1830 Andrew Jackson - Veto of Louisville and Portland Canal Bill

The rivalry between Andrew Jackson and Henry Clay is one of the greatest of all times, spanning decades and positions. One of these positions was internal improvements. Henry Clay was the architect of the American System where federal internal improvement projects would help fuel a strong American industry, while Andrew Jackson feared the cost of these improvements and questioned the constitutional authority of the government to take them on. In Jackson’s first two years, he fought hard against what he called the “mingling the concerns of the Government with those of the States or of individuals”. Jackson, feared that the government would partner with special interests of states and private corporations in a power grab that would endanger the liberty of the people. In 1829, Jackson vetoed “the Maysville Road” that would have passed right through the hometown of Henry Clay, and in 1830 Jackson and Clay faced off on a proposal to have the federal government purchase stock in the Louisville and Portland Canal Company. Jackson argued that Henry Clay and is followers were being deceptive with this bill and open the door to a power grab that would lead to the expansion of federal government and the control of “every canal and each 60 or 100 miles of every important road.” Despite the hard-fought fight by Jackson, funding of internal improvement projects increased rapidly during his presidency.

Just prior to adjourning in 1829, Congress sent to President Jackson "An act to authorize a subscription for stock in the Louisville and Portland Canal Company". Rather than act on this bill immediately, President Jackson chose not to act and thus, “pocket vetoed” the bill. Now that Congress was back in session, Jackson used his State of the Union Address to explain his position on the bill. The issue at hand was not the funding of infrastructure projects per se, but rather the purchase of stock in a private company. In 1826, Congress had purchased 100 shares of stock at $1,000 each in the Portland Canal Company, and in 1829 they invested an additional $135,000. This was the third such request to invest American tax payer dollars. Jackson considered such purchases to not only be unconstitutional, but deceptive and a danger to the liberties of the people.

Jackson explained that while he may have assented in the past to these bills, recent experiences convinced him that such investments were neither proper nor efficient. One reason Jackson opposed the bill was that the funds were being used to build roads that were not free for all to use. They either served a specific region or charged tolls for use of the roads. Another reason, and more important, was that these bills co-mingled the concerns of federal government with those of states or private companies. In Jackson’s mind this was inconsistent with the objectives of a federalist government and “highly impolite (improper)”. Jackson argued that if a federalist form of government is to be successful, it must be confined by “the few and simple, but yet important, objects for which it was designed”. In other words, Jackson was arguing for a limited government, bounded by the United States constitution.

If Congress and the federal government were to step beyond these bounds and continue to delve into projects which should be left to the states, the wall between state and federal government as defined in the tenth amendment would crumble. Section 8. Clause 1 of the Constitution gave Congress the power to lay and collect taxes to provide from the common defense and general welfare of the United States, but now Congress was delegating this power to the Louisville and Portland Canal Company. Congress was handing over the control of these tax payer dollars to a private company that is beyond the supervision of both Congress and the Constitution with officers and agents who are constantly exposed to all sorts of special interests and outside forces. This would undoubtedly result in tax payer dollars will end up being used in ways contrary to the will of the people and lead to a general distrust of federal government. Perhaps, some in Congress thought Jackson was over reacting or fear-mongering suggesting “that the extent of consequences like these can not be great from a limited and small number of investments”. To that, Jackson replied “unless an entire stop be put to them it will soon be impossible to prevent their accumulation until they are spread over the whole country and made to embrace many of the private and appropriate concerns of individuals.” Jackson was very astute. He understood that once special interest groups could get their hands on the federal treasury, there would be no end to the federal government’s power grab and soon the federal government would control “every canal and each 60 or 100 miles of every important road”. By becoming the principal stock holder of these corporations, it would endanger the liberties of the people by giving the corporations a proportionate vote in all their elections. Not only did Jackson call it a power grab, but he called it deceptive as well. Rather than laying out the appropriations bill in a manner that people could understand and see what Congress was paying for, they hid the details under the disguise as investments. There was no transparency and no way for the people to track how the money was being spent. Jackson, admonished Congress that in a “government like ours”, public acts should be as “practicable, simple, undisguised, and intelligible, that they may become fit subjects for the approbation to animadversion (open to criticism) of the people”.

“In speaking of direct appropriations I mean not to include a practice which has obtained to some extent, and to which I have in one instance, in a different capacity, given my assent -- that of subscribing to the stock of private associations. Positive experience and a more thorough consideration of the subject have convinced me of the impropriety as well as inexpediency of such investments. All improvements effected by the funds of the nation for general use should be open to the enjoyment of all our fellow citizens, exempt from the payment of tolls or any imposition of that character. The practice of thus mingling the concerns of the Government with those of the States or of individuals is inconsistent with the object of its institution and highly impolite. The successful operation of the federal system can only be preserved by confining it to the few and simple, but yet important, objects for which it was designed.

A different practice, if allowed to progress, would ultimately change the character of this Government by consolidating into one the General and State Governments, which were intended to be kept for ever distinct. I can not perceive how bills authorizing such subscriptions can be otherwise regarded than as bills for revenue, and consequently subject to the rule in that respect prescribed by the Constitution. If the interest of the Government in private companies is subordinate to that of individuals, the management and control of a portion of the public funds is delegated to an authority unknown to the Constitution and beyond the supervision of our constituents; if superior, its officers and agents will be constantly exposed to imputations of favoritism and oppression. Direct prejudice the public interest or an alienation of the affections and respect of portions of the people may, therefore, in addition to the general dis-credit resulting to the Government from embarking with its constituents in pecuniary stipulations, be looked for as the probable fruit of such associations. It is no answer to this objection to say that the extent of consequences like these can not be great from a limited and small number of investments, because experience in other matters teaches us -- and we are not at liberty to disregard its admonitions -- that unless an entire stop be put to them it will soon be impossible to prevent their accumulation until they are spread over the whole country and made to embrace many of the private and appropriate concerns of individuals.

The power which the General Government would acquire within the several States by becoming the principal stock-holder in corporations, controlling every canal and each 60 or 100 miles of every important road, and giving a proportionate vote in all their elections, is almost inconceivable, and in my view dangerous to the liberties of the people.

This mode of aiding such works is also in its nature deceptive, and in many cases conducive to improvidence in the administration of the national funds. Appropriations will be obtained with much greater facility and granted with less security to the public interest when the measure is thus disguised than when definite and direct expenditures of money are asked for. The interests of the nation would doubtless be better served by avoiding all such indirect modes of aiding particular objects. In a government like ours more especially should all public acts be, as far as practicable, simple, undisguised, and intelligible, that they may become fit subjects for the approbation to animadversion of the people.”

Jackson then turned specifically to the Canal build and the difficult position that Congress themselves in. It was “striking illustration” of how the federal government can become compromised by special interests when a partnership is formed between the government and private companies. Congress was proposing a third purchase or subscription of stock from the Canal company, even though the first two were proposed as a one-time appropriation and an accompanying bill for lighthouses included an appropriation to remove obstructions in the very river the canal was designed to avoid. If the river was cleared, then there would be no need for a canal. It should be one or the other not both, but despite, these competing interests Congress was compelled to invest yet again in the Canal because of powerful special interest groups. Jackson reiterated his point that when the federal government get’s invested in improvements of local matters, local matters dictate legislation despite the best intentions of Congress. Local influences (or special interests) become too powerful for Congress to resist.

The bill authorizing a subscription to the Louisville and Portland Canal affords a striking illustration of the difficulty of withholding additional appropriations for the same object when the first erroneous step has been taken by instituting a partnership between the Government and private companies. It proposes a third subscription on the part of the United States, when each preceding one was at the time regarded as the extent of the aid which Government was to render to that work; and the accompanying bill for light houses, etc., contains an appropriation for a survey of the bed of the river, with a view to its improvement by removing the obstruction which the canal is designed to avoid. This improvement, if successful, would afford a free passage of the river and render the canal entirely useless. To such improvidence is the course of legislation subject in relation to internal improvements on local matters, even with the best intentions on the part of Congress.

This reason alone was enough to convince the President to veto the bill, but he wanted to share with Congress a few other general observations that he felt were important to add. I will delve into these in my next post.

References

Presidency.ucsb.edu. (2019). Second Annual Message | The American Presidency Project. [online] Available at: https://www.presidency.ucsb.edu/documents/second-annual-message-3 [Accessed 6 Feb. 2019].


En.wikipedia.org. (2019). Louisville and Portland Canal. [online] Available at: https://en.wikipedia.org/wiki/Louisville_and_Portland_Canal [Accessed 6 Feb. 2019].

Schulman, M. (2019). Jackson and Internal Improvement. [online] Historycentral.com. Available at: https://www.historycentral.com/Ant/Improvements.html [Accessed 6 Feb. 2019].