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the western lands explain your disposition on this subject, and I am persuaded that the sooner that valuable fund can be made to contribute, along with other means, to the actual reduction of the public debt, the more salutary will the measure be to every public interest as well as the more satisfactory to our constituents.'

3.

WASHINGTON'S FOURTH ANNUAL MESSAGE, NOVEMBER 6, 1792.

"I entertain a strong hope that the state of the national Washington, 1792 finances is now sufficiently matured to enable you to enter upon a systematic and effectual arrangement for the regular redemption and discharge of the public debt, according to the right which has been reserved to the Government. No measure can be more desirable, whether viewed with an eye to its intrinsic importance, or to the general sentiment and wish of the nation."

4.

WASHINGTON'S SIXTH ANNUAL MESSAGE, 1794. “The time which has elapsed since the commencement of Washington, 1794 our fiscal measures, has developed our pecuniary resources so as to open the way for a definitive plan for the redemption of the public debt. It is believed that the result is such as to encourage Congress to consummate this work without delay. Nothing can more promote the permanent welfare of the nation, and nothing would be more grateful to our constituents. Indeed, whatever is unfinished of our system of public credit, cannot be benefited by procrastination; and, as far as inay be practicable, we ought to place that credit on grounds which cannot be disturbed, and to prevent that progressive accumulation of debt which must ultimately endanger all governments.

5.

WASHINGTON'S SEVENTH ANNUAL MESSAGE, 1795. “Whether measures may not be advisable to reinforce the Washington, 1795. provision for the redemption of the public debt, will naturally engage your examination. Congress have demonstrated their sense to be, and it were superfluous to repeat mine, that whatsoever will tend to accelerate the honorable extinc

tion of our public debt accords as much with the true interests of our country as with the general sense of our constituents.''

6.

Washington, 1796.

WASHINGTON'S EIGHTH ANNUAL MESSAGE, 1796. “A reinforcement of the existing provisions for discharging our public debt was mentioned in my address at the opening of the last session. Some preliminary steps were taken toward it, the maturing of which will, no doubt, engage your zealous attention during the present session. I will only add, that it will afford me a heartfelt satisfaction to concur in such further measures as will ascertain to our country the prospect of a speedy extinguishment of the debt. Posterity may have cause to regret if from any motive intervals of tranquillity are left unimproved for accelerating this valuable end.'

7

WASHINGTON'S FAREWELL ADDRESS.

Washington, 1796.

“As a very important source of strength and security, cherish public credit. One method of preserving it is to use it as sparingly as possible, avoiding occasions of expense by cultivating peace, but remembering, also, that timely disbursements to prepare for danger frequently prevent much greater disbursements to repel it; avoiding likewise the accumulation of debt, not only by shunning occasions of expense, but by vigorous exertions in time of peace to discharge the debts which unavoidable wars have occasioned, not ungenerously throwing upon posterity the burden which we ourselves ought to bear.

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President John
Adams, 1797.

"Since the decay of the feudal system, by which the public defense was provided for chiefly at the expense of individuals, the system of loans has been introduced; and as no nation can raise within the year by taxes sufficient sums for defense and for military operations in time of war, the sums loaned and debts contracted have necessarily become the subjects of what have been called funding systems. The consequences arising from the continued accumulation of public debts in other countries, ought to admonish us to be careful to prevent their growth in our own case. The national defense must be provided for as well as the support of Government, but both should be accomplished as much as possible by immediate taxes, and as little as possible by loans.''

9.

PRESIDENT JOHN QUINCY Adams's THIRD ANNUAL MESSAGE,

1827.

“The deep solicitude felt by our citizens of all classes President J. Q. throughout the Union for the total discharge of the public Adams, 1827. debt, will apologize for the earnestness with which I deem it my duty to urge this topic upon the consideration of Congress-of recommending to them again the observance of the strictest economy in the public funds."

10.

THE COUNTRY FREE FROM PUBLIC DEBT.

"President Jackson, in his seventh annual message to President JackCongress, December, 1835, made the following announce- son, 1835. ment: 'Since my last annual communication all the remains the country free of the public debt have been redeemed, or money has been from debt. placed in deposit for this purpose, whenever the creditors choose to receive it. All the other pecuniary engagements of the Government have been honorably and promptly fulfilled, and there will be a balance in the Treasury at the close of the present year of about nineteen millions of dollars.''

In 1834 and 1835 the country was entirely out of debt, Celebration of and in honor of the event a celebration was had in Wash- the event. ington on the 8th of January, 1835, the anniversary of the battle of New Orleans, at which were present about two hundred and fifty of the representative men of the country. Andrew Jackson, then President, was not himself present, but he sent the following sentiment:

The payment of the Public Debt: Let us commemorate it as an event which gives us increased power as a nation and reflects lustre on our Federal Union, of whose justice, fidelity, and wisdom, it is a glorious illustration."

James K. Polk, afterwards President of the United States, then first vice president of the occasion, in his remarks, said: “The day of the final payment of the national debt must be a day of national rejoicing. The only national debt that now remains is that debt of gratitude we owe to those who established and those who sustained our national freedom. We hail the extinguishment, at so early a period, of the public debt created by two wars, the one to purchase, the other to preserve and protect public liberty, as the result of a wise, economical, and patriotic adminis

tration of public affairs." St.rplus revenue On the first day of January, 1837, there was in the distributed to the Treasury a balance of $37,327,252 69; and of that amount,

by an act of Congress passed June, 1836, the sum of $28,101,644 91 was apportioned to and actually distributed among the several States.

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11.

PREMIUMS PAID TO REDEEM DEBTS BEFORE MATURITY.

Premiums paid for bonds.

On several occasions the Government has purchased its outstanding debts before maturity at large premiums in in coin. In 1842 at an average premium of 15-25 per cent.; in 1846 at 716 per cent.; in 1847 at 20% per cent.; and in 1848 at 2018. average. In some cases bonds were purchased at a premium as high as 23 per cent, in coin.

12.

REDUCTION OF THE EXISTING DEBT.

Reduction of exleting debt.

The public debt, as represented on the books of the Treasury Department, exclusive of Pacific Railway bonds and of accrued interest, (which until 1869 was not included in the debt statement,) and deducting therefrom the cash in the Treasury, reached its highest point March 1, 1866, when it stood at $2,707,856,000 22.

Immediately after the close of the Rebellion it was reduced by the proceeds of the sale of materials of war; and since then it has been further reduced by the surplus revenue of the Government until, on the first of September, 1872, it. stood, including accrued interest and interest due and unpaid, less cash in the Treasury, at $2,177,322,020 55; showing a reduction in five and a half years of $564,599,335 35.

By the operation of the Sinking Fund, the debt must continue to be reduced annually till it is finally extinguished. See page 82.

President Grant, in his inaugural address, March 4, 1869, said, in relation to the debt:

"A great debt has been contracted in securing to us and to our posterity the Union. The payment of this, principal and interest, as well as the return to a specie basis as soon as it can be accomplished without material detriment to the debtor class or to the country at large, must be provided for. To protect the national honor, every dollar of Government indebtedness should be paid in gold, unless otherwise stipulated in the contract."

13.

LIST OF ALL LOANS HERETOFORE CONTRACTED.

There can be no better evidence of the policy of the List of all Ir-ang country than the following complete list of all debts which have been contracted by the Government from 1776 to the present time, all of which have been fully paid and canceled or called in for payment, except so much as remains of those incurred since 1858, contracted mostly on account of the Rebellion, and which have been rapidly reduced since the establishment of peace, as fully set forth in the foregoing pages :

Title of Loan.

Act of authorization.

Amount issued.

Farmers General of France.......

December 23, 1776....

Loan of 18 million livres, France.. { December 23

, 1770;}

$181,500 00 3,267,000 00

1781 from Spain...... September 28, 1779...
10 million livres from France October 26, 1779

6......"
Balance of supplies due France...
Loan of 1782, Holland ....

174,017 13 1,815,000 00 1,089,000 00

24,332 86 2,000,000 00

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