REPORT of the SECRETARY of the T R E A S U R Y to the HOUSF. of REPRESENTATIVES. Treasury Department, Jan. g, 1790. [continuation.] TH E Secretary thinks it advifeable, to hold out various pro portions, all of them compatible with the public interell, because it is, in his opinion, of the greatest consequence, that the debt should, with the consent of the creditors, be remoulded into fnch a shape, as will bring the expenditure of the nation to a le vel with its income. Till this ihall be accomplished, the finances of the United States will never wear a proper countenance. Ar rears of interest, continually accruing, will be as a continual mo nument, either of inability, or of ill faith ; and will not cease to have an evil influence on public credit. In nothing are appear ances of greater moment, than in whatever regards credit. Opin ion is the foul of it, and this is affected by appearances, as well as realities. By offering an option to the creditors,bet ween a num ber of plans, the change meditated will be more likely to be ac complished. Different tempers will be governed by different views of the fubjeft. But while the Secretary would endeavor to effett a change in the form of the debt, by new loans, in order to render it more susceptible of an adequate provision ; he would not think it pro per to aim at procuring the concurrence of the creditors by ope rating upon their neceflities. Hence whatever surplus of revenue might remain, after fatiafy ing the intereft'of the new loans, and the demand for the current service, ought to be divided among those creditors, if any, who nav not think fit to fubferibe to them. But for this purpose, under the circumstance of depending proportions, a temporary appropriation will be mofl advifeable, and the sum mufl be limit ed to four per cent, as the revenues will only be calculated to pro duce, in that proportion, to the entire debt. The Secretary confides for the success of the proportions, to be made, on the goodness of the reasons upon which they reft ; on the fairnefs of the equivalent to be offered in each cafe ; on the discernment of the creditors of their true interest ; and on their disposition to facilitate the arrangements of the government, and to render them fatisfa£lory to the community. The remaining part of the talk to be performed is, to take a view of the means of providing foe the debt, according to the mo dification of it, which is proposed. On this point the Secretary premises, that, in his opinion, the funds to be cftabliftied, ought, for the present, to be coufincd to the cxifting debt of the United States ; as well, because a progref live augmentation of the revenue will be moll convenient, as be cause the consent of the State creditors is necessary, to the assump tion contemplated ; and though the obtaining of that consent may be inferred with great alTurance, from their obvious interest to give it ; yet till it shall be obtained, an atkual provision for the debt, would be premature. Taxes could not, with propriety, be laid for an object, which depended on such a contingency. , All that ought now to be done, refpe&ing it, is, to put the mat ter in an effectual train for a future provision. For which pur pose, the Secretary will, in the course of this report, submit such propositions, as appear to him advifeable. The Secretary now proceeds to a consideration of the necclTary funds. It has been Hated that the debt of the United States consists of Dollars. Cents. The foreign debt, amounting, with ar rears of interest, to - 11,710.378 62 Ana the domestic debt amounting, with Jike arrears, computing to the end of the year 1790, to Making together, Dollars 54,124.464 56 The interefl on the domestic debt is computed to the end of fhis year, because the details of carrying any plan into execution, will exhaust the year. ' Dollar J. dents. The annual interest of the foreign debt has been Stated at And the interefl on the domcftic debt at four per cent, would amount to Making together, dollars, 2,239,163 09 Thus to pay the interest of the foreign debt, and to pay four per cent, on the whole of the domcftic debt, principal and inter est, forming a new capital, will require a yearly income of 2,239,163 dollars, 9 cents. The sum which, in the opinion of the Secretary, ought now to be provided in addition to what the current service will require. For, though the rate of interest, proposed by the third plan, ex ceeds four per cent, on the whole debt, and the annuities on the tontine will a]fo excecd four per cent, on the sums which may be fubferibed ; yet, as the a£lual provision for a part is, in the for mer caff, suspended ; as mcafures for reducing the debt, by pur chases, may be advantageoiifly purfucd, and as the payment of the deferred annuities will of courie be postponed, four per cent, on the whole, will be a fufficicnt provision. With regard to the nftalments of the foreign debt, these, iu the ©pinion of the Secretary, ought to be paid by new loans abroad. Could funds be conveniently spared, from other exigencies, for paying them, the United States could ill bear the drain of cash, at the present jun&ure, which the mcafure would be likely to oc casion. But to the sum which has been dated for payment of the intcreft, must be added a provision for the current iervwee. This the Se cretary eltimates at fix hundred thousand dollars ; making, with the amount of the intcreft, two millions, eight hundred and thir ty-nine thousand, one hundred and sixty-three dollars, and nine cents. This sum may, in the opinion of the Secretary, he obtained from the pre fen t duties on imports and tonnage, with the additions, which, without any ptfflible difodvantage either to trade,oj agricul ture, may be made on wines, spirits. including those diftillcd within the United States, teas and coffee. The Secretary conceives, that it will be found policy, to earrv the duties upon articles of this kind, as high as will be confident with the pra&icability of a fafe collection. This will lessen the nrceflity, both of having rccourfe to dircft taxation, and of ac cumulating duties where they would be more inconvenient to trade, and upon objc&s, which are more to be regarded as ne cellaries of life. That the articles which have been enumerated, will, better than mod others, bear high duties, can hardly be a question. They are all of them, in reality—luxuries—the greatest part of them fo reign luxuries ; some of them, in the excess in which they are used, pernicious luxuries. And there is, perhaps, none of them, which is not consumed in so great abundance, as may, justly, de nominate it, afource of national extravagance and impoveriflimenr The consumption of ardent spirits particularly, no doubt very much on account of their cheapness, is carried to an extreme, which is truly to be regretted, as well in regard to the health and the morals, as to the economy of the community. Should the increafeof duties tend to a decrease of the consump tion of those articles, the effect would be, in every refpeft desirable. The saving which it would occasion, would leave individuals more at their ease, and promote a more favorable balance of trade. As frr as this decrease might be applicableto distilled spirits, it would encourage the substitution of cyder and malt liquors, benefit agri culture, and open a new and productive source o! revenue. It is not however, probable, that this decrease would be in a degree, which would fruflrate the expected benefit to the revenue from raising the duties. Experience has shewn, that luxuries of every kind, lay the strongest hold on the attachments of mankind, which, especially when confirmed by habit, are not easily alienat ed from them. .