Year: 1877

from their customers the sums to Whlcn
this uuskillful taxation subjects them.
Their customers, in turn, draw from
the community With which they deal,
prices for their merchandise enhanced
by the discounts they pay at bank. 50
the tax presently falls on the consumer.
and inasmuch as, excluding idlers and
DoD-productives, the actual laborer IS
the only consumer who pays, this tax
falls entirely upon the laborer at last.
If it were paid by him in the first IN
stance, it would be easier But each
intermediate party silently adds to i
enough to cover risk and profit in deal
ing with it So that it is eventually
paid by the producing class with two
or three unnecessary additions to it


But this is not the worst of it These
taxes affect the rates paid for the use Of
money in all business enterprises. The
taxes upon banks, in New York city for
instance, amount to two per cent. Of the
capital for federal taxes, and three and
one-tenth per cent. for local taxes
that is to say, over five per centum IN
the whole. Add the inevitable expenses
Of banking, bookkeeping, rent. &c,
and it follows that the total disburse-
ments, including taxes-before dollar
is earned for the Stockholder-swell to
a rate greater than what should be the
steady interest on money employed in
agriculture, manufactures and com
mercs


was shown in an article which we
printed not long since, in respect to a
bank in New York city with FIVE mil
lion dollars capital and one million sur
plus, that these have need to be loaned
at about six per cent. per annum to get
revenue enough barely to pay expenses
and taxes. That is to say, upon the
employment of its money at current
rates Of interest. the bank makes moth
ing. The entire revenues from that
quarter are absorbed in expenses, with
nothing left to be divided among the
stockholders


1t is plain that the interest paid for
money used in productive industries en-
hances to that extent the cost of pro-
duction, and the commodities created
under that condition 60 into the mar
kets of the world weighted with that
burden.


In the present dull times in England
money is lending on commercial bills at
less than two per cent per anDum.- -
Affairs are dull enough in the United
States, as everybody knows, yet our
manufacturers are paying certainly not
less than six per cent per annum for
whatever money is borrowed for use in
their business. If they are not paying
so much interest in the aggregate as
formerly, it is because they are doing
much less business. But it only con
Germs our argument to show that in re-
spect to what business they are doing,
they are even now paying rates Of in-
terest twice as high as those paid by
English manufacturers.


Mr. Sprague used to say that for the
money invested 10 a spindle the Amer
ican spinner paid 81 90 annual inter
est, while the English spinner paid only
90 cents The difference seems not
much, but it weighted the American
product to that extent


Until recently, our cotton goods
found no sale abroad to any
mentionable extent. English goods
filed all the markets-poorer goods
than ours and less stylish In plain
cottous, bleached and uUbleacbed, our
fabrics had the evener thread and were
Of hones,er make. In prints, Ameri-
can designs and colors were fairer and
better. Yet England had the markets


At the high rates they had to pay for
capital or current credits to do business
with, our manufacturers never dared to
borrow money to make goods with
which to contest foreign markets They
paid six per cent, seven per cent, nine
per cent. per annum ; then one per
cent, and sometimes as high as one
and-a-half per cent, per month, for
credits with which to manufacture for
the home trade That was fenced off
for them against foreign competition BY
protective tariff Secure in that mar
ket, they charged the consumer profit
enough to reimburse what they had paid
as interest


It is only since the panic of 1873
that our manufacturers Of cottons have
ventured into foreign markets Success
has been such as justified the strongest
manufacturers, perhaps those employ
ing their own money mainly, to con-
tinue the trade.


The markets which they sought and
we're thus successful in. have always
been open to them, but they could enter
them to no purpose with the cost of
their goods enhanced by such disburse-
ments as Of interest at the rates they