THE NATIONAL REVENUE,
Interestine and Important Report, of
the Bevenne Com-
MISBIOI3 erSi
Results of DirectTaxation—Frauds-- -
How to Prevent Them; &c.
A preliminar3r report of the United States
Revenue Commission has been printed, and
makes a pamphlet of seventy-six pages.
The Commission say:
It became apparent to the Commission, at
the outset, that any attempt to embrace in
their investigations, prior to ,the time of the
presentation of a first report, the whole field
of inquiry assigned to them, would not only
be impracticable, but also, that any effort
with this object in view would, from its ne
cessary diffuseness, lead to no practical or
satisfactory results. They therefore, in de
fault of any specific instructions,either from
Congress or the Secretary of the Treasury,
other than were contained in the act autho
rizing the commission, adopted the plan of
taking up specifically for investigation those
sources of revenue which our own experi
ence and the experience of other countries
have indicated as likely to be most produc
tive under taxation, and most capable of
sustaining its burdens. The result of these
investigations the commission propose to
submit in the form of independent and spe
cial reports.
, In carrying out this plan they have sought
to make• themselves practically acquainted
with each subject of inquiry by personal
inspection (when the investigation related
to a specific branch of industry) and by
putting themselves in all cases into direct
and frequent communication with ,revenue
officials, and with representative business
men from every section of the country. The
Commission have also, in most cases;caused
the information communicated to them to
be received in the form of testimony, under
oath, and to be faithfully reported; and they
express the hope that Congress will consider
it expedient to order this record to be pre
served in printed form.
They complain of the imperfect and in
correct statistic furnished them by govern
ment Bureaus. Another great source of
difficulty experienced by the Commission
in conducting their investigations, with a
view of arriving at any correct estimates of
the future revenue of the country, has been
the abnormal and disturbed condition of
every branch of trade and industry since
1861, owing to the effects of the war, the
frequent alterations of the tariff, and the
inauguration of the Internal Revenue
system. Many branches of trade and in
dustry have been curtailed during this
period from thirty to seventy-five per cen
tum, and some few have been entirely de
stroyed. Every advance made in the tariff
and in the excise has, moreover, been an
ticipated to such an extent by every class
of importers ' dealers, manufacturers and
speculators, that it cannot be said as yet
that the government has fully tested the
capacity of any one of what may be con
sidered as its great and legitimate sources
of revenue.
Thus, for example, the commission esti
mate that on the Ist of July, 1864, the date
- when the advance in the tax on distilled
spirits, of from sixty cents to one dollar and
fifty cents per gallon, took effect, there were
made and stored in anticipation of this ad
vance at forty millions of gallons, or a
quantity sufficient to supply the wants of
the country for at least a year in advance.
Since July 1, 1864, therefore, the receipts of
the government from distilled spirits have
from this-cause necessarily been inconsider
able. Of cigars, in like manner, it is esti
mated that from seventy to eighty millions
were manufactured and stored in the city of
New York atone, in anticipation of the tax.
The stock of spices imported into the coun
try previous to the advance of the tariff were
also probably equal to nearly two years'
supply, while in the case of the insignificant
article of matches, on which the tax is only
one cent per bunch, the stock accumu
lated in anticipation of the tax was so large
that it has not, even at the present date,
January, 1866, been entirely exhausted.
This abnormal condition of things, con
pled with the fact that the.excise has been
levied, to a great extent, on a basis of greatly
inflated values, renders it extremely ditli
cult to predicate anything with certainty
concerning the future l from the immediate
past.
They next give some account of the reve
nue system of Great Britain and that of
France. In the former country the follow
ing are about the percentages yielded
by each item to the revenue: customs, 32;
excise, 28; stamps, 131; land and assessed
taxes, 5; income and property taxes, 12;
post office 51; miscellaneous. 5.
Of•the customs revenue 91 per cent. was
derived from five articles : spirits, sugar,
tea, tobacco and wine.
Of the excise, 97 per cent, was derived
from licenses, malt and domestic spirits.
Intoxicating beverages and tobacco
yielded nearly 40 per cent. of the total rev
. enue.
The most productive stamp duties were
those on the conveyance and transmission
of property; deeds, probate ofSwills and leg
acies and successions. Next to these stood
stamps on policies of insurances.
The direct tax on land seems very small,
being only about one and a half per cent. of
the total revenue, but estates and interest
in land are reached through the income tax,
of which nearly sixty per cent: (under
schedules A. and. B.) is assessed on real
property and the profits of occupying it.
The income tax is at present six pence in
the pound, or more than four per cent, on
the assessed valuation.
Such are the leadingfeatures of the British
revenue system. Having always a regard
to the exemption of home industry from
burdens, Great Britain thus raises hertaxes:
1. From articles of necessary and large con
sumption, as tea, sugar and coffee. 2. From
articles of indulgence, as spirits, beer,
(malt) tobacco and wine. 3, From licenses
and other taxes on occupations. 4. From
stamps on legal doeuments, the conveyance
and descent of property, andi instruments of
business. 5. From occupied :houses, and
the luxuries of living, servants, horses, dogs
and carriages. 6. From incomes derived
from realized property and professional and
other earnings. 7. From the post office.
In France, direct taxes, registration,
stamps, customs duties, sugar, beverages
and tobacco yielded more than seventy-six
per cent. of the whole revenue, in the fol
lowing proportions: Direct taxes, eighteen
per cent.; registration and stamps tweniy
three per cent.; customs duties (excluding
sugar), four and a half per cent.; sugar, six
per cent.; beverages, twelve per cent., and
tobacco thirteen per cent. The deficit in
the French budget for 1864 is reported at
about 50,000,000 f.
Comparing ;the French with the English
revenue system, we observe the same ex
emption from' taxation of hbme industry,
especially of those manufactures which find
a market in foreign countries. L an d i s
subjected to heavier burdens in France than
in England, and the freedom of occupation
and action is restrained by heavier exactions
in the way of licenses, stamps and registra
tions. The revenue' derived from foreign
imports is trifling in comparison with toe
evstoms revenue of. Great Britain. Ticea p.
petites and indulgences of the peaple are
reached alike in both countries by heavy
taxes on sugar, beverages and tobacco. and
in both the post-Office is made to contribute
a large revenue. -
The Commission do not wish to
:be understood as recommending any servile
imitation of details; for nothing seenus more
;evident than that a revenue system for a
particular ctluntry . cannot be framed thOo
retically or, copied from any_ other, but
must in every case. be adapted to the re
source's of the' country for which it is de
signed; and the fiscaLaptitudes and capacity
of its people.
Thus, upon no one point are writers on
the theory of taxation better agreed than
that taxation of raw materials is to ;be
avoided as far as possible; but yet with the
experience and practice of the government
of British India in respect to opium, salt
petre and shellac; of Holland in respect to
the coffee, : sugar .and spices of Java and
Sumatra; of China with her tea; Portugal
with her wines, and Peru with her guand, it
would'be hardly the part of-wisdom and
sound policy for the United States to legis
late on general principles only, in respect to
articles of which they, like the nations re
ferred to, have also a virtual monopoly, and
for the supply of which other territories than
their own are dependent.
The Commission strongly condemn our
present revenue system:
The diffuseness of the present revenue
system of the United States is doubtless one
of its greatest imperfections, and under it
the exemption of any article from taxation
is the exception rather than the rule.
A system of taxation so diffuse as the
present one necessarily entails a system of
duplication of taxes, which in turn leads to
an undue enhancement of prices; a decrease
both of production and consumption, and
consequently of wealth; a restriction of ex
portations and of foreign commerce, and a
large increase in the machinery and expense
of the revenue collection.
In respect to the injurious influence of this
duplication of taxes upon . the industry of
the country, the commission cannot speak
too strongly. Its effects have been already
most injurious. It threatens the very ex
istence—even with the protection of inflated
prices and a high' tariff—of many branches
of industry; and with a return of the trade
and currency of the country to anything
approximating its normal condition, it
must, by checking development s prove
highly disastrous.
The influence of the duplication of taxes
in sustaining prices is also, do the opinion
of the Commission, far greater than those
not conversant with the subject generally
estimate; and were the price of gold and of
the national currency made at once to ap
proximate, and the present revenue system
to continue unchanged, it would be impos
sible for the prices of most products of
manufacturing industry to return to any
thing like their former level. In proof of
this the Commission ask attention to the
following illustrations :
By section ninety-four of the act of June
30, 1864,a tax of five per cent. (or its equiva
lent of specific duties) was imposed upon
the sale of most of the industrial products
of the country—lumber, breadstuffs, maple
and sorghum syrups and sugar, whale
and fish oils, and a few other articles ex-
cepted.
By the amended act of March, 3, 1865, an
increase of twenty per cent. was made to
the above rates, making the present general
manufacturing excise tax six per cent. ad
valorem on the sale prices of the product.
Under the operation of this law the
government now levies and collects from
eight to fifteen per cent. (and even in some
instances twenty per centum) on almost
every finished industrial product. In order
to fully understand the reason of such con
clusions, it must be borne in mind that,but
comparatively few products of manufactur
ing industry come to the consumer as the
result of one process, but that the finished
product is almost always au aggregate of
several distinct and separate manufactur-
in g processes.
A good illustration of this principle, and
of the working of the revenue laws in re
spect to the same, drawn from one of the
many statements of experience submitted
to the Commission,. is presented in the
manufacture of umbrellas and parasols, as
carried on in the cities of New York and
Philadelphia. It was formerly the prac
tice of umbrella makers to manufacture the
main constituents of their product as one
business; but now the business of an um
brella manufacturer is rather to assemble
the various constituents of an umbrella or
parasol; which are made separately and in
different parts of the country. Thus, for
example, the sticks, when of wood, are
made in Philadelphia and in Connecticut.
part of native and part of foreign wood, on
which last a duty may have been paid. It
the supporting rod is of iron or steel, it is
the product of Still another establishment,
In like manner, thehandles of carved wood;
bone, or ivory, the brass runners, the ties,
the elastic band, the rubber of which the
band is composed, the silk tassels, the but
tons, the cover of silk, gingham, or alpaca,
are all distinct products of manufacture;
and each of these constituents; if of domes
tic production, pays a tax when sold of six
per cent. ad valorem, or its equivalent.
The umbrella manufacturer now aggre
gates all these constituent parts previously
taxed into a finished product, and then pays
six per centum on the whole. It is, there
fore, evident that uncier the present excise
system all the parts of the umbrella are
taxed at least twice, and in some instances
three times, thus adding from twelve to
fifteen per cent. to the cost of the umbrella
direct; while we may feel certain,moreover,
that each separate manufacturer makes the
payment of the sti- per cent. tax on his
special production occasion for adding from
one to three per centum additional to its
`coat price. In some instances known to the
Commission, this laddition, thus made by
the manufacturer by reason of the payment
of his general manufacturing tax, has
amounted to over six per cent.
Again, in the case of books, pamphlets,
&c., a tax imposed on which, being a tax
upon knowledge, can only be justified on
the grounds of imperative necessity, it is
claimed that, including licenses and income
tax, the finished book and its constituent
materials pay from twelve to fifteen distinct
taxes before it reaches the reader. Every
separate item that enters into the book—
paper, cloth, boards, glue, thread, gold leaf,
leather and type materials—pays from three
to six per cent. in the first instance, and
then five per cent. on the whole combined;
and this not upon the cost of the manufac
tured article, but upon the price at which it
is sold.
On cotton fabrics the tax now levied and
collected ranges, according to the quality
of the goods, from nine to fourteen cents
per pound.
On refined sugars the tax on gross sales,
by reason of an inequality of adjustment
between the tariff and the excise, is now
claimed to be nearly equivalent to all the
additional value conferred upon them in re
fining by all the labor employed therein.
Other articles, such as wagons, locomotives,
ckc. ' might equally well be cited as illus
trations.
A similar duplication of taxation to that
above described, must, in the opinion
of the Commission, also attend the adoption
of a tax on sales, which at present seems to
find much favor throughout the country.
Local taxes on industrial circulation in
every State, county, township, and village
of the Union would be confessedly calami
tous; but they could not be as bad !as a
frontier drawn around each individual in
the nation over which nothing could pass in
or out not smitten with a tax—repeatSd at
each border.
Another matter of more serious import
ance; in its bearing upon the industry of
the country, than the duplication of taxes,
is the lack of equalization or adjustment
between the tariff and the excise.
This bubject, which the Commission from
leek of time have not been able to inY,esti
sate as hilly as they desired, but upon which
they profess to present a special report, de
mands the serious and prompt attention o
THE DAIL*EYENINCr BULLETIN : PHILADELPHIA, TUESDAY; JANUARY 30, 1866.
Congress. The nature of this inequality
can be better illustrated by example than
by argument.
We, take as before, and as offering the
most striking illustrations, the case of the
umbrella and the book industries. - In the
case of the umbrella and parasol , manufac
ture, the cover, as a constituent element of
construction, represents from one-half to
two-thirds the entire cost of the finished
article. The silk, the alpaca; and the
Scotch gingham; of which the covers are
made, all all imported, the former paying a
duty of sixty per cent., and the latter two
above fifty per cent. ad valorem. the varia
tion being slight on the quality of texture.
The manufactured umbrella, covered with
the same material, whose constituent:parts
are not taxed, either on the material used
in their fabrication or on their sale, are
however, admitted under the present tariff
at a duty of thirty-five per cent. ad valorem,
or at a discriminating duty against the
American and in favor of the foreign pro
ducer of from fifteen to twenty-five per
cent.
- -
If we make allowance for the various
United States Internal Revenue taxes, it is
claimed by the American manufacturers
that the discrimination in favor of the for
eign producer is fully equal to forty per
cent. It needs hardly to be added that
during the past six months imported um
brellas have been sold at auction .in New
York and Boston, with the original c
duty, freight and charges paid in gold, for a
less price than the American article can be
manufactured; or that the business of mak
ing umbrellas and
. parasols in New York
and Philadelphia, involving a capital of
$2,000,000, and employing the labor of some
five thousand persons, a majority of whom
are females, is threatened with utter de
struction. In two instances cited to the
Commission, umbrella manufacturers have
closed their factories in the United States,
and, with a view of exporting to this coun
try. have transferred their capital and skill
to Europe.
The Commission add that at the present
time the one article which, above all others,
would seem to be a peculiar product of
American industry, viz., Webster's Spell
ing Book, is now being printed in large
quantities in London, for the use of Amer
ican schools.
-
Another striking illustration of the ne
cessity for the equalization and adjustment
of the Tariff and the Internal Revenue act
is afforded in the case of Manilla rope. By
the present Tariff act, Manilla hemp, im
ported direct from Manila, is charged with
a duty $25 ton; and when imported from
Europe an additional duty of 10 1p cent. ad
valorem, amounting to between $l5 and $25
p ton (according to its cost in Europe),
making,in such case, the whole duty amount
from $4O to $5O V ton. On the other hand,
the duty on imported or Manilla rope is
only 2 , 1 cents V pounds or $56 p ton. By
the Internal Revenue act the tax on the
manufacture of cordage is fixed at 6 p cent.
on the market value, which at the present
time amounts to about cents V pound,
or over $33 V ton. It seems evident, there
fore, that while the American manufacturers
of cordage are paying a duty on hemp im
ported directly of $5B p ton (and when im
ported indirectly of $73 *p ton), and while
the only duty on imported rope is but s.sri
V ton, that not only are they without pro
tection, but that there is a difference in the
taxation against them, and in favor of
foreign manufacturers, which must result
most injuriously to this branch of business
We.need only add that under this state of
things the importations of Manilla cordage
from Europe seem to be rapidly increasing
The report next suggests the "Proposed
Revenue Policy of the Future."
In respect to the evils arising from exces
sive duplication of taxes under the interne
revenue system, and from a lack of equali
zation between the tariff and the excise. it
may be urged that the remedy for the latter
difficulty is most easy, namely, by increas
trig the tariff. To this, however, as a per
manent measure, there are most serious
objections, inasmuch as the lack of equali
zation is not confined to the articlesspecified
in our illustaations. but is very general,and
will be more and more extensive as the val
ue of currency approximates to that of gold:
while an increase in the tariff, sufficient to
remedy all the difficulties, would render
the tariff itself almost prohibitory, or al
least so high as to invite continued assaults.
deprive it of all the elements of stability
and increase the business of the contraban
dist. The remedy, therefore, for the diffi
culties above pointed out and illustrated,
save in a few striking instances,which have
probably resulted from oversight in the
framing of the law, must, in the opinion of
the Commission, be sought for in such a
revision of the present internal revenue
system as will look to an entire exemption
of the manufacturing industryof the United
States from all direct taxation (distilled and
fermented liquors, tobacco, and possibly a
few other articles excepted). Thisthe Com
mission are unhesitatingly prepared to
recommend. "
As, however, the revenue derived from
the excise on the industrial products of the
country amounted to nearly sixty per
cent. of the gross internal revenue in 1S03;
to sixty-four and a half per cent. in 1564;
and to nearly fifty per cent. in 1865, it is
evident that a radical change of the kind
recommended should not be made at unce,
but gradually and according as experience
satisfies us of our ability to substitute other
and less objectionable forms of taxation,
adequate to produce a revenue correspond
ing to that relinquished.
To endeavor to remedy the difficulties
grow in gout of the present dupli
cation of taxation and want
of equalization between the excise
and the tariff, by specific enactmens of ex
emptions, as has been proposed by some,
would, in the opinion of the Commission, be
impracticable, and would crowd the statute
book with such a detail of enumeration as
would render the law exceedingly difficult of
comprehension, and open the way for more
gigantic frauds than are now practised. The
evil is radical; the remedy must also be
radical.
Assuming, then, that the policy indicated,
which we here state in brief to be the aboli
tion or speedy reduction of all taxes which
tend to check development, and the reten
tion of all those which, like the income tax,
falls chiefly upon realized wealth, is
accepted as the desirable future revenue
policy of the country, the question next
arises, in what manner and to what extent
can it be carried out, and at the same time
ensure to the government a revenue
adequate to its necessities.
As the average of the present tariff is un
derstood to be upwards of forty per cent.
upon the invoiced value of those importa
tions upon which duties are levied—the
average having been greatly increased
during the past few years by the imposition
of duties or tea, coffee, and other articles
previously on the free list, as well as by
some additions to other articles—the Com
mission, after making all due allowance for
a possible reduction of some duties and an
increase of the free list, think it safe to esti*
mate the amount of revenue derivable from
customs for the fiscal year 1867 to be at least
one hundred and thirty millions of dollars.
The Commission are unanimously of the
opinion that the present rate of two dollars
per gallon on spirits is in excess of the
proper revenue standard, anti that a reduc
tion will be for the interest both of the reve
nue and of the country. The reasons which
have led to this conclusion are presented is
detail in the "special - report (No. 5) on dis
tilled spirits," to which the Commission
would respectfully ask attention. They
accordingly recommended that the rate of
tax on , distilled spirits be reduced to one
dollar per gallon. . .
With this rate of duty, and with the in
crease in the annual consumption for Indus
trial purposes; (estimated at no leas than ten
million gallons), which must follow, the
Commission are of the opinion,that,rnaking
alltilowances for a certain amaint of illicit.
distillation ; which,under any circumstances,
Will take place, an average annual revenue
Of at least forty millions of dollars from
this source'may be collected.
'But, whatever may be the rate of tax
agreed upon for the future, it is clearly evi=
dent that a far more stringent and effective
law than that which now exists is needed, if
any fair proportion of the amount which
government bas-a right to expect from this
source is to be collected, and protection at
the same time extended to the honest
tiller as against the competition of his illicit
competitor.-
The Commission, therefore, present in
connection with their special report upon
this subject, a draft of a new law, which
they believe will be effectual for the preven
tion of fraud and the securing of the reve
nue. This bill, which is necessarily arbi
trary and restrictive, does not in some of its
essential features meet the approval of a
portion of the distilling interest of the
country, and their opposition to it may be
fairly exi,ected.
The Commission have, however, given a
great amount of time to he investigation of
the subject, and have availed themselves of
the judgment of the most experienced re
venue officials, distillers and dealers from
various sections of the country, and have
also sought to acquaint themselves most
thoroughly with the matter in which this
subject is treated for revenue in the various
States of Europe.
The securing of a large revenue from dis
tilled spirits in the 'United States is abso
lutely necessary to insure the successful
carrying out of any plan for simplifying the
internal revenue system, and relieving the
general industry of I:3 country from a
burden of taxation which must inevitably
result in disaster. No industrial interest in
the country can better sustain the burden
of taxation than distilled spirits. The pre
cedent of all other countries are uniform in
favor of taxing spirits to the maximum con
sistent with revenue;and while any relaxa
tion of the law on the one hand does not
benefit the customer, its stringent enforce
ment with a regulation of the business will
not diminish the amount which appetite or
industrial necessity demands for consump
tion. _
As the present rate of tax imposed upon
fermented liquors—viz., one dollar per bar
rel of thirty-one gallons—is in excess of the
rate imposed by any of the States of Europe,
Austria excepted, and as the present rate
moreover, in the opinion of the Commission
after full consideration, is believed to be
fully up to the revenue standard, and as
snch is all but unanimously acquiesced in
by the brewing interest of the country, they
would, therefore. recommend that the exist
ing rate be neither increased nor dimin
ished.
The determination of the proper mode of
collecting the tax on fermented liquors, and
preventing the large amount of fraud which
has heretofore,undonbtedly,been committed
in regard to the same, has been to the Com•
mission a subject of no little difficulty.
By reference to their Special report (N 0.6)
it will be seen that a tax on nr - .lt in this
country is not practicable; neither is the
plan, also investigated by the Commission,
of ganging and assessing liquor, either in
"coppers" during the process of manufac
ture, or subsequently while in the ferment
ing vats. Abandoning both of these me
thods, therefore, they have, with the full
concurrence and assistance of the leading
brewers of the country, devised a plan for
collecting the tax by means of a stamp,
printed on insoluble parchment paper, to be
hffixed to each barrel sold and removed
trom its place of manufacture, with a re
quirement that the same be canceled by the
retailer or consumer.
Specimens of the stamps designed for thi
purpose have been prepared for submission
to Congress, while the full details of the
plan for using them are given in the special
report referred to. With the adoption of
this system, and the retention of the present
rate of excise, the Commission estimate
that the Government may rely upon an im
mediate annual revenue from fermented
liquors of at least five millions of dollars.
The attention of the Commission kas been
especially given to the cotton product of the
United States as a source of revenue, and
they would refer to their special report,
(No. 3) and also to the testimony accom
panying the same, as embodying all the in
formation requisite for the formation of a
correct opinion on this subject. As the
result of their investigations, the committed
recommend that a tax of five cents per
pouud be levied on and after Jnly 1. 18,66,
upon all cotton the product of the United
States; and that the same be collected of the
manufacturer at the place of consumption,
and of the merchant or factor at the port of
export upon all foreign shipments. Such a
Wan will not interfere with the growth and
eultivatien of this staple, or its free move
ment throughout the country, and, will re
duce the machinery and the expenses of
collection to their minimum.
The above proposed rate of taxation on
cotton, it is believed, will not prove in any
degree detrimental to any national interest,
and will yield a revenue, at twenty-two dol
lars per bale, of twenty-two millions of dol
lars for every million of bales, produced
and sold for consumption. With a crop of
three millions of bales, and a tax of five per
cent per pound, the Government might de
rive an annual revenue of $136,000,000 ; or
ot $:-8,000,000 on a crop of four millions ot
he I", which would be less than the crop of
1859-'6O. Of this sum-if the consumption of
the United States shall reach, in either of
these years, the consumption of 1860-the in
habitants of the United States would pay
about $21,000,000 ; and it is believed that
there are few taxes which can be levied
which would be so slight a burden to the
consumer. The consumption of cotton per
head m the United States, at the highest
point ever attained to, has not exceeded
twelve pounds. A tax or five cents per
pound would, therefore, be an average of
about sixty cents to each individual per an
num. (See special report, No. 3.) As the
crop of the present year, in_the opinion of
competent persons consulted by the Com
mission, is not likely to be less than two
millions of bales—and if good seed can be
obtained may exceed this figure—the Com
mitision are of the opinion that the Govern
ment may safely rely for the fiscal year end.
ing June 30, 1867, upon a revenue from this
source of at least forty millions of dollars,
and for the future an average revenue from
cotton of at least fifty millions of dollars may
undoubtedly be relied upon.
In respect to tobacco, the Commission, as
'the result of their investigations, are unani
mously of the opinion that the tax should
not be laid upon the leaf.
The total amount received in 1865 from
tobacco and its manufactures was $11,387,-
799. The amount received from tobacco in
1865 would, undoubtedly,. have been much
greater had it been possible to prescribe ef
fective revenue regulations respecting the
immense stock of tobacco held in the South
ern States at the close of the rebellion.
The average annual taxable production of
the different kinds of manufactured tobacco
from September 1, 1862, to June 30,1865,was
42,809,168 pounds. This amount, at the pre
sent rate of excise, would return an annual
revenue .of $10,736,795. With some amend
ment of the present law, and with the ex
haustion of the stuck in the country, made
in anticipation of the tax, which is now
nearly effected,the Commission believe that
the government may safely rely upon an
annual revenue from this source for the im
mediate future of at least eighteen millions
of dollars ($18,000,000.)
Although in many respects an obnoxious
tax, yet falling ash does mainly upon accu
mulation, it will probably be sustained with
less detriment to the country than any
other form of taxation, the excise on spirit
uous and fermented liquors and tobacco
excepted. The discrimination at present in
the rate levied on incomes under and in
excess of $5,000 is, however, unjust, being in
fact a tax on the results of successful indus
try and business entelprise; and the Com
mission recommend that this discrimination
be abrogated, and the rate be equalized..
They recommend that, in the future as
sessment of income one thousand dollars
be exempted from' taxation, and that, in
assessing the income tax, no allowance
whatever be made for house rent, or at least
that the amount allowed to be deducted for
rental should not in anv case be allowed to
exceed three hundred dollars.
For the future, with the changes above
recommended, the Committee believe that
the government may safely rely on an an
nual revenue from this source of about fifty
millions of dollars.
From the excise on banks and railroads,
the amount received during the fiscal year
1865 was $13,579,594, and the Commission
assume tb e collection of a similar amount for
the immediate future.
By the amended act of March 3, 1865, a
duty was imposed of one dollar on each bar
rel of crude petroleum of forty-five gallons.
The amount received from the time the tax
went into effect until the close of the fiscal
veer ending June 30, 1865, was $229,546 10.
For reasons which will be found in detail in
the Special Report (No. 7) on this subject,
the t✓ommission recommend that the tax as
thus imposed on crude petroleum be re
pealed, and that the rates of tax on refined
coal oil, petroleum, naphtha, benzole, dc,C.,be
retained as at present.
They are also, of the opinion that when
the uses of all the elements of petroleum,
and of the distillates of oil yielding coal and
shale have been more fully developed, it
will be possible for the government to de
, ive a much larger revenue from these arti
( les, with a much lower rate of , excise than
is now imposed.
For the next fiscal year, the Commission
believes that a!revenne in excess of $3,000,-
000 may be relied on from refined ooal oil
and petroleum.
Under the present excise law a tax of
, wenty-four cents per gallon is imposed
upon spirits of turpentine, and six per cent.
ad valorem on rosin.
It is represented to the Commission that
the tax as at present imposed upon rosin
and distilled turpentine is unequal and
oppressive; but as the supply of Mese arti
cles from the United States to a great ex
tent controls the prices of the world, they
are of the opinion that the tax on spirits of
turpentine and rosin should not be wholly
remitted, and that no drawback on their
export to foreign countries be allowed.
The most important results in this de
partment of the revenue flow from the
smallest stamp taxes universally diffused.
Thus one-third of the revenue received from
stamps in the fiscal year 1865 were derived
from the three items of "bank check,"
"receipt" and "match stamps;" and from
the first two (bank check and receipt stamp)
the receipts for the fiscal year 1666 average
about $.200,000 per month.
The high prices of paper, colors and other
materials have considerably reduced the
demand for cards within the last four
years; but it is the opinion of a committee
of card manufacturers, as presented to the
Commission, that with a uniform stamp tax
of five cents per pack an annual revenue of
at least $200,000 may be derived from this
source.
With this and some other amendments
relating to proprietary medicines and simi
lar stamped articles, the Commission are of
the opinion that a revenue of at least twenty
millions of dollars may behereaftercollected
from stamps.
The Commission submit the form of a bill
intended to render the execution of the pre
sent law more effectual, and they are of the
opinion that with its adoption, or by the
enactment of some equivalent provisions, a
revenue of at least three millions of dollars
may be secured from this source.
The value of the whole real estate and
personal property in the United States in
1860 was upwards of sixteen thousand mil
lions of dollars ($16,159,000,000). Allowing
thirty-two years as the lifetime of a genera
tion, and assuming the legacy and succes
sion duty at an average of one per cent., the
receipts from this source should yield an
nually five millions of dollars.
From gross receipts the revenue for the
fiscal year, 1865, was $9,697,866. Under this
bead are included. mainly, the taxes levied
on transportation and intercommunication,
and as the majority of them, railroads ex
cepted, yield but inconsiderable amounts,
are in opposition to the general 'system of
revenue, which the Commission recom
mended, sound policy requires that they
should be repealed as soon as practicable.
Under this head are also included tele
graph and express companies, the former of
which pay five per cent. and the latter but
three per cent. on the gross amount of their
receipts. For this discrimination the Com
mission can see no good reason. Express
companies, as at present constituted, are,
for the most part, monopolies, and the ave
rage rate of profits paid by them is be
lieved to far exceed the ratio of profits in
almost any legitimate business. The Com
mission, therefore, recommend that the tax
on the gross receipts of telegraph and ex
press companies be equalized, and are in
clined to the ( pinion that the tax on re
ceipts of express companies might be well
advanced to a higher figure than five per
cent. An increased revenue from such an
advanced rate will compensate in some de
gree for any reductions that may be made
on the taxes now levied on bridges, toll
roads, ferries, ships. tic.
The revenue receipts from telegraph com
panies for the fiscal year 1865 were $215,-
050 62; and from express companies,
;',529,275 89.
Under the present law (section 120) the
dividends and interest upon the bonds of
certain corporations therein enumerated are
made liable to the income tax, which is pay
able by the proper officers of such corpora
tions. The Commission are Unable to dis
cover any valid reason why the moderate
dividends of banks and railroad companies
should be thus taxed, while the larger pro
f' a of express companies, manufacturing
and other corporations are omitted. As these
returns are invariably made by an officer
who has no pecuniary interest therein, it is
believed that they are uniformly more nearly
correct than the average returns of income
by individuals; and they therefore recom
mend an amenment of the law, which will
include in the provisions of the above sec
tion all important incorporated companies
for whatever purpose organized.
The Commission assume that the revenue
derivable from gross receipts for the fiscal
year ending June 30,-1867 will continue as
at present, about $9,000,000.
The Commission recommend that the
present law imposing a tax of five dollars
on every ten thousand dollars, or one•
INN entieth of one per cent. on the par value
of all stocks sold, be repealed, and in lieu
thereof a tax of one dollar on ten thousand
dollars, or tbe one-hundredth (1-100) of one
per cent. on the par value of the stock, be
substituted, and collected in the following
Manner.
That each sale of stock be accompanied
by a bill or memorandum of sale, with the
necessary stamp attached; and in default of
lifflamg the necessary and required stamp
on such bill of sale, the parties selling the
stock and receiving the .money shall be lia
ble to a penalty—one half to go to the in
former and the remainder to the govern
ment—the same to be recoverable at any
time prior to toe expiration of twelve
months from the date of the transaction.
In adopting the principle of subjecting
large and frequent business transactions,
turning, on small profits, to the minimum
pecific tax, the government will but follow
a long recognized and sound commercial
policy. , •
-There is - , at present no tax-imposed on
government securities,but they are included
in the phrase, "Stocks, bonds or -other se..
curities," of the( section (ninety-nine) which ,
subjects brokers' sales to taxation. The
Commission believe, howevq, that it would
be a sound and wise policy to exempt all
transactions for the sale and purchase or
national securities from every form of in
ternal taxation.
The Commission also recommend that the•
rate of tax levied on the sales of exchange
and gold brokers be made to correspond
with that proposed in reference to sales of
stock brokers, and they submit a form of
bill to that effect.
From the aggregate tax on sales, the
Commission assume, for the future, an an
nual revenue of at least four millions of
dollars.
A recapitulation of the foregoing esti
mates given us the following aggregate re
sults for the fiscal year ending Tune 30,.
1E67:
From Customs,
From Excise, viz
$40,000,000
5,000,000
Distilled spirits,
Fermented liquors,
Tobacco and its man
ufactures, . 18,000.000
Cotton, raw.. 40,000,000
Coal oil, refined pet
troleum, &c., .
Spirits turpentine
and rosin,
Licenses,
Incomes,
Salaries,' . . . 2,000,000
Banks, . . . 15,000,000
StagiPs, . • . 20,000,000
Gross receipts, . 9,000.000
Sales, . . . 4,000,000
Legaciesandsuccession,:3,ooo,ooo
108,000,000
Miscellaneous receipts, 1866-67, 21,000,000
Aggregate; . . . $367,000,000-
Adding to the above sum the amount re
ceived in the fiscal year 1865 from the va
rious direct and indirect taxes on industry,
which, excepting the amounts derived from
the excise on spirits. b,-er, tobacco, cotton,
petroleum and naval stores,the Commission
estimate at about sixty-eight millions of
dollars, we have as the gross revenue possi
ble to e derived from all sources,under the
present rates, with the amendments above
proposed, four hundred and thirty-five mil
lions of dollars ($435,000,000).
The estimates of the Secretary of the Trea
sury for the expenditures of the fiscal year
ending June 30, 1867, including interest on
the publio debt, are, as already stated, two
hundred and eighty-four millions of dollars.
Allowing the annual expenditures to be in
creased sixteen millions of dollars above
these estimates (making an aggregate of
three hundred millions of dollars), and set
ting aside fifty millions additional for the
reduction of the principal of the public debt,
a surplus will remain (assuming the cor
rectness of theestimates of the commission),
applicable for the reduction of taxation, of
eighty-five millions of dollars ($85,000,000).
These estimates of revenue as above sub
mitted, are less in the aggregate than what
the Commission believe will actually be
realized, without some unlooked for inter
ruption of the trade and industry of the
country; and the results of their continued
investigations and enlarged experience
deepen their conviction that the capacity of
all the great sources of revenue have been
under rather than overestimated.
It was the opinion of the late Commis
sioner of internal Revenue, founded upon
his lame experience, that if the excise law,
as it stands, were thoroughly and exactly
enforced, the revenue from the excise alone
would equal or exceed five hundred mil
lions of dollars(e500,000,000)per annum: and
in this opinion the tommission, from their
own observation, fully concur. It need,
therefore, be no matter of surprise that,
with an increased efficiency and experience
on the part of the revenue officers, the aver
age monthly and quarterly receipts of in
ternal revenue also continue progressively
to increase.
Accepting, then, the results indicated as
substantially correct, the possibility of
adopting and carrying out the revenue
policy adopted by the Commission, viz: of
concentrating the sources of revenue, and
of relieving industry of all those burdens
- which tend to check its development, is de
monstrated.
Such a system, which, in contrast with the
present "diffused" system, may be termed
the "concrete," is, in the opinion of the
Commission, the only one adapted to the.
age and to our condition—the only one com
patible with great fiscal results, and with‘
that large freedom to industry and circula
tion which alone can ever adequately supply
the coffers of an enterprising, competitive
and free people.
The Commission retrommend that the
change be made slowly, and for the present,
and to begin July 1, 1866, or sooner, they
urge the following changes :
Ist. A repeal of section 100 of the amend
ed act of March 3, 1865, (generally known
as schedule A); such of its provisions as
relate to and impose a tax upon "billiard
tables" excepted.
2d. A repeal of all that part of section 94
of the amended act of March 3, 1865, which
provides for the assessment and collection
of taxes on repairs of engines, cars, car
riages, ships. etc.
3d. A repeal (subject to certain excep
tions) of all that part of section 94 which
providek.:for the assessment and collectioniof
taxes on wearing apparel.
4th. A repeal of the excise duty of two.
dollars and forty cents per ton levied upon
pig iron; the repeal of the duty of six cents
per ton levied on mineral coal; and of the
duty of one dollar per barrel on crude petro
leum.
sth. A repeal of all excise taxes on print
ed books, magazines, pamphlets, reviews„
and all other similar printed publications.
In addition to the reductions above speci
ally referred to and recommended,the Com
mission would further recommend that, on
Saturday the Ist day of July, 1866, the taxes
levied and paid upon all goods, wares and.
merchandise enumerated in section 94 of the.
amended act of March 3, 1865, be reduced
fifty per centum ; and that no allowance of
deduction whatever in the payment of the
same for treight, commissions and other ex
penses of sale be authorized or permitted.
The Commission urge a new treaty of re
ciprocity with Canada; shows that the busi
ness of the New York Custom House is very
badly conducted; point out inefficiency in
the internal revenue administration, and
suggest improvements.
FOSSILS IN AUSTRALIA.-A. petrified tree
was recently found in the Golden Horn).
claim, near Geelong, in Australia, at a deptn
of two hundred and fifty-eight feet. Pieces
of the tree examined by thei microscope
glisten like diamonds. In the same claim,
at a depth of two hundred feet, several frctas,
imbeclue,d in bluestone, have been disin
terred, of a green and yellow color, without.
any signs of mouth or respiratory organs.
The Kentucky Senate has passed an act to•
incorporate a negro bank at Louisville, one
of the incorporators being worth 8100,000.
They put in provision, however, "that the•
said bank shall have no connection with.
the Freedmen's Bureau,and that no persons.
shall be permitted to act as officers who have
ever lived in Boston, Mass."
The Providence Press makes the state
ment that a Hartford photographer has sac
ceeded in taking a 'picture of himself,
trundling himself home iu a wheelbarrow.
There is no difficulty about, provided the•
tistis betide himself.
TNDIA RIIIIR.ER MACHINE BELTING STEAM
PAC.KMI; ROSE. &c.
Englneere and dealers will find a lint. AMORT
MENT OF GOODY EAS'a PATIELNT VULCAN - Lana)
RUBBIgt BY.LTENG. PACKING. HOSE, ao., at .the
litannfactnreee Heaciquarten. • •
GOODYEAR'S,
Sun Cheetunt etreot, .
_ _ South nide.
N. B.—We, bave a .NEW and CHEAP ARTICLE et
GASMEN and PAVF..M ENT IDX4E. very theap, to
wOl sane attention of the pc.t.llc 'sculled.' '' •
. $130,000,000,
3,000,000
2,000,000
108,000,000
15,000,000
40,000,000