Third. A commutation of the half-pay allowed by different resolutions of Congress for an equivalent in gross. Fourth. A settlement of the accounts of deficiencies of rations and compensation. The committee are of opinion, with respect to the first, that the superintendent of finance be directed, conformably to measures already taken for that purpose, as soon as the state of the public finances will permit, to make such payment, and in such manner as he shall think proper, till the further order of Congress. With respect to the second article, so far as relates to the settlement of accounts, that the several states be called upon to complete the settlement, without delay, with their respective lines of the army up to the -day of August, 1780; that the superintendent be also directed to take such measures as shall appear to him most proper and effectual for accomplishing the object in the most equitable and satisfactory manner, having regard to former resolutions of Congress, and the settlements made in consequence thereof. And so far as relates to the providing of security for what shall be found due on such settlement,- Resolved, that the troops of the United States, in common with all the creditors of the same, have an undoubted right to expect such security; and that Congress will make every effort in their power to obtain, from the espective states, general and substantial funds adequate to the object of funding the whole debt of the United States; and that Congress ought to enter upon an immediate and full consideration of the nature of such funds, and the most likely mode of obtaining them. With respect to the third article, the committee are of opinion that it will be expedient for Congress to leave it to the option of all officers entitled to half-pay, either to preserve their claim to that provision as it now stands by the several resolutions of Congress upon that subject, or to accept years' full pay, to be paid to them in one year after the conclusion of the war, in money, or placed upon good funded security, bearing an annual interest of six per cent. ; provided that the allowance to widows and orphans of such officers as have died or been killed, or may die or be killed, in the service during the war, shall remain as established by the resolution of the day of With respect to the fourth and fifth articles, the committee beg leave to delay their report until they have obtained more precise information than they now possess on the subject. The first clause of this report, relative to immediate pay, passed without opposition. The superintendent had agreed to make out one month's pay. Indeed, long before the arrival of the deputies, he had made contingent and secret provision for that purpose; and to insure it now, he meant, if necessary, to draw bills on the late application for loans. The words "conformably to measures already taken," referred to the above secret provision, and were meant to show that the payment to the army did not originate in the memorial, but in an antecedent attention to the wants of the army. In the discussion of the second clause, the epoch of the of August, 1780, was objected to by the eastern delegates. Their states having settled with their lines down to later periods, they wished now to obtain the sanction of Congress to them. After some debate, a compromise was proposed by Mr. HAMILTON, by substituting the last day of December, 1780. This was agreed to without opposition, although several members disliked it. The latter part of the clause, beginning with the word "Resolved," &c., was considered as a very solemn point, and the basis of the plans by which the public engagements were to be fulfilled, and union cemented. A motion was made by Mr. BLAND to insert, after the words "in their power," the words "consistent with the Articles of Confederation." This amendment, as he explained it, was not intended to contravene the idea of funds extraneous to the Federal Articles, but to leave those funds for a consideration subsequent to providing constitutional ones. Mr. Arnold, however, eagerly seconded it. No question, however, was taken on it, Congress deeming it proper to postpone the matter till the next day, as of the most solemn nature, and to have as full a representation as possible. With this view, and to get rid of Mr. Bland's motion, they adjourned; ordering all the members not present, and in town, to be summoned. SATURDAY, January 25. The secretary of Congress having suggested to a member that the contract with the court of France specifying the sums due from the United States, although extremely generous on the part of the former, had been ratified without any such acknowledgments by the latter; that this was the first instance in which such acknowledgments had been omitted, and that the omission would be singularly improper at a time when we were soliciting further aids; these observations being made to Congress, the ratification was reconsidered, and the words "impressed with," &c., inserted. The report on the memorial was resumed. By Mr. Hamilton, Mr. Fitzsim mons, and one or two others who had conversed with Mr. Morris on the cnange of the last day of December for the- -day of August, it was suggested that the change entirely contravened the measures pursued by his department; and moved for a reconsideration of it, in order to inquire into the subject. Without going into details, they urged this as a reason sufficient. The eastern delegates, although they wished for unanimity and system in future proceedings relative to our funds and finances, were very stiff in retaining the vote which coincided with the steps taken by their constituents. Of this much complaint was made. Mr. RUTLEDGE, on this occasion, alleging that Congress ought not to be led by general suggestions derived from the office of finance, joined by Mr. Gervais, voted against the reconsideration. The consequence was, that South Carolina was divided, and six votes only in favor of the reconsideration. Mr. HAMILTON having expressed his regret at the negative, and explained more exactly the interference of the change of the epoch with the measures and plans of the office of finance, which had liunited all state advances and settlements to August1780, Mr. RUTLEDGE acknowledged the sufficiency of the reasons, and at his instance the latter date was reinstated. On this second question Connecticut also voted for August. The- day of August being reinstated, before a question on the whole paragraph was taken, Mr. GORHAM objected to the word "general" before funds, as ambiguous, and it was struck out; not, however, as improper, if referring to all the states, and not to all objects of taxation. Without this word the clause passed unanimously, even Rhode Island concurring in it. Congress proceeded to the third clause relative to the commutation of half-pay. A motion was made, by Mr. HAMILTON, to fill the blank with "six;" this was in conformity to tables of Dr. Price, estimating the officers on the average of good lives. Liberality in the rate was urged by several as necessary to give satisfaction, and prevent a refusal of the offer. For this motion there were six ayes, five noes; the Southern States and New York being in the affirmative, the Eastern and New Jersey in the negative. Colonel BLAND proposed six and a half, erroneously supposing the negative of six to have proceeded from its being too low. It was, on the contrary, rather doubtful whether the Eastern States would concur in any arrangement on this head, so averse were they to what they call pensions. Several having calculated that the annual amount of half-pay was between four and five hundred thousand dollars, and the interest of the gross sum nearly two thirds of that sum, Congress were struck with the necessity of proceeding with more caution, and for that purpose committed the report to a committee of fiveMr. Osgood, Mr. Fitzsimmons, Mr. Gervais, Mr. Hamilton, and Mr. Wilson. On the motion of Mr. WILSON, Monday next was assigned for the consideration of the resolution on the second clause of the report on the memorial from the army. He observed, that this was necessary to prevent the resolution from being, like many others, vox et præterea nihil. MONDAY, January 27. A letter from General Washington was received, notifying the death of Lord Stirling, and enclosing a report of the officer sent to apprehend Knowlton and Wells. (See p. 8.) The following is an extract from the report: "He (one Israel Smith) further said, that Knowlton and Wells had received a letter from Jonathan Arnold, Esquire, at Congress, part of which was made public, which informed them that affairs in Congress were unfavorable to them, and would have them to look out for themselves. What other information this letter contained, he could not say. I found, in my march through the state, that the last-mentioned gentleman was much in favor with all the principal men in that state I had any conversation with." Mr. ARNOLD, being present at the reading, informed Congress that he was surprised how such a notion should have prevailed with respect to him; that he had never held any correspondence with either Knowlton or Wells; and requested that he might be furnished with the extract above. In this he was indulged without opposition. But it was generally considered, notwithstanding his denial of the correspondence, that he had, at least at second-hand, conveyed the intelligence to Vermont. A long petition was read, signed, as alleged, by nearly two thousand inhabitants 'but all in the same hand-writing) of the territory lately in controversy between Pennsylvania and Virginia, complaining of the grievances to which their distance from public authority exposed them, and particularly of a late law of Pennsylvania interdicting even consultations about a new state within its limits, and praying that Congress would give a sanction to their independence, and admit them into the Union. The petition lay on the table, without a single motion or remark relative to it. The order of the day was called for to wit, the resolution of Saturday last in favor of adequate and substantial funds. The subject was introduced by Mr. WILSON, with some judicious remarks on its importance, and the necessity of a thorough and serious discussion of it. He observed, that the United States had, in the course of the revolution, displayed both an unexampled activity in resisting the enemy, and an unexampled patience under the losses and calamities occasioned by the war. In one point only, he said, they had appeared to be deficient, and that was, a cheerful payment of taxes. In other free governments, it had been seen that taxation had been carried farther, and more patiently borne, than in states where the people were excluded from the governments; the people considering themselves the sovereign as well as the subject, and as receiving with one hand what they paid with the other. The peculiar repugnance of the people of the United States to taxes, he supposed, proceeded, first, from the odious light in which they had been, under the old government, in the habit of regarding them; secondly, from the direct manner in which taxes in this country had been laid, whereas in all other countries taxes were paid in a way that was little felt at the time. That it could not proceed altogether from inability, he said, must be obvious; nay, that the ability of the United States was equal to the public burden, could be demonstrated. According to calculations of the best writers, the inhabitants of Great Britain paid, before the present war, at the annual rate of at least twenty-five shillings sterling per head. According to like calculations, the inhabitants of the United States, before the revolution, paid, indirectly and insensibly, at the rate of at least ten shillings sterling per head. According to the computed depreciation of the paper emissions, the burden insensibly borne by the inhabitants of the United States had amounted, during the first three or four years of the war, to not less than twenty millions of dollars per annum a burden, too, which was the more oppressive as it fell very unequally on the people. An inability, therefore, could not be urged as a plea for the extreme deficiency of the revenue contributed by the states, which did not amount, during the past year, to half a million of dollars; that is, to one sixth of a dollar per head. Some more effectual mode of drawing forth the resources of the country was necessary. That, in particular, it was necessary that such funds should be established as would enable Congress to fulfil those engagements which they had been enabled to enter into. It was essential, he contended, that those to whom was delegated the power of making war or peace should, in some way or other, have the means of effectuating these objects; that, as Congress had been under the necessity of contracting a large debt, justice required that such funds should be placed in their hands as would discharge it; that such funds were also necessary for carrying on the war, and as Congress found themselves, in their present situation, destitute both of the faculty of paying debts already contracted, and of providing for future exigencies, it was their duty to lay that situation before their constituents, and at least to come to an éclaircissement on the subject. He remarked, that the establishment of certain funds for paying would set afloat the public paper; adding, that a public debt, resting on general funds, would operate as a cement to the Confederacy, and might contribute to prolong its existence, after the foreign danger ceased to counteract its tendency to dissolution. He concluded with moving that it be resolved, "That it is the opinion of Congress that complete justice cannot be done to the creditors of the United States, nor the restoration of public credit be effected, nor the future exigencies of the war provided for, but by the establishment of general funds, to be collected by Congress." This motion was seconded by Mr. FITZSIMMONS. Mr. BLAND desired that Congress would, before the discussion proceeded further, receive a communication of sundry papers transmitted to the Virginia delegates by the executive of that state, two of which had relation to the question before Congress. These were-first, a resolution of the General Assembly, declaring its inability to pay more than fifty thousand pounds, Virginia currency, towards complying with the demands of Congress; secondly, the act repealing the act granting the impost of five per cent. These papers were received and read. Mr. WOLCOTT expressed some astonishment at the inconsistency of these two acts of Virginia; supposed that they had an unfavorable aspect on the business before Congress, and proposed that the latter should be postponed for the present. He was not seconded. Mr. GORHAM favored the general idea of the motion, animadverting on the refusal of Virginia to contribute the necessary sums, and at the same moment repealing her concurrence in the only scheme that promised to supply a deficiency of contributions. He thought the motion, however, inaccurately expressed, since the word "general" might be understood to refer to every possible object of taxation, as well as to the operation of a particular tax throughout the states. He observed that the non-payment of the one million two hundred thousand dollars demanded by Congress, for paying the interest of the debts for the year- demonstrated that the constitutional mode of annual requisitions was defective; he intimated that lands were already sufficiently taxed, and that polls and commerce were the most proper objects. At his instance, the latter part of the motion was so amended as to run "establishment of permanent and adequate funds to operate generally throughout the United States." Mr. HAMILTON went extensively into the subject; the sum of it was as follows: he observed that funds considered as permanent sources of revenue were of two kinds-first, such as would extend generally and uniformly throughout the United States, and would be collected under the authority of Congress; secondly, such as might be established separately within each state, and might consist of any objects which were chosen by the states, and might be collected either under the authority of the states or of Congress. Funds of the first kind, he contended, were preferable; as being, first, more simple, the difficulties attending the mode of fixing the quotas laid down in the Confederation rendering it extremely complicated, and in a manner insuperable; secondly, as being more certain, since the states, according to the said plan, would probably retain the collection of the revenue, and a vicious system of collection prevailed generally throughout the United States a system by which the collectors were chosen by the people, and made their offices more subservient to their popularity than to the public revenue; thirdly, as being more economical, since the collection would be effected with fewer officers, under the management of Congress, than under that of the states. Mr. GORHAM observed, that Mr. Hamilton was mistaken in the representation he had given of the collection of taxes in several of the states, particularly in that of Massachusetts, where the collection was on a footing which rendered it sufficiently certain. Mr. WILSON, having risen to explain something which had fallen from him, threw out the suggestion that several branches of the revenue, if yielded by all the states, would perhaps be more just and satisfactory than any single one; for example, an impost on trade combined with a land tax. Mr. DYER expressed a strong dislike to a collection by officers appointed under Congress, and supposed the states would never be brought to consent to it. Mr. RAMSAY was decidedly in favor of the proposition. Justice, he said, entitled those who had lent their money and services to the United States to look to them for payment; that if general and certain revenues were not provided, the consequence would be that the army and public creditors would have soon to look to their respective states only for satisfaction; that the burden in this case would fall unequally on the states; that rivalships relative to trade would impede a regular impost, and would produce confusion among the states; that some of the states would never make, of themselves, provision for half-pay, and that the army would be so far defrauded of the rewards stipulated to them by Congress; that although it might be uncertain whether the states would accede to plans founded on the proposition before the house, yet, as Congress was convinced of its truth and importance, it was their duty to make the experiment. Mr. BLAND thought, that the ideas of the states on the subject were so averse to a general revenue in the hands of Congress, that if such a revenue were proper it was unattainable; that as the deficiency of the contributions from the states, proceeded, not from their complaints of their inability, but of the inequality of the apportionments, it would be a wiser course to pursue the rule of the Confederation, to wit, to ground the requisition on an actual valuation of lands; that Congress would then stand on firm ground, and try a practicable mode. TUESDAY, January 28. The subject yesterday under discussion was resumed. A division of the question was called for by Mr. WOLCOTT, so as to leave a distinct question on the words "to be collected by Congress," which he did not like. Mr. WILSON considered this mode of collection as essential to the idea of a general revenue, since, without it, the proceeds of the revenue would depend entirely on the punctuality, energy, and unanimity of the states, the want of which led to the present consideration. Mr. HAMILTON was strenuously of the same opinion. Mr. FITZSIMMONS informed Congress that the legislature of Pennsylvania had, at their last meeting, been dissuaded from appropriating their revenue to the payment of their own citizens, creditors of the United States, instead of remitting it to the Continental treasury, merely by the urgent representations of a committee of Congress, and by the hope that some general system in favor of all the public creditors would be adopted; that the legislature were now again assembled, and, although sensible of the tendency of such an example, thought it their duty, and meant, in case the prospect of such a system vanished, to proceed immediately to the separate appropriations formerly in contemplation. On the motion of Mr. MADISON, the whole proposition was new-modelled, as follows: "That it is the opinion of Congress that the establishment of permanent and adequate funds, to operate generally throughout the United States, is indispensably necessary for doing complete justice to the creditors of the United States, for restoring public credit, and for providing for the future exigencies of the war." The words "to be collected under the authority of Congress" were, as a separate question, left to be added afterwards. Mr. RUTLEDGE objected to the term "generally," as implying a degree of uniformity in the tax which would render it unequal. He had in view, particularly, a land tax, according to quality, as had been proposed by the office of finance. He thought the prejudices of the people opposed the idea of a general tax; and seemed, on the whole, to be disinclined to it himself, at least if extended beyond an impost on trade; urging the necessity of pursuing a valuation of land, and requisitions grounded thereon. Mr. LEE seconded the opposition to the term "general." He contended that the states would never consent to a uniform tax, because it would be unequal; that it was, moreover, repugnant to the Articles of Confederation; and, by placing the purse in the same hands with the sword, was subversive of the fundamental principles of liberty. He mentioned the repeal of the impost by Virginia -- himself alone opposing it, and that, too, on the inexpediency in point of time - as proof of the aversion to a general revenue. He reasoned upon the subject, finally, as if it was proposed that Congress should assume and exercise a power immediately, and without the sanction of the states, of levying money on them. Mr. WILSON rose, and explained the import of the motion to be, that Congress should recommend to the states the investing them with power. He observed that the Confederation was so far from precluding, that it expressly provided for, future alterations; that the power given to Congress by that act was too little, not too formidable; that there was more of a centrifugal than centripetal force in the states, and that the funding of a common debt in the manner proposed would produce a salutary invigoration and cement to the Union. Mr. ELLSWORTH acknowledged himself to be undecided in his opinion; that, on the one side, he felt the necessity of Continental funds for making good the Conti *The papers just read, from Virginia, complained of her inability, without mentioning an inequality. This was deemed a strange assertion. |