the United States," passed the 4th of August, 1790.

This act, which is the one that regulates the funding of the Debt, by the last section appropriates the proceeds of the sales of the lands in the Western Territory, then belonging, or thereafter to belong, to the United States, to the sinking or discharging of the Debts for which the United States then were, or by virtue of that act should be, holden, to be applied solely to that use, until they should be fully satisfied.

2d. "An act making provision for the reduction of the Public Debt," passed August 12, 1790.

necessary to supply the defect of receipts, during that year, on account of the duties which should accrue after the year 1790.

3d. "An act repealing, after the last day of June next, the duties heretofore laid upon distilled spirits, &c.," passed the 3d of March, 1791.

This act appropriates whatever surplus may remain, from year to year, of the proceeds of the duties which it imposes, after satisfying prior appropriations, to the reduction of the Public Debt, unless such surplus shall be required for the current public exigencies, and, by special acts of Congress, shall be appropriated thereto.

1. That the surplus of the duties on imports and tonnage, to the end of the year 1790, shall be applied to the purchase of the Debt of the United States, at its market price, if not exceeding the par or true value thereof.

2. That the purchases to be made shall be conducted under the direction of the President of the Senate, the Chief Justice, the Secretary of State, the Secretary of the Treasury, and the Attorney General, who, or any three of whom, with the approbation of the President, are authorized to cause them to be made, in such manner, and under such regulations, as shall appear to them best calculated to fulfil the intent of this act: Provided, That the same should be made openly, and with due regard to the equal benefit of the several States.

3. That the accounts of the application of the Fund should be settled as other public accounts, accompanied with returns of the amount of Debt, purchased at the end of each quarter of a year; and that a full and exact report of the proceedings of the Commissioners should be laid before Congress, within the first fourteen days of each session, including a statement of the disbursements and purchases, specifying the times when, prices at which, and persons of whom, the purchases were made.

4. That, in addition to this fund, the President should be authorized to borrow any sum or sums, not exceeding $2,000,000, at an interest not exceeding five per centum, to be applied to purchases of Public Debt, in like manner, and under the same direction and regulations as the first mentioned fund: Provided, That, out of the interest of the Debt to be purchased, there should be appropriated, annually, a sum not exceeding eight per centum of the sums borrowed, towards paying the interest and reimbursing the principal of these

sums.

But, to guard against the possibility of a deficiency of means to pay the interest on the Debt which was to accrue in the year 1791, authority is given to reserve and apply to that purpose, out of the first mentioned fund, as much as might be

This act declares that the terms of a Loan of three millions of florins, obtained in Holland, bearing five per cent. interest, and four and a half per cent. for charges, and future Loans on the same terms, should be deemed to be within the meaning of the act of the 12th of August, 1790. 5th. An act supplementary to the act making provision for the Debt of the United States," passed May 8, 1792.

66

This act makes provision for the payment of a debt due to certain foreign officers who had served the United States, (the interest of which was, by stipulation, payable at Paris,) out of the moneys authorized to be borrowed by the Funding Act. It also establishes a permanent Sinking Fund, to be composed

1. Of the interest of the Public Debt purchased, redeemed, or paid into the Treasury, in satisfaction of any debt or demand.

2. Of the surplus, if any, which should remain of moneys appropriated for paying the interest of the Public Debt, after paying that interest.

This Fund is to be applied, under the direction of the Commissioners nominated in the act of the 12th of August, with the like approbation of the President

First.-To the purchase of the several species of stock constituting the Debt of the United States, at their respective market prices, not exceeding the par or true value thereof, and, as nearly as may be, in equal proportions, until the annual amount of the fund shall be equal to two per centum of the whole amount of the outstanding Funded Stock, bearing a present interest of six per centum: Thenceforth

Second. To the redemption of that stock, according to the right reserved to the United States, until the whole should be redeemed: and, lastly, after such redemption, to the purchase, at its market price, of any unredeemed Debt of the United States; which purchases are directed to be made at the lowest prices at which they can be effected by open purchase, or by receiving sealed proposals, to be opened in the presence of the Commissioners, or persons authorized by them to make purchases, and of the persons making the proposals; and are to be accounted for at the Treasury, and reported to Congress, in the same manner as the purchases before authorized to be made.

6th. "An act making appropriations for the support of Government, for the year 1793."

This act provides that the President of the United States shall cause so much of the Loan made of the Bank of the United States, pursuant to the 11th section of the act of incorporation, to be paid off, in sums not less than $50,000, as, in his opinion, the state of the Treasury may, from time to time, admit, out of any moneys which may be in the Treasury, having due regard to the exigencies of the Government, and the appropriations made, and to be made, by law.

7th. "An act making provision for the payment of the first instalment due on a Loan made of the Bank of the United States," passed March 2d, 1793.

This act authorizes the payment of the first instalment of a Loan of two millions of dollars, had of the Bank of the United States, pursuant to the 11th section of the act by which it is incorporated. out of the moneys borrowed upon the authority of the act making provision for the reduction of the Public Debt.

8th. "An act providing for the payment of the second instalment, due on a Loan made of the Bank of the United States," passed June 4, 1794.

This act authorizes the payment of that second instalment, out of the proceeds of any Foreign Loans before that time transferred to the United States. It makes other provisions, which have been noticed under a preceding head.

These acts comprise all the provisions which have been made for reimbursing and redeeming the Debt of the United States. The result, to the last of December, 1794, is presented in the

statement E.

There are two other acts, which, though not falling properly under either of the foregoing heads, require, from their relation to the subject, to be brought into view.

1. An act relative to claims against the United States, not barred by any act of limitation, and which have not been already adjusted, passed February 12, 1793.

This act directs that all claims of the description given in the title shall be presented at the Treasury for adjustment, by the 1st of May, 1794, or shall be for ever after barred; except those for Loan Office certificates, final settlements, indents of interest, Register's certificates, balances on the books of the Treasury, Loans of money in foreign countries, certificates issued under the act, entitled "An act making provision for the Debt of the United States."

Such of the claims presented as cannot be admitted in the course of the Treasury, are to be reported to Congress, by the accounting officers.

Among the claims inadmissible in the ordinary course of the Treasury, is a sum of $90,574, of the bills of credit, commonly called new emission

money.

2. An act making further provision for the expenses attending the intercourse of the United States with foreign nations, &c., passed March 20, 1794.

This act appropriates, in addition to former pro

visions, one million of dollars for the purposes mentioned in the title, to be paid out of any mo neys which may be in the Treasury, not otherwise appropriated, and to be applied under the direction of the President of the United States, who is also authorized, if necessary, to borrow the whole, or any part of the sum; but there is no special appropriation either for paying the interest or reimbursing the principal of the Loan. The act already quoted, of the 9th of June, 1794, entitled "An act making appropriations for certain purposes therein expressed," with a view to remedy this defect, appropriates, out of the proceeds of the taxes laid during the last session, such sum as shall be sufficient to pay the interest on whatever moneys may be borrowed, pursuant to the act of March 20, 1794.

The foregoing review of the laws which constitute the fiscal system of the United States displays these prominent points as the leading features of that system:

1st. That all the current revenues of the United States are derived from these sources, to wit: imported articles; the tonnage of ships and vessels; spirits distilled within the United States, and stills; the postage of letters; fees on patents; dividends of Bank stock; snuff manufactured within the United States; sugar refined within the United States; sales at auction; licenses to retail wines and distilled spirits; carriages for the conveyance of persons.

2d. That, of these revenues, the principal part of the duties on imported articles, those on the tonnage of ships and vessels, those on distilled spirits and stills, those on the postage of letters, patent fees, the dividends on Bank stock, are permanent, (the three first being commensurate with the existence of the Debt for the payment of the interest of which they are pledged, the fourth and fifth having no limit assigned in the laws, and the last being commensurate with the duration of the property in the stock,) all the others temporary; being limited to continue no longer than till the end of the session of Congress next after the expiration of two years from the respective times of passing the laws which established them, except the temporary duties on imports and tonnage, which are to continue till the 1st of January, 1797.

3d. That the permanent duties on imported articles, the tonnage luties, the duties on spirits distilled within the United States, and on stills, are subject to these permanent dispositions:

1. To an annual reservation of $600,000, for the support of the Government of the United States and their common defence.

2. To an appropriation of so much as may be necessary to pay the interest on the Foreign Loans provided for by the Funding Act.

3. To an appropriation of so much as may be necessary to pay the interest on the stock created by the Loan in Domestic Debt, or, more properly, in the original Debt of the United States.

4. To an appropriation of so much as may be necessary to discharge the interest on the stock created by the Loan in the debts of the respective States.

This is exclusive of a sum of $1,400,000 due to the Bank of the United States, on account of the Loan of $2,000,000 had of that institution, pursuant to the eleventh section of the act by which it is incorporated, and which is not included in the mass of the Debt, because it is more than counterbalanced by a greater value in stock. It is also exclusive of those Loans which are temporary anticipations of the revenue.

The particulars and amount of the annual current revenues of the United States are as follows:

Interest on temporary Loans Expenses of the Civil Government, including Foreign Intercourse Expenses of Military Land Service Expenses of Military Naval Service Miscellany

Total annual expenditure

66,031 10

100,000 00

475,249 53

1,511,975 29

441,508 80

109,357 04

$5,681,843 84

This sum is liable to be increased by the interest which will begin to accrue on the deferred stock the first of January, 1801; being, on the present amount of that stock, $871,401 92.

The annual force of the Sinking Fund, as depending on ascertained funds, may be stated as follows:

Interest for a year, on sums already

carried to its credit Interest for a year, on debts of foreign officers, in a course of payment, including arrears of interest to be carried to the credit of this fund

Interest for a year, on the unexpended surplus of the revenues at the end of the year 1790, being $411,659 49, supposing this to be invested, by purchase, in an equal sum of present six per cent. stock

Total

$68,225 55

13,439 49

24,699 56 $106,364 60

It is further liable to be increased by an investment in purchases of $865,098 11, which, together with the sums from that source, already invested in purchases and payments, will amount to $2,000,000, the sum authorized to be borrowed for purchases of the Debt.

But, as this auxiliary depends on an operation, not only future, but, in some degree, casual, it cannot be taken into an estimate of the actual strength of the fund.

The proceeds of the sales of Western lands must also be considered as an eventual resource.

There are other contingent sources of augmentation not computed, because they are contingent. But, on the other hand, the fund is liable to be reduced by a sum reserved out of it for the payment of principal and interest of the two millions authorized to be borrowed for purchases, not exceeding eight per centum per annum.

The sum applicable, in the first instance, to the redemption of that portion of the Funded Debt which bears a present interest of six per centum, excluding that standing to the credit of the Commissioners of the Sinking Fund, is as as follows: Of transferable stock - $516,410 24

Of untransferable stock, arising from balances to creditor States

Total

46,901 12 $563,311 36

rate above mentioned, at any time before the time before the year 1801, the whole of the present Debt of the United States, Foreign and Domestic, (the funds appropriated being, during the whole period, adequate, in productiveness, and inviolably applied) would be extinguished in thirty years. And there would then revert to the United States, Some auxiliary provisions, which will be proposed, an annual income of 4,435,320 dollars and 89 cents. may greatly accelerate that result.*

On the basis of the foregoing data, the Secretary of the Treasury proceeds to submit to the consideration of Congress, certain propositions, which appear to him necessary to be adopted to complete our system of public credit. These will be followed by some explanatory remarks. I. PROPOSITION.

That further provision be made, with regard to the yet unsubscribed Debt of the United States, as follows:

If the redemption of the present six per cent. stock commence the first of January, 1796, and the redeeming fund be commensurate with the whole of the unredeemed stock bearing a present interest of six per cent., and transferable, the revenue set free in the year 1818, for operations upon the residue of the Debt, will be $2,039,394 36. If the redemption of the Deferred Debt commence the first of January, 1802, when it may rightfully commence, and the redeeming fund be commensurate with the whole of that stock, unredeemed and transferable, the revenue set free in the year 1824, for operations upon the residue of the Public Debt, if any remain, will be $998,307 02. The revenue set free by these successive redemptions, would be sufficient to redeem the whole of the present Foreign Debt in six years; that is, within a term of twenty-eight years from the proposed time for commencing the redemption, or the 1st January, 1796; and, after extinguishing the Foreign Debt, would more than discharge the whole of the balances to creditor States, and the whole of the unfunded Debt, in two years more. If the proceeds of the lands in the Western territory should be equal to three millions of dollars, and the three per cent. stock can be purchased at an average of twelve shillings in the pound, that fund would suffice to pay off the principal of the three per cent. stock, in something more than twenty-five years.

It follows, that, if the force of the Sinking Fund be rendered equal, exclusive of the proceeds of the sales of Western lands, to the redemption of the present unredeemed transferable stock, commencing the 1st of January, 1796, as to that bearing a present interest of 6 per centum, and the 1st of January, 1802, as to that bearing a future interest of 6 per centum; and if the proceeds of the sales of Western lands should prove equal to 3,000,000 of dollars, and can be brought into action for purchasers of the 3 per cent. stock, at the

holders to subscribe the arrears of interest up to that period, separately from the principal, reserving that principal on its original footing.

2d. An appropriation to be made for payment of interest on so much of the principal (excepting Loan Office certificates bearing interest on the nominal value) as, at the end of the year 1795, shall remain unsubscribed, for the term of one year, according to the rate or rates stipulated by the original contracts, and for the payment of ten per centum of the arrears of interest thereupon, to the same end of the years 1795. This payment to be made on the 1st of January, 1796, at the Treasury, where no particular place of payment is stipulated, and at such place, where there is one. 3d. The specie principal of the Loan Office cervificates, which bear interest on the nominal value, together with the arrears of interest, to be immediately paid off.

II. PROPOSITION.

That provision be made for taking, upon Loan to the United States, by subscription at the Treasury, the outstanding and unbarred new emission bills of credit, the sums subscribed to be paid in the principal only of those bilis, and the stock of the new Loan to bear an interest of 5 per cent. per annum, payable, quarter yearly, at the Treasury, and redeemable at the pleasure of the United States, by payment of the principal, with a stipulation to pay the same at the expiration of thirty years. The Loan to be deemed to commence on the first of January, 1796, and to rest on funds permanently pledged, namely, the permanent reve

nues.

III. PROPOSITION.

That provision be made for converting, by a new Loan, the whole of our present Foreign, into

*These results are not stated with fractional correctness, because it is not necessary to a satisfactory conclusion, and the minuteness of the calculation would have demanded more time than can conveniently be spared.