t the price of a hundred bushels, the
creditor, now that the government was in a condition to redeem its
promise, was not entitled in equity to receive more than the actual
value of the fifty bushels at the time of the purchase. Moreover, it was
contended, there was no injustice in such a settlement of the debt, for
the war had been carried on and brought to a successful end, for the
benefit of the creditor as well as of everybody else. The argument was
analogous in a measure to that used by a certain class of politicians in
our time, who maintained that the bonds of the United States, bought at
a discount for "greenbacks" during the late rebellion, should not be
redeemed in gold when the war was over.

The answer to all this was obvious. The nation must first be just by
paying its debts to those who could present the evidence that they were
its creditors. If, when that was done, it could afford to be generous,
it might, if so disposed, reimburse those who had lost by parting with
the certificates of debt at a discount. The government could not in
honor go behind its own contracts. The Constitution provided that "all
debts and engagements, entered into before the adoption of this
Constitution, shall be as valid against the United States under this
Constitution as under the Confederation." Here was a debt which the
Confederation had contracted, and the federal government had no more
right "to impair the obligation of contracts" for its own benefit than
the separate States had; and that they were expressly forbidden by the
Constitution to do.

Madison listened quietly day after day to the long and earnest debates
upon the subject, and then advanced an entirely new proposition. He
agreed with one party in maintaining the inviolability of contracts. The
Confederacy had incurred a debt to its own citizens which the new
government had agreed to assume. But he also agreed with the other party
that there was a question as to whom that debt was due. Were those who
now held the certificates entitled to the payment of their face value,
dollar for dollar, although the cost to them was only somewhere from
fifteen to fifty cents on the dollar? It was true that the original
contract was transferable, and these present creditors held the evidence
of the transfer. But did that transfer entitle the holder to the full
value without regard to the price paid for it? Was there not in equity a
reserved right in the original holder, who, havi