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space of time it was proved that not only price of the import regulates domestn were the country and the institutions pe- prices. The net invoice value of the imculiar, but the nature of the people was re- portation of rough lumber during the fiscal fractory. Congress could easily enough year 1868 was about 1,500,000l., while the impose an eight-shilling excise duty on value of the domestic product for the same spirits, but the temptation of immense profit period, or that part of it which entered into

at once called into action all the resources of Yankee ingenuity, all the shrewd and unscrupulous qualities of the people, to defeat the scheme; and we have shown how the struggle, after shaking society to its foundations, ended in an absolute overthrow of the law, until, so complete was the disaster, few Americans can now comprehend how such a tax can be anywhere collected, under any system however perfect. The idea of taxing very heavily a few articles of large consumption had to be abandoned, and the only resource was a diffusion of taxes by means of licenses and stamps, which still

competition with the foreign import, may be approximately estimated at 12,000,000l. For every dollar, therefore, which is taken in the form of a direct tax, seven are taken indirectly through the increase of prices; or, in other words, 450,000l. are received into the Treasury at an indirect cost of about 3,200,0001.

The duty on salt is from 100 to 170 per cent. on its importing price, or almost prohibitive. The consumption is not stated by Mr. Wells, but we believe it is equal to at least 15,000,000 bushels, and the unnecessary enhancement of cost, or tax, paid

had the disadvantage of interfering with in- directly to American salt companies, is dustry, and allowing wide latitude of eva- about sixpence on each bushel, or 375,000l. sion without being equally productive. per annum, with no advantage to the TreasThe Government was of necessity thrown

back upon its import duties as the only very productive taxes that could be cheaply and thoroughly collected. Tax for tax, the internal duty was much the more expensive of the two.

ury.

The duty on pig-iron is equivalent to 50 per cent. on the cost of production in the United States. 'The community at large has been compelled to pay an unnecessary profit of from 28s. to 40s. per ton, on a present annual product of 1,500,000 tons, and has therefore been subjected during the past year to a tax of from 2,000,000l. to 3,000,000l., paid of course to the manufacturers of pig-iron exclusively.'

These instances are merely common examples of the recklessness and extravagance which is characteristic of the United States tariff, and their pith is contained in the fact that the lumber-merchant, the saltcompany, and the manufacturer of pig iron collect every shilling of their taxes, though the Government cannot collect more than sixpence in the shilling of its own. Lumber, pig-iron, and even salt cannot be smuggled in quantites large enough to affect the price. The whole tax falls directly on the consumer, and of these articles, every man, woman and child in the United States is directly or indirectly a large consumer.

High duties on imports, the highest that were consistent with trade and with healthy home industry, became, therefore, not merely advisable but inevitable; and no foreign nation would have complained so long as they were adapted to bear equally and steadily on honest commerce. Even this result would have been difficult, if not impossible to attain, for within the borders of the United States are produced many of the staple articles of trade from which England and the other European nations derive the bulk of their income. Tea and coffee could bear high duties, but tobacco, sugar, and wine are all produced in large quantities in the United States, and high duties upon them were merely protective to the home producer. But Congress did not stop to consider what might be the most perfect form of tariff. With few exceptions, it imposed duties upon all imported articles with the avowed intention of stimulating The Government, therefore, collects one home industry. Mr. Wells's last Report tax, amounting to 60,000,000l. or therefurnishes some illustrations of the result in about. Certain favoured interests collect three prominent instances - lumber, salt, another tax, the amount of which we are and pig-iron. We prefer to quote his unable to estimate. A third tax is colauthority because it is official, not because lected by the smuggler. We have already we might not furnish other examples which would be equally curious.

mentioned the sum paid under this head during several years to the whisky-ring, and we have public official statements that fraud is equally successful in other branches

The duty on lumber is 20 per cent. ad valorem, equivalent, with resulting charges, to 25 per cent., and is of course directed of the internal revenue. The custom-duties only against Canadian competition. The are probably better collected, but any re

sponsible man may contract in Montreal or standard of wages. Increased wages imply Liverpool for the delivery of smuggled increased capital, increased interest, ingoods in New York. This is the last re-creased cost of production, and so back port of the Commissioner of Customs, the again to increased wages. This process third Commission we have to cite as to continues until capital commands 10 per

cent. interest where it formerly received 7, and an average duty of 50 per cent. on all imported articles that pay duty at all, is acknowledged both by free-traders and protectionists to be no longer protective.

In all this operation there is no new principle involved, and if all political economy

abuses on the revenue service. Mr. Wells states that the number of duty-paid foreign cigars, which in 1859 was reported at about 800,000,000 per annum was reduced in 1867 to 30,000,000 under a duty of 150 per cent. ad valorem, although the actual consumption is supposed to have increased. So too with champagne, opium, and many is not a deception, the ultimate pressure other dutiable articles. The consumer must sooner or later fall upon labour. The probably saves a certain amount by paying profits of capital are not diminished, and it tax to the smuggler rather than to the Gov- is not likely that in a country like America ernment, but the burden must be borne, the demand for capital can be permanently and the cost of production in the United checked. But the tendency of the system States must ultimately tell what the burden is to increase the wealth of individuals and

amounts to.

corporations at a more rapid rate than the

Finally, the capitalist collects a fourth wealth of the public at large. Capital ac

tax. Every influence, whether we call it tax or not, which increases the cost of production, increases immediately the amount of capital required to produce the same

cumulates rapidly, but it accumulates in fewer hands, and the range of separation between the wealthy and the poor becomes continually wider. Mr. Wells, in his last

result as before. In the United States cap- Report, has collected a great amount of ital has always been deficient, and 7 per evidence to prove that the burden has in cent. per annum even before the war was a fact fallen upon wages, as was to be inferred moderate return for its use. Government from à priori reasoning, and that the purthen intervened as a borrower, and has chasing power of a day's labour in 1868 is practically fixed the minimum of interest considerably less than it was in 1860. But

at between 7 and 8 per cent. This system of taxation compels every employer of capital to use a larger amount in his business than would be required if the system were reformed. The borrower, therefore, is compelled to increase the competition for capital, and to pay higher interest on a larger sum, with the understanding that his industry must perish unless he can compel

hitherto the stress of suffering has fallen most severely on the intermediate class, whose incomes were, to a greater or less extent, fixed. The ordinary expenses of life have nearly doubled in eight years, but in many cases incomes are not greater in paper than they were in 1860 in coin. All liberal professions have felt the shock. The Universities with their instructors were reduced

the consumer to pay not only the addition- to a pitiable condition. The clergy of all al interest but also a certain additional sects found themselves struggling with povprofit in consideration of the increased risk erty hitherto unknown. The great mass of incurred on the increased capital. Nor is lawyers and the bench suffered a similar this all. The currency is a discredited and degradation. Science and literature lanfluctuating medium of exchange, and the guished. The United States Government capitalist charges his increased risk on this in its western surveys could obtain the serscore also to the borrower, who must nec-vices of its botanists and zoologists at 10l. essarily throw off the double risk again on a month in currency, while it paid 15l. to the consumer. Government then intervenes the cook and mule-driver who accompanied and taxes the capitalist on his increased them. We do not now speak of the inhabprofits in order to escape taxing labour, itants of great cities, nor of the few distinand the capitalist quietly counts the increased guished men whose incomes were swelled

tax as so much additional expense, and throws it off upon the borrower, who must either throw it on the consumer or become bankrupt.

The Government seizes, let us say, 20,000,000l. from the public, and gives it to certain favoured citizens who spend a considerable portion of it in hiring labour, creating an artificial demand, and raising the

beyond the average, but of the population at large, especially in the rural districts of the older States, where changes went on in silence, and men, who in old times lived plentifully, now restricted their expenses, eat meat four times a week instead of every day, and said nothing of their economies. The public press seldom pauses to mark such changes as these. They lie underBut in the main, it is true, as Mr. Wells at the same moment depress the standard

neath the surface of society but they indicate disaster to the principle of social equality.

Agriculture, at least in the western States, did not suffer, partly because the introduction of machinery has neutralized the rise in wages, partly because the western farmer is little affected by taxation and almost independent of society; partly, too, because all the harvests except the last have been short, and high prices have been maintained. The natural increase of population keeps pace with the development of new lands which the Government practically gives for nothing to the settler. The West, therefore, exists under exceptional conditions.

abroad to pay for purchases which no tanf nor law can stop.

We will not undertake to predict bow long this process can last. If its results please the American people, England will not complain, for she will not be the principal sufferer in this drunken bout. Foreign nations, carrying out a selfish political policy, will probably find it to their interest that the United States should continue to produce for herself only, and pay her enormous imports in notes bearing practically 8 per cent. interest, the return of which in any large quantity would damage her credit and disorganize her trade; that she should elevate the scale of social expenditure, and

has said, that the rich become richer and the poor poorer; nor is this fact in any way disproved by the corresponding fact that production increases with great rapidity. The system is corrupt, it is an outrage on common sense, it is extravagant beyond belief, it exalts fraud and ruins honesty; but the physical growth of the country is in itself so energetic that misgovernment can at best pervert, but not seriously check it. The labourer can bear a diminution in his wages. The mechanic may be forced to economize and yet live well as compared with his rivals in Europe. A mere failure to increase production so rapidly as it might be increased, is all that can be premeditated; a mere retardation, not a stoppage, of national prosperity. But in the meanwhile all articles of export rise in price until foreign nations will no longer buy, and the country can only send gold and certificates of debt

of the working class; that she should build up an oligarchy resting on corporate and private wealth, and prepare the way for that corruption which, in its own time, will overthrow her institutions. The great responsibility of the new Administration is to itself and not to the world. The best Americans are looking to it with the deepest anxiety, to save the country so far as possible from its dangers by effecting a reform the principles of which we have pointed out; but if the hope is disappointed, even though the country should go on increasing its wealth and power more rapidly than ever, the world will have a right to believe that neither the skill of the Government nor the virtue of American institutions has had any share in the result, except so far as the nation is receiving and exhausting advantages left to it by a past and purer generation.

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From The Spectator, 1 May. MR. SUMNER ON ENGLAND'S OBLIGATIONS

TO THE UNITED STATES.

MR. SUMNER has expounded in the Senate of the United States his conception of the reasons which rendered the late Convention negotiated between Lord Clarendon and Mr. Reverdy Johnson totally unsatis

factory as a mode of settling the liabilities lion with money, ships, arms, and good

much less trepidation, what they did at last in the case of the rams, - namely, strain very decidedly a legal point to prevent a breach of international comity. No sensible person will doubt that it was the insane enthusiasm of our aristocracy and bourgeoisie for the most detestable of causes which really supplied the Southern rebelknown popularly as the Alabama claims. wishes, and daunted our Government in its His speech is, from what we cannot but rather hesitating and tremulous attempt to regard as his very singular point of view, preserve a friendly attitude towards the temperate, dignified, and not wanting in Government of the United States. So statesmanlike grasp of the importance of much we admit without difficulty to Mr. the emergency. What astonishes us is not Sumner. Nay, we go further, and say that the sentiment of his speech, which is manly, had their case been ours, had the upper natural, and patriotic, nor in any consid- crust of the United States expressed its erable degree its practical counsel (to reject hearty sympathy with an Irish rebellion, the Convention), which we can at least raised a loan for it, and sent out privateers fully understand; but the extraordinary under an Irish flag to scour the seas in mixture of strictly sentimental with strictly

search of British commerce - we should in legal considerations which pervades it all probability have declared war with the throughout. If he had simply said that he, like the great majority of American statesmen, considers the circumstances leading to the fitting-out and escape of the Alabama and of many of her consorts less from any

United States, or if deterred from that course by a mere prudent calculation of consequences, still have been thoroughly disinclined to condone the offence and resume cordial international relations with their Government something more than a

legal point of view than as a symptom of the United States, without extracting from

injured individuals to arbitration.

the deliberate unfriendliness of a great part of the British people, and, as a consequence, dry contract to refer the legal claims of though in a less degree, of the British Government, towards the Northern States during the Civil War; - that this unfriendliness was of a character which might well have led to war then, and which may still lead, if not to war, to greedy reprisals on England should we ever be in circumstances to suffer equally severely from a similar policy on the part of the United States,

and that this source of bitterness cannot be removed without a frank apology and expression of regret from England for what

But while we admit all this to Mr. Sumner, we confess that it seems to go a very little way towards explaining his speech. One Government may fairly say to another, - 'The moral damage which your people have inflicted upon us, and to which you have been more or less a party, touches our honour so vitally, goes so far beyond any infraction of law of which we can complain, that we decline to enter into a convention which implies that it is in any sense

has happened, - if this, we say, had been a question of damages. You might as well the drift of Mr. Sumner's speech, we should ask a man of sensitive honour to accept have been disposed to agree with him very damages as reparation for an unretracted heartily. It is perfectly true that we must insult.' Such a line as that is quite intelliascribe to the favour with which the South-gible. But it is not intelligible to say, ern cause was looked upon by an influen- what, in effect, Mr. Sumner does, We tial portion of the English people, that is, ground our claims on a number of extremely of the aristocracy and the middle-class, the questionable and insecure, not to say unsub

confidence with which the South applied to us for their loan, and for the ships and ammunitions of war in which they invested that loan. Had their cause been one as hateful to England as that of Ferdinand of Naples, they would have got little help and no open sympathy: - our most "respectable" shipbuilders would not have undertaken to build their ships, and if by chance

stantial, legal considerations, which we expect you to admit, not on legal grounds, but as a mode of making moral compensation to us for entirely extra-legal blunders and sins.' That seems to us simply unbusiness-like and wholly untenable. So far as the United States make legal claims, let us treat them as legal claims in the strictest sense of the word. And for claims of that

any one of them had done so, our Govern- kind, what can we propose fairer than arbiment would have been supported by public tration by an impartial tribunal? But so opinion in doing much earlier, and with far as the United States complain of our moral attitude, - which they have every we should preface its decision by language reason to do, - let us deal with that quite equivalent to an admission that we were

separately, not affect to mix it up with legal claims, but either settle it, or leave it unsettled, if we cannot settle it, without prejudice to those claims.

The only pretence which Mr. Sumner seems to us to have for his very remarkable mode of mixing

of mixing up the unfriendly animus of our people and press with the legal claims which, if they are tenable, may have been more or less due to that unfriendly animus as their fostering source, is that he has discovered two cases in which a convention, concluded expressly to determine the exact extent of the reparation we pro

in the wrong. To plead guilty before the Court first, and then defend our innocence, is the strangest recommendation ever yet made to an accused person. Yet, as far as we understand Mr. Sumner, that is what he kindly proposes for England; - unless, indeed, he really means that we are not entitled even to submit the legality of our conduct to arbitration at all, but only the amount of the penalty. We agree with Mr. Sumner that the tone of the English Parliament and the uppermost stratum of the English people in the beginning of the Civil War was in the highest degree un

posed to make, was preceded by a general friendly to the United States. But we do apology on the part of the English Govern- not happen to agree with him that there ment for the wrong we had done. But was any clear breach of legal neutrality then, in both these cases the wrong we had committed from beginning to end of the

done was an undoubted and undeniable legal wrong, which we admitted at the outset, - indeed, could not deny, - and therefore, of course, never proposed to submit

war, - though we do believe that there was sufficient negligence in allowing the escape of the Alabama to make that matter a fair case for arbitration. Moreover, we do not

on its merits to the arbitration of any trib- suppose that there is a single eminent unal. It would have been simply impossi- statesman (not even Mr. Bright) or lawyer ble, when we had, by our own admission, in England who would go further than we committed a grave breach of international do in Mr. Sumner's direction, and very few law, to begin our reparation otherwise than who would go so far. Now, what is it, by expressing our regret. When the British frigate Leopard boarded the United gate States' frigate Chesapeake to regain possession of the persons of four British subjects said to be impressed there, the act was so monstrous a breach of international law, that when the matter was settled, it was

then, which Mr. Sumner calmly proposes to us all, even those who, like ourselves, approach him most closely in political bias? Simply this; - to submit our political and legal consciences in the most abject manner to a dogma which not a single man amongst us worth a moment's consideration holds to settled by disavowal, by restitution, and by be true, - to confess a legal guilt of which compensation; and, of course, a solution we are entirely unconscious, and this as a by which Great Britain acknowledged her-condition sine qua non of reconciliation self wholly in the wrong was necessarily with the United States. Was anything so preceded by apology. So, too, of the in- monstrous ever proposed on this earth becursion across the Canadian border into the United States in 1837; - the obvious criticism on that matter being not Mr. Sumner's, one of satisfaction that we apologized and, as we think, even sin, for which the at last, but one of wonder that the apology, people at large were not responsible,

so obviously required, was so long delayed. There was in that affair a real defiance of the independent authority of a peaceful and friendly state, and of course the first condition of reconciliation was to express regret that our people had been betrayed into so indefensible an act. But Mr. Sumner fails to see that in the present case the whole question at issue is simply this, whether we did in any respect whatever violate the slightest rule of international law by our proceedings in the Alabama case? That is the very point to be decided. If it is to be decided by the only fair method in the case of any international dispute, equitable arbitration, it is monstrous to propose that

fore by any man taking the rank of a statesman? He does not ask us to express popular regret for a grave political error,

though the most influential of them were, -but to begin by a frank admission of legal culpability, and this on one of the most important of all points of international law, which might be turned against us tomorrow, in a case where all our sympathies, and all American sympathies too, might happen to be just the other way. He wants us to make an insincere admission, which, by the bye, if it were of any legal value as a precedent at all, would in all probability be first quoted by Spain in support of a peremptory demand for apology from the United States for the advice which the House of Representatives has tendered to the President in relation to

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