260 



FINANCES OF THE UNITED STATES. 



about 48 per cent. If to these rates, freights, in- 

 surance, and commissions be added, the average 

 of duties will be still further increased from 

 10 to 15 per cent. Subsequent to the increase 

 of the tariff in 1861, the demand for revenue, 

 arising from the necessities of the war, caused 

 the adoption of an all-pervading system of in- 

 ternal taxation. To prevent the increase of 

 the tariff from being neutralized by taxes 

 levied on the products of domestic industry, 

 it became necessary to increase corresponding- 

 ly the rates of duty levied on the importation 

 of competing products. This was chiefly ef- 

 fected in the acts of June, 1864, and March, 

 1865. Since July, 1866, the internal taxes on 

 all domestic products with few exceptions 

 have been substantially removed, without any 

 corresponding change in the tariff. The effect 

 of this action has been to increase gradually, 

 and as it were insensibly, the percentage of the 

 tariff, to an average of 5 per cent, for domestic 

 products excepting some articles, such as li- 

 quors, upon which the increase is equivalent 

 to 40 per cent. These extreme rates, higher 

 than ever existed before in this country, or in 

 any civilized nation in modern times, fail, 

 however, in a great degree to cheek importa- 

 tions, or to give that degree of protection to 

 nearly all branches of domestic industry which 

 they have claimed as their due. 



These results are ascribed to the toleration 

 and use of an inconvertible paper currency, 

 and to an indiscriminate and injudicious in- 

 crease of duties. The effect of legislation sub- 

 sequent to the war has been to make revenue 

 subordinate to protection. The rule adopted 

 would seem to be "the assumption, that what- 

 ever rate of duty could be shown to be for the 

 advantage of any interest, the same would 

 prove equally advantageous to the interests of 

 the whole country." 



Such are some of the causes which are sup- 

 posed to interfere with the rapid development 

 of the country. The question, therefore, pre- 

 sented to th^ Government, relates to the policy 

 of legislation ivkely to prove hereafter most 

 advantageous to th b revenue, and most certain 

 to establish the credit, an a industry of the 

 whole country on a sound ^ substantial ba- 

 sis. Three ends were consider^ as necessary 

 to be attained: First, the full restoration of 

 the national credit, and resumption of specie 

 payments; second, the refunding of the na- 

 tional debt at a lower rate of interest ; third, 

 the reduction of the cost of national produc- 

 tion, with a view of enabling the products of 

 American industry to compete on terms of 

 greater equality with the products of foreign 

 nations than is now possible. The mode and 

 facilities for reaching these results are discussed 

 at length by the commissioner. An estimate 

 is made, by which it is shown that, under a 

 proper management of the finances, an avail- 

 able surplus of $100,000,000 to $150,000,000 

 can be had at the close of the next fiscal year. 

 If one-half of such surplus, or from two to two 



and a half per cent, on the whole debt, were 

 applied regularly, month after month, and year 

 after year, to purchase in the open market, and 

 to the cancellation of the gold-interest-bearing 

 obligations of the Government, so long as those 

 obligations can be obtained at a discount from 

 their par value in gold ; and if, at the same 

 time, the legal-tender notes were, under cer- 

 tain restrictions, as to time and quantity, made 

 convertible, at the pleasure of the holder, into 

 interest-bearing bonds, the value of both bonds 

 and currency might be so greatly and so 

 rapidly enhanced as to make a resumption of 

 specie payments a matter of less difficulty than 

 it appears to be. 



After the national bonds and the legal-tender 

 notes have once been brought to par with gold, 

 and the national credit thus fully restored, the 

 gradual refunding of the .debt at a lower rate 

 of interest becomes then, for the first time, 

 really practicable. 



If a portion of this anticipated surplus is 

 applied to the reduction of taxation, the effect 

 would be a reduction of the cost of national 

 production if this subject is kept in view. This 

 result would remove those impediments which 

 so greatly restrict, and in many instances pre- 

 vent, the free exchange of the products of 

 American industry with the needed products 

 of other nations. That is, the application of 

 the proposed reduction of taxation should be 

 made so as to remove obstacles in the way 

 of the domestic producer reaching his mar- 

 ket. 



Such is a general aspect of the financial 

 affairs of the country. "Whether such changes as 

 are consistent with the views of the executive 

 officers of the country shall be adopted remains 

 to be seen. Those questions which have en- 

 grossed the attention of the Government and 

 people before all others are rapidly losing their 

 importance, and making way for others of a 

 financial and commercial character. 



The total value of the bullion deposited at 

 the mint and branches during the last fiscal 

 year was $27,166,318, of which $25,472,894 

 was in gold, and $1,693,423 in silver. 



The coinage for the year was in gold coin, 

 $18,114,425; gold bars, $6,026,810; silver coin, 

 $1,136,750; silver bars, $456,236; one, two, 

 three, and five cent pieces, $1,713,385: total, 

 $20,964,560. A new mint has been completed 

 at Carson City, Nevada. 



The subsequent tables, for which we are in- 

 <l*bted to that valuable monthly, Hunt's Mer- 

 chant* 1 Magazine, conducted by Mr. William 

 B. Dana, show the prices of merchandise ; the ' 

 movement of treasure at New York; the 

 course of the TsTew York Stock Exchange in 

 1868 ; the daily price of gold, and the monthly 

 range of Government securities. 



In the table which follows, a comparison 

 is made of the prices of the principal arti- 

 cles of commerce in the New York market 

 about the first of January in the past eight 

 years : 



