It can hardly be expected that in a monarchical government so recently founded by military usurpation, the respect due to COMMERCIAL PRINCIPLES, so essential to insure a good financial system, should immediately prevail. We cannot fail, however, to admire the very liberal disposition, even in time of war, of so great a portion of the revenues of the empire for interior improvement. The gallant and accomplished emperor is said to posses great taste for literature and the fine arts; these he has most liberally endowed in his own country, and even sent magnificent presents to a state school in these United States, for the encouragement of these FLOWERY BANDS OF SOCIAL UNION. It is also said that the greatest additions ever known are now making to the roads and canals of France! Ought not our legislature to blush, to be thus outdone in a principal line of their constitutional duty to our COMMONWEALTH! In page 157 of this manual, we inserted part of a treasury report, to which we now add the following from Mr. Hamilton's statement communicated to the house of representatives of the United States, Dec. 5th, 1791. They may, in part, elucidate the sentiments which were at the time opposed to that funding system that raised our once degraded national reputation to its present state. We can only regret we have not room for the entire report, formed after we had felt, in part, the good effects of the funding system. These gave encouragement for a further expansion of the patriotic views of an enlightened statesman. "It is certain, that the United States offer s vast field for the advantageous employment of MORE CAPITAL. "The introduction of banks, has a powerful tendency to extend the active capital of a country. Experience of the utility of these institutions is multiplying them in the United States. It is probable that they will be established wherever they can exist with advantage; and wherever they can be supported, if administered with prudence, they will add new energies to all pecuniary operations. "The aid of foreign capital may safely, and with considerable latitude be taken into calculation. Its instrumentality has been long experienced in our external commerce; and it has begun to be feit in various other modes. Not only our funds, but our agriculture and other internal improvements have been animated by it. It has already, in a few instances, extended even to our manufactures. "It is not impossible, that there may be persons disposed to look with a jealous eye on the introduction of foreign capital, as if it were an instrument to deprive our own citizens of the profits of our own industry but perhaps there never could be a more unreasonable jealousy. Instead of being viewed as a rival, it ought to be considered as a most valuable auxiliary; conducting to put in motion a greater quantity of productive labor, and a greater portion of useful enterprise, than could exist without it. It is at least evident, that in a country situated like the United States, with an infinite fund of resources, yet to be unfolded, every farthing of foreign capital, which is laid out in internal ameliorations, and in industrious establishments of a permanent nature, is a precious acquisition. "And whatever be the objects which originally attract foreign capital, when once introduced, it may be directed towards any purpose of beneficial exertion, which is desired. And to detain it among us, there can be no expedient so effectual as to enlarge the sphere, within which it may be usefully employed: though introduced merely with views to speculations in the funds, it may afterwards be rendered subservient to the interest of agriculture, commerce and manufactures. "When the manufacturing capitalist of Europe shall advert to the many important advantages, which have been intimated, in the course of this report, he cannot but perceive very powerful inducements to a transfer of himself and his capital to the United States. Among the reflections, which a most interesting peculiarity of situation is calculated to suggest, it cannot escape his observation, as a circumstance of moment in the calculation, that the progressive population and improvement of the United States, ensure a continually increasing domestic demand for the fabrics which he shall produce, not to be affected by any external casualties or vicissitudes. "But while there are circumstances sufficiently strong to authorize a considerable degree of reliance on the aid of foreign capital, towards the attainment of the object in view, it is satisfactory to have good grounds of assurance, that there are domestic resources of them. selves adequate to it. It happens, that there is a species of capital, actually existing within the United States, which relieves from all inquietude on the score of want of capital; this is the funded debt. "The effect of a funded debt, as a species of capital, has been noticed upon a former occasion; but a more particular elucidation of the point seems to be required by the stress which is here laid upon it; this shall accordingly be attempted. "Public funds answer the purpose of capital, from the estimation in which they are usually held by monied men; and consequently from the ease and dispatch with which they can be turned into money. This capacity of prompt convertibility into money causes a transfer of stock to be in a great number of cases equivalent to a payment in coin; and where it does not happen to suit the party who is to receive, to except a transfer of stock, the party who is to pay, is never at a loss to find elsewhere a purchaser of his stock, who will furnish him in lieu of it, with the coin of which he stands in need. "Hence in a sound and settled state of the public funds, a man possessed of a sum in them, can embrace any scheme of business which offers, with as much confidence as if he were possessed of an equal sum in coin. "This operation of public funds, as capital, is too obvious to be denied. "The force of monied capital which has been displayed in Great Britain, and the height to which every species of industry has grown up under it, defy a solution from the quantity of coin which that kingdom has ever possessed. Accordingly it has been coeval with its funding system, the prevailing opinion of the men of business, and of the generality of the most sagacious theorists of that country, that the operation of the public funds as capital has contributed to the effect in question. Among ourselves appearances thus far favor the same conclusion. Industry in general seems to have been reanimated. There are symptoms indicating an extension of our commerce. Our navigation has certainly of late had a considerable spring, and there appears to be in many parts of the union a command of capital, which, till lately, since the revolution at least, was unknown, "A funded debt serving as a new power in the operations of industry, it has within certain bounds a tendency to increase the real wealth of a community; in like manner as money borrowed by a thrifty farmer, to be laid out in the improvement of his farm, may, in the end, add to his stock of real riches. "Yet there are respectable individuals, who, from an aversion to an accumulation of public debt, are unwilling to concede to it any kind of utility, who can discern no good to alleviate the ill with which they suppose it pregnant; who cannot be persuaded, that it ought in any sense to be viewed as an increase of capital, lest it should be inferred, that the more debt the more capital, the greater the burthens the greater the blessings of the community. But it interests the public councils to estimate every object as it truly is." "Wherever To the foregoing we add from Dr. Adam Smith: capital predominates industry prevails; any variation of capital therefore naturally tends to increase or diminish the real quantity of industry, the number of productive hands, and consequently the exchangeable value of the annual produce of the land and labor of the country, the real wealth and revenue of all its inhabitants." A reference to the debates of the day, as they are contained in the periodical publications for 1788, to 1791, will shew the variety of argument warmly opposed to the funding either the whole or any part of the WAR DEBT by any means, and also the reasoning in favor of a different modification of the plan that finally obtained, chiefly by the exertions of Mr. Hamilton. Amount of debt on 1st January 1790, per above, 474,715 11 Deduct monies in Holland, Mr. Hamilton has been blamed both for assuming too much, and for funding too little, on account of the unliquidated claims of each state on the union for important services during the revolutionary war. But the experience of 15 years has decided the question, and shewn that it would have been greatly to the interest of all classes and descriptions throughout our union. If equal justice had been done to the generosity of those who have so long withheld their just claims from the public eye: if the United States had added a sum to the assumed debts of the states equal to ten dollars a head for each inhabitant, they might have called it a gratuity, in part, for inestima ble services....inestimable not only for the blessings they procured in our independence, but for the 300 millions of acres that were unexpectedly won from upper Canada, in addition to the territory claimed by the revolutionary provinces as their own. This inestimable prize would not only have liquidated our just debts, it would sink ten times the amount long before the certificates therefor could be beneficially spared from general CIRCULATION as money. WHAT WE OUGHT TO HAVE DONE, in part, for real services totaly neglected, a recurrence to pages 129 and 130, and to any history of the times, will fully evince. The plan proposed would have raised the debt to about 100 millions, and yet to less than one fifth of the British extra expenses in the same war....a war, during which our personal increase does not appear to have been retarded from former rates, and the extra 300 millions of acres won therein, being equal to the averaged quality of the acres of Britain, may finally be worth at least the rental of the present purchase money, at two dollars the acre. But the substance of this digressive note will be reserved for continuation in its place. Specification of the nominal public debt of the United States, from January 1st 1800, and 1805, exclusive of the sinking funds. The usual offsetts to ascertain the true debt, are reimbursements, sinking funds, cash in the treasury, custom house bonds, and balance due for instalments of the public lands; these, if the three per cent. and eight per cents. are reduced to six per cent. stocks, would reduce the present debt below fifty millions of dollars; but the only correct mode of comparing the burthens for any two years is, by looking at the population and at the variation table of money, page 142; these will prove that our debt was at its acme in 1791; since which it is so 2 A |