The Economic Policies of Alexander Hamilton. Hamilton Alexander

interests of the individuals, and the local interests of districts, it must be perceived that there cannot always be sufficient reliance upon them, and that variances between them will not unfrequently serve rather to distract than to inform the judgment. Greater impartiality and, of course, better information may be expected from an officer who, standing in the same relation to a larger district, composed of several smaller districts, will be more likely to be free from the influence either of personal interests or local predilections, in reference to the parts.

      The Secretary begs leave, with the utmost deference, to say that he considers an arrangement of this kind as of real importance to the public service and to the efficacious discharge of the trust reposed in him.

      All of which is humbly submitted.

      ALEXANDER HAMILTON,

      Secretary of the Treasury.

      ARREARS OF PAY

       Table of Contents

      Hamilton to Washington

      (Cabinet Paper).

      Treasury Department, May 28, 1790.

      The Secretary of the Treasury conceives it to be his duty most respectfully to represent to the President of the United States that there are in his judgment objections of a very serious and weighty nature to the resolutions of the two Houses of Congress of the twenty-first instant, concerning certain arrears of pay, due to the officers and soldiers of the lines of Virginia and North Carolina.

      The third of these resolutions directs that in cases where payment has not been made to the original claimant in person, or to his representative, it shall be made to the original claimant, or to such person or persons only as shall produce a power of attorney duly attested by two justices of the peace of the county in which such person or persons reside, authorizing him or them to receive a certain specified sum.

      By the laws of most if not all the States, claims of this kind are in their nature assignable for a valuable consideration; and the assignor may constitute the assignee his attorney or agent to receive the amount. The import of every such assignment is a contract, express or implied, on the part of the assignor, that the assignee shall receive the sum assigned to his own use. In making it no precise form is necessary, but any instrument competent to conveying with clearness and precision the sense of the parties, suffices; there is no need of the co-operation of any justice of the peace, or other magistrate whatever.

      The practice of the Treasury and of the public officers in other departments, in the adjustment and satisfaction of claims upon the United States, has uniformly corresponded with the rules of that law.

      A regulation, therefore, having a retrospective operation, and prescribing with regard to past transactions new and unknown requisites, by which the admission of claims is to be guided, is an infraction of the rights of individuals, acquired under pre-existing laws, and a contravention of the public faith, pledged by the course of public proceedings. It has consequently a tendency not less unfriendly to public credit than to the security of property.

      Such is the regulation contained in the resolution above referred to. It defeats all previous assignments not accompanied with a power of attorney attested by two justices of the peace of the county where the assignor resides; a formality which, for obvious reasons, cannot be presumed to have attended any of them, and which does not appear to have been observed with respect to those upon which application for payment has hitherto been made.

      It is to be remarked that the assignee has no method of compelling the assignor to perfect the transfer by a new instrument in conformity to the rule prescribed; if even the existence of such a power, the execution of which would involve a legal controversy, could be a satisfactory cause for altering by a new law that state of things which antecedent law and usage had established between the parties.

      It is, perhaps too, questionable whether an assignee, however equitable his pretensions were, could, under the operation of the provision which has been recited, have any remedy whatever for the recovery of the money or value which he may have paid to the assignor.

      It is not certain that a legislative act decreeing payment to a different person, would not be a legal bar; but if the existence of such a remedy were certain, it would be but a very inconclusive consideration. The assignment may have been a security for a precarious or desperate debt, which security will be wrested from the assignee; or it may have been a composition between an insolvent debtor and his creditor, and the only resource of the latter; or the assignor may be absent and incapable either of benefiting by the provision, or of being called to an account. And in every case the assignee would be left to the casualty of the ability of the assignor to repay; to the perplexity, trouble, and expense of a suit at law. In respect to the soldiers, the presumption would be, in the greater number of cases, that the pursuit of redress would be worse than acquiescence in the loss. To vary the risks of parties, to supersede the contracts between them, to turn over a creditor without his consent from one debtor to another, to take away a right to a specific thing, leaving only the chance of a remedy for retribution, are not less positive violations of property than a direct confiscation.

      It appears from the debates in the House of Representatives, and it may be inferred from the nature of the proceeding, that a suggestion of fraud has been the occasion of it. Fraud is certainly a good objection to any contract, and where it is properly ascertained invalidates it. But the power of ascertaining it is the peculiar province of the Judiciary Department. The principles of good government conspire with those of justice to place it there. ’T is there only that such an investigation of the fact can be had as ought to precede a decision. ’T is there only the parties can be heard, and evidence on both sides produced; without which surmise must be substituted to proof, and conjecture to fact.

      This, then, is the dilemma incident to legislative interference. Either the Legislature must erect itself into a court of justice and determine each case upon its own merits, after a full hearing of the allegations and proofs of the parties; or it must proceed upon vague suggestions, loose reports, or at best upon partial and problematical testimony, to condemn, in the gross and in the dark, the fairest and most unexceptionable claims, as well as those which may happen to be fraudulent and exceptionable. The first would be an usurpation of the judiciary authority, the last is at variance with the rules of property, the dictates of equity, and the maxims of good government.

      All admit the truth of these positions as general rules. But, when a departure from it is advocated for any particular purpose, it is usually alleged that there are exceptions to it, that there are certain extraordinary cases in which the public good demands and justifies an extraordinary interposition of the Legislature.

      This doctrine in relation to extraordinary cases is not to be denied; but it is highly important that the nature of those cases should be carefully distinguished.

      It is evident that every such interposition deviating from the usual course of law and justice, and infringing the established rules of property, which ought as far as possible to be held sacred and inviolable, is an overleaping of the ordinary and regular bounds of legislative discretion; and is in the nature of a resort to first principles. Nothing, therefore, but some urgent public necessity, some impending national calamity, something that threatens direct and general mischief to society, for which there is no adequate redress in the established course of things, can, it is presumed, be a sufficient cause for the employment of so extraordinary a remedy. An accommodation to the interests of a small part of the community, in a case of inconsiderable magnitude, on a national scale, cannot, in the judgment of the Secretary, be entitled to that character.

      If partial inconveniences and hardships occasion legislative interferences in private contracts, the intercourses of business become uncertain, the security of property is lessened, the confidence in government destroyed or weakened.

      The Constitution of the United States interdicts the States individually