State debt

“ Its success would liquidate the state debt and diminish the annual charges on the treasury, reducing the interest from eighty millions to forty-five or forty-eight millions. The annual charges from which the treasury was to be relieved were to be paid from the profits on the collection of the revenue and the contingent profits of commerce. The whole operation was to pay the creditors of the state 3 per cent. per annum, and the profits and monopolies heretofore granted to farmers of the revenue and commercial companies. ”

“ In the first place, the appellee contends, that, in consequence of the provisions of the Funding Act, and the constitutional amendment adopted in confirmation of it, the State debt cannot be increased, whereas the assumption of the levee debt (which, it is contended, is not a debt of the State) will directly increase it. ”

“ What I said to the Congress in the close of my message I repeat to you.
"Let us unanimously recognize the fact that the Federal debt, whether it be twenty-five billions or forty billions, can only be paid if the Nation obtains a vastly increased citizen income. I repeat that if this citizen income can be raised to eighty billion dollars a year the national Government and the overwhelming majority of State and local governments will be 'out of the red.' The higher the national income goes the faster shall we be able to reduce the total of Federal and state and local debts. ”

“ 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 ”

“ And hence, as relative to the joint consolidated debt, the inefficiency of the public finances, and the bankrupt state of the federal treasury, which can never be remedied without empowering Congress to levy adequate duties and taxes. Without such a power, the accumulating debt will never be paid, but by a forcible collection, which our foreign creditors know how, and are able to apply, if, unhappily, it should be necessary. ”

“ The burden of paying the interest on this mortgage, and the final payment of the principal, is wholly on the capable and industrious members of the family.
National debts are incurred to relieve the present wealth of the burden of present government calls and obligations, and to roll it upon those who shall produce wealth in the future. So the debt of a city, state, or nation is a present relief to property holders, by placing the producers under future obligations.
A street in a city is to be paved; no additional tax is levied; but bonds are issued running twenty years. ”

“ The idea that such a debt is to become permanent should be at all times discarded as involving taxation too heavy to be borne, and payment once in every sixteen years, at the present rate of interest, of an amount equal to the original sum. This vast debt, if permitted to become permanent and increasing, must eventually be gathered into the hands of a few, and enable them to exert a dangerous and controlling power in the affairs of the Government. The borrowers would become servants to the lenders, the lenders the masters of the people. ”

“ Our debt is doubly secure—first in the actual wealth and still greater undeveloped resources of the country, and next in the character of our institutions. The most intelligent observers among political economists have not failed to remark that the public debt of a country is safe in proportion as its people are free; that the debt of a republic is the safest of all. ”

“ Payment of the public debt of the United States as rapidly as practicable—all moneys drawn from the people by taxation, except so much as is requisite for the necessities of the government, economically administered, being honestly applied to such payment; and where the obligations of the government do not expressly state upon their face, or the law under which they were issued does not provide that they shall be paid in coin, they ought, in right and in justice, to be paid in the lawful money of the United States. ”

“ With rigid economy, vigorous salvage operations, and adequate revenues from taxation, a surplus of current receipts over current expenditures can be realized and should be applied to the floating debt. All branches of the Government should cooperate to see that this program is realized. I cannot overemphasize the necessity of economy in Government appropriations and expenditures and the avoidance by the Congress of practices which take money from the Treasury by indefinite or revolving fund appropriations. ”

“ It is particularly your province to consider the state of the public finances, and to adopt such measures respecting them as exigencies shall be found to require. The preservation of public credit, the regular extinguishment of the public debt, and a provision of funds to defray any extraordinary expenses will of course call for your serious attention. Although the imposition of new burthens can not be in itself agreeable, yet there is no ground to doubt that the American people will expect from you such measures as their actual engagements, their present security, and future interests demand. ”

“ 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. ”

“ In the present prosperous condition of the national finances it will become the duty of Congress to consider the best mode of paying off the public debt. If the present and anticipated surplus in the Treasury should not be absorbed by appropriations of an extraordinary character, this surplus should be employed in such way and under such restrictions as Congress may enact in extinguishing the outstanding debt of the nation. ”

“ If they can raise the interest of the public debt, it is sufficient. They will not be called upon for more than the interest, till such time as the country be rich and populous. The principal can then be paid with great facility. ”

“ One of the most valuable articles of the present State constitution is that which prohibits the State, save in a few exceptional cases, from creating any debt, and which provides for the payment at an early day of the debt already contracted. I am convinced that it would be wise to extend the same policy to the creation of public debts by county, city, and other local authorities. The rule "pay as you go" leads to economy in public as well as in private affairs; while the power to contract debts opens the door to wastefulness, extravagance, and corruption. ”

“ When there are no specific sinking-fund attachments to public debts, the repayment of public debt might be regarded, so far as the contract with creditors is concerned, as a work of supererogation. But just as a business man gains in credit by prompt or anticipated payments, so a policy more liberal to creditors than legal requirements demand redounds to the credit of the State. Repayment of the principal is not essential, as we have seen, to the maintenance of public credit, as States whose debt continues to increase stand in good repute, but is a policy to be recommended. ”

“ If we take the expenditures of all the governments of the United States, Federal, State, municipal, county, and town, for a similar period of two years, they reach the enormous total of two billion dollars, equal to more than two thirds of the national debt at the close of the civil war. ”

“ 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. But it is not desirable that the people should be taxed to pay it in that time. Year by year the ability to pay increases in a rapid ratio. But the burden of interest ought to be reduced as rapidly as can be done without the violation of contract. The public debt is represented in great part by bonds having from five to twenty and from ten to forty years to run, bearing interest at the rate of 6 per cent and 5 per cent, respectively. ”

“ To supply the deficiency, Congress, by the act of December 23, 1857, authorized the issue of $20,000,000 of Treasury notes; and this proving inadequate, they authorized, by the act of June 14, 1858, a loan of $20,000,000, to be applied to the payment of appropriations made by law."
No statesman would advise that we should go on increasing the national debt to meet the ordinary expenses of the Government. This would be a most ruinous policy. ”

“ If a state, for example, borrows at par at 6% when its credit is low, it may easily when again in a flourishing condition reduce the interest on its debt to 4 or even 3%. The United States government actually did so with the debt it had to contract at the time of the Civil War. ”

“ Shall such states as are shut out by situation from availing themselves of the least advantage from this quarter, be left to sink under an enormous debt, whilst others are enabled, in a short period, to replace all their expenditures from the hard earnings of the whole confederacy? ”

“ If a state is poor, and people owe more money than can be procured, a legislature may perhaps go so far as to suspend the collection of debts; or to ordain that a certain part only of the debts shall be recoverable immediately, and the payment of the remainder suspended. This may ease the debtors; but can be justified in extreme cases only, when the people are generally and greatly involved.
[pg 042] A people should not generally be in debt: The consumers of goods should not get credit. Heavy and numerous debts are great evils to a state. ”

“ When we contemplate the ordinary annual augmentation of impost from increasing population and wealth, the augmentation of the same revenue by its extension to the new acquisition, and the economies which may still be introduced into our public expenditures, I can not but hope that Congress in reviewing their resources will find means to meet the intermediate interest of this additional debt without recurring to new taxes, and applying to this object only the ordinary progression of our revenue. ”

“ Whereas, if no such regulations are established, either an artificial debt of near [151] two millions and a half must be created; or 5 per cent. for 15 or 20 years certain, together with the profits of a lottery, must be given; and a new tax laid which will produce 400,000l. per ann.
It may deserve to be added, that an unprosperous state of public affairs, and apprehensions of public danger, would have a tendency, by placing the redemption of our debts at a greater distance, to promote, rather than obstruct the success of schemes attended with such regulations. ”

“ RUTLEDGE'S motion was referred. He then moved that a grand committee be appointed, to consider the necessity and expediency of the United States assuming all the state debts. A regular settlement between the Union and the several states would never take place The assumption would be just, as the state debts were contracted in the common defence; it was necessary, as the taxes on imports, the only sure source of revenue, were to be given up to the Union; it was politic, as, by disburdening the people of the state debts, it would conciliate them to the plan. ”

“ The next consideration, which offers is the amount of public debt, and every good American must lament that confusion in public affairs, which renders an accurate state of it unattainable. But it must continue to be so until accounts at home and abroad be fully adjusted. The enclosed is an estimate, furnished by the Controller of the Treasury; from which it appears, that there is, already an acknowledged debt bearing interest, to the amount of more than twelve millions of dollars. ”

“ This amounts to thirtyfive millions three hundred and twentyseven thousand seven hundred and sixtynine dollars fiftythree and one eighth ninetieths, exclusive of what he calls the unliquidated debt, being the moneys due to the several States and to individuals in the several States. I beg leave also to mention other debts [338] which have not been taken into the Register's contemplation, namely, the old continental bills and arrearages of half pay. Congress will easily see that it is not in the power of their servants to state the public debts with any tolerable precision. ”

“ For several years past the revenues of the government have been unequal to its expenditures, and consequently loan after loan, sometimes direct and sometimes indirect in form, has been resorted to. By this means a new national debt has been created, and is still growing on us with a rapidity fearful to contemplate—a rapidity only reasonably to be expected in time of war. This state of things has been produced by a prevailing unwillingness either to increase the tariff or resort to direct taxation. But the one or the other must come. ”

“ Should enlarged appropriations be made, the necessary consequence will be to postpone the payment of the debt. Though our debt, as compared with that of most other nations, is small, it is our true policy, and in harmony with the genius of our institutions, that we should present to the world the rare spectacle of a great Republic, possessing vast resources and wealth, wholly exempt from public indebtedness. ”

“ The creation of public debts is pernicious in practice, productive of more harm than good. What right have I to create debts for my grandson or granddaughter? I have no right even to presume that I will have a grandson, certainly none that he will be able to meet his own debts in addition to those I entail upon him. The character of the people called upon to settle the debt of Virginia, contracted in 1860, before or immediately after, differed radically from the character of the people who were called upon to tax themselves to cancel that debt. ”