In the Convention which framed the Constitution for a "more perfect Union," one of the greatest difficulties in agreeing upon its terms was found in the different interests of the States, but, among the compromises which were made, there prominently appears the purpose of a strict equality in the burdens to be borne, as well as the blessings to be enjoyed, by the people of the several States. For a long time after the formation of the "more perfect Union," but little capital was invested in manufacturing establishments; and, though in the early part of the present century the amount had considerably increased, the products were yet quite insufficient for the necessary supplies of our armies in the War of 1812. Government contracts, high prices, and to some extent, no doubt, patriotic impulses, led to the investment of capital in the articles required for the prosecution of the war. With the restoration of peace and the renewal of commerce, prices naturally declined, and it was represented that the investments made in manufacturing establishments were so unprofitable as to involve the ruin of those who had made them. The Congress of the United States, in 1816, from motives at least to be commended for their generosity, enacted a law to protect from the threatened ruin those of their countrymen who had employed their capital for purposes demanded by the general welfare and common defense. These good intentions, if it be conceded that the danger was real which it was designed to avert, were most unfortunate as the beginning of a policy the end of which was fraught with the greatest evils that have ever befallen the Union. By the Constitution of 1789 power was conferred upon Congress—

"To lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts, and excises shall be uniform throughout the United States."

In the exercise of this delegated trust, tariff laws were enacted, and had been in operation to the satisfaction of all parts of the Union, from the organization of the Government down to 1816; but throughout that period all of those laws were based upon the principle of duties for revenue. It was true, and of course it was known, that such duties would give incidental protection to any industry producing an article on which the duty was levied; but, while the money was collected for the purposes enumerated, and the rate kept down to the lowest revenue standard, the consumer had no cause to complain of the indirect benefit received by the manufacturer, and the history of the time shows that it produced no discontent. Not so with the tariff law of 1816: though sustained by men from all sections of the Union, and notably by so strict a constructionist as Mr. Calhoun, there were not wanting those who saw in it a departure from the limitation of the Constitution, and sternly opposed it as the usurpation of a power to legislate for the benefit of a class. The law derived much of its support from the assurance that it was only a temporary measure, and intended to shield those whose patriotism had exposed them to danger, thus presenting the not uncommon occurrence of a good case making a bad precedent. For the first time a tariff law had protection for its object, and for the first time it produced discontent. In the law there was nothing which necessarily gave to it or in its terms violated the obligation that duties should be uniform throughout the United States. The fact that it affected the sections differently was due to physical causes—that is, geographical differences. The streams of the Southern Atlantic States ran over wide plains into the sea; their last falls were remote from ocean navigation; and their people, almost exclusively agricultural, resided principally on this plain, and as near to the seaboard as circumstances would permit. In the Northern Atlantic States the highlands approached more nearly to the sea, and the rivers made their last leap near to harbors of commerce. Water-power being relied on before the steam-engine had been made, and ships the medium of commerce before railroads and locomotives were introduced, it followed that the staples of the Southern plains were economically sent to the water-power of the North to be manufactured. This remark, of course, applies to such articles as were not exported to foreign countries, and is intended to explain how the North became the seat of manufactures, and the South remained agricultural. From this it followed that legislation for the benefit of manufacturers became a Northern policy. It was not, as has been erroneously stated, because of the agricultural character of the Southern people, that they were opposed to the policy inaugurated by the tariff act of 1816. This is shown by the fact that anterior to that time they had been the friends of manufacturing industry, without reference to its location. As long as duties were imposed for revenue, so that the object was to supply the common Treasury, it had been cheerfully borne, and the agriculture of one section and the manufacturing of another were properly regarded as handmaids, and not unfrequently referred to as the means of strengthening and perpetuating the bonds by which the States were united. When duties were imposed, not for revenue, but as a bounty to a particular industry, it was regarded both as unjust and without warrant, expressed or implied, in the Constitution.

Then arose the controversy, quadrennially renewed and with increasing provocation, in 1820, in 1824, and in 1828—each stage intensifying the discontent, arising more from the injustice than the weight of the burden borne. It was not the twenty-shilling ship-money tax, but the violation of Magna Charta, which Hampden and his associates resisted. It was not the stamp duty nor the tea-tax, but the principle involved in taxation without representation, against which our colonial fathers took up arms. So the tariff act in 1828, known at the time as "the bill of abominations," was resisted by Southern representatives, because it was the invasion of private rights in violation of the compact by which the States were united. In the last stage of the proceeding, after the friends of the bill had advocated it as a measure for protecting capital invested in manufactures, Mr. Drayton, of South Carolina, moved to amend the title so that it should read, "An act to increase the duties upon certain imports, for the purpose of increasing the profits of certain manufacturers," and stated his purpose for desiring to amend the title to be that, upon some case which would arise under the execution of the law, an appeal might be made to the Supreme Court of the United States to test its constitutionality. Those who had passed the bill refused to allow the opportunity to test the validity of a tax imposed for the protection of a particular industry. Though the debates showed clearly enough the purpose to be to impose duties for protection, the phraseology of the law presented it as enacted to raise revenue, and therefore the victims of the discrimination were deprived of an appeal to the tribunal instituted to hear and decide on the constitutionality of a law.

South Carolina, oppressed by onerous duties and stung by the injustice of a refusal to allow her the ordinary remedy against unconstitutional legislation, asserted the right, as a sovereign State, to nullify the law. This conflict between the authority of the United States and one of the States threatened for a time such disastrous consequences as to excite intense feeling in all who loved the Union as the fraternal federation of equal States. Before an actual collision of arms occurred, Congress wisely adopted the compromise act of 1833. By that the fact of protection remained, but the principle of duties for revenue was recognized by a sliding scale of reduction, and it was hoped the question had been placed upon a basis that promised a permanent peace. The party of protective duties, however, came into power about the close of the period when the compromise measure had reached the result it proposed, and the contest was renewed with little faith on the part of the then dominant party and with more than all of its former bitterness. The cause of the departure from a sound principle of a tariff for revenue, which had prevailed during the first quarter of a century, and the adoption in 1816 of the rule imposing duties for protection, was stated by Mr. McDuffie to be that politicians and capitalists had seized upon the subject and used it for their own purposes—the former for political advancement, the latter for their own pecuniary profit—and that the question had become one of partisan politics and sectional enrichment. Contemporaneously with this theory of protective duties, arose the policy of making appropriations from the common Treasury for local improvements. As the Southern representatives were mainly those who denied the constitutional power to make such expenditures, it naturally resulted that the mass of those appropriations were made for Northern works. Now that direct taxes had in practice been so wholly abandoned as to be almost an obsolete idea, and now that the Treasury was supplied by the collection of duties upon imports, two golden streams flowed steadily to enrich the Northern and manufacturing region by the impoverishment of the Southern and agricultural section. In the train of wealth and demand for labor followed immigration and the more rapid increase of population in the Northern than in the Southern States. I do not deny the existence of other causes, such as the fertile region of the Northwest, the better harbors, the greater amount of shipping of the Northeastern States, and the prejudice of Europeans against contact with the negro race; but the causes I have first stated were, I think, the chief, and those only which are referable to the action of the General Government. It was not found that the possession of power mitigated the injustice of its use by the North, and discontent therefore was steadily accumulating, and, as stated in the beginning of this chapter, I think was due to class legislation in the form of protective duties and its consequences more than to any or all other causes combined. Turning from the consideration of this question in its sectional aspect, I now invite attention to its general effect upon the character of our institutions. If the common Treasury of the States had, as under the Confederation, been supplied by direct taxation, who can doubt that a rigid economy would have been the rule of the Government; that representatives would have returned to their tax-paying constituents to justify appropriations for which they had voted by showing that they were required for the general welfare, and were authorized by the Constitution under which they were acting? When the money was obtained by indirect taxation, so that but few could see the source from which it was derived, it readily followed that a constituency would ask, not why the representative had voted for the expenditure of money, but how much he had got for his own district, and perhaps he might have to explain why he did not get more. Is it doubtful that this would lead to extravagance, if not to corruption? Nothing could be more fatal to the independence of the people and the liberties of the States than dependence for support upon the public Treasury, whether it be in the form of subsidies, of bounties, or restrictions on trade for the benefit of special interests. In the decline of the Roman Empire, the epoch in which the hopelessness of renovation was made manifest was that in which the people accepted corn from the public granaries: it preceded but a little the time when the post of emperor became a matter of purchase. How far would it differ from this if constituencies should choose their representatives, not for their integrity, not for their capacity, not for their past services, but because of their ability to get money from the public Treasury for the benefit of their local interests; and how far would it differ from a purchase of the office if a President were chosen because of the favor he would show to certain moneyed interests?

Now that fanaticism can no longer inflame the prejudices of the uninformed, it may be hoped that our statesmen will review the past, and give to our country a future in accordance with its early history, and promotive of true liberty.

Footnote 192:[ (return) ]

These bales were the security for the foreign cotton bonds, and were seized by the United States Government. Was it not liable to the bondholders?

Footnote 193:[ (return) ]

The facts with regard to the Mississippi "Union Bank" bonds may be briefly stated as follows:

The Constitution of Mississippi required that no law should ever be passed "to raise a loan of money on the credit of the State, or to pledge the faith of the State for the payment or redemption of any loan or debt," unless such law should be proposed and adopted by the Legislature, then published for three months previous to the next regular election, and finally reënacted by the succeeding Legislature. The object was to enable the people of the State to consider the question intelligently, and to indicate and exercise their will upon it by the election of representatives to the ensuing Legislature, whose views upon the subject would be known, and with such instructions, express or implied, as they might think proper to give.

In 1837 a law was passed by the Legislature for incorporating the "Union Bank of Mississippi," with a capital of fifteen million five hundred thousand dollars, "to be raised by means of a loan to be obtained by the directors of the institution." In order to secure this loan, the stockholders were required to give mortgages on productive and unencumbered property, to be in all cases of value greater, by a fixed ratio, than the amount of their stock. When the stock had been thus secured, as a further guarantee for the redemption of the loan, the Governor was directed to issue bonds, in the name and behalf of the State, equal in amount to the stock secured by mortgage on private property. No bonds as thus directed were ever issued.

This act was duly promulgated to the people, and duly reënacted by the succeeding Legislature on the 5th of February, 1838, in strict accordance with the Constitution.

Ten days afterward, however, viz., on the 15th of February, the Legislature passed an act supplemental to the act chartering the Union Bank, which materially changed or abolished the essential conditions for the pledge of the credit of the State. By this supplemental act the Governor was instructed, as soon as the books of subscription should be opened, to "subscribe for, in behalf of the State, fifty thousand shares of the stock of the original capital of said bank, to be paid for out of the proceeds of the State bonds to be executed to the said bank, as already provided for in the said charter." This act was passed in the ordinary mode of legislation, and was not referred, published, nor reënacted, as prescribed by the Constitution. As soon as the directory was organized and the books of subscription were opened, and before the mortgages required by the charter were executed, the Governor, in behalf of the State, subscribed for fifty thousand shares of the stock, and issued the bonds of the State for five million dollars, payable to the order of the bank.

These bonds were sold to Nicholas Biddle, President of the United States Bank of Pennsylvania, and by him sent to Great Britain as collateral security for a loan previously made. None of the money received for them went into the Treasury of the State of Mississippi, nor was any of it used for a public improvement. All the consideration ever received by the State was its stock in the Union Bank. The bank soon failed, and the stock became utterly worthless.

Before the bonds became due, the Governor of the State had declared them to be null and void, among other causes, in consequence of the failure to sell them at par, as required by the "supplemental act," under which they were issued.

It is not necessary here to discuss the question of the validity or nullity of the bonds. The object is merely to state the principal facts.

While these events were occurring, and until a period several years subsequent to their consummation, I, who had just resigned my commission in the army, was a private citizen, had never held any civil office, and took no part in political affairs. Indeed, I have never at any time before, during, or since those events, held any civil office under the State government, and neither had nor could have had any part in shaping the policy of the State. When brought out as a candidate for office, my nomination was opposed by that section of my party which advocated "repudiation," on account of my opinions in favor of the payment of the bonds.

As a private citizen, it may be stated that I held that the question of the validity of the bonds should be decided by the courts. The Constitution of Mississippi authorized suit to be brought against the State in such cases in her own courts, and this I regarded as the proper course to be pursued by the bondholders, holding that the State would be bound by the judicial decision, if it should sustain the validity of the claim. This course, however, was not adopted until long afterward, when the question had become complicated with political issues, which rendered the effort to obtain a settlement entirely nugatory.

When I was a member of the Senate of the United States, my official influence was exerted to promote the objects of a citizen of Mississippi, who, with quasi-credentials from the United States Secretary of State, Mr. Buchanan, went to London to propose to the bondholders an arrangement by which the claim, or the greater portion of it, might be paid by private subscription, on consideration of the cancellation of the bonds. This effort failed, from a mistaken estimate on the part of some of the principal bondholders, to whom the proposition was made, of the extent to which State pride would induce our citizens to contribute, and to the belief in a power to coerce payment. The gentleman who bore the proposal, indignant at the offensive manner of its rejection, and conscious of the disinterestedness of his motives, abandoned the negotiation in disgust, and the opportunity was lost.

CHAPTER XIV.

Military Laws and Measures.—Agricultural Products diminished.—Manufactures flourishing.—The Call for Volunteers.—The Term of Three Years.—Improved Discipline.—The Law assailed.—Important Constitutional Question raised.—Its Discussion at Length.—Power of the Government over its own Armies and the Militia.—Object of Confederations.—The War-Powers granted.—Two Modes of raising Armies in the Confederate States.—Is the Law necessary and proper?—Congress is the Judge under the Grant of Specific Power.—What is meant by Militia.—Whole Military Strength divided into Two Classes.—Powers of Congress.—Objections answered.—Good Effects of the Law.—The Limitations enlarged.—Results of the Operations of these Laws.—Act for the Employment of Slaves.—Message to Congress.—"Died of a Theory."—Act to use Slaves as Soldiers passed.—Not Time to put it in Operation.