Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1921-01-17
CUSTOMS REVENUES AND
THE HIGH COST OF WAR
Internal Taxes Now the Chief Source Of
National Income Because Of Expense
Of Paying for Past and prepar-
Ino for Future Conflicts


L the country as well as Congress began to
consider the new relation which the customs
revenues bear to the total revenues Of the
government and began also to adjust their
thinking to the facts.
Until 1868 nearly all Of the money used to
pay the expenses of the government was col
lected in the custom houses. In that year
new internal taxes were levied. They pro-
duced $37 900 900. and the custom houses
yielded 500 100000. In 1862 the total
ordinary revenues were S52 ,000, 900. of which
100000 was collected in taxes on i'm
ports.
From 1868 to 1897 the yearly revenues
from customs were nearly always in excess
OF the revenues from internal taxes, though
the internal taxes were becoming more pro-
ductive from year to year until they paid
about one half Of the governmental expenses
Since 1911 the internal taxes have yielded
more money than the custom houses. The
recent war taxes left the customs receipts SO
small in comparison that they are almost
negligible. In 1918, for example. the in
ternal taxes amounted to So, ,608 ,0OO. 900,
while only 1882. 900 was raised by
customs duties. The tariff produced in that
year almost exactly one twentieth of the
total receipts from taxation.
1t is estimated that the annual budget for
many years to come will be from three and
a half to four billion dollars. The tariff has
never produced more than 1888 900 900 in a
single year. 1t is not likely to produce much
more than that sum in the future. Conse-
qucntly the men who are to frame new
tariff law are freer than they have ever been
before to frame their schedules in accordance
with the soundest economic principles.
OF course it is desirable that the policy of
protection be continued, but it's application
must be made in the light Of our new rela-
tion to the world and in the light of the
necessity of keeping our markets open to the
nations which are our debtors. We cannot
sell our surplus abroad unless the purchasers
can pay their bills largely in goods of their
own manufacture.
A tariff policy entered on with a view
solely to the exclusion of foreign goods from
our markets would be disastrous. The
American bankers have already extended
credits to foreigners to the amount of three
or four billion dollars. This has happened
since the war ended. The foreign govern
ments owe the United States SIC, ,OOO, ,OOO,-
600, the principal md interest Of which
must be paid in goods Of some kind for there
is no gold available.
If we levy a prohibitive tariff on foreign
goods we shall not only deprive ourselves Of
the revenue but we shall also provoke retalia-
ton.
The Canadians are already aroused over
the Fordney emergency tariff bill, which puts
a duty on farm products, and they are talk
ing of excluding American goods if the bill
becomes a law.
The nations Of Europe which are in des-
perate financial straits will not be Indifferent
to the exclusion of their goods, and If we
make the mistake of seeking to shut them
out these nations will close their markets to
us. In such an event the sources Of domestic
taxation will be seriously affected because the
producers will not have the property to be
taxed.
Under the circumstances it will be fatal for
Congress to follow any of the old rules which
guided it in tariff making. The immediate
need is for a tariff law which will encourage
foreign trade while incidentally protecting
American producers and yielding revenue.
The revenue and protective features of q new
tariff law are of less Importance than they
ever were before.
The decreasing Importance Of the tariff as
a revenue producer ought to force the attcn-
tioI OF Congress upon the objects for which
public money is spent. 1t was said on the
floor of the House of Representatives the
| other day that 5000 900, 900 was enough to
pOy all the expenses of the government save
| those growing out of war. Yet it will be
| necessary to raise billions every year. This
necessity will continue so long as We prepare
| for war. And even II we should abandon all
warlike enterprises it would be more than
| a generation before we were able TO pay the
| cost Of past wars.
| A comparison of the war expenditures with
| the other expenditures in the fiscal years of
| 1900 and 1917, in both of which years we
| were q. peace, will show how war expendi-
| lures have increased.
In 1000 the total cost Of running the gov
eminent was Sis7 ,713, 900. OF this sum,
S371 764 900 was appropriated to pay the
expenses of the war and navy departments,
to pay the interest on the public debt which
is q war debt, and to pay the pensions for
old soldiers. That is, it took only about
SIG 900 900 to pay for the peace activities
of the government. In 1917 the war ex-
penditures had risen to $751; ,130 900, while
the peace expenditures had increased to
1866 900 600
Hereafter the interest alone on the war
debt will amount to more than billion dol
iars year. Secretary Daniels Is asking for
S7OO 900 900 for the navy, and hundreds OF
millions are asked for the army.
There is in sight WAT bill Of more than
two billion dollars year. This must be
paid by the people of the United States il We
continue to prepare for future wars on the
scale on which we have begun. One half OF
Il must be paid anyway because we were
forced into a great war brought about by tn,
war spirit of other nations.
There are innumcrablc moral arguments il
favor of peace. They have been repeated fol-
generations until they have lost their force
When it sinks into the consciousness Of mer
that war does not pay in dollars and cent
n determined and concerted effort will b,
u.ade to end it. II may not be hattering t.
the self. esteem Of men to admit this but Il
Is true.
The discovery that drunkenness did no
| nav did more to decrease the excessive us