The weekly pioneer and Democrat., 1864-07-15
THE FEDERAL FINANCES.


Mr. Chase's Letter of the 70 ulimo.
TREASURY DErAKrMENr, June 20, 1864.
SIR-In previous communications to the
Committee of Ways and Means, 1 have on sew
eral occasions, expressed the opinion that,
in order to insure sufficient means even for
considerably reduced expenditures, a large in
crease OF internal revenue was Indispensable
and that this increase should be such that the
internal revenue and the receipts from customs
would be equal at least to one half the national
expenditure.
the expenditure for the fiscal year which ends
tomorrow at $e45, ,413, 1888 20; and expressed
the opinion that the expenditure not met from
revenue could be provided from loans.
This opinion rested UPON the expectation
that success would attend our arms that the
rebellion if not crushed within the year, would
receive such fatal blows that its complete sup
preston within a brief period would be secur-
ed, ard that the year would, therefore, close
with diminished and diminishing expenditures.
The reduced expenditures of the first quarter
of the DOW closing fiscal year, and the general
condition of affairs at the commencement of the
present session Of Congress in December, 1863
seemed to justify this opinion, and to warrant
the expectation that the amount to be provided
by loans would be far less than was anticipated
In December, 1862, and reduced my estimate
accordingly.
Events have shown that the original estimate
was most correct. The expenditures, increased
by new bOunties, by new levies of troops, and
by the great disbursements incident to the vast
movements now in progress, have not only
gone beyond my second estimate, but have
largely exceeded my first. The revenue, how
ever, has also largely exceeded the second, and
by several millions also my first estimate.
The necessity of meeting these expenditures,
recently so rapidly augmented, has led to the
increase of circulation beyond its due proper
ton to wants tor money payments, and to the
Offering of bonds in quantities beyond the i'm
mediate demand for home investment Hence,
depreciation in currency and in the market va
lue of bonds. There is no good reason, in gen.
eral, except over supply, for any considerable
difference in purchasing power between Uni.
ted States five dollar coin and United States
five dollar note, nor for the disposal of United
States five per cent. bonds, payable principal
and interest in coin, for less than par in notes
or coin. The injurious influences of over-sup-
ply have now, however, been aided by fears of
i'll success in military operations, and by other
alarms, excited by the unscrupulous acts of
traitors and enemies.
To insure fair price for bonds, and to pro-
vide for gradual reduction in the volume of
circulation, and thereby insure diminution of
the preminm on gold, it seems absolutely es-
sential to reduce the amount of prospective
loans. t.-. ~
10 effect this latter reduction, there are but
two ways. Expenditure must be reduced, or
revenue must be increased. The best wav is
to reduce expenditures and increase revenue.
In the internal revenue and tariff bills which
have just received the sanction of the ma
tional Legislature, it was doubtless the inten-
ton of Congress to increase revenue by the
full amount required by the public exigencies;
but / am constrained to think that this inten-
tion has by no means been accomplished.
The aggregate revenue from all sources for
the year closing tomorrow, will reach, as es-
timated, $242, ,o00, 600; from customs, $103,-
600, 900; from internal revenue, $109 600, 600
from miscellaneous sources, including sales of
gold and exchange, $50, 900. The ex-
penses will reach, including two months pay
of the army, due July 1, 1864, according to
the best estimates that can now be made,
$3.50 600, ,O00
The amount in excess of revenue is $640 000,-
600. The necessity of providing this large
sum from loans in various forms, has caused
the present condition of affairs. The aggre-
gate revenue from the tariff, for the next fiscal
year, cannot be safely estimated at more than
$6O, 900 600; and the income from miscellane-
GUS sources may be set down at $40, ,OOO 600,
with chance of increase, if the insurrectiona-
ry district trade bill shall become law, to
$35 .OOO, 600. have caused careful estimates
10 De made OF the probable income from inter-
nal duties by Collector Orton of New York
and Acting Con missioner Rollins, and their
experience and soundness of judgment lead me
to rely very confidently on their conclusions.
Collector OrsOn estimates the amount at $780,
600, 900, and Acting Commissioner Rollins at
$223. 5000, 900. Taking the highest amount and
assuming that the miscellaneous receipts will
reach $35, ,0O0, 900, the whole amount of reve-
nue. for the year cannot be set down at more
than $31S, 900, 900. The expenditure of the
year cannot be stated even with tOlerable accu-
racy; but there is nothing in our experience
which will justify the setting of it at less than
$3.50 ,0O0, 900. 1t is more likely to reach $500,
600, 600 or $3.50, 900, 600. Take the mean sum
and deduct the $31S, ZOO, 900 of the expected
revenue and the difference is S482, 600, 900 to
be raised by loans. Can this be done? The
loan bill only provides for $4o0, ,000, 900; and
that is the very largest sum in my judgment
that can reasonably be attempted.
There remains then, $82 600, 600 to be pro-
vided for, and all considerations of public in
terest seem to me to require inperatively that
| it be raised by an increase of revenue With
such an increase, it is probable that our credit
| will be 90 improved that all the great objects
already indicated can be accomplished.
| 1t is useless to expect any increase in the