PAYMENT OF THE NATIONAL DEBT.

A speech delivered in the Senate of the United States February 10, 1883, the Senate having under consideration the bill (H. R. 5538) to reduce internal-revenue taxation.

MR. PRESIDENT: In the discussion of the public finances it is often asserted that even if all our modes of collecting taxes are the wisest that could be devised, and if the aggregate amount of taxes collected is not found to be burdensome, our revenues ought nevertheless to be reduced, that we are collecting more money than is required or can be used for any legitimate purpose, so that the excess constitutes an irresistible temptation to extravagance and corruption, that our accumulations of unemployed cash in the Treasury and payments made in respect of the national debt are beyond any former precedent, and finally, that there is a substantially unanimous concurrence of public opinion that the revenues must in some way be reduced even if it becomes necessary to repeal some taxes of which nobody complains, and others which are positively beneficial to the country in either their moral or economical effects.

In a speech made by the Senator from Vermont [Mr. Morrill] on the 10th of January, in opening the debate on the tariff bill, he said: "This bill has been made to secure with greater certainty a reduction of a too abundant revenue."

The chairman of the Committee on Appropriations [Mr. Allison] in a speech made on this floor on the 20th of January, used the following language:

We all say, and we all affect to believe, that in addition to the passage of the appropriation bills it is necessary to relieve the people to some extent from the great burdens that rest upon them in way of taxation, and relieve the overflowing Treasury from the $150,000,000 of surplus in it.

I believe it can be shown that all statements of this character are destitute of any foundation in fact. Our revenues

are not extraordinary in amount. There is no unnecessary accumulation of money in the Treasury. We are not paying off the national debt at a rate that is unprecedented or injurious to the interests of the nation.

Going back to the period immediately following the close of the war we find that the revenues of the Government were then much larger than they are now. I admit this would not be a fair comparison, inasmuch as the close of the war left a mass of demand liabilities, the immediate payment of which was necessary in order to carry through a successful funding of the remainder. But in 1869 order had been completely restored in our finances and the public credit did not require any unusual measure for its support. During the four years beginning with July 1, 1869, which cover substantially the first term of General Grant's Administration, the public revenues were as follows:

During the four years which will end on the 30th of June, 1883, taking those of the current year at the figures estimated by the Secretary of the Treasury, the revenues were as

follows:

1870 1871. 1872

1873.

$186,522,084 $124,009,373
198,159,676

$333,526,500

135,264,385

360,782,292

220,410,730 146,497,595

403,525,250

234,999,990 144,851,929

415,000,000

During the four years ending June 30, 1873, the annual average was $364,310,759. During the four years ending June 30, 1883, they averaged annually $378,208,510. The increase is unimportant, notwithstanding the great increase of population and still greater increase of wealth during the intervening decade.

During the two years ending June 30, 1869, the average annual revenue was $366,811,355.

During the two years ending June 30, 1867, although for reasons already given I do not claim that they afford a proper basis for comparison, the annual average was $491,398,122.

It is true that during the six years of panic, falling prices, and prostration of business, between June 30, 1873, and June 30, 1879, the revenue fell to an annual average of $280,799,666, the total receipts for this period having been $1,684,797,999. That the revenues have since enlarged is not the result of the imposition of new or of the increase of old taxes. On the contrary, the changes in taxation, though not considerable, have since been in the direction of a reduction.

The revenues are now larger than they were during those six years, partly because there is more population to collect them from, but mainly from the increased prosperity of the country; and it is not a matter of complaint but of congratulation that the revenues have expanded from such causes. The taxation, while more fruitful, is less felt.

Upon this brief review of the public revenues since the close of the civil war there is clearly no ground for saying that they are now so unprecedented in amount as to justify a demand for their reduction, without regard to whether the tax-payers are contented or discontented, or whether there are or are not any appropriate public objects to which the money can be applied.

The persons who declaim against a revenue of a million of dollars daily as in itself such a monstrous abuse as to call for an instant correction, no matter by what remedy, forget that the revenue has been at about the same average since 1865, and has not been below it except during the extraordinary depression in business which followed the financial crisis

of 1873. They fail also to take into account the fact that since 1865 the population of the country has increased by over one-half while its wealth has trebled and perhaps quadrupled.

Nor is it true that the annual average payments in respect of the debt, since the revival in the prosperity of the country in the summer of 1879, have exceeded in any appreciable degree the annual average of such payments during the entire period since the close of the civil war. They are almost identical in amount with the annual average of such payments during the four years ending June 30, 1873. Nothing has changed except that as the interest charge has become less, more of the accruing surplus has been left to be applied to the principal of the debt. No more of the money of the tax-payers is now collected and paid over to the public creditors, and those creditors are not now receiving more. Less of what they receive is called interest and more of it is called principal; but that change of nominal designation does not affect the actual fact as to the amount of revenues raised to be applied to debts, while it does most substantially improve the prospect that the country may be finally relieved of debt altogether.

During the four years ending June 30, 1883, the payments on account of the interest of the debt and the reduction of the net principal, that is to say, of the total debt less the cash in the Treasury, have been as follows, the figures for the present year being in part estimated by the Secretary of the Treasury:

During these four years payments on account of the interest amount to $308,843,522, and reductions of the principal amount to $458,282,795. The total payment in respect of the debt was $767,126,298, which is an annual average of $191,781,574.

During the seventeen years, from June 30, 1865, to June 30, 1882, the payments in respect of the debt were, principal, $1,041,000,000; interest, $2,047,000,000. This is a total of $3,088,000,000, or an annual average of one hundred and eighty-one and two-thirds millions of dollars.

During the four years ending June 30, 1873, the amounts paid annually for interest on the debt, and the annual reduction of the net principal of the debt, are as follows:

During the last named four years the payments on account of interest were $476,920,590, and on account of principal $342,183,767, making the total payments in respect of the debt $819,104,357, or an annual average of $204,776,089.

I am not now discussing the question whether an annual average payment of $191,781,574 in respect of the debt during the last four years is excessive. But that it is not unprecedented is proved by the facts that it was $204,776,089 during the first term of General Grant's administration, and that it was more than $181,000,000 during the seventeen years from June, 1865, to June, 1882.

There have not been and are not now any accumulations of cash in the Treasury beyond the amounts which the Sec