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But the squandering of the public money sinks into comparative insig. nificance as a temptation to corruption when compared with the squandering of the public lands.

No nation in the tide of time has ever been blessed with so rich and noble an inheritance as we enjoy in the public lands. In administering this important trust, whilst it may be wise to grant portions of them for the improvement of the remainder, yet we should never forget that it is our cardinal policy to reserve these lands, as much as may be, for actual settlers, and this at moderate prices. We shall thus not only best promote the prosperity of the new States and Territories, by furnishing them a hardy and independent race of honest and industrious citizens, but shall secure homes for our children and our children's children, as well as for those exiles from foreign shores who may seek in this country to improve their condition and to enjoy the blessings of civil and religious liberty. Such emigrants have done much to promote the growth and prosperity of the country. They have proved faithful both in peace and in war. After becoming citizens they are entitled, under the Constitution and laws, to be placed on a perfect equality with native-born citizens, and in this character they should ever be kindly recognized.

The Federal Constitution is a grant from the States to Congress of certain specific powers, and the question whether this grant should be liberally or strictly construed has more or less divided political parties from the beginning. Without entering into the argument, I desire to state at the commencement of my Administration that long experience and observation have convinced me that a strict construction of the powers of the Government is the only true, as well as the only safe, theory of the Constitution. Whenever in our past history doubtful powers have been exercised by Congress, these have never failed to produce injurious and unhappy consequences. Many such instances might be adduced if this were the proper occasion. Neither is it necessary for the public service to strain the language of the Constitution, because all the great and useful powers required for a successful administration of the Government, both in peace and in war, have been granted, either in express terms or by the plainest implication.

Whilst deeply convinced of these truths, I yet consider it clear that under the war-making power Congress may appropriate money toward the construction of a military road when this is absolutely necessary for the defense of any State or Territory of the Union against foreign invasion. Under the Constitution Congress has power to declare war," "to raise and support armies," "to provide and maintain a navy," and to call forth the militia to "repel invasions.” Thus endowed, in an ample manner, with the war-making power, the corresponding duty is required that "the United States shall protect each of them (the States] against invasion.” Now, how is it possible to afford this protection t California and our Pacific possessions except by means of a military roau

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through the Territories of the United States, over which men and munitions of war may be speedily transported from the Atlantic States to meet and to repel the invader? In the event of a war with a naval power much stronger than our own we should then have no other available access to the Pacific Coast, because such a power would instantly close the route across the isthmus of Central America. It is impossible to conceive that whilst the Constitution has expressly required Congress to defend all the States it should yet deny to them, by any fair construction, the only possible means by which one of these States can be defended. Besides, the Government, ever since its origin, has been in the constant practice of constructing military roads. It might also be wise to consider whether the love for the Union which now animates our fellow-citizens on the Pacific Coast may not be impaired by our neglect or refusal to provide for them, in their remote and isolated condition, the only means by which the power of the States on this side of the Rocky Mountains can reach them in sufficient time to “protect” them “against invasion.” I forbear for the present from expressing an opinion as to the wisest and most economical mode in which the Government can lend its aid in accomplishing this great and necessary work. I believe that many of the difficulties in the way, which now appear formidable, will in a great degree vanish as soon as the nearest and best route shall have been satisfactorily ascertained.

It may be proper that on this occasion I should make some brief remarks in regard to our rights and duties as a member of the great family of nations. In our intercourse with them there are some plain principles, approved by our own experience, from which we should never depart. We ought to cultivate peace, commerce, and friendship with all nations, and this not merely as the best means of promoting our own material interests, but in a spirit of Christian benevolence toward our fellow-men, wherever their lot may be cast. Our diplomacy should be direct and frank, neither seeking to obtain more nor accepting less than is our due. We ought to cherish a sacred regard for the independence of all nations, and never attempt to interfere in the domestic concerns of any unless this shall be imperatively required by the great law of selfpreservation. To avoid entangling alliances has been a maxim of our policy ever since the days of Washington, and its wisdom no one will attempt to dispute. In short, we ought to do justice in a kindly spirit to all nations and require justice from them in return.

It is our glory that whilst other nations have extended their dominions by the sword we have never acquired any territory except by fair purchase or, as in the case of Texas, by the voluntary determination of a brave, kindred, and independent people to blend their destinies with our own. Even our acquisitions from Mexico form no exception. Unwilling to take advantage of the fortune of war against a sister republic, we purchased these possessions under the treaty of peace for a sum

which was considered at the time a fair equivalent. Our past history forbids that we shall in the future acquire territory unless this be sanctioned by the laws of justice and honor. Acting on this principle, no nation will have a right to interfere or to complain if in the progress of events we shall still further extend our possessions. Hitherto in all our acquisitions the people, under the protection of the American flag, have enjoyed civil and religious liberty, as well as equal and just laws, and have been contented, prosperous, and happy. Their trade with the rest of the world has rapidly increased, and thus every commercial nation has shared largely in their successful progress.

I shall now proceed to take the oath prescribed by the Constitution, whilst humbly invoking the blessing of Divine Providence on this great people.

MARCH 4, 1857.

FIRST ANNUAL MESSAGE.

WASHINGTON, December 8, 1857. Fellow-Citizens of the Senate and House of Representatives:

In obedience to the command of the Constitution, it has now become my duty "to give to Congress information of the state of the Union and recommend to their consideration such measures” as I judge to be "necessary and expedient."

But first and above all, our thanks are due to Almighty God for the numerous benefits which He has bestowed upon this people, and our united prayers ought to ascend to Him that He would continue to bless our great Republic in time to come as He has blessed it in time past. Since the adjournment of the last Congress our constituents have enjoyed an unusual degree of health. The earth has yielded her fruits abundantly and has bountifully rewarded the toil of the husbandman. Our great staples have commanded high prices, and up till within a brief period our manufacturing, mineral, and mechanical occupations have largely partaken of the general prosperity. We have possessed all the elements of material wealth in rich abundance, and yet, notwithstanding all these advantages, our country in its monetary interests is at the present moment in a deplorable condition. In the midst of unsurpassed plenty in all the productions of agriculture and in all the elements of national wealth, we find our manufactures suspended, our public works retarded, our private enterprises of different kinds abandoned, and thousands of useful laborers thrown out of employment and reduced to want. The revenue of the Government, which is chiefly derived from duties on imports from abroad, has been greatly reduced, whilst the appropriations

made by Congress at its last session for the current fiscal year are very large in amount.

Under these circumstances a loan may be required before the close of your present session; but this, although deeply to be regretted, would prove to be only a slight misfortune when compared with the suffering and distress prevailing among the people. With this the Government can not fail deeply to sympathize, though it may be without the power to extend relief.

It is our duty to inquire what has produced such unfortunate results and whether their recurrence can be prevented. In all former revulsions the blame might have been fairly attributed to a variety of cooperating causes, but not so upon the present occasion. It is apparent that our existing misfortunes have proceeded solely from our extravagant and vicious system of paper currency and bank credits, exciting the people to wild speculations and gambling in stocks. These revulsions must continue to recur at successive intervals so long as the amount of the paper currency and bank loans and discounts of the country shall be left to the discretion of 1,400 irresponsible banking institutions, which from the very law of their nature will consult the interest of their stockholders rather than the public welfare.

The framers of the Constitution, when they gave to Congress the power “to coin money and to regulate the value thereof” and prohibited the States from coining money, emitting bills of credit, or making anything but gold and silver coin a tender in payment of debts, supposed they had protected the people against the evils of an excessive and irredeemable paper currency. They are not responsible for the existing anomaly that a Government endowed with the sovereign attribute of coining money and regulating the value thereof should have no power to prevent others from driving this coin out of the country and filling up the channels of circulation with paper which does not represent gold and silver.

It is one of the highest and most responsible duties of Government to insure to the people a sound circulating medium, the amount of which ought to be adapted with the utmost possible wisdom and skill to the wants of internal trade and foreign exchanges. If this be either greatly above or greatly below the proper standard, the marketable value of every man's property is increased or diminished in the same proportion, and injustice to individuals as well as incalculable evils to the community are the consequence.

Unfortunately, under the construction of the Federal Constitution which has now prevailed too long to be changed this important and delicate duty has been dissevered from the coining power and virtually transferred to more than 1,400 State banks acting independently of each other and regulating their panas issues almost exclusively by a regard to the present interest of their stockholders. Exercising the sovereign

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power of providing a paper currency instead of coin for the country, the first duty which these banks owe to the public is to keep in their vaults a sufficient amount of gold and silver to insure the convertibility of their notes into coin at all times and under all circumstances. No bank ought ever to be chartered without such restrictions on its business as to secure this result. All other restrictions are comparatively vain. This is the only true touchstone, the only efficient regulator of a paper currency—the only one which can guard the public against overissues and bank suspensions. As a collateral and eventual security, it is doubtless wise, and in all cases ought to be required, that banks shall hold an amount of United States or State securities equal to their notes in circulation and pledged for their redemption. This, however, furnishes no adequate security against overissues. On the contrary, it may be perverted to inflate the currency. Indeed, it is possible by this means to convert all the debts of the United States and State Governments into bank notes, without reference to the specie required to redeem them. However valuable these securities may be in themselves, they can not be converted into gold and silver at the moment of pressure, as our experience teaches, in sufficient time to prevent bank suspensions and the depreciation of bank notes. In England, which is to a considerable extent a paper-money country, though vastly behind our own in this respect, it was deemed advisable, anterior to the act of Parliament of 1844, which wisely separated the issue of notes from the banking department, for the Bank of England always to keep on hand gold and silver equal to one-third of its combined circulation and deposits. If this proportion was no more than sufficient to secure the convertibility of its notes with the whole of Great Britain and to some extent the continent of Europe as a field for its circulation, rendering it almost impossible that a sudden and immediate run to a dangerous amount should be made upon it, the same proportion would certainly be insufficient under our banking system. Each of our 1,400 banks has but a limited circumference for its circulation, and in the course of a very few days the depositors and note holders might demand from such a bank a sufficient amount in specie to compel it to suspend, even although it had coin in its vaults equal to one-third of its immediate liabilities. And yet I am not aware, with the exception of the banks of Louisiana, that any State bank throughout the Union has been required by its charter to keep this or any other proportion of gold and silver compared with the amount of its combined circulation and deposits. What has been the consequence? In a recent report made by the Treasury Department on the condition of the banks throughout the different States, according to returns dated nearest to January, 1857, the aggregate amount of actual specie in their vaults is $58,349,838, of their circulation $214,778,822, and of their deposits $230,351,352. Thus it appears that these banks in the aggregate have considerably less than one dollar in seven of gold and silver compared with their circulation and deposits. It was palpable,

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