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against frauds on the revenue. But after all it must be evident to every one that notwithstanding all the precautions to which you resort, notwithstanding all the building regulations and combination locks and everything else you have put into your bill, you must at last depend upon the good faith of the inspector. You must have some hold upon the inspector, or all your precautions will be worthless. You have provided every other precaution; but you have no sufficient precaution against his peculation. "Quis custodiet ipsos custodes ?" Who is to inspect the inspector? Nobody. Now, I propose, by my amendment, to obtain a hold upon these inspectors, so that if the only persons whom we can hold for the payment of this tax shall play false to the Government they shall be punished in a manner adequate to prevent the commission of the offense in the future.

Mr. ALLISON. I only desire to say to the gentleman from Pennsylvania [Mr. THAYER] that I think the object he has in view is provided for in section forty-six of this bill.

Mr. THAYER. I do not think that is the case. I think my amendment better be inserted, and then if it shall be found that it is already provided for in another part of the bill it can be changed afterward.

The amendment was agreed to.

Mr. SCHENCK. The very excellent amendment, as I regard it, of the gentleman from Pennsylvania [Mr. THAYER] which has just been adopted, reminds me of one I attempted to have made in the thirty-third section of this bill, and if I am permitted to move it now, I think the chairman of the Committee of Ways and Means [Mr. MORRILL] will not object to it. My amendment was to prohibit any one inspector being on duty more than sixty days continuously in any one distillery. I therefore ask permission to go back to the section I have|| named in order that I may renew the amend

ment.

No objection was made.

66

Mr. SCHENCK. I move to amend section thirty-three by inserting after the sentence ending with these words, but no compensation shall be allowed to such inspector for more than one inspection of such spirits," the words "and no inspector shall continue on duty at one and the same distillery for more than sixty days continuously." A large number of inspectors being employed, they may be changed from distillery to distillery without much inconvenience. As was remarked by the gentleman from Pennsylvania, [Mr. THAYER,] one of the great evils to be guarded against is the danger of collusion between the inspector and the distiller. Now, a distillery is a very seductive place, and an inspector who is coustantly associated with the distiller and his men may become more intimate with them than he should be.

Mr. ELDRIDGE. I would ask the gentleman if he thinks we cannot find men who will remain honest more than sixty days.

Mr. SCHENCK. I have no doubt there are those who would continue honest for a longer period than that; but there are many who cannot remain honest for a single day. Every member here knows the effect of constant association. A gentleman here who sits at the same desk with another does not like to vote against him; and when he feels compelled to do so, he gets as far over on the other side as possible. You do not like to vote against the man who messes with you, with whom you have sat day after day at the same table. And that is precisely the danger to be apprehended from these inspectors, from long association with these distillers. After a time they become intimately acquainted with them, and if they do not become attached to them, they are "hail fellows well met" with the distillers and their men. The Methodist church understands this perfectly well, and they do not allow one of their preachers to remain more than two years continuously with the same congregation. Mr. PRICE. The gentlemanMr. SCHENCK. I do not yield. Mr. PRICE. I only want to say

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Mr. SCHENCK. I will not allow myself to be interrupted.

Mr. PRICE. But the gent

The CHAIRMAN. The gentleman from Iowa [Mr. PRICE] is not in order, and will take his seat.

Mr. SCHENCK. There is a principle of human nature involved in this, whatever the gentleman from Iowa [Mr. PRICE] may think of it. Offering the amendment as I do in good faith, I hope the vote will now be taken, and the amendment adopted.

Mr. PRICE. I am in order now, I believe. I only want to say that the gentleman from Ohio [Mr. SCHENCK] is not posted on the subject of the Methodist church. He better make himself acquainted with that subject before he refers to it here.

The question was upon the amendment of Mr. SCHENCK.

Tellers were ordered; and Messrs. SCHENCK and GARFIELD were appointed.

Mr. MORRILL. The vote upon this amendment can be taken to-morrow. I now move that the committee rise.

The motion was agreed to. So the committee rose; and the Speaker having resumed the chair, Mr. DAWES reported that the Committee of the Whole on the state of the Union had had under consideration the

Union generally, and particularly the special order, being bill of the House No. 513, to amend an act entitled "An act to provide internal revenue to support the Government, to pay interest on the public debt, and for other purposes," approved June 30, 1864, and acts amendatory thereof, and had made commendable progress therein, but had come to no conclusion thereon.

And then, on motion of Mr. ELDRIDGE, (at ten o'clock p. m.,) the House adjourned.

PETITIONS, ETC.

The following petitions, &c., were presented under the rule and referred to the appropriate committees: By Mr. DARLING: The petition of Field & Evans, manufacturers of pearl buttons, in the city of New York, for an increase of tariff on pearl buttons.

By Mr. DELANO: The petition of Nathaniel Bedell, and 500 others, citizens and wool-growers of Huron county, Ohio, praying for increased duty on foreign wools.

By Mr. LAWRENCE, of Pennsylvania: The petition of citizens of Washington county, Pennsylvania, asking for an increase of duties on foreign wools.

By Mr. MYERS: The petition of Dr. Benjamin Malone, late paymaster United States volunteers, who was robbed of funds drawn to pay troops with, and whose claim for relief has been reported upon favorably by Judge Advocate Turner.

By Mr. SAWYER: The memorial of the board of directors of the Sugar River Valley Railroad Company for a grant of land to aid in the construction of the Sugar River Valley railroad, from Freeport, in Illinois, to Madison, in Wisconsin.

By Mr.SLOAN: The petition of the board of directors of the Sugar River Valley Railroad Company for a grant of land to aid in the construction of a railroad from Freeport, Illinois, to the city of Madison, Wisconsin.

By Mr. F. THOMAS: The petition of John Todd, praying compensation for services rendered to the Army of the United States during the late war against the southern rebellion.

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on my objection. I know that this sewerage bill does not interest the House; but it is desir able that it should be disposed of that other reports may be made. There are several committees that have been waiting for some time an opportunity to report.

It is, I observe, the general disposition of the House to take up the tax bill; and I will therefore withdraw my objection. In consideration of this, I trust the House will give unanimous consent that a morning hour of some early day, next Monday or Tuesday perhaps, shall be given to the disposition of the canal bill. The SPEAKER. What day does the gen tleman propose?

Mr. INGERSOLL. Tuesday.

The SPEAKER.

Is there unanimous con

sent that the morning hour of next Tuesday shall be devoted to the consideration of the canal and sewerage bill?

Several MEMBERS objected.

Mr. INGERSOLL. Well, then, say Monday.

The SPEAKER. Monday cannot be assigned for that purpose.

Mr. INGERSOLL. Well, I withdraw the request.

PASSPORTS.

Mr. WILSON, of Iowa, by unanimous cousent, reported back from the Committee on the Judiciary the bill (H. R. No. 568) entitled "An act to repeal section twenty-three of chapter seventy-nine of the acts of the third session of the Thirty-Seventh Congress relating to passports," with a recommendation that the amendment of the Senate be concurred in.

The amendment of the Senate was read, as follows:

Add at the end of the bill the words, "and hereafter passports shall be issued only to citizens of the United States."

The amendment was concurred in.

Mr. WILSON, of Iowa, moved to reconsider the vote by which the amendment of the Senate was concurred in; and also moved that the motion to reconsider be laid on the table. The latter motion was agreed to.

RAILROAD AND TELEGRAPII LINE.

On motion of Mr. DAVIS, by unanimous consent, Senate bill No. 123, entitled "An act grauting lands to aid in the construction of a railroad and telegraph line from the Central Pacific railroad in California, to Portland, in Oregon," was taken from the Speaker's table, read a first and second time, and referred to the Committee on the Pacific Railroad.

REPAIR OF POTOMAC BRIDGE.

Mr. STEVENS, by unanimous consent, reported from the Committee on Appropriations a joint resolution making an appropriation for the repair of the Potomac bridge; which was read a first and second time.

Mr. STEVENS. I hope the House will consent to consider and pass this joint resolution at the present time. The Long bridge has for a long time been out of repair, so as to be impassable. We are informed that if this appropriation be made, the bridge can be put in perfect order within a week, while if the work be delayed till the ordinary appropriation bill shall have passed, the necessary repairs cannot be made for some time.

The SPEAKER. The Clerk will read the resolution, after which the Chair will ask for objections, if any.

The joint resolution, which was read, provides for an appropriation of $10,000 to enable the Commissioner of Public Buildings and Grounds to place the Potomac bridge in such the work to be done immediately after the repair as to render it permanently passable, approval of this joint resolution.

Mr. INGERSOLL. I desire to ask the chairman of the Committee on Appropriations whether the report of the civil engineer of the Interior Department with reference to the repairs of the Long bridge has been submitted to the committee.

Mr. STEVENS. I believe that no formal report has been submitted.

Mr. INGERSOLL. I may be allowed to state that some weeks since a formal report from the civil engineer of the Interior Department was presented to the Secretary of the Interior; and that report showed that an expenditure of $16,200 would be required for making the necessary repairs of this bridge.

Mr. STEVENS. I believe we did receive such a report, but the Commissioner of Public Buildings has made an examination in com. pany with a competent bridge-builder, and they have reported to the committee that $10,000 will be sufficient to do the work.

There being no objection, the joint resolution was ordered to be engrossed and read a third time; and being engrossed, it was accordingly read the third time and passed.

Mr. STEVENS 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.

PREVENTION OF SMUGGLING.

Mr. ELIOT. I move that Senate bill No. 222, entitled "An act further to prevent smuggling, and for other purposes,' "" now on the Speaker's table, be ordered to be printed. The motion was agreed to.

RICHARD W. MEADE,

Mr. WOODBRIDGE. I ask unanimous consent to introduce a joint resolution refer ring the claim of the estate of Richard W. Meade to the Court of Claims. The Senate, by its resolution at the last session of Congress, referred this back to the Court of Claims, but it was decided that the case must be referred by joint action of both Houses of Congress. I do not think there can be any objection to the reference.

Mr. LAWRENCE, of Ohio. I object. I think the matter should be referred for examination.

The joint resolution was introduced, read a first and second time, and referred to the Committee on the Judiciary.

BOUNTIES OF VETERAN VOLUNTEERS. Mr. BROMWELL. I ask unanimous consent to introduce the following bill to compute the bounties of veteran volunteers so as to protect the rights of such :

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That in computing the amount of bounty money allowed by any law to veteran volunteers, the sum of $100 heretofore received by any such veteran as part of his veteran bounty shall be exempt and in no way deducted from the bounty money allowed him; but that every veteran volunteer shall receive bounty at the rate of eight and one third dollars per month for the time of his service during the period of his first enlistment, in addition to and without in any way counting his bounty as a veteran.

There was no objection, and the bill was read a first and second time, and referred to the Committee on Military Affairs.

ADDITIONAL POLICE FORCE.

Mr. LATHAM, by unanimous consent, submitted the following resolution; which was read, considered, and agreed to:

Resolved, That the Committee on Public Buildings and Grounds be instructed to inquire into the expediency of authorizing the Commissioner of Public Buildings and Grounds to employ additional temporary police force in and around the Smithsonian grounds.

ARMORY AT ROCK ISLAND.

On motion of Mr. COOK, Senate bill No 330, making further provision for the establishment of an armory and arsenal of construction, deposit, and repair on Rock Island, Illinois, was taken from the Speaker's table, read a first and second time, and referred to the Committee on Military Affairs.

LEAVE OF ABSENCE.

On motion of Mr. ANCONA, leave of absence was granted to his colleague, Mr. BOYER, until June 4.

DUNDAS PATENT.

Mr. CULLOM, by unanimous consent, submitted the following resolution; which was read, considered, and agreed to:

Resolved, That the Secretary of the Interior be

requested to communicate to this House whether any application has been made for the reissue of the Dundas patent for cultivators; and if so by whom, and at what time, and upon what grounds; and to transmit to this House copies of all the papers and documents connected with the applications; and also to state what effect it will have upon the agricultural interests of the country to reissue said patent and have the same relate back and cover the essential improvements made since the year 1851; and also further to communicate what legislation is necessary to protect the interests of the public in regard to such rcissues of patents.

Mr. CULLOM moved to reconsider the vote by which the resolution was adopted; and also

moved that the motion to reconsider be laid upon the table.

The latter motion was agreed to.

PERSONAL EXPLANATION.

Mr. LAWRENCE, of Pennsylvania. Mr. Speaker, I rise to a very brief personal explanation, and will consume only a moment. A few days since, in casual debate in the House, I referred to some of the recent appointments in western Pennsylvania, and especially the case of Colonel Samuel McKelvy, whose name was sent to the Senate for marshal of western Pennsylvania. I said in substance that he was dismissed from the service of the United States on charges implicating his integrity as a man and an officer. I made this statement on verbal information, which I considered perfectly reliable at the time. I have since examined the proceedings of the court-martial and find Colonel Mekelvy was tried on a single charge, plead guilty, and was temporarily dismissed; but on a full explanation of the whole charge was restored. As I have no disposition to do any man injustice I have thought it due to myself to make this correction.

TAX BILL.

Mr. MORRILL moved that the rules be suspended, and that the House resolve itself into the Committee of the Whole on the state of the Union on the special order.

The motion was agreed to.

So the rules were suspended; and the House accordingly resolved itself into the Committee of the Whole on the state of the Union, (Mr. DAWES in the chair,) and resumed the consideration of the special order, being a bill of the House (No. 513) to amend an act entitled "An act to provide internal revenue to support the Government, to pay interest on the public debt, and for other purposes," approved June 30, 1864, and acts amendatory thereof.

The pending question was on Mr. SCHENCK'S motion to amend section thirty-three by inserting after the sentence ending with these words, but no compensation shall be allowed to such inspector for more than one inspection of such spirits," the words "and no inspector shall continue on duty at one and the same distillery for more than sixty days continuously."

The amendment was disagreed to. Mr. MORRILL. I call up the following amendment:

The Clerk read the amendment, as follows: On page 103, line twenty-three hundred and thirtynine, strike out from the beginning of the line to the end of line twenty-three hundred and fifty-five on page 104 and insert in lieu thereof the following:

That section one hundred and three be amended by striking out all after the enacting clause and inserting in lieu thereof the following: that every person, firm, company, or corporation owning or possessing or having the care or management of any railroad, canal, steamboat, ship, barge, canal-boat or other vessel, or any stage-coach or other vehicle engaged or employed in the business of transporting passengers for hire, or in transporting the mails of the Unicontracts made prior to the passage

ted Stateshall be subject to and pay a tax of two and

of this act,

one halfper cent. of the gross receipts from passengers and mails of such railroad, canal, steamboat, ship, barge, canal-boat, or other vessel, or such stage-coach or other vehicle: Provided, That the tax hereby imposed shall not be assessed upon receipts for the transportation of persons or mails between the United States and any foreign port; but such tax shall be assessed upon the transportation of persons from a port within the United States through a foreign territory to a port within the United States, and shall be assessed upon and collected from persons, firms, companies, or corporations within the United States, receiving hire or pay for such transportation of persons or mails. And so much of section one hundred and nine as requires returns to be made of receipts hereby exempted from tax when derived from transporting property for hire is hereby repealed:

Provided also, That any person or persons, firms, companies, or corporations, owning, possessing, or having the care or management of any toll-road, ferry, or bridge, authorized by law to receive toll for the transit of passengers, beasts, carriages, teams, and freight of any description, over such toll-road, ferry, or bridge, shall be subject to and pay a tax of three per cent. of the gross amount of all their receipts of every description; but when the gross receipts of any such bridge or toll-road, for and during any term of twelve consecutive calendar months, shall not exceed the amount necessarily expended to keep such bridge or road in repair, no tax shall be assessed upon such receipts during any month next following any such term: And provided further, That all such persons, firms, companies, and corporations shall have the right to add the tax imposed hereby to their rates of fare whenever their liability thereto may commence, any limitations which may exist by law or by agreement with any person or company which may have paid or be liable to pay such fare to the contrary notwithstanding: And provided further, That no tax under this section shall be assessed upon any person, firm, company, or corporation whose gross receipts do not exceed $1,000 per annum: And provided further, That boats, barges, and flats, not used for carrying passengers nor propelled by steam or sails, which are floated or towed by tug-boats and used exclusively for carrying coal, oil, minerals, or agricultural products to market, shall be required hereafter in lieu of enrollment fees or tonnage tax, to pay an annual special tax for each and every such boat of a capacity exceeding twenty-five tons, and not exceeding one hundred tons, five dollars; and when exceeding one hundred tons as aforesaid shall be required to pay ten dollars; and said tax shall be assessed and collected as other special taxes provided for in this act.

Mr. MORRILL. The point in dispute was, I think, in relation to the right of railroads to charge the tax on their passenger fares. I believe it would operate very oppressively not to allow them in some parts of the country to charge it, especially horse railroads not now paying their expenses.

Mr. HOOPER, of Massachusetts. There is one amendment accidentally omitted. After the words "transporting passengers for hire" I move to insert "except hacks or carriages not running on continuous routes."

The amendment was agreed to.

Mr. HOTCHKISS. I thought it was understood that the amendment I offered was to be printed with the other amendments.

Mr. MORRILL. The whole matter was referred to the committee, and we reported this.

Mr. FARNSWORTH. I move to amend by striking out that portion which provides that these corporations may charge to the passengers the amount of this tax. It is the third proviso.

The question being taken on the motion to strike out the aforesaid proviso, no quorum voted.

Tellers were ordered; and the Chairman appointed Messrs. FARNSWORTH and DAVIS. The committee divided; and the tellers reported-ayes sixty-seven, noes not counted. So the amendment was agreed to.

Mr. HOTCHKISS. I would inquire if the amendment, as reported by the committee, repeals the provision of section ten of the act of last year.

Mr. MORRILL. That section is already repealed.

Mr. HOTCHKISS. I desire to move an amendment so as to reserve horse railroads. I believe the proviso stricken out includes horse railroads, and there are many of them that cannot live at the present rates of fare if they have to pay this tax.

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Mr. HOOPER, of Massachusetts. I move an amendment by inserting after the words tug-boats" the words "or horses;" so that it will read, which are floated or towed by tug-boats or horses."

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The amendment was agreed to.

Mr. WILSON, of Iowa. I would inquire whether it was intended to exempt all boats carrying mails from tax upon the receipts from passengers.

Mr. HOOPER, of Massachusetts. My amendment simply applied to hacks and carriages not running on continuous routes.

Mr. WILSON, of Iowa. I think the section as amended will exempt coaches carrying mails from this tax.

Mr. PIKE. I would like to know why these

special exemptions should be made. I am
willing to do the fair thing and strike out the
tonnage tax all around.

Mr. WILSON, of Iowa. I think the sec-
tion as amended on motion of the gentleman
from Massachusetts [Mr. HOOPER] exempts all
coaches carrying mails from the payment of
taxes on receipts from passengers. If that is
the intention of the committee I am entirely
satisfied, but if it is not I think it had better
be looked at.

Mr. MORRILL. As the amendment was reported by me from the Committee of Ways and Means, it certainly did not have that intent or meaning I do not know exactly how or where the amendment of the gentleman from Massachusetts was inserted, or exactly what effect it may produce. It is possible that the gentleman from Iowa is correct, and that it would exempt stage-coaches. I think it might exempt more than the gentleman from Massachusetts intended. I suppose he merely intended to exempt the hacks that ply about our cities.

Mr. HOOPER, of Massachusetts. That is all that is embraced in it.

Mr. MORRILL. I ask the Clerk to read the amendment as amended.

The amendment as amended was again read. The question was taken on Mr. MORRILL'S amendment, and it was agreed to.

Mr. HOTCHKISS. I move to add to the amendment just adopted the following additional proviso:

Provided, That all such persons, companies, or corporations operating any horse railroad shall have the right to add the duty or tax to their rate of fare.

This amendment applies only to our street railroads. It is represented on the part of the friends of these roads that they have already made their rates of fare as low as they can reduce them and sustain their roads. I desire, for one, to encourage these roads in every town in the country that can sustain one. They are the poor man's railroad-the poor man's carriage. They provide him means of transportation when he cannot obtain it in any other way. They take the poor man to church on the Sabbath and take his children to school on week days. I hope the experiment will be tried for a few years, and if we find that they can bear a reduction upon their charges, or can bear additional taxation, we can lay it on with a heavy hand. But it is, after all, a mere experiment, and we can alter this provision if we find it does not work well.

Mr. STEVENS. I should a great deal rather see these railroad fares altered so as to enable them to charge enough. The idea of laying a tax upon railroads, and allowing them to charge it to the passengers, is not according to my views of legitimate legislation. I know that there is one railroad in this city that is doing well. I know another one that never will do well unless it has passengers. [Laughter.] I am opposed to this system. I would rather authorize them to charge more fare, and then we shall know exactly what we have to pay.

Mr. DODGE. I move to strike out the last word of the amendment. The remarks of my colleague from New York [Mr. HOTCHKISS] may be very correct in regard to the railroads in the smaller towns and cities; but we find in New York city that our street railroads there are very oppressive. They have obtained a right to run through our streets; they have obtained very valuable franchises on the condition that they would transport people from the lower to the upper part of the city, the poor men that the gentleman refers to, the mechanics, the men who cannot afford to walk two or three miles to their business. They got these valuable franchises because they would agree to carry passengers at a given fare. If this amendment passes they will be authorized to add this two and a half per cent. tax upon all these poor persons that the gentleman refers to. I hope the amendment, so far as horse railroads in the large cities are concerned, will not be adopted.

Mr. DAVIS. I believe that there is no measure of justice more worthy of our consid

eration at this time than that proposed by the amendment of my colleague, [Mr. HOTCHKISS.] He has already stated the beneficial nature and character of these railroads; that they are designed, not only for the general convenience of the public, but for the special advantage of the poor. That is the case in all our large cities and flourishing towns; the poor derive vast benefit from them. Now, if you go to the city of New York, you will find that these railroads are the avenues by which the poor leave the city to pass a few hours in the country and breathe the pure country air. As a sanitary measure and institution I insist that these city roads are entitled to our encourage

ment.

It has been stated by my colleague from the city of New York [Mr. DODGE] that these railroad grants for the city of New York were obtained by the individuals controlling them from the Legislature of New York without compen sation, and therefore he would create a prejudice against these corporations. Even if that were the case they are no less beneficial to the community when constructed. Now, the parties owning these roads at this time are not the men who procured these grants from the Legislature, but they are men who have paid a compensation for all they have. Since 1860, when these grants were made, every article required in the construction and equipment of railroads has enhanced in value more than one hundred per cent. I state it on my own per sonal knowledge, that a road which in 1861 could have been built for $10,000 a mile will now cost $25,000 a mile.

Mr. STEVENS. Now, I want to know, as a mere matter of arithmetic, one thing from the gentleman from New York, [Mr. Davis.] The poor people now can ride, or could ride without this law, for five cents; and it is proposed to add a cent to each fare. I want to know how much that takes off from their burdens.

Mr. DAVIS. It adds a great benefit to them. [Laughter.] That is the reason of my argument, for I say that upon a fare of five cents there is not a city railroad in New York that will support itself.

Mr. STEVENS. Suppose you add two cents to each fare, then that will double the benefit. Mr. DAVIS. Undoubtedly it will. And I think it is perfectly proper for these corporations, whose fares are limited by their charters or by municipal regulations, to add the Federal tax to the rate of fare. Why should we apply a different principle to a railroad corporation than we apply to an individual? An individual has a right, if he be taxed by this Government, to add the amount of his tax to the commodities in which he deals. A corporation has no such power, because it is the creature of legislation. And therefore when we come to lay our hands upon them we should be careful to give them the means of relief.

Mr. DODGE withdrew his amendment to the amendment of Mr. HOTCHKISS.

Mr. MORRILL. I move that the committee rise for the purpose of closing debate on the pending paragraph.

The motion was agreed to.

So the committee rose; and the Speaker having resumed the chair, Mr. DAWES reported that the Committee of the Whole on the state of the Union had had under consideration the Union generally, and particularly the special order, being bill of the House No. 513, to amend an act entitled "An act to provide internal revenue to support the Government, to pay interest on the public debt, and for other purposes," approved June 30, 1864, and acts amendatory thereof, and had come to no resolution thereon.

CLOSE OF DEBATE.

Mr. MORRILL. I move that all debate in Committee of the Whole on the state of the Union on the pending paragraph of the special order terminate in one minute after the committee shall resume the consideration of the subject.

The motion was agreed to.

TAX BILL-AGAIN. Mr. MORRILL. I move that the rules be suspended, and that the House resolve itself into the Committee of the Whole on the state of the Union on the special order.

The motion was agreed to.

So the rules were suspended; and the House accordingly resolved itself into the Committee of the Whole on the state of the Union, (Mr. DAWES in the chair,) and resumed the consideration of the special order, being a bill of the House (No. 513) to amend an act entitled

An act to provide internal revenue to support the Government, to pay interest on the public debt, and for other purposes," approved June 30, 1864, and acts amendatory thereof.

The pending question was upon the amend ment of Mr. HOTCHKISS to allow horse railroads to add their tax to their fares.

Mr. HARDING, of Illinois. I move to strike out the last word for the purpose of proposing an inquiry to the gentleman from New York, [Mr DAVIS.] I want to know from him, why not apply the same principle to notes bearing interest which are taxed? A note bearing six per cent. is taxed; why not allow the tax to be added to the rate of interest allowed? [Laughter.]

Mr. DAVIS. I did not hear the question of the gentleman from Illinois, [Mr. HARDING.] The CHAIRMAN. Debate is closed on this paragraph, by order of the House.

Mr. STEVENS. I move that the gentle man from New York [Mr. DAVIS] be allowed two minutes to answer the question. [Laughter.]

Mr. DAVIS. I did not hear the question. I will attempt to answer any question I understand.

The CHAIRMAN. No debate is in order. The amendment of Mr. HOTCHKISS was not agreed to.

Mr. LYNCH. I move to amend by inserting at the end of the third proviso of the amendment last adopted the following:

Nor upon the receipts of any horse railroad running in one or more towns or cities whose population in the aggregate, according to the last preceding census, does not exceed forty thousand persons.

The amendment was not agreed to. The Clerk proceeded to read section fortyfive, but was interrupted by

Mr. LYNCH, who said: I rise to a point of order, which is that I called for a vote by division on my amendment immediately after the result of the viva voce vote was announced.

The CHAIRMAN. That is not a question of order, but a question of fact. If the gentleman states that he called for a division in time, the Chair will put the question again.

Mr. LYNCH. I certainly did. The CHAIRMAN. That is sufficient. The question being again put on the amend ment of Mr. LYNCH, there were, on a division -ayes eighteen, noes not counted.

Mr. ANCONA called for tellers.
Tellers were not ordered.

So the amendment was rejected.

Mr. LYNCH. I move to amend by inserting at the end of the third proviso of the amendment last adopted to section forty-four the following:

Nor upon any person, firm, company, or corporation engaged in transporting property or passengers for hire whose gross receipts upon such transporta tion do not exceed their current expenses.

The CHAIRMAN. That amendment is not in order, the committee having passed the section to which the amendment was offered.

The Clerk continued and concluded the reading of section forty-five, as follows:

SEC. 45. And be it further enacted, That any spirits or other merchandise may be removed from bonded warehouse, for the purpose of being exported, upon the order of the superintendent of exports for the port whence the spirits are to be exported; and such order shall state the port to which such spirits are to be shipped, and the name of the vessel, and also the number of proof gallons, and the marks of the packages or casks, which shall be taken from and shall agree with the return of said spirits made by the inspector of the warehouse; and such spirits or other merchandise shall be branded "U. S. bonded warehouse, for export," and shall be put on board of the

vessel in or by which they are to be exported, by an officer under direction of the superintendent of cxports, and placed under the supervision of an officer of the customs, after a bond shall have been given in such form and containing such conditions as the Commissioner of Internal Revenue may prescribe, with one or more sureties, to be approved, as to the sufficiency of the sureties, as the Commissioner of laternal Revenue may direct. And such bond shall be canceled upon the presentation of the proper certificate that said spirits have been landed at the port named in said bond, or at any other port without the jurisdiction of the United States, or upon satisfactory proof that after shipment the spirits have been lost. And at any port where there shall be no superintendent of exports, all the duties and services required of superintendents of exports and drawback shall devolve upon and be performed by the collector of internal revenue designated to have charge of exportations.

Mr. MORRILL. In section twenty-nine, which was reserved last night upon the suggestion of the gentleman from Illinois, the Committee of Ways and Means have concluded to make such amendments as will not prevent alcohol from being distilled with whisky or other spirits. I therefore move to amend by striking out in line eight of that section the words or alcohol," and inserting before the word "ether" the word "or;" so that the clause will read:

And no still, boiler, or other vessel shall be used as aforesaid in any building or on any premises where beer, lager beer, ale, porter, or other fermented liquors, vinegar, or ether, are manufactured or produced, or where sugars or sirups are refined, or where liquors of any description are retailed, or any other business is carried on.

The amendment was agreed to.

Mr. MORRILL. I move also to amend the forty-fourth section by striking out, after the word "packages" in the fifty-fourth line, the words for export;" so that the clause will read:

66

Or for the purpose of being rectified, or redistilled, canned, or put into other packages, under such rules and regulations and the execution of such bonds or other security as the Secretary of the Treasury may prescribe.

The amendment was agreed to.

Mr. ALLISON. I move to amend section twenty-five by inserting after the word "thereof" in line thirty-six the following:

And such assessed penalties and fines when recoyered shall be distributed according to law.

The amendment was agreed to.

Mr. ALLISON. I move to amend section thirty-five by inserting after the words "proof thereof" in line thirteen, the following:

And the number of gallons sold, with the proof thereof and the name and place of business of the person to whom sold.

The amendment was agreed to.

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Mr. COBB. I desire to move several amendments to section twenty-nine, which has been reserved. I move, in the first place, to amend by striking out in the fourth line of that section the words "beer, lager beer, ale, porter, or other fermented liquors.' It may be, Mr. Chairman, that there are abundant reasons for this provision of the bill, which I suppose is intended as a precautionary measure for the prevention of frauds upon the revenue. not sufficiently acquainted with the investigations upon this subject to know to what extent that reason may apply or be a good one.

I am

It seems to me, after having adopted the very perfect system of machinery for the prevention of fraud of inspectors, vats, receivers, and all that, it will scarcely lie in the mouth of the committee or the Government to say it will be impossible to prevent fraud upon the Treasury in cases where a still may be kept in the same establishment with a brewery. I know from my limited observation of the matter that in some of the breweries in the West, and I presume it is so elsewhere, it is necessary, in order to save matter which becomes to some extent damaged in certain kinds of weather or by some unskillful manipulations, to use it for purposes of distillation. Hence, in most of the breweries they have a small distilling apparatus with which they use up this matter which is unfit for brewing and would otherwise go to waste. I think, therefore, a serious loss will be incurred by these brewers if they are not permitted to use this apparatus. I do not believe it is necessary to make this prohibition

for the purpose of protecting the revenue of the country. Knowing that some of my constituents have this machinery and would suffer loss by any such prohibition, I have deemed it proper to submit this amendment.

Mr. GARFIELD. Mr. Chairman, I hope the amendment of the gentleman from Wisconsin will not prevail. I may safely say a majority of the cases of fraud during last year have been in establishments where stills were kept in connection with beer breweries. Sour beer can be manufactured into spirits, and a little still may be concealed among the machinery of a large lager-beer brewery. These stills are there and it is hard to get at them. The system of inspection for spirits does not apply to fermented liquors, and therefore if we allow little stills to be set up in the mass of machinery in a lager-beer brewery, it will be impossible to reach them. It may be a small loss to the parties, but a very small loss, because they can always sell this sour beer to the distilleries. If these words are stricken out it will seriously impair the efficiency of the law.

Mr. PAINE. I would suggest to my colleague to strike out the same words in line seven. I corroborate the statement made by him in respect to the practice in our State. I believe there is no dispute about it. The practice has grown up in breweries, numerous in our part of the world, of having these stills to save damaged stuff from going to loss; and the adoption of this provision will work serious injury to many who are engaged in these breweries. It seems to me there ought to be some arrangement by which honest brewers should be permitted to continue to use these stills.

It will enable them to turn to account what would otherwise be wasted. I suggest the Committee of Ways and Means may devise a system of inspection to cover the case.

Mr. GARFIELD. If the gentleman will look at the concluding paragraph of the fiftyfifth section he will see there has been an allowance made of seven and a half per cent. for the purpose of covering the loss they may incur by the waste of sour beer. It need not be wasted, as it can be sold to the distillers. We have preferred to make that allowance rather than to let these stills remain in these breweries. If the amendment prevails then the whole system of inspection to distilleries will be applied to the breweries.

Mr. COBB's amendment was rejected.

Mr. COBB. I move to strike out the same words in line seven.

Now, Mr. Chairman, there is not a sub-district in the United States where the deputy assessor, if he is fit for his business, does not know every single brewery which has a distillery attached and the amount of liquor distilled. I cannot see why a man cannot be a distiller and a brewer as well as a lawyer and a claim agent.

The amendment was not agreed to.

Mr. HOOPER, of Massachusetts. I move to amend on page 152, line fifteen, by inserting at the commencement of it the words " or in any dwelling-house.

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The amendment was agreed to.

Mr. HARDING, of Illinois. I understood the chairman of the committee to declare that they were willing to make an amendment by which alcohol could be distilled in a distillery where they distill spirits. They have made an amendment which they declared to have that end and effect. Now, I think the language is ambiguous; therefore I propose that it shall be explicitly stated in the third line of the twenty-third section.

Mr. HOOPER, of Massachusetts. We are on the twenty-ninth section, and I suggest that we had better finish it.

Mr. HARDING, of Illinois. I ask unanimous consent to offer it to section twenty-three. Mr. GARFIELD. Let it be read.

Mr. HARDING, of Illinois. Section twentythree reads as follows:

That every person, firm, or corporation who distills or manufactures spirits, or who brews or makes mash,

wort, or wash, for the distillation or the production of spirits, shall be deemed a distiller under this act. I propose to amend by adding after the word "spirits" the words or alcohol by continuous distillation from grain."

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Mr. GARFIELD. That is right.
The amendment was agreed to.

Mr. ALLISON. I move an amendment on page 14, after line one hundred and twenty-two, which I send to the desk. This paragraph was reserved.

The Clerk read the amendment, as follows: And in addition to other provisions of law whenever fraud is alleged as to any list or return, and the party charged with fraud shall make denial of the same in writing and shall demand a hearing thereon, and shall tender to the assessor of the proper district a bond with two or more sureties payable to the United States, in a sum not less than double the amount of the tax, together with the penalties assessed because of such alleged fraud, and conditioned that such person will abide by the orders and judgments of the court before whom such case shall be heard, and will pay whatever sum may be adjudged against him for tax or penalty, or both, and also all costs that may be adjudged against him. And upon the approval of such bond by such assessor it shall be the duty of such assessor to transmit to the district attorney of the United States for the district within which such collection district is situated all the papers in the case; and it shall also be the duty of said district attorney to immediately institute in the proper circuit or district court of the United States a suit for the recovery of the tax, penalties, or forfeitures assessed or incurred because of such alleged fraud, and the same shall be prosecuted to judgment as in other cases, and such cases shall have precedence over other civil cases on the calendar of such court. And until final judgment all proceedings by the assessor and collector shall be suspended; and in case of seizure of property, the property seized shall be released upon the approval of the bond herein provided for; but nothing herein contained shall be construed to affect in any manner proceedings by indictment as provided by law.

Mr. ALLISON. This provision is inserted to meet the objection to the section made by the gentleman from Pennsylvania. It is the same provision offered by him with some additions and erasures.

The amendment was agreed to.

Mr. HOLMES. I offer the following amendment to the same section:

On page 13, line ninety-three, after the word "proper" insert the words "not inconsistent with the provisions of existing laws for the punishment of contempt."

The amendment was agreed to.

Mr. THAYER. I wish to call the attention of the committee to an amendment which was offered to this section when we had it under consideration. It was offered by myself, to incorporate in this section the provision of a subsequent section in regard to the payment of witness fees on preliminary examinations by assessors, and the payment of mileage to assessors in such cases. It would come in immediately preceding the amendment last adopted. I move, after the word "purpose," in line one hundred and twenty-two, to insert the following:

When the assessor is required or compelled to travel to make examinations, as provided in this section, he shall be allowed mileage and his necessary and proper traveling expenses. The costs for the attendance and mileage of witnesses shall be taxed by the assessor and paid by the delinquent parties, or otherwise by the collector of the district on certificate of the assessor, at the rates usually allowed in said district for witnesses in district courts of the United States.

Mr. ALLISON. No objection to that.
The amendment was agreed to.

Mr. RANDALL, of Kentucky. I desire to offer an amendment to section thirty-six. The CHAIRMAN. That section has been passed.

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Mr. RANDALL, of Kentucky. I ask the unanimous consent of the committee to go back to that section.

Mr. ALLISON. Imust object to going back. Mr. DAVIS. I move to strike out on pages 117 and 118, beginning at line twenty-six hundred and ninety-nine, the following:

That it shall not be lawful to record any instrument, document, or paper required by law to be stamped, unless a stamp or stamps of the proper amount shall have been affixed, and canceled in the manner required by law; and the record of any such instrument, upon which the proper stamp or stamps aforesaid shall not have been affixed and canceled as aforesaid, shall be utterly void, and shall not be used in evidence.

And to insert in lieu thereof the following: It shall be unlawful, from and after the passage of this act, to record any instrument, document, deed, mortgage, or other paper required or authorized by law to be recorded, unless such stamp or stamps as shall be required thereon by law shall be affixed thereto and duly canceled; and the record of any such instrument, or the record of any instrument heretofore recorded, upon which the proper stamp or stamps aforesaid shall not have been affixed and canceled as required by law, shall be invalid and of no effect, except as constructive notice of the interest acquired by the purchaser, grantee, or mortgagee of any real estate interest under any contract, decd, or mortgage which may have been recorded without being properly stamped, as provided by law; and neither the original instrument nor the record thereof shall be used in evidence for any other purpose until the original instrument or a certified copy thereof, if the original shall be lost, shall have been duly stamped, so as to entitle it to be recorded under the provisions of this act or the act hereby amended; and when the original instrument, or a certified copy thereof, as aforesaid, shall have been duly stamped, so as to entitle the same to be recorded, shall be presented to the clerk, register, or other officer having charge of the original record, it shall be the duty of such officer, upon the payment of the fee legally chargeable for the recording thereof, at the option of the party presenting such instrument, to make a new record thereof or to note upon the original record the fact that the error or omission in the stamping of said original instrument has been duly corrected pursuant to law; and after such record or entry the ori ginal instrument or such certified copy or the record thereof may be used in all courts and places in the same manner and with like effect as if the instrument had been legally entitled to record when first recorded: Provided, That no right acquired in good faith before the proper stamping of such instrument or copy, and the recording or entry aforesaid, shall be affected or impaired by such correction of the stamping aforesaid.

I offer that amendment for the purpose of correcting what I believe would operate unjustly in many cases unless the correction shall be made. There are many cases in which conveyances have been made and recorded which have not been properly stamped according to law. It has been done in good faith and without intent to defraud the Government.

Mr. WILSON, of Iowa. The one hundred and fifty-second section of the existing law provides that an unstamped recorded instrument shall be of no effect whatever. The amendment of the gentleman proposes to go back and constitute all of these unstamped records constructive notice of what they con tain. Now, that is all they could be as recorded instruments if they had been properly stamped; so that all the interests which may have been acquired prior to the passage of this act, whether in good faith or not, are covered by the provision in the first part of this section declaring that all of these unstamped deeds shall be constructive notice to all persons of their contents. This amendment would be a great deal worse than the existing law.

Mr. ALLISON. I rise to oppose the amend

ment.

Mr. DAVIS. I desire to say a word on my amendment.

The CHAIRMAN. The gentleman will say his word now.

Mr. DAVIS. What I wish to accomplish by my amendment is simply to protect these par ties who have acted in good faith in placing these unstamped instruments on record; and not allow a person, finding by an examination of the record that there is an instrument upon record which has accidentally been illegally recorded, to avail himself of this act which we attempt here to pass to defeat the title of an honest and innocent party.

Mr. WILSON, of Iowa. The case the gentleman now puts, if such a case should occur, would not be constructive notice to the party who should examine the record, but it would be actual notice by bringing that fact to the knowledge of the parties. Now, the difficulty with the amendment of the gentleman is that instead of providing for a case of the kind he has stated he provides that these unstamped instruments shall be constructive notice by being upon the record. Now, if the gentleman desires to provide that actual notice of the existence of the interest embraced in one of these unstamped instruments shall save the party holding it from any injury by a subsequent purchaser having knowledge of the illegality of the record, that is a very different

thing. But when he begins by providing that these cases shall all be covered by constructive notice, then he is trenching upon ground that we should not trench upon, for it may interfere with thousands of titles.

Mr. DAVIS. I would like to ask the gentleman from Iowa, [Mr. WILSON]

The CHAIRMAN. The gentleman from New York [Mr. DAVIS] has one half minute left.

Mr. DAVIS. Then I will take some other opportunity.

and in such case, if such instrument," the words "or if the original be lost a copy thereof duly certified by the officer having charge of real estate records in the proper town or county."

Mr. HUBBARD, of Iowa. I would like to ask my colleague one question: how can you obtain a certified copy of an instrument which has not been recorded and which has been lost?

Mr. ALLISON. Of course you cannot have a certified copy unless the instrument has been recorded; but an instrument may be lost after being recorded.

Mr. DAVIS. I desire to say to the gentleman from Iowa that my purpose has been to protect parties in those cases where papers have already been recorded without being stamped, when the parties have acted in good

faith.

Mr. ALLISON. I rise to oppose the amendment of the gentleman from New York, [Mr. DAVIS.] The portion he proposes to strike out is substantially the provision of the existing law. And there is nothing whatever in his amendment which will really require instruments to be stamped, because the same provision which makes these unstamped instruments void, except when constructive notice is given, will authorize any party to place on record an instrument not stamped, provided he afterward places a stamp on the original; and in the mean time the document so illegally recorded is constructive notice to every man who may purchase the property. So that in effect the unstamped instrument so recorded would have the same effect as though prop-cording of the instrument and then provide for erly stamped and recorded.

Therefore it is that we must have a provision by which the revenue will be protected. And in order to protect the revenue it is necessary to provide that these instruments recorded without being stamped shall be absolutely void and of no effect. The Committee of Ways and Means have prepared an amendment, providing that parties who have neglected to stamp these instruments through inadvertence or some fault not criminal, may upon a proper showing to the collector of the district still stamp the original instrument and place it upon record. And in case the original is lost, we have added a provision which authorizes the stamping of the copy of the instrument.

Mr. THAYER. The gentleman will allow me to correct what evidently was an inadvertence in the statement of the gentleman from Iowa, [Mr. ALLISON.] The proviso he refers to was not prepared by the Committee of Ways and Means, but was offered by myself at the last session.

Mr. ALLISON. Well, I do not want to take any special credit to the committee.

Mr. THAYER. I only desire to have the history of that legislation correctly stated. The Committee of Ways and Means opposed my proviso very strongly, but I carried it in the House over their opposition.

Mr. WILSON, of Iowa. I would ask the gentleman from Pennsylvania [Mr. THAYER] if that proviso was stamped when he placed it on record, for it is notice to everybody. [Laughter.]

Mr. ALLISON. The committee have already adopted some of the provisions contained in the amendment of the gentleman from New York, [Mr. DAVIS.] But unfortunately he does not propose to insert them in the proper place; therefore we propose to insert the provision so as to relate to section one hundred and fifty-eight of the present law, in the paragraph relating to that subject, instead of where the gentleman from New York proposes. Therefore, I hope the amendment proposed by him will be voted down, when the committee will propose the amendment I have indicated.

Mr. DAVIS. I withdraw my amendment.

Mr. ALLISON. I now move to insert in the paragraph relating to section one hundred and fifty-eight of the present law, after the words, "And provided further, That where it shall appear to said collector upon oath, or otherwise, to his satisfaction, that any such instrument has not been duly stamped at the time of making or issuing the same, by reason of accident, mistake, inadvertence, or urgent necessity, and without any willful design to defraud the United States of the stamp duty, or to evade or delay the payment thereof, then

Mr. HUBBARD, of Iowa. For the purpose of saying a word or two, I move to amend the amendment by striking out the last word. As I understand this provision, in the first place, the recorder is prohibited from recording an instrument unless it has been properly stamped. Now, then, how can you have a certified copy of an instrument which has never been recorded and has been lost? You first prohibit the re

a certified copy of the instrument which has been lost or destroyed. Here is a sort of inconsistency which I do not comprehend. I withdraw my amendment to the amendment.

Mr. LONGYEAR, I move to amend the amendment by inserting after "proper recording officer of the county or township" the words "or otherwise duly proven to the satisfaction of the collector.'

Mr. ALLISON. I accept that amendment as a modification of my amendment.

The amendment, as modified, was agreed to. Mr. ALLISON. I move to amend by inserting after line twenty-eight hundred and thirtyseven, on page 123, the following:

And when the original instrument or a certified copy thereof, as aforesaid, shall have been duly stamped so as to entitle the same to be recorded, and shall be presented to the clerk, register, recorder, or other officer having charge of the original record, it shall be the duty of such officer, upon the payment of the fee legally chargeable for the recording thereof, at the option of the party presenting such instrument, to make a new record thereof or to note upon the original record the fact that the error or omission in the stamping of said original instrument has been corrected pursuant to law; and after such record or entry the original instrument or such certified copy or the record thereof may be used in all courts and places in the same manner and with like effect as if the instrument had been legally entitled to record when first recorded: Provided, That no right acquired in good faith before the stamping of such instrument or copy thereof and the record thereof, as herein provided, shall in any manner be affected by such stamping as aforesaid.

The amendment was agreed to.

Mr. HALE. I move to amend by inserting at the end of line twenty-five hundred and ninetysix, on page 113, the following:

Provided, That no penalty shall be assessed upon any person for such neglect or refusal, or for making or rendering a false or fraudulent return, except after reasonable notice of the time and place of hearing, to be regulated by the Commissioner of Internal Reyenue, so as to give the person charged an opportunity to be heard, and subject to the right of giving bond and staying proceedings for the purpose of a hearing in a circuit or district court, as provided in the fourteenth section of this act.

This amendment simply makes this paragraph conform to the fourteenth section as amended. I think it must commend itself to the judgment of the committee.

The amendment was agreed to.

Mr. SHELLABARGER. I move to amend by inserting after the amendment just adopted the following:

And provided further, That no prosecutions for fraud or wrongful evasion of any of the provisions of this act shall be commenced until after the person accused or his agent or attorney shall have been notified in writing by the person charged with such prosecution of the offense of which he is charged, nor until after he shall have had opportunity to pay the penalty and other liability of the Government for which such prosecution is authorized: Provided, however, Such notice shall not be required where such prosecutor shall be satisfied that such notice would defeat the collection of the demands due the Government.

Mr. Chairman, cases have occurred in which

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