After displaying, with strength and perspicuity, the justice and the policy of an adequate provision for the public debt, he proceeded to discuss the principles on which it should be made.
"It was agreed," he said, "by all, that the foreign debt should be provided for according to the precise terms of the contract.

It was to be regretted that, with respect to the domestic debt, the same unanimity of sentiment did not prevail." The first point on which the public appeared to be divided, involved the question, "whether a discrimination ought not to be made between original holders of the public securities, and present possessors by purchase." After reviewing the arguments generally urged in its support, the secretary declared himself against this discrimination.
He deemed it "equally unjust and impolitic; highly injurious even to the original holders of public securities, and ruinous to public credit." To the arguments with which he enforced these opinions, he added the authority of the government of the union.

From the circular address of congress to the states, of the 26th of April, 1783, accompanying their revenue system of the 18th of the same month, passages were selected indicating unequivocally, that in the view of that body the original creditors, and those who had become so by assignment, had equal claims upon the nation.
After reasoning at great length against a discrimination between the different creditors of the union, the secretary proceeded to examine whether a difference ought to be permitted to remain between them and the creditors of individual states.
Both descriptions of debt were contracted for the same objects, and were in the main the same.

Indeed, a great part of the particular debts of the states had arisen from assumptions by them on account of the union; and it was most equitable that there should be the same measure of retribution for all.

There were many reasons, some of which were stated, for believing this would not be the case, unless the state debts should be assumed by the nation.
In addition to the injustice of favouring one class of creditors more than another which was equally meritorious, many arguments were urged in support of the policy of distributing to all with an equal hand from the same source.
After an elaborate discussion of these and some other points connected with the subject, the secretary proposed that a loan should be opened to the full amount of the debt, as well of the particular states, as of the union.
The terms to be offered were,-- First.