The Sun.
London, England, 1837-01-02 00:00:00

extravagant and wasteful appropriations, there must be a cor-
responding increase of taxes ; and the people, becoming awa-
kened, will necessarily scrutinize the charaeter of measures
which thus increase their burthens. 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 reproach the people 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
main stay 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. Prac-
tically, 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 repre-
sented. 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 consolida-
tion, cemented by wide-spread corruption, which could only be
eradicated by one of those bloody revolutions which occasion-
ally overthrow the despotic systems of the old world.
In all other aspects in which I have been able to look at the
effect of such a principle of distribution upon the best inte-
rests of the country I can see nothing to compensate for the
disadvantages to which I have adverted. If we consider the
productive 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 in-
crease rather than diminish this tariff. If it were even ad-
mitted that the advantage 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, never-
theless, lose none of their force ; for it will always be impro-
bable that an intelligent and virtuous community can consent
to raise a surplus for the mere purpose of dividing it, dimi-
nished 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 difficul-
ties which have bean 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 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. Whatsoever 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 sur-
plus revenue into banking capital, would be effectually
checked, and that the scenes of demoralization which are
now so prevalent would disappear.
Without desire to conceal that the experience and observa-
tion 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 message of 1829
and 1830 have been greatly misunderstood. At that time the
great struggle wps begun against the latitudinarian construction
of the Constitution, which authorises the unlimited appropria-
tion of the revenues of the Union to internal improvements
within the States, tending to invest in the hands, and place
under the controul of the General Government, all the princi-
pal roads and canals in the country, in violation of State rights,
and in derogation of State authority. At the same time the
condition of the manufacturing interest was such as to create
apprehension that the duties on imports could not, without
extensive mischief, be reduced in season to prevent the accu-
mulation 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 improvement in
derogation of the rights and powers of the States, the sug-
gestion of an amendment to the Constitution to authorise
its distribution was made. It was an alternative for
what was deemed greater evils—a temporary resort to
relieve an overburthened Treasury, until the Government
could, without a sudden and destructive revolution in the
business of the country, gradually return to the just prin-
ciple of raising no more revenue from the people in taxes
than is necessary for its economical support. Even that al-
ternative was not spoken of but in connection with an amend-
ment 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 wag suggested only in connection with
an appeal to the source of all Ice-bal power in the general Go-
vernment, 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 under-
gone a change, so far as to be convinced that no alteration of
the Constitution in this respect is wise or expedient. The in-
fluence of an accumulating surplus upon the legislation of the
General Government and States, its effects upon the credit
system of the country, producing dangerous extensions and
ruinous contractions, fluctuations in the price of property, rash
speculations, 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 by the
wants of our Government is to be home in reference to an
overflowing Treasury.
I beg leave to call your attention to another subject, inti-
mately 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 Constitution 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, recog-
nized 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 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 authorise the establish-
ment of a national bank, which was to issue a currency of
bank-notes, on capital which was to be created to some extent
out of the Government stocks. Although this proposition was
refused by a direct vote of the Convention the object was after-
wards 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 in-
terest 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
successive issues of the banks incorporated by the various
States.
Although it may not be impossible, by any legislative moans
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 in-
timate knowledge of the subject has been frequently attested
by the bitter experience of the country. The same causes
which led them to refuse their sanction to a power authorising
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 necessrry to correct
the evils resulting from the unfortunate exercise of the power,
and it is to be hoped that the opportunity for effecting this
great good will be improved before our 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 con-
stitute such 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 it to be ne-
cessary, not only in this, but in all other commercial countries.
Where those proportions are not infused into the circulation,
and do not controul it, it is manifest, that prices must vary
according to the tide of bank issues, and the value and stabi-
lity 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 labouring 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 usual 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 cur-
rency, which, as it appears to make money abound, they are at
first inclined to consider a blessing. It is not so with the spe-
culator, by whom this operation is better understood, and is
made to contribute to his advantage. It is not until the prices
" necessaries of become so dear that the labouring