[120] a proper basis for loans in an augmented and well-paid revenue. This involves taxation, and, unfortunately, taxation appears to be a point on which the Eastern and Western States of the Federal Union are almost as much at variance as both are with the Southern Confederacy. The Western States have a particular objection to taxes; and when we read the war budget which the Congress seems finally to have decided on, one feels that such an objection may be expressed not only in good sentences on the floor of Congress, but also in a not less formidable manner far West. Besides a direct tax of $20,000,000 apportioned among the States, and expected from only one-half, the new budget proposes a tax upon carriages, varying from one dollar to fifty; a tax upon watches, an excise duty on spirituous liquors of five cents a gallon, and on fermented liquors of sixty cents a barrel; and a general tax upon incomes, the rate of which, as well as the incomes liable, is not yet decided. Meanwhile the Morrill tariff is untouched except by the imposition of additional duties. Every item in this budget suggests a financial war, as difficult, if not so sanguinary, as the war in the open field. But there is another question which presents itself to the capitalist before even the solvency of a State, or the yield of a tax, or the final success of a cause; and that is the number and frequency of similar calls. If we are to judge from the immense figures on paper paraded by the Northerners, this is a war that may take rank with any of ours — with the European war, which cost us from first to last more than a thousand millions of money, or the Russian war, which cost us a hundred millions in two years. If the Government of Washington is obliged to ask for a hundred million dollars to-day, when and how soon will it have to repeat that demand; and how many such demands will it have to make this year, and for how many years? Every such demand will compete in the market with the bonds of the last, and our old folks can remember with what celerity a promise to pay £ 5 a year became worth not so much as £ 50. Prudent people do not like buying stock at its present price when they know that twenty or thirty millions more will soon be thrown on the market for what it will fetch. Nor is this the only apprehension to damp the courage of the lender. Already, while this war is still in its very cradle, the bankers of the seaboard States are suggesting, in the form of Treasury bonds, a very large increase in the paper currency. How long would this be convertible? We may safely predict that if the war lasts as long as it now threatens to last, both sides will be driven to the same pitiable expedient of a depreciated paper currency as the mother country was in a similar extremity. No doubt there are enthusiasts in the United States who will lend money and buy Treasury bonds for three or ten years, and all the more freely because they feel deeply the social and religious aspects of the quarrel. There may, too, for aught we know, be abolitionists and philanthropists in this country who will buy American notes in a falling market, and prefer to give a good price for them rather than a bad one, because they care more for the credit of the Federal cause than they do for the amount of their own fortune. We cannot think, however, there are so many such people as largely to affect the quotation of American securities in our market.--London Times, August 14.
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[120] a proper basis for loans in an augmented and well-paid revenue. This involves taxation, and, unfortunately, taxation appears to be a point on which the Eastern and Western States of the Federal Union are almost as much at variance as both are with the Southern Confederacy. The Western States have a particular objection to taxes; and when we read the war budget which the Congress seems finally to have decided on, one feels that such an objection may be expressed not only in good sentences on the floor of Congress, but also in a not less formidable manner far West. Besides a direct tax of $20,000,000 apportioned among the States, and expected from only one-half, the new budget proposes a tax upon carriages, varying from one dollar to fifty; a tax upon watches, an excise duty on spirituous liquors of five cents a gallon, and on fermented liquors of sixty cents a barrel; and a general tax upon incomes, the rate of which, as well as the incomes liable, is not yet decided. Meanwhile the Morrill tariff is untouched except by the imposition of additional duties. Every item in this budget suggests a financial war, as difficult, if not so sanguinary, as the war in the open field. But there is another question which presents itself to the capitalist before even the solvency of a State, or the yield of a tax, or the final success of a cause; and that is the number and frequency of similar calls. If we are to judge from the immense figures on paper paraded by the Northerners, this is a war that may take rank with any of ours — with the European war, which cost us from first to last more than a thousand millions of money, or the Russian war, which cost us a hundred millions in two years. If the Government of Washington is obliged to ask for a hundred million dollars to-day, when and how soon will it have to repeat that demand; and how many such demands will it have to make this year, and for how many years? Every such demand will compete in the market with the bonds of the last, and our old folks can remember with what celerity a promise to pay £ 5 a year became worth not so much as £ 50. Prudent people do not like buying stock at its present price when they know that twenty or thirty millions more will soon be thrown on the market for what it will fetch. Nor is this the only apprehension to damp the courage of the lender. Already, while this war is still in its very cradle, the bankers of the seaboard States are suggesting, in the form of Treasury bonds, a very large increase in the paper currency. How long would this be convertible? We may safely predict that if the war lasts as long as it now threatens to last, both sides will be driven to the same pitiable expedient of a depreciated paper currency as the mother country was in a similar extremity. No doubt there are enthusiasts in the United States who will lend money and buy Treasury bonds for three or ten years, and all the more freely because they feel deeply the social and religious aspects of the quarrel. There may, too, for aught we know, be abolitionists and philanthropists in this country who will buy American notes in a falling market, and prefer to give a good price for them rather than a bad one, because they care more for the credit of the Federal cause than they do for the amount of their own fortune. We cannot think, however, there are so many such people as largely to affect the quotation of American securities in our market.--London Times, August 14.
Van Nostrand. New York, New York. 1862.
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