REVENUE AND EXPENDITURE.

IN examining the financial position of the United States, the first and most striking feature is the comparatively small amount of the ordinary national expenditure. Whilst the expenditure of Great Britain and Ireland, in 1860, amounted to upwards of 68,000,000l. the expenditure of the United States, in that year, was only 15,500,000l.; and this amount included a payment of about $14,000,000, or (say) 2,800,000l., on account of the principal of the Public Debt then owing by the nation. The entire interest of the public debt at this time amounted to $3,144,620, or (say) 650,000l.; an amount which shows a very limited liability on account of the nation.

The items of the expenditure of the United States in 1860 are shown in the following table :

In proportion to population, the United States, in 1860, had, I apprehend, the smallest expenditure and the smallest national debt of any country in the world. Let us look at the expenditure and liabilities of the greater European nations.

France

Great Britain...

Italy

37,000,000 82,620,301 30,000,000 69,502,289 802,000,000 (1862) 22,000,000 38,973,896 200,000,000

389,000,000

It will be seen that the United States, with a population of nearly 31,000,000, had a much smaller expenditure than any of these, whilst her debt was little more than nominal.

This contrast is very striking, if we regard it only as it relates to the population. But if we come to look at the expenditure of America in relation to the extent of her territory, the abundance and variety of her products, the value of her mineral resources, the industry of her popu lation, her manufactures, her commerce, and the accumulated and rapidly-increasing wealth of her people, the contrast presented is even more remarkable. For, with the exception of Great Britain, no nation approaches the United States in any one of these respects; and yet every one of the nations, with less resources, had to bear, up to 1860, a heavier burden of expenditure.

The whole revenue of the United States, in 1860, was raised from Customs duties and sales of land. For a long series of previous years there can scarcely have been said to have been any direct internal taxation for national purposes in America. At the outbreak of the war of 1812, the expenditure of the United States was only $13,500,000, or 2,700,000l. a year, the whole of which was met by light and easy Customs duties. The war of 1812 raised the expenditure from $13,000,000, to $22,000,000, $39,000,000, and $48,000,000; and direct taxes were then obliged to be levied. But about the year 1818, a surplus, amounting, I believe, to nearly $40,000,000 dollars, being found in the Exchequer, the burden of direct taxation was removed, and the internal taxes became of merely nominal amount up to 1836, when they ceased entirely. In addition, therefore, to having the smallest proportionate expenditure of any nation, the people of the United States, during the

greatest part of the present century, have enjoyed the remarkable advantage of being the most lightly taxed people of the world. If we except the enhanced prices of certain classes of manufactures, caused by Customs duties, imposed for the purpose of protection, the people of the United States may be said to have, practically, paid no taxes for national objects.

But the breaking out of the Civil War, in 1861, altered the whole condition of the expenditure and revenue of the United States. The total expenditure, which was $77,000,000 in 1860, rose to 85,000,000 in 1861, to to $571,000,000 in 1862, to $715,000,000 in 1863, and to no less than $1,897,000,000 in 1865; or from 15,500,000l. to nearly 380,000,000l. in five years. The bulk of this enormous expenditure went for purposes of Out of the $1,897,000,000, the army and navy absorbed $1,153,000,000, or nearly two-thirds of the whole. The interest on the debt rose from $3,000,000 in 1860 to $77,000,000 in 1864: or to as much as the sum-total of the national expenditure five years previous.

war.

To meet this large expenditure, not only were the Customs duties largely enhanced, but direct and internal taxes of large amounts were levied, and largely augmented in each successive year. They produced as follows:

PRODUCE OF DIRECT TAXATION IN AMERICA,

Thus, upwards of 42,000,000l. sterling was levied in the form of direct internal taxation during the last year of the war.

I think it is worth observing what the Commissioner of Internal Revenue says in his last report upon this levy of taxation :

"It is a matter of sincere congratulation that, thus far, the people of this country have so patiently borne the burden which has been put upon them, and have so freely contributed of their substance to fill the national treasury. With few exceptions the demand of the tax-collector has been met promptly and willingly. And when it is recollected that the present generation only know by tradition, or by reference to obsolete statutes, that taxes have ever been imposed in this country upon articles of their own manufacture, and the objects of internal traffic, or upon the various crafts or professions in which they are employed; and when, too, it is considered that the revenue thus collected for the single year ending June 30th, 1865, amounts to a sum nearly or quite equal to the receipts of this Government from whatever sources, except loans and treasury notes, from its organization to the war of 1812; and when it is further considered that this amount was contributed at a time when the commercial marine of the country had been nearly destroyed, and more than a million of hardy men were withdrawn from the productive pursuits of life, we may not only be justly proud that the material strength has been fully equal to the burden imposed, but that it has been borne so quietly and so willingly."

Even in the darkest hours of the war, there appears to have been no shirking amongst the people of the North. They were prepared to submit to any outlay-to any burden of taxation possible to be borne-in order to bring the war to a conclusion, and to preserve the Union. Estimates were made by well-informed statists, that, even should the Union not be preserved, and even should the Southern States succeed in forming a separate Confe