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State of the Finances.

upon, is considered, alone, as amply sufficient to close of the present year, fall much short of five cover any possible defalcation which might, during millions of dollars, far exceeds the sum which it the next and ensuing year, reduce that branch of is prudent to keep. the revenue below last year's estimate of $9,500,- 2dly. The uncollected arrears of the direct tax, 000. Such defalcation is not, however, appre- estimated at four hundred thousand dollars. And, hended : for, although there are not yet sufficient 3dly. The outstanding uncollected internal dudata precisely to ascertain the effect of peace on ties, amounting to near seven hundred thousand the amount of duties, those which are in the pos- dollars. session of this Department tend to corroborate the The only embarrassment experienced during presumption that that sum, at least, (nine millions the course of last year, arose from the difficulty of and a half,) will hereafter be annually received. procuring the remittances necessary to meet the The statement B. which exhibits a comparative large instalments of the debt due in Holland. The view of that revenue for each quarter, during the impossibility of obtaining bills on that country to last two years, shows that the amount of duties the amount wanted by Government, and the loss accrued during the nine first months of the pres- which, on account of the rate of exchange, must ent year exceeds $11,300,000; and, after deducting be incurred by remitting circuitously through $3,500,000 amount of debentures issued during England, induced the Secretary of the Treasury the same period, on account of re-exportations of to recommend, in a report to the Commissioners foreign goods, leaves for those three quarters, a of the Sinking Fund, marked C, a recourse to balance of more than $7,800,000, subject to no bank stock, as the most favorable mode of reother deduction but the expenses of collection; mitting. and from the knowledge already obtained of the Of the five thousand shares in the stock of the importations, during the present quarter, as well Bank of the United States, originally subscribed as from the gradual diminution of re-exportations, by the United States, 2,780 shares had been sold no doubt remains that the net revenue, accruing in 1796, by virtue of the act, entitled "An act during the whole year, will exceed the estimate. making provision for the payment of certain debts

From present appearances, the whole of the of the United States," and for the purpose of dispermanent revenues of the United States may, charging a part of the debt due to ihe bank. The therefore, be reasonably computed at ten millions remaining 2,220 shares were now, under the same of dollars; of which sum $7,300,000 are appro- authority, sold at 45 per cent. advance. The priated for the payment of the principal and in- $1,287,600 which they produced were, in conierest of the public debt, and $2,700,000 are appli-formity to the provisions of the said act, applied cable to the current expenses of the Government. towards discharging an equal amount of that part

According to the estimates for the year 1803, of the debt which had become due to the bank those expenses will, exclusively of a sum of one before or during the year 1796; and the purchaser hundred and eighty thousand dollars, wanted to of the stock sold at the same time to the Treasury cover the navy deficiencies of the years 1801 and an equal sum in bills on Holland at 41 cents per 1802, but including sundry permanent appropria- guilder, the securing of which large amount, at tions, which make no part of the annual estimates, that rate, was the inducement, on the part of Govamount to two millions six hundred and sixty ernment, to dispose of the bank stock on those thousand dollars, to wit:

terms. As the dividend usually received on the For the Civil department, and all domestic ex- bank stock sold, and the annual interest payable penses of a civil nature

$680,000 on the debt due to the bank, thus extinguished, For expenses attending the intercourse

were nearly equal, the July half-yearly dividend with foreign nations, including prize

on the stock was, in fact, the premium paid for causes and Barbary Powers

250,000 the purpose of effecting the remittance; and GovFor the Military and Indian depart

ernment has thereby been enabled to obtain,

830,000 without raising the price of exchange, the whole For the Naval Establishment, calculat

amount wanted to meet the payments due in Holed on a supposition that six frigates

land till the month of September, 1803. , shall be kept in constant employment 900,000 Exclusively of, and in addition to the debt of

$1,287,600 thus paid to the bank out of the pro2,660,000 ceeds of the sales of bank shares, a sum of eight

millions three hundred and thirty-four thousand Neither the payments due on account of the seven hundred and fifty-seven dollars and eightyconvention with Great Britain, and which will, pine cenis has been paid out of the Treasury durfor three years, amount annually to eight hundred ing the year ending on the 30th day of Septemand eighty-eight. thousand dollárs, nor the instal- ber last, on account of the principal and interest ments and interest on account of the $200,000 of the public debt; and the payments, in part, of loan obtained fron the State of Maryland for the the principal of the debt made during the same city of Washington, are included in that calcula- period, have been as follows: tion, as they may be defrayed out of the following ist. The payments on account of the principal sources, which make no part of the permanent and interest of the domestic debt have been revenues, viz:

$4,628,105 39 1st. The surplus of specie in the Treasury, From which deducting one year's which, as the whole amount there will not, at the interest on the same

3,470,259 75

ments

State of the Finances

C.

Leaves a sum applied to the reim

the principal and interest of the public debt, dear bursement of the principal of the

three millions nine hundred thousand dollars will six per cent. and deferred stocks of 1,157,845 46 be wanted to pay the interést which falls due in 20. Paid to foreign officers, and for

the year 1803, and the residue, amounting to three the registered debt

9,603 18 millions four hundred thousand dollars, may be 3d. Principal of domestic loans (ex

considered as the sum applicable, during that year, clusively of $1,287,600 paid out

to the extinguishment of the principal of the debt

. of the proceeds of bank shares 202,400 00

From all which it results, that, so long as the 4th. Evidences of public debt paid

United States shall not be afflicted by any unforefor lands

17,162 50 seen calamity, and whilst the public expenditures 5th. The payments on account of the

shall be kept within their present limits

, there principal and interest of the for

does not appear any necessity for increasing the eign debt, have been $3,310,874 32

public revenues. From which sum de

All which is most respectfully submitted, by duct one year's in

ALBERT GALLATIN, terest, $462,731 00;

Secretary of the Treasury. and a further sum

TREASURY DEPARTMENT, Dec. 16, 1802. of $82,284 98 545,01 985

[Tables A and B are omitted.] Leaves applicable to the payment of the principal

- 2,765,858 34 At a meeting of the Commissioners of the Sink:

ing Fund, on the 7th of June, 1802,

$4,152,869 66 Present: The Secretary of State, the Secretary And if to that sum shall be added the 1,287,000 00 of the Treasury, the Attorney General of the Uni

ted States. Paid on account of the principal of

The Secretary of the Treasury reported to the the debt due to the bank, out of

board, that provision has already been made 10 the proceeds of the sale of the

meet nearly all the demands which will become bank shares, the total amount of

due in Holland during the course of the present debt extinguished during that

year; but that it is necessary to make immediate year, will be found to exceed $5,440,469 66 provision for the payments on account of princi

pal and interest, which fall due there, during the The balance of specie in the Treasury, which, first five months of the year 1803, and amounting on the first day of October, 1801, amounted to to four millions four hundred and thirty-nine thou$2,948,718 73, had increased on the first day of sand eight hundred and thirty guilders, and payOctober, 1802, to the sum of $4,539, 675 57 ; mak- able at the following periods, viz: ing a difference in favor of the Treasury, of $1,590,- 1st of January,

872.700 guilders. 956 84 ; which last sum, added to the above-men- 1st of February

986,350 tioned payment of $4,152.869 66, made out of the 1st of March,

601,000 Treasury on account of the principal of the public 1st of June,

1,979,750 debt. makes an actual difference in favor of the That, from the great diminution of trade beUnited States, of more than $5,740,000 during tween this country and Holland, he has ascer

tained, during his late excursion to New York The payments on account of the principal of and Philadelphia, that it is impracticable to ob the public debt, from the first day of April 1801, tain bills on Holland to that amount; that the to the thirtieth day of September, 1802, (exclusive rate of exchange is already forty-one cents per ly of, and in addition to the bank debt, discharged guilder, and that any attempt, on the part of the out of the proceeds of bank shares) amounts to Government, to procure the large amount now $5.339,886 44, viz:

wanted, would indubitably raise, considerably, ebe On account of the domestic debt $1,334,942 81 rate of exchange. On account of the foreign debt 3,302,543 63 That, if it shall be attempted to remit, by the In repayment of temporary loans 702,400 00 way of England, the loss will be also considerable;

the present rate of exchange with that country

$5,339,886 44 being now above par, and raising, and would inAnd if to that sum shall be added

dubitably be enhanced, should Government come the increase of specie in the Treasu

into the market for large purchases ; and the rate ry, during the same period, which,

of exchange between England and Holland being (as the amount on the first of April

by the last advices, ten guilders eight stivers per 1801, did not exceed $1,794,044 85)

pound sterling, nor likely to become more favor amounts to

2,745,630 72 able, which, supposing the whole amount in bills

on England to be procurable (which is not be The difference in favor of the

lieved to be the fact) at 168, would, including the United States, for those eighteen

commission of one per cent. in England, amount months, will be found equal to $8,805,517 16 to forty-three and a half cents per guilder

.

That the Bank of the United States having of the annual appropriation of $7,300,000, for I been applied to, has refused to undertake to con

that year.

Encouragement to Manufactures.

tract for making the necessary remittance; and try excite improvement and accumulate wealth, that the two only considerable offers made to the the manufacture of arms by ourselves, and for Secretary are now submitted to the board viz: our own use, instead of receiving the fostering

The Manhattan Company offer to remit the protection of our Government, is defeated, after a whole, at the rate of forty-three cents per guilder. successful experiment of its utility-your me

Alexander Baring offers to remit guilders 3,140,- morialists can behold no point of improvement 487 16}, payable in Amsterdam, at the following upon which they can rest with stability; no manudates, viz:

facture, that promises to be permanent; no experiIst of January, 1803, 605,000 guilders. ment, that will flatter them with patronage and 1st of February,

685,000

encouragement. 1st of March,

425,000

Encouraged by the Government of the State, in 1st of June, 1,425,487 16

which your memorialists live, they have, at very And at the rate of forty-one cents per guilder: great expense, established manufactures of arms, Provided, however, that the United States shall and, in conjunction with others in the State, have sell to him the two thousand two bundred and nearly completed twenty thousand stand, for the twenty shares of the Bank of the United States, use of the Commonwealth of Pennsylvania. Alowned by the United States, at forty-five per cent. lured by this encouragement, they have increased advance, or at the rate of five hundred and eighty their establishments, taken in and instructed apdollars per share; which last proposition is recom- prentices, and excited by their undertakings, a commended by the Secretary of the Treasury as the petition--a spirit of enterprise, among their fellow most eligible; as, exclusively of the advantageous citizens, in this manufacture, so essential to narate of exchange thereby secured, the transaction tional safety, national independence, and national will not have any unfavorable effect on the rate reputation. If the independence and liberty of a of exchange generally, and, by so considerably nation depend upon the correspondence of its rediminishing the demand, will enable the United sources to its wants, then is there no want so imStates to obtain what is still wanted, at a reason- minent now, which should be more necessitously able rate; and because, in his opinion, the price supplied from the resources of our own country, obtained for the bank shares is more than could than the manufacturing of arms. But, by giving be obtained were they thrown in the market for a loose to the facility of importing arms, the sale, and more than their intrinsic value. Where-Government of the United States will crush this apon, it was

manufacture in its infant establishment, which Resolved, by the Board, " That the Secretary, your memorialists hoped to see cherished—if not of the Treasury be authorized to sell the shares of for the maintenance of the artist, at least for the he stock of the Bank of the United States, belong- safety of the country. Arms may be imported, ng to the United States, and that the proceeds but who will keep them in repair, after the dishereof be applied to the payment of the capital persion of our journeymen and apprentices, who s principal of any part of the debt of the United must engage in other pursuits, when the one they tates, which had become due to the Bank of the have been trained up in will cease to afford them nited States before or during the course of the subsistence? Will the day of importation last ear 1796, and which remains still unpaid, in con- forever? or will there never be a day when the rmity to the provisions of the act, entitled 'An manufacture of arms will be thought useful, and 1 making provision for the payment of certain merit the protection of Government? A given bts of the United States, passed on the 31st day stock of arms will be exhaustible in war, should May, 1796."

it happen; and from whence will it be supplied, JAS. MADISON, Secry of State. if arms are to be procured in another country, A. GALLATIN, Secry of Treasury, when the very cause of the consumption will preLEVI LINCOLN, Attorney General. clude the possibility of their importation ? But

the encouragement of such a domestic manufacture will establish an inexhaustible stock of arms,

in time of need; artists will be numerous, and NCOURAGEMENT TO MANUFACTURES.

manufactures convenient; the means will be easy,

and their attainment certain. At considerable [Communicated to the House, Feb. 4, 1803.] expense have your memorialists undertaken, and memorial of the subscribers, gun manufacturers, with some difficulty progressed in, the establish the borough of Lancaster, in the Commonwealth ment of this manufacture. Mills for the making Pennsylvania, respectfully showeth :

of gun barrels have been erected ; gun locks, and hat your memorialists have seen, with deep every other article in a gun, have been made in affecting concern, a resolution, to exempt from the best manner, and of the most substantial kind. ost duties, arms manufactured in foreign coun- The workmen, the execution, the machinery, and pass in the House of Representatives of the the demand, have all progressed apace with each ed States. To extend the hand of power, and other. A few years' more protection from Govthe manufactures of our common country: ernment, and this manufacture, in this country, eir most infant state, your memorialists would, we believe, will be too firmly established to be nes more pressing than the present, consider destroyed by the importation of foreign arms. litic; but, when, in the full enjoyment of Break it up, by the resolution you have adopted,

and peace, the various resources of our coun- and it will not revive for ages; for no security can 7th Con. 20 Ses.-41

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The Sinking Fund.

afterwards be given to its re-establishment, in

Treasury DEPARTMENT, Feb. 3, 1803. which a prudent man will confide. But, your The Secretary of the Treasury respectfully rememorialists do not consider the manufacture of ports to the Commissioners of the Sinking Fund. arms exclusively affected by this resolution, which ihat, since the date of the last report to Congress, passed your honorable House; they humbly con- of the 16th December, 1801, and to the 1st Januceive the principle of that resolution strikes deep ary, 1802, the following parts of the public debt at all our domestic manufactures: for, with this have been discharged: example before them, few manufacturers will be 1. In payment of instalments of six per cent. stock, disposed to place reliance on the improvement and viz: seventh iostalment of the six per cent. stock. permanency of any manufacture. Your memori

which, pursuant to the "Act making further proalists beg leave further io represent, that the manu- vision for the support of public credit, and for facture of arms, in this Siate, is not merely cir- the redemption of the public debt," passed the cumscribed within the limits of the county of 3d March, 1795; and the act in addition thereto, Lancaster; it is diffused over the State, equally passed the 28th April, 1796, became payable for progressing, in extent and improvement, through- the year 1801 $805,846 30 out; and they confidently assert that twenty thou- First instalment of the desand stand of arms can be annually manufactured ferred 6 per cent. stock, in this State.

which, pursuant to the Your memorialists beg leave to call the atten- acts above recited, also tion of your honorable body to this extensive became payable in 1801 272,416 24 manufacture, in this State, and they would, with

-$1,078,262 54 deference, ask, if it be prudent or politic to reduce 2. In payment of the tenth and last it, by a single decision-to destroy it with one insialment of the subscription loan blow! If our sister States to the southward have for bank stock, due on the last day not established, nor can now practically establish, of December, 1801

200,000 00 such extensive manufactures of arms, they can here be supplied, on the same terms we have sup- Amounting to

$1.278.262 54 plied our own Government; and though they may purchase arms cheaper in Europe than they Which payments were made out of the following can from the American manufacturer, yet, as they

funds: will suffer no grievance, when supplied on the 1. The interest fund on sums which accrued on same terms with other States, they should obtain the stock purchased, and transferred to the Comno preference by being supplied by importation, missioners of the Sinking Fund, in trust for the and that, too, at the expense of destroying a use- United States, as particularly stated in the docful domestic manufacture.

ument hereto annexed, marked B, 1801 If these considerations can command the atten

$312,282 68 tion of the honorable the Congress of the United 12. The fund arising from the payStates, we trust and pray that the impost duty or ment of debts which originated priarms will not be taken off; and that the encour- or to the present Constitution, as agement of manufacturing them among ourselves, particularly stated in the document will be considered not only expedient, but neces- marked C, 1801

420 00 sary. And your memorialists, as in duty bound, 3. The fund arising from dividends will ever pray.

on the capital stock, which be[Signed by Jacob Dickert and others.] longed to the United States, in the

Bank of said States, from the 1st

January, 1800, to the 30th June,
SINKING FUND.

1801, after deducting the interest

on the subscription loan for same [Communicated to the Senate Feb. 2, 1803.] period, as stated in the document Washington, Feb. 5, 1803. marked D, 1801

94,320 00 The Commissioners of the Sinking Fund, re- 4. The fund arising from the sale of spectfully report to Congress as follows:

public lands, being the amount That the measures which have been authorized

drawn by the agent to the Comby the board, subsequent to their report of the 16th

missioners, pursuant to the act of December, 1801, as far as the same have been

the 3d March, 1795, as stated in the completed, are fully detailed in the report of the

document marked E, 1801 - - 162,021 29 Secretary of the Treasury to this board, dated the 5. The proceeds of duties on goods, 3d day of the present month, and in the proceed

wares, and merchandise, imported; ings of the officers of the Treasury, therein referred on the tonnage of ships or vessels; to, which are herewith referred to, and prayed to

and on stills, and spirits distilled, bé received as part of this report.

in the United States; appropriated All which is respectfully submitted by

by the eighth section of the act of AARON BURR, Vice Pres't U.S. the 3d March, 1795, entitled " An J. MADISON, Secretary of State.

act making further provision for A. GALLATÍN, Secr'y ľreasury.

the support of public credit, and for LEVI LINCOLN, Atl'y Gen. U. $. the redemption of the public debt" 709,218 57 million loan, of the 13th of moneys paid into the Treasury

The Sinking Fund.

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Making in the whole the amount of

goods, wares, and merchandise, imthe reimbursements of the six per

ported, and on the tonnage of ships cent. stock, and the tenth and last

or vessels

- 6,759,125 77 instalment of the subscription loan for bank stock, as above stated $1,278.262 54 Making, in the whole, the annual

appropriation, by law, for the year That, besides the above-mentioned reimburse- 1802, under the act afore-menments, there remained, at the close of the year

tioned

$7,300,000 00 1801, an unapplied balance of 2,513,846.9 guilders, 2. From the proceeds of goods, wares, applicable to the payment of the principal and and merchandise, imported, and interest of the Duich debt for the year 1802, and tonnage, advanced by the Treasconsisting of remittances purchased and paid for, ury in order to enable the Combefore the 1st day of January, 1802, beyond the

missioners in Holland to make the sums wanted to meet the demands in Holland dur- payments in time, conformably to ing the year 1801.

fifth section of the “Act making That, during the year 1802, the following dis- provision for the whole of the pubbursements were made out of the Treasury, on

lic debt," and being in part and on account of the principal and interest of the public

account of the annual appropriadebt:

tion of $7,300,000 for the year 1803 785,152 28 1. There was paid, on account of the reimburse- 3. From the proceeds of 2.220 shares ment and interest of the domestic debt, the sum

of the capital stock of the Bank of

$4,654,699 61

of the United States, which have 2. On account of principal of moneys

been sold, in pursuance of the “Act borrowed of the Bank of the Uni

making provision for the payment ted States

1,290,000 00

of certain debts of the U. States," 3. On account of interest on domes

the proceeds of which have been tic loans

162,025 00

placed in the Treasury, as appears 4. On account of reimbursement of

from the proceedings of the accapital and interest of Dutch debt,

counting officers, herewith transexclusive of repayments into the

mitted, marked F

1.287,600 00 Treasury

3,243,065 91 5. On account of debts due to foreign

Amounting to

$9,372.752 28 officers

7,994 92 6. On account of certain parts of the

That the above-mentioned disbursements made domestic debt

14,966 84 during the year 1802, and amounting to $9,372,

752 28, together with the above-mentioned balAmounting to

$9.372,752 28 ance of 2,313,846.9 guilders, which remained un

expended on the 1st of January, 1802, have been Which disbursements were made out of the fol- 1. To the payment of the interest which, during

applied as follows, that is to say: lowing funds:

the year 1802. accrued on the whole of the pub1. From the funds appropriated by the first section lic debt, including domestic loans $4.065,738 47

of the “ Act for the redemption of the whole of the public debt, viz:

2. To the reimbursement of the following parts of From the fund arising from interest on the do- the debt of the United States, which have been mestic debt, transferred to the Commissioners discharged during the year 1802, viz: of the Sinking Fund, as per statement herewith Temporary loans obtained of the Bank of the Unifor 1802, marked B

$326,449 92 From the fundarising from payments

ted States, from the proceeds of 2,220 shares of bank stock

$1,287,600 00 into the Treasury, of debts which

From the proceeds of duties on meroriginated under the late Govern

chandise and tonnage

2,400 00 ment, as per statement herewith

Instalments of the Dutch debt which for 1802, marked C

888 79 became due by contract in 1802, From the fundarising from dividends

viz:

Guild., at 40 cts. on capital stock which belonged

Second instalment of two to the United States, in the Bank

millions loan, of the 4th of said States, from the 1st July,

March, 1774

- 250,000 1801, to the 31st December follow

Fifth and last instalment of ing, as per statement herewith, marked D

one million loan, of the

33,960 00 1st January, 1787 - 200,000 From the fund arising from the sales

Fourth instalment of one of public laods, being the amount

March, 1788

200,000 in the year 1802, as per statement

Third instalment of three herewith, marked E

179,575 52 millions loan, of the 1st From the proceeds of the duties on

February, 1790

600,000

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