with the greatest zeal, should be expended in internal improvements. Gradually however the enthusiasm in favor of this opinion cooled down, and the arguments against it were urged with constantly increasing force. It was said: The new interpretation of the Constitution, by which Congress desires to regulate every thing pertaining to the general welfare, destroys the independence of the states. And even if we should be willing to grant it such a right, there is hardly any undertaking or improvement that is equally for the advantage of all the states, and to which all are equally bound to contribute. Let what belongs to the states be planned and executed by the states; the general government possesses for this purpose neither the right nor the requisite skill. During the last sessions of Congress, 103 pretended improvements were lightly adopted, and $12,600,000 granted for them. Of this sum four states received $7,060,000; and the rest complained with reason of the partial and unjust nature of the distribution.* Of these 103 undertakings, 3 were never begun, 1 was given up, 4 were postponed, 11 were perhaps completed, 61 were not completed, 20 were completed, and these cost only $409,000. Congress has since given up the system of internal improvements out of the surplus revenues; and has become convinced that it is an absurdity, to extract from the people more money than is needed, by means of high taxation conducted at a great expense, and then to distribute it among the several states. Better would it be to let it remain from the first in the pockets of individuals; and then ask, not how much shall we raise, but how little will suffice. The general government, says President Jackson, should not become a sharer in private undertakings, or take part in the construction of roads and canals, in the elections, &c., and thus acquire an influence injurious to the liberties of the people.t In this manner, says Calhoun, the government would be converted into a mere machine for collecting and distributing money, to the neglect of all the functions for which it was created.‡ The seasons of surplus were followed, from causes elsewhere explained,§ by seasons of deficiency; which furnished occasion for numerous censures respecting erroneous calculations, inefficient supervision, extensive frauds, superfluous printing of unnecessary papers and reports, injudicious and excessive granting of *Financial Report for 1838, p. 15. † Messages of 1830 and 1834. Trotter, Observations on the Finances, p. 10. Register, 1830, append. p. 184. Speeches, p. 449. For instance, in the chapters on Banks, Taxation, the Army, &c. annuities, &c. But notwithstanding all errors and defects, the government has only about 17 millions of advances and debts; it has raised in the last four years a revenue of 120 millions of dollars, and has not only covered the deficit, but possesses a cash surplus of seven millions of dollars. The expenses of government and costs of administration are, compared with other countries, uncommonly small; which is evident from the single fact that the president's salary is $25,000 per annum (about £5,000 sterling), while the queen dowager of England alone draws £100,000. The expenses of Congress amount to about $200,000. The vice-president receives $5,000 Eight judges, A minister plenipotentiary, A secretary of legation, 6,000 32,000 9,000 2,000, &c. It has been asserted (paradoxically it may appear, but not untruly) that, for the maintenance of free institutions in a republic, and to facilitate returns to order and moderation, it is salutary from time to time to have a deficit in the treasury. The abovementioned surplus certainly arose from excessive taxation based on false principles; and the distribution and expenditure of those moneys gave occasion for the exercise of improper influence, and produced factions and indirect corruption among individuals and even states. The general government can certainly never want means for meeting all really necessary expenditures; and by the adoption of wise and sound principles respecting currency, banking, and customs, the difficulties and mistakes that have formerly occurred will almost wholly vanish. If we now turn to the taxation of the several states, we see in the first place that they must lay taxes on no article that has been assigned to the general government. In other respects the amount of taxation is of course higher or lower, according as the possessions, wants, aims, and acquisitions of the people are greater or less. Neither praise nor blame can here be founded on figures separated from their context. The grand principle in the taxation of the single states, and the one most important in its consequences, is, that there shall be no land-tax, no excise, and no burthens on articles of food; on the contrary, by far the greatest portion of the disbursements are provided for by property and income taxes, so that the rich man pays his due proportion. If the democracy allows no system of taxation to be adopted that would press immoderately on the poor, neither has it unjustly attacked the rich by an increasing percentage of the property tax; so that all parties have reason to be content. The difficulties of a property tax, which are elsewhere often regarded as insurmountable, vanish for the most part in the United States; because the supervision, mode of raising it, appointment of collectors, &c. are thoroughly republican,-but above all, because the amount required and collected is very small.† This American system of taxation presents the most perfect. contrast to that adopted throughout nearly the whole of Europe.‡ Where bread, meat, beer, spirits, tea, coffee, wood, coals, in short all the necessaries of the lower classes, are heavily taxed, while the rich pay but little in proportion, those classes must grow poorer still; where, as in the United States, they are free from taxes, the people are vastly better off than in Europe. Societies for the purchase of sheeting and table-linen, for aiding poor laborers, for tending little children, for nursing lying-in women,-all these and similar means of relief are benevolent and philanthropical: still they will never root out the evil, but often aggravate it. They disturb the course of trade, awaken hopes that cannot be realized, encourage improvident marriages, and are but new editions with alterations of the old foundling-hospitals, &c. Neither is the end proposed by these charitable precautions any more likely to be accomplished by the wild, fantastic schemes of the St. Simonists, Fourierists, and Communists. As long as we in Europe retain standing armies, expensive governments that interfere with every thing, splendid courts, settlements, endowments, &c.-so long will it be impossible to introduce the American system of low taxes; and poverty, which is not to be exorcised with mere words, will continue frightfully to increase. The dark side of the bright picture we have been contemplating is exhibited in the indebtedness of the single states. As early as 1783, there arose on the conclusion of peace the weighty question, whether the general government should assume all the debts of the states incurred during the war. As it was feared on the one hand that too many obligations would thus be cast upon the government, and on the other that it would be allowed too *Calhoun's Speeches, p. 449. Where the requirements, as in Europe, are great, they can never be covered by property and income taxes alone. In Mexico the people are pressed down by a host of absurd taxes.-Mühlenpfordt, i. 394. much power and influence, only those debts were transferred to it which the states had incurred for the common welfare. Since that time the states and cities have paid off a great deal; but much more they have either borrowed, partly at high rates of interest, or issued in the form of state stocks: so that in the year 1840 the debts of nineteen states (the remainder* were free from debt) were estimated at 200 millions of dollars, exclusive of considerable debts on the part of single cities. It has been proposed, that the general government shall assume these state debts, create paper to their amount, bearing interest at four per centum payable out of the proceeds of the public lands, and distribute these new stocks among the states, in proportion to the number of senators and representatives. As the property tax cannot be increased, as no excise can be introduced, and as there is no specie currency for the payment of interest in foreign countries, it is asserted that this proposition offers the only true, practical means of escape from every difficulty. But notwithstanding these difficulties, the proposal has not been well received. It has been regarded as holding out a premium for imprudence, bad management, swindling and speculating at the cost both of the present generation and of posterity. The loud and bitter complaints which have been made, especially in Europe, respecting what is termed repudiation, demand a closer investigation. The Americans, it is said, have had the wicked audacity to repudiate, that is, to declare that they will not pay their debts, but defraud their creditors of all their just demands!-There is no doubt that many of the states in borrowing and expending large sums of money have acted with imprudence and want of judgment, that jealousy and selfishness have been allowed to interfere, that secondary considerations have been raised to undue importance, that undertakings have failed, &c.; but from all this it by no means follows that the states in general, with their constantly augmenting resources, are not in a condition to meet their engagements. If therefore by repudiation be meant a declaration, by the governments or the majority of voters, of a selfish or even fraudulent bankruptcy, this would be so utterly contrary to the sense of right and even the worldly prudence of the Americans, that we readily adopt the explanation, that this much talked of measure is neither more nor less than a temporary respite, such as under the pressure of circumstances has often been granted before. Moreover, national bankruptcy, the reduction of interest, the Viz. Connecticut, Rhode Island, Vermont, New Hampshire, New Jersey, Delaware, North Carolina, and Iowa. †Thus Albany had a debt of $360,000; Philadelphia, of about $1,000.000; Boston, $1,700,000; New York, as much as $13,000,000. These sums however are constantly changing.-American Almanac, 1841, p. 130; 1844, p. 229. depreciation of the value of paper issues, &c., have occurred so frequently in Europe, and have been so arbitrarily managed by the ruling powers, without allowing their creditors a voice in the matter or a legal remedy, that the Americans might justify similar measures by such examples-provided that injustice could thus be justified at all. Since of the debts of the American states 8 millions have been expended in roads, 42 millions in railways, 69 millions in canals, and 52 millions in bank undertakings,* it follows that there is an essential difference between the state debts of Europe and America. The former were mostly incurred on behalf of destructive wars, and can produce no further fruits; the American loans on the contrary were employed in peaceful enterprises, which in great part will be still more useful to posterity than to the present generation, and most of which will sooner or later pay the interest of the capital expended on them. It seems indeed to many Americans as impossible to impose extraordinary taxes upon themselves for the fulfilment of their obligations, as it does to many Europeans to reduce their standing armies for the same purpose; yet both are equally in the wrong, and do themselves the greatest injury. Hence it was said by the governor of Louisiana, Alexander Mouton: "It is manifest that we have raised ourselves again from the deplorable state of immorality and wretchedness into which the country was plunged by indolence, extravagance, the credit and paper system, and the mad speculations produced by imprudent legislation." At all events it is a proof of ignorance, folly, or blameable excitement, to stigmatize all the United States, or all the Americans without discrimination, as fraudulent bankrupts. Out of twenty-six states, seven have no debts at all, thirteen pay their interest regularly, and only six do not come up to their engagements. Of these Maryland,† Michigan, Illinois, and Arkansas commenced undertakings with their borrowed capital, which for the most part are still incomplete. They are now earnestly engaged in restoring their credit; in order with additional means to bring to a conclusion the works that remain unfinished, and from which till then no income can be derived. Pennsylvania,‡ who with proper exertions would doubtless have been able to pay, and who has therefore been the most violently attacked on the score of repudiation, has at length perceived that those who violate the rights of others always do the greatest injury to themselves; she has imposed a tax upon herself, will pay next year the current interest, and it is to be hoped will soon satisfy *American Almanac, 1840, p. 105. The debt of Maryland is stated to be about 11 millions of dollars. Pennsylvania has a debt of about 37 millions of dollars, of which 30 millions have been expended on canals and railroads. |