The daily exchange. [volume] (Baltimore, Md.) 1858-1861, 1861-09-05
From The London Times, August 18Th.
THE WAR loan

IN COniederacy. We may venture, perhaps, TO |
ass without too rigorous scrutiny the onld,
hough somewhat gascOnadng, vote by which the
n Negligence Of the defeat at Manassas was received
u Congress. The millions preciPitateiy offered
represented, probably, the patriotic RESOLUTION OF
he North to spend its last dollar in the preserva-
ion Of the Union; but, without pressing these
DOSE figures to their literal import, we are really
astounded at the conclusions which are forced upon
US BY recent reports. 1t used to be thought that
this country had attained unhappy, but unap-
Droachable, eminence in national indebtedness
Half our entire expenditure in ordinary years goes
still to pay the interest of borrowed money, and
when we were told to look at America and observe
how under Democratic institutions country
populous could be governed at quarter
of the expense,.w could not but feel the force of
the contrast. We knew, indeed, that America had |
all her temptations to come, and it occasion |
ally remarked in these columns that the tendency |
to extravaganza the other side of the Atlantic |
rapidly increasing, but the comparison still |
remained striking one. Now, however, critical
test has been applied. America is involved in war,
and the rate at which she is raising men and mon
ey will, if carefully examined, appear almost too
extraordinary for belief.
The exact position of American finances must be
to great extent matter of estimate even in the
country ITSELF but it has been calculated on good
authority that the actual expenditure of the Fede
raj Government at the present moment is at the
of Els 600 600 per annum. This it is true, is
less by 60 GOO 900 than the amount of our own eX
pendture-fS4 900, 000--in the heaviest year OF
the Crimean War; but one-thrd of that charge
was absorbed in providing for the interest of the
National Debt, and the whole only showed an
excess of some G350C0,000 over our ordinary peace
expenditure. In 1853, spent G5l 900 900; in
1854, sec, 900 600; and it was not until we found
ourselves in the very agony of the struggle that we
added some 60 per cent to our usual outlay. We
may say, in short, that the war cost us for the
twelve months when il was most expensive about
$50 900, 900, of money, whereas the civil war is
costing the Americans at its very outset at least
twice that sum. An expenditure OF f75,OOO,OO
represents excess Of about G60, 000,0 900 the
ordinary outlay of the Federal Government, and
this is incurred when the first campaign has but
Just been opened, and before the real proportions
of the war can be supposed to be developed This,
however, though most ominous fact, constitutes
by no means the most striking feature OF the case
before u.s.
When We in this country, were spending these
| tens of millions upon the war in hand, were also
| taxing ourselves in proportion. We met an OUTLAY
of GS4 900 900 by taxes to the amount of f6 600 GOO
| net, actually paid into the .Exchequer after the
| costs of collection had been deducted In the fol-
lowing year we provided no less than EOS 600, 600
to meet aggregate charge of s78 900 600, tbs
| in the two years together added only some
$50 600 600 to the national dept. In fact the whole
| war; sanguinary and exhausting as it proved. only
augmented the public debt BY the OF f32, 793,-
Co., Let us contrast these statistics with the
| accounts received from America The ordinary
| Federal revenue amounts to about G1G, 600 000 so
that the extraordinary charge Of the war; be met
either by taxation or loan, is. have said, about
| SEQ, 600, 600. But how do the Americans propose
| to raise this? What proportion will they borrow,
and What proportion will they levy by taxation? -
| As far as collect from the figures transmit
| ted they design to borrow the whole. They have
voted fresh taxes undoubtedly; but these taxes We
! imagine, viii do little more than provide for the
interest of the debts contracted, or, as it is
| phrased serve as "a basis for loans"
| We arrive at this conclusion partly by arithmet
| zeal calculation, and partly from limitations con
veyed by the American JOURNALS. We are told dis
tinctly that though Congress was ready to author
ize any amount of loans it hesitated when asked
| for supplies on which to base them; and observe
! that, though the best affected of the New York
bankers did at first suggest that provision should
| be made for meeting part of the principal they
presently admitted that this arrangement might be
dispensed with. Moreover, it seems pretty evident
| that the produce of the new taxes will not suffice
| for much more than the liquidation of the en0r.
| nous interest, which, as we shall presently remark
will be necessarily aceruing Until we get The es
| Inmates OF the Government placed before us,
| can do little more than approximate to the truth
by conf lecture and computation; but, if the Fedora
revenue to be doubled by the proceeds of rest
taxation, the increase of income would be almos
| all absorbed In paying the interest OF the deb
| which will probably be contracted by this TINT
| twelvemonth. In other words the Americans ara
now creating national debt at the rate of eco,
600 900 year.
We entreat the reader to observe for a momen
what this implies. Such a course throws all Ou
borrowing into the shade. In all the nine year
of the American War, from IVA to l7SG, we ONLY
borrowed flG4 900, 600. In the twenty-five year
of the great Revolutionary War, we averaged les
than $50, 900 year, and in the tremendou
year 1894, the loan was but $50 GEO 900. Bn
this is only half the battle. The burden of LOAF
depends not so much on the amount of princps
as on the rate of interest We borrowed GU
money, even in l8l3 at little above AZ per cent
and in 1856 at little above per cent. TIL
Americans, however, began by an offer of pc
cent, and are at this moment compelled to pay Il
or II per cent. We find, therefore, that Will
ly uOulf no lad IN fhair
tonal debt &C 900, coo annually would be added t.
the charge of that debt, so that four years ans
three-quarters of their present expenditure wou
saddle them with a burden equal to that which we
have incurred in a century and half MIR. Glad
stone has to provide f2S 900, 900 to satisfy tn
!, public creditors of Great Britain. In the yea
1850, if the American War should be protrac'ed 5
/ long, Mr.. Chase's successor will have to provid
rather more than that sum for the creditors of tn
| Union.
1t is obvious to remark that the war NAV not b
Congress were probably based upon the assumptio,
that the way to make short work was to 20 t
work unsparingly at first. But the history of III
campaign up TO the present point contains little t
suggest speedy termination of the struggle. Th
Southerners are not likely to succumb, nor tn
Nortberners to retire. Neither is it at all in &C
cordance with experience in these matters that tn
cost of a war should be diminished as it goes on
The scale Corporations, indeed, far as resolution
CO. has been actually extended. The last mail tell
US that the Volunteer Bills passed by Congress EN-
powered tne PRESIDENT TO call l,oOO,OOO men into
the field and it was supposed that half those mum
oers would be actually raised. Napoleon had not
larger army when he crossed the Niemen with thu
most prodigious host ever seen in modern days
We can detect no sign, therefore, of any curtaii
ment in the dimensions of this extraordinary war
though we may well doubt whether the American
will find themselves able to borrow quite so fast
they desire. They have evidently the will to riva
the most reckless of States in this ruinous race
but they may not have the power. Their credit il
already but Indifferent, and the terms of the mar
| ket are sure to become less and less favorable al
loan follows loan. This, however, is the only diff
Guilty likely to operate as a check to their career