« PreviousContinue »
[H. OF RO tem of banking has been wonderfully extended that bank notes ought to be stamped. He did throughout that kingdom. In every part of it not believe the analogy between the bank and bank notes are current; every town and village private notes was so strong as had been reprehas its banks; they are as universal as their sented. If the facts were as represented, that churches. Mr. R. asked, where would be the every bank note was to be considered as propropriety of taxing notes issued by fifty indi-ducing a profit to the banker, there would be viduals in their individual capacity, and exempt-good ground for the tax; but he was of opinion ing those issued by them when they associated, this was not the case. For instance, if the bank called themselves a Banking Company, and gave their note for one hundred dollars, it was issued notes to three times the amount of their equal evidence with the note of an individual, capital? The measuré seemed to him unwise, that they had received the value of one hundred and he was sure it would be unpopular. He dollars. But if they went further, it would be could not conceive why people who had no found the analogy did not hold. The note of other property than stock, which, in many i the individual was at a certain date, but that of instances, yielded an interest of fifteen per cent., the banker was on demand; and they were should not contribute to the support of Govern every day liable to be called upon for the money ment.
of which the note was the representative; so Mr. SWANWICK. — The greatest objection that they were obliged to keep the money, or which the banks in England seemed to have to money at least to a great amount, ready to take the tax, was, that it might ascertain the quan- up their notes whenever presented. Banks tity of notes they had in circulation. In order could not, therefore, be considered as receiving to prevent this, the Bank of England commuted a profit on all the notes they issued; but only with Government for a certain sum; but the upon the difference between the amount of notes notes of all the private banks were stamped. issued, and the cash they are ovliged to keep by He thought it reasonable that this kind of notes them to answer their demands. The analogy, should be stamped as well as others, though he therefore, did not hold; and, if bank notes would have the tax low; for he saw no reason were taxed, it must be upon a different princiwhy merchants should pay, and bankers be ex-ple from that on which the notes of individuals cused from the duty, since great emolument are taxed. was derived from these notes, by the consent Mr. POTTER was in favor of the amendment, of the community, and the community, in re- and he trusted that gentlemen who were always torn, had a right to expect assistance from the ready to go into every species of expense, would banks.
not Alinch when the object was to raise money. Mr. W. SMITH believed, if an original propo- He had this morning voted for a bill laying adsition had been brought forward to tax bank ditional tax on licenses, which he believed notes, it would have been thought a very seri- would be found in some degree oppressive, but ous thing, and they should have paused before he did it because he knew revenue was wanted. they consented to the proposition. Gentlemen He hoped the gentleman from South Carolina who advocated this proposition, allowed it would, on this occasion, concur in the proposed would require many provisions to carry it into tax. He doubted not unexceptionable means effect. What those provisions were he could might be devised for collecting it; if not, it not pretend to say. He thought bank notes might be given up. had been too much confounded with notes of | Mr. HARPER was against the amendment, not individuals, and they were quite different things. because he was satisfied bank notes were not a Those of individuals were mostly larger, the proper object of taxation, but because he did greatest part of bank notes were for five dol- not wish to embarrass the bill with a subject lars. Notes of individuals, if not stamped, could which they had not time to consider. not be received in evidence; but he did not Mr. SWANWICK again spoke in favor of the know what must be the penalty on bank notes tax, being issued without stamp. Besides, he said, Mr. Otis was against the amendinent; not to lay a duty apon the notes issued by the because he thought such a tax would be imBank of the United States would be a violation proper, but from the difficulties which would of its charter, for, by that charter, it was said, attend the carrying it into effect. Besides, he the notes of that bank should be received at the said, if the notes were to revert to the bank custom-house in payment of duties. It had every two or three years, it would cause a run been said a commutation might be allowed, but upon them for cash, instead of renewed notes, that would be equally contrary to the charter; / which might be very inconvenient. besides, if such a thing were to be done, he did Mr. VENABLE did not think the run upon tho not know who could do it; it would not be the bank which the gentleman had mentioned could proper business of the PRESIDENT, and that take place, as the notes would have to be reHouse would have difficulty in saying what newed three years from the time issued, and would be a proper sum to be paid for the pur- all their notes would not be issued on one day. pose. He again feared the introduction of this Mr. V. again insisted that this tax should be principle would destroy the bill.
general; and if they had not time to make Mr. Coir did not think it was quite so clear a it so, it ought to be put off till they had. Not thing as some gentlemen seemed to think it, to include bankers would be to lay a tax upon
H. OF R.]
[JUNE, 1797. the people whose complaints of its hardships
THURSDAY, June 29. could not be heard. He deprecated this as
Stamp Duties. unjust. Mr. HARPER could not conceive that the
BANK NOTES. great body of merchants and farmers through- | The House went into a Committee of the out the United States were people who could Whole on the bill for imposing stamp duties, not make their complaints heard, if they had when the clause of Mr. GALLATIN yesterday them to make. The proprietors of banks, Mr. proposed to the committee, on the subject of H. said, already paid taxes in a variety of bank notes, being under consideration, shapes; many of them were merchants, and · Mr. Otis supposed that at least two-thirds of would, of course, pay the tax imposed on the the whole amount of paper issued by the banks, notes of individuals.
returned and were re-issuerl every year, and Mr. BROOKS was against going into a tax on thus the banks must pay tax upun two-thirds of bank notes at present, but denied that there their capital in the first year after the law passwould be any cause of complaint from the peo- ed, and which, according to a rough calculaple on account of the taxes imposed by this bill. tion, relation being had to the different denomHe wished to make a beginning with a stamp inations of notes, amount to nearly one jer tax at present; it might not be completed these cent. on their capital. The tax ought to be seven years. Gentlemen might as well go on levied upon such new notes only as should be and propose a tax on newspapers, which, what issued hereafter; all that were now in existence ever might be said against it, he believed might were protected by the charter, and any law rebe laid without infringing the liberty of the lating to them would be retrospective; and as press; but a thing of this kind would require a one-fifth of the whole number of notes would great deal of detail.
be renewed every year, a tax upon them would Mr. CLAIBORNE was in favor of including bank be found to bear as hard as upon other notes notes; not to do this, he said, would be to catch and bills, which seldom comprised more than small fish, and let the large ones pass.
the fifth part of the transactions of an individuMr. GALLATIN said that the provisions for lay- al. It ought also to be considered, that the paing this tax would be by no means difficult. per issued by the bank generally became worn Indeed, three-fourths of the bill was copied and dirty, and incapable of receiving a stamp, from the British statute, and that part respect- so that in less than two years the whole amount ing bank notes could be as easy copied as any of paper must be re-issued, and the entire tax other part. The observations respecting the assessed in the same period. This plan would charter of the Bank of the United States, were also be inconsistent with that of a commutanot deserving of a reply. There was only one tion, which had been proposed. of two things which could be done, either to Mr. DAYTON (the Speaker) did not think that tax bank notes, or to excuse all other notes this proposition precluded the provision of a from the tax.
commutation. He was in favor of taxing bank Mr. SITGREAVES could not submit to hear that notes, but he wished also to hold out a commuIt was the intention of those who opposed this tation, and such a one as should induce all the motion, to screen the moneyed interest of this banks to embrace it; for, if this were not the country from paying a tax. He had no such case, they would not be taxed equally, as the views. He had no objection to tax the banks notes of banks did not bear a just proportion to in proportion to the amount of their business; the amount of their dividends. This clause but he could not agree to its being done in this would not, therefore, preclude the commutaway. If gentlemen would estimate how much tion, but render it proper, and a clause could the stamp duty of a bank would produce to the be brought in excusing such banks from the United States, he would vote for a sum of this duty as came into the proposed plan, kind by way of commutation. Charges could Mr. GALLATIN said, his ideas corresponded rarely be made against the side of the House exactly with those of the gentleman who had with whom he generally acted, for not being just spoken. The scheme suggested by the willing to vote for revenue; a contrary charge gentleman from Massachusetts, of not taxing was more frequently made. He trusted the the notes at present in'circulation, would exAmendment would not be agreed to; but that case bank notes from all tax, as, according to if the tax were laid, it would be by way of his own account, only about one-fifth of the commutation.
notes issued came in in the course of a year, so The question was taken and carried, there that it would be five years before a new tax being 55 votes in favor of it.
could operate upon all their notes, and it was The committee rose and had leave to sit probable the bill might not pass for more than again.
three or four. That gentleman supposed that The resolution respecting an adjournment bankers' notes ought not to be charged more was received from the Senate, and disagreed to. than others; if this were the case, they might The disagreement being read, Mr. Giles moved be reckoned to run for four or five years, while the same resolution filled with Monday next; those of individuals were at six and twelve but Mr. WILLIAMS opposed it, and moved to months. The note of an individual, for fifty adjourn.
| dollars, was to pay ten cents; he calculated a
[H. OF R bank note, therefore, for a like sum, which he | the rates of duty, it became necessary to fix supposed, upon an average, to run four years, the rates upon a fair basis. If the rates were thirty cents.
fixed too high, they ought to reduce them. He With respect to the notes at present in circu- did not see the propriety of selecting moneyed lation, Mr. G. said, they ought all to be called in corporations for the purpose of laying a high before a certain time, and after that day no note duty upon them. He moved to strike out the should be pegotiable which was not stamped. three cents for every five dollars, and leave it a
The gentleman from Massachusetts was not blank. correct when he said that this tax would Mr. Dayton hoped this proposition would be amount to one per cent. upon the capital em- agreed to, as by a vote upon the question in ployed in banks. The calculation of the amount blank they would fix the principle whether or of the tax upon a bank which he had made, not bank notes were to be taxed, and the scale would amount to $10,000 a year, whereas one could be afterwards fixed. If there was the per cent, upon the capital of the Bank of the difference alleged between bank notes and the United States would amount to $200,000; but notes of individuals, it would be sufficiently conhe said as he bad before stated) that the notes sidered in the commutation. He should not, issued by a bank were not equal to its capital, indeed, be willing to agree to any scale without or any thing like it. He could not, indeed, say a commutation, for the reason he had before what the amount of the notes of the Bank of mentioned. For, said he, take the Bank of the the United States might be wbich were received United States and the Bank of North America, for duty, from one end of the United States to and the notes issued by them bear no sort of the other; but he knew banks in general, in proportion to their respective capitals. If the large cities, did not employ more than two-fifths tax were to be laid upon the notes issued, the of their capital in this way. He knew it to be Bank of the United States would pay a much à fact with respect to a bank of the largest larger sum than the other in duty. property in the United States, except the Bank Mr. GALLATIN observed that the gentleman of the United States. He thought of proposing from South Carolina had said they were about to the commutation to be one per cent. upon the select moneyed corporations as objects on which amount of the dividend paid by eachi bank, to lay a high duty. He had made a calculation which he supposed would be deemed a reasona | to show that this was not the case, but that ble sum.
what was proposed was no more than just and Mr. Otis explained.
reasonable, and that instead of the tax being Mr. SEWALL thought the observation of the one per cent. upon their capital, it was not more gentleman from Connecticut yesterday, as to the than one twentieth or one twenty-fifth part of . nature of bank notes, had weight. He agreed one per cent. with him that they were very different from He would state the facts, and beg gentlemen the notes of individuals, as they were always to correct him where he was mistaken. In the obliged to keep cash in readiness to take up first place he would state the capital of all the their notes, while individuals, knowing exactly banks of the United States at $20,000,000; the the time when the money for theirs would be whole amount of bank notes at less than $8,000,Wanted, could make use of it in the mean time. 000. He would divide these $8,000,000, oneTherefore, if they taxed bank notes, they ought half into notes under fifty dollars, and one-half not to tax them in the same proportion with above that sum as follows: those of individuals at a certain date. Notes $4,000,000 in notes under fifty dolof individuals, under twenty dollars, were to lars, which would give about be exempt from duty, while every note issued eighty thousand notes, (for though by a bank was proposed to be taxed.
they would be of different sizes Every banker's note of fifty dollars was to be they paid in the same proportion,) charged with thirty cents, while those of indi- at thirty cents,
$24,000 viduals, which might run for two or three $2,000,000 of one hundred dollars years, were charged only with ten cents. and upwards, at fifty cents, .. 10,000 Every three or four years they would have | $2,000,000 of three hundred dollars to pay this sum. If a fair commutation were and upwards, . . . .
4,000 to be made, they should first fix the tax upon jost principles.
$38,000 Mr. NICHOLAS thought if there was no objec- | Allow for mistakes, . .. 2,000 tion to the commutation, there could not reasonably be any made to the tax, because if Which includes all the notes in cirthe commutation were reasonable they would culation in the United States, . $40,000 not choose to pay the tax; but, if they should | As to the principle of taxation itself, that choose to pay the tax, instead of the commu- bank notes of fifty dollars should pay thirty tation, it would be evidence that the tax was cents when notes of individuals only pay ten too low.
cents, justice requires the difference, on the Mr. W. Smith did not see the force of the same principle that notes of sixty days had been argument of the gentleman last up. As the charged with only two-fifths of the duty chay ged commutation was to bear some proportion to lupon others.
H. OF R.]
(July, 1797. Mr. G. stated the following account of a bank for less than five per cent. to clear the expense in Philadelphia, whose capital was $2,000,000, of making it. and to which Government owed nothing; which, Mr. W. SMITI thought they should first fix he said, would apply to every other bank in the the rates to be paid on bank notes before they same circumstances, with little variation : determined upon the composition. To the original fund, . . $2,000,000 Mr. GALLATIN said, when the rates were beTo deposits, about · ·
'900.000 fore under consideration, the gentleman from
· To bank notes,
South Carolina objected to it, because, if fixed . .
too high, he said it would influence the compoTotal debts, . .
$3,500,000 sition. He therefore moved to have it struck
out; but now, when a composition was under By notes discounted,
$3,000,000 consideration, he turns round and says it would *By cash in vault,
500.000 be better first to fix the rates. He thought one
per cent. a reasonable composition, and that it Total credits, . . $3,500,000 would be best first to fix that.
Mr. SMITH denied that he wanted first to fix As banks were thus able to transact business the composition; it was his wish to strike out to the amount of three millions of dollars, the rates, to reduce them, that he moved to though their original fund was only two mil- | leave the sum blank. lions, he accounted for their sharing dividends! The question was put and carried, there being of nine per cent. on their stock. It would be 54 votes in favor of it. observed that the two millions capital were not
| Mr. GALLATIN then renewed his motion for touched for notes, and yet they were charged | fixing the scale of duty to be paid on bank notes. with selecting these bodies of men upon whom
It was, on notes not exceeding fifty dollars, to lay a heavy tax.
three cents for every five dollars ; those not exMr. G. concluded by saying he had no preju- ceeding one hundred dollars, fifty cents; those dice against banks. He knew they were liable above one hundred dollars, and not exceeding to abuse, but, upon the whole, he believed them five hundred dollars, one dollar; for all above to be useful. He believed the scale he had | five hundred dollars, two dollars. formed was correct, but should withdraw it for
Mr. DAYTON said there were many notes unthe present, in order to give an opportunity of
an onnortnnity of I der five dollars, for which there was no provitrying the principle.
have included the small ones; and, to dissipate · Friday, June 30.
every doubt on the subject, he moved to replace Duties on Stamps.
" three cents for every five dollars," with The proposition of Mr. GALLATIN for admit-“three-fifths of a cent for every dollar." ting of a composition from the banks in lieu of Carried, 39 to 24.* the tax, came next under consideration—the blank in which was moved to be filled with one
MONDAY, July 3. per cent. ; when
The bill for laying a stamp duty was read a Mr. W. SMITH said, if the gentleman from third time, and the blanks filled up, viz: that Pennsylvania was right in his calculation yes-for fixing the time of the act taking effect, with terday, the whole amount of duties arising from the 31st day of December next; the fine and the banks would be $8,000 a year, and there- imprisonment for counterfeiting stamps, &c., fore they ought not to go farther in fixing the with $1,000 and seven years' imprisonment; and composition, whereas one per cent., according the time for which the duration of the act was to the same statement, will produce more than limited, with five years. double that sum; for, if the whole capital of the The 'yeas and nays being taken on the passbanks in the United States be twenty millions, age of the bill, were-yeas 47, nays 41, as and their average dividend ten per cent., that follows: will produce two millions, which at one perved
1 YEAs. John Allen, James A. Bayard, David cent. will give $20,000. He therefore moved,
Brooks, James Cochran, Joshua Coit, William Craik, in order to bring the matter nearer to a fair equivalent, to strike out one per cent. and insert • This taxation of bank notes presents the ready mode of one-half per cent.
regulating the paper currency of the States, and suppressing Mr. NICHOLAS said what the duty would pro- the mischief of small notes which are a constant source of duce was uncertain; they could with more cor- depredation apon the laboring part of the community, & conrectness say, that one per cent. was a reason stant source of crime in the making and passing counterfeit able composition on the dividends, than what paper, and the constant expeller of the constitutional eur might be produced by the duty. He knew of rency. These small notes were hardly known at the timo no tax laid upon property that could be made of this tax, which was so readily imposed, and therefore were
taxed lightest: now they are a general circulation, and the * This sum which amounted to one third of the amount of
most profitable part of a bank's issues; and, therefore, should the notes and disposits, was a general rule for regulating the be taxed highest, both on the principle of being most profit. quantity of cash kept to answer their eurrent demands. | able to the banks and most injurious to the community.
[H. OF R. Samuel W. Dana, James Davenport, John Dennis, I $800,000, and were not certain of any revenue Geo. Dent, Thomas Evans, Abiel Foster, Dwight Fos- to meet the expenditure. The license act, he ter, Jonathan Freeman, James Gillespie, Henry Glenn, believed, might produce from $50,000 to $60,000, Chauncey Goodrich, William Gordon, Roger Griswold, I and the stamp act from $100,000 to $150,000. John A. Hanna, Robert Goodloe Harper, Thomas | if they should be passed; but he considered this Hartley, William Hindman, Hezekiah L. Hosmer, las doubtful. But if these laws were passed. Samuel Lyman, James Machir, William Matthews, this tax on salt was necessary to keep up the Daniel Morgan, Lewis R. Morris, Harrison G. Otis, 1)
So equilibrium of taxation ;* for the stamp act Elisha R. Potter, John Read, John Rutledge, jun., 1 James Schureman, Samuel Sewall, William Shepard,
i would almost exclusively fall upon commerce Thomas Sinnickson. Samuel Sitoreaves, Jeremiah and large cities; this would principally be felt Smith, Nathaniel Smith, William Smith, (of Charles- by the agricultural part of the Union; and, if ton) George Thatcher, Richard Thomas, Mark Thom- it were not agreed to, they must have a land son, John E. Van Allen, Peleg Wadsworth, and John tax, Williams.
Mr. SHEPARD said, no tax would operate so Nays.- George Baer, jr., Abraham Baldwin, Da- equally as a salt tax, as every citizen must make vid Bard, Lemuel Benton, Thos. Blount, Nathan Bry- use of it in a smaller or larger quantity. an, Dempsey Burges, Samuel J. Cabell, Christopher Mr. GALLATIN opposed this tax on the same G. Champlin, Thomas Claiborne, Matthew Clay, John Tround which he heretofore opposed it, as opClopton, Thomas T. Davis, John Dawson, Lucas El
pressive to certain parts of the Union, and no mendorph, John Fowler, Albert Gallatin, Jonathan
way affecting others, and therefore wholly unN. Havens, David Holmes, Walter Jones, Edward Livingston, Matthew Locke, Matthew Lyon, Nathan
equal, and particularly as it bore heavy on the iel Macon, Blair McClenachan, Joseph McDowell,
poorer classes of society. He was against it John Milledge, Anthony New. John Nicholas, Josiah also, because it was not proposed that the Parker, Thompson J. Skinner, William Smith, (of amount of this tax should go towards a reducPinckney District,) Richard Sprigg, jr., Richard Stan tion of the public debt, but merely to encourford, Thomas Sumter, Abram Trigg, John Trigg, | age expense in the Government; for he believed Philip Van Cortlandt, Joseph B. Varnum, Abraham if they filled the Treasury with money, means Venable, and Robert Williams.
would be found to expend it. Indeed, if tho
Treasury had not been at present in rather a TUESDAY, July 4.
low state, he believed they should have gone Duty on Salt.
into most of the expensive measures proposed Mr. Allen called up the resolution he yester
to them this session. He allowed the tax would
be productive, as a tax upon bread, air, or any day laid upon the table, for laying an additional duty on salt.
necessary of life, must be productive. If this Mr. GALLATIN moved to postpone the con
tax, however, were to be agreed to, he should sideration of this resolution until the second
wish to make an amendment to the present Monday in November.
proposition. At present the drawback allowed Soine debate took place on this question; and,
to the New England States, on account of salt when it came to be taken, the House was equally
used in the fisheries, amounted to about $90,000 divided, there being 43 votes for the postpone
a year, though by the statements it appeared
there should only have been allowed $50,000. ment, and 43 against it. The SPEAKER decided against the postponement, and the resolution
To rectify this, he proposed the following prowas referred to a Committee of the Whole im
viso to be added to the resolution, viz: mediately.
Provided, That the allowance now given upon VesThe House accordingly resolved itself into a sels employed in the fisheries, shall not be increased. Committee of the Whole on this resolution; This amendment was opposed by Messrs.
HARPER, SEWALL, Dwa, and KITTERA, on the Mr. ALLEN moved the blank cents per bushel ground of its being an unfair way of introbe filled with twelve.
ducing the proposition, as no one expected it; Mr. SWANWICK wished the sum to be seven, they were not prepared to meet it; the correctVr. ALLEX consented to make it eight. ness of the statement was doubted; and, if it Mr. SITGREAVES hoped it would be twelve. were correct, it was said, the proper way of
The question was first taken upon twelve, and doing the business would not be to pass the Degatived, there being only 30 votes for it. It present law without a draw back, but to reduce Tas next taken upon eight, and carried, 47 to the former drawback and make it less on this 42, and then upon the resolution as amended, occasion. and carried by the same numbers.
The motion was supported by the mover, and The committee rose, and the House took up Messrs. VENABLE and LIVINGSTON; but, after the resolution.
some discussion, Mr. GALLATIN withdrew it, in After a few words from Mr. Lyon against the order to give gentlemen time to make themtar, and from Mr. WILLIAMS in favor of it, selves acquainted with the fact he had stated;
Mr. W. SMITA went at considerable length into a defence of the measure, in the course of *This equilibrium was soon destroyed. The merchants which, he said, they had already agreed upon soon got rid of the stamp tax; but the farmers still bear a appropriations to the amount of $700,000 or salt tax.