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MAY, 1794.)

Public Credit.

[H. OF R.

committee appointed to inquire whether any, or would be better if the money were all owing to what, further or other revenues are necessary for American citizens. But, while things are in their the support of public credit; and, if further reve- present state, this tax would enable such foreigners nues are necessary, to report the ways and means. to buy more debt out of the country and send less

Two resolutions were read: the first was, that money into it in place of the debt. Public Debt five cents per hundred dollars be laid on every is a ground which cannot be trod with impunity. transference of stocks in the public funds; and the We may soon, on such a precedent, go still greater second, that five cents per hundred dollars be laid lengths; a few events may force us to apply to on the transference of stock in any of the other the moneyed men, and then will be seen and felt Banks of the United States.

the miserable termination of this policy. Mr. S. Smith said, that if this tax seemed too Mr. Clark said, that the gentleman (Mr. Ames] light, it was to be remembered that transferences had made a long speech with respect to newspawere frequent.

pers. What was his meaning, or what he referred Mr. HUNTER, of South Carolina, had a resolu-io, Mr. C. could not tell; but he supposed that the tion of the same kind in his hand, but when hear- gentleman had an intention of publishing his ing the others read, he preferred them to his own. speech in answer to these newspapers. It was to

Mr. Ames, in a speech of some length, enlarged be hoped that he would make it so that it could on the state of Public Credit, and the propriety be understood. If it contained arguments, they and necessity of its being supported by Govern- were above his reach, and there he should leave ment, since it had once been adopted. This tax it

. He closed with speaking a few words on a on the transference of the Public Funds tended proposal for taxing bonds. to injure it, by sinking their value.

When we

Mr. Lyman observed that, notwithstanding there next want to borrow, and shall go to market, the were many objections against this part of the lenders will rise proportionably in their demands, stamp duty, he was willing, if the whole report of and refuse a loan on the terms which they before the select committee was embraced, and the docaccepted. Hence we shall lose, instead of gaining trine of stamps introduced, that the item now beby it. Let gentlemen reflect on the consequences fore the Committee should be blended with the of unsettling all ideas of property, which must be others; but he had many doubts in his mind the result of this proceeding. He was not one of against the expediency of resorting to that source those who despised the Funding System because of revenue at this time, and hoped that other more it was unpopular, for it was the property of a Re- convenient sources might be found. public to set right above power. The Funding Mr. Boudinot had no doubt of the right of GoSystem had of late become a favorite topic of vernment to lay the proposed tax of five cents per newspaper eloquence. As parties were insepara- hundred dollars on the transference of public funds. ble from the nature of a popular Government, so He saw no reason why that kind of property this subject had been employed as an engine to should be exempted from the right exercised of render that of America an object of contempt and taxing other property. So far as the moral prinabhorrence. It had been loudly said, that the Re- ciple went, he was satisfied; and he had yesterday, presentatives in Congress from one of the New on first hearing of this scheme, resolved to support England States had immense property in the Pub- it. But, in imposing taxes, we must consult not lic Funds, when, in fact, their whole income from only morality but expediency; and here he had that source was not sufficient for buying oats for numerous objections to the resolution in its pretheir horses. To say, therefore, that they were sent shape. He wished to make it a stamp on under influence in their political conduct from every transference, without regarding the sum, beşuch motives, was the merest bagatelle that can cause when it came to be a considerable sum, such be conceived; and the groundless jealousy that it as a thousand dollars, the duty would not be paid. has excited may be considered as a very strong The duty of five cents amounts, on a thousand counter-balance to the interest of those members dollars, only to half a dollar. He wished to make who were the objects of suspicion. People dream no distinction by specifying the transferences of that Congress are voting money into their own Public Funds, but just to make it, at once, upon pockets. The propagation of this idea promotes all transferences of money. By this reserve in the dirty purposes of slander, abuse, and falsehood. expressing the intention of the clauses

, the House By such unworthy means, the blossoms of public would avoid giving any alarm to public creditors, confidence in Government are mildewed and and the matter would pass with little or no notice. blasted. This is more especially the case in the But if the clause stood alone, in this marked way, Southern States; and this dissatisfaction offers an the report might reach Europe that American apology for taking notice, in this House, of the funds were to be taxed, and the very sound of such abuse of newspapers. In the United States, taxa- a measure might do us more mischief than the obtion of the Public Funds is nothing more or less ject was worth. Mr. B. stated an error adopted than the debtor taxing the creditor; and so ques in the old Governments of Europe as to taxing tionable an expedient will recoil with tenfold force public funds. They had been taxed specifically on the credit of Government itself. The progress under that title, which sunk their value. But a of this measure would degrade the Public Debt tax should have been contrived for property in into a paper rag. It had been complained of in general, that would have comprehended them this country, that foreigners had too great a share without pointing them out in particular, which in the Funds, and Mr. A. was of opinion that it I always sunk their value. Returning to the ques

3d Con.-21

H. OP R.)

Public Credit.

[MAY, 1794.

tion before the House, he foretold with confidence past, where there had not been some pointed alluthat, if the tax were imposed without any refersion to this paper bugbear. This Government, ence to the sum transferred, there would be fifteen said Mr. A., has been painted as an object of suspior twenty bonds, if the duty was moderate, for one cion and abhorrence. The gentleman (Mr. CLARK] upon the present plan, by which twenty shifts complains that I am beyond his reach. He has would be made before a bond would be employed. made himself sufficiently intelligible, and has perAt the same time, he was satisfied that the right haps had his share in drawing such pictures. of Congress was equal to the taxation of public Recurring to the question before the Committee, funds, as well as of any thing else.

he said that, when the Funding Act passed, no Mr. Tracy objected to the imposition of a tax man will affirm that there was any notion of such upon this kind of property. On this question he a tax understood. No civilized nation can keep was at freedom to speak with perfect impartiality, its credit while it taxes its public funds. Property for he had never once seen public paper till he is in general, to be sure, a fair object of taxation, came to Philadelphia, and he most certainly never but this tax cannot be levied with perfect equality, owned a single farthing of it since he had an ex- for it is beyond the knowledge of any Governistence. The clamors, therefore, with regard to a ment; and, were it even within the knowledge of paper interest, could not be applied to him. But, a legislator, still it is beyond his power. There by giving this explanation, he did not mean to say was no way to get at an exact acquaintance with that if he had been a stockholder he would have the universal state of property, but by cutting off suppressed his sentiments. Gentlemen in that people's heads and searching their repositories. situation were just as much entitled to attention Mr. Winn wished to know who were the crediand confidence on this question as any other mem-tors in the public funds. Are they the original bers. After this introduction, Mr. T. went on to holders, the poor soldiers, who gave birth to this state, that it was an act of injustice to tax the trans- country? Or are they a set of men who have ference of public debts, for this reason, that a free- purchased the claims of these poor soldiers for a dom of transference was part of the bargain be trifle, perhaps for half a crown in the pound? tween Government and its creditors. He had no Surely, if this be the case, no creditor would verbose arguments on the subject. His objections grumble in paying the proposed tax on the transwere simple, and come at once to the point. A ler; and, if he should complain, was it tolerable breach of bargain was a breach of honesty, and as to hear such a property held up as an unfit object such could never meet with approbation from him. for taxation ? We gave paper, said Mr. T.; transferability form- On dividing the Committee, on the motion for ed a part of it. Now, we come forward and say a tax of five cents per hundred dollars upon the to the creditor, you shall not transter unless you transfer of public debts, fifty-three members were give up a part of your debt. He would have been in favor of it-the nays in the question were not very glad to vote for this tax, if he could have counted. voted consistently with justice; but, feeling as he

The motion for a tax to the same extent, on did, he could not give his consent.

every transference of Bank stock, passed unaniMr. Nicholas was of an opposite opinion from mously. Mr. Tracy, as to the justice of the tax.

A resolution for a tax on manufactured snuff convinced of that, as well as of its expediency. It and tobacco was next read. Mr. Scott rose and had been urged that we should pay three or four observed, that it was a home manufacture, and he times more in the next loan, in proportion, than did not wish to meddle with it, for that was a bad the tax was worth, because, when the system of precedent. He should therefore move to strike laying a duty on the funds was once begun, there it out. was nobody could say where it was to end, and Mr. Murray hoped, that the motion for striking therefore every body would scruple to give us out the tax on snuff and tobacco would not succredit. To this his answer was, that the funds ceed. At a moment when we are looking about already borrowed could not be affected by this for proper sources of revenue, he thought that bill, because they were already in our hands; and, these objects came very aptly into view. They as to the future loans, in these the creditors had it are articles that will bear a moderate tax, in parin their power to make an express stipulation for ticular the first. It is true, that a tax on snuff will no tax on their funds. This would answer the not operate upon all men, but those who will be purpose completely; without recurring to those affected by it are well able to bear it. It will be alarming presages of the loss of credit.

paid by the wealthy, and it will be paid with the Mr. Ames, in reply to Mr. Clark, said, that the less reluctance, because its use is in a habit, which gentleman had complained of his being unintelli- a man does not easily give up, and which, from gible. With regard to the defence that he had its nature, can never be expensive. The quantity made of the character of members, reported to be consumed by an individual is small, and the articreditors in the funds, the style of newspapers, of|cle itself is here extremely cheap. Formerly a pamphlets, and of debates in that House, alto-pound of snuff was sold at the lowest at threegether justified the propriety of an explicit vindi- fourths of a dollar per pound. Snuff was now cation. He appealed to every member who heard manufactured in this country as good as that imhim that, excepting only the debate on the ad-ported, and is sold at a quarter of a dollar per discussion of any length, for a considerable time I home manufacture, the precedent had already ob

had .

He was

May, 1794.]

Public Credit.

[H. OF R.

tained in the duty on distilled spirits. Mr. M. ap- home made article to a competition with the proved the principle of taxation that connected foreign article. Notwithstanding this tax, Amerthe payment with an enjoyment of luxury. The ican snuff would forever undersell that imported, mind lost its repugnance in the pleasure derived from its being twice, if not thrice, as cheap. For, from the article taxed, if the discharge of the tax even after the eight cents proposed on snuff preceded the gratification.

was paid, the price would be extremely low. As Mr. Macon observed, that the tax came to about to any opposition to the collection of the excise, a four dollars per hundred weight, whereas the raw possibility which had been adverted to by some material itself cost about three dollars. This was, former speaker, he thought that no argument could he believed, the first instance in the history of be derived from that, which at once held up the taxation where a raw material was taxed to more folly of those who constituted the example. He than its value. He was entirely against the reso- did not fear that any class of citizens would be so lution.

riotous, so ignorant, so savage, as to resist the Mr. Findley entertained an opinion that the measures of Government. The enlightened freeresolution was in its principle ensnaring, and could men of this country would not tumultuously op, never be reduced to practice. People would raise pose a law made by legislators whom they had it for themselves, as in fact a great number do at themselves chosen. 'He thought the tax easy, as present. In the country, boys were suffered to falling on the more wealthy, and one which would plant and sell it; and how was it possible to raise by no means affect the staple of the country. a revenue on such resources? It never could be Mr. CLARK was against the resolution. made productive, but it would ruin the manu- Mr.'S. Smith agreed perfectly with the judgfacture.

ment of the member from Pennsylvania, (Mr. Mr. S. SMITH, of Maryland, said that he be- Findley,] that the tax would destroy the manulieved his colleagues Mr. Murray] felt some deli- facture, and raise nothing. Every body would cacy upon this subject, and, making use of tobacco use a kind of unmanufactured tobacco, that has a himself, did not choose to oppose the tax, from a well known name, as there was no mention of desire of appearing disinterested. After some that article in the bill. other remarks of an amusing nature, he stated that Mr. Ames approved the tax, as one of the best this tax went directly to the destruction of the which he knew. staple commodity of three or four States in the Mr. Madison had always opposed every tax of Union. It was likewise, in another point of view, this nature, and he should upon all occasions pera dangerous precedent; for we should next go sist in opposing them. If we look into the state round all our manufactures, and every thing would of those nations who are harnessed in taxes, we be taxed; he was against the resolution. shall universally find that, in a moral, political,

Mr. Fitzsimons considered the present as one and commercial point of view, excise is the most of the best resolutions in the list. He did not destructive of all resources. He did not say this, know what he would have been more ready to because excise had been a frequent topic of popupropose.

lar declamation. He was not guided by that, but Mr. SEDGWICK was of the same opinion. he knew, and was sensible, that it produced almost

Mr. W. Smith could not discorer why tobacco in every case the most disagreeable consequences. might not be taxed, just as well as salt and other Yet he admitted that the excise upon ardent articles. We cannot step into a coach without spirits was a very natural expedient in the Amer. paying a tax-why then scruple to tax other arti- ican Government, who saw such immense quancles of luxury?

tities of foreign spirits imported. Much of the Mr. MURRAY, in reply to Mr. S. Smith, said, collection of this tax on tobacco would depend on that if he thought the tax would injure one of the the oath of the manufacturer, and this was but staples of Maryland, it would be with great cau- another term for the multiplication of perjuries. tion that he should support it. But he denied any The tax would therefore injure the morals of the such consequence. The price of snuff is a price people. He liked much beiter some other taxes annexed to the labor and ingenuity of the manu- in the list before the House, and recourse might be facturer, and not an effect of the value of the to- had to them. He should oppose this tobacco duty bacco, which was very low. He did not believe with every vote that he gave on the question. that the price of tobacco was perceptibly affected Mr. Ames replied to Mr. Madison, who spoke by the home demand for manufacture, but alto- a few words in explanation. gether by foreign markets. Farmers use unmanu- Several members then requested that the clause factured' tobacco, and very little snuff. He still might be deferred till to-morrow; accordingly, the thought the principle sound, and that it was a Committee rose without coming to a division. capital object to render taxation light and easy to The Chairman reported progress, and at three the feelings of mankind. To do this, if you in- o'clock the House adjourned. corporate the tax with some luxury to be enjoyed, you render it more pleasant by a natural association. There was, he thought, a similitude be

Friday, May 2. tween this tax and that on distilled spirits. Each A memorial was read by the Clerk, subscribed was a tax on a home manufacture; each was a by certain manufacturers of tobacco, in the city tax on consumption. The duty in the present of Philadelphia, against a resolution at present becase did by no means bring down the sale of the fore the House. (This resolution is for imposing H. OF R.]

Public Credit.

[May, 1794.

a

a duty of four cents per pound upon all tobacco the assertion had been made, not by him, but by a and eight cents per pound upon all snuff, manu- member from North Carolina.] factured in the United States.]

The gentleman from Maryland had also ex

pressed his apprehensions, that the tax might be PUBLIC CREDIT.

augmented, till the culture of tobacco was extirIt was then moved that the House do resolve pated. He (Mr. T.] could foresee no chance of any itself into a Committee of the Whole, to consider such consequence. If he did so, he should be sorry to on the report of the Select Committee on Ways support the resolution. He had no desire to crush and Means.

an infant manufacture. Perhaps it would be found Mr. Giles wished that a private petition might advisable to reduce the proposed duty; and, for first be discussed, as it would take up only a short this reason, he recommended to the Committee, time, and then the House might proceed with the that the number of cents per pound, in the resoluways and means.

tion, should be left blank. Mr. Tracy said, if we cannot proceed with de- Mr. Findley:-Ruin and depravity have alspatching business in a regular way, it will be much ways attended excise. It has been one of the prinbetter to rise at once, and go home.

cipal sources of the corruption of Britain. The Mr. S. Smith wished to delay the private peti- same effects must follow in America. He objecttion, because he intended, this day, to move, that ed to the mode of taxation; and, besides, the tax the House shall meet to-morrow morning (Satur- is partial. It falls on the poor in cities. In the day) for private business, and then the petition country, nobody will pay it. could be discussed, without interrupting anything Mr. SEDGWICK would'vote against the tax, if he else.

thought that it was contagious for public moralMr. W. Smith said, that there was much busi- ity. But human nature has always been very ness on hand, and if the House were to indulge corrupted, without the aid of excise laws. The every gentleman in requisitions of this nature, State which he represents has been excised for they never would get forward.

two generations, and yet no bad consequence has The motion for a Committee of the Whole arisen to the morals of the people. As to the corHouse, on the Ways and Means, was carried— ruption of Britain, described by the member who Mr. SHERBURNE in the Chair.

spoke last, he admitted that the account was just, Mr. Tracy. If there ever was a luxury, snuff but this was not to be traced to excise laws. They is one. If we are to excise at all

, this subject is had been the subject of much clamor, but what, one of the best. It had been said, (referring to an in fact, was their history? A profligate opposiobservation made yesterday by Mr. SMILIE) that tion rail at all the measures of a Minister whether taxes, which were paid imperceptibly, were more they be good or bad, and an excise act is often one dangerous than others, because, by these invisible of them. In the course of political changes, these or imperceptible kinds of taxes, the people were men get into place. But they do not attempt to seduced from thinking to what purposes their mo- take off the taxes against which they declaimed. ney went. Mr. T.could not believe that the mem- In the mean time, the new ex-Minister harangues ber was serious in advancing such a doctrine; for against the very taxes of which he was the author. the sum of it is, that, when taxes are to be raised, As to this law being a source of perjury, oaths Government is in duty bound to give the people are necessary in imposts of all sorts. Why, then, who pay these taxes, as much trouble as possible! object to them in this particular instance ?' is an There was nothing but this alternative-a tax on excise oath worse than a custom-house oath ? tobacco, or a land tax-which was equivalent to a There is often no other method of getting at truth. tax upon necessaries. Many of his constituents If we desert this way of raising revenue, what are raise no more grain than was necessary to main- we to do? Taxes cannot be imposed on personal tain themselves; so that, with respect to them, a income, with any sort of justice, because the acland tax was a tax upon necessaries. Mr. T. ad- tual degree of a person's wealth does not depend on verted to the weakness of complaining, because the nominal amount of his income. One man has Government was attended with expense. People a thousand dollars a year; but such may be his might as well complain as to the expense of fenc- situation, that the taxing him in so small a sum as ing a wheat-field. "Liberty, without Government, ten dollars, may be distressing. Others, again, was worth nothing; it was a mere sound—and there with only five hundred dollars per annum, are, never has been, and never will he, a Government perhaps, in much more easy circumstances, than that does not require expense. One circumstance the former, upon whom the tax of personal rerecommended this tax-it was to be collected venue would press with superior weight. Direct without any addition to the number of revenue taxes, Mr. S. regarded as of an improper nature. officers. If it is true, as has been stated, that snuff But, with regard to snuff and tobacco, nobody can has, in some of the Southern States, become a ne- ever feel the

burden of a trifling tax upon them. cessary of life, he would not wish to burden it. If we are obliged to tax salt, why shall we scruple He next adverted to an assertion made yesterday, at taxing tobacco ? by Mr. Smith, viz: that this duty on tobacco, Mr. Smilie considered this measure as pregnant went directly to the destruction of the staple com- with serious consequences. He was opposed to modity of three or four States of the Union. He every system of excise, because such systems had could not see that there was any danger of this always produced mischief. If this were a despotic kind. [Here Mr. S. Smith rose, and said, that country, he could see a good reason for an excise MAY, 1794.]

Public Credit.

[H. OF R.

system of revenue, because it was proper, in that co. He understood that a snuff mill required a case, to debase, by every possible expedient, the capital of five thousand pounds to begin with. We minds of the people, that their feelings might sink are going to impose eight cents per pound on snuff, to a level with the meanness of their condition. which is double the price of the raw material. But in a Republic, taxes should be of a different Here Mr. S. inferred, that it would be necessary nature, and operate with a different tendency. As for the snuff-maker to possess an addition of dorito what had been said by Mr. TRACY, he was quite ble his present capital; so that, instead of five serious in his conviction, that taxes ought to be thousand pounds, he must possess fifteen thousand, raised in such a way, that the public might not before he can begin, or support business. After only pay them, but at the same time, feel them. paying so vast a duty, house-rent, the wages of This would teach them to think a little better in journeymen, and a multiplicity of other disbursewhat way their money goes; and then,

and not ments

, he is to give credit to his customers for six, till then, there will be an abridgment of the ex- nine, or twelve months. This was another hardpenses of the Federal Government. How do gen- ship. He must keep accounts of his sale. tlemen come to speak, as if there were no abuses The words of the report, referred to by Mr. S., in the present American Administration ? Are are as follows: there none ? If the present tax on tobacco had “He shall enter into bond, with sufficient security, to been proposed by a Minister, Mr. S. would not render a faithful account, every three months, of the have been surprised at it. But he was somewhat quantity of tobacco or snuff sold or sent out, within that amazed that this measure should be suggested period. Previous to taking any tobacco, for the purpose by the Representatives of a free people.

of being manufactured, he shall notify the same to the Mr. Ames had a better opinion of Government Office of Inspection, and shall keep a book, in which than the gentleman who spoke last. He did not shall be entered daily, the quantity of tobacco or snuff think excise a mark of despotism. He did not sold or sent out in each day.” think the people stocks and stones; or their rulers

This regulation may often prove a very great knaves and fools. The member had spoke of the hardship. It will require an extra clerk, at an excitizens of this country, as if to rouse their atten- pense of three, four, or five hundred dollars per tion it was requisite to keep a flapper, like that of annum,

For the manufacturers of snuff, this Gulliver, at their ears. In some States, perhaps, might he practicable; but, at least in his part of the public were stupid enough to require a flapper the country, tobacco spinners are poor, ignorant In the part of the country which Mr. A. represent- creatures; many of whom cannot so much as ed, there was no need of artificial provocation to read. How are they to keep accounts, or how are keep alive the sensibility of the people to their they to escape perjury, when you bid them do rights. The gentleman had said, that a Minister what they cannot possibly do ?* Besides, tobacco of State had no other object in view but to fleece is frequently sold, not by weight, but by the yard. the public.

It had been said, that this tax was not more excepHere Mr. Smilie explained.]

tionable than the excise upon spirits. This comMr. AMES replied, that, whatever were his parison did not hold. words, that was his exact meaning. It was per

By the tax on distilleries, the agriculture of the fectly understood, and was exceedingly unjust. United States was greatly promoted. Land that As to the resolution upon the table, is there any would not bear wheat was, in consequence of that comparison between a snuff tax and a land tax? excise, and the encouragement at the same time Land is the great substratum of American pros- given to this manufacture, covered with crops of perity. Difficulties had been started, as to the rye. Hence, there was no just resemblance in the collection of excise ; an oppressive law was a bad two cases. But if we are to excise every thing, thing, but resistance was worse. Can any man Mr. S. said, that the Committee might excise, as think that a land tax does not open a much great properly as tobacco, those strings of onions, that er door to imposition than a tax on tobacco? In were sent from Connecticut all over the Union. what way is a land tax to be laid, that can avoid They were the staple of that State, just as tobacinequality and injustice ? Are we to tax the pub- co was of Virginia, and were equally fit to prolic funds, that last, and most desperate resource of national distress, and then to be told, that we dare there is a clause of the same nature, which has been converted in

* In the English act of Parliament, on this branch of revenue, not impose a duty on snuff and tobacco ?

to a dreadful engine of authority. The following circumstance Mr. 8. Smits considered the observations of the respecting it is mentioned by the writer of the Political Progress of

* An old woman in Edinburg had been in the practice of member who had just sat down as amusing and supplying her neighbors with half-penny.worths of snuff. She was ingenious, but they were not satisfactory. To him, ordered, under a penalty of fifty pounds, to pay five shillings for a it seemed a very odd scheme to crush American facturer four pounds of snuff at a time, the matter might have rest.

license, and she did 80. Had she been able to buy from the manu. manufactures in the bud. Men of capital and en- ed there; bui, as this was beyond her power, it was required by

the terriers of taxation, that she should make oath, once a year, to terprise advanced large sums of money in erecting the quantity she sold. Her memory failed, and she is now, (1792) snuff mills. After long exertions, they began to

with a crowd of other victims, in an Excise Court, which wilì, very reap the reward of their expenses 'aud their labor. possibly bring her to beggary. This is like a drop in the ocean of

excise. The very sound of the word, announces uiler destruction; At that critical moment, the Government souses for it is derived from a Latin verb, which signifies, to cut up by the down upon them with an excise, which ends not rookos.

The advantages of an independent press were fully proved in in revenue, but extirpation. In his opinion, the the course of this procedure. A true history was regularly pub. resolutions before the Committee comprehend Sished of the proceedings of the Excise Court; a sense of shame

drove several of the Judges from the bench; and this nuisance has very great injustice to the manufacturers of tobac- since been greatly corrected.

Britain.

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