October 25, 2021 10:00 EDT

The Alexander Hamilton Collection of John E. Herzog

 
  Lot 31
 
Lot 31 - [Hamilton, Alexander] Jefferson, Thomas

31

[Hamilton, Alexander] Jefferson, Thomas
An Act for extending the time for receiving on Loan that part of the Domestic Debt of the United States, which may not be subscribed...

Secretary of State Thomas Jefferson signed Act of Congress regarding Alexander Hamilton's Assumption Plan

(Philadelphia, 1793). One sheet, 14 7/8 x 9 5/8 in. (378 x 244mm). Printed document, signed by Thomas Jefferson, as the first Secretary of State. Creasing from original folds, separation along left side middle fold; left blank margin trimmed. A fine example. Evans 26320. Lot includes an engraved portrait of Jefferson.
A fascinating document, an Act of Congress, signed by Thomas Jefferson as the first Secretary of State, concerning the Assumption Plan, a key facet of Alexander Hamilton's plan to modernize the new nation's finances.
The Assumption Plan called for the new Federal government to absorb and take responsibility for all unpaid debt incurred by individual states during the American Revolution, which at the time was calculated to be over $20 million. Devised by Hamilton, federal debt assumption was a cornerstone of his plan to revitalize the American economy and establish sound credit (see lot 10), and one of the most contentious issues of the young Republic. This document extends the period from March 1793 to June 1794 in which people with monetary claims against the individual states or the Continental Congress could tender their debts to the Federal government in exchange for new securities issued by the Treasury Department. This extension reflects the work of settling state debts after the passage of this plan, which was not completed until 1795. A large majority of this debt originally belonged to Revolutionary War veterans who were given bills of credit (or IOUs) for their service, citizens who provided goods and services for the war effort, and others who purchased bonds through the now-defunct Board of Treasury. Due to the chaotic economic situation after the Revolution by the time Hamilton proposed this plan most of these securities had been sold by their original holders (due to poverty from the depression in the 1780s) to speculators for mere fractions of their original value. This plan would honor only present owners of these securities and the government would redeem them at their original face value, with all accrued interest—this immediately made these securities incredibly valuable.
Democratic-Republicans, led by then Secretary of State Thomas Jefferson, alongside James Madison, of Virginia, were quick to criticize Hamilton's plan on many fronts. They argued it was morally abhorrent and elitist to award speculators who bought these now-valuable securities from honorable veterans, casting these original holders as victims of predatory Northerners. They simultaneously argued that states like Virginia, who had paid off their war debt, should not have to pick up the bill for other states through new federal taxation earmarked to pay down these assumed debts. Hamilton countered his critics by arguing that awarding the original holders was unworkable, as the new nation lacked the bureaucratic capacity to track down the original owners and trace intermediate investors, and that doing so would create what Ron Chernow describes as "an administrative nightmare." Further, honoring the sanctity of financial transactions from retroactive government interference not only secured the confidence in public credit, but also, in his argument, prevented a chaotic scenario of endless arbitration concerning ownership rights of these securities. Chernow observes that Hamilton asserted that debt assumption "would be more efficient, since there would be one overarching scheme for settling debt instead of many small, competing schemes. It also reflected a profound political logic. Hamilton knew that bondholders would feel a stake in preserving any government that owed them money. If the federal government, not the states, owed the money, creditors would shift their main allegiance to the central government," further stating that Hamilton's "funding system was premised upon a simple concept: that the debt had been generated by the Revolution, that all Americans had benefited equally from that revolution, and that they should assume collective responsibility for its debt. If state debts were unequal, so were the sacrifices made during the fighting."
The presentation of this plan to Congress set off some of the most rancorous partisan fighting of the new government, and set the course for the eventual formation of America's first two political parties. By April 1790 the House voted down Hamilton's plan by a vote of 31-29, and for the moment assumption seemed doomed. Seeking a way to move forward, Hamilton sought to compromise with Madison and Jefferson, using the location of the future capital as a bargaining chip. On June 26, 1790 an informal dinner was held at Jefferson's residence, and a compromise was achieved which saw the new capital temporarily placed in Philadelphia (in order to get Pennsylvania's votes) and then permanently settled in the South, along the Potomac River, in exchange for the votes needed to pass the assumption bill. Finally, it was passed by the House on July 26. This was a major victory for Hamilton. Years later Jefferson would come to refer to his assistance in passing the bill as his "deepest regret," and only later come to realize that this plan "created an unshakable foundation for federal power in America."
We can locate one other copy at auction, in 1917. Rare.

Estimate
$12,000 - $18,000
 

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Secretary of State Thomas Jefferson signed Act of Congress regarding Alexander Hamilton's Assumption Plan

(Philadelphia, 1793). One sheet, 14 7/8 x 9 5/8 in. (378 x 244mm). Printed document, signed by Thomas Jefferson, as the first Secretary of State. Creasing from original folds, separation along left side middle fold; left blank margin trimmed. A fine example. Evans 26320. Lot includes an engraved portrait of Jefferson.
A fascinating document, an Act of Congress, signed by Thomas Jefferson as the first Secretary of State, concerning the Assumption Plan, a key facet of Alexander Hamilton's plan to modernize the new nation's finances.
The Assumption Plan called for the new Federal government to absorb and take responsibility for all unpaid debt incurred by individual states during the American Revolution, which at the time was calculated to be over $20 million. Devised by Hamilton, federal debt assumption was a cornerstone of his plan to revitalize the American economy and establish sound credit (see lot 10), and one of the most contentious issues of the young Republic. This document extends the period from March 1793 to June 1794 in which people with monetary claims against the individual states or the Continental Congress could tender their debts to the Federal government in exchange for new securities issued by the Treasury Department. This extension reflects the work of settling state debts after the passage of this plan, which was not completed until 1795. A large majority of this debt originally belonged to Revolutionary War veterans who were given bills of credit (or IOUs) for their service, citizens who provided goods and services for the war effort, and others who purchased bonds through the now-defunct Board of Treasury. Due to the chaotic economic situation after the Revolution by the time Hamilton proposed this plan most of these securities had been sold by their original holders (due to poverty from the depression in the 1780s) to speculators for mere fractions of their original value. This plan would honor only present owners of these securities and the government would redeem them at their original face value, with all accrued interest—this immediately made these securities incredibly valuable.
Democratic-Republicans, led by then Secretary of State Thomas Jefferson, alongside James Madison, of Virginia, were quick to criticize Hamilton's plan on many fronts. They argued it was morally abhorrent and elitist to award speculators who bought these now-valuable securities from honorable veterans, casting these original holders as victims of predatory Northerners. They simultaneously argued that states like Virginia, who had paid off their war debt, should not have to pick up the bill for other states through new federal taxation earmarked to pay down these assumed debts. Hamilton countered his critics by arguing that awarding the original holders was unworkable, as the new nation lacked the bureaucratic capacity to track down the original owners and trace intermediate investors, and that doing so would create what Ron Chernow describes as "an administrative nightmare." Further, honoring the sanctity of financial transactions from retroactive government interference not only secured the confidence in public credit, but also, in his argument, prevented a chaotic scenario of endless arbitration concerning ownership rights of these securities. Chernow observes that Hamilton asserted that debt assumption "would be more efficient, since there would be one overarching scheme for settling debt instead of many small, competing schemes. It also reflected a profound political logic. Hamilton knew that bondholders would feel a stake in preserving any government that owed them money. If the federal government, not the states, owed the money, creditors would shift their main allegiance to the central government," further stating that Hamilton's "funding system was premised upon a simple concept: that the debt had been generated by the Revolution, that all Americans had benefited equally from that revolution, and that they should assume collective responsibility for its debt. If state debts were unequal, so were the sacrifices made during the fighting."
The presentation of this plan to Congress set off some of the most rancorous partisan fighting of the new government, and set the course for the eventual formation of America's first two political parties. By April 1790 the House voted down Hamilton's plan by a vote of 31-29, and for the moment assumption seemed doomed. Seeking a way to move forward, Hamilton sought to compromise with Madison and Jefferson, using the location of the future capital as a bargaining chip. On June 26, 1790 an informal dinner was held at Jefferson's residence, and a compromise was achieved which saw the new capital temporarily placed in Philadelphia (in order to get Pennsylvania's votes) and then permanently settled in the South, along the Potomac River, in exchange for the votes needed to pass the assumption bill. Finally, it was passed by the House on July 26. This was a major victory for Hamilton. Years later Jefferson would come to refer to his assistance in passing the bill as his "deepest regret," and only later come to realize that this plan "created an unshakable foundation for federal power in America."
We can locate one other copy at auction, in 1917. Rare.

  

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All property offered and sold (“property”) through Samuel T. Freeman & Co, (“Freeman’s”) shall be offered and sold on the terms and conditions set forth below which constitutes the complete statement of the terms and conditions on which all property is offered for sale. By bidding at the auction, whether present in person or by agent, by written bid, telephone, internet or other means, the buyer agrees to be bound by these terms and conditions.

1. Unless otherwise indicated, all Property will be offered by Freeman’s as agent for the Consignor.

2. Freeman’s reserves the right to vary the terms of sale and any such variance shall become part of these Conditions of Sale.

3. As a result of the Covid-19 Pandemic, in person inspections of the Property are available by appointment only and therefore, Freeman’s has also made available to the Buyer the opportunity to (a) view the lot online at freemansauction. com and to view the auction’s e-catalogue, (b) submit a request for a condition report either through the online lot listing or by contacting the specialist directly and (c) have a virtual consultation with the specialist. Buyer acknowledges that it has had the right to take advantage of the aforementioned inspections prior to the sale to determine the condition, size, repair or restoration of any Property. Buyer acknowledges that  it had the right to make a full inspection of all Property prior to sale to determine the condition, size, repair or restoration of any Property. Therefore, all property is sold “AS-IS”. Freeman’s is acting solely as an auction broker, and unless otherwise stated, does not own the Property offered for sale and has made no independent investigation of the Property. Freeman’s makes no warranty of title, merchantability or fitness for a particular purpose, or any other warranty or representation regarding the description, genuineness, attribution, provenance or condition to the Property of any kind or nature with respect to the Property.

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7. If the auctioneer determines that any opening or later bid or any advance bid is not commensurate with the value of the Property offered, he may reject the same and withdraw the Property from sale.

8. Upon the fall of the hammer, title to any offered lot or article will immediately pass to the highest bidder as determined in the exclusive discretion of the auctioneer, subject to compliance by the buyer with these Conditions of Sale. Buyer thereupon assumes full risk and responsibility of the property sold, agrees to sign any requested confirmation of purchase, and agrees to pay the full price, plus Buyer’s Premium, therefore or such part, upon such terms as Freeman’s may require.

9. No lot may be removed from Freeman’s premises until the buyer has paid in full the purchase price therefor including Buyer’s Premium or has satisfied such terms that Freeman’s, in its sole discretion, shall require. Subject to the foregoing, all Property shall be paid for and removed by the buyer at his/her expense within ten (10) days of sale and, if not so removed, may be sold by Freeman’s, or sent by Freeman’s to a third-party storage facility, at the sole risk and charge of the buyer(s), and Freeman’s may prohibit the buyer from participating, directly or indirectly, as a bidder or buyer in any future sale or sales. In addition to other remedies available to Freeman’s by law, Freeman’s reserves the right to impose a late charge of 1.5% per month of the total purchase price on any balance remaining ten (10) days after the day of sale. If Property is not removed by the buyer within ten (10) days, a handling charge of 2% of the total purchase price per month from the tenth day after the sale until removal by the buyer shall be payable to Freeman’s by the buyer. Freeman’s will not be responsible for any loss, damage, theft, or otherwise responsible for any goods left in Freeman’s possession after ten (10) days. If the foregoing conditions or any applicable provisions of law are not complied with, in addition to other remedies available to Freeman’s and the Consignor (including without limitation the right to hold the buyer(s) liable for the bid price) Freeman’s, at its option, may either cancel the sale, retaining as liquidated damages all payments made by the buyer(s), or resell the property. In such event, the buyer(s) shall remain liable for any deficiency in the original purchase price and will also be responsible for all costs, including warehousing, the expense of the ultimate sale, and Freeman’s commission at its regular rates together with all related and incidental charges, including legal fees. Payment is a precondition to removal. Payment shall be by cash, certified check or similar bank draft, or any other method approved by Freeman’s. Checks will not be deemed to constitute payment until cleared. Any exceptions must be made upon Freeman’s written approval of credit prior to sale. In addition, a defaulting buyer will be deemed to have granted and assigned to Freeman’s, a continuing security interest of first priority in any property or money of, or owing to such buyer in Freeman’s possession, and Freeman’s may retain and apply such property or money as collateral security for the obligations due to Freeman’s. Freeman’s shall have all of the rights accorded a secured party under the Pennsylvania Uniform Commercial Code.

10. Unless the sale is advertised and announced as “without reserve”, each lot is offered subject to a reserve and Freeman’s may implement such reserves by bidding through its representatives on behalf of the Consignors. In certain instances, the Consignor may pay less than the standard commission rate where Freeman’s or its representative is a successful bidder on behalf of the Consignor. Where the Consignor is indebted to Freeman’s, Freeman’s may have an interest in the offered lots and the proceeds therefrom, other than the broker’s Commissions, and all sales are subject to any such interest.

11. No “buy” bids shall be accepted at any time for any purpose.

12. Any pre-sale bids must be submitted in writing to Freeman’s prior to commencement of the offer of the first lot of any sale. Freeman’s copy of any such bid shall conclusively be deemed to be the sole evidence of same, and while Freeman’s accepts these bids for the convenience of bidders not present at the auction, Freeman’s shall not be responsible for the failure to execute, or, to execute properly, any pre-sale bid.

13. A Buyer’s Premium will be added to the successful bid price and is payable by the buyer as part of the total purchase price. The Buyer’s Premium shall be: 26% on the first $600,000 of the hammer price of each lot, 20% on the portion from $600,001 through $3,000,000 and 12% thereafter.

14. Third-Party Internet Bidding Services (a) Third Party Bidding Platforms. We engage third party online bidding platforms to collect or facilitate auction bids (“Bidding Platforms”), each of which levy a fee for their services, and have their own rules on fees and how to bid and buy online using these Bidding Platforms. Freeman’s has no control over, and assumes no responsibility for, the content, privacy policies, or practices of any Bidding Platforms. Your dealings with Bidding Platforms are solely between you and such Bidding Platforms. We encourage you to be aware of, and to read, the terms and conditions and privacy policy of any Bidding Platforms that you visit. You expressly release Freeman’s from any and all liability arising from your use of any Bidding Platform or other third-party website or service. (b) Waiver. Absentee Bids left with Bidding Platforms are released to Freeman’s when a lot comes up for sale. UNDER NO CIRCUMSTANCES, INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE, WILL WE AND OUR SELLERS BE LIABLE FOR ANY DAMAGES, LOST PROFITS OR ANY SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES THAT RESULT FROM THE USE OF, OR THE INABILITY TO USE, THESE BIDDING PLATFORMS.  

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All purchases made at Freeman’s, therefore, will be subject to the Pennsylvania State and Local sales tax--currently at a combined rate of 8%, which is applied to the hammer price plus buyer’s premium--unless the successful buyer submits the required tax exemption documentation. Those seeking exemption from sales tax must provide a valid certificate to Freeman’s prior to outgoing shipment.

In accordance with Pennsylvania State law, if Freeman’s or the buyer arranges for a lot/s to be shipped outside of Pennsylvania through an independent, third-party shipping company, Freeman’s must collect Pennsylvania sales tax on the lot/s irrespective of the property’s final destination. If the item is first delivered to any hired service provider (e.g. restorer, storage facility, etc.) located in Pennsylvania, Pennsylvania sales tax will still be applicable and invoiced, even if the lot will ultimately be shipped out-of-state.

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17. In no event shall any liability of Freeman’s to the buyer exceed the purchase price actually paid.

18. No claimed modification or amendment of this Agreement on the part of any party shall be deemed extant, enforceable or provable unless it is in writing that has been signed by the parties to this Agreement. No course of dealing and no delay or omission on the part of Freeman’s in exercising any right under this Agreement shall operate as a waiver of such right or any other right and waiver on any one or more occasions shall not be construed as a bar to or waiver of any right or remedy of Freeman’s on any future occasion.

19. These Conditions of Sale and the buyer’s, the Consignor’s and Freeman’s rights under these Conditions of Sale shall be governed by, construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania and Consignor and Buyer agree to the exclusive jurisdiction of the Philadelphia, Pennsylvania Court of Common Pleas and the United States District Court for the Eastern District of Pennsylvania.   

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