ELEGRAM SUPPLEMENT. 
 
 "The plain issue which we are to meet is indirect versus direct taxation." 
 
 " It has been the policy of the Government to collect the principal part of it* 
 revenues by a tax upon imports ; and no change in thit policy w denrable. frtn- 
 dent Cleveland in 1886. , . _ , 
 
 "For mv own part, as a Democrat, I prefer indirect taxation and tariff reform 
 above direct taxes and tariff extinction. I prefer taxing foreign products rather 
 than taxing home products." Da aid B. Hill. 
 
 "Against such a scheme unnecessary. Ill-timed, and mischievous suddenly 
 sprung upon the country in the hour of its distress, un-Democratic lt8 _ na . ture f 
 and socialistic in its tendencies-I enter the protest of the people of the State of 
 \i w York." David B. Hill. 
 
 SPEECH 
 
 OF 
 
 HON. DAVID B. HILL, 
 
 OF NEW YORK 
 
 IN THE 
 
 SENATE OF THE UNITED STATES, 
 
 AGAINST 
 
 THE INCOME-TAX FEATURES OF 
 THE WILSON TARIFF BILL. 
 
 MONDAY, APRIL 9, 1894. 
 
 WASHINGTON. 
 1894. 
 
 to Each I'lirc/iaxer of the ('iff/ Edition 
 of the " Ehnira Tel ey ram" April IZtli, 18<>4.
 
 SPEECH 
 
 OF 
 
 HON. DAVID B. HILL. 
 
 The Senate, as in Committee of the Whole, having under consideration the 
 bill (H. R. 4864) to reduce taxation, to provide revenue for the Government, 
 and for other purposes 
 
 Mr. HILL said: 
 
 Mr. PRESIDENT: The political revolution which commenced 
 in 1890 and culminated in 1892 was an emphatic expression of 
 the popular will in behalf of certain governmental policies. 
 Measures, and not men. were largely the issues involved in 
 that movement. Rightly interpreted, it indicated the public 
 sentiment in opposition to intrenchment upon the reserved 
 rights of the States through odious Federal election laws, some 
 proposed and others then existing; it voiced the general demand 
 for a discontinuance of the unwise and indefensible financial sys- 
 tem of silver-bullion purchases by the Government, instead of 
 the coinage contemplated by the Constitution, a system equally 
 a hindrance to the return to bimetallism as well as a menace to 
 a sound and stable currency; it manifested the desire for a bet- 
 ter administration ofpublic affairs, greater economy in govern- 
 mental expenditures, and the exaction of higher official stand- 
 ards in the execution of public trusts; it demanded a more safe, 
 dignified, and consistent foreign policy; and it condemned that 
 abuse or perversion of the taxing power of the Government which 
 is known as the policy of protection " for protection's sake alone," 
 and declared in favor of a tariff for revenue. 
 
 Invested with the responsibility of government, the prompt 
 enforcement of these policies devolved upon the party in power. 
 The wisdom of its action in discharging the duties thus assigned 
 it by the suffrages of the people, may at least be partially con- 
 ceded, even by its opponents. 
 
 OUB FOREIGN POLICY. 
 
 It is not denied that some mistakes have occurred. Our for- 
 eign policy, especially that relating to Hawaii, it must be ad- 
 mitted, has not met the expectations of the people. A sense of 
 humiliation prevailed when the project for the restoration of a 
 deposed monarchy was unfolded by the Administration, and 
 gratification ensued when its abandonment or failure was re- 
 luctantly announced, influenced largely by an aroused public 
 sentiment. 
 
 That unfortunate contemplated policy was a blunder, and a 
 blunder is sometimes worse than a crime. It was, however, the 
 natural consequence which might well have been anticipated 
 from that other mistake in placing the Department of State in 
 charge of a Republican stat3sman, distinguished and estimable 
 
 1228 3
 
 though he may be, whose public services have always been 
 identified in opposition to the Democratic party, who was with- 
 out sympathy for its traditions and purposes, and whose political 
 convictions upon the disputed public questions of the day, if 
 changed at all, are carefully concealed. 
 
 It is to be regretted that the President should not have been 
 able to find in his own party some safe and honored statesman in 
 whom he and his party could have placed confidence, one of Dem- 
 ocratic instincts and training, whose management of foreign 
 affairs would have reflected credit upon the country, and would 
 have avoided the promulgation of that un-American policy 
 a departure from Democratic precedents which was sought to 
 be forced upon an unwilling people. In this view of the situa- 
 tion our opponents must accept some share of the responsibility 
 for the blunders committed in our foreign affairs. 
 
 GOOD GOVERNMENT. 
 
 In other respects the present administration of our Govern- 
 ment affords scant grounds for just criticism. 
 
 The various Departments under Democratic control are rigidly 
 enforcing economy and the pledges to the people are being rea- 
 sonably fulfilled. In the main we are enjoying an era of good 
 government. 
 
 REPEAL OF FEDERAL ELECTION LAW. 
 
 That last relic of post bellum legislation known as the Federal 
 election law has been repealed by the present Congress, thus 
 promptly carrying out one of the important promises of the 
 Chicago platform. The power to control all their elections 
 without Federal interference or dictation, which the States al- 
 ways enjoyed from the foundation of the Government down to 
 18". 1, has been restored to them. It is a triumph for the just 
 doctrine of State rights, under constitutional limitations: it is a 
 tribute to the unseltishness and patriotism of the Democratic 
 party, which, discarding the patronage incident to the enforce- 
 ment of this law, and insured to it by at least three more years 
 control of the Federal administration, unhesitatingly asserts its 
 devotion to a principle, and thereby relieves the people at once 
 from further unnecessary annoyances, useless offices, and prodi- 
 gal expenditures. 
 
 REPEAL OP THE SHERMAN LAW. 
 
 The repeal of the Sherman silver bullion purchase law within 
 the first eight months after its ad vent to power marked the ful- 
 fillment of another pledge by tbe Democratic party. It evi- 
 denced our sincerity as well as prudence. It met the just de- 
 mands of public sentiment. While there were honest and re- 
 spectful differences of opinion among many good Democrats 
 here and elsewhere as to what other or further legislation ought 
 to take the place of the repealed law, or to precede, accompany, 
 or follow such repeal, there were never any substantial differ- 
 ences as to the inadequate, illogical, and indefensible character 
 of the Sherman law itself and the desirability of the redemption 
 of the party pledge for its abolition. 
 
 That result has been accomplished. Whether that high de- 
 gree of prosperity lias ensued from such action which some of 
 our officials anticipated and others predicted is another and a 
 different question, not now necessary to be considered. It 
 is sufficient that we have speedily removed the objectionable 
 legislation which our opponents had fastsned upon the country.
 
 REVENUE REFORM. 
 
 The duty which now especially confronts us is the revision of 
 the sum and methods of Federal taxation, consequent upon a 
 transfer of the political control of the Federal Government 
 from the custody where it had been lodged for thirty-two years. 
 
 That revision should be approached with circumspection, and 
 with a realizing sense of the changed condition of the country 
 since 1887 and 1890. 
 
 An extreme reduction of tariff duties at a time when the Treas- 
 ury was swollen with a surplus of a hundred million dollars, 
 when the country was reasonably prosperous, when all our in- 
 dustries were in motion, and all our workingmen were employed, 
 assumes a different aspect and presents a different question 
 when proposed now with a large and growing Treasury deficit, 
 instead of a surplus, staring us in the face, with our industries 
 paralyzed, our manufactories closed, our workingmen idle, and 
 following- upon the heels of one of the most disastrous financial 
 panics in our history. 
 
 What was safe and prudent and wise then it would be crimi- 
 nal folly to attempt now. 
 
 THE RECENT MONETARY PANIC. 
 
 A month prior to his inauguration the President was fore- 
 warned of the approaching monetary panic. He convened Con- 
 gress six months later, when the panic was subsiding which 
 should have been averted. 
 
 It is feared that this Congress does not keenly appreciate the 
 awful devastation which the financial cyclone of last summer has 
 inflicted upon the business interests of our country. It has 
 made havoc of our prosperity, private and public. It has 
 slaughtered private incomes. It has paralyzed private indus- 
 tries. It has forced bankruptcies without precedent in number 
 and sum. It has diminished all domestic and interstate trade, 
 until a fifth of our railroad mileage is in the hands of receivers, 
 and all our banks are gorged with money unemployed. It has 
 struck down by hundreds the captains of our industry who have 
 been wont to organize profitable enterprises, borrow capital, and 
 lead the great army of labor. 
 
 The past savings of our skilled workmen are drawn down. 
 They think themselves lucky to get half-time employment in 
 these dark days: and less skilled laborers by the hundred thou- 
 sand are suffering hunger, willing but unable to earn their daily 
 bread. It is heartbreaking as a pestilence. 
 
 NO TIME FOR PARTISANSHIP. 
 
 This is ho time for partisan reproaches, however just. This 
 is no time for Democrats to say to Republicans, " Your bad laws 
 did it." This is no time for Republicans to say to Democrats, 
 'Your remedies would increase trouble." It is a time to fling 1 
 partisanship to the winds if that will speed the deliverance of 
 our fellow-countrymen and revive our prostrate business inter- 
 ests. 
 
 This Senate is nearly equally politically divided, and it is ap- 
 parent that if prompt remedial legislation is expected, then rad- 
 icalism in any direction must be discarded. The critical situa- 
 tion demands wise and conservative action speedily secured. 
 The extreme features of the. McKinley bill must be eradicated 
 in obedience to the people's mandate, but patriotism alike de- 
 
 1228
 
 6 
 
 mands that extremes in the opposite direction must also be 
 avoided. 
 
 On the 4th of March, 1893, the President became vested with 
 exclusive power to convene Congress earlier than the law day, 
 for the purpose reaffirmed in his election. He decided to pro- 
 long the operation of the McKinley tariff for at least another 
 year. The delay thus imposed upon the people's reforming zeal 
 it is vain to regret. In the mean time the monetary p-mic un- 
 fortunately precipitated upon us has not only made havoc of our 
 private industries, but has dried up the public revenues. 
 
 THE TREASURY DEFICIT. 
 
 The size of the Treasury deficit at the close of the current fis- 
 cal year has twice been estimated by the Secretary of the Treas- 
 ury. 
 
 On the 19th of December he took its measure. On the 15th 
 of January he took its measure, the measure of the same deficit, 
 to accrue on the 30th of June, 1894. 
 
 These two measures of the same thing, taken twenty-seven 
 days apart, are not perfectly identical. In his annual report 
 the Secretary of the Treasury in formed Congress of a deficit for 
 the current fiscal year of $28,000,000. 
 
 A short month later, in his letter to the chairman of the Sen- 
 ate Finance Committee, the same Secretary of the Treasury 
 finds the same deficit to be $78,000,00.). 
 
 It may be unjust to the Secretary of the Treasury, as well as 
 absurd in itself, to assume that suggestions in his annual report 
 made when he thought the deficit of the current fiscal year to be 
 $28,000,OJO stand good after his discovery a month later that the 
 size of the deficit is $78,000,000. 
 
 The same observation would apply to the President's message 
 last December 4, dealing as he said with ''existing conditions," 
 which in fact have ceased to xist, and prefiguring a bill ' on 
 the lines herein suggested " (to wit, in his message), warranted 
 by him " to produce sufficient revenue to meet the needs of the 
 Government,'' when those needs were underestimated 350,000,- 
 000. Yet the Wilson bill, framed originally upon the theory sug- 
 gested by these high officials in their annual communications to 
 Congress, underwent no material change during its progress 
 through the House, notwithstanding the altered situation. The 
 theory survived its conditions. 
 
 In the face of the prostration of private industries, and in the 
 presence of such a paralysis of all general business as the Treas- 
 ury deficit attests and prolongs, this bill as framed by its authors 
 and as passed by the House sought to double the deficit by dis- 
 carding customs revenue and to fill the void with an income tax. 
 
 THE PROTEST OF NEW YORK. 
 
 Against such a scheme unnecessary, ill-timed, and mischiev- 
 ous suddenly sprung upon the country in the hour of its dis- 
 tress, un-Democratic in its nature and socialistic in its tenden- 
 ciesI enter the protest of the people of the State of New York. 
 They utterly dissent from any proposal to get revenue for the 
 General Government by taxing incomes. Their dissent is prac- 
 tically unanimous and altogether implacable. 
 
 Neither am I satisfied that the people of the country agree 
 with the President in desiring the undebated change, sudden 
 reversal, and complete transformation in the character of our 
 Federal taxation, from indirect to direct, involved in the pro- 
 
 1228
 
 posed plan to establish a sort of taxation not now championed hy 
 either of the parties who would have to administer it; by all par- 
 ties for three-fourths of a century justly believed to be inhibited: 
 then after trial in the war stress, denounced by one party and 
 discarded by the other party; and found odious throughout the 
 Northern States without distinction of party. 
 
 NOT RECOMMENDED BY THB PRESIDENT. 
 
 The recommendation in the President's annual message is 
 cited in justification of the proposed tax. It is as follows: 
 
 A measure has bean prepared by the appropriate Congressional commit- 
 tee embodying tariff reform on the lines herein suggested which will be 
 promptly submitted for legislative action. * * * The committee after full 
 consideration * * * have wisely embraced in their plan a few additional 
 internal-revenue taxes, including a small tax upon incomes derived from cer- 
 tain corporate investments. * * In my great desire for the success of this 
 measure I can not restrain the suggestion, etc. 
 
 It will strike the thoughtful observer familiar with the history 
 of the Government as a strange and unusual procedure that the 
 President of the United States should seriously inform Congress 
 of what one of its own committees has been doing in the prepa- 
 ration of a bill. It might be safely assumed that Congress 
 already had auch information unless the bill had been prepared 
 in the executive department and had been submitted to the 
 committee concurrently with the transmission of the message 
 to Congress. In these latter days the distinctions between the 
 functions and prerogatives of the executive department on the 
 one hand and the legislative department on the other do not 
 seem to be always observed. The truth is that the first infor- 
 mation which Congress had of the alleged details of the pro- 
 posed bill was in the message itself. 
 
 But the strangest part of this unprecedented proceeding was 
 that in fact at the very date of the message, to wit, December 
 4, 1893, neither the full Committee of Ways and Means nor the 
 Democratic members thereof had agreed upon any income tax 
 or upon other internal taxation. The President's information 
 was therefore inaccurate as well as premature. This awkward 
 situation was not improved by the President's expression of his 
 " desire for the success of this measure," being a measure not yet 
 perfected, a bill in an inchoate state. 
 
 But aside from any question of impropriety involved in the 
 recommendation of a particular measure or of an incomplete 
 measure, instead of a general recommendation of tariff reform, 
 leaving details to the discretion of Congress, and while conced- 
 ing that the President in the first suggestion of a limited income 
 tax injected the poison which has now spread until it has de- 
 veloped into a general income tax, nevertheless the latter scheme 
 can not find any real justification in the President's message. 
 
 He does not recommend a general income tax upon all the in- 
 come of individuals, but only a tax upon such limited income as 
 may be " derived from certain corporate investments." 
 
 NEITHER BY SECRETARY CARLISLE. 
 
 Secretary Carlisle in his annual report is equally guarded and 
 insists upon the same limitation. His report assumed that there 
 was no possibility of the adoption of a general income tax such 
 as formerly existed, and while apparently conceding the odious 
 and inquisitorial character of such tax and its liability to eva- 
 
 1228
 
 8 
 
 sion, he defends a limited tax upon incomes derived from corpo- 
 rate investments, upon the plausible ground that 
 
 The assessments or returns need not be based upon Information extorted 
 by the law from the persons charged with their paym ent, but upon the public 
 ri'i-on/s and the regular and authentic accounts of the corporations and companies 
 in which the investments have been made; and they hare the additional 
 merit of being imposed entirely upon that part of the citizen's income which 
 is not earned by fits labor or xkill, but which in the cases of legacies and suc- 
 cessions, is acquired by mere operation of law, or by gratuitious bequests, 
 and in the case of incomes from Investments in corporations and joint stock 
 companies, by the simple earning capacity of his capital as such, without 
 pernonal effort on his part. 
 
 Yet disregarding or exceeding the recommendations of the 
 President and the Secretary of the Treasury this bill proposes 
 to tax all the income of an individual, whether '' earned by his 
 labor or skill," or otherwise, and to obtain the necessary infor- 
 mation not from an inspection of public records, but from an in 
 vestigation of all his private books and papers. 
 
 A Federal income tax, ;vhether limited as suggested by th 
 President and the Secretary of the Treasury or general, as pro- 
 vided in this bill, is equally objectionable. 
 
 THE "FRANCHISE" ARGUMENT. 
 
 The argument that a Federal tax upon incomes derived from 
 corporate investments may with propriety be imposed, because 
 corporations are invested by law with valuable franchises not 
 enjoyed by the individual citizen, would have more weight if 
 suchfranchises were usually granted by Federal instead of Stat.^ 
 authority. The reverse is just the fact, however, and while State 
 authorities might with much reason upon such ground tax the 
 franchises as well as the earnings and dividends of such corpora- 
 tions for the support of their State governments, the Federal 
 Government has no particular standing or equities for such pur- 
 pose. It is immaterial to the General Government whether ibis 
 an individual or a corporation that is in receipt of income, as 
 the right or propriety of taxing such income is no greater in one 
 case than in the other, except in the rare instances where the 
 corporation may have received its charter through national 
 favor. This bill taxes both individual and corporate incomes 
 alike. 
 
 In New York and in several other States a "franchise '' tax 
 is imposed upon the earnings of certain corporations, and an 
 income tax, such as is proposed in this measure, would dupli- 
 cate the taxation already imposed and compel the States to aban- 
 don their State taxation. This is a most important and serious 
 objection to this feature of the bill. 
 
 In New York alone there was last year received from State 
 taxation on the capital and earnings of corporations the sum of 
 $1,1)011,047.45, excluding, of course, the taxation of their real es- 
 tate and personal property, and any local taxation. In the same 
 State there was also received last year the sum of $3,071,087.09 
 from the State inheritance and gift tax. These taxes from 
 which the State derives these enormous sums could not well be 
 maintained or collected without the most extreme hardship in 
 the event of the enactment of this bill, which taxes the same 
 sources '1 per cent. 
 
 It follows that the State taxes would necessarily have to be 
 abandoned, and the amounts heretofore received would have to 
 be collected from real estate or in other ways. New York's 
 interest in opposition to this feature of the proposed bill can 
 thus be appreciated.
 
 THE INJUSTICE NOT MITIGATED. 
 
 Neither is the injustice of the proposed corporate tax miti- 
 gated by the fact that it is against corporations rather than 
 against individuals, because, although in form imposed upon 
 the corporations, the amount thereof is deducted from the divi- 
 dends paid to the individual stockho'ders, and it is virtually a 
 tax upon individuals, for all practical purposes. 
 
 The individual stockholders are not necessarily the rich, but 
 they usually include all classes, and frequently among them are 
 found widows, orphans, trustees, and executors, and persons of 
 ordinary means who have invested their all in these corporate 
 securities, relying upon their dividends for their support. 
 
 If the suggestion for the taxation of incomes " derived from 
 corporate investments '' was largely based for its acceptability 
 to the people upon the well understood popular prejudice 
 against corporations, the proposition has a very weak moral 
 support, because after all it is the individual stockholders whose 
 dividends would be diminished, and who would be seriously in- 
 jured by the proposed tax. 
 
 A Federal tax upon the earnings or dividends of corporations 
 is no more defensible than such tax upon the earnings of indi- 
 viduals. 
 
 THE TAX TOO LARGE. 
 
 This bill neither follows the recommend*ations of the Presi- 
 dent and the Secretary of the Treasury as to the kind of income 
 tax desired nor as to the amount or rate of the tax itself. 
 
 The President preferring not to be specific, but cautious, rec- 
 ommended simply "a small tax upon incomes." The Secretary 
 suggested a tax of 1 per cent. The bill repudiates both sugges- 
 tions and adopts a tax of 2 per cent on all incomes over $4,IH,C, 
 no matter how large the excess may be. 
 
 AN INDEFENSIBLE EXEMPTION. 
 
 This exemption of so much as $4,00(rnecessarily leads to con- 
 siderable criticism. If an income tax is justifiable at all. it is 
 difficult upon theory to defend any exemptions, at least of any 
 material amount. Exemptions are merely a matter of govern- 
 mental charity or favor, and not a matter of strict right; and 
 being in derogation of a general principle, they should not be 
 unreasonably enlarged. If incomes are properly taxable, then 
 all incomes should be taxed, of whatever amount, taxed propor- 
 tionally, without favoritism to any individual or class. The man 
 of moderate means should pay as well as the man of wealth, both 
 according to what income they actually receive, no more and no 
 less, and no matter what the amount may be, great or small. 
 This must be the correct theory of an income tax, if any it has. 
 
 Such a tax being largely of foreign origin and having been 
 imported into this country and injected into this bill, it might 
 be expected that the exemptions would follow foreign prece- 
 dents. Prussia only tolerates an exemption of $22.~>. In Ger- 
 many the exemption varies from $70 to $t>00. In Denmark it is 
 $21"). and in Austria, $113, and in England $150. Yet here the 
 proposed exemption is to be the liberal sum of $4,000, a figure 
 for which there is no precedent anywhere in the world. So 
 large an exemption necessarily creates a numerous class receiv- 
 ing a respectable income, twice as much as is ordinarily neces- 
 sary to furnish a fair living, who pay no tix whatever. This 
 
 1228
 
 10 
 
 necessarily creates a privileged or exempted class on the one 
 band as against a taxpaying class on the other. 
 
 When real estate is taxed all that the individual owns is taxed 
 without the exemption of any part. So with personal property 
 aside from a few unimportant exceptions. So with the earnings 
 of corporations all are taxed, or none at all. The same principle 
 applies to the oleomargarine and the State-bank tax there are 
 no exemptions tolerated. But in the strenuous effort to popular- 
 ize this war tax in time of peace every just principle of taxation 
 is either violated or unreasonably extended. 
 
 DAVID A. WELLS'S VIEWS. 
 
 The Hon. David A. Wells, of Connecticut, contributes an able 
 and interesting article in the Forum of last month in opposition 
 to an income tax. His attitude upon this question may create a 
 suspicion of his loyalty to the cause of tariff reform in the minds 
 of a select coterie of overzealous professional reformers with 
 which the country is afflicted, but not in the minds of the Ameri- 
 can people. Mr. Wells was a sincere and radical friend of reve- 
 nue reform many long years before any politician or official 
 selfishly sought to monopolize it as his own particular hobby, 
 and his sentiments will carry much weight with thinking men. 
 Upon the precise point which I am discussing, he writes as fol- 
 lows: 
 
 The authors of the proposed income tax now before Congress especially 
 proclaim that the chief object sought by them in this measure is to transfer 
 the burdens of the State from the shoulders of the poor to those of the rich. 
 It is. therefore, interesting to note where they propose to draw the line in 
 respect to charity and as to the amount of property the possession or en- 
 joyment of which, in their opinion, constitutes riches. 
 
 If we assume 5 per cent as about the present annual average profit on 
 money, land, or other property in the United States over and above all 
 charges and taxes, then an exemption of $4,000, in an assessment under an 
 income tax. would represent an accumulation, or business, or profession, of 
 the value of $80.000. If we take the rate at which the United States can bor- 
 row money, namely. 3 per cent, then an exemption of $4,000 would represent 
 an accumulation of a citizeikin vested in United States securities of $133,333. 
 And according to any fair interpretation of the action of the committee 
 reporting a $4,000 exemption, a citizen who is worth less than .JSO.OOO of ordi- 
 nary property yielding income, or $133.003 of property invested in United 
 States bonds, is a legitimate object of national charity; the above sums rep- 
 resenting the dividing line in the United States between those who are en- 
 titled to be regarded as poor and those who are entitled to be considered 
 rich. Such an assumption finds no precedent in fiscal history. Such an ex- 
 emption is unwarranted favoritism to nine-tenths of the well-to-do people 
 of the United States, who are abundantly able to pay any just proportion of 
 The taxes which the Government finds it necessary to impose for its support. 
 
 No man is a freeman whose industry and capital are subject to exaction 
 and from which his immediate competitors are entirely exempt. Equality 
 of taxation of all persons and property brought into open competition un- 
 der like circumstances is necessary to proJuce equality of condition for all, 
 in all production, and in all the enjoyments of life, liberty, and property. 
 And government, whatever name it may assume, is a despotism, and com- 
 mits acts of flagrant spoliation, if it grants exemption or exacts a greater 
 or less rate of tax from one man than from another man, on account of the 
 one owning or having in his possession more or less of the same class of 
 property which is subject to the tax. 
 
 If it were proposed to levy a tax of 2 per cent 'on annual incomes below 
 $4,000 in amount and exempt all incomes above this su.n. the unequal 
 and discriminating character of the exemption would be at once apparent: 
 and yet an income tax exempting all incomes below $4.030 is equally unjust 
 and discriminating. In either case the exemption can not be founded or de- 
 fended on any sound principles of free constitutional government, and is 
 fimplv a manifestation of tyrannical power under whatever form of gt >vern- 
 ment it may be enforced. The great republican principle of equality before 
 the law and constitutional law itself alike preclude any exemption of in- 
 come derived from like property. 
 
 I can add nothing to the force of these observations. 
 
 1228
 
 11 
 
 IT IS INQUISITORIAL. 
 
 An income tax is objectionable because from its very nature it 
 must be inquisitorial in its imposition and collection. The senior 
 Senator from Indiana [Mr. VOORHEES] calls this allegation a 
 "noisy and resounding charge." Let me tell him that it is not 
 half so noisy as the constant vituperations which we hear on 
 every hand from blatant demagogues who are abroad in the land 
 loudly inveighing against the wealth of the country and impu- 
 dently demanding its confiscation through every means which 
 their "devilish ingenuity can invent. 
 
 The charge is indeed a ' ' resounding " one ! It was heard years 
 ago in France against unjust and arbitrary taxes when Talley- 
 rand and others declared that ' every system of taxation which 
 necessitates personal and arbitrary inquisitions for its execu- 
 tion is inconsistent with the maintenance of a free people." The 
 charge has ' resounded " all over the wdrld whenever despotisms 
 have attempted to enforce similar taxes to the annoyance and 
 detriment of the people. The charge that this tax is inquisito- 
 rial is scarcely denied even by the distinguished Senator from 
 Indiana, and is only attempted to be palliated by the pretense 
 that other taxes are equally so; but there is no foundation even 
 for this pretense. 
 
 Real estate is open and aboveboard: its value is easily ascer- 
 tainable, and its taxation presents no offensive features. Under 
 ordinary laws the assessors have no right to enter and ransack 
 your premises. Your home is your castle and it is sacred from 
 intrusion. The taxation of personal property presents difficul- 
 ties, of course, but visible personalty may be readily reached 
 without annoyance to the owner. The taxation of corporate 
 property is easily effected by general inquiry and an inspection 
 of public or other records usually accessible. 
 
 The fact that in a few States of the Union tax laws have been 
 adopted which unnecessarily pry into the taxpayers' private af- 
 fairs and are unusually harsh and offensive furnishes no argu- 
 ment why they should be selected as models for the whole United 
 States. They are exceptional in feheir character and should not 
 be followed. 
 
 If they are cited to show their acceptability to the people, I 
 might, on the other hand, point to the fact that income taxes 
 are so distasteful that they have been tolerated in only a very 
 limited number of States. 
 
 Neither does the circumstance that the Government in the 
 collection of our customs duties insists upon the inspection of 
 the baggage of passengers entering the country, in order to pre- 
 vent frauds npon the revenue and sometimes searches their 
 persons afford any justification for the enactment of an income 
 tax, the collection of which must largely depend upon inquisi- 
 torial proceedings. One procedure is necessary and unavoidable, 
 the other is not. One law is framed principally to reach for- 
 eigners and strangers entering the country, while the other 
 applies almost entirely to our own citizens. One has the safe 
 precedents of centuries to support it, the other is the modern or 
 at least the bad invention of monarchical governments. 
 
 A municipality has the right to compel individual vaccination 
 in the interest of the public health, but this reasonable and in- 
 dispensable exercise of authority would afford no excuse for the 
 establishment of an elaborate system for the enforced general 
 attendance of public physicians upon individual citizens and 
 
 1228
 
 12 
 
 their families. There is reason in all things, and one necessary 
 and proper encroachment upon the absolute personal freedom 
 of the citizen should not be made the pretext for other and more 
 extensive ones, which are obnoxious to a free people and con- 
 sistent only with despotism. 
 
 ITS BAD FEATURES. 
 
 This bill compels the taxpayer, under severe pains and pen- 
 alties, to make a return under oath of his income, whereby ho 
 discloses all his private aff airs and business to the agents of the 
 Government: and if intheopinion the mere belief- of such agents 
 the return is false, fraudulent, or contains any misstatement. 
 they may arbitrarily summon the citizen before them with all 
 his books and papers, and compel him to submit to examination 
 under oath. They may question, cross-examine, and annoy him 
 to their heart's content. There is no limit fixed anywhere. 
 
 The hearing is conducted in secret: there is no tribunal or 
 judge to regulate or check them: no one to prevent improper, 
 impertinent, or insulting questions; no one to protect the wit- 
 ness in his rights he refuses to answer at his peril. Neither is 
 that all; they may "enter into and upon his premises," and pre- 
 sumably into the very sanctity of his home to obtain ' from their 
 own view," as the statute says, any additional information they 
 may desire. 
 
 All this is to be tolerated and sanctioned by a free people to 
 enable the Government in time of peace to extort from a limited 
 class engaged in laudable occupations, who, by reason of their 
 good fortune, their brains, their enterprise, or their pluck, have 
 accumulated a little more of this world's goods than their fel- 
 lows, when other and ample and better sources of revenue are 
 always accessible. The provisions of this bill are dangerous in 
 the extreme. What temptations they offer; of what abuses they 
 are capable: what vast powers they confer! 
 
 These officials of the Government, intrusted with these enor- 
 mous powers, would not hold their positions for life or during 
 good beh ivior as in European countries where income taxes are 
 fostered, but they would be partisans, subservient and anxious 
 to please removable at pleasure. 
 
 What opportunities such laws and such officials would afford 
 to an unscrupulous administration desiring to assail and injure 
 its political adversaries or to build up a personal faction of its 
 own! 
 
 This bill also provides for the official supervision of the busi- 
 ness of corporations by requiring all their transactions to be 
 spread upon their books and to be open to the inspection at all 
 reasonable times of "am/ internal-revenue officer or agent." 
 The House bill sought to restrict such inspection so that it 
 should only be had whenever necessary for the purpose of veri- 
 fying the returns made by such corporations, and at no other 
 time, but the Finance Committee, presumably under the lead 
 of the Senator from Indi ma [Mr. VOORHEES], whose zeal in 
 behalf of this tax seems to have outrun his discretion, have 
 amended the House bill so as to remove all such restrictions 
 and to place the books of such corporations absolutely at the 
 disposal of the officials at all times. 
 
 ITS POWERS WILL BE ABUSED. 
 
 But it is said that these extraordinary powers and privileges 
 may not be abused, and it is also urged that the provisions pun-
 
 13 
 
 ishing by a fine not exceeding $1,000, or by imprisonment not 
 exceeding a year, or both, at the discretion "of the court, any offi- 
 cial who makes public any information obtained by him in the 
 discharge of his duties, are sufficient to prevent disclosures of 
 the citizen's business and private affairs. 
 
 Experience has demonstrated that such penal provisions af- 
 ford little protection to the people. There are statutes which 
 forbid the disclosure of the contents of telegrams, but leaks are 
 constantly discovered. Grand juries are sworn to secrecy, but 
 their proceeding's often prematurely reach the public ear. The 
 executive sessions of our Senate are secret, but the newspapers 
 generally manage in s jme mysterious way to find out all they 
 ought to know. 
 
 Our post-office officials are human and curious, and hence se- 
 vere statutes do not prevent frequent complaints of the opening 
 of letters. It is evident that the chief reliance of the citizen for 
 the secrecy of his business and private affairs must be upon the 
 absence of any law, no matter how strict, compelling their dis- 
 closure to any one. 
 
 The people of this country nearly everywhere enjoy the priv- 
 ilege of a secret ballot, but they would regard that privilege as 
 abridged and that secrecy as absolutely destroyed if the con- 
 tents of their ballot were required to be exhibited to the inspec- 
 tors, although such inspectors were sworn to secrecy and a dis- 
 closure were made a penal offense. It is immaterial to me how 
 Senators, unmindful of the personal rights and liberties of the 
 
 Eeople. may regard the conceded inquisitorial features of this 
 ill. But it is a satisfaction to know that the best thought 
 and the fairest minds of the nation are opposed to them. 
 
 The Supreme Court of the United States, in the case of Boyd 
 us. United States (116 U. S. Rep., 631) expressed its opinion of 
 similar legislation in the following vigorous language: 
 
 Any compulsory discovery, by extorting the party's oath or compelling 
 the production of his private books and papers to convict him of a crime or 
 to forfeit his property, is contrary to the principles of a free government. 
 
 It is abhorrent to the instincts of an Englishman. It is abhorrent to the 
 instincts of an American. It may suit the purposes of despotic power, but 
 it cau not abide the pure atmosphere of political liberty and personal free- 
 dom. 
 
 I commend these patriotic and pertinent utterances to the at- 
 tention of the apologists for this bill. 
 
 The provisions of this bill violate the spirit of the constitu- 
 tional provision which declares that " therig-ht of the people to 
 be secure in their persons, houses, papers, and effects against 
 unreasonable searches and seizures shall not be violated.' 
 
 The appliances of compulsory examination and inspection 
 which the bill invokes render its provisions extremely odious 
 and antagonize the citizens' sacred right of privacy. The re- 
 cent experiences in South Carolina illustrate the difficulties 
 often attending the enforcement of an unpopular law. 
 
 ELEMENTS OF INJUSTICE AND INEQUALITY. 
 
 The public should not be misled into the belief that only those 
 whose incomes exceed $4,000 are affected by this bill. That is 
 a mistaken idea. 
 
 In the first place, all those having incomes less than $4,000 but 
 more than $3,500 are put to the annoyance of making sworn re- 
 turns, and they neglect it at their peril. (See section 56. ) 
 
 In the second place, it may reasonably be apprehended that 
 
 1228
 
 14 
 
 some portion of the tax paid will reimburse itself by an increase 
 of rents where the income was derived from that source. State 
 taxes upon land regulate to some extent the amount of the rent 
 demanded by the landlord. So poor tenants may be affected in 
 some degree as well as rich landlords. The bill seriously af- 
 fects the rights and interests, as they have been heretofore en- 
 joyed, of building and loan associations throughout the country 
 incorporated under State laws. The Senate amendments do not 
 cure the defects complained of. 
 
 The salaries of State, county, and municipal officers are ex- 
 empt (necessarily so. as is alleged), while the salaries of faithful 
 employes in private employment their next-door neighbors 
 perhaps are subject to the tax. 
 
 The professional man will feel more keenly the tax upon his 
 salary than one whose income is derived from in vested property. 
 
 At every point there is an element of injustice and inequality 
 which renders an income tax indefensible except as a war tax. 
 That portion of the act which provides for a tax upon live- 
 stock, wool, butter, cheese, beef, etc., and general productions 
 from real estate. (i less the amount expended in the purchase or 
 production of said stock or produce," and which allows " neces- 
 sary expenses actually incurred in carrying on any business, oc- 
 cupation or profession," to be deducted in estimating the income, 
 opens the door for evasions, virtual frauds, fictitious or extrav- 
 agant expenses, overcharges, and a hundred different means 
 whereby the income will be reduced, without actual fraud or 
 perjury, and there is no practical remedy. The enforcement of 
 the law will descend into a system of favoritism, will lead to 
 endless litigations, and the revenues derived will be disappoint- 
 ing. 
 
 IT IS UNDEMOCRATIC AND UNJUST. 
 
 Let me inquire whence came this recent and unnecessary 
 clamor for the imposition of an income tax as the policy of the 
 Government? Nothing was heard in its behalf on the part of 
 either of two great political parties in the campaign of 1892. 
 Neither the Republican nor Democratic platform proposed any 
 such method of raising revenues. No prominent Democrat or Re- 
 publican suggested any such measure. Its approval was limited 
 to the platform of the newly formed Populist party, and its ad- 
 vocacy was restricted to Populist orators. 
 
 But no sooner was the campaign of 1892 ended than we find it 
 seriously proposed by a Democratic Congress to steal the thun- 
 der of the Populist party by adopting one of its principles. 1 
 object to becoming a particeps criminis in any such larceny. I 
 protest against the Democratic party being made a tail to the 
 Populist kite. I deny the right of a Democratic Congress to 
 make new principles for our party not sanctioned by its repre- 
 sentatives in national convention duly assembled. 
 
 We must look in vain to find a single utterance in favor of the 
 scheme of Federal income taxation in any Democratic national 
 platform from the organization of the Government down to the 
 present hour. Yet in spite of this record this scheme has been 
 injected into a revenue-tariff bill (so called) and the support of 
 the measure as a whole is sought to be made the test of our 
 Democracy. For one I repudiate any such doctrine and decline 
 to recognize any such test. 
 
 The Constitution of the United States may well be invoked in 
 this discussion. 
 
 1228
 
 15 
 
 A careful perusal of that instrument shows that its frame rs 
 contemplated that the revenues of the Government should be 
 mainly derived from duties upon imports. 
 
 It is true that the power to impose internal taxes and direct 
 taxes was conferred upon Congress, together with the power to 
 collect import duties, yet it was only the latter field of taxation 
 that the States were forbidden to encroach upon. 
 
 Article I, section 10, subdivision 2, of the Constitution, pro- 
 vides as follows: 
 
 No State shall, without the consent of the Congress, lay any imposts or 
 duties on imports or exports. * * * 
 
 This source of revenue being thus expressly and exclusively 
 reserved for the General Government, while all other sources 
 were permitted to remain open to the States, it indicates the 
 intention of our early statesmen that the needs of the Govern- 
 ment should be or were expected to be supplied practically from 
 tariff taxation alone. 
 
 From that sole source they have always been supplied during 
 all Administrations from the early history of the country, save 
 during the war period, with the addition, however, since then 
 of internal taxes upon liquors and tobacco (and one or two minor 
 articles o r sources ) , which for exceptional reasons, apparent to all . 
 have been approved or tolerated. But aside from these excep- 
 tions the policy of the Government has been uniform in favor of 
 taxation upon imports rather than internal taxation or direct 
 taxes, aa a means of supplying the necessary revenues. 
 
 PRESIDENT CLEVELAND ON RECORD. 
 
 President Cleveland in his second annual message in 1886 ap- 
 proved this course in the following language: 
 
 It has been the policy of the Government to collect the principal part of 
 Its revenues by a tax upon imports: and no change in this policy is desirable. 
 
 Yet the fact can not be disguised that notwithstanding these 
 accumulated evidences of Democratic sentiment, the authors of 
 this bill in the House deliberately set themselves at work to 
 make extreme reductions, unnecessary changes, and violent al- 
 terations in existing tariff. rates rates not warranted by exist- 
 ing business conditions and lower than in the Mills bill for the 
 very purpose of creating a necessity for the imposition of a tax 
 upon incomes. 
 
 DESIGNED AS A PERMANENT POLICY. 
 
 This proposed tax is not advocated as a temporary expedient: 
 there is no limitation fixed to its duration, but it is boldly pro- 
 posed as a permanent policy of the Government; its injustice is 
 vigorously defended, its discriminations are heartily approved, 
 and its illy-concealed sectionalism is unblushingly excused. 
 
 The Ways and Means Committee of the House, as well as the 
 House itself and the Senate Finance Committee, refused to fix 
 a definite term for the continuance of this tax. 
 
 It is clear that it was not designed for temporary relief merely . 
 but if once enacted will stand, like every other portion of the 
 bill, until repealed. 
 
 The country should not be deceived upon this subject, nor be 
 misled by specious promises of relief not contained in the meas- 
 ure itself, nor indulge in the vain hope that if once established 
 the clamor for its continuance will soon die out. The character 
 of the speeches made in the House in its favor, the appeals of 
 that portion of the press which favor it, and all the reasons 
 
 1228
 
 16 
 
 which are publicly and privately urged for its enactment, pro- 
 ceed upon the theory that it ought to bscome and is intended 
 to become a part of our permanent system of Federal taxation. 
 That is the goal for which its friends are struggling, and they 
 will be satislied with nothing less. 
 
 The plain issue which we are to meet is indirect versus direct 
 taxation. 
 
 Mr. Thomas G. Shearman, of Brooklyn, a theoretical reformer 
 and an intelligent and earnest disciple of Mr. Henry George's 
 single-tax theory, as well as an advocate of an income tax, began 
 his able address before the Ways and Means Committee on Oc- 
 tober 16 last, as follows: 
 
 It is high time that some form of practically direct taxation should be re- 
 sorted to by the Federal Government. 
 
 It should, however, be stited that Mr. Shearman opposed an 
 individual income tax. but favored the taxation of incomes from 
 certain corporate investments. I have not been informed who, 
 if anybody, favored an individual income tax before that com- 
 mittee. 
 
 We do not contend that the system of taxation upon imports 
 absolutely prevents all inequality or injustice. It is of course 
 not a perfect system. E^ual and exact justice to each individual 
 citizen is not possible under any method of taxation likely to be 
 devised. But Federal taxation upon foreign importations tax- 
 ation upon consumption, if you pie tee indirect taxation imposed 
 upon what you, buy and use is preferable to direct taxation of 
 any kind. The fathers of the Republic so regarded it when they 
 adopted tariff taxation as the best means for securing Federal 
 revenues. They may have been mistaken, and possibly we are 
 wiser than they were. 
 
 But it has proved reasonably satisfactory for over a hundred 
 years, producing ample revenues for the national necessities, ex- 
 cept during the crisis of war. and no political party has ventured 
 openly to declare for its total abandonment, and to propose di- 
 rect taxes in place thereof. It answers a twofold purpose, to 
 wit: First, the direct or principal purpose of providing reve- 
 nue; second, the indirect or incidental purpose of protecting 
 home producers, manufacturers, and laborers from ruinous for- 
 eign competition. 
 
 Revenue is the primary object of a tariff, and all else is merely 
 secondary or incidental thereto. 
 
 I do not propose at this time to discuss the difference or the 
 merits of the two policies arising out of tariff taxation, to wit, 
 a tariff for revenue and a tarilf for protection, the one the Dem- 
 ocratic, the other the Republican policy. These points of dis- 
 pute I am not now considering, but expect to do so at a future 
 day. 
 
 The point which I am now endeavoring to make is that under 
 tariff taxation in general, ample revenues have not only been de- 
 rived, but at the same time the Industries of the country have 
 augmented, manufactures have prospered, workingmen have 
 found remunerative employment, labor has been properly 
 shielded from foreign competition, and the best and highest in- 
 terests of the whole country have been subserved: many of which 
 beneficent results would have been impossible under any sys- 
 tem of internal or direct taxation. 
 
 In fact, I am here to declare my belief that the complete sub- 
 stitution of internal, direct, or income taxes for tariff taxes 
 tea
 
 17 
 
 would prove utterly ruinous to the business interests of this 
 country under existing conditions abroad. A partial substitu- 
 tion at this time would be proportionately disastrous. 
 
 This bill proposes a suicidal policy when it seeks by its ex- 
 treme provisions to discard numerous reasonable tarirf duties 
 and thereby imperil many industries and create a deficiency in 
 necessary revenues, simply for the purpose of affording an op- 
 portunity or excuse for the substitution of an income tax. There 
 is an ample field for genuine tariff reform without a resort to 
 such an unwise and dangerous experiment. Innumerable re- 
 ductions in existing rates reasonable and necessary reductions- 
 are perfectly feasible, such as will not create any further defl 
 ciency nor jeopard a single industry. 
 
 WHAT IT MEANS. 
 
 The substitution of internal or direct taxes for custom-house 
 taxation, means the reduction of the wages of American work- 
 men to the European standards. It means the degradation of 
 American labor; it means the deprivation to our workmen of the 
 comforts and luxuries of life to which they have been accus- 
 tomed. 
 
 Deny it or disguise it as we may, no other result is possible 
 under existing European conditions. It is a self-evident prop- 
 osition that well-paid labor can not successfully compete with 
 underpaid labor. In Europe wages are low and labor is de- 
 graded; in America wages are high and labor is prosperous, 
 elevated, and dignified. The General Government being vested 
 with the exclusive power of custom-house taxation and the 
 States being prohibited from resorting to it, the Government 
 should exhaust that field before intrenching upon others. 
 
 Let me not be misunderstood. Not one dollar of tariff taxa- 
 tion should be imposed except what is necessary for the needs 
 of the Government, economically administered: but whatever 
 those needs are, the necessary revenues therefor should be sup- 
 plied from tariff taxationand thatalone, saveand exceptthe taxes 
 upon liquors, oleomargarine, and tobacco, to which the country 
 has long been accustomed, and which for obvious reasons need 
 not be disturbed. 
 
 Such a policy is a reasonably consistent one, and should be 
 continued. It would be manifestly unfair to the States todiver- 
 sif}' Federal taxation. It is now condensed, simplified, and prac- 
 tically exclusive, and should remain so. 
 
 IT DUPLICATES TAXATION. 
 
 A. Federal income tax involves multiple taxation in several 
 States, where State income taxes already exist. This bill also 
 proposes to tax the dividends of corporations and gifts and in- 
 heritances, which are already taxed under State laws in New 
 York and many other States, thereby compelling such States to 
 either abandon such form of taxation altogether or to enforce 
 and sanction what would clearly be oppressive taxation. The 
 duplication of taxes is always objectionable. 
 
 The threadbare argument is urged that wealth escapes taxa- 
 tion and that it can best be reached through an income tax. If 
 this be true it does not necessarily require a Federal income tax. 
 Let those States where wealth is believed to be insufficiently 
 taxed reach that wealth through State income taxes or any 
 other methods which their ingenuity can suggest, and no one 
 outside of those States will be heard to object. Surely States 
 
 1228 2
 
 IS 
 
 which refuse to apply the means within their power to equalize, 
 diminish, or render more equitable their own State and local 
 taxation ought not to ask the assistance of the General Govern- 
 ment to relieve them. 
 
 State and local taxation rather than Federal taxation com- 
 prises the principal burden of our taxpayers, and to each state 
 is conceded the ri^ht to frame and execute its own tix laws, 
 whereby it can compel the wealth within its own borders to con- 
 tribute whatever share of taxation it may determine in its dis- 
 cretion to be proper. 
 
 This is all that any Stat:; can reasonably ask. Certainly no 
 State can consistently demand that its own prerogatives shall be 
 encroached upon and its own revenues imperiled by the General 
 Government in order that the State's own wealth may not escape 
 taxation. 
 
 FEDERAL VERSUS STATE AND LOCAL TAXATION. 
 
 The records of the Census Bureau show that in 1890 the State, 
 c mnty, and local tixation of the several States of the Union 
 amounted in the aggregate to $470,476,927. The total Federal 
 taxation (ord nary expenditures) for the last completed fiscal 
 year (lSi3) only amounted to $383,477,954.49. and including ex- 
 traordinary expenditures amounted to $4B1 ,916, 561. 94. Of this 
 last sum only $205, 35"), 016.73 were realized from customs. It is 
 the custom-house taxation particularly which the friends of di- 
 rect Federal t ixation claim is not paid equally by the people, 
 and is so burdensome to the poor man; and yet such taxation is 
 not equal to one-half of the State and local taxation. 
 
 WHAT STATES WILL PAT THE TAX. 
 
 From 1863 to 1873 the former income tax extorted from the 
 people an aggregate sum of $317,220,897.86. Of this sum the 
 Eastern Statas paid 18 per cent, the Middle States 53 per cent, 
 and together they paid 71 per cent. New York alone paid -'50 per 
 cent. It has not been claimed that these percentages will be 
 materially changed if this bill becomes a law. 
 
 These figures speak louder than words. They are significant 
 of the selfish purposes of this bill, the real motives behind it, 
 and the sourca or section from which the votes necessary for its 
 passage are expected to be secured. 
 
 Further comment becomes unnecessary. I will only add that 
 1 am not ashamed of the fact on the contrary, I am proud of 
 the fact that New York is the wealthiest State in our Union; 
 but I protest that this circumstance should not make her citi- 
 zens the target of every vicious scheme which discriminates 
 against her interests, and especially that the blow should not be 
 struck by thosa political friends who have never appealed to 
 her in vain when they have needed evidences of her friendship. 
 
 A STEP TOWARD SOCIALISM. 
 
 It is charged against the friends of a Federal income tax that 
 they are artfully driving in the thin edge of a wedge to effect a 
 forced redistribution of property. 
 
 Toward such a purpose, were it fixed in the minds of a major- 
 ity of voters, the efficiency of every kind of an income tax is un- 
 deniable, whether applied in State laws to the profit of classes, 
 or in a Federal law to the profit of sections. 
 
 I feel bound to concede that the sincere object of the great 
 body of the friends of a Federal tax oa incomes is not an experi- 
 ment in socialism, is not a swift political suicide, but is the 
 UM
 
 19 
 
 straightforward furtherance, after great discouragement and 
 long delay the furtherance of tariff reform. 
 
 The choice of a pivot for tariff reform in this bill responds to 
 the firm tenacity of the people for relief, but not wisely. The 
 choice follows, to be sure, a notable British precedent, hut that 
 precedent is quite irrelevant for America, where Federal and 
 State taxes present no analogy to the foreign agglomeration of 
 imperial and local taxation. 
 
 The British Kingdom is straining to-day in the pangs of de- 
 centralization. A Federal income tax would lay in the United 
 States the great corner stone of future centralization. The 
 choice of some pivot of tariff reform in the United States that 
 is, obtaining revenue from one source in o; - der to discard revenue 
 from another source is a necessity. What pivot had best be 
 chosen is pure expediency. The British choice may have been 
 expedient in Great Britain. An identical or different choice in 
 the United States needs to be shown expedient here. Alone 
 serving the purpose, or best serving the purpose, of a pivot for 
 tariff reform, must be the test of expediency for an income tax 
 in the United States, even by those who deem it an inoffensive 
 and lawful Federal tax. 
 
 It is obviously inexpedient, if unnecessary. Evidence that it 
 is unnecessary for the purpose of its friends has been and is now 
 offered to their consideration. 
 
 THE ENGLISH PRECEDENT. 
 
 Praises of an income tax which are quoted in the CONGRES- 
 SIONAL RECORD from British books will be found upon inspec- 
 tion to be relative to the demerit of the discarded taxes. Mr. 
 Gladstone himself desired to renounce the income tax after it 
 had served its turn, conceding thus its injustice and inequality. 
 
 I do not misstate his position. The following letter written 
 by him in 1892 to a London newspaper explains itself: 
 
 GLADSTONE'S OPINION OF THE INCOME TAX. 
 
 [From the London Pall Mall Gazette.] 
 
 I am not aware of any practicable method of reforming the Inequalities 
 and injustices of the income tax. For this reason. I with my colleagues pro- 
 posed its abolition in 1874; but the country decided otherwise. 
 
 W. E. GLADSTONE. 
 JANUARY, 1892. 
 
 That statesman's act praises good tariff taxation over bid tariff 
 taxation, and over income taxation, too. The United States can 
 find, upon reflection, a better pivot of tariff reform, and one which 
 will not need to be renounced for its own demerits. Pr iises of 
 an income tax and theoretical arguments for it, quoted in the 
 RECORD from the British treatises of political economy, will be 
 found to rest on the assumption that it be the sole and single 
 tax that it be the exclusive means of defraying government 
 expense, from the highest imperial to the lowest police func- 
 tions, and that it tolerate no exemptions. 
 
 All such quoted arguments are obviously irrelevant here. No 
 British statesman of rank, so far as I know, differs from Mr. 
 Gladstone's opinion that, as a supplementary tax, the income 
 tax in Great Britain, where upon constitutional grounds it is 
 eligible, it is as indefensible as it is odious in time of peace, and 
 that there it must find its only warrant in the necessities of 
 war. 
 
 No American statesman of rank, except Mr. Cleveland, has 
 deemed it eligible, since our war experience of an income tax 
 
 J228
 
 20 
 
 made manifest that here too, in the Northern States, it was gen- 
 erally odious. It is a novelty in American politics to make its 
 conclusions and procedures deliberately offensive. It is like 
 making religion immoral and urbanity noisy, in order to com- 
 mend and propagate them. 
 
 IT VIOLATES STATE RIGHTS. 
 
 No such Federal aggrandizement was ever projected no such 
 insidious and deadly assault upon Sta^e rights, State powers, and 
 State independence, as a Federal income tax. 
 
 Mr. Calhoun would have thought it wasted breath to discuss 
 the autonomy of States or the limits of their sovereignty under 
 an income tax put up and put down by the Congress in Washing- 
 ton. 
 
 Praises of an income tax on the ground that it reaches accu- 
 mulated wealth assume that such wealth goes untaxed unless 
 reached by Federal laws. The assumption is absurd. 
 
 Arguments for a Federal income tax drawn from the existence 
 of State taxes on incomes admit that accumulated wealth is 
 reached without Federal laws and confess incroachment upon 
 State sources of revenue. 
 
 Accumulated wealth looms up large in the imagination of the 
 foreign socialist. His estimate of individual fortunes, published 
 in New York newspapers, is always absurdly excessive. His 
 moral quality is frankly betrayed in his constant preoccupation 
 with the least noble possession of his fellow-creatures. 
 
 A better point of view for the American legislator is the fact 
 that the total realized material wealth of the human race is 
 computed by the best economists at less than four times its an- 
 nual consumption. Every step of progress destroys wealth to 
 recreate more. Old printing presses, old cotton-mill machines 
 are worthless. 
 
 The constant personal redistribution of realized accumulated 
 wealth is a commonplace of the moralists. But its physical and 
 economical redistribution is even more swift and general. It 
 can not escape taxation in the ceaseless consumption and repro- 
 duction which are the condition of its continuing to be wealth. 
 
 THE HOUSE ARGUMENTS. 
 
 To these income-tax arguments sifted from the debate in the 
 House, I pay the respect of refutation, because of my entire sym- 
 pathy with the tenacious purpose to advance tax reform, which 
 is ostensibly behind them. But I must also beg permission very 
 respectfully to warn the devoted champions of every Democratic 
 aspiration not to neglect principles constitutiona. and economic 
 which are deep-seated in the lifelong convictions of Northern 
 Democrats, merely because of the omission of the present Exec- 
 utive to wholly share, remember, or represent them. No hon- 
 est and clear-headed man can possibly define a direct tax in terms 
 which shall be capable to exclude any sort of income tax from 
 the circumscription of the definition. 
 
 Nobody ever had a doubt before the war that the constitu- 
 tional inhibition, upon that ground alone, was peremptory and 
 conclusive. I do not quarrel with the decision of the Supreme 
 Court in the Springer case; but the doctrine may hereafter be 
 repudiated by the present court. Such things have happened 
 be'fore. 
 
 1228
 
 21 
 
 The income tax proposed by the President, or that incorpo- 
 rated in the House bill, or any other sort of Federal income tax, 
 is unsuitable for apportionment among the several States accord- 
 ing to the census of their populations; and neither pretends to 
 be uniform, applie d to all the net income of each and every citi- 
 zen, nor can be. Direct taxation, by definition, making argu- 
 ment superfluous, is taxation not shifted, distributed, and divided 
 by repercussion. 
 
 A single tax on land has enlightened advocates on the ground 
 that it would be distributed, divided, and re percussed with free- 
 dom and therefore with equity; that being advanced by the oc- 
 cupier of the land it would be distributed according to the use 
 of the land, which use is variable while universal thus resem- 
 bling in this point a tax on sugar, for example, which being ad- 
 vanced by the importer, would be distributed according to con- 
 sumptionanother form of use, variable while univers il. 
 
 Direct taxation, on the other hand, of which the poll tax and 
 the tax on all incomes at one per centage are perfect illustrations, 
 is like an acid which must eat where it falls. 
 
 Arguments for an income tax assert moreover that Congress 
 is empowered to apply a rule of inequality and a principle of in- 
 justice in order to distribute the rewards of industry and thrift 
 otherwise than they are distributed among men acting with in- 
 dividual freedom under equal laws. Such a grant of power to 
 Congress has not^yet been cited. 'But if such a grant of power, 
 after long litigation were found there, or after the long process 
 of constitutional amendment were put there, nevertheless the 
 test first to be applied just now in the search for sources of rev- 
 enue would preclude income taxation. 
 
 It is not th? most immediate and most adequate remedy for 
 the existing lack of revenues and would not aid the revival of 
 our prostrate industries. It is not the best pivot of tariff reform. 
 It jeopards genuine tariff reform for another decade. 
 
 AN UNWISE COURSE. 
 
 To double the deficit of $78,000,000 by way of ending it: to dis- 
 card 37>i.O XMJOO of annual revenue in order to collect twice as 
 much in other ways; to"embjdy tariff reform" as the Presi- 
 dent imagined himself to be doing in his scheme to substitute 
 direct taxes for the tariff taxes which were to be reformed; to 
 reconstruct all the schedules instead of amending or discarding 
 one group at a time, the worst first and each upon its own de- 
 merits; to disturb and distress as many business men as possi- 
 ble and all at once, instead of few at a time, is not a programme 
 perfectly matured and suited to conduct the policy and princi- 
 ple of tariff reform unimpaired through a period of general 
 business prostration, public deficit, and private bankruptcy. 
 
 For my own part, as a Democrat, I prefer indirect taxation 
 and tariff reform above direct taxes and tariff extinction. I pre- 
 fer taxing fore ign products rather than taxing home products. 
 I follow Jefferson in regarding even the species of indirect taxa- 
 tion on home products by internal revenue war taxes as not good 
 to be extended and the first to be rid of when their need is 
 past. 
 
 In the language of the Democratic national platform of 1884: 
 
 From the foundation of this Government taxes collected at the custom- 
 house have been the chief source of Federal revenue. Such they must con- 
 tinue to be. 
 1228
 
 22 
 
 In the language of the New York Chamber of Commerce, Jan- 
 uary 12, 1894: 
 
 The Chamber of Commerce * * * believe without distinction of party 
 lines * * * that in addition to an internal-revenue tax now in force, the 
 necessary expenses of the Government should be collected through the cus- 
 tom-house. 
 
 The President's proposal to invert the method of our Federal 
 taxation runs precisely counter to the principle and the practice 
 preferred by the founders of our Republic, and to which a. ter 
 every aberration the apostles of Democracy have led the re- 
 turn. But were all this otherwise, nevertheless, I would first 
 and foremost consider how to add sufficient revenue best and 
 soonest. 
 
 I would remember the captains of industry. I would remem- 
 ber the bre.id winners. And if our Federal revenues, bottomed 
 heretofore upon cus'.oms duties on foreign products, were here- 
 after to be bottomed upon taxes on home products and a few in- 
 comes, I could never counsel a President or a Congress to sound 
 the tocsin of that revolution in the black midnight following a 
 general slaughter-day of all private incomes. 
 
 THE FOREIGN PRECEDENTS. 
 
 The State Department through our consuls in Europe has made 
 a collection of income-tax laws every hideous octopus that is 
 sucking out the life-blood of the people of Europe to support war 
 navies and war armies and fetches them over for model exam- 
 ples to this land of liberty, this continent of industrial peace. 
 Fit models, tine examples! They have taught the draftsmen of 
 this bill one lesson too many. They have taught the draftsmen 
 of this bill with just what form of words to constitute a class of 
 official highwaymen for blackmailing or plundering every man 
 of property in the United States. Is that harsh? Then I say tka t 
 were the teachers angels and the pupils better than the best of 
 men, no form of words their wit could contrive would fail of 
 spawning just that infamy. It is inherent, intrinsic: it sticks 
 in the very nature of any Federal income-tax law whatever. 
 
 JEFFERSON'S SENTIMENTS. 
 
 Jefferson's Fontainebleau letter has been quoted in this dis- 
 cussion. That letter was written on the eve of the French Ur>v- 
 olution. It was written in the presence of those awful social 
 wrongs and the political inequality, injustice, and oppression 
 from which that historic convulsion ensued. It is actually q ioted 
 as helpful authority by men favoring ;in income tax, in a century, 
 a hemisphere, and a state where exists not one of all the affect- 
 ing circumstances that Jefferson's kind heart grieved over, and 
 his philosophic mind scanned all the darkening sky for peaceful 
 methods to relieve. 
 
 The Fontainebleau letter reveals him ane.w in those power- 
 ful yet winning traits which make his life and characier the ad- 
 miration of every American. Indeed the most impressive ar- 
 gument against an American income tax is foreshadowed from 
 his thrilling page. It is a fit " prologue to the swelling act of 
 the imperial theme'' of the great inaugural address. 
 
 OCR AMERICAN PRINCIPLES OF GOVERNMENT. 
 
 The United States of America have hitherto received and are 
 now receiving from the best races of other States, nations, and 
 empires, the tribute of a surpassing praise, without precedent
 
 23 
 
 in history the praise of the desii-e of their young men and young 
 women to assimilate their lives to ours, and their children's 
 hlood with the blood of our children, the praise of their desire 
 to escape the burdens of past and future wars and be at peace, 
 the praise of their desire to escape from the inequalities of priv- 
 ilege to an equality of rights, from European thrones, domina- 
 tions, hierarchies, classes, and castes, political, ecclesiastical, or 
 social, to an American individual liberty and civil equality, to 
 our forms of government, founded upon popular elections, ex- 
 pressed in written constitutions, embodied in a permanent union 
 of i ermanent States. 
 
 It may be impracticable that our distinctively American ex- 
 periment of individual freedom should go on. Its novelty, as 
 known by experience to the e irlier immigration, can hardly be 
 expected to receive full appreciation even from the most in- 
 telligent immigrants of the present generation. Our separation 
 from the traditions and habits of thought of the Old World was 
 so complete that the Declaration of Independence ratified an old 
 fact rather than accomplished a new fact. The Constitution of 
 the United States confirmed us in the possession of that inde- 
 pendent tradition and a complete individual freedom. 
 
 The States which it united, the Federal Government which 
 it established, are chiefly remarkable for their inhibitions of 
 po'-ver, for their limitation of granted powers, for the strength 
 and multiplicity of their safeguards of individual freedom. The 
 sovereignty of the people, incontestible, possessed, fresh like 
 the dew of morning in the beginning of our day and not like the 
 dust and sweat of centuries of strife, was here first asserted and 
 made manifest throughout the whole area of its jurisdiction, in 
 its reservations and self-denials, in those limits set to its control, 
 in those fortiiied safeguards of civil equality and individual lib- 
 erty. 
 
 Perhaps it is a dream that such a paradise as we have pos- 
 sessed could 1 e secure from change. The pick of the foremost 
 races of mankind still are streaming hither, but now they bring 1 
 another tradition. They come from that group of crowded, con- 
 tiguous armed cariips called Europe. Th.^y have not had train- 
 ing for generations in self-government. Some few have had a 
 little training in getting possession of large governmental pow- 
 ers, existing and long used in disregard of popular rights. 
 They have not had the habitude of popular sovereignty uncon- 
 tested, popular rights enjoyed like air and water; they have not 
 lived in civil equality and individual liberty like ours, guarded 
 with eternal vigilance against the very governments our fathers' 
 hands and our own have made, and put bounds to, and unwea- 
 riedly repressed. 
 
 Across the water, among European peoples, human freedom 
 enlarges, if it is enlarging, slowly. Out of armed camps not 
 yet h is grown a civil polity which refuses powers to the state 
 in order to guard freedom for the man. State powers grow. If 
 individual freedom anywhere is broadening there, its growth is 
 subject to an inheritance from which we completely at one 
 stroke escaped, and to hazards hitherto unknown by us. The 
 growth of human freedom in Europe is subject to hazards from 
 extensive, minute, searching, inquisitorial governmental pow- 
 ers, existing, organized, and predominant. 
 
 It is that sort of an inheritance, not/ our Xew World sort, 
 which the peoples of Europe are called to administer, as one \y 
 1228
 
 one, after long wrestling with intermarried dynasties, through 
 wars and revolutions, they succeed to the substance of sover- 
 eignty. Interferences with individual freedom are customary, 
 and breed their own tradition. The governments are of mili- 
 tant and not industrial pattern. Their machinery is organized 
 for repression: has had interference and control for means and 
 end. That which was and is the interest of monarchies and 
 aristocracies, in becoming the inheritance becomes the tempta- 
 tion and the hazard of their democracies. 
 
 THE WEAPON OF MONARCHIES. 
 
 Taxation of all sorts, taxation at every turn, taxation upon in- 
 comes, with all the necessary bureaucracy, machinery, and in- 
 quisition, has long been the appropriate and most perfected in- 
 strument with which European governments have multiplied 
 their functions and prolonged their supervision, their control, 
 their repression of the people's doings. W hile the founders of 
 our democratic Republic, hiding the taxgatherers in a few sea- 
 board custom-houses, bade them remember they were the peo- 
 ple's servants and stick to an inoffensive obscurity, the tax- 
 gatherers of Europe became a fat official class, leaders of the 
 local society, parasites, pupils, and servants to every occupant of 
 a throne. 
 
 The leaders of the democracies who are approaching sover- 
 eignty slowly and clutching for the handle of every power whose 
 edge they have felt, dreading the reaction that has followed con- 
 fiscation of privileged estates, perceive, or think they see. in the 
 taxation of incomes a safer and attractive weapon of redress. In- 
 stead of the settled supremacy here of man versus the state, 
 there we see survivals of an earlier, almost a barbaric, phase of 
 human progress, and the war of a class the poor and the un- 
 privileged to capture the state in order to make reprisals upon 
 another class, the privileged and the rich. 
 
 Taxation is even the favorite organ of more advanced Euro- 
 peans who would bottle into the political and corporate struc- 
 tures of society those innumerable limitless fountains of social 
 beneficence which here have found their widest, deepest flow 
 through free lives from the free hearts of free men. So it hap- 
 pens that local troubles and a passing phase of the secular prog- 
 ress of Democracy in the Old World take on the aspect of 
 socialism, whereas in this new world of United States our de- 
 mocracy has always been freedom. 
 
 OTTB EUROPEAN ADVISERS. 
 
 The nonmigrating European feels a parental superiority and 
 duty toward us. European professors announce to American 
 professors, who publish and believe it, the birth of a brand new 
 political economy for universal application. Prom the midst 
 of their armed camps between the Danube and the Rhine, the 
 professors with their books, the socialists with their schemes, 
 the anarchists with their bombs, are all instructing the people 
 of the United States in the org mization of society, the doc- 
 trines of democracy, and the principles of taxation. Little 
 squads of anarchists, communists, and socialists cross the ocean 
 and would have us learn of them. No wonder, if their preach- 
 ing can find ears in the White House. 
 
 An editor residing in Europe, of Hungarian birth, in his New 
 York newspaper advocates an income tax designed ultimately 
 to put upon nine States between Cape Cod and the Mississippi 
 
 1228
 
 25 
 
 77 per cent, and upon New York alone 30 per cent of the ex- 
 penses of the Federal Government. 
 
 That taxation of incomes in the United States would be sec- 
 tional and class taxation Is precisely why it commends itself to 
 some men of the European tradition. Their advocacy is sincere, 
 and has one small excuse, that through our own stupidity and 
 negligence some parts of our tariff schedules have been shaped 
 to enrich a fewCarnegies with texts for sermons on triumphant 
 democracy and the best use of wealth. 
 
 If McKinleyism is socialism for the benefit of the rich, and in- 
 come taxing is socialism for the benefit of the poor, no true 
 American Democrat will look to the hair of the dog to cure his 
 bite. American Democrats will reject socialism of both kinds. 
 
 THE AGGRANDIZEMENT OF GOVERNMENTS. 
 
 It is not to be overlooked, moreover, that the chief cost of our 
 war of secession is accruing now, not so much in the pension list 
 as in the usual war expansions and war aggrandizements of gov- 
 ernmental power first usurped in the name of patriotic neces- 
 sity, defended in the unrighteous decisions of courts, unrenounced 
 by Congress, and tolerated because customary by the people. 
 
 'Yet if all the expense of the Federal Government could be as- 
 sessed upon the income of two hundred and fifty multimillion- 
 aires who would never know the difference, and if all th >ir for- 
 tunes had been acquired otherwise than by free competition un- 
 der equal laws, there could be no compensation for wrecking 
 our American experiment of individual freedom by giving to 
 the oiHcers and taxgatherers of the Federal Government con- 
 tact with the contracts, business, or property of individuals 
 within the States. 
 
 In the official class our fathers saw the natural magnifiers of 
 government and expanders of its functional areas. They es- 
 chewed its systematic domination and espionage. They gave 
 the Federal taxgatherers no mission to draw up all things to a 
 central head at this Capitol. They virtually dissolved that Old 
 World institution, the standing army of tithe-takers. They es- 
 chewed direct taxes to punish thrift and penalize prosperity. 
 Th -y derived the revenues of the Federal Government from 
 taxes levied at the seaboard upon things of foreign origin 
 brought for consumption here. Thus avoiding eve ry risk of du- 
 plicated or overlapping taxation, they left to the undiminished 
 State, city, county, neighborhood authority, also undiminished 
 all the great sources of revenue. 
 
 Europeanizing this America, the lovely cynosure of nations, 
 would soon make it wortn no man's while to climb the sea wall 
 of our paradise. Its natural, almost unavoidable, invasion by 
 foreign traditions, unfamiliar to our vital air of perfect liberty, 
 is already great, continuous, increasing. While we welcome 
 the immigrant, let us keep safe the inestimable though unvalued 
 jewel of our great state. If we owe that which is unique in our 
 American freedom to that which is unique in the partition, the 
 limitation, the inhibition of government powers, let us now stand 
 fast for the confines of that sovereignty " within whose circuit 
 is Elysium." 
 
 THE PRACTICAL QUESTIONS. 
 
 The House bill created a deficiency in the revenues necessary 
 for the Government. 
 
 It then became the duty of the Senate Finance Committee to 
 1228
 
 26 
 
 supply that deficiency, which they proceeded to discharge. 
 What were the questions which presented themselves to that 
 committee at the outset of their endeavors and which now con- 
 front this Senate in its final action? 
 
 I conceive th^m to be these: 
 
 What imported articles, if tariffed, will best and soonest end 
 the growing Tre.i&ury deficit, and so remove a chief hindrance 
 to the release of capit.il and employ of labor'? Can one or more 
 be found from which revenue will be immediate, continuous, 
 sufficient, of unquestioned legality so as not to be delayed by 
 years of strife in the courts, of use and distribution, universal, if 
 possible, so that the harden may be least felt? Can the revenue 
 therefrom be collected in the lump at the seaboard, and final 
 payment made by t>'>,UOO.OOO consumers at the most convenient 
 time and way, namely, just before consumption in a small addi- 
 tion to its price? 
 
 Can the whole addition to the price of the tariffed article be- 
 yond its price if not tariffed, being all the tax, go to the Federal 
 Treasury, without abatement, stop the growing deficit and re- 
 lease the deadlock of our industrial energies? I would hazard 
 no steps in the mere revision of taxation except secure and solid 
 steps, each one justified by the result of the previous step, and 
 accompanied every one by the confidence of the mass of the peo- 
 
 Ele instead of by their dread and fear. If my counsels were 
 eeded I would surprise and satisfy the country by the conser- 
 vatism of our progress in revenue reform. The McKinley bill 
 lost the country to our opponents by its extreme features in one 
 direction, and we should avoid the opposite extreme. 
 
 TAX ON CONSUMPTION. 
 
 " Tax on consumption " is another current phrase that shuts off 
 light. It puts blinders on men and prevents their seeing how 
 many considerations should have weight in choosing a tariff 
 tax, and that if a tax be a tax on consumption, that is no reason 
 for rejecting it, even if there were twenty good reasons for re- 
 jecting it on other grounds. 
 
 All tariff taxes, and ninety-hundredths of all possible internal- 
 revenue taxes, are taxes on consumption. The time of consump- 
 tion varies. An anchor may take twenty years an orange two 
 minutes. Just as the correlative of buying is selling, just as the 
 counterpart of money is commodity, so the correlative of con- 
 sumption is production, and in each of these two correlatives is 
 the other s being, end, and aim. It is to consume that we pro- 
 duce: it is to produce that we consume. Neither process can be 
 stayed, yet a man live, or a state, or the race. 
 
 Whereabouts in the eternal round shall we tap for taxation? 
 
 How plain it is now, when a mere phrase no longer shuts off 
 vision, that for purposes of taxation toward the public expense 
 and general welfare, consumption should be tapped and not pro- 
 duction. Increased production of whatever is good and neces- 
 sary for consumption is palpably everybody's interest. Other 
 things being equal, price falls as production increases, making 
 consumption less costly. Wants are satisfied by production, and 
 nobody can contract himself out of everybody's similar interest 
 in its increase, 
 
 But there is no such universal and similar interest of every- 
 body in anybody's consumption. That is the individual's affair, 
 and his consumption offers the least injurious point of taxation 
 
 1228
 
 27 
 
 for him in every individual case. Another merit of taxes on 
 consumption is that they are surmounted in detail, and paid 
 at the will of the consumer in the enhancement of price. If 
 noted, they are self-assessed, with the least inconvenience at the 
 best time, in the smallest sum; or they are declined and avoided 
 without illegality. 
 
 If a thing were homogeneous, and its consumption were univer- 
 sal, if its bulk were considerable but its cost small, such qu ilities 
 combined would make that thing the most perfect distributor, 
 through voluntary consumption, of an equitable taxation. Assur- 
 edly in our Federal Government we may well reg ird a distribu- 
 tive equality as the best character of its taxation, leaving to 
 State, municipal, and local taxation exemptions of burdens which, 
 as varying from the general mass of our citizenship and prop- 
 erty, or for reasons apart from revenue, or for considerations 
 other than common and equal to all, local authorities with local 
 knowledge and closer watch-care for any exceptional purpose 
 may impose. 
 
 THE HOUSE VERSUS THB SENATE. 
 
 The Finance Committee, in their effort to modify the House 
 bill so as to realize a sujfitnency rather than a deficiency of rev- 
 enue, selected sugar as one of such articles deemed proper for 
 tariff taxation, and provided for a moderate duty thereon. I-do 
 notquestion the wisdom of their present action. But such con- 
 clusion should have been fo llowed by an elimination of the in- 
 come tax rendered doubly unnecessary by the imposition of a 
 sugar duty. 
 
 It is difficult to reconcile the House bill with correct princi- 
 ples of revenue reform or with the previously expressed senti- 
 ments of some of its authors. The cultured chairman of the 
 Ways and Means Committee [Mr. WILSON] in his article pub- 
 lished in the North American Review of January last, criticising 
 the McKinley bill, said as follows: 
 
 Raw sugars were our chief revenue-producing articles on the customs 
 list, and so It (the McKinley law) wiped out the duties upon them with the 
 Tirtuous cry of -'a free breakfast table for the workingmen." Both, these 
 taxes (tobacco and sugar] were in a just and proper senserevenut faxes. The to- 
 bacco tax should not have been touched. Decau.se it went directly into the 
 Treasury from the pocket of the taxpayer and was burdensome upon no one. 
 The sugar tax m'ght very properly have been reduced, but should not nave 
 been entirely abolished, because of all the Items In the tariff It carried the 
 largest proportionate amount of what the people paid into the Treasury. 
 
 Yet the House bill which bears Mr. WILSON'S honored name 
 actually followed the McKinley bill in rejecting a duty upon raw 
 sugars. 
 
 In that same article Mr. WiLSON mildly advocated a corporate 
 income tax, but did not favor an individual income tax. In 
 speaking of the latter he admitted that it would be " universally 
 evaded'' and ''easily lend itself to fraud, conce ilment. and per- 
 jury," and its administration would be lt necessarily accompanied 
 by some exasperating and some demoralizing incidents." He 
 favored a corporate income tax because ".sc/i a tax would not be 
 a tax upon individual thrift, energy, or enterprise, but in the main 
 upon the earnings of invested capital. 1 ' 
 
 Mr. WILSON, in his eloquent soeech in the House on February 
 1 last, admitted that he "had some doubt as to the expediency 
 of apersonal income tax at this time," and expressly stated that 
 he "did not concur in the policy of attaching an income tax to 
 the tariff bill." 
 
 1228
 
 28 
 
 Yet in spite of his own personal judgment and evidently Bin- 
 cere protestations, an individual income tax, which taxed not 
 only "invested capital" but also "individual thrift, energy, 
 and enterprise'' was actually attached to this tariff bill, and 
 Mr. WILSON was persuaded to support it. 
 
 HO CLAS3 SHOULD PAY ALL THE TAXES. 
 
 I have no patience with the demagogic clamor which is con- 
 stantly demanding that the rich shall pay all the taxes. 
 
 Those who thoughtlessly repeat this cry need to be reminded 
 that this Government is not a plutocracy, but a Republic. Here 
 manhood suffrage almost universally prevails, and property 
 qualifications for political positions of honor and trust are nearly 
 everywhere prohibited. The highest positions in the land are 
 open to the aspirations of the poorest and most obscure youth 
 anywhere to be found. 
 
 It is fitting that it should be so. But the poor man who owns 
 no real estate or personal property pays nothing directly toward 
 State, county, or municipal taxation nothing toward the free 
 schools which his children attend, nothing toward the mainte- 
 nance of the highways over which he travels, nothing toward the 
 expenses of the courts where his rights are vindicated and his 
 wrongs redressed, nothing for lighted streets, police protection, 
 public hospitals, jails, or almshouses, and nothing for the church 
 at which he worships, because here we have no established re- 
 ligion: and if it were not for custom-house tixation taxation 
 upon consumption he would pay not a farthing toward the 
 support of the Government which protects him and under which 
 he enjoys the blessings and privileges of a free and independent 
 citizen. 
 
 It is through this much-abused system of tariff taxation much 
 abused by its enemies, and misused or carried to extremes some- 
 times by its friends that we are enabled to equalize somewhat the 
 burdens of government. It may be safely asserted as an equitable 
 principle, involving no hardship to anyone, that citizens with- 
 out ownership of real estate or taxable personal property, con- 
 stituting the most numerous class in every community, and who 
 pay no State or local taxes, ought to contribute something toward 
 the expenses of the General Government under which they live; 
 and to enforce the performance of such patriotic obligation the 
 system of indirect taxation based on duties upon foreign imports 
 affords the least offensive method. 
 
 If the contention that the rich should pay all the taxes and 
 the poor be exempted therefrom is well foun led, then it may 
 well be urged that the rich should monopolize the suffrages and 
 offices of the country. 
 
 The very fact that every citizen is obliged to contribute some- 
 thing, no matter how little, toward the expenses of govern- 
 ment, whether he owns property or not, fortifies his right to the 
 elective franchise and augments his claim for political prefer- 
 ment. He should regard it as a privilege conferred upon him, 
 a, shield against political ostracism; it increases his dignity and 
 inliuence: and he naturally takes a keener interest in public af- 
 fairs. The true welfare of the community is subserved by this 
 system of indirect taxation which reaches all, but oppresses 
 none. 
 
 I am opposed to any income tax which wholly or in part pro- 
 poses to supersede this wise and useful method of taxation. 
 
 1228
 
 29 
 
 In the year 1875-'76 a commission of most distinguished aud 
 reputable gentlemen appointed by the governor of New York 
 reported to the Legislature of that State in favor of a scheme 
 of municipal government whereby only those who owned prop- 
 erty and paid local taxes should be entitled to vote for the mu- 
 nicipal officers vested with the control or disbursement of pub- 
 lic funds. 
 
 It was plausibly argued that citizens who contribute nothing 
 to the support of the municipality ought not in common fairness 
 to be permitted to control its improvements, to authorize its 
 public works, or to spend its revenues, while the class who pay 
 all the municipal taxes, if in the minority, are compelled to ac- 
 quiesce. The argument, if carried out to its legitimate conclu- 
 sion, would favor a plutocratic, rather than a democratic, form 
 of government, and additional weight would attach to it if citi- 
 zens who pay no local taxes should also be exempt from all Fed- 
 eral taxation. 
 
 It is a significant fact that the Constitution, which requires 
 noproperty qualification and recognizes manhood suffrage, should 
 at the s ime time provide for tariff taxation as a source of reve- 
 nue which is set apart exclusively as the property or function 
 of the General Government, and conveying the idea that such 
 suffrage and indirect tariff taxation were intended to be insep- 
 arable one to mitigate or to justify the other, 
 
 THE POPULATION VERSUS THE TAXPAYERS. 
 
 The comptroller of the city of New York semiofficially in- 
 forms me that the number of individual taxpayers in the city of 
 New York is about 109,000. Yet that city has a population of 
 1,801,7:59 according to the State census of 1892, and of 1,515,301 
 according to the Federal census of 1890. 
 
 The disproportion between taxpayers and population may not 
 be so large in some other cities, but it is believed that in almost 
 every city and section of the country the population is ten times 
 greater than the number of individual taxpayers. The fact that 
 nine-tenths of our population pay nothing directly toward State, 
 county, and local taxation adds force to the argument that they 
 should continue to be reached indirectly through tariff legisla- 
 tion. 
 
 NO NEED OT AN INCOME TAX. 
 
 The next point which I desire to submit is that the necessi- 
 ties of the Treasury do not require an income tax. This propo- 
 sition can be easily and clearly demonstrated. 
 
 The Secretary of the Treasury in his annual report estimates 
 that the amount needed for the support of the Government for 
 the next fiscal year will be $448,30o,789.93. He also estimates 
 that upon tlie basis of existing laws the revenues for the same 
 period will be as follows: 
 
 From customs $190,000,000.00 
 
 From internal revenue 160,000,000. 00 
 
 From miscellaneous sources 20,000,000.00 
 
 From postal service 84,427,748.44 
 
 Total estimated revenues 454,427,748.44 
 
 Permit me to observe at the outset that this (Wilson) bill as 
 it passed the House, discarded existing tariff revenue to the 
 amount of $73,680,418 80, as accurately figured by Treasury ex- 
 perts. Senator VOORHEES in his speech states the amount to 
 be $76,670,000, and for the purposes of this discussion we will 
 
 1228
 
 30 
 
 assume the latter amount to be correct. This large reduction 
 created a deficiency in the amount absolutely necessary to be 
 realized for the support of the Government. The Ways and 
 Means Committee recognized that fact and in their report to 
 the House accompanying the tariff portion of this bill declared 
 that they intended thereafter to provide " internal- re venue tax- 
 ation, which will make up any deficit of public revenue." (See 
 their report of December 19, 1893.} 
 
 Thereafter and before the bill passed the House, the income 
 tax ($30,000,000) an 1 an addition .il tax on spirits ($10,000,000) 
 were added, but even this increase left a Irg3 deficiency, ac- 
 cording to then official estimates. 
 
 Yet many ovor/e ilous friends and impatient newspapers de- 
 manded th.it the Senate should immediately pass this bill with 
 its conceded defects exactly as it came from the House, regard- 
 less of the embarrassments to the Government which it might 
 hereafter create. 
 
 With them a surplus or deficiency was an entirely immaterial 
 cons. deration. 
 
 The Senate Finance Committee, realizing the insufficiency or 
 inadequacy of this bill, proceeded to amend it by making provi- 
 sion for additional revenue. The able chairman of that com- 
 mittee, in his recent speech, said: 
 
 The criticisms which assailed the bill as it came from the House because it 
 created a d>lcincy in. the Treasury no longer apply. We present a measure 
 full freighted with revenue for every call th-vt can be made on the Republic 
 at horn j an 1 abroad, and with a surplus besides of $29,389,245. 
 
 According to this statement the bill has " jumped out of the 
 frying pan into the fire.'' From a deficiency there has arisen an 
 immoderate surplus. One extreme has been succeeded by an- 
 other. The committee made many changes, taking sugar, iron, 
 coal, lead, and other articles from the free listand making them 
 dutiable, and providing for a tax upon sugar estimated by offi- 
 cial experts to realize $41,822,02 J.til, and an additional tax on 
 spirits from which $10,000, 003 is anticipated. Yet, notwithstand- 
 ing these large additionsof re venue sources to the bill, the com- 
 mittee still retained the income tax. 
 
 Let us see how the figures now stand. Secretary Carlisle's 
 estimate in his annual report was as follows: 
 
 Expenditures. 
 
 Civil and miscellaneous $86.795.460.92 
 
 War 47,173.203.05 
 
 Navy 27.875,914.02 
 
 Indians 6,931. 156.61 
 
 Pensions 162,631,^70. 00 
 
 Interest 26,500,000.00 
 
 Postal service, etc 90,399,485.33 
 
 Total 448,306,789.93 
 
 Here are the revenues expected to be realized under this bill: 
 Receiptt. 
 
 Internal revenue (under existing laws) $160,000.000.00 
 
 Postal (under existing laws i 84.427,766.00 
 
 Miscellaneous (under existing laws) *. 20,000,000.00 
 
 Customs under pending bill as estimated by Treasury ex- 
 perts, inclu lintf $11. 822. 631.61 for sugar duties 163,331,000.00 
 
 Additional internal revenue to pending bill, as follows: 
 
 Income tax . 30, 000 003 00 
 
 Spirit* 20.000.000.00 
 
 Cards . 3,000,000.00
 
 31 
 
 Summary statement 
 
 Receipts M80, 788, ',66. OO 
 
 Expenditures 448,306.789.00 
 
 Balance 32,481,977.00 
 
 These figures thus show an excess of revenue over expendi- 
 tures of $;2,-HI,!)77, being $3,092,7 52 larger surplus than admit- 
 ted in Senator VOORHEES'S unofficial statement. 
 
 They establish the fact that the proposed income tax, esti- 
 mated at $30,000,000, is not required for any legitimate purposes 
 of the Government. 
 
 An amendment to the bill striking out that tax would still 
 leave a surplus of 82,481,977. 
 
 Besides, it is now apparent that the estimate of $162,631.570 
 for pensions contained in Mr. Carlisle's report was inaccurate, 
 and may be safely reduced to $140,000,000 or $145,000,000. Sen- 
 ator VOORHEES'S speech virtually concedes as much, and his 
 own statement of the sum required reduces the amount to $145,- 
 000,000 i see CONGRESSIONAL, RECORD, volume 26, No. 92. page 
 4157), being $17, 631, 570 less than previous estimates, which sum 
 added to the $32,481,977 surplus before mentioned makes a total 
 surplus of $50,113,547 under this bill as amended by the Finance 
 Committee. 
 
 Upon reflection it may be confidently asserted that the pension 
 expenditure for the next fiscal year will not exceed $140,000,000, 
 as there has been a steady decrease of late under the present 
 vigilant administration of "bur pension laws. The expenditures 
 for the first nine months of the present year have been only 
 $107, 151, 496, and at that rate for the remaining three months the 
 amount for the whole year will be only $142,858,661. A conserv- 
 ative estimate, therefore, would deduct the further sum of $5,000,- 
 OiX) (over and above the $17,631,570 previously deducted) from 
 the amount originally announced, which should be added to the 
 surplus already assured ($50,113,547), making a grand total of 
 $55,113,547. Mr. Edward Atkinson estimates that the amount 
 required for pensions for 1894-'95 will not exceed $135,000,000. 
 
 The situation, then, may be summarized as follows: 
 
 Receipts under Senate bill $480,788.766.00 
 
 Expenditures for nscal year 1895 425,675,219.00 
 
 Total surplus 55,113,547.00 
 
 Deduct income tax 30,000,000.00 
 
 Surplus without income tax 22, 113,547.00 
 
 If Mr. Atkinson is correct, then, $5,000,000 more may be 
 added to this surplus. 
 
 Two points should not be overlooked bearing upon the ques- 
 tion of increased revenues: First, that under these figures no al- 
 lowance has been made for the possibility of increased importa- 
 tions under reduced duties: second, no allowance has been made 
 for the probability of such increase under anticipated revived 
 conditions of trade. Neither of these important considerations 
 can well be ignored. 
 
 The estimates of importations anticipated under this bill are 
 based upon the actual importations during the last complete 
 fiscal year ending June 30. 1893. The extreme duties imposed 
 under the existing McKinley law during that year are alleged 
 to have largely prevented importations which would otherwise 
 have been received or at least been possible under lower duties. 
 
 1228
 
 Of course, enormous duties oftentimes styled prohibitory du- 
 ties tend to prevent importations, while experience has shown 
 that frequently the imposition of lower duties has increased the 
 revenues by materially increasing the importations. 
 
 Commercial depression naturally diminishes importations, as 
 it blocks the wheels of trade and invites economies of every 
 character. The latter half of the fiscal year 1892-'93 was largely 
 affected by the monetary panic, and it is not unreasonable to be- 
 lieve th it the business disturbances incident thereto may h ive 
 materially diminished the importations from what they other- 
 wise would likely have been. 
 
 No official nor semiofficial estimates have been furnished us 
 nor have I undertaken to make any figures at this time of the 
 increased revenues which may reasonably be anticipated under 
 this bill, as now amended, on account of the two considerations 
 which I have mentioned. It is sufficient, however, to declare 
 that large increases of revenue are probable, which will swell 
 the surplus to huge proportions if the income tax or the sugar tax 
 shall still be retained. Neither have I ventured to consider the 
 economies and reforms which are likaly to be instituted in the 
 various departments of the Government, and which are always 
 probable under a Democratic Administration, from which large 
 reductions in expenditures may be expected. 
 
 Mr. President, these figures which I have submitted speak for 
 them-el ves. They demonstrate that the only plausible ground 
 upon which the income tax was first sought to be imposed, to 
 wit, that it was actually needed to meet the necessities of the 
 Government, has been thoroughly exploded. 
 
 This is not my individual conclusion alone. The country so 
 regards it. 
 
 Mr. Edward Atkinson, of Massachusetts, a distinguished polit- 
 ical economist, in a recent article to the Boston Herald, in speak- 
 ing of the Senate amendments to this bill says: 
 
 The pretext that an income tax may be needed to cover a deficiency that 
 would otherwise occur, therefore, falls to the ground. 
 
 Concerning this tax, he then adds that 
 
 Economically considered, I deem it a war tax of last resort?vrhen all the 
 other sources have failed. 
 
 If in the face of these facts if in the light of these figures 
 if in spite of the honest and sincere opposition which this tax 
 naturally engenders from the people of that great section of the 
 country which I have the honor in part to represent on this 
 floor a people as patriotic, as loyal, as generous, and as philan- 
 thropic as those of any other section, I repeat if notwithstand- 
 ing these things which ought surely in common fairness to lead 
 to the elimination of this obnoxious feature of this bill, its re- 
 tention shall still be insisted upon by the unwise and misguided 
 and assumed champions of tariff reform in this Congress, and 
 defeat shall await the whole bill, let the responsibility fall upon 
 the heads of those where it properly belongs. 
 
 A DEFKNSB OF NEW YORK'S BUSINESS MHtf. 
 
 I listened the other day with considerable interest to the dis- 
 tinguished Senator from Indiana in his fierce denunciations of 
 the people in this country who have been fortunate enough to 
 accumulate a competence. He nearly exhausted the vocabulary 
 of abuse in the anathemas which he hurled against them. 
 
 He rebuked their " narrow and corroding selfishness," their 
 
 1228
 
 33 
 
 "dangerous pretensions and intolerable arrogance;" he described 
 their " brutal dictation:" he upbraided " their unjust, relentless, 
 unsparing, and insolent " conduct; he pictured their wealth as 
 the ' illegitimate offspring of governmental paternalism," and 
 characterized them as without "gratitude or love of country;" 
 he imputed to them an intention and willingness to commit per- 
 jury and other crimes "for which the convict stripes of the peni- 
 tentiary are the only punishment/' and then having summarily 
 adjudged them guilty without court or jury he declares them 
 to be ' fit associates for thieves, housebreakers, forgers, and cut- 
 throats." and not satisfied with this terrible humiliation which 
 he inflicted upon them, and notwithstanding his well-known 
 amiable and forgiving disposition, with one fell swoop he con- 
 signed them all " to everlasting hell." 
 
 Then, Mr. President, he calmly and seriously said to us, "I 
 am loth to say these things." He need not have given us that 
 assurance: of course, we all keenly realized it. We knew with 
 what reluctance he assumed his unpleasant task, and with what 
 lack of eagerness he embraced the afforded opportunity. Mr. 
 President, these violent and unseemly denunciations these 
 arguments, if they can be dignified as such may answer for the 
 hustings of Indiana, but I regret to hear them in the Senate of 
 the United States. 
 
 Notwithstanding this terrible arraignment of the men of 
 wealth, to which I have briefly alluded, I venture to speak a 
 few words in their defense. I speak more especially of the men 
 of means of my own State. I can not, of course, speak for those 
 of Indiana they may be all that they are painted by the senior 
 Senator from that State. While, however, I doubt that fact, I 
 have such respect for him and his statements that I can not 
 safely contradict him. The men of wealth of New York, as a 
 general rule, are among our best, most esteemed, and reputable 
 citizens. They are not the vile rascals they have been depicted, 
 and their riches have not been acquired by questionable means, 
 governmental favors, usury, nor extortion. 
 
 Some inherited their wealth from honorable ancestors, others 
 obtained it by fortunate investments: others by great business 
 ability, tremendous industry, and remarkable sagacity. They 
 have largely contributed to the greatness and glory of the 
 State, building up its industries, augmenting its commercial 
 supremacy, sustaining its finances, and assisting its great and 
 varied undertakings. 
 
 The strong and solid financial institutions which they control, 
 the great life and fire insurance companies which they manage, 
 the admirable loan and trust associations which they direct, the 
 magnificent lines of railroads which they operate, not only in 
 New York, but elsewhere, the splendid manufactories which they 
 conduct, wherein tens of thousands of working men and women 
 are employed in honest labor, the immense shipping interests 
 which they represent, the tremendous wholesale and retail es- 
 tablishments of trade which they maintain, and the hundreds of 
 other business enterprises of vast magnitude which they honor- 
 ably and successfully manage, are the evidences of their ability, 
 their genius, their prudence, and their integrity. 
 
 The institutions of learning which they have founded, of 
 which Cornell University, Vassar College, Cooper Institute, 
 Vanderbilt University are conspicuous instances; the public li- 
 braries which they have endowed, of which the Astor Library, 
 1228 3
 
 34 
 
 the Lenox Library, the Tilden Library are notable examples: 
 the free hospitals which they have instituted, of which the 
 Roosevelt Hospital, the Arnot-Ogden Hospital, and scores of 
 others throughout my State which do not now occur to me all 
 these benefactions attest their widespread and noble generosity, 
 and disprove the contemptible charge of their supreme il self- 
 ishness." 
 
 Whenever famine, pestilence, or fire has afflicted their coun- 
 trymen in any locality or section of the Union, the wealthy 
 business men of New York always speedily came to the rescue 
 and liberally responded. 
 
 In great political campaigns, when the life of political parties 
 has been deemed to be at stake, even Indiana and some portions 
 of the South have not refused assistance from the wealthy par- 
 tisans of New York. 
 
 When the nation's credit is in peril and funds are needed to 
 meet the daily wants of its Treasury, and it must borrow from 
 its citizens, where else except to the bankers of New York does 
 your Secretary of the Treasury with confidence apply? 
 
 When the country's very life was in danger, when the fate of 
 the Government hung trembling in the balance, when money 
 was sorely needed to defend the Union, what subscribers to the 
 nation's securities more quickly and cheerfully responded in the 
 hour of emergency than the moneyed men of my State? 
 
 Mr. President, I need say no more. This speaking in defense 
 of wealth is a new role to me. The record of my official life 
 shows that my public utterances as well as services have usually 
 been in other directions in defense of the poor, in vindication 
 of the oppressed, and for the amelioration of labor. I h ive no 
 entangling alliances nor particular sympathies with tho^e at 
 whom this income-tax scheme is principally aimed: they have 
 never been any especial friends of mine. But I trust that I am 
 fair-minded and broad-minded enough to defend any class of my 
 fellou'-citizens rich or poor, high or low, white or black, native 
 or naturalized whose fair fain is unjustly assailed, or whose 
 rights are threatened, and whose interests are endangered by 
 what I believe to be hostile and vicious legislation. 
 
 I have yet to learn that poverty is a cardinal virtue and that 
 wealth is an abominable crime. All classes have their rights, 
 and one class must not be permitted to encroach upon the other. 
 The demagogue who seeks to stir up class prejudices and class 
 resentments in order to win the gratitude or the applause of the 
 mischievous and the unthinking, who are essentially his dupes, 
 deserves only execrations at the hands of all right-minded men. 
 
 THE TILDEN INCOME-TAX CASK. 
 
 A momentsince I mentioned the Tilden library. This reminds 
 me of the fact that the distinguished citizen and Democrat 
 whose memory we all revere Samuel J. Tilden, one of the 
 wealthy men of New York who generously donated his millions 
 to the establishment of a great free public library a portion of 
 which fund, however, it was only deprived through the techni- 
 calities of the law was hi7nself the victim of the injustice, the 
 oppression, and the persecution p jrmissible under an income tax. 
 
 We have not forgotten the annoy tnces to which this vener- 
 able apostle of Democracy was subjected, the opprobrium which 
 he endured, the bitter litigations and prosecutions which he 
 encountered at the hands of a few unscrupulous political oppo- 
 nents vested with a little brief authority, in their pretended en- 
 
 1228
 
 35 A 000611306 
 
 foreement of the law, endangering his feeble health and embit- 
 tering his old age. 
 
 It was not enough that he had been deprived of the Presi- 
 dency, to which a majority of a quarter of a million of the popu- 
 lar vote had desired to elevate him deprived because of the 
 crimes of fraudulent and purchased returning boards in three 
 States, but he must be branded and denounced as a wealthy and 
 selfish politician seeking to fraudulently evade the payment of 
 his just share of governmental taxation. 
 
 And now. withinless than ten yearsafter his lamented death, we 
 are told by these new apostles of Democracy that this Populist 
 rider to a revenue tariff bill, with all the enormities and inquisito- 
 rial features which pertain to it, is the very quintessence of 
 modern Democracy, and without which all else is valueless. 
 
 THE TRUE ENEMIES OF TARIFF REFORM. 
 
 The enemies of tariff reform are those who imperil the pas- 
 sage of this bill by arbitrarily insisting upon the retention of an 
 income tax therein. They refuse to present a separate measure 
 embracing this feature. They even decline to fix any date one, 
 two, or three years when the income tax shall cease, but they 
 seek to incorporate and establish it as a permanent policy of the 
 Government. 
 
 They shut their eyes to the fact thatabeliever in tariff reform 
 is not necessarily a believer in an income tax. A tariff tax is 
 altogether a different matter from an income tax. They are 
 neither identical, homogeneous, nor consistent with each other. 
 Tariff reform means tariff reduction not tariff extinction nor 
 direct nor internal taxation. These widely divergent methods 
 should not be confused nor conglomerated. The first notable 
 effort for tariff reform since the war was embodied in the Mor- 
 rison bill; but th.ere was no suggestion of an income tax. 
 
 Then came the famous tariff message of President Cleveland, 
 which simply invited a reduction of tariff duties to prevent a 
 further surplus, but there was no recommendation for the res- 
 toration of war taxes, to wit, taxes upon incomes. Then fol- 
 lowed the Mills bill, which passed a Democratic House of Rep- 
 resentatives, and was distinctly approved by the national Dem- 
 ocratic convention of 1S8S, but nothing was heard of any income 
 tax. But now at this late day, after a third party has adopted 
 it as its shibboleth, we are told that it is the sine qua non of tar- 
 iff reform and true Democracy. I deny the right of any man, 
 without the sanction of a national convention, to add this new 
 tenet to the Democratic faith. 
 
 OUR DUTY. 
 
 Mr. President, I do not need to be reminded that it is the duty 
 of the present Congress to revise the tariff. I appreciate tha't 
 fact as keenly as any Senator here. We are pledged to that 
 course; the country expects it. We are pledged to a tariff for 
 revenue: we are not pledged to pass an income tax. We are 
 pledged to pass a tariff measure which will produce sufficient 
 revenue for the support of the Government, not one insufficient 
 for riLat purpose. 
 
 Vre have no moral right to deliberately discard seventy-six 
 millions of tariff revenue and thereby create a deficiency to be 
 supplied by other and more objectionable taxation. That is not 
 reform: it is folly, it is impotency, it is scarcely less than crim- 
 inal under the existing conditions of the country. It is experi- 
 
 1288
 
 36 
 
 menting with and hazarding all our vast and varied business 
 interests now demanding our watchful care. 
 
 MY POSITION BRIEFLY STATED. 
 
 I stand ready to support any reasonable measure for tariff re- 
 form framed within the lines and based upon the principles which 
 I have here partially indicated, and which were fully set forth 
 in my speech in opening the political campaign in Brooklyn on 
 September 19. 189J. I stand to-day where I stood then. I have 
 nothing to add and nothing to retract. 
 
 I will cheerfully vote for the Mills bill, and join with you in 
 making many material reductions of duties therein. I am ready 
 to waive all minor differences of details which do not involve a 
 question of principle. 
 
 Having spoken to-day especially upon the income-tax feature 
 of this bill, 1 reserve the expression of my views upon its other 
 features until near the close of the discussion. 
 
 CONCLUSION. 
 
 Mr. President, this is an important crisis in the history of the 
 Democratic party. The failure of tariff revision at this time 
 means the defeat, the demoralization, if not the division and anni- 
 hilation of our party. Moreover, it means, as we believe, injury 
 to the best interests of the country. Let tbose who insist upon 
 injecting into this bill this odious and un- Democratic feature of 
 an income tax a relic of war legislation pause and reflect upon 
 the possible consequences of their unwarrantable demands. 
 
 They should realize that it means the loss of the control of 
 this Senate, -now nearly equally divided between the two great 
 parties; it means the loss of the next House of Representatives: 
 it means the loss of the electoral votes of New York, New Jer- 
 sey, Connecticut, and probably every Northern State; and finally, 
 it means the loss of the next Presidency and all that it implies. 
 They should recollect that this income-tax feature is justly re- 
 garded in New York and many other Northern States as a 
 scheme of spoliation, an unwarranted sectional attack upon 
 their citizens of means. 
 
 They should consider whether there is anything about an in- 
 come tax so sacred, so desirable, so popular, so just, and so de- 
 fensible that its maintenance is worth the risk which they are 
 precipitating. Let them remember I860 and the ultra demands 
 then made upon the Democratic party, to which it could ncri hon- 
 orably accede; demands which led to our division and defeat; let 
 them remember the triumphs of our opponents, the civil war that 
 followed, the devastation, the suffering, the humiliation which 
 ensued, the military and carpet-bag governments which flour- 
 ished, the force bills which threatened, and all the incidents of 
 the terrible years which darkened our party's and our country's 
 history from 1860 to 1884, when, through wiser counsels, moder- 
 ate action, conciliatory methods, and restored confidence, we 
 were intrusted with power again; and, reflecting upon all these 
 things, let them say whether it is the part of wisdom, by the in- 
 sistence upon extreme demands, to imperil the success o our 
 party again, and thereby tend to retard the progress, diiJ" uisli 
 the glory, and endanger the best and highest interests of our 
 common country. 
 1228 
 
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