annuities, &c. But notwithstanding all errors and defects, the government has only about 17 millions of advances and debts; it has raised in the last four years a revenue of 120 millions of dollars, and has not only covered the deficit, but possesses a cash surplus of seven millions of dollars. The expenses of government and costs of administration are, compared with other countries, uncommonly small; which is evident from the single fact that the president's salary is $25,000 per annum (about £5,000 sterling), while the queen dowager of England alone draws £100,000. The expenses of Congress amount to about $200,000. The vice-president receives Only four ministers* receive each $5,000 The chief justice of the supreme court, 5,000 Eight judges, A minister plenipotentiary, A secretary of legation, 6,000 32,000 9,000 2,000, &c. It has been asserted (paradoxically it may appear, but not untruly) that, for the maintenance of free institutions in a republic, and to facilitate returns to order and moderation, it is salutary from time to time to have a deficit in the treasury. The abovementioned surplus certainly arose from excessive taxation based on false principles; and the distribution and expenditure of those moneys gave occasion for the exercise of improper influence, and produced factions and indirect corruption among individuals and even states. The general government can certainly never want means for meeting all really necessary expenditures; and by the adoption of wise and sound principles respecting currency, banking, and customs, the difficulties and mistakes that have formerly occurred will almost wholly vanish. If we now turn to the taxation of the several states, we see in the first place that they must lay taxes on no article that has been assigned to the general government. In other respects the amount of taxation is of course higher or lower, according as the possessions, wants, aims, and acquisitions of the people are greater or less. Neither praise nor blame can here be founded on figures separated from their context. The grand principle in the taxation of the single states, and the one most important in its consequences, is, that there shall be no land-tax, no excise, and no * These at the end of 1844 were: Calhoun, secretary of state; secretary of the treasury; ↑ Calhoun, Speeches, pp. 360, 462. Life, p. 36. burthens on articles of food; on the contrary, by far the greatest portion of the disbursements are provided for by property and income taxes, so that the rich man pays his due proportion. If the democracy allows no system of taxation to be adopted that would press immoderately on the poor, neither has it unjustly attacked the rich by an increasing percentage of the property tax; so that all parties have reason to be content. The difficulties of a property tax, which are elsewhere often regarded as insurmountable, vanish for the most part in the United States; because the supervision, mode of raising it, appointment of collectors, &c. are thoroughly republican,-but above all, because the amount required and collected is very small.† This American system of taxation presents the most perfect contrast to that adopted throughout nearly the whole of Europe.‡ Where bread, meat, beer, spirits, tea, coffee, wood, coals, in short all the necessaries of the lower classes, are heavily taxed, while the rich pay but little in proportion, those classes must grow poorer still; where, as in the United States, they are free from taxes, the people are vastly better off than in Europe. Societies for the purchase of sheeting and table-linen, for aiding poor laborers, for tending little children, for nursing lying-in women, all these and similar means of relief are benevolent and philanthropical: still they will never root out the evil, but often aggravate it. They disturb the course of trade, awaken hopes that cannot be realized, encourage improvident marriages, and are but new editions with alterations of the old foundling-hospitals, &c. Neither is the end proposed by these charitable precautions any more likely to be accomplished by the wild, fantastic schemes of the St. Simonists, Fourierists, and Communists. As long as we in Europe retain standing armies, expensive governments that interfere with every thing, splendid courts, settlements, endowments, &c.-so long will it be impossible to introduce the American system of low taxes; and poverty, which is not to be exorcised with mere words, will continue frightfully to increase. The dark side of the bright picture we have been contemplating is exhibited in the indebtedness of the single states. As early as 1783, there arose on the conclusion of peace the weighty question, whether the general government should assume all the debts of the states incurred during the war. As it was feared on the one hand that too many obligations would thus be cast upon the government, and on the other that it would be allowed too *Calhoun's Speeches, p. 449. Where the requirements, as in Europe, are great, they can never be covered by property and income taxes alone. In Mexico the people are pressed down by a host of absurd taxes.-Mühlenpfordt, i. 394. much power and influence, only those debts were transferred to it which the states had incurred for the common welfare. Since that time the states and cities have paid off a great deal; but much more they have either borrowed, partly at high rates of interest, or issued in the form of state stocks: so that in the year 1840 the debts of nineteen states (the remainder* were free from debt) were estimated at 200 millions of dollars, exclusive of considerable debts on the part of single cities. It has been proposed, that the general government shall assume these state debts, create paper to their amount, bearing interest at four per centum payable out of the proceeds of the public lands, and distribute these new stocks among the states, in proportion to the number of senators and representatives. As the property tax cannot be increased, as no excise can be introduced, and as there is no specie currency for the payment of interest in foreign countries, it is asserted that this proposition offers the only true, practical means of escape from every difficulty. But notwithstanding these difficulties, the proposal has not been well received. It has been regarded as holding out a premium for imprudence, bad management, swindling and speculating at the cost both of the present generation and of posterity. The loud and bitter complaints which have been made, especially in Europe, respecting what is termed repudiation, demand a closer investigation. The Americans, it is said, have had the wicked audacity to repudiate, that is, to declare that they will not pay their debts, but defraud their creditors of all their just demands!-There is no doubt that many of the states in borrowing and expending large sums of money have acted with imprudence and want of judgment, that jealousy and selfishness have been allowed to interfere, that secondary considerations have been raised to undue importance, that undertakings have failed, &c.; but from all this it by no means follows that the states in general, with their constantly augmenting resources, are not in a condition to meet their engagements. If therefore by repudiation be meant a declaration, by the governments or the majority of voters, of a selfish or even fraudulent bankruptcy, this would be so utterly contrary to the sense of right and even the worldly prudence of the Americans, that we readily adopt the explanation, that this much talked of measure is neither more nor less than a temporary respite, such as under the pressure of circumstances has often been granted before. Moreover, national bankruptcy, the reduction of interest, the Viz. Connecticut, Rhode Island, Vermont, New Hampshire, New Jersey, Delaware. North Carolina, and Iowa. †Thus Albany had a debt of $360.000; Philadelphia, of about $1,000.000; Boston, $1,700,000; New York, as much as $13,000,000. These sums however are constantly changing.-American Almanac, 1841, p. 130; 1844, p. 229. depreciation of the value of paper issues, &c., have occurred so frequently in Europe, and have been so arbitrarily managed by the ruling powers, without allowing their creditors a voice in the matter or a legal remedy, that the Americans might justify similar measures by such examples-provided that injustice could thus be justified at all. Since of the debts of the American states 8 millions have been expended in roads, 42 millions in railways, 69 millions in canals, and 52 millions in bank undertakings, it follows that there is an essential difference between the state debts of Europe and America. The former were mostly incurred on behalf of destructive wars, and can produce no further fruits; the American loans on the contrary were employed in peaceful enterprises, which in great part will be still more useful to posterity than to the present generation, and most of which will sooner or later pay the interest of the capital expended on them. It seems indeed to many Americans as impossible to impose extraordinary taxes upon themselves for the fulfilment of their obligations, as it does to many Europeans to reduce their standing armies for the same purpose; yet both are equally in the wrong, and do themselves the greatest injury. Hence it was said by the governor of Louisiana, Alexander Mouton: "It is manifest that we have raised ourselves again from the deplorable state of immorality and wretchedness into which the country was plunged by indolence, extravagance, the credit and paper system, and the mad speculations produced by imprudent legislation." At all events it is a proof of ignorance, folly, or blameable excitement, to stigmatize all the United States, or all the Americans without discrimination, as fraudulent bankrupts. Out of twenty-six states, seven have no debts at all, thirteen pay their interest regularly, and only six do not come up to their engagements. Of these Maryland,† Michigan, Illinois, and Arkansas commenced undertakings with their borrowed capital, which for the most part are still incomplete. They are now earnestly engaged in restoring their credit; in order with additional means to bring to a conclusion the works that remain unfinished, and from which till then no income can be derived. Pennsylvania,‡ who with proper exertions would doubtless have been able to pay, and who has therefore been the most violently attacked on the score of repudiation, has at length perceived that those who violate the rights of others always do the greatest injury to themselves; she has imposed a tax upon herself, will pay next year the current interest, and it is to be hoped will soon satisfy *American Almanac, 1840, p. 105. †The debt of Maryland is stated to be about 11 millions of dollars. Pennsylvania has a debt of about 37 millions of dollars, of which 30 millions have been expended on canals and railroads. her creditors altogether. Lastly, Mississippi has asserted that the pretended state loans were never recommended and approved in a legal manner, and that little or nothing of them has reached the state treasury; wherefore she is under no obligation to pay either capital or interest out of the public revenues. Let those, it is said, be responsible who received the money, or let those suffer who imprudently furnished it at their own risk.-We cannot here go into the question as to how far those persons who negotiated the loans were empowered to do so, or transgressed the laws; and whether the demands of the creditors can legally be brought against the state, or only against the recipients of the money. We can only express a hope,-since twenty states of the Union have had no share whatever in the injustice or misfortune of repudiation, and five are about to free themselves from it as fast as they can, that the twenty-sixth will also find ways and means of coming to an agreement with her creditors; and that thus the complaints of Europeans respecting America may be not only reduced to their proper measure, but entirely removed. NOTE. I will here give, by way of example, a few further particulars respecting the taxation of the single states. In Alabama, taxes are levied on slaves, goods at auction, cotton in store, sales on commission, &c. (Amer. Alman. 1844, p. 264.) In South Carolina the principal tax was levied as early as 1787 on real estate and slaves. In later times there has been added to it a sort of tax on trades, and one on theatrical performances and public exhibitions of all kinds. Statements on oath respecting property and income are made the basis of taxation; investigation and punishment however are resorted to in cases of necessity. Absentees pay double. In Georgia the land-owners have contrived to have the taxes laid chiefly on merchandize and stock in trade; at which of course the burthened parties loudly complain. (Buckingham's Slave States, ii. 115.) In Illinois the state and city expenses are raised in proportion to property; and this is the usual plan. (Ernst's Reisebemerkungen, p. 174.) In Kentucky this tax amounted to only one tenth per cent. In Massachusetts there is mention of a poll-tax on persons between the ages of 16 and 70, and a tax on personal and real estate; the former is said not to exceed $1.50, and does not amount at most to more than a sixth of the sum required. All the rest comes from the property tax. Church property is not exempt from it; but exceptions are made in favor of the property of charitable and learned institutions, household furniture not worth over $1000, clothing, agricultural and mechanical implements, young cattle, the Indians and their effects, churches and church-pews.--As the income from bank stock ( per cent.) and from auctions nearly covered the expenditure, the property tax was for a long time laid aside; and this occasioned in 1840 a new inquiry into the value of property, which was estimated at 300 millions. The entire revenue of the state amounted from 1837 to 1842 to about 5 millions of dollars. In the year 1843, the expenses in round sums were: Pay of the legislature $70,000 Salaries 61.000 |