Motion on Establishment of Permanent Funds1
[Philadelphia] March 21, 1783
Whereas Congress did on the 12 day of February last resolve—“that it is the opinion of Congress that the establishment of permanent and adequate funds on taxes or duties which shall operate generally and on the whole in just proportions, throughout the United States are indispensably necessary towards doing complete justice to the public creditors for restoring public credit and for providing for the future exigencies of the war.”
And Whereas it is the duty of Congress on whose faith the public debts have been contracted for the common safety to make every effort in their power for the effectual attainment of objects so essential to the honor and welfare of the United States, relying on the wisdom and justice of their constituents for a compliance with their recommendations.2
Therefore Resolved, that it be earnestly recommended to the several states, without delay to pass laws for the establishment of the following funds, to be vested in the United States, and to be collected and appropriated by their authority; provided that the officers for the collection of the said funds shall be inhabitants of each state respectively in which they reside, and being nominated by Congress shall be approved and appointed by such state accountable to and removeable by Congress; and provided that if, after any nomination being reported to the state, the same is not approved or rejected at the next meeting of the legislature, the person or persons so nominated shall be deemed to be duly appointed3-viz.4
A duty of 5 Cent ad valorem at the time and place of importation upon all goods wares and merchandizes for foreign growth and manufactures, which may be imported into any of the said states from any foreign port Island or plantation, except arms ammunition cloathing and other articles imported on account of the United States or any of them, and except wool cards, cotton cards and wire for making them; and also except the articles hereafter enumerated, the duty on which shall be regulated according to the specified rates thereunto annexed.5
here insert the articles enumerated in the other report6
Also a duty of 5 Cent ad valorem on all prizes and prize goods condemned in the court of Admiralty of any of these states as lawful prize.
A land tax at the rate of 7 Ninetieths of a dollar for every hundreds acres of located and surveyed land.
A house-tax at the general rate of half a dollar for each dwelling house (cottages excepted) and at the additional rate of 2½ Cent on whatever sum the rent of the said house may exceed twenty dollars—to be calculated on the actual rent when the house is rented—and when in the occupancy of the owner on an appraised rent by Commissioners under oath appointed by the state once in 8 years—the lot and its appurtenances in towns and in the Country the outhouses garden and orchard to be comprehended with the dwelling house.9
The duties on imports to pass to the general benefit of The United States, without credit for the proceeds to any particular states—but the product of the land and house taxes to be credited to each state in which it shall arise.10
The said funds to continue ’till the principal of the debt due by the United States at the termination of the present war shall be finally discharged.11
Resolved that an estimate be transmitted to each state of the amount of the public debt as far as the same can now be ascertained, and that Congress will inviolably adhere to their resolutions of the 16th. day of December last,12 respecting the appropriation of any funds which might be granted, and the annual transmission of the state of the public debt, and the proceeds and dispositions of the said funds by which all doubts and apprehensions respecting the perpetuity of the public debt may be effectually removed.13
AD, Papers of the Continental Congress, National Archives. On the endorsement this motion is dated March 21, 1783. It is dated March 20, in the Journals.
1. From January 29, until February 21, 1783, Congress frequently resolved itself into a committee of the whole to devise ways of restoring the public credit. See notes to H’s “Remarks on Plans for Paying the Public Debt” on January 29. On February 21, Daniel Carroll, reported that “the committee have taken into consideration the subject referred to them, and are of opinion, that the committee of the whole be discharged and the business referred to a special committee.” Nathaniel Gorham, H, James Madison, Thomas FitzSimons, and John Rutledge were appointed. The committee reported on March 6 (see notes to H’s motions of March 11). The report was considered until April 18, when it was adopted in amended form. (See JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , XXIV, 256–61.)
On March 20, 1783, the committee recommended that the states give Congress the power to levy certain enumerated duties on goods imported into the United States and suggested that the states provide other revenue for discharging the debt of the United States. James Madison stated that H’s motion “was meant as a testimony on his part of the insufficiency of the report of the Come as to the establishment of revenues, and as a final trial of the sense of Congs with respect to the practicability & necessity of a general revenue equal to the public wants” (“Notes and Debates of the Continental Congress,” MS, James Madison Papers, Library of Congress).
2. H’s motion placed more emphasis on the necessity for permanent funds than the committee report did. The report stated only that “it be recommended to the several states, as indispensably necessary to the restoration of public credit, and to the punctual and honorable discharge of the public debts, to invest in the United States in Congress assembled, a power to levy for the use of the United States, the following duties upon goods imported into the said states from any foreign port, island or plantation” (JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , XXIV, 195).
3. The committee report had recommended that the collectors be appointed by the states “within which their offices are to be respectively exercised” and that Congress have the right of appointment only if a state failed to make an appointment (JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , XXIV, 196).
4. H at this point wrote and then crossed out the following: “a duty of 5 cent ad valorem upon all goods imported from any foreign country into any part of these states, the following articles excepted which shall pay a duty according to the rate hereafter specified.”
5. After specifying the duties to be levied on certain enumerated products, the committee report proposed that a duty of five percent ad valorem be levied upon “all other goods, except arms, ammunition and cloathing, or other articles imported for the United States,… provided that there be allowed a bounty of ⅛th of a dollar for every quintal of dried fish exported out of these United States, and a like sum for every barrel of pickled fish, beef or pork, to be paid or allowed to the exporters thereof, at the ports from which they shall be so exported” (JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , XXIV, 195–96).
7. Space left blank in MS.
8. Space left blank in MS.
9. The committee report had recommended neither a land nor a house tax, but had asked that the states raise “substantial and effectual revenues, of such nature as they may respectively judge most convenient” (JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , XXIV, 196).
10. The committee report recommended “That an annual account of the proceeds and application of the aforementioned revenues, shall be made out and transmitted to the several states, distinguishing the proceeds of each of the specified articles, and the amount of the whole revenue received from each State” (JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , XXIV, 196–97).
11. The committee report recommended that the proposed duties should continue for only twenty-five years.
12. On December 16, 1782, Congress had resolved that, “Whereas it is essential to justice and to the preservation of public credit, that whenever a nation is obliged by the exigencies of public affairs to contract a debt, proper funds should be established, not only for paying the annual value or interest of the same, but for discharging the principal within a reasonable period, by which a nation may avoid the evils of an excessive accumulation of debt” (JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , XXIII, 809).
13. At this point in the Journals appears the following: “That none of the preceding resolutions shall take effect, &c. (in the words of the report to the end)” (JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , XXIV, 200).
At the end of this motion H wrote and then crossed out two resolves which read as follows:
“Resolved, That a Committee be appointed to prepare an ordinance agreeable to the tenor of these resolutions with such additional provisions as may be found necessary to determine in the most explicit and precise manner the nature and extent of the said funds and of the powers to be vested in the United states for the collection and appropriation thereof, and that the said ordinance be transmitted to the several states with a recommendation that the same be incorporated with their acts.
“Resolved, that in case any of the states shall refuse to concur in the plan recommended by the preceding resolutions, it will become indispensable for Congress to require of the several states in payments at short periods the sums necessary for the discharge of the principal of the public debt, in proportions agreeable to the 8th. article of the confederation.”
H’s motion for postponement was rejected by Congress.