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When Republicans Supported U.S. Debt Unconditionally

Memo Pad National News

When Republicans Supported U.S. Debt Unconditionally


Oct. 11 (Bloomberg) — From the moment it was introduced in Congress in 1866, the 14th Amendment has inspired intense political and judicial controversy. Most has centered on the first section, which declares that any person born in the U.S. is a citizen and prohibits states from depriving such citizens of life, liberty, property or the equal protection of the laws. The second and third sections — a complicated formula related to determining states’ representation in Congress, and political disabilities imposed on former leaders of the Confederacy — have fallen into abeyance.

Until recently, the fourth section, which mandates that the “validity of the public debt of the United States … shall not be questioned,” while prohibiting payment of the debt incurred by the Confederacy, has attracted little attention (except from Southerners who over the years have hoped to be repaid for the money their ancestors patriotically lent to the secessionist government). With the threat that the U.S. may be unable to pay bondholders if Congress fails to raise the legal debt limit, Section 4 is suddenly in the news.

The 14th Amendment had two essential purposes: to deal with an immediate political deadlock between Congress and President Andrew Johnson and to place in the Constitution Northern Republicans’ understanding of the meaning of victory in the Civil War. Johnson, who succeeded to the presidency after Lincoln’s assassination, was inflexible, deeply racist and out of touch with public opinion in the North. He opposed every action by Congress that sought to protect the basic rights of the newly freed slaves. He may have been the worst president in American history.

But more than simply resolving a political impasse, the 14th Amendment sought to place the results of the Civil War — emancipation, Confederate defeat and the consolidation of national authority — beyond the reach of shifting congressional majorities. Inevitably, the still-bitter Democrats would one day come back into power. Laws could be repealed; a constitutional amendment would be permanent. The fourth section was meant to protect against a future repudiation of the national debt.

Both sides in the Civil War relied on a combination of levying taxes, issuing paper money and borrowing to finance the war. The federal government sold more than $2 billion worth of bonds, some marketed to ordinary Northerners but most to wealthy individuals and, especially, banks. Indeed, the 1864 law that established a new system of national banks required them to purchase large amounts of these bonds if they wanted a federal charter.

While the conflict raged, some Democrats denounced the debt as the product of an unjust war and called for its repudiation. After the Union victory, no one explicitly advocated repudiating the bonds; the debate was over how they should be paid off. During the war, the Union government issued the first national currency: paper “greenbacks.” Their value deteriorated as time went on, but they were legal tender and could be used to purchase federal bonds. To make the bonds attractive to investors, interest was paid in gold and exempted from taxation. But some of the bonds didn’t specify how the principal would be paid when the loan became due: in depreciated paper money or in gold. Naturally, banks insisted on the latter.


  1. charleo1 October 11, 2013

    It seems to me this is an issue it would behoove the Nation to settle once and for all.
    And since it is all but impossible for political reasons, for Congress on it’s own, to do away with this extra-and outside, the Constitution procedure. I believe the Supreme Court should be petitioned to make a final ruling on the matter. To either one, ban
    it outright. Or, provide clarity on the 14th Amendment’s intention. As it states, the
    debts of The United States, that would seem to be those debts incurred in carrying
    out such laws, or directives, as duly passed by Congress, in the usual order. Then,
    those debts shall not be questioned. The Country desperately needs a finding by
    the Court to determine, if this final line was a way of addressing a specific issue of
    that day. Or, was it indeed intended to insure a broader protection of the financial
    well being of the Republic? Recognizing the security of the Nation could just as
    easily be compromised by the failure, or the prevention of the Country’s ability to
    deal with it’s fiscal obligations in a proper manner. As it could be laid low from any external threat. I think we must ask ourselves. In a complicated, and sometimes
    dangerous world. Where our security as a Nation means not only being able to confront threats to us or our allies wherever they may arise. But, also recognizing,
    the two issues of military preparedness, and financial strength, are intertwined.
    If for any reason we don’t have one, we will most assuredly not have the other.

    1. Lynda Groom October 11, 2013

      Agreed. The rest of the world and our major economic competitors get along just fine with such a heavy attached weight as a debt ceiling. Its time has passed.

      1. dtgraham October 12, 2013

        Agreed Lynda. The United States is pretty much alone on this one. Denmark is the only other democratic nation with a system similar to the U.S. in that way, and that’s only recent. In the 20 years since they’ve had a debt ceiling, they’ve only raised it once.

        The U.K., France, Canada, Germany, you name it; none of them have debt limits. They all have slightly different ways of figuring out to control their debt, but it’s through the spending process in most cases. Many countries have restrictions on debt as a percentage of GDP, although not stringently applied due to Keynesian economic theory largely.

        There’s nothing in the United States Constitution that says Congress should use the debt ceiling to control spending or debt.

    2. RobertCHastings October 12, 2013

      The Fourteenth Amendment was used by W to win the election in Florida in 2000. It should also find value in defending the equal rights of ALL minorities, including the LGBT community. A SCOTUS hearing on the applicability of the 14th could open a huge can of worms, or it could settle many pressing issues that would shut up the conservative right forever.

      1. charleo1 October 12, 2013

        I say, if it be a can of worms, let’s open it up, and get at them!
        One cannot help but see the dysfunction, and the undercutting
        of democracy itself. When some have decided to cross the line
        and openly threaten to do great harm to the Country itself, if the
        majority does not bend to their will. It is an outrage, the public
        must be made aware of. The debt ceiling is not a law. It cuts
        neither for the Right, nor Left. But serves only as a weapon to
        be used by the minority party to attempt to extort by threat, what
        they could not achieve through regular order.

  2. George D October 12, 2013

    That was the real Republican party….not the one that took in the Dixie Crats and used racial hatred to get votes to disenfranchise and beggar the American middle class. My family went all out for IKE. The Republicans promised peace and an end to the Korean war…..this is a far cry from the military industrial profiteers they are today.

    1. George D October 12, 2013

      I lived during those years. I studied American Government as it was required both in High School and College and passed my classes. i doubt that many of you could pas those tests on American Government today. We need to get back to it….it is not an academic frill….it is the backbone of being an American. If you do not pass the class….no diploma….no degree….period.

      1. RobertCHastings October 12, 2013

        And, consequently, no certificate of citizenship. Naturalized citizens before becoming certified Americans must pass a stringent test on what is referred to as Civics, an understanding of how the government works. If we require immigrants to know how our government works, should we not require the same of our representatives in government, as well as those who elect them?

  3. Thomas_Blaney October 12, 2013

    Obama already announced that he does not believe the 14th Amendment gives him the power to act unilaterally and actually IS a Constitutional svholar, so what is the point if this article?

    1. Lynda Groom October 12, 2013

      The passage of time and circumstance often brings about change. The closer we get to disaster that previous view of the administration could be forced to change yet again.

    2. Allan Richardson October 12, 2013

      There are two reasons the President does not wish to use the 14th Amendment path unless absolutely necessary, and I did not consider one of them in the past few months when I posted on this and other blogs urging him to do so.

      Primarily, he is concerned that the supremacy of the 14th Amendment clause over a debt limit passed by Congress has not been, and probably will not be in the immediate future, definitely ESTABLISHED BY SCOTUS. In the meantime, bonds issued by the Treasury on the basis of a DISPUTED authority will likely not be accepted by investors, lest at some time in the future a case will be decided by SCOTUS that the bonds were NOT Constitutionally issued, and their investment would be lost. Now that he has explained that, I understand it (but I still don’t really LIKE it).

      The second reason is that Congress itself may dispute his spending authority and begin impeachment proceedings, and may possibly point to such an act as “proof” that he is acting as a dictator. This may either be an asset or a liability to GOP candidates next year; at the moment it seems to be a liability, but with enough money (and McCutcheon has not yet been decided), they may be able to gin up enough near-radical voters to join the radicals, and independent voters to turn against Democrats, to gain complete control of the Congress. And of course he does not want his LEGACY to be one of “usurped Congressional power over the purse.”

  4. jaimie bisbee October 12, 2013

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    1. tax payer October 14, 2013

      Who cares what she does in bed for a living.

  5. Carol Dijkhuyzen October 12, 2013

    It is time to BANNED this debt ceiling charade talks…Under Republican POTUS’s in the past there was no discussion needed for crying out loud!This is racism!Mid-term is coming,we should repeal or removed,republicans with toxic teas in tow.One loco and one loca…republikanos.

  6. disqus_ivSI3ByGmh October 13, 2013

    Please remember, Andrew Johnson was a Democrat, and a Southerner (who did not agree to secession in his home state, but sided with the Union) who had been selected as VP candidate on a “Unity Ticket” (Lincoln did not run as a Republican in 1864). His actions are almost understandable, given his circumstances.

  7. tax payer October 14, 2013

    You should have seen the crybabies in some States when they thought their children were going to die of hunger because they won’t work to provide for them and depend on the tax payers to feed them. My Food Stamp Card won’t work, so is the Government finally waking up and stopping this free giveaway of food to us was their question?


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