[Congressional Record Volume 141, Number 41 (Monday, March 6, 1995)]
[Senate]
[Pages S3495-S3498]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE BALANCED BUDGET AMENDMENT--A HISTORICAL PERSPECTIVE
Mr. BYRD. Mr. President, on Tuesday last, February 28, 1995, the
Senate was supposed to vote on the final disposition of the
constitutional amendment to balance the budget. It may be of interest
to my colleagues to know that exactly 200 hundred years ago, on
February 28, 1795, the Senate was meeting at Congress Hall in
Philadelphia, then the nation's capital. Our information is incomplete
about the details of that day's session because, as was its practice at
that time, the Senate met behind closed doors and kept only the
briefest of minutes as required by the Constitution. What we do know,
based on news accounts derived from members who were willing to talk to
local journalists, is that Senators were most concerned that day about
paying the government's debts and raising further income to meet
growing expenses.
The Senate debated and approved, by a vote of 21-1, ``An act making
further provision for the support of Public Credit, and for the
Redemption of the Public Debt.'' The Senate rejected four proposed
amendments, including an amendment offered by Senator Aaron Burr to
require repayment, during a 12-20-year period, of the principal on a
subscription loan to fund the foreign debt. As ultimately enacted, the
bill required that ``the principal of the said loan may be reimbursed
at any time, at the pleasure of the United States.'' This suggested the
Senate's majority recognized that the government might not be in a
position to repay its loans within Burr's 12-20-year period. Lenders to
the government would have to be satisfied with repayment at some
indefinite time in the future.
Related to this concern about managing for government expenditures,
the Senate also approved committee amendments to a bill to require the
Comptroller of the Treasury to order the submission of accounts and
vouchers by all individuals who had received public funds, and to file
suit against individuals who had failed to comply, and ordered that the
bill pass to a third reading.
Concerned with revenue sources, the Senate also received from the
House and referred to a committee a bill that would impose duties on
snuff and refined sugar.
Mr. President, I ask unanimous consent that the proceedings of
February 28, 1795, as shown in the ``Annals of Congress,'' along with
the ``Act for the Support of Public Credit and for the Redemption of
the Public Debt,'' which was passed on March 3, 1795, be printed in the
Record.
There being no objection, the historical material was ordered to be
printed in the Record, as follows:
[From the ``Annals of Congress''--Senate Proceedings, February 28,
1795]
Saturday, February 28.
* * * * *
On motion, to insert the following section after the 5th,
to wit:
``Be it further enacted, That a Loan be opened at the
Treasury to the full amount of the outstanding and unbarred
new emission bills of credit, the sums which shall be
subscribed to be payable in the principal and interest of
such bills, computing the interest thereon to the first day
of January next, and that the subscriber or subscribers shall
be entitled to receive therefor a certificate for the amount
of the principal sum so subscribed and paid, bearing an
interest of five per centum per annum from the first day of
January next, payable quarter yearly at the Treasury, and
redeemable at the pleasure of the United States, by the
payment of the sum specified therein, and containing a
stipulation that the United States will redeem the same
before the expiration of thirty years from the passing of
this act, and also to another certificate for the amount of
the interest on the sum so subscribed, computing the same to
the first of January next, bearing an interest of three per
centum per annum from the first day of January next, payable
quarter yearly at the Treasury, and redeemable at the
pleasure of the United States, by the payment of the sum
specified therein:''
It passed in the negative.
On motion, by Mr. Burr, to add the following proviso to the
11th section, to wit:
``Provided, nevertheless, That, whenever the six per cent.
stock shall be under par, it shall be the duty of the
Commissioners of the Sinking Fund to lay out, in the purchase
of the said stock, the money applicable to the payment of the
said two per cent. of principal, or so much thereof as can be
laid out in the purchase thereof, at a rate under par:''
It passed in the negative.
On motion, by Mr. Burr, to expunge the last section of the
bill, to wit:
``Sec. 20. And be it further enacted, That so much of the
act laying duties upon carriages for the conveyance of
persons, and of the act laying duties on licenses for selling
wines and foreign distilled spirituous liquors by retail, and
of the act laying certain duties upon snuff and refined
sugar, and of the act laying duties on property sold at
auction, as limits the duration of the said several acts, be,
and the same are hereby, repealed; and that all the said
several acts be, and the same are hereby, continued in force
until the first day of March, one thousand eight hundred and
one:''
It passed in the negative.
On the question, Shall this bill pass as amended? it was
determined in the affirmative--Yeas 21, nays 1, as follows:
Yeas.--Messrs. Bradford, Bradley, Brown, Burr, Cabot,
Ellsworth, Foster, Frelinghuysen, Gunn, Hawkins, Izard, King,
Langdon, Livermore, Martin, Mitchell, Robinson, Ross,
Rutherfurd, Strong, and Vining.
Mr. Jackson voted in the negative,
Resolved, That this bill pass with the amendment.
A message from the House of Representatives informed the
Senate that the House have passed a bill, entitled ``An act
to alter and amend the act entitled `An act laying certain
duties upon
snuff and refined sugar;'' in which they desire the
concurrence of the Senate.
The Senate resumed the second reading of the bill, send
from the House of Representatives for concurrence, entitled,
``An act for the more effectual recovery of debts due from
individuals to the United States;'' and having agreed to
sundry amendments reported by the committee,
Ordered, That this bill pass to the third reading, as
amended.
[[Page S3496]] Mr. Frelinghuysen, from the committee to
whom was recommitted the bill, sent from the House of
Representatives for concurrence, entitled ``An act for
continuing and regulating the Military Establishment of the
United States, and for repealing sundry acts heretofore
passed on that subject,'' reported further amendments, which
were considered and agreed to, and the bill amended
accordingly.
Ordered, That this bill pass to the third reading.
The bill, sent from the House of Representatives for
concurrence, entitled ``An act to alter and amend the act
entitled `An act laying certain duties upon snuff and refined
sugar,'' was read the first time, and, by unanimous consent,
the rule was dispensed with, and the bill was read the second
time, and referred to Messrs. Cabot, Ellsworth, and Izard, to
consider and report thereon to the Senate.
____
An Act for the Support of Public Credit, and for the Redemption of the
Public Debt, March 3, 1795
Be it enacted, &c., That it shall be lawful for the
Commissioners of the Sinking Fund, and they are hereby
empowered, with the approbation of the President of the
United States, to borrow, or cause to be borrowed, from time
to time, such sums, in anticipation of the revenue
appropriated, not exceeding, in one year, one million of
dollars, to be reimbursed within a year from the time of each
loan, as may be necessary for the payment
of the interest which shall annually accrue on the public
debt; and for the payment of the interest on any such
temporary loan, which shall not exceed six per centum per
annum, so much of the proceeds of the duties on goods,
wares, and merchandise imported, on the tonnage of ships
or vessels, and upon spirits distilled within the United
States, and stills, as may be necessary, shall be, and are
hereby, appropriated.
Sec. 2. And be it further enacted, That a loan be opened at
the Treasury to the full amount of the present foreign debt,
to continue open until the last day of December, in the year
one thousand seven hundred and ninety-six, and that the sums
which may be subscribed to the said loan shall be payable and
receivable, by way of exchange, in equal sums of the
principal of the said foreign debt; and that any sum so
subscribed and paid shall bear an interest equal to the rate
of interest, which is now payable on the principal of such
part of the foreign debt as shall be paid or exchanged
therefor, together with an addition of one-half per centum
per annum; the said interest to commence on the first day of
January next succeeding the time of each subscription, and to
be paid quarterly, at the same periods at which interest is
now payable and paid upon the domestic funded debt: Provided,
That the principal of the said loan may be reimbursed at any
time, at the pleasure of the United States.
Sec. 3. And be it further enacted, That credits to the
respective subscribers for the sums by them respectively
subscribed to the said loan, shall be entered and given on
the books of the Treasury in like manner as for the present
domestic funded debt; and that certificates therefor, of a
tenor conformable with the provisions of this act, signed by
the Register of the Treasury, shall issue to the several
subscribers, and that the said credits, or stock standing in
the names of the said subscribers, respectively, shall be
transferable, in like manner, and by the like ways and means,
as are provided by the seventh section of the act aforesaid,
entitled ``An act making provision for the debt of the United
States,'' touching the credits or stock therein mentioned;
and that the interest to be paid upon the stock which shall
be constituted by virtue of the said loan shall be paid at
the offices or places where the credits for the same shall
from time to time stand or be, subject to the like conditions
and restrictions as are prescribed in and by the eighth
section of the act last aforesaid.
Sec. 4. And be it further enacted, That the interest and
principal of all loans authorized by this act shall be made
payable at the Treasury of the United States only, so far as
relates to the payment of the principal and interest of the
domestic debt.
Sec. 5. And be it further enacted, That so much of the
duties on goods, wares, and merchandise imported, on the
tonnage of ships or vessels, and upon spirits distilled
within the United States, and stills, heretofore appropriated
for the interest of the foreign debt, as may be liberated or
set free, by subscriptions to the said loan, together with
such further sums of the proceeds of the said duties as may
be necessary, shall be, and they are hereby, pledged and
appropriated, for the payment
of the interest which shall be payable upon the sums
subscribed to the said loan, and shall continue so pledged
and appropriated until the principal of the said loan
shall be fully reimbursed and redeemed: Provided, always,
That nothing herein contained shall be construed to alter,
change, or in any manner affect the provisions heretofore
made concerning the said foreign debt, according to
contract, either during the pendency of the said loan or
after the closing thereof; but every thing shall proceed,
touching the said debt, and every part thereof, in the
same manner as if this act had never been passed, except
as to such holders thereof as may subscribe to the said
loan, and from the time of the commencement thereof in
each case, that is, when interest on any sum subscribed
shall begin to accrue.
Sec. 6. And be it further enacted, That the several and
respective duties laid and contained in and by the act,
entitled ``An act laying additional duties on goods, wares,
and merchandise imported into the United States,'' passed the
seventh day of June, one thousand seven hundred and ninety-
four, shall, together with the other duties heretofore
charged with the payment of interest on the public debt,
continue to be levied, collected, and paid, until the whole
of the capital or principal of the present debt of the United
States, and future loans which may be made pursuant to law,
for the exchange, reimbursement, or redemption thereof, or of
any part thereof, shall be reimbursed or redeemed, and shall
be, and hereby are, pledged and appropriated for the payment
of interest upon the said debt and loans, until the same
shall be so reimbursed or redeemed.
Sec. 7. And be it further enacted, That the reservation
made by the fourth section of the aforesaid act, entitled
``An act making provision for the reduction of the public
debt,'' be annulled, and, in lieu thereof, that so much of
the duties on goods, wares, and merchandise imported, on the
tonnage of ships or vessels, and upon spirits distilled
within the United States, and stills, as may be necessary,
be, and the same hereby are, substituted, pledged, and
appropriated for satisfying the purpose of the said
reservation.
Sec. 8. And be it further enacted, That the following
appropriations, in addition to those heretofore made be made,
to the fund constituted by the seventh section of the act,
entitled ``An act supplementary to the act making provision
for the debt of the United States,'' passed the eighth day of
May, one thousand seven hundred and ninety-two, to be
hereafter denominated ``The Sinking Fund,'' to wit: First. So
much of the proceeds of the duties on goods, wares, and
merchandise imported, on the tonnage of ships or vessels, and
on spirits distilled within the United States, and stills,
as, together with the moneys which now constitute the said
fund, and shall accrue to it, by virtue of the provisions
hereinbefore made, and by the interest upon each installment,
or part of principal which shall be reimbursed, will be
sufficient, yearly and every year, commencing the first day
of January next, to reimburse and pay so much as may
rightfully be reimbursed and paid, of the principal of that
part of the debt or stock which, on the said first day of
January next, shall bear an interest of six per centum per
annum, redeemable
by payments on account both of principal and interest, not
exceeding, in one year, eight per centum, excluding that
which shall stand to the credit of the Commissioners of
the Sinking Fund, and that which shall stand to the credit
of certain States, in consequence of the balances reported
in their favor by the Commissioners for settling accounts
between the United States and individual States: Secondly.
The dividends which shall be from time to time declared on
so much of the stock of the Bank of the United States as
belongs to the United States, (deducting thereout such
sums as will be requisite to pay interest on any part
remaining unpaid of the loan of two million of dollars had
of the Bank of the United States, pursuant to the eleventh
section of the act by which the said Bank is
incorporated:) Thirdly. So much of the duties on goods,
wares, and merchandise imported, on the tonnage of ships
or vessels, and on spirits distilled within the United
States, and stills, as, with the said dividends, after
such deduction, will be sufficient, yearly and every year,
to pay the remaining instalments of the principal of the
said loan as they shall become due, and as, together with
any moneys which, by virtue of provisions in former acts,
and herein-before made, shall, on the first day of
January, in the year one thousand eight hundred and two,
belong to the said Sinking Fund, not otherwise specially
appropriated; and with the interest on each instalment, or
part of principal, which shall from time to time be
reimbursed or paid of that part of the debt or stock,
which, on the first day of January, in the year one
thousand eight hundred and one, shall begin to bear an
interest of six per centum per annum, will be sufficient,
yearly and every year, commencing on the first day of
January, in the year one thousand eight hundred and two,
to reimburse and pay so much as may rightfully be
reimbursed and paid of the said principal of the said debt
or stock which shall so begin to bear an interest of six
per centum per annum, on the said first day of January, in
the year one thousand eight hundred and one, excluding
that which shall stand to the credit of the Commissioners
of the Sinking Fund and that which shall stand to the
credit of certain States, as aforesaid: Fourthly. The net
proceeds of the sales of lands belonging, or which shall
hereafter belong to the United States, in the Western
Territory thereof: Fifthly. All moneys which shall be
received into the Treasury on account of debts due to the
United States by reason of any matter prior to their
present Constitution: And, lastly, All surplusses of the
revenues of the United States which shall remain, at the
end of any calendar year, beyond the amount of the
appropriations charged upon the said revenues, and which,
during the session of Congress next thereafter, shall not
be otherwise specially appropriated or reserved by law.
Sec. 9. And be it further enacted, That as well the moneys
which shall accrue to the said Sinking Fund, by virtue of the
provisions of this act, as those which shall have
[[Page S3497]] accrued to the same by virtue of the
provisions of any former act or acts, shall be under the
direction and management of the Commissioners of the Sinking
Fund, or the officers designated in and by the second section
of the act, entitled ``An act making provision for
the reduction of the Public Debt,'' passed the twelfth day
of August, one thousand seven hundred and ninety, and
their successors in office; and shall be and continue
appropriated to the said fund until the whole of the
present debt of the United States, foreign and domestic,
funded and unfunded, including future loans, which may be
made for reimbursing or redeeming any instalments or parts
of principal of the said debt, shall be reimbursed and
redeemed; and shall be, and are hereby declared to be,
vested in the said Commissioners, in trust, to be applied
according to the provisions of the aforesaid act of the
eighth day of May, in the year one thousand seven hundred
and ninety-two, and of this act, to the reimbursement and
redemption of the said debt, including the loans
aforesaid, until the same shall be fully reimbursed and
redeemed. And the faith of the United States is hereby
pledged that the moneys or funds aforesaid shall
inviolably remain and be appropriated and vested, as
aforesaid, to be applied to the said reimbursement and
redemption, in manner aforesaid, until the same shall be
fully and completely effected.
Sec. 10. And be it further enacted, That all reimbursements
of the capital or principal of the Public Debt, foreign and
domestic, shall be made under the superintendence of the
Commissioners of the Sinking Fund, who are hereby empowered
and required, if necessary, with the approbation of the
President of the United States, as any instalments or parts
of the said capital or principal become due, to borrow, on
the credit of the United States, the sums requisite for the
payment of the said instalments or parts of principle:
Provided, That any loan which may be made to the said
Commissioners shall be liable to reimbursement at the
pleasure of the United States; and that the rate of interest
thereupon shall not exceed six per centum per annum; and, for
greater caution, it is hereby declared that it shall be
deemed a good execution of the said power to borrow, for the
said Commissioners, with the approbation of the President, to
cause to be constituted certificates of stock, signed by the
Register of the Treasury, for the sums to be respectively
borrowed, bearing an interest of six per centum per annum,
and redeemable at the pleasure of the United States; and to
cause the said certificates of stock to be sold in the market
of the United States, or elsewhere: Provided, That no such
stock be sold under par. And for the payment of interest on
any sum or sums which may be so borrowed, either by direct
loans or by the sale of certificates of stock, the interest
on the sum or sums which shall be reimbursed by the proceeds
thereof, (except that upon the funded stock, bearing and to
bear an interest of six per centum, redeemable by payments,
not exceeding in one year eight per centum on account both of
principal and interest,) and so much of the duties on goods,
wares, and merchandise imported, on the tonnage of ships or
vessels, and upon spirits distilled within the United States,
and upon stills, as may be necessary, shall be, and hereby
are, pledged and appropriated.
Sec. 11. And be it further enacted, That it shall be the
duty of the Commissioners of the Sinking Fund to cause to be
applied and paid, out of the said fund, yearly and every
year, at the Treasury of the United States, the several and
respective sums following, to wit: First--Such sum and sums
as, according to the right for that purpose
reserved, may rightfully be paid for, and towards the
reimbursement or redemption of such Debt or stock of the
United States, as, on the first day of January next, shall
bear an interest of six per centum per annum, redeemable
by payments, not exceeding in one year eight per centum,
on account both of principal and interest, excluding that
standing to the credit of the Commissioners of the Sinking
Fund, and that standing to the credit of certain States,
as aforesaid, commencing the said reimbursement or
redemption on the said first day of January next.
Secondly--Such sum and sums as, according to the
conditions of the aforesaid Loan, had of the Bank of the
United States, shall be henceforth payable towards the
reimbursement thereof, as the same shall respectively
accrue. Thirdly--Such sum and sums, as according to the
right for that purpose reserved, may rightfully be paid
for and towards the reimbursement or redemption of such
Debt or stock of the United States as, on the first day of
January, in the year one thousand eight hundred and one,
shall begin to bear an interest of six per centum per
annum, redeemable by payments, not exceeding in one year
eight per centum, on account both of principal and
interest, excluding that standing to the credit of the
Commissioners of the Sinking Fund, and that standing to
the credit of certain States, as aforesaid, commencing the
said reimbursement or redemption, on the first day of
January, in the year one thousand eight hundred and two;
and also to cause to be applied all such surplus of the
said fund as may at any time exist, after satisfying the
purposes aforesaid, towards the further and final
redemption of the present Debt of the United States,
foreign and domestic, funded and unfunded, including loans
for the reimbursement thereof, by payment or purchase,
until the said Debt shall be completely reimbursed or
redeemed.
Sec. 12. Provided always, and be it further enacted, That
nothing in this act shall be construed to vest in the
Commissioners of the Sinking Fund a right to pay, in the
purchase or discharge of the unfunded Domestic Debt of the
United States, a higher rate than the market price or value
of the Funded Debt of the United States: And, provided also,
That if, after all the debts and loans aforesaid, now due,
and that shall arise under this act, excepting the said Debt
or stock bearing an interest of three per cent., shall be
fully paid and discharged, any part of the principal of the
said Debt or stock bearing an interest of three per cent., as
aforesaid, shall be unredeemed, the Government shall have
liberty, if they think proper, to make other and different
appropriations of the said funds.
Sec. 13. And be it further enacted, That all priorities
heretofore established in the appropriations by law, for the
interest on the Debt of the United States, as between the
different parts of the said Debt, shall, after the year one
thousand seven hundred and ninety-six, cease, with regard to
all creditors of the United States who do not, before the
expiration of the said period, signify, in writing, to the
Comptroller of the Treasury, their dissent therefrom; and
that thenceforth, with the
exception only of the debts of such creditors who shall so
signify their dissent, the funds or revenues charged with
the said appropriations shall, together, constitute a
common or consolidated fund, chargeable indiscriminately,
and without priority, with the payment of the said
interest.
Sec. 14. And be it further enacted, That all certificates,
commonly called Loan Office certificates, final settlements,
and indents of interest, which, at the time of passing this
act, shall be outstanding, shall on or before the first day
of January, in the year one thousand seven hundred and
ninety-seven, be presented at the office of the Auditor of
the Treasury of the United States, for the purpose of being
exchanged for other certificates of equivalent value and
tenor, or, at the option of the holders thereof,
respectively, to be registered at the said office, and
returned; in which case it shall be the duty of the said
Auditor to cause some durable mark or marks to be set on each
certificate, which shall ascertain and fix its identity, and
whether genuine, or counterfeit, or forged; and every of the
said certificates which shall not be presented at the said
office within the said time, shall be forever after barred or
precluded from settlement of allowance.
Sec. 15. And be it further enacted, That if any transfer of
stock standing to the credit of a State shall be made
pursuant to the act, entitled ``An act authorizing the
transfer of the stock standing to the credit of certain
States,'' passed the second day of January, in this present
year, after the last day of December next, the same shall be
upon condition, that it shall be lawful to reimburse, at a
subsequent period of reimbursement, so much of the principal
of the stock so transferred as will make the reimbursement
thereof equal in proportion and degree to that of the same
stock transferred previous to the said day.
Sec. 16. And be it further enacted, That, in regard to any
sum which shall have remained unexpended upon any
appropriation other than for the payment of interest on the
Funded Debt; for the payment of interest upon, and
reimbursement, according to contract, of any loan or loans
made on account of the United States, for the purposes of the
Sinking Fund, or for a purpose in respect to which a longer
duration is specially assigned by law, for more than two
years after the expiration of the calendar year in which the
act of appropriation shall have been passed, such
appropriation shall be deemed to have ceased and been
determined; and the sum so unexpended shall be carried to an
account on the books of the Treasury, to be denominated ``The
Surplus Fund.'' But no appropriation shall be deemed to have
so ceased and been determined until after the year one
thousand seven hundred and ninety-five, unless it shall
appear to the Secretary of the Treasury, that the object
thereof hath been fully satisfied; in which case it shall be
lawful for him to cause to be carried the unexpended residue
thereof to the said account of ``the Surplus Fund.''
Sec. 17. And be it further enacted, That the Department of
the Treasury, according to the respective duties of the
several officers thereof, shall
establish such forms and rules of proceeding for and
touching the execution of this act as shall be conformable
with the provisions thereof.
Sec. 18. And be it further enacted, That all the
restrictions and regulations heretofore established by law
for regulating the execution of the duties enjoined upon the
Commissioners of the Sinking Fund shall apply to and be in as
full force for the execution of the analogous duties enjoined
by this act as if they were herein particularly repeated and
re-enacted: and a particular account of all sales of stock,
or of loans by them made, shall be laid before Congress
within fourteen days after their meeting next after the
making of any such loan or sale of stock.
Sec. 19. And be it further enacted, That in every case in
which power is given by this act to make a loan, it shall be
lawful for such loan to be made of the Bank of the United
States, although the same may exceed the sum of fifty
thousand dollars.
Sec. 20. And be it further enacted, That so much of the act
laying duties upon carriages for the conveyance of persons,
and of the act laying duties on licenses for selling wines
[[Page S3498]] and foreign distilled spirituous liquors by
retail, and of the act laying certain duties upon snuff and
refined sugar, and of the act laying duties on property sold
at auction, as limits the duration of the said several acts,
be, and the same is hereby repealed; and that all the said
several acts be, and the same are hereby, continued in force
until the first day of March, one thousand eight hundred and
one.
Approved, March 3, 1795.
____________________