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The army and money Votes of the Federal Congress.
[from the London Times, Aug. 19]

The armies of Xerxes and the wealth of Solomon would hardly sustain a comparison with the hosts of men and mountains of money which — at any rate, upon paper — are placed at the command of President Lincoln for the suppression of the Southern Confederacy.--We may venture, perhaps, to pass without too rigorous a scrutiny the bold, though some what gasconading, vote by which the intelligence of the defeat at Manassas was received in Congress. The millions so precipitately offered represented, probably, the patriotic resolution of the North to spend its last dollar in the preservation of the Union; but, without pressing these loose figures to their literal import, we are really astounded at the conclusions which are forced upon us by recent reports. It used to be thought that this country had attained an unhappy but unapproachable eminence in national indebtedness. Half our entire expenditure in ordinary years goes still to pay the interest of borrowed money, and when we were told to look at America and observe how, under democratic institutions, a country as populous as our own could be governed at a quarter of the expense, we could not but feel the force of the contrast. We knew, indeed, that America had all her temptations to come, and it was occasionally remarked in these columns that the tendency to extravagance on the other side of the Atlantic was rapidly increasing, but the comparison still remained a striking one.--Now, however, a critical test has been applied, America is involved in war, and the rate at which she is raising men and money will, if carefully examined, appear almost too extraordinary for belief.

The exact position of American finances must be to a great extent a matter of estimate even in the country itself; but it has been calculated, on good authority, that the actual expenditure of the Federal Government at the present moment is at the rate of about £75,000,000 per annum. This, it is true, is less by £9,000,000 than the amount of our own expenditure--£84,000,000--in the heaviest year of the Crimean war; but one-third of that charge was absorbed, in providing for the interest of the national debt, and the whole sum only showed an excess of some £35,000,000 over our ordinary place expenditure. In 1853 we spent £51,000,000; in 1834, £60,000,000; and it was not until we found ourselves in the very agony of the struggle that we added some sixty per cent to our usual outlay. We may say, in short, that the war cost us for the twelve months when it was most expensive about £30,000,000 of money, whereas the civil war is costing the Americans at its very outset at least twice that sum. An expenditure of £75,000,000 represents an excess of about £60,000,000, on the ordinary outlay of the Federal Government, and this incurred, when the first campaign has just been opened, and before the real proportions of the war can be supposed to be developed. This, however, though a most ominous fact, constitutes by no means the most striking feature of the case before us.

When we, in this country, were spending these tens of millions upon the war in hand, we were also taxing ourselves in proportion. We met on outlay of £84,000,000 by taxes to the amount of £63,000,000 not, actually paid into the Exchequer after the costs of collection had been deducted. In the following year we provided no less than £68,000,000 to meet an aggregate charge of £78,000,000, so that in the two years together we added only some £30,000,000 to the national debt. In fact, the whole war, sanguinary and exhausting as it proved, only augmented the public debt by the sum of £32,793,000. Let us now contrast these statistics with the accounts received from America. The ordinary Federal revenue amounts to about £16,000,000, so that the extraordinary charge of the war, to be met either by taxation or loan, is, as we have said, about £60,000,000. But how do the Americans propose to raise this? What proportion will they borrow, and what proportion will they levy by taxation? As far as we can collect from the figures transmitted, they design to borrow the whole. They have voted fresh taxes, undoubtedly; but these taxes, we imagine, will do little more than provide for the mere interest of the debts contracted, or, as it is phrased, serve as ‘"a basis for loans."’ We arrive at this conclusion party by arithmetical calculation, and partly from intimations conveyed by the American journals.

We are told distinctly that, though Congress was ready to authorize any amount of loans it hesitated when asked for supplies on which to base them; and we observe that, though the best affected of the New York bankers did at first suggest that provision should be made for meeting part of the principal, they presently admitted that this arrangement might be dispensed with. Moreover, it seems pretty evident that the produce, of the new taxes will not suffice for much more than the liquidation of the enormous interest, which, as we shall presently remark, will be incessantly accruing, Until we get the estimates of the Government placed before us we can do little more than approximate to the truth by conjecture and computation; but, if the Federal revenue were to be doubled by the proceeds of fresh taxation, the increase of income would be almost all absorbed in paying the interest of the debt which will probably be contracted by this time twelvemonth. In other words, the Americans are now creating a national debt at the rate of £60,000,000 a year.

We entreat the reader to observe for a moment what this implies. Such a course throws all our borrowing into the shade. In all the nine years of the American war, from 1774 to 1783, we only borrowed £104,000,000. In the twenty-two years of the great Revolutionary war we averaged less than £30,000,000 a year, and in the tremendous year 1813-14 the loan was but £36,000,000. But this is but only half the battle. The burthen of a loan depends not so much on the amount of principal as on the rate of interest. We borrowed our money even in 1813 at a little above four and a half per cent., and in 1856 at a little above three per cent. The Americans, however, began by an offer of seven per cent., and are at this moment compelled to pay ten or twelve per cent. We find, therefore, that while £60,000,000 annually would be added to their national debt, £6,000,000 annually would be added to the charge of that debt, so that four years and three-quarters of their present expenditure would saddle them with a burthen equal to that which we have incurred in a century and a half. Mr. Gladstone has to provide some £28,000,000 to satisfy the public creditors of Great Britain. In the year 1866, if the American war should be protracted so long, Mr. Chase's successor will have to provide rather more than that sum for the creditors of the Union.

It is obvious to remark that the war may not be carried on so long, or continued at so heavy a cost; and, indeed, the exorbitant propositions of Congress were probably based upon the assumption that the way to make short work was to go to work unsparingly at first. But the history of the campaign up to the present point contains little to suggest a speedy termination of the struggle. The Southerners are not likely to succumb, nor the Northerners to retire. Neither is it at all in accordance with experience in these matters that the cost of a war should be diminished as it goes on. The scale of operations, indeed, as far as resolutions go, has been actually extended. The last mail tells us that the volunteer bills passed by Congress empower the President to call one million men into the field, and it was supposed that half those numbers would be actually raised. Napoleon had not a larger army when he crossed the Nicmen with the most prodigious best ever seen in modern days. We can detect no sign, therefore, of any curtailment in the dimensions of this extraordinary war, though we may well doubt whether the Americans will find themselves able to borrow quite so fast as they desire. They have evidently the will to rival the most reckless of States in this ruinous race, but they may not have the power. Their credit is already but indifferent, and the terms of the market are sure to become less and less favorable as loan follows loan. This, however, is the only difficulty likely to operate as a check to their career. The desire for a compromise, already discernable in the classes on whom the expenses of the war will fall, would be ineffective in comparison with the passions of the multitude exempted from taxation. We see, in short, democracy in a crisis which brings all its various pretensions to trial. Its institutions are certainly not calculated to make men pacific, or this unnatural war would never have been adopted and prosecuted as it, has been. As certainly have they no tendency to promote public economy, for the expenditure of the Americans is beyond all example. We shall now be able to note their operation on popular opinion, and observe how taxes are regulated and obligations incurred a great national struggle. The commencement, however, says little for a system which has been so loudly extolled as superior to all others.

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