FINANCES OF Till" r SITED STATES. 



gftl 



the ability cif tlio Government to make attofuctory 

 uts ul'tlu' public debt. 



In conformity with the views of the Secre- 

 -"iiio measures were adopted by Ci 

 ntiiiuo the existing system of taxation 

 with some modifications, and also to increase 

 i i-dilation of the national banks. The act 

 ti> increase this circulation authorized on i'<Mi- 

 tintial issue of $54,000,000 in notes for cirru- 

 I.ition to national banking associations, and 

 il that a new apportionment of the cir- 

 culation should be made on the basis of the cen- 

 T 1870. It was further provided that upon 

 t lie deposit of any United States bonds, bearing 

 i ii (crest payable in gold, with the Treasurer, the 

 Comptroller of the currency should be anthor- 

 to issue to any association circulating 

 notes to the amount of eighty per cent, of the 

 <K'l>"sit, which notes shall bear upon their face 

 the promise of such association to pay them, 

 upon presentation at their office, in gold coin 

 of the United States, and upon such presenta- 

 tion they shall bo so redeemed. 



The modification in the existing system of 

 taxation consisted in a reduction of internal 

 taxes, as compared with those of the previous 

 year, of $50,000,000, and of import duties 

 827,000,000, making a total reduction of $77,- 

 000,000 in the aggregate. Some of the details 

 of this modification are worthy of notice. The 

 income-tax was modified by a reduction of 2 

 per cent., and the amount of exemption in- 

 creased from $1,000 to $2,000. The number 

 of persons who had been assessed for income, 

 in each of the classes named below, as returned 

 by the assessors of the several collection dis- 

 tricts, from 1867-'70 inclusive, is as follows: 



These returns were made under the act of 

 March 2, 1867, which provided that the amount 

 of exemption should be $1,000. The above- 

 mentioned modification entirely relieved from 

 the income-tax the first two classes, by raising 

 the exemption. An estimate made on the basis 

 that the first class paid an average tax of $15, 

 and the second class an average of $40, would 

 make this reduction amount to $4,206,370. 

 Thus : 



109,550, at $15 ,. $1,58,260 



05,578, at 40 2,628,1*0 



Total $4,206,870 



* Eleventh District (N. T.) excepted. 



The operation of the increased exemption on 

 the other classes was equivalent to a dcdu< ti< n 

 of $50 from the amount to be paid by each 

 person. The gross amount of this deduction 

 is $4,808,100. This, added to the ded.: 

 arising from the entire exemption of the two 

 classes above mentioned, makes the reduction 

 of the income-tax ensuing in consequence of an 

 increase of the exemption to bo $9,010,470. 



Hut the aggregate income-tax collected from 

 individuals has been as follows: 



In 1807 on the Income* of 1066 $27.41,000 



In 188 on the income* of 1W.7 23.390 000 



In iw.ii on the incomes of 1868 97.858 000 



In 1870 on the incomes of 1869 36,150,000 



Average, $26,077,750. 



The tax collected on salaries was : 



In 1867 $1,029,999 



JnlS68 1,048,581 



In 1869 661,988 



In 1870 1,109,5X6 



Average, $936,260. This amount is 35 per 

 cent, of $26,077,750. Assuming that the loss 

 on salaries of United States officers and em- 

 ployed is proportionate to that on incomes 

 from other individuals, $327,691 are lost from 

 this source. ($936,260 x .35 $327,691.) This 

 sum added to $9,010,470 gives $9,338,161, the 

 total Joss on incomes from individuals, by the 

 raising of the exemption from $1,000 to $2,000. 

 Deducting this amount from $26,077,750 (the 

 average of the aggregate tax collected), wo 

 have $16,739,589, and, after reducing this one- 

 half for the change in the rate of tax, there 

 remains $8,369,794 as the aggregate of tax 

 from individuals under the act of July 14, 1870. 



The aggregate five per cent, tax returned on 

 the dividends and additions to surplus funds 

 of banks, railroad companies, etc., was as fol- 

 lows : 



For 1867 $7.948,797 



" 1868 8.384,486 



" 1869 9,204,824 



" 1870 9,651,801 



Average, $8,771,087. 



One-half this sum, or $4,385,543, would then 

 be the aggregate tax from this source. This, 

 added to $8,369,794, gives in round numbers 

 $12,755,000 as the approximate receipts from 

 incomes under the act of July 14, 1870, and 

 a gross reduction of $22,093,498. From all the 

 sources of internal revenue there has been 

 during the year 1870 a steady and regular in- 

 crease over the previous year at the rate of 

 15^- per cent. So that, while the act of Con- 

 gress of July 14, 1870, contemplates a reduc- 

 tion of $50,000,000 by the release of certain 

 items of taxation, yet this annual increase will 

 make the amount of money received, by the 

 Treasury nearly as largo as before, and really 

 cause a very small diminution in the amount 

 of funds at the command of the Govern- 

 ment. 



The following table shows the increase and 

 decrease, and the increase and decrease per 

 cent., between the aggregate receipts of inter- 

 nal revenue for the fiscal years ending June 

 30, 1869, and June 30, 1870 : 



