Year: 1866

at a time when traitors were hoping and


faint hearted friends were fearing that


our cause would be lost. 1t was a sub.


lime and inspiring spectacle to see the


loyal millions, from the wealthy capital


lists 70 the day laborer, offering their sub,


stance as loan to the Government, when


their only hope of return rested in their


faith in the justice of the cause and the


success of our arms. There were single


days in which twenty-five millions of dol


lars were thus offered. Less than halt
the debt is now in long bonds which have


from fifteen to thirty-fve years TO run,


but one thousand six hundred millions


will fall due within two years and half.


As they cannot be paid by taxation in SO
short time, Congress, at its last session,


passed Loan bill, authorizing the Secre-


tary of the Treasury 10 buy up these short


bonds and put on the market in their
stead long bonds, and if practicable, at a


lower rate of interest. The bill, however


did not authorize any increase of the debt


but only an exchange of long bonds for
short ones, which is now being effected.


Intimately connected with our public
debt is the question of


OUR NATIONAL CURRENCY.


At the breaking out of the war the cur


rency of the country consisted of gold
and silver and the circulating notes oi
sixteen hundred banks, organized under


the laws of the different States. The


notes of these banks not being based


upon any uniform security, were of differ
ent relative value, and were always oi
less value as they were further from home.
Our paper money system had become a
greVious evil for which there seemed to
be no remedy. But the necessities of the
war compelled the Government to issue
circulating notes, and the opportunity
was fortunately seized by our distinguish
ed Secretary, Salmon P. Chase, to sweep
away the vicious system of State banks
which had grown up in defiance of the
plain declaration of the Constitution,
that 'no State shall emit bills of credit
or make anything but gold and silver a
legal tender" and to substitute in its
place our present circulation of green
backs and National Bank notes. Where
citizen holds dollar of this paper in
his hand, he knows that there is one
dollar and ten cents in Government bonds
locked up in the vaults of the Treasury
at Washington and pledged for the re-
demption of that dollar in case the Ma
tional Bank should fail. This dollar is
the same in Minnesota as Maine. 1t is
national and not local.


But another and still more important
has been gained by the change
in our system of currency. Under the
old system the General Government had
no control over the amount of currency
which might be put into circulation
Each bank issued notes in accordance
With the laws of the State in which it
vas organized. Now it is a we'll settled
principle of political economy that no
more money is needed in any country
than just the amount necessary to effect
the payments to be made in that country.
If there be less than that amount, the
money market is stringent and exchanges
are difficult. If there be more, the sur
plus will cause a rise in prices, or, what
is the same thing, a depreciation of the
value of each dollar. By putting the
control of the currency into the hands
Of the Federal Government, Congress
was enabled to regulate the amount of
circulation in accordance with the ne
cessities of the business. The vast ex.
penditures of the war requires large in
crease of the volume of the currency
Before the war about 800 millions of mon
ey were needed for the business of the
country. Much of the time during the
war, we have had more than 1000 mil
ions. Now, that we are returning to the
pursuits of peace, it becomes necessary
% reduce the amount of our paper mon
~, and thus bring prices down toward
he old cko nd IT, Iafar,,, haf h
,r there is too much currency is always
liticult, but the best criterion is the
Price of gold. We may be certain that
n times of peace, when there are great
disturbing political causes at work, if a
PAPER dollar is worth much less than a
,old dollar, there are more paper dollars
han the business of the country de-
nands. Therefore, in the Loan bill, Con-
,ress provides for gradual contraction
# the currency. Under the operation |
# that law and with judicious manage |
nent of our revenues, we may expect
,radual decline in gold and correspond |
ng fall in prices, until we shall reach the
old basis of gold and silver. An un-
ertain and changeable standard of value |
5 great financial evil. If the dollar of
o-day shall be worth dollar and a half
# six months from now, the debtor must
'ay the fifty per cent. more than he
romisec. If in six months the dollar
hould be worth that much less, the
reditor would suffer a similar loss.


Let me remark that if the Democratic
arty, which holds to the extreme doc
over, they would, without doubt, sweep
way our national currency system. and
sturn to the wretched system of State
anks and State currency. The mainten-
nee of our national credit, and the ulti
ate redemption of our national debt
ust depend mainly on wise, just, but
we're system of


FEDERAL TAXATION.
Until the beginning of the late war,
1T one of the great nations of the earth
as so lightly taxed as our own. We
ad not studied the science of taxation,
scause happily we had no need to doso.
ut the war brought the heaviest bur-
ems on our people, and when the 39th
ongress assembled, we found that many
our taxes were laid upon those branch
of industry which were least able to
ear them. Nearly all our revenues ar Q
OAAfS0 NUN LhO 6OhICCsf VIA lAC
'ms or tariff duties, and internal taxes.
ongress made thorough revision of
ne internal revenue system, and it is
that many important improve
tents have been made. The provisions
the late revenue law of July l3, 1866,
re based upon the following general
rinciples:


l. To abolish or greatly reduce all tax
s which tend to discourage the develop
nent of wealth, and so to adjust the law
hat the burden should chiefly fall on
ealized wealth.


2. That taxes should not be duplicated
y taxing the different processes through
Thich an article passes in being manu-
but the tax should be laid upon
he furnished article when ready for
ale.


3. That articles of prime necessity,
Ike provisions, clothing, agricultural |
Implements, should be nearly or quite
Exempt from taxation, but the public
'urden should fall upon articles which
Minister to vice and luxury.