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[No. 56 of Vol. IV.] PHILADELPHIA, December 12 REPORT OF THE SECRET ART of the TREASURY, Refpeding the Redemption of the Public Debt 4 and the Reimbursement «f the Loan made of the Bank of the United States Trenfunt Department, Nov. 30, I'i) 2 SIR, I have the honor to transmit herewith a Report, pursuant to two resolutions of the House of Representatives, one of the z\Jl in- Jlant, refpefling the Redemption of the Pub lic Debt; the other of the 2 idinjlanl, refpe9- tng the Reimbursement of the Loan made of the Bank of the United States, pursuant to the eleventh fedion of the aS by ivhich it is carporated; and to be, with the mo/l per fetl rejpeil, SIR, Your mojl obedient, and mojl humble servant, ALEXANDER HAMILTON, Secretary of the Treasury, Th: Honorable the SPEAKER of the House of Reprefintatives. In obedience to two Ilefolutions of the House of Representatives, one of the %I ft itiftant, dire&ing the Secretary of the Treasury to report a Plan for the Redemption of so much of the Public Debt as by the Ast entitled " An Ast making Provision for the Debt of the United States," the United States have reserved the right to redeem ; the other of the 22d instant, diredting him to re port the Plan of a Piovifion for the R#imhurfement of the Loan made of the Bank of the United States, pursu ant to the Xlth fedtion of the Act en titled " An Adt to Incorporate the Subscribers to the Bank of the United States; the said Secretary refpedtfully submits the following report. TH E expediency of taking mea furej for the regular redemp tion of the public debt, according to the right which has been referred to the go vernment, being wifely predetermined by the resolution of the Hosfe of Represen tatives referring the fubjeft to the Secre tary, nothing remains far him but to en deavour to fele£t and submit the mod eli gible means of providing for the execu tion of that important object. With this view, the firft enquiry, which naturally presents itfelf, in, whether the exiding revenues are or are not adequate to the purpose ? *1 he estimates which accompany the re port of the Secretary of the 14th instant, will (hew, that during the continuance of theprefent Indian war, tire appropriations for mtereft and the demands for the cur rent service, are likely to exhaust the pro duct of the exiding revenues ; though they afford a valuable surplus beyond the permanent objects of expenditure, which it is hoped may, ere long, be advantage ously applied to accelerace the extinguilh ®ent of the debt. In the mean time, however, and until the restoration of peace, the employment «• at resource t ' l ' s way, malt of ne «Bitybelufpended; and either the bufmefs redemption mud be dferred, 01 re course us 11ft; be had to other expedients. But did no such temporary necessity or resorting to other expedients exist, LiV 't would dill be recommend ed by weighty confiderations.—lt would a PP ear > in the abftraft, advifeable to leave the^ surplus of the prelent revenues free, to be applied to such casual exigencies as ™ay, from time to time occur; to occasional pilrchafes of the debt when not exhausted by such exigencies, to the payment of in hered on any balances which may be found due to particular states upon the general wtlemwitdf accounts; and finally, to the payment of iatereft on the deferred part lhe debt, when the period for such payment arrives. Wednesday, December 12 . , " There is a reasonable prospect, that if not diverted, it will be found adequate to the ttvo la it important pnnpofes. Relinquilhing, then, the idea of an im mediate application of the present reven ues to t!ie objedl in view, it remains to ex amine what.other modes are in the option or the Legislature. Loans, from time to time, equal to the iums annually and bottomed on the iame revenues, which are now ppropnated to pay inferett; upon j. m ?' offer themselves as one expe c tent, which may be employed with a de gree of advantage. As there it a proba bility of borrowing at a tower rate of in terelt, a material saving \#uldrefult; and even this tefource, if none better could «. ol, £ ht not to fre neg*feed. But it is obvious, that to rely upon this rev iree aW would be to do little to wards the final exoneration of the nation, lo (top at that point woultf consequently be neither provident nor fatisfadory. 1 ne interests as well as the expeftat ions of the Union require something more ef feaual. The establishment of additional reven- the remaining resource. Thii.ifthe bulmefs is to be undertaken iu eatneft, is unavoidable : and a full confidence may reasonably be entertained, that the com munity will fee with fatisfaftion the em ployment of those means, which alone can be HFedtual, for accomplifliing an end, in itfelf so important, and so much an objedt of general delite. It cannot fail to be u niversally felt, that if the end is to be at tained, the neceflary means mult be em ployed. It canonly be expsdted that care be ta ken to choose such as are iiabie to feyi-cit dbjedtions, and that in the modifications of the business in other refpedts, due le gard be had to the prefsnt and progref live circumstances of the country. A (Turning it as the basis of a plan of redemption, that additional revenues arc to be provided, the further enquiry di vides itfelf into the following branches : I. Shall a revenue by immediately con ftitated, equal to the full sum, which may at present be redeemed, according to the terms of the contrast ? 11. Shall a revenue be conftituted,from year to year, equal only to the interest of the fu.u, to be redeemed in each year —coupling with this operation an annu al loan,commenfurate with such sum ? Or, 111. Shall a revenue be constituted each year, so much exceeding the intend of the sum to He redeemed as to be fufficient, within a short definite term of time, 10 discharge the principal itfelf; coupling with this operation also, an annual loan, equal to the sum to be annually redeemed, and appropriating the revenue created to its discharge, within the term which shall have been predetermined ? The firft plan, besides being completely effectual, would be eventually mod (economical j but coniidering to what a magnitude the revenues of the United States have grown in a short period, it is not easy to pronounce how far the faculty of paying might not be drained by any sudden confiderableaugmentation, whete foever immediately placed while the ra pid progress of the country in population and resource feemsto afford a moral cer- tainty, that the necessary augmentation may be made witii conveniences by fucceflive steps, within a moderate term of time, and invites to temporary and partial suspensions, as capable of conci liating the reasonable accommodation of thecommunity withjthe vigorous profecuti of the main design. For these and for o ther reasons which will readily occur, the course of providing immediately the intire sum to be redeemed, is conceived not to be the mod eligible. The second plan, though much more efficacious than that of annual loans, bot- tomed 011 the revenues now appropriated for the payment of interest on the sums to be redeemed, does not appear to be 221 efficaciow. The fchcJule A. *W' % w th -' cfFed of it to the lit of •n l u^L lß ° 3 ' whe " th:; deferred debt will betSftie redeemable in the proporti ons stipulated. Supposing the invellrnrnt ot the iiitcreft which is each year liberat ed, together with that which has been, and will be released by pu,-chafes, pursu ant to provifinns heretofore made, in th ru'"chafe of 6 per cent flr, c i c . a ptlncipal equal to 2,043,837 dollar, and 7 cents would be funk, and a clear annuity, equal to 459,212 dollars and 82 cents would be created, towards fur ther redemptions; but the fund then ne cessary for the future progreflive redemp t'on oit the debt, according to the right reserved, would be 1,126,616 dollars and 44 cents, by 667,403 dollars and 63 cents, the amount of the redeem '"7 —So!»ifth!n«rar>re effjjftual than this is certain!-/ dcliiable, and apnears to be pra&icable. The la£l of the three plans be£l accords with the molt accurate view which the Se cretary has been able to take of the pub lic interest. In its application it is of material con sequence to endeavour to accomplilh theft two points: I. The complete discharge of the sums annually redeemable within the period prefixed, and the reimbursement within the fame period of all auxiliary loans which may have been made for that purpose. H. The confuting by the ex piration of that period, a clear annual fund competent to the future redemption of the debt to the extent of the rijjht re served. The period to which it is conceived the plan ought to refer, is the firft day i3»12 ; htjai.fc bfrctt, i!>c firft payment, on account ot the principal of the dtferred debt, may rightfully be made. In conformity to these ideas, the fol lowing plan is mod refpedtfully submit ted : Premising that the sum redeemable for the firft year of the 6 per cent (lock, bearing a present interest, ia computed at 550,000 dollars. Let an annual fund be constituted, du ring the present feflion, equal to 103,199 dollars and 6 cents, to begin to accrue from the firft ofJanuary, 1793. —Let the sum of 550,000 dollars be borrowed up on the credit of this annuity, reiinburfe able within five years, that is by the firft of January 1799. The sum bo rrowed to be applied on the firft of January 1794, P a y me nt on account of the prineipal of the debt. The proposed annuity will reimburse the fuin borrowed with interest by the firft of January 1799, a "J will be thence forth free for any further application. The sum redeemable the second year, that is on the firft of January 1795, is computed at 583,000 dollars. Let an annual fund be constituted du ring the second feflion after the present, equal to 109,391 dollars and 60 cents, to begin to accrue from the fiift of January 1794. Ler the sum of 583,000 dollars be borrowed Upon the credit of this annuity reimburfeahle within five years, that is, by the firft of Janaaiy 1800 ; the sum borrpwed to be applied on the firft of Ja nuary 1795, to the second payment on account of the principal of the debt. The proposed annuity will reimburse the sum borrowed with interest by the firit of Ja -1800, and will be thenceforth free for any further application. Tlie sum redeemable the third year, that is, on the fij-ft of January 1796, is computed at 617,980 dollars. I>et an annual fund be constituted dur ing the third fcffion, after the present, equal to 115,955 dollars and 17 cents, to begin to accrue from the lirft of January 1795. Let the l'um of 617,980 dollars be borrowed upon the credit oi this annu ity, reimburfeable within five years, that is, by the firll of January 1801. The sum borrowed to be applied on the firft of January 1796, to the third pay ment on accountoftheprinci; j! jfthedebt. y [Whole No. 578.] ahe proptif L -;! ammiy will reiuiLupfc the funri borrowed with iuceicft ty the i!t of January, i3oi. iHe sum redeemable the fourth year, that ison the ill of January i 797, is com puted at 655,058 dollars and 80 cents. . Let an annual fund be conftitmed dur- ing Ihe fourth session, after the prefeut, equal to 1^2,912 dt.llaisand 48 cents ;to to aeci uc from tli ■ ilt of January, J Let the sum of 655,058 dollars and 80 cents, be borrowed upon the cre dit of this annuity, reimburfeable within five years ; that is by the i!t of January I 802. The Aim borrowed to be applied 011 the id of January 1797, to the fourth payment on account ot the principal of the debt. Ihe proposed annuity will reimbuiTe the sum borrowed with interest by the ift of January 1802. Tile turn redeemable the fifth year, that in on the lit of January I*9B, is comput ed at 694,362 dollars and 33 cents. Let an annual fund be conftituttd dur ing the fifth feflion, after the prcfcnt, e qual to 152,743 dollars and 12 cents, to begin to accrue from the ift of January 1797* Let the sum of 694,362 dollars and 33 cents be borrowed upon the credit of this annuity, reimburfeable within four years, that is by the 1 (I of January 1802. The sum borrowed to be applied on the Ift of January 1798 'he fifth payment on account of the ptincipal of the debt. The proposed annuity will reimburfe the sum borrowed with interest by the ill of January 1802. The sum redeemable the fitxh year,that is on the firft of January 1799 is comput ed at 756,024 dollars and 7 cents. Let an annual fund be conliitutcd dur ing the sixth session, after the prelent, equal to 197,680 dollars and 20 cents, tu begin to accrue from the 1 ft January 1798. Let the sum of 736,024 dollars and 7 cents, be borrowed upon the credit of this annuity, reimburfeable within three yeats, that is by the ift of January 1802. The sum borrowed to be applied on the ill of January 1799 to G*th payment 011 ac count of the principal of the debt. The proposed annuity will reimburse the sum borrowed with interest by the ift of January 1802. The sum redeemable the seventh year, that is, on the Ift of January 1800, is computed at 780,185 dollars and 52 cents. Let an annual fund be constituted dur ing the seventh session, after the present, equal to 272,848 dollars and 38 cents, to begin to accrue from the ill of Januaiy 1799. Let the sum of 780,185 dollars and 52 cents be borrowed upon the cre dit of this annuity, reimbursable within two years, that is, by the ill of January 1802. The sum borrowed to be applied on the firft of January 180010 the feventli payment on account of the principal cf the debt. The proposed annuity will reimburse the sum borrowed with interest, by the rfl of January 1802. The sum redeemable the eighth year, that is, on the ill of January, 1801, is com puted at 826,996 dollars and 65 cents. Let an annual fund be coallituted dur ing the eighth session, after the present, equal to 423,583 dollars and 64 cents, to begin to accrue from the ift of January 1800. Let th c sum of 826,996 dollars an<J cents be borrowed upon the credit of this annuity, reimburfeable within one year, that is, on the id of January 1802. The sum borrowed to be applied on the id of January 1801 to the eighth payment on account of the principal of the debt. The proposed annuity will reimbuife the sum boriowed with interest on the lit of Janua r v 1802. The sum redeemable the ninth year, that is, on the ift of January 1802, is com puted at 1,126,616 dollars apd 44 cents. The then existing means for the 'iifcharge of this sum, arifingfrom the operation ui the plan, will be [SiV la ft f>age.~\