FIN'ANCES OF TUB UNITED STATES. 



809 





So I'M- a-; tin- consumption of necr-itic-i incli- 



'!>. prosperity of tin- pcopl.-, it. appears 



that tor tin- eleven iiunitlis ciidin;,' N'ovciiiher 



tin- consiiiii[iti(in of coH'ee, as indi- 



M-iliuti.ni frotn the five principal 



1 8, 628, 064 pounds. against 1 1.7*2,208 



pounds 1'np tlif corresponding period of the 



previous year, and 1 l,7!'."i,t!If> pound-; for lsii.">. 



: monthly consiunption of imported 



. deduced from the same data, 



lias luvn T.I i**,480 pounds as compared with 



ionthly average of 5,862,050 for the five 



vithstanding an increased consumption 

 in many artid >, an unusual degree of depres- 

 sion exited in the condition of mercantile 

 and commercial affairs. In the opinion 

 of the commissioner, this existed in various 

 e.Mintrics and was the natural reaction from 

 a period of hi^h prices, speculation, and over- 

 production. The fall in the prices of many 

 staple commodities has been marked and sig- 

 nificant. Tims, for example, the fall in the 

 price of "middling" cotton in the New York 

 market has been from thirty-five cents per 

 pound in September, 1866, to sixteen cents in 

 November, 1867; of cotton fabrics, during the 

 past year, from 30 to 33 per cent. ; of domestic 

 wool, average coarse and fine, from 25 to 33 

 per cent., or to lower prices, in gold, than the 

 average in anyone year since 1827; of ordi- 

 nary woollens, domestic, from 25 to 30 per 

 cent., foreign, from 35 to 40 per cent. ; of lum- 

 ber, coarser qualities, 15 per cent., finer, 20 per 

 cent. ; of coffee (good Rio), 11 per cent. ; of 

 tea (Oolong), 12 per cent. ; of copper (ingot), 

 22 per cent. ; of sheet iron (American), 20 per 

 cent. ; of printing paper, 22 to 25 per cent., 

 and of anthracite coal, at tide-water, from $9.93 

 per ton in October, 1865, to $5.50 in October, 

 1866, and $4.50 in October, 1867. 



This shrinkage is one which has been fore- 

 seen to be inevitable, and is in fact the transition 

 from inflated to legitimate prices, a transition 

 which must precede the rei-stablishment of in- 

 dustry on any sound and healthy basis. The 

 removal, however, of all the internal taxes 

 which materially impede production, with pos- 

 sHily some slight modifications of the tariff, will 

 be followed, in the opinion of the commissioner, 

 by an immediate and great revival of domestic 

 industry. It is stated as worthy of notice, that 

 although up to the commencement of 1867 the 

 _;o advance of commodities was about 90 

 nt., that of wages was not in excess of 60 

 per cent. Now, however, the case is entirely 

 reversed: commodities have fallen so much 

 more rapidly, that the purchasing power of 

 waires, even when reduced, is probably greater 

 at the present time than when they had at- 

 tained their maximum. 



The operation of the Internal Revenue Law, 



'ally in regard to the question of what 



sources are available for revenue apart from 



those dependent on the ordinary industries of 



the country, next becomes a subject of consid- 



eration. The attempt to collect any legitimate 

 revenue from di:-til!cd spirits has, thus far, 

 pro\c-d .-i "iv ,t failure. This in supposed to 

 nave been c.m-ed by placing the tax at v 

 rate as to constitute in itself so great a tempta- 

 tion to fraud as to be generally irresitii.l< ; 

 and further, because the system under which 

 the officers have been selected, to collect the 

 tax and supervise the manufacture, has not 

 thus far recognized honesty, intelligence, and 

 business capacity as the first and essential qual- 

 ification for appointment. The amount of 

 distilled spirits produced in the United States, 

 prior to 1861, was nearly one hundred millions 

 of gallons. At present it is estimated at fifty 

 millions of gallons of proof spirits per annum. 

 But the largest amount of revenue collected 

 since the imposition of the tax of two dollars 

 per gallon has never exceeded thirty millions 

 of dollars. That is, the Government have suc- 

 ceeded in collecting the tax on somewhat less 

 than one gallon of proof spirits to every three 

 gallons that have been manufactured. This 

 failure is supposed to have arisen from the 

 fraudulent complicity and incompetency of the 

 officials, and a reform here is expected only in 

 a degree to compass the end. A reduction of 

 the tax and a system dividing the collection of 

 the tax between the manufacture of the spirit 

 and its sale, and making both a point of one 

 and the same system, is recommended. The 

 proposed tax is fifty cents per gallon, which it 

 is estimated would yield about twenty-five mil- 

 lions of dollars. A large advance on the spe- 

 cial or license tax is also suggested. 



The tax on fermented liquors has annually in- 

 creased, and the amount anticipated for the next 

 fjscal year is about six millions of dollars. The 

 rate of increase in the production and consump- 

 tion is from 10 to 15 per cent, annually. 



The collection of revenue from tobacco is sur- 

 rounded with greater difficulties than the case 

 of distilled spirits, and the frauds are regarded 

 as comparatively greater. The complicity and 

 incompetency or officials ; the use of counterfeit 

 or illegal inspection brands; the continuous 

 use of inspected packages, and the collection of 

 inspected heads and portions of packages jonca 

 used, to be used again in the construction of 

 now ones; the substitution of chewing-tobacco 

 for inspected smoking-tobacco ; small packages 

 are allowed to be sold without inspection-mark?, 

 of which the seller keeps the account ; the use 

 of hand-cutting machines in families, etc., are 

 the principal methods of evading the tax. The 

 revenue from tobacco during the fiscal year 

 ending June 30, 1867, was $19, 705,827, which 

 is expected to reach twenty millions during the 

 next year. 



The revenue from the income tax has de- 

 clined during the last year, in consequence of 

 the reduction of the tax and the shrinkage of 

 commodities. The amount estimated for the 

 next year is about thirty-five millions. 



The amount yielded from stamps during the 

 year was $16,094,718. The receipts from tbi 



