The National tribune., 1882-05-13
the orator have passed from memory, the
virtues which we celebrate will
"Smell sweet and blossom in the dust"
Finance and Common Sense.

y
"Smell sweet and blossom in the dust"
Finance and Common Sense.
The financial condition of the Government
continues to be q cause of intense solicitude
to some of our statesmen. They profess to
see in the plethoric state of the Treasury the
shadow of a great calamity in the near future.
If the yearly revenues of the Government
continue to be so largely in excess of its
ordinary requirements, and this surplus is,
as now, devoted to paying off the nationl
debt, they say the time will shortly come
when all the bonds that it is practicable to
call in will have been paid off, and there
will then be no use for this surplus. The
consequence of this, in their opinion, will be
that the money will accumulate in the Treas
ury, and bring about a contraction in the
circulating medium in the country, which,
in turn, will precipitate a panic in the bust
ness world. Up to May 1st, or during ten
months of the present fiscal year, the reduc-
ton effected in the national debt amounted
to $128, 100000, and it is estimated that the
total reduction for the year ending June 30th
will fall little if any short of S150O00,000.
At this rate of payment it would only re-
quire about three years to dispose of the
S500,000,O00 of outstanding 81 per cents.
which are the only securities that can be
called prior to 1892, when the 44 per cents.
fall due, and at the end of this period, ac-
cording to these statesmen, there would be
no way of paying out the surplus revenue in
the Treasury and preventing the disastrous
contraction of the currency which otherwise
must ensue. To quote their favorite illus
tration, the country would then find itself
on the brink of a precipice, with no alterna-
tive but to take the fatal plunge. We agree
with the prophets of evil that the occurrence
of such a catastrophe ought to be prevented,
if possible, but we are disposed to think that
they have made u mountain out of Il mole
hill, the more easily to reconcile the public
to their plan for surmounting it. This plan
to state it plainly-is simply to so reduce
the internal revenue taxes as to wipe out the
present annual surplus in the Treasury, and
we need hardly say that it meets with the
open approval of the whisky and tobacco
interests, which would profit largely thereby.
Our objections to this plan necessarily in
volve the reputation of the considerations
upon which it is based, chief among which
is the assertion that within the next three
or four years the Government will have
reached point when it can no longer pay
out its surplus revenues in the process of
debt paying. In addition to the $500, 100000
of 81 per cents. to be taken up, there is,
in the way of extraordinary expenditures, the
.as. of $780, 900 on Arrears of Pension Ac-
at to be provided for, making total of at
q It $B00,00O,000 to the payment of which
sannual surplus can legitimately be de-
ted" Suppose this surplus to remain at
,50,000,000, it will take some six years to
make these payments. This will bring us
to 1888, or within four years of the time
when S250,000,000 of a per cents. will be-
come DUE and when the premium on these
bonds will doubtless have fallen to point
that will admit of their purchase in open
market for Treasury account. 1t will be
seen, therefore, that the danger which the
advocates of revenue reduction profess to
see in the present state of the Treasury has
no real or tangible existence.
Aside from this fact, however, we are op-
posed to the remedy which they put forward
for this fictitious evil, because it is in reality
worse than the disease, supposng any ex-
listed. In the Arst place, the internal reve-
nue. taxes ought not to be disturbed until
the Government has reduced the fixed
charges upon the Treasury to the minimum,
and in the second place when any change is
made it ought to take the form of the abolish
ment of the entire system of internal revenue
taxation. AS to the first point, it is clear that
by the extinguishment of the 81 per cents.
an annual interest charge of SIT 800, 900 will
be saved, leaving the interest (S2S, ,000,O00)
on the $700,00O,000 of per cents. due in
1907 and that ($11 ,250,0O0) on the a per
cents. due in 1892 as the only interest ex-
pense to be provided for. AS soon too, as
the amounts due under the Arrears of Pen
sion Act have been paid, the annual charge
on pension account will be reduced to
$35,000,000, and it will be possible then to
abolish the internal revenue taxes without
in any way impeding the progress of debt
paying.
AS to the second point, it is evident that
confusion and disturbance to trade must
result from anything short of the entire
abolition of the internal revenue taxes, and
the effect will be to strengthen monopoly at
the expense of the small manufacturers :;
but one of the most serious obstacles TO
partial reduction is the fact that it will cost
the Government just as much to collect so
per cent of the present taxes as it now does