This was the only new debt incurred during the administration of Jefferson.
In 1806, the secretary of the treasury said, " all the species of debt, on which the entire appropria tion of 8,000,000 dollars could operate, would be reimbursed previous to 1809." To promote the rapid discharge of the remaining debt, he proposed, if it should meet the approbation of the public creditors, to convert the old six per cent, the de ferred six per cent, and the three per cent stocks, of which, according to the provisions of the law of 1790, no more than eight per cent could be re deemed annually, into a common six per cent stock, redeemable at the pleasure of the United States. An act was passed in accordance with these views. in 1807: and some of the public creditors accepted the terms proposed. In consequence, certificates were issued for S6,294,051 of a new stock called ex chancred six per cents, the same being in lieu of old six per cent and deferred stocks: and certificates to the amount of 1,859,850 dollars, were issued for another new stock called converted six per ant; one hundred dollars of this new six per cent stock, being given in exchange for 153 dollars 99 cents of the old three per cent stock.
Though a debt of S15,000,000 was incurred by the purchase of Louisiana, the sum total of the public debt was reduced during Mr. Jefferson's adminis tration, from S82,000,000 to less than S57,000,000. This reduction was owing in part to the character of the times: but it would be injustice not to ascribe it in part to the character of the man, and to the prin ciples of his administration.
In the first years of Mr. Madison's term of office, circumstances rendered it practicable to pursue the same policy: and on the first of January 1312, the public debt was as follows: The five and a half per cent stock, the four and a half per cent, the Navy six per cent, the eight per cent, and the exchange six per cent of 1807, had been completely reimbursed: and the other de nominations of stock greatly reduced in amount. The payments made on account of the principal of the debt from April 1st 1801 to January 1st 1812, amounted, according to the treasury statements, to 46,029,810 dollars. The sums received from 1801 to 1811 inclusive, which were applicable to the pay ment of the interest and principal of the public debt, amounted to about 90,000,000 dollars. Dur
ing the period in which the government paid this sum, no additional taxes of any importance were imposed, except a duty of two and a half per cent on goods imported, paying ad valorem duties, to defray the expenses of the war with Tripoli, and of intercourse with the other Barbary powers, and which was called "the Mediterranean Fund." This duty was to have ceased in three months after the termination of the war with Tripoli: but was con tinued by various acts of congress until 1815.
When the war of 1812 commenced, the annual interest on the public debt did not exceed two mil lion dollars. The income of government in 1811, exceeded fourteen million dollars, and all its ex penditures in that year, independent of what was paid on account of the public debt, and of the army and navy, did not amount to 1,800,000 dollars. Vet a war of only two years and eight months, pro duced very serious financial embarrassments, some of the consequences of which were felt by the na tion for a long period.
In anticipation of the declaration of war, congress, by an act of March 14th, 1812, authorised the bor rowing of 11,000,000 dollars, at an interest of six per cent. Under this act there was obtained in the course of the year 1812, the sum of S10,184,700. Of this sum S2,150,000 were obtained of certain banks on special contract, 1,350,000 being made repayable in 1813, 750,000 in 1814, and 50,000 in 1817. For the residue, being 8,034,700 dollars, six per cent stock was issued, redeemable after the 1st of January 1825. About one half of this last sum was obtained from banks, and the residue from individuals. • On the 8th of January 1813, a further sum of sixteen millions wai, authorised to be borrowed. This was obtained by contract, and principally from individuals, at the rate of eighty-eight dollars in the hundred, viz. for every eighty-eight dollars paid in money, a certificate of stock for one hun dred dollars was to be issued; or what is the same, for every hundred dollars which the United States received, they were to issue a certificate of stock for 5113 63 cents. The amount of stock issued for this loan of sixteen millions, was 18,109,377, making a bonus of 2,109,377 to the lenders.