The Sun.
London, England, 1869-01-08 00:00:00

SUN, LONDON, FRIDAY EVENING, JANUARY 8, 1869.

TH. '

buildings at Balliol College, Oxford, and the new Suspen-
sion Bridge at Pesth) are executed in a manner far
superior to the engravings of the other architectural
ournals.

I mentioned in a former letter that Messrs. Strahan
had purchased the copyright of Mr. Tennyson's works.
They are to pay £4,000 a year for twenty years, and will
publish any new work that he may produce during that
time. They will bring out the works in the familiar
foolscap editions. Moxons will continue to publish Dore's
illustrated edition of the " Idylls," and they claim also
the copyright of the " Selections," a claim which is likely
to lead to a lawsuit. Moxons will also issue a volume of
original songs by Tennyson, set to music, and illustrated
by Millais. The same firm have, I believe, agreed
with Gustave Dor4 to bring out an illustrated
edition of Hood's poems. Miss Emily Jolly, the
author of that most charming of novels, " Pearl,"
is engaged on a new tale which is likely to be the
best that she has produced. A cheap edition of Mr.
Gladstone's autobiography, at 9d., has been published by
Mr. Murray. The same publisher is bringing out Dr.
Smith's " Dictionary of Mediaeval Latin." Chapman and
Hall are issuing a fine new edition of Carlyle's works.
Hurst and Blackett announce a life of Lucrezia Borgia, by
William Gilbert the novelist.

The weather to-day has been something extraordinary.
A clear atmosphere in the streets, but a pitch-dark fog
up in the heavens ; so that we have had to burn gas all
day. It is still very mild, but the wind has changed, and
the barometer is very high. This fog is in all probability
the herald of a severe frost.

1111SC.EL LANE° US LVEJVS.

TRE CESSION OEi GIBRALTAR..

Admiral Grey's letter, advocating the cession of
Gibraltar to Spain in exchange far Ceuta, has called
forth another reply. The last-mentioned writer
styles himself "A 'Voice from Gibraltar," and de-
clares that some of the views expressed in the Admi-
ral's letter are so mistaken that he is induced to point
out why the possession of Gibraltar is of impoifance
to this country, while that of Ceuta would be useless.
Ceuta has no harbour, and its position is so unsatis-
factory that it could be captured by land or sea if
a powerful enemy undertook the work, and
England would only lose money in the
attempt to convert the place to greater utility.
As for the Admiral's statement, "that not a house on
the Rock would be out of easy range with modern
artillery," it is said that this assertion could be of
weight only if there were no guns in Gibraltar. The
defences of Gibraltar are excellent : it is impregnable
by land, and might be made so by sea if due pre-
cautions were taken. These " days of steam" have
made Gibraltar of far greater importance, for it now
seals the entrance to the Mediterranean. In con-
clusion, the writer expresses a hope that our Govern-
ment will lose no time in making Gibraltar
pregnable, by placing heavy guns on the heights.
" J. B. K." (the initials, by the way, of the late
Attorney-General) writes to the Pall Mall Gagette
upon this much-discussed subject. Ile says
he too discards the " sentimental " question, yet
thinks that the feelings of great nations are not
without some actual weight in determining
policy. The desire of Spain to recover Gib-
raltar is something more than a sentiment. The
port is a vast smuggling depot. In 1866 we exported
there £1,134,699 worth of goods, just about half as
much as we sent through the whole of the Spanish
custom houses. The amount is, of course, enor-
mously in excess of the wants of the town and the
neighbourhood, and this excess represents so much
contraband trade. Nor is Gibraltar costly only to the
Spaniards; it is costly to us, and the garrison alone
must mean half a million sterling a year. Add to this
the expense of Gibraltar shields and Woolwich
guns, and we can readily imagine how the sum total
must mount up. "J.B. K. holds that Gibraltar is
not a safe station in case of war, and could not be
made so unless we held the whole circuit of the shore
surrounding the bay, a line of fifteen miles, whose
occupation no one has ventured to suggest. If we
gave up Gibraltar it would be of very little
harm to us. Even supposing that we were
at war with Spain, we could, provided that we
retained the command of the sea, blockadethe Spanish
fleet in Gibraltar more easily than elsewhere. If we
did not retain the command of the seas, the posses-
sion of Gibraltar would be of very little service to
us. "Nobody doubts our power to hold Gibraltar if
we choose, but the great men who won and held it
for us when it was of real vahio would be the
first to wish us to exchange it, if in process
of time it had become a port of little or no actual
importance or benefit." Altogether "J. B. K." is of
opinion that a case has been made out for inquiry,
and he thinks that if it should be determined to
exchange Gibraltar for Ceuta, there would be little
or no political objection to our doing so.
The Morning Herald says there is something in-
explicable in the discussion which has arisen upon
this question. If Earl Russell were in the Cabinet
our contemporary could understand the mooting of
the matter. But considering what glorious associa-
tions attach to this stronghold, &c., &e. The Herald
forgets that the proposed cession was first started in
the leading columns of the official Conservative
organ at the time that Lord Stanley was at the
Foreign Office.

&c. But Grattan was undoubtedly a -grreat
one who, if the figure is not too stale, lives " in the hearts
of the people." Then why not give him a statue ? At
the '• Mayor's meeting," held at Dublin on Tuesday,
all creeds and parties were represented. Mr. Pim, M.P.,
Mr. J. Norwood, J.P., Professor Webb, F.T.C.D.,
Alderman Manning, J.P., Hon. Judge Little, Dr.
O'Leary, Alderman Campbell, Dr. Shaw, F. T. C .D., the
Rev. Dr. Spratt, and Mr. L. Waldron were speakers.
Resolutions were adopted to the effect that the erec-
tion of a public statue to Grattan was " a sacred
obligation of duty, love, and gratitude;" that
assured of the hearty approbation of Irishmen of all
classes, they entered on the work, and that a com-
mittee and treasurer, whose names are published,
should be appointed to carry out the intention of the
meeting.

THE PUBLIC DEBI OF AMERICA.

- --' 4-

The interest of the Public Debt, when the
whole debt shall be funded at an average rate
of interest of five per cent., will amount to
$125,000,000, which will be reduced with the an-
nual reduction of the principal. When the Internal
Revenue and Tariff laws shall be revised so as to be
made to harmonise with each other, it is supposed
that $300,000,000 can annually be realized from
these sources without burdensome taxation. How
much shall be raised from each can be determined
when the whole subject of Revenue shall be tho-
roughly investigated by Congress with the light
shed upon it by Commissioner Wells in his exhaus-
tive Report of the present year. The Secretary
does not doubt, however, that the best interests of
the country will be subserved by a reduction of the
Tariff and an increase of Excise duties. Accord-
ing to this estimate the account would stand as fol-
lows :

Receipts from Customs and In-
ternal Revenues $300,000,000
Expenditures for the Civil Ser-
vice ... •.• $10,000,000
Expenditures by tha War De-
partment ... ... 35,000,000
Expenditures by the Navy De-
partment 20,000,000
Expenditures for Pensions and
Indians 30,000,000
Expenditures for Interest on
the Public Debt ... 125,000,000-250,000,000

Leaving, as an excess of receipts $50,000,000
to be applied to the payment of the principal of the
debt. If the growth of the country should make
an increase of expenditures necessary, this increase
will by the same cause be provided for by increased
receipts under the same rate of taxation ; and as it
is to be hoped that the regular increase of the reve-
venues without taxation resulting from the advance
of the country in wealth and population—will be
greater than the necessary increase of expenses, there
will be a constantly increasing amount in addition
to that arising from a decrease of interest to be
annually applied to the payment of the debt. If
large additional expenditures should be unavoidable
they should at once be provided for by additional
taxes. What is required, then, at the present time
is a positive limitation of the annual outlays to
$300,000,000, including $50,000,000 to be applied
to the payment of the principal of the debt, and
such modifications of the reve,pue laws as will secure
this amount without unwise restrictions upon com-
merce, and with the least possible oppression and
inconvenience to the tax-payers. In the foregoing
estimates of resources, miscellaneus receipts and
receipts from sales of public lands are omitted. The
miscellaneous receipts heretofore have been derived
from sales of gold and of property purchased by the
War and Navy Departments during the war and
no longer needed. On a return to specie payments
there will be no premiutns on coin, very little Go-
vernment property will hereafter be sold, and under
the Homestead law and with liberal donations of
the public domain, which are likely to be made as
heretofore, no considerable amount can be expected
from lands. Whatever may be received from these
sources will doubtless be covered 1 y miscellaneous
expenses, of which no estimate can be made. The
Act of March 31, 1868, exempting from taxes nearly
all the manufactures of the country other than dis-
tilled spirits, fermented liquors, and tobacco was
sudden and unexpected. It not only deprived the
Treasury of an immense revenue, but the reduction
was so great as to leave an impression on the pub-
lic mind that it would be only temporary, and that
a tax in some degr3e equivalent to that which was
removed would of necessity soon be resorted to. It
is, perhaps, for this reason that this measure has
failed to give relief to the public by a diminution of
prices and has benefited manufacturers rather than.
consumers. The frequent and important changes
which have been made in the Internal Revenue
laws, the eas3 with which exemptions from taxa-
tion have been obtained and the suddenness
with which taxes hive been greatly augmented or
reduced, having constituted one of the greatest evils
of the system. Sudden changes in the revenue laws
are not only destructive of all business calculations,
but they excite, not unreasonably, a feeling of dis-
content and a sense of injustice among the peOple
most unfavourable to an efficient collection of taxes.
While it is admitted that in a new and growing
country like ours modifications of the taxes will be
frequently necessary, some definite policy should at
once be inaugurated in regard to our internal re-
venues, the general principles of which should be
regaried as finally established. Assuming that the
receipts from customs will be reduced by a reduc-
tion of duties, or by the effects of a return to specie
payments upon importations under the present ta-
riff,creasaend of
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revenue which are likely to be considered.

First. An increase of taxes upon distilled spirits.
The idea of deriving the bulk of the revenue from
this article is a very popular one, and even our un-
fortunate experience has only partially convinced
the public of its impossibility. The late exorbitant
tax on distilled spirits, intended, perhaps, not merely
as a revenue measure, but as an encouragement to
temperance, proved to be the most demoralizing tax
ever imposed by Congress, corrupting both the ma-
nufacturers and the revenue officers, and familiariz-
ing the people with stupendous violations of the law.
The restoration of it, or any considerable increase
of the present tax, would lead to a repetition of the
frauds which have brought the internal revenue into
such utter disgrace.

Second. A restoration of the tax on manufactures
abolished in March last. The objections to the re-
storation of this tax are, that it would indicate
vacillation on the part of Congress, and that this
tax, principally on account of numerous exemptions,
was partial and unjust. it is'also apparent that if
restored it would fail to be permanent by reason of
the persistent and united hostility of a class of citi-
zens influential and powerful, and whose influence
and power are rapidly increasing.
Third. An increased and uniform tax on sales ;
and this the Secretary respectfully recommends.
Under the present law wholesale and retail dealers
in goods, wares, and merchandise, of foreign or
domestic production, wholesale and retail dealers
in liquors and dealers in tobacco, are subject to a
similar but unequal tax upon sales.
This inequality
should be removed and a tax levied upon all sales
sufficient with the revenues from,other sources to
meet the wants of the Government. The reasons
in favour of a tax upon sales are that it could be
levied generally throughout the country, and would
not be liable to the imputation of class legislation.
That it would be , so equally distributed as not to
bear so oppressively as other taxes upon individuals
or sections, and that no depression of one branch of
industry which did not injuriously affect the busi-
ness of the entire country could greatly lessen its
productiveness. As has been already stated the
receipts from Customs for the fiscal year ending
June 30,1866, were $179,046,651 58 ; for the year
ending June 30, 1867, $176,117,810 88 ; and for
the last fiscal year, $164,464,599 56. These figures
show that the tariff has produced large revenues,
although it is in no just sense a revenue tariff. In
this respect it has exzeeded the expectations of its
friends, if, indeed, it has not disappointed them. It
has not checked importations, and the complaint is
made that it has not given the anticipated protec-
tion to home manufactures, not because it was not
skilfully framed to this end, but because it inflated
currency, the effect of which upon importations was
not fully comprehended, and has in a measure de-
feated its object. It has advanced the prices
of dutiable articles, and by adding to the cost
of living has been oppressive to consumers, with-
out being of decided benefit to those industries
in which interest it is regarded as having been
prepared. In his last report the Secretary recom-
mended the extension of specific duties, but did not
recommend a complete revision of the tariff, on the
ground that this work could not be intelligently
done as long as business was subject to constant
derangement by an irredeemable currency. The
same difficulty still exists, but as decided action
upon the subject of the currency ought not to be
longer postponed, the present may not be an un-
favourable time for a thorough examination of the
tariff. It is obvious that a revision of it is required,
not only to relieve it of incongruities and abSurdity,
and to harmonise it with excise taxes and with our

agricultural and commercial interests, but also to
adapt it to the very decided change which must take
place in the business of the country upon the re-
storation of the specie standard. Large revenues
are now derived from customs, because a redundant
currency produces extravagance, which stimulates
importations. If the currency were convertible
and business were regular and healthy the tariff
would be severely protective, if not in many instances
prohibitory. Indeed, of some valuable articles, it
is prohibitory already. There will be in the future,
as there have been in the past, widely different
opinions upon this long vexed and very important
subject, but the indications are decided that the
more enlightened sentiment of the country de-
mands that the tariff shall hereafter be a tariff
for revenue and not for protection, and that the
revenues to be derived from it shall be no larger
than in connection with those derived from other
sources will be required for the economical ad-
ministration of the Government, the mainte-
nance of the public faith, and the gradual extin-
guishment of the public debt. While the country
is not at present, and nyty not be for many years
to come, prepared for the abrogation of all restric-
tions upon foreign commerce, it is unquestionably
prepared for a revenue tariff. The public debt is
an ineumbrance upon the property of the nation,
and the taxes the necessity fur which it creates, by
whatever mode, and from whatever sources collected,
are at last a charge upon the consumers. Taxes
should not therefore be increased, nor will the tax-
payers permit them to be permanently increased for
the benefit of any interest or section. Fortunately,
or unfortunately, as the question may be regarded
from different stand-points, the necessities of the Go-
vernment will be such for many years that large
revenues must be derived from customs, so that a
strictly revenue tariff must incidentally benefit our
home manufactures. According to the estimate
made by the Secretary, an annual revenue of
$300,000,000 will be required to meet the necessary
demands upon the Treasury, and for a satisfactory
reduction of the public debt. How much of this
amount shall be derived from customs it will be for
Corgress to determine. In examining this difficult
question, the magnitude of our foreign debt, and
the necessity not only of preventing its increase, but
of rapidly reducing it, must be kept steadily in view.
It may be necessary that a large portion of our
bonds now held in Europe be taken up with bonds
bearing a lower rate of interest, payable in some
European city, in order that they may be less likely
to be returned to the United States at unpropitious
times. Whether this is accomplished or not, it is
of the last importance that our tax laws, and espe-
cially the tariff, should be so framed as to encou-
rage exports and enlarge our commerce with fo-
reign nations, so that the balances may be in our
favour, and the interest, and in due time the
principal, of our foreign debt may be paid by our
surplus productions. Many of the investigations of
the Revenue Commission have been made with the
view of furnishing Congress with the data necessary
for a thorough examination and a wise determina-
tion of this most important question, and it is for-,
tunate that the subsidence of political excitement
removes many of the difficulties heretofore in the
ay of any impartial consideration of it. The debt
between the Ist day of November, 1867, and the
Ist day of November, 1868, increased $35,625,102
82, of this increase $24,152,000 is chargeable to the
Pacific Railroad, and $7,200,000 to the purchase of
Russian America. Within the same period there
was paid for bounties $4,406,051, and at least
$4,000,000 for interest on compound 7 3-10 notes,
which had accrued prior to the Ist of November,
1867. If these extraordinary advances and pay-
ments had not been made the receipts would have
exceeded the expenditures $43,787,412 18. Consi-
dering the heavy reduction of internal taxes made
at the last session of Congress, and the large expen-
ditures which have attended the military operations
against the Indians on the frontiers, and the main-
tenance of large forces at expensive points in the
Southern States, this statement of the amount of
the debt cannot be regarded as an unsatisfactory
one. The bounties will, it is expected, be entirely
paid within the next three months, and very little
interest except that which accrues upon the funded
debt is hereafter to be provided for. Should there be
henceforth no extraordinary expenditures, and no
further donations of public moneys in the form of
bounties, or of additional subsidies to railroad compa-
nies, with proper economy in the administration of
the general Government, and with judicious amend-
ments of the revenue laws and proper enforcement
thereof, the public debt without oppressive taxa-
tion can be rapidly diminished and easily ex-
tinguished within the period heretofore named by
the Secretary. The ability of the United States to
maintain their integrity against insurrection as well
as against a foreign enemy can no longer be doubted.
The question of their ability, under Democratic in-
stitutions, to sustain a large national debt, is still
to be decided. That this question should be affirma-
tively settled, it is, in the opinion of the Secretary,
of the highest importance that the tax-paying voters
should be encouraged by the fact that the debt is
in the progress of rapid extinguishment and is not
to be a permanent burden upon them and their
posterity. If it be understood that this debt is to
be a perpetual incumbrauce upon the property and
industry of the nation it is certainly to be feared
that the collection of taxes necessary to pay the in-
terest upon it may require the exercise of power by
the Central Government inconsistent with Republi-
canism and dangerous to the liberties of the people.
The debt must be paid. Direct repudiation is an
impossibility. Indireet repudiation, by further
issues of legal-tender notes, would be madness. To
insure its payment without a change the essential
character of the Government every year should wit-
ness a reduction of its amount and a diminution of
its burdens. The Secretary is confident that he
expressed the sentiments of the intelligent tax-
payers of the country in his report of 1865. In his
last report the Secretary referred to the condition
of the Treasury at the close of the war and at some
subsequent periods, alluding especially to the
emergency in the Spring of 1865, arising from
the very large requisitions which were waiting for
payment, and the still larger requisitions that were
to be provided for to enable the 'War Department to
pay arrearages due to the army and other expenses
which had already been incurred in the suppression
of the rebellion. In briefly reviewing the adminis-
tration of the Treasury from April, 1865, he did
not think it necessary to state how much of the
large revenue receipts had been expended in the
payment of debts incurred during the war, and he
would not undertake to do it now did not misap-
prehension exist in the public mind in regard to the
expenditures of the Government, since the conclu-
sion of hostilities, prejudicial to both the law-mak-
ing and law-executing branches of the Government.
The war was virtually closed in April, 1865. On
the first day of that month the public debt
amounted, according to the books and accounts of
the Department, to $2,366,955,077 34. On the
first day of September following it amounted to
$2,757,689,751 43, having increased in the four
months, $390,734,494 09. From that period it
continued to decline until Nov. 1, 1867, when it
had fallen to $2,491,504,450. On the first day of
November last it had risen $2,527,129,552 82. By
this statement it appears that, between the first day
of April, 1865, and the first day of September of
the same year, the debt increased $390,734,491 09,
and that between the first day of September, 1865,
and the first day of November, 1868, it decreased
$230,560,018 61, and on the last day mentioned
it was $160,174,475 48 larger than it was on the
first day of April, 1805. Since then the Trea6u
rer's receipts from all sources of revenue have been
as follows :

For April, May, and June, 1865 583„519,16-1 13
For the year ending June 30, 1866 558,032,620 06
For the year ending Juno 30, 1867
For the year ending June 30, 1868
Juno 30 to Nov. 1, 1868

Total receipts $1,662,476,062 20
To which should bo added the increase of the debt be-
tween the first day of April, 1865, and the first dly of
November, 1868—5160,171,475 48—51,822,650,537 68.
This exhibit shows that the large sum of
$1,822,650,537 68 was expended in the payment
of the interest and of other demands upon the
Treasury in three years and seven months, being
an average annual expenditure of $508,616,661

68. If the statement of the public debt on the
Ist day of April, 1865, had included all debts due
at that time, and $1,822,650,537 68 had really
been expended in payment of the interest of the
public debt and the current expenses of the Go-
vernment between that day and the Ist day of
November last, there would have been a profligacy
and a recklessness in the expenditures of the public
moneys discreditable to the Government and dis-
heartening to tax-payers. Fortunately this is not
the fact. That statement (as it is true of all other
monthly statements of the Treasury) exhibited only
the adjusted debt according to the books of the
Treasury, and did not, and could not, include the
large sums due to the soldiers of the great Union
army, numbering at that time little less than one
million men, for pay and for bounties, or on claims
of various kinds, which must of necessity have
been unsettled. For the purpose of putting this
matter right, the S,,,Tretary has endeavoured to as-
certain from the War and Navy Departments how
much of their respective disbursements, since the
close of the war, has been in payment of debts
properly chargeable to the expense of the war.
The following is the result of his inquiries :—By
the War Department, $595,431,125 90 ; by the
Navy Department, $35,000,000. It has been im-
possible to obtain an exact statement of the
amount of such debts paid by the Navy
Department, but sufficient iaformation has been
received to justify the Secretary in estimating it
in round numbers at $35,000,000, which is pro-
bably an under rather than an over estimate.
The expenditures of the War Department have
been furnished in detail, and are believed to be
substantially correct. These figures show that the
money expended by the War and Navy Depart-
ments between the first day of April, 1865, and the
first day of November, 1868, on claims justly
chargeable to the expenses of the war, amounted to
$630,431,125 90, to which should be.added amount
advanced to the Pacific roads, $42,194,000 ; amount
paid for Alaska, $7,200,000. Total, $679,825,125
90. Deducting this sum from the amount of the
revenues, $1,662,476,062 20, and $160,174,475 48,
the increase of the public debt, the remainder,
$1,142,825,411 78, or an average of $318,928,021
89 per annum, is the amount actually expended in
the payment of current expenses and interest.