have been increased about 50 per cent. during the last session of Congress. The produce of this duty may therefore be stated at 60,000 dollars, the expenses of collection at 3000 dollars, or 5 per cent., and the net revenue at dollars 57,000.

The controversy just alluded to has already been mentioned. This tax differs from others upon consumable commodities, ~ 1stly, in that it is not paid once for all, but yearly, being laid on the use and not on the consumption properly so called; and, 2dly, because it is paid immediately by the person on whom it finally falls, instead of falling upon him indirectly through the medium of a tax upon the manufacturer,-circumstances which give it the appearance of a direct tax. If, however, the principles upon which a definition of direct taxes has been attempted are correct, this tax will be found to be indirect, as it falls altogether upon an article of expense and not of revenue. For in the only instance where a carriage affords a revenue to the owner, viz., when it is kept for hire, the tax is not paid by him, but by those who consume, who use, who hire the carriage. In that it essentially differs from a tax upon houses, which it has been thought in some particulars to resemble. A house, indeed, is not a productive article in itself; it is an object of expense and not of revenue to him who enjoys it; but it is not less an article of revenue to the owner; and as, except in a few particular cases, the demand for houses regulates the rent and cannot be affected by the tax, this almost universally actually falls upon the owner and not upon the tenant, upon the revenue and not upon the expense. The duty upon stills, proposed as a substitute in toto for that upon spirits distilled, might, perhaps, upon a first view, be deemed a direct tax, as falling upon a productive article; but in this case the still is only used as the means of ascertaining the quantum of duty, and the tax does not fall on the profits of the distiller, on his revenue, but on the consumer of the spirits distilled, on his expense. A tax upon all articles of visible property, assessed in proportion to its value, or to the rent derived from it, and which would include stills, would, however, it seems, be a direct tax. A want of precision in the expression itself, and the difficulty of distinguishing, in all cases, articles of revenue from articles of expense, render it, however,

perhaps impossible always to ascertain whether a tax is direct or not; and it will be more prudent in practice to raise, as direct and indirect taxes respectively, only such as clearly come within that denomination under which the Legislature of the Union shall class them, and to leave those of a doubtful nature to the individual States.

The statement No. VII. exhibits a view of all the internal duties for the year 1794-1795; the gross revenue amounting to 425,700 dollars, the expense of collection to 76,650 dollars, or 18 per cent., and the net revenue to 349,050 dollars.

The statement No. VIII. exhibits a view of the same revenue, according to its probable productiveness hereafter. The gross revenue is there stated at 494,000 dollars, the expenses of collection at 83,375 dollars, or 17 per cent., and the net revenue at 410,625 dollars. The permanent revenue from internal duties will, therefore, be estimated at dollars 410,000

OF DUTIES ON POSTAGE.

The statement No. IX., which exhibits a view of this branch of the revenue, requires no explanation. The gross amount is yearly increasing, and the greatest part of the surplus is commonly appropriated in extending the benefits of the institution through those parts where a scattered population could not support the expense. It still leaves a net revenue of about dollars 30,000. The expenses of institution cannot be considered as charges of collection; they are not a tax upon the people, but only the payment of a highly beneficial and necessary public undertaking for which the community should have to pay, whether it was done by individuals or government. In this particular this revenue essentially differs from what is raised by taxes, and for this reason has not been classed with the internal duties.

OF THE DIVIDENDS ON BANK STOCK.

The United States hold five thousand shares of the stock of the Bank of the United States, which have cost them, at 400 dollars a share, a sum of 2,000,000 dollars. This sum they borrowed from the bank itself at the rate of six per cent. a year, and had on the 1st of January, 1795, discharged 600,000 dollars of that loan. But, as they were enabled to make that payment only by contracting new loans, the actual revenue under this head consists only of the difference between the interest paid by government upon the loan and the dividend received upon the bank stock, which, at the average rate of a dividend of 8 per cent. a year, might be estimated at about 40,000 dollars a year. As, however, in the account of expenditures, the whole amount of yearly interest payable on that, as well as on all other loans, will be charged, this branch of revenue is here set down at its nominal amount of dollars 160,000.

But if the 40,000 dollars, bounties to fisheries, are deducted from the amount of duties on imports and tonnage, these will be reduced to 5,770,000 dollars, and the total amount of net revenue will then be Dolls. 6,370,000

VOL. III.- -8

SECTION II.

OF THE EXPENSES OF THE UNITED STATES.

Of the Receipts and Expenditures to the 1st January, 1796.

In order to have a distinct and comprehensive view of the expenditures of the Union, it is necessary to consider at once, and without any reference either to the different funds or to the places where the moneys may have been received or paid, the whole of the disbursements and consequently of the receipts of the United States. The statement No. X. exhibits a view of those receipts and disbursements from the establishment of the present government to the 1st of January, 1796, distinguishing those under each year, except for the years 1789, 1790, and 1791, which, in the official documents, are generally blended together. The receipts are arranged under the following heads, viz.:

1. Moneys arising from balances of accounts which originated under the late government.

2. Revenue arranged under the different heads mentioned in the preceding section.

3. Incidental, consisting of sundry items which cannot properly be considered as a permanent revenue, viz., fines and forfeitures for crimes,' fees on patents, sales of arms, and profits on sundry bills of exchange drawn for moneys remitted from America to Holland, and from Holland to America and to France.

4. Loans, distinguishing those effected in Amsterdan and Antwerp from those obtained in America, and, amongst these last, those obtained in anticipation of the revenues from all others.

The expenditures are arranged under the different heads of

1 Fines and forfeitures incurred for breaches of the revenue laws are included under the respective heads of revenue.

current expenditure, interest on the public debt, reduction of the public debt, and reimbursement of loans and subscription to the Bank of the United States; the current expenditure being classed under the heads of civil list, pensions and grants, military establishment, intercourse with foreign nations, and sundries, which last item, besides miscellaneous and contingent expenses, includes those attending the light-houses and the mint establishment. The statement marked (A) exhibits at one view the general results both of the receipts and expenditures.

100

It results from that document that, during the period of six years and a half, the expenditures have exceeded those receipts which arose from the revenues (including therein incidental receipts) of the present government by a sum of dols. 3,228,961-1. For during that time the aggregate of loans amounted to dollars 19,503,204,37, which, added to dollars 162,639,291 received on account of balances due to the late government, form a total of dollars 19,665,84356; whilst, on the other hand, the moneys applied to the reduction of the public debt amounted only to dollars 13,922,924 33, which, added to 2,000,000 dolls. subscribed to the Bank of the United States, and to dollars 513,95815 balance remaining in cash on first of January, 1796, form a total of only dollars 16,436,8828%; the difference between which sum and the above-stated sum of dollars 19,665,84366, received upon loans and old accounts, is equal to the above-mentioned excess of expenditures, viz., dollars 3,228,96118. Or the aggregate of receipts arising from revenues and incidental sources amounts during that period to dols. 24,347,956,86, which sum is less than the total of current expenditures, including therein the interest and charges upon the public debt, amounting for the same period to dollars 27,576,918, by the same above-stated sum of dollars 3,228,961.

1009

It must, however, be observed that this account includes only the moneys actually received in and paid out of the Treasury in

1 The greater part of this sum, viz., dollars 132,475,3%, was a balance in cash remaining at the time of the establishment of the present government in the hands of the bankers of the United States in Holland.