The national Republican. [volume] (Washington City [D.C.]) 1866-1870, 1869-12-21

| main what Il is now, the cheapest commodlt.
10 the country, and for that reason, a. now
would continue 70 be taken by foreign coun
| tries In preference to our other domes III
| products. That this now Is the case prove
that gold is relatively the cheapest commo
dity We have to export.
The point to which the. Commissioner
would especially direct attention, and which
although pointed out 10 former reports, has
| received little consideration, Is that there Ia
no such thing possible as the resumption
and continuance OF specie payments with
continuance Of this abnormal system Of
foreign trade aud exchanges, and for the
simple reason that gold will not stay here,
aud would long ago have LEFT us to the last
dollar, had not tho bonds of the national
Government been available for the settlement
OF adv erse foreign balances In the place OF
gold. We must reduce prices, so that foreign
nations will DO willing, because II is for their
interest, to exchange product for product.
And to accomplish this there must be con.
traction, for to reduce prices permanently
aud cquitably, while maintaining seven hun
dred millions of irredeemable paper mon ey,
is simply an impossibillty.
The question how much gold Is needed to
begin aud sustain q system of redemption
depends wholly upon the answer TO the prior
question how mach currency there shall DO
to redeem. Seven hundred millions of paper
could not be kept redeemable with less than
seven hundred millions Of gold, because, with
such an amount OF currency, II would In
evitably be deprecated, and hence gold
would bear premium which every holder
OF paper would be DESTROYS 10 realize. With
four hundred millions Of paper, on the other
hand, hundred millions of gold would
probably be ample, because the currency,
not being In excess Of the wants of com.
mercc, would not suffer depreciation, and,
gold and paper being on otherwise equal
terms, paper would be preferred for It's
greater convenience In use, Just as In 1860
the banks were fully able to redeem oil of
their circulation which was presented for
payment, although having but eighteen cents
OF specie on each dollar OF immediate liabil-
tiles. II Is not the ratio between gold and
paper that needs to be regulated, but the
ratio between the amount Of paper In clrcu-
lation and the volume OF national prod action
and exchange, of which IL is the instrument.
Unpopular as tho declaration may be, the
Commissioner is constrained to believe that
contraction, direct and undlsguiscd, Is tho
one necessity of the situation; the only rem
cdy for existing evils so far as the currency
has relation to them, aud that the nation
cannot emerge from Its embarrassments and
difficulties until the makers aud administra-
tors Of the law have the honesty and courage
to take 1t up and carry 1t forward to the end
Taking up the question of taxation, the
Commissioner estimates that II can be re-
duced to the extent OF Atty millions. The
three principal sources of receipts under the
Internal revenue are the taxes on distilled
spirits aud fermented liquors, on tobacco,
and on incomes. The rate OF taxation on
the first two Of these has been fixed at q
standard which the experience OF the past
year has proved to be the most productive.
The taxes on whisky, beer aud tobacco
should not, In the opinion of the Commits
sioner, be modified, unless IL is desired to
repeat the disagreeable experiences of former
years and to perpetuate the power Of corrupt
organizations.
The income tax demands essential mo1id-
cation. The Commissioner would recon-
mend that, beginning with the next regular
assessment, the present rate OF per cent. be
reduced TO 3 per cent. upon the net income
of individuals. The reason for this recon-.
mendatiou Is, that the tax Of 8 per cent. Is
excessive and constitutes q real grievance,
being greater than that ever imposed by any
other nation, except In extraordinary ma
tional exigencles. An additional reason Is,
that an assessment OF 3 per cent. would
probably yield to the treasury sum very
nearly equal to that at present collected; In.
asmuch as, while the reduction Of the rate
would afford a great aud welcome relief to
the classes who now pay, It would at the
same time bring within reach of the tax
great numbers who now either avoid givlu &
10 lists at all, or, while doing so, force the
constituents OF their incomes so as to escape
contribution entirely.
In connection with this reduction of the
general rate, the Commissioner would rec.
Ommend that, while the absolute exemption
to all persons should be allowed to remain
as now fixed, namely, 81 200, the exemption
on account of rent should not be left In
definite, as at present, but should be strictly
limited to an amount sufficient only to re-
leve from taxation the rentals Of the labor
ing classes, for instance, $500.
In respect to the proposition, seriously ad-
vocated In many quarters, that this tax
should DO wholly removed, the Commits
sioner thinks that the attention Of the coun.
try should be called 10 the fact that this tax
was paid during the year 1868 by SO small
as 100000 persons out Of the entire
yet representing an aggregate
income OF not less than $500, 000, 900, ex-
elusive OF the amounts RENTED by reason of
rents and the minor exemptions. Allowing,
then, for the families OF these $50, 900 con.
tributors, 1t Is evident that only about a mil
lion Of the population are Interested In hay
and half millions OF the people
are interested In having 1t maintained.
To sum up what has been said upon the
income tax, the Commissioner Ia of the
opinion that q reduction of the rate of as.
sessment from five to three per cent. upon
individual Incomes, without any other change
10 the law, would not reduce the receipts
from this source by more tha. five millions
Of dollar at the outside; while, If the ex-
emption OF rent were to be limited as sug-
gested, or even fixed at Ave hundred dollars,
there would be no falling of nor abatement
In the receipts.
There then remains large body of minor
and miscellaneous taxes under the internal
revenue, which together yielded In 1868 less
han fifty millions of dollars. or these the
would recommend that tho
axes embraced In what Is known as "Sched-
lle A." viz: the taxes assessed on watches,
silver plate, pianos, billiard tables, and car
'lages, should be entirely remitted. They
ire iuquisltorial in character, highly often
live In collection, petty and contemplate In
he revenue yielded. II these taxes are in
ended to have sumptuary bearing they
ire altogether out OF the sympathes of
modern civilization; II their object Is to
secure revenue they are absurd failures.
Zen times the amount could be obtained
with the same effort In some other direction,
md without exciting half as much odIum
lud hostility.
As best calculated TO carry out the two
objects proposed at the outset Of this Inquiry,
he Commissioner would further recommend
he repeal OF the following taxes, now levied
lnder tho Internal revenue: LIST. The whole
,ody OF what Is known as special taxes or
levied on banks and bankers,
md upon manufacturers and dealers In
plrits, beer, and tobacco, being, however,
etalncd. The loss of revenue on this ac-
count will not be 10 excess of ten millions of
dollars. I'd. Tho taxes on the gross re-
,cpts Of railroads, stages, coaches, lnsur-
Ince, telegraph, aud express companies,
annals, ferries, ships, barges and steamboats,.
rhe loss of revenue from this source will
lot be In excess OF seven million dollars.
ID. Tho taxes on the sales OF articles not
otherwise specifically taxed. The receipts
rom this source will approximate eight mil
ions of dollars. Allowing, then, for the
,xtreme possible loss under incomes, the
mount OF taxation above proposed TO be
emitted to the people In consideration of
he present large and increasing surplus Of
eceipts over expenditures, would be In
he neighborhood Of twenty-six millions of
dollars.
In the matter OF tariff reform the Commits
,ioner holds, with much emphasis, that the
of an average duty of AZ per
,ent., as under the existing tariff, upon all
lutiabe imports, is excessive and unneces-
,ary, and opposed alike to the highest inter