State of the Finances. close of the present year, fall much short of five millions of dollars, far exceeds the sum which it is prudent to keep. 2dly. The uncollected arrears of the direct tax, upon, is considered, alone, as amply sufficient to cover any possible defalcation which might, during the next and ensuing year, reduce that branch of the revenue below last year's estimate of $9,500,000. Such defalcation is not, however, appre-estimated at four hundred thousand dollars. And, hended: for, although there are not yet sufficient data precisely to ascertain the effect of peace on the amount of duties, those which are in the possession of this Department tend to corroborate the presumption that that sum, at least, (nine millions and a half,) will hereafter be annually received. The statement B. which exhibits a comparative view of that revenue for each quarter, during the last two years, shows that the amount of duties accrued during the nine first months of the present year exceeds $11,300,000; and, after deducting $3,500,000 amount of debentures issued during the same period, on account of re-exportations of foreign goods, leaves for those three quarters, a balance of more than $7,800,000, subject to no other deduction but the expenses of collection; and from the knowledge already obtained of the importations, during the present quarter, as well as from the gradual diminution of re-exportations, no doubt remains that the net revenue, accruing during the whole year, will exceed the estimate. From present appearances, the whole of the permanent revenues of the United States may, therefore, be reasonably computed at ten millions of dollars; of which sum $7,300,000 are appropriated for the payment of the principal and interest of the public debt, and $2,700,000 are applicable to the current expenses of the Government. According to the estimates for the year 1803, those expenses will, exclusively of a sum of one hundred and eighty thousand dollars, wanted to cover the navy deficiencies of the years 1801 and 1802, but including sundry permanent appropriations, which make no part of the annual estimates, amount to two millions six hundred and sixty thousand dollars, to wit: 3dly. The outstanding uncollected internal duties, amounting to near seven hundred thousand dollars. The only embarrassment experienced during the course of last year, arose from the difficulty of procuring the remittances necessary to meet the large instalments of the debt due in Holland. The impossibility of obtaining bills on that country to the amount wanted by Government, and the loss which, on account of the rate of exchange, must be incurred by remitting circuitously through England, induced the Secretary of the Treasury to recommend, in a report to the Commissioners of the Sinking Fund, marked C, a recourse to bank steck, as the most favorable mode of remitting. Of the five thousand shares in the stock of the Bank of the United States, originally subscribed by the United States, 2,780 shares had been sold in 1796, by virtue of the act, entitled "An act making provision for the payment of certain debts of the United States," and for the purpose of discharging a part of the debt due to the bank. The remaining 2,220 shares were now, under the same authority, sold at 45 per cent. advance. The $1,287,600 which they produced were, in conformity to the provisions of the said act, applied towards discharging an equal amount of that part of the debt which had become due to the bank before or during the year 1796; and the purchaser of the stock sold at the same time to the Treasury an equal sum in bills on Holland at 41 cents per guilder, the securing of which large amount, at that rate, was the inducement, on the part of Government, to dispose of the bank stock on those terms. As the dividend usually received on the bank stock sold, and the annual interest payable on the debt due to the bank, thus extinguished, were nearly equal, the July half-yearly dividend on the stock was, in fact, the premium paid for 250,000 the purpose of effecting the remittance; and Government has thereby been enabled to obtain, 830,000 without raising the price of exchange, the whole amount wanted to meet the payments due in Holland till the month of September, 1803. For the Civil department, and all domestic ex- For the Military and Indian depart ments For the Naval Establishment, calculated on a supposition that six frigates shall be kept in constant employment 900,000 2,660,000 Neither the payments due on account of the convention with Great Britain, and which will, for three years, amount annually to eight hundred and eighty-eight thousand dollars, nor the instalments and interest on account of the $200,000 loan obtained from the State of Maryland for the city of Washington, are included in that calculation, as they may be defrayed out of the following sources, which make no part of the permanent revenues, viz: 1st. The surplus of specie in the Treasury, which, as the whole amount there will not, at the Exclusively of, and in addition to, the debt of $1,287,600 thus paid to the bank out of the proceeds of the sales of bank shares, a sum of eight millions three hundred and thirty-four thousand seven hundred and fifty-seven dollars and eightynine cents has been paid out of the Treasury during the year ending on the 30th day of September last, on account of the principal and interest of the public debt; and the payments, in part, of the principal of the debt made during the same period, have been as follows: 1st. The payments on account of the principal From which deducting one year's 3,470,259 75 State of the Finances 1,157,845 46 9,603 18 202,400 00 17,162 50 Paid on account of the principal of the debt due to the bank, out of the proceeds of the sale of the bank shares, the total amount of debt extinguished during that year, will be found to exceed $4.152.869 66 $5,440,469 66 the principal and interest of the public debt, near All which is most respectfully submitted. by [Tables A and B are omitted.] C. At a meeting of the Commissioners of the Sinking Fund, on the 7th of June, 1802, Present: The Secretary of State, the Secretary of the Treasury, the Attorney General of the United States. The Secretary of the Treasury reported to the board, that provision has already been made to meet nearly all the demands which will become due in Holland during the course of the present year; but that it is necessary to make immediate provision for the payments on account of principal 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 $1,590,956 84; which last sum, added to the above-mentioned payment of $4,152.869 66, made out of the Treasury on account of the principal of the public debt. makes an actual difference in favor of the United States, of more than $5,740,000 during that year. The payments on account of the principal of the public debt, from the first day of April 1801, to the thirtieth day of September, 1802, (exclusively of, and in addition to the bank debt, discharged out of the proceeds of bank shares) amounts to $5.339,886 44, viz: On account of the domestic debt $1,334,942 81 And if to that sum shall be added the increase of specie in the Treasury, during the same period, which, (as the amount on the first of April 1801, did not exceed $1,794,044 85) amounts to The difference in favor of the United States, for those eighteen months, will be found equal to $5,339,886 44 1st of January, 1st of February, 1st of March, 1st of June, 872,700 guilders. 986,350 601,000 1.979,780 That, from the great diminution of trade between this country and Holland, he has ascertained, during his late excursion to New York and Philadelphia, that it is impracticable to ob tain bills on Holland to that amount; that the rate of exchange is already forty-one cents per guilder, and that any attempt, on the part of the Government, to procure the large amount now wanted, would indubitably raise, considerably, the rate of exchange. That, if it shall be attempted to remit, by the way of England, the loss will be also considerable; the present rate of exchange with that country being now above par, and raising, and would indubitably be enhanced, should Government come into the market for large purchases; and the rate of exchange between England and Holland being. by the last advices, ten guilders eight stivers per pound sterling, nor likely to become more favor2,745,630 72 able, which, supposing the whole amount in bills on England to be procurable (which is not be lieved to be the fact) at 168, would, including the commission of one per cent. in England, amount to forty-three and a half cents per guilder. $8,805,517 16 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 Encouragement to Manufactures. tract for making the necessary remittance; and that the two only considerable offers made to the Secretary are now submitted to the board viz: The Manhattan Company offer to remit the whole, at the rate of forty-three cents per guilder. Alexander Baring offers to remit guilders 3,140,487 161⁄2, payable in Amsterdam, at the following dates, viz: 1st of January, 1803, 605,000 guilders. And at the rate of forty-one cents per guilder: Provided, however, that the United States shall sell to him the two thousand two hundred and twenty shares of the Bank of the United States, owned by the United States, at forty-five per cent. advance, or at the rate of five hundred and eighty dollars per share; which last proposition is recommended by the Secretary of the Treasury as the most eligible; as, exclusively of the advantageous rate of exchange thereby secured, the transaction will not have any unfavorable effect on the rate of exchange generally, and, by so considerably diminishing the demand, will enable the United States to obtain what is still wanted, at a reasonable rate; and because, in his opinion, the price obtained for the bank shares is more than could be obtained were they thrown in the market for sale, and more than their intrinsic value. Whereupon, it was Resolved, by the Board, "That the Secretary of the Treasury be authorized to sell the shares of the stock of the Bank of the United States, belonging to the United States, and that the proceeds thereof be applied to the payment of the capital or principal of any part of the debt of the United States, which had become due to the Bank of the United States before or during the course of the year 1796, and which remains still unpaid, in conformity to the provisions of the act, entitled 'An act making provision for the payment of certain debts of the United States,' passed on the 31st day of May, 1796." try excite improvement and accumulate wealth, the manufacture of arms by ourselves, and for our own use, instead of receiving the fostering protection of our Government, is defeated, after a successful experiment of its utility-your memorialists can behold no point of improvement upon which they can rest with stability; no manufacture, that promises to be permanent; no experiment, that will flatter them with patronage and encouragement. Encouraged by the Government of the State, in which your memorialists live, they have, at very great expense, established manufactures of arms, and, in conjunction with others in the State, have nearly completed twenty thousand stand, for the use of the Commonwealth of Pennsylvania. Allured by this encouragement, they have increased their establishments, taken in and instructed apprentices, and excited, by their undertakings, a competition-a spirit of enterprise, among their fellow citizens, in this manufacture, so essential to national safety, national independence, and national reputation. If the independence and liberty of a nation depend upon the correspondence of its resources to its wants, then is there no want so imminent now, which should be more necessitously supplied from the resources of our own country, than the manufacturing of arms. But, by giving a loose to the facility of importing arms, the Government of the United States will crush this manufacture in its infant establishment, which your memorialists hoped to see cherished-if not for the maintenance of the artist, at least for the safety of the country. Arms may be imported, but who will keep them in repair, after the dispersion of our journeymen and apprentices, who must engage in other pursuits, when the one they have been trained up in will cease to afford them subsistence? Will the day of importation last forever? or will there never be a day when the manufacture of arms will be thought useful, and merit the protection of Government? A given stock of arms will be exhaustible in war, should it happen; and from whence will it be supplied, if arms are to be procured in another country, when the very cause of the consumption will preclude 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 manufactures convenient; the means will be easy, and their attainment certain. At considerable expense have your memorialists undertaken, and with some difficulty progressed in, the establish ment of this manufacture. Mills for the making of gun barrels have been erected; gun locks, and That your memorialists have seen, with deep every other article in a gun, have been made in and affecting concern, a resolution, to exempt from the best manner, and of the most substantial kind. impost duties, arms manufactured in foreign coun- The workmen, the execution, the machinery, and tries, pass in the House of Representatives of the the demand, have all progressed apace with each United States. To extend the hand of power, and other. A few years' more protection from Govcrush the manufactures of our common country.ernment, and this manufacture, in this country, in their most infant state, your memorialists would, in times more pressing than the present, consider impolitic; but, when, in the full enjoyment of order and peace, the various resources of our coun7th CoN. 2d SES.-41 JAS. MADISON, Secr'y of State. ENCOURAGEMENT TO MANUFACTURES. - [Communicated to the House, Feb. 4, 1803.] The memorial of the subscribers, gun manufacturers, in the borough of Lancaster, in the Commonwealth of Pennsylvania, respectfully showeth : we believe, will be too firmly established to be destroyed by the importation of foreign arms. Break it up, by the resolution you have adopted, and it will not revive for ages; for no security can The Sinking Fund. afterwards be given to its re-establishment, in which a prudent man will confide. But, your memorialists do not consider the manufacture of arms exclusively affected by this resolution, which passed your honorable House; they humbly conceive the principle of that resolution strikes deep at all our domestic manufactures: for, with this example before them, few manufacturers will be disposed to place reliance on the improvement and permanency of any manufacture. Your memorialists beg leave further to represent, that the manufacture of arms, in this State, is not merely circumscribed within the limits of the county of Lancaster; it is diffused over the State, equally progressing, in extent and improvement, throughout; and they confidently assert that twenty thousand stand of arms can be annually manufactured in this State. Your memorialists beg leave to call the attention of your honorable body to this extensive manufacture, in this State, and they would, with deference, ask, if it be prudent or politic to reduce it, by a single decision to destroy it with one blow! If our sister States to the southward have not established, nor can now practically establish, such extensive manufactures of arms, they can here be supplied, on the same terms we have supplied our own Government; and though they may purchase arms cheaper in Europe than they can from the American manufacturer, yet, as they will suffer no grievance, when supplied on the same terms with other States, they should obtain no preference by being supplied by importation, and that, too, at the expense of destroying a useful domestic manufacture. If these considerations can command the attention of the honorable the Congress of the United States, we trust and pray that the impost duty on arms will not be taken off; and that the encouragement of manufacturing them among ourselves, will be considered not only expedient, but necessary. And your memorialists, as in duty bound, will ever pray. [Signed by Jacob Dickert and others.] SINKING FUND. [Communicated to the Senate Feb. 2, 1803.] WASHINGTON, Feb. 5, 1803. The Commissioners of the Sinking Fund, respectfully report to Congress as follows: That the measures which have been authorized by the board, subsequent to their report of the 16th December, 1801, as far as the same have been completed, are fully detailed in the report of the Secretary of the Treasury to this board, dated the 3d day of the present month, and in the proceedings of the officers of the Treasury, therein referred to, which are herewith referred to, and prayed to be received as part of this report. All which is respectfully submitted by AARON BURR, Vice Pres't U. S. TREASURY DEPARTMENT, Feb. 3, 1803. The Secretary of the Treasury respectfully reports to the Commissioners of the Sinking Fund that, since the date of the last report to Congress, of the 16th December, 1801, and to the 1st January, 1802, the following parts of the public debt have been discharged: 1. In payment of instalments of six per cent. stock, viz: seventh instalment of the six per cent. stock. which, pursuant to the "Act making further provision for the support of public credit, and for the redemption of the public debt," passed the 3d March, 1795; and the act in addition thereto, passed the 28th April, 1796, became payable for the year 1801 $805,846 30 First instalment of the deferred 6 per cent. stock, which, pursuant to the acts above recited, also became payable in 1801 272,416 24 2. In payment of the tenth and last instalment of the subscription loan for bank stock, due on the last day of December, 1801 Amounting to $1,078,262 54 200,000 00 $1.278,262 54 Which payments were made out of the following funds: 1. 2. 3. 5. The interest fund on sums which accrued on the stock purchased, and transferred to the Commissioners of the Sinking Fund, in trust for the United States, as particularly stated in the document hereto annexed, marked B, 1801 The fund arising from the payment of debts which originated prior to the present Constitution, as particularly stated in the document marked C, 1801 The fund arising from dividends on the capital stock, which belonged to the United States, in the Bank of said States, from the 1st January, 1800, to the 30th June, 1801, after deducting the interest on the subscription loan for same period, as stated in the document marked D, 1801 4. The fund arising from the sale of public lands, being the amount drawn by the agent to the Commissioners, pursuant to the act of the 3d March, 1795, as stated in the document marked E, 1801 The proceeds of duties on goods, wares, and merchandise, imported; on the tonnage of ships or vessels; and on stills, and spirits distilled, in the United States; appropriated by the eighth section of the act of the 3d March, 1795, entitled "An act making further provision for the support of public credit, and for the redemption of the public debt" $312,282 68 420 00 94,320 00 162,021 29 709,218 57 Making in the whole the amount of the reimbursements of the six per cent. stock, and the tenth and last instalment of the subscription loan for bank stock, as above stated The Sinking Fund. goods, wares, and merchandise, imported, and on the tonnage of ships or vessels $1,278,262 54 Making, in the whole, the annual appropriation, by law, for the year 1802, under the act afore-mentioned That, besides the above-mentioned reimbursements, there remained, at the close of the year 1801, an unapplied balance of 2,513,846.9 guilders, applicable to the payment of the principal and interest of the Dutch debt for the year 1802, and consisting of remittances purchased and paid for, before the 1st day of January, 1802, beyond the sums wanted to meet the demands in Holland during the year 1801. That, during the year 1802, the following disbursements were made out of the Treasury, on account of the principal and interest of the public debt: 1. There was paid, on account of the reimbursement and interest of the domestic debt, the sum of $4,654,699 61 2. On account of principal of moneys borrowed of the Bank of the United States 1,290,000 00 162,025 00 3,243,065 91 7,994 92 14,966 84 $9,372,752 28 Which disbursements were made out of the following funds: 1. From the funds appropriated by the first section of the "Act for the redemption of the whole of the public debt, viz: From the fund arising from interest on the do- From the fund arising from payments From the fund arising from the sales 888 79 33,960 00 179,575 52 2. 3. From the proceeds of goods, wares, and merchandise, imported, and tonnage, advanced by the Treasury in order to enable the Commissioners in Holland to make the payments in time, conformably to fifth section of the "Act making provision for the whole of the public debt," and being in part and on account of the annual appropriation of $7,300,000 for the year 1803 From the proceeds of 2,220 shares of the capital stock of the Bank of the United States, which have been sold, in pursuance of the "Act making provision for the payment of certain debts of the U. States," the proceeds of which have been placed in the Treasury, as appears from the proceedings of the accounting officers, herewith transmitted, marked F Amounting to 6,759,125 77 $7,300,000 00 785,152 28 1,287,600 00 $9,372.752 28 That the above-mentioned disbursements made during the year 1802, and amounting to $9,372,752 28, together with the above-mentioned balance of 2,313,846.9 guilders, which remained unexpended on the 1st of January, 1802, have been applied as follows, that is to say: 1. To the payment of the interest which, during the year 1802, accrued on the whole of the public debt, including domestic loans $4.065,738 47 2. To the reimbursement of the following parts of the debt of the United States, which have been discharged during the year 1802, viz: Temporary loans obtained of the Bank of the United States, from the proceeds of 2,220 shares of bank stock $1,287,600 00 |
