Expenditures.

State of the Finances.

The expenses of the year 1806, which must be defrayed out of those resources, are, like the revenue, either of a permanent nature or temporary.

$8,000,000

The permanent expenses are estimated at 11,450,000 dollars, and consist of the following items, viz: 1. The annual appropriation of eight millions of dollars for the payment of the principal and interest of the public debt, of which more than 4,000,000 dollars will be applicable to the discharge of the principal, and the residue to the payment of interest 2. For the civil department and all domestic expenses of a civil nature, including invalid pensions, the lighthouse and mint establishments, the expenses of surveying public lands, the third instalment of the loan due to Maryland, and a sum of 150,000 dollars, to meet such miscellaneous claims or grants as may be allowed by Congress

3. For expenses incident to the inter-
course with foreign nations, including
the permanent appropriations for Al-
giers

4. For the Military and Indian depart-
ments, including the permanent appro-
priations for certain Indian tribes
5. For the Naval establishment, (exclu-
sively of deficiencies for the service of
the years 1804 and 1805, which are
estimated at $600,000)

1,150,000

200,000

1,030,000

1,070,000 $11,450,000

4,000,000 $15,450,000

day of June, 1805, was 990,000 dollars. This apparent
product will, it is true, be diminished by subsequent ex-
portations; but it is believed, from a view of the value
of the goods imported in 1803 and 1804, which are
charged with that duty, that the fund may be estimated
as producing nearly 900,000 dollars a year. If that
estimate be correct, the fund will ultimately produce,
during the one year and nine months commencing on
the 1st day of July, 1804, and ending on the 31st day
of March, 1806
- $1,575,000
The expenses heretofore charged on that
fund, have been, viz:

Paid in 1804, to the Navy Department, un-
der the act constituting the
fund

Paid in 1805, to the said De-
partment, by virtue of the
second section of the act of
25th January, 1805

Making, altogether,

$525,000

590,000

1,115,000

460,000

It appears from the preceding statement, that the permanent revenues of the United States will, during the ensuing year, exceed the' permanent expenditures more than one million of dollars; and that the moneys already on hand, together with the temporary resources of the year, will, after leaving the sum which it is always necessary to keep in the Treasury, be suf-effected at par, by the Bank of the United States. ficient to discharge the Navy deficiencies, and the whole amount of the claims assumed by the convention with France, the large receipts of last year rendering it unnecesary to recur for that object to the loan authorized by the act of the 10th of November, 1803. Mediterranean Fund.

As the exportation of the specie necessary to discharge the last-mentioned instalment, would have been sensibly felt, it was found eligible to pay it in London, in conformity with the authority given by the act of the 3d of March, 1805; and the operation was

Evidences of Public Debt.

deferred stock, a charge which com-
menced only in the year 1801, and was,
therefore, in addition to the annual
sum wanted before that year, for the
payment of interest on the public debt.

3. More than one-third, and which
may be considered as the surplus rev-
enue of the United States, during that
period, has been applird toward the re-
imbursement and extinguishment of
the debt, viz:

On account of the principal of the pub-
lic debt proper
$16,317,663 92
1,494,001 78 In payment of debts

- $22,112,792 27

In order to give a more general and concise view of the receipts and expenditures of the United States, during the four years, commencing on the 1st day of April, 1801, and ending on the 31st day of March, 1805, than can be derived from the annual printed accounts, a statement, marked H, and several explanatory statements, marked H 1, to H 8, have been added to those which usually accompany this report.

From those it appears, that a sum of fifty millions six hundred and sixty-seven thousand four hundred and sixty-seven dollars and four cents, has been paid into the Treasury during that period, viz: From duties on tonnage, and on the

contracted before
the 1st day of April,
1801, and arising
under the British
Treaty and under
the French Con-
vention of the 30th'
September, 1800 -

2,963,782 65

19,281,446 57 $49,665,527 56

It is sufficiently evident, that, while one-third of the national revenue is necessarily absorbed by the payment of interest, a persevering application of the resources afforded by seasons of peace and prosperity, to the discharge of the principal, in the manner directed by the Legislature, is the only effectual mode by which the United States can ultimately obtain the full command of their revenue, and the free disposal of all their

importation of foreign merchandise $45,174,837 22 resources. Every year produces a diminution of interest,

From all other sources, (including $1,596,171 43 cents, arising from the sales of Bank shares and of public vessels)

5,492,629 82

50,667,467 04

and a positive increase of revenue. Four years more will be sufficient to discharge, (in addition to the annual reimbursements on the 6 per cent. and deferred stocks,) the remainder of the Dutch debt, and the whole of the eight per cent., Navy six per cent., five and a half per cent., and four and a half per cent. stocks. As the portion of the public debt which shall then remain unpaid, will consist of the six per cent. deferred, and Louisiana stocks, neither of which can be reimbursed, except at the periods, and in the proportions fixed by contract, and of the three per cent. stock, which its low rate of interest will render it ineligible to discharge at its nominal value, the rapidity of the reduction of the the contracts, will, after the year 1809, depend on the debt, beyond the annual reimbursements permitted by price at which purchases may be effected. And, should circumstances render it eligible, a considerable portion of the revenue now appropriated for that purpose, may then, in conformity with existing provisions, be applied to other objects.

All which is respectfully submitted.

ALBERT GALLATIN, Secretary of the Treasury. TREASURY DEPARTMENT, Dec. 9, 1805.

EVIDENCES OF PUBLIC DEBT.

[Communicated to the House, Dec. 28, 1805.]

TREASURY DEPARTMENT, Dec. 28, 1805. SIR: I have the honor to enclose the copy of the extract of a letter pointing out certain abuses, which are said to arise from the operation of the

Evidences of Public Debt.

law authorizing the receipt of evidences of the public debt, in payment for the lands of the United States, passed on the 3d day of March, seventeen hundred and ninety-seven.

Although the letter having been received only a few days ago, it has not yet been ascertained whether the facts alluded to are, in this instance, truly stated, there is no doubt that such abuses may take place, and that, whilst the law continues in force, it will be difficult to prevent them.

stock, calculated on that principle, and on a supposition that a six per cent. stock is at par. for the first day of every quarter from the 1st of January, 1806, to the 1st of January, 1809. It must, however, be observed, that, from the first day, till within fourteen days of the end of each quarter, the stock will progress a little in value, as the time of receiving the dividend approaches. But on that account, and because the variations in the prices of stock do not ascend to such minute fractions as are exhibited in the table, it may be more Indeed, it cannot be doubted that, with very simple to fix the limitation by the gross amount few exceptions, the law is of no utility to actual of the two per cent. annuity which may, at the purchasers. So far as relates to the reduction of time, be still demandable, without making any dethe public debt, the act is useless, since the annual duction for the discount. The commissioners appropriation of eight millions of dollars has been would, on that principle, be authorized to give no made; and it may, on the contrary, by creating a competition in the market, impede the object of the year 1806, no more than 105 per cent dumore that 106 per cent. during the first quarter whenever it should be thought proper to apply a ring the ensuing quarter, and so on, diminishing part of the appropriation to purchases of the debt. half per cent each quarter, so as to give no more To this may be added, that the uncertainty result- than 100 per cent. during the last quarter of the ing from the provision of the payments in specie, year 1808, and paying at par, according to conwhich might otherwise be relied upon, deranges tract, the residue of the unpurchased principal, on the general operations of the Treasury. the 1st of January, 1809. There are two other limitations, in the powers of the commissioners to purchase stock, which may require some modifications. By the first, no purchase can be made, except during the first thirty days of each quarter a provision, the object of which I cannot perceive; as the situation of the Treasury and the price of stock may often render another more eligible. The other directs the purchases to be made by a known agent, and by open purchase, or by receiving sealed proposals; and, although it may be more eligible for the commissioners themselves to make the purchase in that way, because it will prevent any improper imputation attaching to their conduct, it is not less true that that mode must necessarily raise the price of stocks, and prevent any purchases on favorable terms.

I also beg leave to observe, that, by the act of the 8th of May, 1792, and all the subsequent acts contain a similar provision, the Commissioners of the Sinking Fund are authorized to purchase the debt of the United States at its market price, if not exceeding the par or true value thereof.

This last limitation does not seem sufficiently explicit; but the construction heretofore adopted, and which will be, of course, adhered to, unless altered by an explanatory act, is, that, by true value, is meant the nominal value or amount of the stock. It follows, that, on the one hand, the Commissioners may give one hundred dollars for every nominal hundred dollars of the three per cent. stock, provided they shall not give more than the market price; whilst, on the other hand, they are, in fact, precluded from making any purchases of the eight per cent. stock, as its market must necessarily exceed its nominal value.

Permit me, therefore, respectfully to submit the propriety of fixing, absolutely, by law, the price which the Commissioners may give for stock. That for the six and deferred stock may remain as it now stands, that is to say, not to exceed the nominal value of its unredeemed amount; the limitation in relation to the three per cent. stock may be easily fixed, at any rate which Congress may think proper.

That for the eight per cent. stock is more difficult to fix, because its sinks, every quarter, in value, and will continue so till the first day of January, 1809, when it becomes redeemable, and therefore, equal to its nominal value. It may, in the mean while, be considered as consisting, first, of a six per cent. stock, payable at the time abovementioned, and worth par; secondly, of an annuity of two per cent. a year, (or rather at the rate of half per cent. quarterly) which will cease, also, on the first of January, one thousand eight hundred, and when the stock will be paid off.

The annexed table shows the true value of the

Although there are yet considerable parts of the public debt which may be reimbursed, as purchases may, however, be found, under certain circumstances, more advantageous, to the United States, I have thought it my duty to lay these observations before the Committee of Ways and Means. But I beg, at the same, time to be indulged in expressing my opinion, that a sinking fund which acts by purchase is better calculated to raise the prices of stock, and as an engine to favor loans and an increase of debt, than for the purpose of redeeming it on reasonable terms. And as the a powerful, perhaps insuperable obstacle, to the nature of the existing species of stocks will offer whole redemption, within the time contemplated by the Legislature, I intend, in a subsequent communication, to submit to the consideration of the committee, a plan for the conversion of the old six deferred and three per cent. stocks into a six per cent. stock, which may be redeemed within the expected period. I have the honor to be, &c. ALBERT GALLATIN. To the Hon. JOHN RANDOLPH, Chairman of the Committee of Ways and Means.

Sinking Fund.

$105 46
103 74
101 93
100 00

An estimate exhibiting the true value of one hundred
dollars eight per cent. stock, redeemable after the
year 1808, on the supposition of six per cent stock
being at par, for the first day of each quarter, from
the 1st January, 1806, to the 1st January, 1809.
In the year of 1806, January 1
In the year of 1807, January 1
In the year of 1808, January 1
In the year of 1809, January 1
In the year of 1806, April 1
In the year of 1807, April 1
In the year of 1808, April
In the year of 1809, April 1.
In the year of 1806, July 1
In the year of 1807, July 1-
. In the year of 1808, July 1
In the year of 1809, July 1.
In the year of 1806, October 1
In the year of 1807, October 1
In the year of 1808, October 1
In the year of 1809, October 1.

Extract of a letter, &c.

103 30

101 46

104 61

The Secretary of the Treasury respectfully reports to the Commissioners of the Sinking Fund: That the balance remaining unexpended at the close of the year 1803, and applicable to payments falling due after that year, which balance, as appears by the statement B, annexed to the last annual report, amounted to one million three hundred and fortynine thousand one hundred and thirty-six dollars and fifty one cents - $1,349,136 51 105 04 Together with the disbursements made during the year 1804 out of the Treasury, on account of the principal and interest of the public debt, which disbursements, as appears by the statement C, annexed to the last annual report, amounted to eight millions two hundred and fifty-nine thousand eight hundred and forty-five dollars and fifty-five cents And with a further sum arising from profit on the remittances from America to Europe, purchased in the year 1804, which profits, as appears by the statement D, annexed to the last annual report, amounted to forty-five thousand forty-nine dollars and twenty-five cents

102 85
100 98

104 18
102 39
100 49

"The clerks in that office are engaged in what they call the stock business. They get stock transferred, in payment for the lands, of such people as will pay them their money without taking an office receipt. Now, the grievance that I would complain of is, that it is almost impossible to get business done in that office, unless the person applying will consent to let them have their money that they may pay, in stock. As for my part, I had rather do my own business. When a man goes into the office, one of the clerks addresses him, that he cannot have his business done, unless he waits two or three days; and recommends to him to leave his money with another one, which I suppose to be a clerk also, who offers to do the business for him, provided he will let him transfer stock for his payment; and thus they worry many people out of their money. As to this stock business, I know nothing about it; and as it is no advantage to me, I had rather pay my money and get my receipt, without further trouble."

SINKING FUND.

[Communicated to the Senate, Feb. 5, 1806.] The Commissioners of the Sinking Fund respectfully report to Congress as follows:

And amounting, altogether, to nine mil

lions six hundred and fifty-four thou-
sand and thirty-one dollars and thirty-
one cents

8,259,846 55

45,049 25

9,654,031 31

2. The sums actually applied, during
the same year, to the payment of the
principal and interest of the public
debt, as ascertained by accounts ren-
dered to the Treasury Department,
amount, as will appear by the state-
ment A, to seven millions two hun-
dred and fifteen thousand six hundred
and nine dollars and sixty-six cents:
1st. Paid in reimbursement of the
principal of the debt 3,207,587 65
2d. Paid on account of
the interest and charges
on the same

That the measures which have been authorized
by the Board, subsequent to their report of 5th of
February, 1805, so far as the same have been com-
pleted, are fully detailed in the report of the Sec-3.
retary of the Treasury to this Board, dated the
fourth day of the present month, and in the state-
ments therein referred to, which are herewith
transmitted, and prayed to be received as part of
this report.

G. CLINTON, President of the Senate.
J. MARSHALL, Chief Justice.

JAMES MADISON, Secretary of State.
A. GALLATIN, Secretary of Treasury.
J. BRECKENRIDGE, Attorney Gen'ral.
WASHINGTON, Feb. 5, 1806.

9th CoN.-37

4,008,022 01

Representatives of the United States: The enclosed documents relating to my Mes87,434 22 sage of the 6th instant, not being ready at that date, I thought it better not to detain the Message, but to communicate these papers afterwards, as