Enclosure

Abstract of Mr. G. Morris’s plan of American finances

Preliminary operation

• Consider all requisitions from Congress on the states as non-avenues.1 This gets rid of the adjustment of Quotas for the past.
• Settle the sum due from the Union to each state for it’s contributions in money, provisions &c. and after taking credit for money &c. furnished to such state, let the balance be constituted a debt from the Union to the respective states bearing an interest of 6. per cent.
• With the principal of this debt each state may, in the first place take up their own public paper (by commuting with the holders) or with the interest of it they may in the first place pay the interest of their own paper to the holders. The interest on the balance will support the state government.
• The states may therefore abandon to the Union all the subjects of taxation.

I.

• Let the Union lay an Impost of 5. per cent on importations. This will bring in from 1½ to 2. millions of Dollars.
• Open a loan in Europe sufficient to pay the foreign debts and somewhat more in surplus. This would be (suppose) about 12. millions of Dollars, which at an interest of 5. percent, would require 600,000 Dollars, and would leave about 1. million a year of the impost.
• However instead of appropriating a specific part of this impost to the loans

• 1. Appropriate the whole to pay this interest in the first place.
• 2. To support government for a year or two till our other taxes become productive.
• 3. The surplus to form an Aggregate fund.

II.

• Lay a direct tax of 1/20 of all produce, paiable in kind (in the nature of a tythe) but commutable for half it’s value in money. Should this produce more than the state’s quota, let the surplus go to the state. The state legislature may then be entrusted with fixing the objects on which it falls, their value, the places of delivery, sale of the produce, conduct of the receivers &c.
• This tax of 1/20 should be appropriated
  • 1. To the military and naval establishments.
  • 2. To pay the interest of the debts of the Union to the respective states.
  • 3. The surplus into the aggregate fund.

III.

• Postages and a tax on civil process form a 3d. fund. Appropriate it
  • 1. To the Civil list.
  • 2. The surplus into the Aggregate fund.
• The Aggregate fund thus formed of the residuary parts of all the taxes, must
  • 1. pay the interest of the domestic debt
  • 2. contingencies.
  • 3. form a sinking fund to pay the capital of the general debts of the union. In the administration of this Sinking fund fix a certain order of paiment so as to ensure paiment to the holders; but at the same time leave a portion of it free to be employed by the executive according to their discretion in buying up the general debts. They might begin (if they saw it expedient) with buying the debts, to be constituted from the Union to the separate states, according to the above preliminary proposition.