laws of credit, therefore, ought to rest upon a permanent foundation: neither is law necessary to restrain credit; for if, in a commercial state, it becomes detrimental by its over growth, it finds itself a remedy. ”

“ The Council will be clothed with authority to approve and schedule projects, to allocate on a fair basis the funds or credit which the Central Bank may from time to time mobilize to the loan portfolios of government lending agencies, to keep them within the approved pattern of allocation of available capital and the limitations established by law. We will draw upon our full credit capacity, backed by the guaranty of the Na­tional Government, to secure funds for this program. ”

“ A person of the civil law enjoys the right to reputation. No organization or individual may infringe upon other’s right to reputation by insultation, defamation, or the like. Reputation is a social evaluation of the moral character, prestige, talent, and credit of a person of the civil law. ”

“ To secure the latter I see but one way, and that is to authorize the Treasury to redeem its own paper, at a fixed price, whenever presented, and to withhold from circulation all currency so redeemed until sold again for gold.
The vast resources of the nation, both developed and undeveloped, ought to make our credit the best on earth. With a less burden of taxation than the citizen has endured for six years past, the entire public debt could be paid in ten years. ”

“ If the borrowings of a state be only in proportion to the extinction of the old capitals, or of what I have called determinate annuities, then the debts will not increase.
When a statesman, therefore, establishes a system of public credit, the first object which should fix his attention is to calculate how far the constitution of the state, and its internal circumstances, render it expedient to throw the revenue of it into the hands of a money’d interest. ”

“ Yes, madam, the mightiest financial scheme the world has ever witnessed, the grandest exemplification of the principle of credit that has ever been promulgated by man, was his invention. He farmed the whole revenues of France, and at one stroke annihilated the peculation of receivers-general, and secured the revenue of the nation. ”

“ As to the payment of our own debt, the government represent the real sentiment of the nation as a whole. The British taxpayer is no doubt fully alive to the fact that this heavy debt was incurred by him during the war in the main in order to finance American supplies to our Allies. We could [Pg 245] have paid for all the supplies we required for our own use without resort to any loan from the American government. Nevertheless, the money was advanced by the lender on our credit and our signature. ”