1830 Andrew Jackson - What to do with a Federal Surplus? Distribute it Proportionally

What if the federal government was projecting a time soon, when the federal debt would not only be paid off, but the U.S. treasury would see a surplus of funds?  How should the surplus funds be spent?  During his administration,  Andrew Jackson was facing this real possibility, but at a time when the nation was facing a growing sectional divide.   Civil war was still 30 years away, but already rivalries and jealousies between different sections of the country were tearing the nation apart.  Any plan for distributing the funds had to bring peace and harmony to the states.   Jackson's explanation of his plan is a bit wordy, but definitely worth studying.

Introducing the Plan

In his second State of the Union, Andrew Jackson shared that he had such a plan.   While many in Congress and across the country were urging the funds be used to make redress for states that had been left out of recent internal improvement projects, Jackson's plan was to distribute the funds equally and proportionally.   In doing so, his plan would do nothing to further upset the sovereignty of each state and the harmony between states.

"Profoundly impressed with the importance of the subject, not merely as relates to the general prosperity of the country, but to the safety of the federal system, I can not avoid repeating my earnest hope that all good citizens who take a proper interest in the success and harmony of our admirable political institutions, and who are incapable of desiring to convert an opposite state of things into means for the gratification of personal ambition, will, laying aside minor considerations and discarding local prejudices, unite their honest exertions to establish some fixed general principle which shall be calculated to effect the greatest extent of public good in regard to the subject of internal improvement, and afford the least ground for sectional discontent. 

The general grounds of my objection to local appropriations have been heretofore expressed, and I shall endeavor to avoid a repetition of what has been already urged -- the importance of sustaining the State sovereignties as far as is consistent with the rightful action of the Federal Government, and of preserving the greatest attainable harmony between them. I will now only add an expression of my conviction -- a conviction which every day's experience serves to confirm -- that the political creed which inculcates the pursuit of those great objects as a paramount duty is the true faith, and one to which we are mainly indebted for the present success of the entire system, and to which we must alone look for its future stability."

Sectional Conflicts

Jackson acknowledged the varied and differing interests of the countries and suggested that his actions and those of Congress had to counter balance the local jealousies and rivalries between neighboring communities.   Jackson recognized that the diversity of interests among the states is natural due to differences in climate, population and local interests, but they were being greatly exaggerated by jealousies and "spirit of rivalry".    He urged Congress to support actions that could to neutralize the effects of these sectional differences.  In the 1820's, sectionalism was growing as the North was becoming increasingly industrialized while the South was building a strong agricultural economy based on slave labor.   Canals and roads were popular as they facilitated transportation of agricultural products and manufactured goods between different sections of the country, but the special interests of the states were lobbying for and obtaining funds to build projects that often provided only very localized  benefits.  It was the role of Congress, to ensure that internal improvement projects were "as equal and equitable among the several States".

"That there are diversities in the interests of the different States which compose this extensive Confederacy must be admitted. Those diversities arising from situation, climate, population, and pursuits are doubtless, as it is natural they should be, greatly exaggerated by jealousies and that spirit of rivalry so inseparable from neighboring communities. These circumstances make it the duty of those who are intrusted with the management of its affairs to neutralize their effects as far as practicable by making the beneficial operation of the Federal Government as equal and equitable among the several States as can be done consistently with the great ends of its institution."

Lopsided Funding of Internal Projects

Jackson continued by explaining that it was plain to see that past acts of the Government had fallen far short of being equally distributed, and were instead quite lopsided.  In recent years, $5 million in federal dollars had already been unequally distributed, but that was just the beginning.  An additional $96 million was in the pipeline based on projects that had been surveyed or already surveyed.  Jackson, explained that it is acceptable for a specific project will favor one state over another, but when the balance of overall spending tips in the favor of one or more states, it causes a "prolific source of irritation".

"It is only necessary to refer to undoubted facts to see how far the past acts of the Government upon the subject under consideration have fallen short of this object. The expenditures heretofore made for internal improvements amount to upward of $5M, and have been distributed in very unequal proportions amongst the States. The estimated expense of works of which surveys have been made, together with that of others projected and partially surveyed, amounts to more than $96M.\ 

That such improvements, on account of particular circumstances, may be more advantageously and beneficially made in some States than in others is doubtless true, but that they are of a character which should prevent an equitable distribution of the funds amongst the several States is not to be conceded. The want of this equitable distribution can not fail to prove a prolific source of irritation among the States."

Avoid sectional interests

Despite, what had happened in the past, Jackson warned that the federal government must always act with the overall public good in mind and avoid sectional interests.   Constantly, right before our eyes special interest groups lobby to "lavish the public funds" on projects which are the desires and passions of the people.   In times like this, how can anyone not expect that Congress always acts for the public good, there is always some other agenda that creeps into the bill.  Jackson described it as a "sinister influence" (sinister meaning toward the left-hand or other side).   Add to this, the jealousies and unfriendly influences on Congress, and the people do take notice bringing severe condemnation on Congressional action.   It creates a backlash of criticism and action, whereby the people demand that Congress remedy the situation and make up for past sins.  The states that were least favored in the past will insist on being "redressed" or set right, but any attempts to set things right will only serve to move the "the inequality from one quarter to another."

"We have it constantly before our eyes that professions of superior zeal in the cause of internal improvement and a disposition to lavish the public funds upon objects of this character are daily and earnestly put forth by aspirants to power as constituting the highest claims to the confidence of the people. Would it be strange, under such circumstances, and in times of great excitement, that grants of this description should find their motives in objects which may not accord with the public good? Those who have not had occasion to see and regret the indication of a sinister influence in these matters in past times have been more fortunate than myself in their observation of the course of public affairs. If to these evils be added the combinations and angry contentions to which such a course of things gives rise, with their baleful influences upon the legislation of Congress touching the leading and appropriate duties of the Federal Government, it was but doing justice to the character of our people to expect the severe condemnation of the past which the recent exhibitions of public sentiment has evinced. 

Nothing short of a radical change in the action of the Government upon the subject can, in my opinion, remedy the evil. If, as it would be natural to expect, the States which have been least favored in past appropriations should insist on being redressed in those here after to be made, at the expense of the States which have so largely and disproportionately participated, we have, as matters now stand, but little security that the attempt would do more than change the inequality from one quarter to another."

Objections to Jackson's Plan 

With these principles, Jackson then laid out his plan for distributing future surplus federal funds.  In a nutshell, Jackson would distribute the funds in proportion to representatives of each state to be applied to internal improvement projects.  Jackson's supporters thought this was a good plan, but of course there were those who objected.   Jackson listed out these objections in his address.


1.  The distribution based on representatives was unfair.  
2.  The promise of surplus funds would lead to oppressive taxation to generate local revenue.
3.  The plan would favor "construction of works of a local nature" over national projects.
4.  The plan would create a harmful dependency between states and the federal government. 

"Thus viewing the subject, I have heretofore felt it my duty to recommend the adoption of some plan for the distribution of the surplus funds, which may at any time remain in the Treasury after the national debt shall have been paid, among the States, in proportion to the number of their Representatives, to be applied by them to objects of internal improvement. 

Although this plan has met with favor in some portions of the Union, it has also elicited objections which merit deliberate consideration. A brief notice of these objections here will not, therefore, I trust, be regarded as out of place. 

They rest, as far as they have come to my knowledge, on the following grounds: first, an objection to the ration of distribution; second, an apprehension that the existence of such a regulation would produce improvident and oppressive taxation to raise the funds for distribution; 3rd, that the mode proposed would lead to the construction of works of a local nature, to the exclusion of such as are general and as would consequently be of a more useful character; and, last, that it would create a discreditable and injurious dependence on the part of the State governments upon the Federal power."

Jackson then addressed each one of these objections in detail.

1.  The distribution based on representatives was unfair.  Some argued that it should be based on each state's share of the country’s imports, or perhaps based on their share of the nation's GDP.  Other's argued that it should be based on the physical size of the state.   Jackson acknowledge these concerns and said that while preferred to have it based on representation, he was open to modifications to the distribution model.

"Of those who object to the ration of representatives as the basis of distribution, some insist that the importations of the respective States would constitute one that would be more equitable; and others again, that the extent of their respective territories would furnish a standard which would be more expedient and sufficiently equitable. The ration of representation presented itself to my mind, and it still does, as one of obvious equity, because of its being the ratio of contribution, whether the funds to be distributed be derived from the customs or from direct taxation. It does not follow, however, that its adoption is indispensable to the establishment of the system proposed. There may be considerations appertaining to the subject which would render a departure, to some extent, from the rule of contribution proper. Nor is it absolutely necessary that the basis of distribution be confined to 1 ground. It may, if in the judgment of those whose right it is to fix it it be deemed politic and just to give it that character, have regard to several."

2.  The promise of surplus funds would lead to oppressive taxation to generate local revenue.  Jackson disregarded the apprehensions that his plan would encourage wasteful or "improvident" spending bills.   In Jackson's opinion, the constitution provided sufficient checks and balances such that every abuse of power would "receive a speedy and effectual corrective at their hands" by voting them out of office.   It's hard to believe that Jackson is not being a bit facetious here, but he wrote that there was no doubt in his mind, that Congress would act in the best interests of the people and use the surplus funds for the common good.

"In my first message I stated it to be my opinion that "it is not probably that any adjustment of the tariff upon principles satisfactory to the people of the Union will until a remote period, if ever, leave the Government without a considerable surplus in the Treasury beyond what may be required for its current surplus". I have had no cause to change that opinion, but much to confirm it. Should these expectations be realized, a suitable fund would thus be produced for the plan under consideration to operate upon, and if there be no such fund its adoption will, in my opinion, work no injury to any interest; for I can not assent to the justness of the apprehension that the establishment of the proposed system would tend to the encouragement of improvident legislation of the character supposed. What ever the proper authority in the exercise of constitutional power shall at any time here after decide to be for the general good will in that as in other respects deserve and receive the acquiescence and support of the whole country, and we have ample security that every abuse of power in that regard by agents of the people will receive a speedy and effectual corrective at their hands. The views which I take of the future, founded on the obvious and increasing improvement of all classes of our fellow citizens in intelligence and in public and private virtue, leave me without much apprehension on that head. 

I do not doubt that those who come after us will be as much alive as we are to the obligation upon all the trustees of political power to exempt those for whom they act from all unnecessary burthens, and as sensible of the great truth that the resources of the nation beyond those required for immediate and necessary purposes of Government can no where be so well deposited as in the pockets of the people."

3.  The plan would favor "construction of works of a local nature" over national projects.   Jackson understood that at times, the interests of one state may conflict with the interests of the nation.  The concern was that if states had control over the surplus funds, then they would always choose to spend it on projects that benefit the state, not the nation, leaving projects of national concern unfunded.   Jackson suggested that Congress could establish quota's or controls on how much of the money state's could use on local projects, but that may not be necessary.   Jackson suggested  that each state acting in their own self-interest would seek to improve trade with their neighbors and thereby increase the wealth and comfort of themselves and their surrounding states.  The strength of the nation was not to be found in the federal government, but rather the "strength as well as the true glory of the Confederacy is founded on the prosperity and power of the several independent sovereignties".  The role of the federal government was not to restrict or control the states, but to facilitate active cooperation among them.   Jackson added that many of these projects that were so-called  of  "national concernment" often ended up being rejected by the majority of the people anyways.

More importantly, Jackson's plan would allow the money to be spent locally under the State legislatures.  As such, it would be more likely to suit the needs of the people and be spent in a more efficient manner.  In such a vast nation as ours, it's difficult to imagine that the U.S. Congress could be expected to deliberate on what is best for each state and for each community in the states.   If left to Congress, the funds would most likely be spent in the population centers where they could deliver the most immediate benefit to the law makers.  In other words, Congress would tend to use the funds to chase votes.

"It may some times happen that the interests of particular States would not be deemed to coincide with the general interest in relation to improvements within such States. But if the danger to be apprehended from this source is sufficient to require it, a discretion might be reserved to Congress to direct to such improvements of a general character as the States concerned might not be disposed to unite in, the application of the quotas of those States, under the restriction of confining to each State the expenditure of its appropriate quota. It may, however, be assumed as a safe general rule that such improvements as serve to increase the prosperity of the respective States in which they are made, by giving new facilities to trade, and thereby augmenting the wealth and comfort of their inhabitants, constitute the surest mode of conferring permanent and substantial advantages upon the whole. The strength as well as the true glory of the Confederacy is founded on the prosperity and power of the several independent sovereignties of which it is composed and the certainty with which they can be brought into successful active cooperation through the agency of the Federal Government. 

It is, more over, within the knowledge of such as are at all conversant with public affairs that schemes of internal improvement have from time to time been proposed which, from their extent and seeming magnificence, were readily regarded as of national concernment, but which upon fuller consideration and further experience would now be rejected with great unanimity. 

That the plan under consideration would derive important advantages from its certainty, and that the moneys set apart for these purposes would be more judiciously applied and economically expended under the direction of the State legislatures, in which every part of each State is immediately represented, can not, I think, be doubted. In the new States particularly, where a comparatively small population is scattered over an extensive surface, and the representation in Congress consequently very limited, it is natural to expect that the appropriations made by the Federal Government would be more likely to be expended in the vicinity of those numbers through whose immediate agency they were obtained than if the funds were placed under the control of the legislature, in which every county of the State has its own representative. This supposition does not necessarily impugn the motives of such Congressional representatives, nor is it so intended. We are all sensible of the bias to which the strongest minds and purest hearts are, under such circumstances, liable."

4.  The plan would create a harmful dependency between states and the federal government.   Jackson rejected this supposition and wrote that the "very reverse" would occur.  He rejected any sense that there is a danger to a state that received a share of the public funds based on its fair proportion.   Since each state already lobbies for its share of the National Treasury, Jackson remarked that it doesn't take much thought to understand which of the two models is more likely to create a dependency.  Touché Jackson.

"In respect to the last objection -- its probable effect upon the dignity and independence of State governments -- it appears to me only necessary to state the case as it is, and as it would be if the measure proposed were adopted, to show that the operation is most likely to be the very reverse of that which the objection supposes. 

In the one case the State would receive its quota of the national revenue for domestic use upon a fixed principle as a matter of right, and from a fund to the creation of which it had itself contributed its fair proportion. Surely there could be nothing derogatory in that. As matters now stand the States themselves, in their sovereign character, are not unfrequently petitioners at the bar of the Federal Legislature for such allowances out of the National Treasury as it may comport with their pleasure or sense of duty to bestow upon them. It can not require argument to prove which of the two courses is most compatible with the efficiency or respectability of the State governments."

The Time to Move Forward is Now.

Jackson concluded that despite these objections he could offer no reason why Congress should not move forward with his plan.  Our nation is strong, our constitution is strong, and the patriotism of our people is strong.  If the framers of our constitution could overcome their differences, then the nation can do the same today.  Jackson wrote:  "Unless the American people have degenerated, the same result can be again effected".  No system is perfect, and no one should expect that the federal surplus funds would be distributed in perfect equality.  Inequality is not always injustice.   Jackson was confident that the people of the United States would tolerate slight differences in order to preserve their freedoms that other in this world have given their lives in vain to achieve.

"But all these are matters for discussion and dispassionate consideration. That the desired adjustment would be attended with difficulty affords no reason why it should not be attempted. The effective operation of such motives would have prevented the adoption of the Constitution under which we have so long lived and under the benign influence of which our beloved country has so signally prospered. The framers of that sacred instrument had greater difficulties to overcome, and they did overcome them. The patriotism of the people, directed by a deep conviction of the importance of the Union, produced mutual concession and reciprocal forbearance. Strict right was merged in a spirit of compromise, and the result has consecrated their disinterested devotion to the general weal. Unless the American people have degenerated, the same result can be again effected when ever experience points out the necessity of a resort to the same means to uphold the fabric which their fathers have reared. 

It is beyond the power of man to make a system of government like ours or any other operate with precise equality upon States situated like those which compose this Confederacy; nor is inequality always injustice. Every State can not expect to shape the measures of the General Government to suit its own particular interests. The causes which prevent it are seated in the nature of things, and can not be entirely counteracted by human means. Mutual forbearance becomes, therefore, a duty obligatory upon all, and we may, I am confident, count upon a cheerful compliance with this high injunction on the part of our constituents. It is not to be supposed that they will object to make such comparatively inconsiderable sacrifices for the preservation of rights and privileges which other less favored portions of the world have in vain waded through seas of blood to acquire."

Enemies of the People

Before leaving this subject, Jackson left a message for those who wish to "foment sectional prejudices".   Jackson called any who seek to weaken the influence of those who wish to preserve the union by formenting sectional prejudices were enemies of the people.   Jackson also called out those partisan politicians who used sectional prejudices to gain power.  If the same energy that was used to prop up a political party would be applied to the "eradication of local discontent" and finding ways for the government to serve the people better, the task of removing sectional differences would be so much easier.

“Our course is a safe one if it be but faithfully adhered to. Acquiescence in the constitutionally expressed will of the majority, and the exercise of that will in a spirit of moderation, justice, and brotherly kindness, will constitute a cement which would for ever preserve our Union. Those who cherish and inculcate sentiments like these render a most essential service to their country, while those who seek to weaken their influence are, how ever conscientious and praise worthy their intentions, in effect its worst enemies. 

If the intelligence and influence of the country, instead of laboring to foment sectional prejudices, to be made subservient to party warfare, were in good faith applied to the eradication of causes of local discontent, by the improvement of our institutions and by facilitating their adaptation to the condition of the times, this task would prove 1 of less difficulty. May we not hope that the obvious interests of our common country and the dictates of an enlightened patriotism will in the end lead the public mind in that direction?"

Willing to Consider Alternatives (so long as they lead to extinguishing the debt)

Jackson remained confident in his plan, but he was willing to consider alternatives.   No plan is ever "wholly free form objection", but anything was better than the current. Here I believe Jackson is referring to how each state tries to curry favor with the federal government to  fund their pet project.  Jackson finished up this section with an invitation to Congress to come back with a new or modified plan.  Jackson promised to support any plan that helped to eliminate the growing sectional divide in the country and above all would "lead to the extinguishment of the national debt in the shortest period".

“After all, the nature of the subject does not admit of a plan wholly free from objection. That which has for some time been in operation is, perhaps, the worst that could exist, and every advance that can be made in its improvement is a matter eminently worthy of your most deliberate attention. 

It is very possible that one better calculated to effect the objects in view may yet be devised. If so, it is to be hoped that those who disapprove the past and dissent from what is proposed for the future will feel it their duty to direct their attention to it, as they must be sensible that unless some fixed rule for the action of the Federal Government in this respect is established the course now attempted to be arrested will be again resorted to. Any mode which is calculated to give the greatest degree of effect and harmony to our legislation upon the subject, which shall best serve to keep the movements of the Federal Government within the sphere intended by those who modeled and those who adopted it, which shall lead to the extinguishment of the national debt in the shortest period and impose the lightest burthens upon our constituents, shall receive from me a cordial and firm support."

Just five years later, in 1835, America paid off it's debt and surplus was a reality.

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 25 Feb. 2019].