To Thomas Jefferson from Albert Gallatin, [13 December 1801]
From Albert Gallatin
Sunday morning [13 Dec. 1801]
Dear Sir
I send the statements which are to accompany the report, (one excepted which is not yet transcribed, but a rough & incorrect draught of which I enclose in this letter)
The object of the report is to show the probable revenues & expenditures on an average of eight years 1802–1809
The permanent revenues are stated to be impost, int. revenues, lands, & postage, (besides incidental vizt fines &a.)
| Impost | As the duties on importation have varied from year to year, no deduction can be drawn of the probable amount of impost, from A view only of the annual receipts in the Treasury. It is therefore necessary to recur to the actual annual consumption of imported articles & to calculate at the present rate of duties the revenue which would have accrued on that consumption, in any given year the result of which is wanted. For that purpose the tables A to H. have been compiled, which show both the quantities paying duty, and the average rate of duty paid by those articles (ad valorem, spirits, wines, & teas) which according to their quality, pay different duties. The Statement K relates to the proportion of american & foreign tonnage employed in foreign trade, from which has been calculated the extra-duty paid by foreign vessels, by supposing that—As the total amount of tonnage employed in foreign trade, is, to the amount of foreign tonnage employed in do. So is the total amount of goods imported to the amount imported in foreign vessels & paying the extra duty. | |||||||||||||||
| The Statement I is intended to show the amount of tonnage duties, & to enable to calculate the expences of collection and the duties retained on drawbacks. | ||||||||||||||||
| From those Statements is formed the table L showing the annual impost revenue of 1790–1792 & 1793–1798 respectively; calculated, not at the then existing, but at the present rate of duties; and to which as connected with the report, I request your attention as the preceding documents are only the materials out of which this is formed. It gives a result of 6,160,000 dollars for that revenue in 1790–1792, to which adding 50 per cent, for increase of population from that period to that of 1802–1809, (the revenue of which is the required object) gives 9,240,000 dollars for what I call the Minimum of the average revenue of 1802–1809—The same table gives a result of 8,350,000 dollars for the revenue of 1793–1798, to which, adding 30 & ½ per cent for increase of population, gives 10,900,000 for what I call the maximum—and instead of assuming the medium, I mean to assume only 9,500,000 | ||||||||||||||||
| Internal— | Statement M requires no explanation—So far I have written & left yesterday with you the rought draught of report. | |||||||||||||||
| Lands— | The documents to be communicated are 1st estimate of quantity of lands for sale vizt about nine millions of acres as pr. Statement N (with which is connected a general map of our lands which is to accompany the report & which is also sent to you by the bearer) and 2d. Statement O of sales which have already taken place; from which in the report, O will be deduced a probable revenue of 350,000 dollars | |||||||||||||||
| Postage & incidental, (exclusively of dividends on Bank Stock) will be estimated at 50,000 dollars. | ||||||||||||||||
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The estimate of appropriation is 3,500,000 dollars; but on account of several temporary objects therein included the permanent expence will be stated at something less.
The residue applicable to payment of debt would be 7 millions. But as the demands for Dutch debt exceed that sum, it will be stated as expedient that a sum of 7,300,000 should be appropriated annually and a table, being the rough one enclosed will show the effect produced on the debt in eight years by that payment. (The statements P & R in relation to the actual state of public debt, you will easily understand. That P. shows that we have paid in 1801—Dolrs. 2,275,317.30/100 of the principal of the debt).
The report neither will, nor can, go any further. Our friends must draw the result1 which is this—
| Revenue, (including internal) | 10,500,000 | ||
| deduct internal | 600,000 | ||
| recommended | 9,900,000 | ||
| Expences other than debt | 3,500,000 | ||
| reductions recommended | 1,000,000 | ||
| Expences as requested | 2,500,000 | ||
| Annuity for public debt as requested | 7,300,000 | ||
| 9,800,000 | |||
leaving 100,000 dollars surplus—All we want, therefore is 1st—reductions to the amt. of one million—2d—repeal of internal taxes—
The Stamps, Direct tax, arrearages of internal revenue, proceeds of bank shares & excess of specie over what is wanted in Treasury, are intended to meet the demands under British & French treaty.
Please to send back the enclosed, with the other papers—Any time to day will do—.
Respectfully Your obedt. Servt
Albert Gall[atin]
RC (DLC); partially dated; torn at seal; addressed: “The President of the United States”; endorsed by TJ as received from the Treasury Department on 13 Dec. and so recorded in SJL with notation “Finance”; also endorsed by TJ: “redemption of debt.” Enclosures: Statements A through I, K through P, R, and S, subsequently attached to Gallatin’s report of 18 Dec. (MSS in RG 233, RCSH, 7th Cong., 1st sess.; in the hands of different clerks, with emendations by Gallatin on several documents, including statement M, where he noted: “d. The last quarter from Massachussets an estimate”; statements A through I, K, and P signed by Joseph Nourse, register of the Treasury, on 12 Dec., statements O and R signed by Nourse on 11 Dec. 1801, with each statement endorsed by a House clerk). Printed in , Finance, 1:707–17.
Accompany the report: Gallatin had evidently sent a partial draft of his report on the state of finances to TJ on 12 Dec. Gallatin signed the completed report on 18 Dec., and transmitted it with letters of the same date to Speaker of the House Nathaniel Macon and to Abraham Baldwin, president pro tempore of the Senate. The report and statements were laid before both branches of Congress on 21 Dec. (, 6:208–9; , 3:163; , 4:21). The House of Representatives had the documents published as Letter From the Secretary of the Treasury, Accompanying a Report, and Sundry Statements Prepared in Pursuance of the Act Supplementary to the Act, Intituled “An Act to Establish the Treasury Department” (see , No. 1496). The publication, however, did not include the accompanying tables. For both the report and statements, see , Finance, 1:701–17.
In table 1 and in Gallatin’s report, the revenue for 1790 to 1792 is stated as $6,163,000, a discrepancy of $3,000 from what he wrote above. After calculating for the increase of population, Gallatin gave $9,250,000 as the minimum of the average revenue between 1802 and 1809. He kept his medium figure of projected revenue from imposts at $9,500,000 (Letter from the Secretary of the Treasury, Accompanying a Report, 6–7; , Finance, 1:702, 713). Statement M included the income from internal revenues for 1800. Gallatin transmitted a more detailed account of these revenues when he submitted the statements for 1800 prepared by William Miller, commissioner of the revenue, to the House of Representatives on 21 Dec. (same, 1:718–23; , 4:22).
Gallatin described the general map of the nine million acres of public lands as “including the Virginia reservation, and the grants to the Ohio company, and to John C. Symmes, which has been compiled from the survey of the Indian boundary line, and from the draughts returned to the Treasury Department.” Considering the sale of public lands as a valuable source of revenue, Gallatin encouraged Congress “to provide against the progress of intrusion on the public lands, and especially to devise some efficient and prompt mode of giving quiet possession to every person purchasing under the law.” In his 18 Dec. report to Congress, Gallatin increased the estimated income from the sale of public lands to an average of $400,000, instead of the $350,000 noted above. In his comments to TJ in November, Gallatin had estimated proceeds from land sales at $250,000. He also increased the estimated figure for internal taxes to $650,000 in the total permanent revenue. The grand total, therefore, increased by $100,000 to $10,600,000 (, Finance, 1:703; Vol. 35:632).
Rough one enclosed: Table S, entitled “Statement exhibiting the amount of the principal of the Public Debt, which may be discharged in the eight years, 1802–1809, by applying an annual sum of 7,300,000 dollars to the payment of the principal and interest.” Being a projection, the statement was not signed by Nourse. We have paid: Statement P actually indicated that the public debt had been reduced from $80,161,207.60 on 1 Jan. 1801 to $77,881,890.29 on 1 Jan. 1802, for a total of $2,279,317.31. Statement R consisted of a table of the annual payment of principal and interest to Holland. With the payment of $7,300,000 annually for eight years, to 1 Jan. 1810, Gallatin reported, the public debt would be reduced to $45,592,739.59 and all of the Dutch debt would be paid (, Finance, 1:704–5, 716–17).
1. Word interlined in place of “consequence.”