Mr. Sanford to Mr. Seward. No. 69.] LEGATION OF THE UNITED STATES, SIR: The King, who is restored to tolerable health, made his entry into Brussels yesterday, on the occasion of the national fêtes, and was enthusiastically received by all classes of the people. I duly received your despatch No. 62, and communicated its contents to M. Rogier yesterday-saying that I desired to keep him advised of the views of the government in the various phases of the crisis which the country was passing through. He expressed his hopes that an arrangement could be made now-he thought we would have to end by making one. I replied, I knew of no possible one on a basis of a division of the Union. He remarked upon the strength and military spirit shown by the rebels. I replied that they fought well; they were our own race; that the men were fighting from a mistaken sense of loyalty, with the idea inculcated by their leaders that they were resisting invasion and threatened servile insurrection, and they were developing rapidly into a military people. It might be a source of reflection to European powers, who had encouraged these rebels at the outset, that they had contributed towards building up a military power that would, if the rebellion succeeded, be likely to cause them trouble. That the idea of the getters-up of the rebellion was to form a great military aristocracy, based upon slavery, which would make the whites all fighting men, and to extend the area of slavery over Mexico, Central America, and Cuba, on a grand filibustering scale, and, holding a vast territory and the monopoly of cotton, to pursue the same wilful, reckless career for power and conquest which had characterized their efforts, made powerless, however, by the north for years past; that the idea entertained by many of a great profitable trade with the south would be found illusive-a population composed of slaves, who would require nothing from Europe, of a poor and numerous class of whites devoted to agriculture and with few and simple wants, and a comparatively few wealthy slaveholders, would never require large amounts of transatlantic manufactures, compared with the northern States, which for years past had consumed nine-tenths of the foreign importations of the whole country. M. Rogier remarked that, whatever might occur, he thought the cotton monopoly of the south was at an end forever. An international congress for the promotion of social science, which has been in session here for four days, has closed to-day. It was proposed, I believe by some of the English members, to make our war and the project of an address to the American people a subject of discussion at the general meeting of the congress to-day. The possibility of an amendment touching the revolt in India, or the opium war in China, or some other equally appropriate subject for discussion by the congress for the promotion of social science, perhaps, may have prevented the carrying out of the plan of the English philanthropists, who have, however, called a meeting at one of the hotels here, of such of the members as are so disposed, for the discussion of a proposed address to the American people. The address will probably be found to contain the ideas of a class of Englishmen whose interests and whose policy are for the dismemberment of the Union. I have the honor to be, with great respect, your obedient servant, No. 68.] Mr. Sanford to Mr. Seward. LEGATION OF THE UNITED STATES, SIR: In view of the important changes about to be made in our revenue system, and believing that we can consult with profit the experience and the practice of other states in respect to taxation, I deem it proper to submit to you, somewhat in detail, an analysis of the revenue system of Belgium, which I think may prove of special interest as based upon the system of other nations, modified so as to conform to the more liberal institutions of a semi-republican state. The revenue system of Belgium is based, 1st, upon the French laws which remained in force after its separation from France, in 1814, and which are the foundation of the whole structure; 2d, upon the laws established in common for Belgium and Holland while it was a part of the kingdom of the Netherlands, (from 1815 to 1830;) and 3d, upon the legislation since the revolution of 1830. The French revenue system was described by me in a memoir when chargé d'affaires at Paris, accompanying my No. 48 to your department, and was printed by order of the Senate as Executive Document No. 68 of 33d Congress, 1st session, and I beg to refer to it for an outline of the then existing system in France, to p. 187 et seq., and for details touching its administration to pp. 277, 278, and 290 et seq. of appendix. The taxes and imports in Belgium may be divided into four great divisions, viz : I. Those which are paid on account of what a person possesses or what he acquires in a continued and permanent manner. II. Those which are paid on account of accidental acquisition, whether by purchase, inheritance, or by process of law. III. Those upon very common articles of consumption. IV. Those for services rendered by the state to the people. There are, besides, some other sources of public revenue, but of small importance, difficult to class in any of those categories, and which will be indicated hereafter. I. To the first category belongs the tax on real estate, "foncier," instituted by the French law of 7 Frimaire, an 7, and which is upon the net revenue of all lands and buildings, established by an evaluation which the state makes periodically of all real estate, and which is called the "Cadastre." The present basis of the tax is upon the valuation of 1843. The amount of this is 18,886,290 francs, or $3,777,260, and is levied on 848,000 proprietors at a cost of about 11 per cent. 2. The personal tax, which corresponds greatly to what are called assessed taxes in England, and from which this is copied. It was established by the law of 8th June, 1822, under the Dutch regime, and is, consequently, the same in Holland as in Belgium. It is established in the valuation of the gross rental or revenue of every habitation or building which exceeds $8 40 per annum; on the number of doors and windows of inhabited houses; the number of fireplaces therein; the value of the furniture; the servants employed, when permanent and for domestic service; upon horses for pleasure or other than necessary labors for the trade or business of the owner. The tax on doors and windows varies according to the population of the towns in which the dwellings are located. The tax-payers themselves declare the number of their fire-places, and of their servants and horses employed by them. The residue is generally submitted to the valuation of agents of the government. This tax varies, necessarily, according to the augmentation of houses and the increase of the national wealth. It amounts to $2,101,000, and was imposed in 1861 on 402,115 persons. 3. The tax on licenses, or patente, so called, which is upon the revenue of all trades and occupations save that of agriculture. It was established by law of 5th May, 1819, and is still, in its general principles, imposed also in Holland. Every industrial occupation pays according to the bases of evaluation, which are different according to these occupations. These bases are declared by the tax-payer, and are subject to government control and verification. When labor is the principal agent, the basis is the number of workmen; when the capital is the principal agent, the basis of the tax is the conjectured annual profit. For other occupations the basis is, in addition, the relation to the population of the localities where these occupations are exercised. This tax amounts to $803,000, on 286,545 persons. II. 1. The registry tax comes first under this head. It was established by a law of the French republic of 22 Frimaire, an 7, and is still in force in France as well as Belgium. This tax is levied upon every sale, donation, or gain, by sentence of court, of real estate and personal property, and is generally 4 per centum of the price; and on personal property, when by written act or (for sale) by public vendue, is much less than for transfer of real estate, varying from 2 per centum per centum, according to the nature of the property. to There is also a registry tax upon leases of rural property, proportioned to the rented value and the duration of the lease. There is also a registry tax upon all written acts and contracts liable to be used in court, and which varies according to their nature. This tax amounts to $2,660,000. 2d. The tax on mortgages, which is levied on all acts of mortgage or hypothecation made to secure a debt, and varies according to the debt. This tax amounts to $485,000. 3d. The tax called de greffe, record office, on copies given and demand of decisions, or acts of courts of justice, &c. This tax amounts to $50,000. This 4th. The tax on heritages in collateral line, established by a law of Holland of December 27, 1817, and in force at this time equally in that country. tax varies from 4 to 10 per centum on the value of the heritage, the degree of relationship, or the absence of any. It is one-half the amount when the property is left in entail. This tax amounted, the past year, to $1,740,000. 5th. The tax on heritages in direct line, which was established in 1853. This tax is 10 per centum upon what is inherited in real estate. It amounted, in 1861, to $31,000; and on surviving widow or widower to $30,000. III. 1. The custom duties, established according to tariffs, which have been frequently modified, and which have lately ceased entirely with respect to cereals, and have been greatly reduced of late upon imports generally. Tonnage dues are also included under this head. The aggregate receipts are $3,223,000, at a cost of perception, owing to numerous officers (5,000) to guard its frontiers, of about 30 per centum. 2. Excise. The bases of this tax were established, under the government of Holland, in 1822, but the laws regulating it have been frequently modified since 1830, both with respect to the amount of the tax and the mode of perception. This tax is levied on articles of very general consumption. In the time of the Dutch there was an excise upon flour and upon meat. This has been abolished in Belgium by the revolution separating Belgium from Holland. The excise exists at this time upon all foreign wines, beer, and vinegar, foreign and domestic spirits, and upon sugar. The tax differs on the various articles. The total amount levied under this head is $9,374,000. IV. The sources of revenue under this head are simply payments made to the state for services rendered, as, for example, railroads and telegraphs, highways and canals, which it owns and carries on and derives revenue from transportation upon messages and tolls, from the post office, from the guarantee of gold and silver articles, the mint, &c., &c. The amount from these sources is $8,024,000. There are, in addition to these four categories, other taxes not properly falling within them. First among these is that of stamps, (timbre,) which is one of the taxes established, like the real estate and registry tax, during the French regimé, and is still in force in France. This tax consists in a stamp placed by the state upon paper which must be employed for various acts in ordinary commercial and industrial transactions, public procedures, &c. This paper is sold in certain public bureaus, at a price marked on each sheet, and which varies according to the nature of the act. It produced in 1861 $721,000. The state also possesses some domains which are sources of revenue, and there are some other imposts of too trifling a nature to be designated here in detail, producing about $1,000,000. The aggregate amount of the revenues of Belgium resulting from the sources indicated is $30,000,000, for a population of 4,500,000, and at a cost of about ten per centum. Articles of consumption furnish thirty-nine per centum of the amount, and real and personal property pay the remainder, (sixty-one per centum,) showing that taxes are lighter upon the masses here than in France or England, the proportion in France being forty-five per centum for the first and fifty-five per centum for the second, and in England seventy-one per centum and twentynine per centum, respectively. To this general outline of the revenue system of Belgium, a full and detailed account of the various branches of taxation indicated is indispensable for practical purposes. The constitution provides that no tax or impost to the profit of the state shall be established save by law, and, moreover, that these taxes shall be voted annually, and the laws which established them shall have force but for one year if not renewed. In accordance with this provision, the law containing the budget of ways and means provides each year that the taxes existing on the 31st December in principal and additional, ordinary or extraordinary centimes, (or per centum,) shall be collected during the new fiscal year according to the laws and tariffs which regulate the paying and collection of the same. It is of these laws that I propose giving the analysis. I. 1. Foncier, or real estate tax. The articles of the French law of 3 Frimaire, an 7, constituting the tax, are as follows: "ART. 2. The levying of the real estate tax is made in equal proportion upon all real property, according to the net annual revenue, without other exceptions than those determined hereafter for the encouragement of agriculture or for the general interest of society. "ART. 3. The net revenue of lands is what remains to the proprietor, deduction made from the gross product of the expense of culture, sowing, manuring, and keeping up the land. "ART. 4. The taxable revenue is the mean net revenue calculated upon a certain number of years. "ART. 5. The net taxable revenue of houses, and that of manufacturers, forges, mills, and other like establishments, is what remains to the proprietor, deduction made of rental valuation, calculated upon a certain number of years, of the sum necessary to indemnify for wear and tear, expenses of keeping up the establishment, and for repairs." The sum of the operations to arrive at this valuation is called the cadastre survey and valuation of lands, and is a detailed work of surveys, valuations, &c., in which all changes in real property, whether by sale or other transfer, building or destruction of houses, are carefully noted, and by which the extent as well as productive value is determined. The tax at the time of forming the cadastre was calculated at four per centum upon the revenue. It is probably, with the increased value of property, at this time less than half that. By law of 9th March, 1848, the principal of real estate tax was divided among the nine provinces of the kingdom according to the result of the cadastre; and the law further provided that the amount of taxable revenue arrived at on the 31st December, 1843, should be the basis of this tax, until a new revision of the cadastral operations. The whole amount thus fixed for the kingdom is $3,188,905, divided, as before said, in determined sums among the nine provinces of Belgium. In addition to this principal sum there are what are called additional centimes, or percentage, the amount of which is fixed each year by the law of the budget. For 1862 they are as follows: three centimes additional ordinary; two centimes for non-values; ten centimes extraordinary; three centimes supplementary-making eighteen centimes, or eighteen per cent., thus swelling the amount by nearly $600,000. Exemptions. The streets, public places serving for markets or fairs, the public roads or highways, and river are not taxable.-(Article 113, law of 3d Frimaire, an 7.) Taxes on lands occupied for military works, or inundated so as to give no revenue to the proprietor, cease from that moment to be due up to the time when the enjoyment of the same is restored to him. A deduction may also be made on taxes due upon property of which the enjoyment of a part has been lost to the owner.-(Royal decree of June 11, 1815.) Buildings destined for public service, as indicated by law of 11th of August, 1808, are also exempt from this tax. Also schools in which teaching is entirely gratuitous, and which belong to charitable establishments. The buildings, however, serving for dwelling to the masters of such schools, are not exempt.-(Decree of 17th of September, 1808.) Canals destined to conduct water to mills, forges, and other like establishments, or for irrigation, are taxed on, but only for, the amount of space which they occupy, and upon the footing of the lands they pass through only. Canals for navigation, constructed at the expense of the public or of individuals, are not subject to this tax, save for the amount of land they occupy, and as land of first quality. (Law of 5-15 Florial, an 11.) Woods and forests belonging to the nation are also exempt.-(Law of 19 Ventose, an 9, art. 1.) Temporary exemption is accorded for buildings newly built, reconstructed, or enlarged, as well as for wild or uncultivated lands which are to be put under culture. (Law of March, 28, 1828, and also of March 25, 1847.) A reduction is allowed for houses remaining uninhabited during the year, but of the part of the tax laid upon the construction only. The mechanism of the legislation touching this tax is very simple. The division of the whole amount, which is determined each year by the legislature, |