of them it has been the constant object to create and to main
tain a public debt, and of another to prevent and to discharge
it. This I consider as an unfounded imputation on those w r ho
have conducted the government of this country. The President
says, " I have deemed this brief summary of our fiscal affairs
necessary to the due performance of a duty specially enjoined
upon me by the Constitution. It will serve also to illustrate
more fully the principles by which I have been guided in refer
ence to two contested points in our public policy, which were
earliest in their development, and have been more important in
their consequences than any that have arisen under our system
of government; I allude to a national debt and a national
bank." About a national bank I have nothing at present to
say ; but here it is officially announced to us, that it has been a
great contested question in the country, whether there shall or
shall not be a national debt, as if there were public men who
wished a national debt, to be created and perpetuated for its
own sake ! Now I submit it to the Senate, whether there has
ever existed in the country any party, at any time, which avowed
itself in favor of a national debt, per se, as a thing desirable ?
Does the history of the past debts contracted by the government
lay the least foundation for any such assertion? The first
national debt we have had was the loan negotiated in Holland,
by John Adams. None, I presume, ever doubted the policy of
such a loan, in the then existing circumstances of the country.
42 STATE OF THE FINANCES IN 1840.
Then there came the debt contracted for the pay of the Revo
lutionary army, by the Continental Congress, or rather by the
country through that Congress. Next were the debts incurred
during the war, by the States, for the purpose of carrying on the
war. Provision was made for discharging these debts as the
cost of our Revolution ; can any body object to a debt like this ?
Of the same character were the loans made by government to
<?.arrv on the late war with Great Britain. These are the princi
pal national debts we have ever contracted, and I cannot but
think it singularly unfortunate that what looks so much like an
imputation on those who authorized these loans should come
from the head of an administration which, so far as I know, is
the fast that has ever commenced a national debt in a time of
And now to proceed to the actual state of the finances. The
message, though it does not call the obligations of the govern
ment a national debt, but, on the contrary, speaks in the strong
est terms against a national debt, yet admits that there are
treasury-notes outstanding, and bearing interest, to the amount
of four and a half millions ; and I see, connected with this,
other important and leading facts, very necessary to be consid
ered by those who would look out beforehand that they may
provide for the future.
Of these, the first in importance is, that the expenditures of
the government, during the term of the present administration,
have greatly exceeded its income. I shall not now argue the
question whether these expenditures have been reasonable or
unreasonable, necessary or unnecessary. I arn looking at the
facts in a financial view, purely ; and I say that during the last
four years the public expenditure has exceeded the public income
at the rate of SEVEN MILLIONS OF DOLLARS PER ANNUM. This
is easily demonstrated.
At the commencement of the first year of this presidential
term, in January, 1837, there was in the treasury a balance of
six millions of dollars, which was reserved from distribution by
what has usually been called the Deposit Act. The intention
of Congress was to reserve five millions only ; but, in conse
quence of an uncertainty which attended the mode of effecting
this result, the Secretary wishing to be in his calculations, at
least, on the safe side, it turned out that the sum actually re-
STATE OF THE FINANCES IN 1840. 43
served was six millions. Here, then, was this amount in the
treasury on the 1st of January, 1837. Events occurred during
that year which induced Congress to modify the deposit act, so
as to retain in the treasury the fourth instalment of the sum to
be deposited with the States, which amounted to nine millions.
I find, further, from the communications of the Secretary of the
Treasury now submitted to the Senate, that, for the stock be
longing to the public in the Bank of the United States, for which
bonds had been given to the treasury by the Bank of the United
States of Pennsylvania, which bonds are now paid, there have
been received eight millions. Now, Sir, these are all items of
a preexisting fund, no part of which has accrued since January,
To these I may add the outstanding treasury-notes running
on interest (four and a half millions), and the whole forms an
aggregate of twenty-seven and a half millions of dollars, in addi
tion to the current revenue, which have been expended in three
and a half or four years, excepting, of course, what may remain
in the treasury at the end of that term. Here, then, has the gov
ernment been expending money at the rate of nearly eight mil
lions per annum beyond its income. What state of things is
that ? Suppose it should go on. Does not every man see that
we have a vast debt immediately before us?
But is this all ? I am inclined to think that, in one respect at
least, it is not all. The treasury, I think, has not duly distin
guished, in reference to one important branch of its administra
tion, between treasury funds proper and a trust fund, set apart
by treaty stipulation, to be invested for the benefit of certain
Indian tribes. I say the treasury has taken, as belonging to the
government, that which properly belongs to a trust fund, which
the government engaged to invest in permanent stocks for the
benefit of certain Indian tribes. This makes it necessary to look
a little into these trust funds. By our treaty with the Chicka-
saws, the proceeds of the sales of the lands ceded to the United
States by that tribe were to be invested in permanent stocks,
for the use of the members of that tribe. At the date of the
last communication which I find from the treasury, the amount
received on these sales was 2,498,000.06. Bonds had been
purchased to the amount of $ 1.994,141.03 ; but as some of
these bonds were purchased at rates above par, the sums vested
STATE OF THE FINANCES IN 1840.
in them amounted to $ 2,028,678.54. This would leave a bal
ance of 369,000 uninvested at that time ; and the Secretary
informs us that the portion of it which had been received from
the land offices had been " mixed up in the general fund." Here,
then, is one item of trust money, money not our own, which has
been mixed up with our own money, and received as part of the
available funds of the treasury. The stocks purchased for the
Chickasaws appear to be as follows :
Treasurer s office, Tcnn.,
do. do. do.
Phoenix Bank, N. Y., .
do. do. do.
Union Bank, N. Orleans,
Commercial Bank, do.
New York, .
1st January and July,
25th January and July,
1st Monday May and Nov.
1st Monday June and Dec.
1st January and 1st July.
41 000 00
8th February and August,
1st January and quarterly.
Amount of stock for C
$ 1 994 141 03
As a matter of account and book-keeping, this might be
thought correct, or it might not ; but I think it would have been
better to keep a separate account for funds thus held in trust, as
every private individual does, who is made a trustee for the
interests of others. If the facts are as I have gathered from
the report submitted to Congress, here are three or four hundred
thousand dollars of the trust fund not invested, and which remain
yet to be invested for the benefit of these Indian tribes. As to
the rates at which these bonds were purchased, I find it stated
that one "lot" of Alabama bonds was taken on the 31st of
March, 1836, at 4| per cent, premium ; others, immediately after,
at 4; others, in May, at 3^; and others, in March, 1837, at 1 per
cent, off. Tennessee bonds were purchased at par; Ohio bonds
at 11/ G advance ; part of the Maryland bonds at 3 per cent. off .
part at 1 per cent, off, and part at 14j 4 advance.
So much for the investment under the treaty with the Chick
asaws. But we have other treaties presenting a more important
case. We have treaties with eight tribes of Indians, by which
the United States stipulated to invest the amounts agreed to be
STATE OF THE FINANCES IN 1840.
paid for the lands ceded by them in State stocks. Take, for
example, the stipulation in the treaty with the Sioux of the Mis
sissippi. The article of the treaty is in these words :
" Art. 2. In consideration of the cession contained in the preceding
article, the United States agree to the following stipulations on their
part : First, to invest the sum of 8 300,000 in such safe and profitable
State stocks as the President may direct, and to pay to the chiefs and
braves as aforesaid, annually, for ever, an income of not less than five
per cent, thereon."
The stipulations in the other treaties are substantially the
same. The whole amount thus agreed to be invested for the
eight tribes, by treaties mostly entered into in the years 1837
and 1838, is $2,580,100. This appears from the following
statement, which I find in the documents.
Statement exhibiting the Amount of Interest appropriated by Congress
to pay the following Tribes, in lieu of investing the Sums, provided
by the Treaties, in Stocks.
Names of Tribes.
ed by Treaties
to be invested
in safe Stocks.
Oitawas and Chippewas,
Resolution of Senate.
Resolution of Senate,
Jan. 19, 1838.
Treaty, Sept. 29, 1837.
Treaty, Oct. 21, 1837.
Treaty, Oct. 21, 1837.
Treaty, Nov. 1, 1837.
Treaty, Nov. 23, 1838.
Sioux of Mississippi,
Sacs and Foxes of Mississippi,
Sacs and Foxes of Missouri,
Now, Sir, not one dollar of all this has been invested. The
very statement which I have quoted shows this. The state
ment declares, that, instead of investing this large sum, accord
ing to contract, the United States pays interest upon it, as upon
We are indebted, therefore, to these Indians in the whole
amount we agreed to pay for these lands, which have been
transferred to us, surveyed, put in market, and large portions
of them, I suppose, before this, been disposed of. We prom
ised to invest the proceeds for their benefit, which has not been
46 STATE OF THE FINANCES IN 1840.
done. Instead of asking for money wherewith to purchase
these stocks, the treasury has been contented to ask for the
amount of interest only, holding the United States debtors to
the Indians, whereby a debt, to all intents and purposes, to the
whole amount of this trust fund, is created, and is to be added
to the amount of debt due by the government. I do not say it
must be paid to-day, or to-morrow ; but it is an outstanding
debt. The government is under an undischarged treaty obliga
tion to raise the money, and with it to buy stock for the benefit
of the Indians.
In addition to all this, there will be found, I have no doubt, a
heavy amount of outstanding debts due for public works, ex
penses growing out of army operations in Florida, indemnities
for Indian spoliations in the South and West, and for a variety
of other objects.
Now, Sir, I agree with all that is said in the message as to
the great impolicy, in time of peace, of commencing a public
debt ; but it seems to me rather extraordinary and inappropriate
in the President to admonish others against such a measure,
with all these facts immediately before him. In principle, there
is no difference, as to the creation of a public debt, whether it
be by issuing stock, redeemable after a certain period, or by
issuing treasury-notes, which are renewable, and constantly re
newed ; and if there be any difference in point of expediency,
none can entertain any great doubt which of the two forms is
best. Treasury-notes are certainly not the cheaper of the two.
Now, we find the existence of this public debt as early as the
existence of the present administration itself. It began at the
extra session, in September, 1837. From the date of the first
treasury-note bill, in October, 1837, there has been no moment
in which the government has not been in debt for borrowed
money. The Secretary says it is not expected that the treas
ury-notes now out can be paid off earlier than in March, 1842.
In whatever soft words he chooses to clothe the matter, the sum
and substance is this, that there must be a new issue of treas
ury-notes before the government can be freed from embarrass
I must confess that it seems to me that the scope and ten
dency of the remarks in the message are to produce an errone
ous impression. Here is a series of very strong sentiments
STATE OF THE FINANCES IN 1840. 47
against a public debt, against beginning a public debt, and all
said in face of a debt already begun, existing now, and under
such circumstances as to create the fear that it will turn out to
be a very large one. We know that these various outstanding
charges cannot, or at least will not, be brought together, and
presented in one aggregate sum, for some months to come. Is
it intended by this document to forestall public opinion, so as,
when it shall appear that there is a public debt, to give to it a
date posterior to the 4th of March next ? I hope not. I do not
impute such a design. So far, however, as I am concerned, I
shall take special good care to prevent any such result. I shall
certainly recommend that there be a new set of books opened ;
that there be what merchants call " a rest " ; that what is col
lected prior to March, 1841, and what is expended prior to
March, 1841, stand against each other ; so that, if there shall
appear a balance in favor of this administration, it may be
stated ; and if the result shall be that the administration is
left in debt, let that debt appear, and let it be denominated
; the debt of 1841," which it will be the duty of Congress, as
such, to provide for.
In one or two other respects, the message is calculated to cre
ate quite an erroneous impression. On the fifth page, the Presi
dent speaks on the subject of the treasury -notes in as mitigated
a tone as possible, and tells us, first, that " this small amount
still outstanding " is " composed of such as are not yet due."
I suppose we all knew that. And then he adds that they are
" less by twenty-three millions than the United States have on
deposit with the States." I ask the Senate, and I would ask
the President if I could, whether he means to recommend to
Congress to withdraw the deposits now in the hands of the
States, in order to discharge this debt on treasury-notes ? Do
the administration look to these deposits as a fund out of which
to discharge any of the debts of the treasury ? I find no recom
mendation of such a measure. Why, then, were these two
things connected? There is nothing in the fact that the amount
of treasury-notes is less by twenty-three millions than the
amount deposited with the States, unless the President means
to recommend that the latter sum shall be looked to as a means
of discharging the former. Does he mean merely to inform
Congress that twenty-three are less than twenty-eight ? If not,
48 STATE OF THE FINANCES IN 1840.
why arc the two thus placed in juxtaposition, and their amounts
The Secretary of the Treasury treats the matter in much the
same way. He speaks of the deposits with the States as of
funds in the treasury. Look at his report. In stating the re
sources of the treasury, he mentions the twenty-eight millions
on deposit with the States. What can be the purpose of such
a statement ? When a Secretary of the Treasury presents to
the world a statement of the means of his department, it is uni
versally supposed that his statement is confined to what either
exists in the treasury, or is likely to accrue under the operation
of existing laws. But this deposit with the States is no more
under the control of the treasury, than any other money in the
country. He knows full well that an act of Congress is as ne
cessary to his disposal of any part of that sum, as it is to aug
ment the rate of duties at the custom-house. The treasury can
no more use the deposits with the States, than it can lay a
direct tax. What can be the purpose, the fair purpose, of pre
senting sums as funds in the treasury, when they are not in the
treasury ? Or what can be the fair purpose of referring to a
fund as a means of payment, when it cannot be touched unless
the President means to recommend to Congress to recall the de
posits made with the States ? That Congress can do, and so it
can augment the rate of duties ; but till it does, those deposits
are no more means in the treasury than if they belonged to an
other nation. The day, I hope, will come, I have long desired it,
when we shall see plain fact plainly stated ; when the reports of
our fiscal officers will deal less in guesses at the future, and will
no longer use forms and phrases, I will not say which are
designed to mislead or to mystify, but the result of which is to
mislead the nation, by mystifying the subject.
I said that, though the honorable Secretary pretty clearly inti
mates that we must resort to a new issue of treasury-notes, yet
the result of all is, that, if Congress wishes to avoid the necessity
either of increasing the duties or of issuing new treasury-notes,
he has a resource ready for it ; namely, to reduce its appropri
ations below even his own estimates. This is much like what
he told us last year ; and yet, though we did reduce our ap
propriations within even his estimates, still the treasury is in
want of money.
STATE OF THE FINANCES IN 1840. 49
One other remark is suggested by what the President says to
us on the sixth page of his message. He tells us that it is pos
sible to avoid the " creation of a permanent debt by the general
government," and then goes on to observe : " But, to accomplish
so desirable an object, two things are indispensable ; first, that
the action of the federal government be kept within the bounds
prescribed by its founders." Now, I did suppose that this duty
of keeping the action of the federal government within the
bounds of the Constitution was absolute ; that it was not affect
ed by times, circumstances, or condition, but was always per
emptory and mandatory. What is the inference to be drawn
from the President s language ? If the treasury is empty, you
must keep within the Constitution. And what if it is full?
Are you to break its bounds ? to transcend the Constitution ? 1
have always thought we should neither be tempted to do this by
an overflowing treasury, nor deterred by an empty one from
taking such a course as the exigencies of the country might re
quire in the discharge of our duties. The duty of keeping with
in our constitutional limits is an absolute duty, existing at all
times and in all conditions of things. If the treasury be full to
overflowing, we are still to undertake nothing, to expend money
for nothing, which is not fairly within our power. And if the
treasury be empty, and the public service demand expendi
tures, such as it is our province to make, we are to replenish the
There is also an important omission in the message, to which
I would call the notice of the Senate and of the country. The
President says the revenue has fallen off two and a half mil
lions of dollars under two biennial reductions of the rate of
duties at the custom-houses under the law of 1833. Be it so.
But do we not all know that there is before us, within a year, a
much greater " relinquishment " (if that is the term to be applied
to it), and within a year and a half more another, and the last
of these reductions ? Do we not see, then, from the present
existence of a large debt, and from this further reduction of
duties, (that is, if nothing shall be done to change the law as it
now stands,) that a case is presented which will call for the
deliberate consideration of Congress, and that some effort will
be required to relieve the country ?
But here is no recommendation at all on the subject of reve-
VOL. v. 5
50 STATE OF THE FINANCES IN 1840.
nue. No increase is recommended of the duties on articles of
luxury, such as wines and silks, nor any other way suggested of
providing for the discharge of the existing debt. The result of
the whole is, that the experience of the President has shown
that the revenue of the country is not equal to its expenditure ;
that the government is spending seven millions a year beyond
its income ; and that we are in the process of running right into
the jaws of debt. And yet there is not one practical recom
mendation as to the reduction of the debt, or its extinguish
ment ; but the message contents itself with general and ardent
recommendations not to create a debt.
I know not what will be done to meet the deficiency of the
next quarter. I suppose the Secretary s recommendation to
issue treasury-notes will be followed. I should myself have
greatly preferred a tax on wines and silks. It is obvious that,
if this or something like it is not done, the time approaches,
and is not far off, when provision must be made by another
I have thus stated my views of this portion of the message.
I think it leads to what may render an extra session necessary,
a result I greatly deprecate on many accounts, especially on
account of the great expenditure with which it will unavoidably
be attended. I hope, therefore, that those who now have the
power in their hands will make such reasonable and adequate
provision for the public exigency as may render the occurrence
of an extra session unnecessary.
Mr. Wright having on the 17th instant spoken in answer to Mr. Web
ster s remarks of the day before, Mr. Webster replied, to the following
I shall detain the Senate but a short time in answer to some
of the honorable member s remarks, as he has really not met the
argument which I had the honor yesterday to submit to the
Senate. To begin with the subject of Indian treaties. The
honorable member has said, that the fund arising from the sale
of the Chickasaw lands has all been invested to within some
forty or fifty thousand dollars. I founded what I said in relation
to this fund on the returns furnished to the Senate, and, accord
ing to that document, the balance uninvested amounts to three
hundred and sixty thousand dollars. I added, that I had heard
STATE OF THE FINANCES IN 1840. 51
that ninety thousand dollars had been invested since the date of
the returns. I made no complaint of the mode in which this
fund has been invested, so far as it has been invested; and if the
whole of it has been invested, so much the better. But in regard
to the two and a half millions of the fund belonging to the
Winnebagoes and other tribes, and which, according to the
treaty, was to be invested for the benefit of those tribes, I
ask of the Senate whether the gentleman from New York
has fairly met the force of the argument advanced by me.
I have not complained of the treaty, nor charged the admin
istration with any extravagance or want of providence in
entering into it. That is not the point. The point is, that
this amount constitutes a debt) for the payment of which it is
incumbent on the government to provide ; and that, as such, it