SHARES of the several States and Territories, under the Distribution Act of the 4th of September, 1841, of the Residue of the net Proceeds of the Public Lands sold in the half Year ending the 30th of June, 1842, amounting to 562,144 dollars 18 cents. THE federal credit of the United States has been honourably maintained from the commencement of the revolutionary war down to the present period; and we believe that nothing but the certain calamities, which would attend, and be consequent to, a war, will ever disturb the faithful discharge of the fiscal obligations of the federal government. In Europe a very erroneous estimate, and very unjust conclusions have been entertained, we believe generally from ignorance, by confounding the non-paying and repudiating states, with the revenue, debt, and expenditure of the federal government, and of the states who have honourably, and religiously, discharged their obligations. The revolutionary war having altogether interrupted the exterior commerce of the country, there was no revenue raised during that period by customs duties; and as Congress had not then the power to levy any general tax, loans and papermoney became the inevitable expedient. The following passages, which occur in Mr. Henry Lee of Boston's Letters to cotton manufacturers, are worthy of attention. "War taxes and expenditures-by decreasing the pecuniary means of the great mass of a nation-operate unfavourably on the consumption of commodities. "The average annual expenditure for the army and navy of Great Britain, from 1801 to 1815, amounted to 344,096,092 dollars, and in one of the last years of the war it came up, including the interest on the war debt, to the enormous sum of 488,558,946 dollars-two-thirds of which was expended for armies mostly engaged in fighting the battles of foreign nations in foreign lands. The war, during every period of its prosecution, was termed a successful,' a glorious war-to which the most ambitious portion of the nation were reconciled, by the hope of national glory, or of personal distinction; while the more unreflecting, or the more sordid portion of it were willing or eager for its continuance-upon the supposition of enjoying a monopoly of the commerce and navigation of the world. In the latter sentiment, many of the people of this country sympathised, and from similar motives-till, at last, we were drawn into its vortex, by a desire, on the part of the thoughtless, or the ambitious portion of the nation, of adding, also, to our fund of national glory-and that, we believe, was the only benefit which the promoters and advocates of that gratuitous war ever pretended had been realised-since the questions of impressment and blockade, which were the ostensible causes of the war, were not only left unsettled, but may, perhaps, have not even been subjects of discussion in the negotiations at Ghent for a termination of the war; a war which ended, as most wars have done, with the accomplishment of no better purpose than the gratification of the ambition of its most zealous and leading fomenters-and the gratification of the passions of the people, who were led into a belief that the war would be productive of national advantages-superadded to the gratification of those belligerent feelings which, in this country, as much, if not more than in most countries, are easily excited by the popular favourites of the day. Of that portion of the war-party who may have been prompted by more patriotic motives, and by a sincere expectation of benefiting their country by a war-there was an utter disappointment of their wishes and expectations-and such, in all probability, would have been the issue of the wars in which some of our most popular and influential public men appear to have been desirous, judging by their sentiments, speeches, and conduct, at various periods, of involving the nation. "A reflection made by Mr. John Q. Adams upon the effects of war with Great Britain, ma not be considered as inappropriate in connexion with this subject. The ex-president in a communication before the public, in which reference is made to some of the schemes for improving the currency that were in agitation in 1837, adds; I think of this as I thought of the dry-dock, gunboat, restrictive, anti-navy system of Mr. Jefferson. It cost the nation a terrible war to be delivered of that, but the nation was effectually cured of its hydrophobia. The war was a drastic purge, but it effectually worked its cure.' Well, most wars originate in hydrophobia-in the madness of the people-to which they are excited by their rulers, and for no other purpose than the gratification of their selfishness and ambition, and although they terminate with the application of a drastic purge,' or some still more bitter curative, yet there is no security against the returning madness of the people—at least not till the great mass of them, through all ranks of society, shall become more enlightened, more moral, more religious-more patriotic-more virtuous-than they now are-or, according to present appearances, are likely to become in this day and generation. "The last war between the United States and Great Britain, of only two and a half years' continuance, and with but a very inconsiderable portion of the military and naval power of that country brought into action-cost us upwards of 100,000,000 dollars. This sum was not raised by indirect taxation in the form of duties on imported goods-because a war with any great naval power will always, in this country, reduce that branch of business to a very low point. In 1812, we imported 77,030,000 dollars. In the subsequent year of the war, our imports declined to 22,005,000 dollars, and in 1814, to 12,965,000 dollars; while our exports, in 1814, sunk to the insignificant sum of 6,927,441 dollars. "There must necessarily be an almost entire cessation of revenue from customs in a war with any great naval power, and consequently a substitution of direct taxes-but as direct taxation, to any considerable extent, is one of those functions of government which, in this country, has never yet been exercised, and when exercised to a very limited degree has been resisted in some of the states, and left unpaid in a still greater number of them—the only mode, then, of obtaining the increased amount of funds It is true we prospered during that disastrous period-not, however, from the effects of those wars, but in spite of them. The effects of those wars were, no doubt, injurious to us, though less so than if we had been always a party to them; but there were other causes in operation, which more than connterbalanced the pecuniary evils of those wars, and we prospered, though in a less degree, than we should have done in a time of peace. for the prosecution of a war, seeing the disinclination of the nation to direct taxation, is the borrowing at home or abroad. That mode of meeting even our peace expenditure, has been practised upon the past three or four years. "Nor was the last war with Great Britain supported by means of direct taxes, for the whole amount received from that source of supply, in 1813, 1814, and 1815, was but 4,385,975 dollarsand that, too, paid in depreciated currencies averaging, perhaps, a discount, on a sound currency, of twenty per cent. In truth, the entire war expenditure was paid out of the proceeds of loans and treasury notes-constituting a debt, at the close of the war, of about 100,000,000 dollars-superadded to its pre-existing amount. These loans were effected on such high rates of interest, and the payments on their account were in such depreciated currencies, as to have cost the country at least twenty-five per cent more than they received-the stocks issued by government having subsequently been paid to their holders in a sound and honest currency of a full standard value. Nevertheless, there were propositions before Congress, and before the country, for issues of governmental paper-money, which, had they been sustained and acted upon, might have reduced the value of the certificates of the public debt to a level with the old 'continental money'—and had the war been of much longer continuance, it may be reasonably inferred that such would have been the fate of the national creditors. "Short as the war was, and inconsiderable as were the expenses of conducting it, in comparison with the resources of the country; the credit of the government was so bad, arising from the indisposition of the nation to pay direct taxes-and from a similar unwillingness of our rulers to hazard their popularity in recommending and levying of taxes; that before the war was concluded, the government stocks, bearing high rates of interest, were below sixty-five for 100 dollars, and any further issues would probably have sunk them to almost the present level of the stocks of some of the bankrupt states." The revenue of the United States has, since the war of independence, been chiefly derived from the duties upon articles of foreign produce and manufactures, imported either by American or foreign ships. Tonnage duties have also been levied by the customs. Next to the customs, the greatest source of revenue has been derived from the sale of public domains. Internal or excise taxes have occasionally been imposed, but they were universally considered obnoxious, and were continued only for short periods. Before the year 1802, excise duties were imposed on manufactured snuff, refined sugar, sales at auction, licences to retail wines, and distilled spirits, stamped paper, and on carriages for the conveyance of persons; but these were all repealed in that year. During the late war between the United States and Great Britain, duties on most of these articles were renewed; and duties were, also, imposed on various domestic manufactures. But, soon after the return of peace, all these excise taxes were repealed. Some additions have been made to the revenue (but deemed small additions) from the Post-office, from taxes on patents, and from dividends on bank stock. Direct taxes have been levied at four different times only, since the revolution. On the 1st of July, 1812, immediately after the declaration of war against Great Britain, 100 per cent was added to all the permanent duties on imports, to continue only during the war; but these were afterwards continued until the 30th of June, 1816. The power of a nation in modern times, as all admit, depends, materially, as well as politically, chiefly on the amount of unencumbered revenue it can raise, without oppression to the people. In financial legislation slight burdens may prove incentives to greater industry. Grievous taxation, which may be exacted and even raised for a cer tain not definable period, discourages public thrift. War and profligacy by in creasing expenditure, if that expenditure be greater than the natural annual revenue, taxes the industry of the existing generation as well as that of one or more succeeding generations. Hence arise generally all the perplexities of finance. The extreme natural revenue to be derived from taxing a nation should never exceed the sum which can be spared for paying the reasonable expenses of an honestly and wisely administered government,—and for defraying the expense of defending the country against aggression, without deducting a greater sum from the general income yielded by labour, than an amount which leaves the full average means of a wholesome subsistence, comfortable lodging, and adequate clothing for the population. The extreme natural revenue, and the general wealth of the nation which yields it, will be greater or less in proportion to the number of its inhabitants, in the same ratio that the greater ingenuity and labour, or the greater ignorance and idleness of the population, yields the greater or lesser amount in value of commodities. This amount again will be regulated in the cost of production, by the prices of raw material and food, and the outlay of fixed capital. The value of the produce of labour at home, and in allthe markets of the world, will depend upon the power of selling and buying, and upon the natural demand for consumption. The more the interchange of the commodities of any one place is restricted, or obstructed, from the markets of another, the more will the quantity of those commodities, wherever produced, be restricted, and obstructed, in the selling, buying, and consumption. On examining the various customs tariffs passed at different periods by the Congress of the United States, we are forced to declare, that they exhibit an extraordinary absence of that wisdom, sagacity, and sound principles, which, in other respects, distinguish the great legislators of America. On fiscal, as well as commercial principles, the various American tariffs are only worthy of being classed with the illiberal barbarisms, and fallacies, which have disgraced the worst legislation of European nations. We will endeavour to prove this under a separate head: and in the mean time only remark, that the only defence, a very inexcusable one it is true, that can be made on the part of America, is, that the latter followed the very bad example persevered in by England. The following tabular statements, compiled from official returus, will serve to illustrate the financial administration of the United States.* The following estimate was made out by Mr. Nourse, the registrar of the treasury, in 1790. * See also the organisation of the treasury, under the head of the "Civil Department of Government." "General Abstract of the Annual Estimates, and Abstract Statements of the Total Amount of the Expenditures and Advances, at the Treasury of the United States. 46 The estimated amount of the expenditures of "The foregoing estimates being confined to actual treasury payments, are exclusive of the debts of the United States, which were incurred, at various periods, for the support of the late war, and should be taken into a general view of the expense thereof, viz. : Army debt upon commissioners' certificates... For supplies furnished by the citizens of the several states, and for which cer- For supplies furnished in the quarter-master, commissary, hospital, clothing, For supplies, on accounts settled at the treasury, and for which certificates The foreign expenditures, civil, military, naval, and contingencies, amount, The expenditures of the several states, from the commencement of the war, to Estimated expense of the late war, in specie dollars. cts. 11,080,576 1-90th 3,723,625 20 do. 1,159,170 5 do. 744,638 49 do. 16,708,009 75 do. 5,000,000 00 21,000,000 00 135,193,703 00 dollars. "The advances made from the treasury, were principally in a paper medium, called continental money, and which in a short time depreciated: the specie value of which is given in the foregoing estimate. The advances made at the treasury of the United States, in continental money, in new and old emissions, are estimated as follows, viz.: "In a report made to Congress, by the Board of Treasury, in September, 1787, it is stated, that the requisitions upon the states, for the payment of the interest of the domestic debt, in the years 1782, 1784, 1785, and 1786, amounted to the sum of 6,279,376 dollars 27 cents, and the Board say, "it is with regret we are constrained to observe, that to the 31st of March last, the aggregate payments, on account of these requisitions, do not appear, from any document in the Treasury office dollars. cts. |