304 POPULAR SCIENCE MONTHLY. 



ance unnecessary.* And, pending its modification for the pur- 

 pose of reduction, a desire to evade the payment of taxes every- 

 where manifested itself, until it seemed at one time as if the 

 whole country and the Government itself were becoming cor- 

 rupted and demoralized. For example, the revenue receipts 

 from the income tax, without any change in the law, declined 

 from $72,982,000 in 1860 to $66,014,000 in 1867; and those from a 

 uniform tax on distilled spirits, from about $29,000,000 in 1867 to 

 a little in excess of $14,000,000 in 1868. 



It was under such circumstances that the Revenue Commis- 

 sion entered upon its prescribed duties. The work of investiga- 

 tion devolved mainly on its chairman, the second member being 

 debarred by age and feeble health from any active exertion ; while 

 the third assumed from the outset that the best and most feasible 

 way of meeting the financial difficulties of the situation was to 

 abandon the " whole system" (of existing taxation) "in the short- 

 est time consistent with the general interests of the country," and, 

 by an amendment to the Federal Constitution, authorize and re- 

 quire the Federal Government to levy " a duty, payable in lawful 

 money, of one per centum per annum " on the income of all inter- 

 est-bearing indebtedness issued by the United States and payable 

 in lawful money ; and " a duty, payable in specie, of seven tenths 

 of one per centum on the principal of all indebtedness of the United 

 States, which shall belong to any person or corporation, and the 

 interest on which may be payable in specie." He was also of the 

 opinion that such taxes on the income or principal of the indebted- 

 ness of the United States, should be " in addition to any ordinary 

 duty or tax equally imposed upon all incomes, or directly upon 

 all personal and real property within the United States subject to 

 taxation." 



A subsequent report to this effect was not received with any 

 marked disfavor by the general public, and had the indorsement of 

 not a few leading American bankers and capitalists. As the aver- 

 age annual rate of interest accruing on the market price of the 

 gold bonds issued by the United States from January, 1862, to Janu- 

 ary, 1866, was 8"82 per cent, and on investments in the debt of the 

 United States payable in lawful money, from 1863 to 1866, was 

 10'68 per cent, the proposition to levy a tax of one per cent on the 



* The imperative necessity of a speedy abatement of the internal revenne taxes after 

 the termination of the war finds striking illustration in the following examples of actual 

 experience. Thus the tax of six pcsr cent, levied and collected during the fiscal year 1864- 

 '65, on the value of the products of the woolen industry in Massachusetts alone ($48,430,- 

 6*71) was ecpiivalent to nearly twenty per cent on the whole capital ($14,735,671) in- 

 vested in this business ; while the tax on the value of boots and shoes manufactured in the 

 same State during the same year ($52,915,243) was equal to thirty per cent on the whole 

 capital employed ($10,067,474). 



