THE CONFLICT OF ADMINISTRATIONS 145 



If we turn to the national bank act, which has been referred to many 

 times as one of the most beneficent laws that the federal government 

 has put upon the statute books, it will be noted that it had its origin in 

 the necessities of the civil war, that it was developed as a revenue meas- 

 ure in the hope of forcing the banks of the day to buy the bonds of the 

 distressed government. The principles which were recognized by the 

 secretary of the treasury at the time as essential to the establishment of 

 a banking system were taken in part from the experiences of Massachu- 

 setts and New York. Out of these came the right of free banking, 

 the principle of the redemption fund, and the issue of paper money upon 

 a bonded security, as important parts of the national bank act. 



Passing in quick review the federal legislation relating to pure 

 foods, it will be found that not until 1906 was any legislation secured 

 which authorized the inspection and examination of foods by federal 

 officers and placing upon adulteration an adequate penalty. For 

 seventeen years the people of the nation had urged congress to pass a 

 bill that would meet the many abuses that had arisen in the adultera- 

 tion of food and dairy products. The same story can be told about the 

 tariff. Since the civil war the different tariffs that have been enacted 

 for the purpose of protecting manufacturers in the United States have 

 steadily increased, and the percentage of the burden laid in the form of 

 customs duty, regardless of the conflict of interests and the necessities 

 of the consumer, has steadily augmented, until under the provisions of 

 the McKinley bill it stood at a higher percentage than at any time in 

 the history of the nation. 



Nor is this all. The encroachments upon the financial strength of 

 the states, in the form of added taxes, have come with the growing 

 activity of the federal government, as might well have been expected. 

 In the year 1909 the federal corporation tax was laid upon all corpora- 

 tions engaged in interstate business in the United States. It has been 

 urged that a large revenue would be secured by this form of tax levy; 

 that it would give greater control over the many corporations of the 

 country, making it possible to reorganize their book-keeping and ac- 

 counting systems along the lines of the best principles of accountancy. 

 The law has now been in existence about two years, and it has been 

 shown clearly that it lays a heavy burden upon corporations in the impos- 

 sible demands of the accounting methods required, while the principle of 

 self-assessment, now unchecked by government examination, leaves it 

 practically with the corporations to determine what they shall pay. 

 But the worst side of the corporation tax is that the fiscal system of 

 those states that have developed such a plan of taxation is materially 

 affected. These states find that their own sources of revenue are cut 

 into, while the corporations subject to this fiscal control are provided 

 with an argument of double taxation against proper state taxes. This 

 phase of the corporation tax has been regarded by many economic 



