As constituting the vital spring without which the action of government could not long be con tinued, the subject of revenue was, says Judge Mar shall, taken up in the house of representatives, in the first congress under the new constitution, as soon as it could be introduced. The qualification of the members was succeeded by a motion for the house to resolve itself into a committee of the whole on the state of the union: and in that committee resolution was moved declaring the opinion that certain duties ought to be levied on goods, wares, and merchandise, imported into the United States: and on the tonnage of vessels. This resolution was introduced by Mr. Madison of Virginia in a short speech, in which he adverted to the numerous claims upon the justice of government, and to the impotency which prevented the late congress of the United States from carrying into effect what was considered the dictate of justice and policy.
As it was deemed important to complete a tem porary system in time to embrace the spring im portations, Mr. Madison presented the scheme of impost which had been recommended by the former congress, and had already received the approbation of a majority of the states; to which he added a general proposition from himself, for a duty on tonnage. By this scheme, specific duties were im posed on certain enumerated articles; and an ad valorem duty on those not enumerated. Mr Fitz simmons, a member from Pennsylvania, offered an amendment to the original resolution, greatly en larging the catalogue of enumerated articles. "Among those," he said, " which were contained in the list, he wished, to subjoin to that in posses sion of the committee, were some calculated to en courage the productions of our country, and protect our infant manufactures, besides others tending to operate as sumptuary restrictions upon articles which are often termed those of luxury." Mr Madison having consented to subjoin the amendment proposed by Mr Fitzsimmons to the ori ginal resolution, it was rec6ved by the committee; but in proceeding to fill up the blanks with the sum taxable on each article, it was soon perceived that gentlemen had. viewed the subject in very different lights. The tax on many articles was believcd to press more heavily on some than on others; it was supposed, also, to favour the products of particular states; and no inconsiderable degree of watchfulness was discovered, lest those which were more popu lous, and ‘s hose manufactures were in greater pro gress, should lay protecting duties whereby the industry of one part of the Union would be en couraged by premiums laid on the industry of an other part.
After much discussion the bill was passed.
Towards the close of the session, a report on a petition which had been presented at an early pe riod by the creditors of the public residing in Pennsylvania, was taken up in the House of Repre sentatives. Many considerations rendered a post ponement of this interesting subject necessary. But, two resolutions were 'passed, the one declaring "that the House considered an adequate provision for the support of the public credit as a matter of high importance to the national honour and pros perity;" and the other directing " the secretary of the treasury to prepare a plan for that purpose, and to report the same to the Ilouse at its next meet ing." On the 29th of September, congress adjourned to the first Monday in January 1790. Early in this second session, the secretary of the treasury •uade a report on public credit, with a plan for funding the domestic debt. He estimated the amount of the public debt as follows: The foreign. debt (due to France, Holland, and Spain) . . — _ - After a long and animated discussion, a bill was passed, towards the close of the session, for funding the domestic debt of the United States, and assum ing S21,500,000 of the debts due by the several states. Tho continental money was to be funded at the rate of one hundred dollars in the said bills for one dollar in specie. The certificates issued by the register of the treasury, the paymaster-general, Sze. were to be funded at their nominal value.
For every hundred dollars subscribed, new certi ficates were ordered to be issued, purporting that the United States owed the holder thereof S66 663 cents, bearing an interest of six per cent, payable quarterly; and certificates purporting that the Uni ted States owed the holder thereof S33 331 cents, at six per cent interest, the payment of which interest should not commence till after the year 1300. For the arrears of interest, it was ordered that cer tificates should be issued beating an interest of three per cent.
In this way were constituted what arc known as the old six per cent, deferred six per cent, and Three per cent stocks.
The assumed debt of the several states was funded by issuing six per cent certificates, for four•ninths of the amount; deferred six per cent certificates for two-ninths; and three per cent certificates for the emaining three-ninths.