The impost duties for the fiscal year ending September 30, 1802, rose to $12,280,000, the sales of the public lands to $326,000, and the postage to $50,500, a total of $12,656,500, and left in the Treasury, September 30, 1802, the sum of $4,539,675.

This large increase in the Treasury did not in the least change Mr.Gallatin's general plan, and his budget for 1803 was based on his original scale of a permanent revenue of $10,000,000, to correspond with which the estimates of the preceding year were reduced.

The fiscal year closed September 30, 1803, with a balance in the Treasury of $5,860,000.

This situation of the finances was fortunate in view of secret negotiations which the President and Congress were initiating for the purchase of Louisiana from France.
The secretaries of war and of the navy had promised to reduce their expenditures to a figure approximate to Mr.Gallatin's estimates; but the breaking out of hostilities with Tripoli prevented the proposed economy, and Mr.Gallatin was called upon to provide for an increased expenditure with one certain source of revenue definitively closed.

He therefore proposed an additional tax of two and one half per cent.