Deficiency of Revenue to the expense to be obtained on
credit, the first year, besides the loan from the Bank, 1,479,333⅓
Deficiency of Revenue for the second year deducting the
fund for discharging the loan of this year, 1,847,333⅓
Deficiency of Revenue for the third year, making the
same deduction, 2,215,333⅓
----------
$9,542,000
Should, then, the war last three years longer, which must probably
be the utmost term of its duration, we shall find ourselves with an
unfunded debt of nine million, five hundred and forty-two thousand
dollars, and an unappropriated revenue of four million, two hundred
and eighty-four thousand, six hundred and sixty-six, and two-thirds,
dollars.
The surplus of four millions, which is two hundred and eighty-four
thousand, six hundred and sixty-six, and two-thirds, dollars, and the
funds appropriated to the payment of the other debts which will revert
to the public at the end of thirty years, will be a sufficient fund
for the redemption of this debt in about thirty-five years: so that,
according to my plan, at the end of thirty-five years these States have
paid off the whole debt contracted on account of the war; and, in the
mean time, will have a clear revenue of four millions of dollars, for
defraying the expenses of their civil and military establishments.
This calculation supposes the ability of these States for revenue to
continue the same as they now are, which is a supposition both false
and unfavorable. Speaking within moderate bounds, our population will
be doubled in thirty years; there will be a confluence of emigrants
from all parts of the world; our commerce will have a proportionable
progress; and of course our wealth and capacity for revenue. It will be
a matter of choice if we are not out of debt in twenty years, without
at all encumbering the people.
A national debt, if it is not excessive, will be to us a national
blessing. It will be a powerful cement of our Union. It will also
create a necessity for keeping up taxation to a degree which, without
being oppressive, will be a spur to industry, remote as we are from
Europe, and shall be from danger. It were otherwise to be feared our
popular maxims would incline us to too great parsimony and indulgence.
We labor less now than any civilized nation of Europe; and a habit of
labor in the people, is as essential to the health and vigor of their
minds and bodies, as it is conducive to the welfare of the State. We
ought not to suffer our self-love to deceive us in a comparison upon
these points.
I have spun out this letter to a much greater length than I intended.
To develope the whole connection of my ideas on the subject, and
place my plan in the clearest light, I have indulged myself in many
observations which might have been omitted. I shall not longer intrude
upon your patience than to assure you of the sincere sentiments of
esteem with which I have the honor to be,
Sir, your most obedient and humble servant,
A. Hamilton.
[12] It is to be feared, too, that this sum is rated too high. Hitherto
we have not four hundred men from that State, nor very promising
accounts of those which may be expected.
[13] The proportion of the European armies, in general, to the national
population, is calculated at one to a hundred. By this rule, supposing
our population to be two and a half millions, our armies ought to
consist of twenty-five thousand men; but the proportion will naturally
be less in this country. Our population is more diffused; there is a
greater facility of procuring subsistence, fewer poor (and consequently
fewer of that class of men whose habits, tempers, and circumstances
lead them to embrace the military life) than in any other country in
the world. Hence it is, I say, twenty thousand men are as many as we
shall be able to raise. Experience justifies this opinion. In the
first paroxysms of enthusiasm our armies were larger. I believe, at
particular periods, we have had more than thirty thousand men in the
field: but our force has every year diminished, and has been for two
years past below the standard I have assigned. Immense efforts have
been made to procure men, but they have not been able to produce more.
This shows that our military system is still susceptible of great
reforms in favor of economy; but we dare not make them, because we
cannot pay the army. I also said, twenty thousand men would be as many
as we should stand in need of. The enemy have now less than this number
within the States; and cannot, in the future progress of the war, have
more.
An equal force, with the occasional aid of the militia, will confine
them within one or two capital points; and this will be their defeat.
But we have a further resource in the troops of our allies. We must
not dream of decisive enterprises, unless our allies will assist us
with twelve or fifteen thousand land troops, and an undisputed maritime
superiority. Then, with the aid of the militia, drawn out for a few
months, we may undertake and succeed. Our true policy, in the meantime,
is, to endeavor to form a solid compact force, proportioned to our
necessities.
[14] The possibility of making up so large a proportion of specie
will depend on foreign assistance. It could hardly be hoped to effect
it within ourselves, if, as I suppose, there are not more than six
millions of dollars in these States. It is true, plate is admitted;
but it is uncertain how far this may prove a resource. It were to be
wished the proportion of specie might be as large as possible: but,
perhaps, for fear of a failure, it may be advisable to alter the above
proportions, so as to have, upon the whole, about one-third in specie,
and two thirds in European funds and landed security.
[15] It may, perhaps, not be impossible to make some profitable
speculations on the bullion which the Spaniards are afraid to transport
from South America to Europe.
[16] It is impossible too soon to make some arrangement that will
enable Congress to put a stop to the further emission.
[17] There is another immense consideration. The proprietors of the
Bank will be the holders of a great part of this paper. They have it in
their power to double the value of it by this plan: which is, in other
words, to gain a hundred per cent.