The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-05-01
HOW THE MEXICAN WAX WAS
FINANCED,

Our last foreign war was with Mexico in
1916. 1t did not cost, all told. nearly as
much as this one has already in prepara-
ton, yet the financing of its was regarded
as a matter of considerable magnitude.
Congress declared war May 13, 1916. On the
10Th of June President Polk communicated
to Congress estimates prepared by the War
and Navy Departments of the probable ex-
pense of carrying on the war during. the re-
mainder of that and the whole of the next
fiscal year, together with recommendations
of the secretary of the treasury for raising
the additional means required by changes
in the tariff law Of that day. In this mes
sage the President said:
When the country is in a state of war no
contingency should be permitted to occur
In which there would be a deficiency In the
treasury for the vigorous prosecution of the
war. and to guard against such an event it
Is recommended that contingent authority
be given to issue treasury notes or to con-
tract a loan for a limited amount, reim-
burSable at an early day. Should no Occa-
sion arise to exercise the power, still it may
be important that the authority should ex-
list should there be a necessity for it.
The treasury notes referred to in this mes
sage were not circulating notes nor legal
tender, but regular promissory notes, pay
able in one year, Of the denomination of $50
and multiples thereof, and drawing 5 rs per
cent. interest. Under two acts of Congress
such notes were issued to the amount of
$26, 122, 100 and 6-per-cent. bonds to the
amount of SIS, 290, $50. These issues, with the
ordinary revenue of the period, covered the
expenses of the war. These expenses were
somewhat reduced by other devices. In an
executive order to the secretary of the
treasury, issued March %, 1847, the Presi-
dent said:
The government Of Mexico having repeat
eddy rejected the friendly overtures of the
United States TO open negotiations with a
view to the restoration Of peace, sound pol
icy and a just regar TO the interests of our
own country require that the enemy should
be made, as far as practicable, to bear the
expenses Of a war Of which they are the
In protracting. 1t is the right of the con-
queror to levy contribution upon the enemy
in their seaports, towns or provinces which
quest, and to apply the same to defray
the expenses OF the war. The conqneror
possesses the right, also, to establish a
temporary military government over such
seaports, towns or provinces, and to pre-
scribe the conditions and restrictions upon
which with such places may be
clude all trade or admit it with limitation
or restriction, or impose terms the OBJ
carrying it on. One of these conditions may
be the payment of a prescribed rate of du-
ties on tonnage and imports.
In accordance with these principles the
President ordered that all ports in Mexico
then or which should afterwards be in pos
session Of United States forces should be
open to the trade of all nations. subject to
conditions and duties to be prescribed by
the United States, said duties to be col
lected and accounted for by the military
and naval officers of the United States in
command at such places. This legitimate
war measure was adopted; and resulted in
the collection of about $50o,O0. These were
the main features of the financing of the
Mexican war. They were all judicious and
might be profitably initiated now. The issue
of short-time treasury notes, payable in a
year or two, with interest, is infinitely
preferable to the issue of legal-tender notes
redeemable at no specified time, and the
issue of ten or twenty-year bonds is a ne
cessity. The government should consider
the plan Of Selling Cuban ports for a linn
tied period after the war, throwing them
open to the of all nations and
appropriating the duties thereon. In the
case of Mexico we collected a tonnage duty
Of 81 per ton on every foreign ship that
entered the ports while we held them. We
would have a right to do the same in Cuba.
If we drive the Spanish out of the island
without having formally recognized the in
surgent government we will nave conquered
the island, and may with entire propriety
appropriate it's port revenues as a part of
our war indemnity.