At the commencement of the Rebellion it was the general opinion of
statesmen and financiers in other countries, and the opinion of many
among ourselves, that our resources were inadequate to a long
continuance of the war, and that it must soon terminate under pecuniary
exhaustion, if from no other cause. Our experience has shown that this
view was fallacious. After having sustained for several years the
largest army known to modern times, our available resources seem to be
unimpaired. The country is, indeed, largely in debt; but its powers of
production are so great that it can undoubtedly meet all future demands
as easily as it has met those of the past.
The ability or inability of a nation engaged in war to sustain heavy
public expenses is to be measured not so much by its nominal debt as by
the relation which the sum of its _production_ bears to that of its
necessary _consumption_. A nation heavily in debt may continue to make
large public expenditures and still prosper and increase in wealth, if
its powers of production are correspondingly large also. It is a fact of
the most encouraging kind, that the power of production exhibited by the
United States far exceeds, in proportion to their population, that of
any other nation heretofore involved in a long and costly war. The case
which most nearly approaches ours, in this regard, is that of England,
during her war with Napoleon, from 1803 to 1815. But since the
termination of that long contest, the progress of discovery,
improvements in the machinery and in the processes of manufacture, more
effective implements of agriculture, the general introduction of
railways,[H] and other time- and labor-saving agencies, together with
the constantly increasing influence of the applied sciences, have so
augmented the productive power of humanity, that the experience of the
most advanced nations fifty years ago furnishes no adequate criterion of
what the United States can do now.
It is not easy to determine the precise ratio in which production has
been increased by these instrumentalities. It is unquestionably very
large,--not less, probably, than threefold. That is to say, a given
population, including all ages and conditions, can produce the articles
necessary for its subsistence, such as food, clothing, and shelter, to
an extent three times as great, with these agencies, as it could produce
without them. Hence it appears, that, if the people of the loyal States
could return to the standard of living that prevailed fifty years ago,
the amount of their production would be sufficient to subsist not only
themselves, but twice as many more in addition. To accomplish this, they
would have, indeed, to devote themselves more to the production of
articles of prime necessity and less to those of mere ornament and
luxury. That they have the productive energy necessary to such a result
there can be no doubt.
This encouraging view of our condition is fully sustained by official
statements, which show that the industrial products of the country
increase in a greater ratio than the population. In 1850 the aggregate
value of the products of agriculture, mining, manufactures, and the
mechanic arts, in the United States, was $2,345,000.000. In 1860 the
aggregate was $3,756,000,000. This is an increase in ten years of sixty
per cent, whereas the increase of population during that decade was only
thirty-five and a half per cent. Thus we see that during the ten years
ending with 1860--the date of the last census--the products of the
industry of the country increased almost twice as fast as the population
increased. If to this we add the remarkable fact that the value of
taxable property increased during the same period _a hundred and
twenty-six_ per cent, we have striking proof of the existence of a vast
and rapidly increasing productive power,--a power largely due to the
influence of those improvements which have been alluded to.
One obvious effect of war is to transfer a portion of labor from the
sphere of effective _production_ to that of extraordinary _consumption_.
To what extent the relations of production and consumption among us have
been changed during the present contest it is impossible to state. That
consumption has been largely increased by our military operations is
apparent to all. It is equally apparent that production also has been
augmented, though not, perhaps, to the same extent. The extraordinary
demand for various commodities for war purposes has brought all the
producing agencies of the country into a high state of activity and
efficiency, giving to the loyal States a larger aggregate production
than they had before the war. Of mining and manufactures this is
unquestionably true. As regards the products of the soil, the
Commissioner of Agriculture, in his Report for 1863, says,--"Although
the year just closed has been a year of war on the part of the Republic,
over a wider field and on a grander scale than any recorded in history,
yet, strange as it may appear, the great interests of agriculture have
not materially suffered in the loyal States.... Notwithstanding there
have been over a million of men employed in the army and navy, withdrawn
chiefly from the producing classes, and liberally fed, clothed, and paid
by the Government, yet the yield of most of the great staples of
agriculture for 1863 exceeds that of 1862.... This wonderful fact of
history--a young republic carrying on a gigantic war on its own
territory and coasts, and at the same time not only feeding itself and
foreign nations, but furnishing vast quantities of raw materials for
commerce and manufactures--proves that we are essentially an
agricultural people; that three years of war have not as yet seriously
disturbed, but rather increased, industrial pursuits; and that the
withdrawal of agricultural labor, and the loss of life by disease and
battle, have been more than compensated by _machinery_ and maturing
growth at home, and by the increased influx of immigration from abroad."
In illustration of the character of those agencies to which we owe the
remarkable and gratifying results thus portrayed by the Commissioner, I
give the following official statement in regard to two of the more
prominent modern implements of agriculture. Mr. Kennedy, in his Census
Report for 1860, informs us "that a threshing-machine in Ohio, worked by
three men, with some assistance from the farm hands, did the work of
seventy flails, and that thirty steam-threshers only were required to
prepare for market the wheat crop of two counties in Ohio, which would
have required the labor of forty thousand men." As it took probably less
than two hundred men to work the machines, the immense saving in human
labor becomes instantly apparent.
Again, in his last Patent-Office Report, Mr. Holloway states "that from
reliable returns in his possession it is shown that forty thousand
reapers were manufactured and sold in 1863, and that it is estimated by
the manufacturers that over ninety thousand will be required to meet the
demand for 1864"; and these machines, he says, will save the labor of
four hundred and fifty thousand men.
If the aggregate produce of the loyal States, notwithstanding the large
amount of labor that has been withdrawn from production by the demands
of the war, is actually greater than ever before, and if, as we have
already shown, the sum of that produce is three times as great as the
people of those States, using proper economy, would _necessarily_
consume, surely no one should feel any anxiety in regard to the ability
of the United States to meet all their pecuniary obligations.
I have already said that England, in her war with Napoleon, furnishes
the best criterion in history for judging of our own financial
situation; and though the two cases are far from running parallel to
each other, it may be interesting to compare them in some of their
aspects.
At the restoration of peace in 1815, the national debt of England
amounted in Federal currency to $4,305,000,000. It is impossible as yet
to say what will be the ultimate amount of our national debt. It amounts
now to rather more than one half of the debt of Great Britain, and, at
its present ratio of increase, it will take nearly four years more to
make our debt equal to hers.
Now, for the purposes of this statement, let us assume that it will take
four years more to finish the war and to adjust and settle all its
contingent claims, and that at the close of that period, say in 1869, we
shall be at peace, with a restored Union, and with a national debt as
large as that of England when peace returned to her in 1815,--how will
the ability of this country to sustain and pay its debt compare with the
ability of England to do the same at the time above referred to?
The simple fact that England was able to assume so vast a debt, and to
sustain the burden through half a century, during which her prosperity
has scarcely known abatement, and her wealth has been constantly and
largely increasing, ought to satisfy every American citizen that his own
country can at least do as well. But we can do more and better; for a
comparison of the two countries in the matter of ability shows that the
preponderance is greatly in our favor.
At the respective periods of comparison just named, to wit, 1815 and
1869, the population of the United Kingdom of Great Britain was less
than _one half_ of what the population of the United States will be, and
its amount of foreign trade was less than _one third_. In 1815 the
"factory system" was in its infancy and imperfectly organized, the
steam-engine was unperfected and in comparatively limited use. The
railway, the steamboat, the telegraph, the reaper, the thresher, and
many other important improvements and discoveries which tend to augment
the productive power of nations, have all come since that day. So far as
relates to the question of ability to sustain heavy financial burdens,
England, in 1815, can hardly be compared for a moment with a country
like our own, possessing as it does, in abundance and perfection, the
potent agencies of productive and distributing power just referred to.
It is true that England is now enjoying, to a large extent, the benefit
of these important agencies; but she had to supply the capital to create
them, after she had assumed the maximum of her enormous debt,--whereas
those agencies were all in active operation among us before any part of
our national debt was incurred. I hardly need suggest that it makes a
vast difference whether a nation has or has not these material
advantages at the time when it is contracting a heavy debt, and that our
position in this respect, so far as the question of ability is
concerned, is a position of immeasurable superiority.
In regard to the paying of our debt after the return of peace, we
possess some decided advantages, to which I will very briefly allude. Of
these the most obvious are, a greater ratio in the increase of
population, and more extensive natural resources. During the decade
which ended in 1861, the population of the United Kingdom of Great
Britain increased from 27,495,297 to 29,049,540, or less than _six per
cent._ In the ten years which ended in 1860, our increase of population
was from 23,191,876 to 31,445,089, or _thirty-five and a half per cent_.
Thus it appears that during the last ten years for which we have
official returns, the population of the United States increased in a
ratio sixfold greater than that of the United Kingdom. This disparity in
our favor will undoubtedly increase from year to year.
The home territory of Great Britain is quite inadequate to support even
her present population. This circumstance places that country in a
position of comparative dependence. While she _must_ draw from other
countries a very considerable proportion of her breadstuffs and other
provisions, we supply not only ourselves, but others largely also. The
money which England pays to other nations for bread alone would equal in
thirty years the entire amount of her national debt.
We need but a resolute and united purpose to sustain with comparative
ease our national burdens, whatever may be their extent. Those who doubt
this under-estimate not only the magnitude of our national resources,
but the powerful aid which modern improvements lend to their
development.