Year: 1868

wthout the intervention OF the Coinniissionei,


or on the President without the intervention


OF either the Secretary or the Commits


sioner, or somebody who would be a.a neld 10 ;.,


account Tor what Is done and for what Is omiIeu III


matter so vital the raising OF revenue honestly,


iairly and without fraud and robbery dnere ere was was


ser-he Presidents the Secretary OF the Treasury and


the Commissioner And another element OF DIVISION OF


by the senate of oiiicers OF the revenue. Between


the President the Secretary OF the treasury anc the


bility that nothing was DONE II the President the


Secretary and the Commissioner were all right, then


there was another body in the Senate, where fault


might exist or not acting on the recommendation


made through the proper channels He did not say


it was so but he said that from the divided RESPONSE


bilty and want of accord between them there were


no proper officers to collect the revenue, and there


fore stealing went on: These facts tended to illus
lishmen without responsible head and that the
law would never be executed or the taxes
collected until the system was reduced to a cOncen


trated responsibility. The committee had settled
down on the conclusion that the true way to get the
officer strongly empowered and armed for the pur
pose, and to hold him to the strictest account for
| everything he shall do under such circumstances
that all public observations and all watchfulness OF
the law may be concentrated upon him. He admitted
that great power was conferred by the bill exc
cutive ofcer, not much greater however than is
exercised by the Collector of Customs at New York.
1t was great power to be conferred any officer,
and yet would be found that in the different pro-
visions of the bill the committee had taken great
care to hold the Commissioner to the closest account
ability. Mr. Schenck proceeded to show what the
effect Of the bill would have the cost OF collection
and stated that the bi proposed to abolish the sys-
TEN of tobacco and whiskey inspectors, paid by the
distiliers and manufacturers and have their duty
performed by storekeepers to be paid by the govern
ment The saving in the aggregate cost OF collection he
estimated at $6S9,970. The committee had matured
a system OF supervision. Instead OF special agents


the committee proposed that in every judicial district
there should be supervisor OF internal revenue
But instead OF being a. wandering officer he should
be a responsible man, properly paid by the govern.
be to supervise, look after, attend to and report
upon the conduct Of all local revenue officers within
the district. Even he, however, would have to refer
the case for final action to the Commissioner of In
ternal Revenues; and thus the system of RESPONSE
bility, from the head of the department downwards
was to be maintained. AS to manufactures he said
that the policy Of the committee accorded with the
general policy indicated by Congress in the passage
OF the act OF 3lst OF March last and with
the fourth resolution in the Chicago platform.
That act, however, exempted breadstlfls and
unmanufactured lumber, but he gave his friends
from the Northwest notice that this bill omitted that
exemption. All manufactures were to be treated
not with reference to the particular things produced
but with reference to the capital which they employ
what they do with it and how much they succeed in
producing and disposng Of The committee had
made the tax sales TO the great body OF manu-
facturers oneth OF one per cent. AS to the eXemp-
tons that were to be made in manufactures, that
would be matter, he said, to discuss hereafter.
Following out an idea contained in a resolution re-
ported by the Committee OF Ways and Means in jan
uary last, the committee had exempted from the
general tax the one-lth OF one per cent on manuac-
lures OF certain luXureS-as, for instance the
manufacture OF fine confectionery. Those were
charged one sixteenth OF one per cent all
over $5, 0O0 Ornamental Jewelry the committee had
charged one per cent on all over $4,000 and gold
ana silver wares, firearms and pianos the comm-
te had charged One-half OF one per cent? billiard
tables and playing cards the committee had charged
one per cent. On the amount manufactured the idea
OF the committee that while they adopted the
general system OF placing a tax on sales manu-
factures very low certain articles used only by those
who wealthy ought to bear heavier tax, and on
those articles the committee lad place more than
Oh the ordinary manufactures OF the country In
gard TO special tax, the special tax hotels was
graduated so that large hotels like the As,or House,
the Fifth Avenue and Wizards, should be
taxed much larger IL proportion than small hotels.
In regard to foreign brokers' he said, there Is class
OF gentlemen VINO come from Europe and who axe
at the Astor House. Metropolitan OF some
other hotel IN New York or Philadelphia who have
no Office where they can be taxed, but who with
samples, negotiate for the sale OF millions OF prop
erty These men have never paid any tax upon their
sales and we have, therefore, provided measure
OF protection TO the regular dealers Of the country
that while commercial broker, known as such and
responsible as su6l, pays his s22 special tax.
these foreign commercial brokers who keep no oilce
or place OF business and who escape payment on
their sales shall pay their special tax $1,000 and


shall be put in the penitentary II they found ex


erclslng their vocation without paying the tax. 1
have provided that retailers shall be class.
Their business SIS, $50 $780, S2oo, $1,000 severaly
for their licenses; and we have defined retail dealer
to be not one who sells certain amount OF liquor
but who sells liquor in quantities less than one
quart and who sells to be drunk the premises
Wholesale liquor dealers pay at this time One-tenth
OF one per cent on all sales above $4,000. We pro-
pose that wholesale liquor dealers shall pay two and
hai per cent, twenty-five times as much and shall
pay on all sales over $1,000 instead OF s5O,OO0 |


have made an estimate that from this source we can


obtain about twentyfour millions OF dollars judging
from the statistics OF the trade. come then to the
special TAX imposed on the distiller himself. We


have naHs,oia made M It. sloo and 81 on each barrel
| of taxation of sales We have also aided
| To that tax tax upon capacity. We provide mat


there shall he So day paid on the capacity OF each
distillery that mashes and ferments one hundred


bushels or less, and an additional So day for each
additional hundred bushels mashed and fermented.


af x-fa art nf Tho


merry IN reference to the to he derived from


distilled spirits; and although 1t Is found under diff


be all in some degree connected together. We have
| retained the tax OF 81 a gallon as direct tax


Whsaey out take occasion TO say here now tnat IL


Is not the expecat on believe OF the committee


tlat that amount OF direct tax wil be retained


let it be known four months ago that whiskey


was TO be taxed only 81 or seventy-fve cents


dollars OF revenue. do not know whether Congress
| VIII agree TO the reduction for one have come


very reluctantly TO the conclusion that it should be
| DONE From the very beginning was inclined as


General Grant was, ''to fight 1t out on that line,


but lave come TO the conclusion that keeping this


tax ut two dollars gallon will eventuae In coniinu-
| ing The rule OF the "whiskey rng'' In this country


aud that the tax, therefore, had better be reduced
We must not be controlled, we must not be governed
| by the whiskey men, who are at this very moment
swarming In the city, especially anxious TO know
whether the tax s going to be kept such rate as
that they can continue their operations step by step
Therefore by degrees i have brought myself TO
come to the conclusion that the direct tax on dis
titled spirits ought to be put down to something
like seventy-1ve cents gallon; and the why
would be disposed to agree to seventy five Is
that from the examination OF many taxes. and the
investigation OF the whole subject, / believe that
seventydve cents is about the standard at which
tax can be collected and which will make 1t mpos-
sible for Illicit dstillaon to be carried with profit
Illicit dsieries cannot carry on their business In
concealed places in cellars and garrets In Chicago
and Philade phia, the two great points at which
most OF the enormous rascality Is carried on with
any advantage at all. II we can beat them In the
market-snd yet was un willing to come down 10
such low standard OF direct taxation without
having put into this bill much by which we can
collect very considerable additional tax
Iom other sourccs)-and thus, by dividing the points
Where all temptation Is felt, put IL footing that
morning could be made to any very great extent in
ueiraIdifH the government any particular point.
FROM number OF calculations that I have made
can come TO no conclusion but that we shall get at
least seventy millions out OF whskey In the coming
year instead of thirteen millions to which we are