of the West or South, or any other portion of the country, do you think it will bear very severely on any one? It will be a tax cheerfully and heartily paid.

Mr. SIMMONS. I dislike to interrupt the Senator, but if he is going to reply to my speech, I wish he would read it first, because I never said any such thing. I said nothing about a tax of seven mills on three yards of cotton cloth. I said the tax was half a cent a yard. If you can get a shirt out of three yards, you are narrower than I am. [Laughter.] I always have three yards

and a half.

Mr. SHERMAN. But the honorable Senator must remember that he made his calculation upon the present price of cotton, and not on the ordinary price. I based mine on the ordinary price of cotton, and I challenge the honorable Senator to impair my arithmetic. If a yard of cotton cloth costs eight cents, a tax of three per cent. is two and four tenths mills. Is not that it?

Mr. SIMMONS. I cannot cipher for you. You have got further than me.

Mr. SHERMAN. 1 think that is a sum that even my friend can cipher out. Three per cent. on eight cents is certainly two and four tenths mills, and on three yards and a half, even enough for my honorable friend, what is the tax? What is the tax on a poor man's shirt, for whom he had so much sympathy? Why, Mr. President, this tax on manufactures, of all others, is the easiest, the lightest, the best diffused, that which will be collected and paid most readily and promptly and cheerfully. It is a tax which, according to the Senator's own statement, will be partly paid by the manufacturer and partly by the consumer.

Mr. SIMMONS. I made that statement in reference to goods imported, and the Senator, I believe, is now talking about goods manufactured here.

Mr. SHERMAN. Yes.

Mr. SIMMONS. I said you intended to have the consumer pay the whole of it; that was your argument.

Mr. SHERMAN. I say the natural effect is that he will have to pay the whole of it; but I understood the Senator to insist that the manufacturer paid a part. He certainly said that the manufacturer in Manchester paid a part of our duty on the goods he sent to this country.

Mr. SIMMONS. Certainly, I did. Mr. SHERMAN. Now, what is the difference in principle between the manufacturer in New England sending goods here for consumption, and the manufacturer of goods in Massachusetts sending them to Ohio for consumption? The same principles apply. The truth is, the consumer pays the great body of all duties, whether they be levied on imports or exports, or be put in the form of excises, or in any other form. The manufacturer will no doubt pay the tax in the first instance; but he will collect it, so far as the market will allow him to collect it, from the consumer. But suppose it is divided, this is a small tax easily collected, and now would you, in order to evade this tax, select a single article of industry which is made out of an agricultural product, and put the whole duty upon that? I think it would be unjust.

Sir, let us distribute this tax as evenly as we can on all branches of industry, and put as little as we can on all the great branches of industry; and if it shall appear by the operation of this tax system that any interest is injuriously affected, we can easily modify it by subsequent legislation. The only character of tax in this bill that I desire to strike out is the very tax which the honorable Senator leaves in; and I refer to it to show how far we disagree. I am in favor of striking out all the taxes on licenses; he is for leaving them in. The license is the last tax that ought to be levied; and why? It levies the same duty on the little dealer for all amounts over $1,000-I believe that is the limit fixed by the bill-as upon the dealer who sells $100,000 worth of goods. That is not a just mode of taxation. It taxes the poor lawyer who is just starting in life, struggling to make his way in the world; and most of those I address have been in that predicament precisely

Mr. FOSTER. Some of us are yet. Mr. SHERMAN. It taxes the poor lawyer, who loves the first fee he receives with a devotion he never has for a larger one afterwards, the same amount for a license that it does a gentleman of

established reputation, whose income is $25,000. That is an unjust tax; and if you strike out any class of taxation in this bill, I would strike out the license taxes; and yet my honorable friend from Rhode Island leaves them in, though they are confessedly unequal, in order to strike out the tax on manufactures.

There is another reason, Mr. President, and I may as well mention it now. In all tax systems it is important to seize those articles that can be most easily reached, where you can collect your tax in the largest amounts, in the greatest sums. That is one argument in favor of a tax on whisky and tobacco. By going to a manufacturer of whisky or tobacco you find the article in large quantities, and you can levy a large amount. That is a reason for taxing insurance. You can go to an insurace company and make the company the agent of the Government to collect a tax from the insured. So it is with the manufacturer. One reason why I am in favor of this tax on manufactures is that you can make a large manufacturing establishment, where the production is very large, pay you a large amount, and they will take care to collect that tax from their customers. I say, therefore, that the tax on manufacturers ought to be retained, and especially it ought not to be stricken out at the sacrifice of an interest already taxed ten times over any other tax in this bill.

Mr. SIMMONS. I do not intend to reply to that part of the Senator's argument which refers to the manufacturing business. I take one thing at a time. I believe that is rather the best way. Here is a proposition to tax whisky. The Senator from Ohio says that it is a proposition to levy a tax on the raisers of corn, and that it will absolutely stop all receipts for six months. He says that if we levy a tax of twenty-five cents a gallon on whisky for the next six months, we shall stop. all the production of whisky. I heard him say the other day that he did not think twenty cents, or even thirty cents tax would lessen the consumption of whisky. He so stated in the Senate, and he is so reported. If the tax will not lessen the consumption, why should it lessen the manufacture?

Mr. SHERMAN. I said that if it was levied slowly and gradually it would not interfere with consumption.

Mr. SIMMONS. The Senator said it will not lesson it anyhow. That was his deliberate judgment. He expressed it so the other day. What does he say now? He says this morning that if you levy this tax on whisky, you will not get any revenue for the next six months, because it will stop the distilling; and in the next breath he said they could not stop, for their hogs and their cattle were all on hand and must be fed. Is that logic?

Mr. SHERMAN. Mr. President

them in, or did I suggest one of them? Did I not vote with the Senator from Ohio when he made the suggestion about relieving young lawyers? As I was the only man on the committee who had a right to vote on it, did I not vote for relieving them? All the rest of the committee were interested, and I proposed to take that vote on my own shoulders.

Mr. DAVIS. How interested?

Mr. SIMMONS. They have the license to pay. Mr. HOWE. Oh, we were not lawyers. [Laughter.]

Mr.SIMMONS. I supposed you were. I did not inquire about your profession; I knew you were very pleasant, clever people. I say this license section was put in by the House of Representatives, and I have made it a rule invariably, where there was nothing very bad about it, to take everything they did and see if I could not amend it a little and improve it. I was going with my friend, the chairman, on that matter. I thought it was due to the House of Representatives, after the work they had done on this subject, wherever there was not a palpable error in it, and where we could not materially improve it, to adopt their plan, and the licenses being in their bill, I did not propose to strike them out. I never proposed to put in a license on anything, and yet the Senator says I am for putting the licenses in. I do not believe he voted against one of them in committee. I did not hear any proposition to strike them out except a suggestion in regard to the lawyers, and it was said the provision in the House bill would operate hard on the younger members of the bar, and I wanted to get rid of that, particularly as it was rather a reflection on them the way it was drawn.

The Senator spoke of my calculation in regard to the income tax. That has not much to do with the whisky tax; but still it is brought in because he thought he could make a great point of it. He says you cannot collect from ten thousand people of Ohio $5,000,000 of income tax, because they are taxed now only $9,000,000. In Rhode Island we have not hitherto put on more than $100,000 for our whole taxes, school taxes and all, and yet I expect to see the people of Rhode Island pay more than $600,000 under this bill, six times as much as they have hitherto paid for all their other taxes; and I do not believe any of them who have a large income will break because they have to pay three or five per cent. of it to the Government. I never knew a man to break unless you took more than all he had. I wish I had an income of $100,000; I should be willing to pay seven and a half per cent. on it, and I do not believe I should stagger much under it, except perhaps under what there was left. That might overbear me. [Laughter.] It is very easy for Senators, if they choose, to question anybody's estimates of what will be the result of any bill, to say how extravagant it

Mr. SHERMAN. I said this: that you were taking a time to levy this onerous tax when these distillers must feed their hogs on hand; that they had their stock on hand, and must keep it going; and I have no doubt they would feed them even if they did not make a gallon of whisky; but they could not carry on their operations to anything like the same extent; they would not manufacture one tenth of what they otherwise would if there was no such duty levied.

Mr. SIMMONS. I expected the Senator would get away; he is very ingenious, I know; but still he says they are going to make whisky in order to feed the stock. Well, if they make it, they must pay the tax; and he said before there will be as much consumed as ever. I do not know why there will not be as much profit as there ever was. The fact is, this proposition is so plain that no argument can be made against it. The Senator talks as if all this tax was to be paid in Ohio; and he says my proposition will enlarge the profits of the retailers, because they have a good deal on hand. Now, who pays the profit to the retailers? Is it not the consumers; and will he undertake to pretend to say that there is not as much whisky drank in the manufacturing districts as in the agricultural? Everybody knows that three fourths of it is sold in cities and villages.

The Senator says I go for the keeping of these licenses in, and he says they are the worst kind of tax because they tax the small people. Did I put

be received. Now, if I have overrated the income tax, I put it to the Senator from Ohio if there is not more reason to raise something more out of the whisky tax. We want the money; and if I have overrated one item, it is certain we ought to put it somewhere else. We must have a certain amount. It is a curious way of arguing to say that in some items there is an over-estimate, and therefore you must reduce the duty on one in order to fill the Treasury! I do not reason in that way. I have varied the proposition in order to conform to what I supposed was the wish of the Senator from Ohio, to make two stages of this rise instead of one; but I would not consent to rising every six months, or every year. It is the worst feature in any tax bill to keep changing it every six months. The people never know what they are going to work for. You want to get a system that you think is reasonable, and then adhere to it while you are obliged to impose this indirect tax. Just so with duties upon foreign imports; when you get your system well adjusted, adhere to it.

My own idea is that we had better adopt the income tax as I have proposed, and a tax on five or six articles. I think it will raise money enough. I may be mistaken; I do not pretend to be infallible; but then we shall have a system to put into operation that can be done in the next six months, and this income tax, which will be a very considerable item, will be assessed and collected before Congress meets again on the 1st of December; and

if there is any modification wanted, if it does not meet the expectations of Congress, they can increase it or put more on something else if they choose; but if you undertake to put a tax on seven hundred and fifty articles, as the bill does, it will take a whole regiment of officers in each State to assess them, and you will not do any of them well. My deliberate judgment is that it is best for us to select a few of the prominent articles, the most reliable for revenue, and get the machinery to work with them and sec what the result is. We shall be here in six months; we shall then have time to reflect on the measure; we shall see its workings, and we can add to it with some degree of experience in what we have gone through with already; but if we start out on this immense field at once and it fails, we shall hardly know where to trace the failure. If you take a little time, I verily believe that we can devise a system much better adapted to the wants of the country than this bill is, and when we come to that I shall propose an amendment that will yield us something in lieu of the tax on slaves that the Senate rejected yesterday, and I believe it will meet the approbation of the body. I think that in the mode I have suggested we can raise $158,000,000; and that, with $100,000,000 from imports, will give us enough to carry on the Government, pay interest on the public debt, and put away a sinking fund of $50,000,000 annually.

Mr. HARRIS. Mr. President, I do not know how to vote on this proposition. I feel a good deal of difficulty in relation to what is the course I ought to take in reference to the questions that arise here, and I will suggest some of these difficulties honestly, that those who know more about the subject than I profess to know, may, if they can, remove them.

I assume that we must raise money enough to carry on successfully the affairs of the Government. We shall all be agreed upon that. There is no man who is loyal and patriotic, who will not be willing to vote money enough and to raise money enough by taxation to accomplish this object. Since this bill came up for consideration, feeling my own incompetency to judge in reference to these questions, I have set about anxiously and industriously to inform myself as well as I could in reference to these questions. I have learned a few leading facts, and if I am in error I wish Senators who know more about the subject than I do

to correct me.

I have learned that the supposed revenue of our Government from the tariff will be from sixty to eighty millions of dollars. The Senator from Rhode Island yesterday stated it at $80,000,000. Whether it be sixty or eighty, it will be enough, if I am correctly informed, to pay the ordinary civil expenses of the Government. I understand from the Secretary of the Treasury himself, for I have resorted to all the sources of information which were within my reach, that the civil expenses of the Government for this year will be less than sixty millions.

Now, sir, in my own judgment-and I want to be corrected if I am wrong-we may safely set down the revenue from the tariff against the ordinary expenses of the Government. I believe the one will balance the other, and we need not raise money by a tax for the purpose of paying the ordinary expenses of the Government. Then what is there left? There is the war debt, the debt of the country, and what is that? We have heard all winter long about our expending two or three millions a day. I did not believe it then. I have never believed it. I have regarded these statements as the statements of alarmists; and it turns out now, I am informed from an authority upon which I rely-and here, again, I want to be corrected if I am wrong-the Secretary of the Treasury tells me that, on the 1st day of July next, the debt of the country will not vary five millions from his former estimate, which was $517,000,000. Call it $520,000,000; that is the utmost that it will be. It was said here yesterday, in answer to some remark made by the Senator from Rhode Island, that there was a large debt due to the Army. I have this morning taken the pains to inform myself about that, and learn from the proper source that the Army is paid up to the 1st of the present month. The appropriation has been made recently, Senators are aware, for the purpose.

Mr. POWELL. The Senator will allow me to interrupt him. He asserts that the Army has been

paid up to the 1st of the present month. Does he mean the entire Army?

Mr. HARRIS. Our Army was paid up, or, though the soldiers may not have received it, the money has been paid out by the Treasury, and is in the hands of the proper officers, so that it is included in the estimate.

Mr. POWELL, It is impossible that the Army can have been paid up to the present month.

Mr. HARRIS. I learn this of the Paymaster General. I inquired of the Secretary of the Treasury in the first instance, and he told me to go to the Paymaster General, who would give me the information. I went to him, and he told me that where it had been impossible to pay the soldiers the money was in the hands of the paymasters, and, of course, had gone out of the Treasury for that purpose, so that we may assume that it is now paid; and if the soldiers have not actually received it the money is in the hands of the paymasters for them. Our debt, then, I assume will be $520,000,000 on the 1st of July.

Mr. FESSENDEN. Now, let me set the Senator right.

Mr. HARRIS. I want to be right. I want to get at what is the fact in this matter.

Mr. FESSENDEN. I do not wish to make a speech now, if at all, but I can give the Senator a few plain figures that will perhaps set him right in regard to this matter.

At the extra session of Congress, in July, and at this session of Congress, we have already appropriated for this year $535,000,000 and over. At the second session of the last Congress we made the ordinary appropriations for the year. I have not added them up, but they cannot be less than $65,000,000, I suppose. These items will make $600,000,000. What we appropriated in March, 1861, and in July last, and at this session of Congress for the expenses of this year, will amount to $600,000,000. Our old debt is not less than $70,000,000; I do not know the exact amount. That is $670,000,000, and the Senator can judge for himself whether, taking into consideration the odds and ends, unsettled claims, deficiencies, &c., which will be likely to come in upon us, we shall fall short of $700,000,000. Deduct $50,000,000 for receipts from all sources except loans, and the amount of absolute indebtedness cannot well be less than $650,000,000 at the close of the year. I hope it will not exceed that amount.

Mr. SIMMONS. If the Senator from New York will allow me, I will state that I know our appropriations have been very large, and we have appropriated, according to an enumeration made by the Senator from Maine, vast amounts for the ordnance department, for the purchase and manufacture of arms. I think we voted twenty or thirty millions for that alone this year, and not a dollar of it has been spent yet, and probably will not be until after the 1st of July. Although we have appropriated that money, it has not gone out of the Treasury, and will not go out this year.

Mr. FESSENDEN. Still it will go on to this year's debt. It does not make any difference whether it is spent to-day or next month or the month after, it will still be part of the debt of this year, and that the money will be used is proved by the fact that notwithstanding these appropriations for ordnance this year, we are called upon to make large appropriations for ordnance for the next year in addition. Though that money has not really gone out of the Treasury as yet, it is appropriated on estimates of what is needed for the service of this year, and will be used.

Mr. HARRIS. I am accomplishing my object. I want to open this subject, so that it shall be discussed. I want to see what our duty is in this matter; and I, for one, want to do my duty, and I believe every Senator here, as well as myself, wants to do his duty. I learn that this debt amounts, as I have said, to a little over five hundred millions of dollars. About these appropriations I know nothing; but it is said they have been made. I learn another fact; I learn that the average interest on that debt of $500,000,000 is less than five per cent, about four and a half per cent.; but call it five per cent.: five per cent. on $500,000,000 would be $25,000,000. I assume for myself, for my own Government, that the war is to go on, and that we are to spend at the rate of $1,000,000 a day, and looking at the past, and at these figures, upon which I must rely, I suppose that is a large estimate.

Mr. FESSENDEN. Allow me to ask the Senator where he gets his information that the average rate of interest is five per cent.

Mr. HARRIS. The Secretary of the Treas ury told me this week it was a little over four and a half per cent.

Mr. FESSENDEN. And how is that made out? I can tell you in an instant. The debt is not all yet a funded debt. No part of the debt which is funded bears less than six per cent. interest, except the $50,000,000 deposited in the sub-Treasury at New York, under a bill we have passed this session. Six per cent. is the lowest rate of interest we pay; and on some portions of the debt the interest is seven and three tenths per

cent.

Mr. SHERMAN. There are demand notes without interest.

Mr. HARRIS. Of course, they are to be taken into the account.

Mr. FESSENDEN. Exactly.

Mr. HARRIS. The Senator from Maine will not dispute the proposition I made.

Mr. FESSENDEN. I want to tell you how it is made out.

Mr. HARRIS. No matter if you do not have to pay more interest.

Mr. FESSENDEN. But I want the thing set right. There is no profit in having any humbug about it. We have got to meet things fairly in the face, and tell the people just how they stand. That is my way, and it is the proper way. I, of course, have heard these stories about the debt for the current year going up to a thousand or twelve hundred millions; but that is all nonsense: there is no foundation in any such statement. If you take the interest on that which is absolutely funded, it is not and cannot be less than six per cent.: but taking the whole debt together, that which is and that which is not funded and that which is outstanding, and averaging the rate, it will be brought down below six per cent., of course; but it has all to be funded at some time, or else we have got to stop.

Mr. HARRIS. I assume, Mr. President, that our expenditures are to go on under the appropriations that have been made, or will have to be made, to the amount of $1,000,000 a day. In other words, in order to satisfy my own judgment as to what ought to be done in this great emergency, I assume that our debt will accumulate to the amount of $1,000,000,000. That sum will satisfy, I apprehend, the largest expectations of the Senator from Maine. Call the debt $1,000,000,000; that is enough, I know.

Mr. FESSENDEN. When?

Mr. HARRIS. At the end of next year. What then? As the thing is going on now the interest, at five per cent. on that debt, of $1,000,000,000, will be $50,000,000. I am not making close calculations, but I am endeavoring to satisfy my own judgment as to what ought to be done in this great emergency.

Mr. SHERMAN. My friend from New York forgets that all the future indebtedness will have to be on interest, unless you propose to increase the amount of demand notes.

Mr. HARRIS. Very well, take it in that way. The interest on the present $500,000,000, I assume, notwithstanding what has been said, is less than five per cent. I must take that, because the Secretary of the Treasury gives it to me as the fact. Then we have, say $25,000,000 of interest to pay on that. Suppose we have to borrow $500,000,000 more, when it comes to be funded, at six per cent.: what would that make? Thirty millions more, or $55,000,000 altogether for in

terest.

Now, I cannot, in any way that I have been able to view the subject, make it out that we need for the purposes of the Government more than fifty or sixty millions of revenue, for I assume that it is not the design of anybody-certau v f is, I do not agree with it-that we should unde take now to do more than to pay the current oike penses of the Government, to pay the interest on our debt, and create a very moderate sinking fund. No man, I apprehend, will be so unwise, so mid, may say, as to undertake to pay by a tax like this any part of the principal of the debt created by this war. I am not for it, at any rate.

I

Sir, the people that I represent demand a tax bill; I go with all my heart for a tax bill; border that people be satisfied that they are taxed under

Mr. SHERMAN. On that I shall call for the yeas and nays. I do not see the chairman of the Committee on Finance in his seat.

Mr. HARLAN. Mr. PresidentMr. WILSON, of Massachusetts. I want to have an executive session for a short time. Mr. TRUMBULL. I will withdraw the motion for that purpose.

Mr. DOOLITTLE. If the honorable Senator from Massachusetts will allow me, I desire to call the attention of the Senate to a bill which passed-

The VICE PRESIDENT. The Senator from Iowa was recognized by the Chair.

Mr. HARLAN. There is a bill here from the House of Representatives proposing an extension of time for the construction of a railroad in the State of Missouri that should be acted on immediately. There will be no opposition to it, and I ask the unanimous consent of the Senate to consider it now.

Mr. FESSENDEN. How long will it take? Mr. HARLAN. About two minutes.

The VICE PRESIDENT. If there be no objection, the bill before the Senate will be laid aside informally for that purpose. The Chair hears no objection.

RAILROADS IN MISSOURI.

The Senate, as in Committee of the Whole, proceeded to consider the bill (H. R. No. 281) supplemental to" an act granting the right of way to the State of Missouri, and a portion of the public lands, to aid in the construction of certain railroads in said State." It extends the time granted under the act to which it is supplemental for the completion of the road therein described, from the city of St. Louis to such point on the western boundary of the State as may be designated by the authorities of the State, as well as the reversion to the United States of the lands thereby granted to the State of Missouri for the use of the road, for ten years from the 10th day of June, 1862; but in case the company fail to complete the road within the time as thus extended, the land is then to revert to the United States.

Mr. HARLAN. The Committee on Public Lands have informally authorized me to propose a verbal amendment to the body of the bill, and also to the title, to make it accurate. I propose, in the fifth line, before the word "reversion," to insert the words "time of."

The amendment was agreed to.

The bill was reported to the Senate as amended, and the amendment was concurred in, and ordered to be engrossed, and read a third time. It was read the third time, and passed.

On motion of Mr. HARLAN, the title was amended, so as to read, "A bill supplemental to an act granting the right of way to the State of Missouri, and a portion of the public lands, to aid in the construction of certain railroads in said State, approved June 10, 1852."

. THE TAX BILL.

The Senate, as in Committee of the Whole, resumed the consideration of the bill (H. R. No. 312) to provide internal revenue to support the Government and pay interest on the public debt. The VICE PRESIDENT. The question before the Senate is on agreeing to the amendment submitted by the Senator from Rhode Island.

Mr. TRUMBULL. The Senator from California gave way to me to make a motion to adjourn, and I gave way to the Senator from Massachusetts for an executive session.

Mr. SHERMAN. Has the Senator from California got through?

Mr. McDOUGALL. Oh, no.

The VICE PRESIDENT. The Senator from Illinois withdrew his motion to adjourn.

Mr. TRUMBULL. Then I make the motion

now.

Mr. FESSENDEN. On that motion I ask for the yeas and nays.

Mr. McDOUGALL. I did not yield the floor. Mr. TRUMBULL. I understood the Senator to give way,

Mr. CLARK. The Senator said he would give way to the Senator from Ohio to talk about corn.

Mr. MCDOUGALL. Well, I do not care about it. I thought I was a little crowded, and perhaps I yielded.

The VICE PRESIDENT. The Senator from Illinois moves to adjourn, and on that motion the yeas and nays are requested.

The yeas and nays were ordered; and being taken, resulted-yeas 8, nays 28; as follows: YEAS-Messrs. Browning, Harris, King, Saulsbury, Sumner, Trumbull, Wade, and Wilmot-8.

NAYS-Messrs. Anthony, Chandler, Clark, Cowan, Davis, Dixon, Doolittle, Fessenden, Foot, Foster, Grimes, Hale, Harlan, Howard, Howe, Lane of Indiana, Lane of Kansas, Latliam, McDougall, Morrill, Nesmith, Powell, Sherman, Simmons, Ten Eyck, Willey, Wilson of Massachusetts, and Wright--28.

So the Senate refused to adjourn.

The VICE PRESIDENT. The question is on agreeing to the amendment proposed by the Senator from Rhode Island.

Mr. SUMNER. I ask for the yeas and nays on that amendment.

The yeas and nays were ordered.

Mr. ANTHONY. Senators do not understand what the amendment is. I hope it will be read. Mr. SHERMAN. I should like to have it read. The Secretary read the amendment; in line six of section forty-two, page 44, to strike out the words "the duty of twenty cents," and to insert "a duty of twenty-five cents until the 1st of January, 1863, and thereafter a duty of thirty-five cents per gallon."

The question being taken by yeas and nays, resulted-yeas 15, nays 21; as follows:

YEAS-Messrs. Anthony, Chandler, Dixon, Foot, Grimes, Harlan, Harris, Howard, Howe, Lane of Kansas, McDougall, Simmons, Sumner, Wilmot, and Wilson of Massachusetts-15.

NAYS-Messrs. Browning, Clark, Cowan, Davis, Doolittle, Fessenden, Foster, Hale, King, Lane of Indiana, Latham, Morrill, Nesmith, Powell, Saulsbury, Sherman, Ten Eyck, Trumbull, Wade, Willey, and Wright-21.

So the amendment was rejected.

Mr. BROWNING. I propose to amend the bill by inserting at the end of the forty-fourth section, in brackets, page 48, the following as a new

section:

And be it further enacted, That the collector of any district may grant a permit to the owner or owners of any distillery within his district to send or ship any spirits, the product of said distillery, to any place without said district and within the United States; and in such case the bill of lading or receipt (which shall be in such form as the Commissioner of Internal Revenue may direct) of the same shall be taken in the name of the collector of the district in which the distillery is situate, and the spirits aforesaid shall be consigned, in such bill of lading or receipt, to the collector of the district in which the place is situate whither the spirits is sent or shipped; and upon the arrival of the spirits, and upon the demand of the collector aforesaid, the agent of the distillery (and the name of the agent, for the convenience of the collector, shall always appear in the bill of lading or receipt) shall pay the duties upon the said spirits, with the expense of freight, and every other expense which has accrued thereupon; the number of gallons and the proof

of the spirits aforesaid to be determined, upon the arrival thereof, by an inspector appointed or approved by the collector, and at the charge and expense of the owner or agent; and the said collector, upon the payment of the duties aforesaid shall deliver the bill of lading or receipt and the spirits to the agent of the said distillery; and if the duties are not paid as aforesaid, then the said spirits shall be stored at the risk of the owner or agent thereof, who shall pay an addition of ten per cent. thereupon; and all the general provisions of this act, in reference to liens, penalties, and forfeitures, as also in reference to the collection, shall apply thereto, and be enforced by the collector of the district in which the spirits may be: Provided, That no permit shall be granted under this section for a quantity less than fifty barrels: And provided further, That the Commissioner of Internal Revenue, under the direction of the Secretary of the Treasury, may make such further regulations as he may deem proper in order to protect the revenue, and to carry out the spirit and intent of this section.

Mr. FESSENDEN. That matter has been under consideration by the Committee on Finance, and we have adopted a different system. This applies to spirituous liquors. There are other matters to which it should apply also. I do not see why it should not apply to ale, beer, and other articles of that description; and particularly to the refined petroleum, which comes under the same regulation. I have drawn an amendment to that effect, and also to meet certain other difficulties in the bill with regard to exportation. If the Senator will withdraw this amendment for the present and let others be considered, I will offer it in the proper place, and if he does not like it, he can move this as a substitute.

Mr. BROWNING. I have no objection, certainly, to take any course that will be for the convenience of the chairman of the committee, and which, it may be supposed, will tend to facilitate the business of the Senate. The amendment is one deemed very important by that class of manufacturers in the West. They are anxious to have it presented and considered by the Senate. Its provisions seem to me to be eminently just and proper, and not being fully apprised of what is now stated by the chairman of the Committee on Finance, I thought it advisable to offer it at this time. I will,

however, upon his suggestion, withdraw it for the time being, if it be an accommodation and convenience to him, reserving to myself the right to renew the proposition if necessary.

Mr. HOWE. I do not object at all to that arrangement. I have examined the amendment proposed by the Senator from Illinois with a little care, and I suppose I understand the amendment which is proposed by the chairman of the Committee on Finance. I am very much of the opinion that the amendment offered by the Senator from Illinois is very proper and very necessary, and will be, even if the amendment offered by the chairman of the Committee on Finance should be adopted. It is true, if the amendment offered by the Senator from Illinois should be adopted, it will require some modification of the amendment, as I understand it, which is to be proposed by the chairman of the committee.

Mr. FESSENDEN. We do not want both systems. The system that we agreed upon, or which I supposed we agreed upon, is a system of giving bond for payment of duties, and you will not want both.

Mr. HOWE. I shall want this very much in reference to this particular subject, independent

of that.

Mr. FESSENDEN. Then, if the Senate adopt this, the other will be unnecessary; that is all.

Mr. HOWE. It would be necessary in reference to the other subjects, but not in reference to this.

Mr. FESSENDEN. I do not suppose it is necessary to apply one regulation to one matter and another to another.

ture.

Mr. HOWE. The principle of this might, perhaps, be extended so as to cover all subjects; but this is a business by itself, and it differs very essentially in many respects from the manufacture of petroleum oil, or from any other manufacUnless an amendment like this suggested by the Senator from Illinois is adopted, you impose a burden upon this particular manufacture which it was not the intention of the committee and not the intention of the Senate to impose. I should be sorry to have this amendment either permanently withdrawn or to have it rejected.

Mr. FESSENDEN. I really do not know where to find myself. This amendment is, I believe, substantially the one that was drawn by the Senator from Wisconsin himself originally. It is substantially the same. In the committee I thought from what passed that he agreed to waive that and to adopt the other system. I offered him distinctly to take either, and I did not know but that his was the best. It may be the best. I only want to know where I am. I do not want to be exposed to offering from the committee a particular plan which I supposed to be agreed upon, and then have it opposed by members of the committee. I should have been willing to consider and examine this one if the Senator had insisted upon it, but I understood him to waive it distinctly and to prefer the other mode.

Mr. HOWE. The chairman of the Committee on Finance is mistaken in supposing that this is substantially the plan which was drawn by myself. It was drawn without any consultation with me. That is not exactly correct, for I have reason to believe that the gentleman who drew this amendment had conversed with me; but it varies very materially and widely from the proposition which I intended, and I think did, suggest to the Committee on Finance. I cannot say that some ideas in this amendment were not suggested by a conversation with myself; but it is not my proposition, and it is one that I had no authority, no power to waive, whatever. I did, as the chairman has said, withdraw my own proposition, an amendment which I had drawn myself at considerable length and with considerable care, out of deference to the opinions of the chairman of the committee; but this distinctive amendment I certainly did not withdraw, because at the time I did not know it was in existence. It has been prepared and submitted

The VICE PRESIDENT. The Chair will suggest that there is no amendment pending before the Senate.

Mr. HOWE. If it is withdrawn, of course I have nothing to say.

Mr. BROWNING. It is withdrawn temporarily.

Mr. SHERMAN. I will now submit an amendment that I indicated at an early stage of the dis

THIRTY-SEVENTH CONGRESS, 2D SESSION.

cussion, to come in after section forty-two, page 44. It is to insert as a new section:"

And be it further enacted, That there shall be paid on all spirits of first proof held for sale on the 30th day of June, 1862, a duty of ten cents on each and every gallon, which shall be paid by the owner, agent, or person having possession of said spirits, and the quantity of such spirits in each assessment district shall be ascertained by the assistant assessor in the mode prescribed by this act for other property assessed by him, subject to the same revision and appeal, and all spirits held by any person or persons, whether for present or future sale, shall be deemed subject to said duty.

Mr. HOWE. The amendment just submitted is a pretty important one, and I have simply to say that while I have favored some proposition of the kind during the greater part of the discussion in the committee, the more I think of it, the more hostile I become to it. I have become satisfied of this: we are imposing a pretty heavy burden, a pretty heavy tax upon this class of manufacturers, and although I do not object to the amount, and although I voted to increase it, and should vote to put it higher if anybody proposed it, I wish to say that we ought to take care to give no advantages in the administration of it. This is a proposition, as I understand it, to put a tax upon a particular article of personal property on hand at a particular day. It is an article, a great portion of which will be concealed, will be kept out of the reach of the assessors; and whether it is one half, or one quarter, or three fourths of the whole quantity, to that extent it will have a large advantage in the market; and if you put a tax upon it it will give the dishonest holders, the holders who conceal the quantity they have and evade the payment of the tax, the advantage in the market over honest holders who step forward and acknowledge the quantity they have and pay the tax upon it, which there is between the tax and no tax, an advantage of twenty cents on the gallon. I am not willing to vote for an amendment which will put any such power in their hands. I think it would be better for us not to impose any such tax.

Mr. SIMMONS. I should like to examine this proposition. I want to say something upon it, and am not quite ready to do so. It is now five o'clock, and I move that the Senate adjourn.

Mr. FESSENDEN. On that motion, I ask for the yeas and nays. If we are to adjourn to accommodate every gentleman who desires to make a speech, we shall never get through.

Mr. SIMMONS. It is after five o'clock. Mr. FESSENDEN. I said, yesterday, that I should ask the Senate to sit rather late to-day, in order to get through with this bill this week, it possible.

Mr. SIMMONS. I withdraw the motion to accommodate the Senator.

Mr. SHERMAN. I will not say anything further on this amendment, except simply this proposition: if you levy a duty of twenty cents, it gives that advantage to the holder of spirits now on hand. Whisky is worth now in the markets of New York twenty-four cents. Its intrinsic value is about seventeen cents. It has-———————

Mr. McDOUGALL. Allow me to ask a question.

Mr. SHERMAN. Wait until I get through my statement. It has advanced in anticipation of the tax about seven cents. If we impose this tax of ten cents a gallon on that on hand, it will still leave a margin of profit of about three cents on the stock on hand. That which is manufactured after || the 1st of July will pay a tax of twenty cents; that which is manufactured now will pay a tax of ten cents. I offer this, and I will state the reason frankly, simply as a

Mr. McDOUGALL. I wish the Senator would allow me to ask him a question.

Mr. SHERMAN. Certainly.

Mr. McDOUGALL. It is this: whether it was not understood that the Senator from Ohio was not to move this until after I had moved my amendment. I went out of the Chamber supposing that that was the understanding of the Senator and myself, for he knows I differ radically with him on that question.

MONDAY, JUNE 2, 1862.

Mr. SHERMAN. If the Senator desires that course, and says that was the understanding, I will withdraw the amendment.

Mr. McDOUGALL. I so understood it. Mr. SHERMAN. My impression was, that I was not to offer it until after the Senator from Rhode Island had offered his amendment to increase the tax; but I always comply with any understanding of that sort. I did not understand it so; but I will withdraw the amendment.

Mr. HOWE. I understand that amendment to be withdrawn.

The VICE PRESIDENT. It is.

Mr. HOWE. I move to amend the bill in the three hundred and thirty-first line, on page 91, by inserting at the end of that line, after the words "burning fluid," the word "alcohol."

Mr. McDOUGALL. That is, to put it on the free list.

Mr. HOWE. Yes, sir; putting it on the free list. Mr. SUMNER. I should like to understand the reason for that amendment.

Mr. HOWE. I will state very briefly the reason of it. Alcohol is made from this whisky, which already pays twenty cents, and really more than one hundred per cent. on the value of the whisky. Alcohol is redistilled from that, as I understand, and used for a great variety of medicinal and mechanical purposes; and it seems to me to be unjust and impressive to impose an additional burden of three per cent. upon it after it has paid a duty of one hundred and thirty or one hundred and forty per cent.

Mr. McDOUGALL. In assessing this tax on raw whisky, we have the facilities for assessing what we choose to assess upon it, and have a simple way of doing it. If, after it goes out of its proprietary hands in the first instance, we seek to follow it up as it is reduced in various forms, we we will find we have a machine too hard to work. Besides, alcohol is one of the forms taken by whisky which ought not to be taxed, from its relation to mechanical and industrial business. We can tax the raw material one hundred and fifty per cent., or two hundred per cent., or as high as you please, and make it a simple measure; but if you attempt to follow it up after that, you will have very complicated machinery.

The VICE PRESIDENT put the question, and declared that the noes appeared to have it. Mr. HOWE. I call for a division.

Mr. FESSENDEN. I appeal to my friend not to call for a division. He can offer it again in the Senate.

Mr. HOWE. Very well.

The VICE PRESIDENT. The Senator withdraws his amendment.

Mr. HOWE. I move to amend, on page 125, by striking out the proviso to the eighty-sixth section, in the following words:

Provided, That upon such portion or said gain, profits, or income, whether subject to a duty, as provided in this act, of three per cent. or of five per cent., which shall be derived from interest upon notes, bonds, or other securities of the United States, there shall be levied, collected, and paid, a duty not exceeding one and one half of one per cent., anything in this act to the contrary notwithstanding.

Upon that motion I must ask for the yeas and nays.

Mr. FESSENDEN. I hope that will not be adopted. It will be noticed that that is the interest upon public securities. In the bill imposing an income tax, which we passed a year ago, we had the same provision, and the public faith, in my judgment, so far as stocks, bonds, &c., of the United States have been taken, is pledged to the fact that, so far as public stocks are concerned, the duty to be levied shall be of a certain amount; and they have been taken with reference to that duty. That income tax has existed until the present time. The object of that provision was to induce persons to invest in the public securities. Now, sir, that same object still remains. We desire that the people should take the public securities in preference to other investments. This bill repeals that act, so far as last year was concerned, and reenacts it for three years. This provision was intended to effect that purpose; and I really ||

NEW SERIES.....No. 154.

think it will not be dealing justly with the public creditors, and those who have taken our stocks, to repeal it, and I think it will not be good policy with reference to the future. It is holding out an inducement to those who take that particular investment, which is of very great importance to us.

Mr. SIMMONS. I merely wish to add that if the Senator from Wisconsin will look into the income tax of other countries, he will find it is invariably the case that the tax on investment in the national securities is always made lower. It is sound public policy to do so, aside from considerations of plighted faith. I hope the Senator will not persist in the amendment; I think if he reflects on it, he will consider it good policy to keep that clause in

Mr. HOWE. I have reflected upon it ever since last July. If I know anything, I know it is not good policy, and it is not equity. It is plighted faith, it is said. When did we plight the faith of the United States that we would not tax one kind of property as high as another? You sold bonds, the promises of the Government of the United States to pay certain sums of money in a certain time, and pay a certain rate of interest on money. That is one kind of property you have sold. You have sold lands. That is another kind of property you have sold. Is there any faith plighted that you will not tax the lands? Is there any faith plighted that you will not tax the bonds? No faith is plighted in one case or the other.

says

Mr. SIMMONS. I did not say there is. Mr. HOWE. "I did not say there is," my friend from Rhode Island. I agree with him. What is his objection? That England uniformly omits to tax this sort of income, or discriminates in the rate of taxation. When did ever England levy a tax of any description in the world that she did not discriminate in favor of wealth, and against everything which was not wealth? If you want to put the thirty millions who now occupy the United States in the position of the English population, discriminate; if you do not, if you mean that your institutions shall rest upon the principle which animates them, do not discriminate; do not copy England.

Is it good policy? Why, sir, if by discriminating in this taxation you can induce any capitalists to buy your bonds at a price enhanced beyond the discrimination, then do it. I do not think you will succeed in that enterprise. The truth about it is, you put your bonds into market, and you sell them at what capitalists can afford to pay for them, what they are willing to pay, or what they can get them at. Their property, their money, has got to pay, or ought to pay, taxes in some shape, just as much if invested in your bonds as if invested in your lands, or in your manufacturing stocks or your banking stocks. They buy your bonds only when they can, in their judgment, make a better investment of their money by putting it in your stocks than putting it into bank stocks, or putting it into any other kind of property. You suppose, we all suppose, that we will have issued in three or twelve months from this time from six to ten hundred millions of bonds. If there are $1,000,000,000 issued, there are $65,000,000 of clear interest money earned by the capital of the United States, subject to no deduction, no expense, no repairs, nothing in the world. It is the clearest income in the world, and it is the best able to pay taxes of any in the world. When a man hires out to the Government of the United States for a salary of a thousand or three thousand dollars, there are some slight deductions, I have noticed, from that income. It costs him something to live. If he invests his money in houses or stores, there are some repairs to be made; but if he invests in securities which pay every six months a certain sum, there is no deduction whatever. You may exempt them from taxation by the States, if you think it necessary to enhance their value in the market. Perhaps that may be proper; but while the Government is taxing every other man's income drawn from every other source, drawn from the labor of his