These three last sums, composing the unfunded debt, are payable on the presentation of the certificates.

After the 1st of January next, no part of the public debt, except the remaining fragments of the unfunded debt, of which only small portions are occasionally presented, will be redeemable before the following year; and though there will be in the treasury, during the year,'ample means to discharge the whole debt, they can be applied only to the purchase of stock at the market price. It is now manifest that, if the bank shares had been sold, and the proceeds applied to this object, the entire debt might, in this manner, have been extinguished within the present year. But it is nevertheless pleasing to reflect that, after the present year, it may be considered as only a nominal debt; as the bank shares which have been actually paid for, within the last four years, by the redemption of the stock subscribed for them, are greater in value than the whole amount of that debt; and the debt itself ceases to be a burden, inasmuch as the dividends derived from the bank shares yield more to the treasury than will be required to pay the interest. The debt may, therefore, be considered as substantially extinguished after the 1st of January next; which is earlier than was looked for under the most prosperous and economical administration of our affairs that could have been anticipated. It will nevertheless be gratifying to the national pride, that every thing, having even the appearance of debt, should cease; and measures will therefore be adopted to invite the early presentation of the outstanding stocks, that they may be paid off as fast as the means are received, and the evidences of the public debt finally cancelled. It will be a proud day for the American people, when, to all those honorable characteristics which have rendered their career so memorable among nations, they shall add the rare happiness of being a nation without debt.

III. OF THE ESTIMATES OF THE PUBLIC REVENUE AND EXPENDITURES FOR THE YEAR 1833.

The statement already presented shows that the receipts from customs, during the present year, will exceed the estimate submitted at the last session of Congress. It is true, that duties to a considerable amount, received in this year, will hereafter be returned under the 18th section of the act of

the last session for altering the duties on imports: but, as those duties are not to be returned until after the 3d of March next, and as, in the mean time, they will be available means in the treasury, they will be so treated, and the probable amount of them will be deducted from the estimated amount of the duties receivable in 1833.

Notwithstanding the unusually large importations in 1831, those of 1832 have also been large-being estimated, for the year ending on the 30th of September last, at $100,652,677 in value. The exports have somewhat exceeded those during the same period in 1831-being estimated at $87,037,943 in value; of which, $63,074,815 were of domestic, and $23,963,128 of foreign articles. These results are not only satisfactory in reference to their connexion with the finances, but as indicating a prosperous condition of commerce.

The duties which accrued during the first three quarters of the present year are estimated at $24,505,000; and those for the fourth quarter at $4,891,000. Though the proceeds of these duties will form a considerable portion of the receipts into the treasury, from customs, during the year 1833, yet it is to be observed that, as the terms of credit will be much shortened on importations subsequent to the 3d of March next, a greater portion of the duties accruing within the year will be received in that year than heretofore. At the same time, the bonds given on previous importations, at the present terms of credit, will continue to fall due as before; and the combined operation of these two causes will increase the proportion which the actual receipts, within the year, will bear to the accruing duties, relatively both to past and future years.

From data in possession of the department, it is estimated that the duties which will be returned out of the revenue of 1833, after the 3d of March next, upon merchandise deposited under the 18th section of the act of the 14th of July last, may be estimated at $2,500,000. Though these data are necessarily in a great degree conjectural, they are sufficient for the purpose of the present estimate. It is proper to be remarked, however, that if a broader operation be given by Congress to the provisions of that section than it has received at the department, the amount will be proportionately increased.

A considerable reduction, estimated at not less than two hundred and fifty thousand dollars, from the amount receivable from customs in the present year, has also resulted from the refunding of duties heretofore collected, and perhaps an equal amount from the cancelling of bonds falling due on railroad iron, agreeably to the act of the last session. But as this has consisted, in part, of the drawback of duties taken in previous years, the amount forms no criterion for the future.

It has been shown that the actual receipts from public lands, during the present year, will fall much short of the estimate presented at the last session. The sales were necessarily affected by the extensive measures adopted in the western and northwestern country to repel the recent Indian incursions. Owing, also, to the want of the returns of surveys and plats, which the surveyors general found themselves unable to supply, lands, expected to have been sold, were not brought into market. It is expected, however, that the receipts from this source will be somewhat larger next year. According to the best judgment the department is able to form on the subject, the receipts into the treasury from all sources, during the year 1833, may be estimated at $24,000,000 00

The expenditures for the year 1833, for all objects, other than the reimbursement of the public debt, are estimated

During the year 1833, however, the moneys which have been received into the treasury from Denmark, within the two last and present years, for the payment of the indemnities due to American citizens, under the convention, will be payable, estimated at

Which, added to the expenditures, will make the aggregate charge upon the treasury, for the year, exclusive of the reimbursement of the public debt

$17,638,577 35

694,000 00

18,332,577 35

In the year 1833, the first instalment payable under the convention with France, for indemnities to American citizens, will also be received into the treasury, though it will form no part of the disposable means.

Taking an average of the importations for the last six years, as a probable criterion of the ordinary importations for some years to come, the revenue from customs, at the rates of duty payable after the 3d of March next, may be estimated at $18,000,000 annually. The public lands, bank dividends, and other incidental receipts, may be estimated at $3,000,000— making an aggregate revenue of about $21,000,000 a year. In the last annual report on the state of the finances, the probable expenses for all objects, other than the public debt, were estimated at fifteen millions. This is still believed to be a fair estimate; and, if so, there will be an annual surplus of six millions of dollars.

Still firmly convinced of the truth of the reasons then presented for a reduction of the revenue to the wants of the Government, I am again urged, by a sense of duty, to suggest that a further reduction of six millions of dollars be made, to take effect after the year 1833. Whether that shall consist altogether of a diminution of the duties on imports, or partly of a relinquish

ment of the public lands, as a source of revenue, as then suggested, it will be for the wisdom of Congress to determine.

Without adverting in unnecessary detail to the consideration in favor of lessening the existing duties, which I had the honor to present, as well in the last annual report as in that called for by special resolutions of the House of Representatives, I deem it proper to observe that, in my own mind, those considerations have lost none of their force, but have derived new weight from subsequent reflection.

The purity and simplicity of the institutions under which it has pleased Providence to make us a great and prosperous nation; the few objects, and those of a general nature, to which the powers of the Federal Government can be appropriately applied; and the great diversity of interests which, from their local and geographical position, prevail in the several States composing the Union, imperiously require that the amount of the public expenditure should be regulated by a prudent economy, and that no greater amount of revenue should be collected from the people than may be necessary for such a scale of expenditure.

The main purpose of taxation by the General Government, according to the spirit of the constitution, undoubtedly is, to pay the debts, and to provide for the common defence and general welfare of the Union, by the means confided to Congress. It is freely admitted that this power may, and ought to be, directly exerted to counteract foreign legislation, injurious to our own enterprise, and incidentally to protect our own industry, more especially those branches "necessary to preserve within ourselves the means of national defence and independence." And although the exercise of the power in either case must necessarily depend upon the cause which may call it forth, the power of taxation, imposing large and permanent burdens for the encouragement of particular classes, cannot be exercised, and by slender majorities, consistently with a proper regard to the equal rights of all; and it is not to be concealed, that a permanent system of high protecting duties directly tends to build up favored classes, ultimately prejudicial to the safety of the State.

Deeply impressed with these reflections, which are now rendered more urgent by the reduced and limited demands of the public service, I had the honor, at the last session of Congress, to recommend a reduction of the duties to the revenue standard. The force of those and similar considerations, and of that recommendation, may be supposed to have received, at that time, the sanction of Congress, and to have formed a motive of the act of the 14th of July last, notwithstanding that it was not then deemed practicable fully to adopt the recommendation of the department. By that act, however, besides the positive reduction, both in the rate and in the amount of duty, the expediency of adapting the revenue to the expenditure, and of equaliz ing the public burdens, was, to a great extent, acknowledged, and the oppressive system of minimums was, for the most part, abolished. By that act, also, those articles principally necessary for the maintenance and clothing of the laborers of the south and southwest, were, to a certain degree, relieved; and, both by its direct enactments, and as incident to its main scope, it encouraged an increased consumption of such articles as depended for their fabrication upon the raw materials and productions of the south. To extend and improve the demand for those productions, by substituting, as far as practicable in general use, cotton fabrics, for those made of mateVOL. III.-19

rials from other countries, was not an unimportant object of the bill presented from this department.

In the reduction then recommended, the necessity of adapting the proposed changes to the safety of existing establishments, raised up under the auspices of past legislation, and deeply involving the interests of large portions of the Union, was distinctly recognised; and it is still deemed to be not less imperions in the further changes which may be considered expedient. Such necessity, however, arises rather from a just and prudent regard to the rights and interests of the whole community, than from any absolute pledge of the national faith, uncontrolled by circumstances. The principles of our republican institutions discountenance any system of legislation, not in the nature of compact, independent of the popular will, tending to defeat the action of the constituent upon the representative, and to exclude the operation of changes in the condition of public affairs, or in public opinion, upon the national councils. In this, as in all other instances, the causes which call for the legislative action must determine its duration; and that legisla tion, especially, which confers favors upon particular classes, has no other claim to permanence than its tendency to advance the interests and prosperity of the whole.

To aid American enterprise in every branch of labor, and, by seasonable encouragement, to foster and preserve within ourselves the means of national defence and independence, led to the protective system in the infancy of the Government. To counteract the policy and rivalry of foreign nations, and to prevent their prejudicial influence upon American industry; to indemnify the latter against the superior skill, and capital, and cheapness of labor in older and more experienced countries; and to succor American capital, which the events of the last war had devoted to manufacturing employments, recommended an occasional extension of that policy, which has been liberally enjoyed by the manufacturing classes since the act of the 4th of July, 1789. In the course of that time, however, the capital and resources of the country have augmented in a ratio beyond the expectations and hopes of the most sanguine. American enterprise and ingenuity are, every where, proverbially the objects of admiration, and, in many branches, maintain, without extraordinary aid, a successful competition with those of other nations. By the abundance of provisions in the United States, and the surprising increase of population; the wide spread facilities of water-power; the improvements, as well in personal skill as in machinery of all kinds, and the general advancement and diffusion of all the lights of arts and science; and the reduction of duty, both on the raw material and other articles of consumption, the cost of labor and production has not only been lessened, but in a great measure equalized: and, in this view of the subject, it is not perceived that there can now exist the same necessity for high protecting duties as that which was consulted in our past legislation. To perpetuate a system of encouragement growing out of a different state of things, would be to confer advantages upon the manufacturing, which are not enjoyed by any other branch of labor in the United States, and to convert the favor and bounty of the Government into permanent obligations of right -acquiring strength in proportion to their continuance.

It will be conceded, that, when the fair rate of profit attendant upon the sagacious employment of capital in the United States is satisfactorily ascertained, it may be wise so far to protect any important branch against the injurious effects of foreign rivalry, as may be necessary to preserve for it