I enclose some hasty remarks on the message—

The incorrectness of the documents of exports of foreign articles compels me after much labour to abandon the plan on which I had intended to calculate the impost and, as the next best, I will prepare one in the following form which rests on documents on which we may depend, being those of duties & drawbacks actually paid. For each of the ten years ending 31 Decr. 1800, I will take the quantity of each article paying specific duties, & the value of each class of articles, paying distinct duties ad valorem, on which duties were secured; deduct from each respective article & class the quantity & value respectively on which drawbacks have been allowed; and take the difference for the quantity & value of each article consumed in the U. States. On each of those articles, I will calculate the duties at the rate now established by law. The result will give the revenue which would have been collected each year on each article, had the duties been the same as at present; and the total divided by ten, will show the average revenue of the ten years 1791–1800 at the present rate of duties. And, adding to this, 33⅓ p%, the amt. of encrease of population in ten years as given by the census, the result will be assumed as the probable average revenue of the ten succeeding years 1801–1810 or 1802–1809; these being the eight years to which it is eligible that the calculations should apply. This will be but a rough estimate; and yet, I cannot perceive any way from our documents to render it more correct, unless it be to subtract from the total amount assumed as the consumption of the ten years 1791–1800, that part of the importations of 1800 not re-exported in the same year1 which will, at first view, appear to be above the roughly estimated consumption of that year. The great defect of that mode arises from its including the duties on exported articles which, although not entitled to drawback, made no part of our consumption, and these might have been deducted, had the returns of actual foreign exports had2 been correct & properly distinguished. A deduction at random might be made but then it would be as well to guess at the whole. Does any idea strike you which might lead to a better mode of making the calculation? Unless we have something precise, we never can with safety recommend a repeal of existing taxes.

Although I could not solve it, I thought that the problem of the annuity necessary to redeem the debt might be solved, because, although there were two unknown data vizt. the annuity & the time of redemption of one of the classes of debt (the time of the other class being 8–t) yet two equations might be formed, one term of each of which being the annuity, left an equation, with only the time, not given. At all events the approximation you have assumed is not sufficiently correct; for the annuity you fixed would, if I am not mistaken leave about one million & half unpaid at the end of the eight years. But the problem is, in fact, more complex than I had stated it, on account of the varieties & peculiar properties of the several kinds of debt, as you will judge by the enclosed statement.

If we cannot with the probable amount of impost & sale of lands pay the debt at the rate proposed & support the establishments on the proposed plans, one of three things must be done; either to continue the internal taxes—or to reduce the expenditure still more—or to discharge the debt with less rapidity. The last resource, to me, is the most objectionable, not only because I am firmly of opinion that, if the present administration & Congress do not take the most effective measures for that object, the debt will be entailed on us & the ensuing generations, together with all the systems which support it & which it supports; but also because any sinking fund operating in an increased ratio as it progresses, a very small deduction from an appropriation for that object would make a considerable difference in the ultimate term of redemption, which, provided we can, in some shape, manage the 3 p% without redeeming them at their nominal value, I think may be fixed at 14 or 15 years. On the other hand, if this administration shall not reduce taxes, they never will be permanently reduced; to strike at the root of the evil, & avert3 the danger of en-creasing taxes, encroaching government, temptations to offensive wars &a., nothing can be more effectual than a repeal of all internal taxes; but let them all go, & not one remain on which sister taxes may be hereafter engrafted. I agree most fully with you that pretended tax-preparations, treasury-preparations, & army preparations against contingent wars tend only to encourage wars; if the U. States shall unavoidably be drawn into a war, the people will submit to any necessary tax, & the system of internal taxation, which, then, shall be thought best adapted to the then situation of the country may be created, instead of being engrafted on the old or present plan; if there shall be no real necessity for them, their abolition by this administration will most powerfully deter any other from reviving them. A repeal now will attach as much unpopularity to them as the late direct tax has done to that mode of taxation. On those grounds, can I ask what, in your opinion, is the minimum of necessary4 naval & foreign intercourse expenses, including in these last all those which are under the controul of the department of State?

You will perceive in one of the notes on the message that in giving general results, no provision appears for the British treaty vizt. for the St. 600,000 proposed to be paid in lieu of the 6th. Art.—This is a temporary demand which may be met by the four following temporary resources—1st the excess of specie in Treasury beyond the necessary sum to be kept there—2d the sale of the Bank shares belonging to the U. States—3d the surplus revenue arising from internal taxes beyond the expense, in case those int. taxes are [continued?], and if practicable to discontinue them, one nett year of their proceeds which is always due on them & will be due on the day when they may cease—4th the balance of the direct tax payable5 after the present year.

You will also see that I lay less stress on savings on the civil list than you do: Some may be made, but the total amount cannot be great. The new judiciary, the Commissrs. of loans, the mint, the accountants of the navy & war departments seem to be the principal if not only objects of reforms. Of the clerks I cannot yet say much; those of the Comptroller & Auditor are less numerous & paid less in proportion than those of the Register & two accountants. Transcribing & common ones are easily obtained; good book-keepers are also every where to be found; but it is difficult to obtain faithful examining clerks on whose correctness & fidelity a just settlement of all the accounts depends; & still more difficult to find men of talents. My best clerk next to the principal & who had 1200 dollars has left me to take 1000 in Philadelphia. Under the present circumstances of this place we must calculate on paying higher all the inferior officers principally clerks, than in Philad. Coming all new in the administn., the heads of departt. must obtain a perfect knowledge of all the details before they can venture on a reform. The number of independent offices attached to the Treasury renders the task still more arduous for me. I can assure you that it will take me 12 months before I can thoroughly understand every detail of all those several offices. Current business & the more general & important duties of the office, do not permit to learn the lesser details but incidentally & by degrees. Until I know them all, I dare not touch the machine.

The most important reform I can suggest is that of specific appropriations, to which it would be desirable to add, by abolishing the accountants an immediate payment from the Treasury to the individuals who are to apply the money & an immediate accounting of those individuals to the Treasury; in short to place the War & Navy departments in relation to the expenditure of money6 on the same footing on which, at Mr Madison’s request, that of State has been placed. Enclosed is a short paper containing the principles I would propose, in which, you will perceive that the discretionary powers of those departments are intended to be checked by legal provisions & not by transferring any discretion to another department. What is called “illustration” in that paper is not correct.

The disappointment in the export documents will necessarily delay some days the proposed result of import; but I think it will be about Drs. 9,250,000.—The importance of correctness there renders it more eligible to wait a week longer for a more accurate estimate than to proceed now with what we have obtained—We have yet 3 weeks till the meeting of Congress—

With sincere respect Your most obedt. Servt.