It may be interesting to compare these statistics with the following table of receipts from the income tax in Great Britain, where this tax has been continuous for the past thirty-four years, although constantly changing by Parliamentary legislation, in the percentage levied.

Great Britain's Receipts from Income Tax-1844-1878.

[Compiled from the Statistical Abstract of the United Kingdom].

1845.

5,330,000

66

66

66

= 3

66

0

1855.

10,922,000

10

|| || || || || || || || || || || || || || || || || || || || || || || || || || || ||||||||||||||

1. £100 a year and under £150.

2. £150 a year and upwards.

3. With abatement of £60 on all incomes below £200.

4. With abatement of £80 on incomes under £300.

5. On incomes of above £150, with abatement of £120 on incomes between £150 and £400.

But the heaviest burden of taxation in the United States during the war period and the years immediately following, fell upon the productive industries of the country, and unquestionably had some share in leading to the state of things which produced the great financial revulsion and the prolonged industrial depression of 1873-78. The drain upon the resources of the country, though prodigious and unexampled, was, however, by no means in excess of

the public spirit, which sustained the Government in the crisis and under the strain of war. Congress was at first reluctant to impose a direct or internal tax, apprehending popular discontent, and perhaps overrating the effects of long exemption from taxation in a direct form. It was not until 1863 that the more profitable and farreaching internal revenue taxes were imposed. On this point may be cited the following, from a paper by David A. Wells, Special Commissioner of Internal Revenue of the United States, from 1866 to 1869 :

"Everywhere the opinion was expressed that taxation in all possible forms should immediately, and to the largest extent, be made effective and imperative; and Congress devised a system of internal and direct taxation, which for its universality and peculiarities has probably no parallel in anything which has heretofore been recorded in civil history, or is likely to be experienced hereafter. The one necessity of the situation was revenue, and to obtain it speedily and in large amounts through taxation, the only principle recognized-if it can be called a principle-was akin to that recommended to the traditionary Irishman on his visit to Donnybrook Fair, Wherever you see a head, hit it.' Wherever you find an article, a product, a trade, a profession, or a source of income, tax it! And so an edict went forth to this effect, and the people cheerfully submitted.

"Raw cotton was taxed at the rate of two cents per pound; salt was taxed at the rate of six cents per 100 pounds; tobacco from fifteen to thirty-five cents per pound; cigars from $3 to $40 per thousand; sugar from two to three and one half cents per pound. Distilled spirits were first taxed in 1863, at the rate of twenty cents per gallon; the next year, 1864, sixty cents; then $1.50; and subsequently at $2. But the most curious and complex taxes were those imposed on the various products of what may be termed ordinary manufacturing industry, the tax, by intent or construction, having been imposed first on the raw material, and then on the total or increased value, according to circumstances, on each successive stage of its elaboration up to the finished product. And, as if this was not enough, every manufacturer was also compelled to take out an annual license, while the goods produced, if sold by dealers or agents independent of the manufacturers, were subject to an additional tax of one tenth of one per cent., reckoned upon the amount of sales. This tax upon manufactures and products, with the exception of a few articles, was at first fixed, in 1864, at an average of five per cent.; but in 1865 the rate was increased uniformly twenty per cent., making the tax for most articles six per cent. Under the operation of this law, the Government actually levied and collected from eight to fifteen, and in some instances as much as twenty per cent. on every finished industrial product.

"In the case of books and pamphlets, it was proved by the New York Publishers' Association that, including the license and income taxes, the finished book and its constituent materials paid from fifteen to twenty separate and distinct taxes before it came to the reader-the paper and its constituents, the cloth, the glue, the starch, the leather, the slaughtered animal from whence the hide furnishing the leather was obtained, the dyes with which the cloth or leather was colored or stained, the thread, the gold-leaf, the type-metal, the type, and the machinery; and then, when the whole were combined, the finished book paid an additional tax of five per cent., which was levied, not upon the cost of manufacture, but upon the price at which the book was sold. In addition to all these, the manufacturer or publisher paid, for the privilege of doing business, an annual license tax, and an income tax of from five to ten per cent. on his profits, if he had any. In short, it was as if a frontier had been drawn about each individual article or product in the nation, across which nothing could pass without being submitted to a tax which was repeated at each border.

"We have said that the people of the United States submitted to such a system. They did more; for such was the fervor of patriotism and the determination to push the war to a successful issue, that they rejoiced in it; and during the continuance of hostilities there was no movement or protest attempted against the system which found any notable response among the masses. The country was rich, and its accumulated resources for nearly two generations had not been in any degree drawn upon by the national Government for extraordinary taxation. Wealth, moreover, was very uniformly distributed; and the people pointed with pride to the annually increasing receipts of revenue under the new system, which, starting with $42,500,000 in 1863, rose rapidly to $117,000,000 in 1864, $211,000,000 in 1865, and culminated in 1866 with the large sum of $310,000,000,, making the total revenue for that year, drawn from all sources by taxation, five hundred and fifty-nine millions. "So long, moreover, as the war lasted, the attempts to evade taxation were exceptional, and in amount inconsiderable. The demand for most manufactured and agricultural products, owing to the enormous consumption of the armies, and the withdrawal of labor, by enlistment, from its accustomed avocations, was fully equal to or in excess of supply; prices rose rapidly with every increase of taxation,

or additional issues of paper money; and, under such circumstances, the burdens of the war were not regarded by the majority of producers as oppressive."

Notwithstanding these facts, it is none the less true that when the stimulus, growing out of the war demand for products, and the rising markets, began to be withdrawn, and, more than all, when the paper-money expansion began to be succeeded by contraction, the whole attitude of the manufacturing and mercantile classes towards the system of taxation underwent a change. Impositions, which before were borne without complaint, and were even popular, became odious, and the public agitation, with a new demand for retrenchment and economy in the Government, compelled the repeal by Congress, first of the intenal revenue taxes upon domestic manufactures; then of the larger share of stamp duties, and all the taxes upon provisions, sales, and licenses, except as to the dealers in spirits and tobacco; and, finally, of the entire tax upon incomes. These successive remissions of taxation were enacted in 1866-67-68. As the original vast system of taxation was enacted at wholesale, under the pressure of urgent necessity, to obtain the largest revenue within the shortest time, without regard to the effect upon the country's in dustries, or to the proper relation of the tariff to the internal revenue tax upon the same article, so the vast fabric of taxation, with all its complications, underwent a wholesale repeal, with but little regard to the adjustment of a sound, equitable, and permanent system. While Congress swept away direct taxes (including the entire tax upon incomes), which had brought over two hundred million dollars annually into the treasury, it permitted the enormous duties upon imported commodities to stand for years unrepealed, and, in many cases, undiminished. When the tariff was finally reduced by the legislation of 1872, tea and coffee, articles of semi-luxury, which are the source of abundant revenue, were wholly exempted from duty.

The experience of the United States in the raising of revenue corroborates the principle that it is not always the heaviest tax which produces the largest revenue. A notable illustration of this was found in the variations of tax upon distilled spirits. The following table of the successive raising and reduction of the tax, with the revenue gathered under each rate imposed, will be found instructive :

What are the sources of taxation from which the present revenues of the United States are derived?

About three fifths of the amount for the support of the Government comes from the duties on imported commodities, and two fifths from internal revenue taxes. The latter are raised almost wholly from luxuries; spirits, fermented liquors and tobacco paying more than nine tenths of the internal revenue taxes. But in the taxes imposed upon imported commodities the rule is reversed, and the largest amount of revenue is derived, not from luxuries, but from articles classed among the necessaries of life. An analysis of

the customs receipts of the United States shows that the largest share of revenue is derived from the following commodities :

Here are over $86,000,000 of revenue derived from commodities in universal use, out of a total revenue of $131,000,000, in the year 1877, to which these figures apply. The same year, the articles of luxury which paid any considerable revenue into the Treasury were the following:

It results from the above figures, which are fairly representative of the general average of duty collected from articles of luxury and necessity (omitting a multitude of minor articles), that much the larger percentage of the whole revenue is derived from articles entering into general consumption among the people.

Under the high tariff imposed during the pressure of war necessities, and not heavily reduced for the past fifteen years, the average duty on all dutiable commodities has been rather over than under 40 per cent ad valorem. The following table will show the percentage on the gross importations charged with tariff duties from the year 1821 to 1978, inclusive, the figures being from the tables published by the Treasury Department:

CUSTOMS REVENUE OF THE UNITED STATES.

A Comparative Statement showing the Customs Revenue, Amount of Dutiable and Free Goods Imported, and the Average Rate of Duty in each Year from 1821 to 1877, inclusive. [From the Official Reports on Commerce and Navigation.]

NOTE. The percentages of duty are only approximately, not absolutely, correct, the rates being computed for the earlier years upon the gross value of merchan dise, etc., imported, instead of upon the value of goods entering into consumption in the respective years.