voy, the Austrians entered Mantua, whence the Duke promptly fled. The Austrians marched into Mantua on the 29th of February, that being leap-year, and Ferdinand came back no more. Indeed, trusting in false hopes of restoration held out to him by Venice and France, he died on the 5th of the July following, at Padua, it was said by poison, but more probably of sin and sorrow. So ended Ducal Mantua.

The Austrians held the city till 1797. The French Revolution took it and kept it till 1799, and then left it to the Austrians for two years. Then the Cisalpine Republic possessed it till 1802; and then it was made part of the Kingdom of Italy, and so continued twelve years; after which it fell again to Austria. In 1848, there was a revolution, and the Austrian soldiers stole the precious silver case that held the phial of the true blood. Austria still keeps the place, and Mantua the fortress is stronger than ever before. As for Mantua the people, it is dead.

ART. IV. 1. The Currency Question. Letters to the HonorIV.-1. able Schuyler Colfax. By HENRY C. CAREY. Philadelphia. 1865.

2. Report of the Comptroller of the Currency for 1864. 3. Remarks on Specie Reserves and Bank Deposits. By FRANCIS BOWEN. (Memoirs of the American Academy, Vol. VIII.)

THE Rebellion has left us with an enormous debt and an excessively complicated currency. The former must be paid, the latter regulated. The two are so intimately connected, however, that it is difficult entirely to separate the consideration of them. At present we regulate the currency only by contracting or changing the form of debts; and in future its regulation must be affected by the mode of paying the debt. But there are two propositions respecting the debt which can be sustained independently of considerations of the currency. They are,

That it ought to be discharged as rapidly as possible. That it can be discharged much more rapidly than is generally supposed.

The tendency toward a change in our views of the merits and demerits of a national debt is a most discouraging feature of public sentiment. Before the late war we very correctly and justly looked upon a national debt as a peculiarly undemocratic institution, a device of prodigal, reckless, and ambitious rulers to cheat their people out of taxes which they would not pay directly, and to throw upon the labor of the future. burdens which ought to be borne by the capital of the present. We flattered ourselves that the idea of a permanent debt would never be transplanted to American soil. Now, however, attempts are being made in many quarters to seduce us into the belief that it has advantages to compensate for its evils. Some tell us that it is to be a bond of union, and that, had we been saddled with a debt of three thousand millions when Abraham Lincoln was elected President, the South would never have seceded, because they would have been unwilling to lose their portion of the debt. A more dangerous delusion could not be imposed on a nation. In reasoning of this class, the fact that all the money received by the public creditors must be raised by taxation is completely ignored. True, the taxes, being mostly indirect, may be less felt than if they were drawn directly from the pockets of those who contribute them; but this is no sufficient reason why they should be left entirely out of consideration.

There is, moreover, a very cogent reason why they should be taken into consideration. Suppose a heavy national debt had been incurred in 1850, and that the South held as much of that debt as it paid taxes. Before 1855 the improvident people of that section would have sold out almost their entire share of the debt to the more frugal and industrious North; and the only inducement the debt would then offer them to preserve the Union would have been the privilege of paying an annual tax of several millions of dollars to the people of another section!

The attention which has recently been paid to the project for paying off the national debt by subscription has at least had the

effect of bringing the public mind to perceive the abstract possibility of paying it off at one effort. The project is indeed chimerical, but only because it makes the amount to be paid by each individual dependent on his own judgment, instead of that of the community. Levy a direct tax to the entire amount of the debt, and the debt will, in a great measure, be the means of paying itself off. The total amount of the tax will, of course, be equal to the total amount of the debt. If the debt happened to be divided among the community in proportion to the tax to be levied, so that every man should find himself possessed of government securities to the entire amount of his tax, he would simply have to give these securities in payment of his tax. He would then be no poorer than before; because all that he lost in government debt he would be saved in future taxes.

Although the debt is not divided among the community in this proportion, that is, in proportion to their ability to pay taxes for its extinction, yet the number who own enough of the debt to pay their tax out of it is so great, that it might be paid off by a single direct tax with far less real distress or difficulty than might be anticipated. A very important consideration is, that if paid off in this way different classes of the community would not pay in the same proportion that they actually do pay by the plan of gradual extinction. When the revenue to pay the debt is raised by indirect taxation, each individual pays in proportion to his consumption, during a long series of years, of those products of labor which are taxed. But if the debt is paid off by direct assessment, each individual must contribute in proportion to his present ability to command a considerable sum. Compare, for instance, the case of a capitalist worth fifty thousand dollars, and living entirely on the interest of his money, with that of a professional man who earns three thousand dollars per annum. Their income being equal, if their habits are similar they will contribute equally to the gradual extinction of the debt. But if they are called upon for a sudden assessment to meet a temporary emergency, the capitalist can, without serious injury to his wealth, part with a sum which it would be impossible for the professional man to raise. If the government is engaged in war, and must have the money, the possessor of capital will naturally

favor the plan of raising the money by loans, because he will then have refunded to him, from taxes levied on the producing classes, the money which he would otherwise have to pay into the treasury as a special war tax. But it will be for the interest of the professional man, or the laborer, whose annual consumption of the products of labor exceeds his accumulated capital, that the war expenses be raised by taxation; because, although his share of the tax may prove burdensome, it will amount to much less than the future indirect taxes which he would otherwise have to contribute to the extinction of the debt.

Which of these two methods of raising money is the more just and expedient, we shall not now pretend absolutely to decide. The question is an extremely complex one, and the two sides of it can hardly be weighed in the same balance. It is, however, suggested, –

That a great, sudden, and temporary expenses like that of our late war should, in great part, be distributed in proportion to the present ability of individuals to sustain it, this ability being fixed by each man's accumulated wealth, income, and profession; in other words, the money should be raised in great part by direct taxation.

And that the regular and permanent expenses, whether to carry on the government or to pay the debt, should be raised by taxes on articles of consumption.

But, granting that an assessment of one third of the debt, (say one thousand millions of dollars,) in proportion to the present ability of each individual to contribute, would be an equitable one, the sum required might certainly be paid off. In addition to the indirect taxes now levied, the government might, without injury to the pecuniary interests of the country, levy two annual direct taxes of five hundred millions each, provided that government indebtedness of every form should be received in payment of the tax.

It is true that, by this plan, the South would be relieved of some portion—perhaps nearly half of that share of the debt she will otherwise be compelled to pay. But the inevitable effect of a policy which should throw the full share on her would be to give the majority of the future Southern voters a direct interest in the destruction or dishonor of the government;

so that it is a serious question whether the advantage which we of the North should gain by waiting till the South is able to pay her entire share will not be more than compensated by the dangers to which such a course would expose us.

One advantage of an assessment such as is here suggested is, that it would, for a time at least, stop the export of our securities. Instead of selling them at seventy cents on the dollar, individuals would save them to pay their assessments, and in consequence their value at home would speedily approach that of gold. The complacency with which the public look upon the export of our bonds by hundreds of millions, as if they were the products of our industry, is truly remarkable, inconsistent as it is with the economical opinions entertained by the majority in the Northeastern States. It can be justified only by carrying the principles of free trade beyond every limit assigned by common sense. Allusion has already been made to the two opposing popular fallacies respecting a national debt;—the one, that it is a great advantage, because it is capital, and a source of strength; the other, that it is a great evil, owing to the taxes which must be levied to pay it. When the community which pays the taxes is the same which holds the debt, the latter is neither a source of great evil nor of great advantage, so long as it is kept within moderate limits. But when the debt is held by one community, and the taxes are paid by another, the obligation is then an unmitigated evil. The two communities stand toward each other in the relation of debtor and creditor, just as if they were two individuals. To say that it is for the good of the debtor community that it be suffered to run in debt as far as its creditors will trust it, is no more true than would be a similar remark about an individual. A young rake, who has come into possession of a fortune, may spend it all in a single year; but few will argue that a friend who should induce him to change his habits to those of temperance, industry, and frugality, would do him an evil.

It is not denied that running in debt may frequently be advantageous. If a nation or an individual incurs a debt for something which is to be a source of wealth and power, so that, after he pays it, he will be richer than if it had never been incurred, it is well. Therefore, before we can decide whether