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of the residue of the existing debt, with the exception of the three per cent, stock, the annual interest on which amounts only to 485,000 dollars. The aspect of the foreign relations of the United States forbids, however, the hope of seeing the work, completed within that short period.

The redemption of principal has been effected without the aid of any internal taxes, either direct or indirect, without any addition during the last seven years to the rate of duties on importations, whioh on the contrary have been impaired by the repeal of that on salt, and notwithstanding the great diminution of commerce during the last four years. It therefore proves decisively the ability of the United States, with their ordinary revenue, to discharge in ten years of peace a debt of forty-two millions of dollars, a fact which considerably lessens the weight of the most formidable objection to which that revenue, depending almost solely pn commerce, appears to be liable. In time of peace it is almost sufficient to defray the expenses of a war: in time of war, it is hardly competent to support the expenses of a peace establishment. Sinking at once under adverse circumstances from fifteen to six or eight millions of dollars, it is only by a persevering application of the surplus, which it affords in years of prosperity, to the discharge of the debt, that a total change in the system of taxation, or a perpetual accumulation of debt can be avoided. But if a similar application of such surplus be hereafter strictly adhered to, forty millions of debt contracted during five or six years of war, may always, without any extraordinary exertions, be reimbursed in ten years of peace. This view of the subject has, at the present crisis, appeared necessary, for the purpose of distinctly pointing out one of the principal resources within the reach of the United States. But to be placed on a solid foundation, it requires the aid of a revenue "sufficient at least to defray the ordinary expenses of government, and to pay the interest on the public debt, including that on new loans which may be authorized."

The revenue is derived from two sources, the duties on importations, and the sales of public lands.

The net revenue arising from duties on merchandise and tonnage, which accrued during the year 1809, amounted to - g 6,527,168

The net revenue arising from the same sources, which accrued during the year 1810, amounted, to - - g 12,513,490

The same revenue for the year 1811, is estimated, as has already been stated, at ----- g 7,500,000

A portion of the revenue of this year having been collected on British merchandise imported before the prohibition took effect, the permanent revenue, arising from duties on tonnage tand merchandise, will not probably at their present rate, and under existing

Provision for the ensuing years.

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The sales of public lands north of the river Ohio, have, during the year ending on the 30th September, 1811, amounted to 207,000 acres, and the payments by purchasers to 600,000 dollars. It has already been stated, that those payments, on the average of the two last years, amount, after deducting the expenses and charges on that fund, to the annual sum of - - - & 600,000

The sales in the Mississippi Territory being in the first instance appropriated to the payment of 1,250,000 dollars to the state of Gorgia, are distinctly stated.

The permanent revenue, or annual receipts after the year 1812, calculated on the existing state of affairs, may therefore be estimated at - - - g 6,600,000

Which, deducted from the annual expenditures calculated on the same principle, and amounting by the preceding estimates for the year 1812, to - 9,200,000

Leaves a deficiency to be provided for of g 2,600,000

An addition of fifty per cent. to the present amount of duties (together with a continuance of the temporay duties heretofore designated by the name of " Mediterranean Fund") will be sufficient to supply that deficiency, and is respectfully submitted. This mode appears preferable for the present to any internal tax. With respect to the sales of public lands, besides affording a supplementary- fund for the ultimate redemption of the public debt, they may, without any diminution of revenue, be usefully applied as a bounty to soldiers enlisting in the regular service, and in facilitating the terms of loans. But it does not appear, that the actual receipts into the treasury arising from the sales, can be materially increased, without a reduction in the price; unless it be by an attempt to offer certain portions for sale in the large cities of the Union.

The same amount of revenue would be necessary, and with the aid of loans would, it is believed, be sufficient in case of war. The same increase of duties would, therefore, be equally necessary in that event. Whether it would be sufficient to produce the same amount of revenue as under existing circumstances, cannot at present be determined. Should any deficiency arise, it may be supplied without difficulty by a further increase of duties, by a restoration of that on salt, and by a proper selection of moderate internal taxes. To raise a fixed revenue of only nine millions of dollars, is so much within the compass of the national resources, so much less in proportion than is paid by any other nation, that under any circumstances, it will only require the will of the legislature to effect the object.

The possibility of raising money by loans to the amount which may be wanted, remains to be examined. For the fact, that the United States may easily, in ten years of peace, extinguish a debt of forty-two millions of dollars, does not necessarily imply that they could borrow that sum during a period of war.

In the present state of the world, foreign loans may be considered as nearly unattainable. In that respect, as in all others, the United States must solely rely on their own resources. These have their natural bounds, but are believed to be fully adequate to the support of all the national force that can be usefully and efficiently employed.

The ability and will of the United States faithfully to perform their engagements are universally known; and the terms of loans -will in no shape whatever be affected by want of confidence in either. They must however depend, not only on the state of public credit, and on the ability to lend, but also on the existing demand for capital required for other objects. Whatever this may be, the money wanted by the public must be purchased at its market price. Whenever the amount wanted for the service of the year, or the whole amount of stock in the market shall exceed certain limits, it may be expected that legal interest will not be sufficient to obtain the sums required. In that case the most simple and direct is also the cheapest and safest mode. It appears much more eligible to pay at once the difference, either by a premium in lands, or by allowing a higher rate of interest, than to increase the amount of stock created, or to attempt any operation which might injuriously affect the circulating medium of the country. This difficulty, and it is the only serious one which has been anticipated, will not indeed, if analysed, appear very formidable. For, to take an extreme case, and supposing even forty millions of dollars to be borrowed at eight instead of six per cent. a year, the only difference would consist in the additional payment of eight hundred thousand dollars a year, until the principal was reimbursed: a payment inconvenient indeed, and to be avoided if practicable, but inconsiderable if compared cither with the effects of other means of raising money, or with some other branches of the public expenditure.

It appears, from the preceding estimates, that nothing more may be strictly wanted for defraying, during the year 1812, the expenses ds yet authorized by law than an authority to borrow a sum equal to that which may be reimbursed on account of the principal of the public debt. With a view to the ensuing years, and considering the aspect of public affairs presented by the executive, and the measures of expense which he has recommended, it has been attempted to show:

1. That a fixed revenue of about nine millions of dollars is necessary and sufficient, both under the existing situation of the United States, and in the event of their assuming a different attitude.

2. That an addition to the rate of duties on importations is at present sufficient for that purpose, although in the course of events it may require some aid from other sources of revenue.

3. That a just reliance may be placed on obtaining loans to a considerable amount, for defraying the extraordinary expenses which may be incurred beyond the amount of revenue above stated.

4. That the peace revenue of the United States will be sufficient, without any extraordinary exertions, to discharge in a few years the debt which may be thus necessarily incurred.

All which is respectfully submitted. *

ALBERT GALLATIN.

Treatury Deftartmenl, Nov. 22rf, 1811.

(A.)

A STATEMENT

Exhibiting the Jimouiil of Duties :oltic/i accrued on Merchandise, Tonnage, Passports and Clearances, of Debentures issued on the Exportation of Foreign Merchandise, of Payments for Bounties and -Allowances and for Expenses of Collection, during tlte Years 1809 ami 1810.

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A STATEMENT of the Amount of American and Foreign Tonnage employed in Foreign Trade, for the year 1810, as-taksn from the

Becords of the Treasury.

American Tonnage in Foreign Trade, J Tons, 906,434

Foreign Tonnage, * 80,316

Total Amount of Tonnage employed in the Foreign Track of the United States, . 9861150

[Proportion of Foreign Tonnage to the whole amount of Tonnage employed in the* Foreign Trade of the

United States* .-.> -. 8.1 to 100

TREASURY DEPARTMENT,

Register's Office, JVov. 0, 1811.

JOSEPH NOURSE, Register.

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