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MAY 19, 1888. It appears from the last official statement that there was in the Treasury at the close of the last month, including subsidiary and minor coins, the sum of $136,143,357.95 over and above all the current liabilities of the government. This was $56,676,662.65 more than the surplus on hand on the 1st day of December, 1887, and shows that there has been since that date an average monthly increase of $11,335,332.15. The surplus accumulation each month under the existing system of taxation is more than the total cost of the government during the first two years of Washington's administration, while the aggregate sum is considerably in excess of the whole expenditure

of the government during the first eighteen years of its existence under the Constitution, including civil and miscellaneous expenses, war, navy, Indians, pensions, and interest on the public debt.

“Every dollar of this enormous sum has been taken by law from the productive industries and commercial pursuits of the people at a time when it was sorely needed for the successful prosecution of their business, and under circumstances which afford no excuse whatever for the exaction. There is not a monarchical government in the world, however absolute its form or however arbitrary its power, that would dare to extort such a tribute from its subjects in excess of the proper requirements of the public service; and the question which Congress is now compelled to determine is whether such a policy can be longer continued here in this country, where the people are supposed to govern in their own right and in their own interest.

“On the 17th day of last month the Secretary of the Treasury, in pursu ance of authority conferred upon him by the law of March, 1881, as inter preted by the two Houses of Congress, issued a circular inviting proposals for the sale of bonds to the government. The first purchase was made under this invitation on the 18th day of April, and between that date and the close of business yesterday, a period of one month, he has purchased on account of the government 4 per cent. bonds to the amount of $13,456,500, upon which interest had accrued at the date of the purchase to the amount of $53,172.07. For these bonds he was compelled to pay the sum of $17,046,136.06, which was $3,536,464 more than the principal and accrued interest, or a premium of 264 per cent. During the same time and under the same authority he purchased 42 per cent. bonds to the amount of $12,404,450, upon which interest had accrued to the amount of $108,086.55. For these bonds he paid the sum of $13,379,188.37, which was $866,652.37 in excess of the principal and interest. The premium paid upon this class of bonds was nearly 7 per cent.

“This is the situation into which the government has been forced by the failure of Congress in past years to make provision for a reduction of taxation. Millions of dollars which ought to have remained in the hands of the people who earned the money by their labor and by their skill in the prosecution of business have been taken away from them by law to be paid out to the bondholders in excess of their legal demands against the government. And, sir, if the present Congress shall adjourn without applying a remedy, this unjust process must go on for an indefinite length of time. In the presence of such a situation we cannot afford to quarrel about trivial details. A reduction of the revenue-not by increasing taxation, as some propose, but by diminishing taxation in such manner as will affo the largest measure of relief to the people and their industries-should be the great and controlling object to which everything else should be subordinated. I do not mean that every interest, however small and insignificant, should not be carefully considered in a friendly spirit, but I do mean that the generai interests of the many should not be subordinated to the special interests of the few.

“Although the question now presented is purely a practical one, it necessarily involves, to some extent, a discussion of the conflicting theories of taxation which have divided the people of this country ever since the organization of the government. There is a fundamental and irreconcilable difference of opinion between those who believe that the power of taxation should be used for public purposes only, and that the burdens of taxation should be equally distributed among all the people according to their ability to bear them, and those who believe that it is the right and duty of the government to promote certain private enterprises and increase the profits of those engaged in them by the imposition of higher rates than are necessary to raise revenue for the proper administration of public affairs; and so long as this difference exists, or at least so long as the policy of the government is not permanently settled and acquiesced in, these contlicting opinions will continue to embarrass the representatives of the people in their efforts either to increase or reduce taxation.

“While no man in public life would venture to advocate excessive taxation merely for the purpose of raising excessive revenue, many will advocate it, or at least excuse it, when the rates are so adjusted or the objects of taxation are so selected as to secure advantages, or supposed advantages, to some parts of the country or to some classes of industries over other parts and other classes; and this, Mr. Chairman, is the sole cause of the difficulties we are now encountering in our efforts to relieve the people and reduce the surplus. It is the sole cause of the unfortunate delay that has already occurred in the revision of our revenue laws, and if the pending bill shall be defeated, and disaster in any form shall come upon the country by reason of overtaxation and an accumulation of money in the Treasury, this unjust feature in our present system will be responsible for it.

“Whenever an attempt is made to emancipate labor from the servitude which an unequal system of taxation imposes upon it, whenever it is proposed to secure as far as possible to each individual citizen the full fruits of his own earnings, subject only to the actual necessities of the government, and whenever a measure is presented for the removal of unnecessary restrictions from domestic industries and international commerce, so as to permit freer production and freer exchanges, the alarm is sounded and all the cohorts of monopoly are assembled to hear their heralds proclaim the immediate and irretrievable ruin of the country.

“Mr. Chairman, it has been stubbornly contended all through this debate that high rates of duty upon imported goods are beneficial to the great body of consumers, because such duties, instead of increasing the price of the domestic articles of the same kind, actually reduce the prices. If this be true, all the other arguments in support of the existing system are not only superfluous, but manifestly unsound. The proposition that a high tariff enables the producer to pay higher wages for his labor, and the proposition that it also reduces the prices of the articles he has to sell, which are the products of that labor, are utterly inconsistent with each other, and no ingenuity of the casuist can possibly reconcile them. Labor is paid out of its own product, and unless that product can be sold for a price which will enable the employer to realize a reasonable profit and pay the established rates of wages, the business must cease or the rates of wages must be reduced. When the price of the finished product is reduced by reason of the increased efficiency of labor, or by reason of the reduced cost of the raw material, the employer may continue to pay the same or even a higher rate of wages and still make his usual profits. But the tariff neither increases the efficiency of labor nor reduces the cost of the raw material.

“I do not deny that prices have greatly fallen during the last fifty years, not only in this country, but all over the civilized world—in free-trade countries as well as in protectionist countries. Nor do I deny that during the same time the general tendency has been toward an increase in the rates of wages; and this is true also of all civilized countries, free-trade and protection alike. It is not possible for me now to enumerate, much less discuss, all the causes that have contributed to these results. One of the most efficient causes, in fact the most efficient cause, is the combination of skilled labor with machinery in the production of commodities. The introduction and use of improved machinery has wrought a complete revolution in nearly all our manufacturing industries, and in many cases has enabled one man to do the work which it required one hundred men to do before. Here is a statement furnished by the United States Commissioner of Labor to the chairman of the Committee on Ways and Means, showing the value of the product of a week's labor in spinning cotton yarn by hand and the value of the product of a week's labor combined with machinery in the same industry: In 1813, one man working sixty hours by hand could turn out three pounds of cotton yarn, worth $2.25, or seventy-five cents per pound; now the same man, if he were living, could turn out in sixty hours with the use of machinery 3,000 pounds of cotton yarn of the same character, worth $450, or fifteen cents per pound. The cotton-spinner now receives as wages for his week's work more than three times as much as the total value of the product of a week's work, including the value of the material, in 1813; and yet labor is far cheaper to the employer now than it was then. Although the employer now receives only one-fifth as much per pound for his cotton yarn as he did in 1813, he realizes from the sale of the products of a week's labor just two hundred times as much as he did then.

“I have also a statement prepared by the same official, showing the relative production and value of product of a weaver using hand and power machinery, from which it appears that a weaver by hand turned out, in seventytwo hours in 1813, 45 yards of cotton goods (shirting), worth $17.91, while a weaver now, using machinery, turns out in sixty hours 1,440 yards, worth $108. Substantially the same exhibit could be made in regard to a very large number of our manufacturing industries.

“Is it strange, Mr. Chairman, in view of these facts, that the prices of manufactured goods have fallen or that the wages of the laborers who produce them have risen? Is it not, on the contrary, remarkable that there has not been a greater fall in prices and a greater increase in wages? Undoubtedly there would have been a greater reduction in prices and a greater increase in wages if there had been a wider market for the products and a lower cost for the material.

“The tremendous productive forces at work all over the world in these modern times, and the small cost of maual labor in comparison with the value of the products of these combined forces, can not be realized from any general statement upon the subject. In order to form some idea of the magnitude of these natural and mechanical forces, and the efficiency of manual labor and skill when connected with them, let us look at the situation in six of our own manufacturing industries. In the manufacture of cotton goods, woolen goods, iron and steel, sawed lumber, paper, and in our flouring and grist mills, there were employed, according to the latest statistics, 517,299 persons, not all men, but many of them women and children. This labor was supplemented by steam and water power equal to 2,496,299 horse-power. This is equal to the power of 14,977,794 men; and thus we find that a little over 517,000 persons of all ages and sexes are performing, in connection with steam and water power, the work of 15,495,093 adult and healthy men.

“The railroad, the steam-vessel, the telegraph, the improved facilities for the conduct of financial transactions, and many other conveniences introduced into our modern systems of production and distribution and exchange have all contributed their share toward the reduction of prices, and it would be interesting to inquire what their influence has been, but I can not pursue this particular subject further without occupying too much time.”




The second session of the Fiftieth Congress convened on Monday, Dec. 3, 1888; and the President sent in his fourth annual message, as follows: To the Congress of the United States:

As you assemble for the discharge of the duties you have assumed as the representatives of a free and generous people, your meeting is marked by an interesting and impressive incident. With the expiration of the present session of the Congress the first century of our constitutional existence as a nation will be completed.

Our survival for one hundred years is not sufficient to assure us that we no longer have dangers to fear in the maintenance, with all its promised blessings, of a government founded upon the freedom of the people. The time rather admonishes us to soberly inquire whether in the past we have always closely kept in the course of safety, and whether we have before us a way plain and clear which leads to happiness and perpetuity.

When the experiment of our government was undertaken, the chart adopted for our guidance was the Constitution. Departure from the lines there laid down is failure. It is only by a strict adherence to the direction they indicate and by restraint within the limitations they fix that we can furnish proof to the world of the fitness of the American people for selfgovernment.

The equal and exact justice of which we boast as the underlying principle of our institutions should not be contined to the relations of our citizens to each other. The government itself is under bond to the American people that in the exercise of its functions and powers it will deal with the body of our citizens in a manner scrupulously honest and fair and absolutely just. It has agreed that American citizenship shall be the only credential necessary to justify the claim of equality before the law, and that no condition in life shall give rise to discrimination in the treatment of the people by their government.

The citizen of our republic in its early days rigidly insisted upon full compliance with the letter of this bond, and saw stretching out before him a clear field for individual endeavor. His tribute to the support of his government was measured by the cost of its economical maintenance, and he was secure in the enjoyment of the remaining recompense of his steady and contented toil. In those days the frugality of the people was stamped upon their government, and was enforced by the free, thoughtful, and intelligent suffrage of the citizen. Combinations, monopolies, and aggregations of capital were either avoided or sternly regulated and restrained. The pomp and glitter of governments less free offered no temptation and presented no delusion to the plain people who, side by side, in friendly competition wrought for the ennoblement and dignity of man, for the solution of the problem of free government, and for the achievement of the grand destiny awaiting the land which God had given them.

A century has passed. Our cities are the abiding-places of wealth and luxury; our manufactories yield fortunes never dreamed of by the fathers of the republic; our business men are madly striving in the race for riches, and immense aggregations of capital outrun the imagination in the magnitude of their undertakings.

We view with pride and satisfaction this bright picture of our country's growth and prosperity, while only a closer scrutiny develops a somber shading. Upon more careful inspection we find the wealth and luxury of our cities mingled with poverty and wretchedness and unremunerative toil. A crowded and constantly increasing urban population suggests the impoverishment of rural sections and discontent with agricultural pursuits. The farmer's son, not satisfied with his father's simple and laborious life, joins the eager chase for easily acquired wealth.

We discover that the fortunes realized by our manufacturers are no longer solely the reward of sturdy industry and enlightened foresight, but that they result from the discriminating favor of the government, and are largely built upon undue exactions from the masses of our people. The gulf between employers and the employed is constantly widening and classes are rapidly forming, one comprising the very rich and powerful, while in another are found the toiling poor.

As we view the achievements of aggregated capital, we discover the existence of trusts, combinations, and monopolies, while the citizen is struggling far in the rear or is trampled to death beneath an iron heel. Corpcrations, which should be the carefully restrained creatures of the law and the servants of the people, are fast becoming the people's masters.

Still, congratulating ourselves upon the wealth and prosperity of our country, and complacently contemplating every incident of change inseparable from these conditions, it is our duty as patriotic citizens to inquire, at the present stage of our progress, how the bond of the government made with the people has been kept and performed.

Instead of limiting the tribute drawn from our citizens to the necessities of its economical administration, the government persists in exacting, from the substance of the people, millions which, unapplied and useless, lie dormant in its Treasury. This flagrant injustice, and this breach of faith and obligation, add to extortion the danger attending the diversion of the currency of the country from the legitimate channels of business.

Under the same laws by which these results are produced, the government permits many millions more to be added to the cost of the living of our people and to be taken from our consumers, which unreasonably swell the profits of a small but powerful minority.

The people must still be taxed for the support of the government under the operation of tariff laws. But to the extent that the mass of our citizens are inordinately burdened beyond any useful public purpose, and for the benefit of a favored few, the government, under pretext of an exercise of its taxing power, enters gratuitously into partnership with these favorites to their advantage and to the injury of a vast majority of our people.

This is not equality before the law.

The existing situation is injurious to the health of our entire body politic. It stifles, in those for whose benefit it is permitted, all patriotic love of country, and substitutes in its place selfish greed and grasping avarice. Devotion to American citizenship for its own sake and for what it should accomplish as a motive to our nation's advancement and the happiness of all our people is displaced by the assumption that the government, instead of being the embodiment of equality, is but an instrumentality through which especial and individual advantages are to be gained.

The arrogance of this assumption is unconcealed. It appears in the sordid disregard of all but personal interests, in the refusal to abate for the benefit of others one iota of selfish advantage, and in combinations to perpetuate such advantages through efforts to control legislation and improperly influence the suffrages of the people.

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