An additional reason for the increase of duties in some instances beyond the rate of 20 per cent will exist in fulfilling the recommendations already made, and now repeated, of making adequate appropriations for the defenses of the country.

By the express provision of the act distributing the proceeds of the sales of the public lands among the States its operation is ipso facto to cease so soon as the rate of the duties shall exceed the limits prescribed in the act.

In recommending the adoption of measures for distributing the proceeds of the public lands among the States at the commencement of the last session of Congress such distribution was urged by arguments and considerations which appeared to me then and appear to me now of great weight, and was placed on the condition that it should not render necessary any departure from the act of 1833.  It is with sincere regret that I now perceive the necessity of departing from that act, because I am well aware that expectations justly entertained by some of the States will be disappointed by any occasion which shall withhold from them the proceeds of the lands.  But the condition was plainly expressed in the message and was inserted in terms equally plain in the law itself, and amidst the embarrassments which surround the country on all sides and beset both the General and the State Governments it appears to me that the object first and highest in importance is to establish the credit of this Government and to place it on durable foundations, and thus afford the most effectual support to the credit of the States, equal at least to what it would receive from a direct distribution of the proceeds of the sales of the public lands.

When the distribution law was passed there was reason to anticipate that there soon would be a real surplus to distribute.  On that assumption it was in my opinion a wise, a just, and a beneficent measure.  But to continue it in force while there is no such surplus to distribute and when it is manifestly necessary not only to increase the duties, but at the same time to borrow money in order to liquidate the public debt and disembarrass the public Treasury, would cause it to be regarded as an unwise alienation of the best security of the public creditor, which would with difficulty be excused and could not be justified.

Causes of no ordinary character have recently depressed American credit in the stock market of the world to a degree quite unprecedented.  I need scarcely mention the condition of the banking institutions of some of the States, the vast amount of foreign debt contracted during a period of wild speculation by corporations and individuals, and, above all, the Doctrine of repudiation of contracts solemnly entered into by States, which, although as yet applied only under circumstances of a peculiar character and generally rebuked with severity by the moral sense of the community, is yet so very licentious and, in a Government depending