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President[ Martin van Buren

         Date[ December 2, 1839

Fellow-Citizens of the Senate and House of Representatives:

I regret that I can not on this occasion congratulate you that the past

year has been one of unalloyed prosperity. The ravages of fire and disease

have painfully afflicted otherwise flourishing portions of our country, and

serious embarrassments yet derange the trade of many of our cities. But

notwithstanding these adverse circumstances, that general prosperity which

has been heretofore so bountifully bestowed upon us by the Author of All

Good still continues to call for our warmest gratitude. Especially have we

reason to rejoice in the exuberant harvests which have lavishly recompensed

well-directed industry and given to it that sure reward which is vainly

sought in visionary speculations. I cannot, indeed, view without peculiar

satisfaction the evidences afforded by the past season of the benefits that

spring from the steady devotion of the husbandman to his honorable pursuit.

No means of individual comfort is more certain and no source of national

prosperity is so sure. Nothing can compensate a people for a dependence

upon others for the bread they eat, and that cheerful abundance on which

the happiness of everyone so much depends is to be looked for nowhere with

such sure reliance as in the industry of the agriculturist and the bounties

of the earth.

With foreign countries our relations exhibit the same favorable aspect

which was presented in my last annual message, and afford continued proof

of the wisdom of the pacific, just, and forbearing policy adopted by the

first Administration of the Federal Government and pursued by its

successors. The extraordinary powers vested in me by an act of Congress for

the defense of the country in an emergency, considered so far probable as

to require that the Executive should possess ample means to meet it, have

not been exerted. They have therefore been attended with no other result

than to increase, by the confidence thus reposed in me, my obligations to

maintain with religious exactness the cardinal principles that govern our

intercourse with other nations. Happily, in our pending questions with

Great Britain, out of which this unusual grant of authority arose, nothing

has occurred to require its exertion, and as it is about to return to the

Legislature I trust that no future necessity may call for its exercise by

them or its delegation to another Department of the Government.

For the settlement of our northeastern boundary the proposition promised by

Great Britain for a commission of exploration and survey has been received,

and a counter project, including also a provision for the certain and final

adjustment of the limits in dispute, is now before the British Government

for its consideration. A just regard to the delicate state of this question

and a proper respect for the natural impatience of the State of Maine, not

less than a conviction that the negotiation has been already protracted

longer than is prudent on the part of either Government, have led me to

believe that the present favorable moment should on no account be suffered

to pass without putting the question forever at rest. I feel confident that

the Government of Her Britannic Majesty will take the same view of this

subject, as I am persuaded it is governed by desires equally strong and

sincere for the amicable termination of the controversy.

To the intrinsic difficulties of questions of boundary lines, especially

those described in regions unoccupied and but partially known, is to be

added in our country the embarrassment necessarily arising out of our

Constitution by which the General Government is made the organ of

negotiating and deciding upon the particular interests of the States on

whose frontiers these lines are to be traced. To avoid another controversy

in which a State government might rightfully claim to have her wishes

consulted previously to the conclusion of conventional arrangements

concerning her rights of jurisdiction or territory, I have thought it

necessary to call the attention of the Government of Great Britain to

another portion of our conterminous dominion of which the division still

remains to be adjusted I refer to the line from the entrance of Lake

Superior to the most northwestern point of the Lake of the Woods,

stipulations for the settlement of which are to be found in the seventh

article of the treaty of Ghent. The commissioners appointed under that

article by the two Governments having differed in their opinions, made

separate reports, according to its stipulations, upon the points of

disagreement, and these differences are now to be submitted to the

arbitration of some friendly sovereign or state. The disputed points should

be settled and the line designated before the Territorial government of

which it is one of the boundaries takes its place in the Union as a State,

and I rely upon the cordial cooperation of the British Government to effect

that object.

There is every reason to believe that disturbances like those which lately

agitated the neighboring British Provinces will not again prove the sources

of border contentions or interpose obstacles to the continuance of that

good understanding which it is the mutual interest of Great Britain and the

United States to preserve and maintain.

Within the Provinces themselves tranquillity is restored, and on our

frontier that misguided sympathy in favor of what was presumed to be a

general effort in behalf of popular rights, and which in some instances

misled a few of our more inexperienced citizens, has subsided into a

rational conviction strongly opposed to all intermeddling with the internal

affairs of our neighbors. The people of the United States feel, as it is

hoped they always will, a warm solicitude for the success of all who are

sincerely endeavoring to improve the political condition of mankind. This

generous feeling they cherish toward the most distant nations, and it was

natural, therefore, that it should be awakened with more than common warmth

in behalf of their immediate neighbors; but it does not belong to their

character as a community to seek the gratification of those feelings in

acts which violate their duty as citizens, endanger the peace of their

country, and tend to bring upon it the stain of a violated faith toward

foreign nations. If, zealous to confer benefits on others, they appear for

a moment to lose sight of the permanent obligations imposed upon them as

citizens, they are seldom long misled. From all the information I receive,

confirmed to some extent by personal observation, I am satisfied that no

one can now hope to engage in such enterprises without encountering public

indignation, in addition to the severest penalties of the law.

Recent information also leads me to hope that the emigrants from Her

Majesty's Provinces who have sought refuge within our boundaries are

disposed to become peaceable residents and to abstain from all attempts to

endanger the peace of that country which has afforded them an asylum. On a

review of the occurrences on both sides of the line it is satisfactory to

reflect that in almost every complaint against our country the offense may

be traced to emigrants from the Provinces who have sought refuge here. In

the few instances in which they were aided by citizens of the United States

the acts of these misguided men were not only in direct contravention of

the laws and well-known wishes of their own Government, but met with the

decided disapprobation of the people of the United States.

I regret to state the appearance of a different spirit among Her Majesty's

subjects in the Canadas. The sentiments of hostility to our people and

institutions which have been so frequently expressed there, and the

disregard of our rights which has been manifested on some occasions, have,

I am sorry to say, been applauded and encouraged by the people, and even by

some of the subordinate local authorities, of the Provinces. The chief

officers in Canada, fortunately, have not entertained the same feeling, and

have probably prevented excesses that must have been fatal to the peace of

the two countries.

I look forward anxiously to a period when all the transactions which have

grown out of this condition of our affairs, and which have been made the

subjects of complaint and remonstrance by the two Governments,

respectively, shall be fully examined, and the proper satisfaction given

where it is due from either side.

Nothing has occurred to disturb the harmony of our intercourse with

Austria, Belgium, Denmark, France, Naples, Portugal, Prussia, Russia, or

Sweden. The internal state of Spain has sensibly improved, and a

well-grounded hope exists that the return of peace will restore to the

people of that country their former prosperity and enable the Government to

fulfill all its obligations at home and abroad. The Government of Portugal,

I have the satisfaction to state, has paid in full the eleventh and last

installment due to our citizens for the claims embraced in the settlement

made with it on the 3d of March, 1837.

I lay before you treaties of commerce negotiated with the Kings of Sardinia

and of the Netherlands, the ratifications of which have been exchanged

since the adjournment of Congress. The liberal principles of these treaties

will recommend them to your approbation. That with Sardinia is the first

treaty of commerce formed by that Kingdom, and it will, I trust, answer the

expectations of the present Sovereign by aiding the development of the

resources of his country and stimulating the enterprise of his people. That

with the Netherlands happily terminates a long-existing subject of dispute

and removes from our future commercial intercourse all apprehension of

embarrassment. The King of the Netherlands has also, in further

illustration of his character for justice and of his desire to remove every

cause of dissatisfaction, made compensation for an American vessel captured

in 1800 by a French privateer, and carried into Curacoa, where the proceeds

were appropriated to the use of the colony, then, and for a short time

after, under the dominion of Holland.

The death of the late Sultan has produced no alteration in our relations

with Turkey. Our newly appointed minister resident has reached

Constantinople, and I have received assurances from the present ruler that

the obligations of our treaty and those of friendship will be fulfilled by

himself in the same spirit that actuated his illustrious father.

I regret to be obliged to inform you that no convention for the settlement

of the claims of our citizens upon Mexico has yet been ratified by the

Government of that country. The first convention formed for that purpose

was not presented by the President of Mexico for the approbation of its

Congress, from a belief that the King of Prussia, the arbitrator in case of

disagreement in the joint commission to be appointed by the United States

and Mexico, would not consent to take upon himself that friendly office.

Although not entirely satisfied with the course pursued by Mexico, I felt

no hesitation in receiving in the most conciliatory spirit the explanation

offered, and also cheerfully consented to a new convention, in order to

arrange the payments proposed to be made to our citizens in a manner which,

while equally just to them, was deemed less onerous and inconvenient to the

Mexican Government. Relying confidently upon the intentions of that

Government, Mr. Ellis was directed to repair to Mexico, and diplomatic

intercourse has been resumed between the two countries. The new convention

has, he informs us, been recently submitted by the President of that

Republic to its Congress under circumstances which promise a speedy

ratification, a result which I can not allow myself to doubt.

Instructions have been given to the commissioner of the United States under

our convention with Texas for the demarcation of the line which separates

us from that Republic. The commissioners of both Governments met in New

Orleans in August last. The joint commission was organized, and adjourned

to convene at the same place on the 12th of October. It is presumed to be

now in the performance of its duties.

The new Government of Texas has shown its desire to cultivate friendly

relations with us by a prompt reparation for injuries complained of in the

cases of two vessels of the United States.

With Central America a convention has been concluded for the renewal of its

former treaty with the United States. This was not ratified before the

departure of our late charge d'affaires from that country, and the copy of

it brought by him was not received before the adjournment of the Senate at

the last session. In the meanwhile, the period limited for the exchange of

ratifications having expired, I deemed it expedient, in consequence of the

death of the charge d'affaires, to send a special agent to Central America

to close the affairs of our mission there and to arrange with the

Government an extension of the time for the exchange of ratifications.

The commission created by the States which formerly composed the Republic

of Colombia for adjusting the claims against that Government has by a very

unexpected construction of the treaty under which it acts decided that no

provision was made for those claims of citizens of the United States which

arose from captures by Colombian privateers and were adjudged against the

claimants in the judicial tribunals. This decision will compel the United

States to apply to the several Governments formerly united for redress.

With all these--New Granada, Venezuela, and Ecuador--a perfectly good

understanding exists. Our treaty with Venezuela is faithfully carried into

execution, and that country, in the enjoyment of tranquillity, is gradually

advancing in prosperity under the guidance of its present distinguished

President, General Paez. With Ecuador a liberal commercial convention has

lately been concluded, which will be transmitted to the Senate at an early

day.

With the great American Empire of Brazil our relations continue unchanged,

as does our friendly intercourse with the other Governments of South

America--the Argentine Republic and the Republics of Uruguay, Chili, Peru,

and Bolivia. The dissolution of the Peru-Bolivian Confederation may

occasion some temporary inconvenience to our citizens in that quarter, but

the obligations on the new Governments which have arisen out of that

Confederation to observe its treaty stipulations will no doubt be soon

understood, and it is presumed that no indisposition will exist to fulfill

those which it contracted with the United States.

The financial operations of the Government during the present year have, I

am happy to say, been very successful. The difficulties under which the

Treasury Department has labored, from known defects in the existing laws

relative to the safe-keeping of the public moneys, aggravated by the

suspension of specie payments by several of the banks holding public

deposits or indebted to public officers for notes received in payment of

public dues, have been surmounted to a very gratifying extent. The large

current expenditures have been punctually met, and the faith of the

Government in all its pecuniary concerns has been scrupulously maintained.

The nineteen millions of Treasury notes authorized by the act of Congress

of 1837, and the modifications thereof with a view to the indulgence of

merchants on their duty bonds and of the deposit banks in the payment of

public moneys held by them, have been so punctually redeemed as to leave

less than the original ten millions outstanding at any one time, and the

whole amount unredeemed now falls short of three millions. Of these the

chief portion is not due till next year, and the whole would have been

already extinguished could the Treasury have realized the payments due to

it from the banks. If those due from them during the next year shall be

punctually made, and if Congress shall keep the appropriations within the

estimates, there is every reason to believe that all the outstanding

Treasury notes can be redeemed and the ordinary expenses defrayed without

imposing on the people any additional burden, either of loans or increased

taxes.

To avoid this and to keep the expenditures within reasonable bounds is a

duty second only in importance to the preservation of our national

character and the protection of our citizens in their civil and political

rights. The creation in time of peace of a debt likely to become permanent

is an evil for which there is no equivalent. The rapidity with which many

of the States are apparently approaching to this condition admonishes us of

our own duties in a manner too impressive to be disregarded. One, not the

least important, is to keep the Federal Government always in a condition to

discharge with ease and vigor its highest functions should their exercise

be required by any sudden conjuncture of public affairs--a condition to

which we are always exposed and which may occur when it is least expected.

To this end it is indispensable that its finances should be untrammeled and

its resources as far as practicable unencumbered. No circumstance could

present greater obstacles to the accomplishment of these vitally important

objects than the creation of an onerous national debt. Our own experience

and also that of other nations have demonstrated the unavoidable and

fearful rapidity with which a public debt is increased when the Government

has once surrendered itself to the ruinous practice of supplying its

supposed necessities by new loans. The struggle, therefore, on our part to

be successful must be made at the threshold. To make our efforts effective,

severe economy is necessary. This is the surest provision for the national

welfare, and it is at the same time the best preservative of the principles

on which our institutions rest. Simplicity and economy in the affairs of

state have never failed to chasten and invigorate republican principles,

while these have been as surely subverted by national prodigality, under

whatever specious pretexts it may have been introduced or fostered.

These considerations can not be lost upon a people who have never been

inattentive to the effect of their policy upon the institutions they have

created for themselves, but at the present moment their force is augmented

by the necessity which a decreasing revenue must impose. The check lately

given to importations of articles subject to duties, the derangements in

the operations of internal trade, and especially the reduction gradually

taking place in our tariff of duties, all tend materially to lessen our

receipts; indeed, it is probable that the diminution resulting from the

last cause alone will not fall short of $5,000,000 in the year 1842, as the

final reduction of all duties to 20 per cent then takes effect. The whole

revenue then accruing from the customs and from the sales of public lands,

if not more, will undoubtedly be wanted to defray the necessary expenses of

the Government under the most prudent administration of its affairs. These

are circumstances that impose the necessity of rigid economy and require

its prompt and constant exercise. With the Legislature rest the power and

duty of so adjusting the public expenditure as to promote this end. By the

provisions of the Constitution it is only in consequence of appropriations

made by law that money can be drawn from the Treasury. No instance has

occurred since the establishment of the Government in which the Executive,

though a component part of the legislative power, has interposed an

objection to an appropriation bill on the sole ground of its extravagance.

His duty in this respect has been considered fulfilled by requesting such

appropriations only as the public service may be reasonably expected to

require. In the present earnest direction of the public mind toward this

subject both the Executive and the Legislature have evidence of the strict

responsibility to which they will be held; and while I am conscious of my

own anxious efforts to perform with fidelity this portion of my public

functions, it is a satisfaction to me to be able to count on a cordial

cooperation from you.

At the time I entered upon my present duties our ordinary disbursements,

without including those on account of the public debt, the Post-Office, and

the trust funds in charge of the Government, had been largely increased by

appropriations for the removal of the Indians, for repelling Indian

hostilities, and for other less urgent expenses which grew out of an

overflowing Treasury. Independent of the redemption of the public debt and

trusts, the gross expenditures of seventeen and eighteen millions in 1834

and 1835 had by these causes swelled to twenty-nine millions in 1836, and

the appropriations for 1837, made previously to the 4th of March, caused

the expenditure to rise to the very large amount of thirty-three millions.

We were enabled during the year 1838, notwithstanding the continuance of

our Indian embarrassments, somewhat to reduce this amount, and that for the

present year (1839) will not in all probability exceed twenty-six millions,

or six millions less than it was last year. With a determination, so far as

depends on me, to continue this reduction, I have directed the estimates

for 1840 to be subjected to the severest scrutiny and to be limited to the

absolute requirements of the public service. They will be found less than

the expenditures of 1839 by over $5,000,000.

The precautionary measures which will be recommended by the Secretary of

the Treasury to protect faithfully the public credit under the fluctuations

and contingencies to which our receipts and expenditures are exposed, and

especially in a commercial crisis like the present, are commended to your

early attention.

On a former occasion your attention was invited to various considerations

in support of a preemption law in behalf of the settlers on the public

lands, and also of a law graduating the prices for such lands as had long

been in the market unsold in consequence of their inferior quality. The

execution of the act which was passed on the first subject has been

attended with the happiest consequences in quieting titles and securing

improvements to the industrious, and it has also to a very gratifying

extent been exempt from the frauds which were practiced under previous

preemption laws. It has at the same time, as was anticipated, contributed

liberally during the present year to the receipts of the Treasury.

The passage of a graduation law, with the guards before recommended, would

also, I am persuaded, add considerably to the revenue for several years,

and prove in other respects just and beneficial. Your early consideration

of the subject is therefore once more earnestly requested.

The present condition of the defenses of our principal seaports and

navy-yards, as represented by the accompanying report of the Secretary of

War, calls for the early and serious attention of Congress; and, as

connecting itself intimately with this subject, I can not recommend too

strongly to your consideration the plan submitted by that officer for the

organization of the militia of the United States.

In conformity with the expressed wishes of Congress, an attempt was made in

the spring to terminate the Florida war by negotiation. It is to be

regretted that these humane intentions should have been frustrated and that

the effort to bring these unhappy difficulties to a satisfactory conclusion

should have failed; but after entering into solemn engagements with the

commanding general, the Indians, without any provocation, recommenced their

acts of treachery and murder. The renewal of hostilities in that Territory

renders it necessary that I should recommend to your favorable

consideration the plan which will be submitted to you by the Secretary of

War, in order to enable that Department to conduct them to a successful

issue.

Having had an opportunity of personally inspecting a portion of the troops

during the last summer, it gives me pleasure to bear testimony to the

success of the effort to improve their discipline by keeping them together

in as large bodies as the nature of our service will permit. I recommend,

therefore, that commodious and permanent barracks be constructed at the

several posts designated by the Secretary of War. Notwithstanding the high

state of their discipline and excellent police, the evils resulting to the

service from the deficiency of company officers were very apparent, and I

recommend that the staff officers be permanently separated from the line.

The Navy has been usefully and honorably employed in protecting the rights

and property of our citizens wherever the condition of affairs seemed to

require its presence. With the exception of one instance, where an outrage,

accompanied by murder, was committed on a vessel of the United States while

engaged in a lawful commerce, nothing is known to have occurred to impede

or molest the enterprise of our citizens on that element, where it is so

signally displayed. On learning this daring act of piracy, Commodore Reed

proceeded immediately to the spot, and receiving no satisfaction, either in

the surrender of the murderers or the restoration of the plundered

property, inflicted severe and merited chastisement on the barbarians.

It will be seen by the report of the Secretary of the Navy respecting the

disposition of our ships of war that it has been deemed necessary to

station a competent force on the coast of Africa to prevent a fraudulent

use of our flag by foreigners.

Recent experience has shown that the provisions in our existing laws which

relate to the sale and transfer of American vessels while abroad are

extremely defective. Advantage has been taken of these defects to give to

vessels wholly belonging to foreigners and navigating the ocean an apparent

American ownership. This character has been so well simulated as to afford

them comparative security in prosecuting the slave trade--a traffic

emphatically denounced in our statutes, regarded with abhorrence by our

citizens, and of which the effectual suppression is nowhere more sincerely

desired than in the United States. These circumstances make it proper to

recommend to your early attention a careful revision of these laws, so that

without impeding the freedom and facilities of our navigation or impairing

an important branch of our industry connected with it the integrity and

honor of our flag may be carefully preserved. Information derived from our

consul at Havana showing the necessity of this was communicated to a

committee of the Senate near the close of the last session, but too late,

as it appeared, to be acted upon. It will be brought to your notice by the

proper Department, with additional communications from other sources.

The latest accounts from the exploring expedition represent it as

proceeding successfully in its objects and promising results no less useful

to trade and navigation than to science.

The extent of post-roads covered by mail service on the 1st of July last

was about 133,999 miles and the rate of annual transportation upon them

34,496,878 miles. The number of post-offices on that day was 12,780 and on

the 30th ultimo 13,028.

The revenue of the Post-Office Department for the year ending with the 30th

of June last was $4,476,638, exhibiting an increase over the preceding year

of $241,560. The engagements and liabilities of the Department for the same

period are $4,624,117.

The excess of liabilities over the revenue for the last two years has been

met out of the surplus which had previously accumulated. The cash on hand

on the 30th ultimo was about $206,701.95 and the current income of the

Department varies very little from the rate of current expenditures. Most

of the service suspended last year has been restored, and most of the new

routes established by the act of 7th July, 1838, have been set in

operation, at an annual cost of $136,963. Notwithstanding the pecuniary

difficulties of the country, the revenue of the Department appears to be

increasing, and unless it shall be seriously checked by the recent

suspension of payment by so many of the banks it will be able not only to

maintain the present mail service, but in a short time to extend it. It is

gratifying to witness the promptitude and fidelity with which the agents of

this Department in general perform their public duties.

Some difficulties have arisen in relation to contracts for the

transportation of the mails by railroad and steamboat companies. It appears

that the maximum of compensation provided by Congress for the

transportation of the mails upon railroads is not sufficient to induce some

of the companies to convey them at such hours as are required for the

accommodation of the public. It is one of the most important duties of the

General Government to provide and maintain for the use of the people of the

States the best practicable mail establishment. To arrive at that end it is

indispensable that the Post-Office Department shall be enabled to control

the hours at which the mails shall be carried over railroads, as it now

does over all other roads. Should serious inconveniences arise from the

inadequacy of the compensation now provided by law, or from unreasonable

demands by any of the railroad companies, the subject is of such general

importance as to require the prompt attention of Congress.

In relation to steamboat lines, the most efficient remedy is obvious and

has been suggested by the Postmaster-General. The War and Navy Departments

already employ steamboats in their service; and although it is by no means

desirable that the Government should undertake the transportation of

passengers or freight as a business, there can be no reasonable objection

to running boats, temporarily, whenever it may be necessary to put down

attempts at extortion, to be discontinued as soon as reasonable contracts

can be obtained.

The suggestions of the Postmaster-General relative to the inadequacy of the

legal allowance to witnesses in cases of prosecutions for mail depredations

merit your serious consideration. The safety of the mails requires that

such prosecutions shall be efficient, and justice to the citizen whose time

is required to be given to the public demands not only that his expenses

shall be paid, but that he shall receive a reasonable compensation.

The reports from the War, Navy, and Post-Office Departments will accompany

this communication, and one from the Treasury Department will be presented

to Congress in a few days.

For various details in respect to the matters in charge of these

Departments I would refer you to those important documents, satisfied that

you will find in them many valuable suggestions which will be found well

deserving the attention of the Legislature.

From a report made in December of last year by the Secretary of State to

the Senate, showing the trial docket of each of the circuit courts and the

number of miles each judge has to travel in the performance of his duties,

a great inequality appears in the amount of labor assigned to each judge.

The number of terms to be held in each of the courts composing the ninth

circuit, the distances between the places at which they sit and from thence

to the seat of Government, are represented to be such as to render it

impossible for the judge of that circuit to perform in a manner

corresponding with the public exigencies his term and circuit duties. A

revision, therefore, of the present arrangement of the circuit seems to be

called for and is recommended to your notice.

I think it proper to call your attention to the power assumed by

Territorial legislatures to authorize the issue of bonds by corporate

companies on the guaranty of the Territory. Congress passed a law in 1836

providing that no act of a Territorial legislature incorporating banks

should have the force of law until approved by Congress, but acts of a very

exceptionable character previously passed by the legislature of Florida

were suffered to remain in force, by virtue of which bonds may be issued to

a very large amount by those institutions upon the faith of the Territory.

A resolution, intending to be a joint one, passed the Senate at the same

session, expressing the sense of Congress that the laws in question ought

not to be permitted to remain in force unless amended in many material

respects; but it failed in the House of Representatives for want of time,

and the desired amendments have not been made. The interests involved are

of great importance, and the subject deserves your early and careful

attention.

The continued agitation of the question relative to the best mode of

keeping and disbursing the public money still injuriously affects the

business of the country. The suspension of specie payments in 1837 rendered

the use of deposit banks as prescribed by the act of 1836 a source rather

of embarrassment than aid, and of necessity placed the custody of most of

the public money afterwards collected in charge of the public officers. The

new securities for its safety which this required were a principal cause of

my convening an extra session of Congress, but in consequence of a

disagreement between the two Houses neither then nor at any subsequent

period has there been any legislation on the subject. The effort made at

the last session to obtain the authority of Congress to punish the use of

public money for private purposes as a crime a measure attended under other

governments with signal advantage--was also unsuccessful, from diversities

of opinion in that body, notwithstanding the anxiety doubtless felt by it

to afford every practicable security. The result of this is still to leave

the custody of the public money without those safeguards which have been

for several years earnestly desired by the Executive, and as the remedy is

only to be found in the action of the Legislature it imposes on me the duty

of again submitting to you the propriety of passing a law providing for the

safe-keeping of the public moneys, and especially to ask that its use for

private purposes by any officers intrusted with it may be declared to be a

felony, punishable with penalties proportioned to the magnitude of the

offense.

These circumstances, added to known defects in the existing laws and

unusual derangement in the general operations of trade, have during the

last three years much increased the difficulties attendant on the

collection, keeping, and disbursement of the revenue, and called forth

corresponding exertions from those having them in charge. Happily these

have been successful beyond expectation. Vast sums have been collected and

disbursed by the several Departments with unexpected cheapness and ease,

transfers have been readily made to every part of the Union, however

distant, and defalcations have been far less than might have been

anticipated from the absence of adequate legal restraints. Since the

officers of the Treasury and Post-Office Departments were charged with the

custody of most of the public moneys received by them there have been

collected $66,000,000, and, excluding the case of the late collector at New

York, the aggregate amount of losses sustained in the collection can not,

it is believed, exceed $60,000. The defalcation of the late collector at

that city, of the extent and circumstances of which Congress have been

fully informed, ran through all the modes of keeping the public money that

have been hitherto in use, and was distinguished by an aggravated disregard

of duty that broke through the restraints of every system, and can not,

therefore, be usefully referred to as a test of the comparative safety of

either. Additional information will also be furnished by the report of the

Secretary of the Treasury, in reply to a call made upon that officer by the

House of Representatives at the last session requiring detailed information

on the subject of defaults by public officers or agents under each

Administration from 1789 to 1837. This document will be submitted to you in

a few days. The general results (independent of the Post-Office, which is

kept separately and will be stated by itself), so far as they bear upon

this subject, are that the losses which have been and are likely to be

sustained by any class of agents have been the greatest by banks,

including, as required in the resolution, their depreciated paper received

for public dues; that the next largest have been by disbursing officers,

and the least by collectors and receivers. If the losses on duty bonds are

included, they alone will be threefold those by both collectors and

receivers. Our whole experience, therefore, furnishes the strongest

evidence that the desired legislation of Congress is alone wanting to

insure in those operations the highest degree of security and facility.

Such also appears to have been the experience of other nations. From the

results of inquiries made by the Secretary of the Treasury in regard to the

practice among them I am enabled to state that in twenty-two out of

twenty-seven foreign governments from which undoubted information has been

obtained the public moneys are kept in charge of public officers. This

concurrence of opinion in favor of that system is perhaps as great as

exists on any question of internal administration.

In the modes of business and official restraints on disbursing officers no

legal change was produced by the suspension of specie payments. The report

last referred to will be found to contain also much useful information in

relation to this subject.

I have heretofore assigned to Congress my reasons for believing that the

establishment of an independent National Treasury, as contemplated by the

Constitution, is necessary to the safe action of the Federal Government.

The suspension of specie payments in 1837 by the banks having the custody

of the public money showed in so alarming a degree our dependence on those

institutions for the performance of duties required by law that I then

recommended the entire dissolution of that connection. This recommendation

has been subjected, as I desired it should be, to severe scrutiny and

animated discussion, and I allow myself to believe that notwithstanding the

natural diversities of opinion which may be anticipated on all subjects

involving such important considerations, it has secured in its favor as

general a concurrence of public sentiment as could be expected on one of

such magnitude.

Recent events have also continued to develop new objections to such a

connection. Seldom is any bank, under the existing system and practice,

able to meet on demand all its liabilities for deposits and notes in

circulation. It maintains specie payments and transacts a profitable

business only by the confidence of the public in its solvency, and whenever

this is destroyed the demands of its depositors and note holders, pressed

more rapidly than it can make collections from its debtors, force it to

stop payment. This loss of confidence, with its consequences, occurred in

1837, and afforded the apology of the banks for their suspension. The

public then acquiesced in the validity of the excuse, and while the State

legislatures did not exact from them their forfeited charters, Congress, in

accordance with the recommendation of the Executive, allowed them time to

pay over the public money they held, although compelled to issue Treasury

notes to supply the deficiency thus created.

It now appears that there are other motives than a want of public

confidence under which the banks seek to justify themselves in a refusal to

meet their obligations. Scarcely were the country and Government relieved

in a degree from the difficulties occasioned by the general suspension of

1837 when a partial one, occurring within thirty months of the former,

produced new and serious embarrassments, though it had no palliation in

such circumstances as were alleged in justification of that which had

previously taken place. There was nothing in the condition of the country

to endanger a well-managed banking institution; commerce was deranged by no

foreign war; every branch of manufacturing industry was crowned with rich

rewards, and the more than usual abundance of our harvests, after supplying

our domestic wants, had left our granaries and storehouses filled with a

surplus for exportation. It is in the midst of this that an irredeemable

and depreciated paper currency is entailed upon the people by a large

portion of the banks. They are not driven to it by the exhibition of a loss

of public confidence or of a sudden pressure from their depositors or note

holders, but they excuse themselves by alleging that the current of

business and exchange with foreign countries, which draws the precious

metals from their vaults, would require in order to meet it a larger

curtailment of their loans to a comparatively small portion of the

community than it will be convenient for them to bear or perhaps safe for

the banks to exact. The plea has ceased to be one of necessity. Convenience

and policy are now deemed sufficient to warrant these institutions in

disregarding their solemn obligations. Such conduct is not merely an injury

to individual creditors, but it is a wrong to the whole community, from

whose liberality they hold most valuable privileges, whose rights they

violate, whose business they derange, and the value of whose property they

render unstable and insecure. It must be evident that this new ground for

bank suspensions, in reference to which their action is not only

disconnected with, but wholly independent of, that of the public, gives a

character to their suspensions more alarming than any which they exhibited

before, and greatly increases the impropriety of relying on the banks in

the transactions of the Government.

A large and highly respectable portion of our banking institutions are, it

affords me unfeigned pleasure to state, exempted from all blame on account

of this second delinquency. They have, to their great credit, not only

continued to meet their engagements, but have even repudiated the grounds

of suspension now resorted to. It is only by such a course that the

confidence and good will of the community can be preserved, and in the

sequel the best interests of the institutions themselves promoted.

New dangers to the banks are also daily disclosed from the extension of

that system of extravagant credit of which they are the pillars. Formerly

our foreign commerce was principally rounded on an exchange of commodities,

including the precious metals, and leaving in its transactions but little

foreign debt. Such is not now the case. Aided by the facilities afforded by

the banks, mere credit has become too commonly the basis of trade. Many of

the banks themselves, not content with largely stimulating this system

among others, have usurped the business, while they impair the stability,

of the mercantile community; they have become borrowers instead of lenders;

they establish their agencies abroad; they deal largely in stocks and

merchandise; they encourage the issue of State securities until the foreign

market is glutted with them; and, unsatisfied with the legitimate use of

their own capital and the exercise of their lawful privileges, they raise

by large loans additional means for every variety of speculation. The

disasters attendant on this deviation from the former course of business in

this country are now shared alike by banks and individuals to an extent of

which there is perhaps no previous example in the annals of our country. So

long as a willingness of the foreign lender and a sufficient export of our

productions to meet any necessary partial payments leave the flow of credit

undisturbed all appears to be prosperous, but as soon as it is checked by

any hesitation abroad or by an inability to make payment there in our

productions the evils of the system are disclosed. The paper currency,

which might serve for domestic purposes, is useless to pay the debt due in

Europe. Gold and silver are therefore drawn in exchange for their notes

from the banks. To keep up their supply of coin these institutions are

obliged to call upon their own debtors, who pay them principally in their

own notes, which are as unavailable to them as they are to the merchants to

meet the foreign demand. The calls of the banks, therefore, in such

emergencies of necessity exceed that demand, and produce a corresponding

curtailment of their accommodations and of the currency at the very moment

when the state of trade renders it most inconvenient to be borne. The

intensity of this pressure on the community is in proportion to the

previous liberality of credit and consequent expansion of the currency.

Forced sales of property are made at the time when the means of purchasing

are most reduced, and the worst calamities to individuals are only at last

arrested by an open violation of their obligations by the banks--a refusal

to pay specie for their notes and an imposition upon the community of a

fluctuating and depreciated currency.

These consequences are inherent in the present system. They are not

influenced by the banks being large or small, created by National or State

Governments. They are the results of the irresistible laws of trade or

credit. In the recent events, which have so strikingly illustrated the

certain effects of these laws, we have seen the bank of the largest capital

in the Union, established under a national charter, and lately

strengthened, as we were authoritatively informed, by exchanging that for a

State charter with new and unusual privileges--in a condition, too, as it

was said, of entire soundness and great prosperity--not merely unable to

resist these effects, but the first to yield to them.

Nor is it to be overlooked that there exists a chain of necessary

dependence among these institutions which obliges them to a great extent to

follow the course of others, notwithstanding its injustice to their own

immediate creditors or injury to the particular community in which they are

placed. This dependence of a bank, which is in proportion to the extent of

its debts for circulation and deposits, is not merely on others in its own

vicinity, but on all those which connect it with the center of trade.

Distant banks may fail without seriously affecting those in our principal

commercial cities, but the failure of the latter is felt at the extremities

of the Union. The suspension at New York in 1837 was everywhere, with very

few exceptions, followed as soon as it was known. That recently at

Philadelphia immediately affected the banks of the South and West in a

similar manner. This dependence of our whole banking system on the

institutions in a few large cities is not found in the laws of their

organization, but in those of trade and exchange. The banks at that center,

to which currency flows and where it is required in payments for

merchandise, hold the power of controlling those in regions whence it

comes, while the latter possess no means of restraining them; so that the

value of individual property and the prosperity of trade through the whole

interior of the country are made to depend on the good or bad management of

the banking institutions in the great seats of trade on the seaboard.

But this chain of dependence does not stop here. It does not terminate at

Philadelphia or New York. It reaches across the ocean and ends in London,

the center of the credit system. The same laws of trade which give to the

banks in our principal cities power over the whole banking system of the

United States subject the former, in their turn, to the money power in

Great Britain. It is not denied that the suspension of the New York banks

in 1837, which was followed in quick succession throughout the Union, was

produced by an application of that power, and it is now alleged, in

extenuation of the present condition of so large a portion of our banks,

that their embarrassments have arisen from the same cause.

From this influence they can not now entirely escape, for it has its origin

in the credit currencies of the two countries; it is strengthened by the

current of trade and exchange which centers in London, and is rendered

almost irresistible by the large debts contracted there by our merchants,

our banks, and our States. It is thus that an introduction of a new bank

into the most distant of our villages places the business of that village

within the influence of the money power in England; it is thus that every

new debt which we contract in that country seriously affects our own

currency and extends over the pursuits of our citizens its powerful

influence. We can not escape from this by making new banks, great or small,

State or national. The same chains which bind those now existing to the

center of this system of paper credit must equally fetter every similar

institution we create. It is only by the extent to which this system has

been pushed of late that we have been made fully aware of its irresistible

tendency to subject our own banks and currency to a vast controlling power

in a foreign lad, and it adds a new argument to those which illustrate

their precarious situation.. Endangered in the first place by their own

mismanagement and again by the conduct of every institution which connects

them with the center of trade in our own country, they are yet subjected

beyond all this to the effect of whatever measures policy, necessity, or

caprice may induce those who control the credits of England to resort to. I

mean not to comment upon these measures, present or past, and much less to

discourage the prosecution of fair commercial dealing between the two

countries, based on reciprocal benefits; but it having now been made

manifest that the power of inflicting these and similar injuries is by the

resistless law of a credit currency and credit trade equally capable of

extending their consequences through all the ramifications of our banking

system, and by that means indirectly obtaining, particularly when our banks

are used as depositories of the public moneys, a dangerous political

influence in the United States, I have deemed it my duty to bring the

subject to your notice and ask for it your serious consideration.

Is an argument required beyond the exposition of these facts to show the

impropriety of using our banking institutions as depositories of the public

money? Can we venture not only to encounter the risk of their individual

and mutual mismanagement, but at the same time to place our foreign and

domestic policy entirely under the control of a foreign moneyed interest?

To do so is to impair the independence of our Government, as the present

credit system has already impaired the independence of our banks; it is to

submit all its important operations, whether of peace or war, to be

controlled or thwarted, at first by our own banks and then by a power

abroad greater than themselves. I can not bring myself to depict the

humiliation to which this Government and people might be sooner or later

reduced if the means for defending their rights are to be made dependent

upon those who may have the most powerful of motives to impair them.

Nor is it only in reference to the effect of this state of things on the

independence of our Government or of our banks that the subject presents

itself for consideration; it is to be viewed also in its relations to the

general trade of our country. The time is not long passed when a deficiency

of foreign crops was thought to afford a profitable market for the surplus

of our industry, but now we await with feverish anxiety the news of the

English harvest, not so much from motives of commendable sympathy, but

fearful lest its anticipated failure should narrow the field of credit

there. Does not this speak volumes to the patriot? Can a system be

beneficent, wise, or just which creates greater anxiety for interests

dependent on foreign credit than for the general prosperity of our own

country and the profitable exportation of the surplus produce of our

labor?

The circumstances to which I have thus adverted appear to me to afford

weighty reasons, developed by late events, to be added to those which I

have on former occasions offered when submitting to your better knowledge

and discernment the propriety of separating the custody of the public money

from banking institutions. Nor has anything occurred to lessen, in my

opinion, the force of what has been heretofore urged. The only ground on

which that custody can be desired by the banks is the profitable use which

they may make of the money. Such use would be regarded in individuals as a

breach of trust or a crime of great magnitude, and yet it may be reasonably

doubted whether, first and last, it is not attended with more mischievous

consequences when permitted to the former than to the latter. The practice

of permitting the public money to be used by its keepers, as here, is

believed to be peculiar to this country and to exist scarcely anywhere

else. To procure it here improper influences are appealed to, unwise

connections are established between the Government and vast numbers of

powerful State institutions, other motives than the public good are brought

to bear both on the executive and legislative departments, and selfish

combinations leading to special legislation are formed. It is made the

interest of banking institutions and their stockholders throughout the

Union to use their exertions for the increase of taxation and the

accumulation of a surplus revenue, and while an excuse is afforded the

means are furnished for those excessive issues which lead to extravagant

trading and speculation and are the forerunners of a vast debt abroad and a

suspension of the banks at home.

Impressed, therefore, as I am with the propriety of the funds of the

Government being withdrawn from the private use of either banks or

individuals, and the public money kept by duly appointed public agents, and

believing as I do that such also is the judgment which discussion,

reflection, and experience have produced on the public mind, I leave the

subject with you. It is, at all events, essential to the interests of the

community and the business of the Government that a decision should be

made.

Most of the arguments that dissuade us from employing banks in the custody

and disbursement of the public money apply with equal force to the receipt

of their notes for public dues. The difference is only in form. In one

instance the Government is a creditor for its deposits, and in the other

for the notes it holds. They afford the same opportunity for using the

public moneys, and equally lead to all the evils attendant upon it, since a

bank can as safely extend its discounts on a deposit of its notes in the

hands of a public officer as on one made in its own vaults. On the other

hand, it would give to the Government no greater security, for in case of

failure the claim of the note holder would be no better than that of a

depositor.

I am aware that the danger of inconvenience to the public and unreasonable

pressure upon sound banks have been urged as objections to requiring the

payment of the revenue in gold and silver. These objections have been

greatly exaggerated. From the best estimates we may safely fix the amount

of specie in the country at $85,000,000, and the portion of that which

would be employed at any one time in the receipts and disbursements of the

Government, even if the proposed change were made at once, would not, it is

now, after fuller investigation, believed exceed four or five millions. If

the change were gradual, several years would elapse before that sum would

be required, with annual opportunities in the meantime to alter the law

should experience prove it to be oppressive or inconvenient. The portions

of the community on whose business the change would immediately operate are

comparatively small, nor is it believed that its effect would be in the

least unjust or injurious to them.

In the payment of duties, which constitute by far the greater portion of

the revenue, a very large proportion is derived from foreign commission

houses and agents of foreign manufacturers, who sell the goods consigned to

them generally at auction, and after paying the duties out of the avails

remit the rest abroad in specie or its equivalent. That the amount of

duties should in such cases be also retained in specie can hardly be made a

matter of complaint. Our own importing merchants, by whom the residue of

the duties is paid, are not only peculiarly interested in maintaining a

sound currency, which the measure in question will especially promote, but

are from the nature of their dealings best able to know when specie will be

needed and to procure it with the least difficulty or sacrifice. Residing,

too, almost universally in places where the revenue is received and where

the drafts used by the Government for its disbursements must concentrate,

they have every opportunity to obtain and use them in place of specie

should it be for their interest or convenience. Of the number of these

drafts and the facilities they may afford, as well as of the rapidity with

which the public funds are drawn and disbursed, an idea may be formed from

the fact that of nearly $20,000,000 paid to collectors and receivers during

the present year the average amount in their hands at any one time has not

exceeded a million and a half, and of the fifteen millions received by the

collector of New York alone during the present year the average amount held

by him subject to draft during each week has been less than half a

million.

The ease and safety of the operations of the Treasury in keeping the public

money are promoted by the application of its own drafts to the public dues.

The objection arising from having them too long outstanding might be

obviated and they yet made to afford to merchants and banks holding them an

equivalent for specie, and in that way greatly lessen the amount actually

required. Still less inconvenience will attend the requirement of specie in

purchases of public lands. Such purchases, except when made on speculation,

are in general but single transactions, rarely repeated by the same person;

and it is a fact that for the last year and a half, during which the notes

of sound banks have been received, more than a moiety of these payments has

been voluntarily made in specie, being a larger proportion than would have

been required in three years under the graduation proposed.

It is, moreover, a principle than which none is better settled by

experience that the supply of the precious metals will always be found

adequate to the uses for which they are required. They abound in countries

where no other currency is allowed. In our own States, where small notes

are excluded, gold and silver supply their place. When driven to their

hiding places by bank suspensions, a little firmness in the community soon

restores them in a sufficient quantity for ordinary purposes. Postage and

other public dues have been collected in coin without serious inconvenience

even in States where a depreciated paper currency has existed for years,

and this, with the aid of Treasury notes for a part of the time, was done

without interruption during the suspension of 1837. At the present moment

the receipts and disbursements of the Government are made in legal currency

in the largest portion of the Union. No one suggests a departure from this

rule, and if it can now be successfully carried out it will be surely

attended with even less difficulty when bank notes are again redeemed in

specie.

Indeed, I can not think that a serious objection would anywhere be raised

to the receipt and payment of gold and silver in all public transactions

were it not from an apprehension that a surplus in the Treasury might

withdraw a large portion of it from circulation and lock it up unprofitably

in the public vaults. It would not, in my opinion, be difficult to prevent

such an inconvenience from occurring; but the authentic statements which I

have already submitted to you in regard to the actual amount in the public

Treasury at any one time during the period embraced in them and the little

probability of a different state of the Treasury for at least some years to

come seem to render it unnecessary to dwell upon it. Congress, moreover, as

I have before observed, will in every year have an opportunity to guard

against it should the occurrence of any circumstances lead us to apprehend

injury from this source. Viewing the subject in all its aspects, I can not

believe that any period will be more auspicious than the present for the

adoption of all measures necessary to maintain the sanctity of our own

engagements and to aid in securing to the community that abundant supply of

the precious metals which adds so much to their prosperity and gives such

increased stability to all their dealings.

In a country so commercial as ours banks in some form will probably always

exist, but this serves only to render it the more incumbent on us,

notwithstanding the discouragements of the past, to strive in our

respective stations to mitigate the evils they produce; to take from them

as rapidly as the obligations of public faith and a careful consideration

of the immediate interests of the community will permit the unjust

character of monopolies; to check, so far as may be practicable, by prudent

legislation those temptations of interest and those opportunities for their

dangerous indulgence which beset them on every side, and to confine them

strictly to the performance of their paramount duty--that of aiding the

operations of commerce rather than consulting their own exclusive

advantage. These and other salutary reforms may, it is believed, be

accomplished without the violation of any of the great principles of the

social compact, the observance of which is indispensable to its existence,

or interfering in any way with the useful and profitable employment of real

capital.

Institutions so framed have existed and still exist elsewhere, giving to

commercial intercourse all necessary facilities without inflating or

depreciating the currency or stimulating speculation. Thus accomplishing

their legitimate ends, they have gained the surest guaranty for their

protection and encouragement in the good will of the community. Among a

people so just as ours the same results could not fail to attend a similar

course. The direct supervision of the banks belongs, from the nature of our

Government, to the States who authorize them. It is to their legislatures

that the people must mainly look for action on that subject. But as the

conduct of the Federal Government in the management of its revenue has also

a powerful, though less immediate, influence upon them, it becomes our duty

to see that a proper direction is given to it. While the keeping of the

public revenue in a separate and independent treasury and of collecting it

in gold and silver will have a salutary influence on the system of paper

credit with which all banks are connected, and thus aid those that are

sound and well managed, it will at the same time sensibly check such as are

otherwise by at once withholding the means of extravagance afforded by the

public funds and restraining them from excessive issues of notes which they

would be constantly called upon to redeem.

I am aware it has been urged that this control may be best attained and

exerted by means of a national bank. The constitutional objections which I

am well known to entertain would prevent me in any event from proposing or

assenting to that remedy; but in addition to this, I can not after past

experience bring myself to think that it can any longer be extensively

regarded as effective for such a purpose. The history of the late national

bank, through all its mutations, shows that it was not so. On the contrary,

it may, after a careful consideration of the subject, be, I think, safely

stated that at every period of banking excess it took the lead; that in

1817 and 1818, in 1823, in 1831, and in 1834 its vast expansions, followed

by distressing contractions, led to those of the State institutions. It

swelled and maddened the tides of the banking system, but seldom allayed or

safely directed them. At a few periods only was a salutary control

exercised, but an eager desire, on the contrary, exhibited for profit in

the first place; and if afterwards its measures were severe toward other

institutions, it was because its own safety compelled it to adopt them. It

did not differ from them in principle or in form; its measures emanated

from the same spirit of gain; it felt the same temptation to overissues; it

suffered from and was totally unable to avert those inevitable laws of

trade by which it was itself affected equally with them; and at least on

one occasion, at an early day, it was saved only by extraordinary exertions

from the same fate that attended the weakest institution it professed to

supervise. In 1837 it failed equally with others in redeeming its notes

(though the two years allowed by its charter for that purpose had not

expired), a large amount of which remains to the present time outstanding.

It is true that, having so vast a capital and strengthened by the use of

all the revenues of the Government, it possessed more power; but while it

was itself by that circumstance freed from the control which all banks

require, its paramount object and inducement were left the same--to make

the most for its stockholders, not to regulate the currency of the country.

Nor has it, as far as we are advised, been found to be greatly otherwise

elsewhere. The national character given to the Bank of England has not

prevented excessive fluctuations in their currency, and it proved unable to

keep off a suspension of specie payments, which lasted for nearly a quarter

of a century. And why should we expect it to be otherwise? A national

institution, though deriving its charter from a different source than the

State banks, is yet constituted upon the same principles, is conducted by

men equally exposed to temptation, and is liable to the same disasters,

with the additional disadvantage that its magnitude occasions an extent of

confusion and distress which the mismanagement of smaller institutions

could not produce. It can scarcely be doubted that the recent suspension of

the United State Bank of Pennsylvania, of which the effects are felt not in

that State alone, but over half the Union, had its origin in a course of

business commenced while it was a national institution, and there is no

good reason for supposing that the same consequences would not have

followed had it still derived its powers from the General Government. It is

in vain, when the influences and impulses are the same, to look for a

difference in conduct or results. By such creations we do, therefore, but

increase the mass of paper credit and paper currency, without checking

their attendant evils and fluctuations. The extent of power and the

efficiency of organization which we give, so far from being beneficial, are

in practice positively injurious. They strengthen the chain of dependence

throughout the Union, subject all parts more certainly to common disaster,

and bind every bank more effectually in the first instance to those of our

commercial cities, and in the end to a foreign power. In a word, I can not

but believe that, with the full understanding of the operations of our

banking system which experience has produced, public sentiment is not less

opposed to the creation of a national bank for purposes connected with

currency and commerce than for those connected with the fiscal operations

of the Government.

Yet the commerce and currency of the country are suffering evils from the

operations of the State banks which can not and ought not to be overlooked.

By their means we have been flooded with a depreciated paper, which it was

evidently the design of the framers of the Constitution to prevent when

they required Congress to "Coin money and regulate the value of foreign

coins," and when they forbade the States "to coin money, emit bills of

credit, make anything but gold and silver a tender in payment of debts," or

"pass any law impairing the obligation of contracts." If they did not guard

more explicitly against the present state of things, it was because they

could not have anticipated that the few banks then existing were to swell

to an extent which would expel to so great a degree the gold and silver for

which they had provided from the channels of circulation, and fill them

with a currency that defeats the objects they had in view. The remedy for

this must chiefly rest with the States from whose legislation it has

sprung. No good that might accrue in a particular case front the exercise

of powers not obviously conferred on the General Government would authorize

its interference or justify a course that might in the slightest degree

increase at the expense of the States the power of the Federal authorities;

nor do I doubt that the States will apply the remedy. Within the last few

years events have appealed to them too strongly to be disregarded. They

have seen that the Constitution, though theoretically adhered to, is

subverted in practice; that while on the statute books there is no legal

tender but gold and silver, no law impairing the obligations of contracts,

yet that in point of fact the privileges conferred on banking corporations

have made their notes the currency of the country; that the obligations

imposed by these notes are violated under the impulses of interest or

convenience, and that the number and power of the persons connected with

these corporations or placed under their influence give them a fearful

weight when their interest is in opposition to the spirit of the

Constitution and laws. To the people it is immaterial whether these results

are produced by open violations of the latter or by the workings of a

system of which the result is the same. An inflexible execution even of the

existing statutes of most of the States would redress many evils now

endured, would effectually show the banks the dangers of mismanagement

which impunity encourages them to repeat, and would teach all corporations

the useful lesson that they are the subjects of the law and the servants of

the people. What is still wanting to effect these objects must be sought in

additional legislation, or, if that be inadequate, in such further

constitutional grants or restrictions as may bring us back into the path

from which we have so widely wandered.

In the meantime it is the duty of the General Government to cooperate with

the States by a wise exercise of its constitutional powers and the

enforcement of its existing laws. The extent to which it may do so by

further enactments I have already adverted to, and the wisdom of Congress

may yet enlarge them. But above all, it is incumbent upon us to hold erect

the principles of morality and law, constantly executing our own contracts

in accordance with the provisions of the Constitution, and thus serving as

a rallying point by which our whole country may be brought back to that

safe and honored standard.

Our people will not long be insensible to the extent of the burdens

entailed upon them by the false system that has been operating on their

sanguine, energetic, and industrious character, nor to the means necessary

to extricate themselves from these embarrassments. The weight which presses

upon a large portion of the people and the States is an enormous debt,

foreign and domestic. The foreign debt of our States, corporations, and men

of business can scarcely be less than $200,000,000, requiring more than

$10,000,000 a year to pay the interest. This sum has to be paid out of the

exports of the country, and must of necessity cut off imports to that

extent or plunge the country more deeply in debt from year to year. It is

easy to see that the increase of this foreign debt must augment the annual

demand on the exports to pay the interest, and to the same extent diminish

the imports, and in proportion to the enlargement of the foreign debt and

the consequent increase of interest must be the decrease of the import

trade. In lieu of the comforts which it now brings us we might have our.

gigantic banking institutions and splendid, but in many instances

profitless, railroads and canals absorbing to a great extent in interest

upon the capital borrowed to construct them the surplus fruits of national

industry for years to come, and securing to posterity no adequate return

for the comforts which the labors of their hands might otherwise have

secured. It is not by the increase of this debt that relief is to be

sought, but in its diminution. Upon this point there is, I am happy to say,

hope before us; not so much in the return of confidence abroad, which will

enable the States to borrow more money, as in a change of public feeling at

home, which prompts our people to pause in their career and think of the

means by which debts are to be paid before they are contracted. If we would

escape embarrassment, public and private, we must cease to run in debt

except for objects of necessity or such as will yield a certain return. Let

the faith of the States, corporations, and individuals already pledged be

kept with the most punctilious regard. It is due to our national character

as well as to justice that this should on the part of each be a fixed

principle of conduct. But it behooves us all to be more chary in pledging

it hereafter. By ceasing to run in debt and applying the surplus of our

crops and incomes to the discharge of existing obligations, buying less and

selling more, and managing all affairs, public and private, with strict

economy and frugality, we shall see our country soon recover from a

temporary depression, arising not from natural and permanent causes, but

from those I have enumerated, and advance with renewed vigor in her career

of prosperity.

Fortunately for us at this moment, when the balance of trade is greatly

against us and the difficulty of meeting it enhanced by the disturbed state

of our money affairs, the bounties of Providence have come to relieve us

from the consequences of past errors. A faithful application of the immense

results of the labors of the last season will afford partial relief for the

present, and perseverance in the same course will in due season accomplish

the rest. We have had full experience in times past of the extraordinary

results which can in this respect be brought about in a short period by the

united and well-directed efforts of a community like ours. Our surplus

profits, the energy and industry of our population, and the wonderful

advantages which Providence has bestowed upon our country in its climate,

its various productions, indispensable to other nations, will in due time

afford abundant means to perfect the most useful of those objects for which

the States have been plunging themselves of late in embarrassment and debt,

without imposing on ourselves or our children such fearful burdens.

But let it be indelibly engraved on our minds that relief is not to be

found in expedients. Indebtedness can not be lessened by borrowing more

money or by changing the form of the debt. The balance of trade is not to

be turned in our favor by creating new demands upon us abroad. Our currency

can not be improved by the creation of new banks or more issues from those

which now exist. Although these devices sometimes appear to give temporary

relief, they almost invariably aggravate the evil in the end. It is only by

retrenchment and reform--by curtailing public and private expenditures, by

paying our debts, and by reforming our banking system--that we are to

expect effectual relief, security for the future, and an enduring

prosperity. In shaping the institutions and policy of the General

Government so as to promote as far as it can with its limited powers these

important ends, you may rely on my most cordial cooperation.

That there should have been in the progress of recent events doubts in many

quarters and in some a heated opposition to every change can not surprise

us. Doubts are properly attendant on all reform, and it is peculiarly in

the nature of such abuses as we are now encountering to seek to perpetuate

their power by means of the influence they have been permitted to acquire.

It is their result, if not their object, to gain for the few an ascendency

over the many by securing to them a monopoly of the currency, the medium

through which most of the wants of mankind are supplied; to produce

throughout society a chain of dependence which leads all classes to look to

privileged associations for the means of speculation and extravagance; to

nourish, in preference to the manly virtues that give dignity to human

nature, a craving desire for luxurious enjoyment and sudden wealth, which

renders those who seek them dependent on those who supply them; to

substitute for republican simplicity and economical habits a sickly

appetite for effeminate indulgence and an imitation of that reckless

extravagance which impoverished and enslaved the industrious people of

foreign lands, and at last to fix upon us, instead of those equal political

rights the acquisition of which was alike the object and supposed reward of

our Revolutionary struggle, a system of exclusive privileges conferred by

partial legislation. To remove the influences which had thus gradually

grown up among us, to deprive them of their deceptive advantages, to test

them by the light of wisdom and truth, to oppose the force which they

concentrate in their sup-port--all this was necessarily the work of time,

even among a people so enlightened and pure as that of the United States.

In most other countries, perhaps, it could only be accomplished through

that series of revolutionary movements which are too often found necessary

to effect any great and radical reform; but it is the crowning merit of our

institutions that they create and nourish in the vast majority of our

people a disposition and a power peaceably to remedy abuses which have

elsewhere caused the effusion of rivers of blood and the sacrifice of

thousands of the human race. The result thus far is most honorable to the

self-denial, the intelligence, and the patriotism of our citizens; it

justifies the confident hope that they will carry through the reform which

has been so well begun, and that they will go still further than they have

yet gone in illustrating the important truth that a people as free and

enlightened as ours will, whenever it becomes necessary, show themselves to

be indeed capable of self-government by voluntarily adopting appropriate

remedies for every abuse, and submitting to temporary sacrifices, however

great, to insure their permanent welfare.

My own exertions for the furtherance of these desirable objects have been

bestowed throughout my official career with a zeal that is nourished by

ardent wishes for the welfare of my country, and by an unlimited reliance

on the wisdom that marks its ultimate decision on all great and

controverted questions. Impressed with the solemn obligations imposed upon

me by the Constitution, desirous also of laying before my fellow-citizens,

with whose confidence and support I have been so highly honored, such

measures as appear to me conducive to their prosperity, and anxious to

submit to their fullest consideration the grounds upon which my opinions

are formed, I have on this as on preceding occasions freely offered my

views on those points of domestic policy that seem at the present time most

prominently to require the action of the Government. I know that they will

receive from Congress that full and able consideration which the importance

of the subjects merits, and I can repeat the assurance heretofore made that

I shall cheerfully and readily cooperate with you in every measure that

will tend to promote the welfare of the Union.

M. VAN BUREN

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