Томас Джефферсон
The Writings of Thomas Jefferson, Vol. 3 (of 9)
Sec. 53. III. It is made an objection to the proceedings of our legislative and judiciary bodies, that they have refused to allow interest to run on debts during the course of the war. The decision of the right to this rests with the judiciary alone, neither the Legislative nor the Executive having any authority to intermeddle.
The administration of justice is a branch of the sovereignty over a country, and belongs exclusively to the nation inhabiting it. No foreign power can pretend to participate in their jurisdiction, or that their citizens received there are not subject to it. When a cause has been adjudged according to the rules and forms of the country, its justice ought to be presumed. Even error in the highest court which has been provided as the last means of correcting the errors of others, and whose decrees are, therefore, subject to no further revisal, is one of those inconveniences flowing from the imperfection of our faculties, to which every society must submit; because there must be somewhere a last resort, wherein contestations may end. Multiply bodies of revisal as you please, their number must still be finite, and they must finish in the hands of fallible men as judges. If the error be evident, palpable, 16et in re minime dubiâ, it then, indeed, assumes another form; it excites presumption that it was not mere error, but premeditated wrong; and the foreigner, as well as native, suffering by the wrong, may reasonably complain, as for a wrong committed in any other way. In such case, there being no redress in the ordinary forms of the country, a foreign prince may listen to complaint from his subjects injured by the adjudication, may inquire into its principles to prove their criminality, and, according to the magnitude of the wrong, take his measures of redress by reprisal, or by a refusal of right on his part. If the denial of interest, in our case, be justified by law, or even if it be against law, but not in that gross, evident, and palpable degree, which proves it to flow from the wickedness of the heart, and not error of the head in the judges, then is it no cause for just complaint, much less for a refusal of right, or self-redress in any other way. The reasons on which the denial of interest is grounded shall be stated summarily, yet sufficiently to justify the integrity of the judge, and even to produce a presumption that they might be extended to that of his science also, were that material to the present object.
Sec. 54. The treaty is the text of the law in the present case, and its words are, that there shall be no lawful impediment to the recovery of bona fide debts. Nothing is said of interest on these debts; and the sole question is, whether, where a debt is given, interest thereon flows from the general principles of the law? Interest is not a part of the debt, but something added to the debt by way of damage for the detention of it. This is the definition of the English lawyers themselves, who say, "Interest is recovered by way of damages ratione detentionis debiti."17 2 Salk. 622, 623. Formerly, all interest was considered as unlawful, in every country of Europe; it is still so in Roman Catholic countries, and countries little commercial. From this, as a general rule, a few special cases are excepted. In France, particularly, the exceptions are those of minors, marriage portions, and money, the price of lands. So thoroughly do their laws condemn the allowance of interest, that a party who has paid it voluntarily, may recover it back again whenever he pleases. Yet this has never been taken up as a gross and flagrant denial of justice, authorizing national complaint against those governments. In England, also, all interest was against law, till the stat. 37 H. 8, c. 9. The growing spirit of commerce, no longer restrained by the principles of the Roman church, then first began to tolerate it. The same causes produced the same effect in Holland, and, perhaps, in some other commercial and Catholic countries. But, even in England, the allowance of interest is not given by express law, but rests on the discretion of judges and juries, as the arbiters of damages. Sometimes the judge has enlarged the interest to 20 per cent. per annum. [1 Chanc. Rep. 57.] In other cases, he fixes it, habitually, one per cent. lower than the legal rate, [2 T. Atk. 343,] and in a multitude of cases he refuses it altogether. As, for instance, no interest is allowed—
1. On arrears of rents, profits, or annuities. 1 Chan. Rep. 184, 2 P. W. 163. Ca. temp. Talbot 2.
2. For maintenance. Vin. Abr. Interest. c. 10.
3. For moneys advanced by executors. 2 Abr. Eq. 531, 15.
4. For goods sold and delivered. 3. Wilson, 206.
5. On book debts, open accounts, or simple contracts. 3 Ch. Rep. 64. Freem. Ch. Rep. 133. Dougl. 376.
6. For money lent without a note. 2 Stra. 910.
7. On an inland bill of exchange, if no protest is taken. 2 Stra. 910.
8. On a bond after 20 years. 2 Vern. 458, or after a tender.
9. On decrees in certain cases. Freem. Ch. Rep. 181.
10. On judgments in certain cases, as battery and slander. Freem. Ch. Rep. 37.
11. On any decrees or judgments in certain courts, as the exchequer chamber. Douglass, 752.
12. On costs. 2 Abr. Eq. 530, 7.
And we may add, once for all, that there is no instrument or title to debt, so formal and sacred, as to give a right to interest on it, under all possible circumstances—the words of Lord Mansfield, Dougl. 753, where he says: "That the question was, what was to be the rule for assessing the damage, and that, in this case, the interest ought to be the measure of the damage, the action being for a debt, but that, in a case of another sort, the rule might be different:" his words, Dougl. 376, "That interest might be payable in cases of delay, if a jury, in their discretion, shall think fit to allow it." And the doctrine in Giles v. Hart. 2 Salk. 622, that damages, or interest, are but an accessary to the debt, which may be barred by circumstances, which do not touch the debt itself, suffice to prove that interest is not a part of the debt, neither comprehended in the thing, nor in the term; that words, which pass the debt, do not give interest necessarily; that the interest depends altogether on the discretion of the judges and jurors, who will govern themselves by all existing circumstances, will take the legal interest for the measure of their damages, or more or less, as they think right; will give it from the date of the contract, or from a year after, or deny it altogether, according as the fault or the sufferings of the one or the other party shall dictate. Our laws are, generally, an adoption of yours, and I do not know that any of the States have changed them in this particular. But there is one rule of your and our law, which, while it proves that every title of debt is liable to a disallowance of interest under special circumstances, is so applicable to our case, that I shall cite it as a text, and apply it to the circumstances of our case. It is laid down in Vin. Abr. Interest. c. 7, and 2 Abr. Eq. 5293, and elsewhere, in these words: "Where, by a general and national calamity, nothing is made out of lands which are assigned for payment of interest, it ought not to run on during the time of such calamity." This is exactly the case in question. Can a more general national calamity be conceived, than that universal devastation which took place in many of these States during war? Was it ever more exactly the case anywhere, that nothing was made out of the lands which were to pay the interest? The produce of those lands, for want of the opportunity of exporting it safely, was down to almost nothing in real money, e. g. tobacco was less than a dollar the hundred weight. Imported articles of clothing for consumption were from four to eight times their usual price. A bushel of salt was usually sold for 100 lbs. of tobacco. At the same time, these lands, and other property, in which the money of the British creditor was vested, were paying high taxes for their own protection, and the debtor, as nominal holder, stood ultimate insurer of their value to the creditor, who was the real proprietor, because they were bought with his money. And who will estimate the value of this insurance, or say what would have been the forfeit, in a contrary event of the war? Who will say that the risk of the property was not worth the interest of its price? General calamity, then, prevented profit and, consequently, stopped interest, which is in lieu of profit. The creditor says, indeed, he has laid out of his money; he has therefore lost the use of it. The debtor replies, that, if the creditor has lost, he has not gained it; that this may be a question between two parties, both of whom have lost. In that case, the courts will not double the loss of the one, to save all loss from the other. That it is a rule of natural as well as municipal law, that in questions "de damno evitando melior est conditio possidentis." If this maxim be just, where each party is equally innocent, how much more so, where the loss has been produced by the act of the creditor? For, a nation, as a society, forms a moral person, and every member of it is personally responsible for his society. It was the act of the lender, or of his nation, which annihilated the profits of the money lent; he cannot then demand profits which he either prevented from coming into existence, or burnt, or otherwise destroyed, after they were produced. If, then, there be no instrument, or title of debt so formal and sacred as to give right to interest under all possible circumstances, and if circumstances of exemption, stronger than in the present case, cannot possibly be found, then no instrument or title of debt, however formal or sacred, can give right to interest under the circumstances of our case. Let us present the question in another point of view. Your own law forbade the payment of interest, when it forbade the receipt of American produce into Great Britain, and made that produce fair prize on its way from the debtor to the creditor, or to any other, for his use of reimbursement. All personal access between creditor and debtor was made illegal; and the debtor, who endeavored to make a remitment of his debt, or interest, must have done it three times, to answer its getting once to hand; for two out of three vessels were generally taken by the creditor nation, and, sometimes, by the creditor himself, as many of them turned their trading vessels into privateers. Where no place has been agreed on for the payment of a debt, the laws of England oblige the debtor to seek his creditor wheresoever he is to be found within the realm—Coke Lit. 210, b. but do not bind him to go out of the realm in search of him. This is our law too. The first act, generally, of the creditors and their agents here, was, to withdraw from the United States with their books and papers. The creditor thus withdrawing from his debtor, so as to render payment impossible, either of the principal or interest, makes it like the common case of a tender and refusal of money, after which, interest stops, both by your laws and ours. We see, too, from the letter of Mr. Adams, June 16, 1786, No. 57, that the British Secretary for Foreign Affairs was sensible that a British statute, having rendered criminal all intercourse between the debtor and creditor, had placed the article of interest on a different footing from the principal. And the letter of our plenipotentiaries to Mr. Hartley, the British plenipotentiary, for forming the definitive treaty, No. 58, shows, that the omission to express interest in the treaty, was not merely an oversight of the parties; that its allowance was considered by our plenipotentiaries as a thing not to be intended in the treaty, was declared against by Congress, and that declaration communicated to Mr. Hartley. After such an explanation, the omission is a proof of acquiescence, and an intention not to claim it. It appears, then, that the debt and interest on that debt are separate things in every country, and under separate rules. That, in every country, a debt is recoverable, while, in most countries, interest is refused in all cases; in others, given or refused, diminished or augmented, at the discretion of the judge; nowhere given in all cases indiscriminately, and consequently nowhere so incorporated with the debt as to pass with that, ex vi termini, or otherwise to be considered as a determinate and vestat thing.
While the taking interest on money has thus been considered, in some countries, as morally wrong in all cases, in others made legally right but in particular cases, the taking profits from lands, or rents in lieu of profits, has been allowed everywhere, and at all times, both in morality and law. Hence it is laid down as a general rule, Wolf, s. 229, "Si quis fundum alienum possidet, domini est quantum valet usas fundi, et possessoris quantum valet ejus cultura et cura."18 But even in the case of lands restored by a treaty, the arrears of profits or rents are never restored, unless they be particularly stipulated. "Si res vi pacis restituendæ, restituendi quoque sunt fructus a die concessionis,"19 say Wolf, s. 1224; and Grotius, "cui pace res conceditur, ei et fructus conceduntur à tempore concessionis: NON RETRO."20 l. 3. c. 20. s. 22. To place the right to interest on money on a level with the right to profits on land, is placing it more advantageously than has been hitherto authorized; and if, as we have seen, a stipulation to restore lands does not include a stipulation to restore the back profits, we may certainly conclude, à fortiori, that the restitution of debts does not include an allowance of back interest on them.
These reasons, and others like these, have probably operated on the different courts to produce decisions, that "no interest should run during the time this general and national calamity lasted;" and they seem sufficient at least to rescue their decisions from that flagrant denial of right, which can alone authorize one nation to come forward with complaints against the judiciary proceedings of another.
Sec. 55. The States have been uniform in the allowance of interest before and since the war, but not of that claimed during the war. Thus we know by [E. 1.] the case of Neate's executors v. Sands, in New York, and Mildred v. Dorsey, in Maryland, that in those States interest during the war is disallowed by the courts. By [D. 8.] 1784, May, the act relating to debts due to persons who have been, and remained within the enemy's power or lines during the late war. That Connecticut left it to their Court of Chancery to determine the matter according to the rules of equity, or to leave it to referees; by [E. 2.] the case of Osborn v. Mifflin's executors, and [E. 3.] Hare v. Allen, explained in the letter of Mr. Rawle, attorney of the United States, No. 59. And by the letter of Mr. Lewis, judge of the district court of the United States, No. 60, that in Pennsylvania the rule is, that where neither the creditor nor any agent was within the State, no interest was allowed; where either remained, they gave interest. In all the other States, I believe it is left discretionary in the courts and juries. In Massachusetts the practice has varied. In November, 1784, they instruct their Delegates in Congress to ask the determination of Congress, whether they understood the word "debts" in the treaty as including interest? and whether it is their opinion, that interest during the war should be paid? and at the same time they pass [D. 9.] the act directing the courts to suspend rendering judgment for any interest that might have accrued between April 19, 1775, and January 20, 1783. But in 1787, when there was a general compliance enacted through all the United States, in order to see if that would produce a counter compliance, their Legislature passed the act repealing all laws repugnant to the treaty, No. 33, and their courts, on their part, changed their rule relative to interest during the war, which they have uniformly allowed since that time. The Circuit Court of the United States, at their sessions at –, in 1790, determined in like manner that interest should be allowed during the war. So that, on the whole, we see that, in one State interest during the war is given in every case; in another it is given wherever the creditor, or any agent for him, remained in the country, so as to be accessible; in the others, it is left to the courts and juries to decide according to their discretion and the circumstances of the case.
TO RECAPITULATE
Sec. 56. I have, by way of preliminary, placed out of the present discussion all acts and proceedings prior to the treaty of peace, considering them as settled by that instrument, and that the then state of things was adopted by the parties, with such alterations only as that instrument provided.
I have then taken up the subsequent acts and proceedings, of which you complain as infractions, distributing them according to their subjects, to wit:
I. Exile and confiscations.
II. Debts.
III. Interest.
I. Exile and confiscations.
After premising, that these are lawful acts of war, I have shown that the 5th article was recommendatory only, its stipulations being, not to restore the confiscations and exiles, but to recommend to the State Legislatures to restore them:
That this word, having but one meaning, establishes the intent of the parties; and moreover, that it was particularly explained by the American negotiators, that the Legislatures would be free to comply with the recommendation or not, and probably would not comply:
That the British negotiators so understood it:
That the British ministry so understood it:
And the members of both Houses of Parliament, as well those who approved, as who disapproved the article.
I have shown, that Congress did recommend, earnestly and bona fide:
That the States refused or complied, in a greater or less degree, according to circumstances, but more of them, and in a greater degree than was expected:
And that compensation, by the British treasury, to British sufferers, was the alternative of her own choice, our negotiators having offered to do that, if she would compensate such losses as we had sustained by acts authorized by the modern and moderate principles of war.
II. Before entering on the subject of debts, it was necessary—
1st. To review the British infractions, and refer them to their exact dates.
To show that the carrying away of the negroes preceded the 6th of May, 1783.
That instead of evacuating the upper posts with all convenient speed, no order had been received for the evacuation, August 13, 1783.
None had been received May 10, 1784.
None had been received July 13, 1784.
From whence I conclude none had ever been given,
And thence, that none had ever been intended.
In the latter case, this infraction would date from the signature of the treaty. But founding it on the not giving the order with convenient speed, it dates from April, 1783, when the order for evacuating New York was given, as there can be no reason why it should have been inconvenient to give this order as early.
The infraction, then, respecting the upper posts, was before the treaty was known in America.
That respecting the negroes, was as soon as it was known.
I have observed that these infractions were highly injurious.
The first, by depriving us of our fur trade, profitable in itself, and valuable as a means of remittance for paying the debts; by intercepting our friendly and neighborly intercourse with the Indian nations, and consequently keeping us in constant, expensive, and barbarous war with them.
The second, by withdrawing the cultivators of the soil, the produce of which was to pay the debts.
2d. After fixing the date of the British infractions, I have shown,
That, as they preceded, so they produced the acts on our part complained of, as obstacles to the recovery of the debts.
That when one party breaks any stipulation of a treaty, the other is free to break it also, either in the whole, or in equivalent parts, at its pleasure.
That Congress having made no elections,
Four of the States assumed, separately, to modify the recovery of debts—
1. By indulging their citizens with longer and more practicable times of payment.
2. By liberating their bodies from execution, on their delivering property to the creditor, to the full amount of his demand, on a fair appraisement, as practised always under the elegit.
3. By admitting, during the first moments of the non-existence of coin among us, a discharge of executions by payment in paper money.
The first of these acts of retaliation, was in December, 1783, nine months after the infractions committed by the other party.
And all of them were so moderate, of so short duration, the result of such necessities, and so produced, that we might, with confidence, have referred them, alterius principis, quo boni viri, arbitrio.
3. That induced, at length, by assurances from the British court, that they would concur in a fulfilment of the treaty,
Congress, in 1787, declared to the States its will, that even the appearance of obstacle, raised by their acts, should no longer continue;
And required a formal repeal of every act of that nature; and to avoid question, required it as well from those who had not, as from those who had passed such acts; which was complied with so fully, that no such laws remained in any State of the Union, except one;
And even that one could not have forborne, if any symptoms of compliance from the opposite party had rendered a reiterated requisition from Congress important.
4. That, indeed, the requiring such a repeal, was only to take away pretext:
For, that it was at all times perfectly understood, that treaties controlled the laws of the States—
The confederation having made them obligatory on the whole:
Congress having so declared and demonstrated them:
The Legislatures and Executives of most of the States having admitted it:
And the Judiciaries, both of the separate and General Governments, so deciding.
That the courts are open everywhere upon this principle:
That the British creditors have, for some time, been in the habit and course of recovering their debts at law:
That the class of separate and unsettled debts contracted before the war, forms now but a small proportion of the original amount:
That the integrity and independence of the courts of justice in the United States, are liable to no reproach:
Nor have popular tumults furnished any ground for suggesting, that either courts or creditors are overawed by them in their proceedings.
III. Proceeding to the article of interest, I have observed:
That the decision, whether it shall or shall not be allowed during the war, rests, by our constitution, with the courts altogether.
That if these have generally decided against the allowance, the reasons of their decisions appear so weighty, as to clear them from the charge of that palpable degree of wrong, which may authorize national complaint, or give a right of refusing execution of the treaty, by way of reprisal.
To vindicate them, I have stated shortly, some of the reasons which support their opinion.
That interest during the war, was not expressly given by the treaty:
That the revival of debts did not, ex vi termini, give interest on them:
That interest is not a part of the debt, but damages for the detention of the debt:
That it is disallowed habitually in most countries;
Yet has never been deemed a ground of national complaint against them:
That in England also, it was formerly unlawful in all cases:
That at this day it is denied there, in such a variety of instances, as to protect from it a great part of the transactions of life:
That, in fact, there is not a single title to debt, so formal and sacred, as to give a right to interest, under all possible circumstances, either there or here:
That of these circumstances, judges and jurors are to decide, in their discretion, and are accordingly in the habit of augmenting, diminishing, or refusing interest, in every case, according to their discretion:
That the circumstances against the allowance, are unquestionably of the strongest in our case:
That a great national calamity rendering the lands unproductive, which were to pay the interest, has been adjudged a sufficient cause of itself, to suspend interest:
That, were both plaintiff and defendant equally innocent of that cause,
The question, who should avoid loss? would be in favor of the party in possession:
And, à fortiori, in his favor, where the calamity was produced by the act of the demandant.
That, moreover, the laws of the party creditor had cut off the personal access of his debtor,
And the transportation of his produce or money to the country of the creditor, or to any other for him:
And where the creditor prevents payment both of principal and interest, the latter, at least, is justly extinguished.
That the departure of the creditor, leaving no agent in the country of the debtor, would have stopped interest of itself,
The debtor not being obliged to go out of the country to seek him.
That the British minister was heretofore sensible of the weight of the objections to the claim of interest:
That the declarations of Congress and our plenipotentiaries, previous to the definitive treaty, and the silence of that instrument, afford proof that interest was not intended on our part, nor insisted on, on the other:
That, were we to admit interest on money, to equal favor with profits on land, arrears of profits would not be demandable in the present case, nor consequently arrears of interest:
And, on the whole, without undertaking to say what the law is, which is not the province of the Executive,
We say, that the reasons of those judges, who deny interest during the war, appear sufficiently cogent—
To account for their opinion on honest principles:
To exempt it from the charge of palpable and flagrant wrong, in re minime dubiâ:
And to take away all pretence of withholding execution of the treaty, by way of reprisal for that cause.
Sec. 57. I have now, sir, gone through the several acts and proceedings enumerated in your appendix, as infractions of the treaty, omitting, I believe, not a single one, as may be seen by a table hereto subjoined, wherein every one of them, as marked and numbered in your appendix, is referred to the section of this letter in which it is brought into view; and the result has been, as you have seen—
1. That there was no absolute stipulation to restore antecedent confiscations, and that none subsequent took place:
2. That the recovery of the debts was obstructed validly in none of our States, invalidly only in a few, and that not till long after the infractions committed on the other side; and
3. That the decisions of courts and juries against the claims of interest are too probably founded to give cause for questioning their integrity. These things being evident, I cannot but flatter myself, after the assurances received from you of his Britannic Majesty's desire to remove every occasion of misunderstanding from between us, that an end will now be put to the disquieting situation of the two countries, by as complete execution of the treaty as circumstances render practicable at this late day: that it is to be done so late has been the source of heavy losses, of blood and treasure, to the United States. Still our desire of friendly accommodation is, and has been, constant. No "lawful impediment has been opposed to the prosecution of the just rights of your citizens." And if any instances of unlawful impediment have existed in any of the inferior tribunals, they would, like other unlawful proceedings, have been overruled on appeal to the higher courts. If not overruled there, a complaint to the Government would have been regular, and their interference probably effectual. If your citizens would not prosecute their rights, it was impossible they should recover them, or be denied recovery; and till a denial of right through all the tribunals, there is no ground for complaint; much less for a refusal to comply with solemn stipulations, the execution of which is too important to us ever to be dispensed with. These difficulties being removed from between the two nations, I am persuaded the interests of both will be found in the strictest friendship. The considerations which lead to it are too numerous and forcible to fail of their effect; and that they may be permitted to have their full effect, no one wishes more sincerely than he, who has the honor to be, &c.21
