Full text of Funding Act of 1790
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FIRST CONGRESS.
138
Sales o f lands
by Indians, in
what cases va
lid.
Offences com
mitted within
the Indian ter
ritory, how to
be punished.
Proceedings
therein.
A ct o f Sep.
24, 1789.
Continuance
o f this act.
St a t u t e
S ess .
II. Ch. 34.
1790.
with such merchandise in his possession as are usually vended to the
Indians, without a license first had and obtained, as in this act pre
scribed, and being thereof convicted in any court proper to try the
same, shall forfeit all the merchandise so offered for sale to the Indian
tribes, or so found in the Indian country, which forfeiture shall be one
half to the benefit of the person prosecuting, and the other half to the
benefit o f the United States.
S e c . 4. And be it enacted and declared, That no sale of lands made
by any Indians, or any nation or tribe o f Indians within the United
States, shall be valid to any person or persons, or to any state, whether
having the right o f pre-emption to such lands or not, unless the same
shall be made and duly executed at some public treaty, held under the
authority o f the United States.
S e c . 5. And be it further enacted, That if any citizen or inhabitant
o f the United States, or o f either of the territorial districts of the United
States, shall go into any town, settlement or territory belonging to any
nation or tribe of Indians, and shall there commit any crime upon, or
trespass against, the person or property o f any peaceable and friendly
Indian or Indians, which, if committed within the jurisdiction of any
state, or within the jurisdiction o f either o f the said districts, against a
citizen or white inhabitant thereof, would be punishable by the laws of
such state or district, such offender or offenders shall be subject to the
same punishment, and shall be proceeded against in the same manner as
if the offence had been committed within the jurisdiction of the state or
district to which he or they may belong, against a citizen or white in
habitant thereof.
S e c . 6. And be it farther enacted, That for any of the crimes or
offences aforesaid, the like proceedings shall be had for apprehending,
imprisoning or bailing the offender, as the case may be, and for recog
nizing the witnesses for their appearance to testify in the case, and where
the offender shall be committed, or the witnesses shall be in a district other
than that in which the offence is to be tried, for the removal of the offen
der and the witnesses or either o f them, as the case may be, to the dis
trict in which the trial is to be had, as by the act to establish the judicial
courts o f the United States, are directed for any crimes or offences
against the United States.
S e c . 7. And be it further enacted, That this act shall be in force for
the term o f two years, and from thence to the end of the next session
o f Congress, and no longer.
A p p r o v e d , July 22, 1790.
II.
August 4 , 1790.
[Obsolete.]
Recital.
Duties on im
ports and ton
nage appropria
ted to pay inte
rest on the for
eign debt and
future loans,
reserving
C hap.
X X X IV .—An Act making provision fo r the [-payment of the\ Debt of the
United States.{a)
W h e r e a s , justice and the support o f public credit require, that pro
vision should be made for fulfilling the engagements of the United States,
in respect to their foreign debt, and for funding their domestic debt upon
equitable and satisfactory terms:
S e c t i o n 1. Be it enacted by the Senate and House o f Representatives
o f the United States o f America in Congress assembled, That reserv
ing out of the monies which have arisen since the last day of Decem
ber last past, and which shall hereafter arise from the duties on goods,
wares and merchandise imported into the United States, and on the
tonnage o f ships or vessels, the yearly sum o f six hundred thousand
(<i) The acts making provision for the debt o f the United States, contracted during the war o f the revo
lution, have been: Act o f August 4, 1790, chap. 3 4 ; act o f August 10, 1790, chap. 39 ; act o f December
27, 1790, chap. 1 ; act o f August 12, 1790, chap. 4 7 ; act o f May 8, 1792, chap. 38 ; act o f March A
1793, chap. 2 5 ; act o f May 30, 1794, chap. 36; act o f January 28, 1795, chap. 13; act o f February w,
1796, chap. 2 j act o f March 3, 1797, chap. 2 5 ; act o f March 3, 1791, chap. 25.
FIRST CONGRESS.
S ess.
II.
Ch.
34.
1790.
dollars, or so much thereof as may be appropriated from time to time,
towards the support o f the government o f the United States, and their
common defence, the residue o f the said monies, or so much thereof, as
may be necessary, as the same shall be received in each year, next after
the sum reserved as aforesaid, shall be, and is hereby appropriated to
the payment o f the interest which shall from time to time become due
on the loans heretofore made by the United States in foreign countries;
and also to the payment o f interest on such further loans as may be ob
tained for discharging the arrears o f interest thereupon, and the whole
or any part o f the principal thereof; to continue so appropriated until
the said loans, as well those already made as those which may be made
in virtue of this act, shall be fully satisfied, pursuant to the contracts re
lating to the same, any law to the contrary notwithstanding. And pro
vided, That nothing herein contained, shall be construed to annul or
alter any appropriation by law made prior to the passing o f this act.
And as new loans are and will be necessary for the payment o f the
aforesaid arrears o f interest, and the instalments o f the principal o f the
said foreign debt due and growing due, and may also be found expe
dient for effecting an entire alteration in the state o f the same:
S e c . 2. B e it further enacted, That the President o f the United States
be, and he is hereby authorized, to cause to be borrowed on behalf o f
the United States, a sum or sums, not exceeding in the whole twelve
million o f dollars; and that so much o f this sum as may be necessary
to the discharge o f the said arrears and instalments, and (if it can be
effected upon terms advantageous to the United States) to the paying
off the whole o f the said foreign debt, be appropriated solely to those
purposes: And the President is moreover further authorized to cause to
be made such other contracts respecting the said debt as shall be found
for the interest o f the said States. Provided nevertheless, That no en
gagement nor contract shall be entered into which shall preclude the
United States from reimbursing any sum or sums borrowed within fifteen
years after the same shall have been lent or advanced.
And whereas it is desirable to adapt the nature o f the provision to be
made for the domestic debt to the present circumstances of the United
States, as far as it shall be found practicable, consistently with good faith
and the rights o f the creditors; which can only be done by a voluntary
loan on their part:
S e c . 3. B e it therefore further enacted, That a loan to the full
amount of the said domestic debt be, and the same is hereby proposed;
and that books for receiving subscriptions to the said loan be opened at
the treasury o f the United States, and by a commissioner to be ap
pointed in each o f the said states, on the first day o f October next, to
continue open until the last day o f September following, inclusively;
and that the sums which shall be subscribed thereto, be payable in cer
tificates issued for the said debt, according to their specie value, and
computing the interest upon such as bear interest to the last day o f De
cember next, inclusively; which said certificates shall be o f these several
descriptions, to w it:
Those issued by the register o f the treasury.
Those issued by the commissioners o f loans in the several states, in
cluding certificates given pursuant to the act of Congress of the second
o f January, one thousand seven hundred and seventy-nine, for bills of
credit of the several emissions o f the twentieth o f May, one thousand
seven hundred and seventy-seven, and the eleventh o f April, one thou
sand seven hundred and seventy-eight.
Those issued by the commissioners for the adjustment o f the accounts
of the quartermaster, commissary, hospital, clothing, and marine depart
ments.
139
600,000
dol
lars annually for
support o f goveminent.
For payment
o f interest and
instalments o f
foreign debt.
President may
make new loans
and contracts.
Domestic debt
to be loaned to
its full amount,
and subscrip
tions thereto,
how to be made;
in what payable.
140
Subscribers
paying in prin
cipal o f domes
tic debt, what
proportions o f
principal, rate
o f interest and
terms o f pay
ment entitled to.
Subscribers
paying in inter
est o f domestic
debt, what pro
portions o f prin
cipal, rate o f in
terest, and
terms o f pay
ment entitled to.
Commissioner
to be appointed
in each state to
receive sub
scriptions, &c.
FIRST CONGRESS.
S e ss.
II. C h . 34.
1790.
Those issued by the commissioners for the adjustment of accounts in
the respective states.
Those issued by the late and present paymaster-general, or commis
sioner o f army accounts.
Those issued for the payment o f interest, commonly called indents of
interest.
And in the bills o f credit issued by the authority of the United States
in Congress assembled, at the rate of one hundred dollars in the said
bills, for one dollar in specie.
S e c . 4. And be it further enacted, That for the whole or any part of
any sum subscribed to the said loan, by any person or persons, or body
politic, which shall be paid in the principal o f the said domestic debt,
the subscriber or subscribers shall be entitled to a certificate, purporting
that the United States owe to the holder or holders thereof, his, her, or
their assigns, a sum to be expressed therein, equal to two thirds of the
sum so paid, bearing an interest o f six per centum per annum, payable
quarter yearly, and subject to redemption by payments not exceeding in
one year, on account both o f principal and interest, the proportion of
eight dollars upon a hundred o f the sum mentioned in such certificate;
and to another certificate purporting that the United States owe to the
holder or holders thereof, his, her or their assigns, a sum to be expressed
therein, equal to the proportion o f thirty-three dollars and one third of
a dollar upon a hundred o f the sum so paid, which after the year one
thousand eight hundred shall bear an interest o f six per centum per an
num, payable quarter yearly, and subject to redemption by payments not
exceeding in one year, on account both o f principal and interest, the
proportion of eight dollars upon a hundred o f the sum mentioned in
such certificate: Provided, That it shall not be understood that the
United States shall be bound or obliged to redeem in the proportion
aforesaid; but it shall be understood only that they have a right so to do.
S e c . 5. And be it further enacted, That for the whole or any part of
any sum subscribed to the said loan by any person or persons, or body
politic, which shall be paid in the interest o f the said domestic debt,
computed to the said last day o f December next, or in the said certifi
cates issued in payment o f interest, commonly called indents of interest,
the subscriber or subscribers shall be entitled to a certificate purporting
that the United States owe to the holder or holders thereof, his, her or
their assigns, a sum to be specified therein, equal to that by him, her or
them so paid, bearing an interest o f three per centum per annum, paya
ble quarter yearly, and subject to redemption by payment of the sum
specified therein, whenever provision shall be made by law for that pur
pose.
S e c . 6. And be it further enacted, That a commissioner be appointed
for each state, to reside therein, whose duty it shall be to superintend
the subscriptions to the said loan; to open books for the same; to re
ceive the certificates which shall be presented in payment thereof; to
liquidate the specie value o f such o f them as shall not have been before
liquidated; to issue the certificates above mentioned in lieu thereof, ac
cording to the terms of each subscription; to enter in books to be by
him kept for that purpose, credits to the respective subscribers to the
said loan for the sums to which they shall be respectively entitled; to
transfer the said credits upon the said books from time to time as shall
be requisite; to pay the interest thereupon as the same shall become
due, and generally to observe and perform such directions and regula
tions as shall be prescribed to him by the Secretary of the Treasury,
touching the execution o f his office.
S e c . 7. And be it further enacted, That the stock which shall be
created pursuant to this act, shall be transferable only on the books of
FIRST CONGRESS.
S ess.
II. Ch. 34.
1790.
the treasury, or o f the said commissioners respectively, upon which
the credit for the same shall exist at the time o f transfer, by the proprie
tor or proprietors o f such stock, his, her or their attorney: but it shall
be lawful for the Secretary o f the Treasury, by special warrant under
his hand and the seal o f the treasury, countersigned by the comptroller,
and registered by the register, at the request of the respective proprie
tors, to authorize the transfer o f such stock from the books of one com
missioner to those o f another commissioner, or to those o f the treasury,
and from those o f the treasury to those o f a commissioner.
’
S e c . 8 . And be it further enacted, That the interest upon the
said stock, as the same shall become due, shall be payable quarter yearly
— that is to say : One fourth part thereof on the last day of March: one
other fourth part thereof on the last day o f June: one other fourth part
thereof on the last day of September; and the remaining fourth part
thereof on the last day of December in each year, beginning on the last
day of March next ensuing; and payment shall be made wheresoever
the credit for the said stock shall exist at the time such interest shall
become due— that is to say: At the treasury, if the credit for the same
shall then exist on the books o f the treasury, or at the office of the com
missioner upon whose books such credit shall then exist. But if the
interest for one quarter shall not be demanded before the expiration of
a third quarter, the same shall be afterwards demandable only at the
treasury.
And as it may happen that some of the creditors o f the United States
may not think fit to become subscribers to the said loan:
S e c . 9. B e it further enacted, That nothing in this act contained shall
be construed in any wise to alter, abridge or impair the rights o f those
creditors of the United States, who shall not subscribe to the said loan,
or the contracts upon which their respective claims are founded; but
the said contracts and rights shall remain in full force and virtue.
And that such creditors may not be excluded from a participation in
the benefit hereby intended to the creditors of the United States in gene
ral, while the said proposed loan shall be depending, and until it shall
appear from the event thereof what farther or other arrangements may
be necessary respecting the said domestic debt:
S e c . 10. B e it therefore further enacted, That such o f the creditors
of the United States as may not subscribe to the said loan, shall never
theless receive during the year one thousand seven hundred and ninetyone, a rate per centum on the respective amounts o f their respective
demands, including interest to the last day of December next, equal to
the interest payable to subscribing creditors, to be paid at the same
times, at the same places, and by the same persons as is herein before
directed, concerning the interest on the stock which may be created in
virtue of the said proposed loan. But as some o f the certificates now
in circulation have not heretofore been liquidated to specie value, as
most of them are greatly subject to counterfeit, and counterfeits have
actually taken place in numerous instances, and as embarrassment and
imposition might, for these reasons, attend the payment of interest on
those certificates in their present form, it shall therefore be necessary to
entitle the said creditors to the benefit of the said payment, that those
o f them who do not possess certificates issued by the register o f the
treasury, for the registered debt, should produce previous to the first
day of June next, their respective certificates, either at the treasury of
the United States, or to some one o f the commissioners to be appointed
as aforesaid, to the end that the same may be cancelled, and other cer
tificates issued in lieu thereof; which new certificates shall specify the
specie amount o f those in exchange for which they are given, and shall
be otherwise of the like tenor with those heretofore issued by the said
register of the treasury for the said registered debt, and shall be trans
141
Stock created
by this act, how
transferable,
and interest
thereon payable
quarterly.
Non-subscrib
ing creditors,
their rights not
to be impaired,
and
to be paid a rate
per cent, on tho
amount o f their
demands equal
to the interest
allowed to sub
scribing credi
tors.
All certificates
in circulation,
to be cancelled
and new ones
issued.
142
Commissioners
their salaries,
to take an oath
and enter into
bond.
State debts
assumed, to
amount o f
821,500,000
and a loan pro
posed, payable
in certificates o f
the states,
not exceeding a
certain sum in
each.
FIRST CONGRESS.
S e ss .
II. Ch. 34.
1790.
ferable on the like principles with those directed to be issued on account
o f the subscriptions to the loan hereby proposed.
S e c . 11. And be it further enacted, That the commissioners who shall
be appointed pursuant to this act, shall respectively be entitled to the
following yearly salaries, that is to say : The commissioner for the state
o f New Hampshire, six hundred and fifty dollars: The commissioner
for the state o f Massachusetts, fifteen hundred dollars: The commis
sioner for the state o f Rhode Island and Providence Plantations, six
hundred dollars: The commissioner for the state o f Connecticut, one
thousand dollars: The commissioner for the state o f New York, fifteen
hundred dollars: The commissioner for the state o f New Jersey, seven
hundred dollars: The commissioner for the state o f Pennsylvania, fif
teen hundred dollars: The commissioner for the state of Delaware, six
hundred dollars: The commissioner for the state o f Maryland, one thou
sand dollars: The commissioner for the state o f Virginia, fifteen hun
dred dollars: The commissioner for the state o f North Carolina, one
thousand dollars: The commissioner for the state of South Carolina,
one thousand dollars: The commissioner for the state of Georgia, seven
hundred dollars: Which salaries shall be in full compensation for all
services and expenses.
S e c . 12. And be it further enacted, That the said commissioners, be
fore they enter upon the execution o f their several offices, shall respect
ively take an oath or affirmation for the diligent and faithful execution
o f their trust, and shall also become bound with one or more sureties to
the satisfaction o f the Secretary o f the Treasury, in a penalty not less
[than] five thousand, nor more than ten thousand dollars, with condition
for their good behaviour in their said offices respectively.
And whereas a provision for the debts of the respective states by the
United States, would be greatly conducive to an orderly, economical and
effectual arrangement of the public finances:
S e c . 13. He it therefore further enacted, That a loan be proposed to
the amount o f twenty-one million and five hundred thousand dollars,
and that subscriptions to the said loan be received at the same times
and places, and by the same persons, as in respect to the loan herein
befofe proposed concerning the domestic debt of the United States.
And that the sums which shall be subscribed to the said loan, shall be
payable in the principal and interest o f the certificates or notes, which
prior to the first day of January last, were issued by the respective states,
as acknowledgments or evidences o f debts by them respectively owing,
except certificates issued by the commissioners o f army accounts in the
state of North Carolina, in the year one thousand seven hundred and
eighty-six.
Provided, That no greater sum shall be received in the certificates
o f any state than as follows; that is to say:
In those o f New Hampshire, three hundred thousand dollars.
In those o f Massachusetts, four million dollars.
In those o f Rhode Wand and Providence Plantations, two hundred
thousand dollars.
In those o f Connecticut, one million six hundred thousand dollars.
In those o f New York, one million two hundred thousand dollars.
In those o f New Jersey, eight hundred thousand dollars.
In those o f Pennsylvania, two million two hundred thousand dollars.
In those o f Delaware, two hundred thousand dollars.
In those o f Maryland, eight hundred thousand dollars.
In those o f Virginia, three million five hundred thousand dollars.
In those o f North Carolina, two million four hundred thousand dol*
Jars.
In those o f South Carolina, four million dollars.
In those o f Georgia, three hundred thousand dollars.
FIRST CONGRESS.
S e ss .
II.
C h.
34.
1790.
143
And ■provided, That no such certificate shall be received, which from
What eertifithe tenor thereof, or from any public record, act, or document, shall cates shall not
appear or can be ascertained to have been issued for any purpose, other be received.
than compensations and expenditures for services or supplies towards the
prosecution o f the late war, and the defence o f the United States, or o f
some part thereof during the same.
S e c . 14. Provided also, and be it further enacted, That if the total
Subscriptions
amount of the sums which shall be subscribed to the said loan in the exceeding the
sum allowed to
debt of any state, within the time limited for receiving subscriptions any state, what
thereto, shall exceed the sum by this act allowed to be subscribed within proportion shall
such state, the certificates and credits granted to the respective sub be paid.
scribers, shall bear such proportion to the sums by them respectively
subscribed, as the total amount o f the said sums shall bear to the whole
sum so allowed to be subscribed in the debt o f such state within the
same. And every subscriber to the said loan shall, at the time o f sub
scribing, deposit with the commissioner the certificates or notes to be
loaned by him.
Subscribers to
S e c . 15. And he it further enacted, That for two thirds o f any sum sub
said loan, what
scribed to the said loan, by any person or persons, or body politic, which proportion
of
shall be paid in the principal and interest of the certificates or notes principal, rate
issued as aforesaid by the respective states, the subscriber or subscribers o f interest, and
o f pay
shall be entitled to a certificate, purporting that the United States owe terms
ment entitled
to the holder or holders thereof, or his, her or their assigns, a sum to be to.
expressed therein, equal to two thirds o f the aforesaid two thirds, bear
ing an interest o f six per centum per annum, payable quarter yearly,
and subject to redemption by payments, not exceeding in one year, on
account both o f principal and interest, the proportion o f eight dollars
upon a hundred o f the sum mentioned in such certificate; and to an
other certificate, purporting that the United States owe to the holder or
holders thereof, his, her or their assigns, a sum to be expressed therein,
equal to the proportion of thirty-three dollars and one third of a dollar
upon a hundred o f the said two thirds o f such sum so subscribed, which
after the year one thousand eight hundred shall bear an interest o f six
per centum per annum, payable quarter yearly, and subject to redemp
tion by payments, not exceeding in one year, on account both o f prin
cipal and interest, the proportion o f eight dollars upon a hundred of the
sum mentioned in such certificate; and that for the remaining third o f
any sum so subscribed, the subscriber or subscribers shall be entitled to
a certificate, purporting that the United States owe to the holder or
holders thereof, his, her or their assigns, a sum to be expressed therein,
equal to the said remaining third, bearing an interest o f three per cent,
per annum, payable quarter yearly, and subject to redemption by pay
ment of the sum specified therein whenever provision shall be made by
law for that purpose.
Interest, how
S e c . 16. And be it further enacted, That the interest upon the cer
be computed,
tificates which shall be received in payment o f the sums subscribed to to
and payable
wards the said loan, shall be computed to the last day o f the year one quarter yearly.
thousand seven hundred and ninety-one, inclusively; and the interest upon
the stock which shall be created by virtue of the said loan, shall com
mence or begin to accrue on the first day of the year one thousand seven
hundred and ninety-two, and shall be payable quarter yearly, at the same
time, and in like manner as the interest on the stock to be created by
virtue of the loan above proposed in the domestic debt o f the United
States.
Sum allowed
Sec. 17. And be it further enacted. That if the whole sum allowed
to any state,
to be subscribed in the debt or certificates o f any state as aforesaid, not
being sub
shall not be subscribed within the time for that purpose limited, such scribed, the
state shall be entitled to receive, and shall receive from the United States,
an interest per centum per annum, upon so much o f the said sum as
144
state to receive
interest on amount o f defi
ciency.
'State certifi
cates issued in
lieu o f those o f
the U. States,
payment o f in
terest on, sus
pended.
States charge
able with amount o f sub
scriptions.
Farther ap
propriation o f
monies arising
from the reve
nue laws to the
purposes o f this
act;
and faith o f U.
States pledged
to make good
deficiencies.
Proceeds from
sales o f western
lands,
to form a sink
ing fund.
FIRST CONGRESS.
S ess .
II.
Ch.
34.
1790.
shall not have been so subscribed, equal to that which would have ac
crued on the deficiency, had the same been subscribed in trust for the
non-subscribing creditors o f such state, who are holders of certificates
or notes issued on account o f services or supplies towards the prosecu
tion o f the late war, and the defence o f the United States or of some
part thereof, to be paid in like manner as the interest on the stock which
may be created by virtue o f the said loan, and to continue until there
shall be a settlement of accounts between the United States and the in
dividual states; and in case a balance shall then appear in favour of such
state, until provision shall be made for the said balance.
But as certain states have respectively issued their own certificates, in
exchange for those of the United States, whereby it might happen that
interest might be twice payable on the same sums:
S e c . 18. B e it further enacted, That the payment of interest
whether to states or to individuals, in respect to the debt of any state,
by which such exchange shall have been made, shall be suspended, until
it shall appear to the satisfaction o f the secretary of the treasury, that
certificates issued for that purpose by such state, have been re-exchanged
or redeemed, or until those which shall not. have been re-exchanged or
redeemed, shall be surrendered to the United States.
S e c . 19. And be it further enacted, That so much of the debt of
each state as shall be subscribed to the said loan, and the monies (if
any) that shall be advanced to the same pursuant to this act, shall be a
charge against such state, in account with the United States.
S e c . 20. And be it further enacted, That the monies arising under
the revenue laws, which have been or during the present session of Con
gress may be passed, or so much thereof as may be necessary, shall be
and are hereby pledged and appropriated for the payment of the interest
on the stock which shall be created by the loans aforesaid, pursuant to
the provisions o f this act, first paying that which shall arise on the stock
created by virtue o f the said first mentioned loan, to continue so pledged
and appropriated, until the final redemption o f the said stock, any law
to the contrary notwithstanding, subject nevertheless to such reserva
tions and priorities as may be requisite to satisfy the appropriations
heretofore made, and which during the present session of Congress may
be made by law, including the sums herein before reserved and appro
priated : and to the end that the said monies may be inviolably applied
in conformity to this act, and may never be diverted to any other pur
pose, an account shall be kept o f the receipts and disposition thereof,
separate and distinct from the product o f any other duties, imposts,
excises and taxes whatsoever, except such as may be hereafter laid, to
make good any deficiency which may be found in the product thereof
towards satisfying the interest aforesaid.
S e c . 21. And be it further enacted, That the faith of the United States
be, and the same is hereby pledged to provide and appropriate hereafter
such additional and permanent funds as may be requisite towards sup
plying any such deficiency, and making full provision for the payment
o f the interest which shall accrue on the stock to be created by virtue
o f the loans aforesaid, in conformity to the terms thereof respectively,
and according to the tenor of the certificates to be granted for the same
pursuant to this act.
S e c . 22. And be it further enacted, That the proceeds of the sales
which shall be made of lands in the western territory, now belonging,
or that may hereafter belong to the United States, shall be, and are
hereby appropriated towards sinking or discharging the debts, for the
payment whereof the United States now are, or by virtue of this act may
be holden, and shall be applied solely to that use until the said debts
shall be fully satisfied.
A p p r o v e d , August 4 , 1790.
@FedFRASER