Dr. Johnson somewhat cynically says, that
“Mortgaged States, in everlasting debt,
From age to age their grandsires’ wreaths regret.”
This may be true of debts incurred in wars of ambition and conquest; but what citizen of the United States, at the present day, would not, with a willing mind, if it were still necessary, bear his part of the pecuniary burdens of the American Revolution?
It is a well-established law of public credit, that it can be carried to any length to which it is sustained by an efficient system of taxation. So long as provision is made to secure in this way the regular payment of the interest on the sums borrowed, the Government holds the purse-strings of the capitalist, and has nothing to do but to call for whatever amount is needed for the public service. This, however, is the essential condition, and nothing else will, for any length of time, produce the desired result. In the first fervor of a great popular movement, and in confident reliance that effective provision to sustain it will eventually be made, a large loan may be obtained from the banks, from capitalists, or the mass of the people; but this will be a temporary, probably a solitary, effort. No Government can permanently sustain its credit, but by providing the means (independent of credit) to pay the interest on its public debt. To borrow more money in order to pay the interest on that already borrowed is bankruptcy in disguise.
With these general principles established and clearly borne in mind, we perceive the absurdity of the language which has been so freely used abroad and is even sometimes heard at home, since the suspension of specie-payments, that the United States are on the verge of bankruptcy. Let the expenses of the war in which we are now engaged against the “disappointed aspirants” of the South be estimated as high as six hundred millions of dollars. A loan to this amount implies, at the usual rate, the payment of an interest of thirty-six millions, certainly a large amount in addition to the ordinary expenditure of the Government, but not more than a fifth part of the annual interest on the public debt of England,—by no means a formidable percentage, allowing for a short war, on the annual surplus income of the country.
In fact, when we cast our eyes over the continent and contemplate the vast extent of fertile land already brought or capable of being readily brought into cultivation,—the productive agricultural, manufacturing, and commercial investments,—our internal and foreign trade,—our fisheries, and our mining operations,—the rapid increase of labor (the great creative source of wealth) by the growth of our own native population and the steady flow of immigration from abroad,—when we contemplate these things, the draughts which must be made upon the resources of the country in the successful prosecution of the war, great as they are, are really insignificant Let us take a single item, but one which may serve as a fair index of the resources of the loyal States. In the American Circular of Messrs. Hallett & Co. of New York, for the 6th of November last, the value of the tonnage of all kinds annually moved upon the public works (railroads and canals) of the Northern and Middle States is estimated in even figures at $4,620,000,000. This enormous sum, of course, represents only that part of the internal and foreign trade of the country which is moved upon the canals and railroads. All that portion of trade which is not transacted in this way,—all that moves exclusively on the lakes, rivers, and coastwise, without coming in contact with artificial communications,—the retail business of every kind in the large cities, and all that is transported in moderate parcels by animal power in the neighborhood of the places of production, is in addition to this vast amount.
The Secretary of the Treasury, in his patriotic appeal to the country last summer, calculates “the real and personal values, in the States now loyal to the Union, at eleven thousand millions of dollars,” while he remarks that “the yearly surplus earnings of the loyal people are estimated at more than four hundred millions of dollars.” A tax of nine per cent, on this surplus would pay an interest of six per cent, on a loan of six hundred millions. Now in this country, where we are so little accustomed to taxation, such a tax may seem to be a very serious affair; but the man who in times like these, and for objects like those for which we are struggling, is not willing to pay nine per cent—of his surplus earnings, does not deserve to enjoy the blessings of a free government.
It is therefore a gross exaggeration to say that the country is bankrupt, or on the verge of bankruptcy. Nothing more is true than that the Government of the country—the legislative power—has not as yet shown the sagacity and vigor to apply a moderate portion of its abundant resources to the preservation of all we hold dear. The wealth is here,—not merely what is locked up in the vaults of the banks, (for this, though ample for all the purposes of these institutions, is but a very small portion of the wealth of the country, not much over one-half of the annual surplus earnings,) but the entire accumulations of town and country, the whole vast aggregate of the property having a marketable value or capable of being applied in kind or by exchange for its equivalent to the public service. All this fund belongs to the people, to be levied upon and appropriated to the service of the country by the people’s representatives and servants. It belongs only sub modo to those who are commonly deemed its owners. They are the stewards to whom Providence has confided it, subject to the condition, in time of need, of being employed, under equitable and equal laws, to defend the life of the country. And when we consider how small a portion of it is required to answer the demands of the public service, we cannot but be amazed at the language of despondency which is sometimes uttered at the state of the public finances. We call the individual man of wealth a miser, who hoards his income, instead of spending a portion of it in deeds of charity and public spirit, or even on his own comforts and those of his family. This expressive use of that word, says Bishop South, is peculiar to the English language. Although the word is Latin, we have improved on the Romans, in the bitter sarcasm of this application. But a Government deserves the same stigma or worse, which, with the exuberant wealth of a loyal people at its command, wants the moral courage to apply a moderate portion of it to obtain ample means for feeding, clothing, and arming the brave men who, on the land and the water, are risking their lives in the public service.
We speak of “the moral courage” to establish an efficient system of taxation, more in deference to the traditionary unpopularity of the tax-gatherer than because, in the present state of affairs, there is any just cause to doubt the willingness of the people to make the necessary sacrifices for the support of the Government and the defence of the country. In peaceful times and in an ordinary state of affairs, it may be admitted that the tax-gatherer is an unwelcome visitant. Mr. Jefferson relied upon him in 1799 to bring about a change of parties and administrations. But the country was then poor, the parties equally divided, and the political issues matters of temper and theory, on which men delight to differ and to argue, rather than those stern realities in which, at the present time, the very being of the State is wrapt up. Accordingly, it is a most remarkable fact at the present day, and one certainly without example in this country, perhaps in any country, that the unanimous desire of the people is for taxation, adequate, efficient taxation. Although the emergencies of the service, and the large amounts which it requires, are daily commented on by the public journals, and are perfectly well understood, not a voice has been uttered on the subject which does not call for taxation. The Secretary of the Treasury is censured, the Committee of Ways and Means rebuked, the patriotism of Congress called in question, because the absolute necessity for heavy taxation is not urged with sufficient warmth by the Executive, and the requisite laws for laying the tax are delayed in their introduction and passage. And reason good; for, while the legislation required to impose a tax lingers, the whole mass of the country’s property is incurring the fearful peril of a prostration of the public credit.