SI AC* 
 
 S INTERNAL REVENUE. 
 
 037 
 
 442 
 
 SPEECH 
 
 OF 
 
 HON. GEORGE D. WISE, 
 
 OF VIRGINIA, 
 
 IN THE 
 
 HOUSE OF REPRESENTATIVES, 
 
 Thursday, March 3, 1887. 
 
 WASHINGTON 
 1887.
 
 SPEECH 
 
 OF 
 
 HON. GEORGE D. WISE. 
 
 The House having under consideration a bill to modify the internal-revenue 
 system of legislation, and for other purposes 
 
 Mr. WISE said: 
 
 Mr. SPEAKER: This bill contains many important provisions, and, if 
 passed, will afford relief from many of the annoyances and hardships 
 of an odious system of taxation. So far from diminishing, I am satis- 
 fied that its effect would be to increase the revenues of the Govern- 
 ment by preventing prosecutions for trivial offenses. If gentlemen will 
 examine in this connection the letters from Mr. Durham, the First 
 Comptroller, addressed to Mr. Jones, United States attorney for the 
 western district of North Carolina, they will be convinced that large 
 sums of money are annually being taken from the Treasury for the pay- 
 ment of the costs of such prosecutions without compensating or bene- 
 ficial results. He tells us that the practice followed in issuing war- 
 rants for alleged violations of the internal-revenue laws in this district 
 resulted in bringing to the Treasury during the fiscal year ending 
 June 30, 1886, the sum of 265, and in taking therefrom the sum of 
 $1,807.41. 
 
 An examination of the accounts of United States commissioners and 
 deputy marshals reveals the existence of methods in the inauguration 
 of criminal proceedings which call loudly for legislative correction. The 
 provisions of this bill, which have for their object the extinguishment 
 of these practices, have been carefully considered and favorably reported 
 by the Committee on the Judiciary of this House, and it seems to me 
 that no one should halt in the opinion that they should be adopted. 
 
 The producer of leaf-tobacco is limited by existing statutes in the 
 disposition of his crop to licensed dealers, except that he may sell at 
 the place of production at retail directly to consumers, to an amount 
 not exceeding $100 annually. And he is forbidden even to issue as 
 rations or supplies to his laborers or employe's tobacco of his own growth 
 and raising in excess of 100 pounds in any special tax year, without 
 first having paid the special tax of a dealer in manufactured tobacco. 
 These restrictions work a great hardship to the tillers of the soil, and 
 should not be continued when there is no necessity for them. They 
 are especially injurious to the small farmers, who should be the objects 
 of the fostering care of the Government, instead of being subjected to 
 unfriendly and repressive legislation. 
 
 No citizen, except under peculiar circumstances, requiring the exer- 
 cise of such an extraordinary power, should be deprived of the right to 
 dispose of the products of his toil and labor as he pleases; and if this 
 internal -revenue system cannot be maintained without interfering with 
 the rights of ownership of private property, that fact is the best argu- 
 
 200,3106
 
 ment against its perpetuation. As the tax is paid by the manufacturer 
 of tobacco, I am unable to discover a reason 1'or the continuance of this 
 limitation upon the producer thereof. 
 
 While this bill is a step in the right direction, and will, as I have 
 said, afford relief from many unnecessary hardships and vexations, it 
 stops short of that full measure of relief for which my people have pe- 
 titioned. The people of the States in which the culture and manufact- 
 ure of tobacco are important industries are loud in their demands for 
 the abolition of the system of direct taxation known as the internal 
 revenue, which was resorted to with reluctance when the country was 
 in the throes of a gigantic civil war. 
 
 We have been deluged with a flood of petitions favoring action in 
 this direction, coming from t he best representatives of the industries and 
 the interests involved. These petitions were sent here not by moon- 
 shiners, of whom gentlemen speak contemptuously, but by men of large 
 experience and commanding influence, and they embody the sentiments 
 of an overwhelming majority of the people of the States where the 
 vexations and hardships inherent in the administration of the system 
 are felt. They come from gentlemen who have an intelligent appreci- 
 ation of the subject, and whose views and opinions are worthy of re- 
 spectful consideration. Their clamors for relief can not be silenced by 
 sneers or denunciation. 
 
 ' ' From the foundation of this Government taxes collected at the cus- 
 tom-house have been the chief source of Federal revenue," and such in 
 my opinion theyshould continue to be. Internal taxes have never been 
 resorted to, except when required by extraordinary emergencies, and 
 on all former occasions were repealed promptly when the necessity for 
 their imposition ceased to exist. They have never failed toarou.se a 
 feeling of discontent among the people. The first attempt to obtain 
 revenue by this method, authorized by the first Congress which assem- 
 bled under the Constitution, caused in the western counties of Penn- 
 sylvania what is known in history as the "whisky rebellion." The 
 spirit of resistance which it aroused was so violent and persistent as 
 to require an armed force for its subj ugation. 
 
 The present system was devised and put into operation during our 
 civil war, but not until nearly fifteen months after its outbreak. Even 
 then, when the requirements of the Government for money were most 
 urgent, and when a sufficiency of it for the equipment and supply of 
 troops could not be obtained from other sources of revenue, Congress 
 hesitated to resort to this method. It was feared that the imposition 
 of direct or internal taxation would create such discontent as to inter- 
 fere with the vigorous prosecution of the war. Twenty- two years have 
 passed since the termination of hostilities, and these internal-revenue 
 taxes remain, and there are many here unwilling even to make such a 
 modification of the statutes which authorize their collection as will 
 render them less odious and obnoxious. 
 
 The people are restless under the unnecessary exactions to which 
 they are subjected, and while their opposition has not been carried to 
 the extent of forcible resistance, their demands for corrective legisla- 
 tion are loud and deep. The day of their deliverance may be post- 
 poned, but this agitation for reform will continue until existing abuses 
 and evils shall have ceased to exist. Our attention has been repeat- 
 edly directed to the necessity for the reduction of the revenues of the 
 Government, which can only be accomplished by a thorough and radi- 
 cal revision of our fiscal arrangements.
 
 We are told by the Secretary of the Treasury in his last annual re- 
 port that under the operation of existing laws the proceeds of surplus 
 taxation amount to more than $100,000,000 per annum. The effect 
 of the continuance of this useless depletion of the earnings of the peo- 
 ple must be to paralyze business and cripple industries. If this annual 
 surplus should be kept locked in the vaults of the Treasury a panic, 
 would thereby inevitably be created, and the result would be wide- 
 spread ruin and disaster. This vast surplus can not be much longer 
 used in the extinguishment of our indebtedness without paying to the 
 creditors of the Government large premiums in the purchase of bonds 
 before the dates of their maturity. 
 
 Upon this subject the President in his annual message says that 
 
 The application of the surplus to the payment of such portion of the public 
 debt as is now at our option subject to extinguishment, if continued at the rate 
 which has lately prevailed, would retire that class of indebtedness within less 
 than one year from this date. Thus a continuation of our present revenue sys- 
 tem would soon result in the receipt of an annual income much greater than 
 necessary to meet Government expenses, with no indebtedness upon which it 
 could be applied. 
 
 The employment of this surplus in useless and unnecessary expendi- 
 tures is not to be thought of as an excuse for its continuance. There 
 is but one remedy for the evil, and that is to be found in the immedi- 
 ate reduction of taxation. 
 
 We have reached the point when something must be done to escape 
 the dangers close at hand. We will soon be confronted with the serious 
 and blighting consequences, which must inevitably follow, if some 
 action be not taken "to transfer our present and accruing proceeds of 
 surplus taxation from the Treasury vaults to the pockets of the peo- 
 ple." Hesitation is weakness and folly; and the policy of inaction is 
 criminal when the demands for money to be employed in productive 
 industries and commercial enterprises are so urgent. I beg to remind 
 my party friends upon this floor that we are in a large majority, and 
 that the people will hold us responsible for the failure to do something 
 to avert threatened evils. 
 
 In the platform upon which the present administration came into 
 power the Republican party was denounced "for having failed to re- 
 lieve the people from crushing war taxes," and the distinct pledge was 
 made to accomplish that result and "to purify the administration from 
 corruption. ' ' 1 warn you that our lingering in the policies and methods 
 which characterized the conduct and management of public affairs by 
 the Republican party will be pursued with whips of scorpions. Our 
 people have become accustomed to import duties, and they are endured 
 without a murmur, while on the other hand internal taxation produces 
 friction, and is regarded with feelings of hate and aversion. 
 
 The aggregate collections from this source amounted, in round num- 
 bers during the last tiscal year, to $117,000,000, which is less by 
 $8,000,000 than the surplus for the same period. If this odious system 
 is not to remain permanently as a part of our fiscal arrangements, then 
 the time has arrived when we can and, in my judgment, should move 
 in the direction of its repeal*. In assuming this position I place myself 
 in harmony with the settled policy of the Government from its founda- 
 tion and in accord with Democratic platforms since the war, and espe- 
 cially with those of our party in the States of Virginia, Pennsylvania, 
 New Jersey, Ohio, North Carolina, and West Virginia. 
 
 In this bill material modifications and changes are proposed by which 
 the system will be relieved of many of its irritating and oppressive
 
 6 
 
 features, but the financial situation will not be improved by its enact- 
 ment. The difficulties and embarrassments by which we are surrounded 
 will still remain to plague us. The people will still be left to stagger 
 under unnecessary burdens. Tobacco is the chief money crop of several 
 of the great States of the Union, and the continuance of the tax upon 
 it is injurious to the interests of their people. An excuse for its reten- 
 tion can not be found iu the necessity to make suitable provision for 
 the defense of the country, nor is it required for the preservation of the 
 faith of the nation to its creditors and pensioners. 
 
 If time permitted, many strong and urgent reasons for its immediate 
 abolition might be offered, but none more convincing than the bare 
 statement of the fact that the effects of the laws enacted and main- 
 tained to insure its collection have created and fostered monopolies. 
 They have operated to deprive many poor and deserving citizens of 
 their accustomed employment and to confer special favors upon the rich. 
 The gentleman from Iowa [Mr. HEPBURN] says, "there is no monopoly; 
 any man can secure the right to buy and sell if he chooses to." He 
 takes a very narrow view of the subject, and exhibits a paucity of 
 knowledge of it which renders his opinion of little value. "Any man 
 can secure the right to buy and sell," if he has the capital with which 
 to engage in the business. Let me place by the side of this declaration 
 the statement of the wholesale dealers and manufacturers of tobacco 
 and cigars of the city of Baltimore, which is, that 
 
 raciones wnicn are striving u> monopolize uie ousmess, ana in a great measure 
 they have succeeded. One renowned factory of smoking tobacco, not in Balti- 
 more, turns out millions of pounds a year, on which they have a profit of 20 
 cents a pound, or about 75 per cent, on cost of production. This is accomplished 
 through the internal-revenue tax law, as it turns the business into a sort of pat- 
 ent. The poor consumer buys on account of the picture on the package and the 
 
 \i so, in every case, lie must ouy ms pig 111 ine uag, sigui unseen. 
 Since the internal-revenue tax has been levied the tobacco business of Balti- 
 more has constantly decreased in importance. Formerly there were twenty to 
 thirty smoking-tobacco factories located in Baltimore; now there are but five 
 or six. The plug-tobacco commission business, once the pride notonly of Balti- 
 
 These are the utterances of men having knowledge of the subject of 
 which they speak derived from experience. Similar results have been 
 produced in Virginia and other States. But there are those who tell 
 us that tobacco is a luxury, and that the abolition of the tax upon it 
 is not to be thought of until we shall have conferred "upon the wage- 
 earners of the United States the boon of untaxed clothing." I am in 
 favor of a revision of the tariff, as my votes here show, but we must not 
 lose sight of the question at issue, which is, what shall be the sources 
 of revenue, the methods of taxation? 
 
 In speaking upon this subject Mr. Madison said that "the system 
 must be such a one that, while it secures the object of revenue, it shall 
 not be oppressive. Happy it is for us that such a system is within our 
 power, for I apprehend that both these objects may be obtained from, 
 an impost on articles imported into the United States." And in har- 
 mony with the views thus presented by that great statesman are the 
 declarations of our party platform, to which 1 have already referred,
 
 "that from the foundation of this Government taxes collected at the 
 custom-house have been the chief source of Federal revenue, and such 
 they must continue to be." 
 
 Tobacco may be a luxury; call it so, if you will; but I make the 
 assertion, without fear of successful contradiction, that in taxing it you 
 place upon the shoulders of wage-earners a heavier burden than is im- 
 posed by the taxation of any other article. It is the poor man's luxury; 
 the solace of his toil. It is in general use by the laboring classes, and 
 they will not be without it if it can be had. During our civil conflict 
 the soldiers of the Union were always found ready to give in exchange 
 for it clothing, or their rations of coffee and sugar. I know of no 
 greater luxury than a large bank account, ample tor the supply, not 
 only of the necessaries of life, but sufficient to enable its possessor in 
 the pursuit of pleasure to surround himself with all the allurements 
 which his fancy may suggest. There was a time when a luxury of that 
 kind was made to bear a portion of the burdens imposed for the sup- 
 port of Government. I refer to the tax on incomes, which was removed, 
 in 1870, nearly seventeen years ago. We did not hear then the cry 
 that this tax should remain until the duties on certain articles of gen- 
 eral consumption should be reduced. This income tax was obnoxious 
 because inquisitorial, and I beg gentlemen not to forget that that pre- 
 sents one of the chief points of objection to the whole system of in- 
 ternal-revenue taxation, 
 
 Blackstone, in his Commentaries, says: 
 
 The rigor and arbitrary proceedings of excise laws seem hardly compatible 
 with the temper of a free nation. For the frauds that might be committed in 
 this branch of the revenue, unless a strict watch is kept, make it necessary, 
 wherever it is established, to give the officers the power of entering and search- 
 ing the houses of such as deal in excisable commodities, at any hour of the day, 
 and. in many cases, of the night likewise. And the proceedings, in case of trans- 
 gression, are summary and Midden. 
 
 ******* 
 
 However, its " original establishment was in 1643, and its progress was gradual, 
 both sides protesting it should continue no longer than to the end of the war, 
 and then be utterly abolished. * * * But from its first origin to the present 
 time its very name has been odious to the people of England." It has been kept 
 up. however, to supply the enormous sums necessary to carry on the continental 
 wars of Europe. 
 
 The dispute arises as to the methods by which a sufficient income for 
 the requirements of the Government shall be obtained, and not as to 
 whether this or that article shall be taxed. When the work of a re- 
 vision of the tariff shut 1 have been entered upon I shall have something 
 to say upon that subject also. Its discussion would be out of place in 
 this connection. But I will add that I will approach its consideration 
 "in a spirit of fairness to all interests, and with the purpose not to in- 
 jure any domestic industries, but rather to promote their healthy 
 growth." Both parties are pledged to a revision, and it is demanded 
 both as a measure of justice to consumers and for the promotion of the 
 general industrial prosperity. 
 
 But believing that a national revenue sufficient for the requirementsof 
 the Government economically administered can be obtained from an 
 impost on articles imported into the United States and that internal 
 taxes are unnecessary and a prolific source of discontent, I am in favor 
 of the repeal of all laws authorizing their collection.
 
 APPENDIX. 
 
 (Extract from the CONGRESSIONAL RECORD of March 4, 1887.) 
 MODIFICATION OF INTERNAL-REVENUE LAWS. 
 
 Mr. HENDERSON, of North Carolina. Mr. Speaker, I submit the 
 resolution I send to the desk. 
 The Clerk read as follows: 
 
 Resolved, That the rules be suspended and that the following bill be passed : 
 A bill to modify the internal-revenue system of legislation, and for other pur- 
 poses. 
 
 The SPEAKER. The Clerk will report the bill. 
 The bill was read, as follows: 
 
 A bill to modify the internal-revenue system of legislation, and for other pur- 
 poses. 
 
 Be it enacted by the Senate and .House of Representatives of the United States of 
 America in Congress assembled, That the proviso contained in subdivision 6 of 
 Bection 3244 of the Revised Statutes of the United States, which reads as follows: 
 "Provided, That nothing in this section shall be construed to exempt from a 
 special tax any farmer or planter who, by peddling or otherwise, sells leaf-to- 
 bacco at retail directly to consumers, or who sells or assigns, consigns, trans- 
 fers, or disposes of to persons other than those who have paid a special tax as 
 leaf-dealers or manufacturers of tobacco, snuff, or cigrars, or to persons pur- 
 chasing leaf-tobacco for export," be, and the same is hereby, repealed. 
 
 SEC. 2. That section 3361 of the Revised Statutes of the United States, and all 
 laws and parts of laws which impose restrictions upon the sale of leaf-tobacco 
 by the producers thereof, or by guardians, executors, or trustees having: the 
 control of the land on which the same was produced, or by owners of land who 
 have received tobacco as rent from their tenants, and all laws and parts of laws 
 imposing penalties therefor, be, and the same are hereby, repealed; and none 
 of the persons or classes of persons above mentioned shall be deemed dealers 
 in leaf-tobacco or retail dealers in leaf-tobacco, or be subject to any special OP 
 other tax as such. 
 
 SEC. 3. That section 3255 of the Revised Statutes shall be amended by adding; 
 at the end of said section the following : 
 
 "The Secretary of the Treasury shall exempt all distilleries which mash five 
 bushels of grain or less per day from the operations of the provisions of this 
 title relating to the manufacture of spirits, except as to the payment of the tax, 
 which said tax shall be levied and collected on the capacity of said distilleries; 
 and said distilleries shall be run and operated without storekeepers or 'store- 
 keepers and gaugers.' And the Commissioner of Internal Revenue, with the 
 approval of said Secretary, may exempt any distillery or all distilleries which 
 mash over five and not more than twenty-five bushels of grain per day from 
 the operations of the provisions of this title relating to the manufacture of spirits, 
 except as to the payment of the tax, which said tax shall be assessed and col- 
 lected upon the capacity of the distillery so exempted, as hereinbefore provided. 
 And the said Commissioner, with the approval of said Secretary, may estab- 
 lish special warehouses, in which he may authorize to be deposited the product 
 of any number of said distilleries to be designated by him, and in which any 
 distiller operating any such distillery may deposit his product, which when so 
 deposited shall be subject to all the laws and regulations as to bonds, tax, re- 
 movals, and otherwise as other warehouses. The Commissioner of Internal 
 Revenue, with the approval of the Secretary of the Treasury, is hereby author- 
 ized and directed to make such rules and regulations as may be necessary to 
 carry out the provisions of this section : Provided, That such regulations shall 
 be adopted as will require that all the spirits manufactured shall be subject to 
 the payment of the tax as required by law." 
 
 SEC. 4. That section 3255 of the Revised. Statutes of the United States be amend- 
 ed by striking put all after said number and substituting therefor the following: 
 
 " The Commissioner of Internal Revenue, with the approval of the Secretary of 
 the Treasury, may exempt distillers of brandy made exclusively from apples, 
 peaches, grapes, or other fruits from any provision of this title relating to the 
 manufacture of spirits, except as to the tax thereon, when in his judgment it 
 may seem expedient to do so." 
 
 SEC. 5. That the provisions of an act entitled "An act relating to the produc- 
 tion of fruit-brandy, and to punish frauds connected with the same," approved 
 March 3, 1877, be extended and made applicable to brandy distilled from apple* 
 or peaches, or from any other fruit the brandy distilled from which is not noir 
 required, or hereafter shall not be required, to be deposited in a distillery war*-
 
 9 
 
 house: Provided, That each of the warehouses established under said act, or 
 which may hereafter be established, shall be in charge either of a storekeeper 
 or a storekeeper and gauger, at the discretion of the Commissioner of Internal 
 Revenue. 
 
 SEC. 6. That section 3332 of the Revised Statutes, and the supplement thereto, 
 shall be amended so that said section shall read as follows: 
 
 " When a judgment of forfeiture, in any case of seizure, is recovered against 
 any distillery used or fit for use in the production of distilled spirits, because no 
 bond has been given, or against any distillery used or fit for use in the produc- 
 tion of spirits, having a registered producing capacity of less than 150 gallons a 
 day, every still, doubler, worm, worm-tub, mash-tub, and fermenting-tub therein 
 shall be sold, as in case of other forfeited property, without being mutilated or 
 destroyed. And in case of seizure of a still, doubler, worm, worm-tub, ferment- 
 ing-tub, mash-tub, or other distilling apparatus of any kind whatsoever, forany 
 offense involving forfeiture of the same, it shall be the duty of the seizing officer 
 to remove the same from the place where seized to a place of safe storage; and 
 said property so seized shall be sold as provided by law, but without being mu- 
 tilated or destroyed." 
 
 SEC. 7. That whenever in any statute denouncing any violation of the internal- 
 revenue laws as a crime or misdemeanor, there is prescribed in such statute a 
 minimum punishment, less than which minimum no fine, penalty, imprison- 
 ment, or punishment is authorized to be imposed; every such minimum punish- 
 ment is hereby abolished ; und the court or judge in every such case shall have 
 discretion to impose any fine, penalty, imprisonment, or punishment not exceed- 
 ing the limit authorized by such statute, whether such fine, penalty, imprison- 
 ment, or punishment be less orgreater than the said minimum so prescribed. 
 
 SEC. 8. That no warrant, in any case under the internal-revenue laws, shall be 
 issued upon an affidavit making charges upon information and belief, unless 
 such affidavit is made by a collector or deputy collector of internal revenue or 
 by a revenue agent, nor unless such affidavit is first approved by the district at- 
 torney and written instructions given by him for the issuing of the warrant; 
 and with the exception aforesaid every such warrant shall be issued upon a 
 sworn complaint, setting forth the facts constituting the offense and alleging 
 them to be within the personal knowledge of the affiant; and no warrant shall 
 be issued upon the affidavit of a person other than such collector, deputy col- 
 lector, or revenue agent, unless the commissioner or other officer having juris- 
 diction shall indorse upon the warrant and shall enter upon his docket an ex- 
 press adjudication that the examination on oath of the affiant shows that there 
 is probable cause forchar^iiiK the person prosecuted with the offense. 
 
 SEC. 9. That whenever it shall be made to appear to the United States court 
 or judge having jurisdiction that the health or life of any person imprisoned for 
 any offense, in a county jail or elsewhere, for a period of orte year or less, is en- 
 dangered by close confinement, the said court or judge is hereby authorized to 
 make such order and provision for the comfort and well-being of the person so 
 imprisoned as shall be deemed reasonable and proper. 
 
 SEC. 10. That the circuit courts of the United States and the district courts of 
 the Territories are authorized to remove from office any commissioner appointed 
 or authorized to be appointed by said courts under sections 627 and 1983 of the 
 Revised Statutes. 
 
 SEC. 11. That all clauses of section 3244 of the Revised Statutes, and all laws 
 amendatory thereof, and all other laws which impose any special taxes upon 
 manufacturers of stills, are hereby repealed. 
 
 SEC. 12. All laws in conflict with this act are hereby repealed. 
 
 SEC. 1.3. This act shall be in force from and after the 1st day of April, in the 
 year 1887. 
 
 Mr. WILKINS. I demand a second. 
 
 The SPEAKER. The gentleman from Ohio demands a second, and 
 the Chair will appoint tellers. 
 
 Mr. HENDERSON, of North Carolina. I ask unanimous consent 
 that a second be considered as ordered. 
 
 Mr. WILKINS. I do not rise to oppose this bill, but simply to ask 
 an explanation of its provisions. 
 
 Mr. HEl'BURN. I object to a second being considered as ordered. 
 
 The Sl'EAKEK. The Chair will appoint tellers. 
 
 Mr. HEPBURN and Mr. HENDERSON, of North Carolina, were ap- 
 pointed tellers. 
 
 The House divided; and the tellers reported ayes 126, noes 38, 
 
 So the motion was seconded.
 
 10 
 
 The SPEAKER. Under the rules of the House thirty miuutes are 
 allowed for debate, fifteen minutes in support of and fifteen minutes in 
 opposition to the motion. The Chair will recognize the gentleman 
 from North Carolina [Mr. HENDERSON] in support of the motion and 
 the gentleman from Iowa [Mr. HEPBURN] in opposition to it. 
 
 Mr. HENDERSON, of North Carolina. Mr. Speaker, the internal- 
 revenue taxes are war taxes and ought to be abolished. Such a system 
 of taxation could never have been imposed upon the people of the 
 United States in a time of peace. The system is tyrannical, unjust, 
 undemocratic, and unrepublican. 
 
 This Congress has lost the opportunity of repealing any portion of 
 these taxes; the agitation of that question has been postponed until an- 
 other Congress shall assemble. But the whole system is doomed and can 
 not stand many years longer. The internal-revenue laws were never in- 
 tended as police regulations to secure the peace, good order, well-be- 
 ing, and advancement of society; but their purpose has always been to 
 obtain money due as taxes from the people to the Government. The 
 Government does not now need the money. Its Treasury is filled to 
 overflowing. The annual surplus is estimated to be $120,000,000. 
 This being the case, no necessity can possibly exist for using harsh, 
 vindictive, and extreme measures for the collection of taxes. 
 
 The internal-revenue system has been a prolific source of frauds and 
 perjuries. The American people all people who love and enjoy lib- 
 erty have a great horror and detestation for hired spies and informers, 
 who make a business of telling on their neighbors, so that they may 
 obtain from the Government bribes and fees or money in'devious ways 
 unknown to the public, or may gratify feelings of envy, hatred, malice, 
 and revenge. The laws should not tolerate the employment by the 
 Government of such shameless add treacherous midnight hirelings. 
 If the courts had the power to tax all such informers with the costs of 
 prosecutions, and to imprison them if the costs were not paid, this evil 
 would be soon abated. The judges in many districts have adopted 
 rules of court to prevent, as far as possible, under the law, oppression 
 of the people on the part of the officers, but the courts can not prevent 
 petty, frivolous, and malicious prosecutions, unless the law confers 
 upon them the power of taxing costs and imprisoning the originators of 
 such prosecutions, or unless the existing law shall be altered in many 
 of its harshest provisions. 
 
 As a xule the circuit courts appoint good men as United States com- 
 missioners, but sometimes the desire to make and multiply fees induce 
 some of these commissioners to issue warrants unnecessarily if not cor- 
 ruptly in hundreds of petty cases. And there are numbers of such 
 commissioners in office whom the judges believe to be corrupt men ; 
 and yet there seems to be no effectual or speedy way to have them re- 
 moved from office. 
 
 To give this House and the country an idea of what devices are re- 
 sorted to by corrupt or covetous commissioners and officials to make 
 fees, 1 insert here a letter from a United States commissioner to a deputy 
 collector of internal revenue: 
 
 UNITED STATES INTERNAL REVENUE, 
 
 DEPUTY COLLECTOR'S OFFICE, 
 SIXTH DISTRICT NORTH CAROLINA, 
 
 Henderson? file, June 17, 1885. 
 
 MTDEAK SIB: I send you some affidavits. Please sign and return to me imme- 
 diately, and greatly oblige me. I have seen some of the witnesses in the cases. 
 There is no doubt about any of them. 1 will not issue a warrant in any case that
 
 11 
 
 I do not know is a good one. Any case I send you to give me a warrant for 1 
 will always be sure of conviction. I was at Asheville the other day, but did not 
 get to see you. 
 
 I am, as ever, your friend, 
 
 W. G. B. MORRIS. 
 WILLIAM Yorxr;, 
 
 Deputy Collector, Asheville, 2V. C. 
 
 The following is the form of the affidavit referred to: 
 
 UNITED STATES OF AMERICA, 
 
 Western Dislric of Sorth Carolina: 
 This day personally appeared before me , a United States commis- 
 sioner, , and makeih oath that he is informed and believes that 
 
 Walker ITathby did on or about the 1st day of June, 188-, as well before as 
 since this date, engage in tWe business of illicit distilling, removing, and retailing 
 epirituous liquors without having complied with the law of the United States. 
 
 , Deponent. 
 
 Sworn to before me this day of , 188-. 
 
 , United States Commissioner. 
 
 The affidavit is to be signed and sworn to in blank iu unlimited num- 
 bers by the deputy collector, and the commissioner guarantees, in ad- 
 vance of a knowledge of any of the evidence, without having examined 
 a witness, and without having heard a word of explanation from the 
 defendant or his counsel, that the person to be prosecuted shall be 
 "surely convicted. " The prisoner is to be convicted first and tried after- 
 wards. I have heard of courts- martial organized to convict. United 
 States commissioners who act in the manner above indicated do much 
 worse. They guarantee to convict before the persons to be charged with 
 violations of the law are arrested or even known or identified. What 
 a mockery of law, of liberty, and of justice ! 
 
 I send to the Clerk's desk to be read two letters showing some of the 
 evils of the internal-revenue laws as they are enforced in the western 
 district of- North Carolina: 
 
 TREASURY DEPARTMENT, FIRST COMPTROLLER'S OFFICE, 
 
 Washington, D. C., November 29, 1886. 
 
 SIR : Referring you to rule 3 of " Rules of court to apply in revenue cases," 
 western district North Carolina, I would respectfully ask of you if you consider 
 the practice now followed in your district in issuing warrants for the arrest of 
 violators of internal-revenue laws by United States commissioners to be in com- 
 pliance with the spirit and letter of the said rule. 
 
 That your attention may be called more particularly to the practice referred 
 to, I will cite the matter of the commissioner whose account I have before me, 
 namely, J. W. Shook, United States commissioner, Pigeon Valley, N. C. Com- 
 missioner Shook has affixed to each fee-bill in his account acopy of the affidavit 
 getting forth the offense with which the accused is charged, and upon which, I 
 presume, warrant was issued. The said affidavits bear the following indorse- 
 ments, to wit: "After examining the complaint, I am of the opinion that this 
 case should be prosecuted" (signed by commissioner); also, "The commis- 
 sioner will issue a warrant upon this affidavit if in his opinion there is reason- 
 able grounds to believe the accused guilty" (signed by yourself as United States 
 attorney). 
 
 As you are well aware, there is in the Treasury Department a bureau whose 
 especial duty it is to see that the laws of the United States pertaining to the in- 
 ternal-revenue service are enforced, and to see that vio lalors of the said laws 
 are brought before the proper tribunal for trial. The court, I assume, appreci- 
 ating the peculiar functions of this bureau and its various officials, has seen fit 
 to promulgate the rule, above referred to, that its (the courts) officials might 
 not trench upon duties clearly incumbent upon another (an executive) branch 
 of the Government by acting as detectives, spying out violations and violators 
 of the said laws. 
 
 Your rights, however, as a representative of the Department of Justice, have, 
 in said rule, been respected in that you are therein "authorized to institute 
 prosecutions under the internal-revenue laws." 
 
 By this proviso I understand you, and you alone of the judicial officers, have 
 the authority to institute such prosecutions, and that you have not the right to 
 
 jfticer, however much you may value 
 
 delegate this power to any other judicial of 
 " his opinion " or discretion.
 
 12 
 
 f ou would appreciate more fully the necessity for a strict compliance with 
 an enformeiit of this rule, I have no doubt, if you have more time at your 
 disposal to devote to the examination of accounts rendered against the Gov- 
 ernment by the United States commissioners and deputy marshals thereby 
 noticing the number of warrants returned ''not found; " the number of defend- 
 ants "discharged " or found "not guilty; " and the number,\vhich having; been 
 held for court, you are constrained to nolle prosequi, or the court, they pleading 
 guilty, to impose only a nominal punishment. In either of these events the 
 United States fails to be benefited, or the evil sought to be abated in any way 
 remedied. 
 
 Heretofore this office has had occasion, in several instances, to call the atten- 
 tion of district attorneys to abuses existing in their several districts, and ha* 
 invariably received hearty support and co-operation in suppressing the same. 
 
 The abuses of authority by court officials, to which your attention is herein 
 called, are of a most grievous nature ; and, though not criminal in their bearing, 
 mulct the Government in an enormity of costs for prosecutions that are on their 
 face worthless. 
 
 I beg to suggest, therefore, that it is in your power to materially assist thi 
 office in the correction of flagrant abuses. I mo your hands has been intrusted 
 the attorneyship of a district that has been a great burden to the Government. 
 
 Many abuses having existed therein, I feel assured that your especial atten- 
 tion needs but to be called to the matter to elicit from you a most hearty co-op- 
 eration. 
 
 Very respectfully, M. J. DURHAM, Comptroller. 
 
 H. C. JONES, Esq., 
 
 United Stales Attorney, Western District North Carolina, Charlotte, N. C. 
 
 TREASUBY DEPARTMENT, FIRST COMPTROLLER'S OFFICE, 
 
 Washington, D. C., Januai-y 25, 1887. 
 
 SIB: Replying to yours of the 13th instant, also of the 17th, I inclose you a 
 copy of a letter addressed to the Attorney-General, also one to Hon. THOMAS D. 
 JOHNSTON, M. C.,and refer you to them as expressing the view and holding of 
 this office on the matter concerning which you write. 
 
 In addition I would cite you the following figures, as shown by vouchers now 
 on file in the Department, and your official report, as it appears in abstract in 
 the annual report of the Commissioner of Internal Revenue for fiscal year 1886, 
 pages 142-146. 
 
 First. From the vouchers filed by the United States commissioners it appears 
 that fees are claimed in 2.337 cases in which warrants issued during the fiscal 
 year 1886, the aggregate of fees claimed being $22,101.69. There was paid by the 
 United States marshal to witnesses on orders of commissioners, during fiscal 
 year, $10,873.45. If to this amount ($32,975.14) be added the ftes and expenses 
 of the United States marshal for serving the warrants, expenses endeavoring to 
 arrest, attendance before commissioners, &c., an approximate may be arrived at 
 as to the cost of prosecutions before commissioners' courts. These prosecu- 
 tions, as you well know, are, with few exceptions, against persons charged 
 with violations of the internal-revenue laws. 
 
 Second. From the abstract of your official report, above referred to, it appears 
 that you reported 587 criminal suits commenced during the fiscal year 1885-'86; 
 none of these cases being on information or indictment in the first instance, but 
 all against persons held to court by commissioners. These figures would indi- 
 cate that about 75 per cent, of the complaints filed before commissioners are for 
 some reason never prosecuted any further. Either they are dismissed, the war- 
 rants are returned " not found," or some disposition is made of the case indicat- 
 ing that it is too trivial to be prosecuted further. 
 
 Third. From the abstract, and from your letter of the 13th instant, it appears 
 that 465 criminal suits were terminated during the fiscal year 1886; 357 decided 
 in favor of the United States; 67 against the United States; and 41 were dis- 
 missed, abandoned, or consolidated. Of the 357 suits decided in favor of the 
 United States, fines and costs were paid in 37; the amounts paid to collectors 
 (per page 146, Report Commissioner Internal Revenue) being, fines, $265; costs, 
 81,897.41. In 163 of these 357 cases sentence was suspended. (Page 145, Report 
 Commissioner Internal Revenue.) 
 
 With tliese facts before me, I am driven to the necessity of concluding that a 
 very small percent, of the prosecutions begun before the commissioner are such 
 as would be instituted were the cases first examined into by yourself or an offi- 
 cial of the internal revenue. 
 
 To the end that these trivial prosecutions may be abated and this enormous 
 drain on the Treasury (without any adequate results) may be stopped, I ask that 
 you assist me in the rigid enforcement of the law (Rule 3). 
 
 Very respectfully, M. J. DURHAM, Comptroller. 
 
 H. C. JONES, Esq., 
 
 United States Attorney, Charlotte, N. C.
 
 13 
 
 Judge Durham, the First Comptroller of the Treasury, is entitled to 
 the thanks of the country for the comniou-sense view he has taken of 
 the matter and for his efforts to protect the citizen from oppression, 
 tyranny, and injustice, and the Treasury from paying extravagant, im- 
 proper, and unnecessary costs and fees. 
 
 Col. Hamilton C. Jones, the district attorney, to whom these letters 
 are addressed, is an able and distinguished lawyer and an honorable 
 gentleman. He is an excellent officer and is doing what he can, under 
 the existing law, to put a stop to the frivolous and petty prosecutions 
 referred to by Judge Durham. But there can be no certain cure for 
 the evils of the internal-revenue system except by substantial amend- 
 ments of the internal-revenue laws. The bill under consideration 
 although it does not go far enough is a step in the right direction, and 
 should pass this House without opposition or objection. It proposes 
 such beneficial modifications of the internal-revenue system as will re- 
 lieve the people from some of the most odious and irritating features 
 thereof. Sections 7, 8, 9, and 10 have been favorably reported to this 
 House by the Judiciary Committee, and the whole bill has received the 
 favorable report and approval of the Committee on Ways and Means. 
 
 In deference to that committee many provisions which I considered im- 
 portant have been eliminated from the bill, which has been framed with 
 a view to avoid every reasonable objection to its passage. 
 
 It is expressly directed in the proviso to the third section that such 
 regulations shall be adopted by the Treasury Department as will re- 
 quire that all the spirits manufactured shall be subject to the payment 
 of the tax imposed by law, so that the members of this House who are 
 opposed to a repeal or reduction of these taxes need not have any fears 
 on that score. A few clauses of the bill have been inserted on the rec- 
 ommendation of the Commissioner of Internal Revenue. These are: 
 
 1. That portion of section 3 which authorizes the Treasury Depart- 
 ment to establish special warehouses, in which may be deposited the 
 product of any number of distilleries, to be designated for that purpose. 
 
 2. The fourth section, which authorizes the Secretary of the Treas- 
 ury to extend the benefit of section 3255 of the Revised Statutes not 
 only to those who distill brandy made from apples, peaches, and grapes, 
 but also to distillers of brandy made from any "other fruits." 
 
 3. Section 5, which extends the provisions of the act of March 3, 
 1877, " relating to the production of fruit brandy," &c., to brandy dis- 
 tilled from "any fruit." The Commissioner says that the law, as it 
 stands, practically excludes all fruit from distillation except apples, 
 peaches, and grapes, and works a hardship in this respect which is en- 
 tirely unnecessary and prevents the collection of a tax which is desired 
 to be paid. 
 
 Sections 9 and 10 have been inserted at the suggestion of the district 
 judge for the western district of North Carolina, and these sections 
 authorize the judges to make reasonable provision for the comfort of 
 persons imprisoned in a county jail where their health or life may be 
 endangered by close confinement. Such power is conferred upon the 
 courts of the several States, and the United States ought to be as mer- 
 ciful as the States. Necessity and humanity both frequently require 
 the exercise of such power. There are a great many prisoners, especially 
 those from the mountains, who break down under close confinement, 
 and their health is thereby seriously impaired. The courts should 
 certainly be clothed with power to prevent and to relieve such suffer- 
 ing. These two sections also give the circuit courts express power to
 
 14 
 
 remove from office any commissioner appointed by said courts. The 
 power of removal should be ample and summary. United States com- 
 missioners are usually good men, but the power of a bad and corrupt 
 commissioner is incalculable. 
 
 The sections of the bill I will now proceed to explain are the ones 
 which propose a real reform and modification of the internal-revenue 
 system. Sections 1 and 2 remove all restrictions upon the sale of leaf- 
 tobacco by farmers, and permit them to sell to any persons, whether 
 licensed dealers or not. Under the existing law they can sell to none 
 but licensed dealers. This is a great hardship. As a rule the tobacco 
 farmers are men of limited means; they raise small crops, and they 
 lose much time and no little money in getting their crops to a good 
 and lawful market. 
 
 The nearest licensed dealer may have his place of business 30 or 40 
 miles away, and he may not have any competition ; so that after reach- 
 ing his destination the farmer frequently finds that he has carried his 
 crop to a bad market. His profits being exhausted by his trip he loses 
 heart and does not seek to better his fortunes by going to another mar- 
 ket, but returns home a sadder if not a wiser man, and certainly with 
 not any too good an opinion of a Government which imposes such bur- 
 densome, embarrassing, and unjust restrictions upon the sale of his 
 tobacco to say nothing of the tax while every other agricultural 
 product may not only be sold without any restrictions, but is free from 
 any tax whatever. 
 
 There is no justice in this and no government and no party can re- 
 tain for any length of time the good will of the people who are need- 
 lessly compelled to submit to such a vexatious and burdensome law. 
 The tobacco tax is not needed and should be abolished; but the tax 
 might be borne, unnecessary as it is, if the irritating and odious bur- 
 dens imposed by the laws regulating the sale of the unmanufactured 
 article were removed. 
 
 Section 3 abolishes storekeepers at distilleries which mash 5 bush- 
 els of grain or less per day, and requires the tax on spirits manufactured 
 there to be levied and collected on the capacity of said distilleries. As 
 a matter of fact, and the records show it, these distilleries have never 
 paid a greater tax than upon the minimum capacity of said distilleries. 
 The storekeepers, therefore, have never been of any real service to the 
 Government in collecting its revenues. Section 6 prohibits the de- 
 struction or mutilation of stills; and, in the same connection, section 
 11 repeals the special taxes upon the manufacturers of stills. There 
 are no features of the internal-revenue system more outrageous and de- 
 testable than the wanton ''cutting up " or mutilation of stills, and 
 pouring the poor man's "mash " upon the ground. Such property is 
 seized and destroyed by the revenue officers, in a spirit of vindictive 
 animosity, without apparent authority of law, under rules promulgated 
 by the Treasury Department. And there has never been any necessity 
 to justify such harsh measures. No good reason can be given why such 
 wanton and summary destruction and waste of property should not be 
 forbidden for the future. 
 
 Section 7 abolishes what are known as minimum punishments, 
 and gives a discretion to the courts to impose any punishment for the 
 violation of the internal-revenue laws not exceeding the limit author- 
 ized by the statute, whether such punishment be less or greater than 
 the minimum mentioned in the law. There are many cases where the 
 judge might properly impose a less sentence than the minimum pun-
 
 15 
 
 ishment allowed by law, and would do so if he had the power. This 
 section is intended to put an end to frivolous and malicious prosecu- 
 tions, and to authorize the judges to be merciful and generous as well 
 as just in the sentences they pass upon offenders, according to the cir- 
 cumstances surrounding each individual case. There is a harshness 
 and severity about the internal-revenue laws, which the judiciary have 
 long abhorred aud revolted against. In proof of this, I ask the Clerk to 
 read an extract from an opinion delivered by Mr. Justice Miller, in 
 the case of the United States vs. Ulrici. decided in the eastern district 
 of Missouri, in the year 1875, and published in 3 Dillon, 532: 
 
 It is very well understood, both by the courts and by the profession, as well 
 as by every one interested in the matter, that the collection of the internal-rev- 
 enue tax in this country has required a system of legislation for its enforcement 
 harsh beyond everything known in our history. And it is equally well under- 
 stood that, harsh as these measures are, they have been far from successful. Not- 
 withstanding the heavy penalties denounced against crimes which go to de- 
 fraud the Government of its revenue from internal taxes, and notwithstanding 
 the minuteness and particularity in the description of these crimes, and not- 
 withstanding all the aids which Congress has given by legislation to the enforce- 
 ment of the revenue laws, they have been very imperfectly executed, and that 
 the Government is cheated out of perhaps one-half of its revenue, especially 
 from the tax on whisky and tobacco. 
 
 Section 8 is the remaining provision to be considered. No warrant 
 is allowed to be issued upon an affidavit making charges upon "in- 
 formation and belief" alone, unless the affidavit is made by a collector 
 or deputy collector of internal revenue or by a revenue agent; and be- 
 fore the warrant is issued the affidavit must be approved by the dis- 
 trict attorney and written instructions given by him for the issuing 
 of the warrant. 
 
 Every other warrant must be issued upon a sworn complaint setting 
 forth the facts constituting the offense and alleging them to be within 
 the personal knowledge of the affiant; and in such cases the United, 
 States commissioner is required to indorse upon the warrant and to 
 enter upon his docket an adjudication that the examination, on oath, of 
 the affiant shows that there is probable cause for charging the person 
 prosecuted with the offense. The precautions required by these sec- 
 tions are not only necessary for the protection of the citizens from 
 vexatious,- petty, and frivolous prosecutions, but also to protect the 
 Treasury of the United States from being compelled to audit and pay 
 improper and fraudulent claims, fees, and costs. 
 
 The country is demanding a reduction of taxation and a reduction 
 of the revenues. Unnecessary taxation is unjust taxation; and to ex- 
 act from the people taxes beyond the requirements of the Government 
 economically administered is robbery under the forms of law. I hanre 
 favored in this body a reduction and revision of tariff duties. Both the 
 great parties are equally pledged to such revision. I have also favored 
 a reduction of internal-revenue taxation. But I am not willing to re- 
 fuse a reduction in one case because I can not get a reduction in the 
 other. I am always ready to vote for separate propositions looking 
 towards a reduction either of the tariff or of the internal revenue. If 
 I can not have all the reduction I want, I am willing to take such as I 
 can get. An annual reduction of $12,000,000 on the tariff and of $28,- 
 000,000 on internal revenue would have been better than no reduction 
 of tbe revenues. 
 
 Parties and factions are so constituted that I do not believe it possi- 
 ble to secure a reduction of an equal amount of taxation from the tariff 
 and the internal-revenues at the same time. My opinion is, and I be-
 
 10 
 
 lieve the people agree with me, that a revision of the tariff and of the 
 internal-revenue laws can be attained from time to time by reforming 
 the obvious and greater grievances of the two systems; and no man and 
 no party should refuse to make such reforms because all the changes 
 desired have not been attainable. I shall be glad to vote to " untax 
 the clothing of sixty mil lions of people " at every opportunity which may 
 be afforded me I shall also feel it to be my duty to relieve these same 
 people from the grievous burdens and oppressions of the internal-reve- 
 nue system of taxation. The people demand relief from the exactions 
 and oppressions of both systems. 
 
 Mr. HATCH. Will the gentleman allow me to simply correct one 
 statement in his remarks? He said that under the present law the 
 grower of tobacco could only sell it to a licensed dealer. I will call 
 the gentleman's attention to the liict that in the Forty-seventh Congress 
 an amendment to a bill which was considered in the House went over to 
 the Senate with a proviso giving the farmer the privilege of selling his 
 tobacco to the extent of $100 per annum, but no more. 
 
 Mr. HENDERSON, of North Carolina. Yes, sir; I was aware of 
 that. But the provision to which the gentleman refers has always 
 been inoperative and is practically a dead letter. It is at the end of 
 section 2 of the act of March 3, 1883, and reads as follows: 
 
 Provided, That farmers and producers of tobacco may sell, at the place of pro- 
 duction, tobacco of their own growth and raising at retail, directly to consumers, 
 to an amount not exceeding $100 annually. 
 
 Mr. HATCH. And I want to say in this connection the paragraph 
 in this bill removing all restrictions on the sale of leaf tobacco is suffi- 
 cient to command my approval and my active and earnest support for 
 the bill, and I hope every gentleman on this side of the House will 
 vote for it and every gentleman on the other side also. 
 
 Mr. JOHNSTON, of Indiana. On that one point I will agree with 
 the gentleman, and if you will strike out all of the rest of the bill we 
 will all join yon in voting for it. 
 
 Mr. HENDERSON, of North Carolina. I reserve the remainder of 
 my time. 
 
 Mr. HEPBURN. Mr. Speaker, in my opinion this is much more im- 
 portant than the time chosen for its consideration would seem to indi- 
 cate. I think that it would produce very marked changes in the reve- 
 nue collections of the Government, and the bill ought to be entitled 
 "a bill for the relief of moonshiners." The purpose of it and the 
 main purpose in my judgment is to remove all restrictions upon'their 
 illegal traffic. 
 
 Mr. GROSVENOR. Let me ask the gentleman a question. 
 
 Mr. HEPBURN. Certainly. 
 
 Mr. GROSVENOR. Ought not the title be amended still further by 
 adding "and to carry out the pledges of the Democratic party made 
 in 1884 to the moonshiners of the mountain districts of the South?" 
 [Laughter.] 
 
 Mr. HEPBURN. Mr. Speaker, the main purpose in my judgment 
 of the promoters of this bill is to remove the watchful eye of the Gov- 
 ernment from the smaller distilleries of the country. He would be 
 willing, I take it, the gentleman who is now urging the passage of this 
 bill, to strike out every other clause if he could only secure that one 
 that removes the watchfulness of the storekeeper from these country 
 distilleries, the four hundred of them that are, or were a little while 
 ago, in the State of North Carolina alone. It looks to me as if that
 
 ought not to be done. What possible protection is there for the Gov- 
 ernment in the collection of the revenue if you remove the watchful- 
 ness of the storekeeper ? 
 
 As to the provision with regard to leaf tobacco. I do not know that 
 that is very important; although there ,-eems lo be no necessity for it. 
 The gentleman from North Carolina [Mr. HKXDEKSOX] tells us that 
 it is to permit the small raiser of tobacco to dispose of his crop conven- 
 iently. The law permits him now to sell to the extent of one hundred 
 dollars' worth. 
 
 Mr. BRADY. In a year. 
 
 Mr. H KP1JURN. The complaint was made in the Forty -seventh Cou- 
 gres< that neighbors could not exchange a single roll of tobacco with- 
 out making themselves liable to the penalties of the law: and in their 
 interest and at the earnest solicitation of gentlemen representing to- 
 bacco growing districts the modification I have spoken of was made; 
 so that now to the extent of one hundred dollars' worth there is no re- 
 straint on them as to the sale of their product. 
 
 Mr. SKINNER. One hundred dollars for a whole year. 
 
 M# HEPBUKN. Of course, for a year. 
 
 Mr. BRADY. And there is a monopoly now on the purchase of to- 
 bacco. 
 
 Mr. HEPBURN. Oh, we heard the changes rung on that six years 
 ago about the monopoly there was. There is no monopoly. Any man 
 can secure the right to buy and sell if he chooses to. There is no re- 
 straint on any individual, and whatever there is in the way of requir- 
 ing these sales to be made to licensed dealers is in the interest of the 
 Government. How are you going to protect the interests of the Gov- 
 ernment or collect the taxes if there is not some one who must have 
 knowledge of the quantity raised ? 
 
 Mr. JOHNSTON, of North Carolina. Does the gentleman from 
 Iowa not know that this tax is never collected till the tobacco comes 
 to the hands of the manufacturer and is manufactured? 
 
 Mr. HEPBURN. That, in my judgment, ought not to be changed. 
 I believe it is wise to leave that as it is. 
 
 I will only say further at present that this bill in its entirety has 
 never been considered by any committee. It is a sort of patchwork; a 
 little taken from one committee and a little from another, and a great 
 deal that has never had consideration by any committee. 
 
 I yield three minutes to the gentleman from New Jersey [Mr. BUCH- 
 ANAN]. 
 
 Mr. BUCHANAN. lam not particularly in love with the provisions 
 of our internal-revenue system born of the necessities of the war. I am 
 one of those who believe that when the exigency is passed which gave 
 occasion for its existence, it also should have passed away. Our inter- 
 nal-revenue taxes are in fact the only remaining war taxes that we have. 
 
 As regards the first portion of the bill, it seems to me that it is not sub- 
 ject to any serious objection. It does seem to me that when a farmer 
 raisi s tobacco he should be allowed to dispose of it without any tax 
 being imposed on that particular product. And had the bill stopped 
 at that point I should have given my voice and vote heartily in favor 
 of it. 
 
 But unfortunately the bill does not stop at that point. It seeks by 
 indirection to repeal the internal-revenue system as applied to the prod- 
 uct of distilled spirits. I say by indirection, because, while it leaves 
 WISE 2
 
 18 
 
 the tax on the distiller, it so removes the safeguards which the statute 
 of to-day has placed around the production of that article as to practi- 
 cally make that statute valueless. It provides, in the first place, that 
 all distilleries mashing five bushels and less per day would be exempt 
 from the internal-revenue tax. I ask you if there is not there a door 
 wide open for fraud. It also provides that distilled spirits made of cer- 
 tain articles shall be exempt from taxation. There is another door 
 wide open for fraud. In certain cases it removes the supervision of 
 the Government storekeeper. That opens another door wide for fraud. 
 And so you go on through the bill, and you find that those provisions 
 that from time to time have been enacted, recommended by the Com- 
 missioner of Internal Revenue as absolutely necessary to the due and 
 perfect carrying out of the Law taxing distilled spirits, are either re- 
 moved or so essentially modified as to be of no earthly use whatever. 
 
 Mr. COWLES. Will the gentleman permit me to interrupt him ? 
 
 Mr. BUCHANAN. I have only three minutes. The gentleman 
 can make his speech in the time of the other side. If I had ample 
 time I would yield amply. 
 
 The SPEAKER. The" time of the gentleman from New Jersey [Mr. 
 BUCHANAN] has expired. The gentleman from Iowa [Mr. HEPBURN] 
 has seven minutes of his time remaining. 
 
 Mr. HEPBURN. I reserve that time. 
 
 The SPEAKER. To whom does the gentleman from North Carolina 
 [Mr. HENDERSON] -yield? 
 
 Mr. HENDERSON, of North Carolina. I yield three minutes to the 
 gentleman from Kentucky [Mr. BEECKINRIDGE]. 
 
 Mr. BRECKINRIDGEj of Kentucky. Mr. Speaker, this bill is com- 
 posed of sections all of which except one have been in substance reported 
 to the House by the Committee on Ways and Means or the Committee 
 on the Judiciary. The first sections of the bill have no other purpose 
 than to widen the market of the producer of leaf-tobacco by taking off 
 the limitation which now exists and which prevents him from selling 
 any larger amount than $100 per annum, except to a person who has 
 taken out a license as a retail dealer in leaf- tobacco, or to a manufact- 
 urer, or for exportation. So that the first part of this bill gives to the 
 producer of tobacco, to his executor or administrator, if he dies before 
 the crop is ready for sale, or to the guardian, if the producer be a 
 minor, the right to sell his leaf-tobacco to whomsoever he pleases. The 
 other sections of the bill are taken in ipaiasimis i-crbis from a bill reported 
 unanimously by the Committee on the Judiciary (H. R. 7894), and they 
 provide substantially that the warrants for violations of the internal- 
 revenue law shall beobtained at the request of thecollectors or deputy 
 collectors of internal revenue. 
 
 Mr. REED. Was not that voted down by the House? 
 
 Mr. BRECKINRIDGE, of Kentucky. That has never been voted 
 down. 
 
 Mr. REED. Or a similar proposition made by you? 
 
 Mr. BRECKINRIDGE, of Kentucky. No. The bill provides that 
 the judge of the court in which a prisoner is convicted and sentenced 
 to imprisonment fora period of less than one year shall, upon its being 
 shown that the prisoner is in bad health, provide for his imprisonment; 
 and it also provides that the courts which have the power to appoint 
 commissioners shall have power to remove them. 
 
 The next provision of the bill is taken from House bill 8327, reported 
 unanimously by the Committee on Ways and Means, and is, in sub-
 
 19 
 
 stance, that all distilleries which mash 5 bushels of grain per day, or 
 ess, shall be taxed upon their capacity, and that all under a capacity 
 of 25 bushels per day may be so taxed in the discretion of the Treas- 
 ury Department. The object is this: Brandy distilleries of certain 
 sizes are now taxed in that way, and it is supposed that the change will 
 relieve the Government of some live hundred officers and some $300,- 
 000 of expenses. It is to be done under regulations made by the Sec- 
 retary of the Treasury 
 
 The SPEAKER. The time of the gentleman has expired. 
 
 Mr. CABELL. I yield the gentleman one minute. 
 
 Mr. BRECKINRIDGE, of Kentucky. I am much obliged to the 
 gentleman. I say, Mr. Speaker, this is proposed to be done upon the 
 idea that it will not only not diminish, but that it will increase the inter- 
 nal revenue, because it will introduce into the system the plan now 
 adopted exclusively in foreign countries by which the taxation is based 
 upon the capacity of the still. Whether the still runs or not, it is 
 taxed upon its capacity. It can make so much; it can make only so 
 much; it has to pay on that capacity. 
 
 The fourth provision embraced in this bill is that the stills which are 
 now, under the law, destroyed by the officers who seize them, shall not 
 be destroyed but shall be sold by a judgment of the court. That is, 
 that the person who is held to be an offeader shall, before his property 
 is destroyed, have his day in court. That is the whole bill. 
 
 The SPEAKER. The time of the gentleman has expired. 
 
 Mr. HENDERSON, of North Carolina. I yield one minute to the 
 gentleman from New Jersey [Mr. McAnoo]. 
 
 Mr. McADOO. Mr. Speaker. I shall heartily support this measure; 
 and I am glad that the Committee on Ways and Means appears dis- 
 posed to support the bill in its present sha.pe, for I regard it as tanta- 
 mount to a confession that the system of collecting internal-revenue 
 taxes is iniquitous. This bill will remove from that system many of 
 the most odious features of the espionage now exercised and give to the 
 growers of tobacco and the small distillers of the country the freedom 
 to which they are entitled as American citizens. 
 
 Mr. Speaker, this bill brings before the House and the country the 
 whole question as to the wisdom of continuing internal-revenue war 
 taxes in time of profound peace. Without stopping here to state my 
 views as to these taxes, I want to briefly notice the most specious ob- 
 jection made to their removal. Those who favor a substantial measure 
 of free trade with other countries and those who are protected in liquor 
 and tobacco monopolies immediately cry out as against the abolition 
 of these taxes that we should tax home-made luxuries instead of 
 foreign-made necessities; American alcohol instead of English flannel, 
 American tobacco in place of Spanish pig-iron. This cry is intention- 
 ally unfair, and exposes the aims of those who give vent to it in press 
 and forum. Demand ibr the repeal of the internal revenue rests 
 primarily on the fact that the whole system is un-American and 
 utterly unsuited to republican government. A tax law that has to be 
 enforced in the homes of our own people at the muzzle of breech-load- 
 ing rifles can not be defended in this country. It is, and has been in 
 all our history, a constant source of irritation and annoyance. No law, 
 even in England, is so detested as the internal-tax system. There, in 
 past years, open revolt and bold frauds have followed its execution. 
 Therefore, whence this rather mildewed and somewhat tiresome cry of 
 opposition? Principally, as I have said, from free-traders and mo-
 
 20 
 
 nopolists. The free-traders assume to fear that morals will suffer if the 
 tax is taken off tobacco and whisky by the cheapening of these articles. 
 In this they differ somewhat from the great manufacturers of these 
 articles, who, presuming that the cheapening of these stimulants is the 
 object sought, immediately tell us that taking off the tax will not benefit 
 the consumer so far as price is concerned. It would, however, improve 
 the quality of the liquor ordinarily sold, but this, I suppose, would be 
 a great crime to free-trade morality. Quite singular, too, the professed 
 and radical temperance people oppose the tax, because, in their opinion, 
 it strengthens the traffic in stimulants. Now, leaving out the question 
 of whether these stimulants ar a necessity to many people, or whether 
 taking off these taxes would lessen their price and increase their use, 
 we can not get away from the main objection to them, which is that in 
 our country direct or internal taxation is unpopular, and that indirect 
 custom-house taxation has been, is, and always will be the American 
 system. As far as the morale of the question is concerned I am certain 
 no more tobacco would be smoked orliquordrank than is now, and that 
 a great many millions of dollars would remain with the people and a 
 heavy burden and oppression be removed from our farmers and people 
 generally. 
 
 The next phase of the objection is the cry to take the tax off neces- 
 saries. The necessaries here meant are those made abroad. We success- 
 fully manufacture all kinds of necessaries, including cloth and pig-iron, 
 in this country, but there is no internal tax upon them. They are free 
 all over this great continent called the United States of America. Our 
 people who make and use them live better and higher and in an entirely 
 different social and political state than those who make and use them 
 in Europe. If the tariff tax represents the difference in cost of produc- 
 tion between the two countries it protects American labor. If below 
 it fails to protect; if above it cheats labor for capital; hence the neces- 
 sity betimes of careful revision. 
 
 Take the tax off necessaries of foreign make? Let us see. Cham- 
 pagne is a luxury except, perhaps, at the gorgeous free-trade dinners 
 given by the rich importers of New York, Chicago, and Boston and 
 we as yet make little of it in this country. American labor has little 
 interest in its taxation or freedom. Now a coat is something we nirtn- 
 ufacture here and all use. Here is a foreign-made coat, and, by the 
 way, not a very neat-looking product, and here is one of American 
 manufacture. Now, you propose to cheapen the foreign coat in our 
 home market, and compel the American to compete as to price, and 
 you say you can do this and undersell the foreigner, and yet pay your 
 American workmen the highest wages in the world. " Go. hie thee to 
 a nunnery," or to the Patent Office, and 'take out letters on this most 
 extraordinary discovery. High wages and low prices? Ninety-five 
 per cent, ot human labor in the coat, and you propose to pay for it the 
 highest price in the world, and then undersell the cheapest price given 
 anywhere. Millions of our people are engaged in making articles of 
 necessity. The protective features of the tariff are retained because 
 they make these articles, not because they use them. 
 
 This the working people thoroughly understand. Iteration of catch 
 words in the press and oracular utterances of selfish foreign agents and 
 speculative theorists do not mislead them. What you really mean to 
 do is to reduce wages; to reduce unfair profits I am always ready, but 
 to pull down labor, and finally, with ruined manufactures, leave our- 
 selves undefended against the combinations of English and other
 
 i 21 
 
 foreign capitalists I am opposed now and forever. This is not a polit- 
 ical issue. Men in both political parties differ on this question. In 
 some States both parties entirely agree from local and business causes. 
 Many of the leading and staunchest Republican newspapers and men 
 in the Northwest favor free-trade. Many of the New England manu- 
 facturers and people, jealous of the tremendous growth of Southern 
 industries, are foolishly for free-trade. But the American people taken 
 as a whole are overwhelmingly in favor of a judiciously- levied tariff 
 as the sole source of national income. Can the Democratic party now 
 in power formulate a correct measure of revenue revision? Undoubt- 
 edly. It has no hobbies. It is a broad, unsectional party. The ex- 
 tremists, whether protectionists or free-traders, must no longer con- 
 sider this question personal property, for purposes of political agitation 
 and personal aggrandizement, but must give way to conservative, patri- 
 otic men who are neither hobbyists nor lobbyists, but broad-minded 
 American men in hearty sympathy with all the people of the whole 
 country. 
 
 I only notice now this threadbare, factional objection to honest rev- 
 enue reform. When this question comes more directly before the 
 House, as it will, I will avail myself of the opportunity to consider the 
 whole subject from what to me is a loyal American and common sense 
 view; pausing only to say that a country which could not be enticed or 
 deluded into the arms of the free- trade Delilah can meet the open bluster 
 of a mock Sampson threatening ruin and panic unless the Treasury 
 is unloaded in the interest of foreigners and their American agents. 
 The dropsical Treasury will be relieved without stampeding the people 
 or harming the humblest farmer, artisan, or laborer in our country. 
 
 In connection with this question, I will put before the House and the 
 country these letters, which speak for themselves: 
 
 SPEAKER'S BOOM, HOUSE OP REPRESENTATIVES, 
 
 Washington, D. C., January 31, 1887. 
 
 GENTLEMEN: In accordance with the understanding between us yesterday 
 afternoon, I have to-day consulted with the Democratic members of the Com- 
 mittee on Ways and Means in the House of Representatives for the purpose of 
 ascertaining whether or not some measure for the reduction of taxation can be 
 agreed upon which will receive the support of all our political friends in the 
 House, and I am directed to request you to submit at your earliest convenience 
 for our consideration some definite proposition. 
 
 There is pending upon the Calendar of the House a bill (No. 9702) introduced 
 during the last session by Mr. RANDALL, which proposes legislation upon the 
 subjects of the tarift'and the internal revenue, and within the la't few days we 
 have been furnished with a copy of a bill which appears to be intended as a sub- 
 stitute to the one now pending, which also relates to both the subjects men- 
 tioned above. Whether you desire to make one or both of these bills or some 
 other measure the basis of our action we are not advised, and being anxious 
 to make every effort in our power to secure harmony and concert of action upon 
 these important subjects, we respectfully submit the foregoing. 
 Yours, respectfully, 
 
 JOHN G. CARLISLE. 
 
 Hon. SAMUEL J. RANDALL, Hon. GEORGE C. CABELL, and others. 
 
 MR. RANDALL WILLING. 
 
 HOUSE OF REPRESENTATIVES UNITED STATES, 
 
 Washington, D. C., February 1, 1887. 
 
 DEAR SIR: Your communication of January 31, in pursuance of a previous 
 understanding respecting an effort to reach a concurrence on some measure for 
 the reduction of revenue, is now received. 
 
 The bill you refer to as a modification of or substitute for House bill 9702 of 
 last session, embracing both tariff and internal-revenue tax reductions, la the 
 measure which the friends with whom we are acting submit for consideration.
 
 22 
 
 These gentlemen are prepared to consider in a friendly spirit, and with a view 
 of uniting the party on a revenue-reduction measure, any modification of the 
 proposed bill which the friends of other measures may have to present. 
 I inclose copy of bill referred to. 
 Yours, very respectfully, 
 
 SAMUEL J. RANDALL, 
 GEORGE C. CABELL, 
 
 For selves and others, 
 Hon. JOHN G. CAHLISLE, 
 
 Speaker House of Representatives. 
 
 SPEAKER'S ROOM, HOUSE OF REPRESENTATIVES, 
 
 Washington, D. C., February 3, 1887. 
 
 GENTLEMEN: Your favor submitting for our consideration the bill recently 
 prepared as a modification of pur substitute for House bill 9702, introduced 
 by Mr. RANDALL at the last session of Congress, was received by me late in the 
 afternoon day before yesterday, and was at once submitted to the gentlemen 
 mentioned in my first communication. 
 
 We have considered the measure as carefully as its comprehensive character 
 and the limited time at our disposal would permit, and herewith submit it, to- 
 gether with the modifications and changes which, in our opinion, are necessary 
 in order to do it acceptably, as a compromise measure to those who desire to 
 secure material reductions in tariff taxes. 
 
 You will observe that we propose to add several articles to the free-list and to 
 strike out of the bill every provision which increases the rajtes of duty now im- 
 posed by law upon imported goods. Theseincreasesarenumerousandinsome 
 cases very material, as will be seen by the memorandum hereto appended. In 
 our opinion the existing financial condition of the Government and the people 
 does not demand, and would not even excuse, an increase in the rates of taxa- 
 tion upon any article embraced in our tariff or internal-revenue laws, and we 
 can not, therefore, agree to support any measure which has that effect. 
 
 We propose also to strike out of the bill all provisions abolishing the internal- 
 revenue tax on manufactured tobacco, snuff, and cigars, weiss beer, fruit brandies, 
 and reducing the tax on distilled spirits trom 90 cents per gallon to 60 cents, mid 
 the provision abolishing the tax on alcohol for use in the artsaiid manufactures. 
 In lieu of these repeals and reductions we propose to rep"eal all statutes and 
 parts of statutes imposing restrictions upon the sale of leaf tobacco by planters 
 and farmers, and to so amend the internal-revenue laws as to dispense with the 
 employment of gaugers and storekeepers at distilleries which mash 5 bushels 
 of grain or less per day, and to permit such distilleries to pay tax only upon their 
 surveyed capacity. 
 
 We also propose to so amend the internal-revenue laws as to prevent the de- 
 struction of stills and other apparatus seized for alleged'violations of the in- 
 ternal-revenue laws, and so as to prevent the issuing of any warrant for alleged 
 violation of those laws unless the affidavit therefor is first approved by the dis- 
 trict attorney and written instructions given by him for the issuance of the 
 warrant. 
 
 In lieu of the administrative part of the bill submitted to we propose to 
 substitute the bill introduced by Mr. Hewitt, as finally revised and corrected at 
 the Treasury Department and heretofore agreed upon by the Committee on 
 Ways and Means, but not yet reported. 
 
 We find, upon examination, that the substitute which we recommend relates 
 alone to the administrative features of the law, while that part of the measure 
 submitted to you by us increases the rates of taxation. While we submit the 
 accompanying modifications of the bill referred to us in the sincere hope that it 
 will meet the approval and secure the united support of our political friends, 
 yet in case it should not be agreed to by you and the gentlemen with whom you 
 are acting, we respectfully submit the following alternative propositions : 
 
 First. If the reduction of internal-revenue tax upon distilled spirits is to be 
 made a condition upon which you and the gentlemen acting with you will con- 
 sent to the reduction of tariff taxes, then we shall insist that the rate of taxation 
 shall be the same upon all kinds of distilled spirits. 
 
 Second. If the repeal of the internal-re venue tax upon manufactured tobacco, 
 snuff.and cigars, in whole or in part, is to be made a condition upon which you 
 and tin- gentlemen with whom you are acting will be willing to agree to a re- 
 duction of tariff taxation, then we shall insist that in the same bill an equal 
 amount of reduction shall be made in the revenue derived from customs, and 
 that this reduction shall be made upon such articles as those with whom we are 
 acting shall indicate. 
 
 Third. We are willing to submit the measure which you have referred to us 
 to a caucus of our political friends for its consideration, all parties to be bound 
 by such action as it may take upon the subjects to which this bill relates.
 
 23 
 
 Fourth. In case none of the suggestions hereinbefore made are accepted by 
 you and the gentlemen with whom you are acting, we are willing at any time, 
 upon reasonable notice, to support a motion to go into the Committee of the 
 Whole on the state of the Union for the consideration of House bill 9702. in- 
 troduced by Mr. RANDALL at the last session of Congress and now on the 
 Calendar. 
 
 Very respectfully, 
 
 JOHN G. CARLISLE. 
 Hon. SAMUEL J. RANDALL, Hon. GEORGE C. CABELL, and others. 
 
 HOUSE OF REPRESENTATIVES, WASHINGTON, February 5. 
 
 DEAR SIR: At the instance of many Democratic members of the House, we 
 appeal to you most earnestly to recognize, on Monday next, some Democrat who 
 will move to suspend the rules for the purpose of giving the House an oppor- 
 tunity of considering the quest ion of t lie total repeal of the internal- re venue taxes 
 on tobacco. Many Republican members, we have reason to believe, are anxious 
 to make such a motion. We believe the country is ready for the repeal of these 
 taxes, and that a large majority of the House will so vote when an opportunity 
 occurs. For a Republican to make the motion would give the Republican party 
 all the credit accruing therefrom, and would almost certainly cause the loss to 
 the Democracy of not less than two Southern States at the general election in 
 the year 1888. This is an isolated proposition, and we believe will command 
 more votes than any other measure pending before the House looking to ward 
 a reduction in taxation; and favorable action on this proposition will not in- 
 terfere with other efforts that are being made to reduce the burdens of the 
 people. 
 
 Yours, respectfully, GEORGE D. WISE. 
 
 JOHN S. HENDERSON. 
 SAMUEL J. RANDALL. 
 Hon. JOHN G. CARLISLE, 
 
 Speaker of the House of Representatives. 
 
 MR. CARLISLE'S REPLT. 
 SPEAKER'S ROOM, HOUSE OF REPRESENTATIVES, 
 
 Washington, February 7, 1887. 
 
 GENTLEMEN: Your favor of the 5th instant requesting me to recognize some 
 Democrat "who will move to suspend the rules for the purpose of giving the 
 House an opportunity of considering the question of the total repeal of the in- 
 ternal-revenue tax on tobacco," was duly received and has been carefully con- 
 sidered. 
 
 A week ago, in compliance with the request made by you and other gentle- 
 men, I consulted fully with the Democratic mem bers of the Committee on Ways 
 and Means for the purpose of endeavoring to formulate some measure for the 
 reduction of taxation which would meet the approval of our political friends, 
 and enable us to accomplish something practical in that direction during the 
 present session of Congress. The bill which you then submitted for their con- 
 sideration proposed legislation upon both branches of our revenue laws, and on 
 the 3d instant it was returned to you with such modifications and changes as 
 were necessary in order to make it acceptable to the gentlemen to whom it had 
 been submitted. 
 
 In order, however, that our efforts to secure reduction of taxation might 
 not fail on account of our inability to agree upon a measure in advance, we at 
 the same time submitted certain alternative propositions, some one or more of 
 which we hoped might be acceptable to you. Among other things we proposed 
 to submit the entire subject to a caucus of our political friends, with the under- 
 standing that all parties would abide by the results of its action ; and in case 
 that course was not satisfactory to you, we informed you that we would at any 
 time, upon a reasonable notice, support a motion to go into Committee of the 
 Whole on the state of the Union for the purpose of considering House bill 
 9702, introduced by Mr. RANDALL at the last session. That bill relates to inter- 
 nal revenue, as well as tariff taxes, and proposes to repeal the entire internal- 
 revenue tax on manufactured tobacco, snuff, and cigars. We have received no 
 response to that communication, and I consider that it would not be proper, 
 under the circumstances, for me to agree to a course of action which would 
 present for the consideration of the House a simple proposition for the repeal 
 of the internal-revenue tax on tobacco, snuff, and cigars, to the exclusion of 
 all other measures for the reduction of taxation. 
 
 Sincerely hoping that some plan may yet be devised which will enable the 
 House to consider the whole subject of revenue reduction. 
 I am, very truly, yours, 
 
 J. G. CARLISLE. 
 
 Hon. GEORGE D. WISE, Hon. JOHN S. HENDEESON. Hon. SAMTTEL J. RANDALL.
 
 
 24 
 
 \ 
 
 WASHINGTON, February 8, 1887. 
 
 DEAR SIR: We regret exceedingly that you could not see your way clear to 
 give recognition 011 yesterday to some Democrat to enable him " to move to 
 suspend the rules for the purpose of giving the House an opportunity of con- 
 sidering the question of the total repeal of the internal-revenue tax on tobacco." 
 Your refusal to give this recognition, together with your letter of the 7th in- 
 stant, deserves more than a passing notice. If two-thirds or more of the House 
 are in favor of such repeal it was a grave re-ponsibility for you to oppose suehs 
 large majority of the Representatives of the people. Assuming, however, for 
 the sake of the argument, that the "friends of th proposition constitute a less 
 number than two-thirds, their strength is certainly such that they ouulu tohave 
 been permitted to test the senseof the House upon thequestion. especially .since 
 the country is watching with intense interest the action of the House in respect 
 thereto, and the constituents of a large number of the members of the House 
 have been urging them to obtain.it" possible, a consideration of this subject. 
 
 We do not wish to be misunderstood. We earnestly desire from a ] arty 
 standpoint that recognition should have been given to a Democrat to make the 
 motion, but we would vote cheerfully for the proposition whether made by a 
 Democrat or by a Republican. 
 
 You assume in your letter to us that we ignored your communication of the 
 3d instant, and had deliberately failed to make a response thereto. Our friends 
 did not have an opportunity of considering that communication until Friday 
 evening, the 4th instant. It was of such a character as to require more than a 
 formal reply. We called at your hotel the next day, Saturday, but, through no 
 fault of yours or ours, we did not succeed in obtaining an interview until the 
 day after. 
 
 We believed that the friends of the repeal of the tobacco tax were so strong 
 in the House that we would save to the oppressed tax-payers of this country an 
 annual reduction of taxation to the extent of 28,000,000 if the motion for repeal 
 could be made in the House on Monday of this week, the latest day when such 
 a motion, to be effective under the rules, would'be in order during the Forty- 
 ninth Congress. The motion, if made during the last six days of the session, 
 would almost certainly be too late to secure favorable consideration for the 
 question in the Senate. 
 
 We did not anticipate refusal of recognition for the purpose intended. We 
 understood you to say to us verbally that if you gave to any one of our friends 
 the desired recognition, fair play all round would require you to give other 
 Democrats an opportunity to make a like motion to pass some distinct propo- 
 sition having a relation to a reduction of the tariff duties. To this we assented. 
 You instanced as one such proposition the putting of salt on the free-list. We 
 think that a revision of the tariff and of the internal-revenue laws can be at- 
 tained from time to time by reforming the obvious and greater grievances of 
 the two systems, and that we should not refuse to make sueh reforms because 
 sweeping changes have not been practicable. 
 
 The country is expecting to obtain from this Congress relief from the grievous 
 burdensof taxation. If some of us can not get all we want we should take what 
 we can get. Our single proposition for the repeal of the tax on tobacco was not 
 intended and can not fairly be construed as intending to exclude from the con- 
 sideration of the House "all other measures for the reduction of taxation." We 
 wished to obtain consideration for that proposition, but we were not pressing 
 for the reduction of the internal-revenue taxes to the exclusion of other meas- 
 ures for the revision and reduction of the tariff. 
 
 A Democratic caucus can not successfully deal with " the whole subject of rev- 
 enue reduction" at this late s^age of the session. That suggestion comes too 
 late. If the caucus could have controlled the legislation of the Forty-ninth 
 Congress from the beginning the country might have been much better off. If 
 the House was considered competent to deal with the silver question, with the 
 pension question, and with the oleomargarine question, free from the d'ctation 
 of a Democratic caucus, we think it ought to be competent to deal -with the ques- 
 tion of a reduction of taxation. The caucus ought not now to be invoked to 
 justify a policy of delay and non-action on this subject. 
 
 We sincerely hope "some plan may yet be devised which will enable the House 
 to consider the whole subject of revenue reduction " and revision " in a spirit of 
 fairness to all interests," and in accordance with the letter and spirit of the plat- 
 form of the national Democratic party adopted at the convention held at Chi- 
 cago in 1884; and we assure you that we are ready to meet any of our Demo- 
 cratic associates who are prepared to treat with us on such basis. 
 
 JOHN S. HENDERSON. 
 GEORGE D. WISE. 
 SAM. J. RANDALL. 
 
 Hon. J. G. CARLISLE, 
 
 Speaker of the House of Representatives.
 
 25 
 
 QESTLEMEN: Your communication returning substitute for House bill 9702, 
 which was submitted for the consideration of yourself and those holding 
 similar views respecting tariff revision, as a basis of compromise, with a view to 
 the passage of some measure to reduce the revenues, has been received, accom- 
 panied with various proposed additions and modifications, and, alter consulta- 
 tion upon the matters and suggestions therein contained, we respectfully sub- 
 mit the following in reply: 
 
 The gentlemen present at our recent conference, representing States South, 
 West, and North, were led to hope that the way hail finally been opened for an 
 agreement on a measure that could be generally supported by our political 
 friends, and we sincerely regret, in view of the importance of the adoption by 
 this Congress of some measure that would materially reduce the revenues and 
 pi-event the further accumulation of a Treasury surplus, that differences so wide 
 as appear in your communication should still exist. 
 
 It was hoped that a basis of compromise could be reached without requiring 
 of any one a sacrifice of principle or of convictions entertained on the subject 
 of tariff' and internal taxes. To do this it is evident that those things respecting 
 which radical differences exist in the minds of men must be excluded from a 
 bill intended as a compromise measure. It was believed there could be found 
 room inside of these limits for an agreement on a list of articles to be remitted 
 to the free-list as well as upon many on which the tariff' could be reduced, 
 ^hereby effecting a material reduction of the revenues without injuring or en- 
 dangering any important industries or impairing the earnings of labor in this 
 country. It is believed yet that such a measure ought to be agreed upon and 
 carried" through the House at this session. 
 
 As to the items in the proposed bill on which it is claimed that an increase in 
 the tariff' would result, we have to say that the apparent increase arises in most 
 instances from a change from ad valorem to specitic duties, made in accordance 
 with recommendations from the Treasury Department. The principal object 
 in making duties specific where they are now ad valorem is to prevent the de- 
 ception and dishonesty practiced by undervaluation r and while, in fixing what 
 is deemed to be fair specific equivalents, and apparent increase may arise, it is 
 believed to be apparent only and not real, as shown in the following references 
 to the several articles referred to in your letter. 
 
 However, on all these matters, inasmuch as the proposed bill is not intended 
 to be a revision of the tariff, but a bill for the reduction of revenues and the cor- 
 rection of certain inequalitiesonly, we think there will be no difficulty in agree- 
 ing either to strike out of the bill such articles, or to reduce the proposed rates 
 so as to insure no increase in the actual duties in any case. A careful examina- 
 tion of the list referred to shows, we think, that except as to a very few articles 
 you are in error in the statement that the duty is increased. 
 
 1. Coal-tar dyes. The proposed rate is no more than the equivalent of the 
 existing rate based upon actual tests of importations as entered at the custom- 
 house. As it is well understood that these articles are generally undervalued, 
 the rates proposed are really a considerable reduction of the present rate if the 
 same was honestly collected. 
 
 2. Insect powder. By reference to the reports of the Bureau of Statistics you 
 will see that two rates of duty are not collected on this article (which is not 
 enumerated in the tariff) namely, 10 per cent, and 20 per cent.; whereas the rate 
 we propose is substantially the equivalent of 10 per cent, only, and is therefore 
 a reduction. 
 
 3. Logwood and other extracts. These include logwood now paying 10 per 
 cent, and sumac, hemlock, and'other extracts now dutiable at 20 per cent. The 
 specific rate per pound proposed in the bill is the equivalent of about 14 per 
 cent, of the aggregate entered value of all these articles. 
 
 4. Antimony. The specific rate is substantially the equivalent of the existing 
 rate. 
 
 5. Castile soap. AVhile the rate proposed according to the values reported by 
 the Bureau of Statistics is about 1 per cent, only above existing rate, it is con- 
 siderably less than that rate upon the article when correctly appraised. 
 
 6. Horses, cattle, hogs, and sheep. The rates proposed on horses, cattle, and 
 hogs equal 12 per cent., 20 per cent., and 5 per cent, respectively, on the en- 
 tered value of these animals free and dutiable, and are, therefore, less than the 
 existing rate imposed on those which now pay duty. The rate on sheep is 3 
 
 8er cent, higher than that now imposed. The average rates proposed on all 
 ve animals are less than the present rate. 
 
 It is understood, however, that your objection ia made chiefly against our 
 proposition to make all these animals dutiable; and yet there is incorporated 
 In the administrative measure you propose to us a provision limiting the exemp- 
 tion on such animals to those only of superior race or blood designed to im- 
 prove the stock of the United States. This, if properly enforced, would impose 
 a duty on nearly all the animals now imported free, and at a higher rate than 
 we propose.
 
 20 
 
 7. Beans and peas, green or dried. The rate proposed is equal to only about 
 14 per cent, of the entered value, while these articles not being provided for by 
 name, it is a question of dispute whether they are dutiable at 20 percent, ns gar- 
 den seeds, or at 10 per cent, as vegetables, both rates being collected at the 
 various custom-houses. In any event the rate proposed is not in excess of 10 
 per cent, of the true average value during the past year. 
 
 8. Beans and peas preserved. The specific rate proposed is less than the exist- 
 ing rate of 30 per cent, ad valorem honestly collected. 
 
 9. Ginger and ginger root, and citron candied, &c. The rate proposed on 
 these articles is considerably less than the existing ad valorem rates, even at 
 the entered value of the merchandise. 
 
 10. Olive oil. With respect to this article it is to be said that while the pro- 
 posed rate on salad oil is apparently somewhat higher than the existing rate, 
 it is well known that the entered value does not represent the true value on 
 account of under-invoicing and large reduction for charges, &c.; so that the rate 
 we propose is not in reality above 25 per cent., and 1 is believed to be less. At 
 the same time the rate we propose on the oil for manufacturing purposes is only 
 about 11 per cent, of the value as entered last year. 
 
 11 Oranges, lemons, and limes. The proposed rate on oranges in whole or 
 half boxes is the same as at present. This scale of rates is, however, extended so 
 as to include all the sized packages in which this fruit is usually imported, with 
 an additional rate of 81.75 per l,0t;0, instead of 81.60 in one case, and 20 percent. 
 in another. There is no substantial increase in the duty, but the rates are made 
 uniform so as to prevent evasions now so common and vexatious. The rates 
 proposed on lemons are a considerable reduction from existing rates, except as 
 to those imported in bulk, which it is well known are brought in in fraud of the 
 revenue. The rate on limes is not increased. 
 
 12. Grapes. The rate proposed is not more, but is really less than the exist- 
 ing rate, if fairly collected on the true purchase price of the article. 
 
 13. Cherry juice, prune juice, &c. The rate we propose on this merchandise 
 is for the purpose of excluding the importation. Tliis is also the manifest pur- 
 pose of the provision on page 11 of your administrative bill. 
 
 14. Cement. The rate proposed on cement is based on the value of the article 
 in barrels as it is bought and sold, and on that basis is less than the existing 
 rate. 
 
 15. Fish glue and isinglass. On this article the rate we propose is less by 2 
 per cent, than the existing rate upon the entered value, as shown by the statis- 
 tical reports. 
 
 16. Hamburg edgings, &c. While you have accepted the provision for silk 
 and leather gloves which we have adopted as recommended by Assistant Sec- 
 retary Fairchild you reject his proposition incorporated in our bill for Hamburg 
 edgings, embroideries. &c., the rates on which, as stated by him to thechairman 
 of the Committee on Ways and Means, are now greater than now imposed ; but 
 are, according to the statements of experts, considerably less. 
 
 17. Jute, hackled. It can not be contended that the rate proposed on hackled 
 jute is an increase, when it is proposed at the same time to make raw jute free, 
 and to impose this duty, equal to less than 10 per cent., upon the article in an ad- 
 vanced condition, simply for the protection of American labor. You are aware 
 that the present rate on raw jute is 1:0 per cent. 
 
 18. Jute yarns. The proposed rate of 1 cent per pound on jute yarns is less 
 than the existing rate of 35 per cent., even upon the entered values of last year, 
 which are known to be abnormally low and less than the foreign market 
 value. 
 
 19. Wool of class 3. The equivalents of the existing rates of 2^ cents and 5 
 cents upon wool of class 3, based upon the entered quantities and values for the 
 last fiscal year, and 26.76 per cent, and 29.14 per cent, respectively. While the 
 equivalent of 3 cents per pound as proposed upon the aggregate entered value 
 of the importations is 28.66 per cent. The question whether wool entered at 2i 
 cents is not properly dutiable at 5 cents is a constant subject of contention, and 
 many advances are made by the appraisers to the higher rate. If these advances 
 are taken into consideration, it will be found that the rate now collected exceeds 
 that proposed. 
 
 With respect to taggers iron, steel, wire rods under No. 5 wire gauge, glucose, 
 cod-liver oil, and seal oil there is an apparent increase of rate based on the en- 
 tered values. We assert, however, that this results from the fact that the mer- 
 chandise is enormously undervalued in the invoice, a fact which is proven as to 
 taggers iron and wire rods by a com parison of the reported values of these arti- 
 cles with the value of merchandise of the same general class subject to specific 
 rates. For instance, iron and steel wire rods not lighter than No. 5 pay six- 
 tenths per cent, per pound, equal to 3(5 per cent, ad valorem. Steel wire rods 
 lighter than No. 5, which cost more to produce and are more valuable, should 
 pay a duty as proposed of eight-tenths per cent, per pound, which is relatively 
 a no higher rate than that imposed on the coarser quality. These wire rods are
 
 27 
 
 now nominally dutiable at 45 per cent., and the specific rate provided would b 
 s reduction of the present duty honestly collected. 
 
 As to glucose, cod-liver oil and seal oil, duties are now imposed only on part 
 of the value, owing to large reductions for packing, <fcc., which form a large pro- 
 portion of the cost of the merchandise. If duties were collected on the full 
 value paid, the apparent increase of rates would disappear. 
 
 Bronze powder, clay pipes, cotton and woolen clothing, corsets and worsted 
 cloths. The increased rates proposed on these articles are for the purpose of 
 correcting glaring inequalities in the present law, seriously hurtful to domestic 
 industries engaged in their production. 
 
 As to bronze powder, the present duty is only 15 per cent., while the duty on 
 the copper from which it is made is equal to about 47 per cent., which is 17 per 
 cent, more than the ad valorem equivalent of the specific rate proposed. 
 
 The rate proposed on clay pipes is considerably less than that imposed on 
 other pipes and smokers' articles. This is an unreasonable discrimination. 
 While you object to the proposed correction of this inequality, you propose, in 
 the administrative bill you have adopted, to extend to certain manufacturers of 
 paper (the existing rate of which is 15 per cent.), used as smokers' articles, the 
 high rate of 70 per cent, now provided for other pipes and smokers' articles. 
 
 As to worsted cloths, you are aware of the ineqality of the rates imposed by 
 existing law as between such manufactures and woolen cloths. Youare doubt- 
 less also aware of the injustice to the domestic manufacturers of levying a higher 
 rate of duty upon the wool from which worsted cloths are made than is levied 
 upon that same wool in the manufactured article. The specific rate on these 
 cloths valued at less than 80 cents per pound ranges from 10 cents to 24 cents per 
 pouml. and the ad valorem rate is 35 per cent ,the latter being intended to cover 
 the difference in the cost of labor here and abtoad. 
 
 Those in the trade inform us that it requires upon an average fully 3 pounds 
 of raw wool to make a pound of cloth. This wool is subject to a duty of 10 cents 
 per pound, and there is therefore exacted from the domestic manufacturer 30 
 cents per pound upon his raw materials, which when imported in the form of 
 finished cloth is subject to a duty of only 10 to 24 cents per pound. The result 
 has been the gradual destruction of the worsted manufacturing industry in this 
 country, and enormous and constantly increasing importations of worsted 
 cloths. 
 
 We can not comprehend the process of reasoning by which you accept the 
 existing rate of 40 per cent, ad valorem as a proper duty upon common cotton 
 laces, insertings, window curtains, damasks, <fcc., used by the masses, and in- 
 sist upon retaining a rate of 10 per cent, lower upon the fine linen laces used by 
 the wealthy, and upon ladies' corsets of all qualities, including those made of 
 silk. 
 
 But, we repeat, that differences can be adjusted by reducing further specific 
 equivalents, or by striking them out of the bill and leaving them as they are now. 
 
 Second. Certain of the things which you ask to be placed on the free-list, as 
 proposed in the Morrison bill, reported from the Committee on Ways and Means 
 at the last session, including lumber partly worked, all wools, unwashed, washed, 
 and scoured, fish, salt. &c., raise at once those vital questions which have here- 
 tofore prevented harmonious action on the tariff question. As many of us be- 
 lieve that such a step, if carried to its logical conclusion, would be destructive 
 of very many of our most important agricultural as well as mechanical indus- 
 tries, and in this matter, representing not only our own convictions but the in- 
 terests of the people we represent, we could not, of course, make this concession, 
 and we did not expect to be asked to make it. 
 
 The importation of wool, even under the existing rates of duties, has in- 
 creased by nearly 85.000,000 during the last year and manufactures of wool by 
 ovi-r is. 000,000, showing that the duty on these articles is rather below than 
 above the competing line. 
 
 As to fish, we think it an unhappy time, since this has now become an inter- 
 national question between Canada and the United States, to forestall negotia- 
 tions by admitting Canadian fish free to the markets of the United States. 
 
 With ;i view to saving our forests we have proposed to admit logs, timber, 
 and lumber unworked free, but in order to secure to labor the same advantages 
 in the lumber industry as in other industries we have proposed to retain aduty 
 on lumber when advanced to any stage of manufacture. 
 
 Third. With respect to the proposition to adopt a modification of the Hewitt 
 bill, in place of the administrative sections of the bill proposed by us, it may be 
 stat.-cl that the latter contaiiisall of the administrative sections of House bill 7652 
 (with certain verbal modifications) favorably reported by the Ways and Means 
 Committee at the first session of the present Congress, except the section extend- 
 ing the warehousing period, Ac., which we did not adopt. Certain of the pro- 
 visions since recommended by the Secretary of the Treasury have been added 
 also, together with certain additional provisions which we have decreed need- 
 ful and think ought to be adopted.
 
 28 
 
 You say that the substitute which you recommend relates alone to the admin- 
 istrative features of the law, while that part of the measure submitted by us in- 
 creases the rates of taxation. A careful comparison and analysis of the two 
 measures does not, we think, sustain this statement. On the contrary, the ad- 
 ministrative measures proposed by us make certain distinct reductions of rates 
 which the bill presented by you does not, and in some instances it increases the 
 rates. 
 
 In section 12, page 3, of your measure is a provision including certain coal-tar 
 pro luets, namely : toludine, xylidine. &c.. at 20 per cent, ad valorem, which ar- 
 ticles are included on the free-list of our bill. 
 
 On page 6, in tlie same section, there sire certain provisions for earthenware, 
 tiles, and small glass mirrors by which the present rates are retained on the ar- 
 ticles mentioned, whereas on pages ~~>. -ii. and 2S of our bill there are provisions 
 of the same substantial purport, but reducing the rates of duty by 5 per eent. on 
 the several groups of articles, which effects a reduction in the revenue approxi- 
 mating 250,000. 
 
 In the same section (page ?) of your bill there is a provision modifying tariff 
 paragraph 210 of the metal schedule by which the pivscnl rate of 15 per cent, on 
 manufaetures of various metals is retained, while on page 2<J of our bill there is 
 a provision mollifying the same paragraph in important and needful particu- 
 lars, and reducing the rate on the same manufaetures 5 per cent, ad valorem, 
 thus decreasing the revenue by nearly ?230,000 annually. 
 
 In the proposed modification of tariff, para ;raph 2i)9 of your bill, relating to 
 starch, you retain existing rates of 2 cents and 2i cents per pound on the articles, 
 while on page 9 of our bill there is a provision, which yon accept, reducing the 
 rate on the different kinds of starch to 1 cent and 2 cents per pound respectively. 
 You also propose in the same provision to include as dutiable as starch " all sub- 
 stances produced from the Jatropha manihot." Is it not obvious that it would 
 be impossible for the custom officers to determine whether an article in the 
 form of starch is produced from the Jatropha inanihot or from some other source ? 
 May not the article on the free-list commercially known aa "Tapioca" be in 
 fact the product of the root of the plant referred to? 
 
 On page 13 of your bill there is a provision modifying paragraph 790, which 
 limits the free admission of " soap stock " to such as is lit only for use as such. 
 On pages 3'J and 40 of our bill there is a provision on the same subject which en- 
 larges the exception to "grease and oils" not only used in soap making, but 
 also to grease and oils used in wire drawing and forstuffing and dressing leather, 
 which will effect a considerable reduction in taxation and revenue. 
 
 On pages 3? and 31 of our measure there is a provision relating to cotton 
 goods, the effect of which would be to reduce the rate of duty on certain cotton 
 cloths from the equivalent of from 75 per cent, to 200 per cent, ad valorem to 35 
 per cent., which provision is not found in your measure. 
 
 On page 31 of our bill there is a provision modifying paragraph 336, whereby 
 the rate of duty on certain manufaetures of flax, not specially enumerated, is 
 reduced from 40 per cent, to 35 per cent, ad valorem. 
 
 The only provisions embraced in onradministrative sections, not hereinbefore 
 referred to, by which rates are advanced at all, which are not identical with pro- 
 visions in your bill, are those relating to "brittannia ware," &c. (page 30), and 
 to sugar drainings and sweepings (page 31), which are unimportant and will 
 have no material effect upon jthe revenues. 
 
 The most important difference between the administrative features of the two 
 measures is the section relating to coverings (section 4 of our bill), which, 
 although embodied in the bill favorably reported by the Committee on Ways 
 and Means at the last session, is now omitted from your bill. This section pro- 
 vides for the correction of the unfortunate phraseology of seel ion 7 of the tariff 
 act of March 3, 1883. As is well known, that section was intended to exempt 
 from duty charges for the packing-cases used for the transportation oi merchan- 
 dise, but under the rulings and opinions of the Supreme Court and the Attor- 
 ney-General a large part of the value of the merchandise as purchased by the 
 importer, or as shipped by the consignor, is held to be non-dutiable under that 
 section. 
 
 The correction of this legislative blunder was regarded by the Treasury De- 
 partment as the most important and essential feature of the bill proposed by Mr. 
 Hewitt, and the section adopted in the bill H. H. 7<>52, before mentioned, was the 
 result of correspondence between Mr. Hewitt and the distinguished Assistant 
 Secretary of the Treasury, Hon. C. S. Fairchild, then Acting Secretary, and who 
 has the immediate direction of custom matters. In his letter to Mr. Hewitt dis- 
 cussing the various'administrativesections of the " Hewitt bill," Mr. Fairchild 
 says, with reference to the section under consideration : 
 
 " Section 4. This section I regard as the most important of the administrative 
 features of the bill so far as relates to the revenue, and as essential to the fair 
 and orderly administration of the tariff! Its purpose is to secure the assess- 
 ment of duties upon substantially the same basis as it is believed was intended
 
 29 
 
 to he established by the section that it repeals and upon which the Government 
 had levied duties prior to the dec'sion of the Supreme Court in the Obertauffer 
 case. I believe that if it shall become a law it will accomplish this result, and 
 will afford a just, safe, and uniform rule for the assessment of duties on all 
 'packed' merchandise, save vast trouble to all concerned, prevent litigation, 
 and secure the revenue from immense loss consequent upon the decision men- 
 tioned." 
 
 Jn his late report on the "collection of duties," Secretary Manning com- 
 mends to Congress a consideration of the suggestions made in reports to him 
 on this subject by Assistant Secretary Fairchikl and other officers. These re- 
 ports are appended to the Secretary's report, and contain such facts with regard 
 to the practical operation of the law as it is now construed as to demand an im- 
 mediate remedy by Congress. 
 
 Mr. Fairchild in his report, after citing the many difficulties growing out of 
 the interpretation of the seventh section of the tariff act of 1*83, says: 
 
 " But the law requiring as it now does the appraising officers to find the mar- 
 ket value of articles at the time and place of exportation, and at the same time 
 directing them to find such value in a condition in which the articles are not 
 sold at that time and place, or at any time or place, presents difficulties which 
 call for an amendment of the law. At present every advantage is offered to the 
 unscrupulous and every disadvantage to the conscientious importer." 
 
 The testimony of the other officers referred to by Secretary Manning is to the 
 same etl'ect. and shows the impracticability of administering the tariff uniformly 
 and equitably under the existing law, and such is the view held by the chief 
 customs officers and experts at the principal ports. 
 
 The Secretary of the Treasury has repeatedly, urgently, and recently recom- 
 mended to Congress the adoption of specific rates of duty whenever practicable, 
 not only on account of the troubles growing out of the interpretation of the 
 sections of the law above referred to, but generally in the interest alike of or- 
 derly administration and of honest traders. 
 
 In this view \ve have, in our proposed bill, changed the rates on a number of 
 articles from ad valorem to specific. This has been done after the most careful 
 and painstaking inquiry, the articles being among those particularly affected 
 by the operation of the section in question. The adoption of these rates would 
 remove the articles from the operation of that section, so that as to them the 
 enact ment of the proposed remedial section would in no sense affect the rate of 
 taxation. 
 
 It is believed, therefore, that upon careful comparison of the two bills the dif- 
 ferences ought not to prevent an agreement on the administrative features of 
 our bill. 
 
 4. In striking from the proposed compromise measure the repeal of the 
 tobiccotax. the tax on fruit brandies, alcohol used in the arts, Weiss beer, and 
 tifre alternative proposition to reduce the tax on all distilled spirits from 90 cents 
 to GO cents a gallon, you eliminate from the bill all propositions to reduce in- 
 ternal-revenue taxes, except the retail license proposition, and this you do not 
 in terms agree to. The repeal of the tobacco tax, now so urgently demanded, 
 would take off, in round numbers, $28,000,000; the fruit-brandy tax on the basis 
 of the receipts of last year 81.4(0000. Free alcohol in the arts will also mate- 
 rially reduce the receipts from this source. If the proposition to reduce the tax 
 on all distilled spirits to 60 cents be adopted, a reduction of revenues from this 
 source alone, if proportionate to the reduction of the tax, would amount to over 
 $20,<X 0,000. 
 
 In 1 'en of these provisions in our bill you propose to repeal all statutes im- 
 posing restrictions upon the sale of leaf-tobacco by farmers, and to modify the 
 laws relating to storekeepers and gangers at small distilleries, and the destruc- 
 tion of stills; also to modify the administrative feature* of the law relating to 
 the issue of warrants, -&c. While to all these proposed modifications of the 
 present law we readily assent, we do not see in them alone how the revenue 
 Is to be reduced. 
 
 Our object, in the matter of internal taxes, is twofold ; first, to reduce the reve- 
 nues, and. second, to relieve the people of vexatious and inquisitorial methods 
 of taxation, and to do this without offering temptations to frauds or to evasions 
 of the law. Furthermore, in proposing the abolition or reduction of internal- 
 revenue taxes, we believe we are acting in harmony with the principles and 
 declarations of the Democratic national platform. The internal-revenue tax in 
 that platform is declared to be a war tax, and the repeal of crushing war taxes is 
 demanded. It has, moreover, been the policy of our Government after each 
 war to abandon this form of taxation first, as evidenced under the administra- 
 tions of Jefferson and Jackson; and a tax that requires an armed force to execute 
 it can never be popular in a free country. 
 
 Fifth. Your demand, that if the repeal of the tobacco tax, or other internal 
 taxes, in whole or in part, are insisted upon by us, then you and those acting 
 with you will insist that "in the same bill an equal amount of reduction in rev-
 
 30 
 
 enue derived from customs" shall be made, if it presented otherwise debatable 
 ground for a compromise, seems to vis to forestall such action by your further de- 
 mand that the reduction in the tariff shall be made upon such articles only as 
 those with whom you are acting shall indicate. 
 
 This is equivalent to saying, at the outset, that those holding different views 
 from your own and the views of those acting with you shall be precluded from 
 having any voice in determining what things duties shall be reduced on. But, 
 in the first place, internal taxes and customs have never stood on equal ground 
 in our system of taxation. Tariff taxes have been always our chief reliance for 
 revenues; internal ta^es have been the exceptional taxes. As stated in the last 
 national party platform, "from the foundation of this Government taxes col- 
 lected from custom-houses have been the chief sources of Federal revenue; such 
 then must continue to be." 
 
 In the next place we hold it next to impossible to so adjust tariff rates as to 
 secure a definite reduction of revenues such as the repeal or reduction of an 
 internal-revenue tax will produce. When a direct tax is repealed we know 
 what the loss to the revenue will be. So when dutiable articles are placed 
 on the free-list; but a reduction of the rate of duty may be followed by an in- 
 crease in revenue, and not a decrease. 
 
 Between the two extremes of free trade on the one hand and a prohibitory 
 tariff, or no trade on the other, there are three principlesand only three, one of the 
 other of which must govern when duties are intelligently laid. These may be 
 represented by three lines, first, a horizontal line, representing an even rate laid 
 upon all impprts for the purpose of revenue only ; next, an irregular line repre- 
 senting maximum revenue, and the third, the line representing the difference 
 in the cost of production arising out of the different conditions under which 
 production is carried on in this and other countries. This line is always and 
 necessarily above the line of maximum revenue. 
 
 Now it is clear that a reduction of duties from the prohibitory line or from the 
 competing, or difference in cost line, to the line of maximum revenue, will 
 necessarily result in an increase of the revenues. A reduction in the tariff 
 below the line of maximum revenue will decrease revenues; but in what pro- 
 portion it is impossible beforehand to tell ; on the contrary, an increase in the 
 tariff rate above the line of maximum revenue will diminish revenues, until the 
 prohibitory line is reached. 
 
 \Ve are ready to join in reducing the tariff on all articles that are above the 
 line of difference in cost of production, and on those things 011 which the rate of 
 duty is now above that line, thus permitting monopolies to be formed to arbi- 
 trarily raise prices to the consumer, without benefiting labor. We think it the 
 imperative duty of Congress to reduce the tariff' so as to prevent the possibility 
 of monopoly combinations to put up prices above the competing point. 
 
 Labor has no interest above the competing line, or line that marks the differ- 
 ence in cost of production ; but up to this point wage-earners are vitally con- 
 cerned, and we believe that only by maintaining duties up to this line on im- 
 portations in the production of which there is no competition between this and 
 other countries, can labor continue to receive the larger share of what it pro- 
 duces, which our industrial system affords as compared with the industrial 
 systemsof other countries. The continued importation of any competing prod- 
 uct, notwithstanding the tariff', is proof that the duty is not above the line of 
 difference in cost. 
 
 Our national party platform, recognizing this controlling principle, declares 
 that "the necessary reduction in taxation can and must be effected without de- 
 priving American labor of the ability to comuete successively with foreign labor, 
 and without imposing lower rates of duty than will be ample to cover any in- 
 creased cost of production which may exist inconsequence of the higher rate of 
 wages existing in this country." 
 
 In the face of this declaration, and in the light of political events which have 
 transpired since the last national convention sustaining this principle, we would 
 not feel justified in departing from it in any revision of our tariff laws, and we 
 certainly do not think, as a political measure, it can properly be asked of us. 
 There is, however, ample reason for a reduction of tariff' and a corresponding 
 reduction of the revenues without contravening this important principle. All 
 that is needed, in our opinion, is a disposition to meet the question fairly and 
 deal with it as a matter of business and not of politics. 
 
 Sixth. Respecting your proposition to submit the measure proposed by us to 
 a caucus of our political friends, "all parties to be bound by such action as it 
 may take upon the subjects to which the bill relates," is one, it seems to us, that 
 ought not to be asked. The question is not a political question ; it is not a party 
 question, for Republicans differon it as do Democrats; the differences bet ween 
 us are not political differences, but differences on important economic and in- 
 dustrial questions, and we submit that it is not usual in either party, nor right, 
 to attempt to bind men by caucus action on such action, and thereby not only 
 to take from them their right and duty to act in accordance with their own con-
 
 UC SOUTHERN REGIONAL LIBRARY FACILITY 
 
 A 000104390 
 
 31 
 
 victions, but compel them to act contrary to their obligations as faithful repre 
 sentatives of the people who have sent them here. 
 
 These, too, are the very matters respecting which we are attempting to effect 
 a compromise. In lieu, therefore, of a caucus, we suggest that a committee 
 composed of members representing different phases of the questions involved 
 in the two measures under discussion should be appointed to take up these dif- 
 ferences in a spirit of fairness, with a view of coming together on a measureall 
 can support, without either side being culled upon to surrender convictions or 
 to prove derelict in their duty to their constituents. We urge the suggestion of 
 a conference the more because many of the gentlemen acting with us in the 
 matter of internal taxes do not agree on all matters pertaining to the tariff. 
 
 Seventh. In accordance with your fourth suggestion, that in case no other ar- 
 rangement is arrived at, that upon reasonable notice a motion be made to go 
 into the Committee of the Whole 011 House bill 9702, introduced by Mr. RANDALL 
 at the last session of Congress, we have to say that due notice will be given of 
 the time when it is proposed .to make such a motion, so that it may be generally 
 known. We can not, however, close this communication without expressing 
 again the hope that an agreement on a measure which out political friends can 
 generally support is not yet impossible. 
 Respectfully submitted. 
 
 SAMUEL J. RANDALL, Pennsylvania, 
 A. J. WARNER, Ohio, 
 BARCLAY HENLEY, California, 
 WILLIAM McADOO, New Jersey, 
 JNO. 8. HENDERSON, North Carolina, 
 GEO. D. WISE, Virginia, 
 EDWARD J. GAY, Louisiana, 
 
 Committee. 
 Hon. JOHN G. CARLISLE and others. 
 
 Mr. HENDERSON, of North Carolina. I reserve the residue of iny 
 time. 
 
 The SPEAKER. The gentleman from North Carolina has two min- 
 utes remaining. [Cries of " Vote ! " "Vote ! "1 
 
 Mr. CABELL. As the House seems to desire a vote on this ques- 
 tion, I will content myself with asking the privilege to print some re- 
 marks. 
 
 Mr. COWLES, Mr WISE, Mr. DANIEL, and Mr. O'FEEEALL made 
 similar requests. 
 
 Mr. TAULBEE. I ask unanimous consent that permission to print 
 remarks in the RECORD on this bill be given to all members desiring 
 to do so. 
 
 The SPEAKER. Is there objection to the request of the gentleman 
 from Kentucky [Mr. TAULBEE] ? The Chair hears none; and general 
 leave to print remarks on this bill is granted. 
 
 Mr. HEPBURN. I yield three minutes to the gentleman from New 
 Hampshire [Mr. GALLINGEK]. 
 
 Mr. GALLINGER. I find, Mr. Speaker, that during the present 
 Congress this House has passed and the President has signed public- 
 building bills for San Antonio, Tex. ; El Paso, Tex. ; Jacksonville, 
 Fla. ; Savannah, Ga. ; Huutsville, Ala. ; Augusta, Ga. ; Owensborough, 
 Ky., and Houston, Tex., while this House has passed and the President 
 has vetoed public-building bills for Duluth, Minn.: Zanesville, Ohio; 
 Sioux City, Iowa; Dayton, Ohio; Portsmouth, Ohio, and Lynn. 
 Mass. 
 
 I find furthermore that the State of Ohio, which has had three public- 
 building bills vetoed in this Congress, pays to the Government annually 
 over $12,000,000 of taxes, while the States of Alabama, Arkansas, 
 Di-liixvare, Florida, Georgia, Louisiana, Mississippi, North Carolina, 
 South Carolina, Maryland, West Virginia, Virginia, Tennessee, and 
 Texas, fourteen States in all, pay $10,000,000 in taxes, less by $2,000,000 
 than the amount paid by the single State of Ohio.
 
 Mr. Speaker, it seems to me that under this administration the 
 Democratic States of the South are being very well cared for, and I 
 think their " moonshiners" had better continue to pay taxes on their 
 whisky. [Laughter.] 
 
 Mr. HEPBURN. I yield one minute to the gentleman from Mary- 
 land [Mr. McCoMAs]. " 
 
 Mr. MoCOMAS. Mr. Speaker, this bill embraces a good proposi- 
 tion weighted down by one which is objectionable. For the fruit- 
 brandies and certain other distillations 1 would have consideration; 
 but so far as can here be seen this bill will make it too easy to evade 
 the taxes, too easy to get rid of the burden; and when the clamor has 
 gone by for a revision of the internal-revenue laws with reference to 
 distilled spirits I fear that it will be found that in our hasty legislation 
 on the dying day of a dying Congress we did not know what we did. 
 so that the "moonshiner" crept through in the early daylight. 
 
 I think tobacco should be divorced iu this ease from whisky. Take 
 away the whisky, and I am ready to vote for the tobacco grown from 
 the soil and now burdened by unjust taxation in fifteen States and 
 sixteen hundred counties. 
 
 [Here the hammer fell.] 
 
 Mr. HEPBUKX. Mr. Speaker, gentlemen who advocate this bill 
 have said very little about the interest of the "moonshiner." One of 
 the provisions of this bill proposes to repeal the law which authorizes 
 the destruction of the still and other machinery used by the illicit 
 manufacturer of distilled spirits. I would like to have gentlemen give 
 some reason why the implements of trade of a man engaged in an ille- 
 gal business ought not to be destroyed. In the case of the counterfeiter, 
 as well as the man who engages in gaming, the implements of his trade 
 are destroyed. Why should not the same rule be applied in the case 
 of the man engaged in the illicit manufacture of whisky? 
 
 Mr. COWLES. I might say to the gentleman from Iowa that the 
 implements of the counterfeiter can not be put to a lawful use, whereas 
 the implements of an illicit distillery are equally serviceable in licensed 
 Government distilleries, and can be sold for such use. 
 
 Mr. HEPBURN. The destruction of their stills and machinery is 
 one of the most burdensome and effective of all the punishments now 
 inflicted upon these mountain gentlemen. With juries chosen from 
 among their neighbors they can always be assured of the most lenient 
 consideration when personally arraigned. But when the officers of the 
 Government destroy their stills, there is inflicted a punishment which 
 is felt. If such destruction is in any case unjust and without due 
 process of law; if, in fact, the person whose still is destroyed is not en- 
 gaged in the illicit manufacture of liquor, he has his action against the 
 sureties of the officer and his action against the officer himself for his 
 illegal proceedings. 
 
 They now propose these distilleries shall not be destroyed, but that 
 they shall be offered for sale. I would like to ask the gentleman from 
 North Carolina, iu his district with its scores, possibly hundreds, may 
 be, of illicit, manufactories, what man would dare to buy in competi- 
 tion with the owner for this machinery ? Under the cunning processes 
 which the. gentleman proposes to inaugurate here is the still of an in- 
 dividual which has been confiscated by the law, put up for sale, knocked 
 down to whom and for a nominal sum. 
 
 [Here the hammer fell.]