Public Debt. Proceeds of duties on imports and tonnage during the year 1794, exclusive of drawbacks paid, and payable, therefrom Proceeds of duties on distilled spirits, on snuff, sugar, carriages, goods sold at auction, licenses, estimated at 5,250,000 00 450,000 00 Receipts to September 30, 1794, viz: On account of balances arising on accounts under the late Government $693 50 Postage 18,978 49 Cents and half cents 8,383 00 For interest on the Domestic and Assumed Debts, and on credits to several States ESTIMATED CHARGES UPON THE REVENUE FOR THE YEAR 1795. Appropriations for the service of the year 1795, made and to be made, viz: By the act of March 20, 1794, for expenses of intercourse with foreign nations, in virtue of the act of July 1, 1790, further continued by this act For the Civil Lists, as stated by the Register of the Treasury For expenses of Commissioners of Loans, for clerk-hire and stationery, in case the same shall be authorized by law For interest on temporary Domestic Loans during the year 1795, estimated at 2,000,000, at five per cent. per annum For the Military Establishment during the year 1795, including six months' pay and subsistence of the Navy, and expenses of the militia expedition in 1794 702,861 00 100,000 00 2,940,655 74 NOTE.-The surplusses of certain appropriations, after satisfying the objects for which they were made, may be considered as an additional fund. The amount cannot be ascertained at present, but may be safely calculated at two hundred thousand dollars. ESTIMATED REVENUE OF THE YEAR 1795. Estimated surplus of revenue at the close of the year 1794, above the appropriations charged thereon Estimated product of the duties on imports and tonnage for the year 1795, on a supposition that the additional duties imposed during the last session of Congress will produce 500,000 dollars Estimated product of inland duties for the year 1795, on distilled spirits, and on stills, which, considering the impediments attending the importation of molasses and coarse sugars, and the high price of grain at present, are calculated at $400,000 00 150,000 00 On sales at auction 40,000 00 On refined sugars and snuff 90,000 00 On licenses for retailing foreign spirits and wines 100,000 00 780,000 00 Estimated surplus of the Bank dividend, on stock held by the United States, above the sum which will be due for interest on the Loan for said stock 50,000 00 $7,172,425 38 PUBLIC CREDIT. Public Credit. TREASURY DEPARTMENT, January 16, 1795. SIR: I beg leave, through you, to inform the Senate, that, pursuant to the 2d section of the act establishing the Treasury Department, which expressly makes it the duty of the Secretary of the Treasury to digest and prepare plans for the improvement and management of the revenue and for the support of Public Credit," I have digested and prepared a plan, on the basis of the actual revenues, for the further support of Public Credit, which is ready for communication to the Senate. This plan embraces a further provision for the Subscribed Debt; a provision for converting, with the consent of the creditors, the Foreign into the Domestic Debt; a provision for augmenting the Sinking Fund, so as to render it commensurate with the entire Debt of the United States; suggestions for giving effect to the act of the last session, granting a million of dollars for the purposes of foreign intercourse; with some auxiliary propositions. With perfect respect, I have the honor to be, sir, your obedient servant, ALEXANDER HAMILTON, Secretary of the Treasury. To the VICE PRESIDENT of the United States and President of the Senate. TREASURY DEPARTMENT, January 20, 1795. SIR: Agreeably to the order of the Senate, I have the honor to transmit the plan for the support of Public Credit, announced in my Letter of the 16th instant, together with sundry statements connected with it; and to be your most obedient servant, A. HAMILTON. To the VICE PRESIDENT of the United States and President of the Senate. The Secretary of the Treasury respectfully makes the following Report to the Senate: The President of the United States, with that provident concern for the public welfare which characterizes all his conduct, was pleased, in his Speech to the two Houses of Congress, at the opening of the present session, to invite their attention to the adoption of a definitive plan for the redemption of the Public Debt, and to the consummation of whatsoever may remain unfinished of our system of Public Credit, in order to place that Credit, as far as may be practicable, on grounds which cannot be disturbed, and to prevent that progressive accumulation of Debt, which must ultimately endanger all Government. It was, at the same time, very unjustly intimated, that the period which has elapsed since the commencement of our fiscal measures, (now more than four years,) has so far developed our resources, as to open the way to the important work. And it is matter of solid consolation that the result, presenting a state of our finances, prosperous beyond expectation, solicits the public councils to enter, with zeal and decision, upon mea sures commensurate with the greatness of the interests to be promoted. Under the influence of this conviction, in conformity with the suggestions of the President, and pursuant to the duty which the constitution of the Department, as by law established, enjoins upon the Secretary of the Treasury, he has employed himself in digesting and preparing the materials of a plan for the attainment of the invaluable ends which are recommended. And he now respectfully submits them to the consideration of Congress. Towards a clear and distinct conception of the ends, it will be useful, in the first place, to review means necessary to the accomplishment of these what has been heretofore done. This will be presented under three heads: I. The revenues which have been established; the payment of interest upon it; II. The provisions for funding the Debt, and for III. The provisions for reimbursing and extinguishing the Debt. I. The revenues which have been established appear in the following facts: 1st. An act for laying a duty on goods, wares, and merchandises. imported into the United States." passed June the 1st, 1789. This act, as its title imports, lays various specific and ad valorem rates on all articles (with exception of a few useful to agriculture and manufactures) imported from foreign countries. The lowest ad valorem rate is 5 per cent., with a discount of 10 per cent. in favor of our own bottoms. The duration assigned these duties was the end of the session of Congress next succeeding the 1st day of June, 1796. 2d. "An act imposing duties on tonnage," passed July 20, 1789. This act lays various rates of duty on the tonnage of ships and vessels entered in the United States from foreign countries, and, in certain cases, in one part of the United States to another. It duration was indefinite, no limit having been assigned. 3d. "An act imposing duties on the tonnage of ships and vessels," passed July 20, 1790. This act is a substitute for the one last mentioned, preserving the same rates of duty, but applying them, in some instances, differently. It is, like the former, of indefinite duration. 4th. "An act making further provision for the payment of the Debts of the United States,” passed August 10, 1790. This act repeals, after the last of December, 1790, the duties on imported articles, laid by the act above cited, and substitutes new and generally increased rates, specific and ad valorem. The lowest ad valorem rate in this, as in the former act, is five per cent.; but the number of articles to which it applies is much narrowed; and, instead of a discount in favor of our own bottoms, an addition of 10 per cent. is made to the disadvantage of foreign bottoms. The number of free articles is somewhat extended, in further encouragement of agriculture and manufactures. Public Credit. It is declared that the duties laid by this act shall continue till the Debts and purposes for which they are appropriated shall be satisfied; reserving, however, a right to Congress to substitute other duties or taxes of equal value. 5th. "An act to incorporate the subscribers to the Bank of the United States," passed the 25th of February, 1791. The second section of this act authorizes the President to cause a subscription to be made to the stock of the Bank, on account of the United States, to the amount of $2,000,000; and, with a view to the accomplishment of that object, to borrow of the Bank $2,000,000, to be reimbursed in ten equal yearly instalments. The difference between the interest payable on the Loan and the dividend on the stock, constitutes an item of annual income to the United States. It is unappropriated. 6th. "An act repealing. after the last day of June next, the duties heretofore laid upon distilled spirits imported from abroad, and laying others in their stead; and, also, upon spirits distilled within the United States, and for appropriating the same," passed the 3d of March, 1791. This act, in conformity with its title, repeals, after June, 1791, the duties on imported spirits, laid by the act of the 10th of August, 1790, and establishes, in lieu of them, higher rates, namely, from 20 to 40 cents per gallon, according to proof. It also lays duties, to commence at the same time, upon spirits distilled within the United States; namely, on those from foreign materials from 11 to 30 cents, according to proof; on those from domestic materials, if distilled in cities, towns, or villages, from 9 to 25 cents per gallon, according to proof; if distilled in other places, it imposes a yearly rate of 60 cents per gallon of the capacity of each still, with an option to the distiller to keep and render an account of the produce of his still, and to pay 9 cents per gallon of the quantity of spirits distilled therein. Out of the surplus of these duties, after satisfying the permanent appropriations, certain gross sums are appropriated for the service of the War Department. 8th. "An act concerning the duties on spirits distilled within the United States," passed May 8, 1792. This act repeals, after the last day of June, 1792, the former duties on spirits distilled within the United States and on stills, and, instead of them, establishes lower duties, namely, on those made of foreign materials, from 10 to 25 cents per gallon, according to proof; on those made of domestic materials, if in cities, towns, or villages, or at distilleries, where the stills, singly or together, are of the capacity of 400 gallons or upwards, from 7 to 18 cents per gallon of the spirits distilled, according to the proof; if made in other places, or at distilleries where the stills are of inferior capacity, the yearly rate of 54 cents per gallon of the capacity of each still. A new option is given to the distiller, which is, instead of paying the yearly rate, to take out licenses for the monthly employment of his stills, paying each time 10 cents per gallon of the capacity of each still. These new duties are appropriated in the same manner, and for the same purposes, and are to continue for the same time, as those for which they are substitutes; and, to make good any deficiency which may accrue from lowering the rates, the surplus of the duties imposed by the act of the 2d of the same month is appropriated. "An act to promote the progress of Useful Arts, and to repeal the act heretofore made for that purpose," passed February 21, 1793. This act ordains certain fees to be paid by persons to whom patents are granted for inventions, discoveries, or improvements, and appropriates them to the purpose of defraying clerk-hire in the Department of State. Its duration is indefinite. 9th. "An act to establish the Post Office and Post Roads within the United States," passed May 8, 1794. These duties are appropriated, primarily, in the same manner and to the same purposes as those laid on imported articles by the act of the 10th of August, 1790, and are to continue for the same This act establishes, to commence on the 1st of time, with the like reservation of a right to subJune following, various rates of postage on letters, stitute other duties or taxes of equal value. There is a further appropriation, which will be noticed hereafter. 7th. "An act for raising a further sum of money for the protection of the frontiers, and for other purposes therein mentioned," passed May 2, 1792. This act repeals, after June, 1792, the former duties on a number of imported articles, and establishes higher duties in their stead. and directs that the Postmaster shall render to the Treasury Department a quarterly account of receipts and expenditures, and shall pay, quarterly, into the Treasury, the balance in his hands. The duration of this act is also indefinite. It contains no appropriation of the sums paid into the Treasury. 10th. "An act laying duties upon carriages for the conveyance of persons," passed June 5, 1794. It extends, among other things, the duties on This act lays different rates of duty, from $10 foreign distilled spirits, laying on those made from down to $1, upon carriages for the conveyance of grain 28 to 50 cents per gallon; on others 25 to persons, kept by or for any person, for his or her 46 cents per gallon. The appropriation and dura- own use, or to be let to hire, or for the conveytion of these new duties are conformable and co-ing of passengers; and, to guard against misapextensive with those repealed. There is, likewise, an addition of 2 per cent. to that class of duties ad valorem, which before was rated at 5 per cent., but this additional duty is limited to the term of prehension, declares, that the duties shall not be construed to extend to any carriage usually and chiefly employed in husbandry, or for the transporting or carrying of goods, wares, merchandise, produce, or commodities. Public Credit. The duration of the duties is limited to the end of the session of Congress which shall be next after the term of two years from the time of passing the act. It contains no appropriation. arising from the sales of any other goods, chattels, rights, or credits. The term of these duties is limited to the end of the session next after the expiration of two sell-years from the time of passing the act, which also is without an appropriation. 11th. "An act laying duties on licenses for ing wines and foreign distilled spirituous liquors by retail," passed June 5, 1794. But by an act, entitled "An act making approThis act requires that every retail dealer in priations for certain purposes therein expressed," wines shall take out a yearly license, and shall passed the same 9th of June, 1794, certain specific pay for it a duty of $5; and that every retail sums, amounting together to $1,292,137 38, are dealer in foreign distilled spirituous liquors shall charged upon the proceeds of the revenues which also take out a yearly license, and pay for it a duty are created by the five last mentioned acts, and of $5. It defines a retail dealer in wines to be a there is a reservation made out of them of a sum person who deals in the selling of wines, to be sufficient to pay the interest of whatever moneys carried or sent out of the house, building, or place may be borrowed pursuant to the act, entitled of his or her dwelling, in less quantities at one" An act making further provision for the extime than thirty gallons, except in the original penses attending the intercourse of the United cask, case, box, or package, in which it is import-States with foreign nations," &c., passed the 20th ed. A retail dealer of spirituous liquors to be a of March, 1794, which sum is pledged for the payperson who shall deal in the selling of foreign ment of that interest. distilled spirituous liquors, to be carried or sent out of the house, building, or place of his or her dwelling, in less quantities than twenty gallons at one time. No difference is made between the dealer in several kinds of wines, or several kinds of foreign distilled liquors, and the dealer in one kind. The same duration is assigned to this act as to the one last cited. It is equally without an appropriation. 12th. "An act laying certain duties upon snuff and refined sugar," passed June 5, 1794. This act lays a duty of 8 cents per pound on all snuff, which, after the 30th of September, 1794, should be manufactured within the United States, and of 2 cents per pound on all sugar which, after that day, should be refined within the United States. The remark made upon the two last recited acts is applicable to this, as to the duration of the duties, and the appropriation of their proceeds. 13th. "An act laying additional duties on goods, wares, and merchandises, imported into the United States," passed June 7, 1794. This act lays upon sundry enumerated articles, on their importation from foreign countries, certain specific and ad valorem rates of duty, in addition to those before charged upon them, and adds generally a duty of two and a half per centum on all that class of articles which were before chargeable with seven and a half per centum ad valorem. It also prolongs the temporary two and a half per centum, laidby the act of May 2, 1792, till the 1st of January, 1797, to which period the other duties laid by it are to continue. It contains no appropriation. 14. "An act laying duties on property sold at auction," passed June 9, 1794. These acts comprehend all the current revenues of the United States. Their product will appear hereafter. In addition to them a fund will be derived from the sale of the public lands in the Western Territory. And there likewise occur, from time to time, payments into the Treasury on account of old debts; but these are too casual and of too little magnitude to be more than cursorily mentioned. The lands in the Western Territory, of which the Government of the United States has acquired the right of soil, are estimated, in a report of the late Secretary of State, to amount to 21,000,000 of acres. This quantity, at 20 cents per acre, the price upon former occasions contemplated, would yield a sum of $4,200,000. But it is believed that it would be unsafe to count upon so large a sum. Besides, the uncertainty as to the proportion which may be of a saleable quality, and as to the price which may be obtained for it, the boundary line between the United States and the Indians is understood to be unsettled with regard to a large part of the tract on which the computation is made. If it ultimately yields $3,000,000, it will probably equal every reasonable expectation. II. The provisions for funding the Debt, and for payment of interest upon it, are comprised in the following acts: 1st. "An act making provision for the Debt of the United States," passed August 4, 1790. This act, commonly called the Funding Act, contains these several provisions, viz: 1. It reserves out of the proceeds of the duties on imports and tonnage, for the support of the Government of the United States, and their common defence, the yearly sum of $600,000. 2. It appropriates so much of the same proceeds This act lays a duty on sales at auction, by per- as should be necessary to the payment of interest sons licensed according to the laws of a State or on Foreign Loans, before that time contracted, or this act, prohibiting others from selling at auction, which should afterwards be contracted, for disof one quarter per cent. of the purchase money charging the arrears of interest, and the principal arising from the sale of any right, interest, or es- of antecedent Foreign Loans, to continue so aptate, in lands, tenements, or hereditaments, uten-propriated till the Debt created by those Loans sils in husbandry, farming stock, or ships and ves- should be fully discharged." sels, of one half per cent. of the purchase money 3. It authorizes the President to borrow any Public Credit. sum or sums, not exceeding $12,000,000, to dis- afterwards be demandable only at the Treacharge the arrears of interest upon and the instal-sury. ments of the principal of the Foreign Debt, due and to grow due; and if to be effected on advantageous terms, to pay off the whole of that Debt; and further authorizes him to make such other contracts respecting it as should be found for the interest of the United States, so that no engagement or contract should preclude from reimbursing the sum borrowed within fifteen years after they should be borrowed. 4. In order to adapt the form of the Domestic Debt to the then circumstances of the United States, as far as should be found practicable, "consistently with good faith and the rights of creditors," which it truly declares, "could only be done by a voluntary Loan on their part," it proposes a Loan to the United States, (directing, for that purpose, books for subscriptions to be opened at the Treasury, and by Commissioners of Loans in the several States, on the 1st of October, 1790, and to continue for a year,) the sums subscribed to the Loan to be paid in certain enumerated evidences of the Debt of the United States upon these terms, viz: First. That the interest unpaid on the principal of those evidences should be computed up to the last of December, 1790. Sixth. That, for the regular payment of the interest on the several kinds of stock to arise from the Loan, as it should accrue, including that which is deferred, the proceeds of the public revenues, which, before that time, had been, or, during the then session, should be provided, after reserving, yearly, $600,000, for the support of the Government of the United States, and their common defence, and such sum as should be necessary for payment of interest on the Foreign Loans before mentioned should be, and thereby were, pledged and appropriated till the final redemption of the capital stock. 5. Premising that some of the creditors of the United States might not think fit to become subscribers to the Loan, this act declares that "nothing contained in it should be construed in any wise to alter, abridge, or impair the rights of those creditors of the United States who should not subscribe to the Loan or the contracts upon which their respective claims are founded, but that the said contracts and rights should remain in full force and virtue." And to obviate all idea of compulsion on the creditors to subscribe, it allows to non-subscribers, during the pendency of the Loan, and until the end of the year 1791, a rate per centum, on their respective demands, equal to that which is paid to subscribing creditors; on the sole condition, that the evidences of Debt holden by them, except those which had been issued by the Register of the Treasury, for the registered Debt, should be exchanged for other certificates, specifying the specie amount of those in exchange, for which they were given, and otherwise of the like tenor with those which had therefore been issued by the Register of the Treasury, for the registered Debt; stating, as the grounds of this condition, that some of the certificates then in Second. That, for any sum subscribed and paid in the principal of the Debt, the subscriber should be entitled to one certificate for a sum equal to two-thirds of the sum subscribed, bearing an interest of 6 per cent. per annum, commencing the 1st day of January, 1791, payable quarter-yearly, and subject to redemption by payments not exceeding, in one year, on account of both principal and interest, $8 upon a hundred of the original sum so subscribed and paid; and to another certificate for a sum equal to the remaining third of that sum, which, after the year 1800, should bear a like interest, payable in like manner, and sub-circulation, had not been liquidated to specie vaject to a like rate of redemption; but that the United States, though having a right to redeem in the abovementioned proportion, should not be obliged to do it. Third. That for any sum subscribed and paid in the interest of the Debt, the subscriber should be entitled to a certificate for a sum equal to the sum subscribed, bearing an interest of 3 per cent. per annum, from the said last day of December, 1790, payable quarter-yearly, and redeemable at pleasure, by payment of the principal. Fourth. That the new stock created by the said Loan should be transferable on the books upon which the credit for it should stand by the proprietor or his attorney; these books to be either those kept for the purpose at the Treasury, or by the Commissioners of Loans in the respective States; a mode being provided for the transfer from the books at one place to those at another. Fifth. That the interest shauld be payable wheresoever the credit for the stock should exist, when the payment of the interest should become due; except that the dividend of interest for any quarter of a year which should not be demanded before the expiration of a third quarter, should lue; that most of them were greatly subject to counterfeit; that counterfeits had actually taken place in numerous instances; and that embarrassment and imposition might attend the payment of interest on these certificates in their then form. 6. This act likewise proposes another Loan, to the amount of $21,500,000, payable in the principal and interest, indiscriminately, of the evidences of Debt of the respective States, according to certain quotas, to be conducted in the same manner, and to be open for the same time, as that in the Domestic Debt of the United States. The terms of this Loan to be: First. That, for any sum subscribed, the subscriber should be entitled to one certificate, for a sum equal to four-ninths of the subscribed sum, bearing an interest of six per centum per annum, commencing the 1st day of January, 1791. To another certificate, for a sum equal to two-ninths of the said subscribed sum, bearing an interest, after the year 1800, of six per centum per annum ; and, to a third certificate, for a sum equal to threeninths of the said subscribed sum, bearing an interest of three per centum per annum, commencing on the same first day of January, 1791: the inte |