OF EX-SECRETARY OF THE TREASURY. Chronicle Print, Washington, D. C. LETTEP OF HON R. J. eWALKER WASHINGTON CITY, November 30, 1867. imperial purple over the halls of the Monte-'To the People of the Uisited States: zumas, and appealing to the Latin race of The great question of maintaining the pub- America to unfurl the banner of the European lie faith now agitates the nation, and engages dynastic system. It was then that British the attention of Congress. Inseparably con- cruisers (miscalled Confederate) were burning nected with this question is the revisal of our our ships and cargoes, and driving our combank and currency and revenue systems. What- merce from the ocean. It was then that the ever concerns the public faite touches all the English Premier was preparing for Prince great interests of the country. It deeply af- Alfred a throne in British America,'now dwinfects the revenue of the Government, as well died into the hybrid, discordant, temporary Doas the wages of labor and the income and busi- minion of Canada. It was then, at the period nessofthe people. No American requires any of our deepest gloom and danger, that a still apology for discussing these great questions. small voice was heard in our favor' fiom HolMy own individual connection with them was land, where Franklin had negotiated our first constant and earnest, from the commencement loan. It was then that the still louder notes to the close of the rebellion, and I feel that my of hope and sympathy fell like music upon my position is one involving great responsibilities: ears from the great German Fatherland. I Our national banking law, after its rejection visited both countries, unheralded and unby Congress, was finally adopted on the pub- known, in 1863. Satisfied that any public lication of an elaborate essay written by me, call for a loan would be defeated by the at the request of the Secretary of the Treasury. machinations of France and England, I never Subsequently, at his request, when he found it announced my official capacity, nor asked for necessary to bring gold or its equivalent here any American loan. I published my financial from Europe to sustain our credit, I repaired essays over my own name, merely as an Amerithere, remaining nearly two years, as the finan- can citizen, exhibiting the vast resources, the cial agent of the Government. I published wonderful progress of our country, and the there numerous essays, over my signature, certainty of our success in crushing the rebelshowing the wealth and resources of our coun- lion. These essays were sent by thousands to tiy, and how untarnished was our national faith all the principal bankers of Europe. In a few and honor. These essays, in English, French, months I visited again nearly every city of and German, were sent to all the European Holland and Germany, giving me an opportubankers, through whose advice investments nity to discuss the question personally with are made. They represented the certainty of these bankers, and enforce the written arguthe punctual payment of the principal and in- ments already made. The result was that in terest of our Five-twenty six per cent. loans in a brief period the people of Germany, emphatigold. I went to Europe under the appointment cally the rp'eat masses of the people, took several of Mr. Chase, but with letters also from Mr. hundred millions of our loan at the same rates Lincoln and Mr. Seward. So bitter then was as our own citizens. Let it be remembered the hostility of Louis Napoleon and the late that this was a period of great apprehension Lord Palmerston to this country, that, whilst as to the result of our contest, and that the the so-called confederate loan had nearly credit of our greenbacks rested mainly on reached in Europe par in gold, our United States these bonds, in which they could be funded, stocks could find no place on the London or and that the demand for them in Germany, as Paris exchange, and our cause no hearing in well as here, to organize the national banks, the leading press of either city. We had many prevented our currency from disappearing in friends in the British Cabinet, but it was then the gathering mists of depreciation. Our that Lord Palmerston and his life-long friend, greatest peril was financial, and although the Louis Napoleon, were engaged in a conspiracy glorious deeds of our army and navy, and their to drive republicanism from the face of the gallant leaders, saved us on the ocean and the earth. It was then that dazzling visions of land, yet the Secretaryof the Treasury wasthe dukedoms, if not of diadems, were glittering real generalissimo of thecontest. These Gerbefore the eyes of many a confederate leader, man and other loans, based upon these United It was then that Napoleon was spreading the States five-twenties, constituted, to a vast ex 4 tent, the price we agreed to pay to enable us to driving the country to the verge of repudiation, maintain the Government and preserve the and threatening most disastrous consequences Union. And now, shall we hesitate about the to the honor and interests of the nation. The full payment of such loans as these? But, rules which often force banks to contract have especially, can I, on whose representation so no bearing upon the operations of the Governmany hundred millions of these loans were ment at this time. So far as the value of our taken, now, whilst the great issues are being legal-tenders is concerned, we are much more discussed, and soon to be decided, without a remote from resumption than we were when burning sense of shame and dishonor, remain the war closed. No one thoughtof repudiation longer silent? then, but the idea has become widely diffused, The question to be discused is very compre- growing exclusively out of a forced, artificial, hensive, and requires a review of our whole and unnecessary contraction of the currency, system of loans and banks and currency, as connected with a most oppressive and intolerawell as revenue and taxation. ble system of taxation. I say the contraction We have now a depreciated paper currency was and is forced and unnecessary, because we called legal tenders, amounting, according to could, by a foreign loan, then have resumed the returns on the 1st of November, to three specie payments; and, with a proper changein hundred and eighty-seven million eight hun- our revenue system, and the restoration of the dred and seventy-one thousand four hundred Union, now be in a condition of unbounded and seventy-seven dollars, ($587,871,477.) prosperity. No one, before this, has ever We had, also then, in the Treasury, one hun- threatened to stain the faith and honor of the dred and eleven millions five hundred and nation, and but for this system of contraction forty thousand three hundred and seventeen and taxation the spectral shade of repudiation dollars (111,540,317) in coin, and twenty-two would never have been evoked from the dark millions four hundred and fifty-eight thousand abyss of infamy and crime. Contraction is and eighty dollars (122,458,080) in currency, only advocated with a view to ultimate resumpmaking one hundred and thirty-three million tion of specie payments. But why contract, nine hundred and ninety-eight thousand three and thus depress all our industry, when we can hundred and ninety-seven dollars ($133,998,- immediately resume without contraction? If 397) in all. Deducting this from the above, we are not to resume until the whole paper curleaves two hundred and fifty-three million rency is gradually taken in, how many years eight hundred and seventy-three thousand and will it take'to accomplish it? What will be the eighty dollars, ($253,873,080.) It may be as- condition of the country in the meantime, sumed, then, that a loan of two hundred and whilst the contraction is constantly going on? Mfty millions of dollars in gold, together with And what will it be when al our legal-tenders the balance now in the Treasury, would re- shall have been thus exhausted, together with deem all our legal tenders, and restore imme- the national bank currency based upon them? diately a specie currency. The question is, Why, our condition would begrowing worse and how, or where, and in what manner, and at worseevery day, and atthe close wewouldbeleft what rate this loan can be effected. As a gen- almost without any currency whatever. Why eral rule I am opposed to foreign loans, and should our people be thus oppressed and racked made none such while Secretary of the Treas- and tortured by a forced contraction of the curury, even to carry on our war with Mexico. rency, which is the life-blood of all our industry. But the loans then required were very small as Why this constant drainage of all the veins and compared with the amount now to be obtained. arteries of our industrial system? Do we want We did not suspend specie payments, and the bleeding now, and do we want it continued condition of the country was very different from month to month, and from year to year, then. The object now is to resume specie until we shall have exhausted the system by payments, and should we now borrow $250,- this Sangrado policy? But there are two kinds 000,000 in gold at home, even if it could be of contraction-the one by the gradual exhausobtained, therates would be most extravagant, tion of our paper currency, and the other by and the loan would so exhaust the available a domestic loan, draining fiom the people all moneyed resources of the country as to cause the available money of the country. a great and immediate contraction of the cur- I, then, am for a foreign loan, so as at once rency, to be followed by a terrible revulsion. to supply the vacuum, to replenish our exNo, this must be aforeign loan, so as to bring hausted resources, and resume specie payments, the gold here to create an expansion, not with all its incalculable benefits to our faith, in paper, but in specie, and to infuse new our credit, and our industry. life-blood into all the channels of industry. It What real objection is there to a foreign is contraction, without resumption, that is loan? Did Washington and the patriots of 5'76 object to it when Franklin negotiated our by the census of both countries, (that of Eng' first foreign loan in Holland? Did not Mr. land being 37 per cent. in each decade, and Lincoln, concurriDg with Mr. Chase, warmly ours 126.45 per cent.,) our wealth, in 1901, advocateit,when wethusobtained thenecessary would be largely more than quadruple that ot money to replenish an exhausted treasury during England. If the English credit was no better the late rebellion? than ours, they would never pay the principal It is certain, on resumption, that this whole or interest of their public debt. There is no loan would be taken by the masses of the peo- reason for this difference except this, that if ple of Germany at par, or higher, in gold for any member of the British Parliament should six per cent. bonds. We borrowed $250,000,000 propose, by evasion or otherwise, to repudiate from the Germans in 1863-4 to carry on the the principal or interest of their public debt, war then. And I would open the new foreign he would be instantly expelled from his seat loan at Hamburg, Berlin, and Frankfort, in the House of Commons, and because their aided by Count Bismarck, who is as great a system of finance is based. upon acknowledged friend of American as he is of German unity. rules of political economy. National credit is We should not go to London or Paris, from a part of the national wealth, especially with x^hose Bourse and Exchano ge were driven in a nation in debt, or one ever likely to be in 1863-4; but to th people of Germany, who, at debt, or engaged in war, and, in. maintaining that period, took several hundred millions of the credit of the nation, we not only sastain our bonds, all of which would rise to par upon its honor, but we diminish the interest upon the success of our new loan and the resumption its public debt, with a corresponding: decrease of specie payments. Not a few of the German of taxation. Whilst contraction, as we have people who took this new loan would emigrate seen, is death by a slow and lingering process, and join their countrymen here, felling the expansion of depreciated paper is immediate forests and cultivating our prairies, enlarging financial suicide. If we cannot resume by our wealth, dimiiishing our' taxes, and carry- contraction, when our depreciated Government ing freedon and civilization over out continent, currency is less than $400,000,000, how caa we from the rising to the setting sun. I would ever accomplish the object, when, as proposed print these bonds in German and English, as a by some, it shall reach $2,000,000,000, accomcompliment to the German people, who came panied by evasive and disgraceful repudiation. to our rescue in 1863 and 1864. They should The only remedy is immediate resumption, to be payable in German coins, with their equiva- be accomplished by a foreign loan. In this lents noted; their offer should be accompanied way we can at once make our legal tenders with our resumption of specie payments, and and bank currency based upon them equivathe statistics of our wealth and progress, with lent to specie, and raise oar bands at home copies of our homestead law, and a full de- and abroad at least to par in gold. This would scription of our magnificent public domain. nmale an immediate difference (as will be Let us do this, and we can obtain the wthole shown hereafter) in the active wealth of the six per cent. loan at or above par in Germany, country (its circulation and negotiable credits) and the golden current will rush Westward, of more than one billion of dollars. Such an replenishing the channels of industry with a enormous and inmmediate increase of our acspecie currency, reiviing our drooping busi- tive wealth, accompanied byall its invigoratness, and demolishing the gold board and gold ing influences upon every industrial pursuit, gambling in the only practicable way, namely, would cause the country to rise at once from by an immediate resunmption of specie pay- its depression, and commence a ew careerl of ments. But if we do not now resume, and prosperity and progress. whilst the repudiation question is hanging I have said we should authorize an immtleiover us undecided, we attempt a loan at home ate foreign loan of $250,000,000; but, perhaps, or abroad, it will either be an entire failure, or not half of it would be required. We can effect the rates willbe so uinous as to exhaust the sub- the loan for the whole amount, if needed, so stance of the people. Strange that we-a conn- as to give us the immediate potentiality of retry withalarge debt-haave ot lullyrealizedthe sumption; but we need only draw for it as it immense importance of our national credit, is wanted, receiving the benefits of the ex. With such a nation, credit is wealth, credit is change, and allowing interest only upon the capital; and so fLtlly haa this been.established sums actlually paid upon our drafts at matuin England, that, whilst their three per cent. rity. After consultation with the bankers of cansols are 94 in gold, our six per cents. are at Europe, immediately preceding my return here, 70, thus compelling us to pay an interest very I made this suggestion to Mr. Fessenden, then nearly three times as great as England. And Secretary of the Treasury, in December, 1864. yet, at the relative rate of progress, as shown Although opposed, generally, to foreign loans, 5""3"" "" "^'"'''~'" "" ~"C 6 I think he thought favorably of it, especially snmption, and look with amazement and diswhen peace should be restored; but, as he was trust at our failure to do so. about to retire from the Treasury, nothing was I am opposed to any considerable payments done at that time. Mr. Chase, also, gave the atpreset in extinguishment of the principal of suggestion of resumption his cordial approval. our public debt; not because I regard a public It was as clear to me then as it is now that debt a blessing; far otherwise; but when the unless we adopted this policy we must go into debt is incurred the great question is, by what contraction or expansion of a depreciated cur- system and at what rate of payment will the rency, each leading to repudiation and ruin. public interest be best promoted. Our greenbacks then were much depreciated, To decrease the principal of our public debt yet, upon a safe deposit of our bonds as col- payments of fifty to one by present annual payments of fifty to one lateral, we could then have got the gold at the hundred millions of dollars is to increase to rate of six per cent. per annum, and immedi- of taxation, that extent the present burden of taxation, ately have resumed specie payments. I feelstance of our which is grinding out the substance of our confident that, upon resumption now, we can people and immensely retarding the progress get the whole amount in gold at a rate net ex- of our wealth. That it is vastly iurous now ceeding six per cent. The European bankers will not be denied nor will posterity thank us have now studied our statistics, and they un- have -now studied our statistics, and they uu- for it. We have seen that at the rate of proderstand our boundless resources. All we0 our weh i want is to sustain and improve our national would be $465,663,832,116. Now suppose that credit, to put an end to an irredeemable and we should at that date, by this oppressive prodepreciated paper currency, and scout indig- extinguished our whole national cessn have extinguished our whole national nantly repudiation in all its forms, whether di- debt of $2,500,000,000. According to every prinrect or evasive. British consols, bearing three econoy, sucha process ciple of political economy, suchla process, so per cent. interest per annum, as we have seen, g. n g, ou six p c oppressive to our industry and retarding so bring 94 in gold, whilst our six per cents. are much the progress of our wealth, would have at 70. Yet, as shown in the third edition of diminished the aggregate in 1901 at least ten my financial London letters of 1863-'4, the fol- per cent. It would be much greater, but even lowing were the actual statistics from the cen-c t d i at ten per cent. the diminution in 1901 would sus of England and America: be $46,566,348,211. Now, deduct from this the Our national wealth in 1850 was..$7, 135,780, 228 1 16c 59c " 6 sf6' whole debt then extinguished, and the differ" " " 1860 " 16,159,616,068 England's national wealth in ence would exhibit a loss of national wealth in 1861...................................31,500000,000 1901 exceeding $44,000,000,000 as the result of United States increase from 1850 to 1800, such oppressive taxation. Now to pay six per 126 45-100 per cent. cent. interest annually and reduce the princiEngland's increase from 1851 to 1861, 37 per pal of such a debt as ours more than $500,cent. 000,000 in thirty-two years is more than England Assuming these ratios, the wealth of the or any other country has ever been able to acUnited Kingdom would increase as follows: complish in the same time. To do this would 1861.........$.................... 31,500,000,000 require an annual payment (exclusive of the 187[...................................... 43,155,000,000 1871 ------- -—.-....-'..' —-..43.155.:;'000.000 interest) of over 816,000,000 a year. But our 1881..................................... 59.12,350 000 1891...................,.. 80,997,619,500 payments ought to commence with a much 1901....................................110,966,837,715 smaller sum, say beginning with only And that of the United States as follows: $1,000,000, and go on increasing at the rate of 1860......$.......................... $16,159,616,068 $1,000,000 a year, making the second payment 1870...................................... 36,593,450,585 $2,000,000, the third $3,000,000, and the last 1880............................ 82,5,868845 $32,000,000 in 1900; and besides meeting the 1890.......................................187,314,353,225 1900"....^^'.1.. "1"^"'"^'423'330,438'288 annual interest, we should have paid more 1910...............................465,663,482,116 than 1500,000,000 of the principal of the pubThus our wealth in thirty-three years would lie debt in 1900. Thus'we would pay annube more than quadruple that of England. ally in pr)oportion to our constantly increasing The European bankers, and especially the means; for we must reflect that according to people of Germany, now fully understand the census we could pay $29,000,000 as easily these results. They know, also, the reasons in proportion to our wealth in 1900 as we of our hitherto wonderful progress-our free could $1,000,000 in 1860. institutions, our immense emigration, adding Those, generally, who oppose contraction nearly three thousand millions to our wealth or resumption, favor what they call expansion, from 1850 to 1860, and our magnificent public and many of them would pay off our whole domain, with our homestead and pre-emption Five-twenty loan in greenbacks. Now, this, systems. They know, also, our capacity for re- with our present greenbacks, and the converti ble Seven-thirties, would imake a total green- pillars of the Government to rock upon their back currency of nearly two billions of dollars, bases. Bat the annihilation of values would and, with the national bank currency, redeem- not be confined to the mnoney of the people, but able in greenbacks, nearly twenty-three hun- would extend to our two billions of dollars of dred millions of currency, mere naked prom- bonds, worth now to the holders $1,400,000,000 ices of payment, fundable in none of the in gold. But by the depreciation process these stocks of the Government, Now, our present bonds, or their substitute in currency, would currency, bank and legal tenders, is worth in not exceed twenty cents on the dollar in gold, gold nearly $500,000,000. Would the expanded or $400,000,000. Here is a loss of one billion currency be worth that much? I think its of dollars, which, added to the loss on curfirst value would be much less, and that it rency, annihilates values to the extent of $1,would go on constantly diminishing in value 360,000,000 in gold, or its equivalent. Recoluntil it would, in no brief period, share the lect that the values thus annihilated constitute fate of French assignats and continental the active capital, the money, and negotiable money. There would be a nominal, but no real credits of the people. Why, the revulsion available expansion of the currency; for the would be fearful, and the burning lava of a increased amount would purchase less than nation's wrath would roll over the authors of the smaller, but far more valuable, circulation, the dread catastrophe. Such a system would, in fact, be depreciation But what of the national honor? What of only-a vast addition to the volume of the our proud position among the nations of the currency, but a diminution of its aggregate earth? And what of the cause of self-governvalue. Such a currency would not be worth ment, when we, its bright exemplar and at the start twenty cents on the dollar in gold. trusted guardian, should have covered the great The first result would be to increase the ex- cause with the mantle of disgrace and shame? penses of the Government and of living nearly The picture may be darkly shadowed, but it is four-fold, with no corresponding increase of by the pencil of truth. Indeed, no mortal wages or of revenue. The expenses of the vision can penetrate those dismal caverns, the Government, paid in this depreciated paper, abodes of want and misery, where would wanwould swell to nearly two billions a year, and der, in agony and despair, the wretched victhe excess of our annual expenditures over re- tims of a nation's broken faith and tarnished ceipts would exceed a billion of dollars a year, honor. Remember this would be a repudiation, swelling yearly, with the necessary demand not of our bonds only, but of the money of the for a further inflation, until the whole mass people, the notes of the national banks, and of would become worthless, and leave the Gov- the deposits in them, and in the savings banks, ernment and people without money or credit. all redeemable in greenbacks, and the greenThe inflation of an irredeemable paper cur- backs themselves. The working man or rency necessarily leads to depreciation, and can woman, who had stored away a few greenend only in repudiation and bankruptcy. How backs for marketing, or fuel, or flour, or can it be otherwise? How can we contract groceries, would find their money so deprewhen there are no bonds in which the currency ciated that they could not supply their daily can be funded, or bonds the value of which has wants. And now as to the wages of labor. been destroyed by the action of the Govern- Experience and philosophy prove that wages meat. And if contraction is grievous when are the last to rise with a depreciated curour currency is five or six hundred millions, rency, because the children of toil cannot how infinitely more oppressive will contraction wait, but must work at wages lower in reality, become when the currency is increased to one until the great law of supply and demand, or two billions of dollars. Butlet us see what. gradually but slowly, restores the equilibrium. the effect of this depreciation would be on Indeed, in a vast number of cases, where there present values. Our national bank notes and are contracts for work by the month, or year, legal-tenders amount to near'$00,000,000, now or job, payable in currency, they could be worth about $500,000,000 in gold to those who liquidated in an almost worthless paper. The hold them. The gold value of this money, at repudiator and inflationist would pay labor in twenty cents on the dollar in gold, would be a greatly depreciated currency. The contraconly $140,000,000, thus annihilating at a blow tionist, after a long and ruinous delay, would values to the extent of 3860,000,000. This re- pay him eventually in gold. The resumptionduction of values is in the money, the olsy ist would pay him now, henceforth, and formoney held by the people of the United States. ever, in gold. If there is any principle that is This would reduce hundreds of thousands to vital, it is this, that ithe wages of labor should be want and bankruptcy. It would convulse'and always payable in gold, or its real equivalent. demoralize the whole country, and cause the And now, if we inaugurate the reign of a 8 depreciated paper currency, how many of the form, universal international value, how can toiling millions of Europe will come here to we, who are dealing with depreciated paper, swell our wealth and power? Howi mluch expect to compete successfully with those countries whose money is gold, or its actual foreign capital will come! Nay, let us rather equivalent? No nation has ever tried this ask, how much and who will remain to en- experiment without vast sacrifices and great counter the fearful risks and losses flowing failure So long asthe currency oftheworl is gold, any nation departing from this standard from a broken faith and worthless currency? impairs its own power of successful competi impairs its own power of successful competiAll confidence would vanish; there would be a tion, and gradually drives its products from the vast exodus of wealth and labor, a general im- markets of the world. It is true that it may, to a certain extent, so far as smuggling does poverishment, and a great decline of all values. to a certain extent, so far as sugglin does not open the safety-valve, keep out foreign imWe have seen that the loss in the gold values pots for a time, thereby annihilating its exof our bonds and currency would be equal to ports; but prices soon rise at home in a ratio $1,360,000,000; but the gains between their corresponding with the augmen;ed duties, and, resent values sy $0 n b s the check becoming ineffectual, is sought to be present val, sy n remedied by augmented tariffs. It is totally imand legal-tenders and national bank notes by possible for a nation like the United States to a rise to par, would be $840,000,000. Add this withdraw from the business operations of the to the first sum, and the difference to the coun- world, and it is equally impracticable to carry on successful international exchanges when try between repudiation and resumption would the mon of the country is depreciated paper. be $2,200,000000 in aold. Deduct, (this we We see this now in all business and in all the should not,) the proposed loan, and we have industrial pursuits; and, next to the wages of 1,950,'000,000 as the gain by resumption l as abor, American manufactures are most injured 1,950,0 0 as te gn by r, as by a fluctuating and depreciated papercurrency. compared with depreciation and expansion. We see, also, that our tonnage is constantly But this is far from all the benefit that would declining, and that our ships and steamers are accrue to the people from the resumption almost driven from the ocean. From 1846 to y I e is a m im in piti 1856 our exports, domestic products, and manupolicy. If there is any maxim in political thantripled, and they factures were more than tripled, and they economy proved by philosophy and tested by ought now, with the increase of our wealth, to experience, it is that an irredeemable paper have greatly surpassed those of England, and currency is a forced loan, exacted as a tax reached nearly a thousand millions of dollars.'.'. a- Where are they now, and to what point are from the people, not in proportion to wealth or they going? Let the Treasury reports answer property, but bearing with special severity on the question. For all these evils there is but all industrious pursuits, and imposing the one remedy, an IMMEDIATE RESUMPTION of severest burdens on the wages of labor. Such specie payments, accompanied by a AST EDUCTION OF TAXATION. a currency deranges all business by constant England exported, last year, products exAuctuations in prices, renders all calculations ceeding in value seven hundred millions of imreliable, and all pursuits uncertain. In dollars. This, with a population at least five tact, such a system is almost as perilous as millions less than ours, and with far inferior s-. resources. Our exports for the satue period gambling, with prices varying so much, almost scarcly reached half this sum. every day aLd hour, changing with the throws In truth, the whole machinery of the busiof the die in the gold room, or intensified by ness of the country is deranged, and nothing overment salei metals, and but resumption will restore it to proper action. overnment ales of the preciou m in my Texas letter of January, 1844, and in funding, and other necessary operations of the my subsequent Treasury reports from 1815 to Treasury connected with the currency, and 1849, I predicted that New York city, under vitally affecting its value from day to day. As a proper system, would rapidly advance to the command of the commerce of the world. well might we change the weights and meas- That prediction was in course of progressive ures from day to day, and expect the business fulfilment, until our gigantic vwar expenditures of the country to be prosperous and success- forced upon the country the suspension of specie payments, resulting in a depreciated ful, as to accomplish the same purpose by such spee payd an almot t itolerin ale txiatn. JK~~~ X11"~~ ~currency and an almost. intolerable taxation. great and rapid and constant changes in the Where is she now in the career of progress as currency, which are our measures of values, compared with London, her great and on-ly If the yard, the gallon, or the bushel could be rival? Let the account of her tonnage and changed every day by transactions in the gold business tell the story. Anld yet New York room, or by operations of the Treasury, the has incalculable advantages over London in business of the country would in reality be such a rivalry. She is, in point of latitude, io more fluctuating and uncertain than it is ten degrees nearer the average products of the rendered by similar changes in the, values earth, according to area, than London, and of money. All the benefits of skill and she represents a continent etretching fiom experience derived from years of devotion to ocean to ocean, and not a little island scarcely business pursuits, are lost through fluctuations larger than New York. Even now, on returnia the currency, which no sagacity or skill can ing to a specie currency, or one in all respects anticipate. When we rellect that each nation its real equivalent, remove the intolerable is but a part of the great community of States, burden of taxation, strike the shackles from united by ties of commerce, business, and inter- her' commerce and industry, and she will changes, and find the rest of the world sus- commence a new career, surpassing aIt her ained by a specie currency, which is of uni- former progress. 9 The question of commanding the commerce penditures, exclusive of interest on the public of the world is one of gigantic proportions, debt, to $104,000,000. I have not before me affecting not merely the city of New York, but the report of the Secretary of the Treasury for every other American city, and the entire this year, and can therefore only give the expeople of the Union. The local jealousies penditures for the year ending the 1st of July, against her are opposing nature and destiny, 1866. These, as given by the Secretary, were and are anti-American and absurd; for the $387,693,199. This is exclusive of payments real alternative is not between New York and on account of principal and interest of the any of our other cities, but between Arew York public debt. Now theselastpayments amount and London alone. Now, it is ascertained that to $140,000,000 a year. This would make our England, by commanding through London the whole expenditures, at a maximum, $244,000,commerceof the world, increases British wealth 000. This would be a reduction of $143,693,to the extent of at least five hundred millions 199, and compared with the expenditures of of dollars every year. And this is what we the fiscal year ending the 1st July, 1866, lose by failing to make New York, as we can, would enable us to reduce to that vast extent the centre of universal commerce. The loss is the taxes of the people. not to New York alone, but to every American This revenue of $244,000,000 a year, as a city, and to every State and Territory of the maximum, I would derive from three sources Union. The annual loss to us, in fact, amounts alone: to a sum that, in five years, could pay the 1. By a.tariff for revenue. whole national debt. Whilst New York by 2. By an excise on wines, malt and spiritulatitude is ten degrees nearer than London, by ous liquors, and tobacco; abolishing all other area, to the products of the earth, yet London internal taxation. being nearly in latitude 52, and so small a 3. By a tax on our national banks, based portion comparatively of the earth's surface upon just and fair equivalents, remembering north of that parallel being productive, the how essential they are to the prosperity of the real gain to New York far exceeds ten degrees. country, and that we must not drive them into The population and value of products north of liquidation by unfair and unequal taxation, New York are very nearly equal to those south, and thus revive the wretched State bank sysand the ratio constantly augmenting in her tern. favor. A tariff for revenue, as experience has shown, Accompanying the resumption of specie instead of depressing, improves all industrial payments, and essential as a part of the system pursuits, including manufactures, and vastly designed to restore the prosperity of the coun- augments the wealth of the country. Under try, must be an immense and immediate re- the tariff of 1846, as shown by the census, our duction of taxation. To accomplish this, we wealth increased from 1850 to 1860, 126 45-100 must reduce expenditures, restore the Union, per cent.; whereas, fIrom 1840 to 1850, the inand disburse only the sums required in peace. crease was only 64 pbr cent.; from 1830 to 1840, Our expenditures, exclusive of the interest 42 per cent.; and from 1820 to 1830, 41 per Our expenditures, exclusive of the interest ^^ So ^ ^ ^ ^ ^ on the public debt for the year preceding the cent. So also, from 1850 to 1860 our agricul& tural products increased 95 per cent., and our war, were $59,848,474, of which the expendi- manufactures 87 per cent., being, in both cases, ures for the War and Nav Departments were nearly double an preceding ratio of increase. $27,922,917, leaving our other expenditures 31,925:55 z So also, our exports, imports, and revenue $31,925,555. Now, supposing these to increase als ur or impts, and revenue fifty per cent., (which should not be,) it would nearly tripled in the same period of time, and our domestic trade rose nearly in the same make them $48,000,000. Now, if we double in ratio. Tis augmented ratio is not the result time of peace our war and navy expenditures, of increase of population, which, frno 1850 to which is too great an increase, this would make ease o pplatin, which, fr 18 t then $56,000,000. This would make our whole 1860, was less than 36 per cent. The Irish famine was supposed by my opponents to ac.. annual expenditures, exclusive of the interest on the public debt, $104,000,000. To effect count for the increase the first year, although on the public debt, $104,000,000. To effect the decreased price paid abroad that year for this reduction, we must resume specie pay- te ecreae r d abroad that yai sor tfor, by paying in gold, the Government our cotton nearly equalled the additional sum ments, for, by payg i gold, the Government paid by England for our breadstuffs and prosaves at once nearly thirty per Cent. of its expendi- visions. But the next year and the next, before tures, any gold had reached here from California, The second great reduction should be in the our exports and revenue went on augmenting mode of extinguishing the principal of the in a corresponding ratio, rising in eight years public debt. These payments, as I have at- from $28,000,000, under the tariff of 1842, to tempted to show, should be graduated in pro- $64,000,000 under the tariff of 1846. But, if it portion to our means. Beginning with one were true, thatwe could thus wonderfully prosmillion dollars per annum, increasing the pay- per under a revenue tariff after the gold disment by a like sum every year, and termina- coveries, why not continue the system? These ting in 1900 with a payment of thirty-two mil- discoveries, however, produced no eflect whatlions of dollars per annum. By thus gradna- ever until after the fiscal year ending on the ting the payments in proportion to our means, 30th June, 1849. The truth is, however, even we should lift an immense burden of taxation after that date, these wonderful results as to from the people. imports, exports, and revenue, must be attribAnother item, growing out of the repeal of uted, in a very slight degree to these gold distaxes and excises, amnounting to nearly $8,000,- coveries, for the following reasons: First, 000 a year, would be the disbanding of nearly the rate of increase during the first three years our whole army of tax gatherers and the ex- of the operation of the tariff of 1846 down to penses incident thereto, which, I shall discuss the 30th of June 1849, before any of this gold hereafter, when considering the question of had reached here, was greater than the rate of taxation. In this way, and by avoiding all, increase at any succeeding period. The reaunnecessary expenses, we can reduce our ex- son of this greater ratio of increase from 1846 10 to 1849 was, that when the shackles of our was ninety-five per cent., the table I have given,. commerce and industry, including the immense as to quantities and numbers, shows an inindirect taxation imposed by the tariff of 1842, crease fully equal to eighty-five per cent., thus were suddenly removed by the reduced tariff of leaving about one per cent. per annum for the 1846, the country sprung forward at a bound effectof gold inincreasingvalues, thusverifying unprecedented in the history of the world; the tables of the European economists. As to second, the great political economists of manufactures, values only are given, and not Europe have published, at various periods, and the comparative quantities; but by table No. especially in 1863, authentic tables, giving the 132, page 129 of the compendium of the census exact facts, from the prices current of all arti- of 1850, it will be found that the number of cles throughout the world, during the several persons employed in manufacturing establishyears since the goold discoveries. These tables ments that year was 944,991, while page 59 of show that the additional prices caused by these the census of 1860 gives the number for that gold discoveries amounted to about one per year as 1,385,000. Thus, whilst the increased centum per annum. It is true that a contrary numbers of persons employed in manufacturing opinion had prevailed toa considerable extent, in 1860 as compared with 1850 was not quite based, not upon facts, but upon certain con- fifty per cent., yet the vast discoveries and imjectural theories of prices and currency. The provements in machinery as applied to manuideas of these theorists (now abandoned) were factures during that period must have increased that prices would increase in a proportion equal the product at least twenty-five per cent., as to the additional gold produced.. But they compared with the same number of workmen, ignored several important facts: First. How thus again demonstrating that very little more very small a part specie performs in carrying than ten per cent. was due to the increased on international exchanges, and even domestic value of manufactures in 1860 as compared business. Second. The great fact that in a with 1850, growing out of the gold discoveries. series of years the value of gold, like that of Whatever may be the exact per centage of inall other articles, is mainly regulated by the crease caused by these discoveries, it could not law of supply and demand. Thus, if an in- in any way have effected the results from 1846 crease of gold should so stimulate industry and to 1849, and from 1850 to 1860 the increased new enterprises as to make the augmented de- value produced in this way could very little. mand equal to the increased supply, prices have exceeded ten per cent. All candid men, would remain unchanged. This is now the who are searching after truth, must attribute conceded law as to the precious metals. A the wonderful success of the tariff of 1846, as further conclusive proof as to the existence of to imports, exports, and revenue, to causes this law is furnished by our own census tables almost wholly unconnected with the gold disof 1850 and 1860. Thus, the great increase of coveries. On a question like this, where. our our wealth, and of our products, over all other present system of taxation is so intolerable, decades, is attributed to the gold discoveries; and so much wisdom and patriotism are rebut although these might increase values, they quired to avoid most disastrous consequences,, would not increase quantities. By looking at should we not all discard previous prepossestable No. 36, in the preliminary report on the sions and prejudices, and search for the truth,, eighth census, (pages 198 to 210, including the wherever it may lead us? And here, may I additional returns on these pages,) the follow- not ask, among the thousands of articles that ing will be found to be the results, as to agri- are made and consumed by man, nearly all of cultural products, from 1850 to 1860: which come under the operations of our tariff, 1850. 18 0. is it reasonable to suppose that if one set of Horses, (number).......... 4,336,719 7,303,972 men take up all these articles separately, as Asses and mules........... 559,391 1,39 w,339 was done in framing the. tariff of 1846, so as lMlilch cows, woiking oxen, and other cattle-....' 18,375,857 A987,3s6 to ascertain what duty on each article will nd other cattle......... 18,378,857 28,987,3.6 Sheep.................. 21,723,220 24,S23.371 bring the greatest revenue, and another set in Swine...................... 30,354,213 36,023,472 whole, or in part, discard the principle, is it Wheat, (bushels).......... 100,485,944 171,183,381 not clear that those who impose the duties Rye, (bushels)............. 14,188,813 20,976,286 with a view to revenue will produce a much Indian corn, (bushels)..... 592,071,104 830,481,707 greater Iesult than those who look 0,ainly to Oats, (bushels)...........146,584,179 172,55-1,688 Tobacco, (lbs.)............. 199,758,655 429390771 what is called protection? Ginned cotton, (bales).... 2,445,793 5,198,077 But there was another reason why the tariff Wool, lbs.)................ 52,516,959 60,511,343 of 1846 so soon tripled our revenue; and that Peas and beans, (bushels). 9,219,901 15,188,013 Irish potatoes, (bushels).. 65,797,896 110,571,201 was the mode of collecting the duties. The Sweet do. do 38,268,148 41,606,302 tables annexed to the Treasury reports of Barley, (bushels).......... 5,167,015 15,635,119 1846-7 will show, even under the tariff of 1842, Buckwheat, (bushels).....,956,912 17,664,914 that the ad valorem duties produced 20 per tWine, (gallons)......... 221 29:1,80o,008 cent. more than the specific duties. And how Butter, (lbs.).............. 313,345,306 460,509,854 Hay, (tons)............... 13,838,642 19,129,128 can it be otherwise in the absence of fraud? Clover seed, (bushels)..... 468,978 929.010 It may as well be said that a direct tax of one Grass seed, (bushels)...... 416,831 900,386 cent an acre on all lands, or five dollars on all Heomp, ( ~tons)......... 34,871 101,490 houses, will produce as large a revenue as a Hops, (lbs.)................ 3,497,029 11,010,012 MIaple sugr, (lbs.) 4 3 388388 tax in proportion to their values. In all cases Cane sugar, (hhds.)....... 237,133 302,205 of direct or indirect taxation, the tax, in proMolasses, (gallons)........ 12,700,991 25,517,699 portion to value, incorporates itself proporBeeswaxand honey, (bs.). 14,853,128 26,386,855 tionately with the price, and must, necessarily, Rice, (lbs.) —small decrease, increase the revenue. Cheese-slight increase. Flax-large decrease. And now, as to frauds: When there are but Flaxseed-small increase. five or six duties, as under the tariff of 1846, Silk cocoons-decrease of 4,281 pounds. and hundreds of different duties under the speWhen we rememboer now that the increase cific system, it is much easier to perpetrate of our agricultural producl s from 1850 to 1860 frauds by changing names and classificationof 11 articles, than by reducing their values. That ports, and diminish the revenue. This proved there were comparatively no frauds under the to be the case, as shown by the tables of our tariff of 1846, is proved by the immense aug- exports of dyed goods under the tariff of 1846, mentation of revenue; but still more by the as compared with those of 1842. After a close favorable balance of our foreign trade, as corn- investigation of this subject, and after examinpared with previous systems. Thus, with im- ing the tariffs and the manufacturing establishports under the tariff of 1846; valued at the ments of foreign countries in 1851-2, and custoIm ouse at $350,000,000, if there had been 1863-4, I am convinced, that, to admit the raw an under valuation of only ten per cent., as material of manufactures in all cases, duty compared with real values and consequent free, would greatly increase our wealth, augsales here, it would have turned the balance ment our exports, imports, and revenue, and against the country, from that cause alone, diminish the burdens of taxation. Let us re$35,000,000 in gold a year. There is another member that, in taking the duty off the raw insuperable objection to the specific system, material, the consumers, the people of the viz.: that it unnecessarily and invariably taxes United States, get the manufactured article labor vastly more than capital, and the poor, at a lower rate. This, then, is another step in in a much greater proportion than the rich, the reduction of taxes. With this principle in upon the goods consumed. Under the system view, we could take up the five and ten per of specific duties of so much per pound, or cent. schedules, and having admitted, duty yard, or gallon, &c., the specific duty is the free, all the articles specified in them, constisame. The rich, who purchase the costly ar- tuting the raw material of manufactures, we tide bearing only the same specific duty, pay, in should abolish those two schedules, and put proportion to value, less than one-half what is the remaining articles into the fifteen per paid by the poor, who purchase a cheaper and cent. schedule, thus simplifying and improvless costly article. If we take all the costly inf the system.and increasing the revenue. articles purchased by the rich, bearing, under 2d. All the textile fabrics, and all mixtures the present tariff, the same specific duty as the of them, whether of wool, cotton, flax, hemp, inferior article bought by the poor, we will find silk, &c., should be placed in the thirty per the difference against them exceeds $20,000,000 cent. schedule. This would wonderfully sima year. Such is the immense additional tax plify the system, prevent frauds, and largely exacted from labor under the system ot spe- increase the revenue, whilst, as an incidental cific duties. I know how fashionable it was to aid to manufactures, so far as tariffs can help denounce the entire ad valorem system of 1846 them al; all, it would be beneficial. as a novelty, but the experiment was com- 3d. Allwines, all malt and spirituous liquors, pletely successful, and the reason why it was together with tobacco and its manufactures, a novelty was, that Europe is ruled by kings should bear a duty equal to the excise, with and oligarchies, that the laws are made by the an additional duty of fifty per cent. ad.vawealthy few, and so framed as to exact the lorem. largest duty from labor and the least from cap- 4th. The duties on all other foreign luxuries ital. Switzerland, a republic; is with us on consumed in this country should be increased this question. to such a rate, as would, in every case, bring But the tariff of 1846, although it remained the largest amount of revenue. much longer in operation than any other tariff, 5th. The duty on iron and all its manufacand produced much more beneficial results, tures should be 40 per cent. ad valorem, for was susceptible of great improvements, espe- two reasons: First, because it would only place cially in its application to the present condi- them on an equality with manufactures of textion of our country- tile fabrics, when the raw material of manu1st. The raw material of manufactures, as factures should be duty free. Second, because recommended in my first annual report, should this duty will bring more revenue than any be duty free, as is the practice of all enlight- other, and we now want all we can get from ened nations. This proposition, then made by the tariff. It is a curious historical fact, that me, was to some extent defeated at that time on a thorough investigation in 1846 of the by Mr. Calhoun. His argument was this- duties which would bring the most revenue, I that, so far as no revenue was collected on the finally arrived at the conclusion that 40 per cent. raw material of manufactures imported here, on iron and its manufactures would bring more we must make good thelossfromotherarticles, revenue than any other duty. On exhibiting and that this was an unjust and unconstitu- these results at that day to a Southern Repretional discrimination in favor of American sentative in Congress, and having convinced manufactures. My answer was-first, that it him of the truth of this position, he made, in would never be unconstitutional to permit any the House of Representatives an offer to the one or more articles to come in duty free; iron interest of Pennsylvania and other States second, that Mr. Calhoun had agreed toa large to place the duty on iron and all its manufacfree list in the compromise tariff of 1832; third, tures at 40 per cent. ad valorem, if they would that, in point of fact, there was no real loss of support the bill. This condition was necessary, revenue, but an actual gain, resulting in this because EMr. Calhoun had declared, that if way: That, as our imports were measured by these duties were placed at 40 per cent. ad vaour exports, specie only liquidating occasional lorem, he would oppose the measure. As the balances, and that, as we reduced our exports, whole scheme would be defeated by Mr. Calwe were necessarily diminishing our imports, houn's opposition, if the iron interests would and decreasing our revenue. To illustrate this, not unite with us, which they refused to do, I said that dyestuffs are now free from duty, the scheme was abandoned. But the fact still and we have a considerable export of dyed- remains that a duty of 40 per cent. ad valoremr goods to foreign countries. But if we impose on iron and all its manufactures would proa tax upon dyestuffs, which are admitted duty duce more revenue than any other rate. I refree by all other countries, we shall either anni- gret very much to differ with my native State hilate or gradually diminish our exports of as regards coal. It is emphatically the great dyed goods, correspondingly decrease our im- raw material of manufactures, of locomotion, 12 and of steam power ou the water and on the gold basis and upon actual capital, with the land, and, as fuel, is an absolute necessary f abolute security of their notes by deposits of life. It will be remembered, that when the United States stocks with the Government. duties were changed, in the tariff of 1846, to Based upon such securities as these, banks, an ad'valorem duty of 30 per cent. on coal, like bankers, would only increase according to Pennsylvania denounced the measure, and con- the law of supply and demand, as they should sidered it destructive of her interests, especially do, and there would be no danger of any too as connected with Nova Scotia coal. But it great or too rapid augmentation, for the evil produced no such results; and even after Nova would correct itself by diminished business. Scotia coal became duty free, under otr reci- This, however, should only be permitted on procity treaties, our coal producers were not the resumption of specie payments, with injured. On the contrary, the increase of coal specie reserves, in place of legal tenders, mined from 1850 to 1860 was over 169 per cent. which would all have been paid in gold. On -namely, from 7,173,750 tons in 1850 to 19,- the resumption of specie payments, national 365,765 tons in 1860. (See census table 13, banks would, of course, be established in Callpage 173.) It is the success of all the great in- foruia and all the gold-bearing States and terests of the country, and especially of the Territories, because their paper would be great iron interest, creating such a vast de- equivalent to gold, and always redeemable mand for coal, that is infinitely more import- upon demand. On the restoration of the ant than all duties upon the foreign product, Un1ion and the renewed prosperity of the and it seems to me that coal ought to be duty South, the number of banks would be:largely free. increased there. Whilst all business, includWith these and some minor changes in the ing bank circulation, has been permitted heresystem, developed by experience, and with the tofore to increase, as it should, with the prevention of stmugging, growing out of re- augmenting wealth of the country, it is a duced duties, it can be demonstrated that such strange anomaly that bank capital and circua tariff would produce an annual revenue of at lation alone should be limited to a fixed and least two hundred millions of dollars a year, arbitrary sum, although there is an increasing increasing at least six per cent. every year, demand for more circulation. being in a compound ratio of the augmentation Our bank capital from 1850 to 1860 increased, of our wealth and population. according to the census, nearly one hundre d per Toobtain thoseresults, however, wemust first cent. The aggregate capital of these national resume specie payments, restore the Union, re- banks is now $425,000,000; but it would have establish the prosperity of the South, and been much greater but for the monopoly reabolish the whole system of internal taxation, strictions imposed bylaw. Suppose that under except as hereinafter stated: the$ free banking system the capital should 1. In addition to the taxes on the national double every ten years, it would, as we have banks now imposed by law, yielding, accord- seen, be $850,000.000 in 1878, $1,700,000,000 in ing to the last report, g8,000,000, I would im- 1888, and $3,400,000,000 in 1898, and, as we have pose but one additional tax upon them. It seen, would soon absorb for circulation the would be, that, whilst permitting them all to whole debt of the country, and thus soon loan money at one uniform rate of seven per enable us to hold the whole national debt at cent. per annum, as ought to have been done home. But the greatest effect of all would be originally, they should pay over, annually, to in sustaining the Government and perpetuating the Government one-half their nel profit real- the Union, making us one nation so far as ized during the year over' seven per cent. I money is concerned. Then every bhuk which I think this would be fair to the Gcovernment, held our bonds, and every citizen of every State just lo the banks, and satisfactory to the peo- holding the money based upon them, would be ple, and would ultimately yield a very large virtually and directly interested in sustaining revenue. As the present capital of the na- the Government and perpetuating the Union. tional banks is $425,000000, and yields in all Indeed, if this system had been in full operaits operations $8,000,000 revenue tothe nation, tion in 1860, secession would have been imand as our bank capital, as shown by the cen- possible, because, by that act, the South sus, doubles every ten years, this capital, at would have destroyed all its own banks and that rate of increase, would be $850,000.000 in moneyed resources, and because the State 1878, $1.700,000,000 in 1888, and $3,400,000,- banks in the South were the very citadels of 000 in 1898. This would double the present secession, supplying mainly the loans upon tax every decade, and make it $64,000,000 in which the conflict was conducted there. 1898. But if, under the additional tax pro- In the third edition of my London letters, in posed by me, the net annual proilts should letter No. 5, page 24, and Appendix, page 3, it only by orne per cent. exceed seven per cent. will be seen by the returns of the census that that tax would amount to $2.125,000 in 1868, the gross product of our agriculture, manufac$4,250,000 in 1878, $8,500,000 in 1888, and tares, mines, and fisheries, was $5,290,000,000 $17,000,000 in 1898. Thus, the banks in 1898 in 1860. It was in fact greater, as there were would pay a tax of $81,000,000, and soon more many omissions in the census. It has been than liquidate the whole interest of our debt. demonstrated in a recent letter of mine to the This tax, too, would be collected withoutt any Commissioner of the General Land Office, preexpense or emnbarrassmentl. pared at his request, that, at this time, the To accomplish all this, our national bank amount of these products connected with system should no longer be a monopoly in the domestic exchanges exceeds $5,000,000,000. It hands of the few, but all vwho will comply is estimated by political economists, that, from with the laws of Congress ought to be per- the first wholesale purchase, through the vamitted to increase their capital or establish rious changes, down to the sale to the actual new institutions. That this would increase consumer, these products are exehanged, on an the currency of the country, is not denied. average, four times. This would make the But, upon the resumption of specie payments, annual exchanges of these products equal to these banks could only be established upon a $20:000:0000000. But we have a great many 13 other exchanges besides the sale of products, ernment, deposited in the United States such as the enormous sums paid to railroads Treasury. They rest, besides, on all the capifor freight and passengers, and for navigation tal and reserves of the bank and fixed liability on canals, rivers, lakes, and oceans; for rents, of the shareholders; but upon what would the and interest, and insurance, &c., and all the seven hundred millions of legal tenders rest? various and multiplied business of life. In a Upon nothing but the faith of the Government. nation having now thirty-seven millions of There'would be no bonds in which they could people, forty thousand miles of railroads, and be funded, nor any period fixed for redetnpat least twenty-five billions of wealth, as.shown tion, and bearing no interest, and with no by the census, our total exchanges and re-ex- guaranty against further expansion. The changes must amount to thirty billions of dol- seven hundred millions of legal tenders and lars a year. We may begin to form some idea national bauk notes are worth now $500.000,000 of the prodigious amountof these transactions, in gold. What would these seven hundred from the fact, that the amounts exchanged an- millions of legal tenders be worth when the iaually through the clearing-house by the banks Government had cut loose from the banks of the city of New York alone, amounted in and put its own paper inill in exclusive opera1860 to over $7,000,00,000. Now, if the do- tion' They certainly would not command mestic exchanges throughout the whole country fifty cents on the dollar in gold, and this, amount to $30,000,000,000 a year, a loss of one therefore, would be equivalent to an actual per cent. per annum would be $300,000,000 a contraction of the currency of thirty per cent., year. Under our old State bank system, the or $150,000000, by releasing the reserves now loss on exchanges from the varying value of required to be kept in the vaults of the banks. State paper in passing from State to State, and And yet the Government and the people would often from county to county, would certainly lose by the depreciation of all the bonds and average at least one per cent. on the amounts legal tenders held by them, the Government of money exchanged. Charge this on only expenditures would enormously increase by one-half the amount of our exchanges, and the payments in depreciated paper, and the interannual tax imposed in that way upon the est gained on the amount released from their people of the United States, would reach one legal tender reserves by the banks, would be hundred and fifty millions of dollars. But greatly less than the tax now actually paid by this was not the only loss. During the sixty- the banks to the nation. The expansionists four years of the operation of the State bank would gain nothing, for, the depreciation of system, besides many partial and local sus- the currency would make the increased volume pensions and failures, there were eight general worth less than the smaller circulation was suspensions of specie payments, accompanied before. The only way to expand safely and with great revulsions in business and in- beneficially to the Government and the people, calculable losses. These losses did not is by a foreign loan, to substitute gold for merely affect the stockholders and de- greenbacks, and increase the number of napositors, but they impaired or destroyed tional banks by repealing the monopoly and the whole bank circulation held by the peo- restrictive clauses. pie. The depreciation would, perhaps, vary How are the transfers of the Government to from ten to twenty per cent. during the sus- be made, and at what expense and risk, when pension, but hundreds of banks would never the national banks shall have been abolished resume, and their circulation become utterly aunl their circulation withdrawn? Who, then, worthless, or greatly depreciated in value. It are to be the fiscal agents of the Government, is almost impossible even to make an approxi- and where, with whom, and how are its receipts mate estimate to the vast losses sustained by to be deposited, for the assistant treasurers the American people from the failure and sus- deal only in gold? Is this issue of $700,000,000 pension of State banks. Now, by the present of legal tenders what is desired by expausionnational systei:m, there can be no failure in the ists? If so, how long is this paper carnival of circulation, and the total losses in other ways, the treasury to last, and when, or how, are we during their whole period of existence, has to resume specie payments? Why, specie paynot reached one-fourth of one per cent. of ments could then only le resumed by a loan, their capital; and there may be, so far as the if it could be obtained, or by gradual contracdeposits are coocernecd, still further security. tion, and what then would be the condition of Indeed, nearly the whole loss arose from the the country? Why, the national bank circuwant of a provision to prohibit disbursing offi- lation having disappeared, legal tenders would cers to deposit with national banks, except have been exhausted, and we should be left with such as should Ilave secured all Govern- without any paper circulation whatever. Or ment deposits, by disbursing officers as well is it intended that this shall be a permanent as by the Treasury, by United States stocks. system when we shall have resumed specie I should consider, then, the destruction of the payments? If so is the Governient to turn national banking system as an immensecalam- banker, and how, and where, and in what manity to the country, to be accompanied, at this ner, and at what places, is it to redeem fronm time, by a tremendous revulsion, and forcing day to day its treasury notes, in specie, and hundreds of millions of our bonds upon the how, and by whom, are they to be reissued? already overburdened markets of Europe and The national bank notes are redeemable in the Aanerica But, it is proposed by soine, to call various towns and cities throughout the Union, in the national bank currency of three hun- but such an arrangement could never be made by dred millions of dollars, substituting therefor the. Government to redeemr its notes throughout an equal amount of legal tenders. We shall the country, without gigantic frauds and stuthen have nearly seven hundred millions pendous losses. Suppose the Government of legal tenders, and no national bank would keep two or three hundred millions of currency. Now, in the first place, these three dollars in specie here to redeem seven hundred hundred millions of national bank curiency, millions of legal tenders, what becomes of the rest upon an actual capital of three hundred man in New York holding these legal tenders, and forty millions vested in bonds of the Gov- desiring the specie every day and every hour 14 to meeteontingenciesand the wantsofbusiness. of the bank, as also at New York city, and What are the men to do who would require it in. payable in a gold currency of an etablished all the Western cities, more and more remote and uniform value throurhout the rLorld, I befrom the seat of Government, especially in San lieve our bank notes would rventually obtain Francisco? The merchants there, say in a a ]arge circulatien in Europe, permeate all given day, want two or three millions of dol- North and South America, and, crossing the lars in gold for remittance to China, or Japan, Pacific, reach China and Japan, and be reor Mexico, or Central or Southern America. ceived as our United States bank notes once They hold legal tenders, but how are they to were there. Such a system would greatly acget the gold? It is obvious that these notes celerate the period when this country, through would be gradually depreciating, and that, as its commercial emporium, would become the a consequence, the specie at the seat of Govern- centre of the commerce and exchanges of the ment would soon all be drawn out. And if the world. At present, our exchanges on London, Government had not specie to meet all the usually quoted at from 9 to 10 per cent., are a notes, it must fail and be protested. Is the mystery to tht great masse-e of the people, Government prepared to keep 8700,000,000 in they not recognizing the differelnce between gold to mee., at various points, the demand the parliamentary and congressional value of for gold, subject to all the risks of fraud and the pound sterling. At present, exchange from peculation, or is it to keep up forever an irre- Europe on this country has no fixed value, and deemable and depreciated paper currency? is always obtained at great loss, whilst in Asia The whole idea of Government paper, and Egypt, such a thing as exchange on this as a permanent system of circulation, country is hardly recornized. has uniformly failed wherever it has I now pass from the bank question to the been tried, and has always either been aban- last topic, viz: Internal taxation. doned, or has reduced the Government Almost everything is taxed now, either by a to bankruptcy. When the Government issues stamp tax, an income tax, a tax on sales, or an at its pleasure the whole currency of the coun- excise on nearly every article that is consumed try in paper, the temptation to over-issue, and by the people; and an army of tax-gatherers are increase expenses, is irresistible; suspension employed, at a vast expense, accompanied by follows; the depreciation goes on, auonmenting enormous frauds, to collect a small portion of from day to day, until repudiation finally winds this tax. Now, I would disband nearly this up the drama of ruin and disgrace. There whole legion of tax collectors and assessors, may be some of the national banks that would and repeal the whole system of internal taxagladly present their notes and wit;hdraw their tion, except the excise on wines, malt and bonds from the Treasury, circulating legal ten- spiritons liquors, and tobacco. I arm confider nlotes, escaping considerable taxation, and dent that under surch a system at least one hunrealizing increased profits at the expense of the dredand thirty millions of dollars a year, in people. But there is nsot one of' them that would gold, or its equivalent, could be collected from not know what would be the necessary termi- these articles. By table 21 of the census of nation of the system, and would prepare in 1860, the number of gallons of spirituous time to guard against the catastrophe. Let us liquors distilled during the year ending June 1, go on and perfect and improve, but not destroy 1860, exceeded eighty-eight millions of dollars. our national banking system. If further checks I arm opposed to any reduction of the excise on are wanted that woald not impair the system, whiskey, believing it to be oneof thoseartilet them be made. If further reserves of spe- cles, above all others, from which we onuht to cie are necessary upon resumption, let them be collect tlhe laroest possible revenue; and confirequired. If the whole of their deposits, as dent, by the experience of England for years well as of tlheir circulation, can be secured by in collecting a tobacco tax, where a much national bonds, let this be provided for also. larger proportional rate was assessed and colIf, as is easy, a fair and equitable arrangement lectid, that the presfnt whiskey tax can be recan be made by which the country banks alized. Surely we ought not to surrender this would redeem their notes, not only at their tax to fraud and villany without still further own counters but at the city of New York, like efforts for its collection. If all these results theold Suffolkbank systemof New England,let are realizedr, the revenue would amount to that be done, with proper aids and facilities $340,000,000 a year in gold, which leaves a from the Government, so as to prevent loss or margin of nearly one hundred millions per expense to the New York city banks or the anllum above what would be required to carry country banks. on the Government, and pay ithe interest and When Secretary of the' Treasury, I urged a small proportion of the principal of our pubearnestly upon Congress the granting of autho- lie debt. rity for the proper steps to be..aken to deci- Should this system yield a large surplus, as malize our weights and rmeasures, and to pro- I believe it would, I would still further reduce duce, as far as practicable, uniformity in themr, taxation in the following manner: and an international coinage of uniform value 1st. By admitting duty free coffee, tea, and throughout the vworld. Congress has now taken sugar, which have becmne great necessaries of a great and glorious first step toward a decimal life in this country. systen of weights and rmeasur'es, and I believe it is now in. its power to hasten the establish- 2 I ee wl still cosder l sur auent of irternational coins of similar value plus revenue, I wsvould takie the duty i'orn other meint of international coins of similar vale ^ rs of life not produced athome. throughout the world. If we would make the necessaries of life:lot ploduced at home French franc a unit, rising or falling with the 3d. If a surplus still remained, I would delarger or smaller coins, making half eagles vote it to such great works of national interequal to twenty-five French francs, so marked nal improvement as the ship canals to the upon it, as proposed by me in 1851, and our West, which, in augmented wealth, would dollar equal to five francs, with a national fourfold repay the expendituies. bank currency perfectly secured, redeemable Our present system of taxation is the most with absolute certainty in gold, at the counter onerous ever imposed upon any people, and is 15 utterly destructive of the prosperity of our under which nations violating their just obligacountry. tions can be punished, but they cannot escape Our present tariff is also most unequal, op- with impunity. Besides the disastrous results pressive, and unjust. It is grievously onerous on their material interests, such nations justly upon agriculture, commerce, navigation, ship- become outcasts among communities; aud, in building, the mines and fisheries, whilst even the providence of God, sooner or later, meet manufactures, in connection with our present with just retribution. It is a part of the Divine wretched excise system, are languishing under law, applicable as well to nations as to indiviits inflictions. The present tariff, besides the duals, that injustice carries with it retributive tax of $150,000,000 a year upon imports, the punishment, and history, sacred and profane, duties on which are paid by the people into abounds with such examples. Franklin's the Treasury in gold, exacts another tax of at maxim, endorsed by Washington, that "honleast $350,000,000 a year in the enhanced esty is the best policy," is as true ot communiprices of rival protected domestic articles. ties as of individuals. This can be readily proved by comparing the On this great question which now attracts prices current in gold of such domestic articles the attention of our country and the world, with the prices of similar articles produced in Congress, and every member must make a other countries. Thus, the tariff taxes the record that will be read and studied now and people of the United States to the extent of in all succeeding ages. There will be a roll of $500,000,000 a year, of which only $150,000,000 honor and of shame, on which will be ingoes into the Treasury, and the remaining scribed names never to be obliterated. There $350,000,000 go into the pockets of the pro- is nothing so enduring as truth. It may be tected classes. And yet, even they are not crushed for the moment, but eventually is sure prosperous, on account of the diminished de- to triumph. To say that any gigantic national mand for their products, and because they are crime, such as repudiation, will not meet the also burdened, with the rest of the people, by retributive justice of Heaven, is to believe that the weight of intolerable taxation. God has abdicated the moral government of The annual taxes now paid by our people as the universe. the result of the tariff, we have seen, are at Although the toiling millions may have litleast $500,000,000 a year. Add to this another tie of this world's goods to leave behind them, $500,000,000 a year as the result, directly and yet, in life, all can strive to maintain, and in indirectly, of our internal system of taxation, death to transmit to our children, the priceless including the stupendous and atrocious whis- heritage of a nation's honor. It is the joint inkey and other frauds, and our national taxa- heritance of every American. Who can estition, in time of profound peace, amounts to mate its value? Better than gold, dearer than $1,000,000,000 a year. Less than half of this life, as well may we strive to number the stars goes into the Treasury. This is independent that are lost in the shadowy verges of receding of State, county, city, and municipal taxation, space, or count the years and centuries that which is enormous. This billion of dollars a roll on forever and ever, in secula, seculorum. If year, as the census shows, is about one-seventh God has given us great wealth and power and of the gross values of our present annual pro- priceless freedom; if He has endowed us with ducts, and can be borne by no people on earth. the advancing, peaceful possession of a contiRepudiation is the necessary result of the con- nent stretching from pole to pole and from sea tinuance of such a system. to sea, He will surely exact from us the perSince my return from Europe, I have con- formance of corresponding duties. First versed on this subject with many intelligent among these, are the maintenance of honor and persons, including leading manufacturers of the preservation of good faith. Be just and iron, wool, and cotton, and I have not yet met fear not. Let us be just, and no imagination a single individual who does not agree with can conceive the fulfilling realties and advancme that the tariff, as above proposed, together ing glories of the great Republic. with the changes as regards internal taxation, It may be well that this technical objection would be far better for them than the present has been thrown in our way to swerve us from system. What will be said of this by political the path of duty. We were tempted, but we manufacturers, I do not know. fell not. Let the American Congress proclaim If we look at the effect of repudiation upon that our faith shall be preserved, when our the morals of the people, and upon State, mu- credit wil rise higher and higher, emigration nicipal, and individual contracts, the result will come, and capital and labor, and money must be disastrous. When an individual able where they are most safe; and gold will pour:o pay refuses to do so, he is justly considered in upon us in Pactolean streams, and lolng befraudulent bankrupt, and the law looks upon fore the close of this century, our debt will iim as such. In morals, there is no difference scarcely be counted as a fractional per cent. )etween a nation able to pay and refusing and in writing up the ledger of the nation's wealth in individual. There may be no human law and resources.. J. WAT ER.