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So long as consumption keeps equal pace with production—as in the case of all manufactures—the consumer must pay the increased cost price. And consumption will not be seriously checked by this bill.

The amount which will accrue on licenses under the present bill, embracing merchants, traders, bankers, brokers, auctioneers, distillers, brewers, peddlers, manufacturers, theaters, hotels and taverns, and other classes, will be very considerable. Licenses, though heretofore not generally adopted in this country, may be regarded among the least objectionable modes of taxation. They are a shield against unauthorized and irregular competition, and, there being no interference with the private details of business, the duty will be paid with very little dissatisfaction.

The duty proposed on unmanufactured tobacco is three cents per pound, and on manufactured tobacco and snuff an additional duty of five cents per pound. On cigars the rates are in proportion to value.

Everything used for illuminating purposes deserves to be considered with some reference to their power of competition. To be entirely impartial toward all parties, we have proposed a duty on candles, lard oil, gas, and petroleum.

The duty of three per cent. ad valorem proposed on all manufactures, except those specifically provided for, some at heavier rates, will not come out of the manufacturer—though a depression or glut of the market will make him suffer loss as it always does—but will increase the cost to that extent to the consumer, as much so as if added to the cost of labor or the raw material. It was not thought best to propose duties on raw materials generally, but to wait until all the cost, in the finished state at the time of sale, was added to the production, and thus assess the duty on the largest values. From this source much the largest item of revenue will be derived-in all, specific included, not less than $50,000,000.

If manufactures in the history of our Government have been fostered, they are now the strongest pillars of our support. A burden that would paralyze the agriculturists of the country will be taken onto the backs of the steam giants with alacrity and confidence. But it will be indispensable for us to revise the tariff on foreign imports, so far as it may be seriously disturbed by any internal duties—on some things the tax proposed is more than the present tariff—and to make proper reparation, otherwise we shall have destroyed the goose that lays the golden eggs. From such a revision, including some articles that hitherto it has not been considered sound policy to take from the free list and lower schedules of the tariff, it is expected also to increase the revenue several millions of dollars. If we bleed manufactures we must see to it that the proper tonic is administered at the same time. There are many articles, however, where the tariff is now high enough for revenue or protection, which will require no advance.

A tax upon railroads is easily levied and easily collected; but to adjust an equitable tax upon all railroads has been one of the difficult problems the committee have attempted to solve. If we took the basis of cost it was apparent that the nominal cost-including long interest accounts while in course of construction-would, in many instances, be beyond the present value. The market value could be no criterion, as many are not sufficiently known to have any fixed value, and of the whole five hundred and forty-one railroads in the country few are without a moiety or a prominent share of their cost represented in bonds or floating debt. If we were to take the gross receipts as a basis of taxation, many of the roads would be taxed for freights which they now transport over long distances-having competing lines, here and in Canada, by land and waterfor little more than the bare cost. In these times of commercial depression it is an object to leave the transit of produce and merchandise as much unfettered as possible.

The subject has been disposed of by proposing a duty of three per cent. on the season or commutation tickets, and on the coupons or interest paid on bonds, and by a duty of two mills on passengers (other than season-ticket passengers) for each mile traveled. This, in some sort, apportions the tax between the owners of the road, whether foreign or domestic, and whether represented in the form of stock or debt.

Obviously the system had to be modified and extended to steamboats and other vessels, in order to deal justly by the roads and obtain justice for the Government.

Stamp duties upon telegraphic dispatches and express packages will not be likely to encounter opposition, especially the latter, as it is a class of business rewarded by unusual profits; nor will the duty on patent medicines, from which so many not inconsiderable fortunes have been accumulated, be regarded with disfavor.

The speaker concluded with an estimate that the internal revenue resulting from the measure would amount to $101,925,000.

The income duty is one, perhaps, of the least defensible that, on the whole, the Committee of Ways and Means concluded to retain or report. The objection to it is that nearly all persons will have been already once taxed upon the sources from which their income has been derived. The income tax is an inquisitorial one at best; but, upon looking at the considerable class of State officers, and the many thousands who are employed on a fixed salary, most of whom would not contribute a penny unless called upon through this tax, it has been thought best not wholly to abandon it. Ought not men, too, with large incomes to pay more in proportion to what they have than those with limited means, who live by the work of their own hands or that of their families ?

The duty on advertisements was thought advisable on the ground that, more than any other tax, it would be likely to fall, where it should fall, upon the person for whose benefit the advertisement is published. Experience has abundantly proven that the bold, ungrudging, and even lavish advertiser is always largely repaid for all costs of advertising, and these are not the men to skulk from a picayune tax.

There is no duty proposed on the circulation of any literary, scientific, or news publication whatever. Printing paper, like any other manufactures, it is proposed to assess, but only to the extent of three mills per pound, which is equal to three per cent. ad valorem. It is to be assessed as a paper manufacture, but at less than half the percentage proposed on writing paper. Can it be asked that it should be exempt?

Mr. Chairman, whatever we do ought to be done speedily, as every day's delay is a resulting loss to the Government.

On March 13 George H. Pendleton [O.] opposed that provision of the bill which placed the collection of the revenue in the hands of the Federal Government.

If a scheme can be devised by which the State, rather than the Federal Government, shall take upon itself the duty of collecting this tax, I hope that it will be done. I think that it will accomplish a great good, and that we will avoid by it a great error. However much gentlemen may desire to try the patriotism of the people by their willingness to pay taxes; however much they may desire, and their constituents may desire, to express their patriotism in that way, let me tell you that when this vast system goes into operation, and these tax gatherers are abroad in the land, there will go up a voice in the country that will make this legislature tremble. Remember that never has the tax gatherer, in the history of this country, gone about under the Federal authority. Remember that never have the people been called upon to pay into the treasury these taxes. I know that, during the war of 1812, there were some instances in which land taxes were raised. But a tax bill like this which goes into every house, into every business, every neighborhood, which taxes everything a man eats and all that he wears, which enters into the consideration of every man engaged in every business of the country, which puts a tax upon every conceivable subject of taxation; such a tax bill has never before appeared in this country.

On March 15 Thaddeus Stevens [Pa.] replied to Mr. Pendleton.

The gentleman from Ohio (Mr. Pendleton] informs us in somewhat of a minatory manner of the tremendous clamor that his bill will raise. He told us that a voice is to come up here which will shake this hall, and make even the firmest of us tremble in our boots. (Laughter.]

It is not, however, the tax gatherer the people hate so much as the taxes. And, if you have no provision in the bill by which the payment of these taxes can be coerced, they will never be paid. The Representatives here will act to represent their constituents, who will turn the friends of this Administration out of power and who will, of course, desire that no taxes may be collected. Some system will then be adopted more consonant to the feelings of the people, and more in accordance with the wishes of demagogues, than that which we are devising for the purpose of enforcing this tax. We intend to lay this tax, and to take the chances of that tremendous voice which is to hurl us from power. What we desire is a tax that will last during this war, and which cannot be disturbed by mere resolutions of one branch of this legislature.

It is objected that the tax cannot be collected in the seceded States. Take Virginia, for instance.

When the Constitution is restored there, I have no doubt that under this bill we can district the State, and find loyal men enough to assess and collect this tax. If we do not collect it to-day, we will next year; and, if not next year, we will the year after; and we will pile up on Virginia her full burden of the taxes which she has brought upon us. It will be a lien upon her real estate, and we can collect it.

How can we do that, if we allow those who have caused this trouble to make the assessment? Even if there were no rebellion, how could you equalize your taxes? If every State is allowed to assess its own taxes, Pennsylvania might say, let us assess them so as to shirk our fair share, and throw it upon New York

And, if so, where is the equalizing power! But if you keep this machinery within the power of the United States Government, and they find that anything of this sort is going on, the Government can at once discard their unfaithful agents, and see that the matter is properly adjusted.

On May 30, 1862, James A. McDougall [Cal.] delivered a speech in the Senate criticizing the unscientific nature of the bill. He declared that proper thought had not been given to its framing.

Mr. President, this bill is without system, without policy, without form, without organization; a bill that, if passed into a law, it will take a hundred years for our courts to interpret, and then they will only make it law by construction.

Early in the present session, a committee of three gentlemen from the Boston Board of Trade, gentlemen of large experience in matters of finance, came to this city to advise with the Senate Committee on Finance upon this subject. These gentlemen propose to tax trade—the very business in which they are most engaged. They say that the business of trade, the business of making the exchanges of the country, can most conveniently, economically, and justly furnish the revenue required by the Government.

It is not wealth and capital that pay taxes; it is production that pays taxes. Otherwise, if it were not production, and it depended on capital or accumulations, a country would become weaker year by year, and the result would be national impoverishment and bankruptcy. England did not pay out of her capital or her wealth the great burdens of her French and American wars. She paid them out of her energies, her enterprise, her industry, what she every year produced, or by her enterprise brought from foreign lands through the agency of her commerce spread upon every sea.

I will now proceed to state my particular objections to the measure brought forward from the committee; and the first objection I make to it is that it involves an army of officers. And what skill and knowledge in the various specialties of trade

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