History can be often be colorful, and reading the State of the Union addresses, often contain interesting stories and controversial policies. But, at other times there are just facts and figures. But sometimes it's these facts and figures that help us understand the times better. In President James Monroe's first State of the Union address he outlined the current and anticipated budget for the United States. Monroe was pleased to share with the joint session of Congress, that for the present year, it was estimated that a balance of more than $6 million would remain in the treasury. After paying for both military and domestic appropriations, and interest payments the government was able to pay off more than $18 million of it's debt.
The President then shared his estimate of the revenues and expenses expected for 1818. In 1817, there was no Congressional Budget Office, and quite often the State of the Union served as a forum for reviewing this information. Madison estimated that the receipts for 1817 would be $24.5 million, and expenses would be $21.8 million leaving a budget surplus of $2.7 million. Something quite unheard of these days. Monroe broke down the source of revenue into three categories. $20 million would come from imposts and tonnage, mostly in the form of duties or tariffs, $2.5 million from internal revenues, and $1.5 million from public lands. The remaining $500,000 came from bank dividends and miscellaneous receipts.
Tariffs - 80%
Thus, Monroe was predicting that 80% of the nation's revenue would come from duties and tariffs. This was in a great part due to the Tariff of 186, which was passes on April 27, 1816 with support from both the North and surprisingly from the South as well. Some southern patriots, war hawks like Henry Clay of Kentucky were strident foes of British aggression and saw this tariff as a war measure and vital to the survival of the American republic. The tariff placed a duty of twenty-five percent on cottons and woolens until June 1819, at which time it would drop to twenty percent. A twenty-five percent tariff was also placed on manufactured iron, while a thirty percent duty was placed on leather, paper and hats.Monroe was a supporter of the tariffs, as he felt that manufactures were of "high interest" to the nation and in need of some "encouragement".
Our manufactories will require the continued attention of Congress. The capital employed in them is considerable, and the knowledge acquired in the machinery and fabric of all the most useful manufactures is of great value. Their preservation, which depends on due encouragement, is connected with the high interests of the nation.
Internal Revenues - 10%
Internal revenues accounted for only about 10% of the revenue. In 1814, Congress enacted taxes on houses, land, slaves, auction sales, carriages and refined sugar. After the war of 1812 ended, this was expanded to include the nation's first sales taxes on gold, silverware, jewelry, and watches. After 1817, however, Congress did away with all internal taxes, relying on tariffs and the sale of public lands.Public Lands - 6%
The smallest amount of revenue, about 6% came from the sale of public lands. President Monroe delivered proclamations where public lands would be offered to the highest bidder. For example, in 1817 lands along the lower rapids of Sandusky River were auctioned off.Wherefore I, James Monroe, President of the United States, in conformity with the provisions of the acts before recited, do hereby declare and make known that the lands authorized to be sold by the first-mentioned act shall be offered for sale to the highest bidder ..
Here is the full excerpt from President Monroe's 1817 address:
"In calling your attention to the internal concerns of our country the view which they exhibit is peculiarly gratifying. The payments which have been made into the Treasury show the very productive state of the public revenue. After satisfying the appropriations made by law for the support of the civil Government and of the military and naval establishments, embracing suitable provision for fortifications and for the gradual increase of the Navy, paying the interest of the public debt, and extinguishing more than $18M of the principal, within the present year, it is estimated that a balance of more than $6M will remain in the Treasury on the first day of January applicable to the current service of the ensuing year.
The payments into the Treasury during the year 1818 on account of imposts and tonnage, resulting principally from duties which have accrued in the present year, may be fairly estimated at $20M; the internal revenues at $2.5M; the public lands at $1.5M; bank dividends and incidental receipts at $500,000; making in the whole $24.5M.
The annual permanent expenditure for the support of the civil Government and of the Army and Navy, as now established by law, amounts to $11.8M, and for the sinking fund to $10M, making in the whole $21.8M, leaving an annual excess of revenue beyond the expenditure of $2.7M, exclusive of the balance estimated to be in the Treasury on the first day of January, 1818.
In the present state of the Treasury the whole of the Louisiana debt may be redeemed in the year 1819, after which, if the public debt continues as it now is, above par, there will be annually about $5M of the sinking fund unexpended until the year 1825, when the loan of 1812 and the stock created by funding Treasury notes will be redeemable.
It is also estimated that the Mississippi stock will be discharged during the year 1819 from the proceeds of the public lands assigned to that object, after which the receipts from those lands will annually add to the public revenue the sum of $1.5M, making the permanent annual revenue amount to $26M, and leaving an annual excess of revenue after the year 1819 beyond the permanent authorized expenditure of more than $4M."
http://www.presidency.ucsb.edu/ws/index.php?pid=29459
http://www.presidency.ucsb.edu/ws/?pid=66454
https://en.wikipedia.org/wiki/Tariff_of_1816
http://what-when-how.com/the-american-economy/protective-tariffs-1816-1930/
http://www.stateoftheunionhistory.com/2016/11/1814-james-madison-paying-for-war-of.html
http://www.infoplease.com/ipa/A0005921.html
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