the true sources of embarrassment, both to the country and the Government, and to suggest that the administration might get through the year if, in addition to the ordinary receipts, Congress would authorize $4,500,000 of Treasury notes to be issued—a simple form of borrowing that much money. And in his perplexity he was forced to declare that, in consequence of the "unexpected fluctuations to which the revenue is subjected, it is not possible to compute the receipts beforehand with great certainty"; thus conceding the rapid decline in the receipts from customs, and the uncertainty of relying upon the Compromise Act of 1833, which was then in force, and under which the duties had begun to go down to the horizontal standard.

Why these "unexpected fluctuations" in the revenue from customs, to which Mr. Van Buren alluded? Manifestly, because manufacturing enterprise had been checked by the threatening attitude of the Government, under the Act of 1833; which materially lessened our home markets, rendered all values uncertain, left labor without proper reward, the products of agriculture rotting in barns of the producers, and importations declining. Certainly, the fact that only $1,085,498, out of so large a nominal balance, was actually available for the year 1838, made a bad showing; especially as the imports from which revenue had to be raised had decreased from $176,579,154 in 1836 to $130,472,803 in 1837; and were still further declining and did actually decline in 1838 to $95,970,288; showing a total declension of $80,608,866 in two years. As these consequences were produced by causes other than those which

&

Mr. Van Buren was willing to concede-because he was held so tightly in the grasp of those who persuaded him that cotton would become the chief factor in affording relief -he, either from an infatuation difficult to understand, or a want of the firmness displayed by General Jackson, in dealing with the same men, found himself at every step sinking deeper and deeper into trouble.

The fiscal affairs of the Government grew worse and worse every year. The available balance in the Treasury on January 1, 1839, was only $2,765,342, exceeding that of the former year only $679,744. The receipts from all sources, including public lands, was $20,615,598. Treasury notes, amounting in principal and interest to about $8,000,000, were issued, and $2,254,871 were received for the sale of bonds of the Bank of the United States. This made the whole available means for the year $33,635,811. The expenditures were $39,455,438, or $5,819,627 more than the receipts. It was consequently impossible to get along without issuing Treasury notes and retaining the balance of over $9,000,000, which had been deposited with the States. The policy of Mr. Van Buren, therefore, tended to increase rather than diminish the embarrassment. And it is difficult to imagine how he became insensible to this himself, when he was compelled to admit, as he did in his third message, that “independent of the redemption of the public debt and trusts, the gross expenditures of seventeen and eighteen millions in 1834 and 1835, had swelled to $29,000,000 in 1836, and the appropriations for 1837, made previous to the 4th of March, caused the expenditures to

- thus

rise to the very large amount of $33,000,000" showing that the expenditures were increasing while the revenue was diminishing.

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It is not intended by these references to arraign the administration of Mr. Van Buren on the score of extravagance in the expenditures. The purpose in referring to them is entirely different-that is, to show how fatal was his mistake, in attempting to carry on the Government when the expenditures were in excess of the revenue, without realizing that it was his duty to maintain the principle of protection, to which everyone of his predecessors had given the most solemn sanction, rather than heed the demands of those who were striving to force the Government to adopt the heresy of free trade, at the expense of the revenue as well as all home industries. An ounce of prevention is worth a pound of cure"; and but for the unfortunate complications which he allowed to environ him, he might have applied a preventive in time to save the Treasury from impending bankruptcy and his own administration from the doom which, in the end, befell it. As it was, he ended his official life with a mere general reference to the "great and protracted reduction of the revenue," and turned the Government over to his successor with no more money in the Treasury than could be counted in a few hours. On January 1, 1840, there was on hand only $1,500,000, which was considerably diminished by the beginning of the new administration, March 4, 1841; so that, at that time, the operations of the Government were hedged about by rapidly increasing financial difficulties.

The Treasury was never before, in all the history of the Government, in so embarrassed a condition. Even after the lapse of more than forty years, it is still a cause of wonder that it was allowed to drift into it, without any apparent effort at relief, and from the single motive of enabling the producers of cotton to bring about free trade with the manufacturers of British goods, and, by that means, to imperil the agricultural, manufacturing, and mechanical industries of the United States.

CHAPTER XXXII.

INCIDENTAL PROTECTION-WHAT IT MEANS-DOES NOT ABANDON DISCRIMINATING DUTIES-PROTECTION INCIDENTAL TO THE COMMERCIAL, NOT THE REVENUE POWER-EACH IS SUBSTANTIVE-REVENUE TARIFF GIVES NO PROTECTION POWER TO PROTECT DISTINCT FROM REVENUE POWERIF REVENUE TARIFF COULD PROTECT, IT WOULD BE ACCIDENTAL, NOT INCIDENTAL.

BEFORE proceeding with further details in reference to

the effects of the tariff law of 1833 upon the revenue, and upon the principle of protection, it is deemed necessary to inquire what is meant by "incidental protection";— an expression which, if not properly understood, is misleading. It has been the fruitful source of much false reasoning.

The first reference to "incidental protection," was by General Jackson, in his message of 1832. Before that time the constitutional power of Congress to protect manufactures had been considered, by himself and all his predecessors, as substantive and independent- not as incident to the revenue power, but to the power to regulate commerce. Not only had Mr. Madison so declared in his speeches in Congress, but he had repeated it in his messages. Mr. Jefferson and Mr. Monroe asserted the same doctrine as emphatically as he did. But neither of them was more emphatic than General Jackson, who adopted the views of Mr. Madison almost exactly. Whosoever shall scrutinize his

Both