looked with astonishment at the magic influence which rendered a nation's debt the greatest instrument of its wealth; and were taught to distrust the author of the public prosperity, because they were unable to understand the means, by which it was accomplished.*

George Cabot to Goodhue, 1790. "I never considered the National Government as being more than half established by the nominal acceptance of the form. To take from our Newspapers the metaphor they have used, it was an arch, but to me, the key-stone was wanting. The actual exercise of certain powers to the exclusion of the States, would be finishing the work. Till this takes place, I cannot think the country completely safe from the danger of disunion; and consequently, anarchy and wretchedness. I am no holder of public securities of any kind; and never would be interested in any of our funds, on any terms; but I consider the Assumption of all our State debts, as so essential, that as an individual I would rather pay a fourfold interest through the National Government, than a half per cent. through the medium of the State, because the former may give us protection, the latter cannot.”

CHAPTER LXII.

IT has been seen, that the friends of Hamilton urged a temporary act, imposing a general rate of duties, instead of the Impost bill, introduced by Madison.

In the performance of the official duties imposed upon the Secretary of the Treasury by that bill, and by the laws for the collection of duties, for the registration of vessels, and for the regulation of the coasting trade, he found these acts extremely imperfect, involving much uncertainty, alike embarrassing to the collectors of the revenue, and to the public.

With a view to remedy these defects, he was directed, on the nineteenth of January, seventeen hundred and ninety, to report to the House such information as he had obtained respecting the difficulties which had arisen in the execution of these laws. He made a full Report on the twenty-third of April following.

Anxious, as he must have been, in the impoverished condition of the Treasury, to fill its coffers, he submitted to Congress, whether they ought not to waive all the duties which had accrued between the time when the Impost act took effect, and when the organization of the customs was completed.

This proposal was followed by suggestions, having in view, among other objects, the protection of the man

ufacture of steel -the promotion of the fisheries—the extension of the East India trade-the exemption from duty of native commodities exported from the United States and brought back-also of ship stores, and of the furniture, clothing, and professional apparatus of persons arriving from abroad-the correction of an error in the former act, by which hemp, intended to be charged, was free; and a provision authorizing entries for exportation, the omission of which was justly complained of, as "a great hardship, and contrary to the prevailing usage of commercial nations."

In relation to the act imposing duties on tonnage, its conflicting provisions "are pointed out, the proper construction stated, a restitution of certain sums paid" in consequence of a misapprehension of a new law" urged, not only as equitable, but calculated to give a favorable impression of the liberality of the Government;" and the entire abrogation of all tonnage duties upon entries from district to district of the United States, except where freight had been taken in at one district for another, and in such case, half tonnage on vessels registered, but not licensed, is advised.

In respect to the act for the regulation of the collection of duties on tonnage and imports, he reserved his observations, as to the arrangement of the Districts, to be communicated to a special committee, the result of whose consultations is to be seen in the amendatory law, soon after passed.

66

To guard against frauds, while he observed, that Justice to the body of the merchants of the United States demands an acknowledgment that they have very generally manifested a disposition to conform to the national laws, which does them honor, and authorizes confidence in their probity," he proposed, in fulfilment of

this act, which contemplated, but gave no authority to provide them, a proper "establishment of revenue cutters" on the coast, giving the details of the number, size, armament, and equipment of them, with an estimate of the expense. To procure proper officers, he advised, that "a liberal compensation be given," and that they should be commissioned, "as officers of the Navy, to induce fit men more readily to engage, and attach them to their duty by a nicer sense of honor." He subsequently issued circulars to the collectors, prescribing forms for the payment of this service-the component parts and, rates of rations to be allowed, with the commutation-authority for directing their movements, and for their repairs.

This proposition was followed by numerous and very important suggestions, so to vary the provisions of the existing law, as to secure the collection of the revenue; and, at the same time, relieve commerce of many unnecessary delays, charges, and embarrassments; and the providing for the revenue officers, "competent allowances." Changes were proposed in the provisions as to drawbacks, to prevent loose and constructive swearing, and to relieve the exporter from the too great discretion of the Custom House officers as to the bonds to be given, with other measures embraced in the draft of a bill, previously submitted by him. These were incorporated in the act, subsequently passed, for "the Collection of duties," the provisions of which bear testimony to the sagacity and large commercial knowledge of its author.

Gross misconstructions of the views of the Secretary of the Treasury on a very important point in his policy, render it proper to introduce his remarks on that ection of the act, which provided for the receipt of the duties in gold and silver coin only. He observed, in reference to the instructions he had given on this subject: VOL. IV.-11

"The Secretary has considered this provision as having for object, the exclusion of payments in the paper emissions of the particular States, and the securing the immediate or ultimate collection of the duties in specie, as intended to prohibit to individuals,* the right of paying in any thing except gold or silver coin; but not to hinder the Treasury from making such arrangements, as its exigencies, the speedy command of the public resources, and the convenience of the community might dictate; those arrangements being compatible with the eventual receipt of the duties in specie. For instance, the Secretary did not imagine that the provision ought to be so understood as to prevent, if necessary, an anticipation of the duties by Treasury drafts, receivable at the several custom houses. And, if it ought not to be understood in this sense, it appeared to him, that the principle of a different construction would exter.d to the permitting the receipt of the notes of public banks issued on a specie fund. Unless it can be supposed, that the exchanging of specie, after it had been received for bank notes to be remitted to the Treasury, is also interdicted; it seems difficult to conclude that the receipt of them, in the first instance, is forbidden. Such were the reflections of the Secretary with regard to the authority to permit bank notes to be taken in payment of the duties. The expediency of doing it appeared to him to be still less questionable. The extension of their circulation by the measure, he said, is calculated to increase both the ability and the inclination of the banks to aid the Government. It also accelerates the command of the product of the revenues for the pub

*

'May 30th, 1789. It had been proposed in New York to make the impost payable in the specie securities of that State; and Hamilton was requested by a leading Federalist of North Carolina, to make the paper emissions of that State, receivable into the National Treasury.