CHAPTER The assumption clause was sustained by a vote of thirty-four to twenty-eight; but several points of differ 1790. ence between the two houses, as to the terms on which July 24. the debt should be funded, delayed the final passage of the bill; nor were these questions arranged without a committee of conference. They related chiefly to the interest to be allowed on such part of the new debt as might be subscribed in the interest of the old one; to the amount of the deferred stock; the period at which interest upon it was to commence; and the rights of the United States as to redemption; upon all which points the House was inclined to go beyond the Senate in liberality to the public creditors. Aug. 4. The act, as finally passed, authorized the president to borrow twelve millions of dollars, if so much were found necessary, for discharging the arrears of interest and the over-due installments of the foreign debt, and for paying off the whole of that debt, could it be effected on advantageous terms; the money thus borrowed to be reimbursable within fifteen years. A new loan was also to be opened, payable in certificates of the domestic debt at their par value, and in Continental bills of credit, at the rate of one hundred for one. For subscriptions in the interest of the domestic debt, certificates were to issue to the full amount, redeemable at the pleasure of the government, and bearing interest at the rate of three per cent., the interest to be paid quarterly, and to commence with the first day of January, 1791; all interest becoming due on Continental certificates up to that time to be funded as above. Subscriptions in the principal of the domestic debt were to bear interest at six per cent.; but upon one third of the amount, known as deferred stock, the interest was not to commence till 1800. As a compensation to the holders, this six per cent. stock was not II. to be redeemable at a faster rate than eight dollars upon CHAPTER the hundred annually, including the annual interest. It was left to the option of the Continental creditors to sub- 1790. scribe or not to this new loan. If they did not subscribe, they would still be entitled, for the year 1791, to the same amount of interest payable to subscribers. there was this argument in favor of subscription—the act made a permanent provision for the interest of the new loan, whereas the holders of certificates would be dependent on annual votes. But Besides these provisions for the Continental debt, the act authorized an additional loan, payable in certificates of the state debts, to the amount of $21,500,000, and distributed among the states as follows: Massachusetts and South Carolina, $4,000,000 each; Virginia, $3,500,000; North Carolina, $2,400,000; Pennsylvania, $2,200,000; Connecticut, $1,600,000; New York, $1,200,000; New Jersey and Maryland, $800,000 each; New Hampshire and Georgia, $300,000 each; Rhode Island and Delaware, $200,000 each; but no certificates were to be received except such as had been issued for services or supplies during the late war. In case the subscriptions for any state exceeded the amount allowed, there was to be a pro rata distribution among the subscribers. If the subscriptions fell short-and the allowance, in several cases, was known to exceed the whole amount of the state debt-the state itself was to receive interest on the balance until the Revolutionary accounts between the states and the Union were finally settled; and in case a balance were found due from the Union, till that balance were paid or secured. As to interest and payment, this loan differed somewhat from that for the Continental debt. The over-due interest, to be reckoned to the end of the year 1791, was assumed CHAPTER to constitute one third of the whole subscription, so that II. one third of the entire amount was to be a three per 1790. cent. stock. One third of the remainder was to be de ferred stock, bearing an interest at six per cent., to commence after 1800; the balance was to bear an interest of six per cent., to commence at the beginning of the year 1792. For superintending these loans, and for the general management of the public debt, the old Continental system was continued of a loan-office commissioner in each state, with salaries varying from $600 to $1500 per annum. For payment of the interest and principal on the public debt the foreign debt having the preference, and then the Continental loan-a pledge was made of the income of the existing tonnage and import duties, after an annual deduction of $600,000 for current expenses. This pledge repealed the limitation inserted into the tariff act of the last session, and included, also, certain additional duties specified below. The faith of the United States was further pledged to make up all deficiencies of interest. The proceeds of the sales of Western lands then belonging to, or which might belong to, the United States, were specially and exclusively appropriated toward the discharge of the principal; but several years elapsed before any income was received from that source. To furnish additional means toward fulfilling the obligations thus assumed, the tariff of the last session was revised, and additional duties imposed. By the revised act, wines were to pay from twenty to thirty-five cents per gallon; distilled spirits, from twelve to twenty-five cents per gallon, according to the proof; molasses, three cents; teas, from ten to thirty cents per pound, with a corresponding increase on importations from Europe or in foreign vessels; coffee, four cents; sugars, one and a II. half to five cents; pepper, six cents; pimento, four cents; CHAPTER snuff, ten cents; indigo, twenty-five cents; unwrought steel, seventy-five cents the hundred weight; cables and 1790. tarred cordage, one dollar; untarred cordage and yarn, one dollar and fifty cents; twine and pack-thread, three dollars; salt, twelve cents per bushel; coal, three cents; carriages of all sorts, fifteen per cent. ad valorem; glass and china-ware, twelve and a half per cent. ad valorem ; marble, slate, brick, tiles, and all utensils of marble and slate, paper of all sorts, pictures, prints, clocks, watches, spices not before enumerated, fruits, preserves, pickles, oil, and ground mustard, ten per cent. ad valorem; medicinal drugs, except dye-stuffs, carpets, velvets, satins, and other silk goods, cambrics, muslins, lawns, laces, gauzes, chintzes, colored calicoes, and nankeens, seven and a half per cent. ad valorem. On other articles the duties remained as by the former tariff, with exception of the following, added to the free list: bullion, plaster of Paris, the sea-stores of ships, the clothes, books, tools, and furniture of immigrants, philosophical apparatus imported for seminaries of learning, goods designed to be re-exported in the same vessel, and all goods of the growth or production of the United States. The discount of ten per cent. on the duties of goods imported in American vessels was discontinued, being replaced by an additional ten per cent. when the importation was in foreign vessels. The success which had attended the collection of the duties imposed at the former session had greatly increased the confidence of Congress in this source of revenue. The Senate, which, through fear of smuggling, had, at the first session, cut down the duties imposed by the House, now led off in the other direction. The bill, as it passed the House, proposed only a general increase of one third in the then existing duties, with a CHAPTER special increase on some particular articles; but in the II. Senate this bill was completely remodeled, the old act 1790. being repealed, and a new one substituted, including the increased duties above stated. Gerry, Sedgwick, and Ames zealously opposed this accumulation of taxes on commerce alone, and renewed the cry of the danger of smuggling. Sherman supported the amendments of the Senate. "As the House was opposed to an excise, having already thrown out one bill because it contained a provision of that sort, and still more so to direct taxes, an increase of the tariff was absolutely necessary. The alleged danger of smuggling was an insulting imputation on the American mercantile character, and gentlemen ought to take care lest, in throwing out suggestions of the probability of smuggling, they became thereby encouragers of it." As a safeguard, however, against this danger, the Collection Act was revised, and new and more stringent provisions were added. The new tariff, it was supposed, would furnish an annual income sufficient, besides discharging the current expenses, to meet the interest on the original federal debt. As interest on the assumed debt would not begin to be payable till 1792, provision for that was deferred till the next session. For the final settlement of accounts between the states and the Union, the federal ratio, as it might be determ ined under an act for a census already passed, was adopted as the rule for the apportionment of quotas to the several states; and for bringing the settlement to an immediate conclusion, a new board of three commissioners was constituted, with full power to liquidate and allow all unsettled claims on general principles of equity, although such claims might not be sanctioned by resolves of the Continental Congress, or supported by regular vouchers. It was further provided (and this was the |