PRINCIPLES OF TAXATION. 151 



enactment of measures looking to an increase of revenue from 

 the increase of indirect taxes upon imports, and it was not until 

 four months after the actual outbreak of hostilities that a direct 

 tax of twenty million dollars was apportioned among the States, 

 and an income tax of three per cent on all incomes in excess of 

 eight hundred dollars was authorized, the first being made to take 

 effect practically eight and the second ten months after date of 

 enactment. Such laws, of course, became operative in the loyal 

 States only, and produced but comparatively little revenue ; and 

 although the sphere of taxation was soon extended, the aggregate 

 receipts from all sources by the Government for the third year 

 of the war from excise, income, stamps, and all other internal 

 and direct taxes was less than forty million dollars, and that too 

 at a time when the expenditures were in excess of sixty million 

 dollars per month, or at the rate of more than seven hundred 

 million dollars per annum. And as showing how novel was this 

 whole system of direct and internal taxation to the people, and 

 how completely the Government officials were lacking in all ex- 

 perience in respect to it, the following incident may be cited : 

 The Secretary of the Treasury in his report for 1863 stated that 

 with a view of determining his resources he had employed a very 

 competent person, with the aid of practical men, to estimate the 

 probable amount of revenue to be derived from each department 

 of internal taxation for the current year. The estimate arrived 

 at was eighty-five million dollars, but the actual receipts were 

 less than forty million $37,640,787. 



The people of the loyal States were, however, more determined 

 and earnest in respect to this matter of taxation and revenue than 

 were their rulers, and everywhere the one opinion expressed was, 

 that taxation in all its forms should immediately, and to the 

 largest extent, be made effective and imperative. And Congress, 

 spurred up by and rightfully relying on public sentiment to sus- 

 tain its action, at last resolutely took up the matter, and devised, 

 or rather drifted into, a system of internal taxation which for its 

 universality and peculiarities has no parallel in anything which 

 had theretofore been recorded in civil history, or is likely to be 

 thereafter. 



The great necessity of the situation was revenue, and to obtain 

 it speedily and in large amounts through taxation was the only 

 principle recognized (if it can be called a principle), and was akin 

 to that recommended to the traditionary Irishman on his first 

 visit to Donnybrook Fair : " Wherever you see a head, hit it ! " 

 "Wherever you find an article, a product, a trade, a profession, a 

 sale, or a source of income, tax it ! And so an edict went forth to 

 this effect, and the people cheerfully submitted. Incomes under 

 five thousand dollars were taxed five per cent, with an exemption 



