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Inflation of the currency is the source of the chief evils which now disturb us. It is specially the cause of that perturbation of mind which is in fact the greatest evil the country suffers. Except the war, nearly all other troubles are imaginary.… Except in localities where the lines of transportation have been being monopolized by the Government, the real price of provisions is not higher now than it was in the first year of the war.
But it seems so when counted in paper money. If the currency stood still, the evil of its depreciation would soon correct itself. But it is progressive. Hence it unsettles everything and produces countless real inequalities, which are real evils. If Congress could reduce the volume of the currency and keep it to one point, that would relieve the country of more than half its suffering. Of this it is well convinced, and the aim of all its measures is the reduction of the currency. It is not ready, nor is the public mind prepared, for compulsory funding, and has exhausted ingenuity in the construction of more complicated and less effective machinery to attain its results.…
If the currency was already reduced to its proper limits, these measures would be abundantly sufficient to keep it there. They would themselves reduce it, if the expenditure of the Government did not flood the country with Treasury notes even faster than the Funds and the Taxes can absorb. Unfortunately, they are powerless in face of the enormous sum which the extent of the army and the present high comparative price of all that it requires, oblige the Treasury to issue. The taxes will absorb several hundred millions in the year; but the Government continues to issue many hundred millions in the year. Hence the volume of the currency will never grow less; will always grow larger. The inflation will go on despite of all measures for the encouragement of absorption (short of compulsion) which the wit of man can devise; and none need be told where it is going to end.…
There is but a single remedy…which promises relief. It is to make a levy of taxes in kind.–This will at once take the Government out of the market as a purchaser of the heaviest part of its stores and supplies. Consequently, the issue of Treasury notes will be so much diminished, that the absorption caused by the Tax and Currency Bills will be greater than the quantity of new paper thrown on the markets.–The volume of the currency will be rapidly diminished to a manageable amount, and the relative values of gold and everything else restored to their usual state.
…Let us endeavor to explain in a word what is meant by a tax in kind. It signifies the payment to the Government of a certain portion of all that the labor or property of the citizen produces…without its previous conversion into money.… The producer would make a direct gain by paying his tax in produce, without changing it into the shape of money.… The Government would receive this great benefit and advantage from a tax in kind: that it would then be able to stop the issue of new Treasury notes.–… The articles of produce received as the tax of producers would supply the chief, if not the entire consumption of its troops; and what remained of cotton, tobacco, and the like would be so much cash in its hands to purchase in Europe the means of war.–The printing presses which now deluge the land with oceans of paper money which commerce does not require, would rest.…
To such a tax it will be objected that it is cumbrous, inconvenient, and that it cannot be collected by the ordinary agencies which collect the tax money. But it will be discovered that it requires no machinery or operation which the Government is not already obliged to ha[v]e, to supply itself with the necessaries of a vast army in a blockaded country, where interior transportation by individuals has become nearly impossible. The Government has only to unite the agencies which collect the money tax with those which gather the supplies of its armies, and it possesses all the machinery necessary to ascertain and collect a tax in kind.
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