John S. (John Stilwell) Jenkins.

The life of James Knox Polk online

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thousand six hundred and six dollars ; of which, the amount

190 JAMES KNOX POLK. [1845.

of domestic articles was ninety-nine millions two hundred and
ninety-nine thousand seven hundred and seventy-six dollars.
The receipts into the treasury during the same year were
twenty-nine millions seven hundred and sixty-nine thousand
one hundred and thirty-three dollars and fifty-six cents ; of
which, there were derived from customs, twenty-seven millions
five hundred and twenty-eight thousand one hundred and
twelve dollars and seventy cents ; from sales of public lands,
two millions seventy-seven thousand and twenty-two dollars
and thirty cents ; and from incidental and miscellaneous
sources, one hundred and sixty-three thousand nine hundred
and ninety-eight dollai-s and fifty-six cents. The expenditures
for the same period were twenty-nine millions nine hundred
and sixty-eight thousand two hundred and six dollars and
ninety-eight cents ; of which eight millions five hundred and
eighty-eight thousand one hundred and fifty-seven dollars and
sixty- two cents were applied to the payment of the public
debt. The balance in the treasury on the first of July last,
was seven millions six hundred and fifty-eight thousand three
hundred and six dollars and twenty-two cents.

The amount of public debt remaining upaid on the first of
October last, was seventeen millions seventy-five thousand
four hundred and forty-five dollars and fifty-two cents. Fur-
ther payments of the public debt would have been made in
anticipation of the period of its reimbursement under the au-
thority conferred upon the Secretary of the Treasury by the
acts of July twenty-first, 1841, and of April fifteenth, 1842,
and March third, 1843, had not the unsettled state of our re-
lations with Mexico menaced hostile collision with that power.
In view of such a contingency, it was deemed prudent to re-
tain in the treasury an amount unusually large for ordinary

A few years ago, our whole national debt growing out of
the Revolution and the war of 1812 with Great Britain, was
extinguished, and we presented to the world the rare and


noble spectacle of a great and growing people who had fully
discharged every obligation. Since that time, the existing
debt has been contracted ; and small as it is, in comparison
with the similar burdens of most other nations, it should be
extinguished at the earliest practicable period. Should the
state of the country permit, and, especially, if our foreio-n
relations interpose no obstacle, it is contemplated to apply all
the moneys in the treasury as they accrue, beyond what is
required for the appropriations by Congress, to its liquidation.
I cherish the hope of soon being able to congratulate the
country on its recovering once more the lofty position which
it so recently occupied. Our country, which exhibits to the
world the benefits of self-government, in developing all the
sources of national prosperity, owes to mankind the perma-
nent example of a nation free from the blighting influence of
a public debt.

The attention of Congress is invited to the importance of
making suitable modifications and reductions of the rates of
duty imposed by our present tariff laws. The object of im-
posing duties on imports should be to raise revenue to pay
the necessary expenses of government. Congress may, un-
doubtedly, in the exercise of a sound discretion, discriminate
in arranging the rates of duty on different articles ; but the
discriminations should be within the revenue standard, and be
made with a view to raise money for the support of govern-

It becomes important to understand distinctly what is meant
by a revenue standard, the maximum of which should not be
exceeded in the rates of duty imposed. It is conceded, and
experience proves, that duties may be laid so high as to di-
minish, or prohibit altogether, the importation of any given
article, and thereby lessen or destroy the revenue which, at
lower rates, would be derived from its importation. Such
duties exceed the revenue rates, and are not imposed to raise
money for the support of government. If Congress levy a

192 JAMES KNOX POLK. [1845.

duty, for revenue, of one per cent, on a given article, it will
produce a given amount of money to the treasury, and will
incidentally and necessarily afford protection, or advantage,
to the amount of one per cent, to the home manufacturer of
a similar or like article, over the importer. If the duty be
raised to ten per cent., it will produce a greater amount of
money, and afford greater protection. If it be still raised to
twenty, twenty-five or thirty per cent., and if, as it is raised,
the revenue derived from it is found to be increased, the pro-
tection or advantage will also be increased; but if it be
raised to thirty-one per cent., and it is found that the reve-
nue produced at that rate is less than thirty per cent., it
ceases to be a revenue duty. The precise point in the as-
cending scale of duties at which it is ascertained from experi-
ence that the revenue is greatest, is the maximum rate of
duty which can be laid for the bona fide purpose of collecting
money for the support of government. To raise the duties
higher than that point, and thereby diminish the amount col-
lected, is to levy them for protection merely, and not for
revenue. As long, then, as Congress may gradually increase
the rate of duty on a given article, and the revenue is in-
creased by such increase of duty, they are within the revenue
standard. When they go beyond that point, and, as they
increase the duties the revenue is diminished or destroyed,
the act ceases to have for its object the raising of money to
support government, but is for protection merely.

It does not follow that Congress should levy the highest
duty on all articles of import which they will bear within the
revenue standard ; for such rates would probably produce a
much larofer amount than the economical administration of
the government would require. Nor does it follow that the
duties on all articles should be at the same or a horizontal
rate. Some articles will bear a much higher revenue duty than
others. Below the maximum of the revenue standard Con-
gress may and ought to discriminate in the rates imposed, tak-


ing care so to adjust tliem on different articles as to produce
in the aggregate, the amount which, when added to the pro-
ceeds of the sales of public lands, may be needed to pay the
economical expenses of government

In levying a tariff of duties, Congress exercises the taxing
power, and for purposes of revenue may select the objects of
taxation. They may exempt certain articles altogether, and
peraiit their importation free of duty. On others they may
impose low duties. In these classes may be embraced such
articles of necessity as are in general use, and especially such
as are consumed by the laborer and the poor as well as by
the wealthy citizen. Care should be taken that all the great
interests of the country, including manufactures, agriculture,
commerce, navigation and the mechanic arts, should, as far
as may be practicable, derive equal advantages from the inci-
dental protection which a just system of revenue duties may
afford. Taxation, direct or indirect, is a burden, and it should
be so imposed as to operate as equally as may be, on all
classes, in the proportion of their abihty to bear it. To make
the taxing power an actual benefit to one class, necessarily
increases the burden of the others beyond their proportion,
and would be manifestly unjust.

The terms " protection to domestic industry," are of pop-
ular import ; but they should apply under a just system to
all the various branches of industry in our country. The
farmer or planter who toils yearly in his fields, is engaged in
" domestic industry," and is as much entitled to have his labor
" protected," as the manufacturer, the man of commerce, the
navigator, or the mechanic, who are engaged also in " domes-
tic industry " in their different pursuits. The joint labors of
all these classes constitute the aggregate of the " domestic
industry " of the nation, and they are equally entitled to the
nation's " protection." No one of them can justly claim to
be the exclusive recipients of " protection," which can only
be afforded by increasing burdens on the " domestic indus-
try " of the others.

194 JAMES KNOX POLK. [1845.

If these views be correct, it remains to inquire how far the
tariff act of 1842 is consistent with them. That many of the
provisions of that act are in violation of tlie cardinal principles
here laid down, all must concede. The rates of duty imposed
by it on some articles are prohibitory, and on others so high
as greatly to diminish importations, and to produce a less
amount of revenue than would be derived from lower rates.
They operate as " protection merely,'' to one branch of " do-
mestic industry," by taxing other branches.

By the introduction of minimums, or assumed and false
values, and by the imposition of specific duties, the injustice
and inequality of the act of 1842, in its practical operations
on different classes and pursuits, are seen and felt. Many
of the oppressive duties imposed by it under the operation of
these principles, range from one per cent., to more than two
hundred per cent.

They are prohibitory on some articles, and partially so on
others, and bear most heavily on articles of common neces-
sity, and but lightly on articles of luxury. It is so framed
that much the greatest burden which it imposes is thrown
on labor and the poorer classes who are least able to bear it,
while it protects capital, and exempts the rich from paying
their just proportion of the taxation required for the support
of government. While it protects the capital of the wealthy
manufacturer, and increases his profits, it does not benefit the
operatives or laborers in his employment, whose wages have
not been increased by it. Articles of prime necessity or of
coarse quality and low price, used by the masses of the peo-
ple, are in many instances subjected by it to heavy taxes,
while articles of finer quality and higher price, or of luxury,
•which can be used only by the opulent, are lightly taxed. It
imposes heavy and unjust burdens on the farmer, the planter,
the commercial man, and those of all other pursuits except
the capitalist who has made his investments in manufactures.
All the great interests of the country are not, as nearly as
may be practicable, equally protected by it.


The government, in theory, knows no distinction of per-
sons or classes, and should not bestow upon some favors and
privileges which all others may not enjoy. It was the pur-
pose of its illustrious founders to base the institutions which
they reared upon the great and unchanging principles of jus-
tice and equity, conscious that if administered in the spirit in
which they were conceived, they would be felt only by the
benefits which they diffused, and would secure for themselves
a defence in the hearts of the people, more powerful than
standing armies, and all the means and appliances invented
to sustain governments founded in justice and oppression.

The well-known fact, that the tariff act of 1842 was passed
by a majority of one vote in the Senate, and two in the House
of Representatives, and that some of those who felt them-
selves constrained, under the peculiar circumstances existing
at the time, to vote in its favor, proclaimed its defects, and ex-
pressed their determination to aid in its modilicaton on the
first opportunity, affords strong and conclusive evidence that
it was not intended to be permanent, and of the expediency
and necessity of its thorough revision.

In recommending to Congress a reduction of the present
rates of duty, and a revision and modification of the act of
1842, I am far from entertaining opinions unfriendly to the
manufacturers. On the contrary, I desire to see them pros-
perous, as far as they can be so, without imposing unequal
burdens on other interests. The advantage under any sys-
tem of indirect taxation, even within the revenue standard,
must be in favor of the manufacturing interest ; and of this
no other interest will complain.

I recommend to Congress the aboUtion of the minimum
principle, or assumed, arbitrary, and false values, and of spe-
cific duties, and the substitution in their place of ad valorem
duties, as the fairest and most equitable indirect tax which
can be imposed. By the ad valorem principle, all articles are
taxed according to their cost or value, and those which are

196 JAMES KNOX POLK. [1845«

of inferior quality, or of small cost, bear only the just pro-
portion of the tax with those which are of superior quality or
greater cost. The articles consumed by all are taxed at the
same rate. A system of ad valorem revenue duties, with
proper discriminations and proper guards against frauds in
collecting them, it is not doubted, will afibrd ample incidental
advantages to the manufacturers, and enable them to derive
as great profits as can be derived from any other regular busi-
ness. It is believed that such a system, strictly within the
revenue standard, will place the manufacturing interests on a
stable footing, and enure to their permanent advantage ;
while it will, as nearly as may be practicable, extend to all the
great interests of the country the incidental protection which
can be afforded by our revenue laws. Such a system, when
once firmly established, would be permanent, and not be sub-
ject to the constant complaints, agitations and changes which
must ever occur, when duties are not laid for revenue, but
for the " protection merely" of a favored interest.

In the deliberations of Congress on this subject, it is hoped
that a spirit of mutual concession and compromise between
conflicting interests may prevail, aad that the result of their
labors may be crowned with the happiest consequences.

By the constitution of the United States it is provided, that
" no money shall be drawn from the treasury but in conse-
quence of appropriations made by law/' A public treasury
was undoubtedly contemplated and intended to be created,
in which the public money should be kept from the period of
collection until needed for public uses. In the collection
and disbursement of the public money, no agencies have
ever been employed by law, except such as were appointed
by the government, directly responsible to it, and under its
control. The safe keeping of the public money should be
confided to a public treasury created by law, and under like
responsibility and control. It is not to be imagined that the
framers of the constitution could have intended that a treas-


uiy should be created as a place of deposit and safe-keeping
of the public money which was irresponsible to the govern-
ment. The first Congress under the constitution, by the act
of the second September, 1789, " to establish the Treasury
Department," providiid for the appointment of a treasurer,
and made it his duty " to receive and keep the moneys of the
United States," and " at all times to submit to the Secretary
of the Treasury and the Comptroller, or either of them, the
inspection of the moneys in his hands."

That banks, national or State, could not have been intended
to be used as a substitute for the treasury spoken of in the
constitution, as keepers of the public money, is manifest from
the fact, that at that time there was no national bank, and
but three or four State banks of limited capital existed in the
country. Their employment as depositories was at first re-
sorted to, to a limited extent, but with no avowed intention
of continuing them permanently, in place of the treasury of
the constitution. When they were afterwards from time to
time employed, it was from motives of supposed convenience.
Our experience has shown, that when banking corporations
have been the keepers of the public money, and been thereby
made in effect the treasury, the government can have no guar-
anty that it can command the use of its own money for pub-
lic purposes. The late Bank of the United States proved
to be faithless. The State banks, which were afterwards em-
ployed, were faithless. But a few years ago, with millions of
public money in their keeping, the government was brought
almost to bankruptcy, and the public credit seriously im-
paired, because of their inability or indisposition to pay, on
demand, to the public creditors, in the only currency recog-
nized by the constitution. Their failure occurred in a period
of peace, and great inconvenience and loss were suffered by
the public from it. Had the country been involved in a for-
eign war, that inconvenience and loss would have been much
greater, and might have resulted in extreme public calamity.

198 JAMES KNOX POLK. [1845.

The public money should not be mingled with the private
funds of banks or individuals, or be used for private pur-
poses. When it is placed in banks for safe keeping, it is in
effect loaned to them without interest, and is loaned by them
upon interest to the borrowers from them. The public money
is converted into banking capital, and is used and loaned out
for the private profit of bank stockholders ; and when called
for (as was the case in 1837), it may be in the pockets of the
borrowers from the banks, instead of being in the public
treasury contemplated by the constitution. The framers of
the constitution could never have intended that the money
paid into the treasury should be thus converted to private
use, and placed beyond the control of the government.

Banks which hold the public money are often tempted, by
a desire to oain, to extend their loans, increase their circula-
tion, and thus stimulate, if not produce a spirit of speculation
and extravao-ance, which sooner or later must result in ruin
to thousands. If the public money be not permitted to be
thus used, but be kept in the treasury and paid out to the
public creditors in gold and silver, the temptation afforded by
its deposite with banks to an undue expansion of their busi-
ness, would be checked, while the amount of tlie constitu-
tional currency left in circulation would be enlarged, by its
employment in the public collections and disbursements, and
the banks themselves would, in consequence, be found in a
safer and sounder condition.

At present, State banks are employed as depositories, but
without adequate regulation of law, whereby the public mon
ey can be secured against the casualties and excesses, revul
sions, suspensions, and defalcations, to which, from over-issues
over-tradina:, an inordinate desire for frain, or other causes
they are constantly exposed. The Secretary of the Treasuiy
has in all cases, when it was practicable, taken collateral se-
curity for the amount which they hold, by the pledge of
stocks of the United States, or such of the States as were in


good credit. Some of the deposite banks have given this
description of security, and others have decHned to do so.

Entertaining the opinion that *' the separation of the moneys
of tlie government from banking institutions is indispensable
for the .siifflv of the funds of the government and the rights
of tlie people," I recommend to Congress that provision be
made by law for such separation, and that a constitutional
trea.sur}' be created for the safe-keeping of the public money.
Th«' <<»ii^titutlonal lre;Lsury recommended is designed as a se-
cup- drposiiorv for the public money, without any power to
make loans or discounts, or to issue any paper whatever as a
curnncv or circulation. 1 cannot doubt that such a treasury
jLs w;i:i contemplated by the constitution, should be independ-
ent of all banking corponilion.H. The money of the people
should l)e k«pt in the treasury of the people created by law,
lid be in the custody of agents of the people chosen by
t!n'ms«'lv«'s, according to the form of the constitution ; agents
who ari' directly ri^sponsible to the govenimenl, who are un-
der adrjjualf b«*nds an<l oaths, and who are subject to severe
puni^hments fur any embczzU-ment, private use, or misappli-
cation of the public funds, and for any failure in other respects
. pt-rform their duties. To say that the people of their gov-
innvnt are incumpetcnt, or not to be trusted with the cus-
dy of their own money, in their own treasury, provided by
iiiemselves, but must rely on the presidents, cashiers, and
stockholders of banking corj>onUions, not app<iinted by them,
nor responsible to them, would be to concede that they are
incompetent for s*'lf government.

In recomnunding the c»stablishment of a constitutional
treasury, in which the public money shall be kept, 1 desire
that adeijuate provision be made by law for its s;ifety, and
that all e.xecutive discreti<»n or control over it shall be remov-
ed, except such as may be necessiiry in directing its dis-
bursements in pursuance of appropriations made by law.
Under our present land sy>tem, limiting the mininunn j)rico

200 JAMES KNOX POLK. [1845.

at which the public lands can be entered to one dollar and
twenty-five cents per acre, large quantities of lands of inferior
quality remain unsold, because they Avill not command that
price. From the records of the General Land Office it ap-
pears, that, of the public lands remaining unsold in the seve-
ral states and territories in which they are situated, thirty-nine
millions one hundred and five thousand five hundred and sev-
enty-seven acres have been in the market, subject to entry,
more than twenty years ; forty-nine millions six hundred and
thirty-eight thousand six hundred and forty-four acres for
more than fifteen years ; seventy-three millions seventy-four
thousand and six hundred acres for more than ten years ; and
one hundred and six millions one hundred and seventy-six
thousand nine hundred and sixty-one acres for more than five
years. Much the largest portion of these lands will continue
to be unsaleable at the minimum price at which they are per-
mitted to be sold, so long as large territories of lands from
which the more valuable portions have not been selected are
annually brought into market by the government. With the
view to the sale and settlement of these inferior lands, I rec-
ommend that the price be graduated and reduced below the
present minimum rate, confining the sales at the reduced pri-
ces to settlers and cultivators in limited quantities. If grad-
uated and reduced in price for a limited terra to one dollar per
acre, and after the expiration of that period, for a second and
third term to lower rates , a large portion of these lands would
be purchased, and many worthy citizens, who are unable to pay
higher rates, could purchase homes for themselves and their
families. By adopting the policy of graduation and reduction
of price, these inferior lands will be sold for their real value,
while the states in which they lie will be freed from the in-
convenience, if not injustice to which they are subjected, in
consequence of the United States continuing to own large
quantities of public lands within their borders, not hable to
taxation for the support of their local governments.


I recommend the continuance of the policy of granting pre-
emptions, in its most hberal extent, to all those who have
settled, or may hereafter settle, on the public lands, whether
surveyed or unsurveyed, to which the Indian title may have
been extinguished at the time of settlement. It has been
found by experience, that in consequence of combinations of
purchasers and other causes, a very small quantity of the
public lands, when sold at public auction, commands a higher
price than the minimum rate estabhshed by law. The settlers
on the public lands are, however, but rarely able to secure
their homes and improvements at the public sales at that rate ;
because these combinations, by means of the capital they
command, and their superior ability to purchase, render it im-
possible for the settler to compete with them in the market.
By putting down all competition, these combinations of capi-
talists and speculators are usually enabled to purchase the
lands, including the improvements of the settlers, at the mini-
mum price of the govei-nment, and either turn them out of
their homes, or extort from them, according to their ability to
pay, double or quadruple the amount paid for them to the

Online LibraryJohn S. (John Stilwell) JenkinsThe life of James Knox Polk → online text (page 14 of 32)