cluded between the United States and any Indian tribe, by which the title of such tribe to their lands shall be divested, the same shall be conveyed directly to the United States, and shall thenceforward be subject to the authority of Congress in the same manner as all other public lands.

* Mr. TAFFE. I object to the consideration of the resolution.

MONUMENT TO GENERAL SEDGWICK.

Mr. GARFIELD. I ask unanimous consent to take from the Speaker's table the joint resolution (S. R. No. 129) donating certain captured ordnance for the completion of a monument to the memory of the late Major General John Sedgwick, with a view to put it upon its passage.

Mr. BROOKS. I shall object to taking from the Speaker's table any Senate bills that succeed the gold contracts bill; but as this precedes that bill I do not object.

|

seven the additional section which will be read by the Clerk.

The Clerk read as follows:

SEC.-. And be it further enacted, That upon all interest arising from bonds of the United States there shall be levied, collected, and paid a duty of ten percent. on the amount of such interest, and the Treasurer of the United States, and such subordinate officers as shall be charged with the payment of said interest shall assess and collect the duty hereby levied.

Mr. PIKE. Before the Chair again submits the question to the committee, I desire to explain that I made an appeal from the decision of the Chair, not for the purpose of antagonizing the Chair upon a question of order, but as the only way of getting this proposition before the Committee of the Whole. At this stage of the session there is no way of presenting this matter, either in Committee of the Whole or in the House, unless in connection with this bill. It was for that reason that I appeal from the decision of the Chair.

Mr. SCHENCK. After having assisted in getting the general bill out of the way.

The CHAIRMAN. The Chair will state the grounds of his decision. A few days ago the House had under consideration in Committee of the Whole a general tax bill. After pro

The joint resolution, which was read, requires the Secretary of War to place in charge of Major General H. G. Wright, Major General Frank Wheaton, Major General George W. Getty, and Major General Truman Seymour, three bronze cannon, captured by the sixth Army corps in battle, for the construction of a statue of the late Major General John Sedg-ceeding with its consideration for some time wick, to be placed on a monument erected to his memory by the sixth corps of the army of the Potomac.

No objection being made, the joint resolution was taken from the Speaker's table, read a first, second, and third time, and passed.

Mr. GARFIELD moved to reconsider the vote by which the joint resolution was passed; and also moved that the motion to reconsider be laid on the table.

The latter motion was agreed to.

SOLDIERS HONORABLY DISCHARGED.

Mr. BOLES, by unanimous consent, introduced a bill (H. R. No. 1316) for the relief of soldiers honorably discharged from the service of the United States; which was read a first and second time, and referred to the Committee on Military Affairs.

Mr. UPSON moved to reconsider the vote by which the bill was referred; and also moved that the motion to reconsider be laid on the table.

he latter motion was agreed to.

REMOVAL OF A SUIT.

Mr. BOLES, by unanimous consent, also introduced a joint resolution (H. R. No. 311) to remove a suit from the circuit court of Frank; lin county, Arkansas, to the circuit court of the United States; which was read a first and second time, and referred to the Committee on the Judiciary.

Mr. UPSON moved to reconsider the vote by which the joint resolution was referred; and also moved that the motion to reconsider be laid on the table.

The latter motion was agreed to.

ALEXANDER'S SAW BAYONET.

Mr. PHELPS. I ask unanimous consent to submit the following resolution for consideration at this time:

Resolved, That the Committee on Military Affairs be instructed to inquire into the expediency of adopting for use in the infantry regiments of the United States Army Colonel F. W. Alexander's saw bayonet, patented in 1864, and to report by bill or otherwise. Mr. UPSON. I object.

INTERNAL TAX BILL.

Mr. SCHENCK. I now insist upon the regular order of business.

The House, under the order heretofore made, accordingly resolved itself into the Committee of the Whole on the state of the Union, (Mr. BLAINE in the chair,) and resumed the consideration of the bill (H. R. No. 1284) to change and more effectually secure the collection of internal taxes on distilled spirits and tobacco, and to amend the tax on banks.

The CHAIRMAN. The pending question is on an appeal from a decision of the Chair. The Chair ruled out of order an amendment moved by the gentleman from Maine, [Mr. PIKE,] to insert after section one hundred and

the House suspended further action upon the general bill and instructed the Committee of Ways and Means to bring in a specific bill relating to distilled spirits, tobacco, and banks. The Committee of Ways and Means, in pur suance of those instructions, prepared and reported a bill bearing this specific title: "A bill to change and more effectually secure the collection of internal taxes on distilled spirits and tobacco, and to amend the tax on banks." That bill was referred to the Committee of the Whole on the state of the Union, with precisely the same restrictions and limitations as those under which the Committee of Ways and Means acted in preparing the bill. The Chair rules that the Committee of the Whole on the state of the Union is no more competent to enlarge legislation embraced in this bill than was the Committee of Ways and Means in preparing it originally. On that ground the Chair rules the amendment of the gentleman from Maine [Mr. PIKE] to be out of order. From that decision an appeal is taken; and the question is, "Shall the decision of the Chair stand as the judgment of this committee?"

Mr. UPSON. I move that the appeal be laid on the table.

The CHAIRMAN. That motion is not in order, as the Committee of the Whole has no table. The Chair will further state. that while this amendment would of course be in order in connection with a general tax bill, if this provision be decided to be in order, then any amendment whatever, throughout the whole domain of taxation, would also be in order upon this bill, and it would be impossible to limit it to the objects for which it was prepared.

The question was taken upon sustaining the decision of the Chair; and upon a division there were-ayes 98, noes 21.

Before the result of the vote was announced,
Mr. HOLMAN. I call for tellers.
Tellers were not ordered.

So the decision of the Chair was sustained. The CHAIRMAN. There were two or three amendments reserved last night, the first being that of the gentleman from West Virginia [Mr. HUBBARD] to section ninety-one.

Mr. HUBBARD, of West Virginia. I move to amend section ninety-one by inserting after the word "boxes," in line three, the words " or packages;" so as to read:

That from and after the passage of this act all cigars shall be packed by the manufacturers in boxes or packages not before used for that purpose, &c.

By the adoption of this amendment this bill will correspond in this respect with the law as it now stands, under which the cigar manufacturer has the privilege of packing his cigars in boxes or packages. Thus the cigar manufacturer will have the same privilege allowed to manufacturers of tobacco and snuff under the present bill, under which they can pack their tobacco and snuff in packages.

I am advised by the assessor of cigars in the district which I represent that if such an amendment as I pro.rose be adopted there will be no more opportunity for fraud than the manufacturer will have under the bill as it now stands. Common cigars sold, before the war, at from two dollars to two dollars and fifty cents per thousand, and if there were no internal taxes upon the article, would sell now at three and a half or four dollars per thousand. The manufacturers believe that if they be required to pack these cigars in boxes the effect will be simply to add a very considerable percentage to the price; and they regard the requirement as altogether unnecessary. I trust that the ufacturers of cigars may have the same priviamendment may be adopted, so that the manlege allowed by this bill to manufacturers of tobacco and snuff, and may pack their cigars in boxes or packages at their option.

Mr. SCHENCK. Mr. Chairman, this is simply a proposition to break up the whole provision in regard to the tax on cigars. We propose to collect the tax by means of stamps on the boxes. The gentleman proposes to allow cigars to be sold in bundles or packages, with no limitations as to what the packages are to be or how the stamps are to be affixed. This is one of the subjects upon which we had the cigar-makers, tobacconists, &c., before us; and it was agreed all round that in order to collect the tax by stamps-the system which they all wanted-it would be necessary to define what should be a box, how much a box should contain, and everything else necessary for the security of the revenue. I hope the amendment will not be adopted.

The amendment was not agreed to.

The CHAIRMAN. The next amendment in order is that reserved by the gentleman from

Iowa, [Mr. PRICE.]

Mr. PRICE. I move to amend section ninety-three by striking out the following proviso:

Provided, That from and after the passage of this act the duty on all cigars imported into the United States from foreign countries shall be two dollars per pound and twenty-five per cent. ad valorem.

The effect of this proviso is to reduce the tariff on imported cigars. By striking out this proviso, as my amendment proposes, we shall leave the tariff on foreign cigars just what it is now. I am opposed to reducing the tariff upon imported cigars; I propose to leave it as it now is; so that if foreign cigars are imported into this country they shall pay the duty imposed by the existing law.

Mr. SCHENCK. Mr. Chairman, my only desire is the House shall know what is proposed and then submit it. The tax on domestic cigars is five dollars a thousand and on foreign cigars three dollars per pound and fifty per cent. ad valorem. Cigars at the time of importation weigh only twelve pounds. They run down to eight or nine when they are dry, and up to fourteen when very green. At fourteen it would be forty-two dollars in gold or $58 80 in currency. Fifty per cent. ad valorem or $42 40 in gold, the average price in Cuba, is twenty dollars in gold or $26 26 in currency. Thus cigars coming from Cuba pay $84 80, and from that down to seventy-six dollars. Now, sir, what has been the consequence? Instead of being a protection to the domestic The tariff is so high that it has defeated itself. manufacturer, it has stimulated smuggling in all variety of cunning to get imported cigars into the country without paying duty. It has in a great degree injured and interfered with the domestic trade. In the interest of the home manufacture I think it better to adopt the provision of the bill. If the committee think differently, they will refuse to adopt this provision.

Mr. MYERS. I rise to a point of order. This portion of the paragraph which it is proposed to strike out I hold not to be in order, as it is not germane to this bill. This is a tax bill, and that provision is in relation to the tariff.

The CHAIRMAN. It was not reserved

when the bill was sent to the Committee of the Whole; and the committee is not competent to decide out of order anything sent to it.

Mr. MYERS. When this section was reserved the point of order was also reserved.

The CHAIRMAN. At no time since the bill was committed to the Committee of the Whole could the point have been well taken. It should have been reserved when the bill was committed to the Committee of the Whole.

Mr. WASHBURN, of Massachusetts. Imove to amend the text of the proviso by making the specific tax $2 50 instead of two dollars. Mr. Chairman, whatever may be said in regard to the propriety of including a tariff item in an internal tax bill, I wish to call the attention of the Committee of the Whole to the facts. In the first place, as the tariff now stands, and as it has stood for several years, the tax duty upon imported cigars is three dollars a pound and fifty per cent. ad valorem, and upon imported leaf tobacco it is thirty-five cents a pound. That being the case the manufacturers in this country have imported more leaf tobacco during the last year, and under this tariff we have manufactured more tobacco of our own raising than imported tobacco than at any previous day.

Now, I supposed if there was no other question upon which the manufacturers were more agreed it was upon this subject of the tariff. It seems the committee reduced it nearly one half, from three dollars to two dollars, and from fifty per cent. ad valorem to twenty-five per cent. ad valorem. The effect will be, with a tariff of thirty-five cents upon leaf tobacco, to|| destroy this manufacturing interest in this country.

I now submit to the committee while it may be proper to reduce it to some extent, still they have reduced it to such an extent that it will destroy the manufacture of cigars in this country. I therefore hope my amendment will be adopted. That makes it $2 50 per pound and twenty-five per cent. ad valorem.

We are told imported cigars cost $84 40. When you put the duty on leaf tobacco cigars manufactured here of the same quality cost seventy-five to eighty dollars. With the reduction of the duty on imported cigars as proposed by the committee it will destroy the domestic manufacture. I submit, sir, whether this tariff item, which has nothing to do with this tax bill, should be deferred to the consideration of the general tariff bill. We will only have to wait three or four months. I hope if insisted on that my amendment will be adopted.

Mr. ALLISON. I rise to oppose the amendment, and I do so in the interest of the revenue. Every gentleman on this floor knows very well that to-day there are as many imported cigars smoked in this country as at any former period, probably more. Yet the statistics of the Department show that we import only a very few million cigars. The internal tax by this bill on imported cigars is five dollars a thousand, making really an increase upon the import duty to that extent. We compel every cigar importer, in addition to the present import duties, hereafter to pay five dollars. In other words, he must pay on his imported cigars just as much as the home manufacturer pays. Now, take the five dollars and add it to the present duty. The tariff to-day is $83 40, (fifty-six dollars in gold,) with five dollars currency added upon every thousand cigars imported, estimating an average cost of forty dollars per thousand, the average cost of production in Cuba is forty dollars a thousand; so that to-day we have an import duty of two hundred per cent. on cigars. Now, what is the effect? The effect is that nearly all the cigars that come into the country are smuggled in the interest of the cigar manufacturers of this country. I suggest that this duty should be reduced. I do not wish to discourage the manufacturer here.

Now, what reduction do we propose in this bill? A reduction so that the tariff duty on imported cigars shall be one hundred per cent. or more on the cost of those articles. Is not

that enough? They pay thirty-five cents a pound for imported tobacco. That is only seven dollars on each thousand cigars, estimating twenty pounds of tobacco to the one thousand cigars. Add to that the five dollars tax, and the producer makes cigars from imported tobacco at a cost of twelve dollars a thousand, to which should be added some fif teen or twenty dollars for the labor of manufacturing, making the entire cost from forty to fifty dollars a thousand upon an average cigar made in this country from Havana tobacco.

Mr. WASHBURN, of Massachusetts. Instead of forty or fifty dollars, the manufacturers say they cost them over seventy dollars a thousand.

Mr. ALLISON. I ask my friend to tell me what it costs to manufacture a thousand cigars?

Mr. WASHBURN, of Massachusetts. The labor on the best cigars costs twenty-two dollars a thousand.

he is concerned he will consent to that amendment, which he had not understood.

Mr. PRICE. I wish to ask the gentleman a question. I am very glad he has made the argument which he has. I would ask him whether under the present law we are not importing not only the raw material from Cuba to this country to be manufactured, but also bringing the operatives and makers of cigars? And I would ask him further, whether his object would not be better accomplished by the adoption of my motion to strike out the provision and let the law stand as it is?

Mr. KELLEY. I began by stating that I thought this provision was improperly here and ought to be stricken out; but as a matter of compromise I would take the amendment of the gentleman from Massachusetts, [Mr. WASHBURN.] I think the provision ought to be stricken out, or that the committee ought to withdraw it. But as it is too late to make a motion to strike out and the committee is indisposed to withdraw it, I accept the amendment of the gentleman from Massachusetts as a compromise. The tariff, as it stands, has introduced into the country a new branch of industry, and will give fine American cigars the world over the high reputation that the choice brands of Havana's have hitherto enI joyed. I now withdraw the amendment to the amendment.

Mr. ALLISON. Very well; I will take the gentleman's own figures. The labor twentytwo dollars and the tobacco seven dollars make twenty-nine dollars, to which should be added the original cost of the tobacco and the internal tax. Now, we give one hundred per cent. protection, and I submit that is enough.

[Here the hammer fell.]

Mr. WASHBURN, of Massachusetts. withdraw the amendment.

Mr. KELLEY. I renew it. There is such a thing, Mr. Chairman, as value in stability in legislation, and the proposition now before the House illustrates the want of stability in our legislation—at least on the subject of cigars and tobacco. It is too late now, I suppose, to make the point of order that this provision is improperly here in an internal tax bill. That it belongs to a bill of another class is palpable. As it is not legitimately in this bill, it would, in my judgment, be but proper for the committee to withdraw it. There is another bill, I understand, pending before the committee now in which it would be proper to present it.

Sir, the provisions of the tariff law, which it is proposed thus irregularly to modify, will, if maintained, break up the importation of high-priced cigars and establish their manufacture in this country. The chairman of the committee, in his opening address on the presentation of the original bill, said that the importation of high-priced cigars through the custom-house had almost ceased; but he did not state what he might have done, that the importation of the tobacco of which they are made has very largely increased, and that the hands that formerly made them in Havana are now making them in our cities. Thus the house of Fuguet & Sons, of Philadelphia, formerly among the largest importers of fine cigars into this country, are now large manufacturers of fine cigars. When Congress broke up their business as importers of cigars they took to importing the finest leaf, and imported also large numbers of Havana cigar-makers from that city, and they are now, I might almost say, by compulsion of Congress, very large importers of leaf and large manufacturers of the finest Havana cigars; so that those who make them are consumers of our cereals, our other taxable productions, and of foreign goods that have paid duties at an American customhouse. If the clause is not withdrawn or stricken out, I ask that the amendment of the gentleman from Massachusetts [Mr. WASHBURN] may be adopted, and that we shall not drive these recently imported citizens back to their native land, to manufacture goods for our consumption. We are deriving in internal taxes and customs revenue more from fine Spanish cigars to-day than we were under the old system. I would ask the gentleman from Massachusetts what is his precise amendment?

Mr. WASHBURN, of Massachusetts. To add fifty cents to the two dollars.

Mr. KELLEY. That is as I believed it to be. I understand the gentleman from Iowa, [Mr. ALLISON.] who represents the Commnittee of Ways and Means, to say that so far as

||

[Here the hammer fell.]

Mr. MYERS. I renew it. The amendment I had desired to see adopted is one making it $2 50 per pound and fifty cents ad valorem. That, I think, is what it ought to be. I never would have consented to pass this section, hurrying through as we did last night, without making the point of order that a tariff clause had nothing to do with the bill, but for the fact that I understood we should return to it.. The chairman of the Committee of Ways and Means makes a new argument against the tariff. He says that we are already getting a large number of these imported cigars. I do not want them to come in and compete with our own industry. I want no tariff that will allow that. Let those who wish to smoke imported cigars pay a little higher. From every part of the country we are flooded with petitions to protect this industry. I propose to do it, and I believe this House, if it understands the question, will do it. Now, I have the figures here in answer to the figures of the chairman of the Committee of Ways and Means:

Cost of pure Havana tobacco made in the United States
into cigars.
Wrappers, six pounds, at $3 50..
Fillers, fourteen pounds, at $1 40..

Average cost of making.....
Packing and shading......
Ten boxes with trimming.
Stripping stems.........
Tax

Say

$21.00

19 60

40 60

20.00

5.00

2.50

1.00

5 00

$74 10

So that you can import one thousand Havana cigars for two dollars less than you can make up the same grade of tobacco here, and as where the wrappers are of Connecticut seed-leaf, Pennsylvania or Ohio tobacco the cost is but $9 50 less per thousand, you will have the fine grade Havanas, with their great prestige, imported at only seventy-five cents more per hundred than a commoner grade of American cigars. Certainly this is sufficient protection. To obtain this protection I last night reserved the

right to amend this section when the House would be fuller and better able to give the subject attention. I still believe my point of order well taken, that a tariff clause is not germane to a tax bill; but if a reduction of duty is insisted on at least let us not go below the amendment which I have just renewed, that this duty on foreign cigars shall be $2 50 per thousand and twenty-five per cent. ad valorem. When the addition of the five-dollar tax is considered this will still reduce the duty $4 50 per thousand on imported cigars. Certainly this is enough, and I hope the House will so consider it.

I hope that the committee will not adhere blindly to every proposition that is contained in this bill. That committee comes in here from year to year with additional legislation, acknowledging by so doing that they have made mistakes. If nothing better can be obtained, I hope this amendment will become the law.

The CHAIRMAN. The Chair desires to state to the gentleman from Pennsylvania [Mr. MYERS] that that gentleman is under a misapprehension in regard to the point of order. The gentleman from Pennsylvania is minuted upon the Clerk's record as having reserved the right to move an amendment to this section. The gentleman has no right on any parliamentary point, because the point could not be made in Committee of the Whole, not having been reserved at the time the bill was referred to the Committee of the Whole.

Mr. MAYNARD. Upon that point the Chair will recollect that I arose in my place last night and announced that I would reserve the right to make a point of order on this|| proposition. The Chair intimated that the right to make such a point must be first reserved in the House. It would, perhaps, have been time enough to make that decision when the point was made. I merely said that I would reserve the right to make it.

The CHAIRMAN. The gentleman from Pennsylvania [Mr. MYERS] has made the point, and the Chair has ruled upon it.

Mr. MAYNARD. I rise to oppose the amendment, and also to oppose the entire proviso of this section. It is due to myself to say that I was not aware that this proviso was in this bill until I saw it in print. I shall add very little to what has been said upon the subject of the duty on cigars. The principal objection which I shall now urge is, that in my opinion this is a provision which has no business in this bill.

Mr. ALLISON. Will the gentleman yield to me for a question?

Mr. MAYNARD. Undoubtedly. Mr. ALLISON. Do we not by this very bill add five dollars per thousand to the duty on imported cigars, and by this very section?

Mr. MAYNARD. I do not so understand it. Mr. ALLISON. I understand it so perfectly. Mr. MAYNARD. I do not understand that to be the effect of it. But even if it is, as I was remarking by way of apology, this particular feature of it had escaped my attention, and I was not aware it was in the bill until I saw a printed copy of it. Now, I object to its being here as a part of this bill, proposed as it was under the restricted and limited instructions of the House, which instructions would exclude it, and which provision the Chair informs us would be ruled out of order had that point been made at the proper time. But I am opposed to introducing such a provision into an internal tax bill under any circumstances. Duties on imports and internal taxes should be kept separate and distinct as well in the enactment and passage of the law as in the administration of the law. As the gentleman from Pennsylvania [Mr. WOODWARD] observed a few minutes ago, the Committee of Ways and Means have officially announced in the House their intention to ask leave to introduce a tariff bill, and to invoke action upon it. I trust that permission will be granted by the House, that the Committee of Ways and Mears will act under it, and that the subject of the tariff will come up, and that before this session closes.

At that time this subject of the duty on cigars can be considered. That will be the time and that the place for considering this subject. If the present duty is too high, then reduce it. Arguments on the one side or the other will be pertinent at that time, and will be germane to such a bill. But they are neither pertinent nor germane to this bill, which is one relating to the internal taxes of the country.

I am reminded that in the bill reported by my colleague on the Committtee of Ways and Means, [Mr. MOORHEAD,] it is proposed to reduce the present duty on cigars below what it now is. On investigation and examination it may be found proper to concur in the action so recommended. But my objection is that such a provision is utterly out of place here in this bill; that it is a stranger and an outlaw; that it has no business here, and that it ought not to be entertained in connection with this bill. I hope, therefore, that the Committee of the Whole will concur in the motion of the gentleman from Iowa, [Mr. PRICE,] to strike out this proviso, and we can incorporate it in the tariff bill when it comes up for consideration.

Mr. O'NEILL. Technically as a parliamentary point I do not care whether this provision remains in the bill or not. If I thought we could make a change in the tariff in this respect I would say let us do it here and now, without regard to the question of order which was raised. I am very anxious that not only upon manufactured tobacco, but upon every other article which can be made in this country by our own people, there should be a tariff high enough to protect American industry, and I do not care in what kind of a bill we get it. By striking out this proposition of the Committee of Ways and Means to reduce, the duty from three dollars per pound and fifty cents ad valorem to two dollars per pound and twenty-five cents ad valorem, we are thus far protecting the men and women who are toiling in cigar manufactories against foreign competition and capital. Although I am in favor of striking out these few lines, I am not even in favor of the amendment offered by my friend from Massachusetts [Mr. WASHBURN] unless I find we cannot succeed in keeping in force the existing duty. I have become convinced that the Thirty-Ninth Congress did right in not reducing the tariff upon cigars, and it is only necessary to know to be convinced of that fact that now there is invested in many of our dis tricts a vast amount of money, giving work to hundreds of people in making up tobacco into various shapes, and especially into cigars, who heretofore could find very little to do, and whose occupation was almost gone. Why? For the reason so plainly indicated in the remarks of my colleague, [Mr. KELLEY,] that the men who imported cigars see they can use their capital to more advantage in Philadelphia by importing it in the leaf and manufacturing it where it is consumed. I do not mean to be understood as intimating that Philadelphia is the only locality in this country where American cigars are made or where American tobacco is manufactured, but I want to say that in our city the manufacture of cigars is carried on by such firms as the one mentioned by my colleague, employing hundreds and thousands of men and women, and even children. Then do not let us diminish their work by legislating as proposed by the Committee of Ways and Means. I am in favor of the duty remaining just as it is. I am sure those who consume foreign tobacco made up before importation will not complain of Congress for trying at least to encourage the industricus among our own citizens. Many of the smokers of imported cigars will, if by our cherishing home industry we can improve the growth of American tobacco by encouraging the planter and farmer, after awhile use it as it comes from our own soil, and already are enjoying American cigars made of foreign tobacco in American workshops.

We are

sentatives in an American Congress. endeavoring to uphold and stimulate the indus tries of our country. We are endeavoring, or we should be, to encourage every branch of manufacturing which can by any possibility be carried on by our own people. I represent a district in which the manufacture of cigars is carried on to a very great extent, greater, perhaps, than in many other districts in Pennsylvania; among my constituents in that are hundreds and thousands of people who are in some cases working for men who have heretofore imported cigars very largely in making what is called the American article, which I believe will, in a few years, comparatively drive out of the market all other kinds. I believe that most of us are learning to smoke American cigars; and even those who think the imported are better, will at last, if we do not legislate unwisely, come to believe that we can grow tobacco here excelling much of the foreigu tobacco. I would prefer the striking out of the paragraph which would reduce the duty and leave it as in the present law, to voting for the amendment of the gentleman from Massachusetts, [Mr. WASHBURN,] but will vote for his amendment if I can do no bettter. In other words, I would prefer the duty at three dollars per pound and fifty per cent. ad valorem, than at $2 50 per pound and twenty-five per cent. ad valorem.

[Here the hammer fell.]

Mr. MOORHEAD. I rise to oppose the amendment pro forma. I desire to have this item and two or three similar items stricken out of this bill, for the reason that they properly belong to a tariff bill, not to this bill, and have no business here.

Now, sir, I know that it is very common and very proper for members of a committee to support the action of the committee in the House. I have endeavored to do so generally, so far as I could do so with propriety. In this case I feel that I am entirely released from any obligation to support this item, for when it was introduced in the committee I told my colleagues that it was not germane; that we had no right under the rules of the House to introduce a tariff provision into an internal revenue bill; and that I would make objection to the provision whenever the bill should be reported to the House, knowing that the Speaker would rule it out. But I happened to be absent when the bill was reported. It appears that the bill is now in such a position that the provision cannot be ruled out on a point of order. But it is very easy for the Committee of the Whole to get out of the diffi culty by striking out the provision; and as it does not properly belong in the bill, as it is an overturning of our whole system of legislation, mingling together two incongruous subjects, I hope the committee will strike it out. And just at this point I would appeal to the chairman of the committee, who is so well versed in matters of this kind, to give us his opinion whether this proviso legitimately belongs in this bill or not.

I thought it should have never gone into the bill. I presented the views, however, of the committee.

Mr. HOOPER, of Massachusetts. If the objection of the gentleman from Massachusetts refers to the internal tax of five dollars being applied to the imported article

Mr. MOORHEAD. I am just coming to that. The chairman says it is legitimate to this bill because it puts five dollars tax upon imported cigars. My objection is as I have stated it. I do not want a tariff item in an internal tax bill. The sub-committee of the Committee of Ways and Means have acted on this subject and have recommended a reduction of the duty to some extent on these cigars. I hope, therefore, this item, which seems to trouble us and is acknowledged by the best parliamentarians to be out of order in this bill, will be stricken out.

Mr. ALLISON. I only desire to add a word to what I have said before. I do not think gentlemen understand the question involved. My friends from Tennessee and Pennsylvania on the Committee of Ways and Means undertake to carry their point on a technical point. They forget we have imposed a tax of five dollars on imported cigars.

Mr. MOORHEAD. We did not forget it. Mr. ALLISON. I cannot yield. Why do we put five dollars upon them? Because we have adopted a new system of stamps, and we put the same amount on imported cigars as upon manufactured cigars. Shall we not beside reduce an onerous import duty? Now, I stand here as much as any man in favor of protecting the cigar manufacturers of this country. This provision is to do away with the smuggling of imported cigars. Everybody who knows the A, B, C of tariff questions knows there are more cigars smuggled than pay duty. In 1860 we imported five hundred millions of cigars which paid duty. As many are smoked now as then, but a very small amount of imported cigars pays duty. The result is they come in without paying any duty, and are a serious injury to our domestic manufacture. I am willing to be fair; I am willing to adopt the amendment of the gentleman from Massachusetts of $2 50 a pound upon imported cigars. I am not surprised the gentleman from Pennsylvania should insist this should go into the tariff bill. He would have a wall around the country and all importations prohibited. The duty now is two hundred per cent. and defeats the object sought to be accomplished. The same quantity of cigars is imported, but they are smuggled and do not pay duty.

Mr. MOORHEAD. The gentleman says this stamp tax is an import duty. I thought he was better informed. He has been on the Committee of Ways and Means for years. I have sat beside him and opposite him, and I am sorry he should come here and expose him. self in this way.

[Here the hammer fell.]

The amendment of Mr. WASHBURN, of Massachusetts, was agreed to.

Mr. PRICE called for tellers on his motion to strike out.

Tellers were ordered; and Mr. PRICE and Mr. ALLISON were appointed.

The committee divided; and the tellers reported-ayes 51, noes 52.

So the amendment was rejected. Mr. HOLMAN. I submit the following amendment:

And be it further enacted, That there shall be assessed and levied on the interest and interest coupons accruing on all bonds, the interest on which is payable at the Treasury of the United States, an annual tax of sixteen and two thirds per cent., which tax shall be withheld by the proper officer of the Treasury at the time of the payment of such interest or coupons. The tax hereby provided for shall be withheld from the interest which shall become due on and after the 1st day of November, 1868.

Mr. GARFIELD and Mr. SPALDING raised the point of order that the amendment was not germane to the bill.

The CHAIRMAN. The Chair sustains the point of order.

Mr. HOLMAN. I rise to a point of order. When the original bill was pending I sought an opportunity to offer this proposition, and the chairman of the committee [Mr. SCHENCK] stated that inasmuch as it was desirable to dispose of the section then pending, he would allow me the opportunity of submitting the amendment at a subsequent time. I submit

that inasmuch as this is really a continuation of the same bill, I should have permission to offer it now.

The CHAIRMAN. The chairman of the Committee of Ways and Means had no power to make any promise to bind the House. The Chair rules it out of order.

Mr. HOLMAN. I appeal from the decision of the Chair.

The CHAIRMAN. The Chair will not repeat the grounds upon which he made a similar decision this morning.

The question being taken on sustaining the decision of the Chair, it was sustained-ayes 91, noes 16.

Mr. ROBINSON. I move to insert after section one hundred and seven the following as a new section:

SEC.. And be it further enacted, That no stamp under the internal revenue law shall be required on any certificate or ticket given by pawnbrokers for the article pledged.

I believe this is in order. We have got through with the subject of cigars, and we are now proceeding to the consideration of banks.

Mr. BOUTWELL. I raise the point of order that this is not germane.

The CHAIRMAN. The Chair sustains the point of order.

Mr. ROBINSON. It is important that this should pass, and I give notice that I intend to bring it in after we dispose of the matter of press it at some place. Will it be in order to

banks?

The CHAIRMAN. It will not be in order at any time.

Mr. MOOREHAD. Will it be in order to have a vote in the House on striking out that section in relation to cigars?

The CHAIRMAN. It is competent for the House to allow the committee to vote, but not for the committee to allow the House to vote. The Clerk read as follows:

Banks and Bankers.

SEC. 108. And be it further enacted, That there shall be levied, collected, and paid a tax of one twelfth of one per cent. each month upon the average amount of the deposits of money, other than public money of the United States, subject to payment by check or draft, or represented by certificates of deposit or otherwise, whether payable on demand or at some future day, with any person, bank, association, company, or corporation engaged in the business of banking, and a tax of one fourth of one per cent. each month on the average amount of all deposits of public money in their possession to the credit of the Treasurer or any disbursing officer of the United States; and a tax of one twenty fourth of one per cent, each month, as aforesaid, upon the capital of any bank, association, company, or corporation engaged in the business of banking, and on the capital employed by any person in the business of banking, beyond the average amount invested in United States bonds; and a tax of one sixth of one per cent. each month upon the average amount of circulation issued by any bank, association, corporation, company, or person, including as circulation all certified checks and all notes and other obligations calculated or intended to circulate or to be used as money, but not including that in the vault of the bank, or redeemed and on deposit for said bank. And a true and accurate return of the amount of circulation, of deposit, and of capital, as aforesaid, and of the amount of notes of persons, State banks and State banking associations, and of States, cities, towns, or other municipal corporations, paid out by them for the previous month, shall be made and rendered monthly by each of them to the assessor of the district in which such bank, association corporation, or company may be located, or in which such person has his place of business, with a declaration annexed thereto, verified by the oath or affirmation of such person, or of the president or cashier of such bank, association,corporation, or company, in such form and manner as may be prescribed by the Commissioner of Internal Revenue. And for any refusal or neglect to make or to render such return and pay the tax, any such bank, association, corporation, company, or person so in default shall be subject to and pay a penalty of $200, besides the additional penalty and forfeitures in other cases provided by law; and in default of such return the several amounts subject to tax shall be estimated by the assessor or assistant assessor on the best information he can obtain. And in the case of banks with branches, each branch shall make a separate return. and the tax shall be assessed on each severally. And

so much of the forty-first section of the act to provide a national currency secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof, approved June 3, 1864, as imposes a tax on the banks organized under that act, and requires returns to be made to the Treasurer of the United States, be, and is hereby, repealed: Provided, That the deposits in associations or companies known as provident institutions, savingsbanks, savings funds, or savings institutions, having no capital stock and doing no other business than receiving deposits to be loaned or invested for the sole benefit of the parties making such deposits, without profit or compensation to the association or company, shall be exempt from tax on so much of their deposits as they have invested in securities of the United States, and on all deposits less than $500 made in the name of any one person; and the returns required to be made by such provident institutions and savings-banks shall be made on the first Monday of January and July of each year, in such form and manner as may be prescribed by the Commissioner of Internal Revenue.

Mr. POMEROY. I move to strike out the foregoing section, and if the committee shall see fit to do it, I shall move to strike out the next. I will state briefly my reasons for so doing. I wish the committee to consent to take a vote on this motion, so that if it prevails no time need be wasted in amendments. Now, I appeal to the fairness and courtesy of the committee. The Committee of Ways and Means some weeks since presented a bill covering the whole system of internal revenue, based upon two grounds: first, taking the subjects of distilled spirits and tobacco in which great frauds exist, and not only amending the tax upon those articles, but also providing for a new administration of the revenue system by which that tax was to be collected. They further undertook in that bill to readjust and redistribute the whole internal revenue tax. After spending some ten days on that bill the Committee of the Whole decided that it should be laid aside, and ordered the Committee of Ways and Means to report a bill to revise the tax on distilled spirits and tobacco, and also to provide a new administrative plan for collecting it. It appears by the Journal that some time afterward a resolution was by unanimous consent in some manner introduced and passed instructing the committee also to report upon banks, a subject having no more connection with the subject which the House had seriously determined that the Committee of Ways and Means should report this bill upon than it would have been to have referred to them the subject of the tax upon manufacturers or upon brokers or special taxes.

of

Now, I do not wish to impugn the motives any person in the matter; but I need not say to any gentleman here that no such resolution as that could have passed, had the House known what was before it, by the unanimous consent of the House. It was entirely foreign to the bill which the House had determined they would act upon at this session. Without going now into the question whether or not the taxes upon banks are such as they ought to be or not, I submit that they are already taxed by law, and that there is no interest in the United States where taxes are more fairly and honestly paid than those of the banks, because there is no opportunity for concealment or for fraud. Every dollar of their circulation is known at the Treasury Department. Every dollar of their Government deposits is known at the Treasury Department. And of their individual deposits sworn statements have to be periodically made. Every dollar of their taxes is being collected. Nobody pretends that any frauds are being perpetrated under the present law. And yet under that resolution the interests of these banks are dragged in here to be revised in a bill the only object of which is to break up the whisky ring and to prevent tobacco frauds. Now, without going into the subject of what the taxes are or ought to be, I submit to the committee that as an act of courtesy to the committee having charge of these interests in this House, and as an act of courtesy toward the banking interests, this section should be stricken out, and should be considered with the other great industrial interests of the country when we come to consider the special taxes, the manu

facturers' taxes, the tax on brokers, and other subjects which are cognate to it.

Mr. SCHENCK. I do not understand the gentleman from New York [Mr. POMEROY] as reflecting in any way on the Committee of Ways and Means in this matter.

Mr. POMEROY. I stated distinctly that the Committee of Ways and Means had no thought of any such thing.

Mr. SCHENCK. The Committee of Ways and Means retired with as much equanimity as they could summon for the occasion to reconsider the whole matter of taxes so far as whisky and tobacco were concerned, supposing that their duties were confined to those two subjects of taxation. Two days afterwards, they received unexpectedly a resolution, which we afterward understood passed the House by unanimous consent, instructing them also to consider and report upon banks in connection with the other two subjects. That we did, and the result is before the House. While I am up I will simply say in regard to this section that it is the section just as it was agreed on in Committee of the Whole, with the single exception of an increase in the tax on circulation. The Committee of the Whole had amended the original report of the Committee of Ways and Means by adding three per cent. upon Government deposits, doubling the tax on private deposits, and striking off half of what had been recommended on circulation. committee restored the tax on circulation, and with that single change reported it back as it had passed the Committee of the Whole take its chance again. I will only say that while it is for the Committee of the Whole or for the House to determine whether or not they will retain this provision in regard to banks, it is my duty to call attention to the effect of its action.

The

I have already explained to the House that the laying aside of the other portions of the billof the general bill introduced by the Committee of Ways and Means and confining legislation to distilled spirits and tobacco-takes away an advantage of about seventeen million dollars in the estimated revenue that we should have derived from that bill. But if we include banks, that amounts to nearly four million dollars out of the $17,000,000. If this should remain, the deficiency, comparing our present legislation with the legislation originally proposed by the Committee of Ways and Means, would be a little short of $12,000,000. If the banks are dropped also, the deficiency then, as compared with that bill, will be about seventeen million dollars. It is for Congress to determine whether they can afford this, or how far it ought to be considered in the determination of the question whether you will or will not strike out those sections in relation to banks. I repeat that this section was put in here simply by order of the House. I am asked what is the difference between the present tax on banks and the estimated tax to be derived should this section be retained in this bill. I have already stated that the increased revenue to be so derived will be nearly four million dollars. That is, taking the tax upon deposits of public moneys, the increased tax upon private deposits, and the increased tax on circulation would make the increased amount to be derived from banks about four million dollars. And there is this further provision to be borne in mind: we include in the internal revenue system the national banks as well as the State banks.

Mr. DELANO. I move to amend this section pro forma by striking out the last word. There is no member of this House who has a more sincere respect for the opinion of the chairman of the Committee of Ways and Means [Mr. SCHENCK] than I have, or who listens to what reasons he has to assign for his measures with more desire to understand them. But I want to suggest to him that the reason he has last assigned for this tax upon banks is fallacious and must be unsatisfactory.

deposits?

Mr. SCHENCK. I make no apology for the introduction of this provision. We were ordered to introduce it, and we should not have introduced it without the order of the House.

Mr. DELANO. I know that the Committee of Ways and Means were instructed by an order of the House to tax banks. The committee, however, was not instructed to tax them unreasonably. The resolution relating to that subject was introduced under circumstances alluded to by the honorable gentleman from New York, [Mr. POMEROY;] it was extorted or obtained from the House without the consent of the House.

Mr. INGERSOLL. Allow me to correct the gentleman. That resolution was adopted by the unanimous consent of the House.

Mr. DELANO. I am speaking of things as they are in fact, not as they are in mere name. I mean the substance of things hoped for; and I allude to the evidence of some things not seen. As I understand it, this section provides a tax of one per cent. upon private deposits, a tax of three per cent. on public deposits, a tax of one per cent. upon capital, and a tax of two per cent. upon circulation; the total amount being seven per cent., and amounting to one hundred per cent. more than the pres ent tax. Now, no one who will examine this section will fail to see that the animus of it is the destruction of the banking system. If that is the purpose of the House and country, then, gentlemen, lay your hands on the system and destroy it. What you will have afterward it is not for me to predict, for I am not authorized or empowered to prophecy upon this subject. But that is the purpose of the bill. I know it is very popular to attack banks. It is always, therefore, a pleasant recreation for politicians who are seeking notoriety. I know also, what 1 desire to say here and have go before the country, that at the present moment the banks pay better for the revenues of the country than capital in any other form. Your banks now pay in the form of taxation, local and national, $18,838,430 per annum. The entire interest on the amount of bonds which are deposited as security for the circulation of these banks amounts only to about eighteen million dollars. It thus appears that the banks pay a larger sum for taxes than the total amount of interest on all the bonds which they hold as the basis of their circulation. In the State of Ohio the tax upon banks, State and national, upon the average throughout the State, for it varies in different parts of the State, amounts to about six and a half per cent. In the county in which I live it amounts to over six per cent. upon the amount of capital invested in your banks. The banks are therefore at the present day, in the way of con tributing to the revenues of the country, the very best property you have. For example, in the State of Ohio-and I presume the case is the same elsewhere-the amount of bonds deposited with the National Government as a security for the circulation becomes a capital for taxation, which is not the case with bonds in the hands of private individuals. Every dollar which you call out and put into your banks in this way makes a source of local taxation and of support to the Government. [Here the hammer fell.]

Mr. INGERSOLL. Mr. Chairman, if I am not mistaken, on the day on which the original tax bill reported from the Committee of Ways and Means was recommitted, this section on banks had already been acted upon and adopted by the Committee of the Whole. Mr. PRICE. As it is now?

Mr. INGERSOLL. Nearly as it is now.

This

Mr. INGERSOLL. The three per cent. tax on Government deposits had been adopted. Mr. PRICE. That is not in this bill. Mr. INGERSOLL. It is in this bill. section, as now reported, is very nearly in the same form as the section agreed to by the Committee of the Whole when the original bill was under consideration. The bill was recommitted, gentlemen voting for that motion from various motives. Some undoubtedly supported the motion with the intent to defeat any legislation on the subject. Those largely interested in manufactures, that interest having been relieved from the five per cent., did not wish any new tax bill; they were satisfied with existing legislation. Those who desired that the tax on whisky should remain at two dollars did not want any tax bill which would reduce that tax. Those who did not want to have the bank interest disturbed had no reason to desire any modification of the revenue system. So, acting from various motives, a majority of the House decided to recommit the bill, providing, however, that a revision of the system of taxation of whisky and tobacco should be embraced in a new bill and reported to the House at some subsequent day.

Within two days after the action of the House to which I have referred, I presented, during the morning hour, a resolution giving the Committee of Ways and Means authority to embrace in the bill to be reported the subject of the taxation of banks. This resolution was read at the Clerk's desk in the hearing of the House. It was read a second time, in consequence of a suggestion that the gentleman from Indiana [Mr. JULIAN] had had a similar resolution referred at some prior time during the morning hour. That was discovered to be a mistake; and my resolution having been twice read, and objections asked for, no member objecting, the resolution was adopted unanimously. Owing to the circumstances I have stated, the resolution received more attention from the House than any resolution-causing no debate-which has been adopted during the present session.

In pursuance of that resolution the Committee of Ways and Means took jurisdiction of the subject, and they have reported these sections with the view of increasing the revenues of the Government from the national banks. The question is whether these banks, which can well afford to pay this additional tax, shall contribute four or five million dollars more to the revenues, relieving to that extent the various industries of the country, or whether we shall legislate in the interest of what is now a monopoly, an absolute monopoly, an aristocratic monopoly, that is making more money on its capital, invested on safer and more reliable and remunerative employment than is realized by any like amount of capital in the United States. I say without fear of contradiction that there is no $300,000,000 invested in any other business in the country with the same security and certainty that it will return a round sum to the investor as this banking capital. [Here the hammer fell.]

Mr. DELANO. I withdraw my amendment. Mr. PRUYN. I renew the amendment. Mr. Chairman, I think it does not matter very much from what quarter the resolution referred to emanated; but I am surprised that it came from the gentleman from Illinois, [Mr. INGERSOLL.] He has been appealing to this House to modify the taxation on a great interest which he represents, which modification I admit to be beneficial to the country as well as that particular interest; yet at the same time he turns round and attempts to impose an increased burden on another interest which is now paying fairly and squarely every dollar of taxation imposed on it. That at least is not fair play on the part of the gentleman from Illinois.

Mr. Chairman, one word on the subject of this bank tax. It is proposed to increase