The Sun.
London, England, 1869-02-04 00:00:00

REPORT OF THE HON. DAVID A. WELLS,
SPEOIAL REVENUE COaIIiISSIONER.
EFFECT OF SHIPBUILDING AND Comm:m—lf
is in respect to, the absurdity, as well as the utterly
disastrous influence of carrying out the principle of
universalaud indiscriminate protection that the illus-
trations are the most numerous and significant.
Inat, indeed, can be more instructive than the
lessen afforded by the present condition of the ships
building interest and the foreign commerce of the
United States? To-day, speaking generally in re-
spect to ocean traffic, we can neither build, buy,
nor sell an American vessel. This result is ob-
viously due in no small part to the fact that while
protecting the ships we have also protected too
nearly an equal degree the separate constituents
that enter into the construction of ships, viz., the
timber, the iron, the copper, the cordage, and the
canvas ; and these two agencies have so far neu-
tralized and counterbalanced each other that neither
party, within this particular sphere of industry, has
been benefited.
TAXATION AND ENHANCEHENT OF THE PRICE OF
LUMBER.—We select, as an illustration, the article
of lumber, on which the Government levies a duty
of 20 per cent., ad valorem ; which rate, by the ad-
dition of the percentage which the importer almost
invariably will add by reason of the payment of
the duty, may probably be considered as equivalent
at the present time to 20 per cent. Now, the in-
creasing necessity and use of this indispensable
article is such that the demand for the last few
years has been fully equal to or has 'tended to ex-
ceed the supply, which in turn has resulted in con-
stantly augmented prices ; the price, for example,
of the cheapest varieties of lumber in the Albany.
New York, market having advanced since 1861
about 100 per cent. The next invoice value of the
importation of rough lumber, during the fiscal year
1868, was about $7,500,000 ; while the value of the
domestic product for the same period, or that part
of it which entered into competition with this fo-
reign import, may be approximately estimated at
54,000,000. For every dollar, therefore, that is
taken in the form of a direct tax, seven are taken
indirectly through the increase of prices; or, in
other words, $2,250,000 currency are received into
the Treasury at an indirect costof about $16,000,000.
And this is not all. Thirty per cent. on the in-
creased price of lumber means 30 per cent. in the
increased price of houses, 30 per cent. in the in-
creased price of vessels, of fences, of railroad ties,
and other constructions of which wood is the prin-
cipal constituent.
TAXATION ON PIG IRON.—Again, the article of
pig iron agords a striking illustration of an instance
where a duty originally levied for revenue and pro-
tection, or as an offset to internal taxes, has been
continued long after its object has been fully at-
tained, for the interest of the few, but to the detri-
ment of the many. The existing duty on pig iron
is $9 gold, equivalent to over $l2 currency. The
average expenditure requisite to produce a ton of
pig iron in the United States :to-day may be fairly
estimated as not in excess of $26 per ton currency,
and in the case of furnaces favourably situated as
regards cheap coal or ore, and under good manage-
ment, the actual cost, could it be truly ascertained,
would not probably be found in excess of $24.
Now, the selling price of Nos. 1 and 2 pig iron in
the markets of the United States at present, and
for the last year, liai ranged from $37 to $42 per
ton, with a demand continually tending to exceed
supply. Under these circumstances the manufac-
tures of pig iron have, to the detriment of the
rolling-mill interest, and to the expense of every
consumer of iron from a rail to a ploughshate, and
from a boiler plate to a tenpenny nail, realized con-
tinued profits which had hardly ahy parallel in the
history of legitimate industry, the returns of one
set of furnaces in one of the middle States, com-
municated to the commissioner, showing a yearly
product of 35,000 tons, on a capital of $450,000,
sold at a profit of from $lO to $l3 per ton. The
Commissioner, as he writes (November, 1868), has
before him letters from the representatives of the
bar and sheet-iron interest in nearly all sections of
the country to this effect:—" Our works are busy,
but not remunerative. The profit of the iron manu-
facture is all absorbed by the manufacturers of pig
metal. Our only hope is an equalization, and in
a fair increase of protection by Congress at its next

session."

NATIONAL RECEIPTS AND EXPENDITURES FOR
TINE CUnRENT FISCAL YEAR ENDING JUNE 30, 1869.
—For the current fiscal year ending June 30, 1869,
the Commissioner estimates the receipts of the na-
tional Treasury as follows :
From Customs
From internal revenue 155,000,000 00
From public lands
From miscellaneous sources 30,000,000 00

Total . 5336,700,000 00
The total expenditures for the same period, includ-
ing $7,200,000 gold paid for Alaska, are estimated
by the Secretary of the Treasury as follows :
Civil and miscellaneous (includ-
ing $7,200,000 for Alaska)... $61,227,106 00
War Department (indludmg
bounties) 93 219117 00
Nr •

,avy Department 21,604,785 00
Pensions aud Indians 30,358,618 00
Interest on public debt 129,742,814 00

Total 5336,152,470 00
NATIONAL RECEIPTS AND EXPENDITURES FOR
TIIE FISCAL YEAR ENDING THE 30TH JUNE, 1870.
—Let us now look forward to the fiscal year ending
June 30, 1870, the first complete year of a new
Administration; and starting with the relation of
receipts and expenditures as above, inquire what it
is further possible or practicable to accomplish.
Such a basis allows us to anticipate a surplus of
thirty millions for the year under consideration,
with the law and the administration of the law in
relation to the collection and expenditure of revenue
remaining unaltered; and this surplus, the Com-
missioner has reason to believe, may be increased
through the following agencies :—First. From the
certain and continued gain which will undoubtedly
accrue to the national revenue, under any circum-
stances, from the continued increase of the wealth

and population of the country. The Commissioner
believes he is warranted in assuming that the gain
of revenue likely to accrue from the increase in the
wealth and population of the United States will, for
the present, be at least $10,000,000 per annum.
Second. A gain to the credit of the Treasury
from the discontinuence of payment through set-
tlement of the claims of soldiers and sailors for
arrears of pay and bounty. This gain, as predi-
cated on the payments actually made under these
heads during the last and current fiscal years,
may be estimated at $25,000,000. Third. A gain
from a further general reduction of national expen-
ditures. This gain for the next fiscal year through
a continued reduction of the army, reconstruction
and pacification of the Southern States, and a greater
economy in civil expenditure, and iu the appropria-
tions annually made for fortifications, ordnance
stores, rivers and harbours, and private claims,
ought to aggregate at least $30,000,000. Fourth.
Gain from the return of revenue administration.
Assuming $155,000,000 as the annual average of
receipts from internal revenue, as the law and its
administration now stand, the Commissioner believes
that an increase of $75,000,000 in the receipts as a
minimum could be obtained without any practical
difficulty. Allowing for all contingencies, it seems
possible for the Treasury to have at its com-
mand at the close of the next fiscal year an avail-
able surplusof frobemwesvelro,o,otobo,atooothteorsel.2ssb,oouolod,ooboe.
on the part of the Executive,
It requires,
purposeand of the people, and a full
unity of
of Congress,
e rea-
lization of the fact that the work to b
ac-
complished is of such paramount importance that
In
tot
requireshi nothing else h salt). otubledabgeeallowedagents
wbo to
arien
ttoerbf interfere,
inr ewith
rtustect
swhiat thell be
appointed collection
aenudsde
nw er
ts teure
groundsnt ofthe revenuethanthe
devotion to party service, the length and number of
their campaign speeches, or the amount of money
contributed to aid in elections. It requires that
Congress shall exercise the most rigid economy in
• ' _

respect to appropriations, and that the sums here-
tofore expended for fortifications, rivers, and har-
bours, coast survey, new buildings, the manufacture
of arms, for private claims and war damages, and

as subsidies to railroads, shall constitute DO prece-
dent for the immediate future. It requires that no
more money shall be disbursed for the purchase of
foreign territory, and that no reciprocity treaty
shall be negotiated like that proposed with the Sand-
wich Islands, the operation of which is calculated
to immediately impair the revenue. It requires that
there shall be a broad distinction made between the
promotion of mere private and selfish ends, and the
true protection of American industry.