1815.

"The inquiries of the committee cannot be satisfactorily answered in the abstract; but must be considered in connexion with the state of our finances and the state of our public credit. "When I arrived at Washington, the treasury was suffering under every kind of embarrassment. The demands upon it were great in amount, while the means to satisfy them were comparatively small, precarious in the collection, and difficult in the application.

"The demands consisted of dividends upon the old and new funded debt, of treasury-notes, and of legislative appropriations for the army, the navy, and the current service-all urgent and important. The means consisted-first, of the fragment of an authority to borrow money, when nobody was disposed to lend, and to issue treasurynotes, which none but necessitous creditors, or contractors in districts, or commissaries, quartermasters, and navy-agents, acting, as it were, officially, seemed willing to accept: second, of the amount of bank credit, scattered throughout the United States, and principally in the southern and western banks, which had been rendered in a degree useless, by the stoppage of payments in specie, and the consequent impracticability of transferring the public funds from one place to meet the public engagements in another place: and, third, of the current supply of money from the imports, from internal duties, and from the sales of public land, which ceased to be a foundation of any rational estimate, or reserve, to provide even for the dividends on the funded debt, when it was found that the treasury-notes (only requiring, indeed, a last payment at the distance of a year), to whomsoever they were issued at the treasury, and almost as soon as they were issued, reached the hands of the collectors, in payment of debts, duties, and taxes: thus disappointing and defeating the only remaining expectation of productive revenue.

"The actual condition of the treasury thus described, will serve to indicate the state of the public credit. Public credit depends essentially upon public opinion. The usual test of public credit is, indeed, the value of the public debt. The facility of borrowing money is not a test of public credit; for a faithless government, like a desperate individual, has only to increase the premium according to the exigency, in order to secure a loan. Thus public opinion, manifested in every form and in every direction, hardly permits us, at the present juncture, to speak of the existence of public credit; and yet it is not impossible that the government, in the resources of its patronage and its pledges, might find the

means of tempting the rich and the avaricious te supply its immediate wants. But when the wants of to-day are supplied, what is the new expedient that shall supply the wants of to-morrow? If is now a charter of incorporation, it may then be a grant of land; but, after all, the immeasurable tracts of the western wilds would be exhausted in successive efforts to obtain pecuniary aids, and still leave government necessitous, unless the foundations of public credit were re-established and maintained."

"With these explanatory remarks, Sir, I pro ceed to answer, specifically, the questions which you have proposed :

1st. "I am of opinion, that a considerable issue of treasury-notes, with the quality of being re ceivable in subscriptions to a national bank, wil have an injurious effect upon the credit of the government, and also upon the prospects of: loan for 1815.

"Because it will confer, gratuitously, an advantage upon a class of new creditors, over the present creditors of the government, standing on a footing of at least equal merit.

"Because it will excite general dissatisfaction among the present holders of the public debt, and general distrust among the capitalists, whe are accustomed to advance the money to the government.

"Because, a quality of subscribing to the m tional bank attached to treasury-notes exclusively will tend to depreciate the value of all public den not possessing that quality; and whatever depre ciates the value of the public debt, in this way, must necessarily impair the public credit.

"Because, the specie capital of the citizens of the United States, so far as it may be deemed ap plicable to investment in the public stocks, has already, in a great measure, been so vested; the holders of the present debt will be unable to be come subscribers to the bank (if that object should eventually prove desirable) without selling their stock at a depreciated rate, in order to procure the whole amount of their subscriptions treasury-notes; and a general depression in the value of the public debt will inevitably ensue.

"Because, the very proposition of making 1 considerable issue of treasury-notes, even w the quality of being subscribed to a national bank. can only be regarded as an experiment, on which it, seems dangerous to rely: the treasury-notes must be purchased at par, with money; a new set of creditors are to be created; it may or it may not be deemed an object of speculation by the money holders, to subscribe to the bank; the result the experiment cannot be ascertained, until it be too late to provide a remedy in case of failur while the credit of the government will be affected by every circumstance which keeps the efficacy its fiscal operations in suspense or doubt.

"Because, the prospect of a loan for the year 815, without the aid of a bank, is faint and unromising; except, perhaps, so far as the pledge -f a specific tax may succeed; and then it must be recollected, that a considerable supply of moey will be required for the prosecution of the var, beyond the whole amount of the taxes to be evied.

"Because, if the loan for the year 1815 be nade to depend upon the issue of treasury-notes, subscribed to the national bank, it will probably ail, for the reasons which have already been suggested: and if the loan be independent of that peration, a considerable issue of treasury-notes, or the purpose of creating a bank capital, must, tis believed, deprive the government of every hance of raising money in any other manner. 2d. "I am of opinion, that it will be extremely ifficult, if not impracticable, to get forty-four milons of treasury-notes (forming, with six millions f specie, the capital of a national bank) into circuation with or without depreciation.

"Because, if the subscription to the bank beomes an object of speculation, the treasury-notes will probably be purchased at the treasury and at he loan offices, and never pass into circulation at

"Because, whatever portion of the treasuryotes might pass into circulation, would be speeily withdrawn by the speculators in the subscripon to the bank, after arts had been employed to epreciate their value.

CHAP. VII.

1815.

financial wounds (if the expression may be allow- BOOK XVI. ed) than were anticipated; and that it must necessarily be a long period before they can be healed. Of the European states, it is probable that Britain, notwithstanding her load of debt, will recover first. In favor of America there is the vigour of youth, great natural advantages, and a wonderful spirit of enterprise, aided by a popular constitution. As, however, good and evil are much and closely intermixed in the affairs of this world, we may console ourselves with the hope that, by the exhaustion of all the great powers, hostilities canuot soon be revived to any considerable extent, or for any great length of time.

In one respect, the United States and Britain have manifested a wise dereliction of popular prejudices on the subject of trade; for they have formed a commercial treaty, not clogged with those jealous, and at the same time for the most part ineffectual, restrictions which all preceding commercial treaties display ;-they evidently, by the framing of this treaty, consider it possible that two commercial countries may respectively flourish, not only without injuring each other, but even with mutual benefit.

The government of the United States, proud of the triumphs of their navy during the war with Britain, resolved to pay great and immediate attention to it. That they could bring to bear on this subject a large portion of good sense, of deep reflection, and of the temper and spirit which profit by the good regulations of others, while it avoids all prejudices, however long and deeply established, is manifest, from the report of the secretary of the navy. On the 18th of March, 1814, the senate came to the resolution to direct the se

for the better organization of the department of the navy of the United States. In obedience to this resolution, the report was made, of which we shall give the following abstract, convinced, as we are, that America, if Britain do not follow her plans, will soon become too powerful for us on the ocean. The report also is worthy of notice, as pointing out some faults in our navy system.

The secretary sets out with saying, it had been generally admitted that imperfections existed in the civil administration of the naval establishment ; and hence it had been inferred, that a radical change of system could alone remedy the evil.

The secretary, after observing at length on the waste, bad agency, and other defects of the naval system, next refers to those qualities and causes which have exalted the reputation of their infant navy, in the following terms :

"That our navy is not excelled in any thing which constitutes efficiency, perfect equipment, and general good qualities, it is believed will be admitted. That our seamen are better paid, fed,

1815.

BOOK XVI, and accommodated, is no less true. That all the imported, and many of the domestic, articles of CHAP. VII. equipment and of consumption in the service are exceedingly enhanced; that the wages of mechanical labour is more than double that which is paid by Great Britain; that our expenditure is greatly increased by the interruption to navigable transportation, and the great extent of the local service, is equally obvious. Yet, under all these circumstances, it is demonstrable, that upon a comparison of an equal quantity of tonnage and number of guns and men, or in proportion to the number of men alone, our naval expenditure is considerably, less than that for the navy of Great Britain, in which one hundred and forty-five thousand men are employed, at an expense of more than twenty millions of pounds sterling, annually.' "The manning of large ships of war (seventyfours, &c.) now out of commission, is recommended by government as the cheapest and the most effectual mode of defending the American coast. The nature, construction, and equipment of the ships," &c. continues the secretary, "which constitute a navy, form the basis of its efficiency, durability, and economy, and the most important branch in the civil administration of its affairs.

"The defects in this part of the British system have been the theme of criticism and reprehension for many years past. The most minute, laborious, and able investigation, has from time to time taken place, under the direction and scrutiny of the parliament, yet nothing approximating to radical amendment has been adopted; and the advocates of reform, either from the subtile ramifications of the evil, or the agency of some sinister influence, appear to despair of success."

The secretary next speaks of the diversity in the form, dimensions, and proportions of the British ships of war in general, and illustrates his argument by the following statement:

"When Lord Nelson was off Cadiz, with seventeen or eighteen sail of the line, he had no less than seven different classes of seventy-four gun ships, each requiring different masts, sails, yards, &c. so that if one ship was disabled, the others could not supply her with appropriate

stores.

"The consequences resulting from this defective organization and want of system are strongly illustrated in the fact related by a recent professional writer of rank and talents, that' out of 538 ships, &c. in the British navy, now at sea, there are only sixty-nine which are in reality superior in the discharge of metal or force of blows, but inferior in sailing, to some of the American frigates; and that there are but eighteen, which, unless in smooth water, are equal to contend with the United States, leaving 451, out of 538, which

are admitted to be incompetent to engage, single. handed, with an American frigate.' "These facts," the says secretary, are encou raging; and if the American navy is made formidable upon the principle proposed, the host British frigates and smaller vessels would be struck out of the account, or added to the list of American navy, if they came in contact.

"These views, it is true, are prospective; but with a stable, judicious, and liberal system, the result would be realized at no remote period. Having noticed these exceptions to the civ administration of the British navy, it is but just to observe, that the organization of the military part of the system is much more perfect."

After discussing the subject further, as to the system to be adopted in dock-yards, and in the other departments of the naval establishment, be concluded by submitting, with great deference, a new system for the organization of the departmen of the navy, which he presented in the form of a bill, for the better organization of the navy de partment.

The naval force of the United States, which had been set free by the peace with Great Britan was usefully and honorably employed in avenging the piracies of the Barbary States upon the con merce of the Americans, and compelling them to a future pacific conduct. A squadron, com manded by Commodore Decatur, sailed to the Mediterranean; and, on June the 20th, engaged an Algerine fleet, two ships of which were taken, one being that of the admiral. After this victory he proceeded to Algiers, the dey of which speedry entered into a treaty, by which the tribute de manded from the Americans was for ever relinquished. Decatur then, anchoring in the bay of Tunis, demanded satisfaction of the government for having suffered two prizes made by the Ame ricans, and carried into that port, to be taken out by a British ship of war, and he obliged the bey to pay the damage into the hands of the American consul. Sailing thence to Tripoly, he compelled by menaces, the pashaw of that place to pay 25,000 dollars by way of indemnity. Commoder Bainbridge, the American commander-in-chi afterwards took precautionary measures for preventing any future depredations on the commer of the United States by the Barbary corsairs.

The war with Great Britain having left the American warehouses exhausted of their store f many necessary articles, as soon as peace was stored, their ships came in numbers to the Brist ports, and renewed their usual commercial tran actions, to the benefit of both countries. T sense each entertained of the mutual advantage to be derived from an intimate correspondent and their disposition to forget past animosite were agreeably displayed by a "convention"

regulate the commerce between the territories of the United States of America, and those of his Britannic majesty," agreed upon by the negociators on each part, in London, on the 3d of July, and ratified by the American president in December. Of its articles, the first stipulates generally, a reciprocal liberty of commerce between the countries. 2. That no other duties, on export, or import, on either side, shall be imposed on the produce, or manufactures of each country, than on the like goods to or from any other country; and that the duties on shipping, and goods im

1815.

ported, shall be the same, whether the vessels be BOOK XVI, British or American; the same principle also to apply to drawbacks and bounties. 3. American CHAP. VII. vessels are to be admitted to trade with the four principal British settlements in the East Indies, paying no higher duties than the most favored nations; but they are not to carry their cargoes direct to any other port than in the United States, there to be unladen; and, also, are not to engage in the British coasting-trade of the East Indies. 4. Consuls for the protection of trade are to reside freely in each country.

THE attention of Europe had, for some time, been directed to the meeting of the French new legislature, in order to see what measures they would follow, to heal the wounds of a distracted country. Their meeting, also, was generally understood to be the period intended for disclosing the terms of peace. Every argument had been exhausted, and delay created, in adjusting this important matter. The allied ministers would not listen to any terms, till the French army was completely disbanded. When that was accomplished, the negociations for peace commenced; but, notwithstanding the degrading situation to which the French government was reduced, they objected to the terms proposed by the allies. On the 20th of September, the allied ministers delivered in the first proposals, to which the French plenipotentiaries replied as follows:

"The undersigned plenipotentiaries of his most Christian majesty forthwith laid before him the communications which were made to them, in the conference of yesterday, by their excellencies the ministers-plenipotentiary of the four united courts, respecting the definitive arrangement, as bases of which their excellencies have proposed:

1. "The cession, by his most Christian majesty, of a territory equal to two-thirds of what was added to old France by the treaty of the 30th of May, and in which should be comprehended the fortresses of Condé, Philippeville, Marienbourg, Givet, and Charlemont, Sarre-Louis, Landau, and forts Joux and L'Ecluse.

2. "The demolition of the fortress of Huninguen. 3. "The payment of two sums; the one of 600 millions, under the denomination of indemnity; the other of 200 millions, to serve for the construction of fortresses in the countries conterminous with France.

4. "The military occupation, during seven years, of the fortresses of Valenciennes, Bouchain, Cambray, Maubeuge, Landrecy, Lequesnoy, Avesne, Rocroy, Longwi, Thionville, Bitche, and the têtedu-pont of Fort Louis, as well as of a line along the northern and eastern frontiers, by an army of 150,000 men, under the orders of a general nominated by the allies, and to be subsisted by France.

"His majesty, ardently desirous of hastening, as far as lies in his power, the conclusion of an arrangement, the delay of which has caused to his people so many evils, which he daily deplores, and has prolonged in France, and still prolongs, that internal agitation which has excited the solicitude of the powers; but, still more, animated by a desire to make known his good dispositions to sovereigns his allies, has wished that the undersigned should communicate, without delay, to their excellencies the plenipotentiaries of the four courts, the principles on which he thinks the negociation ought to be prosecuted, relatively to each of the bases proposed, by ordering the undersigned to present the following considerations, on the first of these bases, that respecting territorial cessions,—in which that important object is examined, in the

1

BOOK XVI. twofold relations of justice and utility, which it would be so dangerous to separate.

CHAP. VIII.

1815.

"The want of a common judge, having authority and power to terminate the disputes of sovereigns, leaves, no other course, when they cannot come to an amicable agreement, but that of referring the decision of such disputes to the fate of arms, which constitutes between them the state of war. If, in this state, possessions of the one are occupied by the forces of the other, these possessions are under conquest, by right of which, the occupier acquires the full enjoyment of them during all the time that he occupies them, or, until the re-establishment of peace. He is entitled to demand, as a condition of that re-establishment, that the territory which he occupies should be ceded to him in whole or in part; and the cession, when it has taken place, transforming the enjoyment into property, from a mere occupier of it he becomes the Sovereign. This is a mode of acquisition which the law of nations authorises.

"But the state of war, conquest, and the right of exacting cessions, are things which proceed from and depend upon each other, in such way, that the first is an absolute condition of the second, and the latter of the third; for, out of the state of war, there can be no conquest made: and where conquest has not been made, or no longer exists, the right of demanding territorial cessions cannot exist, since a claim cannot be made to retain that which one has not, or that which he no longer has. "There can be no conquest where there is no state of war, and as you cannot take from him who has nothing, you can only make conquest of what a man possesses; hence it follows, that in order to constitute the possibility of conquest, there must have been war by the occupier on the possessor, that is, on the sovereign; right of possession of a country and sovereignty being things inseparable, or rather identical.

"If, then, you make war in a country, and against a number more or less considerable of the inhabitants of that country, while the sovereign is excepted therefrom, you do not make war on the country, the latter word being merely a trope by which the domain is put for the possessor. A sovereign, however, must be considered as excepted from the war which foreigners carry on in this country, when they acknowledge him, and maintain with him the accustomed relations of peace. The war is then made against men, to the rights of whom he who combats them cannot succeed, because they have no rights, and from whom it is impossible to conquer what does not belong to them. Neither the object nor the effect of such a war can be to make conquests, but to recover. He, however, who recovers that which does not belong to him, cannot recover it but for him whom he acknowledges as the legitimate pos

sessor.

"To entitle you to deem yourself at war with a country, without being so with him who has been previously acknowledged a sovereign, two things must necessarily happen; the one is, that of ceas ing to hold him as such, and to regard the sovereignty as transferred to those whom you fight against, by the very act for which you fight agains them; that is to say, you then recognise, pursue, and sanction those doctrines, which have over thrown so many thrones, shaken them all, and against which all Europe was under the necessity of arming itself: or, you must believe that the sovereignty can be double, while it is essentially one, and incapable of division; it may exist under different forms, be collective or individual, be not each of these at once, in the same country, which cannot have two sovereigns at the same

time.

"The allied powers, however, have neither done nor believed either the one or the other of these two things.

They have considered the enterprise of Bonparte as the greatest crime that could be conmitted by men, and the very attempt of which alone placed him without the law of nations. In h adherents, they viewed only accomplices of that crime, whom it was necessary to combat, to put down, and punish, circumstances which irrefraga bly exclude every supposition that such men could naturally either acquire, or confer, or transmit any right.

"The allied powers have not, for an instant, ceased to recognise his most Christian majesty a King of France, and, consequently, to recognise the rights which belonged to him in that capacity: they have not, for an instant, ceased to be with him in relations of peace and amity, which alone conveyed with it the engagement to respect bis rights; they took upon them this engagement in a formal, though implied manner, in the declaration of the 13th of March, and in the treaty of the 25th. They rendered it more strict, by making the king enter, by his accession to that treaty, into their alliance against the common enemy; for if you cannot make conquests from a friend, you can still less do it from an ally. And, let it not be said, that the king could not be the ally of the powers, but by co-operating with them, and that le did not do so; if the total defection of the army, which, at the time of the treaty of the 25th of March, was already known, and deemed inevita ble, did not permit him to bring regular troops into action, the Frenchmen who, by taking up arms for him to the number of 60 or 70,000, in the departments of the west and the south, thost who shewing themselves disposed to take them up. placed the usurper under the necessity of dividing his forces; and those who, after the defeat of Waterloo, instead of the resources in men and money which he demanded, left him no other but