The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1898-05-15
Internal Revenue Taxes

government in the present emergency
lends interest TO review Of the history
OF the taxation levied for similar pur-
| pose In the war times a generation ago.
| The first measure of internal taxation
adopted by congress after the outbreak Of
the civil war became law on August ).
1861. For nearly five years the efforts Of
legislation were directed to increase the
returns from internal inposts by finding
new objects Of taxation, or by modifying
existing rates for revenue ends. 1t was
not until 1865 that the first serious attempt
to reduce these taxes was made, and be-
tween July, 1865. and July. 1858. laws were
passed reducing by more than sl73.oO.o 900
the revenue obtained from internal
sources. How extensive was this system
of taxation can hardly be expressed in a
few words Writing IN 1876, the commits
stoner of Internal revenue said:
An elaborate system Of internal taxa
ton was set on foot, which reached nearly
every species OF manufacture. trade pro-
ression. and occupation. and embraced
many articles which were specifically
taxed, the incomes of individuals, firms.
associations. and corporations. documents
Of various kinds thirty-one in number.
subjected to a stamp tax, and laying
heavy hand upon legacies. possessions.
and the gross receipts Of those operating
steamboats,. ships, barges. canal boats.
stage coaches. toll roads, ferries and
bridges. and the gross receipts or rail-
roads express, Insurance and telegram
companies; upon lotteries. theatres,
operas, museums; upon banks and bank
ers; upon trust companies and savings in
situtions, and upon occupations, flfty-one
In number, requiring licenses from those
rrTon Al 10
500. 1t may be doubted whether there
ever existed in any country system Of
taxation so comprehensive and minute In
it's details" In less than five years the
revenue obtained from these taxes reach
ed the sum of &a1o. 500. ss4-more than twice
as much as was collected under the in
ternal revenue system of 1897 when only
few OF the duties remained In force
1t is to part OF the war scheme that
Mr.. Dingley proposes to return. and il
Will not be out of place to record some
Of the datails Of the operations OF the ear
Her law, those relating to stamps. 1t is
recognized principle OF public finance that
a small duty on commercial dealings Is
fruitful source of revenue. and is easily
collected through the mechanism of
stamps. either adhesive. to be attached to
the document or taxed object, or already
printed upon form TO be used This con-
tTivance, Of comparatively recent origin
for IT was first employed IN Holland in
1624-is an important feature in the reve-
nue. systems of European countries, and
has been applied in the United States for
Collecting the excise duties on beer, to-
bacoo and distilled spirits. In the inter
nal taxation imposed in the civil war an
extension scheme OF tax duties was franz
ed. and went into operation October I,
1862. Under it were taxed agreements and
contracts, bonds. mortgages. leases, bills
Of exchange. inland and foreign; certifi-
Gates OF stock. profits. damage or deposit,
bank checks of an amount in excess of
$50. charter parties. conveyances, insur-
ance. power of attorney, probate of wills,
manifests and invoices protests and writs
express and telegraph. The taxes were
small. ranging from one cent to twenty
dollars and over, and were graded ac-
cording to the amount of the transaction
involved. The first stamps were issued in
September. 1863, and a few months trial
of the system proved it availableness and
clearly indicated the more profitable OBJ
jectS for revenue. In the twelve months
ending September 80. 1864, the sales
amounted TO $3.50, 66S, and more than one
half of this value was represented by
stamps of less than 40 cents.
Only in the first few months of the sys-
tenn were the accounts so kept as to show
the specific distribution of the revenue
among the different objects taxed After
that, the accounts were combined, so as
to show the total amount received under
the two schedules of stamp duties, in
Guiding as we'll written instruments, as
matches, photographs. cards and proprie-
tary articles. The number of stamps or
dered from the printing companies were
divided into three classes-general, pro-
prietary, and those printed on checks or
legal papers; but this division is too gem
eral TO give any indication of the princi-
pal items. Only occasionally can a single
source be shown.
The income from stamps continped TO
increase. and. after September, 1864.
matches became subject 10 a tax. The re-
ceipts for the first full year of operation
-1S6-were STATS. and for the second
year, 1865. they were SO, sS,727. of which
the commissioner believed S1,O00,O 600 to have
come from matches. The year 1866 gave a
satisfactory increase, S14,257. S37, a part OF
the additional revenue coming from the
southern states. The details of the stamp
schedule We're somewhat modified in Au-
for the delivery of property. appeals.
writs, and other original processes. ex-
empt from duty. and by imposing a tax
on bankers and brokers' sales of stocks.
bonds, etc This addition proved 10 be
troublesome, inasnuch as the bill Of
memorandum of sale was unnecessary for
the passage of title, and the law was dis
regarded. Another obstacle encountered
was the counterfeiting and washing Of
Cancelled stampes, although they clearly
bore the marks of two and even three sue
cessiye cancellations. In evidence Of some
frauds it was pointed out that the reve-
nue. from stamps was SIS, 239. lS2 in 1867,
and only 81. o4s 6l3 in 1855. There was a
full recovery in 1863. when 1855 492 was
obtained, but Mr.. David A Wells, then
special commissioner of the revenue,
thought the legitimate revenue from
stamps ought to be at least SIS, 10000 a
year" The new regulation requiring all
stamps 70 be so placed on the instruments
OF writing as 10 exhibit the entire face of
the stamp. was thought 10 have produced
an additional income Of 81. 00o. go. as 4; put
a stop 10 the practice Of covering the sup
posed half Of one stamp by the attach
menr Of another, when in fact the stamp
wss cut in two. and one-hslf used 20 rep
resent full stamp on another instru-
ment The revenue from stamps reached
its highest mark IN 1859. and, beginning
with that year. it began TO decline.
The first real exemption was that or re-
ceipts. and the act OF June. Is72. repealed
al Documentary stamp duties under sche-
dule (wh.ca did not include proprietary
articles and r7atches). except that Of TWO
cents on bank checks, drafts or orders
These changes reduced the revenue from
Stamps BY oue-half for the sum collected +
in ls72 was SIS - Al. ard IN is-3 only &