The Act of July, 1812, which doubled the duties on importations, afforded a resource which, on account of the high rate at this time of those duties, cannot now be resorted to. Duties may, however, be levied on the importation of Tea and Coffee, and perhaps some other articles now duty free. Other modifications may be found useful, but it may be difficult to ascertain, even without any regard to protection, what are the rates of duties which should be imposed in time of war on the various imported articles, in order to render the revenue derived from that source as productive as possible.
It must also be observed that if, on account of the credit then allowed for the payment of duties on importations, the Treasury had, when the war of 1812 commenced, a resource in the revenue previously accrued but not yet collected, which does not now exist; on the other hand the United States were still encumbered with a considerable portion of the Revolutionary debt, and the payments on account of its principal and interest amounted during the years 1812, 1813, 1814, to about $11,000,000, whilst the annual interest on the now existing debt is less than one million.
The direct tax of the year 1815 amounted to $6,000,000, and the revenue which accrued during the same year, on the aggregate of internal duties, as increased or imposed at the same time, amounted to about the same sum. That year is also the most proper for a comparative view of the revenue derived from each object. In the subsequent years the revival of business increased the amount derived from the duties connected with the commerce of the country, much beyond that which could be collected in time of war; whilst, on the other hand, the excise on spirits was much less productive. The nett revenue derived from internal duties, which accrued during that year was in round numbers, about
| Excise on spirits | $2,750,000 | |
| Licences to retailers | 880,000 | |
| Sales at auction | 780,000 | |
| Stamp duties | 420,000 | |
| Tax on carriages | 150,000 | |
| Refined sugar | 80,000 | |
| Several manufactured articles | 840,000 | |
| Household furniture | 20,000 | |
| Watches worn by individuals | 80,000 | |
| ————— | ||
| Total | $6,000,000 | |
The three last items were those added on Mr. Dallas's recommendation to the first items laid in 1813, but the rate of which was increased, also on his recommendation. The manufactured articles not before taxed on which the new duties were laid were, pig and bar iron, nails; wax and tallow candles; hats, caps and umbrellas; paper and playing cards; leather, saddles, bridles, boots and shoes; beer, ale and porter; snuff, cigars and manufactured tobacco. This was the boldest measure proposed by the Secretary, for these duties were from their nature intrinsically obnoxious. Yet no voice was raised against them; and so far from becoming unpopular, Mr. Dallas, by his courage and frankness, acquired a well-earned popularity. No stronger proof can be adduced of the propriety of telling the whole truth and placing an entire confidence in the people.
The only important measure omitted at that time, was an Act of Congress ordering that all the Treasury notes actually due and not paid should be immediately funded at their nominal value; that is to say, that for every one hundred dollars in Treasury notes, the same amount of funded stock should be issued as it was necessary to give for one hundred dollars in gold or silver. It was impossible to obtain a regular loan in time, and on reasonable terms, for the purpose of defraying the war expenses of the first six months of the year 1815. There was an absolute necessity for recurring to Treasury notes for that purpose, and the attention of the Treasury was forcibly directed to that object. But the first and fundamental element of public credit is the faithful and punctual fulfilment of the public engagements; and the payment of the Treasury notes, when becoming due, was as necessary as that of the interest of the funded debt, which never was suspended during the war. As an immediate and considerable issue of Treasury notes was absolutely necessary, it was not sufficient that they might be convertible into a funded stock, which was already much below par, since that would be in fact an issue of depreciated paper. The Act should, therefore, have pledged the public faith, that if the Treasury notes were not discharged in specie when they became due, they should be funded at their nominal value on the same terms as above stated. Mr. Dallas to great energy united pre-eminent talents, he wanted only experience; and I have no doubt that, had the war continued, he would within six months have adopted that course. If I have alluded here to this subject, it is on account of the primary importance, if placed hereafter in a similar difficult position, of adhering rigorously to those principles respecting the legitimate use of Treasury notes and the punctual discharge of every public engagement, which are absolutely necessary for the maintenance of public credit.
Since a direct tax of six millions could be raised thirty years ago, there can be no difficulty in raising one of nine millions at the very beginning of the war: this must be gradually increased, but would be most heavily felt if beyond eighteen millions. Should an equal sum be raised by internal duties, the annual loans wanted after the first year of the war would be lessened in the same proportion. The following estimate may assist in forming a correct opinion on that subject:—
I have inserted only such articles as were heretofore taxed, and have no means of indicating such other as might be added or preferred; nor must I be understood as recommending any specially, or in reference to the rates of duties to be imposed on any one.
It has been very generally asserted that men of property were averse to the war because the losses and burthens which it must occasion fall exclusively upon them; and that poor men were generally in favor of war, because they had nothing to lose.