History of Buchanan County, Iowa, with illustrations and biographical sketches, Part 130

Author: Williams bros., Cleveland, pub. [from old catalog]; Riddle, A. G. (Albert Gallatin), 1816-1902
Publication date: 1881
Publisher: Cleveland, Williams brothers
Number of Pages: 574

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But this expectation has utterly failed. All railroad experience has verified the truth of George Stephenson's aphorism, that "when com- bination is possible, competition is impossible." Great Britain has gone much farther into the study of this question than we have, and the result of her latest study is thus expressed in the London Quarterly Review of April last :

By the common consent of all practical men competition, the ordinary sefeguard of the public in matters of trade, has ceased to offer the slightest protection (except in a few unimportant cases of rival sea traffic) against railway monopolies.

In spite of the efforts of parliament and parliamentary commissions, combinations and amalgamation have proceeded at the instance of the companies, without check and almost without regulation. United systems now exist, constituting by their magnitude and by their exclu- sive possession of whole districts, monopolies to which the earlier authorities would have been strongly opposed. Nor is there any reason to suppose that the progress of combination has ceased, or that it will cease until Great Britain is divided between a small num- ber of great companies.

The article concludes with this striking paragraph:

"We have tried the laisses faire policy and it has failed; we have tried a meddlesome policy, and it has failed also. We have now to meet the coming day, when all the railways, having completed their several systems, may, and probably in their own interests will, combine together to take advantage of the public. In the face of this contin- gency we have simply to make our choice between two alternatives; either to let the State manage the railways, or let the railways manage the State."

And here we leave him as abruptly as we began.

Were I compiling a hand-book for the campaign, I should include the paper-pulp speech.

CHAPTER VII.

GARFIELD AS A FINANCIER.

Appropriation .- Expenditure. - Budgets. - Study of the Subject .-

Committee Laws of Expenditure .- Cost of War .- When they will disappear in Our Case .- Speech 1872 .- Speech 1874 .- Episode .- Flat- heads.

The Forty-second congress is to be forever distinguished as that in which the vast and complex system of public expenditure was to be established on a basis of sound financial principles, with perspicuous rules of method and order, for the guidance of the labors of those to whom the great task of framing the appropriation bills for the national expenditures might be imposed. The services of James .1. Garfield in this field are more un- known to his countrymen, and less appreciated than those of almost any statesman known to our history, the fruit of whose hidden work the people have un- consciously enjoyed. To them these pages will be a revelation. We have already seen him mastering and unfolding the subject of finance and taxation; immedi- ately connected with expenditure, always united in the hand of the English chancellor of exchequer; he is now to develop expenditure, and appear in the character of the first and greatest American chancellor of the excheq uer of our parliamentary history; he is himself to undergo slight mental modification, exuberance of expression, the little expressions of fancy, happy efforts of memory in quotation, which waited on his earlier efforts on the floor, are exorcised, and at the end of the Forty-third congress he went forth, not a deeper, higher, or stronger man, but one, on the whole more compacted and indu- rated, holding himself more perfectly in his own hand. He was placed at the head of the committee on appro- priations, with Aaron A. Sargent, Oliver J. Dickey, Free- man Clark, Frank W. Palmer, Eugene Hale, Wm. E. Niblack, Samuel S. Marshal, and Thomas S. Swan, selected with the care which indicated the accurate knowledge of men of the speaker of the house., The duties of the committee were a part of the labors of the ways and means, until the Thirty-ninth congress, when the appropriation was created. The annual expenditure was provided for in twelve bills, and their consideration in the two congresses, under Garfield, occupied a third of the time of the house. It was a privileged com- mittee, might sit during the sessions of the house, and its business always in order, subject to the will of the house.

The first labor of the chairman was personal qualifica- tion. Here he always began. His knowledge was al- ready large and accurate. He went to the great reservoir

LIFE OF JAMES A. GARFIELD.

English history, usage and method. He read the budget speeches of the chancellors of the exchequer for twenty years; studied their various methods, their grasp of their subjects, arrangements, presentations and explanations ; studied their estimates, and what if any were their funda- mental rules, and mastered the history of their expendi- ture during long periods of time.

Then he took up our own which was scanty enough. He studied the appropriations themselves, with their re- lations to the extent of population and business of the people. He found that for a long time, it was the usage to appropriate a given sum in solido for the government at large, with no reference to the different departments ; that in time came a general division of a sum for each department; then subdivisions for the bureaus, and further, subdivisions for groups of items, and finally all were itemized, and a specific sum designated for each Of these were born the whole brood of deficiencies, against which no attained knowledge and skill have yet devised a safeguard. These divisions and sub- divisions, the further they were intelligently carried, be- came the safeguards more and more effective, for the protection of the treasury, against the wash of that great flood which had hitherto by its volume and current, swept away the unguarded moneys.

Then he took up the baffling matter of wastes and their causes, lapses, surpluses and deficiencies. All this was machinery ; mechanics, administration, surpluses and deficits involved principles. Below lay the great question of the laws of public expenditure. Upon what did they rest? What should govern expenditure? What had? In England there was an obvious relation between expenditure and population, engaged as the English were in their vastly diversified employments. In America the same relation was found to exist, modified by its wider expansion, and the condition of the territory it occupied. From these he deduced the rate of expense in time of peace. He found that war was constantly breaking in, breaking up everything, devouring everything, and de- manding new and extraordinary revenues, disarrang- ing all the sources of income, and compelling a resort to new methods, often of credit or loan supply, the burdens of which would remain after their cause had ceased. What, then, does war do? What are its effects as a mat- ter of pure finance, upon expenditure and the sources of revenue? His labor was limited to expenditure. He made wide and several inductions, as history offered the means.

sum would represent the probable period, at which the expenditure would be near what it was when the war began, having reference to the rule of population, and in this country, its proportion to the country it covered. In this estimate, another thing came in for consideration.

Upon the conclusion of the war, in determining at what period the ante bellum rate of expenditure will be reached, it became necessary to distinguish between what items of expense were due wholly to the war, and what were incident to peace only, and what partook of both. As time advances, under a wise administration, the for- mer would diminish, and more nearly approximate equal- ity with the sum required for peace, which in turn would constantly be on the i. crease. The intersection of the war descending line, with the rising peace margin would mark the point, below which their united volume would never descend. The rise of the peace expenditure, would compensate the decrease of that for war. The time for this cutting of the lines, he calculated, would, in our present case, be reached in 1876.

Upon this theory of expenditure, he formed his first budget. The general soundness of it was confirmed by the experience of the two congresses, during which he presided over expenditure, and the system and methods thus introduced, have not been widely departed from since.

Some further words will explain the basis of his per- sonal relations with the gentlemen of his committee, and the methods he employed to secure from each his best efforts in the common cause. Hitherto it was the rule of the senate, and in a modified form of the house also, that all the members of the committee were the practical subordinates of the head. He commanded a company of privates-was the one figure on the floor-the chief, absorbing all the credit and notoriety the place gave him.

Garfield introduced a new practice, and with it new life and efficiency in his company. Here, too, he drew on his own experience and early observation. When first one of the Hiram corps of teachers, the chief had a way of absorbing and drawing to himself the credit due to his several lieutenants. The evil as well as in- justice of it, was seen and felt by the young professor of languages. When he succeeded to the headship, in in- terviews with each of the professors and teachers, he commended them for such merit as they had, and urged them severally to go forward on their appointed ways, making and wearing their own fames. The institution sprang into new life and vigor. When expostulated with, as diminishing his own reputation and importance, he answered, "See what it is doing for the college." It

This, to him, seemed the rule. Take a given public war, mark the average of expenditure before it began, note its continuance in time, double this time, and the | was effective service that he wanted. He knew men, and

GARFIELD AS A FINANCIER.

secured it, leaving to others to care for his reputation.

He early unfolded his views of expenditure to his associates. He then explained his idea of their rela- tions to him, and to each other. Of the twelve great bills, one at least, was committed to each of the nine, to whom it was delivered by the chief, with all the infor- mation he had, and full suggestions as to the best method of dealing with it. A discriminating reduction of the estimates was the standing order, each man to go to all the departments, heads of bureaus, and down to the hid- den, unknown men, who did know, all this informa- tion to be gathered, noted, collated and filed. When the man's bill was perfected and passed upon, he re- ported it, had the charge of it on the floor, made the opening speech, and the closing argument, with his chief and associates present, a trained, intelligent, armed band, acting in concert, ready to aid when needed-until then remaining silent. The work and credit of it thus were the task and property of the given man. The commit- tee without reference to party lines, at once came to be a band of friends, standing closely about the chief whom they loved, never differing or jealous, always effective on the floor, and useful in committee.

For himself, Garfield took largely the care of the re- maining bills, while each member was prepared to aid him and all the others.

On the introduction of his leading bill, the chairman took occasion to unfold his general views, which he did on the twenty-third of January, 1872. From this I quote nearly all which is an exposition of his views.

Mr. Chairman: In opening the discussion of this bill, I realize the difficulties which at all times attend the work of making appropriations for carrying on this government. But there are more than ordinary difficulties attending the work of a chairman who succeeds to a position which has been so adorned as has the chairmanship of the committee on appropriations during the last two years .* The most 1 can now venture, is to express the hope that by the generous aid of my col- leagues on the committee, and the support of the house, I may be able to follow, at a humble distance, in the path my predecessor has traveled.

I would not occupy any time this morning in the preliminary discus- sion of this bill, but for the fact that this general appropriation bill, more than any other of the eleven which will come before the house, embraces in its scope nearly the whole civit establishment of the gov- ernment. The approval of this bill is, in a certain sense, the approval of the whole system to which the other appropriations will refer. If our general plan of appropriations ought to be attacked, this is the place to begin. If they have a sufficient reason for being in the main what they are, that sufficient reason can be given for the passage of this bill substantially as it stands in the print before us. I therefore beg the indulgence of the committe while I call attention to a few ques- tions which have arisen in my mind during the study I have given the subject.

RELATION OF EXPENDITURES TO THE GOVERNMENT.

And first of all, I will consider what part expenditures play in the affairs of the government. It is difficult to discuss expenditures com- prehensively without discussing also the revenues ; but I shall on this occasion allude to the revenues only on a single point. Revenue and the expenditure of revenue form by far the most important element in the government of modern nations. Revenue is not, as someone has said, the friction of a government, but rather its motive power. With- out it the machinery of a government cannot move ; and by it all the movements of a government are regulated. The expenditure of rev- enue forms the grand level from which all heights and depths of legis- lative action are measured. The increase and the diminution of the burdens of taxation depend alike upon their relation to this level of ex- penditures. That level once given, all other policies must conform to it and be determined by it. The expenditure of revenue and its dis- tribution, therefore, form the best test of the health, the wisdom, and the virtue of a government. Is a government corrupt, that corruption will inevitably, sooner or later, show itself at the door of the treasury in demands for money. There is scarcely a conceivable form of cor- ruption or publie wrong that does not at last present itself at the cash- ier's desk and demand money. The legislature, therefore, that stands at the cashier's desk and watches with its Argus eyes the demands for payment over the counter, is most certain to see all the forms of publie rascality. At that place, too, we may feel the Nation's pulse ; we may determine whether it is in the delirium of fever or whether the currents of its life are flowing with the steady throbbings of health. What could have torn down the gaudy fabric of the late government of France so effectually as the simple expedient of compiling and publish- ing a balance sheet of the expenditures of Napoleon's government, as compared with the expenditures of the fifteen years which preceded his reign? A quiet student of finance exhibited the fact that during fifteen years of Napoleon's reign the expenditures of his government had been increased by the enormous total of three hundred and fifty million dol- lars in gold per annum.

HOW SHALL EXPENDITURES BE GAUGED?

Such, in my view, are the relations which the expenditures of the revenue sustain to the honor and safety of the Nation. How, then, shall they be regulated? By what gauge shall we determine the amount of revenue that ought to be expended by a nation? This question is full of difficulty, and 1 can hope to do little more than offer a few sug- gestions in the direction of its solution.

And, first, I remark that the mere amount of the appropriations is in itself no test. To say that this government is expending two hundred and ninety-two million dollars a year, may be to say that we are penu- rious and niggardly in our expenditures, and may be to say that we are lavish and prodigal. There must be some ground of relative judgment, some test by which we can determine whether expenditures are reason- able or exorbitant. It has occurred to me that two tests can be applied.

TEST OF POPULATION.

The first and most important is the relation of expenditure to the population. In some ratio corresponding to the increase of popula- tion it may be reasonable to increase the expenditures of a government. This is the test usually applied in Europe. In an official table I have before me the expenditures of the British government for the last fifteen years, I find the statement made over against the annual average of each year of the expenditure per capita of the population. The aver- age expenditure per capita for that period, was two pounds, seven shil- lings and seven pence, or about twelve dollars in gold, with a slight tendency to decrease each year. In our own country, commencing with 1830 and taking the years when the census was taken, I find that the expenditures, per capita, exclusive of payments on the principal and interest of the public debt were as follows:

* Mr. Dawes, now in the senate.

LIFE OF JAMES A. GARFIELD.

In 1830 $1 03

In 1840 I 41

In 1850 I 60

In 1860 1 94

In 1870 4 26

or, excluding pensions, three dollars and fifty-two cents. No doubt this test is valuable. But how shall it be applied? Shall the increase of expenditures keep pace with the population? We know that popu- lation tends to increase in a geometrical ratio, that is, at a per cent. compounded annually. If the normal increase of expenditures follows the same law, we might look forward to the future with alarm. It is manifest, however, that the necessity of expenditures does not keep pace with the mere increase of numbers; and while the total sum of money expended must necessarily be greater from year to year, the amount per capita ought in all well-regulated governments in time of peace to grow gradually less.

TEST OF TERRITORIAL SETTLEMENT AND EXPANSION.

But in a country like ours there is another element besides popula- tion that helps to determine the movement of expenditures. That ele- ment can hardly be found in any other country. It is the increase and settlement of our territory, the organic increase of the Nition by the ad- chition of new States. To begin with the original thirteen States, and gauge expenditure till now by the increase of population alone, would be manifestly incorrect. But the fact that there have been added twenty-four States, and that we now have nine territories, not includ- ing Alaska, brings a new and important element into the calculation. It is impossible to estimate the effect of this element upon expendi- tures. But if we examine our own records from the beginning of the government, it will appear that every great increase of settled territory has very considerably added to the expenditures.

If these reflections be just, it will follow that the ordinary movement of our expenditures depends upon the action of two forces: first, the natural growth of population, and second, the extension of our terri- tory and the increase in the number of our States. Some day, no doubt-and I hope at no distant day-we shall have reached the limit of territorial expansion. I hope we have reached it now, except to en- large the number of States within our borders; and when we have set- tled our unoccupied lands, when we have laid down the fixed and cer- tain boundaries of our country, then the movement of our expenditure in time of peace will be remitted to the operation of the one law, the increase of population. That law, as I have already intimated, is not an increase by a per cent. compounded annually, but by a per cent. that decreases annually. No doubt the expenditures will always in- crease from year to year; but they ought not to increase by the same per cent from year to year; the rate of increase ought gradually to grow less.

EXPENDITURES OF ENGLAND.

In England, for example, where the territory is fixed, and they are remitted to the single law of increase of population, the increase of ex- penditure during the last fifteen years of prace has been only about one and three-quarter per cent. comp unded annually. I believe nobody has made a very careful estimate of the rate in our country; our growth has been too irregular to afford data for an accurate estimate. But a gentleman who has given much attention to the subject expressed to me the belief that our expenditures in time of peace have increased about eight per cent. compounded annually. I can hardly believe it; yet I am sure that somewhere between that and the English rate will be found our rate of increase in times of peace. I am aware that such estimates as these are unsatisfactory, and that nothing short of the ac- tual test of experience can determine the movements of our expendi- tures; but these suggestions, which have resulted from some study of the subject, I offer for the reflection of those who care to follow them out.

EFFECTS OF WAR ON EXPENDITURES.

Thus far I have considered the expenditures that arise in times of peace. Any view of this subject would be incomplete that did not in- clude a consideration of the effect of war upon national expenditures. I have spoken of what the rate ought to be in time of peace, for carry- ing on a government. I will next consider the effect of war on the rate of increase. And here we are confronted with that anarchic element, the plague of nations, which Jeremy Bentham called "mischief on the largest scale." After the fire and blood of the battle-fields have disap- peared, nowhere does war show its destroying power so certainly and so rentlessly as in the columns which represent the taxes and expendi- tures of the nation. Let me illustrate this by two examples.

In 1792, the year preceding the commencement of the great war against Napoleon, the expenditures of Great Britain were less than twenty million pounds sterling.

During the twenty-four years that elapsed, from the commencement of that wonderful struggle until its close at Waterloo, in 1815, the ex- penditures rose by successive bounds, until, in one year near the close of the war, it reached the enormous sum of one hundred and six million seven hundred and fifty thousand pounds.

The unusual increase of the public debt, added to the natural growth of expenditures from causes already discussed, made it impossible for England ever to reach her old level of expenditure. It took twenty years after Waterloo to reduce expenditures from seventy-seven million seven hundred and fifty thousand pounds, the annual average of the second decade of the century, to forty-five million seven hundred and fifty thousand pounds, the expenditure for 1835.

This last figure was the lowest England has known during the pres- ent century. Then followed nearly forty years of peace, from Waterloo to the Crimean war in 1854. The figures for that period may be taken to represent the natural growth of expenditures in England. During that period the expenditures increased, in a tolerably uniform ratio, from forty-five million seven hundred and fifty thousand pounds, the amount for 1835, to about fifty-one million seven hundred and fifty thousand pounds, the average for the five years ending 1853-54. This increase was about four million dollars of our money per annum. Then came the Crimean war of 1854-1856, during one year of which the expenditures rose to eighty-four million five hundred thousand pounds.

Again, as after the Napoleonic war, it required several years for the expenditures of the kingdom to get down to the new level of peace, which level was much higher than that of the former peace.

During the last ten years the expenditures of Great Britain have again been gradually increasing ; the average for the six years ending with March 31, 1871, being sixty-eight million seven hundred and fifty thousand pounds.

WAR EXPENDITURES OF THE UNITED STATES.

As the second example of the effect of war on the movement of national expenditures, I call attention to our own history.

Considering the ordinary expenses of the government, exclusive of payments on the principal and interest of the public debt, the annual average may be stated thus :

Beginning with 1791, the last decade of the eighteenth century showed an annual average of three million seven hundred and fifty thousand dollars. During the first decade of the present century, the average was nearly five million five hundred thousand dollars. Or, commencing with 1791, there followed twenty years of peace, during which the annual average of ordinary expenditures was more than doubled. Then followed four years, from 1812 to 1815, inclusive, in which the war with England swelled the average to twenty-five million five hundred thousand dollars. During the five years succeeding that war, the average was sixteen million five hundred thousand dollars;

GARFIELD AS A FINANCIER.

and it was not until 1821 that the new level of peace was reached. During the five years, from 1820 to 1825, inclusive, the annual average was eleven million five hundred thousand dollars. From 1825 10 1830 it was thirteen million dollars. From 1830 to 1835 it was seventeen mill- ion dollars. From 1835 to 1840, in which period occurred the Semi- nole war, it was thirty million five hundred thousand. From 1840 to 1845, it was twenty-seven million dollars. From 1845 to 1850, during which occurred the Mexican war, it was forty million five hundred thousand dollars. From 1850 to 1855, it was forty-seven million five hundred thousand dollars. From 1855 to June 30, 1861, it was sixty- seven million dollars. From June 30, 1861, to June 30, 1866, seven hundred and thirteen million seven hundred and fifty thousand dollars; and from June 30, 1866, to June 30, 1871, the annual average was one hundred and eighty-nine million dollars.

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History of Buchanan County, Iowa, with illustrations and biographical sketches, Part 130

Author: Williams bros., Cleveland, pub. [from old catalog]; Riddle, A. G. (Albert Gallatin), 1816-1902 Publication date: 1881 Publisher: Cleveland, Williams brothers Number of Pages: 574

Author: Williams bros., Cleveland, pub. [from old catalog]; Riddle, A. G. (Albert Gallatin), 1816-1902
Publication date: 1881
Publisher: Cleveland, Williams brothers
Number of Pages: 574