The Portland daily press., 1896-01-02
BEFORE THE WAR.
Then the Country was Continually Both
cred With a Surplus.

cred With a Surplus.
In his second chapter on "The Prinoi-
pies of L axation," now publishing in the
Popular Science Monthly, Mr.. Wells thus
describes this curious financial condition
of the United States during the decades
immediately preceding the outbreak OF
| the civil war. Previous to the breaking
out of the civil war in 1861 the United
State was in the anomalous position Of
a great nation practically unencumb ered
with national or public debt. Excise,
stamp income, license and direct or gen
eral property taxes under the federal gov
| eminent were absolutely unknown, the
expenses OF a simple and economical adj
ministration being betrayed almost en-.
tirely by indirect taxes, levied in the form
of a tariff on the Importation OF foreign
products or merchandise. In fact. the
only other noticeable source of national
revenues was from the sale of public
lands. which, at a maximum rice fixed by
law of $1.25 per acre, returned to the
treasury an average income OF from one
to three millions of dollars per annum
rising in @ few instances during periods
Of wild speculation to six, IA, and in one
exceptional year (1s36) to even "a millit rs
OF dollars The average rate Of dutl5s
| imposed on the aggregate value OF foreign
impOrtations during the 30 years imme
ciiatey preceding 1850 was about 20 per
cent but for portion OF tho time the an
nual rate was much less, and for num-
har of vQarS-1S2l n 1S13 and 1873 1871
inclusive-it was not in excess of 10 per
cent
But notwithstan1 ling these limitations
on the sources and amount of income, the
requirements of the national govern
ment for all purposes were SO moderate
that the receipts of its treasury contin-
| ually tended to exceed it's disbursements
| and the difficulty which most frequently
presented itself to it's financial admins
| traitors, was not the customary one in al
other countries, of how to avoid an an.
nual deficit, but rather how to manage to
escape an inconvenient y but inevitable
surplus. And it is a curious fact, and
one perhaps altogether unprecedented and
almost unrecognized in history, that from
the years 1887 to 1875 there was rarely a
single fiscal year in which the unexpended
balance in the national trsasurJ-derived
from few sOurces-at the end of the
year, was not in excess of one-half of the
total expenditure of the preceding year.
70 provide for the use, or rather to get
rid of continual surplus, various plans
were from time to time suggested. In
one instance the House of Representatives
on motion of Henry Clay(-Ihe leaulng
statesman of his day., seriously conSid-
cred the question of the expedency of the
national government becoming, by pur-
chase and investment, partner in
various stock corporations or enterprises;
a 81,
funds were deposited in the local OF
small state banks, with reiterated in
functions "to loan literally to mer-
chants"
In 1886, the unexpended cash balance in
the treasury of the United States reported
as available for public purposes being
$65, 1913, 950-$46, 001, 467 of which was or
deposit in 81 different banks-Congress
(by act of June %, Of that year) appro-
priated the sum of 81, 1858. S59 for distri-
button among the states; of which $27,-
063, 430 was officially certified in Septem
her, 1887. as having been actually paid.
Most of the states applied the amount ap
portioned to them for educational pur-
poses. Others used it differently and less
wisely; Massachusetts,, for example, di-
viang her share proportionally among
her towns and cities, where it was ex-
pended at the discretion of the local au-
5horities; in one instance. in a small fish
ing town, for the construction of walks
on the sands for the benefit of pedes-
trians; and in others for the purchase OF
houses and lands for the use and settle
ment of the towns poor
That the country, viewed from politico
economic standpoint, was at this time in
all respects what it should or might have
been, is not, however, asserted. The in
stitution of slavery, denying to over four
millions of human beings the freedom Of
the person, the right to real property,
and the blessings of education, was toler-
ated and supported by law. The paper
and ordinary currency of the country,
neglected by the general government, and
issued by local banks under almost as
many different systems as there were
states in the Union, was as defective as
could be well imagined, and often necessi
tated rate of exc haDge between the
different sections of the country which
was equal to or in excess of the current
| rates of interest at the principal COM
merciai centers.
But Notwithstanding these draw backs
the people in general were highly pros
porous. Pauperism, apart from the large
cities, was almost unknown; wealth was
very sequitably distributed; while the
opportunities for elementary education
were free, and in all The more densely
populated portions of the country amply
provided. In short, the prosperity of
the people was so great, through the util-
| ization of cir natural resources, their
| activity and the continued influx of the
population and capital of other countries,
| that it constituted in itself an obstacle to
reform; and the nation at large may be
said to have actually preferred to endure
the various economic and social evils in
| cident to their situation rather than de-
vote time to their consideration and meet
| the grave political issues consequent upon
any change or reformation. What would
have happened? What would have been
the economic and social condition of the
United StateE, had not the people of its
| southern section appealed to the arbitra-
ment of the sword In the matter of sIav-
cry, constitutes most curious and inter
esting theme for speculation. Certainly
it would have been something without
precedent in the worlds former expert.
ence.