The Sun.
London, England, 1845-12-24 00:00:00

THE TARIFF.

The attention of Congress is invited to the importance
of Leaking suitable modifications and reductions of the
rates of duty imposed by our present tariff laws. The
object of imposing duties on imports should be to raise
revenue to pay the necessary expenses of Government.
Congress may, undoubtedly, in the exercise of a sound
discretion, discriminate in arranging the rates of duty
on different articles; but the discrimination should be
within the revenue standard, and he made within the
view to raise money fur the support of Government.
It becomes important to understand distinctly what is
meant b:v a revenue standard, the maximum of which
should not be exceeded in the rates of duty imposed. It
is conceded, and experience proves, that duties may be
laid so Leigh as to diminish or prohibit altogether the im-
portatio a of any given article, and thereby lessen or de-
stroy tl-Le revenue, which, at lower rates, would be de-
rived from its importation. Such duties exceed the
revel ru e rates, and are not imposed to raise money for
the s upport of Government. If Congress levy a duty for
rever..ue, of one per cent. on a given article, it will pro-
duce a given amount of money to the Treasury, and will
inci, lentally and necessarily afford protection or advan-
tage to the amount of one per cent. to the home mann-
fact urer of a similar or like article over the importer. If
the duty be raised to 10 per cent., it will produce a
gre rater amount of money, and afford greater pro-
tection. If it be still raised to 20, or 25, or
3t per cent., and if, as it is raised, the re-
venue derived from it is found to be increased, the pro-
teeth)] i or advantage will also be increased ; but if it
be rai,ed to 31 per cent., net] it is found that the
revenue produced at that rate is less than 30 per cent.,
it ceases to be a revenue duty. The precise point in
the r.scending scare of duties at which it is ascertained
from experience, that the revenue is greatest, is the
maxi onim ratf.• of duty which can be laid for the bona
fide p urpose of collecting money for the support of Go-
vern' pent, To raise the duties higher than that point,
and thereby diminish the amount collected, is to levy
they a for protection merely, and not for revenue. As
lon, r, then as Congress may gradually increase the rate
of 4 luty on a given article, and the revenue is increased
by such increase of duty, they are within the revenue
st: .nclard. When they go beyond that point, and, as
th sy increase the duties, the revenue is diminished or
di .s trued, the act ceases to have for its object the rais-
i fig of money to support Government, but is for protection
reerely.
It does not follow gist Congress should levy the

highest duty on all articles of import which they will
bear within the revenue standard, for such rates would
probably produce a much larger amount than the eco-
nomical administration of the Government would re-
quire. Nor does it follow that the duties on all articles
should be at the same, or a horizontal rate. Some ar-
ticles will bear a much higher revenue duty than others.
Below the maximum of the revenue standard Congress
may and ought to discriminate in the rates imposed,
taking care so to adjust them on different articles as to
produce in the aggregate the amount which, when
added to the proceeds of sales of public lands, may be
needed to pay the economicalexpenses of the Government.
In levying a tariff of duties Congress exercises the
taxing power, and for purposes of revenue may select
the objects of taxation. They msy exempt certain
articles altogether, and permit their importation free of
duty. On others they may impose low duties. In
these classes should be embraced such articles of neces-
sity as are in general use, and especially such as are
consumed by the labourer and the poor, as well as by
the Healthy citizen. Care should he taken that all the
great interests of the country, including manufactures,
agriculture, commerce, navigation, and the mechanic
arts, should, as far as may be practicable, derive equal
advantages from the incidental protection which a just
system of revenue duties may afford. Taxation, direct
or indirect, is a burden, and it should be so imposed as
to operate as equally as may be on all classes, in the
proportion of their ability to bear it. To make the
taxing power an actual benefit to one class necessarily
increases the burden of the others beyond their pro-
portion, and would be manifestly unjust. The terms
protection to domestic industry," are of popular im-
port ; but they should apply under a just system to all
the various branches of industry in our country. The
farmer or planter who toils yearly in his fields is engaged
in " domestic industry," and is as much entitled to have
his labour " protected," as the manufacturer, the man of
commerce, the navigator, or the mechanic, who are en-
gaged also in "domestic industry" in their different pur-
suits. The joint labours of all these classes constitute
the aggregate of the "domestic industry" of the nation,
and they are equally entitled to the nation's " protection."
No one of them can justly claim to be the exclusive re-
cipients of " protection," which .can only be afforded
by increasing burdens on the " domestic industry" of
the others.
If these views be correct, it remains to inquire how
far the Tariff Act of 1842 is consistent with them. That
many of the provisions of that Act are in violation of the
cardinal principles here laid down all must concede. The
rates of duty imposed by it on some articles are pro-
hibitory, and on others so high as greatly to diminish
importations, and to produce a less amount of revenue
than would be derived from lower rates. They operate
as "protection merely," to one branch of " domestic in-
dustry," by taxing other branches.
By the introduction of minimums, or assumed and
False values, and by the imposition of specific duties, the
injustice and inequality of the Act of 1842, in its prac-
tical operations on different classes and pursuits, are
seen and fe!t. Many of the oppressive duties imposed
by it under the operation of these principles, range from
1 per cent. to more than 200 per cent. They are pro-
hibitory on some articles and partially so on others, and
bear most heavily on articles of common necessity, and
but lightly on articles of luxury. It is so framed that
much the greatest burden which it imposes is thrown
on labour and the poorer classes, who are least able
to bear it, while it protects capital and exempts the rich
from paying theirjust proportion of the taxation required
for the support of government. While it protects the
capital of the wealthy manufacturer, and increases his
profits, it does not benefit the operative or labourer in
his employment, whose wages have not been increased
by it. Articles of prime necessity, or of coarse quality
and low price, used by the masses of the people, are, in
many instances, subjected by it to heavy taxes, while
articles of finer quality and higher price, or of luxury,
which can be used only by the opulent, are lightly taxed.
It imposes heavy and unjust burdens on the farmer, the
planter, the commercial man, and those of all other pur-
suits, except the capitalist who has made his investments
in manufactures. All the great interests of the country
are not, as nearly as may be practioable, equally pro-
tected by it.
The Government in theory knows no distinction of
persons or classes, aid should not bestow upon some fa-
vours and privileges which all others may not enjoy. It
was the purpose of its illustrious founders to base the
institutions which they reared upon the great and un-
changing principles of justice and equity, conscious that
if administered in the spirit in which they were con-
ceived they would be felt only by the benefits which they
diffused, and would secure for themselves a defence in
the hearts of the people, more powerful than standing
armies, and all the means and appliances invented to
sustain governments founded in injustice and oppression.
The well-known fact that the Tariff Act of 1842 was
passed by a majority of one vote in the Senate, and two
in the House of Representatives, and that some of those
who felt themselves constrained, under the peculiar cir-
cumstances existing at the time, to vote in its favour, pro-
claimed its defects, and expressed their determination
to aid in its modification on the first opportunity, affords
strong and conclusive evidence that it was not intended

to be permanent, and of the expediency and necessity of
its thorongh revision.
Ln recommending to Congress a reduction of the pre-
sent rates of duty, and a revision and modification of the
Act of 1842, I am far from entertaining opinions un-
friendly to the manufacturers. On the contrary, I desire
to see them prosperous, as far as they can be so, without
imposing unequal burdens on other interests. The ad-

vatitagc,' under any system of indirect taxation, even
within the revenue standard, must be in favour of the
manufacturing interest ; and of this no other interests
will complain.
I recommend to Congress the abolition of the minimum
principle, or assumed, arbitrary, and false value, and of
specific duties, and the substitution in their place of ad
valorem dnties, as the fairest and most equitable indirect
tax which can be imposed. ,By the ad valorem principle all
articles are taxed according to their cost oevalue, and those
which are of inferior quality or of small cost bear only the
just proportion of the tax with those which are of supe-
rior quality or greater cost. The articles consumed by
all are ts xed at the same rate. A system of ad valorem
revenue duties, with proper discriminations and proper
guards against frauds in collecting them, it is not
doubted will afford ample incidental advantages to the
manufacturers, and enable them to derive as great pro-
fits as can be derived from any other regular business.
It is believed that such a system, strictly within the re-
venue standard, will place the manufacturing interests
on a stable footing, and ensue to their permanent ad-
vantage, while it will, as firmly as may be practicable,
extend to all the great interests of the country the inci-
dental protection which can be afforded by our revenue
laws. Such a system, when once firmly established, would
be permanent, and not be subject to the constant com-
plaints, agitations, and changes which must ever occur,
when duties are not laid for revenue, but for the "pro-
tection merely" of a favoured interest.
In the deliberations of Congress on this subject, it is
hoped a spirit of mutual concession and compromise be-
tween conflicting interests may prevail, and that the
result of their labours may be crowned with the happiest
success.

RECOMMENDATION OF A GOVERNMENT
BANK.
By the constitution of the United States it is provided,
that " no money shall be drawn from the treasury but
in consequence of appropriations made by law. ' A
public treasury was undoubtedly contemplated and in-
tended to be created, in which the public money should
be kept from the period of collection until needed for
the public use. In the collection and disbursement of
the public money no agencies have ever been employed
by law, except such as were appointed by the Govern-
ment, directly responsible to it, and under its control.
The safekeeping of public money should be confided to
a public treasury created by law, and under like respon-
sibility and control. It is not to be imagined that the

'raters of the constitution could have intended that a

treasury should be created as a place of deposit and safe-
keeping of the public money which was irresponsible to
the Government. The first Congress under the consti-

tution, by the Act of the 2d September, 1789, " to esta-
blish the treasury department," provided for the appoint-
ment of a treasurer, and made it his duty to " receive

and keep the moneys of the United States," and " at all
times to Lubmit to the secretary of the treasury and the
comptroller, or either of them, the inspection of the
money in his hands."
That banks, national or state, could not have been
intended to be used as a substit, to for the treasury
spoken of in the constitution, as keepers of the public
money, is manifest from the fact, that at that time there
was no national bank, and but three or four state banks

of limited capital existed in the country. Their employ-
ment as depositories was at first resorted to, to a limited
extei t, but with no avowed intention of continuing them
permanently. in place of the treasury of the constitu-
tion. When they were afterwards from time to time
employed, it was from motives of supposed convenience.
Our experience has shown that when banking corpo-
rations have been the keepers of the public money, and
been thereby made in effect the treasury, the Govern-
ment can have no guaranty that it can command the

use of its own money for -public purposes. The late
Bank of the United States proved to be faithless. But
a few years ago, with millions of money in ,their
keeping, the Government was brought almost to
bankruptcy, and the public credit seriously impaired,
because of their inability or indisposition to pay, en
demand, to the public creditors, in the only cur-
rency recognised by the constitution. Their failure
occurred in a period of peace, and great inconvenience
and loss were suffered by the public from it. Had the
country been involved in a foreign war, that incon-
venience and loss would have been much greater, and
might have resulted in extreme public calamity. The
public money should not be mingled with the private
funds of banks or individuals, or be used for private pur-
poses. When it is placed in banks for safe keeping, it is
in effect loaned to them without interest, and is loaned by
them upon interest to the borrowers from them. The
public money is converted into banking capital, and is
used and loaned out for the private profit of bank stock..
holders ; and when called for (as was the case in 1837), it
ma be in the pockets of the borrowers from the banks,
instead of being in the public treasury contemplated by
constitution. he framers of the constitution could
never have intended that the money paid into the trea-
sury should be thus converted to private use, and placed
beyond the control of the Government.
Banks which hold the public money are often tempted
by a desire of gain to exceed their loans, increase their
circulation, and thus stimulate, if not produce, a spirit
of speculation and extravagance, which, sooner or later,
must result in ruin to thousands. If the public money be
not permitted to be thus used, but be kept in the treasury
and paid out to the public creditors in gold and silver,
the temptation afforded by its deposit with banks to an
undue expansion of their business would be checked,
while the amount of the constitutional currency left in
circulation would be enlarged by its employment in the
public collections and disbursemonts, and the banks
themselves would, in consequence, be found in a safer
Wad sounder condition.

At the present, state banks are employed as deposito-
ries, but without adequate regulation of law, whereby
the public money can be secured against the casualties
and excesses, resulsions, expansions, and defalcations, to
which, from over-issues, over-trading, an inordinate de-
sire for gain, or other causes, they are constantly ex-
posed. The Secretary of the Treasury has in all cases,
when it was practicable, taken collateral security for the
amount which they hold, by the pledge of stocks to the
United States, or such of the states as were in good
credit. Some of the deposit banks have given this de-
scription of security, and others have declined to do so.
Entertaining the opinion that "the separation of the
moneys of the Government from the banking institutions
is indispensable for the funds of the Government and the
rights of the people," I recommend to Congress that
provision be made by law for such separation, and that
a constitutional treasury be created for the safe-keeping
of the public money. The constitutional treasury re-
commended is designed as a secure depository for the.
public money, without any power to make loans or
discounts, or to issue any paper whatever as a cur-
rency or circulation. I cannot doubt that such a
treasury as was contemplated by the constitution
should be independent of all banking corporations. The
money of the people should be kept in the treasury of
the people created by law, and be kept in the custody of
agents of the people chosen by themselves, according to
the forms of the constitution ; agents who are directly
responsible to the Government, who are under adequate
bonds and oaths, and are subject to severe punishments
for any embezzlement, private use, or misapplication of
the public funds, or for any failure in other respects te,
perform their duties. To say that the people or their
Government are incompetent, or not to be trusted with
the custody of their own'money, in their own treasury,
provided by themselves, but must rely on the presidents,
cashiers, and stockholders of banking corporations, not
appointed by them, nor responsible to them, would be
to concede that they are incompetent of self-government.
In recommending the establishment of a constitutional
treasury, in which the public money shell be kept, I
desire that adequate provision be made by law for its
safety, and that all executive discretion or control over
it shall b-s removed, except such as may be necessary in
dieecting its disbursements iu pursuance of appropriation
made by law.