1833 Andrew Jackson - Preserving a Legacy - Retiring the Federal Debt

1833 was prosperous year for America, but a contentious one for Andrew Jackson. After making final payments of the Nation’s debt, the Treasury was still expecting to see a surplus that year, yet Jackson was at odds with a Congress which now had an eight-vote majority over his own Democratic party.  After the 1832 election, Jackson withdrew federal deposits form the US Bank to a number of state banks setting off a war with his opponents.  Chief among them was Henry Clay, whom Jackson defeated in the 1832 election, and Jackson knew they were scheming to undo his presidency.  Perhaps, that is why in his State of the Union Address, Jackson said " if Providence permits me to meet you at another session I shall have the high gratification of announcing to you that the national debt is extinguished."   It was a momentous opportunity and Jackson was not going to let his opponents destroy his legacy of eliminating the debt.   Despite fighting two very costly wars "with one of the most powerful kingdoms in the world", America was about to become debt free.  Andrew Jackson, a general in one of those wars noted that some who fought honorably in both the Revolutionary war and the War of 1812 would live to see the day when the debts of these wars extinguished.  

There were now only two things that could ruin his legacy.  The first would be an out of control Congress who would foolishly and lavishly indulge in the spending of the public treasure.  The second would be a Congress that eliminates the present tariff of duties.  Jackson believed that the rates set by the previous session of Congress as a matter of compromise and "unusual unanimity" were  just right and in need of no changes.  Jackson pleaded with Congress to control spending: "I must earnestly and respectfully press upon Congress the importance of abstaining from all appropriations which are not absolutely required for the public interest and authorized by the powers clearly delegated to the United States".  Times were good, and the nation was flourishing, but Jackson could not stress enough the need to keep spending down.  In doing so, the nation could finally see a full retirement of the national debt.   On the other hand, if spending is not curtailed the government would be forced to once again raise taxes to meet the "unnecessary expenditures".  Eliminating the debt would be Jackson's legacy, but any need to raise taxes in the future would be the fault of a Congress that would "indulge in a lavish expenditure of the public treasure".

"It gives me great pleasure to congratulate you upon the prosperous condition of the finances of the country, as will appear from the report which the Secretary of the Treasury will in due time lay before you. The receipts into the Treasury during the present year will amount to more than $32,000,000. The revenue derived from customs will, it is believed, be more than $28,000,000, and the public lands will yield about $3,0900,000. The expenditures within the year for all objects, including $2,572,240.99 on account of the public debt, will not amount to $25,000,000, and a large balance will remain in the Treasury after satisfying all the appropriations chargeable on the revenue for the present year. 

The measures taken by the Secretary of the Treasury will probably enable to pay off in the course of the present year the residue of the exchanged 4.5% stock, redeemable on 1834-01-01. It has therefore been included in the estimated expenditures of this year, and forms a part of the sum above stated to have been paid on account of the public debt. The payment of this stock will reduce the whole debt of the United States, funded and unfunded, to the sum of $4,760,082.08, and as provision has already been made for the 4.5% stocks above mentioned, and charged in the expenses of the present year, the sum last stated is all that now remains of the national debt; and the revenue of the coming year, together with the balance now in the Treasury, will be sufficient to discharge it, after meeting the current expenses of the Government. Under the power given to the commissioners of the sinking fund, it will, I have no doubt, be purchased on favorable terms within the year. 

From this view of the state of the finances and the public engagements yet to be fulfilled you will perceive that if Providence permits me to meet you at another session I shall have the high gratification of announcing to you that the national debt is extinguished. I can not refrain from expressing the pleasure I feel at the near approach of that desirable event. The short period of time within which the public debt will have been discharged is strong evidence of the abundant resources of the country and of the prudence and economy with which the Government has heretofore been administered. We have waged two wars since we became a nation, with one of the most powerful kingdoms in the world, both of them undertaken in defense of our dearest rights, been successfully prosecuted and honorably terminated; and many of those who partook in the first struggle as well as in the second will have lived to see the last item of the debt incurred in these necessary but expensive conflicts faithfully and honestly discharged. And we shall have the proud satisfaction of bequeathing to the public servants who follow us in the administration of the Government the rare blessing of a revenue sufficiently abundant, raised without injustice or oppression to our citizens, and unencumbered with any burdens but what they themselves shall think proper to impose upon it. 

The flourishing state of the finances ought not, however, to encourage us to indulge in a lavish expenditure of the public treasure. The receipts of the present year do not furnish the test by which we are to estimate the income of the next. The changes made in our revenue system by the acts of Congress of 1832 and 1833, and more especially by the former, have swelled the receipts of the present year far beyond the amount to be expected in future years upon the reduced tariff of duties. The shortened credits on revenue bonds and the cash duties on woolens which were introduced by the act of 1832, and took effect on 1832-03-04, have brought large sums into the Treasury in 1833, which, according to the credits formerly given, would not have been payable until 1834, and would have formed a part of the income of that year. These causes would of themselves produce a great diminution of the receipts in the year 1834 as compared with the present one, and they will be still more diminished by the reduced rates of duties which take place on 1834-01-01 on some of the most important and productive articles.

Upon the best estimates that can be made the receipts of the next year, with the aid of the unappropriated amount now in the Treasury, will not be much more than sufficient to meet the expenses of the year and pay the small remnant of the national debt which yet remains unsatisfied. I can not, therefore, recommend to you any alteration in the present tariff of duties. The rate as now fixed by law on the various articles was adopted at the last session of Congress, as a matter of compromise, with unusual unanimity, and unless it is found to produce more than the necessities of the Government call for there would seem to be no reason at this time to justify a change. 

But while I forbear to recommend any further reduction of the duties beyond that already provided for by the existing laws, I must earnestly and respectfully press upon Congress the importance of abstaining from all appropriations which are not absolutely required for the public interest and authorized by the powers clearly delegated to the United States. We are beginning a new era in our Government. The national debt, which has so long been a burden on the Treasury, will be finally discharged in the course of the ensuing year. No more memory will afterwards be needed than what may be necessary to meet the ordinary expenses of the Government. Now, then, is the proper moment to fix our system of expenditure on firm and durable principles, and I can not too strongly urge the necessity of a rigid economy and an inflexible determination not to enlarge the income beyond the real necessities of the Government and not to increase the wants of the Government by unnecessary and profuse expenditures. 

If a contrary course should be pursued, it may happen that the revenue of 1834 will fall short of the demands upon it, and after reducing the tariff in order to lighten the burdens of the people, and providing for a still further reduction to take effect hereafter, it would be much to be deplored if at the end of another year we should find ourselves obliged to retrace our steps and impose additional taxes to meet unnecessary expenditures.

It is my duty on this occasion to call your attention to the destruction of the public building occupied by the Treasury Department, which happened since the last adjournment of Congress. A thorough inquiry into the causes of this loss was directed and made at the time, the result of which will be duly communicated to you. I take pleasure, however, in stating here that by the laudable exertions of the officers of the Department and many of the citizens of the District but few papers were lost, and none that will materially affect the public interest." 

In 1834, as the country neared the retirement of the debt, Jackson once again urged Congress not to eliminate the tariffs, Jackson suggested that if the tariffs were needed to maintain our "national rights and liberties", then Congress would cheerfully support them. Jackson argued that eliminating the debt was a matter of liberty. The more debt the government held the more burdens the government must place on the people. Jackson wrote, " it must be obvious that what ever is calculated to increase the burdens of Government without necessity must be fatal to all our hopes of preserving its true character."

"Free from public debt, at peace with all the world, and with no complicated interests to consult in our intercourse with foreign powers, the present may be hailed as the epoch in our history the most favorable for the settlement of those principles in our domestic policy which shall be best calculated to give stability to our Republic and secure the blessings of freedom to our citizens. 

Among these principles, from our past experience, it can not be doubted that simplicity in the character of the Federal Government and a rigid economy in its administration should be regarded as fundamental and sacred. All must be sensible that the existence of the public debt, by rendering taxation necessary for its extinguishment, has increased the difficulties which are inseparable from every exercise of the taxing power, and that it was in this respect a remote agent in producing those disturbing questions which grew out of the discussions relating to the tariff. If such has been the tendency of a debt incurred in the acquisition and maintenance of our national rights and liberties, the obligations of which all portions of the Union cheerfully acknowledged, it must be obvious that what ever is calculated to increase the burdens of Government without necessity must be fatal to all our hopes of preserving its true character. 

While we are felicitating ourselves, therefore, upon the extinguishment of the national debt and the prosperous state of our finances, let us not be tempted to depart from those sound maxims of public policy which enjoin a just adaptation of the revenue to the expenditures that are consistent with a rigid economy and an entire abstinence from all topics of legislation that are not clearly within the constitutional powers of the Government and suggested by the wants of the country. Properly regarded under such a policy, every diminution of the public burdens arising from taxation gives to individual enterprise increased power and furnishes to all the members of our happy Confederacy new motives for patriotic affection and support. But above all, its most important effect will be found in its influence upon the character of the Government by confining its action to those objects which will be sure to secure to it the attachment and support of our fellow citizens."

References

Presidency.ucsb.edu. (2020). Fifth Annual Message | The American Presidency Project. [online] Available at: https://www.presidency.ucsb.edu/documents/fifth-annual-message-2 [Accessed 8 Feb. 2020].                     

Presidency.ucsb.edu. (2020). Sixth Annual Message | The American Presidency Project. [online] Available at: https://www.presidency.ucsb.edu/documents/fifth-annual-message-3 [Accessed 3 May 2020].