TABLE G.

Statement showing the quantity, price, and value of the Cotton grown in the United States from 1819 to 1840.

The quantity of cotton received at the port of Boston from October, 1839, to October, 1840, was:

Since January 1st, 1841, there was received to this, the 26th of May, less than five months, 93,057 bales, and the quantity received this year will probably be 150,000 bales.-Boston Atlas.

TABLE H.-DOMESTIC EXPORTS OF SOUTH CAROLINA FROM 1819 TO 1841.

XXXV.

SPEECH ON THE LOAN BILL, APRIL 12, 1842.

THE question being put on the passage of the bill, and the yeas and nays having been ordered,

Mr. Calhoun said, that it was not his object, in rising at this late stage of the question, to discuss the provisions of this bill. That had been done so fully and ably by those who had preceded in the debate on the same side, that he had nothing to add. But, in order to have a full and clear understanding of the bearing of this measure on the finances of the government, we must look beyond the provisions of the bill. It was not a lone measure, unconnected with those which preceded it, or would succeed it, but quite the reverse. It was a link in the sytem of policy commenced at the special session, and which had hitherto been perseveringly followed up, and, if he was not greatly deceived, would be persisted in so long as those who now have the control held power. Already has the system contributed greatly to depress the credit of the government, and it is to be feared, if it be not arrested, that it will sink it far below its present level. What he proposed, in the remarks which he was about to offer, was to trace the consequences of the system in its bearings on the finances and credit of the government.

That the credit of the government is greatly impaired of late, will not be denied. It is but a short time since the very committee which reported this loan bill reported another for about the same amount, which became a law. At that time, so high did the credit of the government stand, that it was expressly provided that not more than six per cent. interest should be allowed, and that the loan should be redeemable in three years. As short as was the period, it was confidently predicted that it would be taken at five per cent.; and the Secretary of the Treasury commenced his negotiation for the loan with that expectation, and actually obtained a considerable portion of it under six per cent. The bill passed late in July last; and, in the period of nine short months, the very same committee reported this bill, which proposes to send the public credit into the market to be sold for what it will bring; and that, too, for twenty years, a period nearly seven times longer than the term prescribed in the former bill.

The conditions offered for a loan may fairly be regarded as indicating the value which the government stamps on its own credit; and we may be assured that the keensighted race who have money to lend will rarely affix a higher value than what that stamp indicates. Judged by that standard, the credit of the government has never before been as low; no, not in the late war with England-a war with one of the greatest, if not the greatest power on earth-commenced with a remnant of an old debt of more than forty millions of dollars, and at the very beginning of which there was a universal suspension of payments by all the banks south of New-England. Even in that great struggle, under all its embarrassments, no secretary of the treasury or committee ever dared to put the credit of the government into market under such disadvantageous terms as is proposed in this bill. The longest period for the redemption of any loan contracted during the war, if his memory served him, was but twelve years a period not much exceeding half the time allowed by this bill. Such and so great has been the decay of the public credit in the short space of a few months! And here the question is presented, What

has caused this unexampled and rapid decay of the credit of the government in a period of peace, when the resources of the country are more than doubled, and with a public debt comparatively so small?

The chairman of the Finance Committee felt the force of this question; and, if we are to believe him, the extraordinary offer which the Secretary of the Treasury is authorized to make for this loan is to be explained, not on the ground that the credit of the government is impaired, but from the scarcity of money. He says that there is an extraordinary demand for money, and that a higher interest, in consequence, must be paid for its use; and that the government, like individuals, can get it only by giving its market value. Unfortunately for him, the fact does not accord with his explanation. Interest is now lower in the general market of the world than when the former loan bill passed. The best index of that market is the rate of interest at which the Bank of England discounts. Judging by that, there has been a very great reduction of interest within the last few months-from five to four per cent. Even in our own country, where confidence is imperfect, interest is far from being high. It was but the other day stated, in a debate on this bill, that the stocks of the State of Maine and the city of Philadelphia, bearing six per cent. interest, are at par; and that of his own state, in its own market, is, he is informed, something above par. But the senator himself may be quoted against his own explanation. Forgetful of the ground that he had taken, he mentioned it as a remarkable fact, that exchange with England at this time is very low-several per cent. below par. From this he inferred that money was plenty-not, indeed, from increase of quantity, but from the diminution of business. Like everything else, its price (if he might use the expres sion as applied to money) followed the great law of demand and supply; and it might be lowered, as well by diminishing the demand as by increas ing the supply; and, in either case, a favourable state of the market would exist for the negotiation of loans on good terms, where the credit of the borrower was above suspicion.

The senator from Rhode Island (Mr. Simmons), taking a more correct view of the fact, admitted that the difficulty of negotiating a loan on favourable terms was the loss of credit; but he attributed the loss of credit on the part of this government to the loss of credit by so many of the states of the Union. He said that there was a mutual sympathy between the credit of this government and that of the states, and that when the one was impaired it necessarily impaired the other. He (Mr. C.) did not admit that there was any such dependance; and, for proof, he referred to the fact that a few months since, when the former loan bill passed, the credit of this government stood high-never higher, although that of many of the states was then greatly depressed. But, while he denied the dependance, he readily admitted that there was so much connexion be tween the two, that, when the credit of the states was greatly impaired, great prudence, much caution, and careful management were necessary to prevent that of this government from being depressed. It was the moment when the money-lenders would view the conduct of this government with the keenest jealousy, and when any mismanagement of its finances would be sure to be followed with the worst effect on its credit; but, with proper management, its credit would not be affected by the discredit of

the states.

If, then, neither the state of the money market, nor the discredit of so many of the states, can explain the necessity for the extraordinary terms to be offered for this loan, to what is it to be attributed? It was no time for vague or gentle language. He intended to express himself plainly and strongly, but without the least intention of offending. It is, then, to be

1

You

attributed to the loss of credit on the part of the government—a rapid and great loss-and which, he feared, was still in progress. And to what is that to be attributed! To your conduct, gentlemen. It is you who have impaired the public credit. You are the responsible party. have destroyed the equilibrium between income and expenditure, on which the credit of governments, as well as individuals, must ultimately depend. You have reduced the income of the government below its expenditures: in the first place, by giving away a portion of the revenue from the public lands-a portion by far the most permanent and growing; and, in the next, by greatly increasing its expenditures. To this you added a heavy loan of $12,000,000, making an annual charge for interest of upward of seven hundred thousand dollars. And, to cap the climax, you proposed, in the face of all this, to raise the permanent expenditures to nearly thirty millions of dollars, without making any adequate provision to meet it. It was thus that the equilibrium between the income and expenditure of the government was destroyed; and the want of means to meet its engagements followed as a matter of course.

You

But what you did was not so fatal to the public credit, as bad as it was, as the circumstances under which you did it. What were they? You did it when you knew that the credit of many states was deeply impaired, and threatened to be still more so. You knew that there was hazard that their discredit might react and cast suspicion on the credit of the Union, and impair that of this government, as well as that of the states which still preserved theirs, without great prudence and caution in the management of our finances. Nor were you ignorant that the financial condition of the government was in other respects highly critical. That you were fully apprized of the fact, I will prove from your own words. How often have you declared that there was a heavy deficit when you came into power; that the revenue was rapidly declining under the Compromise Act; and that those who preceded you had neglected to make provision to meet the growing deficit; and, finally, that there was great waste in the collection and disbursement of the revenue? You stated all this to prove that the blame lay not at your door. Admitting all you said, can you exempt yourselves from blame? Power was not forced on you. sought it eagerly sought it-and that by the most objectionable means. You got it under the promise of reform, and thus placed yourselves under the most solemn obligation to administer the finances with the utmost care and skill. And yet it was under these circumstances, and in the extremely critical condition, according to your own admission, of the finances of the government, that you reduced the income, increased the expenditures, added a large amount of debt, and proclaimed your intention to raise the permanent expenditures far above the then existing scale, without providing anything like adequate means to meet such increase. Can it, then, be a matter of surprise that such conduct should be followed by that rapid and deep decay of credit by which it has been sunk in the short space of a few months (if we may judge by the terms of this bill), to a point of depression far below what it ever has been at any other period, in peace or war? Be assured that the keen and vigilant class who have money to lend watch your course with ceaseless attention; and that not a false step has been taken in the management of the finances, nor an act been done that may indicate a want of due care or regard to the public faith on your part, that has not contributed to impair the credit of the government, especially at so critical a period as that through which we are now passing.

Having now shown that it is the course you have pursued which has prostrated the credit of the government, the question next presented is,

What impelled you to pursue a course so disastrous to the public credit? Why did you surrender the revenue from the land? Why so greatly increase the expenditures at the same time? Why propose to raise the permanent expenses to so high a standard? Were you ignorant of consequences? Did you not see that it would destroy the equilibrium between income and expenditures? You cannot plead ignorance; you did it with your eyes open. The loan bill of the special session proves that your measures had created a deficit; and the declaration of your distinguished leader, whose authority is so high with you, at the close of the extra session, that there would be a deficit in the revenue for this year of at least ten millions of dollars, conclusively shows that the deficit then created was known to be not of a temporary character. And here we have a still more important and searching question presented: What impelled you, at so critical a moment, when the credit of the government required the most careful and vigilant nursing, knowingly to destroynot for the moment only, but for the future-the equilibrium between its income and its expenditures? To this there can be but one answer: it was your system of policy that impelled you-a system deliberately adopted at the special session, steadily pursued since, and, it is to be feared, will be pursued, regardless of consequences to government and country, as long as you can retain power.

What that policy is, is not a matter of inference or conjecture. You have openly, boldly, and manfully avowed, that the great and leading objects of your policy were bank and tariff-a National Bank and high protective tariff; that without the one there never could be a sound currency, nor prosperous industry without the other. Your great leader has, over and over again, proclaimed them to be the great objects of your policy; and the report of the minority of the committee on the exchequer in the other house, from the pen of a distinguished member of your party, openly asserts that the one is indispensable to the other, and that without both there can be no relief for the currency and industry of the country. There is, indeed, a mysterious connexion between them; and he (Mr. C.) would admit that, without their joint action, there never could be such an inflation of the currency, and fictitious and delusive state of prosperity, as that through which we have recently passed. Their united action might, indeed, again restore a like state; but it would be of short duration, and would be suddenly followed by disasters still greater than the present; just as each succeeding debauch of the drunkard leaves him in a worse condition than that which preceded.

In pursuing these, the acknowledged great and leading objects of your system of policy, to which all others are subordinate, you commenced at the extra session with the bank; justly believing that, once established, all others would follow as a matter course. The Bank Bill fell under the veto, and a new tack became necessary, in which its associated measure, a high tariff, became the primary object, in the hope (not badly founded), if it could be adopted and be made permanent, that it would, in the end, carry the bank as certainly as the bank would the tariff. Since then, your whole energy has been directed to establishing a high tariff. How was that to be done?

The Compromise Act stood in the way. Under its provisions a protective tariff, by name, was out of the question. Your distinguished leader stood openly pledged against it, and the whole Southern wing of your party, with one or two exceptions (besides being pledged against it), represented constituents who were utterly opposed to the system. In this dilemma there was but one expedient left to bring about such a condition of the treasury as would compel a resort to high duties for revenue, and