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shall name in their ballots the person voted for as President, and in distinct ballots the person voted for as Vice-President, and they shall make distinct lists of all persons voted for as President, and of all persons voted for as Vice-President, and of the number of votes for each, which lists they shall sign and certify, and transmit sealed to the seat of the government of the United States, directed to the President of the Senate; The President of the Senate shall, in presence of the Senate and House of Representatives, open all the certificates and the votes shall then be counted; The person having the greatest number of votes for President, shall be the President, if such number be a majority of the whole number of Electors appointed; and if no person have such majority, then from the persons having the highest numbers not exceeding three on the list of those voted for as President, the House of Representatives shall choose immediately, by ballot, the President. But in choosing the President, the votes shall be taken by states, the representation from each state having one vote; a quorum for this purpose shall consist of a member or members from two-thirds of the states, and a majority of all the states shall be necessary to a choice. And if the House of Representatives shall not choose a President whenever the right of choice shall devolve upon them, before the fourth day of March next following, then the Vice-President shall act as President, as in the case of the death or other constitutional disability of the President. The person having the greatest number of votes as Vice-President, shall be the Vice-President, if such number be a majority of the whole number of Electors appointed, and if no person have a majority, then from the two highest numbers on the list, the Senate shall choose the Vice-President; a quorum for the purpose shall consist of two-thirds of the whole number of Senators, and a majority of the whole number shall be necessary to a choice. But no person constitutionally ineligible to the office of President shall be eligible to that of Vice-President of the United States.1

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No. 55. Hamilton's First Report on Public Credit

January 9, 1790

AUGUST 28, 1789, a memorial of certain public creditors of Pennsylvania was presented in the House, "praying the aid and interposition of Congress on behalf of the public creditors, by a permanent appropriation of adequate funds for the punctual payment of the interest of the public debt, or by the adoption of such other means as, in the wisdom of Congress, shall be best calculated to promote the public welfare, and render justice to the individuals who are interested." The memorial was referred to a committee, of which Madison was chairman, which reported on the 10th in favor of deferring action until the next session. On the 21st, after consideration of the report, it was resolved "that this House consider an adequate provision for the support of the public credit, as a matter of high importance to the national honor and prosperity," and "that the Secretary of the Treasury be directed to prepare a plan for that purpose, and to report the same to this House at its next meeting." January 14, 1790, the report on public credit, extracts from which follow, was sent in. The report was taken up Feb. 8, and considered in Committee of the Whole House until March 29, when eight resolutions, agreed to in committee, were reported. The first three resolutions, recommending payment of the foreign debt, together with principal and interest of the domestic debt, were agreed to; the fourth, in favor of the assumption of the State debts, was, by a vote of 29 to 27, recommitted; and the remaining resolutions were laid on the table. On the 30th, the last four resolutions were also recommitted. Consideration of the report in Committee of the Whole House was resumed, and April 26, by a vote of 32 to 18, the committee was discharged "for the present" from further consideration of so much of the report as related to assumption. The opposition to assumption which had by this time developed, strengthened by the arrival of members from North Carolina, bid fair to defeat the scheme. In the meantime, the plan for the location of the national capital had met with difficulty, owing to the rival interests of Pennsylvania and Virginia. Hamilton made use of Jefferson's influence to arrange a compromise, by which, in return for votes in favor of assumption, the capital was to be located at Philadelphia for ten years, and thereafter permanently on the Potomac. Acts of Aug. 4, 10, and 12, 1790, provided for the settlement of the public debt and for increased duties on imports, substantially as suggested by Hamilton.

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REFERENCES. Text in Amer. State Papers, Finance, I., 15-25. For the proceedings of the House, see the Journal, 1st Cong., 1st and 2d Sess.; for the discussions, see the Annals of Congress, or Benton's Abridgment, I. The memorial presented Aug. 28 is in the Annals; for resolutions and memorials against the act of Aug. 4, 1790, see Amer. State Papers, Finance, I., 76–81, 90, 91. A contemporary view of the funding system is in Carey's Amer.

Museum, VI., 91-98. On Hamilton's financial policy in general, see Lodge's Hamilton, chaps. 5, 6. See also Hamilton's Works (ed. 1851), V., 454–459 ; Jefferson's Works (ed. 1854), IX., 91-96; Madison's Writings (ed. 1865), I., 490-496, 501, 507-522.

TREASURY DEPARTMENT,

January 9, 1790.

The Secretary of the Treasury, in obedience to the resolution of the House of Representatives of the twenty-first day of September last, has, during the recess of Congress, applied himself to the consideration of a proper plan for the support of the public credit, with all the attention which was due to the authority of the House, and to the magnitude of the object. . .

In the opinion of the Secretary, the wisdom of the House, in giving their explicit sanction to the proposition which has been stated, cannot but be applauded by all who will seriously consider and trace, through their obvious consequences, these plain and undeniable truths:

That exigencies are to be expected to occur, in the affairs of nations, in which there will be a necessity for borrowing;

That loans in times of public danger, especially from foreign war, are found an indispensable resource, even to the wealthiest of them;

And that, in a country which, like this, is possessed of little active wealth, or, in other words, little moneyed capital, the necessity for that resource must, in such emergencies, be proportionably urgent.

And as, on the one hand, the necessity for borrowing, in particular emergencies, cannot be doubted; so, on the other, it is equally evident, that, to be able to borrow upon good terms, it is essential that the credit of a nation should be well established. . . .

If the maintenance of public credit, then, be truly so important, the next inquiry which suggests itself is, By what means it is to be effected? The ready answer to which question is, by good faith: by a punctual performance of contracts. States, like individuals, who observe their engagements, are respected and trusted, while the reverse is the fate of those who pursue an opposite conduct. . .

...

While the observance of that good faith, which is the basis of

public credit, is recommended by the strongest inducements of political expediency, it is enforced by considerations of still greater authority. There are arguments for it which rest on the immutable principles of moral obligation..

This reflection derives additional strength from the nature of the debt of the United States. It was the price of liberty. The faith of America has been repeatedly pledged for it, and with solemnities that give peculiar force to the obligation. There is, indeed, reason to regret that it has not hitherto been kept; that the necessities of the war, conspiring with inexperience, in the subjects of finance, produced direct infractions; and that the subsequent period has been a continued scene of negative violation, or non-compliance. But a diminution of this regret arises from the reflection, that the last seven years have exhibited an earnest and uniform effort, on the part of the Government of the Union, to retrieve the national credit, by doing justice to the creditors of the nation; and that the embarrassments of a defective constitution, which defeated this laudable effort, have ceased.

From this evidence of a favorable disposition given by the former Government, the institution of a new one, clothed with powers competent to calling forth the resources of the community, has excited correspondent expectations. A general belief accordingly prevails, that the credit of the United States will quickly be established on the firm foundation of an effectual provision for the existing debt. The influence which this has had at home, is witnessed by the rapid increase that has taken place in the market value of the public securities. From January to November, they rose thirty-three and a third per cent.; and from that period to this time, they have risen fifty per cent. more; and the intelligence from abroad announces effects proportionably favorable to our national credit and consequence.

The advantage to the public creditors, from the increased value of that part of their property which constitutes the public debt, needs no explanation.

But there is a consequence of this, less obvious, though not less true, in which every other citizen is interested. It is a well known fact, that, in countries in which the national debt is properly funded, and an object of established confidence, it answers most of the purposes of money. Transfers of stock or public debt, are

there equivalent to payments in specie; or, in other words, stock, in the principal transactions of business, passes current as specie. The same thing would, in all probability, happen here under the like circumstances.

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It ought not, however, to be expected, that the advantages described as likely to result from funding the public debt, would be instantaneous. It might require some time to bring the value of stock to its natural level, and to attach to it that fixed confidence, which is necessary to its quality as money. Yet the late rapid rise of the public securities encourages an expectation that the progress of stock, to the desirable point, will be much more expeditious than could have been foreseen. And as, in the mean time, it will be increasing in value, there is room to conclude that it will, from the outset, answer many of the purposes in contemplation. Particularly, it seems to be probable, that from creditors, who are not themselves necessitous, it will early meet with a ready reception in payment of debts, at its current price.

Having now taken a concise view of the inducements to a proper provision for the public debt, the next inquiry which presents itself is, What ought to be the nature of such a provision? This requires some preliminary discussions.

It is agreed on all hands, that that part of the debt which has been contracted abroad, and is denominated the foreign debt, ought to be provided for according to the precise terms of the contracts relating to it. The discussions which can arise, therefore, will have reference essentially to the domestic part of it, or to that which has been contracted at home. It is to be regretted that there is not the same unanimity of sentiment on this part as on the other.

The Secretary has too much deference for the opinions of every part of the community, not to have observed one, which has more than once made its appearance in the public prints, and which is occasionally to be met with in conversation. It involves this question: Whether a discrimination ought not to be made between original holders of the public securities, and present possessors, by purchase? Those who advocate a discrimination, are for making a full provision for the securities of the former at their nominal value; but contend that the latter ought to receive no more than the cost to them, and the interest. And the idea is

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