Hamilton’s Report to Congress Re: Add’l Supplies for 1792

Alexander Hamilton was a Founding Father, soldier, economist, political philosopher, one of America’s first constitutional lawyers and the first United States Secretary of the Treasury.

Self-Educated American, Liberty Library

Alexander Hamilton: The Works of Alexander Hamilton, Volume 1, 1774

Taxation and Finance: Report on Impost Duty

Communicated to the House of Representatives, March 17, 1792.

Treasury Department, March 16, 1792.

The Secretary of the Treasury, pursuant to a resolution of the House of Representatives, of the 8th instant, directing the said Secretary to report to the House his opinion of the best mode of raising the additional supplies requisite for the ensuing year, respectfully submits the following report:

The sum which is estimated to be necessary for carrying into effect the purposes of the act for making further and more effectual provision for the protection of the frontiers of the United States, beyond the provision made by the act making appropriations for the support of Government for the year 1792, is $675,950.08.

The returns which have been received at the treasury subsequent to the Secretary’s report of the 23d of January last, among which are those of some principal ports, afford satisfactory ground of assurance that the quarter ending the last of December was considerably more productive than it was supposed likely to prove, authorizing a reliance that the revenues, to the end of the year 1791, will yield a surplus of $150,000, which may be applied in part of the sum of $675,950.08, above stated to be necessary.

Provision remains to be made for the residue of this sum, namely, $525,950.08.

Three expedients occur to the option of the Government for providing this sum.

One, to dispose of the interest to which the United States are entitled in the Bank of the United States. This, at the present market price of bank stock, would yield a clear gain to the Government much more than adequate to the sum required.

Another, to borrow the money upon an establishment of funds, either merely commensurate with the interest to be paid, or affording a surplus which will discharge the principal by instalments within a short time.

The third is to raise the amount by taxes.

The first of these three expedients appears to the Secretary altogether unadvisable.

First. It is his present opinion that it will be found, in various respects, permanently the interest of the United States to retain the interest to which they are entitled in the bank. But,

Secondly. If this opinion should not be well founded, it would be improvident to dispose of it at the present juncture, since, upon a comprehensive view of the subject, it can hardly admit of a doubt that its future value, at a period not very distant, will be considerably greater than its present, while the Government will enjoy the benefit of whatever dividends shall be declared in the interval. And,

Thirdly. Whether it shall be deemed proper to retain or dispose of this interest, the most useful application of the proceeds will be as a fund for extinguishing the public debt. A necessity of applying it to any different object, if it should be found to exist, would be matter of serious regret.

The second expedient would, in the judgment of the Secretary, be preferable to the first.

For this, the following reason, if there were no other, is presumed to be conclusive, namely, that the probable increase of the value of the stock may itself be estimated as a considerable, if not a sufficient, fund for the repayment of the sum which might be borrowed.

If the measure of a loan should be thought eligible, it is submitted, as most advisable, to accompany it with a provision sufficient not only to pay the interest, but to discharge the principal within a short period. This will at least mitigate the inconvenience of making an addition to the public debt.

But the result of mature reflection is, in the mind of the Secretary, a strong conviction that the last of the three expedients which have been mentioned, is to be preferred to either of the other two.

Nothing can more interest the national credit and prosperity than a constant and systematic attention to husband all the means previously possessed for extinguishing the present debt, and to avoid as much as possible the incurring of any new debt.

Necessity alone, therefore, can justify the application of any of the public property, other than the annual revenues, to the current service, or to the temporary and casual exigencies of the country, or the contracting of an additional debt, by loans, to provide for those exigencies.

Great emergencies, indeed, might exist, in which loans would be indispensable. But the occasions which will justify them must be truly of that description.

The present is not of such a nature. The sum to be provided is not of magnitude enough to furnish the plea of necessity.

Taxes are never welcome to a community. They seldom fail to excite uneasy sensations, more or less extensive. Hence, a too strong propensity in the governments of nations to anticipate and mortgage the resources of posterity, rather than encounter the inconveniences of an increase of taxes.

But this policy, when not dictated by very peculiar circumstances, is of the worst kind. Its obvious tendency is, by enhancing the permanent burthens of the people, to produce lasting distress, and its natural issue is in national bankruptcy.

It will be happy if the councils of this country, sanctioned by the voice of an enlightened community, shall be able to pursue a different course.

Yielding to this impression, the Secretary proceeds to state, for the consideration of the House, the objects which have occurred to him as most proper to be resorted to for raising the requisite sum by taxes.

From the most careful view which he is able to take of all the circumstances that at the present juncture naturally enter into consideration, he is led to conclude that the most eligible mode in which the necessary provision can at this time be made is by some additional duties on imported articles.

This conclusion is made with reluctance, for reasons which were noticed upon a former occasion, and from the reflection that frequent and unexpected alterations in the rates of duties on the objects of trade, by inducing uncertainty in mercantile speculations and calculations, are really injurious to commerce, and hurtful to the interests of those who carry it on.

The stability of the duties to be paid by the merchants, is, in fact, of more consequence to them than their quantum, if within reasonable bounds.

It were, therefore, much to have been wished, that so early a resort to new demands, on that class of citizens, could have been avoided, and, especially, that they could have been deferred until a general tariff could have been maturely digested, upon principles which might, with propriety, render it essentially stationary.

But, while there are these motives to regret, there are others of a consoling tendency, some of which indicate that an augmentation of duties, at the present juncture, may have the effect of lessening some public evils, and producing some public benefits.

It is a pleasing fact, if the information of the Secretary be not very erroneous, that the improved state of the credit of this country enables our merchants to procure the supplies which they import from abroad upon much more cheap and advantageous terms than heretofore; a circumstance which must alleviate to them the pressure of somewhat higher rates of duty, and must contribute, at the same time, to reconcile them to burthens, which, being connected with an efficacious discharge of the duty of the Government, are of a nature to give solidity and permanency to the advantages they enjoy under it.

It is certain, also, that a spirit of manufacturing prevails at this time, in a greater degree than it has done at any antecedent period; and, as far as an increase of duties shall tend to second and aid this spirit, they will serve to promote essentially the industry, the wealth, the strength, the independence, and the substantial prosperity of the country.

The returns for a year, ending with the thirtieth of September last, an abstract of which is in preparation to be communicated to the Legislature, evince a much increased importation during that year, greater far than can be referred to a naturally increasing demand from the progress of population, and announce a probability of a more than proportional increase of consumption; there being no appearance of an extraordinary abundance of goods in the market. If, happily, an extension of the duties shall operate as a restraint upon excessive consumption, it will be a salutary means of preserving the community from future embarrassment, public and private. But, if this should not be the case, it is at least prudent in the Government to extract from it the resources necessary for current exigencies, rather than postpone the burthen to a period when that very circumstance may cause it to be more grievously felt.

These different considerations unite with others, which will suggest themselves, to induce, in the present state of things, a preference of taxes on imported articles to any other mode of raising the sum required.

It is, therefore, respectfully submitted, that the existing duties on the articles hereafter enumerated, be repealed, and that, in place of them, the following be laid, viz.:
Per Gall.
Madeira, of the quality of London particular . $0 56
Madeira, of the quality of London market . . 49
Other Madeira wine . . . . . . 40
Sherry . . . . . . . . 33
St. Lucar . . . . . . . . 30
Lisbon . . . . . . . . 25
Oporto . . . . . . . . 25
Teneriffe and Fayal . . . . . . 20

All other wines, 40 per centum ad valorem.
Those distilled wholly or chiefly from grain.
Per Gall.
Of the first class of proof . . . . . $0 28
Of the second class of proof . . . . . 29
Of the third class of proof . . . . . 31
Of the fourth class of proof . . . . . 34
Of the fifth class of proof . . . . . 40
Of the sixth class of proof . . . . . 50
other distilled spirits.
Per Gall.
Of the second class of proof, and under . . $0 24
Of the third of proof, and under . . . . 27
Of the fourth of proof, and under . . . . 31
Of the fifth of proof, and under . . . . 37
Of the sixth of proof, and under . . . . 45
Beer, ale, and porter . . . . per gallon, 0 08
Steel . . . . . . . per cwt., 1 00
Nails . . . . . . . per lb., 2
Cocoa . . . . . . per lb., 2
Chocolate . . . . . . per lb., 3
Playing cards . . . . per pack, 25
Shoes and slippers of silk . . . . . 20
Shoes and slippers of stained or colored leather (other than black), for men and women $0 10
Ditto for children . . . . . 7
All other shoes and slippers (for men and women), clogs and goloshes . . . . 10
All other shoes and slippers for children . 7
articles ad valorem.
15 per cent. ad valorem.

China wares.

Looking-glass, window, and other glass, and all manufactures of glass, black quart bottles excepted.



Swords, cutlasses, hangers, and other fire- and side-arms Starch.

Hair powder.


10 per cent. ad valorem.

Cast, slit, and rolled iron, and generally all manufactures of iron, steel, tin, pewter, copper, brass, or of which either of these metals is the article of chief value (not being otherwise particularly enumerated).

Leather, tanned and tawed, and all manufactures of leather, or of which leather is the article of chief value (not being otherwise particularly enumerated).

Cabinet wares.

Medicinal drugs, except those commonly used in dyeing.

Hats, caps, and bonnets, of every sort. Gloves and mittens.


Millinery, ready made.

Artificial flowers, feathers, and other ornaments for women’s head-dresses.


Dolls, dressed and undressed.


Buttons of every kind.

Carpets and carpeting, mats and floor-cloths.


Sheathing and cartridge paper.

All powders, pastes, balls, balsams, ointments, oils, waters, washes, tinctures, essences, liquors, or other preparation or composition, commonly called sweet scents, odors, perfumes, or cosmetics.

All dentifrice, powders, tinctures, preparations, or compositions, whatsoever, for the teeth or gums.

Printed books, except those specially imported for a college, academy or other public or incorporated seminary of learning or institution, which shall be wholly exempted from duty.

The foregoing duties to be permanently established, and to be appropriated, in the first place, to the payment of the interest of the public debt; in the second, to such other grants and appropriations as have been heretofore made; and in the third, to the purposes of the act for making further and more effectual provision for the protection of the frontiers of the United States.

An addition of two and a half per cent. ad valorem to be made to the duty on all goods heretofore rated at five per centum ad valorem.

This addition to be temporary, and accordingly to be so established as that it shall not continue longer than till the present Indian war shall terminate, and the expenses of carrying it on shall have been defrayed, which will of course include the reimbursement of any sums that may have been borrowed by way of anticipation of the product of the duties.

It is represented that the present duty on salt operates unequally, from the considerable difference in weight, in proportion to quantity, of different kinds of salt; a bushel weighing from about fifty-six to upward of eighty weight. It would have an equalizing effect if the bushel were defined by weight; and if fifty-six pounds were taken as the standard, a valuable accession to the revenue would result.

This regulation is, therefore, submitted as a resource upon the present occasion; the rate of duty to remain as it is.

It will be a reasonable accommodation to trade, if it is made a part of this arrangement, to extend the credit for the duty on salt to a longer term. It is an article which, from the circumstances of its importation, frequently lies on hand for a considerable time; and in relation to the fisheries, is usually sold upon a credit of several months.

Some remarks may be proper in regard to the proposed duties. Those on spirits and wines may appear high. They are, doubtless, considerable. But there are precedents, elsewhere, of much higher duties on the same articles. And it is certainly, in every view, justifiable to make a free use of them for the purpose of revenue.

Wines, generally speaking, are the luxury of classes of the community who can afford to pay a considerable duty upon them.

It has appeared advisable to adhere to the idea of a specific duty per quantity on all the species of wines in most common consumption in the country, and those most susceptible of precise designation, as affording greatest certainty to the revenue; and to adopt a general ad-valorem rate for other kinds, proportioned to the specific duties. This rate is forty per cent.

The distinction has proceeded from the difficulty of a precise enumeration of all the other kinds of wine which are, and may be, imported, and of such an adjustment of specific rates as will bear some reasonable proportion to the value of the article. The present lowest rate of duty on wines amounts to two hundred and three hundred per cent. on the value of certain kinds, which may be considered as equivalent to a prohibition.

While, therefore, ideas of proportion will be better consulted than heretofore by the proposed arrangement, it is probable that the revenue will be benefited, rather than injured, by a reduction of the duties on low-priced wines.

The considerations which render ardent spirits a proper object of high duties have been repeatedly dwelt upon. It may be added, that it is a familiar and a just remark that the peculiarly low price of ardent spirits in this country is a great source of intemperance.

To bring the price of the article more nearly to a level with the price of it in other markets by an increase of duty, while it will contribute to the advancement of the revenue, cannot but prove, in other respects, a public benefit.

The rates proposed will be still moderate, compared with examples in other countries; and the article is of a nature to enable the importer, without difficulty, to transfer the duty to the consumer.

A discrimination is suggested in respect to duties on spirits distilled from grain. To this there have been two inducements: one, that the difference in the duty is conformable to the difference between the cost of the grain spirits usually imported, and that of West India rum. Another, that it is in a particular manner the interest of the United States to favor the distillation of its own grain, in competition with foreign spirits from the same material. In the second division of spirits, the first class of proof is dropped, because none of it comes from the West Indies, and because any other spirits, usually imported, which may be of so low a proof, are higher priced, even than some of the higher proofs of West India spirits. The dropping of that class of proof, therefore, in this case, is favorable to the revenue, and favorable to equality.

Several of the other specific duties which are proposed, besides the inducements to them as items of revenue, are strongly recommended by considerations which have been stated in the report of the Secretary, on the subject of manufactures. The same report states inducements to a 15 per cent. duty on some of the articles which are mentioned, as proper to be comprised under that rate.

With regard to china and glass, there are two weighty reasons for a comparatively high duty upon them. The use of them is very limited, except by the wealthier classes; and both their bulk and liability to damage in transportation are great securities against evasions of the revenue. It will, however, merit consideration, whether, for the accommodation of importers, a longer term of credit ought not to be allowed on these articles.

A duty of two cents per pound on cocoa is less, in proportion to the value, than the present duty on coffee. As an extensive article of consumption, it is a productive one of revenue.

The duty on playing-cards can give rise to no question except as to the practicability of a safe collection. In order to this, it will be proper to super-add certain precautions, which will readily occur in regulating the details of a bill for the purpose. A similar attention will be requisite in regard to the duties on wines. The employment of marks and certificates may advantageously be extended to this article.

The rate of 10 per centum ad valorem, it is hoped, will not be deemed immoderate in relation to the articles to which it is proposed to apply it. It is difficult to assign rules for what ought to be considered as a just standard. But, after the best consideration which the Secretary has been able to bestow upon it, he cannot discover that any real inconvenience is likely, permanently, to result from the extension of that rate to the cases proposed.

The addition of 2½ per cent. to the duty on the mass of articles now rated at five, will constitute an important, though not an excessive, augmentation. Nevertheless, it is proposed that it shall be only temporary; and there is reasonable ground of expectation, that the cause for having recourse to it will not be of very long continuance.

It will not have escaped the observation of the House, that the duties which were suggested in the Secretary’s report on that subject, as encouragements to manufactures, are, for the most part, included among the objects of this report.

It may tend to avoid future embarrassment, if such abolitions and drawbacks as shall be deemed expedient, with a view to promoting manufactures, shall accompany the establishment and appropriation of whatever further duties may be laid, for the object in contemplation. And it may be found convenient to qualify the appropriation of the surplus which is to be applied to that object, so as to let in such other appropriations, during the session, as occurrences may suggest.

An estimate of the additional revenue which may be expected from the proposed duties is subjoined.

It will occur to the House, that the credit allowed for the duties will require an anticipation of their product by a temporary loan, for which provision in the law will be requisite.
All of which is humbly submitted.

Alexander Hamilton,

Secretary of the Treasury.

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The Works of Alexander Hamilton, ed. Henry Cabot Lodge (Federal Edition) (New York: G.P. Putnam’s Sons, 1904). In 12 vols. The copyright for the original of this document is held in the Public Domain. Font, formatting, spelling modernizations, typo/transcription corrections, and explanatory footnotes for this version of  ”The Works of Alexander Hamilton” Copyright © 2011 Steve Farrell and Self-Educated American.