the specie in the Treasury could not be safely reduced below that amount.[1] He informed Joseph Nicholson that $150,000 was the utmost sum he could spare. The sum wanted was $750,000 per annum. A Bill was introduced which imposed an additional duty of 2½ per cent on all imports that paid duty ad valorem. These imports had been divided, for purposes of revenue, into three classes, taxed respectively 12½, 15, and 20 per cent; the increase raised them to 15, 17½ and 22½ per cent. The average ad valorem duty was before about 13½; the additional tax raised it above 16 per cent; and the Republicans preferred this method of raising money as in every way better than the system of internal taxation. After imposing the additional duty of 2½ per cent,—a duty intended to produce about $750,000,—the Bill made of it a separate Treasury account, to be called the "Mediterranean Fund," which was to last only as long as the Mediterranean war should last, when the 2½ per cent duty was to cease three months after a general peace.
The Mediterranean Fund was meant as a protest against loose expenditure,—a dike against the impending flood of extravagance. The Mediterranean war was the first failure of President Jefferson's theory of foreign relations, and the Mediterranean Fund was the measure of the error in financial form. No reproach henceforward roused more ill temper
- ↑ Speech of John Randolph, March 22, 1804; Annals of Congress, 1803-1804, p. 1221.
