ment the preceding year, argued the case for the Government in conjunction with the Attorney-General, Charles Lee. Mr. Campbell, Attorney for the Virginia District and Mr. Ingersoll, the AttorneyGeneral of Pennsylvania appeared for the plaintiff. The case turned wholly upon the point whether the tax, on carriages kept for private use was a direct tax. If not a direct tax, it was admitted to be properly levied according to that clause in the Constitution which declares that "all duties, imposts and excises shall be uniform throughout the United States." If a direct tax it was wrongfully levied because the Constitution declares that "no capitation or other direct tax shall be laid unless in proportion to the census or enumer ation of the inhabitants of the United States.

The well-known decision of the court, delivered by Judge Samuel Chase, pronounced the tax to be constitutional. Justice James Wilson who concurred in the decision had taken a very prominent part as a delegate from Pennsylvania in the convention which framed. the Constitution, and ranked at the time as one of the ablest lawyers in the Union. The opinion of the judges seemed to be, though no formal decision was rendered to that effect, that a tax on land, and a capitation or poll tax, are the only levies which within the terms of the Constitution are to be considered direct taxes. The decision was one of extraordinary interest to the Government, as, had it been the other way, one great resource for the raising of money, indeed the greatest resource, would have been taken from the Federal Government. The appearance of Mr. Hamilton was an indication of the dignity and importance which were attached to the case by Washington's Administration.

A singular feature of the proceedings was the allegation by Mr. Hylton that he "owned, possessed and kept one hundred and twentyfive chariots for the conveyance of persons exclusively for his own separate use and not to let out to hire, or for the conveyance of persons for hire." What particular necessity a Virginia gentleman of the last century had for that number of chariots "for his own separate use" is nowhere explained. It may have been the mere filling of the blanks in a legal declaration in which the declarant was permitted a free use of figures, but as it stands in the reports of Supreme Court decisions, it seems to be one of the odd incidents which make up the humor of the Law.

The system of internal duties and excises continued in various forms for thirty years, practically disappearing at last in 1821.

But

COMPREHENSIVE SYSTEM OF TAXES.

433

for the financial demands precipitated by the war of 1812 and the period of depression which ensued, the system would have been abolished at an earlier date. During the period of their existence, from 1790 to 1820, the internal taxes had yielded to the Government the gross sum of $22,000,000, an average of a little more than $700,000 per annum. It thus proved a very valuable resource to the Republic in the period of its early financial trials.

Congress now determined under the recommendation of Secretary Chase to use this great source of revenue to the fullest practicable extent. Immediately after the passage of the Legaltender Act the subject of internal revenue was taken up, elaborately investigated by committees, exhaustively discussed in both Senate and House. The final result was the enactment of a bill "to provide internal revenue to support the Government and to pay interest on the public debt," which received the President's approval on the first day of July (1862). It was one of the most searching, thorough, comprehensive systems of taxation ever devised by any Government. Spirituous and malt liquors and tobacco were relied upon for a very large share of revenue; a considerable sum was expected from stamps; and three per cent. was exacted from all annual incomes over six hundred dollars and less than ten thousand,

and five per cent. afterwards increased to ten per cent.-on all incomes exceeding ten thousand dollars. Manufactures of cotton, wool, flax, hemp, iron, steel, wood, stone, earth, and every other material were taxed three per cent. Banks, insurance and railroad companies, telegraph companies, and all other corporations were made to pay tribute. The butcher paid thirty cents for every beef slaughtered, ten cents for every hog, five cents for every sheep. Carriages, billiard-tables, yachts, gold and silver plate, and all other articles of luxury were levied upon heavily. Every profession and every calling, except the ministry of religion, was included within the far-reaching provisions of the law and subjected to tax for license. Bankers and pawnbrokers, lawyers and horse-dealers, physicians and confectioners, commercial brokers and peddlers, proprietors of theatres and jugglers on the street, were indiscriminately summoned to aid the National Treasury. The law was so extended and so minute that it required thirty printed pages of royal octavo and more than twenty thousand words to express its provisions.

Sydney Smith's striking summary of English taxation was originally included in a warning to the United States after the war of 1812

against indulging a martial spirit or being inflamed with a desire for naval renown. "Taxes," said the witty essayist in the Edinburgh Review, "are the inevitable consequences of being too fond of glory." He bade us beware of Essex, Porter, and Stephen Decatur. Even in the second year of the civil war in which we were struggling for life rather than glory, we had come to realize every exaction ascribed to the British system. We were levying "taxes upon every article which enters into the mouth or covers the back or is placed under the foot; taxes on every thing which it is pleasant to see, hear, feel, smell, or taste; taxes upon warmth, light, and locomotion; taxes on every thing on earth and the waters under the earth; taxes on every thing that comes from abroad or is grown at home; on the sauce which pampers man's appetite and on the drug that restores him to health; on the ermine which decorates the judge and the rope which hangs the criminal; on the poor man's salt and the rich man's spice; on the brass nails of the coffin and the ribbons of the bride."

The system of internal revenue of which the foregoing is no exaggeration proved in all respects effective. Congress rendered the taxes more palatable and less oppressive to the producers by largely increasing the duties on imports by the Tariff Act of July 14, 1862, thus shutting out still more conclusively all competition from foreign fabrics. The increased cost was charged to the consumer, and taxes of fabulous amount were paid promptly and with apparent cheerfulness by the people. The internal revenue was bounteous from the first, and in a short period increased to a million of dollars per day for every secular day of the year. The amount paid on incomes for a single year reached seventy-three millions of dollars, the leading merchant of New York paying in one check a tax of four hundred thousand dollars on an income of four millions. Mr. Webster said that "Hamilton smote the rock of the National resources and abundant streams of revenue gushed forth." But Hamilton's Funding Bill was not moré powerful in establishing the credit of the young Republic after the Revolution than was the Internal-revenue Act in imparting strength to the finances of the matured Nation in the throes and agonies of civil war. It was the crowning glory of Secretary Chase's policy, and its scope and boldness entitle him to rank with the great financiers of the world.

CHAPTER XX.

ELECTIONS OF 1862. MR. LINCOLN ADVANCES TO AGGRESSIVE POSITION ON SLAVERY. -SECOND SESSION OF THIRTY-SEVENTH CONGRESS ADJOURNS. DEMOCRATIC HOSTILITY TO ADMINISTRATION. - DEMOCRATIC STATE CONVENTIONS. PLATFORMS IN PENNSYLVANIA, OHIO, INDIANA, AND ILLINOIS. — NOMINATION OF HORATIO SEYMOUR FOR Governor of NEW YORK. -THE PRESIDENT PREPARES FOR A SERIOUS POLITICAL CONTEST.- THE ISSUE SHALL BE THE UNION OR SLAVERY.-CONVERSATION WITH MR. BOUTWELL. - PROCLAMATION OF EMANCIPATION. - MEETING OF GOVERNORS AT ALTOONA. - COMPENSATED EMANCIPATION PROPOSED FOR BORDER STATES.- Declined by THEIR SENATOrs and ReprESENTATIVES. - ANTI-SLAVERY POLICY APPARENTLY DISASTROUS FOR A TIME. - OCTOBER ELECTIONS DISCOURAGING. GENERAL JAMES S. WADSWORTH NOMINATED AGAINST MR SEYMOUR. ILLINOIS VOTES AGAINST THE PRESIDENT. - FIVE LEADING STATES AGAINST THE PRESIDENT.-ADMINISTRATION SAVED IN PART BY BORDER STATES.-LAST SESSION OF THIRTY-SEVENTH CONGRESS. - President urGES COMPENSATED EMANCIPATION AGAIN. — EMANCIPATION PROCLAMATION, JANUARY 1, 1863. - LONG CONTROVERSY OVER QUESTION OF COMPENSATION FOR SLAVES.-TEST CASE OF MISSOURI. FIFTEEN MILLION DOLLARS OFFERED HER. - GENERAL POPE'S CAMPAIGN. -ARMY OF THE POTOMAC.- BATTLE OF ANTIETAM.-MCCLELLAN REMOVED. — BURNSIDE SUCCEEDS HIM. - DEFEAT AT FREDERICKSBURG. -HOOKER SUCCEEDS BURNSIDE. - GENERAL SITUATION.-ARMING OF SLAVES. - HABEAS CORPUS.CONSCRIPTION LAW.-DEPRESSED AND DEPRESSING Period.

1

PULAR interest in the summer of 1862 was divided between

POPULAR

events in the field and the election of Representatives to the Thirty-eighth Congress. A year before, the line of partisan division had been practically obliterated in the Loyal States-the whole people uniting in support of the war. The progress of events had to a large extent changed this auspicious unanimity, and the Administration was now subjected to a fight for its life while it was fighting for the life of the Nation.

The conservatism which Mr. Lincoln had maintained on the Slavery question had undoubtedly been the means of bringing to the support of the war policy of his Administration many whom a more radical course at the outset would have driven into hostility. As he advanced however towards a more aggressive position, political divisions became at each step more pronounced. The vote on the question of abolishing slavery in the District of Columbia had been

strictly on the line of party, and the same is true of the proposition for compensated emancipation in the Border States, and of the Act confiscating the property of Rebels. Not a single Democrat in the Senate or House sustained one of these measures. They were all passed by Republican votes alone, the Democratic minority protesting each time with increasing earnestness and warmth.

The second session of the Thirty-seventh Congress adjourned on the 17th of July, 1862, but long before that date the excitement prevailing in Congress had extended to the people, and political divisions were every day growing more earnest, partisan leaders every day more active, their followers every day more excited. The Slavery question was the source of the agitation, and by a common instinct throughout the free States, the Democrats joined in the cry against an Abolition war. They were as ready, they declared, as on the day after the firing on Sumter, to uphold all measures necessary for the defense of the Government and the maintenance of the Union, and they demanded that the Republicans should restrict the war to its legitimate ends-as defined by the supporters of the Administration in July, 1861, by the unanimous adoption of the Crittenden Resolution. They would not listen to any change of action based on change of circumstances, and they prepared to enforce at the ballot-box their opinions touching the new departure of Congress and the President.

The Democratic State Conventions in Pennsylvania and Ohio, both held on the 4th of July, reflected the feeling which so largely pervaded the ranks of the party throughout the North. In Pennsylvania the Convention unanimously declared that "the party of fanaticism or crime, whichever it may be called, that seeks to turn loose the slaves of the Southern States to overrun the North and to enter into competition with the white laboring masses, thus degrading their manhood by placing them on an equality with negroes, is insulting to our race and merits our most emphatic and unqualified condemnation." They further declared that "this is a government of white men and was established exclusively for the white race"; that "the negroes are not entitled to and ought not to be admitted to political or social equality with the white race."

The Democratic Convention of Olio made an equally open appeal to race prejudice. They avowed their belief that the Emancipation policy of the Republican party if successful "would throw upon the Border free States an immense number of negroes to