Birth of the Nation: The First Federal Congress, 1789-1791 | Next Page
Funding the National Debt
Letter of Rep. Goodhue to Michael Hodge
Rep. Benjamin Goodhue of Massachusetts to Michael Hodge,
February 24, 1790
(Courtesy of the Peabody Essex Museum)

By 1790 most of the debt certificates were no longer in the hands of those Americans who had actually loaned money or given services to the United States. Madison believed strongly that justice required that these original creditors should receive something, even if they had sold their certificates for far less than face value. He proposed on February 11 that holders of public securities originally issued to someone else--holders who were often castigated as speculators--receive the highest market value of such securities, and that the balance of the sum due from the public be paid to the original holder. Opponents of this discrimination saw it as an unconstitutional violation of contracts. The motion lost on February 22 by a vote of 36 to 13. The focus of the debate on Hamilton's report then turned to the assumption of state debts. Northern congressmen supported the proposal as strongly as southerners opposed it. In this letter a vocal supporter states his position.

Text transcript of Rep. Goodhue's letter.

Previous Topic
Next Topic
Go to Exhibit Home
First Federal Congress Project
  Previous Page Table of Contents Next Page