committee appointed to inquire whether any, or what, further or other revenues are necessary for the support of public credit; and, if further revenues are necessary, to report the ways and means. Two resolutions were read: the first was, that five cents per hundred dollars be laid on every transference of stocks in the public funds; and the second, that five cents per hundred dollars be laid on the transference of stock in any of the other Banks of the United States.

Mr. S. SMITH said, that if this tax seemed too light, it was to be remembered that transferences were frequent.

[H. of R.

would be better if the money were all owing to American citizens. But, while things are in their present state, this tax would enable such foreigners to buy more debt out of the country and send less money into it in place of the debt. Public Debt is a ground which cannot be trod with impunity. We may soon, on such a precedent, go still greater lengths; a few events may force us to apply to the moneyed men, and then will be seen and felt the miserable termination of this policy.

be understood. If it contained arguments, they were above his reach, and there he should leave it. He closed with speaking a few words on a proposal for taxing bonds.

Mr. LYMAN observed that, notwithstanding there were many objections against this part of the stamp duty, he was willing, if the whole report of the select committee was embraced, and the doctrine of stamps introduced, that the item now before the Committee should be blended with the others; but he had many doubts in his mind against the expediency of resorting to that source of revenue at this time, and hoped that other more convenient sources might be found.

Mr. CLARK said, that the gentleman [Mr. AMES] had made a long speech with respect to newspapers. What was his meaning, or what he referred Mr. HUNTER, of South Carolina, had a resolu- to, 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 and necessity of its being supported by Government, since it had once been adopted. This tax on the transference of the Public Funds tended to injure it, by sinking their value. When we next want to borrow, and shall go to market, the lenders will rise proportionably in their demands, and refuse a loan on the terms which they before accepted. Hence we shall lose, instead of gaining by it. Let gentlemen reflect on the consequences of unsettling all ideas of property, which must be the result of this proceeding. He was not one of those who despised the Funding System because it was unpopular, for it was the property of a Republic 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 England States had immense property in the Public Funds, when, in fact, their whole income from that source was not sufficient for buying oats for their horses. To say, therefore, that they were under influence in their political conduct from such motives, was the merest bagatelle that can be conceived; and the groundless jealousy that it has excited may be considered as a very strong counter-balance to the interest of those members who were the objects of suspicion. People dream that Congress are voting money into their own pockets. The propagation of this idea promotes the dirty purposes of slander, abuse, and falsehood. By such unworthy means, the blossoms of public confidence in Government are mildewed and blasted. This is more especially the case in the Southern States; and this dissatisfaction offers an apology for taking notice, in this House, of the abuse of newspapers. In the United States, taxation of the Public Funds is nothing more or less than the debtor taxing the creditor; and so questionable an expedient will recoil with tenfold force on the credit of Government itself. The progress of this measure would degrade the Public Debt into a paper rag. It had been complained of in this country, that foreigners had too great a share in the Funds, and Mr. A. was of opinion that it 3d CoN.-21

on first hearing of this scheme, resolved to support it. But, in imposing taxes, we must consult not only morality but expediency; and here he had numerous objections to the resolution in its present shape. He wished to make it a stamp on every transference, without regarding the sum, because when it came to be a considerable sum, such as a thousand dollars, the duty would not be paid. The duty of five cents amounts, on a thousand dollars, only to half a dollar. He wished to make no distinction by specifying the transferences of Public Funds, but just to make it, at once, upon all transferences of money. By this reserve in expressing the intention of the clauses, the House would avoid giving any alarm to public creditors, and the matter would pass with little or no notice. But if the clause stood alone, in this marked way, the report might reach Europe that American funds were to be taxed, and the very sound of such a measure might do us more mischief than the object was worth. Mr. B. stated an error adopted in the old Governments of Europe as to taxing public funds. They had been taxed specifically under that title, which sunk their value. But a tax should have been contrived for property in general, that would have comprehended them without pointing them out in particular, which always sunk their value. Returning to the ques

tion before the House, he foretold with confidence that, if the tax were imposed without any reference to the sum transferred, there would be fifteen or twenty bonds, if the duty was moderate, for one upon the present plan, by which twenty shifts would be made before a bond would be employed. At the same time, he was satisfied that the right of Congress was equal to the taxation of public funds, as well as of any thing else.

[MAY, 1794.

past, where there had not been some pointed allusion to this paper bugbear. This Government, said Mr. A., has been painted as an object of suspicion and abhorrence. The gentleman [Mr. CLARK] complains that I am beyond his reach. He has made himself sufficiently intelligible, and has perhaps had his share in drawing such pictures. Recurring to the question before the Committee, he said that, when the Funding Act passed, no man will affirm that there was any notion of such a tax understood. No civilized nation can keep its credit while it taxes its public funds. Property is in general, to be sure, a fair object of taxation, but this tax cannot be levied with perfect equality, for it is beyond the knowledge of any Government; and, were it even within the knowledge of a legislator, still it is beyond his power. There was no way to get at an exact acquaintance with the universal state of property, but by cutting off people's heads and searching their repositories.

Mr. TRACY objected to the imposition of a tax upon this kind of property. On this question he was at freedom to speak with perfect impartiality, for he had never once seen public paper till he came to Philadelphia, and he most certainly never owned a single farthing of it since he had an existence. The clamors, therefore, with regard to a paper interest, could not be applied to him. But, by giving this explanation, he did not mean to say that if he had been a stockholder he would have suppressed his sentiments. Gentlemen in that 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 between Government and its creditors. He had no verbose arguments on the subject. His objections were simple, and come at once to the point. A breach of bargain was a breach of honesty, and as such could never meet with approbation from him. We gave paper, said Mr. T.; transferability formed a part of it. Now, we come forward and say to the creditor, you shall not transfer unless you give up a part of your debt. He would have been very glad to vote for this tax, if he could have voted consistently with justice; but, feeling as he did, he could not give his consent.

Mr. NICHOLAS was of an opposite opinion from Mr. TRACY, as to the justice of the tax. He was convinced of that, as well as of its expediency. It had been urged that we should pay three or four times more in the next loan, in proportion, than the tax was worth, because, when the system of laying a duty on the funds was once begun, there was nobody could say where it was to end, and therefore every body would scruple to give us credit. To this his answer was, that the funds already borrowed could not be affected by this bill, because they were already in our hands; and, as to the future loans, in these the creditors had it in their power to make an express stipulation for no tax on their funds. This would answer the purpose completely, without recurring to those alarming presages of the loss of credit.

trifle, perhaps for half a crown in the pound? Surely, if this be the case, no creditor would grumble in paying the proposed tax on the transfer; and, if he should complain, was it tolerable to hear such a property held up as an unfit object for taxation?

On dividing the Committee, on the motion for a tax of five cents per hundred dollars upon the transfer of public debts, fifty-three members were in favor of it-the nays in the question were not counted.

The motion for a tax to the same extent, on every transference of Bank stock, passed unanimously.

A resolution for a tax on manufactured snuff and tobacco was next read. Mr. ScoTT rose and observed, that it was a home manufacture, and he did not wish to meddle with it, for that was a bad precedent. He should therefore move to strike it out.

Mr. MURRAY hoped, that the motion for striking out the tax on snuff and tobacco would not succeed. At a moment when we are looking about for proper sources of revenue, he thought that these objects came very aptly into view. They are articles that will bear a moderate tax, in particular the first. It is true, that a tax on snuff will not operate upon all men, but those who will be affected by it are well able to bear it. It will be 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 vindication. He appealed to every member who heard him that, excepting only the debate on the adjournment of Congress, there had not been a single discussion of any length, for a considerable time

fourths of a dollar per pound. Snuff was now manufactured in this country as good as that imported, and is sold at a quarter of a dollar per pound. As to the objection that it was a tax on home manufacture, the precedent had already ob

tained in the duty on distilled spirits. Mr. M. approved the principle of taxation that connected the payment with an enjoyment of luxury. The mind lost its repugnance in the pleasure derived from the article taxed, if the discharge of the tax preceded the gratification.

Mr. MACON observed, that the tax came to about four dollars per hundred weight, whereas the raw material itself cost about three dollars. This was, he believed, the first instance in the history of taxation where a raw material was taxed to more than its value. He was entirely against the resolution.

Mr. FINDLEY entertained an opinion that the resolution was in its principle ensnaring, and could never be reduced to practice. People would raise it for themselves, as in fact a great number do at present. In the country, boys were suffered to plant and sell it; and how was it possible to raise a revenue on such resources? It never could be made productive, but it would ruin the manufacture.

Mr. S. SMITH, of Maryland, said that he believed his colleague [Mr. MURRAY] felt some delicacy upon this subject, and, making use of tobacco himself, did not choose to oppose the tax, from a desire of appearing disinterested. After some other remarks of an amusing nature, he stated that this tax went directly to the destruction of the staple commodity of three or four States in the Union. It was likewise, in another point of view, a dangerous precedent; for we should next go round all our manufactures, and every thing would be taxed; he was against the resolution.

Mr. FITZSIMONS considered the present as one of the best resolutions in the list. He did not know what he would have been more ready to propose.

[H. OF R.

home made article to a competition with the
foreign article. Notwithstanding this tax, Amer-
ican snuff would forever undersell that imported,
from its being twice, if not thrice, as cheap. For,
even after the eight cents proposed on snuff
was paid, the price would be extremely low. As
to any opposition to the collection of the excise, a
possibility which had been adverted to by some
former speaker, he thought that no argument could
be derived from that, which at once held up the
folly of those who constituted the example. He
did not fear that any class of citizens would be so
riotous, so ignorant, so savage, as to resist the
measures of Government. The enlightened free-
men of this country would not tumultuously op
pose a law made by legislators whom they had
themselves chosen. He thought the tax easy, as
falling on the more wealthy, and one which would
by no means affect the staple of the country.
Mr. CLARK was against the resolution.

Mr. S. SMITH agreed perfectly with the judgment of the member from Pennsylvania, [Mr. FINDLEY,] that the tax would destroy the manufacture, and raise nothing. Every body would use a kind of unmanufactured tobacco, that has a well known name, as there was no mention of that article in the bill.

Mr. AMES approved the tax, as one of the best which he knew.

Mr. MADISON had always opposed every tax of this nature, and he should upon all occasions persist in opposing them. If we look into the state of those nations who are harnessed in taxes, we shall universally find that, in a moral, political, and commercial point of view, excise is the most destructive of all resources. He did not say this, because excise had been a frequent topic of popular 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 discover 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 Amerpaying a tax-why then scruple to tax other arti-ican Government, who saw such immense quancles of luxury?

Mr. MURRAY, in reply to Mr. S. SMITH, said, that if he thought the tax would injure one of the staples of Maryland, it would be with great caution that he should support it. But he denied any such consequence. The price of snuff is a price annexed to the labor and ingenuity of the manufacturer, and not an effect of the value of the tobacco, which was very low. He did not believe that the price of tobacco was perceptibly affected by the home demand for manufacture, but altogether by foreign markets. Farmers use unmanufactured tobacco, and very little snuff. He still thought the principle sound, and that it was a capital object to render taxation light and easy to the feelings of mankind. To do this, if you incorporate the tax with some luxury to be enjoyed, you render it more pleasant by a natural association. There was, he thought, a similitude between this tax and that on distilled spirits. Each was a tax on a home manufacture; each was a tax on consumption. The duty in the present case did by no means bring down the sale of the

tities of foreign spirits imported. Much of the collection of this tax on tobacco would depend on the oath of the manufacturer, and this was but another term for the multiplication of perjuries. The tax would therefore injure the morals of the people. He liked much better some other taxes in the list before the House, and recourse might be had to them. He should oppose this tobacco duty with every vote that he gave on the question.

Mr. AMES replied to Mr. MADISON, who spoke a few words in explanation.

Several members then requested that the clause might be deferred till to-morrow; accordingly, the Committee rose without coming to a division. The Chairman reported progress, and at three o'clock the House adjourned.

FRIDAY, May 2.

A memorial was read by the Clerk, subscribed by certain manufacturers of tobacco, in the city of Philadelphia, against a resolution at present before the House. [This resolution is for imposing

Mr. FINDLEY:-Ruin and depravity have always attended excise. It has been one of the principal 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 could be discussed, without interrupting anything else.

country, nobody will pay it.

Mr. SEDGWICK would vote against the tax, if he thought that it was contagious for public moral|ity. But human nature has always been very corrupted, without the aid of excise laws. The State which he represents has been excised for two generations, and yet no bad consequence has arisen to the morals of the people. As to the cor

The motion for a Committee of the Whole House, on the Ways and Means, was carried-ruption of Britain, described by the member who Mr. SHERBURNE in the Chair.

MAY, 1794.J

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 douto 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 been proposed by a Minister, Mr. S. would not have been surprised at it. But he was somewhat amazed that this measure should be suggested by the Representatives of a free people.

Mr. AMES had a better opinion of Government than the gentleman who spoke last. He did not think excise a mark of despotism. He did not think the people stocks and stones; or their rulers knaves and fools. The member had spoke of the citizens of this country, as if to rouse their attention it was requisite to keep a flapper, like that of Gulliver, at their ears. In some States, perhaps, the public were stupid enough to require a flapper. In the part of the country which Mr. A. represented, there was no need of artificial provocation to keep alive the sensibility of the people to their rights. The gentleman had said, that a Minister of State had no other object in view but to fleece the public.

[Here Mr. SMILIE explained.]

"He shall enter into bond, with sufficient security, to render a faithful account, every three months, of the quantity of tobacco or snuff sold or sent out, within that period. Previous to taking any tobacco, for the purpose of being manufactured, he shall notify the same to the Office of Inspection, and shall keep a book, in which shall be entered daily, the quantity of tobacco or snuff sold or sent out in each day."

This regulation may often prove a very great hardship. It will require an extra clerk, at an expense of three, four, or five hundred dollars per annum. For the manufacturers of snuff, this might he practicable; but, at least in his part of the country, tobacco spinners are poor, ignorant creatures; many of whom cannot so much as read. How are they to keep accounts, or how are they to escape perjury, when you bid them do what they cannot possibly do?* Besides, tobacco is frequently sold, not by weight, but by the yard. It had been said, that this tax was not more exceptionable than the excise upon spirits. This comparison did not hold.

Mr. AMES replied, that, whatever were his words, that was his exact meaning. It was perBy 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 pro

lic funds, that last, and most desperate resource of national distress, and then to be told, that we dare not impose a duty on snuff and tobacco?

there is a clause of the same nature, which has been converted in*In the English act of Parliament, on this branch of revenue, to a dreadful engine of authority. The following circumstance respecting it is mentioned by the writer of the Political Progress of Britain. An old woman in Edinburg had been in the practice of supplying her neighbors with half-penny worths of snuff. She was ordered, under a penalty of fifty pounds, to pay five shillings for a license, and she did so. Had she been able to buy from the manu

Mr. S. SMITH Considered the observations of the member who had just sat down as amusing and ingenious, but they were not satisfactory. To him, it seemed a very odd scheme to crush American manufactures in the bud. Men of capital and en-ed there; but, as this was beyond her power, it was required by terprise advanced large sums of money in erecting snuff mills. After long exertions, they began to reap the reward of their expenses and their labor. At that critical moment, the Government souses down upon them with an excise, which ends not in revenue, but extirpation. In his opinion, the resolutions before the Committee comprehend very great injustice to the manufacturers of tobac

facturer four pounds of snuff at a time, the matter might have restthe terriers of taxation, that she should make oath, once a year, to the quantity she sold. Her memory failed, and she is now, (1792) with a crowd of other victims, in an Excise Court, which will, very possibly, bring her to beggary. This is like a drop in the ocean of excise. The very sound of the word, announces utter destruction; for it is derived from a Latin verb, which signifies, to cut up by the roots."

The advantages of an independent press were fully proved in the course of this procedure. A true history was regularly pub lished of the proceedings of the Excise Court; a sense of shame drove several of the Judges from the bench; and this nuisance has

since been greatly corrected.