Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1918-08-19
WAR TAX PROBLEMS
PAST AND PRESENT

Washington, August 18.-The great
financial transactions which now oc-
cupy the attention of the American
necessary by war, are by no means
innovations. They are based abso-
lutely upon the articles of the Con-
Stitution Of the United States, and so
perfect is the basis thus provided
that one might think the founders of
the republic had been endowed with
the gift of looking far into the future
that every emergency might be met
without deviation from their original
plan. Ut is well known, however.
that the constitution was in reality a
document of compromise and that 1t
was drawn up in its present form
only after bitter disputes on the part
o. the delegates representing various
parts of the country. each of whom
his constituency
1t was with difficulty that the ad-
vocates of more centralized govern
ment secured for Congress the right
ITO lay and collect taxes, duties, i'm
posts and excuses" and as safe
guard to state rights, the opposition
insisted that a clause be inserted in
which it was decreed that "all bills
for raising revenue shall originate i'll
the House of Representatives"
A schedule Of import duties was
adopted January 1889, providing for
an advalorem rate on about thirty
articles, and this was assessed in such
a way as to give protection to the
Young manufacturing industries
Which We're beginning to spring up in
the new country, particularly in New
England.
As soon as this measure had been
decided upon, the House of Represen-
tatives began to consider the estab-
lishment of a Treasury department
and again the question arose as TO
whether a single individual should be
sibility of the nation or whether that
responsibility should be placed in the
hands Of a committee.
Alexander Hamilton was appointed
to the post however. in September
i1S9, and although he was only 81
years old he was probably better fit
led thar any other man in the United
States for the position. While conf
Dental secretary to General Wash
ington, during the early years of the
Revolution, he had devoted much
time to the subjects of finance and
trade. In 1881 he communicated to
Robert Morris an elaborate plan for
a bank, and in 1882 he was receiver
OF Continental taxes in New York. To
these special interests he added an
experience as congressional delegate
lawyer and pamphleteer and had been
especially insistent in demanding ma
tional regulation for the collection of
revenue.
From the very first Hamilton dis
played great initiative and immedi-
ately formulated a plan for funding
had grown to immense proportions
Hamilton estimated that the foreign
obligations of the country amounted
to s1l,7l0,000 while the domestic OBJ
legations were about S27,3S3,00 in
principal and $4,000, 600 in accrued
interest to which might be added s2,-
900, 900 for unliquidated debt.
There was violent opposition tc
Hamilton's plan, but it finally pre-
vailed as did his demand that the
state debts be assumed by the federal
government. The funding act was
passed August 4. 1890. and by it the
President was authorized to borrow
sl200O,000. while a loan to the full
amount of the domestic debt was also
authorized, subscriptions TO be re-
ceived in any of the certificates of
Indebtedness which the government
had previously issued during the
Revolutionary War and the Confed-
Grafton.
II was due to Hamilton that the
first national bank was established in
1871 and that the coinage system was
put upon solid basis. Both of these
were regarded with suspicion by
many people, but it was not until
Congress adopted the recommenda-
tons of Hamilton and embra ced
them in the tariff bill of 1891. that the
unpopularity Of the Secretary of the
Treasury assumed its full proper
tons. Following the ASSUMPTION OF
| the state debts, the need OF further
revenue became imperative and Ham