MANUFACTURES OF THE UNITED STATES. 3 со interested in increasing the taxation of the government; for the higher the taxes are, if laid on the principle of protecting their products, the better for them. Suppose the question were submitted to the cotton manufacturers, or the iron manufacturers, whether the duties on cotton and iron products should be increased or diminished, does any one doubt what their answer would be? So far as they are concerned, they consider high duties as bounties to them, and they would be in favor of them, if the revenues thereby derived were thrown into the sea. Under the present system of taxation by duties on imports, this great class are favorable to high taxation. To form some idea of the stupendous magnitude of this manufacturing interest, take the following statement, showing the value of the products of manufacture of the United States for the year 1850.-(Financial Report, Executive Document, 3d Sess. 34th Congress, vol. 2, 1856-57, page 166.) Statement showing the manufactures of the United States and Territories for the year 1850. Manufactures of cotton.. Manufactures of iron castings.. Manufactures of iron wrought. Product of the fisheries.. Product of salt manufactures.. Manufactures produced in families.. All other manufactures.... Total value of products of manufactures... $61,869,184 00 43,207,545 00 12,748,727 00 25,108,155 00 22,628,771 00 18,213,681 00 10,000,182 00 2,222,745 00 27,493,644 00 832,103,265 00 .$1,055,595,899 00 This reference to the products of manufactures may give us some idea of the immense capital engaged in manufactures. This capital may be estimated at $500,000,000. This vast capital is all more or less interested in high duties -that is, in high taxation. The influence of the manufacturing class on taxation is not merely in proportion to the capital they represent, as compared with the capital engaged in other industrial pursuits; for, from very obvious reasons, some of which have already been incidently alluded to, it is far beyond this ratio. As an illustration of this influence, we would refer to the facts connected with the modification of the tariff during the last Congress. It is notorious that the only great interest represented here at that time by outside agents was the manufacturing interest. One of the first steps towards an economical administration of the government is to place that great and active interest permanently on the side of low taxation, and the only effectual mode of doing this is direct taxation; which necessarily implies the total abandonment of protective duties, which are but another name for bounties. When you have put all the great interests of capital on the side of low taxes, you have taken one of the most decided steps that you can possibly take in favor of low taxation, which is the necessary antecedent of economy. The next prominent evil of the present system of taxation, is that, by its indirect operation, the people are ignorant of what they pay-they are ignorant of what they pay to the government, and equally ignorant of what they pay to the protected interests in the shape of bounties. If the object be to obtain from the people the largest amount possible without arousing them, then the indirect system-the present system-is the best; but if the object be only to obtain from them the least amount that will suffice for the just wants of the government, then the direct system of taxation is the best. The happy ignorance of the people of the United States as to the amount of taxes they are paying is one great cause of their remaining so passive under the enormous increase of our expenditures which has been going on for years. If we desire an economical government, we must be candid with the people, and let each one know exactly what he pays. The people, ignorant of how much tax they are paying in the enhanced price of commodities, will tolerate an expenditure of $100,000,000 much more patiently than one of $50,000,000, when each one has to pay his ascertained share directly from his own pocket. Économy here must be preceded by vigilance among the constituency; as long as the constituency are indifferent on this subject, the representatives will be carried along unresisting in the vortex of extravagance. Another objection to the present system is the large expenditure necessary in the present mode of collecting the revenue, in paying the army of employés engaged in the present revenue service, in building costly structures in various parts of the United States, and in maintaining custom-houses which do not pay their own expenses. Upon this point we would call attention to the following facts: The direct cost of collecting the revenue from customs for the last fiscal year, ending June 30, 1857, $64,171,034 05, was $3,552,359 50, employing three thousand and eighty-eight officers. This is independent of the cost of the custom-houses and revenue cutters, the interest upon which investment would largely increase this sum. To see further the operation of the present system, take the following statement: OUR CUSTOM-HOUSE SYSTEM. 5 Amount of revenue collected, and expenditures at certain custom-houses, for the fiscal year ending June 30, 1857. The total net revenue from the following eighteen customhouses for last fiscal year, viz: Belfast, Bath, Bangor, Portland, Waldoboro', Wiscasset, Burlington, Barnstable, Gloucester, Bristol, Providence, Plattsburg, Wilmington, Del., Pittsburg, Cincinnati, Sandusky, Toledo, and San Francisco, was $1,769,163 43. The total cost of the public buildings in those places for custom-houses, post offices, and court-rooms finished since 1850, is $2,443,776 94. The total expenditure incurred for the last fiscal year in collecting said net income of $1,769,163 43 was $567,839 02. Another defect of the present system is the immense patronage it gives to the Federal Government. This army of officers might by each State paying over its assessed quota, be almost entirely dispensed with. Instead of three thousand and eightyeight employés now in the revenue system, we need, under a different system, have no more than one treasurer in each State. Another prominent defect of the present system is its necessary inequality; for no tariff can be constructed that does not, in a greater or less degree, operate as a bounty on one portion of the community and as a double tax on the great class of consumers. It requires no argument to prove that in a republic there should be equality in taxation; the Constitution attempts to accomplish this purpose in declaring that "all duties, imposts, and excises, shall be uniform throughout the United States." But every tariff, in a greater or less degree, must necessarily violate the spirit of this provision. Another defect of the present system is, that it necessarily cripples the productive energies of the country by in terposing obstacles to the free exchange of products. It is difficult to estimate the extent of loss resulting from this cause; but there can be no doubt it amounts to a vast sum. This tax on exchanges is a great obstacle to the highest development of our industrial resources. To form some idea of the loss occasioned to the country by the obstacles interposed to free exchanges by the tariff system, take the following esti. mate: In 1856 the cotton, woolen, and iron manufactures and sugar produced and consumed in the United States were enhanced in price by the tariff $39,975,985. This was the amount of the indirect tax paid to the home producers of the above articles. In 1846 the Secretary of the Treasury estimated the indirect tax then paid on the enhanced prices of home products, caused by the tariff, at $50,000,000. To be within moderate limits, we have reduced the estimate to $30,000,000. In 1832 it was estimated that the amount of indirect tax paid up to that time to the home producers of protected products was $240,000,000. Starting with that estimate, and putting the amount to this indirect tax down to only $30,000,000 per annum since that time, we have, in round numbers, up to the present time, as the total amount of the indirect tax, $1,000,000,000, which the consumers of the United States have had to pay for the luxury of persisting in an industrial blunder. As regards the navigation laws, we do not think it necessary to go into a detailed examination of their various provisions, especially as a bill has been reported to the House, and is now before it, from one of the standing committees, for the purpose of perfecting the details of the present code of navigation laws. In general terms, however, we would say that the present regulations are unnecessarily complex, and might, with great advantage, be simplified. There are, however, several defects in principle, as we conceive, in the navigation laws, to which we propose to call attention; those defects are as follows: 1. The requisition that American vessels engaged in the coasting trade should pay 50 cents per ton, unless "threefourths of the crew are American citizens, then only 6 cents per ton;" and the further provision that American vessels, entering from foreign ports, to pay 50 cents per ton unless "the officers and two-thirds of the crew are American citizens.' 2. The exclusion of foreign built vessels, though owned by American citizens, from engaging, with entire equality, in the coasting and other trade of the United States. 3. The entire exclusion of foreign vessels, owned by foreigners, from the coasting trade. The object of the requisition that a certain proportion of the crews of American vessels should be Americans, was, no doubt, intended to accomplish a political purpose, eminently proper in itself, to provide an American marine in time of war. We find no fault with the motive, but we think this provision, which operates frequently as a great practical inconvenience, is unnecessary. The occupation of a sea-faring life should be left, like all other employments, to the inclinations or interests of the people. If it is to the interests of our population that they should go to sea, they will do so; otherwise, we should not endeavor to compel them. There is no danger that we should suffer in case of war from repealing this provision. That patriotic class of our citizens who have, on all occasions, honorably sustained the glory of our flag on the sea, do not take their inspiration from this provision. We have no fear but that, with or without this provision, there will be always the material out of which to organize a warlike marine, necessary to the wants of the country, under the most trying circumstances that can arise. Even with this provision a large per centage, 45 or 50 per cent., of our sea-faring men are foreigners. This provision, then, operates only as an unnecessary burden on the country during peace, without promising any adequate compensating result in time of war. Further, it may admit of grave consideration whether we would not strengthen ourselves, in case of war, by encouraging foreign sailors to come into our marine, as, once entered, they become, for all practical purposes, American sailors. Advancing firmly in the line of industrial freedom, and with a view of throwing off every possible shackle on the idustrial energies of the country, we think this provision should be rescinded. As regards the second defect alluded to in the law, by which foreign built vessels, though owned by American citizens, are not admitted to entire equality, unless purchased after shipwreck, and repaired to the extent of three-fourths of their cost, we consider this rests upon a totally indefensible principle. It is giving to American ship-builders a perfect monopoly. We can see no ground of justice upon which this monopoly can rest. Every American citizen ought to have the privilege to buy ships wherever he can buy them to the best advantage. To compel him to buy from American shipbuilders at an enhanced price is, to the extent of that enhanced price, to confiscate his property, and transfer it to another. Such a monopoly is utterly inconsistent with the spirit of our institutions. Our ship-builders have a right to equality; they have no right to exclusive privileges. As a question of expediency, it seems equally indefensible. Either |