NO. 3. VOL. I.] WASHINGTON, SATURDAY, MARCH 16, 1816. [WHOLE NO. 3 PUBLISHED WEEKLY BY JOEL K. MEAD, AT FIVE DOLLARS PER ANNUM. III. Propositions for the improvement and management of the revenue and for the support of public credit. 1,200,000 Such were the limited objects of expense, and such the limited means of supply, at the commence. 1. A cursory review of the financial operations of increase of the expense, and a diminution of the ment of the year in which war was declared. An the government, in reference to the recent state of war supply must have been anticipated as the inevitable In order to introduce to the consideration of congress, with advantage, the measures which will consequence of that event; but the government rebe respectfully suggested, for replacing the finan-posed with confidence, for all the requisi'e support, ces of the United States upon the basis of a peace in capital, and in industry. The confidence was upon the untried resources of he nation, in credit, establishment, a review of the financial operations justly reposed; yet, it may, perhaps, be considered of the government, in reference to the recent state as a subject for regret, and it certainly furnishes a of war, appears to be a necessary preliminary. lesson of practical policy, that there existed no sysThe restrictive system, which commenced in tem, by which the internal resources of the country the year 1807, greatly diminished the product of involved an actual declaration of war, that the aug: tent to answer the exigencies of the time. The exthe public revenue, but it was not until the crisis could be brought at once into ac ion, when the re sources of its external commerce became incompementation in the expences of the government be- istence of such a system would, probabl, have incame obvious and important. With the occasionthe treasury had exceeded the ordinary expendi- would have rendered the pecuniary contributions al aid of temporary loans, the ordinary receipt of vigorated the early movements of the war; might have preserved the public credit unimpaired; and tures, even during the period of a suspended comof the people more equal, as well as more effective. merce; and a report from this department, pre But owing to the want of such a system, a sudden senting the estimates for the year 1812, seems to have given the first intimation, that the portion of and almost an exclusive resort to the public credit, was necessarily adopted as the chief instrument of extraordinary expences to be incurred for the mil-finance. The nature of the instrument emploved itary and naval service, on account of the then existing state of the country, would raise the demands upon the treasury, to a considerable amount, beyond the estimated product of the current revenue. The ordinary disbursements for the vember 1811, the legislative attention was devoted On the opening of the session of congress in Noyear ending on the 30th of September, 1811, were to the organization of the military and naval departstated as amounting to the sum of 13,052,657 dolls. 73 cts; and the ordinary receipts for the same year ment; so that the appropriations for this purpose, ments, upon the enlarged scale of a war establishwere stated as amounting to the sum of 13,541,446 far exceeded, in a short time, the estimates and he dolls. 37 cts. independent of a temporary loan (rai-resources of the treasury, as they have been already sed in 1810 and repaid in 1811) as well as of the balances in the treasury at the commercement and the close of the year. But the estimates for the year 1812, required on account of the current expenses, the sum of 9,400,000 dollars. For the civil and diplomatic departments, For the military department (including the militia, the Indian department, the charge of arsenals, and ar my, ordnance, &c.) 1,260,000 3,415,000 For the naval department, 2,500,000 was soon developed; and it was found that public credit could only be durably maintained upon the broad foundations of public revenue. described. Ways and means were, therefore, provided to meet the extraordinary demands hus created; but they were derived exclusively from the operations of foreign commerce and of public credit. 1. The Mediterranean fund was at first continued until the 4th of March, 813, and afterwards until March, 1815, (when it became extinc) affording an additional duty of 23 per cent. ad valorem, on il imported goods paying duties ad valorem, and a discriminating duty of ten per cent. upon that addition. al duty, in respect to all goods imported in vessels not of the United States.* 2. There were imposed an additional duty of 100 per cent. upon the permanent duties on goods imorted into the United States from any foreign place *See the act of the 25th March, 1804-7 vol. 133-and the 31st fanuary, 1812-11 vol 28-and she act of the 27th of February, 1813-11 vol. 401. a discriminating duty of ten per cent. upon that additional duty, in respect to all goods imported in vessels not of the United States; and an additional duty of 1 dollar 50 cents per ton (the previous duty being at the rate of 50 cents per ton) upon all vessels belonging wholly, or in part, to the subjects of foreign powers. But the continuance of the act being limited to the expiration of one year after the conclusion of the peace, these additional duties will cease on the 17th of February, 1816.* 3 An authority was given to raise by loan, a sum not exceeding 11,000,000 of dollars, and to create stock for the amount bearing interest not exceeding the rate of six per cent. per annum, and reimbursable at any time after the expiration of 12 years from the 1st of January 1813. The payment of the interest, and the redemption or the purchase of this stock, are charged upon the sinking fund. 4. And an authority was given to issue treasury notes, for a sum not exceeding 5,000,000 of dollars bearing interest at the rate of 5 25 per cent. per annum, and reimbursable at such places respective. ly, as should be expressed on the face of the notes, one year after the day on which the same shall have been issued. The notes were declared to be receivable in payment of all duties and taxes laid by the United States, and all public lands sold by their authority; and the payment of the interest, and the redemption or the purchase of these notes, were charged like the funded debt, upon the sinking fund iron ware.) no new source of revenue was then opened; but additional aid was extended to the treasury, by authorising a repe.ition of the appeal to public credit. 1. An authority was given to raise by loan a sum not exceeding 16,000,000 of dollars, and to create stock for the amount, bearing interest not exceeding the rate of six per cent. per annum, and reimbursable at any time after the expiration of twelve years from the 1st of January 1814. The payment of the interes, and the redemp ion or purchase of this stock, are charged upon the sinking fund† 2. And an authority was given to issue treasury notes for a sum not exceeding 5,000,000 of dollars absolutely; with a provisional authority to issue an additional sum of 5,000,000 of dollars, o be deemed and held to be a part of the loan of 16,000,000 of dollars, authorised as above stated, to be raised. The notes were to bear interest at the rate of 5 2-5 dollars per cent. per annum, to be reimbursable at such places respectively, as should be expressed on the face of them, one year after the day on which they should be issued; to be receivable in payment of all duties and taxes laid by the United States, and all the public lands sold by their authority; and the payment of the interest, and the redemption or purchase of these notes, were charged, like the funded debt, upon the sinking fund.+ The necessities of the treasury becoming, how. ever, more urgent, and the reliance on the public credit becoming more hazardous, congress deterThe effect of the additional ways and means pro- mined, at a special session, which commenced in vided by congress, from time to time, during the May 1813, to lay the foundation of a system of inlate war, may readily be traced. From the treasury ternal revenue; selecting, in particular, those subreport, dated the 1st of December 1812 it appears jects of taxation, which were recommended by the that the actual receipts into the treasury, during experience of a former period, and computing their the year ending on the 30th of September 1812, in-general product at the sum of 5,000,000 of dollars.} cluding a portion of the loan, and of the issue of The continuance of these taxes being limited, at treasury notes, amounted to the sum of 16,782,159 first, to one year after the termination of the war. dollars 40 cents (almost double the amount of the they acquired the denomination of "the war taxes," previous estimate and that the actual disburse. but, by subsequent laws, almost all the existing rev. ments, for the same year, amounted to the sum of enues are pledged, with the faith of the United 18,368,3257-100 dollars (which was, also, almost States, to provide for the payment of the expences double the amount of the previous estimate) inde- of government, for the punctual payment of the pubpendent of the balance in the treasury at the com-lic ebt, principal and interest, according to the mencement and the close of the year. But the estimates for the year 1813, required, on account of the accumulating expenditures, a sum of 31,925,000 dollars. For the civil and diplomatie departments For the naval department And for the interest and reimbursement of the principal of the public debt 1,500,000 17,000,000 8,500,000 leaving a deficit, for which it was proposed to provide, 1st, by the outstanding balances of the authorised loan and issue of treasury notes; and, 2d, by a new authority to borrow, and to issue treasury notes, to the amount of 19,925,000 During the sessions of congress, which commenced in November 1812, and closed on the 3d of March 1813, the appropriations for the army, the navy, and the other branches of the public service, were considerably augmented, but (without adver ting to the imposition of a small duty upon imported *See the act of the 1st July, 1812-11 vol. 261. See the annual report of the secretary of the treasury, dated contracts; and for creating an adequate sinking fund, gradually to reduce, and eventually to extin guish, the pblic debt; until those purposes shall be accomplished, or until congress shall provide and substitute by law; for the same purposes, other du ties, which shall be equally productive. In the session of May 1813 1. A direct tax of 3,000,000 of dollars was laid upon the United States, and apportioned to the states respectively for the year 1814; & it was after. wards subjected to the general pledge above stated.§ 2. A duty of four cents per pound was laid upon all sugar refined within the United States. The continuance of the duty, was limited to one year after the war; and as the general pledge has not been applied to it, the duty will cease on the 17th day of February, 1816.¶ ance of persons, kept by any person for his own 3. A duty was laid on all carriages for the convey. *See the act of the 25th of February, 1813, (11th vol. 385.) †See the act of the 8th of February, 1813, (11 vol. 367.) See the act of the 25th of February, 1813, (11 vol. 377.). See the letter of the secretary of the treasury to the chairman of the committee of ways and means, dated Jan. 10. 1812, and the report of the acting-secretary of the treasury, dated 2d of June 1813. See the acts of the 22d of July, and the 2d of August, 1813, and the 9th of January, 1815, (12 vol. 53, 135, 35.) See the act of 24th July, 1813, (12 vol. 88.) use, or to be let out for hire, or for the conveyance || of passengers; which was graduated according to the denomination of the carriage, from the yearly sum of twenty dollars to the yearly sum of two dollars. The continuance of this duty was originally limited to the war; but the general pledge has been applied to it, with some modification in the mode of laying and collecting the duty." 4 A duty was imposed on licenses to distillers of spirituous liquors, which was graduated according || to the capacity of the still, the time of employing it, and the materials consumed. The continuance of this duty was originally limited to the war; but the|| general pledge has been applied to it, with considerable modifications in the principle and provisions of the law.t 5. A duty was laid on sales at auction of merchandize, and of ships and vessels, at the rate of one per cent. of the purcha e money of goods, and of 25 cents for every hundred dollars of the purchase money of ships and vessels. The continuance of this duty was originally limited to the war; but the general pledge has been applied to it, with a considerable addition to the amount, and a modification of the provisions of the law. 6. A duty was laid on licenses to retailers of wines, spirituous liquors, and foreign merchandize, graduated according to the place of retailing, and the nature of the article retailed. The continuance of this duty was originally limited to the war; but the general pledge has been applied to it. ties, will be found as an item of the actual receipts pences new debt, and the instalments of the prin For the military establishment 1,700,000 12,200,000 24,550.000 6,900,000 45,350,000 14,370,000 Leaving a deficit for which it was proposed to provide 1. An authority was given to issue treasury no' es 7. A duty was laid on notes of banks and bankers; for a sum not exceeding five million of dollars, abon honds, obligations, or promissory notes, discount.solutely; with a provisional authority to issue an ed by banks or bankers; and on foreign or inland additional sum of five millions of dollars, to be bills of exchange above 50 dollars, and having one deemed and held to be part of any lon which might or more endorsers, graduated according to the no- be authorised during the session The notes were minal amount of the instrument. The continuance to bear interest at the ra e of 5 2-5 dollers per cent. of this duty was limited to one year after the war; per annum; to be reimbursed at such places respecand as the general pledge has not been applied to it, tively, as should be expressed on the face of them, the duty will cease on the 17th of February, 1816 § one year after the day on which they should be isBut besides the direct tax and the internal duties, sued; to be receivable in payment of all duties and there were added to the resources of the treasury, taxes laid by the Uni ed States, and all public lands during the sessions of May, 1813sold by their authority; and the payment of the in8. A daty of 20 cents per bushel upon all salt im-terest, and the redemption, or purchase of these ported from any foreign place into he U. States; notes, were charged, like the funded debt, upon the which being limited to the war, and not being in sinking fund.t cluded in the general pledge, will cease on the 17th of February, 1816. 2. And an authority was given to raise by a loan a sum not exceeding twenty-five millions of dollars; 9. And an authority to raise a loan not exceeding and to create stock for the amoun, reimbursable 7,500,000 dollars, and to create stock for the amount after the expiration of twelve years from the list reimbursable at any time after the expiration of 12 day of December, 1814. Neither the rate of the years, from the 1st of January, 1814. The rate of interest, nor the price of the stoek was limited; interest was not limited by the law; but it was pro-and the payment of the interest, and the redemp vided that no certificate of stock should be sold at a rate less than 88 per cent. or 88 dollars in money for 100 dollars in stock. The payment of the interest and the redemption or the purchase of this stock are charged upon the sinking found.** tion, or purchase of the stock, are chargeable on the sinking fund.# The embarrassments of the treasury, after the adjournment of congress in the year 1814, become extreme. It appears that the disbursemen during the first half of that year, had amounted to the sum o 19 693,781 dollars 27 cents. For the civil, diplomatic and miscellaneous expences 1,444 062 60 For the military department The sources of revenue thus opened in 1813, could not, however, be expected to aid the treasury until 1814; and, accordingly, in the annual report from this department, dated the 8th of January, For the naval department 1814, neither the direct tax, nor the internal di See the acts of 24th July, 1813, and 15th December 1814, (12 val. 101, 12), tee the acts of the 24th July, 1813, and 24th December, 1814 (12 vol. 105, 18) the acts of the 24th of July, 1813, and the 23d of December, 1814, (2 vol. 111. 26) See the acts of the 2d of August, 1813, and the 23d of Decem ber. 1814, (12 vol. 84. 26.) See the act of the 2d of Aug. 1813 (12 vol. 204.) For the public debt 11,210,238 4,012,199 90 3,026,580 77 19,693,781 27 And the balance of the appropriations for the same ry, dated the 8th of Jan. 1814. see the act of the 4th of March, 1814, (12 vol. 276.) See the act of the 24th March, 1814, (12 vol.) See the annual report of the secretary of the treasury, dated Sept. 1814. And the estimated aggregate of the funds to meet the demands on the treasury to the close of the year 1814 was the sum of Leaving a deficit for the service of 1814, after absorbing all the cash of the treasury amounting to the sum of 37,102,585 55 10,167,536 91 To supply this deficit of 10,167,586 91 dollars; to provide an additional sum for the contingencies of the year; and to accelerate the fiscal measures which were essential to the prosecution of the war, in 1815, the interposition of the legislature was deemed indispensable. The plan of finance, which was predicated on the theory of defraying the extraordinary expenses of the war by successive loans, had already become inoperative. The product of the revenues had ceased to furnish an amount equal to the expenditure of the former peace establishment, with an addition of the interest upon the debt contracted on account of war. And the sudden suspension of specie payments at the principal banks established in the different states (however it may be excused or justified by the apparent necessity of the case) had exposed the government, as well as private citizens, to all the inconveniences of a variable currency, devoid alike of national authority and of national circulation. The treasury could no longer transfer its funds from place to place; and it became, of course, impracticable to maintain the accustomed punctuality in the payment of the public engagements. continued, and a duty on the spirits distilled was added. 4. The duties on sales at auction, and on licenses to retail wines, spirituous liquors, and foreign merchandise were raised. 5. The rates of postage were raised 50 per cent. 2. The following new duties were permanently laid; and the general pledge was applied to them But it was at the same time declared, that so long as the duties imposed on the articles of domestic manufacture should continue to be laid, the duties then payable on the like description of goods imported into the United States, should not be discontinued or diminished. 1. The Duties on various articles manufactured or made for sale within the United States, or their territories; as specified in the annexed table marked B. 2. Duties on articles in use to wit On household furniture, the value of any one family, (with On every gold watch kept for use-2 dollars. But besides establishing these sources of revenue (and others were contemplated at the period, when the treaty of Ghent was announced) congress sought to confer upon the treasury the means of an icipating the collection of the duties; of recovering the punctuality of its payments; and of inviting the cooperation of the monied institutions and monied men of the United States, in plans for restoring an uniform national currency. With these views various measures were sanctioned. 1. An authority was given to raise by loan a sum not exceeding 3,000,000 of dollars (particularly des tined to provide for the expenditures of the last quarter of the year 1814) and to create stock for the amount, reimbursable at any time after the 31st of December, 1814. No limitation was prescribed as to the rate of interest, or the price of the stock, but it was declared, that in payment of subscriptions to this loan, or to loans authorised by any other act of congress, it should be lawful to receive treasury notes becoming due on or before the 1st of January, 1815, at their par value, together with the interest accrued. The payment of the interest, and the redemption, or the purchase of the stock to be thus created, were charged upon the sinking fund, but the act contained these further assurances: 1st. That in addition to the annual sum of 8,000,000 of dollars heretofore appropriated to the sinking fund, adeUnder these circumstances, the congress was con- quate and permanent funds should be provided and vened by the special call of the president, in Sep-appropriated, during the session of congress, for tember 1814, when the citizens of every occupation the payment of the interest, and the reimburse and pursuit, seemed eager to second the legislativement of the principal of the stock; and, 2dly, That efforts to replenish an exhausted treasury, and to an adequate and permanent sinking fund, gradualrenovate the public credit. Commerce continued ly to reduce, and eventually to extinguish the pubto contribute, perhaps, to the extent of its capaci-lic debt, contracted during the war, should also be established during the same session of congress. ty. Agriculture, though suffering the want of a vent for some of its important staples, was every where 2. An authority was given to anticipate the col· lection and receipt of the duties on licenses to disprepared for the requisite exertion. Domestic manufactures, which had scarcely surmounted the first tillers of spirituous liquors, and on distilled spirits, struggle for existence, yielded to the patriotic im- by obtaining a loan upon the pledge of the duties, to an amount not exceeding six millions of dollars, pulse: And the capital of individuals, in all its variety of form, offered a ready tribute to relieve the and at a rate of interest not exceeding six per cent. necessities of the country. Thus, during the sesper annum, and a similar authority was given to raise a like sum at the same rate, by the pledge of sion which commenced in September, 1814, and cloa direct tax. sed on the 3d of March, 1815, 1. The following internal duties were increased in their amount; the duties were rendered permanent; and the general pledge was applied to them: 1. The direct tax was raised to an annual sum of six millions of dollars; and it was extended to the district of Columbia. 2. The duty on carriages was raised, and the duty on the harness was added. 3. The duty on licences to distillers of spirituous liquors was 3. An authority was given to issue treasury notes, for so much of the sums authorised to be borrowed under the acts of the 24th of March and the 15th of November, 1814, as had not been borrowed, or otherwise employed in the issue of treasury notes; provided that the whole amount should not exceed the sum of 7,500,000 dollars. And by the same L 200 [VOL. I. SATURDAY, 4. An authority was given to issue and re-issue 1. These treasury notes might be of any denomination. If they 2. The principal & interest of these treasury notes are not paya- 3. The holders of "small treasury notes" may exchange them at 5. The stock thus created by the exchange of treasury notes, of 3. An authority was given to raise by loan a sum not 6. It was declared, that any holder of any treasury notes issued, or authorised to be issued, under any laws previously passed, might convert them into certificates of funded debt, bearing an interest of six per cent. per annum. 7. And it was declared, that it should be lawful for the secretary of the treasury to cause to be paid the interest upon the treasury notes, which have become due and remain unpaid, as well with respect to the time elapsed before they became due, as with respect to the time that shall elapse after they become due; and until funds shall be assigned for the payment of the said treasury notes, and notice thereof shall be given. The progress of expenditure, and of revenue, for the entire period of the war, is thus developed; and independent of the balance of the appropriations for the year 1814, which is transferred to the accounts for the year 1815, the subject may be reduced to the following general abstract. MARCH 16, 1816 The actual receipts of the Treasury. In 1812 they amounted to the sum of From treasury notes 9.801,132 76 10,002,400 2,835,500 22,639.032 76 133,703,880 31 It will be natural here to enquire into the general effects of the war upon the public debt of the U. States; and the annexed table marked C. exhibits a detailed statement of the unsatisfied amount on the 1st day of Jan. annually, from the year 1791 to the year 1815, both inclusive. The subject, however, may be placed distinctly, in the following point of view, upon estimates referring to the date of the 30th of Sept. 1815. 1. The amount of the funded debt contracted before the war ted at the sum of 39,135,484 dollars 96 cents, to wit: amount being 3,783,284 38 |