The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1898-03-14
How Revenues Must Be
Raised i'm the Event
Of War.
Many Articles, Including Tea and
Coffee, Upon Which the In
tepnal Revenue Taxes
Would Be Higher.

NEW YORK, March ia Washing
ton special to the Herald says: In
creased taxation and another bond is
sue will be necessary if the United
States is to go to war with Spain. In
less than a week fully one-f1fth of the
10000 900 appropriated by Congress for
national defense has been expended
and pledged for emergency contracts.
Payments on contracts which have
been made and on others which are to
follow will be extended over several
months and if the country stops short
of war it is possible that not all Of the
1000, 900 will be paid out, and in that
event the present revenues of the coun-
try will be sufficient to gradually fill
up the hole in the treasury cash bal
ance made by the preparations.
The whole treasury situation was
gone over at a conference at the White
House a week ago when it was de-
termined to ask for emergency appro-
priations. 1t was then suggested that
Congress be asked for 100000 600. Sec
rotary Gage opposed this, however, on
the ground that if so much money was
to be taken from the treasury in addi-
ton to the current expenses of the Gov
eminent additional taxation or an issue
of bonds would be necessary. He said
that the treasury could spare $5O,O00,0O0
from the cash balance without danger,
but he opposed giving any more for
preparations than this. 1t was pointed
out that $50, 900, 900 would be sufficient
to enable the President to begin the
work of providing for national defense
all along the line. If the crisis should
pass without war nothing more would
be needed. On the other hand If war
should occur, or even If the war scare
should be prolonged without actual
hostilities provision could be made for
further expenditures before the first
appropriation was exhausted. Should
war with Spain follow immense eXpen-
ditures all along the line would be
necessary and steps would have to be
taken to meet them.
Both Secretary Gage and the leaders
in Congress are fully alive to this fact.
Representative Dingley, Chairman of
the House Committee on Ways and
Means, told me that while it was re-
allied that war or preparation eXpen-
ditures much in excess of 100000
would make it necessary to provide
more money either by an issue of bonds
or by additional taxation no steps in
either direction had yet been taken. He
said he had not formulated any plan OF
additional taxation.
IL war is declared IQeTe VIII De lllllc
delay in putting the treasury in po-
sition to meet the demands made upon
it 1t is realized that at the beginning
of the Civil War a serious mistake was
made bv not increasing taxation at the
start. 1t was not until the war had
been in progress for three years that
the revenue Of the Government was
brought up to what it ought to have
been at the start This delay in taxa
ton made sales of bonds more difficult
and was responsible for much deprecia-
ton in greenbacks. As Mr.. Dingley
said to me this afternoon, If war taxes
should become necessary, most OF the
additional revenue would necessarily
have to be raised by internal taxation.
There are only a few articles on which
additional customs revenue could be
raised. Chief among these are tea and
coffee, which are now on the free list,
but from which 500, 900 900 to $50, DOC, 600
a year might be obtained; few addi-
tional millions might be raised by TAX
ing other articles from the free list or
modifying the existing taxes on others,
but it is on internal taxation that the
principal reliance would be placed.
Whisky is now taxed fully up to the
highest revenue-p producing point, and
nothing more can be realized from this
source, but the addition of 81 a barrel
to the present tax on fermented liquors
would increase the revenues from that
source Dy at least SoU,OOOUUU- All III
crease of $100, 600 900 could be realized
from tobacco and cigars without rails
ing the tax even to what it was after
the close of the Civil War. During the
Civil War considerable revenue was re-
allied from the stamp tax on legal in
struments, such as deeds, and from
commercial papers, such as checks,
drafts and notes, for these taxes would
doubtless be among the first to be re-
sorted to in the event of war revenues
being needed. Proprietary articles,
such as patent medicines and perfum-
cries. which were heavily taxed during
the latter part of the Civil War, would
yield considerable money, and large
amounts could be realized very
promptly by the imposition of special
license taxes on various kinds of man
ufactures and occupations, though such
taxes would be very unpopular and
might not be imposed except as a last
resort. Taxes on transfers of stocks
and bonds, such as were proposed when
the Dingley bill was under considera-
ton in the Senate, if not made so high
as to seriously interfere with business
of this kind, would be a lucrative
source OF revenue. Most of the Euro
pean countries impose such taxes reg
ularly in time of peace, and in the
event of war they would be strongly
urged in Congress In view Of the de-
cision of the Supreme Court, the in
come tax, such as was then proposed
would have to be apportioned among
States in proportion to their popula-
ton, and this would impose such un-
equal burdens on poor States and
wealthy States that it would not be i'm
posed by Congress.