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and economical legislation, however, enabled the Government to pay the entire amount within a period of twenty years, and the extinguishment of the national debt filled the land with rejoicing, and was one of the great events of President Jackson's administration. After its redemption a large fund remained in the Treasury, which was deposited for safe keeping with the several States, on condition that it should be returned when required by the public wants. In 1849—the year after the termination of an expensive war with Mexico–we found ourselves involved in a debt of $64,000,000; and this was the amount owed by the Government in 1860, just prior to the outbreak of the rebellion. In the spring of 1861 our civil war commenced. Each year of its continuance made an enormous addition to the debt; and when, in 1he spring of 1365, the nation successfully emerged from the conflict, the obligations of the Government had reached the immense sum of $2873.992 909. The Secretary of the Treasury shows that on the 1st day of November, 1867, this amount had been reduced to $2,491,504,450; but at the same time his report exhibits an increase during the past year of $35,625,102; for the debt on the 1st day of November last is stated to have been $2,527,129,552. It is estimated by the Secretary that the returns for the past month will add to our liabilities the further sum of $11,000,000—making a total increase during thirteen months of $16 500,000. In my message to Congress of December 4, 1865, it was suggested that a policy should be devised, which, without being oppressive to the people, would at once begin to effect a reduction of the debt, and if persisted in discharge it fully within a definite number of years. The Secretary of the Treasury forcibly recommends legislation of this character, and justly urges that the longer it is deferred the more difficult must become its accomplishment. We should follow the wise precedents established in 1789 and 1816, and without further delay make provision for the payment of our obligations at as early a period as may be practicable The fruits of their labor should be enjoyed by our citizens, rather than used to build up and sustain moneyed monopolies in our own and other lands. Our foreign debt is already computed by the Secretary of the Treasury at $350,000,000; citizens of foreign countries receive interest upon a large portion of our securities, and American taxpayers are made to contribute large sums for their support. The idea that such a debt is to become permanent should be at all times discarded, as involving taxation too heavy to be borne and payment once in every sixteen years at the present rate of interest of an amount equal to the original sum. This vast debt if permitted to become permanent and increasing, must event: ually be gathered into the hands of a few, and enable them to exert a dangerous and control. ling power in the affairs of the Government. The borrowers would become servants to the lenders —the lenders the masters of the people. We now pride ourselves upon having given freedom to four millions of the colored race; it will then be our shame that forty million people, by their own toleration of usurpation and profligacy,

have suffered themselves to become enslaved, and merely exchanged slave-owners for new taskmasters in the shape of bond-holders and taxgatherers. Besides, permanent debts pertain to monarchical governments, and tending to monopolies, perpetuities, and class legislation, are totally irreconcilable with free institutions. Introduced into our republican system, they would gradually but surely sap its foundations, eventually subvert our governmental fabric, and erect upon its ruins a moneyed aristocracy. It is our sacred duty to transmit unimpaired to our posterity the blessings of liberty which were bequeathed to us by the founders of the Republic, and by our example teach those who are to follow us carefully to avoid the dangers which threaten a free and independent people. Various plans have been proposed for the payment of the public debt. However, they may have varied as to the time and mode in which it should be redeemed, there seems to be a general concurrence as to the propriety and justness of a reduction in the present rate of interest. The Secretary of the Treasury, in his report recommends five per cent. , Congress, in a bill passed prior to adjournment, on the 27th of July last, agreed upon four and four and a half per cent.; while by many three per cent. has been held to be an amply sufficient return for the investment. The general impression as to the exorbitancy of the existing rate of interest has led to an inquiry in the public mind respecting the consideration which the Government has actually received for its bonds, and the conclusion is becoming prevalent that the amount which it obtained was in real money three or four hundred per cent, less than the obligations which it issued in return. It cannot be denied that we are paying an extravagant percentage for the use of the money borrowed which was paper currency, greatly depreciated below the value of coin. This fact is made apparent, when we consider that bondholders receive from the Treasury, upon each dollar they own in Government securities, six per cent. in gold, which is nearly or quite equal to nine per cent. in currency; that the bonds are then converted into capital for the national banks, upon which those institutions issue their circulation, bearing six per cent. interest; and that they are exempt from taxation by the Government and the States, and thereby enhanced two p r cent. in the hands of the holders We have thus an aggregate of seventeen per cent. which may be received upon each dollar by the owners of Government securities. A system that produces such results is justly regarded as favoring a few at the expense of the many. and has led to the further inquiry, whether our bondholders, in view of the large profits which they have enjoyed, would themselves be averse to a settlement of our indebtedness upon a plan which would yield them a fair remuneration, and at the same time be just to the tax-payers of the nation. Our national credit should be sacredly observed; but in making provision for our creditors we should not forget what is due to the masses of the people. lt may be assumed that the holders of our securities have already received upon their bonds a larger amount than their original investment, measured by a gold standard. Upon this statement of facts it would seem but just and equita ble that the six per cent interest now paid by the Government should be applied to the reduction of the principal in semi-annual installments, which in sixteen years and eight months would liquidate the entire national debt. Six per cent. in gold would at present rates be equal to nine per cent. in currency, and equivalent to the payment of the debt one and a half time in a fraction less than seventeen years. This, in connection with all the other advantages derived from their investment, would afford to the public creditors a fair and liberal compensation for the use of their capital, and with this they should be satis. fied. The lessons of the past admonish the lender that it is not well to be over anxious in exacting from the borrower rigid compliance with the letter of the bond.* It provision be made for the payment of the indebtedness of the Government in the manner suggested, our nation will rapidly recover its wonted prosperity. . Its interests require that some measure should be taken to release the large amount of capital invested in the securities of the Government. It is not now merely unroductive, but in taxation annually consumes £ which would otherwise be used b our enterprising people in adding to the w'. of the nation. Our commerce, which at one time successfully rivaled that of the great maritime Powers, has rapidly diminished, and our industrial interests are in a depressed and languishing condition. The development of our inexhausti. ble resources is checked, and the fertile fields of the South are becoming waste for want of means to till them. With the release of capital, new life would be infused into the paralyzed energies of our people, and activity and vigor imparted to every branch of industry. Our people need encouragement in their efforts to recover from the effects of the rebellion and of injudicious legislation; and it should be the aim of the Gov. ernment to stimulate them by the prospect of an early release from the burdens which impede their prosperity. If we cannot take the burdens' from their shoulders, we should at least manifest a willingness to help to bear them. In referring to the condition of the circulating medium, I shall merely reiterate, substantially, that portion of my last annual message which relates to that subject. The proportion which the currency of any country should bear to the whole value of the annual produce circulated by its means is a question upon which political economists have not agreed. Nor can it be controlled by legislation, but must be left to the irrevocable laws which everywhere regulate commerce and trade. The circulating medium will ever irresistibly flow to those points where it is in greatest demand. The law of demand and supply is as unerring as that which regulates the tides of the ocean; and indeed currency, like the tides, has its ebbs and flows throughout the commercial world. At the beginning of the rebellion the banknote circulation of the country amounted to not

* See resolutions of Senate and House of Representatives thereon, pp.391.

much more than $200,000,000; now the circulation of national bank notes and those known as “legal-tenders” is nearly $700,000 000 While it is urged by some that this amount should be increased, others contend that a decided reduction is absolutely essential to the best interests of the country. In view of these diverse opinions, it may be well to ascertain the real value of our paper issues, when compared with a metallic or convertible currency. For this purpose let us inquire how much gold and silver could be purchased by the $700,000,000 of paper money now in circulation. Probably not more than half the amount of the latter, showing that when our paper currency is compared with gold and silver its commercial value is compressed into $350,000,000. This striking fact makes it the obvious duty of the Government, as early as may be consistent with the principles of sound political economy, to take such measures as will enable the holder of its notes and those of the national banks to convert them, without loss, into specie or its equivalent. A reduction of our paper-circulating medium need not necessarily follow. This, however, would depend upon the law of demand and supply; though it should be borne in mind that by making legal-tender and bank notes convertible into coin or its equivalent, their present specie value in the hands of their holders would be enhanced one hundred per cent. Legislation for the accomplishment of a result so desirable is demanded by the highest public considerations. The Constitution contemplates that the circulating medium of the country shall be uniform in quality and value. At the time of the formation of that instrument the country had just emerged from the war of the Revolution, and was suffering from the effects of a redundant and worthless paper currency. The sages of that I eriod were anxious to protect their osterity from the evils which they themselves £ experienced. Hence, in providing a circulating medium, they conferred upon Congress the power to coin money and regulate the value thereof, at the same time prohibiting the States from making anything but gold and silver a tender in payment of £ The anomalous condition of our currency is in striking contrast with that which was originally designed. Our circulation now embraces, first, notes of the national banks, which are made receivable for all dues to the Government, excluding imposts, and by all its creditors, excepting in payment of interest upon its bonds and the securities themselves; second, legal-tender notes issued by the United States, and which the law requires shall be received as well in payment of all debts between citizens as of all Government dues, excepting imposts; and, third, gold and silver coin. By the operation of our present system of finance, however, the metallic currency, when collected, is reserved only for one class of Government creditors, who, holding its bonds, semi-annually receive their notes in coin from the national Treasury. There is no reason which will be accepted as satisfactory by the people why those who defend us on the land and rerotect us on the sea; the pensioner upon the gratitude of the nation, bearing the scars and wounds received while Departments of the Government; the farmer who £ the soldiers of the army and the sailors of the navy; the artisan who tolls in the nation's workshops, or the mechanics and laborers who build its edifices and construct its forts and ves. Fels of war, should, in payment of their just and hard earned dues, receive depreciated paper, while another class of their countrymen, no more deBerving, are paid in coin of gold and silver. Equal and exact justice requires that all the creditors of the Government should be paid in a currency possessing a uniform value. This can only be accomplished by the restoration of the currency to the standard established by the Constitution; and by this means we £ remove a discrimination which may, if it has not already done so, create a prejudice that may become deeprooted and wide-spread, and imperil the national credit. The feasibility of making our currency correspond with the constitutional standard may be seen by reference to a few facts derived from our commercial statistics. The aggregate product of precious metals in the United States from 1849 to 1867 amounted to $1,174,000,000, while for the same period the net exports of specie were $741,000,000. This shows an excess of product over net exports of $433,000,000. There are in the Treasury $103,407,955 in coin, in circulation in the States on the Pacific coast about $40,000,000, and a few millions in the national and other banks—in all less than $160,000,000. Taking into consideration the specie in the country prior to 1849 and that produced since 1867, and we have more than $300,000,000 not accounted for by exportation or by the returns of the Treasury, and therefore most probably remaining in the country. These are important facts, and show how com. # the inferior currency will supersede the etter, forcing it from circulation among the masses, and causing it to be exported as a mere article of trade, to add to the money capital of foreign lands. They show the necessity of re. tiring our paper money, that the return of gold and silver to the avenues of trade may be invited, and a demand created which will cause the retention at home of at least so much of the £ of our rich and inexhaustible goldearing fields as may be sufficient for purposes of circulation. It is unreasonable to expect a return to a sound currency so long as the Government and banks, by continuing to issue irredeemable notes, fill the channels of circulation with depreciated paper. Notwithstanding a coinage by our mints, since 1849, of $874,000,000, the people are now strangers to the currency which was designed for their use and benefit, and specimens of the precious metals bearing the national device are seldom seen, except when produced to gratify the interest excited by their novelty. If depreciated paper is to be continued as the permanent currency of the country, and all our coin is to become a mere article of traffic and speculation, to the enhancement in price of all that is indispensable to the comfort of the people, it would be wise economy to abolish our mints, thus saving the nation the care and ex

in its service; the public servants in the various pense incident to s”ch as ablishments and let all

our precious metal be exported in bullion. The time has come, however, when the Government and national banks should be required to take the most efficient steps and make all necessary arrangements for a resumption of specie payments. Let specie payments once be earnestly inaugurated by the Government and banks, and the value of the paper circulation would directly approximate a specie standard. Specie payments having been resumed by the Government and banks, all notes or bills of paper issued by either of a less denomination than twenty dollars should by law be excluded from circulation, so that the people may have the benefit and convenience of a gold and silver currency which, in all their business transac: tions, will be uniform in value at hone and abroad. “Every man of property or industry, every man who desires to preserve what he honestly possesses, or to obtain what he can honestly earn, has a direct interest in maintaining a safe circulating medium—such a medium as shall be real and substantial, not liable to vibrate with opinions, not subject to be blown up or blown down by the breath of speculation, but to be made stable and secure. A disordered currency is one of the greatest political evils. It undermines the virtues necessary for the support of the social system, and encourages propensities d structive of its happiness. It wars against industry, frugality, and economy, and it fosters the evil spirits of extravagance and speculation." It has been asserted by one of our profound and most gifted statesmen, that “of all the contrivances for cheating the laboring classes of mankind none has been more effectual than that which deludes them with paper money. This is the most effectual of inventions to fertilize the rich man's fields by the sweat of the poor man's brow. Ordinary tyranny, oppression, excessive taxation—these bear lightly on the happiness of the mass of the community compared with a fraudulent currency and the robberies committed by depreciated paper. Our own history has recorded for our instruction enough and more than enough of the demoralizing tendency, the injustice, and the intolerable oppression on the virtuous and well-disposed of a degraded paper currency authorized by law or in any way countenanced by Government.” It is one of the most successful devices, in times of peace or war, of expansions or revulsions, to accomplish the transfer of all the precious metals from the great mass of the people into the hands of the few, where they are hoarded in secret places or deposited under bolts and bars, while the people are left to endure all the inconvenience, sacrifice, and demoralization resulting from the use of depreciated and worthless paper. * * * During the fiscal year ending June 30, 1868, six million six hundred and fifty-five thousand seven hundred acres of public land were disosed of * * * On the 30th of June, 1868, one hundred and sixty-nine thousand six hundred and forty-three names were borne on the pension rolls, and during the year ending on that day the total amount paid for pensions, including the expenses of disbursement, was $24,010 982, being $5,391,0.25 greater than that expended for like pur. poses during the preceding year. * * * Treaties with various lndian tribes have been concluded, and will be submitted to the Senate for its constitutional action. * * * The strength of our military force on the 30th of September last was forty eight thousand men, and it is computed that, by the 1st of January next, this number will be decreased to forty-three thousand. It is the opinion of the Secretary of War that within the next year a considerable diminution of the infantry force may be made without detriment to the interests of the country; and in view of the great expense attending the military peace establishment, and the absolute necessity of retrenchment wherever it can be applied, it is hoped that Congress will sanction the reduction which his report recommends. While in 1860 sixteen thousand three hundred Inen cost the nation $16,472,000, the sum of $65,682,000 is estimated as necessary for the support of the army during the fiscal year end. ing June 30, 1870. The estimates of the War Department for the last two fiscal years were, for 1867 $33,814,461; and for 1868, $25,205,069. The actual expenditures during the same periods were, respectively, $95,224,415 and $123,246 648. The estimate submitted in December last for the fiscal year ending June 30, 1869, was $77,124,707; the expenditures for the first quarter, ending the 30th of September last, were $27,219,117, and the Secretary of the Treasury gives $66,000,000 as the amount which will probably be required during the remaining three quarters, if there should be no reduction of the army—making its aggregate cost for the year considerably in excess of $93,000,000. The difference between the estimates and expenditures for the three fiscal years which have been named is thus shown to be $175,545,343 for this single branch of the public service. * * * The total number of vessels in the navy is two hundred and six, mounting seventeen hundred and forty-three guns. Eighty-one vessels of every description are in use, armed with six hundred and ninety-six guns. The number of enlisted men in the service, including apprentices, has been reduced to eight thousand five hundred. * * * The ordinary postal revenue for the fiscal year ending June 30, 1868, was $16,292,600, and the total expenditures, embracing all the service for which special appropriations have been made by Congress, amounted to $22,730,592, showing an excess of expenditures of $6,437,991. * * * Comprehensive national policy would seem to sanction the acquisition and incorporation into our Federal Union of the several adjacent continental and insular communities as speedily as it can be done peacefully, lawfully, and without any violation of national justice, faith, or honor. Foreign possession or control of those commu. nities has hitherto hindered the growth and impaired the influence of the United States. Chronic revolution and anarchy there would be equally injurious. Each one of them, when firmly es: tablished as an independent republic, or, when incorporated into the United States, would be a new source of strength and power. Conforming

my administration to these principles, I have on no occasion lent support or toleration to unlawful expeditions set on loot upon the plea of republican propagandism or of national extension or aggrandizement. The necessity, however, of repressing such unlawful movements clearly indicates the duty which rests upon us of adapting our legislative action to the new circumstances of a decline of European monarchical power and influence, and the increase of American republican ideas, interests, and sympathies. It cannot be long before it will become necessary for this Government to lend some effective aid to the solution of the political and social problems which are continually kept before the world by the two republics of the Island of St. Domingo, and which are now disclosing themselves more distinctly than heretofore in the Island of Cuba. The subject is commended to your consideration with ' the more earnestness because I am satisfied that the time has arrived when even so direct a proceeding as a proposition for an annexation of the two republics of the Island of St. Domingo would not only receive the consent of the people interested, but would also give satisfaction to all other foreign nations. I am aware that upon the question of further extending our possessions it is apprehended by some that our political system cannot successfully be applied to an area more extended than our continent; but the conviction is rapidly gaining ground in the American mind that, with the increased facilities for intercommunication between all portions of the earth, the principles of free government, as embraced in our Constitution, if faithfully maintained and carried out, would prove of sufficient strength and breadth to comprehend within their sphere and influence the civilized nations of the world. * * * I renew the recommendation contained in my communication to Congress dated the 18th July last, a copy of which accompanies this message, that the judgment of the people should be taken on the propriety of so amending the Federal Constitution that it shall provide— First. For an election of President and Vice President by a direct vote of the people, instead of through the agency of electors, and making them ineligible for re election to a second term. Second. For a distinct designation of the person who shall discharge the duties of President in the event of a vacancy in that office by the death, resignation, or removal of both the President and Vice President. Third. For the election of Senators of the United States directly by the people of the several States, instead of by the legislatures; and Fourth. For the limitation to a period of years of the terms of federal judges. Profoundly impressed with the propriety of making these important modifications in the Constitution, I respectfully submit them for the early and mature consideration of Congress. We should as far as possible remove all pretext for violations of the organic law, by remedying such imperfections as time and experience may develop, ever remembering that “the Constitution which at any time exists, until changed by an explicit and authentic act of the whole people, is sacredly obligatory upon all."

In the performance of a duty imposed upon me by the Constitution, I have thus communicated to Congress information of the state of the Union, and recommended for their consideration such measures as have seemed to me necessar and expedient. If carried into effect, they will hasten the accomplishment of the great and beneficent purposes for which the Constitution was ordained, and which it comprehensively states were “to form a more perfect Union. establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ..ourselves and our posterity." In Congress

are vested all legislative powers, and upon them devolves the responsibility as well for framing unwise and excessive laws, as for neglecting to devise and adopt measures absolutely £ by the wants of the country. Let us earnestly hope that before the expiration of our respective terms of service, now rapidly drawing to a close, an all-wise Providence will so guide our counsels as to strengthen and preserve the Federal Union, inspire reverence for the Constitution, restore prosperity and happiness to our whole people, and promote “on earth peace, good will toward men." ANDREw JoHNSON. WASHINGTON, December 9, 1868.

XXXIX.

POLITICAL WOTES IN THIRD SESSION OF FORTIETH CONGRESS.

CONDEMNATION OF PRESIDENT JOHNSON'S

PROPOSITION RESPECTING THE PAYMENT

OF THE PUBLIC DEBT.

Condemnatory Resolutions.

IN SENATE.

1868, December 14—Mr. Willey submitted this resolution, which was reported from the Committee on Finance by Mr. Cattell, December 16:

Resolved, That the Senate, properly cherishing and upholding the good faith and honor of the nation, do hereby utterly disapprove of and condemn the sentiments and propositions contained in so much of the late annual message of the President of the United States as reads as follows:

“It may be assumed that the holders of our securities have already received upon their bonds a larger amount than their original investment, measured by a gold standard. Upon this state-. ment of facts, it would seem but just and equitable that the six per cent interest, now paid by the Government should be applied to the reduction of the principal in semi-annual installments, which in sixteen years and eight months would liquidate the entire national debt. Six per cent. in gold would at present rates be equal to nine per cent in currency, and equivalent to the £ of the debt one and a half times in a raction less than seventeen years. This, in connection with all the other advantages derived from their investment, would afford to the pub. lic creditors a fair and liberal compensation for the use of their capital, and with this they should be satisfied. The lessons of the past admonish the lender that it is not well to be over-anxious in exacting from the borrower rigid compliance with the letter of the bond.”

Mr. Hendricks moved this as a substitute: That the Senate cordially endorse the sentiment in the President's message, “that our national credit should be sacredly observed," and declare that the public debt should be paid as rapidly as practicable, exactly in accordance with the terms of the contracts under which the several loans were made, and where the obligations of the Government do not expressly state upon their face, or the law under £ they were issued does not provide, that they shall be £ in coin, they ought in right and justice to e paid in the lawful money of the United States. Which was disagreed to—yeas 7, nays 44, as follow:

YEAs–Messrs. Buckalew, Davis, Hendricks, McCreery, Saulsbury, Vickers, Whyte–7.

NAYs–Messrs. Abbott, Anthony, Cattell, Chandler, Cole, Conkling, Corbett, Dixon, Drake, Edmunds, Ferry, Fessenden, Frelinghuysen, Grimes, Harris, Henderson, Howard, Howe, Kellogg, Morgan, Morrill of Maine, Morrill of Vermont, Nye, Osborn. Pool, Ramsey, Rice, Robertson, Ross, Sawyer. Sherman, Spencer, Stewart, Sumner, Thayer, Trumbull, Van Winkle, Wade, "Warner, "weich, Wiley, Williams, Wilson, Yates—44.

December 18–The resolution was adopted— yeas 43, nays 6, as follow:

YEAs–Messrs. Abbott, Anthony, Cameron, Cattell, Chandler, Cole, Conkling, Corbett, Cragin. Dixon, Edmunds, Ferry, Fessenden, Frelinghuysen, Grimes, Harlan, Harris, Henderson, Howard, Howe, Kellogg, Morgan, Morrill of Vermont Nye, Osborn, Pomeroy, Ramsey, Robertson, Ross, Sawyer, Sherman, Spencer, Stewart, Sumner, Thayer, Van Winkle, Wade, Warner, Willey, Williams, Wilson. Yates—13.

NAYs–Messrs. Davis, McCreery, Patterson of Tennessee, Saulsbury, Vickers, Whyte–6.

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