State of the Finances.

4,600,000 00 lowing:

11,372,720 00 Amount actually borrowed to the 30th

September, 1815, per statements annexed, marked G and K

State of the Finances.

of revenue and expenditure for that year cannot be reduced by the scale of a Peace Establishment. The arrearages in the War and Navy Departments are, generally, the outstanding balance of the floating public debt, including Treasury notes and temporary loans, and must be satisfied before a permanent and uniform arrangement of the finances can be effected; but it is believed that the period of a single year will be sufficient for that purpose.

It is also proper to premise, that, although the estimates of the demands on the Treasury for 1816 may be satisfactorily made, there is no settled ground upon which estimates of the ways and means can be confidently formed. The entire system of external and internal taxation must necessarily be revised during the present session of Congress, and the sources as well as the product of the public revenue can only be ascertained from the result of the legislative deliberations. 16,938,570 00 In order however to obviate this difficulty, as far as it is practicable, distinct statements will be presented for 1816-1. Of the probable demands of the Treasury; 2. Of the revenue, estimated according to the laws now in force; and, 3. Of the revenue, estimated according to the modifications, which will be respectfully submitted.

$48,849,613 01

The application of the moneys actually received into the Treasury, during the year 1815, will be as follows: To the 30th September the payments have amounted to the following sums nearly;the accounts not being yet made up, the precise amount cannot be given.

For civil, diplomatic, and miscellaneous expenses

For military service

For naval service

For public debt, (exclusive of the sum of $300,000, repaid by the Commissioner of Loans for Georgia)

$2,537,000,00
15,190,144 71

7,050,000 25

8,909,178 22

$33,686,323 18

1. Of the probable demands on the Treasury. The amount of civil, diplomatic, and miscellaneous expenses, is estimated at the sum of

9,437,087

$14,549,246

The amount of the naval expenses (sup-
posing them to be reduced, on the Peace
Establishment, to one-half the amount
appropriated for 1815, and adding the
annual appropriation of $200,000 for
the purchase of timber) is estimated at
the sum of

5,000,000 00 The amount of the payments required on
account of the public debt is estimated
at the sum of

$38,686,323 18

As the receipts into the Treasury dur-
ing the year have been estimated at 48,849,613 01

The sum left in the Treasury at the end
of the year will be

$10,163,289 83

And will consist principally of Treasury notes, paid on account of the revenue and of loans.

Of the estimates of the Public Revenues and Expenditures for 1816.

In the consideration of this subject, it is proper to premise, that the revenue of 1816 must be charged with the payment of a considerable amount of the unliquidated debts incurred during the war; and, consequently, that the proportions

$1,800,000

14,549,246

2,716,510

23,818,513

$42,884,269

For the interest and annual reimburse-
ment of the principal of the funded debt
3,460,000
prior to the war
For the interest on the funded
debt created since the war,
estimated on a capital of
$70,000,000

For the balance of principal
and interest on Treasury
notes of every denomination
now due or payable in 1815
and 1816, or estimated to
be paid in those years, by
being received for duties

4,200,000

2. Of the revenue for 1816, estimated according to the laws now in force.

direct tax, including arrears of 1815
the sales of public lands
postage and incidental receipts

If to this be added the probable amount
of money in the Treasury, at the com-
mencement of the year 1816, which
may be estimated, exclusive of Treas-
ury notes paid in, previously to that
time, on account of revenue and of
loans, at the sum of

$20,000,000

6,500,000

8,500,000

1,000,000

400,000

$36,400,000

3,000,000

The effective ways and means of 1816
will produce, in the whole, the sum of 39,400,000
But as the demands upon the Treasury,
for the same year, will amount, as
above stated, to -

There will be left a deficit, to be supplied
by means other than the revenue, of
the sum of

By the laws now in force the revenue arising from customs, during the year 1816, will be affected in the following manner: The present rates of duties continue until the 18th of February, 1816, when the duty on salt imported will cease, and the rates of duties on merchandise of every description, imported in American vessels, 3. will fall to one-half of the existing amount, with the exception of certain manufactured articles, being of the same kinds as the manufactured articles on which internal duties have been imposed; the duties on the imported articles continuing at the existing rates, so long as the existing internal duties shall be continued upon the corresponding articles of domestic manufacture. On the 18th of February the extra duties on merchandise imported in foreign vessels, which is now 15 per cent. on the amount of the duty in American vessels, will fall to 10 per cent. on that amount, and the tonnage duty on foreign vessels, which is now $2 per ton, will fall to fifty cents per ton. The extra duty is, also, liable to be affected by the operation of the act for abolishing all discriminating duties upon a basis of natural reciprocity.

42,884,269

$3,484,269

Of the revenue for 1816, estimated according to the modifications which will be respectfully submitted. From the review of the financial measures of the Government, in reference to the recent state of war, which constitutes the first part of the present report, it appears that the almost entire failure of the customs, or duties on importations, and the increasing necessities of the Treasury, rendered it necessary to seek for pecuniary sup plies in a system of internal duties; but both in respect to the subjects of taxation, and to the amount of the several taxes, the return of peace has always been contemplated as a period for revision and relief. In the fulfilment of that policy, a reduction of the direct tax; a discontinuance of taxes which, upon trial, have proved unproductive as well as inconvenient; and, above all, the exoneration of domestic manufactures from every charge that can obstruct or retard By the laws now in force the revenue arising their progress, seem to be the objects that particfrom internal duties will be affected in the follow-ularly invite the legislative attention. There ing manner: The duties on bank notes, on notes discounted by banks, and bills of exchange, (commonly called the stamp duties,) and the duty on refined sugar, will cease on the 18th of February, 1816. All the other internal duties, together with the direct tax, and the increased rates of postage, will continue.

Under these circumstances the revenue which will accrue to the United States, during the year 1816, is estimated as follows:

14th CoN. 1st SESS.-52

will still remain, however, a sufficient scope for the operation of a permanent system of internal duties upon those principles of national policy which have already been respectfully suggested.

As an equivalent for the diminution of the revenue, by the contemplated abolition or reduction of some of the duties and taxes, and in observance of the public faith which is pledged, in the case of such abolition or reduction, to provide and substitute other duties and taxes equally pro

State of the Finances.

ductive, it is intended respectfully to recommend
a continuance of the duty on imported salt, and
a competent addition to the permanent rates of
the duties on merchandise imported. In the gen-
eral tariff which has been directed by a resolution
of the House of Representatives to be prepared,
and which will be submitted to Congress as soon
as the materials for forming it can be digested
and arranged, the subject will be more distinctly,
as well as more satisfactorily, presented; but, as
it is not probable that this measure can be so ma-
tured as to go into operation on the 18th of Feb-
ruary next, it becomes necessary to suggest the
expediency of continuing the present rates of
duties until the 30th of June, when the new
rates, with all the necessary details to give effect
to the system, may be introduced, and sufficient
notice be given to the merchants, to regulate their
commercial operations accordingly.

2. The moneys which will be actually receiv-
able into the Treasury, from revenue, in 1815,
may be estimated-
$21,000,000
From the customs
From internal duties

From direct tax, including arrears of 1815
From sales of public lands

From postage and incidental receipts

5,000,000 6,000,000

1,000,000

400,000

$33,400,000

If to the sum thus estimated to be receivable into the
Treasury, from the revenue, during the
$33,400,000
year 1816-
There be added the money which will
probably be in the Treasury at the be-
ginning of the year

The aggregate will be the sum of
And the demands being estimated, as
above, at

In relation, then, to the internal duties, it is intended respectfully to recommend that the duties imposed at the last session of Congress, on various articles manufactured within the United States, shall be abolished on the 18th day of April next, which will complete the year, commencing from the time the duties went into operation; that the duty imposed during the last session of Congress, on spirits distilled within the United States, shall be abolished on the 30th day of June next, but that, at the same time, there be added 100 per cent. on the rate of the duty which had been charged on licenses to distillers of spirituous liquors in the year 1813; that the duty on house-There will be left a deficit of hold furniture, and on gold and silver watches, be abolished on the 31st day of March next; that the additional duty imposed during the last session of Congress, on licenses to retail wines, spirituous liquors, and foreign merchandise, be abolished on the 31st day of December, 1816; and that the duties on refined sugar, and the stamp duties, be continued; and, finally, in relation to the direct tax, it is intended respectfully to recommend that, on the 31st day of March next, it be reduced to one-half of its present amount; that is, to the annual amount of $3,000,000.

The subtraction from the revenue by these changes and reductions in the direct tax, and the internal duties, is estimated at the annual sum of $7,000,000. But the substitutes for supplying the equivalent amount are estimated to produce, 1st, from the increase of the duty on licenses to distillers, and the continuance of the stamp duties, and duties on refined sugar, the annual sum of $1,500,000; 2d, from the continuance of the duty on imported salt, the annual sum of $500,000; and, 3d, from an increase upon the permanent rates of duties on the importation of foreign merchandise, the annual sum of $5,000,000.

The full effect of the alterations which have been stated will not be developed until some time after the year 1816; but if they be adopted, the state of the revenue for that year, in the two views of which it is susceptible-1st, of revenue accruing during the year, and, 2ndly, of money receivable into the Treasury during the year, may be estimated as follows:

3,000,000

36,400,000

42,684,269

6,484,269

It is here, however, to be recollected, that the estimate of the demands on the Treasury comprehends the gross amount of the arrearages of the War Department, and a provision for the whole of the floating public debt; and although, for the purposes of a legislative appropriation, the aggregate of the expenditures to be authorized for the year 1816 is necessarily made the basis of the official estimates, yet the uniform experience of the Treasury evinces that the demands for a considerable portion of the annual appropriation will not be made during the year.

It may also be observed, that to raise a revenue by the imposition, or even by the continuance, of taxes, adequate to the immediate discharge of every unliquidated demand upon the Treasury, at the close of an expensive war, seems hardly to be necessary under the present circumstances of the country. The product of the revenue arranged in the manner which has been stated, may be estimated, after the year 1816, at an annual amount, nearly four millions greater than the sun required for the interest on the public debt, and for the probable expenses of the Peace Establ ment. If the public debt, therefore, were increased in the year 1816, by a sum equal to the whole amount of the deficit as above stated, an equivalent reduction would be effected in less than two years.

The unexecuted authority to borrow money, and to issue Treasury notes, already provided by the acts of Congress, is sufficient to enable the Treasury to meet the deficit in either of

State of the Finances.

these modes, and consequently no further legisla- Fifth. It is respectfully proposed that the act tive aid (except, perhaps, in the modification of of the 3d of March, 1815, further to provide for the issues of Treasury notes) appears at this time the collection of the duties on imports and tonto be required. nage, and the act of the 3d of March, 1815, to fix III.-Propositions for the improvement and man-ity of the collectors of the direct tax and internal the compensations, and increase the responsibilagement of the revenue, and for the support of duties, and for other purposes connected with the public credit. collection thereof, so far as it relates to the comThe propositions which are now to be respect-pensation of the collectors of the direct tax and fully submitted, relate: 1. To the revenue. 2. internal duties, be continued in force without To the Sinking Fund. 3. To the national circulating medium.

1. Propositions relating to the revenue. The changes contemplated in the revenue, on the estimates of a Peace Establishment, having been already stated as the intended objects of recommendation, it is only now necessary to submit to the consideration of Congress the measures requiring their sanction for carrying the plan into effect.

First. It is respectfully proposed that the act of the 1st of July, 1812, imposing an additional duty of 100 per cent. upon the permanent duties on goods, wares, and merchandise imported into the United States from any foreign port or place, and the act of the 29th of July, 1813, imposing a duty upon imported salt, be continued in force until the 30th day of June, 1816.

limitation.

2. Proposition relating to the Sinking Fund. The Sinking Fund, as it is at present constituted, amounts to the annual sum of

It is charged, in the first instance with the
payment of the interest, and the annual
reimbursement of the principal of the
old funded debt, which will require for
1816, and each of the two ensuing
years, the sum of

And it is charged with the payment of the

interest, and the eventual reimburse-
ment of the principal of the new fund-
ed debt; the interest, computed on a
capital of $70,000,000, will require for
the year 1816, and each subsequent
year, the sum of

The total present charge on the Sinking
Fund, on account of the funded debt,
being the annual sum of

$8,000,000

$3,460,000

4,200,000

$7,660,000

Second. It is respectfully proposed that the act of the 24th of July, 1813. imposing a duty on sugar retined within the United States, and the act of the 2d of August, 1813, imposing a duty on bank notes, notes discounted, and bills of ex- In 1818 the fund will be released from the anchange, be continued by law, in force, without nual charge of $1,380,000, accruing upon the old limitation, but with proper amendments to render six per cent. stock, as the stock will then be paid the collection of the duties more equal and more and extinguished; but in the same year it will certain; and that the act of the 15th of December, be subjected to a charge of $3,000,000, for the first 1814, imposing duties on carriages and the har-instalment of the principal of the Louisiana stock, ness therefor; and that so much of the act of the 23d of December, 1814, as relates to the duties on sales at auction, and to the increasing of the rates of postage, be allowed to remain in force.

Third. It is respectfully proposed that there be a reduction or modification in the following taxes and duties:

1. That the direct tax be reduced from six millions to three millions of dollars, for the year 1816, and for each succeeding year.

2. That the duties on distilled spirits be discontinued after the 30th day of June, 1816; and that the duty on licenses to distillers be raised on that day to double the amount fixed by the act of the 24th of July, 1813.

3. That the duties on licenses to retailers of wines, spirituous liquors, and foreign merchandise, be reduced to the rates of the year 1813, with proper regard to the periods when licenses commence and expire.

Fourth. It is respectfully proposed that the act of the 18th of January, 1815, and the act of the 27th of February, 1815, imposing duties on various articles manufactured, or made for sale within the United States, and the act of the 18th of January, 1815, imposing duties on household furniture and watches, be absolutely and entirely repealed.

which will then become payable. In each of the two succeeding years a similar sum will be payable; and, in the year 1821, such sum will be payable as may be necessary to complete the reimbursement of that stock, and which is estimated at $1,923,500.

The Sinking Fund is also, at present, charged with the payment of the principal and interest of the Treasury notes issued under the act of the 4th of March, 1814, and of prior acts, and of certain temporary loans obtained under the loan acts of 1812, and of subsequent years. The several acts charging these payments on the Sinking Fund have directed that such sums, in addition to the annual appropriation of $8,000,000, should be taken from any moneys in the Treasury not otherwise appropriated, as should be necessary to meet and satisfy the demand. The temporary loans and Treasury notes will, therefore, be probably paid or absorbed in 1817; and it is deemed unnecessary, for the present purpose, to include them in the consideration of the form and extent which it is proposed to give to the Sinking Fund in that year.

In 1803, when the Sinking Fund was estab lished on its present footing, the principal of the public debt was about $86,000,000. and the inter