A Compilation of the Messages and Papers of the Presidents. Volume 8, part 3: Grover Cleveland, First Term

by Grover Cleveland

A majority of the States undertook the collection of their quotas and accounted for the amount thereof to the General Government by the payment of money or by setting off claims in their favor against the tax. Fifteen per cent of the amount of their respective quotas was retained as the allowance for collection and payment. In the Northern, or such as were then called the loyal States, nearly the entire quotas were collected and paid through State agencies. The money necessary for this purpose was generally collected from the citizens of the States with their other taxes, and in whatever manner their quotas may have been canceled, whether by the payment of money or setting off claims against the Government, it is safe to say, as a general proposition, that the people of these States have individually been obliged to pay the assessments made upon them on account of this direct tax and have intrusted it to their several States to be transmitted to the Federal Treasury.

In the Southern States, then in insurrection, whatever was actually realized in money upon this tax was collected directly by Federal officers without the interposition of State machinery, and a part of its quota has been credited to each of these States.

The entire amount applied upon this tax, including the 15 per cent for collection, was credited to the several States and Territories upon the books of the Treasury, whether collected through their instrumentalities or by Federal officers.

The sum credited to all the States was $17,359,685.51, which includes more than $2,000,000 on account of the 15 per cent allowed for collecting. Of the amount credited only about $2,300.000 is credited to the insurrectionary States. The amount uncollected of the twenty millions directed to be raised by this tax was $2,646,314.49, and nearly this entire sum remained due upon the quotas apportioned to these States.

In this condition of affairs the bill under consideration directs the Secretary of the Treasury "to credit to each State and Territory of the United States and the District of Columbia a sum equal to all collections, by set-off or otherwise, made from said States and Territories and the District of Columbia, or from any of the citizens or inhabitants thereof, or other persons, under the act of Congress approved August 5, 1861, and the amendatory acts thereto." An appropriation is also made of such a sum as may be necessary to reimburse each State, Territory, and the District of Columbia for all money found due to it under the provisions of the bill, and it is provided that all money still due to the United States on said direct tax shall be remitted and relinquished.

The conceded effect of this bill is to take from the money now in the Treasury the sum of more than $17,000,000, or, if the percentage allowed is not included, more than $15,000,000, and pay back to the respective States and Territories the sums they or their citizens paid more than twenty-five years ago upon a direct tax levied by the Government of the United States for its defense and safety.

It is my belief that this appropriation of the public funds is not within the constitutional power of the Congress. Under the limited and delegated authority conferred by the Constitution upon the General Government the statement of the purposes for which money may be lawfully raised by taxation in any form declares also the limit of the objects for which it may be expended.

All must agree that the direct tax was lawfully and constitutionally laid and that it was rightfully and correctly collected. It can not be claimed, therefore, nor is it pretended, that any debt arose against the Government and in favor of any State or individual by the exaction of this tax. Surely, then, the appropriation directed by this bill can not be justified as a payment of a debt of the United States.

The disbursement of this money clearly has no relation to the common defense. On the contrary, it is the repayment of money raised and long ago expended by the Government to provide for the common defense.

The expenditure can not properly be advocated on the ground that the general welfare of the United States is thereby provided for or promoted. This "general welfare of the United States," as used in the Constitution, can only justify appropriations for national objects and for purposes which have to do with the prosperity, the growth, the honor, or the peace and dignity of the nation.