ncipal has been effected without the aid of
any internal taxes, either direct or indirect, without any addition
during the last seven years to the rate of duties on importations,
which on the contrary have been impaired by the repeal of the duty
on salt, and notwithstanding the great diminution of commerce
during the last four years._ It therefore proves decisively the
ability of the United States with their ordinary revenue to
discharge, in ten years of peace, a debt of forty-two millions of
dollars, a fact which considerably lessens the weight of the most
formidable objection to which that revenue, depending almost solely
on commerce, appears to be liable. In time of peace it is almost
sufficient to defray the expenses of a war; in time of war it is
hardly competent to support the expenses of a peace establishment.
Sinking at once, under adverse circumstances, from fifteen to six
or eight millions of dollars, it is only by a persevering
application of the surplus which it affords us in years of
prosperity, to the discharge of the debt, that a total change in
the system of taxation or a perpetual accumulation of debt can be
avoided. But if a similar application of such surplus be hereafter
strictly adhered to, forty millions of debt, contracted during five
or six years of war, may always, without any extraordinary
exertions, be reimbursed in ten years of peace. This view of the
subject at the present crisis appears necessary for the purpose of
distinctly pointing out one of the principal resources within reach
of the United States. But to be placed on a solid foundation, it
requires the aid of a revenue sufficient at least to defray the
ordinary expenses of government, and to pay the interest on the
public debt, including that on new loans which may be authorized."

From this plain declaration, it was evident that the sum necessary to
pay interest on new loans, and provide for their redemption by the
operation of the sinking fund, could not be obtained from the ordinary
sources of revenue, and that resort must be had to extraordinary imposts
or direct taxation. On January 10, 1812, in response to an inquiry of
the Ways and Means Committee as to an increase of revenue in _the event
of a war_, Gallatin submitted a project for war loans of ten millions a
year, irredeemable for ten years. He