The West Virginian. [volume] (Fairmont, W. Va.) 1914-1974, 1918-08-22
Republic Was Caught Tn.
prepared For War In
Early Day. !
some EARLY FINANCIGN.
Country Was Practically
Broke When War Of
1912 Started.

/ WASHINGTON, Aug. 22.-The Uni
/ ted States has ever been a non-nili.
taristic nation, and no better evidence
Of that fact is 20 be found than in the
conditions existing just prior 10 the
{ second war with England
Although 10 had been known for a
long time that another war was posi-.
bic. every effort was made to reduce the
size Of the army and neyy and prepared
ness measures were discouraged. This
was made 10 reduce the size OF the
army and navy, and preparedness
measures were discouraged. This
course arose largely from the influ.
ence Of Secretary Gallatin. who had
succeeded Alexander Hamilton as head
OF the Treasury Gallatin needed 10
reduce the running expenses OF the
government We hoped that by this
means the people might be relieved Of
large share Of the taxation which
had been placed upon them.
Gallatin succeeded in curtailing pub.
| lic expenses TO such a degree that the
/ budget for 1902. 1909 and 1904 called
for an expenditure of only $4,000, 900
as compared with the s. 500 900 spent
in 1900.
John Randolph, chairman Of the Com.
mittee on Ways and Means. was on
enemy TO internal taxation and
. through his influence a repeal act was
passed which overthrow a great part
Of the tax system which had been in.
augurated by Alexander Hamilton.
Then came the purchase Of the
Louisiana Territory which cost Sl5,.
600 600 and to meet this outlay Gala
tin proposed the issue OF $ll.250. 900
worth Of new bonds bearing six per
cent interest. Owing to the war in
Europe American commerce was
ilourishing. export trade was brisk and
prices were high As a result. the sue.
cess Of the loan was far greater than
had been expected.
The brush with Tripoli, however,
made additional revenue a matter OF
necessity, but instead of restoring the
excise duties which had formerly PIE.
vailed. Congress on March 20 1901,
authorized an addition OF two and one.
half per cent. on all imported articles
subject TO ad valOTem duty and an
additional ten per cent on ell goods
imported in foreign vessels. The pro.
ceeds Of this act were known as the
Mediterranean fund and was used for
the protection Of the commerce, and
reamen of the United States against
the Barbary Powers, and was to BE-
levied until a treaty was made.
II was not until 49,. when war
threatened that President Jefferson,
much against his will, agreed to az
increase Of expenditures for national
defense. At the same time ne entered
upon the alternate policies OF non.im.
portaticn Of manufactured goods aud
Of forbidding shipping TO leave Ameri.
can ports. This completely upset tire
customs receipts which fell from SIG.
10000 to S7.200OOO and at the same
time expenditures for war increased
from S1.3OOOOO in 1907 to S3.3OOO0O. in
1909. Fertilization OF ports and har
bors Was FASTENED, gun boats were
purchased and the regular army was
enlarged.
Since affairs had reduced them.
selves to greatly decreased revenues
and greatly increased expenditures
Secretary Gallatin confronted deficit
in the budget which amounted TO ST..
100000 This was provided for, how.
ever, by a balance which remained on
hand in the treasury, while in 1909
the Embargo Act was repealed and
commerce was resumed with great
vigor. In 1910 the custom yielded S..
500. 900 and in 1911 this amount was in.
creased to SlG,3OO,OOO. The appropria.
ton for the army and navy was 70.
duced and immediate financial danger
was safely tided over.
During this decade there had been
remarkable reduction OF the public
debt which. between 1901 and 1911
was cut down by S3S,0O0.0OO. The for
eign debt. which included the stocks Of
1875 and the loans OF 1898 and 1900
was wiped out and no further recourse
was made to temporary loan.
The year 1911 was memorable in the
financial history OF the United States
for II marked the collapse OF the Uni
ted States bank. The directors Of the
institution petitioned Congress for 4