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TO BOTH HOUSES OF CONGRESS, At the commencement of the Second Session of the Twenty

fourth Congress. Fellow-citizens of the Senate and House of Representatires:

Addressing to you the last annual message I shall ever present to the Congress of the United States, it is a source of the most heartfelt satisfaction to be able to congratulate you on the high state of prosperity which our beloved country has attained. With no causes at home or abroad to lessen the confidence with which we look to the future for continuing proofs of the capacity of our free institutions to produce all the fruits of good government, the general condition of our affairs may well excite our national pride.

I cannot avoid congratulating you, and my country particularly, on the success of the efforts made during my administration by the Executive and Legislature, in conformity with the sincere, constant, and earnest desire of the people, to maintain peace, and establish cordial relations with all foreign Powers. Our gratitude is due to the Supreme Ruler of the Universe, and I invite you to write with me in offering to him fervent supplication, that his providential care may ever be extended to those who follow us, enabling them to avoid the dangers and the horrors of war, consistently with a just and indis. pensable regard to the rights and honor of our country. But, although the present state of our foreign affairs, standing without important change as they did when you separated in July last, is Aattering in the extreme, I regret to say that many questions of an interesting character, at issue with other Powers, are yet unadjusted. Amongst the most prominent of these is that of our northeastern boundary. With an undiminished confidence in the sincere desire of his Britannic Majesty's Government to adjust that question, I am not yet in possession of the precise grounds upon which it proposes a satisfactory adjustment.

With France, our diplomatic relations have been resumed, and under circumstances which attest the dispo. sition of both Governments to preserve a mutually be. neficial intercourse, and foster those amicable feelings which are so strongly required by the true interest of the two countries. With Russia, Austria, Prussia, Naples, Sweden, and Denmark, the best understanding exists, and our commercial intercourse is gradually expanding itself with them. It is encouraged in all these countries, except Naples, by their mutually advantageous and liberal treaty stipulations with us.

The claims of our citizens on Portugal are admitled to be just, but provision for the payment of them has been unfortunately delayed by frequent political changes in that kingdom.

Vol. XII --A

The blessings of peace have not been secured by Spain. Our connexiong with that country are on the best footing, with the exception of the burdens still imposed upon our commerce with her possessions out of Europe.

The claims of American citizens for losses sustained at the bombardment of Antwerp, have been presented to the Governments of Holland and Belgium, and will be pressed, in due season, to settlement.

With Brazil, and all our neighbors of this continent, we continue to maintain relations of amity and concord, extending our commerce with them as far as the resources of the people and the policy of their Governments will permit. The just and long-standing claims of our citizens upon some of them are yet sources of dissatisfaction and complaint. No danger is apprehended, however, that they will not be peacefully, although tardily, acknowledged and paid by all, unless the irritating effect of her struggle with Texas should unfortunately make our immediate neighbor, Mexico, an exception.

It is already known to you, by the correspondence be. tween the twoGovernments communicated at your last segsion, that our conduct in relation to that struggle is regu. lated by the same principles that governed us in the dispute between Spain and Mexico herself; and I trust that it will befound, on the most severe scrutiny, that our actshave strictly corresponded with our professions. That the inbab. itants of the United States should seel strong prepossessions for the one party, is not surprising. But this circumstance should, of itself, teach us great caution, lest it lead us into the great error of suffering public policy to be regulated by partiality or prejudice; and there are considerations connected with the possible result of this contest between the two parties of so much delicacy and importance to the United States, that our character requires that we should neither anticipate events, nor attempt to control them. The known desire of the Texans to become a part of our system, although its gratification depends upon the reconcilement of various and conflicting interests, necessarily a work of time, and uncertain in itself, is calculated to expose our conduct to misconstruction in the eyes of the world. There are already those who, indifferent to principle themselves, and prone to suspect the want of it in others, charge us with ambitious designs and insidious policy. You will perceive by the accompanying documents, that the extraor. dinary mission from Mexico has been terminated, on the sole grounds that the obligations of this Government to itself

and to Mexico, under treaty stipulations, have compelled me to trust a discretionary authority to a high officerof our army, to advance into territory claimed as part of Texas, if necessary, to protect our own or the neighþoring frontier from Indian depredation. In the opinion of the Mexican functionary, who has just left us, the honor of his country will be wounded by American sol. diers entering, with the most amicable avowed purposes,

24th Cong. 24 Sess.)

Message of the President of the United States.

upon ground from which the followers of his Government have been expelled, and over which there is at present no certainty of a serious effort on its part being made to re-establish its dominion. The departure of this minister was the more singular, as he was apprized that the sufficiency of the causes assigned for the advance of our troops by the commanding general had been seriously doubted by me, and that there was every reason to suppose that the troops of the United States, their commander having had time to ascertain the truth or falsehood of the information upon which they had been marched to Nacogdoches, would be either there in perfect accordance with the principles admitted to be just in his conference with the Secretary of State, by the Mexican minister himself, or were already withdrawn in consequence of the impressive warnings their commanding officer had received from the Department of War. It is hoped and believed that his Government will take a more dispassionate and just view of this subject, and not be disposed to construe a measure of justifiable precautior, made necessary by its known inability in execution of the stipulations of our treaty to act upon the frontier, into an encroachment upon its rights or stain upon its honor.

In the mean time, the ancient complaints of injustice, made on behalf of our citizens are disregarded, and new causes of dissatisfaction have arisen, some of them of a character requiring prompt remonstrance, and ample and immediate redress. I trust, however, by tempering firmness with courtesy, and acting with great forbearance upon every incident that has occurred, or that may happen, to do and to obtain justice, and thus avoid the necessity of again bringing this subject to the view of Congress.

It is my duty to remind you that no provision has been made to execute our treaty with Mexico for tracing Vie boundary line between the two countries. Whatever may be the prospect of Mexico's soon being able to ex. ecute the treaty on its part, it is proper that we should be, in anticipation, prepared at all times to perform our obligations, without regard to the probable condition of those with whom we have contracted them.

The result of the confidential inquiries inade into the condition and prospects of the newly declared Texan Government, will be communicated to you in the course of the session.

Commercial treaties, promising great advantages to our enterprising merchants and navigators, bave been formed with the distant Governments of Muscat and Siam. The ratifications have been exchanged, but have not reached the Department of State. Copies of the treaties will be transmitted to you, if received before, or published, if arriving after, the close of the present session of Congress.

Nothing has occurred to interrupt the good understanding that has long existed with the Barbary Powers, nor to check the good will which is gradually growing up in our intercourse with the dominions of the Govern. ment of the distinguished chief of the Ottoman Empire.

Information has been received at the Department of State, that a treaty with the Emperor of Morocco has just been negotiated, which, I hope, will be received in time to be laid before the Senate previous to the close of the session.

You will perceive, from the report of the Secretary of the Treasury, that the financial means of the country continue to keep pace with its improvement in all other respects. The receipts into the Treasury during the present year will amount to about $47,691,898; those from customs being estimated at $22,523,151; those from lando ai about $24,000,000; and the residue from miscellaneous sources. The expenditures for all objects during the year are estimated not to exceed $32,000,000, which will leave a balance in the Treasury for public

purposes, on the 1st day of January next, of about $41,723,959. This sum, with the exception of five millions, will be transferred to the several States, in ac. cordance with the provisions of the act regulating the deposites of the public money,

The unexpended balances of appropriation on the 1st day of January next, are estimated at $14,636,062, exceeding by $9,636,062 the amount which will be left in the deposite banks, subject to the draft of the Treasurer of the United States, after the contemplated transfers to the several States are made. If, therefore, the future receipts should not be sufficient to meet these outstanding and future appropriations, there may be soon a necessity to use a portion of the funds deposited with the States.

The consequences apprehended when the deposite act of the last session received a reluctant approval, have been measurably realized. Though an act merely for the deposite of the surplus moneys of the United States in the State treasuries for safe keeping, until they may be wanted for the service of the General Government, it has been extensively spoken of as an act to give the money to the several States, and they have been advised to use it as a gift, without regard to the means of refunding it when called for. Such a suggestion has doubt. less been made without a due consideration of the obligation of the deposite act, and without a proper attention to the various principles and interests which are af. fected by it. It is manifest that the law itself cannot sanction such a suggestion, and that, as it now stands, the States have no more authority to receive and use these deposites, without intending to return them, than any deposite bank, or any individual temporarily charged with the sale-keeping or application of the public money would now have for converting the same to their private use, without the consent and against the will of the Government. But independently of the violation of public faith and moral obligation which are involved in this suggestion, when examined in reference to the terms of the present deposite act, it is believed that the consider. ations wbich should govern the future legislation of Congress on this subject will be equally conclusive against the adoption of any measure recognising the principles on which the suggestion has been made.

Considering the intimate connexion of the subject with the financial interests of the country, and its great importance in whatever aspect it can be viewed, I have bestowed upon it the most anxious reflection, and feel it to be my duty to state to Congress such thoughts as have occurred io me, to aid their deliberation in treating it in the mamer best calculated to conduce to the common good.

The experience of other nations admonished us to basten the extinguishment of the public debt; but it will be in vain that we have congratulated each other upon the disappearance of this evil, if we do not guard against the equally great one of promoting the unneces. sary accumulation of public revenue. No political max im is better established than that which tells us that an improvident expenditure of money is the parent of proAigacy, and that no people can hope to perpetuate their liberties, who long acquiesce in a policy which taxes them for objects not necessary to the legitimate and real wants of their Government. Flattering as is the condition of our country at the present period, because of its unexampled advance in all the steps of social and political improvement, it cannot be disguised that there is a lurking danger already apparent in the neglect of this warning truth, and that the time has arrived when the representatives of the people should be employed in devising some more appropriate remedy than now exists, to avert it.

Under our present revenue system, there is every

Message of the President of the United States.

[ 24th Cong. 2d Sess.


probability that there will continue to be a surplus beyond the wants of the Government; and it has become our duty to decide whether such a result be consistent with the true objects of our Government.

Should a surplus be permitted to accumulate beyond the appropriations, it must be retained in the Treasury as it now is, or distributed ainong the people of the States.

To retain it in the Treasury, unemployed in any way, is impracticable. It is, besides, against the genius of our free institutions to lock up in vaults the treasure of the nation. To take from the people the right of bearing arms, and put their weapons of defence in the hands of a standing army, would be scarcely more dangerous to their liberties, than to permit the Government to accumulate immense amounts of treasure beyond the sup. plies necessary to its legitimate wants. Such a treasure would doubtless be employed at some time, as it has been in other countries, when opportunity tempted am. bition.

To collect it merely for distribution to the States, would seem to be highly impolitic, if not as dangerous as the proposition to retain it in the Treasury. The shortest reflection must satisfy every one that, 10 require the people to pay taxes to the Government merely that they may be paid back again, is sporting with the sub. stantial interests of the country, and no system which produces such a result can be expected to receive the public countenance. Nothing could be gained by it, even if each individual who contributed a portion of the tax could receive back promptly the same portion. But, it is apparent, that no system of the kind can ever be enforced, which will not absorb a considerable portion of the money to be distributed in salaries and commissions to the agents employed in the process, and in the various losses and depreciations which arise from other causes; and the practical effect of such an attempt must ever be to burden the people with taxes, not for purposes beneficial to them, but to swell the profits of deposite banks, and support a band of useless public oflicers.

A distribution to the people is impracticable and un. just in other respects. It would be taking one man's property, and giving it to another. Such would be the unavoidable result of a rule of equality, (and none other is spoken of, or would be likely to be adopted,) inasmuch as there is no mode by which the amount of the individual contributions of our citizens to the public revenue can be ascertained. We know that they culltribute unequally; and a rule, therefore, that would distribute to them equally, would be liable to all the oh. jections which apply to the principle of an equal division


principle effect, would be at once to destroy the means of iis usefulness and change the character designed for it by the framers of the constitution.

But the more extended and injurious consequences likely to résult from a policy which would collect a surphis revenue for the purpose of distributing it, may be forcibly illustrated by an examination of the effects already produced by the present deposite act. This act, although certainly designed to secure the safe-keeping of the public revenue, is not entirely free in its tendei. cies from any of the objections which apply to this principle of distribution. The Government had, without necessity, received from the people a large surplus, which, instead of being employed as hierctofore, and re. turned to them by means of the public expenditure, was deposited with sundry banks. The banks proceeded to make loans upon this surplus, and thus converted it into banking capital; and in this manner it has tended to mulliply bank charters, and has had a great agency in pro

ducing a spirit of wild speculation. The possession and use of the properly out of which this surplus was created belonged to the people; but the Government has transferred its possession to incorporated banks, whose interest and effort it is to make large profits out of its use. This process need only be stated to show its injustice and bad policy.

And the same observations apply to the influence which is produced by the steps necessary to collect as well as to distribute such a revenue. About three. fifths of all the duties on imports are paid in the city of New York; but it is obvious that the means to pay those duties are drawn from every quarter of the Union. Every citizen in every State, who purchases and consumes an article which has paid a duty at that port, contributes to the accumulating mass. The surplus collected there, must, therefore, be made up of moneys or property withdrawn from other points and other

Thus the wealth and business of every region from which these surplus funds proceed, must be to some extent injured, while that of the place where the funds are concentrated and are employed in banking are proportionably extended. But both in making the transfer of the funds which are first necessary to pay the duties and collect the surplus, and in making the re-transfer which becomes necessary when the time arrives for the distribution of that surplus, there is a considerable period when the funds cappot be brought into lise; and it is manisest that, besides the loss inevitable from such an operation, its tendency is to produce fluctuations in the business of the country, which are always productive of speculation, and detrimental to the interests of regular trade. Argument can scarcely be necessary to show that a measure of this character ought not to receive further legislative encouragement.

By examining the practical operation of the ratio for disuibution adopted in the deposite bill of the last session, we shall discover other features that appear equally objectionable. Let it be assumed, for the sake of argument, that the surplus moneys to be deposited with the States have been collected and belong to them in the ratio of their federal representative population--an assumption founded upon the fact that any deficiencies in our future revenue from imposts and public lands must be made up by direct taxes collected from the States in that ratio. It is proposed to distribute the surplus, say $30,000,000, not according to the ratio in which it lias been collected and belongs to the people of the States, but in that of their votes in the colleges of electors of Presiilent and Vice President. The cflect of a distribution of that ratio is shown by the annexed table, marked A.

By an of , it perceived

of property: To make the General Government del cer; only in the distribution of the surplus of $30,400,000

upon that basis, there is a great departure from the principle which regards representation as the true measure of taxation; and it will be found that the tendency of that departure will be to increase whatever inequalities bave been supposed to attend the operation of our federal system in respect to its bearings upon the different interests of the Union. In making the basis of representation the basis of taxation, the framers of the constitution intended to equalize the burdens which are necessary to support the Government; and the adoption of that ratio, while it accomplished this object, was also the means of adjusting other great topics arising out of the conflicting views respecting the political equality of the various meinbers of the confederacy. Whatever, therefore, distubs thic liberal spirit of the compromises which estah. lished a rule of taxation so just and equitable, and which experience lias proved to be so well adapted to the gevnius and habits of our people, should be received with the greatest caution and distrust.

24th Cong. 2:1 SESS. ]

Message of the President of the United States.



A bare inspection, in the annexed table, of the differences produced by the ratio used in the deposite act compared with the results of a distribution according to the ratio of direct taxation, must satisfy every unprejudiced mind that the former ratio contravenes the spirit of the constitution, and produces a degree of injustice in the operation of the Federal Government which would be fatal to the hope of perpetuating it. By the ratio of direct taxation, for example, the State of Delaware, in the collection of $30,000,000 of revenue, would pay into the treasury $188,716 ; and in a distribution of $30,000,000 she would receive back from the Government, according to the ratio of the deposite bill, the sum of $306,122; and similar results would follow the comparison between the small and the large States throughout the Union; tbus realizing to the small States an advantage which would be doubtless as unacceptable to them as a motive for incorporating the principle in any system which would produce it, as it would be inconsistent with the rights and expectations of the large States. It was certainly the intention of that provision of the constitution which declares that “all duties, imposts, and excises." shall be uniform throughout the United States," to make the burdens of taxation fall equally upon the people, in whatever State of the Union they may reside. But what would be the value of such a uniform rule, if the moneys raised by it could be immediately returned by a different one, which will give to the people of some States much more, and to those of others much less, than their fair proportions? Were the Federal Govern. ment to exempt, in express terms, the imports, products, and manufactures of some portions of the coun. try from all duties, wbile it imposed heavy ones on others, the injustice could not be greater. li would be easy to show how, by the operation of such a principle, the large States of the Union would not only have to contribute their just share towards the support of the Federal Government, but also have to bear in some degree the taxes necessary to support the Governments of their smaller sisters; but it is deemed unnecessary to state the details where the general principle is so obvious.

A system liable to such objections can never be supposed to have been sanctioned by the framers of the constitution, when they conferred on Congress the taxing power ; and I feel persuaded that a mature examination of the subject will satisfy every one that there are insurmountable difficulties in the operation of any plan which can be devised, of collecting the revenue, for the purpose of distributing it. Congress is only authorized to levy taxes " to pay the debts and provide for the common defence and general welfare of the United States.There is no such provision as would authorize Congress to collect together the property of the country, under the name of revenue, for the purpose of dividing it equally or unequally among the States or the People. Indeed, it is not probable that such an idea ever occurred to the States when they adopted the constitution. But, however this may be, the only safe rule for us, in interpreting the powers granted to the Federal Government, is to regard the absence of express authority to touch a subject so important and del. icate as this is, as equivalent to a prohibition.

Even if our powers were less doubtful in this respect, as the constitution now stands, there are considerations afforded, by recent experience, which would seem to make it our duty to avoid a resort to such a system.

All will admit that the simplicity and economy of the State Governments mainly depend on the fact that money has to be supplied to support them by the same men or their agents who vote it away in appropriations. Hence, when there are extravagant and wasteful appro, priations, there must be a corresponding increase of

taxes; and the people, becoming awakened, will necessarily scrutinize the character of measures which thus increase their burdens. By the watchful eye of selfinterest, the agents of the people in the State Governments are repressed, and kept within the limit of a just

But if the necessity of levying the taxes be taken from those who make the appropriations, and thrown upon a more distant and less responsible set of public agents, who have power to approach the people by an indirect and stealthy taxation, there is reason to fear that prodigality will soon supersede those character. istics which have thus far made us look with so much pride and confidence to the State Governments as the mainstay of our union and liberties. The State Legislatures, instead af studying to restrict their State expend. itures to the smallest possible sum, will claim credit for their profusion, and barass the General Government for increased supplies. Practically, there would soon be but one taxing power, and that vested in a body of men far removed from the people, in wbich the farming and mechanic interests would scarcely be represented. The States would gradually lose their purity as well as their independence; they would not dare to murmur at the proceedings of the General Government, lest they should lose their supplies; all would be merged in a practical consolidation, cemented by wide-spread corruption, wbich could only be eradicated by one of those bloody revo. Jutions which occasionally overthrow the despotic systems of the old world.

In all the other aspects in which I bave been able to look at the effect of such a principle of distribution upon the best interests of the country, I can see nothing to compensate for the disadvantages to which I have ad. verted. If we consider the protective duties, which are, in a great degree, the source of the surplus reve. nue, beneficial to one section of the Union and prejudicial to another, there is no corrective for the evil in such a plan of distribution. On the contrary, there is reason to fear that all the complaints which have sprung from this cause would be aggravaled. Every one must be sensible that a distribution of the surplus must beget a disposition to cherish the means which create it, and any system, therefore, into which it enters, must have a powerful tendency to increase rather than diminish the tariff. If it were even admitted that the advantages of such a system could be made equal to all the sections of the Union, the reasons already so urgently calling for a reduction of the revenue would, nevertheless, lose none of their force ; for it will always be improbable that an intelligent and virtuous community can consent to raise a surplus for the mere purpose of dividing it, diminished as it must inevitably be by the expenses of the various machinery necessary to the process.

The safest and simplest mode of ooriating all the difficulties woich have been mentioned is, to collect only revenue enough to meet the wants of the Government, and let the people keep the balance of their property in their own hands, to be used for their own profit. Each State will then support its own Government, and contribute its due share towards the support of the General Government. There would be no surplus to cramp and lessen the resources of individual wealth and enterprise, and the banks would be left to their ordinary means. Whatever agitations and Auctuations might arise from vur unfortunate paper system, they could never be attributed, justly or unjustly, to the action of the Federal Government. There would be some guaranty that the spirit of wild speculation, which seeks to convert the surplus revenue into banking capital, would be effectually checked, and that the scenes of demoralization which are now so prevalent through the land would disappear.

Without desiring to conceal that the experience and

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