imports, products, and manufactures of some portions of the country from all duties, while it imposes heavy ones on others, the injustice could not be greater. It 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 toward the support of the federal government, but also have to bear in some degree the taxes necessary to support the government 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 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 delicate as this is, as equivalent to a prohi

bition.

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 appropriations, 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 self-interest, the agents of the people in the state governments are repressed, and kept within the limits of a just economy. 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 peo. ple by an indirect and stealthy taxation, there is reason to fear that prodigality will soon supersede those characteristics 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 of studying to restrict their state expenditures to the smallest possible sum, will claim credit for their profusion, and harass 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 which 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, which could only be eradicated by one of those bloody revolutions which occasionally overthrow the

despotic systems of the old world. In all the other aspects in which I have 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 adverted. If we consider the protective duties, which are in a great degree the source of the surplus revenue, 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 aggravated. 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 obviating all the difficulties which have been mentioned, is to collect only revenue enough to meet the wants of the government, and let the people keep the balance of the 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 toward 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 fluctuations might arise from our 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 observation of the last two years have operated a partial change in my views upon this interesting subject, it is nevertheless regretted that the suggestions made by me in my annual messages of 1829 and 1830, have been greatly misunderstood. At that time the great struggle was begun against that latitudinarian construction of the constitution which authorizes the unlimited appropriation of the revenues of the Union to internal improvements within the states, tending to invest in the hands, and place under the control of the general government, all the principal roads and canals of the country, in violation of state rights, and in derogation of state authority. At the same time, the condition of the manufacturing interests was such as to create an appre hension that the duties on imports could not, without extensive mischief, be reduced in season to prevent the accumulation of a considerable surplus, after the payment of the national debt. In view of the dangers of such a surplus, and in preference to its application to internal improvements, in derogation of the rights and powers of the states, the suggestion of an amendment of the constitution to authorize its distribution was made. was an alternative for what were deemed greater evils-a temporary resort to relieve an overburdened treasury, until the government could, without a sudden and destructive revulsion in the business of the country, gradually

It

return to the just principle of raising no more revenue from the people in taxes than is necessary for its economical support. Even that alternative was not spoken of but in connection with an amendinent of the constitution. No temporary inconvenience can justify the exercise of a prohibited power, or a power not granted by that instrument; and it was from a conviction that the power to distribute even a temporary surplus of revenue is of that character, that it was suggested only in connection with an appeal to the source of all legal power in the general government, the states which have established it. No such appeal has been taken; and, in my opinion, a distribution of the surplus revenue by Congress, either to the states or the people, is to be considered as among the prohibitions of the constitution. As already intimated, my views have undergone a change, so far as to be convinced that no alteration of the constitution in this respect is wise or expedient. The influence of an accumulating surplus upon the legislation of the general government and the states, its effects upon the credit system of the country, producing dangerous extensions and ruinous contractions, fluctuations in the price of property, rash speculation, idleness, extravagance, and a deterioration of morals, have taught us the important lesson, that any transient mischief which may attend the reduction of our revenue to the wants of our government, is to be borne in preference to an overflowing treasury.

I beg leave to call your attention to another subject intimately associated with the preceding one-the currency of the country.

It is apparent from the whole context of the constitution, as well as the history of the times which gave birth to it, that it was the purpose of the convention to establish a currency consisting of the precious metals. These, from their peculiar properties, which rendered them the standard of value in all other countries, were adopted in this, as well to establish its commercial standard, in reference to foreign countries, by a permanent rule, as to exclude the use of a mutual medium of exchange, such as of certain agricultural commodities, recognised by the statutes of some states, as a tender for debts, or the still more pernicious expedient of a paper currency. The last, from the experience of the evils of the issues of paper during the revolution, had become so justly obnoxious, as not only to suggest the clause in the constitution forbidding the emission of bills of credit by the states, but also to produce that vote in the convention which negatived the proposition to grant power to Congress to charter corporations; a proposition well understood at the time, as intended to authorize the establishment of a national bank, which was to issue a currency of bank notes, on a capital to be created to some extent out of government stocks. Although this proposition was refused by a direct vote of the convention, the object was afterwards in effect obtained by its ingenious advocates through a strained construction of the constitution. The debts of the revolution were funded at prices which formed no equivalent, compared with the nominal amount of the stock, and under circumstances which exposed the motives of some of those who participated in the passage of the act, to distrust.

The facts that the value of the stock was greatly enhanced by the creation of the bank, that it was well understood that such would be the case, and that some of the advocates of the measure were largely benefited by it, belong to the history of the times, and are well calculated to diminish the respect which might otherwise have been due to the action of the Congress which created the institution.

On the establishment of a national bank, it became the interest of its creditors that gold should be superseded by the paper of the bank as a general currency. A value was soon attached to the gold coins, which made their exportation to foreign countries, as a mercantile commodity, more profitable than their retention and use at home as money. It followed, as a matter of course, if not designed by those who established the bank, that the bank became, in effect, a substitute for the mint of the United States.

Such was the origin of a national bank currency, and such the beginning of those difficulties which now appear in the excessive issues of the banks incorporated by the various states.

Although it may not be possible, by any legislative means within our power, to change at once the system which has thus been introduced, and has received the acquiescence of all portions of the country, it is certainly our duty to do all that is consistent with our constitutional obligations, in preventing the mischiefs which are threatened by its undue extension. That the efforts of the fathers of our government to guard against it by a constitutional provision were founded on an intimate knowledge of the subject, has been frequently attested by the better experience of the country. The same causes which led them to refuse their sanction to a power authorizing the establishment of incorporations for banking purposes, now exist in a much stronger degree to urge us to exert the utmost vigilance in calling into action the means necessary to correct the evils resulting from the unfortunate exercise of the power; and it is to be hoped that the oppor tunity for effecting this great good will be improved, before the country witnesses new scenes of embarrassment and distress.

Variableness must ever be the characteristic of a currency of which the precious metals are not the chief ingredient, or which can be expanded or contracted without regard to the principles that regulate the value of those metals as a standard in the general trade of the world. With us, bank issues constitute a currency, and must ever do so until they are made dependent on those just proportions of gold and silver, as a circulating medium, which experience has proved to be necessary, not only in this, but in all other commercial countries. Where those proportions are not infused into the circulation, and do not control it, it is manifest that prices must vary according to the tide of bank issues, and the value and stability of property must stand exposed to all the uncertainty which attends the administration of institutions that are constantly liable to the temptation of an interest distinct from that of the community in which they are established.

The progress of an expansion, or rather a depreciation of the currency, by excessive bank issues, is always attended by a loss to the laboring classes. This portion of the community have neither time nor opportunity to watch the ebbs and flows of the money market. Engaged from day to day in their useful toils, they do not perceive that, although their wages are nominally the same, or even somewhat higher, they are greatly reduced, in fact, by the rapid increase of a spurious currency, which, as it appears to make money abound, they are at first inclined to consider a blessing. It is not so with the speculator, by whom this operation is better understood, and is made to contribute to his advantage. It is not until the prices of the necessaries of life become so dear that the laboring classes cannot supply their wants out of their wages, that the wages rise, and gradually reach a just

ly proportioned rate to that of the products of their labor. When thus, by the depreciation in consequence of the quantity of paper in circulation, wages as well as prices become exorbitant, it is soon found that the whole effect of adulteration is a tariff on our home industry for the benefit of the countries where gold and silver circulate and maintain uniformity and moderation in prices. It is then perceived that the enhancement of the price of land and labor produces a corresponding increase in the price of products, until these products do not sustain a competition with similar ones in other countries, and thus both manufactured and agricultural productions cease to bear exportation from the country of the spurious currency, because they cannot be sold for cost. This is the process by which specie is banished by the paper of the banks. Their vaults are soon exhausted to pay for foreign commodities; the next step is a stoppage of specie payment -a total degradation of paper as a currency-unusual depression of prices, the ruin of debtors, and the accumulation of property in the hands of creditors and cautious capitalists.

It was in view of these evils, together with the dangerous power wielded by the Bank of the United States, and its repugnance to our constitution, that I was induced to exert the power conferred upon me by the American people to prevent the continuance of that institution. But although various dangers to our republican institutions have been obviated by the failure of that bank to extort from the government a renewal of its charter, it is obvious that little has been accomplished, except a salutary change of public opinion, toward restoring to the country the sound currency provided for in the constitution. In the acts of several of the states prohibiting circulation of small notes, and the auxiliary enactments of Congress at the last session, forbidding their reception or payment on public account, the true policy of the country has been advanced, and a larger portion of the precious metals infused into our circulating medium. These measures will probably be followed up in due time by the enactments of state laws banishing from circulation bank notes of still higher denominations; and the object may be materially promoted by farther acts of Congress, forbidding the employment as fiscal agents, of such banks as continue to issue notes of low denominations, and throw impediments in the way of the circulation of gold and silver.

The effects of an extension of bank credit and over-issues of bank paper, have been strikingly illustrated in the sales of the public lands. From the returns made by the various registers and receivers in the early part of last summer, it was perceived that the receipts arising from the sales of the public lands were increasing to an unprecedented amount. In effect, however, these receipts amounted to nothing more than credits in banks. The banks lent out their notes to speculators; they were paid to the receivers, and immediately returned to the banks to be lent out again and again, being mere instruments to transfer to speculators the most valuable public land, and pay the government by a credit on the books of the banks. Those credits on the books of some of the western banks, usually called deposites, were already greatly beyond their immediate means of payment, and were rapidly increasing. Indeed, each speculation furnished means for another; for no sooner had one individual or company paid in the notes, than they were immediately lent to another for a like purpose; and the banks were extending their business and their issues so largely, as to alarm considerate men, and render it doubtful whether these bank credits, if permitted to accu