ON 1 JANUARY 1814 THE NEW TAXES authorised by Congress the previous August came into effect. These internal excise duties, on the distillation and sale of spirits, sugar refining, auctions, carriages, bank notes and ‘negotiable paper’, were accompanied by ‘direct’ taxes on land, property and slaves. Customs duties alone were failing to meet wartime expenditure and, with public borrowing becoming increasingly difficult, taxation of a wider range of spending had become unavoidable. But these distasteful revivals of earlier Federalist taxes would, as before, have to be paid by the affluent, be predictably unpopular and, if possible, be evaded. Worse, they were together estimated to yield no more net revenue than $5.6m, not enough when set against the government's increasingly urgent need. Funds for the first three months of 1814 had been sought as an additional loan of $7.5m, agreed in Congress the previous summer: a fiscal and financial consequence of the United States declining overseas trade.

By February 1814 Federalist Joseph Pearson of North Carolina told the House that ‘the expenditures of the Government, from January 1812, to January 1815, will have exceeded ninety millions of dollars, exclusive of many millions of outstanding claims’. They had, in fact, exceeded $96.5m by December 1814.