It was possible that he might, on this occasion, present some views to the Senate that were new, or that he might have the power to exhibit those already offered in a new light, so as to induce a more favorable opinion for what had not been sufficiently considered. It was for this purpose, therefore, that he ventured to intrude upon the time of the Senate. His friend from New Jersey who sat in front of him [Mr. SOUTHARD] had been reproached by the Senator from New York [Mr. | WRIGHT] with having endeavored to create alarm in the public mind, and to destroy its confidence in the circulation of the country, at a moment when it was essential that the public property should be rendered secure. The man who endeavored to disturb a just confidence deserved the highest degree of reprobation; but his fault was not greater than that committed by him who endeavored to inspire a confidence where confidence was not due. He put it to gentlemen, whether the sentinel at his post was most culpable who concealed the approach of danger, or the one who announced it when it was not near. He would not charge the Senator from New York with treachery when he endeavored to impress on the public mind the belief that all was safe and prosperous, as that Senator had endeavored to do. Still, the public treasure was not in such a condition as warranted the Senator in making such representations; and if he could, he would inspire him with one deep and constant apprehension of its security. His friend had also been reproached, and with little justice, he thought, with having indulged in party acrimony. This reproach was altogether unmerited. His friend had drawn a picture, a just picture, of the state of the Treasury, and referred to the powers assumed over it by the Executive. He did not say that the powers assumed had been abused by the President or by those about him--he trusted that it would not be abused; but he thought that all would agree with him that the powers assumed were utterly at variance with the liberties of a free country where a constitution and laws prevail.ed. What was the state of the Treasury? According to the returns of the Secretary of the Treasury, last brought in, there were upwards of forty millions of public money in about thirty-four banks created by State authority, composed of money which still belonged to the public, part of it being at the credit of its disbursing officers, which, with the seven millions of United States Bank stock, made a total sum of about forty millions. The banks in which these deposites had been made had an amount of specie of about eleven millions of dollars, and their total immediate liabilities amounted to about the sum of ninety-three millions, their immediate means amounting to only thirty-eight millions. This great sum was held by banks not under the control of law. He regretted that he had not time to examine the report of the Secretary of the Treasury that came in that morning, but he perceived that he commenced in a defence and in excuses which ought not to be necessary on such an occasion. This great sum might be withdrawn in a moment, at the fiat of the Secretary, and might be placed all in one bank, or deposited in a place which was not a bank; and, without inquiry whether this power might be abused or not, he asked if it was not a power too dangerous to be confided to any one man? This was the state of things referred to by the Senator from New Jersey, and which induced the Senator from New York to reproach him with having indulged in party feeling. This power was too great to be trusted to any one human being. In any one of the three hundred and sixty-five days of the year, it was in the power of the Secretary of the Treasury to destroy any one of these banks, and thus lead to the explosion of the paper system, in which the property and credit of . such vast numbers were involved. Now, if they look

[SENATE.

ed to the means of these banks, and compared them with their immediate liabilities, they would find that there was very little to encourage the idea of the Senator from New York that all was safe and prosperous. They had collected from the people of the United States about forty millions of dollars, and placed it in these thirty-four deposite banks, which gave them no interest and no security for the return of the capital. They could give in fact no security, for if the Secretary of the Treasury were to take bonds from them, he would do so without the authority of law, and the bonds would be therefore void. This money, thus deposited in these banks, was loaned out, a considerable portion of it, to the people of the United States; and the means of returning this sum collected from the whole people consisted of the notes of those to whom it had been loaned, and who these were was not even known to the Secretary of the Treasury himself. Thus this vast sum was loaned out by banks, acting without authority, to persons unknown to the Secretary; and in the case of an explosion, the loss to the Treasury would be in proportion to the extent of that explosion. This had actually occurred, or something like it, after the close of the last war, and caused the unavailable funds which were now in the Treasury. But if such a pressure were to occur as took place about the year 1819--want of confidence, or a large export of specie for the wants of commerce, or a failure of the crops, or a great reduction of prices of the great southern staple--if the banks became affected by any one of these causes, the loss to the Treasury would be far greater than was to the public in 1819. Look now to the state of the currency; confidence in it was already diminishing, and exchanges were greatly deranged, while bank issues had enormously increased. All this had arisen from the unfortunate controversy with the Bank of the United States. The number of State banks in 1830 was something like three hundred; and up to January, 1835, they amounted to nearly seven hundred and fifty, while the circulation was nearly double what it was in 1830. He had no doubt, if they could get accurate accounts, that the present circulation would be found to be upwards of a hundred millions, and the number of banks eight hundred, all of them without law and without responsi bility to the United States. Was this a state of things in which the Senator from New York could place him. self on the watch-tower and cry that all was safe?

When the currency was wrested from the power of Congress, where was it transferred? It was not even in the possession of the States; it was in the possession of these thirty-four banks; and the Secretary of the Treasury, whose interest it was that it should be secure, did not know to whom they had loaned it. The attention of the Senate had been called by the Senator from Ohio to a single bank, which had attempted to regulate the currency to a certain extent, by prohibiting the land office from taking the notes of other banks designated by it. And let us see what the Secretary of the Treas ury has done while Congress is legislating on the subject of the currency. In his letter of the 22d February, he requests these banks (he puts his commands in the form of a request) that, after the 1st of July next, they will not issue notes of a less denomination than five dollars; and, at a certain period thereafter, that they will discontinue the issue of notes of a less denomination than ten dollars. Now, he was not about to inquire into the expediency of discontinuing the circulation of bank notes under ten dollars, or into the expediency of making the currency consist of gold and silver only; this might be right. It was to the right to exercise this power, without the sanction of Congress, that he should call the attention of the Senate. Where did the Secretary derive this power, conferred on Congress alone by the consti

tution, and reserved by it from the Executive himself? The power of taxation was not much greater than the power of determining the thing on which taxes should be paid. Give him the latter power, the right of determining the modes of taxation, and he could make it nearly equivalent to the power of taxation itself. Now, if the Secretary of the Treasury could declare what should be the currency of the country-if he could regulate these banks without the authority of Congress-this power was capable of being rendered equivalent to the tax-laying power.

No man of ordinary prudence and forecast could contemplate the existing state of things without the most serious alarm. It was impossible that they should continue; that eight hundred banks should go on, from day to day, to issue so much paper, and that the twenty-four sovereignties should submit to it. It was utterly impossible but that an explosion must come; though when it would come, he could not pretend to say. They might differ there about the cause of it, but come it certainly would. There was a most unnatural state of things presented-abundance on the one hand, and scarcity and pressure on the other. What was the cause of this pressure? One cause was the vast portion of public revenue locked up in the vaults of these banks, or loaned out by them to persons who might not be able to return it promptly; and, if they looked to the state of the public pressure, they would find something to support this opinion. Where was the greatest pressure at the present moment? It was at the points where the greatest amount of revenue had been collected and deposited that the severest pressure was felt; and of these points the city of New York, being the greatest both for collection and deposite, they had every reason to believe, from the accounts received, suffered the most from pe. cuniary pressure. Let us look, said he, at other points -at cities where the collections were not so great, and where comparatively little was deposited. Take Louisville, for example, or any of the cities on the western waters. At Louisville, where capital always found a ready employment, there was no pressure, and the course of exchange demonstrated a state of prosperity and security. Go to Cincinnati, or to any of the southern cities, and it would be found that the measure of pressure was equal to the measure of collection. There was another cause, and that was the want of confidence, which had caused a severe pressure in the money market.

The fact of this pressure was undeniable; it was severe and alarming, and called loudly for the application of Congress of any constitutional means within its power to relieve this distress. How was the city of New York to be relieved from the abstraction of eleven millions of dollars? She was to be relieved from the pressure only by the distribution of the money in the public Treasury, which would afford immediate relief; and immediate relief would be afforded to the banks in that city, and in those other great commercial cities of Philadelphia, Baltimore, and Boston. And was it possible Congress could adjourn without distributing this vast treasure? Among the schemes devised to dispose of this fund, was one of making large appropriations for public defence; and the term public defence had been repeated in their ears until every body was sick of hearing it.

[APRIL 26, 1836.

his sound judgment and discretion, had told them how much had been expended; and it was evident he was against this extravagant system, as he had cautiously avoided indicating any sum that could be expended, and supposed they were capable of judging for themselves. But this did not suit some gentlemen; and he was called on again, and it was referred to Colonel Gratiot; and, finally, it was referred to a lieutenant in the service, who had given it as his opinion that six millions could be expended. In other cases they had not only the authority of the Secretary, but the authority of the President. But now the Secretary refers it to the same branch of the Department, and Congress was asked to expend six millions on the opinion of a lieutenant. There could be no diversity of opinion on this subject. He asked gentlemen to look at the condition of the country now, and compare it with that period when we defended ourselves so successfully against a powerful nation. Our population has about doubled since then; we had twelve ships of the line finished or on the stocks, and an additional number of frigates, and our whole coast from the Balize to Norfolk was increased in all its fortifications. He adverted to the efficient defences of New York and of the whole north Atlantic coast, and asked the Senators to look at the Canada frontier, and compare our resources and strength there with what it was in 1814, and they would find it possessed a thousand times the strength it then did. We had paid off a debt of upwards of a hundred millions, and it was ideal to compare our strength then with what it was now. The introduction of steam power on the father of rivers, the Mississippi, and other navigable rivers, baffled all calculations in figures of our strength. This thing of making these extravagant calculations in regard to fortifications, &c., was nothing but an effort to get rid of the surplus. Appropriations and expenditures were not synonymous terms. Appropriating more than they could expend would only be turning another leaf in the leger, and charging it against, instead of leaving it where it stood, to the credit of the Treas The appropriation of last year could not be expended. They might appropriate it as they pleased, and they could not expend it; and to leave it where it was, it was in repositories that were insecure and unsafe; and the loss of interest while it remained in these banks alone would amount to upwards of two millions per annum; and, besides the loss of interest, they ran the risk of losing the capital itself. What, then, ought they to do with it? He answered, distribute it.

ury.

These lands were acquired by cessions from States and by treaties from foreign Powers; and under either mode they came under the general powers of Congress. The lands acquired by cession were ceded in consequence of the revolutionary struggle to pay the debt of the Revolution, and to satisfy Maryland, New Jersey, and other States, for the extensive waste lands in those States. The President, in his message of 1832, had said the object for which they were ceded having been accomplished, they were then subject to the disposal of Congress, in such way as would best satisfy the several States. The deed of cession from Virginia was prior to the adoption of the present constitution, and Virginia having been a party to it, it followed that when the power was concurred in by the ceding States, it was intended to be at the disposal of the States. The power In good old times the Commons of England or the to dispose of the thing itself implied the power to disCongress of the United States did not go to the Crown pose of the proceeds of it. In the view he had taken of in the one case, or the Departments of State or the Ex-it, under the treaty, the power to dispose of it was unlimecutive in the other, to ask how much they could spend, but cut it down to reduce it to the proper sum consistent with economy. But now they goaded and harassed the disbursing departments to tell them how much, and what was the maximum amount they could spend. The Secretary of War, in a document highly creditable to

ited. If any Senator doubted the right of Congress to dispose of the proceeds of the lands in Florida and Louisiana, he might move to strike out those proceeds, and they would still have the means of carrying the bill into effect. He should be able to satisfy every Senator there could be no doubt of the power, if they limited it

1293

APRIL 26, 1836.]

Land Bill.

to the deeds of cession. The language of the deed of cession was that all lands within the Territories, not granted to officers and soldiers of the revolutionary army, should be for the use and benefit of the several States, (Virginia included.) The title conveyed was to the use and benefit of the several States, (Virginia inclusive,) and not for the benefit of the Union. If the cession was not intended for the benefit of the States, the language designating the States, and Virginia inclusive, would not have been used.

But it had been said that if these lands were given to the Union for the use of the States, how could the application of it to the uses of the Union be justified? Why, because the application of it to the uses of the Union was for the benefit of the States composing it. The States had contracted debts which were assumed by the Union, and therefore to apply them to the payment of this revolutionary debt was the great object of the cession by the State of Virginia, and such application was for the benefit of the States composing the Union. If it was intended that this cession should form a consolidated fund, why was there any reference to the proportion of the burdens borne by each State of the general expenses of the Union as establishing the mode of distribution? No, the fund was to be a common fund, but the trust was to be applied like any other trust or administration; though general, in name, it was for the separate and individual use of each corporator.

Now recollect that, at the date of the Virginia deed of cession, the exactions from the several members of the Union were in their corporate capacities. Suppose, then, Virginia had paid her portion for the general defence, or chose to pay it in some other form, would she not have an undoubted right to demand her portion of this fund, or this common trust?

The measure of proportion, as provided by this deed to be shared by the States, was the measure of burdens respectively borne by each in the general expenses; the measure of contribution, and the measure of taxation. Now, what was the principle of the plan before the Senate? It adopted precisely the same measure of taxation and of burdens, varying only according to the constitution of the United States. Suppose, again, that the whole revenue of the United States was, instead of being drawn from imports, drawn from the States by direct taxation, then they would have information of what was drawn from each State. Could they not in that case allow each State to receive her proportion of this fund, and to pay the amount of her direct taxation in gross? or if a regular account was kept, would not the State be charged with her portion of direct taxes, and credited with the amount of her portion of these lands?

Suppose that, instead of the funding system which we had adopted, instead of the general Government assuming the debts of the States, each State had been compelled to provide for and make payments of its own debts, would it not, after it had been known that this grant was made for the express purpose of paying the revolutionary debt, have become necessary that this fund should be divided for the purpose of enabling the States to pay their debts? If this was not so, why did Virginia declare that these lands should be held for the common benefit of all the States, Virginia inclusive? Now, if these debts had been charged to each individual State, was there a Senator there who doubted that the States would have come forward and demanded their share of this fund? It did not seem, therefore, that the application of this money to the uses of the Union weakened the argument. The fund was so applied, and applied according to the terms of the deed.

An argument much stronger in favor of the application of the fund that was now proposed was, that they had arrived at the first application of it by inference only,

[SENATE.

because the fund being given for the common benefit of
the States, it was inferred that it might rightfully be ap-
plied to the Union which was composed of the States;
while for the application now contemplated they had
If the old
the direct sanction of the deed of cession.
articles of confederation had remained in force, there
would have been no difficulty as to this distribution, as
each State would have paid its own share of the common
burdens, and would have been entitled to receive her
proportionate share of the fund. The mode of taxation,
however, had been changed, and was now laid on con-
sumption, as the only rule by which they could approxi-
mate so nearly to equality. And what other rule could
approach so near? Taxation on consumption was in
proportion to population; and, by following it up, they
in this bill adopted the same rule; that is, the burden of
taxation being on the population of the States, the distri-
bution was to be made according to it generally. This
Did it not rest on the
the terms of the deed of cession.
rule of distribution was fair, just, and in conformity with
grounds of principle and reason? The uniform practice
of the Government, down to this very day, had been in
lands. He never knew this power to be questioned
conformity with this exercise of its power over these
All the Presidents, Mr.
until the veto of the President.
Madison, Mr. Jefferson, Mr. Monroe, and Mr. Adams,
had administered the Government in conformity with
this power. What had the public lands been distributed
For almost all the purposes of the country; for in-
for?
ternal improvement, for education, and for beneficent
purposes. By a humane policy, they granted lands to
the expatriated Poles. They granted lands to the
French; and although they were given ostensibly for a
designated purpose, yet in fact the grants were an abso-
lute bounty. It was true that Congress had gone too
far on some occasions, but all uniformly acknowledged
that they possessed the power to make the grants. After
referring to the messages of the President on the sub-
ject of the public lands, Mr. C. said that, supposing this
power of Congress over the public lands to be incon-
testable, the Senator from New York [Mr. WRIGHT]
contended that there was nothing to distribute. If this
were so, the gentleman objected to the bill with some
reason; for if it were true that there was no surplus to
But the Senator had met with his match in his friend
distribute, it was not right that this bill should pass.
from New Jersey, who had most ably refuted all his po-
Mr. C. then entered into various cal-
sitions, and shown clearly that all his calculations were
founded in error.
culations to show the amount of the surplus revenue, with
that accruing, and replied to Mr. WRIGHT's argument,
that the military bounty lands, the purchase of Louisiana
and Florida, and various other offsets, should be taken
from the proceeds of the land sales, before they could
be called nett proceeds. Mr. C. contended, as had been
done by Mr. CRITTENDEN, that the jurisdiction only
over Louisiana and Florida was of far greater value than
the amount of their purchase, and that the revenues de-
rived from New Orleans and Mobile alone (the claim of
Spain to the latter having been quieted by the Florida
purchase) would pay for these two provinces over and

over.

Louisiana was purchased for the peace and security of the country, and human figures could hardly reach the benefits of this acquisition under the treaty of 1804; and so of Florida. There was then virtually a Texian war going on, and we took possession of the country. He alluded to a document, draughted by Mr. Madison, possession of Mobile and Pensacola, by the treaty of which had been pressed upon him by Mr. C. The joint for that accession of territory. Looking at the great 1818-'19, would alone justify the sum of money paid commercial advantages secured, and the constant emi

SENATE.]

Land Bill.

gration opened out by it with a statesman's eye, and such as the Senator from New York [Mr. WRIGHT] had, he would no doubt have seen the great benefits derived from it, and that not one cent of those charges he had made were chargeable to the public lands. The policy of removing the Indians beyond the Mississippi was not for the purpose of getting the public lands; and the expense of removing them was not a fair charge upon them. The amount of the two items, in the purchase of Louisiana and Florida, was about thirty millions.

The whole product of the public lands was eightythree millions; and eleven millions and upwards, deduct ed for bounty lands, would leave upwards of seventyone millions. Take the whole claimed by the Senator from New York, [Mr. WRIGHT,] the entire cost of removal and interest, and the amount would be about twenty-four millions; so that, however the account was stated, there was a surplus remaining of about twentyfour millions.

He

[APRIL 26, 1836.

Governor of that State, (Mr. Hayne,) had estimated them at twelve millions. The Senator from New York had not served the Senate with any data to show the increase from thirteen to seventeen millions. He did not wish to see any of the protected articles, in the great principle of compromise, touched; but if it should become necessary, other means might be resorted to, without touching them.

The Senator from New York had objected to that feature assigning ten per cent. to the new States. (Mr. C.) had been unjustly charged with feelings of hos-fall short. tility towards the new States; and he thought it particularly hard for the Senator from Mississippi yesterday to question the equity of this provision. He believed that Senator had questioned its equity, but not its justice.

[Mr. WALKER said that he had already explained that it was not against the equity of giving this 10 per cent. fund to the new States, because he believed that it was not as much as they were entitled to. He had only said that, taking the gentleman's argument, there was an inequality in this grant.]

He (Mr. C.) would show that if any thing was wrong in that provision, it was not in not assigning enough to the new States. The principle was founded upon the measure of burdens. It gave to the people in equal proportion to their burdens. He went into a calculation to show that there was an increase of six per cent. of The mode population of the new States over the old. of taxation now pursued was not by direct, but by indirect taxation. The measure of taxation was a measure of burden. The burden was a taxation paid on the direct consumption. It would take up too much time The to go into a detail of the increases of all the States. nearer they got to the period when the next census should be taken, the more unequal it would be in regard

to the new States; and as he had not time to make the calculation, he had put it at ten per cent. The increase of population was where there was the greatest amount of sales. The greatest increase of population was in the new States, and as they increased more in population they got more of the ten per cent. By taking into the account the advantages accruing from the acquisition of Louisiana and Florida in the shape of duties and direct taxes, and the great benefits derived from commercial advantages, it would expunge the debt. The Senator from New York thought the customs would dry up,

There was one feature in the compromise bill which was a most happy one, and he was delighted at having The whole borne an important part in that measure. country seemed to have been satisfied with it; and, best of all, his late friends, the manufacturers, whom he would be the last man to desert, and whose interests he had always supported, had found that it was the best measure that could have been adopted for them. That feature was this: There was a large class of articles on which the power of taxation was reserved, and the taxes on which might in an emergency be increased without They had many violating the spirit of the compromise. luxuries which might be taxed, if the revenue should In their anxiety to reduce the duties, they had diminished the duties on silks and wines-articles which might well bear increased taxation. Why, sir, (said Mr. C.,) we may have abundantly enough of revenue for all the wants of the Government, without resorting to loans or the lands, simply by taxing luxuries. Mr. C. then went on to show that the receipts of the customs would probably increase instead of diminish. There was reason to believe that, unless a paper explo sion took place, the revenues of this year would be greater than the last. The first quarter of the year was estimated at five millions, and the whole customs of the present year would be upwards of twenty millions. They might reasonably calculate that the revenues of the coming years would be in proportion to the wealth of the country and its ability to consume. surd and out of reason to suppose that there would be a deficiency from the customs.

It was ab

Mr. C. having shown, as he said, the power of distribution, and the ability to make it, next went on to show the expediency of the measure. It had been objected that, if they once commenced this system, they would not be able to get rid of it. Why, he would ask, were they afraid to trust the States? Recollect, he said, that the if they found that the system was not a good one, it whole was founded in the confidence of the people, and would undoubtedly be repealed. But gentlemen could not have pronounced a higher eulogy on this bill, than by saying that, if it was once passed, they never would the beneficial effects of it would be so sensibly felt by be able to get rid of it; for the argument inferred that the people, that they would not be willing to give it up. Could there be a measure, he said, more calculated to promote the peace, happiness, and harmony of the Union, than this? It settled, for ever, that distracting question of the right to appropriate money for internal improvements. Could it be believed that the States of the West would continue to be satisfied with the vast expenditures of this Government on the seaboard? The day would come when the united West and Southwest would demand that this unequal distribution should cease. How was it, he But pass this bill, and that question would be asked, that an administration that came into power on quieted for ever. The distribution among the States the principles of reform was to increase the expense would place in each a fund amply sufficient for all the from thirteen to seventeen millions? But he said it great purposes of internal improvement and education, would be caused by the increase of population. The to be applied as the States thought proper. would be no further call from the States for appromachinery of Government, Mr. C. said, was the same in an increase of population that it was now. The salaries of priations for these purposes; and was there not great the President and pay of officers of the Government fitness in enabling the States to act for themselves, would be the same as now. The late Secretary (Mr. without asking for the bounty of the general GovernMcLane) had estimated the expenses at only fifteen ment? It was impossible to imagine any thing more fitmillions, and the late Senator from South Carolina, since ting or more proper, with regard to the new States as

and contended that the sales were not inordinate in amount, and that by 1814 we would not receive a million of dollars from them; that while the customs would be but fourteen millions, the expenses of Government would be seventeen millions of dollars, so that there would be a deficiency of two millions.

There