MARCH, 1796.]

Loan to the City of Washington.

[H. of R.

Congress, except, indeed, the agreeable society of pledged the United States as guarantee. He should its members during their session. But he consider-continue to oppose it.

ed this humorous kind of discourse on serious sub- Mr. BRENT said, the present bill seemed to be jects as calculated to keep out of view more im- peculiarly obnoxious to the gentleman from Pennportant considerations. He had stated that theylvania last up, because it purported to guaranbill was an illusion; that the United States as-y a loan for the erection of public buildings in sumed and held out to the public and to money-the Federal City. He said, he was by no means lenders a right to pledge property, which, he ven tenacious about the title, so that the object of the tured to say, they did not possess. He had said bill was obtained. He said, the apprehensions of this, though the Attorney General and three pro- the gentlemen from Pennsylvania and Connectifessional gentlemen in that House maintained an cut were the most unfounded that could be imaopposite opinion; for all his respect for their sen- gined, and if they had noticed the observations timents could not induce him to abandon hisown in which had fallen from his colleague, they must that which he had expressed. He had not been have seen that they were unfounded. When they singular. and he trusted he had shown satisfactory recollected what the lots had sold for, the number grounds on which he supported it. But, if the remaining on hand unsold, and the price they will opinion of the Attorney General was just, and most probably command, when it is known that the land was at the disposal of the United States, Congress has agreed to guaranty the proposed he contended that would be a decisive reason loan, it must be one of the most idle apprehenwhy the bill should not pass, because it did not sions to suppose that this property will not be a furnish for the United States the best indemnity sufficient guarantee for the amount of the loan. that, conformably to that opinion, the case is sus- Gentlemen had said that if, when the original act ceptible of. passed, it had been supposed that application It had been agreed, before the recommittal, that would have been made to Government to aid the if greater security than the bill offers could be erection of the public buildings, it would never given them, it ought to be given. If the opinion have gone into effect. He knew not what might contended for is correct, the land can, and, if it have been the opinion at that time. He formed can, it ought to be placed in the hands of a re- his ideas from the act of Congress itself. There sponsible public officer: whereas, at present it he found if there were certain concessions made was in the hands of private trustees, persons no by any State for the use of the General Governway amenable to the United States, but by pro-ment. Congress stipulated that the Seat of Govcess in the Courts, in the common forms. He was sure the PRESIDENT was not publicly responsible until the money came into his hands. When grants of money were paid into his hands he was responsible for them.

ernment should be removed. In consequence of this declaration, two States and several individuals of the States had made considerable sacrifices. Will gentlemen, then, say that, after these circumstances had taken place, and these offers had been States was not pledged? If so, they view the solemnly accepted, that the faith of the United

It has been said the trustees could not touch the money. From whence was this opinion col-matter in a far different light from him. Objeclected? The trustees alone can convey to pur- tions had been made with respect to the security chasers. The money, by the deed, is expressly of the United States with respect to the trustees. appropriated, first, to pay the original price of the It would be sufficient to say that these subjects land, and must pass through the hands of the were fully considered by the select committee, trustees before the residue can be paid over to and they had taken the opinion of the Attorney the PRESIDENT for public purposes. He had said General, which was clear and satisfactory. Those the present bill was liable to another objection, who heard the deed read would recollect that the viz: as holding out a false view to money-lenders property was to be conveyed to trustees, and sold, and he had been astonished to hear from a gentle-from time to time. under the direction of the PREman from Connecticut [Mr. HILLHOUSE] that money-lenders would take care of themselves and that Government need not make itself uneasy on that head. He was sure that such a sentiment did not agree with that delicate and tender regard which that gentleman always appeared to profess for the purity of public credit.

SIDENT, the money to be appropriated by him for the erection of suitable public buildings for the use of Government. But, according to the gen tleman from Pennsylvania, the public had no security but the money might be diverted by the trustees to other purposes. This opinion was so far from just, the trustees could never have Mr. SITGREAVES Said, he was willing that Gov-touched the money, as the property is to be sold ernment should remove to the new city as pro under the direction of the PRESIDENT OF THE posed, and would lay no obstruction in the way UNITED SPATES. He should be glad to know, of that removal. There was, however, an essen- therefore, what possible risk there could be in the tial difference between interposing obstructions disposal of the property? The purchaser will and refusing aid, which we were not bound to see that the trustees are the sole agents, and that grant. They ought to say, "We are bound to the money is to be under the direction of the PREgo if you are ready to receive us, but we will SIDENT. Can it, then, be supposed that any purnot become city builders." This bill, he said. chaser will pay his money other than agreeably was predicated on a possibility that we should to the direction of the PRESIDENT? one day have to pay the money, for which it

With respect to engagements on the part of the

H. of R.]

Loan to the City of Washington.

public. It had been suggested that sufficient money had been paid into the hands of the PRESIDENT to finish the public buildings. The fact might be so. He did not mean to determine on the misapplication of money. But, admitting the buildings were on too extensive a scale, and the money had been squandered, against whom does this accusation retort? Not against those who gave it, but on that House, who had not attended to the expenditure of it. The fault rested with them, but they were not, on that account, dissolved from their engagement. The gentleman from Connecticut said he entertained no wish to obstruct the removal of Government, but he was unwilling to grant the proposed loan. If he objects to the buildings being on too large a scale, but is still willing to transfer the Government, he should have brought forward his objections in an earlier stage of the business, and suggested a different kind of plan for the buildings. But, as he had suggested no such plan, the gentleman's making an objection to the mode now, appears like an attack upon the bill itself. And, if he were of opinion that it was desirable to remove the Goyernment at the time appointed, it was essentially necessary to guaranty the loan, as the buildings were now at a stand for the want of the necessary aid, or they must legislate under the canopy of Heaven. He trusted, therefore, the gentleman would see the propriety of voting for the present bill.

[April, 1796.

country, and unknown, he would have need of a guarantee if he wanted to borrow. He trusted the bill would pass by a large majority, which would serve to show to the public that they did not mean to impede but to cherish the growth of this infant city.

The sense of the House was then taken by yeas and nays, and the bill passed, 72 against 21, by the following vote:

YEAS.-Fisher Ames, Abraham Baldwin, Lemuel Benton, Thomas Blount, Benjamin Bourne, Theophi lus Bradbury, Richard Brent, Dempsey Burges, Samuel J. Cabell, Gabriel Christie, Thomas Claiborne, John Clopton, Isaac Coles, William Cooper, Jeremiah Crabb, Henry Dearborn, George Dent, Samuel Earle, William Findley, Dwight Foster, Jesse Franklin, Albert Gallatin, Ezekiel Gilbert, William B. Giles, James Gillespie, Nicholas Gilman, Henry Glen, Benjamin Goodhue, Christopher Greenup, William B. Grove, Wade Hampton, George Hancock, Carter B. Harrison, Robert Goodloe Harper, John Hathorn, John Heath, James Hillhouse, William Hindman, James Holland, George Jackson, Matthew Locke, Samuel Lyman, Nathaniel Macon, James Madison, Francis Malbone, John thony New, John Nicholas, Alexander D. Orr, John Milledge, Andrew Moore, William Vans Murray, AnPage, Josiah Parker, John Patton, Francis Preston, Robert Rutherford, Theodore Sedgwick, John S. Sherburne, Jeremiah Smith, Nathaniel Smith, Israel Smith, Isaac Smith, Samuel Smith, William Smith, Thomas Sprigg, George Thatcher, Uriah Tracy, John E. Van Allen, Abraham Venable, Peleg Wadsworth, John Williams, and Richard Winn.

NAYS.-Theodorus Bailey, Nathan Bryan, Joshua Coit, Abiel Foster, Chauncey Goodrich, Andrew Gregg, Roger Griswold, Jonathan N. Havens, Aaron Kitchell, Samuel Maclay, Frederick A. Muhlenberg, John Reed, John Richards, Samuel Sitgreaves, John Swanwick, Zephaniah Swift, Absalom Tatom, Richard Thomas, Mark Thompson, Philip Van Cortlandt, and Joseph B.

Varnum.

DUTIES ON DISTILLED SPIRITS.

Mr. CRABB said, he should have expected ob jections from any part of the Union sooner than from Pennsylvania. One of the members from that State [Mr. SITGREAVES] had told them that there was no obligation on Congress from the original act at least he knew not of any such. But he had forgotten that they were bound to sit in Philadelphia ten years; and, if they might judge from the gentleman's language on this occasion, he thought they might conclude he wished Mr. TRACY, from the Committee of Claims, to keep them longer. His colleague [Mr. SWAN-presented a bill to provide for the widows and orWICK] traveled no further than the title of the phans of certain officers who have died of wounds bill, and found a bill authorizing a Loan for the received in the service of the United States since City of Washington. But, if he had read the the 4th of March, 1789; which was received and first clause of the bill, he would have found that read the first and second times, and ordered to be the money was wanted to complete the public engrossed, and read the third time to-morrow. buildings in that city. The same gentleman went on to say, that it was degrading to America to borrow money in a foreign country to erect their public buildings, and that, before he should do this, he would come forward and lay taxes upon his constituents. If that gentleman was willing to do this, he was not. He thought it would be a wanton abuse of their power to lay a tax unnecessarily. He had no doubt but the lots would sell for double the sum proposed to be borrowed. It had also been said that a guarantee amounted to a loan. No guarantee could be made without such words. The same gentleman proceeded, and said, if the lots were worth the money why call upon Government for a guarantee, why not borrow money upon the lots themselves? That gentleman, said Mr. C., might borrow his thousands or tens of thousands at home, where his property is known, but if he were in a foreign

Mr. MACON said, owing to a failure of their crops, a number of his constituents had distilled far less than their usual quantity of spirits, and he therefore wished they might be permitted to pay their duties in proportion to the quantity made, instead of being charged according to the capacity of their stills. He laid a resolution on the table to that effect.

THE BRITISH TREATY.

The Message from the PRESIDENT read yesterday in answer to the call for papers, was referred to the Committee of the Whole on Wednesday next.

FRIDAY, April 1.

A bill extending the provisions of a bill for the relief of widows and orphans of officers who have

died since March 4, 1789, was read a third time and passed.

A memorial from the Washington Company of Maryland, praying for a portion of the Western lands, on certain conditions, and against a clause in the bill before the House respecting the receiving of certificates in part of payment for the land, was read and referred to the Committee of the Whole on the bill for opening offices for the sale of land in the Northwestern Territory.

Several petitions were presented from the Western country, praying the English and Spanish Treaties to be carried into effect.

ADDITIONAL REVENUE.

The House then went into a Committee of the Whole on the report of the Committee of Ways and Means, on the state of the receipts and expenditures of the United States. The first resolution, contemplating a calculation for a direct tax, being under consideration

[H. OF R.

solution as reported. They thought a part of the necessary revenue might be raised from subjects of indirect taxation, but by no means to an adequate amount. The subject of direct taxation being a new one, they did not think it expedient at this time to make a particular report on the subject, but barely to provide that some system should be formed for the next year, by consulting the laws and practices of the different States, so as to make the system most palatable to each.

The committee had not determined that they would ultimately support a tax of this kind, but only to acquire all the information they could upon the subject. If, when this report from the Secretary of the Treasury shall have been made, the House should not think the plan a desirable or practicable one, it may be rejected. The House will see that some revenue must be had. Taxes of every kind were disagreeable, if they could be avoided, but that was impossible. Some gentlemen had supposed that indirect taxes would be Mr. JEREMIAH SMITH said, he should be glad to less embarrassing and more agreeable to the peobe informed of the reasons which induced this re-ple of this country; but if, upon the best informasolution. He doubted not the committee had tion which could be got, it should be found unagrounds for bringing it forward; but he must own voidable to resort to a system of direct taxation, he did not feel himself prepared to agree to a sys- they must individually surrender their prejudices tem of direct taxation; his prejudices were in fa- against that system. In making these observavor of indirect taxes. He did not like direct tax-tions, he did not feel himself in the least commitation; he thought it could only be justified by necessity. He should be glad, however, for information on the subject.

Mr. W. SMITH, the Chairman of the Committee of Ways and Means, observed, that if gentlemen examined the statement of the Committee of Ways and Means, they would see the necessity of the measure proposed. When gentlemen objected to plans brought forward by Committees of Finance, it would be well if they would substitute something in their place; if not, they must leave the Government in an embarrassed situation. This subject had occupied much of the time of the Committee of Ways and Means, which it was known was composed of a member from each State in the Union. The committee had attentively examined the state of the revenues and expenditures. and found considerable sums due to the Bank of the United States, a heavy Foreign Debt, a considerable increase of expense from the Deferred Debt, which becomes payable after the year 1800. It was absolutely necessary, therefore, to provide some means of meeting these exigencies, because they could not now, as had been customary heretofore, pay the instalments as they became due, by new loans in foreign countries. They must now pay the debt by raising a revenue for the purpose, or by new loans in this country. It was supposed, from the present demand for money in this country, it would not be possible to borrow money on advantageous terms; they had, therefore, no other resource than taxation. The committee having fixed this necessity as a basis, they were next led to inquire into the best means of effecting the business. Direct or indirect taxation were to be necessarily resorted to. In investigating the first, so many difficulties presented themselves, they were obliged to confine themselves to the re4th CoN.-28

ted to support a plan of direct taxation; he confessed he would much rather go into indirect taxation; but it was the sense of the committee that this method should be tried. A principal motive which influenced them to make this trial was this: Almost the whole of the present revenue depends upon commerce-on a commerce liable to be deranged by wars in Europe, or at the will of any of the great naval European Powers; they therefore were of the opinion that it would be a prudent measure to have a system of direct taxation organized, which might be resorted to in cases of necessity. And although he should be against entering upon a system of direct taxation at present, yet he was in favor of a plan being systematized, which might supply any deficiency which might arise in the revenue from the causes above stated. He hoped no embarrassment would be thrown in the way of this subject in the present stage of it, by any prejudices which gentlemen might have against this system of taxation, as, hereafter, when the information required was laid before them, they could then exercise their judgments more completely upon the subjects; they would, at any rate, be in possession of a plan of raising a considerable revenue, which might be resorted to, at least in cases of necessity. For these reasons, he hoped the motion would be agreed to.

Mr. DAYTON (the Speaker) said he should enter upon a system of direct taxation with great caution. It was untrodden ground, and they ought to examine it well before they entered upon it. But he thought the present resolution a proper measure to introduce them to a view of the subject. which they might act upon or not, as they might hereafter determine. The forming of such a system would also have this good effect: it would have a tendency to make individual States

improve their present imperfect system of taxation-for he could not help considering them imperfect as to the difference in value betwixt improved and unimproved land, and betwixt different kinds of improved land in the same State; as, when the different States saw the General Government digesting a plan of taxation, they would naturally compare their own systems with the one proposed, and improve them where they thought them deficient. He had no objection, therefore, to agreeing to the resolution. He had an objection to the sum mentioned; he wished it might be less. He felt disinclined at present to a system of direct taxation; but if it was eventually adopted, he trusted care would be taken to have it duly enforced.

[APRIL, 1796.

Mr. HILLHOUSE said, the sum mentioned in the resolution had been objected to. He argued that it did not matter what the sum was, as it was merely mentioned in order to furnish a rule for the Secretary of the Treasury to found his calculation upon. But he would move that the sum should be left blank, which would leave the Secretary of the Treasury more at liberty. For it was not his idea, though they were directing this inquiry to be made, that they were about to

He thought, if a little more was laid upon the luxuries of life, it would please the people better than direct taxes. He trusted, before the end of their session, they should considerably lessen the public expenditure. There had been very large sums expended for the last two years. If they discontinued their Naval Armament, sold materials collected, and reduced their Army Establishment to one-half to what it had been calculated on by the Secretary of the Treasury, it would make a reduction in the public expenditure of near two millions of dollars. Hence no necessity for direct taxes; for if they continued at peace, he believed their present revenue would meet every necessity of Government. He should not observe farther at present, but would speak to the other resoluMr. WILLIAMS should not object to the resolutions when they were before the Committee. tion before the House, though he was persuaded the formation of the plan proposed would be attended with great difficulties. In the State which he represented, a plan for direct taxation had been attempted for some years, and they could not agree on the mode. He should, nevertheless, wish to see such a plan brought forward by the Secretary of the Treasury; though he was of opinion it ought never to be resorted to but in time of war or in cases of extreme necessity. It was a positive kind of taxation, and such as could not be avoid-lay a direct tax. ed. A farmer may be supposed to be always prepared to pay his share of taxes; yet, in cases of bad crops, they find farmers amongst the poorest of their citizens. This being the case, it would be almost impossible to raise a direct tax from them; but if the tax be indirect, it will be optional with them whether they pay it or not, in times of scarcity; and, when their crops return, they will purchase a larger quantity, and by that means pay a double tax. If taxes were paid on goods imported, the industrious man paid but few of them. But should he be asked how they were to raise the revenue? Suppose he were to pay ten shillings for a yard of cloth, and out of that sum two shillings went for duty, two for profit, and six to the foreign merchant, so that out of £200,000 received for an article of that kind, £120,000 would go to the public stock of a foreign country? Were this saved, it would enable them to raise taxes much easier in other ways. Hence, indirect taxes are paid at the option of the consumer, and those taxes operate as a spur to industry, as well as an encouragement to their own manufactories. But suppose direct taxes of the Governments of individual States? The General Government, he said, had guarantied to each individual State a republican form of Government; but he thought direct taxes would not tend to secure them in it. Whenever the Governments of individual States had a surplus of money in hand, it ought to be employed in the encouragement of manufactures, in making roads and inland navigation, so as to be enabled to bring with all possible facility the produce of the country to market, so as to undersell every other market. This being the case, he should be against direct taxes, except in cases of emergency. Besides, indirect taxes generally went to luxuries, and left people at liberty to purchase them or not.

Mr. NICHOLAS hoped the amendment would not be pressed. It was not of much consequence what was the sum proposed, but it would be better that some specific sum should be named; because, in proportioning a direct tax, the Secretary of the Treasury must assume some sum. If he directed to lay a tax for two millions, it would be easy to reduce it at once; but if only laid for five hundred thousand dollars, he might omit a number of things which he would introduce in calculating for two millions.

Mr. BOURNE hoped the amendment would be agreed to. The resolution called upon the Secretary of the Treasury to make out a plan by which a direct tax might be laid. He knew there was no tax so disagreeable to the people as direct taxes. He thought it would be improper, therefore, to hold out any idea of such a tax being laid, except in a case of absolute necessity. He agreed to this proposition in the committee, because the present revenues, depending almost entirely upon commerce, were very precarious, and liable to be interrupted by war, and it was necessary they should have some resource to which they might resort in case of any interruption being put to their commerce. With respect to their ordinary course of taxation, he trusted they should not have recourse to a system so disagreeable as that of direct taxation. It would be necessary they should have an increase of revenue in the year 1801 ; but he trusted the prosperity of their commerce would be such as to enable them to meet the public exigencies at that period. They had found that their revenue had doubled its amount since it was first laid, and, from the growing situation of their commerce, they might reasonably expect a continuance of its increase. The gentleman from New York had suggested that some additional