"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.