US Government Debt Different - Finance Department - University of ...

Jeremy Kreisberg & Kelley O’Mara (Under the Supervision of Professor Howell Jackson)315Appendix C: History of the Public Debt ClausePolitical Backdrop of the14 th AmendmentEconomic Context ofthe Public Debt ClauseLegislative History of thePublic Debt Clause365 366 367 368 369 370 371 372 373 374 375 376Despite the Union victory in the Civil War, theEmancipation Proclamation “unraveled the Three-FifthsCompromise and thus increased the population base thatdetermined the South’s representation.” 365 The purpose ofthe Public Debt Clause “was to prevent the Democrats, oncethey regained political power, from repudiating the Uniondebt.” 366Financial instruments in the 1860’s were risky, the valueof American debt had fallen during the Civil War, and thepossibility remained that the United States would defaulton its debt in the aftermath of the war. 367 The Thirty-NinthCongress, which passed the Fourteenth Amendment, had an“almost religious commitment to hard-money principles.” 368Congress rolled back the wartime maneuvers allowing theissuance of greenbacks, which were not backed by gold orsilver, by a vote of 144-6. 369Senator Ben Wade, whose proposal may have motivatedthe final version of the Public Debt Clause, 370 said of hisproposal that “[i]t puts the debt incurred in the civil war onour part under the guardianship of the Constitution of theUnited States, so that a Congress cannot repudiate it.” 371Senator Wade’s proposal states, in part, “[t]he public debt ofthe United States . . . shall be inviolable.” 372 Others believe 373that the motivation for the Public Debt Clause came fromSenator Jacob Howard’s proposed amendment, 374 whichreplaced “public debt” with “obligations.” Senator Wade“was a key Republican leader during this period . . . and wassoon to be elected President pro tempore of the Senate.” 375Senator Wade’s status as President pro tempore would makehim, “in effect, the Vice-President in waiting.” 376365Abramowicz, supra note 103, at 11-12.366Balkin, supra note 146.367Abramowicz, supra note 103, at 10.368Id. at 11.369Id.370See Balkin, supra note 290.371Congressional Globe, 39th Cong., 1st session 2769 (May 23, 1866), available at http://memory.loc.gov/ammem/amlaw/lwcglink.html.372Id. at 2768.373See Stern, supra note 137.374Senator Howard’s amendment is as follows: “The obligations of the United States, incurredin suppressing insurrection, or in defense of the Union, or for payment of bounties or pensionsincident thereto, shall remain inviolate.” Congressional Globe, supra note 371, at 2938.375Balkin, supra note 146.376Id.