e creditors were to have an option
of vesting their money in annuities on different plans; and it was
also recommended to open a loan at five per cent, for ten millions of
dollars, payable one half in specie, and the other half in the debt,
irredeemable by any payment exceeding six dollars per annum both of
principal and interest.

By way of experiment, a tontine on principles stated in the report was
also suggested.

The secretary was restrained from proposing to fund the whole debt
immediately at the current rate of interest, by the opinion, "that
although such a provision might not exceed the abilities of the
country, it would require the extension of taxation to a degree, and
to objects which the true interest of the creditors themselves would
forbid. It was therefore to be hoped and expected, that they would
cheerfully concur in such modifications of their claims, on fair and
equitable principles, as would facilitate to the government an
arrangement substantial, durable, and satisfactory to the community.
Exigencies might ere long arise which would call for resources greatly
beyond what was now deemed sufficient for the current service; and
should the faculties of the country be exhausted, or even strained to
provide for the public debt, there could be less reliance on the
sacredness of the provision.

"But while he yielded to the force of these considerations, he did not
lose sight of those fundamental principles of good faith which dictate
that every practicable exertion ought to be made, scrupulously to
fulfil the engagements of government; that no change in the rights of
its creditors ought to be attempted without their voluntary consent;
and that this consent ought to be voluntary in fact, as well as in
name. Consequently, that every proposal of a change ought to be in the
shape of an appeal to their reason and to their interest, not to their
necessities. To this end it was requisite that a fair equivalent
should be offered, for what might be asked to be given up, and
unquestionable security for the remainder." This fair equivalent for
the proposed reduction of interest was, he thought, offered in the
relinquishment of the power to redeem the whole debt at pleasure.

That a free judgment might be exercised by the holders of public
securities in accepting or rejecting the terms offered by the
government, provision was made in the report for paying to
non-subscribing creditors, a dividend of the surplus whi