The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1867-06-03

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Literature, etc
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News
The Redu ction of Taxation Necessary
TO Increased Production.
SECRETARY McCULLocH, in his late letter, urges
upon public attention the truth that the coun-
try needs more production. This all will agree
to but the true question is, how to secure an
increase of production And, unfortunately
when we come to discuss this question, we find
the financial plans and theories of the Secre-
tary standing solidly athwart the path of ma
tional progress and prosperity. The Secretary
is in favor of paying off the national debt by
the generation that contracted it. This can
only be done by a rate of taxation which is ex-
cessive, and which the industry of the country
cannot bear. The prostration of business pur-
suits and the stagnation of productive indus
try which we witness, are due to the fact that
the burden of municipal, State, and national
taxation is too great. The great stimulus to
production is the hope of reward, the profit
which man reasonably expects to reap from
his industry or his capital, or from both. We
see this illustrated every day in the ordinary
workings of the social machine. The moment
any pursuit is supposed to yield excessive
rewards, thousands are attracted to it, and
production is stimulated until the rate of
profit is reduced to the normal standard. On
the other hand, when it is found that any
branch of business persistently fails to return
fair profit to those engaged in it, it gradually
declines and production ceases.
Now the difficulty with production is that,
under Mr.. McCulloch's plan of paying off the
public debt in few years, the taxes are so
heavy that they eat up almost the entire
margin ofprofits. As a consequence, industry
languishes, production falls off, men withdraw
their capital from manufacturing pursuits and
crowd into trade and speculation, and the
whole country feels the depression. 1t is
idle, under such circumstances, to suppose
that the wheels of production can be set in
motion by hortatory appeals, however excel
lent or well intended. 1t is vain to tell the
manufacturer that he must produce more,
when he finds that he reaps no profit from
what he does produce. Profit, not good advice,
Is what stimulates production.
Another effect of our excessive taxation is
high prices. Every producer seeks to make
up for his taxes by adding them to the price of
his wares. The tax becomes a part of the
cost of production as truly as the labor. Mr..
McCulloch ascribes high prices to an assumed
redundancy of the currency; but it may we'll
be doubted whether this is not purely fiction
of his imagination. 1t is doubtful whether
we have a single dollar more of circulation
now than the necessities of the people require.
The most careful estimates make the total
amount of currency now in circulation little if
any in excess of the amount in circulation at
the breaking out of the war. Moreover,
careful examination of statistics reveals the
fact that wide fluctuations in the currency
may occur without any corresponding dis
turbance in prices; indeed, the further
fact that an increase in circulation
may be followed by a decrease in
prices, and Oice 0erSa. For instance, the average
cost of living as determined by the prices of
fifteen of the chief necessaries of life, such as
flour, meat, pork, beef, sugar, wool, leather,
coal, coffee, etc., has been determined for a
long series of years. The volume of the cur
renoy has also been determined from year to
year, for long time. Now it is found that
from 1854 to 1856 the volume of the currency
fell off seventeen millions of dollars, while the
cost Of living increased six per cent. From
1858 to 1859 the currency rose thirty eight
Millions while the cost of living decreased three
per cent. From 1861 to 1862 the currency fell
off ninety-fve millions, while the cost of living
increased seven per cent. We might multiply
facts of this kind, but we have already ad-
duced sufficient to show that something be-
sides fluctuations in the currency must be the
cause of change in prices
But now we find another fact which shows
how intimate is the relation between taxation
and the increase of prices. During our late
terrible civil war there was no unusual in
crease of prices until the home taxes were
levied. The cost of living, as determined
above in 1868, was but slightly above the
average for the thirty y-nine years before, and
was much less than for several years of that
term. Yet at that time we were maintaining
an army Of million of soldiers in the field,
and had already run the national debt up to
two thousand millions of dollars. But the
moment internal taxation was imposed, that
moment prices began to mount upwards. The
Ife-blood of labor trade, and commerce, began