The Debates and Proceedings in the Congress of the United States, Thirteenth Congress, First and Second Sessions Page: 1,449
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HISTORY OF CONGRESS.
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Febrdahy, 1814.
The Loan Bill.
H. op R.
from his assumed capital. To this the same gen-
eral objections will apply; the premiums being
assumed, the conclusions are necessarily incon-
clusive. The result of this estimate gives to us
an annual income of ©255,849,600. The first re-
mark which occurs to me is the very extraordi-
nary circumstance of the gentleman having omit-
ted to discriminate between the net and gross
income, arising from any given object; we are,
therefore, totally at a loss to know whether to
consider this result as comprehending the net or
gross income arising from the capital of the coun-
try. I presume, however, it is a mixture of both,
and therefore affords a latitude for conjecture, too
broad to arrive at the truth. It cannot be net
income, because the amount exceeds twelve per
cent, on the given capital; a result which the
most sanguine cannot admit. It cannot be gross
income, because it is well known the annual pro-
duce from agriculture exceeds $19,640,600—as is
sufficiently proved by the official reports of annual
domestic exports—which in better times amount-
ed to nearly fifty millions of dollars, and would
now exceed that amount were it not for the war
and that deadly incubus, the Embargo, which
presses to death the resources and activity of the
country. The sum allowed for commercial in-
come may remain as a rule for other times; at
present we have no commerce, and consequently
no5 income from that source.
Without examining all the items of this ac-
count of the honorable chairman, I cannot avoid
noticing the last, though not least, article on the
list. It is the product of other occupations, in-
cluding manufactures, as stated in the last Cen-
sus, amounting to $172,000,000-. This, I presume,
must be intended as the gross product, and indeed
it is so gross as not to be susceptible of applica-
tion by the Government, to any purposes of
finance. I admit, with great satisfaction, the in-
trinsic value of our domestic manufactures; our
people, of almost every description, particularly
of the laborious class, are clothed with the fabrics
made, for the most part, in their own families.
This is as it ought to be, and is far preferable to
those hotbed manufacturing establishments which
spring up in times of national depression, and
can only flourish on the ruins of agriculture and
commerce, particularly in the Southern and Mid-
dle States, where our dispersed population, our
fertile fields, and extensive seacoast, all point to
the plough and the ship as the instruments of
their wealth and prosperity—as the means most
conducive to national good and individual virtue.
I would seriously ask gentlemen, what revenue
they could expect to derive from a tax on the do-
mestic manufactures of the Southern, Middle, or
even Western States? Were this attempted, it
might not literally take the bread out of the mouth
of the laborer, but it would strip him of the gar-
ments he wore; it would bear most heavy on the
poorer class of citizens, and in proportion to the
number of women and children in a family, in
that proportion would such a tax operate on them.
In the States which I have mentioned we have no
surplus manufactures; and from all the States the
exports of manufactures, I believe, cannot be cal-
culated at more than half a million of dollars.
The exports from those sources did not, the last
year, exceed about three hundred thousand dol-
lars. From this course of reasoning I am war-
ranted in concluding that, for Government use,
or financial purposes, this immense sum of $172,-
000,000 dwindles down to about half a million of
dollars, and that more cannot be made out of it,
unless we are doomed to go naked.
The honorable chairman, having fixed the cap-
ital and productive income of the country, pro-
ceeds to ascertain, by a process I profess not to
understand, the amount both of necessary and un-
necessary circulating medium. The necessary
circulating medium he estimates at about $>47,-
000,000, and the surplus at $>53,000,000, making
in the whole one hundred millions of dollars, of
which he conceives fifty-three millions maybe
loaned to the Government. Permit me here to
remark, that this calculation appears to me to be
at war with all those correct principles which
govern the transactions of moneyed capitalists.
It would be perfect folly for them to put into cir-
culation more medium than is necessary for the
demands of commerce, and the ordinary gradual
improvement of the country; if they attempted
it the surplus would return upon them, or the
rate of interest would be reduced in proportion to
the excess of paper set afloat. The present high
rate of interest contradicts the idea of the exist-
ence of such a superabundance of circulating me-
dium. The actual specie in the United States
does not exceed twenty-five millions of dollars;
this is generally held by the banks, and their pa-
per literally constitutes the circulating medium,
and not a dollar can be obtained from the banks
at less interest than about seven and a quarter
per cent., consequently, whatever may bie the
nominal amount of bank capital, they catfifot
keep in circulation more than the amount neces-
sary for the objects which I have stated, which,
the gentleman admits to be forty-seven millions
of dollars. I am inclined, therefore, to think the
actual circulating medium, in times of ordinary
prosperity, does not exceed fifty millions of dol-
lars. This paper medium, resting on a specie
capital of not more than twenty millions, will
not, with safety, admit issues to a greater amount.
Already has the Government borrowed within
the last two years near forty millions of dollars,
most of which has been obtained from the banks,
and from individuals who make the banks the in-
struments of enabling them to comply with their
engagements. The fair and honest ability of the
banks to lend does not exist to a much greater
extent, unless the stock of the Government is
considered a safe fund on which they may issue
their own paper to any amount.
If this be the case, it is evident the whole sys-
tem is a tottering fabric of credit; the Govern-
ment relying on the credit of the banks, and the
banks resting on the credit of the Government.
If this confidence does exist, and is likely to con-
tinue, I would ask, why not issue Government
paper at once, and save the enormous interest now
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Gales and Seaton. The Debates and Proceedings in the Congress of the United States, Thirteenth Congress, First and Second Sessions, book, 1854; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc30354/m1/7/: accessed July 16, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.