REPORT, &c.

The Committee who were appointed on the twentieth of March, to examine
the accounts of the United States, relating to the public debt, and to re-
port the amount respectively incurred and extinguished, and generally
such facts as relate to the increase or diminution of the fame, since the
establishment of the government of the United States under the prefent
constitution,

REPORT—

T
HAT for the purpose of obtaining every statement from the Treasury,
which could elucidate the subject of enquiry, they addrefled a letter to the
Secretary of that department, on the twenty-fourth of March, a copy of
which is subjoined to this report, and on the twenty-ninth of April they re-
ceived his anfwer, transmitting fundry f statements, numbered from 1 to 9 in-
clusive, and exhibiting in the moft clear and satisfactory manner, the moft
important of the Treasury operations in relation to the debt, from the com-
mencement of the prefent government. Thefe f t statements, together with
three letters from the Secretary on this fubje ct, are now submitted to the
Houfe; and although it is certainly poffible that fome trivial errors may have
taken place in the details which thefe documents contain, yet the Committee
are perfectly confident, that the general refults which they produce muft be
correct.

The f t statements number 1 and 2, contain an account of the receipt and
expenditure of all public money, from the commencement of the govern-
ment, and whilft they f how the application of the revenue to the debt, they
will prefent, at the fame time, in one view, every expenfe with which the
Treasury has been charged, and enable the Legifture, with more accuracy,
to decide how far thofe obje<;ts, or the amount of expenfe in particular cafes,
may be diminished.

The order of the Houfe having particularly directed the attention of the
Committee to the increafe or diminution of debt, they have thought it their
duty to bring into view the amount of debt with which the prefent govern-
ment commenced its operations, and to contraft the fame with the balance of
debt on the firſt of January in the prefent year. In difcharging this duty, it
will become neceſſary to explain the principles on which theſe ſt atements reſt;
which the Committee will do in as concife a manner as poffible. But before
they enter upon this detail, they cannot forbear to exprefs the ſatifaſſion
which they feel in declaring, that the documents which have been obtained
from the Treasury, will, in their opinion, fully demonſtrate the precifion
and ability with which the bufineſs of that department has been conducſted,
and that by the ſiſal operations of the government, the public debt has
been diminifhed.

In afcertaining the amount of the old debt, two different principles have
been taken by thofe who have made their calculations on this ſubje ct. The
firſt has been to include only the intereſt upon the debt to the cloſe of the
year 1789, as the neareſt convenient period to the day when the government
commenced its operations, and after deducting from the aggregate of debt

7

The propriety of deducing these bonds together with the other items, from the debt, has appeared to the committee so apparent, that they have found some difficulty in rendering a principle more intelligible, which to them appears felf evident,

The object of every statement of this nature muſt be to ascertain the balance of debt; and to do this, it is apparent that the debts and credits of the government muſt be drawn into the account. The principle, which applies to the accounts of an individual, applies in the fame manner to the accounts of a nation: the amount of debt can in neither case depend on the amount of the accounts but upon the balance which results from a comparison of debt and credit—that theſe bonds are the property of the government, has not been controverted, and if there is any meaning in terms, they contain perſonal engagements for money, and muſt be credited by individuals for money loaned, nor would the mode of collection be in the leaſt varied; and whilſt the effect is precifely the fame with that of all credits, it remains for thofe who place them on different principles, to explain the grounds of diffiſtinction.

That they have been executed for duties is true, but the credit which is thereby given to the merchant is entirely for his accommodation; and ſuch are the exprefs provisions of the law, which requires that the duties on goods ſhall be paid or ſecured before they are landed, at the option of the importer: the duties are to be paid or ſecured, not upon the conſumption, but upon the importation, and the bonds which have at any given period been taken for duties, and which remain uncollected, are to be considered as ſecurities for the revenue of the preceding year; the government has nothing to do with the goods, on which duties have been ſecured after the bonds are taken; whether they are confumed or deſtroyed neither increaſes or diminifhes the obligation of the merchant to pay the contents of his bond: a further circumſtance may be adverted to, which, if any thing can render this point more clear and certain, may perhaps produce that effect—it is the consideration, that a confiderable amount of theſe bonds have already been pledged for the payment of a part of the debt. The temporary loans which appear in the preceding ſtatements, have all been obtained in anticipation of the money arifing from the bonds; and it would be a ſingular cafe indeed, if the pledge which is confeffedly of greater value than the debt, and from the proceeds of which the debt muſt in fact be diſcharged, is to be totally excluded from a general account of debts and credits.

In reviewing the progrefs and preſent ſituation of the debt, the committee have been led to confider the caufes which have hitherto retarded its extinguifhment. The deranged ſtate or rather total want of funds and revenue at the commencement of the government, has been already noticed, and it cannot be neceſſary to add that the delays which neceſſarily attend all financial operations, at their outfit, muſt have prevented the government for a confiderable time from extending the revenue fo far as convenience and policy might afterwards require; but the committee deem it important to add that the extraordinary expenſe which has arifen within a few years, has ſwallowed up large fums of the public wealth, and diverted the application of thofe moſties which might otherwife have gone to the extinguifhment of debt, to objects connected with the honour, and in ſome cafes with the immediate exiſtence of the government.

In this clafs of expenſe will be included a large ſum occasioned by the Indian war—one million two hundred and fifty thouſand dollars, expended in quelling two inſurrections in the ſtate of Pennſylvania—more than one million

8

and an half expended in our transactions with Algiers and the other Mediterranean powers, together with a much larger expence occasioned by the unprovoked aggreffions of France upon this country. Had it been possible, feaibly to have applied those various fums to the purchase of debt, it is easy to conceive, how rapidly the fame might have been extinguished—The Committee have likewise noticed, the large fums which have been neceffarily expended in the erection of light-houfes, repairing fortifications, in purchases for replenifhing our military and naval arfenals, and in the building, purchase and equipment of more than forty fail of ſhips and armed vessels, together with a confiderable loan of money to the Commiflioners of the city of Washington. The money expended on these objects, it is well known, arife to a very large amount, and the property thus acquired by the government, and which is now on hand, cannot be estimated, on the moſt moderate calculations, at a ſum leſs than four millions of dollars. The value of this property might be confidered as compofing another item in the credit of the general account of debt, but the Committee have not thought it neceffary to include it, and have noticed it particularly at this time, for the purpose of exhibiting a more general view of the extraordinary expence incurred by the government, and for the purpofe of prefenting all that information, in relation to the debt, which will enable the Houſe accurately to appreciate the great and increaſing ſources of the country: and on this point the Committee cannot forbear to remark, that the progreſs of the government, in its financial operations, muſt afford the moſt flattering prelages of its future ſucces, if the fame ſyftem is purfued which has hitherto proved fo ſuccesſul. It cannot certainly be unworthy of remark, that ten years have not at this time elapsed, ſince the government fairly commenced its operations; that during that period it has been neceſſary to liquidate, to fund and to provide for a large capital of floating debt which had grown out of the diforders of the confederation; that during the fame ſhort period, the government has been compelled to contend with one expenſive war on the frontier, with two inſurrections in the centre of our own country, and with depredation and hoſtility from the nations of Europe; that theſe embarraſments have nevertheleſs been faced by the government; moſt of the difficulties have been furmounted; the debt has been liquidated and diminished, and the nation has ſtill continued to increafe in wealth and population beyond all former example; and although the conduct in which we are now engaged, may, for a ſhort period, retard the further extinguifhment of debt, or perhaps produce a ſmall addition to that which already exiſts, yet it cannot be doubted, that which we maintain order at home, no exterior circumſtances can exhaſt or greatly diminifh the increaſing resources of the nation.

9

Philadelphia, March 24th, 1800.

SIR,

I HAVE the honor to inclose the copy of a resolution which passed the House of Representatives on the 20th instant.

The Committee who have been appointed, in pursuance of this resolution, have directed me to request from you, such a statement of the public accounts relating to the debt, as will enable them, with the greatest facility and accuracy, to make a report on this subject.

The principal object contemplated is to ascertain, with precision, how far the public debt has been increased or diminished since the establishment of the present government.

With a view to this object it will naturally occur that two general accounts are necessary.

First, An account exhibiting the amount of debt incurred under the constitution, and with which the present government has been charged by the constitution.

Second, An account of the existing debt at the latest possible period, which it is prefumed must be on the first day of January 1800.

In respect to the first of these accounts, it is requested that the whole amount of the old debt, of every description, may be given, arranged under distinct and proper heads, as the fame has been funded, affixed, liquidated or otherwise ascertained, by acts of the government or settlement at the Treasury. It is however desired, that the account may be first stated, that the interest which accumulated after the commencement of the present government, and which has in any shape been converted into capital, may distinctly appear. The interest herein particularly alluded to, has accrued upon the foreign debt, upon loan-office certificates, together with other evidences of debt prior to the first of January 1791; on the affixed debt, prior to the first of January 1792, distinguishing however the interest which accumulated in the last year, and on the debt due to certain creditor states, to the close of the year 1794.

In respect to the account for exhibiting a view of the debt on the first of January 1800, it will of course contain a complete statement of the old and new debt, together with the purchase and reimbursement of so much of the fame as has been already discharged; but it is with the Committee, that the payments in specie, which have been made under authority of direct grants from the Legislature, may be particularly stated, and the aggregate brought into one view.

The Committee likewise request an account of payments for military pensions, cash in the Treasury, cash in the hands of Collectors, and an estimate of the current bonds at the Custom-houses, deducting debentures and estimated drawbacks.

An estimate of the value of public property acquired by the present government, is likewise desired; including the capital employed in trading-houses, light-houses and other public buildings, public ships, arfenals, with their contents and fortifications.

The amount of extraordinary expense incurred by the government, in consequence of events which it is hoped will not be repeated, is also requested. Under this head will be included the expense of treaties with the Mediterranean powers; the two inflections in Pennsylvania, and the war with the Indian tribes, together with the extraordinary expense incurred in the mi-

[3]