Evening star. [volume] (Washington, D.C.) 1854-1972, 1889-12-04
FINANCIAL PROBLEMS.
of money in the Treasury should
IContiH,Hed from First PdJe.l

(COnttHfed from First PdCe.l
eumulation of money in the Treasury should
TOBACCO TAX
There was received during the last fiscal
year, from all sources of Internal revenue, the
sum Of $3.50. 1874. 1870. This. it is estimated,
would be increased. under existing laws. to
S135. 600 600 for the current fiscal year.
The total tobacco tax is S31. $50. S37.53. What
ever may be sIid of the moral or physical eff
fleets and influence of tobacco. IL has come to
be regarded a necessity by the poor as well
the rich. II is now the only product of agri-
culture that is directly taxed by the govern
ment. The repeal of this tax would reduce the
surplus about SO. 100000.
ALCOHOL FOR USE IN THE ARTS.
The proposition to remove this tax it would
seem. should commend itself to the advocates
Of free raw material for use in domestic manu-
features 1t certainly should meet with favor
from those who demand the free admission of
wool. on which there was collected in the last
fiscal year the sum of 20, $50. oil TO- and the pro-
ductlon of which has been stimulated to the
notable benefit of our agricultural interests by
rate of duty about 200 per cent less than the
tax on alcohol The proposition to exempt
alcohol for use IN the arts has met with the OBJ
lection that 1t would increase the difficulty OF
collecting the taxes on other distilled spirits,
but the Senate amendment to House bill 905l
OF the last Congress seems to provide the
necessary safeguards. In case the tax should
. be removed both from tobacco and alcohol used
in the arts the reduction thus effected would be
about S37, 5OO, 900. leaving balance from in
ternal revenue of about S97 100000
THE TARIFF QUESTION.
Reduction in receipts from customs presents
the only other advisable means for diminish
ing the revenue. This be accomplished:
First. BY reduction in rates of duty upon those
articles which, by reason of inconsiderate legis-
latlOn, or changes which have occurred in the
development of our industries are found to be
excessive. Second. BY increase in rates upon
articles which have not been successfully pro-
duced here, because not adequately protected;
the obvious effect of which increase would be
to stimulate domestic production and diminish
importations and revenue. 1t is plain that
such articles should either be fairly protected
or placed upon the free list. Third. BY trans
ferring to the free list articles which. from
climatic or other causes, are not and can not be
successfully produced here, also articles
which, under existing conditions, can not
economically produce in sufficient quantities to
meet the needs of our people, or to serve the
purpose Of competition with foreign produc-
tons, and articles the production of which is of
inconsiderable Importance.
HORIZONTAL REDUCTION.
1.-The cases are exceptional under orr tariff
In which a moderate or reasonable reduction
of rates would result in a decrease of the reve-
nue.. As a general rule. a reduction in the
rates of duty would increase lmportations in
greater proportion than the rates reduced.
and so increase rather than diminish receipts
This would be the result of any plan of hori-
Zontal reduction yet proposed; thus, a hori-
zOntal reduction of 10 or 70 per cent in rates
might result in 20 or 80 per cent even greater
increase iii the volume Of imports. The tend
ency of this would be to largely increase the
surplus, and, to the extent of Increased i'm
pOrtatlOus TO deprive American workmen of
the employment which belongs to them, and
cOrrespOndlnSly tn reduce the price of labor.
The disastrous effects of such policy upon
the country would be threefold-First. 1t would
diminish the demand for American labor and
capital by the amount of labor and capital
expended i'll foreign countries upon the pro-
ductiOn of such increased importations.
Second. 1t would withdraw from active circu-
luton here the money required to pay the
duties on these increased impOrtations, and thus
add to the evils of our present surplus. Third 1t
would largely increase the adverse balance of
trade with foreign countries and contract our
circulation by the amount of money necessarily
exported to meet our increased Indebtedness
abroad.
"a TARIFF FOR REVENUE ONLY
eontemplates such an adjustment OF duty as
will yield the largest amount OF revenue at the
lowest rates. 1t means the largest possible
quantity OF importations consistent with the
amount of customs revenue required to defrav
the expenses of the government.
If under protective tariff. $500. 900. 900 of
lmpOrtatlOns wOulI pay annual revenue of
SlOJ.O0O.0;O, to produce the same amount at
half the rates, under tariff for revenue
only. would require 500. 0OU. 900 of inporta-
tiOns. The result OF this policy. in the case
supposed. would be to take from American
producers their home market for $500. 900 900
of products and transfer 1t to their foreign
CONF etitOrs. While il would thus deprive our
workmen of employment il would also deplete
the country of gold to pay for foreign labor
and material which should be supplied at
home.
PRACTICES OF TRADE AFFECTING TARIFF.
tariff based upon the difference in the
cost of labor and materials, in this and foreign
countries. will fail OF its purpose in times of
over-prOduction and depression in competing
countries. Foreign manufacturers are COM
PEELED to maintain their extensive establish
ments in order to manufacture at the minimum
cost, and as this Is the only country that will
buy more than Is needed Tor present demand.
1t becomes at such times the dumping ground
for all manufacturing Europe. For long time
past considerable proportion, at least of arti-
cles of certain lines of importations has been
of this class. They have been sold here below
IN fact without regard to. the cost of produc-
ton. the manufacturers locking to their own
and foreign markets, which they control, Tor
their profit.
All these conditions and practices of trade
should be carefully considered in framing
tariff either for the purposes of protection or
revenue.
REVISION OF THE TARIFF.
Whatever differences of opinion there may
be with regard to the best method Of disposing
of the surplus revenue and preventing the ac-
emulation Of money in the treasury beyond
the proper needs of the government. and how
ever diverse may be opinions to the abstract
question of taxation for revenue purposes
customs and internal there is general agree
meut that revision of the tariff and customs
laws Is urgently needed believe 1T to be the
dominant sentiment of the country that in the
adjustment OF duties on imports. protection 20
home industry should be "a governing consid-
Grafton. While there is a wide divergence of
Judgment on this proposition. it cannot well be
denied that 1t Is the settled policy OF this gov
ernment that such duties shall be SO levied as
TO result IN the protection of labor, employed
III domestic Industries, from destructive foreign
competition.
One of the fundamental objects in the levy
ing OF duties on imports, declared in the pre-
amble OF the first tariff act passed by Congress
IN lI59, was the encouragement and protection
ofmanufactures. The doctrine thus proclaimed
has brOadened with our advancing civilization
and growth and its wisdom has been demon
strated by the marvellous development OF those
Industries protected by the high duties de-
manded by the necessities of the government
incident to civil war. 1t should, however, be
remembered that the prime object in the impo-
sitlon OF these high duties was the raising of
revenue, and rates were adjusted to that end
rather than to the protection and DEVELOPMENT
ii infirY ~ . -.