earlier than you did; else I should have found an opportunity, after your adjournment, to converse with you on the subjects committed to me by the House of Representatives. It is certainly important, that a plan as complete, and as unexceptionable as possible, should be matured by the next meeting of Congress; and, for this purpose, it could not but be useful, that there should be a comparison and concentration of ideas, of those whose duty leads. them to a contemplation of the subject.

"As I lost the opportunity of a personal communication, may I ask of your friendship, to put to paper, and send me, your thoughts on such objects as may have occurred to you, for an addition to our revenue, and also as to any modifications of the public debt, which could be made consistent with good faith-the interest of the Public and of the Creditors.

"In my opinion, in considering plans for the increase of our revenue, the difficulty lies, not so much in the want of objects, as in the prejudice which may be feared with regard to almost every object. The question is very much, what further taxes will be least unpopular? Adieu, my Dear Sir, your affectionate and obedient-"

*

Madison replied, "Dear Sir, I was too much indisposed, for some time after the receipt of your favor, of the twelfth of October, to comply with the request in it; and since my arrival here and recovery, I have till now been without a conveyance to the Post Office.

"The supplemental funds which at present occur to me as on the whole most eligible are: First, An Excise on home DISTILLERIES. If the tax can be regulated by the size of the Still, it will shun every objection that renders excises unpopular or vexatious. Such an experiment was

* Orange, Virginia, Nov. 19, 1789.

made in Scotland; and as a Scotch tax, I have not under stood that the mode was disapproved. The complaint against it was founded on a comparison with the different mode established in the other part of the kingdom, by which the burden was rendered disproportionate. Second, An augmentation of the duties on spirituous liquors imported. This will not only be compatible with the former, but in a manner required by it. Third, A LAND TAX. This seems to be recommended by its simplicity, its certainty, its equity, and the cheapness of collecting it. It may be well also for the General Government to espouse this object before a preoccupancy by the States becomes an impediment. It is an essential branch of National Revenue, and when once in the hands of the National Government, the States will, of course, turn their attention to those miscellaneous objects, which can be more easily managed by them, than by Congress, and by which they can, as they like, equalize the burden on their respective citizens.

"Some difficulty, may, perhaps, arise from the different rules of assessment in the different States, but it will only require an adoption of their diversities, until the way shall be prepared for uniformity. Fourth, A STAMP TAX on proceedings in the Federal Courts, as soon as experience shall have supplied the prerequisite information, and as far as will make the Establishment support itself.

"I do not add, a General Stamp Tax, because, with some, it would be obnoxious to prejudices not yet worn out, because it could not be so formed as to fall in due proportion on the States, without more information than can be speedily obtained, and because it would not for some time be productive in the State Courts, unless extended to suits for antecedent debts, etc., in which case

the debtors on whom the tax would fall, would make it a fresh topic of clamor.

"The modification of the public debt, is a subject on which I ought perhaps to be silent, having not enough revolved it to form any precise ideas. I take it to be the general expectation, that the foreign part of the debt is to be put on the most satisfactory footing, and it will, no doubt, equally gratify the public wish, if it can by that means be turned into a debt, bearing a reduced interest. The domestic part, is well known to be viewed in different lights by different classes of people. It might be a soothing circumstance to those least favorably disposed, if by some operation, the debt could be lessened by purchases made on public account; and particularly, if any impression could be made on it, by means of the Western Lands. This last, is a fund, which, though overrated by many, is, I think, capable of aiding the redemption of the capital of the debt.

"A further reason for keeping the lands at market, is that, if the appetite for them be not regularly fed, it may produce licentious settlements, by which the value of the property will not only be lost, but the authority of the laws impaired.

66

"I consider it as very desirable, that the provision to be made, should be such as will put the debt in a manifest course of extinguishment. There are respectable opinions, I know, in favor of prolonging, if not perpetuating it. But without entering into the general reasonings on that subject, there are two considerations which give a peculiarity to the case of the United States-one, that such a policy is disrelished to a degree, that will render heavier burdens for discharging the debt more acceptable than lighter ones, not having that for their object. The other, that the debt, however modified, must, as soon as the interest is

provided for, or the permanent views of the Government ascertained, slide into the hands of foreigners; as they have more money than the Americans, and less productive ways of laying it out, they can and will pretty generally buy out the American.

"I need not apprise you that some of the ideas I have hazarded may proceed not only from an inaccurate view of the subject, but from a mistake of local for general sentiments with regard to it.

"The less deserving, however, I may think them of being communicated to you, the more they will prove by their being so, my unwillingness to disobey your commands. With affectionate regards, I am, my dear sir, friend and servant."

your

A few days after, Hamilton addressed inquiries to Fitzsimmons,* a leading merchant, as to the modes of drawing the public revenue from the different ports of the United States. He intimated his desire to embrace the pilots in a national system-requested his “ideas also" respecting new objects of revenue. "With regard to feeling the public pulse about the debt," he observes, "I have several times had an inclination to the measure; but this inclination has given place to the reflection, that bringing on a discussion might be as likely to fix prejudices as to produce good, and that it may be safest to trust to the effect of the Legislative sanction to good measures, and to the reasons that will accompany them at the time."

*November 27, 1789.

CHAPTER LVIII.

THE ferments produced by the discussion of the Constitution, were subsiding. The Presidency of Washington was a confidence, and a consolation-still it was the quiet of expectation and of hope. As, mingling with all the great necessities, public and private, the restoration of the National credit was the great, the almost absorbing thought; and hence all eyes were directed to the financial policy which should govern. The great administrative crisis,

which was to determine the fate and character of the new Government, had been reached.

On the seventh of January, Congress were again assembled at the city of New York. The following day, the Speaker and Members of the House of Representatives attended in the Senate Chamber, to receive the President, accompanied by the Heads of Departments.

In a short speech, after congratulating them on the recent accession of North Carolina to the Union; on the rising credit, and respectability of the country; the general and increasing good will towards the Government of the Union; the concord, peace, and plenty, so eminently auspicious to the national prosperity, their attention was directed to several leading subjects of Legislation.

Among these, were provisions for the common defence, by the proper establishment of a regular force-by the VOL. IV.-5