Mr. S. Smith did not like the amendment; but he should vote for it, because, if he could not get all he wished, he would get all he could. If the blank was to be filled with two or three years, (as had been intimated,) it would not go far enough to induce moneyed men to rely upon it as a permanent security.
There seemed to be no difference of opinion as to the propriety of laying a direct tax; it only seemed to be as to the length of time which it ought to be laid. He agreed with those gentlemen who assert that money cannot be borrowed, except a permanent fund be provided. But gentlemen say, where are your expenses? Certain expenses have been agreed to, which are proposed to be met by a direct tax of two millions; but could it be supposed that the proceeds of this tax could be brought into the Treasury in less than eighteen months? They could not, and something must be done in the mean time to raise the money already voted, whether any war takes place or not. How was this to be done? By loans alone. But what inducement will there be to moneyed men to lend money, except a permanent revenue be made the security? You hold out the credit of the United States, which has not heretofore been injured. This is true. But heretofore we have not been engaged in war; we have had nothing to impede our revenue. But if a war takes place, it is possible our revenue may suffer very materially; and Congress are about to provide a fund which, in the opinion of some, will leave no permanency, and in the opinion of others, very little. And would it not require a great degree of patriotism in gentlemen to lend twenty shillings for twenty shillings, when they can go into the market and purchase them with sixteen. The difference of opinion on this subject, he was convinced, arose from the different pursuits of the members of that House. Certain gentlemen believed moneyed men would advance money without a permanent tax as a security. He believed the contrary; for, however great a confidence they may have in the honor of future Congresses, they would wish to see this Congress do something for their security. He feared gentlemen were not in earnest when they spoke of defending the country. We have men, said he, but we want money. He did not agree with the gentleman from North Carolina (Mr. Williams) that slaves fought for money, and freemen only for liberty. If he commanded a regiment of militia, he believed they would expect to be paid, and he could not believe he would term them slaves. Money must be had.
The gentleman from Pennsylvania was afraid of making the revenue permanent, because, as our revenue increased, it had been usual, not to repeal our revenue laws, but to increase our expenses. Whence did he collect this information? Not from the documents on the table; for there he would find that there was an unexpended surplus of one million nine hundred thousand dollars, which were in 1797 applied by the Commissioners of the Sinking Fund to the reduction of the public debt. We have, said he, gone on decreasing our expenses. It was true, that our dispute with Algiers, and a war with the Indians, had cost a great deal of money; but when the war with the latter was at an end our expenses were decreased. And now an income of expense is asked for to repel threatened danger, and gentlemen have voted measures of defence; but now they come to touch the expense, they flinch. Men may moralize and talk about defence as much as they please, it will avail nothing without money.
Mr. Varnum hoped the motion under consideration would be negatived. The gentleman from Maryland (Mr. S. Smith) gave two reasons on Saturday against striking out the word annually. One was, that it was necessary the tax should have some permanency, in order that money might be borrowed upon it; and another, that it might be a substitute for indirect taxes. That gentleman allowed, and he perfectly agreed with him in opinion, that in case of war, the defalcation in our revenue, he did not suppose, would be large, and that in our present situation he had no idea of a defalcation. If, then, a defalcation of our revenue was not to be expected, he thought he should be able to make it appear that the proposed tax is not necessary at all; and, of course, that it will not be right to pass it for more than one year. But the gentleman from Maryland says the people ought to be relieved from indirect taxes, because, for every 12-1/2 per cent. duty, the consumer pays 27-1/2. Does that gentleman wish, then, that the merchant should be deprived of a profit of 15 per cent. on the duties which he now pays? If so, this might be very well effected, without doing away the duty, and substituting a land tax in its place, by the merchants lowering the price of their goods 15 per cent.
But the gentleman added another reason for passing the law for a number of years, viz: that this tax might be at any time repealed. But, although this House might consent to a repeal of this tax, it was by no means certain that the other House would consent to its repeal. Indeed, it was his opinion, that if this tax was established as a permanent tax, that the people of this country would not be relieved from it for many years. Many objects, he had no doubt, would be found out by gentlemen, ever fruitful in this respect, upon which to expend any surplus which might arise from this tax.
The gentleman from South Carolina, on Saturday, brought into view our situation with respect to France, and our liableness to an attack from that nation. He alluded to the conversation which took place between our Envoys and X, Y, and Z, and thence inferred that it was probable that this country would be attacked by France. He could not say that all the propositions made by these unauthorized persons were not from the Directory; but there was no evidence of this, and therefore he could not believe it, especially as the agents themselves declared they were not. He thought, therefore, if we wished to preserve peace with France, that we ought not to be too forward in believing all which was said by X, Y, and Z, was authorized by the French Government. He hoped it would prove to be the contrary, and that when the Directory shall discover what has been done, they will punish these persons for their conduct.
The question was put and negatived—46 to 35.
Mr. D. Foster then renewed his motion to strike out the word "annually," which was carried, there being sixty votes for it.
The question on the amendment providing for the taking of a new census, was put and carried, there being 57 votes for it.
Mr. Read moved an amendment, which went to strike out the provision which proposes that the tax should be laid by a uniform rule through all the States, with the view of inserting in its place the following words: