Читать книгу: «The Atlantic Monthly, Volume 17, No. 103, May, 1866», страница 14

WHAT WILL IT COST US?

If we take the arm of Mr. Smith, who is one of many perplexed at this time by the cost of living, and go round with him to rebuke the tradesmen who oppress and devour him by overcharges of every kind, we shall find these obdurate persons very quick upon their defence, and full of admirable justification of their supposed extortion.

The wicked grocer, who in these piping times of peace makes Mr. Smith pay twenty cents a pound for sugar, fifty-five cents for coffee, and a dollar and a half for tea, replies, when reproached with his heartlessness, that Mr. Smith gives him depreciated paper, not gold, for his sugar, while he must pay the importer for prime cost, freight, and duty, with the added premium on gold, and the importer's profit on the aggregate, as well as the new duty on refining; and that as to coffee, it has actually risen in price at Java through the Dutch government's monopoly of the entire product, while our own law has imposed a duty of five cents in gold upon it. This abandoned tradesman declares that he must have a large profit to cover risks in holding such articles as tea and coffee, when trade is unsettled and gold falling; and asserts that he makes no more on tea now than he did in the days when it cost Mr. Smith only thirty-five or forty cents a pound. The duty of twenty-five cents, and the withdrawal and destruction by privateers of many ships formerly engaged in the trade, have brought up the price of tea, and the grocer is none the richer, though Mr. Smith is considerably the poorer.

Equally unblushing is the butcher,—a man who ought to have finer feelings and some sense of remorse. Steak, he tells us, is thirty, second cut of the rib twenty-eight, mutton twenty-eight, and poultry thirty cents a pound, because, as he pretends, the farmers exhausted their supply of cattle in feeding the army for so long a time, and now find it more profitable to raise their lambs, and keep and shear their sheep, than to kill them. To which he adds a note in the minor key concerning the price of gold, and the increased expenses of living, which he has himself to meet, and drives us in despair to the pitiless merchant of whom we buy our dry-goods. He evidently expects Mr. Smith, for he says, with a shameless frankness and readiness: "I admit that I have doubled my prices, but fifty per cent of the rise is due to the premium on gold. Then there come in the war duties, and then the internal revenue taxes. Don't you know that Congress has put taxes on the materials, and upon every process of manufacture, and a further tax of six per cent on sales, to say nothing of stamps and licenses? Look at the report of the Revenue Commission,⁶ which tells us that most of the duties are duplicated, till they lap over like shingles and slates, and come to ten or twenty per cent on manufactures. Look at their story of the umbrella! Think of Webster's Spelling-Book printed in London for our schools, to evade the taxes! Think of the men who go to Montreal, Halifax, and even to London, for new suits, in consequence of the duties, and of others who once came to me quarterly for a new coat and gave away their worn garments, and who now come yearly! Please examine this bill for coal at fifteen dollars instead of six dollars a ton, and do not forget the city, State, and national taxes."

Incensed to the last degree by the merchant's effrontery, Mr. Smith hurries us to the den which the cruel coal-dealer calls his office, and demands to know how it is that, when the nation no longer requires coal for the uses of war, and coal ought, in the very nature of things, to come down, he has actually raised the price of it to fifteen dollars a ton?

"Gentlemen," answers the coal-dealer, with a hardness not equalled by the hardest clinker in his own anthracite,—"gentlemen, it's true the war is over, but there are taxes on cars, engines, repairs, and gross receipts, that add fifty per cent to transportation, while for five years past the nation has required so much coal and iron to carry on the war and to repair Southern tracks that few coal railways have been built and few mines opened. There must be rivalry and increased production to put down prices. New mines and railways cannot be opened with gold at the present rates, or while the internal taxes, direct and indirect, add fifteen dollars to the cost of each ton of bar-iron. Nor can there be a great fall while there is a prospect that the coal from Nova Scotia is to be excluded or raised in price by the repeal of the Reciprocity Treaty. Freights have risen to the unprecedented rate of four or five dollars per ton between Philadelphia and Massachusetts and Maine; and if we wish for former freights of two dollars per ton and lower prices, we must build steam colliers like those which run between Newcastle and London, and bring back the coasters that left the trade and took shelter under the flag of England. But the first thing is to bring down the price of gold, which will bring down both freight and profits, and enable the poor to enjoy the sparkle of the black diamonds. And now, Mr. Smith, let me say that what with the city, the State, and the national taxes, I am obliged to raise my rents, and I take the liberty to notify you that houses are scarce; and although I regret to disturb an old tenant and customer, I must add another hundred to the rent of the house you occupy. Houses are in demand; few dare to build while materials are so dear. And there are the Shoddies, who would take mine to-morrow at any rent."

Not in the least consoled, but rather exasperated by this suggestion, Mr. Smith fails to recover his spirits, even on the assurance of the city official whom we meet, that the city, impoverished by payment of soldiers' bounties and allowances to soldiers' families, as well as the payment of the interest of her debt in gold throughout the war, still hopes to reduce the interest to five per cent, and, when gold falls, to diminish the taxes.

But if our course of inquiry into the causes of the present ruinous cost of living has not given much solace to Mr. Smith, we may, nevertheless, from the facts elicited and from the arguments of the different tradesmen draw a few useful conclusions and decide what are the evils to be removed or obviated before we can reduce the cost of living; and the chief of these, we have learned, are the following:—

The premium on gold.

The taxes on productions.

The duties on materials.

The charges on transportation.

The duties and taxes which absorb income.

Let us consider whether these evils may not be boldly met and surmounted, and this, too, without impairing the ability of the nation to meet the interest of the debt incurred as the price of freedom, or interfering with the payment of army and navy pensions, and similar expenses.

RESUMPTION

What is there to prevent the nation from resuming specie payments during the present year?

There are those who profit by the fluctuations of gold; who gamble in gold, and would make fortunes regardless of the consequences to others; who control the columns of venal papers and write financial articles; who claim to be the leaders of opinion, and tell their confiding readers that Great Britain did not resume for a quarter of a century; that resumption implies contraction and portends ruin; that we have a thousand millions to fund within three years, and therefore cannot resume.

But is not all this fallacious? Our position is not that of the British Isles half a century since, exhausted by a war of twenty years, without a railway, with less than half the wealth and half the population, and one twentieth of the land and mineral resources that we possess, while their debt was fifty per cent more than our own. They were almost stationary, and we are progressive. In descending from a premium of 180 to 30 on gold, we have already accomplished five sixths of the journey towards specie payment without serious disaster and with an easy money-market.

As respects contraction, the instructive report lately addressed to the Secretary of the Treasury by Mr. Carey, the veteran advocate of manufactures, shows that the compound-interest notes are withdrawn; that a large portion of the greenbacks is held as a reserve fund by the banks, another large portion is locked up in the sub-treasury, and the actual circulation of the Union but $460,000,000,—really less than that of France or Great Britain, although our population exceeds that of either of those countries. And Mr. Carey, in his instructive letter, offers proof that our circulation, although in excess of the gold, silver, and bills circulating before the war, is not disproportionate to our commercial transactions. When the Secretary of the Treasury is ready, no serious contraction will probably be required, and no ruin will follow, if our merchants move with caution, and prepare for a return to the only safe standard of values. Let the manufacturer accumulate no stocks, but continue to make goods to order, to sell in advance. Let him cover his sales by the purchase of the materials as the wise and sagacious have done ever since the surrender of Lee, and we shall be ready for the notice that, after an interval of three or four months, the United States will meet their notes and contracts with specie.

Commerce will gradually adapt itself to this notice, as it has done to the decline of gold from 285 to 130 in less than a year. But it is urged that we have a thousand millions of debt to fund within three years, and therefore cannot resume. Did we not fund nearly a thousand millions at par in 1865, and most of this after gold fell to 30 per cent premium? Then the amount was drawn from hoards and commerce; but now our income exceeds expenditures, and we are reducing the debt ten or twenty millions a month; we require no funds for war or unproductive investments, and when we pay one hundred millions, we return it to those who will seek new loans for investment, and doubtless lend on more favorable terms.

At Paris, Brussels, and Frankfort, the average rate of interest last year was less than five per cent. Give Mr. McCulloch power to go there, to issue bonds for one twentieth part of our debt payable there in the currency of the country; and with such a fund at his disposal, he can at once reduce interest and bring back specie, or rather retain it; for we need not seek it abroad. When the Committee of Ways and Means intimate that they will give him this power, gold and exchange fall; if a doubt is expressed, both advance; and the simple question before the public is, whether we shall cripple the Minister of Finance and give the power to Wall Street;—whether our finances are to be governed by the Jews of the gold board and the speculators of the stock exchange, or by the Secretary of the Treasury. If we ended the war by placing one man on the field to direct every movement,—after we had tried in vain to conduct it by committees of Congress and rival generals,—will not one statesman, with plenary power, be equally effective on the field of finance?

The man who carried a Western State through the revulsion of 1857, and maintained specie payments when Boston and New York succumbed,—who has so well and so successfully wielded the limited power we have given him,—well deserves the confidence of the country. Let him have power at once to go to the fountain-head for the small balance we may require from the Old World; let him have the authority to raise funds to meet the floating debt and temporary loan, and to replace the seven-thirties and compound-interest notes as they mature, and we may confidently anticipate both an early resumption of specie payments and reduced rates of interest, and consequent diminution of debt. With a return to specie payments, our current expenses must fall from thirty to forty per cent, and we can well afford to resign any premium on gold we now enjoy.

TAXES ON PRODUCTION

The Revenue Commission enlighten us on this point. In their very able and luminous Report they say:—

"The diffuseness of the present revenue system of the United States is doubtless one of its greatest imperfections, and under it the exemption of any article from taxation is the exception rather than the rule. To assert this, however, is no reflection on the judgment or skill of its authors. The system was framed under circumstances of such pressing necessity as to afford but little opportunity for any careful and accurate investigation of the sources of revenue; but it has most certainly accomplished the end designed, namely, the raising of revenue; and the country to-day is undoubtedly receiving by taxation far more revenue than is necessary for its legitimate expenditures. As a success, therefore, our present revenue system is a most honorable testimonial, not only to the wisdom of its authors, but to the patriotism of the people, who not only endured, but welcomed, the burdens it imposed upon them.

"A system of taxation, however, so diffuse as the present one, necessarily entails a system of duplication of taxes, which in turn leads to an undue enhancement of prices; a decrease both of production and consumption, and consequently of wealth; a restriction of exportations and of foreign commerce; and a large increase in the machinery and expense of the revenue collection.

"In respect to the injurious influence of this duplication of taxes upon the industry of the country, the Commission cannot speak too strongly. Its effect has already been most injurious. It threatens the very existence (even with the protection of inflated prices and a high tariff) of many branches of industry; and with a return of the trade and currency of the country to anything approximating its normal condition, it must, by checking development, prove highly disastrous.

"The influence of the duplication of taxes in sustaining prices is also, in the opinion of the Commission, far greater than those not conversant with the subject generally estimate; and were the price of gold and of the national currency made at once to approximate, and the present revenue system to continue unchanged, it would be impossible for the prices of most products of manufacturing industry to return to anything like their former level."

The Commission arrive at the conclusion, that all our manufactures are by these taxes increased in cost from ten to twenty per cent. In the language of Senator Sherman, when defending the Internal Tax Bill in the Senate last year, the nation required funds to maintain its armies in the field; it had put forth its arms and grasped the money of the country, and would reduce and equalize the taxes when the war was ended. The Revenue Commission find the taxes on our manufactures and their materials an incubus upon the industry and a check to the progress of the country, and recommend their remission. And this we may reasonably expect from Congress at its present session. But, it may be urged, how are we to meet the interest on our debt and current expenses of $284,000,000 in the aggregate, if we repeal these taxes? The answer is a simple one. The Commission estimate our imports at $400,000,000, and our duties now average forty-seven per cent. Should this continue, we should draw from this source alone $188,000,000. There is also the revenue from public lands and miscellaneous sources, which the Secretary and the Revenue Commission both rate at $21,000,000, making an aggregate of $209,000,000; although the Commission, to guard against the effects of any change in the tariff, modestly rate these items at only $151,000,000.

To these they add for excise, viz.:—

They thus provide a revenue of $318,000,000, or $30,000,000 more than that required by the Secretary,—a surplus which, with the annual excess of duties, to say nothing of the future growth of revenue, would extinguish our debt in little more than thirty years. But to guard against all contingencies, they propose to levy on incomes taxes to the amount of $40,000,000; and on the gross receipts of railways, bridges, canals, and stages, $9,000,000. These change the aggregate to $367,000,000; an excess of $81,000,000 over the estimate of our requirements by the Secretary.

The Commission give us the Budget of France in the following summary, viz.:—

Also, the revenues of Great Britain and Ireland for 1865, viz.:—

If from these returns we deduct the earnings of the Post-Office Department, which are not included in the Commission's estimate of revenue for the United States, that estimate will exceed the returns of revenue for France or the United Kingdom by more than thirty millions, although the expenses of each of these countries are at least fifty millions more than the computed expenses of our own. It is obvious, therefore, from the Report of the Commission, that we may dispense with the fifty-nine millions from income tax and the duties on transportation, and still have a margin of more than thirty millions to cover contingencies and provide for the gradual reduction of the debt. Such a victory in finance achieved the first year after the war would give us a second great national triumph.

The system proposed by the Commission is entitled to the most favorable consideration. The taxes levied during the war were multifarious in their character. Although effective in producing revenue, they were imposed without discrimination, and they bear heavily alike both on producer and consumer, checking the industry of the one and swelling unduly the expenditures of the other. The plan of the Commission strikes the handcuffs from industry, lessens the expenses of collection, enables our artisan to compete with the foreigner, and, as most of the manufactures of the country are consumed at home, consequently reduces the cost of living. It seems from the Report of the Commission, that their leading idea is to simplify the system and reduce the number of taxes; to shift them from the producer to the consumer, and thus stimulate the creation of wealth; to diminish charges, and at the same time lighten the weight of the impost as it falls on the consumer. Another leading idea is to transfer a portion of our burdens to the foreign consumers of cotton, and at the same time stimulate our manufactures, and the production of cotton, by a remission of the tax on cloth exported; while yet another part of their plan was to take from the illicit trader and give to the public coffers the profit he now realizes upon spirits, and to restore alcohol to the arts.

Let us give to each of these measures the attention it deserves; and inquire if we may not take at once the steps, which the Commission defer for the present, toward the discontinuance of all charges upon transportation and incomes. In recommending the entire removal of taxes on production as the first measure to be adopted, the Commissioners advise: "That the capital stock of the country in the interval between 1850 and 1860, deducting the value of the slaves, increased at the rate of 158 per cent, or from $5,533,000 to $14,282,000; and that, if a development in any degree approximating to the past can be maintained and continued, then the extinguishment of the national debt in a comparatively brief period becomes a matter of no uncertainty. To secure this development, both by removing the shackles from industry, and by facilitating the means of rapid and cheap intercommunication between the different sections of the country, is to effect at the same time a solution of all the financial difficulties that now press upon us."

The policy of the Commission is the speedy abolition or reduction of all taxes which tend to check development. This policy is eminently wise and statesman-like; for while it removes some of our most onerous burdens, it gives a stimulus to the creation of wealth that must annually alleviate our taxes, and is entitled to the approval of an enlightened nation.

The second great measure of the Commission is to increase to five cents the tax on cotton, which has, since the close of our last financial year, begun to aid our revenue. The soil, climate, and seasons of our Southern States are peculiarly adapted to the culture of cotton. In India the fields are parched by the extreme heats of summer, and the staple shortened; in Algiers, the rains of autumn, which favor the young wheat, prevent the opening of the cotton-balls; but in the cotton States of the South, the moisture of the spring, the heats and showers of summer, and the dry weather and late frosts of autumn, all contribute to the full development of the cotton-plant; and the yield is twice or three times as great as in the cotton districts of the East. The staple, too, is much more valuable, and the yield and the quality of the staple are both improved by the application of guano. In 1859 the yield of the United States rose to 2,080,000,000 pounds, while the consumption of the civilized world was as follows:—

During the five years of war, the consumption was reduced more than one half by the deficiency; Great Britain was compelled to pay twice the usual amount for half the usual quantity, and cotton rose from ten cents to sixty cents in gold. The world was ransacked for cotton, and the whole addition made to the supply (chiefly from India and Egypt) did not exceed the increase of three years in the United States previous to the war. The Revenue Commission have made a very elaborate report upon this subject, and base their conclusions upon the advice and opinions of the chief manufacturers of New England, who concur in the opinion that the tax will be chiefly paid by the foreign consumer; that it will not give an undue stimulus to the culture of cotton abroad; that Japan and China have, since the decline of cotton to twenty pence in England, ceased to ship it, and are drawing upon Surat and Bombay; that Egypt, our chief rival, has nearly or quite reached her full capacity of production, while India makes little progress.

The late Confederacy, by imposing an export duty of twenty cents per pound, to be paid in gold; France, by her export duty on linen and cotton rags and skins of animals; Russia, by various export duties; Portugal, by her duties on wine exported; Great Britain, by her export duties, imposed in India, on gunny-cloth, linseed, jute, saltpetre, and opium; and Holland, by her monopoly and export duties on the coffee of Java,—give precedents for a tax on cotton. The United States are prohibited by the Constitution from levying an export duty, but may nevertheless impose an internal tax which will cling to the cotton both abroad and at home. A tax of five cents a pound will add but one cent to the cost of a yard of calico; and with a crop of 2,000,000,000 pounds, like that of 1859, will yield a revenue of $100,000,000, although the Commission do not anticipate more than half that revenue for a few years to come. It seems but reasonable that King Cotton, who made the war, should aid in defraying its expenses; and it is also just that England and France, his chief allies, should pay their tribute for the suppression of the revolt they did so much to encourage. The planters and free blacks of the South have sufficient incentives to the culture of cotton in the high prices it must bear for years to come; and the Commission have very wisely recommended a remission of the tax on all cotton cloth or yarn exported, which will give a stimulus to manufactures both at the South and the North, and enable our merchants to meet those of Great Britain in successful competition in all parts of the globe. The cotton tax, as a substitute for taxes on sales and manufactures, will meet the cordial support of our countrymen; and, if it oppose a slight check to production, they have already learned that half a crop gives more dollars than a whole one.