A letter from General Washington was received, notifying the death of Lord Stirling, and enclosing a report of the officer sent to apprehend Knowlton and Wells. (See p. 8.)

The following is an extract from the report:—

"He (one Israel Smith) further said, that Knowlton and Wells had received a letter from Jonathan Arnold, Esquire, at Congress part of which was made public, which informed them that affairs in Congress were unfavorable to them, and would have them to look out for themselves. What other information this letter contained, he could not say. I found, in my march through the state, that the last-mentioned gentleman was much in favor with all the principal men in that state I had any conversation with."

Mr. ARNOLD, being present at the reading, informed Congress that he was surprised now such a notion should have prevailed with respect to him; that he had never held any correspondence with either Knowlton or Wells; and requested that he might be furnished with the extract above. In this he was indulged without opposition. But it was generally considered, notwithstanding his denial of the correspondence, that he had, at least at second-hand, conveyed the intelligence to Vermont.

A long petition was read, signed, as alleged, by nearly two thousand inhabitants (but all in the same hand-writing) of the territory lately in controversy between Pennsylvania and Virginia, complaining of the grievances to which their distance from public authority exposed them, and particularly of a late law of Pennsylvania interdicting even consultations about a new state within its limits, and praying that Congress would give a sanction to their independence, and admit them into the Union. the petition lay on the table, without a single motion or remark relative to it.

The order of the day was called for—to wit, the resolution of Saturday last in favor of adequate and substantial funds.

The subject was introduced by Mr. WILSON, with some judicious remarks on its importance, and the necessity of a thorough and serious discussion of it. He observed, that the United States had, in the course of the revolution, displayed both an unexampled activity in resisting the enemy, and an unexampled patience under the losses and calamities occasioned by the war. In one point only, he said, they had appeared to be deficient, and that was, a cheerful payment of taxes. In other free governments, it had been seen that taxation had been carried farther, and more patiently borne, than in states where the people were excluded from the governments; the people considering themselves the sovereign as well as the subject, and as receiving with one hand what they paid with the other. The peculiar repugnance of the people of the United States to taxes, he supposed, proceeded, first, from the odious light in which they had been, under the old government, in the habit of regarding them; secondly, from the direct manner in which taxes in this country had been laid, whereas in all other countries taxes were paid in a way that was little felt at the time. That it could not proceed altogether from inability, he said, must be obvious; nay, that the ability of the United States was equal to the public burden, could be demonstrated. According to calculations of the best writers, the inhabitants of Great Britain paid, before the present war, at the annual rate of at least twenty-five shillings sterling per head. According to like calculations, the inhabitants of the United States, before the revolution, paid, indirectly and insensibly, at the rate of at least ten shillings sterling per head. According to the computed depreciation of the paper emissions, the burden insensibly borne by the inhabitants of the United States had amounted, during the first three or four years of the war, to not less than twenty millions of dollars per annum—a burden, too, which was the more oppressive as it fell very unequally on the people. An inability, therefore, could not be urged as a plea for the extreme deficiency of the revenue contributed by the states, which did not amount, during the past year, to half a million of dollars; that is, to one sixth of a dollar per head. Some more effectual mode of drawing forth the resources of the country was necessary. That, in particular, it was necessary that such funds should be established as would enable Congress to fulfil those engagements which they had been enabled to enter into. It was essential, he contended, that those to whom was delegated the power of making war or peace should, in some way or other, have the means of effectuating these objects; that, as Congress had been under the necessity of contracting a large debt, justice required that such funds should be placed in their hands as would discharge it; that such funds were also necessary for carrying on the war, and as Congress found themselves, in their present situation, destitute both of the faculty of paying debts already contracted, and of providing for future exigencies, it was their duty to lay that situation before their constituents, and at least to come to an eclaircissement on the subject. He remarked, that the establishment of certain funds for paying would set afloat the public paper; adding, that a public debt, resting on general funds, would operate as a cement to the Confederacy, and might contribute to prolong its existence, after the foreign danger ceased to counteract its tendency to dissolution. He concluded with moving that it be resolved,—

"That it is the opinion of Congress that complete justice cannot be done to the creditors of the United States, nor the restoration of public credit be effected. nor the future exigencies of the war provided for, but by the establishment of general funds, to be collected by Congress."

This motion was seconded by Mr. FITZSIMMONS.

Mr. BLAND desired that Congress would, before the discussion proceeded further, receive a communication of sundry papers transmitted to the Virginia delegates by the executive of that state, two of which had relation to the question before Congress. These were—first, a resolution of the General Assembly, declaring its inability to pay more than fifty thousand pounds, Virginia currency, towards complying with the demands of Congress; secondly, the act repealing the act granting the impost of five per cent. These papers were received and read.

Mr. WOLCOTT expressed some astonishment at the inconsistency of these two acts of Virginia; supposed that they had an unfavorable aspect on the business before Congress, and proposed that the latter should be postponed for the present. He was not seconded.

Mr. GORHAM favored the general idea of the motion, animadverting on the refusal of Virginia to contribute the necessary sums, and at the same moment repealing her concurrence in the only scheme that promised to supply a deficiency of contributions. He thought the motion, however, inaccurately expressed, since the word "general" might be understood to refer to every possible object of taxation, as well as to the operation of a particular tax throughout the states. He observed that the non-payment of the one million two hundred thousand dollars demanded by Congress, for paying the interest of the debts for the year—demonstrated that the constitutional mode of annual requisitions was defective; he intimated that lands were already sufficiently taxed, and that polls and commerce were the most proper objects. At his instance, the latter part of the motion was so amended as to run "establishment of permanent and adequate funds to operate generally throughout the United States."

Mr. HAMILTON went extensively into the subject; the sum of it was as follows: he observed that funds considered as permanent sources of revenue were of two kinds—first, such as would extend generally and uniformly throughout the United States, and would be collected under the authority of Congress; secondly, such as might be established separately within each state, and might consist of any objects which were chosen by the states, and might be collected either under the authority of the states or of Congress. Funds of the first kind, he contended, were preferable; as being, first, more simple, the difficulties attending the mode of fixing the quotas laid down in the Confederation rendering it extremely complicated, and in a manner insuperable; secondly, as being more certain, since the states, according to the said plan, would probably retain the collection of the revenue, and a vicious system of collection prevailed generally throughout the United States—a system by which the collectors were chosen by the people, and made their offices more subservient to their popularity than to the public revenue; thirdly, as being more economical. since the collection would be effected with fewer officers. under the management of Congress, than under that of the states.

Mr. GORHAM observed, that Mr. Hamilton was mistaken in the representation he had given of the collection of taxes in several of the states, particularly in that of Massachusetts, where the collection was on a footing which rendered it sufficiently certain.

Mr. WILSON, having risen to explain something which had fallen from him, threw out the suggestion that several branches of the revenue, if yielded by all the states, would perhaps be more just and satisfactory than any single one; for example, an impost on trade combined with a land tax.

Mr. DYER expressed a strong dislike to a collection by officers appointed under Congress, and supposed the states would never be brought to consent to it.

Mr. RAMSAY was decidedly in favor of the proposition. Justice, he said, entitled those who had lent their money and services to the United States to look to them for payment that if general and certain revenues were not provided, the consequence would be that the army and public creditors would have soon to look to their respective states only for satisfaction; that the burden in this case would fall unequally on the states; that rivalships relative to trade would impede a regular impost, and would produce confusion among the states; that some of the states would never make, of themselves, provision for half-pay, and that the army would be so far defrauded of the rewards stipulated to them by Congress; that although it might be uncertain whether the states would accede to plans founded on the proposition before the house, yet, as Congress was convinced of its truth and importance, it was their duty to make the experiment.

Mr. BLAND thought, that the ideas of the states on the subject were so averse to a general revenue in the hands of Congress, that if such a revenue were proper it was unattainable; that as the deficiency of the contributions from the states, proceeded, not from their complaints of their inability,but of the inequality of the apportionments, it would be a wiser course to pursue the rule of the Confederation, to wit, to ground the requisition on an actual valuation of lands; that Congress would then stand on firm ground, and try a practicable mode.

[Note *: * The papers just read, from Virginia, complained of her inability, without mentioning an inequality. This was deemed a strange assertion,]

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