Chapter XXXI: Conclusion (4)

As we have before remarked, the settled plan for raising revenue for the support of the general government, is by import duties. By common consent this plan has been accepted as the most feasible. While we have been following this method from the organization of our government, by legislation we have been making war upon foreign commerce, by imposing tariffs for the protection and government of domestic manufactures. By congressional enactment, we determine that we will support the government by the collection of duties levied upon foreign imports; and then we levy high rates of duties for the purpose of prohibiting these foreign imports, and for building up and protecting home manufactures. Under the present tariff, but for the fact that our own manufacturers take advantage of the high rate of duties, and advance the price of their own products, to the extent of the duty, foreign importations would cease, and some other means would have to be adopted to supply the revenue needed by the government. The only benefit thus far resulting from our present high tariff is the enriching of a few men by the imposition of unjust and unequal burdens upon the farming and producing classes. It might be pertinent to inquire whether there is any justice in any kind of tariff. All are bound to contribute their _pro rata_ share for the support of the government. In theory the property of the country is taxed for this purpose. Such a system of taxation is just and equitable, because it is uniform; the property of each individual pays its _pro rata_ share, and the burden is equally divided. As we have already shown, revenue derived from tariffs is a tax upon the labor of the citizen, and not on the wealth or property of the country. The poor man, the man who depends entirely upon his daily labor for the support of himself and family, pays as much for the support of the government as the man of immense wealth. His daily toil, considered in the light of its value to the government, is taken as equivalent to the $500,000 of the rich man. The industry and not the wealth of the country is made to support the government when the revenue is derived from import duties. No one will deny the right of the general government to provide for its own support, nor its right to provide means to this end by the levy of import duties; yet the wisdom of these duties does not so clearly appear. The reader will have noticed that this method of raising revenue operates unequally; that it gives to American manufacturers an absolute monopoly of business; that the only reason why imports do not cease is because the prices of American fabrics have been arbitrarily raised to the highest point allowable without permitting the importer to undersell the home-made article. The manufacturers, under the statute, having a complete monopoly, are not slow in availing themselves of it, and, as a natural result, the whole country is compelled to contribute to their support. It may be asked: How would you provide for the support of the government? We answer, by direct taxation, because this is a just and equitable manner of raising revenue, compelling the wealth and property of the country, and not the labor of the toiling millions, to support the government. Because it will prove less expensive, and will do away with custom houses and custom house officers, with the frauds, swindling, and robbery, that now afflict the country. Because it will open to us the markets of the world, and give us an outlet and market for our agricultural products. Now the balance of trade is against us; our country is being drained of its coin and its wealth; all productive industries languish, because of our selfish policy of attempting to become exclusive in our commerce.

We are content to trammel all dealings with foreign nations in the way of barter, sale, and exchange, and send our coin to Europe, while we use, as the representative of money, an irredeemable paper currency. Free trade would enable us to increase our commerce and shipping on the ocean; to arrest the stream of coin that is flowing from us to Europe; to sell where we could obtain the best prices, and buy where we could make the best bargains. We are in favor of direct taxation for the support of the government, because it will simplify our revenue system, and consequently require less revenue than is now needed. It will compel more rigid economy in the administration of the government, and place within the reach of the people the means of ascertaining how much is annually expended by those in power. It will destroy one branch of the system of monopolies that is robbing the agricultural and producing classes of their substance. Let us not become alarmed at the thought of this direct taxation. We accept it as the best method for raising revenue for the support of state and municipal government, and no good reason can be shown why the same method would not be best for the general government. The amount to be paid by the men of wealth would be in excess of what they now pay, because their property, and not what they consume, would be the basis of taxation. But to the laborer with a family, the mechanic, the farmer with small means, and to a majority of men who now pay in shape of duties from $100 to $200 annually, the amount required would be but a tithe of the sum now demanded. To learn something of the rate per cent necessary to support the government, let us look at the valuation of the property in the United States as returned with the census in 1870. The actual amount as returned was $14,178,486,732, call it in round numbers $15,000,000,000; a tax of one per cent on this amount would produce a revenue of $150,000,000. The above valuation is taken mainly from the returns made by assessors, and is but little more than one-third of the real value. Let us double the amount, then the value of the property in the United States will be $30,000,000,000. By an examination of the returns it will be seen that but little railroad property is included in the valuation. If this property is added, the above amount will be largely increased. By supposing the real value of the assessable property to be $30,000,000,000; then a tax of one-half per cent would raise a revenue of $150,000,000, a sum sufficient to pay all the necessary current expenses of the government and leave something to apply on the national debt. A tax of three-fourths per cent would raise a revenue of $225,000,000, enough to support the government and pay the interest on the whole of the national debt. Should the special tax be continued on spirits and tobacco, then a tax of four mills would raise a sufficient revenue for all legitimate governmental purposes. Now, a laboring man must pay from the proceeds of his labor from thirty per cent upwards for almost all his purchases of clothing for his family, and the same on many other articles of consumption. If, in the course of a year, he purchases to the amount of $150, of this sum, $50 is paid, indirectly, it is true, but nevertheless it is paid, and is a tax. With direct taxation, if his homestead should be worth $1,000, instead of paying $50 as he now does, he would pay five for the support of the government, and the other forty-five dollars now paid by him from the proceeds of his labor would be charged against the property of his rich neighbor. There is no injustice in this method of raising revenue for the support of the government, and its adoption would relieve the people from the oppressions of a ring of wealthy monopolies who now control the entire manufacturing industries of the country, and would allow the laws of trade, of demand and supply, to fix the prices of manufactured articles. No reason now exists for the continuance of a law that assures to the manufacturer large dividends on his investments, while the farm products must be sold and bartered for a nominal price. The producer asks no protection save access to the market and the privilege of keeping for his family and himself the net proceeds of his crops, without being compelled to bestow one-third of it as a gratuity upon the already rich and lordly manufacturer. This right the agriculturalists will never enjoy until the old anti-republican theory of protective and revenue tariffs is exploded, and the equal rights of all are vindicated. When this tariff embargo on commerce is removed, when this blockade is raised, and the producer can send his grain to Europe, and in return receive such manufactured articles as he needs, without paying _royalty_ to some American lord, in shape of tariffs (ironically called "protection") the producing classes will ask no other aid of government. Then will appear the dawn of that universal brotherhood of man, which sooner or later will illuminate the whole civilized world. With "free trade" and direct taxation, a death blow will be given to monopolists, and the burdens so long borne by the laboring and producing classes will be lifted from them, and they will be permitted to enjoy the fruit of their own labor.

EIGHTH.--_Patent Rights--Cash Payments Recommended in Place of Long Standing Mortgages on the Genius of American Industry._--We have shown some of the abuses connected with the patent system of the country, and their effect upon the people. While the monopoly of inventions is not of as great magnitude as some others of which we have treated, the oppressions resulting from it are more annoying than many that engage general attention. Inventions are patented because they are expected to be of public benefit, and because it is but just that the inventor should be rewarded for a discovery or invention that will advantage the public generally, or individuals who may make use of the invention or discovery. The monopoly given to the inventor, or discoverer, is to enable him to compensate himself for the time, labor, and skill, as well as the talent or genius bestowed upon the invention, and also to encourage others to enter the lists as inventors or discoverers of new and useful articles and principles. But our patent system was never designed for giving a monopoly to any one who happened to shape a plow handle different from those now in use, or who cut a thread used in operating a sewing machine in a peculiar manner, or for the many hundreds of trifling alterations made in many articles in general use, or in the manner of using them. An examination of the list of patents issued will demonstrate that not one in ten contains any new principle, or is of any value to any one, save the patentee. The apparent ease with which patents are obtained, and the indiscriminate manner of their issue, is a great and growing evil that should be remedied. No patent should be issued until a test had demonstrated its perfection and usefulness. An examination of many articles on which letters patent have been issued, coupled with the attempt to use them, discloses the fact that the invention, if it ever could be of any particular value, required further improvement to make it of such value, and that letters patent had been issued for an undeveloped theory. If the invention had been submitted to a practical test, this state of things would not have occurred, and the public would not have been defrauded. Patented articles enter so largely in the prosecution of all industrial pursuits that it is of the utmost importance that they should be perfect in their plans and construction, and that the government should assume some kind of responsibility in all cases when letters patent are issued. Such letters say in substance, that the patented article is new and useful, and that it is reasonably fit for the work in the view of the inventor. These letters patent are a letter of credit to the patentee; as a license permitting him to sell his invention, and forbidding all persons to sell or use the invention without his consent. Under the present law it is simply a special favor, in shape of an exclusive right, granted to an individual to defraud the persons with whom he deals. The law should be so modified as to make the government or the examining officer responsible in all cases when patents issued for pretended discoveries or inventions prove to be neither new nor useful. If such were now the law, there would be less complaint of frauds practiced by pretended inventors, and the utter failure of patented articles to answer the purposes for which they were intended. The law should be so amended as to prevent oppressions and extortions in the sale and use of articles of real merit, for which the inventor should be rewarded, and should have an exclusive right to use and sell his invention. There should be some limit to the price of the article. Government has given him an exclusive right; he should be restricted to such prices as would fairly compensate him for his discovery. His case is not like that of other men, who in their dealings come in competition, and where this competition and the laws of demand and supply fix the prices of the commodities in which they deal. He has the whole business in his own hands, and any attempt on the part of others to interfere with his exclusive right is forbidden and punished. We have already stated that machines sold in this country for $75 could be bought in England for less than half that sum. Most of the articles and machines of different kinds patented in this country, and used in Europe, are sold by the patentees, their agents and assigns, at less than half the sums demanded here at home. In Europe, where they have no monopoly, no exclusive right, they come in competition with others; hence they sell at fair prices. But in this country, where they have an exclusive right, they extort from the purchaser from one hundred to five hundred per cent on the cost of the article. This, government should prevent. But a better way to adjust the whole matter between the public and the inventor would be for the government to pay a premium according to merit, for all new and useful inventions, and remove all restrictions. Let all be free to make, use, and sell, not the invention, but the thing invented. This course would require careful and thorough examination and experiment before the principle was indorsed by the government, and the premium paid. Or, if his invention proved to be new and useful, let government pay to the inventor such sum as would fairly and liberally compensate him, and give the invention to the public. Government has bestowed immense grants of land upon railroad companies, for the avowed purpose of assisting in the development of the country; with greater justice could it bestow upon the whole people all useful discoveries and inventions. Such a course, adopted and executed in good faith, would make it impossible for adventurers, sharpers, and swindlers to impose worthless inventions and pretended discoveries upon the government, and then palm them off upon the people. Under the present system of obtaining letters patent, the people are wronged and often cheated, and for their wrongs the government is mainly responsible. Some other plan should be adopted, which in its operations would liberally compensate the inventor, and at the same time protect the people from extortions practiced by the owners of valuable inventions, and also from the thousands of adventurers who have been so fortunate as to obtain letters patent upon pretended discoveries of principles neither new nor useful, using their letters of credit for the purpose of defrauding the public.