1807 Thomas Jefferson - Accumulation of the Surpluses

After the revolutionary war, Hamilton proposed that the new federal government assume all debts of the states incurred from the war.  To cover this national debt, which Hamilton estimated at $77 million, federal bonds were issued.   This debt stayed on the books through the presidency of Washington and Madison.   Then during the presidency of Thomas Jefferson, the U.S. enjoyed relative peace and increased revenues, and the government was able to start paying down the debt.  Under Jefferson's Treasury Secretary, Albert Gallatin, the debt went as low as $45 million.  In 1807, Thomas Jefferson closed his seventh annual address with a few words about the current finances of our government.  Jefferson was happy to note that more than $4 million of the public debt had been extinguished in the past year, and a total of $25.5 million in the past 5.5 years.  But there's more.  The government by contract was limited to how much of the debt could be retired, so there was still money left over.   There was an additional $8.5 million left in the U.S. Treasury.   What should be done with this treasure.   Jefferson pointed out that treasures were accumulating without any specific plan as to how to spend it.   Some of it could be used to shore up our defenses, but surely there were other uses for this money.    So Jefferson told congress it was in their hands.   He found it a "great consolation" to know that the "supreme council of the nation" would be "ready to give the aids of its wisdom and authority to whatever course the good of our country shall then call us to pursue."   "Aids of its wisdom",  was Jefferson trying to make a joke?  Could you imagine today worrying about what to do with a government surplus?  Here are Jefferson's actual words from his annual address of 1807

"A portion of this sum may be considered as a commencement of accumulation of the surpluses of revenue which, after paying the installments of debt as they shall become payable, will remain without any specific object. It may partly, indeed, be applied toward completing the defense of the exposed points of our country, on such a scale as shall be adapted to our principles and circumstances. This object is doubtless among the 1st entitled to attention in such a state of our finances, and it is one which, whether we have peace or war, will provide security where it is due. Whether what shall remain of this, with the future surpluses, may be usefully applied to purposes already authorized or more usefully to others requiring new authorities, or how otherwise they shall be disposed of, are questions calling for the notice of Congress, unless, indeed, they shall be superseded by a change in our public relations now awaiting the determination of others. Whatever be that determination, it is a great consolation that it will become known at a moment when the supreme council of the nation is assembled at its post, and ready to give the aids of its wisdom and authority to whatever course the good of our country shall then call us to pursue."

http://www.presidency.ucsb.edu/ws/index.php?pid=29449
http://www.heritage.org/research/reports/2013/10/national-debt-and-the-founding-fathers