Chapter XCIX

DISTRESS OF THE TREASURY: THREE TARIFF BILLS, AND TWO VETOES: END OF THE COMPROMISE ACT.

Never were the coffers and the credit of the Treasury--not even in the last year of the war with Great Britain (1814)--at a lower ebb, or more pitiable point, than at present. A deficit of fourteen millions in the Treasury--a total inability to borrow, either at home or abroad, the amount of the loan of twelve millions authorized the year before--treasury-notes below par--a million and a half of protested demands--a revenue from imports inadequate and decreasing: such was the condition of the Treasury, and all the result of three measures forced upon the previous administration by the united power of the opposition, and the aid of temporizing friends, too prone to take alarm in transient difficulties, and too ready to join the schemes of the opposition for temporary relief, though more injurious than the evils they were intended to remedy. These three measures were: 1. Compromise act of 1833. 2. The distribution of surplus revenue in 1837. 3. The surrender of the land revenue to the States. The compromise act, by its slow and imperceptible reductions of revenue during its first seven years, created a large surplus: by its abrupt and precipitous falling off the last two, made a deficit. The distribution of this surplus, to the amount of near thirty millions, took away the sum which would have met this deficiency. And the surrender of the land revenue diverted from its course the second largest stream of revenue that came into the Treasury: and the effect of the whole was to leave it without money and without credit: and with a deficit which was ostentatiously styled, "_the debt of the late administration_." Personally considered, there was retributive justice in this calamitous visitation. So far as individuals were concerned it fell upon those who had created it. Mr. Tyler had been the zealous promoter of all these measures: the whig party, whose ranks he had joined, had been their author: some obliging democrats were the auxiliaries, without which they could not have been carried. The administration of President Tyler now needed the money: his former whig friends had the power to grant, or withhold it: and they chose, either to withhold, or to grant upon terms which Mr. Tyler repulsed. They gave him two tariff revenue bills in a month, which he returned with vetoes, and had to look chiefly to that democracy whom he had left to join the whigs (and of whom he had become the zealous opponent), for the means of keeping his administration alive.

A bill called a "_provisional tariff_" was first sent to him: he returned it with the objections which made it impossible for him to approve it: and of which these objections were the chief:

"It suspends, in other words, abrogates for the time, the
provision of the act of 1833, commonly called the 'compromise
act.' The only ground on which this departure from the solemn
adjustment of a great and agitating question seems to have
been regarded as expedient is, the alleged necessity of
establishing, by legislative enactments, rules and regulations
for assessing the duties to be levied on imports, after the
30th June, according to the home valuation; and yet the bill
expressly provides that 'if before the 1st of August there be no
further legislation upon the subject, the laws for laying and
collecting duties shall be the same as though this act had not
been passed.' In other words, that the act of 1833, imperfect as
it is considered, shall in that case continue to be, and to be
executed under such rules and regulations as previous statutes
had prescribed, or had enabled the executive department to
prescribe for that purpose, leaving the supposed chasm in the
revenue laws just as it was before.

"The bill assumes that a distribution of the proceeds of the
public lands is, by existing laws, to be made on the first day
of July, 1842, notwithstanding there has been an imposition of
duties on imports exceeding twenty per cent. up to that day,
and directs it to be made on the 1st of August next. It seems
to me very clear that this conclusion is equally erroneous and
dangerous; as it would divert from the Treasury a fund sacredly
pledged for the general purposes of the government, in the event
of a rate of duty above twenty per cent. being found necessary
for an economical administration of the government. The act of
September last, which provides for the distribution, couples it
inseparably with the condition that it shall cease--first, in
case of war; second, as soon and so long as the rate of duties
shall, for any reason whatever, be raised above twenty per cent.
Nothing can be more clear, express, or imperative, than this
language. It is in vain to allege that a deficit in the Treasury
was known to exist, and that means were taken to supply this
deficit by loan when the act was passed."

These reasons show the vice and folly of the acts which a pride of consistency still made him adhere to. That compromise act of 1833 assumed to fix the tariff to eternity, _first_, by making existing duties decline through nine years to a uniform ad valorem of twenty per centum on all dutied articles; _next_, by fixing it there for ever, giving Congress leave to work under it on articles then free; but never to go above it: and the mutual assurance entered into between this act and the land distribution act of the extra session, was intended to make sure of both objects--the perpetual twenty per centum, and the land distribution. One hardly knows which to admire most, the arrogance, or the folly, of such presumptuous legislation: and to add to its complication there was a clear division of opinion whether any duty at all, for want of a law appointing appraisers, could be collected after the 30th of June. Between the impracticability, and the unintelligibility of the acts, and his consistency, he having sanctioned all these complicated and dependent measures, it was clear that Mr. Tyler's administration was in a deplorable condition. The low credit of the government, in the impossibility of getting a small loan, was thus depicted:

"Who at the time foresaw or imagined the possibility of the
present real state of things, when a nation that has paid off
her whole debt since the last peace, while all the other great
powers have been increasing theirs, and whose resources already
so great, are yet but in the infancy of their development,
should be compelled to haggle in the money market for a paltry
sum, not equal to one year's revenue upon her economical system."

Not able to borrow, even in time of peace, a few millions for three years! This was in the the time of paper money. Since gold became the federal currency, any amount, and in time of war, has been at the call of the government; and its credit so high, and its stock so much above par, that twenty per centum premium is now paid for the privilege of paying, before they are due, the amounts borrowed during the Mexican war:

"This connection (the mutual assurance between the compromise
act and the land distribution) thus meant to be inseparable,
is severed by the bill presented to me. The bill violates
the principle of the acts of 1833, and September, 1841, by
suspending the first, and rendering, for a time, the last
inoperative. Duties above twenty per cent. are proposed to
be levied, and yet the _proviso_ in the distribution act is
disregarded. The proceeds of the sales are to be distributed
on the 1st of August; so that, while the duties proposed
to be enacted exceed twenty per cent. no suspension of the
distribution to the States is permitted to take place. To
abandon the principle for a month is to open the way for its
total abandonment. If such is not meant, why postpone at
all? Why not let the distribution take place on the 1st of
July, if the law so directs? (which, however, is regarded as
questionable.) But why not have limited the provision to that
effect? Is it for the accommodation of the Treasury? I see no
reason to believe that the Treasury will be in better condition
to meet the payment on the 1st of August, than on the 1st of
July."

Here Mr. Tyler was right in endeavoring to get back, even temporarily, the land revenue; but slight as was this relaxation of their policy, it brought upon him keen reproaches from his old friends. Mr. Fillmore said:

"On what principle was this veto based? The President could not
consent that the distribution of the proceeds of the public
lands should cease for a single day. Now, although that was the
profession, yet it appeared to have been but a pretence. Mr. F.
wished to speak with all respect to the chief magistrate, but of
his message he must speak with plainness. What was the law which
that message vetoed? It authorized the collection of duties
for a single month as they were levied on the first of January
last, to allow time for the consideration of a permanent revenue
for the country; it postponed the distribution of the proceeds
of the public lands till the month should expire, and Congress
could provide the necessary supplies for the exhausted Treasury.
But what would be the effect of the veto now on the table? Did
it prevent the distribution? By no means; it reduced the duties,
in effect, to twenty per cent., and authorized the distribution
of the land fund among the States; and that distribution would,
in fact, take place the day after to-morrow. That would be the
practical operation of this paper. When Congress had postponed
the distribution for a month, did it not appear like pretence
in the chief magistrate to say that he was forced to veto the
bill from Congress, to prevent the distribution, which his
veto, and that alone, would cause to take place? Congress had
been willing to prevent the distribution, but the President, by
one and the same blow, cut down the revenue at a moment when
his Secretary could scarce obtain a loan on any terms, and in
addition to this distributed the income from the public domain!
In two days the distribution must take place. Mr. F. said he
was not at all surprised at the joy with which the veto had
been hailed on the other side of the house, or at the joyful
countenances which were arrayed there; probably this act was
but the consummation of a treaty which had been long understood
as in process of negotiation. If this was the ratification of
such treaty, Mr. F. gave gentlemen much joy on the happy event.
He should shed no tears that the administration had passed into
its appropriate place. This, however, was a matter he should
not discuss now; he should desire the message might be laid on
the table till to-morrow and be printed. Mr. F. said he was
free to confess that we were now in a crisis which would shake
this Union to its centre. Time would determine who would yield
and who was right; whether the President would or would not
allow the representatives of the people to provide a revenue in
the way they might think best for the country, provided they
were guilty of no violation of the constitution. The President
had now told them, in substance, that he had taken the power
into his own hands; and although the highest financial officer
of the government declared it as his opinion, that it was
doubtful whether the duties could be collected which Congress
had provided by law, the President told the House that any
further law was unnecessary; that he had power enough in his own
hands, and he should use it; that he had authorized the revenue
officers to do all that was necessary. This then would be in
fact the question before the country: whether Congress should
legislate for the people of this country or the Executive?"

Mr. Alexander H. H. Stuart, of Virginia, took issue with the President on the character of the land distribution bill, and averred it to have been an intended part of the compromise from the beginning. He said:

"That the President has rested his veto upon the grounds
of expediency alone, and not upon any conscientious or
constitutional scruples. He withholds his assent because of
its supposed conflict with the compromise act of 1833. I take
issue with the President in regard to this matter of fact,
and maintain that there is no such conflict. The President's
particular point of objection to the temporary tariff bill is
that it contemplates a prospective distribution of the land
proceeds. Now, conceding that the President has put a correct
construction on our bill, I aver that it is no violation of the
compromise act to withdraw the land proceeds from the ordinary
purposes of the government, and distribute them among the
States. On the contrary, I maintain that that act distinctly
contemplates the distribution of the land proceeds, that the
_distribution was one of the essential elements of the
compromise_, and that the _failure to distribute_ the land fund
now _would of itself be a violation of the_ true understanding
of those who adopted the _compromise_, and a palpable fraud upon
the rights of one of the parties to it."

Mr. Caruthers, of Tennessee, was still more pointed to the same effect, referring to Mr. Tyler's conduct in the Virginia General Assembly to show that he was in favor of the land revenue distribution, and considered its cessation as a breach of the compromise. He referred to his,

"Oft-quoted resolutions in the legislature of Virginia, in
1839, urging the distribution, and conveying the whole proceeds
of the lands, not only ceded but acquired by purchase and by
treaty. Mr. C. also referred to the adroit manner in which Mr.
Tyler had at that time met the charge of his opponents (that he
desired to violate the compromise act) by the introduction of
the well known proviso, that the General Assembly did not mean
to infringe or disturb the provisions of the compromise act."

The vote was taken upon the returned bill, as required by the constitution; and falling far short of the required two-thirds, it was rejected. But the exigencies of the Treasury were so great that a further effort to pass a revenue bill was indispensable; and one was accordingly immediately introduced into the House. It differed but little from the first one, and nothing on the land revenue distribution clause, which it retained in full. That clause had been the main cause of the first veto: it was a challenge for a second! and under circumstances which carried embarrassment to the President either way. He had been from the beginning of the policy, a supporter of the distribution; and at the extra session had solemnly recommended it in his regular message. On the other hand, he had just disapproved it in his message returning the tariff bill. He adhered to this latter view; and said:

"On the subject of distributing the proceeds of the sales of
the public lands, in the existing state of the finances, it has
been my duty to make known my settled convictions on various
occasions during the present session of Congress. At the opening
of the extra session, upwards of twelve mouths ago, sharing
fully in the general hope of returning prosperity and credit,
I recommended such a distribution; but that recommendation was
even then expressly coupled with the condition that the duties
on imports should not exceed the rate of twenty per cent,
provided by the compromise act of 1833. The bill which is now
before me proposes, in its 27th section, the total repeal of one
of the provisos in the act of September; and, while it increases
the duties above twenty per cent., directs an unconditional
distribution of the land proceeds. I am therefore subjected a
second time, in the period of a few days, to the necessity of
either giving my approval to a measure which, in my deliberate
judgment, is in conflict with great public interests; or of
returning it to the House in which it originated, with my
objections. With all my anxiety for the passage of a law which
would replenish an exhausted Treasury, and furnish a sound and
healthy encouragement to mechanical industry, I cannot consent
to do so at the sacrifice of the peace and harmony of the
country, and the clearest convictions of public duty."

The reasons were good, and ought to have prevented Congress from retaining the clause; but party spirit was predominant, and in each House the motion to strike out the clause had been determined by a strict party vote. An unusual course was taken with this second veto message: it was referred to a select committee of thirteen members, on the motion of Mr. Adams; and from that committee emanated three reports upon it--one against it, and two for it; the committee dividing politically in making them. The report against it was signed by ten members; the other two by the remaining three members; but they divided, so as to present two signatures to one report, and a single one to the other. Mr. Adams, as the chairman, was the writer of the majority report, and made out a strong case against Mr. Tyler personally, but no case at all in favor of the distribution clause. The report said:

"Who could imagine that, after this most emphatic _coupling_
of the revenue from duties of impost, with revenue from the
proceeds of the sales of the public lands, the first and
paramount objection of the President to this bill should be,
that it unites two subjects which, so far from having any
affinity to one another, are wholly incongruous in their
character; which two subjects are identically the same with
those which _he_ had coupled together in his recommendation
to Congress at the extra session? If there was no affinity
between the parties, why did he join them together? If the
union was illegitimate, who was the administering priest of
the unhallowed rites? It is objected to this bill, that it is
both a revenue and an appropriation bill? What then? Is not the
act of September 4, 1841, approved and signed by the President
himself, both a revenue and an appropriation bill? Does it not
enact that, in the event of an insufficiency of impost duties,
not exceeding twenty per centum ad valorem, to defray the
current expenses of the government, the proceeds of the sales
of the lands shall be levied as part of the same revenue, and
appropriated to the same purposes?"

The report concluded with a strong denunciation of, what it considered, an abuse of the veto power, and a contradiction of the President's official recommendation and conduct:

"The power of the present Congress to enact laws essential to
the welfare of the people has been struck with apoplexy by the
Executive hand. Submission to his will, is the only condition
upon which he will permit them to act. For the enactment of
a measure earnestly recommended by himself, he forbids their
action, unless _coupled_ with a _condition_ declared by himself
to be on a subject so totally different, that he will not
suffer them to be coupled in the same law. With that condition,
Congress cannot comply. In this state of things, he has assumed,
as the committee fully believe, the exercise of the whole
legislative power to himself, and is levying millions of money
upon the people, without any authority of law. But the final
decision of this question depends neither upon legislative
nor executive, but upon judicial authority; nor can the final
decision of the Supreme Court upon it be pronounced before the
close of the present Congress."

The returned bill being put to the vote, was found to lack as much as the first of the two-thirds majority, and was rejected. But revenue was indispensable. Daily demands upon the government were undergoing protest. The President in his last message had given in $1,400,000 of such dishonored demands. The existing revenue from imports, deficient as it was, was subjected to a new embarrassment, that of questioned legality for want of a law of appraisement under the compromise, and merchants paid their duties under protest, and with notices of action against the collector to recover them back. It was now near the end of August. Congress had been in session nine months--an unprecedentedly long session, and that following immediately on the heels of an extra session of three months and a half. Adjournment could not be deferred, and could not take place without providing for the Treasury. The compromise and the land distribution were the stumbling-blocks: it was determined to sacrifice them together, but without seeming to do so. A contrivance was fallen upon: duties were raised above twenty per centum: and that breach of the mutual assurance in relation to the compromise, immediately in terms of the assurance, suspended the land revenue distribution--to continue it suspended while duties above the compromise limit continued to be levied. And as that has been the case ever since, the distribution of the revenue has been suspended ever since. Such were the contrivances, ridiculous inventions, and absurd circumlocutions which Congress had recourse to to get rid of that land distribution which was to gain popularity for its authors; and to get rid of that compromise which was celebrated at the time as having saved the Union, and the breach of which was deprecated in numerous legislative resolves as the end of the Union, and which all the while was nothing but an arrogant piece of monstrosity, patched up between two aspiring politicians, to get rid of a stumbling-block in each other's paths for the period of two presidential elections. In other respects one of the worst features of that personal and pestiferous legislation has remained--the universal ad valorems--involving its army of appraisers, their diversity of appraisement from all the imperfections to which the human mind is subject--to say nothing of the chances for ignorance, indifference, negligence, favoritism, bribery and corruption. The act was approved the 30th day of August; and Congress forthwith adjourned.