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

by Grover Cleveland

The people of the loyal States paid this direct tax as they bore other burdens in support of the Government, and I believe the taxpayers themselves are content. In the light of these considerations I am opposed to the payment of money from the Federal Treasury to enrich the treasuries of the States. Their funds should be furnished by their own citizens, and thus should be fostered the taxpayer's watchfulness of State expenditures and the taxpayer's jealous insistence upon the strict accountability of State officials. These elements of purity and strength in a State are not safely exchanged for the threatened demoralization and carelessness attending the custody and management of large gifts from the Federal Treasury.

The baneful effect of a surplus in the Treasury of the General Government is daily seen and felt. I do not think, however, that this surplus should be reduced or its contagion spread throughout the States by methods such as are provided in this bill.

There is still another objection to the bill, arising from what seems to me its unfairness and unjust discrimination.

In the case of proposed legislation of at least doubtful constitutionality, and based upon no legal right, the equities which recommend it should always be definite and clear.

The money appropriated by this bill is to be paid to the governors of the respective States and Territories in which it was collected, whether the same was derived through said States and Territories, or directly "from any of the citizens or inhabitants thereof or other persons;" and it is further provided that such sums as were collected in payment of this Federal tax through the instrumentality of the State or Territorial officials, and accounted for to the General Government by such States and Territories, are to be paid unconditionally to their governors, while the same collected in payment of said tax by the United States, or, in other words, by the Federal machinery created for that purpose, are to be held in trust by said States or Territories for the benefit of those paying the same.

I am unable to understand how this discrimination in favor of those who have made payment of this tax directly to the officers of the Federal Government, and against those who made such payments through State or Territorial agencies, can be defended upon fair and equitable principles. It was the General Government in every case which exacted this tax from its citizens and people in the different States and Territories, and to provide for reimbursement to a part of its citizens by the creation of a trust for their benefit, while the money exacted in payment of this tax from a far greater number is paid unconditionally into the State and Territorial treasuries, is an unjust and unfair proceeding, in which the Government should not be implicated.

It will hardly do to say that the States and Territories who are the recipients of these large gifts may be trusted to do justice to its citizens who originally paid the money. This can not be relied upon; nor should the Government lose sight of the equality of which it boasts, and, having entered upon the plan of reimbursement, abandon to other agencies the duty of just distribution, and thus incur the risk of becoming accessory to actual inequality and injustice.

If in defense of the plan proposed it is claimed that exact equality can not be reached in the premises, this may be readily conceded. The money raised by this direct tax was collected and expended twenty-seven years ago. Nearly a generation has passed away since that time. Even if distribution should be attempted by the States and Territories, as well as by the Government, the taxpayers in many cases are neither alive nor represented, and in many other cases if alive they can not be found. Fraudulent claims would often outrun honest applications and innumerable and bitter contests would arise between claimants.

Another difficulty in the way of doing perfect justice in the operation of this plan of reimbursement is found in the fact that the money to be appropriated therefor was contributed to the Federal Treasury for entirely different purposes by a generation many of whom were not born when the direct tax was levied and paid, who have no relation to said tax and can not share in its distribution. While they stand by and see the money they have been obliged to pay into the public Treasury professedly to meet present necessities expended to reimburse taxation long ago fairly, legally, and justly collected from others, they can not fail to see the unfairness of the transaction.

The existence of a surplus in the Treasury is no answer to these objections. It is still the people's money, and better use can be found for it than the distribution of it upon the plea of the reimbursement of ancient taxation. A more desirable plan to reduce and prevent the recurrence of a large surplus can easily be adopted—one that, instead of creating injustice and inequality, promotes justice and equality by leaving in the hands of the people and for their use the money not needed by the Government "to pay the debts and provide for the common defense and general welfare of the United States."