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JANUARY, 1797.]

8th. The debts due to the Bank of the United States, and the Bank of New York

The sums before enumerated are precisely ascertained by the records of the Treasury, and amounting to There are however in circulation various descriptions of certificates, the amount and value of which are not exactly ascertained, which, with the balances of certain unliquidated accounts and arrearages of interest, may possibly rise to

The entire amount of all those capitals upon which no expenditure is incurred, and for which provision is neces

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Upon the principles herein assumed, the average sum to be provided until the year 1809, inclusive, for the extinguishment of the Dutch Debt, will be one million two hundred and fifty-seven thousand four hundred and twenty-six dollars 1,124,404 24 and fourteen cents.

It is proper, however, to state, that the foregoing estimate is founded on a presumption that some systematical plan will be adopted for satisfying the existing contracts, by direct payments from the

sary, may therefore be estimated at 84,850,438 70 Treasury. In every degree in which recourse

To reconcile this representation with re

ports heretofore made from the real amount of the Public Debt, it appears proper to represent that the following sums are indisputable offsets against the capitals before enumerated: 1st. Six per cent. stock bearing a present interest, already purchased or redeemed, and vested in the Commissioners of the Sinking Fund 2d. Six per cent, stock on which interest will accrue after the year 1800, 3d. Three per cent. stock also purchased or redeemed 4th. Stock of the Bank of the United States, sold by the United States, estimated at par

5th. The sum reimbursed at the close of the year 1795, on the six per cent. stock,

Amounting in the whole to

1,170,232, 13

930,753 91

may be had to new loans, the expense of reimbursement will be finally increased by at least the charges of negotiation; these, upon such loans as may be hereafter obtained in Holland, cannot be estimated at less than six or seven per centum, upon the capitals which may be borrowed.

2d. The six per cent. stock now in a course of reimbursement, exclusive of the sum passed to the credit of the Sinking Fund, is twenty-eight millions one hundred and seventy-four thousand five hundred and twenty dollars, eighty-five cents, upon which the annuity of eight per centum amounts $2,253,961 66

to

610,757 94 The capital passed to the credit of
in the Sinking Fund, is one million
one hundred and seventy thou-
sand two hundred and thirty-two
dollars, thirteen cents, upon which
the accruing interest of six per
centum per annum, is

2,000,000 00

544,066 54

$5,255,810 52

Payments annually required by Contracts. 1st. Foreign Debt.-The contracts respecting the Foreign Debt require annual reimbursements by unequal payments until 1809, when the last payment is to be

made.

The whole sum, including principal and interest

The average sum, annually requisite for
the Foreign Debt, during the fourteen
years, which is to continue, is
This calculation, however, supposes the
practicability of such a punctual pro-
vision for the payment of interest, and
principal, as will entirely supersede
the use of temporary credits in Eu-
rope; and it moreover supposes that
remittances can be uniformly made at
the par of exchange. As neither of
these suppositions will be in fact real-
ized, there is to be added to the fore-
going sum the estimated expense of
remittances above par, and for inter-
est on temporary advance to the Uni-
ted States, to insure punctuality;
this expense will not probably be less

$16,772,444 00

Amounting to

70,213 92 $2,324,175 58

This sum, last mentioned, will be annually required until the close of the year 1817. During the year 1818, the demand for the object will decline to about one million eight hundred and sixty-five thousand dollars, and will then cease by the extinguishment of the debt.

3d. The six per cent. stock on which reimbursements will commence in the year 1801, amounted, on the first of July, 1796, to thirteen millions six hundred and forty-eight thousand one hundred 1,197,888 81 and twenty-eight dollars, forty-eight cents, exclusive of nine hundred and thirty thousand seven hundred and fifty-three dollars, ninety-one cents, passed to the credit of the Sinking Fund. The annuity on the first sum, at eight per centum, $1,091,850 28

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The duration of this annuity may be considered as indefinite, for though funds for the redemption of the capital stock are eventually appropriated by the act, entitled "An act making further provision for the support of the Public Credit, and for the redemption of the Public Debt"-yet, by a proviso to the twelfth section of the said act, the power of diverting the appropriation to other objects, is reserved to the Government.

[JANUARY, 1797.

classed according to the epochas for which the
said annuities are to continue, they will require a
provision of revenue as follows:

Ist. From the year 1796 to the end of 1800:
For Foreign Debt

six per cent. stock

three per cent, stock

five and a-half per cent. stock
four and a-half per cent. stock
Unfunded debt

Bank debts

2d. From 1801 to 1809 inclusive, when
the Foreign Debt will be extinguished:
For above

And annuity on deferred debt

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Deduct Foreign Debt

5th. The interest on the stock bearing interest at five and a-half per centum per annum (being one million eight hundred and forty-eight thousand nine hundred dollars) will require one hun-4th. From 1819 to 1824 inclusive, when

dred and one thousand six hundred and eightynine dollars, fifty cents.

6th. The interest on the stock bearing interest at four and a-half per centum, being one hundred and seventy-six thousand dollars, will be annually seven thousand nine hundred and twenty dollars. 7th. The unfunded debt is of two descriptions, viz:

That which is registered, being And that not registered, estimated at

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Amounting to

$179,953 16

Deduct six per cent. stock

$1,257,426 00

2,324,178 00 587,926 00

101,689 00

7,920 00

78,261 00

372,000 00

$4,729,397 00

4,729,398 00

1,147,695 00

5,877,093 00

5,877,094 00

1,257,426 00

4,619,668 00

the deferred stock will be extinguished:
For above

4,619,668 00

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1,124,404 24

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For this debt no provision has been made by law, except a partial grant from year to year, on account of interest. So far as the debt has been liquidated, the public are bound by contract, to pay an interest of six per centum per annum. Similar engagements will be expressed in the certificates hereafter to be issued; to discharge which By establishing revenue adequate to current interest, there will be annually required the sum expenses of Government, in addition to the foreof seventy-eight thousand two hundred and sixty-going estimate, during the periods above recited, one dollars, forty-one cents. the following reductions of Debt would be effected: 1. At the close of 1809, the Foreign

2.

Debt

8th. The debts due to the Bank of the United States, and Bank of New York, amount to six millions two hundred thousand dollars; though a part of this sum was borrowed at five per centum per annum, yet as the existing contracts are expected to be satisfied from the proceeds of new loans at six per centum, the annuity chargeable upon 3. At the close of the year 1824, the the revenue, is calculated at this last rate, being three hundred and seventy-two thousand dollars.

The annuities before-recited comprise all the demands which will be made upon the Treasury in consequence of the present debt of the United States; and being reduced to aggregate sums and

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$11,800,000 00

29,344,752 98

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14,578,882 39 $55,723,635 37

After the reimbursement of the foregoing sums, there would still remain of the present debt

JANUARY, 1797.]

1. The 3 per cent. stock, being 2. The 5 per cent. stock

3. The 4 per cent. stock

4. The unfunded and unliquidated Debts

Additional Revenue.

176,000 00 1,304,356 97

[H. or R.

- $19,527,545 93lic Debt, on or before the year 1824, yet, that the 1,841,900 00 absolute engagements of the United States will not require, after the year 1809, more than seven millions three hundred and nineteen thousand six hundred and sixty-eight dollars and thirty-six cents; which last sum is less than the annual expenditure required by existing contracts and arrangements.

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5. The Debts due to Banks, or the stocks which may be substituted thereof

6,200,000 00

Amounting in the whole, to - $29,126,802 90

If, however, the United States can establish a revenue equal to the scale of expenditure which will be necessary in the year 1801, the whole Debt may be extinguished by payment or purchase, on or before the end of the year 1824; as, also, a considerable additional Debt, if such should accrue from future contingencies.

The foregoing calculations being founded on existing contracts, are liable to but little uncertainty; it is necessary, however, to form an estimate of the probable expenses of those establishments which the United States must at all times maintain. On this subject there exists no data from past experience, which afforded a satisfactory ground for an opinion; it is believed, however, that it will be unsafe and deceptive to calculate the current expenses of Government, at less than the following estimate:

For the support of the Civil List

For expenses of intercourse with foreign nations

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For the Mint Establishment

$486,000 00

100,000 00 40,000 00

Having thus presented a view of the probable expenditures of the United States, it remains to show how far the revenues, already established, afford an adequate resource; the particulars and amount of these revenues, are as follows: Duties arising on imports and tonnage calculated upon the actual receipts during the year 1795

Duties on domestic distilled spirits and
on stills, on refined sugar, sales at
auction, licenses to retail spirits and
wines, and on carriages for the con-
veyance of persons, calculated upon
the receipts of 1795
Revenue from the Post Office -
Dividends on Bank stock, calculated

with reference to certain sales, the
proceeds of which will be applied to
the payment of part of the Debt due
the Bank of the United States

Interest on stock purchased and redeemed, and vested in the Sinking Fund

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Duties on patents and contingent receipts, (uncertain)

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$5,588,961 26

337,255 36 35,000 00

150,000 00

886,636. 65

746 73

$6,200,600 00

It results that the following sums must be provided, in addition to existing revenue, viz: 1. From the present time to the end of

1800

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2. From 1801 to the end of 1809

Amounting in the whole, annually, to $2,700,000 00 3. From 1810 to the end of 1823

If it shall be found that the expenses of the Military and Naval departments cannot be reduced below the above estimate, which, though much to be desired, is far from certain, the foregoing calculation will fall short of the real expenses; it being morally certain that the expenses of Civil Government will hereafter considerably increase. Assuming it, however, as a principle, that the expenses of the public establishments will amount to two millions seven hundred thousand dollars, and no more, it follows that, to preserve the United States from the necessity of recurring to future Loans, it is requisite to establish a revenue to continue until the close of the year 1800, of seven millions four hundred and twenty-nine thousand three hundred and ninety-eight dollars and ninetynine cents. And, from the year 1801 to the year 1809, inclusive, a revenue of eight millions five hundred and seventy-seven thousand and ninetyfour dollars and fifty cents.

It is a further consequence of the foregoing data, that though a revenue upon this last scale would be more than sufficient to discharge the whole Pub

$1,228,798 00

2,376,494 00

1,119,068 00

$4,724,360 00

To provide sums annually required till 1801, may be done without imposing inconvenient burdens.

To reimburse the whole Foreign Debt, by direct payments before 1824, may be practicable. It is, however probable, that occasional Loans will be advisable, with a view of postponing the final reimbursement of part until after 1818, when the present six per cent. debt will be discharged.

Mr. SMITH said, since Loans could not now be had upon any reasonable terms, there was no way of raising the money wanted, but by taxes upon the people. The question was, what sort of taxes should be resorted to? Members, he said, were divided between direct and indirect taxes; but all were agreed that an additional revenue of one million two hundred thousand dollars being wanted, some effectual steps were necessary to be taken. If indirect taxes had proved insufficient, it was necessary to have recourse to some other;

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he knew of no other that would be so effectual as a direct tax on land.

With respect to raising further revenue from commerce, he believed it was not possible to do it to any considerable extent; and this source, he said, was, at best, but a precarious one. If, then, they had tried all other sources without effect, they should be obliged to have recourse to a land tax. And he would submit it to gentlemen whether it was not best to meet the difficulty at once. If, said he, the necessities of Government, the public safety, the credit of the country, require it, it is necessary and proper we should look the evil

in the face.

Notwithstanding he delivered this opinion, Mr. S. said, he should be glad to hear the sentiments of gentlemen on the subject, who were in favor of other plans, though he was apprehensive they should be obliged to have recourse to the source he had mentioned.

Indeed, there was one view of the subject which would make such a system desirable, though our necessities did not immediately require it. At present, he said, almost the whole of our revenue arose from commerce, and was liable to be very much deranged by any European war, and to be wholly destroyed, if this country should engage in a war. It were to be wished, therefore, that there should be a plan created, which might, at any time, by a short notice, be carried into effect to an extent which should be equal to the necessities of Government. Nothing would answer this purpose so well as a tax on land. Suppose, he said, the plan was originated with two hundred thousand dollars, having the system open, they could at any time raise it to one or two millions; as, if certain descriptions of land were charged a quarter per cent., they might easily be advanced to one-half, three-quarters, or one per cent., without embarrassment.

[JANUARY, 1797.

wanted could be better raised in any other way, they would, of course, propose their plans; but he hoped they should not shift from one thing to another, without fixing on any thing, since the wants of Government must be supplied.

Mr. Corr hoped the resolution would be adopted; not that he wished to pledge himself to agree to any system of direct taxation which might be proposed. He looked upon the agreeing to the resolution as only one step. Whether, eventually, such a plan could be devised as the House should approve, was uncertain; but he should wish to look at the plan which gentlemen had in contemplation.

Mr. HARPER said, if they could look at the plan, as the gentleman from Connecticut [Mr. Corr] had supposed, without pledging themselves to adopt a system of direct taxation, he should also be glad to see it; but, he believed, to adopt the resolution before them, would be to decide upon the principle of direct taxation. Afterwards, all the question would be as to the modification of the system, and the manner in which it should be carried into effect. But, he believed, a majority of that House neither was nor would be prepared to say, this was the most eligible and convenient mode of raising revenue.

It was true that they all knew, they knew it last session, that the money wanted ($1,200,000 additional revenue) must be raised from the people by means of taxation. The question was only about the mode. The Committee of Ways and Means had given them a resolution of four lines, that direct taxation ought to be laid; but how, or under what modification, or how the difficulties which were acknowledged to exist, were to be got over, they were not told; but they were called upon to determine upon the principle, without any information on the subject. He wished the Committee of Ways and Means might be instructed to give them the data upon which they meant to found their plan; that they might be instructed to show them the means by which this plan was to be effected-how this direct tax was to be collected. They, doubtless, had considered this; but the Committee of the Whole had not considered it; nor had they the materials for going into the investigation. It was his desire that, before they committed themselves, they might know more about the matter than they then knew; that they should have the system before them, and that they might not decide upon the abstract principle, without having that system. He should, therefore, be against the resolution, and move for the Committee to rise, that the report might be recommitted, for the purpose of obtaining a skeleton, in which way they please, of the plan which had been contemplated. He hoped the Committee would be discharged.

Mr. S. said, this subject had been frequently under the consideration of the Committee of Ways and Means, and had always been considered as a subject of great importance, and as attended with considerable difficulties. There had always been a division in that committee on this subject, certain of them wishing to raise the money by indirect, and others by direct taxation, but it had always been found that, when they turned from direct to indirect taxation, so many objections were brought against any plan which was proposed, that there was no possibility of proceeding. In the last session, several objects were proposed, but they were objected to, and abandoned; at length they had determined to resort to a system of direct taxation, and had accordingly given directions to the Secretary of the Treasury to prepare a plan for the purpose. This plan had been reported, and referred to the Committee of Ways and Means; and before that committee chose to Mr. SWANWICK hoped the Committee would go further into the matter, they wished the House not rise, until they had determined upon a questo determine upon the principle; afterwards, if a tion which was of the first importance to this majority should be in favor of direct taxation, the country; a question which it had been well for committee would bring in such a bill as should us if it had been introduced long ago, but which, appear to them to be least burdensome to the peo- he trusted, was not now too late to be of essenple. But, if gentlemen were of opinion the money | tial service. At present produce was falling,

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and, of course. any tax upon the farmer would not be so well received as if their produce was upon the rise; but, he trusted, the wealth of the country must have become so considerable, from the high price which every agricultural production had long been at, as to enable them very well to support the necessary expenses of Government. These expenses, they knew, must be supplied from one of three sources: either from loans which have heretofore been made in Europe, at great expense of agency, brokerage, commission, &c., or from impost, or by internal revenue, or excise.

Into what situation, he asked, had this loanmaking business brought this country? They had created, what seemed to be wished on all hands to be avoided. a foreign influence over this country. It had made us dependent upon what it was not in our power to control-upon every accident which might happen at Amsterdam or Antwerp, and every part of the globe. So far as related to imposts, this source of revenue was exposed to the influence of war, and absolutely dependent upon any foreign Government which might please to annoy us. Was this, he asked, an enviable situation? He thought not. This dependence upon foreign nations was a great disadvantage in all negotiations. With respect to excise, he need not say how unproductive it had been. The article of snuff, instead of producing anything, had brought the revenue in debt; and the excise on another article, had called forth the military to enforce it. For his part he saw.no way of avoiding these difficulties, but to come to that cardinal point, which they had now in view, of direct taxation. He should, therefore, be in favor of the resolution before them, because it fixed the principle.

[H. OF R.

the present, there would be no security for supporting the expenses of our Government; nor could any negotiation ever be properly supported, until the yeomanry of our country should join in the support of our common interest. It was absolutely necessary to decide upon one of two principles, either to support commerce by a Navy, and thereby secure the revenue arising from it, or else call upon agriculture to bear its full share of the public burdens. He therefore wished the principle to be settled without regard to modification, because the more simple the light in which the object was placed the better. The modification would properly be an after-business; and, when members had agreed upon the necessity of adopting the principle of a direct tax, their opposition to any particular plans which might be offered would be moderated, so that the best system which could be devised would probably be adopted. It had been recommended by the PRESIDENT OF THE UNITED STATES, in half a dozen successive communications, that the National Debt should be reduced. This could not be done without the assistance of agriculture; for, whenever the duty on commerce was made extravagant, smuggling was introduced, and the duty, instead of being increased, was lessened. In Britain this had been notoriously the case.

They put a tax on tea, by which smuggling was brought to such an enormous height that they were, after every endeavor, obliged to abandon it.

This, Mr. S. said, was the most important question which was ever brought before that House. He trembled every day when he considered upon what a shadow the revenues of this Government rested-upon what every nation seemed to rob us of: for, added he, all are agreed in one point, however they may disagree in others, viz: to rob and ill-treat us. They were, indeed, invited to do this; for we have no barriers but Treaties, and they are worse than nothing.

It was necessary. Mr. S. said, to the importance and firmness of Government, to determine whether the land of the country be not equal to bear its share in the expenses of Government. This had hitherto been evaded; but, he trusted, this Mr. S. said, we had no dependence upon our mass of property would no longer escape from revenue; at any rate, it has not more than suppaying its due proportion towards the public bur-ported our present expenses. Suppose, added he, dens. For, when it was known in foreign countries, that all our revenue was bottomed upon our commerce, it was holding out an invitation to them to play off hostilities upon us. Great Britain had taken the lead in annoying our trade, which had brought us to the British Treaty. This had produced great disadvantage to some, though some few might have had a trifling benefit. We were now brought into another situation by that instrument; the French were now laying hold of our commerce.

all the present nations at war, make peace, would there then be no danger of a defalcation of revenue? There could be no doubt of it. So that whether war or peace, no certain dependence could be placed upon our revenue.

Did it not, then, become Government to look to something more substantial than commerce for support? It certainly did. Let us fix upon the principle of a direct tax, and not be deterred at the threshold of the business. To say it was impossible to fix upon such a plan, so as to be generally satisfactory, would be to say we could not do what many other nations had done. It were to make an acknowledgment in the face of the world of our own imbecility.

It was said that Great Britain drew very little support from her land. in comparison to what she drew from her commerce; but she had a fleet to defend her commerce, and therefore, if she drew a great deal from it, she was also at some expense He would again repeat that it would have been in supporting it. Our trade was unprotected. It better for. this country if the present plan had been was true, we obtained seven million of dollars adopted sooner. However, as we had lately defrom it, without being at any expense in return.clared ourselves the most prosperous, the most But there was no certainty of this; it was a mere phantom, it was gone, and without some plan like

free and enlightened country in the world, this could not be an improper time for introducing it.

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