The revenues for the year ended September 30, 1801, were the basis of the estimates for future years. These were Duties on imports and tonnage $10,126,213.92 Internal revenue 854,000.00 Land sales 400,000.00 -------------- $11,380,213.92 But the close of the war in Europe sensibly diminished the enormous carrying trade which fell to the United States as neutrals, and, as a consequence, the revenue from that source; large quantities of goods were brought into the United States and reexported to foreign ports under a system of debenture. The revenue on what Mr. Gallatin calls "this accidental commerce" was $1,200,000. He therefore _estimated the permanent revenues at_ Customs duties $9,500,000 Land sales 400,000 Postage 50,000 Internal revenue 650,000 ----------- $10,600,000 Or, without the internal revenue, say ten millions of permanent revenue, as a basis for _the permanent expenditures_. To bring the expenditures within this sum, however, a reduction in the army and navy establishments was necessary. This Gallatin soon found to be too radical a measure for success, either in the cabinet or Congress, however well it may have accorded with Jefferson's utopian views. In the budget of 1802 the internal revenue, $650,000, was, therefore, a necessary item. The expenditures proposed were Annual appropriation for interest and principal of debt $7,100,000 Civil list $780,000 Foreign intercourse 200,000 Military and Indian Dept 1,420,000 Naval 1,100,000 ----------- $3,500,000 3,500,000 ----------- $10,600,000