Chapter XLIV

ASSUMPTION OF THE STATE DEBTS: MR. BENTON'S SPEECH: EXTRACTS.

The assumption of the State debts contracted for State purposes has been for a long time a measure disguisedly, and now is a measure openly, pressed upon the public mind. The movement in favor of it has been long going on; opposing measures have not yet commenced. The assumption party have the start, and the advantage of conducting the case; and they have been conducting it for a long time, and in a way to avoid the name of assumption while accomplishing the thing itself. All the bills for distributing the public land revenue--all the propositions for dividing surplus revenue--all the refusals to abolish unnecessary taxes--all the refusals to go on with the necessary defences of the country--were so many steps taken in the road to assumption. I know very well that many who supported these measures had no idea of assumption, and would oppose it as soon as discovered; but that does not alter the nature of the measures they supported, and which were so many steps in the road to that assumption, then shrouded in mystery and futurity, now ripened into strength, and emboldened into a public disclosure of itself. Already the State legislatures are occupied with this subject, while we sit here, waiting its approach.

It is time for the enemies of assumption to take the field, and to act. It is a case in which they should give, and not receive, the attack. The President has led the way; he has shown his opinions. He has nobly done his duty. He has shown the evils of diverting the general funds from their proper objects--the mischiefs of our present connection with the paper system of England--and the dangers of foreign influence from any further connection with it. In this he has discharged a constitutional and a patriotic duty. Let the constituted authorities, each in their sphere, follow his example, and declare their opinions also. Let the Senate especially, as part of the legislative power--as the peculiar representative of the States in their sovereign capacity--let this body declare its sentiments, and, by its resolves and discussions, arrest the progress of the measure here, and awaken attention to it elsewhere. As one of the earliest opposers of this measure--as, in fact, the very earliest opposer of the whole family of measures of which it is the natural offspring--as having denounced the assumption in disguise in a letter to my constituents long before the London Bankers' letter revealed it to the public: as such early, steadfast, and first denouncer of this measure, I now come forward to oppose it in form, and to submit the resolves which may arrest it here, and carry its discussion to the forum of the people.

I come at once to the point, and say that disguised assumption, in the shape of land revenue distribution, is the form in which we shall have to meet the danger; and I meet it at once in that disguise. I say there is no authority in the constitution to raise money from any branch of the revenue for distribution among the States, or to distribute that which had been raised for other purposes. The power of Congress to raise money is not unlimited and arbitrary, but restricted, and directed to the national objects named in the constitution. The means, the amount, and the application, are all limited. The means are direct taxes--duties on imports--and the public lands; the objects are the support of the government--the common defence--and the payment of the debts of the Union: the amount to be raised is of course limited to the amount required for the accomplishment of these objects. Consonant to the words and the spirit of the constitution, is the title, the preamble and the tenor of all the early statutes for raising money; they all declare the object for which the money is wanted; they declare the object at the head of the act. Whether it be a loan, a direct tax, or a duty on imports, the object of the loan, the tax, or the duty, is stated in the preamble to the act; Congress thus excusing and justifying themselves for the demand in the very act of making it, and telling the people plainly what they wanted with the money. This was the way in all the early statutes; the books are full of examples; and it was only after money began to be levied for objects not known to the constitution, that this laudable and ancient practice was dropped. Among the enumerated objects for which money can be raised by Congress, is that of paying the debts of the Union; and is it not a manifest absurdity to suppose that, while it requires an express grant of power to enable us to pay the debts of the Union, we can pay those of the States by implication and by indirection? No, sir, no. There is no constitutional way to assume these State debts, or to pay them, or to indorse them, or to smuggle the money to the States for that purpose, under the pretext of dividing land revenue, or surplus revenue, among them. There is no way to do it. The whole thing is constitutionally impossible. It was never thought of by the framers of our constitution. They never dreamed of such a thing. There is not a word in their work to warrant it, and the whole idea of it is utterly repugnant and offensive to the objects and purposes for which the federal Union was framed.

We have had one assumption in our country and that in a case which was small in amount, and free from the impediment of a constitutional objection; but which was attended by such evils as should deter posterity from imitating the example. It was in the first year of the federal government; and although the assumed debts were only twenty millions, and were alleged to have been contracted for general purposes, yet the assumption was attended by circumstances of intrigue and corruption, which led to the most violent dissension in Congress, suspended the business of the two Houses, drove some of the States to the verge of secession, and menaced the Union with instant dissolution. Mr. Jefferson, who was a witness of the scene, and who was overpowered by General Hamilton, and by the actual dangers of the country, into its temporary support, thus describes it:

"This game was over (funding the soldiers' certificates), and
another was on the carpet at the moment of my arrival; and to
this I was most ignorantly and innocently made to hold the
candle. This fiscal manoeuvre is well known by the name of
the assumption. Independently of the debts of Congress, the
States had, during the war, contracted separate and heavy debts,
&c. * * * * This money, whether wisely or foolishly spent,
was pretended to have been spent for _general_ purposes, and
ought therefore to be paid from the _general_ purse. But it was
objected, that nobody knew what these debts were, what their
amount, or what their proofs. No matter; we will guess them to
be twenty millions. But of these twenty millions, we do not
know how much should be reimbursed to one State or how much
to another. No matter; we will guess. And so another scramble
was set on foot among the several States, and some got much,
some little, some nothing. * * * * This measure produced the
most bitter and angry contests ever known in Congress, before
or since the union of the States. * * * * The great and trying
question, however, was lost in the House of Representatives.
So high were the feuds excited by this subject, that on its
rejection business was suspended. Congress met and adjourned,
from day to day, without doing any thing, the parties being
too much out of temper to do business together. The Eastern
members particularly, who, with Smith from South Carolina,
were the principal gamblers in these scenes, threatened a
secession and dissolution. * * * * But it was finally agreed
that whatever importance had been attached to the rejection of
this proposition, the preservation of the Union, and of concord
among the States, was more important; and that, therefore, it
would be better that the vote of rejection should be rescinded;
to effect which, some members should change their votes. But
it was observed that this pill would be peculiarly bitter to
the Southern States, and that some concomitant measure should
be adopted to sweeten it a little to them. There had before
been propositions to fix the seat of government either at
Philadelphia, or at Georgetown, on the Potomac; and it was
thought that, by giving it to Philadelphia for ten years, and to
Georgetown permanently afterwards, this might, as an anodyne,
calm in some degree the ferment which might be excited by the
other measure alone. So two of the Potomac members (White and
Lee, but White with a revulsion of stomach almost convulsive)
agreed to change their votes, and Hamilton undertook to carry
the other point; and so the assumption was passed, and twenty
millions of stock divided among the favored States, and thrown
in as a pabulum to the stock-jobbing herd. * * * Still the
machine was not complete; the effect of the funding system and
of the assumption would be temporary; it would be lost with the
loss of the individual members whom it had enriched; and some
engine of influence more permanent must be contrived while these
myrmidons were yet in place to carry it through. This engine was
the Bank of the United States."

What a picture is here presented! Debts assumed in the mass, without knowing what they were in the gross, or what in detail--Congress in a state of disorganization, and all business suspended for many days--secession and disunion openly menaced--compromise of interests--intrigue--buying and selling of votes--conjunction of parties to pass two measures together, neither of which could be passed separately--speculators infesting the halls of legislation, and openly struggling for their spoil--the funding system a second time sanctioned and fastened upon the country--jobbers and gamblers in stocks enriched--twenty millions of additional national debt created--and the establishment of a national bank insured. Such were the evils attending a small assumption of twenty millions of dollars, and that in a case where there was no constitutional impediment to be evaded or surmounted. For in that case the debts assumed had been incurred for the general good--for the general defence during the revolution: in this case they have been incurred for the local benefit of particular States. Half the States have incurred none; and are they to be taxed to pay the debts of the rest?

These stocks are now greatly depreciated. Many of the present holders bought them upon speculation, to take the chance of the rise. A diversion of the national domain to their payment would immediately raise them far above par--would be a present of fifty or sixty cents on the dollar, and of fifty or sixty millions in the gross--to the foreign holders, and, virtually, a present of so much public land to them. It is in vain for the bill to say that the proceeds of the lands are to be divided among the States. The indebted States will deliver their portion to their creditors; they will send it to Europe, they will be nothing but the receivers-general and the sub-treasurers of the bankers and stockjobbers of London, Paris, and of Amsterdam. The proceeds of the sales of the lands will go to them. The hard money, wrung from the hard hand of the western cultivator, will go to these foreigners; and the whole influence of these foreigners will be immediately directed to the enhancement of the price of our public lands, and to the prevention of the passage of all the laws which go to graduate their price, or to grant pre-emptive rights to the settlers.

What more unwise and more unjust than to contract debts on long time, as some of the States have done, thereby invading the rights and mortgaging the resources of posterity, and loading unborn generations with debts not their own? What more unwise than all this, which several of the States have done, and which the effort now is to make all do? Besides the ultimate burden in the shape of final payment, which is intended to fall upon posterity, the present burden is incessant in the shape of annual interest, and falling upon each generation, equals the principal in every periodical return of ten or a dozen years. Few have calculated the devouring effect of annual interest on public debts, and considered how soon it exceeds the principal. Who supposes that we have paid near three hundred millions of interest on our late national debt, the principal of which never rose higher than one hundred and twenty-seven millions, and remained but a year or two at that? Who supposes this? Yet it is a fact that we have paid four hundred and thirty-one millions for principal and interest of that debt; so that near three hundred millions, or near double the maximum amount of the debt itself, must have been paid in interest alone; and this at a moderate interest varying from three to six per cent. and payable at home. The British national debt owes its existence entirely to this policy. It was but a trifle in the beginning of the last century, and might have been easily paid during the reigns of the first and second George; but the policy was to fund it, that is to say, to pay the interest annually, and send down the principal to posterity; and the fruit of that policy is now seen in a debt of four thousand five hundred millions of dollars, two hundred and fifty millions of annual taxes, with some millions of people without bread; while an army, a navy, and a police, sufficient to fight all Europe, is kept under pay, to hold in check and subordination the oppressed and plundered ranks of their own population. And this is the example which the transferrers of the State debt would have us to imitate, and this the end to which they would bring us!

I do not dilate upon the evils of a foreign influence. They are written upon the historical page of every free government, from the most ancient to the most modern: they are among those most deeply dreaded, and most sedulously guarded against by the founders of the American Union. The constitution itself contains a special canon directed against them. To prevent the possibility of this foreign influence, every species of foreign connection, dependence, or employment, is constitutionally forbid to the whole list of our public functionaries. The inhibition is express and fundamental, that "_no person holding any office of profit or trust under the United States shall, without the consent of Congress, accept of any present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign State_." All this was to prevent any foreign potentate from acquiring partisans or influence in our government--to prevent our own citizens from being seduced into the interests of foreign powers. Yet, to what purpose all these constitutional provisions against petty sovereignties, if we are to invite the moneyed power which is able to subsidize kings, princes, and potentates--if we are to invite this new and master power into the bosom of our councils, give it an interest in controlling public opinion, in directing federal and State legislation, and in filling our cities and seats of government with its insinuating agents, and its munificent and lavish representatives? To what purpose all this wise precaution against the possibility of influence from the most inconsiderable German or Italian prince, if we are to invite the combined bankers of England, France, and Holland, to take a position in our legislative halls, and by a simple enactment of a few words, to convert their hundreds of millions into a thousand millions, and to take a lease of the labor and property of our citizens for generations to come? The largest moneyed operation which we ever had with any foreign power, was that of the purchase of Louisiana from the Great Emperor. That was an affair of fifteen millions. It was insignificant and contemptible, compared to the hundreds of millions for which these bankers are now upon us. And are we, while guarded by the constitution against influence from an emperor and fifteen millions, to throw ourselves open to the machinations of bankers, with their hundreds of millions?