[To the Speaker of the House of Representatives]

In obedience to the Order of the House of Representatives, of the second Instant,2

The Secretary of the Treasury Respectfully Reports,

That in his opinion, the funds, in the first instance requisite towards the payment of interest on the debits of the individual States, according to the modifications proposed by him in his report of the ninth of January past, may be obtained from the following objects:

An increase of the general product of the duties on goods imported, by abolishing the discount of ten per Cent allowed by the fifth Section of the Act for laying a duty on goods, wares and merchandizes imported into the United States,3 in respect to goods imported in American bottoms, and adding ten per Cent to the rates specified, in respect to goods imported in foreign bottoms, with certain exceptions and qualifications: This change, without impairing the commercial policy of the regulation, or making an inconvenient addition to the general rates of the duties, will occasion an augmentation of the revenue little short of two hundred thousand dollars.

An additional duty on imported Sugars. Sugars are an object of general consumption, and yet constitute a small proportion of the expense of families. A moderate addition to the present rates would not be felt. From the bulkiness of the article, such an addition may be made with due regard to the safety of Collection. The quality of brown and other inferior kinds of Sugar imported, appears to exceed twenty two millions of pounds, which, at a half cent per pound, would produce one hundred and ten thousand dollars. Proportional impositions on foreign refined sugar, and proper drawbacks on exportation, ought of course to indemnify the manufacturers of this article among ourselves.

Molasses, being in some of the States a substitute for Sugar, a small addition to the duty on that article ought to accompany an increase of the duty on Sugar. This, however, ought to be regulated with proper attention to the circumstance, that the same article will contribute largely in the shape of distilled spirits. Half a Cent per Gallon on Molasses would yield an annual sum of thirty thousand dollars. Our distillers of Spirits, from this material, may be compensated by a proportional extension of the duty on imported spirits.

Snuff, and other manufactured tobacco, made within the United States: Ten Cents per pound on the Snuff, and six Cents on other kinds of manufactured tobacco, would be likely to produce annually, from ninety to one hundred thousand dollars. From as good evidence as the nature of the case will admit, the quantity of these articles, manufactured in the United States, may be computed to exceed a million and a half of pounds. The imposition of this duty would require an increase of the duty on importation, and a drawback on exportation, in favor of the manufacture. This, being an absolute superfluity, is the fairest object of revenue that can be imagined, and may be so regulated, as, in no degree, to injure either the growth or manufacture of the Commodity.

Pepper, Pimento, Spices in general, and various other kinds of groceries. These articles will bear such additional rates, as may be estimated to yield a sum of not less than thirty thousand dollars. Computing, according to the entries in the State of New York, in 1788, the yearly quantity of pepper, and pimento brought into the United States, is not less than eight hundred thousand pounds, of which about a third is pepper. Six Cents on pepper, and four cents on pimento (with drawbacks on exportation) may, without inconvenience be laid.

Salt. An additional duty of six cents per bushel, may, in the judgment of the Secretary, with propriety be laid on this Article. It is one of those objects, which, being consumed by all, will be most productive, and yet, from the smallness of the quantity in which it is consumed by any, and of the price, will be least burthensome, if confined within reasonable limits. If a government does not avail itself, to a proper extent, of resources like these, it must of necessity overcharge others, and particularly, give greater scope to direct taxation. The quantity of this article annually imported, being at least, a million and a half of bushels, the annual product of an additional duty of six Cents may be computed at ninety thousand dollars.

Carriages, such as Coaches, Chariots &c. These articles may certainly be the subject of a considerable duty. How productive it would be, is not easy to be estimated. But it is imagined, that it would yield not less than fifty thousand dollars per annum.

Licences to practisers of the law. Certain law-writings, and various kinds of writings. The extent of this resource can only be determined upon trial; but the Secretary feels a strong assurance, that there may be drawn from it, yearly, not less than two hundred thousand dollars. The system for collecting a duty of this kind, would embrace playing-cards, and some other objects of luxury, which do not fall under the above descriptions, but which are estimated in the supposed product.

Sales at Auction (exclusive of houses or lands, or of those made in consequence of legal process, or of acknowledged insolvency). One per Cent on such Sales would, probably, produce a yearly sum of forty or fifty thousand dollars.

Wines and Spirits sold at retail. These articles are, in the opinion of the Secretary, capable of being rendered far more productive, than has been generally contemplated; and they are certainly, among the most unexceptionable objects of Revenue. It is presumed, that two hundred thousand dollars per annum may, with facility, be collected from the Retail vent of these Articles.

The foregoing objects are those, which appear to the Secretary, preferable towards a provision for the debts of the individual States. There are others, which have occurred to him as supplementary, in case the experiment should discover a deficiency in the expected product; but which, he conceives it unnecessary now to detail. He will only add, that he entertains no doubt of it’s being practicable to accomplish the end, on the principles of his former report, without the necessity of taxing, either houses or lands, or the stock or the produce of farms.

The Secretary, conceiving the design of the House to have been to obtain from him a general delineation only of the funds, competent in his judgment to the provision in question, has refrained from those details, which would be indispensible, if that provision were immediately to be made; and to have furnished which, would have occasioned greater delay, than would, probably, have suited with the present state of the business, or the Convenience of the House. He, with great deference, trusts, that what is now offered will be deemed a satisfactory compliance with their Order.

The Statement required respecting the product of the duties on imports and tonnage to the last of December, as far as returns have come to hand, is contained in the Schedule herewith.

All which is humbly submitted