the greatest vigilance of the Government has been exerted to preserve them
at peace among themselves and to inspire them with feelings of confidence
in the justice of this Government and to cultivate friendship with the
border inhabitants. This has happily succeeded to a great extent, but it is
a subject of regret that they suffer themselves in some instances to be
imposed upon by artful and designing men and this notwithstanding all
efforts of the Government to prevent it.
The receipts into the Treasury for the calendar year 1843, exclusive of
loans, were little more than $ 18,000,000, and the expenditures, exclusive
of the payments on the public debt, will have been about $23,000,000. By
the act of 1842 a new arrangement of the fiscal year was made, so that it
should commence on the 1st day of July in each year. The accounts and
estimates for the current fiscal year will show that the loans and Treasury
notes made and issued before the close of the last Congress to meet the
anticipated deficiency have not been entirely adequate. Although on the 1st
of October last there was a balance in the Treasury, in consequence of the
provisions thus made, of $3,914,082.77, yet the appropriations already made
by Congress will absorb that balance and leave a probable deficiency of
$2,000,000 at the close of the present fiscal year. There are outstanding
Treasury notes to about the amount of $4,600,000, and should they be
returned upon the Treasury during the fiscal year they will require
provision for their redemption. I do not, however, regard this as probable,
since they have obviously entered into the currency of the country and will
continue to form a portion of it if the system now adopted be continued.
The loan of 1841, amounting to $5,672,976.88, falls due on the 1st day of
January, 1845, and must be provided for or postponed by a new loan; and
unless the resources of revenue should be materially increased by you there
will be a probable deficiency for the service of the fiscal year ending
June 30, 1845, of upward of $4,000,000.
The delusion incident to an enormously excessive paper circulation, which
gave a fictitious value to everything and stimulated adventure and
speculation to an extravagant extent, has been happily succeeded by the
substitution of the precious metals and paper promptly redeemable in
specie; and thus false values have disappeared and a sounder condition of
things has been introduced. This transition, although intimately connected
with the prosperity of the country, has nevertheless been attended with
much embarrassment to the Government in its financial concerns. So long as
the foreign importers could receive payment for their cargoes in a currency
of greatly less value than that in Europe, but fully available here in the
purchase of our agricultural productions (their profits being immeasurably
augmented by the operation), the shipments were large and the revenues of
the Government became superabundant. But the change in the character of the
circulation from a nominal and apparently real value in the first stage of
its existence to an obviously depreciated value in its second, so that it
no longer answered the purposes of exchange or barter, and its ultimate
substitution by a sound metallic and paper circulation combined, has been
attended by diminished importations and a consequent falling off in the
revenue. This has induced Congress, from 1837, to resort to the expedient
of issuing Treasury notes, and finally of funding them, in order to supply
deficiencies. I can not, however, withhold the remark that it is in no way
compatible with the dignity of the Government that a public debt should be
created in time of peace to meet the current expenses of the Government, or
that temporary expedients should be resorted to an hour longer than it is
possible to avoid them. The Executive can do no more than apply the means
which Congress places in its hands for the support of Government, and,
happily for the good of the country and for the preservation of its
liberties, it possesses no power to levy exactions on the people or to
force from them contributions to the public revenue in any form. It can
only recommend such measures as may in its opinion be called for by the
wants of the public service to Congress, with whom alone rests the power to
"lay and collect taxes, duties, imposts, and excises." This duty has upon
several occasions heretofore been performed. The present condition of
things gives flattering promise that trade and commerce are rapidly
reviving, and, fortunately for the country, the sources of revenue have
only to be opened in order to prove abundant.
While we can anticipate no considerable increase in the proceeds of the
sales of the public lands, for reasons perfectly obvious to all, for
several years to come, yet the public lands can not otherwise than be
regarded as the foundation of the public credit. With so large a body of
the most fertile lands in the world under the control and at the disposal
of this Government, no one can reasonably doubt the entire ability to meet
its engagements under every emergency. In seasons of trial and difficulty
similar to those through which we are passing the capitalist makes his
investments in the Government cut stocks with the most assured confidence
of ultimate reimbursement; and whatever may be said of a period of great
financial prosperity, such as existed for some years after 1833, I should
regard it as suicidal in a season of financial embarrassment either to
alienate the lands themselves or the proceeds arising from their sales. The
first and paramount duty of those to whom may be intrusted the
administration of public affairs is to guard the public credit. In
reestablishing the credit of this central Government the readiest and most
obvious mode is taken to restore the credit of the States. The extremities
can only be made sound by producing a healthy action in the central
Government, and the history of the present day fully establishes the fact
that an increase in the value of the stocks of this Government will in a
great majority of instances be attended by an increase in the value of the
stocks of the States. It should therefore be a matter of general
congratulation that amidst all the embarrassments arising from surrounding
circumstances the credit of the Government should have been so fully
restored that it has been enabled to effect a loan of $7,000,000 to redeem
that amount of Treasury notes on terms more favorable than any that have
been offered for many years. And the 6 per cent stock which was created in
1842 has advanced in the hands of the holders nearly 20 per cent above its
par value. The confidence of the people in the integrity of their
Government has thus been signally manifested. These opinions relative to
the public lands do not in any manner conflict with the observance of the
most liberal policy toward those of our fellow-citizens who press forward
into the wilderness and are the pioneers in the work of its reclamation. In
securing to all such their rights of preemption the Government performs but
an act of retributive justice for sufferings encountered and hardships
endured, and finds ample remuneration in the comforts which its policy
insures and the happiness which it imparts.
Should a revision of the tariff with a view to revenue become necessary in
the estimation of Congress, I doubt not you will approach the subject with
a just and enlightened regard to the interests of the whole Union. The
principles and views which I have heretofore had occasion to submit remain
unchanged. It can, however, never be too often repeated that the prominent
interest of every important pursuit of life requires for success permanency
and stability in legislation. These can only be attained by adopting as the
basis of action moderation in all things, which is as indispensably
necessary to secure the harmonious action of the political as of the animal
system. In our political organization no one section of the country should
desire to have its supposed interests advanced at the sacrifice of all
others, but union, being the great interest, equally precious to all,
should be fostered and sustained by mutual concessions and the cultivation
of that spirit of compromise from which the Constitution itself proceeded.
You will be informed by the report from the Treasury Department of the
measures taken under the act of the last session authorizing the reissue of
Treasury notes in lieu of those then outstanding. The system adopted in
pursuance of existing laws seems well calculated to save the country a
large amount of interest, while it affords conveniences and obviates
dangers and expense in the transmission of funds to disbursing agents. I
refer you also to that report for the means proposed by the Secretary to
increase the revenue, and particularly to that portion of it which relates
to the subject of the warehousing system, which I earnestly urged upon
Congress at its last session and as to the importance of which my opinion
has undergone no change.
In view of the disordered condition of the currency at the time and the
high rates of exchange between different parts of the country, I felt it to
be incumbent on me to present to the consideration of your predecessors a
proposition conflicting in no degree with the Constitution or with the
rights of the States and having the sanction (not in detail, but in
principle) of some of the eminent men who have preceded me in the Executive
office. That proposition contemplated the issuing of Treasury notes of
denominations of not less than $5 nor more than $100, to be employed in the
payment of the obligations of the Government in lieu of gold and silver at
the option of the public creditor, and to an amount not exceeding
$15,000,000. It was proposed to make them receivable everywhere and to
establish at various points depositories of gold and silver to be held in
trust for the redemption of such notes, so as to insure their
convertibility into specie. No doubt was entertained that such notes would
have maintained a par value with gold and silver, thus furnishing a paper
currency of equal value over the Union, thereby meeting the just
expectations of the people and fulfilling the duties of a parental
government. Whether the depositories should be permitted to sell or
purchase bills under very limited restrictions, together with all its other
details, was submitted to the wisdom of Congress and was regarded as of
secondary importance. I thought then and think now that such an arrangement
would have been attended with the happiest results. The whole matter of the
currency would have been placed where by the Constitution it was designed
to be placed--under the immediate supervision and control of Congress. The
action of the Government would have been independent of all corporations,
and the same eye which rests unceasingly on the specie currency and guards
it against adulteration would also have rested on the paper currency, to
control and regulate its issues and protect it against depreciation. The
same reasons which would forbid Congress from parting with the power over
the coinage would seem to operate with nearly equal force hi regard to any
substitution for the precious metals in the form of a circulating medium.
Paper when substituted for specie constitutes a standard of value by which
the operations of society are regulated, and whatsoever causes its
depreciation affects society to an extent nearly, if not quite, equal to
the adulteration of the coin. Nor can I withhold the remark that its
advantages contrasted with a bank of the United States, apart from the fact
that a bank was esteemed as obnoxious to the public sentiment as well on
the score of expediency as of constitutionality, appeared to me to be
striking and obvious. The relief which a bank would afford by an issue of
$15,000,000 of its notes, judging from the experience of the late United
States Bank, would not have occurred in less than fifteen years, whereas
under the proposed arrangement the relief arising from the issue of
$15,000,000 of Treasury notes would have been consummated in one year, thus
furnishing in one-fifteenth part of the time in which a bank could have
accomplished it a paper medium of exchange equal in amount to the real
wants of the country at par value with gold and silver. The saving to the
Government would have been equal to all the interest which it has had to
pay on Treasury notes of previous as well as subsequent issues, thereby
relieving the Government and at the same time affording relief to the
people. Under all the responsibilities attached to the station which I
occupy, and in redemption of a pledge given to the last Congress at the
close of its first session, I submitted the suggestion to its consideration
at two consecutive sessions. The recommendation, however, met with no favor
at its hands. While I am free to admit that the necessities of the times
have since become greatly ameliorated and that there is good reason to hope
that the country is safely and rapidly emerging from the difficulties and
embarrassments which everywhere surrounded it in 1841, yet I can not but
think that its restoration to a sound and healthy condition would be
greatly expedited by a resort to the expedient in a modified form.
The operations of the Treasury now rest upon the act of 1789 and the
resolution of 1816, and those laws have been so administered as to produce
as great a quantum of good to the country as their provisions are capable
of yielding. If there had been any distinct expression of opinion going to
show that public sentiment is averse to the plan, either as heretofore
recommended to Congress or in a modified form, while my own opinion in
regard to it would remain unchanged I should be very far from again
presenting it to your consideration. The Government has originated with the
States and the people, for their own benefit and advantage, and it would be
subversive of the foundation principles of the political edifice which they
have reared to persevere in a measure which in their mature judgments they
had either repudiated or condemned. The will of our constituents clearly
expressed should be regarded as the light to guide our footsteps, the true
difference between a monarchical or aristocratical government and a
republic being that in the first the will of the few prevails over the will
of the many, while in the last the will of the many should be alone
consulted.
The report of the Secretary of War will bring you acquainted with the
condition of that important branch of the public service. The Army may be
regarded, in consequence of the small number of the rank and file in each
company and regiment, as little more than a nucleus around which to rally
the military force of the country in case of war, and yet its services in
preserving the peace of the frontiers are of a most important nature. In
all cases of emergency the reliance of the country is properly placed in
the militia of the several States, and it may well deserve the
consideration of Congress whether a new and more perfect organization might
not be introduced, looking mainly to the volunteer companies of the Union
for the present and of easy application to the great body of the militia in
time of war.
The expenditures of the War Department have been considerably reduced in
the last two years. Contingencies, however, may arise which would call for
the filling up of the regiments with a full complement of men and make it
very desirable to remount the corps of dragoons, which by an act of the
last Congress was directed to be dissolved.
I refer you to the accompanying report of the Secretary for information in
relation to the Navy of the United States. While every effort has been and
will continue to be made to retrench all superfluities and lop off all
excrescences which from time to time may have grown up, yet it has not been
regarded as wise or prudent to recommend any material change in the annual
appropriations. The interests which are involved are of too important a
character to lead to the recommendation of any other than a liberal policy.
Adequate appropriations ought to be made to enable the Executive to fit out
all the ships that are now in a course of building or that require repairs
for active service in the shortest possible time should any emergency arise
which may require it. An efficient navy, while it is the cheapest means of
public defense, enlists in its support the feelings of pride and confidence
which brilliant deeds and heroic valor have heretofore served to strengthen
and confirm.
I refer you particularly to that part of the Secretary's report which has
reference to recent experiments in the application of steam and in the
construction of our war steamers, made under the superintendence of
distinguished officers of the Navy. In addition to other manifest
improvements in the construction of the steam engine and application of the
motive power which has rendered them more appropriate to the uses of ships
of war, one of those officers has brought into use a power which makes the
steamship most formidable either for attack or defense. I can not too
strongly recommend this subject to your consideration and do not hesitate
to express my entire conviction of its great importance.
I call your particular attention also to that portion of the Secretary's
report which has reference to the act of the late session of Congress which
prohibited the transfer of any balance of appropriation from other heads of
appropriation to that for building, equipment, and repair. The repeal of
that prohibition will enable the Department to give renewed employment to a
large class of workmen who have been necessarily discharged in consequence
of the want of means to pay them--a circumstance attended, especially at
this season of the year, with much privation and suffering.
It gives me great pain to announce to you the loss of the steamship the
Missouri by fire in the Bay of Gibraltar, where she had stopped to renew
her supplies of coal on her voyage to Alexandria, with Mr. Cushing, the
American minister to China, on board. There is ground for high commendation
of the officers and men for the coolness and intrepidity and perfect
submission to discipline evinced under the most trying circumstances.
Surrounded by a raging fire, which the utmost exertions could not subdue,
and which threatened momentarily the explosion of her well-supplied
magazines, the officers exhibited no signs of fear and the men obeyed every
order with alacrity. Nor was she abandoned until the last gleam of hope of
saving her had expired. It is well worthy of your consideration whether the
losses sustained by the officers and crew in this unfortunate affair should
not be reimbursed to them.
I can not take leave of this painful subject without adverting to the aid
rendered upon the occasion by the British authorities at Gibraltar and the
commander, officers, and crew of the British ship of the line the Malabar,
which was lying at the time in the bay. Everything that generosity or
humanity could dictate was promptly performed. It is by such acts of good
will by one to another of the family of nations that fraternal feelings are
nourished and the blessings of permanent peace secured.
The report of the Postmaster-General will bring you acquainted with the
operations of that Department during the past year, and will suggest to you
such modifications of the existing laws as in your opinion the exigencies
of the public service may require. The change which the country has
undergone of late years in the mode of travel and transportation has
afforded so many facilities for the transmission of mail matter out of the
regular mail as to require the greatest vigilance and circumspection in
order to enable the officer at the head of the Department to restrain the
expenditures within the income. There is also too much reason to fear that
the franking privilege has run into great abuse. The Department,
nevertheless, has been conducted with the greatest vigor, and has attained
at the least possible expense all the useful objects for which it was
established.
In regard to all the Departments, I am quite happy in the belief that
nothing has been left undone which was called for by a true spirit of
economy or by a system of accountability rigidly enforced. This is in some
degree apparent from the fact that the Government has sustained no loss by
the default of any of its agents. In the complex, but at the same time
beautiful, machinery of our system of government, it is not a matter of
surprise that some remote agency may have failed for an instant to fulfill
its desired office; but I feel confident in the assertion that nothing has
occurred to interrupt the harmonious action of the Government itself, and
that, while the laws have been executed with efficiency and vigor, the
rights neither of States nor individuals have been trampled on or
disregarded.
In the meantime the country has been steadily advancing in all that
contributes to national greatness. The tide of population continues
unbrokenly to flow into the new States and Territories, where a refuge is
found not only for our native-born fellow-citizens, but for emigrants from
all parts of the civilized world, who come among us to partake of the
blessings of our free institutions and to aid by their labor to swell the
current of our wealth and power.
It is due to every consideration of public policy that the lakes and rivers
of the West should receive all such attention at the hands of Congress as
the Constitution will enable it to bestow. Works in favorable and proper
situations on the Lakes would be found to be as indispensably necessary, in
case of war, to carry on safe and successful naval operations as
fortifications on the Atlantic seaboard. The appropriation made by the last
Congress for the improvement of the navigation of the Mississippi River has
been diligently and efficiently applied.
I can not close this communication, gentlemen, without recommending to your
most favorable consideration the interests of this District. Appointed by
the Constitution its exclusive legislators, and forming in this particular
the only anomaly in our system of government--of the legislative body being
elected by others than those for whose advantage they are to legislate--you
will feel a superadded obligation to look well into their condition and to
leave no cause for complaint or regret. The seat of Government of our
associated republics can not but be regarded as worthy of your parental
care.
In connection with its other interests, as well as those of the whole
country, I recommend that at your present session you adopt such measures
in order to carry into effect the Smithsonian bequest as in your judgment
will be best calculated to consummate the liberal intent of the testator.