his opinion, unsafe to rest absolutely on the CHAP.V. existing revenue, a small addition was proposed 1792. to be raised by extending the internal taxes to pleasure horses, or pleasure carriages, as the legislature might deem most eligible. The consideration of this report was deferred on various pretexts; and a motion was made to reduce the military establishment. The debate on this subject was peculiarly earnest, and in its progress the mode of conducting the Indian war, the relative merits and expensiveness of militia and of regular troops, and the danger to liberty from standing armies, were elaborately discussed. It was not until the fourth of January that the motion was rejected. While that question remained undecided, the report of the secretary was unavoidably postponed, because, on its determination would depend, in the opinion of many, the necessity of additional taxes. It would seem not improbable that the opponents of the American system of finances, who constituted rather a minority of the present congress, but who indulged sanguine hopes of becoming the majority in the next, were desirous of referring every question relating to the treasury department to the succeeding legislature, in which there would be a more full representation of the people. Whatever might be the operating motives for delay, neither the extension of the law imposing a duty on spirits distilled within the United States to the territory northwest of the river Ohio, nor the plan for redeeming the public debt, which was earnestly pressed by the administration, could be carried through the present congress. Those 1793. CHAP. V. Who claimed the favour and confidence of the peo 1793. ple as a just reward for their general attachment to liberty, and especially for their watchfulness to prevent every augmentation of debt, were found in opposition to a system for its diminution, which was urged by men who were incessantly charged with entertaining designs for its excessive accumulation, in order to render it the corrupt instrument of executive influence. It might be expected that the public attention would be attracted to such a circumstance. But when party passions are highly inflamed, men do not reason as at other times, nor do they draw from any premises those conclu. sions which would be formed by persons who are strangers to the influential motives of the day. The assertion that the existing revenues, if not prodigally or corruptly wasted, were sufficient for the objects contemplated by the president in his speech, would constitute an ample apology for the impediments thrown in the way of a system which could not be directly disapproved. Soon after the motion for the reduction of the military establishment was disposed of, another subject was introduced which effectually postponed, for the present session, every measure connected with the finances of the nation. An act of congress which passed on the fourth of August 1790, had authorized the president to cause to be borrowed any sum not exceeding twelve millions of dollars, to be applied in pay. ment of the foreign debt of the United States. A subsequent act which passed on the 12th of the same month, authorized another loan not ex. ceeding two millions, to be applied, in aid of the sinking fund, towards the extinguishment of the domestic debt. A few days thereafter, a power to make these loans was delegated by the president to the secretary of the treasury by a general commission referring to the acts, but not discriminating between the loans. This commission was accompanied by written instructions prescribing the conduct to be observed with respect to the foreign debt. A payment of such sums as should become due at the end of the year 1791 was positively directed; but with respect to the residue, the secretary was to be regulated by the interests of the United States. Under this commission two loans were negotiated in 1790, and others at subsequent periods. As many considerations of convenience opposed such an arrangement as would appropriate all the monies arising from either of these loans to one object, to the total exclusion of the other; and no motive was perceived for thus unnecessarily fettering the operations of the treasury; each loan was negotiated under both laws; and consequently the monies produced by each were applicable to both objects, in such proportions as the president might direct. It has been already observed that his written instructions had ordered the payment of those instalments of the foreign debt which should become due before the first of January 1792; but no further sums on that account were to be borrowed until supplemental orders to that effect should be given, unless a loan could be CHAP. V. 1793. CHAP. V. made on such terms as would render it advan 1793. tageous to the United States to anticipate the payments to their foreign creditors. It being the opinion of both the president and secretary that the official powers of the latter authorized him to draw the monies borrowed for domestic purposes into the treasury, where they would form a part of the sinking fund, and be applicable to the objects of that fund in conformity with the laws of appropriation, no written instructions were given respecting that part of the subject; but in the progress of the business, every material step which was taken was communicated to the presi. dent, and his directions obtained upon it. While the chief magistrate remained at the seat of gov. ernment, these communications were verbal; when absent, they were made by letter. Considerable latitude of discretion was allowed to the secretary, he taking care not to transcend the limits prescribed by the laws he was to execute. At this period, the domestic debt bore a low price in the market, and foreign capital was pouring into the United States for its purchase. The immediate application of the sinking fund to this object would consequently acquire a large portion of the debt, and would also accelerate its appreciation, so as to enable the present holders, who would sell chiefly to foreigners, to obtain a more adequate compensation for the property they should transfer, than could be expected should the government keep out of the market. The best interests of the United States, and his own fame, thus impelling the secretary to give the 7 operations of the sinking fund the utmost activity CHAP. V. of which it was susceptible, he had, with the 1793. approbation of the president, directed a part of the first loan to be paid in discharge of the instalments of the foreign debt which were actually due, and had drawn a part of it into the public treasury in aid of the sinking fund. In May 1791, instructions were given to the agent of the United States in Europe to apply the proceeds of future loans as they should accrue in payments to France, except as to such sums as should be previously and specially reserved. In the execution of these instructions some delay intervened which was to be ascribed, among other causes, to representations made by the French minister of marine that a plan would be adopted, to which a decree of the national assembly was requisite, for converting a large sum into supplies for St. Domingo: and to a desire on the part of the agent to settle, previously to further payments, a definitive rule by which the monies paid should be liquidated and credited to the United States. The disordered state of French affairs protracted both the one and the other of these causes of delay to a later period than had been expected; and, in the mean time, the secretary continued to draw into the United States such portions of these loans, as were destined to be brought in aid of the sinking fund. Such was the state of this transaction, when the commencement of those calamities which have finally overwhelmed St. Domingo induced the American government, on the urgent application of the French minister, to furnish supplies |