A Biography of Henry Clay, the Senator from Kentucky / Containing Also, a Complete Report of All His Speeches; Selections From His Private Correspondence; Eulogies in the Senate and House; and a Poem, by George D. Prentice, Esq.

by Unknown

[Mr. Buchanan here inquired, if any deduction had been made by Mr. Clay from the exports, to pay the interest, and so forth, on American debt held abroad. Mr. Clay replied, that the senator would presently see that he had.]

I think the senate will agree with me, in assuming, that theexports form a more correct and reliable standard of estimation than the imports; however that may be, the accidental coincidence between the results arrived at in either mode, fortifies and proves the calculation itself to have been founded in correct principles. Those results, as shown by the secretary of the treasury, are now, I believe, in the house, and I regretted that I could not examine them before I rose to address the senate.

I will now show you that the exports from 1836 to 1841, inclusive, a period of six years, amount to six hundred and twenty-one million, four thousand, one hundred and twenty-five dollars, being an average annual amount of one hundred and three million, five hundred thousand, six hundred and eighty-seven dollars. That I take as presenting a safe ground of calculations for the future. To this I propose to add fifteen per centum for profits, in which I do but follow Mr. Ewing, the late secretary, in his report at the extra session. It is certainly a great profit, (I include, of course, all expenses and charges of every kind,) and with this addition, the annual amount will be one hundred and eighteen million, nine hundred and fifty-eight thousand, one hundred and eighty-seven dollars, say one hundred and nineteen millions. Deducting for the interest and principal of the American debt abroad, ten millions per annum, it will leave a net amount of one hundred and nine millions. There can be no dispute as to the propriety of such a deduction: the debt exists; it must be provided for; and my fear is, that this amount will prove too small to meet it. I think that much more may probably be needed; but certainly none can object to the reserve of ten millions. We thus get, as I said, a net balance from our annual exports, including profits, of one hundred and nine millions.

Of this amount of importation, how much is now free from duty? The free goods, including tea and coffee, amount to thirty millions; from which amount I deduct for tea and coffee, assuming that they will be subjected to moderate duties, twelve millions, leaving the amount of free articles at eighteen millions; deduct this from one hundred and nine millions, the amount of exports, and it will leave a balance of ninety-one millions, which may be assumed as the amount of dutiable articles for some years to come.

How, then, out of these ninety or ninety-one millions of dutiable goods are we to raise a revenue of twenty-six millions? No man, I presume, will rise here in his place and say, that we are to rely either on direct or internal taxes. Who has the temerity to meet the waves of popular indignation which will flow round and bury him, whoever he may be, that should propose, in time of peace, to raise a revenue by direct taxation? Yet this is the only resource to fly to, save the proceeds of the public lands, on which I shall speak presently, and which I can convince any man is not to be thought of. You are, therefore, to draw this amount of twenty-sixmillions from the ninety-one millions of dutiable articles imported; and, to reach that sum, at what rate per centum must you go?

I shall here say nothing, or but a word or two, on the subject of home valuation—a subject which a friend has care of, (Mr. Simmons,) than whom none is more competent to its full elucidation. He thinks, as I understand, that there can be devised a satisfactory system of such valuation, and I heartily wish him success in the attempt. I will only say that, in my opinion, if we raise but ten millions, without any reference whatever to protection, without reference to any thing but to mere honesty, however small the amount may be, we should ourselves assess the value of the goods on which we lay the duty, and not leave the value to be fixed by foreigners. As things now stand, we lay the duty, but foreigners fix the value of the goods. Give me but the power of fixing the value of the goods, and I care little, in comparison, what may be the rate of duty you impose. It is evident that on the ad valorem principle, it is the foreigner who virtually fixes the actual amount of the duty paid. It is the foreigner who, by fixing that value, virtually legislates for us; and that in a case where his interest is directly opposed to that of our revenue. I say, therefore, that independently of all considerations of protection, independently of all ends or motives but the prevention of those infamous frauds which have been the disgrace of our custom house—frauds in which the foreigner, with his double and triple and quadruple invoices, ready to be produced as circumstances may require, fixes the value of the merchandise taxed—every consideration of national dignity, justice, and independence, demands the substitution of home valuation in the place of foreign. What effect such a change may have in the augmentation of the revenue I am not prepared to say, because I do not know the amount; I think the rate may be set down at from twenty to twenty-five per centum, in addition to the foreign value of imports. I do not speak with great confidence. If the rate is twenty-five per centum, then it would add only five per centum to the rate of twenty per centum established by the compromise act. Of course, if the home be substituted for the foreign valuation, the augmentation of duties beyond twenty per centum will be less by that home valuation, whatever it may be. Without, however, entering into the question of home valuation, and leaving that subject to be arranged hereafter, I shall treat the subject as if the present system of foreign valuation were to continue.

I then return to the inquiry on an importation amounting to ninety-one millions, how much duty must be imposed in order to raise a net revenue of twenty-six millions? The question does not admit of perfect accuracy; the utmost that can be reached is a reasonable approximation. Suppose every one of the imported articles to be subject to a duty of thirty per centum, then the grossrevenue will amount to twenty-seven million and three hundred thousand dollars. Deducting the expenses of collection, which may be stated at one million and six hundred thousand dollars, it will give twenty-five million and seven hundred thousand dollars, or three hundred thousand dollars less than the proposed amount of twenty-six millions.

But I might as well take this opportunity to explain a subject which is not well understood. It has been supposed, when I propose to fix a rate of ad valorem duty as the maximum to be allowed, that my meaning is, that all articles, of every description, are to be carried up to that point, and fixed at that rate, as on a sort of bed of Procrustes. But that is not my idea. No doubt certain articles ought to go up to the maximum—I mean those of prime necessity belonging to the class of protected articles. There are others, such as jewelry and watches, and some others of small bulk and great comparative value, and therefore easily smuggled, and presenting a great temptation to the evasion of duty, which ought to be subjected to a less rate. There should, therefore, be a discrimination allowed under the maximum rate according to the exigency of the respective circumstances of each particular interest concerned. Since it will require a duty of thirty per centum on all articles to give the amount of twenty-five million seven hundred thousand dollars, and since some of them will not bear so high a duty as thirty per centum, it follows that less than that rate will certainly not answer the necessary demands of the government, and it may in some particular cases require a rate somewhat higher than that in order to raise the proposed sum of twenty-six millions. But as the reserved fund of two millions for contingencies will not require an annual revenue for that purpose, should the amount of duties levied be less than twenty-six millions, or even between twenty-four and twenty-five millions, the reserved fund may be made up by accumulation, during successive years, and still leave an amount sufficient to meet an annual expenditure of twenty-two millions, and two millions for the public debt.

I now approach the consideration of a very important branch of the subject in its connection with the compromise act.

I shall not here attempt to go again into the history of that act. I will only say that, at the time of its passage, it was thought right that the country should make a fair experiment of its effect; and that, as the law itself met the approbation of all parts of the country, its provisions ought not lightly to be departed from; that the principles of the act should be observed in good faith; and that, if it be necessary to raise the duties higher than twenty per centum, we ought to adhere to the principles of the compromise, then, as far as it should be possible to do. I have been animated, in the propositions I now offer to the senate, by the same desire that prompted me, whenever the act has been assailed by its opponents, to stand by it and defend it.