range of its vision. The principles of action that it embodied, however,
were few and simple, chief among them being exact and punctual fulfillment
of contract. "States, like individuals, who observe their engagements, are
respected and trusted; while the reverse is the fate of those who pursue
an opposite conduct." To discharge the principal of the public debt was of
course impracticable; nor was it desirable, as the creditors would be well
pleased to leave it at interest. Incidentally the funding of the debt
would provide securities that would serve trade as a species of currency,
and would set in motion a long train of benefits that would extend
throughout the community. In the funding operation the debts contracted by
the States should be included. As to this Hamilton remarked: "The general
principle of it seems to be equitable, for it seems difficult to conceive
a good reason why the expenses for the particular defense of a part in a
common war should not be a common charge, as well as those incurred
professedly for the general defense. The defense of each part is that of
the whole; and unless the expenditures are brought into a common mass, the
tendency must be to add to the calamities suffered by being the most
exposed to the ravages of war and increase of burthens."

Hamilton computed the amount of the foreign debt, principal and arrears,
at $11,710,378.62; the domestic debt, including that of the States, at
$42,414,085.94,--a total of over fifty-four millions with an annual
interest charge at existing rates amounting to $4,587,444.81,--a
staggering total for a nation whose revenue was then insufficient to meet
its current expenses. Nevertheless Hamilton refused to admit that "such a
provision would exceed the abilities of the country," but he was "clearly
of the opinion that to make it would require the extension of taxation to
a degree and to objects which the true interest of the public creditor
forbids." He therefore favored a composition, in arranging which there
would be strict adherence to the principle "that no change in the rights