administrations, when Alexander Hamilton was in charge of the Treasury portfolio. 181-186. 250. Appropriation Bills. Every regular session of Con- Number of gress brings with it general appropriation bills, and many tions comappropriaspecial bills dealing with the expenditures upon rivers and mittees. harbors, the army, the navy, and other subjects. At the present time fourteen committees have charge of the dif- McConachie, Cong. Comferent bills upon expenditures. As they are not obliged to mittees, work together, and do not make a special effort to have the appropriations equal the government's income, there is either a considerable surplus or a large deficit shown on the Nation's balance sheet. The President has very little control over appropriation bills, because he must accept or reject them as a whole, since he does not have the power conferred on most of the state governors (§ 95) of vetoing particular items. Wilson, Cong. Gov't, 163-169. It is customary for the Secretary of the Treasury to have the chief Treasury officials of the Treasury and other departments make, in the fall of each estimates. year, estimates of the amount of money needed for the year beginning the first of the following July. These estimates are bound together, and sent with the Secretary's report to Congress when it meets. These estimates are assigned to the proper committees, and are usually the bases of the committees' reports, but the committees are not bound by the estimates of the executive departments. When a bill making ap- Appropriapropriations is reported to the House, that body considers it in Com- tion bills in mittee of the Whole on the State of the Union. In times past this Congress. consideration has been careful and thorough, but with the multiplication of appropriation bills the House has given less attention to the subject. It might be stated that the committees usually recommend a much smaller amount than that asked in the estimate. In the Senate an appropriation is likely to be increased, and, finally, when the conference committee reports, it is probably the close of the session, and the conference bill is passed without much debate on its merits. of interest. 251. Borrowing Money by issuing Bonds. At all times Amount when government expenses are not met by the ordinary and rate receipts, and these times always come in war and sometimes during peace, especially during a business depression, Adams, Finance, 547-553. Real nature of national debt. Bullock Adams, Greenbacks. Dewey, Hist. of U.S., it is necessary for the government to borrow money. This is usually done by issuing bonds that bear a certain rate of interest and are payable in twenty or thirty years. These bonds are sold publicly to the highest bidders. During the Civil War, bonds to the value of several thousand million dollars were sold, often with great difficulty. Most of these bonds bore six per cent interest and were payable after five or ten years. At present the public debt of the United States includes nearly a billion dollars' worth of bonds payable twenty or thirty years from date of issue. Of these over three fourths are at two per cent. As the three, four, and five per cent bonds are far above par, that is, sell for much more than their face value, we can easily perceive that the credit of our national government is excellent; in fact, no government in the world is able to obtain a lower rate of interest or finds its bonds in greater demand. Many people advocate a national debt as a "public blessing," but the ablest financiers deplore the increase of public debt except for necessary investments or in time of crisis. When, as in the case of the United States, the revenues have usually exceeded the expenditures, a debt is not serious. None of the other great nations have a per capita debt smaller than that of the United States, for our national indebtedness is less than $15 for each inhabitant. 252. Borrowing Money by issuing Treasury Notes.—If we take the pains to examine a $5 "greenback," we shall see that it is a promise on the part of the United States to pay the holder $5. It is in reality a note, issued by the Treasury Department instead of by an individual, but which circulates as money. These notes were issued first during the Civil War, when the government experienced considerable difficulty in obtaining revenue and in selling bonds. They were made a legal tender; that is, no person could refuse to accept them in payment of a debt unless his contract called for payment in a certain kind of money. By using them, the United States borrowed nearly $450,000,000 dur ing the War of Secession. After the war, many people thought that the greenbacks should be retired because the Constitution does not give Congress the right to issue paper money, but the Supreme Court decided first that Congress might issue greenbacks in time of war, and later stated that they might be issued in time of peace, also. Consequently, only part of the Civil War issues were retired, and the government is still in debt to those persons who still hold greenbacks, to the amount of more than $200,000,000. The continental currency issued during the Revolutionary War was Continental in the form of treasury notes. As the credit of the government was currency. poor, they became almost valueless, so that the expression "not worth a continental," passed into a proverb. During the Civil War, the issues of treasury notes were so large that a greenback was worth much less than a gold coin of the same denomination, and at one time a dollar in gold would purchase as much as $2.85 in paper. General References Hart, Actual Government, pp. 394-429. Plehn, Public Finance. Adams, Science of Finance, pp. 467-564. Daniels, Elements of Finance. Bullock, ed., Selected Readings in Public Finance, pp. 1-92, 280306, 425-584. Topics 1. THE TAXES OF THE CIVIL WAR: Dewey, Financial History of United States, pp. 299-306; Howe, United States Internal Revenue System, pp. 50-81; Bolles, Financial History of the United States, 1861-1885, pp. 159-196. 2. INCOME TAX OF 1894: Howe, Internal Revenue System, pp. 233-252; Seligman, E. R. A., in Forum, 19 (1895), 48-56; Edmunds, G. F., in Forum, 19, 513-520; Whitney, E. B., in Forum, 19, 521-531; Boutwell, G. S., in North American Review, 160 (1895), 589-601; anon. in North American Review, 160, 601-606; Larned, ed., History for Ready Reference, VI, pp. 554-557. Dewey, Hist., §§ 15-17. Studies 1. National expenditures, in Political Science Quarterly, Renick, E. J., 6 (1891), 248-281; Thompson, N. H., 7 (1892), 468–482. 2. American war financiering. Adams, H. C., in Political Science Quarterly, 1 (1886), 349-385; Plehn, Public Finance, 354-374. 3. Financial aspects of the customs revenue. Hoxie, R. F., in Bullock, ed., Public Finance, pp. 425-448. 4. Customs court. Robertson, W. A., in Forum, 29 (1900), 54–62. 5. How customs duties work. Shriver, E. J., in Political Science Quarterly, 2 (1887), 265-273. 6. The Spanish-American War taxes. West, M., in Review of Reviews, 18 (1898), 48–52. 7. Moonshiners and their ways. Brewer, W. M., in Cosmopolitan, 23 (1897), 127-134. 8. Proposed taxation of interstate commerce. Adams, H. C., in Review of Reviews, 19 (1899), 193–198. 9. Our national debt, historical and descriptive. Austin, O. P., in North American Review, 175 (1902), 566–576, 701–720. Questions 1. Name the articles from which most of our customs duties is now derived. (Newspaper almanacs.) 2. Have we a national tax now on any commercial transactions ? To what taxes is the progressive principle applied ? 3. Make a table showing the revenue derived from each source during the last fiscal year. Do the same for the expenditures. Does the proportion of any items seem unjust? 4. What serious defects are noted in the methods used by Congress in the control of finance ? CHAPTER XX REGULATIONS AFFECTING INTERNAL COMMERCE gov powers of Congress. 253. Extent of Commercial Powers. In addition to the Commercial control of foreign commerce (§§ 232-236), the national ernment has charge of interstate commerce, makes bankruptcy laws,1 and provides a uniform system of currency for the transaction of business. Not only does Congress have the right to "coin money," regulate the value thereof, and punish persons who counterfeit the currency, but the States are expressly forbidden to "coin money, emit bills of credit, or make anything but gold and silver coin a tender in payment of debts." The currency of the country may be used as a means for raising revenue (§ 252) or assisting the government in its operations, but its fundamental purpose is to aid in the exchange of goods from one person to another. In order that people doing business may have a currency Need of a upon which they can rely, the whole subject of money is left to the charge of government, with the idea of obtaining the best results for all concerned. The government must 1 Although Congress has power under the Constitution to make bankruptcy laws, only four had been passed since 1787, no one of which was in force more than eleven years. The States, meanwhile, were permitted to pass insolvent laws which could apply only to debts incurred after the law was passed and to debts owed by a citizen of one State to a citizen of the same State. National bankruptcy laws, on the contrary, absolve a debtor from all legal obligation to pay any of his debts, past as well as future, upon division of his property among his creditors. The present law, passed in 1898, makes a distinction between voluntary bankrupts and involuntary bankrupts. Any person in debt, except a corporation, may voluntarily become a bankrupt unless he has failed within the six years preceding. Any persons, except laborers, farmers, and national banks, who owe $1000 or more, may be tried in a district court of the United States and adjudged bankrupts. Constitution, Art. I, § 8, cls. 3, 5, 6; § 10, cl. 1. uniform currency. |