The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1866-05-21
Taxation of Cotton.

would be glad to be informed.
Taxation of Cotton.
The debate which sprung up in the House
of Representatives few days ago, ON the first
and sixth sections of the Internal Revenue
bill, will be of interest to all who are concerned
in the manufacture of cotton, and to consum-
ers generally, and in some passages has not
unimportant bearing upon the reconstruction
of Southern society. The propositions to
which we allude are, /. To exempt from taxa
ton 600 pounds of cotton annually, for each
who in time, it is hoped, will constitute an in
fuential middle class, without which really
free government is nearly impracticable. 2.
To allow drawback upon all cotton manu-
featured in the United States, securing rev.
enue from that portion of the crop which goes
abroad-about four fifths, according to the re-
port of Mr. Wells-without bearing too heavi-
ly upon our manufacturing interests at home.
The illustration of these two propositions was
limited by the rule restricting debate to five
minutes, but will nevertheless be found to give
a very satisfactory notion of their bearings.
The first section of the bill reads as follows
That on and after the list day of July, 1856, in
lieu of the duties on manufactured cotton,
as provided in an act to provide internal reve-
nue. to support the Government, to pay inter-
est on the public debt, and for other purposes,
approved June 30, 1854, as amended by the act
OF March g. 1855, there shall be paid by the pro-
Queer, owner, or er, upon all cotton pro-
duced within the United States, and upon
which no tax has been levied, paid or collected,
a tax OF five cents per pound, as hereinafter
provided; and the weight of such cotton shall
be ascertained by deducting four per cent. for
tare from the gross weight of each bale or pack
age; and such tax shall be and remain lien
thereon, in the possession OF any person whom
soever, from the time when such cotton is pro-
duced as aforesaid until the same shall have
been paid and no drawback shall in any case
be allowed on raw or unmanutactured cotton of
any tax paid thereon when exported in the raw
or manufactured condition. But no tax
shall be imposed upon any cotton imported
from other countries, and on which an import
duty shall have been paid.
Mr.. Lynch moved to amend the section by
adding the following:
Prouided, That any producer may procure an
exemption of not more than six hundred
pounds Of cotton in any one year, as follows
Here follows long description of the forms
to be observed in procuring the exemption,
which we omit, merely observing that their
general purpose was to prevent frauds. Mr..
Lynch said,-
The object of the amendment have proposed,
as will be seen, is to encourage the smaller pro-
ducers of cotton. 1t is following the general
spirit of this bill which exempts all incomes of
less than 81 900 year. 1t also exempts all
manufactures of less than $780, And the in
oof mi, xuI,n do NOT,
exempted from taxation. The amendment
have proposed follows out the same general
principle.
There is great deal of machinery connected
with it, for the same reason that there is great
deal of machinery connected with this section
levying a tax upon cotton. By referring to the
bill it will be seen that sections two, three, four,
and five all long sections, relate to the collec-
ton of this tax on cotton. There is necessarily
great deal of machinery connected with this
subject, for the reason that the collection of the
tax is provided for by a lien upon the cotton
produced, instead OF, as in the case of manufac-
lures, relying for the payment upon the respon-
sbility OF the manufacturer. This amendment
is intended simply to encourage the small pro-
ducers by exempting this small amount; thus
following out the general spirit of the bill. I
think there should be no objection to it.
Mr.. Morrill,, chairman of the Committee of
Ways and Means, hoped the amendment
would not be adopted, as it would open the
door to fraud through vast region Of coun-
try. He thought furthermore that the gentle
man from Maine proceeded upon an entirely
wrong theory with reference to who pays the
tax. On whatever is consumed here in this
country, we, the consumers pay the tax, and
on whatever goes abroad we expect, of course,
to compel foreigners to pay the tax.
Mr.. Lynch replied
desire to call the attention of the gentle
man from Vermont, the chairman of the Com
mittee of Ways and Means, to the machinery
which the committee have found it necessary to
provide, in order to prevent frauds in the col
lection of this tax upon cotton. While the
amendment is somewhat lengthy in it's provis-
ions, yet the only point of it is the exemption
of six hundred pounds of cotton from taxation.
Its lengthy phraseology is designed to secure
the Government against frauds in connection
with that exemption. LII the honorable chair
man of the committee will examine the pro-
vision of the old law with reference to the ex-
emption of manufacturers to the amount of
$780, he will find that that provision is liable TO
the same objections which he urges against this
amendment. The only question is whether the
proposition is SO guarded that the Government
will not be defrauded l suppose the gentle
man will agree that now when the labor of the
South, the cotton-producing portion of the
country is revolutionized it is desirable that if
this tax be imposed on cotton, the small pro-
ducers there should have some encouragement.
To Mr.. Garfield of Ohio, who inquired how
the amendment would help the man who
raises only 900 pounds of cotton, adding that
the tax must eventually be paid by the con-
sumner, not by the producer, and repeating Mr..
MorrilEs objection of the increased tempta-
ton to fraud, Mr.. Lynch replied that the same
objection would apply to the whole bill, for it
ali depends upon whether the machinery
adopted is such as to protect the government
against frauds in the collection OF the revenue.
The amount proposed to be exempted by the
amendment is small; but the same might be
said with regard to manufacturers to the
amount of not more than SoOO. Inc same
NAV be said also with regard to the exemp-
tion of 81 900 from income tax. The amount
of tax exempted would be large to those
who would have to pay it. This amendment
proceeds upon precisely the same principle
which is carried out all through the bill with
reference to other products. The gentleman
must see that whoever finally pays the tax
the producer must get the benefit OF just TINS
nve cents per pound on the six hundred
| pounds.
MI. Lynch afterwards modified his amend
ment, SO as to leave the machinery for its ex,
ecutlon 10 the Bureau of Internal Revenue
The modified amendment read:
Pro0adec, That any producer may in each
year procure an exemption of not more than
| six hundred pounds of cotton produced nv him.
| self and owned by him from plantine to balino
and exemption, by complying with Such regu,
| lations as the Commissioner of Internal REEVE
nue. shall prescribe, under the direction Of the
Secretary of the Treasury.
| Mr.. Morrill, said that if this amendment
should be adopted, every piccaninny in the
South would have six hundred pounds of cot
ton to be exempted. All of the land would
be leased or so managed that every workman
whether employed for wages OF otherwise
would come forward with what would appear
to be valid claim for an exemption, and i
TINS amendment should be adopted, he would
regard it as equivalent to the rejection of tbi,
proposition to tax cotton
To this objection Mr.. Lynch again replied
should be very sorry to- propose any amend
ment here which would defeat the object n
the committee in levying a tax unon cation