The Public Debt. plied by a temporary Loan, to be reimbursed out of the surplus of the fund which, on the 1st of January, 1802, will exist for future redemptions, and which surplus will be sufficient to reimburse this temporary Loan in about thirteen years and a half. It may be proper to remark, that this deficiency upon one year is suffered to exist, to avoid an unnecessary augmentation of revenue, materially beyond the sum permanently requisite. No inconvenience ensues, because this temporary deficiency is made up by the surplus of the permanent fund, within the period mentioned. And that fund, from the 1st of January, 1802, is adequate to all future redemptions, in the full proportion permitted by the contract. important aids, materially accelerating the ultimate redemption of the entire Debt. The employment of these resources, when it can be done, by increasing the interest fund, will proportionably lessen the necessity of using the resource of taxation for creating the proposed annuities, if the Government shall judge it advisable to avail itself of the substitute which may accrue from that circumstance. Having now given a general view of the plan, which has appeared upon the whole the most eligible, it is necessary in the next place to present to the consideration of the House the requisite funds for commencing the execution of it. These will embrace a provision for the first annuity only; that alone requiring, by the plan, immediate proThe table in the schedule B, herewith submit-vision. With regard to a provision for the subseted, will show in one view, the principles and operation of this plan. The schedule C, will exhibit the means of constituting the several annuities proposed to be established. From it, will be seen, that the proposed annuities are to be composed partly of taxes to be successively laid, at the respective periods of creating them, partly of the surplus dividend to be expected on the stock belonging to the Government, in the Bank of the United States, beyond the interest to be paid on account of it, and partly of the funds heretofore pledged for the payment of interest, which will have been liberated upon so much of the Debt as will have been extinguished. The respective amounts of the taxes to be severally laid, will be In the 1st year, In the 2d year, In the 3d year, In the 4th year, In the 5th year, In the 6th year, In the 7th year, Making together, $ 43,199 06 109,391 60 115,955 17 102,912 48 102,743 12 107,680 20 109,649 32 $691,530 95 The sum which will have been redeemed prior to the 1st day of January, 1802, will be $5,443,607 37. The sum redeemable on the 1st of January, 1802, will be $1,126,616 44; and the fund, which will thenceforth exist for the purpose of future redemption, as is particularly shown by the schedule D, will be $1,210,744 34; exceeding the sum strictly necessary by $84.127 90; a fund, which including the interest from year to year liberated, will, as already intimated, be completely adequate to the final redemption of the whole amount of six per cent. stock, as well the deferred as that bearing a present interest, according to the right which has been reserved for that purpose. In the meantime, a further impression will be made upon the Debt by the investment of the residue of the funds, heretofore established, in the purchase of it; and it is hoped that the restoration of peace with the Indians will enable the application of the surplus of the existing revenues, together with the proceeds of the ceded lands in our Western Territory, to the same object. These, whenever they can be brought into action, will be quent annuities, which is proposed to be successive, the Secretary will content himself with this general observation, that he discerns no intrinsic difficulty in making provision for them, as fast as shall be necessary, with due convenience to the people, and consistently with the idea of abstaining from taxing lands and buildings, (with the stock and implements of farms,) reserving them as a resource for those great emergencies, which call for a full exertion of all the contributive faculties of a country. The following means for constituting the first annuity, are respectfully submitted, viz: Annual surplus of the dividend on the stock of Government in the Bank of the United States, beyond the interest to be paid out of the said dividend, estimated at $60,000. Tax on horses, kept or used for the purpose of riding, or of drawing any coach, chariot, phaton, chaise, chair, sulkey, or other carriage, for conveyance of persons; excepting and exempting all horses which are usually and chiefly employed for the purposes of husbandry, or in drawing wagons, wains, drays, carts, or other carriages, for the transportation of produce, goods, merchandise, and commodities, or in carrying burdens, in the course of the trade or occupation of the persons to whom they respectively belong, and the horses of persons in the military service of the United States, viz: For every horse, not above excepted and exempted, at the rate of one dollar per annum, where only one is used or kept by the same person; with an addition of fifty cents per annum per horse, where more than one and not more than two horses are kept or used by the same person; with an addition of one dollar per annum per horse where more than two, and not more than four are kept or used by the same person; and with an addition of one dollar and a half per horse, per annum, where more than four are kept or used by the same person: Provided, That this addition shall not be made in respect to horses usually employed in public stages, for the conveyance of passengers. This progressive increase of rates on the higher numbers, has reference to the presumption of greater wealth, which arises from the possession of such higher numbers. The product of this tax will probably be about The Public Debt. following is respectfully submitted, to wit: That power be given by law to borrow the sum due, to be applied to that reimbursement: and that so much of the dividend on the stock of the Government in the Bank as may be necessary, be appropriated for paying the interest of the sum to be borrowed. equal to the residue of the proposed annuity, which section of the act by which it is incorporated, the is $43,199 06. How near the truth this estimate may prove, experiment alone can, in so untried a case, decide. An aid to this fund may be derived from the surplus dividend on the Bank stock, for the half year ending the last of December next, which it is presumed will be not less than twenty thousand dollars. Should a deficiency appear upon trial, it can be supplied by a future provision. From this operation, it is obvious that a saving Proper regulations for the collection of this tax to the Government will result, equal to the differwill, it is believed, be found not difficult, if the tax ence between the interest which will be payable itself shall be deemed eligible. Its simplicity has on the new Loan and that which is payable on been a considerable recommendation of it. Quali- the sum now due to the Bank. If the proposed fied as it is, it is not likely to fall on any but such Loan can be effected at the rate of those last made who can afford to pay it. The exemption from in Holland, the nett saving to the Government the tax, in regard to horses which are appropriated may be computed at the annual sum of $35,000; to the purposes of husbandry, or of any trade or which saving, whatever it may be, is contemplated occupation, or to the transportation of commodo-as part of the means for constituting the proposed ties, seems to obviate all reasonable objection. If, however, there should appear to the Legislature, reasons for preferring a tax on carriages for pleasure—which, it may be observed, will operate on nearly the same description of persons-the sum required may, it is believed, be produced from the following arrangement of rates, viz: Upon every coach, the annual sum of four dollars; upon every chariot, the annual sum of three dollars; upon every other carriage for the conveyance of persons, having four wheels, the annual sum of two dollars; and upon every chair, sulkey, or other carriage, for the conveyance of persons, having less than four wheels, the annual sum of one dollar. The collection of this tax will be as simple and easy, and perhaps more certain, than that which has been primarily submitted. With regard to the second object referred to the Secretary, namely, the plan of a provision for the reimbursement of the Loan made of the Bank of the United States, pursuant to the eleventh annuities. The benefit of this arrangement will be accelerated, if provision be made for the application of the proceeds of any Loans heretofore obtained, to the payment suggested, on the condition of replacing the sums which may be so applied out of the proceeds of the Loan or Loans which shall be made pursuant to the power above proposed to be given. It will also conduce to the general end in view, if the Legislature shall think proper, to authorize the investment of the funds destined for the purchases of the Debt, in purchases of six per cent. stock, at the market price, though above par. The comparative prices of the several kinds of stock have been, and frequently may be, such as to render it more profitable to make investments in the six per cents. than in any other species of stock. All which is humbly submitted. A. ALEXANDER HAMILTON, Secretary of the Treasury. TREASURY DEPARTMENT, Nov. 30, 1792. Table showing the effect of a sum annually created, equal to the interest of the sum to be redeemed within each year, for a period of nine years, commencing from the 1st of January, 1793, on the supposition that the interest on the sum annually redeemed be invested as it is liberated in the purchase of six per cent. stock, at the price of twenty-two shillings on the pound. N. B. All the calculations in this table proceed upon a rate of five per cent. interest. C. Mode of constituting the proposed annuities. 1793. Surplus dividend of Bank stock beyond the interest which will be payable estimated at Tax 1794. Tax 109,391 60 Loans. But a supplementary provision will be to be made for the second year, equal to the sum of $94,192 04, as the fund in that particular is not annual. This may also arise from the arrears of interest. The payment to be made on the 1st of January, 1802, may proceed from Amount of annuity of third year liberated by reimbursement of third Unappropriated arrears of interest Temporary Loan TREASURY DEPARTMENT, November 30, 1792. 115,955 17 1,126,616 44 ALEXANDER HAMILTON. D. View of redeeming fund to and upon the 1st January, 1802. Interest which will have been liberated by purchases and payments into the Treasury, exclusive of redemptions according to the proposed plan January 1, 1794, by redemption of $550,000 00, rate six per cent. Do 1795 do 583,000 00 do Surplus dividend of Bank stock beyond the interest which will be payable out of it 691,530 95' 60,000 00 [Communicated to the House of Representatives, January 4, 1793.] Resolved, That the Secretary of the Treasury be directed to lay before this House an account of the application of the moneys borrowed in Antwerp and Amsterdam for the United States within the present year. Thursday, December 27. Resolved, That the President of the United States be requested to cause this House to be furnished with a particular account of the several sums borrowed under his authority by the United Loans. States; the terms on which each Loan has been obtained; the applications to which any of the moneys have been made, agreeably to appropriations; and the balances, if any, which remain unapplied. In this statement, it is requested that it may be specified at what times interest commenced on the several sums obtained, and at what times it was stopped, by the several payments made. TREASURY DEPARTMENT, January 3, 1793. SIR: In obedience to an order of the President of the United States, I have the honor to transmit sundry statements, Nos. I, II, III, IV, respecting the several Foreign Loans which have been made under his authority, by the United States, showing, in conformity to the resolution of the House of Representatives of the 27th of December, as far as the materials in the possession of the Treasury will now permit, the several particulars specified in that resolution. These statements will equally fulfil the object of the resolution of the House of the 24th of December. With perfect respect, I have the honor to be, sir, your most obedient and humble servant, ALEXANDER HAMILTON. The Hon. the SPEAKER of the House of Representatives. No. 1. Statement of the several sums which have been borrowed for the use of the United States, by virtue of the acts of the 4th and 12th of August, 1790, showing the particular application of the moneys to the 1st of January, 1793, inclusively, and the balance remaining unapplied. LOANS, (a.) First Loan, made at Amsterdam, commencing on the 1st of February, 1790, at 5 Third Loan, made at Amsterdam, commencing on the 1st of September, 1791, at Florins. st. p. 3,000,000 00 0 2,500,000 00 0 6,000,000 00 0 2,050,000 00 0 3,000,000 00 0 Fifth Loan, made at Amsterdam, commencing on the 1st of January, 1792, at 4 3,000,000 00 0 19,550,000 00 0 872,000 00 0 18,678,000 00 0 |