which it would be necessary to provide above the amount of present ordinary expenditure.

To meet the extraordinary expenses above mentioned, Congress had no funds beyond the surplus already stated, which fell short of the amount required by $1,396,705. In addition to this, two instalments of the debts due the the Bank of the United States, amounting to $400,000, fell due at the close of the year, which, if paid, would increase the amount required by that sum. Under these circumstances it was, in their opinion, necessary to raise the sum of $2,000,000 by a direct tax on lands, houses, and slaves, to be apportioned among the several states, according to the basis of the last census, the mode of assessment and collection to be uniform throughout the United States. This sum, though exceeding the amount required at the moment, was, in contemplation of future demand, as small as was considered safe.

On the subject of the apportionment of the direct taxes, the Secretary was further consulted. His letter of May 25th to the chairman of the committee of ways and means on that subject, proposed some modifications in the details of his original report, principally arising from the increased amount of tax to be levied.

The tax was apportioned to the several states on the enumeration or census of August, 1790, when the whole representative number, including three-fifths of the slaves, was 3,650,250. It was proposed that the tax be assessed to individuals as follows:

"1st. On dwelling houses, to be distributed into nine classes, and taxed uniformly in each class.

2d. On slaves, to be taxed uniformly.

3d. On lands, to be taxed at such rate ad valorem in each state as, with the sums assessed on houses and slaves, will produce the entire amount of the sums apportioned to the respective states."

According to the estimates, the tax on houses, as proposed,

would produce

And the tax on slaves,

$1,315,000 00

228,000 00

Leaving to be raised, by an assessment ad valorem upon lands, the sum of

457,000 00

$2,000,000 00

Bills were subsequently brought in, pursuant to the recommendation of the committee, providing for the valuation of lands and dwelling houses, and the enumeration of slaves within the United States, and to lay and collect a direct tax upon those objects. They were not, however, finally passed until July. Authority was given to the President to borrow $2,000,000, in anticipation of the amount. To answer present exigencies another act was passed, enabling the President to borrow $5,000,000 for the public service, on the most advantageous terms which could be obtained, the stock issued for the loan to be reimbursable at the end of fifteen years, and the monies to be applied to make up the deficiencies in the appropriations and defray the expenses of national defence. For the payment of interest and the reimbursement of principal, the surplus of impost and tonnage duties were bound, and the faith of the United States pledged to provide permanent revenues for any deficiency. The certificates of stock under this act were not, however, issued until the following year. The act of the 30th June, providing an additional armament for the protection of trade, empowered the President to purchase, or contract for the building of a number of vessels on credit, for which 6 per cent. stock of the United States might be issued, the principal to be redeemable at pleasure. Several vessels were obtained under this provision, and in the following year certificates to the amount of $711,700 were issued accordingly. This stock, in the financial history of the country, is known as the navy 6 per cents.

Dear Sir,

FROM ALEXANDER HAMILTON.

[New York], June 29, 1798.

I have this moment seen a bill brought into the Senate, entitled "a Bill to define more particularly the crime of treason," &c.

There are provisions in the bill, which, according to a cursory view, appear to be highly exceptionable, and such as more than any thing else may endanger civil war. I have not time to point out my objections by this post, but I will do it to-morrow. I hope sincerely the thing may not be hurried through. LET US NOT ESTABLISH TYRANNY. Energy is a very different thing from violence. If we make no false step, we shall be essentially united; but if we push things to an extreme, we shall then give to faction body and solidity. Yours truly.

A. HAMILTON.

In reference to the subject of the following letter, it requires to be stated, that a Mr. Lee, who had recently arrived from France, brought with him a number of packets from Talleyrand and others, to prominent members of the French party, in this country. The fact having been discovered, Mr. Lee, it is understood, surrendered them, or a part of them, to government, to relieve himself from the suspicion, which, from this and other circumstances, attached to him, of being connected with some intrigue.

FROM STEPHEN HIGGINSON.

BOSTON, June 29, 1798.

Dear Sir,

I have received a letter from Mr. Stoddert who has assumed the business of the naval department, and with him I am in future to communicate, relative to naval affairs, it is presumed. To him such parts of my former letters to you, will no doubt be communicated, as may call for attention and directions from him.

I see by a publication of William Lee's in a New York paper, that he assures the public that he has delivered to government the packets he received from Talleyrand. This may be true; I hope it is, but I have some doubts. In a late letter to Mr. Pickering, I mentioned the names of Jefferson, Monroe, Randolph, Baldwin, Genet, Bache. There were besides several members of Congress, for whom he had each packets, in all from fifteen to twenty, as a person who saw them displayed on a table conjectured. I hope you will find enough to fix some of them.

The public mind here is growing better, the feelings are rising, a warm and animated address from Congress would bring them to a proper pitch, and if a war is decided on by our government, which I presume, it being the only safe situation possible to be taken in the present state of things, it will be more peculiarly useful. We have opened a subscription for a loan of money to government to build a ship or any other more pressing service, which will amount to $150000 I expect, or more. You will receive from a committee, communications on this subject, who will tender that amount to be applied in building one large or two smaller ships, as shall be directed, to be built on the lowest terms with cash and without any commissions or benefit; the amounts expended to be a loan at 6 per cent., till it shall be convenient to repay it, or the amounts to be applied in any other service which government may think necessary. I think that half a million of dollars may be at once subscribed here, should the affairs of our country require it, and paid in three monthly instalments; perhaps a million.

Let the President go on with his firmness and decision; the Congress must follow, the people will compel them. I am with due respect, sir, your humble

servant.

STEPHEN HIGGINSON.

FROM FISHER AMES.

Dear Sir,

DEDHAM, July 6, 1798.

At last the seeds of federalism which have slept so long in our Dedham ground seem to be sprouting. I have long wished some opportunity to favour the appearance of good sentiments; the 4th of July afforded it. A proposition from me to a young man for an oration, dinner, &c., took very well, and though only a week remained for preparation, it has passed off very well. About sixty clergymen, gentlemen, mechanics, and farmers of Dedham and its vicinity, exceeding in point of influence and respectability, any public meeting I have seen in Dedham, met and dined and drank federal toasts as you will see by the enclosed Gazette. The temper of the company was excellent, and the progress of federalism seems to have begun. Our representative in the general court did not vote for the address, and very properly declined signing that which the company agreed to; but he perceives the strength of the current against his conduct, and would change it, if pride would let him, which it will not. The company almost unanimously signed the address; the extension of the subscription to persons who were not present was not thought proper, and would have occasioned delay.

The detail of a village dinner and its petty politics will not seem wholly trivial to you, as the retired scene affords as good evidence of the working of opinion as the larger, in which the causes of influence are more complicated, and besides it is the first fruits of political conversion in a part of the country which has been exceedingly misled. The vicinity of Boston, the Chronicle, and other causes, have produced Gallicism in abundance. I shall, by the post of to-morrow, send on the address to Col. Pickering. Yours, &c.,

FISHER AMES,

Sir,

FROM STEPHEN HIGGINSON.

BOSTON, July 9th, 1798.

The committee of the subscribers to the loan have written to the Executive for directions as to the application. They have full powers from the subscribers, and will apply the money with judgment and economy. They are men who know the use and value of money, except who was appointed by mistake, and most of them well acquainted with navigation.

Our merchant ships are arming and some are waiting for commissions, which have been expected for some time. Congress do not move as if they were spirited as the times require; the President will stimulate and excite them, I hope, to more energy before they rise. Here the feelings are rising, we shall soon be capable of exertion. I am yours, &c.,

STEPHEN HIGGINSON.

Sir,

BOSTON, July 11, 1798.

I am glad to find that Congress make progress. Though slow they seem to advance towards my point, that of an open and active naval war. Nothing short of this will depress effectually the French faction, or discourage the Directory from continuing their efforts to support their partisans in our country or councils. Since writing the above I have received yours of 5th instant. Mr. Lee has called several times on me to make his communications and apologies, which are not satisfactory to me. They do not, in a high degree, remove a belief that he was charged with those packets which he delivered to you, and others which were forwarded as directed, by Mr. Talleyrand or one of his agents, and that he received passports from the marine office as a compensation, with which he expected to have pursued a beneficial commerce, without danger. Mr. Lee is a weak young man, has no talents or address to become an efficient agent for the French, nor has he a disposition or temper proper for their purposes. His heart appears to be good, without much principle or judgment to guard against flattering temptations; his nerves are not firm, nor his discernment quick, so that he may be easily affected both by his hopes and fears.

It is unfortunate that our friends in Congress are not better united in sentiment and pursuit; the country is in great danger from their divisions and indecision. They want an imposing, firm leader, to direct their measures, and to whip in the stragglers from party and duty. It is weakness and folly, or what is worse, hypocrisy and deceit, to talk of acting independently of party, of judging for oneself, &c. &c. It is impossible for government to get along whilst its friends are so divided and the opposition faction so firm and united. In times like the present, when dangers, novel in their kind and terrible in their aspect, press us on every side, it is provoking to hear men talk of their independence, their candour, their love of conciliation, and their aversion to party, like Mr