Report of the Secretary of State to the President of the United States, respecting the depredations committed on the commerce of the United States:

Mr. Giles moved that the above papers should be referred to a select committee, to print such as would be useful to the House.

This question was negatived—50 to 46, and a motion carried for printing the whole.

Day of Adjournment.

Mr. Giles called up the motion which had some days ago been laid on the table respecting an adjournment.

Mr. Gallatin wished to modify his motion, by making the proposed day of adjournment the 27th instead of the 24th instant.

Mr. Sitgreaves moved for the yeas and nays on the question.

Mr. Macon moved to make the day the 28th, which was consented to by the mover.

Mr. Dent proposed to make it the 30th.

The question was taken on adjourning on the 30th, and negatived—there being only 28 votes in favor of it.

The question on the resolution for the 28th was carried—yeas 51, nays 47.

Saturday, June 24.

Protection of Trade.

NAVAL ARMAMENT.

The bill for providing for the protection of the commerce of the United States was read a third time, and the blank for filling up the number of men to be employed in the cutters, was filled up with thirty; on the question being about to be put on the passing of the bill,

Mr. Nicholas said some statements had been received from the War Department, and ordered to be printed. He had not seen a copy of them, but was informed there were yet wanting $197,000 to complete the frigates. He wished information on the subject.

Mr. Parker read an extract from the account which had been printed.

Mr. Nicholas wished to know how it happened that in four months so great a mistake could have occurred as to the expense of finishing these vessels. When the last appropriation of $170,000 was made, they were told that sum would be sufficient to make them fit to receive the men on board, but now they were called upon for $197,000 more. He thought this matter ought not to pass over without inquiry, as he did not like to be drawn from step to step to do what, if the whole matter had been seen at first, they might not have consented to. He trusted this was not intentionally done, but he owned it looked very suspicious.

Mr. Parker believed the estimate of last session was only to make the vessels ready to receive the guns on board, and did not include the guns.

Mr. Gallatin said, as he meant to vote against the passage of the bill, he would briefly state his reasons for doing so. He knew only of two arguments in favor of the bill; the first, that it was necessary during a time of peace to lay the foundation of a navy; the other was, that, the frigates being built, it would be proper to man them. As to the propriety of having a navy, he did not mean to go generally into the subject, but he would make a few observations as to our situation for engaging in an establishment of this kind. Suppose that navies were necessary in European nations, to increase their power or to protect their commerce, these considerations did not apply to our present circumstances. In order to prove this, it was only necessary to take a view of our revenue, and the expense of a fleet.

The amount of revenue from the 1st of April, 1796, to the 1st of April, 1797, received into the Treasury, was $7,400,000—a sum which by far exceeded that of any former year; and he did not think that the permanent revenue of the United States could be well extended beyond that sum. For instance, he did not think that nine millions could be raised from the people without oppression. Indeed, by the best calculations on the quantity of circulating medium in the country, it was not allowed to exceed eight millions: and he did not believe that any nation could raise a larger sum in taxes than was equal to the amount of their circulating specie.

This statement showed, Mr. G. said, that these frigates had cost about £2,000 sterling a gun, though the common calculation in Great Britain was only half that sum. If, from building the frigates, they turned to the expense of manning them, the same conclusion would be drawn. They found that the pay of an able-bodied seaman in the British navy had lately been raised from 26s. 6d. to 30s. sterling a month, which was $6 66-2/3; but, by the present law, $15,000 a month were allowed for the pay of the petty officers, midshipmen, seamen, ordinary seamen, and marines, which averaged from 16 to 17 dollars a man.

When he heard gentlemen stating the advantages of the naval strength of Denmark and Sweden to those countries, he could not agree with them altogether, though he agreed they had some weight; but it was well known that the Grand Navy of Portugal had no weight whatever in the scale of the large navies of Europe; it did not even enable her to protect her trade: for, if either France or Great Britain had the superiority in the Mediterranean, she was under their control. He believed Denmark and Sweden had thirty sail of the line each, and he wished gentlemen to calculate how much it would cost us to have such a navy. A fleet of a few vessels would not then be able to afford protection to our trade; and it was wholly out of our power to have a fleet equal to that of Denmark or Sweden.

Mr. Swanwick believed the expense of these frigates had been much greater than any future ones would be. When they were told they had cost £2,000 sterling a gun, it was evident there must have been great extravagance in the expense, as merchant vessels might be built as cheaply in this country as in any other. He supposed the extra expense had been owing to the want of some regular establishment to overlook the business, and because it had been undertaken at a time when other nations were at war, and of course when materials were very high. Sixteen thousand dollars worth of hemp had indeed been burnt by accident at Boston. As to the terms of seamen, though they might at first be high, when the service was known he doubted not they would fall.

Mr. J. Williams said, he had always opposed the establishment of a navy, and was the question now whether or not we should commence a navy he should certainly be against it; but, as the frigates were so far advanced, he thought they ought to finish them, especially when they considered the present critical situation of our affairs; for, if a general peace did not take place in Europe, the war would probably become a maritime war, and we might be involved in it. But he was still of opinion that if we must go into an expensive naval establishment for the protection of our commerce, we had better have none. But, say gentlemen, where will you find revenue? He believed, though we had no armed force, a considerable commerce would still be carried on,[18] and those who declined it would turn their attention to agriculture and manufactures, from which any deficiency of revenue would readily be supplied.

It was true, as had been stated, that they had been called upon from time to time for additional sums to complete these frigates, and he knew not when these calls would end.

Mr. Giles was obliged to the gentleman last up for his speech against the present bill, though he meant to vote for it; he would rather, however, that he had spoken in favor, and voted against the bill. Mr. G. said he should vote against the passing of the bill, and for the reasons assigned by that gentleman. He thought a navy would be a great evil for this country. Our great interests lay in the soil; and if ever the vitals of the country were to be drawn together for the purpose of protecting our commerce on the sea, he should greatly lament it. He believed the despotism of nations kept pace with the ratio of expense of their Governments. He was sorry to say that he was more and more convinced that it was the constant aim of some gentlemen in that House to increase the expenses of our Government. The propriety of establishing a navy had scarcely ever been seriously considered; it was first begun under an alarm, and it had been continually carried on by the same means.

Mr. Harper said gentlemen seem to abandon their objections to this bill by admitting that there was no probability it would not pass. But why? Because a majority of the House either think the measure is proper in itself, or from the particular circumstances of this country. It was surely a singular instance of modesty in gentlemen, after this concession, to argue against the passing of the bill.

Mr. H. did not admit that these frigates were commenced from an idea of laying the foundation of a large Navy Establishment, but from particular circumstances; and, said he, shall we, at a time when we are threatened with danger, abandon them? He trusted not; such conduct would be absurd in the extreme, and imply a character of imbecility which he hoped their councils would never deserve.

Mr. Allen said, he had some objection to the passing of the bill, but his objections were to the amendments which had been introduced into it, yet he did not know but he should vote for it. He thought there was a provision in the bill which went to prostrate this Government. He alluded to that part of it which directed the manner in which this force should be used. He considered this as a violation of the constitution, besides carrying upon the face of it an idea that one of the branches of this Government could not be trusted with the exercise of its power. Was it possible, he asked, for a Government to exist, when this confidence was refused to one of its branches? What were the people of the United States, and abroad, to think of this? Would not the people of this country think it their duty to destroy a power which could not be trusted; and would not foreigners despise it? It seemed as if this were the intention of gentlemen.

Mr. A. also objected to the clause limiting the duration of this bill; since this went to say that they not only distrusted the other branches of the Government, but themselves. A thing which must in its nature be perpetual, was there limited. He deprecated the idea of expense being an objection to this measure. Our emancipation from the chains of Great Britain, he said, was attended with a great expense; but was it not believed that the liberty and independence of this country were of superior value to money? He trusted they were. He could only suppose, therefore, that men who objected against the expense, must themselves be sordid and avaricious. If these frigates had been provided four years ago, he believed all our present difficulties would have been prevented, and a sum vastly less than that of which we had been robbed would have done the business. Mr. A. denied that ships of war could now be built in England for £1,000 a gun; that was formerly the price, but they now cost £1,500 per gun.

Mr. Nicholas had always been of opinion, that the expense of these frigates was a useless expense; he did not believe a case could happen, except within our own jurisdiction, where these vessels could be of advantage to us; but notwithstanding this was his opinion, he should vote for the passing of this bill, because he saw the sentiments of that House and the public were strongly in its favor, from a persuasion that the measure was necessary, and that the thing would be a continual topic of dispute until it was carried into effect.

He was willing, therefore, to let the vessels go to sea, believing that nothing short of actual experience would convince the supporters of this measure that it was useless, expensive, and injurious; and hoping that by one year's experience of the plaything, finding that money was of greater value than the frigates, all parties would concur in relinquishing it.

The question was then taken on the passing of the bill, and decided in the affirmative—yeas 78, nays 25, as follows:

The title was altered from "An act for the protection of the trade of the United States," to "An act providing a Naval Armament."

Monday, June 26.

Lewis R. Morris, from Vermont, and Lemuel Benton, from South Carolina, appeared, produced their credentials, were qualified, and took their seats.

Stamp duties: Naturalization certificates: Lawyer's licenses: Conveyances.

The House went into a Committee of the Whole on the bill for laying duties on stamped vellum, parchment, and paper; when, the first section being under consideration,

Mr. Kittera moved to add, "any certificates of naturalization —— dollars," as he thought foreigners, who were admitted to all the rights of citizens under this Government, could not be against paying a small tax on their admission to this right.

Mr. Macon thought this tax would fall very heavy upon persons who came into this country to live by their labor—many of whom were not able to pay their passage, but were indented by those who brought them for a number of years; and who, if this tax were paid, would have so much longer to serve.

Mr. Brooks did not see this objection, as such persons might labor all their lives without becoming naturalized.

Mr. Gordon said, that by the naturalization act, no foreigner could be admitted to the rights of a citizen until he had been five years in the country, and therefore the objections of the gentleman from North Carolina could not have any weight.

The amendment was carried.

Mr. Swanwick moved to strike out five dollars, and insert ten, for licenses to practise as a counsellor, attorney, &c. He thought, if these gentlemen were taxed at all, ten dollars would be as low a sum as they could well fix upon for the purpose.

Mr. Varnum thought the tax should be much higher, if imposed at all. He spoke of the high tax laid upon the professors of the law in Massachusetts.

The amendment was carried, there being 53 in favor of it.

Mr. Cochran wished the tax to extend to lawyers who practised in the State Courts, as well as to those who practised in the Courts of the United States.

Mr. Nicholas objected to this proposition. The lawyers, in some of the States, were already very highly taxed; besides, he doubted the right of the United States to tax the lawyers of the State Courts, as they were necessary in the State Governments.

Mr. Swanwick did not expect any objection could have been made to a tax so reasonable, especially when the bill proposed to tax merchants so heavily; they would not be able to turn themselves without a stamp, and surely the lucrative profession of the law could not think much of paying this low tax. It was said, indeed, that the merchant did not ultimately pay the duty, but the consumer; and he doubted not the lawyers would not fail to find out a way of making their clients pay the duty.

Mr. Dennis objected to this tax on the same ground with the gentleman from Virginia. If a tax of this kind, he said, were laid upon the lawyers of the State Courts, it might be extended to any other officer of the Government, and thereby annihilate the State Governments.

Mr. Livingston was in favor of the amendment, because he thought the State lawyers a fair object of taxation. He denied that it would be unconstitutional, or that it would operate hardly upon a particular class of men. It was not laid upon any particular class; but upon an instrument which, indeed, to exercise their professions, lawyers would be obliged to have; but it might as well be said that the tax upon rum and sugar would fall heavily upon the sellers of those articles, and that therefore no rum or sugar would be sold. The one tax fell upon the consumer, and the other upon the client. In the State of New York, Mr. L. said, the lawyers were not taxed at all.

Mr. McDowell said, when he seconded the motion for striking out "five" for the purpose of inserting "ten" he did not intend the tax to be extended to the practisers in State Courts; nor did he think the constitution would warrant such an extension of it.

Mr. Sitgreaves was in favor of the amendment; he wished to fix the principle. He thought that the State lawyers were a fair object of taxation, and that the profits of their business would very well bear it. But there was reason for making a distinction between the two cases. He thought there would be a hardship in extending the tax to practisers in county courts, as that would cause it to fall in some places very heavily. For instance, in Pennsylvania, there must be a separate admission into every court of every county; so that one man would probably have to pay to the amount of from two to three hundred dollars on account of this tax. He hoped the motion would be postponed for the present, and modified. He would do it himself, if time were given.

The motion was withdrawn.

Mr. Sitgreaves said, he understood that deeds for the conveyance of lands would have been amongst the articles taxed. He thought such a tax would be an eligible one, and in order to learn what were the objections to it, he proposed to add to the bill, "any deed for the conveyance of real estate —— dollars."

Mr. R. Williams said, this proposition had been rejected in the Committee of Ways and Means, on the ground that such a tax would clash with the jurisdiction of the States. He had the same objection to this that he should have to laying a tax upon the State lawyers. To say a deed, which was legal by the laws of a State, could not be received in evidence, except it was stamped, would be tantamount to the repealing of a State law.

Mr. W. Smith said, this subject had been frequently under discussion, both in the Committee of Ways and Means, and in that House. On this occasion, the majority of the Committee of Ways and Means was against laying a tax on deeds. He was in the minority. There was a provision, Mr. S. said, which declared that no paper upon which a duty was imposed by this act should be admitted in evidence; but there was afterwards a clause which allowed them to be admitted, on payment of ten dollars over and above the duty thereupon payable. He thought the tax would be a very good and a very profitable one.

Mr. Coit thought this was a tax which should be gone into with great caution, since, if it were carried, it might be the means of losing the whole bill. He thought the bill would be better passed without this provision; and if it were found expedient, it might be added hereafter.

Mr. Giles was opposed to this amendment, as interfering with the governments of the several States. All lands (except such as had been sold by the United States) were held from the States; and if this tax were to be agreed to, he believed the State courts would not refuse to admit a deed in evidence which was not stamped. Nothing would give so much alarm to the States as a subject of this sort.

Mr. Sewall did not understand the distinction made between titles to land and titles to money. He thought the objection made to a tax on a deed, might be made with equal propriety to a tax on a bond or note. If they had a right to say these should not be received in evidence in a State court, unless they were stamped, they had a right to say the same with respect to a deed. Except it could be shown that the farmer was less able to pay than the merchant, he thought no other objection had any weight.

Mr. R. Williams thought there was a great difference between a note of hand and a deed. The State had nothing to do with the former, but much with the latter; since every State held grants of its lands, and a man must show his title from the original grant, before his title could be said to be a good one. He did not doubt the people being able to pay the tax; it was the principle which he contended against, which, if carried into effect, would cause a clashing of the authorities of the two Governments. If the United States could lay a tax of this sort, they might lay a tax upon every commission issued by a State.

Mr. Nicholas did not see the smallest difference between the two cases which had been stated. And when they came to the 13th section, he should endeavor to prove that to say a piece of paper should not be received in evidence in a court, which was lawful to be received by the laws of the State, would be a violation of State sovereignty. He was not of opinion, with the gentleman from Connecticut, that they should take up the subject partially, rather than not pass the bill. He thought it best to consider a tax upon its broadest basis. It was not fair to exclude any thing which stood upon the same ground. He wished the principle to be thus fairly tested. He should, therefore, vote for the tax on deeds.

Mr. Lyon hoped, that if this tax was agreed to, purchases of a small amount would be excluded.

Mr. Swanwick said there would doubtless be a difference made in the duty between large and small purchases. He also disagreed with the gentleman from Connecticut. The principle, he said, was either right or not; if it were right, it should be made general: if not, it ought not to be adopted.

The question was put, and negatived—47 to 32.

On motion, the committee rose, and had leave to sit again.

Tuesday, June 27.

Stamp duties.

BANK NOTES.

The House resolved itself into a Committee of the Whole on the bill laying duties on stamped vellum, parchment, and paper, when

Mr. Nicholas moved to strike out the clause exempting bank notes from duty, as he could see no reason why notes upon which a profit was made, should be exempted from duty more than others. He trusted all notes would be placed on the same footing.

Mr. W. Smith hoped gentlemen did not mean, by moving to strike out this exemption, to destroy the bill. He thought the observation of the gentleman from Connecticut yesterday, against embarrassing the bill by doubtful objects, had weight. On this ground, though he was before of opinion deeds ought to have been inserted, he did not vote for inserting them. He trusted the gentleman had not fully considered the subject, and that when he did so, he would not persist in his motion.

Mr. Nicholas believed if the favorite object of every gentleman were to be exempted, there would be nothing left upon which to lay a tax. If to oppose this, were to defeat the bill, he meant to defeat it; as he wished the tax to go to all objects of the same kind. He had no idea of favoring one interest at the expense of another; he hoped, therefore, his amendment would be agreed to.

Mr. Lyon expected the gentleman from South Carolina was about to have given some reasons why bank notes ought not to be taxed as well as others; but he was disappointed. He believed those who issued these notes got a good profit from them, and that it was, therefore, reasonable they should pay their proportion towards the support of Government.

Mr. W. Smith thought the tax an improper one. Banks were taxed in another part of the bill, on the transfer of their shares. A tax on bank notes, he said, would introduce a vast deal of confusion throughout the country. As for himself he did not care any thing about it; but he believed, if it were agreed to, it would produce so many objections against the bill as to prevent its passing.

Mr. Brooks was against stamping bank notes, as they were not stamped in any country whatever.[19] Indeed they were different from other notes, as they were the representatives of specie; they might, therefore, as well stamp dollars or guineas. In short, the subject was too important and intricate to be gone into at this late period of the session.

Mr. Venable said, in proportion as the tax was general, it would be just. What was the object of the bill? It was to tax that right which an individual possesses in society, of transferring his property, and the evidences of it; it was also to tax him for the right he had of using his credit. Though the argument of the gentleman last up might appear specious, that a bank note was the representative of specie, it was not very solid; it was the representative of the credit of the bank, and circulated for its interest. An individual, if he had sufficient credit, might issue notes as well as a corporation; and, in that case, his notes would be charged with the duty, whilst those of a corporation would not. From whence, said Mr. V., is this reasoning drawn? It was drawn from the doctrine of favoritism—it was meant to favor the moneyed interest, which was already sufficiently encouraged by their incorporation. There seemed to be no objection to the principle; but merely to the convenience of the thing. If it could be shown that the tax would materially operate upon the circulation of bank notes, so as to injure the operation of money transactions, it might have some weight with him; but it was none, to say this bill must pass, and therefore let us avoid any thing in which there may be any difficulty. Such assertions went only to this, where you can tax the property of an individual, do it; but do not meddle with corporations, as this would be attended with some difficulty. He wished, if the bill passed, that it should operate equally.

Mr. Coit wished the gentleman from Virginia would withdraw his motion, until he took the sense of the committee upon one which he proposed to make, and which was calculated, if agreed to, to supersede the one he had made. He would state what it was. It was his opinion that small notes should be exempted from duty. He should propose, therefore, that there should be charged on all notes exceeding fifty dollars and not exceeding one hundred dollars, ten cents, and that all of less value should go free.

After a few remarks upon this motion, in which it was observed that it would defeat the bill entirely, as it would only be to make so many more notes at fifty dollars, if the sum were larger, Mr. Coit consented that the fifty should be struck out and left blank; when the question was taken and negatived, there being only twenty-five votes for it.

Mr. Nicholas renewed his motion.

Mr. Sitgreaves hoped it would not prevail. It had been admitted that if it could be proved that the stamping of bank notes would embarrass their circulation, it would be a good objection to the tax. He believed he could easily show that it would not only impede their circulation, but depreciate their value. The tax would not certainly be made to operate upon notes already issued, but upon those issued after the act took place; so that it would be necessary that every citizen throughout the United States should be acquainted with the date of their law, which would do away all confidence in bank paper. The result of this uncertainty would be that the banks would have to call in all their outstanding notes, which would cause an immediate depreciation of their value. He trusted, therefore, that so objectionable a measure would not be entered upon.

Mr. Gallatin said, he had had his doubts with respect to the propriety of stamping bank notes; he was not sure whether it might not have a dangerous effect on their circulation. On a further consideration of the subject, however, all his doubts had vanished. He now thought this amendment essential, just, and right. Indeed, when they proposed to lay a stamp duty upon all bills and notes, there appeared to be no good reason why the notes of any incorporation whatever should be excepted. He had heard only one objection; which was, that these notes differed essentially from others, because they were the real representatives of specie kept in the bank from whence they were issued. He could not see the distinction endeavored to be drawn. Private notes were always given for some consideration, whether for cash or other property, was of no consequence to them. Indeed, if they turned their attention to the nature of bank notes, they would be found to be a very fair object of taxation.

Where an individual gave his note, it was not likely that he would derive any profit from it; many of such notes were what was called "accommodation notes;" all were acknowledgments of debt, and therefore no proofs of wealth; but bank notes were never issued except to produce a profit to the bank; therefore, to exempt them from duty, would be to exempt those which were best entitled to pay.

The only objection would be, any inconvenience which might take place to counterbalance the benefit to be derived from the tax. It had been supposed that a depreciation would take place in the value of the notes in consequence of this tax. In order to show that this was not probable, he supposed the tax would be laid.

Bank notes were issued and re-issued; but when an individual gave a note, after it was paid, there was an end of it. Bank notes might be issued twenty-times, or oftener; it was necessary, therefore, to tax them in a different way from other notes. He supposed the same provision might be adopted here as was adopted in England. They might be allowed to be issued for a certain number of years—say three. This would remedy every kind of inconvenience arising from reissuing. As to notes now in circulation, the way to prevent inconvenience would be to fix the time after which all notes should be renewed by stamped notes. The consequence would be, that all notes would, by degrees, be returned to the bank, and no difficulty would arise from doing so. Six or nine months might be allowed for this purpose. This was the way in which all the banks in England, except the Bank of England, were subject to the stamp duty; that bank, he believed, had paid a certain sum to be excused from the tax. Perhaps the same privilege might be allowed here.

Mr. Nicholas noticed what had fallen from the gentleman from Pennsylvania on the subject of depreciation, and showed by the regulations under which the tax would be paid, that it could not take place.

Mr. Rutledge thought bank notes a proper object of taxation, and had not heard one good reason why they should be exempted from the proposed duty. The arguments of his colleague (Mr. Smith,) that bank notes now in circulation would be affected, and their currency checked, he would answer, by observing that the duty could not operate upon notes now in circulation; it was not proposed to have them called in, but to have those stamped which shall be issued after a certain day. He did not think the weight and importance which generally attach to the observations of the gentleman from Pennsylvania (Mr. Sitgreaves) attach to those now offered by him. With respect to the circulation of bank notes being embarrassed by the necessity there would be for the people at large being acquainted with the date of the law, the objection would apply to private as well as bank notes. The people throughout the country must inform themselves, and the most ignorant will inform themselves of the date of the act; and whenever a bank note or a private note shall be offered to them, they will always inquire if it was issued subsequent or previous to a certain day. The gentleman from New York (Mr. Brooks) was certainly incorrect in saying that "bank paper was not stamped in any country whatever." In Great Britain, Mr. R. said, the paper of all private banks is stamped; that of the Bank of England has been exempted from the stamp duty, by the bank having paid the Government a sum, in gross, by way of commutation. Although the moneyed interest has always been well and largely represented in England, yet bank notes are taxed there, and the circulation of them has not been embarrassed by this duty; on the contrary, the system of banking has been wonderfully extended throughout that kingdom. In every part of it bank notes are current; every town and village has its banks; they are as universal as their churches. Mr. R. asked, where would be the propriety of taxing notes issued by fifty individuals in their individual capacity, and exempting those issued by them when they associated, called themselves a Banking Company, and issued notes to three times the amount of their capital? The measure seemed to him unwise, and he was sure it would be unpopular. He could not conceive why people who had no other property than stock, which, in many instances, yielded an interest of fifteen per cent., should not contribute to the support of Government.

Mr. Swanwick.—The greatest objection which the banks in England seemed to have to the tax, was, that it might ascertain the quantity of notes they had in circulation. In order to prevent this, the Bank of England commuted with Government for a certain sum; but the notes of all the private banks were stamped. He thought it reasonable that this kind of notes should be stamped as well as others, though he would have the tax low; for he saw no reason why merchants should pay, and bankers be excused from the duty, since great emolument was derived from these notes, by the consent of the community, and the community, in return, had a right to expect assistance from the banks.

Mr. W. Smith believed, if an original proposition had been brought forward to tax bank notes, it would have been thought a very serious thing, and they should have paused before they consented to the proposition. Gentlemen who advocated this proposition, allowed it would require many provisions to carry it into effect. What those provisions were he could not pretend to say. He thought bank notes had been too much confounded with notes of individuals, and they were quite different things. Those of individuals were mostly larger, the greatest part of bank notes were for five dollars. Notes of individuals, if not stamped, could not be received in evidence; but he did not know what must be the penalty on bank notes being issued without stamp. Besides, he said, to lay a duty upon the notes issued by the Bank of the United States would be a violation of its charter, for, by that charter, it was said, the notes of that bank should be received at the custom-house in payment of duties. It had been said a commutation might be allowed, but that would be equally contrary to the charter; besides, if such a thing were to be done, he did not know who could do it; it would not be the proper business of the President, and that House would have difficulty in saying what would be a proper sum to be paid for the purpose. He again feared the introduction of this principle would destroy the bill.

Mr. Coit did not think it was quite so clear a thing as some gentlemen seemed to think it, that bank notes ought to be stamped. He did not believe the analogy between the bank and private notes was so strong as had been represented. If the facts were as represented, that every bank note was to be considered as producing a profit to the banker, there would be good ground for the tax; but he was of opinion this was not the case. For instance, if the bank gave their note for one hundred dollars, it was equal evidence with the note of an individual, that they had received the value of one hundred dollars. But if they went further, it would be found the analogy did not hold. The note of the individual was at a certain date, but that of the banker was on demand; and they were every day liable to be called upon for the money of which the note was the representative; so that they were obliged to keep the money, or money at least to a great amount, ready to take up their notes whenever presented. Banks could not, therefore, be considered as receiving a profit on all the notes they issued; but only upon the difference between the amount of notes issued, and the cash they are obliged to keep by them to answer their demands. The analogy, therefore, did not hold; and, if bank notes were taxed, it must be upon a different principle from that on which the notes of individuals are taxed.

Mr. Potter was in favor of the amendment, and he trusted that gentlemen who were always ready to go into every species of expense, would not flinch when the object was to raise money. He had this morning voted for a bill laying additional tax on licenses, which he believed would be found in some degree oppressive, but he did it because he knew revenue was wanted. He hoped the gentleman from South Carolina would, on this occasion, concur in the proposed tax. He doubted not unexceptionable means might be devised for collecting it; if not, it might be given up.

Mr. Harper was against the amendment, not because he was satisfied bank notes were not a proper object of taxation, but because he did not wish to embarrass the bill with a subject which they had not time to consider.

Mr. Swanwick again spoke in favor of the tax.

Mr. Otis was against the amendment; not because he thought such a tax would be improper, but from the difficulties which would attend the carrying it into effect. Besides, he said, if the notes were to revert to the bank every two or three years, it would cause a run upon them for cash, instead of renewed notes, which might be very inconvenient.

Mr. Venable did not think the run upon the bank which the gentleman had mentioned could take place, as the notes would have to be renewed three years from the time issued, and all their notes would not be issued on one day. Mr. V. again insisted that this tax should be general; and if they had not time to make it so, it ought to be put off till they had. Not to include bankers would be to lay a tax upon the people whose complaints of its hardships could not be heard. He deprecated this as unjust.

Mr. Harper could not conceive that the great body of merchants and farmers throughout the United States were people who could not make their complaints heard, if they had them to make. The proprietors of banks, Mr. H. said, already paid taxes in a variety of shapes; many of them were merchants, and would, of course, pay the tax imposed on the notes of individuals.

Mr. Brooks was against going into a tax on bank notes at present, but denied that there would be any cause of complaint from the people on account of the taxes imposed by this bill. He wished to make a beginning with a stamp tax at present; it might not be completed these seven years. Gentlemen might as well go on and propose a tax on newspapers, which, whatever might be said against it, he believed might be laid without infringing the liberty of the press; but a thing of this kind would require a great deal of detail.

Mr. Claiborne was in favor of including bank notes; not to do this, he said, would be to catch small fish, and let the large ones pass.

Mr. Gallatin said that the provisions for laying this tax would be by no means difficult. Indeed, three-fourths of the bill was copied from the British statute, and that part respecting bank notes could be as easy copied as any other part. The observations respecting the charter of the Bank of the United States, were not deserving of a reply. There was only one of two things which could be done, either to tax bank notes, or to excuse all other notes from the tax.

Mr. Sitgreaves could not submit to hear that it was the intention of those who opposed this motion, to screen the moneyed interest of this country from paying a tax. He had no such views. He had no objection to tax the banks in proportion to the amount of their business; but he could not agree to its being done in this way. If gentlemen would estimate how much the stamp duty of a bank would produce to the United States, he would vote for a sum of this kind by way of commutation. Charges could rarely be made against the side of the House with whom he generally acted, for not being willing to vote for revenue; a contrary charge was more frequently made. He trusted the amendment would not be agreed to; but that if the tax were laid, it would be by way of commutation.

The question was taken and carried, there being 55 votes in favor of it.

The committee rose and had leave to sit again.

The resolution respecting an adjournment was received from the Senate, and disagreed to. The disagreement being read, Mr. Giles moved the same resolution filled with Monday next; but Mr. Williams opposed it, and moved to adjourn.

Thursday, June 29.

Stamp Duties.

BANK NOTES.

The House went into a Committee of the Whole on the bill for imposing stamp duties, when the clause of Mr. Gallatin yesterday proposed to the committee, on the subject of bank notes, being under consideration,

Mr. Otis supposed that at least two-thirds of the whole amount of paper issued by the banks, returned and were re-issued every year, and thus the banks must pay tax upon two-thirds of their capital in the first year after the law passed, and which, according to a rough calculation, relation being had to the different denominations of notes, amount to nearly one per cent. on their capital. The tax ought to be levied upon such new notes only as should be issued hereafter; all that were now in existence were protected by the charter, and any law relating to them would be retrospective; and as one-fifth of the whole number of notes would be renewed every year, a tax upon them would be found to bear as hard as upon other notes and bills, which seldom comprised more than the fifth part of the transactions of an individual. It ought also to be considered, that the paper issued by the bank generally became worn and dirty, and incapable of receiving a stamp, so that in less than two years the whole amount of paper must be re-issued, and the entire tax assessed in the same period. This plan would also be inconsistent with that of a commutation, which had been proposed.

Mr. Dayton (the Speaker) did not think that this proposition precluded the provision of a commutation. He was in favor of taxing bank notes, but he wished also to hold out a commutation, and such a one as should induce all the banks to embrace it; for, if this were not the case, they would not be taxed equally, as the notes of banks did not bear a just proportion to the amount of their dividends. This clause would not, therefore, preclude the commutation, but render it proper, and a clause could be brought in excusing such banks from the duty as came into the proposed plan.

Mr. Gallatin said, his ideas corresponded exactly with those of the gentleman who had just spoken. The scheme suggested by the gentleman from Massachusetts, of not taxing the notes at present in circulation, would excuse bank notes from all tax, as, according to his own account, only about one-fifth of the notes issued came in in the course of a year, so that it would be five years before a new tax could operate upon all their notes, and it was probable the bill might not pass for more than three or four. That gentleman supposed that bankers' notes ought not to be charged more than others; if this were the case, they might be reckoned to run for four or five years, while those of individuals were at six and twelve months. The note of an individual, for fifty dollars, was to pay ten cents; he calculated a bank note, therefore, for a like sum, which he supposed, upon an average, to run four years, thirty cents.

With respect to the notes at present in circulation, Mr. G. said, they ought all to be called in before a certain time, and after that day no note should be negotiable which was not stamped.

The gentleman from Massachusetts was not correct when he said that this tax would amount to one per cent. upon the capital employed in banks. The calculation of the amount of the tax upon a bank which he had made, would amount to $10,000 a year, whereas one per cent. upon the capital of the Bank of the United States would amount to $200,000; but he said (as he had before stated) that the notes issued by a bank were not equal to its capital, or any thing like it. He could not, indeed, say what the amount of the notes of the Bank of the United States might be which were received for duty, from one end of the United States to the other; but he knew banks in general, in large cities, did not employ more than two-fifths of their capital in this way. He knew it to be a fact with respect to a bank of the largest property in the United States, except the Bank of the United States. He thought of proposing the commutation to be one per cent. upon the amount of the dividend paid by each bank, which he supposed would be deemed a reasonable sum.

Mr. Otis explained.

Mr. Sewall thought the observation of the gentleman from Connecticut yesterday, as to the nature of bank notes, had weight. He agreed with him that they were very different from the notes of individuals, as they were always obliged to keep cash in readiness to take up their notes, while individuals, knowing exactly the time when the money for theirs would be wanted, could make use of it in the mean time. Therefore, if they taxed bank notes, they ought not to tax them in the same proportion with those of individuals at a certain date. Notes of individuals, under twenty dollars, were to be exempt from duty, while every note issued by a bank was proposed to be taxed.

Every banker's note of fifty dollars was to be charged with thirty cents, while those of individuals, which might run for two or three years, were charged only with ten cents. Every three or four years they would have to pay this sum. If a fair commutation were to be made, they should first fix the tax upon just principles.

Mr. Nicholas thought if there was no objection to the commutation, there could not reasonably be any made to the tax, because if the commutation were reasonable they would not choose to pay the tax; but, if they should choose to pay the tax, instead of the commutation, it would be evidence that the tax was too low.

Mr. W. Smith did not see the force of the argument of the gentleman last up. As the commutation was to bear some proportion to the rates of duty, it became necessary to fix the rates upon a fair basis. If the rates were fixed too high, they ought to reduce them. He did not see the propriety of selecting moneyed corporations for the purpose of laying a high duty upon them. He moved to strike out the three cents for every five dollars, and leave it a blank.

Mr. Dayton hoped this proposition would be agreed to, as by a vote upon the question in blank they would fix the principle whether or not bank notes were to be taxed, and the scale could be afterwards fixed. If there was the difference alleged between bank notes and the notes of individuals, it would be sufficiently considered in the commutation. He should not, indeed, be willing to agree to any scale without a commutation, for the reason he had before mentioned. For, said he, take the Bank of the United States and the Bank of North America, and the notes issued by them bear no sort of proportion to their respective capitals. If the tax were to be laid upon the notes issued, the Bank of the United States would pay a much larger sum than the other in duty.

Mr. Gallatin observed that the gentleman from South Carolina had said they were about to select moneyed corporations as objects on which to lay a high duty. He had made a calculation to show that this was not the case, but that what was proposed was no more than just and reasonable, and that instead of the tax being one per cent. upon their capital, it was not more than one twentieth or one twenty-fifth part of one per cent.

He would state the facts, and beg gentlemen to correct him where he was mistaken. In the first place he would state the capital of all the banks of the United States at $20,000,000; the whole amount of bank notes at less than $8,000,000. He would divide these $8,000,000, one-half into notes under fifty dollars, and one-half above that sum as follows: