Year: 1867




cur without any corresponding dis
turbance in prices; indeed, the further
fact that an increase in circulation may
be followed by a decrease in prices, and
Vice UeTSG. For instance, the average
cost OF living, as determined by the
prices of fifteen of the chief necessaries
of life, such as flour, meat, pork, beef,
sugar, wool, leather, coal, coffee, etc.,
has been determined for long series
of years. The volume of the currency
has also been determined from year to
year, for long time. Now it is found
that from 1854 to 1856 the volume of
the currency fell off seventeen millions
of dollars, while the cost of living IN
creased six per cent. From 1858 to 1859
the currency rose thirty-eight millions,
while the cost of living decreased three
per cent. From 1861 to 1862 the curren-
cy fell off ninety.tiVe millions, while
the cost of living increased seven per
cent. We might multiply facts of this
kind, but we have already adduced
sufficient to show that something be-
sides fluctuations in the currency must
be the cause of change in prices.


But now we find another fact which
shows how intimate is the relation be-
tween taxation and the increase of pri-
ces. Dnring our late terrible civil war
there was no unusual increase of prices
until the home taxes were levied. The
cost of living, as determined above, in
1868, was but slightly above the average
for the thirty-nine years before, and
was much less than for several years
of that term. Yet at that time we were
maintaining an army of a million of
soldiers in the field, and had already
sand millions of dollars. But the mo-
ment internal taxation was imposed,
that moment prices began to mount up
wards. The life-blood OF labor, trade,
and commerce, began to be drawn, cap
ital began to be diverted from produc-
tion to non-production, and the effect
at once became visible. For a while
the country was able to stand it, but
now like a patient that has been bled
nearly to death, it gives signs of fatal
exhaustion.


The true remedy for our difficulties Is
to discard the financial theories of Sec
retary McCulloch, to abandon the alb
surd idea of paying off the national
debt at the rate of fifty millions per
year, and to reduce taxation to the low
est possible limit. The currency needs
no tinkering. Every step towards re-
ducing it has been attended by disaster.
The constant iteration of the doctrine
of reduction by the Secretary has been



ready entailed great loss upon our peo-
pie. The currency is sound, and even
if in temporary excess, will soon be re-
duced to its normal proportions by the
natural growth of the country. What
we want is a reduction of taxes, and a
more faithful administration of the
revenue service. Taxation is excessive,
and the revenue is terribly demoral-
ized; and for both of these facts Secre-
tary McCulloch is in good part respon-
sible. He has prostituted the revenue
service to partisan ends, and the people
have paid the penalty in being heeced
by dishonest officials in league with
those who have reduced frauds upon
the revenue to perfect system.


The New York Times takes some
what the same view as the foregoing in
regard to the imperfection of our reve-
nue. system, but lays the blame not on
the workings of the Treasury so much
as on the crude deficiencies of the sys-
TEN itself, and the general disordered
condition OF a large section of the
country. We quote as follows from its
remarks


The stress which the Secretary lays
upon the growth of productive indus
try as a condition of financial safety,
does not reveal a new or brilliant idea.
Everybody has heard of it many times.
But it is timely because our Lawmakers
and large numbers of our people ap-
pear to have forgotten the fact, and it
is important because its adoption is es-
sential to the avoidance of national
bankruptcy.


Just now, the productive forces of the
country have not fair play. In the
South, where they should be most Wig
orous, and where in ordinary circum-
stances they would be most profitable,
they are impaired and crippled by po.
litical influences. No single considera-
ton would aid them half so
much as speedy reconstruction
The want of means, of enter
prise, of heart, of hope, which now
paralyzes every interest, would disap-
pear were the South restored to the
Union. Capital would find its way
thither in amounts equal to its necessi-
ties, and trade and the Treasury would
be invigorated as by magic. Judged
simply as financial measure, the ear
liest possible completion of the recon-
struction policy is of vital importance
as aguarantee against disaster.


To relieve industry further we must
mako up our minds to overhaul and
radically amend the present system of
taxation. AS now it operates, it is a
worse enemy to American industry
than the most formidable of foreign
competitors. It is in effect system for
infiicting the greatest amount of injury
upon industry with the smallest gain
to the Treasury. So considered, it is a
success. But the country cannot afford
to risk its continuance. Thetaxes must
therefore be reduced, simpliied, and so
adjusted that they shall no longer crush
enterprise and industry. The Treasury
need not suffer from the change. On
the contrary, it is possible to combine
reform and reduction of taxes with
worst features of the existing system is
its wastefulness and cost in respect to
collection. -.-


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