ADIERICAN RAILROAD JOURNAL.

. -1. 1437

nations will be willing, because it is for their in-
terest, to exchange product for product. And to
accomplish this,-there must be contraction, for, to
reduce prices permaneutally and equitably, while
maintaining $700,000,000" ofirredeemable paper
money, is simply an impossibility.

Seven hundred millions of paper could not be
kept redeemable with less than seven hundred
millions of gold, because with such an amount of
currency it would inevitably be depreciated, and
hence gold would bear a premium which every
holder of paper would be desirous to realize.
With four hundred millions of paper, on the other
ha.nd,a hundred millions of gold would probably
be ample, because the currency, not being in ex-
cess of the wants of commerce, would not suffer
depreciation, and, gold and paper being on other-
wise equal terms, paper would be preferred for
its greater convenience in use, just as in 1860 the
banks were fully able to redeem all of their circu-
lation which was presented for payment, although
having but 18 cents of specie on each dollar of
immediate liabilities. It is not the ratio between
gold and paper that needs to be regulated, but
the ratio between the amount of paper in circula-
tion and the volume of National production and
exchange, of which it is the instrument.

The Commissioner, in view of the above con-
siderations, is constrained to believe that con-
traction, direct and undisguised, is the one neces-
sity of the situation. ’

In considering the question of future taxation,
the Commissioner estimates that at the present
rates the surplus for 1869-70 will exceed that of
1868-69, viz : $80,000,000. The gain for the same
time by reduction of expenditures is estimated at
$26,000,000. We shall also gain, he thinks, by
the elasticity of the revenue, say from $12,000,-
000 to $15,000,000. The sum of these items
makes the estimated surplus for the current fis-
cal year $124,000,000.

The possession of a surplus so large invests
with more than ordinary interest the question of
its disposition. Shall the whole of the sum be
applied to the reduction of the principal of the
national debt, or shall a fair proportion of it be
remitted to the people by the abatement or re-
moval of their taxes ’.I Of these two courses the
Commissioner unhesitatingly declares his convic-
tion that the latter is the more expedient—-if in‘-
deed it is not absolutely imperative, demanded
alike by the highest economical considerations
and by the almost unanimous sentiment of the
people. With this view he proposes that the sum
of fifty millions be taken as the measure of the
taxes to be removed or reduced, and that such re-
duction should be directed, first, to relieving in-
dustry as much as possible of unnecessary burdens,
and allowing it to obtain its material at the mini-
mum cost; and, secondly, to the diminution of
the cost of the elements of living to the great
mass of the people, in their capacity as con-
sumers, irrespective of the consideration whether
theyare or are not producers of wealth’.

The three principal sources of receipts under
the internal revenue are the taxes on distilled
spirits and fermented liquors, on tobacco, and on
incomes. The rate of taxation on the first two of
these-has been fixed at a standard whi_ch the ex-
perience of the past year has proved to be most
productive. The taxes on whisky, beer, and to-
bacco should not, in the opinion of the Commis-
sioner, be modified, unless it is desired to repeat
the disagreeable experience of former years, and
to perpetuate the power of corrupt organizations.

The tax levied under the head of incomes is of
a different character, and demands essential modi-
fications. The Commissioner would recommend
that, beginning with the next regular assessment,
the present rate of five per cent. he reduced to
three per cent. upon the net income of individuals.
The reason for this recommendation is that the
tax of five per cent. is excessive and constitutes a
real grievance, being greater than that ever im-
posedby any other nation, except in extraordi-
nary national exigencies. An additional reason
is that an assessment of three per ‘cent. would
probably yield to the Treasury a sum very nearly

equal to that at present collected; inasmuch as,
while the reduction of the rate would afford a
great and welcome relief to the classes who now
pay, it would at the same time bring within reach
of the tax great numbers who now either avoid
giving in lists at all, or, while doing so, force the
constituents of their income so as to escape con-
tribution entirely.

In connection with this reduction of the general
rate, the Commissioner would recommend that,
while the absolute exemption to all persons should
be allowed to remain as now fixed, namely, at
$1,000, the exemption on account of rent should
not be left indefinite, as at present, but should be
strictly limited to an amount suflicient only to re-
lieve from taxation the rentals of the laboring
classes, for instance, $200. It is evident that no
claim can be made for the exemption of rent to
any extent which would not be equally valid in
the support of the exemption of any other ex-
penditure; and certainly high rents are as much
a luxury as any form of expenditure, and as little
deserving of economical sympathy. It‘ the re-
commendation of the Commissioner in regard to
the exemption of rentals should be adopted, he is
confident that, notwithstanding the reduction of
the tax from five to three per cent. the amount
that will accrue to the Treasury from this source
will not be impaired; and, but for the unfavor-
able condition of industry during the past year,
there is great reason to believe that a very decided
gain would be realized.

In respect to the proposition, seriously advo-
cated in many quarters, that this tax should be
wholly removed, the Commissioner thinks that
the attention of the country should he called to
the fact that this tax was paid during the year
1808 by so small a number as 250,000 persons out
of the entire population, yet representing an ag-
gregate income of not less than $800,000,000, ex-
clusive of the amounts remitted by reason of rents
and the minor exemptions. Allowing, then, for
the families of these 250,000 contributors, itis evi-
dent that only about 1,000,000 of the population
are interested in having the tax removed, while
the remaining 38,500,000 of the people are inter-
ested in having it maintained.

To sum up what has been said upon the income
tax, the Commissioner is of the opinion that a. re-
duction of the rate of assessment from five to
three per cent. upon individual incomes, without
any other change in the law, would not reduce
the receipts from this source by more than $5,000,-
000 at the outside; while, if the exemption of
rent were to be limited as suggested, or even fixed
at $500, there would be no falling off nor abate-
ment in the receipts.

There then remains a. large body of minor and
miscellaneous taxes under the internal revenue,
which together yielded in 1868 less than $50,000,-
000. Of these the Commissioner would recommend
that the taxes embraced in what is known as
Schedule A, viz. : the taxes assessed on watches,
silver plate, pianos, billiard tables and carriages,
should be entirely remitted. They are inquisito-
rial in character, highly oifensive in collection,
petty and contemptihle in the revenue yielded. If
these taxes are intended to have a. sumptuary
bearing, they are altogether out of the sympathies
of modern civilization; if their object is to secure
revenue, they are absurd*failures. Ten times the
amount could be obtained with the same effort in
some other direction, andwvithout exciting half as
much of odium and hostility.

As best calculated to carry out the two objects
proposed at the outset of this inquiry, the Com-
missioner would further recommend the repeal of
the following taxes now levied under the internal
revenue:

First--The whole body of what is known as
special taxes or licenses~those levied on banks
and bankers, and upon manufacturers and dealers
in spirits, beef and tobacco, being, however, re-
tained. The loss of revenue on this account will
not be in excess of $10,000,000. '

Second-—The taxes on the gross receipts of rail-
roads, stage coaches, insurance, telegraph and ex-
press’ companies, canals, ferries, ships,,barges and

steamboats._ The loss of revenue from this source
w1ll not be in excess of $7,000,000.

T/nrgl-—The taxes on the sale of articles not
otherwise specifically taxed. The receipts from
this source will approximate $8,000,000.

Allowing, then, for the extreme possible loss
under incomes, the amount of taxation above pro-
posed to be remitted to the people in consideration
0f_ the present large and increasing surplus of re-
ceipts over expenditures would be in the neigh-
borhood of $26,000,000.

   

Illinois Southeastern Railroad.

At the annual meeting of this company in Fair-
field, on the 1st inst., the following gentlemen
were elected directors for the ensuing year: Wm.
H. Hanna, Wm. Wilson, D. L. Mccawley, Chas, A,
Beecher, Wm. H. Robinson, E. Bouham, C, G,
B0835» -7- T- Fleming, R. P. Hanna, A. L. John-
son, Wm. G. Bowman, Chas. Carroll, Thos. S,
Ridgeway. At a subsequent meeting of the di-
rectors, Thos. S. Ridgeway was elected President;
Chas. A. Beecher, Vice President; E. Bonham,
Treasurer; C. C. Boggs, Secretary. This com.
pany has five miles completed from Shawneetown
northward, and ten miles more graded. Most of
the Work in White County remains to be done.
The grading is completed through Wayne County
and about half way across L” lay County, to Loufg.
ville, which is six miles north of Flora, where the
Illinois and Southeastern crosses the Ohio and
Mississippi. The ofiicers hope to have this part
of the road, from Louisville to Fairfield, about 25
miles, ironed by the 1st of February.

North Carolina Special Tax Bonds.

The annual report of the Treasurer of the State
of North Carolina shows that the amount of
“Special Tax” bonds issued to Railroads is $12 ..
600,000, viz: . ’
Western Coalfield Railroad. .. .. , , ,_ i
Western glorth Car)olina . . .. .. .. . 
Wilmington, Charlotte and Rutherford 1 500,000
Williamston and Tarboro .. ..  . . . ’300’000
Atlantic, Tennessee and Ohio .... .... 1,760,000
Northwestern North Carolina . . . . . . .. 1,080:ooo

Total..v.......... . . . . . . ......_$12,600_o0o

@ The San Francisco and North Pacific
Railroad Company has been incorporated, with a.
capital of $8,000,000. The directors are: John
F. McCauley, A. Harpending, John L. Romer, C.
H. Harrison, A. W. McPherson, David T. Bagley
and G. D. Roberts. This company proposeg to
build a railroad from Saucelito through .Ma1-in,
Sonoma, Mendocino and Humboldt counties to
Humboldt Bay.

3?‘ The extension of the Wicomico and Poco-
moke Railroad, so far as grading is concerned, is
now complete to the Wicomico’ River, and we
learn from the President of the road, Dr. H. R.
Pitts, that thework of track laying will be com-
menced as soon as the iron contracted for can be
delivered, which will be shortly after Christmas.

,  The coupons of the Orange, Alexandria
and Manassas, and the Orange and Alexandria
Railroad Companies, due J auuary 1st, will be paid

on and after that date, at the oflice of Robert-

Garrett &« Sons, Baltimore.

E?‘ The Madison (Wis.) Journal says the point
of connection between the Milwaukee -and St.
Paul and the Western Union Railroads, has been
decided in favor of Elkhorn. A branch road will
be built to that point from Eagle, 0