wards the restoration of the principles and doctrines of the opposite school; and, fortunately, this was effected by a decided majority at the expiration of his first term.

The next step was the final discharge of the funded debt; and for this important step, at so early a period, the country is indebted principally to a friend, now, unfortunately, no more-the amiable, the talented, the patriotic Lowndes the author of that simple, but effective measure, the Sinking Fund Act, passed shortly after the termination of the late war.

But the most formidable of all the obstacles, the source of the vast and corrupting surplus, with its host of extravagant and unconstitutional expenditures the protective tariff-still remained in full force, and obstructed any farther progress in the reaction that had commenced. By what decided and bold measures it was overcome is well known to all, and need not be told on this occasion. It is sufficient to say that, after a long and desperate struggle, the controversy terminated in the Compromise Act, which abandoned the protective principle, and has, I trust, closed forever what has proved in this government a most prolific source of power, patronage, and corruption.

The next step in the progress was the overthrow of the Bank of the United States-the centre and soul of the paper system-a step that may justly be regarded as not inferior to any other in the whole series. That was followed by the Deposite Act of 1836, which transferred to the treas uries of the states the vast surplus which continued to flow in upon us, notwithstanding the great reduction under the Compromise Act. This decisive measure disburdened our surcharged treasury, and has forced on this government the necessity of retrenchment and economy, and thereby has greatly strengthened and accelerated the reaction. So necessary is the reduction of the income to reform, that I am disposed to regard it as a political maxim in free states, that an impoverished treasury, once in a generation at least, is almost indispensable to the preservation of their institutions and liberty.

The

The next stage in the progress was the suspension of the connexion between the government and the banks, in consequence of the suspension of specie payments. This occasion afforded an opportunity to strike the first blow against that illegitimate and unholy alliance. It was given decidedly, boldly, and vigorously, but still with only partial success. interest in favour of maintaining the connexion was too powerful to be overcome at once; but, though not broken, the tie is greatly weakened, and nothing now is wanting to sever forever this fatal knot but to follow up what has already been done by persevering and energetic blows.

This is the point to which the reaction has already reached; and the question now to be considered is, To what point ought it to be urged, and what are the intermediate obstacles to be overcome? I am, for myself, prepared to answer. I have no concealment. My aim is fixed. It is no less than to turn back the government to where it was when it commenced its operation in 1789; to obliterate all the intermediate measures originating in the peculiar principles and policy of the school to which I am opposed, and which experience has proved to be so dangerous and uncongenial to our system; to take a fresh start, a new departure, on the State Rights Republican tack, as was intended by the framers of the Constitution. That is the point at which I have aimed for more than twelve years, and towards which I have persisted, during the whole period, to urge my way, in defiance of opposing difficulties, dangers, and discouragements, and from which nothing shall drive me (while in public life) till the object at which I aim is accomplished. By far the most formidable difficulties are already surmounted. Those that remain are comparatively insignificant.

Among these, the most important, by far, is to separate the government from the banks, but which, after the blows the connexion has received, will require not much more than unyielding firmness and perseverance. This done, the great work of freeing the government entirely from the paper system, on which Hamilton laid the foundation of his whole system, will have been achieved.

The next is to carry out, in the revision of the tariff, which must take place at the next or succeeding session, the provisions of the Compromise Act, that there shall be no duty laid but what may be necessary to the economical and constitutional wants of the government. Should this be accomplished, there will be an end to the protective system, with all the evil that followed, and must ever follow, in its train. Nor can I believe, after what we have experienced, and what has been said during this session, that there will be any insuperable difficulty in effecting an object so intimately connected with the peace and tranquillity of the Union.

Having freed the government from the paper and protective systems, the next step in importance is, to put a final stop to internal improvements, the construction and improvement of harbours, and the extravagant waste on what we are pleased to call the pension system, but which has departed from every principle justly belonging to such a system. No government was ever before burdened with an expenditure so absurd and monstrous. It confounds all distinctions between the deserving and undeserving, and yearly draws millions from the treasury without any just claim on the public bounty, and ought to be both arrested and reformed. A single step more brings the government to the destined point-I mean a thorough reformation in the administrative department of the government. I doubt not but that every branch needs reform. There are, doubtless, numerous defalcations in addition to those brought to light. The fault has been more in that system (a brief narrative of which I have given) than in those who have been charged with the administration of the government. For years money was as dirt. The treasury was oppressed with it, and the only solicitude was, how to get clear of what was considered a useless burden. Hence the vast increase of expenditures; hence the loose and inattentive administration of our fiscal concerns; hence the heavy defalcations. Nor are these remarks confined to the executive department of the government; they apply to all, to the two houses of Congress as well as to other branches. But there is no longer a surplus. The treasury is exhausted, and the work of retrenchment, economy, and accountability is forced on us. Reform in the fiscal action of the government can no longer be delayed, and I rejoice that such is the fact. Economy and accountability are virtues belonging to free and popular governments, and without which they cannot long endure. The assertion is pre-eminently true when applied to this government, and hence the prominent place they occupy in the creed of the State Rights and Republican school.

Having taken these steps, every measure of prominence originating in the principles or policy of the national Federal school will become obliterated, and the government will have been brought back, after the lapse of fifty years, to the point of original departure, when it may be put on its new tack. To guard against a false steerage thereafter, one important measure, in addition to those enumerated, will be indispensable-to place the new states, as far as the public domain is concerned, in a condition as independent of the government as the old. It is as much due to them as it is indispensable to accomplish the great object in view. The public domain within these states is too great a stake to be left under the control of this government. It is difficult to estimate the vast

Z z

addition it makes to its power and patronage, and the controlling and corrupting influence which it may exercise over the presidential election, and, through that, the strong impulse it may receive in a wrong direction. Till it is removed, there can be no assurance of a successful and safe steerage, even if every other sinister influence should be removed.

It would be presumptuous in me, Mr. President, to advise those who are charged with the administration of the government what course to adopt; but, if they would hear the voice of one who desires nothing for himself, and whose only wish is to see the country prosperous, free, and happy, I would say to them, you are placed in the most remarkable juncture that has ever occurred since the establishment of the Federal Government. By seizing the opportunity, you may bring the vessel.of state to a position where she may take a new tack, and thereby escape all the shoals and breakers into the midst of which a false steerage has run her, and bring her triumphantly into her destined port with honour to yourselves and safety to those on board. Take your stand boldly; avow your object; disclose your measures, and let the people see clearly that you intend-what Jefferson designed to do, but, from adverse circumstances, could not accomplish-to reverse the measures originating in principles and policy uncongenial to our political system-to divest the government of all undue patronage and influence-to restrict it to the few great objects intended by the Constitution-in a word, to give a complete ascendency to the good old Virginia school over its antagonist, which time and experience have proved to be dangerous to our system of government-and you may count with confidence on their support, without looking to other means of success. Should the government take such a course at this propitious moment, our free and happy institutions may be perpetuated for generations; but, if a different, short will be their duration.

On this question of patronage let me add, in conclusion, that, according to my conception, the great and leading error in Hamilton and his school originated in a mistake as to the analogy between ours and the British system of government. If we were to judge by their outward form, there is, indeed, a striking analogy between them in many particulars; but, if we look within, at their spirit and genius, never were two free governments so perfectly dissimilar. They are, in fact, the very opposites. Of all free governments that ever existed-no, I will enlarge the proposition-of all governments that ever existed, free or despotic, the British government can bear the largest amount of patronage, the greatest exaction and pressure on the people, without changing its character or running into revolution. The greater, in fact, its patronage, the stronger it is, till the pressure begins to crush the mass of population with its superincumbent weight. But directly the opposite is the case with ours. Of all governments that ever existed, it can stand under the least patronage, in proportion to the population and wealth of the country, without changing its character or the hazard of a revolution. I have not made these assertions lightly. They are the result of much reflection, and can be sustained by conclusive reasons drawn from the nature of the two governments; but this is not the proper occasion to discuss the subject.

XXIV.

SPEECH ON THE REPORT OF MR. GRUNDY, OF TENNESSEE, IN RELATION TO THE ASSUMPTION OF THE DEBTS OF THE STATES BY THE FEDERAL GOVERNMENT, FEBRUARY 5, 1840.

ON Mr. Grundy's report in relation to the assumption of the debts of the states by the Federal Government, 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 favour of the assumption of state debts; and that the resolutions were mere idle, abstract negatives, of no sort of importance, I could not 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 could 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 and on the other side of the Atlantic; not, indeed, a direct assumption, for that would be too absurd; and harmless, because too absurd; but in a 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 that 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 turn. 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 have 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 postoffice. 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 lands 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 worst 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 as to who, in fact, pays the duties on imports. I do not intend to discuss that point. We of the staple and exporting states have long settled the question for ourselves, almost unanimously, from sad experience.