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T A B L E OF k k CONTENTS * by M r . H a m i l t o n on Public C r e d i t by M r . H a m i l t o n on a National B a n k by M r . H a m i l t o n on M a n u f a c t u r e s by M r . H a m i l t o n on Establishing a Mintt by M r . H a m i l t o n on Public C r e d i t by M r . Gallatin on the F i n a n c e s by M r . Gallatin on the F i n a n c e s by M r . Gallatin on the F i n a n c e s by M r . Gallatin on the F i n a n c e s by M r . Gallatin on the F i n a n c e * by M r . Gallatin on the F i n a n c e s Report by M r . Gallatin on the F i n a n c e s * ^ R e p o r t by M r . Gallatin on the F i n a n c e s Report by M r . Gallatin on the F i n a n c e s R e p o r t by M r . Gallatin on the F i n a n c e s " ^ R e p o r t by M r . G a l l a t i n on the F i n a n c e s ^ R e p o r t by M r . Gallatin on the F i n a n c e ? Fag<?. ^Report J ^ Report J. Report ^^Report ^wieport ^Report 'J IT7Report Report -}• Report ^Report V, Report January, 17.90 December, December, May, 1790 1791 1791 54 78 133 - January, - December, December, October, 1795 1801 1802 157 216 1303 November, December, 1804 1305 December, November, 1806 - - - - December, June, - December, - December, November, - - R e p o r t by M r . Gallatin on the F i n a n c e s - . . R e p o r t by W i l l i a m J o n e s , ( A c t i n g Secretary the F i u a n c e s P^ Report by W i l l i a m Jones, ( A c t i n g Secretary the F i n a n c e s ° R e p o r t by G. W . Campbell on the F i n a n c e s <0 VOL. I . — 1 CM - December, June, 1807 1808 1809 1S09 1810 1811 1812 December, 1813 1813 December, 1814 3 252 262 285 297 331 35G 373 391 398 421 443 468 488 499 523 R 1795.] SECRETARY OF T H E TREASURY. 157 PUBLIC CREDIT, No. 2. JANUARY, 1795. The Secretary of the Treasury respectfully makes the following report to the Senate: The President of the United States, with that provident concern for the public welfare which characterizes all his conduct, was pleased, in his speech to the two Houses of Congress at the opening of the present session, to invite their attention to the adoption of a definitive plan for the redemption ol the public debt, and to the consummation of whatsoever may remain unfinished of our system of public credit, in order to place that credit, as far as may be practicable, on grounds which cannot be disturbed, and to prevent that progressive accumulation of debt, which must ultimately endanger all government. It was, at the same time, very justly intimated, that the period which has elapsed since the commencement of our fiscal measures, (now more than lonr years.) has so far developed our resources as to open the way to the important work. And it is matter of solid consolation that the result, predating a state of oar finances prosperous beyond expectation, solicits the public councils to enter with zeal and decision upon measures commensurate with the greatness of the interests to be promoted. Inder the influence of this conviction, in conformity with the suggestions 'jlthe President, and pursuant to the duty which the constitution of the 'Apartment, as by law established, enjoins upon the Secretary of the Treasury he hsts employed himself in digesting and preparing the materials of a P ' a n for the attainment of the invaluable ends which are recommended. And he now respectfully submits them to the consideration of Congress. Towards a clear and distinct conception of the means necessary to the accomplishment of those ends, it will be useful, in the first place, to review what has been heretofore done. This will be presented under three heads. revenucs which have been established, "pon f t Prov'sions funding the debt, and for the payment of interest The provisions for reimbursing and extinguishing the debt. he revenues which have been established appear in the following acts: 1st. « An act for laying a duty on goods, wares, and merchandises, imported into the United States," passed June the 1st, 1789. This act, as its 1 le imports, lays various specific and ad valorem rates on all articles (with ^ception of a few useful to agriculture and manufactures) imported from rei n £ countries. The lowest ad valorem rate is five per cent., with a disc 10 per cent, in favor of our own bottoms. The duration assigned en( sess on day of * ' Congress next succeeding the first 1 a Jjd. " An act imposing duties on tonnage," passed July 20, 1789. act v arious rates of duty on the tonnage of ships and vessels ; ered m the United States from foreign countries.^ and, in certain cases, one Pa" of the United States from another. 158 REPORTS OF T H E [1795. Its duration was indefinite, no limit having been assigned. 3d. " An act imposing duties on the tonnage of ships and vessels," passed July 20, 1790. This act is a substitute for the one last mentioned, preserving the same rates of duty, but applying them, in some instances, differently. It is, like the former, of indefinite duration. 4th. " An act making further provision for the payment of the debts of the United States," passed August 10. 1790. This act repeals, after the last of December, 1790, the duties on imported articles laid by the act above cited, and substitutes new, and generally increased rates, specific and ad valorem. The lowest ad valorem rate in this, as in the former act, is five percent.; but the number of articles to which it applies is much narrowed ; and instead of a discount in favor of our own bottoms, an addition of ten per cent, is made to the disadvantage of foreign bottoms. The number of free articles is somewhat extended, in further encouragement of agriculture and manufactures. It is declared that the duties laid by this act shall continue till the debts and purposes for which they are appropriated shall be satisfied ; reserving, however, a right to Congress to substitute other duties or taxes of equal value. 5th. " An act to incorporate the subscribers to the Bank of the United States," passed the 25th of February, 1791. The second section of this act authorizes the President to cause a subscription to be made to the stock of the bank, on account of the Tailed States, to the amount of $2,000,000; and with a view to the accomplishment of that object, to borrow of the bank $2,000,000, to be reimbursed in ten equal yearly instalments. The difference between the interest payable on the loan, and the dividends on the stock, constitutes an item of annual income to the United States. It is unappropriated. 6th. An act repealing, after the last day of June next, the duties heretofore laid upon distilled spirits imported from abroad, and laying others in their stead; and, also, upon spirits distilled within the United States, and for appropriating the same," passed the 3d of March, 1791. This act, in conformity with its title, repeals, after June, 1791, the duties on imported spirits laid by the act of the 10th of August. 1790. and establishes. in lieu of them, higher rates, namely, from 20 to 40 cents per gallon, according to proof. It also lays duties, to commence at the same tune, »P°n spirits distilled within the United States, namely, on those from fore'i* materials, from 11 to 30 cents, according to proof; on those from domestic materials, if distilled in cities, towns, or villages, from 9 to 25 cents per gallon, according to proof; if distilled in other places, it imposes a yearly rate of bO cents per gallon of the capacity of each still, with an option to the distiller to keep and render an account of the produce of his still, ana to pay nine cents per gallon of the quantity of spirits distilled therein. These duties are appropriated, primarily, in the .same manner, and t» [he same purposes as those laid on imported articles by the act of W 10th of August, 1/90, and are to continue for the same time, w i t h the like reservation of a right to substitute other duties or taxes of equal value1 here is a further appropriation, which will be noticed hereafter. 1795.] SECRETARY OF THE TREASURY. 159 7th. "An act for raising a further sum of money for the protection of the frontiers, and for other purpose* therein mentioned," passed May 2, 1792 This act repeals, after June, 1792, the former duties on a number of imported articles, and establishes higher duties in their stead. | It extends, among other thiugs, the duties on foreign distilled spirits layin? on those made from grain 28 to 50 cents per gallon ; on others, 25 to 4b cents per gallon. The appropriation and duration of these new duties are conformable and co-ex tensive with those repealed. There is. likewise, an addition of 2\ per cent, to that class of duties ad valorem, which, before, was rated at 5 per cent.; but this additional duty is limited to the term of two years. Out of the surplus of these duties, after satisfying the permanent appropriations, certain gross sums are appropriated for the service of the War Department. 8th. " An act concerning the duties on spirits distilled within the United v, y, States," passed May 8, 1792. ' This act repeals, after the last day of June, 1792, the former duties on b ^ spirits distilled within the United States, and on stills; and, instead of them, ' establishes lower duties, namely, on those made of foreign materials, from 10 to 25 cents per gallon, according to proof; on those made of domestic materials, if in cities, towns, or villages, or at distilleries where the stills, singly or together, are of the capacity of 400 gallons or upwards, from 7 to li> cents per gallon, of the spirits distilled, according to proof; if made in ot ner places, or at distilleries where the stills are of inferior capacity, the yearly rate of 54 cents per gallon of the capacity of each still. A new opion is given to the distiller, which is, instead of paying the yearly rate, to Jake out licenses for the monthly employment of his stills, paying, each "We, 10 cents per gallon of the capacity of each still. These new duties are appropriated in the same manner, and for the same purposes, and art to continue for the same time, as those for which 'f'J are substitutes; and to make good, any deficiency which may accrue ' ^ l o w e r i n g the rates, the surplus of the duties imposed by the act of 2d of the same month is appropriated. " An act to promote the progress of useful arts, and to repeal the act hereWore made for that purpose,' passed February 21, 1793. 1 his act ordains certain fees to be paid, by persons to whom patents are panted, for inventions, discoveries, or improvements, and appropriates to the purpose of defraying clerk hire in the Department of State. m duration is indefinite. IT". "An act to establish the post office and post roads within the bn 'ted States," passed May 8, 1794. 1 his act establishes, to commence on the first of June following, various ? p ates of postage on letters, and directs that the Postmaster shall render to " S U r y I e artment a and u T ^ P > quarterly account of receipts and expenditures, d shall pay quarterly, into the Treasury, the balance in his hands. «f A.® d u r a t l o n of this act is also indefinite. It contains no appropriation pald i,lto t h e Treasury. _ 0 th. "An act laying duties upon carriages for the conveyance of per- ~ ^ passed June 5, 1794. ' fcl"* lays different rates upo of duty, from ten dollars down to one dollar, for r C a r r ' a ^ e s / o r conveyance of persons, kept by or for any person, O W n use ffers- ° r i » or to be let to hire, or for the conveying of passen; and to guard against misapprehension, declares, that the duties shall REPORTS OF T H E 160 [1795. not be construed, to extend to any carriage usually and chirjly employed in husbandry, or for the transporting or carrying of goods, wares, merchandise, produce, or commodities. The duration of the duties is limited to the end of the session of Congress which shall be next after the term of two years from the time of passing the act. It contains no appropriation. 11th. " An act laying duties on licenses for selling wines and foreign distilled spirituous liquors by retail," passed June 5, 1794. This act requires that every retail denier in wines shall take out a yearly license, and shall pay for it a duty of five dollars; and that every retail dealer in foreign distilled spirituous liquors shall also take out a yearly license, and pay for it a duty of five dollars. It defines n retail dealer in wines to be a person who deals in the selling of wines, to be carried or sent out of the house, building, or place of his or her dwelling, in less quantities at one time than thirty gallons, except in the original cask, ease, box, or package, in which it is imported. A retail dealer of spirituous liquors to be a person who shall deal in the selling o{foreign distilled spirituous liquors, to be carried or sent out of the house, building, or place of his or her dwelling, in less quantities than twenty gallons at one time." No difference is made between the dealer in several kinds of wines, or several kinds of foreign distilled liquors, and the dealer in one kind. The same duration is assigned to this act as to the one last cited. It is equally without an appropriation. 12th. « An act laying certain duties upon snuff and refined suifar," passed June 5, 1794. a > r—' This act lays a duty of 8 cents per pound on all snuff, which, after the 30th of September, 1794, should be manufactured within the United States, and of 2 cents per pound on all sugar which, after that day, should be refined within the United States. The remark made Upon the two last recited acts is applicable to this, as to the duration of the duties, and the appropriation of their proceeds. 13th. « An act laying additional duties on goods, wares, and merchandises, imported into the United States," passed June 7. 1794. This act lays upon sundry enumerated articles, on their importation from loreign countries, certain specific and ad valorem rates of duty, in addition to those before charged upon them, and adds, generally a duty of two and a halt per centum on all that class of articles which were b e f o r e chargeable with seven and a half per centum acl valorem. It also prolong the temporary two and a half per centum, laid by the act of Mnv 2 1792. till the 1st of January, 1797, to which period the other duties laid by it are to continue. it contains no appropriation. 1794 th ' " A n aCt l a y i n ? d tieS " ° n 0!°P ert y 801(1 a t Miction," passed June 9, thehws a of a a \ a " C t i o n > b y licensed according to I ^er rent nf th ' u* P r o h l b , t » * <>*<** from selling at auction, of L or e s t L .n i ? r m ° D e y a r i s i n £ f r o m t h e ^ of any right, interJ S f c t e n f m e n t S : o r hereditaments, utensils in husbandry, Ve l8 of r ; £ P° r c e n t ^ purchase money, Thf t ™ S * S°ods, chattels, rights, or credits. the e x ^ ^ J ^ t Wd ^ ?a rl S i f rm mi tt hee ^ t h e e of the session n e * t a £ w X u an ln appropriation. ° v ° of passing the act, which also iss without But, by an act entitled "An act making appropriations for certain pur 1795.] SECRETARY OF THE TREASURY. 161 poises therein expressed," passed the same 9th of June, 1794, certain specific sums, amounting together to $1,292,137 38, are charged upon the proceeds of the revenues, which are created by the five last mentioned acts, and there Jo is a reservation made out of thein of a sum sufficient to pay the interest of I whatever moneys may be borrowed pursuant to the act entitled u An act making further provision for the expenses attending the intercourse of the United States with foreign nations," <fcc., passed the 20th of March, 1794. tohirk sum is pledged far the payment of that interest. These acts comprehend all the current revenues of the United States. Their product will appear hereafter. In addition to them, a fund will be derived from the sale of the public lands in the Western Territory. And there likewise occur, from time to time, payments into the Treasury on account of old debts; but these are too casual, and of too little magnitude, to bj more than cursorily mentioned. The lands in the Western Territory, of which the Government of the ' nited States has acquired the right of soil, are estimated in a report of the late Secretary of State to amount to 21,000.000 of acres. This quantity, at twenty cents per acre, the price upon former occasions contemplated, would yield a sum of $4,200,000. But it is believed that it would be unsafe to count upon so large a sum Besides the uncertainty as to the proportion which may be of a saleable quality, and as to the price which may be obtained for it, the boundary line between the United States and the Indians is understood to be unsettled wim regard to a large part of the tract on which the computation is made. If it ultimately yields three millions of dollars, it will probably equal erery reasonable expectation. The provisions for funding the debt, and for payment of interest upon it, are comprised in the following acts: 1. " An act making provision for the debt of the United States," passed August 4, 1790. This act, commonly called the funding act, contains these several provisions, viz: I. It reserves out of the proceeds of the duties on imports and tonnage, for the support of the Government of the United States, and their common defence, the yeariy stun of $600,000. II- It appropriate* so much of the same proceeds as should be necessary 10 the payment of interest on foreign loans before that time contracted, or which should afterwards be contracted, for discharging the arrears of interest, and the principal of antecedent foreign loans, to continue so appropriated till the debt created by those loans should be fully discharged. III. It authorizes the President to borrow any sum or sums not exceeding $12,000,000, to discharge the arrears of interest upon, and the instalments of the principal of, the foreign debt due, and to grow due; and if to be effected on advantageous terms, to pay off the whole of that debt; and further authorizes him to make such other contracts respecting it as should be found for the interest of the United States, so that no engagement or contract should preclude from reimbursing the sums borrowed within fifteen years after they should be borrowed. IV. In order to adapt the form of the domestic debt to the then circumstances of the United States, as far as should be found practicable, " conwith good faith and the rights of the creditors," which it truly declares "could only be done by a voluntary loan on their partit proposes a loan to the United States, (directing for that purpose books for VOL. 11 162 REPORTS OF THE [1795. subscriptions to be opened at the Treasury, and by commissioners of loans in the several States, on the 1st of October, 17^0, and to continue for a year;) the sums subscribed to the loan to iaj paid ill certain enumerated evidences of the debt of the United States, upon these terms, viz: 1st. That the interest unpaid on the principal of those evidences, should be computed up to the last of December, 1790. 2d. That for any sum subscribed and paid in the principal of the debt, the subscriber shoulci be entitled to one certiiicate for a sum equal to twothirds of the sum subscribed, bearing an interest of six per cent, per annum, commencing the 1st day of January, 1791, payable quarter-yearly, and subject to redemption by payments not exceeding in one year, on account both of principal and interest, eight dollars upon a hundred of the original sum so subscribed and paid ; and to another certificate for a sum equal to the remuiniug third of that sum, which, after the year 1M)0, should bear a like interest, payable in like manner, and subject to a like rate of redemption. But thai th United States, though having a right to redeem in the abovementioned proport ion, should not be obliged to do it. 3d. That for *ny sum subscribed and paid in the interest of the dtbl, the subscriber should be entitled to a certificate for a sum equal to the sum subscribed. bearing aiMvttt rest of three per cent, per annum from the said last day of December, 171)0. payable quarter-yearly, and redeemable ut pleasure, by payment of the principal. 4th. That the new *toclt created hy the said loan should be transferable on the books upon which the rr uit foi it should stand by the proprietor or his attorney; these I ooks to be either «hose kept for the purpose at the Treasury, or by commissioners of baas in the respective States; a mcie being provided for tue transfer from the books at one place to those at another. 5th. That the interest should be payable wheresoever the credit for the stock should exist, when tlic payment of interest should become due, except that the dividend ot interest for any quarter of a yet\r, which should nut ue demanded before the expiration of a third quarter, s h o u l d ailei wards be demandable only at the Treasury. 6th. That for the regular payment of the interest on the several kinds of stock, to arise from the Joan as it should accrue, including that which is deferred, the proceeds of the public revenues, which bebre that time had S L I R ' F 6 THEN R R : SH^,LD PRO> ,DOD'AFIER v«rl* $600,000 for the support of the Government of 'he United States and their common defence, and such sum as should b necessary for payment of interest on the foreign loans before mentioned, should bL and thereby were, pledged and appropriated till the final redemption of the capital SLOCK. Y Premising that some of the creditors of the United States might not think fit to become subscribers to the loan, this act declares that « nothing contained in it should be construed in any wise to alter, abridge. or pair, the rights of those creditors of the L'nited States who should not C0 Uract ^ Z n l n ! ', "I*™ which their respective clai® sa d w l n n f v . i t -' A ! ^ c t s and rights should remain in M A, d t0 0bvu ue i : ; idea of compulsion on the creditors to subscribe, it allows to non-subscribers, during the pendency of the 1<** ana unui tne end o theW year 1791, a rate per centum on their respective h,Ch S t ' T t ^ ^ * * t o G i b i n g creditors; on the sole condition, that the evidences of debt holden by them; except thoU which had 1795.] SECRETARY OF THE TREASURY. 8 been issued by the R a s t e r of the Treasury for the regislered debt, should he exchanged for other certificates, specifying the spccie amount of those in exchange for which they were qjven, ai-d otherwise of the like tenor y with those which had theretofore been issued by the Register of the Trcaj sury for the registered debt; stating, as the grounds of this condition, that some ol the certificates then in circulation had not been liquidated to specie value; that most of them were greatly subject to counterfeit: that counterfeits had actually taken place in numerous instances: and that embarrassment and imposition might attend the pavment of interest on these certificates in their then form. VI This act likewise proposes another loan to the amount of .$21,500,000 payable in the principal and interest, indiscriminately, of the evidences of debt of the respective States, according to certain quotas, to be conducted in the same manner, and to be open for the same time, as that in the domestic debt of the United States. The terms of this loan to be— 1st. That, for any sum subscribed, Ihr subscriber should lie entitled to one certificate for a sum equal to four ninths of the subscribed sum, bearing an interest of six per centum per annum, commencing the 1st day of January, 1791; to another certificate for a sum eq'ial to two-aiutbsof the said subscribed sum, bearing an interest, after the year 1HM), of six per centum per annum; and to a third certificate, for a sum equal to thive-ninths of the said subscribed sum, bearing an interest of three per centum per annum, commencing on the same 1st day of January. 1791: the interest in each case to be payable in like manner, and to be subject to the like redemption as that on the correspondent kinds of stork to be created by this the said first mentioned loan. And the stock to be created by ifiis second loan, to j>e transferable, on the same principle.*, and in the same modes, as that produced by the former. 2d. That for the regular payment of interest on the sererai kinds of stock (a ar >*e from this loan, as it should accrue, including thn which is deferred, f fie proceeds ol the public revenues, which, before that time, had been, or during the then session should be provided, after rtservhig the aforesaid ynrly sum, of $000,000, the sum necessary for pymcnl of interest on the foreign loans made and to be made, and the sum, necessary for paymtt, t of intcr°st on the loan in the domestic debt. sl*HlId be, and thereby We re. ledged and appropriated; to continue so ploiged and appropriak 1 until the final redemption of thi cqiital stock. VII. To secure the due application of these revenues, according to the appropriations, an account oflhetn is direci «d 0 be kept, distinct from that of the proceeds of any oth=»r revenues, exc pt such as should be raised to m l ke good a deficiency in those; and the fait'j of the United States is pledged to appropriate addition tl and permanentft»?fdsfor satisfying such deficiency. VIII. The proceeds of t;ie siles of hn.is in the Western Territory, then belonging, or which thereafter should belong to the United States, are pledged an J appropriated for the discharge of the debts which the United States then owed, or by virtue of that act should owe. There are several collateral ind supplementary provisions, which are °nntted as immaterial to the intended view of the subject. 2. "An act repealing, after the last day of June next, the duties heretofore laid upon distilled spirits," <fcc., p;issed the 3d of March, 1791. The proceeds of the duties laid by this act are made subject to the same appropriations, and m the same ordjr of priority, as those contained in the REPORTS OF THE 164 [1795. funding act; and to secure their due application an account is directed to be kept of them, distinct from that of any other revenues, except those appropriated by the funding act. -; 3. " An act for raising a further sum of money for the protection of frontiers/' &c., passed May 2d, 1792. This act, which, as has been before noticed, increased permanently the duties on certain imported articles, and laid a temporary additional duty on some others, appropriates primarily the proceeds of the permanent augmentations in the same manner, and to the same purposes, as the antecedent duties were appropriated; that is. in conformity with the funding act. 4. " An act concerning the duties on spirits distilled within the United States," passed May 8th, 1792. This act, which lowers the duties on spirits distilled within the United States, and on stills, appropriates the proceeds of the reduced duties in the same manner as were the former duties; and to make good whatever deficiency might be occasioned by the reduction of the rates, pledges as a substitute the surplus of the augmented duties laid by the last cited act. 5. " An act providing for the payment of the second instalment, due on a loan made of the Baukof the United States", passed June 4th, 1794. This act, in addition to a provision for paying that second instalment, appropriates so much of the dividends on the stock which the United States hold in the bank, as should be necessary to the payment of interest on the capital of a loan of $2,000,000, had of the bank, pursuant to the 11th section of the act by which it is incorporated. It also fixes the last day of December, in each year, as the aunual period for the payment of the successive instalments of that loan. 6. « An act making provision for the payment of the interest on the balances due to certain States, upon a final settlement of accounts between the United States and the individual States;" passed May 30th. 1794. This act directs 'hat interest shall be allowed and computed on the balances to creditor Sates, from the last of December, 1789, to the last of December, 1794; which, being placed to their credit respectively, shall bear an interest of three per centum per aunum, from the period last'mentioned. It further directs that the interest on the principal balances, to be funded agreeably to the terms of the act for the settlement of accounts, together with the interest upon the arrears of interest, computed on those balances, and forming a new capitaV shall be payable at the offices of the commissioners of loans within the States to which the balances are respectively due and shall be paid quartor-yearly, after the last day of December, 1794, 3 T !? * a c h at Which interest is payable on the other parts of the funded debt; to which end, so much of thrproceeds of the duties on imports and tonnage as rmy be necessary, and as were not otherV t Z ^ A a f Z r 0 p r t a ? d J * * Wopnated; and the faith of the United m ^ ^ ^ T ^ t A N Y *FICIENCY *HLCH - Y O l o n inn TheTomeXTr^ * 5 debts, ! ? F on 'tim e toastime, the subscriptions the domestic and TSuite the Ssarae terms by the funding act; ter1794 w h l T ^ f 1 ~ e d to the last dav of December 1,94 which acts, together with the acts particularly cited compr^ all those that relate to the funding of the pubUc debt and thL w m J t of RJ e S and h D E U R, s h, To h etheI"" 1 1 ° f t h e f * a K S ^ mu T L ^ * defc'Znrnllu^ * f of l h e foreign debt; that of the funded debt the probable amount of that which remains unfunded, of what com 1795.] SECRETARY OF THE TREASURY. 165 posed, and (he annual amount of interest upon the different portions of debt according to contract, and according to the plan of this report. The provisions for reimbursing and redeeming the public debt are contained in the following acts, and are as follows, viz: I. w An act making provision for the debt of the United States," passed the 4 th of August, 1790. This act, which is the one that regulates the funding of the debt, by the last section appropriates the proceeds of the sales of lands in the Western Territory, then belonging, or thereafter to belong, to the United States, to the sinking or discharging of the debts for which the United States then were, or by virtue of that act should be holden, to be applied solely to that use. until they should be fully satisfied. II. "An act making provision for the reduction of the public debt," passed August 12th, 1790. This act, premising that it is desirable, by all just and proper means, to effect a reduction of the public debt, and that the application of the surplus revenue to that object will not only contribute to this desirable end. but will be beneficial to the creditors of the United States, by raising the price of their stock, and be productive of considerable saving to the United States, enacts: 1st. That the surplus of the duties on imports and tonnage to the end of ibe year 1790, shall be applied to the purchase of the debt of the United States, at its market price, if not exceeding the par or true value thereof. 2d. That the purchases to be made shall be conducted under the direction of the President of the Senate, the Chief Justice, the Secretary of State, the Secretary of the Treasury, and the Attorney General ; who, or any three of whom, with the approbation of the President, are authorized to cause them to be made, in such manner, and under such regulations, as shall appear to them best calculated to fulfil the intent of this act: Provided, That the same should be made openly, and with due regard to the equal benefit of the several States. 3d. That the accounts of the application of the fund should be settled as other public accounts, accompanied with returns of the amount of debt purchased at the end of each quarter of a year; and that a full and exact report of the proceedings of the commissioners should be laid before Congress, within the first fourteen days of each session, including a statement of the disbursements and purchases; specifying the times when, prices at which, and persons of whom, the purchases were made. 4th. That, in addition to this fund, the President should be authorized to borrow any sum or sums, not exceeding 2,000,000 of dollars, at an interest not exceeding five per centum, to be applied to purchases of public debt, in like manner, and under the same direction and regulations as the first mentioned fund: Provided, That out of the interest of the debt to be purchased, there should be appropriated annually a sum not exceeding eight per centum of the sums borrowed, towards paying the interest and reimbursing the principal of these sums. But to guard against the possibility of a deficiency of means to pay the interest on the debt\vhich was to accrue in the year 1791, authority is given to reserve and apply to that purpose, out of the first mentioned fund, as much as might be necessary to supply the defect of receipts during that year, on account of the duties which should accrue after the year 1790. III. u An act repealing, after the last day of June next, the duties hereDigitized FRASER toforeforlaid upon distilled spirits," <fcc., passed the 3d of March, 1791. 166 REPORTS OF THE [1795. This act appropriates whatever surplus may remain from year to year of the proceeds ot the duties which it imposes, after satisfying prior appropriations, to the reduction of the public debt, unless such surplus shall be required for the current public exigencies, and by special acts of Congress shall be appropriated thereto. IV. "An act supplementary to the act making provision for the reduction of the public debt," passed the 3d day of March, 1791. This act declares that the terms of a loan of three millions of florins, obtained in Holland, bearing five per cent, interest, and four and a half per cent, for charges, and future loans on the same terms, should be deemed to be within the meaning of the act of the 12th of August, 1790. V. "An act supplementary to the act making provision for the debt of the United States," passed May 8, 1792. This act makes provision for the payment of a debt due to certain foreign officers who had served the United States, (the interest of which was, by stipulation, payable at Paris,) out of the moneys authorized to be borrowed by the funding act. It also establishes a permanent sinking fund, to be composed, 1st. Of the interest of the public debt purchased, redeemed, or paid into the Treasury, in satisfaction of an) debt or demand. 2d. Of the surplus, if any, which should remain of moneys appropriated for paying the interest of the public debt, after paying that interest. This fund is to be applied under the direction of the commissioners nominated m the act of the 12th of August, with the like approbation of the President, 1st. To the purchase of the several species of stock constituting the debt ol the United States, at their respective market prices, not exceeding the par or true value thereof, and as nearly as may be iu e q u a l proportions, until the annual amount of the fund shall be erpinl to tiro per centum of the whole amount of the outstanding funded stock, bearing a present interest of six per centum. Thenceforth, •i *Jt ^Vq? redemPl.\on, o f that according to the right reserved to the United States, until the whole should be redeemed. And lastly, after Z f y j ^ 1 0 ^ ! ° J h e Pur^*e> a t its market price, of any unredeemed debt of the United States: which purchases are directed to be made at the owest prices at which they can be effected, by open purchase, or by receivthe * h e commissioners, or )e?sons a t C S K he n r n ^ ^ by u t 0 m a k e P h a s e s , and of the persons making o n C S ^ a n d are t0 ^ a c c o u i l t t d * Treasury, and reported to maUner the yf?An £? Purchases authorized to be made, the year 1793.;'m appropriations for the support of Government for m ^ h onhe P lo^ de nV h « at ° f l h e l J n i t e d States shall cause so lHe R m k f the Unilcd n t h action o n h e T ^ r ° ^ ' c s , pursuant to the off 5 0 O C O & S i ! a l h i ^ n ? r p ° L a U O n ' l ° ** P aKj sums not less tim than T l u n a t e r r y inay? f r Z may regard to the exigencies of Z r**a nmd l ht he e t reasury, having due S t e ^ r r ^ Wropnations made o n a ' L m m ^ T ^ ^e T n Tk ' If ff hoe r U mt htee dW ® " * the first instalment due % lis ^ ° States," passed March 2d. 1793. m i L s t f d o ° r ( the ^ <* " of two Digitized minionsforofFRASER dollars had of the Bank of the United States, pursuant to the lltb 1795.] SECRETARY OF THE TREASURY. 167 section of the act by which it is incorporated, out of the moneys borrowed upon the authority of the act making provision for the reductiou of the public debt. VIII. " An act providing for the payment of the second instalment due on a loan made of the Bank of the United States," passed June 4th, 17.J4 This act authorizes the payment of that sec >nd instalment out of the proceeds of any foreign loans before that time transferred to the United Suites. It makes other provisions, which have been noticed under a preceding h;:ad. These acts comprise all the provisions which have been made for reimbursing and redeeming the debt of the United Stales. The result of the last, of December, 1794, is presented in the statement E. There are two other acts, which, though not falling properly under either of the foregoing heads, require, from their relation to the subject, to be brought into view. 1st. "An act relative to claims against the United States, not barred by any act of limitation, and which have not been already adjusted," passed February 12th, 1793. This act directs that all claims, of tho description given in the title, shall be presented at the Treasury for adjustment by the 1st of May, 1794, or shall be forever after barred: except those for loan-office certificates, final settlements, indents of interest, registers' certificates, balances on the books of the Treasury, loans of money in foreign countries, ccrlifirates issued under the act entitled " An act making provision for the debt of the United States." Such of the claims presented as cannot be admitted in the course of the Treasury, are to be reported to Congress by the accounting officers. Among the claim* inadmissible in the ordinary course of the Treasury, is a sum >f $90,574 of the bills of credit commonly called new emission money. 2d. " An act making further provision for the expenses attending the intercourse of the United States with foreign nations," &c., passed March 20th, 1794. This act appropriates, in addition to former provisions, one million of dollars for the purposes mentioned in the title, to be paid out of any moneys which may be in the Treasury not otherwise appropriated, and to be applied under the direction of the President of the United States, who is also authorized, if necessary, to borrow the whole, or any part of the sum ; but there is no special appropriation either for paying the interest or reimbursing the principal of the loan. The act already quoted, of the 9th of June, 1794; entitled " An act mak»ng appropriations for certain purposes therein expressed," with a view to remedy this defect, appropriates out of the proceeds of the taxes laid during the last session, such sum as shall be sufficient to pay the interest on whatever moneys may be borrowed pursuant to the act of March 20th, 1794. The foregoing review of the laws which constitute the fiscal system of the United States, displays these prominent points as the leading features of that system: 1st." That all the current revenues of the United States are derived from these sources, to wit: I M P O R T E D A R T I C L E S ; the T O N N A G E ot ships and vessels; S P I R I T S distilled within the United States, and H T I L I . S ; the P O S T A G E of letters; P E E S ON P A T E N T S ; D I V I D E N D S of bank stock; S N U F F manufactured within the United States; SUGAR refined within the United States; 16 8 REPORTS OF THE S A L E S A T A U C T I O N ; L I C E N S E S lo retail R I A G E S for the conveyance of persons. [1795. wiues and distilled spirits• CAR- 2d. That of these revenues, the principal part of the duties on imported articles those on the tonnage of ships or vessels, those on distilled spirits and stills, those on the postage of letters, patent fees, the dividends on hank stock, are permanent; (the three first being commensurate with the existence ot the debt for the payment of the interest of which they are pledged: the fourth and fifth having no limit assigned in the laws; and the last beinu commensurate with the duration of the property in the stock :) all the othera temporary; being limited to continue no longer than till the end of the session of Congress next after the expiration of two years from the respective Z Z 0 L ^ S l D g . t h e > W S w h i c h established them, except the temporary dunes on imports and tonnage, which are to continue till the 1st of January, J l ™ a t t h e Permanent duties on imported articles, the tonnage duties, SpintS d S t , l !nhWt ' ¥ w i t h i n , h e: U l l i t c d and on stills, arc subject to these permanent dispositions of C0fl 000 «f\t ' for the support of the Government of the LnitedSta.es and their common dclel.ce. M. I o an appropriation of so much as mav lie necessarv to nav p r o V , d e d for b TSd.T l oo an l Zappropriation t f ° r T *T of so much as may>' be necessary to nav moVetron rlv in the ftS"*-^ Z*of? ethe^ United « States. c l ^ S M % more properly, original debt 4th. l o an appropriation of so much as may be neeessaxv to dis- t h e 6 i l ; ' t c ^ t a o n „ a , K V a ' i 0 n ° J 5 0 m u c h " m a >' >* necassary to pay lio^s establi^i p i f n ? creditor S t a t e ; which d. s ,hl S e r e t u t c r a . r , T I E 8 ' "CCOrd,ng ' «» »<>"* ** no such U l t i m a , " " " that , , ,o the »/ "" Mer dui.es hat. "" ^ ncu dividend « nation. ^ a specific sum of of 1,000,000 d M w Z h ^ A * ? ! t h C W ^ 1 1 1 o f intend on a sum intercourse. ' ^ ^ tobe Crowedfor the expenses of foreign d e S ^ T n g now Z e l f h e ^ T f ft ^ ** the domestic f the S,0ck Cfeated the loans fn the 3 ° ^ debts of the several Stages, and bv the ^ I States, and in the particular bottomed on certain V ^ e f r ^ l t ^ T ^ U6 10 Cmdltor StateS' f payment of the i*ercTu£n t £ ^ % fl*4*"* ° r hWoOucated for th* of the United States. ' d t h n s co "stitute the F U N D E D DEBT 8th. That the funded DoniesTir H-k* r . . the L n , t e d S t a t e s consists d three species of stock : one bearing. ^ of six annum ; another bearing a I** cent, per 3 th,rd a present interest o f t h r n ™ em, m p € r a n*n u^ m t^k e case payable quarter yearly. 5 interest in each 1795.] SECRETARY OF THE TREASURY. 169 9th. That the six per cent stock, present and deferred, can be redeemed in no greater proportion than at the rate of eight per centum per annum of the original sum, on account both of principal and interest; but the three per cent, stock is redeemable at pleasure. 10th. That the provision for subscribing to the loan in domestic debt expired on the last of December, 1794, and that no further provision has been made for the unsubscribed residue. 11th. That the funding act expressly confirms the contracts and rights of the creditors of the United States, who shall not think Jit to subscribe to the loan, and gives au expectation to them of further and other arrangements upon the event of the propositions made to them. 12th. That the proceeds of all the lands of the United States in the V\ estern rl erritory are appropriated to the redemption of all that part of the public debt for which, prior to the funding act, or by virtue thereof, the united Suites were, or are, liable. 13th. That in addition to this, a regular S I N K I N G F U N D has been successively constituted, to be applied under the direction of five principal officers ol the I nited States, with the approbation of the President, hitherto composed of three parts : 1st. The surplus of the duties ou imports and tonnage to the end of 1790; 2dly, the proceeds of loans, not exceeding 4000,000 of dollars, authorized to be borrowed for the purpose; (these two iunds to be invested in purchases;) and, 3dly, (in which the two former resolve themselves, the mterest ou the public debt, purchased, redeemed, or patd into the Treasury, together with the surpluses (if any) of moneys "impropriated for interest, to be applied first to purchases of the debt, till the fund is equal to two per centum of the outstanding stock, bearing a present interest of six per cent.; secondly, to the redemption of that stock; lastly, to purchases of any unredeemed residue of the public debt. But "!re ^ reserved out of this fund a sum not exceeding eight per centum per annum, towards the payment of interest, and reimbursing of the principal of the loans made for purchases of the debt. lo this recapitulation of the leading features of our fiscal system, it may . e useful to adJ a summary exhibition of certain results which appear more 111 r p ^ 1 ' ' o r are deducible from the tables or statements annexed to this report. 1 he particulars and amount of the debt of the United States are as follow: j J orcign debt, as per statements B and C, $14,599,129 35 duct instalment of foreign debt in the year 1795, to be paid out of proceeds of foreign loans 853,750 00 Ue $13,745,379 35 funded domestic debt, viz.: «• Arising from original domestic debt, subscribed to J?"' proposed by funding act: 0ck bearing a present interest of 6 per St?, nt i " . ' - $17,912,138 01 ^ ock bearing a future interest of ditto 8,538,228 97 ck a r £ ^ . >ng an interest of 3 per cent. - 12,275,347 55 - Arising from State debts assumed: ® °ck bearing a present interest of 6 per ct. 7,908,374 19 o 0C * bearing a future interest of ditto - 3,940,608 96 ock bearing an interest of 3 per cent. 5,994,115 70 [1795. REPORTS OF THE 170 3. Arising from balances to creditor States : Stock bearing a present interest of 6 per cent. $2,346,066 00 Stock bearing a future interest of ditto 1,172,528 00 Stock bearing an interest of 3 per cent. 703,510 80 $60,789,914 13 Unsubscribed debt, viz: Principal, exclusive of loan-office certificates, bearing interest on nominal value Interest thereupon, including indents Principal of loan-office certificates, bearing interest on nominal sum Interest thereupon . . . 1,072,583 40 452,826 74 27.935 00 7,830 00 1,561,175 14 Total unredeemed debt §76,096,468 67 This is exclusive of a sum of 81,400,000 due to the Bank of the United States, on account of the loan of §2,000,000 had of that institution, pursuant to the eleventh section of the act by which it is incorporated, and which is not included in the mass of the debt, because it is more than counterbalanced by a greater value in stock. It is also exclusive of those loans which are temporary anticipations of the revenue. The particulars and amount of the annual current revenues of the United States, are as follow: APPROPRIATED. PERMANENT. Duties on imports and tonnage, domestic - $4,199,791 67 Duties on distilled spirits and stills 400.000 00 Fees on patents (jy UNAPPROPRIATED. Postage of letters Surplus dividends on bank stock - * 29,722 16 62.500 00 £4,692,673 83 Temporary duties on imports TEMPORARY. 1,479,626 91 INTERNAL. Duties on snuff, refined sugar, sales at auction, licenses to retail spirits and wines, carriages for conveyance of persons Total annual current revenue 3S0.000 00 1,859,626 91 $6,552^0Ojf and am unt ffrfticu,ars ? of the annual stated e x p ^ d i ^ r e bf £ United States, computing the army and navy establishments on the scale of an Indian and Algenne war, are as follow • interest on the foreign debt . ' 490 58 Interest on domestic funded debt . ^ooq .741 50 Interest on unfunded debt . . . . 1° Interest on temporary loans " * IQO'OOO 1795.] SECRETARY OF T H E TREASURY. 171 Expenses of the civil Gove rnment, including foreign intercourse . . . ® _ §475,249 53 ^xpenses of military land service . . . 1511.975 29 Expenses of military naval service . . '441508 80 Miscellany „ . 109,357 04 Total annual expenditure - $5,6S1,S43 84 This sum is liable to be increased by the interest which will begin to accrue on the deferred slock the 1st of January, 1801, being, on the present amount of that stock, 8871,401 92. The annual force of the sinking fund, as depending on ascertained funds, may be stated as follows: interest for a year on sums already carried to its credit - $68,225 55 interest for a year on debts of foreign officers, in a course of payment, including arrears of interest to be carried to the credit of this fund 13,439 49 Interest for a year on the unexpended surplus of the revenues at the end of the year 1790, being $411,659 49, supposing this to be invested by purchase in an equal sum of present six per cent, stock . . . . 24.699 56 & 106.364 60 farther liable to be increased by an investment in purchases of «bbo,098 11, which, together with the sums from that source already invested in purchases and payments, will amount to #2,000,000, the sum authorized to be borrowed for purchases of the debt. But, as this auxiliary depends on an operation, not only future, but, in some degree, casual, it cannot be token into an estimate of the actual strength the fund. i he proceeds of the sales of western lands must also be considered as an eventual resource. There are other contingent sources of augmentation not computed, because they are contingent But, 011 the other hand, the fund is liable to be reduced, by a sum reserved out of it for the payment of principal and interest of the two millions authorized to be borrowed, for purchases not exceedni? eight per centum per annum. I he sum applicable, in the first instance, to the redemption of that por•on of the funded debt which bears a present interest of six per centum, excluding that stauding to the credit of the commissioners of the sinking 8 "nd, is as follows: tr < «nsferable stock $516,410 24 1 untransferable stock, arising from balances to creditor ^ates . . . . . . 46.901 12 $563,311 36 1 ile s n m applicable in the def^i 1 2 ' , 0 t h e rederop1'0" r stock, excluding that n f ,i n first instance, that is, on the 1st day of Jan°fthat portion of the funded debt now called standing to the credit of the commissioners the sinking fund, wilfbe as follows! 172 REPORTS OF THE [1795. Of transferable stock . . . . . £249.576 75 Of untransferable stock, arising from balances to creditor States . . 23,150 56 8273.027 31 These sums would complete the redemption of the whole amount of the stock to which they are applicable within twenty-three years after the redemption in each case was begun ; within which terms they would discharge the whole of the public debt, except the foreign debt, the unsubscribed debt, and the three per cent, stock. If the redemption of the present six per cent, stock commence the 1st of January, 1796, and the redeeming fund be commensurate with the whole of the unredeemed stock, bearing a present interest of six per cent., and transferable, the revenue set free in the year 1818, for operations upon the residue of the debt, will be 82,039,391 36. If the redemption of the deferred debt commence the 1st of January, 1802, when it may rightfully commence, and the redeeming fund be commensurate with the whole of that stock, unredeemed and transferable, the revenue set free in the year 1824, for operations upon the residue of the public debt, if any remain, will be 8998,307 02. The revenue set free by these successive redemptions would be sufficient to redeem the whole of the present foreign debt in six years ; that is, within a term of twenty-eight years from the proposed time'for commencing the redemption, or the 1st January, 1796; and, after extinguishing the foreign debt, would more than discharge the whole of the balances to creditor States, and the whole of the unfunded debt in two years more It the proceeds of the lands in the Western Territory should be equal to three millions of dollars, and the three per cent, stock can be purchased at an average of twelve shillings in the pound, that fund would suffice to payoff the principal ot the three per cent, stock in something more than 25 vears. nf T ™ t h a t ' ! f t h ; force of the sinking fund be rendered equal, exclusive of the proceeds of the sales of western lands, to the redemption of the present unredeemed transferable stock, commencing the 1st of January, Jannnrw 1 8 0 2 n tfoT i ? f \ p r ° S e m "l*™* o f s i x l™ "centum. and the 1st of S , ' f that bearing a future interest of six per centum; audit InH^ v l t h f 8 a , e s o f w e s t e m , a n <k ^ o u l d prove equal to $3,000,000, brol, ht r\te / *nto a c t i ™ purchases of three per Vent, stock, at the I r ^ Z ^ J T ^ J l T l a m e !*fore , h e the whole of the fwei nrTated ^ n V V ^ P n n d ^mestic (the funds appr» H Motb^ i n f . H ^ , 7 i e * * * adequate in productiveness, and a 1,ed A ould ^ A T PP ') V be extinguished in thirty years. And there e V e r i t0 the United S,ate an W « incoL^,435,320 » a t T f h a T r S - a , T Pr°V,S,0nS' W h i c h * proposed, may greatly accelerate ceeds loluhZ fJu* C^ S l ^d e , odna t a ' l h e Secretary of the Treasury a ^ e n r to h^m n l °" ™ Congress certain propositions, which to E J"™ * adopted to complete OUT sfstem of public credit. These will be followed by some explanatory remarks. time than can cOTV^iraUy be jpared correctness, Imnm k « no, e—jrJ»C calculatlon v o n l d demanded^ | 1795.] SECRETARY OF T H E TREASURY. 18 FIRST PROPOSITION. That further provision be made, with regard to the yet unsubscribed debt of the United States, as follows : 1st Further time to be given, until the end of the vear 1795, to subscribe the same to the loan proposed by die funding act, with liberty to the holders to subscribe the arrears of interest up to that period, separately from the principal, reserving that principal on its original footing. 2d. An appropriation to be made for payment of interest on so much of the principal (excepting loan-office certificates bearing interest on the nominal value) as at the end of the year 1795 shall remain unsubscribed for the term of one year, according to the rale or rates stipulated by the' original coutracts, and for the payment of leu per centum of the arrears of interest thereupon to the same end of the year 1795. This payment to be made on the 1st of January, 1796, at the Treasury, where no particular place of payment is stipulated, and at such place, where there is one. 3d. The specie principal of the loan-office certificates which bear interest on the nominal value, together with the arrears of interest, to be immediatel yy paid off. SECOND PROPOSITION. That provision be made for taking upon loan to the United States, by subscription at the Treasury, the outstanding and unbarred new emission >>1 s of credit; the sums subscribed to be paid in the principal only of those "ills, and the stock of the new loan to bear an interest of five per cent, per annum, payable quarter-yearly at the Treasury, and redeemable, at the pleasure of the United States, by payment of the principal; with a stipulation to pay the same at the expiration of thirty years. The loan to be 'leemed to commence on the 1st of January, 1796, and to rest on funds permanently pledged, namely, the permanent revenues. THIRD PROPOSITION. That provision be made for converting, by a new loan, the whole of our present foreign into domestic debt, upon these terms, to wit: that, for any J u r a subscribed to the new loan, and paid in the principal of the present loreign debt of the United States, there be allowed, in addition to the interest now payable upon such principal, the further year 1 ^interest of ^ per centum • °r> in lieu thereof, at the option of each subscriber, an equivalent sum in capital stock, bearing an interest of five per cent, per annum. That the whole interest upon the new loan, including that upon the capital stock to be given as an equivalent for the additional 1 per cent., shall remain fixed until the nrst day of January, 1818; at which time, and not sooner, the principal of le s^d new loan, including the said capital stock given as an equivalent, inay and shall be reimbursed, except as to such subscribers as may prefer a shorter term of reimbursement, who may elect any term not less than fifteen years. That the permanent revenues shall be and remain firmly pledged for tnc payment of the said interest, until the reimbursement of the said prinp a i d ( uarter A h ' i° l - y e a r l y ! ^ t h a t of the present funded domestic debt y Ulat wW i ' ^ commissioners of the sinking fund be empowered witn the approbation of the President, to provide, by new loans, for the reimbursement of any instalment or part of principal of the present foreign 174 REPORTS OF THE [1795. debt, or of the loan to be made thereupon as aforesaid, either by direct borrowing, or by sale in the market of certificates of stock, so as the said loan or the said certificates of stock shall bear an interest not exceeding six per centum per annum, uud shall be liable to reimbursement within a term not exceeding twsntj-fottr years. The interest upon the capital reimbursed, i and, in aid thereof, the permanent revenues, to be pledged for the interest upon the loans or stock to be made or created by virtue of the said power. FOURTH PROPOSITION. That the temporary duties on imports be made co-extensive in duration with those now permanent, and be appropriated in like manner; and that the reservation of $600,U00 annually, out of the duties on imports and tonnage, for the support of the Government of the United States and their coinftion defence, be postponed till after the appropriations for the interest oi the funded debt, foreign and domestic, and for the S I N K I N O F U N D . FIPTH PROPOSITION. That the following provisions be added to those heretofore made for reimbursing and redeeming the debt of the United States: 1st. To direct, by law, that so much of the surplus of the duties on imports and tonnage, t o the end of the year 1790, as shall remain u n i n v e s t e d in purchases on the first day of January, 1796, shall be so invested, one fourth part within the month of April, another fourth part within t h e m o n t h of July, another fourth part within the month f October, in that year, and the remainder within the month of January, 1797. 2d. To exonerate the F U N D established by the act entitled « An act supplementary to the act making provision for the debt of the United States," I passed the 8th May 1792, from the payment of the rate per annum which. ' by the 4th section of the act of the 12th of August, 1790 ent, led - An net making provis.on for the reduction of the public debt/' is reserved on a JP n n C , p u a n d V n t c r e s t o f l h e m o n c y s authorized by that act rr r SO W ^ ° T T r C h H S e S 0 f t h e d e b t ' c h n r " i n ? < he interest of the in- *eys so borrowed upon the revenue from imports Sncf tonnage 3d. i o appropriate to the SAMK F U N D much of the revenue from ima 0gether W an<£™T,F)t Ck S, al1 accrue l u\ Z ' Wl(/l he ! virtue0thrT U b monf V* ™ constituting the V <>/ the foregoimr provisions, * B V r i l h t h e ' n t r r , ' s t redeemed, to pay the y of ght annua,1 ITh Z A \ , " ** y paid on account of the princitwl of L t e r ^ o t f i x ^ e ^ r ^ P C*r a*n *, , *m * , a B n w * all bear a p r e s e n t Z T J ^ T ™ ? ' e l u d i n g that which shall s t a n d to H S,0, erS 0f t h e iVand to he er^it n ! ; o fund, and that which shall the?r f t n b, f h P * r t l c « l « States, on account of the balances reported in f r 8ett,in s Z t Z fcr°neTS ° ? a c c o u n t s between thTunited 5 T S until t h e Whole a «sitoSf nd thenceforth until the whole u n f u n d e d ^ a n d domestic, funded j f t0 th Bank o 7 t ° h e U n X ! a l ? 3 ^ t ? * ™ * ^ e n d s on the stock of the t^me to time i t ? ? ^ ^ to the United States, reserving, from tune to time, so much thereof as may be necessary to pay interest oh •that 1795.] SECRETARY OF THE TREASURY. 175 shall remain unpaid of the loan had of the said bank, pursuant to the 2d section of the act of incorporation, and also so much of the duties on imports | and tonnage as, together with those dividends, (deducting what maVbe necessary to pay interest,) shall be sufficient, from year to year, to pav off the instalments of the said loan hereafter to grow due, and as, (the said instalments being paid,) together with any other moneys which, on the 1st day of January, 1802, may belong to the said fund, not otherwise appropriated', shall be sufficient, from year to year, with the interest redeemed to pay the sums which may of right be annually paid on account of the principal of such funded stock as, at the expiration of the year 1800, shall begin to bear an interest of six per cent, per annum—excluding that which shall stand to the credit of the commissioners of the S I N K I N G F U N D , and that which shall stand to the credit of particular States on account of the balances reported in their favor by the commissioners for settling accounts between the United States and individual States; to continue so appropriated untii as well the last mentioned stock, as the instalments of the Joan aforesaid, shall be fully redeemed and discharged; and thenceforth until the whole residue of the present debt of the United States, foreign and domestic, funded and unfunded, shall be redeemed and discharged. oth. To continue the appropriation to the SAMK F U N D of the interest of the stock which shall be redeemed by virtue of the foregoing provisions, (when the full redemption in each case is completed,) until the W H O L E of the P R E S E N T D E B T of the United Slates, foreign and domestic, funded and unfunded, shall bo redeemed, by reimbursement, purchase, or otherwise. 6th. To provide for carrying to the SAME F U N D , agreeably to the appropriation iu the funding act, the proceeds of the sales of the lands of the United States in the Western Territory, to be applied according to the said appropriation. 7th. To appropriate to the S A M E F U N D , to be employed for the purposes thereof, all moneys which shall be received for debts due to the United States antecedent to the present constitution. 8th. To provide that the surpluses of all the current revenues of the United States, which shall remain at the end of any calendar year, beyond the amount of the appropriations charged upon them, and which, during the session of Congress commencing next thereafter, shall not be otherwise specially appropriated or reserved, shall be carried to the F U N D A F O R E S A I D . to be applied to the purposes thereof. 9th. To provide for paying annually, out of the S A I D F U N D , the sum which tnay be rightfully paid in each year towards the redemption of the funded stock, which does or shall bear an interest of six per centum per annum, excluding that which shall stand to the credit of the commissioners of the sinking fund, and that which shall stand to the credit of particular States, on account of the balances reported in their favor by the commissioners settling accounts between the United States and individual States, commencing the redemption of that bearing a present interest on the 1st of January, 1796, and of that to bear interest after the year 1800, on the 1st o* January, 1802; and pledging, in the firmest manner, the faith of the United states, to the creditors thereof, that the S A I D F U N D shall be inviolably applied to the purpose of redeeming the stock aforesaid, and afterwards to the redemption of the whole of the P R E S E N T D E B T of the United States, foreign and domestic, funded and unfunded, until the whole shall be fully redeemed 21 REPORTS OF "TIIE [1795. and discharged, and to be vested in the commissioners of the sinking fund, as property in trust for the creditors, until the redemption of the whole of the present debt of the United Slates shall be completed. Provided, always, that whenever THE KI ND shall be more than sufficient for paying off, as they accrue, the remaining instalments of the said loan had of the Bank of the United States, and for the complete and final redemption ot the whole of the aforesaid stock, bearing and to bear an interest of six per cent., according to the right reserved for that purpose, and also for the payment of the instalments of the present foreign debt, or of such new loans as may be made thereupon, pursuant to the third proposition, and for the reimbursement, purchase, or redemption of the residue of the present debt of the I nited States, within the term of thirty years, it shall be lawful for Congress, if at war with any foreign European power, to apply so much of the excess as they may think fit, the said excess being certified bv the COMMISS I O N E R S OF T H E S I N K I N G F U N D , towards the expenses OFsuch war; excepting always so much of the said excess as may be requisite to fulfil any contract which shall have been entered into by the commissioners of the sinkingiund, pursuant to the powers vested in them; and provided that no second appropriation of any such rare** shall derogate from the fund once reserved for the redemption or purchase of the said residue of the debt, within the said term of thirty years. 10th. To provide that all reimbursements of the capital of the public debt, foreigni and domestic, and of the remaining instalments of the aforesaid loan of the Bank of the United States, be made under the superintendence of the Z n Z T ' T ° i t h G , S l ? k , n ? fond, empowering them, with the approbao Z ' a ^ ? l d e n t ° f t , h e L n i t e d S t a t e s > as the instalments of principal bev T T ' li n e c e s s a r y< the sums requisite to pay those instaJL l t / f the ultimate term, for the reimbursement of any loan b e f f l n ^ e , shall not exceed twenty-four years ; the interest thereof to b u r s P ^ h u l T f i r e t ; t U p 0 V h e " 1 , e r e s t o f , h e instalments which shall be reimGX< pt t h e , n s t a , m ^ ? ™ t a of funded six per cent, stock; P rCVenUe f r o m ,mp rtS n n d t o n n a dc ficiency? ° ^'10 • ?ood " SIXTH PROPOSITION. J r l Z ^ t ^ 0 ' I * ™ m m i s s i 0 n e r s o f , h e inking fund, with the S T e c e s T r v in nnH? ? 1 ' * f r ° m t i m € t 0 sums as may not exceednur n nn' J P " ° f ^ r e V " m , e s W a n t e d for the purpose vear from the Z T n f ^ l T m } U ™t h Go f d o l , a r s > t 0 reimbursed within a «•» interest which shall 1 he interest upon each loan to be defrayed out of the permanent SEVENTH revenues- PROPOSITION. refined sugar, sales at auction, convevance o f L ^ ^ T spirits and wines, and carriages for the continued to the 1st day of January, 1SO0. and that t charged upon this fund ofdollars nnth S S L g t h ef e , o a en Mo ef s 1 E ^ *P of foreign intercourse, * 1795.] SECRETARY OF THE TREASURY. 177 X EIGHTH PROPOSITION. r I hat in regard lo any sum which shall have remained unexpended upon any appropriations other than for the payment of the interest of the funded debt, and for the purposes of the sinking fund, for more than two years after the end ol the calendar year in which the act of appropriation shall have been passed, such appropriation shall be deemed to cease and determine, and the sum unexpended upon it shall be carried to an account to be de nominated " T H E S U R P L U S FUND." But no appropriation shall be so deemed to have ccascd or determined til! after the year 1795, unless it shall appear to the Secretary of the Treasury that the'object of such appropriation has been fully satisfied; in which case, it shall be lawful for him to cause to be carried the unexpended residue thereof to the account aforesaid. NINTH PROPOSITION. That provision be made that all priorities heretofore established in the appropriations for the funded debt, as between the different parts of the said debt, shall, after the year 1796. cease, with respect to all creditors of the I nitcd States who do not, before the expiration of the period, signify their dissent therefrom; and that, thenceforth, with the exception only of the debts of those creditors who shall so signify their dissent, the revenues charged with these appropriations shall constitute a common or consolidated hind, chargeable indiscriminately and without priority. TENTH PROPOSITION. That provision be made for calling in all outstanding loan-office certificates, certificates called final settlements, and indents of interest, and for issuing, in lieu of them, other certificates of equivalent tenor; establishing 'hat all which shall not be presented for exchange within the term of two years shall be barred. Remarks upon the first proposition. The experiment has now been fully tried, and with nearly complete success, of the disposition of the public creditors to accept the terms offered by 'he funding act. Those who still decline have probably made a final election to abide by their original contracts. It remains to fulfil them. This, the moral obligation of the contracts, the and peremptory sanction given to them by the present Government, and the essential maxims of public credit, unite to demand; and, while these co gent motives, affecting intimately the permanent character and general interest of the United States, recommend the measure, there is now no longer an y momentary inducement from situation to procrastinate. The present advanced state of the national finances, and the inconsiderable Magnitude of the still unsubscribed debt, render it of little if any consequence to obtain upon it the temporary accommodation of deferring the payment °t a part of the interest accruing according to contract. This motive apart, and considering the approximation of the period when the payment of interest on the deferred debt is to commence, the chance of benefiting by a fall of the market rate of interest, incident to a provision for the debt on the terms of e con tract, which make it redeemable at pleasure, may be found more adVOL. I . — 1 2 178 [1795. REPORTS OF " T I I E vantageous to the Government than the partial postponement of interest encumbered with an abridgment of the right of redemption. To those who should not rightly appreciate this circumstance, it might seem an objection that the provision proposed would place those creditors who had not consented to accommodate the Government upon a better footing than those who had uo consented. But a scruple of this kind is overruled by several considerations. 1st. It is not improbable that a considerable proportion of those who may not have accepted the terms offered by the funding act, are executors and other trustees, who may have doubted their power to accept. 2d. Giving the fullest force to the fact which is the ground of the objection, it is one of those cases in which the general principles that constitute the permanent happiness of society give the less meritorious advantages over the more meritorious. All the creditors had a right to conform, or not. Those who have not done it have only used their right, and it cannot be matter of objection or prejudice to them. To delay indefinitely a provision for their claims, according to contract, is to annihilate the contract. The complying creditors cannot with propriety complain. They were informed unequivocally that the proposal of a new loan was referred to their free choice ; that the rights of those who did not assent would remain unimpaired ; and compensations were offered in the new contracts for the surrender of the old. A plea that an ultimate provision was not relied upon could not be admitted, because it would be to convert a distrust of the faith of the Government into an argument against its being observed towards those who had depended upon it. But the complying creditors actually received valuable considerations for the modification of their claims, instead of annual provision for thtir interest, which alone their contracts, as they stood previous to the funding act, required : they have had it secured by adequate funds permanently mortgaged for its payment. Instead of the stipulated annuity being redeemable at pleasure,*' henever a fall in the market rate of interest should render it advantageous to payoff the principal, it has acquired a more fixed character by the relinquishment of the right of the Government to redeem, except in certain proportions, and a capacity to increase in capital value, by a declcmion of the market rate of interest. Instead of receiving their interest in one payment at the end of a year, they receive it m quarter-yearly portions, which makes it, in fact. 6.15 per cent., jn lieu of the stipulated rate of six per ccntum On the first point it has been argued that, supposing a steady preservation of its faith by the Government, it is indifferent to the whether c r e d i t o r m o r t ^ e d fundi ^ h ™ S ° f 31121111111111 Provision, or upon that of This is to substitute theory to fact. As well with regard to a Government as to an individual, there is, in the nature of things, an intrinsic difference tetween the value of a debt bottomed on mortgaged funds, and that of a debt resting on what is called, in the one ease, and may be called in the other, personal security . The degree of this difference/and of the circumstances on which it depends, may be different m the two cases, but the reality of its existence can be denied in neither. Government, being administered by men, is naturally, like individuals, subject to particular impulses, passions, prejudices, vices-of course, to inconstancy of views and mutability of conduct s o m e 1795.] SECRETARY OF TIIE TREASURY. 179 t h i 1 r i n d f P r o P e r t > ' > o f which the essence is contract, must necessarily, therefore, be more or less valuable, because more or less secure, in proporthal mutability °r ^ ^ ^ influence of that ioronstiicjor IJ a provision is to be made by a new resolution every year, that resolu6 l ahvavs<«u«! W a y * ° 5 0 a f f e C l e d b y m o m c n t a r y circumstances, is If made one* for all, it continues, of course, unless revoked by some positive act, and has for that reason a moral certainty of stability Hut why, it might be asked, if a disposition unfhithful t6 the public engagements, or unfriendly to public credit, should exist, would it 1101 operate of one " C e * V '° U o n ° f a P r o v i s i o n as well as to prevent the making The two things are widely different. To undo, which is to act. and, in such a case, to act with violence, requires more enterprise and vigor, and presupposes greater energy, or a stronger impulse, than not to do, or to forbear to act. This is particularly true where a number of wills is to concur. Many men, who will not rouse to the effort, or encounter the responsibility ot doing; mischief by positive nets, will readily enough slide into it by a negative conduct—that is, by omitting to act. Manv men, merely from easiness of tem|>er, or want of active fortitude, will suffer evil to take place which tliey neither desire, nor would themselves commit. Iu collective bodies, rotes are necessary to ACTION ; absences may produce INACTION. It olt^n happens that a majority of voices could not be had to a resolution to undo or reverse a thing once done, which there would not be a majority of voices to do. This reasoning acquires tenfold force when applied to a complex Government like ours; that is, to a Government distributed into departments, acting through different organs, which must concur to give it motion; as, in our constitution, the House of R E P R E S E N T A T I V E S , the S E N A T E , and the P R E SIDENT. In delicate and difficult eases, whether to issue in good or ill, a suspension of action is far more natural to such a Government than action. It can hardly happen that all the branches or parts of it can be infected at one time with a common passion or disposition manifestly inimical to justice and the public good, as to prostrate the puhhc credit, by revoking a given to the creditors. It is far more probable that such a disposition should at one time possess one part, at another time another part. Possessing either part, it might be sufficient to obstruct a provision which was to be made. Without possessing all the parts, it could not subvert one which had been made. The last can scarcely be supposed, except in one of those extraordinary crises of nations which confound all ordinary calculations. Hence the value of property in public debt, which rests on specified and competent funds, firmly pledged for the satisfaction of the creditor, is intrinsically greater, and to a considerable extent, than that of property in public debt, which depends on annual provision. Hence, too, a creditor to whom s <ich a pledge was not stipulated, may be justly said to have received a compensation for the relinquishment of a portion of his interest. On the second point, it has been observed, with less plausibility, that in this country, where it would be to the advantage of the creditor to receive Jus principal rather than a rate of six per cent, interest, the abridgment of the right of redemption is of no value. 180 REPORTS OF T H E [1795. 1st. The proposition is not universally true. It depends on the particular situation of a creditor whether it be his interest to be reimbursed his principal or not. It is believed, owing to the impunctuality of collections, that in no part of the United States does fair lending at private interest, upon real security, nett six per cent. 2d. As far as it is true, it does not authorize the inference which is drawn; because the creditor cannot demand his principal when it suits him, but must wait till it is convenient to the Government to pay. This convenience might not exist till there was a fall in the market rate of interest, and then it would not be the interest of the creditor to receive.. Unable to exact the principal when he pleases, it is a material point gained to be able to arrest the hand of the Government from paying him. when it is his interest not to receive. It is evident, that whenever the rate of interest, to which he is entitled, shall exceed the market rate, if he cannot be obliged to receive back his principal, or take the market rate, his stock must rise in value, in proportion to the difference and the degree of its duration. Nor is an idea which has been entertained just, that this advantage is remote and contingent; to accrue only to those who may be holders at the time of the fall of interest, at the expense of those who were holders when the funding act passed ; many of whom, as it is alleged, being obliged to alienate then or shortly after, suffered loss in the sale from the postponement of a part of their interest, without benefiting by the supposed equiva lents. The fairness of an equivalent ought never to be tested by the necessities of particular individuals. It ought to be estimated by the general principles of value ; by the natural and real operation of things. Admitting, therefore, the suggestion as to such individuals to be true, it would decide nothing But it is not true. The permanency of a high rate of interest, and the possibility of a future rise of the capital above par, by a fall of the market rate below the stipulated rate, were, to the first holders of stock, circumstances of present value. Foreigners, especially, whose purchases would necessarily influence the market, would give higher prices for it on these accounts ' And when to this are added the funding of the new stock, and the payment of the interest quarter-yearly, there is solid ground for entertaining an opmion that the stock has, from the earliest period, borne a better price in the market than upon the principle of an annual payment of six per cent, on the whole capital depending upon an annual provision. This opinion would be confirmed, if we should take as a guide what actually happened in one or more of the State,, which made minual proI T ^ Z T P> ^V l rt h f m t e r e « U P° n t h e i r debts > <he stipulated rate of F u s i o n , the market price of the r stock rarely exceeded 33^ per centum. It is probable that greater confidence in the ability and constancy of X % ° o t t i r r i T n t r ° J thC l n i t e d S t a t o I-ve given a greater 3 wo^fd L v e l u f„ ^ S l t U a t i 0 n - B u t " 18 »ot to be doubted that it W % t h Z l f t " n great,uegm' a effect of that situation. " T * t0 t h e amount of unsubscribed and w,th ™n^l J * pr0V,ded the advantage of a confirmation of not h a v e T ^ ^ i f f c S S T i l to have been very apparent, if the whole debt had been provided for on this plan. 1795.] SECRETARY OF THE TREASURY. 181 These observations serve to render it probable that the creditors, who have accepted the terms offered by the Government, have not been injured by the acceptance ; that if they had now an option to change their ground lor that which is proposed for non-subscribers, it would be an ill-judged choice in them to do it; and that, upon these, as well as other accounts, they will have no cause to be dissatisfied with the proposal under consideration. Let it be added, that, whether the non-subscribers shall fare better or not by that proposal than the subscribers, it is the interest of all the public creditors, upou principle and precedent, that the public faith should be pre served towards those non-subscribers. But, at the same time, every consideration connected with the question urges that nothing more should be done for non-subscribers thau is positively due to good faith. Accordingly, the proposition contemplates that their debt shall not be funded, but that provision shall be annually made. With regard to arrears of interest, a tenth part only is proposed to be paid on the 1st of January, 1796. At this rate, they would be paid off in ten years. In stricUiess, they ought to be immediately discharged. But to have done this on the whole debt, would have been impracticable: to do it on what now remains unsubscribed, would not only be unequal, but would, at the present moment, obstruct arrangements which are conducive to the general interests of the creditors. The state of the Treasury in succeeding years will enable Congress to decidc how far the payment can be accelerated. In the mean time, the creditors have an option to separate these arrears from the principal, and to fund them at three per cent., as has been done generally with regard to interest. The case of a large arrear of interest, arising from the inability of a former Government, which is the present case, is liable to some peculiar considerations. A difference is made in the special case of the loan-office certificates, which by contract are entitled to interest of six per cent, on the nominal principal, redeemable only by payment of the specie principal. This is too disadvantageous a footing for the Government. The alternative most convenient at this time, is to pay off the debt, which is proposed. To elude this contract, would be to sacrifice a very great principle to a very little interest. The amount will be seen in the statement A. Remarks on the second proposition. The certificates, or bills of credit, called new emission money, were emitted pursuant to a resolution of Congress of the 18th of March, 1780, which directs them to be emitted u p o n the funds of individual States, to bear an interest of five per centum per annum, payable in specie at the redemption of the bills; or, at the election of the holder, annually, at the continental loan offices, in sterling bills drawn by the United States upon their commissioners in Europe, and pledges the faith of the United States for the payment of the said bills, in case any State on whose funds they should be emitted should, by the events of war, be rendered incapable to redeem them; directing, also, an endorsement to be made upon each bill in these , words: »The United States insure the payment of the within bill, and will draw bills of exchange for the interest annually, if demanded, according to a resolution of Congress of the 18th of March, 1780." REPORTS OF " T I I E 182 [1795. These resolutions, and the endorsement upon the bills, engage the absolute promise of the United States for the payment of the interest indefinitely, and their eventual guaranty of the principal, in case any State on whose funds the bills should be emitted should, by the events of war, be rendered incapable to redeem them: which is in effect, though not in form, an absolute guaranty of the principal; for the United States are bound to pay the interest perpetually till that is discharged. Good faith demands that the United States should supply the omissions of the States which issued the bills, by providing themselves at least for the interest upon them. But it is not as easy to pronounce on what terms they ought to be provided for. On their face, and according to the unrevoked resolutions of Congress, they are of spccie value eqaal to their nominal amount, and bearing five per cent, interest. But it is known that they were issued by different States, at different values, fixed by previous laics. The true nature of the contract, therefore, in fact, and the true equity of the case, are, from these circumstances, involved in some question. A compromise, by a new agreement, seems the best road out of the difficulty. This is the aim of the proposition, which, it is hoped, will, in the main, reasonably consult all interests. There have been special references of this subject to the Secretary, but he purposely declined a report til! the expiration of the term limited by the act entitled "An act relative to claims against the UnitpH Sinto. nm Wr«l Remarks on the third proposition. r tt l' , m i 01 i n 's Kind, and perhaps produce some coll* 1795.] SECRETARY OF THE TREASURY. 28 teral advantages. Under this idea an experiment is proposed. The proposed augmentation of interest is intended as an indemnification for the expense and hazard of agencies in this country, delays in remittance, inconvenience of distant negotiation, renunciation of the facilities which attend the receipt of interest at home, risks of loss by exchange, &c., and is calculated on a liberal scale, in order to induce an acceptance of the proposition. If, instead of an increase of interest, the option of an equivalent be given by way of premium, in stock bearing an interest of five per cent., it would have attractions for certain creditors, and would facilitate the success of the measure. On strict calculation, the equivalent would be G dollars and 58 cents per 100 dollars of the principal subscribed. It is not perceived that the interests of the United States could suffer by allowing the alternative. The fixing of the rate of interest, by postponing the reimbursement to the year 1818, would also be a powerful inducement. And till the period of reimbursement arrives, any surplus of the sinking fund which may exist can be invested in purchases, so as to prevent the progress of the fund being arrested. It could not be nccessary to observe, cxcept for the sake of dispelling jealousy or apprehension on the part of the creditors, that, while the plan is in experiment, and afterwards, with regard to all who do not embrace it, every thing is to proceed as heretofore, and as the contracts respecting the debt require. The auxiliary proposition of giving power to the commissioners of the sinking fund to remit certificates for sale, is founded upon a belief that this operation will sometimes be practicable, where direct loans cannot bo effected, and will be occasionally a more beneficial mode of remittance than by bills of exchange. Remark on the fourth proposition. The object of this proposition is to give moral certainty to the adequateness of the fund for paying the interest upon the debt, and for its ultimate redemption, making a reasonable allowance for the casualties to which it is exposed. Remarks on the fifth proposition. There is no sentiment which can better deserve the serious attention of the legislators of a country than the one expressed in the speech of the President, which indicates the danger to every Government from the progressive accumulation of debt. A tendency to it is, perhaps, the natural disease of all Governments; and it is not easy to conceivcany thing more hkely than this to lead to groat and convulsive revolutions of empire. On the one hand, the exigencies of a nation, creating new causes of expenditure, as well from its own as from the ambition, rapacity, injustice, intemperance, and folly of other nations, proceed in unceasing and rapid succession. Oa the other, there is a general propensity in those who administer the affairs of a Government, founded in the constitution of man, to shift off the burden from the present to a future day; a propensity which tnay be expected to b 3 strong in proportion as the form of a State is popular. To extinguish a debt which exists, and to avoid contracting more, are ideas always favored by public feeling and opinion; but to pay taxes for the one or the other purpose, which are the only means of avoiding the evil, is always, more or less, unpopular. These contradictions are in human nature; 184 REPORTS OF "TIIE [1795. and happy, indeed, would be the lot of a country that should ever want men ready to turn them to the account of their own popularity, or to some other sinister account. Hence, it is no uncommon spectacle to see the same men clamoring for occasions of expense, when they happen to be in unison with the r-re<ent humor of the community, whether well or ill directed, declaiming against a public debt, and for the reduction of it as an abstract thesis; yet vehement against every plan of taxation which is proposed to discharge old debts, or to avoid new, by defraying the expenses of exigencies as they emerge. These unhandsome arts throw artificial embarrassment in the way of the administrators of a Government; and, co operating with the desire which they themselves are too apt to feel to conciliate public favor, by declining to lay even necessary burdens, or with the fear of losing it, by imposing hem with firmness, serve to promote the accumulation of debt, br leaving that which exists without adequate provision for its reimbursement, and by preventing the levying, with energy, new taxes, when new occasions of expense occur. 1 he consequence is, that the public debt swells til! its ma?H h ! , r T m M e K 0 r m 0 U S - un , d t l 5 b u r d r n s o i , h c Peof le gradually increase o d ^ n T h ? becomes intolerable. Of such a stafi o f things, great disernmerit r ! a natural offspring. T " 1 e C O n ° f f i y : emulsions and revolutions of Government, are nat-;hnerrt^r° ?0rercred on the public agents of a WUh P r0V dcm ( o r s S n!i i , ' * W nnd inflexible peSvenmcc a S , I t T n , e atr r if ! , r i°tisni and genuine pilicy cannot, e States aTthe » ** b f e r d ™onstrated bv those of the United W a ' b k t „ E ,nJllKCtKreL , h a n y improving, efficaciously, .he very c X n t v tffe ^ n n ? , h P y 8 t a D d ^extinguishing, with reasonable s v S w ] n c l ™ ^ t i H thC C ° U n ^ ' a n d for l a W foundation of a p r S e n c e t K r X h n l B t " * f r ° m t h ae n d of the usual im* if possible, may g h . revenues h " " ilf i i declsio^and efficacy sess,0I1 fo o - ^reign affairs » impelled lo an exiension of the national d 10 ° <h" ^ . h a T a p p S o n 0 & ^ L d e p e n d o n , h 0 «<«W»l>n.ent of wfee principle, in beC nK a of lhe countiy ' ° P " ™ " ™ 1 Pre<*dem >" U l i,«*> SUbjecl o f , h c O i h o a t Z r r T u ^ t t T r ' ^ rnhhc deb., of the waxim i n S S S y S ' f l " " W ™ * * as a>,.4am*ntal of debt should a'/icov? be /.(v. " o d " " f l f " ' Stales, thai .he rrcatio" m , h n c (hat this is Ite vMmtf; 1 7 M"i "c n' , < d "" itdifficult V Z Z l {zr:'™* ' " '""i >w M Which lere m rtna to the » and i 1" ° " "V may be attempted by the lln M S.T™ ""," » nf "Jm"<l ™licirade that this measures f„ r ihe * It is understood that the Parli»r.,»«. r n mally adopted, a , a E n d i n g T V k t h e v ^ T * ? * ' * ™ h a s ' w , t h , n , h c four years, ^ o f e ^ n g u ^ n ^ L How much S Z ^ j f i t thc e c n , i o n of t,lis to the United State, than to a na'mn important principle * l^ b an h d ff sourees! Let , h e United States n e m ^ £ ?* ' * ^ ^ wort A ^ ' e , 0 pe Pet so provident a precaution « > hcreaiter, that they postponed too Ion? 1795.] SECRETARY OF THE TREASURY. 185 No opportunity has been lost by the Secretary, as far as he could contribute to the event, to reduce this principle to practice; and important steps towards it have been, from time to lime, taken by the Legislature. But much remains to be done to give it full effect. The present state of things encourages and invites to the consummation of the plan. And the Secretary, about to leave the office he holds, feels it a peculiar duty to make a final effort to promote that invaluable end. This is the object of the 5th proposition, aided by the preliminary provisions of the ith This proposition aims at two principal points: 1. To constitute a fund sufficient, in every supposable event, for extinguishing the whole of the present debt of the United States, foreign and domestic, in a period not exceeding thirty years. 2. To fix its destination unchangeably, by not only appropriating it permanently, under the direction of commissioners, and vesting it in them as properly in trust, but by making its faithful application a part of the contract with the creditors. As to the first point: If the temporary duties on imports be rendered permanent, the annual reservation of $600,000 postponed; and if the additional appropriations which are prcposed be made to the sinking fund, its intended force will not only be equal to the effect meant to be produced, but it may be hoped that there is scarcely a casualty which can reasonably be taken into calculation, foreign war not excepted, which will occasion a deficiency in the fund. The whole amount of the duties on imports and tonnage, and upon domestic distilled spirits and stills, estimated now to amount to $6,079,418 58, besides the dividends on bank stock, and the items which now compose the sinking fund, will then be appropriated, primarily, to the interest upon the public debt and to the sinking: fund; which, together, including the deferred stock, will demand, permanently, from that revenue, $4,373,836 03, little more than two thirds of the fund from which they arise. An expectation m^y be indulged that even foreign war, making due allowance for what will always be practicable through neutral powers, would not occasion a defalcation in the revenues greater than the difference. This competency °f the fund is an essential idea. The fulfilment of the object, as far as the Uncertainty of human affairs will permit, ought to be superior to casualty. The necessity of a reliance on auxiliary provisions, always precarious in 'hose situations which affect the productiveness of the public revenues, ought to be, as far as practicable, superseded by the ample nature of the provision. As to the second point: The intent is to secure, by all the sanctions of which the subject is susceptible, an inviolable application of the fund, accord,n g to its destination. No exptxlients more powerful can be devised for this purpose than to clothe it with the character of private property, and to engage absolutely the faith of the Government, by making tne application of 11 to the object a part of the contract with the creditors. But is this necessarv ? Its necessity rests on these cogent reasons : The inviolable application of an adequate sinking fund is the only practicable security against an excessive accumulation of debt, and the essential basis of a permanent national credit. Rxperience has shown, in countries the most attentive to the principles of eredit, that a simple appropriation of the sinking fund is not a complete barrier against its being diverted, when immediate exigencies press. The causes which have l>ecn stated with another view, tempt the administrators of Government to lay hold of this resource, rather than resort to new taxes. This 186 REPORTS OF T H E [1795. indicates the utility of endeavoring to give, by additional sanctions, inviolability to the fund. But will those proposed answer the end? They are the most efficacious that can be imagined, and they arc likely to be entirely efficacious. They cannot be disregarded without, by breach of faith and contract, destroying crcdit, and at a juncture, too, when it is most indispensable. The emergencies which induce a diversion of the fund are those in which loans, and, consequently, credit, are most needed. But will it be safe to put the fund so entirely out of the command of the Government ? May there not be situations in which the command of it may be requisite to the safety of the State ? This is not conceivable. The amount of the sinking fund will, in the situations which create extraordinary demands for money, be always inconsiderable, compared even with a single year's expenditure. The current revenues of a nation do not in such cases suffice. Plunder or crcdit must supply the deficiency. The first presupposes a subversion of all social order. The second will find its best support and greatest efficacy ill adhering steadily to the principles of such a fund. An annuitv of seven dollars will pay the interest upon and discharge a capital of one hundred dollars, tearing six per cent, interest, in thirty-three and a third years, nearly. The situation of a country must be not a little exhausted, if it cannot create yearly, by new revenues, during the continuance of a foreign war, an Annuity on the above scale sufficient to fund the loans of which it may stand in need. Ten millions of dollars will, with order and economy, maintain, in this country, an army of fifty thousand men for a year. Viewing our geographical position, is there a prospect of any war e x p e n s i v e beyond this ratio ? If not, an annuity of seven hundred thousand dollars, created each year of the war, would suffice. But it would be wise, in such an event, to carry taxation, 111 the first instance, to the full extent of the ability of the State, which would proportionably contract the necessity for borrowing, and consequently, the extent of the annuities necessary for loans. If a nation can find embarrassment in creating the revenues requisite 00 this scale it must arise from her having reached a stage when, from the neglect of the principle now inculcated, t h e mass of her debt h a s become so enormous as to strain her faculties in order to a provision for it. I he United States are in a situation altogether different An inspection ol the list of their revenues discovers that they have a lar^e field of resource unexplored. Their youth, and large tracts of unsettled land, and land in the infancy of improvement, assure them a great and rapid increase of nieaus. £ven their actual revenues, without additions, must, with the progress of the country, considerably increase. And though war niav interrupt, the ,nte r,, tion ; P k i n g removed by the restoration of r>cacc: their Pr0d,1CtlVCn i T ' sl,*I*nded for a time, must resume its vigorand g T h : r ! ! r g H ' e n / ' " m l b e r o f >~ears>a considerable augmentation is certaine n / h n l ™ '! r a e ° f t , i ; S C °I intr >' therefore, adopt, future PnnC,ple Which ± ' J**"* will ultimately furnish resources for future exigences, without an increase of burden to the comf e a r l e s s o f . J ^ X t i a t b i S \ T i d e a : lt wiU t * perceivcd that the fun* debt exisHn P a y i n g t K 7 n f e r C S t ' a n d inking the principal of n portion of tbf extingubh ^ debt*^11^ ' ^ * ^ ^ 1795.] SECRETARY OF THE TREASURY. 32 They will then be liberated, and will be ready for any future use, either | to defray current expenditures, or be the basis of new loans, as circumstances may dictate. And, after a course of time, it is a reasonable presumption that the funds so successively liberated will be adequate to new exigencies as they occur. Moreover, the last clause of the proposition authorizes the d e r i v i n g aid irom the sinking fund for new loans, whenever the state of the fund admits of it consistently with the accomplishment of its purj>oses ; that is, when it . Hi sufficient, 1st. To make good the payments on account of the principal ol the debt as they accrue; 2d. To purchase in the market all that part of the public debt of which there is no stipulation of payment by instalment, as the three per cent, stock,) within a period of thirty years. This, while it secures the extinction of the existing debt within a reasonable term, by preventing too great a proportion of the public revenue Irom l>eing tied up by the sinking fund, gives due weight to the consideration of providing for future emergencies. The same consideration has governed in proposing (instead of the appro; priation of a definite sum out of the revenue from imports and tonnage, which, in certain years, would be greater than will be permanently necessary) that the sum to be applied out of that revenue shall be so much, from year to year, as, with the other items of the sinking fund, will suffice for the object. It has, likewise, influenced in postponing the redemption of that stock which stands to the credit of certain States, in consequence of the report of the commissioners for settlement of accounts. Every system of public credit must assume it as a fundamental priuciple, that the resources of the country are equal to its probable exigencies; and 'hat it will possess ability to pay the debts which it contracts. If this be o, there is no cause to hesitate about the inviolable appropriation of funds to the extinction of an existing debt within no less a term than thirtv years. ° Indeed, as before intimated, it cannot be doubted that the resources of a credit, built upon a foundation so solid as that which is recommended, will Wore than replace, even in the earliest stages of our affairs, the use of the additional funds withdrawn from the command of the Government to efe °t it; and, in the eventual operation, will give a more abundant command °> hinds than it can otherwise have. The successive liberation of the revenues successively pledged, after accomplishing their object, will alTord resources that may almost be said to be inexhaustible. It should be recollected, too, that the public arrangements may, under a ?reat pressure, anticipate the approaching period of such a liberation, by "Uerrnediate temporary loans, to be replaced by those funds when they are free. This proposition exemplifies, as lo the past, the nature of the maxim •yhieh has been supposed capable of giving immortality to credit, namely: •at with the crcalion of debt should be incorporated the means of extinguishment ; which means are two fold : 1. The establishing, at the time °J contracting a debt, funds for the reimbursement of the principal, as fellas for the payment of interest, within a determinate period; 2. The a part of the contract, that the fund so established shall be invi. K »PPlied to tHe object. 1 b e l i e v e d that it would be happy for the United States if Congress v °uld adopt this principle as a rule in all future loans—never to be departed 188 [1795. REPORTS OF T H E from; and a good evidence of this determination will be to apply it to the P ast . , i This would be, at the same time, an antidote against what may be pronounced the most plausible objections to the system o { f u n d i n g public debts; which are, that, by facilitating the means of supporting expense, they encourage to enterprises which produce it; and by furnishing, in credit, a substitute for revenue, likely to be too freely used to avoid the odium of laying new taxes, they occasion a tendency to run in debt. Though these objections to funding systems, which, giving the greatest possible energy to public credit, are a great source of national security, strength, and prosperity, are very similar to those which speculative men urge against national and individual opulence drawn from its abuses ; and though, perhaps, upon a careful analysis of facts, they would be found to have much less support in them than is imagined, attributing to those systems effects which are to be ascribed more truly to the passions of men, and, perhaps, to the genius of particular Governments; yet, as they are not wholly unfounded, it is desirable to guard, as far as possible, against the dangers which they suppose, without renouncing the advantages which these systems undoubtedly afford. It will readily be seen that the maxim of making concurrent provision for the principal as well as interest, in the act of contracting debt, if, by precedent and habit, it can be rendered a RULE OF ADMINISTRATION, by implicating a greater portion of the revenue in every such operation than would be requisite for a mere provision for interest, will control proportionably the disposition to defer the burden to futurity, and create a greater necessity for circumspection in incurring expense. It is probably the true expedient, for uniting a due regard to the present accommodation of the community with a due care not to overburden posterity—the full energy of public credit with a salutary restraint upon the abuses of it. To this explanation of the general principles of the fifth proposition, it may be proper to add some brief notes on particular parts of it. It is proposed that the redemption of the present six per cent, stock shall commence on the 1st of January, 1796. This t i m e of c o m m e n c e m e n t is recommended by several reasons: 1. It ought to b e such as t o admit ot sufficient notice to distant creditors ; 2. It will favor order to date the com mencement of every new pecuniary operation, where there is an optionand no particular reason to the contrary, with the c o m m e n c e m e n t of the natural year ; 3. The moment of payment presupposes that the a n n u i t y to be paid has actually accrued, which will not be the case till the end of the present year ; 4. The small delay, by not forcing the means, will facilitate the future execution. It is a part of the plan to make provision for reimbursing the remaining instalments of the two million loan had of the Bank of the United States, pursuant to the act of incorporation. The preceding instalments have been reimbursed out of the proceeds of foreign loans. This resource cannot, £ future, be relied upon ; and, for such a purpose, it is not as e l i g i b l e as a domestic one, though circumstances have hitherto dictated a'recurrence to it By making the dividends on the stock auxiliary for this purpose to the reve line trom taxes, the object is effected with little more than sum fro* that revenue; and, m the end, a fund is formed from the dividends, whic1 wnth a small addition, suffices for the redemption of the deferred stock. these instalments are yearly falling due. and must be paid as they accrue i h a l f t h e 1795.] SECRETARY OF THE TREASURY. 189 it is essential that a provision for them be contemplated in the general arrangement requisite to the completion of our system of credit. There is I perhaps no easy alternative to what is proposed, except the sale of the stock; but, waiving other weighty considerations against such a measure, it is, in the view of a true economy, liable to the most solid objections. It is morally certain that the dividends on the stock will increase, and the value of the capital, from this and collateral causes, more than proportionally. There is no momentary urgency to induce the relinquishment of , this future advantage. To sell at present, would be to abandon the difference without necessity. It cannot be expedient in a Government to part with a capital which, at the time, produces as great or a greater reveuue than can be realized from the proceeds of a sale, however invested, and which has an inherent tendency to future augmentation. The measure, too, would be to renounce or lessen a most convenient resource for forming the redeeming fund of the deferred stock. It is proposed to carry the proceeds of the sales of the western lands to the sinking fund. This is to execute the intention of the funding act. which has not organized the mode of application; and it has the advantage of combining in one system all the provisions for extinguishing the debt. It is proposed that all surpluses of revenue shall, at a certain time, be carried to the use of the sinking fund. This is to extend and give effect to a principle which has already received the legislative sanction. It was necessary to fix a time when the appropriation of the surplus should become absolute, and that this should be consistent with a due opportunity to provide for the exigencies of the public service. Both these considerations have been consulted. This measure has, besides, reference to a more speedy redemption of the debt than it appears prudent to attempt by an absolute appropriation of more extensive funds: and the legislators of to-day would be entitled to the lasting gratitude of their country, if they would extend this auxiliary resource by all the means which are consistent with a due regard to the present accommodation of their constituents. It is proposed to authorize the commissioners of the sinking fund to provide, by new loans, for the reimbursement of the instalments which, from time to time, accrue. This is on the ground that it is essential to the perfection of the system of redemption, that all the means of ultimate execution should be organized in it, and that there should be no need of future provisions. The last clause of the proposition excepts from the operation of that clause the interest on the six per cent, stock. This is because that interest is destined to form the accumulations for paying the successive instalments of the principal of that stock, which increase each year in a ratio to the interest liberated by each payment. The statement E exhibits the course of the sinking fund, as proposed to be established. Remarks on the sixth proposition. This will be a useful and important provision. It has reference to a circumstance repeatedly adverted to—the long credits given upon the principal branches of revenue; from which it happens that though the fund itself, or the product of the revenue, is more than adequate to an appropriation, yet the receipts upon it come too slowly into the Treasury to answer the end, without anticipation by temporary loans. Its propriety depends on 190 REPORTS OF THE [1795. the principle, suggested under the hist head, of having all the means of complete execution organized in the system of public credit. Remarks on the seventh proposition. It is a good rule of caution, that no more of the public revenues should be rendered permanent than is necessary to give moral certainty to the provisions which may be regarded as the pillars of public credit. This idea will, it is believed, be satisfied by giving permanency to the now temporary duties on imports. Accordingly, it is only proposed to extend the duties mentioned in this proposition to the year 1S00, and thence to the end of the next ensuing session of Congress; which is on the ground that they ought to be commensurate in duration with the objects which they are to accomplish, and no more. It has been already noticed that they are at present chargeable, together with the temporary duties on imports laid 111 the last session, with an appropriation of $1,292,137 38, and with the interest of $1,000,000, authorized to be borrowed with a view to foreign intercourse, having a special eye to an object very interesting to the commerce and feelings ol the United States. This business wants a further arrangement—standing, nt present, upon a vague and inefficient footing. The reimbursement of the loan is not adequately provided for; neither is the interest—this being predicated on funds which, in their present form, would probably expire alter a product of two years. According to the fifth proposition, the temporary duties on imports, after the abovementioncd appropriation of $1,292,137 38 shall have been satisfied, will become permanently charged with the interest on the public debt, the sinking fund, and the annual reservation of $600,000 for the support of Government. If the duties mentioned in the sixth proposition are continued till the 1st of January, 1800, and the reimbursement of the principal of the loan, as well as the interest, is referred to them, two good purposes will be answered: the obtaining the loan will be facilitated, and its complete r e i m b u r s e m e n t will be effected within the term allotted, without an augmentation of the permanent debt of the country. This makes allowance for fulfilling the appropriation for the current service, already charged upon this fund. It is presumed to be a conclusive reason in favor of the proposition, that it aims at preventing an increase of permanent debt. If services of this kind, when the United States are at peace, (at least with civilized powers,) are made causes of permanent loans, the progress of new debt will easily exceed the extinction of old. It appears desirable that there should be a steady effort, as a rule of administration, not to increase the permanent debt of the country by permanent loans, except when it is inevitable by the existence of a war with some European power. The comparative view of revenue and expenditure (statement F) establishes, satisfactorily, that these duties cannot be dispensed with, unless there be a substitute, if the redemption of the public debt is to be seriiusly entered upon; and it is believed that there cannot be devised revenue more proper in themselves, nor more generally acceptable to the peopleWhatever interested parties may allege, it seems self-evident that there can hardly be a reasonable question, except as to the best mode of collection o b j e c t s o f 1795.] SECRETARY OF THE TREASURY. 191 The objection that jwrt of them falls on manufactures, has no weight. The manufactures on which they fall are complete luxuries, and completely established : consequently, fit objects of revenue. The increased duties on the rival foreign articles, are a full protection to the manufacture. Whatever may be the appearances in the infancy of the tax, it is certain, in principle, that it wilt finally fall on the consumer, as generally as duties on imported commodities. Remarks on the eighth proposition. This is to terminate an embarrassment which has been experienced. Appropriations are frequently made for objects, the extent of which is not precisely known, or in a degree casual. To leave them indefinite as to time, is sometimes to tie up, unnecessarily, a portion of the public funds, which may ultimately not be wanted at all for the purpose of the original appropriation. It will do away this inconvenience, and promote perspicuity in the Treasury accounts of appropriations, if an ultimate period is fixed when each appropriation shall he deemed to have ceased. Should further appropriations appear necessary for the same objects, new estimates can be presented, and new appropriations inade. The designating an account with a denomination known in the laws, to which the surpluses are to be carried, will facilitate future legislative dispositions of the resulting fund. It is, however, essential to the system of public credit, that this should be with the exceptions contained in the proposition. Remarks on the ninth proposition. This proposition is calculated to give simplicity to the public accounts of slock and revenue, which will conduce to correctness, despatch, and economy. As the revenues are manifestly more than adequate to the claims of all the creditors, none of them have any interest in the distinctions which now exist, and which grew out of the course of the business; and the rights of none of them will be alfectcd, because all who choose may continue on their former grouud, by signifying their dissent to the present plau. h is, however, presumed there will be no such dissent. Remarks on the tenth proposition. It is important to the fiscal calculations, to ascertain positively the exteut of every portion of the public debt. At present, the amount of these several items of it is deduced from accounts of the late war, of various officers and offices—in some instances conducted with little order. There is not, therefore, sufficient certainty. Indeed, it is probable, from the length of time which has elapsed without their appearing, that the computed amount exceeds the real. Besides, they are, from their nature, subject to forgeries and counterfeits, which implies a danger of loss to the public, till their circulation is finally terminated. The proposition, accordingly, besides the obtaining of better information, aims at obviating this danger. Allowing sufficient time for bringing them in to be exchanged for certificates of equivalent tenor; while it is a measure tending to public information and security, it can be liable to no reasonable objection on the part of the creditors. 192 REPORTS OF THE [1795. The Secretary of the Treasury has reserved, for the conclusion of this report, a proposition which appears to him of great importance to the public credit, aud which, after some preliminary observations, will be offered to consideration. It relates to the right of taxing the public funds, and to that of sequestering them in time of war. A proposition on either of those points would have been deemed superfluous, had there never been discussions asserting a right to do the one and the other, and even the expediency of exercising that right. The negative of both the pretensions, from the habit of regarding it as incapable of being disputed, had acquired, in the mind of the Secretary, so much the force of an axiom, as to have precluded even the mention of the subject in the plan which he originally submitted for funding the public debt. He should otherwise have thought it an indispensable duty to suggest, as a matter of primary consequence to the system of credit contemplated in the plan, the express renunciation of those pretensions; for they are (as he believes) not only unwarranted by principle or usage, but subversive of the sound maxims of public credit. A persuasion that this would always be a truth granted in the councils of the United States, is his apology for the omission. Even now, he should think it useless to depart from his silence on the point, had not the discussions alluded to created some alarm in places where all the circumstances are not well understood, which it is the interest of the country to dispel. The confidence justly to be reposed in the collective wisdom of this Government forbids the supposition, by one acquainted with its constitution, that the security of the creditor can need, in this particular, a further sanction. It is presumed to be impossible that any final act can ever give so deep a wound to the national interest and character, as to derogate from a principle which may be placed among the most sacred in the administration of a Government. Is there a right in the Government to tax its own funds? The pretence of this right is deduced from the general right of the legislative power to make all the property of the State contributory to its exigencies. But this right is obviously liable to be restricted by the engagements of the Government; it cannot be justly exercised in contravention of them; they must form an exception. It will not be denied that the general right in question could, and would, be abridged by an express promise not to tax the funds; this promise, indeed, has not been given in terms, but it has been given in substance. When an individual lends money to the State, the State stipulates to repay him the principal lent, with a certain interestor to pay a certain interest indefinitely, till the principal is r e i m b u r s e d ; or it stipulates something equivalent in another form. In our case, the stipulation is in the second form. To tax the funds, is manifestly either to take, or to keep back, a portion of the principal or interest stipulated to be paid. To do this, on whatever pretext, is not to do what is expressly promised; it is not to pay that precise principal, or that precise interest, which has been engaged to be paid; it is, therefore, to violate the 1promise given to the lender. But is not the stipulation to the lender with a tacit reservation of the general right of the Legtslature to raise contributions on the p r o p e r t y of the 1795.] SECRETARY OF T H E TREASURY. 193 This cannot lie supposed, because it involves two contradictory things: an obligation to do, and a right not to do; an obligation to pay a certain sum, and a right to retain it in the shape of a tax. It is against the rules, both of law and reason, to admit, by implication, in the construction of a contract, a principle which goes in destruction of it. The Government, by such a construction, would be made to say to the lender: "1 want a sum of money, for a national purpose, which all the citizens ought to contribute proportionablv; but it will be more convenient to them, and to mc, to borrow the money of you. If you will lend it, I promise you faithfully to allow you a certain rate of interest, while I keep the money, and to reimburse the principal within a determinate period, except much of the one and the other as I may think fit to withhold, in the shape of a tax." Is such a construction either natural or rational? Does it not, in fact, nullify the promise, by the reservation of a right not to perform it? Is it to be presumed, without being expressed, that such can be the understanding of a lender, when he parts with his money to a G o v e r n m e n t ? The contrary is so much the more presumable, that nothing short of an express reservation can support the pretension to tax the fund. It may be replied, that the creditor might be willing to rely upon the equity of the Government not to abuse its right by exacting from him excessive contributions. This, if true, docs not obviate the difficulty of supposing the co-existence of an obligation and a right, destructive the one of the other, in interpreting the sense of a contract, when nothing of the kind is said. It is possible that a creditor might be willing so to contract; yet it is still necessary, in order to determine that he has done it, tc find some provisions or expressions in the contract indicating the intention to render what is stipulated compatible with what is reserved. B.h * is not probable that an , } l e . would justly apindividual would be willing to lend upon such prehend that, in great emergencies, a right, lining no W but the option of the party possessed of the power, would «Vabu*>d, and that the convemence of laying hold of a fund already p r ^ r e d and at hand, supported by a claim of right, would be a temptation trapse, not easy to be? resisted. However well disposed to contribute, ir common with his fellow-citizens, on al the ordinary objects of property ™ome, he would be unwilling to subject himself to aspecial burden 1P /ne peculiar character of creditor of the State. He would prefer to e m p l o y s money in other ways; even to lend it to prim o r e ,lke, vate persons, where it r«g h l y t 0 e s c a P e t h e h a n d o f t h e fiscal Power. I<et the question tried by another analysis. Public debt e*n scarcely, in legal phrase, be defined either property m Possession or in action. It is evidently not the first, till it is reduced to possession by payment. T o be the second, would suppose a legal power to compel payment by suit. Does such a power exist ? The true definition of public debt is a property subsisting in the faith of the Government. Its essence is promise. Its definite value depends upon the reliance that the promise will he definitely fulfilled. Can the Government rightfully tax its promises ? Can it put its faith under contribution? Where or what is the value of the debt, if such a right exist ? Suppose the Government to contract with an individual to convey to him a hundred acres of land, upon the condition of paying a hundred dollars. VOL. I.—-13 194 REPORTS OF THE [1795. When he came to pay the hundred dollars and demand his title, could the Government require of him to pay fifty more as a tax upon the land, before it would consent to give him the title? Who would not pronounce this to be a breach of contract—a fraud—which nothing could disguise? This case is parallel with that under examination; with circumstances that fortify the right of the lending creditor. The Government agrees with him, that, for one hundred dollars, which he delivers to the Government, it will deliver to him, at the end of each year, six dollars. Here the six dollars to be delivered answer to the land to bt conveyed: with this stronger ground of right, that the consideration for them has actually been given and received. Vet, when the creditor comes to demand his six dollars, he is told that he cannot have them, except with the reservation of one dollar as a tax upon the six; or that he cannot have them, except upon the condition of returning one dollar as that tax. What is this but to say that his title to the money in this case, as to the land in the other, must depend upon his paying, or allowing, a further consideration for it, not contemplated in the contract? Can there be a doubt that this, also, would be a breach of contract—a fraud? The true rule of every case of property, founded on contract with the Government, is this: it must first be reduced into possession, and then it will become subject, in common with other similar property, to the right of the Government to raise contributions upon it. It may be said that the Govern ment may fulfil this principle, by paying the interest with one hand, and taking back the amount of the tax with the other. But to this the answer is. that, to comply truly with the rule, the tax must be upon all the money of the^community, net upon the particular portion of it which is paid to the public creditors; and h ought, besides, to be so regulated as not lo include a hen of the tax upon «,he fund. The creditor should lie no otherwise acted upon, than as every oihtr possessor of money ; and. consequently, the money he receives from the ? u W i c c a n t h e n o n l y l)e a f u s n L e c t c f taxation ; when it is entirely separated, thrown, undistinguished, into the common may. A different practice id a m o u n t t o a n evasion of the principle contended for, and to oppression. > r e n t ; o r a n n u l t y , l l a b l e before it passes, or m the act of passing, or at the ^ m e n t of f r o m o n e proprietorto another, to a deduction, or drawback ^ t h e p E l r * o f t h , p a r t y from whom it is to pass is an imaginary thing, destitu c 0 f shape and substance. e m e r S , n t contrflCl to ° with an individual, it deposes, as to the matter of the contract, its constitutional , u t h o r i t v a n d e X c h a n g e s the character of legislator for that of a moral a g e n t 3 f t ^ S rirf* and obligations as an individual. Its promises may l^iustlv cmiTideml as excepted out of its power to legislate, unless in aid of th Mn i t l s m theorv, impossible to reconcile the two ideas of a promise which oUUr*. with a p w « to make a law which can vary the effect of it. This is the e T e a t principle that governs the question, and abridges the general r i g h t o f t h e G o v e r n m e n t to lay taxes, excepting out of it a species of property which subsists only io r 3 its promise. There are persons who, admitting the general rule, conceive a distinction to exist between a tax upon the funds, which must be paid at all e v e n t s , and a tax upon alienations of them, which will only be paid when they are transferred from one to another. The latter they think justifiable, because it * * the option of the creditor to avoid the tax, by avoiding the alienation. But the difference between the two cases is only a difference in die degree of ^ 1795.] SECRETARY OF THE TREASURY. 195 The stock, in its creation, is made transferable. This quality constitutes a material part of its value, and the existence of it is a part of the contract with the Government, which has undertaken, itself, to conduct the operation of transferring by its own officers, and consequently at its own expense. It is as completely a breach of contract to derogate from this quality, in diminution of the value of stock, by encumbering the transfer with a charge or tax, as it is to take back, in the same shape, a portion of the principal or interest. It is obvious, too, that this may be carried so far as essentially to destroy the transferable capacity. But what is a tax upon transfers, other than the faculty of taking away from the actual proprietor of stock a portion of his principal, whenever his "interests or his necessities demand a transfer, in derogation from the full enjoyment of the right to transfer, and from the express promise of the Government to pay to him or his alienee? for it is upon the seller, not upon the buyer, that such a tax wall fall. And where is the substantial difference, on the ground of contract, between this and a direct tax upon the fund itself? The value of it is as certainly impaired by the one as by the other. But shall the proprietor of money in the funds, then, be exempt from his proportion of the burdens which other citizens bear? This will not be the consequence of the principle. As a consumer, of which his income is the instrument, he will pay his proportion of the taxes on consumption. As a holder of any other species of property procured by that income, or otherwise, which is liable to a tax, he must also contribute his proportion. But, without undue refinement, the lender of money to the public may be affirmed to have paid his tax when he lends his money. Relying upon the engagement of the Government express or implied, that he will receive what is promised him, without defalcation, he is content with a less interest than he would take if subject to any such defalcation, and especially if it was to be arbitrary as to its extent In this lower rate of interest he may be truly said to pay his tax, or to purchase an exemption from it. ,. Here, also, we find what is decisive on the point of expediency. If the Government had a right to tax its funds, the exercise of that right would cost much more than it was worth. The money-lender would exact exorbitant premiums, not only as an indemnification for the use which the Government might probably make of its right, and which, in practice, would be likely to be qualified by 'some regard to e q u a l i t y of contribution, but as an equivalent for insurance against the risk or possibility of a more extensive use. Hence the Government would be likely to pay much more in Premiums upon its loans, than it would draw back inL taxes; and the former being supposed but equal to the latter, there would be no advantage in e Xut n wiUbI! g wrhap«, more safe to affirm that there would be no torrowiug at all t i p such terms. The first precedent of a tax upon the funds might be expected to compel the Government to an express renunciation o f l h e right m every future loan. Solid capitalists would not be much inclined to adventure their money upon so precarious a footing as is implied in a power of taxing their credits. These reflections lead readily to an estimate of the impressions which would be produced by the example of an imposition on the funds. Keprded either as a positive breach of contract, or as a deviation from the sound max 196 REPORTS OF THE [1795. ims of credit, the effect upon it would be nearly equally fatal. \ \ hatever misht be excused to a time of revolution, to a defect of means, or to some extraordinary peculiarity of situation, no excuse would be admitted for a deliberate departure from principles—at a time, too, of national prosperity, in a flourishing state of the finances, after the foundations of a regular system had been laid. The departure would argue an incorrectness, an instability, or a depravity of views, calculated to give a lasting- shock to public credit. The United States must henceforth tread with the most cautious steps. A renunciation of the right, in future, might not speedily heal the wound which an example of its exercise had given. Durable suspicions might fasten on the wisdom or the integrity of the Government, which might occasion to it no inconsiderable loss and embarrassment, before a course of contrary experience would obliterate them. The right of a Government to sequester or confiscate property, in its funds, in time of war, involves considerations analogous to those which regard the right of taxing them. Whether the foreigner be, himself, the original lender, or the proprietor of stock, in its constitution transferable without discrimination, he stands upon equal ground with the citizen. He has an equal claim upon the faith of the Government. In the second case : as the substitute of the original lender, the promise made attaches immediately upon him. Indeed, the certificates which issue upon every transfer, and which may be called the public bonds, designate him as the creditor, and expressly invest him with the correspondent rights. To sequester or confiscate the stock, is as effectually a breach of the contract to pay, as to absorb it by a tax. It is to annihilate the promise, under the sanction of which the foreigner became a proprietor. But, does not the general right of war, to seize and confiscate enemy property, extend to the property of the citizens of one nation in the funds of another—the two nations being at war with each other ? Resorting to principle as the guide, this question may, on solid grounds, be answered in the negative. The right to seize and confiscate individual property, in national wars, excludes all those cases where the individual derives his title from the enemy sovereign or nation; for the right to property always implies the right to be protected and secured in the enjoyment of that property : and a nation, by the very act of permitting the citizen of a foreign country to acquire property within its territory, whether to lands, funds, or to any other thingtacitly engages to give protection and security to that property, and to allow him as full eujoyment of it as any other proprietor; an engacrement which no state of things between the two nations can justly or reasonably affectThough politically right, that, in wars between nations, the property of private persons, which depend on the laws of their own country, or on circumstances foreign to the nation with which their own is at war, should be subject to seizure and confiscation by the enemy nation; yet it is both politically and morally wrong that this should extend to property acquired under the faith of the Government and the laws of that enemy nation. \ \ hen the Government enters into a contract with the citizen of a foreign country, it considers him as an individual in a state of nature, and contracts with him as such. It does not contract with him as the member "J another society. The contracts, therefore, with him, cannot be affected by his political relations to that society. War, whatever right it may give over his other prop 1795.] SECRETARY OF THE TREASURY. 197 erty, can give none over that which he derives from those contracts. The character in which they are made with him, the faith pledged to him personally, virtually exempt it. This principle, which seems critically correct, would exempt as well the income as the capital of the property. It protects the use as effectually as the thing. What, in fact, is property but a fiction, without the beneficial use of it? In many cases, indeed, the income or annuity is the property itself. And though general usage may control the principle, it can only be as far as the usage clearly goes. It must not be extended by analogy. Some of the most approved publicists, admitting the principle, qualify it with regard to the income of lands, which they say may be sequestered "to hinder the remittance of it to the enemy's country." But the same authority affirms, that a state of war "does not so much as touch the sums which it owes to the enemy. Every where, in case of a war, funds credited to the public are exempt from confiscation and seizure These expressions clearly exclude sequestration as well as confiscation. The former, no less than the latter, would be inconsistent with the declarations that a State at war does not so much as touch the sums which it owes to the enemy, and that funds credited to the public are exempt from seizure. And, on full inquiry, it is believed that the suggestion thus understood is founded in fact. Usage, then, however it may deviate in other particulars in respect to public funds, concurs with principle in pronouncing that they cannot rightfully be sequestered in time of war. The usages of war still savor too mtiQh of the ferocious maxims of the times when war was the chief occupation of man. Eulightened reason would never have pronounced that the persons or property of foreigners found in a country at the breaking out of a war between that country and his own, were liable to any of the rigors which a state of war authorizes against the persons and goods of an enemy. It would have decreed to them an inviolable sanctuary in the faith of those permissions and those laws, by which themselves and their property had come under the jurisdiction where they were found. It would have rejected the treachery of converting the indulgences, and even rights, of a previous state of amity, into snares for innocent individuals. Happily, however, the practice of latter times has left several of those maxims little more than points of obsolete doctrine. They still retain their rank in theory ; but usage has introduced so many qualifications, as nearly to destroy their operation. This appears from the acknowledgment of writers, from the barrenness of modern history in examples of the application of those doctrines, from the opinions known to be generally current in Europe, and from a variety of articles which are constant formulas in the treaties of the present century. The United States are every wav interested in the mitigation of the rigor of the ancient maxims of war. They cannot better demonstate their wisdom, than by their moderation in this respect. Particularly interested in maintaining, in their greatest purity and energy, the principles of credit, they cannot too strictly adhere to all the relaxations of those maxims which favor the rights of creditors. No temporary advantage can compensate for the evils of a different course of conduct. Credit, public and private, is of the greatest consequence to every country. Of this it might be emphatically called the invigorating principle. No well 198 x REPORTS OF THE [1795. informed man can cast a retrospective eye over the progress of the United States, from their infancy to the present period, without being convinced j that they owe, in a great degree, to the fostering influence of credit, their present mature growth. This credit has been ot a mixed nature, mercantile and public, foreign and domestic. Credit abroad was the trunk of our mercantile credit, from which issued ramifications that nourished all the parts of domestic labor and industry. The bills of credit emitted from time to time by the different local Governments, which passed current as money, cooperated with that resource. Their united force, quickening the energies 1 and bringing into action the capacities for improvement of a new country, was highly instrumental in accelerating its growth. Credit, too, animated and supported by Hie general zeal, had a great share in accomplishing, without such violent expedients as, generatinguniversal distress, would have endangered the issue, that revolution of which we are so justly proud, and to which we are so greatly indebted. Credit, likewise, may no doubt claim a principal agency in that increase of national and individual welfare since the establishment of the present Government which is so generally felt and acknowledged, though the true causes of it are not as generally understood. It is the constant auxiliary of almost every public operation; has been an indispensable one in those measures by which our frontiers have been defended; and it would not be difficult to demonstrate that, in a recent and delicate instance, it has materially contributed to the safety of the State. i There can be no time, no state of things, in which credit is not essential to a nation, especially as long as nations in general continue to use it as a resource in war. It is impossible for a country to contend on equal terms, or to be secure against the enterprises of other nations, without being able equally with them to avail itself of this important resource; and to a young country, with moderate pecuniary capital, and not a very various industry, it is still more necessary than to countries more advanced in both: a truth not less weighty for being obvious and frequently noticed. Public credit has been well defined to be "a faculty to borrow a t pleasure considerable sums on moderate terms; the art of distributing over a succession of years the extraordinary efforts found indispensable inone; a mean of accelerating the prompt employment of all the abilities of a nation, and even of disposing of a part of the overplus of others." This just and ingenious definition condenses to a point the principal arguments in favor of public credit, and displays its immense importance. Let any man consult the actual course of our pecuniary operations; and .et him then say whether credit be not eminently useful. Let him imagine the expense of a single campaign in a war will, » n-r^f v nnwer; distress and oppression which the attempt would occasion to the community. He cannot but conclude that war, without credit, would be more than a great calamity—would be rum. 4 But cred'* ; » • f e t it is among t h e v e m e n t . 0 As a s u b s t i l agrij n culture, mil 1795.] SECRETARY OF THE TREASURY. 199 The proof of this needs no labored deduction. It is matter of daily experience in the most familiar pursuits. One man wishes 10 take up and cultivate a piece of land ; he purchases upon credit, and, in time, pays the purchase money out of the produce of the soil improved by his labor. Another sets up in trade; in the credit founded upon a fair character, he seeks, and often finds, the means of becoming at length a wealthy merchant. A third commences business as a manufacturer or mechanic, with skill, but without money. It is by credit that he is enabled to procure the tools, the materials, and even the subsistence of which he stands in need, until his industry has supplied him with capital; and even then he derives from an established and increased credit the means of extending his undertakings. Among the circumstances which recommend credit, and indicate its importance in the whole system of internal exertion and amelioration, it is impossible to pass unnoticed its unquestionable tendency to moderate the rate of interest—a circumstance of infinite value in all the operations of labor and industry. If the individual capital of this country has become more adequate to its exigencies than formerly, it is because individuals have found new resources in the public credit—in the funds to which that has given value and activity. Let public credit be prostrated, and the deficiency "will be greater than before. Public and private credit are closely allied, if not inseparable. There is perhaps no example of the one being in a flourishing, where the other was in a bad state. A shock to public credit would, therefore, not only take away the additional means which it has furnished, but. by the derangements disorders, distrusts, and false principles, which it would engender an l disseminate, would diminish the antecedent resources of private credit. The United States possess an immense mass of improvable matter ; the development of it, continually making, may be said to enlarge the field of improvement as it progresses; and though the active capital of the country has, no doubt, considerably increased, it is probable that it does not bear at present a much greater proportion to the objects of employment than it has done at any former period. Credit, upon this hypothesis, of every kind, is nearly as necessary to us now as it ever was. But at least it may be affirmed with absolute certainty, that, to a country so situated, credit is peculiarly useful and important. If the United States observe with delicate caution the maxims of credit, as well towards foreigners as their own citizens, in connexion with the general principles of an upright, stable, and systematic administration, the strong attractions which they present to foreign capital will be likely to insure them the command of as much as they may want, in addition to their own, for every species of internal amelioration. Can it be doubted that they would derive from this, in a course of time, advantages incomparably greater than any, however tempting, that could partially"result from a d i s r e g a r d of those maxims, or from t h e exercise of a questionable right, which should even appear to derogate from them ? Credit is an entire thing ; every part of it has the nicest sympathy with every other part: wound one limb, and the whole tree shrinks and decays. The security of each creditor is inseparable from the security of all creditors. The boundary between foreigner and citizen would not be deemed a sufficient barrier against extending the precedent of an invasion of the rights of the former to the latter. The most judicious and cautious would be most apt to reason thus, and would only look for stronger shades of apparent ne 200 REPORTS OF THE [1795. cessity or expediency to govern the extension. And, in affairs of credit, the opinion of the judicious and cautious may be expected to prevail. Hence the Government, by sequestering the property of foreign citizens in the public funds at the commencement of a war, wou ld impair, at least, if not destroy, that credit which is the best resource iu war. It is in vain to attempt to disparage credit, by objecting to it its abuses. What is there not liable to abuse or misuse ? The precious metals, those great springs of labor and industry, are also the ministers of extravagance, luxury, and corruption. Commerce, the nurse of agriculture and manufactures, if overdriven, leads to bankruptcy and distress. A fertile soil, the principal source of human comfort, not unfrequently begets indolence and effeminacy. Even liberty itself, degenerating into licentiousness, produces a frightful complication of ills, and works its own destruction. It is wisdom, in every case, tocherish whateveris useful, and guard against its abuse. It will be the truest policy of the United States to give all possible energy to public credit, by a firm adherence to its strictest maxims; and yet to avoid the ills of an excessive employment of it, by true economy and system in the public expenditures, by steadily cultivating peace, and byusing sincere, efficient, and persevering endeavors to diminish present debts, prevent the accumulation of new, and secure the discharge, within a reasonable period, of such as it may be at any time matter of necessity to contract. It will be wise to cultivate and foster private credit, by an exemplary observance of the principles of public credit : and to guard against the misuse of the former, by a speedy and vigorous administration of justice, and by taking away every temptation to mn in debt, founded in the hope of evading the just claims of creditors. As an honorable evidence of this disposition, and with a view to quiet the alarms which have been excited, and to silence forever a question which can never be agitated without serious inconvenience, the Secretary of the Treasury, in the last place, respectfully submits: That there be an express renunciation, by law, of all pretension of right to tax the public funds, or to sequester, at any time, or on any pretext, the property which foreign citizens may hold therein. ' This will be particularly essential to the success of the plan for converting the foreign into domestic debt; as the present contracts for the Amsterdam and Antwerp debt contain an equivalent stipulation, and there is no prospect that the creditors would consent to a change, but upon the condition of a like stipulation. In the commencement of this report, it was the intention to submit some propositions for the improvement of the several branches of the public revenue ; but it is deemed advisable to reserve this part of the subject for a future communication. All which is respectfully submitted. ALEXANDER HAMILTON, rr Secretary of the TreasuryIREASURY DEPARTMENT, January 21. 1795. ST A TEMENT Amount of principal of unfunded debt. Funded domestic debt, exclusive of balances doe to creditor States, and the amount of said stock which has been purchased or redeemed on the last day of December, 1791 Funded domestic debt, to the credit of States, in pursuance of the act of Congress of May 3lst, 1791 Funded domestic debt, purchased and redeemed to the last of December, 1794 - Dolls. Cts. _ Total of funded domestic debt Funded assumed debt, exclusive of what had been purchased or redeemed on the last day of December, 1794 Funded assumed debt, which had been purchased or redeemed on the last day of December, 1794 Total of funded assumed debt Total of funded domestic debt on the last day of December, 1794 Debt due to foreign officers, for the payment of which, provision has been made, an 1 which will pass to the credit of the sinking fund: principal being . . . . #186,988 23 intercut from Jan. 1, 1788 to Dec. 3, 1790 2-2,438 58 Registered debt on the books of the Treasury, on which dividends have been made - o Jtl of the domestic debt of the United States on December 31*/, 1794. Six per cent, stock. Dolls. Os. Deferred stock. Three per cent, stock. Dolls. Cts. Dolls, as. 05 H O Doits, as. 23 H > H 17,912,138 01 8,538,228 97 12,275,347 55 38,725,714 53 Kj 2,315,056 00 1,172,528 00 703,516 80 4,221,100 90 O 668,700 38 752,190 61 415,415 66 1,836,306 68 ^ S3 S3 j 20,925,894 39 10,462,917 61 13,39-1,280 01 7,908,374 19 3,940,608 % 5,994,115 70 17,843,098 85 g 212,462 01 119,808 88 96,444 97 428,715 89 j-J 8,120,836 23 4,060,417 84 6,090,560 67 29,0-16,730 62 14,523,365 45 19,484,810 68 63,054,936 75 22,438 58 209,426 81 30,806 95 198,623 30 186,988 23 167,816 40 Total amount. 111,877 60 55,938 80 U3 a g S T A T E M E N T A—Continued. Amount of principal of unfunded debt. Dolls. Cls. Registered debt on which no dividends have been made Registered debt on books of loan officers . . . . Credit on the books of the Treasury . . . . . Loan-office certificates, bearing interest on a capital of 43,500 dollars, the specie value being no more than . . . . Loan-office certificates, bearing interest on the specie value Final settlement certificates, payable to bearer, of all kinds Indents of interest of all kinds . . . . . Unliquidated claims, as estimated . . . . . 27,935 305,859 126,091 83,805 381,269 00 51 00 00 00 Estimated amount of the domestic debt at the close of 1791, and of the stock which will be produced when the whole debt has been funded - 1,184,323 40 COMPTROLLERS OFFICE, January 9, 49,231 69 4,391 85 44,920 95 Six per cent. stock. Dolls. Cls. Deferred stock. T h r e e per cent, stock. Dolls. Cls. 28,154 46 2,929 90 29,947 30 14,077 23 1,464 95 14,973 65 18,623 34 203,906 34 8-1,060 67 9,311 66 101,953 17 42,030 33 2547179 34 127^089 66 29,967,397 80 14,890,204 90 Dolls. Cls. 17,737 31 3,039 35 11,925 61 7,830 55,051 33,696 83,805 2538,761 00 71 38 00 40 19,967,936 00 T o t a l amount. Dolls. Cls. 59,969 00 6,434 20 56,846 59 35,765 360,914 148,787 83,805 610,030 00 '22 38 00 40 64,825,538 70 1795. OLIVER WOLCOTT, Jr., Comptroller. « Of B. Dr. so Cr. The Government of France in account current of principal with the United States. Litres. Epoch of September 3d, 17J1. T o balance due the United Slates at the close of the year 1793, exceeding the interest and instalments then due . . . . . . 9,109,974 T o payments made at the Treasury to May 15, viz: April 9 $350 May 15 SO,000 119,191 820,350, o 18.15 T o payments at the Treasury on May 90 3c J u n e 4, v i z : May 90 8699 81 June 4 50,970 00 990,401 $50,899 81 a 18.15 T o payments at the T r e a s u r y from Sept. 3, to Oct. 30, 1<94, at interest from Sept. 3, when the whole sum was subject to the order of the French Minister, 8979,950 a 18.15 1,500,000 S. 4,009, 197 18 D. 9 4 9 3 1 0 0 5 5 0 C Epoch of November 4th, 1794. T o balance due to the United States on Sept. 3, 1794, 9,199,091 brought down T o payments at the Treasury from Nov. 4. to 13th, 1794, to be at interest from N o r . 4, when the whole sum was subject to the order of the French Minister 8181,500 a 18.15 1,000,000 3,199,091 S. 4,002,497 Epoch of November 4Ih, 1794. By the eighth instalment, due on Nov. 4, 1794, of the 1,000,000 loan of ten millions By account of interest: for a balancc of interest due on the 4th of Nov. on the remaining part of the 109,751 loan of ten millions • ' Balance due to the United Slates on Nov. 4, 1794, arising from payments exceeding the interest and 9,090,339 instalments then demandable by France 3,199,091 0 0 0 6 Epoch of December 31 st, 1794 T o balance due to the United States on Nov. 4, 1794, 9,096,339 brought down - 4 o balance due to the United States on Dec. 31, 1794, Digitized Tfor FRASER 1,811,959 brought down ; 7 Livret. EpoeA of Septe mber 24, 1751. By the eighth instalment, due on Sept. 3, 1794, of the loan of eighteen millions . . . . 1,500,000 By account of interest: for a balance of interest due on the 3d of Sept. on the remaining part of the 303,400 loan of eighteen millions Balance due to the United States on Sept. 3, 1794, arising from payments exceeding the interest and instalments demandable by France lo that period • 9,199,091 6 10 D. 0 0 4 11 0 6 6 5 0 0 16 0 4 6 0 6 16 8 7 10 4 6 Epoch of December 31a/, 1794. By account ol interest: for a balance of interest due on the 31st of Dec. on the remaining part of the 981,379 loan of six millions Balance due to the United States on Dec. 31, 1794, arising from payments exceeding the interest and instalments demandable by France to that period - 1,811,959 9,096,339 Dr. The Government of France in account current of interest with the United States. Epoch, of September 3d, 1794. T o interest on the balance due to the United States at the close of the year 1793, being 3,109,974 livres 18 sous and 2 deniers, from J a n u a r y 1, 1794, to September 3, following, is eight months and two days, at 4.706 per cent, per annum, being an average of the interest payable on the F r e n c h loans when obtained T o interest on 112,121 livres 4 sous 2 deniers, being payments at the T r e a s u r y to M a y 15, 1794: from M a y 15, to September 3, is 3 months and 18 days, at 4.706 per cent, p e r a n n u m . . . . . T o interest on 280,401 livres 3 sous 1 denier, being payments at the T r e a s u r y on Mnv 90, and J u n e 4, 1794: from J u n e 4, to September 3, is 2 months and 29 days, at 4.706 per cent, per a n n u m T o account of principal for the balance of this arct. - Epoch of Nwrmber 4/A, 1794. T o interest on the balance of principal due to the United States on September 3d, 1794, being 2,199,091 livres 0 sous 6 deniers, from September 3, to Nor vember 4, 1794, is 2 months, at 4.706 p e r cent, per an. T o account of principal for balance of this account - Epoch of December 1794. T o interest on the balance of principal d o e to the United States, on November 4th 1794, being 2,096,339 livres 1 nous 6 deniers, f r o m November 4, to Dec. 31, 1794, is I month and 27 days, at 4.706 per cent, per an. T o account of principal for balance of this account • Livres. & D. 66,748 11 6 1,582 18 5 3,262 303,406 5 4 2 11 375,000 0 0 17,248 102,751 4 16 0 0 120,000 0 0 Epoch of September 1791. By interest due on September 2d, 1794, on 7,500,000, remaining of the loan of 18,000,000, at 5 per cent, per a n n u m . . . . . . Epoch of November 4/A, 1794. By interest due on November 4th, 1794, on 3,000,000, remaining to that period, of the loan of 10,000,000, at 4 per cent, per a n n u m . . . . 3 16 i 300,000 O 0 Livres. S. D. 375,000 0 0 120,000 0 o 0 0 ———————— Epoch of December 3 I d , 1794. By interest due tm December 31, 1794, on the loan of 6,000,000, at 5 per cent, per a n n u m • 15,f»-X) 284,379 Cr. 300,000 - RESULT DR. ON JANUARY 1, 1795. >J> at The Government of France in account currcnt with the United Stales, on January 1, 1795. Livrts. T o balance due to the United States on January 1, 1795, arising from payments exceeding the interest and instalments demandable by France to that period . . . . . . Balance doe to the French Government on January I, 1795, exclusive of interest oo loans, per credit By four instalments, of 1,500,000 livres each,on the loan of 18,000,000, which will be due on the 2d of September, in the years 1795, 1796, 1797. and 1798, W a r i n g interest from September 3,1794, at . . . . 5 per cent, per annum By two instalments, of 1,000,000 livres each, on the loan of 10,000.000, which will be doe on the 1th of November, in tne years 1795 and 1796, bearing interest from the 4th of November, 1794, at 4 per cent, per annum By six instalments, of 1,000,000 livres each, on the loan of 6,000,000, which will be due in the years 1797, 1798, 1799, 1800, 1801, and 1802, bearing interest from January 1, 1795, at 5 per cent, per annum . . . . . . 19, 188,040 14,000,000 Ltvres. D. 1,811,959 0 CR. 0 s. ^ n 6,000,000 to M O 73 H -3 2,000,000 It* P3 6,000,000 14,000,000 -3 w COMPTROLLER'S O F F I C E , January 6, 1 7 9 5 . OL1VUU W O L C O T T . JUN., Comptroller. a S3 C & D. to o o STA TEMENT Guilders. of interest payable in the year 1794, on loans effected for account of the United States, at and Antwerp. Guilders. On 4,000,000 On 1,000,000 On 1,000,000 . F i , v e Pe|r cent, loans effected at Amsterdam— 0 °, f ^ . T ' ^ ' ^f dated June 11, 1782, at interest from June I, 1793, to June I, 1794 . . . . Per contract, dated June 1, 1787, at interest for the same period Per contract dated March 13, 1788, at mterest for the same penod Effected under the late Government. ^ Per contract, dated February I, 1790, at interest from February 1 1793, to February 1,1794 . . 1 Per contract, dated March 2, 1791, at interest from March 1, 1793, lo March 1, 1794 . . . . . . . Per contract dated December 14, 1791,at mterest lYom September*!, 1793, to September I, 1794 . . . _ B t h c first I5,oon ' D a < 3 ' n i e n t due on June 1, 1793, on the loan of 5,000,000. per contracts of June 11, 1782, at interest from June I, 1793, to Jnne 1, 1794 . . . „ Effected under the present Government. Guilders. S. D. 200,000 50,000 50,000 00 00 00 00 00 00 ft!?m i ? ? 6,000,000 On 3,000,000 On 9,500,000 On 6,000,000 On 1,000,000 19,500,000 On 9,000,000 9,000,000 On 3,000,000 On 2,950,000 5,950,000 Foor per cent, loans effected at Amsterdam— Per contract, dated March 9, 1784, at interest from Ff binary 1. 1793, to Febtnary I, 1794 . . . . . Effected under the late Government. Per contract, dated December 94,1791, at interest from Jannary 1 1793 to January 1, 1794 . . . . . . Of a loan of 3;000,00®, per contract of August 9, 1792, at interest from June 1,1789, to Jane 1, 1794 . . . Effected under the i>r«-sent Government. 150,000 125,000 300,000 50,000 80,000 120,000 118,000 00 Rate of exchange per guilder. Amsterdam On 2,050,000 9,050,000 Four and a half per cent, loan effected at Antwerp— Of a loan of 3,000,000, per contract dated November 30, 1791, firom December 1, 1793, to December 1, 179*. Of this loan 950,000 have been suppressed Effected under the present Government. Commission on payment of interest at one per cent. 28,500,000 STATEMENT Guilders. - Amount, exclusive of postage, expense* foi advertising, See. of loans effected at Amsterdam Guilders 1,000,000 1,000,000 5,000,000 3,000,000 2,500,000 6,000,000 1,000,000 3,000,000 15,500,000 00 (10 1,335,250 13,352 00 10 00 00 a 40 cents do. 531,100 00 5,341 00 1,348,602 10 00 Or dollars 539,441 00 and Antwerp for account of the United States, remaining unpaid on December 31, 1794. Amount received. Guilders. 3,000,000 to Ol 92,250 Five per cent, loans effected at Ams'erdam— Of the loan of 5,000,000, per contracts of June 11, 1782, at interest from June 1, 1794 Per contract of June 1,1787, at interest from June 1, 1791 Per contract of March 13, 1788, at interest from June 1, 1794 Effected under the late Government. Per contract of February 1. 1790, at interest from February 1, 1794 Per contract of March 2, 1791, at interest from March 1, 1791 Per contract of December 14, 1791, at interest from September 1, 1794 Being a reloan of the first instalment due on June 1, 1793, on the loan of 5,000,000, per contracts of June 11, 1782, at interest from June 1, 1794 ; Per contract of April 10, 1794, at interest from January 1, 1794 Effected under the present Government. Amount of nve per cent, loans - Guilders. Amount of loans at the same interest. Guilders. 3,000,000 1,000,000 1,000,000 C*> pa o 73 pa H % < c 73 i——i pa 50 pa CO e: S3 3,000,000 2,500,000 6,000,000 1,000,000 3,000,000 - 20,500,000 t\D o -4 STATEMENTS C <fc D—Continued. Guilders. Guilders. Four per cent, loans effected at Amsterdam— Percontract of March 9, 1784, at interest from February 1, 1794 T o which add premiums and gratifications which will be payable on said loan . . . . . 9,000,000 9,000,000 3,000,000 9,950,000 5,950,000 9,050,000 9,060,000 Guilders. Guilders. 9,467,500 3,000,000 9,950,000 cn - 8,117,500 PE w 9,050,000 9,050,000 - Amount at interest. Amount to be paid COMPTROLLER'S OFFICE, 5S W o S3 H 467,500 Four and a half per cent, loan effected at Antwerp— Of a loan of 3,000,000, per contract dated November 30, 1791, at in teres! from December I, 1794, (of this loan 950,000 have been sup. pressed) . . . . . . . . Effected under the present Government. Amount of four and a half per cent, loan 30,500,000 Amount of loans at the same interest. 9,000,000 Effected under the late Government. Per contract of December 94, 1791, at inteiest from January 1, 1794 Of * loan of 3,000,000, per contract «f August 9, 1799, at inteicst froir J u n e 1,1794 : Effected under the present Government. Amount of four per rent, loans, including premiums and gratifications to amount of 467,500, upon which no interest will be payable, if the premiums shall be discharged within six months a tier having been drawn Amount received. January 6, 30,967,500 1795. OLIVER W O L C O T T , Jn., Comptroller. C tSc 1)—Continued. STA TEMBNT of one year's interest on the foreign loans effected for account of the United States, as due on the 3 let of December, 1794. 80,500,000 guilders, amount of five per cent, loans cfleeted at Amsterdam . 2,050,000 guilders, amount of tour and a half per cent, loan effected at Antwerp 7,950,000 guilders, amount of four per cent, loans effected at Amsterdam • . . . . . . . . . Guilders 1,0*5,000 to 02,000 318,000 n o 23 w 30,500,000 amount at interest. 467,500 R^Uders, amount of premiums and gratifications lo be paid on a loan of 2,000,000 guilders. > 80,967,600 guilders, amount to be paid for loans effected at Amsterdam and Antwerp. 53 Amount<<one year's on the- Dutch -and Antwerp loans Which, at 40- ents perinterest guilder,is . Livres. s it. 12,188,040 12 9 i * balance ^ i c h. Government a 4.706 per cent, per annum, being an average of interest payable on the French loans when obtained Livres 573,569 3 9 W h i c h , at 18.15 cents p*T ) j T r r ^ Amount of one year's i n t e r s on the foreign loans, as due on the 31st of December, 1794 8574,100 00 678,202 80 . . . . . . . Total of interest payable annually by the contract existing at the close of the year 1794 - - 1,100,518 40 a 6 per ct. SJ S3 >K {M. Interest payable by the existing contract on the debt as it stood on the last day ol December 1794— f~\r\ «iv n a r cent, n a n l dtrui 1/ _ _ * . _ _ ' * On six per stock 829,046,730 62 On the original capital of the debt to foreign officers . . . 186,988 83 829,233,718 85 a6perct. 81,754,023 13 On three per cent, stock . . . . . . . 19,48-1,8-10 68 On the interest of the capital due to foreign officers to December 31,1790 2^,438 58 19,507,279 26 a 3per ct. 585,218 37 On the unfunded debt, per statement . . . . . 1,181,323 40 From which deduct indents of interest which bear no interest 83,805 00 . o = 104,102 80 Statement of interest payable on the domestic debt. Unfunded debt bearing interest 3 to aS3 66,031 10 2,405,272 60 to HO STATEMENTS C <fc D—Continued. Statement of interest payable on the domestic debt. 2d. Interest payable after the year 1800, on the principles of the contract existing at the end of 1794— On the deferred stock existing at the end of 1794, bemg On the six per cent, stock, as stated above 29,KU,718 19 On the three per cent, stock, as stated above il^ 1 On the unfunded debt, as stated above »100,518 $871,401 92 r u 5 per cL 85 « 6 per ct. 1,754,083 13 ct 585,218 37 , ^P" ' 6(5,031 10 10 a 6 per ct. 4 Total of interest which would be payable after the year 1800 on the whole domestic debt, on the principles of the existing contract at the end of 1794 * • 3d. Interest which would be payable if the whole domestic debt was subscribed to the l o a n On six per cent, stock . * " * , " On three per cant, stock A n n u a l interest till the close of the y»» r 1800 . . . . Interest on deferred debt, which becomes six per cent, stock after the year 1800 . . 29,967,397 80 « 6 p e r c t . 19,967,936 00 a 3per ct. . 14,890,204 9 0 o 6 per ct. Total interest which would be payable annually after the year 1800, if the whole debt was subscribed - S3,276,674 52 1,798,013 86 599,038 08 2,397,081 94 893,412 29 3,290,49-1 23 50 H ^ O 50 -a (At o TJ H SB w -IO C f 1795.] SECRETARY OF THE TREASURY. . 211 E. View of sinking fund. according to plan proposed in the report. Present annual amount of sinking fund, supposing the investment of the residue of the surplus of revenue to the end of 1790, and of the arrears of interest on the debt to foreign officers, in the purchase of six per cent, stock, at par, and exonerating the fund from the charge to which it is subject by the last section of the act making provision for the reduction of the public debt, viz : Interest for a y«»r on stock actually purchased and redeemed, to the last of December, 1794, and carried to the credit of the fund - $68,225 55 Interest for a year on the principal and arrears of interest, to the end of 1790, on the debt to foreign officers 11,892 44 Interest for a year on subsequent arrears of interest, not included in the above . . . . . ^547 05 Interest for a year on 8411,659 49, being the unexpended balance of surplus to the end of 1790 24,699 56 $106,364 60 Interest for a year 011 the loan-office certificate, bearing interest on the nominal principal which (those certificates being paid off as proposed) would accrue to this fund 1,91100 Add this sum, to be appropriated out of the revenue from imports and tonnage, for the redemption of stock bearing a present interest of six per cent., according to the 5th proposition in the report . . . . . 408,134 64 The amount of two per cent, on $25,820,512 20, being the amount of stock unredeemed, bearing a present interest of six per cent, exclusive of State balances - $516,410 24 Dividends on bank stock, deducting interest on such instalments of the loan of the bank as had not accrued in the year 1794 - $62,500 00 Sum to be paid in addition thereto, on the 1st of January, 1796, out of the revenue from imports and tonnage, for reimbursement of the fourth instalment of the above loan 137,500 00 Amount of annual instalments of $2,000,000, had of the Bank of the United States, pursuant to the 11th section of the act of incorporation . . . . . $200,000 00 The surplus of the dividends on bank stock will increase each year $12,000; the interest, liberated by payment of each annual instalment of principal, and the sum to be paid out of the revenue, will anuually decrease ln the same ratio. It will be, after the first year— On the 1st of January, 1797 . . . . $125,500 On the 1st of January, 1798 . . . . 113,500 Un the 1st of January, 1799 . . . . 101,500 Un the 1st of January, 1800 . . . . 89^500 212 REPORTS OF THE [1795. On the 1st of January, 1801 . . . . $77,600 On the 1st of January, 1802 . . . . 65,500 The yearly average of the sums successively payable out of the revenue from imports and tonnage, towards reimbursing the two million loan," will be $101,500 00 And the whole loan being discharged on the 1st of January, 1803, the annual dividend on bank stock will be liberated from the future payment of interest on the loan, and will thenceforth yield to the sinking fund an annuity liable to the redemption of the deferred stock - 152,500 00 Two per centum of $12,478,837 93, the amount of unredeemed stock, which, on the 1st of January, 1801, w\ll bear interest at six per centum per annum,exclusive of State balances, and which will be payable on the 1st of January, 1802, is 249,576 75 Yearly interest, which, on the 1st of January, 1801, will begin to accrue to the sinking fund, in the deferred stock standing to its credit, is $52,319 97. Further sum necessary for payment of the above two per centum - 197.256 78 $249,576 75 This sum of $197,256 78 will, in the year 1802-*03, be payable out of the revenues from imports and tonnage. But the yearly dividends on bank slock, free from charge after the 1st of January, 1803, being . §152,500 00 The sum thenceforth payable out of the revenues from imports and tonnage, for payment of said two per centum, will be 44,756 78 Which, together with the yearly interest on deferred stock, being 52,319 97 Is equal to the amount of redeeming annuity of deferred stock. being - $249,576^5 Hence the permanent appropriations out of the revenue from i m p o r t s and tonnage, for the redemption of the whole of the unredeemed f u n d e d stock, which now bears, and hereafter will bear, an interest of six per c e n t u m per annum, exclusive of the stock standing to the credit of certain States, pursuant to the report of the commissioners, is— . . €.408134 64 For that bearing a present interest For that bearing a future interest . . v 44,756 78 Total annual extra appropriation to sinking fund, out of the"" revenues, exclusive of bank dividends . . $452,891 42 The whole of the stock bearing a present rate of interest will, by this fund, be redeemed in something less than twenty-three years, and the interest then set free (to wit) in the year 1818, will be - SI,631,259 72 To which add the further appropriation towards principal, F F as above . . . 4 0 8 1 3 4 64 1795.] SECRETARY OF THE TREASURY. 213 This annuity, applied to payments or purchases of the foreign debt, on a calculation of five per cent, interest, would, by the 1st of January, 1824. extinguish that debt, and yield a surplus of £122.502 29. The whole of the stock bearing a future interest of six per cent, will, by the fund to be applied to it as above, be also redeemed in something less than twemy-three years from the time of commencing the redemption, that is, by the year 1824; and the interest then set free on that stock will - $801,050 24 The sum appropriated towards the redemption then also set free, is 197,256 78 To which add the sum liberated by the redemption of the present six per cent, stock . . . . 2,039,394 36 And the interest on $ 13,745,379 35, being the amount of the foreign debt extinguished as above 638,4S0 58 There .will, therefore, be an annuity of - $3,676,1SI 96 Thus will the whole of the foreign debt be extinguished by the year 1824, and the sinking fund will then possess an annuity of - $3,676,181 96 And a sum, in gross, of 122,502 29 Together - $3,798,684 25 W h i c h , in two years, would more than pay off the whole of the balances to creditor States, and the whole of the unfunded debt, if not sooner discharged. So that, supposing the proceeds of the western lands to be sufficient, by the same time, to redeem the three per cent, stock, the whole of the present debt of the United States, foreign and domestic, funded and unfunded, may be redeemed by the operation of the provision proposed by the fifth proposition, by the year 1826; and there would revert to the United States a yearly revenue of $4,435,320 89. ALEXANDER HAMILTON. TREASURY DEPARTMENT, January 17, 1795. Note.—The calculations in this statement would require, to assure their perfect accuracy, a revision; but it is certain that any errors it may contain will be too inconsiderable to affeci any important result. 214 [1795. REPORTS OF THE F. COMPARATIVE V I E W O F A N N U A L C U R R E N T REVENUE A N D EXPEND!TURE. Current Revenue. Permanent Nett duties on imports and tonnage, as ascertained 1793, per account of receipts and expenditures for that year - 56,087,546 26 Add product of additional dntics on imports laid by the acts of the 5th and 7th of June, 1794, computed on the importations of 1793 1,091,872 32 rcrtnut. 87,179,416 58 Deduct for extra drawbacks, which would become payable after the year 1793, in consequence of extra importations of certain articles in that year, which were reexported And amount of temporary duties on imports 1,500,000 00 1,479,626 91 2,979,626 91 Permanent duties on imports and tonnage Duties on spirits distilled within the United Slates, and upon stills . . . Nett duties on postage of letters, as ascertained in 1793 Patent fees, as they accrued in the same vear Dividends of bank stock beyond the interest payable to the bank in 1793 Add interest of two instalments, which, beiag paid off, will increase the dividend - . . 4 199 791 67 . - ^qq qqq qq ' 29 722 16 ' po . . - 38,500 00 24,000 00 62,500 00 Total permanent revenue DuUes on imports, as stated above . . Estimated product of duties on snuff manufactured, and sugar refined within the United States, carriages for the conveyance of persons, licenses for selling wines and spirits at retail, sales at auction Total temporary revenue - Total annual current revenue $4 693,CTS 83 . T ^ ' J X f Z f t * ji . . - . . . 380 000 00 ~ . . 1 859,626 91 c r. r>52.300 74 I 1795.] SECRETARY OF T H E TREASURY. 215 Current expenditure. Interest on foreign debt, as stated Deduct interest on instalment* of foreign debt for 17%, to be paid oat of the proceeds of foreign loans £678,102 80 39,622 22 $638,480 58 Interest on funded domestic debt . . . Interest on unsubscribed debt, computed according to contract . . . . . . 2,339.241 50 . 66,031 10 3,043,753 18 Interest on temporary loans for anticipating the rereaue Expenses of the civil department, including foreign intercourse Expenses of the military department Including pensions to invalids . . . Expenses of naval department for one year Expenses of light-house and other establishments for the benefit of navigation . . Excess of revenue beyond expenditure TATM-NY DEPABTMIVT, January 17,1795. . 1,311,975 85,357 ______ . 100,000 00 475,249 53 29 04 _ 1,397,332 33 441,508 80 . . 24,000 00 -35,481,843 84 . . $ 61,,505720,, 34 05 06 74 90 . ALEXANDER HAMILTON, Secretary of the 7Veasury. R E S U L T IN T H E Y E A R 1796, A C C O R D I N G T O F I F T H P R O P O S I T I O N . Surplus of revenue brought forward . . . . Increased interest on foreign debt S6].®] Interest on new emission Ten per cent, of arrears of unfunded interest, including indents 4#, J09 Yearly instalment on account of 1,000,000 loan for foreign intercourse 200,000 Appropriations for sinking fund, viz? Dividends of bank rtock $62,500 00 Sum payable out of imports and tonnage for redemption of six per cent, stock 408,134 61 Sum payable on the 1st of January, 1796, towards reimbursing of bank loan 13<,500 00 • 070,456 90 «{ lo 5J 00 608,134 64 928,264 76 Balance, being cxccss of revenue beyond expendiiure - - - $142,192 14 . h appears, bv statement E that these extra appropriations will, in the progress of the operation, be reduced ; and that, inrloding a provision for the redemption of the deferred debt the permanent charge on the revenue, (exclusive of bank dividends,) for the sinking fund, will be no more than $452,891 42. A H i I N D E X . A. Agriculture, the effect of funding the public debt on, 6. productiveness of, contrasted with manufactures, 78. promoted by manufactures, 88, 92, 104. Alloy, proportion of, used in gold and silver coinage, 135, 141. Why it is used in coinage, 142. Annuity proposed, as a plan for funding the public debt, 17, 43, 99. Army expenses of 1802, estimated, 222. of 1803, do 253. of 1804, do 263. of 1805, do 286. of 1806, do 298. from 1st April, 1801, to 31st March, 1805, 326. of 1807, estimated, 331. of 1808, do 358. paid, 374. of 1809, estimated, 375, 392. paid, 399. . (to J« from 1802 to 1807,420. of 1810, estimated, 400. paid, 421. of 1811, estimated, 423. paid, 443, 466. of 1812, estimated, 444. paid, 46S, 484. of 1813. estimated, 470, 489. paid, 490, 492, 499. of 1814, estimated, 500. paid, 523, 532. of 1815, estimated, 530. B. Balances in the Treasury, in 1801, 1802, 1803, 1804, 1805, 1806, 1807, 1808, 1809, 1810, 1811, 1812, 1813, 1814, 223, 224. 255. 263. 287. 298. 332. 357. 374. 391, 399. 422. 443. 468. 488, 499. 525. 554 INDEX. Bank, plan of a national, proposed, 54, 72. capital stock, of what amouut, and how composed, 72. the United States may be a stockholder, 75. Bank of the United States, a renewal of the charter of; recommended, 3o9. Bank shares, dividends on, in 1901, 221. sold, 254. proceeds of, 317. Banks, benefits resulting from, 55, 97. number of, in the United States ill 1790, 65. objections to, considered, 57. stock of, how composed, 59. favor the increase of the precious metals, 61. tend to lower the rate of interest, 67. • _ Bounties considered as a mean of encouraging manufactures, 110, 1.J0. C. Claims of American citizens against Prance, amount of, assumed and paid, 264, 266, 288. Coffee, additional duty on, proposed, 22. imported and consumed from 1790 to 1798, quantity ol, 241.—See Merchandise imported Coins, foreign, comparative value of, 135. 142. circulation of, to be prohibited, 155. Coins of the United States, of what to be compow>d,nnd how denominated, 152. Commercial restrictions, effects of, on the revenue in 1807-8, 398, 409. Commerce, benefited by funding the pablic debt, 5. promoted by man u far tu res, 90, 104. how affected by the French and British decrees, 376. Compensation of officers ot Government in 1790,45. Connecticut, claim of, m 1789, 35. Creditors of the United States, not expedient to discriminate between the classes of the, 7. Credit.—See Public Credit. Customs, where paid, and the amount, from 1st April, 1801, to 31st Marcn, 1805, 319. , - it ^nvds Debt, amount of interert on the domestic, from 1776 to 1791, 33. Debt.—See Public Debt. Debts due to States, to be assumed by the United States, 10, 28. suppositious account of the, 30. statement of the, 35. provision for liquidating, 164. Direct taxes, collected in 1801, 221. arrears of, in 1803, 263. receipts from, in 1801 to 1805, 317. receipts from, in 1814, 524, 526. an increase of the. recommended, 531.—See Revenue, *TC- 555 INDEX. Drawback of duties, considered in reference to the encouragement of manufactures, 114. amount of, from 1790 to 1799,239. system of, proposed to be modified, 378.—See Merchandise imported. Duties, additional, proposed on wines, spirits, teas, and coffee, 22. Duties on imports, tariff of, proposed to be modified, 218,227. cost of collecting the, 218, 227. an increase of, proposed, 219,242, 378, 401, 424,448. Duties on imports and tonnage, estimated for 1790, 53. ^ for 1795.170. Duties.—See Internal Duties, Protecting Duties, Imports, Merchandise. Dutch debt, created in 1790, 166. amount of, in 1794, 206. amount of, in 1802, 225. instalments payable to 1809, 250. difficulties in remitting instalments of the, 254, <2b0. amount of the, in 1803,276. R Embargo, its effects upon the revenue considered, 377, 503. Estimates of receipts and expenditures for 1791, 45, 53. 1795,170,18o,2l4. 1801-2, 222. 1802-3, 253. 180a-4. 263. 1804-5, 286. 1805-6, 298. 1806-7, 331. 1807-8, 357. 1808-9, 375. 1809-10, 399. 1810-11, 422. 1811-12,444,448. 1812-13, 469. 1813-14,488, 500. 1814-15, 526, 530. Exemption of nujeriajs materials ^ for manmawun» ^ Expenditures.—See Receipts and Expenditures. Exportation.—Sec Re-exportation. F ^ < Finances, ,he effects of a nationalbauk in administering.be, centered, 54. Finances, state of the. in 1801, 1802, 1803, 1804, 1805, 1806, 1807, H08, 1809; 21b. 252. 262. 285. 297. 331. 356. 373. (June,) 391. 556 INDEX. Finances, state of the, in 1809, (December.) 398. 1810, 421. 1811, 443. 1812,468. 1813, (June,) 48$. 1813, (December,) 499. 1814, 523. Fisheries, benefited by manufactures, 107. Florida, imports and exports to and from, for Uio years 1799 to ISO2.20a, 281 to 284. Foreign intercourse, expenses of, from 1801 to 1805, 325 — See Receipts and Expenditure*. Foreign officers, provision made in 1792, for paying certain, 166. France, claims against, assumed by the United Stales, and paid, 264 6,288. Frauds on the revenue, how prevented, 23. Funding system established in 1790, 165. G. Gold and silver, amount of, increased by establishing hanks, 55. proportion of, in the United Stales, in 1790, estimated. 141. 1. Imported articles, and the duty on each.—See Merchandise imported. Imports from Great Britain in 1810, duties accrued on, 456. a table of duties chargeahlo on, in 1801, 227. Imports, value and quantity of, from 1790 to 1800, 229 to 238. amount of duties accrued on, from 1790 to 1799, 239. _ quantity of consumed in the United States from 1790 to duties accrued on, from October 1800, to October 1802, 259, duties accrued on, in the years 1802 and 1803, 290. 1801 to 1804,297.302,311. 1804 and 1805, 337. 1805 and 1806,362. 1806 and 1807,379. 1807 and 1808,403. 1808 and 1WJ9, 426. 1809 and 1810, 451. 1810 and 1811, 47S. 1811 and 1812, 505. 1812 and 1 8 1 3 , 5 4 4 . — c h a n dise imported. „ Incidental revenues received from 1st April, 1801, to 31st March, lbuo, o —See Revenue. Internal duties created in 1794,159, Internal duties, receipts from in 1800, 218, 243. cost of collection, 219. receipts from, in 1801 to 1805,317. outstanding, amount of in 1803, 263 proposed to be increased, 531.—See Reven?^ Internal improvements, surplus revenue maybe applnxl to, 359. Inventions and discoveries promote manufactures, 114. INDEX. 557 L. I^ands.—See Public Lands. Laws creating revenue, and providing for the public debt, reviewed 157 Limitation act, passed in 1793, 167. Loan recommended to supply a deficiency in the receipts. 392, 400 423 448, 471, 491. ' ' ' ' Loans, foreign, amount of on 31st December, 1789, 31. I^oans preferred to taxes to meet the exigencies of a war, 377, 401. Loans, amount received from, in 1810, 443. 1812, 468, 486. 1813, 488, 492. 499, 516. 1814, 524, 527.—See Revenue. I*oans, term3 on which they were obtained, 441, 491, 492 to 498; 519 to 522, 528 ; 535 to 540. l»uisiana, provision for the purchase of, 264. imports and exports to and from, for the years 1796 to 1802, 265, 281 to 284. M. Manufactures benefited by funding the public debt, 6. expediency of encouraging, 78. advantages of, 85. encourage emigration, 87. effects of, on commerce and agriculture, 90. objections to encouraging, considered, 91, 103, 107. progress of, in the United States, 102. necessary to the independence of a country, 106. sectional jealousies on the subject of, considered, 107. how to be protected, 109. materials for. exempted from duty, effect of, 113. articles of, requiring particular encouragement, 118. Massachusetts, amount due to, in 1789, 35. Mediterranean fund, created, and estimated product of the, for 1805, 286. duties constituting the, cease 1st January, 1809, 356. a continuation of the, recommended, 378,401,424,448. annual amount of.—See Merchandise imported, and Revenue. Merchandise imported and consumed, from 1790 to 1S00, 237, 241. (paving ad valorem duties) in 1795 to 1800, 234. (the quantity re-exported deducted) in 1801, 312. 1 1 1802,270. 1803, 291. 1804, 303. 1805, 338. 1806, 368. 1807, 380. 1808, 404. re-exported in 1807 and 1808, 409. imported, (the quantity reexported deducted,) in 1809, 427. 1811', 474. 1812, 506. 1813, 545. 55S INDEX. Mint, plan for the establishment of a, 133. expenses of a, how defrayed, 143, 150. Molasws^np^rted and" consumed from 1790 U> 1793, quantity of, 211. See Merchandise imjxjrled. N. National bank proposed to be established, 54. Navy expenses of 1802, estimated, £22. 1603, do 253. 1804. do 263. 1S05, do 2S6. 1806, do 298. from 1st April. 1801, to 31st Maxell, 1S05, 327. of 1807, estimated, 331. 1808, do 358. paid, 374. 1S09, estimated, 375, 392. paid, 399. from 1802 to 1807, 420. of 1810, estimated. 400. paid, 421. 1811, estimated. 423. paid, 443, 466. 1812, estimated, 441. paid, 468, 484. 1813, estimated, 470, 489. paid, 490, 492, 499. 1814, estimated, 500. paid, 523, 532. 1815, estimated, 530. New Jersey, claim of, in 1789, 35. New York, claim of, in 1789, 35. Non-importation act, modification of the, proposed. 425. O. I Officers of Government, compensation allowed to the, in 1790, 45. P. Paper money, the expediency of emitting, considered, 64. Passports and clearances, amount of revenue derived from, in 179" 1798, 241—See Merchandise imparted. Penalties and forfeitures for infractions of the revenue laws, to be districted to informers and custom-house officers, 425.—See Revenue. Postage of letters, receipts from, in 1901 to 1805, 317.--See Revenue. Post Office, revenue derived from the, to he applied to the sinking fond, review of the law establishing the, 159. Premiums, effect of granting, on agriculture and manufactures, 113. INDEX. 559 Protecting duties on imports considered as a bounty on domestic fabrics, 109. the constitutional power to levy considered, 112. Prohibitions of imports and exports may be resorted to for the encouragement and protection of manufactures, 109. Public credit, plans for the support of, 3, 157,172. a national bank necessary to the support of, 54. essentia! to the prosperity of the nation, 197. defined, 198. Public debt, advantages of funding the, 5, 98. nature of the provisions for funding the, 7,161. of what it consists, 14, 168, 347. plans for funding the, 17, 43, 45, 161. plans for redeeming the, 22, 27, 165. may constitute a part of the capital of a national bank, 72, 75, 157. laws relating to the, reviewed, 157. plan for completing the system for liquidating the, 173. revenues pledged for the payment of the, 168. amount of foreigu and domestic, in 1790, 14, 22, 31, 33. 1795, 169, 201 to 210. 1802, 223, 248, 250, 279. when it may be redeemed, estimated, 172, 225, 251, 354. amount paid, in 1802, 254. 1803, 264, 276. 1804,288,296. 1805. 299, 310. from Apr. 1.1801,to March 31,1805,328,329,333. in 1806, 333, 345. plan for consolidating the, proposed, 333,347 to 3oo. amount of the, in 1806, 349. Q 9 4 0 f ; i QKK estimated amount that maybe paid, m 1809 to 1824,354,3^. amount paid in 1807, 358, 371. in 1811, 445,461. from April 1, 1801, to January 1,1812, 463. amount on Januan; 1, 1812, 446, 464. amount paid m 1812, 468,480. ^ 1814, 534. t t ^ ^ T T ^ J l pubbc debt, j S ^ f f i f f i S S 1795 and 1801, 1 f i 21Q 244 p r ^ S f e of'the. pledged for the publie debt, 163. S d T l S O l , 220, 246. intrusions on the, to be prevented, 221. sold in 1802, 252, 257. 560 INDEX. Public lands, sold in 1S03, 262, 274. 1904, 285, 291, 315. 1905, 297, 309. receipts from, in f W l to 1905, 31 / . sold in 1806, 331, 34*. 1907, 356. 368. 1908. 373, 385. 1809.398, 411. sold from 1800 to 18(0, 421, 432. sold in 1811,448. , tI . JJO may be applied as & bounty to soldiers enlisting, 44b. sold in 1M2, 478. 1813, 511. Ibl l, 550. * m Public vessels sold, 222. I ] 3 | R. Receipts and expenditures, estimated for 1790, 45, 53. 1795, 170. comparative view of the, for 1795, 214. in 1801, 216. 1802, 252. 1803. 262. 1804,285. ^ from April ' l , 1801, to March 31, 1805, 317 to 330. ' in 1806, 331. 1807, 356. 1808.373. 1809. 391, 395, 398, 419. 1810, 421, 438. 1811,443. 466. 1812, 468, 482, 486. 1813, 488, 492, 499, 616, 532. 1814, 523, 533. Re-exportation of foreign merchandise in 1807 and 1908, 409. Revenue, frauds of the, how to be prevented, 23. s plan for increasing the, 24. laws relating to, reviewed, 157. for what purposes pledge, 168. how to be increased in the event of war, 361, 378. an increase of, proposed, 219, 242, 378, 401, 4 ^ 448, 504from what sources derived, and the amount in 1795, * 1801,216„lT 1901 to 1805,317, 322. 1808,395. v 1809, 419. 1810, 438. 1811, 466. INDEX. 561 Revenue, from what sources derived, and the amount in 1812,482,492. 1813, 492, 516, 518. 1814, 532-3. See Receipts and expenditures. S. Salt imported and exported from 1790 to 1800, 233. and consumed from 1790 to 1798, quantity of, 241.—See Merchandise imported. Salt duly expires 1st January, 1808,356. a renewal of the, recommended, 449, 490.—See Merchandise imported. Sinking fund, plan of a, proposed, 27. established in 1790, 165, 171. made permanent in 1792, 166, 169. operations January, proceedingsofofthe, the,toin1st1802, 260. 1795, 167, 1/1, -411. state of the, in 1806, 346. in 1810, 440. in 1813, 498. South Carolina, claim of, in 1789, 36. Specie increased by the operation of banks, 55. Si>ecie payments suspended by banks, 529. S & 3 mortal " WgS&SffSV^X Merchandise imported. Saints foreign and domestic, additional duties proposed on, M. Stampdutiesexpire 4th March 1803 218 2 2 1 . ^ / ^ , State debts, ought to be assumed bv the Union, 14, 28, 30. amount of; estimated, So, provision for liquidating the, 164. S ^ i ^ E S SSSrESbTlW S u r p l ^ u f quantity of, 24,-S, to internal improvements, 359. T. J Ko l^iHpd 449. 490.—See Direct taxes. Taxes, internal, proposed to be l e v i e d , ^ , - S e e Merchandise >mPorlJ r - f r o m 1 7 9 0 to 1799, 240. Tonnage, amount of American and foreign, from 17W to ^ ^ Tot, i.—36 in 1803, 290. 1804, 302. 1805, 337. 1806, 362. 1807, 379. 1808, 394, 403. INDEX. Tonnage, amount of American and foreign, in 1909, 426. 181 li 473. 1812, 805. 1813, 544. Tontine, proposed as a plan for funding the public debt, 20, 45. Treasury notes, amount authorized in 1812, 469, 492. treasury u 1813,492.499,518. 1814, 525. 529, 532, 511-2. in circulation in 1814, 529. an increase of the rate of interest on, proposed. 530. y. Virginia, claims of, in 1789. 36. W. Wines, additional duties proposed on, 22. imported and consumed, quantity of, from 1790 to 1798, 241.Maxhandisc imported. E N D OF T H E F I R S T V O L V M E .