Brownlow's Knoxville Whig. [volume] (Knoxville, Tenn.) 1866-1869, 1868-01-08


lowed and adhered to- It is matter of simple
calculation 10 show that the application annlisily
of A trihe more than one per cent. of The whole
present debt-that is, twenty-five millions c11ol-
iars-wil extingush this debt in thirtythree gears
So Che able hnancier whose success 10 sustaining
our Government during its recent contest Tor It's
istence, cannot be too highly appreciated knew
and more than once proposed. In his report of Ju-
" T. fs6lsMr Chase observed: " 1t will hardly
be disputed that in every sound system Of finance
adequate provision by taxation for the prompt dis
charge Of all ordinary demands, for the punctual
payment Of the interest on loans and for the crea-
ton Of qradaatly Increasing fst,ld for THE RE-
DEMPFIoN OF the principal, is indispensable" A
provision for this purpose was proposed by him
and, again, proper amount for a sinking
fund was urged. The proposition for a sinking
fund Of one per cent. accordingly enacted into
a law in 1862. The Importance Of this measure is
subsequently Rdverted TO in his report Of Deem
ber 1863, and the reason is given-"the extra0rdi-
nary expenditures carrying it into eject.
II was TO have boon hoped, indeed, expected, that
when the recent rebellion was crushed this great
measure of a systematic, ensured reduction would
have been permanently established. 1t was not
done, but the dangerous policy was adopted not as
merely temporary, but as a@settled plan, of accu-
mulating successive sums IN the Treasury to dis
charge al lc portions Of the principal of the debt
and as necessary TO this purpose, Of retaining an
amount Of taxation most injurious to the industry
Of the country, and most oppressive in its various
burdens. Ia January 1917, only three months be-
fore the large reinforcement of the sinking fund be-
fore alluded to was passed by Congress it was sta
ted by Mr. Lowndes, then Secretary Of tho Treas
ury at is obvious that no advantage can arise
from keeping in the Treasury a to be applied
at some future period to the payment Of the princ
pal of a debt. The report of Mr.. Mccullough Of
the 30th Of November last states that within pc
Rod of little more than two years, 'the debt has
,,,Je AMI lef4 how l.
in the Treasury a sum Of Sl3399s, 1913 o." OF
this procedure be writes THE right start in the
direction suggested has been made The daily
bankruptcies, the intense public discomfort the in
tense alarms, the overwhelming pressure of various
conflicting opinions upon Congress the strange the
cries ostentatousy promulgated all speak the efee
Of this policy accompanied as It has been by rapid
contraction Of the circulating medium, now ALSO
lutey interdicted by the popular branch of Con-
gress Nor is this all These occasional payments
On account, necessarily uncertain and therefore
dangerous and the persistent contraction of the
rency, are declared 60 be still the policy Of the
Treasury Department when It's report shows that
with no diminution Of taxes the total amount Of
surplus anticipated at the end Of the fiscal year,
June so 1863 is nine million of dollars 1.-THE Sec
retaryn he writes, Sis hopeful that Congress will
take measures 10 largely reduce expenditures in ali
branches Of the service, that steady reduction
of the debt may be continued Such Is the hope
it is trusted that this will be reduction, not by
casual contingent payments but by an adequate
sinking fund Of positive-known operation reviying
and fixing the public credit facilitating loans and
simultaneously reducing taxation within limits
proper 10 every Interest of tho country The sub
stitution of bonds payable principal and interest 10
coin for those to which such provision is ex-
pressy and in terms assured evidently accords with
the sense of the honest part of the community and
any legislation taxing the existing bonds would DO
not merely greYous error but fatal crime A
government has no righs TO tax its own funds
"Public debt" Hamilton remarked, could scarce
ly, in legal phrase be defined either property in
possession or in action 1t is not the first until re-
duced into possession by payment" To be the sec
ond would suppose legal power TO compel pay
ment by suit which does not exist. The true def
milton of public debt is property su5sistrg In the
faith Of the Government. Its essence is promise
Its definite value depends upon the reliance that the
promise will be definitely fulfilled. Can the Gov
eminent rightfuhS'tax its promises Can it put
/ its faith under contribution Where or what is
the value Of the debt, if such right exist?
1t is theory impossible TO reconcile the two IDEAS
of premise which oblgates, with a power to make
a law which can vary the effect Of it." Confidence
unhesitating well-founded confidence is what is
needed,
A al estion here presents itseIf-not {; mere mat
ter of detail-whether the new loans ought all or
part of them to assume the form of stock or of
be registered. That the form Of negotiable bonds
was wisest in the original loans may be admitted ;
but, inasnuch great embarrassment is probable
to arise in remittanees for the payment of the in
terest of these of substituted bonds held abroad
now If an adequate sinking fund be created and
the credit of the Government be thereby establish
ed would not the issue of stock perhaps of regis
rered bonds, by avoiding in great measure remit
tances for the payment Of interest," be Of impor-
tance2
Both as question of restoring the balance Of
trade and Of securing greater home interest in
the stability of the public counsels this is not 10 be
disregsrded. The debt of the United States as pro
vided for during nearly half its life was in stock as
is that of Great Britain.
But what is 10 be our revenue system The very
intelligent Commissioners of the Revenue will doubt
less propose great limitation of the sources of tax
alton. A glance at the English system shows from
hoiO 1eC sources a sam of two hundred and sixty
five millions Of dollars it is estimated would be de-
understanding the income tax, pronounced again
and again in England during succeeding discus
sions Of the finances to be direct tax: aud which
being most certainly direct tax, as the Constitu-
ton Of the United States requires direct taxes to be
apportoned among the States in the ratio of fede-
raj population in its existing FORM is clearly uncon-
stitutOnal and not only unconstitutional but
greatly unequal. Thus the income tax collected in
the twenty-six loyal States aud in the Territories
in 1865, a little exceeded twenty and a half nil
rebel States little exceeded quarter Of one mil
ion-while in 1866 the loyal States contributed bv
this tax over sixty millions, and the rebel States
only a little more than three quarters of million
OF this large sum, New York paid eighteen millions
Of dollars Ohio over ire millions Mississippi
siIty dollars On all this matter of revenue an IN
telhgent committee, calling before them Chief
Justice Chase, the author Of the system, the Hon
Freeman Clarke, perfectly converssnt with the sub
iect, with the aid Of the present Commissioner Of
the Revenue, can arrive at sufficiently accurate &c
suits.
That some other light than that of the present
Secretary Of the Treasury Is required may not be
ndecorousy supposed, after the PRONUNCIATION of
his recent report. Would prudent statesman, al
such time as this, idly cast censure upon his
predecessor because of the egal-tender notes and
the creation of q national banking system, though
both were errors But what the folly if these be
not errors Who that has marked the course OF
our fiscal transactions can reasonably believe that
sufficient funds could have been provided, in guam
tty or in season, during the past civil war by the
successive issues Of bonds Cutting the market and
in their rapid declension in value FORGETTING that
vslne-bonds TO be paid for in the worthless notes
Of bankrupt State banks Did not the first issue Of
bonds fall to IS and then was not the taking Of
them matter of earnest, repeated solicitation
Who can have forgotten the powerful influence of
the issue of Treasury notes in quickenng and sus-
tanning public confidence, and in bringing forth
ana increasing the resources OF our country ana
the large amount of interest saved thereby to the
nation As TO our banking system, it has been
said snd perhaps truly said, that excepting the less
Of life the whole cost Of the rebellion is oompensa-
ted BY the creation Of a national medium Of eircua-
ton, thus fulfilling Of the high intents Of the
Constitution. Yet are we told by the Secretary Of
the Treasury Of this extensive commercial country
Of such various Interests that were he free 10 do
he would disappr0ve a banking system, "eyen the
most perfect under which circulating notes are
issued, and this when we possess a circulating
dunn, in its security and its universally the best
in the world. These remarkable fallacies are fol-
lowed by proposal still remarkable. It is to
merge the present debt into a Of bonds at SIX
per cent, reserris one per cent 70 Be Paj9 annually