Orientation and Getting Started
The Creation of the Constitution
The Road to Philadelphia
Federalism
Congress
Slavery and the Constitution
The Presidency
The Federal Judiciary
Some Other Important Details
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Free Speech, Prior Debts, and the Supremacy Clause

Payment of Prior Debts

When the Articles of Confederation were drawn up, Article XII had expressly stated that all debts contracted by the old Continental Congress would still be valid under the new Confederation Congress once the Articles had been ratified. Typically, provisions of this sort are incorporated to send a message. They give reassurance to creditors (both foreign and domestic) that they will not be cheated out of what is owed to them just because there has been a regime change. And it is a message to the incoming government that they cannot use the new constitution as a pretext for shirking their obligations—they cannot say, “we were not the ones to incur the debt, so we should not be expected to pay it.” The Virginia Plan had likewise included a similar provision. 

After variously trying out different formulas for this clause—should Congress merely be empowered to pay off the old debts or commanded to do so?—the final proposal came from Edmund Randolph: “All debts contracted, and engagements entered into, by or under the authority of Congress, shall be as valid against the United States, under this Constitution, as under the Confederation.” This wording received the approval of all the states except Pennsylvania. After some tinkering in the Committee of Style, the reassurance that the new Congress would abide by the obligations laid under the old one was inserted into Article VI of the Constitution. 

The Development of the Payment of Debts Clause

ARTICLE XII of the Articles of Confederation: “All bills of credit emitted, monies borrowed and debts contracted by, or under the authority of Congress, before the assembling of the United States, in pursuance of the present confederation, shall be deemed and considered as a charge against the United States, for payment and satisfaction whereof the said United States, and the public faith are hereby solemnly pledged.”Resolution 12 of the Virginia Plan: “Resolved, that provision ought to be made for the continuance of Congress, and their authorities and privileges, until a given day after the reform of the Articles of Union shall be adopted, and for the completion of all their engagements.”Article VI of the Constitution:  “All Debts contracted and Engagements entered into, before the Adoption of this Constitution, shall be as valid against the United States under this Constitution, as under the Confederation.”