* # * * 264 cents." "The difference in exchange at the present time probably would make the tariff about equal to the internal revenue on the American book, still leaving the English book, landed in New York or Boston, to cost only about half as much as the American book made here. How long will it take, with this state of things existing, to transfer all the miscellaneous book publishing to London, and to cripple our paper mills, and send our skilled workmen into other channels to get a livelihood? "That a repeal or modification of the paper duty would not afford adequate relief is apparent from the fact that foreign paper can be imported now cheaper than it can be furnished of similar quality here. If this be true of what may properly be termed a raw material, so far as books are concerned, the inference is patent that the matured product should have at least equal protection with that raw material; and while the monarchical governments of Europe, especially Great Britain, make it a matter of public policy to exempt books and literature from all taxation, it is also evident that it is neither just nor equal, in a country where, above all others, the public welfare depends upon the universal diffusion of knowledge, that there should be levied upon the medium of this diffusion a higher tax in internal revenue than the foreigner who seeks our trade has to pay in duties to the customs." The commission would add that at the present time the one article which, above all others, would seem to be a peculiar product of American industry, viz: Webster's Spelling Book, is now being printed in large quantities in London for the use of American schools. Another striking illustration of the necessity for the equalization and adjustment of the tariff and the internal revenue act is afforded in the case of Manilla rope. By the present tariff act, Manilla hemp imported direct from Manilla is charged with a duty of $25 per ton; and when imported from Europe, an additional duty of 10 per cent. ad valorem, amounting to between $15 and $25 per ton, (according to its cost in Europe,) making, in such case, the whole duty. amount to from $40 to $50 per ton. On the other hand, the duty on imported or Manilla rope is only 2 cents per pound, or $56 per ton. By the internal revenue act, the tax on the manufacture of cordage is fixed at 6 per cent. on the market value, which at the present time amounts to about 1 cent per pound, or over $33 per ton. It seems evident, therefore, that while the American manufacturers of cordage are paying a duty on hemp imported directly, of $58 per ton, (and when imported indirectly, of $73 per ton;) and while the duty on imported rope is but $56 per ton, that not only are they without protection, but that there is a difference in the taxation against them, and in favor of foreign manufacturers, which must result most injuriously to this branch of business. We need only add that under this state of things the importations of Manilla cordage from Europe seem to be rapidly increasing. PROPOSED REVENUE POLICY FOR THE FUTURE. In respect to the evils arising from excessive duplication of taxes under the internal revenue system and from a lack of equalization between the tariff and the excise, it may be urged that the remedy for the latter difficulty is most easy, viz: by increasing the tariff. To this, however, as a permanent measure, there are most serious objections, inasmuch as the lack of equalization is not confined to the articles specified in our illustrations, but is very general, and will be more and more extensive as the value of currency approximates to that of gold; while an increase in the tariff, sufficient to remedy all the difficulties, would render the tariff itself almost prohibitory, or at least so high as to invite continued assaults, deprive it of all elements of stability, and increase the business of the contra *The commission would, however, call attention to the fact that no allowance is here made for freight, insurance, and other charges of transportation, and that the cost of the English book is given in gold, the American in United States currency. bandist. The remedy, therefore, for the difficulties above pointed out and illus. trated, save in a few striking instances, which have probably resulted from oversight in the framing of the law, must, in the opinion of the commission, be sought for in such a revision of the present internal revenue system as will look to an entire exemption of the manufacturing industry of the United States from all direct taxation, (distilled and fermented liquors, tobacco, and possibly a few other articles excepted.) This the commission are unhesitatingly prepared to recommend. As, however, the revenue derived from the excise on the industrial products of the country amounted to nearly sixty per cent. of the gross internal revenue in 1863; to sixty-four and a half per cent. in 1864; and to nearly fifty per cent. in 1865, it is evident that a radical change of the kind recommended should not be made at once, but gradually, and according as experience satisfies us of our ability to substitute other and less objectionable forms of taxation adequate to produce a revenue corresponding to that relinquished. To endeavor to remedy the difficulties growing out of the present duplication of taxation and want of equalization between the excise and the tariff, by specific enactments of exemptions, as has been proposed by some, would, in the opinion of the commission, be impracticable, and would crowd the statute book with such a detail of enumeration as would render the law exceedingly difficult of comprehension, and open the way for more gigantic frauds than are now practiced. The evil is radical, and the remedy must also be radical. Looking back upon the history of the country for the last quarter of a century, we find that during the decade from 1840 to 1850 the population of the United States increased 35 per cent., while the national wealth during the same period experienced an increase of 89 per cent. During the next decade, from 1850 to 169, the increase of population was 35 per cent., and of wealth over 126 per cent. Now, without undertaking to deduce any estimates of the future from the past, the commission, nevertheless, think they are warranted in asserting that the circumstances favoring the future increase of the country, both as regards population and wealth, find no parallel in the history of experience of any other nation; and it need hardly be added that if a development in any degree approximate to the past can be maintained and continued, the extinguishment of the national debt, in a comparatively brief period, becomes a matter of no uncertainty. To secure this development, both by re noving the shackles from industry, and by facilitating the means of rapid and cheap intercommunication between the different sections of the country, is to effect at the same time a solation of all the financial difficulties which now press upon us. Until these ends are effected, it is of no avail to enumerate the natural reurces of the country, or to dwell upon the energy or intelligence of our people. The experience of Great Britain and New England on the one hand, and of Mexico on the other, affords striking examples of the truth of the maxim of modern political economy, that "those countries are the richest where men are the most active, and not those where nature has been the most bountiful.” Assuming, then, that the policy indicated-which we may here restate in brief to be the abolition or speedy reduction of all taxes which tend to check derelopment, and the retention of all those which, like the income tax, fall chiefly The estimated value of all the real and personal estate in the United States belonging shiva fusis, in 1950, was $7,135,7-0,224. This included the value of 3,204,313 slaves, WLD BE WURF ach, amounted to $1,602,156,500. This deducted from $7,135,780,228 would leave $7,251, 0725,728. ** Ţ » extituated value of all the real and personal estate belonging to individuals in 1×60 „Esbiti,nom. Tas included the value of 3,953,5-7 slaves, which, at 8500 each, kou ted to $1,476,723,500. This deducted from $16, 159,616,068, would leave $14,2×2, -2, I has the total capital stock of the country increased from 1950 to 1×60 at the rate of 1 per cent." upon realized wealth—is accepted as the desirable future revenue policy of the country, the question next arises, In what manner and to what extent can it be carried out, and at the same time insure to the government a revenue adequate to its necessities? SOURCES OF REVENUE. This brings us to the consideration of the nature and capacity of the sources available to the government for revenue, and to the special department of investigation assigned to the commission. According to the estimate of the Secretary of the Treasury, there will be required for the year ending June 30, 1867, to meet the expenditure of the gov ernment, and to provide for the interest on the public debt, a revenue of $284,317,181. Assuming this estimate as a basis, let us now examine in detail the sources whence the revenue necessary to meet this expenditure can be drawn. We would first ask attention to the revenue derivable from IMPOSTS, OR CUSTOMS. The following table exhibits the annual imports and exports of the United States from 1859 to 1865, inclusive: For the five years prior to and including 1861, the average annual value of imports was in excess of three hundred and fifty millions of dollars; and for the three years next succeeding June 30, 1861, the annual average has been about two hundred and sixty-two millions. For the five years prior to and including 1861, the average annual value of exports was, including gold, not far from three hundred and seventy-one millions of dollars; and for the three years next succeeding the fiscal year 1861, the annual average was a little over three hundred millions, also including gold. With the return of at least one and a half million of men from unproductive to productive avocations, and with a renewed demand for cotton and naval stores at greatly enhanced prices, coupled with a renewed ability to supply the same, the commission think it safe to estimate the average value of our exports for the three years next succeeding June 30, 1866, at not less than four hundred millions of dollars; and as experience has shown that the demand for foreign commodities by the people of the United States is limited mainly by their capacity to purchase the same, we believe that we are further warranted in assuming that the average annual value of importations from abroad for the same period will not be less than three hundred and fifty millions of dollars. The commerce of Great Britain is estimated to be increasing at the present time at from eight to ten per cent. per annum. With the continuance of peace, and with the expansion of our population to thirty-eight millions in 1868-a number at least one-fifth in excess of that of Great Britain-progression, not retrogression, in American commerce, should be anticipated. As the average of the present tariff is understood to be upwards of forty per cent. upon the invoiced value of those importations upon which duties are levied, the average having been greatly increased during the past few years by the imposition of duties upon tea, coffee, and other articles previously on the free list, as well as by some additions to other articles, the commission, after making due allowance for a possible reduction of some duties, and an increase of the free list, think it safe to estimate the amount of revenue derivable from customs, for the fiscal year 1867, to be at least one hundred and thirty millions of dollars.t Indeed, in view of the facts developed by the commission in their investigations, showing the enormous reduction in the consumption of some of the leading articles of importation by reason of the war, (see special reports on tea, coffee and sugar,) and the almost equally rapid increase in the consumption of the same articles since the war, they think they may safely assign a greater revenue from customs than that above given. As will be seen by reference to these specific reports, the consumption of coffee in the United States decreased from the annual average of 200,000,000 pounds in 1860, to less than 80,000,000 pounds in 1863. During the same period the consumption of sugar decreased from thirty-one to nineteen pounds per capita; and of tea for the whole country about twenty-three per cent. The gain in revenue from the increased consumption of these articles in 1866, as compared with 1863-'64, will not probably be less than $200,000,000, while the aggregate revenue for that year from the same three articles will probably exered $40,000,000. It should, also be borne in mind that, by the termination of the reciprocity treaty, many articles which are now admitted from the British provinces free of duty will hereafter be subjected to duty, and thus form another element of future increase in the customs revenue. INTERNAL REVENUE. We come next to the consideration of those sources of revenue referable to the excise or internal taxation. • The following table, prepared for the commission by Lorain Blodget, esq., of the Philade ph ́a custom-house, appraiser at large, exhibits the duties paid on imports, and the average perci ntages of the same on the value thereof for the fiscal year 1864-'65 : The above statement is of duties paid on merchandise entered for consumption, and on all rahandise withdrawn from warehouse for consumption for the above periods, excluding te going into warehouse, and all estimated duties. this statement it appears reasonable to assume that the existing tariff levies an average of about 40 per cent. on the total value of imports, and about forty-three per cent. on the values of those paying duty. It as worthy of remark that the revenue derived from customs since 1861 has, in every year, exceeded the estimate of the Treasury Department. The estimate of the Secretary of the Treasury for the year 1863-64 was $70,000,000, while the receipts were over 81092,0**,000; for 1864–65′it was also estimated at $70,000,000, while the receipts were nearly For the first quarter of the current fiscal year the receipts from customs were over $47, **,000, and the estimate of the Secretary for the remaining three quarters was $100,000,000; making a probable total for the year of $147,000,000. Among the miscellaneous taxes ($11,736,360) are taxes on estates in mortmain; on patents for inventions; on telegraphs; profits in new issue of bronze currency; revenues from prisons and houses of correction, &c., &c The following classification seems to us to present the sources of revenue more clearly than that adopted in the French budget: Direct taxes, ownership and use of land and buildings, poll taxes, licenses, &c.... Registration, stamps, &c.. Royal forests (wood and timber sold). Customs duties on foreign merchandise.. Exports, navigation, and other miscellaneous customs duties... Sugar, import duties on colonial.... Sugar, import duties on foreign... $7,058, 000 11, 786, 000 $63,072, 280 81, 537, 883 8, 051, 300 14, 439, 200 1, 192, 600 Sugar, excise duties on domestic.. It will be seen by the foregoing analysis that direct taxes, registration, stamps, customs duties, sugar, beverages, and tobacco, yielded more than seventy-six per cent. of the whole revenue, in the following proportions: direct taxes eighteen per cent.; registration and stamps, twenty-three per cent. ; customs duties, (excluding sugar,) four and a half per cent.; sugar, six per cent.; beverages, twelve per cent.; and tobacco, thirteen per cent. The deficit in the French budget for 1864 is reported at about 50,000,000 francs. Comparing the French with the English revenue system, we observe the same exemption from taxation of home industry, especially of those manufactures which find a market in foreign countries. Land is subjected to heavier burdens in France than in England, and the freedom of occupation and action is restrained by heavier exactions in the way of licenses, stamps, and registrations. The revenue derived from foreign imports is trifling in comparison with the customs revenue of Great Britain. The appetites and indulgences of the people are reached alike in both countries by heavy taxes on sugar, beverages, and tobacco, and in both the post office is made to contribute a large revenue. Of the two systems, the nature and details of which we have thus briefly sketched, the English is the only one which especially commends itself to the attention of the American investigator; and this system, the result of a long experience in the economy of taxation and national development, and for the perfecting of which the best efforts of British statesmen for at least the last quarter of a century have been assiduously given, affords, in the opinion of the commission, some indications for determining what ought to be the future revenue policy of the United States. And in saying this the commission do not wish to be understood as recommending any servile imitation of details, for nothing seems more evident than that a revenue system for a particular country |