For these reasons, I cannot assent that the Government should repudiate the use of its own credit, nor do I believe that such is the sense of this body. Should there be any one of a contrary opinion, let him submit a direct proposition to prohibit the Government from the use of its credit. I would be glad to see the vote on such a proposition. Instead of being unanimous in its favor, as the mover of the amendment would have us believe, it is far more probable it would be nearly so the other way.

But I am told, that the provision now proposed to be stricken out, was in an amendment which I moved at the extra session,-containing, what is usually called, the specie feature. This is true, but is easily explained. It was then known that there was a large temporary deficit in the revenue, which I preferred meeting by the use of our own credit to a loan from the banks. But now we are told that there will be no deficit, and, of course, that reason does not apply. I must, however, say, that according to my impression, there will be a deficit before the end of the year of some millions, without the most rigid economy; and one of the motives I have for acquiescing in the proposed amendment, is to enforce such economy, by increasing the difficulty of providing for the deficit should there be one. In that case, it is clear there will be a conflict between the advocates of loans and of Government credit; in which, if it should come, I need not say on which side I shall be found.

SPEECH

On the Report of Mr. Grundy of Tennessee, in relation to the assumption of the Debts of the States by the Federal Government; delivered in the Senate, February 5th, 1840.

MR. CALHOUN said: When I have heard it asserted, again and again, in this discussion, that this report was uncalled for; that there was no one in favor of the assumption of State debts, and that the resolutions were mere idle, abstract negatives, of no sort of importance, I cannot but ask myself, If all this be so, why this deep excitement ? why this ardent zeal to make collateral issues? and, above all, why the great anxiety to avoid a direct vote on the resolutions? To these inquiries I can find but one solution; and that is, disguise it as you may, there is, in reality, at the bottom, a deep and agitating question. Yes, there is such a question. The scheme of assuming the debts of the States is no idle fiction. The evidence of its reality, and that it is now in agitation, bursts from every quarter, within and without these walls, on this side and the other side of the Atlantic; not, indeed, a direct assumption, for that would be too absurd; and harmless, because too absurd; but in form far more plausible and dangerous-an assumption, in effect, by dividing the proceeds of the sales of the public lands among the States.

I shall not stop to show that such distribution, under existing circumstances, with the deep indebtedness and embarrassment of many of the States, would be, in reality, an assumption. We all know, that without such indebtedness and embarrassment, the scheme of distribution would not have the least chance for adoption, and it would be perfectly

harmless, and cause no excitement; but plunged, as the States are, in debt, it becomes a question truly formidable, and on which the future politics of the country are destined for years to run. If, then, the scheme should be adopted, it must be by the votes of the indebted States, in order to aid their credit, and lighten their burden; and who is so blind as not to see that it would be in truth, what I have asserted it to be in effect, to that extent, an assumption of their debts?

Here, then, we have the real question at issue, which has caused all this excitement and zeal-a question pregnant with the most important consequences, immediate and remote. What I now propose is, to trace rapidly and briefly some of the more prominent which would result from this scheme, should it ever become a law.

The first, and most immediate, would be to subtract from the treasury a sum equal to the annual proceeds of the sales of the public lands. I do not intend to examine the constitutional question, whether Congress has or has not the right to make the subtraction, and to divide the proceeds among the States. It is not necessary. The committee has conclusively shown that it has no such power; that it holds the public domain in trust for the States in their Federal capacity as members of the Union, in aid of their contribution to the treasury; and that, to denationalize the fund (if I may use the expression), by distributing it among the States for their separate and individual uses, would be a manifest violation of the trust, and wholly unwarranted by the constitution. Passing, then, by the constitutional question, I intend to restrict my inquiry to what would be its fiscal and moneyed effects.

Thus regarded, the first effect of the subtraction would be to cause an equal deficit in the revenue. I need not inform the Senate that there is not a surplus cent in the treasury; that the most rigid economy will be necessary to meet the demands on it during the current year; that the revenue, so

far from being on the increase, must be rapidly reduced, under existing laws, in the next two years; and that every dollar withdrawn, by subtracting the proceeds of the public lands, must make a corresponding deficit. We are thus brought to the question, What would be the probable annual amount of the deficit, and how is it to be supplied?

The receipts from the sales of the public lands, I would suppose, may be safely estimated at five millions of dollars at least, on an average, for the next ten or fifteen years. They were about six millions the last year. The first three quarters gave within a fraction of five and a half millions. The estimate for this year, is three and a half millions; making the average of the two years but little short of five millions. If, with these data, we cast our eyes back on the last ten or fifteen years, we shall come to the conclusion, taking into consideration our great increase of population and wealth, and the vast quantity of public lands held by the Government, that the average I have estimated is not too high. Assuming, then, that the deficit would be five millions, the next inquiry is, How shall it be supplied? There is but one way; a corresponding increase of the duties on imports. We have no other source of revenue, but the Post Office. No one would think of laying it on that, or to raise the amount by internal taxes. The result, then, thus far, would be to withdraw from the treasury five millions of the proceeds of the sales of the public lands, to be distributed among the States, and to impose an equal amount of duty on imports, to make good the deficit. Now I would ask, What is the difference, regarded as a fiscal transaction, between withdrawing that amount for distribution, and imposing a similar amount of duties on the imports, to supply its place, and that of leaving the proceeds of the sales of the land in the treasury, and imposing an equal amount of duties for distribution? It is clearly the same thing, in effect, to retain the proceeds of the public lands in the treasury and to

impose the duties for distribution, or to distribute the proceeds and thereby force the imposition of the duties to supply the place.

It is then, in reality, a scheme to impose five millions of additional duties on the importations of the country, to be distributed among the States; and I now ask, Where is the Senator who will openly avow himself an advocate of such a scheme? I put the question home, solemnly, to those on the opposite side: Do you not believe that such a scheme would be unconstitutional, unequal, unjust, and dangerous? And can you, as honest men, do that in effect, by indirect means, which, if done directly, would be clearly liable to every one of those objections?

I have said such would be the case, regarded as a fiscal transaction. In a political point of view, the distribution of the proceeds of the sales of the land would be the worse of the two. It would create opposing and hostile relations between the old and new States, in reference to the public domain. Heretofore the conduct of the Government has been distinguished by the greatest liberality, not to say generosity, towards the new States, in the administration of the public lands. Adopt this scheme, and its conduct will be the reverse. Whatever might be granted to them, would subtract an equal amount from the sum to be distributed. An austere and rigid administration would be the result, followed by hostile feelings on both sides, that would accelerate the conflict between them in reference to the public domain-a conflict advancing but too fast by the natural course of events, and which any one, in the least gifted with foresight, must see, come when it will, would shake the Union to the centre, unless prevented by wise and timely concession.

Having shown that the scheme is, in effect, to impose duties for distribution, the next question is, On whom will they fall? I know that there is a great diversity of opinion