§ 7. On the third of June the treasury report was laid before the house of representatives, and was by them referred to the committee of ways and means.

The report states that the receipts into the treasury from October 1, 1812, to March 31, 1813, amounted to $15,412,416 25 The balance in the treasury on Sept. 30, was

2,362,652 69

17,775,068 94

15,919,334 41

1,855,734 53

17,775,068 94

In the above statement of receipts is included the sum of 1,086,737 50, being that part of the loan of 16 millions paid into the treasury prior to April 1.

The resources for the residue of the year 1813 consist of the following items, viz.

1. The remainder of the loan above men

The expenses for the last nine months of the present year are

calculated as followeth, viz.

1. Civil list, and all expenses of a civil nature, both foreign and domestic

900,000 00

2. Payments on account of the principal

and interest of the public debt

10,510,000 00

3. Expenses on account of the war and navy departments

17,820,000 00

$29,230,000 00

The above provision being for the present year only, the report suggests the necessity of attending to that for the year 1814 also, and points out the necessity of speedy and effectual means being resorted to for the purpose, as a basis for which it states, that the expenses of the peace establishment, and the interest of the public debt, including that on the loans made for the prose

VOL. I. PART I.

cution of the war, were the least that ought to be raised within and these it states as follows:

each year,

Peace establishment, exclusive of the addition

The internal taxes heretofore proposed were estimated at

5,000,000

600,000

Duty on imported salt, at 20 cents per bushel

5,600,000

§ 8. On the 10th of June, the committee of ways and means made their report, in which they state, that they have reviewed the system heretofore presented, and, taking into consideration its having been sanctioned in its principles by a vote of the house of representatives, have determined to recommend its adoption, with some modifications, in preference to commencing a new system. To meet the sum of $5,600,000, stated by the secretary of the treasuryto be necessary to be raised for the service of the year 1814, in addition to the existing revenue, the committee proposed

A direct tax of

And internal duties as follow:

On stills

3,000,000

765,000

On refined sugars

200,000

On retailers' licences

500,000

The necessary bills accompanied the report.

Instead of following these bills through the several minute and tiresome details of their passage through both houses, we shall present a digested view of the whole system of internal revenue, as it finally passed, and then give a brief sketch of the arguments pro and con.

The laws imposing internal taxes are seven in number, viz.

9. I. A direct tax of three millions of dollars, apportioned to the states, according to the constitutional provision, which ordains that "direct taxes shall be apportioned among the several states, according to their respective numbers, which shall be determined by adding to the whole number of free persons, including those bound to serve for a term of years, and excluding Indians not taxed, three fifths of all other persons."

The quotas of the states are subdivided into portions to be raised in each county, subject to be changed in each state, so as to be more equally or equitably apportioned, by an act of its respective legislature, provided an authenticated copy of the act changing the apportionment be deposited in the office of the secretary of the treasury prior to the first of April, 1814.

The following is the mode adopted for ascertaining the quotas of the counties in the several states:

In those states where there is a state tax, the apportionment of that tax among the counties of the state has been made the rule for apportioning the direct tax; and the quota of each county, of the direct tax, has been made to bear the same proportion to the whole quota of the state, as the amount of the state tax, paid by such county, bears to the whole sum paid in the state for the state tax.

In those states where there is no state tax, or if there be one, the proportions in which it is apportioned among the counties is not known, the principle assumed for a basis is, that the comparative advancement of wealth (or rather the increase in the value of property, subject to the direct tax now to be imposed) and of population in the different districts of the same state, have been equal, since the year 1799; so that if a given portion of a state containing, for example, one fourth of the population of the state, and which paid in 1799 one fourth of the direct tax of that state, now contains one third of the whole population of the state, it ought now to pay one third of the whole tax to be imposed upon the state. And in respect to population for both epochs, although the federal numbers, or numbers represented in congress, have been taken as the constitution directs, for ascertaining the quota of each state, of the whole sum to be raised in the United States, yet, for apportioning the sum thus found

as the quota of any state, among the several counties of that state, the whole numbers of the several counties, including slaves, have been taken; because it is considered that the slaves increase the wealth, or the ability to pay, in a ratio at least equal to the augmented quota which this mode will give to those parts of a state in which slaves are possessed, over those in which there are none or a smaller number. Maryland is the only state where there is a considerable proportion of slaves, to which this mode of apportioning the tax among the counties has been applied.

The process then is, to make the quota of each county in a given state, compared with its population in 1810, bear the same proportion to the present quota of the state, compared with its whole population in 1810, as the quota of the same county, of the direct tax of 1799, compared with its population by the census of 1800, bore to the quota of the whole state of the direct tax of 1799, compared with its whole population in 1800. To effect this there must be found:

1. The proportion which the population of each county in 1800 bore to the population of the whole state at that time. 2. The proportion which the population of the same county bore in 1810 to the population of the whole state in 1810.

3. Then, as the ratio found by No. 1, is to the ratio found by No. 2, so is the quota which the county paid, of the direct tax in 1799, to the sum which would be payable by the same county, of a direct tax at this time, of which the quota of the state in question, would be the same as was the quota of that state of the direct tax, in 1799.

4. Lastly, as the quota of the state in 1799 is to the quota of the state under the direct tax now to be imposed, so is the sum found by No. 3, to the quota of the county under the direct tax now to be imposed.

Exemplified by Rockingham county, New Hampshire :

1. The total population of New Hampshire in 1800, was 183,858, and of Rockingham county, at the same time, 45,427. The proportion 24.7.

2. The total population of New Hampshire, in 1810, was 214,360; of Rockingham county, at the same time, 50,175. The proportion 23.4.

3. The quota of Rockingham county of the direct tax of 1799, was 27,743 dollars. Then, as 24.7: 23.4 :: 27,473 : 26,027 dollars, the sum which would be payable by Rockingham county, if the quota of the state of New Hampshire were now the same as it was in 1799.

4. The quota of New Hampshire (as finally assessed) in 1799, was 77,968 dollars. The quota now proposed for it, is $ 96,793 37. Then, as 77,968: 96,793 37 :: 26,027: 32,311 21, the sum now payable by Rockingham county. Although mathematical accuracy has not thus been attained, no considerable inequality is believed to have been occasioned; and the proposed provision, by which the right is given to the states of altering the quotas of their counties, whenever their legislatures should deem an unjust or unequal apportionment to have been made by the act of congress, has been considered as securing the people of every part of the country from an unfair or oppressive bearing of the tax upon them.

States in which the quotas of counties have been found by comparing their population in 1810 with that in 1800, and the direct tax of 1799: New Hampshire, Rhode Island, Vermont, New York, Pennsylvania, Delaware, and Maryland.

States in which the quotas of counties have been made to bear the same proportion to the whole quota of the state, as the amount of the state taxes in each county bears to the whole amount of the state tax in each state: Massachusetts, Connecticut, New Jersey, Virginia, North Carolina, South Carolina, Georgia, Ohio, and Kentucky.

In Tennessee and Louisiana, the necessary information respecting state taxes has not yet been received.

The act likewise provides that each state may pay its quota into the treasury of the United States, on which a deduction of 15 per cent. will be made, if paid before the tenth of February, and of 10 per cent. if paid before the first of May, 1814, provided the state give the secretary notice of its intention one month prior to such payment. Quotas of the States.

New Hampshire

Rhode Island

Vermont

New York

Pennsylvania

Delaware

Maryland

Massachusetts

Connecticut
New Jersey
Virginia

North Carolina

South Carolina

Georgia

$ 96,793 37

34,702 18

98,343 71

430,141 62

365,479 16

32,046 25

151,623 94

316,270 98

118,167 71

108,871 83

369,018 44

220,238 28

151,905 46

94,936 49