the House a bill to reduce the internal revenue. It provided for a repeal of the stamp tax on checks, etc., of the tax on banks, private and national; and of the tax on matches, perfumery, medicinal preparations, etc., and revised the entire system of taxes on tobacco, spirits, etc.

The bill came up for discussion on June 21. The Democrats particularly opposed the abolition of taxes on banks as favoring the rich, in view of the retention of the tariff on articles consumed by the people in general.

REDUCTION OF INTERNAL REVENUE

HOUSE OF REPRESENTATIVES, JUNE 21-27, 1882

PHILIP B. THOMPSON [Ky.].-Why should these taxes be taken off? Is the capital of this country to pay no taxes? We have already taken off the income tax. Are all the tax laws of this country to be framed so as to grind the face of the poor and lay heavier weights upon the backs of the laborers of this country, leaving the capitalist, the national banks, the great railroad corporations, and other monopolies, to pay no part of our taxation and contribute nothing toward the support of the Government, who feel no interest in it save the privileges and franchises which they derive from it and by which they add to their increasing wealth, already grown fabulous?

Is a Republican Congress in one way and another, upon the demand of capitalists, to take all the taxes off banking capital, national as well as State, to remit to them nearly $13,000,000 of revenue now going into the public treasury, while at the same time by its legislation it undertakes to relay upon knit woolen stockings and other goods of that kind a tax of 85 per cent., which was taken off a few days ago by decision of the Supreme Court? It is claimed that by some mistake or oversight in the codification of the statutes it was reduced to 35 per cent. It is now proposed to "rectify" this mistake in order to reimpose this tax upon the laboring classes. Are you to leave upon everything that the laboring people use the immense taxes now paid? Are steel rails, over which are transported the products of Western farmers to the seaboard for shipment to foreign countries and to the markets of the world, to pay a tax of $28 a ton-105 per cent.-while at the same time you remove taxes which are paid by the banker and other capitalists? When did these classes become the peculiar pets of this Government, that

they are to have exclusive privileges and all their taxes relieved, and no other class of society is to have any relief? This bill is shaped and framed in their interest only. Other things are put into it merely as a blind-as a makeshift to carry it through. The abolition of the match tax is inserted merely to delude the minds of the people so that it may be pretended you have given them some relief? It is the Judas-like kiss with which they are to be betrayed and deceived-beguiled into the belief that the Republican party is adopting measures for their benefit, while in fact you relieve only the capitalist and increase the burdens laid upon labor.

Mr. Chairman, why should the tax upon bank checks be removed? What tax paid by the people of this country is more easily paid, or what tax is paid by people who are more able to pay it? Since the days of Adam Smith every enlightened government has adopted the principle laid down first by him and followed by every writer on political economy, that taxation should be imposed upon the luxuries of life, that taxes should be made as nearly voluntary in their payment as possible, and where not voluntary should be laid upon that class of society which has the greatest ability to pay them, and should be collected in such a way and at such times as to be least felt. Who has a greater ability to pay than the men who pay the two and a quarter million of dollars collected through the stamp tax upon checks? How many people pay this tax? You will find that the individual depositors in the national and State banks and the savings banks number about 8,000,000 of people.

Eight millions of men subscribe annually a little over two and a quarter million of dollars to support the Government. Each one of those men, according to the statistics, has $350 in the bank to his credit. It is a well-known fact the banks pay more than one-half of this tax. That is where the shoe pinches, and that is why the relief is demanded. It is not in the interest of the depositor, but in the interest of the banker, who sees his profits cut down every year to the amount of a million and a quarter of dollars, which is taken out of his pocket and given away or distributed among his depositors.

Alexander H. Stephens [Ga.] spoke on June 23. He desired to wipe out all internal taxes and rely for national revenue alone on the tariff.

I think we ought to abolish the internal-revenue system of taxation entirely. I would extirpate it root and branch. Allow

me to say to both sides of the House that except in time of war these internal-revenue taxes, excise and stamp duties are in my judgment in principle anti-republican, anti-democratic, and anti-American. They are in opposition to the general principles or policy of this Government as taught by the fathers of the Republic.

The best way to raise revenue is by duties on imports. They bear less heavily on the taxpayers, and as legislators that is what we should look to. In levying duties on imports you can at the same time make foreign producers pay for the use of your markets, and in that way incidentally and properly give aid and protection to American industry. It is not true, as a general proposition, that the consumer pays all the duty imposed upon commodities brought from other countries. This is a question that I cannot now argue. In most instances where the duties are judiciously laid they are borne partly by the importer and partly by the consumer.

To allow Congress thus to raise revenue by duties upon imports was one of the main objects in establishing the Federal Constitution of 1787. This system of internal-revenue taxation by excise and stamp duties was not favored by the fathers of the Republic in times of peace. I speak plainly, and say that it was looked upon then as not only of British origin, but there was always the odium of British Toryism attached to it in the American mind. There was never any legislation more abhorrent to the people of this country, even in their colonial condition, than what was known as the infamous stamp act.

In time of war, when foreign trade is interrupted, this country has been compelled to resort to this method of raising revenue. It was thus resorted to in the Revolutionary War by the States. In the war of 1812, after the adoption of the present Constitution, it was again resorted to of necessity. But it was not adhered to one moment longer than the necessity existed. The system was adopted in the administration of the elder Adams, when war was expected with France; but nothing tended more to excite popular opposition to his administration than this system of taxation, except the alien and sedition acts. One of the first acts of Mr. Jefferson's administration was to wipe them from the statute book. The present system was adopted during the late lamentable war between the States. We do not now require its continuance.

On June 24 George M. Robeson [N. J.] supported abolition of the bank taxes.

Mr. Chairman, we hear a great deal from the other side to the effect that all taxes upon the business of the country are paid by the consumer. As a general proposition it is true; but one other thing is also true: all taxes on the business of a bank are paid by the borrower. The consumer of an article meets the manufacturer and vendor upon equal terms; he comes offering his money for the article he needs. The borrower comes asking favors of the man or institution who is to lend him money, and he is obliged to assume the expense imposed by the Government on the money he borrows. All the expenses that you put upon the machinery of banking, therefore, come out of the debtor and borrower class; they are direct taxes upon the business of the country, and upon the resources and credit of the men who carry on the business and employ the labor of the country.

Roger Q. Mills [Tex.] declared that the purpose of the bill was to prevent the payment of the public debt and so fasten the national banking system on the country, and to serve as a plausible excuse for continuing high tariffs.

Mr. Chairman, is it not a little singular that this thing was born in Philadelphia, Pennsylvania? Is it not a little strange that the first gun in favor of the repeal of internal taxes came from the gentleman from Pennsylvania on that side [Mr. Kelley], and from the gentleman from Pennsylvania [Samuel J. Randall] on this side of the House; the speech of one gentleman being delivered in the tariff convention of New York City, and the speech of the other delivered to the national bankers and the tariff men of New York City?

MR. RANDALL.-My speech was delivered before a Democratic meeting—

MR. MILLS.-I know what sort of Democrats they were. MR. RANDALL.-And a meeting that gave response by applause.

MR. MILLS.-Yes; and it was a meeting of national bankers and high-tariff men; heretics in the Democratic party, and who have always been regarded as heretics from its very foundation.

Why is it that this thing comes from Pennsylvania? The great cry for reform in taxation comes from Pennsylvania, and the protectionists at that. You do not hear anybody in Texas or in Missouri or in Iowa or through the Western country demanding the repeal of the taxation on banks. You do not hear any great complaint from the people about the money that

comes into the treasury being superabundant and about there being no necessity for it.

What man of common sense ever would think of giving away his revenues when he had his debts, bearing interest, due, and demanding payment? But the Congress of the United States is being boldly and insolently asked to-day to throw away the treasures of the people of the United States for the sole purpose of gratifying the godless greed of these monopolists; nothing else in the world. Who is to be benefited by giving away these $17,000,000 that are now reecived from the coffers of the banks? How many of your people in the West and South will be benefited by that?

The bill passed the House on June 27 by a vote of 128 to 80. It was debated at great length in the Senate, but did not come to a vote during this session.

During the next session of Congress (December, 1882March, 1883) the bill was again extensively discussed in the Senate. It was finally passed with amendments on February 20, 1883. The House refusing to accept the amendments, a conference was held. The report of this was adopted by both chambers on March 2. President Arthur approved the bill on March 3, 1883.