Mr. Speaker, in taking the floor to discuss the question pending before the House, I appreciate the wide scope and magnitude of the subject which is involved. It is not merely whether we can and ought to dispense with the particular taxes sought to be repealed by the two little bills before the House — the tax on matches and the tax on bank-checks — but the subjects referred to the Committee on Ways and Means at the commencement of the session — taxation and revenues, the condition of the Treasury, and even the necessary expenditures of the Government, not only during the present fiscal year, but for the next and for a series of years in the future — present themselves for consideration and discussion.
I do not desire to discuss those questions in a partisan spirit or for party purposes, nor to go back to the legislation of preceding Congresses, whether republican or democratic, to inquire as to the action of a party or the particular course of individuals in reference to the revenues and expenditures of the Government. I design rather to present some figures which have aided my own investigations and seem to have an important bearing upon this great question, and to them I invite the attention of the House. They will be found in the tables that I shall submit.
When the last Congress adjourned there were apparently abundant revenues. Upon assembling at this session, we were startled to find that the national debt, no longer diminishing, had actually increased. The revenues, falling off, had become insufficient to meet current expenditures, and Treasury notes were being issued to supply the deficit.
Two years ago our predecessors were deliberating what reductions could be made most advantageously in national taxation, which furnished
2058too abundant resources. They found a plethoric Treasury. Its vaults to-day are almost empty. They sought to cut down the surplus of $57,000,000 annually remaining after paying the sinking fund. We are groping to find resources, or to stop expenditures, so as to avoid a deficit, which the Secretary lately informed us would reach nearly the same amount.
The cause of this great difference — of the contrast between its present condition and the large balance the Treasury was then able annually to apply upon the public debt — has not wholly arisen from the influence of the late panic upon business, nor in enlarged expenditures, but in part because the reduction of taxation, was greater than prudence should have dictated, and more than the subsequent Treasury receipts have justified.
The Secretary of the Treasury and the cautious and accurate statisticians and subordinates in his Department, as well as legislators, seem to have been over-sanguine as to the swelling volume of importations and customs revenues.
During the fiscal year 1873, the same in which taxation had been reduced over $50,000,000, the Secretary of the Treasury paid off over $50,000,000 of the public debt, although the cash in the Treasury was reduced over $7,000,000 to make the payment.
The Secretary of the Treasury, in his annual report for December, 1872, estimated the Treasury receipts for that and the ensuing fiscal years ending respectively June, 1873 and 1874, as follows:
The report for December, 1873, showed for same years actual and estimated receipts:
|Total||333, 000, 000||271,000,000|
The monthly receipts from customs duties, internal revenue, and total from all sources, since the 1st of January, 1871, when the reductions in the tariff act of 1870 took effect, have been furnished me by the Treasury Department. Their data will be of great value in estimating the revenues for the remainder of the year.
Statement of the receipts of the Government from January, 1871, to February, 1874, inclusive, as per returns in the office at the close of business on the last day of each month.
|1871 —||January||$17,437,807 06||$9,381,468 37||$3,775,939 88||$30,595, 215 31|
|February||16,780,984 09||8,649,323 86||3,121,542 76||28,551, 809 71|
|March||20,806,919 71||10,651,080 35||2,929,486 82||34,387,486 88|
|April||17,676,634 35||8,859,931 26||2,772,888 47||29,309,454 08|
|May||17,306,416 70||11,068,039 21||3,049,777 96||31,424,233 87|
|June||15,600,752 53||14,359,336 95||2,634,636 39||32,594,725 87|
|July||16,898,051 26||12,347,800 34||4,437,704 04||33,683,554 33|
|August||22,745,826 62||11,637,457 78||4,033,001 44||38,416,285 84|
|September||21,972,598 52||10,836,676 36||5,317,691 37||38,126,966 25|
|October||18,221,680 41||10,368,989 31||3,926,703 42||32,517,373 64|
|November||14,745,425 45||9,671,935 76||6,130,793 50||30,548,154 71|
|December||12,966,670, 57||10,017,254 96||4,592,736 35||27,576,661 88|
|1872 —||January||18,636,530 81||9,612,298 15||2,196,912 54||30,445,741 50|
|February||19,972,527 20||9,897,465 33||2,874,904 34||32,744,896 87|
|March||19,545,327 12||9,616,629 93||2,151,237 97||31,313,195 02|
|April||20,065,963 89||10,535,203 46||2,614,756 80||33,215,924 15|
|May||17,257,808 19||10,990,773 68||1,905,020 45||30,153,602 32|
|June||11,894,354 61||13,753,407 79||3,608,855 83||29,256,618 23|
|July||11,188,615 56||14,055,014 73||5,197,336 34||30,440,966 63|
|August||26,378,180 49||10,325,493 36||4,665,441 50||41,369,115 35|
|September||19,441,038 60||9,614,370 79||4,861,006 62||33,916,416 01|
|October||16,588,690 32||8,823,777 25||3,641,684 82||29,054,159 39|
|November||12,248,102 59||8,683,536 62||3,872,222 95||24,803,863 16|
|December||10,514,693 36||8,127,045 46||2,589,451 13||21,231,189 95|
|1873 —||January||14,753,063 36||8,101,163 46||3,418,138 03||26,272,365 34|
|February||17,338,846 68||7,878,050 13||3,225,732 66||28,442,629 47|
|March||17,026,258 05||7,116,509 28||3,494,886 69||27,637,634 02|
|April||14,795,590 49||8,103,613 53||2,892,173 95||25,791,377 97|
|May||13,731,307 76||12,285,999 82||3,848,127 79||29,865,435 37|
|June||11,938,242 83||8,919,007 81||2,435,533 29||23,292,783 93|
|July||14,777,146 47||8,578,044 35||2,416,073 08||25,771,263 90|
|August||18,375,392 83||8,572,495 84||11,440,409 89||38,388,298 56|
|September||15,963,149 09||8,225,894 65||8,232,372 24||32,451,415 98|
|October||11,522,498 98||7,091,532 88||2,139,431 78||20,753,463 64|
|November||9,720,834 27||6,771,496 89||1,168,067 29||17,660,398 45|
|December||9,986,436 12||8,413,161 48||1,160,202 72||19,559,800 32|
|1874 —||January||13,576,973 71||9,400,874 80||3,336,799 91||26,314,648 42|
|February||14,434,659 77||8,134,408 79||3,544,922 97||26,113,991 53|
Adding the receipts for the first eight months of the fiscal years 1872, 1873, and 1874, and the totals for the two former and proportionate estimate for the latter, we have the following comparison:
|Customs||$146, 721, 000 55||$129, 412, 972 76||$108, 436, 805 53|
|Internal revenue||84, 542, 259 73||76, 214, 962 11||65, 45l, 929 25|
|Total receipts||240, 309, 898 59||227, 065, 834 36||194, 606, 612 94|
|For the year:|
|Customs||216, 370, 286 77||188, 089, 522 00||162, 655, 210 00|
|Internal revenue||130, 642, 177 72||113, 729, 314 14||98, 177, 894 00|
|Total||374, 106, 867 56||333, 738, 204 67||291, 910, 000 00|
The probable receipts for the present fiscal year, unless the falling off is greater proportionately for the last third of the year than for the two thirds already elapsed, will be $292,000, 00. The receipts for the same period last year were $108,000,000, while for the remainder of this year $98,000,000 only will be required, or $24,500,000 per month, to reach the sum of $292,000,000.
Other members of the Committee on Ways and Means, in the examination of the subject, and in discussing the question before the House, have presented tables and figures which I do not care to stop to recapitulate, or to refer to at this time, except to say that the estimates and figures that they present do not show as much as the estimate I have made. My colleague on the committee from New York [Mr. E. H. ROBERTS] has stated the revenue to come into the Treasury front all sources will probably reach $288,000,000, and that the Secretary himself admits the present showing to be $10,000,000 better than he reported to us as the probable receipts at the beginning of the present session of Congress.
The Treasury estimate of expenditures for 1874, given to Congress by the Secretary at the commencement of this Congress, exclusive of principal and premium on public debt, was:
|First quarter, actual||$88,718,578 21|
|Three quarters, estimated||$200,630,000 00|
|Total for year, estimated||289,348,578 21|
The estimate made by the Treasury Department in January, 1874, places the amount required —
|For the fiscal year||$292,286,247 07|
|For the sinking fund||29,191,369 28|
|Total expenditure||321,477,616 35|
Even with the more favorable estimate of receipts the annual income is insufficient for 1874. The account will stand:
|July 1, 1873, cash in Treasury||$131,192,029 50|
|Less specie deposits||$31, 730, 000 00|
|Less coin deposits||39, 460, 000 00|
|71, 190, 000 00|
|Balance cash belonging to the Government||60, 002, 028 50|
|Receipts, estimated, for 1874||291, 910, 000 00|
|Total amount||251, 912, 028 50|
|Deduct expenditures||321, 477, 616 35|
|Balance cash on hand July 1, 1874||30, 434, 412 15|
The deficit for the current year may be bridged over until another year by drawling down the cash in the Treasury if next year's receipts shall increase or its expenditures lessen.
First. What will be the receipts for 1875? How will they compare with those of 1874?
|Customs||$180, 000, 000|
|Internal revenue||108, 000, 000|
|Miscellaneous||17, 700, 000|
|Total||305, 700, 000|
If the importations of dutiable goods continue as large as they have been since 1870 the estimates are reliable. They paid during the fiscal year 1872 $216,000,000 customs duties into the Treasury, and by modification of rates and repeal of duties, taking effect in the next fiscal year, the estimated reductions in customs duties amounted to about $32,000,000. The same volume of importations should give $186,000,000 receipts from customs. The receipts for the last two months, which my colleague on the committee [Mr. E. H. ROBERTS] considers encouraging, $28,000,000, will give only $168,000,000. There is little prospect of an increase in total receipts for 1875 to $305,000,000. I hardly expect to see them above the figures of 1874 — $292,000,000.
I desire to present, for the consideration of the House at this time, some figures bearing upon the condition of the business of the country, and to contrast its present condition and the condition of the Treasury with that of former years.
The first fact that presents itself is, that during a few years past there has been an unprecedented increase in the importation of foreign commodities.
I have a table here showing the amount of imports and exports for a number of years beginning with the year 1855, showing in one column the imports at gold value, and in another the exports, also estimated at gold value, and the excess of exports over imports, or the excess of imports over exports. That table is made up to the year 1873, and there are facts in it which have a bearing upon the future condition of the Treasury, and the revenues to be expected from customs, worthy of consideration in deciding upon our duty in regard to the revenue.
The imports of merchandise for the last three years have risen far above their normal condition. They are, in my judgment, far greater than the country can or may be expected to maintain. They exceeded $642,000,000 during the last fiscal year; indeed, including goods withdrawn from warehouses and directly imported, the amount as shown by the home-consumption statement was $682,000,000. That amount of commodities went into the consumption of the country, being over $200,000,000 in excess of the imports of 1870.
|Year.||Net imports, less re-exports.||Exports, gold value.||Excess of exports over imports.||Excess of imports over exports.|
|1855||$233, 020, 227||$246, 708, 553||$13,688,326|
|1856||298, 261, 364||310, 586, 330||22, 324, 966|
|1857||336, 914, 524||338, 985, 065||2, 070, 541|
|1858||251, 727, 008||293, 758, 279||42, 031, 271|
|1859||317, 873, 053||335, 894, 385||18, 021, 332|
|1860||335, 233, 232||373, 189, 274||37, 956, 042|
|1861||332, 093, 960||228, 690, 486||$103, 403, 474|
|1862||261, 300, 966||210, 688, 675||50, 612, 291|
|1863||226, 796, 336||241, 997, 474||15, 201, 138|
|1864||309, 303, 194||243, 977, 589||65, 330, 605|
|1865||216, 441, 495||197, 092, 093||19, 349, 402|
|1866||430, 770, 041||420, 161, 476|
|1867||391, 121, 801||337, 560, 517||52, 561, 284|
|1868||351, 214, 010||353, 135, 875||1, 921, 865|
|1869||411, 896, 374||318, 082, 663||93, 813, 711|
|1870||431, 950, 423||420, 500, 275||11, 450, 148|
|1871||513, 033, 809||512, 802, 267||231, 542|
|1872||617, 569, 017||501, 285, 371||116, 283, 646|
|1873||635, 467, 636||578, 938, 985||56, 528, 651|
Gentlemen, will have noticed that notwithstanding we have reduced our tariff from year to year, the imports have not only been increased but also the customs receipts up to within the last year or two. But when we compare these imports with the exports we find that since the year 1864 the imports have exceeded the exports at a gold value, inclusive of the gold coin and bullion, that have been exported, by over $400,000,000. We have not only imported $400,000.000 worth of merchandise and commodities more than we have exported, but in addition three or four hundred millions of coin; and I include that as one of our exports because it is one of the products of the country, just as much as any other product that comes from the soil or front the mines of the country. Well, now, under this state of things, is it likely that the imports will continue to that extent? I think not.
A parallel has been run between the condition of the country now and its condition in 1857, and there is a similarity in many particulars.
The customs receipts, total revenues, and not ordinary expenditures for three years prior to the close of the fiscal year ending 1846, and for five years prior to the year ending 1857, will appear in the following exhibit from Treasury reports:
|Year.||Customs receipts.||Total receipts.||Net ordinary expenditures.|
|1844||$16, 183, 570 94||$29, 320, 707 78||$30, 650, 108 01|
|1845||27, 528, 112 70||29, 941, 853 90||21, 895, 369 61|
|1846||26, 712, 667 87||29, 699, 967 74||26, 418, 459 59|
The receipts and expenditures rose under the tariff of 1846 to the following figures:
|Year.||Custums receipts.||Total receipts.||Net ordinary expenditures.|
|1853||$58, 931, 865 52||$61, 483, 739 31||$44, 078, 156 35|
|1854||64, 224, 190 27||73, 800, 341 40||51, 142, 138 42|
|1855||53, 025, 794 21||65, 350, 574 68||56, 312, 097 72|
|1856||64, 022, 863 50||74, 056, 699 24||60, 333, 836 45|
|1857||63, 875, 905 05||68, 965, 312 57||65, 032, 559 76|
There had been at that time a large increase of importation and business, as the tables clearly show. The balance of trade was in our favor from the year 1855 to the year 1860, and notwithstanding that we were reducing our public debt largely. The customs duties which, in 1844 amounted to $16,000,000, in 1845 to $27,000,000, and 1846 to $26,000,000, amounted in 1853, under what was called the low tariff of 1846, to $49,000,000 and in 1857 to $63,000,000. During those years the imports were less than the exports.
As imports increased the public debt, largely augmented by the Mexican war, diminished. Contrast the diminution of the one with the swelling volume of the other:
|Year.||Public debt.||Net imports.||Year.||Public debt.||Net imports.|
|1844||$23, 461, 652 50||$96, 950, 168||1853||$59, 803, 117 70||$250, 420, 187|
|1845||15, 925, 303 01||101, 907, 734||1854||42, 242, 222 42||280, 813, 867|
|1846||15, 550,200 97||110, 345, 174||1855||35, 586, 958 56||233, 020, 227|
|1856||31, 972, 537 90||298, 261, 364|
|1857||28, 699, 831 85||336, 914, 524|
In six years the public debt had been reduced from $68,304,796.02 to $28,699,831.85 — nearly $40,000.000. At the same rate of reduction in four years it would be extinguished.
In 1853 it was $59,000,000; in 1854, $42,000,000; in 1855, $35,000,000; in 1856, $32,000,000, and in 1857, $28,000,000. It seemed unnecessary to continue the taxation at the rate imposed, although not excessive. In 1857 Congress thought it expedient, wise, and safe to reduce the tariff. Duties on imports were lowered and many dutiable articles made free. In their judgment they had every reason to believe at that time that the receipts from customs and other sources would be sufficient to meet the expenditures of the Government. But such was not the case, from two causes: one an increase in the expenditures of the Government; another, a diminution of the amount of commodities imported. The amount of imports in 1856 was $298,000,000; in 1857, $336,000.000; in 1858, $252,000,000; in 1859, $318,000,000; in 1860, $335,000,000; and in 1861, $332,000,000. And it did not recover from the panic of 1857 in part, perhaps in part because of the war, nor did importations again reach to the figures of 1857, until the year 1866.
The falling off of the revenue during the present, fiscal year has been chiefly in customs receipts; and the importation of articles paying high rates of duties, such as iron, silk goods, articles of luxury, &c., has notably diminished.
I append a table showing the currency value of some of the leading commodities of the country exported during the last few years to foreign countries:
|Not specified||$50, 959, 320||$63, 289, 643||$70, 977, 811||$53, 122, 093|
|Breadstuffs||41, 249, 054||84, 586, 273||98, 318, 599||67, 318, 992|
|Provisions||29, 235, 237||59, 414, 227||78, 197, 241||40, 055, 960|
|Tobacco||31, 438, 561||26, 659, 921||25, 331, 946||25, 016, 153|
|Cotton||283, 165, 398||182, 988, 925||230, 190, 597||210, 164, 723|
|Petroleum||24, 830, 887||34, 058, 390||41, 971, 190||30, 832, 887|
|wood manufactures||13, 402, 892||15, 240, 872||19, 119, 802||14, 944, 351|
|Iron and steel||3, 759, 554||7, 709, 989||11, 119, 831||6, 490, 688|
|Coin||82, 643, 374||75, 271, 478||73, 905, 546||67, 719, 462|
|Total||550, 684, 277||549, 219, 718||649, 132, 563||515, 920, 561|
Now, in my judgment, we may expect a diminished importation for the future. For the last eight years the average exports at currency value have been only $515,000,000; reduce that amount to coin value and you will have, perhaps, something from $470,000,000 to $480,000,000. We cannot continually import largely in excess of our exports under the laws of trade or the course of business. Our exports must largely increase or our imports largely diminish. For these reasons I think that our imports will probably be much below $600,000,000, probably not exceed an average of $550,000,000, if they reach that figure. True, the receipts will probably continue to increase with the growth of the country. But there is this to be considered, that as the revenues increase by reason of the growth of the country, or of the elasticity, so called, of the revenue, the expenditures, for the same reason and under the same law referred to by the gentleman from Ohio [Mr. GARFIELD] in remarks he made during the last Congress, will also annually and unavoidably increase.
The chairman of the Committee on Appropriations [Sir. GARFIELD] has stated to the House that, in his judgment, the necessary unavoidable expenditures of the Government for the next fiscal year, exclusive of any payment upon the sinking fund, will amount to $270,000,000. The interest on the public debt, including the interest upon the Pacific Railroad bonds, which the Government has to pay, and which will be about $3,000,000, will amount to $101,000,000. That would leave the necessary and unavoidable expenditures of the Government, aside from that required for the interest and principal of the debt, about $169,000,000, or $170,000,000. But still, with the addition to the Treasury resources from estimates I have made, there must, it seems to me,
2060upon the basis of expenditures estimated to be required by the chairman of the Committee on Appropriations, as in his judgment the lowest sum possible to carry on the Government during the next fiscal year be a deficit, unless we have reason to expect that from some cause the receipts into the Treasury will exceed what they have been for the last fiscal year, or what they are at the present time. There must be a reduction of expenditures below the limit he assigns if increased taxation is to be avoided.
Now, I have taken the pains to look over a few years to see what have been the appropriations made by Congress. During the last six years I believe we had as members on the Committee on Appropriations men who have acquired a national reputation. If I may refer to them by name, there was one from my own State, known as "the watch-dog of the Treasury," (Mr. Washburne, our present minister to France,) because he opposed all unnecessary expenditures. Go back to the time when he was chairman of the Committee on Appropriations in the Fortieth Congress; go back to the Forty-first Congress, when our present distinguished chairman of the Committee on Ways and Means [Mr. DAWES] was then the chairman of the Committee on Appropriations, and was supported by members of his committee in watching the expenditures, Take also the time when the present chairman of the Committee on Appropriations was chairman of that committee [Mr. GARFIELD] for the Forty-second Congress. During those years you will find that the average of the annual appropriations was $166,000,000, including the direct appropriations made during the year, and the deficiency appropriations made subsequently for those years. I have here a statement of the actual appropriations, which do not include the permanent appropriations, which would swell the amount by $5,000,000 or $6,000,000. The amount now appropriated for the customs, and which was not then included in the appropriations, is not included in the statement.
I desire to call attention to these figures, because they refute and disprove conclusively the statement made by the gentleman from New York [Mr. WOOD] a few moments ago, that Congress just preceding an election appropriates a small amount, and then after the elections the republican Congress makes up by appropriating large amounts in deficiency bills. The appropriations for the year 1868 were made during the Congress that assembled in December, 1866. The appropriations made for the fiscal year ending June 30, 1870, were made in the year 1868. And I invite the attention of gentlemen to these tables.
The minimum appropriations were after and not before presidential and congressional elections. There was not a show of economy in the appropriations before the election, followed by large deficiency bills subsequent to the election.
|1868||$133, 533, 397 30||$12, 839, 196 21||$145, 162, 789 97|
|1869||147, 716, 689 64||20, 763, 270 94||168, 479, 960 58|
|1870||130, 956, 506 96||15, 400, 495 46||146, 357, 002 42|
|1871||157,199, 271 12||11, 263, 131 04||168, 462, 402 16|
|1872||160, 841, 951 61||7, 299, 360 71||168, 141, 312 32|
|1873||167, 490, 735 59||12, 978, 418 60||180, 478, 154 19|
|1874||184, 941, 878 78||184, 941, 878 78|
I have no fault to find with any gentleman who seeks to remedy the present condition of the Treasury by reducing expenditures. I do not know but that economy alone will bring relief; I hope it will, and am ready to aid efforts in that direction.
It was not my judgment in the last Congress, nor that of a majority of the Committee on Ways and Means, that so great a reduction should be made in the revenues as was effected by the legislation of 1872. The Committee on Ways and Means in reporting their bill to the House proposed a reduction of only about $32,000,000. The proposed reductions on the basis of quantities imported and internal taxes received during the preceding year were estimated as follows:
|Tea||$2, 348, 639|
|Coffee||2, 949, 309|
|Iron, steel, and manufactures thereof||2, 880, 762|
|Wool and woolens||5, 517, 275|
|Cotton manufactures||788, 724|
|Copper, and manufactures of||39, 611|
|Chemicals, drugs, &c.||584, 862|
|All other articles||29, 127|
|Free list||1, 584, 667|
|18, 952, 438|
|Tobacco||$6, 720, 000|
|Gas||2, 573, 123|
|Bank-checks||1, 250, 000|
|Matches||2, 250, 000|
|Total||31, 845, 561|
At that session, prior to the introduction of the committee's bill, I sustained the views then expressed by the chairman of the committee, [Mr. DAWES,] insisting that it was unsafe and unwise to deplete the Treasury to the extent demanded by others. I urged that from unexpected changes in the business condition of the country and from unforeseen causes the revenues might be found as they were subsequent to 1857, insufficient to maintain the credit of the Government, inadequate to defray its actual necessary expenses and meet the yearly demands of the sinking fund.
The House was impatient to reduce revenues. It was popular to repeal taxes regardless of the necessities of the Treasury. The duties were wholly removed from tea and coffee. The conservatism even of members of the committee was shaken. The chairman of the committee himself criticized the reduction proposed as not sufficient. He said, when reporting the bill and expressing his own preference for a total repeal of internal taxes except upon tobacco and spirituous and fermented liquors, and for a larger and broader free list than the bill contained:
And I would have preferred in doing this that the aggregate of the reductions should have reached, as I hoped it might, instead of the sum of $31,845,561 at least forty to forty-five million dollars, which I believe the revenues of the future will justify.
The bill passed the House making the reductions as estimated on —
|Dutiable articles||$11, 076, 629|
|Free list||2, 676, 093|
|Tea and coffee free||15, 893, 846|
|Total customs||29, 645, 778|
|Internal revenue||13, 988, 000|
|Total reduction||43, 633, 778|
The Senate modified and increased the amount of reduction both in customs and internal taxes, and finally both Houses agreed to a conference report, and passed the bill as it now stands in the law, making an estimated reduction as then explained by the chairman of the Finance Committee of the Senate. [Mr. Sherman,] in —
|Customs duties||$31, 669, 259|
|Internal revenue||21, 388, 000|
|Total reduction||53, 057, 259|
The estimated reductions of the laws of 1872 exceeded the amount recommended by the majority report of the Committee on Ways and Means of the last Congress by over $21,000,000. It is true that these reductions relieved taxation to an equal extent and in case of many of the customs duties afforded still greater relief to consumers of similar products. But I do not propose at this time to discuss that subject.
There are many points which, in an hour's time, one can but touch upon. Some of these it would be interesting to discuss, but I do not propose to trespass upon the time of other gentlemen. I will, however, in this connection, notice a remark made by the chairman of the Committee on Ways and Means, [Mr. DAWES,] and which has been reiterated here by the gentleman from Ohio, [Mr. GARFIELD,] the chairman of the Committee on Appropriations. It is a matter which will be pertinent to the discussion, and which we may hereafter be called to consider, perhaps in this Congress, if we find that we cannot keep down expenditures. In that case it may become our duty to decide how we shall provide revenue. When that question comes up, it will be pertinent to inquire, after examining the history of our legislation, what effect it has had upon the business of the country.
It has been stated here by the gentlemen to whom I have referred that the removal of duties on tea and coffee caused no reduction in the price of those articles to the consumer. I want to say hero, and I challenge denial or contradiction, that figures taken from the market reports show that such is not the case. I do not say this as an argument against the reimposition of those duties, but to correct a statement that is made a basis of argument hero and elsewhere.
I have here the prices for July and August of the various grades of coffee, showing the prices in 1872, when the act went into effect. In June the price of Rio coffee was 21.17 cents per pound, and in July it was 18.17, a reduction of 3 cents, just the duty repealed. The act went into effect on the 1st day of July. It is true that since then the price has increased, and that it is now much higher, having been in December 23.18 cents. In consequence of short crops the price has been increasing; but it is not the fact that the price did not fall with the decrease of duty.
I have no criticism to make upon those gentlemen who point out specific and adequate economical measures, or the details and items whereby a Treasury balance can be maintained, and the receipts made sufficient to defray the necessary expenditures of the Government.
There were one or two suggestions made by the chairman of the Committee on Ways and Means in reference to public expenditures indicating action for Congress, methods by which economical purposes could be carried into effect, to which I desire at this time to call the attention of the House. The chairman of the Committee on Ways and Means [Mr. DAWES] suggested that there would be, according to the Treasury statement, a deficit somewhere in the
2061neighborhood of $50,000,000. I think that was his conclusion — from $40,000,000 to $50,000,000, on the Treasury showing. Now, if that is the condition of the Treasury, if it will lack $40,000,000, we ought to be very glad to have pointed out to us in what way we can save the $40,000,000.
I have examined some of the items that our chairman has referred to. One is by postponing the prosecution of certain public works. Unnecessary works should be not only postponed, but postponed indefinitely. But it is the duty of the Committee on Ways and Means to look into the future, to consider the probable condition of the Treasury, not only at the end of this fiscal year and the next, but on from year to year. It is not sufficient to postpone these expenditures for this year. If unnecessary, we should dispense with them entirely. I do not know how much we can save in that direction. The Committee on Appropriations propose a reduction of some $11,000,000; and the House, I dare say, will applaud and sustain their effort.
Other specific modes of saving were enumerated, one being the reduction in the cost of collecting the revenue. I think the chairman of our committee made a mistake in his statement as to the cost of collecting the revenue for the last few years. I will not stop to read his remarks; but I will say that, upon examination of the finance reports since 1868, I find the following to have been the expenses for collecting the revenue. In 1863 the expenditures were $7,615,675.45; in 1869 the expenses for the same purpose were $5,376,738.13; the importation of merchandise for the same year amounting to $417,000,000. In 1870 the cost of collection was $6,237,000; the amount of importations $435,000,000. In 1871 the cost of collection was $6,560,000; the amount of importations $530,000,00. In 1873 the cost of collection was $7,079,743.42, while the merchandise imported amounted to $642,136,210.
The following statement from the Treasury reports shows the cost of collecting the customs duties and the value of imported merchandise:
|Year.||Expenses of collection.||Value of imported merchandise.|
|1868||$7, 615, 675 45||$357, 436, 440 00|
|1869||5, 376, 738 13||417, 506, 379 00|
|1870||6, 237, 137 25||435, 958, 408 00|
|1871||6, 560, 672 61||520, 223, 684 00|
|1872||6, 950, 189 81||626, 595, 077 00|
|1873||7, 079, 743 42||642, 136, 210 00|
Now, it is not fair to judge the administration of the Government, either its extravagance or its economy, by the amount expended in the collection of customs duties, unless you compare therewith, as I have done, the amount collected. A portion of these imports are of course free goods; but these free goods go in great part through the same formalities as dutiable goods. They must be entered, they must be invoiced, they must be examined; nearly the same amount of machinery is required in the importation of free goods as in the importation of dutiable goods. The expenditures for collecting customs have not kept pace with the increase of merchandise imported; nor have they kept pace with the increase of dutiable goods imported; and while the expenditures during the last four years have increased only about one-seventh, the importations have increased 50 per cent., being about $435,000,000 in value in 1870, and $642,000,000 in value in 1873. If the expenses amounted to the sum of $8,000,000 for 1873, as stated, the increase would even then be far below the proportionate increase of importations.
Perhaps the distributive share of fines, penalties, &c., may have been treated as Treasury expenditures, but those must vary and increase from year to year with the amount of frauds detected and penalties and forfeitures incurred during each year. They are no legitimate expenses, to be charged up and compared with former years as proof of the extravagance in collecting customs. The amount of distributive shares of fines, penalties, and forfeitures for the last five fiscal years has been as follows:
An equal amount, besides all unpaid duties, has accrued from this source to the Treasury.
There was another suggestion made by the chairman of the Committee on Ways and Means, upon this point — the abolition of unnecessary customs districts. My colleague on the committee, the gentleman from New York, [Mr. E. H. ROBERTS,] has stated that the committee were already considering the subject, and will not hesitate upon examination to recommend the abolition of useless custom houses or customs districts wherever in the interest of economy they can be dispensed with to the public advantage. But while I do not know what may be the case in respect to the possibilities of reducing the districts on the sea-board, I say that when you come to the Mississippi Valley there is one consideration that the House and the gentleman himself should bear in mind. As long ago as 1832, going back to the old democratic administrations, there were established in the collection district of New Orleans, which was a port of entry, ports of delivery for the convenience of the people as well as the interests of the Government. These ports of delivery were established upon the Mississippi River and its tributaries from point to point, extending to the eastern, western, and northern brunches of the river, reaching in one case to Pittsburgh, Pennsylvania, on the east, and as far as the settlements and commerce had extended on the north and west, for the delivery of goods which were simply entered at the custom-house at New Orleans and were allowed to pass on in bond, the duties being paid either at the port of entry or the port of delivery, as might be found most convenient for the shipper or the business of the country. At the same time certain districts were established, not so much for the collection of customs duties as for the regulation of the great navigation-interests of the Mississippi, the tonnage upon that river amounting to a large percentage of the tonnage of the country; all this navigation being regulated and controlled by the laws of the United States, vessels being required to be licensed and enrolled in the proper districts to pay their hospital dues and tonnage dues.
The gentleman from Massachusetts, in his remarks, instanced some of these custom-house districts which paid no customs revenue to the Treasury of the United States. Among them he named one I am familiar with, and perhaps I might enumerate several similarly situated along the Mississippi River. He mentioned one at Galena, which was established in 1852, when — and I say that for the benefit of my democratic colleagues and friends — Mr. Campbell, a democrat, represented that district upon this floor. They established a district there, made Galena the port of delivery, and, as is usual in those cases, gave the surveyor — which all the surveyors, I believe, on those waters still have, except at ports of delivery, created within late years — the enormous and extravagant salary of $350 a year and his fees. Well, now, I find that port, named as one of the non-paying and useless ports, actually paid within the last five years into the Treasury $42,000 collected from inspection, licensing of pilots and engineers, tonnage duty, fines, forfeitures, marine-hospital fees, &c., while the expenses were only $5,620.
Here is the exhibit that the Treasury reports show for the custom-house at Galena:
|Tonnage duty||$4, 158 19||$4, 095 88|
|Inspection of vessels||985 08||980 41||$875 19||$589 15||$326 93|
|Marine-hospital fees||1,215 99||1, 023 45||1, 527 40||2, 251 17||4, 375 00|
|Licensing pilots and engineers||3, 140 00||3, 120 00||3, 700 00||3, 965 00||578 83|
|Miscellaneous||2, 000 00||1, 000 00||1, 328 95||1, 180 00||340 00|
|Total||11, 499 26||10, 279 74||7, 431 54||7, 985 32||5, 620 76|
|Total receipts for five years||$42, 907 37|
|Expenditures for five years, at $959 per year||4, 795 00|
|Balance covered into United States Treasury||38, 172 37|
I only call attention to this as a criticism on the table in the printed remarks of the chairman presented, so far as relates to one district with which I am familiar; and while I am not familiar with all the districts of the country, I am told that the same facts exist in regard to quite a number of the districts referred to. Possibly we shall find that the necessity and business which required, at an early day the establishment, has justified the maintenance of most, if not all, the customs districts, so that extravagance in that particular is in appearance more than reality. The closing of the first seventy ports he enumerated would save $300,000 disbursed to employes. But the trade and commerce of the country might be discommoded and damaged to a larger amount.
The consolidation of navy-yards was suggested. I shall not have time, Mr. Speaker to discuss that question. I think the specific saving which the gentleman from Massachusetts claimed would result from the proposed consolidation was $86,000. It would be well to try to save that much. "Take care of the pence and the pounds will take care of themselves," is the old adage. That will not, however, reach a great way toward meeting the millions of deficit which the Treasury receipts seemed to threaten.
Another proposition was to reduce the fees of pension agents. Well, if we can save the poor pensioners anything by a modification of our laws, let us do it. I recollect when we passed that law in 1870, when it was proposed to have the postmasters pay the pensions, Mr. Benjamin, of Missouri, then the chairman of the Committee on Pensions, one of the most economical members we ever had in this House, insisted this was the best method for the Government to prevent fraud, and as economical as any method that could be proposed. And the Committee on Pensions, who are competent to decide upon that question, I presume, will be prepared to discuss it whenever it comes before
2062the House. But for the present I only want to say this: that I do not see how that is going to replenish or keep up the Treasury resources when the pension agents' fees cannot go into the Treasury and have no connection with it.
As regards the post-office expenditure, I cannot stop to dwell upon that. I know that the expenditures in the Post-Office Department have increased, and so have the mail facilities. The time in which letters and newspapers are carried from New York City to Chicago has been reduced now to less than two days, and I prophesy that before this year expires, or at least within a very few years, we shall see the mails carried between Chicago and New York in a much less time. Those facilities are for the advantage of the people, but of course they cost something.
Mr. GARFIELD. If the gentleman will allow me to interrupt him for a moment at this point I would say that it is now in contemplation to put on a fast post-office train between New York and Chicago that shall make that distance in twenty-four hours, and I suppose it will be done before the close of this quarter. I hope it will.
Mr. BURCHARD. If that is done it will be worth millions to the business of the country. To shorten the time between those two important commercial points, will be a benefit not merely to Chicago, but to the whole Northwest, the mails of which pass through that city. And it is necessary with the growth of the country to increase to some extent some of those expenditures, practicing at the same time a wise economy. If there be any useless expenditure cut it off.
But I shall not detain the House longer upon this branch of the subject, because I wish to present now another phase of this discussion. The exhibit of the Treasury that has been made by other gentlemen upon this floor has presented to their minds, or has suggested to gentlemen who have not yet addressed the House, that the way to meet the deficiency in the Treasury is to issue the obligations of the Government, either in notes intended to circulate as money or in the form of bonds. Mr. Speaker, I am opposed to that, for two or three reasons. I do not think we can afford to do it. I found, and you will find on looking at the debt statement, that within eight years of the present time a large amount of the bonded debt of the Government becomes absolutely due and payable.
When will the obligations of the Government, payable in the future, fall due? What provision is necessary to meet maturing indebtedness? Look at the last Treasury statement. Its exhibit shows the following:
|Title of Loan||Rate of Interest||After what time redeemable.||When payable.||Total|
|Loan of 1858||5||Jan. 1, 1874||$260, 000 00|
|Loan of February, 1861||6||Dec. 31, 1880||18, 415, 000 00|
|Oregon war debt||6||July 1, 1881||945, 000, 00|
|Loan of July and Aug., 1861||6||June 30, 1881||189, 321, 350 00|
|Five-twenties of 1862||6||March 1, 1874||May 1, 1882||168, 593, 150 00|
|Loan of 1863 (81's)||6||June 30, 1881||75, 000, 000 00|
|Ten-forties of 1864||5||Nov. 1, 1869||March 1, 1904||194, 567, 300 00|
|Five-twenties, March, 1864||6||Nov. 1, 1869.||Nov. 1, 1884||946, 600 00|
|Five-twenties, June, 1864||6||Nov.1, 1870||Nov. 1, 1884||58, 046, 200 00|
|Five-twenties of 1865||6||Nov. 1, 1870.||Nov. 1, 1885||152, 634, 350 00|
|Consols of 1865||6||July 1, 1870.||July 1, 1885||202, 633, 100 00|
|Consols of 1867||6||July 1, 1872.||July 1, 1887||310, 654, 400 00|
|Consols of 1868||6||July 1, 1873.||July 1, 1888||37, 474, 000 00|
|Funded loan of 1881||5||May 1, 1881||310, 870, 250 00|
|Funded loan of 1886||4 1/2||May 1, I886|
|Funded loan of 1901||4||May 1, 1901|
|Total||1, 720, 360, 700 00|
These bonds mature within the following years:
|Eight years, absolutely payable 6 per cents||$192, 018, 350|
|Eight years, payable at pleasure 6 per cents||264, 321, 350|
|Eight years, payable at pleasure 5 per cents||505, 221, 700|
|Ten years, absolutely payable 6 per cents||58, 992, 800|
|Eleven years, absolutely payable 6 per cents||355, 267, 450|
|Thirteen years, absolutely payable 6 per cents||310, 654, 400|
|Fourteen years, absolutely payable 6 per cents||37, 474, 000|
The principal of the interest-bearing indebtedness, payable in coin, amounts to $1,720,360,700, $1,214,663,160 of which bears interest at 6 per cent., and $505,000,000 at 5 per cent. That statement shows that within eight years there become absolutely payable $192,000,000 of the 6 per cent. bonds, and in the same time, at, the pleasure of the Government, $264,321,000 of 6 per cent, and $505,000,000 of 5 per cent. bonds. In ten years $58,000,000 more of the 6 per cent. bonds become due absolutely; in eleven years, $355,000,000; in thirteen years, $310,000,000; and in fourteen years, $37,000,000. These become due absolutely, besides about $769,000,000 becoming due within that time at the pleasure of the Government.
But for the able management of the Treasury by the late Secretary, within eight, years over $500,000,000 matured 6 per cent. bonds would have to be provided for.
By prudent, financial legislation in accordance with his policy, and negotiations protracted but successful, over $300,000,000 of 6 per cent. bonds absolutely payable were converted into 5 per cent, bonds payable after ten years at the pleasure of the Government.
While the syndicate seems to have brought little profits to its members, it not only relieved the people by a reduction of the annual interest burden, but provided in advance and postponed the payment of maturing obligations which the revenues will not suffice nor the sinking fund be able to discharge.
The sinking fund approximately requires for the present year about $29,000,000, and for the next fiscal year $30,000,000, the requirement of the sinking fund being 1 per cent. upon the interest of the public debt, and the interest upon so much of the sinking fund as has been already paid. If, then, we pay our debts by paying the 6 per cent. bonds, there will be an addition to the sinking fund each year of about 5 per cent. of itself.
The following is a statement of estimated amount required to be paid each year on the sinking-fund account if the public debt is diminished each year by redemption of 6 per cent. bonds to the amount of the sinking fund:
|Fiscal years —||Annual amount.||Total.|
|1875||$29, 918, 856|
|1876||31, 414, 798||$61, 433, 654|
|1877||32, 985, 537||94, 419, 191|
|1878||34, 634, 814||129, 054, 005|
|1879||36, 365, 555||165, 419, 560|
|1880||38, 183, 833||203, 603, 393|
|1881||40, 093, 024||243, 696, 417|
|1882||42, 097, 675||285, 794, 092|
|1883||44, 202, 558||329, 996, 650|
|1884||46, 412, 570||376, 410, 220|
|1885||48, 733, 198||425, 143, 418|
|1886||51, 169, 857||476, 313, 275|
|1887||53, 728, 350||530, 141, 625|
|1888||56, 414, 797||586, 555, 422|
The sinking fund will require more and more every year, and will, I think, keep pace with the elasticity of the revenue and the growth of the country. The sinking fund itself, at the end of eight years, will lack $160,000,000 of paying the 6 per cent. bonds then due at the pleasure of the Government. What must the Government do? If it cannot pay them off or refund them at a lower rate of interest the bonds must run on at 6 per cent. interest. At the end of eleven years $600,000,000 of 6 per cent. bonds will have become absolutely due, and the sinking fund will then be nearly two hundred millions short of paying what we shall be required at that time to pay to meet the requirements of the sinking fund, for the payment of which in the dark hours of our nation's history we solemnly pledged the Government, and the faith of the nation. Now, we must provide for that, $200,000,000 in one of two ways. We must, do it either by keeping up the credit and faith of the Government and our pledges, so that we can refund our debt at a lower rate of interest or else by putting from year to year taxation so high that, we will have by that time, or before that time, money enough to pay it. I for one, not only on principle but from policy, am in favor of maintaining the credit and honor of the Government. The honor of a nation is not like that of an individual, although that is sacred to each man personally.
What does the sinking fund require?
I will read to the House the act of February 25, 1862. It substantially required customs duties to be paid in coin, and so much as might be necessary for the payment in each year of 1 per cent. of the entire debt, and the interest on such payment to be applied annually to the reduction of the debt.
The act authorized the issue of legal-tender notes and five-twenty 6 per cent. bonds. It was entitled "An act to authorize the issue of United States notes, and for the redemption or funding thereof, and for funding the floating debt of the United States."
Section 5 provided —
That all duties on imported goods shall be paid in coin or in notes payable on demand, heretofore authorized to be issued and by law receivable in payment of public dues, and the coin so paid shall be set apart as a special fund, and shall be applied as follows:
First. To the payment in coin of the interest on the bonds and notes of the United States.
Secondly. To the purchase or payment of 1 per cent of the entire debt of the United States, to be made in each fiscal year after the 1st day of July, 1862, which is to be set apart as a sinking fund, and the interest of which shall in like manner be applied to the purchase or payment of the public debt, as the Secretary of the Treasury shall from time to time direct.
Thirdly. The residue thereof to be paid into the Treasury of the United States.
This pledge, given by the nation to all subsequent purchasers and holders of its obligations, requires collection of duties in coin sufficient, first, for the payment in coin of the interest on bonds and notes of the United States; secondly, to purchase or pay in each fiscal year 1 per cent. of the entire debt of the United States and the interest upon the yearly amount so purchased or paid.
What is meant by payment or purchase yearly of 1 per cent. of the entire debt, to which, sufficient customs duties, payable in coin, are
2063pledged? It means the reduction of the debt each year to that extent. Is the promise performed by the substitution of one form of obligation for another? Is national faith maintained if revenues are permitted to fall below necessary expenditures?
The law requires the purchase or payment in each year of 1 per cent. of the entire debt. It does not specify the bonded debt. It says the entire debt. It was prospective. It was intended to secure the funding of the floating debt, to keep up the credit of the legal-tender notes, and to facilitate their conversion into United States bonds.
The payment on the sinking-fund account was to be made within each fiscal year after July 1, 1862. It was to commence after that date and continue until the debt was discharged.
The payment was to be made in each year out of the coin received from customs duties set apart for that purpose.
Shall we have performed our duty as legislators and maintained the credit and honor of the nation if, instead of reducing the debt annually by the amount required for the sinking fund, we are content with the issue of additional obligations to meet current expenditures? No; every honest debtor would say no. If revenues are decreasing, we must consider whether the deficit will be temporary or permanent. Expenditures should be kept at all events at the lowest economical limit, and, if then, in excess of the probable annual income, we must provide additional revenues. Taxation is better than dishonor.
Commercial integrity is the pride of the merchant. Strong men, whose good names have been assailed and honor impeached, have drooped and sickened and died broken-hearted. Reverence and love for one's native city or State is praiseworthy; but respect and zeal for national reputation and honor are noble and patriotic. Let us ever glory in and cherish and sustain the just pride Americans take in their country's past history and character. Men willingly lay down their lives lighting for the honor of their country. It should be the patriotic feeling of every soul that the honor and credit of the Government must be sustained. To do this, the credit and faith of the nation, which it pledged in regard to the sinking fund, must be religiously maintained.
It is proposed that the people shall assemble at the birthplace of the Republic to celebrate the centennial anniversary of the Declaration of Independence. What will be their proudest boast? Will it be their country's vast extent of territory; its rapid increase in population; its magnificent development in material resources; its increased facilities for intercourse between distant cities, and the commercial interchange of products; its wide diffusion of knowledge and its splendid systems for free education? These indeed will be matters of pride and gratulation, They are, however, but indices, and not essential elements of national character and real greatness. Some of the smallest states have been the most illustrious recorded on the page of history. A nation possessing all these, but lacking national morality, integrity, and honesty, will not be grand and truly great. On that occasion it will be a prouder boast, and the highest national honor, that the United States, under all circumstances and under and in spite of every temptation, has been true to its honor and plighted word; that it has been scrupulous to maintain its solemn engagements not only with other nations but with private individuals.