The battle of the surplus has once more been fought on the floor of Congress. No constitutional or economical principle, it is true, could be settled by the mere fact of a temporary excess of receipts over expenditures the right of the general government, under the Federal compact, to take stock in a turnpike would have been just as complete had the treasury exhibited a chronic deficit, instead of a handsome surplus, when Andrew Jackson vetoed the Maysville Road Bill; the policy of protection, on the grounds on which it was urged and combated in 1832, would have been just as beneficial or baleful had the Secretary not been able to make both ends meet at the close of the year; nor was the expediency of holding the public lands at a price somewhat above the cost of survey and agency discussed so much with a view to present as to prospective revenue. And yet it is certain that, in fact, the decision of each of these fiercely contested questions was greatly influenced, though in principle not affected at all, by the accident of a favorable balance of the treasury from 1830 to 1833; and that underneath all the arguments of party leaders, the most potential element of the case was the popular knowledge of a large and increasing surplus.

The relation of receipts and expenditures had indeed become sufficiently remarkable to influence very decidedly the determination of the questions, how revenues should be raised, and how disbursed. The advocates of extreme protection had not then learned how to make a tariff so high as to defeat the purposes of revenue; and to their infinite chagrin and embarrassment found the money pouring into the treasury in such unmistakable excess as to render the pretence of a governmental necessity impossible, and to reduce the question of protecting American industry to pure economical principles. Hence the desperate efforts of Mr. Clay and his friends to commit the general government to a wholesome scheme of internal improvements which should absorb this uncomfortable surplus; hence the angry protests of the Southern States against the alleged and most undoubted sectionalism of the scheme of protection; hence nullification, and hence the compromise act of Mr. Clay. Had the receipts of the treasury barely sufficed to meet the necessary expenses of the government, the opposition to the then existing tariff never could have attained a dangerous height; the scheme of a general subscription to incorporated companies all over the Union never would have been presented; and the propriety of deriving revenue from the public lands would have passed unchallenged. The whole complication of 1832-33 might have been avoided, had the advocates of the “American system” originally insisted on a rate of duties sufficiently high to defeat the purposes of revenue.

But at the time we write of, the philosophy of high duties was not so well understood as it is now. From 1828 to 1830 inclusive, three years, the revenue had stood at about twenty-four millions and three quarters. But in 1831 the receipts jumped to twenty-eight millions and a half. In 1832 they rose to thirty-one millions and three quarters; and in 1833 to thirty-four millions. Meanwhile the ordinary expenditures of the government had been but twelve millions and a half in 1829, rising in 1830 to thirteen and a quarter; in 1831 to thirteen and three quarters; 1832 to sixteen and a half; and in 1833 to the maximum, twenty-two millions and three quarters, leaving still a surplus of eleven millions and a quarter, or one third of the government revenue. Such a flourishing condition of the finances had of course allowed large payments upon the small debt of those days. Nine millions had been paid in 1828; nine and three quarters in 1829; nine and a half in 1830; fourteen and three quarters in 1831; and seventeen millions, or more than one half of the total receipts, in 1832.

Unfortunately, too, at this juncture, while the receipts from customs were obstinately increasing year by year, and the expenditures, notwithstanding the friendly services of a Congress acting in the spirit of Mr. Clay’s famous resolution of 1807,1 hung at the inconsiderable total of twenty millions or so, this great resource, the debt, began to fail. The surplus of the five preceding years had made quick work of it; and the beginning of 1833 found the entire principal at but a trifle above seven millions. In vain did Mr. Hemphill’s committee, in 1831, in something like despair at the fast-accumulating surplus, resolve, “that it is expedient that the general government should continue to prosecute internal improvements by direct appropriations of money, or by subscriptions for stock in companies incorporated in the respective States.” Turnpikes, in those primitive and slow old days, were unfortunately not expensive. Had there been railroads to build at $48,000 a mile (second mortgage), a different story might have been to be told. As a resource to absorb a surplus of fifteen millions, turnpikes were as futile as Mrs. Partington’s mop against the incoming “Atlantical wave.” The plan of general subscription to all “deserving” joint-stock companies for some reason did not hit the public fancy the clamor for the reduction or removal of taxes which produced double the honest necessities of the government grew louder and fiercer; the extinction of the debt completed the discomfiture of the advocates of the existing tariff; South Carolina carried its exasperation to the point of insurrection; Mr. Clay introduced his compromise tariff; and the battle was over. As surely as any effect can be predicated of any cause, it was the surplus which broke the back of protection in 1832-33.

The same embarras de richesses is likely to set Congress by the ears the present session; and, with a longer or shorter period of agitation, to produce equally important changes in the fiscal policy of the government. It is difficult to fix exactly the surplus of the treasury for a single year, inasmuch as nations, like individuals, sometimes let little bills stand over; but it is fair to put the proper surplus of 1868-69 at fifty millions of dollars. This amount has been, in the main, well and properly applied to the reduction of the debt. Some may think that absolutely the best course was not pursued; but all will agree that, without so much as the outlines of a policy laid down by Congress, we are very fortunate in having no worse disposition of the annual surplus.

But when we come to calculate the probable receipts and expenditures of the present fiscal year, we find that we have a much more formidable surplus to deal with; one so enormous, in fact, as to render it almost impossible that the session should pass without substantial legislation for disposing of it. A surplus of fifty millions might perhaps be left to “run itself,” without a policy, and even without any legal authority for dealing with it. But a surplus of one hundred or one hundred and twenty-five millions would be rather too large to be ignored by the most happy-go-lucky of politicians, with the largest faith in Providence, and the smallest acquaintance with finance. In 1868-69, there was paid on account of bounties the sum of eighteen millions and a halt. But the bounties covered by existing laws are nearly all paid; and the disbursements on that account during the present year cannot exceed, if they reach, three millions. Last year we paid seven millions and a quarter for Alaska. If to the saving on these accounts we add the interest accruing from the sinking-fund, we have twenty-five millions added to the virtual resources of the treasury, irrespective of any decrease in the other expenditures of the government But the reduction that has taken place in all the departments and services cannot reasonably be calculated at less than an equal amount Indeed, the changes instituted, with so much courage and comprehension, in the army alone, would amply account for three fifths, if not two thirds, of this sum. The reduction from forty-five to twenty-five regiments of infantry—the annual cost of each regiment approximating a million of dollars—was, if we consider the extent of the reform, the many good, cowardly reasons that might have been urged against it, the instant seasonableness of the measure, and the effect which this example produced upon the whole service, one of the finest strokes of genius. An administrator of less courage than the present head of the army would have contented himself with dropping off half a dozen regiments this year and as many next year, protracting over four or five years what General Sherman effected within a week of inauguration-day. It was in carrying out the details of this magnificent scheme of retrenchment that Secretary Rawlins was enabled to perform such signal service to the nation.

A proportionate saving was hardly to be expected in the navy, or in any branch of the civil service; but no establishment, except the diplomatic, has escaped sharp and severe reduction. The changes in the Washington offices alone will save the government millions of dollars; while the same tightening hand has been felt in the remotest branch of the revenue and postal organizations. It is probable, indeed, that the retrenchment which has already taken place has gone quite as far as the real interests of the public service will allow; and that further reduction would not be found to be true economy. The first efforts of the administration have, naturally and properly enough, been almost altogether of the lower and cheaper kind of retrenchment, — the scrimping of men and supplies, and the putting of every service on an allowance with which it must get along as best it may. This is a kind of retrenchment which does not require large abilities, but only an unflinching purpose and a degree of obtuseness. In such retrenchment the most useful and least inflated establishments are commonly called upon to contribute as much as the less deserving; and considerable losses in efficiency must always be counted upon.

There is a higher kind of retrenchment, which requires comprehension and courage of no mean order; which consists, not in reducing offices to their minimum, but in consolidating establishments, detecting extensive duplications of power and agency, and bringing the force of government at every point dose to its work. Without, however, dwelling on the extensive possibilities opened at this point, it is perfectly safe to assume a saving in all the services and establishments of the government of not less than twenty-five millions from the total of the last year, even if the diplomatic service should escape any appreciable reduction.

All this discussion has taken for granted that the revenue will stand fast at the figures of the last year, that is, at three hundred and seventy millions. But there is no reason to doubt that the revenue, under existing laws, should very nearly approach four hundred millions. In the first place, the natural annual growth of the revenue of the country—what the English economists improperly style “elasticity”—ought to make up a third of the difference, and even more at the present time, when the Southern States are so rapidly returning to productive industry and the consumption of dutiable articles. It is not growth alone, however, that we have to look to. The revenue never has been fairly collected. The early months of the present administration exhibited the first vigorous and intelligent effort to enforce the laws, with a resulting gain of many millions for every month General Grant has been in office. Without, however, attempting to fix the gain of the revenue for another year from this source, we shall have enough for the purposes of this argument if we have show it to be reasonably probable that the receipts of 1869-70 would, with the present taxes, exceed the necessary expenditures of the government by a clear hundred millions, with a fair chance, or even a strong likelihood, of a surplus larger by many millions.

With a scheme of taxation constructed thus to yield easily a hundred millions over the demands of the government, no one, probably, would contend that the whole of that revenue could, as human and official nature go, be safely harvested; or that some portion of what might be brought into the treasury would not be lightly and unnecessarily spent, unless that surplus were already in advance so far engaged to a particular object—as, for example, the payment of the debt, and that, too, by a public and formal declaration of the government through its highest organs—as to make such an appropriation almost, in effect, one of the necessary expenditures of the year. With taxes which might yield ninety millions of dollars, or, under a more careful and rigid collection, a hundred millions, it is safe to say that it would not be the larger of those amounts which would be collected; while, at the other end, with a revenue thus calculated to exceed expenditures by ninety, or it might be, by only eighty millions of dollars, it is fair to assume that the surplus at the close of the year would be found to be, not ninety, but eighty.

That is, with a scheme of taxation calculated to yield a surplus of one hundred millions under stringent collections and careful disbursements, that surplus remaining unappropriated, ten millions would be a moderate estimate for the loss caused by the inevitable and indeed unconscious relaxing of effort and watchfulness on the part of the whole body of officials, high and low, engaged in collecting the revenue; while another ten millions would probably not be an exaggerated statement of the increased expenditures, in all the departments of government, due to the general knowledge of an enormous surplus not expressly pledged to any use. In other words, with a certain revenue, the government could remit fifty millions of taxes and pay fifty millions of debt, while if it sought to appropriate the whole receipts to the latter object, the end of the year might well find no more than eighty millions of the debt paid. No one familiar with the collection and disbursement of public moneys will doubt this statement

Nor is it enough that there should be a generally acknowledged duty, or a vaguely professed purpose, to devote whatever surplus might accrue to some particular object, as the payment of debt Large surpluses are not collected on such conditions; nor are the revenues of a state administered to the best advantage with such latitude of operation. In a period of rare honesty and energy it might be possible, as in the splendid start made by the present administration, to apply a vague and uncertain surplus to such uses as scrupulously as if a scanty revenue were being made to answer the urgent necessities of government; but such exertions are not to be expected of average finance ministers in ordinary times. Nothing did more to continue the extravagant expenditures of the war period, and to postpone the time when a searching and painful retrenchment should be instituted, than the fact of a practically unlimited revenue, — a revenue, that is, which no honest expenditure could begin to reach, and which even a wasteful administration of the finances could hardly exhaust. The proposition of Mr. Hooper of Massachusetts, to limit the prospective revenue strictly to three hundred millions, and then trust to the necessities of the situation to bring the expenditures within that mark, was at once a philosophical and a statesmanlike recognition of important laws of public conduct. We need to take one step farther, to make one more application of the same principle to the relations between receipts and expenditures in the immediate future. The relentless reduction of taxation has already borne excellent fruit in both the increased efficiency of collection and the heightened carefulness of disbursement; but the effect of that legislation is about exhausted. If we are to look for further improvement in the same direction, it must be by another turn of the same screw.

So much for a vague and unappropriated surplus. It is something for which we have to thank God, and not our own wisdom, if it be not plundered and wasted till little enough is left for the treasury or the public creditor. As it has happened, we have been compelled, since March, to try this method of reducing the debt, for want of a better; but there will be no excuse for us if we continue it through another season. When the present administration succeeded to power, nobody knew whether we were likely to have a surplus or not; and our legislators were perhaps excusable in declining to make provision for the disposal of it. But the first question of the present session unquestionably is the disposition of the surplus. It is not often in the history of the world that a legislature has had occasion to decide on the application of such an amount of revenue above all reasonable charges. No government ever before had the felicity of being enabled to dispose, on abstract principles, of a cool hundred millions of money.

And such legislation is not more a luxury than a necessity. The country, to speak plainly, will not submit to a scale of taxation calculated to yield such a surplus, without having it pretty distinctly agreed upon what is to be done with the money. The pressure of taxation is seriously felt; schemes for relief are popular; and the tax-payers are not in a humor to pay into the treasury a hundred millions to be used anyhow or nobody, according to circumstances or caprice. A moderate surplus is a strength to an administration; but, on the other hand, an excessive surplus excites discontent more quickly than the most unfavorable balance of the treasury; and nothing could be more threatening to the Republican ascendency than an attempt to maintain taxation admittedly disproportionate to the wants of the government, without at least as good a reason stated as the speedy extinguishment of the debt.

Is it, then, to be desired, on the most careful calculation of the resources of the country for the present and coming fiscal years, that the Secretary of the Treasury should be authorized to appropriate to the increase of the sinking-fund or the cancellation of the bonds all the money (the larger the amount the better, whether it be seventy-five or a hundred or a hundred and twenty-five millions) which can be got from the people, and which is not required for ordinary expenses? Is debt an evil in such a sense and to such a degree that the maximum of taxation is desirable to remove it? Would such a course promote or impair the chances of a full, final liquidation? Does the industrial condition of the country at the present time permit of such an effort?

There is certainly no more proper object of taxation than the payment of debt. Within the limits of prudence and strength, no one of the expenditures of government is more commendable. In fact, it is about the only expenditure that is looked upon as a subject of positive congratulation. There is no end for which it better becomes a free people to submit to sacrifice than this. But next to the duty of making steady and equable exertions to such an end is the duty of refraining from everything that is spasmodic and extravagant. Our national resources should be carefully measured, and our efforts adapted at once to the object in view and to our own strength. It would be but a sorry sequel to the payment of a hundred millions in 1870, to pay nothing whatever in 1871; and though the total of the debt might be the same, at the beginning of 1872, as if an equable payment of fifty millions a year had been maintained, it is not at all likely that the disposition of the people to bear future taxation for the purpose would be as good. Now, we firmly believe that it would not be as well for the ultimate payment of the debt, to have the entire possible surplus of the current fiscal year appropriated in this way. Such an undue effort could not but prejudice the cause it sought to advance. There are so many advocates of national dishonor, and their schemes are of such number, variety, and plausibility, that the friends of an honest liquidation have to treat the subject with as much of prudence as of vigor.

Indeed, if there is any question to be made in the matter, it is, whether fifty millions be not a disproportionate and excessive contribution to this purpose. Six months ago, the most strenuous advocate of an early payment would have been glad to compromise for a reduction of twenty-five millions annually, to begin with. Would it be wise to allow ourselves to be so far led away by the splendid success of the revenue in the past six months, as now to deem fifty millions too little? The administration no more owes the country a large reduction of the debt, than it owes the country a large reduction of taxation. If but one of the two things were possible, we should rather say that the latter should have preference. Now that both can be secured together, there can be no excuse for refusing the relief so earnestly demanded.

Unless, then, we have wholly mistaken the probabilities of the revenue for the coming year, and the temper of the country relative to taxation, a considerable part of the surplus, be it seventy-five or a hundred or a hundred and twenty-five millions, should be applied to the abatement or abolition of existing taxes. Which shall be the taxes to suffer this reduction, is a more complicated question, — endless, indeed, if it were to be discussed on the merits of the several imposts, or their fitness to form a connected scheme of contribution; but we shall choose to view it as a matter of popular feeling and public opinion, asking rather which taxes are likely to be removed than which ought to be removed.

From this point of view, the first tax to be considered is unquestionably that upon incomes. It is, in fact, the only one in which a change is absolutely certain. The present law expires by limitation in 1870, so that, if the tax is again to be collected, it must be by a re-enactment; and there is no reason to believe that this can be effected without large modifications. Yet, after all, it is fairly a question whether such modifications as are likely to take place can be considered as a reduction of taxation. It is not in the least improbable that an income tax at three per cent, but without some of the present irrational exemptions, would bring nearly if not quite as much money into the treasury as the present duty of five per cent. The fact is, the tax is too high, as the whiskey tax was last year. Five per cent is a great deal for only one form of taxation, when it is remembered what a small margin at best is allowed by the necessary expenses of living in these days. What a man must have requires so large a part of the income of all but the wealthy, that very little is left for pleasure or leisure. Take a representative income of twenty-five hundred dollars, with thirteen hundred dollars of exemption. At five per cent the tax is sixty dollars. Yet how few heads of families of that income ever have a dear sixty dollars, which they fed able to devote to a distinctly luxurious expenditure! For incomes of this class, it is not exaggeration to say that the tax absorbs the whole of what would otherwise be the pleasure-fund of the family; not a small sacrifice to make when it is remembered that the same tax-payer has already paid a hundred and fifty dollars, at the least, to the government in duties on foreign goods, while he has suffered from a general enhancement of prices, in consequence of State and Federal taxation, to twice that amount And it is really not the best finance to maintain the income tax at such a point, in ordinary times, as to constitute a grievance. An income tax is properly a war tax. It is so regarded in England. It should be kept up in time of peace; but at its minimum, not its maximum.

Yet while the reduction of the rate front five to three per cent would afford a great relief to every man who now honestly pays to the full amount of his liability, it is highly probable that the receipts from this source would be diminished little if any, especially if the measure were accompanied by others restricting the effect of the several exemptions. A great many people who now do not suspect the fact would find that they had incomes; while many of those who pay at present would not exercise half as much ingenuity in making the exemptions cover the ground. There is nothing better established than that men generally do not like to cheat, evade the law, expose themselves to penalties, or swear to questionable statements. At the same time, it is very easy so to construct the law as to make it morally certain that every second man in the community will do these things. The case of the whiskey duty is in point. In the fiscal year 1868, the tax was two dollars a gallon, and the amount collected was thirteen millions. In 1869, the duty was reduced to fifty cents, and the receipts rose to thirty-one millions. So fully is this principle of revenue proved by all financial experience, that we feel at liberty to assume that the difference would at the worst be halved between the tax-payers and the treasury. Of the thirty-four millions received from this tax last year, nine millions came from the income of corporations. For these there should be no reduction. The twenty-five millions received from the incomes of individuals would indicate a clear taxable income of five hundred millions. On this amount three per cent would yield fifteen millions, — a loss to the revenue of ten millions. But of this we may safely calculate that five millions would be recouped by a more honest assessment, provided the year were moderately favorable for industry.

Simultaneously, however, with the reduction of the rate, the present exemption of rent should be changed in an important degree. On general grounds there is no more reason why a man’s rent should be free from taxation than his grocer’s bill. Indeed, this exemption is peculiarly liable to objection, as giving the man who does not own his house an advantage over his neighbor who does, discouraging thus permanent investments, and in turn contributing to raise rents, already forced up almost beyond endurance by a combination of causes unfavorable to house-owning except for purposes of speculation.

But while the exemption of rent is thus theoretically false, it is practically advantageous up to a certain point, as affording the poorer classes a partial compensation against the grievous injustice of a non-graded tax. It is an anomaly: but many things are anomalies without being any the worn for it. The true idea of an income tax is that of the old Solonian law, which recognized five distinct grades of income, and assessed each at a different rate, according to the ability which it indicated in the citizen. But since this precious Constitution of ours, which is never heard of except to prevent some good thing from being done, is supposed to forbid graded taxation, we substantially effect the same result by allowing certain exemption from gross income. The $ 1,000 exemption is of this kind. Under it, an income of $1,000 pays nothing; one of $1,500 pays $25, or one and one third percent; one of $2000 pays $50, or two and a half per cent; one of $3,000 pays $100, or three and a third per cent; one of $5,000 pays $200, or four per cent; one of $10,000 pays $450, or four and one half per cent This is right, so far as it is carried. Now comes in the exemption of rent without limitation of amount. To the extent of two or three or possibly five hundred dollars, this also serves to reduce the injustice of a single rate of taxation. But when carried above this, the exemption becomes irrational and mischievous. There is no reason why a $1,000 or a $5,000 rent should be exempted. There is every reason why it should not. There is no more distinct form of luxury; none about which the person who indulges it is more at liberty to make his own choice as to the scale of expense; no kind of expenditure which it is less the interest of the state to encourage. Unfortunately we have no statistics whatever in regard to the income tax; but there is every reason to believe that the effect of this exemption is to reduce the revenue by many millions, and that its limitation to $500 would go far to counterbalance the reduction of the rate, while its limitation to $200 would actually increase the receipts.

It must not be supposed that, because we have figured out a loss to the revenue of but five millions or less on a present collection of thirty-four millions, the relief to the community is to be estimated in that ratio only. Under an onerous tax, it is doubtful which hates the law worse, the man who pays, or the man who is driven to fraud to escape payment. The present income tax is no more of a hardship (and it is much more of an injustice) than if it collected fifty millions. Under such a rate as we have proposed, those who now pay the first ten millions of the tax would probably pay but six; those who pay the next ten millions would pay but eight; those who pay the remaining fourteen millions (corporations namely, and the class that rent brownstone fronts) would pay about what they now do; while six millions would be paid by those who now pay nothing, and hate the government for it a little worse than if they paid their share.

Incomes being thus disposed of; and whiskey and tobacco remaining by the unanimous consent of all but the “rings” subject to their present reduced rates, the numerous minor taxes under the internal revenue acts would call for an endless discussion if they were to be treated each on its merits. But the public opinion which has been forming for a long time, and has been taking shape very rapidly of late, is not inclined to consider them on their merits, or consider them separately at all. These taxes are: general stamps for legal and commercial instruments, which yielded last year about eleven millions and three quarters; proprietary stamps, to be affixed to patent medicines, matches, etc., yielding about four millions, one half from matches alone; legacy and succession duties, which yielded last year about two millions and a half; and would yield twice as much but for the false appraisement of estates; the tax on gas companies, yielding two millions; taxes on articles in “Schedule A,” that is, such luxuries as billiard-tables, gold watches, and silver plate, yielding less than one million; the tax on the circulation and deposits of banks and bankers, which yielded above three millions in 1868-69 (the national banks paying directly into the treasury six millions of dollars in addition for their franchises); the tax on the gross receipts of corporations, like railroad, canal, and express companies, yielding six and a quarter millions; the tax on the premiums and assessments of insurance companies, yielding one million and a quarter; and lastly, an immense body of “special taxes,” which may be characterized by the single word licenses. The last taxes fall upon nearly all who exercise any art, profession, or calling, except preaching, — upon civil engineers, assayers, pedlers, photographers, and opera singers. These taxes yielded, last year, nine millions. One million and a half of the receipts from internal revenue for 1868-69 were from taxes now abolished. The remaining, which we have enumerated, yielded forty-nine millions. Incomes, whiskey, and tobacco produced one hundred and eight millions and a half, making up the grand total of the internal revenue, one hundred and fifty-nine millions.

It will be seen that, taken together, these minor and miscellaneous taxes yield no inconsiderable portion of the internal revenue. But they have always been regarded as essentially war taxes. Some of them savor too much of inspection and inquisition to be agreeable to our democratic spirit, and they excite constant resistance in collection. There is no slight danger of their all going over together, on the plea that they are too vexatious for the amount they yield, and that they hinder the freedom of transport and traffic. The prejudice against them is unquestionably a growing one, and the demand for their abolition, in view of the revenue surplus, is likely to be urgent and peremptory. Not a few of the leading politicians of the country have already taken ground in favor of collecting the entire inland revenue under the general heads, income, whiskey, and tobacco. It is clear, however, that this demand is not sufficiently discriminating. Much of the present complicated system of internal taxation must be given up; but a clear distinction exists between those taxes which are in restraint of trade and meddle with private business, and those which affect only corporations enjoying special privileges, and are thus proper subjects for taxation. The duties on gross receipts, on legacies and successions, on banks and insurance companies, and on the gas monopolists of cities, as well as the general stamp duties, ought to be retained, in justice alike to the treasury and to individual tax-payers. These together yielded twenty-six millions and a half last year; and, as it always happens that when one of two taxes is repealed the proceeds of the other increase, something more than this sum might be expected from them. The whole system of licenses, of proprietary stamps, of taxes on sales, of duties on private carriages and family silver, might properly be given up to the demand for reduction and retrenchment. This would amount to a remission of twenty-two millions and a half, in addition to the two or three millions that might be lost by the changes indicated in the income tax.

It may be thought that, having made away with twenty-five millions of the surplus by the repeal or reduction of taxes under the internal-revenue system, we have not much left in hand with which to effect the needed reform in the customs duties of the country. But it must be borne in mind that the most senseless and mischievous specifications of the tariff are those from which practically no revenue is derived. Hundreds of articles might be added to the free list, without reducing the receipts from customs by a million of dollars; and thousands without reducing the revenue from this source so much as one fifth. The judicious application of twenty millions of the surplus to the simplification of the tariff, while it would leave the scale of duties still inexcusably high and rigorous, while it would leave the battle of protection still to be fought out on other grounds, would yet be sufficient to abolish all that may be called the nuisances of the system; would clear the frame of the existing tariff of all the absurdities with which the greediness of every petty industry or possibility of an industry has overlaid it. The general plan of our protective system is consistent and intelligible enough, founded, as it is, simply on the distrust of art, progress, and mutuality of services; but it has been stuck all over with the most fantastic and contradictory features. No one can study our customs duties without wonder. It is evidently no work of a finance minister. It is difficult to believe that it could have been the result of the actual sessions and consultations of a committee, even the most variously and inharmoniously constituted. No idea pervades the whole; proportion and relation are utterly discarded; incongruity and disorder appear in every part. Special legislation certainly did its worst when the existing tariff laws of the United States were enacted. Almost every article for which the ingenuity of man has found a name appears upon the list. Of nearly four thousand specifications contained in Ogden’s Digest, twenty furnish half the revenue; three thousand five hundred at least are merely vexatious and mischievous.

Take the whole line of chemicals and drugs, for example. If any class of commodities should be made free of duty, these should. When used as medicines, they are the direst necessaries. Probably no expense that comes to a distressed family is more painfully felt than the outlay on this account. When used in the arts, they are the rawest of raw materials. Yet the existing tariff collects duties on hardly less than one thousand articles under this general head. Scarcely a single known substance, be it solid, liquid, or vapor, which can possibly he classed as a chemical, a drug, or a dye, escapes a tax, although there are hundreds of these articles which we do not ourselves produce, never did produce, and never shall produce. The total sum received from the entire class barely reaches four millions of dollars. A quarter of the specifications of the tariff are thus devoted to articles which yield one forty-fifth part of the revenue. For this purpose experts have to be kept at every important custom-house to ascertain whether pyroligneous acid be over or under 1.040 specific gravity; and an amount of testing and tasting, weighing and gauging, goes on which would be sufficient to collect the whole excise tax on whiskey, or the customs duties on sugar and molasses, which together produce thirty-five or forty millions a year. And all this annoyance is incurred by taxing articles which by every rational and consistent principle of protection ought to be admitted free of duty.

We dare say our “infant manufactures” would survive the shock should the acetate of ammonia cease to pay its annual contribution of two dollars and eighty cents, the acetate of baryta its one dollar and twenty, collodion its three dollars, aluminium its eighty cents, or benzine its forty cents. Can anything, indeed, surpass the absurdity of keeping up a tax for the purpose of collecting from forty millions of people such amounts as these, which are but ordinary instances of the character of many of the collections under the existing tariff? Is it not correct to call such impositions nuisances? What possible interests can be involved in them, except the grand interest of trade to have them all swept away? Suppose that powdered alabaster should abruptly cease to pay one dollar and forty cents into the treasury, what good thing would thereby cease from the earth? Is a tax of seventeen dollars and ten cents on glue absolutely necessary to sustain Mr. Spalding in his patriotic and union-saving enterprise? Would not our Yankee hens continue to lay, should ostrich eggs escape the exaction of six dollars and ninety cents which they paid in 1868? Might not the revenue of six dollars odd, now yielded by sour-krout, be surrendered as a graceful concession to the national susceptibilities of our German fellow-citizens? Would not yeast rise overnight if the foreign article remained untaxed? Is the tax of one dollar and eighty cents on heel-balls designed for the encouragement of any particular branch of industry, — and has it anything to do with the facility with which they are formed in damp snow? What effect had the collection of three dollars from apple-sauce, at our custom-houses, in 1868, upon the production of that delicious article of food? We could understand the duty on “Brazil bugs,” if we supposed that this was some new and ferocious species of insect, straight from the Amazon, marching upon the wheat-fields of the West or the apple-orchards of the East; but as we the rather conceive them to belong to some curious and interesting variety, and to be preserved in a way that renders them incapable of extensive harm to American agriculture, we really think the revenue might give up the twenty dollars derived from this source, and dismiss the entomological or bug clerk at the New York Custom-house. How much would the “exportation of our soil” be hastened by remitting the six dollars or so now obtained from alizarine? And, speaking of the soil, is it not odd enough to find that the government derived as much as $47.80, in 1868, from the importation of “garden earth”? What sort of policy is this, pray, to prohibit the soil of other countries from coming to us! What kind of protection is it which forbids us to supply the “waste” and “exhaustion” produced by exporting our grain, from the countries which are thus draining us of the very vital juices of our land? Garden earth certainly, if nothing else, should be made free of duty.

It is not alone these preposterous taxes, yielding from fifty cents to fifty dollars, which should be removed. There are many, yielding hundreds or thousands of dollars, which should go the same way. Trade cannot be worried for any such petty considerations. Impotent as these taxes are for good, they are yet capable of much mischief. Unquestionably government could raise the same revenue from fifty articles without disturbing the general values of the country half as much as by taxing four thousand articles.

High Prices is a milleped, an animal that goes upon a thousand small legs. Few of our readers but recollect when the horse-railroad companies all over the country put up their fares from five to six cents in consequence of the internal-revenue tax amounting to an eighth or tenth of a cent per passenger carried. Horse-railroad directors are no worse than other people, notwithstanding they get so much abuse. Trade always revenges itself in this way for hindrances and vexatious; and hence every petty tax, every minor imposition, should be swept away, and only those suffered to remain for which a substantial reason can be shown.

There is also a class of articles, yielding a million and a quarter to the revenue, which stand in a peculiar relation to our native industry. Of every other article recognized in the tariff laws (except, perhaps, Brazil bugs), it can be said that if we are to consume it, it were desirable enough that we should produce it; the only question being whether protection is the best way of accomplishing the result. But of lumber this can, in the present state of our country, be absolutely and unequivocally denied. It is not desirable that all our lumber should be of native growth. It is not desirable that any of it should be, when a foreign article can possibly be afforded at the same price. It is, therefore, not desirable that any restriction should be imposed upon the foreign article, or any encouragement held out for the more rapid consumption of the domestic supply. There was a time when “the axe of the pioneer” was the proper emblem of our advancing civilization. That stage has been passed in almost all our territory; and there is now more reason to fear that our soil will be impoverished, and the just distribution of heat and moisture fatally disturbed, by cutting don our forests, than to desire the further clearing of the land. There are, it is true, large sections where there is yet no danger of an early exhaustion; but in those sections and the country which they supply there is no occasion for protecting that interest Transportation is so great an element in the cost of lumber, that no timber-growing region needs to be fenced from the approach of the foreign article. It is in those sections which are equally distant from native and Canadian supply—indeed, so far as the cost of transportation is concerned, nearer the latter than the former—that the enhancement of price, consequent on the present exorbitant rates of duty, encourages the cutting of even the scant and insufficient covering of timber which nature has interposed to save the land from drought and sterility. Singular that philosophers who are so much afraid of having our “soil exported” should advocate a policy which would do more, in a generation, to exhaust the productive capability of the United States, than the export of a hundred million of wheat annually to the end of time!

In such warfare upon nature, the all-devastating Spaniards have hitherto enjoyed an evil pre-eminence. They turned the valley of Mexico from a garden into something very like a desert by cutting down the timber, and thus drying up the lakes. They did the same bad work in some section of the Pacific coast; and now, where the giant trunks of a former vegetation have scarcely rotted from the ground, there is not soil enough to bear the scantiest crop. They stripped the plains of even their own Castile of the noble forests that once covered them; and Castile has become comparatively fruitless under the curse of outraged nature. Hardly a European nation but has suffered, and is still suffering, from the same improvidence; hardly one but is striving at vast expense to re the waste, France, Italy, Belgium, Switzerland, England, are planting trees for very life, while we are encouraging the felling of the forests, which secure the proper distribution of heat and moisture, provide for the irrigation of the soil, and conduct any in nourishing showers the angry elements of hail, lightning, and tornado. Even in India, England has established a bureau for the sole purpose of restoring the forests, having found by painful experience that Nature, while the harmony of her parts and forces remains undisturbed, will perform the office of irrigation somewhat more cheaply than an elaborate system of wind-mills, reservoirs, and canals. We certainly ought to profit by the experience of so many countries. Already there are few of the Northern and Western States that would not be the better for laws passed in restraint of “clearing”; yet Nature, with the most benevolent intention, has placed an almost inexhaustible supply in the regions farther north, with a system of water-courses admirably adapted to bring the timber to our very shops.

The salt duty is another of those indefensible imposts which must give way under an accumulating odium, since there can no longer be urged any excuse for their continuance on the score of revenue. The damaging exposure of this monopoly which Commissioner Wells made in his Annual Report for 1868 must we believe, kill the tax. The simple exhibit of the profits of the Syracuse company, by which they have been enabled to increase their capital tenfold in half as many years, through the monopoly of one of the commonest necessaries of life, makes all argument on the subject seem tame. It is not possible that anything more than an exposure of such a state of things is necessary to bring it to an end. The salt tax is one of the abominations of the present tariff and must be given up. The attempt to retain it must involve the whole scheme in unnecessary odium, while it could hardly prevent the abolition of a duty so offensive and unjust. The million and a quarter of revenue derived from this source, at the expense of many millions in enhanced prices to the consumer, should he relinquished, as one of the first-fruits of the surplus.

It may be taken for granted that the duty on coal will be repealed during the present session. Whatever might he the economical reasons for imposing and maintaining such a tax, considerations of humanity alone ought to render it impossible, after the experience of the past few months. It is a familiar fact that there is actually more misery in our large cities every hard winter for want of fuel than for want of food. The destitution of the very poor takes the form of cold rather than of hunger. More protracted suffering, more permanent injury, and more coroners’ cases are due to dear coal than to dear corn. Such a tax is, therefore, a most cruel and unjustifiable imposition. It is one of those things which no supposed economical considerations can excuse. We have no right to measure the interest of the capitalist class, or even of the able and well-to-do laboring class, against the necessities of the helpless and dependent classes.

But instead of finding any economical reason in contradiction of the plain dictates of humanity in this respect, we find the latter reinforced by the former. Coal is a raw material for almost every class of manufactures, but is also raw material in a peculiar sense. It is the raw material of power. Nothing could be more irrational than to impose such a tax in the interest of protection. But there is little reason to fear that the artifices and resources of a gigantic monopoly will avail to withstand the almost unanimous sentiment of the people in respect to the tax. The rise in coal last summer, through the unprincipled combinations of the railroads and the mining companies, has aroused a general and intense indignation, which can have but one logical result, namely, the utter abolition of the duty and the throwing open of our seaboard to the coal of the British provinces. The loss of revenue to the treasury by the repeal will not be large. The tax at present is almost prohibitory, being $1.25 upon two thousand pounds, or $1.40, in gold, on the proper ton of commerce, equal to $1.96 in currency at average rates. Such an addition to the wholesale price of bituminous coal practically cuts us off from that source of supply. Half a million will be well spent in bringing to consumers a relief that can only be measured by millions.

The recent thorough discussion as to the cost of making pig-iron in the United States has entirely settled the point that an addition, unnecessary even to secure the production of that article here, is made to the market price of the metal, to the full extent of the present duty of nine dollars a ton. The tax, then, simply serves to secure higher profits to the manufacturers, by restricting the amount available for consumption within the country to the capacity of the Pennsylvanian and a few other scattered furnaces. That is to say, the present profits are secured by diminishing the amount of iron which in the United States is cast, wrought, or converted into steel! There are scores of recognized industries which, in the number of workmen they unitedly support, far exceed the pig-iron establishments of the country, and which have to pay one third more for their material than they would but for this duty. Is this protecting American industry? Take the iron-bridge building interest, which is assuming so much importance. Unquestionably, but for the enhancement of the price of iron plates, rods, and bolts by the monopoly of iron, the demand for such things would be doubled. The difference between the cost of bridges made of wood and those made of iron is now just enough to determine nine boards of railroad directors out of ten, nine boards of selectmen out of ten, reluctantly to decide in favor of wood. Put it in the power of builders to offer to lay down iron bridges for twenty per cent less than at present, and in five years we should find that half the bridges being built were of that material. The same is true, in a greater degree, of iron-ship building. In 1868, just five iron vessels were built in the United States. England is building them by the thousand. England has cheap iron. We think it necessary to have dear iron.

It is in view of such facts, and not from the standpoint of free-trade, that the pig-iron monopoly is being attacked. It is assailed by men who can prove, from the actual transactions of large establishments, that the metal can be produced at home without the duty, and that the enhanced price goes to increase profits and not wages. It is assailed by men who hold firmly by the principle of protection, and who are prepared to maintain the duties on all the higher manufactures of iron and steel at their present rates; but who insist on regarding pig-metal not as finished product, but raw material, to be obtained as cheaply as possible in the best market. The duties now collected on this article amount to somewhat over a million of dollars.

It is not, of course, possible, nor desirable, in an article of this scope, to go through the four thousand specifications of the tariff, and show which five hundred or fifteen hundred or twenty-five hundred distinct taxes might be repealed without reducing the revenue below the actual honest requirements of the treasury, and without injuring, even temporarily, a single considerable industry of the country. That is properly the task of a committee. Such a reform would involve the removal of taxes like those on manufactured india-rubber and gutta-percha, which now yield a revenue of two hundred thousand dollars; on raw hemp, jute, and flax, which yield half a million; on gums, which yield about six hundred and twenty thousand dollars; on hides and skins, which are now taxed to the extent of a million; and leather, which yields a million and a quarter more; on unmanufactured cork and potters’ clay, each producing fifty thousand dollars, which the revenue could well spare; on wools, with the loss of only a million and a quarter; on paints for another half-million; on almost all the oils; on all the seeds; on all the spices, except, perhaps, pepper, cloves, and cassia, which yield sums worth collecting; on hatters’ furs, which yield nearly three hundred thousand, and other furs, dressed and undressed, which yield two hundred thousand more; on oranges, lemons, dates, prunes and plums, figs and currants, and all the tropical fruits, retaining perhaps the duty on raisins as a convenient source of revenue to the extent of a million of dollars, and because they are not good for little boys. Human hair we would admit free of duty, at a loss of seventy-two thousand dollars, as also human bones, at a loss of two dollars and twenty cents. Honey, butter, and cheese together would cost the revenue but two hundred and fifty thousand dollars. Zinc should be made free, at a sacrifice of nearly as much more. Few would believe that the people of this country pay in duties on sardines and anchovies as much as a quarter of a million. For what earthly reason, since the treasury does not need the money?

It will be seen that the removal of duties which we have indicated as especially vexatious and unnecessary would leave the main question of protection wholly undisturbed. We might still protect, if that were thought wise, all manufactures of iron and steel, paper, cotton, wool, flax, and silk, — a larger circle of industries than Mr. Clay ever contemplated. Speaking with the utmost candor, we believe that, taking the whole line of protected industries together, the impositions specified hinder the employment of ten American workmen where they make room for the employment of one. Taxes upon raw, materials, in the worst sense, they constitute a heavy drag upon all the higher manufacturing interests of the nation; and, so far as they are operative, serve to defer or defeat the intended benefits of protection.

There is a very plain reason why we should not enter upon the dispute between the advocates of a revenue tariff and the friends of incidental protection, in a paper on the disposition of the immediate surplus. This reason is, that the reduction of the present scale of duties on the larger and more highly protected industries must be a matter of time, to be accomplished by degrees, while it is almost certain that the flint effect of such a movement would be to stimulate receipts, and still further increase the disposable surplus. A reduction of taxes in this interest is hence plainly no part of our subject. But, without any reference to the ideas of free-trade, the tariff should be cleared of the absurdities, puerilities, and contradictions which now encumber it, and at least be made rational, intelligible, and consistent. Such a reform would afford a judicious and a popular employment for a portion of the surplus, and would leave the subsequent financial policy of the country to be contested on large and statesmanlike considerations, without prejudice from a scheme of taxation manifestly extortionate and burdensome. Such a reduction of taxes would strengthen the Republican supremacy, while it would undoubtedly prove favorable in the end to an early payment of the public debt.

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  1. Resolved, that the Secretary of the Treasury be directed to prepare, and report to the Senate at their next session, a plan for the application of such means as are within the power of Congress to the purposes of opening roads and making canals, together with a statement of undertakings of that nature which as objects of public improvement, may require and deserve the aid of government.” Fancy the Forty-first Congress advertising for jobs in that fashion! The lobby must have been very modest or very verdant in those days, to need such jogging.