Page:The Economic Journal Volume 1.djvu/366

 344 THE ECONOMIC JOURNAL prevent a great stream of importation, and a consequent large inflow of receipts into the Government treasury. The surplus is admitted on all hands to be an evil. It has tempted to extra- vagance in public expenditure. It has caused continual financial complications, because the United States acts as its own banker, keeps its receipts in cash in the Government treasury, and, consequently, is liable at any moment to withhold from the channels of trade a part of the accustomed medium of exchange. The surplus has been used by the Government in paying off the public debt; aud so long as there were bonds outstanding which the Govermnent had the privilege of redeeming at par, there was no great difficulty in disposing of it. But these redeemable bonds were all paid off several years ago, and since that time the Govermnent has been compelled to dispose of its surplus by buy- ing its. own obligations at a high premium in the open market, circumstance which has added much to the cry for a reduction the surplus revenue. Now, the largest item in the customs revenue is the revenue from sugar. At the same time the domestic production of sugar is not large, being confined ifi the main to the cane sugar district of Louisiana, and amounting in all to only about one-tenth of the total consumption. Louisiana, as it happens, is a Democratic State, in which the Republicans could therefore lose nothing if they abolished the duty. There has therefore been a strong disposition in the Republican party to abolish the sugar duties, so as to get rid of the surplus revenue, and to be able t6 come before the public with the assertion that taxes had been reduced upon an article of food of prime importance. At the same time there was an obvious inconsistency in abandoning the Louisiana producers to their fate at a time when other domestic industries received increased support. Moreover, there is a movement of some strength to assist and stimulate the production of beet sugar in the United States. Consequently an endeavour is made to maintain in another way the protection of the domestic sugar producers. This result the McKinley Act attained by making raw sugar free of duty, and at the same time giving a bohnty for the production of sugar within the United States. Raw sugar is admitted free; on refined sugar a duty of one-half cent per pound is retained, which suffices to protect the refiners of the United States. In addition, a discriminating duty of one-tenth of one cent per pound is levied on bounty-fed sugar coming from the countries which give a direct or indirect bounty on expor- tation. Our own domestic bounty on refined sugar produced