If from these returns we deduct the earnings of the Post-Office Department, which are not included in the Commission's estimate of revenue for the United States, that estimate will exceed the returns of revenue for France or the United Kingdom by more than thirty millions, although the expenses of each of these countries are at least fifty millions more than the computed expenses of our own. It is obvious, therefore, from the Report of the Commission, that we may dispense with the fifty-nine millions from income tax and the duties on transportation, and still have a margin of more than thirty millions to cover contingencies and provide for the gradual reduction of the debt. Such a victory in finance achieved the first year after the war would give us a second great national triumph.

The system proposed by the Commission is entitled to the most favorable consideration. The taxes levied during the war were multifarious in their character. Although effective in producing revenue, they were imposed without discrimination, and they bear heavily alike both on producer and consumer, checking the industry of the one and swelling unduly the expenditures of the other. The plan of the Commission strikes the handcuffs from industry, lessens the expenses of collection, enables our artisan to compete with the foreigner, and, as most of the manufactures of the country are consumed at home, consequently reduces the cost of living. It seems from the Report of the Commission, that their leading idea is to simplify the system and reduce the number of taxes; to shift them from the producer to the consumer, and thus stimulate the creation of wealth; to diminish charges, and at the same time lighten the weight of the impost as it falls on the consumer. Another leading idea is to transfer a portion of our burdens to the foreign consumers of cotton, and at the same time stimulate our manufactures, and the production of cotton, by a remission of the tax on cloth exported; while yet another part of their plan was to take from the illicit trader and give to the public coffers the profit he now realizes upon spirits, and to restore alcohol to the arts.

Let us give to each of these measures the attention it deserves; and inquire if we may not take at once the steps, which the Commission defer for the present, toward the discontinuance of all charges upon transportation and incomes. In recommending the entire removal of taxes on production as the first measure to be adopted, the Commissioners advise: "That the capital stock of the country in the interval between 1850 and 1860, deducting the value of the slaves, increased at the rate of 158 per cent, or from $5,533,000 to $14,282,000; and that, if a development in any degree approximating to the past can be maintained and continued, then the extinguishment of the national debt in a comparatively brief period becomes a matter of no uncertainty. To secure this development, both by removing the shackles from industry, and by facilitating the means of rapid and cheap intercommunication between the different sections of the country, is to effect at the same time a solution of all the financial difficulties that now press upon us."

The policy of the Commission is the speedy abolition or reduction of all taxes which tend to check development. This policy is eminently wise and statesman-like; for while it removes some of our most onerous burdens, it gives a stimulus to the creation of wealth that must annually alleviate our taxes, and is entitled to the approval of an enlightened nation.

The second great measure of the Commission is to increase to five cents the tax on cotton, which has, since the close of our last financial year, begun to aid our revenue. The soil, climate, and seasons of our Southern States are peculiarly adapted to the culture of cotton. In India the fields are parched by the extreme heats of summer, and the staple shortened; in Algiers, the rains of autumn, which favor the young wheat, prevent the opening of the cotton-balls; but in the cotton States of the South, the moisture of the spring, the heats and showers of summer, and the dry weather and late frosts of autumn, all contribute to the full development of the cotton-plant; and the yield is twice or three times as great as in the cotton districts of the East. The staple, too, is much more valuable, and the yield and the quality of the staple are both improved by the application of guano. In 1859 the yield of the United States rose to 2,080,000,000 pounds, while the consumption of the civilized world was as follows:—

In Great Britain,1,050,000,000lbs.
On the Continent,700,000,000"
In the United States,400,000,000"
——————
Total,2,150,000,000lbs.

During the five years of war, the consumption was reduced more than one half by the deficiency; Great Britain was compelled to pay twice the usual amount for half the usual quantity, and cotton rose from ten cents to sixty cents in gold. The world was ransacked for cotton, and the whole addition made to the supply (chiefly from India and Egypt) did not exceed the increase of three years in the United States previous to the war. The Revenue Commission have made a very elaborate report upon this subject, and base their conclusions upon the advice and opinions of the chief manufacturers of New England, who concur in the opinion that the tax will be chiefly paid by the foreign consumer; that it will not give an undue stimulus to the culture of cotton abroad; that Japan and China have, since the decline of cotton to twenty pence in England, ceased to ship it, and are drawing upon Surat and Bombay; that Egypt, our chief rival, has nearly or quite reached her full capacity of production, while India makes little progress.

The late Confederacy, by imposing an export duty of twenty cents per pound, to be paid in gold; France, by her export duty on linen and cotton rags and skins of animals; Russia, by various export duties; Portugal, by her duties on wine exported; Great Britain, by her export duties, imposed in India, on gunny-cloth, linseed, jute, saltpetre, and opium; and Holland, by her monopoly and export duties on the coffee of Java,—give precedents for a tax on cotton. The United States are prohibited by the Constitution from levying an export duty, but may nevertheless impose an internal tax which will cling to the cotton both abroad and at home. A tax of five cents a pound will add but one cent to the cost of a yard of calico; and with a crop of 2,000,000,000 pounds, like that of 1859, will yield a revenue of $100,000,000, although the Commission do not anticipate more than half that revenue for a few years to come. It seems but reasonable that King Cotton, who made the war, should aid in defraying its expenses; and it is also just that England and France, his chief allies, should pay their tribute for the suppression of the revolt they did so much to encourage. The planters and free blacks of the South have sufficient incentives to the culture of cotton in the high prices it must bear for years to come; and the Commission have very wisely recommended a remission of the tax on all cotton cloth or yarn exported, which will give a stimulus to manufactures both at the South and the North, and enable our merchants to meet those of Great Britain in successful competition in all parts of the globe. The cotton tax, as a substitute for taxes on sales and manufactures, will meet the cordial support of our countrymen; and, if it oppose a slight check to production, they have already learned that half a crop gives more dollars than a whole one.

SPIRITS.

Another change of great importance recommended by the Commission, both in their general Report, and in a special report devoted to this subject, is a reduction of the duty on spirits from two dollars to one dollar per gallon as a revenue measure, the higher duty having proved an utter failure. For some months past the average quantity that has monthly paid duty has been less than half a million gallons, or at the rate of six millions of gallons per year, while the entire annual product, by the census of 1860, exceeded ninety-two millions of gallons, and, at the customary rate of increase, would have amounted to one hundred and twenty millions of gallons, or ten millions a month, in place of half a million in 1866. It has been ascertained that in 1860 more than half the annual production was consumed in the arts. As alcohol it was used for ether, spirit-lamps, camphene, and burning-fluid; by apothecaries for tinctures and medicinal preparations; by hair-dressers for lotions; and it was also consumed in many manufactures. The duty has carried alcohol to five dollars per gallon, and nearly stopped its use in the arts, while it has not stopped the use of spirits as a beverage. It has drawn a revenue from the pockets of the people, and transferred it from the government to the illicit trader. While the duty ranged from twenty to sixty cents per gallon, the amount assessed was from six to seven million gallons per month; but the returns nearly ceased with the advance of duty two years since. Efforts have been made to sustain the present duty by reference to the practice of Great Britain, where a duty of $2.40 is imposed upon the imperial gallon; but the imperial gallon is more than twenty per cent larger than the wine gallon of America. The average prime cost of good spirits there being sixty cents a gallon, while it has been but twenty cents in the West, the percentage of the British duty is but 400 per cent, while the duty of the United States is 1000 per cent, or a rate 150 per cent above the rate abroad. Great Britain, in her compact territory, has employed 7,200 men in the preventive service, and 66 cruisers to check the evasions of her duties on spirits and tobacco; and it is estimated by good judges that a large part of the spirits, and more than half the tobacco, consumed in England escape the duty. Several thousand seizures are made annually, and it has been testified before Parliament that not one evasion in sixteen is detected. If this be so in Great Britain, it is not surprising that the government has failed, in this country, with its sparse population, to collect a duty of 1000 per cent, or that the experiment has cost the nation more than fifty millions. Such excessive duties may well be styled over-taxation, and tend to demoralize and corrupt our revenue officers, to encourage fraud, and to enrich illicit traders. The Commission believe that the reduction of the duty will restore alcohol to the arts, diminish fraud, and give us a revenue of at least $40,000,000 annually,—a sum nearly equal to the proceeds of the income tax.