No one contradicted or answered Hanson. The House wavered in incapacity that suggested dissolution. At last Richard M. Johnson, in order to force a decision right or wrong, moved the previous question and brought the House to a vote. Then the majority turned against Calhoun, as they had before turned against Dallas, and rejected the bill by a vote of one hundred and four to forty-nine.
The Southern preference for government paper currency lay at the bottom of Calhoun’s scheme as of Jefferson’s, and seemed to Dallas to combine ignorance with dishonesty. Treasury notes bearing interest could not be made to serve as a currency, and were useless as a foundation for government paper. “What use is there,” asked Ingersoll,[364] “in such a mass of banking machinery to give circulation to some millions of Treasury notes? Why not issue them at once without this unwieldy, this unnecessary medium?” Yet when Bolling Hall of Georgia, in pursuance of Macon’s aphorism that “paper money never was beat,” moved, November 12, Resolutions authorizing the issue of Treasury notes as legal tender, the House refused to consider it by a vote of ninety-five to forty-two. Eppes did not vote; Calhoun voted against it, and of the twenty-five Southern members who supported it Macon and Stanford were the most prominent.
Nothing could be plainer than that the House must ultimately come to inconvertible government paper, whether issued by the Treasury or by a Bank. Dallas, Eppes, and Calhoun were all agreed on that point, if on no other; but after Congress had sat two months and a half, the House was no nearer a decision than when it met. The Federalists, voting at one time with Calhoun, at another with Dallas, were able to paralyze action. Eppes wrote to Dallas, December 2, inviting further information; and Dallas wrote back the same day, recounting the needs of the Treasury for the current month, merely on account of the national debt. Dallas reported that $5,726,000 in Treasury notes and dividends were due, or would fall due by January 1; and that including unavailable bank-credits, and subject to possible contingencies, the Treasury might contain resources to meet these demands to the amount of $3,972,000.[365] Eppes could do no more for immediate relief than report a bill for the issue of some ten millions more of interest-bearing Treasury notes, which was passed without debate and became law, December 26, without improving the situation.
The House also passed the heavy tax-bills without much opposition except from Federalists who wished to stop military operations on the part of the government. Between thirty and forty members, or about one half of the Federalists, carried their opposition to that point. The bill raising the direct tax to six million dollars passed the House, December 22, by a vote of one hundred and six to fifty-three, and passed the Senate, January 5, 1815, by twenty-three to seven. Dallas and Eppes hoped to raise about twenty million dollars through the new taxation, or twice what had been previously attempted. Jefferson held that these taxes could not be paid, and expressed his opinion without reserve.
“If anything could revolt our citizens against the war,” wrote Jefferson, November 28,[366] “it would be the extravagance with which they are about to be taxed.... The taxes proposed cannot be paid. How can a people who cannot get fifty cents a bushel for their wheat, while they pay twelve dollars a bushel for their salt, pay five times the amount of taxes they ever paid before? Yet this will be the case in all the States south of the Potomac.”
If any conclusion was intended to be drawn from the official return[367] sent to Congress, October 13, of internal taxes received to that date in each State, the evil predicted by Jefferson seemed already to exist. In Massachusetts, of taxes to the amount of $200,000, accrued for the first two quarters of the year, $170,000 had been received before October 10. In New York $393,000 had accrued, and $303,000 had been received; thus New York was nearly one fourth in arrears. Pennsylvania was worse; of $470,000 accrued the government had received $280,000,—leaving two fifths in arrears. Virginia was in somewhat worse condition than Pennsylvania; of $247,000 accrued $136,000 had been paid,—leaving four ninths in arrears.
Yet Pennsylvania and Virginia paid taxes in their own depreciated bank paper, while New York and New England paid chiefly in Treasury notes. The new taxes were still to be paid in the same medium, although the laws gave no express authority for it. In the next Congress, when the subject was discussed, Wright of Maryland said:[368] “When Congress passed the revenue laws and imposed the six million and three million land tax, did they contemplate the payment of specie? No! they knew the people had it not, and of course could not pay it.... Does any man doubt that Congress intended these taxes being paid in bank paper? Nay, has not the Secretary of the Treasury ... sealed this construction of the law by taking the bank paper in discharge for these taxes?” That the bank paper was worth less than Treasury notes was shown by the Southern States paying their taxes in such paper, when they might equally well have paid them in Treasury notes except for the difference in value.
The medium of depreciated and depreciating bank paper in which the taxes were to be paid, secured the States outside of New England from intolerable pressure by giving the means of indefinite depreciation; but to the government such a resource meant merely a larger variety of bank-credits, which were of no certain value even in the towns where the banks existed, and were of no value at all elsewhere. The burden of taxation would be thrown chiefly on New England; and if the Hartford Convention did nothing else, it was sure to take measures for sequestering the proceeds of taxation in New England for military purposes. The hope of restoring the finances by taxation was faint. Until the currency could be established and exchanges made secure, the government was helpless.
The House having broken down November 28, the Senate next took the matter in hand. Rufus King reported, December 2, a bill to incorporate a bank, which was in effect the bill recommended by Dallas. After a week’s consideration the Senate passed the bill, December 9, by the vote of seventeen to fourteen,—King and the Federalists, with four Republican senators, voting against it. The House referred it to the Committee of Ways and Means, which reported it, December 14, with amendments. The debate began December 23, and was cut short December 27 by C. J. Ingersoll, who by the close vote of seventy-two to seventy obliged the House to call for the previous question, and order the bill to its third reading. This energy was followed by a reaction; the bill was recommitted for amendment, again reported, and vehemently attacked.
Never had the House shown itself more feeble. The Federalists took the lead in debate; and January 2 Daniel Webster, in a speech that placed him at the head of the orators of the time, dictated the action of Congress:—