By an act of August 2d, 1813, a further loan of seven millions and a half was authorised, and was obtained by issuing stock for 113 dollars 31 cents, for every hundred dollars received. Under this act, stock to the amount of 8,498,583 dollars, was issued, making a premium or bonus to the lenders of 998,583 dollars.
On the 29th of March 1814, authority was given to borrow 25,000,000 dollars; but the whole sum could not be obtained. On the 4th of April, the secre tary of the treasury issued his invitations for a loan of ten millions, as part of the 25 millions: and on the 25th of July, further invitations for a loan of six millions. The whole sum obtained by virtue of this act, was only S12,551,511 87, for which, stock to the amount of S15,661,881 was issued. For nearly S12,300,000 of money received, stock was issued at the rate of S125 for S100 paid in, making a nominal bonus to the lenders of S3,110,306, in the aggregate. As much of this loan was paid into the treasury in bank notes, which were many per cent below par, and as the interest and principal have been paid in a more valuable medium, it is probable that the real bonus has not amounted to less than five millions.
On the 14th of November, in the same year, an act was passed to authorise the borrowing of S3,000,000, hut the sums obtained were so small, that only S252,801, of new six per cent stock was issued in consequence.
For less than 44 millions paid into the treasury in the form of loans, during the war, and part of this in bank notes 20 per cent below par, it was necessary to issue upwards of 50 millions of stock.
As a further aid to carrying on the war, emiss ions were made of treasury notes, bearing an interest of five and two-fifths per centum, reim bursable one year after the day on which they were issued, and receivable in payment for duties, taxes, and public lands. In 1812, authority was given to issue notes of this description, to the amount of 85.000,000: in 1813, to the amount of S10,000,000; and in 1814, to the amount of S20,500,000, making in the aggregate, S35,500,000, of which S28,318,400, were actually issued, and passed at a great depre ciation.
Immediately on the declaration of war, one hun dred per cent was added to the duties on imports and tonnage, but the commerce of the country being restricted by belligerent operations, the revenue from the customs for the whole of 1812, (six months of which were months of peace) amounted to less than nine million dollars. In 1813, this revenue rose to upwards of thirteen millions: but in 1814, in consequence of the blockade of our coast, it sunk to less than six millions.
From a report of the committee of ways and means, it would appear as if congress depended on bank credits as a means of carrying on the war! However this may have been, it is certain that even the'first steps towards raising a revenue by internal taxation, were not taken until July and August 18 13: when acts were passed, to take effect from the first of January 1814, imposing a duty of from ten to twenty-four dollars each, on retailers of wine.
spirits, and foreign merchandize: a duty on stills, of 108 cents per gallon per year: a duty of from one dollar to twenty dollars on carriages: a duty of 4 cents a pound on refined sugar; a duty of from one quarter of one per cent, to one per cent on sales by auction; and a stamp duty, varying from one cent to fifty dollars, according to the import ance of the document for which the stamp might be used. The sums which accrued from these taxes in the year 1814, exceeded three millions of dollars: but the sums actually paid into the treasury, fell short of 1,700,000 dollars.
In the same year, a direct tax of 3 millions was laid; which, within the year, brought into the Trea sury 2,219,447 dollars. But the whole revenue of government during the years 1812, 13, and 14, from customs, internal taxes, direct tax, the public lands, and every other source, except loans and Treasury notes, amounted to hardly 36 millions, or 12 millions for each year.
The policy of carrying on the war by means of loans, cannot be said to have been an unwise one: but what ought to have been an essential point in this policy, viz. the drawing on the real resources of the country to an extent sufficient to support the credit of government was neglected too long. Under any circumstances, it would have been neces sary to pay a high premium on loans, for our countrymen had little to lend, much of their in vested capital having been rendered unproductive by the events of the war, and much of their floating capital taking a direction towards manufactures : but the principles of the financial policy which were adopted, would, in the course of a few months, have rendered it impossible to borrow money on any terms. Fifty per cent was, indeed, added to the duty bn retailers, in December 1814: a duty of 20 cents a gallon was imposed on distilled spirits: the duty on carriages was greatly increased: one per cent was added to the duty on auctions: and a direct tax of six millions was laid for 1815: but any person who candidly considers the events of the following years, will probably be convinced, that, without an increase of revenue from the customs, it would have been impossible for government to support its credit. Even so late as December 18 t 4, it appeared to be the wish of some of the leading men in the administration, instead of depending on the real resources of the country, to depend on a bank they proposed to form, with a nominal capital of fifty millions, made up principally of public stock and treasury notes, all, then, much below par.