North America Volume II Part 12

I have been told that we in England have occasionally fallen into the error of attributing to the Supreme Court at Washington a quasi political power which it does not possess. This court can give no opinion to any department of the Government, nor can it decide upon or influence any subject that has not come before it as a regularly litigated case in law. Though especially founded by the const.i.tution, it has no peculiar power under the const.i.tution, and stands in no peculiar relation either to that or to Acts of Congress. It has no other power to decide on the const.i.tutional legality of an act of Congress or an act of a State legislature or of a public officer than every court, State and national, high and low, possesses and is bound to exercise. It is simply the national court of last appeal.

In the different States such tribunals have been established as each State by its const.i.tution and legislation has seen fit to adopt. The States are entirely free on this point. The usual course is to have one Supreme Court, sometimes called by that name, sometimes the Court of Appeals, and sometimes the Court of Errors. Then they have such especial courts as their convenience may dictate. The State jurisprudence includes all causes not expressly or by necessary implication secured to the national courts. The tribunals of the States have exclusive control over domestic relations, religion, education, the tenure and descent of land, the inheritance of property, police regulations, munic.i.p.al economy, and all matters of internal trade. In this category of course come the relations of husband and wife, parent and child, master and servant, owner and slave, guardian and ward, tradesman and apprentice. So also do all police and criminal regulations not external in their character,--highways, railroads, ca.n.a.ls, schools, colleges, the relief of paupers, and those thousand other affairs of the world by which men are daily surrounded in their own homes and their own districts. As to such subjects Congress can make no law, and over them Congress and the national tribunals have no jurisdiction.

Congress cannot say that a man shall be hung for murder in New York; nor if a man be condemned to be hung in New York can the President pardon him. The legislature of New York must say whether or no hanging shall be the punishment adjudged to murder in that State; and the Governor of the State of New York must p.r.o.nounce the man's pardon,--if it be that he is to be pardoned. But Congress must decide whether or no a man shall be hung for murder committed on the high seas, or in the national forts or a.r.s.enals; and in such a case it is for the President to give or to refuse the pardon.

The judges of the States are appointed as the const.i.tution or the laws of each State may direct in that matter. The appointments, I think, in all the old States were formerly vested in the Governor. In some States such is still the case. In some, if I am not mistaken, the nomination is now made, directly, by the legislature. But in most of the States the power of appointing has been claimed by the people, and the judges are voted in by popular election, just as the President of the Union and the Governors of the different States are voted in. There has for some years been a growing tendency in this direction, and the people in most of the States have claimed the power;--or rather the power has been given to the people by politicians who have wished to get into their hands in this way the patronage of the courts. But now, at the present moment, there is arising a strong feeling of the inexpediency of appointing judges in such a manner. An antidemocratic bias is taking possession of men's minds, causing a reaction against that tendency to universal suffrage in everything which prevailed before the war began. As to this matter of the mode of appointing judges, I have heard but one opinion expressed; and I am inclined to think that a change will be made in one State after another, as the const.i.tutions of the different States are revised. Such revisions take place generally at periods of about twenty-five years' duration. If, therefore, it be acknowledged that the system be bad, the error can be soon corrected.

Nor is this mode of appointment the only evil that has been adopted in the State judicatures. The judges in most of the States are not appointed for life, nor even during good behaviour. They enter their places for a certain term of years, varying from fifteen down, I believe, to seven. I do not know whether any are appointed for a term of less than seven years. When they go out they have no pensions; and as a lawyer who has been on the bench for seven years can hardly recall his practice, and find himself at once in receipt of his old professional income, it may easily be imagined how great will be the judge's anxiety to retain his position on the bench. This he can do only by the universal suffrages of the people, by political popularity, and a general standing of that nature which enables a man to come forth as the favourite candidate of the lower orders. This may or may not be well when the place sought for is one of political power,--when the duties required are political in all their bearings.

But no one can think it well when the place sought for is a judge's seat on the bench;--when the duties required are solely judicial.

Whatever hitherto may have been the conduct of the judges in the courts of the different States, whether or no impurity has yet crept in, and the sanct.i.ty of justice has yet been outraged, no one can doubt the tendency of such an arrangement. At present even a few visits to the courts const.i.tuted in this manner will convince an observer that the judges on the bench are rather inferior than superior to the lawyers who practise before them. The manner of address, the tone of voice, the lack of dignity in the judge, and the a.s.sumption by the lawyer before him of a higher authority than his, all tell this tale. And then the judges in these courts are not paid at a rate which will secure the services of the best men. They vary in the different States, running from about 600 to about 1000 per annum. But a successful lawyer practising in the courts in which these judges sit, not unfrequently earns 3000 a year. A professional income of 2000 a year is not considered very high. When the different conditions of the bench are considered, when it is remembered that the judge may lose his place after a short term of years, and that during that short term of years he receives a payment much less than that earned by his successful professional brethren, it can hardly be expected that first-rate judges should be found. The result is seen daily in society. You meet Judge This and Judge That, not knowing whether they are ex-judges or in-judges; but you soon learn that your friends do not hold any very high social position on account of their forensic dignity.

It is, perhaps, but just to add that in Ma.s.sachusetts, which I cannot but regard as in many respects the n.o.blest of the States, the judges are appointed by the Governor, and are appointed for life.

CHAPTER XII.

THE FINANCIAL POSITION.

The Americans are proud of much that they have done in this war, and indeed much has been done which may justify pride; but of nothing are they so proud as of the n.o.ble dimensions and quick growth of their Government debt. That Mr. Secretary Chase, the American Chancellor of the Exchequer, partic.i.p.ates in this feeling I will not venture to say; but if he do not, he is well nigh the only man in the States who does not do so. The amount of expenditure has been a subject of almost national pride, and the two million of dollars a day which has been roughly put down as the average cost of the war, has always been mentioned by northern men in a tone of triumph. This feeling is, I think, intelligible; and although we cannot allude to it without a certain amount of inward sarcasm,--a little gentle laughing in the sleeve, at the nature of this national joy, I am not prepared to say that it is altogether ridiculous. If the country be found able and willing to pay the bill, this triumph in the amount of the cost will hereafter be regarded as having been anything but ridiculous. In private life an individual will occasionally be known to lavish his whole fortune on the accomplishment of an object which he conceives to be necessary to his honour. If the object be in itself good, and if the money be really paid, we do not laugh at such a man for the sacrifices which he makes.

For myself, I think that the object of the northern States in this war has been good. I think that they could not have avoided the war without dishonour, and that it was inc.u.mbent on them to make themselves the arbiters of the future position of the South, whether that future position shall or shall not be one of secession. This they could only do by fighting. Had they acceded to secession without a civil war, they would have been regarded throughout Europe as having shown themselves inferior to the South, and would for many years to come have lost that prestige which their spirit and energy had undoubtedly won for them; and in their own country such submission on their part would have practically given to the South the power of drawing the line of division between the two new countries. That line, so drawn, would have given Virginia, Maryland, Kentucky, and Missouri to the southern Republic. The great effect of the war to the North will be, that the northern men will draw the line of secession, if any such line be drawn. I still think that such line will ultimately be drawn, and that the southern States will be allowed to secede. But if it be so, Virginia, Maryland, Kentucky, and Missouri will not be found among these seceding States; and the line may not improbably be driven south of North Carolina and Tennessee.

If this can be so, the object of the war will, I think, hereafter be admitted to have been good. Whatever may be the cost in money of joining the States which I have named to a free-soil northern people, instead of allowing them to be buried in that dismal swamp, which a confederacy of southern slave States will produce, that cost can hardly be too much. At the present moment there exists in England a strong sympathy with the South, produced partly by the unreasonable vituperation with which the North treated our Government at the beginning of the war, and by the capture of Mason and Slidell; partly also by that feeling of good-will which a looker-on at a combat always has for the weaker side. But, although this sympathy does undoubtedly exist, I do not imagine that many Englishmen are of opinion that a confederacy of southern slave States will ever offer to the general civilization of the world very many attractions. It cannot be thought that the South will equal the North in riches, in energy, in education, or general well-being. Such has not been our experience of any slave country; such has not been our experience of any tropical country; and such especially has not been our experience of the southern States of the North American Union. I am no abolitionist; but to me it seems impossible that any Englishman should really advocate the cause of slavery against the cause of free soil. There are the slaves, and I know that they cannot be abolished,--neither they nor their chains; but, for myself, I will not willingly join my lot with theirs. I do not wish to have dealings with the African negro either as a free man or as a slave, if I can avoid them, believing that his employment by me in either capacity would lead to my own degradation.* Such, I think, are the feelings of Englishmen generally on this matter. And if such be the case, will it not be acknowledged that the northern men have done well to fight for a line which shall add five or six States to that Union which will in truth be a union of free men, rather than to that Confederacy which, even if successful, must owe its success to slavery?

*In saying this I fear that I shall be misunderstood, let me use what foot-note or other mode of protestation I may to guard myself. In thus speaking of the African negro, I do not venture to despise the work of G.o.d's hands. That He has made the negro, for His own good purposes, as He has the Esquimaux, I am aware. And I am aware that it is my duty, as it is the duty of us all, to see that no injury be done to him, and, if possible, to a.s.sist him in his condition. When I declare that I desire no dealings with the negro, I speak of him in the position in which I now find him, either as a free servant or a slave. In either position he impedes the civilization and the progress of the white man.

In considering this matter it must be remembered that the five or six States of which we are speaking are at present slave States, but that, with the exception of Virginia,--of part only of Virginia,--they are not wedded to slavery. But even in Virginia, great as has been the gain which has accrued to that unhappy State from the breeding of slaves for the southern market,--even in Virginia slavery would soon die out if she were divided from the South, and joined to the North. In those other States, in Maryland, in Kentucky, and in Missouri there is no desire to perpetuate the inst.i.tution. They have been slave States, and as such have resented the rabid abolition of certain northern orators. Had it not been for those orators, and their oratory, the soil of Kentucky would now have been free. Those five or six States are now slave States; but a line of secession drawn south of them will be the line which cuts off slavery from the North. If those States belong to the North when secession shall be accomplished, they will belong to it as free States; but if they belong to the South, they will belong to the South as slave States. If they belong to the North, they will become rich as the North is, and will share in the education of the North.

If they belong to the South they will become poor as the South is, and will share in the ignorance of the South. If we presume that secession will be accomplished,--and I for one am of that opinion,--has it not been well that a war should be waged with such an object as this? If those five or six States can be gained, stretching east and west from the Atlantic to the centre of the continent, hundreds of miles beyond the Mississippi, and north and south over four degrees of lat.i.tude,--if that extent of continent can be added to the free soil of the northern territory, will not the contest that has done this have been worth any money that can have been spent on it?

So much as to the object to be gained by the money spent on the war!

And I think that in estimating the nature of the financial position which the war has produced, it was necessary that we should consider the value of the object which has been in dispute. The object I maintain has been good. Then comes the question whether or no the bill will be fairly paid;--whether they who have spent the money will set about that disagreeable task of settling the account with a true purpose and an honest energy. And this question splits itself into two parts. Will the Americans honestly wish to pay the bill; and if they do so wish, will they have the power to pay it? Again that last question must be once more divided. Will they have the power to pay, as regards the actual possession of the means, and if possessing them, will they have the power of access to those means?

The nation has obtained for itself an evil name for repudiation. We all know that Pennsylvania behaved badly about her money affairs, although she did at last pay her debts. We all know that Mississippi has behaved very badly about her money affairs, and has never paid her debts, nor does she intend to pay them. And, which is worse than this, for it applies to the nation generally and not to individual States, we all know that it was made a matter of boast in the States that in the event of a war with England the enormous amount of property held by Englishmen in the States should be confiscated.

That boast was especially made in the mercantile city of New York; and when the matter was discussed it seemed as though no American realized the iniquity of such a threat. It was not apparently understood that such a confiscation on account of a war would be an act of national robbery justified simply by the fact that the power of committing it would be in the hands of the robbers. Confiscation of so large an amount of wealth would be a smart thing, and men did not seem to perceive that any disgrace would attach to it in the eyes of the world at large. I am very anxious not to speak harsh words of the Americans; but when questions arise as to pecuniary arrangements I find myself forced to acknowledge that great precaution is at any rate necessary.

But, nevertheless, I am not sure that we shall be fair if we allow ourselves to argue as to the national purpose in this matter from such individual instances of dishonesty as those which I have mentioned. I do not think it is to be presumed that the United States as a nation will repudiate its debts because two separate States may have been guilty of repudiation. Nor am I disposed to judge of the honesty of the people generally from the dishonest threatenings of New York, made at a moment in which a war with England was considered imminent. I do believe that the nation, as a nation, will be as ready to pay for the war as it has been ready to carry on the war. That "ignorant impatience of taxation," to which it is supposed that we Britons are very subject, has not been a complaint rife among the Americans generally. We, in England, are inclined to believe that hitherto they have known nothing of the merits and demerits of taxation, and have felt none of its annoyances, because their entire national expenditure has been defrayed by light Custom duties; but the levies made in the separate States for State purposes, or chiefly for munic.i.p.al purposes, have been very heavy. They are, however, collected easily, and, as far as I am aware, without any display of ignorant impatience. Indeed, an American is rarely impatient of any ordained law. Whether he be told to do this, or to pay for that, or to abstain from the other, he does do and pay and abstain without grumbling, provided that he has had a hand in voting for those who made the law and for those who carry out the law. The people generally have, I think, recognized the fact that they will have to put their necks beneath the yoke, as the peoples of other nations have put theirs, and support the weight of a great national debt.

When the time comes for the struggle,--for the first uphill heaving against the terrible load which they will henceforth have to drag with them in their career, I think it will be found that they are not ill-inclined to put their shoulders to the work.

Then as to their power of paying the bill! We are told that the wealth of a nation consists in its labour, and that that nation is the most wealthy which can turn out of hand the greatest amount of work. If this be so the American States must form a very wealthy nation, and as such be able to support a very heavy burden. No one, I presume, doubts that that nation which works the most, or works rather to the best effect, is the richest. On this account England is richer than other countries, and is able to bear, almost without the sign of an effort, a burden which would crush any other land. But of this wealth the States own almost as much as Great Britain owns.

The population of the northern States is industrious, ambitious of wealth, and capable of work as is our population. It possesses, or is possessed by, that restless longing for labour which creates wealth almost unconsciously. Whether this man be rich or be a bankrupt, whether the bankers of that city fail or make their millions, the creative energies of the American people will not become dull.

Idleness is impossible to them, and therefore poverty is impossible.

Industry and intellect together will always produce wealth; and neither industry nor intellect is ever wanting to an American. They are the two gifts with which the fairy has endowed him. When she shall have added honesty as a third, the tax-gatherer can desire no better country in which to exercise his calling.

I cannot myself think that all the millions that are being spent would weigh upon the country with much oppression, if the weight were once properly placed upon the muscles that will have to bear it. The difficulty will be in the placing of the weight. It has, I know, been argued that the circ.u.mstances under which our national debt has extended itself to its present magnificent dimensions cannot be quoted as parallel to those of the present American debt, because we, while we were creating the debt, were taxing ourselves very heavily, whereas the Americans have gone a-head with the creation of their debt before they have levied a shilling on themselves towards the payment of those expenses for which the debt has been encountered.

But this argument, even if it were true in its gist, goes no way towards proving that the Americans will be unable to pay. The population of the present free-soil States is above eighteen millions; that of the States which will probably belong to the Union if secession be accomplished is about twenty-two millions. At a time when our debt had amounted to six hundred millions sterling, we had no population such as that to bear the burden. It may be said that we had more ama.s.sed wealth than they have. But I take it that the ama.s.sed wealth of any country can go but a very little way in defraying the wants or in paying the debts of a people. We again come back to the old maxim, that the labour of a country is its wealth; and that a country will be rich or poor in accordance with the intellectual industry of its people.

But the argument drawn from that comparison between our own conduct when we were creating our debt, and the conduct of the Americans while they have been creating their debt,--during the twelve months from April 1, 1861, to March 31, 1862, let us say,--is hardly a fair argument. We, at any rate, knew how to tax ourselves,--if only the taxes might be forthcoming. We were already well used to the work; and a minister with a willing House of Commons had all his material ready to his hand. It has not been so in the United States. The difficulty has not been with the people who should pay the taxes, but with the minister and the Congress which did not know how to levy them. Certainly not as yet have those who are now criticising the doings on the other side of the water, a right to say that the American people are unwilling to make personal sacrifices for the carrying out of this war. No sign has as yet been shown of an unwillingness on the part of the people to be taxed. But wherever a sign could be given, it has been given on the other side. The separate States have taxed themselves very heavily for the support of the families of the absent soldiers. The extra allowances made to maimed men, amounting generally to twenty-four shillings a month, have been paid by the States themselves, and have been paid almost with too much alacrity.

I am of opinion that the Americans will show no unwillingness to pay the amount of taxation which must be exacted from them; and I also think that as regards their actual means they will have the power to pay it. But as regards their power of obtaining access to those means, I must confess that I see many difficulties in their way.

In the first place they have no financier,--no man who by natural apt.i.tude and by long continued contact with great questions of finance, has enabled himself to handle the money affairs of a nation with a master's hand. In saying this I do not intend to impute any blame to Mr. Chase, the present Secretary at the Treasury. Of his ability to do the work properly, had he received the proper training, I am not able to judge. It is not that Mr. Chase is incapable. He may be capable or incapable. But it is that he has not had the education of a national financier, and that he has no one at his elbow to help him who has had that advantage.

And here we are again brought to that general absence of state craft which has been the result of the American system of government. I am not aware that our Chancellors of the Exchequer have in late years always been great masters of finance; but they have at any rate been among money men and money matters, and have had financiers at their elbows if they have not deserved the name themselves. The very fact that a Chancellor of the Exchequer sits in the House of Commons and is forced in that House to answer all questions on the subject of finance, renders it impossible that he should be ignorant of the rudiments of the science. If you put a white cap on a man's head and place him in a kitchen, he will soon learn to be a cook. But he will never be made a cook by standing in the dining-room and seeing the dishes as they are brought up. The Chancellor of the Exchequer is our cook; and the House of Commons, not the Treasury chambers, is his kitchen. Let the Secretary of the United States Treasury sit in the House of Representatives. He would learn more there by contest with opposing members than he can do by any amount of study in his own chamber.

But the House of Representatives itself has not as yet learned its own lesson with reference to taxation. When I say that the United States are in want of a financier, I do not mean that the deficiency rests entirely with Mr. Chase. This necessity for taxation, and for taxation at so tremendous a rate, has come suddenly, and has found the representatives of the people unprepared for such work. To us, as I conceive, the science of taxation, in which we certainly ought to be great, has come gradually. We have learned by slow lessons what taxes will be productive, under what circ.u.mstances they will be most productive, and at what point they will be made unproductive by their own weight. We have learned what taxes may be levied so as to afford funds themselves, without injuring the proceeds of other taxes, and we know what taxes should be eschewed as being specially oppressive to the general industry and injurious to the well-being of the nation. This has come of much practice, and even we, with all our experience, have even got something to learn. But the public men in the States who are now devoting themselves to this matter of taxing the people have, as yet, no such experience. That they have inclination enough for the work is, I think, sufficiently demonstrated by the national tax bill, the wording of which is now before me, and which will have been pa.s.sed into law before this volume can be published. It contains a list of every taxable article on the earth or under the earth. A more sweeping catalogue of taxation was probably never put forth. The Americans, it has been said by some of us, have shown no disposition to tax themselves for this war; but before the war has as yet been well twelve months in operation, a bill has come out with a list of taxation so oppressive, that it must, as regards many of its items, act against itself and cut its own throat. It will produce terrible fraud in its evasion, and create an army of excise officers who will be as locusts over the face of the country. Taxes are to be laid on articles which I should have said that universal consent had declared to be unfit for taxation. Salt, soap, candles, oil, and other burning fluids, gas, pins, paper, ink, and leather, are to be taxed. It was at first proposed that wheat-flour should be taxed, but that item has, I believe, been struck out of the bill in its pa.s.sage through the House. All articles manufactured of cotton, wool, silk, worsted, flax, hemp, jute, india-rubber, gutta percha, wood (?), gla.s.s, pottery wares, leather, paper, iron, steel, lead, tin, copper, zinc, bra.s.s, gold and silver, horn, ivory, bone, bristles, wholly or in part, or of other materials, are to be taxed;--provided always that books, magazines, pamphlets, newspapers, and reviews shall not be regarded as manufactures. It will be said that the amount of taxation to be levied on the immense number of manufactured articles which must be included in this list will be light,--the tax itself being only 3 per cent. ad valorem. But with reference to every article, there will be the necessity of collecting this 3 per cent.! As regards each article that is manufactured, some government official must interfere to appraise its value and to levy the tax. Who shall declare the value of a barrel of wooden nutmegs; or how shall the Excise-officer get his tax from every cobbler's stall in the country? And then tradesmen are to pay licences for their trades,--a confectioner 2, a tallow-chandler 2, a horsedealer 2. Every man whose business it is to sell horses shall be a horsedealer. True. But who shall say whether or no it be a man's business to sell horses?

An apothecary 2, a photographer 2, a pedlar 4, 3, 2, or 1, according to his mode of travelling. But if the gross receipts of any of the confectioners, tallow-chandlers, horsedealers, apothecaries, photographers, pedlars, or the like do not exceed 200 a year, then such tradesmen shall not be required to pay for any licence at all.

Surely such a proviso can only have been inserted with the express view of creating fraud and ill blood! But the greatest audacity has, I think, been shown in the levying of personal taxes,--such taxes as have been held to be peculiarly disagreeable among us, and have specially brought down upon us the contempt of lightly-taxed people, who, like the Americans, have known nothing of domestic interference.

Carriages are to be taxed,--as they are with us. Pianos also are to be taxed, and plate. It is not signified by this clause that such articles shall pay a tax, once for all, while in the maker's hands, which tax would no doubt fall on the future owner of such piano or plate; in such case the owner would pay, but would pay without any personal contact with the tax-gatherer. But every owner of a piano or of plate is to pay annually according to the value of the articles he owns. But perhaps the most audacious of all the proposed taxes is that on watches. Every owner of a watch is to pay 4_s._ a year for a gold watch and 2_s._ a year for a silver watch! The American tax-gatherers will not like to be cheated. They will be very keen in searching for watches. But who can say whether they or the carriers of watches will have the best of it in such a hunt. The tax-gatherers will be as hounds ever at work on a cold scent. They will now be hot and angry, and then dull and disheartened. But the carriers of watches who do not choose to pay will generally, one may predict, be able to make their points good.

With such a tax bill,--which I believe came into action on the 1st of May, 1862,--the Americans are not fairly open to the charge of being unwilling to tax themselves. They have avoided none of the irritating annoyances of taxation, as also they have not avoided, or attempted to lighten for themselves, the dead weight of the burden. The dead weight they are right to endure without flinching; but their mode of laying it on their own backs justifies me, I think, in saying that they do not yet know how to obtain access to their own means. But this bill applies simply to matters of excise. As I have said before, Congress, which has. .h.i.therto supported the government by custom duties, has also the power of levying excise duties, and now, in its first session since the commencement of the war, has begun to use that power without much hesitation or bashfulness. As regards their taxes levied at the Custom House, the government of the United States has always been inclined to high duties, with the view of protecting the internal trade and manufactures of the country. The amount required for national expenses was easily obtained, and these duties were not regulated, as I think, so much with a view to the amount which might be collected, as to that of the effect which the tax might have in fostering native industry. That, if I understand it, was the meaning of Mr. Morrill's bill, which was pa.s.sed immediately on the secession of the southern members of Congress, and which instantly enhanced the price of all foreign manufactured goods in the States. But now the desire for protection, simply as protection, has been swallowed up in the acknowledged necessity for revenue; and the only object to be recognized in the arrangement of the custom duties is the collection of the greatest number of dollars. This is fair enough. If the country can at such a crisis raise a better revenue by claiming a shilling a pound on coffee than it can by claiming sixpence, the shilling may be wisely claimed, even though many may thus be prohibited from the use of coffee. But then comes the great question, What duty will really give the greatest product? At what rate shall we tax coffee so as to get at the people's money? If it be so taxed that people won't use it, the tax cuts its own throat. There is some point at which the tax will be most productive; and also there is a point up to which the tax will not operate to the serious injury of the trade. Without the knowledge which should indicate these points, a Chancellor of the Exchequer, with his myrmidons, would be groping in the dark. As far as we can yet see, there is not much of such knowledge either in the Treasury Chambers or the House of Representatives at Washington.

But the greatest difficulty which the States will feel in obtaining access to their own means of taxation, is that which is created by the const.i.tution itself, and to which I alluded when speaking of the taxing powers which the const.i.tution had given to Congress, and those which it had denied to Congress. As to custom duties and excise duties, Congress can do what it pleases, as can the House of Commons.

But Congress cannot levy direct taxation according to its own judgment. In those matters of customs and excise, Congress and the Secretary of the Treasury will probably make many blunders; but having the power they will blunder through, and the money will be collected. But direct taxation, in an available shape, is beyond the power of Congress under the existing rule of the const.i.tution. No income-tax, for instance, can be laid on the general incomes of the United States, that shall be universal throughout the States. An income-tax can be levied, but it must be levied in proportion to the representation. It is as though our Chancellor of the Exchequer, in collecting an income-tax, were obliged to demand the same amount of contribution from the town of Chester as from the town of Liverpool, because both Chester and Liverpool return two Members to Parliament.

In fitting his tax to the capacity of Chester, he would be forced to allow Liverpool to escape unscathed. No skill in money matters on the part of the Treasury Secretary, and no aptness for finance on the part of the Committee on Ways and Means, can avail here. The const.i.tution must apparently be altered before any serviceable resort can be had to direct taxation. And yet, at such an emergency as that now existing, direct taxation would probably give more ready a.s.sistance than can be afforded either by the Customs or the Excise.

It has been stated to me that this difficulty in the way of direct taxation can be overcome without any change in the const.i.tution.

Congress could only levy from Rhode Island the same amount of income-tax that it might levy from Iowa; but it will be competent to the legislature of Rhode Island itself to levy what income-tax it may please on itself; and to devote the proceeds to national or federal purposes. Rhode Island may do so; and so may Ma.s.sachusetts, New York, Connecticut, and the other rich Atlantic States. They may tax themselves according to their riches, while Iowa, Illinois, Wisconsin, and such-like States are taxing themselves according to their poverty. I cannot myself think that it would be well to trust to the generosity of the separate States for the finances needed by the national Government. We should not willingly trust to Yorkshire or Suss.e.x to give us their contributions to the national income, especially if Yorkshire and Suss.e.x had small Houses of Commons of their own, in which that question of giving might be debated. It may be very well for Rhode Island or New York to be patriotic! But what shall be done with any State that declines to evince such patriotism?

The legislatures of the different States may be invited to impose a tax of 5 per cent. on all incomes in each State; but what will be done if Pennsylvania, for instance, should decline, or Illinois should hesitate? What if the legislature of Ma.s.sachusetts should offer 6 per cent., or that of New Jersey decide that 4 per cent.

was sufficient? For a while the arrangement might possibly be made to answer the desired purpose. During the first ebullition of high feeling, the different States concerned might possibly vote the amount of taxes required for federal purposes. I fear it would not be so, but we may allow that the chance is on the card. But it is not conceivable that such an arrangement should be continued when, after a year or two, men came to talk over the war with calmer feelings and a more critical judgment. The State legislatures would become inquisitive, opinionative, and probably factious. They would be unwilling to act in so great a matter under the dictation of the federal Congress; and by degrees one, and then another, would decline to give its aid to the central government. However broadly the acknowledgment may have been made, that the levying of direct taxes was necessary for the nation, each State would be tempted to argue that a wrong mode and a wrong rate of levying had been adopted, and words would be forthcoming instead of money. A resort to such a mode of taxation would be a bad security for government Stock.

All matters of taxation, moreover, should be free from any taint of generosity. A man who should attempt to lessen the burdens of his country by gifts of money to its Exchequer would be laying his country under an obligation, for which his country would not thank him. The gifts here would be from States, and not from individuals; but the principle would be the same. I cannot imagine that the United States' Government would be willing to owe its revenue to the good will of different States, or its want of revenue to their caprice. If under such an arrangement the western States were to decline to vote the quota of income-tax or property-tax to which the eastern States had agreed,--and in all probability they would decline,--they would in fact be seceding. They would thus secede from the burdens of their general country; but in such event no one could accuse such States of unconst.i.tutional secession.

It is not easy to ascertain with precision what is the present amount of debt due by the United States; nor probably has any tolerably accurate guess been yet given of the amount to which it may be extended during the present war. A statement made in the House of Representatives, by Mr. Spaulding, a member of the Committee of Ways and Means, on the 29th of January last, may perhaps be taken as giving as trustworthy information as any that can be obtained. I have changed Mr. Spaulding's figures from dollars into pounds, that they may be more readily understood by English readers.

There was Due up to July 1,1861 18,173,566 " Added in July and August 5,379,357 " Borrowed in August 10,000,000 " Borrowed in October 10,000,000 " Borrowed in November 10,000,000 " Amount of Treasury Demand Notes issued 7,800,000 ----------- 61,352,923

This was the amount of the debt due up to January 15th, 1862. Mr.

Spaulding then calculates that the sum required to carry on the Government up to July 1st, 1862, will be 68,647,077. And that a further sum of 110,000,000 will be wanted on or before the 1st of July, 1863. Thus the debt at that latter date would stand as follows:--

Amount of Debt up to January, 1862 61,352,923 Added by July 1st, 1862 68,647,077 Again added by July 1st, 1863 110,000,000 ------------ 240,000,000

The first of these items may no doubt be taken as accurate. The second has probably been founded on facts which leave little doubt as to its substantial truth. The third, which professes to give the proposed expense of the war for the forthcoming year, viz. from 1st July, 1862, to 30th June, 1863, must necessarily have been obtained by a very loose estimate. No one can say what may be the condition of the country during the next year,--whether the war may then be raging throughout the southern States, or whether the war may not have ceased altogether. The North knows little or nothing of the capacity of the South. How little it knows may be surmised from the fact that the whole southern army of Virginia retreated from their position at Mana.s.sas before the northern generals knew that they were moving; and that when they were gone no word whatever was left of their numbers.

I do not believe that the northern Government is even yet able to make any probable conjecture as to the number of troops which the southern confederacy is maintaining, and if this be so, they can certainly make no trustworthy estimates as to their own expenses for the ensuing year.

Two hundred and forty millions is, however, the sum named by a gentleman presumed to be conversant with the matter, as the amount of debt which may be expected by midsummer, 1863; and if the war be continued till then, it will probably be found that he has not exceeded the mark. It is right, however, to state that Mr. Chase in his estimate does not rate the figures so high. He has given it as his opinion that the debt will be about one hundred and four millions in July, 1862, and one hundred and eighty millions in July, 1863. As to the first amount, with reference to which a tolerably accurate calculation may probably be made, I am inclined to prefer the estimate as given by the member of the committee; and as to the other, which hardly, as I think, admits of any calculation, his calculation is at any rate as good as that made in the Treasury.

But it is the immediate want of funds, and not the prospective debt of the country, which is now doing the damage. In this opinion Mr.

Chase will probably agree with me; but readers on this side of the water will receive what I say with a smile. Such a state of affairs is certainly one that has not uncommonly been reached by financiers; it has also often been experienced by gentlemen in the management of their private affairs. It has been common in Ireland, and in London has created the wealth of the p.a.w.nbrokers. In the States at the present time the government is very much in this condition. The prospective wealth of the country is almost unbounded, but there is great difficulty in persuading any p.a.w.nbroker to advance money on the pledge. In February last Mr. Chase was driven to obtain the sanction of the legislature for paying the national creditors by bills drawn at twelve months' date, and bearing 6 per cent. interest. It is the old story of the tailor who calls with his little account, and draws on his insolvent debtor at ninety days. If the insolvent debtor be not utterly gone as regards solvency he will take up the bill when due, even though he may not be able to pay a simple debt. But then, if he be utterly insolvent, he can do neither the one nor the other!

The Secretary of the Treasury, when he asked for permission to accept these bills,--or to issue these certificates, as he calls them,--acknowledged to pressing debts of over five millions sterling which he could not pay; and to further debts of eight millions which he could not pay, but which he termed floating;--debts, if I understand him, which were not as yet quite pressing. Now I imagine that to be a lamentable condition for any Chancellor of an Exchequer,--especially as a confession is at the same time made that no advantageous borrowing is to be done under the existing circ.u.mstances. When a Chancellor of the Exchequer confesses that he cannot borrow on advantageous terms, the terms within his reach must be very bad indeed. This position is indeed a sad one, and at any rate justifies me in stating that the immediate want of funds is severely felt.

But the very arguments which have been used to prove that the country will be ultimately crushed by the debt, are those which I should use to prove that it will not be crushed. A comparison has more than once been made between the manner in which our debt was made, and that in which the debt of the United States is now being created; and the great point raised in our favour is, that while we were borrowing money we were also taxing ourselves, and that we raised as much by taxes as we did by loans. But it is too early in the day to deny to the Americans the credit which we thus take to ourselves. We were a tax-paying nation when we commenced those wars which made our great loans necessary, and only went on in that practice which was habitual to us. I do not think that the Americans could have taxed themselves with greater alacrity than they have shown. Let us wait, at any rate, till they shall have had time for the operation, before we blame them for not making it. It is then argued that we in England did not borrow nearly so fast as they have borrowed in the States. That is true. But it must be remembered that the dimensions and proportions of wars now are infinitely greater than they were when we began to borrow. Does any one imagine that we would not have borrowed faster, if by faster borrowing we could have closed the war more speedily?

Things go faster now than they did then. Borrowing for the sake of a war may be a bad thing to do,--as also it may be a good thing; but if it be done at all, it should be so done as to bring the war to the end with what greatest despatch may be possible.

The only fair comparison, as it seems to me, which can be drawn between the two countries with reference to their debts, and the condition of each under its debt, should be made to depend on the amount of the debt and probable ability of the country to bear that burden. The amount of the debt must be calculated by the interest payable on it, rather than by the figures representing the actual sum due. If we debit the United States Government with seven per cent.

on all the money borrowed by them, and presume that amount to have reached in July, 1863, the sum named by Mr. Spaulding, they will then have loaded themselves with an annual charge of 16,800,000 sterling.