APRIL, 1796.]

Debt due Bank of the United States.


The gentleman from Pennsylvania (Mr. GALLA- his attention the necessity of a speedy extinction of the TIN] had yesterday declared, that, at thecommence-Government Loans, and to indicate a disposition on the ment of the present session, the Secretary of the part of the Bank to receive a stock, to be sold on account Treasury did not expect that any such Loan would of the United States, to be created on the terms abovehave been proposed; nor did the Bank then expect

mentioned. the payment of the Loans with which it had accommodated the Government. In support of his well knew, were precisely the same as those de

Those terms, the gentleman from Pennsylvania declaration, the gentleman read a passage from the tailed in the bill. first report made the present session by the Secre.

The gentleman had made a very serious charge tary. That passage declared, that the anticipa- against a number of gentlemen in this House: tions of the revenue which might exist at the close He said that it was "an object to perpetuate and of the present year must be continued the next. increase the Public Debt.” This charge was jusThe gentleman had from hence inferred, that those tified neither by the general tenor, nor by any

one anticipations were to continue in their present act of the political lives, of those gentlemen. Nut, form. The report imported no such idea, but only withstanding they had, in every instance, and that the Secretary did not expect any measure under the weight of an embarrassing and powerful would be adopted this session for the extinguish opposition, exerted, on every occasion, all their ment of those Loans by payment. This was not faculties to improve and enrich the public reveonly the meaning of the Secretary, but that mean- nues. The same gentleman had, during the last ing was perfectly well koown to the gentleman session, under the weight of the same opposition, himself at the moment he made this declaration. carried through an act which was intended to, and To prove, at the same time, the meaning of the he believed would, ultimately annihilate the Debt. Secretary, and that that meaning was well known Yet, those who had never attempted to propose to the gentleman, he would take the liberty to state any measure to improve the revenue, or decrease some facts which he certainly would not deny. the Debt-who had never proposed any system of

Soon after the appointment of the Committee their own-but, on the contrary, constantly opof Ways and Means, and, he believed, at the very posed and embarrassed every measure, had the first meeting of that committee, and at which meet- boldness to charge the men who were endeavoring the gentleman was present, an interview took ing to support the Public Credit and diminish the place between the committee and the Secretary. Public Debt, with designs which they neither At that time the Secretary made the proposal, the avowed por entertained. He would declare that object of which was detailed in the bill, with this men of pure and honorable intentions did not lightly only difference, that his proposal extended to the impute impure motives to others. suin-total of the amount of the Debt due to the Bank. This was about the time that the report was charge was made had been known to have com

If, indeed, the gentlemen against whom this foul made. The gentleman then did know, at that time, bined, "in every measure which might obstruct that the Secretary's report did not mean what he the operation of law" or Government, if they had had declared it did.

publicly declared to the world, that the men who This conclusion was irresistible. This, however, would accept of the offices, to perform the neceswas not all. Very early in the session, a report of sary functions of Government, were lost to every a committee of the Bank was put into the hands sense of virtue ;"" that, from them was to be withof the gentleman: he read this report, and consi- holden every comfort of life which depended on dered its contents. This report commented on this those duties, which, as men and fellow-citizens, very proposition. It was, too, in consequence of a we owe to each other;" if the gentleman had been proposition made to the Bank by the Secretary-guilty of such nefarious practices, there would a proposition in which the Secretary and the com- have been a sound foundation for the charge of mittee of the Bank perfectly concurred. It was the gentleman. But they, it was known, had been not true, then, that the Secretary of the Treasury, innocent of such actions; and it was also well at the commencement of the present session, known that they were equally so of the intenexpected that the Loans for anticipations were to tions which the gentleman had unjustly im puted continue in their present form, but that they were

o them. to be exchanged for the Loan which was proposed by the bill. In this idea the Bank perfectly con

It would certainly, with every man who viewed curred. With all these facts, the gentleman was the subject of Public Credit as he did, be of little well acquainted: it was then incumbent on him importance whether the finances had or had not to reconcile his declarations with the state of facts been wisely administered. It would, however, be which he perfectly knew.

proper, after what bad been said on this occasion, Here Mr. S. read the following passages from to state generally waat had been done by himself the report of the Committee of the Bank:

the other day in detail-that the extraordinary " It is very interesting to the Bank to devise some expenses which had been sustained and discharged practicable means of liquidating their obligations, which since the commencement of this Government, had

$10,000,000 have grown to such an enormous and disproportionate amounted to at least

2,500,000 size as to paralyze its operations, by depriving it of so That there has been paid in purchases

5,000,000 large a portion of its capital.” “It is therefore recom- Paid of unfunded debt

2,000,000 mended that a committee be appointed to confer with Purchases of Bank stock

4,500,000 the Secretary on the subject of this letter, to press on Due in credits to the revenue

H. OF R.]
Debt due Bank of the United States.

[APRIL, 1796. Paid in pursuance of the reduction act of

veroment to obtain the necessary supplies ?-last session

600,000 Not from Europe, it was agreed. Not from pri

vate individuals,' because the enterprising capi24,600,000

talists in this country could more profitaly emFor this there was due to the Bank(including

ploy their capital than by Loans to the Govern$1,400,000, due for our stock in that in

ment; not from other banks, because their capitals stitution) the sum of (excluding the Loan

were inadequate to supply the demands of indiof 400,000, to pay the instalment due in Amsterdam)

viduals, which was a more lucrative branch of 6,200,000

their business. Besides, did none of these objec

tions exist, who would 'intrust their property in Leaving a balance, beyond ordinary expenditures, of

the hands of a Government which made its own · 18,400,000

convenience, and not the stipulations of its con

tracts, the rule of its conduct in fulfilling, or more He believed no man, at the commencement of properly violating its promises ? What, then, the Government, would have predicted that such were to be the circumstances of this country in the success, and under such circumstances, could have event of an unforeseen demand, for which every attended its administration.

Government ought to be prepared? If war, or Mr. S. then proceeded to a particular statement insurrection, or captured citizens, should require of the several Loans which had been made of the our aid, would our Government be in the situaBank. By which it appeared that $2,500,000 had. tion to grant that relief and protection for which been loaned at five, and the residue at six per cent. the guardians of its security and happiness ought That one million of this was advanced for the always to be prepared? But the gentleman had suppression of the insurrection, and another mil- said, that this measure would protract the period lion (including $200,000 had of the Bank of New of the ultimate extinguishment of the Public York) for the peace with Algiers. That, in the Debt. This was a circumstance which he thought formet instance, the Government had been ena- no honest man ought to take into consideration. bled, by the aid it received from that institution, We ought only to inquire into the amount and to quell without bloodshed an insurrection raised terms of the public contracts, and, without hesitaby misrepresentation and falsehood-an insurrection or further inquiry, to perform them with good tion which threatened the peace, liberty, and hap- faith. But he did not believe this measure would piness of this country, and to deluge our land with in the least degree shackle the public faculties. the blood of contending brethren. In the latter It had already been stated, by his friend from instance, the assistance we had received had been South Carolina, (Mr. Smith,] that, until the year the means of unchaining our citizens held in cruel 1800, besides the $600,000 required by the reducand savage slavery.

tion law, another $600,000 would be necessary to It ought to be recollected that the whole specie perform the public engagements. It was known that stock of the Bank amounted to no more originally after that time another annual demand of $1,200,than $2,000,000. To this had been added $600,- 000 would occur. We had, besides a considerable 000, paid by the United States. From this state- amount of Foreign Debt, $1,200,000 of unfunded ment, it was obvious that the Bank must, to afford debts, (he had spoken in round numbers,) and the the accommodation which it had to Government, whole three per cents. to operate upon. Was have disposed of a considerable portion of that there not here, in the opinion of the most sanpart of its capital which consisted of funded stock-guine man, sufficient subjects for the existing faca stock bearing an interest of six per cent., with ulties of the community, or for any which could ample funds mortgaged for its security. This be created ? If, then, no injury could accrue to security had been relinquished; the proceeds had the public, it would seem to him mere wantonness again been intrusted to the Government, and for to reject the proposition. a considerable part at a lower rate of interest. But it had been said that the public had a right For their security they had relied alone on the to expect accommodation from the Bank, because public faith, the result of this question would de- we were large depositors and large stockhclders. cide the value of the pledge. They now demanded How, he asked, were those accommodations to be a fulfilment of the public engagements. Money obtained ? By contracts, or without them? We we had not. They were willing to receive pay had been accommodated by mutual agreement, ment of the same nature, su'stantially, as that and might be again if we honestly performed our which they had disposed of, to obtain the money engagements. Were we to obtain those accomwhich they had loined, and would negotiate the modations by a violation of public faith? He sales of it without any expense to the United hoped and believed not. Having received the States. Under these offers, the most fair and rea- property of the institution by contract, and resonable which could be expected, the question was fusing to perform our engagements, from what whether we would violate the public faith by re source was the Bank to expect reimbursement ? jecting the demand ?

It was answered, by taxes. Indirect taxes, howIt had been agreed, and was indeed most evident, ever, the gentleman had constantly resisted. No that the Bank could not, consistently with its in- taxes had been imposed the present session; none terest or safety, make any further advances, what to any considerable amount probably would be. ever the public exigencies might be. Should any on these the gentleman did not depend; he had unforeseen pressure occur, where was the Go- at all times opposed them, as a member of the

APRIL, 1796.]
Debt due Bank of the United States.

(H. of R. Committee of Ways and Means. These Loans, first items no provision had been contemplated, then, were to be satisfied by direct taxes. It would except new loans. The taxes appropriated for become proper, then, to consider whether at all the repayment of the last had proved insufficient. and if at all, when payment might be expected These several sums, of $1,200,000, had or would by those means? Direct taxes, he said, had for- become due during the course of the present year, ever been considered as the substitutes for every and must be provided for. Even if they were of tax which had been proposed. He could not help opinion to raise new revenues, those could not be observing that it was well known that every productive during the course of the present year, Houşe previous to the present, and he did not be- and no resource was left but to borrow; and if lieve this would be found an exception, had been money could not be got except upon the terms decidedly opposed to laying direct taxes. On the contemplated by the bill

, however averse he was Committee of Ways and Means it was found that to the funding of a debt and postponing the time direct taxes, in the opinion of some gentlemen, of its payment to so remote a period, he saw at were to be resorted to. A sub-committee was present no alternative, and they were forced to appointed to consider the subject, who, after ma-acquiesce in the measure. But this was not the tare deliberation, reported that the laying and cold case with the $3,800,000 anticipations. The Bank lecting a direct tax was practicable, but that they had heretofore continued their loans in anticipahad not, and could not obtain, the present session, tion of our revenues from year to year; there the materials necessary for that purpose. The was no official paper before them to show that business finally resulted in the direction to the they meant to do so no longer, and that that instiSecretary of the Treasury to report a plan for tution had required that that sum should be paid consideration at the next session.

at once during the present year. It was not conHe did not believe that any plan which could templated by the Secretary of the Treasury, at be devised would meet the approbation of the the opening of the session; for, in his report to two branches of the Legislature. Although he the House, of the 4th of December, he says: should always be willing to consider the sub-"But as a great proportion of the revenue arising ject with candor, yet he much doubted if he, from imports is subject to long credit, the customeven in a time of tranquility, should assent to a ary anticipations, by means of loans, will continue mode of taxation which would be so burdensome to be necessary." And again, after having stated and oppressive. But should it obtain the next the deficiency of $1,200,000 for the same objects session, he asked, would it be productive to the above mentioned, he says: “ There are other amount necessary to discharge those demands loans detailed in the annexed statement which which ought now to be satisfied? It would, doubt. will also fall due to the Bank of the United States less, with every degree of success which could be in the course of the ensuing year; but as they are supposed to aitend the measure, be some years merely anticipations of the revenue, for refunding before the payment which is now demanded in which there exist legal provisions, they are introthe terms of contract, could be made. In the duced to show the course of receipt and expendimean time the operations of the Bank are to be ture, and the extent to which future anticipations crippled, and the Government left without any will be requisite." And finally gives as a concluresource in case of the most pressing emergency. sion, " that the anticipations of the revenue which He had made these observations from a sense of may exist at the close of the present year, must

public. duty, from a regard to the preservation of be continued for the year ensuing." · public faith, and without any personal interest, Indeed the gentlemen who press the measure of never having had the least property in the Bank. funding these anticipations, seem to do it from a

Mr. GALLAtin said that the question now be belief ihat it will be a measure advantageous to fore them was, whether they should fund the the United States. He would therefore consider anticipations on the revenue, which had been the subject at present only in regard to the inteadvanced by the Bank, and amounted to $3,800,- rest of the public, and upon a supposition that the 000, or whether they would, by refusing to fund Bank were willing, provided the instalments of that sum, declare their intention to provide means the other loans were regularly paid, to continue for discharging those anticipations ?' It was agreed the loans in anticipation of the revenue, and on all hands that they were pressing hard on the would be satisfied provided a gradual and certain Treasury; that they must render the situation of mode of repayment were adopted. It was, therethe gentleman at the head of that Department fore, on this ground that he differed in opinion precarious and unpleasant; that they were a dear with the gentlemen who wished the whole of the mode of procuring money, and that some means five millions to be funded. The plan of those must be devised to get rid of them. Upon the gentlemen, in order to get rid of these anticipa$1.200,000 (which together with the $3,800,000, tions, is to fund them, that is to say, in order to anticipations, made the sum of five millions con-pay them, to borrow money by creating a stock templated by the bill) there was no difference of irredeemable for twenty-three years; in other opinion. This last sum consisted of the following words, to postpone their payment for twentyitems: instalment due to Holland, $400,000, two three years. His plan was, to provide means for instalments due to the Bank of the United States, paying them in four or five years, and to raise a for the Bank Stock Loan, $400,000; and due to revenue, either by increasing the taxes or diminthe Banks of New York and the United States, ishing the expenditure sufficient for that purpose. for the Algiers Loan, $400,000. For the two His plan was to pay; the plan of those gentlemen

H. OF R.)

Debt due Bank of the United States.

[APRIL, 1796.

not to pay, but to borrow, to continue the debt for only shifting the debt, borrowing with one hand twenty-three years longer; and he would not and paying with the other. hesitate to repeat that the effect of that plan Applied 10 the Sinking Fund $957,770 65 would be to perpetuate the debt. He would not Certain claims under the old be deterred by any personal abuse, and no more Government, not funded and by that of the gentleman from Massachusetts (Mr. paid, he rated at

450,000 00 SedgwicK] than by that of any other person, from expressing his sentiments on that subject as well

$1,407,770 65 as on any other; and conscious as he was that Total amount of debt reduced by the application personal abuse would have no influence upon him, of the actual resources of the United States, which and never could prevent his doing what he thought sum being deducted from the above sum of to be his duty, he would, without remarking on $2,759,282 56, leaves an actual debt of about what had fallen from that gentleman, proceed to $1,350,000 on this score. that part of the subject which seemed to be the As far as he could judge from the official acmost important.

counts of the year 1795, he was of opinion that A question had naturally arisen whilst those the excess of expenditures over receipts for that anticipations were under consideration: How had year had created an increase of debt of at least they accumulated to that amount? Some gen- $1,000,000, but which he thought would be found tlemen had been at great pains to prove to the to amount to $1,500,000. House that they were not a proof that the Debt Those two sums made a total amount of about of the United States had increased; some, indeed, $2,800,000, being the excess of expenditures over had gone so far as to attempt to prove that they the receipts, from the establishment of this Gowere no debt at all. He would beg the Commit-vernment to the 1st of January, 1796. To prove tee to recollect that neither himself nor any other his assertion he produced the following statement, member of this House had said that the Debt had abstracted from the official yearly documents: increased; they had not touched that subject upon SUMMARY STATEMENT, exhibiting the receipts the present occasion. It might be supposed that it was not strictly in order to discuss it, but as the

into the Treasury from Domestic resources, question was started by the gentlemen in favor of

other than the proceeds of Domnestic Loans; the measure now under consideration; as their

and also the expenditures of the United States intention was, by representing our financial situ

charged to the said Funds other than for the ation in the point of view they had, to persuade

repayment of Domestic Loans. this House that there was no danger in going on, From the commencement of the present Government auticipating and funding, spending money, and

to the end of the year 1791. borrowing, and as the gentleman last up [Mr.

RECEIPTS. SEDGWICK had given them a statement of ten millions of dollars debt actually redeemed and From duties on imports and tonnage $4,399,472 99

From sundries extinguished, not to speak of some other millions

334 82 operated upon, he found himself impelled to take From balances due on accounts which up the subject, and to state what appeared to him

origi ted under the late Govern

ment to be our present situation.

11,001 11 He first stated that he would compare the whole

4,410,808 92 amount of actual receipts in the Treasury, as arising from the resources of the country, and excluding whatever had been received by means

EXPENDITURES. of Domestic or Foreign Loans, with the whole For the Civil List, including annuities amount of actual disbursements for the current

and grants

$719,823 25 expenditures of Government and the interest on For the War Department, including the Public Debt, excluding whatever had been

pensions to invalids and Indian exapplied to the payment on redemption of the prin


835,617 91 cipal of the Public Debt. If the expenditures had ($8,962 of this sum applied to France.) exceeded the receipts

, the difference must have For the intercourse with foreign nabeen supplied by borrowing money, by creating a


14,733 33 debt. He then stated $2,759,282 56, as the excess

For sundries, including light-houses, of expenditures over the receipts, from the esta

enumeration of inhabitants of the blishment of this Government to the 31st Decem

United States, contingent expenses ber, 1794, the latest period to which complete

of Government, miscellaneous claims, statements have been laid before the House. But for sundry claims arising from the late

56,401 19 from that sum must be deducted the following Government sums, which were applied by the Sinking Fund for interest on the Public Debt, viz :

293,013 84 to the redemption of the Domestic Debt, out of On account of the interest on the Dutch the actual resources of the United States. For. he observed, he ought not to take into account One

Debt for the year 1990 $35,087 71 what might have been redeemed by the applica

year's interest

(1791) on the French tion of moneys drawn from loans; as this was Debt

294,445 93


[blocks in formation]

$4,843,707 25

For the year 1794.
For the year 1792.


From duties on imports and tonnage
From duties on imports and tonnage - $3,579,499 061 From duties on stills and other internal
From duties on stills and domestic dis-

duties tilled spirits

72,514 594 Balance of Bank dividend From balance of Bank dividend

8,028 00

Sundries From sundries

7,520 21

Balances arising from the late GovernFrom balances due on accounts which originated under the late Govern

Balance deficient ment

4,702 82 Balance deficient

1,517,650 70

231,447 65 55,500 00 52,584 47


693 50 1,480,575 05

$6,664,507 92

$31,360 01 431,999 47

For sundry claims arising from the late

Civil List (not including annuities and

War Department, as per above
Sundries, including as per aboye, and

also Mint Establishment, annuities and grants, and intercourse with fo

reign nations Interest on the Public Debt for the year

1792, viz : On Domestic Debt $2,373,611 28 On Foreign Debt 678,389 63

5, 189,945 39

For sundry claims arising from the late

Civil List

War Department, including $265,-
$135,723 35

344 911, for militia, on the Western

expedition, and $42,049 66 for for368,319 86

1,215,812 96

Naval Armament
Extraordinary expense of intercourse

with foreign nations
160,351 89

Interest on Domestic

- $2,455,856 60
On do. Loans

48.694 44 On Foreign Debt 674,410 23 3,052,021 91

2,733,539 29

61,408 97 170,830 40

56,408 51

3,178,961 27

Transferred to Sinking Fund, as per


[blocks in formation]

$5,189,945 39

Sketch of the year 1795.

From duties on imports and tonnage

$5,598,961 26 From duties on stills, spirits, snuff,

sugar, carriages, sales at auction, li$4,344,358 26 censes on retailers (a)

337,255 36 Bank dividend (whole amount)

For the year 1793.

RECEIPTS. From duties on imports and tonnage From duties on stills and domestic

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160,000 00 248,654 00 | Sundries

41,365 53 38,500 00 Balances arising from late Government 5,317 95 12,962 30 Balance deficient

1,402, 251 63

distilled spirits
Balance of Bank dividend
Balances arising from the late Govern.


8,448 58

$7,535, 151 73

$4,652,923 14

(a) From this amount should be deducted the drawbacks on spirits, sugar, and snuff; but the amount should then

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