REPORT ON THE FINANCES.

DECEMBER, 1806.

In obedience to the directions of the act supplementary to the act, entitled An act to establish the Treasury Department," the Secretary of the Treasury respectfully submits the following report and estimates.

REVENUE AND RECEIPTS.

The nett revenue arising from duties on merchandise and tonnage, which accrued during the year 1804, amounted, after deducting that portion which arose from the additional duties constituting the Mediterranean Fund, to

$12,673,458

And that which accrued during the year 1805, amounted, after making a similar deduction (as will appear by the statement A.) to

13,083,823

It is ascertained that the nett revenue which has accrued during the three first quarters of the year 1806, exceeds that of the corresponding quarters of the year 1805; and that branch of the revenue may, exclusively of the Mediterranean Fund, be safely estimated, for the present, at thirteen millions of dollars.

The statement (B.) exhibits in detail the several species of merchandise, and other sources from which that revenue was collected during the year 1805.

It appears by the statement (C.) that the sales of public lands have, during the year ending on the 30th September, 1806, exceeded 473,000 acres. The actual payments by purchasers, have, during that period, amounted to 850,000 dollars, of which sum near 700,000 dollars have been paid in specie, and the residue in stock of the public debt. The specie receipts from that source may, after deducting charges, and the five per cent. reserved for roads, be estimated for the ensuing year at five hundred thousand dollars.

The receipts arising from the permanent revenue of the United States, may, therefore, without including the arrears of direct tax and internal revenues, the duties on postage and other incidental branches, be computed. for the year 1807, at And the payments into the Treasury during the same year, on account of the temporary duties constituting the Mediterranean Fund, are estimated at

Making, in the whole, an aggregate of

I. The annual appropriation of eight millions of dollars, for the payment of the principal and interest of the public debt, of which sum, not more than 3,600,000 dollars, will, for the year 1807, be applicable to the payment of interest,

13,500,000

1,000,000

$14,500,000

EXPENDITURES.

The permanent expenses are estimated at 11,400,000 dollars, and consists of the following items, viz:

8,000,000

II. For the Civil Department, and all domestic expenses of a civil nature, including invalid pensions, the lighthouse and mint establishments, the expenses of surveying public lands, the fourth instalment of the loan due to Maryland, and a sum of 130,000 dollars to meet such miscellaneous appropriations, not included in the estimates, as may be made by Congress,

III. For expenses incident to the intercourse with foreign nations, including the permanent appropriation for Algiers

IV. For the Military and Indian Departments, including trading houses, and the permanent appropriations for certain Indian tribes,

V. For the Naval establishment,

The extraordinary demands for the year 1807, already authorized by law, amount to two millions seven hundred thousand dollars, viz:

The balance of the American claims assumed by the French convention, which remained unpaid on the 30th September last, 700,000 amounting to

And the two millions of dollars appropriated by the act of 13th February, 1806, making provision for defraying any extraordinary expenses attending the intercourse between the United States and foreign nations,

2,000,000

1,150,000

200,000

1,150,000 900,000

$ 11,400,000

2,700,000

Making altogether,

$14,100,000

From which it appears that, besides a surplus of four hundred thousand dollars, the resources of the ensuing year will be sufficient to meet the current demands, and to discharge, without recurring to the loan authorized by the last mentioned act, the extraordinary appropriation of two millions for foreign intercourse,

It is here proper to state, that, under the authority given by that act, a credit of one million of dollars has been opened in Holland to the Ministers of the United States appointed to treat with Spain. Should the credit be used, the million will be charged to the proper appropriation: but, although the balance chargeable to the expenditure of the year 1807, will in that case be only one, instead of two millions, as stated in the above estimate, the general result will be the same, as it will then be necessary to replace in Holland, the million thus employed for a different object than the payment of the foreign debt, to which it now stands charged.

The balance in the Treasury amounted, on the 30th day of September, 1805, to $4,558,664 02; and, on the 30th day of September, 1806, to $ 5,496,969 77. But it will, on account of the heavy payments to be made in the course of this month for the public debt, be probably reduced, on the 1st January, 1807, to a sum not much exceeding four millions of dollars.

PUBLIC DEBT.

The annexed note of the proceedings of the Commissioners of the Sinking Fund, marked (E.) shows that a considerable portion of the annual ap

propriation of eight millions of dollars, was applicable this year to the reimbursement or purchases of the domestic debt. No more than 17,517 dollars and 61 cents were offered at market price, and accordingly purchased. The reimbursement of the Navy six per cent., amounting to 711,700 dollars, was therefore effected on the 30th day of September last, and that of the five and half per cent. stock, amounting to 1,847,500 dollars, is advertised for the first day of January next. The payment of the last mentioned sum will be made by the Treasury in the course of this month. Although a more than usual portion of the appropriation for the calendar year 1806, falls, for that reason, on the last quarter, it appears by the statement (D.) that the payments on account of the principal of the public debt have, during the year ending on the 30th day of September, 1806, amounted to near three millions two hundred and fifty thousand dollars.

It appears by the same statement, that the payments on account of the principal of the public debt, have, from the 1st April, 1801, to the 30th September, 1806, amounted to $21,203,903 55

The payments on the same account, to be made by the Treasury in the course of this month, are—

For the reimbursement of the five and half per cent. stock,

For the annual reimbursement of the six per cent. and deferred stocks,

1,847,500 00

993,389 19

2,840,889 19

$24,044,792 74

And making the total of principal of the public debt, reimbursed from the 1st of April, 1801, to the 1st January, 1807, more than twenty-four millions of dollars.

During the same period there have also been paid to Great Britain, in satisfaction and discharge of the money which the United States might have been liable to pay, in pursuance of the provisions of the sixth article of the treaty of 1794, two millions six hundred and sixty-four thousand dollars; and to the holders of bills, drawn by the Minister of the United States at Paris, on account of American claims assumed by the convention with France, a sum exceeding three millions and fifty thousand dollars; neither of which sums is included in the preceding statement of debt redeemed.

As the only parts of the public debt, which the United States have a right to reimburse during the year 1807, consist of the annual reimbursement of the six per cent. and deferred stocks, estimated at 1,540,707 dollars, and of the four and half per cent. stock, amounting to 176,000 dollars, it will not be practicable, unless purchases can be effected within the limitations prescribed by law, to apply during that year, the whole of the annual appropriation of eight millions of dollars. The unexpended balance, together with the appropriation for the year 1808, will enable the United States to reimburse, on the 1st of January, 1809, the whole of the eight per cent. stock, which is irredeemable before that day.

But in order that Congress may have a clear view of the situation of the public debt after the year 1808, and be enabled to decide on the propriety of making further legislative provision for that object, it appears necessary to state distinctly: 1st, The operations which will take place in relation to the debt during the years 1807 and 1808. 2dly, The several species and aggregate of debt which will have been extinguished between the 1st April,

334

1801, and the 1st January, 1809. 3dly, The several species and aggregate of debt remaining unpaid on the last mentioned day. 4thly, A comparative view of the revenue and annual payments on account of the debt after that day. I. The payments to be made during the years 1807 and 1808, on account of the principal and interest of the public debt, consists of the following items, viz;

Interest and reimbursement of the six per cent. and deferred stocks,

Of which sum, the sum required for interest is 3,512,337 83
And the reimbursement of principal will

amount to

3,175,958 25

$6,688,296 08

Interest and charges on all the other species of debt,
Principal of the eight per cent. and four and half per cent.

stocks,

Making altogether,

That is to say, for interest,

And in reimbursement of principal,

7,041,795 33
9,714,358 25

$ 16,756,153 58

This sum exceeds by only 756,000 dollars, the sixteen millions appropriated by law for those two years, and that difference may be supplied, according to law, from the surplusses of revenue already accrued, which are sufficient for that purpose, and which it will be eligible to apply in that manner, in order that the United States may not continue to pay an interest of eight per cent. any longer than they are compelled to do it, by the terms of the loan,

II. The amount of debt redeemed from the 1st of April, January next, has been already stated to be

3,529,457 50

- 6,538,400 00

$16,756,153 58

6,688,296 08

Making, together, more than thirty-three millions seven hundred and fifty thousand dollars, reimbursed between the 1st April, 1801, and the 1st January, 1809.

Which sum consists of the following items, viz:
The whole of the foreign debt,

And the principal which will be reimbursed during the years 1807 and 1808, amounts, by the preceding statement, to 9,714,358 25

1801, to the 1st 24,044,792 74

The whole of the loans formerly obtained from the Bank of the United States, and of the Navy six, five and half, four and half, and eight per cent. stocks,

Annual reimbursement of the six per cent. and deferred stocks

12,537,600 00

10,631,575 67

353,867 27

$33,759,150 99

Payments in various species of stock, for public lands, stock purchased, and unfunded debt reimbursed,

III. The debt remaining unpaid on the 1st day of January, 1809, will consist of the following species:

Unredeemed amount of old six per cent. and deferred stocks, reimbursable only at the rate of eight per cent. a year, (for principal and interest,) on the nominal amount,

Three per cent. stock,

1796 six per cent. stock, redeemable in 1819, Louisiana stock, reimbursable in four annual instalments, in the years 1818, 1819, 1820, and 1821,

Amounting altogether to near fifty-seven millions and five hundred thousand dollars.

27,142,357 21 19,019,481 56 80,000 00

11,250,000 00

$57,491,838 77

The Louisiana stock cannot be reimbursed before the period fixed by the contract. The gradual operation of the annual reimbursement will extinguish the old six per cent. in the year 1818, and the deferred stock in 1824; after which year the only remaining incumbrance will be the interest on the three per cent. stock, which, in its present shape, may be considered as irredeemable. Purchases cannot be relied upon, as the application of even an inconsiderable sum would raise the stocks above the prices limited by law. It follows, that all the species of debt on which the entire annual appropriation of 8,000 000 dollars could operate, will have been reimbursed prior to the year 1809; that the remaining debt cannot, without some modifications assented to by the pubiic creditors, be more rapidly or completely discharged than is here stated; and that the annual payments on that account, will, after the year 1808, and prior to the year 1818, be reduced to the interest and annual reimbursement, amounting to near 4,600,000 dollars, as will more fully appear by the annexed table, marked (G.)

IV. The revenue derived from customs during the year 1802, which was a year of European peace, was much less in proportion than that of any of the immediately preceding or following years, and yet exceeded ten millions of dollars. As it has been ascertained that the population of the United States increases at the rate of thirty-five per cent. in ten years, the revenue derived from customs for the year 1812, may be estimated at thirteen millions five hundred thousand dollars: to which adding only five hundred thousand dollars for the annual proceeds of the sales of public lands, will give fourteen millions of dollars for the total revenue of that year, or for the average revenue of the years 1809-1815. And this must be consider ed as a very moderate computation, since it does not include the revenue derived from New Orleans; is predicated on the supposition that the wealth of the United States increases in no greater ratio than their population; and does not exceed the sum, which, exclusively of the Mediterranean Fund, was received last year into the Treasury.

The annual payments on account of the public debt, will, during the same period, amount, as has already been stated, to 4,600,000 dollars. All the other expenses of the United States, whether domestic or foreign, of a civil nature, or for the support of the existing military and naval establishments, do not at present exceed 3,500,000 dollars. The total annual expenditure, allowing four hundred thousand dollars a year for contingencies, may therefore be estimated, after the year 1808, at eight millions and a half; which, deducted from a revenue of fourteen millions, will leave a nett annual surplus of five millions and a half of dollars.