The Society of To-morrow: A Forecast of Its Political and Economic Organisation

Gustave de Molinari
Molinari, Gustave de
(1819-1912)
BIO
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Editor/Trans.
P. H. Lee Warner, trans.
First Pub. Date
1899
Publisher/Edition
New York: G. P. Putnam's Sons
Pub. Date
1904
Comments
Appendix by Edward Atkinson, Introduction by Hodgson Pratt, Prefatory letter by Frédéric Passy.
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Appendix, by Edward Atkinson

The Cost to the United States of War and of Preparation for War from 1898 to 1904.


The Cost to the United States of War and of Preparation for War, from 1898 to 1904, Seven Fiscal Years Ending June 30, One Thousand Million Dollars. Statements Compiled, Computed, and Proved from the Official Reports of the Government, together with a Statement Showing the Relative Taxation of Great Britain, France, and Germany as Compared with that of the United States.

By Edward Atkinson, LL.D., Ph.D.

App.1

I

The following tables, compiled by Mr. Edward Atkinson, are inserted, with the permission of the compiler, as an appendix.

These statistics of the cost of war and of preparation for war, so effectively summarized by the Boston publicist, constitute, in the opinion of the publishers, an impressive commentary on the general conclusions and predictions of M. Molinari's treatise.


App.2

The cost of war and warfare from 1898 to 1903 inclusive has been over nine hundred million dollars ($900,000,000). The cost of the war with Spain and of the warfare upon the people of the Philippine Islands to the end of the last fiscal year, Jun. 30, 1903, had been over eight hundred and fifty million dollars ($850,000,000),—an addition in that fiscal year to the precious charge upon the taxpayers of this country of not less than one hundred and fifty million dollars ($150,000,000). This charge is increasing rather than diminishing. At the end of the present calendar year, December 31, 1903, we shall have expended in war and warfare not less than nine hundred and twenty million dollars ($920,000,000), which sum will be slightly in excess of the outstanding bonded debt of the United States bearing interest. Of this sum about three hundred million dollars ($300,000,000) is commonly assigned to the cost of the war with Spain. There is no exact data outside the government accounts by which this can be apportioned.

App.3

Over six hundred million dollars ($600,000,000) may be charged by taxpayers to the effort to deprive the people of the Philippine Islands of their liberty. The excess of the expenditures of this country, due to the warfare in the Philippine Islands, with the cost of the increase in the regular army and other expenditures engendered by militarism during the fiscal year ending June 30, 1903, varied but a fraction from two dollars ($2) per head of the population.

App.4

By dealing with the official figures for the year ending June 30, 1903, we may find the exact direction of the waste of taxpayers' money in one more year of oppression in the Philippines, of the refusal of liberty, and of futile efforts to redress wrongs previous committed.

App.5

The conduct of the work of imposing a form of government upon these people without their consent has been administered by able and upright men who have used their utmost effort to overcome the evil inherent in the conditions. The pretext of developing commerce by holding dominion over these islands has ceased to impose upon intelligent people. All that we import from the Philippines we may continue to import, whoever holds them,—the principal article, hemp, being free of duty. Our insignificant exports have fallen off with the withdrawal of a part of the troops and with the increasing disability on the part of the inhabitants to buy even articles of necessity, such being the poverty and distress which our rule has brought upon them. The proof of those statements is submitted in the subsequent form, all the figures being derived from the official reports of the government.

App.6

For twenty years, from June 30, 1878, to June 30, 1898, covering the administrations of Hayes, Arthur, Cleveland (first), Harrison, and Cleveland (second), the average annual expenditures on the different branches of the government service per capita were as follows:

Civil service, including Indians and postal deficiency $1.48
War Department, including fortifications and other similar works .75
Navy Department, including the construction of what is known as the "New Navy" .35
Interest on the public debt .90
Pensions, including the very heavy increase during the term of President Harrison 1.52
Average $5.00

App.7

The expenditures in five years of war and warfare under Presidents McKinley and Roosevelt were as follows (annual average):

Civil service $1.58
War Department 1.90
Navy Department .80
Interest .47
Pensions 1.86
Average $6.61

App.8

During the last fiscal year, ending June 30th, the expenditures have been as follows (during a year of so-called peace):

Civil service $1.77
War Department 1.47
Navy Department 1.03
Interest .36
Pensions 1.72
Average $6.35

App.9

An excess over the normal of twenty years of peace, order, and industry of one dollar and thirty-five rents ($1.35) per head.

App.10

But this does not show the whole case. During the twenty years prior to the Spanish war the cost of pensions and interest was two dollars and fifty two cents ($2.52) per head. Had it not been for debts incurred and pensions to so-called Spanish war veterans, these charges, which had been reduced to two dollars and eight cents ($2.08) per head, would not have exceeded one dollar and eighty-eight cents ($1.88) in the last fiscal year, the falling in of pensions through lapse of time now moving on with accelerating speed.

App.11

These differences per head may seem to be of trifling importance, but when computed on the population of June 30, 1903, the customary factor by which expenditures are distributed by the Treasury Department,

The excess of expenditure in the civil service at twenty-nine (29) cents per head comes to $23,316,000
The excess of expenditure on the army at seventy-two (72) cents per head 57,888,000
The excess of expenditure on the navy at sixty-eight (68) cents per head 54,672,000
The total of actual excess of expenditure during the warfare in the Philippine Islands, and the tendency to militarism in the fiscal year ending June 30, 1903 $135,876,000
If to this be added twenty (20) cents per head, by which the interest and pension charge world have been diminished except for war and warfare 16,080,000
We find that the waste in war and warfare in the last fiscal year was a fraction less than $152,000,000

App.12

The present tendency is to increase rather than to diminish, and when the expenditures of the present six months ending December 31, 1903 are audited, the proof will be complete that the cost of the war with Spain, which a strong administration would have avoided, and the "criminal aggression" upon the people of the Philippine Islands, which a weak administration brought upon the country, will have cost the taxpayers nine hundred and twenty million dollars ($920,000,000), a sum slightly larger than the entire bonded debt of the United States, bearing interest, now outstanding.

App.13

The pretext of expansion of commerce in the East in justification of closing the door to trade in the Philippine Islands to other nations, while strenuously urging the open door in China and other parts of Asia, has been exposed and now excites only derision. In the computation of the cost of war and warfare to June 30, 1902, it proved that we had been paying for five years one dollar and five cents ($1.05) per head of our population to secure an export which amounted to six and one half (6½) cents per head, on which there might have been a profit to some one at the rate of one cent per head of the whole population. The figures of the last year are even more grotesque. The cost of criminal aggression in the Philippine Islands during the fiscal year ending June 30, 1903, was not less than one dollar and a quarter ($1.25) per head, after making any allowance that any reasonable man could make for the alleged necessity of increasing the army of the United States and building battle-ships to meet other contingencies. The exports from the United States to the Philippine Islands have fallen off to less than five cents per head of our population: had there been a profit equal to one cent on the five cents they would not have fallen off.

App.14

We are still wasting the lives and health of American soldiers and continuing to bring poverty and want upon the people of the Philippine Islands under the pretence of "benevolent assimilation."

App.15

The effort to suppress the evidenoe of torture, devastation, and ruin brought upon the people of these islands has failed, the facts of "criminal aggression" have been proved. In this statement the cost in money to the taxpayers of the United States is now submitted.

COMPUTATION TO JUNE 30, 1904
(Extended on Government Estimates, to June 30, 1905)

App.16

The cost of war and warfare to June 30, 1904, computed from the expenditures for six months from June 30 to December 31, 1903, and completed by estimate to the end of the fiscal year, June 30, 1904, for seven years will be not less than $1,000,000,000.
Extended by estimates submitted by the Secretary of the Treasury to June 30, 1905.

App.17

In my first analysis of the cost of war and warfare, July 4, 1902, it was proved that the average expenditures per head of population for twenty years antecedent to the Spanish war had been five dollars per head as follows:

President Hayes 1878 to 1881, average $5.21
President Arthur, 1882 to 1885, average 4.73
President Cleveland, 1886 to 1889, average 4.43
President Harrison, 1890 to 1893, average 5.36
President Cleveland, 1894 to 1897, average 5.18
Average for twenty years of peace $5.00

App.18

In this period and included in this average is the cost of what was called "the new navy" which destroyed the Spanish fleets.

App.19

In the subsequent five a years of war and warfare under McKinley and Roosevelt it was proved that the average expenditures per capita had been $6.61.

App.20

It was proved that the cost of war and warfare up to that date had been at the excess over $700,000,000.

App.21

In October, 1903, I prepared a second statement, extending the figures by estimate to December 31, 1903, in which it was proved that the cost of war and warfare to that date would be over $900,000,000.

App.22

The estimates used in that treatise have been more than justified by the official statements of the Secretary of the Treasury in his computations of the expenditures to June 30, 1904, by which it appears that the average, per head, of the present year will be $6.29.

App.23

It also appears that the estimates presented by the Departments for the fiscal year ending June 30, 1905, if not exceeded, will be $6.76.

App.24

The actual difference between the normal rate previous to the Spanish war and the average of $6.58 for seven years of active and passive war and warfare would be, per head, $1.58.

App.25

But during the eight years of Harrison and Cleveland, the cost of pensions and interest was, per head, $2.50.

App.26

In the fiscal year ending June 30, 1903, pensions and interest were less, per head, than $2.00. Reduction, 50 cents.

App.27

Both charges are now rapidly diminishing and the normal cost of government, without war and warfare, in 1903 and 1904, estimated at $6.29, would not have exceeded $4.29 on a basis of peace, order, industry, and good government, economically administered.

App.28

The cost of passive war and warfare is now over two dollars per head now being assessed on nearly 82,000,000 people, or over $160,000,000.

App.29

On the 30th of June, 1904, the cost of war and warfare, active and passive, will have been $1,000,000,000, and even if the appropriations for the year 1905 are not exceeded at the end of that fiscal year it will have been nearly $1,200,000,000.

App.30

We may take off $100,000,000 for expenditures now being made for a useful purpose which were not made before the Spanish war, such as Irrigation, National Parks, the expansion of the Department of Agriculture, and the possibility that the Consular Service may be reorganized, with suitable compensation to competent men.

At the lowest and most conservative estimates it is, therefore, proved that we have already spent on the Spanish war, as computed $300,000,000
On criminal aggression and passive warfare in the Philippine Islands 600,000,000
Total $900,000,000

App.31

And that before June 30, 1904, the total will stand at not less than $1,000,000,000.

App.32

It is also proved that unless the spirit of aggressive militarism can be stopped—which now costs two dollars ($2) per head—it will be over two dollars and a half ($2.50) in the fiscal year ending June 30, 1905, with a constant tendency to increase as time goes on.

App.33

In order to fix the relative increase in these charges, we may compare the different departments under the administration of President Harrison and those of the last fiscal year under President Roosevelt.

Harrison
per head
Roosevelt
per head
Civil Service and Indians $1.66 $1.72
War .76 1.47
Navy .42 1.02
Interest .48 .35
Pensions 2.04
1.73
Average $5.36 $6.29

App.34

We may next compare the average in President Cleveland's first term with the expenditures of the present fiscal year ending June 30, 1904.

Cleveland
per head
Roosevelt
per head
Civil Service and Indians $1.43 $1.73
War .66 1.40
Navy .24 1.17
Interest .80 .29
Pensions 1.30
1.70
Average $4.43 $6.29
At the interest and pension rates of 1904, deduct from the Cleveland figures .21
Average $4.22
Difference wasted $2.07

App.35

The average expenditures of 1903 and 1904 have been $6.29. The estimates of 1905 come to $6.76.

App.36

Had these expenditures and estimates been free of the cost of continued aggression in the Philippine Islands, of the proposed defensive works in the harbors of the Pacific, and the waste upon battle-ships and other killing instruments which form a necessary part of the policy of imperialism and oversea-expansion, the entire cost of the Civil, Military, and Naval Establishments, Interest, Pensions, Irrigation, Forest Reservations, and support to Agricultural Science could not exceed $4.30 in the present fiscal year, and might even be less in the next.

App.37

At every point and by every method that these accounts can be analyzed and fairly stated it is proved that the cost of war and warfare has been, is, and will be over two dollars ($2) per head on a population now about 82,000,000 and rapidly increasing.

App.38

The taxpayers of the United States are now payng the penalty for the feeble administration that brought us into this condition and the forcible, feeble administration that as yet fails to get us out, at this rate of two dollars ($2) per head, or ten dollars ($10) per family, or over $160,000,000 per year, tending to increase.

App.39

If it is assumed that the liberation of Cuba from oppression could not have been brought about without the Spanish war, commonly computed at $300,000,000, then the following estimates may be modified.

App.40

If the Spanish war is proved not to have been necessary, then it is proved that with this waste of six years of war and criminal aggression, $1,000,000,000, the whole bonded debt of the United States might have been paid, with a large premium for the purchase of bonds not yet matured.

App.41

It may be estimated that, had this money been spent for any useful purpose, many measures now contemplated might have been partially or wholly carried out.

App.42

Had we expended in the seven years $200,000,000 on the improvement of rivers and harbors, how much more would remain to be done?

App.43

Had we expended $200,000,000 on the irrigation of arid lands, how much would remain unproductive?

App.44

Had we made up to the Southern States, for purposes of common education, a sum a little more than equal to that which the Western States have derived from the public lands which Southern States surrendered to the Nation, which sum is about $65,000,000, by assigning aid to them of $100,000,000, what would be their present condition in the abatement of illiteracy?

App.45

Had we appropriated only so much money as may be necessary to construct cruisers for the protection of commerce, such cruisers being necessary so long as predatory nations threaten it, might we not have saved $100,000,000?

App.46

What could we have done with the other $400,000,000, which we shall have worse than wasted before the end of the present year, except to have remitted useless and oppressive, obstructive taxes?

App.47

Or if the war with Spain is deemed one that could not have been avoided, of which the common estimate of cost is $300,000,000, should we not still have had a surplus of $100,000,000 to be applied to the reduction of taxation?

App.48

When the cost of our national government is again reduced to the average of twenty years before the Spanish war—of five dollars ($5) per head, less at least one dollar ($1) per head, or to four dollars ($4), for falling in of pensions and interest as it soon may be when the waste of militarism is stopped—what nation can compete with us in the productive pursuits of peace or in the expansion our commerce with the world?

App.49

If such are the proved conditions, then what does it cost each State or Territory at two dollars ($2) per head on the population of the census year 1900, plus two dollars ($2) per head on the subsequent increase—the actual cost being more and increasing?

App.50

The following table will show, the computation being made in round thousands, disregarding fractions, at the average rate of two dollars ($2), it being remarked that the richer States pay more, the poorer States less, because these indirect taxes fall wholly on consumers in proportion to their consumption.

App.51

Every family pays its proportion of this tax, which is imposed on beer, tobacco, spirits, fuel, timber, steel, iron, and other metals, clothing, leather, cordwood, sugar, salt, fish, potatoes, and every other article of necessity, comfort, or luxury that is now subjected to a tax or duty.

App.52

Indirect taxes are tolerated because those who pay them are not conscious of the burden. They are the resort of rulers who dare not expose their purposes.

App.53

The proportion by States and Territories on the census of 1900 is as follows:*28

1 New York 7,300,000 $14,600,000
2 Pennsylvania 6,300,000 12,600,000
3 Illinois 4,800,000 9,600,000
4 Ohio 4,200,000 8,400,000
5 Missouri 3,100,000 6,200,000
6 Texas 3,000,000 6,000,000
7 Massachusetts 2,800,000 5,600,000
8 Indiana 2,500,000 5,000,000
9 Michigan 2,400,000 4,800,000
10 Kentucky 2,200,000 4,400,000
11 Georgia 2,200,000 4,400,000
12 Iowa 2,200,000 4,400,000
13 Wisconsin 2,100,000 4,200,000
14 Tennessee 2,000,000 4,000,000
15 North Carolina 1,900,000 3,800,000
16 Virginia 1,900,000 3,800,000
17 New Jersey 1,900,000 3,800,000
18 Alabama 1,800,000 3,600,000
19 Minnesota 1,800,000 3,600,000
20 Mississippi 1,600,000 3,200,000
21 California 1,500,000 3,000,000
22 Kansas 1,500,000 3,000,000
23 South Carolina 1,400,000 2,800,000
24 Louisiana 1,400,003 2,800,000
25 Arkansas 1,300,000 2,600,000
26 Maryland 1,200,000 2,400,000
27 Nebraska 1,100,000 2,200,000
28 West Virginia 1,000,000 2,000,000
29 Connecticut 900,000 1,800,000
30 Maine 700,000 1,400,000
31 Washington 500,000 1,000,000
31 Florida 500,000 1,000,000
33 Colorado 500,000 1,000,000
34 New Hampshire 400,000 800,000
35 Oregon 400,000 800,000
36 Rhode Island 400,000 800,000
37 Oklahoma 400,000 800,000
38 Indian Territory 400,000 800,000
39 Vermont 350,000 700,000
40 North Dakota 300,000 600,000
41 Utah 300,000 600,000
42 Montana 250,000 500,000
43 Delaware 200,000 400,000
44 Idaho 150,000 300,000
45 Wyoming 100,000 200,000
46 Nevada 50,000
100,000
75,200,000 $150,400,000
Taxes Free 1,100,000
2,200,000
In 1900 76,300,000 $152,600,000
In 1904 82,000,000 164,000,000

App.54

The increase in population from 1900 to 1904 would be 7 per cent. average, or from 1 per cent. in States from which emigrants pass, to 50 per cent, in Oklahoma, to which they come.

App.55

Now, if the tax gatherer went to the door of every house or to the dwelling place of every person, demanding two dollars per head in cash or ten dollars from each average family, hold long would this waste of warfare and militarism last?

App.56

If this tax of two dollars per head, or over $160,000,000 a year, were assessed directly upon the States according to law, to be collected mainly by a direct tax on property, or by a poll tax, how soon would it be abated? Before a single Congressional term had ended would not this waste be stopped, or every member who refused to stop it be relegated to a position where he could abuse a public trust no more?

App.57

With these questions, soon to be answered at the polls, I submit these computations to an anxious public, now constantly seeking for solution, and to sagacious politicians who are vying to save the Nation from farther dishonor and reckless waste on oversea-expansion and imperialism.

Boston Mass., January 23, 1904.


II

RELATIVE TAXATION IN THE UNITED KINGDOM, IN FRANCE, AND IN GERMANY, AS COMPARED WITH THE UNITED STATES

App.58

From an official statement of the national expenditures of the Republic of France the following computations are derived for the year 1901:

Per capita.
Population 38,600,000
Civil and judicial service $116,390,696 $3.00
Army, navy public works, forts, etc. 234,925,682 6.10
Interest on public debt and pensions, omitting workmen's old-age pensions 257,608,381
6.67
$608,924,759 $15.77
Expenditures for State manufactures, subsidies to merchant marine, free art schools, and to four religious cults, etc., carry the per capita to over $17.00

App.59

From an official statement of the expenditures of the United Kingdom of Great Britain and Ireland the following computations are derived for the year ending March 31, 1901:

Population computed at 41,500,000
Per Capita.
Expenditures for civil and judicial service, omitting imperial taxes appropriated to local purposes $114,457,860 $2.76
Army and navy under normal conditions of peace 230,159,880 5.54
Interest on national debt and pensions 134,330,400
3.24
Total $478,948,140 $11.54
The special war expenditures of the year are estimated at 317,168,460
7.64
Total $796,116,600 $19.18

App.60

For the year 1902, this burden will be somewhat lessened; but, by comparison with the United States fiscal year ending June 30, 1901, the British rate is $19.18 per head against the United States rate of $6.57, now also lessened.


App.61

Having no official statement of the national expenditures of Germany and not reading German, I am unable to unravel the complex accounts of the German empire in the Almanac de Gotha. I compute them on the best information I can get at $12 per head, very largely for military and naval service.

App.62

But this is no measure of the burden, as the pay in the German service is miserably insufficient, and in the examination of German family budgets one constantly finds an item, "Support of son in the army."

App.63

It will also be remarked that the burden upon our manufacturing competitors is not truly measured in terms of money.

App.64

$12, in Germany, falls on a per capita product not over half our own.

App.65

$17, in France, on a product not over three fifths.

App.66

$11.54 to $13, in the United Kingdom, in time of peace; $19.18 in time of war on a product per capita not over three quarters, if as much.

App.67

The Nemesis of the rule of Blood and Iron—of Revanche—of Junkerism and Militarism, hangs like a pall over continental Europe, and the word, "Disarm or Starve" are written upon the battlements on land and on the battle-ships upon the sea.

App.68

From a more extensive study of the relative taxation for national purposes in the United Kingdom, France, Germany, Belgium, and the Netherlands, which are our chief competitors in supplying other parts of the world with manufactured goods, and which are also our principal foreign customers (Italy, Austria, and Spain being yet worse off and Russia always on the verge of widespread famine), I have become satisfied that our advantage in immunity from taxation for military purposes and for the payment of interest on their huge debts incurred in previous wars is equivalent to at least five per cent. upon the value of our whole national product, or a sum between $700,000,000 and $800,000,000. In other words, we have a margin of profit of five per cent. on our whole product before our competitors can begin to credit profit on their product. Such a sum is more than the sum of all our State, county, city, or town taxes imposed for the cost of local government. Prodigal and wasteful as we may be in some places and in some directions, yet the whole sum per capita of National, State, county, city, and town taxes in the United States does not exceed the average rate given above for national taxation only in the European states above named, which are in very largest measure expended for military purposes, or interest on war debts.

App.69

The capacity of the European continent, without Russia, to support its own population cannot be questioned, yet more with Southern Russia and Asia Minor added; but divided as it is by the prejudices of race, the diversity of language, and by tariff barriers which yield less revenue than the cost of the armed forces necessary to maintain them, the state of Europe seems hopeless. Hence the urgency for the conquest of colonies and for the expansion of foreign commerce and exports. Hence also the fear of the industrial progress of the United States. Under these conditions the effort is being made to unite in a common effort to exclude imports from this country. Were such a union possible, what would be the effect? The cost of living would be enhanced, that increased cost would enter into all their goods which they now export. For a time the price of our food, fibres, and fabrics would be lessened, our farmers would have a narrower market for a time, but our ability to export manufactured goods would be augmented by the consequent reduction in the cost of living.

App.70

The power of the continental states of Europe to compete with the United States and Great Britain, welded together as they would then be by their common interest and mutual dependence, would be wholly destroyed.

App.71

So long as the armies of the continent of Europe are maintained, and the effort of the maritime states to create and support great navies is continued, their ability to sustain even the present population is diminished, and will continue to is lessened until some great social revolution destroys the classes by whom militarism is maintained.

App.72

As the slave power destroyed itself in this country, so will the military caste destroy itself in Europe.

Such seem to me to be the warnings shadowed forth by even a partial study of the figures of comparative taxation so far as I have been able to compute them. I commend this subject of the relative burden of armies, navies, debts, and taxes to all students of social and political science.

App.73

Brookline, Mass., July 4, 1902.


Notes for this chapter


28.
Increase about seven per cent. on each State to bring the figures to the present population.

End of Notes


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