INCOME AND EXPENDITURE.
Mr. Gallatin hoped that the motion would not prevail. He believed he was the only person who had said, that he was not desirous that the bill laying a direct tax should pass this session. For it was true, that, although he was a strong advocate for a direct tax—although he thought a sufficient permanent revenue could not be drawn from any other source, yet he did not wish the law to pass during the present session; and the reason was, because he had not a sufficient reliance upon his own opinion, to wish a subject of this sort to come into being against the opinion of so many members of this House as appeared to be opposed to it. When the United States shall think it necessary to go into the measure, he trusted it would pass with great unanimity. At present, he doubted whether a majority of the country was not against the measure, especially when he not only saw so great a division in that House, but apparently a local division, as he believed only four members East of Hudson's River, and but five South of Virginia had voted for the measure, by which it appeared to be a mode desired only by the Middle States. Until, therefore, gentlemen from those parts had returned home and consulted their constituents upon the subject; until he knew that the law could be carried into effect with more unanimity than at this time appeared, he did not wish to press it. He was willing, therefore, to take all the blame which was imputable to this circumstance upon himself. He never wished the powers of Congress to be exercised in a way which should not meet with pretty general concurrence. Yet, had he thought the situation of the United States had been such, that additional revenue was absolutely necessary to support the public credit, and it could not have been conveniently raised from any other source, every other consideration would have given way to that necessity. But he did not think that any thing which had been said by the gentleman from South Carolina showed that there would be any deficiency in the revenue for the present, which would require additional taxes to supply it.
He would just observe, that the great argument in favor of direct taxes—an argument which had almost wrought conviction upon the mind of the gentleman from South Carolina himself—was the uncertainty of a revenue derived from commerce; and yet, from this circumstance, the friends of indirect taxes wish to extend that plan to the utmost, and raise every thing from it. He should have drawn different conclusions; and from that uncertainty, he should have wished never to have gone beyond those bounds which they knew were safe.
As to the receipts of 1797, Mr. G. said, we had well ascertained them, because they arose from the importations of 1796, which they knew amounted to 6,200,000 dollars, and which sum, with the internal duties, would be fully adequate to the expenses of the Government for this year. Yet some gentlemen thought the calculation too close, and therefore the additional duties before them had been consented to, which he believed every one must acknowledge would be fully equal to any deficiency that could possibly arise. The arguments of the gentleman from South Carolina applied to the year 1798. He said we did not know what might be the amount of the importations of the present year; that it might be less than last year, and therefore, that revenue ought to be provided to supply the deficiency, if there should be any. The arguments would be good, if the gentleman's data were true; but he had forgotten that the expenses of 1798 would be less than those of the present year by 700,000 dollars, including not only the current expenses, but the instalment of the Dutch debts, which in that year would only be 100,000 dollars. The instalment this year is 400,000, so that in this item there will be a difference of 240,000 dollars; in the next place, the 280,000 dollars which this year has been agreed to be paid to the Dey and Regency of Algiers, will not occur again; and also, the 180,000 dollars appropriated for finishing the frigate, would not be to provide another year. These three items made the 700,000 dollars which he had mentioned. In addition he would add, that this year there had been a charge of 200,000 dollars for the defence of the frontier in 1795; but perhaps something might be wanted in that quarter another year, and therefore he would pass over that sum. But he thought there could be no danger of a want of revenue in the year 1798.
Mr. G. said, he would not pretend to say that it would not be desirable to increase the revenue, in order that they might pay a part of such instalments of the foreign debt as would become due after the year 1801. Certainly the sooner our debt could be paid, the better; but he meant only to show that there was no necessity for increasing the revenue for 1798. If it were necessary to raise additional revenue, it would be for two principal objects, the payment of the Dutch debt and the eight per cent. deferred stock; but as these did not become due till the year 1801, they were not under the necessity of providing the means for it at present.
During the next session, Mr. G. said, they should have time to compare the two systems of taxes together, and to discover which offered the best and most permanent sources of revenue. For the reasons he had given, he should be opposed to the motion.
Mr. W. Smith said, he should not adduce many arguments to show the propriety of advancing the duty upon this article any more than that upon any other; but he wished to bring before the committee a true statement of the receipts and expenditures of the United States, in order to show what sum of money would probably be wanted to answer the demands of the United States. As he differed considerably from the gentleman from Pennsylvania as to our real wants, he considered it as his duty to lay this statement before the committee. He had investigated the subject with as much accuracy as possible. He had attended to the documents which had been laid before them, to the laws which would probably pass this session, and to the probable increase of revenue. The result of this examination was, that there would be a deficiency of about a million of dollars. To what the additional imposts already agreed to would amount, he could not say, but he believed they would make 200,000 dollars, which would leave a deficiency of 800,000 dollars. He made the following statement:
Expenses of 1797.
| Civil list, | $634,322 |
| Military and Naval Establishment and pensions, | 1,284,532 |
| Deficiency of 1796, | 201,000 |
| Algerine appropriation, | 376,500 |
| Interest of Domestic Debt, | 3,471,972 |
| Interest on Dutch debt, | 614,241 |
| Instalments do do. 1797, | 400,000 |
| Premium remitt. &c. | 50,000 |
| Appropriations for frigate, | 171,000 |
| ———— | |
| 7,213,567 | |
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