PRINCIPLES OF TAXATION. 147 



war an able book entitled Ways and Means of Payment, a Full 

 Analysis of the Credit System, were selected. A word of retro- 

 spection is here essential to an understanding of the situation. 



If it be an axiom in political and social as well as physical and 

 natural science, that the first requisite for progress consists in the 

 correct observation and recording of phenomena, whereby old laws 

 or principles may be verified or extended and new ones discovered, 

 it would be difficult to imagine a field more fruitful for investiga- 

 tion and more promising of reward than the financial and indus- 

 trial experiences of the United States immediately anterior and 

 subsequent to the outbreak of the civil war experiences which 

 had truly the character of vast social and political experiments, 

 made on a scale of magnitude rarely if ever before equaled ; for the 

 most part emphatically tentative in character, and affecting in 

 their results not only the growth, the income, and the industrial 

 pursuits of the nation directly and immediately concerned, but also 

 in a greater or less degree the trade and commerce of the whole 

 world. 



At the breaking ont of the civil war in 1861, the United States 

 was in the anomalous position of a great nation practically unen- 

 cumbered with a national or public debt. Excise, stamp, income, 

 license, and direct or general property taxes under the Federal 

 Government were absolutely unknown ; the expenses of a simple 

 and economical administration being defrayed almost entirely by 

 indirect taxes, levied in the form of a tariff on the importation of 

 foreign products or merchandise. In fact, the only other notice- 

 able source of national revenue was from the sale of public lands, 

 which, at a maximum price fixed by law of one dollar and a quar- 

 ter per acre, returned to the Treasury an average income of from 

 one to three millions of dollars per annum ; rising in a few in- 

 stances, during periods of wild speculation to six, fourteen, and 

 in one exceptional year (1836) to even twenty-four millions of 

 dollars. 



The average rate of duties imposed on the aggregate value of 

 foreign importations during the thirty years immediately preced- 

 ing 1860 was about twenty per cent ; but for a portion of the time 

 the annual rate was much less, and for a number of years 1834, 

 to 1843 and 1858 to 1861 inclusive it was not in excess of fifteen 

 per cent. 



But notwithstanding these limitations on the sources and 

 amount of income, the requirements of the national Government 

 for all purposes were so moderate that the receipts of its Treasury 

 continually tended to exceed its disbursements ; and the difficulty 

 which most frequently presented itself to its financial administra- 

 tors, was not the customary one in all other countries, of how to 

 avoid an annual deficit, but rather how to manage to escape an 



