The National Revenues; A Collection of Papers by American Economists (Paperback)

Purchase of this book includes free trial access to www.million-books.com where you can read more than a million books for free. This is an OCR edition with typos. Excerpt from book: SURPLUS FINANCIERING. By Professor Hekry C. Adams, Of The University Of Michigan. Upon one point, at least, there can be no dif- 1 ference of opinion with regard to the present financial situation of the United States. It is universally agreed that the federal government must spend, in some manner, all the moneys collected in the form of taxes. This necessity is imposed upon it by the fact that trade would be impeded were any considerable part of the accustomed amount of money withdrawn from circulation. There is now about $1,600,000,000 of money in circulation. Should the revenue laws remain unchanged, and no appropriations more than ordinarily extravagant be made by Congress at the present session, the surplus revenue for the coming year will probably amount to $125,000,000, or about one-twelfth of the total circulation. Now it is mere confession of ignorance to say that a contraction of currency equal to one-twelfth of its amount within a year can do no harm to trade. It would tend to bring about a stringent money market, and would probably precipitate a commercial crisis. Or should these evils be obviated by extraordi- nary exertions on the part of the banks, it would yet introduce into trade an element of uncertainty, and rest like a dead weight upon all business enterprises. The fact thus disclosed, that the government cannot hoard its surplus funds, suggests the true statement of the financial problem. The maintenance of surplus revenue means the continuance of surplus expenditures; and the queV tion at issue is: ? Shall Congress open up new avenues for the disbursement of its excessive income, or shall it reduce the income by reducing taxes ? Turning our attention for the present to the first alternative, there are three suggestions: First, the money may be ap...