Chapter LXXXIX: First Annual Message of President Tyler

This message coming in so soon after the termination of the extra session--only two months after it--was necessarily brief and meagre of topics, and presents but few points worthy of historical remembrance. The first subject mentioned was the acquittal of McLeod, which had taken place in the recess: and with which result the British government was content. The next subject was, the kindred matter of the Caroline; on which the President had nothing satisfactory to communicate, but expressed a high sense of the indignity which had been offered to the United States, and evinced a becoming spirit to obtain redress for it. He said:

"I regret that it is not in my power to make known to you an
equally satisfactory conclusion in the case of the Caroline
steamer, with the circumstances connected with the destruction
of which, in December, 1837, by an armed force fitted out in
the Province of Upper Canada, you are already made acquainted.
No such atonement as was due for the public wrong done to the
United Stares by this invasion of her territory, so wholly
irreconcilable with her rights as an independent power, has yet
been made. In the view taken by this government, the inquiry
whether the vessel was in the employment of those who were
prosecuting an unauthorized war against that Province, or was
engaged by the owner in the business of transporting passengers
to and from Navy Island in hopes of private gain, which was
most probably the case, in no degree alters the real question
at issue between the two governments. This government can
never concede to any foreign government the power, except in
a case of the most urgent and extreme necessity, of invading
its territory, either to arrest the persons or destroy the
property of those who may have violated the municipal laws of
such foreign government, or have disregarded their obligations
arising under the law of nations. The territory of the United
States must be regarded as sacredly secure against all such
invasions, until they shall voluntarily acknowledge their
inability to aquit themselves of their duties to others. And in
announcing this sentiment, I do but affirm a principle which
no nation on earth would be more ready to vindicate, at all
hazards, than the people and government of Great Britain."

The finances were in a bad condition, and the President chiefly referred to the report of the Secretary of the Treasury upon them. Of the loan of twelve millions authorized at the previous session, only five millions and a half had been taken--being the first instance, and the last in our financial history in which, in time of peace, our government was unable to borrow money. A deficiency existed in the revenues of the year, and for the ensuing year that deficiency was estimated, would amount to a fraction over fourteen millions of dollars. To meet this large deficit the secretary recommended--_first_, an extension of the term for the redeemability of the remainder of the authorized loan, amounting to $6,500,000. _Secondly_, the re-issue of the five millions of treasury notes authorized at the previous session. _Thirdly_, the remainder ($2,718,570) to be made up by additional duties on imported articles. While recommending these fourteen millions and a quarter to be raised by loans, treasury notes, and duties, the President recommended the land revenue should still remain as a fund for distribution to the States, and was solicitous that, in the imposition of new duties, care should be taken not to impair the mutual assurance for each other's life which the land distribution bill, and the compromise clause contained in the tariff bill of the extra session provided for each other--saying: "It might be esteemed desirable that no such augmentation of the duties should take place as would have the effect of annulling the land proceeds distribution act of the last session, which act it declared to be inoperative the moment the duties are increased beyond 20 per centum--the maximum rate established by the compromise act." This recommendation, so far as it applied to the compromise act, was homage to the dead; and so far as it related to continuing the distribution of the land revenue was, probably, the first instance in the annals of nations in which the chief magistrate of a country has recommended the diversion and gratuitous distribution of a large branch of its revenues, recommending at the same time, money to be raised by loans, taxes, and government notes to supply the place of that given away. The largeness of the deficiency was a point to be accounted for; and that was done by showing the great additional expenses to be incurred--and especially in the navy, for which the new secretary (Mr. Upshur) estimated enormously, and gave rise to much searching discussion in Congress: of which, in its place. But the chief item in the message was another modification of the fiscalities of the extra session, with a new name, and an old countenance upon it, except where it was altered for the worse. This new plan was thus introduced by the President:

"In pursuance of a pledge given to you in my last message to
Congress, which pledge I urge as an apology for adventuring
to present you the details of any plan, the Secretary of the
Treasury will be ready to submit to you, should you require
it, a plan of finance which, while it throws around the
public treasure reasonable guards for its protection, and
rests on powers acknowledged in practice to exist from the
origin of the government, will, at the same time, furnish to
the country a sound paper medium, and afford all reasonable
facilities for regulating the exchanges. When submitted, you
will perceive in it a plan amendatory of the existing laws
in relation to the Treasury department--subordinate in all
respects to the will of Congress directly, and the will of
the people indirectly--self-sustaining should it be found in
practice to realize its promises in theory, and repealable at
the pleasure of Congress. It proposes by effectual restraints,
and by invoking the true spirit of our institutions, to
separate the purse from the sword; or more properly to speak,
denies any other control to the President over the agents who
may be selected to carry it into execution, but what may be
indispensably necessary to secure the fidelity of such agents;
and, by wise regulations, keeps plainly apart from each other
private and public funds. It contemplates the establishment of
a Board of Control at the seat of government, with agencies
at prominent commercial points, or wherever else Congress
shall direct, for the safe-keeping and disbursement of the
public moneys, and a substitution, at the option of the public
creditor, of treasury notes, in lieu of gold and silver.
It proposes to limit the issues to an amount not to exceed
$15,000,000--without the express sanction of the legislative
power. It also authorizes the receipt of individual deposits
of gold and silver to a limited amount, and the granting
certificates of deposit, divided into such sums as may be
called for by the depositors. It proceeds a step further, and
authorizes the purchase and sale of domestic bills and drafts,
resting on a real and substantial basis, payable at sight, or
having but a short time to run, and drawn on places not less
than one hundred miles apart--which authority, except in so far
as may be necessary for government purposes exclusively, is only
to be exerted upon the express condition, that its exercise
shall not be prohibited by the State in which the agency is
situated."

This was the prominent feature of the message, and appeared to Mr. Benton to be so monstrous and dangerous that it ought not to be allowed to get out of the Senate without a mark of reprobation should be first set upon it. The moment the reading was finished, the usual resolve was offered to print extra copies, when he rose and inveighed against the new fiscality with great vehemence, saying:

"He could not reconcile it to himself to let the resolution pass
without making a few remarks on that part of the message which
related to the new fiscal agent. Looking at that feature of it,
as read, he perceived that the President gave an outline of his
plan, leaving it to the Secretary of the Treasury to furnish
the details in his report. He (Mr. BENTON) apprehended that
nothing in those details could reconcile him to the project, or
in any manner meet his approbation. There were two main points
presented in the plan, to which he never could agree--both being
wholly unconstitutional and dangerous. One was that of emitting
bills of credit, or issuing a treasury currency. Congress had
no constitutional authority to issue paper money, or emit
federal bills of credit; and the other feature is to authorize
this government to deal in exchanges. The proposition to issue
bills of credit, when under consideration at the formation
of the constitution, was struck out with the express view of
making this government a hard money government--not capable of
recognizing any other than a specie currency--a currency of gold
and silver--a currency known and valued, and equally understood
by every one. But here is a proposition to do what is expressly
refused to be allowed by the framers of the constitution--to
exercise a power not only not granted to Congress, but a power
expressly denied. The next proposition is to authorize the
federal government to deal in and regulate exchanges, and to
furnish exchange to merchants. This is a new invention--a modern
idea of the power of this government, invented by Mr. Biddle,
to help out a national bank. Much as General Hamilton was in
favor of paper money, he never went the length of recommending
government bills of credit, or dealings in exchange by the
United States Treasury. The fathers of the church, Macon, and
John Randolph, and others, called this a hard money government:
they objected to bank paper; but here is government paper; and
that goes beyond Hamilton, much as he was in favor of the paper
system. The whole scheme making this government a regulator of
exchange--a dealer in exchange--a furnisher of exchange--is
absurd, unconstitutional, and pernicious, and is a new thing
under the sun.

"Now he (Mr. BENTON) objected to this government becoming a
seller of exchange to the country (which is transportation of
money), for which there is no more authority than there is for
its furnishing transportation of goods or country produce. There
is not a word in the constitution to authorize it--not a word
to be found justifying the assumption. The word exchange is not
in the constitution. What does this message propose? Congress
is called upon to establish a board with agencies, for the
purpose of furnishing the country with exchanges. Why should
not Congress be also called on to furnish that portion of the
community engaged in commerce with facilities for transporting
merchandise? The proposition is one of the most pernicious
nature, and such as must lead to the most dangerous consequences
if adopted.

"The British debt began in the time of Sir Robert Walpole, on
issues of exchequer bills--by which system the British nation
has been cheated, and plunged irretrievably in debt to the
amount of nine hundred millions of pounds. The proposition that
the government should become the issuer of exchequer notes,
is one borrowed from the system introduced in England by Sir
Robert Walpole, whose whig administration was nothing but a high
tory administration of Queen Anne: and infinitely worse; for
Walpole's exchequer bills were for large sums, for investment:
this scheme goes down to five dollar notes for common and petty
circulation. He (Mr. BENTON) had much to say on this subject,
but this was not the time for entering at large into it. This
perhaps was not the proper occasion to say more; nor would it,
he considered, be treating the President of the United States
with proper respect to enter upon a premature discussion. He
could not, however, in justice to himself, allow this resolution
to pass without stating his objections to two such obnoxious
features of the proposed fiscality, looking, as he did, upon the
whole thing as one calculated to destroy the whole structure of
the government, to change it from the hard money it was intended
to be, to the paper money government it was intended not to
be, and to mix it up with trade, which no one ever dreamed
of. He (Mr. BENTON) had on another occasion stated that this
administration would go back not only to the federal times of
'98, but to the times of Sir Robert Walpole and Queen Anne, and
the evidence is now before us.

"He (Mr. BENTON) had only said a few words on this occasion,
because he could not let the proposition to sanction bills
of credit go without taking the very earliest opportunity
of expressing his disapprobation, and denouncing a system
calculated to produce the same results which had raised the
funded debt of Great Britain from twenty-one millions to nine
hundred millions of pounds. He should avail himself of the first
appropriate opportunity to maintain the ground he had assumed as
to the identity of this policy with that of Walpole, by argument
and references, that this plan of the President's was utterly
unconstitutional and dangerous--part borrowed from the system
of English exchequer issues, and part from Mr. Biddle's scheme
of making the federal government an exchange dealer--though Mr.
Biddle made the government act indirectly through a board of
bank directors, and this makes it act directly through a board
of treasury directors and their agents.

"This is the first time that a formal proposition has been
made to change our hard money government (as it was intended
to be) into a paper money machine; and it is the first time
that there has been a proposal to mix it up with trade and
commerce, by making it a furnisher of exchanges, a bank of
deposit, a furnisher of paper currency, and an imitator of
the old confederation in its continental bills and a copyist
of the English exchequer system. Being the first time these
unconstitutional and pernicious schemes were formally presented
to Congress, he felt it to be his duty to disclose his
opposition to them at once. He would soon speak more fully."

The President in his message referred to the accompanying report of the Secretary of the Treasury (Mr. Walter Forward), for the details of his plan; and in looking at these they were found to comprise all the features of a bank of circulation, a bank of deposit, and a bank of discount upon bills of exchange--all in the hands of the government, and they to become the collectors and keepers of the public moneys, and the furnishers of a national paper money currency, in sums adapted to common dealings, both to the people and the federal government. It was a revolting scheme, and fit for instant condemnation, but in great danger of being adopted from the present predominance of that party in all the departments of the government which was so greatly addicted to the paper system.