60,000, and the permanent expenditure, including that relating to the Barbary powers, may be rated at

6th. Sundries, viz.: Mint establishment, 40,000 dollars; light-houses, 30,000; miscellaneous and contingent, 50,000

7th. Interest and charges on the public debt, viz.: Interest and charges on for

eign debt

Ditto on funded and un

funded domestic debt,

including the annual re-
imbursement of the six

per cent. stock

Ditto on the new loan of

five millions of dollars.

543,441

3,082,6968

300,000

Dolls.

100,000

120,000

Making for the whole amount of interest

and charges on public debts

The whole permanent expense appears, therefore,

4,051,006,25

Dollars 6,401,006-25

to be. From which deducting the interest now payable to the sinking fund, viz.

Leaves for the true amount of permanent expenses

88,242,70%

Dollars 6,312,763,4%

The permanent revenue has in the preceding section been rated at 6,370,000 dollars (after paying the bounties to the fisheries), and exceeds the above estimate of permanent expenditure by a sum of about 60,000 dollars. But the expenses of the year 1797 will be greater than the estimate by a sum of 80,000 dollars, being a premium which falls due that year on

the Dutch debt; and from and after the year 1800 the expenses will be increased by the annuity of eight per cent., payable from that period upon the deferred stock.

That annuity (including in the amount of deferred stock the unfunded as well as the funded part of the debt), after deducting dollars 55,753, the interest payable on that part of the deferred stock heretofore redeemed and vested in the sinking fund, amounts to dollars 1,116,878 73. From whence it results that from and after the year 1800 there will be an additional annual expense of more than eleven hundred thousand dollars, which must be provided for by additional revenues. Nor must it be forgotten that the sum of 50,000 dollars, set down in the above estimate for contingencies, will not be sufficient to discharge any of those extraordinary expenses which unforeseen circumstances may occasion, and which in some shape or other have taken place every year under the present government. It is, however, to be hoped that a sum sufficient to provide for those contingencies may, by economy and reductions, be in future saved upon the naval and military establishments.

Origin, Progress, and Present State of the Debt.

From the beginning of the Revolution, which gave birth to the United States, till the year 1781, they were united by no other tie than common danger, and the authority of Congress had no other foundation than common consent. Yet this body, supported only by common opinion, proclaimed the independence, levied armies, borrowed moneys, and carried on the war. The Articles of Confederation, adopted in 1781, did not give them any efficient power; for although they were authorized by that instrument to make requisitions of money from the

several States, yet they were not vested with any coercive power to raise money either from delinquent States or from individuals. How far the United States, had they even had a government clothed with sufficient authority, might have been able to carry on the war without contracting a debt is a matter of doubt. For not only they must recur to extraordinary resources in order to oppose the formidable enemy they had to encounter, but it is well known that the beginning of a revolution was a most unfavorable moment to raise any considerable taxes. The expenses of the war were defrayed by paper money, by advances made by the several States, and by loans contracted by Congress.

The paper money was issued by Congress for the purpose either of discharging contracts or of purchasing supplies. When issued for the last purpose, it is evident that it could not buy more than it was worth. But whenever it was issued in order to pay debts contracted before, and had depreciated in its value from the time when the contract was entered into, the difference was lost by the creditor and gained by the Union. In the case, however, of the pay of the army, the several States, on the recommendation of Congress, made up the difference to the officers and soldiers according to a certain scale of depreciation. This army depreciation, therefore, whether actually paid by the States, or whether, as was mostly the case, discharged only by creating a stock bearing interest, was amongst the advances made by the several States. The whole of the paper, for what-' ever purpose issued, was finally redeemed either by taxes or by loans. When redeemed by taxes, as those were exclusively raised by the several States, it became one of the advances made by them. But, however redeemed, the depreciation of the paper from the time of its issuing to its final redemption operated as a tax upon the people, and defrayed a part of the expenses of the war. For, even where it was redeemed by loans, Congress declared the Union to be indebted not for the nominal amount, but for the real value of the paper at the time it was lent to the public; which value was fixed also by a scale of depreciation and rather in favor of the creditor, as the paper was in no case valued at less than forty for one. A part of the

paper remained unredeemed at the close of the war, and has been funded, at the rate of one hundred for one, under the present government. It is hardly necessary to add that those arbitrary measures, which operated in so unequal and unjust a manner, can be justified only by the necessity of the case.

The advances made by the several States, exclusively of the army depreciation and of paper money, consisted chiefly of supplies in kind and of the pay of the militia respectively employed by them; the regular army being principally paid by the United States. Those advances were defrayed by the several States, either by taxes or by contracting debts. The sums advanced by each, and the proportion those sums respectively bore to the debts contracted by each, varied with their situation during the war, their resources, and their exertions. It was necessary, in order to apportion that burden, to calculate the advances made by each, and to adopt some uniform rule that should fix the proportion that each should have paid. The rule adopted by the Articles of Confederation, viz., a valuation of all the cultivated lands and houses, was difficult in practice and never carried into effect. The rule according to which the accounts have been finally adjusted is the census of the inhabitants of the United States made in 1791, which has operated in an unequal manner, since the increase of population of the different States has been very unequal since the termination of the war. What part of those advances should have been considered as a debt of the Union will be taken into consideration when the measures adopted on that subject by the present government are examined. The total amount of the advances actually made by the several States, as fixed by the final settlement of accounts, is not known, it having been thought prudent not to publish it; nor has the 1 proportion of those advances, which at the close of the war consisted in debts, been ascertained.

The depreciation of the paper money and that part of the advances made by the several States, which did not consist of debts, were, in fact, the only taxes raised upon the people during the war. The other expenses were defrayed either by individuals who advanced their capital or their services-and this constituted the domestic debt of the United States and of the indi

vidual States or by loans obtained in Europe, which constituted the foreign debt of the United States.1

The domestic debt contracted by the United States consisted of the debt due to the army [for arrearages of pay and for five years' pay given to the officers in commutation of the half-pay for life which had been promised to them], of supplies of different species purchased on credit, of loans (chiefly in paper money) obtained in America, and of the remnant of paper money yet in circulation. The principal exceeded thirty millions of dollars; the arrearages of interest to the 1st of January, 1784, might be estimated at five millions and a half of dollars; the principal and interest at about thirty-five millions and a half of dollars.

The foreign debt, almost solely due to France, amounted to about six millions and a half of dollars. The whole of the debt, foreign and domestic, to about forty-two millions of dollars.

From the 1st of January, 1784, to the 1st of January, 1790, the principal of the domestic debt was reduced by sales of land, which amounted to about 1,100,000 dollars; but, in the mean while, the interest accrued was near ten millions of dollars, of which about six millions remained unpaid.

During the same period the greatest part of the interest on the foreign debt accumulated to an amount of about 1,700,000 dollars; and a new debt was contracted in Holland of 3,600,000 dollars. The whole debt, foreign and domestic, increased, therefore, during those six years by a sum exceeding ten millions of dollars.

It must, however, be observed that, for a part of the interest on the domestic debt stated as unpaid, a new species of certificates, called "Indents," had been issued by Congress, which, being accepted by the creditors, seems to have discharged the Union from any further claims on that head. For those indents became thereby a charge against the several States, and would have been absorbed in requisitions, had not the adoption of the present government, by putting an end to those requisitions, rendered it an act of justice to provide for the outstanding indents.

1 Some of the individual States had also contracted a foreign debt.