APPENDIX. STATE PAPERS. TREASURY REPORT. Letter from the chairman of the committee of ways and means, to the secretary of the treasury, in relation to the revenue necessary for the service of the United States for the present and future years; and the ways and means for raising the same: with the an swer of the secretary of the treasury thereto. SIR, Committee Room, December 9th, 1811. IN your annual report, prepared in obedience to the act, supplementary to the act, entitled "An act to establish the treasury department," and transmitted to the house of representatives on the 22d ultimo, it is stated, 1st. That to place the financial system of the United States 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. That the expenses of the year 1812, calculated on the existing state of affairs, and including the interest on the public debt, will amount to That the whole amount of actual receipts into the treasury, during the year 1812, may be estimated at Leaving a deficiency [which it is proposed to supply by authorizing a loan] of And that an authority to borrow a sum equal to that which will be reimbursed of the principal of the public debt, during that year, will be necessary, and amounting to not less than Making the whole sum, which it is proposed should be provided for by loan, for that year, $9,400,000 8,200,000 1,200,000 2,135,318 41 3,335,318 41 Under this view of the subject, the committee of ways and means have instructed me to inquire of you, whether, according to the principle first above stated, it does not become necessary to provide "a fixed revenue," to be received during the year 1812, equal as well to the estimated expenses of that year, and amounting as above stated to $9,400,000, as also to the interest which will arise on the proposed loan, of $1,200,000; or otherwise, whether it is proposed to provide for the payment of such interest, out of the money in the treasury at the commencement of that year, or from any other source? 2d. It is stated in your report" that a fixed revenue of about nine millions of dollars is necessary under the existing circumstances of the United States; and that the same amount would be necessary, and with the aid of loans, will, in your opinion, be sufficient, in case of war." In reference to this state of things, the committee wish you to state whether, as in the event of war increased loans will undoubtedly be required, it will not be necessary to provide an additional and gradually increasing revenue, to pay the interest on such loans? 3d. It is stated in our report " that the permanent revenue, or annual receipts, after the year 1812 (calculated on the existing state of affairs), together with an addition of 50 per cent. on the present amount of duties, may be estimated at nine millions of dollars; and that should any deficiency arise in the event of war, 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." The committee request that you would favour them with the best opinion which you are able to form (calculated on the event of war) of the probable amount of the receipts from duties; a specification of the increase of duties, which you would think practicable and advisable; an estimate of the amount of that on salt, and such a selection of moderate internal taxes, as you would recommend, with the probable expense of collection; and the amount of net revenue estimated to arise therefrom. 4th. The committee request that you would furnish them, in connexion with your replies to the preceding inquiries, with an estimate of ways and means (calculated on the event of a war) which will provide a revenue sufficient to meet the ordinary expenses of government and provide for the legal reimbursement and interest of the public debt, including the interest of new loans, to the amount at least of ten millions of dollars per annum; accompanied with such a scheme for the reimbursement of the principal of the new loans as you should deem expedient, together with such opinions as you may have formed respecting the terms on which such loans may probably be obtained; also, such further views or information connected with, or touching the foregoing objects of inquiry as you may deem necessary and expedient. With great respect, I have the honour to be your obedient serE. BACON vant, Honourable Albert Gallatin, Secretary of the Treasury. Letter from the Secretary of the Treasury to the Chairman of the Committee of Ways and Means. SIR, Treasury Department, January 10, 1812. In answer to the first inquiry of the committee of ways and means, relative to the interest arising on the proposed loan of 1,200,000 dollars, necessary to supply the deficiency in the receipts of the year 1812, I beg leave to observe that that item was not included amongst the expenses of that year, because the estimate being made with reference to the expenses alone which had previously been authorized by law, and a considerable proportion of those on account of the public debt falling on the last day of the year, it would not have been necessary in that view of the subject to borrow that sum previous to that day, and the interest would not therefore have become a charge till the year 1813. With respect to the second inquiry of the committee, it was certainly contemplated, in conformity with the recommendation of the president, whose expressions were adopted in the report, to raise 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 sum of about nine millions of dollars was assumed as answering that description for the present, and the expression of "fixed revenue" which had been used in reference to existing circumstances, was inadvertently applied to the case of war. It will undoubtedly be proper, as remarked by the committee, to provide annually an additional and gradually increasing revenue sufficient to pay the interest on the loans required in the event of war. If therefore, the loan for the present year will, according to the suggestions of the committee, amount to ten millions of dollars, the receipts into the treasury to be provided for the year 1813, should, on those data, amount to about 9,600,000 dollars. The committee ask in the next place, the best opinion which I am able to form of the probable amount of receipts from duties on tonnage and merchandise in the event of war. As that amount will depend on the extent of the commerce between the United States and nations at peace with them, and on the numbers of the captures respectively made by our own privateers and by the enemy, it is a matter of conjecture and not a subject of calculation; for which reason it was stated in the report that that amount could not at present be determined. Considering the rigorous restrictions laid by France on the commerce of the United States with her own dominions, and other countries under her influence; the dangers to which our commerce with the Baltic and with China will be exposed; the relations of England with Portugal and with Spain; and also that no inconsiderable part of the captures made by our privateers will be sent into foreign ports, a great defalcation in the receipts on duties on imported merchandize must be expected. The amount, under existing laws and cir |