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Colonial and State Records of North Carolina
Circular letter from Samuel Osgood, Walter Livingston, and Arthur Lee to the state governors
Osgood, Samuel, 1748-1813; Livingston, Walter, 1740-1797; Lee, Arthur, 1740-1792
November 13, 1786
Volume 18, Pages 779-782

[From Executive Letter Book.]

Board of Treasury, November 13th, 1786.



We have the honor of transmitting to your Excellency the General requisition of the United States in Congress for the present Year, which we request the favor of you to lay before the Legislature of the State in which you have the honor to preside. By the enclosed Schedule your Excellency will observe that the amount of the deficiencies, due from the several States is no less than 8,523,252 67-90ths Dollars.

As these requisitions are made for the express purpose of defraying the Interest of the Foreign & Domestic Debt, and the charges of the Civil Government, the Legislative Bodies of the several States will easily Judge to what embarrassments the Union must necessarily be reduced for want of sufficient funds to discharge these essential engagements.

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The whole amount of the Requisitions since the first of September, 1782, is
Of which to the 31 December, 1783, had only been paid in Specie
And since that period to 30 June, 1786, in Specie.
Deficiency on the Requisition to 30th June, 1786
As above
By examining the Estimates of the Sums necessary to be raised by the several States in Specie, since the 27th of April, 1784, it appears that for discharging Specie engagements unsatisfied in 1783, and for the support of the Civil Establishment and payment of Interest on the Foreign Debt there was called for by that Requisition
By that of the 27th Sept. 1785, for payment of the Foreign Interest and Support of the Civil Government
By that of the 2nd August, 1786, for the objects mentioned, and for discharging certain installments of the principal of the French Loans
Since the first of December, 1783, to the 30th June, 1786, there appears to have been paid into the Treasury in Specie
Out of which the Sum of
Past to the Credit of the State of South Carolina, was for supplies furnished and Credited, as Specie by a Special Agreement with the late Superintendents of Finance, which if deducted leaves
By the Requisition of the 27th & 28th of April, 1784, which was required for the support of the Civil Government
By that of the 27th of Sept. 1785
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By that of the 2nd August, 1786
Of which a Moiety to 30th June, 1786, is
As above

So that the surplus of the Receipt beyond what was necessary to defray the Charges of the Government in the course of two and a half years, that is from 31st Dec., 1783, to the 30th June, 1786, is only 39,032 22-90ths Dollars to be applied towards this discharge of the Specie engagements above mentioned.

The result of the Facts above stated is, that unless the several States adopt without delay a more efficient mode of supplying the General Treasury than has hitherto been adopted, the Confederacy of the States on which their existence depends, must inevitably be dissolved.

In Considering the Acts of the Legislatures of those States which have complied with the several Requisitions, the principal causes of the extraordinary deficiency resulting from their operation appears to be as follows, viz:

1st. That the Taxes intended for the purposes of the Union are blended with those which are necessary to be raised for State purposes.

2nd. That the Laws by which they are imposed depend more for their Execution on the Diligence and Integrity of the Officers entrusted with the Collection, than on the Nature of the Tax, or in other words too much reliance is placed on direct Taxation.

3rd. That the Specie sums to be paid by Individuals in pursuance of the State Requisitions in the discharge of the Federal Taxes not bearing the same proportion to the payment of Indents of interest which is prescribed by the respective Requisitions, the Receipt of Specie is not only thereby retarded, but any deficiency which arises on the Taxes falls off the Specie proportion, of the several requisitions.

If on a mature consideration, what we have pointed out as defects in the Acts above referred to should appear to be such to the several Legislatures, we may venture to hope that their Zeal to preserve

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the Union will induce them to make effectual provision for Remedying the same, so that the Balances of Specie respectively due from them, may without delay, be brought into the General Treasury.

By the Union of the several States they have rescued themselves from the projected Tyranny of a powerful Nation; and established Constitutions on the free consent of the people; which if properly executed, would in all probability prove the firm Support of the Civil and Religious Rights of those who live under their influence. But these Constitutions cannot long out live the fate of the General Union; And this Union cannot exist without Adequate Funds to defray the Expences of the Government and to discharge those Engagements which have been entered into with the Concurrence of all the States for the common benefit.

In the first Rank of these engagements the Legislatures of the several States will undoubtedly consider the Foreign Debt on which the Ammutation has become so great, that all hopes of our ability to discharge the same from the ordinary operation of Requisitions are altogether at an End. If therefore far greater Exertions are not made by the several States, to furnish their respective Quotas than have hitherto taken place, the delinquent States must be Responsible for all those Evils which must inevitably flow from a disregard to the political ties which unite them with the other Members of the Confederacy and to those principles of Justice and Good Faith, which can alone support the Existence of a free Government.

We are with the Greatest Respect,
Your Excellency's Most Obedient
And Humble Servants,